TCW DW INCOME & GROWTH FUND
485BPOS, 1996-03-26
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<PAGE>
   
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 1996
    
 
                                                     REGISTRATION NOS.: 33-55218
                                                                        811-7372
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                ----------------
 
                                   FORM N-1A
 
                             REGISTRATION STATEMENT
 
                        UNDER THE SECURITIES ACT OF 1933                     /X/
 
                          PRE-EFFECTIVE AMENDMENT NO.                        / /
 
   
                         POST-EFFECTIVE AMENDMENT NO. 4                      /X/
    
 
                                     AND/OR
 
              REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
 
                                  ACT OF 1940                                /X/
 
   
                                AMENDMENT NO. 5                              /X/
    
                              -------------------
 
                         TCW/DW INCOME AND GROWTH FUND
 
                        (A MASSACHUSETTS BUSINESS TRUST)
 
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
 
                             TWO WORLD TRADE CENTER
                            NEW YORK, NEW YORK 10048
 
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
 
                              SHELDON CURTIS, ESQ.
                             TWO WORLD TRADE CENTER
                            NEW YORK, NEW YORK 10048
                    (NAME AND ADDRESS OF AGENT FOR SERVICE)
 
                                    COPY TO:
                            DAVID M. BUTOWSKY, ESQ.
                  GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN
                              114 WEST 47TH STREET
                            NEW YORK, NEW YORK 10036
                              -------------------
 
   APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
                this Post-Effective Amendment becomes effective.
                              -------------------
 
 IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
 
   
           ___X_ immediately upon filing pursuant to paragraph (b)
    
 
   
           _____ on (date) pursuant to paragraph (b)
    
 
           _____ 60 days after filing pursuant to paragraph (a)
 
           _____ on (date) pursuant to paragraph (a) of rule 485.
 
   
    THE  REGISTRANT HAS REGISTERED AN INDEFINITE  NUMBER OF ITS SHARES UNDER THE
SECURITIES ACT  OF 1933  PURSUANT TO  SECTION  (a)(1) OF  RULE 24f-2  UNDER  THE
INVESTMENT  COMPANY ACT OF 1940. THE REGISTRANT FILED THE RULE 24f-2 NOTICE, FOR
ITS FISCAL  YEAR  ENDED JANUARY  31,  1996,  WITH THE  SECURITIES  AND  EXCHANGE
COMMISSION ON MARCH 1, 1996.
    
 
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<PAGE>
                         TCW/DW INCOME AND GROWTH FUND
                             CROSS REFERENCE SHEET
                                   FORM N-1A
 
<TABLE>
<CAPTION>
                     ITEM                                                        CAPTION
- -----------------------------------------------  -----------------------------------------------------------------------
<S>                                              <C>
PART A                                                                         PROSPECTUS
 1.  ..........................................  Cover Page
 2.  ..........................................  Summary of Fund Expenses; Prospectus Summary
 3.  ..........................................  Financial Highlights; Performance Information
 4.  ..........................................  Investment Objective and Policies; The Fund and Its Management; Cover
                                                  Page; Investment Restrictions; Prospectus Summary
 5.  ..........................................  The Fund and Its Management; Back Cover; Investment Objective and
                                                  Policies
 6.  ..........................................  Dividends, Distributions and Taxes; Additional Information
 7.  ..........................................  Purchase of Fund Shares; Shareholder Services; Repurchases and
                                                  Redemptions
 8.  ..........................................  Repurchases and Redemptions; Shareholder Services
 9.  ..........................................  Not Applicable
 
PART B                                                             STATEMENT OF ADDITIONAL INFORMATION
10.  ..........................................  Cover Page
11.  ..........................................  Table of Contents
12.  ..........................................  The Fund and Its Management
13.  ..........................................  Investment Practices and Policies; Investment Restrictions; Portfolio
                                                  Transactions and Brokerage
14.  ..........................................  The Fund and Its Management; Trustees and Officers
15.  ..........................................  Trustees and Officers
16.  ..........................................  The Fund and Its Management; Custodian and Transfer Agent; Independent
                                                  Accountants
17.  ..........................................  Portfolio Transactions and Brokerage
18.  ..........................................  Description of Shares
19.  ..........................................  Repurchases and Redemptions; Financial Statements; Shareholder Services
20.  ..........................................  Dividends, Distributions and Taxes;
21.  ..........................................  The Distributor
22.  ..........................................  Performance Information
23.  ..........................................  Financial Statements
</TABLE>
 
PART C
 
    Information  required  to be  included  in Part  C  is set  forth  under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
PROSPECTUS
 
   
MARCH 26, 1996
    
 
TCW/DW Income and Growth Fund (the "Fund") is an open-end, non-diversified
management investment company, whose investment objective is to generate high
total return by providing a high level of current income and the potential for
capital appreciation. The Fund seeks to achieve its investment objective by
investing primarily in convertible securities, fixed-income securities and
common stocks. The Fund will invest at least 50% of its total assets in a
combination of equity securities and fixed-income securities with equity
components.
 
THE FUND MAY INVEST WITHOUT LIMITATION IN CONVERTIBLE AND FIXED-INCOME
SECURITIES RATED BELOW INVESTMENT GRADE (COMMONLY KNOWN AS "JUNK BONDS"),
although the Fund will not invest in any securities rated lower than B by
Moody's Investor's Service, Inc. or Standard & Poor's Corporation or, if not
rated, determined to be of comparable quality. INVESTMENTS OF THIS TYPE ARE
SUBJECT TO GREATER RISK, INCLUDING THE RISK OF DEFAULT, THAN HIGHER RATED
SECURITIES, AND ARE CONSIDERED TO BE SPECULATIVE WITH REGARD TO THE PAYMENT OF
INTEREST AND RETURN OF PRINCIPAL. INVESTORS SHOULD CAREFULLY ASSESS THE RISKS
ASSOCIATED WITH AN INVESTMENT IN THE FUND. (SEE "INVESTMENT OBJECTIVE AND
POLICIES.")
 
Shares of the Fund are sold and redeemed at net asset value. The Fund pays a
distribution fee of up to 0.75% of its average daily net assets in accordance
with a Plan of Distribution pursuant to Rule 12b-1 under the Investment Company
Act of 1940.
 
   
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 March 26, 1996, 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 numbers listed on this page. The
Statement of Additional Information is incorporated herein by reference.
    
 
TABLE OF CONTENTS
 
   
Prospectus Summary /2
Summary of Fund Expenses /4
Financial Highlights /5
The Fund and its Management /5
Investment Objective and Policies /6
  Risk Considerations /8
Investment Restrictions /13
Purchase of Fund Shares /14
Shareholder Services /15
Repurchases and Redemptions /18
Dividends, Distributions and Taxes /19
Performance Information /20
Additional Information /20
Appendix /22
    
 
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.
 
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.
 
   
          TCW/DW INCOME AND
           GROWTH FUND
        Two World Trade Center
        New York, New York 10048
        (212) 392-2550 or
        (800) 869-NEWS (toll free)
    
 
Dean Witter Distributors Inc.
Distributor
<PAGE>
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
 
   
<TABLE>
<S>                <C>
THE                The  Fund is organized as a Massachusetts  business trust, and is an open-end,
FUND               non-diversified  management   investment   company  investing   primarily   in
                   convertible securities, fixed-income securities and common stocks.
- ------------------------------------------------------------------------------------------------
SHARES             Shares of beneficial interest with $0.01 par value (see page 19).
OFFERED
- ------------------------------------------------------------------------------------------------
OFFERING           The price of the shares offered by this Prospectus is determined once daily as
PRICE              of  4:00 p.m., New York time, on each  day that the New York Stock Exchange is
                   open, and is equal to the net asset value per share (see page 13).
- ------------------------------------------------------------------------------------------------
MINIMUM            The minimum  initial investment  is  $1,000 ($100  if  the account  is  opened
PURCHASE           through EasyInvest- SM-); minimum subsequent investment is $100 (see page 13).
- ------------------------------------------------------------------------------------------------
INVESTMENT         The  investment objective  of the  Fund is  to generate  high total  return by
OBJECTIVE          providing a  high  level of  current  income  and the  potential  for  capital
                   appreciation.
- ------------------------------------------------------------------------------------------------
MANAGER            Dean  Witter Services Company Inc.  (the "Manager"), a wholly-owned subsidiary
                   of Dean Witter InterCapital Inc. ("InterCapital"), is the Fund's Manager.  The
                   Manager  also serves as Manager to eleven other investment companies which are
                   advised by TCW Funds  Management, Inc. (the "TCW/DW  Funds"). The Manager  and
                   InterCapital  serve in various investment management, advisory, management and
                   administrative capacities to  a total of  ninety-six investment companies  and
                   other  portfolios with assets  of approximately $82.5  billion at February 29,
                   1996.
- ------------------------------------------------------------------------------------------------
ADVISER            TCW Funds Management, Inc. (the  "Adviser") is the Fund's investment  adviser.
                   In  addition to the Fund,  the Adviser serves as  investment adviser to twelve
                   other TCW/DW Funds. As  of February 29, 1996,  the Adviser and its  affiliates
                   had  approximately $53 billion under management  or committed to management in
                   various  fiduciary  or  advisory  capacities,  primarily  from   institutional
                   investors.
- ------------------------------------------------------------------------------------------------
MANAGEMENT         The  Manager receives a monthly  fee at the annual rate  of 0.45% of daily net
AND ADVISORY       assets, scaled  down on  assets  over $500  million.  The Adviser  receives  a
FEES               monthly  fee at an  annual rate of 0.30%  of daily net  assets, scaled down on
                   assets over $500 million (see page 6).
- ------------------------------------------------------------------------------------------------
DIVIDENDS          Income  dividends  are  paid  quarterly.  Capital  gains,  if  any,  will   be
AND CAPITAL        distributed  no less than annually.  Dividends and capital gains distributions
GAINS              are automatically reinvested in  additional shares at  net asset value  unless
DISTRIBUTIONS      the shareholder elects to receive cash (see page 18).
- ------------------------------------------------------------------------------------------------
DISTRIBUTOR AND    Dean  Witter Distributors Inc.  (the "Distributor") is  the distributor of the
PLAN OF            Fund's shares. The Fund is authorized to reimburse specific expenses  incurred
DISTRIBUTION       in  promoting  the  distribution  of  the  Fund's  shares,  including personal
                   services  to  shareholders  and   maintenance  of  shareholder  accounts,   in
                   accordance  with a Plan of Distribution  with the Distributor pursuant to Rule
                   12b-1 under the Investment Company Act of 1940. Reimbursement may in no  event
                   exceed an amount equal to payments at an annual rate of 0.75% of average daily
                   net assets of the Fund (see page 13).
- ------------------------------------------------------------------------------------------------
REDEMPTION         Shares are redeemable by the shareholder at net asset value. An account may be
                   redeemed involuntarily if the total value of the account is less than $100 or,
                   if  the account was opened through  EasyInvest-SM-, if after twelve months the
                   shareholder has invested less than $1,000 in the account (see page 17).
- ------------------------------------------------------------------------------------------------
</TABLE>
    
 
                                       2
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S>                <C>
RISK               The net asset value of  the Fund's shares will  fluctuate with changes in  the
CONSIDERATIONS     market  value  of the  Fund's portfolio  securities. The  value of  the Fund's
                   convertible  and  fixed-income  portfolio  securities  generally  increase  or
                   decrease  due to  changes in prevailing  interest rates. Generally,  a rise in
                   interest rates will result in  a decrease in value,  while a drop in  interest
                   rates  will  result  in  an  increase in  value.  The  high  yield,  high risk
                   fixed-income securities in which  the Fund may invest  are subject to  greater
                   risk  of  loss  of income  and  principal  than higher  rated,  lower yielding
                   fixed-income securities. The prices of  high yield, high risk securities  have
                   been  found to be less sensitive to  changes in prevailing interest rates than
                   higher rated  investments, but  are likely  to be  more sensitive  to  adverse
                   economic   changes  or  individual  corporate  developments.  The  Fund  is  a
                   non-diversified investment  company  and,  as  such, is  not  subject  to  the
                   diversification  requirements  of  the  Investment  Company  Act  of  1940, as
                   amended. As a result, a relatively high percentage of the Fund's assets may be
                   invested in a limited number of issuers. However, the Fund intends to continue
                   to qualify as a regulated investment company under the federal income tax laws
                   and, as such, is subject to  the diversification requirements of the  Internal
                   Revenue  Code. The Fund may invest up to 25% of its total assets in non-dollar
                   denominated foreign securities, which may  entail special risks (see page  7).
                   The  Fund also may engage in options and futures transactions and may purchase
                   securities on a  when-issued, delayed  delivery or  "when, as  and if  issued"
                   basis, which involve certain additional risks (see page 10).
</TABLE>
 
- --------------------------------------------------------------------------------
  THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
                                   ELSEWHERE
       IN THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
 
                                       3
<PAGE>
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
   
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 ended January 31, 1996.
    
 
   
<TABLE>
<S>                                                                                 <C>
SHAREHOLDER TRANSACTION EXPENSES
- ----------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases.........................................  None
Maximum Sales Charge Imposed on Reinvested Dividends..............................  None
Deferred Sales Charge.............................................................  None
Redemption Fees...................................................................  None
Exchange Fee......................................................................  None
 
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------------------
Management and Advisory Fees......................................................  0.75%
12b-1 Fee*........................................................................  0.75%
Other Expenses....................................................................  0.71%
Total Fund Operating Expenses.....................................................  2.21%
</TABLE>
    
 
<TABLE>
<S>  <C>
<FN>
- ------------
*    A portion  of the  12b-1 fee,  which may  not exceed  0.25% of  the  Fund's
     average  daily net  assets, is  characterized as  a service  fee within the
     meaning of  National  Association  of  Securities  Dealers,  Inc.  ("NASD")
     guidelines (see "Purchase of Fund Shares").
</TABLE>
 
   
<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:...............................................   $      22    $      69    $     118    $     254
</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" and "Plan of Distribution" in this Prospectus.
 
    Long-term shareholders of the  Fund may pay more  in distribution fees  than
the  economic equivalent of the maximum front-end sales charges permitted by the
NASD.
 
                                       4
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
   
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     FOR THE YEAR    MARCH 31, 1993*
                                                                 ENDED            ENDED           THROUGH
                                                              JANUARY 31,      JANUARY 31,      JANUARY 31,
                                                                 1996             1995             1994
                                                            ---------------  ---------------  ---------------
<S>                                                         <C>              <C>              <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period......................     $    9.77        $   10.98        $   10.00
                                                                 -------          -------          -------
Net investment income.....................................          0.59             0.59             0.45
Net realized and unrealized gain (loss)...................          1.37            (1.20)            1.02
                                                                 -------          -------          -------
Total from investment operations..........................          1.96            (0.61)            1.47
                                                                 -------          -------          -------
Less dividends and distributions from:
  Net investment income...................................         (0.60)           (0.55)           (0.39)
  Net realized gain.......................................        --                (0.05)           (0.10)
                                                                 -------          -------          -------
    Total dividends and distributions.....................         (0.60)           (0.60)           (0.49)
                                                                 -------          -------          -------
Net asset value, end of period............................     $   11.13        $    9.77        $   10.98
                                                                 -------          -------          -------
                                                                 -------          -------          -------
 
TOTAL INVESTMENT RETURN...................................         20.52%           (5.59)%          15.06   %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses..................................................          2.21%            2.04%            1.57   %(2)(3)
Net investment income.....................................          5.41%            5.83%            5.62   %(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands...................  $     57,631     $     55,335     $     64,370
Portfolio turnover rate...................................            79%              88%              84   %(1)
</TABLE>
    
 
- --------------
   
 * COMMENCEMENT OF OPERATIONS.
    
   
(1) NOT ANNUALIZED.
    
   
(2) ANNUALIZED.
    
   
(3) IF THE FUND HAD BORNE ALL EXPENSES THAT WERE REIMBURSED OR WAIVED BY THE
    MANAGER AND INVESTMENT ADVISER, THE ABOVE ANNUALIZED EXPENSE AND NET
    INVESTMENT INCOME RATIOS WOULD HAVE BEEN 2.00% AND 5.18%, RESPECTIVELY.
    
 
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
 
    TCW/DW Income and Growth Fund  (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
Massachusetts on November 23, 1992.
 
    Dean Witter  Services Company  Inc. (the  "Manager"), whose  address is  Two
World Trade Center, New York, New York 10048, is the Fund's Manager. The Manager
is  a wholly-owned subsidiary of Dean Witter InterCapital Inc. ("InterCapital").
InterCapital is a wholly-owned subsidiary of Dean Witter,
Dis-
 
                                       5
<PAGE>
cover & Co.  ("DWDC"), a  balanced financial services  organization providing  a
broad range of nationally marketed credit and investment products.
 
   
    The  Manager acts as manager  to eleven other TCW/DW  Funds. The Manager and
InterCapital act  in various  investment  management, advisory,  management  and
administrative  capacities to a total of ninety-six investment companies, thirty
of which are  listed on the  New York  Stock Exchange, with  combined assets  of
approximately  $79.9 billion as of February  29, 1996. InterCapital also manages
and advises  portfolios of  pension plans,  other institutions  and  individuals
which aggregated approximately $2.6 billion at such date.
    
 
    The  Fund has retained the Manager to manage its business affairs, supervise
its overall day-to-day operations (other  than providing investment advice)  and
provide all administrative services.
 
   
    TCW  Funds  Management, Inc.  (the "Adviser"),  whose  address is  865 South
Figueroa Street,  Suite  1800, Los  Angeles,  California 90017,  is  the  Fund's
investment  adviser.  The  Adviser  was  organized  in  1987  as  a wholly-owned
subsidiary of The TCW Group,  Inc. ("TCW"), whose subsidiaries, including  Trust
Company  of the  West and  TCW Asset  Management Company,  provide a  variety of
trust, investment management  and investment advisory  services. Robert A.  Day,
who  is Chairman of the Board of Directors of TCW, may be deemed to be a control
person of the Adviser by  virtue of the aggregate ownership  by Mr. Day and  his
family  of more than 25% of the outstanding  voting stock of The TCW Group, Inc.
The Adviser  serves  as investment  adviser  to  eleven other  TCW/DW  Funds  in
addition  to the Fund. As  of February 29, 1996,  the Adviser and its affiliated
companies had  approximately  $53  billion  under  management  or  committed  to
management, primarily from institutional investors.
    
 
    The Fund has retained the Adviser to invest the Fund's assets.
 
    The  Fund's Trustees review the various services provided by the Manager and
the Adviser 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 Manager, the Fund pays the Manager
monthly compensation calculated daily  by applying the annual  rate of 0.45%  to
the  Fund's net assets up  to $500 million, scaled down  to 0.42% on assets over
$500 million. As  compensation for  its investment advisory  services, the  Fund
pays  the Adviser  monthly compensation calculated  daily by  applying an annual
rate of 0.30% to the Fund's net assets up to $500 million, scaled down to  0.28%
on  assets over $500  million. For the  fiscal year ended  January 31, 1996, the
Fund accrued total  compensation to  the Manager  and the  Adviser amounting  to
0.45%  and 0.30%, respectively,  of the Fund's average  daily net assets. During
that period, the Fund's total expenses  amounted to 2.21% of the Fund's  average
daily net assets.
    
 
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
 
    The  investment objective of  the Fund is  to generate high  total return by
providing a  high  level  of  current  income  and  the  potential  for  capital
appreciation.  This  objective is  fundamental and  may  not be  changed without
shareholder approval. There is no assurance that the objective will be achieved.
 
    The Fund  seeks  to  achieve  its  investment  objective  by  investing,  in
descending  order of preference under current market conditions, at least 65% of
its total assets in any or all  of the following types of securities: (1)  bonds
or preferred stock convertible into common stock ("convertible securities"); (2)
other  fixed-income securities, including bonds, notes, debentures and preferred
stocks; (3) common stocks; and (4) U.S. Government securities (securities issued
or guaranteed by the United States or its agencies or instrumentalities).
 
    The Fund will invest at  least 50% of its total  assets in a combination  of
equity  securities and  fixed-income securities  with equity  components such as
convertible   securities   and   warrants.   In   addition,   all   fixed-income
 
                                       6
<PAGE>
securities  without an equity  component in which  the Fund invests  will have a
weighted average life or a maturity date of ten years or less.
 
    The Fund  may  invest  in  convertible  securities  and  other  fixed-income
securities  rated below investment grade.  Securities below investment grade are
the equivalent of  high yield, high  risk bonds. Investment  grade is  generally
considered  to  be debt  securities rated  BBB  or higher  by Standard  & Poor's
Corporation ("S&P")  or  Baa  or  higher  by  Moody's  Investors  Service,  Inc.
("Moody's").  (Convertible and other fixed-income securities rated BBB by S&P or
Baa by Moody's, which generally are  regarded as having an adequate capacity  to
pay  interest and  repay principal, have  speculative characteristics.) However,
the Fund will not invest in  convertible and other fixed-income securities  that
are  rated lower than B by S&P or Moody's  or, if not rated, determined to be of
comparable quality by  the Adviser.  The Fund  will not  invest in  fixed-income
securities  that  are  in  default  in  payment  of  principal  or  interest.  A
description of fixed-income securities ratings  is contained in the Appendix  to
this Prospectus.
 
PORTFOLIO CHARACTERISTICS
 
    CONVERTIBLE  SECURITIES.  A convertible security is a bond, debenture, note,
preferred stock or other security that may be converted into or exchanged for  a
prescribed  amount of common  stock of the  same or a  different issuer within a
particular period of time at a specified price or based on a specified  formula.
Convertible  securities rank senior to common  stocks in a corporation's capital
structure and, therefore, entail less risk than the corporation's common  stock.
The value of a convertible security is a function of its "investment value" (its
value  as if it did not have a conversion privilege), and its "conversion value"
(the security's worth if it were to be exchanged for the underlying security, at
market value, pursuant to its conversion privilege).
 
    To the extent that a convertible security's investment value is greater than
its conversion  value,  its  price  will  be  primarily  a  reflection  of  such
investment  value and its price  will be likely to  increase when interest rates
fall and decrease when interest rates rise, as with a fixed-income security (the
credit standing of the issuer and other  factors may also have an effect on  the
convertible  security's value). If  the conversion value  exceeds the investment
value, the price  of the  convertible security  will rise  above its  investment
value  and, in  addition, may  sell at some  premium over  its conversion value.
(This premium  represents  the  price  investors are  willing  to  pay  for  the
privilege  of purchasing a  fixed-income security with  a possibility of capital
appreciation due to the  conversion privilege.) At such  times the price of  the
convertible  security  will tend  to fluctuate  directly with  the price  of the
underlying equity security.
 
    FOREIGN SECURITIES.  The Fund may invest in securities of foreign companies.
The Fund may invest in Eurodollar convertible securities, which are fixed-income
securities of a U.S. or foreign issuer  that are issued in U.S. dollars  outside
the United States and are convertible into or exchangeable for equity securities
of  the  same  or  a  different issuer.  Interest  and  dividends  on Eurodollar
securities are payable in  U.S. dollars outside of  the United States. The  Fund
may  invest  without limitation  in Eurodollar  convertible securities  that are
convertible into or exchangeable for  U.S. or foreign equity securities  listed,
or represented by American Depository Receipts listed, on a U.S. stock exchange.
The  Fund's  investments in  other Eurodollar  convertible securities  which are
exchangeable for unlisted foreign  equity securities are  subject to the  Fund's
overall  policy limiting its investment in illiquid securities to 15% or less of
its net assets.
 
    The Fund will not invest more than 25% of the value of its total assets,  at
the  time of purchase, in non-dollar  denominated foreign securities (other than
securities of Canadian issuers registered  under the Securities Exchange Act  of
1934  or American  Depository Receipts,  on which there  is no  such limit). The
Fund's investments  in unlisted  foreign securities  are subject  to the  Fund's
overall  policy limiting its investment in illiquid securities to 15% or less of
its net assets.  Foreign securities investments  may be affected  by changes  in
currency   rates  or  exchange  control  regulations,  changes  in  governmental
administration or economic or monetary policy (in the United States and  abroad)
or  changed circumstances in dealings between  nations. Costs may be incurred in
connection with conversions  between various  currencies held by  the Fund.  The
Fund  currently does not intend  to invest more than 25%  of its total assets in
the securities of  issuers in  any one country  outside the  United States.  For
 
                                       7
<PAGE>
a  discussion of  the risks  of foreign  securities, see  "Risk Considerations,"
below.
 
RISK CONSIDERATIONS
 
    The net asset value of the Fund's shares will fluctuate with changes in  the
market  value of the Fund's portfolio securities. The market value of the Fund's
portfolio securities will  increase or decrease  due to a  variety of  economic,
market  and political factors  affecting the creditworthiness  of the underlying
issuers, as well as changes in prevailing  interest rates, none of which can  be
predicted.  A decline in  prevailing interest rates  will generally increase the
value of fixed-income securities, while an increase in rates usually reduces the
value of those securities. (The Fund's yield  also will vary based on the  yield
of the Fund's portfolio securities.)
 
    HIGH  YIELD, HIGH RISK  SECURITIES.  Because  of the ability  of the Fund to
invest in certain high yield, high risk convertible and fixed-income securities,
the Adviser must  take into account  the special nature  of such securities  and
certain  special  considerations in  assessing  the risks  associated  with such
investments. Although the  growth of  the high  yield securities  market in  the
1980s  had paralleled a long economic expansion, recently many issuers have been
affected by adverse economic and market conditions. It should be recognized that
an economic downturn or increase in interest rates is likely to have a  negative
effect  on  the high  yield  bond market  and  on the  value  of the  high yield
securities held  by the  Fund, as  well as  on the  ability of  the  securities'
issuers to repay principal and interest on their borrowings.
 
    The  prices of high yield securities have been found to be less sensitive to
changes in  prevailing interest  rates than  higher-rated investments,  but  are
likely  to be more sensitive to adverse economic changes or individual corporate
developments. During  an  economic  downturn or  substantial  period  of  rising
interest  rates, highly leveraged issuers  may experience financial stress which
would adversely affect  their ability  to service their  principal and  interest
payment  obligations,  to  meet  their projected  business  goals  or  to obtain
additional financing. If the issuer of a fixed-income security owned by the Fund
defaults, the Fund may incur additional expenses to seek recovery. In  addition,
periods  of economic  uncertainty and  change can  be expected  to result  in an
increased volatility of market prices of high yield securities and a concomitant
volatility in the net asset value of a share of the Fund.
 
    The secondary market for high yield  securities may be less liquid than  the
markets  for higher quality securities and, as  such, may have an adverse effect
on the market prices of certain securities. The limited liquidity of the  market
may also adversely affect the ability of the Fund's Trustees to arrive at a fair
value  for certain  high yield  securities at  certain times  and could  make it
difficult for the  Fund to sell  certain securities. In  addition, new laws  and
potential  new laws  may have  an adverse  effect upon  the value  of high yield
securities and a concomitant negative impact upon the net asset value of a share
of the Fund.
 
    For a discussion  of the  risks of the  Fund's status  as a  non-diversified
investment  company, see "Other Investment Policies," below. For a discussion of
warrants and  stock  rights, see  "Warrants  and  Stock Rights,"  below.  For  a
discussion  of the risks  of options and futures  transactions, see "Options and
Futures Transactions," below.
 
   
    During the fiscal period ended January 31, 1996, the monthly dollar weighted
average ratings  of  the debt  obligations  held by  the  Fund, expressed  as  a
percentage of the Fund's total investments, were as follows:
    
 
   
<TABLE>
<CAPTION>
                                       PERCENTAGE OF
             RATINGS                 TOTAL INVESTMENTS
- ----------------------------------  -------------------
<S>                                 <C>
AAA/Aaa...........................             0.0%
AA/Aa.............................             1.3%
A/A...............................             8.9%
BBB/Baa...........................             5.6%
BB/Ba.............................            20.9%
B/B...............................            32.1%
CCC/Caa...........................             0.0%
CC/Ca.............................             0.0%
C/C...............................             0.0%
D.................................             0.0%
Unrated...........................            31.2%
</TABLE>
    
 
    FOREIGN  SECURITIES    Foreign  securities investments  may  be  affected by
changes  in  currency  rates  or   exchange  control  regulations,  changes   in
governmental administration or economic or monetary policy (in the United States
and  abroad) or changed circumstances  in dealings between nations. Fluctuations
in  the  relative  rates  of  exchange  between  the  currencies  of   different
 
                                       8
<PAGE>
nations  will affect the value of  the Fund's investments denominated in foreign
currency. 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 thereby 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.
 
    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. Foreign companies are not subject to the regulatory requirements of
U.S.  companies and, as  such, there may be  less publicly available information
about such companies.  Moreover, foreign  companies are not  subject to  uniform
accounting,   auditing  and  financial   reporting  standards  and  requirements
comparable to those applicable to U.S. companies.
 
    Securities of foreign issuers may be less liquid than comparable  securities
of  U.S.  issuers  and, as  such,  their  price changes  may  be  more volatile.
Furthermore, foreign exchanges and broker-dealers are generally subject to  less
government   and   exchange  scrutiny   and   regulation  than   their  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  the  Fund's  trades  effected in  such  markets.  As  such, the
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   the  extent  the   Fund  purchases   Eurodollar
certificates  of deposit  issued by foreign  branches of  domestic United States
banks, consideration will be  given to their  domestic marketability, the  lower
reserve  requirements  normally mandated  for  overseas banking  operations, the
possible  impact  of  interruptions  in  the  flow  of  international   currency
transactions  and future international political and economic developments which
might adversely affect the payment of principal or interest.
 
    The risks of other investment techniques  which may be utilized by the  Fund
are  described  under  "Other  Investment  Policies"  and  "Options  and Futures
Transactions" below.
 
WARRANTS AND STOCK RIGHTS
 
    The Fund may invest  up to 5% of  the value of its  net assets in  warrants,
including  not more  than 2% in  warrants not listed  on either the  New York or
American Stock Exchange. The Fund may also invest  up to 5% of the value of  its
net  assets in  stock rights.  Warrants are,  in effect,  an option  to purchase
equity securities at a specific price, generally valid for a specific period  of
time,  and  have no  voting rights,  pay no  dividends and  have no  rights with
respect to the  corporations issuing  them. The  Fund may  acquire warrants  and
stock  rights attached  to other securities  without reference  to the foregoing
limitations.
 
OTHER INVESTMENT POLICIES
 
    While the Fund invests primarily in the types of securities described above,
under ordinary circumstances  it may invest  up to  35% of its  total assets  in
money  market instruments,  which are short-term  (maturities of  up to thirteen
months) fixed-income securities issued by private and governmental institutions.
Money market instruments in which the  Fund may invest are securities issued  or
guaranteed  by the U.S. Government or its agencies; obligations of banks subject
to regulation by the U.S.  Government and having total  assets of $1 billion  or
more; Eurodollar certifi-
 
                                       9
<PAGE>
cates of deposit; obligations of savings banks and savings and loan associations
having  total  assets  of $1  billion  or  more; fully  insured  certificates of
deposit; and commercial paper rated within the two highest grades by Moody's  or
S&P or, if not rated, issued by a company having an outstanding debt issue rated
AAA by S&P or Aaa by Moody's.
 
    There  may be periods  during which, in  the opinion of  the Adviser, 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 is invested in money market instruments or
cash.
 
    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 obligations 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.
 
    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.  While repurchase agreements involve certain risks not associated with
direct investments  in  debt  securities,  including the  risks  of  default  or
bankruptcy  of the  selling financial  institution, the  Fund follows procedures
designed to minimize those risks. These procedures include effecting  repurchase
transactions  only with  large, well-capitalized  and well-established financial
institutions and maintaining adequate collateralization.
 
    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. The Fund  may
also sell securities on a "when, as and if issued"
 
                                       10
<PAGE>
basis  provided that the issuance of the security will result automatically from
the exchange or conversion of  a security owned by the  Fund at the time of  the
sale.
 
    PRIVATE  PLACEMENTS.  The  Fund may invest up  to 5% of  its total assets in
securities which are  subject to restrictions  on resale because  they have  not
been  registered under the  Securities Act of 1933,  as amended (the "Securities
Act"), or which are otherwise  not readily marketable. (Securities eligible  for
resale  pursuant to  Rule 144A  under the Securities  Act, and  determined to be
liquid pursuant to the procedures discussed in the following paragraph, are  not
subject  to the foregoing restriction.)  These securities are generally referred
to as private placements or restricted securities. Limitations on the resale  of
such  securities  may have  an adverse  effect on  their marketability,  and may
prevent the Fund from disposing of them promptly at reasonable prices. The  Fund
may  have to bear the expense of  registering such securities for resale and the
risk of substantial delays in effecting such registration.
 
The  Securities  and  Exchange  Commission  has  adopted  Rule  144A  under  the
Securities  Act,  which  permits  the  Fund  to  sell  restricted  securities to
qualified institutional  buyers without  limitation.  The Adviser,  pursuant  to
procedures  adopted by the Trustees of the Fund, will make a determination as to
the liquidity of each restricted security purchased by the Fund. If a restricted
security is determined to be "liquid," such security will not be included within
the category "illiquid securities,"  which under current  policy may not  exceed
15% of the Fund's net assets.
 
   
    INVESTMENT  IN OTHER INVESTMENT VEHICLES.   Under the Investment Company Act
of 1940, as amended, the Fund generally may invest up to 10% of its total assets
in the aggregate in  shares of other  investment companies and up  to 3% of  its
total  assets in any one investment company,  as long as that investment company
does not represent more than 5% of  the voting stock of the acquired  investment
company  at the time such shares are purchased. In addition, the Fund may invest
in real estate investment  trusts, which pool  investors' funds for  investments
primarily  in commercial real estate  properties. Investment in other investment
companies may  be  the sole  or  most practical  means  by which  the  Fund  may
participate  in  certain  securities  markets,  and  investment  in  real estate
investment trusts may  be the  most practical available  means for  the Fund  to
invest  in the real  estate industry (the  Fund is prohibited  from investing in
real estate directly). As a shareholder in an investment company or real  estate
investment  trust,  the  Fund would  bear  its  ratable share  of  that entity's
expenses, including its advisory and administration  fees. At the same time  the
Fund  would  continue  to  pay  its own  investment  management  fees  and other
expenses, as a result of which the  Fund and its shareholders in effect will  be
absorbing  duplicate  levels  of  fees  with  respect  to  investments  in other
investment companies and in real estate investment trusts.
    
 
   
    ZERO COUPON SECURITIES.  A portion of the fixed-income securities  purchased
by  the Fund may be  zero coupon securities. Such  securities are purchased at a
discount from their face amount, giving the purchaser the right to receive their
full value at maturity. The interest  earned on such securities is,  implicitly,
automatically  compounded and paid out at  maturity. While such compounding at a
constant rate eliminates the risk of receiving lower yields upon reinvestment of
interest if  prevailing interest  rates  decline, the  owner  of a  zero  coupon
security  will be  unable to participate  in higher yields  upon reinvestment of
interest received  on interest-paying  securities if  prevailing interest  rates
rise.
    
 
   
    A  zero coupon  security pays  no interest  to its  holder during  its life.
Therefore, to the extent the Fund invests in zero coupon securities, it will not
receive current cash  available for distribution  to shareholders. In  addition,
zero  coupon securities are subject  to substantially greater price fluctuations
during periods  of  changing  prevailing  interest  rates  than  are  comparable
securities  which  pay interest  on  a current  basis.  Current federal  tax law
requires that a holder  (such as the  Fund) of a zero  coupon security accrue  a
portion  of the discount at which the security was purchased as income each year
even though  the Fund  receives no  interest payments  in cash  on the  security
during the year.
    
 
OPTIONS AND FUTURES TRANSACTIONS
 
    The  Fund may purchase  and sell (write)  call and put  options on portfolio
securities and on the U.S.  dollar which are or may  in the future be listed  on
securities exchanges or are written in over-the-counter
trans-
 
                                       11
<PAGE>
actions ("OTC Options"). Listed options are issued or guaranteed by the exchange
on  which they trade or  by a clearing corporation  such as the Options Clearing
Corporation. OTC options  are purchased  from or  sold (written)  to dealers  or
financial  institutions which have entered into direct agreements with the Fund.
The Fund is permitted to write covered call options on portfolio securities  and
the  U.S. dollar, without limit, in order  to aid it in achieving its investment
objective. The Fund may also write  covered put options; however, the  aggregate
value  of the  obligations underlying  the puts  determined as  of the  date the
options are sold will not exceed 50% of the Fund's net assets.
 
    The Fund may purchase listed and OTC call and put options on securities  and
stock  indexes in amounts equalling  up to 5% of its  total assets. The Fund may
purchase call options to close out a covered call position or to protect against
an increase in the price of a  security it anticipates purchasing. The Fund  may
purchase  put options  on securities  which it  holds in  its portfolio  only to
protect itself against a decline in the value of the security. The Fund may also
purchase put options to close out written  put positions in a manner similar  to
call  option closing  purchase transactions.  There are  no other  limits on the
Fund's ability to purchase call and put options.
 
    The Fund may also  purchase and sell interest  rate and stock index  futures
contracts  ("futures contracts") that are traded  on U.S. commodity exchanges on
such underlying securities  as U.S. Treasury  bonds, notes, and  bills and  GNMA
Certificates ("interest rate" futures) and such indexes as the S&P 500 Index and
the  New York  Stock Exchange  Composite Index  ("stock index"  futures) and the
Moody's Investment-Grade Corporation Bond Index ("bond index" futures). The Fund
will purchase or  sell interest rate  futures contracts and  bond index  futures
contracts  for the purpose of hedging its fixed-income portfolio (or anticipated
portfolio) against changes in prevailing interest rates and to alter the  Fund's
asset  allocation in  fixed-income securities.  The Fund  will purchase  or sell
stock index futures contracts  for the purpose of  hedging its equity  portfolio
(or anticipated portfolio) against changes in their prices.
 
    The  Fund  also 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.
 
    New  futures  contracts, options  and other  financial products  and various
combinations thereof continue to be developed.  The Fund may invest in any  such
futures,  options or products as may be developed, to the extent consistent with
its investment objective and applicable regulatory requirements.
 
    RISKS OF  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 may generally only be closed out  by
entering  into a closing purchase transaction  with the purchasing dealer. Also,
exchanges may limit the amount by which the price of many futures contracts  may
move  on any day. If  the price moves equal the  daily limit on successive days,
then it may  prove impossible to  liquidate a futures  position until the  daily
limit moves have ceased.
 
    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 Adviser 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 will arise in
employing futures contracts to protect against the price volatility of portfolio
securities is that the prices of  securities, currencies and indexes subject  to
futures  contracts  (and  thereby  the futures  contract  prices)  may correlate
imperfectly with the behavior of the dollar cash prices of the Fund's  portfolio
securities  and their  denominated currencies.  See the  Statement of Additional
Information for a further discussion of such risks.
 
                                       12
<PAGE>
PORTFOLIO MANAGEMENT
 
   
    The Fund's  portfolio is  actively managed  by its  Adviser with  a view  to
achieving  the Fund's investment  objective. Robert M.  Hanisee, Mark Attanasio,
Kevin A. Hunter and Melissa Weiler,  Managing Directors of the Adviser, are  the
primary  portfolio  managers of  the Fund.  Messrs. Hanisee  and Hunter  and Ms.
Weiler have been primary  portfolio managers of the  Fund since April, 1995  and
Mr.  Attanasio  has been  a portfolio  manager  of the  Fund since  March, 1996.
Messrs. Hanisee and Hunter have been  portfolio managers with affiliates of  The
TCW  Group, Inc.  since 1990  and 1989, respectively.  Mr. Attanasio  has been a
portfolio manager with the  TCW Group Inc. and  affiliates thereof since  April,
1995.  Prior  thereto  he was  Co-Chief  Executive Officer  and  Chief Portfolio
Strategist of Crescent Corporation (April, 1991-April 1995). Ms. Weiler has been
a portfolio manager with  affiliates of The TCW  Group, Inc. since April,  1995,
and prior thereto was a Vice President and Portfolio Manager of Crescent Capital
Corporation,  an Investment  Adviser, with which  she had  been affiliated since
February 1992.  Prior thereto,  she was  a Senior  Investment Analyst  at  First
Capital Holdings Corporation.
    
 
    In  determining which  securities to  purchase for the  Fund or  hold in the
Fund's portfolio, the  Adviser will  rely on information  from various  sources,
including  research, analysis and  appraisals of brokers  and dealers, including
Dean Witter Reynolds Inc. ("DWR"), a broker-dealer affiliate of the Manager, and
others regarding  economic  developments  and  interest  rate  trends,  and  the
Adviser's own analysis of factors it deems relevant.
 
    Orders  for transactions in portfolio  securities and commodities are placed
for the Fund with a number of  brokers and dealers, including DWR. The Fund  may
incur  brokerage commissions on transactions conducted through DWR. Under normal
circumstances it is not  anticipated that the portfolio  trading will result  in
the Fund's portfolio turnover rate exceeding 100% in any one year. The Fund will
incur brokerage costs commensurate with its portfolio turnover rate.
 
    Except   as  specifically  noted,  all  investment  policies  and  practices
discussed above are not fundamental  policies of the Fund  and, as such, may  be
changed without shareholder approval.
 
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
 
    The  investment restrictions listed  below are among  the restrictions which
have been  adopted  by  the Fund  as  fundamental  policies. Under  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. This restriction does not apply to  obligations
    issued  or  guaranteed  by the  United  States Government,  its  agencies or
    instrumentalities.
 
      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  does  not  apply   to
    obligations  issued  or  guaranteed  by the  United  States  Government, its
    agencies or instrumentalities.
 
    In addition, as a non-fundamental policy, the Fund may not, as to 75% of its
total assets, purchase more than 10% of the voting securities of any issuer.
 
                                       13
<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 Manager, shares  of
the Fund are distributed by the Distributor and offered by DWR and others (which
may  include  TCW Brokerage  Services,  an affiliate  of  the Adviser)  who have
entered into 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  and subsequent purchases of $100  or
more  may be made by sending a check,  payable to TCW/DW Income and Growth Fund,
directly to Dean Witter Trust Company  (the "Transfer Agent") at P.O. Box  1040,
Jersey  City, NJ 07303, or by contacting  an account executive of DWR or another
Selected Broker-Dealer. The minimum initial purchase in the case of  investments
through EasyInvest-SM-, an automatic purchase plan (see "Shareholder Services"),
is  $100, provided  that the  schedule of  automatic investments  will result in
investments totalling at  least $1,000 within  the first twelve  months. In  the
case  of investments 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.
    
 
   
    Shares of  the Fund  are sold  through  the Distributor  on a  normal  three
business day settlement basis; that is, payment is due on the third 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.
    
 
    The offering price  will be the  net asset value  per share next  determined
following  receipt of an  order (see "Determination of  Net Asset Value"). Sales
personnel of a  Selected Broker-Dealer are  compensated for shares  of the  Fund
sold  by them by  the Distributor or  any of its  affiliates and/or the Selected
Broker-Dealer. In addition, some sales  personnel of the Selected  Broker-Dealer
will receive various types of non-cash compensation as special sales incentives,
including  trips, educational and/or business seminars and merchandise. The Fund
and the Distributor reserve the right to reject any purchase orders.
 
PLAN OF DISTRIBUTION
 
    The Fund has  entered into  a Plan of  Distribution pursuant  to Rule  12b-1
under  the Act with  the Distributor whereby the  expenses of certain activities
and services, including  personal services  to shareholders  and maintenance  of
shareholder  accounts, in connection with the  distribution of the Fund's shares
are reimbursed. The principal activities and  services which may be provided  by
DWR,  its affiliates or any other Selected Broker-Dealer under the Plan include:
(1) compensation  to,  and  expenses  of, DWR  account  executives  and  others,
including  overhead and telephone expenses; (2)  sales incentives and bonuses to
sales representatives and  to marketing personnel  in connection with  promoting
sales  of the Fund's shares; (3)  expenses incurred in connection with promoting
sales of the Fund's shares; (4) preparing and distributing sales literature; and
(5) providing  advertising and  promotional  activities, including  direct  mail
solicitation   and  television,  radio,  newspaper,  magazine  and  other  media
advertisements. Reimbursements  for  these  services will  be  made  in  monthly
payments by the Fund, which will in no event exceed an amount equal to a payment
at the annual rate of 0.75% of the Fund's average daily net assets. A portion of
the  amount payable  pursuant to  the Plan,  which may  not exceed  0.25% of the
Fund's average daily net assets, is characterized as a
 
                                       14
<PAGE>
   
service fee within the meaning of NASD guidelines. The service fee is a  payment
made  for  personal  service  and/or the  maintenance  of  shareholder accounts.
Expenses incurred pursuant to the Plan in any fiscal year in excess of 0.75%  of
the  Fund's average daily net assets will  not be reimbursed by the Fund through
payments accrued in any subsequent fiscal year. The Fund accrued $412,192 to the
Distributor pursuant to  the Plan for  the fiscal year  ended January 31,  1996.
This  is an accrual at the annual rate  of 0.75% of the Fund's average daily net
assets.
    
 
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 (or, on days when  the New York Stock Exchange closes prior
to 4:00  p.m., at  such earlier  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
stock exchange or quoted by  NASDAQ is valued at its  latest sale price on  that
exchange or quotation service prior to the time when assets are valued; if there
were no sales that day, the security is valued at the latest bid price (in cases
where securities are traded on more than one exchange, the securities are valued
on  the exchange designated as the primary market pursuant to procedures adopted
by  the  Trustees);   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 Adviser  that sale  or bid  prices are  not reflective  of  a
security's  market value, portfolio securities are valued at their fair value as
determined in good faith under procedures  established by and under the  general
supervision  of  the  Fund's  Trustees. For  valuation  purposes,  quotations of
foreign portfolio securities are translated into U.S. dollar equivalents at  the
prevailing  market rates  prior to  the close  of the  New York  Stock Exchange.
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.
    
 
    Short-term  debt securities with remaining maturities  of 60 days or less at
the time of purchase are valued at amortized cost, unless the Trustees determine
such does  not  reflect  the  securities' market  value,  in  which  case  these
securities will be valued at their fair value as determined by the Trustees.
 
    Certain  of  the Fund's  portfolio securities  may be  valued by  an outside
pricing service approved by the Fund's Trustees. The pricing service utilizes  a
matrix  system  incorporating  security  quality,  maturity  and  coupon  as the
evaluation model  parameters,  and/or research  and  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 TCW/DW Fund),
unless  the shareholder  requests that  they be paid  in cash.  Each purchase of
shares of the Fund is made upon the condition that the Transfer Agent is thereby
automatically appointed as agent  of the investor to  receive all dividends  and
capital  gains distributions on shares owned by the investor. Such dividends and
distributions will be paid, at the net  asset value per share, in shares of  the
Fund  (or in cash if the shareholder so requests) as of the close of business on
the record date.  At any time  an investor  may request the  Transfer Agent,  in
writing, to have subsequent dividends and/or capital gains distributions paid to
him  or her in cash  rather than shares. In order  to provide sufficient time to
process the change, such request
 
                                       15
<PAGE>
should be received by the  Transfer Agent at least  five business days prior  to
the  record  date of  the  dividend or  distribution.  In the  case  of recently
purchased shares for which registration  instructions have not been received  on
the  record  date,  cash  payments  will be  made  to  DWR  or  another Selected
Broker-Dealer, which will be forwarded to  the shareholder, upon the receipt  of
proper instructions.
 
    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 per
share  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.
 
   
    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 Transfer Agent for  investment in shares of
the Fund (see  "Purchase of  Fund Shares"  and "Repurchases  and Redemptions  --
Involuntary Redemption").
    
 
    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 then current net asset value.
The Withdrawal Plan provides  for monthly or  quarterly (March, June,  September
and  December) checks in any  dollar amount, not less than  $25, or in any whole
percentage of the  account balance,  on an annualized  basis. Only  shareholders
having  accounts  in  which  no  share certificates  have  been  issued  will be
permitted to enroll in the Withdrawal Plan.
 
    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 account executive or the Transfer
Agent.
 
EXCHANGE PRIVILEGE
 
   
    An "Exchange  Privilege," that  is, the  privilege of  exchanging shares  of
certain  Funds for  shares of  the Fund, exists  whereby shares  of TCW/DW Funds
which are open-end investment companies sold with a contingent deferred (at time
of redemption) sales charge  ("CDSC Funds") may be  exchanged for shares of  the
Fund,  for  shares  of TCW/DW  North  American Government  Income  Trust, TCW/DW
Balanced Fund, and for shares of five money market funds for which  InterCapital
serves  as investment manager:  Dean Witter Liquid Asset  Fund Inc., Dean Witter
U.S. Government Money  Market Trust,  Dean Witter Tax-Free  Daily Income  Trust,
Dean  Witter California  Tax-Free Daily  Income Trust  and Dean  Witter New York
Municipal  Money  Market  Trust  (the  foregoing  eight  investment   companies,
including  the  Fund,  are  hereinafter collectively  referred  to  as "Exchange
Funds").
    
 
    An exchange from a CDSC Fund to an 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 a  CDSC Fund,  shares of  the CDSC  Fund are  redeemed at  their next
calculated net asset value and exchanged for shares of the money market fund  at
their  net  asset value  determined  the following  business  day. Additionally,
shares of any Exchange Fund  received in an exchange for  shares of a CDSC  Fund
(regardless  of  the type  of  fund originally  purchased)  may be  redeemed and
exchanged for  shares  of  an Exchange  Fund  or  a CDSC  Fund.  Any  applicable
contingent  deferred sales  charge ("CDSC") will  have to be  paid upon ultimate
redemption of shares originally purchased from a CDSC Fund. 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
 
                                       16
<PAGE>
(calculated as described above) the shareholder was
invested  in  a CDSC  Fund. However,  in the  case of  shares exchanged  into an
Exchange Fund,  upon  a redemption  of  shares which  results  in a  CDSC  being
imposed,  a credit (not  to exceed the amount  of the CDSC) will  be given in an
amount equal to the Exchange Fund 12b-1 distribution fees which are attributable
to those shares (see "Purchase of Fund  Shares -- Plan of Distribution" in  this
Prospectus or the respective other Exchange Fund prospectus for a description of
Exchange  Fund 12b-1 distribution  fees). Exchanges involving  CDSC Funds may be
made after the shares of the CDSC Fund acquired by purchase (not by exchange  or
dividend  reinvestment)  have been  held for  thirty days.  There is  no waiting
period for exchanges of shares acquired by exchange or dividend reinvestment.
 
    Purchases and  exchanges should  be  made for  investment purposes  only.  A
pattern  of frequent exchanges  may be deemed  by the Manager  to be abusive and
contrary to the  best interests  of the Fund's  other shareholders  and, at  the
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, each of the other  TCW/DW
Funds  and  each of  the money  market 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 TCW/DW Funds or
money market funds for which shares of  the Fund have been 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
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 funds for
which the Exchange Privilege is available pursuant to this Exchange Privilege by
contacting their  DWR  or other  Selected  Broker-Dealer 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) 869-NEWS (toll free).
The Fund will employ reasonable procedures to confirm that exchange instructions
communicated over the  telephone are genuine.  The procedures 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 will also be recorded. If
such  procedures are not employed, the Fund may  be liable for any losses due to
unauthorized or fraudulent transactions.
    
 
                                       17
<PAGE>
    Telephone exchange instructions will be accepted if received by the Transfer
Agent between 9:00 a.m. 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  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 case  in the past with
other funds managed by the Manager.
 
    For further  information  regarding  the  Exchange  Privilege,  shareholders
should  contact their DWR  or other Selected  Broker-Dealer account executive or
the Transfer Agent.
 
REPURCHASES AND REDEMPTIONS
- --------------------------------------------------------------------------------
 
    REPURCHASES.   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 request of the shareholder. The repurchase price is the  net
asset  value next determined  (see "Purchase of Fund  Shares -- Determination of
Net Asset Value") after such  repurchase order is received  by DWR or the  other
Selected  Broker-Dealer. The offers by DWR  and other Selected Broker-Dealers to
repurchase shares from  shareholders may be  suspended by them  at any time.  In
that  event, shareholders  may redeem their  shares through  the Fund's Transfer
Agent as set forth below under "Redemptions."
 
    REDEMPTIONS.  Shares of the Fund can be redeemed for cash at any time at net
asset value per  share next determined.  If shares are  held in a  shareholder's
account at the Transfer Agent without a share certificate, a written request for
redemption  must be sent  to the Fund's  Transfer Agent at  P.O. Box 983, Jersey
City, NJ 07303. The share certificate,  or an accompanying stock power, and  the
request  for  redemption,  must be  signed  by the  shareholder  or shareholders
exactly as the shares  are registered. Each request  for redemption, whether  or
not  accompanied by  a share  certificate, must be  sent to  the Fund's Transfer
Agent, which will redeem the shares at their net asset value next determined  as
described  under "Purchase of  Fund Shares -- Determination  of Net Asset Value"
after it  receives the  request, and  certificate, if  any, in  good order.  Any
redemption  request received  after such determination  will be  redeemed at the
next determined net  asset value.  The term "good  order" means  that the  share
certificate, if any, and request for redemption are properly signed, accompanied
by  any  documentation  required  by  the  Transfer  Agent,  and  bear signature
guarantees when required  by the Fund  or the Transfer  Agent. If redemption  is
requested  by a corporation, partnership, trust or fiduciary, the Transfer Agent
may require that written evidence of authority acceptable to the Transfer  Agent
be  submitted before such request is accepted. With regard to shares of the Fund
acquired pursuant to the Exchange Privilege, any applicable contingent  deferred
sales  charge will be imposed upon the  redemption of such shares (see "Purchase
of Fund Shares -- Exchange Privilege").
 
    Whether certificates are  held by the  shareholder or shares  are held in  a
shareholder's  account, if the proceeds are to  be paid to any person other than
the record owner, or if the proceeds are to be paid to a corporation (other than
DWR or  another Selected  Broker-Dealer  for the  account of  the  shareholder),
partnership,  trust or fiduciary, or sent to the shareholder at an address other
than the  registered  address, signatures  must  be guaranteed  by  an  eligible
guarantor  acceptable  to the  Transfer Agent  (shareholders should  contact the
Transfer Agent for  a determination as  to whether a  particular institution  is
such  an eligible guarantor). A  stock power may be  obtained from any dealer or
commercial bank. The Fund may  change the signature guarantee requirements  from
time  to time upon  notice to shareholders, which  may be by  means of a revised
prospectus.
 
                                       18
<PAGE>
    PAYMENT FOR SHARES REPURCHASED  OR REDEEMED.   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 the margin account.
 
    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.
 
   
    INVOLUNTARY REDEMPTION.  The Fund reserves the right, on 60 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 due to  redemptions
by  the shareholder have a value of less  than $100 or such lesser amount as may
be fixed  by  the  Trustees or,  in  the  case of  an  account  offered  through
EasyInvest, if after twelve months the shareholder has invested less than $1,000
in  the account.  However, before  the Fund  redeems such  shares and  sends the
proceeds to the shareholder,  it will notify the  shareholder that the value  of
the  shares is less than the  applicable amount and allow him  or her 60 days to
make an additional investment in an amount which will increase the value of  his
or  her  account to  at least  the  applicable amount  before the  redemption is
processed.
    
 
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
 
    DIVIDENDS AND DISTRIBUTIONS.   The Fund intends  to pay quarterly  dividends
and  to distribute  substantially all of  the Fund's net  investment income. The
Fund may distribute  quarterly net short-term  capital gains, if  any. The  Fund
intends to distribute net short-term and net long-term 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  net 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 "Shareholders Services
- -- Automatic Investment of Dividends and Distributions.")
 
    TAXES.  Because  the Fund intends  to distribute all  of its net  investment
income  and capital gains to shareholders and otherwise continue to 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.
Shareholders who are required to pay taxes on their income will normally have to
pay  federal income  taxes, and  any state  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  or short-term
capital gains, are taxable to the  shareholder as ordinary income regardless  of
whether the shareholder receives such payments in additional shares or in cash.
 
    Distributions  of  net  long-term  capital gains,  if  any,  are  taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash. Capital  gains distributions are not eligible  for
the corporate dividends received deduction.
 
                                       19
<PAGE>
    After  the  end  of  the  calendar  year,  shareholders  will  be  sent full
information on their dividends and capital gains distributions for tax purposes.
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.
 
    Shareholders should consult their  tax advisers as  to the applicability  of
the foregoing to their current situation.
 
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
 
    From  time to time the Fund may  quote its "yield" and/or its "total return"
in advertisements and sales literature. Both  the yield and the total return  of
the  Fund are  based on  historical earnings  and are  not intended  to indicate
future performance.  The yield  of the  Fund  is computed  by dividing  the  net
investment  income of the Fund  over a 30-day period  by an average value (using
the average number  of shares entitled  to receive dividends  and the net  asset
value  per share at  the end of  the period), all  in accordance with applicable
regulatory requirements.  Such amount  is  compounded for  six months  and  then
annualized for a twelve-month period to derive the yield of the Fund.
 
   
    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 periods of one, five and ten years, as well as over the life
of  the Fund,  if less than  any of  the foregoing. Average  annual total return
reflects all income earned by the Fund, any appreciation or depreciation of  the
Fund's  assets and all expenses incurred by the Fund, 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 the growth of
hypothetical investments of $10,000, $50,000 and $100,000 in shares of the Fund.
The Fund  from time  to time  may  also advertise  its performance  relative  to
certain  performance rankings and indexes  compiled by independent organizations
(such as mutual fund performance rankings of Lipper Analytical Services, Inc.).
 
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.
 
    The  Fund is  not required  to hold Annual  Meetings of  Shareholders and in
ordinary circumstances the  Fund does not  intend to hold  such meetings.  Under
certain circumstances the Trustees may be removed by action of the Trustees. The
shareholders also have the right under certain circumstances to remove Trustees.
 
    Under Massachusetts law, shareholders of a business trust may, under certain
limited  circumstances, be held personally liable as partners for 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  and
reimbursement  of expenses 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, in the opinion of  Massachusetts
counsel to the
 
                                       20
<PAGE>
Fund, the risk to shareholders of personal liability is remote.
 
   
    CODE  OF ETHICS.  The Adviser is subject to a Code of Ethics with respect to
investment transactions in which the  Adviser's officers, directors and  certain
other  persons  have a  beneficial  interest to  avoid  any actual  or potential
conflict or  abuse  of their  fiduciary  position. The  Code  of Ethics,  as  it
pertains  to  the TCW/DW  Funds,  contains several  restrictions  and procedures
designed to  eliminate conflicts  of interest  including: (a)  pre-clearance  of
personal  investment  transactions  to  ensure  that  personal  transactions  by
employees are not being conducted at the same time as the Adviser's clients; (b)
quarterly reporting  of  personal  securities transactions;  (c)  a  prohibition
against  personally acquiring securities in an initial public offering, entering
into uncovered  short sales  and  writing uncovered  options;  (d) a  seven  day
"black-out  period" prior to  or subsequent to a  TCW/DW Fund transaction during
which portfolio  managers are  prohibited from  making certain  transactions  in
securities  which  are  being  purchased  or  sold  by  a  TCW/DW  Fund;  (e)  a
prohibition, with respect to certain investment personnel, from profiting in the
purchase and sale, or sale and purchase, of the same (or equivalent)  securities
within  60 calendar days;  and (f) a prohibition  against acquiring any security
which is subject to firm wide or, if applicable, a department restriction of the
Adviser. The Code  of Ethics provides  that exemptive relief  may be given  from
certain  of its  requirements, upon  application. The  Adviser's Code  of Ethics
complies with  regulatory requirements  and, insofar  as it  relates to  persons
associated  with  registered investment  companies, the  Report of  the Advisory
Group on Personal Investing of the Investment Company Institute.
    
 
    SHAREHOLDER INQUIRIES.  All inquiries regarding the Fund should be  directed
to  the Fund at the telephone number or  address set forth on the front cover of
this Prospectus.
 
                                       21
<PAGE>
APPENDIX
- --------------------------------------------------------------------------------
 
RATINGS OF CORPORATE DEBT INSTRUMENTS
MOODY'S INVESTORS SERVICE INC. ("MOODY'S")
 
                         FIXED-INCOME SECURITY RATINGS
 
<TABLE>
<S>        <C>
Aaa        Fixed-income  securities which are rated  Aaa are judged to be  of the best quality. They
           carry the smallest  degree of  investment risk  and are  generally referred  to as  "gilt
           edge."  Interest payments are protected  by a large or  by an exceptionally stable margin
           and principal is secure. While the various protective elements are likely to change, such
           changes as  can  be visualized  are  most unlikely  to  impair the  fundamentally  strong
           position of such issues.
Aa         Fixed-income  securities which  are rated  Aa are  judged to  be of  high quality  by all
           standards. Together with the  Aaa group they  comprise what are  generally known as  high
           grade fixed-income securities. They are rated lower than the best fixed-income securities
           because  margins of protection may not be as large as in Aaa securities or fluctuation of
           protective elements may be of  greater amplitude or there  may be other elements  present
           which make the long-term risks appear somewhat larger than in Aaa securities.
A          Fixed-income  securities which are  rated A possess  many favorable investment attributes
           and are to be considered  as upper medium grade  obligations. Factors giving security  to
           principal and interest are considered adequate, but elements may be present which suggest
           a susceptibility to impairment sometime in the future.
Baa        Fixed-income  securities which are rated Baa  are considered as medium grade obligations;
           i.e., they  are  neither highly  protected  nor  poorly secured.  Interest  payments  and
           principal security appear adequate for the present but certain protective elements may be
           lacking  or may  be characteristically  unreliable over  any great  length of  time. Such
           fixed-income securities  lack outstanding  investment characteristics  and in  fact  have
           speculative characteristics as well.
           Fixed-income securities rated Aaa, Aa, A and Baa are considered investment grade.
Ba         Fixed-income securities which are rated Ba are judged to have speculative elements; their
           future  cannot  be considered  as  well assured.  Often  the protection  of  interest and
           principal payments may be very moderate,  and therefore not well safeguarded during  both
           good  and bad times  in the future.  Uncertainty of position  characterizes bonds in this
           class.
B          Fixed-income securities which are rated B generally lack characteristics of the desirable
           investment. Assurance of interest and principal payments or of maintenance of other terms
           of the contract over any long period of time may be small.
Caa        Fixed-income securities which are rated Caa are  of poor standing. Such issues may be  in
           default or there may be present elements of danger with respect to principal or interest.
Ca         Fixed-income securities which are rated Ca present obligations which are speculative in a
           high degree. Such issues are often in default or have other marked shortcomings.
C          Fixed-income  securities which  are rated  C are the  lowest rated  class of fixed-income
           securities, and issues so  rated can be  regarded as having  extremely poor prospects  of
           ever attaining any real investment standing.
</TABLE>
 
    RATING  REFINEMENTS:  Moody's may apply numerical  modifiers, 1, 2, and 3 in
each  generic  rating  classification  from  Aa  through  B  in  its   municipal
fixed-income  security rating system. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking;  and a modifier  3 indicates  that the issue  ranks in  the
lower end of its generic rating category.
 
                                       22
<PAGE>
                            COMMERCIAL PAPER RATINGS
 
    Moody's  Commercial  Paper  ratings are  opinions  of the  ability  to repay
punctually promissory obligations not having  an original maturity in excess  of
nine  months. The ratings apply to Municipal Commercial Paper as well as taxable
Commercial Paper. Moody's employs the  following three designations, all  judged
to  be investment  grade, to indicate  the relative repayment  capacity of rated
issuers: Prime-1, Prime-2, Prime-3.
 
    Issuers rated Prime-1 have a  superior capacity for repayment of  short-term
promissory  obligations.  Issuers  rated  Prime-2  have  a  strong  capacity for
repayment of short-term promissory obligations;  and Issuers rated Prime-3  have
an  acceptable  capacity  for repayment  of  short-term  promissory obligations.
Issuers rated Not Prime do not fall within any of the Prime rating categories.
 
STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S")
 
                         FIXED-INCOME SECURITY RATINGS
 
    A Standard & Poor's fixed-income security rating is a current assessment  of
the  creditworthiness of an obligor with  respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.
 
    The ratings are  based on  current information  furnished by  the issuer  or
obtained  by Standard  & Poor's  from other  sources it  considers reliable. The
ratings are  based, in  varying degrees,  on the  following considerations:  (1)
likelihood  of default-capacity and willingness of  the obligor as to the timely
payment of interest and repayment of  principal in accordance with the terms  of
the  obligation;  (2)  nature  of  and provisions  of  the  obligation;  and (3)
protection afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization or other arrangement under the laws of bankruptcy and
other laws affecting creditors' rights.
 
