<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 30, 1998
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 /X/
------------------------
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. / /
------------------------
DEAN WITTER GLOBAL DIVIDEND
GROWTH SECURITIES
(Exact Name of Registrant as Specified in Charter)
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
(Address of Principal Executive Offices)
212-392-2550
(Registrant's Telephone Number)
BARRY FINK, ESQ.
Two World Trade Center
New York, New York 10048
(Name and Address of Agent for Service)
------------------------
COPY TO:
STUART M. STRAUSS, ESQ.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
------------------------
It is proposed that this filing will become effective on the thirtieth day
after the date of filing, pursuant to Rule 488.
The Exhibit Index is located on page [ ]
NO FILING FEE IS DUE BECAUSE THE REGISTRANT HAS PREVIOUSLY REGISTERED AN
INDEFINITE NUMBER OF SHARES PURSUANT TO SECTION (A)(1) OF RULE 24F-2 (AS IN
EFFECT AT THE TIME OF SUCH REGISTRATION) UNDER THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED. THE REGISTRANT FILED THE RULE 24F-2 NOTICE, FOR ITS FISCAL
YEAR ENDED MARCH 31, 1997, WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL
29, 1997.
PURSUANT TO RULE 429, THIS REGISTRATION STATEMENT RELATES TO SHARES
PREVIOUSLY REGISTERED BY THE REGISTRANT ON FORM N-1A (REGISTRATION NOS.
33-59004; 811-7458).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
FORM N-14
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A) UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PART A OF FORM N-14 ITEM NO. PROXY STATEMENT AND PROSPECTUS HEADING
- ------------------------------------------------ -------------------------------------------------------------------------
<C> <S> <C>
1(a) ..................................... Cross Reference Sheet
(b) ..................................... Front Cover Page
(c) ..................................... *
2(a) ..................................... *
(b) ..................................... Table of Contents
3(a) ..................................... Fee Table
(b) ..................................... Synopsis
(c) ..................................... Principal Risk Factors
4(a) ..................................... The Reorganization
(b) ..................................... The Reorganization -- Capitalization Table (Unaudited)
5(a) ..................................... Registrant's Prospectus
(b) ..................................... *
(c) ..................................... *
(d) ..................................... *
(e) ..................................... Available Information
(f) ..................................... Available Information
6(a) ..................................... Prospectus of Dean Witter World Wide Investment Trust
(b) ..................................... Available Information
(c) ..................................... *
(d) ..................................... *
7(a) ..................................... Introduction -- Proxies
(b) ..................................... *
(c) ..................................... Introduction; The Reorganization -- Appraisal Rights
8(a) ..................................... The Reorganization
(b) ..................................... *
9 ..................................... *
<CAPTION>
PART B OF FORM N-14 ITEM NO. STATEMENT OF ADDITIONAL INFORMATION HEADING
- ------------------------------------------------ -------------------------------------------------------------------------
<C> <S> <C>
10(a) ..................................... Cover Page
(b) ..................................... *
11 ..................................... Table of Contents
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART B OF FORM N-14 ITEM NO. STATEMENT OF ADDITIONAL INFORMATION HEADING
- ------------------------------------------------ -------------------------------------------------------------------------
<C> <S> <C>
12(a) ..................................... Additional Information about Dean Witter Global Dividend Growth
Securities
(b) ..................................... *
(c) ..................................... *
13(a) ..................................... Additional Information about Dean Witter World Wide Investment Trust
(b) ..................................... *
(c) ..................................... *
14 ..................................... Registrant's Annual Report for the fiscal year ended March 31, 1997 and
Registrant's Semi-Annual Report for the six month period ended
September 30, 1997; Dean Witter World Wide Investment Trust's Annual
Report for the fiscal year ended March 31, 1997 and Semi-Annual Report
for the six month period ended September 30, 1997.
<CAPTION>
PART C OF FORM N-14 ITEM NO. OTHER INFORMATION HEADING
- ------------------------------------------------ -------------------------------------------------------------------------
<C> <S> <C>
15 ..................................... Indemnification
16 ..................................... Exhibits
17 ..................................... Undertakings
</TABLE>
- ------------------------
* Not Applicable or negative answer
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
TO THE SHAREHOLDERS OF DEAN WITTER WORLD WIDE INVESTMENT TRUST:
Notice is hereby given of a Special Meeting of the Shareholders of Dean
Witter World Wide Investment Trust ("Dean Witter World Wide") to be held in
Conference Room A, 44th Floor, Two World Trade Center, New York, New York 10048,
at 9:00 A.M., New York time, on May 21, 1998, and any adjournments thereof (the
"Meeting"), for the following purposes:
1. To consider and vote upon an Agreement and Plan of Reorganization, dated
January 29, 1998 (the "Reorganization Agreement"), between Dean Witter World
Wide and Dean Witter Global Dividend Growth Securities ("Dean Witter Global
Dividend"), pursuant to which substantially all of the assets of Dean Witter
World Wide would be combined with those of Dean Witter Global Dividend and
shareholders of Dean Witter World Wide would become shareholders of Dean
Witter Global Dividend receiving shares of Dean Witter Global Dividend with
a value equal to the value of their holdings in Dean Witter World Wide (the
"Reorganization"); and
2. To act upon such other matters as may properly come before the Meeting.
The Reorganization is more fully described in the accompanying Proxy
Statement and Prospectus and a copy of the Reorganization Agreement is attached
as Exhibit A thereto. Shareholders of record at the close of business on
February 27, 1998 are entitled to notice of, and to vote at, the Meeting. Please
read the Proxy Statement and Prospectus carefully before telling us, through
your proxy or in person, how you wish your shares to be voted. The Board of
Trustees of Dean Witter World Wide recommends you vote in favor of the
Reorganization. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Barry Fink,
SECRETARY
March , 1998
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE NECESSARY QUORUM BE REPRESENTED AT THE MEETING. THE ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
(212) 392-2550
ACQUISITION OF THE ASSETS OF
DEAN WITTER WORLD WIDE INVESTMENT TRUST
BY AND IN EXCHANGE FOR SHARES OF
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
This Proxy Statement and Prospectus is being furnished to shareholders of
Dean Witter World Wide Investment Trust ("Dean Witter World Wide") in connection
with an Agreement and Plan of Reorganization, dated January 29, 1998 (the
"Reorganization Agreement"), pursuant to which substantially all the assets of
Dean Witter World Wide will be combined with those of Dean Witter Global
Dividend Growth Securities ("Dean Witter Global Dividend") in exchange for
shares of Dean Witter Global Dividend. As a result of this transaction,
shareholders of Dean Witter World Wide will become shareholders of Dean Witter
Global Dividend and will receive shares of Dean Witter Global Dividend with a
value equal to the value of their holdings in Dean Witter World Wide. The terms
and conditions of this transaction are more fully described in this Proxy
Statement and Prospectus and in the Reorganization Agreement between Dean Witter
World Wide and Dean Witter Global Dividend, attached hereto as Exhibit A. The
address of Dean Witter World Wide is that of Dean Witter Global Dividend set
forth above. This Proxy Statement also constitutes a Prospectus of Dean Witter
Global Dividend, which is dated February , 1998, filed by Dean Witter Global
Dividend with the Securities and Exchange Commission (the "Commission") as part
of its Registration Statement on Form N-14 (the "Registration Statement").
Dean Witter Global Dividend is an open-end diversified management investment
company whose investment objective is to provide reasonable current income and
long-term growth of income and capital. The fund seeks to achieve its objective
by investing, under normal market conditions, at least 65% of its total assets
in dividend-paying equity securities issued by issuers located in various
countries throughout the world.
This Proxy Statement and Prospectus sets forth concisely information about
Dean Witter Global Dividend that shareholders of Dean Witter World Wide should
know before voting on the Reorganization Agreement. A copy of the Prospectus for
Dean Witter Global Dividend dated July 28, 1997, is attached as Exhibit B and
incorporated herein by reference. Also enclosed and incorporated herein by
reference is Dean Witter Global Dividend's Annual Report for the fiscal year
ended March 31, 1997 and the succeeding unaudited Semi-Annual Report for the six
months ended September 30, 1997. A Statement of Additional Information relating
to the Reorganization, described in this Proxy Statement and Prospectus (the
"Additional Statement"), dated February , 1998, has been filed with the
Commission and is also incorporated herein by reference. Also incorporated
herein by reference are Dean Witter World Wide's Prospectus, dated July 28,
1997, and Annual Report for its fiscal year ended March 31, 1997 and the
succeeding unaudited Semi-Annual Report for the six months ended September 30,
1997. Such documents are available without charge by calling (212) 392-2550 or
(800) 526-3143 (TOLL FREE).
INVESTORS ARE ADVISED TO READ AND RETAIN THIS PROXY STATEMENT AND PROSPECTUS FOR
FUTURE REFERENCE.
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 ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROXY STATEMENT AND PROSPECTUS IS DATED FEBRUARY , 1998.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
INTRODUCTION..................................................................................................... 1
General........................................................................................................ 1
Record Date; Share Information................................................................................. 2
Proxies........................................................................................................ 2
Expenses of Solicitation....................................................................................... 2
Vote Required.................................................................................................. 3
SYNOPSIS......................................................................................................... 3
The Reorganization............................................................................................. 3
Fee Table...................................................................................................... 4
Tax Consequences of the Reorganization......................................................................... 8
Comparison of Dean Witter World Wide and Dean Witter Global Dividend........................................... 8
PRINCIPAL RISK FACTORS........................................................................................... 11
THE REORGANIZATION............................................................................................... 12
The Proposal................................................................................................... 12
The Board's Consideration...................................................................................... 12
The Reorganization Agreement................................................................................... 14
Tax Aspects of the Reorganization.............................................................................. 15
Description of Shares.......................................................................................... 17
Capitalization Table (unaudited)............................................................................... 17
Appraisal Rights............................................................................................... 17
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS................................................... 18
Investment Objectives and Policies............................................................................. 18
Investment Restrictions........................................................................................ 19
ADDITIONAL INFORMATION ABOUT DEAN WITTER WORLD WIDE
AND DEAN WITTER GLOBAL DIVIDEND................................................................................ 20
General........................................................................................................ 20
Financial Information.......................................................................................... 20
Management..................................................................................................... 20
Description of Securities and Shareholder Inquiries............................................................ 20
Dividends, Distributions and Taxes............................................................................. 20
Purchases, Repurchases and Redemptions......................................................................... 20
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE...................................................................... 21
FINANCIAL STATEMENTS AND EXPERTS................................................................................. 21
LEGAL MATTERS.................................................................................................... 21
AVAILABLE INFORMATION............................................................................................ 21
OTHER BUSINESS................................................................................................... 22
Exhibit A - Agreement and Plan of Reorganization, dated January 29, 1998, by and between
Dean Witter World Wide and Dean Witter Global Dividend......................................................... A-1
</TABLE>
i
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
------------------------
PROXY STATEMENT AND PROSPECTUS
------------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
INTRODUCTION
GENERAL
This Proxy Statement and Prospectus is being furnished to the shareholders
of Dean Witter World Wide Investment Trust ("Dean Witter World Wide"), an
open-end diversified management investment company, in connection with the
solicitation by the Board of Trustees of Dean Witter World Wide (the "Board") of
proxies to be used at the Special Meeting of Shareholders of Dean Witter World
Wide to be held in Conference Room A, 44th Floor, Two World Trade Center, New
York, New York 10048 at 9:00 A.M., New York time, on May 21, 1998, and any
adjournments thereof (the "Meeting"). It is expected that the mailing of this
Proxy Statement and Prospectus will be made on or about March , 1998.
At the Meeting, Dean Witter World Wide shareholders ("Shareholders") will
consider and vote upon an Agreement and Plan of Reorganization, dated January
29, 1998 (the "Reorganization Agreement"), between Dean Witter World Wide and
Dean Witter Global Dividend Growth Securities ("Dean Witter Global Dividend")
pursuant to which substantially all of the assets of Dean Witter World Wide will
be combined with those of Dean Witter Global Dividend in exchange for shares of
Dean Witter Global Dividend. As a result of this transaction, Shareholders will
become shareholders of Dean Witter Global Dividend and will receive shares of
Dean Witter Global Dividend equal to the value of their holdings in Dean Witter
World Wide on the date of such transaction (the "Reorganization"). Pursuant to
the Reorganization, each Shareholder will receive the class of shares of Dean
Witter Global Dividend that corresponds to the class of shares of Dean Witter
World Wide currently held by that Shareholder. Accordingly, as a result of the
Reorganization, each Class A, Class B, Class C and Class D Shareholder of Dean
Witter World Wide will receive Class A, Class B, Class C and Class D shares of
Dean Witter Global Dividend, respectively. The shares to be issued by Dean
Witter Global Dividend pursuant to the Reorganization (the "Dean Witter Global
Dividend Shares") will be issued at net asset value without an initial sales
charge. Further information relating to Dean Witter Global Dividend is set forth
herein and in Dean Witter Global Dividend's current Prospectus, dated July 28,
1997 ("Dean Witter Global Dividend's Prospectus"), attached to this Proxy
Statement and Prospectus and incorporated herein by reference.
The information concerning Dean Witter World Wide contained herein has been
supplied by Dean Witter World Wide and the information concerning Dean Witter
Global Dividend contained herein has been supplied by Dean Witter Global
Dividend.
1
<PAGE>
RECORD DATE; SHARE INFORMATION
The Board has fixed the close of business on February 27, 1998 as the record
date (the "Record Date") for the determination of the Shareholders entitled to
notice of, and to vote at, the Meeting. As of the Record Date, there were
shares of Dean Witter World Wide issued and outstanding. Shareholders on
the Record Date are entitled to one vote per share on each matter submitted to a
vote at the Meeting. A majority of the outstanding shares entitled to vote,
represented in person or by proxy, will constitute a quorum at the Meeting.
[To the knowledge of the Board, as of the Record Date, no person owned of
record or beneficially 5% or more of the outstanding shares of Dean Witter World
Wide.] [As of the Record Date, the trustees and officers of Dean Witter World
Wide, as a group, owned less than 1% of the outstanding shares of Dean Witter
World Wide.]
[To the knowledge of Dean Witter Global Dividend's Board of Trustees, as of
the Record Date, no person owned of record or beneficially 5% or more of the
outstanding shares of Dean Witter Global Dividend. As of the Record Date, the
trustees and officers of Dean Witter Global Dividend, as a group, owned less
than 1% of the outstanding shares of Dean Witter Global Dividend.]
PROXIES
The enclosed form of proxy, if properly executed and returned, will be voted
in accordance with the choice specified thereon. The proxy will be voted in
favor of the Reorganization Agreement unless a choice is indicated to vote
against or to abstain from voting on the Reorganization Agreement. The Board
knows of no business, other than that set forth in the Notice of Special Meeting
of Shareholders, to be presented for consideration at the Meeting. However, the
proxy confers discretionary authority upon the persons named therein to vote as
they determine on other business, not currently contemplated, which may come
before the Meeting. Abstentions and, if applicable, broker "non-votes" will not
count as votes in favor of the Reorganization Agreement, and broker "non-votes"
will not be deemed to be present at the meeting for purposes of determining
whether the Reorganization Agreement has been approved. Broker "non-votes" are
shares held in street name for which the broker indicates that instructions have
not been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority. If a
Shareholder executes and returns a proxy but fails to indicate how the votes
should be cast, the proxy will be voted in favor of the Reorganization
Agreement. The proxy may be revoked at any time prior to the voting thereof by:
(i) delivering written notice of revocation to the Secretary of Dean Witter
World Wide at Two World Trade Center, New York, New York 10048; (ii) attending
the Meeting and voting in person; or (iii) signing and returning a new proxy (if
returned and received in time to be voted). Attendance at the Meeting will not
in and of itself revoke a proxy.
In the event that the necessary quorum to transact business or the vote
required to approve or reject the Reorganization Agreement is not obtained at
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of the holders of a majority of shares of Dean
Witter World Wide present in person or by proxy at the Meeting. The persons
named as proxies will vote in favor of such adjournment those proxies which they
are entitled to vote in favor of the Reorganization Agreement and will vote
against any such adjournment those proxies required to be voted against the
Reorganization Agreement.
EXPENSES OF SOLICITATION
All expenses of the Reorganization, including the cost of preparing and
mailing this Proxy Statement and Prospectus, will be borne by Dean Witter
InterCapital Inc. ("InterCapital" or the "Investment Manager"), which expenses
are expected to approximate $230,000. In addition to the solicitation of proxies
by mail, proxies may be
2
<PAGE>
solicited by officers of Dean Witter World Wide, and officers and regular
employees of InterCapital and Dean Witter Trust FSB ("DWT"), personally or by
mail, telephone, telegraph or otherwise, without compensation therefor.
Brokerage houses, banks and other fiduciaries may be requested to forward
soliciting material to the beneficial owners of shares and to obtain
authorization for the execution of proxies.
DWT, an affiliate of InterCapital, may call Shareholders to ask if they
would be willing to have their votes recorded by telephone. The telephone voting
procedure is designed to authenticate Shareholders' identities, to allow
Shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been recorded properly.
No recommendation will be made as to how a Shareholder should vote on the
Reorganization Agreement other than to refer to the recommendation of the Board.
Dean Witter World Wide has been advised by counsel that these procedures are
consistent with the requirements of applicable law. Shareholders voting by
telephone will be asked for their social security number or other identifying
information and will be given an opportunity to authorize proxies to vote their
shares in accordance with their instructions. To ensure that the Shareholders'
instructions have been recorded correctly they will receive a confirmation of
their instructions in the mail. A special toll-free number will be available in
case the information contained in the confirmation is incorrect. Although a
Shareholder's vote may be taken by telephone, each Shareholder will receive a
copy of this Proxy Statement and Prospectus and may vote by mail using the
enclosed proxy card. With respect to the solicitation of a telephonic vote by
DWT, additional expenses would include $7.00 per telephone vote transacted,
$3.00 per outbound telephone contact and costs relating to obtaining
Shareholders' telephone numbers, all of which would be borne by InterCapital.
VOTE REQUIRED
Approval of the Reorganization Agreement by the Shareholders requires the
affirmative vote of a majority (I.E., more than 50%) of the shares of Dean
Witter World Wide represented in person or by proxy and entitled to vote at the
Meeting, provided a quorum is present at the Meeting. If the Reorganization
Agreement is not approved by Shareholders, Dean Witter World Wide will continue
in existence and the Board will consider alternative actions.
SYNOPSIS
THE FOLLOWING IS A SYNOPSIS OF CERTAIN INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT AND PROSPECTUS. THIS SYNOPSIS
IS ONLY A SUMMARY AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT AND
PROSPECTUS AND THE REORGANIZATION AGREEMENT. SHAREHOLDERS SHOULD CAREFULLY
REVIEW THIS PROXY STATEMENT AND PROSPECTUS AND THE REORGANIZATION AGREEMENT IN
THEIR ENTIRETY AND, IN PARTICULAR, DEAN WITTER GLOBAL DIVIDEND'S PROSPECTUS,
WHICH IS ATTACHED TO THIS PROXY STATEMENT AND INCORPORATED HEREIN BY REFERENCE.
THE REORGANIZATION
The Reorganization Agreement provides for the transfer of substantially all
the assets of Dean Witter World Wide, subject to stated liabilities, to Dean
Witter Global Dividend in exchange for the Dean Witter Global Dividend Shares.
The aggregate net asset value of the Dean Witter Global Dividend Shares issued
in the exchange will equal the aggregate value of the net assets of Dean Witter
World Wide received by Dean Witter Global Dividend. On or after the closing date
scheduled for the Reorganization (the "Closing Date"), Dean Witter World Wide
will distribute the Dean Witter Global Dividend Shares received by Dean Witter
World Wide to Shareholders as of the Valuation Date (as defined below under "The
Reorganization Agreement") in complete liquidation of Dean Witter World Wide and
Dean Witter World Wide will thereafter be dissolved and deregistered under the
Investment Company Act of 1940, as amended (the "1940 Act"). As a result of the
3
<PAGE>
Reorganization, each Shareholder will receive that number of full and fractional
Dean Witter Global Dividend Shares equal in value to such Shareholder's pro rata
interest in the net assets of Dean Witter World Wide transferred to Dean Witter
Global Dividend. Pursuant to the Reorganization, each Shareholder will receive
the class of shares of Dean Witter Global Dividend that corresponds to the class
of shares of Dean Witter World Wide currently held by that Shareholder.
Accordingly, as a result of the Reorganization, each Class A, Class B, Class C
and Class D Shareholder of Dean Witter World Wide will become holders of Class
A, Class B, Class C and Class D shares of Dean Witter Global Dividend,
respectively. Shareholders holding their shares of Dean Witter World Wide in
certificate form will be asked to surrender their certificates in connection
with the Reorganization. Shareholders who do not surrender their certificates
prior to the Closing Date will still receive their shares of Dean Witter Global
Dividend; however, such Shareholders will not be able to redeem, transfer or
exchange the Dean Witter Global Dividend Shares received until the old
certificates have been surrendered. The Board has determined that the interests
of Shareholders will not be diluted as a result of the Reorganization.
FOR THE REASONS SET FORTH BELOW UNDER "THE REORGANIZATION -- THE BOARD'S
CONSIDERATION," THE BOARD, INCLUDING THE TRUSTEES WHO ARE NOT "INTERESTED
PERSONS" OF DEAN WITTER WORLD WIDE ("INDEPENDENT TRUSTEES"), AS THAT TERM IS
DEFINED IN THE 1940 ACT, HAS CONCLUDED THAT THE REORGANIZATION IS IN THE BEST
INTERESTS OF DEAN WITTER WORLD WIDE AND ITS SHAREHOLDERS AND RECOMMENDS APPROVAL
OF THE REORGANIZATION AGREEMENT.
FEE TABLE
Dean Witter World Wide and Dean Witter Global Dividend each pay expenses for
management of their assets, distribution of their shares and other services, and
those expenses are reflected in the net asset value per share of each fund. On
July 28, 1997, each of Dean Witter World Wide and Dean Witter Global Dividend
began offering its shares in multiple classes, each with a different combination
of sales charges, ongoing fees and other features. The following table
illustrates expenses and fees that each class of shares of Dean Witter World
Wide incurred during the fund's fiscal year ended March 31, 1997 adjusted, with
respect to Class A, Class C and Class D shares of the fund, for the shareholder
transaction expenses and 12b-1 fees in effect for such classes as of July 28,
1997. With respect to Dean Witter Global Dividend, the table sets forth expenses
and fees based on the fund's March 31, 1997 fiscal year end, adjusted, with
respect to Class A, Class C and Class D shares of the fund, for the shareholder
transaction expenses and 12b-1 fees in effect for such classes as of July 28,
1997. The table also sets forth pro forma fees for the surviving combined fund
(Dean Witter Global Dividend) reflecting what the fee schedule would have been
on March 31, 1997, if the Reorganization had been consummated twelve (12) months
prior to that date.
4
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
MAXIMUM SALES CHARGE IMPOSED ON PURCHASES DEAN WITTER DEAN WITTER PRO FORMA
(AS A PERCENTAGE OF OFFERING PRICE) WORLD WIDE GLOBAL DIVIDEND COMBINED
----------- --------------- -----------
<S> <C> <C> <C>
Class A................................................................ 5.25%(1) 5.25%(1) 5.25%(1)
Class B................................................................ none none none
Class C................................................................ none none none
Class D................................................................ none none none
<CAPTION>
MAXIMUM SALES CHARGE IMPOSED ON REINVESTED DIVIDENDS
<S> <C> <C> <C>
Class A................................................................ none none none
Class B................................................................ none none none
Class C................................................................ none none none
Class D................................................................ none none none
<CAPTION>
MAXIMUM CONTINGENT DEFERRED SALES CHARGE (AS A PERCENTAGE
OF THE LESSER OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS)
<S> <C> <C> <C>
Class A................................................................ none(2) none(2) none(2)
Class B................................................................ 5.00%(3) 5.00%(3) 5.00%(3)
Class C................................................................ 1.00%(4) 1.00%(4) 1.00%(4)
Class D................................................................ none none none
<CAPTION>
REDEMPTION FEES
<S> <C> <C> <C>
Class A................................................................ none none none
Class B................................................................ none none none
Class C................................................................ none none none
Class D................................................................ none none none
<CAPTION>
EXCHANGE FEE
<S> <C> <C> <C>
Class A................................................................ none none none
Class B................................................................ none none none
Class C................................................................ none none none
Class D................................................................ none none none
</TABLE>
ANNUAL FUND OPERATING EXPENSES AS A PERCENTAGE OF AVERAGE NET ASSETS
<TABLE>
<CAPTION>
DEAN WITTER DEAN WITTER PRO FORMA
MANAGEMENT AND ADVISORY FEES WORLD WIDE GLOBAL DIVIDEND COMBINED
----------- --------------- -----------
<S> <C> <C> <C>
Class A................................................................ 1.00% 0.72% 0.71%(5)
Class B................................................................ 1.00% 0.72% 0.71%(5)
Class C................................................................ 1.00% 0.72% 0.71%(5)
Class D................................................................ 1.00% 0.72% 0.71%(5)
12B-1 FEES(6)(7)
Class A................................................................ 0.25% 0.25% 0.25%
Class B................................................................ 1.00%(8) 0.84%(8) 0.87%(8)
Class C................................................................ 1.00% 1.00% 1.00%
Class D................................................................ none none none
OTHER EXPENSES
Class A................................................................ 0.36% 0.19% 0.20%
Class B................................................................ 0.36% 0.19% 0.20%
Class C................................................................ 0.36% 0.19% 0.20%
Class D................................................................ 0.36% 0.19% 0.20%
TOTAL FUND OPERATING EXPENSES
Class A................................................................ 1.61% 1.16% 1.16%
Class B................................................................ 2.36% 1.75% 1.78%
Class C................................................................ 2.36% 1.91% 1.91%
Class D................................................................ 1.36% 0.91% 0.91%
(footnotes appear on following page)
</TABLE>
5
<PAGE>
- ------------------------
(1) Reduced for purchases of $25,000 and over (see "Purchase of Fund Shares --
Initial Sales Charge Alternative -- Class A Shares" in each fund's
Prospectus).
(2) Investments that are not subject to any sales charge at the time of
purchase are subject to a Contingent Deferred Sales Charge ("CDSC") of
1.00% that will be imposed on redemptions made within one year after
purchase, except for certain specific circumstances (see "Purchases,
Exchanges and Redemptions" below and "Purchase of Fund Shares -- Initial
Sales Charge Alternative -- Class A Shares" in each fund's Prospectus).
(3) The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter.
(4) Only applicable to redemptions made within one year after purchase (see
"Purchases, Exchanges and Redemptions" below and "Purchase of Fund Shares
-- Level Load Alternative -- Class C Shares" in each fund's Prospectus).
(5) This rate reflects the anticipated lower advisory fee of Dean Witter Global
Dividend obtained by reaching a breakpoint in the advisory fee upon the
combination of the two funds based upon Dean Witter World Wide's average
net assets for the year ended March 31, 1997 and Dean Witter Global
Dividend's average net assets for the year ended March 31, 1997, thus, a
scaling down of the advisory fee to the effective advisory fee rate shown.
(6) The 12b-1 fee is accrued daily and payable monthly. With respect to each
fund, the entire 12b-1 fee payable by Class A and a portion of the 12b-1
fee payable by each of Class B and Class C equal to 0.25% of the average
daily net assets of the class are currently characterized as a service fee
within the meaning of National Association of Securities Dealers, Inc.
("NASD") guidelines and are payments made for personal service and/or
maintenance of shareholder accounts. The remainder of the 12b-1 fee, if
any, is an asset-based sales charge, and is a distribution fee paid to Dean
Witter Distributors Inc. (the "Distributor") to compensate it for the
services provided and the expenses borne by the Distributor and others in
the distribution of each fund's shares (see "Description of Shares" below
and "Purchase of Fund Shares -- Plan of Distribution" in each fund's
Prospectus).
(7) Upon conversion of Class B shares to Class A shares, such shares will be
subject to the lower 12b-1 fee applicable to Class A shares. No sales
charge is imposed at the time of conversion of Class B shares to Class A
shares. Class C shares do not have a conversion feature and, therefore, are
subject to an ongoing 1.00% 12b-1 fee (see "Description of Shares" below
and "Purchase of Fund Shares -- Alternative Purchase Arrangements" in each
fund's Prospectus).
(8) Although the formula for calculating the 12b-1 fees for the Class B shares
is the same for both Funds, the application of the formula (1.0% of the
lesser of average daily net sales or average daily net assets) results in
lower annual fees on the existing assets of the Class B shares of Dean
Witter Global Dividend. Upon the consummation of the Reorganization, the
assets of Dean Witter World Wide are treated under the formula as new sales
and a 1.0% rate is applied thereto. When combined with the existing assets
of Dean Witter Global Dividend, the effect initially is a slight increase
in the annual 12b-1 fees on the Class B shares of the combined fund.
6
<PAGE>
HYPOTHETICAL EXPENSES
To attempt to show the effect of these expenses on an investment over time,
the hypotheticals shown below have been created. Assuming that an investor makes
a $1,000 investment in either Dean Witter World Wide or Dean Witter Global
Dividend or the new combined fund (Dean Witter Global Dividend), that the annual
return is 5% and that the operating expenses for each fund are the ones shown in
the chart above, if the investment was redeemed at the end of each period shown
below, the investor would incur the following expenses by the end of each period
shown:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
----------- ----------- -----------
<S> <C> <C> <C>
Dean Witter World Wide
Class A.......................................................................... $ 68 $ 101 $ 136
Class B.......................................................................... $ 74 $ 104 $ 146
Class C.......................................................................... $ 34 $ 74 $ 126
Class D.......................................................................... $ 14 $ 43 $ 74
Dean Witter Global Dividend
Class A.......................................................................... $ 64 $ 87 $ 113
Class B.......................................................................... $ 68 $ 85 $ 115
Class C.......................................................................... $ 29 $ 60 $ 103
Class D.......................................................................... $ 9 $ 29 $ 50
Pro Forma Combined
Class A.......................................................................... $ 64 $ 87 $ 113
Class B.......................................................................... $ 68 $ 86 $ 116
Class C.......................................................................... $ 29 $ 60 $ 103
Class D.......................................................................... $ 9 $ 29 $ 51
<CAPTION>
10 YEARS
-----------
<S> <C>
Dean Witter World Wide
Class A.......................................................................... $ 234
Class B.......................................................................... $ 270
Class C.......................................................................... $ 270
Class D.......................................................................... $ 163
Dean Witter Global Dividend
Class A.......................................................................... $ 186
Class B.......................................................................... $ 206
Class C.......................................................................... $ 223
Class D.......................................................................... $ 112
Pro Forma Combined
Class A.......................................................................... $ 186
Class B.......................................................................... $ 209
Class C.......................................................................... $ 223
Class D.......................................................................... $ 113
</TABLE>
If such investment was not redeemed, the investor would incur the following
expenses:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
----------- ----------- -----------
<S> <C> <C> <C>
Dean Witter World Wide
Class A.......................................................................... $ 68 $ 101 $ 136
Class B.......................................................................... $ 24 $ 74 $ 126
Class C.......................................................................... $ 24 $ 74 $ 126
Class D.......................................................................... $ 14 $ 43 $ 74
Dean Witter Global Dividend
Class A.......................................................................... $ 64 $ 87 $ 113
Class B.......................................................................... $ 18 $ 55 $ 95
Class C.......................................................................... $ 19 $ 60 $ 103
Class D.......................................................................... $ 9 $ 29 $ 50
Pro Forma Combined
Class A.......................................................................... $ 64 $ 87 $ 113
Class B.......................................................................... $ 18 $ 56 $ 96
Class C.......................................................................... $ 19 $ 60 $ 103
Class D.......................................................................... $ 9 $ 29 $ 51
<CAPTION>
10 YEARS
-----------
<S> <C>
Dean Witter World Wide
Class A.......................................................................... $ 234
Class B.......................................................................... $ 270
Class C.......................................................................... $ 270
Class D.......................................................................... $ 163
Dean Witter Global Dividend
Class A.......................................................................... $ 186
Class B.......................................................................... $ 206
Class C.......................................................................... $ 223
Class D.......................................................................... $ 112
Pro Forma Combined
Class A.......................................................................... $ 186
Class B.......................................................................... $ 209
Class C.......................................................................... $ 223
Class D.......................................................................... $ 113
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL OPERATING EXPENSES MAY BE GREATER OR LESS
THAN THOSE SHOWN. LONG-TERM SHAREHOLDERS OF CLASS A, CLASS B AND CLASS C SHARES
OF DEAN WITTER WORLD WIDE AND DEAN WITTER GLOBAL DIVIDEND MAY PAY MORE IN SALES
CHARGES INCLUDING DISTRIBUTION FEES THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM
FRONT-END SALES CHARGES PERMITTED BY THE NASD.
7
<PAGE>
TAX CONSEQUENCES OF THE REORGANIZATION
As a condition to the Reorganization, Dean Witter World Wide will receive an
opinion of Gordon Altman Butowsky Weitzen Shalov & Wein to the effect that the
Reorganization will constitute a tax-free reorganization for Federal income tax
purposes, and that no gain or loss will be recognized by Dean Witter World Wide
or the shareholders of Dean Witter World Wide for Federal income tax purposes as
a result of the transactions included in the Reorganization. For further
information about the tax consequences of the Reorganization, see "The
Reorganization -- Tax Aspects of the Reorganization" below.
COMPARISON OF DEAN WITTER WORLD WIDE AND DEAN WITTER GLOBAL DIVIDEND
INVESTMENT OBJECTIVES AND POLICIES. Dean Witter World Wide and Dean Witter
Global Dividend each are funds which seek investment opportunities throughout
the world. The investment objective of Dean Witter World Wide is to seek to
obtain total return on its assets primarily through long-term capital growth and
to a lesser extent income. The investment objective of Dean Witter Global
Dividend is to provide reasonable current income and long-term growth of income
and capital. Both funds seek to achieve their objective by investing in a
diversified portfolio of securities of companies located throughout the world.
Dean Witter World Wide may invest in all types of common stocks, preferred
stocks, convertible securities and other fixed income securities of domestic and
foreign companies, international organizations and governments. Dean Witter
World Wide may vary the allocation between common stocks and fixed income
securities and there is no limitation on the percentage or amount of the fund's
assets which may be invested for growth or income. Dean Witter Global Dividend
has a stated policy of investing, under normal market conditions, at least 65%
of its total assets in dividend-paying equity securities issued by issuers
located in various countries throughout the world; the fund's investment
portfolio is invested in at least three separate countries. Up to 35% of Dean
Witter Global Dividend's assets may be invested in convertible debt securities,
convertible preferred securities and fixed income securities issued by U.S. and
foreign companies and governments. The processes by which each fund selects
common stocks differ and are fully described under "Comparison of Investment
Objectives, Policies and Restrictions" below.
The investment policies of both funds are similar; the principal differences
between them are more fully described under "Comparison of Investment
Objectives, Policies and Restrictions" below.
The investment policies of both Dean Witter World Wide and Dean Witter
Global Dividend are not fundamental and may be changed by their respective
Boards of Trustees.
INVESTMENT MANAGEMENT AND DISTRIBUTION PLAN FEES. Dean Witter World Wide
obtains management services from InterCapital, and sub-advisory investment
services from Morgan Grenfell Investment Services Limited. ("Morgan Grenfell")
pursuant to a sub-advisory agreement (the "Sub-Advisory Agreement"). As
compensation for such services, Dean Witter World Wide pays InterCapital monthly
compensation calculated daily by applying the annual rate of 1.0% to the first
$500 million of the fund's average net assets and 0.95% to the fund's average
net assets exceeding $500 million. As compensation for the services provided
pursuant to the Sub-Advisory Agreement between InterCapital and Morgan Grenfell,
InterCapital pays Morgan Grenfell monthly compensation equal to 40% of the
monthly compensation which InterCapital receives from the fund. Dean Witter
Global Dividend also obtains investment management services from InterCapital.
As compensation for such services, Dean Witter Global Dividend pays InterCapital
monthly compensation calculated daily by applying the annual rate of 0.75% to
the fund's average daily net assets not exceeding $1 billion; 0.725% to the
portion of such daily net assets exceeding $1 billion, but not exceeding $1.5
billion; 0.70% to the portion of such daily net assets exceeding $1.5 billion,
but not exceeding $2.5 billion; 0.675% to the portion of such daily net assets
exceeding
8
<PAGE>
$2.5 billion, but not exceeding $3.5 billion; and 0.65% to the portion of such
daily net assets exceeding $3.5 billion. Each class of both funds' shares is
subject to the same management fee rates applicable to the respective fund.
Both Dean Witter World Wide and Dean Witter Global Dividend have adopted
identical distribution plans ("Plans") pursuant to Rule 12b-1 under the 1940
Act. In the case of Class A and Class C shares, each fund's Plan provides that
the fund will reimburse the Distributor and others for the expenses of certain
activities and services incurred by them in connection with the distribution of
the Class A and Class C Shares of each fund. Reimbursement for these expenses is
made in monthly payments by each fund to the Distributor which will in no event
exceed amounts equal to payments at the annual rates of 0.25% and 1.0% of the
average daily net assets of Class A and Class C shares, respectively. In the
case of Class B shares, each fund's Plan provides that the fund will pay the
Distributor a fee, which is accrued daily and paid monthly, at the annual rate
of 1.0% of the lesser of (a) the average daily net sales of each respective
fund's Class B shares or (b) the average daily net assets of Class B of each
respective fund. The fee is paid for the services provided and the expenses
borne by the Distributor and others in connection with the distribution of each
fund's Class B shares. There are no 12b-1 fees applicable to both funds' Class D
shares. For further information relating to the 12b-1 fees applicable to each
class of Dean Witter Global Dividend's shares, see the section entitled
"Purchase of Fund Shares" in Dean Witter Global Dividend's Prospectus, attached
hereto. The Distributor also receives the proceeds of any contingent deferred
sales charge ("CDSC") paid by the funds' shareholders at the time of redemption.
The CDSC schedules applicable to each of Dean Witter World Wide and Dean Witter
Global Dividend are set forth below under "Purchases, Exchanges and
Redemptions."
OTHER SIGNIFICANT FEES. Both Dean Witter World Wide and Dean Witter Global
Dividend pay additional fees in connection with their operations, including
legal, auditing, transfer agent, trustees fees and custodial fees. See "Synopsis
- -- Fee Table" above for the percentage of average net assets represented by such
"Other Expenses."
PURCHASES, EXCHANGES AND REDEMPTIONS. Class A shares of each fund are sold
at net asset value plus an initial sales charge of up to 5.25%. The initial
sales charge is reduced for certain purchases. Investments of $1 million or more
(and investment by certain other limited categories of investors) are not
subject to any sales charges at the time of purchase, but are subject to a CDSC
of 1.0% on redemptions made within one year after purchase (except for certain
specific circumstances fully described in each fund's Prospectus).
Class B shares of each fund are offered at net asset value with no initial
sales charge, but are subject to the same CDSC schedule set forth below (Class B
shares of each fund purchased by certain qualified employer sponsored benefit
plans are subject to a reduced CDSC schedule):
<TABLE>
<CAPTION>
CLASS B SHARES OF DEAN WITTER WORLD WIDE
AND
YEAR SINCE PURCHASE PAYMENT MADE DEAN WITTER GLOBAL DIVIDEND
- ------------------------------------------------------- -------------------------------------------
<S> <C>
First.................................................. 5.0%
Second................................................. 4.0%
Third.................................................. 3.0%
Fourth................................................. 2.0%
Fifth.................................................. 2.0%
Sixth.................................................. 1.0%
Seventh and thereafter................................. none
</TABLE>
9
<PAGE>
Class C shares of each fund are sold at net asset value with no initial
sales charge, but are subject to a CDSC of 1.0% on redemptions made within one
year after purchase. The CDSC may be waived for certain redemptions (which are
fully described in each fund's Prospectus).
Class D shares of each fund are available only to limited categories of
investors and are sold at net asset value with no initial sales charge or CDSC.
The CDSC charge is paid to the Distributor. Shares of Dean Witter Global
Dividend and Dean Witter World Wide are distributed by the Distributor and
offered by Dean Witter Reynolds Inc. and other dealers who have entered into
selected dealer agreements with the Distributor. For further information
relating to the CDSC schedules applicable to each of the classes of Dean Witter
Global Dividend's shares, see the section entitled "Purchase of Fund Shares" in
Dean Witter Global Dividend's Prospectus.
Shares of each class of Dean Witter World Wide and Dean Witter Global
Dividend may be exchanged for shares of the same class of any other Dean Witter
Fund that offers its shares in more than one class, without the imposition of an
exchange fee. Additionally, shares of each class of Dean Witter World Wide and
Dean Witter Global Dividend may be exchanged for shares of Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean
Witter Short-Term Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust
and the five Dean Witter Funds that are money market funds (the foregoing nine
funds are collectively referred to as the "Exchange Funds"), without the
imposition of an exchange fee. Class A shares of Dean Witter World Wide and Dean
Witter Global Dividend may also be exchanged for shares of Dean Witter
Multi-State Municipal Series Trust and Dean Witter Hawaii Municipal Trust, and
Class B shares of Dean Witter World Wide and Dean Witter Global Dividend may
also be exchanged for shares of Dean Witter Global Short-Term Income Fund Inc.,
all without the imposition of an exchange fee. Upon consummation of the
Reorganization, the foregoing exchange privileges will still be applicable to
shareholders of the combined fund (Dean Witter Global Dividend).
With respect to both funds, no CDSC is imposed at the time of any exchange,
although any applicable CDSC will be imposed upon ultimate redemption. During
the period of time a Dean Witter Global Dividend or Dean Witter World Wide
shareholder remains in an Exchange Fund, the holding period (for purposes of
determining the CDSC rate) is frozen. Both Dean Witter World Wide and Dean
Witter Global Dividend provide telephone exchange privileges to their
shareholders. For greater details relating to exchange privileges applicable to
Dean Witter Global Dividend, see the section entitled "Shareholder Services" in
Dean Witter Global Dividend's Prospectus.
Shareholders of Dean Witter World Wide and Dean Witter Global Dividend may
redeem their shares for cash at any time at the net asset value per share next
determined; however, such redemption proceeds may be reduced by the amount of
any applicable CDSC. Both Dean Witter World Wide and Dean Witter Global Dividend
offer a reinstatement privilege whereby a shareholder who has not previously
exercised such privilege whose shares have been redeemed or repurchased may,
within thirty-five days after the date of redemption or repurchase, reinstate
any portion or all of the proceeds thereof in shares of the same class from
which such shares were redeemed or repurchased and receive a pro rata credit for
any CDSC paid in connection with such redemption or repurchase. Dean Witter
World Wide and Dean Witter Global Dividend may redeem involuntarily, at net
asset value, most accounts valued at less than $100.
DIVIDENDS. Each fund declares dividends separately for each of its classes.
Dean Witter World Wide pays dividends at least once per year from the net
investment income of the fund and Dean Witter Global Dividend pays quarterly
dividends from the net investment income of the fund. Both funds distribute net
short-term and
10
<PAGE>
long-term capital gains, if any, at least annually. Each fund, however, may
determine either to distribute or to retain all or part of any net long-term
capital gains in any year for reinvestment. With respect to each fund, dividends
and capital gains distributions are automatically reinvested in additional
shares of the same class of shares of the fund at net asset value unless the
shareholder elects to receive cash.
PRINCIPAL RISK FACTORS
The net asset value of Dean Witter Global Dividend and Dean Witter World
Wide will fluctuate with changes in the market value of their respective
portfolio securities. The market value of the funds' portfolio securities will
increase or decrease due to a variety of economic, market and political factors,
including movements in interest rates, which cannot be predicted. Dean Witter
Global Dividend may invest up to 35% of its total assets in investment grade
securities rated Baa or higher by Moody's Investors Service, Inc. ("Moody's") or
BBB or higher by Standard & Poor's Corporation ("S&P"), or, if not rated, are
determined to be of comparable quality by the Investment Manager. With respect
to this 35% portion of its total assets, Dean Witter Global Dividend may invest
in convertible securities that are rated below investment grade (I.E. Ba or
lower by Moody's or BB or lower by S&P) although the fund will not invest in
convertible securities rated lower than B by either Moody's or S&P or, if not
rated are determined to be of comparable quality by the Investment Manager.
Fixed-income securities rated Baa by Moody's or BBB by S&P, while considered
investment grade, have speculative characteristics greater than those of more
highly rated bonds and fixed-income securities rated Ba or BB or lower by
Moody's and S&P, respectively, are considered to be speculative investments and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than in the case of
securities with higher ratings. Dean Witter World Wide does not have any
limitations with respect to the ratings of its fixed-income securities and, as
such, all or a portion of the fund's total assets (depending upon the allocation
of the portfolio between equity and fixed-income securities) may be invested in
lower rated securities.
Both funds may invest all or a portion of their assets in foreign securities
and, as such, are subject to additional risks such as adverse 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. Additionally, 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 and brokerage commissions, dealer concessions and other
transaction costs may be higher on foreign markets than in the U.S.
Both funds may enter into foreign currency exchange contracts as a hedge
against fluctuations in future foreign exchange rates, may enter into repurchase
agreements, may purchase securities on a when-issued and delayed delivery basis,
or on a when, as and if issued basis, and may enter into options and futures
transactions for hedging purposes, all of which involve certain special risks.
The foregoing discussion is a summary of the principal risk factors. For a
more complete discussion of the risks of each fund, see "Investment Objectives
and Policies -- Risk Considerations and Investment Practices" in the Prospectus
of Dean Witter World Wide and in Dean Witter Global Dividend's Prospectus
attached hereto and incorporated herein by reference.
11
<PAGE>
THE REORGANIZATION
THE PROPOSAL
The Board of Trustees of Dean Witter World Wide, including the Independent
Trustees, having reviewed the financial position of Dean Witter World Wide and
the prospects for achieving economies of scale through the Reorganization and
having determined that the Reorganization is in the best interests of Dean
Witter World Wide and its Shareholders and that the interests of Shareholders
will not be diluted as a result thereof, recommends approval of the
Reorganization by Shareholders of Dean Witter World Wide.
THE BOARD'S CONSIDERATION
At a meeting held on January 29, 1998, the Board, including all of the
Independent Trustees, unanimously approved the Reorganization Agreement and
determined to recommend that Shareholders approve the Reorganization Agreement.
In reaching this decision, the Board made an extensive inquiry into a number of
factors, particularly the comparative expenses currently incurred in the
operations of Dean Witter World Wide and Dean Witter Global Dividend. The Board
also considered other factors, including, but not limited to: the comparative
investment performance and past growth in assets of Dean Witter World Wide and
Dean Witter Global Dividend; the compatibility of the investment objectives,
policies, restrictions and portfolios of Dean Witter World Wide and Dean Witter
Global Dividend; the terms and conditions of the Reorganization which would
affect the price of shares to be issued in the Reorganization; the tax-free
nature of the Reorganization; and any direct or indirect costs to be incurred by
Dean Witter World Wide and Dean Witter Global Dividend in connection with the
Reorganization.
In recommending the Reorganization to Shareholders, the Board of Dean Witter
World Wide considered that the Reorganization would have the following benefits
to Shareholders:
1. Once the Reorganization is consummated, the expenses which would be
borne by shareholders of each class of the "combined fund" should be
lower on a percentage basis than the actual expenses per share of each
corresponding class of Dean Witter World Wide. In part, this is because the
current rate of the investment management fee payable by the surviving Dean
Witter Global Dividend fund (0.71% of average daily net assets) would be lower
than the rate of the investment management fee currently paid by Dean Witter
World Wide (1.0% of average daily net assets). Furthermore, to the extent that
the Reorganization would result in Shareholders becoming shareholders of a
combined larger fund, further economies of scale could be achieved since various
fixed expenses (E.G., auditing and legal) can be spread over a larger number of
shares. The Board noted that the expense ratio for each class of Dean Witter
World Wide was higher (for its fiscal year ended March 31, 1997) than the
expense ratio for each class of Dean Witter Global Dividend (for the fiscal year
ended March 31, 1997).
2. Shareholders would have a continued participation in a portfolio of
primarily equity securities of issuers worldwide through investment in
Dean Witter Global Dividend, which has similar investment objectives, investment
policies and restrictions to those of Dean Witter World Wide.
3. Shareholders of Class B shares of Dean Witter World Wide would have
lower annual asset-based distribution costs, currently 1.0% of net assets
compared to 0.87% on a combined basis. The Board recognized that this benefit
could change depending on how well the investments of the combined Fund
performs.
4. Neither Dean Witter World Wide nor Dean Witter Global Dividend will bear
any expenses of consummating the Reorganization. InterCapital has agreed
to bear all such expenses, including the costs of
12
<PAGE>
printing and distributing this proxy statement, other costs of holding a meeting
of shareholders, and fees and expenses of outside counsel and independent
auditors.
The Board of Dean Witter World Wide recognized that the Fund would incur
some transaction costs and realize capital losses on the sale of certain
portfolio securities in order to make the portfolio acceptable to Dean Witter
Global Dividend. However, InterCapital, the investment manager of both Funds,
informed the Boards that the unrealized capital losses on the securities in
question may have to be realized, in any event, with or without the
Reorganization, and that proceeds of the sale of such securities could be put to
use in investments that the Investment Manager considers to be more attractive.
With respect to transaction costs for the portfolio changes of Dean Witter World
Wide, the Board of Dean Witter World Wide believes such costs would be more than
offset by the economic benefits that would accrue to Shareholders, as noted
above.
5. The Board also considered that the assets of Dean Witter Global Dividend
grew from approximately $1.85 billion at its fiscal year end on March 31,
1995 to $3.5 billion on December 31, 1997. By comparison, the assets of Dean
Witter World Wide declined during that same period from approximately $512
million to $327 million.
6. The Reorganization will constitute a tax-free reorganization for Federal
income tax purposes, and no gain or loss will be recognized by Dean
Witter World Wide or its Shareholders for Federal income tax purposes as a
result of transactions included in the Reorganization.
7. The Board also took into consideration that absent the Reorganization,
Dean Witter Global Dividend will continue to compete for investor funds
directly with Dean Witter World Wide. The Reorganization should allow for more
concentrated selling efforts to the benefit of both Dean Witter World Wide and
Dean Witter Global Dividend shareholders and avoid the inefficiencies associated
with the operation and distribution of two similar funds through the same sales
organization.
The Board of Trustees of Dean Witter Global Dividend, including a majority
of the Independent Trustees of Dean Witter Global Dividend, also have determined
that the Reorganization is in the best interests of Dean Witter Global Dividend
and its shareholders and that the interests of existing shareholders of Dean
Witter Global Dividend will not be diluted as a result thereof. The transaction
will enable Dean Witter Global Dividend to acquire investment securities which
are consistent with Dean Witter Global Dividend's investment objective, without
the brokerage costs attendant to the purchase of such securities in the market
and without any cost to effect the Reorganization itself. Also, the addition of
assets to Dean Witter Global Dividend's portfolio may result in some of the
economies of scale described above, including a further reduction in the
investment management fee resulting from the addition of more assets at the
lowest breakpoint rate in the fee schedule. Furthermore, like the shareholders
of Dean Witter World Wide, the shareholders of Dean Witter Global Dividend may
also realize an intangible benefit in having the Dean Witter sales organization
concentrate its selling efforts on one rather than two similar funds, which may
result in further economies of scale. Finally, the Board considered that even if
the benefits enumerated above are not realized, the costs to the Fund are
sufficiently minor to warrant taking the opportunity to realize those benefits.
With respect to the Class B shares, the Board recognized that, although the
formula for calculating 12b-1 fees is the same for both Funds, the application
of the formula results in lower annual fees for Dean Witter Global Dividend than
for Dean Witter World Wide and that combining the two Funds would, at least
initially, result in somewhat higher 12b-1 fees for the combined Fund, as noted
above under "Synopsis -- Fee Table." The Board believes, however, that this
relatively minor disadvantage would be offset by the other benefits of the
Reorganization.
13
<PAGE>
THE REORGANIZATION AGREEMENT
The terms and conditions under which the Reorganization would be
consummated, as summarized below, are set forth in the Reorganization Agreement.
This summary is qualified in its entirety by reference to the Reorganization
Agreement, a copy of which is attached as Exhibit A to this Proxy Statement and
Prospectus.
The Reorganization Agreement provides that (i) Dean Witter World Wide will
transfer all of its assets, including portfolio securities, cash (other than
cash amounts retained by Dean Witter World Wide as a "Cash Reserve" in the
amount sufficient to discharge its liabilities not discharged prior to the
Valuation Date (as defined below) and for expenses of the dissolution), cash
equivalents and receivables to Dean Witter Global Dividend on the Closing Date
in exchange for the assumption by Dean Witter Global Dividend of stated
liabilities of Dean Witter World Wide, including all expenses, costs, charges
and reserves, as reflected on an unaudited statement of assets and liabilities
of Dean Witter World Wide prepared by the Treasurer of Dean Witter World Wide as
of the Valuation Date (as defined below) in accordance with generally accepted
accounting principles consistently applied from the prior audited period, and
the delivery of Dean Witter Global Dividend Shares; (ii) such Dean Witter Global
Dividend Shares would be distributed to Shareholders on the Closing Date or as
soon as practicable thereafter; (iii) Dean Witter World Wide would be dissolved;
and (iv) the outstanding shares of Dean Witter World Wide would be canceled.
The number of Dean Witter Global Dividend Shares to be delivered to Dean
Witter World Wide will be determined by dividing the aggregate net asset value
of each class of shares of Dean Witter World Wide acquired by Dean Witter Global
Dividend by the net asset value per share of the corresponding class of shares
of Dean Witter Global Dividend; these values will be calculated as of the close
of business of the New York Stock Exchange on the third business day following
the receipt of the requisite approval by Shareholders of the Reorganization
Agreement or at such other time as Dean Witter World Wide and Dean Witter Global
Dividend may agree (the "Valuation Date"). As an illustration, assume that on
the Valuation Date, Class B shares of Dean Witter World Wide had an aggregate
net asset value (not including any Cash Reserve of Dean Witter World Wide) of
$100,000. If the net asset value per Class B share of Dean Witter Global
Dividend were $10 per share at the close of business on the Valuation Date, the
number of Class B shares to be issued would be 10,000 ($100,000 DIVIDED BY $10).
These 10,000 Class B shares of Dean Witter Global Dividend would be distributed
to the former Class B shareholders of Dean Witter World Wide. This example is
given for illustration purposes only and does not bear any relationship to the
dollar amounts or shares expected to be involved in the Reorganization.
On the Closing Date or as soon as practicable thereafter, Dean Witter World
Wide will distribute pro rata to its Shareholders of record as of the close of
business on the Valuation Date, the Dean Witter Global Dividend Shares it
receives. Each Shareholder will receive the class of shares of Dean Witter
Global Dividend that corresponds to the class of shares of Dean Witter World
Wide currently held by that Shareholder. Accordingly, the Dean Witter Global
Dividend Shares will be distributed as follows: each of the Class A, Class B,
Class C and Class D shares of Dean Witter Global Dividend will be distributed to
holders of Class A, Class B, Class C and Class D shares of Dean Witter World
Wide, respectively. Dean Witter Global Dividend will cause its transfer agent to
credit and confirm an appropriate number of Dean Witter Global Dividend Shares
to each Shareholder. Certificates for Dean Witter Global Dividend Shares will be
issued only upon written request of a Shareholder and only for whole shares,
with fractional shares credited to the name of the Shareholder on the books of
Dean Witter Global Dividend. Shareholders who wish to receive certificates
representing their Dean Witter Global Dividend Shares must, after receipt of
their confirmations, make a written request to Dean Witter Global Dividend's
transfer agent, Dean Witter Trust FSB, Harborside Financial Center, Jersey City,
New
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Jersey 07311. Shareholders of Dean Witter World Wide holding their shares in
certificate form will be asked to surrender such certificates in connection with
the Reorganization. Shareholders who do not surrender their certificates prior
to the Closing Date will still receive their shares of Dean Witter Global
Dividend; however, such Shareholders will not be able to redeem, transfer or
exchange the Dean Witter Global Dividend Shares received until the old
certificates have been surrendered.
The Closing Date will be the next business day following the Valuation Date.
The consummation of the Reorganization is contingent upon the approval of the
Reorganization by the Shareholders and the receipt of the other opinions and
certificates set forth in Sections 6, 7 and 8 of the Reorganization Agreement
and the occurrence of the events described in those Sections, certain of which
may be waived by Dean Witter World Wide or Dean Witter Global Dividend. The
Reorganization Agreement may be amended in any mutually agreeable manner, except
that no amendment may be made subsequent to the Meeting which would
detrimentally affect the value of the shares of Dean Witter Global Dividend to
be distributed. All expenses of the Reorganization, including the cost of
preparing and mailing this Proxy Statement and Prospectus, will be borne by
InterCapital, which expenses are not expected to exceed $230,000.
The Reorganization Agreement may be terminated and the Reorganization
abandoned at any time, before or after approval by Shareholders or by mutual
consent of Dean Witter World Wide and Dean Witter Global Dividend. In addition,
either party may terminate the Reorganization Agreement upon the occurrence of a
material breach of the Reorganization Agreement by the other party or if, by
[August 31, 1998,] any condition set forth in the Reorganization Agreement has
not been fulfilled or waived by the party entitled to its benefits.
Under the Reorganization Agreement, within one year after the Closing Date,
Dean Witter World Wide shall: either pay or make provision for all of its
liabilities and distribute any remaining amount of the Cash Reserve (after
paying or making provision for such liabilities and the estimated cost of making
the distribution) to former shareholders of Dean Witter World Wide that received
Dean Witter Global Dividend Shares. Dean Witter World Wide shall be dissolved
and deregistered as an investment company promptly following the distributions
of shares of Dean Witter Global Dividend to Shareholders of record of Dean
Witter World Wide.
The effect of the Reorganization is that Shareholders who vote their shares
in favor of the Reorganization Agreement are electing to sell their shares of
Dean Witter World Wide (at net asset value on the Valuation Date calculated
after subtracting any Cash Reserve) and reinvest the proceeds in Dean Witter
Global Dividend Shares at net asset value and without recognition of taxable
gain or loss for Federal income tax purposes. See "Tax Aspects of the
Reorganization" below. As noted in "Tax Aspects of the Reorganization" below, if
Dean Witter World Wide recognizes net gain from the sale of securities prior to
the Closing Date, such gain, to the extent not offset by capital loss
carryforwards, will be distributed to Shareholders prior to the Closing Date and
will be taxable to Shareholders as capital gain.
Shareholders will continue to be able to redeem their shares of Dean Witter
World Wide at net asset value next determined after receipt of the redemption
request (subject to any applicable CDSC) until the close of business on the
business day next preceding the Closing Date. Redemption requests received by
Dean Witter World Wide thereafter will be treated as requests for redemption of
shares of Dean Witter Global Dividend.
TAX ASPECTS OF THE REORGANIZATION
At least one but not more than 20 business days prior to the Valuation Date,
Dean Witter World Wide will declare and pay a dividend or dividends which,
together with all previous such dividends, will have the effect of distributing
to Shareholders all of Dean Witter World Wide's investment company taxable
income for all periods since the inception of Dean Witter World Wide through and
including the Valuation Date (computed without
15
<PAGE>
regard to any dividends paid deduction), and all of Dean Witter World Wide's net
capital gain, if any, realized in such periods (after reduction for any capital
loss carryforward).
The Reorganization is intended to qualify for Federal income tax purposes as
a tax-free reorganization under Section 368(a)(1) of the Internal Revenue Code
of 1986, as amended (the "Code"). Dean Witter World Wide and Dean Witter Global
Dividend have represented that, to their best knowledge, there is no plan or
intention by Shareholders to redeem, sell, exchange or otherwise dispose of a
number of Dean Witter Global Dividend Shares received in the transaction that
would reduce Shareholders' ownership of Dean Witter Global Dividend Shares to a
number of shares having a value, as of the Closing Date, of less than 50% of the
value of all of the formerly outstanding Dean Witter World Wide shares as of the
same date. Dean Witter World Wide and Dean Witter Global Dividend have each
further represented that, as of the Closing Date, Dean Witter World Wide and
Dean Witter Global Dividend will qualify as regulated investment companies.
As a condition to the Reorganization, Dean Witter World Wide and Dean Witter
Global Dividend will receive an opinion of Gordon Altman Butowsky Weitzen Shalov
& Wein that, based on certain assumptions, facts, the terms of the
Reorganization Agreement and additional representations set forth in the
Reorganization Agreement or provided by Dean Witter World Wide and Dean Witter
Global Dividend:
1. The transfer of substantially all of Dean Witter World Wide's assets in
exchange for the Dean Witter Global Dividend Shares and the assumption by
Dean Witter Global Dividend of certain stated liabilities of Dean Witter World
Wide followed by the distribution by Dean Witter World Wide of the Dean Witter
Global Dividend Shares to Shareholders in exchange for their Dean Witter World
Wide shares will constitute a "reorganization" within the meaning of Section
368(a)(1) of the Code, and Dean Witter World Wide and Dean Witter Global
Dividend will each be a "party to a reorganization" within the meaning of
Section 368 (b) of the Code;
2. No gain or loss will be recognized by Dean Witter Global Dividend upon
the receipt of the assets of Dean Witter World Wide solely in exchange
for the Dean Witter Global Dividend Shares and the assumption by Dean Witter
Global Dividend of the stated liabilities of Dean Witter World Wide;
3. No gain or loss will be recognized by Dean Witter World Wide upon the
transfer of the assets of Dean Witter World Wide to Dean Witter Global
Dividend in exchange for the Dean Witter Global Dividend Shares and the
assumption by Dean Witter Global Dividend of the stated liabilities or upon the
distribution of Dean Witter Global Dividend Shares to Shareholders in exchange
for their Dean Witter World Wide shares;
4. No gain or loss will be recognized by Shareholders upon the exchange of
the shares of Dean Witter World Wide for the Dean Witter Global Dividend
Shares;
5. The aggregate tax basis for the Dean Witter Global Dividend Shares
received by each of the Shareholders pursuant to the Reorganization will
be the same as the aggregate tax basis of the shares in Dean Witter World Wide
held by each such Shareholder immediately prior to the Reorganization;
6. The holding period of the Dean Witter Global Dividend Shares to be
received by each Shareholder will include the period during which the
shares in Dean Witter World Wide surrendered in exchange therefor were held
(provided such shares in Dean Witter World Wide were held as capital assets on
the date of the Reorganization);
7. The tax basis of the assets of Dean Witter World Wide acquired by Dean
Witter Global Dividend will be the same as the tax basis of such assets
to Dean Witter World Wide immediately prior to the Reorganization; and
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<PAGE>
8. The holding period of the assets of Dean Witter World Wide in the hands
of Dean Witter Global Dividend will include the period during which those
assets were held by Dean Witter World Wide.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE EFFECT, IF ANY,
OF THE PROPOSED TRANSACTION IN LIGHT OF THEIR INDIVIDUAL CIRCUMSTANCES. BECAUSE
THE FOREGOING DISCUSSION ONLY RELATES TO THE FEDERAL INCOME TAX CONSEQUENCES OF
THE PROPOSED TRANSACTION, SHAREHOLDERS SHOULD ALSO CONSULT THEIR TAX ADVISORS AS
TO STATE AND LOCAL TAX CONSEQUENCES, IF ANY, OF THE PROPOSED TRANSACTION.
DESCRIPTION OF SHARES
Dean Witter Global Dividend shares to be issued pursuant to the
Reorganization Agreement will, when issued, be fully paid and non-assessable by
Dean Witter Global Dividend and transferable without restrictions and will have
no preemptive rights. Class B shares of Dean Witter Global Dividend, like Class
B shares of Dean Witter World Wide, have a conversion feature pursuant to which
approximately ten (10) years after the date of the original purchase of such
shares, the shares will convert automatically to Class A shares, based on the
relative net asset values of the two classes. For greater details regarding the
conversion feature, including the method by which the 10 year period is
calculated and the treatment of reinvested dividends, see "Purchase of Fund
Shares" in each fund's Prospectus.
CAPITALIZATION TABLE (UNAUDITED)
The following table sets forth the capitalization of Dean Witter Global
Dividend and Dean Witter World Wide as of December 31, 1997 and on a pro forma
combined basis as if the Reorganization had occurred on that date:
<TABLE>
<CAPTION>
NET ASSET
SHARES VALUE
CLASS A NET ASSETS OUTSTANDING PER SHARE
- -------------------------------------------------- -------------- ----------- ---------
<S> <C> <C> <C>
Dean Witter World Wide............................ $ 388,953 24,081 $16.15
Dean Witter Global Dividend....................... $ 8,377,715 642,793 $13.03
Combined Fund (pro forma)......................... $ 8,766,668 672,644 $13.03
<CAPTION>
CLASS B
- --------------------------------------------------
<S> <C> <C> <C>
Dean Witter World Wide............................ $ 299,820,595 18,629,400 $16.09
Dean Witter Global Dividend....................... $3,554,812,091 272,562,930 $13.04
Combined Fund (pro forma)......................... $3,854,632,686 295,555,307 $13.04
<CAPTION>
CLASS C
- --------------------------------------------------
<S> <C> <C> <C>
Dean Witter World Wide............................ $ 55,904 3,472 $16.10
Dean Witter Global Dividend....................... $ 6,946,214 533,294 $13.03
Combined Fund (pro forma)......................... $ 7,002,118 537,584 $13.03
<CAPTION>
CLASS D
- --------------------------------------------------
<S> <C> <C> <C>
Dean Witter World Wide............................ $ 27,160,112 1,679,087 $16.18
Dean Witter Global Dividend....................... $ 14,344,323 1,100,112 $13.04
Combined Fund (pro forma)......................... $ 41,504,435 3,182,943 $13.04
</TABLE>
APPRAISAL RIGHTS
Shareholders will have no appraisal rights in connection with the
Reorganization.
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<PAGE>
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES AND POLICIES
Dean Witter World Wide and Dean Witter Global Dividend each are funds which
invest in securities of companies located throughout the world. The investment
objective of Dean Witter World Wide is to obtain total return on its assets
primarily through long-term capital growth and to a lesser extent income. The
investment objective of Dean Witter Global Dividend is to provide reasonable
current income and long-term growth of income and capital. Dean Witter World
Wide seeks to achieve its objective by investing in a combination of common
stocks, preferred stocks, convertible debt securities, bonds and other debt
obligations of domestic and foreign companies and governments and international
organizations worldwide. Dean Witter Global Dividend seeks to achieve its
objective by investing at least 65% of its assets in dividend-paying equity
securities issued by issuers located in various countries throughout the world.
Dean Witter Global Dividend may invest up to 35% of its total assets in: (a)
convertible debt securities, convertible preferred securities, U.S. Government
securities (securities issued or guaranteed as to principal and interest by the
United States or its agencies and instrumentalities), fixed-income securities
issued by foreign governments and international organizations, investment grade
(Baa or higher by Moody's or BBB or higher by S&P) corporate debt securities
and/or money market instruments when, in the opinion of the Investment Manager,
the projected total return on such securities is equal to or greater than the
expected total return on equity securities or when such holdings might be
expected to reduce the volatility of the portfolio (for purposes of this
provision, the term "total return" means the difference between the cost of a
security and the aggregate of its market value and dividends received); or (b)
in money market instruments under any one or more of the following
circumstances: (i) pending investment of proceeds of sale of the fund's shares
or of portfolio securities; (ii) pending settlement of purchases of portfolio
securities; or (iii) to maintain liquidity for the purpose of meeting
anticipated redemptions. There are no minimum rating or quality requirements
with respect to convertible securities in which the fund may invest and, thus,
all or some of such securities may be below investment grade. The fund will not,
however, invest in any convertible security rated below B by either Moody's or
S&P or, if unrated, is determined to be of comparable quality by the Investment
Manager.
Dean Witter World Wide may invest 100% of its assets in any combination of
equity and fixed-income securities. There is no limitation on the percentage or
amount of the fund's assets which may be invested for growth or income.
Additionally, Dean Witter World Wide does not have any limitations with respect
to the ratings of its fixed-income and convertible securities.
Both funds may invest all of their assets in foreign securities, including
securities of foreign issuers in the form of American Depository Receipts
("ADRs") or European Depository Receipts ("EDRs") although the portfolio of Dean
Witter Global Dividend will be invested in at least three separate countries.
Both funds may enter into forward foreign currency exchange contracts in
connection with their foreign securities investments as a hedge against
fluctuations in future foreign exchange rates.
Both Dean Witter World Wide and Dean Witter Global Dividend may purchase and
sell (write) options on portfolio securities denominated in either U.S. dollars
or foreign currencies and on the U.S. dollar or foreign currencies which are or
may be in the future listed on U.S. and foreign securities exchanges or are
written in over-the-counter transactions ("OTC options"), and may write covered
call options on such securities without limit, in order to hedge against the
decline in the value of a security or currency in which such security is
denominated, to earn additional income and or to close out long call option
positions. Both funds also may purchase listed and OTC call and put options in
amounts equaling up to 5% of their respective total assets. Both
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<PAGE>
funds may purchase call and put options to close out covered call or written put
positions, as applicable, or to protect the value of the relevant security. Both
funds may purchase and sell futures contracts that are currently traded, or may
in the future be traded, on U.S. and foreign commodity exchanges on underlying
portfolio securities, on any currency ("currency" futures), on U.S. and foreign
fixed-income securities ("interest rate" futures) and on such indexes of U.S. or
foreign equity or fixed-income securities as may exist or come into being
("index" futures).
Both Dean Witter Global Dividend and Dean Witter World Wide may (i) purchase
securities on a when-issued or delayed delivery basis, (ii) purchase or sell
securities on a forward commitment basis, (iii) purchase securities on a "when,
as and if issued" basis, (iv) invest up to 10% of their respective total assets
in shares of other investment companies or real estate investment trusts and (v)
invest in zero coupon securities. Both funds may enter into repurchase
agreements subject to certain procedures designed to minimize risks associated
with such agreements. Dean Witter World Wide may invest up to 10% 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, or which
are otherwise not readily marketable, whereas, Dean Witter Global Dividend has a
5% limit respecting investments in such securities; both funds do not include
Rule 144A securities under these restrictions.
Both Dean Witter Global Dividend and Dean Witter World Wide may invest part
or all of their respective assets in money market instruments to maintain
temporarily a "defensive" posture when, in the opinion of the funds' respective
investment advisers, it is advisable to do so because of market conditions.
The investment policies of both Dean Witter World Wide and Dean Witter
Global Dividend are not fundamental and may be changed by their respective
Boards. The foregoing discussion is a summary of the principal differences and
similarities between the investment policies of the funds. For a more complete
discussion of each fund's policies, see "Investment Objective and Policies" in
each fund's Prospectus and "Investment Practices and Policies" in each fund's
Statement of Additional Information.
INVESTMENT RESTRICTIONS
The investment restrictions adopted by Dean Witter World Wide and Dean
Witter Global Dividend as fundamental policies are substantially similar and are
summarized under the caption "Investment Restrictions" in their respective
Prospectuses and Statements of Additional Information. A fundamental investment
restriction cannot be changed without the vote of the majority of the
outstanding voting securities of a fund, as defined in the 1940 Act. The
differences are as follows: (a) Dean Witter World Wide has a fundamental
restriction that it may not, as to 100% of its total assets, purchase more than
10% of all outstanding voting securities or any class of securities of any one
issuer, whereas Dean Witter Global Dividend is subject to a similar fundamental
limitation with respect to 75% of its total assets; (b) both funds are
prohibited from lending money or securities except by the purchase of portfolio
securities in which the funds may invest consistent with their investment
objectives and policies except that Dean Witter World Wide may lend securities
in an amount not exceeding 10% of its total assets and Dean Witter Global
Dividend may lend securities in an amount not exceeding 25% of its total assets,
each amount at the time of the loan; (c) Dean Witter Global Dividend has a
fundamental restriction that it may not, except for obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, 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 whereas Dean Witter World Wide has no such limitation; and (d) Dean
Witter World Wide may not invest more than 5% of the value of its net assets in
warrants, including not more than 2% of such assets in warrants not listed on
the New York or American Stock Exchange; Dean Witter Global Dividend has no such
limitation.