    Standard & Poor's does  not perform an audit  in connection with any  rating
and  may, on occasion, rely on  unaudited financial information. The ratings may
be changed, suspended or withdrawn as a result of changes in, or  unavailability
of, such information, or for other reasons.
 
<TABLE>
<S>        <C>
AAA        Fixed-income  securities  rated "AAA"  have the  highest rating  assigned by  Standard &
           Poor's. Capacity to pay interest and repay principal is extremely strong.
AA         Fixed-income securities rated "AA" have a very strong capacity to pay interest and repay
           principal and differs from the highest-rated issues only in small degree.
A          Fixed-income securities  rated "A"  have a  strong capacity  to pay  interest and  repay
           principal  although they are somewhat more susceptible to the adverse effects of changes
           in circumstances and  economic conditions than  fixed-income securities in  higher-rated
           categories.
BBB        Fixed-income  securities rated "BBB" are regarded as  having an adequate capacity to pay
           interest  and  repay  principal.  Whereas  it  normally  exhibits  adequate   protection
           parameters,  adverse economic  conditions or changing  circumstances are  more likely to
           lead to  a  weakened capacity  to  pay interest  and  repay principal  for  fixed-income
           securities in this category than for fixed-income securities in higher-rated categories.
           Fixed-income securities rated AAA, AA, A and BBB are considered investment grade.
BB         Fixed-income  securities rated  "BB" have less  near-term vulnerability  to default than
           other speculative  grade  fixed-income  securities.  However,  it  faces  major  ongoing
           uncertainties  or exposure to  adverse business, financial  or economic conditions which
           could lead to inadequate capacity or willingness to pay interest and repay principal.
B          Fixed-income securities rated "B" have a greater vulnerability to default but  presently
           has  the capacity to  meet interest payments and  principal repayments Adverse business,
           financial or economic  conditions would  likely impair  capacity or  willingness to  pay
           interest and repay principal.
</TABLE>
 
                                       23
<PAGE>
<TABLE>
<S>        <C>
CCC        Fixed-income  securities  rated  "CCC"  have  a  current  identifiable  vulnerability to
           default, and is dependent upon favorable business, financial and economic conditions  to
           meet  timely payments of interest  and repayments of principal.  In the event of adverse
           business, financial or economic conditions, it is not likely to have the capacity to pay
           interest and repay principal.
CC         The rating "CC" is typically applied  to fixed-income securities subordinated to  senior
           debt which is assigned an actual or implied "CCC" rating.
C          The  rating "C" is  typically applied to fixed-income  securities subordinated to senior
           debt which is assigned an actual or implied "CCC-" rating.
CI         The rating "CI" is reserved  for fixed-income securities on  which no interest is  being
           paid.
NR         Indicates  that no rating has been requested,  that there is insufficient information on
           which to base a  rating or that  Standard & Poor's  does not rate  a particular type  of
           obligation as a matter of policy.
           Fixed-income  securities rated  "BB", "B",  "CCC", "CC" and  "C" are  regarded as having
           predominantly speculative characteristics with respect  to capacity to pay interest  and
           repay  principal. "BB"  indicates the  least degree of  speculation and  "C" the highest
           degree of speculation. While such fixed-income securities will likely have some  quality
           and  protective characteristics,  these are outweighed  by large  uncertainties or major
           risk exposures to adverse conditions.
           Plus (+) or minus (-): The rating from "AA" to "CCC" may be modified by the addition  of
           a plus or minus sign to show relative standing with the major ratings categories.
</TABLE>
 
                            COMMERCIAL PAPER RATINGS
 
    Standard  and Poor's commercial paper rating  is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. The  commercial paper rating  is not a  recommendation to purchase  or
sell a security. The ratings are based upon current information furnished by the
issuer  or obtained by S&P from other sources it considers reliable. The ratings
may  be  changed,  suspended,  or  withdrawn  as  a  result  of  changes  in  or
unavailability  of such information.  Ratings are graded  into group categories,
ranging from "A"  for the  highest quality obligations  to "D"  for the  lowest.
Ratings  are applicable  to both  taxable and  tax-exempt commercial  paper. The
categories are as follows:
 
    Issues assigned A ratings are regarded  as having the greatest capacity  for
timely payment. Issues in this category are further refined with the designation
1, 2, and 3 to indicate the relative degree of safety.
 
<TABLE>
<S>        <C>
A-1        indicates that the degree of safety regarding timely payment is very strong.
A-2        indicates capacity for timely payment on issues with this designation is strong. However,
           the relative degree of safety is not as overwhelming as for issues designated "A-1".
A-3        indicates   a  satisfactory  capacity  for  timely  payment.  Obligations  carrying  this
           designation are, however, somewhat more vulnerable  to the adverse effects of changes  in
           circumstances than obligations carrying the higher designations.
</TABLE>
 
                                       24
<PAGE>
 
   
TCW/DW Income and
Growth Fund
Two World Trade Center
New York, New York 10048
TRUSTEES
John C. Argue
Richard M. DeMartini                 TCW/DW
Charles A. Fiumefreddo               INCOME AND
John R. Haire                             GROWTH FUND
Dr. Manuel H. Johnson
Paul Kolton
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive
Officer
Thomas E. Larkin, Jr.
President
Sheldon Curtis
Vice President, Secretary and
General Counsel
Robert M. Hanisee
Vice President
Kevin A. Hunter
Vice President
Mark Attanasio
Vice President
Melissa Weiler
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
MANAGER
Dean Witter Services Company Inc.
ADVISER
TCW Funds Management, Inc.
                                     PROSPECTUS
37882                                MARCH 26, 1996
 
    
<PAGE>
                                                                  [LOGO]
                                                                      INCOME AND
                                                                     GROWTH FUND
 
STATEMENT OF ADDITIONAL INFORMATION
 
   
MARCH 26, 1996
    
 
- --------------------------------------------------------------------------------
 
TCW/DW  Income  and Growth  Fund (the  "Fund")  is an  open-end, non-diversified
management investment company,  whose investment objective  is to generate  high
total  return by providing a high level  of current income and the potential for
capital appreciation.  The Fund  seeks to  achieve its  investment objective  by
investing  primarily  in  convertible  securities,  fixed-income  securities and
common stocks. See "Investment Objective and Policies."
 
   
    A Prospectus for  the Fund dated  March 26, 1996,  which provides the  basic
information  you  should know  before  investing in  the  Fund, may  be obtained
without charge from the Fund at the address or telephone numbers listed below or
from the Fund's Distributor, Dean Witter Distributors Inc., or from Dean  Witter
Reynolds  Inc.  at  any of  its  branch  offices. This  Statement  of Additional
Information is not a Prospectus. It contains information in addition to and more
detailed than  that set  forth in  the  Prospectus. It  is intended  to  provide
additional  information regarding the activities and operations of the Fund, and
should be read in conjunction with the Prospectus.
    
 
   
TCW/DW INCOME AND GROWTH FUND
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll free)
    
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
 
- ----------------------------------------------------------------------------
 
   
<TABLE>
<S>                                                                                    <C>
The Fund and its Management..........................................................          3
 
Trustees and Officers................................................................          6
 
Investment Practices and Policies....................................................         13
 
Investment Restrictions..............................................................         26
 
Portfolio Transactions and Brokerage.................................................         27
 
The Distributor......................................................................         29
 
Shareholder Services.................................................................         31
 
Repurchases and Redemptions..........................................................         35
 
Dividends, Distributions and Taxes...................................................         35
 
Performance Information..............................................................         37
 
Description of Shares................................................................         37
 
Custodian and Transfer Agent.........................................................         38
 
Independent Accountants..............................................................         38
 
Reports to Shareholders..............................................................         38
 
Legal Counsel........................................................................         38
 
Experts..............................................................................         39
 
Registration Statement...............................................................         39
 
Report of Independent Accountants....................................................         40
 
Financial Statements--January 31, 1996...............................................         41
</TABLE>
    
 
                                       2
<PAGE>
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
 
THE FUND
 
   
    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
November  23,  1992.  The Fund  is  one  of the  TCW/DW  Funds,  which currently
consist, in addition  to the  Fund, of TCW/DW  Core Equity  Trust, TCW/DW  North
American  Government  Income Trust,  TCW/DW Latin  American Growth  Fund, TCW/DW
Small Cap  Growth  Fund, TCW/DW  Balanced  Fund, TCW/DW  Mid-Cap  Equity  Trust,
TCW/DW  Term Trust 2000, TCW/DW Term Trust  2002, TCW/DW Term Trust 2003, TCW/DW
Emerging Markets Opportunities Trust and TCW/DW Total Return Trust.
    
 
THE MANAGER
 
   
    Dean Witter Services Company Inc.  (the "Manager"), a Delaware  corporation,
whose  address  is Two  World Trade  Center, New  York, New  York 10048,  is the
Fund's Manager.  The  Manager  is  a  wholly-owned  subsidiary  of  Dean  Witter
InterCapital  Inc. ("InterCapital"),  a Delaware corporation.  InterCapital is a
wholly-owned subsidiary  of Dean  Witter, Discover  & Co.  ("DWDC"), a  Delaware
corporation.  In an internal  reorganization which took  place in January, 1993,
InterCapital assumed  the  investment advisory,  administrative  and  management
activities  previously  performed by  the InterCapital  Division of  Dean Witter
Reynolds  Inc.  ("DWR"),   a  broker-dealer  affiliate   of  the  Manager.   (As
hereinafter   used  in  this  Statement  of  Additional  Information,  the  term
"InterCapital" refers  to  DWR's InterCapital  Division  prior to  the  internal
reorganization  and  to Dean  Witter  InterCapital Inc.  thereafter.)  The daily
management of the Fund  is conducted by  or under the  direction of officers  of
the  Fund and of the  Manager and Adviser (see below),  subject to review by the
Fund's Board  of  Trustees.  In  addition, Trustees  of  the  Fund  may  provide
guidance  on economic factors and interest  rate trends. Information as to these
Trustees and officers is contained under the caption "Trustees and Officers."
    
 
    Pursuant to a  management agreement  (the "Management  Agreement") with  the
Manager,  the  Fund  has retained  the  Manager  to manage  the  Fund's business
affairs, supervise the  overall day-to-day  operations of the  Fund (other  than
rendering  investment  advice) and  provide all  administrative services  to the
Fund. Under the terms  of the Management Agreement,  the Manager also  maintains
certain  of the  Fund's books  and furnishes,  at its  own expense,  such office
space, facilities, equipment, supplies, clerical help and bookkeeping and  legal
services  as the  Fund may  reasonably require in  the conduct  of its business,
including  the   preparation   of   prospectuses,   statements   of   additional
information,  proxy statements and reports required to be filed with the federal
and state  securities  commissions  (except  insofar  as  the  participation  or
assistance  of independent accountants  and attorneys is, in  the opinion of the
Manager, necessary or desirable). In addition, the Manager pays the salaries  of
all  personnel,  including  officers  of  the Fund,  who  are  employees  of the
Manager. The Manager also bears the cost of the Fund's telephone service,  heat,
light, power and other utilities.
 
    As  full compensation for the services  and facilities furnished to the Fund
and expenses of  the Fund  assumed by  the Manager,  the Fund  pays the  Manager
monthly  compensation calculated daily by applying the following annual rates to
the net assets  of the Fund  determined as of  the close of  each business  day:
0.45%  of the portion of daily net  assets not exceeding $500 million; and 0.42%
of the portion of daily net assets exceeding $500 million. While the total  fees
payable  under the  Management Agreement  and the  Advisory Agreement (described
below) are higher than that paid by most other investment companies for  similar
services,  the Board  of Trustees determined  that the total  fees payable under
the Management Agreement and the  Advisory Agreement are reasonable in  relation
to  the scope and quality of services to be provided thereunder. In this regard,
in evaluating the Management Agreement and the Advisory Agreement, the Board  of
Trustees  recognized  that  the Manager  and  the  Adviser had,  pursuant  to an
agreement described  under  the section  entitled  "The Adviser,"  agreed  to  a
division  as between themselves  of the total fees  necessary for the management
of the business affairs of and the furnishing of investment advice to the  Fund.
Accordingly,  in reviewing the Management  Agreement and Advisory Agreement, the
Board viewed as most significant the question
 
                                       3
<PAGE>
   
as to  whether  the  total  fees  payable  under  the  Management  and  Advisory
Agreements  were in the aggregate  reasonable in relation to  the services to be
provided thereunder. For the fiscal period from March 31, 1993 (commencement  of
operations)  through January  31, 1994  and the  fiscal years  ended January 31,
1995 and January  31, 1996,  the Fund accrued  to the  Manager and  InterCapital
total  compensation  under the  Management Agreement  (and the  prior management
agreements described below)  of $120,447 (excluding  waived fees), $283,555  and
$247,315, respectively.
    
 
    The   Management  Agreement  provides   that  in  the   absence  of  willful
misfeasance,  bad  faith,  gross  negligence   or  reckless  disregard  of   its
obligations  thereunder, the  Manager is not  liable to  the Fund or  any of its
investors for any act or  ommission by the Manager  or for any losses  sustained
by  the Fund or its investors. The  Management Agreement in no way restricts the
Manager from acting as manager to others.
 
    InterCapital undertook  to  assume all  expenses  (except for  the  Plan  of
Distribution  fee and brokerage fees) and waive the compensation provided for in
the Management Agreement, and  the Adviser undertook  to waive the  compensation
provided  for in the Advisory Agreement, until  the Fund attained $50 million of
net assets or until six months from  the date of the Fund's initial  prospectus,
whichever  occurred  first.  The  Fund  commenced  accruing  the  management and
advisory fees and other expenses on August 5, 1993.
 
    InterCapital paid the organizational expenses of the Fund incurred prior  to
the  offering of  the Fund's  shares. The  Fund has  reimbursed InterCapital for
$200,000 of such  expenses, in  accordance with  the terms  of the  Underwriting
Agreement  between  the Fund  and  Dean Witter  Distributors  Inc. The  Fund has
deferred and is amortizing the reimbursed  expenses on the straight line  method
over  a period  not to exceed  five years from  the date of  commencement of the
Fund's operations.
 
   
    The Management Agreement was initially approved  by the Trustees on June  4,
1994  and became effective on April  17, 1995. The Management Agreement replaced
a prior management agreement in effect  between the Fund and the Manager,  which
in  turn replaced a management agreement  between the Fund and InterCapital, the
parent company of the Manager. The nature and scope of services provided to  the
Fund,  and the formula to  determine fees paid by  the Fund under the Management
Agreement, are  identical  to  those  of  the  previous  agreement.  (The  prior
management  agreement,  in  turn,  had  replaced, on  June  30,  1993,  upon the
spin-off by Sears, Roebuck and Co. of  its remaining shares of DWDC, an  earlier
substantially  identical management agreement which was approved by the Trustees
on January 21, 1993 and by InterCapital as the then sole shareholder on  January
22,  1993.)  The Management  Agreement may  be terminated  at any  time, without
penalty, on thirty days' notice by the Trustees of the Fund, or by the Manager.
    
 
   
    Under its terms, the Management Agreement  had an initial term ending  April
30,  1995,  and provides  that  it will  continue in  effect  from year  to year
thereafter, provided continuance of the Agreement is approved at least  annually
by  the Trustees of the  Fund, including the vote of  a majority of the Trustees
of the Fund  who are  not parties  to the  Management or  Advisory Agreement  or
"interested  persons"  (as defined  in the  Investment Company  Act of  1940, as
amended  (the  "Act")),  of  any   such  party  (the  "Independent   Trustees").
Continuation  of the  Management Agreement for  one year, until  April 30, 1996,
was approved by the Trustees, including a majority of the Independent  Trustees,
at a meeting called for that purpose on April 20, 1995.
    
 
THE ADVISER
 
   
    TCW  Funds Management, Inc. (the "Adviser")  is a wholly-owned subsidiary of
The TCW Group, Inc. ("TCW"), whose subsidiaries, including Trust Company of  the
West  and TCW Asset  Management Company, provide a  variety of trust, investment
management and  investment  advisory  services.  As of  January  31,  1996,  the
Adviser  and its  affiliates had approximately  $53 billion  under management or
committed to  management. The  Adviser is  headquartered at  865 South  Figueroa
Street,  Suite  1800, Los  Angeles,  California 90017  and  is registered  as an
investment adviser under  the Investment Advisers  Act of 1940.  In addition  to
the Fund, the Adviser serves as investment adviser to
    
 
                                       4
<PAGE>
   
eleven  other  TCW/DW Funds:  TCW/DW Core  Equity  Trust, TCW/DW  North American
Government Income Trust,  TCW/DW Latin  American Growth Fund,  TCW/DW Small  Cap
Growth  Fund, TCW/DW  Balanced Fund,  TCW/DW Mid-Cap  Equity Trust,  TCW/DW Term
Trust 2000, TCW/  DW Term Trust  2002, TCW/DW Term  Trust 2003, TCW/DW  Emerging
Markets  Opportunities Trust  and TCW/DW  Total Return  Trust. The  Adviser also
serves as  investment  adviser  to  TCW Convertible  Securities  Fund,  Inc.,  a
closed-end  investment company traded on the New York Stock Exchange, and to TCW
Galileo Funds, Inc.,  an open-end  investment company,  and acts  as adviser  or
sub-adviser to other investment companies.
    
 
   
    Robert  A. Day,  who is Chairman  of the Board  of Directors of  TCW, may be
deemed to  be  a control  person  of the  Adviser  by virtue  of  the  aggregate
ownership  of Mr. Day and his family of  more than 25% of the outstanding voting
stock of TCW.
    
 
    Pursuant to  an investment  advisory  agreement (the  "Advisory  Agreement")
with  the  Adviser, the  Fund  has retained  the  Adviser to  invest  the Fund's
assets, including the placing of orders  for the purchase and sale of  portfolio
securities.  The  Adviser  obtains  and evaluates  such  information  and advice
relating to  the economy,  securities  markets, and  specific securities  as  it
considers  necessary or useful to continuously manage  the assets of the Fund in
a manner  consistent with  its investment  objective. In  addition, the  Adviser
pays  the salaries  of all  personnel, including officers  of the  Fund, who are
employees of the Adviser.
 
   
    As full compensation for the services  and facilities furnished to the  Fund
and  expenses of  the Fund  assumed by  the Adviser,  the Fund  pays the Adviser
monthly compensation calculated daily by applying the following annual rates  to
the  net assets  of the Fund  determined as of  the close of  each business day:
0.30% of the portion of daily net  assets not exceeding $500 million; and  0.28%
of  the  portion of  daily net  assets  exceeding $500  million. For  the fiscal
period from March 31, 1993 through January  31, 1994 and the fiscal years  ended
January  31, 1995 and  January 31, 1996,  the Fund accrued  to the Adviser total
compensation under the  Advisory Agreement of  $80,298 (excluding waived  fees),
$189,037 and $164,877, respectively.
    
 
    The  Advisory Agreement provides that in the absence of willful misfeasance,
bad  faith,  gross   negligence  or  reckless   disregard  of  its   obligations
thereunder,  the Adviser is not  liable to the Fund or  any of its investors for
any act or omission by  the Adviser or for any  losses sustained by the Fund  or
its  Investors.  The Advisory  Agreement in  no way  restricts the  Adviser from
acting as investment adviser to others.
 
    The Advisory Agreement  was initially  approved by the  Trustees on  January
21,  1993 and by InterCapital as then  sole shareholder on January 22, 1993. The
Advisory Agreement may  be terminated at  any time, without  penalty, on  thirty
days'  notice by  the Trustees  of the Fund,  by the  holders of  a majority, as
defined in the Act, of  the outstanding shares of the  Fund, or by the  Adviser.
The  Agreement will automatically  terminate in the event  of its assignment (as
defined in the Act).
 
   
    Under its terms, the Advisory Agreement continued in effect until April  30,
1994,  and provides that it will continue from year to year thereafter, provided
continuance of the Agreement is  approved at least annually  by the vote of  the
holders  of a majority, as defined in the  Act, of the outstanding shares of the
Fund, or  by the  Trustees  of the  Fund; provided  that  in either  event  such
continuance  is approved annually by  the vote of a  majority of the Independent
Trustees of the Fund, which vote must be cast in person at a meeting called  for
the  purpose of voting on such  approval. Continuation of the Advisory Agreement
until April 30, 1996 was approved by  the Trustees, including a majority of  the
Independent Trustees, at a meeting called for that purpose on April 20, 1995.
    
 
    Expenses   not  expressly  assumed  by  the  Manager  under  the  Management
Agreement, by the Adviser under the Advisory Agreement or by the Distributor  of
the  Fund's  shares,  Dean  Witter  Distributors  Inc.  ("Distributors"  or  the
"Distributor") (see "The Distributor"), will be  paid by the Fund. The  expenses
borne  by the  Fund include,  but are not  limited to:  expenses of  the Plan of
Distribution pursuant  to  Rule  12b-1  (see  "The  Distributor");  charges  and
expenses of any registrar;
 
                                       5
<PAGE>
custodian,  stock transfer and dividend  disbursing agent; brokerage commissions
and securities  transaction  costs;  taxes;  engraving  and  printing  of  share
certificates;  registration costs of  the Fund and its  shares under federal and
state securities laws; the cost and expense of printing, including  typesetting,
and  distributing Prospectuses and  Statements of Additional  Information of the
Fund and  supplements  thereto  to  the Fund's  shareholders;  all  expenses  of
shareholders'  and Trustees' meetings and of  preparing, printing and mailing of
proxy statements  and  reports to  shareholders;  fees and  travel  expenses  of
Trustees  or members of any advisory board or committee who are not employees of
the Manager  or Adviser  or  any corporate  affiliate  of either;  all  expenses
incident  to  any  dividend,  withdrawal  or  redemption  options;  charges  and
expenses of any outside service used for pricing of the Fund's shares; fees  and
expenses  of  legal  counsel, including  counsel  to  the Trustees  who  are not
interested persons of the Fund or of  the Manager or the Adviser (not  including
compensation  or expenses of attorneys  who are employees of  the Manager or the
Adviser) and independent accountants; membership dues of industry  associations;
interest  on  Fund  borrowings;  postage;  insurance  premiums  on  property  or
personnel (including  officers and  Trustees) of  the Fund  which inure  to  its
benefit;  extraordinary expenses  (including, but  not limited  to, legal claims
and liabilities and litigation costs and any indemnification relating  thereto);
and all other costs of the Fund's operation.
 
   
    Pursuant   to  the  Management  and  Advisory  Agreements,  total  operating
expenses of  the Fund  are subject  to applicable  limitations under  rules  and
regulations  of  states  where  the  Fund  is  authorized  to  sell  its shares.
Therefore, operating expenses  are effectively subject  to the most  restrictive
of  such limitations as  the same may  be amended from  time to time. Presently,
the most  restrictive limitation  is as  follows. If,  in any  fiscal year,  the
Fund's  total operating expenses, exclusive  of taxes, interest, brokerage fees,
distribution fees and  extraordinary expenses  (to the extent  permitted by  the
applicable  state securities laws  and regulations), exceed 2  1/2% of the first
$30,000,000 of average daily net assets, 2%  of the next $70,000,000 and 1  1/2%
of  any excess over $100,000,000, the Manager and the Adviser will reimburse the
Fund, on a pro rata basis, for the  amount of such excess. Such amount, if  any,
will  be calculated daily and  credited on a monthly  basis. The Fund's expenses
did not exceed  the limitation  set forth above  during the  fiscal period  from
March  31, 1993 through January 31, 1994  and the fiscal years ended January 31,
1995 and January 31, 1996.
    
 
    DWR and TCW  have entered  into an Agreement  for the  purpose of  creating,
managing,  administering and distributing  a family of  investment companies and
other managed pooled investment  vehicles offered on a  retail basis within  the
United  States.  The Agreement  contemplates that,  subject  to approval  of the
board of trustees  or directors of  a particular investment  entity, DWR or  its
affiliates  will provide  management and  distribution services  and TCW  or its
affiliates will provide  investment advisory services  for each such  investment
entity.  The Agreement sets  forth the terms and  conditions of the relationship
between TCW and  its affiliates and  DWR and  its affiliates and  the manner  in
which  the parties will implement the creation and maintenance of the investment
entities, including the  parties' expectations  as to  respective allocation  of
fees  to be paid  by an investment entity  to each party for  the services to be
provided to it by such party.
 
    The Fund  has acknowledged  that each  of DWR  and TCW  owns its  own  name,
initials  and logo.  The Fund has  agreed to change  its name at  the request of
either the Manager or  the Adviser, or if  the Management Agreement between  the
Manager  and the Fund or the Advisory Agreement between the Adviser and the Fund
is terminated.
 
TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
 
   
    The Trustees and Executive  Officers of the  Fund, their principal  business
occupations  during the last five years and their affiliations, if any, with the
Manager or the Adviser, and the affiliated companies of either, and with the  12
TCW/DW Funds and with the 80 investment companies of
    
 
                                       6
<PAGE>
which  InterCapital  serves as  investment  manager (or  investment  adviser and
administrator) (the "Dean Witter Funds"), are shown below.
 
   
<TABLE>
<CAPTION>
  NAME, AGE, POSITION WITH FUND AND ADDRESS     PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ---------------------------------------------  ---------------------------------------------
<S>                                            <C>
John C. Argue (64)                             Of Counsel,  Argue Pearson  Harbison &  Myers
Trustee                                        (law firm); Director, Avery Dennison Corpora-
c/o Argue Pearson Harbison & Myers             tion  (manufacturer of self-adhesive products
801 South Flower Street                        and  office  supplies)  and  CalMat   Company
Los Angeles, California                        (producer  of  aggregates, asphalt  and ready
                                               mixed   concrete);   Chairman,   Rose   Hills
                                               Memorial  Park (cemetery); advisory director,
                                               LAACO Ltd.  (owner  and operator  of  private
                                               clubs  and real estate);  director or trustee
                                               of various business  and not-for-profit  cor-
                                               porations; Director, TCW Galileo Funds, Inc.;
                                               Trustee,  University of  Southern California,
                                               Occidental  College   and   Pomona   College;
                                               Trustee of the TCW/DW Funds.
 
Richard M. DeMartini* (43)                     President and Chief Operating Officer of Dean
Trustee                                        Witter  Capital, a division  of DWR; Director
Two World Trade Center                         of   DWR,    the    Manager,    InterCapital,
New York, New York                             Distributors  and  Dean Witter  Trust Company
                                               ("DWTC"); Executive  Vice President  of  Dean
                                               Witter  Discover  & Co.  ("DWDC");  Member of
                                               the DWDC  Management  Committee;  Trustee  of
                                               the  TCW/  DW Funds;  Member  (since January,
                                               1993) and Chairman  (since January, 1995)  of
                                               the Board of Directors of NASDAQ.
 
Charles A. Fiumefreddo* (62)                   Chairman,   Chief   Executive   Officer   and
Chairman of the Board, Chief                   Director of  the  Manager,  InterCapital  and
Executive Officer and Trustee                  Distributors;  Executive  Vice  President and
Two World Trade Center                         Director  of  DWR;  formerly  Executive  Vice
New York, New York                             President   and   Director  of   DWDC  (until
                                               February,  1993);  Chairman  of  the   Board,
                                               Chief  Executive Officer  and Trustee  of the
                                               TCW/DW  Funds;   Chairman   of   the   Board,
                                               Director  or  Trustee,  President  and  Chief
                                               Executive Officer of  the Dean Witter  Funds;
                                               Chairman  and Director  of DWTC;  Director of
                                               various DWDC subsidiaries.
 
John R. Haire (71)                             Chairman of the Audit Committee and  Chairman
Trustee                                        of  the Committee of Independent Directors or
Two World Trade Center                         Trustees of each  of the  Dean Witter  Funds;
New York, New York                             formerly   President,  Council   for  Aid  to
                                               Education (1978-October,  1989) and  Chairman
                                               and   Chief   Executive  Officer   of  Anchor
                                               Corporation, an Investment Adviser
                                               (1964-1978); Director of Washington  National
                                               Corporation   (insurance);  Trustee   of  the
                                               TCW/DW Funds; Trustee of the TCW/DW Funds.
</TABLE>
    
 
                                       7
<PAGE>
   
<TABLE>
<CAPTION>
  NAME, AGE, POSITION WITH FUND AND ADDRESS     PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ---------------------------------------------  ---------------------------------------------
<S>                                            <C>
Dr. Manuel H. Johnson (47)                     Senior Partner, Johnson Smick  International,
Trustee                                        Inc.,  a consulting  firm; Koch  Professor of
c/o Johnson Smick International, Inc.          International Economics and  Director of  the
1133 Connecticut Avenue, N.W.                  Center  for Global  Market Studies  at George
Washington, D.C.                               Mason  University  (since  September,  1990);
                                               Co-Chairman  and  a founder  of the  Group of
                                               Seven   Council   (G7C),   an   international
                                               economic  commission (since September, 1990);
                                               Director  of  NASDAQ   (since  June,   1995);
                                               Director  of Greenwich  Capital Markets, Inc.
                                               (broker-dealer); formerly  Vice  Chairman  of
                                               the   Board  of  Governors   of  the  Federal
                                               Reserve System (February, 1986-August,  1990)
                                               and  Assistant  Secretary of  the  U.S. Trea-
                                               sury  (1982-1986);  Trustee  of  the   TCW/DW
                                               Funds; Director or Trustee of the Dean Witter
                                               Funds.
 
Paul Kolton (72)                               Chairman  of the Audit Committee and Chairman
Trustee                                        of the Committee  of Independent Trustees  of
c/o Gordon Altman Butowsky Weitzen             the  TCW/DW  Funds;  former  Chairman  of the
 Shalov & Wein                                 Financial   Accounting   Standards   Advisory
Counsel to the Independent Trustees            Council  and  Chairman  and  Chief  Executive
114 West 47th Street                           Officer  of  the  American  Stock   Exchange;
New York, New York                             Director   of  UCC   Investors  Holding  Inc.
                                               (Uniroyal Chemical  Company  Inc.);  director
                                               or    trustee   of   various   not-for-profit
                                               organizations; Director  or  Trustee  of  the
                                               Dean Witter Funds.
 
Thomas E. Larkin, Jr.* (56)                    Executive  Vice  President,  The  TCW  Group,
President and Trustee                          Inc.; President and Director of Trust Company
865 South Figueroa Street                      of the West and Vice Chairman and Director of
Los Angeles, California                        TCW Asset  Management  Company;  Chairman  of
                                               the  Adviser; Vice  Chairman of  the Advisory
                                               Council   for   the   College   of   Business
                                               Administration  of  the  University  of Notre
                                               Dame; Director  of the  California  Pediatric
                                               and  Family  Medicine  Center;  President and
                                               Director of TCW  Galileo Funds, Inc.;  Senior
                                               Vice  President of TCW Convertible Securities
                                               Fund, Inc.;  President  and  Trustee  of  the
                                               TCW/DW Funds.
 
Michael E. Nugent (59)                         General  Partner,  Triumph  Capital,  L.P., a
Trustee                                        private  investment   partnership;   formerly
c/o Triumph Capital, L.P.                      Vice  President, Bankers Trust Company and BT
237 Park Avenue                                Capital Corporation (1984-1988); Director  of
New York, New York                             various  business  organizations;  Trustee of
                                               the TCW/DW Funds; Director or Trustee of  the
                                               Dean Witter Funds.
</TABLE>
    
 
                                       8
<PAGE>
   
<TABLE>
<CAPTION>
  NAME, AGE, POSITION WITH FUND AND ADDRESS     PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ---------------------------------------------  ---------------------------------------------
<S>                                            <C>
John L. Schroeder (65)                         Retired;  Director  or  Trustee  of  the Dean
Trustee                                        Witter Funds;  Trustee of  the TCW/DW  Funds;
c/o Gordon Altman Butowsky Weitzen             Director   of  Citizens   Utilities  Company;
 Shalov & Wein                                 formerly Executive Vice  President and  Chief
Counsel to the Independent Trustees            Investment  Officer  of  the  Home  Insurance
114 West 47th Street                           Company   (August,   1991-September,   1995);
New York, New York                             formerly   Chairman   and   Chief  Investment
                                               Officer of  Axe-Houghton Management  and  the
                                               Axe-Houghton  Funds  (April,  1983-June 1991)
                                               and President  of USF&G  Financial  Services,
                                               Inc. (June, 1990-June, 1991).
 
Marc I. Stern* (51)                            President,  The TCW  Group, Inc.  (since May,
Trustee                                        1992); President and Director of the  Adviser
865 South Figueroa Street                      (since May, 1992); Vice Chairman and Director
Los Angeles, California                        of  TCW Asset Management  Company (since May,
                                               1992); Executive  Vice President  and  Direc-
                                               tor  of Trust  Company of  the West; Chairman
                                               and  Director  of  TCW  Galileo  Funds,  Inc;
                                               Trustee  of the TCW/DW Funds; Chairman of TCW
                                               Americas Development,  Inc. (since  November,
                                               1990);  Chairman of TCW  Asia, Limited (since
                                               January  1993);   Chairman  of   TCW   London
                                               International,  Limited (since  March, 1993);
                                               formerly  President   of   SunAmerica,   Inc.
                                               (financial  services  company);  Director  of
                                               Qualcomm, Incorporated (wireless
                                               communications);  Director   or  Trustee   of
                                               various not-for-profit organizations.
 
Sheldon Curtis (64)                            Senior  Vice President and General Counsel of
Vice President, Secretary and General Counsel  InterCapital and  the  Manager;  Senior  Vice
Two World Trade Center                         President  and Secretary of DWTC; Senior Vice
New York, New York                             President, Assistant Secretary and  Assistant
                                               General  Counsel  of  Distributors; Assistant
                                               Secretary  of   DWR   and   Vice   President,
                                               Secretary  and  General Counsel  of  the Dean
                                               Witter Funds and of the TCW/DW Funds.
 
Robert M. Hanisee (57)                         Managing Director  of the  Adviser;  Managing
Vice President                                 Director,  Director of  Research and Chairman
865 South Figueroa Street                      of  the  Equity  Policy  Committee  of  Trust
Los Angeles, California                        Company  of the West and TCW Asset Management
                                               Company.
 
Kevin A. Hunter (37)                           Senior Vice President  of the Adviser,  Trust
Vice President                                 Company  of the West and TCW Asset Management
865 South Figueroa Street                      Company.
Los Angeles, California
 
Mark Attanasio (38)                            Group Managing  Director of  TCW Group  Inc.;
Vice President                                 formerly Co-Chief Executive Officer and Chief
865 South Figueroa Street                      Portfolio   Strategist  of  Crescent  Capital
Los Angeles, California                        Corporation (April 1991-April 1995);
                                               formerly  a  Managing   Director  of   Drexel
                                               Burnham Lambert (March 1990-March 1991).
</TABLE>
    
 
                                       9
<PAGE>
   
<TABLE>
<CAPTION>
  NAME, AGE, POSITION WITH FUND AND ADDRESS     PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ---------------------------------------------  ---------------------------------------------
<S>                                            <C>
Melissa Weiler (31)                            Senior  Vice President of  the Adviser, Trust
Vice President                                 Company of the West and TCW Asset  Management
865 South Figueroa Street                      Company; Vice President and Portfolio Manager
Los Angeles, California                        of Crescent Capital Management (an investment
                                               adviser)  (since February,  1992); previously
                                               Senior Investment  Analyst at  First  Capital
                                               Holdings Corporation.
 
Thomas F. Caloia (50)                          First  Vice President and Assistant Treasurer
Treasurer                                      of   the   Manager   and   InterCapital   and
Two World Trade Center                         Treasurer  of  the  TCW/DW Funds  and  of the
New York, New York                             Dean Witter Funds; previously Vice  President
                                               of InterCapital.
</TABLE>
    
 
- ------------
*  Denotes Trustees who are "interested persons"  of the Fund, as defined in the
Act.
 
   
    In addition, Robert  M. Scanlan,  President and Chief  Operating Officer  of
the  Manager, InterCapital,  Executive Vice  President of  Distributors and DWTC
and Director of DWTC,  and David A. Hughey,  Executive Vice President and  Chief
Administrative  Officer of the Manager,  InterCapital, Distributors and DWTC and
Director  of  DWTC   and  Robert   S.  Giambrone,  Senior   Vice  President   of
InterCapital,  DWSC, Distributors and DWTC, are Vice Presidents of the Fund, and
Marilyn K. Cranney and Barry Fink,  First Vice Presidents and Assistant  General
Counsels  of the Manager and InterCapital and  DWSC, and Lou Anne D. McInnis and
Ruth Rossi, Vice Presidents  and Assistant General Counsels  of the Manager  and
InterCapital  and DWSC and Carsten Otto, a Staff Attorney with InterCapital, are
Assistant Secretaries of the Fund.
    
 
   
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
    
 
   
    The Board of Trustees consists of ten (10) trustees. These same  individuals
also  serve as  trustees for all  of the  TCW/DW Funds. As  of the  date of this
Statement of Additional Information,  there are a total  of 12 TCW/DW Funds.  As
of  December 31, 1995,  the TCW/DW Funds  had total net  assets of approximately
$4.1 billion and approximately a quarter of a million shareholders.
    
 
   
    Six Trustees  (60% of  the total  number) have  no affiliation  or  business
connection  with TCW Funds Management, Inc. or Dean Witter Services Company Inc.
or any of their affiliated persons and do not own any stock or other  securities
issued  by DWDC  or TCW,  the parent companies  of Dean  Witter Services Company
Inc.  and   TCW   Funds   Management,  Inc.,   respectively.   These   are   the
"disinterested"   or  "independent"  Trustees.  The  other  four  Trustees  (the
"management Trustees") are affiliated with  either Dean Witter Services  Company
Inc.  or TCW. Five of the six independent Trustees are also Independent Trustees
of the Dean Witter Funds.
    
 
   
    Law and regulation  establish both  general guidelines  and specific  duties
for  the Independent  Trustees. The  TCW/DW Funds  seek as  Independent Trustees
individuals of distinction  and experience in  business and finance,  government
service  or academia; these are people whose advice and counsel are in demand by
others and for  whom there is  often competition.  To accept a  position on  the
Funds'  Boards, such individuals may reject other attractive assignments because
the Funds make  substantial demands  on their time.  Indeed, by  serving on  the
Funds'  Boards, certain Trustees who would  otherwise be qualified and in demand
to serve on bank boards would be prohibited by law from doing so.
    
 
   
    All of the Independent Trustees serve as members of the Audit Committee  and
the  Committee of the Independent  Trustees. Four of them  also serve as members
of the Derivatives Committee. During the calendar year ended December 31,  1995,
the  three Committees held a combined total of nineteen meetings. The Committees
hold some meetings at  the offices of  the Manager or  Adviser and some  outside
those  offices. Management  Trustees or  officers do  not attend  these meetings
unless they  are invited  for purposes  of furnishing  information or  making  a
report.
    
 
                                       10
<PAGE>
   
    The  Committee of the  Independent Trustees is  charged with recommending to
the full Board  approval of management,  advisory and administration  contracts,
Rule  12b-1  plans  and distribution  and  underwriting  agreements; continually
reviewing Fund performance;  checking on  the pricing  of portfolio  securities,
brokerage  commissions, transfer agent costs  and performance, and trading among
Funds in the  same complex; and  approving fidelity bond  and related  insurance
coverage  and allocations,  as well  as other  matters that  arise from  time to
time. The Independent Trustees are  required to select and nominate  individuals
to  fill any  Independent Trustee vacancy  on the Board  of any Fund  that has a
Rule 12b-1 plan of distribution.  Each of the open-end  TCW/DW Funds has such  a
plan.
    
 
   
    The  Audit  Committee is  charged with  recommending to  the full  Board the
engagement  or  discharge  of  the  Fund's  independent  accountants;  directing
investigations  into matters  within the  scope of  the independent accountants'
duties, including the power  to retain outside  specialists; reviewing with  the
independent  accountants the audit plan and  results of the auditing engagement;
approving professional  services provided  by  the independent  accountants  and
other  accounting firms prior to the performance of such services; reviewing the
independence of the independent accountants; considering the range of audit  and
non-audit  fees;  reviewing  the  adequacy  of  the  Fund's  system  of internal
controls; and preparing  and submitting  Committee meeting minutes  to the  full
Board.
    
 
   
    Finally,  the  Board of  each  Fund has  formed  a Derivatives  Committee to
establish parameters for and oversee the activities of the Fund with respect  to
derivative investments, if any, made by the Fund.
    
 
   
DUTIES OF CHAIRMAN OF COMMITTEES
    
 
   
    The  Chairman  of  the  Committees is  responsible  for  keeping  abreast of
regulatory and industry developments and  the Funds' operations and  management.
He  screens and/or prepares written materials and identifies critical issues for
the Independent Trustees to consider,  develops agendas for Committee  meetings,
determines  the type and amount of information  that the Committees will need to
form a  judgment  on various  issues,  and  arranges to  have  that  information
furnished   to  Committee  members.  He  also   arranges  for  the  services  of
independent experts  and consults  with  them in  advance  of meetings  to  help
refine  reports  and to  focus  on critical  issues.  Members of  the Committees
believe that  the person  who serves  as Chairman  of all  three Committees  and
guides their efforts is pivotal to the effective functioning of the Committees.
    
 
   
    The  Chairman of the  Committees also maintains  continuous contact with the
Funds' management,  with independent  counsel to  the Independent  Trustees  and
with  the  Funds' independent  auditors.  He arranges  for  a series  of special
meetings involving  the annual  review of  investment advisory,  management  and
other  operating  contracts  of the  Funds  and,  on behalf  of  the Committees,
conducts negotiations  with the  Investment Adviser  and the  Manager and  other
service  providers.  In  effect, the  Chairman  of  the Committees  serves  as a
combination of chief executive and support staff of the Independent Trustees.
    
 
   
    The Chairman of  the Committees is  not employed by  any other  organization
and  devotes  his  time  primarily  to the  services  he  performs  as Committee
Chairman and  Independent Trustee  of the  TCW/DW Funds  and as  an  Independent
Director  or Trustee  of the Dean  Witter Funds. The  current Committee Chairman
has had a combined  total of more  than 35 years  experience in the  securities,
financial  and  investment company  industries. He  has  served as  Chairman and
Chief Executive  of  the American  Stock  Exchange,  Inc. and  Chairman  of  the
Financial Accounting Standards Advisory Council.
    
 
   
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL TCW/DW
FUNDS
    
 
   
    The  Independent Trustees and the Funds'  management believe that having the
same Independent Trustees for  each of the TCW/DW  Funds avoids the  duplication
of  effort that would arise from  having different groups of individuals serving
as Independent Trustees for each  of the Funds or  even of sub-groups of  Funds.
They  believe that having the same  individuals serve as Independent Trustees of
all the Funds tends to increase their knowledge and expertise regarding  matters
which affect the
    
 
                                       11
<PAGE>
   
Fund  complex generally  and enhances  their ability  to negotiate  on behalf of
each Fund with  the Fund's  service providers. This  arrangement also  precludes
the   possibility  of  separate  groups  of  Independent  Trustees  arriving  at
conflicting decisions  regarding  operations and  management  of the  Funds  and
avoids  the cost and confusion that would likely ensue. Finally, having the same
Independent Trustees serve on all Fund Boards enhances the ability of each  Fund
to  obtain, at modest  cost to each  separate Fund, the  services of Independent
Trustees, and a  Chairman of their  Committees, of the  caliber, experience  and
business  acumen of  the individuals  who serve  as Independent  Trustees of the
TCW/DW Funds.
    
 
   
COMPENSATION OF INDEPENDENT TRUSTEES
    
 
   
    The Fund pays each Independent  Trustee an annual fee  of $3,000 plus a  per
meeting  fee of $250 for meetings of the  Board of Trustees or committees of the
Board of Trustees attended  by the Trustee  (the Fund pays  the Chairman of  the
Audit  Committee an annual fee of $1,200  and pays the Chairman of the Committee
of the Independent  Trustees an additional  annual fee of  $2,400, in each  case
inclusive  of  the  Committee  meeting  fees).  The  Fund  also  reimburses such
Trustees for  travel  and  other  out-of-pocket expenses  incurred  by  them  in
connection  with attending such meetings. Trustees  and officers of the Fund who
are or  have been  employed  by the  Manager or  the  Adviser or  an  affiliated
company  of either  receive no  compensation or  expense reimbursement  from the
Fund. The  Trustees of  the TCW/DW  Funds  do not  have retirement  or  deferred
compensation plans.
    
 
   
    The  following  table  illustrates  the  compensation  paid  to  the  Fund's
Independent Trustees by the Fund for the fiscal year ended January 31, 1996.
    
 
   
                                FUND COMPENSATION
    
 
   
<TABLE>
<CAPTION>
                                                                                AGGREGATE
                                                                               COMPENSATION
                                                                                 FROM THE
NAME OF INDEPENDENT TRUSTEE                                                        FUND
- -----------------------------------------------------------------------------  ------------
<S>                                                                            <C>
John C. Argue................................................................  $    6,863
John R. Haire................................................................       7,563
Dr. Manuel H. Johnson........................................................       7,563
Paul Kolton..................................................................       8,613(1)
Michael E. Nugent............................................................       6,863
John L. Schroeder............................................................       5,630
</TABLE>
    
 
- ---------------
   
(1) Of Mr.  Kolton's  compensation from  the  Fund, $3,600  is  paid to  him  as
    Chairman  of  the  Committee of  the  Independent Trustees  ($2,400)  and as
    Chairman of the Audit Committee ($1,200).
    
 
   
    The  following  table  illustrates  the  compensation  paid  to  the  Fund's
Independent  Trustees for the calendar year ended December 31, 1995 for services
to the eleven TCW/DW Funds and, in  the case of Messrs. Haire, Johnson,  Kolton,
Nugent  and Schroeder, the seventy-nine Dean Witter Funds that were in operation
at December 31, 1995,  and, in the  case of Mr. Argue,  TCW Galileo Funds,  Inc.
With  respect to Messrs. Haire, Johnson,  Kolton, Nugent and Schroeder, the Dean
Witter Funds  are  included  solely  because of  a  limited  exchange  privilege
between  various  TCW/DW Funds  and five  Dean Witter  Money Market  Funds. With
respect to Mr.  Argue, TCW Galileo  Funds, Inc. is  included solely because  the
Fund's  Adviser,  TCW Funds  Management, Inc.,  also serves  as Adviser  to that
    
 
                                       12
<PAGE>
   
investment company. Mr. Schroeder was elected  as a Trustee of each TCW/DW  Fund
then in existence on April 20, 1995.
    
 
   
                       CASH COMPENSATION FROM FUND GROUPS
    
 
   
<TABLE>
<CAPTION>
                                                                                                        TOTAL CASH
                                                                                                       COMPENSATION
                                                                                                       FOR SERVICES
                                                                                      FOR SERVICE AS        TO
                                                  FOR SERVICE                          CHAIRMAN OF        79 DEAN
                                                  AS DIRECTOR                         COMMITTEES OF       WITTER
                               FOR SERVICE         OR TRUSTEE                          INDEPENDENT       FUNDS, 11
                                AS TRUSTEE       AND COMMITTEE      FOR SERVICE AS      DIRECTORS/     TCW/DW FUNDS
                              AND COMMITTEE        MEMBER OF         DIRECTOR OF       TRUSTEES AND       AND TCW
                                MEMBER OF        79 DEAN WITTER      TCW GALILEO          AUDIT           GALILEO
NAME OF INDEPENDENT TRUSTEE  11 TCW/DW FUNDS         FUNDS           FUNDS, INC.        COMMITTEES      FUNDS, INC.
- ---------------------------  ----------------   ----------------   ----------------   --------------   -------------
<S>                          <C>                <C>                <C>                <C>              <C>
John C. Argue..............      $ 68,038            --                $37,500            --             $105,538
John R. Haire..............        82,038           $ 98,450           --                $217,350(2)      397,838
Dr. Manuel H. Johnson......        82,038            136,450           --                 --              218,488
Paul Kolton................        54,788            136,450           --                  36,900(3)      228,138
Michael E. Nugent..........        75,038            124,200           --                 --              199,238
John L. Schroeder..........        46,964            136,450           --                 --              183,414
</TABLE>
    
 
- ---------------
   
(2) For the 79 Dean Witter Funds in operation at December 31, 1995.
    
 
   
(3) For the 11 TCW/DW Funds in operation at December 31, 1995.
    
 
   
    As  of the date  of this Statement of  Additional Information, the aggregate
number of  shares  of  beneficial interest  of  the  Fund owned  by  the  Fund's
officers  and Trustees as a  group was less than 1  percent of the Fund's shares
of beneficial interest outstanding.
    
 
INVESTMENT PRACTICES AND POLICIES
- --------------------------------------------------------------------------------
 
U.S. GOVERNMENT SECURITIES
 
    As discussed  in  the  Prospectus,  the Fund  may  invest  in,  among  other
securities,   securities  issued  by  the   U.S.  Government,  its  agencies  or
instrumentalities. Such securities include:
 
       (1)U.S. Treasury bills (maturities  of one year  or less), U.S.  Treasury
          notes  (maturities  of  one  to ten  years)  and  U.S.  Treasury bonds
    (generally maturities of greater  than ten years), all  of which are  direct
    obligations  of the U.S.  Government and, as  such, are backed  by the "full
    faith and credit" of the United States.
 
       (2)Securities issued  by  agencies  and  instrumentalities  of  the  U.S.
          Government  which  are backed  by  the full  faith  and credit  of the
    United  States.  Among  the  agencies  and  instrumentalities  issuing  such
    obligations  are the Federal Housing Administration, the Government National
    Mortgage  Association  ("GNMA"),  the   Department  of  Housing  and   Urban
    Development,  the Export-Import  Bank, the Farmers  Home Administration, the
    General Services Administration, the  Maritime Administration and the  Small
    Business  Administration.  The  maturities of  such  obligations  range from
    three months to 30 years.
 
       (3)Securities issued  by agencies  and  instrumentalities which  are  not
          backed  by the full faith  and credit of the  United States, but whose
    issuing agency  or instrumentality  has the  right to  borrow, to  meet  its
    obligations,  from an existing line of  credit with the U.S. Treasury. Among
    the  agencies  and  instrumentalities  issuing  such  obligations  are   the
    Tennessee  Valley  Authority,  the  Federal  National  Mortgage  Association
    ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC") and the  U.S.
    Postal Service.
 
       (4)Securities  issued  by agencies  and  instrumentalities which  are not
          backed by the full  faith and credit of  the United States, but  which
    are  backed by  the credit of  the issuing agency  or instrumentality. Among
    the agencies and instrumentalities issuing such obligations are the  Federal
    Farm Credit System and the Federal Home Loan Banks.
 
    Neither  the value nor the yield of the U.S. Government securities which may
be invested in by the  Fund are guaranteed by  the U.S. Government. Such  values
and yield will fluctuate with changes
 
                                       13
<PAGE>
in  prevailing  interest  rates  and  other  factors.  Generally,  as prevailing
interest rates rise,  the value of  any U.S. Government  securities held by  the
Fund  will  fall.  Such  securities with  longer  maturities  generally  tend to
produce higher yields and are subject to greater market fluctuation as a  result
of  changes in interest rates than  debt securities with shorter maturities. The
Fund is not limited as  to the maturities of  the U.S. Government securities  in
which it may invest.
 
MONEY MARKET SECURITIES
 
    As  stated in  the Prospectus, the  U.S. money market  instruments which the
Fund  may  purchase  include  U.S.  Government  securities,  bank   obligations,
Eurodollar  certificates of deposit, obligations  of savings institutions, fully
insured certificates  of  deposit  and commercial  paper.  Such  securities  are
limited to:
 
    U.S.  GOVERNMENT  SECURITIES.    Obligations  issued  or  guaranteed  as  to
principal and  interest  by the  United  States or  its  agencies (such  as  the
Export-Import  Bank  of the  United States,  Federal Housing  Administration and
Government National Mortgage Association) or its instrumentalities (such as  the
Federal Home Loan Bank), including Treasury bills, notes and bonds;
 
    BANK  OBLIGATIONS.    Obligations  (including  certificates  of  deposit and
bankers' acceptances) of banks subject to regulation by the U.S. Government  and
having  total assets  of $1  billion or  more, and  instruments secured  by such
obligations, not including  obligations of  foreign branches  of domestic  banks
except to the extent below;
 
    EURODOLLAR  CERTIFICATES  OF DEPOSIT.    Eurodollar certificates  of deposit
issued by foreign branches of domestic  banks having total assets of $1  billion
or  more (investments in  Eurodollar certificates may be  affected by changes in
currency rates  or  exchange control  regulations,  or changes  in  governmental
administration or economic or monetary policy in the United States and abroad);
 
    OBLIGATIONS  OF SAVINGS  INSTITUTIONS.   Certificates of  deposit of savings
banks and savings and  loan associations, having total  assets of $1 billion  or
more  (investments in  savings institutions  above $100,000  in principal amount
are not protected by Federal deposit insurance);
 
    FULLY INSURED CERTIFICATES  OF DEPOSIT.   Certificates of  deposit of  banks
and  savings institutions, having total  assets of less than  $1 billion, if the
principal amount of the obligation is insured by the Bank Insurance Fund or  the
Savings  Association  Insurance  Fund  (each of  which  is  administered  by the
Federal Deposit  Insurance Corporation),  limited to  $100,000 principal  amount
per  certificate  and to  15%  or less  of  the Fund's  net  assets in  all such
obligations and in all illiquid assets, in the aggregate; and
 
    COMMERCIAL PAPER.  Commercial paper rated  within the two highest grades  by
Standard  &  Poor's  Corporation  or  the  highest  grade  by  Moody's Investors
Service, Inc. or, if not rated, issued  by a company having an outstanding  debt
issue rated at least AAA by Standard & Poor's or Aaa by Moody's.
 
REPURCHASE AGREEMENTS
 
    When  cash may be available for  only a few days, it  may be invested by the
Fund in repurchase agreements  until such time as  it may otherwise be  invested
or  used for payments of obligations of the Fund. These agreements, which may be
viewed as  a  type  of  secured  lending by  the  Fund,  typically  involve  the
acquisition  by the Fund of debt securities from a selling financial institution
such as a  bank, savings and  loan association or  broker-dealer. The  agreement
provides  that  the  Fund  will  sell back  to  the  institution,  and  that the
institution  will  repurchase,  the  underlying  security  ("collateral")  at  a
specified  price and at a fixed time in  the future, usually not more than seven
days from  the  date  of  purchase.  The collateral  will  be  maintained  in  a
segregated  account and  will be  marked to market  daily to  determine that the
value of the collateral, as specified in the agreement, does not decrease  below
the  purchase price plus  accrued interest. If  such decrease occurs, additional
collateral will  be  requested and,  when  received,  added to  the  account  to
maintain full collateralization. The Fund will
 
                                       14
<PAGE>
accrue  interest from the institution  until the time when  the repurchase is to
occur. Although such date  is deemed by the  Fund to be the  maturity date of  a
repurchase  agreement,  the  maturities  of  securities  subject  to  repurchase
agreements are not subject to any limits and may exceed one year.
 
   
    While repurchase  agreements  involve  certain  risks  not  associated  with
direct  investments in debt securities, the  Fund follows procedures designed to
minimize such risks. These procedures include effecting repurchase  transactions
only  with large,  well-capitalized and  well-established financial institutions
whose financial condition will be  continually monitored by the Adviser  subject
to  procedures established by the Board of Trustees of the Fund. In addition, as
described  above,  the  value  of  the  collateral  underlying  the   repurchase
agreement  will be at least equal to the repurchase price, including any accrued
interest earned  on the  repurchase agreement.  In  the event  of a  default  or
bankruptcy  by a selling financial institution,  the Fund will seek to liquidate
such collateral. However, the exercising of  the Fund's right to liquidate  such
collateral  could  involve  certain costs  or  delays  and, to  the  extent that
proceeds from any sale upon a default of the obligation to repurchase were  less
than  the repurchase  price, the  Fund could  suffer a  loss. It  is the current
policy of the Fund  not to invest  in repurchase agreements  that do not  mature
within  seven  days if  any such  investment, together  with any  other illiquid
assets held by the  Fund, amounts to more  than 15% of its  net assets. For  the
fiscal  year ended  January 31,  1996, the  Fund did  not enter  into repurchase
agreements in an amount exceeding 5% of its net assets.
    
 
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 and 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.  The
securities  so  purchased  or sold  are  subject  to market  fluctuation  and no
interest or dividends  accrue to  the purchaser  prior to  the settlement  date.
While  the Fund will only purchase securities on a when-issued, delayed delivery
or forward commitment basis with the intention of acquiring the securities,  the
Fund  may  sell the  securities  before the  settlement  date, if  it  is deemed
advisable. At  the  time the  Fund  makes the  commitment  to purchase  or  sell
securities  on a when-issued, delayed delivery  or forward commitment basis, the
Fund will record the transaction and thereafter reflect the value, each day,  of
such  security  purchased  or,  if  a sale,  the  proceeds  to  be  received, in
determining its net asset value. At the time of delivery of the securities,  the
value  may be more or less  than the purchase or sale  price. The Fund will also
establish a segregated account with the  Fund's custodian bank in which it  will
continuously  maintain cash or  U.S. Government securities  or other liquid high
grade debt  portfolio  securities equal  in  value to  commitments  to  purchase
securities  on  a when-issued,  delayed  delivery or  forward  commitment basis;
subject to this  requirement, the  Fund may  purchase securities  on such  basis
without  limit. An increase in the percentage  of the Fund's assets committed to
the purchase  of securities  on  a when-issued  or  delayed delivery  basis  may
increase  the volatility  of the  Fund's net asset  value. The  Adviser does not
believe that the Fund's net asset value or income will be adversely affected  by
its  purchase of securities on such basis. For the fiscal year ended January 31,
1996, the  Fund  did  not  purchase securities  on  a  when-issued  and  delayed
delivery basis in an amount exceeding 5% of its net assets.
    
 
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.  The commitment  for the  purchase of  any such  security
will not be recognized in the portfolio of the Fund until the Adviser determines
that  issuance of the security  is probable. At such  time, the Fund will record
the transaction and, in determining its net asset value, will reflect the  value
of  the security daily. At such time,  the Fund will also establish a segregated
account with its custodian bank in  which it will continuously maintain cash  or
U.S.  Government securities or other liquid high grade debt portfolio securities
equal in value to recognized commitments for such securities. Settlement of  the
trade will occur within five
busi-
 
                                       15
<PAGE>
   
ness  days of the occurrence of the  subsequent event. Once a segregated account
has  been  established,  if  the  anticipated  event  does  not  occur  and  the
securities  are not  issued the Fund  will have lost  an investment opportunity.
The Fund may  purchase securities on  such basis without  limit. An increase  in
the  percentage of the Fund's assets committed  to the purchase of securities on
a "when, as and if  issued" basis may increase the  volatility of its net  asset
value.  The Adviser does not  believe that the net asset  value of the Fund will
be adversely affected by its purchase of securities on such basis. The Fund  may
also  sell securities  on a  "when, as  and if  issued" basis  provided that the
issuance of  the  security  will  result  automatically  from  the  exchange  or
conversion  of a security owned by the Fund  at the time of the sale. During the
fiscal year ended January 31, 1996, the Fund did not purchase any securities  on
a when, as and if issued basis.
    
 
OPTIONS AND FUTURES TRANSACTIONS
 
    As  discussed in  the Prospectus,  the Fund  may write  covered call options
against securities held  in its portfolio  and covered put  options on  eligible
portfolio  securities and purchase options of  the same series to effect closing
transactions, and may  hedge against potential  changes in the  market value  of
its  investments (or anticipated investments) by purchasing put and call options
on portfolio (or  eligible portfolio)  securities (and the  currencies in  which
they  are denominated) and engaging  in transactions involving futures contracts
and options on such contracts.
 
    Call and put options on U.S. Treasury  notes, bonds and bills are listed  on
several  securities exchanges  and are written  in over-the-counter transactions
("OTC Options"). Listed  options are  issued or  guaranteed by  the exchange  on
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  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  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 to  the OCC 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.
 
    OTC  OPTIONS.    Exchange-listed options  are  issued  by the  OCC  or other
clearing corporation or  exchange which  assures that all  transactions in  such
options  are properly executed. OTC options are purchased from or sold (written)
to dealers or financial institutions  which have entered into direct  agreements
with  the Fund.  With OTC options,  such variables as  expiration date, exercise
price and  premium will  be agreed  upon between  the Fund  and the  transacting
dealer,  without the  intermediation of a  third party  such as the  OCC. If the
transacting dealer fails to  make or take delivery  of the securities or  amount
of  foreign currency underlying an option it has written, in accordance with the
terms of that option,  the Fund would  lose the premium paid  for the option  as
well  as any anticipated benefit of the transaction. The Fund will engage in OTC
option transactions only  with member  banks of  the Federal  Reserve System  or
primary  dealers in U.S. Government securities  or with affiliates of such banks
or dealers which have capital of at  least $50 million or whose obligations  are
guaranteed by an entity having capital of at least $50 million.
 
    COVERED  CALL WRITING.  As  stated in the Prospectus,  the Fund is permitted
to write covered call  options on portfolio securities  and on the U.S.  Dollar,
without   limit,  in  order  to  aid  in  achieving  its  investment  objective.
Generally, a call  option is "covered"  if the Fund  owns, or has  the right  to
acquire,   without  additional  cash  consideration   (or  for  additional  cash
consideration held for the  Fund by its Custodian  in a segregated account)  the
underlying  security (currency) subject to the option except that in the case of
call options on U.S. Treasury Bills, the  Fund might own U.S. Treasury Bills  of
a  different series from those underlying the  call option, but with a principal
amount and value
 
                                       16
<PAGE>
corresponding to the exercise price  and a maturity date  no later than that  of
the  security (currency)  deliverable under  the call  option. A  call option is
also covered if the  Fund holds a  call on the same  security as the  underlying
security  (currency) of the written option, where the exercise price of the call
used for  coverage is  equal to  or less  than the  exercise price  of the  call
written  or greater than the  exercise price of the call  written if the mark to
market difference is maintained by the Fund in cash, U.S. Government  securities
or  other  liquid  high  grade  debt  obligations  which  the  Fund  holds  in a
segregated account maintained with its Custodian.
 
    The Fund  will receive  from the  purchaser, in  return for  a call  it  has
written,  a "premium"; i.e., the price of  the option. Receipt of these premiums
may better enable  the Fund to  earn a higher  level of current  income than  it
would  earn from holding the underlying securities (currencies) alone. Moreover,
the premium received  will offset a  portion of the  potential loss incurred  by
the  Fund if  the securities (currencies)  underlying the  option are ultimately
sold (exchanged) by the  Fund at a  loss. Furthermore, a  premium received on  a
call  written on a foreign currency will  ameliorate any potential loss of value
on the  portfolio security  due  to a  decline in  the  value of  the  currency.
However,  during the option period,  the covered call writer  has, in return for
the premium or  the option, given  up the opportunity  for capital  appreciation
above  the exercise price should the market price of the underlying security (or
the exchange rate of the currency in which it is denominated) increase, but  has
retained  the risk of loss  should the price of  the underlying security (or the
exchange rate of the currency in  which it is denominated) decline. The  premium
received  will fluctuate with varying economic  market conditions. If the market
value of  the  portfolio  securities  (or  the  currencies  in  which  they  are
denominated)  upon which call options have  been written increases, the Fund may
receive a lower total return from the portion of its portfolio upon which  calls
have been written than it would have had such calls not been written.
 
    As  regards  listed  options  and certain  OTC  options,  during  the option
period, the  Fund  may be  required,  at any  time,  to deliver  the  underlying
security  (currency) against payment of  the exercise price on  any calls it has
written (exercise of certain listed and  OTC options may be limited to  specific
expiration  dates). This  obligation is  terminated upon  the expiration  of the
option period  or  at  such earlier  time  when  the writer  effects  a  closing
purchase   transaction.  A  closing  purchase  transaction  is  accomplished  by
purchasing an  option of  the  same series  as  the option  previously  written.
However,  once the Fund has  been assigned an exercise  notice, the Fund will be
unable to effect a closing purchase transaction.
 