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<PAGE>
In addition, Dean Witter World Wide has a fundamental restriction that it
may not invest in securities of any issuer if, in the exercise of reasonable
diligence, the fund has determined that any officer or trustee of the fund or of
the fund's investment manager owns more than 1/2 of 1% of the outstanding
securities of such issuer, and such officers and trustees who own more than 1/2
of 1% own in the aggregate more than 5% of the outstanding securities of such
issuer; Dean Witter Global Dividend has no such limitation.
ADDITIONAL INFORMATION ABOUT DEAN WITTER WORLD WIDE
AND DEAN WITTER GLOBAL DIVIDEND
GENERAL
For a discussion of the organization and operation of Dean Witter Global
Dividend and Dean Witter World Wide, see "The Fund and its Management,"
"Investment Objective and Policies," "Investment Restrictions" and "Prospectus
Summary" in, and the cover page of, their respective Prospectuses.
FINANCIAL INFORMATION
For certain financial information about Dean Witter Global Dividend and Dean
Witter World Wide, see "Financial Highlights" and "Performance Information" in
their respective Prospectuses.
MANAGEMENT
For information about the respective Board of Trustees, investment manager,
sub-adviser (in the case of Dean Witter World Wide) and the Distributor of Dean
Witter Global Dividend and Dean Witter World Wide, see "The Fund and its
Management" and "Investment Objective and Policies" in, and on the back cover
of, their respective Prospectuses.
DESCRIPTION OF SECURITIES AND SHAREHOLDER INQUIRIES
For a description of the nature and most significant attributes of shares of
Dean Witter World Wide and Dean Witter Global Dividend, and information
regarding shareholder inquiries, see "Additional Information" in their
respective Prospectuses.
DIVIDENDS, DISTRIBUTIONS AND TAXES
For a discussion of Dean Witter Global Dividend's and Dean Witter World
Wide's policies with respect to dividends, distributions and taxes, see
"Dividends, Distributions and Taxes" in their respective Prospectuses as well as
the discussion herein under "Synopsis -- Purchases, Exchanges and Redemptions."
PURCHASES, REPURCHASES AND REDEMPTIONS
For a discussion of how Dean Witter Global Dividend's and Dean Witter World
Wide's shares may be purchased, repurchased and redeemed, see "Purchase of Fund
Shares", "Shareholder Services" and "Redemptions and Repurchases" in their
respective Prospectuses.
20
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
For a discussion of Dean Witter Global Dividend's performance, see
management's letter to shareholders in its Annual Report for its fiscal year
ended March 31, 1997 accompanying this Proxy Statement and Prospectus. For a
discussion of the performance of Dean Witter World Wide, see its Annual Report
for its fiscal year ended March 31, 1997.
FINANCIAL STATEMENTS AND EXPERTS
The financial statements of Dean Witter Global Dividend, for the year ended
March 31, 1997, and Dean Witter World Wide, for the year ended March 31, 1997
that are incorporated by reference in the Statement of Additional Information
relating to the Registration Statement on Form N-14 of which this Proxy
Statement and Prospectus forms a part have been audited by Price Waterhouse LLP,
independent accountants. The financial statements have been incorporated by
reference in reliance upon such reports given upon the authority of Price
Waterhouse LLP as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of Dean Witter
Global Dividend will be passed upon by Gordon Altman Butowsky Weitzen Shalov &
Wein, New York, New York. Such firm will rely on Lane Altman & Owens as to
matters of Massachusetts law.
AVAILABLE INFORMATION
Additional information about Dean Witter World Wide and Dean Witter Global
Dividend is available, as applicable, in the following documents which are
incorporated herein by reference: (i) Dean Witter Global Dividend's Prospectus
dated July 28, 1997, accompanying this Proxy Statement and Prospectus, which
Prospectus forms a part of Post-Effective Amendment No. 6 to Dean Witter Global
Dividend's Registration Statement on Form N-1A (File Nos. 33-59004; 811-7458);
(ii) Dean Witter Global Dividend's Annual Report for its fiscal year ended March
31, 1997 and its unaudited Semi-Annual Report for the six months ended September
30, 1997, accompanying this Proxy Statement and Prospectus; (iii) Dean Witter
World Wide's Prospectus dated July 28, 1997, which Prospectus forms a part of
Post-Effective Amendment No. 16 to Dean Witter World Wide's Registration
Statement on Form N-1A (File Nos. 2-85148; 811-3800); and (iv) Dean Witter World
Wide's Annual Report for the fiscal year March 31, 1997 and its unaudited
Semi-Annual Report for the six months ended September 30, 1997. The foregoing
documents may be obtained without charge by calling (212) 392-2550 or (800)
526-3143.
Dean Witter World Wide and Dean Witter Global Dividend are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and in accordance therewith, file reports and other information with the
Commission. Proxy material, reports and other information about Dean Witter
World Wide and Dean Witter Global Dividend which are of public record can be
inspected and copied at public reference facilities maintained by the Commission
at Room 1204, Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549 and
certain of its regional offices, and copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549.
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<PAGE>
OTHER BUSINESS
Management of Dean Witter World Wide knows of no business other than the
matters specified above which will be presented at the Meeting. Since matters
not known at the time of the solicitation may come before the Meeting, the proxy
as solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote this proxy in accordance with their judgment on such matters.
By Order of the Board of Trustees
Barry Fink,
SECRETARY
March , 1998
22
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
29th day of January, 1998, by and between DEAN WITTER GLOBAL DIVIDEND GROWTH
SECURITIES, a Massachusetts business trust ("Dean Witter Global Dividend") and
DEAN WITTER WORLD WIDE INVESTMENT TRUST, a Massachusetts business trust ("Dean
Witter World Wide").
This Agreement is intended to be and is adopted as a "plan of
reorganization" within the meaning of Treas. Reg. 1.368-2(g), for a
reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization ("Reorganization") will consist of the
transfer to Dean Witter Global Dividend of substantially all of the assets of
Dean Witter World Wide in exchange for the assumption by Dean Witter Global
Dividend of all stated liabilities of Dean Witter World Wide and the issuance by
Dean Witter Global Dividend of shares of beneficial interest, par value $0.01
per share (the "Dean Witter Global Dividend Shares"), to be distributed, after
the Closing Date hereinafter referred to, to the shareholders of Dean Witter
World Wide in liquidation of Dean Witter World Wide as provided herein, all upon
the terms and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. THE REORGANIZATION AND LIQUIDATION OF DEAN WITTER WORLD WIDE
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, Dean Witter World Wide
agrees to assign, deliver and otherwise transfer the Dean Witter World Wide
Assets (as defined in paragraph 1.2) to Dean Witter Global Dividend and Dean
Witter Global Dividend Growth agrees in exchange therefor to assume all of Dean
Witter World Wide's stated liabilities on the Closing Date as set forth in
paragraph 1.3(a) and to deliver to Dean Witter World Wide the number of Dean
Witter Global Dividend Growth Shares, including fractional Dean Witter Global
Dividend Shares, determined in the manner set forth in paragraph 2.3. Such
transactions shall take place at the closing provided for in paragraph 3.1
("Closing").
1.2 (a) The "Dean Witter World Wide Assets" shall consist of all property,
including without limitation, all cash (other than the "Cash Reserve" (as
defined in paragraph 1.3(b)), cash equivalents, securities and dividend and
interest receivables owned by Dean Witter World Wide, and any deferred or
prepaid expenses shown as an asset on Dean Witter World Wide's books on the
Valuation Date.
(b) On or prior to the Valuation Date, Dean Witter World Wide will
provide Dean Witter Global Dividend with a list of all of Dean Witter World
Wide's assets to be assigned, delivered and otherwise transferred to Dean Witter
Global Dividend and of the stated liabilities to be assumed by Dean Witter
Global Dividend pursuant to this Agreement. Dean Witter World Wide reserves the
right to sell any of the securities on such list but will not, without the prior
approval of Dean Witter Global Dividend, acquire any additional securities other
than securities of the type in which Dean Witter Global Dividend is permitted to
invest and in amounts agreed to in writing by Dean Witter Global Dividend. Dean
Witter Global Dividend will, within a reasonable time prior to the Valuation
Date, furnish Dean Witter World Wide with a statement of Dean Witter Global
Dividend's investment objectives, policies and restrictions and a list of the
securities, if any, on the list referred to in the first sentence of this
paragraph that do not conform to Dean Witter Global Dividend's investment
objective, policies and restrictions. In the event that Dean Witter World Wide
holds any investments that Dean Witter Global Dividend is not permitted to hold,
Dean Witter World Wide will dispose of such securities on or prior to the
Valuation Date. In addition, if it is determined that the portfolios of Dean
Witter World Wide and Dean Witter Global Dividend, when aggregated, would
contain investments exceeding certain
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percentage limitations imposed upon Dean Witter Global Dividend with respect to
such investments, Dean Witter World Wide if requested by Dean Witter Global
Dividend will, on or prior to the Valuation Date, dispose of and/or reinvest a
sufficient amount of such investments as may be necessary to avoid violating
such limitations as of the Closing Date (as defined in paragraph 3.1).
1.3 (a) Dean Witter World Wide will endeavor to discharge all of its
liabilities and obligations on or prior to the Valuation Date. Dean Witter
Global Dividend will assume all stated liabilities, which includes, without
limitation, all expenses, costs, charges and reserves reflected on an unaudited
Statement of Assets and Liabilities of Dean Witter World Wide prepared by the
Treasurer of Dean Witter World Wide as of the Valuation Date in accordance with
generally accepted accounting principles consistently applied from the prior
audited period.
(b) On the Valuation Date, Dean Witter World Wide may establish a cash
reserve, which shall not exceed 5% of Dean Witter World Wide's net assets as of
the close of business on the Valuation Date ("Cash Reserve") to be retained by
Dean Witter World Wide and used for the payment of its liabilities not
discharged prior to the Valuation Date and for the expenses of dissolution.
1.4 In order for Dean Witter World Wide to comply with Section 852(a)(1) of
the Code and to avoid having any investment company taxable income or net
capital gain (as defined in Sections 852(b)(2) and 1222(11) of the Code,
respectively) in the short taxable year ending with its dissolution, Dean Witter
World Wide will on or before the Valuation Date (a) declare a dividend in an
amount large enough so that it will have declared dividends of all of its
investment company taxable income and net capital gain, if any, for such taxable
year (determined without regard to any deduction for dividends paid) and (b)
distribute such dividend.
1.5 On the Closing Date or as soon as practicable thereafter, Dean Witter
World Wide will distribute Dean Witter Global Dividend Shares received by Dean
Witter World Wide pursuant to paragraph 1.1 pro rata to its shareholders of
record determined as of the close of business on the Valuation Date ("Dean
Witter World Wide Shareholders"). Each Dean Witter World Wide Shareholder will
receive the class of shares of Dean Witter Global Dividend that corresponds to
the class of shares of Dean Witter World Wide currently held by that Dean Witter
World Wide Shareholder. Accordingly, the Dean Witter Global Dividend Shares will
be distributed as follows: each of the Class A, Class B, Class C and Class D
shares of Dean Witter Global Dividend will be distributed to holders of Class A,
Class B, Class C and Class D shares of Dean Witter World Wide, respectively.
Such distribution will be accomplished by an instruction, signed by Dean Witter
World Wide's Secretary, to transfer Dean Witter Global Dividend Shares then
credited to Dean Witter World Wide's account on the books of Dean Witter Global
Dividend to open accounts on the books of Dean Witter Global Dividend in the
names of the Dean Witter World Wide Shareholders and representing the respective
pro rata number of Dean Witter Global Dividend Shares due such Dean Witter World
Wide Shareholders. All issued and outstanding shares of Dean Witter World Wide
simultaneously will be canceled on Dean Witter World Wide's books; however,
share certificates representing interests in Dean Witter World Wide will
represent a number of Dean Witter Global Dividend Shares after the Closing Date
as determined in accordance with paragraph 2.3. Dean Witter Global Dividend will
issue certificates representing Dean Witter Global Dividend Shares in connection
with such exchange only upon the written request of a Dean Witter World Wide
Shareholder.
1.6 Ownership of Dean Witter Global Dividend Shares will be shown on the
books of Dean Witter Global Dividend's transfer agent. Dean Witter Global
Dividend Shares will be issued in the manner described in Dean Witter Global
Dividend's current Prospectus and Statement of Additional Information.
1.7 Any transfer taxes payable upon issuance of Dean Witter Global Dividend
Shares in a name other than the registered holder of Dean Witter Global Dividend
Shares on Dean Witter World Wide's books as of the
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close of business on the Valuation Date shall, as a condition of such issuance
and transfer, be paid by the person to whom Dean Witter Global Dividend Shares
are to be issued and transferred.
1.8 Any reporting responsibility of Dean Witter World Wide is and shall
remain the responsibility of Dean Witter World Wide up to and including the date
on which Dean Witter World Wide is dissolved and deregistered pursuant to
paragraph 1.9.
1.9 Within one year after the Closing Date, Dean Witter World Wide shall
pay or make provision for the payment of all its liabilities and taxes, and
distribute to the shareholders of Dean Witter World Wide as of the close of
business on the Valuation Date any remaining amount of the Cash Reserve (as
reduced by the estimated cost of distributing it to shareholders). Dean Witter
World Wide shall be dissolved as a Massachusetts business trust and deregistered
as an investment company under the Investment Company Act of 1940, as amended
("1940 Act"), promptly following the making of all distributions pursuant to
paragraph 1.5.
1.10 Copies of all books and records maintained on behalf of Dean Witter
World Wide in connection with its obligations under the 1940 Act, the Code,
state blue sky laws or otherwise in connection with this Agreement will promptly
after the Closing be delivered to officers of Dean Witter Global Dividend or
their designee and Dean Witter Global Dividend or its designee shall comply with
applicable record retention requirements to which Dean Witter World Wide is
subject under the 1940 Act.
2. VALUATION
2.1 The value of the Dean Witter World Wide Assets shall be the value of
such assets computed as of 4:00 p.m. on the New York Stock Exchange on the third
business day following the receipt of the requisite approval by shareholders of
Dean Witter World Wide of this Agreement or at such time on such earlier or
later date after such approval as may be mutually agreed upon in writing (such
time and date being hereinafter called the "Valuation Date"), using the
valuation procedures set forth in Dean Witter Global Dividend's then current
Prospectus and Statement of Additional Information.
2.2 The net asset value of a Dean Witter Global Dividend Share shall be the
net asset value per share computed on the Valuation Date, using the valuation
procedures set forth in Dean Witter Global Dividend's then current Prospectus
and Statement of Additional Information.
2.3 The number of Dean Witter Global Dividend Shares (including fractional
shares, if any) to be issued hereunder shall be determined, with respect to each
class, by dividing the aggregate net asset value of each class of Dean Witter
World Wide shares (determined in accordance with paragraph 2.1) by the net asset
value per share of the corresponding class of shares of Dean Witter Global
Dividend (determined in accordance with paragraph 2.2). For purposes of this
paragraph, the aggregate net asset value of each class of shares of Dean Witter
World Wide shall not include the amount of the Cash Reserve.
2.4 All computations of value shall be made by Dean Witter Services Company
Inc. ("Services") in accordance with its regular practice in pricing Dean Witter
Global Dividend. Dean Witter Global Dividend shall cause Services to deliver a
copy of its valuation report at the Closing.
3. CLOSING AND CLOSING DATE
3.1 The Closing shall take place on the next business day following the
Valuation Date (the "Closing Date"). The Closing shall be held as of 9:00 a.m.
Eastern time, or at such other time as the parties may agree. The Closing shall
be held in a location mutually agreeable to the parties hereto. All acts taking
place at the Closing shall be deemed to take place simultaneously as of 9:00
a.m. Eastern time on the Closing Date unless otherwise provided.
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3.2 Portfolio securities held by Dean Witter World Wide and represented by
a certificate or other written instrument shall be presented by it or on its
behalf to The Chase Manhattan Bank (the "Custodian"), as custodian for Dean
Witter Global Dividend, for examination no later than five business days
preceding the Valuation Date. Such portfolio securities (together with any cash
or other assets) shall be delivered by Dean Witter World Wide to the Custodian
for the account of Dean Witter Global Dividend on or before the Closing Date in
conformity with applicable custody provisions under the 1940 Act and duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof in accordance with the custom of brokers. The portfolio
securities shall be accompanied by all necessary Federal and state stock
transfer stamps or a check for the appropriate purchase price of such stamps.
Portfolio securities and instruments deposited with a securities depository (as
defined in Rule 17f-4 under the 1940 Act) shall be delivered on or before the
Closing Date by book-entry in accordance with customary practices of such
depository and the Custodian. The cash delivered shall be in the form of a
Federal Funds wire, payable to the order of "The Chase Manhattan Bank, Custodian
for Dean Witter Global Dividend Growth Securities."
3.3 In the event that on the Valuation Date, (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be restricted or
(b) trading or the reporting of trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of both Dean Witter Global Dividend and Dean
Witter World Wide, accurate appraisal of the value of the net assets of Dean
Witter Global Dividend or the Dean Witter World Wide Assets is impracticable,
the Valuation Date shall be postponed until the first business day after the day
when trading shall have been fully resumed without restriction or disruption and
reporting shall have been restored.
3.4 If requested, Dean Witter World Wide shall deliver to Dean Witter
Global Dividend or its designee (a) at the Closing, a list, certified by its
Secretary, of the names, addresses and taxpayer identification numbers of the
Dean Witter World Wide Shareholders and the number and percentage ownership of
outstanding Dean Witter World Wide shares owned by each such Dean Witter World
Wide Shareholder, all as of the Valuation Date, and (b) as soon as practicable
after the Closing, all original documentation (including Internal Revenue
Service forms, certificates, certifications and correspondence) relating to the
Dean Witter World Wide Shareholders' taxpayer identification numbers and their
liability for or exemption from back-up withholding. Dean Witter Global Dividend
shall issue and deliver to such Secretary a confirmation evidencing delivery of
Dean Witter Global Dividend Shares to be credited on the Closing Date to Dean
Witter World Wide or provide evidence satisfactory to Dean Witter World Wide
that such Dean Witter Global Dividend Shares have been credited to Dean Witter
World Wide's account on the books of Dean Witter Global Dividend. At the
Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, if any, receipts or other documents as such
other party or its counsel may reasonably request.
4. COVENANTS OF DEAN WITTER GLOBAL DIVIDEND AND DEAN WITTER WORLD WIDE
4.1 Except as otherwise expressly provided herein with respect to Dean
Witter World Wide, Dean Witter Global Dividend and Dean Witter World Wide each
will operate its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business will
include customary dividends and other distributions.
4.2 Dean Witter Global Dividend will prepare and file with the Securities
and Exchange Commission ("Commission") a registration statement on Form N-14
under the Securities Act of 1933, as amended ("1933 Act"), relating to Dean
Witter Global Dividend Shares ("Registration Statement"). Dean Witter World Wide
will provide Dean Witter Global Dividend with the Proxy Materials as described
in paragraph 4.3 below, for inclusion in the Registration Statement. Dean Witter
World Wide will further provide Dean Witter Global
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Dividend with such other information and documents relating to Dean Witter
Global Dividend as are reasonably necessary for the preparation of the
Registration Statement.
4.3 Dean Witter World Wide will call a meeting of its shareholders to
consider and act upon this Agreement and to take all other action necessary to
obtain approval of the transactions contemplated herein. Dean Witter World Wide
will prepare the notice of meeting, form of proxy and proxy statement
(collectively, "Proxy Materials") to be used in connection with such meeting;
provided that Dean Witter Global Dividend will furnish Dean Witter World Wide
with its currently effective prospectus for inclusion in the Proxy Materials and
with such other information relating to Dean Witter Global Dividend as is
reasonably necessary for the preparation of the Proxy Materials.
4.4 Dean Witter World Wide will assist Dean Witter Global Dividend in
obtaining such information as Dean Witter Global Dividend reasonably requests
concerning the beneficial ownership of Dean Witter World Wide shares.
4.5 Subject to the provisions of this Agreement, Dean Witter Global
Dividend and Dean Witter World Wide will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement.
4.6 Dean Witter World Wide shall furnish or cause to be furnished to Dean
Witter Global Dividend within 30 days after the Closing Date a statement of Dean
Witter World Wide's assets and liabilities as of the Closing Date, which
statement shall be certified by Dean Witter World Wide's Treasurer and shall be
in accordance with generally accepted accounting principles consistently
applied. As promptly as practicable, but in any case within 60 days after the
Closing Date, Dean Witter World Wide shall furnish Dean Witter Global Dividend,
in such form as is reasonably satisfactory to Dean Witter Global Dividend, a
statement certified by Dean Witter World Wide's Treasurer of Dean Witter World
Wide's earnings and profits for Federal income tax purposes that will be carried
over to Dean Witter Global Dividend pursuant to Section 381 of the Code.
4.7 As soon after the Closing Date as is reasonably practicable, Dean
Witter World Wide (a) shall prepare and file all Federal and other tax returns
and reports of Dean Witter World Wide required by law to be filed with respect
to all periods ending on or before the Closing Date but not theretofore filed
and (b) shall pay all Federal and other taxes shown as due thereon and/or all
Federal and other taxes that were unpaid as of the Closing Date, including
without limitation, all taxes for which the provision for payment was made as of
the Closing Date (as represented in paragraph 5.2(k)).
4.8 Dean Witter Global Dividend agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act and the 1940
Act and to make such filings required by the state Blue Sky and securities laws
as it may deem appropriate in order to continue its operations after the Closing
Date.
5. REPRESENTATIONS AND WARRANTIES
5.1 Dean Witter Global Dividend represents and warrants to Dean Witter
World Wide as follows:
(a) Dean Witter Global Dividend is a validly existing Massachusetts
business trust with full power to carry on its business as presently conducted;
(b) Dean Witter Global Dividend is a duly registered, open-end,
management investment company, and its registration with the Commission as an
investment company under the 1940 Act and the registration of its shares under
the 1933 Act are in full force and effect;
(c) All of the issued and outstanding shares of Dean Witter Global
Dividend have been offered and sold in compliance in all material respects with
applicable registration requirements of the 1933 Act and state
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securities laws. Shares of Dean Witter Global Dividend are registered in all
jurisdictions in which they are required to be registered under state securities
laws and other laws, and said registrations, including any periodic reports or
supplemental filings, are complete and current, all fees required to be paid
have been paid, and Dean Witter Global Dividend is not subject to any stop order
and is fully qualified to sell its shares in each state in which its shares have
been registered;
(d) The current Prospectus and Statement of Additional Information of
Dean Witter Global Dividend conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the regulations thereunder and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(e) Dean Witter Global Dividend is not in, and the execution, delivery
and performance of this Agreement will not result in a, material violation of
any provision of Dean Witter Global Dividend's Declaration of Trust or By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which Dean Witter Global Dividend is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its knowledge,
threatened against Dean Witter Global Dividend or any of its properties or
assets which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; and Dean Witter Global
Dividend knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects, or is reasonably likely to materially and adversely effect,
its business or its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets and Financial Highlights for the year ended
March 31, 1997, of Dean Witter Global Dividend certified by Price Waterhouse LLP
(copies of which have been furnished to Dean Witter World Wide), fairly present,
in all materials respects, Dean Witter Global Dividend's financial condition as
of such date in accordance with generally accepted accounting principles, and
its results of such operations, changes in its net assets and financial
highlights for such period, and as of such date there were no known liabilities
of Dean Witter Global Dividend (contingent or otherwise) not disclosed therein
that would be required in accordance with generally accepted accounting
principles to be disclosed therein;
(h) All issued and outstanding Dean Witter Global Dividend Shares are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof, except as set forth under the caption "Additional Information" in Dean
Witter Global Dividend's current Prospectus incorporated by reference in the
Registration Statement. Dean Witter Global Dividend does not have outstanding
any options, warrants or other rights to subscribe for or purchase any of its
shares;
(i) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of Dean Witter Global
Dividend, and this Agreement constitutes a valid and binding obligation of Dean
Witter Global Dividend enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors rights and to general equity principles.
No other consents, authorizations or approvals are necessary in connection with
Dean Witter Global Dividend's performance of this Agreement;
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(j) Dean Witter Global Dividend Shares to be issued and delivered to
Dean Witter World Wide, for the account of the Dean Witter World Wide
Shareholders, pursuant to the terms of this Agreement will at the Closing Date
have been duly authorized and, when so issued and delivered, will be duly and
validly issued Dean Witter Global Dividend Shares, and will be fully paid and
non-assessable with no personal liability attaching to the ownership thereof,
except as set forth under the caption "Additional Information" in Dean Witter
Global Dividend's current Prospectus incorporated by reference in the
Registration Statement;
(k) All material Federal and other tax returns and reports of Dean
Witter Global Dividend required by law to be filed on or before the Closing Date
have been filed and are correct, and all Federal and other taxes shown as due or
required to be shown as due on said returns and reports have been paid or
provision has been made for the payment thereof, and to the best of Dean Witter
Global Dividend's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any such return;
(l) For each taxable year since its inception, Dean Witter Global
Dividend has met the requirements of Subchapter M of the Code for qualification
and treatment as a "regulated investment company" and neither the execution or
delivery of nor the performance of its obligations under this Agreement will
adversely affect, and no other events are reasonably likely to occur which will
adversely affect the ability of Dean Witter Global Dividend to continue to meet
the requirements of Subchapter M of the Code;
(m) Since March 31, 1997 there has been no change by Dean Witter Global
Dividend in accounting methods, principles, or practices, including those
required by generally accepted accounting principles;
(n) The information furnished or to be furnished by Dean Witter Global
Dividend for use in registration statements, proxy materials and other documents
which may be necessary in connection with the transactions contemplated hereby
shall be accurate and complete in all material respects and shall comply in all
material respects with Federal securities and other laws and regulations
applicable thereto; and
(o) The Proxy Materials to be included in the Registration Statement
(only insofar as they relate to Dean Witter Global Dividend) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading.
5.2 Dean Witter World Wide represents and warrants to Dean Witter Global
Dividend as follows:
(a) Dean Witter World Wide is a validly existing Massachusetts business
trust with full power to carry on its business as presently conducted;
(b) Dean Witter World Wide is a duly registered, open-end, management
investment company, and its registration with the Commission as an investment
company under the 1940 Act and the registration of its shares under the 1933 Act
are in full force and effect;
(c) All of the issued and outstanding shares of beneficial interest of
Dean Witter World Wide have been offered and sold in compliance in all material
respects with applicable requirements of the 1933 Act and state securities laws.
Shares of Dean Witter World Wide are registered in all jurisdictions in which
they are required to be registered and said registrations, including any
periodic reports or supplemental filings, are complete and current, all fees
required to be paid have been paid, and Dean Witter World Wide is not subject to
any stop order and is fully qualified to sell its shares in each state in which
its shares have been registered;
(d) The current Prospectus and Statement of Additional Information of
Dean Witter World Wide conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the
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regulations thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(e) Dean Witter World Wide is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of any
provision of Dean Witter World Wide's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
Dean Witter World Wide is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its knowledge,
threatened against Dean Witter World Wide or any of its properties or assets
which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; and Dean Witter World Wide
knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects, or is reasonably likely to materially and adversely effect,
its business or its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets and Financial Highlights of Dean Witter World
Wide for the year ended March 31, 1997, certified by Price Waterhouse LLP
(copies of which have been or will be furnished to Dean Witter Global Dividend)
fairly present, in all material respects, Dean Witter World Wide's financial
condition as of such date, and its results of operations, changes in its net
assets and financial highlights for such period in accordance with generally
accepted accounting principles, and as of such date there were no known
liabilities of Dean Witter World Wide (contingent or otherwise) not disclosed
therein that would be required in accordance with generally accepted accounting
principles to be disclosed therein;
(h) Dean Witter World Wide has no material contracts or other
commitments (other than this Agreement) that will be terminated with liability
to it prior to the Closing Date;
(i) All issued and outstanding shares of Dean Witter World Wide are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof, except as set forth under the caption "Additional Information" in Dean
Witter World Wide's current Prospectus incorporated by reference in the
Registration Statement. Dean Witter World Wide does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of its
shares, nor is there outstanding any security convertible to any of its shares.
All such shares will, at the time of Closing, be held by the persons and in the
amounts set forth in the list of shareholders submitted to Dean Witter Global
Dividend pursuant to paragraph 3.4;
(j) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of Dean Witter World Wide, and subject to the approval of Dean Witter World
Wide's shareholders, this Agreement constitutes a valid and binding obligation
of Dean Witter World Wide, enforceable in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors rights and to general equity principles.
No other consents, authorizations or approvals are necessary in connection with
Dean Witter World Wide's performance of this Agreement;
(k) All material Federal and other tax returns and reports of Dean
Witter World Wide required by law to be filed on or before the Closing Date
shall have been filed and are correct and all Federal and other taxes shown as
due or required to be shown as due on said returns and reports have been paid or
provision has
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been made for the payment thereof, and to the best of Dean Witter World Wide's
knowledge, no such return is currently under audit and no assessment has been
asserted with respect to any such return;
(l) For each taxable year since its inception, Dean Witter World Wide
has met all the requirements of Subchapter M of the Code for qualification and
treatment as a "regulated investment company" and neither the execution or
delivery of nor the performance of its obligations under this Agreement will
adversely affect, and no other events are reasonably likely to occur which will
adversely affect the ability of Dean Witter World Wide to continue to meet the
requirements of Subchapter M of the Code;
(m) At the Closing Date, Dean Witter World Wide will have good and
valid title to the Dean Witter World Wide Assets, subject to no liens (other
than the obligation, if any, to pay the purchase price of portfolio securities
purchased by Dean Witter World Wide which have not settled prior to the Closing
Date), security interests or other encumbrances, and full right, power and
authority to assign, deliver and otherwise transfer such assets hereunder, and
upon delivery and payment for such assets, Dean Witter Global Dividend will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer thereof, including any restrictions as might arise under the 1933
Act;
(n) On the effective date of the Registration Statement, at the time of
the meeting of Dean Witter World Wide's shareholders and on the Closing Date,
the Proxy Materials (exclusive of the currently effective Dean Witter Global
Dividend Prospectus contained therein) will (i) comply in all material respects
with the provisions of the 1933 Act, the Securities Exchange Act of 1934, as
amended ("1934 Act") and the 1940 Act and the regulations thereunder and (ii)
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Any other information furnished by Dean Witter World Wide for
use in the Registration Statement or in any other manner that may be necessary
in connection with the transactions contemplated hereby shall be accurate and
complete and shall comply in all material respects with applicable Federal
securities and other laws and regulations thereunder;
(o) Dean Witter World Wide will, on or prior to the Valuation Date,
declare one or more dividends or other distributions to shareholders that,
together with all previous dividends and other distributions to shareholders,
shall have the effect of distributing to the shareholders all of its investment
company taxable income and net capital gain, if any, through the Valuation Date
(computed without regard to any deduction for dividends paid);
(p) Dean Witter World Wide has maintained or has caused to be
maintained on its behalf all books and accounts as required of a registered
investment company in compliance with the requirements of Section 31 of the 1940
Act and the Rules thereunder; and
(q) Dean Witter World Wide is not acquiring Dean Witter Global Dividend
Shares to be issued hereunder for the purpose of making any distribution thereof
other than in accordance with the terms of this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF DEAN WITTER WORLD WIDE
The obligations of Dean Witter World Wide to consummate the transactions
provided for herein shall be subject, at its election, to the performance by
Dean Witter Global Dividend of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
6.1 All representations and warranties of Dean Witter Global Dividend
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the
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transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
6.2 Dean Witter Global Dividend shall have delivered to Dean Witter World
Wide a certificate of its President and Treasurer, in a form reasonably
satisfactory to Dean Witter World Wide and dated as of the Closing Date, to the
effect that the representations and warranties of Dean Witter Global Dividend
made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as Dean Witter World Wide shall
reasonably request;
6.3 Dean Witter World Wide shall have received a favorable opinion from
Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to Dean Witter
Global Dividend, dated as of the Closing Date, to the effect that:
(a) Dean Witter Global Dividend is a validly existing Massachusetts
business trust, and has the power to own all of its properties and assets and to
carry on its business as presently conducted (Massachusetts counsel may be
relied upon in delivering such opinion); (b) Dean Witter Global Dividend is a
duly registered, open-end, management investment company, and its registration
with the Commission as an investment company under the 1940 Act is in full force
and effect; (c) this Agreement has been duly authorized, executed and delivered
by Dean Witter Global Dividend and, assuming that the Registration Statement
complies with the 1933 Act, the 1934 Act and the 1940 Act and regulations
thereunder and assuming due authorization, execution and delivery of this
Agreement by Dean Witter World Wide, is a valid and binding obligation of Dean
Witter Global Dividend enforceable against Dean Witter Global Dividend in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors
rights and to general equity principles; (d) Dean Witter Global Dividend Shares
to be issued to Dean Witter World Wide Shareholders as provided by this
Agreement are duly authorized and upon such delivery will be validly issued,
fully paid and non-assessable (except as set forth under the caption "Additional
Information" in Dean Witter Global Dividend's Prospectus), and no shareholder of
Dean Witter Global Dividend has any preemptive rights to subscription or
purchase in respect thereof (Massachusetts counsel may be relied upon in
delivering such opinion); (e) the execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby will not,
violate Dean Witter Global Dividend's Declaration of Trust or By-Laws; and (f)
to the knowledge of such counsel, no consent, approval, authorization or order
of any court or governmental authority of the United States or any state is
required for the consummation by Dean Witter Global Dividend of the transactions
contemplated herein, except such as have been obtained under the 1933 Act, the
1934 Act and the 1940 Act and such as may be required under state securities
laws; and
6.4 As of the Closing Date, there shall have been no material change in the
investment objective, policies and restrictions nor any increase in the
investment management fees or annual fees pursuant to Dean Witter Global
Dividend's 12b-1 plan of distribution from those described in Dean Witter Global
Dividend's Prospectus and Statement of Additional Information dated July 28,
1997.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF DEAN WITTER GLOBAL DIVIDEND
The obligations of Dean Witter Global Dividend to complete the transactions
provided for herein shall be subject, at its election, to the performance by
Dean Witter World Wide of all the obligations to be performed by it hereunder on
or before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of Dean Witter World Wide contained
in this Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
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<PAGE>
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
7.2 Dean Witter World Wide shall have delivered to Dean Witter Global
Dividend at the Closing a certificate of its President and its Treasurer,
in form and substance satisfactory to Dean Witter Global Dividend and dated as
of the Closing Date, to the effect that the representations and warranties of
Dean Witter World Wide made in this Agreement are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as Dean Witter
Global Dividend shall reasonably request;
7.3 Dean Witter World Wide shall have delivered to Dean Witter Global
Dividend a statement of the Dean Witter World Wide Assets and its
liabilities, together with a list of Dean Witter World Wide's portfolio
securities and other assets showing the respective adjusted bases and holding
periods thereof for income tax purposes, as of the Closing Date, certified by
the Treasurer of Dean Witter World Wide;
7.4 Dean Witter World Wide shall have delivered to Dean Witter Global
Dividend within three business days after the Closing a letter from Price
Waterhouse LLP dated as of the Closing Date stating that (a) such firm has
performed a limited review of the Federal and state income tax returns of Dean
Witter World Wide for each of the last three taxable years and, based on such
limited review, nothing came to their attention that caused them to believe that
such returns did not properly reflect, in all material respects, the Federal and
state income tax liabilities of Dean Witter World Wide for the periods covered
thereby, (b) for the period from March 31, 1998 to and including the Closing
Date, such firm has performed a limited review (based on unaudited financial
data) to ascertain the amount of applicable Federal, state and local taxes and
has determined that same either have been paid or reserves have been established
for payment of such taxes, and, based on such limited review, nothing came to
their attention that caused them to believe that the taxes paid or reserves set
aside for payment of such taxes were not adequate in all materials respects for
the satisfaction of all Federal, state and local tax liabilities for the period
from March 31, 1998 to and including the Closing Date and (c) based on such
limited reviews, nothing came to their attention that caused them to believe
that Dean Witter World Wide would not qualify as a regulated investment company
for Federal income tax purposes for any such year or period;
7.5 Dean Witter Global Dividend shall have received at the Closing a
favorable opinion from Gordon Altman Butowsky Weitzen Shalov & Wein,
counsel to Dean Witter World Wide, dated as of the Closing Date to the effect
that:
(a) Dean Witter World Wide is a validly existing Massachusetts business
trust and has the power to own all of its properties and assets and to carry on
its business as presently conducted (Massachusetts counsel may be relied upon in
delivering such opinion); (b) Dean Witter World Wide is a duly registered,
open-end, management investment company under the 1940 Act, and its registration
with the Commission as an investment company under the 1940 Act is in full force
and effect; (c) this Agreement has been duly authorized, executed and delivered
by Dean Witter World Wide and, assuming that the Registration Statement complies
with the 1933 Act, the 1934 Act and the 1940 Act and the regulations thereunder
and assuming due authorization, execution and delivery of this Agreement by Dean
Witter Global Dividend, is a valid and binding obligation of Dean Witter World
Wide enforceable against Dean Witter World Wide in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors rights and to general equity
principles; (d) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, violate Dean
Witter World Wide's Declaration of Trust or By-Laws; and (e) to the knowledge of
such counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or any state is required for the
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<PAGE>
consummation by Dean Witter World Wide of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the 1940
Act and such as may be required under state securities laws; and
7.6 On the Closing Date, the Dean Witter World Wide Assets shall include no
assets that Dean Witter Global Dividend, by reason of limitations of the
fund's Declaration of Trust or otherwise, may not properly acquire.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF DEAN WITTER GLOBAL DIVIDEND
AND DEAN WITTER WORLD WIDE
The obligations of Dean Witter World Wide and Dean Witter Global Dividend
hereunder are each subject to the further conditions that on or before the
Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares
of Dean Witter World Wide in accordance with the provisions of Dean Witter World
Wide's Declaration of Trust, and certified copies of the resolutions evidencing
such approval shall have been delivered to Dean Witter Global Dividend;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and permits
of Federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such Federal and state
authorities) deemed necessary by Dean Witter Global Dividend or Dean Witter
World Wide to permit consummation, in all material respects, of the transactions
contemplated herein shall have been obtained, except where failure to obtain any
such consent, order or permit would not involve risk of a material adverse
effect on the assets or properties of Dean Witter Global Dividend or Dean Witter
World Wide;
8.4 The Registration Statement shall have become effective under the 1933
Act, no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act;
8.5 Dean Witter World Wide shall have declared and paid a dividend or
dividends and/or other distribution or distributions that, together with
all previous such dividends or distributions, shall have the effect of
distributing to the Dean Witter World Wide Shareholders all of Dean Witter World
Wide's investment company taxable income (computed without regard to any
deduction for dividends paid) and all of its net capital gain (after reduction
for any capital loss carry-forward and computed without regard to any deduction
for dividends paid) for all taxable years ending on or before the Closing Date;
and
8.6 The parties shall have received a favorable opinion of the law firm of
Gordon Altman Butowsky Weitzen Shalov & Wein (based on such
representations as such law firm shall reasonably request), addressed to Dean
Witter Global Dividend and Dean Witter World Wide, which opinion may be relied
upon by the shareholders of Dean Witter World Wide, substantially to the effect
that, for Federal income tax purposes:
(a) The transfer of substantially all of Dean Witter World Wide's
assets in exchange for Dean Witter Global Dividend Shares and the assumption by
Dean Witter Global Dividend of certain stated liabilities of Dean Witter World
Wide followed by the distribution by Dean Witter World Wide of Dean Witter
Global Dividend
A-12
<PAGE>
Shares to the Dean Witter World Wide Shareholders in exchange for their Dean
Witter World Wide shares will constitute a "reorganization" within the meaning
of Section 368(a)(1) of the Code, and Dean Witter World Wide and Dean Witter
Global Dividend will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code;
(b) No gain or loss will be recognized by Dean Witter Global Dividend
upon the receipt of the assets of Dean Witter World Wide solely in exchange for
Dean Witter Global Dividend Shares and the assumption by Dean Witter Global
Dividend of the stated liabilities of Dean Witter World Wide;
(c) No gain or loss will be recognized by Dean Witter World Wide upon
the transfer of the assets of Dean Witter World Wide to Dean Witter Global
Dividend in exchange for Dean Witter Global Dividend Shares and the assumption
by Dean Witter Global Dividend of the stated liabilities or upon the
distribution of Dean Witter Global Dividend Shares to the Dean Witter World Wide
Shareholders in exchange for their Dean Witter World Wide shares;
(d) No gain or loss will be recognized by the Dean Witter World Wide
Shareholders upon the exchange of the Dean Witter World Wide shares for Dean
Witter Global Dividend Shares;
(e) The aggregate tax basis for Dean Witter Global Dividend Shares
received by each Dean Witter World Wide Shareholder pursuant to the
reorganization will be the same as the aggregate tax basis of the Dean Witter
World Wide Shares held by each such Dean Witter World Wide Shareholder
immediately prior to the Reorganization;
(f) The holding period of Dean Witter Global Dividend Shares to be
received by each Dean Witter World Wide Shareholder will include the period
during which the Dean Witter World Wide Shares surrendered in exchange therefor
were held (provided such Dean Witter World Wide Shares were held as capital
assets on the date of the Reorganization);
(g) The tax basis of the assets of Dean Witter World Wide acquired by
Dean Witter Global Dividend will be the same as the tax basis of such assets to
Dean Witter World Wide immediately prior to the Reorganization; and
(h) The holding period of the assets of Dean Witter World Wide in the
hands of Dean Witter Global Dividend will include the period during which those
assets were held by Dean Witter World Wide.
Notwithstanding anything herein to the contrary, neither Dean Witter Global
Dividend nor Dean Witter World Wide may waive the conditions set forth in this
paragraph 8.6.
9. FEES AND EXPENSES
9.1 (a) Dean Witter InterCapital Inc. ("InterCapital"), the investment
manager to both Dean Witter World Wide and Dean Witter Global Dividend,
shall bear all expenses incurred in connection with the carrying out of the
provisions of this Agreement, including legal and accounting fees, printing,
filing and proxy solicitation expenses and portfolio transfer taxes (if any)
incurred in connection with the consummation of the transactions contemplated
herein.
(b) In the event the transactions contemplated herein are not
consummated by reason of Dean Witter World Wide's or Dean Witter Global
Dividend's being either unwilling or unable to go forward, each fund's only
respective obligations hereunder shall be to reimburse InterCapital for all
reasonable out-of-pocket fees and expenses incurred by InterCapital in
connection with those transactions.
A-13
<PAGE>
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated herein, except
that the representations, warranties and covenants of Dean Witter World Wide
hereunder shall not survive the dissolution and complete liquidation of Dean
Witter World Wide in accordance with Section 1.9.
11. TERMINATION
11.1 This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing:
(a) by the mutual written consent of Dean Witter World Wide and Dean
Witter Global Dividend;
(b) by either Dean Witter Global Dividend or Dean Witter World Wide by
notice to the other, without liability to the terminating party on account of
such termination (providing the termination party is not otherwise in material
default or breach of this Agreement) if the Closing shall not have occurred on
or before [August 31, 1998;] or
(c) by either Dean Witter Global Dividend or Dean Witter World Wide, in
writing without liability to the terminating party on account of such
termination (provided the terminating party is not otherwise in material default
or breach of this Agreement), if (i) the other party shall fail to perform in
any material respect its agreements contained herein required to be performed on
or prior to the Closing Date, (ii) the other party materially breaches any of
its representations, warranties or covenants contained herein, (iii) the Dean
Witter World Wide shareholders fail to approve this Agreement at any meeting
called for such purpose at which a quorum was present or (iv) any other
condition herein expressed to be precedent to the obligations of the terminating
party has not been met and it reasonably appears that it will not or cannot be
met.
11.2 (a) Termination of this Agreement pursuant to paragraphs 11.1 (a) or
(b) shall terminate all obligations of the parties hereunder and there shall be
no liability for damages on the part of Dean Witter Global Dividend or Dean
Witter World Wide, or the trustees or officers of Dean Witter Global Dividend or
Dean Witter World Wide, to any other party or its trustees or officers.
(b) Termination of this Agreement pursuant to paragraph 11.1 (c) shall
terminate all obligations of the parties hereunder and there shall be no
liability for damages on the part of Dean Witter Global Dividend or Dean Witter
World Wide, or the trustees or officers of Dean Witter Global Dividend or Dean
Witter World Wide, except that any party in breach of this Agreement shall, upon
demand, reimburse InterCapital for all reasonable out-of-pocket fees and
expenses incurred in connection with the transactions contemplated by this
Agreement, including legal, accounting and filing fees.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties; provided, however, that
following the meeting of Dean Witter World Wide's shareholders called by Dean
Witter World Wide pursuant to paragraph 4.3, no such amendment may have the
effect of changing the provisions for determining the number of Dean Witter
Global Dividend Shares to be issued to the Dean Witter World Wide Shareholders
under this Agreement to the detriment of such Dean Witter World Wide
Shareholders without their further approval.
A-14
<PAGE>
13. MISCELLANEOUS
13.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
13.5 The obligations and liabilities of Dean Witter Global Dividend
hereunder are solely those of Dean Witter Global Dividend. It is expressly
agreed that no shareholder, nominee, trustee, officer, agent, or employee of
Dean Witter Global Dividend shall be personally liable hereunder. The execution
and delivery of this Agreement have been authorized by the directors of Dean
Witter Global Dividend and signed by authorized officers of Dean Witter Global
Dividend acting as such, and neither such authorization by such trustees nor
such execution and delivery by such officers shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally.
13.6 The obligations and liabilities of Dean Witter World Wide hereunder
are solely those of Dean Witter World Wide. It is expressly agreed that no
shareholder, nominee, trustee, officer, agent, or employee of Dean Witter World
Wide shall be personally liable hereunder. The execution and delivery of this
Agreement have been authorized by the trustees of Dean Witter World Wide and
signed by authorized officers of Dean Witter World Wide acting as such, and
neither such authorization by such trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally.
A-15
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by a duly authorized officer.
DEAN WITTER WORLD WIDE INVESTMENT TRUST
By: /s/ Charles A. Fiumefreddo
---------------------------------------
Name: Charles A. Fiumefreddo
Title: President
DEAN WITTER GLOBAL DIVIDEND GROWTH
SECURITIES
By: /s/ Barry Fink
---------------------------------------
Name: Barry Fink
Title: Vice President
A-16
<PAGE>
PROSPECTUS
JULY 28, 1997
Dean Witter Global Dividend Growth Securities (the "Fund") is an
open-end, diversified management investment company whose investment objective
is to provide reasonable current income and long-term growth of income and
capital. The Fund invests primarily in common stock of issuers worldwide, with a
record of paying dividends and the potential for increasing dividends. (See
"Investment Objective and Policies.")
The Fund offers four classes of shares (each, a "Class"), each
with a different combination of sales charges, ongoing fees and other features.
The different distribution arrangements permit an investor to choose the method
of purchasing shares that the investor believes is most beneficial given the
amount of the purchase, the length of time the investor expects to hold the
shares and other relevant circumstances. Shares of the Fund held prior to July
28, 1997 have been designated Class B shares. (See "Purchase of Fund
Shares--Alternative Purchase Arrangements.")
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 July 28, 1997, 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.
DEAN WITTER DISTRIBUTORS INC.
DISTRIBUTOR
TABLE OF CONTENTS
Prospectus Summary/2
Summary of Fund Expenses/4
Financial Highlights/6
The Fund and its Management/7
Investment Objective and Policies/7
Risk Considerations and Investment Practices/8
Investment Restrictions/15
Purchase of Fund Shares/15
Shareholder Services/26
Redemptions and Repurchases/29
Dividends, Distributions and Taxes/30
Performance Information/31
Additional Information/32
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.
Dean Witter Global Dividend
Growth Securities
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)
<PAGE>
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The The Fund is organized as a Trust, commonly known as a Massachusetts business trust, and is an
Fund open-end, diversified management investment company. The Fund invests primarily in common stock of
issuers worldwide, with a record of paying dividends and the potential for increasing dividends.
- ----------------------------------------------------------------------------------------------------------------------
Shares Offered Shares of beneficial interest with $0.01 par value (see page 32). The Fund offers four Classes of
shares, each with a different combination of sales charges, ongoing fees and other features (see
pages 15-26).
- ----------------------------------------------------------------------------------------------------------------------
Minimum The minimum initial investment for each Class is $1,000 ($100 if the account is opened through
Purchase EasyInvest-SM-). Class D shares are only available to persons investing $5 million or more and to
certain other limited categories of investors. For the purpose of meeting the minimum $5 million
investment for Class D shares, and subject to the $1,000 minimum initial investment for each Class
of the Fund, an investor's existing holdings of Class A shares and shares of funds for which Dean
Witter InterCapital Inc. serves as investment manager ("Dean Witter Funds") that are sold with a
front-end sales charge, and concurrent investments in Class D shares of the Fund and other Dean
Witter Funds that are multiple class funds, will be aggregated. The minimum subsequent investment is
$100 (see page 15).
- ----------------------------------------------------------------------------------------------------------------------
Investment The investment objective of the Fund is to provide reasonable current income and long-term growth of
Objective income and capital.
- ----------------------------------------------------------------------------------------------------------------------
Investment Dean Witter InterCapital Inc. ("InterCapital"), the Investment Manager of the Fund, and its wholly-
Manager owned subsidiary, Dean Witter Services Company Inc., serve in various investment management,
advisory, management and administrative capacities to 100 investment companies and other portfolios
with assets of approximately $96.6 billion at June 30, 1997 (see page 7).
- ----------------------------------------------------------------------------------------------------------------------
Management The Investment Manager receives a monthly fee at the annual rate of 0.75% of daily net assets,
Fee scaled down on assets over $3.5 billion. This fee is higher than that paid by most other investment
companies (see page 7.)
- ----------------------------------------------------------------------------------------------------------------------
Distributor Dean Witter Distributors Inc. (the "Distributor"). The Fund has adopted a distribution plan pursuant
and to Rule 12b-1 under the Investment Company Act (the "12b-1 Plan") with respect to the distribution
Distribution fees paid by the Class A, Class B and Class C shares of the Fund to the Distributor. The entire
Fee 12b-1 fee payable by Class A and a portion of the 12b-1 fee payable by each of Class B and Class C
equal to 0.25% of the average daily net assets of the Class are currently each characterized as a
service fee within the meaning of the National Association of Securities Dealers, Inc. guidelines.
The remaining portion of the 12b-1 fee, if any, is characterized as an asset-based sales charge (see
pages 15 and 24).
- ----------------------------------------------------------------------------------------------------------------------
Alternative Four classes of shares are offered:
Purchase
Arrangements - Class A shares are offered with a front-end sales charge, starting at 5.25% and reduced for larger
purchases. Investments of $1 million or more (and investments by certain other limited categories of
investors) are not subject to any sales charge at the time of purchase but a contingent deferred
sales charge ("CDSC") of 1.0% may be imposed on redemptions within one year of purchase. The Fund is
authorized to reimburse the Distributor for specific expenses incurred in promoting the distribution
of the Fund's Class A shares and servicing shareholder accounts pursuant to the Fund's 12b-1 Plan.
Reimbursement may in no event exceed an amount equal to payments at an annual rate of 0.25% of
average daily net assets of the Class (see pages 15, 19 and 24).
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- Class B shares are offered without a front-end sales charge, but will in most cases be subject to
a CDSC (scaled down from 5.0% to 1.0%) if redeemed within six years after purchase. The CDSC will be
imposed on any redemption of shares if after such redemption the aggregate current value of a Class
B account with the Fund falls below the aggregate amount of the investor's purchase payments made
during the six years preceding the redemption. A different CDSC schedule applies to investments by
certain qualified plans. Class B shares are also subject to a 12b-1 fee assessed at the annual rate
of 1.0% of the lesser of: (a) the average daily net sales of the Fund's Class B shares or (b) the
average daily net assets of Class B. All shares of the Fund held prior to July 28, 1997 have been
designated Class B shares. Shares held before May 1, 1997 will convert to Class A shares in May,
2007. In all other instances, Class B shares convert to Class A shares approximately ten years after
the date of the original purchase (see pages 15, 21 and 24).
- Class C shares are offered without a front-end sales charge, but will in most cases be subject to
a CDSC of 1.0% if redeemed within one year after purchase. The Fund is authorized to reimburse the
Distributor for specific expenses incurred in promoting the distribution of the Fund's Class C
shares and servicing shareholder accounts pursuant to the Fund's 12b-1 Plan. Reimbursement may in no
event exceed an amount equal to payments at an annual rate of 1.0% of average daily net assets of
the Class (see pages 15, 23 and 24).
- Class D shares are offered only to investors meeting an initial investment minimum of $5 million
and to certain other limited categories of investors. Class D shares are offered without a front-end
sales charge or CDSC and are not subject to any 12b-1 fee (see pages 15 and 24).
- ----------------------------------------------------------------------------------------------------------------------
Dividends Dividends from net investment income are paid quarterly. Capital gains, if any, are distributed at
and least annually. The Fund may, however, determine to retain all or part of any net long-term capital
Capital Gains gains in any year for reinvestment. Dividends and capital gains distributions paid on shares of a
Distributions Class are automatically reinvested in additional shares of the same Class at net asset value unless
the shareholder elects to receive cash. Shares acquired by dividend and distribution reinvestment
will not be subject to any sales charge or CDSC (see pages 26 and 30).
- ----------------------------------------------------------------------------------------------------------------------
Redemption Shares are redeemable by the shareholder at net asset value less any applicable CDSC on Class A,
Class B or Class C shares. An account may be involuntarily redeemed 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 29).
- ----------------------------------------------------------------------------------------------------------------------
Risks The net asset value of the Fund's shares will fluctuate with changes in market value of portfolio
securities. It should be recognized that the foreign securities and markets in which the Fund
invests pose different and greater risks than those customarily associated with domestic securities
and their markets. The Fund may invest a portion of its assets in lower rated or unrated convertible
securities. Dividends payable by the Fund will vary in relation to the amounts of dividends and
interest earned on portfolio securities (see pages 8-14).
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
ELSEWHERE
IN THIS PROSPECTUS AND 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 based on
the expenses and fees for the fiscal year ended March 31, 1997.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
- -------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)................................................... 5.25%(1) None None None
Sales Charge Imposed on Dividend Reinvestments..................... None None None None
Maximum Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds)................... None(2) 5.00%(3) 1.00%(4) None
Redemption Fees.................................................... None None None None
Exchange Fee....................................................... None None None None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
- -------------------------------------------------------------------
Management Fees.................................................... 0.72% 0.72% 0.72% 0.72%
12b-1 Fees (5) (6)................................................. 0.25% 0.84% 1.00% None
Other Expenses..................................................... 0.19% 0.19% 0.19% 0.19%
Total Fund Operating Expenses (7).................................. 1.16% 1.75% 1.91% 0.91%
</TABLE>
- ------------
(1) REDUCED FOR PURCHASES OF $25,000 AND OVER (SEE "PURCHASE OF FUND
SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES").
(2) INVESTMENTS THAT ARE NOT SUBJECT TO ANY SALES CHARGE AT THE TIME OF PURCHASE
ARE SUBJECT TO A CDSC OF 1.00% THAT WILL BE IMPOSED ON REDEMPTIONS MADE
WITHIN ONE YEAR AFTER PURCHASE, EXCEPT FOR CERTAIN SPECIFIC CIRCUMSTANCES
(SEE "PURCHASE OF FUND SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A
SHARES").
(3) THE CDSC IS SCALED DOWN TO 1.00% DURING THE SIXTH YEAR, REACHING ZERO
THEREAFTER.
(4) ONLY APPLICABLE TO REDEMPTIONS MADE WITHIN ONE YEAR AFTER PURCHASE (SEE
"PURCHASE OF FUND SHARES-- LEVEL LOAD ALTERNATIVE--CLASS C SHARES").
(5) THE 12B-1 FEE IS ACCRUED DAILY AND PAYABLE MONTHLY. THE ENTIRE 12B-1 FEE
PAYABLE BY CLASS A AND A PORTION OF THE 12B-1 FEE PAYABLE BY EACH OF CLASS B
AND CLASS C EQUAL TO 0.25% OF THE AVERAGE DAILY NET ASSETS OF THE CLASS ARE
CURRENTLY EACH CHARACTERIZED AS A SERVICE FEE WITHIN THE MEANING OF NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD") GUIDELINES AND ARE PAYMENTS
MADE FOR PERSONAL SERVICE AND/OR MAINTENANCE OF SHAREHOLDER ACCOUNTS. THE
REMAINDER OF THE 12B-1 FEE, IF ANY, IS AN ASSET-BASED SALES CHARGE, AND IS A
DISTRIBUTION FEE PAID TO THE DISTRIBUTOR TO COMPENSATE IT FOR THE SERVICES
PROVIDED AND THE EXPENSES BORNE BY THE DISTRIBUTOR AND OTHERS IN THE
DISTRIBUTION OF THE FUND'S SHARES (SEE "PURCHASE OF FUND SHARES--PLAN OF
DISTRIBUTION").
(6) UPON CONVERSION OF CLASS B SHARES TO CLASS A SHARES, SUCH SHARES WILL BE
SUBJECT TO THE LOWER 12B-1 FEE APPLICABLE TO CLASS A SHARES. NO SALES CHARGE
IS IMPOSED AT THE TIME OF CONVERSION OF CLASS B SHARES TO CLASS A SHARES.
CLASS C SHARES DO NOT HAVE A CONVERSION FEATURE AND, THEREFORE, ARE SUBJECT
TO AN ONGOING 1.00% DISTRIBUTION FEE (SEE "PURCHASE OF FUND
SHARES--ALTERNATIVE PURCHASE ARRANGEMENTS").
(7) THERE WERE NO OUTSTANDING SHARES OF CLASS A, CLASS C OR CLASS D PRIOR TO THE
DATE OF THIS PROSPECTUS. ACCORDINGLY, "TOTAL FUND OPERATING EXPENSES," AS
SHOWN ABOVE WITH RESPECT TO THOSE CLASSES, ARE BASED UPON THE SUM OF 12B-1
FEES, MANAGEMENT FEES AND ESTIMATED "OTHER EXPENSES."
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXAMPLES 1 YEAR 3 YEARS 5 YEARS
- ---------------------------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) a 5%
annual return and (2) redemption at the end of each time period:
Class A....................................................................... $ 64 $ 87 $ 113
Class B....................................................................... $ 68 $ 85 $ 115
Class C....................................................................... $ 29 $ 60 $ 103
Class D....................................................................... $ 9 $ 29 $ 50
You would pay the following expenses on the same $1,000 investment assuming no
redemption at the end of the period:
Class A....................................................................... $ 64 $ 87 $ 113
Class B....................................................................... $ 18 $ 55 $ 95
Class C....................................................................... $ 19 $ 60 $ 103
Class D....................................................................... $ 9 $ 29 $ 50
<CAPTION>
EXAMPLES 10 YEARS
- ---------------------------------------------------------------------------------- -----------
<S> <C>
You would pay the following expenses on a $1,000 investment assuming (1) a 5%
annual return and (2) redemption at the end of each time period:
Class A....................................................................... $ 186
Class B....................................................................... $ 206
Class C....................................................................... $ 223
Class D....................................................................... $ 112
You would pay the following expenses on the same $1,000 investment assuming no
redemption at the end of the period:
Class A....................................................................... $ 186
Class B....................................................................... $ 206
Class C....................................................................... $ 223
Class D....................................................................... $ 112
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF EACH CLASS 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," "Purchase of Fund Shares--Plan of Distribution"
and "Redemptions and Repurchases."
Long-term shareholders of Class B and Class C may pay more in sales charges,
including distribution fees, than the economic equivalent of the maximum
front-end sales charges permitted by the NASD.
5
<PAGE>
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 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. All shares of the Fund held prior to July 28, 1997 have been
designated Class B shares.
<TABLE>
<CAPTION>
FOR THE
PERIOD
JUNE 30,
1993*
FOR THE YEAR ENDED MARCH 31, THROUGH
------------------------------ MARCH
1997 1996 1995 31, 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period.......................... $ 12.86 $ 11.41 $ 10.81 $ 10.00
-------- -------- -------- --------
Net investment income............ 0.12 0.13 0.14 0.05
Net realized and unrealized
gain............................ 1.44 1.96 0.88 0.84
-------- -------- -------- --------
Total from investment
operations...................... 1.56 2.09 1.02 0.89
-------- -------- -------- --------
Less dividends and distributions
from:
Net investment income.......... (0.13) (0.15) (0.14) (0.05)
Net realized gain.............. (0.99) (0.49) (0.28) (0.03)
-------- -------- -------- --------
Total dividends and
distributions................... (1.12) (0.64) (0.42) (0.08)
-------- -------- -------- --------
Net asset value, end of period... $ 13.30 $ 12.86 $ 11.41 $ 10.81
-------- -------- -------- --------
-------- -------- -------- --------
TOTAL INVESTMENT RETURN+........... 12.58% 18.77% 9.60% 8.89%(1)
Ratios to average net assets:
Expenses....................... 1.75% 1.85% 1.97% 2.03%(2)
Net investment income.......... 0.93% 1.05% 1.22% 0.66%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions........................ $3,038 $2,434 $1,854 $1,121
Portfolio turnover rate.......... 40% 40% 32% 21%(1)
Average commission rate paid..... $0.0289 $0.0311 -- --
</TABLE>
- ---------------
* COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON THE NET
ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
6
<PAGE>
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
Dean Witter Global Dividend Growth Securities (the "Fund") is an open-end,
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 January 12, 1993.
Dean Witter InterCapital, Inc. ("InterCapital" or the "Investment Manager"),
whose address is Two World Trade Center, New York, New York 10048, is the Fund's
Investment Manager. The Investment Manager, which was incorporated in July,
1992, is a wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover &
Co., a preeminent global financial services firm that maintains leading market
positions in each of its three primary businesses--securities, asset management
and credit services.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to 100 investment companies, thirty of which are
listed on the New York Stock Exchange, with combined total assets of
approximately $93.1 billion as of June 30, 1997. The Investment Manager also
manages portfolios of pension plans, other institutions and individuals which
aggregated approximately $3.5 billion at such date.
The Fund has retained the Investment Manager to provide administrative
services, manage its business affairs and manage the investment of the Fund's
assets, including the placing of orders for the purchase and sale of portfolio
securities. InterCapital has retained Dean Witter Services Company Inc. to
perform the aforementioned administrative services to the Fund.
The Fund's Trustees review the various services provided by the Investment
Manager to ensure that the Fund's general investment policies and programs are
being properly carried out and that administrative services are being provided
to the Fund in a satisfactory manner.
As full compensation for the services and facilities furnished to the Fund
and for expenses of the Fund assumed by the Investment Manager, the Fund pays
the Investment Manager monthly compensation calculated daily by applying the
annual rate of 0.75% to the Fund's net assets, scaled down at various asset
levels to 0.65% on assets over $3.5 billion. This fee is higher than that paid
by most other investment companies.
For the fiscal year ended March 31, 1997, the Fund accrued total
compensation to the Investment Manager amounting to 0.72% of the Fund's average
daily net assets and the Fund's total expenses amounted to 1.75% of the Fund's
average daily net assets.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is to provide reasonable current income
and long-term growth of income and capital. 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
primarily through investments in common stock of issuers worldwide, with a
record of paying dividends and the potential for increasing dividends.
The Fund will invest at least 65% of its total assets in dividend-paying
equity securities issued by issuers located in various countries around the
world. The Fund's investment portfolio will also be invested in at least three
separate countries.
The Fund will maintain a flexible investment policy and, based on a
worldwide investment strategy, will invest in a diversified portfolio of
securities of companies located throughout the world. The Investment Manager
will seek those companies
7
<PAGE>
which have, in its opinion, a strong record of earnings. The percentage of the
Fund's assets invested in particular geographic sectors will shift from time to
time in accordance with the judgement of the Investment Manager.
Up to 35% of the value of the Fund's total assets may be invested in: (a)
convertible debt securities, convertible preferred securities, U.S. Government
securities (securities issued or guaranteed as to principal and interest by the
United States or its agencies and instrumentalities), fixed-income securities
issued by foreign governments and international organizations, investment grade
corporate debt securities and/or money market instruments when, in the opinion
of the Investment Manager, the projected total return on such securities is
equal to or greater than the expected total return on equity securities or when
such holdings might be expected to reduce the volatility of the portfolio (for
purposes of this provision, the term "total return" means the difference between
the cost of a security and the aggregate of its market value and dividends
received); or (b) in money market instruments under any one or more of the
following circumstances: (i) pending investment of proceeds of sale of the
Fund's shares or of portfolio securities; (ii) pending settlement of purchases
of portfolio securities; or (iii) to maintain liquidity for the purpose of
meeting anticipated redemptions. There are no minimum rating or quality
requirements with respect to convertible securities in which the Fund may invest
and, thus, all or some of such securities may be below investment grade.
The term investment grade consists of debt instruments rated Baa or higher
by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by Standard &
Poor's Corporation ("S&P") or, if not rated, determined to be of comparable
quality by the Investment Manager. Investments in securities rated either Baa by
Moody's or BBB by S&P have speculative characteristics and, therefore, changes
in economic conditions or other circumstances are more likely to weaken their
capacity to make principal and interest payments than would be the case with
investments in securities with higher credit ratings. If a debt instrument held
by the Fund is subsequently downgraded below investment grade by a rating
agency, the Fund will retain such security in its portfolio until the Investment
Manager determines that it is practicable to sell the security without undue
market or tax consequences to the Fund. In the event that such downgraded
securities constitute 5% or more of the Fund's net assets, the Investment
Manager will sell immediately sufficient securities to reduce the total to below
5%.
Notwithstanding the Fund's investment objective of seeking reasonable
current income and long-term growth of income and capital, the Fund may, for
defensive purposes, without limitation, invest in: obligations of the United
States Government, its agencies or instrumentalities; cash and cash equivalents
in major currencies; repurchase agreements; zero coupon securities; money market
instruments; and commercial paper.
The Fund may also invest in securities of foreign issuers in the form of
American Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") or
other similar securities convertible into securities of foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically issued
by a United States bank or trust company evidencing ownership of the underlying
securities. EDRs are European receipts evidencing a similar arrangement.
Generally, ADRs, in registered form, are designed for use in the United States
securities markets and EDRs, in bearer form, are designed for use in European
securities markets.
RISK CONSIDERATIONS AND INVESTMENT PRACTICES
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
8
<PAGE>
exchange between the currencies of different 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. The foreign currency transactions of
the Fund will be conducted on a spot basis or through forward contracts
(described below). The Fund will incur certain costs in connection with these
currency transactions.
Investments in foreign securities will also occasion risks relating to
political and economic developments abroad, including the possibility of
expropriations or confiscatory taxation, limitations on the use or transfer of
Fund assets and any effects of foreign social, economic or political
instability. 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.
Certain of the foreign markets in which the Fund may invest will be emerging
markets. These new and incompletely formed markets will have increased risk
levels above those occasioned by investing in foreign markets generally. The
types of these risks are set forth above. The Fund's management will take
cognizance of these risks in allocating any of the Fund's investments in either
fixed-income or equity securities issued by issuers in emerging market
countries.
LOWER RATED CONVERTIBLE SECURITIES. A portion of the convertible securities
in which the Fund may invest will generally be below investment grade.
Securities below investment grade are the equivalent of high yield, high risk
bonds, commonly known as "junk bonds." Investment grade is generally considered
to be debt securities rated BBB or higher by S&P or Baa or higher by Moody's.
Convertible securities rated Baa by Moody's or BBB by S&P have speculative
characteristics greater than those of more highly rated convertible securities,
while con-
vertible securities rated Ba or BB or lower by Moody's and S&P, respectively,
are considered to be speculative investments. The Fund will not invest in
convertible securities that are rated lower than B
9
<PAGE>
by S&P or Moody's or, if not rated, determined to be of comparable quality by
the Investment Manager. The Fund will not invest in convertible securities that
are in default in payment of principal or interest. The ratings of convertible
securities by Moody's and S&P are a generally accepted barometer of credit risk.
However, as the creditworthiness of issuers of lower-rated securities is more
problematical than that of issuers of higher-rated securities, the achievement
of the Fund's investment objective will be more dependent upon the Investment
Manager's own credit analysis than would be the case with a mutual fund
investing primarily in higher quality securities. The Investment Manager will
utilize a security's credit rating as simply one indication of an issuer's
creditworthiness and will principally rely upon its own analysis of any security
currently held by the Fund or potentially purchasable by the Fund for its
portfolio.
Because of the special nature of the Fund's permitted investments in lower
rated convertible securities, the Investment Manager must take account of
certain special considerations in assessing the risks associated with such
investments. Historically, the prices of lower rated 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 convertible 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 lower rated
securities and a corresponding volatility in the net asset value of a share of
the Fund.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may enter into forward
foreign currency exchange contracts ("forward contracts") in connection with its
foreign securities investments.
A forward contract involves an obligation to purchase or sell a currency at
a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
The Fund may enter into forward contracts as a hedge against fluctuations in
future foreign exchange rates.
The Fund will enter into forward contracts under various circumstances. When
the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may, for example, desire to "lock in" the
price of the security in U.S. dollars or some other foreign currency which the
Fund is temporarily holding in its portfolio. By entering into a forward
contract for the purchase or sale, for a fixed amount of dollars or other
currency, of the amount of foreign currency involved in the underlying security
transactions, the Fund will be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar or
other currency which is being used for the security purchase (by the Fund or the
counterparty) and the foreign currency in which the security is denominated
during the period between the date on which the security is purchased or sold
and the date on which payment is made or received.
At other times, when, for example, the Fund's Investment Manager believes
that the currency of a particular foreign country may suffer a substantial
decline against the U.S. dollar or some other foreign currency, the Fund may
enter into a forward contract to sell, for a fixed amount of dollars or other
currency, the amount of foreign currency approximating the value of some or all
of the Fund's securities holdings (or securities which the Fund has purchased
for its portfolio) denominated in such foreign currency. Under identical
circumstances, the Fund may enter into a forward contract to sell, for a fixed
amount of U.S. dollars or other currency, an amount of foreign currency other
than the currency
10
<PAGE>
in which the securities to be hedged are denominated approximating the value of
some or all of the portfolio securities to be hedged. This method of hedging,
called "cross-hedging," will be selected by the Investment Manager when it is
determined that the foreign currency in which the portfolio securities are
denominated has insufficient liquidity or is trading at a discount as compared
with some other foreign currency with which it tends to move in tandem.
In addition, when the Fund's Investment Manager anticipates purchasing
securities at some time in the future, and wishes to lock in the current
exchange rate of the currency in which those securities are denominated against
the U.S. dollar or some other foreign currency, the Fund may enter into a
forward contract to purchase an amount of currency equal to some or all of the
value of the anticipated purchase, for a fixed amount of U.S. dollars or other
currency. The Fund may, however, close out the forward contract without
purchasing the security which was the subject of the "anticipatory" hedge.
In all of the above circumstances, if the currency in which the Fund
securities holdings (or anticipated portfolio securities) are denominated rises
in value with respect to the currency which is being purchased (or sold), then
the Fund will have realized fewer gains than had the Fund not entered into the
forward contracts. Moreover, the precise matching of the forward contract
amounts and the value of the securities involved will not generally be possible,
since the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The Fund is
not required to enter into such transactions with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate by
the Investment Manager. The Fund generally will not enter into a forward
contract with a term of greater than one year, although it may enter into
forward contracts for periods of up to five years. The Fund may be limited in
its ability to enter into hedging transactions involving forward contracts by
the Internal Revenue Code (the "Code") requirements relating to qualifications
as a regulated investment company (see "Dividends, Distributions and Taxes").
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 government securities or other 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 to minimize such 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 or delayed delivery basis may increase
the volatility of the Fund's net asset value.
11
<PAGE>
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.
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 Investment Manager,
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. Investing in Rule 144A
securities could have the effect of increasing the level of Fund illiquidity to
the extent the Fund, at a particular point in time, may be unable to find
qualified institutional buyers interested in purchasing such securities.
INVESTMENT IN OTHER INVESTMENT VEHICLES. Under the Investment Company Act of
1940, as amended (the "1940 Act"), the Fund generally may invest up to 10% of
its total assets in the aggregate in shares of other investment companies and up
to 5% of its total assets in any one investment company. The Fund may not own
more than 3% of the outstanding voting stock of any investment company. 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
12
<PAGE>
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 which are denominated in either U.S. dollars or foreign currencies
and on the U.S. dollar and foreign currencies, which are or may in the future be
listed on several U.S. and foreign securities exchanges or are written in
over-the-counter transactions ("OTC options"). 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 and foreign currencies, without limit, in order to hedge
against the decline in the value of a security or currency in which such
security is denominated (although such hedge is limited to the value of the
premium received), to close out long call option positions and to generate
income. The Fund may write covered put options, under which the Fund incurs an
obligation to buy the security (or currency) 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.
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 call options to
close out a covered call position or to protect against an increase in the price
of a security it anticipates purchasing or, in the case of call options on a
foreign currency, to hedge against an adverse exchange rate change 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 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 purchase and sell futures contracts that are currently traded,
or may in the future be traded, on U.S. and foreign commodity exchanges on
underlying portfolio securities, on any currency ("currency" futures), on U.S.
and foreign fixed-income securities ("interest rate" futures) and on such
indexes of U.S. or foreign equity or fixed-income securities as may exist or
come into being ("index" futures). The Fund may 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. The Fund may 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 (or the currency in which
they are denominated.) As a futures contract purchaser, the Fund incurs an
obligation to take delivery of a specified amount of the obligation underlying
the contract at a specified time in the future for a specified price. As a
seller of a futures contract, the Fund incurs an obligation to deliver the
specified amount of the underlying obligation at a specified time in return for
an agreed upon price.
13
<PAGE>
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.
Futures contracts and options transactions may be considered speculative in
nature and may involve greater risks than those customarily assumed by other
investment companies which do not invest in such instruments. One such risk is
that the Investment Manager 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 U.S. dollar cash prices of the Fund's
portfolio securities and their denominated currencies. See the Statement of
Additional Information for a further discussion of risks.
PORTFOLIO MANAGEMENT
The Fund's portfolio is actively managed by its Investment Manager with a
view to achieving the Fund's investment objective. In determining which
securities to purchase for the Fund or hold in the Fund's portfolio, the
Investment Manager will rely on information from various sources, including
research, analysis and appraisals of brokers and dealers, including Dean Witter
Reynolds Inc. ("DWR"), and other broker-dealer affiliates of the Investment
Manager, and others regarding economic developments and interest rate trends,
and the Investment Manager's own analysis of factors it deems relevant.
The Fund is managed within InterCapital's Growth and Income Group, which
manages 22 equity funds and fund portfolios, with approximately $27.4 billion in
assets at June 30, 1997. Paul D. Vance, Senior Vice President of InterCapital
and a member of InterCapital's Growth and Income Group, has been the primary
portfolio manager of the Fund since its inception. Mr. Vance has been managing
portfolios comprised of equity securities at InterCapital for over five years.
Although the Fund does not engage in substantial short-term trading as a
means of achieving its investment objective, it may sell portfolio securities
without regard to the length of time they have been held, in accordance with the
investment policies described earlier. Orders for transactions in portfolio
securities are placed for the Fund with a number of brokers and dealers,
including DWR and other brokers and dealers that are affiliates of the
Investment Manager. The Fund may incur brokerage commissions on transactions
conducted through such affiliates. Pursuant to an order of the Securities and
Exchange Commission, the Fund may effect principal transactions in certain money
market instruments with DWR.
14
<PAGE>
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
The investment restrictions listed below are among the restrictions which
have been adopted by the Fund as fundamental policies. Under the 1940 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 1940 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. As to 75% of its total assets, invest more than 5% of the value of its
total assets in the securities of any one issuer (other than obligations issued
or guaranteed by the United States Government, its agencies or
instrumentalities).
2. 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 or its agencies or
instrumentalities.
3. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three years of
continuous operation. This restriction shall not apply to any obligation issued
or guaranteed by the United States Government, its agencies or
instrumentalities.
4. As to 75% of its total assets, purchase more than 10% of the voting
securities, or more than 10% of any class of securities, of any issuer.
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
The Fund offers each Class of its shares for sale to the public on a
continuous basis. Pursuant to a Distribution Agreement between the Fund and Dean
Witter Distributors Inc. (the "Distributor"), an affiliate of the Investment
Manager, shares of the Fund are distributed by the Distributor and offered by
DWR and other dealers which have entered into 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 Fund offers four classes of shares (each, a "Class"). Class A shares are
sold to investors with an initial sales charge that declines to zero for larger
purchases; however, Class A shares sold without an initial sales charge are
subject to a contingent deferred sales charge ("CDSC") of 1.0% if redeemed
within one year of purchase, except for certain specific circumstances. Class B
shares are sold without an initial sales charge but are subject to a CDSC
(scaled down from 5.0% to 1.0%) payable upon most redemptions within six years
after purchase. (Class B shares purchased by certain qualified
employer-sponsored benefit plans are subject to a CDSC scaled down from 2.0% to
1.0% if redeemed within three years after purchase.) Class C shares are sold
without an initial sales charge but are subject to a CDSC of 1.0% on most
redemptions made within one year after purchase. Class D shares are sold without
an initial sales charge or CDSC and are available only to investors meeting an
initial investment minimum of $5 million, and to certain other limited
categories of investors. At the discretion of the Board of Trustees of the Fund,
Class A shares may be sold to categories of investors in addition to those set
forth in this prospectus at net asset value
15
<PAGE>
without a front-end sales charge, and Class D shares may be sold to certain
other categories of investors, in each case as may be described in the then
current prospectus of the Fund. See "Alternative Purchase
Arrangements--Selecting a Particular Class" for a discussion of factors to
consider in selecting which Class of shares to purchase.
The minimum initial purchase is $1,000 for each Class of shares, although
Class D shares are only available to persons investing $5 million or more and to
certain other limited categories of investors. For the purpose of meeting the
minimum $5 million initial investment for Class D shares, and subject to the
$1,000 minimum initial investment for each Class of the Fund, an investor's
existing holdings of Class A shares of the Fund and other Dean Witter Funds that
are multiple class funds ("Dean Witter Multi-Class Funds") and shares of Dean
Witter Funds sold with a front-end sales charge ("FSC Funds") and concurrent
investments in Class D shares of the Fund and other Dean Witter Multi-Class
Funds will be aggregated. Subsequent purchases of $100 or more may be made by
sending a check, payable to Dean Witter Global Dividend Growth Securities,
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 other
Selected Broker-Dealer. When purchasing shares of the Fund, investors must
specify whether the purchase is for Class A, Class B, Class C or Class D shares.
If no Class is specified, the Transfer Agent will not process the transaction
until the proper Class is identified. 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 $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 requested 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. While no sales charge is imposed at the time shares are
purchased, a contingent deferred sales charge may be imposed at the time of
redemption (see "Redemptions and Repurchases"). Sales personnel of a Selected
Broker-Dealer are compensated for selling shares of the Fund at the time of
their sale 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 non-cash compensation in the form of trips to educational and/or
business seminars and merchandise as special sales incentives. The Fund and the
Distributor reserve the right to reject any purchase orders.
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers several Classes of shares to investors designed to provide
them with the flexibility of selecting an investment best suited to their needs.
The general public is offered three Classes of shares: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales charges
and rate of expenses to which they are subject. A fourth Class of shares, Class
D shares, is offered only to limited categories of investors (see "No Load
Alternative--Class D Shares" below).
16
<PAGE>
Each Class A, Class B, Class C or Class D share of the Fund represents an
identical interest in the investment portfolio of the Fund except that Class A,
Class B and Class C shares bear the expenses of the ongoing shareholder service
fees, Class B and Class C shares bear the expenses of the ongoing distribution
fees and Class A, Class B and Class C shares which are redeemed subject to a
CDSC bear the expense of the additional incremental distribution costs resulting
from the CDSC applicable to shares of those Classes. The ongoing distribution
fees that are imposed on Class A, Class B and Class C shares will be imposed
directly against those Classes and not against all assets of the Fund and,
accordingly, such charges against one Class will not affect the net asset value
of any other Class or have any impact on investors choosing another sales charge
option. See "Plan of Distribution" and "Redemptions and Repurchases."
Set forth below is a summary of the differences between the Classes and the
factors an investor should consider when selecting a particular Class. This
summary is qualified in its entirety by detailed discussion of each Class that
follows this summary.
CLASS A SHARES. Class A shares are sold at net asset value plus an initial
sales charge of up to 5.25%. The initial sales charge is reduced for certain
purchases. Investments of $1 million or more (and investments by certain other
limited categories of investors) are not subject to any sales charges at the
time of purchase but are subject to a CDSC of 1.0% on redemptions made within
one year after purchase, except for certain specific circumstances. Class A
shares are also subject to a 12b-1 fee of up to 0.25% of the average daily net
assets of the Class. See "Initial Sales Charge Alternative--Class A Shares."
CLASS B SHARES. Class B shares are offered at net asset value with no
initial sales charge but are subject to a CDSC (scaled down from 5.0% to 1.0%)
if redeemed within six years of purchase. (Class B shares purchased by certain
qualified employer-sponsored benefit plans are subject to a CDSC scaled down
from 2.0% to 1.0% if redeemed within three years after purchase.) This CDSC may
be waived for certain redemptions. Class B shares are also subject to an annual
12b-1 fee of 1.0% of the lesser of: (a) the average daily aggregate gross sales
of the Fund's Class B shares since the inception of the Fund (not including
reinvestments of dividends or capital gains distributions), less the average
daily aggregate net asset value of the Fund's Class B shares redeemed since the
Fund's inception upon which a CDSC has been imposed or waived, or (b) the
average daily net assets of Class B. The Class B shares' distribution fee will
cause that Class to have higher expenses and pay lower dividends than Class A or
Class D shares.
After approximately ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund, based on the relative net asset
values of the shares of the two Classes on the conversion date. In addition, a
certain portion of Class B shares that have been acquired through the
reinvestment of dividends and distributions will be converted at that time. See
"Contingent Deferred Sales Charge Alternative--Class B Shares."
CLASS C SHARES. Class C shares are sold at net asset value with no initial
sales charge but are subject to a CDSC of 1.0% on redemptions made within one
year after purchase. This CDSC may be waived for certain redemptions. They are
subject to an annual 12b-1 fee of up to 1.0% of the average daily net assets of
the Class C shares. The Class C shares' distribution fee may cause that Class to
have higher expenses and pay lower dividends than Class A or Class D shares. See
"Level Load Alternative--Class C Shares."
CLASS D SHARES. Class D shares are available only to limited categories of
investors (see "No Load Alternative--Class D Shares" below). Class D shares are
sold at net asset value with no initial sales charge or CDSC. They are not
subject to any 12b-1 fees. See "No Load Alternative--Class D Shares."
SELECTING A PARTICULAR CLASS. In deciding which Class of Fund shares to
purchase, investors
17
<PAGE>
should consider the following factors, as well as any other relevant facts and
circumstances:
The decision as to which Class of shares is more beneficial to an investor
depends on the amount and intended length of his or her investment. Investors
who prefer an initial sales charge alternative may elect to purchase Class A
shares. Investors qualifying for significantly reduced or, in the case of
purchases of $1 million or more, no initial sales charges may find Class A
shares particularly attractive because similar sales charge reductions are not
available with respect to Class B or Class C shares. Moreover, Class A shares
are subject to lower ongoing expenses than are Class B or Class C shares over
the term of the investment. As an alternative, Class B and Class C shares are
sold without any initial sales charge so the entire purchase price is
immediately invested in the Fund. Any investment return on these additional
investment amounts may partially or wholly offset the higher annual expenses of
these Classes. Because the Fund's future return cannot be predicted, however,
there can be no assurance that this would be the case.
Finally, investors should consider the effect of the CDSC period and any
conversion rights of the Classes in the context of their own investment time
frame. For example, although Class C shares are subject to a significantly lower
CDSC upon redemptions, they do not, unlike Class B shares, convert into Class A
shares after approximately ten years, and, therefore, are subject to an ongoing
12b-1 fee of 1.0% (rather than the 0.25% fee applicable to Class A shares) for
an indefinite period of time. Thus, Class B shares may be more attractive than
Class C shares to investors with longer term investment outlooks. Other
investors, however, may elect to purchase Class C shares if, for example, they
determine that they do not wish to be subject to a front-end sales charge and
they are uncertain as to the length of time they intend to hold their shares.
For the purpose of meeting the $5 million minimum investment amount for
Class D shares, holdings of Class A shares in all Dean Witter Multi-Class Funds,
shares of FSC Funds and shares of Dean Witter Funds for which such shares have
been exchanged will be included together with the current investment amount.
Sales personnel may receive different compensation for selling each Class of
shares. Investors should understand that the purpose of a CDSC is the same as
that of the initial sales charge in that the sales charges applicable to each
Class provide for the financing of the distribution of shares of that Class.
Set forth below is a chart comparing the sales charge, 12b-1 fees and
conversion options applicable to each Class of shares:
<TABLE>
<CAPTION>
<C> <S> <C> <C>
CONVERSION
CLASS SALES CHARGE 12B-1 FEE FEATURE
A Maximum 5.25% 0.25% No
initial sales
charge reduced
for purchases
of $25,000 and
over; shares
sold without an
initial sales
charge
generally
subject to a
1.0% CDSC
during first
year.
B Maximum 5.0% 1.0% B shares
CDSC during the convert to A
first year shares
decreasing to 0 automatically
after six years after
approximately
ten years
C 1.0% CDSC 1.0% No
during first
year
D None None No
</TABLE>
See "Purchase of Fund Shares" and "The Fund and its Management" for a
complete description of the sales charges and service and distribution fees for
each Class of shares and "Determination of Net Asset Value," "Dividends,
Distributions and Taxes" and "Shareholder Services--Exchange Privilege" for
other differences between the Classes of shares.
18
<PAGE>
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
Class A shares are sold at net asset value plus an initial sales charge. In
some cases, reduced sales charges may be available, as described below.
Investments of $1 million or more (and investments by certain other limited
categories of investors) are not subject to any sales charges at the time of
purchase but are subject to a CDSC of 1.0% on redemptions made within one year
after purchase (calculated from the last day of the month in which the shares
were purchased), except for certain specific circumstances. The CDSC will be
assessed on an amount equal to the lesser of the current market value or the
cost of the shares being redeemed. The CDSC will not be imposed (i) in the
circumstances set forth below in the section "Contingent Deferred Sales Charge
Alternative--Class B Shares--CDSC Waivers," except that the references to six
years in the first paragraph of that section shall mean one year in the case of
Class A shares, and (ii) in the circumstances identified in the section
"Additional Net Asset Value Purchase Options" below. Class A shares are also
subject to an annual 12b-1 fee of up to 0.25% of the average daily net assets of
the Class.
The offering price of Class A shares will be the net asset value per share
next determined following receipt of an order (see "Determination of Net Asset
Value" below), plus a sales charge (expressed as a percentage of the offering
price) on a single transaction as shown in the following table:
<TABLE>
<CAPTION>
SALES CHARGE
------------------------------------------
PERCENTAGE OF APPROXIMATE
AMOUNT OF SINGLE PUBLIC OFFERING PERCENTAGE OF AMOUNT
TRANSACTION PRICE INVESTED
- ------------------------- ------------------- ---------------------
<S> <C> <C>
Less than $25,000........ 5.25% 5.54%
$25,000 but less
than $50,000........ 4.75% 4.99%
$50,000 but less
than $100,000....... 4.00% 4.17%
$100,000 but less
than $250,000....... 3.00% 3.09%
$250,000 but less
than $1 million..... 2.00% 2.04%
$1 million and over...... 0 0
</TABLE>
Upon notice to all Selected Broker-Dealers, the Distributor may reallow up
to the full applicable sales charge as shown in the above schedule during
periods specified in such notice. During periods when 90% or more of the sales
charge is reallowed, such Selected Broker-Dealers may be deemed to be
underwriters as that term is defined in the Securities Act of 1933.
The above schedule of sales charges is applicable to purchases in a single
transaction by, among others: (a) an individual; (b) an individual, his or her
spouse and their children under the age of 21 purchasing shares for his, her or
their own accounts; (c) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account; (d) a pension, profit-sharing
or other employee benefit plan qualified or non-qualified under Section 401 of
the Internal Revenue Code; (e) tax-exempt organizations enumerated in Section
501(c)(3) or (13) of the Internal Revenue Code; (f) employee benefit plans
qualified under Section 401 of the Internal Revenue Code of a single employer or
of employers who are "affiliated persons" of each other within the meaning of
Section 2(a)(3)(c) of the Act; and for investments in Individual Retirement
Accounts of employees of a single employer through Systematic Payroll Deduction
plans; or (g) any other organized group of persons, whether incorporated or not,
provided the organization has been in existence for at least six months and has
some purpose other than the purchase of redeemable securities of a registered
investment company at a discount.
COMBINED PURCHASE PRIVILEGE. Investors may have the benefit of reduced
sales charges in accordance with the above schedule by combining purchases of
Class A shares of the Fund in single transactions with the purchase of Class A
shares of other Dean Witter Multi-Class Funds and shares of FSC Funds. The sales
charge payable on the purchase of the Class A shares of the Fund, the Class A
shares of the other Dean Witter Multi-Class Funds and the shares of the FSC
Funds will be at their
19
<PAGE>
respective rates applicable to the total amount of the combined concurrent
purchases of such shares.
RIGHT OF ACCUMULATION. The above persons and entities may benefit from a
reduction of the sales charges in accordance with the above schedule if the
cumulative net asset value of Class A shares purchased in a single transaction,
together with shares of the Fund and other Dean Witter Funds previously
purchased at a price including a front-end sales charge (including shares of the
Fund and other Dean Witter Funds acquired in exchange for those shares, and
including in each case shares acquired through reinvestment of dividends and
distributions), which are held at the time of such transaction, amounts to
$25,000 or more. If such investor has a cumulative net asset value of shares of
FSC Funds and Class A and Class D shares equal to at least $5 million, such
investor is eligible to purchase Class D shares subject to the $1,000 minimum
initial investment requirement of that Class of the Fund. See "No Load
Alternative-- Class D Shares" below.
The Distributor must be notified by DWR or a Selected Broker-Dealer or the
shareholder at the time a purchase order is placed that the purchase qualifies
for the reduced charge under the Right of Accumulation. Similar notification
must be made in writing by the dealer or shareholder when such an order is
placed by mail. The reduced sales charge will not be granted if: (a) such
notification is not furnished at the time of the order; or (b) a review of the
records of the Selected Broker-Dealer or the Transfer Agent fails to confirm the
investor's represented holdings.
LETTER OF INTENT. The foregoing schedule of reduced sales charges will also
be available to investors who enter into a written Letter of Intent providing
for the purchase, within a thirteen-month period, of Class A shares of the Fund
from DWR or other Selected Broker-Dealers. The cost of Class A shares of the
Fund or shares of other Dean Witter Funds which were previously purchased at a
price including a front-end sales charge during the 90-day period prior to the
date of receipt by the Distributor of the Letter of Intent, or of Class A shares
of the Fund or shares of other Dean Witter Funds acquired in exchange for shares
of such funds purchased during such period at a price including a front-end
sales charge, which are still owned by the shareholder, may also be included in
determining the applicable reduction.
ADDITIONAL NET ASSET VALUE PURCHASE OPTIONS. In addition to investments of
$1 million or more, Class A shares also may be purchased at net asset value by
the following:
(1) trusts for which Dean Witter Trust Company ("DWTC") or Dean Witter Trust
FSB ("DWTFSB") (each of which is an affiliate of the Investment Manager)
provides discretionary trustee services;
(2) persons participating in a fee-based program approved by the Distributor,
pursuant to which such persons pay an asset based fee for services in the nature
of investment advisory or administrative services (such investments are subject
to all of the terms and conditions of such programs, which may include
termination fees and restrictions on transferability of Fund shares);
(3) retirement plans qualified under Section 401(k) of the Internal Revenue
Code ("401(k) plans") and other employer-sponsored plans qualified under Section
401(a) of the Internal Revenue Code with at least 200 eligible employees and for
which DWTC or DWTFSB serves as Trustee or the 401(k) Support Services Group of
DWR serves as recordkeeper;
(4) 401(k) plans and other employer-sponsored plans qualified under Section
401(a) of the Internal Revenue Code for which DWTC or DWTFSB serves as Trustee
or the 401(k) Support Services Group of DWR serves as recordkeeper whose Class B
shares have converted to Class A shares, regardless of the plan's asset size or
number of eligible employees;
(5) investors who are clients of a Dean Witter account executive who joined
Dean Witter from another investment firm within six months prior to
20
<PAGE>
the date of purchase of Fund shares by such investors, if the shares are being
purchased with the proceeds from a redemption of shares of an open-end
proprietary mutual fund of the account executive's previous firm which imposed
either a front-end or deferred sales charge, provided such purchase was made
within sixty days after the redemption and the proceeds of the redemption had
been maintained in the interim in cash or a money market fund; and
(6) other categories of investors, at the discretion of the Board, as
disclosed in the then current prospectus of the Fund.
No CDSC will be imposed on redemptions of shares purchased pursuant to
paragraphs (1), (2) or (5), above.
For further information concerning purchases of the Fund's shares, contact
DWR or another Selected Broker-Dealer or consult the Statement of Additional
Information.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE-- CLASS B SHARES
Class B shares are sold at net asset value next determined without an
initial sales charge so that the full amount of an investor's purchase payment
may be immediately invested in the Fund. A CDSC, however, will be imposed on
most Class B shares redeemed within six years after purchase. The CDSC will be
imposed on any redemption of shares if after such redemption the aggregate
current value of a Class B account with the Fund falls below the aggregate
amount of the investor's purchase payments for Class B shares made during the
six years (or, in the case of shares held by certain employer-sponsored benefit
plans, three years) preceding the redemption. In addition, Class B shares are
subject to an annual 12b-1 fee of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's Class B shares since the inception of the
Fund (not including reinvestments of dividends or capital gains distributions),
less the average daily aggregate net asset value of the Fund's Class B shares
redeemed since the Fund's inception upon which a CDSC has been imposed or
waived, or (b) the average daily net assets of Class B.
Except as noted below, Class B shares of the Fund which are held for six
years or more after purchase (calculated from the last day of the month in which
the shares were purchased) will not be subject to any CDSC upon redemption.
Shares redeemed earlier than six years after purchase may, however, be subject
to a CDSC which will be a percentage of the dollar amount of shares redeemed and
will be assessed on an amount equal to the lesser of the current market value or
the cost of the shares being redeemed. The size of this percentage will depend
upon how long the shares have been held, as set forth in the following table:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A
PURCHASE PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- --------------------------------- -----------------------
<S> <C>
First............................ 5.0%
Second........................... 4.0%
Third............................ 3.0%
Fourth........................... 2.0%
Fifth............................ 2.0%
Sixth............................ 1.0%
Seventh and thereafter........... None
</TABLE>
In the case of Class B shares of the Fund held by 401 (k) plans or other
employer-sponsored plans qualified under Section 401(a) of the Internal Revenue
Code for which DWTC or DWTFSB serves as Trustee or the 401(k) Support Services
Group of DWR serves as recordkeeper and whose accounts are opened on or after
July 28, 1997, shares held for three years or more after purchase (calculated as
described in the paragraph above) will not be subject to any CDSC upon
redemption. However, shares redeemed earlier than three years after purchase may
be subject to a CDSC (calculated as described in the paragraph above), the
percentage
21
<PAGE>
of which will depend on how long the shares have been held, as set forth in the
following table:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- --------------------------------- -----------------------
<S> <C>
First............................ 2.0%
Second........................... 2.0%
Third............................ 1.0%
Fourth and thereafter............ None
</TABLE>
CDSC WAIVERS. A CDSC will not be imposed on: (i) any amount which
represents an increase in value of shares purchased within the six years (or, in
the case of shares held by certain employer-sponsored benefit plans, three
years) preceding the redemption; (ii) the current net asset value of shares
purchased more than six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years) prior to the redemption; and
(iii) the current net asset value of shares purchased through reinvestment of
dividends or distributions and/or shares acquired in exchange for shares of FSC
Funds or of other Dean Witter Funds acquired in exchange for such shares.
Moreover, in determining whether a CDSC is applicable it will be assumed that
amounts described in (i), (ii) and (iii) above (in that order) are redeemed
first.
In addition, the CDSC, if otherwise applicable, will be waived in the case
of:
(1) redemptions of shares held at the time a shareholder dies or becomes
disabled, only if the shares are: (A) registered either in the name of an
individual shareholder (not a trust), or in the names of such shareholder and
his or her spouse as joint tenants with right of survivorship; or (B) held in a
qualified corporate or self-employed retirement plan, Individual Retirement
Account ("IRA") or Custodial Account under Section 403(b)(7) of the Internal
Revenue Code ("403(b) Custodial Account"), provided in either case that the
redemption is requested within one year of the death or initial determination of
disability;
(2) redemptions in connection with the following retirement plan
distributions: (A) lump-sum or other distributions from a qualified corporate
or self-employed retirement plan following retirement (or, in the case of a "key
employee" of a "top heavy" plan, following attainment of age 59 1/2); (B)
distributions from an IRA or 403(b) Custodial
Account following attainment of age 59 1/2; or (C) a tax-free return of an
excess contribution to an IRA; and
(3) all redemptions of shares held for the benefit of a participant in a
401(k) plan or other employer-sponsored plan qualified under Section 401(a) of
the Internal Revenue Code which offers investment companies managed by the
Investment Manager or its subsidiary, Dean Witter Services Company Inc., as
self-directed investment alternatives and for which DWTC or DWTFSB serves as
Trustee or the 401(k) Support Services Group of DWR serves as recordkeeper
("Eligible Plan"), provided that either: (A) the plan continues to be an
Eligible Plan after the redemption; or (B) the redemption is in connection with
the complete termination of the plan involving the distribution of all plan
assets to participants.
With reference to (1) above, for the purpose of determining disability, the
Distributor utilizes the definition of disability contained in Section 72(m)(7)
of the Internal Revenue Code, which relates to the inability to engage in
gainful employment. With reference to (2) above, the term "distribution" does
not encompass a direct transfer of IRA, 403(b) Custodial Account or retirement
plan assets to a successor custodian or trustee. All waivers will be granted
only following receipt by the Distributor of confirmation of the shareholder's
entitlement.
CONVERSION TO CLASS A SHARES. All shares of the Fund held prior to July 28,
1997 have been designated Class B shares. Shares held before May 1, 1997 will
convert to Class A shares in May, 2007. In all other instances Class B shares
will convert automatically to Class A shares, based on the relative net asset
values of the shares of the two Classes on the conversion date, which will be
approximately ten (10) years after the date of the
22
<PAGE>
original purchase. The ten year period is calculated from the last day of the
month in which the shares were purchased or, in the case of Class B shares
acquired through an exchange or a series of exchanges, from the last day of the
month in which the original Class B shares were purchased, provided that shares
originally purchased before May 1, 1997 will convert to Class A shares in May,
2007. The conversion of shares purchased on or after May 1, 1997 will take place
in the month following the tenth anniversary of the purchase. There will also be
converted at that time such proportion of Class B shares acquired through
automatic reinvestment of dividends and distributions owned by the shareholder
as the total number of his or her Class B shares converting at the time bears to
the total number of outstanding Class B shares purchased and owned by the
shareholder. In the case of Class B shares held by a 401(k) plan or other
employer-sponsored plan qualified under Section 401(a) of the Internal Revenue
Code and for which DWTC or DWTFSB serves as Trustee or the 401(k) Support
Services Group of DWR serves as recordkeeper, the plan is treated as a single
investor and all Class B shares will convert to Class A shares on the conversion
date of the first shares of a Dean Witter Multi-Class Fund purchased by that
plan. In the case of Class B shares previously exchanged for shares of an
"Exchange Fund" (see "Shareholder Services--Exchange Privilege"), the period of
time the shares were held in the Exchange Fund (calculated from the last day of
the month in which the Exchange Fund shares were acquired) is excluded from the
holding period for conversion. If those shares are subsequently re-exchanged for
Class B shares of a Dean Witter Multi-Class Fund, the holding period resumes on
the last day of the month in which Class B shares are reacquired.
If a shareholder has received share certificates for Class B shares, such
certificates must be delivered to the Transfer Agent at least one week prior to
the date for conversion. Class B shares evidenced by share certificates that are
not received by the Transfer Agent at least one week prior to any conversion
date will be converted into Class A shares on the next scheduled conversion date
after such certificates are received.
Effectiveness of the conversion feature is subject to the continuing
availability of a ruling of the Internal Revenue Service or an opinion of
counsel that (i) the conversion of shares does not constitute a taxable event
under the Internal Revenue Code, (ii) Class A shares received on conversion will
have a basis equal to the shareholder's basis in the converted Class B shares
immediately prior to the conversion, and (iii) Class A shares received on
conversion will have a holding period that includes the holding period of the
converted Class B shares. The conversion feature may be suspended if the ruling
or opinion is no longer available. In such event, Class B shares would continue
to be subject to Class B 12b-1 fees.
Class B shares purchased before July 28, 1997 by trusts for which DWTC or
DWTFSB provides discretionary trustee services will convert to Class A shares on
or about August 29, 1997. The CDSC will not be applicable to such shares.
LEVEL LOAD ALTERNATIVE--CLASS C SHARES
Class C shares are sold at net asset value next determined without an
initial sales charge but are subject to a CDSC of 1.0% on most redemptions made
within one year after purchase (calculated from the last day of the month in
which the shares were purchased). The CDSC will be assessed on an amount equal
to the lesser of the current market value or the cost of the shares being
redeemed. The CDSC will not be imposed in the circumstances set forth above in
the section "Contingent Deferred Sales Charge Alternative--Class B Shares--CDSC
Waivers," except that the references to six years in the first paragraph of that
section shall mean one year in the case of Class C shares. Class C shares are
subject to an annual 12b-1 fee of up to 1.0% of the average daily net assets of
the Class. Unlike Class B shares, Class C shares have no conversion feature and,
accordingly, an investor that purchases Class C shares will be subject to 12b-1
fees
applica-
23
<PAGE>
ble to Class C shares for an indefinite period subject to annual approval by the
Fund's Board of Trustees and regulatory limitations.
NO LOAD ALTERNATIVE--CLASS D SHARES
Class D shares are offered without any sales charge on purchase or
redemption and without any 12b-1 fee. Class D shares are offered only to
investors meeting an initial investment minimum of $5 million and the following
categories of investors: (i) investors participating in the InterCapital mutual
fund asset allocation program pursuant to which such persons pay an asset based
fee; (ii) persons participating in a fee-based program approved by the
Distributor, pursuant to which such persons pay an asset based fee for services
in the nature of investment advisory or administrative services (subject to all
of the terms and conditions of such programs, which may include termination fees
and restrictions on transferability of Fund shares); (iii) 401(k) plans
established by DWR and SPS Transaction Services, Inc. (an affiliate of DWR) for
their employees; (iv) certain Unit Investment Trusts sponsored by DWR; (v)
certain other open-end investment companies whose shares are distributed by the
Distributor; and (vi) other categories of investors, at the discretion of the
Board, as disclosed in the then current prospectus of the Fund. Investors who
require a $5 million minimum initial investment to qualify to purchase Class D
shares may satisfy that requirement by investing that amount in a single
transaction in Class D shares of the Fund and other Dean Witter Multi-Class
Funds, subject to the $1,000 minimum initial investment required for that Class
of the Fund. In addition, for the purpose of meeting the $5 million minimum
investment amount, holdings of Class A shares in all Dean Witter Multi-Class
Funds, shares of FSC Funds and shares of Dean Witter Funds for which such shares
have been exchanged will be included together with the current investment
amount. If a shareholder redeems Class A shares and purchases Class D shares,
such redemption may be a taxable event.
PLAN OF DISTRIBUTION
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act with respect to the distribution of Class A, Class B and Class C shares of
the Fund. In the case of Class A and Class C shares, the Plan provides that the
Fund will reimburse the Distributor and others for the expenses of certain
activities and services incurred by them specifically on behalf of those shares.
Reimbursements for these expenses will be made in monthly payments by the Fund
to the Distributor, which will in no event exceed amounts equal to payments at
the annual rates of 0.25% and 1.0% of the average daily net assets of Class A
and Class C, respectively. In the case of Class B shares, the Plan provides that
the Fund will pay the Distributor a fee, which is accrued daily and paid
monthly, at the annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's Class B shares since the inception of the
Fund (not including reinvestments of dividends or capital gains distributions),
less the average daily aggregate net asset value of the Fund's Class B shares
redeemed since the Fund's inception upon which a CDSC has been imposed or
waived, or (b) the average daily net assets of Class B. The fee is treated by
the Fund as an expense in the year it is accrued. In the case of Class A shares,
the entire amount of the fee currently represents a service fee within the
meaning of the NASD guidelines. In the case of Class B and Class C shares, a
portion of the fee payable pursuant to the Plan, equal to 0.25% of the average
daily net assets of each of these Classes, is currently characterized as a
service fee. A service fee is a payment made for personal service and/or the
maintenance of shareholder accounts.
Additional amounts paid under the Plan in the case of Class B and Class C
shares are paid to the Distributor for services provided and the expenses borne
by the Distributor and others in the distribution of the shares of those
Classes, including the payment of commissions for sales of the shares of those
Classes and incentive compensation to and expenses of DWR's account executives
and others who engage in or support distribution of shares or who service
shareholder accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering of
the Fund's shares to other
24
<PAGE>
than current shareholders; and preparation, printing and distribution of sales
literature and advertising materials. In addition, the Distributor may utilize
fees paid pursuant to the Plan in the case of Class B shares to compensate DWR
and other Selected Broker-Dealers for their opportunity costs in advancing such
amounts, which compensation would be in the form of a carrying charge on any
unreimbursed expenses.
For the fiscal year ended March 31, 1997, Class B shares of the Fund accrued
payments under the Plan amounting to $22,941,076, which amount is equal to 0.84%
of the Fund's average daily net assets for the fiscal year. The payments accrued
under the Plan were calculated pursuant to clause (a) of the compensation
formula under the Plan. All shares held prior to July 28, 1997 have been
designated Class B shares.
In the case of Class B shares, at any given time, the expenses in
distributing Class B shares of the Fund may be in excess of the total of (i) the
payments made by the Fund pursuant to the Plan, and (ii) the proceeds of CDSCs
paid by investors upon the redemption of Class B shares. For example, if $1
million in expenses in distributing Class B shares of the Fund had been incurred
and $750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that such
excess amounts, including the carrying charge described above, totalled
$69,361,411 at March 31, 1997, which was equal to 2.28% of the net assets of the
Fund on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all distribution expenses or any requirement that
the Plan be continued from year to year, such excess amount does not constitute
a liability of the Fund. Although there is no legal obligation for the Fund to
pay expenses incurred in excess of payments made to the Distributor under the
Plan, and the proceeds of CDSCs paid by investors upon redemption of shares, if
for any reason the Plan is terminated the Trustees will consider at that time
the manner in which to treat such expenses. Any cumulative expenses incurred,
but not yet recovered through distribution fees or CDSCs, may or may not be
recovered through future distribution fees or CDSCs.
In the case of Class A and Class C shares, expenses incurred pursuant to the
Plan in any calendar year in excess of 0.25% or 1.0% of the average daily net
assets of Class A or Class C, respectively, will not be reimbursed by the Fund
through payments in any subsequent year, except that expenses representing a
gross sales commission credited to account executives at the time of sale may be
reimbursed in the subsequent calendar year. No interest or other financing
charges will be incurred on any Class A or Class C distribution expenses
incurred by the Distributor under the Plan or on any unreimbursed expenses due
to the Distributor pursuant to the Plan.
DETERMINATION OF NET ASSET VALUE
The net asset value per share 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 net assets of the Fund, dividing by the number of shares
outstanding and adjusting to the nearest cent. The assets belonging to the Class
A, Class B, Class C and Class D shares will be invested together in a single
portfolio. The net asset value of each Class, however, will be determined
separately by subtracting each Class's accrued expenses and liabilities. The net
asset value per share will not be determined on Good Friday and on such other
federal and non-federal holidays as are observed by the New York Stock Exchange.
In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
domestic or foreign stock exchange is valued at its latest sale price on that
exchange; if there were no sales that day, the security is valued at the latest
bid price (in cases where a security is traded on more than one exchange, the
security is valued on the exchange designated as the primary market pursuant to
procedures adopted by the Trustees); and
25
<PAGE>
(2) all portfolio securities for which over-the-counter market quotations are
readily available are valued at the latest bid price. When market quotations are
not readily available, including circumstances under which it is determined by
the Investment Manager that sale and 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 Board of Trustees.
Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may utilize
a matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research evaluations by its staff, including
review of broker-dealer market price quotations, in determining what it believes
is the fair valuation of the portfolio securities valued by such pricing
service.
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.
Generally, trading in foreign securities, as well as corporate bonds, United
States government securities and money market instruments, is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. The values of such securities used in computing the net asset value of
the Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events which affect the values of such securities and
such exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange and will therefore not be reflected in
the computation of the Fund's net asset value. If events materially affecting
the value of such securities occur during such period, then these securities
will be valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees.
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 applicable Class of the Fund (or, if specified by the shareholder,
in shares of any other open-end Dean Witter Funds), unless the shareholder
requests that they be paid in cash. Shares so acquired are acquired at net asset
value and are not subject to the imposition of a front-end sales charge or a
CDSC (see "Redemptions and Repurchases").
EASYINVEST-SM-. Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account or following
redemption of shares of a Dean Witter money market fund, on a semi-monthly,
monthly or quarterly basis, to the Fund's Transfer Agent for investment in
shares of the Fund (see "Purchase of Fund Shares" and "Redemptions and
Repurchases--Involuntary Redemption").
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 in shares of the
applicable Class 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. Shares so acquired are acquired at
net asset value and are not subject to the imposition of a front-end sales
charge or a CDSC (see "Redemptions and Repurchases").
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
With-
26
<PAGE>
drawal 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. Any applicable CDSC
will be imposed on shares redeemed under the Withdrawal Plan (see "Purchase of
Fund Shares"). Therefore, any shareholder participating in the Withdrawal Plan
will have sufficient shares redeemed from his or her account so that the
proceeds (net of any applicable CDSC) to the shareholder will be the designated
monthly or quarterly amount. 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.
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, eligible 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
Shares of each Class may be exchanged for shares of the same Class of any
other Dean Witter Multi-Class Fund without the imposition of any exchange fee.
Shares may also be exchanged for shares of the following funds: Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean
Witter Short-Term Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust
and five Dean Witter funds which are money market funds (the "Exchange Funds").
Class A shares may also be exchanged for shares of Dean Witter Multi-State
Municipal Series Trust and Dean Witter Hawaii Municipal Trust, which are Dean
Witter Funds sold with a front-end sales charge ("FSC Funds"). Class B shares
may also be exchanged for shares of Dean Witter Global Short-Term Income Fund
Inc., Dean Witter High Income Securities and Dean Witter National Municipal
Trust, which are Dean Witter Funds offered with a CDSC ("CDSC Funds"). Exchanges
may be made after the shares of the 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.
An exchange to another Dean Witter Multi-Class Fund, any FSC Fund, any CDSC
Fund or any Exchange Fund that is not a money market fund is on the basis of the
next calculated net asset value per share of each fund after the exchange order
is received. When exchanging into a money market fund from the Fund, shares of
the Fund are redeemed out of the Fund at their next calculated net asset value
and the proceeds of the redemption are used to purchase shares of the money
market fund at their net asset value determined the following business day.
Subsequent exchanges between any of the money market funds and any of the Dean
Witter Multi-Class Funds, FSC Funds or CDSC Funds or any Exchange Fund that is
not a money market fund can be effected on the same basis.
No CDSC is imposed at the time of any exchange of shares, although any
applicable CDSC will be imposed upon ultimate redemption. During the period of
time the shareholder remains in an Exchange Fund (calculated from the last day
of the month in which the Exchange Fund shares were acquired), the holding
period (for the purpose of determining the rate of the CDSC) is frozen. If those
shares are subsequently re-exchanged for shares of a Dean Witter Multi-Class
Fund or 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 Dean Witter Multi-
27
<PAGE>
Class Fund or shares of a CDSC Fund are reacquired. Thus, the CDSC is based upon
the time (calculated as described above) the shareholder was invested in shares
of a Dean Witter Multi-Class Fund or in shares of a CDSC Fund (see "Purchase of
Fund Shares"). In the case of exchanges of Class A shares which are subject to a
CDSC, the holding period also includes the time (calculated as described above)
the shareholder was invested in shares of a FSC Fund. However, in the case of
shares exchanged into an Exchange Fund on or after April 23, 1990, 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 incurred on or after that date which are
attributable to those shares. (Exchange Fund 12b-1 distribution fees are
described in the prospectuses for those funds.) Class B shares of the Fund
acquired in exchange for Class B shares of another Dean Witter Multi-Class Fund
or shares of a CDSC Fund having a different CDSC schedule than that of this Fund
will be subject to the higher CDSC schedule, even if such shares are
subsequently re-exchanged for shares of the fund with the lower CDSC schedule.
ADDITIONAL INFORMATION REGARDING EXCHANGES. Purchases and exchanges should
be made for investment purposes only. A pattern of frequent exchanges may be
deemed by the Investment Manager to be abusive and contrary to the best
interests of the Fund's other shareholders and, at the Investment Manager's
discretion, may be limited by the Fund's refusal to accept additional purchases
and/ or exchanges from the investor. Although the Fund does not have any
specific definition of what constitutes a pattern of frequent exchanges, and
will consider all relevant factors in determining whether a particular situation
is abusive and contrary to the best interests of the Fund and its other
shareholders, investors should be aware that the Fund and each of the other Dean
Witter Funds may in their discretion limit or otherwise restrict the number of
times this Exchange Privilege may be exercised by any investor. Any such
restriction will be made by the Fund on a prospective basis only, upon notice of
the shareholder not later than ten days following such shareholder's most recent
exchange.
The Exchange Privilege may be terminated or revised at any time by the Fund
and/or any of such Dean Witter Funds for which shares of the Fund 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 of the Fund pledged in the margin account.
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain one and examine it carefully before
investing. Exchanges are subject to the minimum investment requirement of each
Class of shares and any other conditions imposed by each fund. In the case of
any shareholder holding a share certificate or certificates, no exchanges may be
made until all applicable share certificates have been received by the Transfer
Agent and deposited in the shareholder's account. An exchange will be treated
for federal income tax purposes the same as a repurchase or redemption of
shares, on which the shareholder may realize a capital gain or loss. However,
the ability to deduct capital losses on an exchange may be limited in situations
where there is an exchange of shares within ninety days after the shares are
purchased. The Exchange Privilege is only available in states where an exchange
may legally be made.
If DWR or another Selected Broker-Dealer is the current dealer of record and
its account numbers are part of the account information, shareholders may
initiate an exchange of shares of the Fund for shares of any of the Dean Witter
Funds (for which the Exchange Privilege is available) pursuant to this Exchange
Privilege by contacting their account executive (no Exchange Privilege
Authorization Form is required). Other shareholders (and those shareholders who
are clients of DWR or other Selected Broker-Dealers but who wish to make
28
<PAGE>
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. Such procedures may
include requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number and DWR or other
Selected Broker-Dealer account number (if any). Telephone instructions may also
be recorded. If such procedures are not employed, the Fund may be liable for any
losses due to unauthorized or fraudulent instructions.
Telephone exchange instructions will be accepted if received by the Transfer
Agent between 9:00 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 experience with the Dean
Witter Funds in the past.
For further information regarding the Exchange Privilege, shareholders
should contact their DWR or other Selected Broker-Dealer account executive or
the Transfer Agent.
REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------------
REDEMPTION. Shares of each Class of the Fund can be redeemed for cash at
any time at the net asset value per share next determined; less the amount of
any applicable CDSC in the case of Class A, Class B or Class C shares (see
"Purchase of Fund Shares"). If shares are held in a shareholder's account
without a share certificate, a written request for redemption to the Fund's
Transfer Agent at P.O. Box 983, Jersey City, NJ 07303 is required. If
certificates are held by the shareholder, the shares may be redeemed by
surrendering the certificates with a written request for redemption along with
any additional documentation required by the Transfer Agent.
REPURCHASE. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to any
of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic or telegraphic request of the shareholder. The repurchase
price is the net asset value next computed (see "Purchase of Fund Shares") after
such repurchase order is received by DWR and other Selected Broker-Dealers,
reduced by any applicable CDSC.
The CDSC, if any, will be the only fee imposed upon redemption by either the
Fund or the Distributor. The offer by DWR and other Selected Broker-Dealers to
repurchase shares may be suspended without notice by them at any time. In that
event, shareholders may redeem their shares through the Fund's Transfer Agent as
set forth above under "Redemption."
PAYMENT FOR SHARES REDEEMED OR REPURCHASED. Payment for shares presented
for repurchase or redemption will be made by check within seven days after
receipt by the Transfer Agent of the certificate and/or written request in good
order. Such payment may be postponed or the right of redemption suspended under
unusual circumstances; e.g., when normal trading is not taking place on the New
York Stock Exchange. If the shares to be redeemed have recently been purchased
by check, payment of the redemption proceeds may be delayed for the minimum time
29
<PAGE>
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 35 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 in the same Class from which such shares were redeemed or
repurchased, at net asset value next determined after a reinstatement request,
together with the proceeds, is received by the Transfer Agent and receive a pro
rata credit for any CDSC paid in connection with such redemption or repurchase.
INVOLUNTARY REDEMPTION. The Fund reserves the right to redeem, on sixty
days' notice and at net asset value, the shares (other than shares held in an
Individual Retirement Account or Custodial Account under Section 403(b)(7) of
the Internal Revenue Code) of any shareholder whose shares have a value of less
than $100 as a result of redemptions or repurchases or such lesser amount as may
be fixed by the Trustees or, in the case of an account opened 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 sixty 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. No CDSC will be imposed on any involuntary redemption.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS. The Fund declares dividends separately for
each Class of shares and intends to pay quarterly income dividends and 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 long-term capital gains in any year for reinvestment.
All dividends and any capital gains distributions will be paid in additional
shares of the same Class 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. Shares acquired
by dividend and distribution reinvestments will not be subject to any front-end
sales charge or CDSC. Class B shares acquired through dividend and distribution
reinvestments will become eligible for conversion to Class A shares on a pro
rata basis. Distributions paid on Class A and Class D shares will be higher than
for Class B and Class C shares because distribution fees paid by Class B and
Class C shares are higher. (See "Shareholder Services--Automatic Investment of
Dividends and Distributions.")
TAXES. Because the Fund intends to distribute all of its net investment
income and net short-term capital gains to shareholders and otherwise remain
qualified as a regulated investment company under Subchapter M of the Code, it
is not expected that the Fund will be required to pay any Federal income tax on
any such income and capital gains, other than any tax resulting from investing
in passive foreign investment companies, as discussed below. Shareholders will
normally have to pay Federal income taxes, and any state and local income taxes,
on the dividends and distributions they receive from the Fund.
Distributions of net investment income and net short-term capital gains are
taxable to the shareholder as ordinary dividend income regardless of whether the
shareholder receives such distributions in additional shares or in cash. Any
dividends declared in the last quarter of any calendar year
30
<PAGE>
which are paid in the following year prior to February 1 will be deemed received
by the shareholder in the prior year. Some part of such dividends and
distributions may be eligible for the Federal dividends received deduction
available to the Fund's corporate shareholders.
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 dividends received deduction.
The Fund may at times make payments from sources other than income or net
capital gains. Payments from such sources will, in effect, represent a return of
a portion of each shareholder's investment. All, or a portion, of such payments
will not be taxable to shareholders.
After the end of the calendar year, shareholders will receive full
information on their dividends and capital gains distributions for tax purposes,
including information as to the portion taxable as ordinary income, the portion
taxable as long-term capital gains, and the amount of dividends eligible for the
Federal dividends received deduction available to corporations. To avoid being
subject to a 31% Federal backup withholding tax on taxable dividends, capital
gains distributions and the proceeds of redemptions and repurchases,
shareholders' taxpayer identification numbers must be furnished and certified as
to their accuracy.
Dividends, interest and gains received by the Fund may give rise to
withholding and other taxes imposed by foreign countries. If it qualifies for
and makes the appropriate election with the Internal Revenue Service, the Fund
will report annually to its shareholders the amount per share of such taxes to
enable shareholders to claim United States foreign tax credits or deductions
with respect to such taxes. In the absence of such an election, the Fund would
deduct foreign taxes in computing the amount of its distributable income.
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 "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. 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 a Class of the Fund of $1,000 over periods of one year, as well as
over the life of the Fund. Average annual total return reflects all income
earned by the Fund, any appreciation or depreciation of the Fund's assets, all
expenses incurred by the applicable Class and all sales charges incurred by
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 for
each Class over different periods of time by means of aggregate, average,
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 each
Class of shares of the Fund. Such calculations may or may not reflect the
deduction of any sales charge which, if reflected, would reduce the performance
quoted. The Fund from time to time may also advertise its performance relative
to certain performance rankings and indexes compiled by independent
organizations, such as mutual fund performance rankings of Lipper Analytical
Services, Inc.
31
<PAGE>
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS. All shares of beneficial interest of the Fund are of $0.01
par value and are equal as to earnings, assets and voting privileges except that
each Class will have exclusive voting privileges with respect to matters
relating to distribution expenses borne solely by such Class or any other matter
in which the interests of one Class differ from the interests of any other
Class. In addition, Class B shareholders will have the right to vote on any
proposed material increase in Class A's expenses, if such proposal is submitted
separately to Class A shareholders. Also, as discussed herein, Class A, Class B
and Class C bear the expenses related to the distribution of their respective
shares.
The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust.
Under Massachusetts law, shareholders of a business trust may, under certain
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 out of the
Fund's property for any shareholder held personally liable for the obligations
of the Fund. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations. Given the above limitations on
shareholder personal liability and the nature of the Fund's assets and
operations, the possibility of the Fund being unable to meet its obligations is
remote and, in the opinion of Massachusetts counsel to the Fund, the risk to
Fund shareholders of personal liability is remote.
CODE OF ETHICS. Directors, officers and employees of InterCapital, Dean
Witter Services Company Inc. and the Distributor are subject to a strict Code of
Ethics adopted by those companies. The Code of Ethics is intended to ensure that
the interests of shareholders and other clients are placed ahead of any personal
interest, that no undue personal benefit is obtained from a person's employment
activities and that actual and potential conflicts of interest are avoided. To
achieve these goals and comply with regulatory requirements, the Code of Ethics
requires, among other things, that personal securities transactions by employees
of the companies be subject to an advance clearance process to monitor that no
Dean Witter Fund is engaged at the same time in a purchase or sale of the same
security. The Code of Ethics bans the purchase of securities in an initial
public offering, and also prohibits engaging in futures and options transactions
and profiting on short-term trading (that is, a purchase within sixty days of a
sale or a sale within sixty days of a purchase) of a security. In addition,
investment personnel may not purchase or sell a security for their personal
account within thirty days before or after any transaction in any Dean Witter
Fund managed by them. Any violations of the Code of Ethics are subject to
sanctions, including reprimand, demotion or suspension or termination of
employment. The Code of Ethics comports with regulatory requirements and the
recommendations in the 1994 report by the Investment Company Institute Advisory
Group on Personal Investing.
MASTER/FEEDER CONVERSION. The Fund reserves the right to seek to achieve
its investment objective by investing all of its investable assets in a
diversified, open-end management investment company having the same investment
objective and policies and substantially the same investment restrictions as
those applicable to the Fund.
SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed
to the Fund at the telephone numbers or address set forth on the front cover of
this Prospectus.
32
<PAGE>
Dean Witter
Global Dividend Growth Securities
Two World Trade Center
New York, New York 10048
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and
General Counsel
Paul D. Vance
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Chase Manhattan Bank
One Chase Plaza
New York, New York 10081
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
DEAN WITTER
GLOBAL DIVIDEND
GROWTH SECURITIES
[PHOTO]
PROSPECTUS -- JULY 28, 1997
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES TWO WORLD TRADE CENTER, NEW YORK,
NEW YORK 10048
LETTER TO THE SHAREHOLDERS MARCH 31, 1997
DEAR SHAREHOLDER:
Once again, we are pleased to report that the most recent twelve-month period
has been a rewarding one for global investors, with most developed world equity
markets recording double-digit returns. This was the result of a very favorable
economic environment in which relatively benign inflation and low interest rates
throughout the world's largest markets led to greater earnings growth for
companies operating in those countries.
PERFORMANCE AND PORTFOLIO
For the twelve-month period ended March 31, 1997, Dean Witter Global Dividend
Growth Securities provided a total return of 12.58 percent compared to 7.68
percent for the Morgan Stanley Capital International World Index (MSCI World
Index) and 11.85 percent for the Lipper Global Funds Index. Since inception
(June 30, 1993), the Fund's total return was 59.58 percent versus 44.49 percent
for the MSCI World Index and 58.62 percent for the Lipper Global Funds Index.
The accompanying chart illustrates the growth of a $10,000 investment in the
Fund at inception through the fiscal year ended March 31, 1997, versus similar
investments in the MSCI World Index and the Lipper Global Funds Index. We
attribute the Fund's continued outperformance to our stringent, proprietary
screening processes, which we use consistently in selecting securities for the
portfolio.
During the period under review, we made no changes to the Fund's country
allocation. The Fund remains fully invested and well diversified, with 122
equity issues spread across the world's twelve largest markets as defined by
market capitalization. The United States, the world's largest market, continues
to be the Fund's largest target weighting, at approximately 30 percent of total
net assets spread among 19 stocks. Although U.S. stocks have experienced large
runups, there continue to be attractive long-term investment opportunities, and
we remain very
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS MARCH 31, 1997, CONTINUED
optimistic about the long-term growth potential of high-quality U.S. common
stocks. Recent U.S. additions to the Fund include Ashland, Inc., Dow Chemical
Co. and AT&T Corp.
Japan, the world's second-largest capital market, continues to be a significant
component of the Fund, at approximately 25 percent of total net assets. Last
year, our bullish outlook for Japanese stocks was driven primarily by attractive
valuations in some market sectors, especially the automobile and electronics
industries. These industries did indeed enjoy modest share price gains, despite
an overall decline in the Nikkei 225 Index of Japanese stocks. These exporters
derive much of their revenues from non-Japanese consumers and thus reaped
additional earnings growth from the weak yen. That
currency's weakness has dramatically
enhanced the profitability of the large
Japanese exporters, an area where the
Fund has significant exposure. While
there is still plenty of pessimism
surrounding Japanese stocks in general,
we are finding many world-class
Japanese companies selling at very
attractive prices, which we believe may
offer significant rewards for patient
and disciplined long-term investors.
The Fund's target allocation to Europe
is 33 percent: the United Kingdom (10.0
percent), France (7.5 percent), Germany
(6.5 percent), Italy (4.0 percent), the
Netherlands (3.0 percent) and
Switzerland (2.0 percent). Share prices
of utility stocks in the U.K. have
fallen dramatically on fears that a new
Labor Party government will tighten
regulation of utilities and impose a
"windfall tax" on profits. However
likely these events may be, the current
valuation of utility stocks seems to
overdiscount the actual impact such a
tax would have on longer-term earnings
growth. Consistent with this view, the
Fund initiated two new positions in the
utility industry in the U.K. with
purchases of National Power PLC and
National Grid Group PLC.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS MARCH 31, 1997, CONTINUED
An additional benefit to this strategy is the defensive characteristic that
utility stocks have historically possessed.
There are several important reasons why the Fund is currently overweighted in
Europe overall. Most significantly, many high-quality European companies are
more attractively valued than their U.S. counterparts. In addition, because
Europe's business cycle lags that of the U.S., they may be poised for a period
of better earnings growth and superior shareholder returns.
One of the most significant long-term developments in Europe is the possibility
of economic unification. As Europe moves toward a common currency, to be called
the Euro, governments will continue to maintain favorable monetary and fiscal
policies in an effort to stimulate economic growth. The Euro should increase
efficiency and reduce currency risks for companies in participating countries,
thereby increasing their competitive position within the global economy.
European companies are also far behind their U.S. counterparts in both the
breadth and magnitude of restructuring through downsizing, spinoffs and mergers,
all of which are designed to enhance shareholder returns. With the bulk of these
returns yet to be realized, the Fund's strategic overweighting in Europe seems
prudent. Recent additions to the Fund's European holdings include Siemens AG and
MAN AG in Germany, Compagnie de Saint-Gobain and Lafarge S.A. in France, and KLM
Royal Dutch Air Lines NV and Koninklijke Hoogovens NV in the Netherlands.
Switzerland remains modestly underweighted (2 percent of net assets versus 3.7
percent for the MSCI World Index), due to a lack of attractive valuations there.
In the Pacific Rim, one of the biggest developments of the second half of this
century is about to occur. On July 1, 1997, the island country of Hong Kong will
revert back to China after 100 years of British rule. This will be celebrated
with much fanfare and perhaps hints of trepidation. The Fund remains optimistic
about the success of the transition and is targeting 4 percent of net assets to
high-quality companies positioned to benefit from these changes.
Malaysia (1.5 percent of net assets) is the only other market in the Pacific Rim
where the Fund is invested. Companies participating in the development of the
region's infrastructure continue to offer excellent profit growth potential at
reasonable valuations. Our exposure to the resource-oriented markets of
Australia (1.5 percent) and Canada (3.0 percent) offers risk reduction through
diversification, as well as growth potential in economically stable countries.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS MARCH 31, 1997, CONTINUED
LOOKING AHEAD
We will remain sensitive to any factors that would necessitate changes to the
Fund's country allocation. We believe that the long-term outlook for the
economies and securities markets of most of the world's major countries is
favorable and that the stocks of well-established large-capitalization
international companies should perform well over the long term. Consequently, we
remain confident, patient and nearly fully invested.
We appreciate your support of Dean Witter Global Dividend Growth Securities and
look forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS AND RIGHTS (97.1%)
AUSTRALIA (1.6%)
BANKING
1,910,000 Australia & New Zealand Banking
Group, Ltd.................... $ 12,122,465
-----------------
BUILDING & CONSTRUCTION
4,720,000 Pioneer International Ltd....... 16,287,311
-----------------
MULTI-INDUSTRY
1,717,000 Southcorp Holdings Ltd.......... 5,799,425
-----------------
PAPER & FOREST PRODUCTS
2,360,000 Amcor Ltd....................... 15,200,996
-----------------
TOTAL AUSTRALIA................. 49,410,197
-----------------
CANADA (2.9%)
BANKING
680,000 Toronto Dominion Bank........... 17,135,018
-----------------
NATURAL GAS
960,000 TransCanada Pipelines Ltd....... 17,432,491
-----------------
OIL RELATED
399,600 Imperial Oil Ltd................ 18,551,827
605,600 IPL Energy, Inc................. 17,446,527
-----------------
35,998,354
-----------------
TELECOMMUNICATIONS
376,000 BCE, Inc........................ 17,266,137
-----------------
TOTAL CANADA.................... 87,832,000
-----------------
FRANCE (7.6%)
BANKING
161,000 Societe Generale................ 18,763,372
-----------------
BUILDING MATERIALS
125,000 Compagnie de Saint-Gobain....... 18,862,912
290,000 Lafarge S.A..................... 20,021,608
-----------------
38,884,520
-----------------
FINANCIAL SERVICES
40,135 Societe Eurafrance S.A.......... 18,823,500
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOODS & BEVERAGES
119,000 Eridania Beghin-Say S.A......... $ 18,653,029
-----------------
MULTI-INDUSTRY
65,000 Compagnie Generale d'Industrie
et de Participations.......... 19,916,755
74,800 Saint-Louis..................... 19,064,329
286,943 Worms et Compagnie.............. 18,539,994
-----------------
57,521,078
-----------------
OIL INTEGRATED - INTERNATIONAL
192,200 Elf Aquitaine S.A............... 19,642,118
231,000 Total S.A. (B Shares)........... 19,920,988
-----------------
39,563,106
-----------------
TELECOMMUNICATIONS
163,000 Alcatel Alsthom................. 19,573,858
-----------------
TELEVISION
198,000 Societe Television Francaise
1............................. 19,743,890
-----------------
TOTAL FRANCE.................... 231,526,353
-----------------
GERMANY (6.7%)
BANKING
271,000 Deutsche Bank
Aktiengesellschaft............ 15,187,645
-----------------
BUILDING & CONSTRUCTION
375,500 Bilfinger & Berger Bau AG....... 14,634,527
-----------------
CHEMICALS
386,000 BASF AG......................... 14,513,876
356,000 Bayer AG........................ 14,745,688
-----------------
29,259,564
-----------------
ELECTRICAL EQUIPMENT
270,000 Siemens AG...................... 14,487,019
-----------------
MACHINERY - DIVERSIFIED
51,500 MAN AG.......................... 14,723,068
-----------------
MULTI-INDUSTRY
53,200 Preussag AG..................... 14,320,024
334,000 RWE AG.......................... 14,841,122
31,400 Viag AG......................... 14,767,651
-----------------
43,928,797
-----------------
RETAIL - DEPARTMENT STORES
42,100 Karstadt AG..................... 14,410,236
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
RETAIL - SPECIALTY
317,000 Douglas Holding AG.............. $ 11,711,310
-----------------
STEEL & IRON
65,000 Thyssen AG...................... 14,606,088
-----------------
TEXTILES - APPAREL
11,540 Hugo Boss AG (Pref.)............ 15,703,492
-----------------
UTILITIES - ELECTRIC
255,000 Veba AG......................... 14,374,664
-----------------
TOTAL GERMANY................... 203,026,410
-----------------
HONG KONG (3.9%)
BANKING
1,000,000 HSBC Holdings PLC............... 23,230,003
-----------------
CONGLOMERATES
3,195,000 Swire Pacific Ltd. (Class A).... 25,152,286
-----------------
REAL ESTATE
2,700,000 Cheung Kong (Holdings) Ltd...... 23,781,715
-----------------
TELECOMMUNICATIONS
13,390,000 Hong Kong Telecommunications
Ltd........................... 22,896,717
-----------------
UTILITIES - ELECTRIC
6,793,000 Hong Kong Electric Holdings
Ltd........................... 23,977,047
-----------------
TOTAL HONG KONG................. 119,037,768
-----------------
ITALY (4.0%)
FINANCIAL SERVICES
2,860,000 Istituto Mobiliare Italiano
SpA........................... 24,734,904
-----------------
OIL INTEGRATED - INTERNATIONAL
4,700,000 Ente Nazionale Idrocarburi
SpA........................... 23,766,408
-----------------
TELECOMMUNICATIONS
3,871,000 Sirti SpA....................... 23,870,397
11,550,000 Telecom Italia SpA.............. 24,498,956
-----------------
48,369,353
-----------------
TEXTILES - APPAREL
2,089,500 Benetton Group SpA.............. 25,869,406
-----------------
TOTAL ITALY..................... 122,740,071
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
JAPAN (25.2%)
AUTOMOTIVE
1,280,000 Honda Motor Co.................. $ 38,158,022
1,548,000 Toyota Motor Corp............... 39,143,965
-----------------
77,301,987
-----------------
BREWERS
4,615,000 Kirin Brewery Co., Ltd.......... 38,029,569
-----------------
BUILDING MATERIALS
3,845,000 Sekisui House Ltd............... 37,586,444
-----------------
COMPUTER SERVICES
2,572,000 NCR Japan Ltd................... 19,635,967
-----------------
ELECTRONICS & ELECTRICAL
4,385,000 Hitachi, Ltd.................... 38,968,331
675,000 Kyocera Corp.................... 38,281,629
2,445,000 Matsushita Electric Industrial
Co., Ltd...................... 38,122,879
4,182,000 Matsushita Electric Works....... 38,177,896
3,352,000 NEC Corp........................ 37,912,425
3,178,000 Sharp Corp...................... 37,741,638
545,000 Sony Corp....................... 38,085,717
558,000 TDK Corp........................ 38,317,984
-----------------
305,608,499
-----------------
ENTERTAINMENT & LEISURE TIME
2,341,000 Mizuno Corp..................... 13,049,685
519,000 Nintendo Corp., Ltd............. 37,107,368
-----------------
50,157,053
-----------------
FOODS & BEVERAGES
1,018,000 House Food Industry............. 12,829,860
3,407,000 Snow Brand Milk Products........ 16,459,735
-----------------
29,289,595
-----------------
MACHINERY
6,810,000 Mitsubishi Electric Corp........ 38,236,791
5,505,000 Mitsubishi Heavy Industries,
Ltd........................... 35,801,624
-----------------
74,038,415
-----------------
PHARMACEUTICALS
1,609,000 Taisho Pharmaceutical Co.,
Ltd........................... 37,566,731
1,775,000 Takeda Chemical Industries...... 37,140,491
-----------------
74,707,222
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TOBACCO
3,085 Japan Tobacco, Inc.............. $ 20,486,912
-----------------
TRANSPORTATION
3,870,000 Yamato Transport Co., Ltd....... 38,143,480
-----------------
TOTAL JAPAN..................... 764,985,143
-----------------
MALAYSIA (1.5%)
BANKING
1,669,000 AMMB Holdings Berhad............ 13,870,179
1,669,000 AMMB Holdings Berhad - Bond
Rights*....................... 215,459
1,669,000 AMMB Holdings Berhad - Loan
Stock Rights*................. 161,594
-----------------
14,247,232
-----------------
BUILDING & CONSTRUCTION
1,717,000 United Engineers Malaysia
Berhad........................ 14,961,756
-----------------
CONGLOMERATES
4,077,000 Sime Darby Berhad............... 14,884,965
-----------------
TOTAL MALAYSIA.................. 44,093,953
-----------------
NETHERLANDS (3.0%)
BANKING
166,000 ABN-AMRO Holding NV............. 11,400,128
-----------------
CHEMICALS
113,000 DSM NV.......................... 11,393,846
-----------------
ELECTRICAL EQUIPMENT
246,100 Philips Electronics NV.......... 11,463,879
-----------------
INSURANCE
295,000 Fortis Amev NV.................. 11,480,249
-----------------
OIL INTEGRATED - INTERNATIONAL
63,000 Royal Dutch Petroleum Co........ 11,423,445
-----------------
STEEL
219,000 Koninklijke Hoogovens NV........ 10,819,421
-----------------
TELECOMMUNICATIONS
298,000 Koninklijke PTT Nederland NV.... 11,025,873
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TEXTILES
33,000 Gamma Holding NV................ $ 1,871,007
-----------------
TRANSPORTATION
354,000 KLM Royal Dutch Air Lines NV.... 10,553,663
-----------------
TOTAL NETHERLANDS............... 91,431,511
-----------------
SWITZERLAND (2.1%)
BANKING
99,100 Swiss Bank Corp................. 21,045,062
-----------------
FOODS & BEVERAGES
17,900 Nestle AG....................... 20,829,765
-----------------
HEALTH & PERSONAL CARE
17,193 Novartis AG-Bearer.............. 21,289,399
-----------------
TOTAL SWITZERLAND............... 63,164,226
-----------------
UNITED KINGDOM (10.2%)
BANKING
1,110,000 Hambros PLC..................... 4,290,905
1,662,000 National Westminster Bank PLC... 18,879,539
2,250,000 Royal Bank of Scotland Group
PLC........................... 19,791,135
-----------------
42,961,579
-----------------
BREWERS
1,405,000 Bass PLC........................ 18,721,808
-----------------
ENERGY
706,100 Energy Group PLC*............... 5,875,486
-----------------
FOODS & BEVERAGES
5,050,000 Hazlewood Foods PLC............. 9,512,685
6,232,000 Hillsdown Holdings PLC.......... 19,599,391
-----------------
29,112,076
-----------------
LEISURE
2,610,000 Rank Group PLC.................. 18,126,763
-----------------
MULTI-INDUSTRY
882,625 Hanson PLC...................... 4,149,273
-----------------
NATURAL GAS
7,245,000 BG PLC.......................... 19,225,042
-----------------
RETAIL - MERCHANDISING
3,465,000 Tesco PLC....................... 19,864,845
-----------------
STEEL & IRON
7,473,000 British Steel PLC............... 19,952,461
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
2,627,000 British Telecommunications
PLC........................... $ 19,191,496
-----------------
TOBACCO
2,330,000 B.A.T. Industries PLC........... 19,731,512
-----------------
UTILITIES - ELECTRIC
4,445,000 National Grid Group PLC......... 15,217,102
2,375,000 National Power PLC.............. 18,984,420
3,305,000 Scottish Hydro-Electric PLC..... 19,488,924
-----------------
53,690,446
-----------------
UTILITIES - WATER
1,430,000 Hyder PLC....................... 18,457,639
1,350,000 Hyder PLC (Pref.)............... 2,305,280
1,620,000 Severn Trent PLC................ 18,389,171
-----------------
39,152,090
-----------------
TOTAL UNITED KINGDOM............ 309,754,877
-----------------
UNITED STATES (28.4%)
AEROSPACE & DEFENSE
605,000 Northrop Grumman Corp........... 45,753,125
-----------------
AUTOMOTIVE
1,465,000 Ford Motor Co................... 45,964,375
-----------------
BANKING
448,000 BankAmerica Corp................ 45,136,000
927,000 KeyCorp......................... 45,191,250
-----------------
90,327,250
-----------------
CHEMICALS
559,000 Dow Chemical Co................. 44,720,000
-----------------
COMPUTERS
337,000 International Business Machines
Corp.......................... 46,295,375
-----------------
CONGLOMERATES
547,000 Minnesota Mining & Manufacturing
Co............................ 46,221,500
1,185,000 Tenneco, Inc.................... 46,215,000
-----------------
92,436,500
-----------------
HEALTH & PERSONAL CARE
719,000 Bristol-Myers Squibb Co......... 42,421,000
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MACHINERY - DIVERSIFIED
1,053,000 Deere & Co...................... $ 45,805,500
-----------------
METALS & MINING
628,000 Phelps Dodge Corp............... 45,922,500
-----------------
OIL - DOMESTIC
1,130,300 Ashland, Inc.................... 45,494,575
-----------------
OIL INTEGRATED - INTERNATIONAL
667,000 Chevron Corp.................... 46,439,875
-----------------
PAPER & FOREST PRODUCTS
1,130,000 International Paper Co.......... 43,928,750
-----------------
RETAIL - MERCHANDISING
1,080,700 Dayton-Hudson Corp.............. 45,119,225
-----------------
TELECOMMUNICATIONS
995,000 Sprint Corp..................... 45,272,500
-----------------
TELEPHONES
1,305,100 AT&T Corp....................... 45,352,225
-----------------
TIRE & RUBBER GOODS
881,000 Goodyear Tire & Rubber Co....... 46,032,250
-----------------
TOBACCO
398,000 Philip Morris Companies, Inc.... 45,421,750
-----------------
TOTAL UNITED STATES............. 862,706,775
-----------------
TOTAL COMMON AND PREFERRED
STOCKS AND RIGHTS
(IDENTIFIED COST
$2,622,439,364)................. 2,949,709,284
-----------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (3.5%)
COMMERCIAL PAPER (1.6%)
FINANCE - CONSUMER (0.8%)
$ 25,000 American Express Credit Corp.
5.38% due 04/02/97............ 24,996,264
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FINANCE - DIVERSIFIED (0.8%)
$ 25,000 General Electric Capital Corp.
5.60% due 04/04/97............ $ 24,988,333
-----------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $49,984,597).... 49,984,597
-----------------
U.S. GOVERNMENT AGENCY (1.9%)
56,500 Federal Home Loan Mortgage Corp.