    Closing purchase transactions  are ordinarily effected  to realize a  profit
on  an outstanding  call option,  to prevent  an underlying  security (currency)
from being  called,  to  permit the  sale  of  an underlying  security  (or  the
exchange  of the  underlying currency)  or to enable  the Fund  to write another
call option  on  the underlying  security  (currency) with  either  a  different
exercise  price or expiration date  or both. The Fund may  realize a net gain or
loss from a closing  purchase transaction depending upon  whether the amount  of
the  premium  received on  the call  option is  more  or less  than the  cost of
effecting the  closing purchase  transaction.  Any loss  incurred in  a  closing
purchase   transaction  may  be   wholly  or  partially   offset  by  unrealized
appreciation  in  the  market  value  of  the  underlying  security  (currency).
Conversely,  a  gain  resulting from  a  closing purchase  transaction  could be
offset in whole or in part or exceeded  by a decline in the market value of  the
underlying security (currency).
 
    If  a  call option  expires unexercised,  the  Fund realizes  a gain  in the
amount of the  premium on  the option  less the  commission paid.  Such a  gain,
however,  may be offset  by depreciation in  the market value  of the underlying
security (currency) during the option period. If a call option is exercised, the
Fund realizes  a  gain  or  loss  from  the  sale  of  the  underlying  security
(currency)  equal to the difference between the purchase price of the underlying
security (currency) and  the proceeds  of the  sale of  the security  (currency)
plus the premium received on the option less the commission paid.
 
    Options  written by the  Fund will normally  have expiration dates  of up to
eighteen months from the date written. The  exercise price of a call option  may
be below, equal to or above the current
 
                                       17
<PAGE>
market  value of the underlying security at  the time the option is written. See
"Risks of Options and Futures Transactions," below.
 
    COVERED PUT WRITING.  As stated in the Prospectus, as a writer of a  covered
put  option, the Fund  incurs an obligation  to buy the  security underlying the
option from the  purchaser of the  put, at  the option's exercise  price at  any
time  during the option period, at  the purchaser's election (certain listed and
OTC put options written by  the Fund will be  exercisable by the purchaser  only
on  a specific date). A  put is "covered" if, at  all times, the Fund maintains,
in a segregated account maintained on its behalf at the Fund's Custodian,  cash,
U.S.  Government securities  or other high  grade liquid debt  obligations in an
amount equal to at least the exercise  price of the option, at all times  during
the  option period. Similarly, a short put position could be covered by the Fund
by its  purchase  of  a put  option  on  the same  security  (currency)  as  the
underlying  security  of the  written option,  where the  exercise price  of the
purchased option is equal to or more than the exercise price of the put  written
or  less than  the exercise  price of the  put written  if the  marked to market
difference is maintained  by the  Fund in  cash, U.S.  Government Securities  or
other  high grade liquid debt  obligations which the Fund  holds in a segregated
account maintained at its Custodian. In writing puts, the Fund assumes the  risk
of  loss should the  market value of the  underlying security (currency) decline
below the exercise price of the option (any loss being decreased by the  receipt
of  the premium on  the option written).  In the case  of listed options, during
the option period, the  Fund may be  required, at any time,  to make payment  of
the  exercise price against delivery of  the underlying security (currency). The
operation of  and limitations  on  covered put  options  in other  respects  are
substantially identical to those of call options.
 
    The  Fund will  write put  options for  three purposes:  (1) to  receive the
income derived  from the  premiums  paid by  purchasers;  (2) when  the  Adviser
wishes  to  purchase the  security (or  a security  denominated in  the currency
underlying the option) underlying the option  at a price lower than its  current
market  price, in which case it will write  the covered put at an exercise price
reflecting the lower  purchase price sought;  and (3)  to close out  a long  put
option  position. The potential gain  on a covered put  option is limited to the
premium received on the  option (less the commissions  paid on the  transaction)
while  the potential loss  equals the differences between  the exercise price of
the  option  and  the  current   market  price  of  the  underlying   securities
(currencies)  when the  put is exercised,  offset by the  premium received (less
the  commissions  paid  on  the   transaction).  The  aggregate  value  of   the
obligations  underlying  the puts,  determined as  of the  date the  options are
sold, will not exceed 50% of the Fund's net assets.
 
    PURCHASING CALL AND PUT OPTIONS.  As stated in the Prospectus, the Fund  may
purchase  listed and OTC call  and put options in amounts  equalling up to 5% of
its total assets. The Fund  may purchase a call option  in order to close out  a
covered  call position (see "Covered Call Writing" above), to protect against an
increase in price of a security it  anticipates purchasing or, in the case of  a
call  option on foreign currency, to hedge against an adverse exchange rate move
of the currency in which the  security it anticipates purchasing is  denominated
vis-a-vis  the currency in which the exercise price is denominated. The purchase
of the call option to effect a  closing transaction on a call written  over-the-
counter  may be a listed or an OTC option. In either case, the call purchased is
likely to be on the same securities (currencies) and have the same terms as  the
written  option. If  purchased over-the-counter,  the option  would generally be
acquired from  the dealer  or  financial institution  which purchased  the  call
written by the Fund.
 
    The  Fund may purchase put options on securities (currencies) which it holds
in its  portfolio to  protect  itself against  a decline  in  the value  of  the
security  and to  close out written  put option  positions. If the  value of the
underlying security (currency) were to fall below the exercise price of the  put
purchased  in an amount greater  than the premium paid  for the option, the Fund
would incur no  additional loss. In  addition, the  Fund may sell  a put  option
which  it  has  previously  purchased  prior  to  the  sale  of  the  securities
(currencies) underlying such option. Such a sale  would result in a net gain  or
loss  depending on whether the amount received on  the sale is more or less than
the premium and
 
                                       18
<PAGE>
other transaction costs paid on the put  option which is sold. And such gain  or
loss  could be offset in whole or in part by a change in the market value of the
underlying security (currency). If  a put option purchased  by the Fund  expired
without being sold or exercised, the premium would be lost.
 
    RISKS  OF OPTIONS TRANSACTIONS.  During  the option period, the covered call
writer has, in return for  the premium on the  option, given up the  opportunity
for  capital appreciation  above the exercise  price should the  market price of
the underlying security  (or the  value of its  denominated currency)  increase,
but  has retained the risk  of loss should the  price of the underlying security
(or the value of  its denominated currency) decline.  The writer has no  control
over  the time when it may be required  to fulfill its obligation as a writer of
the option. Once  an option writer  has received an  exercise notice, it  cannot
effect  a  closing purchase  transaction in  order  to terminate  its obligation
under the option and  must deliver or receive  the underlying securities at  the
exercise price.
 
    Prior  to exercise or expiration, an  option position can only be terminated
by entering  into a  closing purchase  or sale  transaction. If  a covered  call
option  writer is unable to effect a closing purchase transaction or to purchase
an offsetting  OTC option,  it cannot  sell the  underlying security  until  the
option  expires or the  option is exercised. Accordingly,  a covered call option
writer may not be able  to sell an underlying security  at a time when it  might
otherwise  be advantageous to do  so. A secured put  option writer who is unable
to effect  a closing  purchase  transaction or  to  purchase an  offsetting  OTC
option  would continue to  bear the risk of  decline in the  market price of the
underlying security until  the option expires  or is exercised.  In addition,  a
secured  put writer would be  unable to utilize the amount  held in cash or U.S.
Government or other liquid high grade short-term debt obligations securities  as
security  for the put option for other investment purposes until the exercise or
expiration of the option.
 
    As discussed  in  the  Prospectus,  the Fund's  ability  to  close  out  its
position  as a writer of  an option is dependent upon  the existence of a liquid
secondary market on Option Exchanges. There  is no assurance that such a  market
will  exist,  particularly in  the case  of  OTC options,  as such  options will
generally only be  closed out by  entering into a  closing purchase  transaction
with  the  purchasing dealer.  However,  the Fund  may  be able  to  purchase an
offsetting option  which  does  not close  out  its  position as  a  writer  but
constitutes  an asset of equal value to the obligation under the option written.
If the Fund is not able to  either enter into a closing purchase transaction  or
purchase  an offsetting position, it will be required to maintain the securities
subject to the call, or the collateral underlying the put, even though it  might
not  be advantageous to do  so, until a closing  transaction can be entered into
(or the option is exercised or expires).
 
    Among the possible reasons for the  absence of a liquid secondary market  on
an  Exchange are:  (i) insufficient  trading interest  in certain  options; (ii)
restrictions on  transactions  imposed  by an  Exchange;  (iii)  trading  halts,
suspensions  or other restrictions imposed with respect to particular classes or
series of  options or  underlying securities;  (iv) interruption  of the  normal
operations  on an Exchange; (v)  inadequacy of the facilities  of an Exchange or
the OCC to  handle current trading  volume; or (vi)  a decision by  one or  more
Exchanges  to  discontinue the  trading  of options  (or  a particular  class or
series of options), in which event the secondary market on that Exchange (or  in
that  class or  series of  options) would  cease to  exist, although outstanding
options on that Exchange that had been issued  by the OCC as a result of  trades
on  that Exchange would generally continue  to be exercisable in accordance with
their terms.
 
    In the event of the  bankruptcy of a broker  through which the Fund  engages
in  transactions in options,  the Fund could experience  delays and/or losses in
liquidating open positions purchased or sold  through the broker and/or incur  a
loss  of all or part  of its margin deposits with  the broker. Similarly, in the
event of the bankruptcy of  the writer of an OTC  option purchased by the  Fund,
the  Fund could experience  a loss of  all or part  of the value  of the option.
Transactions are  entered  into by  the  Fund  only with  brokers  or  financial
institutions deemed creditworthy by the Fund's management.
 
                                       19
<PAGE>
    Each  of  the Exchanges  has established  limitations governing  the maximum
number of options on the same  underlying security or futures contract  (whether
or  not covered) which may be written by a single investor, whether acting alone
or in concert  with others (regardless  of whether such  options are written  on
the  same or different Exchanges or are held  or written on one or more accounts
or through  one or  more brokers).  An  Exchange may  order the  liquidation  of
positions  found to  be in  violation of  these limits  and it  may impose other
sanctions or  restrictions. These  position limits  may restrict  the number  of
listed options which the Fund may write.
 
    The  hours of trading for options may  not conform to the hours during which
the underlying securities  are traded.  To the  extent that  the option  markets
close  before the markets  for the underlying  securities, significant price and
rate movements  can  take  place  in  the  underlying  markets  that  cannot  be
reflected in the option markets.
 
    The  extent to which the Fund  may enter into transactions involving options
may be limited by the Internal Revenue Code's requirements for qualification  as
a  regulated investment company and the Fund's intention to qualify as such (see
"Dividends, Distributions and Taxes").
 
    STOCK INDEX OPTIONS.   Options on  stock indexes are  similar to options  on
stock  except that, rather than the right to take or make delivery of stock at a
specified price,  an option  on a  stock index  gives the  holder the  right  to
receive,  upon exercise of the option, an amount of cash if the closing level of
the stock index upon which the option is  based is greater than, in the case  of
a  call, or less than, in  the case of a put,  the exercise price of the option.
This amount of cash  is equal to  such difference between  the closing price  of
the  index and  the exercise price  of the  option expressed in  dollars times a
specified multiple  (the  "multiplier").  The multiplier  for  an  index  option
performs  a  function similar  to the  unit of  trading for  a stock  option. It
determines the total dollar value per  contract of each point in the  difference
between  the exercise price of an option and the current level of the underlying
index. A multiplier of  100 means that a  one-point difference will yield  $100.
Options  on different indexes may have  different multipliers. The writer of the
option is obligated,  in return for  the premium received,  to make delivery  of
this  amount. Unlike stock  options, all settlements  are in cash  and a gain or
loss depends  on  price  movements  in  the stock  market  generally  (or  in  a
particular  segment of the market) rather than the price movements in individual
stocks. Currently, options  are traded  on the  S&P 100  Index and  the S&P  500
Index  on the  Chicago Board  Options Exchange, the  Major Market  Index and the
Computer Technology Index,  Oil Index  and Institutional Index  on the  American
Stock  Exchange and  the NYSE Index  and NYSE Beta  Index on the  New York Stock
Exchange, The Financial News Composite Index  on the Pacific Stock Exchange  and
the  Value  Line  Index,  National  O-T-C  Index  and  Utilities  Index  on  the
Philadelphia Stock  Exchange, each  of  which and  any  similar index  on  which
options  are traded in the  future which include stocks  that are not limited to
any particular industry or segment  of the market is  referred to as a  "broadly
based  stock market index." The Fund will  invest only in broadly based indexes.
Options  on  broad-based  stock  indexes  provide  the  Fund  with  a  means  of
protecting  the Fund  against the  risk of market  wide price  movements. If the
Adviser anticipates a market decline, the Fund could purchase a stock index  put
option.  If the expected market decline  materialized, the resulting decrease in
the value of the Fund's portfolio would be offset to the extent of the  increase
in  the value of the  put option. If the Adviser  anticipates a market rise, the
Fund may purchase a stock  index call option to  enable the Fund to  participate
in such rise until completion of anticipated common stock purchases by the Fund.
Purchases  and sales  of stock  index options  also enable  the Adviser  to more
speedily achieve changes in the Fund's equity positions.
 
    The Fund will write put options on stock indexes only if such positions  are
covered  by cash,  U.S. Government  securities or  other liquid  high grade debt
obligations equal to  the aggregate  exercise price  of the  puts, or  by a  put
option  on the  same stock index  with a strike  price no lower  than the strike
price of the put option sold by the Fund, which cover is held for the Fund in  a
segregated  account maintained for it by  the Fund's Custodian. All call options
on stock indexes written by  the Fund will be covered  either by a portfolio  of
stocks substantially replicating the movement of the
 
                                       20
<PAGE>
index  underlying the call  option or by  holding a separate  call option on the
same stock index  with a strike  price no higher  than the strike  price of  the
call option sold by the Fund.
 
    RISKS  OF OPTIONS ON INDEXES.  Because  exercises of stock index options are
settled in cash, call  writers such as  the Fund cannot  provide in advance  for
their  potential settlement obligations by  acquiring and holding the underlying
securities. A call writer can  offset some of the  risk of its writing  position
by  holding a  diversified portfolio  of stocks  similar to  those on  which the
underlying index  is  based. However,  most  investors cannot,  as  a  practical
matter,  acquire and hold a portfolio containing  exactly the same stocks as the
underlying index,  and,  as  a  result,  bear a  risk  that  the  value  of  the
securities  held will vary  from the value of  the index. Even  if an index call
writer could assemble a stock portfolio that exactly reproduced the  composition
of  the underlying  index, the writer  still would  not be fully  covered from a
risk standpoint because of the "timing risk" inherent in writing index  options.
When  an  index option  is  exercised, the  amount of  cash  that the  holder is
entitled to receive is determined by  the difference between the exercise  price
and  the closing index level  on the date when the  option is exercised. As with
other kinds of  options, the writer  will not  learn that it  has been  assigned
until  the next business day, at the earliest. The time lag between exercise and
notice of  assignment poses  no risk  for  the writer  of a  covered call  on  a
specific  underlying  security,  such  as  a  common  stock,  because  there the
writer's obligation is to deliver the underlying security, not to pay its  value
as  of  a fixed  time  in the  past.  So long  as  the writer  already  owns the
underlying security,  it  can  satisfy  its  settlement  obligations  by  simply
delivering  it, and the risk that its value may have declined since the exercise
date is borne by the  exercising holder. In contrast, even  if the writer of  an
index  call holds  stocks that exactly  match the composition  of the underlying
index, it will not be able  to satisfy its assignment obligations by  delivering
those  stocks  against  payment  of  the exercise  price.  Instead,  it  will be
required to  pay cash  in an  amount based  on the  closing index  value on  the
exercise  date; and by the  time it learns that it  has been assigned, the index
may have  declined, with  a corresponding  decrease in  the value  of its  stock
portfolio.  This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding stock positions.
 
    A holder of an index option who exercises it before the closing index  value
for  that day is available runs the risk  that the level of the underlying index
may subsequently change. If  such a change causes  the exercised option to  fall
out-of-the-money,  the exercising holder will be  required to pay the difference
between the closing index value and the exercise price of the option (times  the
applicable multiplier) to the assigned writer.
 
    If   dissemination  of  the   current  level  of   an  underlying  index  is
interrupted,  or  if  trading  is   interrupted  in  stocks  accounting  for   a
substantial  portion of the  value of an  index, the trading  of options on that
index will ordinarily  be halted.  If the trading  of options  on an  underlying
index  is halted, an  exchange may impose  restrictions prohibiting the exercise
of such options.
 
    FUTURES CONTRACTS.  As stated in  the Prospectus, the Fund may purchase  and
sell   interest   rate,  currency,   and   index  futures   contracts  ("futures
contracts"),  that  are  traded  on  commodity  exchanges,  on  such  underlying
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 securities  as may  exist or  come
into being ("index" futures).
 
    The  Fund  will purchase  or sell  interest rate  futures contracts  for the
purpose of hedging  some or all  of the  value of its  portfolio securities  (or
anticipated  portfolio securities) against changes in prevailing interest rates.
If the Adviser anticipates that interest rates may rise and, concomitantly,  the
price  of  certain  of its  portfolio  securities  fall, the  Fund  may  sell an
interest rate futures  contract. If  declining interest  rates are  anticipated,
the  Fund may purchase  an interest rate  futures contract to  protect against a
potential increase in  the price  of securities  the Fund  intends to  purchase.
Subsequently,  appropriate securities may be purchased by the Fund in an orderly
fashion; as securities are purchased,  corresponding futures positions would  be
terminated by offsetting sales of contracts.
 
                                       21
<PAGE>
    The  Fund will purchase or  sell index futures contracts  for the purpose of
hedging some  or all  of  its portfolio  (or anticipated  portfolio)  securities
against  changes in their prices. If the  Adviser anticipates that the prices of
securities held  by the  Fund  may fall,  the Fund  may  sell an  index  futures
contract.  Conversely, if  the Fund  wishes to  hedge against  anticipated price
rises in  those securities  which the  Fund intends  to purchase,  the Fund  may
purchase an index futures contract.
 
    In  addition to the  above, interest rate,  index futures will  be bought or
sold in order to close out a short or long position maintained by the Fund in  a
corresponding futures contract.
 
    Although  most interest rate  futures contracts call  for actual delivery or
acceptance of  securities,  the contracts  usually  are closed  out  before  the
settlement  date without  the making or  taking of delivery.  A futures contract
sale is  closed  out by  effecting  a futures  contract  purchase for  the  same
aggregate  amount  of the  specific  type of  security  (currency) and  the same
delivery date. If  the sale  price exceeds  the offsetting  purchase price,  the
seller  would be paid the difference and would realize a gain. If the offsetting
purchase price exceeds the sale price,  the seller would pay the difference  and
would  realize a loss. Similarly,  a futures contract purchase  is closed out by
effecting a futures contract sale for the same aggregate amount of the  specific
type  of security (currency) and the same  delivery date. If the offsetting sale
price exceeds the purchase  price, the purchaser would  realize a gain,  whereas
if  the purchase  price exceeds the  offsetting sale price,  the purchaser would
realize a loss. There is no assurance that  the Fund will be able to enter  into
a closing transaction.
 
    INTEREST  RATE FUTURES  CONTRACTS.   When the  Fund enters  into an interest
rate futures  contract, it  is initially  required to  deposit with  the  Fund's
Custodian,  in a  segregated account  in the name  of the  broker performing the
transaction, an "initial margin" of cash or U.S. Government securities or  other
high  grade  liquid  short-term obligations  equal  to approximately  2%  of the
contract amount. Initial  margin requirements are  established by the  Exchanges
on  which  futures  contracts trade  and  may,  from time  to  time,  change. In
addition, brokers may establish margin  deposit requirements in excess of  those
required by the Exchanges.
 
    Initial   margin  in  futures  transactions  is  different  from  margin  in
securities transactions in that  initial margin does  not involve the  borrowing
of  funds by  a brokers'  client but  is, rather,  a good  faith deposit  on the
futures contract which will be returned to the Fund upon the proper  termination
of  the futures contract.  The margin deposits  made are marked  to market daily
and the  Fund may  be required  to make  subsequent deposits  called  "variation
margin,"  with the Fund's futures contract clearing broker, which are reflective
of price fluctuations in the futures contract.
 
    INDEX FUTURES  CONTRACTS.   As discussed  in the  Prospectus, the  Fund  may
invest  in index  futures contracts. An  index futures contract  sale creates an
obligation by the Fund, as seller, to  deliver cash at a specified future  time.
An  index futures contract purchase  would create an obligation  by the Fund, as
purchaser, to  take  delivery  of  cash at  a  specified  future  time.  Futures
contracts  on indexes  do not require  the physical delivery  of securities, but
provide for  a final  cash  settlement on  the  expiration date  which  reflects
accumulated profits and losses credited or debited to each party's account.
 
    The  Fund  is  required to  maintain  margin deposits  with  brokerage firms
through which it  effects index futures  contracts in a  manner similar to  that
described  above  for  interest  rate futures  contracts.  In  addition,  due to
current industry  practice,  daily  variations  in  gains  and  losses  on  open
contracts  are required to be reflected in  cash in the form of variation margin
payments. The Fund  may be required  to make additional  margin payments  during
the term of the contract.
 
    At  any time prior to expiration of the futures contract, the Fund may elect
to close  the position  by taking  an opposite  position which  will operate  to
terminate  the Fund's position in the futures contract. A final determination of
variation margin is  then made, additional  cash is  required to be  paid by  or
released to the Fund and the Fund realizes a loss or gain.
 
    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
 
                                       22
<PAGE>
options  to  terminate an  existing position.  An option  on a  futures contract
gives the purchaser  the right  (in return  for the  premium paid)  to assume  a
position  in a futures contract (a  long position if the option  is a call and a
short position if the option is a put) at a specified exercise price at any time
during the term of the option. Upon exercise of the option, the delivery of  the
futures  position by  the writer of  the option to  the holder of  the option is
accompanied by  delivery of  the  accumulated balance  in the  writer's  futures
margin  account, which represents  the amount by  which the market  price of the
futures contract at the time of exercise exceeds, in case of a call, or is  less
than,  in the case  of a put,  the exercise price  of the option  on the futures
contract.
 
    The Fund will purchase and write options on futures contracts for  identical
purposes  to  those set  forth  above for  the  purchase of  a  futures contract
(purchase of a call option or  sale of a put option)  and the sale of a  futures
contract  (purchase of a put option or sale of a call option), or to close out a
long or  short position  in  futures contracts.  If,  for example,  the  Adviser
wished  to  protect against  an  increase in  interest  rates and  the resulting
negative impact on  the value  of a portion  of its  fixed-income portfolio,  it
might  write a call option on an  interest rate futures contract, the underlying
security of  which correlates  with the  portion of  the portfolio  the  Adviser
seeks  to hedge.  Any premiums  received in  the writing  of options  on futures
contracts may, of course, provide a further hedge against losses resulting  from
price declines in portions of the Fund's portfolio.
 
    LIMITATIONS  ON FUTURES CONTRACTS AND OPTIONS ON  FUTURES.  The Fund may not
enter  into  futures   contracts  or  purchase   related  options  thereon   if,
immediately  thereafter, the amount committed to margin plus the amount paid for
premiums for unexpired options on futures  contracts exceeds 5% of the value  of
the  Fund's  total  assets,  after  taking  into  account  unrealized  gains and
unrealized losses  on such  contracts it  has entered  into, provided,  however,
that  in the case of  an option that is in-the-money  (the exercise price of the
call (put)  option  is less  (more)  than the  market  price of  the  underlying
security)  at the time of  purchase, the in-the-money amount  may be excluded in
calculating the 5%. However,  there is no overall  limitation on the  percentage
of  the  Fund's assets  which  may be  subject to  a  hedge position.  Except as
described above,  there are  no other  limitations  on the  use of  futures  and
options thereon by the Fund.
 
    The  writer  of an  option  on a  futures  contract is  required  to deposit
initial  and  variation  margin  pursuant  to  requirements  similar  to   those
applicable  to  futures  contracts. Premiums  received  from the  writing  of an
option on a futures contract are included in initial margin deposits.
 
    RISKS OF TRANSACTIONS IN FUTURES CONTRACTS  AND RELATED OPTIONS.  As  stated
in  the Prospectus, the Fund may sell  a futures contract to protect against the
decline in  the  value  of  securities  (or  the  currency  in  which  they  are
denominated)  held by the Fund. However, it  is possible that the futures market
may advance and  the value  of securities  (or the  currency in  which they  are
denominated)  held in the portfolio  of the Fund may  decline. If this occurred,
the Fund would lose money on the futures contract and also experience a  decline
in  value of  its portfolio  securities. However, while  this could  occur for a
very brief  period  or  to a  very  small  degree,  over time  the  value  of  a
diversified  portfolio will tend  to move in  the same direction  as the futures
contracts.
 
    If the Fund purchases  a futures contract to  hedge against the increase  in
value  of  securities it  intends  to buy  (or the  currency  in which  they are
denominated), and the value of such securities (currencies) decreases, then  the
Fund  may determine not to invest in  the securities as planned and will realize
a loss on the futures  contract that is not offset  by a reduction in the  price
of the securities.
 
    If  the Fund  has sold a  call option on  a futures contract,  it will cover
this position by holding  in a segregated account  maintained at its  Custodian,
cash,  U.S. Government  Securities or other  liquid high  grade debt obligations
equal in value (when  added to any  initial or variation  margin on deposit)  to
the  market value of the securities (currencies) underlying the futures contract
or the exercise  price of the  option. Such a  position may also  be covered  by
owning  the  securities  (currencies)  underlying the  futures  contract,  or by
holding a call option  permitting the Fund  to purchase the  same contract at  a
price no higher than the price at which the short position was established.
 
                                       23
<PAGE>
    In  addition, if  the Fund holds  a long  position in a  futures contract it
will hold  cash, U.S.  Government securities  or other  liquid high  grade  debt
obligations  equal to  the purchase  price of the  contract (less  the amount of
initial or variation margin on deposit)  in a segregated account maintained  for
the  Fund  by  its  Custodian.  Alternatively, the  Fund  could  cover  its long
position by  purchasing  a put  option  on the  same  futures contract  with  an
exercise  price as  high or higher  than the price  of the contract  held by the
Fund.
 
    Exchanges limit the  amount by  which the price  of a  futures contract  may
move  on any day. If  the price moves equal the  daily limit on successive days,
then it may  prove impossible to  liquidate a futures  position until the  daily
limit  moves have  ceased. In  the event  of adverse  price movements,  the Fund
would continue to be  required to make daily  cash payments of variation  margin
on  open futures  positions. In  such situations,  if the  Fund has insufficient
cash, it may have  to sell portfolio securities  to meet daily variation  margin
requirements  at a time  when it may  be disadvantageous to  do so. In addition,
the Fund may be required to take or make delivery of the instruments  underlying
interest  rate futures contracts it  holds at a time  when it is disadvantageous
to do so. The inability  to close out options  and futures positions could  also
have an adverse impact on the Fund's ability to effectively hedge its portfolio.
 
    Futures  contracts  and  options  thereon which  are  purchased  or  sold on
foreign commodities exchanges may have greater price volatility than their  U.S.
counterparts.  Furthermore, foreign commodities exchanges  may be less regulated
and  under   less  governmental   scrutiny   than  U.S.   exchanges.   Brokerage
commissions, clearing costs and other transaction costs may be higher on foreign
exchanges.  Greater margin  requirements may limit  the Fund's  ability to enter
into certain commodity transactions on foreign exchanges. Moreover,  differences
in  clearance and delivery requirements on foreign exchanges may occasion delays
in the settlement of the Fund's transactions effected on foreign exchanges.
 
    In the event of the  bankruptcy of a broker  through which the Fund  engages
in  transactions in futures or options thereon, the Fund could experience delays
and/or losses  in  liquidating open  positions  purchased or  sold  through  the
broker  and/or incur  a loss  of all  or part  of its  margin deposits  with the
broker. Similarly in the event of the bankruptcy of the writer of an OTC  option
purchased  by the Fund, the Fund  could experience a loss of  all or part of the
value of  the  option. Transactions  are  entered into  by  the Fund  only  with
brokers or financial institutions deemed creditworthy by the Adviser.
 
    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 which may arise in employing futures contracts to protect  against
the  price volatility of portfolio securities  (and the currencies in which they
are denominated)  is  that the  prices  of  securities and  indexes  subject  to
futures  contracts  (and  thereby  the futures  contract  prices)  may correlate
imperfectly with  the  behavior of  the  cash  prices of  the  Fund's  portfolio
securities (and the currencies in which they are denominated). 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.
 
    As  stated  in  the Prospectus,  there  may exist  an  imperfect correlation
between the price movements of futures  contracts purchased by the Fund and  the
movements  in the prices of the securities (currencies) which are the subject of
the hedge.  If participants  in the  futures  market elect  to close  out  their
contracts  through  offsetting  transactions  rather  than  meet  margin deposit
requirements,  distortions  in   the  normal  relationship   between  the   debt
securities   or  currency  markets  and  futures  markets  could  result.  Price
distortions could also result if investors  in futures contracts opt to make  or
take   delivery  of  underlying   securities  rather  than   engage  in  closing
transactions due to the resultant
 
                                       24
<PAGE>
reduction in the liquidity of the futures  market. In addition, due to the  fact
that,  from the point  of view of  speculators, the deposit  requirements in the
futures markets are less  onerous than margin requirements  in the cash  market,
increased  participation  by  speculators  in  the  futures  market  could cause
temporary price distortions. Due to the possibility of price distortions in  the
futures  market and  because of the  imperfect correlation  between movements in
the prices of  securities and movements  in the prices  of futures contracts,  a
correct  forecast of interest rate  trends may still not  result in a successful
hedging transaction.
 
    As stated in the Prospectus, there  is no assurance that a liquid  secondary
market  will exist for futures  contracts and related options  in which the Fund
may invest. In the event a liquid market does not exist, it may not be  possible
to  close out a futures  position, and in the  event of adverse price movements,
the Fund would continue to be required to make daily cash payments of  variation
margin.  In addition, limitations  imposed by an  exchange or board  of trade on
which futures contracts are traded may  compel or prevent the Fund from  closing
out  a contract which may result in reduced  gain or increased loss to the Fund.
The absence of  a liquid market  in futures  contracts might cause  the Fund  to
make  or take delivery of the underlying  securities (currencies) at a time when
it may be disadvantageous to do so.
 
    The extent to which the Fund  may enter into transactions involving  futures
contracts  and options  thereon may  be limited  by the  Internal Revenue Code's
requirements for qualification as a regulated investment company and the  Fund's
intention to qualify as such (see "Dividends, Distributions and Taxes").
 
    Compared  to the purchase or sale of futures contracts, the purchase of call
or put options  on futures contracts  involves less potential  risk to the  Fund
because  the maximum amount  at risk is  the premium paid  for the options (plus
transaction costs). However, there may be  circumstances when the purchase of  a
call  or put option  on a futures  contract would result  in a loss  to the Fund
notwithstanding that  the purchase  or  sale of  a  futures contract  would  not
result  in a loss, as in  the instance where there is  no movement in the prices
of the futures contract or underlying securities.
 
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
notice  provisions described  below), and  are at all  times secured  by cash or
money market instruments, which are maintained in a segregated account  pursuant
to  applicable regulations  and that  are equal  to at  least the  market value,
determined daily, of the loaned securities. The advantage of such loans is  that
the  Fund continues to receive the income  on the loaned securities while at the
same time earning interest  on the cash amounts  deposited as collateral,  which
will  be  invested  in  short-term  obligations.  The  Fund  will  not  lend its
portfolio securities if such loans are not permitted by the laws or  regulations
of  any state in which its shares are  qualified for sale and will not lend more
than 25% of  the value  of its total  assets. A  loan may be  terminated by  the
borrower  on one  business day's notice,  or by  the Fund on  two business days'
notice. If the borrower fails to  deliver the loaned securities within two  days
after  receipt  of notice,  the Fund  could  use the  collateral to  replace the
securities while holding the borrower liable for any excess of replacement  cost
over  collateral. As with any extensions of  credit, there are risks of delay in
recovery and in  some cases even  loss of  rights in the  collateral should  the
borrower  of the securities fail financially.  However, these loans of portfolio
securities will only  be made to  firms deemed  by the Fund's  management to  be
creditworthy  and when the income which can  be earned from such loans justifies
the attendant risks. Upon termination of  the loan, the borrower is required  to
return  the securities to the Fund. Any gain  or loss in the market price during
the loan period would inure to the Fund. The creditworthiness of firms to  which
the  Fund lends its portfolio  securities will be monitored  on an ongoing basis
by the  Adviser pursuant  to  procedures adopted  and  reviewed, on  an  ongoing
basis, by the Board of Trustees of the Fund.
 
                                       25
<PAGE>
    When  voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the  policy of calling the loaned securities,  to
be  delivered within one day after notice, to permit the exercise of such rights
if the matters involved  would have a material  effect on the Fund's  investment
in   such   loaned  securities.   The   Fund  will   pay   reasonable  finder's,
administrative and custodial fees in connection with a loan of its securities.
 
PORTFOLIO TURNOVER
 
   
    It is anticipated  that the  Fund's portfolio turnover  rate generally  will
not  exceed 100%. A 100% turnover rate would  occur, for example, if 100% of the
securities  held  in  the  Fund's  portfolio  (excluding  all  securities  whose
maturities  at acquisition were one year or  less) were sold and replaced within
one year.
    
 
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
 
    In addition to  the investment  restrictions enumerated  in the  Prospectus,
the  investment  restrictions listed  below  have been  adopted  by the  Fund as
fundamental  policies,  except  as  otherwise   indicated.  Under  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.  Such  a
majority  is defined as the lesser of (a) 67% or more of the shares present at a
meeting of shareholders, if the holders of 50% of the outstanding shares of  the
Fund  are  present  or  represented  by  proxy  or  (b)  more  than  50%  of the
outstanding shares of the Fund.
 
    The Fund may not:
 
       1. Purchase or sell real estate  or interests therein (including  limited
          partnership  interests), although the Fund  may purchase securities of
    issuers which engage  in real  estate operations and  securities secured  by
    real estate or interests therein.
 
       2. Purchase   oil,  gas  or  other  mineral  leases,  rights  or  royalty
          contracts or  exploration or  development  programs, except  that  the
    Fund  may invest in the securities of companies which operate, invest in, or
    sponsor such programs.
 
       3. Borrow money,  except  that  the  Fund may  borrow  from  a  bank  for
          temporary  or emergency purposes in amounts not exceeding 5% (taken at
    the lower of cost or current value)  of its total assets (not including  the
    amount borrowed).
 
       4. Pledge  its  assets or  assign or  otherwise  encumber them  except to
          secure  borrowings  effected  within  the  limitations  set  forth  in
    restriction   (3).  For   the  purpose   of  this   restriction,  collateral
    arrangements with respect  to initial  or variation margin  for futures  are
    not deemed to be pledges of assets.
 
       5. Issue  senior securities as  defined in the Act  except insofar as the
          Fund may be deemed to have issued  a senior security by reason of  (a)
    entering  into any repurchase agreement; (b)  purchasing any securities on a
    when-issued or  delayed  delivery  basis;  (c)  purchasing  or  selling  any
    financial  futures  contracts or  options  thereon; (d)  borrowing  money in
    accordance with  restrictions  described  above; or  (e)  lending  portfolio
    securities.
 
       6. Make  loans of  money or  securities, except:  (a) by  the purchase of
          portfolio securities in which the Fund may invest consistent with  its
    investment   objective  and  policies;  (b)   by  investment  in  repurchase
    agreements; or (c) by lending its portfolio securities.
 
       7. Make short sales of securities.
 
       8. Purchase securities on  margin, except  for such  short-term loans  as
          are  necessary for the clearance  of portfolio securities. The deposit
    or payment by  the Fund of  initial or variation  margin in connection  with
    futures contracts is not considered the purchase of a security on margin.
 
                                       26
<PAGE>
       9. Purchase  or sell commodities or commodities contracts except that the
          Fund may purchase or sell futures contracts or options on futures.
 
       10.Engage in the underwriting of  securities, except insofar as the  Fund
          may  be  deemed an  underwriter under  the Securities  Act of  1933 in
    disposing of  a  portfolio security.  (The  Fund may  invest  in  restricted
    securities  subject  to  the non-fundamental  limitations  contained  in the
    Prospectus.)
 
       11.Invest for  the purpose  of exercising  control or  management of  any
          other issuer.
 
    In  addition, as  a nonfundamental  policy, the Fund  may not  (i) invest in
securities of  any issuer  if, to  the knowledge  of the  Fund, any  officer  or
trustee  of the Fund  or any officer or  director of the  Manager or the Adviser
owns more than 1/2 of 1% of the outstanding securities of such issuer, and  such
officers,  trustees  and  directors who  own  more than  1/2  of 1%  own  in the
aggregate more than 5%  of the outstanding securities  of such issuers; or  (ii)
purchase  securities of other investment companies,  except in connection with a
merger, consolidation, reorganization  or acquisition of  assets or by  purchase
in  the open  market of securities  of closed-end investment  companies where no
underwriter's or dealer's  commission or profit,  other than customary  broker's
commissions,  is involved and  only if immediately thereafter  not more than (a)
5% of the Fund's total assets, taken  at market value, would be invested in  any
one  such company,  (b) 10% of  the Fund's  total assets taken  at market value,
would be  invested in  such securities  and (c)  3% of  any one  such  company's
voting securities would be owned by the Fund.
 
    If  (except  with  respect to  Restriction  3) a  percentage  restriction is
adhered to  at  the  time  of  investment,  a  later  increase  or  decrease  in
percentage  resulting from a change in  values of portfolio securities or amount
of total  or net  assets  will not  be  considered a  violation  of any  of  the
foregoing restrictions.
 
PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------
 
   
    Subject  to  the  general  supervision  of  the  Trustees,  the  Adviser  is
responsible for  decisions  to  buy  and  sell  securities  for  the  Fund,  the
selection   of  brokers  and  dealers  to   effect  the  transactions,  and  the
negotiation of brokerage commissions, if any. Purchases and sales of  securities
on  a stock exchange  are effected through  brokers who charge  a commission for
their services. In the over-the-counter market, securities are generally  traded
on  a  "net" basis  with  dealers acting  as  principal for  their  own accounts
without a  stated  commission,  although  the  price  of  the  security  usually
includes  a profit to  the dealer. In  addition, securities may  be purchased at
times in  underwritten offerings  where the  price includes  a fixed  amount  of
compensation, generally referred to as the underwriter's concession or discount.
Futures  transactions will usually be effected through a broker and a commission
will be charged. On  occasion, the Fund may  also purchase certain money  market
instruments  directly from an issuer, in  which case no commissions or discounts
are paid.  During the  fiscal period  from March  31, 1993  through January  31,
1994,  and  the fiscal  years ended  January 31,  1995 and  1996, the  Fund paid
$14,447, $14,033 and $6,583, respectively, in brokerage commissions.
    
 
    The Adviser currently serves as investment  adviser to a number of  clients,
including  other investment companies,  and may in the  future act as investment
adviser to others. It is the practice of the Adviser to cause purchase and  sale
transactions  to be allocated among the Fund  and others whose assets it manages
in such manner as it deems equitable. In making such allocations among the  Fund
and  other  client  accounts, the  main  factors considered  are  the respective
investment objectives, the relative  size of portfolio holdings  of the same  or
comparable  securities, the  availability of  cash for  investment, the  size of
investment  commitments  generally  held  and   the  opinions  of  the   persons
responsible for managing the portfolios of the Fund and other client accounts.
 
    The  policy of the Fund regarding purchases  and sales of securities for its
portfolio is that  primary consideration  will be  given to  obtaining the  most
favorable  prices and efficient executions of transactions. Consistent with this
policy, when  securities transactions  are  effected on  a stock  exchange,  the
 
                                       27
<PAGE>
Fund's  policy is  to pay commissions  which are considered  fair and reasonable
without necessarily determining  that the lowest  possible commissions are  paid
in  all circumstances. The Fund  believes that a requirement  always to seek the
lowest possible commission cost could impede effective portfolio management  and
preclude  the Fund and  the Adviser from  obtaining a high  quality of brokerage
and research services. In seeking  to determine the reasonableness of  brokerage
commissions  paid in any transaction, the Adviser relies upon its experience and
knowledge regarding commissions generally charged by various brokers and on  its
judgment  in evaluating  the brokerage and  research services  received from the
broker  effecting   the  transaction.   Such  determinations   are   necessarily
subjective  and imprecise,  as in  most cases  an exact  dollar value  for those
services is not ascertainable.
 
   
    In  seeking  to   implement  the  Fund's   policies,  the  Adviser   effects
transactions  with those  brokers and dealers  who the  Adviser believes provide
the most favorable prices and are capable of providing efficient executions.  If
the  Adviser believes such  prices and executions are  obtainable from more than
one  broker  or  dealer,  it   may  give  consideration  to  placing   portfolio
transactions  with those brokers and dealers who also furnish research and other
services to the  Fund or the  Adviser. Such  services may include,  but are  not
limited  to,  any  one or  more  of  the following:  reports  on  industries and
companies, economic  analyses  and  review  of  business  conditions,  portfolio
strategy,  analytic  computer software,  account performance  services, computer
terminals and  various trading  and/or quotation  equipment. They  also  include
advice  from  broker-dealers  as to  the  value of  securities,  availability of
securities, availability of  buyers, and availability  of sellers. In  addition,
they  include recommendations as  to purchase and  sale of individual securities
and timing of such transactions.  The Fund will not  purchase at a higher  price
or  sell  at a  lower  price in  connection  with transactions  affected  with a
dealer, acting as principal,  who furnishes research services  to the Fund  than
would  be  the  case  if no  weight  were  given  by the  Fund  to  the dealer's
furnishing of such services. During the fiscal year ended January 31, 1996,  the
Fund  directed the payment  of $948 in brokerage  commissions in connection with
transactions in the aggregate amount of $788,404 to brokers because of  research
services provided.
    
 
   
    The  information  and  services received  by  the Adviser  from  brokers and
dealers may be of benefit to the  Adviser in the management of accounts of  some
of  its other clients and may not in  all cases benefit the Fund directly. While
the receipt of such  information and services is  useful in varying degrees  and
would  generally reduce the  amount of research  or services otherwise performed
by the Adviser and  thereby reduce its expenses,  it is of indeterminable  value
and  the advisory fee paid to the Adviser  is not reduced by any amount that may
be attributable to  the value  of such services.  During the  fiscal year  ended
January  31,  1996, the  Fund purchased  convertible  preferred stock  issued by
Merrill Lynch & Co., Inc. which issuer was among the top ten brokers or the  ten
dealers  which executed transactions for or with  the Fund in the largest dollar
amounts during  the  year.  At  January 31,  1996,  the  Fund  held  convertible
preferred stock of Merrill Lynch & Co., Inc. with a market value of $365,025.
    
 
   
    Consistent  with  the  policy  described  above,  brokerage  transactions in
securities listed on exchanges  or admitted to  unlisted trading privileges  may
be  effected through DWR. In order for  DWR to effect any portfolio transactions
for the Fund, the commissions, fees  or other remuneration received by DWR  must
be  reasonable and fair compared to  the commissions, fees or other remuneration
paid to  other  brokers in  connection  with comparable  transactions  involving
similar  securities being purchased  or sold on an  exchange during a comparable
period of  time. This  standard would  allow DWR  to receive  no more  than  the
remuneration  which would be  expected to be received  by an unaffiliated broker
in a commensurate arm's-length transaction.  Furthermore, the Board of  Trustees
of  the Fund,  including a  majority of  the Trustees  who are  not "interested"
persons of the Fund, as  defined in the Act,  have adopted procedures which  are
reasonably  designed to provide that any commissions, fees or other remuneration
paid to  DWR are  consistent  with the  foregoing  standard. During  the  fiscal
period  from March 31, 1993 through January  31, 1994 and the fiscal years ended
January 31, 1995 and 1996, the Fund paid no brokerage commissions to DWR.
    
 
                                       28
<PAGE>
THE DISTRIBUTOR
- --------------------------------------------------------------------------------
 
   
    As discussed in the Prospectus, shares  of the Fund are distributed by  Dean
Witter  Distributors Inc. (the "Distributor").  The Distributor has entered into
a selected dealer agreement with DWR,  which through its own sales  organization
sells  shares of the Fund, and  may enter into selected broker-dealer agreements
with  others.  The  Distributor,  a  Delaware  corporation,  is  a  wholly-owned
subsidiary  of DWDC. As  part of an  internal reorganization that  took place in
January,  1993,   the  Distributor   assumed   the  investment   company   share
distribution  activities previously performed by DWR.  The Trustees of the Fund,
including a majority of the Independent Trustees, approved, at their meeting  on
January  21, 1993, a Distribution Agreement appointing the Distributor exclusive
distributor of  the Fund's  shares and  providing for  the Distributor  to  bear
distribution  expenses not borne by the Fund. The present Distribution Agreement
is substantively  identical to  a prior  distribution agreement  also  initially
approved  by the Trustees  on January 21, 1993.  The Distribution Agreement took
effect on June  30, 1993  upon the  spin-off by Sears,  Roebuck and  Co. of  its
remaining  shares  of DWDC.  By  its terms,  the  Distribution Agreement  had an
initial term ending April 30, 1994, and  provides that it will remain in  effect
from  year to year thereafter if approved by the Board. At their meeting held on
April 20, 1995, the Trustees, including a majority of the Independent  Trustees,
approved  the most recent continuance of  the Distribution Agreement until April
30, 1996.
    
 
    The Distributor bears all expenses it may incur in providing services  under
the  Distribution Agreement.  Such expenses  include the  payment of commissions
for  sales  of  the  Fund's   shares  and  incentive  compensation  to   account
executives.  The Distributor also  pays certain expenses  in connection with the
distribution of the Fund's  shares, including the  costs of preparing,  printing
and  distributing  advertising  or  promotional  materials,  and  the  costs  of
printing  and  distributing  prospectuses   and  supplements  thereto  used   in
connection  with the offering and sale of  the Fund's shares. The Fund bears the
costs of  initial typesetting,  printing and  distribution of  prospectuses  and
supplements   thereto  to  shareholders.  The  Fund  also  bears  the  costs  of
registering the Fund  and its shares  under federal and  state securities  laws.
The  Fund and  Distributor have agreed  to indemnify each  other against certain
liabilities,  including  liabilities  under  the  Securities  Act  of  1933,  as
amended.  Under  the  Distribution  Agreement,  the  Distributor  uses  its best
efforts in  rendering  services to  the  Fund, but  in  the absence  of  willful
misfeasance,   bad  faith,  gross  negligence   or  reckless  disregard  of  its
obligations,  the  Distributor  is  not  liable  to  the  Fund  or  any  of  its
shareholders  for any  error of  judgment or mistake  of law  or for  any act or
omission or for any losses sustained by the Fund or its shareholders.
 
PLAN OF DISTRIBUTION
 
    As discussed  in  the  Prospectus, the  Fund  has  entered into  a  Plan  of
Distribution  pursuant to Rule 12b-1 under  the Act with the Distributor whereby
the expenses  of  certain activities  in  connection with  the  distribution  of
shares  of  the Fund  are reimbursed.  The  Plan was  initially approved  by the
Trustees of the Fund on  January 21, 1993 and by  InterCapital as the then  sole
shareholder  of the Fund on January 22,  1993. The vote of the Trustees included
a majority of the Trustees who are not  and were not at the time of their  votes
interested  persons of the Fund and who have  and had at the time of their votes
no direct  or indirect  financial interest  in the  operation of  the Plan  (the
"Independent  12b-1  Trustees"), cast  in  person at  a  meeting called  for the
purpose of  voting  on  such Plan.  In  determining  to approve  the  Plan,  the
Trustees,  including the  Independent 12b-1  Trustees, concluded  that, in their
judgment, there is a reasonable likelihood  that the Plan will benefit the  Fund
and its shareholders.
 
    The  Plan  provides  that  the  Distributor will  bear  the  expense  of all
promotional and distribution related  activities on behalf  of the Fund,  except
for  expenses that the Trustees determine  to reimburse, as described below. The
following activities and services may be  provided by the Distributor, DWR,  its
affiliates  and any selected  broker-dealer under the  Plan: (1) compensation to
and expenses of account  executives and other employees  of DWR, its  affiliates
and  other selected  broker-dealers, including overhead  and telephone expenses;
(2) sales incentives and bonuses to sales representatives,
 
                                       29
<PAGE>
and  to marketing  personnel in  connection with  promoting sales  of the Fund's
shares; (3) expenses incurred in connection  with promoting sales of the  Fund's
shares;  (4)  preparing and  distributing  sales literature;  and  (5) providing
advertising and promotional activities,  including direct mail solicitation  and
television, radio, newspaper, magazine and other media advertisements.
 
    The  Fund is  authorized to  reimburse specific  expenses incurred  or to be
incurred in promoting  the distribution of  the Fund's shares  and in  servicing
shareholder  accounts. Reimbursement is made through monthly payments in amounts
determined in  advance of  each  fiscal quarter  by  the Trustees,  including  a
majority  of the Independent 12b-1 Trustees.  The amount of each monthly payment
may in no event exceed an amount equal  to a payment at the annual rate of  0.75
of  1% of the Fund's  average daily net assets during  the month. No interest or
other financing charges, if any, incurred  on any distribution expenses will  be
reimbursable  under the Plan. In making  quarterly determinations of the amounts
that may be expended by the Fund, the Distributor will provide and the  Trustees
will review a quarterly budget of projected distribution expenses to be incurred
on  behalf  of the  Fund, together  with  a report  explaining the  purposes and
anticipated benefits of  incurring such  expenses. The  Trustees will  determine
which  particular expenses, and the  portions thereof, that may  be borne by the
Fund, and  in  making such  a  determination shall  consider  the scope  of  the
Distributor's commitment to promoting the distribution of the Fund's shares.
 
    The  Distributor has informed the Fund that a portion of the fees payable by
the Fund each year  pursuant to the  Plan equal to 0.25%  of the Fund's  average
daily  net assets is  characterized as a  "service fee" under  the Rules of Fair
Practice of  the  National  Association  of Securities  Dealers  (of  which  the
Distributor is a member). Such portion of the fee is a payment made for personal
service and/or the maintenance of shareholder accounts. The remaining portion of
the  plan fees  payable by  the Fund is  characterized as  an "asset-based sales
charge" as defined by the aforementioned Rules of Fair Practice.
 
    DWR's  account  executives  are  credited  with  an  annual  gross  residual
commission,  currently a gross residual  of up to 0.75%  of the current value of
the respective accounts for which they are the account executives or dealers  of
record.  The "gross  residual" is a  charge which  reflects residual commissions
paid by DWR to  its account executives  and expenses of  DWR and its  affiliates
associated  with the servicing of shareholders' accounts, including the expenses
of operating branch offices  in connection with  the servicing of  shareholders'
accounts, which expenses include lease costs, the salaries and employee benefits
of  operations and sales support  personnel, utility costs, communications costs
and the costs of stationery and  supplies and other expenses relating to  branch
office  servicing of shareholder accounts. The portion of an account executive's
annual  gross  residual  commission  allocated  to  servicing  of  shareholders'
accounts  does not exceed 0.25% of the  average annual net asset value of shares
of accounts for which he or she is account executive of record.
 
    Under the Plan, the Distributor uses its best efforts in rendering  services
to  the  Fund, but  in  the absence  of  willful misfeasance,  bad  faith, gross
negligence or  reckless disregard  of its  obligations, the  Distributor is  not
liable  to the  Fund or  any of its  shareholders for  any error  of judgment or
mistake of law or  for any act or  omission or for any  losses sustained by  the
Fund or its shareholders.
 
   
    The  Fund accrued $412,192 to the Distributor, pursuant to the Plan, for the
fiscal year ended  January 31, 1996.  This amount represents  an annual rate  of
0.75 of 1% of the Fund's average daily net assets for the period. Based upon the
total amounts spent by the Distributor during the period, it is estimated by the
Distributor that the amount paid by the Fund to the Distributor for distribution
was  spent in  approximately the following  ways: (i) advertising  -- $-0-; (ii)
printing and mailing prospectuses  to other than  current shareholders --  $-0-;
(iii)  compensation to  underwriters --  $-0-; (iv)  compensation to  dealers --
$-0-; (v)  compensation  to sales  personnel  --  $-0-; and  (vi)  other,  which
includes  payments  to DWR  for expenses  substantially all  of which  relate to
compensation  of   sales  personnel   (including  compensation   for   servicing
shareholder accounts and associated overhead expenses) -- $412,192.
    
 
   
    The  Plan remained in effect until April  30, 1993, and under its terms will
continue from year  to year  thereafter, provided such  continuance is  approved
annually  by a  vote of  the Trustees, including  a majority  of the Independent
12b-1 Trustees. At their meeting held April 20, 1995, the Trustees, including  a
majority of the Independent 12b-1 Trustees, approved the most recent continuance
of  the Plan  until April  30, 1996.  Any amendment  to increase  materially the
maximum   amount   authorized   to   be   spent   under   the   Plan   must   be
    
 
                                       30
<PAGE>
approved  by the shareholders  of the Fund,  and all material  amendments to the
Plan must be approved by  the Trustees in the  manner described above. The  Plan
may  be terminated  at any time,  without payment of  any penalty, by  vote of a
majority of the Independent Trustees or by  a vote of the holders of a  majority
of  the outstanding voting securities of the Fund (as defined in the Act) on not
more than 30 days written notice to any other party to the Plan. So long as  the
Plan  is in effect, the  selection or nomination of  the Independent Trustees is
committed to the discretion of the Independent Trustees.
 
    Under the  Plan,  the Distributor  provides  the  Fund, for  review  by  the
Trustees,  and  the Trustees  review, promptly  after the  end of  each calendar
quarter, a written  report regarding the  distribution expenses incurred  during
such  calendar quarter, which report includes (1) an itemization of the types of
expenses and the purposes therefor; (2) the amounts of such expenses; and (3)  a
description  of the  benefits derived  by the  Fund. In  the Trustees' quarterly
review of the Plan they consider its continued appropriateness and the level  of
compensation provided therein.
 
    No  interested person of the Fund nor any  Trustee of the Fund who is not an
interested person of the Fund, as defined in the Act, has any direct or indirect
financial interest in the operation of the  Plan except to the extent that  DWR,
InterCapital  the Distributor or the Manager, or certain of their employees, may
be deemed to  have such an  interest as a  result of benefits  derived from  the
successful  operation of the Plan  or as a result of  receiving a portion of the
amounts expended thereunder by the Fund.
 
DETERMINATION OF NET ASSET VALUE
 
    As stated  in  the Prospectus,  short-term  debt securities  with  remaining
maturities  of 60 days or  less at the time of  purchase are valued at amortized
cost, unless the Trustees determine such does not reflect the securities' market
value, in which  case these securities  will be  valued at their  fair value  as
determined by the Trustees. Other short-term debt securities will be valued on a
mark-to-market  basis until such time  as they reach a  remaining maturity of 60
days, whereupon they will be valued at  amortized cost using their value on  the
61st  day unless  the Trustees determine  such does not  reflect the securities'
market value, in which case these securities will be valued at their fair  value
as  determined by the Trustees. Listed options  on debt securities are valued at
the latest sale price on the exchange  on which they are listed unless no  sales
of  such options have taken place that day, in which case they will be valued at
the mean between  their latest bid  and asked prices.  Unlisted options on  debt
securities  and all options on equity securities  are valued at the mean between
their latest bid and asked prices. Futures  are valued at the latest sale  price
on  the commodities exchange  on which they trade  unless the Trustees determine
that such price does not reflect their market value, in which case they will  be
valued  at their fair value as determined  by the Trustees. All other securities
and other assets  are valued at  their fair  value as determined  in good  faith
under procedures established by and under the supervision of the Trustees.
 
   
    The  net asset value per share of the  Fund is determined once daily at 4:00
p.m., New York time (or, on days  when the New York Stock Exchange closes  prior
to  4:00  p.m., at  such earlier  time), on  each  day that  the New  York Stock
Exchange is open by taking the value of all assets of the Fund, subtracting  its
liabilities,  dividing by the number of  shares outstanding and adjusting to the
nearest cent.  The New  York  Stock Exchange  currently observes  the  following
holidays:   New  Year's  Day,  Presidents'   Day,  Good  Friday,  Memorial  Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
    
 
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
 
    SHAREHOLDER INVESTMENT ACCOUNT.   Upon  purchase of  shares of  the Fund,  a
Shareholder  Investment Account is opened  for the investor on  the books of the
Fund, maintained by Dean  Witter Trust Company (the  "Transfer Agent"), in  full
and  fractional shares of  the Fund (rounded  to the nearest  1/100 of a share).
This is an open account  in which shares owned by  the investor are credited  by
the  Transfer  Agent in  lieu of  issuance of  a share  certificate. If  a share
certificate is desired, it  must be requested in  writing for each  transaction.
Certificates  are issued  only for  full shares  and may  be redeposited  in the
account at  any time.  There is  no charge  to the  investor for  issuance of  a
certificate.  No  certificates  will  be  issued  for  fractional  shares  or to
shareholders who have  elected the  Systematic Withdrawal  Plan for  withdrawing
cash from their accounts. Whenever a shareholder-
 
                                       31
<PAGE>
instituted  transaction takes place  in the Shareholder  Investment Account, the
shareholder will be mailed  a confirmation of the  transaction from the Fund  or
from DWR or another selected broker-dealer.
 
    AUTOMATIC  INVESTMENT  OF DIVIDENDS  AND DISTRIBUTIONS.   All  dividends and
capital gains distributions are automatically paid in full and fractional shares
of the Fund, unless  the shareholder requests  that they be  paid in cash.  Each
purchase  of shares  of the Fund  is made  upon the condition  that the Transfer
Agent is thereby automatically appointed as agent of the investor to receive all
dividends and capital gains distributions on shares owned by the investor.  Such
dividends  and distributions will be  paid in shares of the  Fund (or in cash if
the shareholder so requests) at the net asset value per share as of the close of
business on the record date.  At any time an  investor may request the  Transfer
Agent in writing to have subsequent dividends and/or capital gains distributions
paid  in  cash rather  than shares.  To  assume sufficient  time to  process the
change, such request should be received by the Transfer Agent at least five  (5)
business days prior to the record date for which it commences to take effect. In
case  of recently purchased shares for  which registration instructions have not
been received on the record date, cash  payments will be made to DWR or  another
selected  broker-dealer, and will be forwarded  to the shareholder, upon receipt
of proper instructions.
 
    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 Transfer Agent  for investment in shares  of
the Fund. Shares purchased through Easyinvest will be added to the shareholder's
existing  account at the  net asset value  calculated the same  business day the
transfer of  funds is  effected.  For further  information  or to  subscribe  to
Easyinvest,   shareholders   should  contact   their   DWR  or   other  selected
broker-dealer account executive or the Transfer Agent.
 
    INVESTMENT  OF  DISTRIBUTIONS  RECEIVED  IN  CASH.    As  discussed  in  the
Prospectus,  any shareholder who receives a cash payment representing a dividend
or capital gains distribution  may invest such dividend  or distribution at  net
asset value (without sales charge) by returning the check or the proceeds to the
Transfer Agent within 30 days after the payment date. If the shareholder returns
the  proceeds of a dividend or distribution, such funds must be accompanied by a
signed  statement  indicating  that  the  proceeds  constitute  a  dividend   or
distribution to be invested. Such investment will be made at the net asset value
per  share next  determined after receipt  of the  check or the  proceeds by the
Transfer Agent.
 
    DIRECT INVESTMENTS THROUGH TRANSFER AGENT.  As discussed in the  Prospectus,
a  shareholder may  make additional  investments in Fund  shares at  any time by
sending a check in any amount, not less than $100, payable to TCW/DW Income  and
Growth Fund, directly to the Transfer Agent. Such amounts will be applied to the
purchase  of Fund shares  at the net  asset value per  share next computed after
receipt of the check of  purchase payment by the  Transfer Agent. The shares  so
purchased will be credited to the investor's account.
 
    TARGETED DIVIDENDS-SM-.  In states where it is legally permissible to do so,
shareholders  may also have all income dividends and capital gains distributions
automatically invested in shares of a  TCW/DW Fund other than TCW/DW Income  and
Growth  Fund.  Such investment  will be  made as  described above  for automatic
investment in  shares of  the Fund,  at the  net asset  value per  share of  the
selected  TCW/DW Fund  as of the  close of business  of the payment  date of the
dividend or  distribution, and  will begin  to earn  dividends, if  any, in  the
selected  TCW/DW Fund on the  next business day. To  participate in the Targeted
Dividends program,  shareholders  should contact  their  DWR or  other  selected
broker-dealer  account executive or the Transfer Agent. Shareholders of the Fund
must be shareholders  of the TCW/DW  Fund targeted to  receive investments  from
dividends  at  the time  they enter  the  Targeted Dividends  program. Investors
should review the  prospectus of the  targeted TCW/DW Fund  before entering  the
program.
 
    SYSTEMATIC  WITHDRAWAL PLAN.   As discussed in  the Prospectus, a systematic
withdrawal plan is available for shareholders who own or purchase shares of  the
Fund  having a minimum  value of $10,000  based upon the  then current net asset
value. The plan provides  for monthly or quarterly  (March, June, September  and
December)  checks  in any  dollar amount,  not less  than $25,  or in  any whole
percentage of the account  balance, on an annualized  basis. The shares will  be
redeemed  at their net  asset value determined, at  the shareholder's option, on
the tenth or twenty-fifth day (or  next following business day) of the  relevant
month or quarter and normally
 
                                       32
<PAGE>
a  check  for the  proceeds will  be mailed  by the  Transfer Agent,  or amounts
credited to  a  shareholder's  DWR or  other  selected  broker-dealer  brokerage
account, within five business days after the date of redemption.
 
    Dividends   and  capital  gains  distributions  on  shares  held  under  the
Systematic Withdrawal Plan will  be invested in  additional full and  fractional
shares  at net asset value (without a  sales charge). Shares will be credited to
an open account for  the investor by the  Transfer Agent; no share  certificates
will  be issued. A shareholder  is entitled to a  share certificate upon written
request to  the  Transfer  Agent,  although  in  that  event  the  shareholder's
Systematic Withdrawal Plan will be terminated.
 
    Withdrawal  Plan payments should  not be considered  as dividends, yields or
income. If periodic withdrawal plan payments continuously exceed net  investment
income  and net  capital gains,  the shareholder's  original investment  will be
correspondingly reduced and ultimately exhausted.
 
    Each withdrawal constitutes  a redemption  of shares  and any  gain or  loss
realized must be recognized for federal income tax purposes.
 
    The  Transfer Agent acts  as agent for  the shareholder in  tendering to the
Fund for redemption sufficient full and fractional shares to provide the  amount
of  the periodic  withdrawal payment designated  in the  application. The shares
will be  redeemed at  their net  asset value  determined, at  the  shareholder's
option, on the tenth or twenty-fifth day (or next following business day) of the
relevant  month or quarter and normally a  check for the proceeds will be mailed
by the Transfer Agent  within five business days  after the date of  redemption.
The Withdrawal Plan may be terminated at any time by the Fund.
 
    A  shareholder,  may,  at  any  time,  change  the  amount  and  interval of
withdrawal payments  and the  address  to which  checks  are mailed  by  written
notification  to  the  Transfer  Agent.  The  shareholder's  signature  on  such
notification must  be guaranteed  by  an eligible  guarantor acceptable  to  the
Transfer   Agent  (shareholders  should   contact  the  Transfer   Agent  for  a
determination as  to  whether  a  particular institution  is  such  an  eligible
guarantor). The shareholder may also terminate the Systematic Withdrawal Plan at
any  time  by  written  notice to  the  Transfer  Agent. In  the  event  of such
termination, the account will be continued as a Shareholder Investment  Account.
The shareholder may also redeem all or part of the shares held in the Systematic
Withdrawal Plan account (see "Repurchases and Redemptions" in the Prospectus) at
any time.
 