6.50% due04/01/97 (Amortized
Cost $56,500,000)............. 56,500,000
-----------------
TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $106,484,597)... 106,484,597
-----------------
TOTAL INVESTMENTS
(IDENTIFIED COST $2,728,923,961) (B)..... 100.6% 3,056,193,881
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS................................... (0.6) (17,702,793)
------ --------------
NET ASSETS............................... 100.0% $3,038,491,088
------ --------------
------ --------------
<FN>
- ---------------------
* Non-income producing security.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $440,444,453 and the
aggregate gross unrealized depreciation is $113,174,533, resulting in net
unrealized appreciation of $327,269,920.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT MARCH 31, 1997:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN DELIVERY APPRECIATION
DELIVER EXCHANGE FOR DATE (DEPRECIATION)
- -----------------------------------------------------------------
<S> <C> <C> <C>
$ 3,648,730 AUD 4,632,131 04/01/97 $(10,191)
$ 2,470,327 L 1,528,857 04/01/97 33,941
ITL 2,693,679,645 $ 1,594,790 04/01/97 (12,418)
$ 700,510 Y 86,548,000 04/01/97 (1,302)
$ 6,141,677 Y 759,786,850 04/01/97 (3,473)
NLG 2,630,362 $ 1,379,609 04/01/97 (20,712)
$ 1,732,535 AUD 2,213,113 04/02/97 5,865
L 421,231 $ 680,751 04/02/97 (9,225)
ITL 3,254,333,622 $ 1,930,095 04/02/97 (11,631)
$ 3,167,433 Y 391,336,307 04/02/97 (5,886)
NLG 4,012,432 $ 2,118,496 04/02/97 (17,594)
AUD 846,759 $ 663,012 04/03/97 (2,117)
$ 763,757 CAD 1,054,749 04/03/97 (2,206)
$ 1,148,106 Y 141,827,880 04/03/97 (2,300)
$ 3,922,763 NLG 7,392,055 04/03/97 12,530
AUD 1,115,612 $ 871,460 04/04/97 (4,853)
$ 1,765,997 ITL 2,956,543,100 04/04/97 (1,949)
AUD 3,755,871 $ 2,941,035 04/07/97 (9,202)
DEM 1,257,390 $ 749,786 04/07/97 (671)
L 24,058 $ 39,249 04/07/97 (158)
FRF 5,835,183 $ 1,034,423 04/30/97 916
$ 1,274,013 FRF 7,236,650 04/30/97 7,717
---------------
Net unrealized depreciation.................. $(54,919)
---------------
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
SUMMARY OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense..................... $ 45,753,125 1.5%
Automotive.............................. 123,266,362 4.1
Banking................................. 266,419,754 8.8
Brewers................................. 56,751,377 1.9
Building & Construction................. 45,883,594 1.5
Building Materials...................... 76,470,964 2.5
Chemicals............................... 85,373,410 2.8
Computer Services....................... 19,635,967 0.6
Computers............................... 46,295,375 1.5
Conglomerates........................... 132,473,751 4.4
Electrical Equipment.................... 25,950,898 0.9
Electronics & Electrical................ 305,608,499 10.1
Energy.................................. 5,875,486 0.2
Entertainment & Leisure Time............ 50,157,053 1.6
Finance - Consumer...................... 24,996,264 0.8
Finance - Diversified................... 24,988,333 0.8
Financial Services...................... 43,558,404 1.4
Foods & Beverages....................... 97,884,465 3.2
Health & Personal Care.................. 63,710,399 2.1
Insurance............................... 11,480,249 0.4
Leisure................................. 18,126,763 0.6
Machinery............................... 74,038,415 2.4
Machinery - Diversified................. 60,528,568 2.0
Metals & Mining......................... 45,922,500 1.5
Multi-Industry.......................... 111,398,573 3.7
Natural Gas............................. 36,657,533 1.2
Oil - Domestic.......................... 45,494,575 1.5
Oil Integrated - International.......... 121,192,834 4.0
Oil Related............................. 35,998,354 1.2
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C>
Paper & Forest Products................. $ 59,129,746 1.9%
Pharmaceuticals......................... 74,707,222 2.5
Real Estate............................. 23,781,715 0.8
Retail - Department Stores.............. 14,410,236 0.5
Retail - Merchandising.................. 64,984,070 2.1
Retail - Specialty...................... 11,711,310 0.4
Steel................................... 10,819,421 0.4
Steel & Iron............................ 34,558,549 1.1
Telecommunications...................... 183,595,934 6.0
Telephones.............................. 45,352,225 1.5
Television.............................. 19,743,890 0.6
Textiles................................ 1,871,007 0.1
Textiles - Apparel...................... 41,572,898 1.4
Tire & Rubber Goods..................... 46,032,250 1.5
Tobacco................................. 85,640,174 2.8
Transportation.......................... 48,697,143 1.6
U.S. Government Agency.................. 56,500,000 1.9
Utilities - Electric.................... 92,042,157 3.0
Utilities - Water....................... 39,152,090 1.3
-------------- -----
$3,056,193,881 100.6%
-------------- -----
-------------- -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................... $2,931,323,459 96.5%
Preferred Stocks........................ 18,008,772 0.6
Rights.................................. 377,053 0.0
Short-Term Investments.................. 106,484,597 3.5
-------------- -----
$3,056,193,881 100.6%
-------------- -----
-------------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $2,728,923,961).......................... $3,056,193,881
Cash........................................................ 829,422
Receivable for:
Investments sold........................................ 30,669,387
Dividends............................................... 8,912,805
Shares of beneficial interest sold...................... 7,093,490
Foreign withholding taxes reclaimed..................... 2,550,241
Interest................................................ 29,191
Deferred organizational expenses............................ 45,054
Prepaid expenses and other assets........................... 37,907
--------------
TOTAL ASSETS........................................... 3,106,361,378
--------------
LIABILITIES:
Payable for:
Investments purchased................................... 59,929,183
Shares of beneficial interest repurchased............... 2,632,036
Plan of distribution fee................................ 2,145,495
Investment management fee............................... 1,848,077
Accrued expenses and other payables......................... 1,315,499
--------------
TOTAL LIABILITIES...................................... 67,870,290
--------------
NET ASSETS:
Paid-in-capital............................................. 2,576,452,218
Net unrealized appreciation................................. 327,055,942
Accumulated undistributed net investment income............. 15,457
Accumulated undistributed net realized gain................. 134,967,471
--------------
NET ASSETS............................................. $3,038,491,088
--------------
--------------
NET ASSET VALUE PER SHARE,
228,383,365 SHARES OUTSTANDING (UNLIMITED SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$13.30
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $7,080,281 foreign withholding tax)....... $ 70,324,634
Interest.................................................... 2,749,027
------------
TOTAL INCOME........................................... 73,073,661
------------
EXPENSES
Plan of distribution fee.................................... 22,941,076
Investment management fee................................... 19,649,426
Transfer agent fees and expenses............................ 3,068,550
Custodian fees.............................................. 1,551,559
Registration fees........................................... 246,886
Shareholder reports and notices............................. 179,893
Professional fees........................................... 73,525
Organizational expenses..................................... 36,058
Trustees' fees and expenses................................. 21,108
Other....................................................... 38,946
------------
TOTAL EXPENSES......................................... 47,807,027
------------
NET INVESTMENT INCOME.................................. 25,266,634
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. 255,839,635
Foreign exchange transactions........................... (251,928)
------------
NET GAIN............................................... 255,587,707
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................. 39,226,407
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ (40,049)
------------
NET APPRECIATION....................................... 39,186,358
------------
NET GAIN............................................... 294,774,065
------------
NET INCREASE................................................ $320,040,699
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31,1997 MARCH 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 25,266,634 $ 22,314,052
Net realized gain........................................... 255,587,707 127,041,313
Net change in unrealized appreciation....................... 39,186,358 215,212,383
-------------- --------------
NET INCREASE........................................... 320,040,699 364,567,748
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income....................................... (27,883,886) (25,446,868)
Net realized gain........................................... (201,225,779) (83,961,762)
-------------- --------------
TOTAL.................................................. (229,109,665) (109,408,630)
-------------- --------------
Net increase from transactions in shares of beneficial
interest.................................................. 513,559,240 324,894,923
-------------- --------------
NET INCREASE........................................... 604,490,274 580,054,041
NET ASSETS:
Beginning of period......................................... 2,434,000,814 1,853,946,773
-------------- --------------
END OF PERIOD
(INCLUDING ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
OF $15,457 AND DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME
OF $2,223,051, RESPECTIVELY)............................... $3,038,491,088 $2,434,000,814
-------------- --------------
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Global Dividend Growth Securities (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is to
provide reasonable current income and long-term growth of income and capital.
The Fund seeks to achieve its objective by investing primarily in common stock
of issuers worldwide, with a record of paying dividends and the potential for
increasing dividends. The Fund was organized as a Massachusetts business trust
on January 12, 1993 and commenced operations on June 30, 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, American, or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") that sale
and 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); and (4) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
dividend date except for certain dividends from foreign securities which are
recorded as soon as the Fund is informed after the ex-dividend date. Discounts
are accreted over the life of the respective securities. Interest income is
accrued daily.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
E. 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.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record 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
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
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.
G. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of approximately $180,000 which have been reimbursed for the full
amount thereof. 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. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined at the close of
each business day: 0.75% to the portion of daily net assets not exceeding $1
billion; 0.725% to the portion of daily net assets exceeding $1 billion but not
exceeding $1.5 billion; and 0.70% to the portion of daily net assets exceeding
$1.5 billion. Effective May 1, 1996, the Agreement was amended to reduce the
annual fee to 0.675% to the portion of daily net assets exceeding $2.5 billion
but not exceeding $3.5 billion. Effective May 1, 1997, the Agreement was again
amended to reduce the annual fee to 0.65% to the portion of daily net assets in
excess of $3.5 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment 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 Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act pursuant
to which the Fund pays the Distributor compensation, accrued daily and payable
monthly, at an annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's shares since the Fund's inception (not
including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
imposed or upon which such charge has been waived; or (b) the Fund's average
daily net assets. Amounts paid under the Plan are paid to the Distributor to
compensate it for the services provided and the expenses borne by it and others
in the distribution of the Fund's shares, including the payment of commissions
for sales of the Fund's shares and incentive compensation to, and expenses of,
the account executives of Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor, and other employees or selected
broker-dealers who engage in or support distribution of the Fund's shares or who
service shareholder accounts, including overhead and telephone expenses,
printing and distribution of prospectuses and reports used in connection with
the offering of the Fund's shares to other than current shareholders and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may be compensated under the Plan for
its opportunity costs in advancing such amounts, which compensation would be in
the form of a carrying charge on any unreimbursed expenses incurred by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
contingent deferred sales charges paid by investors upon redemption of shares,
if for any reason the Plan is terminated, the Trustees will consider at that
time the manner in which to treat such expenses. The Distributor has advised the
Fund that such excess amounts, including carrying charges, totaled $69,361,411
at March 31, 1997.
The Distributor has informed the Fund that for the year ended March 31, 1997, it
received approximately $3,917,000 in contingent deferred sales charges from
certain redemptions of the Fund's shares.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended March 31, 1997 aggregated
$1,323,786,773 and $1,079,499,286, respectively.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
For the year ended March 31, 1997, the Fund incurred brokerage commissions of
$169,351 with DWR for portfolio transactions executed on behalf of the Fund. At
March 31, 1997, included in the Fund's payable for investments purchased and
receivable for investments sold were unsettled trades with DWR of $1,187,200 and
$1,423,578, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $527,000.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended March 31, 1997 included
in Trustees' fees and expenses in the Statement of Operations amounted to
$4,263. At March 31, 1997, the Fund had an accrued pension liability of $28,923
which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 51,442,695 $ 677,741,563 46,573,003 $566,276,970
Reinvestment of dividends and distributions...................... 16,426,517 213,686,419 8,465,778 101,615,413
----------- -------------- ----------- ------------
67,869,212 891,427,982 55,038,781 667,892,383
Repurchased...................................................... (28,703,758) (377,868,742) (28,302,433) (342,997,460)
----------- -------------- ----------- ------------
Net increase..................................................... 39,165,454 $ 513,559,240 26,736,348 $324,894,923
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $1,000 during fiscal 1997.
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and income from the
mark-to-market of passive foreign investment companies ("PFICs") and permanent
book/tax differences primarily attributable to tax adjustments on
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
PFICs sold by the Fund. To reflect reclassifications arising from permanent
book/tax differences for the year ended March 31, 1997, accumulated
undistributed net realized gain was charged $4,855,760 and accumulated
undistributed net investment income was credited $4,855,760.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At March 31, 1997, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE
PERIOD
JUNE 30,
1993*
FOR THE YEAR ENDED MARCH 31 THROUGH
------------------------------- MARCH 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 12.86 $ 11.41 $ 10.81 $ 10.00
--------- --------- --------- ---------
Net investment income.............. 0.12 0.13 0.14 0.05
Net realized and unrealized gain... 1.44 1.96 0.88 0.84
--------- --------- --------- ---------
Total from investment operations... 1.56 2.09 1.02 0.89
--------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income........... (0.13) (0.15) (0.14) (0.05)
Net realized gain............... (0.99) (0.49) (0.28) (0.03)
--------- --------- --------- ---------
Total dividends and
distributions..................... (1.12) (0.64) (0.42) (0.08)
--------- --------- --------- ---------
Net asset value, end of period..... $ 13.30 $ 12.86 $ 11.41 $ 10.81
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 12.58% 18.77% 9.60% 8.89%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.75% 1.85% 1.97% 2.03%(2)
Net investment income.............. 0.93% 1.05% 1.22% 0.66%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $3,038 $2,434 $1,854 $1,121
Portfolio turnover rate............ 40% 40% 32% 21%(1)
Average commission rate paid....... $0.0289 $0.0311 -- --
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
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 Dean Witter Global Dividend Growth
Securities (the "Fund") at March 31, 1997, 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 three years in
the period then ended and for the period June 30, 1993 (commencement of
operations) through March 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 March 31, 1997 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
MAY 16, 1997
- --------------------------------------------------------------------------------
1997 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended March 31, 1997, the Fund paid to
shareholders $0.85 per share from long-term capital gains. For
such period, 36.38% of the ordinary dividends qualified for the
dividends received deduction available to corporations. For the
year ended March 31, 1997, the Fund has elected, pursuant to
Section 853 of the Internal Revenue Code, to pass-through foreign
taxes of $0.03 per share to its shareholders. The Fund generated
net foreign source income of $0.09 per share with respect to this
election.
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Paul D. Vance
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of the
Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
[GRAPHIC]
ANNUAL REPORT
MARCH 31, 1997
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES TWO WORLD TRADE CENTER, NEW YORK,
NEW YORK 10048
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997
DEAR SHAREHOLDER:
The six-month period ended September 30, 1997, was rewarding for global equity
investors. Overall, the global markets strengthened as most of the developed
countries continued their ongoing economic expansion. In the near term, we
expect this pattern to continue albeit with some volatility, providing a
favorable environment for global equities.
PERFORMANCE AND PORTFOLIO
For the six-month period under review Dean Witter Global Dividend Growth
Securities Class B shares provided a total return of 16.83 percent. This
compares with a total return of 17.54 percent for the Morgan Stanley Capital
International World Index (MSCI World Index) and 18.06 percent for the Lipper
Analytical Services Inc. Global Funds Index. Since its inception on June 30,
1993, through September 30, 1997, the Fund's average total return has been 15.78
percent versus 13.27 percent for the MSCI World Index and 15.91 percent for the
Lipper Global Funds Index.
During the period under review several changes to the Fund's country allocation
targets were implemented. In late June, the Fund initiated exposure to two
additional developed markets, Spain and Sweden. The stocks purchased in Spain
were an electric company, Endesa S.A., an oil and gas company, Repsol S.A. and a
banking company, Banco Popular Espanol S.A. Those purchased in Sweden were
Sandvik AB, a machinery manufacturer, Nordbanken AB, a banking company, and
Volvo AB, an automobile manufacturer. Also during the period, the Fund's target
exposure to Germany increased to 6 percent. Two additional country allocation
changes occurred during the period under review. The Fund purchased two new
positions in Australia, Santos Ltd., an oil-related company, and Normandy Mining
Ltd., a gold mining company, increasing the assets invested in that country to
2.0 percent. Exposure to Canada was reduced to 2.6 percent of net assets.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997, CONTINUED
The current portfolio allocations are as follows: the United States (30.7
percent of net assets), Japan (23.5 percent), United Kingdom (10.1 percent),
Germany (6.8 percent), France (6.6 percent), Italy (4.1 percent), Hong Kong (4.0
percent), the Netherlands (3.0 percent), Canada (2.6 percent), Switzerland (2.1
percent), Australia (2.0 percent), Sweden (1.6 percent), Spain (1.5 percent) and
Malaysia (1.4 percent).
The Fund remains nearly fully invested and well diversified, with 124 equity
issues spread across the world's 14 largest markets, as defined by market
capitalization. The United States, the world's largest capital market, continues
to be the Fund's heaviest target weighting. Japan is the Fund's second largest
target weighting, followed by the United Kingdom.
On July 28, 1997, the Fund began offering four classes of shares: A, B, C and D,
each with its own sales charge and distribution fee structure. A revised
prospectus, which includes complete details regarding the Fund's conversion to
multiple classes of shares, was mailed to shareholders in mid-summer.
LOOKING AHEAD
As always, we will remain sensitive to any factors that might necessitate
changes to the Fund's country allocations. We believe that the long-term outlook
for the economies and securities markets in most of the world's major countries
is favorable and that the stocks of well-established international companies
should perform well over the long term. Consequently, we remain confident,
patient and nearly fully invested.
We appreciate your support of Dean Witter Global Dividend Growth Securities and
look forward to continuing to serve your investment needs in the future.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
RESULTS OF SPECIAL MEETING (UNAUDITED)
On May 21, 1997, a special meeting of the Fund's shareholders was held for the
purpose of voting on four separate matters, the results of which were as
follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPITAL INC, IN CONNECTION WITH THE MERGER OF MORGAN STANLEY
GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<S> <C>
For........................................................................ 113,008,257
Against.................................................................... 2,670,674
Abstain.................................................................... 9,817,819
</TABLE>
(2) ELECTION OF TRUSTEES:
<TABLE>
<S> <C>
Michael Bozic
For............... 118,709,014
Withheld.......... 6,787,736
Charles A. Fiumefreddo
For............... 118,916,143
Withheld.......... 6,580,607
Edwin J. Garn
For............... 118,947,913
Withheld.......... 6,548,837
John R. Haire
For............... 118,600,913
Withheld.......... 6,895,837
Wayne E. Hedien
For............... 118,864,536
Withheld.......... 6,632,214
Dr. Manuel H. Johnson
For............... 118,956,079
Withheld.......... 6,540,671
Michael E. Nugent
For............... 119,056,968
Withheld.......... 6,439,782
Philip J. Purcell
For............... 119,018,371
Withheld.......... 6,478,379
John L. Schroeder
For............... 118,849,826
Withheld.......... 6,646,924
</TABLE>
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:
<TABLE>
<S> <C>
For........................................................................ 108,656,982
Against.................................................................... 5,111,251
Abstain.................................................................... 11,728,517
</TABLE>
(4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:
<TABLE>
<S> <C>
For........................................................................ 115,802,139
Against.................................................................... 1,637,557
Abstain.................................................................... 8,057,054
</TABLE>
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (98.9%)
AUSTRALIA (2.0%)
BANKING
1,980,000 Australia & New Zealand Banking Group, Ltd......................................... $ 16,205,841
--------------
BUILDING & CONSTRUCTION
4,475,000 Pioneer International Ltd.......................................................... 15,241,700
--------------
GOLD
11,915,000 Normandy Mining Ltd................................................................ 15,129,667
--------------
OIL RELATED
2,920,000 Santos Ltd......................................................................... 15,043,139
--------------
PAPER & FOREST PRODUCTS
2,540,000 Amcor Ltd.......................................................................... 16,014,035
--------------
TOTAL AUSTRALIA.................................................................... 77,634,382
--------------
CANADA (2.6%)
BANKING
708,000 Toronto Dominion Bank.............................................................. 24,071,692
--------------
NATURAL GAS
1,150,000 TransCanada Pipelines Ltd.......................................................... 22,277,138
--------------
OIL RELATED
418,000 Imperial Oil Ltd................................................................... 24,095,011
620,000 IPL Energy, Inc.................................................................... 24,379,752
--------------
48,474,763
--------------
TELECOMMUNICATIONS
141,000 BCE, Inc........................................................................... 4,222,138
--------------
TOTAL CANADA....................................................................... 99,045,731
--------------
FRANCE (6.6%)
BANKING
163,000 Societe Generale................................................................... 23,661,513
--------------
BUILDING MATERIALS
146,000 Compagnie de Saint-Gobain.......................................................... 22,575,412
307,000 Lafarge S.A........................................................................ 22,557,431
--------------
45,132,843
--------------
FINANCIAL SERVICES
51,675 Societe Eurafrance S.A............................................................. 21,831,432
--------------
FOODS & BEVERAGES
155,950 Eridania Beghin-Say S.A............................................................ 24,245,712
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MULTI-INDUSTRY
74,000 Compagnie Generale d'Industrie et de Participations................................ $ 22,509,506
340,000 Worms et Compagnie................................................................. 24,505,281
--------------
47,014,787
--------------
OIL INTEGRATED - INTERNATIONAL
170,700 Elf Aquitaine S.A.................................................................. 22,846,540
195,000 Total S.A. (B Shares).............................................................. 22,375,158
--------------
45,221,698
--------------
TELECOMMUNICATIONS
166,000 Alcatel Alsthom.................................................................... 22,133,333
--------------
TELEVISION
255,633 Societe Television Francaise 1..................................................... 22,161,340
--------------
TOTAL FRANCE....................................................................... 251,402,658
--------------
GERMANY (6.8%)
BANKING
288,000 Deutsche Bank Aktiengesellschaft................................................... 20,334,412
--------------
BUILDING & CONSTRUCTION
448,500 Bilfinger & Berger Bau AG.......................................................... 18,277,030
--------------
CHEMICALS
520,000 BASF AG............................................................................ 18,829,672
493,000 Bayer AG........................................................................... 19,684,744
--------------
38,514,416
--------------
ELECTRICAL EQUIPMENT
285,000 Siemens AG......................................................................... 19,305,721
--------------
MACHINERY - DIVERSIFIED
64,500 MAN AG............................................................................. 20,416,397
--------------
MULTI-INDUSTRY
63,200 Preussag AG........................................................................ 17,755,832
415,000 RWE AG............................................................................. 20,150,548
44,400 Viag AG............................................................................ 19,928,214
--------------
57,834,594
--------------
RETAIL - DEPARTMENT STORES
54,000 Karstadt AG........................................................................ 18,757,023
--------------
RETAIL - SPECIALTY
317,000 Douglas Holding AG................................................................. 12,468,415
--------------
STEEL & IRON
81,000 Thyssen AG......................................................................... 18,940,916
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TEXTILES - APPAREL
11,540 Hugo Boss AG (Pref.)............................................................... $ 15,981,384
--------------
UTILITIES - ELECTRIC
335,000 Veba AG............................................................................ 19,631,506
--------------
TOTAL GERMANY...................................................................... 260,461,814
--------------
HONG KONG (4.0%)
BANKING
956,000 HSBC Holdings PLC.................................................................. 32,000,517
--------------
CONGLOMERATES
3,775,000 Swire Pacific Ltd. (Class A)....................................................... 28,907,108
--------------
REAL ESTATE
2,683,000 Cheung Kong (Holdings) Ltd......................................................... 30,167,496
--------------
TELECOMMUNICATIONS
13,700,000 Hong Kong Telecommunications Ltd................................................... 30,985,460
--------------
UTILITIES - ELECTRIC
8,073,000 Hong Kong Electric Holdings Ltd.................................................... 30,048,776
--------------
TOTAL HONG KONG.................................................................... 152,109,357
--------------
ITALY (4.1%)
FINANCIAL SERVICES
2,750,000 Istituto Mobiliare Italiano SpA.................................................... 29,579,510
--------------
OIL INTEGRATED - INTERNATIONAL
4,950,000 Ente Nazionale Idrocarburi SpA..................................................... 31,250,145
--------------
TELECOMMUNICATIONS
5,095,000 Sirti SpA.......................................................................... 32,032,393
7,886,025 Telecom Italia SpA................................................................. 30,755,406
--------------
62,787,799
--------------
TEXTILES - APPAREL
1,884,000 Benetton Group SpA................................................................. 31,567,778
--------------
TOTAL ITALY........................................................................ 155,185,232
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
JAPAN (23.5%)
AUTOMOTIVE
1,300,000 Honda Motor Co..................................................................... $ 45,426,627
1,510,000 Toyota Motor Corp.................................................................. 46,372,842
--------------
91,799,469
--------------
BREWERS
5,526,000 Kirin Brewery Co., Ltd............................................................. 45,591,335
--------------
BUILDING MATERIALS
4,845,000 Sekisui House Ltd.................................................................. 46,246,265
--------------
COMPUTER SERVICES
2,572,000 NCR Japan Ltd...................................................................... 13,449,203
--------------
ELECTRONICS & ELECTRICAL
5,382,000 Hitachi, Ltd....................................................................... 46,904,881
719,000 Kyocera Corp....................................................................... 47,085,906
2,640,000 Matsushita Electric Industrial Co., Ltd............................................ 47,768,924
4,630,000 Matsushita Electric Works.......................................................... 48,421,315
3,861,000 NEC Corp........................................................................... 47,108,815
4,800,000 Sharp Corp......................................................................... 43,824,701
495,000 Sony Corp.......................................................................... 46,837,649
516,000 TDK Corp........................................................................... 46,254,980
--------------
374,207,171
--------------
ENTERTAINMENT & LEISURE TIME
497,000 Nintendo Co., Ltd.................................................................. 46,614,376
--------------
MACHINERY
11,800,000 Mitsubishi Electric Corp........................................................... 46,522,244
8,315,000 Mitsubishi Heavy Industries, Ltd................................................... 45,619,315
--------------
92,141,559
--------------
PHARMACEUTICALS
1,801,000 Taisho Pharmaceutical Co., Ltd..................................................... 47,685,840
1,579,000 Takeda Chemical Industries......................................................... 47,443,393
--------------
95,129,233
--------------
TOBACCO
6,000 Japan Tobacco, Inc................................................................. 46,762,948
--------------
TRANSPORTATION
3,725,000 Yamato Transport Co., Ltd.......................................................... 45,758,632
--------------
TOTAL JAPAN........................................................................ 897,700,191
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MALAYSIA (1.4%)
BANKING
6,415,000 AMMB Holdings Berhad............................................................... $ 16,813,907
--------------
BUILDING & CONSTRUCTION
5,512,000 United Engineers Malaysia Berhad................................................... 17,676,472
--------------
CONGLOMERATES
9,057,000 Sime Darby Berhad.................................................................. 18,851,295
--------------
TOTAL MALAYSIA..................................................................... 53,341,674
--------------
NETHERLANDS (3.0%)
BANKING
700,000 ABN-AMRO Holding NV................................................................ 14,214,451
--------------
CHEMICALS
140,000 DSM NV............................................................................. 13,713,595
--------------
ELECTRICAL EQUIPMENT
188,100 Philips Electronics NV............................................................. 15,960,919
--------------
INSURANCE
335,000 Fortis Amev NV..................................................................... 14,027,260
--------------
OIL INTEGRATED - INTERNATIONAL
252,000 Royal Dutch Petroleum Co........................................................... 14,145,319
--------------
STEEL
230,000 Koninklijke Hoogovens NV........................................................... 14,938,527
--------------
TELECOMMUNICATIONS
365,000 Koninklijke PTT Nederland NV....................................................... 14,382,243
--------------
TRANSPORTATION
394,000 KLM Royal Dutch Air Lines NV....................................................... 13,797,742
--------------
TOTAL NETHERLANDS.................................................................. 115,180,056
--------------
SPAIN (1.5%)
BANKING
312,000 Banco Popular Espanol S.A.......................................................... 20,135,799
--------------
ELECTRIC
900,000 Endesa S.A......................................................................... 19,270,588
--------------
OIL RELATED
447,000 Repsol S.A......................................................................... 19,382,521
--------------
TOTAL SPAIN........................................................................ 58,788,908
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SWEDEN (1.6%)
AUTOMOBILES
670,000 Volvo AB (B Shares)................................................................ $ 19,237,624
--------------
BANKING
572,300 Nordbanken AB...................................................................... 19,567,749
--------------
MACHINERY - DIVERSIFIED
588,000 Sandvik AB (B Shares).............................................................. 20,453,861
--------------
TOTAL SWEDEN....................................................................... 59,259,234
--------------
SWITZERLAND (2.1%)
BANKING
97,100 Swiss Bank Corp.................................................................... 26,315,633
--------------
FOODS & BEVERAGES
18,800 Nestle AG.......................................................................... 26,266,327
--------------
HEALTH & PERSONAL CARE
16,500 Novartis AG-Bearer................................................................. 25,487,897
--------------
TOTAL SWITZERLAND.................................................................. 78,069,857
--------------
UNITED KINGDOM (10.1%)
BANKING
1,640,000 National Westminster Bank PLC...................................................... 24,827,177
2,190,000 Royal Bank of Scotland Group PLC................................................... 24,426,932
--------------
49,254,109
--------------
BREWERS
1,705,000 Bass PLC........................................................................... 23,041,268
--------------
ENERGY
1,090,000 Energy Group PLC................................................................... 11,470,522
--------------
FOODS & BEVERAGES
8,780,000 Hillsdown Holdings PLC............................................................. 23,985,950
--------------
LEISURE
4,100,000 Rank Group PLC..................................................................... 24,124,646
--------------
MULTI-INDUSTRY
2,600,000 Hanson PLC......................................................................... 12,314,497
--------------
NATURAL GAS
5,450,000 BG PLC............................................................................. 23,698,698
--------------
RETAIL - MERCHANDISING
3,210,000 Tesco PLC.......................................................................... 24,284,356
--------------
STEEL & IRON
8,150,000 British Steel PLC.................................................................. 23,779,927
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
3,450,000 British Telecommunications PLC..................................................... $ 22,809,623
--------------
TOBACCO
2,825,000 B.A.T. Industries PLC.............................................................. 24,796,706
--------------
UTILITIES - ELECTRIC
5,350,000 National Grid Group PLC............................................................ 24,561,101
2,595,000 National Power PLC................................................................. 23,826,564
3,225,000 Scottish Hydro-Electric PLC........................................................ 24,502,099
--------------
72,889,764
--------------
UTILITIES - WATER
1,520,000 Hyder PLC.......................................................................... 22,547,886
1,350,000 Hyder PLC (Pref.).................................................................. 2,455,059
1,642,350 Severn Trent PLC................................................................... 24,411,427
--------------
49,414,372
--------------
TOTAL UNITED KINGDOM............................................................... 385,864,438
--------------
UNITED STATES (29.6%)
AEROSPACE & DEFENSE
437,000 Northrop Grumman Corp.............................................................. 53,040,875
--------------
AUTOMOTIVE
1,215,000 Ford Motor Co...................................................................... 54,978,750
--------------
BANKING
735,000 BankAmerica Corp................................................................... 53,884,687
838,000 KeyCorp............................................................................ 53,317,750
--------------
107,202,437
--------------
CHEMICALS
596,000 Dow Chemical Co.................................................................... 54,049,750
--------------
COMPUTERS
522,000 International Business Machines Corp............................................... 55,299,375
--------------
CONGLOMERATES
604,000 Minnesota Mining & Manufacturing Co................................................ 55,870,000
1,125,000 Tenneco, Inc....................................................................... 53,859,375
--------------
109,729,375
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CONTAINERS - METAL & GLASS
1,000,000 Crown Cork & Seal Co., Inc......................................................... $ 46,125,000
--------------
HEALTH & PERSONAL CARE
661,000 Bristol-Myers Squibb Co............................................................ 54,697,750
--------------
MACHINERY - DIVERSIFIED
1,007,000 Deere & Co......................................................................... 54,126,250
--------------
METALS & MINING
695,000 Phelps Dodge Corp.................................................................. 53,949,375
--------------
OIL - DOMESTIC
1,014,300 Ashland, Inc....................................................................... 55,152,562
--------------
OIL INTEGRATED - INTERNATIONAL
645,000 Chevron Corp....................................................................... 53,655,937
--------------
PAPER & FOREST PRODUCTS
995,000 International Paper Co............................................................. 54,787,188
--------------
RETAIL - MERCHANDISING
903,000 Dayton-Hudson Corp................................................................. 54,123,563
--------------
TELECOMMUNICATIONS
1,094,000 Sprint Corp........................................................................ 54,700,000
--------------
TELEPHONES
1,195,000 AT&T Corp.......................................................................... 52,953,438
--------------
TIRE & RUBBER GOODS
804,000 Goodyear Tire & Rubber Co.......................................................... 55,275,000
--------------
TOBACCO
1,287,000 Philip Morris Companies, Inc....................................................... 53,490,938
--------------
UTILITIES - ELECTRIC
1,510,000 GPU, Inc........................................................................... 54,171,250
--------------
TOTAL UNITED STATES................................................................ 1,131,508,813
--------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $3,160,474,184)................................................... 3,775,552,345
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (1.1%)
U.S. GOVERNMENT AGENCY
$ 43,000 Federal Home Loan Mortgage Corp. 6.05% due 10/01/97
(AMORTIZED COST $43,000,000)..................................................... $ 43,000,000
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $3,203,474,184) (B).................................................... 100.0 % 3,818,552,345
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES.......................................... 0.0 1,168,408
------ ---------------
NET ASSETS.............................................................................. 100.0 % $ 3,819,720,753
------ ---------------
------ ---------------
</TABLE>
- ---------------------
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $742,606,634 and the
aggregate gross unrealized depreciation is $127,528,473 resulting in net
unrealized appreciation of $615,078,161.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT SEPTEMBER 30, 1997:
<TABLE>
<CAPTION>
UNREALIZED
IN DELIVERY APPRECIATION
CONTRACTS TO DELIVER EXCHANGE FOR DATE (DEPRECIATION)
--------------------------------------------------------------------
<S> <C> <C> <C>
$ 640,950 MYR 2,008,673 10/01/97 $ (21,563)
$ 3,603,905 Y 435,820,181 10/01/97 13,461
Y 636,686,298 $ 5,261,653 10/01/97 (22,928)
ITL 1,538,559,329 $ 891,274 10/01/97 (2,302)
ITL 2,907,210,335 $ 1,686,222 10/02/97 (2,249)
L 587,423 $ 942,796 10/02/97 (6,773)
$ 1,734,311 Y 208,464,240 10/02/97 (4,031)
$ 541,233 MYR 1,696,116 10/02/97 (18,225)
$ 1,757,658 MYR 5,588,826 10/03/97 (34,308)
$ 600,129 Y 72,204,562 10/03/97 (822)
HKD 8,166,147 $ 1,055,194 10/03/97 (205)
L 430,937 $ 694,468 10/06/97 (2,142)
$ 1,652,176 DEM 2,904,558 10/06/97 (3,638)
$ 533,842 MYR 1,730,502 10/06/97 (230)
FRF 3,469,560 $ 586,743 10/31/97 421
FRF 16,994,064 $ 2,879,355 10/31/97 7,523
FRF 12,680,345 $ 2,140,870 10/31/97 (1,985)
--------------
Net unrealized depreciation.................. $ (99,996)
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
SUMMARY OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Aerospace & Defense............................................................. $ 53,040,875 1.4 %
Automobiles..................................................................... 19,237,624 0.5
Automotive...................................................................... 146,778,219 3.8
Banking......................................................................... 369,778,060 9.7
Brewers......................................................................... 68,632,603 1.8
Building & Construction......................................................... 51,195,202 1.3
Building Materials.............................................................. 91,379,108 2.4
Chemicals....................................................................... 106,277,761 2.8
Computer Services............................................................... 13,449,203 0.4
Computers....................................................................... 55,299,375 1.4
Conglomerates................................................................... 157,487,778 4.1
Containers - Metal & Glass...................................................... 46,125,000 1.2
Electric........................................................................ 19,270,588 0.5
Electrical Equipment............................................................ 35,266,640 0.9
Electronics & Electrical........................................................ 374,207,171 9.8
Energy.......................................................................... 11,470,522 0.3
Entertainment & Leisure Time.................................................... 46,614,376 1.2
Financial Services.............................................................. 51,410,942 1.3
Foods & Beverages............................................................... 74,497,989 2.0
Gold............................................................................ 15,129,667 0.4
Health & Personal Care.......................................................... 80,185,647 2.1
Insurance....................................................................... 14,027,260 0.4
Leisure......................................................................... 24,124,646 0.6
Machinery....................................................................... 92,141,559 2.4
Machinery - Diversified......................................................... 94,996,508 2.5
Metals & Mining................................................................. 53,949,375 1.4
Multi-Industry.................................................................. 117,163,878 3.1
Natural Gas..................................................................... 45,975,836 1.2
Oil - Domestic.................................................................. 55,152,562 1.4
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Oil Integrated - International.................................................. $ 144,273,099 3.8 %
Oil Related..................................................................... 82,900,423 2.2
Paper & Forest Products......................................................... 70,801,223 1.9
Pharmaceuticals................................................................. 95,129,233 2.5
Real Estate..................................................................... 30,167,496 0.8
Retail - Department Stores...................................................... 18,757,023 0.5
Retail - Merchandising.......................................................... 78,407,919 2.1
Retail - Specialty.............................................................. 12,468,415 0.3
Steel........................................................................... 14,938,527 0.4
Steel & Iron.................................................................... 42,720,843 1.1
Telecommunications.............................................................. 212,020,596 5.6
Telephones...................................................................... 52,953,438 1.4
Television...................................................................... 22,161,340 0.6
Textiles - Apparel.............................................................. 47,549,162 1.2
Tire & Rubber Goods............................................................. 55,275,000 1.4
Tobacco......................................................................... 125,050,592 3.3
Transportation.................................................................. 59,556,374 1.6
U.S. Government Agency.......................................................... 43,000,000 1.1
Utilities - Electric............................................................ 176,741,296 4.6
Utilities - Water............................................................... 49,414,372 1.3
-------------- -----
$3,818,552,345 100.0 %
-------------- -----
-------------- -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Common Stocks................................................................... $3,757,115,902 98.4 %
Preferred Stocks................................................................ 18,436,443 0.5
Short-Term Investment........................................................... 43,000,000 1.1
-------------- -----
$3,818,552,345 100.0 %
-------------- -----
-------------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $3,203,474,184)............................................................. $3,818,552,345
Cash........................................................................................... 783,561
Receivable for:
Investments sold........................................................................... 23,885,330
Dividends.................................................................................. 10,285,958
Shares of beneficial interest sold......................................................... 6,999,884
Foreign withholding taxes reclaimed........................................................ 4,091,813
Deferred organizational expenses............................................................... 26,975
Prepaid expenses and other assets.............................................................. 188,003
--------------
TOTAL ASSETS.............................................................................. 3,864,813,869
--------------
LIABILITIES:
Payable for:
Investments purchased...................................................................... 36,576,212
Shares of beneficial interest repurchased.................................................. 3,088,694
Plan of distribution fee................................................................... 2,574,404
Investment management fee.................................................................. 2,290,619
Accrued expenses and other payables............................................................ 563,187
--------------
TOTAL LIABILITIES......................................................................... 45,093,116
--------------
NET ASSETS................................................................................ $3,819,720,753
--------------
--------------
COMPOSITION OF NET ASSETS:
Paid-in-capital................................................................................ $2,991,542,317
Net unrealized appreciation.................................................................... 614,900,016
Accumulated undistributed net investment income................................................ 12,383,576
Accumulated undistributed net realized gain.................................................... 200,894,844
--------------
NET ASSETS................................................................................ $3,819,720,753
--------------
--------------
CLASS A SHARES:
Net Assets..................................................................................... $4,460,415
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 300,475
NET ASSET VALUE PER SHARE................................................................. $14.84
--------------
--------------
MAXIMUM OFFERING PRICE PER SHARE
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)......................................... $15.66
--------------
--------------
CLASS B SHARES:
Net Assets..................................................................................... $3,801,864,216
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 256,018,914
NET ASSET VALUE PER SHARE................................................................. $14.85
--------------
--------------
CLASS C SHARES:
Net Assets..................................................................................... $4,639,332
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 312,689
NET ASSET VALUE PER SHARE................................................................. $14.84
--------------
--------------
CLASS D SHARES:
Net Assets..................................................................................... $8,756,790
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 589,739
NET ASSET VALUE PER SHARE................................................................. $14.85
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997* (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $5,922,089 foreign withholding tax)......................................... $ 51,541,675
Interest...................................................................................... 2,527,990
------------
TOTAL INCOME............................................................................. 54,069,665
------------
EXPENSES
Plan of distribution fee (Class B shares)..................................................... 13,843,591
Investment management fee..................................................................... 12,446,437
Transfer agent fees and expenses.............................................................. 1,845,250
Custodian fees................................................................................ 869,644
Registration fees............................................................................. 169,795
Shareholder reports and notices............................................................... 93,262
Professional fees............................................................................. 36,945
Organizational expenses....................................................................... 18,079
Trustees' fees and expenses................................................................... 11,841
Other......................................................................................... 21,993
------------
TOTAL EXPENSES........................................................................... 29,356,837
------------
NET INVESTMENT INCOME.................................................................... 24,712,828
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................................................... 211,708,853
Foreign exchange transactions............................................................. (192,309)
------------
NET GAIN................................................................................. 211,516,544
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... 287,808,241
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies....................................................... 35,833
------------
NET APPRECIATION......................................................................... 287,844,074
------------
NET GAIN................................................................................. 499,360,618
------------
------------
NET INCREASE.................................................................................. $524,073,446
------------
------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
SEPTEMBER 30, ENDED
1997* MARCH 31, 1997
- -----------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................................................. $ 24,712,828 $ 25,266,634
Net realized gain...................................................... 211,516,544 255,587,707
Net change in unrealized appreciation.................................. 287,844,074 39,186,358
----------------- --------------
NET INCREASE...................................................... 524,073,446 320,040,699
----------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares..................................................... (12,171) --
Class B shares..................................................... (12,297,906) (27,883,886)
Class C shares..................................................... (8,510) --
Class D shares..................................................... (26,122) --
Net realized gain
Class B shares..................................................... (145,589,171) (201,225,779)
----------------- --------------
TOTAL DIVIDENDS AND DISTRIBUTIONS................................. (157,933,880) (229,109,665)
----------------- --------------
Net increase from transactions in shares of beneficial interest........ 415,090,099 513,559,240
----------------- --------------
NET INCREASE...................................................... 781,229,665 604,490,274
NET ASSETS:
Beginning of period.................................................... 3,038,491,088 2,434,000,814
----------------- --------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $12,383,576 AND
$15,457, RESPECTIVELY)............................................. $ 3,819,720,753 $3,038,491,088
----------------- --------------
----------------- --------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Global Dividend Growth Securities (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is to
provide reasonable current income and long-term growth of income and capital.
The Fund seeks to achieve its objective by investing primarily in common stock
of issuers worldwide, with a record of paying dividends and the potential for
increasing dividends. The Fund was organized as a Massachusetts business trust
on January 12, 1993 and commenced operations on June 30, 1993. On July 28, 1997,
the Fund commenced offering three additional classes of shares, with the then
current shares designated as Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American, or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") that sale
and 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); and (4) short-term debt securities having a maturity date of
more than sixty
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
days at time of purchase are valued on a mark-to-market basis until sixty days
prior to maturity and thereafter at amortized cost based on their value on the
61st day. Short-term debt securities having a maturity date of sixty days or
less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends from foreign securities which are recorded as soon
as the Fund is informed after the ex-dividend date. Discounts are accreted over
the life of the respective securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record 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.
H. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of approximately $180,000 which have been reimbursed for the full
amount thereof. 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. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined at the close of
each business day: 0.75% to the portion of daily net assets not exceeding $1
billion; 0.725% to the portion of daily net assets exceeding $1 billion but not
exceeding $1.5 billion; 0.70% to the portion of daily net assets exceeding $1.5
billion but not exceeding $2.5 billion; and 0.675% to the portion of daily net
assets exceeding $2.5 billion. Effective May 1, 1997, the Agreement was amended
to reduce the annual fee to 0.65% to the portion of daily net assets in excess
of $3.5 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment 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 Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- 0.25% of the average
daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a) the
average daily aggregate gross sales of the Class B shares since the inception of
the Fund (not including reinvestment of dividend or capital gain distributions)
less the average daily aggregate net asset value of the Class B shares redeemed
since the Fund's inception upon which a contingent deferred sales charge has
been imposed or waived; or (b) the average daily net assets of Class B; and
(iii) Class C -- 1.0% of the average daily net assets of Class C. In the case of
Class A shares, amounts paid under the Plan are paid to the Distributor for
services provided. In the case of Class B and Class C shares, amounts paid under
the Plan are paid to the Distributor for services provided and the expenses
borne by it and others in the distribution of the shares of these Classes,
including the payment of commissions for sales of these Classes and incentive
compensation to, and expenses of, the account executives of Dean Witter Reynolds
Inc. ("DWR"), an affiliate of the Investment Manager and Distributor, and others
who engage in or support distribution of the shares or who service shareholder
accounts, including overhead and telephone expenses; printing and distribution
of prospectuses and reports used in connection with the offering of these shares
to other than current shareholders; and preparation, printing and distribution
of sales literature and advertising materials. In addition, the Distributor may
utilize fees paid pursuant to the Plan, in the case of Class B shares, to
compensate DWR and other selected broker-dealers for their opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $76,703,711 at September 30, 1997.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C,
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
respectively, will not be reimbursed by the Fund through payments in any
subsequent year, except that expenses representing a gross sales credit to
account executives may be reimbursed in the subsequent calendar year. For the
period ended September 30, 1997, the distribution fee was accrued for Class A
shares and Class C shares at the annual rate of 0.25% and 1.00%, respectively.
The Distributor has informed the Fund that for the six months ended September
30, 1997, it received contingent deferred sales charges from certain redemptions
of the Fund's Class B shares of $2,121,150 and received $57,695 in front-end
sales charges from sales of the Fund's Class A shares. The respective
shareholders pay such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended September 30, 1997 aggregated
$1,131,076,001 and $804,156,085, respectively.
For the six months ended September 30, 1997, the Fund incurred $25,010 in
brokerage commissions with DWR for portfolio transactions executed on behalf of
the Fund. At September 30, 1997, included in the Fund's payable for investments
purchased and receivable for investments sold were unsettled trades with DWR of
$2,664,107 and $1,852,414, respectively.
For the period May 31, 1997 through September 30, 1997, the Fund incurred
brokerage commissions of $512,940 with Morgan Stanley & Co., Inc., an affiliate
of the Investment Manager since May 31, 1997, for portfolio transactions
executed on behalf of the Fund. At September 30, 1997, included in the Fund's
payable for investments purchased and receivable for investments sold were
unsettled trades with Morgan Stanley & Co., Inc. of $3,514,789 and $2,990,233,
respectively.
Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended September 30, 1997
included in Trustees' fees and expenses in the Statement of Operations amounted
to $5,070. At September 30, 1997, the Fund had an accrued pension liability of
$33,684 which is included in accrued expenses in the Statement of Assets and
Liabilities.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1997 MARCH 31, 1997
---------------------------- --------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold............................................................. 308,839 $ 4,473,891 -- --
Reinvestment of dividends........................................ 573 8,360 -- --
Redeemed......................................................... (8,937) (131,228) -- --
----------- -------------- ----------- ------------
Net increase - Class A........................................... 300,475 4,351,023 -- --
----------- -------------- ----------- ------------
CLASS B SHARES
Sold............................................................. 37,526,381 540,824,507 51,442,695 $677,741,563
Reinvestment of dividends and distributions...................... 10,250,005 147,380,804 16,426,517 213,686,419
Redeemed......................................................... (20,140,837) (290,440,265) (28,703,758) (377,868,742)
----------- -------------- ----------- ------------
Net increase - Class B........................................... 27,635,549 397,765,046 39,165,454 513,559,240
----------- -------------- ----------- ------------
CLASS C SHARES*
Sold............................................................. 314,674 4,600,905 -- --
Reinvestment of dividends........................................ 523 7,619 -- --
Redeemed......................................................... (2,508) (36,153) -- --
----------- -------------- ----------- ------------
Net increase - Class C........................................... 312,689 4,572,371 -- --
----------- -------------- ----------- ------------
CLASS D SHARES*
Sold............................................................. 587,977 8,375,956 -- --
Reinvestment of dividends........................................ 1,777 25,921 -- --
Redeemed......................................................... (15) (218) -- --
----------- -------------- ----------- ------------
Net increase - Class D........................................... 589,739 8,401,659 -- --
----------- -------------- ----------- ------------
Net increase in Fund............................................. 28,838,452 $ 415,090,099 39,165,454 $513,559,240
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
- ---------------------
* For the period July 28, 1997 (issue date) through September 30, 1997.
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $1,000 during fiscal 1997.
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and income from the
mark-to-market of passive foreign investment companies.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At September 30, 1997, there were outstanding forward contracts used to
facilitate settlement of foreign currency denominated portfolio transactions.
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX PERIOD
MONTHS JUNE 30,
ENDED 1993*
SEPTEMBER FOR THE YEAR ENDED MARCH 31 THROUGH
30, ------------------------------- MARCH 31,
1997**++ 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 13.30 $ 12.86 $ 11.41 $ 10.81 $ 10.00
---------- --------- --------- --------- ---------
Net investment income.............. 0.10 0.12 0.13 0.14 0.05
Net realized and unrealized gain... 2.12 1.44 1.96 0.88 0.84
---------- --------- --------- --------- ---------
Total from investment operations... 2.22 1.56 2.09 1.02 0.89
---------- --------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income........... (0.05) (0.13) (0.15) (0.14) (0.05)
Net realized gain............... (0.62) (0.99) (0.49) (0.28) (0.03)
---------- --------- --------- --------- ---------
Total dividends and
distributions..................... (0.67) (1.12) (0.64) (0.42) (0.08)
---------- --------- --------- --------- ---------
Net asset value, end of period..... $ 14.85 $ 13.30 $ 12.86 $ 11.41 $ 10.81
---------- --------- --------- --------- ---------
---------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 16.83%(1) 12.58% 18.77% 9.60% 8.89%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 2.01%(2) 1.75% 1.85% 1.97% 2.03%(2)
Net investment income.............. 1.41%(2) 0.93% 1.05% 1.22% 0.66%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $3,802 $3,038 $2,434 $1,854 $1,121
Portfolio turnover rate............ 24%(1) 40% 40% 32% 21%(1)
Average commission rate paid....... $0.0284 $0.0289 $0.0311 -- --
</TABLE>
- ---------------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30,
1997++
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 14.91
------
Net investment income................................................. 0.04
Net realized and unrealized loss...................................... (0.07)
------
Total from investment operations...................................... (0.03)
------
Less dividends from net investment income............................. (0.04)
------
Net asset value, end of period........................................ $ 14.84
------
------
TOTAL INVESTMENT RETURN+.............................................. (0.18)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.52%(2)
Net investment income................................................. 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $ 4,460
Portfolio turnover rate............................................... 24%(1)
Average commission rate paid.......................................... $0.0284
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 14.91
------
Net investment income................................................. 0.03
Net realized and unrealized loss...................................... (0.07)
------
Total from investment operations...................................... (0.04)
------
Less dividends from net investment income............................. (0.03)
------
Net asset value, end of period........................................ $ 14.84
------
------
TOTAL INVESTMENT RETURN+.............................................. (0.27)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.25%(2)
Net investment income................................................. 1.03%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $ 4,639
Portfolio turnover rate............................................... 24%(1)
Average commission rate paid.......................................... $0.0284
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30,
1997++
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 14.91
------
Net investment income................................................. 0.05
Net realized and unrealized loss...................................... (0.07)
------
Total from investment operations...................................... (0.02)
------
Less dividends from net investment income............................. (0.04)
------
Net asset value, end of period........................................ $ 14.85
------
------
TOTAL INVESTMENT RETURN+.............................................. (0.10)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.28%(2)
Net investment income................................................. 2.08%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $ 8,757
Portfolio turnover rate............................................... 24%(1)
Average commission rate paid.......................................... $0.0284
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Paul D. Vance
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
GLOBAL DIVIDEND GROWTH SECURITIES
[PHOTO]
SEMIANNUAL REPORT
SEPTEMBER 30, 1997
<PAGE>
PROSPECTUS
JULY 28, 1997
Dean Witter World Wide Investment Trust (the "Fund") is an
open-end diversified management investment company whose investment objective is
total return on its assets primarily through long-term capital growth and to a
lesser extent from income. The Fund will seek to achieve such objective through
investments in all types of common stocks and equivalents, preferred stocks and
bonds and other debt obligations of domestic and foreign companies and
governments and international organizations.
The Fund offers four classes of shares (each, a "Class"), each
with a different combination of sales charges, ongoing fees and other features.
The different distribution arrangements permit an investor to choose the method
of purchasing shares that the investor believes is most beneficial given the
amount of the purchase, the length of time the investor expects to hold the
shares and other relevant circumstances. Except as discussed herein, shares of
the Fund held prior to July 28, 1997 have been designated Class B shares. (See
"Purchase of Fund Shares--Alternative Purchase Arrangements.")
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 July 28, 1997, 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.
DEAN WITTER DISTRIBUTORS INC.
DISTRIBUTOR
TABLE OF CONTENTS
Prospectus Summary/2
Summary of Fund Expenses/5
Financial Highlights/7
The Fund and its Management/8
Investment Objective and Policies/8
Risk Considerations and Investment Practices/9
Investment Restrictions/16
Purchase of Fund Shares/17
Shareholder Services/28
Redemptions and Repurchases/30
Dividends, Distributions and Taxes/31
Performance Information/33
Additional Information/33
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.
Dean Witter
World Wide Investment Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)
<PAGE>
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The The Fund is organized as a trust, commonly known as a Massachusetts business trust, and is
Fund an open-end diversified management investment company investing in all types of common
stocks and equivalents (such as convertible debt securities and warrants), preferred
stocks and bonds and other debt obligations of domestic and foreign companies and
governments and international organizations.
- ----------------------------------------------------------------------------------------------------------
Shares Shares of beneficial interest with $0.01 par value (see page 33). The Fund offers four
Offered Classes of shares, each with a different combination of sales charges, ongoing fees and
other features (see pages 17-26).
- ----------------------------------------------------------------------------------------------------------
Minimum The minimum initial investment for each Class is $1,000 ($100 if the account is opened
Purchase through EasyInvest-SM-). Class D shares are only available to persons investing $5 million
or more and to certain other limited categories of investors. For the purpose of meeting
the minimum $5 million investment for Class D shares, and subject to the $1,000 minimum
initial investment for each Class of the Fund, an investor's existing holdings of Class A
shares and shares of funds for which Dean Witter InterCapital Inc. serves as investment
manager ("Dean Witter Funds") that are sold with a front-end sales charge, and concurrent
investments in Class D shares of the Fund and other Dean Witter Funds that are multiple
class funds, will be aggregated. The minimum subsequent investment is $100 (see
page 17).
- ----------------------------------------------------------------------------------------------------------
Investment The investment objective of the Fund is total return on its assets primarily through
Objective long-term capital growth and to a lesser extent from income.
- ----------------------------------------------------------------------------------------------------------
Investment The Fund maintains a flexible investment policy and invests in a diversified portfolio of
Policies securities of companies and countries located throughout the world. The percentage of the
Fund's assets invested in particular geographic sectors will shift from time to time in
accordance with the judgment of the Investment Manager and the Sub-Adviser (see pages
8-16).
- ----------------------------------------------------------------------------------------------------------
Investment Dean Witter InterCapital Inc. ("InterCapital"), the Investment Manager of the Fund, and
Manager and its wholly-owned subsidiary, Dean Witter Services Company Inc., serve in various
Sub-Adviser investment management, advisory, management and administrative capacities to 100
investment companies with assets of approximately $96.6 billion at June 30, 1997.
InterCapital has retained Morgan Grenfell Investment Services Limited as Sub-Adviser to
provide investment advice and manage the Fund's non-U.S. portfolio. Morgan Grenfell
Investment Services Limited currently manages assets in excess of $15 billion primarily
for U.S. corporate and public employee benefit plans, endowments, investment companies and
foundations.
- ----------------------------------------------------------------------------------------------------------
Management Fees The Investment Manager receives a monthly fee from the Fund at the annual rate of 1.0% of
daily net assets not exceeding $500 million and 0.95% of daily net assets exceeding $500
million. The Sub-Adviser receives a monthly fee from the Investment Manager equal to 40%
of the Investment Manager's monthly fee (see page 8). Although the management fee is
higher than that paid by most other investment companies, the fee reflects the specialized
nature of the Fund's investment policies.
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Distributor Dean Witter Distributors Inc. (the "Distributor"). The Fund has adopted a distribution
and plan pursuant to Rule 12b-1 under the Investment Company Act (the "12b-1 Plan") with
Distribution respect to the distribution fees paid by the Class A, Class B and Class C shares of the
Fee Fund to the Distributor. The entire 12b-1 fee payable by Class A and a portion of the
12b-1 fee payable by each of Class B and Class C equal to 0.25% of the average daily net
assets of the Class are currently each characterized as a service fee within the meaning
of the National Association of Securities Dealers, Inc. guidelines. The remaining portion
of the 12b-1 fee, if any, is characterized as an asset-based sales charge (see pages 17
and 25).
- ----------------------------------------------------------------------------------------------------------
Alternative Four classes of shares are offered:
Purchase
Arrangements - Class A shares are offered with a front-end sales charge, starting at 5.25% and reduced
for larger purchases. Investments of $1 million or more (and investments by certain other
limited categories of investors) are not subject to any sales charge at the time of
purchase but a contingent deferred sales charge ("CDSC") of 1.0% may be imposed on
redemptions within one year of purchase. The Fund is authorized to reimburse the
Distributor for specific expenses incurred in promoting the distribution of the Fund's
Class A shares and servicing shareholder accounts pursuant to the Fund's 12b-1 Plan.
Reimbursement may in no event exceed an amount equal to payments at an annual rate of
0.25% of average daily net assets of the Class (see pages 17, 20 and 25).
- Class B shares are offered without a front-end sales charge, but will in most cases be
subject to a CDSC (scaled down from 5.0% to 1.0%) if redeemed within six years after
purchase. The CDSC will be imposed on any redemption of shares if after such redemption
the aggregate current value of a Class B account with the Fund falls below the aggregate
amount of the investor's purchase payments made during the six years preceding the
redemption. A different CDSC schedule applies to investments by certain qualified plans.
Class B shares are also subject to a 12b-1 fee assessed at the annual rate of 1.0% of the
lesser of: (a) the average daily net sales of the Fund's Class B shares or (b) the average
daily net assets of Class B. All shares of the Fund held prior to July 28, 1997 (other
than the shares held by certain employee benefit plans established by Dean Witter Reynolds
Inc. and its affiliate, SPS Transaction Services, Inc.) have been designated Class B
shares. Shares held by those employee benefit plans prior to July 28, 1997 have been
designated Class D shares. Shares held before May 1, 1997 that have been designated Class
B shares will convert to Class A shares in May, 2007. In all other instances, Class B
shares convert to Class A shares approximately ten years after the date of the original
purchase (see pages 17, 22 and 25).
- Class C shares are offered without a front-end sales charge, but will in most cases be
subject to a CDSC of 1.0% if redeemed within one year after purchase. The Fund is
authorized to reimburse the Distributor for specific expenses incurred in promoting the
distribution of the Fund's Class C shares and servicing shareholder accounts pursuant to
the Fund's 12b-1 Plan. Reimbursement may in no event exceed an amount equal to payments at
an annual rate of 1.0% of average daily net assets of the Class (see pages 17 and 25).
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- Class D shares are offered only to investors meeting an initial investment minimum of $5
million and to certain other limited categories of investors. Class D shares are offered
without a front-end sales charge or CDSC and are not subject to any 12b-1 fee (see pages
17 and 25).
- ----------------------------------------------------------------------------------------------------------
Dividends Dividends from net investment income and distributions from net capital gains, if any, are
and paid at least once per year. The Fund may, however, determine to retain all or part of any
Capital Gains net long-term capital gains in any year for reinvestment. Dividends and capital gains
Distributions distributions paid on shares of a Class are automatically reinvested in additional shares
of the same Class at net asset value unless the shareholder elects to receive cash. Shares
acquired by dividend and distribution reinvestment will not be subject to any sales charge
or CDSC (see pages 28 and 31).
- ----------------------------------------------------------------------------------------------------------
Redemption Shares are redeemable by the shareholder at net asset value less any applicable CDSC on
Class A, Class B or Class C shares. An account may be involuntarily redeemed 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 30).
- ----------------------------------------------------------------------------------------------------------
Risks The Fund is intended for long-term investors who can accept the risks involved in
investments in the securities of companies and countries located throughout the world. The
net asset value of the Fund's shares will fluctuate with changes in the market value of
its portfolio securities. It should be recognized that the foreign securities and markets
in which the Fund will invest pose different and greater risks than those customarily
associated with domestic securities and their markets. Furthermore, investors should
consider other risks associated with a portfolio of international securities, including
fluctuations in foreign currency exchange rates (i.e., if a substantial portion of the
Fund's assets is denominated in foreign currencies which decrease in value with respect to
the U.S. dollar, the value of the investor's shares and the distributions made on those
shares will, likewise, decrease in value), foreign securities exchange controls and
foreign tax rates, as well as risks associated with transactions in forward currency
contracts, options and futures contracts (see pages 8-16).
- ----------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
ELSEWHERE
IN THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
4
<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 based on
the expenses and fees for the fiscal year ended March 31, 1997.
<TABLE>
<CAPTION>
Class A Class B Class C Class D
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
- -----------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)................................................. 5.25%(1) None None None
Sales Charge Imposed on Dividend Reinvestments................... None None None None
Maximum Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds)................. None(2) 5.00%(3) 1.00%(4) None
Redemption Fees.................................................. None None None None
Exchange Fee..................................................... None None None None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
- -----------------------------------------------------------------
Management Fees.................................................. 1.00% 1.00% 1.00% 1.00%
12b-1 Fees (5) (6)............................................... 0.25% 1.00% 1.00% None
Other Expenses................................................... 0.36% 0.36% 0.36% 0.36%
Total Fund Operating Expenses (7)................................ 1.61% 2.36% 2.36% 1.36%
</TABLE>
- ------------
(1) REDUCED FOR PURCHASES OF $25,000 AND OVER (SEE "PURCHASE OF FUND
SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES").
(2) INVESTMENTS THAT ARE NOT SUBJECT TO ANY SALES CHARGE AT THE TIME OF PURCHASE
ARE SUBJECT TO A CDSC OF 1.00% THAT WILL BE IMPOSED ON REDEMPTIONS MADE
WITHIN ONE YEAR AFTER PURCHASE, EXCEPT FOR CERTAIN SPECIFIC CIRCUMSTANCES
(SEE "PURCHASE OF FUND SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A
SHARES").
(3) THE CDSC IS SCALED DOWN TO 1.00% DURING THE SIXTH YEAR, REACHING ZERO
THEREAFTER.
(4) ONLY APPLICABLE TO REDEMPTIONS MADE WITHIN ONE YEAR AFTER PURCHASE (SEE
"PURCHASE OF FUND SHARES-- LEVEL LOAD ALTERNATIVE--CLASS C SHARES").
(5) THE 12b-1 FEE IS ACCRUED DAILY AND PAYABLE MONTHLY. THE ENTIRE 12b-1 FEE
PAYABLE BY CLASS A AND A PORTION OF THE 12b-1 FEE PAYABLE BY EACH OF CLASS B
AND CLASS C EQUAL TO 0.25% OF THE AVERAGE DAILY NET ASSETS OF THE CLASS ARE
CURRENTLY EACH CHARACTERIZED AS A SERVICE FEE WITHIN THE MEANING OF NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD") GUIDELINES AND ARE PAYMENTS
MADE FOR PERSONAL SERVICE AND/OR MAINTENANCE OF SHAREHOLDER ACCOUNTS. THE
REMAINDER OF THE 12b-1 FEE, IF ANY, IS AN ASSET-BASED SALES CHARGE, AND IS A
DISTRIBUTION FEE PAID TO THE DISTRIBUTOR TO COMPENSATE IT FOR THE SERVICES
PROVIDED AND THE EXPENSES BORNE BY THE DISTRIBUTOR AND OTHERS IN THE
DISTRIBUTION OF THE FUND'S SHARES (SEE "PURCHASE OF FUND SHARES--PLAN OF
DISTRIBUTION").
(6) UPON CONVERSION OF CLASS B SHARES TO CLASS A SHARES, SUCH SHARES WILL BE
SUBJECT TO THE LOWER 12b-1 FEE APPLICABLE TO CLASS A SHARES. NO SALES CHARGE
IS IMPOSED AT THE TIME OF CONVERSION OF CLASS B SHARES TO CLASS A SHARES.
CLASS C SHARES DO NOT HAVE A CONVERSION FEATURE AND, THEREFORE, ARE SUBJECT
TO AN ONGOING 1.00% DISTRIBUTION FEE (SEE "PURCHASE OF FUND
SHARES--ALTERNATIVE PURCHASE ARRANGEMENTS").
(7) THERE WERE NO OUTSTANDING SHARES OF CLASS A, CLASS C OR CLASS D PRIOR TO THE
DATE OF THIS PROSPECTUS. ACCORDINGLY, "TOTAL FUND OPERATING EXPENSES," AS
SHOWN ABOVE WITH RESPECT TO THOSE CLASSES, ARE BASED UPON THE SUM OF 12b-1
FEES, MANAGEMENT FEES AND ESTIMATED "OTHER EXPENSES."
5
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXAMPLES 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) a 5% annual return and (2) redemption at the end of
each time period:
Class A...................................................... $68 $101 $136 $234
Class B...................................................... $74 $104 $146 $270
Class C...................................................... $34 $ 74 $126 $270
Class D...................................................... $14 $ 43 $ 74 $163
You would pay the following expenses on the same $1,000
investment assuming no redemption at the end of the period:
Class A...................................................... $68 $101 $136 $234
Class B...................................................... $24 $ 74 $126 $270
Class C...................................................... $24 $ 74 $126 $270
Class D...................................................... $14 $ 43 $ 74 $163
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF EACH CLASS 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," "Purchase of Fund Shares--Plan of Distribution"
and "Redemptions and Repurchases."
Long-term shareholders of Class B and Class C may pay more in sales charges,
including distribution fees, than the economic equivalent of the maximum
front-end sales charge permitted by the NASD.
6
<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, 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. All shares of the Fund held prior to July 28,
1997, other than the shares held by certain employee benefit plans established
by Dean Witter Reynolds Inc. and its affiliate, SPS Transaction Services, Inc.,
have been designated Class B shares. Shares held by those employee benefit plans
prior to July 28, 1997 have been designated Class D shares.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31
-----------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING PERFORMANCE:
Net asset value,
beginning of
period............. $ 18.23 $ 15.71 $ 18.20 $ 14.72 $ 14.65 $ 14.57 $ 14.84 $ 14.98 $ 14.93 $ 17.36
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment
income (loss)...... (0.18) (0.06) (0.02) (0.05) -- -- 0.23 0.11 0.08 0.04
Net realized and
unrealized gain
(loss)............. 0.45 2.60 (1.83) 4.24 0.39 1.05 0.18 0.82 1.24 (0.07)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations......... 0.27 2.54 (1.85) 4.19 0.39 1.05 0.41 0.93 1.32 (0.03)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Less dividends and
distributions:
From net
investment
income........... -- -- -- -- -- (0.05) (0.23) (0.11) (0.08) (0.15)
In excess of net
investment
income........... -- -- (0.02) -- -- -- -- -- -- --
From net realized
gain............. (1.23) (0.02) (0.39) (0.71) (0.32) (0.92) (0.45) (0.96) (1.19) (2.25)
In excess of net
realized gain.... -- -- (0.23) -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions...... (1.23) (0.02) (0.64) (0.71) (0.32) (0.97) (0.68) (1.07) (1.27) (2.40)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end
of period.......... $ 17.27 $ 18.23 $ 15.71 $ 18.20 $ 14.72 $ 14.65 $ 14.57 $ 14.84 $ 14.98 $ 14.93
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL INVESTMENT
RETURN+.............. 1.61% 16.20% (10.37)% 28.40% 2.69% 7.33% 2.80% 6.09% 9.31% 0.39%
Ratios to average
net
assets:
Expenses.......... 2.36% 2.45% 2.41% 2.40% 2.42% 2.27% 2.29% 2.21% 2.18% 2.13%
Net investment
income (loss).... (0.84)% (0.21)% (0.32)% (0.61)% 0.06% 0.03% 1.53% 0.70% 0.50% 0.23%
SUPPLEMENTAL DATA:
Net assets, end of
period,
in millions........ $419 $520 $512 $494 $218 $263 $279 $306 $312 $368
Portfolio turnover
rate............... 48% 126% 67% 68% 139% 89% 68% 75% 67% 70%
Average commission
rate paid.......... $0.0116 $0.0169 -- -- -- -- -- -- -- --
</TABLE>
- ------------
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON THE NET
ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
7
<PAGE>
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
Dean Witter World Wide Investment Trust (the "Fund") is an open-end
diversified management investment company organized under the laws of the
Commonwealth of Massachusetts as a business trust on July 7, 1983.
Dean Witter InterCapital Inc. ("InterCapital" or the "Investment Manager"),
whose address is Two World Trade Center, New York, New York 10048, is the Fund's
Investment Manager. The Investment Manager, which was incorporated in July,
1992, is a wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover &
Co., a preeminent global financial services firm that maintains leading market
positions in each of its three primary businesses--securities, asset management
and credit services.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to 100 investment companies, thirty of which are
listed on the New York Stock Exchange, with combined total assets of
approximately $93.1 billion at June 30, 1997. InterCapital also manages
portfolios of pension plans, other institutions and individuals which aggregated
approximately $3.5 billion at such date.
The Fund has retained the Investment Manager to manage its business affairs
and manage the investment of the Fund's United States assets, including the
placing of orders for the purchase and sale of portfolio securities, and to
supervise the investment of all the Fund's assets. In addition, the Fund has
retained InterCapital to provide it with administrative services and
InterCapital has, in turn, retained Dean Witter Services Company Inc. to perform
these administrative services.
Under a Sub-Advisory Agreement between Morgan Grenfell Investment Services
Limited (the "Sub-Adviser") and the Investment Manager, the Sub-Adviser provides
the Fund with investment advice and portfolio management relating to the Fund's
investments in securities issued by issuers located outside the United States,
subject to the overall supervision of the Investment Manager. The Sub-Adviser,
whose address is 20 Finsbury Circus, London, England, currently manages assets
in excess of $15 billion primarily for U.S. corporate and public employee
benefit plans, endowments, investment companies and foundations. The Sub-Adviser
is an indirect subsidiary of Deutsche Bank AG, the largest commercial bank in
Germany.
The Fund's Trustees review the various services provided by the Investment
Manager and the Sub-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 expenses
of the Fund assumed by the Investment Manager, the Fund pays the Investment
Manager monthly compensation calculated daily by applying the annual rate of
1.0% to the portion of the net assets of the Fund not exceeding $500 million and
0.95% to the portion of the net assets of the Fund exceeding $500 million. As
compensation for the services provided pursuant to the Sub-Advisory Agreement,
the Investment Manager pays the Sub-Adviser monthly compensation equal to 40% of
its monthly compensation. The total fee is greater than that paid by most other
investment companies.
For the fiscal year ended March 31, 1997, the Fund accrued total
compensation to the Investment Manager amounting to 1.00% of the Fund's average
daily net assets and the Fund's total expenses amounted to 2.36% of the Fund's
average daily net assets.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is to seek to obtain total return on
its assets primarily through long-term capital growth and to a lesser extent
from income. This objective is fundamental and may not be changed without
shareholder approval. There can be no assurance that the Fund will achieve its
8
<PAGE>
objective. The Fund will seek to achieve such objective through investments in
all types of common stocks and equivalents (such as convertible debt securities
and warrants), preferred stocks and bonds and other debt obligations of domestic
and foreign companies and governments and international organizations. There is
no limitation on the percent or amount of the Fund's assets which may be
invested for growth or income.
The application of the Fund's investment policies is basically dependent
upon the judgment of the Investment Manager and the Sub-Adviser. As a
fundamental policy, the Fund will maintain a flexible investment policy and,
based on a worldwide investment strategy, will invest in a diversified portfolio
of securities of companies and governments located throughout the world.
The percentage of the Fund's assets invested in particular geographic areas
will shift from time to time in accordance with the judgment of the Investment
Manager and the Sub-Adviser. The Investment Manager will meet with the
Sub-Adviser, at least quarterly, to discuss the Fund's overall strategy and the
geographic distribution of the Fund's assets between the United States and the
rest of the world. The final determination of such geographic distribution will
be made by the Investment Manager. Once the determination of such geographic
distribution has been made, each of the Investment Manager and the Sub-Adviser
will be responsible for the individual security selection within its geographic
areas of responsibility and will act on behalf of the Fund in the purchase, sale
and disposition of assets in such areas.
Notwithstanding the Fund's investment objective of seeking total return, the
Fund may, for defensive purposes, without limitation, invest in: obligations of
the United States Government, its agencies or instrumentalities; cash and cash
equivalents in major currencies; repurchase agreements; money market
instruments; and high quality commercial paper.
The Fund may also invest in securities of foreign issuers in the form of
American Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") or
other similar securities convertible into securities of foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically issued
by a United States bank or trust company evidencing ownership of the underlying
securities. EDRs are European receipts evidencing a similar arrangement.
Generally, ADRs, in registered form, are designed for use in the United States
securities markets and EDRs, in bearer form, are designed for use in European
securities markets.
The Fund may also invest in repurchase agreements, private placements, zero
coupon securities, foreign investment companies and real estate investment
trusts, may purchase securities on a when-issued or delayed delivery basis, may
purchase securities on a "when, as and if issued" basis, and may lend its
portfolio securities, as discussed under "Risk Considerations and Investment
Practices" below.
To hedge against adverse price movements in the securities held in its
portfolio and the currencies in which they are denominated (as well as in the
securities it might wish to purchase and their denominated currencies) the Fund
may engage in transactions in forward foreign currency exchange contracts,
options on securities and currencies, and futures contracts on securities,
currencies and indexes and options on such futures contracts. The Fund may also
write (sell) put and call options on securities to aid in achieving its
investment objective. A discussion of these transactions follows under "Risk
Considerations and Investment Practices" below and is supplemented by further
disclosure in the Statement of Additional Information.
RISK CONSIDERATIONS AND INVESTMENT PRACTICES
The Fund is intended to provide individual and institutional investors with
the opportunity to invest in a diversified portfolio of securities of companies
and governments located throughout the world and is intended for long-term
investors who can accept the risks involved in such investments. In making the
allocation of assets among the various markets, the Investment Manager or the
Sub-Adviser will con-
9
<PAGE>
sider such factors as recent developments in the various countries, the
condition and growth potential of various economies and securities markets,
currency and tax considerations and other pertinent financial, social, national
and political factors. The Fund has an unlimited right to purchase equity
securities if they are listed on a stock exchange and may invest up to 25% of
the Fund's total assets in such securities not listed on any exchange, including
not more than 10% of the Fund's total assets invested in securities for which no
readily available market exists.
FOREIGN SECURITIES. Investors should carefully consider the risks of
investing in securities of foreign issuers and securities denominated in
non-U.S. currencies. Fluctuations in the relative rates of exchange between the
currencies of different nations will affect the value of the Fund's investments.
Changes in foreign currency exchange rates relative to the U.S. dollar will
affect the U.S. dollar value of the Fund's assets denominated in that currency
and 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. The foreign currency transactions of
the Fund will be conducted on a spot (i.e., cash) basis or through forward
foreign currency exchange contracts (see below). The Fund may incur certain
costs in connection with these currency transactions.
Investments in foreign securities will also occasion risks relating to
political and economic developments abroad, including the possibility of
expropriations or confiscatory taxation, limitations on the use or transfer of
Fund assets and any effects of foreign social, economic or political
instability. Political and economic developments in Europe, especially as they
relate to changes in the structure of the European Union and the anticipated
development of a unified common market, may have profound effects upon the value
of a large segment of the Fund's portfolio. Continued progress in the evolution
of, for example, a united European common market may be slowed by unanticipated
political or social events and may, therefore, adversely affect the value of
certain of the securities held in the Fund's portfolio.
Foreign companies are not subject to the regulatory requirements of U.S.
companies and, 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 Fund trades effected in such markets. Inability to dispose of
portfolio securities due to settlement delays could result in losses to the Fund
due to subsequent declines in value of such securities and the inability of the
Fund to make intended security purchases due to settlement problems could result
in a failure of the Fund to make potentially advantageous investments. In
addition, the tax implications of the Fund's investments in passive foreign
investment companies are discussed below under "Dividends, Distributions and
Taxes."
Certain of the foreign markets in which the Fund may invest will be emerging
markets. These new and incompletely formed markets will have increased risk
levels above those occasioned by investing in foreign markets generally. The
types of these risks are set forth above. The Fund's management will take
cognizance of these risks in allocating
10
<PAGE>
any of the Fund's investments in either fixed-income or equity securities issued
by issuers in emerging market countries.
The operating expense ratio of the Fund can be expected to be higher than
that of an investment company investing exclusively in domestic securities since
the expenses of the Fund, such as the management fee and the custodial costs,
are higher.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency
exchange contract ("forward contract") involves an obligation to purchase or
sell a currency at a future date, which may be any fixed number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. The Fund may enter into forward contracts as a hedge against
fluctuations in future foreign exchange rates.
The Fund will enter into forward contracts under various circumstances. When
the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may, for example, desire to "lock in" the
price of the security in U.S. dollars or some other foreign currency which the
Fund is temporarily holding in its portfolio. By entering into a forward
contract for the purchase or sale, for a fixed amount of dollars or other
currency, of the amount of foreign currency involved in the underlying security
transactions, the Fund will be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar or
other currency which is being used for the security purchase and the foreign
currency in which the security is denominated during the period between the date
on which the security is purchased or sold and the date on which payment is made
or received.
At other times, when, for example, the Investment Manager or Sub-Adviser
believes that the currency of a particular foreign country may suffer a
substantial decline against the U.S. dollar or some other foreign currency, the
Fund may enter into a forward contract to sell, for a fixed amount of dollars or
other currency, the amount of foreign currency approximating the value of some
or all of the Fund's portfolio securities (or securities which the Fund has
purchased for its portfolio) denominated in such foreign currency. Under
identical circumstances, the Fund may enter into a forward contract to sell, for
a fixed amount of U.S. dollars or other currency, an amount of foreign currency
other than the currency in which the securities to be hedged are denominated
approximating the value of some or all of the portfolio securities to be hedged.
This method of hedging, called "cross-hedging," will be selected when it is
determined by the Investment Manager or Sub-Adviser that the foreign currency in
which the portfolio securities are denominated has insufficient liquidity or is
trading at a discount as compared with some other foreign currency with which it
tends to move in tandem.
In addition, when the Fund anticipates purchasing securities at some time in
the future, and wishes to lock in the current exchange rate of the currency in
which those securities are denominated against the U.S. dollar or some other
foreign currency, it may enter into a forward contract to purchase an amount of
currency equal to some or all of the value of the anticipated purchase, for a
fixed amount of U.S. dollars or other currency. The Fund may, however, close out
the forward contract without purchasing the security which was the subject of
the "anticipatory" hedge.
Lastly, the Fund is permitted to enter into forward contracts with respect
to currencies in which certain of its portfolio securities are denominated and
on which options have been written (see "Options and Futures Transactions").
In all of the above circumstances, if the currency in which the Fund's
portfolio securities (or anticipated portfolio securities) are denominated rises
in value with respect to the currency which is being purchased (or sold), then
the Fund will have realized fewer gains than had the Fund not entered into the
forward contracts. Moreover, the precise matching of the forward contract
amounts and the value of the securities involved will not generally be possible,
since the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the forward contract is entered
11
<PAGE>
into and the date it matures. The Fund is not required to enter into such
transactions with regard to its foreign currency-denominated securities and will
not do so unless deemed appropriate by the Investment Manager and/or
Sub-Adviser.
The Fund generally will not enter into a forward contract with a term of
greater than one year, although it may enter into forward contracts for periods
of up to five years. To the extent that the Fund enters into forward foreign
currency contracts to hedge against a decline in the value of portfolio holdings
denominated in a particular foreign currency resulting from currency
fluctuations, there is a risk that the Fund may nevertheless realize a gain or
loss as a result of currency fluctuations after such portfolio holdings are sold
if the Fund is unable to enter into an "offsetting" forward foreign currency
contract with the same party or another party. The Fund may be limited in its
ability to enter into hedging transactions involving forward contracts by the
Internal Revenue Code requirements relating to qualifications as a regulated
investment company (see "Dividends, Distributions and Taxes").
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, 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
whose financial condition will be continually monitored by the Investment
Manager subject to procedures established by the Board of Trustees of the Fund.
In addition, 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. The Fund may not 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 10% of its
total assets.
PRIVATE PLACEMENTS. The Fund may invest 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. These securities are generally referred to as
private placements or restricted securities. 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 Investment Manager, 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 is limited by the Fund's investment
restrictions to 10% of the Fund's total assets. Limitations on the resale of
private placements 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. Investing in Rule
144A securities could have the effect of increasing the level of Fund
illiquidity to the extent the Fund, at a particular point in time, may be unable
to find qualified institutional buyers interested in purchasing such securities.
CONVERTIBLE SECURITIES. Among the fixed-income securities in which the Fund
may invest are
12
<PAGE>
"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 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, the security will 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.
Because of the special nature of the Fund's permitted investments in lower
rated convertible securities, the Investment Manager or Sub-Adviser must take
account of certain special considerations in assessing the risks associated with
such investments. The prices of lower rated 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 lower rated
convertible 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
lower rated securities and a corresponding volatility in the net asset value of
a share of the Fund.
RIGHTS AND WARRANTS. The Fund may acquire rights and/or warrants which are
attached to other securities in its portfolio, or which are issued as a
distribution by the issuer of a security held in its portfolio. Rights and/or
warrants are, in effect, options 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 corporation issuing
them.
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
shares of foreign investment companies. 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 foreign investment companies
may be the sole or most practical means by which the Fund may participate in
certain foreign 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.
13
<PAGE>
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.
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 the Fund's net asset value.
OPTIONS AND FUTURES TRANSACTIONS
The Fund may purchase and sell (write) call and put options on portfolio
securities which are denominated in either U.S. dollars or foreign currencies,
on stock indexes and on the U.S. dollar and foreign currencies, which are or may
in the future be listed on several U.S. and foreign securities exchanges or are
written in over-the-counter transactions ("OTC options"). 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 put and call options on portfolio
securities, the currencies in which such securities are denominated and stock
indexes, without limit, in order to hedge against the decline in the value of a
security or currency in which such security is denominated (although such hedge
is limited to the value of the premium received), to close out long call option
positions and to generate income. The Fund may write covered put options, under
which the Fund incurs an obligation to buy the security (or currency) 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.
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 call options to
close out a covered call position or to protect
14
<PAGE>
against an increase in the price of a security it anticipates purchasing or, in
the case of call options on a foreign currency, to hedge against an adverse
exchange rate change 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 Fund may purchase put options on securities which it holds in
its portfolio to protect itself against a decline in the value of the security
and to close out written put positions in a manner similar to call option
closing purchase transactions. There are no limits on the Fund's ability to
purchase call and put options other than compliance with the foregoing policies.
The Fund may purchase and sell futures contracts that are currently traded,
or may in the future be traded, on U.S. and foreign commodity exchanges and that
are based on any currency ("currency" futures), on U.S. and foreign fixed-income
securities ("interest rate" futures) and on such indexes of U.S. or foreign
equity or fixed-income securities as may exist or come into being ("index"
futures). The Fund may purchase or sell interest rate futures contracts for the
purpose of attempting hedging some or all of the value of its portfolio
securities (or anticipated portfolio securities) against anticipated changes in
prevailing interest rates. The Fund may 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. The Fund may purchase or
sell currency futures contracts to hedge against an anticipated rise or decline
in the value of the currency in which a portfolio security is denominated
vis-a-vis another currency. As a futures contract purchaser, the Fund incurs an
obligation to take delivery of a specified amount of the obligation underlying
the contract at a specified time in the future for a specified price. As a
seller of a futures contract, the Fund incurs an obligation to deliver the
specified amount of the underlying obligation at a specified time in return for
an agreed upon price.
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 any 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 Investment Manager or Sub-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 may 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 U.S. dollar
cash prices of the Fund's portfolio securities and their denominated currencies.
See the Statement of Additional
15
<PAGE>
Information for a further discussion of risks of options and futures
transactions.
For additional risk disclosure, please refer to the "Investment Objective
and Policies" section of the Prospectus and to the "Investment Practices and
Policies" section of the Statement of Additional Information.
PORTFOLIO MANAGEMENT
The Fund's portfolio is actively managed by the Investment Manager and the
Sub-Adviser with a view to achieving the Fund's investment objective. Mark
Bavoso, Senior Vice President of InterCapital, has been the primary portfolio
manager of the Fund with respect to investments in securities of United States
issuers since August, 1995 and has been a portfolio manager at InterCapital for
over five years. Patrick W.W. Disney, Managing Director of the Sub-Adviser, has
been the primary portfolio manager of the Fund with respect to non-United States
investments since August, 1995 and has been a manager of international
portfolios at the Sub-Adviser for over five years.
Personnel of the Investment Manager and Sub-Adviser have substantial
experience in the use of the investment techniques described above under the
heading "Options and Futures Transactions," which techniques require skills
different from those needed to select the portfolio securities underlying
various options and futures contracts.
Orders for transactions in portfolio securities and commodities may be
placed for the Fund with a number of brokers and dealers, including Dean Witter
Reynolds Inc. ("DWR") and other affiliated broker-dealers of the Investment
Manager, and certain affiliated broker-dealers of the Sub-Adviser. Pursuant to
an order of the Securities and Exchange Commission, the Fund may effect
principal transactions in certain money market instruments with DWR. In
addition, the Fund may incur brokerage commissions on transactions conducted
through DWR and other brokers and dealers that are affiliates of the Investment
Manager or the Sub-Adviser.
Although the Fund does not intend to engage in short-term trading as a means
of achieving its investment objective, it may sell portfolio securities without
regard to the length of time they have been held when such sale will, in the
opinion of the Investment Manager or the Sub-Adviser, strengthen the Fund's
position and contribute to its investment objective.
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 Investment
Company Act of 1940, as amended (the "Act"), a fundamental policy may not be
changed without the vote of a majority of the outstanding voting securities of
the Fund, as defined in the Act.
For purposes of the following restrictions: (i) all percentage limitations
apply immediately after a purchase or initial investment; and (ii) any
subsequent change in any applicable percentage resulting from market
fluctuations or other changes in total or net assets does not require
elimination of any security from the portfolio.
The Fund may not:
1. Invest more than 5% of the value of its total
assets in the voting securities of any one issuer or with respect to 75% of the
Fund's total assets invest more than 5% in the securities of any one issuer
(other than obligations of the United States Government, its agencies or
instrumentalities).
2. Purchase more than 10% of the outstanding
voting securities or any class of securities of any one issuer.
3. Invest more than 25% of the value of its total
assets in securities of issuers in any one industry other than for defensive
purposes.
16
<PAGE>
4. Invest more than 5% of the value of its total
assets in securities of issuers having a record, together with predecessors, of
less than three years of continuous operation. This restriction shall not apply
to any obligation issued or guaranteed by the United States Government, its
agencies or instrumentalities.
5. Purchase securities of other United States
investment companies, except in connection with a merger, consolidation,
reorganization or acquisition
of assets. However, the Fund may invest up to 10% of the value of its total
assets in the securities of foreign investment companies.
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
GENERAL
The Fund offers each class of its shares for sale to the public on a
continuous basis. Pursuant to a Distribution Agreement between the Fund and Dean
Witter Distributors Inc. (the "Distributor"), an affiliate of the Investment
Manager, shares of the Fund are distributed by the Distributor and offered by
DWR and other dealers which have entered into selected dealer 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 Fund offers four classes of shares (each, a "Class"). Class A shares are
sold to investors with an initial sales charge that declines to zero for larger
purchases; however, Class A shares sold without an initial sales charge are
subject to a contingent deferred sales charge ("CDSC") of 1.0% if redeemed
within one year of purchase, except for certain specific circumstances. Class B
shares are sold without an initial sales charge but are subject to a CDSC
(scaled down from 5.0% to 1.0%) payable upon most redemptions within six years
after purchase. (Class B shares purchased by certain qualified
employer-sponsored benefit plans are subject to a CDSC scaled down from 2.0% to
1.0% if redeemed within three years after purchase.) Class C shares are sold
without an initial sales charge but are subject to a CDSC of 1.0% on most
redemptions made within one year after purchase. Class D shares are sold without
an initial sales charge or CDSC and are available only to investors meeting an
initial investment minimum of $5 million, and to certain other limited
categories of investors. At the discretion of the Board of Trustees of the Fund,
Class A shares may be sold to categories of investors in addition to those set
forth in this prospectus at net asset value without a front-end sales charge,
and Class D shares may be sold to certain other categories of investors, in each
case as may be described in the then current prospectus of the Fund. See
"Alternative Purchase Arrangements--Selecting a Particular Class" for a
discussion of factors to consider in selecting which Class of shares to
purchase.
The minimum initial purchase is $1,000 for each Class of shares, although
Class D shares are only available to persons investing $5 million or more and to
certain other limited categories of investors. For the purpose of meeting the
minimum $5 million initial investment for Class D shares, and subject to the
$1,000 minimum initial investment for each Class of the Fund, an investor's
existing holdings of Class A shares of the Fund and other Dean Witter Funds that
are multiple class funds ("Dean Witter Multi-Class Funds") and shares of Dean
Witter Funds sold with a front-end sales charge ("FSC Funds") and concurrent
investments in Class D shares of the Fund and other Dean Witter Multi-Class
Funds will be aggregated. Subsequent purchases of $100 or more may be made by
sending a check, payable to Dean Witter World Wide Investment Trust, 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 other Selected Broker-
Dealer. When purchasing shares of the Fund, investors must specify whether the
purchase is for
17
<PAGE>
Class A, Class B, Class C or Class D shares. If no Class is specified, the
Transfer Agent will not process the transaction until the proper Class is
identified. 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 each account under such Plans to at least $1,000.
Certificates for shares purchased will not be issued unless requested 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 through the Transfer Agent must
be accompanied by payment. Investors will be entitled to receive income
dividends and capital gain distributions if their order is received by the close
of business on the day prior to the record date for such dividends and
distributions. Sales personnel of a Selected Broker-Dealer are compensated for
selling shares of the Fund at the time of their sale 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.
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers several Classes of shares to investors designed to provide
them with the flexibility of selecting an investment best suited to their needs.
The general public is offered three Classes of shares: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales charges
and rate of expenses to which they are subject. A fourth Class of shares, Class
D shares, is offered only to limited categories of investors (see "No Load
Alternative--Class D Shares" below).
Each Class A, Class B, Class C or Class D share of the Fund represents an
identical interest in the investment portfolio of the Fund except that Class A,
Class B and Class C shares bear the expenses of the ongoing shareholder service
fees, Class B and Class C shares bear the expenses of the ongoing distribution
fees and Class A, Class B and Class C shares which are redeemed subject to a
CDSC bear the expense of the additional incremental distribution costs resulting
from the CDSC applicable to shares of those Classes. The ongoing distribution
fees that are imposed on Class A, Class B and Class C shares will be imposed
directly against those Classes and not against all assets of the Fund and,
accordingly, such charges against one Class will not affect the net asset value
of any other Class or have any impact on investors choosing another sales charge
option. See "Plan of Distribution" and "Redemptions and
Repurchases."
Set forth below is a summary of the differences between the Classes and the
factors an investor should consider when selecting a particular Class. This
summary is qualified in its entirety by detailed discussion of each Class that
follows this summary.
CLASS A SHARES. Class A shares are sold at net asset value plus an initial
sales charge of up to 5.25%. The initial sales charge is reduced for certain
purchases. Investments of $1 million or more (and investments by certain other
limited categories of investors) are not subject to any sales charges at the
time of purchase but are subject to a CDSC of 1.0% on redemptions made within
one year after purchase, except for certain specific circumstances. Class A
shares are also subject to a 12b-1 fee of up to 0.25% of the average daily net
assets of the Class. See "Initial Sales Charge Alternative--Class A Shares."
18
<PAGE>
CLASS B SHARES. Class B shares are offered at net asset value with no
initial sales charge but are subject to a CDSC (scaled down from 5.0% to 1.0%)
if redeemed within six years of purchase. (Class B shares purchased by certain
qualified employer-sponsored benefit plans are subject to a CDSC scaled down
from 2.0% to 1.0% if redeemed within three years after purchase.) This CDSC may
be waived for certain redemptions. Class B shares are also subject to an annual
12b-1 fee of 1.0% of the lesser of: (a) the average daily aggregate gross sales
of the Fund's Class B shares since the inception of the Fund (not including
reinvestments of dividends or capital gains distributions), less the average
daily aggregate net asset value of the Fund's Class B shares redeemed since the
Fund's inception upon which a CDSC has been imposed or waived, or (b) the
average daily net assets of Class B. The Class B shares' distribution fee will
cause that Class to have higher expenses and pay lower dividends than Class A or
Class D shares.
After approximately ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund, based on the relative net asset
values of the shares of the two Classes on the conversion date. In addition, a
certain portion of Class B shares that have been acquired through the
reinvestment of dividends and distributions will be converted at that time. See
"Contingent Deferred Sales Charge Alternative--Class B Shares."
CLASS C SHARES. Class C shares are sold at net asset value with no initial
sales charge but are subject to a CDSC of 1.0% on redemptions made within one
year after purchase. This CDSC may be waived for certain redemptions. They are
subject to an annual 12b-1 fee of up to 1.0% of the average daily net assets of
the Class C shares. The Class C shares' distribution fee may cause that Class to
have higher expenses and pay lower dividends than Class A or Class D shares. See
"Level Load Alternative--Class C Shares."
CLASS D SHARES. Class D shares are available only to limited categories of
investors (see "No Load Alternative--Class D Shares" below). Class D shares are
sold at net asset value with no initial sales charge or CDSC. They are not
subject to any 12b-1 fees. See "No Load Alternative--Class D Shares."
SELECTING A PARTICULAR CLASS. In deciding which Class of Fund shares to
purchase, investors should consider the following factors, as well as any other
relevant facts and circumstances:
The decision as to which Class of shares is more beneficial to an investor
depends on the amount and intended length of his or her investment. Investors
who prefer an initial sales charge alternative may elect to purchase Class A
shares. Investors qualifying for significantly reduced or, in the case of
purchases of $1 million or more, no initial sales charges may find Class A
shares particularly attractive because similar sales charge reductions are not
available with respect to Class B or Class C shares. Moreover, Class A shares
are subject to lower ongoing expenses than are Class B or Class C shares over
the term of the investment. As an alternative, Class B and Class C shares are
sold without any initial sales charge so the entire purchase price is
immediately invested in the Fund. Any investment return on these additional
investment amounts may partially or wholly offset the higher annual expenses of
these Classes. Because the Fund's future return cannot be predicted, however,
there can be no assurance that this would be the case.
Finally, investors should consider the effect of the CDSC period and any
conversion rights of the Classes in the context of their own investment time
frame. For example, although Class C shares are subject to a significantly lower
CDSC upon redemptions, they do not, unlike Class B shares, convert into Class A
shares after approximately ten years, and, therefore, are subject to an ongoing
12b-1 fee of 1.0% (rather than the 0.25% fee applicable to Class A shares) for
an indefinite period of time. Thus, Class B shares may be more attractive than
Class C shares to investors with longer term investment outlooks. Other
investors, however, may elect to purchase Class C shares if, for example, they
determine that they do not wish to be subject to a front-end sales charge and
they are uncertain as to the length of time they intend to hold their shares.
19
<PAGE>
For the purpose of meeting the $5 million minimum investment amount for
Class D shares, holdings of Class A shares in all Dean Witter Multi-Class Funds,
shares of FSC Funds and shares of Dean Witter Funds for which such shares have
been exchanged will be included together with the current investment amount.
Sales personnel may receive different compensation for selling each Class of
shares. Investors should understand that the purpose of a CDSC is the same as
that of the initial sales charge in that the sales charges applicable to each
Class provide for the financing of the distribution of shares of that Class.
Set forth below is a chart comparing the sales charge, 12b-1 fees and
conversion options applicable to each Class of shares:
<TABLE>
<CAPTION>
<C> <S> <C> <C>
CONVERSION
CLASS SALES CHARGE 12b-1 FEE FEATURE
A Maximum 5.25% 0.25% No
initial sales
charge reduced
for purchases
of $25,000 and
over; shares
sold without an
initial sales
charge
generally
subject to a
1.0% CDSC
during first
year.
B Maximum 5.0% 1.0% B shares
CDSC during the convert to A
first year shares
decreasing to 0 automatically
after six years after
approximately
ten years
C 1.0% CDSC 1.0% No
during first
year
D None None No
</TABLE>
See "Purchase of Fund Shares" and "The Fund and its Management" for a
complete description of the sales charges and service and distribution fees for
each Class of shares and "Determination of Net Asset Value," "Dividends,
Distributions and Taxes" and "Shareholder Services--Exchange Privilege" for
other differences between the Classes of shares.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
Class A shares are sold at net asset value plus an initial sales charge. In
some cases, reduced sales charges may be available, as described below.
Investments of $1 million or more (and investments by certain other limited
categories of investors) are not subject to any sales charges at the time of
purchase but are subject to a CDSC of 1.0% on redemptions made within one year
after purchase (calculated from the last day of the month in which the shares
were purchased), except for certain specific circumstances. The CDSC will be
assessed on an amount equal to the lesser of the current market value or the
cost of the shares being redeemed. The CDSC will not be imposed (i) in the
circumstances set forth below in the section "Contingent Deferred Sales Charge
Alternative--Class B Shares--CDSC Waivers," except that the references to six
years in the first paragraph of that section shall mean one year in the case of
Class A shares, and (ii) in the circumstances identified in the section
"Additional Net Asset Value Purchase Options" below. Class A shares are also
subject to an annual 12b-1 fee of up to 0.25% of the average daily net assets of
the Class.
The offering price of Class A shares will be the net asset value per share
next determined following receipt of an order (see "Determination of Net Asset
Value" below), plus a sales charge (expressed as a percentage of the offering
price) on a single transaction as shown in the following table:
<TABLE>
<CAPTION>
SALES CHARGE
------------------------------------------
PERCENTAGE OF APPROXIMATE
AMOUNT OF SINGLE PUBLIC OFFERING PERCENTAGE OF AMOUNT
TRANSACTION PRICE INVESTED
- ------------------------- ------------------- ---------------------
<S> <C> <C>
Less than $25,000........ 5.25% 5.54%
$25,000 but less
than $50,000........ 4.75% 4.99%
$50,000 but less
than $100,000....... 4.00% 4.17%
$100,000 but less
than $250,000....... 3.00% 3.09%
$250,000 but less
than $1 million..... 2.00% 2.04%
$1 million and over...... 0 0
</TABLE>
Upon notice to all Selected Broker-Dealers, the Distributor may reallow up
to the full applicable sales charge as shown in the above schedule
20
<PAGE>
during periods specified in such notice. During periods when 90% or more of the
sales charge is reallowed, such Selected Broker-Dealers may be deemed to be
underwriters as that term is defined in the Securities Act of 1933.
The above schedule of sales charges is applicable to purchases in a single
transaction by, among others: (a) an individual; (b) an individual, his or her
spouse and their children under the age of 21 purchasing shares for his, her or
their own accounts; (c) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account; (d) a pension, profit-sharing
or other employee benefit plan qualified or non-qualified under Section 401 of
the Internal Revenue Code; (e) tax-exempt organizations enumerated in Section
501(c)(3) or (13) of the Internal Revenue Code; (f) employee benefit plans
qualified under Section 401 of the Internal Revenue Code of a single employer or
of employers who are "affiliated persons" of each other within the meaning of
Section 2(a)(3)(c) of the Act; and for investments in Individual Retirement
Accounts of employees of a single employer through Systematic Payroll Deduction
plans; or (g) any other organized group of persons, whether incorporated or not,
provided the organization has been in existence for at least six months and has
some purpose other than the purchase of redeemable securities of a registered
investment company at a discount.
COMBINED PURCHASE PRIVILEGE. Investors may have the benefit of reduced
sales charges in accordance with the above schedule by combining purchases of
Class A shares of the Fund in single transactions with the purchase of Class A
shares of other Dean Witter Multi-Class Funds and shares of FSC Funds. The sales
charge payable on the purchase of the Class A shares of the Fund, the Class A
shares of the other Dean Witter Multi-Class Funds and the shares of the FSC
Funds will be at their respective rates applicable to the total amount of the
combined concurrent purchases of such shares.
RIGHT OF ACCUMULATION. The above persons and entities may benefit from a
reduction of the sales charges in accordance with the above schedule if the
cumulative net asset value of Class A shares purchased in a single transaction,
together with shares of the Fund and other Dean Witter Funds previously
purchased at a price including a front-end sales charge (including shares of the
Fund and other Dean Witter Funds acquired in exchange for those shares, and
including in each case shares acquired through reinvestment of dividends and
distributions), which are held at the time of such transaction, amounts to
$25,000 or more. If such investor has a cumulative net asset value of shares of
FSC Funds and Class A and Class D shares equal to at least $5 million, such
investor is eligible to purchase Class D shares subject to the $1,000 minimum
initial investment requirement of that Class of the Fund. See "No Load
Alternative-- Class D Shares" below.
The Distributor must be notified by DWR or a Selected Broker-Dealer or the
shareholder at the time a purchase order is placed that the purchase qualifies
for the reduced charge under the Right of Accumulation. Similar notification
must be made in writing by the dealer or shareholder when such an order is
placed by mail. The reduced sales charge will not be granted if: (a) such
notification is not furnished at the time of the order; or (b) a review of the
records of the Selected Broker-Dealer or the Transfer Agent fails to confirm the
investor's represented holdings.
LETTER OF INTENT. The foregoing schedule of reduced sales charges will also
be available to investors who enter into a written Letter of Intent providing
for the purchase, within a thirteen-month period, of Class A shares of the Fund
from DWR or other Selected Broker-Dealers. The cost of Class A shares of the
Fund or shares of other Dean Witter Funds which were previously purchased at a
price including a front-end sales charge during the 90-day period prior to the
date of receipt by the Distributor of the Letter of Intent, or of Class A shares
of the Fund or shares of other Dean Witter Funds acquired in exchange for shares
of such funds purchased during such period at a price including a front-end
sales charge, which are still owned by the shareholder, may also be included in
determining the applicable reduction.
21
<PAGE>
ADDITIONAL NET ASSET VALUE PURCHASE OPTIONS. In addition to investments of
$1 million or more, Class A shares also may be purchased at net asset value by
the following:
(1)trusts for which Dean Witter Trust Company
("DWTC") or Dean Witter Trust FSB ("DWTFSB") (each of which is an affiliate of
the Investment Manager) provides discretionary trustee services;
(2)persons participating in a fee-based program
approved by the Distributor, pursuant to which such persons pay an asset based
fee for services in the nature of investment advisory or administrative services
(such investments are subject to all of the terms and conditions of such
programs, which may include termination fees and restrictions on transferability
of Fund shares);
(3)retirement plans qualified under
Section 401(k) of the Internal Revenue Code ("401(k) plans") and other
employer-sponsored plans qualified under Section 401(a) of the Internal Revenue
Code with at least 200 eligible employees and for which DWTC or DWTFSB serves as
Trustee or the 401(k) Support Services Group of DWR serves as recordkeeper;
(4)401(k) plans and other employer-sponsored
plans qualified under Section 401(a) of the Internal Revenue Code for which DWTC
or DWTFSB serves as Trustee or the 401(k) Support Services Group of DWR serves
as recordkeeper whose Class B shares have converted to Class A shares,
regardless of the plan's asset size or number of eligible employees;
(5)investors who are clients of a Dean Witter
account executive who joined Dean Witter from another investment firm within six
months prior to the date of purchase of Fund shares by such investors, if the
shares are being purchased with the proceeds from a redemption of shares of an
open-end proprietary mutual fund of the account executive's previous firm which
imposed either a front-end or deferred sales charge, provided such purchase was
made within sixty days after the redemption and the proceeds of the redemption
had been maintained in the interim in cash or a money market fund; and
(6)other categories of investors, at the
discretion of the Board, as disclosed in the then current prospectus of the
Fund.
No CDSC will be imposed on redemptions of shares purchased pursuant to
paragraphs (1), (2) or (5), above.
For further information concerning purchases of the Fund's shares, contact
DWR or another Selected Broker-Dealer or consult the Statement of Additional
Information.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE-- CLASS B SHARES
Class B shares are sold at net asset value next determined without an
initial sales charge so that the full amount of an investor's purchase payment
may be immediately invested in the Fund. A CDSC, however, will be imposed on
most Class B shares redeemed within six years after purchase. The CDSC will be
imposed on any redemption of shares if after such redemption the aggregate
current value of a Class B account with the Fund falls below the aggregate
amount of the investor's purchase payments for Class B shares made during the
six years (or, in the case of shares held by certain employer-sponsored benefit
plans, three years) preceding the redemption. In addition, Class B shares are
subject to an annual 12b-1 fee of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's Class B shares since the inception of the
Fund (not including reinvestments of dividends or capital gains distributions),
less the average daily aggregate net asset value of the Fund's Class B shares
redeemed since the Fund's inception upon which a CDSC has been imposed or
waived, or (b) the average daily net assets of Class B.
Except as noted below, Class B shares of the Fund which are held for six
years or more after purchase (calculated from the last day of the month in which
the shares were purchased) will not be subject to any CDSC upon redemption.
Shares redeemed earlier than six years after purchase may, however, be subject
to a CDSC which will be a percentage of the dollar amount of shares redeemed and
will be assessed on an amount equal to the lesser of the current market value or
the cost of the
22
<PAGE>
shares being redeemed. The size of this percentage will depend upon how long the
shares have been held, as set forth in the following table:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A
PURCHASE PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- --------------------------------- -----------------------
<S> <C>
First............................ 5.0%
Second........................... 4.0%
Third............................ 3.0%
Fourth........................... 2.0%
Fifth............................ 2.0%
Sixth............................ 1.0%
Seventh and thereafter........... None
</TABLE>
In the case of Class B shares of the Fund held by 401 (k) plans or other
employer-sponsored plans qualified under Section 401(a) of the Internal Revenue
Code for which DWTC or DWTFSB serves as Trustee or the 401(k) Support Services
Group of DWR serves as recordkeeper and whose accounts are opened on or after
July 28, 1997, shares held for three years or more after purchase (calculated as
described in the paragraph above) will not be subject to any CDSC upon
redemption. However, shares redeemed earlier than three years after purchase may
be subject to a CDSC (calculated as described in the paragraph above), the
percentage of which will depend on how long the shares have been held, as set
forth in the following table:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- --------------------------------- -----------------------
<S> <C>
First............................ 2.0%
Second........................... 2.0%
Third............................ 1.0%
Fourth and thereafter............ None
</TABLE>
CDSC WAIVERS. A CDSC will not be imposed on: (i) any amount which
represents an increase in value of shares purchased within the six years (or, in
the case of shares held by certain employer-sponsored benefit plans, three
years) preceding the redemption; (ii) the current net asset value of shares
purchased more than six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years) prior to the redemption; and
(iii) the current net asset value of shares purchased through reinvestment of
dividends or distributions and/or shares acquired in exchange for shares of FSC
Funds or of other Dean Witter Funds acquired in exchange for such shares.
Moreover, in determining whether a CDSC is applicable it will be assumed that
amounts described in (i), (ii) and (iii) above (in that order) are redeemed
first. In addition, no CDSC will be imposed on redemptions of shares which are
attributable to reinvestment of dividends or distributions from, or the proceeds
of, certain Unit Investment Trusts.
In addition, the CDSC, if otherwise applicable, will be waived in the case
of:
(1)redemptions of shares held at the time a
shareholder dies or becomes disabled, only if the shares are: (a) registered
either in the name of an individual shareholder (not a trust), or in the names
of such shareholder and his or her spouse as joint tenants with right of
survivorship; or (b) held in a qualified corporate or self-employed retirement
plan, Individual Retirement Account ("IRA") or Custodial Account under Section
403(b)(7) of the Internal Revenue Code ("403(b) Custodial Account"), provided in
either case that the redemption is requested within one year of the death or
initial determination of disability;
(2)redemptions in connection with the following
retirement plan distributions: (a) lump-sum or other distributions from a
qualified corporate or self-employed retirement plan following retirement (or,
in the case of a "key employee" of a "top heavy" plan, following attainment of
age 59 1/2); (b) distributions from an IRA or 403(b) Custodial
Account following attainment of age 59 1/2; or (c) a tax-free return of an
excess contribution to an IRA; and
(3)all redemptions of shares held for the
benefit of a participant in a 401(k) plan or other employer-sponsored plan
qualified under Section 401(a) of the Internal Revenue Code which offers
investment companies managed by the Investment Manager or its subsidiary, Dean
Witter Services Company Inc., as self-directed investment alternatives and for
which DWTC or DWTFSB serves as Trustee or the 401(k) Support Services Group of
DWR serves as recordkeeper ("Eligible Plan"), provided that either: (a) the
plan continues to be an Eligible Plan
23
<PAGE>
after the redemption; or (b) the redemption is in connection with the complete
termination of the plan involving the distribution of all plan assets to
participants.
With reference to (1) above, for the purpose of determining disability, the
Distributor utilizes the definition of disability contained in Section 72(m)(7)
of the Internal Revenue Code, which relates to the inability to engage in
gainful employment. With reference to (2) above, the term "distribution" does
not encompass a direct transfer of IRA, 403(b) Custodial Account or retirement
plan assets to a successor custodian or trustee. All waivers will be granted
only following receipt by the Distributor of confirmation of the shareholder's
entitlement.
CONVERSION TO CLASS A SHARES. All shares of the Fund held prior to July 28,
1997 (other than shares held by certain employee benefit plans established by
DWR and its affiliate, SPS Transaction Services, Inc.) have been designated
Class B shares. Shares held before May 1, 1997 that have been designated Class B
shares will convert to Class A shares in May, 2007. In all other instances Class
B shares will convert automatically to Class A shares, based on the relative net
asset values of the shares of the two Classes on the conversion date, which will
be approximately ten (10) years after the date of the original purchase. The ten
year period is calculated from the last day of the month in which the shares
were purchased or, in the case of Class B shares acquired through an exchange or
a series of exchanges, from the last day of the month in which the original
Class B shares were purchased, provided that shares originally purchased before
May 1, 1997 will convert to Class A shares in May, 2007. The conversion of
shares purchased on or after May 1, 1997 will take place in the month following
the tenth anniversary of the purchase. There will also be converted at that time
such proportion of Class B shares acquired through automatic reinvestment of
dividends and distributions owned by the shareholder as the total number of his
or her Class B shares converting at the time bears to the total number of
outstanding Class B shares purchased and owned by the shareholder. In the case
of Class B shares held by a 401(k) plan or other employer-sponsored plan
qualified under Section 401(a) of the Internal Revenue Code and for which DWTC
or DWTFSB serves as Trustee or the 401(k) Support Services Group of DWR serves
as recordkeeper, the plan is treated as a single investor and all Class B shares
will convert to Class A shares on the conversion date of the first shares of a
Dean Witter Multi-Class Fund purchased by that plan. In the case of Class B
shares previously exchanged for shares of an "Exchange Fund" (see "Shareholder
Services--Exchange Privilege"), the period of time the shares were held in the
Exchange Fund (calculated from the last day of the month in which the Exchange
Fund shares were acquired) is excluded from the holding period for conversion.
If those shares are subsequently re-exchanged for Class B shares of a Dean
Witter Multi-Class Fund, the holding period resumes on the last day of the month
in which Class B shares are reacquired.
If a shareholder has received share certificates for Class B shares, such
certificates must be delivered to the Transfer Agent at least one week prior to
the date for conversion. Class B shares evidenced by share certificates that are
not received by the Transfer Agent at least one week prior to any conversion
date will be converted into Class A shares on the next scheduled conversion date
after such certificates are received.
Effectiveness of the conversion feature is subject to the continuing
availability of a ruling of the Internal Revenue Service or an opinion of
counsel that (i) the conversion of shares does not constitute a taxable event
under the Internal Revenue Code, (ii) Class A shares received on conversion will
have a basis equal to the shareholder's basis in the converted Class B shares
immediately prior to the conversion, and (iii) Class A shares received on
conversion will have a holding period that includes the holding period of the
converted Class B shares. The conversion feature may be suspended if the ruling
or opinion is no longer available. In such event, Class B shares would continue
to be subject to Class B 12b-1 fees.
Class B shares purchased before July 28, 1997 by trusts for which DWTC or
DWTFSB provides discretionary trustee services will convert to Class A
24
<PAGE>
shares on or about August 29, 1997. The CDSC will not be applicable to such
shares.
LEVEL LOAD ALTERNATIVE--CLASS C SHARES
Class C shares are sold at net asset value next determined without an
initial sales charge but are subject to a CDSC of 1.0% on most redemptions made
within one year after purchase (calculated from the last day of the month in
which the shares were purchased). The CDSC will be assessed on an amount equal
to the lesser of the current market value or the cost of the shares being
redeemed. The CDSC will not be imposed in the circumstances set forth above in
the section "Contingent Deferred Sales Charge Alternative--Class B Shares--CDSC
Waivers," except that the references to six years in the first paragraph of that
section shall mean one year in the case of Class C shares. Class C shares are
subject to an annual 12b-1 fee of up to 1.0% of the average daily net assets of
the Class. Unlike Class B shares, Class C shares have no conversion feature and,
accordingly, an investor that purchases Class C shares will be subject to 12b-1
fees applicable to Class C shares for an indefinite period subject to annual
approval by the Fund's Board of Trustees and regulatory limitations.
NO LOAD ALTERNATIVE--CLASS D SHARES
Class D shares are offered without any sales charge on purchase or
redemption and without any 12b-1 fee. Class D shares are offered only to
investors meeting an initial investment minimum of $5 million and the following
categories of investors: (i) investors participating in the InterCapital mutual
fund asset allocation program pursuant to which such persons pay an asset based
fee; (ii) persons participating in a fee-based program approved by the
Distributor, pursuant to which such persons pay an asset based fee for services
in the nature of investment advisory or administrative services (subject to all
of the terms and conditions of such programs, which may include termination fees
and restrictions on transferability of Fund shares); (iii) 401(k) plans
established by DWR and SPS Transaction Services, Inc. (an affiliate of DWR) for
their employees; (iv) certain Unit Investment Trusts sponsored by DWR; (v)
certain other open-end investment companies whose shares are distributed by the
Distributor; and (vi) other categories of investors, at the discretion of the
Board, as disclosed in the then current prospectus of the Fund. Shares of the
Fund held by the employee benefit plans referred to in clause (iii) above prior
to July 28, 1997 have been designated Class D shares. Investors who require a $5
million minimum initial investment to qualify to purchase Class D shares may
satisfy that requirement by investing that amount in a single transaction in
Class D shares of the Fund and other Dean Witter Multi-Class Funds, subject to
the $1,000 minimum initial investment required for that Class of the Fund. In
addition, for the purpose of meeting the $5 million minimum investment amount,
holdings of Class A shares in all Dean Witter Multi-Class Funds, shares of FSC
Funds and shares of Dean Witter Funds for which such shares have been exchanged
will be included together with the current investment amount. If a shareholder
redeems Class A shares and purchases Class D shares, such redemption may be a
taxable event.
PLAN OF DISTRIBUTION
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act with respect to the distribution of Class A, Class B and Class C shares of
the Fund. In the case of Class A and Class C shares, the Plan provides that the
Fund will reimburse the Distributor and others for the expenses of certain
activities and services incurred by them specifically on behalf of those shares.
Reimbursements for these expenses will be made in monthly payments by the Fund
to the Distributor, which will in no event exceed amounts equal to payments at
the annual rates of 0.25% and 1.0% of the average daily net assets of Class A
and Class C, respectively. In the case of Class B shares, the Plan provides that
the Fund will pay the Distributor a fee, which is accrued daily and paid
monthly, at the annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's Class B shares since the inception of the
Fund (not including reinvestments of dividends or capital gains distributions),
less the average daily aggregate net asset value of the Fund's Class B shares
redeemed since the Fund's inception upon which a CDSC has been imposed or
waived, or (b) the average daily
25
<PAGE>
net assets of Class B. The fee is treated by the Fund as an expense in the year
it is accrued. In the case of Class A shares, the entire amount of the fee
currently represents a service fee within the meaning of the NASD guidelines. In
the case of Class B and Class C shares, a portion of the fee payable pursuant to
the Plan, equal to 0.25% of the average daily net assets of each of these
Classes, is currently characterized as a service fee. A service fee is a payment
made for personal service and/or the maintenance of shareholder accounts.
Additional amounts paid under the Plan in the case of Class B and Class C
shares are paid to the Distributor for services provided and the expenses borne
by the Distributor and others in the distribution of the shares of those
Classes, including the payment of commissions for sales of the shares of those
Classes and incentive compensation to and expenses of DWR's account executives
and others who engage in or support distribution of shares or who service
shareholder accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering of
the Fund's shares to other than current shareholders; and preparation, printing
and distribution of sales literature and advertising materials. In addition, the
Distributor may utilize fees paid pursuant to the Plan in the case of Class B
shares to compensate DWR and other Selected Broker-Dealers for their opportunity
costs in advancing such amounts, which compensation would be in the form of a
carrying charge on any unreimbursed expenses.
For the fiscal year ended March 31, 1997, the Fund accrued payments under
the Plan amounting to $4,941,515, which amount is equal to 1.00% of the Fund's
average daily net assets for the fiscal year. The payments accrued under the
Plan were calculated pursuant to clause (b) of the compensation formula under
the Plan. All shares held prior to July 28, 1997 (other than shares held by
certain employee benefit plans established by DWR and its affiliate, SPS
Transaction Services, Inc.) have been designated Class B shares.
In the case of Class B shares, at any given time, the expenses in
distributing Class B shares of the Fund may be in excess of the total of (i) the
payments made by the Fund pursuant to the Plan, and (ii) the proceeds of CDSCs
paid by investors upon the redemption of Class B shares. For example, if $1
million in expenses in distributing Class B shares of the Fund had been incurred
and $750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that such
excess amounts, including the carrying charge described above, totalled
$20,399,997 at March 31, 1997, which was equal to 4.87% of the net assets of the
Fund on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all distribution expenses or any requirement that
the Plan be continued from year to year, such excess amount does not constitute
a liability of the Fund. Although there is no legal obligation for the Fund to
pay expenses incurred in excess of payments made to the Distributor under the
Plan, and the proceeds of CDSCs paid by investors upon redemption of shares, if
for any reason the Plan is terminated the Trustees will consider at that time
the manner in which to treat such expenses. Any cumulative expenses incurred,
but not yet recovered through distribution fees or CDSCs, may or may not be
recovered through future distribution fees or CDSCs.
In the case of Class A and Class C shares, expenses incurred pursuant to the
Plan in any calendar year in excess of 0.25% or 1.0% of the average daily net
assets of Class A or Class C, respectively, will not be reimbursed by the Fund
through payments in any subsequent year, except that expenses representing a
gross sales commission credited to account executives at the time of sale may be
reimbursed in the subsequent calendar year. No interest or other financing
charges will be incurred on any Class A or Class C distribution expenses
incurred by the Distributor under the Plan or on any unreimbursed expenses due
to the Distributor pursuant to the Plan.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is determined once daily at 4:00 p.m., New
York time (or, on days when the New York Stock Exchange closes prior to
26
<PAGE>
4:00 p.m., at such earlier time), on each day that the New York Stock Exchange
is open, by taking the net assets of the Fund, dividing by the number of shares
outstanding and adjusting the result to the nearest cent. The assets belonging
to the Class A, Class B, Class C and Class D shares will be invested together in
a single portfolio. The net asset value of each Class, however, will be
determined separately by subtracting each Class's accrued expenses and
liabilities. The net asset value per share will not be calculated on Good Friday
and on such other federal and non-federal holidays observed by the New York
Stock Exchange.
In the calculation of the Fund's net asset value: (1) an equity security
listed or traded on the New York or American Stock Exchange or other domestic or
foreign stock exchange is valued at its latest sale price on that exchange prior
to the time when assets are valued; if there were no sales that day, the
security is valued at the latest bid price (in cases where securities are traded
on more than one exchange, the securities are valued on the exchange designated
as the primary market 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 Investment Manager or the
Sub-Adviser that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of the
Fund's Trustees. For valuation purposes, quotations of foreign portfolio
securities, other assets and liabilities and forward contracts stated in foreign
currency are translated into U.S. dollar equivalents at the prevailing market
rates prior to the close of the New York Stock Exchange. 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, if after the ex-dividend date.
Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Trustees.
Generally, trading in foreign securities, as well as corporate bonds, United
States government securities and money market instruments, is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. The values of such securities used in computing the net asset value of
the Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events which affect the values of such securities and
such exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange and will therefore not be reflected in
the computation of the Fund's net asset value. If events materially affecting
the value of such securities occur during such period, then these securities
will be valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees.
Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may utilize
a matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research 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.
27
<PAGE>
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 applicable Class of the Fund (or, if specified by the shareholder,
in shares of any other open-end Dean Witter Fund), unless the shareholder
requests that they be paid in cash. Shares so acquired are acquired at net asset
value and are not subject to the imposition of a front-end sales charge or a
CDSC (see "Redemptions and Repurchases").
INVESTMENT OF DIVIDENDS OR DISTRIBUTIONS RECEIVED IN CASH. Any shareholder
who receives a cash payment representing a dividend or capital gains
distribution may invest such dividend or distribution in shares of the
applicable Class at the net asset value next determined after receipt by the
Transfer Agent, by returning the check or the proceeds to the Transfer Agent
within thirty days after the payment date. Shares so acquired are acquired at
net asset value and are not subject to the imposition of a front-end sales
charge or a CDSC (see "Redemptions and Repurchases").
EASYINVEST-SM-. Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account or following
redemption of shares of a Dean Witter money market fund, 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 "Redemptions and
Repurchases--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. Any applicable CDSC
will be imposed on shares redeemed under the Withdrawal Plan (see "Purchase of
Fund Shares"). Therefore, any shareholder participating in the Withdrawal Plan
will have sufficient shares redeemed from his or her account so that the
proceeds (net of any applicable CDSC) to the shareholder will be the designated
monthly or quarterly amount. 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.
Shareholders should contact their DWR or other Selected Broker-Dealer
account executive or the Transfer Agent for further information about any of the
above services.
TAX SHELTERED RETIREMENT PLANS. Retirement plans are available for use by
corporations, the self-employed, Individual Retirement Accounts and Custodial
Accounts under Section 403(b)(7) of the Internal Revenue Code. Adoption of such
plans should be on advice of legal counsel or tax adviser.
For further information regarding plan administration, custodial fees and
other details, investors should contact their DWR or other Selected Broker-
Dealer account executive or the Transfer Agent.
EXCHANGE PRIVILEGE
Shares of each Class may be exchanged for shares of the same Class of any
other Dean Witter Multi-Class Fund without the imposition of any exchange fee.
Shares may also be exchanged for shares of the following funds: Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean
Witter Short-Term Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust
and five Dean Witter funds which are money market funds (the "Exchange Funds").
Class A shares may also be exchanged for shares of Dean Witter Multi-State
Municipal Series Trust and Dean Witter Hawaii Municipal Trust, which are Dean
Witter Funds sold
28
<PAGE>
with a front-end sales charge ("FSC Funds"). Class B shares may also be
exchanged for shares of Dean Witter Global Short-Term Income Fund Inc., Dean
Witter High Income Securities and Dean Witter National Municipal Trust, which
are Dean Witter Funds offered with a CDSC ("CDSC Funds"). Exchanges may be made
after the shares of the 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.
An exchange to another Dean Witter Multi-Class Fund, any FSC Fund, any CDSC
Fund or any Exchange Fund that is not a money market fund is on the basis of the
next calculated net asset value per share of each fund after the exchange order
is received. When exchanging into a money market fund from the Fund, shares of
the Fund are redeemed out of the Fund at their next calculated net asset value
and the proceeds of the redemption are used to purchase shares of the money
market fund at their net asset value determined the following business day.
Subsequent exchanges between any of the money market funds and any of the Dean
Witter Multi-Class Funds, FSC Funds or CDSC Funds or any Exchange Fund that is
not a money market fund can be effected on the same basis.
No CDSC is imposed at the time of any exchange of shares, although any
applicable CDSC will be imposed upon ultimate redemption. During the period of
time the shareholder remains in an Exchange Fund (calculated from the last day
of the month in which the Exchange Fund shares were acquired), the holding
period (for the purpose of determining the rate of the CDSC) is frozen. If those
shares are subsequently re-exchanged for shares of a Dean Witter Multi-Class
Fund or 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 Dean Witter Multi-Class Fund or shares of a CDSC Fund are reacquired. Thus,
the CDSC is based upon the time (calculated as described above) the shareholder
was invested in shares of a Dean Witter Multi-Class Fund or in shares of a CDSC
Fund (see "Purchase of Fund Shares"). In the case of exchanges of Class A shares
which are subject to a CDSC, the holding period also includes the time
(calculated as described above) the shareholder was invested in shares of a FSC
Fund. However, in the case of shares exchanged into an Exchange Fund on or after
April 23, 1990, 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 incurred on or after
that date which are attributable to those shares. (Exchange Fund 12b-1
distribution fees, if any, are described in the prospectuses for those funds).
Class B shares of the Fund acquired in exchange for Class B shares of another
Dean Witter Multi-Class Fund or shares of a CDSC Fund having a different CDSC
schedule than that of this Fund will be subject to the higher CDSC schedule,
even if such shares are subsequently re-exchanged for shares of the fund with
the lower CDSC schedule.
ADDITIONAL INFORMATION REGARDING EXCHANGES. Purchases and exchanges should
be made for investment purposes only. A pattern of frequent exchanges may be
deemed by InterCapital to be abusive and contrary to the best interests of the
Fund's other shareholders and, at InterCapital's discretion, may be limited by
the Fund's refusal to accept additional purchases and/or exchanges from the
investor. Although the Fund does not have any specific definition of what
constitutes a pattern of frequent exchanges, and will consider all relevant
factors in determining whether a particular situation is abusive and contrary to
the best interests of the Fund and its other shareholders, investors should be
aware that the Fund and each of the other Dean Witter Funds may in their
discretion limit or otherwise restrict the number of times this Exchange
Privilege may be exercised by any investor. Any such restriction will be made by
the Fund on a prospective basis only, upon notice to the shareholder not later
than ten days following such shareholder's most recent exchange. Also, the
Exchange Privilege may be terminated or revised at any time by the Fund and/or
any of such Dean Witter Funds for which shares of the Fund have been exchanged,
29
<PAGE>
upon such notice as may be required by applicable regulatory agencies.
Shareholders maintaining margin accounts with DWR or another Selected
Broker-Dealer are referred to their account executive regarding restrictions on
exchange of shares of the Fund pledged in the margin account.
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain a copy and examine it carefully
before investing. Exchanges are subject to the minimum investment requirement of
each Class of shares and any other conditions imposed by each fund. In the case
of a shareholder holding a share certificate or certificates, no exchanges may
be made until all applicable share certificates have been received by the
Transfer Agent and deposited in the shareholder's account. 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 share 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 many
initiate an exchange of shares of the Fund for shares of any of the Dean Witter
Funds (for which the Exchange Privilege is available) pursuant to this Exchange
Privilege by contacting their account executive (no Exchange Privilege
Authorization Form is required). Other shareholders (and those shareholders who
are clients of DWR or another Selected Broker-Dealer 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. Such 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 may also
be recorded. If such procedures are not employed, the Fund may be liable for any
losses due to unauthorized or fraudulent instructions.
Telephone exchange instructions will be accepted if received by the Transfer
Agent between 9:00 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 with the Dean Witter
Funds in the past.
For further information regarding the Exchange Privilege, shareholders
should contact their account executive or the Transfer Agent.
REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------------
REDEMPTION. Shares of each Class of the Fund can be redeemed for cash at
any time at the net asset value per share next determined less the amount of any
applicable CDSC in the case of Class A, Class B or Class C shares (see "Purchase
of Fund Shares"). If shares are held in a shareholder's account without a share
certificate, a written request to the Fund's Transfer Agent at P.O. Box 983,
Jersey City, NJ 07303 for redemption is required. If certificates are held by
the shareholder,
30
<PAGE>
the shares may be redeemed by surrendering the certificates with a written
request for redemption, along with any additional information required by the
Transfer Agent.
REPURCHASE. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to any
of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic request of the shareholder. The repurchase price is the net
asset value next computed (see "Purchase of Fund Shares") after such repurchase
order is received by DWR or other Selected Broker-Dealer, reduced by any
applicable CDSC.
The CDSC, if any, will be the only fee imposed by any of the Fund, the
Distributor or DWR. The offer by DWR and other Selected Broker-Dealers to
repurchase shares 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 above under "Redemption."
PAYMENT FOR SHARES REDEEMED OR REPURCHASED. Payment for shares presented
for repurchase or redemption will be made by check within seven days after
receipt by the Transfer Agent of the certificate and/or written request in good
order. Such payment may be postponed or the right of redemption suspended under
unusual circumstances, e.g., when normal trading is not taking place on the New
York Stock Exchange. 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 35 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 in the same Class from which such shares were redeemed or
repurchased, at the net asset value next determined after a reinstatement
request, together with the proceeds, is received by the Transfer Agent and
receive a pro rata credit for any CDSC paid in connection with such redemption
or repurchase.
INVOLUNTARY REDEMPTION. The Fund reserves the right, on sixty days' notice,
to redeem, at their net asset value, the shares of any shareholder (other than
shares held in an Individual Retirement Account or Custodial Account under
Section 403(b)(7) of the Internal Revenue Code) whose shares due to redemptions
by the shareholders have a value of less than $100 or such lesser amount as may
be fixed by the Fund's Trustees or, in the case of an account opened through
EasyInvest-SM-, 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 the shareholder sixty
days to make an additional investment in an amount which will increase the value
of the account to at least the applicable amount before the redemption is
processed. No CDSC will be imposed on any involuntary redemption.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS. The Fund declares dividends separately for
each Class of shares and intends to distribute all of its net investment income
and net capital gains, if any, at least once per 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.
31
<PAGE>
All dividends and any capital gains distributions will be paid in additional
shares of the same Class and automatically credited to the shareholder's account
without issuance of a share certificate unless the shareholder requests in
writing that all dividends be paid in cash. Shares acquired by dividend and
distribution reinvestments will not be subject to any front-end sales charge or
CDSC. Class B shares acquired through dividend and distribution reinvestments
will become eligible for conversion to Class A shares on a pro rata basis.
Distributions paid on Class A and Class D shares will be higher than for Class B
and Class C shares because distribution fees paid by Class B and Class C shares
are higher. (See "Shareholder Services--Automatic Investment of Dividends and
Distributions".)
TAXES. Because the Fund intends to distribute all of its net investment
income and net short-term 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 on any such income and capital gains, other than any tax
resulting from investing in passive foreign investment companies, as discussed
below.
Gains or losses on the Fund's transactions in certain listed options on
securities and on futures and options on futures traded on U.S. exchanges
generally are treated as 60% long-term gain or loss and 40% short-term gain or
loss. When the Fund engages in options and futures transactions, various tax
regulations applicable to the Fund may have the effect of causing the Fund to
recognize a gain or loss for tax purposes before that gain or loss is realized,
or to defer recognition of a realized loss for tax purposes. Recognition, for
tax purposes, of an unrealized loss may result in a lesser amount of the Fund's
realized net gains being available for distribution.
As a regulated investment company, the Fund is subject to the requirement
that less than 30% of its gross income be derived from the sale of certain
investments held for less than three months. This requirement may limit the
Fund's ability to engage in options and futures transactions.
Shareholders will normally have to pay federal income taxes, and any state
and local income taxes, on the dividends and distributions they receive from the
Fund. Such dividends and distributions, to the extent 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
distributions in additional shares or in cash. Any dividends declared in the
last quarter of any calendar year which are paid in the following year prior to
February 1 will be deemed, for tax purposes, to have been received by the
shareholder in the prior year.
Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash. Capital gains distributions are not eligible for
the corporate dividends received deduction.
The Fund may purchase the securities of certain foreign investment funds or
trusts called passive foreign investment companies. Capital gains on the sale of
such holdings may be deemed to be ordinary income regardless of how long the
Fund holds its investment. In addition, the Fund may be subject to income tax
and an interest charge on certain dividends and capital gains earned from these
investments, regardless of whether such income and gains were distributed to
shareholders.
The Fund may at times make payments from sources other than income or net
capital gains. Payments from such sources will, in effect, represent a return of
a portion of each shareholder's investment. All, or a portion, of such payments
will not be taxable to shareholders.
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.
32
<PAGE>
Dividends, interest and gains received by the Fund from foreign sources may
give rise to withholding and other taxes imposed by foreign countries. If it
qualifies for and makes the appropriate election with the Internal Revenue
Service, the Fund will report annually to its shareholders the amount per share
of such taxes to enable shareholders to claim United States foreign tax credits
or deductions with respect to such taxes. In the absence of such an election,
the Fund would deduct such foreign taxes in computing the amount of its
distributable income. The Fund does not intend to make such election for its
fiscal year ended March 31, 1997.
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 "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. 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 a Class of the Fund of $1,000 over periods of one, five and ten
years. Average annual total return reflects all income earned by the Fund, any
appreciation or depreciation of the Fund's assets, all expenses incurred by the
applicable Class and all sales charges which would be incurred by 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 for
each Class over different periods of time by means of aggregate, average,
year-by-year or other types of total return figures. Such calculations may or
may not reflect the deduction of any sales charge which, if reflected, would
reduce the performance quoted. The Fund may also advertise the growth of
hypothetical investments of $10,000, $50,000 and $100,000 in each Class of
shares of the Fund. The Fund from time to time may also advertise its
performance relative to certain performance rankings and indexes compiled by
independent organizations, such as 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 except that
each Class will have exclusive voting privileges with respect to matters
relating to distribution expenses borne solely by such Class or any other matter
in which the interests of one Class differ from the interests of any other
Class. In addition, Class B shareholders will have the right to vote on any
proposed material increase in Class A's expenses, if such proposal is submitted
separately to Class A shareholders. Also, as discussed herein, Class A, Class B
and Class C bear the expenses related to the distribution of their respective
shares.
The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. Under certain
circumstances the Trustees may be removed by action of the Trustees or by the
shareholders.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Fund. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund, requires that Fund
obligations include such disclaimer, and provides for indemnification and
reimbursement of expenses out of the Fund's property for any share-
33
<PAGE>
holder held personally liable for the obligations of the Fund. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability, and
the nature of the Fund's assets and operations, the possibility of the Fund
being unable to meet its obligations is remote and thus, in the opinion of
Massachusetts counsel to the Fund, the risk to Fund shareholders of personal
liability is remote.
CODE OF ETHICS. Directors, officers and employees of InterCapital, Dean
Witter Services Company Inc. and the Distributor are subject to a strict Code of
Ethics adopted by those companies. The Code of Ethics is intended to ensure that
the interests of shareholders and other clients are placed ahead of any personal
interest, that no undue personal benefit is obtained from a person's employment
activities and that actual and potential conflicts of interest are avoided. To
achieve these goals and comply with regulatory requirements, the Code of Ethics
requires, among other things, that personal securities transactions by employees
of the companies be subject to an advance clearance process to monitor that no
Dean Witter Fund is engaged at the same time in a purchase or sale of the same
security. The Code of Ethics bans the purchase of securities in an initial
public offering, and also prohibits engaging in futures and options transactions
and profiting on short-term trading (that is, a purchase within sixty days of a
sale or a sale within sixty days of a purchase) of a security. In addition,
investment personnel may not purchase or sell a security for their personal
account within thirty days before or after any transaction in any Dean Witter
Fund managed by them. Any violations of the Code of Ethics are subject to
sanctions, including reprimand, demotion or suspension or termination of
employment. The Code of Ethics comports with regulatory requirements and the
recommendations in the 1994 report by the Investment Company Institute Advisory
Group on Personal Investing.
The Sub-Adviser also has a Code of Ethics which complies with regulatory
requirements and, insofar as it relates to persons associated with the Fund, the
1994 report by the Investments Company Institute Advisory Group on Personal
Investing.
MASTER/FEEDER CONVERSION. The Fund reserves the right to seek to achieve
its investment objective by investing all of its investable assets in a
diversified, open-end management investment company having the same investment
objective and policies and substantially the same investment restrictions as
those applicable to the Fund.
SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed
to the Fund at the telephone numbers or address set forth on the front cover of
this Prospectus.
34
<PAGE>
THE DEAN WITTER FAMILY OF FUNDS
<TABLE>
<S> <C>
MONEY MARKET FUNDS FIXED-INCOME FUNDS
Dean Witter Liquid Asset Fund Inc. Dean Witter High Yield Securities Inc.
Dean Witter Tax-Free Daily Income Trust Dean Witter Tax-Exempt Securities Trust
Dean Witter New York Municipal Money Market Trust Dean Witter U.S. Government Securities Trust
Dean Witter California Tax-Free Daily Income Trust Dean Witter California Tax-Free Income Fund
Dean Witter U.S. Government Money Market Trust Dean Witter New York Tax-Free Income Fund
EQUITY FUNDS Dean Witter Convertible Securities Trust
Dean Witter American Value Fund Dean Witter Federal Securities Trust
Dean Witter Natural Resource Development Dean Witter World Wide Income Trust
Securities Inc. Dean Witter Intermediate Income Securities
Dean Witter Dividend Growth Securities Inc. Dean Witter Global Short-Term Income Fund Inc.
Dean Witter Developing Growth Securities Trust Dean Witter Multi-State Municipal Series Trust
Dean Witter World Wide Investment Trust Dean Witter Short-Term U.S. Treasury Trust
Dean Witter Value-Added Market Series Dean Witter Diversified Income Trust
Dean Witter Utilities Fund Dean Witter Limited Term Municipal Trust
Dean Witter Precious Metals and Minerals Trust Dean Witter Short-Term Bond Fund
Dean Witter Capital Growth Securities Dean Witter High Income Securities
Dean Witter European Growth Fund Inc. Dean Witter National Municipal Trust
Dean Witter Pacific Growth Fund Inc. Dean Witter Balanced Income Fund
Dean Witter Health Sciences Trust Dean Witter Hawaii Municipal Trust
Dean Witter Global Dividend Growth Securities Dean Witter Intermediate Term U.S. Treasury
Dean Witter Global Utilities Fund Trust
Dean Witter International SmallCap Fund DEAN WITTER RETIREMENT SERIES
Dean Witter Mid-Cap Growth Fund Liquid Asset Series
Dean Witter Balanced Growth Fund U.S. Government Money Market Series
Dean Witter Capital Appreciation Fund U.S. Government Securities Series
Dean Witter Information Fund Intermediate Income Securities Series
Dean Witter Special Value Fund American Value Series
Dean Witter Financial Services Trust Capital Growth Series
Dean Witter Market Leader Trust Dividend Growth Series
ASSET ALLOCATION FUNDS Strategist Series
Dean Witter Strategist Fund Utilities Series
Dean Witter Global Asset Allocation Fund Value-Added Market Series
ACTIVE ASSETS ACCOUNT PROGRAM Global Equity Series
Active Assets Money Trust
Active Assets Tax-Free Trust
Active Assets Government Securities Trust
Active Assets California Tax-Free Trust
</TABLE>
<PAGE>
Dean Witter
World Wide Investment Trust
Two World Trade Center
New York, New York 10048
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and
General Counsel
Mark Bavoso
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Chase Manhattan Bank
One Chase Plaza
New York, New York 10081
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
SUB-ADVISER
Morgan Grenfell Investment Services Limited
DEAN WITTER
WORLD WIDE
INVESTMENT
TRUST
[PHOTO]
PROSPECTUS -- JULY 28, 1997
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS MARCH 31, 1997
DEAR SHAREHOLDER:
During the Fund's fiscal year ended March 31, 1997, global investment returns
continued to underperform those in the United States, with the Standard & Poor's
500 Composite Stock Index (S&P 500) advancing 19.84 percent while the Morgan
Stanley Capital International World Index (MSCI World Index) returned 7.68
percent.
European markets enjoyed strong performance, however, with Spain up 30.4
percent, the United Kingdom up 28.7 percent and Germany up 20.6 percent. Most
European equity markets responded well to the favorable macroeconomic outlook of
noninflationary growth induced by low interest rates, weaker domestic currencies
and tight fiscal policy. As 1997 unfolds, it will become more apparent which
countries will comply with the Maastricht criteria for participation in the
Economic and Monetary Union (EMU) when it begins in 1999.
Emerging markets also performed well over the last year. The Latin American
markets in particular rallied sharply, with Brazil up 56.0 percent, Argentina up
29.9 percent and Mexico up 19.0 percent. Southeast Asian markets advanced in
1996 but gave up gains in the first quarter of 1997 as a result of weakness in
technology and fears regarding interest rates.
In the United States, the Federal Reserve's Open Market Committee increased
interest rates on March 25 in response to signs of economic strength. Volatility
in most markets has since picked up as investors digest the prospects for
additional interest-rate increases. It should be noted that the economies of
Europe and Japan and emerging markets are all at different points in the
economic growth cycle. While all are affected by global liquidity, monetary
policy in these areas is set according to domestic trends in growth and
inflation.
PERFORMANCE AND PORTFOLIO
For the twelve-month period ended March 31, 1997, Dean Witter World Wide
Investment Trust provided a total return of 1.61 percent compared to 7.68
percent for the MSCI World Index and 11.85 percent for the
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
LETTER TO THE SHAREHOLDERS MARCH 31, 1997, CONTINUED
Lipper Global Funds Index. The accompanying chart illustrates the growth of a
$10,000 investment in the Fund for the ten-year period ended March 31, 1997,
versus similar investments in the MSCI World Index and the Lipper Global Funds
Index.
The main reason for the Fund's
underperformance versus its benchmarks
was the result of the Fund's year-long
overweighted position in the Japanese
equity market. The Fund's asset
allocation strategically overweighted
Japan because of improving signs there
of sustainable economic growth, a
depreciating yen, potential
deregulation measures and a sharp
profit recovery. Despite these
promising fundamentals, the Japanese
equity market, down 25.70 percent,
suffered a loss of confidence when
confronted with persistent bad press
documenting the fragility of the
financial sector. Faced with
deteriorating fundamentals and poor
sentiment, the Fund reduced its
exposure to Japan at the end of 1996 to
be at a neutral weighting versus the
MSCI World Index.
Dean Witter World Wide Investment Trust
is broadly invested across 25 global
markets. The Fund's target asset
allocation is Europe, 35 percent; U.S.,
25 percent; Japan, 20 percent; emerging
Asia, 12.5 percent; Latin America, 6.5
percent; and other, 1 percent. The
Fund's holdings include companies such
as PepsiCo Inc. (U.S., beverages),
Telecomunicacoes Brasileiras S.A.
(Brazil, telecommunications), AXA-UAP
(France, insurance), Volkswagen AG
(Germany, automobiles), Hutchison
Whampoa Ltd. (Hong Kong, conglomerate)
and Canon, Inc. (Japan, electrical
equipment).
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
LETTER TO THE SHAREHOLDERS MARCH 31, 1997, CONTINUED
LOOKING AHEAD
We believe that global equities continue to offer an attractive investment
opportunity. Continental European equities remain responsive to the dual profit
drivers of restructuring and improving competitiveness from weak domestic
currencies. In Japan, business confidence is building as exports pick up and
prospects for broader economic growth appear. Lastly, economic activity in Asian
and Latin American emerging markets is outpacing growth in the developed world.
We appreciate your support of Dean Witter World Wide Investment Trust and look
forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, WARRANTS, RIGHTS
AND BONDS (96.3%)
ARGENTINA (0.2%)
ENERGY
38,500 Yacimentos Petroliferos
Fiscales S.A. (ADR)......... $ 1,020,250
---------------
AUSTRALIA (0.9%)
ENERGY
41,000 Broken Hill Proprietary Co.,
Ltd......................... 547,493
90,000 Woodside Petroleum Ltd........ 664,109
---------------
1,211,602
---------------
FOODS & BEVERAGES
740,000 Goodman Fielder Ltd........... 959,096
---------------
METALS & MINING
600,000 M.I.M. Holdings Ltd........... 805,923
262,000 Pasminco Ltd.................. 506,476
---------------
1,312,399
---------------
RETAIL
225,000 Woolworth's Ltd............... 602,675
---------------
TOTAL AUSTRALIA............... 4,085,772
---------------
AUSTRIA (0.1%)
CONSUMER PRODUCTS
2,665 Wolford AG.................... 298,093
---------------
BELGIUM (0.4%)
RESTAURANTS
1,840 Quick Restaurants S.A......... 95,714
---------------
RETAIL
35,500 G.I.B. Holdings Ltd........... 1,620,958
---------------
TOTAL BELGIUM................. 1,716,672
---------------
BRAZIL (3.1%)
BUILDING & CONSTRUCTION
103,000 Elevadores Atlas S.A.*........ 1,282,037
---------------
INVESTMENT COMPANIES
1,000,000 Brazilian Smaller Co.