EXCHANGE PRIVILEGE
 
   
    As  discussed in the  Prospectus under the  caption "Exchange Privilege," an
Exchange Privilege exists  whereby investors  who have purchased  shares of  any
TCW/DW  Fund sold with a contingent deferred sales charge ("CDSC Funds") will be
permitted, after the shares of the fund acquired by purchase (not by exchange or
dividend reinvestment) have been held for thirty days, to redeem all or part  of
their  shares in that fund, have the proceeds invested in shares of the Fund, in
shares of  TCW/DW North  American Government  Income Trust  and TCW/DW  Balanced
Fund,  and in shares of five money market funds for which InterCapital serves as
investment manager: Dean  Witter Liquid  Asset Fund Inc.,  Dean Witter  Tax-Free
Daily  Income Trust,  Dean Witter California  Tax-Free Daily  Income Trust, Dean
Witter New York  Municipal Money  Market Trust  or Dean  Witter U.S.  Government
Money  Market  Trust (these  eight funds,  including  the Fund,  are hereinafter
collectively referred to as  "Exchange Funds"). There is  no waiting period  for
exchanges  of shares  acquired by exchange  or dividend  reinvestment. Shares of
Exchange Funds received in an exchange for shares of a CDSC Fund (regardless  of
the  type of fund originally purchased) may be redeemed and exchanged for shares
of other Exchange  Funds or  CDSC Funds. Ultimately,  any applicable  contingent
deferred  sales charge ("CDSC") will  have to be paid  upon redemption of shares
originally purchased from a CDSC 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.
    
 
    Any new account  established through  the Exchange Privilege  will have  the
same registration and cash dividend or dividend reinvestment plan as the present
account,  unless  the  Transfer  Agent  receives  written  notification  to  the
contrary. For  telephone  exchanges,  the exact  registration  of  the  existing
account and the account number must be provided.
 
                                       33
<PAGE>
    Any  shares  held  in  certificate  form cannot  be  exchanged  but  must be
forwarded to the  Transfer Agent  and deposited into  the shareholder's  account
before  being eligible for exchange. (Certificates  mailed in for deposit should
not be endorsed.)
 
    When shares of any CDSC Fund are  exchanged for shares of an Exchange  Fund,
the exchange is executed at no charge to the shareholder, without the imposition
of  the  CDSC  at the  time  of the  exchange.  During  the period  of  time the
shareholder remains in the Fund or in the money market fund (calculated from the
last day of  the month in  which the  Exchange Fund shares  were acquired),  the
holding  period or "year since purchase payment made" is frozen. When shares are
redeemed out of the Exchange Fund, they will be subject to a CDSC which would be
based upon  the period  of time  the shareholder  held shares  in a  CDSC  Fund.
However,  in the case of shares of a  CDSC Fund exchanged into an Exchange Fund,
upon redemption of shares which results in  a CDSC being imposed, a credit  (not
to  exceed the  amount of  the CDSC)  will be  given in  an amount  equal to the
Exchange Fund 12b-1 distribution  fees which are  attributable to those  shares.
Shareholders  acquiring shares  of an  Exchange Fund  pursuant to  this exchange
privilege may exchange those shares back into a CDSC fund from the Exchange with
no CDSC being  imposed on such  exchange. The holding  period previously  frozen
when  shares were first exchanged for shares of the Exchange Fund resumes on the
last day of the  month in which shares  of a CDSC Fund  are reacquired. Thus,  a
CDSC  is  imposed  only  upon  an  ultimate  redemption,  based  upon  the  time
(calculated as described above) the shareholder was invested in a CDSC Fund.
 
   
    When shares initially purchased in a  CDSC Fund are exchanged for shares  of
another CDSC Fund or for shares of an Exchange Fund, the date of purchase of the
shares  of the fund  exchanged into, for  purposes of the  CDSC upon redemption,
will be the  last day  of the  month in which  the shares  being exchanged  were
originally  purchased.  In allocating  the purchase  payments between  funds for
purposes of the CDSC, the amount which represents the current net asset value of
shares at the time of the exchange which were (i) purchased more than six  years
prior  to  the exchange  and (ii)  originally  acquired through  reinvestment of
dividends or  distributions (all  such  shares called  "Free Shares"),  will  be
exchanged  first.  After an  exchange,  all dividends  earned  on shares  in the
Exchange Fund will be  considered Free Shares. If  the exchanged amount  exceeds
the  value of such Free Shares, an  exchange is made, on a block-by-block basis,
of non-Free Shares  held for the  longest period  of time. Shares  equal to  any
appreciation  in the value of non-Free Shares  exchanged will be treated as Free
Shares, and the amount of the purchase  payments for the non-Free Shares of  the
fund  exchanged into will  be equal to  the lesser of  (a) the purchase payments
for, or (b) the current net asset value of, the exchanged non-Free Shares. If an
exchange between funds  would result in  exchange of only  part of a  particular
block  of non-Free Shares, then shares equal to any appreciation in the value of
the block (up to the amount of the exchange) will be treated as Free Shares  and
exchanged  first, and the purchase payment for that block will be allocated on a
pro rata basis between the non-Free Shares of that block to be retained and  the
non-Free  Shares to be  exchanged. The prorated amount  of such purchase payment
attributable to the retained non-Free Shares will remain as the purchase payment
for such shares, and the amount  of purchase payment for the exchanged  non-Free
Shares  will be equal to  the lesser of (a) the  prorated amount of the purchase
payment for, or  (b) the current  net asset value  of, those exchanged  non-Free
Shares.  Based upon the  procedures described in the  CDSC Fund Prospectus under
the caption  "Contingent Deferred  Sales Charge,"  any applicable  CDSC will  be
imposed  upon the ultimate redemption  of shares of any  fund, regardless of the
number of exchanges since those shares were originally purchased.
    
 
    With respect to  the redemption  or repurchase of  shares of  the Fund,  the
application  of proceeds to the purchase of new  shares in the Fund or any other
of the  funds and  the general  administration of  the Exchange  Privilege,  the
Transfer  Agent  acts as  agent for  the Distributor  and for  the shareholder's
selected broker-dealer.
 
    With respect to  exchanges, redemptions or  repurchases, the Transfer  Agent
shall  be liable for its own negligence and not for the default or negligence of
its correspondents or for losses  in transit. The Fund  shall not be liable  for
any default or negligence of the Transfer Agent, the Distributor or any selected
broker-dealer.
 
    The Distributor and any selected broker-dealer have authorized and appointed
the  Transfer Agent to act as their  agent in connection with the application of
proceeds of any redemption of Fund shares  to the purchase of the shares of  any
other  fund  and  the  general  administration  of  the  Exchange  Privilege. No
commission or  discounts  will  be  paid to  the  Distributor  or  any  selected
broker-dealer for any transactions pursuant to this Exchange Privilege.
 
                                       34
<PAGE>
    Exchanges  are subject to  the minimum investment  requirement and any other
conditions imposed by each fund. (The  minimum initial investment is $5,000  for
Dean  Witter Liquid  Asset Fund Inc.,  Dean Witter Tax-Free  Daily Income Trust,
Dean Witter California  Tax-Free Daily  Income Trust  and Dean  Witter New  York
Municipal  Money Market  Trust, although those  funds may,  at their discretion,
accept initial investments of as low  as $1,000. The minimum initial  investment
for  Dean Witter  U.S. Government  Money Market  Trust and  all TCW/DW  Funds is
$1,000.) Upon exchange into a money market fund, the shares of that fund will be
held in a special Exchange Privilege  Account separately from accounts of  those
shareholders  who  have acquired  their  shares directly  from  that fund.  As a
result, certain  services normally  available to  shareholders of  money  market
funds, including the check writing feature, will not be available for funds held
in that account.
 
    The  Fund, each of the other TCW/DW Funds and each of the money market funds
may limit the number of  times this Exchange Privilege  may be exercised by  any
investor  within a specified period of time. Also, the Exchange Privilege may be
terminated or revised at any time by any of the TCW/DW Funds or the money market
funds, upon such  notice as may  be required by  applicable regulatory  agencies
(presently  sixty days for termination or  material revision), provided that six
months' prior written notice  of termination will be  given to the  shareholders
who  hold shares  of Exchange  Funds, pursuant  to this  Exchange Privilege, and
provided further that  the Exchange  Privilege may be  terminated or  materially
revised  at times (a) when the New York  Stock Exchange is closed for other than
customary  weekends  and  holidays,  (b)  when  trading  on  that  Exchange   is
restricted,  (c) when an emergency  exists as a result  of which disposal by the
Fund of  securities owned  by it  is not  reasonably practicable  or it  is  not
reasonably  practicable for the  Fund fairly to  determine the value  of its net
assets, (d) during any other period when the Securities and Exchange  Commission
by  order  so permits  (provided that  applicable rules  and regulations  of the
Securities and Exchange  Commission shall  govern as to  whether the  conditions
prescribed  in (b) or (c) exist), or (e),  if the Fund would be unable to invest
amounts effectively in accordance with its investment objective(s), policies and
restrictions. 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.
 
    For further  information  regarding  the  Exchange  Privilege,  shareholders
should  contact their DWR  or other selected  broker-dealer account executive or
the Transfer Agent.
 
REPURCHASES AND REDEMPTIONS
- --------------------------------------------------------------------------------
 
    PAYMENT FOR SHARES REPURCHASED OR REDEEMED.  As discussed in the Prospectus,
payment for shares  presented for  repurchase or redemption  will be  ordinarily
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  at times  (a) when  the New  York Stock
Exchange is closed  for other  than customary  weekends and  holidays, (b)  when
trading on that Exchange is restricted, (c) when an emergency exists as a result
of  which  disposal by  the Fund  of securities  owned by  it is  not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or (d) during any other period when the  Securities
and  Exchange Commission by order so permits; provided that applicable rules and
regulations of the Securities and Exchange Commission shall govern as to whether
the conditions prescribed in (b) or (c) exist. If the shares to be redeemed have
recently been purchased by check and the  check has not yet cleared, payment  of
redemption  proceeds may be delayed  until the check has  cleared (not more than
fifteen days from the time of receipt of the check by the Transfer Agent).
 
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
 
    As discussed in the Prospectus, the Fund will determine either to distribute
or to retain  all or part  of any net  long-term capital gains  in any year  for
reinvestment.  If any such gains are retained,  the Fund will pay federal income
tax thereon, and  shareholders will  be required to  include such  undistributed
gains  in their taxable income and will be  able to claim their share of the tax
paid by the Fund as a credit against their individual federal income tax.
 
                                       35
<PAGE>
    Because the Fund intends to distribute all of its net investment income  and
net  capital  gains  to shareholders  and  otherwise  continue to  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.
Shareholders  will  normally have  to pay  federal income  taxes, and  any state
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  or  net  short-term  capital  gains,  are  taxable  to   the
shareholder  as ordinary income  regardless of whether  the shareholder receives
such payments in  additional shares or  in cash. 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  received by the  shareholder in  the prior  calendar
year.
 
    Gains or losses on sales of securities by the Fund will be long-term capital
gains  or losses  if the  securities have been  held by  the Fund  for more than
twelve months. Gains or losses on the sale of securities held for twelve  months
or less will be short-term gains or losses.
 
    The  Fund's transactions,  if any, in  options and futures  contracts may be
subject to special  provisions of the  Internal Revenue Code  that, among  other
things, may affect the character of gains and losses realized by the Fund (i.e.,
may  affect  whether  gains  or  losses  are  ordinary  or  capital), accelerate
recognition of  income to  the Fund  and defer  Fund losses.  These rules  could
therefore   affect  the  character,  amount   and  timing  of  distributions  to
shareholders. These  rules also  (a) could  require the  Fund to  mark-to-market
certain  types of the  positions in its  portfolio (i.e., treat  them as if they
were closed  out)  and  (b) may  cause  the  Fund to  recognize  income  without
receiving  cash with  which to  pay dividends  or make  distributions in amounts
necessary to  satisfy  the distribution  requirements  for avoiding  income  and
excise taxes.
 
    Any  dividend or capital  gains distribution received  by a shareholder from
any investment company will have the effect  of reducing the net asset value  of
the  shareholder's stock in that company by  the exact amount of the dividend or
capital  gains  distribution.  Furthermore,  capital  gains  distributions   and
dividends  are subject to  federal income taxes.  If the net  asset value of the
shares should be reduced below a shareholder's  cost as a result of the  payment
of  dividends or the distribution of  realized net long-term capital gains, such
payment or  distribution  would  be  in  part  a  return  of  the  shareholder's
investment  to the  extent of such  reduction below the  shareholder's cost, but
nonetheless would be  fully taxable at  either ordinary or  capital gain  rates.
Therefore,  an investor should consider the  tax implications of purchasing Fund
shares immediately prior to a dividend or distribution record date.
 
    Dividend payments  will  be  eligible for  the  federal  dividends  received
deduction  available to the Fund's corporate shareholders only to the extent the
aggregate dividends received by the Fund would be eligible for the deduction  if
the  Fund were  the shareholder claiming  the dividends  received deduction. The
amount of  dividends  paid by  the  Fund which  may  qualify for  the  dividends
received  deduction is limited  to the aggregate  amount of qualifying dividends
which the Fund derives  from its portfolio investments  which the Fund has  held
for  a minimum period, usually 46 days.  Any distributions made by the Fund will
not be eligible  for the  dividends received  deduction with  respect to  shares
which  are held by  the shareholder for  45 days or  less. Any long-term capital
gain distributions  will  also  not  be  eligible  for  the  dividends  received
deduction.  The ability  to take the  dividends received deduction  will also be
limited in the case of a Fund shareholder which incurs or continues indebtedness
which is directly attributable to its investment in the Fund.
 
    After the end  of the year,  shareholders will be  sent full information  on
their  dividends  and capital  gains distributions  for tax  purposes, including
information as to the portion taxable as ordinary income, the portion taxable as
long-term capital  gains and  the portion  eligible for  the dividends  received
deduction.  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.
 
    Shareholders  are urged to consult their attorneys or tax advisers regarding
specific questions as to federal, state or local taxes.
 
                                       36
<PAGE>
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
 
   
    As discussed in the  Prospectus, from time  to time the  Fund may quote  its
"yield"  and/or its "total return" in advertisements and sales literature. Yield
is calculated for any  30-day period as follows:  the amount of interest  and/or
dividend  income  for each  security in  the Fund's  portfolio is  determined in
accordance with  regulatory requirements;  the total  for the  entire  portfolio
constitutes  the Fund's gross income for the period. Expenses accrued during the
period are subtracted to arrive at "net investment income". The resulting amount
is divided by the product  of the maximum offering price  per share on the  last
day  of the period multiplied  by the average number  of Fund shares outstanding
during the period that were entitled to dividends. This amount is added to 1 and
raised to  the  sixth power.  1  is then  subtracted  from the  result  and  the
difference  is multiplied  by 2  to arrive at  the annualized  yield. The Fund's
yield for the 30-day period ended January 31, 1996 was 4.72%.
    
 
   
    The Fund's "average annual total return" represents an annualization of  the
Fund's  total return  over a  particular period and  is computed  by finding the
annual percentage rate  which will result  in the ending  redeemable value of  a
hypothetical  $1,000 investment made at the beginning of a one, five or ten year
period, or  for  the  period  from  the  date  of  commencement  of  the  Fund's
operations,  if  shorter than  any of  the  foregoing. For  the purpose  of this
calculation, it is assumed that all dividends and distributions are  reinvested.
The  formula for computing the average annual total return involves a percentage
obtained by dividing the  ending redeemable value by  the amount of the  initial
investment,  taking a root of the quotient  (where the root is equivalent to the
number of years in the  period) and subtracting 1  from the result. The  average
annual  total returns of the Fund for the fiscal year ended January 31, 1996 and
for the period from March 31, 1993 (commencement of operations) through  January
31, 1996 were 20.52% and 9.97%, respectively.
    
 
   
    In  addition to the foregoing, the Fund  may advertise its total return over
different periods of time by means of aggregate, year-by-year or other types  of
total  return figures. The Fund also may  compute its aggregate total return for
specified periods by determining the aggregate percentage rate which will result
in the ending value of a hypothetical $1,000 investment made at the beginning of
the period.  For  the  purpose of  this  calculation,  it is  assumed  that  all
dividends  and distributions are reinvested. The formula for computing aggregate
total return involves a percentage obtained by dividing the ending value by  the
initial  $1,000  investment and  subtracting  1 from  the  result. Based  on the
foregoing calculation,  the  Fund's total  returns  for the  fiscal  year  ended
January 31, 1996 and for the period from March 31, 1993 through January 31, 1996
were 20.52% and 30.92%, respectively.
    
 
   
    The  Fund  may also  advertise the  growth of  a hypothetical  investment of
$10,000, $50,000 or $100,000  in shares of  the Fund by adding  1 to the  Fund's
aggregate  total return  (expressed as  a decimal)  and multiplying  by $10,000,
$50,000 or $100,000,  as the case  may be. Investments  of $10,000, $50,000  and
$100,000  in the  Fund at  inception would  have grown  to $13,092,  $65,460 and
$130,920, respectively, at January 31, 1996.
    
 
    The Fund from time  to time may also  advertise its performance relative  to
certain performance rankings and indexes compiled by independent organizations.
 
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
 
   
    The shareholders of the Fund are entitled to a full vote for each full share
held.  The Trustees were  elected by InterCapital  in January, 1993  as the then
sole shareholder of the Fund or, in the case of Messrs. Schroeder and Stern,  by
the  other Trustees on April 20, 1995. The Trustees themselves have the power to
alter the number and the  terms of office of the  Trustees, and they may at  any
time  lengthen 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  to remove  the Trustees  following a meeting
called for that purpose requested in writing  by the record holders of not  less
than  ten  percent  of  the  Fund's outstanding  shares.  The  voting  rights of
shareholders are not cumulative, so that holders of more than 50 percent of  the
shares  voting can, if they choose, elect all Trustees being selected, while the
holders of the remaining shares would be unable to elect any Trustees.
    
 
                                       37
<PAGE>
    The Declaration of Trust permits the  Trustees to authorize the creation  of
additional  series  of  shares  (the  proceeds of  which  would  be  invested in
separate, independently  managed portfolios)  and additional  classes of  shares
within  any  series (which  would be  used  to distinguish  among the  rights of
different categories of shareholders, as might be required by future regulations
or other unforeseen  circumstances). However, the  Trustees have not  authorized
any such additional series or classes of shares.
 
    The  Declaration of  Trust provides  that no  Trustee, officer,  employee or
agent of the Fund is liable to the Fund or to a shareholder, nor is any Trustee,
officer, employee or agent  liable to any third  persons in connection with  the
affairs  of the Fund, except as such liability may arise from his own bad faith,
willful misfeasance, gross negligence, or  reckless disregard of his duties.  It
also  provides that all third  persons shall look solely  to the Fund's property
for satisfaction of claims arising in  connection with the affairs of the  Fund.
With the exceptions
stated,  the Declaration of Trust provides  that a Trustee, officer, employee or
agent is entitled to be indemnified  against all liabilities in connection  with
the affairs of the Fund.
 
    The  Fund is authorized to issue an unlimited number of shares of beneficial
interest. The Fund shall be of unlimited duration, subject to the provisions  in
the Declaration of Trust concerning termination by action of the shareholders.
 
CUSTODIAN AND TRANSFER AGENT
- --------------------------------------------------------------------------------
 
    The  Bank of New York, 90 Washington Street, New York, New York 10286 is the
Custodian of  the  Fund's assets.  Any  of the  Fund's  cash balances  with  the
Custodian  in excess of  $100,000 are unprotected  by federal deposit insurance.
Such balances may, at times, be substantial.
 
    Dean Witter Trust  Company, Harborside Financial  Center, Plaza Two,  Jersey
City,  New Jersey 07311 is the Transfer  Agent of the Fund's shares and Dividend
Disbursing Agent for payment of dividends  and distributions on Fund shares  and
Agent  for shareholders  under various  investment plans  described herein. Dean
Witter Trust Company is an affiliate  of Dean Witter Services Company Inc.,  the
Fund's Manager, and of Dean Witter Distributors Inc., the Fund's Distributor. As
Transfer  Agent  and  Dividend  Disbursing Agent,  Dean  Witter  Trust Company's
responsibilities include maintaining  shareholder accounts, including  providing
subaccounting  and  recordkeeping  services  for  certain  retirement  accounts;
disbursing  cash  dividends  and   reinvesting  dividends;  processing   account
registration  changes;  handling purchase  and redemption  transactions; mailing
prospectuses and  reports;  mailing  and tabulating  proxies;  processing  share
certificate  transactions; and  maintaining shareholder  records and  lists. For
these services Dean Witter Trust Company receives a per shareholder account fee.
 
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
 
    Price Waterhouse LLP serves as the independent accountants of the Fund.  The
independent  accountants  are  responsible  for  auditing  the  annual financial
statements of the Fund.
 
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
 
    The Fund will send to shareholders, at least semi-annually, reports  showing
the  Fund's  portfolio  and  other  information.  An  annual  report  containing
financial  statements  audited  by  independent  accountants  will  be  sent  to
shareholders each year.
 
    The  Fund's fiscal year ends on January  31. The financial statements of the
Fund must  be audited  at least  once a  year by  independent accountants  whose
selection is made annually by the Fund's Board of Trustees.
 
LEGAL COUNSEL
- --------------------------------------------------------------------------------
 
    Sheldon  Curtis, Esq.,  who is  an officer  and the  General Counsel  of the
Manager, is an officer and the General Counsel of the Fund.
 
                                       38
<PAGE>
EXPERTS
- --------------------------------------------------------------------------------
 
    The  financial  statements  of  the  Fund  included  in  this  Statement  of
Additional Information and incorporated by reference in the Prospectus have been
so  included and incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants,  given on  the authority  of said  firm as  experts  in
auditing and accounting.
 
REGISTRATION STATEMENT
- --------------------------------------------------------------------------------
 
    This  Statement of Additional Information and  the Prospectus do not contain
all of the  information set  forth in the  Registration Statement  the Fund  has
filed  with the  Securities and  Exchange Commission.  The complete Registration
Statement may  be obtained  from  the Securities  and Exchange  Commission  upon
payment of the fee prescribed by the rules and regulations of the Commission.
 
                                       39
<PAGE>
TCW/DW INCOME AND GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of TCW/DW Income and Growth Fund
 
   
In  our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments,  and the related statements  of operations and  of
changes  in  net assets  and  the financial  highlights  present fairly,  in all
material respects, the financial position of TCW/DW Income and Growth Fund  (the
"Fund")  at January 31,  1996, the results  of its operations  for the year then
ended, the changes in  its net assets for  each of the two  years in the  period
then  ended and the financial highlights for each of the two years in the period
then ended  and for  the  period March  31,  1993 (commencement  of  operations)
through  January  31, 1994,  in  conformity with  generally  accepted accounting
principles. These  financial  statements  and  financial  highlights  (hereafter
referred  to as  "financial statements")  are the  responsibility of  the Fund's
management; our  responsibility is  to  express an  opinion on  these  financial
statements  based  on our  audits. We  conducted our  audits of  these financial
statements in  accordance  with  generally  accepted  auditing  standards  which
require  that we plan and perform the audit to obtain reasonable assurance about
whether the financial  statements are  free of material  misstatement. An  audit
includes  examining,  on  a  test basis,  evidence  supporting  the  amounts and
disclosures in  the financial  statements, assessing  the accounting  principles
used  and significant estimates  made by management,  and evaluating the overall
financial statement presentation.  We believe  that our  audits, which  included
confirmation  of  securities  at January  31,  1996 by  correspondence  with the
custodian and  brokers, provide  a reasonable  basis for  the opinion  expressed
above.
    
 
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
   
March 8, 1996
    
 
   
                      1996 FEDERAL TAX NOTICE (UNAUDITED)
    During  the year ended January 31,  1996, 11.78% of the income dividends
    qualified   for    the   dividends-received-deduction    available    to
    corporations.
    
 
                                       40
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 PRINCIPAL
 AMOUNT (IN                                         COUPON     MATURITY
 THOUSANDS)                                          RATE        DATE       VALUE
- ------------                                      ----------  ----------  ----------
<C>           <S>                                 <C>         <C>         <C>
              CORPORATE BONDS (38.7%)
              AUTO PARTS (0.7%)
$       440   Motor Wheel Corp. (Series B)......       11.50%   03/01/00  $  400,400
                                                                          ----------
              BUSINESS SERVICES (1.9%)
        320   Big Flower Press, Inc.............       10.75    08/01/03     344,000
        310   Jorgensen (Earle M.) Co...........       10.75    03/01/00     295,275
        450   Williamhouse-Regency - 144A*......       13.00    11/15/05     479,250
                                                                          ----------
                                                                           1,118,525
                                                                          ----------
              CHEMICALS (0.7%)
        375   NL Industries Inc.................       11.75    10/15/03     402,188
                                                                          ----------
              CONSUMER PRODUCTS (0.7%)
        435   La Petite Holdings Corp...........        9.625   08/01/01     391,500
                                                                          ----------
              ENERGY (1.3%)
        640   Flores & Rucks, Inc...............       13.50    12/01/04     729,600
                                                                          ----------
              ENTERTAINMENT/GAMING (5.1%)
        500   Aztar Corp........................       11.00    10/01/02     510,000
        750   Bally's Grand, Inc. (Series B)....       10.375   12/15/03     780,000
        640   Bally's Park Place Funding,
                Inc.............................        9.25    03/15/04     654,400
        845   Fitzgeralds Gaming Corp.
                (Units)++.......................       13.00    12/31/02     794,300
        165   Grand Casinos, Inc................       10.125   12/01/03     178,200
                                                                          ----------
                                                                           2,916,900
                                                                          ----------
              FINANCIAL SERVICES (0.8%)
        400   American Annuity Group, Inc.......       11.125   02/01/03     432,000
                                                                          ----------
              FOODS (1.4%)
        340   American Rice, Inc................       13.00    07/31/02     319,600
        500   Penn Traffic Co...................       10.25    02/15/02     493,750
                                                                          ----------
                                                                             813,350
                                                                          ----------
              HOME BUILDING (0.6%)
        350   U.S. Home Corp....................        9.75    06/15/03     360,938
                                                                          ----------
              HOSPITAL MANAGEMENT (1.3%)
        665   OrNda HealthCorp..................       12.25    05/15/02     733,162
                                                                          ----------
              INDUSTRIALS (3.6%)
        250   American Media Operations, Inc....       11.625   11/15/04     256,875
        260   Cott Corp. (Canada)...............        9.375   07/01/05     263,250
        500   Mobilemedia Communications,
                Inc.............................        9.375   11/01/07     522,500
        500   Rogers Communications, Inc........       10.875   04/15/04     530,000
        500   Showboat, Inc.....................        9.25    05/01/08     505,000
                                                                          ----------
                                                                           2,077,625
                                                                          ----------
</TABLE>
 
                                       41
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 PRINCIPAL
 AMOUNT (IN                                         COUPON     MATURITY
 THOUSANDS)                                          RATE        DATE       VALUE
- ------------                                      ----------  ----------  ----------
<C>           <S>                                 <C>         <C>         <C>
              MANUFACTURING (5.7%)
$       335   Communications & Power Industries,
                Inc. (Series B).................       12.00%   08/01/05  $  345,887
        575   Newflo Corp.......................       13.25    11/15/02     595,125
        500   Sweetheart Cup, Inc...............       10.50    09/01/03     520,000
        750   Talley Manufacturing & Technology
                Inc.............................       10.75    10/15/03     757,500
        600   Telex Communications Inc..........       12.00    07/15/04     627,000
        407   Waters Technologies Corp. (Series
                B)..............................       12.75    09/30/04     459,910
                                                                          ----------
                                                                           3,305,422
                                                                          ----------
              MEDIA GROUP (3.7%)
        375   Ackerly Communications, Inc.
                (Series B)......................       10.75    10/01/03     405,000
        545   Garden State Newspapers, Inc......       12.00    07/01/04     564,075
        575   Heritage Media Services Inc.......       11.00    06/15/02     619,562
        500   K-III Communications Corp.........       10.625   05/01/02     533,750
                                                                          ----------
                                                                           2,122,387
                                                                          ----------
              MULTI-INDUSTRY (0.8%)
        500   Valcor, Inc.......................        9.625   11/01/03     472,500
                                                                          ----------
              PACKAGING & BOTTLING (0.7%)
        375   Plastic Containers, Inc...........       10.75    04/01/01     382,500
                                                                          ----------
              PAPER & FOREST PRODUCTS (3.7%)
        935   Malette, Inc. (Canada)............       12.25    07/15/04   1,037,850
        500   Rainy River Forest Product
                (Canada)........................       10.75    10/15/01     550,000
        550   Stone Container Corp..............       10.75    10/01/02     564,438
                                                                          ----------
                                                                           2,152,288
                                                                          ----------
              REAL ESTATE INVESTMENT TRUST (0.7%)
        415   Trizec Finance Ltd. (Canada)......       10.875   10/15/05     431,600
                                                                          ----------
              RETAIL (1.0%)
        420   Cole National Group, Inc..........       11.25    10/01/01     423,150
        160   Hills Stores Co...................       10.25    09/30/03     152,400
                                                                          ----------
                                                                             575,550
                                                                          ----------
              TELECOMMUNICATIONS (1.4%)
        730   Mobile Telecommunication
                Technologies Corp...............       13.50    12/15/02     819,425
                                                                          ----------
              TEXTILES - APPAREL MANUFACTURERS (0.5%)
        205   Reeves Industries Inc.............       11.00    07/15/02     182,450
        150   Salant Corp.......................       10.50    12/31/98     125,250
                                                                          ----------
                                                                             307,700
                                                                          ----------
              TRANSPORTATION (1.5%)
        550   Moran Transportation Co...........       11.75    07/15/04     534,875
        235   SFP Pipeline Holdings, Inc........       11.16    08/15/10     310,200
                                                                          ----------
                                                                             845,075
                                                                          ----------
              UTILITIES (0.9%)
        490   Texas-New Mexico Power Co.........       10.75    09/15/03     524,300
                                                                          ----------
              TOTAL CORPORATE BONDS (IDENTIFIED COST $21,940,550).......  22,314,935
                                                                          ----------
</TABLE>
 
                                       42
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
 
   
<TABLE>
<CAPTION>
 PRINCIPAL
 AMOUNT (IN                                         COUPON     MATURITY
 THOUSANDS)                                          RATE        DATE       VALUE
- ------------                                      ----------  ----------  ----------
<C>           <S>                                 <C>         <C>         <C>
              CONVERTIBLE BONDS (45.4%)
              AUTO PARTS (0.9%)
$       535   Magna International, Inc..........        5.00%   10/15/02  $  537,311
                                                                          ----------
              AUTOMOTIVE - REPLACEMENT PARTS (1.5%)
      1,355   Exide Corp. - 144A*...............        2.90    12/15/05     865,384
                                                                          ----------
              BANKS - INTERNATIONAL (1.3%)
        650   MBL International Finance
                (Bermuda).......................        3.00    11/30/02     727,701
                                                                          ----------
              BIOTECHNOLOGY (0.6%)
        305   Sepracor Inc. - 144A*.............        7.00    12/01/02     350,180
                                                                          ----------
              BROADCASTING (0.5%)
        275   Scandinavian Broadcasting
                (Luxembourg)....................        7.25    08/01/05     293,562
                                                                          ----------
              BUILDING MATERIALS (0.9%)
        210   Cemex S.A. de C.V. - 144A*
                (Mexico)........................        4.25    11/01/97     186,900
        340   TPI Polene Public Co. Ltd. - 144A*
                (Thailand)......................        2.75    02/08/06     344,675
                                                                          ----------
                                                                             531,575
                                                                          ----------
              BUSINESS SERVICES (2.4%)
        465   Danka Business Systems - 144A*....        6.75    04/01/02     663,941
        515   Omnicom Group, Inc. - 144A*.......        4.50    09/01/00     727,046
                                                                          ----------
                                                                           1,390,987
                                                                          ----------
              COMPUTER EQUIPMENT (1.8%)
        300   EMC Corp..........................        4.25    01/01/01     334,722
        250   Storage Technology Corp...........        8.00    05/31/15     250,313
        470   Unisys Corp.......................        8.25    08/01/00     464,125
                                                                          ----------
                                                                           1,049,160
                                                                          ----------
              COMPUTER SOFTWARE & SERVICES (1.6%)
        125   Career Horizons, Inc. - 144A*.....        7.00    11/01/02     160,000
        130   First Financial Management
                Corp............................        5.00    12/15/99     222,447
        595   Silicon Graphics, Inc. - 144A*....        0.00    11/02/13     322,288
        230   Telxon Corp. - 144A*..............        5.75    01/01/03     225,460
                                                                          ----------
                                                                             930,195
                                                                          ----------
              CONGLOMERATES (0.5%)
        300   Alfa S.A. de C.V. - 144A*
                (Mexico)........................        8.00    09/15/00     303,666
                                                                          ----------
              CONSUMER SERVICES (0.6%)
        340   Youth Services International, Inc.
                - 144A*.........................        7.00    02/01/06     343,825
                                                                          ----------
              DRUGS & HEALTHCARE (0.7%)
        630   Elan International Finance Ltd.
                (Ireland).......................        0.00    10/16/12     395,955
                                                                          ----------
              ELECTRONICS (3.0%)
        630   General Instrument Corp...........        5.00    06/15/00     671,668
        935   Thermo Electron Corp..............        4.25    01/01/03   1,069,406
                                                                          ----------
                                                                           1,741,074
                                                                          ----------
</TABLE>
    
 
                                       43
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 PRINCIPAL
 AMOUNT (IN                                         COUPON     MATURITY
 THOUSANDS)                                          RATE        DATE       VALUE
- ------------                                      ----------  ----------  ----------
<C>           <S>                                 <C>         <C>         <C>
              ELECTRONICS - SEMICONDUCTORS/COMPONENTS (4.8%)
$       260   Altera Corp. - 144A*..............        5.75%   06/15/02  $  373,467
        475   Analog Devices....................        3.50    12/01/00     505,367
      1,210   National Semiconductor - 144A*....        6.50    10/01/02   1,128,325
        720   Xilinx Inc. - 144A*...............        5.25    11/01/02     729,900
                                                                          ----------
                                                                           2,737,059
                                                                          ----------
              FINANCIAL (0.4%)
        160   American Travellers Corp..........        6.50    10/01/05     222,389
                                                                          ----------
              FOODS & BEVERAGES (0.6%)
        120   Grand Metropolitan PLC (United
                Kingdom)........................        6.50    01/31/00     136,800
        180   Grand Metropolitan PLC - 144A*
                (United Kingdom)................        6.50    01/31/00     201,672
                                                                          ----------
                                                                             338,472
                                                                          ----------
              HEALTHCARE (1.7%)
        230   American Medical Response, Inc. -
                144A*...........................        5.25    02/01/01     230,000
        220   Assisted Living Concepts, Inc. -
                144A*...........................        7.00    07/31/05     268,400
        215   Quantum Health Resources, Inc.....        4.75    10/01/00     156,950
        300   Tenet Healthcare Corp.............        6.00    12/01/05     333,000
                                                                          ----------
                                                                             988,350
                                                                          ----------
              INDUSTRIALS (0.7%)
        510   Convertible Trust - 144A*.........        2.00    10/01/02     416,925
                                                                          ----------
              INSURANCE (1.0%)
        665   Mutual Risk Management - 144A*....        0.00    10/30/15     268,061
        600   USF&G Corp........................        0.00    03/03/09     333,000
                                                                          ----------
                                                                             601,061
                                                                          ----------
              LEISURE (0.6%)
      1,115   Coleman Worldwide Corp............        0.00    05/27/13     327,074
                                                                          ----------
              MACHINERY (0.3%)
        165   Thermo Optek Inc. - 144A*.........        5.00    10/15/00     179,850
                                                                          ----------
              MEDIA GROUP (2.5%)
        700   Comcast Corp......................        3.375   09/09/05     676,473
        435   Comcast Corp......................        1.125   04/15/07     223,359
        125   Nelson (Thomas), Inc. - 144A*.....        5.75    11/30/99     123,730
        885   News America Holdings, Inc........        0.00    03/11/13     410,861
                                                                          ----------
                                                                           1,434,423
                                                                          ----------
              MEDICAL SERVICES (1.2%)
        365   Integrated Health Services,
                Inc.............................        5.75    01/01/01     365,000
        310   Integrated Health Services, Inc. -
                144A*...........................        5.75    01/01/01     310,775
                                                                          ----------
                                                                             675,775
                                                                          ----------
              OIL & GAS PRODUCTS (0.7%)
        345   Apache Corp. - 144A*..............        6.00    01/15/02     381,442
                                                                          ----------
</TABLE>
 
                                       44
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
   
<TABLE>
<CAPTION>
 PRINCIPAL
 AMOUNT (IN                                         COUPON     MATURITY
 THOUSANDS)                                          RATE        DATE       VALUE
- ------------                                      ----------  ----------  ----------
<C>           <S>                                 <C>         <C>         <C>
              PAPER & FOREST PRODUCTS (0.5%)
$       285   Sappi BVI Finance Ltd. - 144A*
                (South Africa)..................        7.50%   08/01/02  $  275,737
                                                                          ----------
              PHARMACEUTICALS (0.6%)
        390   Sandoz Capital BVI, Ltd. - 144A*
                (Switzerland)...................        2.00    10/06/02     362,700
                                                                          ----------
              POLLUTION CONTROL (2.8%)
        290   Laidlaw Inc. - 144A* (Canada)
                (1).............................        6.00    01/15/99     350,900
        350   U.S. Filter Corp..................        5.00    10/15/00     457,625
        370   U.S. Filter Corp. - 144A*.........        6.00    09/15/05     427,350
        450   WMX Technologies, Inc.............        2.00    01/24/05     394,875
                                                                          ----------
                                                                           1,630,750
                                                                          ----------
              PUBLISHING (0.6%)
        300   Scholastic Corp. - 144A*..........        5.00    08/15/05     340,701
                                                                          ----------
              REAL ESTATE (0.6%)
        300   HD Finance Cayman Ltd. - 144A*
                (Cayman Islands)................        6.75    06/01/00     344,250
                                                                          ----------
              REAL ESTATE INVESTMENT TRUST (2.0%)
        300   Camden Property Trust.............        7.33    04/01/01     303,066
        335   Liberty Property Trust............        8.00    07/01/01     358,869
        330   LTC Properties, Inc...............        8.50    01/01/01     359,700
        125   LTC Properties, Inc...............        7.75    01/01/02     125,625
                                                                          ----------
                                                                           1,147,260
                                                                          ----------
              RETAIL (3.1%)
        245   Baby Superstore, Inc..............        4.875   10/01/00     261,523
        335   Federated Department Stores,
                Inc.............................        5.00    10/01/03     334,280
        480   Office Depot, Inc.................        0.00    11/01/08     270,960
        925   Staples, Inc. - 144A*.............        4.50    10/01/00     919,718
                                                                          ----------
                                                                           1,786,481
                                                                          ----------
              SCIENTIFIC INSTRUMENTS (0.1%)
         35   Fisher Scientific International,
                Inc.............................        4.75    03/01/03      38,150
                                                                          ----------
              TELECOMMUNICATIONS (1.4%)
        930   Motorola, Inc.....................        0.00    09/27/13     690,525
        310   U.S. Cellular Corp................        0.00    06/15/15     110,283
                                                                          ----------
                                                                             800,808
                                                                          ----------
              TRANSPORTATION (2.4%)
        670   AMR Corp..........................        6.125   11/01/24     707,795
        770   Delta Airlines, Inc...............        3.23    06/15/03     696,165
                                                                          ----------
                                                                           1,403,960
                                                                          ----------
              WHOLESALE DISTRIBUTOR (0.5%)
        255   Mercury Air Group.................        7.75    02/01/06     257,550
                                                                          ----------
              TOTAL CONVERTIBLE BONDS (IDENTIFIED COST $24,467,188).....  26,151,742
                                                                          ----------
</TABLE>
    
 
                                       45
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 NUMBER OF
   SHARES                                           VALUE
- ------------                                      ----------
            CONVERTIBLE PREFERRED STOCKS (12.6%)
<C>           <S>                                 <C>         <C>         <C>
            AEROSPACE (0.5%)
   18,700   Cooper Industries, Inc. $0.909..............................  $  289,850
                                                                          ----------
            AUTO PARTS (0.6%)
    5,550   Federal Mogul Corp. - 144A* $3.875..........................     330,225
                                                                          ----------
            BROADCAST MEDIA (0.6%)
    6,400   TCI Communications, Inc. (Series A) $2.125..................     320,800
                                                                          ----------
            BUILDING MATERIALS (0.6%)
    5,700   Owens-Corning Capital L.L.C. - 144A* $3.25..................     339,862
                                                                          ----------
            COMPUTER SOFTWARE & SERVICES (2.1%)
   15,300   General Motors Corp. (Series C) $3.25 (2)...................   1,195,312
                                                                          ----------
            FINANCIAL (1.5%)
    7,100   Advanta Corp. $3.19.........................................     296,425
    1,600   Allstate Corp. (The) $2.30 (3)..............................      71,000
    8,700   St. Paul Capital L.L.C. $3.00...............................     511,125
                                                                          ----------
                                                                             878,550
                                                                          ----------
            FINANCIAL SERVICES (0.6%)
    6,200   Merrill Lynch & Co., Inc. $3.12 (4).........................     365,025
                                                                          ----------
            FUNERAL SERVICES (0.8%)
    6,200   SCI Finance L.L.C. (Series A) $3.125........................     471,200
                                                                          ----------
            OIL & GAS PRODUCTS (2.1%)
    8,500   Enron Corp. $0.725..........................................     205,062
    5,900   Occidental Petroleum Corp. - 144A* $3.875...................     332,613
   10,900   Occidental Petroleum Corp. (Series A) $3.00 (5).............     662,175
                                                                          ----------
                                                                           1,199,850
                                                                          ----------
            PAPER PRODUCTS (0.5%)
    6,500   International Paper Capital Trust - 144A* $2.625............     312,813
                                                                          ----------
            TELECOMMUNICATION EQUIPMENT (0.8%)
    8,700   Corning Delaware, L.P. $3.00................................     448,050
                                                                          ----------
            TELECOMMUNICATIONS (0.8%)
    8,400   MFS Communications Company, Inc. $2.68......................     447,300
                                                                          ----------
            WASTE MANAGEMENT (0.6%)
   10,100   Browning-Ferris Industries, Inc. $2.583.....................     328,250
                                                                          ----------
            WHOLESALE DISTRIBUTOR (0.5%)
    4,000   Alco Standard Corp. $5.04...................................     315,000
                                                                          ----------
            TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST
              $6,249,368)...............................................   7,242,087
                                                                          ----------
</TABLE>
 
   
                                       46
    
<PAGE>
TCW/DW Income and Growth Fund
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
 
   
<TABLE>
<CAPTION>
 PRINCIPAL
 AMOUNT (IN                                         COUPON     MATURITY
 THOUSANDS)                                          RATE        DATE       VALUE
- ------------                                      ----------  ----------  ----------
              SHORT-TERM INVESTMENT (3.6%)
<C>           <S>                                 <C>         <C>         <C>
              REPURCHASE AGREEMENT
$     2,116   The Bank of New York (dated
                01/31/96; proceeds $2,115,928;
                collateralized by $2,851,646
                U.S. Treasury Principal Strip
                due 05/15/01 valued at
                $2,157,902) (Identified Cost
                $2,115,590).....................        5.75%   02/01/96  $2,115,590
                                                                          ----------
 
TOTAL INVESTMENTS (IDENTIFIED COST $54,772,696) (A).........      100.3 % 57,824,354
 
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS..............       (0.3)    (193,759)
                                                                  -----   ----------
NET ASSETS..................................................      100.0 % $57,630,595
                                                                  -----   ----------
                                                                  -----   ----------
<FN>
- ------------------
 *   RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
++   CONSISTS OF MORE THAN ONE CLASS OF SECURITIES TRADED TOGETHER AS A UNIT;
     GENERALLY BONDS WITH ATTACHED WARRANTS.
(1)  EXCHANGEABLE INTO ADT COMMON STOCK.
(2)  EXCHANGEABLE INTO GENERAL MOTORS CORP. CLASS E COMMON STOCK.
(3)  EXCHANGEABLE INTO PMI GROUP INC. COMMON STOCK.
(4)  EXCHANGEABLE INTO MGIC INVESTMENT CORP. COMMON STOCK.
(5)  EXCHANGEABLE INTO CANADIAN OCCIDENTAL PETROLEUM COMMON STOCK.
(A)  THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES APPROXIMATES IDENTIFIED
     COST.
</TABLE>
    
 
                       SEE NOTES TO FINANCIAL STATEMENTS
 
                                       47
<PAGE>
TCW/DW Income and Growth Fund
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
JANUARY 31, 1996
- --------------------------------------------------------------------------------
 
   
<TABLE>
<S>                                           <C>
ASSETS:
Investments in securities, at value
  (identified cost $54,772,696).............  $57,824,354
Cash........................................     569,999
Receivable for:
  Interest..................................     868,937
  Investments sold..........................     571,892
  Shares of beneficial interest sold........      68,209
  Dividends.................................      18,324
Deferred organizational expenses............      86,151
Prepaid expenses............................      28,000
                                              ----------
        TOTAL ASSETS........................  60,035,866
                                              ----------
LIABILITIES:
Payable for:
  Investments purchased.....................   2,191,827
  Shares of beneficial interest
    repurchased.............................      68,328
  Plan of distribution fee..................      38,091
  Management fee............................      22,855
  Investment advisory fee...................      15,236
Accrued expenses............................      68,934
                                              ----------
        TOTAL LIABILITIES...................   2,405,271
                                              ----------
NET ASSETS:
Paid-in-capital.............................  54,351,181
Net unrealized appreciation.................   3,051,658
Accumulated undistributed net investment
  income....................................     450,139
Accumulated net realized loss...............    (222,383)
                                              ----------
        NET ASSETS..........................  $57,630,595
                                              ----------
                                              ----------
NET ASSET VALUE PER SHARE, 5,177,668 shares
  outstanding (unlimited shares authorized
  of $.01 par value)........................
                                                  $11.13
                                              ----------
                                              ----------
</TABLE>
    
 
Statement of Operations
FOR THE YEAR ENDED JANUARY 31, 1996
 
   
<TABLE>
<S>                                           <C>
NET INVESTMENT INCOME:
  INCOME
    Interest................................  $3,835,955
    Dividends...............................     349,952
                                              ----------
        TOTAL INCOME........................   4,185,907
                                              ----------
  EXPENSES
    Plan of distribution fee................     412,192
    Management fee..........................     247,315
    Investment advisory fee.................     164,877
    Professional fees.......................      90,175
    Shareholder reports and notices.........      73,848
    Transfer agent fees and expenses........      56,542
    Registration fees.......................      46,692
    Trustees' fees and expenses.............      45,544
    Organizational expenses.................      39,807
    Custodian fees..........................      19,578
    Other...................................      15,934
                                              ----------
        TOTAL EXPENSES......................   1,212,504
                                              ----------
        NET INVESTMENT INCOME...............   2,973,403
                                              ----------
NET REALIZED AND UNREALIZED GAIN:
    Net realized gain.......................   1,186,265
    Net change in unrealized appreciation...   6,051,315
                                              ----------
        NET GAIN............................   7,237,580
                                              ----------
        NET INCREASE........................  $10,210,983
                                              ----------
                                              ----------
</TABLE>
    
 
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
 
   
<TABLE>
<CAPTION>
                                                                                   FOR THE YEAR     FOR THE YEAR
                                                                                       ENDED            ENDED
                                                                                    JANUARY 31,      JANUARY 31,
                                                                                       1996             1995
                                                                                  ---------------  ---------------
<S>                                                                               <C>              <C>
INCREASE (DECREASE) IN NET ASSETS:
  Operations:
    Net investment income.......................................................    $ 2,973,403      $ 3,672,205
    Net realized gain (loss)....................................................      1,186,265       (1,403,098)
    Net change in unrealized appreciation/depreciation..........................      6,051,315       (6,521,213)
                                                                                  ---------------  ---------------
        Net increase (decrease).................................................     10,210,983       (4,252,106)
                                                                                  ---------------  ---------------
  Dividends and distributions from:
    Net investment income.......................................................     (3,087,769)      (3,431,721)
    Net realized gain...........................................................        --              (330,646)
                                                                                  ---------------  ---------------
        Total...................................................................     (3,087,769)      (3,762,367)
                                                                                  ---------------  ---------------
  Net decrease from transactions in shares of beneficial interest...............     (4,827,749)      (1,019,966)
                                                                                  ---------------  ---------------
        Total increase (decrease)...............................................      2,295,465       (9,034,439)
NET ASSETS:
  Beginning of period...........................................................     55,335,130       64,369,569
                                                                                  ---------------  ---------------
  END OF PERIOD (including undistributed net investment income of $450,139 and
   $564,232, respectively)......................................................    $57,630,595      $55,335,130
                                                                                  ---------------  ---------------
                                                                                  ---------------  ---------------
</TABLE>
    
 
                       SEE NOTES TO FINANCIAL STATEMENTS
 
                                       48
<PAGE>
TCW/DW INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
 
1.   ORGANIZATION  AND ACCOUNTING POLICIES--TCW/DW  Income and  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 to generate high total return by providing a high level
of current income and the potential for capital appreciation. The Fund seeks  to
achieve  its objective by investing in bonds or preferred stock convertible into
common stock, other fixed income  securities, common stocks and U.S.  Government
securities. The Fund was organized as a Massachusetts business trust on November
23, 1992 and commenced operations on March 31, 1993.
 
    The  preparation  of  financial  statements  in  accordance  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect  the reported  amounts and  disclosures. Actual results
could differ from  those estimates. The  following is a  summary of  significant
accounting policies:
 
   
    A.  VALUATION OF INVESTMENTS--(1) an equity security listed or traded on the
    New  York or American 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 Adviser); (2)
    all  other portfolio securities for which over-the-counter market quotations
    are readily available are valued at the latest available bid price prior  to
    the time of valuation; (3) when market quotations are not readily available,
    including  circumstances under  which it is  determined by  the Adviser that
    sale or  bid  prices  are  not reflective  of  a  security's  market  value,
    portfolio  securities are valued  at their fair value  as determined in good
    faith under procedures established by  and under the general supervision  of
    the  Trustees (valuation of debt securities  for which market quotations are
    not readily available may be based upon current market prices of  securities
    which are comparable in coupon, rating and maturity or an appropriate matrix
    utilizing  similar factors);  (4) portfolio securities  may be  valued by an
    outside pricing  service  approved  by the  Trustees.  The  pricing  service
    utilizes a matrix system incorporating security quality, maturity and coupon
    as  the evaluation model  parameters, and/or research  and evaluation by its
    staff,  including  review  of  broker-dealer  market  price  quotations,  if
    available,  in determining  what it  believes is  the fair  valuation of the
    portfolio securities valued by such pricing service; and (5) 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. Discounts are accreted over  the life of the respective  securities.
    Dividend  income  and other  distributions are  recorded on  the ex-dividend
    date. Interest income is accrued daily.
 
    C.  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.
 
                                       49
<PAGE>
TCW/DW INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
 
    D.  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.
 
   
    E.  ORGANIZATIONAL EXPENSES--Dean Witter InterCapital Inc., an affiliate  of
    Dean  Witter Services Company Inc.  (the "Manager"), paid the organizational
    expenses of  the Fund  in  the amount  of  approximately $206,000  of  which
    $200,000 has been reimbursed. Such expenses have been deferred and are being
    amortized on the straight-line method over a period not to exceed five years
    from the commencement of operations.
    
 
2.   MANAGEMENT AGREEMENT--Pursuant  to a Management Agreement,  the Fund pays a
management fee, accrued  daily and  payable monthly, by  applying the  following
annual  rates to the net assets  of the Fund determined as  of the close of each
business day:  0.45% to  the portion  of  daily net  assets not  exceeding  $500
million and 0.42% to the portion of the daily net assets exceeding $500 million.
 
    Under  the terms of the Management  Agreement, the Manager maintains certain
of the Fund's books and records and furnishes, at its own expense, office space,
facilities, equipment, clerical, bookkeeping and certain legal services and pays
the salaries of all personnel, including officers of the Fund who are  employees
of  the Manager. The  Manager also bears  the cost of  telephone services, heat,
light, power and other utilities provided to the Fund.
 
3.  INVESTMENT ADVISORY AGREEMENT--Pursuant to an Investment Advisory  Agreement
with  TCW Funds Management, Inc. (the "Adviser"), the Fund pays an advisory fee,
accrued daily and payable monthly, by applying the following annual rates to the
net assets of the Fund determined as of the close of each business day: 0.30% to
the portion of  daily net assets  not exceeding  $500 million and  0.28% to  the
portion of the daily net assets exceeding $500 million.
 
    Under  the terms of the Investment Advisory Agreement, the Fund has retained
the Adviser  to invest  the  Fund's assets,  including  placing orders  for  the
purchase  and sale  of portfolio securities.  The Adviser  obtains and evaluates
such information and  advice relating  to the economy,  securities markets,  and
specific  securities as it considers necessary  or useful to continuously manage
the assets of the Fund in a manner consistent with its investment objective.  In
addition,  the Adviser pays the salaries of all personnel, including officers of
the Fund, who are employees of the Adviser.
 
                                       50
<PAGE>
TCW/DW INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
 
4.  PLAN OF DISTRIBUTION--Dean Witter Distributors Inc. (the "Distributor"),  an
affiliate  of  the Manager,  is the  distributor  of the  Fund's shares  and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under
the Act, finances certain expenses in connection therewith.
 
    Under the Plan,  the Distributor bears  the expense of  all promotional  and
distribution  related activities on behalf of the Fund, except for expenses that
the  Trustees  determine  to  reimburse,  as  described  below.  The   following
activities and services may be provided by the Distributor, Dean Witter Reynolds
Inc.  ("DWR"), an affiliate  of the Distributor and  Manager, its affiliates and
any other  selected broker-dealers  under  the Plan:  (1) compensation  to,  and
expenses  of,  DWR's  account  executives  and  others,  including  overhead and
telephone expenses; (2)  sales incentives and  bonuses to sales  representatives
and  to marketing  personnel in  connection with  promoting sales  of the Fund's
shares; (3) expenses incurred in connection  with promoting sales of the  Fund's
shares;  (4)  preparing and  distributing  sales literature;  and  (5) providing
advertising and promotional activities,  including direct mail solicitation  and
television, radio, newspaper, magazine and other media advertisements.
 
    The  Fund is authorized  to reimburse the  Distributor for specific expenses
the Distributor incurs or  plans to incur in  promoting the distribution of  the
Fund's  shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to  a payment at the annual  rate of 0.75% of the  Fund's
average  daily net assets during the month. Expenses incurred by the Distributor
pursuant to the  Plan in  any fiscal  year will not  be reimbursed  by the  Fund
through  payments  accrued in  any subsequent  fiscal year.  For the  year ended
January 31, 1996, the distribution fee was accrued at the annual rate of 0.75%.
 
5.    SECURITY  TRANSACTIONS  AND  TRANSACTIONS  WITH  AFFILIATES--The  cost  of
purchases  and proceeds from sales of portfolio securities, excluding short-term
investments, for  the year  ended January  31, 1996  aggregated $41,605,182  and
$46,771,195, respectively.
 
    Dean  Witter Trust Company, an affiliate  of the Manager and Distributor, is
the Fund's transfer agent. At January 31, 1996, the Fund had transfer agent fees
and expenses payable of approximately $5,000.
 
6.  SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial interest
were as follows:
 
<TABLE>
<CAPTION>
                                                             FOR THE YEAR ENDED           FOR THE YEAR ENDED
                                                              JANUARY 31, 1996             JANUARY 31, 1995
                                                         ---------------------------  ---------------------------
                                                           SHARES         AMOUNT        SHARES         AMOUNT
                                                         -----------  --------------  -----------  --------------
<S>                                                      <C>          <C>             <C>          <C>
Sold...................................................    1,236,686  $   13,236,674    3,780,123  $   39,576,992
Reinvestment of dividends and distributions............      224,382       2,370,537      293,254       2,964,507
                                                         -----------  --------------  -----------  --------------
                                                           1,461,068      15,607,211    4,073,377      42,541,499
Repurchased............................................   (1,948,190)    (20,434,960)  (4,268,571)    (43,561,465)
                                                         -----------  --------------  -----------  --------------
Net decrease...........................................     (487,122) $   (4,827,749)    (195,194) $   (1,019,966)
                                                         -----------  --------------  -----------  --------------
                                                         -----------  --------------  -----------  --------------
</TABLE>
 
   
7.  FEDERAL INCOME TAX STATUS--At January  31, 1996, the Fund had a net  capital
loss carryover of approximately $212,000 which will be available through January
31,  2003 to offset future capital gains  to the extent provided by regulations.
During the year ended January 31, 1996, the Fund utilized approximately $769,000
of its net capital loss carryover.
    
 
                                       51
<PAGE>
TCW/DW INCOME AND 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
                                                                                                    MARCH 31,
                                                                   FOR THE YEAR    FOR THE YEAR       1993*
                                                                      ENDED           ENDED          THROUGH
                                                                   JANUARY 31,     JANUARY 31,     JANUARY 31,
                                                                       1996            1995            1994
                                                                  --------------  --------------  --------------
<S>                                                               <C>             <C>             <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............................    $     9.77      $    10.98      $    10.00
                                                                       -------         -------         -------
Net investment income...........................................          0.59            0.59            0.45
Net realized and unrealized gain (loss).........................          1.37           (1.20)           1.02
                                                                       -------         -------         -------
Total from investment operations................................          1.96           (0.61)           1.47
                                                                       -------         -------         -------
Less dividends and distributions from:
  Net investment income.........................................         (0.60)          (0.55)          (0.39)
  Net realized gain.............................................        --               (0.05)          (0.10)
                                                                       -------         -------         -------
Total dividends and distributions...............................         (0.60)          (0.60)          (0.49)
                                                                       -------         -------         -------
Net asset value, end of period..................................    $    11.13      $     9.77      $    10.98
                                                                       -------         -------         -------
                                                                       -------         -------         -------
 
TOTAL INVESTMENT RETURN.........................................         20.52%          (5.59)%         15.06  %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................................................          2.21%           2.04%           1.57  %(2)(3)
Net investment income...........................................          5.41%           5.83%           5.62  %(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.........................  $     57,631    $     55,335    $     64,370
Portfolio turnover rate.........................................            79%             88%             84  %(1)
</TABLE>
 
- --------------
 * COMMENCEMENT OF OPERATIONS.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL EXPENSES THAT WERE REIMBURSED OR WAIVED BY THE
    MANAGER AND INVESTMENT ADVISER, THE ABOVE ANNUALIZED EXPENSE AND NET
    INVESTMENT INCOME RATIOS WOULD HAVE BEEN 2.00% AND 5.18%, RESPECTIVELY.
 
                       SEE NOTES TO FINANCIAL STATEMENTS
 
                                       52
<PAGE>

                         TCW/DW INCOME AND GROWTH FUND

                            PART C OTHER INFORMATION


Item 24.  Financial Statements and Exhibits


   (a)  FINANCIAL STATEMENTS

     (1)  Financial statements and schedules, included
     in Prospectus (Part A):                                            Page in
                                                                      Prospectus
                                                                      ----------

     Financial Highlights for the period March 31, 1993
     through January 31, 1994, and for the years ended
     January 31, 1995 and 1996...........................                   5


     (2)  Financial statements included in the Statement of
     Additional Information (Part B):                                   Page in
                                                                           SAI
                                                                           ---

     Portfolio of Investments at January 31, 1996........                  41

     Statement of assets and liabilities at
     January 31, 1996....................................                  48

     Statement of operations for the year ended
     January 31, 1996....................................                  48

     Statement of changes in net assets for the years
     ended January 31, 1995 and 1996.....................                  48

     Notes to Financial Statements.......................                  49

     Financial Highlights for the period March 31, 1993
     through January 31, 1994, and for the years ended
     January 31, 1995 and 1996...........................                  53

     (3) Financial statements included in Part C:

     None


   (b)  EXHIBITS:

1.    --    Declaration of Trust*

2.    --    Amended and Restated By-Laws*

5.    --    Form of Investment Advisory Agreement between the Registrant
            and TCW Funds Management Inc.*
<PAGE>

6.    (a)   Form of Distribution Agreement between the Registrant and
            and Dean Witter Distributors Inc.*

      (b)   Forms of Selected Dealers Agreement*

8.    (a)   Form of Custody Agreement between Registrant and The Bank
            of New York*

      (b)   Form of Amended and Restated Transfer Agency and Service
            Agreement between Registrant and Dean Witter Trust Company*

9.     --   Form of Management Agreement between Registrant and Dean
            Witter Services Company Inc.

11.    --   Consent of Independent Accountants

15.    --   Form of Amended and Restated Plan of Distribution pursuant
            to Rule 12b-1

16.    --   Schedule for Computation of Performance Quotations

27.    --   Financial Data Schedule

Other. --   Powers of Attorney*

- -------------------------
*Previously filed; re-filed via EDGAR with this Amendment to the
Registration Statement. All other exhibits previously filed and incorporated by
reference.


Item 25.  PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

          None

Item 26.  NUMBER OF HOLDERS OF SECURITIES.

          (1)                        (2)
                                     Number of Record Holders
     Title of Class                   at February 29, 1996
     --------------                  ------------------------

Shares of Beneficial Interest              4,010

Item 27.  INDEMNIFICATION.

     Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the Registrant's
trustees, officers, employees and agents is permitted if it is determined that
they acted under the belief that their actions were in or not opposed to the
best interest of the Registrant, and, with respect to any criminal proceeding,
they had reasonable cause to believe their conduct was


                                        2
<PAGE>

not unlawful.  In addition, indemnification is permitted only if it is
determined that the actions in question did not render them liable by reason of
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of reckless disregard of their obligations and duties to the
Registrant.  Trustees, officers, employees and agents will be indemnified for
the expense of litigation if it is determined that they are entitled to
indemnification against any liability established in such litigation.  The
Registrant may also advance money for these expenses provided that they give
their undertakings to repay the Registrant unless their conduct is later
determined to permit indemnification.

          Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Management and Advisory Agreements, none of the
Manager, the Adviser or any trustee, officer, employee or agent of the
Registrant shall be liable for any action or failure to act, except in the case
of bad faith, willful misfeasance, gross negligence or reckless disregard of
duties to the Registrant.

          Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.  In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer, or
controlling person of the Registrant in connection with the successful defense
of any action, suit or proceeding) is asserted against the Registrant by such
trustee, officer or controlling person in connection with the shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act, and will be governed by the final adjudication
of such issue.

          The Registrant hereby undertakes that it will apply the
indemnification provision of its by-laws in a manner consistent with Release
11330 of the Securities and Exchange Commission under the Investment Company Act
of 1940, so long as the interpretation of Sections 17(h) and 17(i) of such Act
remains in effect.

          Registrant, in conjunction with the Manager, Registrant's Trustees,
and other registered investment management companies managed by the Manager,
maintains insurance on behalf of any person who is or was a Trustee, officer,
employee, or agent of Registrant, or who is or was serving at the request of
Registrant as a trustee, director, officer, employee or agent of another trust
or corporation, against any liability asserted against him and incurred by him
or arising out of his position.  However, in no event will Registrant maintain
insurance to indemnify any such person for any act for which Registrant itself
is not permitted to indemnify him.


                                        3
<PAGE>

Item 28.  BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

          The TCW Funds Management, Inc. (the "Adviser") is a 100% owned
subsidiary of The TCW Group, Inc., a Nevada corporation.  The Adviser presently
serves as investment adviser to:  (1) TCW Funds, Inc., a diversified open-end
management investment company,  (2) TCW Convertible Securities Fund, Inc., a
diversified closed-end management investment company; (3) TCW/DW Core Equity
Trust, an open-end, non-diversified management company, (4) TCW/DW North
American Government Income Trust, an open-end, non-diversified management
company, (5) TCW/DW Income and Growth Fund, an open-end, non-diversified
management company, (6) TCW/DW Latin American Growth Fund, an open-end non-
diversified management company, (7) TCW/DW Small Cap Growth Fund, an open-end
non-diversified management company, (8) TCW/DW Term Trust 2000, a closed-end,
diversified management company, (9) TCW/DW Term Trust 2002, a closed-end
diversified management company, (10) TCW/DW Term Trust 2003, a closed-end
diversified management company, (11) TCW/DW Balanced Fund, an open-end,
diversified management company, (12) TCW/DW Emerging Markets Opportunities
Trust, a closed-end, non-diversified management company, (13) TCW/DW Total
Return Trust, an open-end non-diversified management investment company, and
(14) TCW/DW Mid-Cap Equity Trust, an open-end, diversified management investment
company.  The Adviser also serves as investment adviser or sub-adviser to other
investment companies, including foreign investment companies. The list required
by this Item 28 of the officers and directors of the Adviser together with
information as to any other business, profession, vocation or employment of a
substantive nature engaged in by the Adviser and such officers and directors
during the past two years, is incorporated by reference to Form ADV (File No.
801-29075) filed by the Adviser pursuant to the Investment Advisers Act.