Investment Trust PLC........ 1,380,000
200,000 Brazilian Smaller Co.
Investment Trust (Warrants
due 09/30/07)*.............. 146,000
---------------
1,526,000
---------------
RETAIL
80,000 Makro Atacadista S.A. (GDS)... 1,073,600
10,000 Makro Atacadista S.A. (ADR) -
144A**...................... 134,200
---------------
1,207,800
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
STEEL
1,904,000 Companhia Siderurgica Paulista
(Pref.)*.................... $ 1,310,627
---------------
STEEL & IRON
202,000 Companhia Acos Especia
(ADR)*...................... 925,160
---------------
TELECOMMUNICATIONS
24,705 Telecomunicacoes Brasileiras
S.A. (ADR).................. 2,529,174
---------------
UTILITIES - ELECTRIC
120,000 Centrais Electricas
Brasileiras S.A. (Class B)
(ADR)....................... 2,478,000
25,000,000 Companhia de Electricidade do
Estado da Bahia*............ 1,885,903
---------------
4,363,903
---------------
TOTAL BRAZIL.................. 13,144,701
---------------
CANADA (0.4%)
ENERGY
19,500 Talisman Energy, Inc.*........ 578,664
---------------
INDUSTRIALS
22,000 Canadian Pacific, Ltd......... 524,982
---------------
MANUFACTURING
35,000 Bombardier, Inc. (Class B).... 633,033
---------------
TOTAL CANADA.................. 1,736,679
---------------
CHILE (0.5%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
100,000 Compania Cervecerias Unidas
S.A. (ADR).................. 1,975,000
---------------
COLOMBIA (0.2%)
FINANCIAL SERVICES
3,465 Corporacion Financiera Valle
(GDR)....................... 12,994
---------------
RETAIL
42,000 Gran Cadena Almacenes (Class
B) (Pref.) (ADR) - 144A**... 414,750
30,000 Gran Cadena Almacenes (ADR) (B
Shares)..................... 292,500
---------------
707,250
---------------
TOTAL COLOMBIA................ 720,244
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
DENMARK (1.3%)
BUSINESS & PUBLIC SERVICES
20,200 Kobenhavns Lufthavne AS....... $ 2,093,232
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
2,270 Oticon Holding AS............. 381,357
---------------
PHARMACEUTICALS
29,000 Novo-Nordisk AS (Series B).... 3,027,900
---------------
TOTAL DENMARK................. 5,502,489
---------------
FRANCE (4.3%)
BUILDING MATERIALS
9,500 IMETAL........................ 1,475,646
---------------
BUSINESS & PUBLIC SERVICES
1,770 Grand Optical-Photoservice.... 273,996
---------------
COMMERCIAL SERVICES
550 Altran Technologies S.A....... 201,258
---------------
CONSUMER PRODUCTS
12,500 Societe BIC S.A............... 1,892,933
---------------
ENERGY
20,000 Elf Aquitaine S.A............. 2,043,925
---------------
FINANCIAL SERVICES
12,000 Cetelem Group................. 1,417,641
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
28,000 SEITA......................... 1,007,722
---------------
HEALTH & PERSONAL CARE
10,640 Sanofi S.A.................... 1,036,486
---------------
INSURANCE
41,000 AXA-UAP....................... 2,703,560
45,000 Scor.......................... 1,829,171
---------------
4,532,731
---------------
RETAIL
2,070 Carrefour Supermarche......... 1,279,910
6,122 Castorama Dubois
Investissement.............. 962,865
FRF 250 Castorama Dubois
Investissement 3.15% due
01/01/03 (Conv.)............ 54,331
2,129 Guilbert S.A.................. 395,935
---------------
2,693,041
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
STEEL & IRON
80,250 Usinor Sacilor................ $ 1,307,651
---------------
TEXTILES
2,433 Deveaux S.A................... 413,688
---------------
WHOLESALE & INTERNATIONAL TRADE
42 Bertrand Faure................ 2,131
---------------
TOTAL FRANCE.................. 18,298,849
---------------
GERMANY (3.8%)
APPAREL
14,400 Adidas AG..................... 1,628,648
---------------
AUTOMOBILES
2,750 Bayerische Motoren Werke (BMW)
AG.......................... 2,215,756
5,975 Volkswagen AG................. 3,287,944
---------------
5,503,700
---------------
CHEMICALS
37,746 BASF AG....................... 1,419,277
28,000 Bayer AG...................... 1,159,773
18,300 SGL Carbon AG................. 2,501,164
---------------
5,080,214
---------------
ENTERTAINMENT
1,043 CeWe Color Holdings AG........ 264,563
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
11,580 Berentzen-Gruppe AG (Pref.)... 352,480
---------------
FURNITURE
3,420 Moebel Walther AG............. 183,706
---------------
INSURANCE
1,452 Marschollek Lautenschlaeger
und Partner AG (Pref.)...... 303,312
---------------
PHARMACEUTICALS
10,500 Gehe AG....................... 717,547
---------------
RETAIL
12,732 Fielmann AG (Pref.)........... 355,630
---------------
TEXTILES
360 Jil Sander AG (Pref.)......... 217,010
3,000 Puma AG*...................... 111,549
---------------
328,559
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
UTILITIES - ELECTRIC
18,500 Veba AG....................... $ 1,042,868
---------------
TOTAL GERMANY................. 15,761,227
---------------
HONG KONG (4.4%)
BANKING
302,000 Guoco Group Ltd............... 1,492,734
77,200 HSBC Holdings PLC............. 1,793,356
39,000 Wing Hang Bank Ltd............ 171,128
---------------
3,457,218
---------------
CONGLOMERATES
367,000 Hutchison Whampoa Ltd......... 2,758,918
305,000 Wharf (Holdings) Ltd.......... 1,167,082
---------------
3,926,000
---------------
REAL ESTATE
241,000 Cheung Kong (Holdings) Ltd.... 2,122,738
580,000 China Overseas Land &
Investment.................. 314,379
140,000 China Resources Enterprise
Ltd......................... 301,732
271,000 Great Eagle Holdings Ltd...... 895,336
172,260 HKR International Ltd......... 227,869
823,000 Hong Kong Land Holdings
Ltd......................... 1,909,360
211,000 New World Development Co.,
Ltd......................... 1,138,244
---------------
6,909,658
---------------
TELECOMMUNICATIONS
1,188,400 Hong Kong Telecommunications
Ltd......................... 2,032,148
---------------
TRANSPORTATION
980,000 China Travel International
Investment Ltd.............. 471,117
---------------
UTILITIES
339,000 China Light & Power Co.,
Ltd......................... 1,491,870
---------------
TOTAL HONG KONG............... 18,288,011
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
INDIA (0.4%)
AUTOMOBILES
30,500 Mahindra & Mahindra Ltd.
(GDR)*...................... $ 343,125
---------------
BANKS
21,200 State Bank of India (GDR)*.... 473,820
---------------
METALS & MINING
22,000 Hindalco Industries Ltd.
(GDR)*...................... 709,500
---------------
TOTAL INDIA................... 1,526,445
---------------
INDONESIA (0.3%)
BANKS
921,000 PT Bank Negara................ 527,656
---------------
MEDICAL PRODUCTS & SUPPLIES
278,000 PT Kalbe Farma................ 312,750
---------------
TOBACCO
55,000 PT Hanjaya Mandala
Sampoerna................... 257,813
---------------
TOTAL INDONESIA............... 1,098,219
---------------
ITALY (1.4%)
APPAREL
7,500 Fila Holding SpA (ADR)........ 407,813
---------------
APPLIANCES & HOUSEHOLD DURABLES
19,375 Industrie Natuzzi SpA (ADR)... 462,578
---------------
ELECTRICAL EQUIPMENT
32,945 Gewiss SpA.................... 465,869
---------------
ELECTRONICS
17,047 Saes Getters Di Risp.......... 166,808
12,791 Saes Getters SpA.............. 183,165
---------------
349,973
---------------
ENERGY
298,000 Ente Nazionale Idrocarburi
SpA......................... 1,506,891
---------------
TELECOMMUNICATIONS
260,000 Seat SpA*..................... 89,976
260,000 Stet Societa Finanziaria
Telefonica SpA.............. 1,130,907
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
546,000 Telecom Italia Mobile SpA..... $ 1,563,723
---------------
2,784,606
---------------
VISION CARE & INSTRUMENTS
7,235 De Rigo SpA (ADR)*............ 49,741
---------------
TOTAL ITALY................... 6,027,471
---------------
JAPAN (17.7%)
AUTO PARTS
20,000 Bridgestone Metalpha Corp..... 156,730
---------------
AUTOMOBILES
433,000 Mitsubishi Motors Corp........ 3,207,796
150,000 Suzuki Motor Co., Ltd......... 1,454,193
---------------
4,661,989
---------------
BANKING
94,000 Asahi Bank, Ltd............... 590,822
133,000 Bank of Tokyo-Mitsubishi
Ltd......................... 2,073,760
161,000 Sumitomo Trust & Banking...... 1,287,688
---------------
3,952,270
---------------
BUILDING & CONSTRUCTION
2,000 Kaneshita Construction........ 14,461
322,000 Sekisui House Ltd............. 3,147,681
---------------
3,162,142
---------------
BUILDING MATERIALS
10,000 Nichiha Corp.................. 144,611
---------------
BUSINESS & PUBLIC SERVICES
5,000 Chuo Warehouse Co............. 34,052
3,000 Nichii Gakkan Co.............. 131,120
67,000 Secom......................... 3,761,916
---------------
3,927,088
---------------
CHEMICALS
600,000 Asahi Chemical Industrial Co.,
Ltd......................... 3,121,667
62,000 Kaneka Corp................... 330,086
323,000 Nippon Shokubai K.K. Co....... 1,925,788
30,000 Sumitomo Bakelite Co., Ltd.... 198,740
---------------
5,576,281
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE
12,000 Ines.......................... $ 142,511
12,000 Meitec........................ 240,427
---------------
382,938
---------------
CONGLOMERATES
554,000 Mitsui & Co................... 4,063,920
13,000 Yamae Hisano.................. 102,609
---------------
4,166,529
---------------
ELECTRICAL EQUIPMENT
195,000 Canon, Inc.................... 4,174,745
40,000 Kyocera Corp.................. 2,268,541
30,700 Mabuchi Motor Co.............. 1,510,446
150,000 Matsushita Electric Industrial
Co., Ltd.................... 2,338,827
11,000 Mitsui High-Tec............... 223,057
Y 1,000K Nippon Densan Corp. 1.00%
09/30/03 (Conv.)............ 9,937
16,500 Nitto Electric Works.......... 254,605
66,000 Rohm Co....................... 4,868,153
---------------
15,648,311
---------------
ELECTRONICS
46,000 Sony Corp..................... 3,214,574
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
25,000 Toshiba Ceramics Co., Ltd..... 168,242
---------------
ENGINEERING & CONSTRUCTION
119,000 Kajima Corp................... 553,757
---------------
FINANCIAL SERVICES
405,000 New Japan Securities Co.,
Ltd.*....................... 1,047,019
150,000 Nomura Securities Co., Ltd.... 1,660,204
---------------
2,707,223
---------------
HEALTH & PERSONAL CARE
11,000 Aderans Co., Ltd.............. 238,164
20,000 Kawasumi Laboratories, Inc.... 242,365
15,000 Terumo Corp................... 212,070
---------------
692,599
---------------
INSURANCE
312,000 Tokio Marine & Fire Insurance
Co.......................... 3,175,957
---------------
LEISURE
3,000 H.I.S. Co., Ltd............... 135,725
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MACHINE TOOLS
6,600 Nitto Kohki Co., Ltd.......... $ 188,221
---------------
MACHINERY
18,000 Aichi Corp.................... 103,975
273,980 Asahi Diamond Industries Co.,
Ltd......................... 2,180,242
225,000 Minebea Co., Ltd.............. 1,872,273
439,000 Mitsubishi Heavy Industries,
Ltd......................... 2,855,025
30,000 OSG Corp...................... 178,139
---------------
7,189,654
---------------
METALS
10,000 Sumitomo Sitix Corp........... 175,311
---------------
REAL ESTATE
15,000 Chubu Sekiwa Real Estate,
Ltd......................... 130,877
400 Japan Industrial Land
Development................. 4,363
9,000 Sekiwa Real Estate............ 59,622
---------------
194,862
---------------
RETAIL
6,000 Circle K Japan Co., Ltd....... 252,060
9,300 Ministop Co., Ltd............. 235,919
11,000 Olympic Corp.................. 227,500
11,000 Shimachu Co., Ltd............. 257,715
---------------
973,194
---------------
STEEL & IRON
1,500,000 NKK Corp...................... 3,150,751
20,000 Yamato Kogyo Co., Ltd......... 171,272
---------------
3,322,023
---------------
TELECOMMUNICATIONS
446 DDI Corp...................... 2,814,073
363 Nippon Telegraph & Telephone
Corp........................ 2,554,314
---------------
5,368,387
---------------
TELECOMMUNICATIONS EQUIPMENT
3,000 Forval Corp................... 76,587
Y 11,000K Forval Corp. 1.35% 09/30/03
(Conv.)..................... 82,647
---------------
159,234
---------------
TEXTILES
192,000 Kuraray Co., Ltd.............. 1,549,588
70,000 Nitto Boseki Co., Ltd......... 202,456
---------------
1,752,044
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TRANSPORTATION
369,000 Nippon Yusen Kabushiki
Kaish....................... $ 1,305,720
100,000 Yamato Transport Co., Ltd..... 985,620
---------------
2,291,340
---------------
WHOLESALE DISTRIBUTOR
3,960 Fujimi, Inc................... 207,950
---------------
TOTAL JAPAN................... 74,249,186
---------------
MALAYSIA (3.4%)
AGRICULTURE
218,000 IOI Corporated Berhad......... 362,337
---------------
AUTO PARTS
74,000 MBM Resources Berhad.......... 203,001
---------------
AUTOMOBILES
168,000 Diversified Resources
Berhad...................... 548,975
78,000 Perusahaan Otomobil Nasional
Berhad...................... 494,029
---------------
1,043,004
---------------
BANKING
334,000 Arab Malaysian Finance
Berhad...................... 1,010,570
163,000 DCB Holdings Berhad........... 614,834
456,250 Public Finance Berhad......... 754,649
---------------
2,380,053
---------------
BUILDING & CONSTRUCTION
139,999 Gamuda Berhad................. 530,898
18,666 Gamuda Berhad (Warrants)...... 6,024
280,000 Metacorp Berhad............... 807,649
191,000 Road Builder (M) Holdings
Berhad...................... 1,109,569
272,000 Sunway City Berhad............ 696,789
---------------
3,150,929
---------------
ENTERTAINMENT
120,000 Berjaya Sports Toto Berhad.... 614,814
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
40,000 RJ Reynolds Berhad............ 98,435
---------------
LEISURE
1,022,000 Magnum Corporation Berhad..... 1,937,793
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MACHINERY
100,000 UMW Holdings Berhad........... $ 552,687
338,000 United Engineers Malaysia
Berhad...................... 2,945,296
---------------
3,497,983
---------------
REAL ESTATE
186,000 Bandar Raya Developments
Berhad...................... 366,177
---------------
TELECOMMUNICATIONS
50,000 Telekom Malaysia Berhad....... 389,301
---------------
TOTAL MALAYSIA................ 14,043,827
---------------
MEXICO (2.9%)
BUILDING & CONSTRUCTION
220,000 International de Ceramica S.A.
de C.V. (ADR)*.............. 304,829
---------------
BUILDING MATERIALS
430,000 Cemex, S.A. de C.V. (B
Shares)..................... 1,739,570
---------------
ENGINEERING & CONSTRUCTION
274,240 Corporacion GEO S.A. de C.V.
(Series B)*................. 1,310,528
---------------
FINANCIAL SERVICES
4,500,000 Grupo Financiero Bancomer S.A.
de C.V. (B Shares)*......... 1,609,987
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
124,000 Sigma Alimentos S.A........... 1,332,491
---------------
FOODS & BEVERAGES
273,000 Fomento Economico Mexicano
S.A. de C.V. (Series B)..... 1,211,416
---------------
RETAIL
380,000 Nacional de Drogas S.A. de
C.V. (Series L)............. 1,369,153
---------------
TELECOMMUNICATIONS
87,800 Telefonos de Mexico S.A. de
C.V. (Series L) (ADR)....... 3,380,300
---------------
TOTAL MEXICO.................. 12,258,274
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
NETHERLANDS (4.4%)
APPLIANCES & HOUSEHOLD DURABLES
32,986 Ahrend Groep NV............... $ 2,105,527
---------------
BANKING
52,771 ING Groep NV.................. 2,076,116
---------------
CHEMICALS
11,900 Akzo Nobel.................... 1,706,697
---------------
CONSUMER PRODUCTS
23,770 Gucci Group NV................ 1,736,182
---------------
INSURANCE
22,936 Aegon NV...................... 1,612,993
---------------
MACHINERY
14,740 Aalberts Industries NV........ 337,425
---------------
MEDIA
100,000 Elsevier NV................... 1,623,722
35,000 PolyGram NV................... 1,757,081
60,000 Ver Ned Utigev Ver Bezit NV... 1,232,964
18,620 Wolters Kluwer NV............. 2,239,277
---------------
6,853,044
---------------
MERCHANDISING
31,215 Koninklijke Ahold NV.......... 2,171,955
---------------
TOTAL NETHERLANDS............. 18,599,939
---------------
NORWAY (0.3%)
DATA PROCESSING
18,979 System Etikettering AS........ 275,432
---------------
ENTERTAINMENT
77,001 NCL Holdings AS (Series A)*... 238,627
---------------
MACHINERY
26,485 Tomra Systems AS.............. 532,503
---------------
OIL DRILLING & SERVICES
39,830 Hitec AS*..................... 225,794
---------------
TOTAL NORWAY.................. 1,272,356
---------------
PERU (0.3%)
FOOD SERVICES
400,000 Consorcio Alimentos Fabril
Pacifico.................... 573,585
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
755,917 Cerveceria Backus & Johnston
S.A.*....................... $ 676,046
---------------
TOTAL PERU.................... 1,249,631
---------------
PHILIPPINES (0.2%)
BANKING
3,129 Metropolitan Bank & Trust
Co.......................... 81,373
2,600 Union Bank of Philippines*.... 2,863
---------------
84,236
---------------
CONGLOMERATES
44,712 Ayala Corp. - 144A** *........ 380,052
---------------
ENGINEERING & CONSTRUCTION
405,000 DMCI Holdings, Inc.*.......... 288,297
---------------
OIL DRILLING & SERVICES
112,500 First Philippine Holdings
Corp. (B Shares)............ 207,147
---------------
TRANSPORTATION
26,400 International Container
Terminal.................... 15,786
---------------
TOTAL PHILIPPINES............. 975,518
---------------
PORTUGAL (0.1%)
MEDIA
30,000 Journalgeste*................. 320,532
226,000 TVI-Televisao Independente
S.A.*....................... 114,026
---------------
TOTAL PORTUGAL................ 434,558
---------------
SINGAPORE (1.2%)
BANKING
107,000 Overseas Chinese Banking
Corp., Ltd.................. 1,274,074
---------------
ELECTRICAL EQUIPMENT
110,000 Amtek Engineering Ltd......... 192,662
52,500 Venture Manufacturing Ltd..... 128,660
---------------
321,322
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE
139,000 City Developments Ltd......... $ 1,231,707
334,000 DBS Land Ltd.................. 1,142,236
---------------
2,373,943
---------------
SHIPBUILDING
126,000 Sembawang Corp., Ltd.......... 606,231
---------------
TRANSPORTATION
79,000 Singapore Airlines Ltd........ 634,406
---------------
TOTAL SINGAPORE............... 5,209,976
---------------
SOUTH AFRICA (0.6%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
120,000 Malbak Ltd.................... 597,420
---------------
METALS & MINING
21,500 De Beers Consolidated Mines
Ltd. (Units)++.............. 783,322
35,200 Rustenburg Platinum Holdings
Ltd......................... 569,541
---------------
1,352,863
---------------
OIL & GAS
50,000 Sasol Ltd..................... 534,623
---------------
TOTAL SOUTH AFRICA............ 2,484,906
---------------
SOUTH KOREA (0.2%)
ELECTRICAL EQUIPMENT
14,353 Samsung Electronics Co. (GDS)
(Non-voting) - 144A**....... 292,683
---------------
UTILITIES - ELECTRIC
15,000 Korea Electric Power Corp..... 436,730
---------------
TOTAL SOUTH KOREA............. 729,413
---------------
SPAIN (1.6%)
BANKING
25,000 Banco Bilbao Vizcaya S.A...... 1,509,500
11,250 Banco Popular Espanol S.A..... 2,012,491
---------------
3,521,991
---------------
FINANCIAL SERVICES
13,300 Corporacion Financiera Alba... 1,307,537
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
NATURAL GAS
4,360 Gas Natural SDG S.A. (Series
E).......................... $ 947,786
---------------
TELECOMMUNICATIONS
45,000 Telefonica de Espana S.A...... 1,081,457
---------------
TOTAL SPAIN................... 6,858,771
---------------
SWEDEN (2.0%)
AUTO TRUCKS & PARTS
73,400 Scania AB (A Shares).......... 1,829,434
---------------
BUILDING & CONSTRUCTION
5,570 Cardo AB...................... 178,860
---------------
COMMERCIAL SERVICES
42,700 Securitas AB (Series "B"
Free)....................... 1,216,300
---------------
INSURANCE
58,700 Scandia Forsakrings AB........ 1,838,487
---------------
PHARMACEUTICALS
30,000 Astra AB (B Shares)........... 1,402,479
---------------
STEEL & IRON
7,713 SinterCast AB (Series "A"
Free)*...................... 154,606
---------------
TELECOMMUNICATIONS
49,500 Ericsson (L.M.) Telephone Co.
AB (Series "B" Free)........ 1,736,384
---------------
TOTAL SWEDEN.................. 8,356,550
---------------
SWITZERLAND (2.0%)
CHEMICALS - SPECIALTY
2,253 Ciba Specialty Chemicals AG... 185,157
---------------
ELECTRICAL EQUIPMENT
1,280 ABB AG - Bearer............... 1,529,282
---------------
INSURANCE
1,000 Schweizerische
Rueckversicherungs-
Gesellschaft................ 1,056,630
---------------
PHARMACEUTICALS
2,253 Novartis AG................... 2,778,907
312 Roche Holding AG.............. 2,681,519
---------------
5,460,426
---------------
TOTAL SWITZERLAND............. 8,231,495
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TAIWAN (0.5%)
BUILDING MATERIALS
9,087 Asia Cement Corp. (GDR)....... $ 168,109
---------------
INVESTMENT COMPANIES
100,000 Paribas Emerging Markets Fund
- Taiwan Series*............ 1,043,000
---------------
RETAIL
$ 180K Far Eastern Department Stores
3.00% due 07/06/01 (Conv.) -
144A**...................... 188,550
---------------
STEEL
12,230 China Steel Corp.............. 236,039
---------------
TRANSPORTATION
$ 300K Yang Ming Marine
Transportation 2.00% due
10/06/01 (Conv.) - 144A**... 344,250
---------------
TOTAL TAIWAN.................. 1,979,948
---------------
THAILAND (0.1%)
OIL RELATED
18,000 PTT Exploration & Production
PCL......................... 267,746
---------------
UNITED KINGDOM (12.3%)
AEROSPACE & DEFENSE
46,000 British Aerospace PLC......... 1,027,747
353,000 Rolls-Royce PLC............... 1,318,328
63,000 Smiths Industries PLC......... 821,424
25,800 Vickers PLC................... 101,425
---------------
3,268,924
---------------
APPLIANCES & HOUSEHOLD DURABLES
53,500 MFI Furniture Group PLC....... 127,068
---------------
AUTO PARTS
24,800 Laird Group PLC............... 144,006
---------------
AUTO PARTS - ORIGINAL EQUIPMENT
231,900 BBA Group PLC................. 1,375,065
---------------
BANKING
119,000 Abbey National PLC............ 1,452,169
93,000 National Westminster Bank
PLC......................... 1,056,436
---------------
2,508,605
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
BUILDING & CONSTRUCTION
243,000 Blue Circle Industries PLC.... $ 1,651,841
80,000 CRH PLC....................... 791,482
---------------
2,443,323
---------------
BUILDING MATERIALS
51,800 Scapa Group................... 187,091
---------------
BUSINESS & PUBLIC SERVICES
59,000 Reuters Holdings PLC.......... 599,180
---------------
CHEMICALS
120,000 Albright & Wilson PLC......... 307,616
57,585 Allied Colloids Group PLC..... 116,019
125,000 Courtaulds PLC................ 743,242
---------------
1,166,877
---------------
COMPUTER SOFTWARE
54,363 SEMA Group PLC................ 1,224,168
---------------
CONGLOMERATES
250,000 BTR PLC....................... 1,093,365
---------------
CONSUMER PRODUCTS
110,000 Vendome Luxury Group PLC
(Units)++................... 918,918
---------------
DISTRIBUTION
24,100 Cowie Group PLC............... 155,140
---------------
ELECTRICAL EQUIPMENT
224,000 General Electric Co. PLC...... 1,372,251
221,000 The BICC Group PLC............ 966,535
---------------
2,338,786
---------------
ENERGY
284,000 Lasmo PLC..................... 1,107,157
233,000 Shell Transport & Trading Co.
PLC......................... 4,140,946
---------------
5,248,103
---------------
ENTERTAINMENT
72,000 Granada Group PLC............. 1,083,832
30,100 London Clubs International
PLC......................... 205,104
---------------
1,288,936
---------------
FOOD PROCESSING
146,000 Associated British Foods
PLC......................... 1,312,923
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
71,000 Bass PLC...................... 946,084
33,650 Devro International PLC....... 167,561
186,000 Guinness PLC.................. 1,567,517
---------------
2,681,162
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOREST PRODUCTS, PAPER & PACKING
29,700 David S. Smith Holdings PLC... $ 121,135
100,000 De La Rue PLC................. 912,366
---------------
1,033,501
---------------
HEALTH & PERSONAL CARE
169,000 Glaxo Wellcome PLC............ 3,089,334
236,833 Medeva PLC.................... 1,187,073
---------------
4,276,407
---------------
HEALTHCARE
6,600 Amersham International PLC.... 133,838
---------------
INSURANCE
109,000 General Accident PLC.......... 1,460,027
195,000 Prudential Corp. PLC.......... 1,814,249
223,000 Royal & Sun Alliance Insurance
Group PLC................... 1,640,080
---------------
4,914,356
---------------
MACHINERY
10,700 Spirax-Sarco Engineering
PLC......................... 114,536
290,000 Tomkins PLC................... 1,292,054
---------------
1,406,590
---------------
MANUFACTURING
65,700 Bunzl PLC..................... 234,604
9,100 Vosper Thornycroft Holdings
PLC......................... 132,960
---------------
367,564
---------------
MEDIA
6,500 Daily Mail & General Trust
(Class A)................... 175,676
15,900 EMAP PLC...................... 202,363
54,000 Flextech PLC*................. 550,171
85,100 General Cable PLC*............ 254,394
45,100 Mirror Group PLC.............. 154,396
---------------
1,337,000
---------------
MERCHANDISING
107,000 Next PLC...................... 1,091,907
---------------
PHARMACEUTICALS
117,430 British Biotech PLC*.......... 482,799
---------------
REAL ESTATE
20,400 Bradford Properties Trust
PLC......................... 97,572
54,375 Pillar Property Investments
PLC......................... 197,727
---------------
295,299
---------------
RESTAURANTS
9,600 Compass Group PLC............. 103,312
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
484,000 British Telecommunications
PLC......................... $ 3,535,852
371,730 Securicor PLC................. 1,790,148
224,000 Vodafone Group PLC............ 1,023,684
---------------
6,349,684
---------------
TRANSPORTATION
31,400 Associated British Ports
Holdings PLC................ 141,956
102,000 British Airways PLC........... 1,096,019
15,800 Forth Ports PLC............... 168,223
14,088 Stagecoach Holdings PLC....... 156,918
---------------
1,563,116
---------------
TOTAL UNITED KINGDOM.......... 51,437,013
---------------
UNITED STATES (24.7%)
AEROSPACE & DEFENSE
25,000 Boeing Co..................... 2,465,625
43,000 General Motors Corp. (Class
H).......................... 2,332,750
125,000 Watkins-Johnson Co............ 2,859,375
---------------
7,657,750
---------------
AUTOMOBILES
100,000 Ford Motor Co................. 3,137,500
55,000 General Motors Corp........... 3,045,625
---------------
6,183,125
---------------
BANKING
30,000 Citicorp...................... 3,247,500
---------------
BEVERAGES - SOFT DRINKS
56,000 Coca Cola Co.................. 3,129,000
103,000 PepsiCo Inc................... 3,360,375
---------------
6,489,375
---------------
COMMUNICATIONS - EQUIPMENT & SOFTWARE
48,000 Cisco Systems, Inc.*.......... 2,310,000
---------------
COMPUTER SOFTWARE
32,000 Microsoft Corp.*.............. 2,932,000
69,000 Oracle Corp.*................. 2,656,500
---------------
5,588,500
---------------
COMPUTERS - PERIPHERAL EQUIPMENT
59,000 Seagate Technology, Inc.*..... 2,647,625
---------------
COMPUTERS - SYSTEMS
64,000 Hewlett-Packard Co............ 3,408,000
---------------
CONGLOMERATES
51,000 Litton Industries, Inc.*...... 2,052,750
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT
56,000 Emerson Electric Co........... $ 2,520,000
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
97,000 Micron Technology, Inc........ 3,928,500
---------------
ENERGY
28,000 Exxon Corp.................... 3,017,000
21,000 Mobil Corp.................... 2,743,125
26,000 Texaco, Inc................... 2,847,000
---------------
8,607,125
---------------
FINANCIAL SERVICES
81,000 Federal National Mortgage
Assoc....................... 2,926,125
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
30,000 Procter & Gamble Co........... 3,450,000
---------------
FOREST PRODUCTS, PAPER & PACKING
54,000 International Paper Co........ 2,099,250
---------------
HARDWARE & TOOLS
75,000 Black & Decker Corp........... 2,409,375
---------------
HEALTHCARE - MISCELLANEOUS
36,000 PacifiCare Health Systems,
Inc. (Class B)*............. 3,105,000
---------------
HEALTHCARE PRODUCTS & SERVICES
65,000 Baxter International, Inc..... 2,803,125
79,500 Columbia/HCA Healthcare
Corp........................ 2,673,187
---------------
5,476,312
---------------
HOUSEWARES
60,000 Tupperware Corp............... 2,010,000
---------------
INDUSTRIALS
39,000 Honeywell, Inc................ 2,647,125
---------------
INSURANCE
29,000 American International Group,
Inc......................... 3,403,875
---------------
OFFICE EQUIPMENT
18,000 Ikon Office Solutions, Inc.... 603,000
---------------
PAPER & FOREST PRODUCTS
51,000 Champion International
Corp........................ 2,320,500
9,000 Unisource Worldwide, Inc...... 138,375
---------------
2,458,875
---------------
PHARMACEUTICALS
49,000 Johnson & Johnson............. 2,590,875
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
RETAIL
370,000 Charming Shoppes, Inc.*....... $ 1,988,750
54,000 Home Depot, Inc............... 2,889,000
---------------
4,877,750
---------------
RETAIL - SPECIALTY
90,000 Circuit City Stores, Inc...... 3,003,750
---------------
SAVINGS & LOAN ASSOCIATIONS
45,000 Golden West Financial Corp.... 2,823,750
---------------
STEEL & IRON
193,000 Bethlehem Steel Corp.*........ 1,592,250
---------------
UTILITIES - GAS
72,000 Williams Co., Inc............. 3,204,000
---------------
TOTAL UNITED STATES........... 103,321,562
---------------
VENEZUELA (0.1%)
TELECOMMUNICATIONS
13,000 Compania Anonima Nacional
Telefonos de Venezuela
(Class D) (ADR)............. 378,625
---------------
TOTAL COMMON AND PREFERRED
STOCKS, WARRANTS, RIGHTS AND
BONDS
(IDENTIFIED COST
$371,453,404)................. 403,539,416
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (3.1%)
U.S. GOVERNMENT AGENCY
$ 13,000 Federal Home Loan Mortgage
Corp. 6.50% due04/01/97
(Amortized Cost
$13,000,000)................ 13,000,000
---------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
PURCHASED PUT OPTION ON FOREIGN CURRENCY (0.2%)
DEM 24,165 July 17, 1997/DEM 1.611
(IDENTIFIED COST
$287,250)................... $ 627,750
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $384,740,654) (B)...... 99.6% 417,167,166
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES............................. 0.4 1,791,008
------ ---------------
NET ASSETS.............................. 100.0% $ 418,958,174
------ ---------------
------ ---------------
<FN>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
GDS Global Depository Shares.
K In thousands.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
generally stocks with attached warrants.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $62,160,161 and the
aggregate gross unrealized depreciation is $29,733,649, resulting in net
unrealized appreciation of $32,426,512.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT MARCH 31, 1997:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
- ------------------------------------------------------------
<S> <C> <C> <C>
L 339,840 $ 550,031 04/01/97 $ (6,627)
CHF 350,179 $ 238,606 04/01/97 (3,230)
NLG 1,396,751 $ 733,935 04/01/97 (9,651)
$ 885,414 Y 109,437,189 04/01/97 (1,288)
Y 83,303,207 $ 673,702 04/02/97 708
--------------
Net Unrealized Depreciation........... $ (20,088)
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
SUMMARY OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense....................... $ 10,926,674 2.6%
Agriculture............................... 362,337 0.1
Apparel................................... 2,036,461 0.5
Appliances & Household Durables........... 2,695,173 0.6
Auto Parts................................ 503,738 0.1
Auto Parts - Original Equipment........... 1,375,065 0.3
Auto Trucks & Parts....................... 1,829,434 0.4
Automobiles............................... 17,734,944 4.2
Banking................................... 22,502,064 5.4
Banks..................................... 1,001,476 0.2
Beverages - Soft Drinks................... 6,489,375 1.5
Building & Construction................... 10,522,120 2.5
Building Materials........................ 3,715,028 0.9
Business & Public Services................ 6,893,496 1.7
Chemicals................................. 13,530,069 3.2
Chemicals - Specialty..................... 185,157 0.0
Commercial Services....................... 1,417,557 0.3
Communications - Equipment & Software..... 2,310,000 0.6
Computer Software......................... 7,195,606 1.7
Computers - Peripheral Equipment.......... 2,647,625 0.6
Computers - Systems....................... 3,408,000 0.8
Conglomerates............................. 11,618,696 2.8
Consumer Products......................... 4,846,126 1.2
Currency Options.......................... 627,750 0.2
Data Processing........................... 275,432 0.1
Distribution.............................. 155,140 0.0
Electrical Equipment...................... 23,116,253 5.6
Electronics............................... 3,564,547 0.9
Electronics - Semiconductors/
Components.............................. 4,096,742 1.0
Energy.................................... 20,216,561 4.9
Engineering & Construction................ 2,152,581 0.5
Entertainment............................. 2,406,940 0.6
Financial Services........................ 9,981,506 2.4
Food Processing........................... 1,312,923 0.3
Food Services............................. 573,585 0.1
Food, Beverage, Tobacco & Household
Products................................ 12,552,113 3.0
Foods & Beverages......................... 2,170,511 0.5
Forest Products, Paper & Packing.......... 3,132,751 0.7
Furniture................................. 183,706 0.0
Hardware & Tools.......................... 2,409,375 0.6
Health & Personal Care.................... 6,005,493 1.4
Healthcare................................ 133,838 0.0
Healthcare - Miscellaneous................ 3,105,000 0.7
Healthcare Products & Services............ 5,476,312 1.3
Housewares................................ 2,010,000 0.5
Industrials............................... 3,172,107 0.8
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Insurance................................. $ 20,838,342 5.0%
Investment Companies...................... 2,569,000 0.6
Leisure................................... 2,073,517 0.5
Machine Tools............................. 188,221 0.0
Machinery................................. 12,964,155 3.1
Manufacturing............................. 1,000,596 0.2
Media..................................... 8,624,602 2.1
Medical Products & Supplies............... 312,750 0.1
Merchandising............................. 3,263,862 0.8
Metals.................................... 175,311 0.0
Metals & Mining........................... 3,374,762 0.8
Natural Gas............................... 947,786 0.2
Office Equipment.......................... 603,000 0.1
Oil & Gas................................. 534,623 0.1
Oil Drilling & Services................... 432,941 0.1
Oil Related............................... 267,746 0.1
Paper & Forest Products................... 2,458,875 0.6
Pharmaceuticals........................... 13,682,028 3.3
Real Estate............................... 10,139,940 2.4
Restaurants............................... 199,026 0.1
Retail.................................... 14,596,000 3.5
Retail - Specialty........................ 3,003,750 0.7
Savings & Loan Associations............... 2,823,750 0.7
Shipbuilding.............................. 606,231 0.1
Steel..................................... 1,546,666 0.4
Steel & Iron.............................. 7,301,690 1.7
Telecommunications........................ 26,030,067 6.2
Telecommunications Equipment.............. 159,234 0.0
Textiles.................................. 2,494,290 0.6
Tobacco................................... 257,812 0.1
Transportation............................ 5,320,014 1.3
U.S. Government Agency.................... 13,000,000 3.1
Utilities................................. 1,491,869 0.4
Utilities - Electric...................... 5,843,501 1.4
Utilities - Gas........................... 3,204,000 0.8
Vision Care & Instruments................. 49,741 0.0
Wholesale & International Trade........... 2,131 0.0
Wholesale Distributor..................... 207,950 0.1
----------------- -----
$ 417,167,166 99.6%
----------------- -----
----------------- -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks............................. $ 399,753,868 95.4%
Convertible Bonds......................... 679,715 0.1
Preferred Stocks.......................... 2,953,809 0.7
Purchased Option Outstanding.............. 627,750 0.2
Rights and Warrants....................... 152,024 0.1
Short-Term Investments.................... 13,000,000 3.1
----------------- -----
$ 417,167,166 99.6%
----------------- -----
----------------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $384,740,654)............................ $417,167,166
Cash (including $2,055,643 in foreign currency)............. 2,579,859
Receivable for:
Investments sold........................................ 1,767,206
Dividends............................................... 769,133
Shares of beneficial interest sold...................... 447,053
Foreign withholding taxes reclaimed..................... 133,780
Interest................................................ 16,622
Prepaid expenses and other assets........................... 26,219
------------
TOTAL ASSETS........................................... 422,907,038
------------
LIABILITIES:
Payable for:
Investments purchased................................... 2,252,884
Shares of beneficial interest repurchased............... 473,058
Plan of distribution fee................................ 367,786
Investment management fee............................... 367,786
Accrued expenses and other payables......................... 487,350
------------
TOTAL LIABILITIES...................................... 3,948,864
------------
NET ASSETS:
Paid-in-capital............................................. 381,184,491
Net unrealized appreciation................................. 32,426,602
Net investment loss......................................... (1,043,971)
Accumulated undistributed net realized gain................. 6,391,052
------------
NET ASSETS............................................. $418,958,174
------------
------------
NET ASSET VALUE PER SHARE,
24,260,898 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$17.27
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $642,014 foreign withholding tax)......... $ 7,280,358
Interest.................................................... 234,481
-----------
TOTAL INCOME........................................... 7,514,839
-----------
EXPENSES
Plan of distribution fee.................................... 4,941,515
Investment management fee................................... 4,936,673
Transfer agent fees and expenses............................ 860,950
Custodian fees.............................................. 496,155
Professional fees........................................... 174,924
Shareholder reports and notices............................. 150,159
Registration fees........................................... 47,655
Trustees' fees and expenses................................. 16,595
Other....................................................... 36,856
-----------
TOTAL EXPENSES......................................... 11,661,482
-----------
NET INVESTMENT LOSS.................................... (4,146,643)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments............................................. 19,297,729
Foreign exchange transactions........................... 1,668,371
-----------
NET GAIN............................................... 20,966,100
-----------
Net change in unrealized appreciation/depreciation on:
Investments............................................. (8,008,589)
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ (713,283)
-----------
NET DEPRECIATION....................................... (8,721,872)
-----------
NET GAIN............................................... 12,244,228
-----------
NET INCREASE................................................ $ 8,097,585
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED FOR THE YEAR
MARCH 31, ENDED
1997 MARCH 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss......................................... $ (4,146,643) $ (1,087,335)
Net realized gain........................................... 20,966,100 41,362,377
Net change in unrealized appreciation....................... (8,721,872) 36,965,641
------------- --------------
NET INCREASE........................................... 8,097,585 77,240,683
Distributions from net realized gain........................ (31,533,387) (692,945)
Net decrease from transactions in shares of beneficial
interest.................................................. (77,594,246) (68,817,900)
------------- --------------
NET INCREASE (DECREASE)................................ (101,030,048) 7,729,838
NET ASSETS:
Beginning of period......................................... 519,988,222 512,258,384
------------- --------------
END OF PERIOD
(INCLUDING A NET INVESTMENT LOSS OF $1,043,971 AND
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF
$903,011, RESPECTIVELY)................................. $ 418,958,174 $ 519,988,222
------------- --------------
------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter World Wide Investment Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is total
return on its assets primarily through long-term capital growth and to a lesser
extent, from income. The Fund seeks to achieve its objective by investing in
common stocks and equivalents, preferred stocks, bonds and other debt
obligations of domestic and foreign companies, governments and international
organizations. The Fund was organized as a Massachusetts business trust on July
7, 1983 and commenced operations on October 31, 1983.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange; the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") or Morgan
Grenfell Investment Services Limited (the "Sub-Adviser") that sale and 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); and (4)
short-term debt securities having a maturity date of more than sixty days at
time of purchase are valued on a mark-to-market basis until sixty days prior to
maturity and thereafter at amortized cost based on their value on the 61st day.
Short-term debt securities having a maturity date of sixty days or less at the
time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
by the identified cost method. Dividend income and other distributions are
recorded on the ex-dividend date except for certain dividends on foreign
securities which are recorded as soon as the Fund is informed after the
ex-dividend date. Discounts are accreted over the life of the respective
securities. Interest income is accrued daily.
C. OPTION ACCOUNTING PRINCIPLES -- When the Fund purchases a call or put option,
the premium paid is recorded as an investment which is subsequently
marked-to-market to reflect the current market value. If a purchased option
expires, the Fund will realize a loss to the extent of the premium paid. If the
Fund enters into a closing sale transaction, a gain or loss is realized for the
difference between the proceeds from the sale and the cost of the option. If a
put option is exercised, the cost of the security or currency sold upon exercise
will be increased by the premium originally paid. If a call option is exercised,
the cost of the security purchased upon exercise will be increased by the
premium originally paid.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 1.0% to the portion of daily net assets not exceeding $500
million and 0.95% to the portion of daily net assets in excess of $500 million.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services as the Fund may reasonably
require in the conduct of its business and also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.
Under a Sub-Advisory Agreement between the Sub-Adviser and the Investment
Manager, the Sub-Adviser provides the Fund with investment advice and portfolio
management relating to the Fund's non-U.S. investments, subject to the overall
supervision of the Investment Manager. As compensation for its services provided
pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Adviser monthly compensation equal to 40% of its monthly compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
Rule 12b-1 under the Act pursuant to which the Fund pays the Distributor
compensation, accrued daily and payable monthly, at an annual rate of 1.0% of
the lesser of: (a) the average daily aggregate gross sales of the Fund's shares
since the Fund's inception (not including reinvestment of dividend or capital
gain distributions) less the average daily aggregate net asset value of the
Fund's shares redeemed since the Fund's inception upon which a contingent
deferred sales charge has been imposed or upon which such charge has been
waived; or (b) the Fund's average daily net assets. Amounts paid under the Plan
are paid to the Distributor to compensate it for the services provided and the
expenses borne by it and others in the distribution of the Fund's shares,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and other employees or selected broker-dealers who engage in or
support distribution of the Fund's shares or who service shareholder accounts,
including overhead and telephone expenses, printing and distribution of
prospectuses and reports used in connection with the offering of the Fund's
shares to other than current shareholders and preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may be compensated under the Plan for its opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses incurred by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered by the Distributor may be recovered through future
distribution fees from the Fund and contingent deferred sales charges from the
Fund's shareholders.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
contingent deferred sales charges paid by investors upon redemption of shares,
if for any reason the Plan is terminated, the Trustees will consider at that
time the manner in which to treat such expenses. The Distributor has advised the
Fund that such excess amounts, included carrying charges, totaled $20,399,997 at
March 31, 1997.
The Distributor has informed the Fund that for the year ended March 31, 1997, it
received approximately $803,000 in contingent deferred sales charges from
redemptions of the Fund's shares.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended March 31, 1997 aggregated
$232,691,627 and $356,048,768, respectively.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
For the year ended March 31, 1997, the Fund incurred brokerage commissions of
$16,375 with DWR for portfolio transactions executed on behalf of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $148,000.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended March 31, 1997 included
in Trustees' fees and expenses in the Statement of Operations amounted to
$1,290. At March 31, 1997, the Fund had an accrued pension liability of $49,252
which is included in accrued expenses in the Statement of Assets and
Liabilities.
During the year ended March 31, 1997, foreign regulatory authorities initiated
an investigation involving an individual associated with an affiliate of the
Fund's Sub-Adviser. Although this investigation did not at any time involve the
Fund or the Investment Manager, the Sub-Adviser's affiliate purchased from the
Fund two securities whose separate holdings by the affiliate had become part of
the investigation. These securities represented only a very small percentage of
the Fund's portfolio (approximately one-twentieth of one percent) and were
purchased by the Sub-Adviser's affiliate at the Fund's cost plus interest.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C>
Sold.............................................. 3,614,740 $ 65,929,566 5,790,518 $ 100,249,259
Reinvestment of distributions..................... 1,730,254 29,812,283 37,871 656,681
-------------- ------------------- -------------- -------------------
5,344,994 95,741,849 5,828,389 100,905,940
Repurchased....................................... (9,610,570) (173,336,095) (9,903,997) (169,723,840)
-------------- ------------------- -------------- -------------------
Net decrease...................................... (4,265,576) $ (77,594,246) (4,075,608) $ (68,817,900)
-------------- ------------------- -------------- -------------------
-------------- ------------------- -------------- -------------------
</TABLE>
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $296,000 during fiscal 1997.
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses and income from the mark-to-market of
passive foreign investment companies ("PFICs") and permanent book/tax
differences primarily attributable to a net operating loss, foreign currency
losses and tax adjustments on PFICs sold by the Fund. To reflect
reclassifications arising from permanent book/tax differences for the year ended
March 31, 1997, accumulated undistributed net realized gain was charged
$4,586,743, paid-in-capital was credited $581,060 and net investment loss was
credited $4,005,683.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At March 31, 1997, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31
----------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period.......... $ 18.23 $ 15.71 $ 18.20 $ 14.72 $ 14.65 $ 14.57 $ 14.84 $ 14.98 $ 14.93 $ 17.36
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Net investment
income (loss)... (0.18) (0.06) (0.02) (0.05) -- -- 0.23 0.11 0.08 0.04
Net realized and
unrealized gain
(loss).......... 0.45 2.60 (1.83) 4.24 0.39 1.05 0.18 0.82 1.24 (0.07)
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Total from
investment
operations...... 0.27 2.54 (1.85) 4.19 0.39 1.05 0.41 0.93 1.32 (0.03)
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Less dividends
and
distributions:
From net
investment
income........ -- -- -- -- -- (0.05) (0.23) (0.11) (0.08) (0.15)
In excess of
net investment
income........ -- -- (0.02) -- -- -- -- -- -- --
From net
realized
gain.......... (1.23) (0.02) (0.39) (0.71) (0.32) (0.92) (0.45) (0.96) (1.19) (2.25)
In excess of
net realized
gain.......... -- -- (0.23) -- -- -- -- -- -- --
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Total dividends
and
distributions... (1.23) (0.02) (0.64) (0.71) (0.32) (0.97) (0.68) (1.07) (1.27) (2.40)
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of period... $ 17.27 $ 18.23 $ 15.71 $ 18.20 $ 14.72 $ 14.65 $ 14.57 $ 14.84 $ 14.98 $ 14.93
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT
RETURN+.......... 1.61% 16.20% (10.37)% 28.40% 2.69% 7.33% 2.80% 6.09% 9.31% 0.39%
RATIOS TO AVERAGE
NET ASSETS:
Expenses......... 2.36% 2.45% 2.41% 2.40% 2.42% 2.27% 2.29% 2.21% 2.18% 2.13%
Net investment
income (loss)... (0.84)% (0.21)% (0.32)% (0.61)% 0.06% 0.03% 1.53% 0.70% 0.50% 0.23%
SUPPLEMENTAL DATA:
Net assets, end
of period, in
millions........ $419 $520 $512 $494 $218 $263 $279 $306 $312 $368
Portfolio
turnover rate... 48% 126% 67% 68% 139% 89% 68% 75% 67% 70%
Average
commission rate
paid............ $0.0116 $0.0169 -- -- -- -- -- -- -- --
<FN>
- ---------------------
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER WORLD WIDE INVESTMENT TRUST
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 Dean Witter World Wide Investment
Trust (the "Fund") at March 31, 1997, 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 ten years in the
period then ended, 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 March
31, 1997 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
MAY 16, 1997
1997 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended March 31, 1997, the Fund paid to
shareholders $1.12 per share from long-term capital gains. For
such period, 27.07% of the ordinary dividends qualified for the
dividends received deduction available to corporations.
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Mark Bavoso
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
SUB-ADVISOR
Morgan Grenfell Investment Services Limited
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of the
Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER WORLD WIDE INVESTMENT TRUST
[GRAPHIC]
ANNUAL REPORT
MARCH 31, 1997
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997
DEAR SHAREHOLDER:
During the six-month period ended September 30, 1997, the U.S. equity market, as
measured by the Standard & Poor's 500 Composite Stock Index, continued its
remarkable performance, advancing 26.24 percent. After an initial sell-off in
March, when the Federal Reserve Board increased the federal-funds rate by 25
basis points (0.25 percent), markets rebounded sharply as economic data showed
noninflationary growth in the economy and little rationale for additional
tightening moves.
Continental European economies continued to rebound. The Netherlands, Germany
and France were buoyed by low interest rates, a recovery in exports, weaker
domestic currencies and corporate restructuring initiatives. Positive sentiment
for inclusion into the Economic and Monetary Union lifted equity markets in
Spain and Italy.
The Japanese market continued to disappoint investors. Hopes of a pickup in
Japanese economic recovery were dashed as an increase in the consumption tax and
the reversal of an income tax rebate crimped consumption and aggregate economic
activity. The equity market's performance continued to be skewed toward large
export-oriented industries like autos and technology. These companies generally
benefit from a weak yen and positive global demand trends. Domestic industries
and banks suffered as economic reports revealed sluggishness in the economy.
Emerging markets enjoyed mixed performance over the period under review. Asian
markets were buffeted by a crisis of confidence induced by Thailand's currency
devaluation on July 1. Malaysia, the Philippines and Indonesia all suffered as
investors penalized other countries in the region that had high current-account
deficits. Meanwhile, the Latin American markets of Brazil, Argentina and Mexico
all rallied, discounting a pickup in economic growth, lower inflation and
positive capital flows.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997, CONTINUED
PERFORMANCE AND PORTFOLIO
On July 28, 1997, Dean Witter World Wide Investment Trust began offering four
classes of shares -- A, B, C and D -- each with its own sales charge and
distribution fee structure. A revised prospectus, which includes complete
details regarding the Fund's conversion to multiple classes of shares, was
mailed to shareholders in mid-summer.
During the six-month period under review, the Fund's Class B shares produced a
total return of 11.34 percent, compared to a return of 17.54 percent for the
Morgan Stanley Capital International World Index (MSCI World Index) and 18.06
percent for the Lipper Global Funds Index. The Fund's underperformance relative
to its benchmark index is largely attributable to its smaller U.S. weighting (24
percent in U.S. issues for the Fund, compared to 47.2 percent for the MSCI World
Index).
The Fund is broadly diversified across 34 markets. The Fund's target allocation
is now 31 percent in the United States, 38 percent in Europe, 15 percent in
Japan, 10 percent in emerging Asia and 6 percent in Latin America. During the
period under review, the Fund reduced its exposure to Japan by 5 percent. Among
the Fund's key holdings on September 30, 1997 were Citicorp (U.S., financial),
Telebras (Brazil, telecommunications), AXA-UAP (France, insurance), BMW
(Germany, automotive), Cheung Kong Ltd. (Hong Kong, conglomerate) and Sony Corp.
(Japan, electronics).
LOOKING AHEAD
We believe that global equities continue to offer attractive investment
opportunities. On a cautionary note, however, volatility has increased in many
of the global markets as investors grapple with prospects for higher interest
rates in the United States and Europe and possible spillover from the downdraft
in Asia. Despite these concerns, the Fund still sees a constructive backdrop of
economic growth with low inflation for global equities.