Item 29.  PRINCIPAL UNDERWRITERS.

   (a)  Dean Witter Distributors Inc. ("Distributors"), a Delaware corporation,
is the principal underwriter of the Registrant.  Distributors is also the
principal underwriter of the following investment companies:

 (1) Dean Witter Liquid Asset Fund Inc.
 (2) Dean Witter Tax-Free Daily Income Trust
 (3) Dean Witter California Tax-Free Daily Income Trust
 (4) Dean Witter Retirement Series
 (5) Dean Witter Dividend Growth Securities Inc.
 (6) Dean Witter Natural Resource Development Securities Inc.
 (7) Dean Witter World Wide Investment Trust
 (8) Dean Witter Capital Growth Securities
 (9) Dean Witter Convertible Securities Trust
(10) Active Assets Tax-Free Trust
(11) Active Assets Money Trust
(12) Active Assets California Tax-Free Trust
(13) Active Assets Government Securities Trust
(14) Dean Witter Global Utilities Fund
(15) Dean Witter Federal Securities Trust


                                        4
<PAGE>

(16) Dean Witter U.S. Government Securities Trust
(17) Dean Witter High Yield Securities Inc.
(18) Dean Witter New York Tax-Free Income Fund
(19) Dean Witter Tax-Exempt Securities Trust
(20) Dean Witter California Tax-Free Income Fund
(21) Dean Witter Limited Term Municipal Trust
(22) Dean Witter World Wide Income Trust
(23) Dean Witter Utilities Fund
(24) Dean Witter Strategist Fund
(25) Dean Witter New York Municipal Money Market Trust
(26) Dean Witter Intermediate Income Securities
(27) Prime Income Trust
(28) Dean Witter European Growth Fund Inc.
(29) Dean Witter Developing Growth Securities Trust
(30) Dean Witter Precious Metals and Minerals Trust
(31) Dean Witter Pacific Growth Fund Inc.
(32) Dean Witter Multi-State Municipal Series Trust
(33) Dean Witter Premier Income Trust
(34) Dean Witter Short-Term U.S. Treasury Trust
(35) Dean Witter Diversified Income Trust
(36) Dean Witter Health Sciences Trust
(37) Dean Witter Global Dividend Growth Securities
(38) Dean Witter American Value Fund
(39) Dean Witter U.S. Government Money Market Trust
(40) Dean Witter Global Short-Term Income Fund Inc.
(41) Dean Witter Variable Investment Series
(42) Dean Witter Value-Added Market Series
(43) Dean Witter Short-Term Bond Fund
(44) Dean Witter National Municipal Trust
(45) Dean Witter High Income Securities
(46) Dean Witter International SmallCap Fund
(47) Dean Witter Hawaii Municipal Trust
(48) Dean Witter Balanced Growth Fund
(49) Dean Witter Balanced Income Fund
(50) Dean Witter Intermediate Term U.S. Treasury Trust
(51) Dean Witter Global Asset Allocation Fund
(52) Dean Witter Mid-Cap Growth Fund
(53) Dean Witter Capital Appreciation Fund
(54) Dean Witter Hawaii Municipal Trust
(55) Dean Witter Intermediate Term U.S. Treasury Trust
(56) Dean Witter Information Fund
 (1) TCW/DW Core Equity Trust
 (2) TCW/DW North American Government Income Trust
 (3) TCW/DW Latin American Growth Fund
 (4) TCW/DW Income and Growth Fund
 (5) TCW/DW Small Cap Growth Fund
 (6) TCW/DW Balanced Fund
 (7) TCW/DW Total Return Trust
 (8) TCW/DW Mid-Cap Equity Trust


                                        5
<PAGE>

(b)  The following information is given regarding directors and officers of Dean
Witter Distributors Inc. ("Distributors").  The principal address of
Distributors is Two World Trade Center, New York, New York 10048.

                                    Positions and
                                    Office with Distributors
Name                                and the Registrant
- ----                                ------------------

Charles A. Fiumefreddo              Chairman, Chief Executive
                                    Officer and Director of
                                    Distributors and Chairman,
                                    Chief Executive Officer
                                    and Trustee of the
                                    Registrant.

Philip J. Purcell                   Director of Distributors.

Richard M. DeMartini                Director of Distributors.

James F. Higgins                    Director of Distributors.

Thomas C. Schneider                 Executive Vice President, Chief
                                    Financial Officer and Director
                                    of Distributors.

Christine A. Edwards                Executive Vice President,
                                    Secretary, Chief Legal Officer
                                    and Director of Distributors.

Robert Scanlan                      Executive Vice President of
                                    Distributors and Vice President
                                    of the Registrant.

David A. Hughey                     Executive Vice President and
                                    Chief Administrative Officer
                                    of Distributors and Vice
                                    President of the Registrant.

Robert S. Giambrone                 Senior Vice President of
                                    Distributors and Vice President
                                    of the Registrant.

Sheldon Curtis                      Senior Vice President,
                                    Assistant General Counsel and
                                    Assistant Secretary of
                                    Distributors and Vice President,
                                    Secretary and General Counsel of
                                    the Registrant.


                                        6
<PAGE>

                                     Positions and
                                     Office with Distributors
Name                                 and the Registrant
- ----                                 ------------------

Frederick K. Kubler                  Senior Vice President,
                                     Assistant Secretary and Chief
                                     Compliance Officer of
                                     Distributors.

Michael T. Gregg                     Vice President and Assistant
                                     Secretary of Distributors.

Edward C. Oelsner III                Vice President of Distributors.

Samuel Wolcott III                   Vice President of Distributors.

Thomas F. Caloia                     Assistant Treasurer of
                                     Distributors and Treasurer of
                                     the Registrant.

Michael Interrante                   Assistant Treasurer of
                                     Distributors.


Item 30.    LOCATION OF ACCOUNTS AND RECORDS

       All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained by the Manager at its offices, except records relating to holders of
shares issued by the Registrant, which are maintained by the Registrant's
Transfer Agent, at its place of business as shown in the prospectus.


Item 31.    MANAGEMENT SERVICES

        Registrant is not a party to any such management-related service
contract.

Item 32.    UNDERTAKINGS

        Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.


                                        7
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York and State of
New York on the 26th day of March, 1996.

                                     TCW/DW INCOME AND GROWTH FUND

                                       By  /s/Sheldon Curtis
                                           -------------------------
                                              Sheldon Curtis
                                           Vice President and Secretary

     Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 4 has been signed below by the following persons in the
capacities and on the dates indicated.

     Signatures                          Title                     Date
     ----------                          -----                     ----
(1) Principal Executive Officer         President, Chief
                                        Executive Officer,
                                        Trustee and Chairman
By   /s/Charles A. Fiumefreddo                                    03/26/96
    ---------------------------
        Charles A. Fiumefreddo

(2) Principal Financial Officer         Treasurer and Principal
                                        Accounting Officer

By   /s/Thomas F. Caloia
    ---------------------------
        Thomas F. Caloia                                          03/26/96


(3) Majority of the Trustees            Trustee

    Charles A. Fiumefreddo (Chairman)   Richard M. DeMartini
    Thomas E. Larkin, Jr.


By   /s/Sheldon Curtis                                           03/26/96
    ---------------------------
        Sheldon Curtis
        Attorney-in-Fact

     John C. Argue            John L. Schroeder
     John R. Haire            Marc I. Stern
     Paul Kolton
     Manuel H. Johnson
     Michael E. Nugent

By   /s/David M. Butowsky                                       03/26/96
    ---------------------------
     David M. Butowsky
     Attorney-in-Fact

<PAGE>

                           TCW/DW INCOME AND GROWTH FUND
                                  EXHIBIT INDEX


Exhibit No.                  Description
- -----------                  -----------

1.     --   Declaration of Trust*

2.     --   Amended and Restated By-Laws*

5.     --   Form of Investment Advisory Agreement between the
            Registrant and TCW Funds Management Inc.*

6.    (a)   Form of Distribution Agreement between the Registrant
            and Dean Witter Distributors Inc.*

      (b)   Forms of Selected Dealers Agreement*

8.    (a)   Form of Custody Agreement between Registrant and The
            Bank of New York*

      (b)   Form of Amended and Restated Transfer Agency and
            Service Agreement between Registrant and Dean Witter
            Trust Company*

9.     --   Form of Management Agreement between Registrant and
            Dean Witter Services Company Inc.

11.    --   Consent of Independent Accountants

15.    --   Form of Amended and Restated Plan of Distribution
            pursuant to Rule 12b-1

16.    --   Schedule for Computation of Performance Quotations

27.    --   Financial Data Schedule

Other. --   Powers of Attorney*

- -----------------------
*Previously filed; re-filed via EDGAR with this Amendment to the
Registration Statement. All other exhibits previously filed and incorporated by
reference.


 <PAGE>



                         TCW/DW INCOME AND GROWTH FUND


                           DECLARATION OF TRUST


                            DATED:  NOVEMBER 20, 1992

<PAGE>

                               TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

     ARTICLE I -- NAME AND DEFINITIONS....................................   2

     Section 1.1    Name..................................................   2
     Section 1.2    Definitions...........................................   2


     ARTICLE II -- TRUSTEES...............................................   3

     Section 2.1    Number of Trustees....................................   3
     Section 2.2    Election and Term.....................................   3
     Section 2.3    Resignation and Removal...............................   3
     Section 2.4    Vacancies.............................................   3
     Section 2.5    Delegation of Power to Other Trustees.................   4


     ARTICLE III -- POWERS OF TRUSTEES....................................   4

     Section 3.1    General...............................................   4
     Section 3.2    Investments...........................................   4
     Section 3.3    Legal Title...........................................   5
     Section 3.4    Issuance and Repurchase of Securities.................   5
     Section 3.5    Borrowing Money; Lending Trust Assets.................   5
     Section 3.6    Delegation; Committees................................   5
     Section 3.7    Collection and Payment................................   5
     Section 3.8    Expenses..............................................   5
     Section 3.9    Manner of Acting; By-Laws.............................   6
     Section 3.10   Miscellaneous Powers..................................   6
     Section 3.11   Principal Transactions................................   6
     Section 3.12   Litigation............................................   6


     ARTICLE IV -- INVESTMENT ADVISER, DISTRIBUTOR, CUSTODIAN AND
                   TRANSFER AGENT.........................................   7

     Section 4.1    Investment Adviser....................................   7
     Section 4.2    Administrative Services...............................   7
     Section 4.3    Distributor...........................................   7
     Section 4.4    Transfer Agent........................................   7
     Section 4.5    Custodian.............................................   7
     Section 4.6    Parties to Contract...................................   7

     ARTICLE V -- LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
                  TRUSTEES AND OTHERS.....................................   8

     Section 5.1.   No Personal Liability of Shareholders, Trustees, etc..   8
     Section 5.2    Non-Liability of Trustees, etc........................   8
     Section 5.3    Indemnification.......................................   8
     Section 5.4    No Bond Required of Trustees..........................   9
     Section 5.5    No Duty of Investigation; Notice in Trust
                    Instruments, etc......................................   9
     Section 5.6    Reliance on Experts, etc..............................   9

 
                                      i

<PAGE>

                                                                           PAGE
                                                                           ----
     ARTICLE VI -- SHARES OF BENEFICIAL INTEREST..........................   9

     Section 6.1    Beneficial Interest...................................   9
     Section 6.2    Rights of Shareholders................................   9
     Section 6.3    Trust Only............................................  10
     Section 6.4    Issuance of Shares....................................  10
     Section 6.5    Register of Shares....................................  10
     Section 6.6    Transfer of Shares....................................  10
     Section 6.7    Notices...............................................  11
     Section 6.8    Voting Powers.........................................  11
     Section 6.9    Series or Classes of Shares...........................  11

     ARTICLE VII -- REDEMPTIONS...........................................  13

     Section 7.1    Redemptions...........................................  13
     Section 7.2    Redemption at the Option of the Trust.................  13
     Section 7.3    Effect of Suspension of Determination of 
                    Net Asset Value.......................................  14
     Section 7.4    Suspension of Right of Redemption.....................  14

     ARTICLE VIII -- DETERMINATION OF NET ASSET VALUE, NET INCOME AND
                     DISTRIBUTIONS........................................  14

     Section 8.1    Net Asset Value.......................................  14
     Section 8.2    Distributions to Shareholders.........................  15
     Section 8.3    Determination of Net Income...........................  15
     Section 8.4    Power to Modify Foregoing Procedures..................  15

     ARTICLE IX -- DURATION; TERMINATION OF TRUST; AMENDMENT; 
                   MERGERS, ETC...........................................  15

     Section 9.1    Duration..............................................  15
     Section 9.2    Termination of Trust or a Series......................  16
     Section 9.3    Amendment Procedure...................................  16
     Section 9.4    Merger, Consolidation and Sale of Assets..............  17
     Section 9.5    Incorporation.........................................  17

     ARTICLE X -- REPORTS TO SHAREHOLDERS.................................  17

     ARTICLE XI -- MISCELLANEOUS..........................................  18

     Section 11.1   Filing................................................  18
     Section 11.2   Governing Law.........................................  18
     Section 11.3   Resident Agent........................................  18
     Section 11.4   Counterparts..........................................  18
     Section 11.5   Reliance by Third Parties.............................  18
     Section 11.6   Provisions in Conflict with Law or Regulations........  18
     Section 11.7   Use of the Name "Dean Witter".........................  18
     Section 11.8   Principal Place of Business...........................  19

     SIGNATURE PAGE.......................................................  20


                                       -ii-

<PAGE>

                              DECLARATION OF TRUST
                                       OF
                            TCW/DW INCOME AND GROWTH FUND


                              DATED: NOVEMBER 20, 1992



     THE DECLARATION OF TRUST of TCW/DW Income and Growth Fund is made
the 20th day of November, 1992 by the parties signatory hereto, as trustees 
(such persons, so long as they shall continue in office in accordance with the 
terms of this Declaration of Trust, and all other persons who at the time in
question have been duly elected or appointed as trustees in accordance with the
provisions of this Declaration of Trust and are then in office, being
hereinafter called the "Trustees").


                              W I T N E S S E T H:

          WHEREAS, the Trustees desire to form a trust fund under the laws of
Massachusetts for the investment and reinvestment of funds contributed thereto;
and

          WHEREAS, it is provided that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest as hereinafter
provided;

          NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust, all money and property contributed to the trust fund to manage and
dispose of the same for the benefit of the holders from time to time of the
shares of beneficial interest issued hereunder and subject to the provisions
hereof, to wit:


                                      1
<PAGE>

                                    ARTICLE I

                              NAME AND DEFINITIONS

          Section 1.1  NAME.  The name of the trust created hereby is the 
"TCW/DW Income and Growth Fund," and so far as may be practicable the Trustees 
shall conduct the Trust's activities, execute all documents and sue or be sued 
under that name, which name (and the word "Trust" wherever herein used) shall 
refer to the Trustees as Trustees, and not as individuals, or personally, and 
shall not refer to the officers, agents, employees or Shareholders of the Trust.
Should the Trustees determine that the use of such name is not advisable, they 
may use such other name for the Trust as they deem proper and the Trust may 
hold its property and conduct its activities under such other name.

          Section 1.2  DEFINITIONS.  Wherever they are used herein, the
following terms have the following respective meanings:

          (a)  "BY-LAWS" means the By-Laws referred to in Section 3.9 hereof, as
from time to time amended.

          (b)  the terms "COMMISSION," "AFFILIATED PERSON" and "INTERESTED
PERSON," have the meanings given them in the 1940 Act.

          (c)  "DECLARATION" means this Declaration of Trust as amended from
time to time.  Reference in this Declaration of Trust to "DECLARATION,"
"HEREOF," "HEREIN" and "HEREUNDER" shall be deemed to refer to this  Declaration
rather than the article or section in which such words appear.

          (d)  "DISTRIBUTOR" means the party, other than the Trust, to a
contract described in Section 4.3 hereof.

          (e)  "FUNDAMENTAL POLICIES" shall mean the investment policies and
restrictions set forth in the Prospectus and Statement of Additional 
Information and designated as fundamental policies therein.

          (f)  "INVESTMENT ADVISER" means any party, other than the Trust, to a
contract described in Section 4.1 hereof.

          (g)  "MAJORITY SHAREHOLDER VOTE" means the vote of the holders of a
majority of Shares, which shall consist of: (i) a majority of Shares represented
in person or by proxy and entitled to vote at a meeting of Shareholders
at which a quorum, as determined in accordance with the By-Laws, is present;
(ii) a majority of Shares issued and outstanding and entitled to vote when
action is taken by written consent of Shareholders; and (iii) a "majority of the
outstanding voting securities," as the phrase is defined in the 1940 Act, when
any action is required by the 1940 Act by such majority as so defined.

          (h)  "1940 ACT" means the Investment Company Act of 1940 and the rules
and regulations thereunder as amended from time to time.

          (i)  "PERSON" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.

          (j)  "PROSPECTUS" means the Prospectus and Statement of Additional 
Information constituting parts of the Registration Statement of the Trust under
the Securities Act of 1933 as such Prospectus and Statement of Additional 
Information may be amended or supplemented and filed with the Commission from
time to time.

          (k)   "SERIES" means one of the separately managed components of the
Trust (or, if the Trust shall have only one such component, then that one) as
set forth in Section 6.1 hereof or as may be established and designated from
time to time by the Trustees pursuant to that section.

          (l)  "SHAREHOLDER" means a record owner of outstanding Shares.

                                      2

<PAGE>

          (m)  "SHARES" means the units of interest into which the beneficial
interest in the Trust shall be divided from time to time, including the shares
of any and all series or classes which may be established by the Trustees, and
includes fractions of Shares as well as whole Shares.

          (n)  "TRANSFER AGENT" means the party, other than the Trust, to the
contract described in Section 4.4 hereof.

          (o)  "TRUST" means the Dean Witter Value-Added Index Series.

          (p)  "TRUST PROPERTY" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.

          (q)  "TRUSTEES" means the persons who have signed the Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who may from time to time be duly elected or appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
reference herein to a Trustee or the Trustees shall refer to such person or
persons in their capacity as trustees hereunder.

                                   ARTICLE II

                                    TRUSTEES

          SECTION 2.1. NUMBER OF TRUSTEES.  The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than three (3) nor more than fifteen (15).

          SECTION 2.2. ELECTION AND TERM.  The Trustees shall be elected by a
Majority Shareholder Vote at the first meeting of Shareholders following the
public offering of Shares of the Trust.  The Trustees shall have the power to
set and alter the terms of office of the Trustees, and they may at any time
lengthen or lessen their own terms or make their terms of unlimited duration,
subject to the resignation and removal provisions of Section 2.3 hereof.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect their own
successors and may, pursuant to Section 2.4 hereof, appoint Trustees to fill
vacancies.  The Trustees shall adopt By-Laws not inconsistent with this
Declaration or any provision of law to provide for election of Trustees by
Shareholders at such time or times as the Trustees shall determine to be
necessary or advisable.

          SECTION 2.3.  RESIGNATION AND REMOVAL.  Any Trustee may resign his
trust (without need for prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
shall be effective upon such delivery, or at a later date according to the terms
of the instrument.  Any of the Trustees may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the number required
by Section 2.1 hereof) by the action of two-thirds of the remaining Trustees or
by the action of the Shareholders of record of not less than two-thirds of the
Shares outstanding (for purposes of determining the circumstances and procedures
under which such removal by the Shareholders may take place, the provisions of
Section 16(c) of the 1940 Act shall be applicable to the same extent as if the
Trust were subject to the provisions of that Section).  Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute
and deliver such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or the remaining Trustees any Trust Property
held in the name of the resigning or removed Trustee.  Upon the incapacity or 
death of any Trustee, his legal representative shall execute and deliver on his 
behalf such documents as the remaining Trustees shall require as provided in 
the preceding sentence.

           SECTION 2.4.  VACANCIES.  The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of the death, resignation,
removal, bankruptcy, adjudicated incompetence or other incapacity to perform the
duties of the office of a Trustee.  No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration.  In the case of an existing vacancy existing by reason of an
increase in the number of Trustees, subject to the provisions of Section 16(a)
of the 1940 Act, the remaining Trustees or, prior to the public offering of
Shares of the Trust, 

                                      3

<PAGE>

if only one Trustee shall then remain in office, the remaining Trustee, 
shall fill such vacancy by the appointment of such other person as they or 
he, in their or his discretion, shall see fit, made by a written instrument 
signed by a majority of the remaining Trustees or by the remaining Trustee, 
as the case may be.  Any such appointment shall not become effective, however,
until the person named in the written instrument of appointment shall have 
accepted in writing such appointment and agreed in writing to be bound by the 
terms of the Declaration.  An appointment of a Trustee may be made in 
anticipation of a vacancy to occur at a later date by reason of retirement, 
resignation or increase in the number of Trustees, provided that such 
appointment shall not become effective prior to such retirement, resignation or
increase in the number of Trustees.  Whenever a vacancy in the number of 
Trustees shall occur, until such vacancy is filled as provided in this Section 
2.4, the Trustees in office, regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties imposed upon
the Trustees by the Declaration.  A written instrument certifying the existence
of such vacancy signed by a majority of the Trustees shall be conclusive 
evidence of the existence of such vacancy.

          SECTION 2.5. DELEGATION OF POWER TO OTHER TRUSTEES.  Any Trustee may,
by power of attorney, delegate his power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided that in no
case shall less than two (2) Trustees personally exercise the powers granted to
the Trustees under the Declaration except as herein otherwise expressly
provided.

                                   ARTICLE III

                               POWERS OF TRUSTEES


          SECTION 3.1  GENERAL.  The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by the Declaration.  The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities wheresoever in the world they may be
located as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned.  Any determination as to what is in the interests of the Trust made
by the Trustees in good faith shall be conclusive. In construing the provisions
of the Declaration, the presumption shall be in favor of a grant of power to the
Trustees.

          The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power.  Such powers of the Trustees may be exercised
without order of or resort to any court.

          SECTION 3.2. INVESTMENTS.  The Trustees shall have the power to:

          (a)   conduct, operate and carry on the business of an investment
          company;

          (b)   subscribe for, invest in, reinvest in, purchase or otherwise
          acquire, hold, pledge, sell, assign, transfer, exchange, distribute,
          lend or otherwise deal in or dispose of negotiable or nonnegotiable 
          instruments, obligations, evidences of indebtedness, certificates of 
          deposit or indebtedness, commercial paper, repurchase agreements, 
          reverse repurchase agreements, options, commodities, commodity 
          futures contracts and related options, currencies, currency futures 
          and forward contracts, and other securities, investment contracts and 
          other instruments of any kind, including, without limitation, those 
          issued, guaranteed or sponsored by any and all Persons including, 
          without limitation, states, territories and possessions of the 
          United States, the District of Columbia and any of the political 
          subdivisions, agencies or instrumentalities thereof, and by the 
          United States Government or its agencies or instrumentalities, 
          foreign or international instrumentalities, or by any bank or savings
          institution, or by any corporation or organization organized under 
          the laws of the United States or of any state, territory or possession
          thereof, and of corporations or organizations organized under foreign 
          laws, or in "when issued" contracts for any such securities, or retain

                                      4

<PAGE>

          Trust assets in cash and from time to time change the investments of
          the assets of the Trust; and to exercise any and all rights, powers 
          and privileges of ownership or interest in respect of any and all such
          investments of every kind and description, including, without 
          limitation, the right to consent and otherwise act with respect 
          thereto, with power to designate one or more persons, firms, 
          associations or corporations to exercise any of said rights, powers
          and privileges in respect of any of said instruments; and the Trustees
          shall be deemed to have the foregoing powers with respect to any 
          additional securities in which the Trust may invest should the
          Fundamental Policies be amended.

The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust, nor shall the Trustees be limited by any
law limiting the investments which may be made by fiduciaries.

          SECTION 3.3. LEGAL TITLE.  Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine, provided
that the interest of the Trust therein is appropriately protected.  The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee.  Upon the
resignation, removal or death of a Trustee he shall automatically cease to have
any right, title or interest in any of the Trust Property, and the right, 
title and interest of such Trustee in the Trust Property shall vest 
automatically in the remaining Trustees.  Such vesting and cessation of title 
shall be effective whether or not conveyancing documents have been executed and
delivered.

          SECTION 3.4. ISSUANCE AND REPURCHASE OF SECURITIES.  The Trustees
shall have the power to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in
Shares and, subject to the provisions set forth in Articles VII, VIII and IX and
Section  6.9 hereof, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds or property of the Trust,
whether capital or surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts governing business
corporations.

          SECTION 3.5.  BORROWING MONEY; LENDING TRUST ASSETS.  Subject to the
Fundamental Policies, the Trustees shall have power to borrow money or otherwise
obtain credit and to secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the Trust, to endorse, guarantee, or
undertake the performance of any obligation, contract or engagement of any other
Person and to lend Trust assets.

          SECTION 3.6.  DELEGATION; COMMITTEES.  The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Trustees or otherwise as the Trustees may deem expedient.

          SECTION 3.7.  COLLECTION AND PAYMENT.  Subject to Section 6.9 hereof, 
the Trustees shall have power to collect all property due to the Trust; to pay 
all claims, including taxes, against the Trust Property; to prosecute, defend, 
compromise or abandon any claims relating to the Trust Property; to foreclose 
any security interest securing any obligations, by virtue of which any property 
is owed to the Trust; and to enter into releases, agreements and other 
instruments.

          SECTION 3.8.  EXPENSES.  Subject to Section 6.9 hereof, the Trustees 
shall have the power to incur and pay any expenses which in the opinion of the 
Trustees are necessary or incidental to carry out any of the purposes of the 
Declaration, and to pay reasonable compensation from the funds of the Trust to 
themselves as Trustees.  The Trustees shall fix the compensation of all 
officers, employees and Trustees.

          SECTION 3.9.  MANNER OF ACTING; BY-LAWS.  Except as otherwise provided
herein or in the By-Laws or by any provision of law, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), including any meeting held by 

                                      5

<PAGE>

means of a conference telephone circuit or similar communications equipment
by means of which all persons participating in the meeting can hear each 
other, or by written consents of all the Trustees.  The Trustees may adopt 
By-Laws not inconsistent with this Declaration to provide for the conduct of
the business of the Trust and may amend or repeal such By-Laws to the extent 
such power is not reserved to the Shareholders.

          SECTION 3.10.  MISCELLANEOUS POWERS.  The Trustees shall have the
power to: (a) employ or contract with such Persons as the Trustees may deem
desirable for the transaction of the business of the Trust or any Series 
thereof; (b) enter into joint ventures, partnerships and any other combinations 
or associations; (c) remove Trustees or fill vacancies in or add to their 
number, elect and remove such officers and appoint and terminate such agents 
or employees as they consider appropriate, and appoint from their own number, 
and terminate, any one or more committees which may exercise some or all of 
the power and authority of the Trustees as the Trustees may determine; (d) 
purchase, and pay for out of Trust Property or the property of the appropriate 
Series of the Trust, insurance policies insuring the Shareholders, Trustees, 
officers, employees, agents, investment advisers, distributors, selected dealers
or independent contractors of the Trust against all claims arising by reason of
holding any such position or by reason of any action taken or omitted to be
taken by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (e) establish pension, profit-sharing, Share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (f) to the extent permitted by law,
indemnify any person with whom the Trust or any Series thereof has dealings, 
including any Investment Adviser, Distributor, Transfer Agent and selected 
dealers, to such extent as the Trustees shall determine; (g) guarantee 
indebtedness or contractual obligations of others; (h) determine and change 
the fiscal year of the Trust or any Series thereof and the method by which its 
accounts shall be kept; and (i) adopt a seal for the Trust but the absence of 
such seal shall not impair the validity of any instrument executed on behalf of
the Trust.

          SECTION 3.11.  PRINCIPAL TRANSACTIONS.  Except in transactions
permitted by the 1940 Act or any rule or regulation thereunder, or any order of
exemption issued by the Commission, or effected to implement the provisions of
any agreement to which the Trust is a party, the Trustees shall not, on behalf
of the Trust, buy any securities (other than Shares) from or sell any securities
(other than Shares) to, or lend any assets of the Trust or any Series thereof 
to, any Trustee or officer of the Trust or any firm of which any such Trustee 
or officer is a member acting as principal, or have any such dealings with any 
Investment Adviser, Distributor or Transfer Agent or with any Affiliated Person 
of such Person; but the Trust or any Series thereof may employ any such Person, 
or firm or company in which such Person is an Interested Person, as broker, 
legal counsel, registrar, transfer agent, dividend disbursing agent or custodian
upon customary terms.

          SECTION 3.12.  LITIGATION.  The Trustees shall have the power to
engage in and to prosecute, defend, compromise, abandon, or adjust, by
arbitration, or otherwise, any actions, suits, proceedings, disputes, claims,
and demands relating to the Trust, and out of the assets of the Trust or any 
Series thereof to pay or to satisfy any debts, claims or expenses incurred in 
connection therewith, including those of litigation, and such power shall 
include without limitation the power of the Trustees or any appropriate 
committee thereof, in the exercise of their or its good faith business judgment,
to dismiss any action, suit, proceeding, dispute, claim, or demand, derivative 
or otherwise, brought by any person, including a Shareholder in its own name or 
the name of the Trust, whether or not the Trust or any of the Trustees may be 
named individually therein or the subject matter arises by reason of business 
for or on behalf of the Trust.


                                        6

<PAGE>

                                   ARTICLE IV

          INVESTMENT ADVISER, DISTRIBUTOR, CUSTODIAN AND TRANSFER AGENT


          SECTION 4.1.  INVESTMENT ADVISER.  Subject to approval by a Majority
Shareholder Vote, the Trustees may in their discretion from time to time enter
into one or more investment advisory or management contracts or, it the Trustees
establish multiple Series, separate investment advisory or management contracts 
with respect to one or more Series whereby the other party or parties to any 
such contracts shall undertake to furnish the Trust or such Series such 
management, investment advisory, administration, accounting, legal, statistical
and research facilities and services, promotional or marketing activities, and
such other facilities and services, if any, as the Trustees shall from time to
time consider desirable and all upon such terms and conditions as the Trustees
may in their discretion determine.  Notwithstanding any provisions of the
Declaration, the Trustees may authorize the Investment Advisers, or any of them,
under any such contracts (subject to such general or specific instructions as
the Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges of portfolio securities and other investments of the Trust on behalf
of the Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees).  Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.  The Trustees may, in their sole
discretion, call a meeting of Shareholders in order to submit to a vote of
Shareholders at such meeting the approval or continuance of any such investment
advisory or management contract.  If the Shareholders of any one or more of the
Series of the Trust should fail to approve any such investment advisory or 
management contract, the Investment Adviser may nonetheless serve as 
Investment Adviser with respect to any Series whose Shareholders approve such 
contract.

          SECTION 4.2.  ADMINISTRATIVE SERVICES.  The Trustees may in their
discretion from time to time contract for administrative personnel and services
whereby the other party shall agree to provide the Trustees or the Trust
administrative personnel and services to operate the Trust on a daily or other
basis, on such terms and conditions as the Trustees may in their discretion 
determine. Such services may be provided by one or more persons or entities.

          SECTION 4.3. DISTRIBUTOR.  The Trustees may in their discretion from
time to time enter into one or more contracts, providing for the sale of Shares 
to net the Trust or the applicable Series of the Trust not less than the net 
asset value per Share (as described in Article VIII hereof) and pursuant to 
which the Trust may either agree to sell the Shares to the other parties to the
contracts, or any of them, or appoint any such other party its sales agent for 
such Shares.  In either case, any such contract shall be on such terms and 
conditions as the Trustees may in their discretion determine not inconsistent 
with the provisions of this Article IV, including, without limitation, the 
provision for the repurchase or sale of shares of the Trust by such other party
as principal or as agent of the Trust.

          SECTION 4.4.  TRANSFER AGENT.  The Trustees may in their discretion
from time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust.  The contract shall have such
terms and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration.  Such services may be provided by one or more
Persons.

          SECTION 4.5.  CUSTODIAN.  The Trustees may appoint or otherwise engage
one or more banks or trust companies, each having an aggregate capital, surplus
and undivided profits (as shown in its last published report) of at least five
million dollars ($5,000,000) to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-Laws of the Trust.

          SECTION 4.6.  PARTIES TO CONTRACT.  Any contract of the character
described in Sections 4.1, 4.2, 4.3, 4.4 or 4.5 of this Article IV and any other
contract may be entered into with any Person, although one or more of the
Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by 

                                      7

<PAGE>

reason of the existence of any such relationship; nor shall any Person holding
such relationship be liable merely by reason of such relationship for any loss 
or expense to the Trust under or by reason of said contract or accountable for 
any profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article IV.  
The same Person may be the other party to any contracts entered into pursuant to
Sections 4.1, 4.2, 4.3, 4.4 or 4.5 above or otherwise, and any individual may be
financially interested or otherwise affiliated with Persons who are parties to 
any or all of the contracts mentioned in this Section 4.6.

                                    ARTICLE V

                    LIMITATIONS OF LIABILITY OF SHAREHOLDERS, 
                                TRUSTEES AND OTHERS


          SECTION 5.1.  NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC.
No Shareholder shall be subject to any personal liability whatsoever to any
Person in connection with Trust Property or the acts, obligations or affairs of
the Trust.  No Trustee, officer, employee or agent of the Trust shall be subject
to any personal liability whatsoever to any Person, other than the Trust or its
Shareholders, in connection with the Trust Property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard for his duty to such Person; and all such Persons shall look
solely to the Trust Property, or to the Property of one or more specific 
Series of the Trust if the claim arises from the conduct of such Trustee, 
officer, employee or agent with respect to only such Series, for 
satisfaction of claims of any nature arising in connection with the affairs 
of the Trust. If any Shareholder, Trustee, officer, employee or agent, as such,
of the Trust is made a party to any suit or proceeding to enforce any such 
liability, he shall not, on account thereof, be held to any personal liability.
The Trust shall indemnify and hold each Shareholder harmless from and against 
all claims and liabilities, to which such Shareholder may become subject by 
reason of his being or having been a Shareholder, and shall reimburse such 
Shareholder for all legal and other expenses reasonably incurred by him in 
connection with any such claim or liability; provided that, in the event the 
Trust shall consist of more than one Series, Shareholders of a particular Series
who are faced with claims or liabilities solely by reason of their status as 
Shareholders of that Series shall be limited to the assets of that Series for 
recovery of such loss and related expenses.  The rights accruing to a 
Shareholder under this Section 5.1 shall not exclude any other right to which 
such Shareholder may be lawfully entitled, nor shall anything herein contained 
restrict the right of the Trust to indemnify or reimburse a Shareholder in any 
appropriate situation even though not specifically provided herein.

          SECTION 5.2.  NON-LIABILITY OF TRUSTEES, ETC.  No Trustee, officer,
employee or agent of the Trust shall be liable to the Trust, its Shareholders,
or to any Shareholder, Trustee, officer, employee, or agent thereof for any
action or failure to act (including without limitation the failure to compel in
any way any former or acting Trustee to redress any breach of trust) except for
his own bad faith, willful misfeasance, gross negligence or reckless disregard
of his duties.

          SECTION 5.3.  INDEMNIFICATION. (a) The Trustees shall provide for
indemnification by the Trust, or by one or more Series thereof if the claim 
arises from his or her conduct with respect to only such Series, of any person 
who is, or has been, a Trustee, officer, employee or agent of the Trust against
all liability and against all expenses reasonably incurred or paid by him in 
connection with any claim, action, suit or proceeding in which he becomes 
involved as a party or otherwise by virtue of his being or having been a 
Trustee, officer, employee or agent and against amounts paid or incurred by him
in the settlement thereof, in such manner as the Trustees may provide from time
to time in the By-Laws.

          (b)  The words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal, or other,
including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and other liabilities.

                                       8

<PAGE>

          SECTION 5.4.  NO BOND REQUIRED OF TRUSTEES.  No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.

          SECTION 5.5. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS,
ETC.  No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust or a Series thereof 
shall be bound to make any inquiry concerning the validity of any transaction 
purporting to be made by the Trustees or by said officer, employee or agent or 
be liable for the application of money or property paid, loaned, or delivered 
to or on the order of the Trustees or of said officer, employee or agent.  
Every obligation, contract, instrument, certificate, Share, other security of 
the Trust or a Series thereof or  undertaking, and every other act or thing 
whatsoever executed in connection with the Trust shall be conclusively 
presumed to have been executed or done by the executors thereof only in their 
capacity as officers, employees or agents of the Trust or a Series thereof.  
Every written obligation, contract, instrument, certificate, Share, other 
security of the Trust or undertaking made or issued by the Trustees shall 
recite that the same is executed or made by them not individually, but as 
Trustees under the Declaration, and that the obligations of the Trust or a 
Series thereof under any such instrument are not binding upon any of the 
Trustees or Shareholders, individually, but bind only the Trust Estate (or, 
in the event the Trust shall consist of more than one Series, in the case of 
any such obligation which relates to a specific Series, only the Series which 
is a party thereto), and may contain any further recital which they or he may 
deem appropriate, but the omission of such recital shall not affect the 
validity of such obligation, contract instrument, certificate, Share, security
or undertaking and shall not operate to bind the Trustees or Shareholders 
individually.  The Trustees shall at all times maintain insurance for the 
protection of the Trust Property, its Shareholders, Trustees, officers, 
employees and agents in such amount as the Trustees shall deem adequate to 
cover possible tort liability, and such other insurance as the Trustees in 
their sole judgment shall deem advisable.

           SECTION 5.6.  RELIANCE ON EXPERTS, ETC.  Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by any Investment Adviser, Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
                                   ARTICLE VI

                          SHARES OF BENEFICIAL INTEREST


          SECTION 6.1.  BENEFICIAL INTEREST.  The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest
of $.01 par value.  The number of such shares of beneficial interest authorized
hereunder is unlimited.  The Trustees shall have the authority to establish 
and designate one or more Series or classes of shares.  Each share of any 
Series shall represent an equal proportionate share in the assets of that 
Series with each other Share in that Series.  The Trustees may divide or 
combine the shares of any Series into a greater or lesser number of shares in 
that Series without thereby changing the proportionate interests in the 
assets of that Series.  Subject to the provisions of Section 6.9 hereof, the 
Trustees may also authorize the creation of additional series of shares (the 
proceeds of which may be invested in separate, independently managed portfolios)
and additional classes of shares within any series.  All Shares issued 
hereunder including, without limitation, Shares issued in connection with a 
dividend in Shares or a split in Shares, shall be fully paid and nonassessable.

          SECTION 6.2.  RIGHTS OF SHAREHOLDERS.  The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to assume any losses of the Trust or suffer an assessment of any kind by
virtue of their ownership of Shares.  The Shares shall be personal property


                                       9

<PAGE>

giving only the rights in the Declaration specifically set forth.  The Shares
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights, except as the Trustees may determine with respect to any series
of Shares.

          SECTION 6.3.  TRUST ONLY.  It is the intention of the Trustees to
create only the relationship of Trustee and beneficiary between the Trustees and
each Shareholder from time to time.  It is not the intention of the Trustees to
create a general partnership, limited partnership, joint stock association, 
corporation, bailment or any form of legal relationship other than a trust.  
Nothing in the Declaration shall be construed to make the Shareholders, either 
by themselves or with the Trustees, partners or members of a joint stock 
association.

          SECTION 6.4.  ISSUANCE OF SHARES.  The Trustees, in their discretion
may, from time to time without vote of the Shareholders, issue Shares of any 
Series, in addition to the then issued and outstanding Shares and Shares held 
in the treasury, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem best, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of liabilities) and businesses.  In connection with any issuance of
Shares, the Trustees may issue fractional Shares.  The Trustees may from time to
time divide or combine the Shares of any Series into a greater or lesser 
number without thereby changing the proportionate beneficial interests 
in that Series.  Contributions to the Trust may be accepted for, and Shares 
shall be redeemed as, whole Shares and/or fractions of a Share as described 
in the Prospectus.

          SECTION 6.5.  REGISTER OF SHARES.  A register shall be kept in 
respect of each Series at the principal office of the Trust or at an office 
of the Transfer Agent which shall contain the names and addresses of the 
Shareholders and the number of Shares of each Series held by them 
respectively and a record of all transfers thereof.  Such register may be in 
written form or any other form capable of being converted into written form 
within a reasonable time for visual inspection.  Such register shall be 
conclusive as to who are the holders of the Shares and who shall be entitled 
to receive dividends or distributions or otherwise to exercise or enjoy the 
rights of Shareholders.  No Shareholder shall be entitled to receive payment 
of any dividend or distribution, nor to have notice given to him as herein or 
in the By-Laws provided, until he has given his address to the Transfer Agent 
or such other officer or agent of the Trustees as shall keep the said 
register for entry thereon.  It is not contemplated that certificates will be 
issued for the Shares; however, the Trustees, in their discretion, may 
authorize the issuance of Share certificates and promulgate appropriate rules 
and regulations as to their use.

          SECTION 6.6. TRANSFER OF SHARES.  Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required.  Upon such delivery the transfer shall be recorded on
the register of the Trust.  Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and 
neither the Trustees nor any Transfer Agent or registrar nor any officer, 
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.

          Any person becoming entitled to any Shares in consequence of the
death, bankruptcy, or incompetence of any Shareholder, or otherwise by operation
of law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law, except as may otherwise be provided by the laws of
the Commonwealth of Massachusetts.

          SECTION 6.7.  NOTICES.  Any and all notices to which any Shareholder
may be entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Shareholder of record at his
last known address as recorded on the register of the Trust.  Annual reports 

                                      10

<PAGE>

and proxy statements need not be sent to a shareholder if: (i) an annual 
report and proxy statement for two consecutive annual meetings, or (ii) all, 
and at least two, checks (if sent by first class mail) in payment of 
dividends or interest and shares during a twelve month period have been 
mailed to such shareholder's address and have been returned undelivered.  
However, delivery of such annual reports and proxy statements shall resume 
once a Shareholder's current address is determined.

          Section 6.8.  VOTING POWERS.  The Shareholders shall have power to
vote only (i) for the election of Trustees as provided in Section 2.2 hereof,
(ii) for the removal of Trustees as provided in Section 2.3 hereof, (iii) with
respect to any investment advisory or management contract as provided in Section
4.1, (iv) with respect to termination of the Trust as provided in Section 9.2,
(v) with respect to any amendment of the Declaration to the extent and as
provided in Section 9.3, (vi) with respect to any merger, consolidation or sale
of assets as provided in Section 9.4, (vii) with respect to incorporation of the
Trust to the extent and as provided in Section 9.5, (viii) to the same extent as
the stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained 
derivatively or as a class action on behalf of the Trust or the Shareholders 
(provided that Shareholders of a Series are not entitled to vote in connection
with the bringing of a derivative or class action with respect to any matter
which only affects another other Series or its Shareholders), and (ix) with 
respect to any plan adopted pursuant to Rule 12b-1 (or any successor rule) 
under the 1940 Act) and (x) with respect to such additional matters relating 
to the Trust as may be required by law, the Declaration, the By-laws or any 
registration of the Trust with the Commission (or any successor agency) or 
any state, or as and when the Trustee may consider necessary or desirable.  
Each whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote, except that Shares held in the treasury of the Trust as of the
record date, as determined in accordance with the By-Laws, shall not be voted. 
On any matter submitted to a vote of Shareholders, all Shares shall be voted by 
individual Series except (1) when required by the 1940 Act, Shares shall be 
voted in the aggregate and not by individual Series; and (2) when the 
Trustees have determined that the matter affects only the interests of one or 
more Series, then only the Shareholders of such Series shall be entitled to 
vote thereon.  The Trustees may, in conjunction with the establishment of any 
further Series or any classes of Shares, establish conditions under which the 
several series or classes of Shares shall have separate voting rights or no 
voting rights.  There shall be no cumulative voting in the election of 
Trustees. Until Shares are issued, the Trustees may exercise all rights of 
Shareholders and may take any action required by law, the Declaration or the 
By-Laws to be taken by Shareholders.  The By-Laws may include further 
provisions for Shareholders' votes and meetings and related matters.

          Section 6.9.  SERIES OR CLASSES OF SHARES.  The following 
provisions are applicable regarding the Series of Shares of the Trust 
established in Section 6.1 hereof and shall be applicable if the Trustees 
shall establish additional Series or shall divide the shares of any Series 
into two or more classes, also as provided in Section 6.1 hereof, and all 
provisions relating to the Trust shall apply equally to each Series thereof 
except as the context requires:

          (a)  The number of authorized shares and the number of shares of each
     Series or of each class that may be issued shall be unlimited.  The 
     Trustees may classify or reclassify any unissued shares or any shares 
     previously issued and reacquired of any Series or class into one or more 
     Series or one or more classes that may be established and designated from 
     time to time.  The Trustees may hold as treasury shares (of the same or 
     some other Series or class), reissue for such consideration and on such 
     terms as they may determine, or cancel any shares of any Series or any 
     class reacquired by the Trust at their discretion from time to time.

                                      11

<PAGE>

          (b)   The power of the Trustees to invest and reinvest the Trust
    Property shall be governed by Section 3.2 of this Declaration with respect 
    to any one or more Series which represents the interests in the assets of 
    the Trust immediately prior to the establishment of any additional Series 
    and the power of the Trustees to invest and reinvest assets applicable to 
    any other Series shall be as set forth in the instrument of the Trustees 
    establishing such series which is hereinafter described.

          (c)  All consideration received by the Trust for the issue or sale of
     shares of a particular Series or class together with all assets in which 
     such consideration is invested or reinvested, all income, earnings, 
     profits, and proceeds thereof, including any proceeds derived from the 
     sale, exchange or liquidation of such assets, and any funds or payments 
     derived from any reinvestment of such proceeds in whatever form the same 
     may be, shall irrevocably belong to that Series or class for all purposes,
     subject only to the rights of creditors, and shall be so recorded upon the 
     books of account of the Trust.  In the event that there are any assets, 
     income, earnings, profits, and proceeds thereof, funds, or payments which 
     are not readily identifiable as belonging to any particular Series or 
     class, the Trustees shall allocate them among any one or more of the Series
     or classes established and designated from time to time in such manner and 
     on such basis as they, in their sole discretion, deem fair and equitable.
     Each such allocation by the Trustees shall be conclusive and binding upon 
     the shareholders of all Series or classes for all purposes.  No holder of 
     Shares of any Series shall have any claim on or right to any assets 
     allocated or belonging to any other Series.

          (d)  The assets belonging to each particular Series shall be charged
     with the liabilities of the Trust in respect of that Series and all 
     expenses, costs, charges and reserves attributable to that Series.  All
     expenses and liabilities incurred or arising in connection with a partical
     Series, or in connection with the management thereof, shall be payable 
     solely out of the assets of that Series and creditors of a particular 
     Series shall be entitled to look solely to the property of such Series for
     satisfaction of their claims.  Any general liabilities, expenses, costs, 
     charges or reserves of the Trust which are not readily identifiable as 
     belonging to any particular Series shall be allocated and charged by the 
     Trustees to and among any one or more of the Series established and 
     designated from time to time in such manner and on such basis as the 
     Trustees in their sole discretion deem fair and equitable.  Each allocation
     of liabilities, expenses, costs, charges and reserves by the Trustees shall
     be conclusive and  binding upon the holders of all Series for all purposes.
     The Trustees shall have full discretion, to the extent not inconsistent 
     with the 1940 Act, to determine which items shall be treated as income 
     and which items as capital; and each such determination and allocation 
     shall be conclusive and binding upon the shareholders.

          (e)  The power of the Trustees to pay dividends and make distributions
     shall be governed by Section 8.2 of this Declaration with respect to any 
     one or more Series or classes which represents the interests in the assets
     of the Trust immediately prior to the establishment of any additional 
     Series or classes.  With respect to any other Series or class, dividends 
     and distributions on shares of a particular Series or class may be paid 
     with such frequency as the Trustees may determine, which may be daily or
     otherwise, pursuant to a standing resolution or resolutions adopted only 
     once or with such frequency as the Trustees may determine, to the holders 
     of shares of that Series or class, from such of the income and capital 
     gains, accrued or realized, from the assets belonging to that Series or 
     class, as the Trustees may determine, after providing for actual and 
     accrued liabilities belonging to that Series or class.  All dividends and 
     distributions on shares of a particular Series or class shall be 
     distributed pro rata to the holders of that Series or class in proportion 
     to the number of shares of that Series or class held by such holders at the
     date and time of record established for the payment of such dividends or 
     distributions.

          (f)  The Trustees shall have the power to determine the designations,
    preferences, privileges, limitations and rights, including voting and 
    dividend rights, of each class and Series of Shares.

                                      12

<PAGE>

          (g)  Subject to compliance with the requirements of the 1940 Act, 
     the Trustees shall have the authority to provide that the holders of Shares
     of any Series or class shall have the right to convert or exchange said
     Shares into Shares of one or more Series of Shares in accordance with such
     requirements and procedures as may be established by the Trustees.

          (h)  The establishment and designation of any Series or class of
     shares  in addition to those established in Section 6.1 hereof shall be
     effective upon the execution by a majority of the then Trustees of an 
     instrument setting forth such establishment and designation and the 
     relative rights, preferences, voting powers, restrictions, limitations as 
     to dividends, qualifications, and terms and conditions of redemption of 
     such Series or class, or as otherwise provided in such instrument.  At any
     time that there are no shares outstanding of any particular Series or class
     previously established and designated, the Trustees may by an instrument 
     executed by a majority of their number abolish that Series or class and the
     establishment and designation thereof.  Each instrument referred to in this
     paragraph shall have the status of an amendment to this Declaration.

          (i)  Shareholders of a Series shall not be entitled to participate 
     in a derivative or class action with respect to any matter which only 
     affects another Series or its Shareholders.

          (j)  Each Share of a Series of the Trust shall represent a 
     beneficial interest in the net assets of such Series.  Each holder of 
     Shares of a Series shall be entitled to receive his pro rata share of 
     distributions of income and capital gains made with respect to such Series.
     In the event of the liquidation of a particular Series, the Shareholders of
     that Series which has been established and designated and which is being 
     liquidated shall be entitled to receive, when and as declared by the 
     Trustees, the excess of the assets belonging to that Series over the 
     liabilities belonging to that Series.  The holders of Shares of any Series 
     shall not be entitled hereby to any distribution upon liquidation of any 
     other Series.  The assets so distributable to the Shareholders of any
     Series shall be distributed among such Shareholders in proportion to the 
     number of Shares of that Series held by them and recorded on the books of 
     the Trust.  The liquidation of any particular Series in which there are 
     Shares then outstanding may be authorized by an instrument in writing, 
     without a meeting, signed by a majority of the Trustees then in office, 
     subject to the approval of a majority of the outstanding voting securities 
     of that Series, as that phrase is defined in the 1940 Act.

                                   ARTICLE VII

                                   REDEMPTIONS

          SECTION 7.1. REDEMPTIONS.  Each Shareholder of a particular Series 
shall have the right at such times as may be permitted by the Trust to 
require the Trust to redeem all or any part of his Shares of that Series, upon
and subject to the terms and conditions provided in this Article VII.  The Trust
shall, upon application of any Shareholder or pursuant to authorization from 
any Shareholder, redeem or repurchase from such Shareholder outstanding shares 
for an amount per share determined by the Trustees in accordance with any 
applicable laws and regulations; provided that (a) such amount per share shall 
not exceed the cash equivalent of the proportionate interest of each share or of
any class or Series of shares in the assets of the Trust at the time of the 
redemption or repurchase and (b) if so authorized by the Trustees, the Trust 
may, at any time and from time to time charge fees for effecting such redemption
or repurchase, at such rates as the Trustees may establish, as and to the 
extent permitted under the 1940 Act and the rules and regulations promulgated 
thereunder, and may, at any time and from time to time, pursuant to such  Act 
and such rules and regulations, suspend such right of redemption.  The 
procedures for effecting and suspending redemption shall be as set forth in 
the Prospectus from time to time.  Payment will be made in such manner as 
described in the Prospectus.

          SECTION 7.2.  REDEMPTION AT THE OPTION OF THE TRUST.  Each Share of 
the Trust or any Series of the Trust shall be subject to redemption at the 
option of the Trust at the redemption price which would be applicable if such 
Share were then being redeemed by the Shareholder pursuant to Section 7.1: 
(1) at any time, if the Trustees determine in their sole discretion that 
failure to so redeem may have materially 

                                      13

<PAGE>

adverse consequences to the holders of the Shares of the Trust or of any Series,
or (ii) upon such other conditions with respect to maintenance of Shareholder 
accounts of a minimum amount as may from time to time be determined by the 
Trustees and set forth in the then current Prospectus of the Trust.  Upon such
redemption the holders of the Shares so redeemed shall have no further right 
with respect thereto other than to receive payment of such redemption price.

          SECTION 7.3.  EFFECT OF SUSPENSION OF DETERMINATION OF NET ASSET 
VALUE.  If, pursuant to Section 7.4 hereof, the Trustees shall declare a 
suspension of the determination of net asset value with respect to Shares of 
the Trust or of any Series thereof, the rights of Shareholders (including 
those who shall have applied for redemption pursuant to Section 7.1 hereof 
but who shall not yet have received payment) to have Shares redeemed and paid
for by the Trust or a Series thereof shall be suspended until the termination 
of such suspension is declared.  Any record holder who shall have his 
redemption right so suspended may, during the period of such suspension, by 
appropriate written notice of revocation at the office or agency where 
application was made, revoke any application for redemption not honored and 
withdraw any certificates on deposit.  The redemption price of Shares for which
redemption applications have not been revoked shall be the net asset value of 
such Shares next determined as set forth in Section 8.1 after the termination 
of such suspension, and payment shall be made within seven (7) days after the 
date upon which the application was made plus the period after such application
during which the determination of net asset value was suspended.

          SECTION 7.4.  SUSPENSION OF RIGHT OF REDEMPTION.  The Trust may 
declare a suspension of the right of redemption or postpone the date of 
payment or redemption for the whole or any part of any period (i) during 
which the New York Stock Exchange is closed other than customary weekend and 
holiday closings, (ii) during which trading on the New York Stock Exchange is 
restricted, (iii) during which an emergency exists as a result of which 
disposal by the Trust or a Series thereof of securities owned by it is not 
reasonably practicable or it is not reasonably practicable for the Trust or a 
Series thereof fairly to determine the value of its net assets, or (iv) during 
any other period when the Commission may for the protection of security 
holders of the Trust by order permit suspension of the rights of redemption 
or postponement of the date of payment or redemption; provided that 
applicable rules and regulations of the Commission shall govern as to whether 
the conditions prescribed in (ii), (iii) or (iv) exist.  Such suspension 
shall take effect at such time as the Trust shall specify but not later than 
the close of business on the business day next following the declaration of 
suspension, and thereafter there shall be no right of redemption or payment 
on redemption until the Trust shall declare the suspension at an end, except 
that the suspension shall terminate in any event on the first day on which 
said stock exchange shall have reopened or the period specified in (ii) or 
(iii) shall have expired (as to which in the absence of an official ruling by 
the Commission, the determination of the Trust shall be conclusive).  In the 
case of a suspension of the right of redemption, a Shareholder may either 
withdraw his request for redemption or receive payment based on the net asset 
value existing after the termination of the suspension.

                                  ARTICLE VIII

                        DETERMINATION OF NET ASSET VALUE, 
                           NET INCOME AND DISTRIBUTIONS


          SECTION 8.1.  NET ASSET VALUE.  The net asset value of each 
outstanding Share of each Series of the Trust shall be determined on such days 
and at such time or times as the Trustees may determine.  The method of 
determination of net asset value shall be determined by the Trustees and shall 
be as set forth in the Prospectus and Statement of Additional Information.  The 
power and duty to make the daily calculations may be delegated by the Trustees 
to any Investment Adviser, the Custodian, the Transfer Agent or such other 
person as the Trustees by resolution may determine.  The Trustees may suspend 
the daily determination of net asset value to the extent permitted by the 1940 
Act.

          SECTION 8.2.  DISTRIBUTIONS TO SHAREHOLDERS.  The Trustees shall from
time to time distribute ratably among the Shareholders of the Trust or of any 
Series such proportion of the  net income, earnings, profits, gains, surplus 
(including paid-in surplus), capital, or assets of the Trust or of such 
Series held by 

                                      14

<PAGE>

the Trustees as they may deem proper.  Such distribution may be made in 
cash or property (including without limitation any type of obligations of
the Trust or of such Series or any assets thereof), and the Trustees may
distribute ratably among the Shareholders of the Trust or of that Series 
additional Shares issuable hereunder in such manner, at such times, and on
such terms as the Trustees may deem proper.  Such distributions may be 
among the Shareholders of record (determined in accordance with the Prospectus
and Statement of Additional Information) of the Trust or of such Series at the 
time of declaring a distribution or among the Shareholders of record of the 
Trust or of such Series at such later date as the Trustees shall determine.
The Trustees may always retain from the net income, earnings, profits or gains
of the Trust or of such Series such amount as they may deem necessary to pay the
debts or expenses of the Trust or of such Series or to meet obligations of the 
Trust or of such Series, or as they may deem desirable to use in the conduct of
its affairs or to retain for future requirements or extensions of the business.
The Trustees may adopt and offer to Shareholders of the Trust or of any Series 
such dividend reinvestment plans, cash dividend payout plans or related plans as
the Trustees deem appropriate.

          Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their 
discretion to distribute for any fiscal year as ordinary dividends and as 
capital gains distributions, respectively, additional amounts sufficient to 
enable the Trust to avoid or reduce liability for taxes.

          SECTION 8.3.  DETERMINATION OF NET INCOME.  The Trustees shall have
the power to determine the net income of any Series of the Trust and from time 
to time to distribute such net income ratably among the Shareholders as 
dividends in cash or additional Shares of such Series issuable hereunder.  The 
determination of net income and the resultant declaration of dividends shall 
be as set forth in the Prospectus and Statement of Additional Information. The
Trustees shall have full discretion to determine whether any cash or property 
received by any Series of the Trust shall be treated as income or as principal 
and whether any item of expense shall be charged to the income or the principal
account, and their determination made in good faith shall be conclusive upon the
Shareholders.  In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular circumstances, how
much, if any, of the value thereof shall be treated as income, the balance, if
any, to be treated as principal.

          SECTION 8.4.  POWER TO MODIFY FOREGOING PROCEDURES.  Notwithstanding
any of the foregoing provisions of this Article VIII, the Trustees may
prescribe, in their absolute discretion, such other bases and times for
determining the per Share net asset value of the Shares or net income, or the
declaration and payment of dividends and distributions, as they may deem
necessary or desirable to enable the Trust to comply with any provision of the
1940 Act, or any rule or regulation thereunder, including any rule or regulation
adopted pursuant to Section 22 of the 1940 Act by the Commission or any
securities association registered under the Securities Exchange Act of 1934, or
any order of exemption issued by said Commission, all as in effect now or
hereafter amended or modified.  Without limiting the generality of the
foregoing, the Trustees may establish classes or additional Series of Shares 
in accordance with Section 6.9.

                                   ARTICLE IX

            DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.


          SECTION 9.1.  DURATION.  The Trust shall continue without limitation
of time but subject to the provisions of this Article IX.

          SECTION 9.2.  TERMINATION OF TRUST. (a)  The Trust or any Series 
may be terminated (i) by a Majority Shareholder Vote at any meeting of 
Shareholders of the Trust or the appropriate Series thereof, (ii) by an 
instrument in writing, without a meeting, signed by a majority of the 
Trustees and consented to by a

                                      15

<PAGE>

Majority Shareholder Vote of the Trust or the appropriate Series thereof, or 
by such other vote as may be established by the Trustees with respect to any 
class or Series of Shares, or (iii) with respect to a Series as provided in 
Section 6.9(h).  Upon the termination of the Trust or the Series:

              (i)    The Trust or the Series shall carry on no business except 
          for the purpose of winding up its affairs.

              (ii)   The Trustees shall proceed to wind up the affairs of the
          Trust or the Series and all of the powers of the Trustees under 
          this Declaration shall continue  until the affairs of the Trust shall
          have been wound up, including the power to fulfull or discharge the 
          contracts of the Trust or the Series, collect its assets, sell, 
          convey, assign, exchange, transfer or otherwise dispose of all or any 
          part of the remaining Trust Property or Trust Property allocated to 
          or belonging to such Series to one or more persons at public or 
          private sale for consideration which may consist in whole or in part 
          of cash, securities or other property of any kind, discharge or pay 
          its liabilities, and to do all other acts appropriate to liquidate its
          business; provided that any sale, conveyance, assignment, exchange,
          transfer or other disposition of all or substantially all the Trust 
          Property or Trust Property allocated or belonging to such Series shall
          require Shareholder approval in accordance with Section 9.4 hereof.

             (iii)  After paying or adequately providing for the payment of all
          liabilities, and upon receipt of such releases, indemnities and 
          refunding agreements, as they deem necessary for their protection, 
          the Trustees may distribute the remaining Trust Property or Trust 
          Property allocated or belonging to such Series, in cash or in kind 
          or partly each, among the Shareholders of the Trust or of each Series
          according to their respective rights.

          SECTION 9.3.  AMENDMENT PROCEDURE. (a) This Declaration may be amended
by a Majority Shareholder Vote, at a meeting of Shareholders, or by written
consent without a meeting.  The Trustees may also amend this Declaration without
the vote or consent of Shareholders (i) to change the name of the Trust or 
Series or classes of Shares, (ii) to supply any omission, to cure, correct or 
supplement any ambiguous, defective or inconsistent provision hereof, (iii) if 
they deem it necessary to conform this Declaration to the requirements of 
applicable federal or state laws or regulations or the requirements of the 
of the Internal Revenue Code, or to eliminate or reduce any federal, state or 
local taxes which are or may be payable by the Trust or the Shareholders, but 
the Trustees shall not be liable for failing to do so, or (iv) for any other 
purpose which does not adversely affect the rights of any Shareholder with 
respect to which the amendment is or purports to be applicable.

          (b)  No amendment may be made under this Section 9.3 which would
change any rights with respect to any Shares of the Trust or of any Series of 
the Trust by reducing the amount payable thereon upon liquidation of the 
Trust or of such Series of the Trust or by diminishing or eliminating any 
voting rights pertaining thereto, except with the vote or consent of the 
holders of two-thirds of the Shares of the Trust or of such Series outstanding 
and entitled to vote, or by such other vote as may be established by the 
Trustees with respect to any series or class of Shares.  Nothing contained in 
this Declaration shall permit the amendment of this Declaration to impair the 
exemption from personal liability of the Shareholders, Trustees, officers, 
employees and agents of the Trust or to permit assessments upon Shareholders.

          (c)  A certificate signed by a majority of the Trustees or by the
Secretary or any Assistant Secretary of the Trust, setting forth an amendment
and reciting that it was duly adopted by the Shareholders or by the Trustees 
as aforesaid or a copy of the Declaration, as amended, and executed by a 
majority of the Trustees or certified by the Secretary or any Assistant 
Secretary of the Trust, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.  Unless such amendment or such 
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective when lodged among the records of the Trust.

                                      16

<PAGE>

          Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.

          SECTION 9.4.  MERGER, CONSOLIDATION AND SALE OF ASSETS.  The Trust 
or any Series thereof may merge or consolidate with any other corporation, 
association, trust or other organization or may sell, lease or exchange all or 
substantially all of the Trust Property or Trust Property allocated or 
belonging to such Series, including its good will, upon such terms and 
conditions and for such consideration when and as authorized, at any meeting of 
Shareholders called for the purpose, by the affirmative vote of the holders of 
not less than two-thirds of the Shares of the Trust or such Series outstanding 
and entitled to vote, or by an instrument or instruments in writing without a 
meeting, consented to by the holders of not less than two-thirds of such Shares,
or by such other vote as may be established by the Trustees with respect to any
series or class of Shares; provided, however, that, if such merger, 
consolidation, sale, lease or exchange is recommended by the Trustees, a 
Majority Shareholder Vote shall be sufficient authorization; and any such 
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the laws of the 
Commonwealth of Massachusetts.  

          SECTION 9.5.  INCORPORATION.  With approval of a Majority Shareholder
Vote, or by such other vote as may be established by the Trustees with respect
to any Series or class of Shares, the Trustees may cause to be organized or
assist in organizing a corporation or corporations under the laws of any
jurisdiction or any other trust, partnership, association or other organization
to take over all of the Trust Property or the Trust Property allocated or 
belonging to such Series or to carry on any business in which the Trust shall 
directly or indirectly have any interest, and to sell, convey and transfer the 
Trust Property or the Trust Property allocated or belonging to such Series to 
any such corporation, trust, partnership, association or organization in 
exchange for the shares or securities thereof or otherwise, and to lend money 
to, subscribe for the shares or securities of, and enter into any contracts 
with any such corporation, trust, partnership, association or organization in 
which the Trust or such Series holds or is about to acquire shares or any other
interest.  The Trustees may also cause a merger or consolidation between the 
Trust or any successor thereto and any such corporation, trust, partnership, 
association or other organization if and to the extent permitted by law, as 
provided under the law then in effect.  Nothing contained herein shall be 
construed as requiring approval of Shareholders for the Trustees to organize or
assist in organizing one or more corporations, trusts, partnerships, 
associations or other organizations and selling, conveying or transferring a 
portion of the Trust Property to such organization or entities.

                                    ARTICLE X

                             REPORTS TO SHAREHOLDERS


          The Trustees shall at least semi-annually submit or cause the 
officers of the Trust to submit to the Shareholders a written financial 
report of each Series of the Trust, including financial statements which shall 
at least annually be certified by independent public accountants.

                                   ARTICLE XI

                                  MISCELLANEOUS


          SECTION 11.1.  FILING.  This Declaration and any amendment hereto
shall be filed in the office of the Secretary of the Commonwealth of
Massachusetts and in such other places as may be required under the laws of
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate.  Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee or by the Secretary or any
Assistant Secretary of the Trust stating that such action was duly taken in a
manner provided herein.  A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are then in effect and
operative, may be executed from time to time 

                                      17

<PAGE>

by a majority of the Trustees and shall, upon filing with the Secretary of the
Commonwealth of Massachusetts, be conclusive evidence of all amendments 
contained therein and may thereafter be referred to in lieu of the original 
Declaration and the various amendments thereto.

          SECTION 11.2.  RESIDENT AGENT.  The Prentice-Hall Corporation 
System, Inc., 84 State Street, Boston, Massachusetts 02109 is the resident 
agent of the Trust may appoint in the Commonwealth of Massachusetts.

          SECTION 11.3.  GOVERNING LAW.  This Declaration is executed by the
Trustees  and delivered in the Commonwealth of Massachusetts, and with 
reference to the laws thereof and the rights of all parties and the validity 
and construction of every provision hereof shall be subject to and construed 
according to the laws of said State.

          SECTION 11.4.  COUNTERPARTS.  The Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.

          SECTION 11.5.  RELIANCE BY THIRD PARTIES.  Any certificate executed by
an individual who, according to the records of the Trust, appears to be a
Trustee hereunder, or Secretary or Assistant Secretary of the Trust, certifying
to: (a) the number or identity of Trustees or Shareholders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of 
any vote passed at a meeting of Trustees or Shareholders, (d) the fact that the 
number of Trustees or Shareholders present at any meeting or executing any 
written instrument satisfies the requirements of this Declaration, (e) the form
of any By-Laws adopted by or the identity of any officers elected by the 
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.

          SECTION 11.6.  PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provisions shall be deemed superseded by such law or regulation to
the extent necessary to eliminate such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.

          (b)  If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
pertain only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.

          SECTION 11.7.  USE OF THE NAME "TCW/DW."  Dean Witter Reynolds Inc. 
("DWR") and Trust Company of the West ("TCW") have consented to the use by 
the Trust of the identifying name "TCW/DW," which is a property right of DWR 
and TCW.  The Trust will only use the name "TCW/DW" as a component of its 
name and for no other purpose, and will not purport to grant to any third 
party the right to use the name "TCW/DW" for any purpose.  DWR or TCW, or any 
corporate affiliate of the parent of either, may use or grant to others the 
right to use the name "TCW/DW", or any combination or abbreviation thereof, 
as all or a portion of a corporate or business name or for any commercial 
purpose, including a grant of such right to any other investment company.  At 
the request of DWR or TCW or their respective parents or affiliates, the 
Trust will take such action as may be required to provide its consent to the 
use by DWR or TCW or their respective parents of affiliates, or any corporate 
affiliate of such parents or affiliates, or by any person to whom DWR or TCW 
or their respective parents or affiliates, shall have granted the right to 
the use, of the name "TCW/DW," or any combination or abbreviation thereof.  
Upon the termination of (i) any management agreement into which DWR and the 
Trust may enter, (ii) any investment advisory agreement into which TCW and 
the Fund may enter, or (iii) the alliance agreement between DWR and TCW under 
which DWR and TCW, or affiliates of either, have agreed to provide their 
respective services pursuant to contracts with the Trust, the Trust shall, 
upon request by DWR or TCW or their respective parents or affiliates, cease 
to use the name "TCW/DW" as a component of its name, and shall not use

                                      18

<PAGE>

the name, or any combination or abbreviation thereof, as a part of its name 
or for any other commercial purpose, and shall cause its officers, trustees 
and shareholders to take any and all actions which DWR or TCW or their 
respective parents or affiliates, may request to effect the foregoing and to 
reconvey to DWR or TCW or their respective parents or affiliates, any and all 
rights to such name.

Section 11.8 PRINCIPAL PLACE OF BUSINESS.  The principal place of business of 
the Trust shall be Two World Trade Center, New York, New York 10048, or such
other location as the Trustees may designate from time to time.


                                      19

<PAGE>

          IN WITNESS WHEREOF, the undersigned have executed this Declaration of
Trust this 20th day of November, 1992.



/s/ CHARLES A. FIUMEFREDDO              /s/ RICHARD M. DEMARTINI
- -----------------------------------     ----------------------------------------
Charles A. Fiumefreddo, as              Richard M. DeMartini, as
Trustee and not individually            Trustee and not individually
Two World Trade Center                  Two World Trade Center
New York, New York  10048               New York, New York  10048


/s/ SHELDON CURTIS                      
- -----------------------------------     
Sheldon Curtis, as 
Trustee and not individually
Two World Trade Center
New York, New York  10048


STATE OF NEW YORK )
                  )ss.:
COUNTY OF NEW YORK)



          On this 20th day of November 1992, RICHARD M. DEMARTINI, CHARLES A.
FIUMEFREDDO and SHELDON CURTIS, known to me and known to be the individuals
described in and who executed the foregoing instrument, personally appeared
before me and they severally acknowledged the foregoing instrument to be their
free act and deed.



                                        /s/ BARRY FINK
                                        --------------------------
                                             Notary Public



My commission expires: December 31, 1992


                   BARRY FINK
         Notary Public, State of New York
                  No. 41-4711960
            Qualified in Suffolk County
       Certificate filed in New York County
       Commission Expires December 31, 1992


                                      20

<PAGE>

          IN WITNESS WHEREOF, the undersigned has executed this instrument this
20th day of November, 1992.

                                        /s/ JOSEPH F. MAZZELLA
                                        ----------------------------------------
                                        Joseph F. Mazzella, as Trustee
                                        and not individually
                                        One Federal Street
                                        Boston, MA 02110



                          COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.                                                          Boston, MA
                                                               November 23, 1992

          Then personally appeared the above-named Joseph F. Mazzella
who acknowledged the foregoing instrument to be his free act and deed,
                                             before me,



                                        /s/ SHEILA M. MCCARTY
                                        ----------------------------------------
                                                     Notary Public


My commission expires:   MAY 31, 1996
                       ----------------


                                        21



<PAGE>



                                   BY-LAWS
                                      OF
                        TCW/DW INCOME AND GROWTH FUND
                (AMENDED AND RESTATED AS OF JANUARY 25, 1995)

                                  ARTICLE I

                                 DEFINITIONS

   The terms "COMMISSION", "DECLARATION", "DISTRIBUTOR", "INVESTMENT
ADVISER", "MAJORITY SHAREHOLDER VOTE", "1940 ACT", "SHAREHOLDER", "SHARES",
"TRANSFER AGENT", "TRUST", "TRUST PROPERTY", and "TRUSTEES" have the
respective meanings given them in the Declaration of Trust of TCW/DW Income and
Growth Fund dated November 20, 1992.

                                  ARTICLE II

                                   OFFICES

   SECTION 2.1. PRINCIPAL OFFICE. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.

   SECTION 2.2. OTHER OFFICES. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.

                                 ARTICLE III

                            SHAREHOLDERS' MEETINGS

   SECTION 3.1. PLACE OF MEETINGS. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.

   SECTION 3.2. MEETINGS. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the
provisions of Section 16(a) of the 1940 Act, for that purpose. Meetings of
Shareholders shall also be called by the Secretary upon the written request
of the holders of Shares entitled to vote as otherwise required by Section
16(c) of the 1940 Act and to the extent required by the corporate or business
statute of any state in which the Shares of the Trust are sold, as made
applicable to the Trust by the provisions of Section 2.3 of the Declaration.
Such request shall state the purpose or purposes of such meeting and the
matters proposed to be acted on thereat. Except to the extent otherwise
required by Section 16(c) of the 1940 Act, as made applicable to the Trust by
the provisions of Section 2.3 of the Declaration, the Secretary shall inform
such Shareholders of the reasonable estimated cost of preparing and mailing
such notice of the meeting, and upon payment to the Trust of such costs, the
Secretary shall give notice stating the purpose or purposes of the meeting to
all entitled to vote at such meeting. No meeting need be called upon the
request of the holders of Shares entitled to cast less than a majority of all
votes entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any meeting of Shareholders
held during the preceding twelve months.

   SECTION 3.3. NOTICE OF MEETINGS. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.

   SECTION 3.4. QUORUM AND ADJOURNMENT OF MEETINGS. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders the holders of a majority of the Shares



<PAGE>



issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum for
the transaction of business. In the absence of a quorum, the Shareholders
present or represented by proxy and entitled to vote thereat shall have power
to adjourn the meeting from time to time. Any adjourned meeting may be held
as adjourned without further notice. At any adjourned meeting at which a
quorum shall be present, any business may be transacted as if the meeting had
been held as originally called.


   SECTION 3.5. VOTING RIGHTS, PROXIES. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy, executed in writing by the Shareholder or his
duly authorized attorney-in-fact, for each Share of beneficial interest of
the Trust and for the fractional portion of one vote for each fractional
Share entitled to vote so registered in his name on the records of the Trust
on the date fixed as the record date for the determination of Shareholders
entitled to vote at such meeting. No proxy shall be valid after eleven months
from its date, unless otherwise provided in the proxy. At all meetings of
Shareholders, unless the voting is conducted by inspectors, all questions
relating to the qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the chairman of the
meeting. Pursuant to a resolution of a majority of the Trustees, proxies may
be solicited in the name of one or more Trustees or Officers of the Trust.

   SECTION 3.6. VOTE REQUIRED. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority
Shareholder Vote.

   SECTION 3.7. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. In case any person appointed as Inspector fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting as chairman. The Inspectors of Election shall determine the
number of Shares outstanding, the Shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies,
shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results,
and do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or
of any Shareholder or his proxy, the Inspectors of Election shall make a
report in writing of any challenge or question or matter determined by them
and shall execute a certificate of any facts found by them.

   SECTION 3.8. INSPECTION OF BOOKS AND RECORDS. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under Section 32 of the Corporations Law of the
State of Massachusetts.

   SECTION 3.9. ACTION BY SHAREHOLDERS WITHOUT MEETING. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.

                                  ARTICLE IV

                                   TRUSTEES

   SECTION 4.1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as shall be
determined from time to time by the Trustees without further notice. Special
meetings of the Trustees may be called at any time by the Chairman and shall
be called by the Chairman or the Secretary upon the written request of any
two (2) Trustees.

                                2

<PAGE>


   SECTION 4.2. NOTICE OF SPECIAL MEETINGS. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.

   SECTION 4.3. TELEPHONE MEETINGS. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.

   SECTION 4.4. QUORUM, VOTING AND ADJOURNMENT OF MEETINGS. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.

   SECTION 4.5. ACTION BY TRUSTEES WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.

   SECTION 4.6. EXPENSES AND FEES. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.

   SECTION 4.7. EXECUTION OF INSTRUMENTS AND DOCUMENTS AND SIGNING OF CHECKS
AND OTHER OBLIGATIONS AND TRANSFERS. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the Chairman, the President, any Vice
President or the Treasurer or by any one or more officers or agents of the
Trust as shall be designated for that purpose by vote of the Trustees;
notwithstanding the above, nothing in this Section 4.7 shall be deemed to
preclude the electronic authorization, by designated persons, of the Trust's
Custodian (as described herein in Section 9.1) to transfer assets of the
Trust, as provided for herein in Section 9.1.

   SECTION 4.8. INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
AGENTS. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.


                                3
<PAGE>


   (b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.

   (c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

   (d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).

       (2) The determination shall be made:

           (i) By the Trustees, by a majority vote of a quorum which consists
    of Trustees who were not parties to the action, suit or proceeding; or

           (ii) If the required quorum is not obtainable, or if a quorum of
    disinterested Trustees so directs, by independent legal counsel in a
    written opinion; or

           (iii) By the Shareholders.

       (3) Notwithstanding any provision of this Section 4.8, no person shall
   be entitled to indemnification for any liability, whether or not there is
   an adjudication of liability, arising by reason of willful misfeasance,
   bad faith, gross negligence, or reckless disregard of duties as described
   in Section 17(h) and (i) of the Investment Company Act of 1940 ("disabling
   conduct"). A person shall be deemed not liable by reason of disabling
   conduct if, either:

           (i) a final decision on the merits is made by a court or other body
    before whom the proceeding was brought that the person to be indemnified
    ("indemnitee") was not liable by reason of disabling conduct; or

           (ii) in the absence of such a decision, a reasonable determination,
    based upon a review of the facts, that the indemnitee was not liable by
    reason of disabling conduct, is made by either--

            (A) a majority of a quorum of Trustees who are neither
         "interested persons" of the Trust, as defined in Section 2(a)(19) of
         the Investment Company Act of 1940, nor parties to the action, suit
         or proceeding, or

            (B) an independent legal counsel in a written opinion.

   (e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:

       (1) authorized in the specific case by the Trustees; and

       (2) the Trust receives an undertaking by or on behalf of the Trustee,
   officer, employee or agent of the Trust to repay the advance if it is not
   ultimately determined that such person is entitled to be indemnified by
   the Trust; and

                                4

<PAGE>


     (3) either, (i) such person provides a security for his undertaking, or

        (ii) the Trust is insured against losses by reason of any lawful
    advances, or

       (iii) a determination, based on a review of readily available facts,
    that there is reason to believe that such person ultimately will be found
    entitled to indemnification, is made by either--

            (A) a majority of a quorum which consists of Trustees who are
       neither "interested persons" of the Trust, as defined in Section
       2(a)(19) of the 1940 Act, nor parties to the action, suit or
       proceeding, or

            (B) an independent legal counsel in a written opinion.

   (f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.

   (g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such. However, in no event will the Trust
purchase insurance to indemnify any officer or Trustee against liability for
any act for which the Trust itself is not permitted to indemnify him.

   (h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

                                  ARTICLE V

                                  COMMITTEES

   SECTION 5.1. EXECUTIVE AND OTHER COMMITTEES. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.

   The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.

   All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.

   SECTION 5.2. ADVISORY COMMITTEE. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.

                                5
<PAGE>


   SECTION 5.3. COMMITTEE ACTION WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.

                                  ARTICLE VI

                                   OFFICERS

   SECTION 6.1. EXECUTIVE OFFICERS. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more
than one capacity. The executive officers of the Trust shall be elected
annually by the Trustees and each executive officer so elected shall hold
office until his successor is elected and has qualified.

   SECTION 6.2. OTHER OFFICERS AND AGENTS. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and may elect, or may delegate to the Chairman the power to
appoint, such other officers and agents as the Trustees shall at any time or
from time to time deem advisable.

   SECTION 6.3. TERM AND REMOVAL AND VACANCIES. Each officer of the Trust
shall hold office until his successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in
their judgment, the best interests of the Trust will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed.

   SECTION 6.4. COMPENSATION OF OFFICERS. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the Chairman to the
extent provided by the Trustees with respect to officers appointed by the
Chairman.

   SECTION 6.5. POWER AND DUTIES. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws, or to the extent not so provided, as may be prescribed by the
Trustees; provided, that no rights of any third party shall be affected or
impaired by any such By-Law or resolution of the Trustees unless he has
knowledge thereof.

   SECTION 6.6. THE CHAIRMAN. (a) The Chairman shall be the chief executive
officer of the Trust; he shall preside at all meetings of the Shareholders
and of the Trustees; he shall have general and active management of the
business of the Trust, shall see that all orders and resolutions of the
Trustees are carried into effect, and, in connection therewith, shall be
authorized to delegate to the President or to one or more Vice Presidents
such of his powers and duties at such times and in such manner as he may deem
advisable; he shall be a signatory on all Annual and Semi-Annual Reports as
may be sent to shareholders, and he shall perform such other duties as the
Trustees may from time to time prescribe.

   (b) In the absence of the Chairman, the Board shall determine who shall
preside at all meetings of the shareholders and the Board of Trustees.

   SECTION 6.7. THE PRESIDENT. The President shall perform such duties as the
Board of Trustees and the Chairman may from time to time prescribe.

   SECTION 6.8. THE VICE PRESIDENTS. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Trustees. The Vice President, or, if there be more than one, the Vice
Presidents in the order of their seniority as may be determined from time to
time by the Trustees or the Chairman, shall, in the absence or disability of
the President, exercise the powers and perform the duties of the President,
and he or they shall perform such other duties as the Trustees or the
Chairman may from time to time prescribe.

                                6
<PAGE>


   SECTION 6.9. THE ASSISTANT VICE PRESIDENTS. The Assistant Vice President,
or, if there be more than one, the Assistant Vice Presidents, shall perform
such duties and have such powers as may be assigned them from time to time by
the Trustees or the Chairman.

   SECTION 6.10. THE SECRETARY. The Secretary shall attend all meetings of
the Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Trustees in a book
to be kept for that purpose, and shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the Shareholders and special meetings of the Trustees, and shall
perform such other duties and have such powers as the Trustees, or the
Chairman, may from time to time prescribe. He shall keep in safe custody the
seal of the Trust and affix or cause the same to be affixed to any instrument
requiring it, and, when so affixed, it shall be attested by his signature or
by the signature of an Assistant Secretary.

   SECTION 6.11. THE ASSISTANT SECRETARIES. The Assistant Secretary, or, if
there be more than one, the Assistant Secretaries in the order determined by
the Trustees or the Chairman, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such duties and have such other powers as the Trustees or the
Chairman may from time to time prescribe.

   SECTION 6.12. THE TREASURER. The Treasurer shall be the chief financial
officer of the Trust. He shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and
he shall render to the Trustees and the Chairman, whenever any of them
require it, an account of his transactions as Treasurer and of the financial
condition of the Trust; and he shall perform such other duties as the
Trustees, or the Chairman, may from time to time prescribe.

   SECTION 6.13. THE ASSISTANT TREASURERS. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in the order
determined by the Trustees or the Chairman, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers
as the Trustees, or the Chairman, may from time to time prescribe.

   SECTION 6.14. DELEGATION OF DUTIES. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.

                                 ARTICLE VII

                         DIVIDENDS AND DISTRIBUTIONS

   Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.

   Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.

                                 ARTICLE VIII

                            CERTIFICATES OF SHARES

   SECTION 8.1. CERTIFICATES OF SHARES. Certificates for Shares of each
series or class of Shares shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to change such
form and design at any time or from time to time, and shall be entered in the
records of the Trust as they are issued. Each such certificate shall bear a
distinguishing number; shall exhibit the holder's name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of the
Trust by the Chairman, the President, or a Vice President, and countersigned
by the Secretary or an Assistant

                                7
<PAGE>


Secretary or the Treasurer and an Assistant Treasurer of the Trust; shall be
sealed with the seal; and shall contain such recitals as may be required by
law. Where any certificate is signed by a Transfer Agent or by a Registrar,
the signature of such officers and the seal may be facsimile, printed or
engraved. The Trust may, at its option, determine not to issue a certificate
or certificates to evidence Shares owned of record by any Shareholder.

   In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.

   No certificate shall be issued for any share until such share is fully
paid.

   SECTION 8.2. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The Trustees
may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representative, to give to the Trust and to such Registrar, Transfer Agent
and/or Transfer Clerk as may be authorized or required to countersign such
new certificate or certificates, a bond in such sum and of such type as they
may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them on
account of or in connection with the alleged loss, theft or destruction of
any such certificate.

                                  ARTICLE IX

                                  CUSTODIAN

   SECTION 9.1. APPOINTMENT AND DUTIES. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:

       (1) to receive and hold the securities owned by the Trust and deliver
    the same upon written or electronically transmitted order;

       (2) to receive and receipt for any moneys due to the Trust and deposit
    the same in its own banking department or elsewhere as the Trustees may
    direct;

       (3) to disburse such funds upon orders or vouchers;

all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.

   The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.

   SECTION 9.2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.

                                8

<PAGE>


                                  ARTICLE X

                               WAIVER OF NOTICE

   Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.

                                  ARTICLE XI

                                MISCELLANEOUS

   SECTION 11.1. LOCATION OF BOOKS AND RECORDS. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.

   SECTION 11.2. RECORD DATE. The Trustees may fix in advance a date as the
record date for the purpose of determining Shareholders entitled to notice
of, or to vote at, any meeting of Shareholders, or Shareholders entitled to
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. Such
date, in any case, shall be not more than ninety (90) days, and in case of a
meeting of Shareholders not less than ten (10) days, prior to the date on
which particular action requiring such determination of Shareholders is to be
taken. In lieu of fixing a record date the Trustees may provide that the
transfer books shall be closed for a stated period but not to exceed, in any
case, twenty (20) days. If the transfer books are closed for the purpose of
determining Shareholders entitled to notice of a vote at a meeting of
Shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting.

   SECTION 11.3. SEAL. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.

   SECTION 11.4. FISCAL YEAR. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.

   SECTION 11.5. ORDERS FOR PAYMENT OF MONEY. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.

                                 ARTICLE XII

                     COMPLIANCE WITH FEDERAL REGULATIONS

   The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.

                                 ARTICLE XIII

                                  AMENDMENTS

   These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended,

                                9

<PAGE>


adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration, or these By-Laws, a vote of the
Shareholders. The Trustees shall in no event adopt By-Laws which are in
conflict with the Declaration, and any apparent inconsistency shall be
construed in favor of the related provisions in the Declaration.

                                 ARTICLE XIV

                             DECLARATION OF TRUST

   The Declaration of Trust establishing TCW/DW Latin American Growth Fund,
dated February 25, 1992, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name TCW/DW
Latin American Growth Fund refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no
Trustee, Shareholder, officer, employee or agent of TCW/DW Latin American
Growth Fund shall be held to any personal liability, nor shall resort be had
to their private property for the satisfaction of any obligation or claim or
otherwise, in connection with the affairs of said TCW/DW Latin American
Growth Fund, but the Trust Estate only shall be liable.

                               10

<PAGE>
                         INVESTMENT ADVISORY AGREEMENT
 
     AGREEMENT  made as of the 5th day of February,  1993, and amended as of 
May 1, 1994, by and between TCW/DW Income and Growth Fund, an unincorporated 
business trust organized under the laws of the Commonwealth of  Massachusetts 
(hereinafter called the "Fund"),  and TCW  Funds  Management Inc.,  a California
corporation (hereinafter  called the "Investment Adviser"):
 
     WHEREAS, The Fund is engaged  in business as an open-end  management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
 
     WHEREAS,  The  Investment Adviser  is registered  as an  investment adviser
under the Investment Advisers Act of  1940 (the "Advisers Act"), and engages  in
the business of acting as investment adviser; and
 
     WHEREAS,  The  Fund  desires to  retain  the Investment  Adviser  to render
investment advisory  services in  the manner  and on  the terms  and  conditions
hereinafter set forth; and
 
     WHEREAS,  The Investment Adviser desires to be retained to perform services
on said terms and conditions;
 
     NOW, THEREFORE, this Agreement
 
                              W I T N E S S E T H:
 
that in  consideration of  the  premises and  the mutual  covenants  hereinafter
contained, the Fund and the Investment Adviser agree as follows:
 
1.      The  Fund hereby  retains the  Investment Adviser  to act  as investment
adviser of the Fund and, subject  to the supervision of the Trustees  of the 
Fund (the "Trustees"), to invest the Fund's assets as hereinafter set forth.
Without  limiting the generality of the  foregoing, the Investment Adviser shall
obtain and  evaluate  such  information  and advice  relating  to  the  economy,
securities  and commodities markets  and securities and  commodities as it deems
necessary or useful to discharge its duties hereunder; shall continuously invest
the assets of the Fund in a manner consistent with the investment objectives and
policies of  the Fund;  shall determine  the securities  and commodities  to  be
purchased,  sold or  otherwise disposed of  by the  Fund and the  timing of such
purchases, sales and dispositions; and shall take such further action, including
the placing of purchase and sale orders on behalf of the Fund, as the Investment
Adviser shall deem necessary or  appropriate. The Investment Adviser shall  also
furnish  to  or place  at  the disposal  of the  Fund  such of  the information,
evaluations, analyses  and opinions  formulated or  obtained by  the  Investment
Adviser  in the  discharge of  its duties as  the Fund  may, from  time to time,
reasonably request.
 
2.      The Investment Adviser shall,  at its own  expense, maintain such  staff
and  employ or retain such personnel and consult with such other persons as it  
shall from  time to  time  determine to  be necessary  or useful  to  the
performance  of  its  obligations  under this  Agreement.  Without  limiting the
generality of the foregoing, the staff  and personnel of the Investment  Adviser
shall  be  deemed  to include  persons  employed  or otherwise  retained  by the
Investment Adviser  to  furnish  statistical  and  other  factual  data,  advice
regarding economic factors and trends, information with respect to technical and
scientific  developments, and such  other information, advice  and assistance as
the Investment  Adviser may  desire. The  Investment Adviser  shall provide  the
Fund's  manager with such records and  information as may reasonably be required
by the Fund's manager pursuant to its obligations under its management agreement
with the Fund to maintain the Fund's books and records.
 
3.      The Fund will, from time to time, furnish or otherwise make available to
the Investment  Adviser such  financial  reports, proxy  statements  and other 
information  relating to  the business  and  affairs of  the Fund  as the
Investment Adviser may reasonably require in  order to discharge its duties and
obligations hereunder.
 

                                    1

<PAGE>

4.      The  Investment Adviser shall bear the  cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at its
own  expense,  pay  the compensation  of  its  directors,  officers  and
employees, if any, who are also Trustees or officers of the Fund.
 
5.      The Fund assumes and shall pay or cause to be paid all other expenses 
of the Fund (except expenses borne by the Fund's manager pursuant to a 
management agreement with the Fund), including without limitation: fees 
pursuant to any management agreement into which the Fund may enter; fees 
pursuant to  any plan of distribution that the  Fund may adopt; the  charges 
and expenses of any registrar, any custodian or depository appointed by the 
Fund for the safekeeping of its cash,  portfolio securities or  commodities 
and other  property, and  any stock  transfer  or dividend  agent or  agents 
appointed  by the  Fund; brokers' commissions chargeable to the Fund in 
connection with portfolio transactions  to which  the  Fund is  a  party; all 
taxes,  including securities  or commodities issuance and transfer taxes, 
and fees payable  by the Fund to federal, state  or other  governmental 
agencies; the  cost and expense of  engraving or printing of certificates 
representing  shares  of  the  Fund;  all  costs  and  expenses  in 
connection with the registration and maintenance of registration of the Fund 
and its  shares with the  Securities and Exchange Commission  and various 
states and other jurisdictions (including filing fees  and legal fees and 
disbursements  of counsel   and  the  costs  and  expenses  of  preparation,  
printing  (including typesetting)  and  distributing  prospectuses   and  
statements  of   additional information  for  such purposes);  all expenses  
of shareholders'  and Trustees' meetings and of preparing, printing and 
mailing proxy statements and reports  to shareholders;  fees and travel  
expenses of Trustees or  members of any advisory board or committee who are 
not employees of the Investment Adviser or the Fund's manager or any 
corporate affiliate of  either of them; all expenses incident  to the payment 
of any dividend or distribution program; charges and expenses of any outside  
service used for pricing of the  Fund's shares; charges and expenses of legal 
counsel,  including  counsel to  the  Trustees of  the  Fund who  are  not 
interested persons (as defined in the Act) of the Fund or the Investment 
Adviser or  the Fund's manager,  and of independent accountants,  in 
connection with any matter relating to the Fund; membership dues of industry 
associations;  interest payable on Fund borrowings; postage; insurance 
premiums on property or personnel (including  officers  and Trustees)  of  
the Fund  which  inure to  its benefit; extraordinary  expenses  (including,  
but  not  limited  to,  legal  claims  and liabilities  and litigation costs 
and  any indemnification related thereto); and all other charges and costs of 
the Fund's operation unless otherwise  explicitly provided herein.
 
6.      For  the services  to be  rendered by  the Investment  Adviser, the 
Fund shall pay  to the  Investment Adviser  monthly compensation determined 
by applying the following annual  rates to  the  Fund's  average  daily  net  
assets: 0.30% of daily net assets up to $500 million; and 0.28% of daily net 
assets over $500 million. Such calculation  shall be made by applying 1/365th 
of the annual rates to the Fund's net assets each day determined  as of the 
close of  business on that day or  the last  previous business day.  If this 
Agreement  becomes effective subsequent to the first day  of a month  or 
shall terminate before the last  day of a  month, compensation  for that part 
of the month  this Agreement is  in effect shall be prorated in a manner 
consistent  with the calculation of  the fees as set  forth above.
 
7.      In  the  event the  operating expenses  of  the Fund,  including 
amounts payable to the Investment  Adviser pursuant to  paragraph 6 hereof,  
for any  fiscal year ending on  a date on which this  Agreement is in effect, 
exceed the expense limitations applicable to the Fund imposed by state 
securities  laws or  regulations thereunder,  as such limitations  may be 
raised  or lowered from time to time, the Investment Adviser shall reduce its 
advisory fee to the extent of 40% of such excess and, if and to the extent 
required by law, pursuant to any such laws or regulations,  will reimburse 
the Fund  for 40% of annual  operating expenses  in excess of any expense  
limitation that may be applicable; provided, however, there shall be excluded 
from such expenses the amount of any  interest, taxes,  distribution  fees,  
brokerage  commissions  and  extraordinary expenses (including but not 
limited to legal claims and liabilities and litigations costs and any  
indemnification related  thereto) paid  or payable  by the  Fund.  Such 
reduction,  if any, shall be computed and  accrued weekly, shall be settled 
on a monthly basis, and shall be based upon the expense limitation applicable 
to  the Fund  as at the end  of the last business  day of the month.  Should 
two or more such expense limitations be applicable  as at the end of  the 
last full week  of the month, that expense limitation which results in the 
largest reduction in the Investment Adviser's fee shall be applicable.

                                     2

<PAGE>

     For purposes of this provision, should any applicable expense limitation be
based  upon the gross income  of the Fund, such  gross income shall include, but
not be limited to, interest on  debt securities in the Fund's portfolio  accrued
to  and including the last day of the Fund's fiscal year, and dividends declared
on equity securities in the Fund's portfolio, the record dates for which fall on
or prior to the  last day of such  fiscal year, but not  include gains from  the
sale of securities.
 
8.      The  Investment Adviser will  use its best efforts  in its investment of
the Fund's assets, but in the absence of willful misfeasance, bad faith, gross 
negligence  or  reckless  disregard  of  its  obligations  hereunder,  the
Investment  Adviser shall not be liable to the  Fund or any of its investors for
any error of  judgment or  mistake of  law or  for any  act or  omission by  the
Investment Adviser or for any losses sustained by the Fund or its investors. The
Adviser  shall be indemnified by the Fund as  an agent of the Fund in accordance
with the terms of Section 4.8 of the Fund's By-Laws.
 
9.      Nothing contained in this Agreement shall prevent the Investment Adviser
or any affiliated person of the Investment Adviser from acting as Investment  
adviser  or  manager  for  any  other  person,  firm  or corporation (including
any  other  investment  company),  whether  or  not  the  investment objectives 
or policies of any such other person, firm or corporation are similar to those 
of the Fund, and shall not  in any way bind or restrict the Investment Adviser 
or  any such  affiliated  person from  buying,  selling or  trading  any
securities  or commodities for their  own accounts or for  the account of others
for whom the  Investment Adviser or  any such affiliated  person may be  acting.
Nothing  in this  Agreement shall  limit or restrict  the right  of any Trustee,
officer or employee of the Investment Adviser to engage in any other business or
to devote his time and attention in  part to the management or other aspects  of
any other business whether of a similar or dissimilar nature.
 
10.     This Agreement shall remain in effect until April 30, 1995 and from year
to  year  thereafter  provided  such continuance is approved  at least annually 
by the vote of holders of a majority, as defined in the Act, of the outstanding
voting securities of  the Fund or  by the Board  of Trustees of the Fund; 
provided that in either event  such continuance is also approved  annually by  
the vote of a  majority of the Trustees  of the Fund who  are not parties to
this Agreement  or "interested  persons" (as  defined in  the Act)  of any  such
party,  which vote must be cast in person at a meeting called for the purpose of
voting on such approval; provided, however, that  (a) the Fund may, at any  time
and  without the  payment of any  penalty, terminate this  Agreement upon thirty
days' written notice to the Investment  Adviser, either by majority vote of  the
Trustees  of the  Fund or by  the vote of  a majority of  the outstanding voting
securities of the Fund;  (b) this Agreement shall  immediately terminate in  the
event  of  its assignment  (to  the extent  required by  the  Act and  the rules
thereunder)  unless  such  automatic  terminations  shall  be  prevented  by  an
exemptive  order  of  the  Securities  and  Exchange  Commission;  and  (c)  the
Investment Adviser may terminate  this Agreement without  payment of penalty  on
thirty  days' written notice to the Fund.  Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed post-paid, to the  other
party at the principal office of such party.
 
11.     This Agreement may be amended by the parties without the vote or consent
of the shareholders of the Fund to supply any omission, to cure, correct or  
supplement any ambiguous, defective or  inconsistent provision hereof, or if
they deem  it  necessary  to  conform this  Agreement  to  the  requirements  of
applicable  federal laws or regulations, but neither the Fund nor the Investment
Adviser shall be liable for failing to do so.
 
12.     This Agreement shall  be construed in  accordance with the  laws of  the
State  of New  York and  the applicable  provisions of  the Act.  To the extent
the applicable law  of the State  of New York, or  any of the  provisions 
herein, conflict with the applicable provisions of the Act, the Advisers Act or
any rules, regulations or orders of the Securities and Exchange Commission, the
latter shall control.
 
13.     The  Fund acknowledges that  Trust Company of the  West, an affiliate of
the Investment Adviser, owns its own  name, initials and logo. The  Fund agrees
to change  its name  at the  request of  the Investment  Adviser if this
Agreement is terminated for any reason.

                                    3

<PAGE>

14.     The Declaration of Trust establishing TCW/DW Income and Growth Fund,
dated November 20, 1992, a copy  of which, together with all  amendments thereto
(the "Declaration"), is on file in the office  of the Secretary of the 
Commonwealth of  Massachusetts, provides  that the  name TCW/DW  Income and
Growth  Fund  refers  to  the Trustees  under  the  Declaration  collectively as
Trustees, but not  as individuals  or personally; and  no Trustee,  shareholder,
officer, employee or agent of TCW/DW Income and Growth Fund shall be held to
any  personal liability, nor shall  resort be had to  their private property for
the satisfaction of any obligation or claim or otherwise, in connection with the
affairs of said  TCW/DW Income and Growth Fund, but  the Trust Estate  only
shall be liable.
 
     IN  WITNESS WHEREOF,  the parties hereto  have executed  and delivered this
Agreement, as amended, on May 1, 1994, in New York, New York.
 
                                          TCW/DW INCOME AND GROWTH FUND
 
                                          By ...................................
 
Attest:
 Marilyn K. Cranney
 .....................................
 
                                          TCW FUNDS MANAGEMENT, INC.
 
                                          By ...................................
 
                                          By ...................................

Attest:
 Lindsey Stibbend
 .....................................
 


                                       4

<PAGE>


                        TCW/DW INCOME AND GROWTH FUND

                             DISTRIBUTION AGREEMENT

      AGREEMENT made as of this 30th day of June, 1993, between TCW/DW Income
and Growth Fund, an unincorporated business trust organized under the laws
of the Commonwealth of Massachusetts (the "Fund" or "Trust"), and Dean Witter
Distributors Inc., a Delaware corporation (the "Distributor");

                          W  I  T  N  E  S  S  E  T  H:

      WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a non-diversified open-end investment company
and it is in the interest of the Fund to offer its shares for sale continuously,
and

     WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of the Fund's transferable
shares of beneficial interest, of $.01 par value ("Shares"), in order to promote
the growth of the Fund and facilitate the distribution of its shares.

     NOW, THEREFORE, the parties agree as follows:

     SECTION 1. APPOINTMENT OF THE DISTRIBUTOR. (a) The Fund hereby appoints the
Distributor as the principal underwriter of the Fund to sell Shares to the
public on the terms set forth in this Agreement and the Fund's Prospectus and
the Distributor hereby accepts such appointment and agrees to act hereunder. The
Fund, during the term of this Agreement, shall sell Shares to the Distributor
upon the terms and conditions set forth herein.

     (b) The Distributor agrees to purchase Shares, as principal for its own
account, from the Fund and to sell Shares as principal to investors, and
securities dealers, including Dean Witter Reynolds Inc. ("DWR"), an affiliate of
the Distributor, upon the terms described herein and in the Fund's prospectus
(the "Prospectus") and statement of additional information included in the
Fund's registration statement (the "Registration Statement") most recently filed
from time to time with the Securities and Exchange Commission (the "SEC") and
effective under the Securities Act of 1933, as amended (the "1933 Act"), and
1940 Act or as said Prospectus may be otherwise amended or supplemented and
filed with the SEC pursuant to Rule 497 under the 1933 Act.

     SECTION 2. EXCLUSIVE NATURE OF DUTIES. The Distributor shall be the
exclusive principal underwriter and distributor of the Fund, except that the
exclusive rights granted to the Distributor to sell the Shares shall not apply
to Shares issued by the Fund: (i) in connection with the merger or consolidation
of any other investment company or personal holding company with the Fund or the
acquisition by purchase or otherwise of all (or substantially all) the assets or
the outstanding shares of any such company by the Fund; or (ii) pursuant to
reinvestment of dividends or capital gains distributions; or (iii) pursuant to
the reinstatement privilege afforded redeeming shareholders.

     SECTION 3. PURCHASE OF SHARES FROM THE TRUST. (a) The Distributor shall
have the right to buy from the Trust the Shares needed, but not more than the
Shares needed (except for clerical errors in transmission), to fill
unconditional orders for Shares placed with the Distributor by investors and
securities dealers. The price which the Distributor shall pay for the Shares so
purchased from the Fund shall be the net asset value, determined as set forth in
the Prospectus.

     (b) The shares are to be resold by the Distributor at the net asset value
per share, as set forth in the Prospectus to investors or to securities dealers
of its choice, including DWR, who have entered into selected dealer agreements
with the Distributor pursuant to Section 7 ("Selected Dealers").

     (c) The Fund shall have the right to suspend the sale of the Shares at
times when redemption is suspended pursuant to the conditions set forth in
Section 4(d) hereof. The Fund shall also have the right to suspend the sale 
of the Shares if trading on the New York Stock Exchange shall have been 
suspended, if a banking moratorium shall have been declared by federal or 
New York authorities, or if there shall have been some other extraordinary 
event which, in the judgment of the Fund, makes it impracticable to sell the 
Shares.

                                    1

<PAGE>

      (d) The Fund, or any agent of the Fund designated in writing by the Fund,
shall be promptly advised of all purchase orders for Shares received by the
Distributor. Any order may be rejected by the Fund; provided, however, that the
Fund will not arbitrarily or without reasonable cause refuse to accept orders
for the purchase of Shares. The Distributor will confirm orders upon their
receipt, and the Fund (or its agent) upon receipt of payment therefor and
instructions will deliver share certificates for such Shares or a statement
confirming the issuance of Shares. Payment shall be made to the Fund in New York
Clearing House funds. The Distributor agrees to cause such payment and such
instructions to be delivered promptly to the Fund (or its agent).

     With respect to Shares sold by any Selected Dealer, the Distributor is
authorized to direct the Fund's transfer agent to receive instructions directly
from the Selected Dealer on behalf of the Distributor as to registration of
Shares in the names of investors and to confirm issuance of the Shares to such
investors. The Distributor is also authorized to instruct the transfer agent to
receive payment directly from the Selected Dealer on behalf of the Distributor,
for prompt transmittal to the Fund's custodian, of the purchase price of the
Shares. In such event the Distributor shall obtain from the Selected Dealer and
maintain a record of such registration instructions and payments.

     SECTION 4. REPURCHASE OR REDEMPTION OF SHARES. (a) Any of the 
outstanding Shares may be tendered for redemption at any time, and the Fund 
agrees to redeem the Shares so tendered in accordance with the applicable 
provisions set forth in the Prospectus. The price to be paid to redeem the 
Shares shall be equal to the net asset value determined as set forth in the 
Prospectus. All payments by the Fund hereunder shall be made in the manner 
set forth below.

     Upon any redemption of Shares the Fund shall pay the total amount of the 
redemption price in accordance with applicable provisions of the Prospectus in
New York Clearing House funds, or in portfolio securities in event of 
redemptions in kind, on or before the seventh day subsequent to its having
received the notice of redemption in proper form.

     (b) The Distributor is authorized, as agent for the Fund, to repurchase
Shares, represented by a share certificate which is delivered to any office of
the Distributor in accordance with applicable provisions set forth in the
Prospectus. The Distributor shall promptly transmit to the transfer agent of the
Fund for redemption all Shares so delivered. The Distributor shall be
responsible for the accuracy of instructions transmitted to the Fund's transfer
agent in connection with all such repurchases.

     (c) The Distributor is authorized, as agent for the Fund, to repurchase
Shares held in a shareholder's account with the Fund for which no share
certificate has been issued, upon the telephonic or telegraphic request of the
shareholder, or at the discretion of the Distributor. The Distributor shall
promptly transmit to the transfer agent of the Fund, for redemption, all such
orders for repurchase of shares. Payment for shares repurchased may be made by
the Fund to the Distributor for the account of the shareholder. The Distributor
shall be responsible for the accuracy of instructions transmitted to the Fund's
transfer agent in connection with all such repurchases.

     (d) Redemption of Shares or payment by the Fund may be suspended at times
when the New York Stock Exchange is closed, when trading on said Exchange is
restricted, when an emergency exists as a result of which disposal by the Fund 
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets, or 
during any other period when the Securities and Exchange Commission, by order,
so permits.

     With respect to Shares tendered for redemption or repuchase by any Selected
Dealer on behalf of its customers, the Distributor is authorized to instruct the
transfer agent of the Fund to accept orders for redemption or repurchase
directly from the Selected Dealer on behalf of the Distributor and to instruct
the Fund to transmit payments for such redemptions and repurchases directly to
the Selected Dealer on behalf of the Distributor for the account of the
shareholder. The Distributor shall obtain from the Selected Dealer and maintain
a record of such orders. The Distributor is further authorized to obtain from
the Fund; and shall maintain, a record of payments made directly to the
Selected Dealer on behalf of the Distributor.

                                    2

<PAGE>

     SECTION 5. DUTIES OF THE FUND. (a) The Fund shall furnish to the
Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use in connection with the
distribution of the Shares, including one certified copy, upon request by the
Distributor, of all financial statements prepared by the Fund and examined by
independent accountants. The Fund shall, at the expense of the Distributor, make
available to the Distributor such number of copies of the Prospectus as the
Distributor shall reasonably request.

     (b) The Fund shall take, from time to time, but subject to the necessary
approval of its shareholders, all necessary action to fix the number of its
authorized Shares and to register Shares under the 1933 Act, to the end that
there will be available for sale such number of Shares as investors may
reasonably be expected to purchase.

     (c) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of the Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 8(c) hereof, the expense of
qualification and maintenance of qualification shall be borne by the Fund. The
Distributor shall furnish such information and other material relating to its
affairs and activities as may be required by the Fund in connection with such
qualification.

     (d) The Fund shall, at the expense of the Distributor, furnish, in
reasonable quantities upon request by the Distributor, copies of annual and
interim reports of the Fund.

     SECTION 6. DUTIES OF THE DISTRIBUTOR. (a) The Distributor shall sell Shares
of the Fund through DWR and may sell Shares through other securities dealers
and its own Account Executives, if any, and shall devote reasonable time and
effort to promote sales of the Shares, but shall not be obligated to sell any
specific number of Shares. The services of the Distributor hereunder are not
exclusive and it is understood that the Distributor may act as principal
underwriter for other registered investment companies. It is also understood
that Selected Dealers, including DWR, may also sell shares for other registered
investment companies.

     (b) Neither the Distributor nor any Selected Dealer shall give any
information or make any representations, other than those contained in the
Registration Statement or related Prospectus and any sales literature
specifically  approved by the Fund.

     (c) The Distributor agrees that it will comply with the terms and
limitations of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. ("NASD").

     SECTION 7. SELECTED DEALERS AGREEMENTS. (a) The Distributor shall have the
right to enter into selected dealers agreements with Selected Dealers for the
sale of Shares. In making agreements with Selected Dealers, the Distributor
shall act only as principal and not as agent for the Fund. Shares sold to
Selected Dealers shall be for resale by such dealers only at the public offering
price set forth in the Prospectus.

     (b) Within the United States, the Distributor shall offer and sell Shares
only to such Selected Dealers as are members in good standing of the NASD.

     (c) The Distributor shall adopt and follow procedures, as approved by the
Fund, for the confirmation of sales of Shares to investors and Selected Dealers,
the collection of amounts payable by investors and Selected Dealers on such
sales, and the cancellation of unsettled transactions, as may be necessary to
comply with the requirements of the NASD, as such requirements may from time to
time exist.

     SECTION 8. PAYMENT OF EXPENSES. (a) The Distributor shall bear all expenses
incurred by it in connection with its duties and activities under this Agreement
including the payment to Selected Dealers of any sales commissions service fees,
and other expenses for sales of the Fund's shares (except such expenses as are
specifically undertaken herein by the Trust) incurred or paid by Selected
Dealers, including DWR. 

                                    3

<PAGE>

     (b) The Fund shall bear all costs and expenses of the Fund, including 
fees and disbursements of legal counsel including counsel to the Trustees of 
the Fund who are not interested persons (as defined in the 1940 Act) of the 
Fund or the Distributor, and independent accountants, in connection with the 
preparation and filing of any required Registration Statements and 
Prospectuses and all amendments and supplements thereto, and the expense of 
preparing, printing, mailing and otherwise distributing prospectuses and 
statements of additional information, annual or interim reports or proxy 
materials to shareholders.

     (c) The Fund shall bear the cost and expenses of qualification of the
Shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the United States
or other jurisdictions as shall be selected by the Fund and the Distributor
pursuant to Section 5(c) hereof and the cost and expenses payable to each such
state for continuing qualification therein until the Fund decides to discontinue
such qualification pursuant to Section 5(c) hereof.

     SECTION 9. INDEMNIFICATION. (a) The Fund shall indemnify and hold harmless
the Distributor and each person, if any, who controls the Distributor against
any loss, liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith) arising by reason
of any person acquiring any Shares, which may be based upon the 1933 Act, or on
any other statute or at common law, on the ground that the Registration
Statement or related Prospectus and Statements of Additional Information, as
from time to time amended and supplemented, or the annual or interim reports to
shareholders of the Fund, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Fund in connection therewith by or on behalf of the
Distributor; provided, however, that in no case (i) is the indemnity of the Fund
in favor of the Distributor and any such controlling persons to be deemed to
protect the Distributor or any such controlling persons thereof against any
liability to the Fund or its security holders to which the Distributor or any
such controlling persons would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Agreement; or (ii) is the Fund to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Distributor or any such controlling persons, unless the Distributor or any such
controlling persons, as the case may be, shall have notified the Fund in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Distributor or such controlling persons (or after the Distributor or such
controlling persons shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall not relieve it
from any liability which it may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Fund will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense, of any suit brought to
enforce any such liability, but if the Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor or such controlling person or persons, defendant or defendants in
the suit. In the event the Fund elects to assume the defense of any such suit 
and retain such counsel, the Distributor or such controlling persons or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any 
additional counsel retained by them, but, in case the Fund does not elect to 
assume the defense of any such suit, it will reimburse the Distributor or such 
controlling person or persons, defendant or defendants in the suit, for the 
reasonable fees and expenses of any counsel retained by them. The Fund shall 
promptly notify the Distributor of the commencement of any litigation or 
proceedings against it or any of its officers or trustees in connection with 
the issuance or sale of the Shares.

     (b) (i) The Distributor shall indemnify and hold harmless the Fund and each
of its Trustees and officers and each person, if any, who controls the Fund
against any loss, liability, claim, damage, or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Fund in writing by or on behalf of the
Distributor for use in connection with the Registration Statement or related
Prospectus and Statement of Additional Information, as from time to time
amended, or the annual or interim reports to shareholders.

                                     4

<PAGE>

     (ii) The Distributor shall indemnify and hold harmless the Trust and the
Trust's transfer agent, individually and in its capacity as the Trust's transfer
agent, from and against any claims, damages and liabilities which arise as a
result of actions taken pursuant to instructions from, or on behalf of, the
Distributor to: (1) redeem all or a part of shareholder accounts in the Trust
pursuant to subsection 4(c) hereof and pay the proceeds to, or as directed by,
the Distributor for the account of each shareholder whose Shares are so
redeemed; and (2) register Shares in the names of investors, confirm the
issuance thereof and receive payment therefor pursuant to subsection 3(d).

     (iii) In case any action shall be brought against the Fund or any person to
indemnified by this subsection 9(b) in respect of which indemnity may be sought
against the Distributor, the Distributor shall have the rights and duties given
to the Fund, and the Fund and each person so indemnified shall have the rights
and duties given to the Distributor by the provisions of subsection (a) of this
Section 9.

     (c) If the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to herein, then each indemnifiying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Fund on the one hand and the Distributor on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Fund on the one hand and
the Distributor on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Fund on the one hand and
the Distributor on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Fund bear to the total compensation received by the Distributor, in each case as
set forth in the Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Fund or the Distributor and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Fund and the Distributor agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such claim.
Notwithstanding the provisions of this subsection (c), the Distributor shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Shares distributed by it to the public were offered to the 
public exceeds the amount of any damages which it has otherwise been required 
to pay by reason of such untrue or alleged untrue statement or omission or 
alleged omission. No person guilty of fraudulent misrepresentation (within the 
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

     SECTION 10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement
shall become effective as of the date first above written and shall remain in
force until April 30, 1994, and thereafter, but only so long as such continuance
is specifically approved at least annually by (i) the Board of Trustees of the
Fund, or by the vote of a majority of the outstanding voting securities of the
Fund, cast in person or by proxy, and (ii) a majority of those Trustees who are
not parties to this Agreement or interested persons of any such party and who
have no direct or indirect financial interest in this Agreement or in the
operation of the Fund's Rule 12b-1 Plan or in any agreement related thereto,
cast in person at a meeting called for the purpose of voting upon such approval.

     This Agreement may be terminated at any time without the payment of any
penalty, by the Trustees of the Fund, by a majority of the Trustees of the Fund
who are not interested persons of the Fund 

                                      5

<PAGE>

and who have no direct or indirect financial interest in this Agreement, or by 
vote of a majority of the outstanding voting securities of the Fund, or by the 
Distributor, on sixty days' written notice to the other party. This Agreement 
shall automatically terminate in the event of its assignment.

     The terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interested person", when used in this Agreement, shall have
the respective meanings specified in the 1940 Act.

     SECTION 11. AMENDMENTS OF THIS AGREEMENT. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the Trustees
of the Fund, or by the vote of a majority of outstanding voting securities of
the Fund, and (ii) a majority of those Trustees of the Fund who are not parties
to this Agreement or interested persons of any such party and who have no direct
or indirect financial interest in this Agreement or in any Agreement related to
the Fund's Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act, cast
in person at a meeting called for the purpose of voting on such approval.

     SECTION 12. GOVERNING LAW. This Agreement shall be construed in accordance
with the law of the State of New York and the applicable provisions of the 1940
Act. To the extent the applicable law of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.

     SECTION 13. PERSONAL LIABILITY. The Declaration of the Trust establishing
TCW/DW Income and Growth Fund, dated November 20, 1992, a copy of which,
together with all amendments thereto (the "Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, provides that the
name TCW/DW Income and Growth Fund refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of TCW/DW Income and
Growth Fund shall be held to any personal liability, nor shall resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise, in connection with the affairs of said TCW/DW Income and Growth
Fund, but the Trust Estate only shall be liable.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first written in New York, New York.
 
                                           TCW/DW INCOME AND GROWTH FUND
                                           By: 
                                              ------------------------

                                           DEAN WITTER DISTRIBUTORS INC.
                                           By:
                                              ------------------------


                                        6


<PAGE>

                          DEAN WITTER DISTRIBUTORS INC.

Gentlemen:

     Dean Witter Distributors, Inc. (the "Distributor") has a distribution
agreement (the "Distribution Agreement") with TCW/DW Income and Growth Fund,
a Massachusetts business trust (the "Fund"), pursuant to which it acts as the
Distributor for the sale of the Fund's shares of beneficial interest, par value
$0.01 per share (the "Shares").  Under the Distribution Agreement, the 
Distributor has the right to distribute Shares for resale.

     The Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended, and the Shares being offered to the
public are registered under the Securities Act of 1933, as amended.  You have
received a copy of the Distribution Agreement between us and the Fund and
reference is made herein to certain provisions of such Distribution Agreement.
The terms used herein, including "Prospectus" and "Registration Statement" of
the Fund and "Selected Dealer" shall have the same meaning in this Agreement as
in the Distribution Agreement.  As principal, we offer to sell shares to your 
customers, upon the following terms and conditions:

     1.   In all sales of Shares to the public you shall act on behalf of your
customers, and in no transaction shall you have any authority to act as agent
for the Fund, for us or for any other Selected Dealer.

     2.   Orders received from you will be accepted through us or on our behalf
only at the net asset value applicable to each order, as set forth in the
current Prospectus.  The procedure relating to the handling of orders shall be
subject to instructions which we or the Fund shall forward from time to time to
you.  All orders are subject to acceptance or rejection by the Distributor or
the Fund in the sole discretion of either.

     3.   You shall not place orders for any Shares unless you have already
received purchase orders for such Shares at the applicable net asset values and
subject to the terms hereof and of the Distribution Agreement and the
Prospectus.  You agree that you will not offer or sell any of the Shares except
under circumstances that will result in compliance with the applicable Federal
and state securities laws and that in connection with sales and offers to sell
Shares you will furnish to each person to whom any such sale or offer is made a
copy of the Prospectus (as then amended or supplemented) and will not furnish to
any person any information relating to the Shares, which is inconsistent in any
respect with the information contained in the Prospectus (as then amended or
supplemented) or cause any advertisement to be published by radio or television
or in any newspaper or posted in any public place or use any sales promotional
material without our consent and the consent of the Fund.

     4.   The Distributor will compensate you for sales of shares of the Fund
and personal services to Fund shareholders by paying you a sales charge and/or
other commission (which may be in the form of a gross sales credit and/or an
annual residual commission) and/or service fee, under the terms as are set 
forth in the Fund's Prospectus.

     5.   If any Shares sold to your customers under the terms of this Agreement
are repurchased by us for the account of the Fund or are tendered for redemption
within seven business days after the date of the confirmation of the original
purchase by you, it is agreed that you shall forfeit your right to, and refund
to us, any commission received by you with respect to such Shares.

     6.   No person is authorized to make any representations concerning the
Shares or the Fund except those contained in the current Prospectus and in such
printed information subsequently issued by us or the Fund as information
supplemental to such Prospectus.  In selling Shares, you shall rely solely on
the representations contained in the Prospectus and supplemental information
mentioned above.  Any printed information which we furnish you other than the
Prospectus and the Fund's periodic reports and proxy solicitation material are
our sole responsibility and not the responsibility of the Fund, and you agree
that the Fund shall have no liability or responsibility to you in these respects
unless expressly assumed in connection therewith.


                                        1
<PAGE>

     7.   You agree to deliver to each of the purchasers making purchases a copy
of the then current Prospectus at or prior to the time of offering or sale, and
you agree thereafter to deliver to such purchasers copies of the annual and 
interim reports and proxy solicitation materials of the Fund.  You further 
agree to endeavor to obtain proxies from such purchasers.  Additional copies 
of the Prospectus, annual or interim reports and proxy solicitation materials 
of the Fund will be supplied to you in reasonable quantities upon request.

     8.   You are hereby authorized (i) to place orders directly with the Fund
or its agent for shares of the Fund to be sold by us subject to the applicable
terms and conditions governing the placement of orders for the purchase of 
Fund shares, as set forth in the Distribution Agreement, and (ii) to tender 
shares directly to the Fund or its agent for redemption subject to the
applicable terms and conditions set forth in the Distribution Agreement.

     9.   We reserve the right in our discretion, without notice, to suspend
sales and withdraw the offering of Shares entirely.  Each party hereto has the
right to cancel this agreement upon notice to the other party.

     10.  I. You shall indemnify and hold harmless the Distributor, from and
against any claims, damages and liabilities which arise as a result of action
taken pursuant to instructions from you, or on your behalf to: a) (i) place
orders for Shares of the Fund with the Fund's transfer agent or direct the
transfer agent to receive instructions for the order of Shares, and (ii) accept
monies or direct that the transfer agent accept monies as payment for the order
os such Shares, all as contemplated by and in accordance with Section 3 of the
Distribution Agreement; b) (i) place orders for the redemption of Shares of the
Fund with the Fund's transfer agent or direct the transfer agent to receive
instruction for the redemption of Shares and (ii) to pay redemption proceeds or
to direct that the transfer agent pay redemption proceeds in connection with
orders for the redemption of Shares, all as contemplated by and in accordance
with Section 4 of the Distribution Agreement; provided, however, that in no
case, (i) is this indemnity in favor of the Distributor and any such controlling
persons to be deemed to protect the Distributor or any such controlling persons
thereof against any liability to which the Distributor or any such controlling
persons would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement or the Distribution
Agreement; or (ii) are you to be liable under the indemnity agreement contained
in this paragraph with respect to any claim made against the Distributor or any
such controlling persons, unless the Distributor or any such controlling
persons, as the case may be, shall have notified you in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Distributor or such controlling persons (or after the Distributor or such
controlling persons shall have received notice of such service on any designated
agent), but failure to notify you of any such claim shall not relieve you from
any liability which you may have to the person against whom such action is
brought otherwise than on account of the indemnity agreement contained in this
paragraph. You will be entitled to participate at your own expense in the
defense, or, if you so elect, to assume the defense, of any suit brought to
enforce any such liability, but if you elect to assume the defense, such defense
shall be conducted by counsel chosen by you and satisfactory to the Distributor
or such controlling person or persons, defendant or defendants in the suit. In
the event you elect to assume the defense of any such suit and retain such
counsel, the Distributor or such controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case you do not elect to assume the defense of
any such suit, you will reimburse the Distributor or such controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. You shall promptly notify the
Distributor of the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the issuance or sale of the
Shares.

     II.  If the indemnification provided for in this Section 10 is unavailable
or insufficient to hold harmless the Distributor, as provided above in respect
of any losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to herein, then you shall contribute to the amount paid or
payable by the Distributor as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by you on the one hand and
the


                                        2
<PAGE>

Distributor on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, than you shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also your relative fault on the one hand and the relative
fault of the Distributor on the other, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. You and the Distributor agree that it would not be
just and equitable if contribution were determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to above. The amount paid or payable by the Distributor
as a result of the losses, claims, damages, liabilities or expenses (or actions
in respect thereof) referred to above shall be deemed to include any legal or
other expenses reasonably incurred by the Distributor in connection with
investigating or defending any such claim. Notwithstanding the provisions of
this subsection (II), you shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares distributed by
it to the public were offered to the public exceeds the amount of any damages
which it has otherwise been required to pay be reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of
1933 Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.

     11.  We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the distribution and
redemption of Fund shares.  We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by us herein.  Nothing
contained in this paragraph is intended to operate as, and the provisions of
this paragraph shall not in any way whatsoever constitute, a waiver by you of
compliance with any provision of the Securities Act of 1933, as amended, or of
the rules and regulations of the Securities and Exchange Commission issued
thereunder.

     12.  You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States, we
both hereby agree to abide by the Rules of Fair Practice of such Association.

     13.  Upon application to us, we will inform you as to the states in which
we believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such states, but we assume no
responsibility or obligation as to your right to sell Shares in any
jurisdiction.

     14.  All communications to us should be sent to the address shown below.
Any notice to you shall be duly given if mailed or telegraphed to you at the
address specified by you below.


                                        3
<PAGE>

     15.  This Agreement shall become effective as of the date of your
acceptance hereof, provided that you return to us promptly a signed and dated
copy.


                                   DEAN WITTER  DISTRIBUTORS INC.

                                   By
                                     --------------------------------------
                                             (Authorized Signature)


Please return one signed copy
     of this agreement to:

Dean Witter Distributors Inc.
Two World Trade Center
New York, New York 10048
Accepted:

Firm Name: NATIONS SECURITIES
           -------------------------

By:
   ---------------------------------

Address: 4201 Congress St. Suite 245
        ----------------------------

         Charlotte, NC 28209
- ------------------------------------

Date:  6/7/93
     -------------------------------


                                        4
<PAGE>

                        TCW/DW INCOME AND GROWTH FUND

                           SELECTED DEALERS AGREEMENT

Gentlemen:

     Dean Witter Distributors, Inc. (the "Distributor") has a distribution 
agreement (the "Distribution Agreement") with TCW/DW Income and Growth Fund, 
a Massachusetts business trust (the "Fund"), pursuant to which it acts as the 
Distributor for the sale of the Fund's shares of beneficial interest, par 
value $0.01 per share (the "Shares").  Under the Distribution Agreement, the 
Distributor has the right to distribute Shares for resale.

     The Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended, and the Shares being offered to the
public are registered under the Securities Act of 1933, as amended.  You have
received a copy of the Distribution Agreement between us and the Fund and
reference is made herein to certain provisions of such Distribution Agreement.
The terms used herein, including "Prospectus" and "Registration Statement" of
the Fund and "Selected Dealer" shall have the same meaning in this Agreement as
in the Distribution Agreement.  As principal, we offer to sell shares to you, as
a Selected Dealer, upon the following terms and conditions:

     1.   In all sales of Shares to the public you shall act as dealer for your
own account, and in no transaction shall you have any authority to act as agent
for the Fund, for us or for any other Selected Dealer.

     2.   Orders received from you will be accepted through us or on our behalf
only at the net asset value applicable to each order, as set forth in the
current Prospectus.  The procedure relating to the handling of orders shall be
subject to instructions which we or the Fund shall forward from time to time to
you.  All orders are subject to acceptance or rejection by the Distributor or
the Fund in the sole discretion of either.

     3.   You shall not place orders for any Shares unless you have already
received purchase orders for such Shares at the applicable net asset values and
subject to the terms hereof and of the Distribution Agreement and the
Prospectus.  You agree that you will not offer or sell any of the Shares except
under circumstances that will result in compliance with the applicable Federal
and state securities laws and that in connection with sales and offers to sell
Shares you will furnish to each person to whom any such sale or offer is made a
copy of the Prospectus (as then amended or supplemented) and will not furnish to
any person any information relating to the Shares, which is inconsistent in any
respect with the information contained in the Prospectus (as then amended or
supplemented) or cause any advertisement to be published by radio or television
or in any newspaper or posted in any public place or use any sales promotional
material without our consent and the consent of the Fund.

     4.   The Distributor will compensate you for sales of shares of the Fund
and personal services to Fund shareholders by paying you a sales charge and/or
other commissions, which may be in the form of a gross sales credit and/or an
annual residual commission and/or service fee, under the terms and in the
percentage amounts as may be in effect from time to time by the Distributor.

     5.   You shall not withhold placing orders received from your customers so
as to profit yourself as a result of such withholding; e.g., by a change in the
"net asset value" from that used in determining the offering price to your
customers.