We appreciate your support of Dean Witter World Wide Investment Trust and look
forward to serving your investment needs and objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
RESULTS OF SPECIAL MEETING (UNAUDITED)
On May 21, 1997, a special meeting of the Fund's shareholders was held for the
purpose of voting on five separate matters, the results of which are as follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPITAL INC., IN CONNECTION WITH THE MERGER OF MORGAN STANLEY
GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------------------ ----------------
<S> <C>
For............................................................................................................... 12,826,113
Against........................................................................................................... 312,785
Abstain........................................................................................................... 1,309,350
</TABLE>
(2) APPROVAL OF A NEW SUB-ADVISORY AGREEMENT BETWEEN DEAN WITTER INTERCAPITAL
INC. AND MORGAN GRENFELL INVESTMENT SERVICES LIMITED:
<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------------------ ----------------
<S> <C>
For............................................................................................................... 12,784,753
Against........................................................................................................... 347,323
Abstain........................................................................................................... 1,316,172
</TABLE>
(3) ELECTION OF TRUSTEES:
<TABLE>
<S> <C>
Michael Bozic
For............... 13,548,306
Withheld.......... 899,942
Charles A. Fiumefreddo
For............... 13,545,256
Withheld.......... 902,992
Edwin J. Garn
For............... 13,552,171
Withheld.......... 896,077
John R. Haire
For............... 13,544,511
Withheld.......... 903,737
Wayne E. Hedien
For............... 13,549,467
Withheld.......... 898,781
Dr. Manuel H. Johnson
For............... 13,553,439
Withheld.......... 894,809
Michael E. Nugent
For............... 13,556,810
Withheld.......... 891,438
Philip J. Purcell
For............... 13,560,248
Withheld.......... 888,000
John L. Schroeder
For............... 13,549,885
Withheld.......... 898,363
</TABLE>
(4) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:
<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------------------ ----------------
<S> <C>
For............................................................................................................... 10,205,488
Against........................................................................................................... 2,744,540
Abstain........................................................................................................... 1,498,220
</TABLE>
(5) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:
<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------------------ ----------------
<S> <C>
For............................................................................................................... 13,161,259
Against........................................................................................................... 177,051
Abstain........................................................................................................... 1,109,938
</TABLE>
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, RIGHTS, AND BONDS (97.4%)
ARGENTINA (0.7%)
BANKS - COMMERCIAL
14,900 Banco de Galicia y Buenos Aires S.A. de C.V. (ADR).............................................. $ 438,619
------------
ENERGY
111,000 Perez Companc S.A. (Class B).................................................................... 891,517
19,200 Yacimentos Petroliferos Fiscales S.A. (ADR)..................................................... 708,000
------------
1,599,517
------------
TELECOMMUNICATIONS
22,400 Telecom Argentina Stet - France Telecom S.A. (Class B) (ADR).................................... 681,800
------------
TOTAL ARGENTINA................................................................................. 2,719,936
------------
AUSTRALIA (0.8%)
BANKING
140,000 Westpac Banking Corp., Ltd...................................................................... 883,781
------------
ENERGY
90,000 Woodside Petroleum Ltd.......................................................................... 860,184
------------
FOODS & BEVERAGES
561,000 Goodman Fielder Ltd............................................................................. 907,747
------------
METALS & MINING
262,000 Pasminco Ltd.................................................................................... 437,247
74,857 Pasminco Ltd. (Rights due 11/28/97)*............................................................ 15,752
------------
452,999
------------
TOTAL AUSTRALIA................................................................................. 3,104,711
------------
AUSTRIA (0.1%)
CONSUMER PRODUCTS
2,665 Wolford AG...................................................................................... 241,109
------------
BRAZIL (2.9%)
BUILDING & CONSTRUCTION
103,000 Elevadores Atlas S.A............................................................................ 1,635,368
------------
ENERGY
3,900,000 Petroleo Brasileiro S.A. (Pref.)................................................................ 1,096,121
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INVESTMENT COMPANIES
1,000,000 Brazilian Smaller Co. Investment Trust PLC...................................................... $ 1,299,700
------------
RETAIL
80,000 Makro Atacadista S.A. (GDS)..................................................................... 1,058,400
10,000 Makro Atacadista S.A. (ADR) - 144A**............................................................ 132,300
------------
TELECOMMUNICATIONS
24,705 Telecomunicacoes Brasileiras S.A. (ADR)......................................................... 3,180,769
------------
UTILITIES - ELECTRIC
120,000 Centrais Electricas Brasileiras S.A. (Class B) (ADR)............................................ 3,175,200
------------
TOTAL BRAZIL.................................................................................... 11,577,858
------------
CANADA (0.6%)
BANKING
13,000 Royal Bank of Canada............................................................................ 639,221
------------
INDUSTRIALS
22,000 Canadian Pacific, Ltd........................................................................... 652,400
------------
MANUFACTURING
27,000 Bombardier, Inc. (Class B)...................................................................... 547,469
------------
OIL - EXPLORATION & PRODUCTION
60,000 Poco Petroleums Ltd.*........................................................................... 590,919
------------
TOTAL CANADA.................................................................................... 2,430,009
------------
CHILE (0.6%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
50,000 Compania Cervecerias Unidas S.A. (ADR).......................................................... 1,425,000
------------
UTILITIES - ELECTRIC
21,500 Enersis S.A. (ADR).............................................................................. 796,844
------------
TOTAL CHILE..................................................................................... 2,221,844
------------
COLOMBIA (0.3%)
FINANCIAL SERVICES
3,465 Corporacion Financiera Valle (GDR).............................................................. 10,828
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
RETAIL
31,200 Gran Cadena Almacenes (ADR) (B Shares).......................................................... $ 312,000
89,520 Gran Cadena Almacenes (Class B) (Pref.) (ADR) - 144A**.......................................... 939,960
------------
1,251,960
------------
TOTAL COLOMBIA.................................................................................. 1,262,788
------------
DENMARK (1.5%)
BUSINESS & PUBLIC SERVICES
20,200 Kobenhavns Lufthavne AS......................................................................... 2,363,541
------------
HEALTHCARE
8,010 William Demant Holding.......................................................................... 358,176
------------
PHARMACEUTICALS
29,000 Novo-Nordisk AS (Series B)...................................................................... 3,250,559
------------
TOTAL DENMARK................................................................................... 5,972,276
------------
FINLAND (0.6%)
PAPER PRODUCTS
90,000 UPM-Kymmene Oy.................................................................................. 2,510,913
------------
FRANCE (5.1%)
AUTOMOTIVE
25,300 Compagnie Generale des Etablissements Michelin (B Shares)....................................... 1,440,828
------------
BANKING
33,300 Banque Nationale de Paris....................................................................... 1,682,023
------------
BUILDING MATERIALS
2,000 Imetal S.A...................................................................................... 258,217
------------
CONSUMER PRODUCTS
14,500 Societe BIC S.A................................................................................. 1,075,708
------------
ELECTRICAL EQUIPMENT
12,000 Alcatel Alsthom................................................................................. 1,600,000
------------
ELECTRONICS - SEMICONDUCTORS
13,640 SGS-Thomson Microelectronics N.V.*.............................................................. 1,288,510
------------
ENERGY
11,750 Elf Aquitaine S.A............................................................................... 1,572,624
11,150 Total S.A. (B Shares)........................................................................... 1,279,400
------------
2,852,024
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES
9,600 Cetelem......................................................................................... $ 1,096,679
------------
INSURANCE
41,000 AXA-UAP......................................................................................... 2,757,583
------------
LEISURE
11,300 Accor S.A....................................................................................... 2,092,911
10,960 Canal Plus...................................................................................... 1,952,149
------------
4,045,060
------------
PHARMACEUTICALS
9,680 Genset (ADR)*................................................................................... 203,280
------------
RETAIL
1,770 Grand Optical-Photoservice...................................................................... 323,042
27 Guilbert S.A.................................................................................... 3,741
------------
326,783
------------
STEEL & IRON
80,250 Usinor Sacilor.................................................................................. 1,626,020
------------
TECHNOLOGY RELATED
550 Altran Technologies S.A......................................................................... 149,734
------------
TEXTILES
1,873 Deveaux S.A..................................................................................... 202,889
------------
TOTAL FRANCE.................................................................................... 20,605,338
------------
GERMANY (2.2%)
APPAREL
260 Hugo Boss AG (Pref)............................................................................. 360,066
------------
AUTOMOBILES
2,750 Bayerische Motoren Werke (BMW) AG............................................................... 2,348,246
------------
CHEMICALS
37,746 BASF AG......................................................................................... 1,366,817
23,625 Hoechst AG...................................................................................... 1,051,252
11,000 SGL Carbon AG................................................................................... 1,620,126
------------
4,038,195
------------
INSURANCE
1,452 Marschollek, Lautenschlaeger und Partner AG (Pref.)............................................. 351,071
------------
RETAIL
1,043 CeWe Color Holdings AG.......................................................................... 254,549
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES - ELECTRIC
28,000 Veba AG......................................................................................... $ 1,640,842
------------
TOTAL GERMANY................................................................................... 8,992,969
------------
HONG KONG (5.7%)
BANKING
135,000 Dao Heng Bank Group Ltd......................................................................... 608,918
185,100 Hang Seng Bank Ltd.............................................................................. 2,278,614
96,800 Wing Hang Bank Ltd.............................................................................. 422,855
------------
3,310,387
------------
CONGLOMERATES
530,000 Hutchison Whampoa Ltd........................................................................... 5,222,940
80,000 Jardine Matheson Holdings Ltd................................................................... 648,000
271,000 Wharf (Holdings) Ltd............................................................................ 998,191
------------
6,869,131
------------
ELECTRONIC COMPONENTS
500,000 Elec & Eltek International Holdings Ltd......................................................... 214,863
300,000 Gold Peak Industries (Holdings) Ltd............................................................. 195,800
------------
410,663
------------
MACHINERY
766,000 Chen Hsong Holdings............................................................................. 445,493
------------
MANUFACTURING
97,000 Shanghai Industrial Holdings Ltd................................................................ 602,998
------------
REAL ESTATE
390,000 Cheung Kong (Holdings) Ltd...................................................................... 4,385,137
378,686 HKR International Ltd........................................................................... 447,816
436,000 Hong Kong Land Holdings Ltd..................................................................... 1,482,400
259,000 New World Development Co., Ltd.................................................................. 1,566,552
------------
7,881,905
------------
TELECOMMUNICATIONS
536,400 Hong Kong Telecommunications Ltd................................................................ 1,213,182
------------
TRANSPORTATION
539,000 Cathay Pacific Airways, Ltd..................................................................... 755,819
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES
226,000 China Light & Power Co., Ltd.................................................................... $ 1,244,278
------------
TOTAL HONG KONG................................................................................. 22,733,856
------------
INDIA (0.4%)
AUTOMOBILES
30,500 Mahindra & Mahindra Ltd. (GDR)*................................................................. 344,650
------------
BANKS
21,200 State Bank of India (GDR)....................................................................... 487,600
------------
METALS & MINING
22,000 Hindalco Industries Ltd. (GDR)*................................................................. 742,500
------------
TOTAL INDIA..................................................................................... 1,574,750
------------
INDONESIA (0.2%)
BANKS
500,000 PT Bank Negara.................................................................................. 138,037
------------
CONGLOMERATES
320,000 PT Bimantara Citra.............................................................................. 328,834
------------
MEDICAL PRODUCTS & SUPPLIES
278,000 PT Kalbe Farma*................................................................................. 211,058
------------
TOTAL INDONESIA................................................................................. 677,929
------------
ITALY (1.6%)
APPLIANCES & HOUSEHOLD DURABLES
19,375 Industrie Natuzzi SpA (ADR)..................................................................... 458,945
------------
ELECTRICAL EQUIPMENT
32,945 Gewiss SpA...................................................................................... 638,120
------------
ELECTRONICS
17,047 Saes Getters Di Risp............................................................................ 210,885
12,791 Saes Getters SpA................................................................................ 242,181
------------
453,066
------------
ENERGY
148,000 Ente Nazionale Idrocarburi SpA.................................................................. 934,348
------------
TELECOMMUNICATIONS
260,000 Seat SpA*....................................................................................... 97,549
546,000 Telecom Italia Mobile SpA....................................................................... 2,172,203
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
260,000 Telecom Italia SpA*............................................................................. $ 1,736,555
------------
4,006,307
------------
TOTAL ITALY..................................................................................... 6,490,786
------------
JAPAN (18.2%)
APPAREL
6,000 World Co., Ltd.................................................................................. 235,060
------------
AUTO TRUCKS & PARTS
6,000 Yasunaga Corp.*................................................................................. 59,761
------------
AUTOMOBILES
433,000 Mitsubishi Motors Corp.......................................................................... 2,228,254
150,000 Suzuki Motor Co., Ltd........................................................................... 1,444,223
------------
3,672,477
------------
BANKING
133,000 Bank of Tokyo-Mitsubishi Ltd.................................................................... 2,539,011
161,000 Sumitomo Trust & Banking........................................................................ 1,603,586
------------
4,142,597
------------
BUILDING & CONSTRUCTION
10,000 Kaneshita Construction.......................................................................... 63,081
322,000 Sekisui House Ltd............................................................................... 3,073,539
------------
3,136,620
------------
BUILDING MATERIALS
10,000 Nichiha Corp.................................................................................... 127,822
------------
BUSINESS & PUBLIC SERVICES
3,000 Nichii Gakkan Co................................................................................ 128,486
51,000 Secom Co........................................................................................ 3,449,950
------------
3,578,436
------------
CHEMICALS
600,000 Asahi Chemical Industrial Co., Ltd.............................................................. 3,032,869
323,000 Nippon Shokubai K.K. Co......................................................................... 1,991,941
30,000 Sumitomo Bakelite Co., Ltd...................................................................... 213,147
------------
5,237,957
------------
COMPUTER SOFTWARE
12,000 Ines Corp....................................................................................... 189,243
8,000 Meitec.......................................................................................... 256,972
------------
446,215
------------
CONGLOMERATES
554,000 Mitsui & Co..................................................................................... 4,363,762
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT
96,000 Canon, Inc...................................................................................... $ 2,812,749
40,000 Kyocera Corp.................................................................................... 2,619,522
30,700 Mabuchi Motor Co................................................................................ 1,745,476
150,000 Matsushita Electric Industrial Co., Ltd......................................................... 2,714,143
9,000 Mitsui High-Tec................................................................................. 221,863
7,000 Mitsumi Electric Co., Ltd....................................................................... 148,157
Y 5,000K Nippon Densan Corp. 1.00% 09/30/03 (Conv.)...................................................... 51,336
11,000 Nitto Electric Works............................................................................ 146,082
28,000 Rohm Co., Ltd................................................................................... 3,300,133
------------
13,759,461
------------
ELECTRONIC COMPONENTS
3,000 Nidec Corp...................................................................................... 116,036
------------
ELECTRONICS
10,000 Aiwa Co., Ltd................................................................................... 215,803
46,000 Sony Corp....................................................................................... 4,352,590
------------
4,568,393
------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
20,000 Dainippon Screen Mfg Co., Ltd................................................................... 177,623
4,500 Shinko Electric Industries Co. Ltd.............................................................. 199,079
12,000 Taiyo Yuden Co., Ltd............................................................................ 134,462
10,000 Toshiba Ceramics Co., Ltd....................................................................... 99,602
------------
610,766
------------
ENGINEERING & CONSTRUCTION
119,000 Kajima Corp..................................................................................... 524,477
------------
FINANCIAL SERVICES
405,000 New Japan Securities Co., Ltd.*................................................................. 490,787
66,000 Nomura Securities Co., Ltd...................................................................... 860,060
------------
1,350,847
------------
HAND TOOLS
4,000 Disco Corp.*.................................................................................... 129,482
------------
HEALTH & PERSONAL CARE
8,000 Aderans Co., Ltd................................................................................ 213,811
15,000 Terumo Corp..................................................................................... 278,884
------------
492,695
------------
INSURANCE
312,000 Tokio Marine & Fire Insurance Co................................................................ 3,754,980
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
LEISURE
3,000 H.I.S. Co., Ltd................................................................................. $ 105,329
------------
MACHINE TOOLS
6,600 Nitto Kohki Co., Ltd............................................................................ 123,257
------------
MACHINERY
273,000 Asahi Diamond Industries Co., Ltd............................................................... 1,706,250
5,000 Fuji Machine Manufacturing Co., Ltd............................................................. 181,773
225,000 Minebea Co., Ltd................................................................................ 2,502,490
439,000 Mitsubishi Heavy Industries, Ltd................................................................ 2,408,524
30,000 OSG Corp........................................................................................ 176,046
------------
6,975,083
------------
METALS
11,000 Misumi Corp..................................................................................... 203,602
10,000 Sumitomo Sitix Corp............................................................................. 193,393
9,000 Sumitomo Special Metals......................................................................... 156,873
------------
553,868
------------
OFFICE EQUIPMENT
2,900 Riso Kagaku..................................................................................... 162,475
------------
REAL ESTATE
10,700 Chubu Sekiwa Real Estate, Ltd................................................................... 90,588
400 Japan Industrial Land Development............................................................... 1,892
------------
92,480
------------
RETAIL
4,000 Circle K Japan Co., Ltd......................................................................... 183,267
32,200 Family Mart Co., Ltd............................................................................ 1,411,155
5,300 Ministop Co., Ltd............................................................................... 143,410
3,000 Otsuka Kagu Ltd.*............................................................................... 214,392
8,000 Shimachu Co., Ltd............................................................................... 171,979
5,000 Shimamura Co. Ltd............................................................................... 145,252
------------
2,269,455
------------
STEEL & IRON
1,500,000 NKK Corp........................................................................................ 2,016,932
20,000 Yamato Kogyo Co., Ltd........................................................................... 177,623
------------
2,194,555
------------
TELECOMMUNICATIONS
446 DDI Corp........................................................................................ 2,243,327
363 Nippon Telegraph & Telephone Corp............................................................... 3,344,373
------------
5,587,700
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TEXTILES
192,000 Kuraray Co., Ltd................................................................................ $ 1,689,243
70,000 Nitto Boseki Co., Ltd........................................................................... 203,353
------------
1,892,596
------------
TRANSPORTATION
369,000 Nippon Yusen Kabushiki Kaish.................................................................... 1,240,413
100,000 Yamato Transport Co., Ltd....................................................................... 1,228,420
------------
2,468,833
------------
WHOLESALE DISTRIBUTOR
3,900 Fujimi, Inc..................................................................................... 232,420
------------
TOTAL JAPAN..................................................................................... 72,965,895
------------
MALAYSIA (0.7%)
AGRICULTURE
218,000 IOI Corporated Berhad........................................................................... 220,487
------------
AUTO PARTS
74,000 MBM Resources Berhad............................................................................ 67,086
------------
AUTOMOBILES
50,000 Perusahaan Otomobil Nasional Berhad............................................................. 139,531
60,000 UMW Holdings Berhad............................................................................. 120,259
------------
259,790
------------
BANKING
124,250 Public Finance Berhad........................................................................... 88,121
------------
BUILDING & CONSTRUCTION
43,000 Road Builder (M) Holdings Berhad................................................................ 64,175
73,000 United Engineers Malaysia Berhad................................................................ 234,104
------------
298,279
------------
ENTERTAINMENT
91,000 Berjaya Sports Toto Berhad...................................................................... 260,962
------------
LEISURE
256,000 Magnum Corporation Berhad....................................................................... 224,977
------------
TELECOMMUNICATIONS
75,000 Telekom Malaysia Berhad......................................................................... 227,798
------------
UTILITIES - ELECTRIC
393,000 Tenaga Nasional Berhad.......................................................................... 1,060,361
------------
TOTAL MALAYSIA.................................................................................. 2,707,861
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MEXICO (2.9%)
CONGLOMERATES
210,500 ALFA, S.A. de C.V. (Class A).................................................................... $ 2,000,631
------------
ENGINEERING & CONSTRUCTION
274,240 Corporacion GEO S.A. de C.V. (Series B)*........................................................ 1,705,833
------------
FINANCIAL SERVICES
1,073,000 Grupo Financiero Bancomer S.A. de C.V. (B Shares)*.............................................. 732,376
------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
129,000 Grupo Modelo S.A. de C.V. (Series C)............................................................ 1,221,056
54,500 PanAmerican Beverages, Inc. (Class A)........................................................... 2,128,906
53,000 Sigma Alimentos S.A............................................................................. 866,839
------------
4,216,801
------------
RETAIL
1,060,608 Nacional de Drogas S.A. de C.V. (Series L)...................................................... 1,188,318
------------
TELECOMMUNICATIONS
38,300 Telefonos de Mexico S.A. de C.V. (Series L) (ADR) (Mexico)...................................... 1,982,025
------------
TOTAL MEXICO.................................................................................... 11,825,984
------------
NETHERLANDS (4.7%)
APPLIANCES & HOUSEHOLD DURABLES
1,014 Koninklijke Ahrend Groep NV..................................................................... 34,999
------------
BANKING
54,158 ING Groep NV.................................................................................... 2,494,226
------------
CHEMICALS
11,900 Akzo Nobel...................................................................................... 2,039,298
------------
COMPUTER SOFTWARE
6,342 Baan Co., NV*................................................................................... 458,570
------------
ELECTRICAL EQUIPMENT
30,000 Philips Electronics NV.......................................................................... 2,545,601
------------
ELECTRONIC COMPONENTS
4,692 ASM Lithography Holding NV*..................................................................... 473,077
------------
INSURANCE
23,387 Aegon NV........................................................................................ 1,878,407
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MANUFACTURING
14,887 Aalberts Industries NV.......................................................................... $ 450,076
------------
MEDIA
40,000 PolyGram NV..................................................................................... 2,323,894
60,000 Ver Ned Utigev Ver Bezit NV..................................................................... 1,396,755
10,364 Wolters Kluwer NV............................................................................... 1,401,641
------------
5,122,290
------------
MERCHANDISING
36,517 Koninklijke Ahold NV............................................................................ 989,930
------------
RETAIL
6,975 Gucci Group NV.................................................................................. 323,340
------------
STEEL
28,400 Koninklijke Hoogovens NV........................................................................ 1,844,583
------------
TOTAL NETHERLANDS............................................................................... 18,654,397
------------
NORWAY (0.1%)
MACHINERY
10,615 Tomra Systems AS................................................................................ 245,446
------------
PERU (0.3%)
BANKS - COMMERCIAL
43,900 Banco Wiese Ltd................................................................................. 301,813
------------
FOOD SERVICES
357,687 Consorcio Alimentos Fabril Pacifico*............................................................ 474,662
------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
593,013 Cerveceria Backus & Johnston S.A. (T Shares).................................................... 582,924
------------
TOTAL PERU...................................................................................... 1,359,399
------------
PHILIPPINES (0.0%)
BANKING
129 Metropolitan Bank & Trust Co.................................................................... 1,160
------------
TRANSPORTATION
39,600 International Container Terminal................................................................ 8,221
------------
TOTAL PHILIPPINES............................................................................... 9,381
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PORTUGAL (0.1%)
MEDIA
30,000 Journalgeste*................................................................................... $ 300,836
------------
SINGAPORE (1.3%)
BANKING
188,400 Overseas-Chinese Banking Corp., Ltd............................................................. 1,306,536
------------
CONGLOMERATES
146,000 Parkway Holdings Ltd............................................................................ 592,215
------------
ELECTRICAL EQUIPMENT
90,000 GP Batteries International Ltd.................................................................. 279,097
82,500 Venture Manufacturing Ltd....................................................................... 350,834
------------
629,931
------------
ELECTRONIC COMPONENTS
30,000 Elec & Eltek International Co., Ltd............................................................. 264,000
------------
REAL ESTATE
139,000 City Developments Ltd........................................................................... 900,294
334,000 DBS Land Ltd.................................................................................... 812,875
------------
1,713,169
------------
TRANSPORTATION
79,000 Singapore Airlines Ltd.......................................................................... 584,037
------------
TOTAL SINGAPORE................................................................................. 5,089,888
------------
SOUTH AFRICA (1.0%)
BANKS - COMMERCIAL
81,400 Amalgamated Bank South Africa Group Ltd.*....................................................... 555,437
------------
CONGLOMERATES
51,000 Rembrandt Group Ltd............................................................................. 462,540
------------
FOOD MANUFACTURER
182,600 Illovo Sugar Limited*........................................................................... 333,570
------------
HEALTHCARE
19,788 South African Druggists Ltd..................................................................... 129,283
------------
MACHINERY
42,500 Barlow Ltd...................................................................................... 486,380
------------
METALS & MINING
21,500 De Beers Consolidated Mines Ltd. (Units)++...................................................... 628,412
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OIL & GAS
50,000 Sasol Ltd....................................................................................... $ 690,415
------------
RETAIL
16,740 Ellerine Holdings Ltd........................................................................... 133,114
312,316 New Clicks Holdings Ltd......................................................................... 405,414
------------
538,528
------------
TOTAL SOUTH AFRICA.............................................................................. 3,824,565
------------
SOUTH KOREA (0.3%)
ELECTRICAL EQUIPMENT
4,500 Samsung Electronics Co.......................................................................... 437,022
135 Samsung Electronics Co. (GDS) (Non-voting) - 144A**............................................. 3,256
------------
440,278
------------
STEEL & IRON
7,000 Pohang Iron & Steel Co.......................................................................... 550,102
------------
UTILITIES - ELECTRIC
15,000 Korea Electric Power Corp....................................................................... 333,516
------------
TOTAL SOUTH KOREA............................................................................... 1,323,896
------------
SPAIN (1.7%)
BANKING
50,800 Banco Bilbao Vizcaya S.A........................................................................ 1,569,250
32,000 Banco Popular Espanol S.A....................................................................... 2,065,210
------------
3,634,460
------------
ELECTRIC
52,800 Endesa S.A.*.................................................................................... 1,130,541
------------
MACHINERY - DIVERSIFIED
3,420 Azkoyen S.A..................................................................................... 424,885
------------
TELECOMMUNICATIONS
45,000 Telefonica de Espana S.A........................................................................ 1,418,824
------------
TOTAL SPAIN..................................................................................... 6,608,710
------------
SWEDEN (2.7%)
COMMERCIAL SERVICES
42,700 Securitas AB (Series "B" Free).................................................................. 1,017,472
------------
INSURANCE
58,700 Skandia Forsakrings AB.......................................................................... 2,626,970
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MANUFACTURING
23,610 Assa Abloy AB (Series B)........................................................................ $ 617,133
------------
PAPER PRODUCTS
64,100 Stora Kopparbergs Bergslags Aktiebolag (A Shares)............................................... 1,100,066
------------
PHARMACEUTICALS
80,000 Astra AB (B Shares)............................................................................. 1,415,182
------------
RETAIL
36,800 Hennes & Mauritz AB (B Shares).................................................................. 1,610,455
------------
TELECOMMUNICATIONS
49,500 Ericsson (L.M.) Telephone
Co. AB (Series "B" Free)...................................................................... 2,381,881
------------
TOTAL SWEDEN.................................................................................... 10,769,159
------------
SWITZERLAND (2.6%)
ELECTRICAL EQUIPMENT
1,670 ABB AG - Bearer................................................................................. 2,466,823
------------
FOOD SERVICES
1,430 Selecta Group*.................................................................................. 208,075
------------
FOODS & BEVERAGES
875 Nestle AG....................................................................................... 1,222,502
------------
MACHINERY
80 SIG Schweizerische Industrie - Gesellschaft Holding AG - Bearer................................. 233,363
------------
PHARMACEUTICALS
2,253 Novartis AG..................................................................................... 3,464,720
340 Roche Holdings AG............................................................................... 3,024,619
------------
6,489,339
------------
TOTAL SWITZERLAND............................................................................... 10,620,102
------------
TAIWAN (0.3%)
BUILDING MATERIALS
9,768 Asia Cement Corp. (GDR)......................................................................... 148,962
------------
COMPUTERS - PERIPHERAL EQUIPMENT
13,367 Asustek Computer Inc. (GDR)*.................................................................... 237,264
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
$ 125K United Microelectronics .25% due 05/16/04 (Conv.)............................................... $ 176,875
------------
RETAIL
$ 180K Far Eastern Department Stores 3.00% due 07/06/01 (Conv.) - 144A**............................... 184,050
------------
STEEL
12,235 China Steel Corp................................................................................ 243,110
------------
TRANSPORTATION
$ 300K Yang Ming Marine Transportation 2.00% due 10/06/01 (Conv.) - 144A**............................. 330,750
------------
TOTAL TAIWAN.................................................................................... 1,321,011
------------
THAILAND (0.1%)
BANKING
30,600 Thai Farmers Bank Public Co., Ltd. (Alien Market)............................................... 107,354
------------
MEDIA
30,000 BEC World Public Co., Ltd....................................................................... 195,580
------------
OIL RELATED
18,000 PTT Exploration & Production PCL................................................................ 241,657
------------
TOTAL THAILAND.................................................................................. 544,591
------------
UNITED KINGDOM (12.7%)
AEROSPACE & DEFENSE
43,064 British Aerospace PLC........................................................................... 1,143,045
326,815 Rolls-Royce PLC................................................................................. 1,352,439
58,718 Smiths Industries PLC........................................................................... 868,022
13,632 Vickers PLC..................................................................................... 47,047
------------
3,410,553
------------
APPLIANCES & HOUSEHOLD DURABLES
55,358 MFI Furniture Group PLC......................................................................... 131,545
------------
AUTO PARTS
25,661 Laird Group PLC................................................................................. 192,887
------------
AUTO PARTS - ORIGINAL EQUIPMENT
226,656 BBA Group PLC................................................................................... 1,546,163
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BANKING
116,578 Abbey National PLC.............................................................................. $ 1,799,305
86,107 National Westminster Bank PLC................................................................... 1,303,533
------------
3,102,838
------------
BUILDING & CONSTRUCTION
184,929 Blue Circle Industries PLC...................................................................... 1,201,730
------------
BUILDING MATERIALS
64,418 Scapa Group..................................................................................... 245,230
------------
BUSINESS & PUBLIC SERVICES
54,799 Reuters Holdings PLC............................................................................ 651,082
------------
CHEMICALS
71,611 Allied Colloids Group PLC....................................................................... 145,278
------------
COMPUTER SOFTWARE
50,257 SEMA Group PLC.................................................................................. 1,052,064
------------
CONGLOMERATES
231,912 BTR PLC......................................................................................... 944,712
------------
CONSUMER PRODUCTS
101,761 Vendome Luxury Group PLC (Units)++.............................................................. 737,768
------------
DISTRIBUTION
24,937 Cowie Group PLC................................................................................. 154,390
------------
ELECTRICAL EQUIPMENT
204,502 BICC Group (The) PLC............................................................................ 555,370
207,441 General Electric Co. PLC........................................................................ 1,307,781
------------
1,863,151
------------
ENERGY
331,714 Lasmo PLC....................................................................................... 1,458,507
684,773 Shell Transport & Trading Co. PLC............................................................... 5,019,953
------------
6,478,460
------------
ENTERTAINMENT
66,535 Granada Group PLC............................................................................... 942,172
37,432 London Clubs International PLC.................................................................. 211,176
------------
1,153,348
------------
FINANCIAL SERVICES
7,632 HSBC Holdings PLC............................................................................... 271,565
------------
FOOD PROCESSING
135,028 Associated British Foods PLC.................................................................... 1,183,038
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
65,555 Bass PLC........................................................................................ $ 885,906
41,847 Devro International PLC......................................................................... 262,465
176,000 Guinness PLC.................................................................................... 1,661,503
------------
2,809,874
------------
FOREST PRODUCTS, PAPER & PACKING
30,732 David S. Smith Holdings PLC..................................................................... 118,234
59,965 De La Rue PLC................................................................................... 397,427
------------
515,661
------------
HEALTH & PERSONAL CARE
156,560 Glaxo Wellcome PLC.............................................................................. 3,529,190
95,511 Medeva PLC...................................................................................... 324,226
------------
3,853,416
------------
HEALTHCARE
3,183 Amersham International PLC...................................................................... 107,537
------------
INSURANCE
55,779 General Accident PLC............................................................................ 982,818
153,621 Prudential Corp. PLC............................................................................ 1,714,707
206,461 Royal & Sun Alliance Insurance Group PLC........................................................ 1,951,069
------------
4,648,594
------------
LEISURE
187,868 Rank Group PLC.................................................................................. 1,105,427
------------
MACHINERY
11,072 Spirax-Sarco Engineering PLC.................................................................... 129,402
284,098 Tomkins PLC..................................................................................... 1,584,393
------------
1,713,795
------------
MANUFACTURING
67,982 Bunzl PLC....................................................................................... 290,117
9,100 Vosper Thornycroft Holdings PLC................................................................. 119,446
------------
409,563
------------
MEDIA
6,726 Daily Mail & General Trust (Class A)............................................................ 199,512
15,900 EMAP PLC........................................................................................ 227,723
49,901 Flextech PLC*................................................................................... 485,200
85,100 General Cable PLC*.............................................................................. 156,135
56,086 Mirror Group PLC................................................................................ 181,779
------------
1,250,349
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MERCHANDISING
98,822 Next PLC........................................................................................ $ 1,156,559
------------
NATURAL GAS
156,157 BG PLC.......................................................................................... 679,031
------------
PHARMACEUTICALS
109,040 British Biotech PLC*............................................................................ 280,258
------------
REAL ESTATE
25,369 Bradford Properties Trust PLC................................................................... 122,514
64,301 Pillar Property Investments PLC................................................................. 252,580
------------
375,094
------------
RESTAURANTS
9,600 Compass Group PLC............................................................................... 105,836
------------
RETAIL - DEPARTMENT STORES
28,014 Kingfisher PLC.................................................................................. 382,836
------------
TELECOMMUNICATIONS
317,921 British Telecommunications PLC.................................................................. 2,101,930
348,192 Securicor PLC................................................................................... 1,514,073
207,441 Vodafone Group PLC.............................................................................. 1,113,290
------------
4,729,293
------------
TRANSPORTATION
18,997 Associated British Ports Holdings PLC........................................................... 88,748
94,924 British Airways PLC............................................................................. 1,045,679
16,349 Forth Ports PLC................................................................................. 165,176
14,577 Stagecoach Holdings PLC......................................................................... 161,411
------------
1,461,014
------------
UTILITIES - ELECTRIC
98,822 National Power PLC.............................................................................. 907,356
------------
TOTAL UNITED KINGDOM............................................................................ 50,957,295
------------
UNITED STATES (24.4%)
AEROSPACE & DEFENSE
31,500 General Motors Corp. (Class H).................................................................. 2,088,844
55,400 Watkins-Johnson Co.............................................................................. 1,855,900
------------
3,944,744
------------
AIRLINES
52,000 Continental Airlines, Inc. (Class B)*........................................................... 2,047,500
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
AUTOMOBILES
56,000 Chrysler Corp................................................................................... $ 2,061,500
46,600 Ford Motor Co................................................................................... 2,108,650
------------
4,170,150
------------
BANKING
16,200 Citicorp........................................................................................ 2,169,787
37,600 First Tennessee National Corp................................................................... 2,143,200
30,300 Washington Mutual, Inc.......................................................................... 2,109,637
------------
6,422,624
------------
BEVERAGES - SOFT DRINKS
54,300 PepsiCo, Inc.................................................................................... 2,202,544
------------
BIOTECHNOLOGY
74,800 BioChem Pharma, Inc. (Canada)*.................................................................. 2,356,200
45,000 Centocor, Inc.*................................................................................. 2,137,500
93,000 Chiron Corp.*................................................................................... 2,098,312
135,000 Neurex Corp.*................................................................................... 1,991,250
------------
8,583,262
------------
CHEMICALS
49,700 Monsanto Co..................................................................................... 1,938,300
------------
COMMUNICATIONS - EQUIPMENT & SOFTWARE
29,000 Cisco Systems, Inc.*............................................................................ 2,118,812
------------
COMPUTER SOFTWARE
54,000 Oracle Corp.*................................................................................... 1,967,625
------------
COMPUTERS - PERIPHERAL EQUIPMENT
58,000 Seagate Technology, Inc.*....................................................................... 2,095,250
------------
COMPUTERS - SYSTEMS
63,300 Gateway 2000, Inc.*............................................................................. 1,989,994
39,200 Sun Microsystems, Inc.*......................................................................... 1,832,600
------------
3,822,594
------------
CONGLOMERATES
38,200 Litton Industries, Inc.*........................................................................ 2,077,125
------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
21,900 Intel Corp...................................................................................... 2,023,012
50,000 Micron Technology, Inc.*........................................................................ 1,734,375
------------
3,757,387
------------
ENERGY
31,000 Exxon Corp...................................................................................... 1,985,938
27,700 Mobil Corp...................................................................................... 2,049,800
------------
4,035,738
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT/GAMING
75,000 Mirage Resorts, Inc.*........................................................................... $ 2,259,375
------------
FINANCIAL SERVICES
46,000 Federal National Mortgage Assoc................................................................. 2,162,000
29,800 Travelers Group, Inc............................................................................ 2,033,850
------------
4,195,850
------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
31,400 General Mills, Inc.............................................................................. 2,164,638
------------
HEALTH MAINTENANCE ORGANIZATIONS
85,200 Humana, Inc.*................................................................................... 2,028,825
------------
HEALTHCARE PRODUCTS & SERVICES
39,000 Baxter International, Inc....................................................................... 2,037,750
------------
INDUSTRIALS
31,500 General Electric Co............................................................................. 2,143,969
29,600 Honeywell, Inc.................................................................................. 1,988,750
------------
4,132,719
------------
INSURANCE
20,700 American International Group, Inc............................................................... 2,135,981
56,000 Hartford Life, Inc. (Class A)................................................................... 2,152,500
------------
4,288,481
------------
MEDICAL SERVICES
51,000 HBO & Co........................................................................................ 1,918,875
------------
PAPER & FOREST PRODUCTS
36,400 Champion International Corp..................................................................... 2,218,125
------------
PAPER PRODUCTS
40,800 Bowater Inc..................................................................................... 2,080,800
------------
PHARMACEUTICALS
27,500 American Home Products Corp..................................................................... 2,007,500
36,200 Johnson & Johnson............................................................................... 2,086,025
------------
4,093,525
------------
RETAIL - DEPARTMENT STORES
143,000 Kmart Corp.*.................................................................................... 2,002,000
------------
RETAIL - SPECIALTY
65,500 Bed Bath & Beyond, Inc.*........................................................................ 2,292,500
40,800 Home Depot, Inc................................................................................. 2,126,700
------------
4,419,200
------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
RETAIL - SPECIALTY APPAREL
82,600 Limited (THE), Inc.............................................................................. $ 2,018,538
------------
SAVINGS & LOAN ASSOCIATIONS
24,000 Golden West Financial Corp...................................................................... 2,154,000
------------
STEEL
34,300 Nucor Corp...................................................................................... 1,807,181
------------
TELECOMMUNICATIONS
52,000 Globalstar
Telecommunications Ltd.*...................................................................... 2,704,000
------------
TOBACCO
49,000 Philip Morris Companies, Inc.................................................................... 2,036,563
------------
TOTAL UNITED STATES............................................................................. 97,744,100
------------
VENEZUELA (0.1%)
TELECOMMUNICATIONS
13,000 Compania Anonima Nacional Telefonos de Venezuela (Class D) (ADR)................................ 594,750
------------
TOTAL COMMON AND PREFERRED STOCKS, RIGHTS, AND BONDS
(IDENTIFIED COST $344,551,606).................................................................. 390,584,338
------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS
- -------------
<C> <S> <C>
PURCHASED PUT OPTIONS ON FOREIGN CURRENCY (0.3%)
Y2,339,564 February 10, 1998/Yen 115.82.................................................................... 805,980
Y2,896,800 February 10, 1998/Yen 120.72.................................................................... 482,400
------------
TOTAL PURCHASED PUT OPTIONS ON FOREIGN CURRENCY
(IDENTIFIED COST $1,023,940).................................................................... 1,288,380
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
IN THOUSANDS
- ------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (2.2%)
U.S. GOVERNMENT AGENCY
$ 9,000 Federal Home Loan Mortgage Corp. 6.05% due 10/01/97 (AMORTIZED COST
$9,000,000)................................................................. $ 9,000,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $354,575,546)............................................................ 99.9 % 400,872,718
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 0.1 293,098
------ -------------
NET ASSETS................................................................................ 100.0 % $ 401,165,816
------ -------------
------ -------------
</TABLE>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
GDS Global Depository Shares.
K In thousands.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
stocks with attached warrants.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $74,796,965 and the
aggregate gross unrealized depreciation is $28,499,793, resulting in net
unrealized appreciation of $46,297,172.
FORWARD FOREIGN CURRENCY CONTRACT OPEN AT SEPTEMBER 30, 1997:
<TABLE>
<CAPTION>
CONTRACTS
TO IN DELIVERY UNREALIZED
DELIVER EXCHANGE FOR DATE APPRECIATION
- ---------------------------------------------------
<S> <C> <C> <C>
$665,436 FRF 3,945,168 10/01/97 1,$259
---------
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
SUMMARY OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Aerospace & Defense............................................................... $ 7,355,296 1.8%
Agriculture....................................................................... 220,487 0.1
Airlines.......................................................................... 2,047,500 0.5
Apparel........................................................................... 595,126 0.1
Appliances & Household Durables................................................... 625,489 0.2
Auto Parts........................................................................ 259,973 0.1
Auto Parts - Original Equipment................................................... 1,546,163 0.4
Auto Trucks & Parts............................................................... 59,761 0.0
Automobiles....................................................................... 10,795,313 2.7
Automotive........................................................................ 1,440,828 0.4
Banking........................................................................... 27,815,326 6.9
Banks............................................................................. 625,637 0.2
Banks - Commercial................................................................ 1,295,869 0.3
Beverages - Soft Drinks........................................................... 2,202,544 0.5
Biotechnology..................................................................... 8,583,263 2.1
Building & Construction........................................................... 6,271,997 1.6
Building Materials................................................................ 780,231 0.2
Business & Public Services........................................................ 6,593,060 1.6
Chemicals......................................................................... 13,399,026 3.3
Commercial Services............................................................... 1,017,472 0.3
Communications - Equipment & Software............................................. 2,118,813 0.5
Computer Software................................................................. 3,924,473 1.0
Computers - Peripheral Equipment.................................................. 2,332,514 0.6
Computers - Systems............................................................... 3,822,594 1.0
Conglomerates..................................................................... 17,638,950 4.4
Consumer Products................................................................. 2,054,585 0.5
Currency Options.................................................................. 1,288,380 0.3
Distribution...................................................................... 154,390 0.0
Electric.......................................................................... 1,130,541 0.3
Electrical Equipment.............................................................. 23,943,367 5.9
Electronic Components............................................................. 1,263,776 0.3
Electronics....................................................................... 5,021,458 1.3
Electronics - Semiconductors...................................................... 1,288,510 0.3
Electronics - Semiconductors/Components........................................... 4,545,028 1.1
Energy............................................................................ 17,856,391 4.5
Engineering & Construction........................................................ 2,230,310 0.6
Entertainment..................................................................... 1,414,309 0.4
Entertainment/Gaming.............................................................. 2,259,375 0.6
Financial Services................................................................ 7,658,145 1.9
Food Manufacturer................................................................. 333,570 0.1
Food Processing................................................................... 1,183,038 0.3
Food Services..................................................................... 682,737 0.2
Food, Beverage, Tobacco & Household Products...................................... 11,199,237 2.8
Foods & Beverages................................................................. 2,130,249 0.5
Forest Products, Paper & Packing.................................................. 515,661 0.1
Hand Tools........................................................................ 129,482 0.0
Health & Personal Care............................................................ 4,346,112 1.1
Health Maintenance Organizations.................................................. 2,028,825 0.5
Healthcare........................................................................ 594,996 0.1
Healthcare Products & Services.................................................... 2,037,750 0.5
Industrials....................................................................... 4,785,119 1.2
Insurance......................................................................... 20,306,087 5.1
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
SUMMARY OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Companies.............................................................. $ 1,299,700 0.3%
Leisure........................................................................... 5,480,792 1.4
Machine Tools..................................................................... 123,257 0.0
Machinery......................................................................... 10,099,560 2.5
Machinery - Diversified........................................................... 424,885 0.1
Manufacturing..................................................................... 2,627,239 0.7
Media............................................................................. 6,869,055 1.7
Medical Products & Supplies....................................................... 211,058 0.1
Medical Services.................................................................. 1,918,875 0.5
Merchandising..................................................................... 2,146,489 0.5
Metals............................................................................ 553,868 0.1
Metals & Mining................................................................... 1,823,910 0.5
Natural Gas....................................................................... 679,031 0.2
Office Equipment.................................................................. 162,475 0.0
Oil & Gas......................................................................... 690,415 0.2
Oil - Exploration & Production.................................................... 590,919 0.1
Oil Related....................................................................... 241,657 0.1
Paper & Forest Products........................................................... 2,218,125 0.6
Paper Products.................................................................... 5,691,779 1.4
Pharmaceuticals................................................................... 15,732,143 3.9
Real Estate....................................................................... 10,062,651 2.5
Restaurants....................................................................... 105,836 0.0
Retail............................................................................ 9,138,139 2.3
Retail - Department Stores........................................................ 2,384,836 0.6
Retail - Specialty................................................................ 4,419,200 1.1
Retail - Specialty Apparel........................................................ 2,018,538 0.5
Savings & Loan Associations....................................................... 2,154,000 0.5
Steel............................................................................. 3,894,874 1.0
Steel & Iron...................................................................... 4,370,677 1.1
Technology Related................................................................ 149,734 0.0
Telecommunications................................................................ 28,708,329 7.1
Textiles.......................................................................... 2,095,485 0.5
Tobacco........................................................................... 2,036,563 0.5
Transportation.................................................................... 5,608,674 1.4
U.S. Government Agency............................................................ 9,000,000 2.2
Utilities......................................................................... 1,244,278 0.3
Utilities - Electric.............................................................. 7,914,119 2.0
Wholesale Distributor............................................................. 232,420 0.1
------------ ---
$400,872,718 99.9%
------------ ---
------------ ---
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Common Stocks..................................................................... $387,078,357 96.5%
Convertible Bonds................................................................. 743,011 0.2
Preferred Stocks.................................................................. 2,747,218 0.7
Purchased Options Outstanding..................................................... 1,288,380 0.3
Rights............................................................................ 15,752 0.0
Short-Term Investment............................................................. 9,000,000 2.2
------------ ---
$400,872,718 99.9%
------------ ---
------------ ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $354,575,546).............................................................. $400,872,718
Receivable for:
Investments sold.......................................................................... 1,124,587
Dividends................................................................................. 864,756
Shares of beneficial interest sold........................................................ 283,909
Foreign withholding taxes reclaimed....................................................... 282,759
Prepaid expenses and other assets............................................................. 95,445
------------
TOTAL ASSETS............................................................................. 403,524,174
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased................................................. 772,424
Investments purchased..................................................................... 645,238
Investment management fee................................................................. 349,697
Plan of distribution fee.................................................................. 318,842
Accrued expenses and other payables........................................................... 272,157
------------
TOTAL LIABILITIES........................................................................ 2,358,358
------------
NET ASSETS............................................................................... $401,165,816
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $317,636,051
Net unrealized appreciation................................................................... 46,259,573
Accumulated net investment loss............................................................... (1,236,229)
Accumulated undistributed net realized gain................................................... 38,506,421
------------
NET ASSETS............................................................................... $401,165,816
------------
------------
CLASS A SHARES:
Net Assets.................................................................................... $1,252,183
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 64,972
NET ASSET VALUE PER SHARE................................................................ $19.27
------------
------------
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value).......................................... $20.34
------------
------------
CLASS B SHARES:
Net Assets.................................................................................... $365,676,148
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 19,000,353
NET ASSET VALUE PER SHARE................................................................ $19.25
------------
------------
CLASS C SHARES:
Net Assets.................................................................................... $51,126
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 2,655
NET ASSET VALUE PER SHARE................................................................ $19.26
------------
------------
CLASS D SHARES:
Net Assets.................................................................................... $34,186,359
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 1,772,681
NET ASSET VALUE PER SHARE................................................................ $19.29
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997* (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $528,150 foreign withholding tax)............................................ $ 4,602,275
Interest....................................................................................... 125,823
-----------
TOTAL INCOME.............................................................................. 4,728,098
-----------
EXPENSES
Investment management fee...................................................................... 2,111,518
Plan of distribution fee (Class B shares)...................................................... 2,046,569
Transfer agent fees and expenses............................................................... 380,200
Custodian fees................................................................................. 215,392
Shareholder reports and notices................................................................ 59,624
Professional fees.............................................................................. 54,427
Registration fees.............................................................................. 28,475
Trustees' fees and expenses.................................................................... 9,866
Other.......................................................................................... 14,285
-----------
TOTAL EXPENSES............................................................................ 4,920,356
-----------
NET INVESTMENT LOSS....................................................................... (192,258)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments................................................................................ 31,173,096
Foreign exchange transactions.............................................................. 942,273
-----------
NET GAIN.................................................................................. 32,115,369
-----------
Net change in unrealized appreciation/depreciation on:
Investments................................................................................ 13,946,719
Translation of forward foreign currency contracts, other assets and liabilities denominated
in foreign currencies.................................................................... (113,748)
-----------
NET APPRECIATION.......................................................................... 13,832,971
-----------
NET GAIN.................................................................................. 45,948,340
-----------
NET INCREASE................................................................................... $45,756,082
-----------
-----------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1997 MARCH 31, 1997
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss..................................................... $ (192,258 ) $ (4,146,643)
Net realized gain....................................................... 32,115,369 20,966,100
Net change in unrealized Depreciation................................... 13,832,971 (8,721,872)
------------------ --------------
NET INCREASE....................................................... 45,756,082 8,097,585
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class B shares.......................................................... -- (31,533,387)
Net decrease from transactions in shares of beneficial interest......... (63,548,440 ) (77,594,246)
------------------ --------------
NET DECREASE....................................................... (17,792,358 ) (101,030,048)
NET ASSETS:
Beginning of period..................................................... 418,958,174 519,988,222
END OF PERIOD
(Including net investment losses of $1,236,229 and $1,043,971,
respectively)................................................... $ 401,165,816 $ 418,958,174
------------------ --------------
------------------ --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter World Wide Investment Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is total
return on its assets primarily through long-term capital growth and to a lesser
extent, from income. The Fund seeks to achieve its objective by investing in
common stocks and equivalents, preferred stocks, bonds and other debt
obligations of domestic and foreign companies, governments and international
organizations. The Fund was organized as a Massachusetts business trust on July
7, 1983 and commenced operations on October 31, 1983. On July 28, 1997, the Fund
commenced offering three additional classes of shares, with the then current
shares, other than shares held by certain employee benefit plans established by
Dean Witter Reynolds Inc. and its affiliate, SPS Transaction Services, Inc.,
designated as Class B shares. Shares held by those benefit plans prior to July
28, 1997 have been designated Class D shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange; the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") or Morgan
Grenfell Investment Services Limited (the "Sub-Adviser") that sale and bid
prices are not reflective of a security's market value, portfolio
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
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); and (4) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Discounts are accreted over the
life of the respective securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. OPTION ACCOUNTING PRINCIPLES -- When the Fund purchases a call or put option,
the premium paid is recorded as an investment which is subsequently
marked-to-market to reflect the current market value. If a purchased option
expires, the Fund will realize a loss to the extent of the premium paid. If the
Fund enters into a closing sale transaction, a gain or loss is realized for the
difference between the proceeds from the sale and the cost of the option. If a
put option is exercised, the cost of the security or currency sold upon exercise
will be increased by the premium originally paid. If a call option is exercised,
the cost of the security purchased upon exercise will be increased by the
premium originally paid.
E. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
transactions. Pursuant to U.S. Federal income tax regulations, certain foreign
exchange gains/losses included in realized and unrealized gain/loss are included
in or are a reduction of ordinary income for federal income tax purposes. The
Fund does not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the changes in the market
prices of the securities.
F. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
G. 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.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 1.0% to the portion of daily net assets not exceeding $500
million and 0.95% to the portion of daily net assets in excess of $500 million.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment 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 as the Fund may reasonably
require in the conduct of its business and also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.
Under a Sub-Advisory Agreement between the Sub-Adviser and the Investment
Manager, the Sub-Adviser provides the Fund with investment advice and portfolio
management relating to the Fund's non-U.S. investments, subject to the overall
supervision of the Investment Manager. As compensation for its services provided
pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Adviser monthly compensation equal to 40% of its monthly compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- 0.25% of the average
daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a) the
average daily aggregate gross sales of the Class B shares since inception of the
Fund (not including reinvestment of dividend or capital gain distributions) less
the average net asset value of the Class B shares redeemed since the Fund's
inception upon which a contingent deferred sales charge has been imposed or
waived; or (b) the average daily net assets of Class B; and (iii) Class C --
1.0% of the average daily net assets of Class C. In the case of Class A shares,
amounts paid under the Plan are paid to the Distributor for services provided.
In the case of Class B and Class C shares, amounts paid under the Plan are paid
to the Distributor for services provided and the expenses borne by it and others
in the distribution of the shares of these Classes, including the payment of
commissions for sales of these Classes and incentive compensation to, and
expenses of, the account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Investment Manager and Distributor, and others who engage in or
support distribution of the shares or who service shareholder accounts,
including overhead and telephone expenses, printing and distribution of
prospectuses and reports used in connection with the offering of these shares to
other than current shareholders, and preparation, printing and distribution of
sales literature and advertising materials. In addition, the Distributor may
utilize fees paid pursuant to the Plan, in the case of Class B shares, to
compensate DWR and other selected broker-dealers for their opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $19,336,730 at September 30, 1997.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to account executives may be reimbursed in the subsequent
calendar year. For the period ended September 30, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the six months ended September
30, 1997, it received contingent deferred sales charges from certain redemptions
of the Fund's Class B shares of $339,908. The respective shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended September 30, 1997 aggregated
$144,068,764 and $202,395,175, respectively.
For the six months ended September 30, 1997, the Fund incurred brokerage
commissions of $11,225 and $4,956 with DWR and Deutsche Morgan Grenfell,
respectively, for portfolio transactions executed on behalf of the Fund.
For the period May 31, 1997 through September 30, 1997, the Fund incurred
brokerage commissions with Morgan Stanley & Co. Inc., an affiliate of the
Investments Manager since May 31, 1997, of $15,289 for portfolio transactions
executed on behalf of the Fund.
Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended September 30, 1997
included in Trustees' fees and expenses in the Statement of Operations amounted
to $1,744. At September 30, 1997, the Fund had an accrued pension liability of
$50,993 which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1997+ MARCH 31, 1997
------------------------- -------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold............................................ 66,385 $ 1,223,456 -- --
Redeemed........................................ (1,413) (26,854) -- --
---------- ------------- ---------- -------------
Net increase - Class A.......................... 64,972 1,196,602 -- --
---------- ------------- ---------- -------------
CLASS B SHARES
Sold............................................ 3,145,398 58,569,037 3,614,740 $ 65,929,566
Reinvestment of distributions................... -- -- 1,730,254 29,812,283
Redeemed........................................ (6,372,472) (118,527,176) (9,610,570) (173,336,095)
---------- ------------- ---------- -------------
Net decrease - Class B.......................... (3,227,074) (59,958,139) (4,265,576) (77,594,246)
---------- ------------- ---------- -------------
CLASS C SHARES*
Sold............................................ 2,663 51,380 -- --
Redeemed........................................ (8) (144) -- --
---------- ------------- ---------- -------------
Net increase - Class C.......................... 2,655 51,236 -- --
---------- ------------- ---------- -------------
CLASS D SHARES*
Sold............................................ 94,840 1,826,735 -- --
Redeemed........................................ (355,630) (6,664,874) -- --
---------- ------------- ---------- -------------
Net decrease - Class D.......................... (260,790) (4,838,139) -- --
---------- ------------- ---------- -------------
Net decrease in Fund.............................. (3,420,237) $ (63,548,440) (4,265,576) $ (77,594,246)
---------- ------------- ---------- -------------
---------- ------------- ---------- -------------
</TABLE>
- ------------------------------
+ On July 28, 1997, 2,033,471 shares representing $40,059,381 were transferred
to Class D.
* For the period July 28, 1997 (issue date) through September 30, 1997.
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $296,000 during fiscal year 1997.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) CONTINUED
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses and income from the mark-to-market of
passive foreign investment companies.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At September 30, 1997, there were outstanding forward contracts used to
facilitate settlement of foreign currency denominated portfolio transactions.
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE
SIX
MONTHS
ENDED
SEPTEMBER
30, FOR THE YEAR ENDED MARCH 31
1997*++ ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 17.27 $18.23 $15.71 $18.20 $14.72 $14.65
-------- ------ ------ ------ ------ ------
Net investment loss..................... (0.01) (0.18) (0.06) (0.02) (0.05) --
Net realized and unrealized gain
(loss)................................. 1.99 0.45 2.60 (1.83) 4.24 0.39
-------- ------ ------ ------ ------ ------
Total from investment operations........ 1.98 0.27 2.54 (1.85) 4.19 0.39
-------- ------ ------ ------ ------ ------
Less dividends and distributions:
In excess of net investment income... -- -- -- (0.02) -- --
From net realized gain............... -- (1.23) (0.02) (0.39) (0.71) (0.32)
In excess of net realized gain....... -- -- -- (0.23) -- --
-------- ------ ------ ------ ------ ------
Total dividends and distributions....... -- (1.23) (0.02) (0.64) (0.71) (0.32)
-------- ------ ------ ------ ------ ------
Net asset value, end of period.......... $ 19.25 $17.27 $18.23 $15.71 $18.20 $14.72
-------- ------ ------ ------ ------ ------
-------- ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN+................ 11.34%(1) 1.61% 16.20% (10.37)% 28.40% 2.69%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 2.61%(2) 2.36% 2.45% 2.41% 2.40% 2.42%
Net investment income (loss)............ (0.12)%(2) (0.84)% (0.21)% (0.32)% (0.61)% 0.06%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions............................... $366 $419 $520 $512 $494 $218
Portfolio turnover rate................. 35%(1) 48% 126% 67% 68% 139%
Average commission rate paid............ $0.0094 $0.0116 $0.0169 -- -- --
</TABLE>
- ---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date, other than shares held by certain
employee benefit plans established by Dean Witter Reynolds Inc. and its
affiliate, SPS Transaction Services, Inc., have been designated Class B
shares. Shares held by those employee benefit plans prior to July 28, 1997
have been designated Class D shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 31, 1997
THROUGH
SEPTEMBER 30,
1997*++
(UNAUDITED)
- --------------------------------------------------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 19.70
------
Net investment income................................................. 0.05
Net realized and unrealized loss...................................... (0.48)
------
Total from investment operations...................................... (0.43)
------
Net asset value, end of period........................................ $ 19.27
------
------
TOTAL INVESTMENT RETURN+.............................................. (2.18)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.27%(2)
Net investment income................................................. 1.71%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $1,252
Portfolio turnover rate............................................... 35%(1)
Average commission rate paid.......................................... $0.0094
</TABLE>
<TABLE>
<S> <C>
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 19.70
------
Net investment income................................................. 0.01
Net realized and unrealized loss...................................... (0.45)
------
Total from investment operations...................................... (0.44)
------
Net asset value, end of period........................................ $ 19.26
------
------
TOTAL INVESTMENT RETURN+.............................................. (2.28)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.75%(2)
Net investment income................................................. 0.23%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $51
Portfolio turnover rate............................................... 35%(1)
Average commission rate paid.......................................... $0.0094
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 31, 1997*
THROUGH
SEPTEMBER 30, 1997++
(UNAUDITED)
- --------------------------------------------------------------------------------------------
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 19.70
------
Net investment income................................................. 0.02
Net realized and unrealized loss...................................... (0.43)
------
Total from investment operations...................................... (0.41)
------
Net asset value, end of period........................................ $ 19.29
------
------
TOTAL INVESTMENT RETURN+.............................................. (2.13)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.67%(2)
Net investment income................................................. 0.75%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $34,186
Portfolio turnover rate............................................... 35%(1)
Average commission rate paid.......................................... $0.0094
</TABLE>
- ---------------------
* The date shares were first issued. Shareholders who held shares of the Fund
prior to July 28, 1997 (the date the Fund converted to a multiple class
share structure) should refer to the Financial Highlights of Class B to
obtain the historical per share data and ratio information of their shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Mark A. Bavoso
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
SUB-ADVISER
Morgan Grenfell Investment Services Limited>
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
WORLD WIDE
INVESTMENT TRUST
[PHOTO]
SEMIANNUAL REPORT
SEPTEMBER 30, 1997
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PART B
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information relates to the shares of Dean
Witter Global Dividend Growth Securities ("Dean Witter Global Dividend") to be
issued pursuant to an Agreement and Plan of Reorganization, dated January 29,
1998, between Dean Witter Global Dividend and Dean Witter World Wide Investment
Trust ("Dean Witter World Wide") in connection with the acquisition by Dean
Witter Global Dividend of substantially all of the assets, subject to stated
liabilities, of Dean Witter World Wide. This Statement of Additional Information
does not constitute a prospectus. This Statement of Additional Information does
not include all information that a shareholder should consider before voting on
the proposals contained in the Proxy Statement and Prospectus, and, therefore,
should be read in conjunction with the related Proxy Statement and Prospectus,
dated February , 1998. A copy of the Proxy Statement and Prospectus may be
obtained without charge by mailing a written request to Dean Witter Global
Dividend at Two World Trade Center, New York, New York 10048 or by calling (212)
392-2550 or (800) 526-3143 (TOLL FREE). Please retain this document for future
reference.
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS FEBRUARY , 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
INTRODUCTION.................................................................................................... B-3
ADDITIONAL INFORMATION ABOUT DEAN WITTER GLOBAL DIVIDEND........................................................ B-3
FINANCIAL STATEMENTS............................................................................................ B-4
</TABLE>
B-2
<PAGE>
INTRODUCTION
This Statement of Additional Information is intended to supplement the
information provided in the Proxy Statement and Prospectus dated February ,
1998 (the "Proxy Statement and Prospectus"). The Proxy Statement and Prospectus
has been sent to Dean Witter World Wide shareholders in connection with the
solicitation of proxies by the Board of Trustees of Dean Witter World Wide to be
voted at the Special Meeting of shareholders of Dean Witter World Wide to be
held on May 21, 1998. This Statement of Additional Information incorporates by
reference the Statement of Additional Information of Dean Witter Global Dividend
dated July 28, 1997 and the Statement of Additional Information of Dean Witter
World Wide dated July 28, 1997.
ADDITIONAL INFORMATION ABOUT DEAN WITTER GLOBAL DIVIDEND
INVESTMENT OBJECTIVES AND POLICIES
For additional information about Dean Witter Global Dividend's investment
objectives and policies, see "Investment Practices and Policies" and "Investment
Restrictions" in Dean Witter Global Dividend's Statement of Additional
Information.
MANAGEMENT
For additional information about the Board of Trustees, officers and
management personnel of Dean Witter Global Dividend, see "The Fund and its
Management" and "Trustees and Officers" in Dean Witter Global Dividend's
Statement of Additional Information.
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information about Dean Witter Global Dividend's investment
manager, see "The Fund and its Management" in Dean Witter Global Dividend's
Statement of Additional Information. For additional information about Dean
Witter Global Dividend's independent auditors, see "Independent Accountants" in
Dean Witter Global Dividend's Statement of Additional Information. For
additional information about other services provided to Dean Witter Global
Dividend, see "Custodian and Transfer Agent" and "Shareholder Services" in Dean
Witter Global Dividend's Statement of Additional Information.
PORTFOLIO TRANSACTIONS AND BROKERAGE
For additional information about brokerage allocation practices, see
"Portfolio Transactions and Brokerage" in Dean Witter Global Dividend's
Statement of Additional Information.
DESCRIPTION OF FUND SHARES
For additional information about the voting rights and other characteristics
of the shares of Dean Witter Global Dividend, see "Description of Shares of the
Fund" in Dean Witter Global Dividend's Statement of Additional Information.
PURCHASE, REDEMPTION AND PRICING OF SHARES
For additional information about the purchase and redemption of Dean Witter
Global Dividend's shares and the determination of net asset value, see "Purchase
of Fund Shares," "Redemptions and Repurchases," "Financial Statements -- March
31, 1997" and "Shareholder Services" in Dean Witter Global Dividend's Statement
of Additional Information.
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
For additional information about Dean Witter Global Dividend's policies
regarding dividends and distributions and tax matters affecting Dean Witter
Global Dividend and its shareholders, see "Dividends, Distributions and Taxes,"
and "Financial Statements -- March 31, 1997" in Dean Witter Global Dividend's
Statement of Additional Information.
DISTRIBUTION OF SHARES
For additional information about Dean Witter Global Dividend's distributor
and the distribution agreement between Dean Witter Global Dividend and its
distributor, see "Purchase of Fund Shares" in Dean Witter Global Dividend's
Statement of Additional Information.
B-3
<PAGE>
PERFORMANCE DATA
For additional information about Dean Witter Global Dividend's performance,
see "Performance Information" in Dean Witter Global Dividend's Statement of
Additional Information.
FINANCIAL STATEMENTS
Dean Witter Global Dividend's most recent audited financial statements are
set forth in Dean Witter Global Dividend's Annual Report for the fiscal year
ended March 31, 1997 and Dean Witter Global Dividend's updated, unaudited
financial statements are set forth in its unaudited Semi-Annual Report for the
six month period ended September 30, 1997. Copies of both Reports accompany, and
are incorporated by reference in, the Proxy Statement and Prospectus. Dean
Witter World Wide's most recent audited financial statements are set forth in
Dean Witter World Wide's Annual Report for the fiscal year ended March 31, 1997
and its unaudited Semi-Annual Report for the six month period ended September
30, 1997, which is incorporated by reference in the Proxy Statement and
Prospectus.
B-4
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
JULY 28, 1997
DEAN WITTER
GLOBAL DIVIDEND
GROWTH SECURITIES
- ------------------------------------------------------------
Dean Witter Global Dividend Growth Securities (the "Fund") is an open-end,
diversified management investment company, whose investment objective is to
provide reasonable current income and long-term growth of income and capital.
The Fund invests primarily in common stock of issuers worldwide, with a record
of paying dividends and the potential for increasing dividends. (See "Investment
Practices and Policies.")
A Prospectus for the Fund dated July 28, 1997, 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,
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.
Dean Witter
Global Dividend Growth Securities
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.................................................................. 7
Investment Practices and Policies...................................................... 13
Investment Restrictions................................................................ 29
Portfolio Transactions and Brokerage................................................... 30
The Distributor........................................................................ 32
Determination of Net Asset Value....................................................... 36
Purchase of Fund Shares................................................................ 36
Shareholder Services................................................................... 39
Redemptions and Repurchases............................................................ 44
Dividends, Distributions and Taxes..................................................... 45
Performance Information................................................................ 46
Description of Shares.................................................................. 47
Custodian and Transfer Agent........................................................... 48
Independent Accountants................................................................ 49
Reports to Shareholders................................................................ 49
Legal Counsel.......................................................................... 49
Experts................................................................................ 49
Registration Statement................................................................. 49
Financial Statements--March 31, 1997................................................... 50
Report of Independent Accountants...................................................... 66
</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
January 12, 1993.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. (the "Investment Manager" or "InterCapital"),
a Delaware corporation, whose address is Two World Trade Center, New York, New
York 10048, is the Fund's Investment Manager. InterCapital is a wholly-owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD"), 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 InterCapital. (As
hereinafter used in this Statement of Additional Information, the terms
"InterCapital" and "Investment Manager" refer to DWR's InterCapital Division
prior to the Internal reorganization and to Dean Witter InterCapital Inc.
thereafter.) The daily management of the Fund and research relating to the
Fund's portfolio are conducted by or under the direction of officers of the Fund
and of the Investment Manager, subject to review by the Fund's Board of
Trustees. Information as to these Trustees and Officers is contained under the
caption "Trustees and Officers."
The Investment Manager is the investment manager or investment adviser of
the following investment companies:
OPEN-END FUNDS
1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Dean Witter American Value Fund
6. Dean Witter Balanced Growth Fund
7. Dean Witter Balanced Income Fund
8. Dean Witter California Tax-Free Daily Income Trust
9. Dean Witter California Tax-Free Income Fund
10. Dean Witter Capital Appreciation Fund
11. Dean Witter Capital Growth Securities
12. Dean Witter Convertible Securities Trust
13. Dean Witter Developing Growth Securities Trust
14. Dean Witter Diversified Income Trust
15. Dean Witter Dividend Growth Securities Inc.
16. Dean Witter European Growth Fund Inc.
17. Dean Witter Federal Securities Trust
18. Dean Witter Financial Services Trust
19. Dean Witter Global Asset Allocation Fund
20. Dean Witter Global Dividend Growth Securities
21. Dean Witter Global Short-Term Income Fund Inc.
22. Dean Witter Global Utilities Fund
23. Dean Witter Hawaii Municipal Trust
24. Dean Witter Health Sciences Trust
25. Dean Witter High Income Securities
26. Dean Witter High Yield Securities Inc.
27. Dean Witter Income Builder Fund
28. Dean Witter Information Fund
29. Dean Witter Intermediate Income Securities
30. Dean Witter Intermediate Term U.S. Treasury Trust
31. Dean Witter International Small Cap Fund
32. Dean Witter Japan Fund
33. Dean Witter Limited Term Municipal Trust
34. Dean Witter Liquid Asset Fund Inc.
35. Dean Witter Market Leader Trust
36. Dean Witter Mid-Cap Growth Fund
37. Dean Witter Multi-State Municipal Series Trust
38. Dean Witter National Municipal Trust
39. Dean Witter Natural Resource Development Securities Inc.
40. Dean Witter New York Municipal Money Market Trust
41. Dean Witter New York Tax-Free Income Fund
42. Dean Witter Pacific Growth Fund Inc.
43. Dean Witter Precious Metals and Minerals Trust
3
<PAGE>
OPEN-END FUNDS (CONT)
44. Dean Witter Retirement Series
45. Dean WItter Select Dimensions Investment Series
46. Dean Witter Select Municipal Reinvestment Fund
47. Dean Witter Short-Term Bond Fund
48. Dean Witter Short-Term U.S. Treasury Trust
49. Dean Witter Special Value Fund
50. Dean Witter Strategist Fund
51. Dean Witter Tax-Exempt Securities Trust
52. Dean Witter Tax-Free Daily Income Trust
53. Dean WItter U.S. Government Money Market Trust
54. Dean Witter U.S. Government Securities Trust
55. Dean Witter Utilities Fund
56. Dean Witter Value-Added Market Series
57. Dean Witter Variable Investment Series
58. Dean Witter World Wide Income Trust
59. Dean Witter World Wide Investment Trust
CLOSED-END FUNDS
1. High Income Advantage Trust
2. High Income Advantage Trust II
3. High Income Advantage Trust III
4. InterCapital Income Securities Inc.
5. Dean Witter Government Income Trust
6. InterCapital Insured Municipal Bond Trust
7. InterCapital Insured Municipal Trust
8. InterCapital Insured Municipal Income Trust
9. InterCapital California Insured Municipal Income Trust
10. InterCapital Insured Municipal Securities
11. InterCapital Insured California Municipal Securities
12. InterCapital Quality Municipal Investment Trust
13. InterCapital Quality Municipal Income Trust
14. InterCapital Quality Municipal Securities
15. InterCapital California Quality Municipal Securities
16. InterCapital New York Quality Municipal Securities
17. Municipal Income Trust
18. Municipal Income Trust II
19. Municipal Income Trust III
20. Municipal Income Opportunities Trust
21. Municipal Income Opportunities II
22. Municipal Income Opportunities III
23. Prime Income Trust
24. Municipal Premium Income Trust
The foregoing investment companies, together with the Fund, are collectively
referred to as the Dean Witter Funds.
In addition, Dean Witter Services Company Inc. ("DWSC"), a wholly-owned
subsidiary of InterCapital, serves as manager for the following companies for
which TCW Funds Management, Inc. is the investment adviser (the "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 Mid-Cap Equity Trust
8. TCW/DW Global Telecom Trust
9. TCW/DW Strategic Income 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 Total Return Trust
14. TCW/DW Emerging Markets Opportunities Trust
4
<PAGE>
InterCapital also serves as: (i) administrator of The BlackRock Strategic
Term Trust Inc., a closed-end investment company; and (ii) sub-administrator of
MassMutual Participation Investors and Templeton Global Governments Income
Trust, closed-end investment companies.
Pursuant to an Investment Management Agreement (the "Agreement") with the
Investment Manager, the Fund has retained the Investment Manager to manage the
Investment of the Fund's assets, including the placing of orders for the
purchase and sale of portfolio securities. The Investment Manager 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.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, such office space, facilities,
equipment, clerical help and bookkeeping and certain 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 federal and state securities commissions
(except insofar as the participation or assistance of independent accountants
and attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In addition, the Investment Manager pays the salaries of all
personnel, including officers of the Fund, who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone service, heat,
light, power and other utilities provided to the Fund. The Investment Manager
has retained DWSC to perform its administrative services under the Agreement.
Expenses not expressly assumed by the Investment Manager under the Agreement
or by the Distributor of the Fund's shares, Dean Witter Distributors Inc.
("Distributors" or the "Distributor"), will be paid by the Fund. These expenses
will be allocated among the four classes of shares of the Fund (each, a "Class")
pro rata based on the net assets of the Fund attributable to each Class, except
as described below. The expenses borne by the Fund include, but are not limited
to: expenses of the Plan of Distribution pursuant to Rule 12b-1 (the "12b-1
fee") (see "The Distributor"); charges and expenses of any registrar, custodian;
stock transfer and dividend disbursing agent; brokerage commissions; 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 Investment Manager or any corporate
affiliate of the Investment Manager; 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 Investment Manager (not including compensation or expenses of attorneys
who are employees of the Investment Manager) 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 (depending upon the nature of the legal claim,
liability or lawsuit); and all other costs of the Fund's operation. The 12b-1
fees relating to a particular Class will be allocated directly to that Class. In
addition, other expenses associated with a particular Class (except advisory or
custodial fees) may be allocated directly to that Class, provided that such
expenses are reasonably identified as specifically attributable to that Class
and the direct allocation to that Class is approved by the Trustees.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder, the
Investment Manager is not liable to the Fund or any of its investors for any act
or omission by the Investment Manager or for any losses sustained by the Fund or
its investors. The Agreement in no way restricts the Investment Manager from
acting as investment manager or adviser to others.
5
<PAGE>
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, DWSC began to provide the administrative services to the
Fund which were previously performed directly by InterCapital. On April 17,
1995, DWSC was reorganized in the State of Delaware, necessitating the entry
into a new Services Agreement by InterCapital and DWSC on such date. The
foregoing internal reorganizations did not result in any change in the nature or
scope of the administrative services being provided to the Fund or any of the
fees being paid by the Fund for the overall services being performed under the
terms of the existing Agreement.
The Investment Manager paid the organizational expenses of the Fund incurred
prior to the offering of the Fund's shares. The Fund has reimbursed the
Investment Manager for approximately $180,000 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 Agreement was initially approved by the Trustees on February 21, 1997
and by the shareholders of the Fund at a Special Meeting of Shareholders held on
May 21, 1997. The Agreement is substantially identical to a prior investment
management agreement which was initially approved by the Trustees on April 28,
1993 and by the Investment Manager as the then sole shareholder on April 28,
1993 (the "Prior Agreement"). The Prior Agreement was amended on May 1, 1996 to
lower management fees charged on average daily net assets of the Fund in excess
of $2.5 billion to 0.675%. The Prior Agreement was further amended on May 1,
1997 to lower management fees charged on average daily net assets of the Fund in
excess of $3.5 billion to 0.65%. The Agreement took effect on May 31, 1997 upon
the consummation of the merger of Dean Witter, Discover & Co. with Morgan
Stanley Group Inc. The Agreement may be terminated at any time, without penalty,
on thirty days' notice by the Board of Trustees of the Fund, by the holders of a
majority, as defined in the Investment Company Act of 1940 (the "Act"), of the
outstanding shares of the Fund, or by the Investment Manager. The Agreement will
automatically terminate in the event of its assignment (as defined in the Act).
Under its terms, the Agreement has an initial term ending April 30, 1999,
and 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 Trustees of the Fund who are
not parties to the Agreement or "interested persons" (as defined in the Act) of
any such party (the "Independent Trustees"), which votes must be cast in person
at a meeting called for the purpose of voting on such approval.
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund pays the
Investment Manager monthly compensation calculated daily by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.75% of the portion of such daily net assets not
exceeding $1 billion; 0.725% of the portion of such daily net assets exceeding
$1 billion, but not exceeding $1.5 billion; 0.70% of the portion of such daily
net assets exceeding $1.5 billion, but not exceeding $2.5 billion; 0.675% of the
portion of such daily net assets exceeding $2.5 billion, but not exceeding $3.5
billion; and 0.65% of the portion of such daily net assets exceeding $3.5
billion. The Fund accrued total compensation to the Investment Manager of
$11,531,133, $15,506,578 and $19,649,426 during the fiscal years ended March 31,
1995, 1996 and 1997, respectively.
The Fund has acknowledged that the name "Dean Witter" is a property right of
DWR. The Fund has agreed that DWR or its parent companies may use, or at any
time permit others to use, the name "Dean Witter." The Fund has also agreed that
in the event the investment management contract between the Investment Manager
and the Fund is terminated, or if the affiliation between the Investment Manager
and its parent companies is terminated, the Fund will eliminate the name "Dean
Witter" from its name if DWR or its parent companies shall so request.
6
<PAGE>
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
InterCapital and with the 83 Dean Witter Funds and the 14 TCW/DW Funds are shown
below.
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------------------ ----------------------------------------------------------
<S> <C>
Michael Bozic (56) ................................... Chairman and Chief Executive Officer of Levitz Furniture
Trustee Corporation (since November, 1995); Director or Trustee of
c/o Levitz Furniture Corporation the Dean Witter Funds; formerly President and Chief
6111 Broken Sound Parkway, N.W. Executive Officer of Hills Department Stores (May,
Boca Raton, Florida 1991-July, 1995); formerly variously Chairman, Chief
Executive Officer, President and Chief Operating Officer
(1987-1991) of the Sears Merchandise Group of Sears,
Roebuck and Co.; Director of Eaglemark Financial Services,
Inc., the United Negro College Fund and Weirton Steel
Corporation.
Charles A. Fiumefreddo* (64) ......................... Chairman, Chief Executive Officer and Director of
Chairman of the Board, InterCapital, Distributors and DWSC; Executive Vice
President and Chief Executive President and Director of DWR; Chairman, Director or
Officer and Trustee Trustee, President and Chief Executive Officer of the Dean
Two World Trade Center Witter Funds; Chairman, Chief Executive Officer and
New York, New York Trustee of the TCW/DW Funds; Chairman and Director of Dean
Witter Trust Company ("DWTC"); Director and/or officer of
various MSDWD subsidiaries; formerly Executive Vice
President and Director of Dean Witter, Discover & Co.
(until February, 1993).
Edwin J. Garn (64) ................................... Director or Trustee of the Dean Witter Funds; formerly
Trustee United States Senator (R-Utah) (1974-1992) and Chairman,
c/o Huntsman Corporation Senate Banking Committee (1980-1986); formerly Mayor of
500 Huntsman Way Salt Lake City, Utah (1972-1974); formerly Astronaut,
Salt Lake City, Utah Space Shuttle Discovery (April 12-19, 1985); Vice
Chairman, Huntsman Corporation (since January, 1993);
Director of Franklin Quest (time management systems) and
John Alden Financial Corp. (health insurance); member of
the board of various civic and charitable organizations.
John R. Haire (72) ................................... Chairman of the Audit Committee and Chairman of the
Trustee Committee of the Independent Directors or Trustees and
Two World Trade Center Director or Trustee of the Dean Witter Funds; Chairman of
New York, New York the Audit Committee and Chairman of the Committee of the
Independent Trustees and Trustee of the TCW/DW Funds;
formerly President, Council for Aid to Education
(1978-1989) and Chairman and Chief Executive Officer of
Anchor Corporation, an Investment Adviser (1964-1978);
Director of Washington National Corporation (insurance).
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------------------ ----------------------------------------------------------
<S> <C>
Wayne E. Hedien** (63) ............................... Retired; Director or Trustee of the Dean Witter Funds
Trustee (commencing on September 1, 1997); Director of The PMI
c/o Gordon Altman Butowsky Group, Inc. (private mortgage insurance); Trustee and Vice
Weitzen Shalov & Wein Chairman of The Field Museum of Natural History; formerly
Counsel to the Independent Trustees associated with the Allstate Companies (1966-1994), most
114 West 47th Street recently as Chairman of The Allstate Corporation (March,
New York, New York 1993-December, 1994) and Chairman and Chief Executive
Officer of its wholly-owned subsidiary, Allstate Insurance
Company (July, 1989-December, 1994); director of various
other business and charitable organizations.
Dr. Manuel H. Johnson (48) ........................... Senior Partner, Johnson Smick International, Inc., a
Trustee consulting firm; Co-Chairman and a founder of the Group of
c/o Johnson Smick Seven Council (G7C), an international economic commission;
International, Inc. Director or Trustee of the Dean Witter Funds; Trustee of
1133 Connecticut Avenue, N.W. the TCW/DW Funds; Director of NASDAQ (since June, 1995);
Washington, D.C. Director of Greenwich Capital Markets, Inc.
(broker-dealer); Trustee of the Financial Accounting
Foundation (oversight organization for the Financial
Accounting Standards Board); formerly Vice Chairman of the
Board of Governors of the Federal Reserve System
(1986-1990) and Assistant Secretary of the U.S. Treasury
(1982-1986).
Michael E. Nugent (61) ............................... General Partner, Triumph Capital, L.P., a private
Trustee investment partnership; Director or Trustee of the Dean
c/o Triumph Capital, L.P. Witter Funds; Trustee of the TCW/DW Funds; formerly Vice
237 Park Avenue President, Bankers Trust Company and BT Capital
New York, New York Corporation (1984-1988); Director of various business
organizations.
Philip J. Purcell* (53) .............................. Chairman of the Board of Directors and Chief Executive
Trustee Officer of MSDWD, DWR and Novus Credit Services Inc.;
1585 Broadway Director of InterCapital, DWSC and Distributors; Director
New York, New York or Trustee of the Dean Witter Funds; Director and/or
officer of various MSDWD subsidiaries.
John L. Schroeder (66) ............................... Retired; Director or Trustee of the Dean Witter Funds;
Trustee Trustee of the TCW/DW Funds; Director of Citizens
c/o Gordon Altman Butowsky Utilities Company; formerly Executive Vice President and
Weitzen Shalov & Wein Chief Investment Officer of the Home Insurance Company
Counsel to the Independent Trustees (August, 1991-September, 1995).
114 West 47th Street
New York, New York
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------------------ ----------------------------------------------------------
<S> <C>
Barry Fink (42) ...................................... Senior Vice President (since March, 1997) and Secretary
Vice President, and General Counsel (since February, 1997) of InterCapital
Secretary and General Counsel and DWSC; Senior Vice President (since March, 1997) and
Two World Trade Center Assistant Secretary and Assistant General Counsel (since
New York, New York February, 1997) of Distributors; Assistant Secretary of
DWR (since August, 1996); Vice President, Secretary and
General Counsel of the Dean Witter Funds and the TCW/DW
Funds (since February, 1997); previously First Vice
President (June, 1993-February, 1997), Vice President
(until June, 1993) and Assistant Secretary and Assistant
General Counsel of InterCapital and DWSC and Assistant
Secretary of the Dean Witter Funds and TCW/DW Funds.
Paul D. Vance (61) ................................... Senior Vice President of InterCapital; Vice President of
Vice President several of the Dean Witter Funds.
Two World Trade Center
New York, New York
Thomas F. Caloia (51) ................................ First Vice President and Assistant Treasurer of
Treasurer InterCapital and DWSC; Treasurer of the Dean Witter Funds
Two World Trade Center and the TCW/DW Funds.
New York, New York
</TABLE>
<TABLE>
<S> <C>
<FN>
- ------------
* Denotes Trustees who are "interested persons" of the Fund, as defined in
the Act.
** Mr. Hedien's term as Trustee will commence on September 1, 1997.
</TABLE>
In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, Mitchell M. Merin, President and Chief Strategic Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, Executive Vice President and Director of DWR, Director of SPS
Transaction Services, Inc. and various other MSDWD subsidiaries, Joseph J.
McAlinden, Executive Vice President and Chief Investment Officer of InterCapital
and Director of DWTC, Robert S. Giambrone, Senior Vice President of
InterCapital, DWSC, Distributors and DWTC and Director of DWTC, and Kenton J.
Hinchliffe, Ronald J. Worobel and Ira N. Ross, Senior Vice Presidents of
InterCapital, are Vice Presidents of the Fund. Marilyn K. Cranney, First Vice
President and Assistant General Counsel of InterCapital and DWSC, Lou Anne D.
McInnis, Carsten Otto and Ruth Rossi, Vice Presidents and Assistant General
Counsels of InterCapital and DWSC, and Frank Bruttomesso, 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 eight (8) trustees; as noted above, Mr.
Hedien's term will commence on September 1, 1997. These same individuals also
serve as directors or trustees for all of the Dean Witter Funds, and are
referred to in this section as Trustees. As of the date of this Statement of
Additional Information, there are a total of 83 Dean Witter Funds, comprised of
126 portfolios. As of April 30, 1997, the Dean Witter Funds had total net assets
of approximately $83.4 billion and more than six million shareholders.
Six Trustees and Mr. Hedien (77% of the total number) have no affiliation or
business connection with InterCapital or any of its affiliated persons and do
not own any stock or other securities issued by InterCapital's parent company,
MSDWD. These are the "disinterested" or "independent" Trustees. The
9
<PAGE>
other two Trustees (the "management Trustees") are affiliated with InterCapital.
Four of the six independent Trustees are also Independent Trustees of the TCW/DW
Funds.
Law and regulation establish both general guidelines and specific duties for
the Independent Trustees. The Dean Witter 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 current Independent Trustees serve as members of the Audit
Committee and the Committee of the Independent Trustees. Three of them also
serve as members of the Derivatives Committee. During the calendar year ended
December 31, 1996, the three Committees held a combined total of sixteen
meetings. The Committees hold some meetings at InterCapital's offices and some
outside InterCapital. Management Trustees or officers do not attend these
meetings unless they are invited for purposes of furnishing information or
making a report.
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. Most of the Dean Witter Funds have 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 COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He 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 both
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
negotia-
10
<PAGE>
tions with the Investment 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 Committee of the Independent Trustees and the Audit
Committee 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 Dean Witter Funds and as an Independent Trustee and, since July
1, 1996, as Chairman of the Committee of the Independent Trustees and the Audit
Committee of the TCW/DW Funds. The current Committee Chairman has had more than
35 years experience as a senior executive in the investment company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and enhances
their ability to negotiate on behalf of each Fund with the Fund's service
providers. This arrangement also precludes the possibility of separate groups of
Independent Trustees arriving at conflicting decisions regarding operations and
management of the Funds and avoids the cost and confusion that would likely
ensue. Finally, having the same Independent Trustees serve on all Fund Boards
enhances the ability of each Fund to obtain, at modest cost to each separate
Fund, the services of Independent Trustees, and a Chairman of their Committees,
of the caliber, experience and business acumen of the individuals who serve as
Independent Trustees of the Dean Witter Funds.
COMPENSATION OF INDEPENDENT TRUSTEES
The Fund pays each Independent Trustee an annual fee of $1,000 plus a per
meeting fee of $50 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 $750 and pays the Chairman of the Committee of
the Independent Trustees an additional annual fee of $1,200). 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 Investment Manager or an affiliated
company receive no compensation or expense reimbursement from the Fund.
The following table illustrates the compensation paid to the Fund's
Independent Trustees by the Fund for the fiscal year ended March 31, 1997.
FUND COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- -------------------------------------------------------------- ---------------
<S> <C>
Michael Bozic................................................. $1,800
Edwin J. Garn................................................. 1,900
John R. Haire................................................. 3,550
Dr. Manuel H. Johnson......................................... 1,850
Michael E. Nugent............................................. 1,900
John L. Schroeder............................................. 1,900
</TABLE>
The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1996 for services
to the 82 Dean Witter Funds and, in the case of Messrs. Haire, Johnson, Nugent
and Schroeder, the 14 TCW/DW Funds that were in operation at December 31, 1996.
With respect to Messrs. Haire, Johnson, Nugent and Schroeder, the TCW/DW Funds
are included solely because of a limited exchange privilege between those Funds
and five Dean Witter Money Market Funds.
11
<PAGE>
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS FOR SERVICE
CHAIRMAN OF AS TOTAL CASH
COMMITTEES OF CHAIRMAN OF COMPENSATION
FOR SERVICE INDEPENDENT COMMITTEES OF FOR SERVICES
AS DIRECTOR OR DIRECTORS/ INDEPENDENT TO
TRUSTEE AND FOR SERVICE AS TRUSTEES AND TRUSTEES AND 82 DEAN
COMMITTEE MEMBER TRUSTEE AND AUDIT AUDIT WITTER
OF 82 DEAN COMMITTEE MEMBER COMMITTEES OF COMMITTEES OF FUNDS AND
NAME OF WITTER OF 14 TCW/DW 82 DEAN WITTER 14 TCW/DW 14 TCW/DW
INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS FUNDS FUNDS
- --------------------------- ---------------- ---------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Michael Bozic.............. $138,850 -- -- -- $138,850
Edwin J. Garn.............. 140,900 -- -- -- 140,900
John R. Haire.............. 106,400 $64,283 $195,450 $ 12,187 378,320
Dr. Manuel H. Johnson...... 137,100 66,483 -- -- 203,583
Michael E. Nugent.......... 138,850 64,283 -- -- 203,133
John L. Schroeder.......... 137,150 69,083 -- -- 206,233
</TABLE>
As of the date of this Statement of Additional Information, 57 of the Dean
Witter Funds, including the Fund, have adopted a retirement program under which
an Independent Trustee who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent Director
or Trustee of any Dean Witter Fund that has adopted the retirement program (each
such Fund referred to as an "Adopting Fund" and each such Trustee referred to as
an "Eligible Trustee") is entitled to retirement payments upon reaching the
eligible retirement age (normally, after attaining age 72). Annual payments are
based upon length of service. Currently, upon retirement, each Eligible Trustee
is entitled to receive from the Adopting Fund, commencing as of his or her
retirement date and continuing for the remainder of his or her life, an annual
retirement benefit (the "Regular Benefit") equal to 25.0% of his or her Eligible
Compensation plus 0.4166666% of such Eligible Compensation for each full month
of service as an Independent Director or Trustee of any Adopting Fund in excess
of five years up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the Board.(1) "Eligible Compensation" is one-fifth
of the total compensation earned by such Eligible Trustee for service to the
Adopting Fund in the five year period prior to the date of the Eligible
Trustee's retirement. Benefits under the retirement program are not secured or
funded by the Adopting Funds.