     6.   If any Shares sold to you under the terms of this Agreement are
repurchased by us for the account of the Fund or are tendered for redemption
within seven business days after the date of the confirmation of the original
purchase by you, it is agreed that you shall forfeit your right to, and refund
to us, any commission received by you with respect to such Shares.

     7.   No person is authorized to make any representations concerning the
Shares or the Fund except those contained in the current Prospectus and in such
printed information subsequently issued by us or the Fund as information
supplemental to such Prospectus.  In purchasing Shares through us you
shall rely solely on the representations contained in the Prospectus and
supplemental information above mentioned.  Any printed information which we
furnish you other than the Prospectus and the Fund's periodic reports and proxy

                                        1
<PAGE>

solicitation material are our sole responsibility and not the responsibility of
the Fund, and you agree that the Fund shall have no liability or responsibility
to you in these respects unless expressly assumed in connection therewith.

     8.   You agree to deliver to each of the purchasers making purchases from
you a copy of the then current Prospectus at or prior to the time offering or
sale and you agree thereafter to deliver to such purchasers copies of the annual
and interim reports and proxy solicitation materials of the Fund.  You further
agree to endeavor to obtain proxies from such purchasers.  Additional copies of
the Prospectus, annual or interim reports and proxy solicitation materials of
the Fund will be supplied to you in reasonable quantities upon request.

     9.   You are hereby authorized (i) to place orders directly with the Fund
or its agent for shares of the Fund to be sold by us to you subject to the
applicable terms and conditions governing the placement of orders of the
purchase of Fund shares, as set forth in the Distribution Agreement, and (ii) to
tender shares directly to the Fund or its agent for redemption subject to the
applicable terms and conditions set forth in the Distribution Agreement.

     10.  We reserve the right in our discretion, without notice, to suspend
sales and withdraw the offering of Shares entirely.  Each party hereto has the
right to cancel this agreement upon notice to the other party.

     11.  We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the distribution and
redemption of Fund shares.  We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by us herein.  Nothing
contained in this paragraph is intended to operate as, and the provisions of
this paragraph shall not in any way whatsoever constitute, a waiver by you of
compliance with any provision of the Securities Act of 1933, as amended, or of
the rules and regulations of the Securities and Exchange Commission issued
thereunder.

     12.  You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States, we
both hereby agree to abide by the Rules of Fair Practice of such Association.

     13.  Upon application to us, we will inform you as to the states in which
we believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such states, but we assume no
responsibility or obligation as to your right to sell Shares in any 
jurisdiction.

     14.  All communications to us should be sent to the address shown below.
Any notice to you shall be duly given if mailed or telegraphed to you at the
address specified by you below.

     15.  This Agreement shall become effective as of the date of your
acceptance hereof, provided that you return to us promptly a signed and dated
copy.


                                   DEAN WITTER DISTRIBUTORS INC.

                                   By
                                     --------------------------------------
                                             (Authorized Signature)


Please return one signed copy
     of this agreement to:

Dean Witter Distributors Inc.
Two World Trade Center
New York, New York 10048

Accepted:

Firm Name: DEAN WITTER REYNOLDS INC.
           -------------------------

By:
   ---------------------------------

Address:  Two World Trade Center
        ----------------------------

          New York, New York 10048
- ------------------------------------

Date:     February 5, 1993
     -------------------------------


                                        2

<PAGE>


                                CUSTODY AGREEMENT



     Agreement made as of this 5th day of February, 1993, between  TCW/DW 
INCOME AND GROWTH FUND, a Massachusetts business trust organized and
existing under the laws of the Commonwealth of Massachusetts, having its
principal office and place of business at 2 World Trade Center, New York, New
York 10048 (hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New
York corporation authorized to do a banking business, having its principal
office and place of business at 48 Wall Street, New York, New York 10286
(hereinafter called the "Custodian").


                              W I T N E S S E T H :


that for and in consideration of the mutual promises hereinafter set forth, the
Fund and the Custodian agree as follows:


                                    ARTICLE I

                                   DEFINITIONS


     Whenever used in this Agreement, the following words and phrases, shall
have the following meanings:

     1.   "Agreement" shall mean this Custody Agreement and all Appendices and
Certifications described in the Exhibits delivered in connection herewith.

     2.   "Authorized Person" shall mean any person, whether or not such person
is an Officer or employee of the Fund, duly authorized by the Board of Trustees
of the Fund to give Oral Instructions and Written Instructions on behalf of the
Fund and listed in the Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to time, provided that
each person who is designated in any such Certificate as an "Officer of DWTC"
shall be an Authorized Person only for purposes of Articles XII and XIII hereof.

     3.   "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
<PAGE>

     4.   "Call Option" shall mean an exchange traded option with respect to
Securities other than Index, Futures Contracts, and Futures Contract Options
entitling the holder, upon timely exercise and payment of the exercise price, as
specified therein, to purchase from the writer thereof the specified underlying
instruments, currency, or Securities.

     5.   "Certificate" shall mean any notice, instruction, or other instrument
in writing, authorized or required by this Agreement to be given to the
Custodian which is actually received (irrespective of constructive receipt) by
the Custodian and signed on behalf of the Fund by any two Officers. The term
Certificate shall also include instructions by the Fund to the Custodian
communicated by a Terminal Link.

     6.   "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Custodian to be such a clearing member.

     7.   "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of any Put
Option guarantee letter or similar document described in paragraph 8 of Article
V herein.

     8.   "Covered Call Option" shall mean an exchange traded option entitling
the holder, upon timely exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying
instruments, currency, or Securities (excluding Futures Contracts) which are
owned by the writer thereof.

     9.   "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or successors and its
nominee or nominees, specifically identified in a certified copy of a resolution
of the Fund's Board of Trustees specifically approving deposits therein by the
Custodian.

     10.  "Financial Futures Contract" shall mean the firm commitment to buy or
sell financial instruments on a U.S. commodities exchange or board of trade at a
specified future time at an agreed upon price.

     11.  "Futures Contract" shall mean a Financial Futures Contract and/or
Index Futures Contracts.


                                      - 2 -
<PAGE>

     12.  "Futures Contract Option" shall mean an option with respect to a
Futures Contract.

     13.  "Investment Company Act of 1940" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder.

     14.  "Index Futures Contract" shall mean a bilateral agreement pursuant to
which the parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the value of a particular
index at the close of the last business day of the contract and the price at
which the futures contract is originally struck.

     15.  "Index Option" shall mean an exchange traded option entitling the
holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.

     16.  "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or a Depository shall be deemed to have been deposited
in, or withdrawn from, a Margin Account upon the Custodian's effecting an
appropriate entry in its books and records.

     17.  "Money Market Security" shall mean all instruments and obligations
commonly known as a money market instruments, where the purchase and sale of
such securities normally requires settlement in federal funds on the same day as
such purchase or sale, including, without limitation, certain Reverse Repurchase
Agreements, debt obligations issued or guaranteed as to interest and/or
principal by the government of the United States or agencies or
instrumentalities thereof, any tax, bond or revenue anticipation note issued by
any state or municipal government or public authority, commercial paper,
certificates of deposit and bankers' acceptances, repurchase agreements with
respect to Securities and bank time deposits.

     18.  "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the


                                      - 3 -
<PAGE>

Securities Exchange Act of 1934, its successor or successors, and its nominee or
nominees.

     19.  "Officers" shall mean the President, any Vice President, the
Secretary, the Clerk, the Treasurer, the Controller, any Assistant Secretary,
any Assistant Clerk, any Assistant Treasurer, and any other person or persons,
whether or not any such other person is an officer or employee of the Fund, but
in each case only if duly authorized by the Board of Trustees of the Fund to
execute any Certificate, instruction, notice or other instrument on behalf of
the Fund and listed in the Certificate annexed hereto as Appendix B or such
other Certificate as may be received by the Custodian from time to time;
provided that each person who is designated in any such Certificate as holding
the position of "Officer of DWTC" shall be an Officer only for purposes of
Articles XII and XIII hereof.

     20.  "Option" shall mean a Call Option, Covered Call Option, Index Option
and/or a Put Option.

     21.  "Oral Instructions" shall mean verbal instructions actually received
(irrespective of constructive receipt) by the Custodian from an Authorized
Person or from a person reasonably believed by the Custodian to be an Authorized
Person.

     22.  "Put Option" shall mean an exchange traded option with respect to
instruments, currency, or Securities other than Index Options, Futures
Contracts, and Futures Contract Options entitling the holder, upon timely
exercise and tender of the specified underlying instruments, currency, or
Securities, to sell such instruments, currency, or Securities to the writer
thereof for the exercise price.

     23.  "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.

     24.  "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Index Options, Index Futures
Contracts, Index Futures Contract Options, Financial Futures Contracts,
Financial Futures Contract Options, Reverse Repurchase Agreements, over the
counter options on Securities, common stocks and other securities having
characteristics similar to common stocks, preferred stocks, debt obligations
issued by state or municipal governments and by public authorities, (including,
without limitation, general obligation bonds, revenue bonds, industrial bonds
and industrial development bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe


                                      - 4 -
<PAGE>

for the same, or evidencing or representing any other rights or interest
therein, or rights to any property or assets.

     25.  "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such transactions
as the Fund may from time to time determine.

     26.  "Series" shall mean the various portfolios, if any, of the Fund as
described from time to time in the current and effective prospectus for the
Fund, except that if the Fund does not have more than one portfolio, "Series"
shall mean the Fund or be ignored where a requirement would be imposed on the
Fund or the Custodian which is unnecessary if there is only one portfolio.

     27.  "Shares" shall mean the shares of beneficial interest of the Fund and
its Series.

     28.  "Terminal Link" shall mean an electronic data transmission link
between the Fund and the Custodian requiring in connection with each use of the
Terminal Link the use of an authorization code provided by the Custodian and at
least two access codes established by the Fund, provided, that the Fund shall
have delivered to the Custodian a Certificate substantially in the form of
Appendix C.

     29.  "Transfer Agent" shall mean Dean Witter Trust Company, a New Jersey
limited purpose trust company, its successors and assigns.

     30.  "Transfer Agent Account" shall mean any account in the name of the
Transfer Agent maintained with The Bank of New York pursuant to a Cash
Management and Related Services Agreement between The Bank of New York and the
Transfer Agent.

     31.  "Written Instructions" shall mean written communications actually
received (irrespective of constructive receipt) by the Custodian from an
Authorized Person or from a person reasonably believed by the Custodian to be an
Authorized Person by telex or any other such system whereby the receiver of such
communications is able to verify by codes or otherwise with a reasonable degree
of certainty the identity of the sender of such communication.


                                      - 5 -
<PAGE>

                                   ARTICLE II

                            APPOINTMENT OF CUSTODIAN

     1.   The Fund hereby constitutes and appoints the Custodian as custodian of
the Securities and moneys at any time owned by the Fund during the period of
this Agreement.

     2.   The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.


                                   ARTICLE III

                         CUSTODY OF CASH AND SECURITIES


     1.   Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Fund will deliver or cause to be delivered to the Custodian
all Securities and all moneys owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated, and the Custodian shall not
be responsible for any Securities or money not so delivered. The Custodian shall
physically segregate, keep and maintain the Securities of the Series separate
and apart from each other Series and from other assets held by the Custodian.
Except as otherwise expressly provided in this Agreement, the Custodian will not
be responsible for any Securities and moneys not actually received by it, unless
the Custodian has been negligent or has engaged in willful misconduct with
respect thereto. The Custodian will be entitled to reverse any credits of money
made on the Fund's behalf where such credits have been previously made and
moneys are not finally collected, unless the Custodian has been negligent or has
engaged in willful misconduct with respect thereto. The Fund shall deliver to
the Custodian a certified resolution of the Board of Trustees of the Fund,
substantially in the form of Exhibit A hereto, approving, authorizing and
instructing the Custodian on a continuous and on-going basis to deposit in the
Book-Entry System all Securities eligible for deposit therein, regardless of the
Series to which the same are specifically allocated and to utilize the
Book-Entry System to the extent possible in connection with its performance
hereunder, including, without limitation, in connection with settlements of
purchases and sales of Securities, loans of Securities and deliveries and
returns of Securities collateral. Prior to a deposit of Securities specifically
allocated to a Series in any Depository, the Fund shall deliver to the Custodian
a certified resolution of the Board of Trustees of the Fund, substantially in
the form of Exhibit B hereto, approving,


                                      - 6 -
<PAGE>

authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate to deposit in such Depository
all Securities specifically allocated to such Series eligible for deposit
therein, and to utilize such Depository to the extent possible with respect to
such Securities in connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and returns of Securities collateral.
Securities and moneys deposited in either the Book-Entry System or a Depository
will be represented in accounts which include only assets held by the Custodian
for customers, including, but not limited to, accounts in which the Custodian
acts in a fiduciary or representative capacity and will be specifically
allocated on the Custodian's books to the separate account for the applicable
Series. Prior to the Custodian's accepting, utilizing and acting with respect to
Clearing Member confirmations for Options and transactions in Options for a
Series as provided in this Agreement, the Custodian shall have received a
certified resolution of the Fund's Board of Trustees, substantially in the form
of Exhibit C hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis, until instructed to the contrary by a
Certificate, to accept, utilize and act in accordance with such confirmations as
provided in this Agreement with respect to such Series. All securities are to be
held or disposed of by the Custodian for, and subject at all times to the
instructions of, the Fund pursuant to the terms of this Agreement. The Custodian
shall have no power or authority to assign, hypothecate, pledge or otherwise
dispose of any Securities except as provided by the terms of this Agreement, and
shall have the sole power to release and deliver Securities held pursuant to
this Agreement.

     2.   The Custodian shall establish and maintain separate accounts, in the
name of each Series, and shall credit to the separate account for each Series
all moneys received by it for the account of the Fund with respect to such
Series. Such moneys will be held in such manner and account as the Fund and the
Custodian shall agree upon in writing from time to time. Money credited to a
separate account for a Series shall be subject only to drafts, orders, or
charges of the Custodian pursuant to this Agreement and shall be disbursed by
the Custodian only:

          (a)  As hereinafter provided;

          (b)  Pursuant to Resolutions of the Fund's Board of Trustees certified
by an Officer and by the Secretary or Assistant Secretary of the Fund setting
forth the name and address of the person to whom the payment is to be made, the
Series account from which payment is to be made, the purpose for which payment
is to be made, and declaring such purpose to be a proper corporate purpose;
provided, however, that amounts


                                      - 7 -
<PAGE>

representing dividends or distributions with respect to Shares shall be paid
only to the Transfer Agent Account;

          (c)  In payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to such Series and authorized by this
Agreement; or

          (d)  Pursuant to Certificates to pay interest, taxes, management fees
or operating expenses (including, without limitation thereto, Board of Trustees'
fees and expenses, and fees for legal accounting and auditing services), which
Certificates set forth the name and address of the person to whom payment is to
be made, state the purpose of such payment and designate the Series for whose
account the payment is to be made.

     3.   Promptly after the close of business on each day, the Custodian shall
furnish the Fund with confirmations and a summary, on a per Series basis, of all
transfers to or from the account of the Fund for a Series, either hereunder or
with any co-custodian or sub-custodian appointed in accordance with this
Agreement during said day. Where Securities are transferred to the account of
the Fund for a Series but held in a Depository, the Custodian shall upon such
transfer also by book-entry or otherwise identify such Securities as belonging
to such Series in a fungible bulk of Securities registered in the name of the
Custodian (or its nominee) or shown on the Custodian's account on the books of
the Book-Entry System or the Depository. At least monthly and from time to time,
the Custodian shall furnish the Fund with a detailed statement, on a per Series
basis, of the Securities and moneys held under this Agreement for the Fund.

     4.   Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are issued
or issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the name
of any duly appointed registered nominee of the Custodian as the Custodian may
from time to time determine, or in the name of the Book-Entry System or a
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry System or a
Depository any Securities which it may hold hereunder and which may from time to
time be registered in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not held in the
Book-Entry System or in a Depository in a separate account in the name of such
Series physically segregated at all times from those of any other person or
persons.


                                      - 8 -
<PAGE>

     5.   Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or through
the use of the Book-Entry System or a Depository with respect to Securities held
hereunder and therein deposited, shall with respect to all Securities held for
the Fund hereunder in accordance with preceding paragraph 4:

          (a)  Promptly collect all income and dividends due or payable;

          (b)  Promptly give notice to the Fund and promptly present for payment
and collect the amount of money or other consideration payable upon such
Securities which are called, but only if either (i) the Custodian receives a
written notice of such call, or (ii) notice of such call appears in one or more
of the publications listed in Appendix D annexed hereto, which may be amended at
any time by the Custodian without the prior consent of the Fund, provided the
Custodian gives prior notice of such amendment to the Fund;

          (c)  Promptly present for payment and collect for the Fund's account
the amount payable upon all Securities which mature;

          (d)  Promptly surrender Securities in temporary form in exchange for
definitive Securities;

          (e)  Promptly execute, as custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect;

          (f)  Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of a Series, all
rights and similar securities issued with respect to any Securities held by the
Custodian for such Series hereunder; and

          (g)  Promptly deliver to the Fund all notices, proxies, proxy
soliciting materials, consents and other written information (including, without
limitation, notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to Securities held
pursuant to this Agreement which are actually received by the Custodian, such
proxies and other similar materials to be executed by the registered holder (if
Securities are registered otherwise than in the name of the Fund), but without
indicating the manner in which proxies or consents are to be voted.


                                      - 9 -
<PAGE>

     6.   Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:

          (a)  Promptly execute and deliver to such persons as may be designated
in such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities held hereunder for
the Series specified in such Certificate may be exercised;

          (b)  Promptly deliver any Securities held hereunder for the Series
specified in such Certificate in exchange for other Securities or cash issued or
paid in connection with the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the exercise of any
right, warrant or conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities received in
exchange;

          (c)  Promptly deliver any Securities held hereunder for the Series
specified in such Certificate to any protective committee, reorganization
committee or other person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets of any corporation,
and receive and hold hereunder specifically allocated to such Series in exchange
therefor such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery or such Securities as
may be issued upon such delivery; and

          (d)  Promptly present for payment and collect the amount payable upon
Securities which may be called as specified in the Certificate.

     7.   Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Custodian such a Certificate no later
than the business day preceding the availability of any such instrument or
certificate. Prior to such availability, the Custodian shall comply with Section
17(f) of the Investment Company Act of 1940 in connection with the purchase,
sale, settlement, closing out or writing of Futures Contracts, Options, or
Futures Contract Options by making payments or deliveries specified in
Certificates in connection with any such purchase, sale, writing, settlement or
closing out upon its receipt from a broker, dealer, or futures commission
merchant of a statement or confirmation reasonably believed by the Custodian to
be in the form customarily used by brokers, dealers, or future


                                     - 10 -
<PAGE>

commission merchants with respect to such Futures Contracts, Options, or Futures
Contract Options, as the case may be, confirming that such Security is held by
such broker, dealer or futures commission merchant, in book-entry form or
otherwise, in the name of the Custodian (or any nominee of the Custodian) as
custodian for the Fund, provided, however, that notwithstanding the foregoing,
payments to or deliveries from the Margin Account and payments with respect to
Securities to which a Margin Account relates, shall be made in accordance with
the terms and conditions of the Margin Account Agreement. Whenever any such
instruments or certificates are available, the Custodian shall, notwithstanding
any provision in this Agreement to the contrary, make payment for any Futures
Contract, Option, or Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Futures Contract, Option or
Futures Contract Option for which such instruments or such certificates are
available only against receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the provisions of this
Agreement.


                                   ARTICLE IV

                  PURCHASE AND SALE OF INVESTMENTS OF THE FUND

                    OTHER THAN OPTIONS, FUTURES CONTRACTS AND

                            FUTURES CONTRACT OPTIONS


     1.   Promptly after each execution of a purchase of Securities by the Fund,
other than a purchase of an Option, a Futures Contract, or a Futures Contract
Option, the Fund shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities, a Certificate, and
(ii) with respect to each purchase of Money Market Securities, a Certificate,
Oral Instructions or Written Instructions, specifying with respect to each such
purchase: (a) the Series to which such Securities are to be specifically
allocated; (b) the name of the issuer and the title of the Securities; (c) the
number of shares or the principal amount purchased and accrued interest, if any;
(d) the date of purchase and settlement; (e) the purchase price per unit; (f)
the total amount payable upon such purchase; (g) the name of the person from
whom or the broker through whom the purchase was made, and the name of the
clearing broker, if any; and (h) the name of the broker to whom payment is to be
made. The Custodian shall, upon receipt of such Securities purchased by or for
the Fund, pay to the broker specified in


                                     - 11 -
<PAGE>

the Certificate out of the moneys held for the account of such Series the total
amount payable upon such purchase, provided that the same conforms to the total
amount payable as set forth in such Certificate, Oral Instructions or Written
Instructions.

     2.   Promptly after each execution of a sale of Securities by the Fund,
other than a sale of any Option, Futures Contract, Futures Contract Option, or
any Reverse Repurchase Agreement, the Fund shall deliver such to the Custodian
(i) with respect to each sale of Securities which are not Money Market
Securities, a Certificate, and (ii) with respect to each sale of Money Market
Securities, a Certificate, Oral Instructions or Written Instructions, specifying
with respect to each such sale: (a) the Series to which such Securities were
specifically allocated; (b) the name of the issuer and the title of the
Security; (c) the number of shares or principal amount sold, and accrued
interest, if any; (d) the date of sale and settlement; (e) the sale price per
unit; (f) the total amount payable to the Fund upon such sale; (g) the name of
the broker through whom or the person to whom the sale was made, and the name of
the clearing broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. On the settlement date, the Custodian shall
deliver the Securities specifically allocated to such Series to the broker in
accordance with generally accepted street practices and as specified in the
Certificate upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions.


                                    ARTICLE V

                                     OPTIONS


     1.   Promptly after each execution of a purchase of any Option by the Fund
other than a closing purchase transaction the Fund shall deliver to the
Custodian a Certificate specifying with respect to each Option purchased: (a)
the Series to which such Option is specifically allocated; (b) the type of
Option (put or call); (c) the instrument, currency, or Security underlying such
Option and the number of Options, or the name of the in the case of an Index
Option, the index to which such Option relates and the number of Index Options
purchased; (d) the expiration date; (e) the exercise price; (f) the dates of
purchase and settlement; (g) the total amount payable by the Fund in connection
with such purchase; and (h) the name of the Clearing Member through whom such
Option was purchased. The Custodian shall pay, upon receipt of a Clearing
Member's statement confirming the purchase of such Option held by such Clearing
Member for the account of the Custodian (or any duly appointed and registered
nominee of the


                                     - 12 -
<PAGE>

Custodian) as custodian for the Fund, out of moneys held for the account of the
Series to which such Option is to be specifically allocated, the total amount
payable upon such purchase to the Clearing Member through whom the purchase was
made, provided that the same conforms to the total amount payable as set forth
in such Certificate.

     2.   Promptly after the execution of a sale of any Option purchased by the
Fund, other than a closing sale transaction, pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with respect to
each such sale: (a) the Series to which such Option was specifically allocated;
(b) the type of Option (put or call); (c) the instrument, currency, or Security
underlying such Option and the number of Options, or the name of the issuer and
the title and number of shares subject to such Option or, in the case of a Index
Option, the index to which such Option relates and the number of Index Options
sold; (d) the date of sale; (e) the sale price; (f) the date of settlement; (g)
the total amount payable to the Fund upon such sale; and (h) the name of the
Clearing Member through whom the sale was made. The Custodian shall consent to
the delivery of the Option sold by the Clearing Member which previously supplied
the confirmation described in preceding paragraph 1 of this Article with respect
to such Option against payment to the Custodian of the total amount payable to
the Fund, provided that the same conforms to the total amount payable as set
forth in such Certificate.

     3.   Promptly after the exercise by the Fund of any Call Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Call Option: (a) the
Series to which such Call Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Call Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise price
per share; (f) the total amount to be paid by the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Call Option was exercised.
The Custodian shall, upon receipt of the Securities underlying the Call Option
which was exercised, pay out of the moneys held for the account of the Series to
which such Call Option was specifically allocated the total amount payable to
the Clearing Member through whom the Call Option was exercised, provided that
the same conforms to the total amount payable as set forth in such Certificate.

     4.   Promptly after the exercise by the Fund of any Put Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian
a Certificate specifying with respect to such Put Option: (a) the Series to
which such Put Option was specifically allocated; (b) the name of the issuer and
the title and number of shares subject to the Put Option; (c) the expiration
date; (d) the date of exercise


                                     - 13 -
<PAGE>

and settlement; (e) the exercise price per share; (f) the total amount to be
paid to the Fund upon such exercise; and (g) the name of the Clearing Member
through whom such Put Option was exercised. The Custodian shall, upon receipt of
the amount payable upon the exercise of the Put Option, deliver or direct a
Depository to deliver the Securities specifically allocated to such Series,
provided the same conforms to the amount payable to the Fund as set forth in
such Certificate.

     5.   Promptly after the exercise by the Fund of any Index Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Index Option: (a) the
Series to which such Index Option was specifically allocated; (b) the type of
Index Option (put or call); (c) the number of Options being exercised; (d) the
index to which such Option relates; (e) the expiration date; (f) the exercise
price; (g) the total amount to be received by the Fund in connection with such
exercise; and (h) the Clearing Member from whom such payment is to be received.

     6.   Whenever the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Covered Call Option: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The Custodian shall
deliver or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs prevailing among
Clearing Members dealing in Covered Call Options and shall impose, or direct a
Depository to impose, upon the underlying Securities specified in the
Certificate specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Custodian has the
right, upon prior written notification to the Fund, at any time to refuse to
issue any receipts for Securities in the possession of the Custodian and not
deposited with a Depository underlying a Covered Call Option.

     7.   Whenever a Covered Call Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver, or
to direct the Depository to deliver, the Securities subject to such Covered Call
Option and specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares subject
to the Covered Call Option; (c) the Clearing Member to whom the underlying


                                     - 14 -
<PAGE>

Securities are to be delivered; and (d) the total amount payable to the Fund
upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian shall deliver,
or direct a Depository to deliver, the underlying Securities as specified in the
Certificate against payment of the amount to be received as set forth in such
Certificate.

     8.   Whenever the Fund writes a Put Option, the Fund shall promptly deliver
to the Custodian a Certificate specifying with respect to such Put Option: (a)
the Series for which such Put Option was written; (b) the name of the issuer and
the title and number of shares for which the Put Option is written and which
underlie the same; (c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund; (f) the date such Put Option is written; (g)
the name of the Clearing Member through whom the premium is to be received and
to whom a Put Option guarantee letter is to be delivered; (h) the amount of
cash, and/or the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited in the Senior Security Account for such Series;
and (i) the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be deposited into the Collateral Account for such
Series. The Custodian shall, after making the deposits into the Collateral
Account specified in the Certificate, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the Certificate against
receipt of the premium specified in said Certificate. Notwithstanding the
foregoing, the Custodian shall be under no obligation to issue any Put Option
guarantee letter or similar document if it is unable to make any of the
representations contained therein.

     9.   Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Put Option was
written; (b) the name of the issuer and title and number of shares subject to
the Put Option; (c) the Clearing Member from whom the underlying Securities are
to be received; (d) the total amount payable by the Fund upon such delivery; (e)
the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of Securities,
specifically allocated to such Series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian in connection with
such Put Option, the Custodian shall pay out of the moneys held for the account
of the Series to which such Put Option was specifically allocated the total
amount payable to the Clearing Member specified in the Certificate as set forth
in such Certificate, against delivery of such


                                     - 15 -
<PAGE>

Securities, and shall make the withdrawals specified in such Certificate.

     10.  Whenever the Fund writes an Index Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Index
Option: (a) the Series for which such Index Option was written; (b) whether such
Index Option is a put or a call; (c) the number of options written; (d) the
index to which such Option relates; (e) the expiration date; (f) the exercise
price; (g) the Clearing Member through whom such Option was written; (h) the
premium to be received by the Fund; (i) the amount of cash and/or the amount and
kind of Securities, if any, specifically allocated to such Series to be
deposited in the Senior Security Account for such Series; (j) the amount of cash
and/or the amount and kind of Securities, if any, specifically allocated to such
Series to be deposited in the Collateral Account for such Series; and (k) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in a Margin Account, and the name in
which such account is to be or has been established. The Custodian shall, upon
receipt of the premium specified in the Certificate, make the deposits, if any,
into the Senior Security Account specified in the Certificate, and either (1)
deliver such receipts, if any, which the Custodian has specifically agreed to
issue, which are in accordance with the customs prevailing among Clearing
Members in Index Options and make the deposits into the Collateral Account
specified in the Certificate, or (2) make the deposits into the Margin Account
specified in the Certificate.

     11.  Whenever an Index Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Index
Option: (a) the Series for which such Index Option was written; (b) such
information as may be necessary to identify the Index Option being exercised;
(c) the Clearing Member through whom such Index Option is being exercised; (d)
the total amount payable upon such exercise, and whether such amount is to be
paid by or to the Fund; (e) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Margin Account; and (f) the amount
of cash and/or amount and kind of Securities, if any, to be withdrawn from the
Senior Security Account for such Series; and the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the Collateral
Account for such Series. Upon the return and/or cancellation of the receipt, if
any, delivered pursuant to the preceding paragraph of this Article, the
Custodian shall pay out of the moneys held for the account of the Series to
which such Stock Index Option was specifically allocated to the Clearing Member
specified in the Certificate the total amount payable, if any, as specified
therein.


                                     - 16 -
<PAGE>

     12.  Promptly after the execution of a purchase or sale by the Fund of any
Option identical to a previously written Option described in paragraphs, 6, 8 or
10 of this Article in a transaction expressly designated as a "Closing Purchase
Transaction" or a "Closing Sale Transaction", the Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to the Option being
purchased: (a) that the transaction is a Closing Purchase Transaction or a
Closing Sale Transaction; (b) the Series for which the Option was written; (c)
the instrument, currency, or Security subject to the Option, or, in the case of
an Index Option, the index to which such Option relates and the number of
Options held; (d) the exercise price; (e) the premium to be paid by or the
amount to be paid to the Fund; (f) the expiration date; (g) the type of Option
(put or call); (h) the date of such purchase or sale; (i) the name of the
Clearing Member to whom the premium is to be paid or from whom the amount is to
be received; and (j) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account, a specified
Margin Account, or the Senior Security Account for such Series. Upon the
Custodian's payment of the premium or receipt of the amount, as the case may be,
specified in the Certificate and the return and/or cancellation of any receipt
issued pursuant to paragraphs 6, 8 or 10 of this Article with respect to the
Option being liquidated through the Closing Purchase Transaction or the Closing
Sale Transaction, the Custodian shall remove, or direct a Depository to remove,
the previously imposed restrictions on the Securities underlying the Call
Option.

     13.  Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 Article III herein, and
upon the return and/or cancellation of any receipts issued by the Custodian,
shall make such withdrawals from the Collateral Account, and the Margin Account
and/or the Senior Security Account as may be specified in a Certificate received
in connection with such expiration, exercise, or consummation.

     14.  Securities acquired by the Fund through the exercise of an Option
described in this Article shall be subject to Article IV hereof.


                                   ARTICLE VI

                                FUTURES CONTRACTS


     1.   Whenever the Fund shall enter into a Futures Contract, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such Futures
Contract,


                                     - 17 -
<PAGE>

(or with respect to any number of identical Futures Contract(s)): (a) the Series
for which the Futures Contract is being entered; (b) the category of Futures
Contract (the name of the underlying index or financial instrument); (c) the
number of identical Futures Contracts entered into; (d) the delivery or
settlement date of the Futures Contract(s); (e) the date the Futures Contract(s)
was (were) entered into and the maturity date; (f) whether the Fund is buying
(going long) or selling (going short) such Futures Contract(s); (g) the amount
of cash and/or the amount and kind of Securities, if any, to be deposited in the
Senior Security Account for such Series; (h) the name of the broker, dealer, or
futures commission merchant through whom the Futures Contract was entered into;
and (i) the amount of fee or commission, if any, to be paid and the name of the
broker, dealer, or futures commission merchant to whom such amount is to be
paid. The Custodian shall make the deposits, if any, to the Margin Account in
accordance with the terms and conditions of the Margin Account Agreement. The
Custodian shall make payment out of the moneys specifically allocated to such
Series of the fee or commission, if any, specified in the Certificate and
deposit in the Senior Security Account for such Series the amount of cash and/or
the amount and kind of Securities specified in said Certificate.

     2.   (a) Any variation margin payment or similar payment required to be
made by the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.

          (b)  Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract shall be received and dealt with by the Custodian
in accordance with the terms and conditions of the Margin Account Agreement.

     3.   Whenever a Futures Contract held by the Custodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Custodian prior to the delivery or
settlement date a Certificate specifying: (a) the Futures Contract and the
Series to which the same relates; (b) with respect to an Index Futures Contract,
the total cash settlement amount to be paid or received, and with respect to a
Financial Futures Contract, the Securities and/or amount of cash to be delivered
or received; (c) the broker, dealer, or futures commission merchant to or from
whom payment or delivery is to be made or received; and (d) the amount of cash
and/or Securities to be withdrawn from the Senior Security Account for such
Series. The Custodian shall make the payment or delivery specified in the
Certificate, and delete such Futures Contract from the


                                     - 18 -
<PAGE>

statements delivered to the Fund pursuant to paragraph 3 of Article III herein.

     4.   Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the Futures
Contract being offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if any,
specified in the Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Senior Security Account for such
Series as may be specified in such Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.


                                   ARTICLE VII

                            FUTURES CONTRACT OPTIONS


     1.   Promptly after the execution of a purchase of any Futures Contract
Option by the Fund, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a) the Series to which
such Option is specifically allocated; (b) the type of Futures Contract Option
(put or call); (c) the type of Futures Contract and such other information as
may be necessary to identify the Futures Contract underlying the Futures
Contract Option purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the amount of premium to be paid by
the Fund upon such purchase; (h) the name of the broker or futures commission
merchant through whom such option was purchased; and (i) the name of the broker,
or futures commission merchant, to whom payment is to be made. The Custodian
shall pay out of the moneys specifically allocated to such Series the total
amount to be paid upon such purchase to the broker or futures commissions
merchant through whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.

     2.   Promptly after the execution of a sale of any Futures Contract Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Custodian a Certificate specifying with respect to each such sale: (a)
Series to which such Futures Contract Option was specifically allocated; (b) the
type of Future Contract Option (put or call); (c) the type of Futures Contract
and such other


                                     - 19 -
<PAGE>

information as may be necessary to identify the Futures Contract underlying the
Futures Contract Option; (d) the date of sale; (e) the sale price; (f) the date
of settlement; (g) the total amount payable to the Fund upon such sale; and (h)
the name of the broker of futures commission merchant through whom the sale was
made. The Custodian shall consent to the cancellation of the Futures Contract
Option being closed against payment to the Custodian of the total amount payable
to the Fund, provided the same conforms to the total amount payable as set forth
in such Certificate.

     3.   Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the moneys and
Securities specifically allocated to such Series, the payments of money, if any,
and the deposits of Securities, if any, into the Senior Security Account as
specified in the Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.

     4.   Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series for which such Futures Contract Option
was written; (b) the type of Futures Contract Option (put or call); (c) the type
of Futures Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the Fund; (g)
the name of the broker or futures commission merchant through whom the premium
is to be received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the moneys and Securities specifically allocated to
such Series the deposits into the Senior Security Account, if any, as specified
in the Certificate. The deposits, if any, to be made to the Margin Account shall
be made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.


                                     - 20 -
<PAGE>

     5.   Whenever a Futures Contract Option written by the Fund which is a call
is exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by the Fund
upon such exercise; and (g) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.

     6.   Whenever a Futures Contract Option which is written by the Fund and
which is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures Contract Option
is exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.

     7.   Promptly after the execution by the Fund of a purchase of any Futures
Contract Option identical to a previously written Futures Contract Option
described in this Article in order to liquidate its position as a writer of such
Futures Contract Option, the Fund shall deliver to the Custodian a Certificate
specifying with respect to the Futures Contract Option being purchased: (a) the
Series to which such Option is specifically allocated; (b) that the transaction
is a closing transaction; (c) the type of Future Contract and such other
information as may be necessary to identify the


                                     - 21 -
<PAGE>

Futures Contract underlying the Futures Option Contract; (d) the exercise price;
(e) the premium to be paid by the Fund; (f) the expiration date; (g) the name of
the broker or futures commission merchant to whom the premium is to be paid; and
(h) the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account for such Series. The Custodian shall
effect the withdrawals from the Senior Security Account specified in the
Certificate. The withdrawals, if any, to be made from the Margin Account shall
be made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.

     8.   Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or purchased by
the Fund and described in this Article, the Custodian shall (a) delete such
Futures Contract Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein and, (b) make such withdrawals from and/or in
the case of an exercise such deposits into the Senior Security Account as may be
specified in a Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.

     9.   Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article VI
hereof.


                                  ARTICLE VIII

                                   SHORT SALES


     1.   Promptly after the execution of any short sales of Securities by any
Series of the Fund, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the Series for which such short sale was made; (b) the name of
the issuer and the title of the Security; (c) the number of shares or principal
amount sold, and accrued interest or dividends, if any; (d) the dates of the
sale and settlement; (e) the sale price per unit; (f) the total amount credited
to the Fund upon such sale, if any, (g) the amount of cash and/or the amount and
kind of Securities, if any, which are to be deposited in a Margin Account and
the name in which such Margin Account has been or is to be established; (h) the
amount of cash and/or the amount and kind of Securities, if any, to be deposited
in a Senior Security Account, and (i) the name of the broker through whom such
short sale was made. The Custodian shall upon its receipt of a statement from
such broker confirming such sale and that the total amount credited to the Fund
upon such sale, if any, as specified in the Certificate is held by


                                     - 22 -
<PAGE>

such broker for the account of the Custodian (or any nominee of the Custodian)
as custodian of the Fund, issue a receipt or make the deposits into the Margin
Account and the Senior Security Account specified in the Certificate.

     2.   Promptly after the execution of a purchase to close-out any short sale
of Securities, the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such closing out: (a) the Series for which such
transaction is being made; (b) the name of the issuer and the title of the
Security; (c) the number of shares or the principal amount, and accrued interest
or dividends, if any, required to effect such closing-out to be delivered to the
broker; (d) the dates of closing-out and settlement; (e) the purchase price per
unit; (f) the net total amount payable to the Fund upon such closing-out; (g)
the net total amount payable to the broker upon such closing-out; (h) the amount
of cash and the amount and kind of Securities to be withdrawn, if any, from the
Margin Account; (i) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account; and (j) the name of
the broker through whom the Fund is effecting such closing-out. The Custodian
shall, upon receipt of the net total amount payable to the Fund upon such
closing-out, and the return and/or cancellation of the receipts, if any, issued
by the Custodian with respect to the short sale being closed-out, pay out of the
moneys held for the account of the Fund to the broker the net total amount
payable to the broker, and make the withdrawals from the Margin Account and the
Senior Security Account, as the same are specified in the Certificate.


                                   ARTICLE IX

                          REVERSE REPURCHASE AGREEMENTS


     1.   Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian hereunder, the Fund shall
deliver to the Custodian a Certificate, or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate, Oral Instructions, or
Written Instructions specifying: (a) the Series for which the Reverse Repurchase
Agreement is entered; (b) the total amount payable to the Fund in connection
with such Reverse Repurchase Agreement and specifically allocated to such
Series; (c) the broker, dealer, or financial institution with whom the Reverse
Repurchase Agreement is entered; (d) the amount and kind of Securities to be
delivered by the Fund to such broker, dealer, or financial institution; (e) the
date of such Reverse Repurchase Agreement; and (f) the amount of cash and/or the
amount and kind of Securities, if any, specifically allocated to such Series to
be deposited in a Senior Security Account for such Series in connection with
such Reverse Repurchase Agreement. The Custodian shall, upon receipt of


                                     - 23 -
<PAGE>

the total amount payable to the Fund specified in the Certificate, Oral
Instructions, or Written Instructions make the delivery to the broker, dealer,
or financial institution and the deposits, if any, to the Senior Security
Account, specified in such Certificate, Oral Instructions, or Written
Instructions.

     2.   Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate, Oral Instructions, or Written Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement being terminated and
the Series for which same was entered; (b) the total amount payable by the Fund
in connection with such termination; (c) the amount and kind of Securities to be
received by the Fund and specifically allocated to such Series in connection
with such termination; (d) the date of termination; (e) the name of the broker,
dealer, or financial institution with whom the Reverse Repurchase Agreement is
to be terminated; and (f) the amount of cash and/or the amount and kind of
Securities to be withdrawn from the Senior Securities Account for such Series.
The Custodian shall, upon receipt of the amount and kind of Securities to be
received by the Fund specified in the Certificate, Oral Instructions, or Written
Instructions, make the payment to the broker, dealer, or financial institution
and the withdrawals, if any, from the Senior Security Account, specified in such
Certificate, Oral Instructions, or Written Instructions.

     3.   The Certificates, Oral Instructions, or Written Instructions described
in paragraphs 1 and 2 of this Article may with respect to any particular Reverse
Repurchase Agreement be combined and delivered to the Custodian at the time of
entering into such Reverse Repurchase Agreement.


                                    ARTICLE X

                    LOANS OF PORTFOLIO SECURITIES OF THE FUND


     1.   Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Fund shall deliver or
cause to be delivered to the Custodian a Certificate specifying with respect to
each such loan: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities, (c) the
number of shares or the principal amount loaned, (d) the date of loan and
delivery, (e) the total amount to be delivered to the Custodian against the loan
of the Securities, including the amount of cash collateral and the premium, if
any, separately identified, and (f) the name of the broker, dealer, or financial
institution


                                     - 24 -
<PAGE>

to which the loan was made. The Custodian shall deliver the Securities thus
designated to the broker, dealer or financial institution to which the loan was
made upon receipt of the total amount designated in the Certificate as to be
delivered against the loan of Securities. The Custodian may accept payment in
connection with a delivery otherwise than through the Book-Entry System or a
Depository only in the form of a certified or bank cashier's check payable to
the order of the Fund or the Custodian drawn on New York Clearing House funds.

     2.   In connection with each termination of a loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan termination and return of
Securities: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be returned, (d)
the date of termination, (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the Certificate.


                                   ARTICLE XI

                   CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY

                        ACCOUNTS, AND COLLATERAL ACCOUNTS


     1.   The Custodian shall establish a Senior Security Account and from time
to time make such deposits thereto, or withdrawals therefrom, as specified in a
Certificate. Such Certificate shall specify the Series for which such deposit or
withdrawal is to be made and the amount of cash and/or the amount and kind of
Securities specifically allocated to such Series to be deposited in, or
withdrawn from, such Senior Security Account for such Series. In the event that
the Fund fails to specify in a Certificate the Series, the name of the issuer,
the title and the number of shares or the principal amount of any particular
Securities to be deposited by the Custodian into, or withdrawn from, a Senior
Securities Account, the Custodian shall be under no obligation to make any such
deposit or withdrawal and shall promptly notify the Fund that no such deposit
has been made.


                                     - 25 -
<PAGE>

     2.   The Custodian shall make deliveries or payments from a Margin Account
to the broker, dealer, futures commission merchant or Clearing Member in whose
name, or for whose benefit, the account was established as specified in the
Margin Account Agreement.

     3.   Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.

     4.   The Custodian shall have a continuing lien and security interest in
and to any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may enforce
its lien and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter or similar
document or any receipt issued hereunder by the Custodian. In the event the
Custodian should realize on any such property net proceeds which are less than
the Custodian's obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the Custodian by
the Fund within the scope of Article XIV herein.

     5.   On each business day the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.

     6.   The Custodian shall establish a Collateral Account and from time to
time shall make such deposits thereto as may be specified in a Certificate.
Promptly after the close of business on each business day in which cash and/or
Securities are maintained in a Collateral Account for any Series, the Custodian
shall furnish the Fund with a statement with respect to such Collateral Account
specifying the amount of cash and/or the amount and kind of Securities held
therein. No later than the close of business next succeeding the delivery to the
Fund of such statement, the Fund shall furnish to the Custodian a Certificate or
Written Instructions specifying the then market value of the Securities
described in such statement. In the event such then market value is indicated to
be less than the Custodian's obligation with respect to any outstanding Put
Option guarantee letter or similar document,


                                     - 26 -
<PAGE>

the Fund shall promptly specify in a Certificate the additional cash and/or
Securities to be deposited in such Collateral Account to eliminate such
deficiency.


                                   ARTICLE XII

                      PAYMENT OF DIVIDENDS OR DISTRIBUTIONS


     1.   The Fund shall furnish to the Custodian a copy of the resolution of
the Board of Trustees of the Fund, certified by the Secretary, the Clerk, any
Assistant Secretary or any Assistant Clerk, either (i) setting forth with
respect to the Series specified therein the date of the declaration of a
dividend or distribution, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date and the
total amount payable to the Dividend Agent and any sub-dividend agent or
co-dividend agent of the Fund on the payment date, or (ii) authorizing with
respect to the Series specified therein and the declaration of dividends and
distributions thereon the Custodian to rely on Oral Instructions, Written
Instructions, or a Certificate setting forth the date of the declaration of such
dividend or distribution, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date and the
total amount payable to the Dividend Agent on the payment date.

     2.   Upon the payment date specified in such resolution, Oral Instructions,
Written Instructions, or Certificate, as the case may be, the Custodian shall
pay to the Transfer Agent Account out of the moneys held for the account of the
Series specified therein the total amount payable to the Dividend Agent and any
sub-dividend agent or co-dividend agent of the Fund with respect to such Series.


                                  ARTICLE XIII

                          SALE AND REDEMPTION OF SHARES


     1.   Whenever the Fund shall sell any Shares, it shall deliver or cause to
be delivered, to the Custodian a Certificate duly specifying:

          (a)  The Series, the number of Shares sold, trade date, and price; and


                                     - 27 -
<PAGE>

          (b)  The amount of money to be received by the Custodian for the sale
of such Shares and specifically allocated to the separate account in the name of
such Series.

     2.   Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account in the name of the Series for
which such money was received.

     3.   Upon issuance of any Shares of any Series the Custodian shall pay, out
of the money held for the account of such Series, all original issue or other
taxes required to be paid by the Fund in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.

     4.   Except as provided hereinafter, whenever the Fund desires the
Custodian to make payment out of the money held by the Custodian hereunder in
connection with a redemption of any Shares, it shall furnish, or cause to be
furnished, to the Custodian a Certificate specifying:

          (a)  The number and Series of Shares redeemed; and

          (b)  The amount to be paid for such Shares.

     5.   Upon receipt of an advice from an Authorized Person setting forth the
Series and number of Shares received by the Transfer Agent for redemption and
that such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent Account out of the moneys held in the separate
account in the name of the Series the total amount specified in the Certificate
issued pursuant to the foregoing paragraph 4 of this Article.


                                   ARTICLE XIV

                           OVERDRAFTS OR INDEBTEDNESS


     1.   If the Custodian, should in its sole discretion advance funds on
behalf of any Series which results in an overdraft because the moneys held by
the Custodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate, Oral Instructions, or
Written Instructions or which results in an overdraft in the separate account of
such Series for some other reason, or if the Fund is for any other reason
indebted to the Custodian with respect to a Series, (except a borrowing for
investment or for temporary or emergency purposes using Securities as collateral
pursuant to a separate agreement and subject to the provisions of paragraph 2 of
this Article), such overdraft or indebtedness shall be deemed to be a loan made
by the Custodian to the Fund


                                     - 28 -
<PAGE>

for such Series payable on demand and shall bear interest from the date incurred
at a rate per annum (based on a 360-day year for the actual number of days
involved) equal to the Federal Funds Rate plus 1/2%, such rate to be adjusted on
the effective date of any change in such Federal Funds Rate but in no event to
be less than 6% per annum. In addition, the Fund hereby agrees that the
Custodian shall have a continuing lien and security interest in the aggregate
amount of such overdrafts and indebtedness as may from time to time exist in and
to any property specifically allocated to such Series at any time held by it for
the benefit of such Series or in which the Fund may have an interest which is
then in the Custodian's possession or control or in possession or control of any
third party acting in the Custodian's behalf. The Fund authorizes the Custodian,
in its sole discretion, at any time to charge any such overdraft or indebtedness
together with interest due thereon against any money balance of account standing
to such Series' credit on the Custodian's books. In addition, the Fund hereby
covenants that on each Business Day on which either it intends to enter a
Reverse Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business the Fund
had outstanding a Reverse Repurchase Agreement or such a borrowing, it shall
prior to 9 a.m., New York City time, advise the Custodian, in writing, of each
such borrowing, shall specify the Series to which the same relates, and shall
not incur any indebtedness, including pursuant to any Reverse Repurchase
Agreement, not so specified other than from the Custodian.

     2.   The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to each such borrowing: (a)
the Series to which such borrowing relates; (b) the name of the bank, (c) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Fund, or other loan
agreement, (d) the time and date, if known, on which the loan is to be entered
into, (e) the date on which the loan becomes due and payable, (f) the total
amount payable to the Fund on the borrowing date, (g) the market value of
Securities to be delivered as collateral for such loan, including the name of
the issuer, the title and the number of shares or the principal amount of any
particular Securities, and (h) a statement specifying whether such loan is for
investment purposes or for temporary or emergency purposes and that such loan is
in conformance with the Investment Company Act of 1940 and the Fund's
prospectus. The Custodian shall deliver on the


                                     - 29 -
<PAGE>

borrowing date specified in a Certificate the specified collateral and the
executed promissory note, if any, against delivery by the lending bank of the
total amount of the loan payable, provided that the same conforms to the total
amount payable as set forth in the Certificate. The Custodian may, at the option
of the lending bank, keep such collateral in its possession, but such collateral
shall be subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver such Securities
as additional collateral as may be specified in a Certificate to collateralize
further any transaction described in this paragraph. The Fund shall cause all
Securities released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Fund fails to specify
in a Certificate the Series, the name of the issuer, the title and number of
shares or the principal amount of any particular Securities to be delivered as
collateral by the Custodian, to any such bank, the Custodian shall not be under
any obligation to deliver any Securities.


                                   ARTICLE XV

                            CONCERNING THE CUSTODIAN


     1.   The Custodian shall use reasonable care in the performance of its
duties hereunder, and, except as hereinafter provided, neither the Custodian nor
its nominee shall be liable for any loss or damage, including counsel fees,
resulting from its action or omission to act or otherwise, either hereunder or
under any Margin Account Agreement, except for any such loss or damage arising
out of its own negligence, bad faith, or willful misconduct or that of its
officers, employees, or agents. The Custodian may, with respect to questions of
law arising hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Fund, at the expense of the
Fund, or of its own counsel, at its own expense, and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice or opinion. The Custodian shall be liable to the Fund for any loss
or damage resulting from the use of the Book-Entry System or any Depository
arising by reason of any negligence or willful misconduct on the part of the
Custodian or any of its employees or agents.

     2.   Notwithstanding the foregoing, the Custodian shall be under no
obligation to inquire into, and shall not be liable for:


                                     - 30 -
<PAGE>

          (a)  The validity (but not the authenticity) of the issue of any
Securities purchased, sold, or written by or for the Fund, the legality of the
purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor, as specified in a Certificate, Oral Instructions, or Written
Instructions;

          (b)  The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor, as specified in a
Certificate;

          (c)  The legality of the declaration or payment of any dividend by the
Fund, as specified in a resolution, Certificate, Oral Instructions, or Written
Instructions;

          (d)  The legality of any borrowing by the Fund using Securities as
collateral;

          (e)  The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it that the cash collateral
delivered to it by a broker, dealer, or financial institution or held by it at
any time as a result of such loan of portfolio Securities of the Fund is
adequate collateral for the Fund against any loss it might sustain as a result
of such loan, except that this subparagraph shall not excuse any liability the
Custodian may have for failing to act in accordance with Article X hereof or any
Certificate, Oral Instructions, or Written Instructions given in accordance with
this Agreement. The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify the Fund
that the amount of such cash collateral held by it for the Fund is sufficient
collateral for the Fund, but such duty or obligation shall be the sole
responsibility of the Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article X of this
Agreement makes payment to it of any dividends or interest which are payable to
or for the account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due; or

          (f)  The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund, except that this
sub-paragraph shall not excuse any liability the Custodian may have for failing
to establish, maintain, make deposits to or withdrawals from such accounts in
accordance with this Agreement. In addition, the Custodian shall be under no
duty or obligation to see that any broker, dealer, futures commission merchant
or Clearing Member makes payment to the Fund of any variation margin payment or


                                     - 31 -
<PAGE>

similar payment which the Fund may be entitled to receive from such broker,
dealer, futures commission merchant or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, futures commission merchant
or Clearing Member is the amount the Fund is entitled to receive, or to notify
the Fund of the Custodian's receipt or non-receipt of any such payment.

     3.   The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives such money directly or by the final
crediting of the account representing the Fund's interest at the Book-Entry
System or the Depository.

     4.   With respect to Securities held in a Depository, except as otherwise
provided in paragraph 5(b) of Article III hereof, the Custodian shall have no
responsibility and shall not be liable for ascertaining or acting upon any
calls, conversions, exchange offers, tenders, interest rate changes or similar
matters relating to such Securities, unless the Custodian shall have actually
received timely notice from the Depository in which such Securities are held. In
no event shall the Custodian have any responsibility or liability for the
failure of a Depository to collect, or for the late collection or late crediting
by a Depository of any amount payable upon Securities deposited in a Depository
which may mature or be redeemed, retired, called or otherwise become payable.
However, upon receipt of a Certificate from the Fund of an overdue amount on
Securities held in a Depository the Custodian shall make a claim against the
Depository on behalf of the Fund, except that the Custodian shall not be under
any obligation to appear in, prosecute or defend any action suit or proceeding
in respect to any Securities held by a Depository which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required, or
alternatively, the Fund shall be subrogated to the rights of the Custodian with
respect to such claim against the Depository should it so request in a
Certificate. This paragraph shall not, however, excuse any failure by the
Custodian to act in accordance with a Certificate, Oral Instructions, or Written
Instructions given in accordance with this Agreement.

     5.   The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due to the Fund from the Transfer Agent of
the Fund nor to take any action to effect payment or distribution by the
Transfer Agent of the Fund of any amount paid by the Custodian to the Transfer
Agent of the Fund in accordance with this Agreement.


                                     - 32 -
<PAGE>

     6.   The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount if the Securities upon which such amount is
payable are in default, or if payment is refused after the Custodian has timely
and properly, in accordance with this Agreement, made due demand or
presentation, unless and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of reimbursement of
its costs and expenses in connection with any such action, but the Custodian
shall have such a duty if the Securities were not in default on the payable date
and the Custodian failed to timely and properly make such demand for payment and
such failure is the reason for the non-receipt of payment.

     7.   The Custodian may appoint one or more banking institutions as
Sub-Custodian or Sub-Custodians, or as Co-Custodian or Co-Custodians including,
but not limited to, banking institutions located in foreign countries, of
Securities and moneys at any time owned by the Fund, upon such terms and
conditions as may be approved in a Certificate or contained in an agreement
executed by the Custodian, the Fund and the appointed institution.

     8.   The Custodian agrees to indemnify the Fund against and save the Fund
harmless from all liability, claims, losses and demands whatsoever, including
attorney's fees, howsoever arising or incurred because of the negligence, bad
faith or willful misconduct of any Sub-Custodian of the Securities and moneys
owned by the Fund, provided such Sub-Custodian is a banking institution located
in a foreign country and appointed by the Custodian pursuant to paragraph 7 of
this Article.

     9.   The Custodian shall not be under any duty or obligation (a) to
ascertain whether any Securities at any time delivered to, or held by it, for
the account of the Fund and specifically allocated to a Series are such as
properly may be held by the Fund or such Series under the provisions of its then
current prospectus, or (b) to ascertain whether any transactions by the Fund,
whether or not involving the Custodian, are such transactions as may properly be
engaged in by the Fund.


     10.  The Custodian shall be entitled to receive and the Fund agrees to pay
to the Custodian all reasonable out-of-pocket expenses and such compensation as
may be agreed upon from time to time between the Custodian and the Fund. The
Custodian may charge such compensation, and any such expenses with respect to a
Series incurred by the Custodian in the performance of its duties under this
Agreement against any money specifically allocated to such Series. The Custodian
shall also be entitled to charge against any money held by it for the account of
a Series the amount of any loss, damage, liability or expense, including counsel
fees, for which it


                                     - 33 -
<PAGE>

shall be entitled to reimbursement under the provisions of this Agreement
attributable to, or arising out of, its serving as Custodian for such Series.
The expenses for which the Custodian shall be entitled to reimbursement
hereunder shall include, but are not limited to, the expenses of sub-custodians
and foreign branches of the Custodian incurred in settling outside of New York
City transactions involving the purchase and sale of Securities of the Fund.
Notwithstanding the foregoing or anything else contained in this Agreement to
the contrary, the Custodian shall, prior to effecting any charge for
compensation, expenses, or any overdraft or indebtedness or interest thereon,
submit an invoice therefor to the Fund.

     11.  The Custodian shall be entitled to rely upon any Certificate, notice
or other instrument in writing, Oral Instructions, or Written Instructions
received by the Custodian and reasonably believed by the Custodian to be
genuine. The Fund agrees to forward to the Custodian a Certificate or facsimile
thereof confirming Oral Instructions or Written Instructions in such manner so
that such Certificate or facsimile thereof is received by the Custodian, whether
by hand delivery, telecopier or other similar device, or otherwise, by the close
of business of the same day that such Oral Instructions or Written Instructions
are given to the Custodian. The Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way affect the
validity of the transactions or enforceability of the transactions thereby
authorized by the Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions or Written Instructions
given to the Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Authorized Person.

     12.  The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, futures commission merchant or
Clearing Member. This paragraph shall not excuse any failure by the Custodian to
have acted in accordance with any Margin Agreement it has executed or any
Certificate, Oral Instructions, or Written Instructions given in accordance with
this Agreement.

     13.  The books and records pertaining to the Fund, as described in Appendix
E hereto, which are in the possession of the Custodian shall be the property of
the Fund. Such books


                                     - 34 -
<PAGE>

and records shall be prepared and maintained by the Custodian as required by the
Investment Company Act of 1940, as amended, and other applicable securities laws
and rules and regulations. The Fund, or the Fund's authorized representatives,
shall have access to such books and records during the Custodian's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by the Custodian to the Fund or the Fund's
authorized representative, and the Fund shall reimburse the Custodian its
expenses of providing such copies. Upon reasonable request of the Fund, the
Custodian shall provide in hard copy or on micro-film, whichever the Custodian
elects, any records included in any such delivery which are maintained by the
Custodian on a computer disc, or are similarly maintained, and the Fund shall
reimburse the Custodian for its expenses of providing such hard copy or
micro-film.

     14.  The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry System,
each Depository or O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time to time.

     15.  The Custodian shall furnish upon request annually to the Fund a letter
prepared by the Custodian's accountants with respect to the Custodian's internal
systems and controls in the form generally provided by the Custodian to other
investment companies for which the Custodian acts as custodian. 

     16.  The Fund agrees to indemnify the Custodian against and save the 
Custodian harmless from all liability, claims, losses and demands whatsoever, 
including attorney's fees, howsoever arising out of, or related to, the 
Custodian's performance of its obligations under this Agreement, except for 
any such liability, claim, loss and demand arising out of the Custodian's own 
negligence, bad faith, or willful misconduct or that of its officers, 
employees, or agents.

     17.  Subject to the foregoing provisions of this Agreement, the Custodian
shall deliver and receive Securities, and receipts with respect to such
Securities, and shall make and receive payments only in accordance with the
customs prevailing from time to time among brokers or dealers in such Securities
and, except as may otherwise be provided by this Agreement or as may be in
accordance with such customs, shall make payment for Securities only against
delivery thereof and deliveries of Securities only against payment therefor.

     18.  The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.


                                     - 35 -
<PAGE>

                                   ARTICLE XVI

                                   TERMINATION

     1.   Except as provided in paragraph 3 of this Article, this Agreement
shall continue until terminated by either the Custodian giving to the Fund, or
the Fund giving to the Custodian, a notice in writing specifying the date of
such termination, which date shall be not less than 60 days after the date of
the giving of such notice. In the event such notice or a notice pursuant to
paragraph 3 of this Article is given by the Fund, it shall be accompanied by a
copy of a resolution of the Board of Trustees of the Fund, certified by an
Officer and the Secretary or an Assistant Secretary of the Fund, electing to
terminate this Agreement and designating a successor custodian or custodians,
each of which shall be eligible to serve as a custodian for the securities of a
management investment company under the Investment Company Act of 1940. In the
event such notice is given by the Custodian, the Fund shall, on or before the
termination date, deliver to the Custodian a copy of a resolution of the Board
of Trustees of the Fund, certified by the Secretary, the Clerk, any Assistant
Secretary or any Assistant Clerk, designating a successor custodian or
custodians. In the absence of such designation by the Fund, the Custodian may
designate a successor custodian which shall be a bank or trust company having
not less than $2,000,000 aggregate capital, surplus and undivided profits. Upon
the date set forth in such notice this Agreement shall terminate, and the
Custodian shall upon receipt of a notice of acceptance by the successor
custodian on that date deliver directly to the successor custodian all
Securities and moneys then owned by the Fund and held by it as Custodian, after
deducting all fees, expenses and other amounts for the payment or reimbursement
of which it shall then be entitled.

     2.   If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall upon the
date specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and moneys then owned
by the Fund be deemed to be its own custodian and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book Entry System which
cannot be delivered to the Fund to hold such Securities hereunder in accordance
with this Agreement.

     3.   Notwithstanding the foregoing, the Fund may terminate this Agreement
upon the date specified in a written


                                     - 36 -
<PAGE>

notice in the event of the "Bankruptcy" of The Bank of New York. As used in this
sub-paragraph, the term "Bankruptcy" shall mean The Bank of New York's making a
general assignment, arrangement or composition with or for the benefit of its
creditors, or instituting or having instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or the entry of a order for relief under
any applicable bankruptcy law or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or if a
petition is presented for the winding up or liquidation of the party or a
resolution is passed for its winding up or liquidation, or it seeks, or becomes
subject to, the appointment of an administrator, receiver, trustee, custodian or
other similar official for it or for all or substantially all of its assets or
its taking any action in furtherance or, or indicating its consent to approval
of, or acquiescence in, any of the foregoing.


                                  ARTICLE XVII

                                  TERMINAL LINK


     1.   At no time and under no circumstances shall the Fund be obligated to
have or utilize the Terminal Link, and the provisions of this Article shall
apply if, but only if, the Fund in its sole and absolute discretion elects to
utilize the Terminal Link to transmit Certificates to and to receive notices
from the Custodian.

     2.   The parties hereto shall utilize the Terminal Link only for the
purpose of the Fund providing Certificates to the Custodian and the Custodian
providing notices to the Fund and only after the Fund and the Custodian shall
have established access codes and internal safekeeping procedures to safeguard
and protect the confidentiality and availability of such access codes. Each use
of the Terminal Link by the Fund shall constitute a representation and warranty
that at least two such access codes have been utilized and that such procedures
have been established.

     3.   Each party shall obtain and maintain at its own cost and expense all
equipment and services, including, but not limited to communications services,
necessary for it to utilize the Terminal Link, and the other party shall not be
responsible for the reliability or availability of any such equipment or
services, except that the Custodian shall not pay any communications costs of
any line leased by the Fund, even if such line is also used by the Custodian.

     4.   The Fund acknowledges that any data bases made available as part of,
or through the Terminal and any proprietary data, software, processes,
information and documentation (other than any such which are or become part of


                                     - 37 -
<PAGE>

the public domain or are legally required to be made available to the public)
(collectively, the "Information"), are the exclusive and confidential property
of the Custodian. The Fund shall, and shall cause others to which it discloses
the Information, to keep the Information confidential by using the same care and
discretion it uses with respect to its own confidential property and trade
secrets, and shall neither make nor permit any disclosure without the express
prior written consent of the Custodian.

     5.   Upon termination of this Agreement for any reason, each Fund shall
return to the Custodian any and all copies of the Information which are in the
Fund's possession or under its control, or which the Fund distributed to third
parties. The provisions of this Article shall not affect the copyright status of
any of the Information which may be copyrighted and shall apply to all
Information whether or not copyrighted.

     6.   The Custodian reserves the right to modify the Terminal Link from time
to time without notice to the Fund, except that the Custodian shall give the
Fund notice not less than 75 days in advance of any modification which would
materially adversely affect the Fund's operation, and the Fund agrees not to
modify or attempt to modify the Terminal Link without the Bank's prior written
consent. The Fund acknowledges that the Terminal Link is the property of the
Custodian and, accordingly, the Fund agrees that any modifications to the
Terminal Link, whether by the Fund or the Custodian and whether with or without
the Custodian's consent, shall become the property of the Custodian.

     7.   Neither the Custodian nor any manufacturers and suppliers it utilizes
or the Fund utilizes in connection with the Terminal Link makes any warranties
or representations, express or implied, in fact or in law, including but not
limited to warranties of merchantability and fitness for a particular purpose.

     8.   Each party will, and will cause its officers and employees to, treat
the user and authorization codes, passwords and authentication keys applicable
to Terminal Link with extreme care. Each party hereby irrevocably authorizes the
other to act in accordance with and rely on Certificates and notices received by
it through the Terminal Link. Each party acknowledges that it is its
responsibility to assure that only its authorized persons use the Terminal Link
on its behalf, and that a party shall not be responsible nor liable for use of
the Terminal Link on its behalf of the other party by unauthorized persons
except that the other party shall be liable for such use thereof by unauthorized
persons who have obtained access thereto as a result of the bad faith or willful
misconduct of such party or any of its officers or employees.


                                     - 38 -
<PAGE>

     9.   Notwithstanding anything else in this Agreement to the contrary,
neither party shall have any liability to the other for any losses, damages,
injuries, claims, costs or expenses arising as a result of a delay, omission or
error in the transmission of a Certificate or notice by use of the Terminal Link
except for money damages for those suffered as the result of the negligence, bad
faith or willfull misconduct of such party or its officers, employees or agents
in an amount not exceeding for any incident $100,000, provided, however, that a
party shall have no liability under this Section 9 if the other party fails to
comply with the provisions of Section 11.

     10.  Without limiting the generality of the foregoing, it is hereby agreed
that in no event shall either party or any manufacturer or supplier of its
computer equipment, software or services relating to the Terminal Link be
responsible for any special, indirect, incidental or consequential damages which
the other party may incur or experience by reason of its use of the Terminal
Link even if such party, manufacturer or supplier has been advised of the
possibility of such damages, nor with respect to the use of the Terminal Link
shall either party or any such manufacturer or supplier be liable for acts of
God, or with respect to the following to the extent beyond such person's
reasonable control: machine or computer breakdown or malfunction, interruption
or malfunction of communication facilities, labor difficulties or any other
similar or dissimilar cause.

     11.  The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, the Terminal Link as promptly
as practicable, and in any event within 24 hours after the earliest of (i)
discovery thereof, (ii) the business day on which discovery should have occurred
through the exercise of reasonable care and (iii) in the case of any error, the
date of actual receipt of the earliest notice which reflects such error, it
being agreed that discovery and receipt of notice may only occur on a business
day. The Custodian shall promptly advise the Fund whenever the Custodian learns
of any errors, omissions or interruption in, or delay or unavailability of, the
Terminal Link.

     12.  Each party shall, as soon as practicable after its receipt of a
Certificate or of any notice transmitted by the Terminal Link, verify to the
other party by use of the Terminal Link its receipt of such Certificate or
notice, and in the absence of such verification a party to whom a Certificate or
notice is sent shall not be liable for any failure to act in accordance with
such Certificate or notice, and the sending party may not claim that such
Certificate or notice was received by the other.


                                     - 39 -
<PAGE>

                                  ARTICLE XVIII

                                  MISCELLANEOUS


     1.   Annexed hereto as Appendix A is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Authorized Persons. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event that any such present
Authorized Person ceases to be an Authorized Person or in the event that other
or additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be entitled to rely and to
act upon Oral Instructions, Written Instructions, or signatures of the present
Authorized Persons as set forth in the last delivered Certificate to the extent
provided by this Agreement.

     2.   Annexed hereto as Appendix B is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Officers of the Fund. The Fund agrees to furnish to
the Custodian a new Certificate in similar form in the event any such present
Officer ceases to be an Officer of the Fund, or in the event that other or
additional Officers are elected or appointed. Until such new Certificate shall
be received, the Custodian shall be entitled to rely and to act upon the
signatures of the Officers as set forth in the last delivered Certificate to the
extent provided by this Agreement.

     3.   Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, other than any Certificate or
Written Instructions, shall be sufficiently given if addressed to the Custodian
and mailed or delivered to it at its offices at 90 Washington Street, New York,
New York 10286, or at such other place as the Custodian may from time to time
designate in writing.

     4.   Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for the
Fund first above written, or at such other place as the Fund may from time to
time designate in writing.

     5.   This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Trustees of the Fund,
except that Appendices A and B may be amended unilaterally by the Fund without
such an approving resolution.


                                     - 40 -
<PAGE>

     6.   This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Custodian, or by the Custodian or The Bank of New York without the
written consent of the Fund, authorized or approved by a resolution of the
Fund's Board of Trustees. For purposes of this paragraph, no merger,
consolidation, or amalgamation of the Custodian, The Bank of New York, or the
Fund shall be deemed to constitute an assignment of this Agreement.

     7.   This Agreement shall be construed in accordance with the laws of the
State of New York without giving effect to conflict of laws principles thereof.
Each party hereby consents to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any dispute arising
hereunder and hereby waives its right to trial by jury.

     8.   This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.

     9.   A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees of the Fund as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund; provided, however, that
the Declaration of Trust of the Fund provides that the assets of a particular
Series of the Fund shall under no circumstances be charged with liabilities
attributable to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against a particular Series
of the Fund shall look only to the assets of that particular Series for payment
of such credit, contract or claim.


                                     - 41 -
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.


                                    TCW/DW INCOME AND GROWTH FUND

[SEAL]                              By:_______________________


Attest:


- ------------------------


                                    THE BANK OF NEW YORK


[SEAL]                              By: /s/ Stephen E. Grunston
                                       --------------------------
                                       Stephen E. Grunston
                                       Vice President
Attest:


/s/ Vincent M. Blazewicz
- ------------------------


                                     - 42 -
<PAGE>

                                   APPENDIX A


     I,            , President and I,             ,       of TCW/DW INCOME AND
GROWTH FUND, a Massachusetts business trust (the "Fund"), do hereby 
certify that:

     The following individuals have been duly authorized by the Board of
Trustees of the Fund in conformity with the Fund's Declaration of Trust and
By-Laws to give Oral Instructions and Written Instructions on behalf of the
Fund, except that those persons designated as being an "Officer of TCW/DW 
INCOME AND GROWTH FUND" shall be an Authorized Person only for purposes of 
Articles XII and XIII. The signatures set forth opposite their respective 
names are their true and correct signatures:


     Name              Position            Signature

_________________   ________________    _________________
<PAGE>

                                   APPENDIX B


     I,            , President and I,             ,         of TCW/DW INCOME AND
GROWTH FUND, a Massachusetts business trust (the "Fund"), do hereby certify
that:

     The following individuals for whom a position other than "Officer of DWTC"
is specified serve in the following positions with the Fund and each has been
duly elected or appointed by the Board of Trustees of the Fund to each such
position and qualified therefor in conformity with the Fund's Declaration of
Trust and By-Laws. With respect to the following individuals for whom a position
of "Officer of DW INCOME AND GROWTH FUND" is specified, each such individual has
been designated by a resolution of the Board of Trustees of the Fund to be an 
Officer for purposes of the Fund's Custody Agreement with The Bank of New York,
but only for purposes of Articles XII and XIII thereof and a certified copy of 
such resolution is attached hereto. The signatures of each individual below set 
forth opposite their respective names are their true and correct signatures:


     Name                 Position             Signature

____________________   ___________________   _________________
<PAGE>

                                   APPENDIX C


     The undersigned,            hereby certifies that he or she is the duly
elected and acting             of TCW/DW INCOME AND GROWTH FUND (the "Fund"),
further certifies that the following resolutions were adopted by the Board 
of Trustees of the Fund at a meeting duly held on         , 1992, at which 
a quorum at all times present and that such resolutions have not been modified
or rescinded and are in full force an effect as of the date hereof.

     RESOLVED, that The Bank New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund dated as of              ,
1992 (the "Custody Agreement") is authorized and instructed on a continuous and
ongoing basis to act in accordance with, and to rely on instructions by the Fund
to the Custodian communicated by a Terminal Link as defined in the Custody
Agreement.

     RESOLVED, that the Fund shall establish access codes and grant use of such
access codes only to officers of the Fund as defined in the Custody Agreement,
and shall establish internal safekeeping procedures to safeguard and protect the
confidentiality and availability of such access codes.

     RESOLVED, that Officers of the Fund as defined in the Custody Agreement
shall, following the establishment of such access codes and such internal
safekeeping procedures, advise the Custodian that the same have been established
by delivering a Certificate, as defined in the Custody Agreement, and the
Custodian shall be entitled to rely upon such advice.


     IN WITNESS WHEREOF, I hereunto set my hand in the seal of TCW/DW INCOME 
AND GROWTH FUND, as of the    day of       , 1992.


                                                          _____________________

<PAGE>

                                   APPENDIX D


     I, Vincent Blazewicz, a Vice President with THE BANK OF NEW YORK do hereby
designate the following publications:



The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE>

                                   APPENDIX E


     The following books and records pertaining to Fund shall be prepared and
maintained by the Custodian and shall be the property of the Fund:
<PAGE>

                                    EXHIBIT A

                                  CERTIFICATION


     The undersigned,                       , hereby certifies that he or she is
the duly elected and acting           of TCW/DW INCOME AND GROWTH FUND, a 
Massachusetts business trust (the "Fund"), and further certifies that the 
following resolution was adopted by the Board of Trustees of the Fund at a 
meeting duly held on     , 1992, at which a quorum was at all times present 
and that such resolution has not been modified or rescinded and is in full force
and effect as of the date hereof.

               RESOLVED, that The Bank of New York, as Custodian pursuant to a
          Custody Agreement between The Bank of New York and the Fund dated as
          of       , 1992, (the "Custody Agreement") is authorized and
          instructed on a continuous and ongoing basis to deposit in the
          Book-Entry System, as defined in the Custody Agreement, all securities
          eligible for deposit therein, regardless of the Series to which the
          same are specifically allocated, and to utilize the Book-Entry System
          to the extent possible in connection with its performance thereunder,
          including, without limitation, in connection with settlements of
          purchases and sales of securities, loans of securities, and deliveries
          and returns of securities collateral.


IN WITNESS WHEREOF, I have hereunto set my hand and the seal of TCW/DW INCOME
AND GROWTH FUND, as of the    day of           , 1992.


                                                          ____________________

[SEAL]
<PAGE>

                                    EXHIBIT B

                                 CERTIFICATION


     The undersigned,                            , hereby certifies that he or
she is the duly elected and acting          of TCW/DW INCOME AND GROWTH FUND, a
Massachusetts business Trust (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Trustees of the Fund at a
meeting duly held on          , 1992, at which a quorum was at all times present
and that such resolution has not been modified or rescinded and is in full force
and effect as of the date hereof.

               RESOLVED, that The Bank of New York, as Custodian pursuant to a
          Custody Agreement between The Bank of New York and the Fund dated as
          of          , 1992, (the "Custody Agreement") is authorized and
          instructed on a continuous and ongoing basis until such time as it
          receives a Certificate, as defined in the Custody Agreement, to the
          contrary to deposit in The Depository Trust Company ("DTC"), as a
          "Depository" as defined in the Custody Agreement, all securities
          eligible for deposit therein, regardless of the Series to which the
          same are specifically allocated, and to utilize DTC to the extent
          possible in connection with its performance thereunder, including,
          without limitation, in connection with settlements of purchases and
          sales of securities, loans of securities, and deliveries and returns
          of securities collateral.

     IN WITNESS WHEREOF, I have hereunto set my hand and the seal of TCW/DW
INCOME AND GROWTH FUND, as of the     day of          , 1992.


                                                      _______________________
                                   

[SEAL]
<PAGE>

                                   EXHIBIT B-1

                                  CERTIFICATION


     The undersigned,                            , hereby certifies that he or
she is the duly elected and acting           of TCW/DW INCOME AND GROWTH FUND, a
Massachusetts business Trust (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Trustees of the Fund at a
meeting duly held on         , 1992, at which a quorum was at all times present
and that such resolution has not been modified or rescinded and is in full force
and effect as of the date hereof.

               RESOLVED, that The Bank of New York, as Custodian pursuant to a
          Custody Agreement between The Bank of New York and the Fund dated as
          of          , 1992  (the "Custody Agreement") is authorized and
          instructed on a continuous and ongoing basis until such time as it
          receives a Certificate, as defined in the Custody Agreement, to the
          contrary to deposit in the Participants Trust Company as a Depository,
          as defined in the Custody Agreement, all securities eligible for
          deposit therein, regardless of the Series to which the same are
          specifically allocated, and to utilize the Participants Trust Company
          to the extent possible in connection with its performance thereunder,
          including, without limitation, in connection with settlements of
          purchases and sales of securities, loans of securities, and deliveries
          and returns of securities collateral.

     IN WITNESS WHEREOF, I have hereunto set my hand and the seal of TCW/DW 
INCOME AND GROWTH FUND, as of the     day of         , 1992.


                                                      _______________________


[SEAL]
<PAGE>

                                    EXHIBIT C

                                  CERTIFICATION


     The undersigned,                              , hereby certifies that he or
she is the duly elected and acting             of TCW/DW INCOME AND GROWTH 
FUND, a Massachusetts business trust (the "Fund"), and further certifies that 
the following resolution was adopted by the Board of Trustees of the Fund at a
meeting duly held on       , 1992, at which a quorum was at all times present
and that such resolution has not been modified or rescinded and is in full force
and effect as of the date hereof.

               RESOLVED, that The Bank of New York, as Custodian pursuant to a
          Custody Agreement between The Bank of New York and the Fund dated as
          of         , 1992, (the "Custody Agreement") is authorized and
          instructed on a continuous and ongoing basis until such time as it
          receives a Certificate, as defined in the Custody Agreement, to the
          contrary, to accept, utilize and act with respect to Clearing Member
          confirmations for Options and transaction in Options, regardless of
          the Series to which the same are specifically allocated, as such terms
          are defined in the Custody Agreement, as provided in the Custody
          Agreement.

     IN WITNESS WHEREOF, I have hereunto set my hand and the seal of TCW/DW 
INCOME AND GROWTH FUND, as of the     day of       , 1992.


                                                      _______________________


[SEAL]




<PAGE>

                                 AMENDED AND RESTATED
                        TRANSFER AGENCY AND SERVICE AGREEMENT

                                         with

                              DEAN WITTER TRUST COMPANY

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                                  TABLE OF CONTENTS

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                                                                          Page
                                                                          ----
<S>                                                                       <C>
Article 1      Terms of Appointment; Duties of DWTC  . . . . . . . . .      2

Article 2      Fees and Expenses . . . . . . . . . . . . . . . . . . .      6

Article 3      Representations and Warranties of DWTC. . . . . . . . .      7

Article 4      Representations and Warranties of the Fund. . . . . . .      8

Article 5      Duty of Care and Indemnification. . . . . . . . . . . .      9

Article 6      Documents and Covenants of the Fund and DWTC. . . . . .     12

Article 7      Duration and Termination of Agreement . . . . . . . . .     16

Article 8      Assignment. . . . . . . . . . . . . . . . . . . . . . .     16

Article 9      Affiliations. . . . . . . . . . . . . . . . . . . . . .     17

Article 10     Amendment . . . . . . . . . . . . . . . . . . . . . . .     18

Article 11     Applicable Law. . . . . . . . . . . . . . . . . . . . .     18

Article 12     Miscellaneous . . . . . . . . . . . . . . . . . . . . .     18

Article 13     Merger of Agreement . . . . . . . . . . . . . . . . . .     20

Article 14     Personal Liability. . . . . . . . . . . . . . . . . . .     21

</TABLE>
                                         -i-

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AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT

          AMENDED AND RESTATED AGREEMENT made as of the 1st day of August, 1993
by and between each of the TCW/DW Funds listed on the signature pages hereof,
each of such Funds acting severally on its own behalf and not jointly with any
of such other Funds (each such Fund hereinafter referred to as the "Fund"), each
such Fund having its principal office and place of business at Two World Trade
Center, New York, New York, 10048, and DEAN WITTER TRUST COMPANY, a trust
company organized under the laws of New Jersey, having its principal office and
place of business at Harborside Financial Center, Plaza Two, Jersey City, New
Jersey 07311 ("DWTC").

          WHEREAS, the Fund desires to appoint DWTC as its transfer agent,
dividend disbursing agent and shareholder servicing agent and DWTC desires to
accept such appointment;

          NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                         -1-

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Article 1     TERMS OF APPOINTMENT; DUTIES OF DWTC

              1.1  Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints DWTC to act as, and DWTC agrees
to act as, the transfer agent for each series and class of shares of the Fund,
whether now or hereafter authorized or issued ("Shares"), dividend disbursing
agent and shareholder servicing agent in connection with any accumulation, open-
account or similar plans provided to the holders of such Shares ("Shareholders")
and set out in the currently effective prospectus and statement of additional
information ("prospectus") of the Fund, including without limitation any
periodic investment plan or periodic withdrawal program.

              1.2  DWTC agrees that it will perform the following services:

              (a)  In accordance with procedures established from time to time
by agreement between the Fund and DWTC, DWTC shall:

              (i)  Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation therefor to the
custodian of the assets fo the Fund (the "Custodian");

                                      -2-


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          (ii)  Pursuant to purchase orders, issue the appropriate number of
Shares and issue certificates therefor or hold such Shares in book form in the
appropriate Shareholder account;


          (iii)  Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Custodian;


          (iv)  At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over or cause to be paid
over in the appropriate manner such monies as instructed by the redeeming
Shareholders;


          (v)  Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;


          (vi)  Prepare and transmit payments for dividends and distributions
declared by the Fund;


          (vii)  Calculate any sales charges payable by a Shareholder on
purchases and/or redemptions of Shares of the Fund as such charges may be
reflected in the prospectus;


          (viii)  Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and


                                         -3-

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          (ix)  Record the issuance of Shares of the Fund and maintain pursuant
to Rule 17Ad-10(e) under the securities Exchange Act of 1934 ("1934 Act") a
record of the total number of Shares of the Fund which are authorized, based
upon data provided to it by the Fund, and issued and outstanding.  DWTC shall
also provide to the Fund on a regular basis the total number of Shares which are
authorized, issued and outstanding and shall notify the Fund in case any
proposed issue of Shares by the Fund would result in an overissue.  In case any
issue of Shares would result in an overissue, DWTC shall refuse to issue such
Shares and shall not countersign and issue any certificates requested for such
Shares. When recording the issuance of Shares, DWTC shall have no obligation to
take cognizance of any Blue Sky laws relating to the issue of sale of such
Shares, which functions shall be the sole responsibility of the Fund.


          (b)  In addition to and not in lieu of the services set forth in the
above paragraph (a), DWTC shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, shareholder
servicing agent in connection with dividend reinvestment, accumulation, open-
account or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program), including but not limited to, maintaining
all Shareholder accounts, preparing Shareholder meeting lists,

                                         -4-

<PAGE>

mailing proxies, receiving and tabulating proxies, mailing shareholder reports
and prospectuses to current Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts, preparing and filing appropriate forms required
with respect to dividends and distributions by federal tax authorities for all
Shareholders, preparing and mailing confirmation forms and statements of 
account to Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing and mailing
activity statements for Shareholders and providing Shareholder account
information; (ii) open any and all bank accounts which may be necessary or
appropriate in order to provide the foregoing services; and (iii) provide a
system which will enable the Fund to monitor the total number of Shares sold
in each State or other jurisdiction.

          (c)  In addition, the Fund shall (i) identify to DWTC in writing those
transactions and assets to be treated as exempt from Blue Sky reporting for each
State and (ii) verify the establishment of transactions for each State on the
system prior to activation and thereafter monitor the daily activity for each
State.  The responsibility of DWTC for the Fund's registration status under the
Blue Sky or securities laws of any State or other jurisdiction is solely limited
to the initial establishment of transactions subject to Blue Sky compliance by
the Fund and the reporting of such transactions

                                         -5-

<PAGE>

to the Fund as provided above and as agreed from time to time by the Fund and
DWTC.

          (d)    DWTC shall provide such additional services and functions not
specifically described herein  as may be mutually agreed between DWTC and the
Fund.  Procedures applicable to such services may be established from time to
time by agreement between the Fund and DWTC.


Article 2   Fees and Expenses

           2.1  For performance by DWTC pursuant to this Agreement, each Fund
agrees to pay DWTC an annual maintenance fee for each Shareholder account and
certain transactional fees, if applicable, as set out in the respective fee
schedule attached hereto as Schedule A.  Such fees and out-of-pocket expenses
and advances identified under Section 2.2 below may be changed from time to time
subject to mutual written agreement between the Fund and DWTC.

          2.2  In addition to the fees paid under section 2.1 above, the Fund
agrees to reimburse DWTC in connection with the services rendered by DWTC
hereunder.  In addition, any other expenses incurred by DWTC at the request
or with the consent of the Fund will be reimbursed by the Fund.

          2.3  The Fund agrees to pay all fees and reimbursable expenses within
a reasonable period of time

                                         -6-

<PAGE>

following the mailing of the respective billing notice.  Postage for mailing of
dividends, proxies, Fund reports and other mailings to all Shareholder accounts
shall be advanced to DWTC by the Fund upon request prior to the mailing date of
such materials.

Article 3      REPRESENTATIONS AND WARRANTIES OF DWTC
               DWTC represents and warrants to the Fund that:

               3.1  It is a trust company duly organized and existing and in
good standing under the laws of New Jersey and it is duly qualified to carry on
its business in New Jersey.

               3.2  It is and will remain registered with the U.S. Securities
and Exchange Commission ("SEC") as a Transfer Agent pursuant to the requirements
of Section 17A of the 1934 Act.

               3.3  It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.

               3.4  All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.

               3.5  It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.

                                         -7-

<PAGE>

Article 4      REPRESENTATIONS AND WARRANTIES OF THE FUND
               The Fund represents and warrants to DWTC that:

               4.1  It is a corporation duly organized and existing and in good
standing under the laws of Delaware and Maryland or a trust duly organized and
existing and in good standing under the laws of Massachusetts, as the case may
be.

               4.2  It is empowered under applicable laws and by its Articles of
Incorporation or Declaration of Trust, as the case may be, and under its By-Laws
to enter into and perform this Agreement.

               4.3  All corporate proceedings necessary to authorize it to enter
into and perform this Agreement have been taken.

               4.4  It is an investment company registered with the SEC under
the Investment Company Act of 1940, as amended (the "1940 Act").

               4.5  A registration statement under the Securities Act of 1933
(the "1933 Act") is currently effective and will remain effective, and
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale.

Article 5      DUTY OF CARE AND INDEMNIFICATION

                                         -8-

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               5.1 DWTC shall not be responsible for, and the Fund shall
indemnify and hold DWTC harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arousing out of
or attributable to:

          (a)   All actions of DWTC or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.


          (b)  The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of breach of any representation or
warranty of the Fund hereunder.

          (c)  The reliance on or use by DWTC or its agents or subcontractors of
information, records and documents which (i) are received by DWTC or its agents
or subcontractors and furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund.

          (d)  The reliance on, or the carrying out by DWTC or its agents or
subcontractors of, any instructions or requests of the Fund.

                                         -9-

<PAGE>

          (e)  The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities or Blue Sky laws of
any State or other jurisdiction that such Shares be registered in such State or
other jurisdiction or in violation of any stop order or other determination or
ruling by any federal agency or any State or other jurisdiction with respect to
the offer or sale of such Shares in such State or other jurisdiction.

               5.2  DWTC shall indemnify and hold the Fund harmless from or
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or failure
or omission to act by DWTC as a result of the lack of good faith, negligence or
willful misconduct of DWTC, its officers, employees or agents.

               5.3  At any time, DWTC may apply to any officer of the Fund for
instructions, and may consult with legal counsel to the Fund, with respect to
any matter arising in connection with the services to be performed by DWTC under
this Agreement, and DWTC and its agents or subcontractors shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel.  DWTC, its
agents and subcontractors shall be protected and indemnified

                                         -10-


<PAGE>
in acting upon any paper or document furnished by or on behalf of the Fund,
reasonably believed to be genuine and to have been signed by the proper person
or persons, or upon any instruction, information, data, records or documents
provided to DWTC or its agents or subcontractors by machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. DWTC, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signature of the officers of the Fund, and the proper countersignature
of any former transfer agent or registrar, or of a co-transfer agent or co-
registrar.

               5.4  In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes.

                                         -11-
<PAGE>

               5.5  Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.

               5.6  In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which either party
may be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.

Article 6      DOCUMENTS AND COVENANTS OF THE FUND AND DWTC

               6.1  The Fund shall promptly furnish to DWTC the following:

          (a)  If a corporation:

          (i)  A certified copy of the resolution of the Board of Directors of
the Fund authorizing the appointment of DWTC and the execution and delivery of
this Agreement;

                                         -12-
<PAGE>

          (ii) A certified copy of the Articles of Incorporation and By-Laws of
the Fund and all amendments thereto;

          (iii)     Certified copies of each vote of the Board of Directors
designating persons authorized to give instructions on behalf of the Fund and
signature cards bearing the signature of any officer of the Fund or any other
person authorized to sign written instructions on behalf of the Fund;

          (iv) A specimen of the certificate for Shares of the Fund in the form
approved by the Board of Directors, with a certificate of the Secretary of the
Fund as to such approval;

          (b)  If a business trust:

          (i)  A certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of DWTC and the execution and delivery of
this Agreement;

          (ii) A certified copy of the Declaration of Trust and By-laws of the
Fund and all amendments thereto;

          (iii)     Certified copies of each vote of the Board of Trustees
designating persons authorized to give instructions on behalf of the Fund and
signature cards bearing the signature of any officer of the Fund or any other
person authorized to sign written instructions on behalf of the Fund;

                                         -13-
<PAGE>

          (iv) A specimen of the certificate for Shares of the Fund in the form
approved by the Board of Trustees, with a certificate of the Secretary of the
Fund as to such approval;

          (c)  The current registration statements and any amendments and
supplements thereto filed with the SEC pursuant to the requirements of the 1933
Act or the 1940 Act;

          (d)  All account application forms or other documents relating to
Shareholder accounts and/or relating to any plan, program or service offered or
to be offered by the Fund; and

          (e)  Such other certificates, documents or opinions as DWTC deems to
be appropriate or necessary for the proper performance of its duties.

               6.2  DWTC hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of Share
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.

               6.3  DWTC shall prepare and keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable and
as required by applicable laws and regulations. To the extent required by

                                         -14-
<PAGE>

Section 31 of the 1940 Act, and the rules and regulations thereunder, DWTC
agrees that all such records prepared or maintained by DWTC relating to the
services performed by DWTC hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such Section 31 of
the 1940 Act, and the rules and regulations thereunder, and will be surrendered
promptly to the Fund on and in accordance with its request.

          6.4  DWTC and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to any other person
except as may be required by law or with the prior consent of 
DWTC and the Fund.

          6.5  In case of any request or demands for the inspection of the
Shareholder records of the Fund, DWTC will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection.  DWTC reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records of such person.


                                         -15-

<PAGE>

ARTICLE 7      DURATION AND TERMINATION OF AGREEMENT

               7.1  This Agreement shall remain in full force and effect until
July 31, 1996 and from year-to-year thereafter unless terminated by either party
as provided in Section 7.2 hereof.

               7.2  This Agreement may be terminated by the Fund on 60 days
written notice, and by DWTC on 90 days written notice, to the other party
without payment of any penalty.

               7.3  Should the Fund exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and other materials will
be borne by the Fund.  Additionally, DWTC reserves the right to charge for any
other reasonable fees and expenses associated with such termination.


ARTICLE 8      ASSIGNMENT

               8.1  Except as provided in Section 8.3 below, neither this
agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.

               8.2  This Agreement shall inure to the benefit of and be binding 
upon the parties and their respective permitted successors and assigns.


                                         -16-
<PAGE>

               8.3  DWTC may, in is sole discretion and without further consent
by the Fund, subcontract, in whole or in part, for the performance of its
obligations and duties hereunder with any person or entity including but not
limited to companies which are affiliated with DWTC; PROVIDED, HOWEVER, that
such person or entity has and maintains the qualifications, if any, required to
perform such obligations and duties, and that DWTC shall be as fully responsible
to the Fund and the acts and omissions of any agent or subcontractor as it is
for its own acts or omissions under this Agreement.


ARTICLE 9      AFFILIATIONS

               9.1 DWTC may now or hereafter, without the consent of or notice
to the Fund, function as transfer agent and/or shareholder servicing agent for
any other investment company registered with the SEC under the 1940 Act and for
any other issuer, including without limitation any investment company whose
adviser, administrator, sponsor or principal underwriter is or may become
affiliated with Dean Witter, Discover & Co. or any of its direct or indirect 
subsidiaries or affiliates.

               9.2  It is understood and agreed that the Directors or Trustees
(as the case may be), officers, employees, agents and shareholders of the Fund,
and the directors, officers, employees, agents and shareholders of the 


                                         -17-

<PAGE>

Fund's investment adviser and/or distributor, are or may be interested in DWTC
as directors, officers, employees, agents and shareholders or otherwise, and
that the directors, officers, employees, agents and shareholders of DWTC may be
interested in the Fund as Directors or Trustees (as the case may be), officers,
employees, agents and shareholders or otherwise, or in the investment adviser
and/or distributor  as directors, officers, employees, agents, shareholders or
otherwise.


ARTICLE 10     AMENDMENT

               10.1 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors  or the Board of Trustees (as the case may be) of the
Fund. 


ARTICLE 11     APPLICABLE LAW

               11.1 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New York.


ARTICLE 12     MISCELLANEOUS

               12.1 In the event that one or more additional investment
companies managed or administered by Dean Witter InterCapital Inc. or any of its
affiliates ("Additional TCW/DW Funds") desires to retain DWTC to act as transfer
agent, dividend disbursing agent and/or shareholder servicing agent,


                                         -18-

<PAGE>
and DWTC desires to render such services, such services shall be provided
pursuant to a letter agreement, substantially in the form of Exhibit A hereto,
between DWTC and each Additional TCW/DW Fund.

               12.2 In the event of an alleged loss or destruction of any Share
certificate, no new certificate shall be issued in lieu thereof, unless there
shall first be furnished to DWTC an affidavit of loss or non-receipt by the
holder of Shares with respect to which a certificate has been lost or destroyed,
supported by an appropriate bond satisfactory to DWTC and the Fund issued by a
surety company satisfactory to DWTC and the Fund issued by a surety company
satisfactory to DWTC, except that DWTC may accept an affidavit of loss and
indemnity agreement executed by the registered holder (or legal representative)
without surety in such form as DWTC deems appropriate indemnifying DWTC and the
Fund for the issuance of a replacement certificate, in cases where the alleged
loss is in the amount of $1000 or less.

               12.3 In the event that any check or other order for payment of
money on the account of any Shareholder or new investor is returned unpaid for
any reason, DWTC will (a) give prompt notification to the Fund's distributor
("Distributor") (or to the Fund if the Fund acts as its own distributor) of such
non-payment; and (b) take such other action, including imposition of a
reasonable processing or handling fee, as DWTC

                                         -19-

<PAGE>
may, in its sole discretion, deem appropriate or as the Fund and, if
applicable, the Distributor may instruct DWTC.

               12.4 Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or to DWTC shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.

To the Fund:

[Name of Fund]
Two World Trade Center
New York, New York 10048

Attention:   General Counsel

To DWTC:

Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311

Attention:    President.

Article 13          MERGER OF AGREEMENT
                    13.1 This Agreement constitutes the entire agreement between
the parties hereto and supersedes any prior agreement with respect to the
subject matter hereof whether oral or written.

                                         -20-
<PAGE>

Article 14          PERSONAL LIABILITY

                    14.1 In the case of a Fund organized as a Massachusetts
business trust, a copy of the Declaration of Trust of the Fund is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Board of Trustees of the Fund
as Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund; provided, however, that
the Declaration of Trust of the Fund provides that the assets of a particular
Series of the Fund shall under no circumstances be charged with liabilities
attributable to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against, a particular series
of the Fund shall look only to the assets of that particular Series for payment
of such credit, contract or claim.

                                         -21-
<PAGE>

               IN WITNESS WHEREOF, the parties hereto have caused this Amended
and Restated Agreement to be executed in their names and on their behalf by and
through their duly authorized officers, as of the day and year first above
written.


     (1)  TCW/DW CORE EQUITY TRUST
     (2)  TCW/DW NORTH AMERICAN GOVERNMENT INCOME TRUST
     (3)  TCW/DW LATIN AMERICAN GROWTH FUND
     (4)  TCW/DW INCOME AND GROWTH FUND
     (5)  TCW/DW SMALL CAP GROWTH FUND
     (6)  TCW/DW BALANCED FUND


                                   By:  /s/ SHELDON CURTIS
                                        ----------------------------------
                                        Sheldon Curtis
                                        Vice President and General Counsel

ATTEST:

/s/ BARRY FINK
- -------------------                                     
Barry Fink
Assistant Secretary

                                   DEAN WITTER TRUST COMPANY

                                   By:  CHARLES A. FIUMEFREDDO
                                        ----------------------
                                        Charles A. Fiumefreddo
                                        Chairman

ATTEST:

/s/ DAVID A. HUGHEY
- ------------------------                                      
David A. Hughey
Executive Vice President

                                         -22-
<PAGE>
          IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Agreement to be executed in their names and on their behalf by and
through their duly authorized officers, as of the day and year first above
written.


(1)  TCW/DW CORE EQUITY TRUST
(2)  TCW/DW NORTH AMERICAN GOVERNMENT INCOME TRUST
(3)  TCW/DW LATIN AMERICAN GROWTH FUND
(4)  TCW/DW INCOME AND GROWTH FUND
(5)  TCW/DW SMALL CAP GROWTH FUND
(6)  TCW/DW BALANCED FUND



               BY:/s/Sheldon Curtis               
                  -------------------------------------
                     Sheldon Curtis
                     Vice President and General Counsel

ATTEST:


/s/ Barry Fink           
- -----------------------------
    Barry Fink
    Assistant Secretary


               DEAN WITTER TRUST COMPANY


               BY:/s/ Charles A. Fiumefreddo
                  ---------------------------------------   
                      Charles A. Fiumefreddo
                      Chairman

ATTEST:


/s/ David A. Hughey        
- ----------------------------
    David A. Hughey
    Executive Vice President

                                         -23-

<PAGE>

                                      EXHIBIT A

Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, NJ 07311

Gentlemen:
          The undersigned, (    Name of Fund     ) a (Massachusetts business
trust/Maryland Corporation) (the "Fund"), desires to employ and appoint Dean
Witter Trust Company ("DWTC") to act as transfer agent for each series and class
of shares of the Fund, whether now or hereafter authorized or issued ("Shares"),
dividend disbursing agent and shareholder servicing agent, registrar and agent
in connection with any accumulation, open-account or similar plan provided to
the holders of Shares, including without limitation any periodic investment plan
or periodic withdrawal plan.

          The Fund hereby agrees that, in consideration for the payment by the
Fund to DWTC of fees as set out in the fee schedule attached hereto as Schedule
A, DWTC shall provide such services to the Fund pursuant to the terms and
conditions set forth in the Transfer Agency and Service Agreement annexed
hereto, as if the Fund was a signatory thereto.

                                         -24-

<PAGE>

          Please indicate DWTC's acceptance of employment and appointment by the
Fund in the capacities set forth above by so indicating in the space provided
below.

                                   Very truly yours,

                                   ( Name of Fund )


                                   By:                                    
                                      ----------------------------------
                                        Sheldon Curtis
                                      Vice President and General Counsel

ACCEPTED AND AGREED TO:

DEAN WITTER TRUST COMPANY

By:                        
  -----------------------  
Its:                     
    ---------------------  
Date:                      
      -------------------
                                         -25-

<PAGE>

                                      SCHEDULE A

Fund:     TCW/DW Income and Growth Fund

Fees:     (1)  Annual maintenance fee of $11.50 per shareholder account, payable
          monthly.

          (2)  A fee equal to 1/12 of the fee set forth in (1) above, for
          providing Forms 1099 for accounts closed during the year, payable
          following the end of the calendar year.

          (3)  Out-of-pocket expenses in accordance with Section 2.2 of the
          Agreement.

          (4)  Fees for additional services not set forth in this Agreement
          shall be as negotiated between the parties.


<PAGE>


                              MANAGEMENT AGREEMENT

     AGREEMENT made as of the 17th day of April, 1995 by and between TCW/DW
Income and Growth Fund, an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts (hereinafter called the "Fund"), and
Dean Witter Services Company Inc., a Delaware corporation (hereinafter called
the "Manager");

     WHEREAS, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and

     WHEREAS, The Fund desires to retain the Manager to render services in the
manner and on the terms and conditions hereinafter set forth; and

     WHEREAS, The Manager desires to be retained to perform services on said
terms and conditions:

     Now, Therefore, this Agreement


                              W I T N E S S E T H:

that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Manager agree as follows:

     1.   The Fund hereby retains the Manager to act as manager of the Fund and,
subject to the supervision of the Trustees, to supervise the business affairs of
the Fund as hereinafter set forth. Without limiting the generality of the
foregoing, the Manager shall (i) manage the Fund's business affairs and
supervise the overall day-to-day operations of the Fund (other than rendering
investment advice); (ii) provide the Fund with full administrative services,
including the maintenance of certain books and records, such as journals, ledger
accounts and other records required under the Act, the notification to the
Fund's investment adviser of available funds for investment, the reconciliation
of account information and balances among the Fund's custodian, transfer agent
and dividend disbursing agent and the Fund's investment adviser, and the
calculation of the net asset value of the Fund's shares; (iii) provide the Fund
with the services of persons competent to perform such supervisory,
administrative and clerical functions as are necessary to provide effective
operation of the Fund; (iv) oversee the performance of administrative and
professional services rendered to the Fund by others, including its custodian,
transfer agent and dividend disbursing agent, as well as accounting, auditing
and other services; (v) provide the Fund with adequate general office space and
facilities; and (vi) oversee the preparation and the printing of the periodic
updating of the Fund's registration statement and prospectus and statement of
additional information, tax returns, proxy statements, and reports to its
shareholders and the Securities and Exchange Commission.

     2.   The Manager shall, at its own expense, maintain such staff and employ
or retain such personnel and consult with such other persons as it shall from
time to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Manager shall be deemed to include
persons employed or otherwise retained by the Manager to furnish services,
statistical and other factual data, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Manager may desire. The Manager shall, as agent for the Fund, maintain the
Fund's records and books of account (other than those maintained by the Fund's
transfer agent, registrar, custodian and other agencies). All such books and
records so maintained shall be the property of the Fund and, upon request
therefor, the Manager shall surrender to the Fund such of the books and records
so requested.

     3.   The Fund will, from time to time, furnish or otherwise make available
to the Manager such financial reports, proxy statements and other information
relating to the business and affairs of the Fund as the Manager may reasonably
require in order to discharge its duties and obligations hereunder.

     4.   The Manager shall bear the cost of rendering the administrative 
services to be performed by it under this Agreement, and shall, at its own 
expense, pay the compensation of the Trustees, officers and employees, if 
any, of the Fund who are also directors, officers or employees of the 
Manager, and provide such office space, facilities and equipment and such 
clerical help and bookkeeping services as the Fund 

                                       1

<PAGE>


shall reasonably require in the conduct of its business. The Manager shall 
also bear the cost of telephone service, heat, light, power and other 
utilities provided to the Fund.

     5.   The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund (except expenses borne by the Fund's investment adviser pursuant to
an investment advisory agreement with the Fund), including without limitation:
fees pursuant to an investment advisory agreement into which the Fund may enter,
fees pursuant to any plan of distribution that the Fund may adopt; the charges
and expenses of any registrar, any custodian or depository appointed by the Fund
for the safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with portfolio
transactions to which the Fund is a party; all taxes, including securities or
commodities issuance and transfer taxes, and fees payable by the Fund to
federal, state or other governmental agencies; the cost and expense of engraving
or printing certificates representing shares of the Fund; all costs and expenses
in connection with the registration and maintenance of registration of the Fund
and its shares with the Securities and Exchange Commission and various states
and other jurisdictions (including filing fees and legal fees and disbursements
of counsel and the costs and expenses of preparing, printing, including
typesetting, and distributing prospectuses and statements of additional
information for such purposes); all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Manager or the Fund's investment
adviser or any corporate affiliate of either of them; all expenses incident to
the payment of any dividend or distribution program; charges and expenses of any
outside service used for pricing of the Fund's shares; charges and expenses of
legal counsel, including counsel to the Trustees of the Fund who are not
interested persons (as defined in the Act) of the Fund or the Manager or the
Fund's investment adviser, and of independent accountants, in connection with
any matter relating to the Fund; membership dues of industry associations;
interest payable on Fund borrowings; postage; insurance premiums on property or
personnel (including officers and Trustees) of the Fund which inure to its
benefit; extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto); and
all other charges and costs of the Fund's operation unless otherwise explicitly
provided herein.

     6.   For the services to be rendered, the facilities furnished, and the
expenses assumed by the Manager, the Fund shall pay to the Manager monthly
compensation determined by applying the following annual rates to the Fund's
average daily net assets: 0.45% of daily net assets up to $500 million; and
0.42% of daily net assets over $500 million. Such calculation shall be made by
applying 1/365th of the annual rates to the Fund's net assets each day
determined as of the close of business on that day or the last previous business
day. If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a manner consistent
with the calculation of the fees as set forth above.

     7.   In the event the operating expenses of the Fund, including amounts
payable to the Manager pursuant to paragraph 6 hereof, for any fiscal year
ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Manager shall reduce its management fee to the extent of 60% of
such excess and, if and to the extent required by law, pursuant to any such
laws or regulations, will reimburse the Fund for 60% of annual operating
expenses in excess of any expense limitation that may be applicable; provided,
however, there shall be excluded from such expenses the amount of any interest,
taxes, distribution fees, brokerage commissions and extraordinary expenses
(including but not limited to legal claims and liabilities and litigation costs
and any indemnification related thereto) paid or payable by the Fund. Such
reduction, if any, shall be computed and accrued weekly, shall be settled on a
monthly basis, and shall be based upon the expense limitation applicable to the
Fund as at the end of the last business day of the month. Should two or more
such expense limitations be applicable as at the end of the last full week of
the month, that expense limitation which results in the largest reduction in the
Manager's fee shall be applicable.

     For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt securities in 

                                       2

<PAGE>


the Fund's portfolio accrued to and including the last day of the Fund's 
fiscal year, and dividends declared on equity securities in the Fund's 
portfolio, the record dates for which fall on or prior to the last day of 
such fiscal year, but shall not include gains from the sale of securities.

     8.   The Manager will use its best efforts in the management of the Fund,
but in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations hereunder, the Manager shall not be liable
to the fund or any of its investors for any error of judgment or mistake of law
or for any act or omission by the Manager or for any losses sustained by the
Fund or its investors. The Manager shall be indemnified by the Fund as an agent
of the Fund in accordance with the terms of Section 4.8 of the Fund's By-laws.

     9.   Nothing contained in this Agreement shall prevent the Manager or any
affiliated person of the Manager from acting as manager for any other person,
firm or corporation. Nothing in this Agreement shall limit or restrict the right
of any Trustee, officer or employee of the Manager to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business whether of a similar or dissimilar nature.

     10.  This Agreement shall remain in effect until April 30, 1995 and from
year to year thereafter provided such continuance is approved at least annually
by the Board of Trustees of the Fund; provided that such continuance is also
approved annually by a vote of a majority of the Trustees of the Fund who are
not parties to this Agreement of "interested persons" (as defined in the Act) of
any such party; provided, however, that the Fund, acting by majority vote of the
Trustees, or the Manager may, at any time and without the payment of any
penalty, terminate this Agreement upon thirty days' written notice to the other
party. Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed post-paid, to the other party at the principal office of
such party.

     11.  This Agreement may be amended or modified by the parties by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Trustees of the Fund.

     12.  This Agreement may be assigned by either party with the written
consent of the other party.

     13.  This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.

     14.  The Fund acknowledges that the Manager owns its own name, initials and
logo. The Fund agrees to change its name at the request of the Manager if this
Agreement is terminated for any reason.

     15.  The Declaration of Trust establishing TCW/DW Income and Growth
Fund, dated November 20, 1992, a copy of which, together with all amendments
thereto (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name TCW/DW Income and
Growth Fund refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of TCW/DW Income and Growth Fund shall be held to
any personal liability, nor shall resort be had to their private property for
the satisfaction of any obligation or claim or otherwise, in connection with the
affairs of said TCW/DW Income and Growth Fund, but the Trust Estate only
shall be liable.


                                        3


<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.


                              TCW/DW INCOME AND GROWTH FUND


                              By_____________________________________


Attest:

______________________


                              DEAN WITTER SERVICES COMPANY INC.


                              By______________________________________


Attest:

______________________


                                        4



<PAGE>


CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 4 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated March
8, 1996, relating to the financial statements and financial highlights of TCW/DW
Income and Growth Fund,  which appears in such Statement of Additional
Information, and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement.  We also
consent to the reference to us under the heading "Financial Highlights" in such
Prospectus and to the references to us under the headings "Independent
Accountants" and "Experts" in such Statement of Additional Information.



/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
March 22, 1996


<PAGE>

                AMENDED PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
                                       OF
                        TCW/DW INCOME AND GROWTH FUND

    WHEREAS, TCW/DW Income and Growth Fund (the "Fund") intends to engage in 
business as an open-end management investment company and is registered as 
such under the Investment Company Act of 1940, as amended (the "Act"); and

    WHEREAS, on February 5, 1993, the Fund adopted a Plan of Distribution 
pursuant to Rule 12b-1 under the Act, and the Trustees have determined that 
there is a reasonable likelihood that the Plan of Distribution will benefit 
the Fund and its shareholders; and

    WHEREAS, the Fund has employed Dean Witter Distributors Inc. (the 
"Distributor") as distributor of the Fund's shares; and

    WHEREAS, the Fund and the Distributor have entered into a separate 
Distribution Agreement dated as of this date, pursuant to which the Fund has 
employed the Distributor in such capacity during the continuous offering of 
shares of the Fund.

    NOW, THEREFORE, the Fund hereby amends the Plan of Distribution previously 
adopted, and the Distributor hereby agrees to the terms of, said Plan of 
Distribution (the "Plan"), as amended herein, in accordance with Rule 12b-1 
under the Act on the following terms and conditions:

    1.   The Fund is hereby authorized to utilize its assets to finance 
certain activities in connection with the distribution of its shares.

    2.   Subject to the supervision of the Board of Trustees and the terms of
the Distribution Agreement, the Distributor is authorized to promote the 
distribution of the Fund's shares and to provide related services through 
DWR, its affiliates or other broker-dealers it may select, and its own 
Registered Representatives.  The Distributor, DWR, its affiliates and said 
broker-dealers shall be reimbursed, directly or through the Distributor, as 
it may direct, as provided in paragraph 4 hereof for their services and 
expenses, which may include one or more of the following:  (1) compensation 
to, and expenses of, account executives and other employees, including 
overhead and telephone expenses;  (2) sales incentives and bonuses to sales 
representatives of the Distributor, DWR, its affiliates and other 
broker-dealers, and to marketing personnel in connection with promoting sales 
of shares of the Fund; (3) expenses incurred in connection with promoting 
sales of shares of the Fund; (4) preparing and distributing sales literature; 
and (5) providing advertising and promotional activities, including direct 
mail solicitation and television, radio, newspaper, magazine and other media 
advertisements.

    3.   The Distributor hereby undertakes to directly bear all costs of 
rendering the services to be performed by it under this Plan and under the 
Distribution Agreement, except for those specific expenses that the Board of 
Trustees determines to reimburse as hereinafter set forth.

    4.   The Fund is hereby authorized to reimburse the Distributor, DWR, its 
affiliates and other broker-dealers for distribution expenses incurred by 
them specificially on behalf of the Fund.  Reimbursement will be made through 
payments at the end of each month in such amounts determined at the beginning 
of each fiscal quarter by the Fund's Board of Trustees, including a majority 
of the Trustees who are not "interested persons" of the Fund, as defined in 
the Act.  The amount of each monthly payment may in no event exceed an amount 
equal to a payment at the annual rate of 0.75 of 1% of the Fund's average net 
assets during the month. In making quarterly determinations of the amounts 
that may be expended by the Fund, the Distributor shall provide, and the 
Trustees shall review, a quarterly budget of projected distribution expenses 
to be incurred by the Distributor, DWR, its affiliates or other 
broker-dealers on behalf of the Fund, together with a report explaining the 
purposes and anticipated benefits of incurring such expenses. The Board of 
Trustees shall determine the particular expenses, and the portion thereof, 
that may be borne by the Fund, and in making such determination shall 
consider the scope of the Distributor's commitment to promoting the 
distribution of the shares of the Fund directly or through DWR, its 
affiliates or other broker-dealers. All payments made hereunder pursuant to 
the Plan shall be in accordance with the terms and limitations of the Rules 
of Fair Practice of the National Association of Securities Dealers, Inc.

    5.   The Distributor may direct that all or any part of the amounts 
receivable by it under this Plan be paid directly to DWR, its affiliates or 
other broker-dealers.


                                       1
<PAGE>

    6.   If, as of the end of any fiscal year, the actual expenses incurred 
by the Distributor, DWR, its affiliates and other broker-dealers on behalf of 
the Fund (including accrued expenses and amounts reserved for incentive 
compensation and bonuses) are less than the amount of payments made by the 
Fund pursuant to this Plan, the Distributor shall promptly make appropriate 
reimbursement to the Fund. If, however, as of the end of any fiscal year, the 
actual expenses of the Distributor, DWR, its affiliates and other 
broker-dealers are greater than the amount of payments made by the Fund 
pursuant to this Plan, the Fund will not reimburse the Distributor, DWR, its 
affiliates or other broker-dealers for such expenses through payments accrued 
pursuant to this Plan in the subsequent fiscal year.

    7.   The Distributor shall provide the Fund for review by the Board of 
Trustees, and the Board of Trustees shall review, promptly after the end of 
each fiscal quarter a written report regarding the distribution expenses 
incurred by the Distributor, DWR, its affiliates or other broker-dealers on 
behalf of the Fund during such fiscal quarter, which report shall include: 
(1) an itemization of the types of expenses and the purposes therefor; (2) 
the amounts of such expenses; and (3) a description of the benefits derived 
by the Fund.

    8.   This Plan shall not take effect until it has been approved by a vote 
of at least a majority of the outstanding voting securities of the Fund (as 
defined in the Act).

    9.   This Plan shall not take effect until it has been approved, together 
with any related agreements, by votes of a majority of the Board of Trustees 
of the Fund and of the Trustees who are not "interested persons" of the Fund 
(as defined in the Act) and have no direct or indirect financial interest in 
the operation of this Plan or any agreements related to it (the "Rule 12b-1 
Trustees"), cast in person at a meeting (or meetings) called for the purpose 
of voting on this Plan and such related agreements.

    10.  This Plan shall continue in effect until April 30, 1993, and from 
year to year thereafter, provided such continuance is specifically approved 
at least annually in the manner provided for approval of this Plan in 
paragraph 9 hereof. This Plan may not be amended to increase materially the 
amount to be spent for the services described herein unless such amendment is 
approved by a vote of at least a majority of the outstanding voting 
securities of the Fund, as defined in the Act, and no material amendment to 
this Plan shall be made unless approved in the manner provided for approval 
in paragraph 9 hereof.

    11.  This Plan may be terminated at any time, without the payment of any 
penalty, by vote of a majority of the Rule 12b-1 Trustees or by a vote of a 
majority of the outstanding voting securities of the Fund, as defined in the 
Act, on no more than 30 days' written notice to any other party to this Plan.

    12.  While this Plan is in effect, the selection and nomination of 
Trustees who are not interested persons of the Fund shall be committed to the 
discretion of the Trustees who are not interested persons.

    13.  The Fund shall preserve copies of this Plan and all reports made 
pursuant to paragraph 7 hereof, for a period of not less than six years from 
the date of this Plan, as amended and restated herein, or any such report, as 
the case may be, the first two years in an easily accessible place.

    14.  This Plan shall be construed in accordance with the laws of the 
State of New York and the applicable provisions of the Act. To the extent the 
applicable law of the State of New York, or any of the provisions herein, 
conflict with the applicable provisions of the Act, the latter shall control.

    15.  The Declaration of Trust establishing TCW/DW Income and Growth Fund, 
dated November 20, 1992, a copy of which, together with all amendments 
thereto (the "Declaration"), is on file in the office of the Secretary of the 
Commonwealth of Massachusetts, provides that the name TCW/DW Income and 
Growth Fund refers to the Trustees under the Declaration collectively as 
Trustees, but not as individuals or personally; and no Trustee, shareholder, 
officer, employee or agent of TCW/DW Income and Growth Fund shall be held to 
any personal liability, nor shall resort be had to their private property for 
the satisfaction of any obligation or claim or otherwise, in connection with 
the affairs of said TCW/DW Income and Growth Fund, but the Trust Estate only 
shall be liable.


                                       2
<PAGE>

    IN WITNESS WHEREOF, the Fund and the Distributor have executed this Plan 
of Distribution, as amended, as of the day and year set forth below in New 
York, New York.

Date: February 5, 1993                        TCW/DW INCOME AND GROWTH FUND
      As amended on April 28, 1993

                                              By:
Attest:                                          ---------------------------

- -------------------------------------
                                              DEAN WITTER DISTRIBUTORS INC.

                                              By:
                                                 ---------------------------
Attest:

- -------------------------------------


                                       3

<PAGE>

               SCHEDULE FOR COMPUTATIONS OF PERFORMANCE QUOTATIONS
                          TCW/DW INCOME and GROWTH FUND




(A) AVERAGE ANNUAL TOTAL RETURNS (NO LOAD FUND)


(B) TOTAL RETURN (NO LOAD FUND)

                                  _                              _
                                 |        ______________________  |
FORMULA:                         |       |                        |
                                 |  /\ n |          EV            |
                       t  =      |    \  |     -------------      |  - 1
                                 |     \ |           P            |
                                 |      \|                        |
                                 |_                              _|

                                     EV
                      TR  =      ----------   - 1
                                      P


                t = AVERAGE ANNUAL COMPOUND RETURN
                n = NUMBER OF YEARS
               EV = ENDING VALUE
                P = INITIAL INVESTMENT
               TR = TOTAL RETURN


<TABLE>
<CAPTION>

                                               (B)                                                (A)
  $1,000            EV AS OF                TOTAL                 NUMBER OF                   AVERAGE ANNUAL
INVESTED - P           31-Jan-96            RETURN - TR           YEARS - n                   COMPOUND RETURN - t
- ----------------    -------------           -----------           -----------------    ------ ------------------------
<S>                 <C>                     <C>                   <C>                         <C>
  31-Jan-95            $1,205.20                 20.52%                     1.0000                      20.52%

  31-Mar-93            $1,309.20                 30.92%                     2.8364                       9.97%
</TABLE>


(C)           GROWTH OF $10,000
(D)           GROWTH OF $50,000
(E)           GROWTH OF $100,000


FORMULA:      G= (TR+1)*P
              G= GROWTH OF INITIAL INVESTMENT
              P= INITIAL INVESTMENT
              TR= TOTAL RETURN SINCE INCEPTION


<TABLE>
<CAPTION>

$10,000             TOTAL                    (C)   GROWTH OF       (D)   GROWTH OF             (E)   GROWTH OF
INVESTED - P        RETURN - TR             $10,000 INVESTMENT- G $50,000 INVESTMENT- G       $100,000 INVESTMENT- G
- -----------         -----------             --------------------------------------      ---------------------- -----------
<S>                 <C>                     <C>                   <C>                   <C>
  31-Mar-93              30.92                  $13,092                         $65,460                   $130,920
</TABLE>




<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<LEGEND>
TCW/DW Income & Growth Fund
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JAN-31-1996
<PERIOD-END>                               JAN-31-1996
<INVESTMENTS-AT-COST>                       54,772,696
<INVESTMENTS-AT-VALUE>                      57,824,354
<RECEIVABLES>                                1,527,362
<ASSETS-OTHER>                                 569,999
<OTHER-ITEMS-ASSETS>                           114,151
<TOTAL-ASSETS>                              60,035,866
<PAYABLE-FOR-SECURITIES>                     2,191,827
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                      213,444
<TOTAL-LIABILITIES>                          2,405,271
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    54,351,181
<SHARES-COMMON-STOCK>                        5,177,668
<SHARES-COMMON-PRIOR>                        5,664,790
<ACCUMULATED-NII-CURRENT>                      450,139
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                      (222,383)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                     3,051,658
<NET-ASSETS>                                57,630,595
<DIVIDEND-INCOME>                              349,952
<INTEREST-INCOME>                            3,835,955
<OTHER-INCOME>                                       0
<EXPENSES-NET>                               1,212,504
<NET-INVESTMENT-INCOME>                      2,973,403
<REALIZED-GAINS-CURRENT>                     1,186,265
<APPREC-INCREASE-CURRENT>                    6,051,315
<NET-CHANGE-FROM-OPS>                       10,210,983
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                    3,087,769
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                      1,236,686
<NUMBER-OF-SHARES-REDEEMED>                  1,948,190
<SHARES-REINVESTED>                            224,382
<NET-CHANGE-IN-ASSETS>                       2,295,465
<ACCUMULATED-NII-PRIOR>                        564,232
<ACCUMULATED-GAINS-PRIOR>                  (1,408,648)
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                          412,192
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                              1,212,504
<AVERAGE-NET-ASSETS>                        54,958,915
<PER-SHARE-NAV-BEGIN>                             9.77
<PER-SHARE-NII>                                   0.59
<PER-SHARE-GAIN-APPREC>                           1.37
<PER-SHARE-DIVIDEND>                            (0.60)
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              11.13
<EXPENSE-RATIO>                                   2.21
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<PAGE>


                                POWER OF ATTORNEY


     KNOW ALL MEN BY THESE PRESENTS, that each of Robert A. Day, Richard M.
DeMartini, Charles A. Fiumefreddo and Thomas E. Larkin, Jr., whose signatures
appear below, constitutes and appoints Sheldon Curtis, Marilyn K. Cranney and 
Barry Fink, or any of them, his true and lawful attorneys-in-fact and 
agents, with full power of substitution among himself and each of the persons
appointed herein, for him and in his name, place and stead, in any and all 
capacities, to sign any amendments to any registration statement of any of the
TCW/DW Funds set forth on Schedule A attached hereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be 
done by virtue hereof.

Dated:  May 10, 1994

/s/ Robert A. Day
- ---------------------------
Robert A. Day

/s/ Richard M. DeMartini
- ---------------------------
Richard M. DeMartini

/s/ Charles A. Fiumefreddo
- ---------------------------
Charles A. Fiumefreddo

/s/ Thomas E. Larkin, Jr.
- ---------------------------
Thomas E. Larkin, Jr.


<PAGE>


                                       SCHEDULE A
                                      TCW/DW FUNDS
                                  at December 31, 1993



Open-End Funds

1.  TCW/DW Core Equity Trust
2.  TCW/DW North American Government Income Trust
3.  TCW/DW Latin American Growth Fund
4.  TCW/DW Income and Growth Fund
5.  TCW/DW Small Cap Growth Fund
6.  TCW/DW Balanced Fund
7.  TCW/DW North American Intermediate Income Trust


Closed-End Funds


8.   TCW/DW Term Trust 2000
9.   TCW/DW Term Trust 2002
10.  TCW/DW Term Trust 2003

<PAGE>


                                POWER OF ATTORNEY


     KNOW ALL MEN BY THESE PRESENTS, that each of John C. Argue, John R. Haire,
Manuel H. Johnson, Paul Kolton, Michael E. Nugent and David S. Tappan, Jr.,
whose signatures appear below, constitutes and appoints David M. Butowsky, 
Ronald Feiman and Stuart Strauss, or any of them, his true and lawful 
attorneys-in-fact and agents, with full power of substitution among himself 
and each of the persons appointed herein, for him and in his name, place and 
stead, in any and all capacities, to sign any amendments to any registration 
statement of any of the TCW/DW Funds set forth on Schedule A attached hereto,
and to file the same, with all exhibits thereto, and other documents in 
connection therewith, with the Securities and Exchange Commission, as fully to 
all intents and purposes as he might or could do in person, hereby ratifying 
and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.

Dated:  May 10, 1994


/s/ John C. Argue                                /s/ John R. Haire
- --------------------------                       -----------------------------
John C. Argue                                    John R. Haire

/s/ Manuel H. Johnson                            /s/ Paul Kolton
- --------------------------                       -----------------------------
Manuel H. Johnson                                Paul Kolton

/s/ Michael E. Nugent                            /s/ David S. Tappan, Jr.
- --------------------------                       -----------------------------
Michael E. Nugent                                David S. Tappan, Jr.

<PAGE>


                                       SCHEDULE A
                                      TCW/DW FUNDS
                                  at December 31, 1993



Open-End Funds

1.  TCW/DW Core Equity Trust
2.  TCW/DW North American Government Income Trust
3.  TCW/DW Latin American Growth Fund
4.  TCW/DW Income and Growth Fund
5.  TCW/DW Small Cap Growth Fund
6.  TCW/DW Balanced Fund
7.  TCW/DW North American Intermediate Income Trust


Closed-End Funds


8.   TCW/DW Term Trust 2000
9.   TCW/DW Term Trust 2002
10.  TCW/DW Term Trust 2003



<PAGE>

                                POWER OF ATTORNEY


     KNOW ALL MEN BY THESE PRESENTS, that John L. Schroeder whose signature 
appears below, constitutes and appoints David M. Butowsky, Ronald Feiman 
and Stuart Strauss, or any of them, his true and lawful attorneys-in-fact and 
agents, with full power of substitution among himself and each of the persons
appointed herein, for him and in his name, place and stead, in any and all 
capacities, to sign any amendments to any registration statement of any of the
TCW/DW Funds set forth on Schedule A attached hereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be 
done by virtue hereof.

Dated:  April 20, 1995


/s/ John L. Schroeder
- --------------------------
John L. Schroeder

<PAGE>


                                       SCHEDULE A
                                      TCW/DW FUNDS



Open-End Funds

1.  TCW/DW Core Equity Trust
2.  TCW/DW North American Government Income Trust
3.  TCW/DW Latin American Growth Fund
4.  TCW/DW Income and Growth Fund
5.  TCW/DW Small Cap Growth Fund
6.  TCW/DW Balanced Fund
7.  TCW/DW North American Intermediate Income Trust
8.  TCW/DW Total Return Trust
9.  TCW/DW Global Convertible Trust


Closed-End Funds


10.  TCW/DW Term Trust 2000
11.  TCW/DW Term Trust 2002
12.  TCW/DW Term Trust 2003
13.  TCW/DW Emerging Markets Opportunities Trust

<PAGE>


                                POWER OF ATTORNEY


     KNOW ALL MEN BY THESE PRESENTS, that Marc I. Stern whose signature 
appears below, constitutes and appoints Sheldon Curtis, Marilyn K. Cranney and
Barry Fink, or any of them, his true and lawful attorneys-in-fact and 
agents, with full power of substitution among himself and each of the persons
appointed herein, for him and in his name, place and stead, in any and all 
capacities, to sign any amendments to any registration statement of any of the
TCW/DW funds set forth on Schedule A attached hereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be 
done by virtue hereof.

Dated:  April 20, 1995


/s/ Marc I. Stern
- --------------------------
Marc I. Stern

<PAGE>


                                       SCHEDULE A
                                      TCW/DW FUNDS



Open-End Funds

1.  TCW/DW Core Equity Trust
2.  TCW/DW North American Government Income Trust
3.  TCW/DW Latin American Growth Fund
4.  TCW/DW Income and Growth Fund
5.  TCW/DW Small Cap Growth Fund
6.  TCW/DW Balanced Fund
7.  TCW/DW North American Intermediate Income Trust
8.  TCW/DW Total Return Trust
9.  TCW/DW Global Convertible Trust


Closed-End Funds


10.  TCW/DW Term Trust 2000
11.  TCW/DW Term Trust 2002
12.  TCW/DW Term Trust 2003
13.  TCW/DW Emerging Markets Opportunities Trust



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