The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the Fund for the fiscal year ended March 31, 1997
and by the 57 Dean Witter Funds (including the Fund) for the year ended December
31, 1996, and the estimated retirement benefits for the Fund's Independent
Trustees, to commence upon their retirement, from the Fund as of March 31, 1997
and from the 57 Dean Witter Funds as of December 31, 1996.
- ---------------
(1) An Eligible Trustee may elect alternate payments of his or her retirement
benefits based upon the combined life expectancy of such Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement. The
amount estimated to be payable under this method, through the remainder of
the later of the lives of such Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit. In addition, the Eligible
Trustee may elect that the surviving spouse's periodic payment of benefits
will be equal to either 50% or 100% of the previous periodic amount, an
election that, respectively, increases or decreases the previous periodic
amount so that the resulting payments will be the actuarial equivalent of
the Regular Benefit.
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<PAGE>
RETIREMENT BENEFITS FROM THE FUND AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
RETIREMENT
FOR ALL ADOPTING FUNDS BENEFITS ESTIMATED ANNUAL
-------------------------------------- ACCRUED AS BENEFITS
ESTIMATED EXPENSES UPON RETIREMENT(2)
CREDITED YEARS ESTIMATED -------------------- ----------------------
OF SERVICE AT PERCENTAGE OF BY ALL FROM FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUND FUNDS FUND FUNDS
- ----------------------------------- ------------------- ----------------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic...................... 10 50.0% $ 378 $ 20,147 $ 925 $ 51,325
Edwin J. Garn...................... 10 50.0 634 27,772 925 51,325
John R. Haire...................... 10 50.0 2,111 46,952 1,971 129,550
Dr. Manuel H. Johnson.............. 10 50.0 254 10,926 925 51,325
Michael E. Nugent.................. 10 50.0 478 19,217 925 51,325
John L. Schroeder.................. 8 41.7 730 38,700 771 42,771
</TABLE>
- ------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) above.
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
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. As discussed in the
Prospectus, the Fund may enter into forward foreign currency exchange contracts
("forward contracts") as a hedge against fluctuations in future foreign exchange
rates. The Fund will conduct its foreign currency exchange transactions either
on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market, or through entering into forward contracts to purchase or sell
foreign currencies. A forward contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market
conducted directly between currency traders (usually large, commercial and
investment banks) and their customers. Such forward contracts will only be
entered into with United States banks and their foreign branches or foreign
banks whose assets total $1 billion or more. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades.
When management of the Fund believes that the currency of a particular
foreign country may suffer a substantial movement against the U.S. dollar, it
may enter into a forward contract to purchase or sell, for a fixed amount of
dollars or other currency, the amount of foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency. The Fund will not enter into such forward contracts or
maintain a net exposure to such contracts where the consummation of the
contracts would obligate the Fund to deliver an amount of foreign currency in
excess of the value of the Fund's portfolio securities or other assets
denominated in that currency. Under normal circumstances, consideration of the
prospect for currency parities will be incorporated into the longer term
investment decisions made with regard to overall diversification strategies.
However, the management of the Fund believes that it is important to have the
flexibility to enter into such forward contracts when it determines that the
best interests of the Fund will be served. The Fund's custodian bank will place
cash, U.S. Government securities or other appropriate liquid portfolio
securities in a segregated account of the Fund in an amount equal to the value
of the Fund's total assets committed to the consummation of forward contracts
entered into under the circumstances set forth above. If the value of the
securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the Fund's commitments with respect to such
contracts.
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<PAGE>
Where, for example, the Fund is hedging a portfolio position consisting of
foreign securities denominated in a foreign currency against adverse exchange
rate moves vis-a-vis the U.S. dollar, at the maturity of the forward contract
for delivery by the Fund of a foreign currency, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency (however, the ability of the Fund to terminate a contract is
contingent upon the willingness of the currency trader with whom the contract
has been entered into to permit an offsetting transaction). It is impossible to
forecast the market value of portfolio securities at the expiration of the
contract. Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio securities if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver.
If the Fund retains the portfolio securities and engages in an offsetting
transaction, the Fund will incur a gain or loss to the extent that there has
been movement in spot or forward contract prices. If the Fund engages in an
offsetting transaction, it may subsequently enter into a new forward contract to
sell the foreign currency. Should forward prices decline during the period
between the Fund's entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the purchase of
the foreign currency, the Fund will realize a gain to the extent the price of
the currency it has agreed to sell exceeds the price of the currency it has
agreed to purchase. Should forward prices increase, the Fund will suffer a loss
to the extent the price of the currency it has agreed to purchase exceeds the
price of the currency it has agreed to sell.
If the Fund purchases a fixed-income security which is denominated in U.S.
dollars but which will pay out its principal based upon a formula tied to the
exchange rate between the U.S. dollar and a foreign currency, it may hedge
against a decline in the principal value of the security by entering into a
forward contract to sell an amount of the relevant foreign currency equal to
some or all of the principal value of the security.
At times when the Fund has written a call option on a security or the
currency in which it is denominated, it may wish to enter into a forward
contract to purchase or sell the foreign currency in which the security is
denominated. A forward contract would, for example, hedge the risk of the
security on which a call option has been written declining in value to a greater
extent than the value of the premium received for the option. The Fund will
maintain with its Custodian at all times, cash, U.S. Government securities, or
other appropriate liquid portfolio securities in a segregated account equal in
value to all forward contract obligations and option contract obligations
entered into in hedge situations such as this.
Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. It will, however, do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the spread
between the prices at which they are buying and selling various currencies. Thus
a dealer may offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer.
REPURCHASE AGREEMENTS. As discussed in the Prospectus, 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,
14
<PAGE>
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 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.
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 Investment Manager
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.
The Fund's investments in repurchase agreements may at times be substantial
when, in the view of the Investment Manager, liquidity, tax or other
considerations warrant.
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 cash equivalents, 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 days' notice, or by the Fund on four business days'
notice. If the borrower fails to deliver the loaned securities within four 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 Investment Manager pursuant to procedures adopted and reviewed, on an
ongoing basis, by the Board of Trustees of the Fund.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loaned securities, to
be delivered within one day after notice, to permit the exercise of 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. However, the
Fund has not lent any of its portfolio securities to date and has no intention
of lending any of its portfolio securities during its upcoming fiscal year
ending March 31, 1998.
15
<PAGE>
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time 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 commitment. While the Fund will only purchase securities on a
when-issued, delayed delivery or forward commitment basis with the intention of
acquiring the securities, the Fund may sell the securities before the settlement
date, if it is deemed advisable. The securities so purchased or sold are subject
to market fluctuation and no interest or dividends accrue to the purchaser prior
to the settlement date. At the time the Fund makes the commitment to purchase or
sell securities on a when-issued, delayed delivery or forward commitment basis,
it will record the transaction and thereafter reflect the value, each day, of
such security purchased, or if a sale, the proceeds to be received, in
determining its net asset value. At the time of delivery of the securities, the
value may be more or less than the purchase or sale price. The Fund will also
establish a segregated account with its custodian bank in which it will
continually maintain cash or cash equivalents or other liquid portfolio
securities equal in value to commitments to purchase securities on a
when-issued, delayed delivery or forward commitment basis. Subject to the
foregoing restrictions, the Fund may purchase securities on such basis without
limit. The Investment Manager and the Board of Trustees do not believe that the
Fund's net asset value will be adversely affected by the purchase of securities
on such basis.
WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security depends
upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization, 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 Investment Manager 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 maintain cash or cash equivalents or other
liquid portfolio securities equal in value to recognized commitments for such
securities. 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 value of the Fund's commitments to purchase the
securities of any one issuer, together with the value of all securities of such
issuer owned by the Fund, may not exceed 5% of the value of the Fund's total
assets at the time the initial commitment to purchase such securities is made
(see "Investment Restrictions"). Subject to the foregoing restrictions, 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 Investment Manager and the Trustees do 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.
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 of the Securities Act, and determined to be liquid
pursuant to the procedures discussed in the following paragraph, are not subject
to the foregoing restriction.) 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 ("SEC") has adopted Rule 144A under
the Securities Act, which permits the Fund to sell restricted securities to
qualified institutional buyers without limitation. The Investment Manager,
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. The procedures require that the following factors be taken into account in
making a liquidity determination: (1) the
16
<PAGE>
frequency of trades and price quotes for the security; (2) the number of dealers
and other potential purchasers who have issued quotes on the security; (3) any
dealer undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (the time needed to dispose of
the security, the method of soliciting offers, and the mechanics of transfer).
If a restricted security is determined to be "liquid," such security will not be
included within the category "illiquid securities," which under the SEC's
current policies may not exceed 15% of the SEC net assets, and will not be
subject to the 5% limitation set out in the preceding paragraph.
The Rule 144A marketplace of sellers and qualified institutional buyers is
new and still developing and may take a period of time to develop into a mature
liquid market. As such, the market for certain private placements purchased
pursuant to Rule 144A may be initially small or may, subsequent to purchase,
become illiquid. Furthermore, the Investment Manager may not posses all the
information concerning an issue of securities that it wishes to purchase in a
private placement to which it would normally have had access, had the
registration statement necessitated by a public offering been filed with the
Securities and Exchange Commission.
OPTIONS AND FUTURES TRANSACTIONS
The Fund may write covered call options against securities held in its
portfolio and covered put options on eligible portfolio securities and stock
indexes and purchase options of the same series to effect closing transactions,
and may hedge against potential changes in the market value of investments (or
anticipated investments) and facilitate the reallocation of the Fund's assets
into and out of equities and fixed-income securities by purchasing put and call
options on portfolio (or eligible portfolio) securities and engaging in
transactions involving futures contracts and options on such contracts. The Fund
may also hedge against potential changes in the market value of the currencies
in which its investments (or anticipated investments) are denominated by
purchasing put and call options on currencies and engage in transactions
involving currency futures contracts and options on such contracts.
Call and put options on U.S. Treasury notes, bonds and bills and equity
securities are listed on Exchanges and are written in over-the-counter
transactions ("OTC options"). Listed options are issued by the Options Clearing
Corporation ("OCC") and other clearing entities including foreign exchanges.
Ownership of a listed call option gives the Fund the right to buy from the OCC
the underlying security covered by the option at the stated exercise price (the
price per unit of the underlying security) by filing an exercise notice prior to
the expiration date of the option. The writer (seller) of the option would then
have the obligation to sell to the OCC the underlying security 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 at the stated exercise price. Upon
notice of exercise of the put option, the writer of the put would have the
obligation to purchase the underlying security from the OCC at the exercise
price.
OPTIONS ON TREASURY BONDS AND NOTES. Because trading in options written on
Treasury bonds and notes tends to center on the most recently auctioned issues,
the exchanges on which such securities trade will not continue indefinitely to
introduce options with new expirations to replace expiring options on particular
issues. Instead, the expirations introduced at the commencement of options
trading on a particular issue will be allowed to run their course, with the
possible addition of a limited number of new expirations as the original ones
expire. Options trading on each issue of bonds or notes will thus be phased out
as new options are listed on more recent issues, and options representing a full
range of expirations will not ordinarily be available for every issue on which
options are traded.
OPTIONS ON TREASURY BILLS. Because a deliverable Treasury bill changes from
week to week, writers of Treasury bill calls cannot provide in advance for their
potential exercise settlement obligations by acquiring and holding the
underlying security. However, if the Fund holds a long position in Treasury
bills with a principal amount of the securities deliverable upon exercise of the
option, the position may be hedged from a risk standpoint by the writing of a
call option. For so long as the call option is outstanding, the Fund will hold
the Treasury bills in a segregated account with its Custodian, so that they will
be treated as being covered.
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<PAGE>
OPTIONS ON FOREIGN CURRENCIES. The Fund may purchase and write options on
foreign currencies for purposes similar to those involved with investing in
forward foreign currency exchange contracts. For example, in order to protect
against declines in the dollar value of portfolio securities which are
denominated in a foreign currency, the Fund may purchase put options on an
amount of such foreign currency equivalent to the current value of the portfolio
securities involved. As a result, the Fund would be enabled to sell the foreign
currency for a fixed amount of U.S. dollars, thereby "locking in" the dollar
value of the portfolio securities (less the amount of the premiums paid for the
options). Conversely, the Fund may purchase call options on foreign currencies
in which securities it anticipates purchasing are denominated to secure a set
U.S. dollar price for such securities and protect against a decline in the value
of the U.S. dollar against such foreign currency. The Fund may also purchase
call and put options to close out written option positions.
The Fund may also write call options on foreign currency to protect against
potential declines in its portfolio securities which are denominated in foreign
currencies. If the U.S. dollar value of the portfolio securities falls as a
result of a decline in the exchange rate between the foreign currency in which a
security is denominated and the U.S. dollar, then a loss to the Fund occasioned
by such value decline would be ameliorated by receipt of the premium on the
option sold. At the same time, however, the Fund gives up the benefit of any
rise in value of the relevant portfolio securities above the exercise price of
the option and, in fact, only receives a benefit from the writing of the option
to the extent that the value of the portfolio securities falls below the price
of the premium received. The Fund may also write options to close out long call
option positions.
The markets in foreign currency options are relatively new and the Fund's
ability to establish and close out positions on such options is subject to the
maintenance of a liquid secondary market. Although the Fund will not purchase or
write such options unless and until, in the opinion of the management of the
Fund, the market for them has developed sufficiently to ensure that the risks in
connection with such options are not greater than the risks in connection with
the underlying currency, there can be no assurance that a liquid secondary
market will exist for a particular option at any specific time. In addition,
options on foreign currencies are affected by all of those factors which
influence foreign exchange rates and investments generally.
The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of the
option position may vary with changes in the value of either or both currencies
and have no relationship to the investment merits of a foreign security,
including foreign securities held in a "hedged" investment portfolio. Because
foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having to deal in an
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information available is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(i.e., less than $1 million) where rates may be less favorable. The interbank
market in foreign currencies is a global, around-the-clock market. To the extent
that the U.S. options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that are not reflected in the options market.
OTC OPTIONS. Exchange-listed options are issued by the OCC 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 underlying an option it has written, in accordance with the
18
<PAGE>
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 primary U.S. Government securities dealers
recognized by the Federal Reserve Bank of New York.
COVERED CALL WRITING. The Fund is permitted to write covered call options
on portfolio securities and the U.S. dollar and foreign currencies, 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
corresponding to the exercise price and a maturity date no later than that of
the securities (currency) deliverable under the call option. A call option is
also covered if the Fund holds a call on the same security (currency) 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 portfolio securities 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 achieve a greater total return than would be
realized from holding the underlying securities (currency) alone. Moreover, the
income received from the premium will offset a portion of the potential loss
incurred by the Fund if the securities (currency) underlying the option are
ultimately sold (exchanged) by the Fund at a loss. 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 less 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. Also, effecting a closing purchase transaction will
permit the cash or proceeds from the concurrent sale of any securities subject
to the option to be used for other investments by the Fund. 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 for on the option less the commission paid.
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Options written by a Fund normally have expiration dates of from up to nine
months (equity securities) to eighteen months (fixed-income securities) from the
date written. The exercise price of a call option may be below, equal to or
above the current market value of the underlying security (currency) at the time
the option is written. See "Risks of Options and Futures Transactions," below.
COVERED PUT WRITING. 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 liquid portfolio securities 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 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 mark to market difference is maintained by the Fund in
cash, U.S. Government securities or other liquid portfolio securities 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 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. 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 two purposes: (1) to receive the income
derived from the premiums paid by purchasers; and (2) when the Investment
Manager wishes to purchase the security 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. 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
difference between the exercise price of the option and the current market price
of the underlying securities when the put is exercised, offset by the premium
received (less the commissions paid on the transaction).
The Fund may also purchase put options to close out written put positions in
a manner similar to call options closing purchase transactions. In addition, the
Fund may sell a put option which it has previously purchased prior to the sale
of the securities (currency) 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 other transaction costs paid on the put option
sold. Any 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.
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 call options 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 and currencies (or related
currencies) which it holds (or has the right to acquire) in its portfolio only
to protect itself against a decline in the value of the security (currency). If
the value of the underlying security (currency) were to fall below the exercise
price
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of the put purchased in an amount greater than the premium paid for the option,
the Fund would incur no additional loss. The Fund may also purchase put options
to close out written put positions in a manner similar to call options closing
purchase transactions. 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 other
transaction costs paid on the put option which is sold. Any 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. The successful use of options depends on the
ability of the Investment Manager to forecast correctly interest rates and
market movements. If the market value of the portfolio securities (or the
currencies in which they are denominated) upon which call options have been
written increases, the Fund may receive a lower total return from the portion of
its portfolio upon which calls have been written than it would have had such
calls not been written. During the option period, the covered call writer has,
in return for the premium on the option, given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security (or the currency in which it is denominated) increase, but has retained
the risk of loss should the price of the underlying security (currency) decline.
The covered put writer also retains the risk of loss should the market value of
the underlying security (currency) decline below the exercise price of the
option less the premium received on the sale of the option. In both cases, the
writer has no control over the time when it may be required to fulfill its
obligation as a writer of the option. 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 (currency) 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 over-the-counter 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 (exchange) an underlying security
(currency) at a time when it might otherwise be advantageous to do so. A covered
put option writer who is unable to effect a closing purchase transaction or to
purchase an offsetting over-the-counter option would continue to bear the risk
of decline in the market price of the underlying security (currency) until the
option expires or is exercised. In addition, a covered put writer would be
unable to utilize the amount held in cash or U.S. Government or other liquid
portfolio securities as security for the put option for other investment
purposes until the exercise or expiration of the option.
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 Options Clearing Corporation ("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
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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.
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.
In the event of the bankruptcy of a broker through which the Fund engages in
transactions in options, 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 Investment Manager.
Each of the Exchanges has established limitations governing the maximum
number of call or put 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.
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 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. 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.
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.
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
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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." Options on stock indexes
provide the Fund with a means of protecting the Fund against the risk of market
wide price movements. If the Investment Manager 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
Investment Manager 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 Investment Manager 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 portfolio securities
equal to the aggregate exercise price of the puts, 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 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.
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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. The Fund may purchase and sell interest rate and stock
index futures contracts ("futures contracts") that are traded on U.S. and
foreign commodity exchanges on such underlying securities as U.S. Treasury
bonds, notes and bills ("interest rate" futures), on the U.S. dollar and foreign
currencies, and such indexes as the S&P 500 Index, the Moody's Investment-Grade
Corporate Bond Index and the New York Stock Exchange Composite Index ("index"
futures).
As a futures contract purchaser, the Fund incurs an obligation to take
delivery of a specified amount of the obligation underlying the contract at a
specified time in the future for a specified price. As a seller of a futures
contract, the Fund incurs an obligation to deliver the specified amount of the
underlying obligation at a specified time in return for an agreed upon price.
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) securities against changes in prevailing interest
rates. If the Investment Manager anticipates that interest rates may rise and,
concomitantly, the price of fixed-income securities fall, the Fund may sell an
interest rate futures contract or a bond index 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 U.S. Government
securities the Fund intends to purchase. Subsequently, appropriate fixed-income
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.
The Fund will purchase or sell futures contracts on the U.S. dollar and on
foreign currencies to hedge against an anticipated rise or decline in the value
of the U.S. dollar or foreign currency in which a portfolio security of the Fund
is denominated vis-a-vis another currency.
The Fund will purchase or sell stock index futures contracts for the purpose
of hedging its equity portfolio (or anticipated portfolio) securities against
changes in their prices. If the Investment Manager anticipates that the prices
of stock held by the Fund may fall, the Fund may sell a stock index futures
contract. Conversely, if the Investment Manager wishes to hedge against
anticipated price rises in those stocks which the Fund intends to purchase, the
Fund may purchase stock index futures contracts. In addition, interest rate and
stock index futures contracts will be bought or sold in order to close out a
short or long position 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. Index futures
contracts provide for the delivery of an amount of cash equal to a specified
dollar amount times the difference between the stock index value at the open or
close of the last trading day of the contract and the futures contract price. A
futures contract sale is closed out by effecting a futures contract purchase for
the same aggregate amount of the specific type of equity security 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 equity security and the same delivery date. If the offsetting sale price
exceeds the purchase price, the purchaser would
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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 liquid portfolio
securities 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 Custodian, in the account in the name of the broker, which are
reflective of price fluctuations in the futures contract. Currently, interest
rates futures contracts can be purchased on debt securities such as U.S.
Treasury Bills and Bonds, U.S. Treasury Notes with maturities between 6 1/2 and
10 years, GNMA Certificates and Bank Certificates of Deposit.
CURRENCY FUTURES. Generally, foreign currency futures provide for the
delivery of a specified amount of a given currency, on the exercise date, for a
set exercise price denominated in U.S. dollars or other currency. Foreign
currency futures contracts would be entered into for the same reason and under
the same circumstances as forward foreign currency exchange contracts. The
Investment Manager will assess such factors as cost spreads, liquidity and
transaction costs in determining whether to utilize futures contracts or forward
contracts in its foreign currency transactions and hedging strategy. Currently,
currency futures exist for, among other foreign currencies, the Japanese yen,
German mark, Canadian dollar, British pound, Swiss franc and European currency
unit.
Purchasers and sellers of foreign currency futures contracts are subject to
the same risks that apply to the buying and selling of futures generally. In
addition, there are risks associated with foreign currency futures contracts and
their use as a hedging device similar to those associated with options of
foreign currencies described above. Further, settlement of a foreign currency
futures contract must occur within the country issuing the underlying currency.
Thus, the Fund must accept or make delivery of the underlying currency in
accordance with any U.S. or foreign restrictions or regulations regarding the
maintenance of foreign banking arrangements by U.S. residents and may be
required to pay any fees, taxes or charges associated with such delivery which
are assessed in the issuing country.
Options on foreign currency futures contracts may involve certain additional
risks. Trading options on foreign currency futures contracts is relatively new.
The ability to establish and close out positions on such options is subject to
the maintenance of a liquid secondary market. To reduce this risk, the Fund will
not purchase or write options on foreign currency futures contracts unless and
until, in the Investment Manager's opinion, the market for such options has
developed sufficiently that the risks in connection with such options are not
greater than the risks in connection with transactions in the underlying foreign
currency.
INDEX FUTURES CONTRACTS. 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. Currently,
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the initial margin requirement is approximately 5% of the contract amount for
index futures. 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 a gain.
Currently, index futures contracts can be purchased or sold with respect to,
among others, the Standard & Poor's 500 Stock Price Index and the Standard &
Poor's 100 Stock Price Index on the Chicago Mercantile Exchange, the New York
Stock Exchange Composite Index on the New York Futures Exchange, the Major
Market Index on the American Stock Exchange, the Moody's Investment-Grade
Corporate Bond Index on the Chicago Board of Trade and the Value Line Stock
Index on the Kansas City Board of Trade.
OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write call and put
options on futures contracts and enter into closing transactions with respect to
such options to terminate an existing position. An option on a futures contract
gives the purchaser the right (in return for the premium paid), and the writer
the obligation, to assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the term of the option. Upon exercise of the
option, the delivery of the futures position by the writer of the option to the
holder of the option is accompanied by delivery of the accumulated balance in
the writer's futures margin account, which represents the amount by which the
market price of the futures contract at the time of exercise exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option on the futures contract.
The 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 Investment
Manager 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 Investment Manager seeks to hedge. Any premiums received in the writing of
options on futures contracts may, of course, augment the total return of the
Fund and thereby provide a further hedge against losses resulting from price
declines in portions of the Fund's portfolio.
The writer of an option on a futures contract is required to deposit initial
and variation margin pursuant to requirements similar to those applicable to
futures contracts. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS ON FUTURES. The Fund may not
enter into futures contracts or purchase related options thereon if, immediately
thereafter, the amount committed to margin plus the amount paid for premiums for
unexpired options on futures contracts exceeds 5% of the value of the Fund's
total assets, after taking into account unrealized gains and unrealized losses
on such contracts it has entered into, provided, however, that in the case of an
option that is in-the-money (the exercise price of the call (put) option is less
(more) than the market price of the underlying security) at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
However, there is no overall limitation on the percentage of the Fund's assets
which may be subject to a hedge position. In addition, in accordance with the
regulations of the Commodity Futures Trading Commission ("CFTC") under which the
Fund is exempted from registration as a commodity pool operator, the Fund may
only enter into futures contracts and options on futures contracts transactions
in accordance with the limitation described above. If the CFTC changes its
regulations so that the Fund would be permitted more latitude to write options
on futures contracts for purposes other than hedging the Fund's
invest-
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ments without CFTC registration, the Fund may engage in such transactions for
those purposes. Except as described above, there are no other limitations on the
use of futures and options thereon by the Fund.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS. The
successful use of futures and related options depends on the ability of the
Investment Manager to accurately predict market, interest rate and currency
movements. 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 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.
In addition, if the Fund holds a long position in a futures contract or has
sold a put option on a futures contract, it will hold cash, U.S. Government
securities or other liquid portfolio securities equal to the purchase price of
the contract or the exercise price of the put option (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.
If the Fund maintains a short position in a futures contract or 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 portfolio securities equal in value (when added to any initial
or variation margin on deposit) to the market value of the securities underlying
the futures contract or the exercise price of the option. Such a position may
also be covered by owning the securities underlying the futures contract (in the
case of a stock index futures contract a portfolio of securities substantially
replicating the relevant index), 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.
Exchanges may limit the amount by which the price of 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. In the event of adverse price movements, the Fund would
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 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.
The extent to which the Fund may enter into transactions involving options
and futures contracts may be limited by the Internal Revenue Code's requirements
for qualification as a regulated investment
27
<PAGE>
company and the Fund's intention to qualify as such. See "Dividends,
Distributions and Taxes" in the Prospectus and the Statement of Additional
Information.
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 (a) temporarily, by short-term traders seeking to profit
from the difference between a contract or security price objective and their
cost of borrowed funds; (b) by investors in futures contracts electing to close
out their contracts through offsetting transactions rather than meet margin
deposit requirements; (c) by investors in futures contracts opting to make or
take delivery of underlying securities rather than engage in closing
transactions, thereby reducing liquidity of the futures market; and (d)
temporarily, by speculators who view the deposit requirements in the futures
markets as less onerous than margin requirements in the cash market. Due to the
possibility of price distortion in the futures market and because of the
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.
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 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 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 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 by the Investment Manager 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 at a time when it may be
disadvantageous to do so.
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.
The Investment Manager has substantial experience in the use of the
investment techniques described above under the heading "Options and Futures
Transactions," which techniques require
28
<PAGE>
skills different from those needed to select the portfolio securities underlying
various options and futures contracts.
NEW INSTRUMENTS. 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.
PORTFOLIO TURNOVER
It is anticipated that the Fund's portfolio turnover rate will not exceed
40%. A 40% turnover rate would occur, for example, if 40% 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, 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 the writing of options and 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 or reverse repurchase agreement; (b) purchasing
any securities on a when-issued or delayed delivery basis; (c) purchasing or
selling futures contracts, forward foreign exchange contracts or options;
(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
publicly distributed debt obligations 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
29
<PAGE>
connection with futures contracts or related options thereon is not
considered the purchase of a security on margin.
9. 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.
10. Invest for the purpose of exercising control or management of any
other issuer.
11. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition of
assets or in accordance with the provisions of Section 12(d) of the Act and
any Rules promulgated thereunder.
12. Purchase or sell commodities or commodities contracts except that
the Fund may purchase or sell futures contracts or options on futures.
If 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.
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.
As a non-fundamental policy, the Fund will not invest in other investment
companies in reliance on Sections 12(d)(1)(F), 12(d)(1)(G) or 12(d)(1)(J) of the
Act.
PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------
Subject to the general supervision of the Trustees, the Investment Manager
is responsible for decisions to buy and sell securities for the Fund, the
selection of brokers and dealers to effect the transactions, and the negotiation
of brokerage commissions, if any. Purchases and sales of securities on a stock
exchange are effected through brokers who charge a commission for their
services. In the over-the-counter market, securities are generally traded on a
"net" basis with dealers acting as principal for their own accounts without a
stated commission, although the price of the security usually includes a profit
to the dealer. The Fund expects that securities will be purchased at times in
underwritten offerings where the price includes a fixed amount of compensation,
generally referred to as the underwriter's concession or discount. Options and
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.
The Investment Manager currently serves as investment manager to a number of
clients, including other investment companies, and may in the future act as
investment manager or adviser to others. It is the practice of the Investment
Manager to cause purchase and sale transactions to be allocated among the Fund
and others whose assets it manages in such manner as it deems equitable. In
making such allocations among the Fund and other client accounts, various
factors may be considered, including the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held and the opinions of the persons responsible for managing the
portfolios of the Fund and other client accounts. In the case of certain initial
and secondary public offerings, the Investment Manager may utilize a pro-rata
allocation process based on the size of the Dean Witter Funds involved and the
number of shares available from the public offering.
The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Fund believes that
30
<PAGE>
a requirement always to seek the lowest possible commission cost could impede
effective portfolio management and preclude the Fund and the Investment Manager
from obtaining a high quality of brokerage and research services. In seeking to
determine the reasonableness of brokerage commissions paid in any transaction,
the Investment Manager 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, and in most cases an exact dollar value for those services is not
ascertainable.
The Fund anticipates that certain of its transactions involving foreign
securities will be effected on foreign securities exchanges. Fixed commissions
on such transactions are generally higher than negotiated commissions on
domestic transactions. There is also generally less government supervision and
regulation of foreign securities exchanges and brokers than in the United
States.
In seeking to implement the Fund's policies, the Investment Manager effects
transactions with those brokers and dealers who the Investment Manager believes
provide the most favorable prices and are capable of providing efficient
executions. If the Investment Manager 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 Investment Manager. Such services
may include, but are not limited to, any one or more of the following:
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investment; wire
services; and appraisals or evaluations of portfolio securities. For the fiscal
years ended March 31, 1995, 1996 and 1997, the Fund paid a total of $4,359,782,
$4,320,013 and $5,066,393, respectively, in brokerage commissions.
The information and services received by the Investment Manager from brokers
and dealers may be of benefit to the Investment Manager 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 Investment Manager and thereby reduce its expenses,
it is of indeterminable value and the management fee paid to the Investment
Manager is not reduced by any amount that may be attributable to the value of
such services. During the fiscal year ended March 31, 1997, $4,891,249 of the
brokerage commissions paid by the Fund were directed to brokers in connection
with research services provided ($2,128,091,500 in transactions).
Pursuant to an order of the Securities and Exchange Commission, the Fund may
effect principal transactions in certain money market instruments with DWR. The
Fund will limit its transactions with DWR to U.S. Government and Government
Agency Securities, Bank Money Instruments (i.e., Certificates of Deposit and
Bankers' Acceptances) and Commercial Paper. Such transactions will be effected
with DWR only when the price available from DWR is better than that available
from other dealers.
Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may be
effected through DWR and other affiliated brokers and dealers. In order for an
affiliated broker or dealer to effect any portfolio transactions for the Fund,
the commissions, fees or other remuneration received by the affiliated broker or
dealer must be reasonable and fair compared to the commissions, fees or other
remuneration paid to other brokers in connection with comparable transactions
involving similar securities being purchased or sold on an exchange during a
comparable period of time. This standard would allow the affiliated broker or
dealer to receive no more than the remuneration which would be expected to be
received by an unaffiliated broker in a commensurate arm's-length transaction.
Furthermore, the 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 an affiliated broker or dealer
are consistent with the foregoing standard. The Fund does not reduce the
management fee it pays to the Investment Manager by any amount of the brokerage
commissions it may pay to an affiliated broker or dealer. For the fiscal years
ended March 31,
31
<PAGE>
1995, 1996 and 1997, the Fund paid DWR approximately $211,050, $193,780 and
$169,351, respectively, in brokerage commissions. During the fiscal year ended
March 31, 1997, the brokerage commissions paid to DWR represented approximately
3.34% of the total brokerage commissions paid by the Fund during the period and
were paid on account of transactions having an aggregate dollar value equal to
approximately 10.11% of the aggregate dollar value of all portfolio transactions
of the Fund during the period for which commissions were paid.
At March 31, 1997, the Fund held common stock issued by Ford Motor Company,
which issuer was among the ten brokers or the ten dealers which executed
transactions for or with the Fund in the largest dollar amounts during the year,
with a market value of $45,964,375.
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. In addition, the Distributor may enter into selected
dealer agreements with other selected broker-dealers. The Distributor, a
Delaware corporation, is a wholly-owned subsidiary of MSDWD. The Trustees of the
Fund, including all of the Trustees who are not, and were not at the time they
voted, interested persons of the Fund, as defined in the Act (the "Independent
Trustees"), approved, at their meeting held on June 30, 1997, the current
Distribution Agreement (the "Distribution Agreement") appointing the Distributor
as exclusive distributor of the Fund's shares and providing for the Distributor
to bear distribution expenses not borne by the Fund. By its terms, the current
Distribution Agreement has an initial term ending April 30, 1998, and will
remain in effect from year to year thereafter if approved by the Board.
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 and pays filing fees in
accordance with state securities laws. The Fund and the Distributor have agreed
to indemnify each other against certain liabilities, including liabilities under
the Securities Act 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
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act (the "Plan") pursuant to which each Class, other than Class D, pays the
Distributor compensation accrued daily and payable monthly at the following
annual rates: 0.25% and 1.0% of the average daily net assets of Class A and
Class C, respectively, and, with respect to Class B, 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Fund's Class B shares since the
inception of the Fund (not including reinvestments of dividends or capital gains
distributions), less the average daily aggregate net asset value of the Fund's
Class B shares redeemed since the Fund's inception upon which a contingent
deferred sales charge has been imposed or upon which such charge has been
waived, or (b) the average daily net assets of Class B. The Distributor also
receives the proceeds of front-end sales charges and of contingent deferred
sales charges imposed on certain redemptions of shares, which are separate and
apart from payments made pursuant to the Plan (see "Purchase of Fund Shares" in
the Prospectus). The Distributor has informed the Fund that it received
approximately $3,427,309,
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<PAGE>
$4,167,097 and $3,916,777 in contingent deferred sales charges for the fiscal
years ended March 31, 1995, 1996 and 1997, respectively.
The Distributor has informed the Fund that the entire fee payable by Class A
and a portion of the fees payable by each of Class B and Class C each year
pursuant to the Plan equal to 0.25% of such Class's average annual net assets
are currently each characterized as a "service fee" under the Rules of the
Association of the National Association of Securities Dealers Inc. (of which the
Distributor is a member). The "service fee" is a payment made for personal
service and/or the maintenance of shareholder accounts. The remaining portion of
the Plan fees payable by a Class, if any, is characterized as an "asset-based
sales charge" as such is defined by the aforementioned Rules of the Association.
The Plan was originally adopted by a majority vote of the Trustees of the
Fund, including all of the Independent Trustees (none of whom had or have any
direct or indirect financial interest in the operation of the Plan) (the
"Independent 12b-1 Trustees"), cast in person at a meeting of the Trustees
called for the purpose of voting on such Plan at their Meeting held on April 28,
1993. In making their decision to adopt the Plan, the Trustees requested from
the Distributor and received such information as they deemed necessary to make
an informed determination as to whether or not adoption of the Plan was in the
best interests of the shareholders of the Fund. After due consideration of the
information received, the Trustees, including the Independent 12b-1 Trustees,
determined that adoption of the Plan would benefit the shareholders of the Fund.
InterCapital, as sole shareholder of the Fund, approved the Plan on April 28,
1993, whereupon the Plan went into effect. At their meeting held on October 26,
1995, the Trustees of the Fund, including all of the independent 12b-1 Trustees,
approved an amendment to the Plan to permit payments to be made under the Plan
with respect to certain distribution expenses incurred in connection with the
distribution of shares, including personal services to shareholders with respect
to holdings of such shares, of an investment company whose assets are acquired
by the Fund in a tax-free reorganization. At their meeting held on June 30,
1997, the Trustees, including a majority of the Independent 12b-1 Trustees,
approved amendments to the Plan to reflect the multiple-class structure for the
Fund, which took effect on July 28, 1997.
Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each fiscal quarter a written report provided
by the Distributor of the amounts expended by the Distributor under the Plan and
the purpose for which such expenditures were made. The Fund accrued $22,941,076
payable to the Distributor, pursuant to the Plan, for the fiscal year ended
March 31, 1997. This is an accrual at an annual rate of 0.84% of the average
daily net assets of the Fund. This amount is treated by the Fund as an expense
in the year it is accrued. This amount represents amounts paid by Class B only;
there were no Class A or Class C shares outstanding on such date.
The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method the Fund offers four
Classes of shares, each with a different distribution arrangement as set forth
in the Prospectus.
With respect to Class A shares, DWR compensates its account executives by
paying them, from proceeds of the front-end sales charge, commissions for the
sale of Class A shares, currently a gross sales credit of up to 5.0% of the
amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value of
the respective accounts for which they are the account executives or dealers of
record in all cases. On orders of $1 million or more (for which no sales charge
was paid) or net asset value purchases by 401(k) plans or other
employer-sponsored plans qualified under Section 401(a) of the Internal Revenue
Code for which Dean Witter Trust Company ("DWTC") or Dean Witter Trust FSB
("DWTFSB") serves as Trustee or the 401(k) Support Services Group of DWR serves
as recordkeeper, the Investment Manager compensates DWR's account executives by
paying them, from its own funds, a gross sales credit of 1.0% of the amount
sold.
With respect to Class B shares, DWR compensates its account executives by
paying them, from its own funds, commissions for the sale of Class B shares,
currently a gross sales credit of up to 5.0% of the amount sold (except as
provided in the following sentence) and an annual residual commission,
33
<PAGE>
currently a residual of up to 0.25% of the current value (not including
reinvested dividends or distributions) of the amount sold in all cases. In the
case of retirement plans qualified under Section 401(k) of the Internal Revenue
Code and other employer-sponsored plans qualified under Section 401(a) of the
Internal Revenue Code for which DWTC or DWTFSB serves as Trustee or the 401(k)
Support Services Group of DWR serves as recordkeeper, and which plans are opened
on or after July 28, 1997, DWR compensates its account executives by paying
them, from its own funds, a gross sales credit of 3.0% of the amount sold.
With respect to Class C shares, DWR compensates its account executives by
paying them, from its own funds, commissions for the sale of Class C shares,
currently a gross sales credit of up to 1.0% of the amount sold and an annual
residual commission, currently a residual of up to 1.0% of the current value of
the respective accounts for which they are the account executives of record.
With respect to Class D shares other than shares held by participants in
InterCapital's mutual fund asset allocation program, the Investment Manager
compensates DWR's account executives by paying them, from its own funds,
commissions for the sale of Class D shares, currently a gross sales credit of up
to 1.0% of the amount sold. There is a chargeback of 100% of the amount paid if
the Class D shares are redeemed in the first year and a chargeback of 50% of the
amount paid if the Class D shares are redeemed in the second year after
purchase. The Investment Manager also compensates DWR's account executives by
paying them, from its own funds, an annual residual commission, currently a
residual of up to 0.10% of the current value of the respective accounts for
which they are the account executives of record (not including accounts of
participants in the InterCapital mutual fund asset allocation program).
The gross sales credit is a charge which reflects commissions paid by DWR to
its account executives and DWR's Fund-associated distribution-related expenses,
including sales compensation, and overhead and other branch office
distribution-related expenses including (a) the expenses of operating DWR's
branch offices in connection with the sale of Fund shares, including lease
costs, the salaries and employee benefits of operations and sales support
personnel, utility costs, communications costs and the costs of stationery and
supplies, (b) the costs of client sales seminars, (c) travel expenses of mutual
fund sales coordinators to promote the sale of Fund shares and (d) other
expenses relating to branch promotion of Fund sales. The distribution fee that
the Distributor receives from the Fund under the Plan, in effect, offsets
distribution expenses incurred under the Plan on behalf of the Fund and, in the
case of Class B shares, opportunity costs, such as the gross sales credit and an
assumed interest charge thereon ("carrying charge"). In the Distributor's
reporting of the distribution expenses to the Fund, in the case of Class B
shares, such assumed interest (computed at the "broker's call rate") has been
calculated on the gross credit as it is reduced by amounts received by the
Distributor under the Plan and any contingent deferred sales charges received by
the Distributor upon redemption of shares of the Fund. No other interest charge
is included as a distribution expense in the Distributor's calculation of its
distribution costs for this purpose. The broker's call rate is the interest rate
charged to securities brokers on loans secured by exchange-listed securities.
The Fund paid 100% of the $22,941,076 accrued under the Plan for the period
ended March 31, 1997, to the Distributor. The Distributor and DWR estimate that
they have spent, pursuant to the Plan, $144,185,734 on behalf of the Fund since
the inception of the Plan. It is estimated that this amount was spent in
approximately the following ways: (i) 2.57% ($3,705,437)--advertising and
promotional expenses; (ii) 0.19% ($271,122)--printing of prospectuses for
distribution to other than current shareholders; and (iii) 97.24%
($140,209,175)--other expenses, including the gross sales credit and the
carrying charge, of which 6.79% ($9,518,980) represents carrying charges, 37.65%
($52,785,769) represents commission credits to DWR branch offices for payments
of commissions to account executives and 55.56% ($77,904,425) represents
overhead and other branch office distribution-related expenses. These amounts
represent amounts paid by Class B only; there were no Class A or Class C shares
outstanding on such date.
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<PAGE>
The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments at
the end of each month. The amount of each monthly payment may in no event exceed
an amount equal to a payment at the annual rate of 0.25%, in the case of Class
A, and 1.0%, in the case of Class C, of the average net assets of the respective
Class during the month. No interest or other financing charges, if any, incurred
on any distribution expenses on behalf of Class A and Class C will be
reimbursable under the Plan. With respect to Class A, in the case of all
expenses other than expenses representing the service fee, and, with respect to
Class C, in the case of all expenses other than expenses representing a gross
sales credit or a residual to account executives, such amounts shall be
determined at the beginning of each calendar quarter by the Trustees, including
a majority of the Independent 12b-1 Trustees. Expenses representing the service
fee (for Class A) or a gross sales credit or a residual to account executives
(for Class C) may be reimbursed without prior determination. In the event that
the Distributor proposes that monies shall be reimbursed for other than such
expenses, then in making quarterly determinations of the amounts that may be
reimbursed by the Fund, the Distributor will provide and the Trustees will
review a quarterly budget of projected distribution expenses to be incurred on
behalf of the Fund, together with a report explaining the purposes and
anticipated benefits of incurring such expenses. The Trustees will determine
which particular expenses, and the portions thereof, that may be borne by the
Fund, and in making such a determination shall consider the scope of the
Distributor's commitment to promoting the distribution of the Fund's Class A and
Class C shares.
At any given time, the expenses in distributing shares of the Fund may be
more or less than the total of (i) the payments made by the Fund pursuant to the
Plan and (ii) the proceeds of contingent deferred sales charges paid by
investors upon redemption of shares. The Distributor has advised the Fund that
in the case of Class B shares the excess amount, including the carrying charge
designed to approximate the opportunity costs incurred which arise from it
having advanced monies without having received the amount of any sales charges
imposed at the time of sale of the Fund's Class B shares, totalled $69,361,411
as of March 31, 1997. Because there is no requirement under the Plan that the
Distributor be reimbursed for all expenses with respect to Class B shares or any
requirement that the Plan be continued from year to year, this excess amount
does not constitute a liability of the Fund. Although there is no legal
obligation for the Fund to pay distribution expenses in excess of payments made
under the Plan and the proceeds of contingent deferred sales charges paid by
investors upon redemption of shares, if for any reason the Plan is terminated,
the Trustees will consider at that time the manner in which to treat such
expenses. Any cumulative expenses incurred, but not yet recovered through
distribution fees or contingent deferred sales charges, may or may not be
recovered through future distribution fees or contingent deferred sales charges.
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 the
Distributor, InterCapital, DWSC, DWR 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.
Under its terms, the Plan had an initial term ending April 30, 1994 and will
remain in effect from year to year thereafter, provided such continuance is
approved annually by a vote of the Trustees in the manner described above. Prior
to the Board's approval of amendments to the Plan to reflect the multiple-class
structure for the Fund, the most recent continuance of the Plan for one year,
until April 30, 1998, was approved by the Trustees of the Fund, including a
majority of the Independent 12b-1 Trustees, at their meeting held on April 24,
1997. Prior to approving the continuation of the Plan, the Trustees requested
and received from the Distributor and reviewed all the information which they
deemed necessary to arrive at an informed determination. In making their
determination to continue the Plan, the Trustees considered: (1) the Fund's
experience under the Plan and whether such experience indicates that the Plan is
operating as anticipated; (2) the benefits the Fund had obtained, was obtaining
and would be likely to obtain under the Plan; and (3) what services had been
provided and were continuing to be provided under the Plan by the Distributor to
the Fund and its stockholders. Based upon their
35
<PAGE>
review, the Trustees of the Fund, including each of the Independent 12b-1
Trustees, determined that continuation of the Plan would be in the best interest
of the Fund and would have a reasonable likelihood of continuing to benefit the
Fund and its shareholders. In the Trustees' quarterly review of the Plan, they
will consider its continued appropriateness and the level of compensation
provided therein.
The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval of the shareholders of the
affected Class or Classes of the Fund, and all material amendments of the Plan
must also be approved by the Trustees in the manner described above. The Plan
may be terminated at any time, without payment of any penalty, by vote of a
majority of the Independent 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the Act) on not more
than thirty days' written notice to any other party to the Plan. So long as the
Plan is in effect, the election and nomination of Independent Trustees shall be
committed to the discretion of the Independent Trustees.
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share for each Class of shares 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, Reverend Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
As stated in the Prospectus, short-term 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.
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
As discussed in the Prospectus, the Fund offers four Classes of shares as
follows:
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
Class A shares are sold to investors with an initial sales charge that
declines to zero for larger purchases; however, Class A shares sold without an
initial sales charge are subject to a contingent deferred sales charge ("CDSC")
of 1.0% if redeemed within one year of purchase, except in the circumstances
discussed in the Prospectus.
RIGHT OF ACCUMULATION. As discussed in the Prospectus, investors may
combine the current value of shares purchased in separate transactions for
purposes of benefitting from the reduced sales charges available for purchases
of shares of the Fund totalling at least $25,000 in net asset value. For
example, if any person or entity who qualifies for this privilege holds Class A
shares of the Fund and/or other Dean Witter Funds that are multiple class funds
("Dean Witter Multi-Class Funds") or shares of other Dean
36
<PAGE>
Witter Funds sold with a front-end sales charge purchased at a price including a
front-end sales charge having a current value of $5,000, and purchases $20,000
of additional shares of the Fund, the sales charge applicable to the $20,000
purchase would be 4.75% of the offering price.
The Distributor must be notified by the selected broker-dealer or the
shareholder at the time a purchase order is placed that the purchase qualifies
for the reduced charge under the Right of Accumulation. Similar notification
must be made in writing by the selected broker-dealer or shareholder when such
an order is placed by mail. The reduced sales charge will not be granted if: (a)
such notification is not furnished at the time of the order; or (b) a review of
the records of the Distributor or Dean Witter Trust Company (the "Transfer
Agent") fails to confirm the investor's represented holdings.
LETTER OF INTENT. As discussed in the Prospectus, reduced sales charges are
available to investors who enter into a written Letter of Intent providing for
the purchase, within a thirteen-month period, of Class A shares of the Fund from
the Distributor or from a single Selected Broker-Dealer.
A Letter of Intent permits an investor to establish a total investment goal
to be achieved by any number of purchases over a thirteen-month period. Each
purchase of Class A shares made during the period will receive the reduced sales
commission applicable to the amount represented by the goal, as if it were a
single purchase. A number of shares equal in value to 5% of the dollar amount of
the Letter of Intent will be held in escrow by the Transfer Agent, in the name
of the shareholder. The initial purchase under a Letter of Intent must be equal
to at least 5% of the stated investment goal.
The Letter of Intent does not obligate the investor to purchase, nor the
Fund to sell, the indicated amount. In the event the Letter of Intent goal is
not achieved within the thirteen-month period, the investor is required to pay
the difference between the sales charge otherwise applicable to the purchases
made during this period and sales charges actually paid. Such payment may be
made directly to the Distributor or, if not paid, the Distributor is authorized
by the shareholder to liquidate a sufficient number of his or her escrowed
shares to obtain such difference.
If the goal is exceeded and purchases pass the next sales charge level, the
sales charge on the entire amount of the purchase that results in passing that
level and on subsequent purchases will be subject to further reduced sales
charges in the same manner as set forth above under "Right of Accumulation," but
there will be no retroactive reduction of sales charges on previous purchases.
For the purpose of determining whether the investor is entitled to a further
reduced sales charge applicable to purchases at or above a sales charge level
which exceeds the stated goal of a Letter of Intent, the cumulative current net
asset value of any shares owned by the investor in any other Dean Witter Funds
held by the shareholder which were previously purchased at a price including a
front-end sales charge (including shares of the Fund and other Dean Witter Funds
acquired in exchange for those shares, and including in each case shares
acquired through reinvestment of dividends and distributions) will be added to
the cost or net asset value of shares of the Fund owned by the investor.
However, shares of "Exchange Funds" (see "Shareholder Services--Exchange
Privilege") and the purchase of shares of other Dean Witter Funds will not be
included in determining whether the stated goal of a Letter of Intent has been
reached.
At any time while a Letter of Intent is in effect, a shareholder may, by
written notice to the Distributor, increase the amount of the stated goal. In
that event, only shares purchased during the previous 90-day period and still
owned by the shareholder will be included in the new sales charge reduction. The
5% escrow and minimum purchase requirements will be applicable to the new stated
goal. Investors electing to purchase shares of the Fund pursuant to a Letter of
Intent should carefully read such Letter of Intent.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES
Class B shares are sold without an initial sales charge but are subject to a
CDSC payable upon most redemptions within six years after purchase. As stated in
the Prospectus, a CDSC will be imposed on any redemption by an investor if after
such redemption the current value of the investor's Class B shares of the Fund
is less than the dollar amount of all payments by the shareholder for the
purchase of Class B
37
<PAGE>
shares during the preceding six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years). However, no CDSC will be imposed
to the extent that the net asset value of the shares redeemed does not exceed:
(a) the current net asset value of shares purchased more than six years (or, in
the case of shares held by certain employer-sponsored benefit plans, three
years) prior to the redemption, plus (b) the current net asset value of shares
purchased through reinvestment of dividends or distributions of the Fund or
another Dean Witter Fund (see "Shareholder Services-- Targeted Dividends"), plus
(c) the current net asset value of shares acquired in exchange for (i) shares of
Dean Witter front-end sales charge funds, or (ii) shares of other Dean Witter
Funds for which shares of front-end sales charge funds have been exchanged (see
"Shareholder Services--Exchange Privilege"), plus (d) increases in the net asset
value of the investor's shares above the total amount of payments for the
purchase of Fund shares made during the preceding six (three) years. The CDSC
will be paid to the Distributor. [In addition, no CDSC will be imposed on
redemptions of shares which are attributable to reinvestment of dividends or
distributions from, or the proceeds of, certain Unit Investment Trusts.]
In determining the applicability of the CDSC to each redemption, the amount
which represents an increase in the net asset value of the investor's shares
above the amount of the total payments for the purchase of shares within the
last six years (or, in the case of shares held by certain employer-sponsored
benefit plans, three years) will be redeemed first. In the event the redemption
amount exceeds such increase in value, the next portion of the amount redeemed
will be the amount which represents the net asset value of the investor's shares
purchased more than six (three) years prior to the redemption and/or shares
purchased through reinvestment of dividends or distributions and/or shares
acquired in exchange for shares of Dean Witter front-end sales charge funds, or
for shares of other Dean Witter funds for which shares of front-end sales charge
funds have been exchanged. A portion of the amount redeemed which exceeds an
amount which represents both such increase in value and the value of shares
purchased more than six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years) prior to the redemption and/or
shares purchased through reinvestment of dividends or distributions and/or
shares acquired in the above-described exchanges will be subject to a CDSC.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of Class B shares of the Fund until
the time of redemption of such shares. For purposes of determining the number of
years from the time of any payment for the purchase of shares, all payments made
during a month will be aggregated and deemed to have been made on the last day
of the month. The following table sets forth the rates of the CDSC applicable to
most Class B shares of the Fund:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- ------------------------------------------------------------------------------------------ --------------------------
<S> <C>
First..................................................................................... 5.0%
Second.................................................................................... 4.0%
Third..................................................................................... 3.0%
Fourth.................................................................................... 2.0%
Fifth..................................................................................... 2.0%
Sixth..................................................................................... 1.0%
Seventh and thereafter.................................................................... None
</TABLE>
The following table sets forth the rates of the CDSC applicable to Class B
shares of the Fund held by 401(k) plans or other employer-sponsored plans
qualified under Section 401(a) of the Internal Revenue
38
<PAGE>
Code for which DWTC or DWTFSB serves as Trustee or the 401(k) Support Services
Group of DWR serves as recordkeeper and whose accounts are opened on or after
July 28, 1997:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- ------------------------------------------------------------------------------------------ --------------------------
<S> <C>
First..................................................................................... 2.0%
Second.................................................................................... 2.0%
Third..................................................................................... 1.0%
Fourth and thereafter..................................................................... None
</TABLE>
In determining the rate of the CDSC, it will be assumed that a redemption is
made of shares held by the investor for the longest period of time within the
applicable six-year or three-year period. This will result in any such CDSC
being imposed at the lowest possible rate. The CDSC will be imposed, in
accordance with the table shown above, on any redemptions within six years (or,
in the case of shares held by certain employer-sponsored benefit plans, three
years) of purchase which are in excess of these amounts and which redemptions do
not qualify for waiver of the CDSC, as described in the Prospectus.
LEVEL LOAD ALTERNATIVE--CLASS C SHARES
Class C shares are sold without a sales charge but are subject to a CDSC of
1.0% on most redemptions made within one year after purchase, except in the
circumstances discussed in the Prospectus.
NO LOAD ALTERNATIVE--CLASS D SHARES
Class D shares are offered without any sales charge on purchase or
redemption. Class D shares are offered only to those persons meeting the
qualifications set forth in the Prospectus.
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
Upon the purchase of shares of the Fund, a Shareholder Investment Account is
opened for the investor on the books of the Fund and maintained by the Transfer
Agent. 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. Whenever a shareholder-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 other selected broker-dealer.
INVESTMENT OF DIVIDENDS OR DISTRIBUTIONS RECEIVED IN CASH. As discussed in
the Prospectus, any shareholder who receives a cash payment representing a
dividend or distribution may invest such dividend or distribution in shares of
the applicable Class at the net asset value next determined after receipt by the
Transfer Agent, without the imposition of a CDSC upon redemption, 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 proceeds by the Transfer Agent.
AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. As stated in the
Prospectus, all income dividends and capital gains distributions are
automatically paid in full and fractional shares of the applicable Class 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, at the net asset value per share, in
shares of the applicable Class 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
39
<PAGE>
subsequent dividends and/or capital gains distributions paid to him or her in
cash rather than shares. To assure sufficient time to process the change, such
request should be received by the Transfer Agent as 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 the Distributor,
which will be forwarded to the shareholder, upon the receipt of proper
instructions.
TARGETED DIVIDENDS-SM-. In states where it is legally permissible,
shareholders may also have all income dividends and capital gains distributions
automatically invested in shares of any Class of an open-end Dean Witter Fund
other than Dean Witter Global Dividend Growth Securities or in another Class of
Dean Witter Global Dividend Growth Securities. Such investment will be made as
described above for automatic investment in shares of the applicable Class of
the Fund, at the net asset value per share of the selected Dean Witter Fund as
of the close of business on the payment date of the dividend or distribution and
will begin to earn dividends, if any, in the selected Dean Witter Fund 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
selected Class of the Dean Witter Fund targeted to receive investments from
dividends at the time they enter the Targeted Dividends program. Investors
should review the prospectus of the targeted Dean Witter Fund before entering
the program.
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 or following
redemption of shares of a Dean Witter money market fund, 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.
SYSTEMATIC WITHDRAWAL PLAN. As discussed in the Prospectus, 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. Any applicable CDSC will be imposed on shares redeemed under
the Withdrawal Plan (see "Purchase of Fund Shares" in the Prospectus).
Therefore, any shareholder participating in the Withdrawal Plan will have
sufficient shares redeemed from his or her account so that the proceeds (net of
any applicable CDSC) to the shareholder will be the designated monthly or
quarterly amount.
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, or amounts credited to a shareholder's DWR or other
selected broker-dealer brokerage account within five business days after the
date of redemption. The Withdrawal Plan may be terminated at any time by the
Fund.
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. Although the
shareholder may make additional investments of $2,500 or more under the
Withdrawal Plan, withdrawals made concurrently with purchases of additional
shares may be inadvisable because of the sales charges which may be applicable
to purchases or redemptions of shares (see "Purchase of Fund Shares").
40
<PAGE>
Any shareholder who wishes to have payments under the Withdrawal Plan made
to a third party or sent to an address other than the one listed on the account
must send complete written instructions to the Transfer Agent to enroll in the
Withdrawal Plan. The shareholder's signature on such instructions 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 shareholder
may, at any time, change the amount and interval of withdrawal payments through
his or her account executive or by written notification to the Transfer Agent.
In addition, the party and/or the address to which checks are mailed may be
changed by written notification to the Transfer Agent, with signature guarantees
required in the manner described above. The shareholder may also terminate the
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 regular
shareholder investment account. The shareholder may also redeem all or part of
the shares held in the Withdrawal Plan account (see "Redemptions and
Repurchases" in the Prospectus) at any time. Shareholders wishing to enroll in
the Withdrawal Plan should contact their account executive or the Transfer
Agent.
DIRECT INVESTMENTS THROUGH TRANSFER AGENT. As discussed in the Prospectus,
shareholders may make additional investments in any Class of shares of the Fund
for which they qualify at any time by sending a check in any amount, not less
than $100, payable to Dean Witter Global Dividend Growth Securities, and
indicating the selected Class, directly to the Fund's Transfer Agent. In the
case of Class A shares, after deduction of any applicable sales charge, the
balance will be applied to the purchase of Fund shares, and, in the case of
shares of the other Classes, the entire amount will be applied to the purchase
of Fund shares, at the net asset value per share next computed after receipt of
the check or purchase payment by the Transfer Agent. The shares so purchased
will be credited to the investor's account.
EXCHANGE PRIVILEGE
As discussed in the Prospectus, the Fund makes available to its shareholders
an Exchange Privilege whereby shareholders of each Class of shares of the Fund
may exchange their shares for shares of the same Class of shares of any other
Dean Witter Multi-Class Fund without the imposition of any exchange fee. Shares
may also be exchanged for shares of any of the following funds: Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean
Witter Short-Term Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust
and five Dean Witter Funds which are money market funds (the foregoing nine
funds are hereinafter referred to as the "Exchange Funds"). Class A shares may
also be exchanged for shares of Dean Witter Multi-State Municipal Series Trust
and Dean Witter Hawaii Municipal Trust, which are Dean Witter Funds sold with a
front-end sales charge ("FSC Funds"). Class B shares may also be exchanged for
shares of Dean Witter Global Short-Term Income Fund Inc., Dean Witter High
Income Securities and Dean Witter National Municipal Trust, which are Dean
Witter Funds offered with a CDSC ("CDSC Funds"). Exchanges may be made after the
shares of the 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. 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.
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.)
As described below, and in the Prospectus under the caption "Purchase of
Fund Shares," a CDSC may be imposed upon a redemption, depending on a number of
factors, including the number of years from the time of purchase until the time
of redemption or exchange ("holding period"). When shares of a
41
<PAGE>
Dean Witter Multi-Class Fund or 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 Exchange 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 Dean Witter Multi-Class
Fund or in a CDSC Fund. However, in the case of shares exchanged into an
Exchange Fund on or after April 23, 1990, 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
incurred on or after that date 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 Dean Witter Multi-Class Fund or
a CDSC Fund from the Exchange Fund, 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
Dean Witter Multi-Class Fund or of a CDSC Fund are reacquired. A CDSC is imposed
only upon an ultimate redemption, based upon the time (calculated as described
above) the shareholder was invested in a Dean Witter Multi-Class Fund or in a
CDSC Fund. In the case of exchanges of Class A shares which are subject to a
CDSC, the holding period also includes the time (calculated as described above)
the shareholder was invested in a FSC Fund.
When shares initially purchased in a Dean Witter Multi-Class Fund or in a
CDSC Fund are exchanged for shares of a Dean Witter Multi-Class Fund, shares of
a CDSC Fund, shares of a FSC Fund, or 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 one, three or six years (depending on the CDSC schedule applicable to the
shares) prior to the exchange, (ii) originally acquired through reinvestment of
dividends or distributions and (iii) acquired in exchange for shares of a FSC
Fund, or for shares of other Dean Witter Funds for which shares of a FSC Fund,
have been exchanged (all such shares called "Free Shares"), will be exchanged
first. After an exchange, all dividends earned on shares in an 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 (except that with respect to Class B
shares, if shares held for identical periods of time but subject to different
CDSC schedules are held in the same Exchange Privilege account, the shares of
that block that are subject to a lower CDSC rate will be exchanged prior to the
shares of that block that are subject to a higher CDSC rate). 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 Prospectus under the caption
"Purchase of Fund Shares," 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.
42
<PAGE>
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, if any, in the performance of such functions. With
respect to exchanges, redemptions or repurchases, the Transfer Agent shall be
liable for its own negligence and not for the default or negligence of its
correspondents or for losses in transit. The Fund shall not be liable for any
default or negligence of the Transfer Agent, the Distributor or any selected
broker-dealer.
The Distributor and all selected broker-dealers 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
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.
Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment for the
Exchange Privilege account of each Class 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 the Exchange Privilege
account of each Class is $5,000 for Dean Witter Special Value Fund. The minimum
investment for the Exchange Privilege account of each Class is $10,000 for Dean
Witter Short-Term U.S. Treasury Trust, although that fund, in its discretion,
may accept initial purchases as low as $5,000. The minimum initial investment
for the Exchange Privilege account of each Class for all other Dean Witter Funds
for which the Exchange Privilege is available is $1,000.) Upon exchange into an
Exchange 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 those funds, including the check writing
feature, will not be available for funds held in that account.
The Fund and each of the other Dean Witter 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 the Fund and/or any of the Dean Witter Funds for which
shares of the Fund have been exchanged, upon such notice as may be required by
applicable regulatory agencies (presently sixty days' prior written notice 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 the Exchange Privilege, and provided further that
the Exchange Privilege may be terminated or materially revised without notice 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, policies and restrictions.
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. 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.
43
<PAGE>
For further information regarding the Exchange Privilege, shareholders
should contact their DWR or other selected broker-dealer account executive or
the Transfer Agent.
REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------------
REDEMPTION. As stated in the Prospectus, shares of each Class of the Fund
can be redeemed for cash at any time at the net asset value per share next
determined; however, such redemption proceeds will be reduced by the amount of
any applicable CDSC (see below). If shares are held in a shareholder's account
without a share certificate, a written request for redemption to the Fund's
Transfer Agent at P.O. Box 983, Jersey City, NJ 07303 is required. If
certificates are held by the shareholder, the shares may be redeemed by
surrendering the certificates with a written request for redemption. 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 computed (see "Purchase of Fund Shares")
after it receives the request, and certificate, if any, in good order. Any
redemption request received after such computation 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.
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
the Distributor or a selected broker-dealer for the account of the shareholder),
partnership, trust or fiduciary, or sent to a shareholder at an address other
than the registered address, signatures must be guaranteed by 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 supplement to the prospectus or a
new prospectus.
REPURCHASE. As stated in the Prospectus, 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 computed after
such purchase order is received by DWR or other selected broker-dealer reduced
by any applicable CDSC.
PAYMENT FOR SHARES REDEEMED OR REPURCHASED. As discussed in the Prospectus,
payment for shares of any Class 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. 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. 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, (including a
certified check or bank cashier's 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
44
<PAGE>
maintaining 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.
TRANSFERS OF SHARES. In the event a shareholder requests a transfer of any
shares to a new registration, such shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to the CDSC or free of such charge (and with regard to the length
of time shares subject to the charge have been held), any transfer involving
less than all of the shares in an account will be made on a pro-rata basis (that
is, by transferring shares in the same proportion that the transferred shares
bear to the total shares in the account immediately prior to the transfer). The
transferred shares will continue to be subject to any applicable CDSC as if they
had not been so transferred.
REINSTATEMENT PRIVILEGE. As discussed in the Prospectus, a shareholder who
has had his or her shares redeemed or repurchased and has not previously
exercised this reinstatement privilege may within 35 days after the date of
redemption or repurchase reinstate any portion or all of the proceeds of such
redemption or repurchase in shares of the Fund in the same Class at the net
asset value next determined after a reinstatement request, together with such
proceeds, is received by the Transfer Agent.
Exercise of the reinstatement privilege will not affect the federal income
tax treatment of any gain or loss realized upon the redemption or repurchase,
except that if the redemption or repurchase resulted in a loss and reinstatement
is made in shares of the Fund, some or all of the loss, depending on the amount
reinstated, will not be allowed as a deduction for federal income tax purposes,
but will be applied to adjust the cost basis of the shares acquired upon
reinstatement.
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, if the Fund makes an election, the shareholders would include
such undistributed gains in their income and shareholders will be able to claim
their share of the tax paid by the Fund as a credit against their individual
federal income tax.
Gains or losses on sales of securities by the Fund will generally 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 generally short-term capital gains or losses.
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). If
so qualified, the Fund will not be subject to federal income tax on its net
investment income and capital gains, if any, realized during any fiscal year in
which it distributes such income and capital gains to its shareholders. In
addition, the Fund intends to distribute to its shareholders each calendar year
a sufficient amount of ordinary income and capital gains to avoid the imposition
of a 4% excise tax.
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. Therefore, an investor should consider the
tax implications of purchasing Fund shares immediately prior to a distribution
record date.
45
<PAGE>
Any loss realized by shareholders upon a redemption of shares within six
months of the date of their purchase will be treated as a long-term capital loss
to the extent of any distributions of net long-term capital gains during the
six-month period.
Dividends, interest and capital gains received by the Fund may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Investors may be entitled to claim United States foreign tax credits or
deductions with respect to such taxes, subject to certain provisions and
limitations contained in the Code. If more than 50% of the Fund's total assets
at the close of its fiscal year consist of securities of foreign corporations,
the Fund would be eligible and would determine whether or not to file an
election with the Internal Revenue Service pursuant to which shareholders of the
Fund will be required to include their respective pro rata portions of such
withholding taxes in their United States income tax returns as gross income,
treat such respective pro rata portions as taxes paid by them, and deduct such
respective pro rata portions in computing their taxable income or,
alternatively, use them as foreign tax credits against their United States
income taxes. If the Fund does elect to file the election with the Internal
Revenue Service, the Fund will report annually to its shareholders the amount
per share of such withholding.
SPECIAL RULES FOR CERTAIN FOREIGN CURRENCY TRANSACTIONS. In general, gains
from foreign currencies and from foreign currency options, foreign currency
futures and forward foreign exchange contracts relating to investments in stock,
securities or foreign currencies are currently considered to be qualifying
income for purposes of determining whether the Fund qualifies as a regulated
investment company. It is currently unclear, however, who will be treated as the
issuer of certain foreign currency instruments or how foreign currency options,
futures, or forward foreign currency contracts will be valued for purposes of
the regulated investment company diversification requirements applicable to the
Fund. The Fund may request a private letter ruling from the Internal Revenue
Service on some or all of these issues.
Under Code Section 988, special rules are provided for certain transactions
in a foreign currency other than the taxpayer's functional currency (I.E.,
unless certain special rules apply, currencies other than the U.S. dollar). In
general, foreign currency gains or losses from forward contracts, from futures
contracts that are not "regulated futures contracts," and from unlisted options
will be treated as ordinary income or loss under Code Section 988. Also, certain
foreign exchange gains or losses derived with respect to foreign fixed-income
securities are also subject to Section 988 treatment. In general, therefore,
Code Section 988 gains or losses will increase or decrease the amount of the
Fund's investment company taxable income available to be distributed to
shareholders as ordinary income, rather than increasing or decreasing the amount
of the Fund's net capital gain. Additionally, if Code Section 988 losses exceed
other investment company taxable income during a taxable year, the Fund would
not be able to make any ordinary dividend distributions.
If the Fund invests in an entity which is classified as a "passive foreign
investment company" ("PFIC") for U.S. tax purposes, the application of certain
technical tax provisions applying to such companies could result in the
imposition of federal income tax with respect to such investments at the Fund
level which could not be eliminated by distributions to shareholders. It is not
anticipated that any taxes on the Fund with respect to investments in PFIC's
would be significant.
Shareholders are urged to consult their attorneys or tax advisers regarding
specific questions as to federal, state or local taxes.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
As discussed in the Prospectus, from time to time the Fund may quote its
"total return" in advertisements and sales literature. These figures are
computed separately for Class A, Class B, Class C and Class D shares. The Fund's
"average annual total return" represents an annualization of the Fund's total
return over a particular period and is computed by finding the annual percentage
rate which will result in the ending redeemable value of a hypothetical $1,000
investment made at the beginning of a one, five or
46
<PAGE>
ten year period, or for the period from the date of commencement of the Fund's
operations, if shorter than any of the foregoing. The ending redeemable value is
reduced by any CDSC at the end of the one, five or ten year or other period. For
the purpose of this calculation, it is assumed that all dividends and
distributions are reinvested. The formula for computing the average annual total
return involves a percentage obtained by dividing the ending redeemable value by
the amount of the initial investment, 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 return of the Fund for the fiscal year
ended March 31, 1997 and the period June 30, 1993 (commencement of operations)
through March 31, 1997 were 7.58% and 12.89%, respectively. These returns are
for Class B only; there were no other Classes of shares outstanding on such
date.
In addition to the foregoing, the Fund may advertise its total return for
each Class over different periods of time by means of aggregate, average,
year-by-year or other types of total return figures. Such calculations may or
may not reflect the imposition of the maximum front-end sales charge for Class A
or the deduction of the CDSC for each of Class B and Class C which, if
reflected, would reduce the performance quoted. For example, the average annual
total returns of the Fund may be calculated in the manner described above, but
without deduction for any applicable sales charge. Based on this calculation,
the average annual total return of the Fund for the fiscal year ended March 31,
1997 and the period June 30, 1993 through March 31, 1997 were 12.58% and 13.27%,
respectively. These returns are for Class B only; there were no other Classes of
shares outstanding on such date.
In addition, the Fund may compute its aggregate total return for each Class
for specified periods by determining the aggregate percentage rate which will
result in the ending value of a hypothetical $1,000 investment made at the
beginning of the period. For the purpose of this calculation, it is assumed that
all dividends and distributions are reinvested. The formula for computing
aggregate total return involves a percentage obtained by dividing the ending
value (without the reduction for any sales charge) by the initial $1,000
investment and subtracting 1 from the result. Based on the foregoing
calculation, the Fund's total return for the fiscal year ended March 31, 1997
and the period June 30, 1993 through March 31, 1997 were 12.58% and 59.58%,
respectively. These returns are for Class B only; there were no other Classes of
shares outstanding on such date.
The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1 to
the Fund's aggregate total return to date (expressed as a decimal and without
taking into account the effect of any applicable CDSC) and multiplying by
$9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as the
case may be. Investments of $10,000, $50,000 and $100,000 in the Fund at
inception would have grown to $15,958, $79,790 and $159,580, respectively, at
March 31, 1997. This information is for Class B only; there were no other
Classes of shares outstanding on such date.
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
- --------------------------------------------------------------------------------
As discussed in the Prospectus, the shareholders of the Fund are entitled to
a full vote for each full share held. All of the Trustees have been elected by
the shareholders of the Fund, most recently at a Special Meeting of Shareholders
held on May 21, 1997. On that date, Wayne E. Hedien was also elected as a
Trustee of the Fund, with his term to commence on September 1, 1997. 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 under certain
circumstances to remove the Trustees. The voting rights of
sharehold-
47
<PAGE>
ers 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.
The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust.
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. The Trustees have not presently authorized any such
additional series or classes of shares other than as set forth in the
Prospectus.
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 Fund, the risk to shareholders of personal liability is remote.
The Declaration of Trust further provides that no Trustee, officer, employee
or agent of the Fund is liable to the Fund or to a shareholder, nor is any
Trustee, officer, employee or agent liable to any third persons in connection
with the affairs of the Fund, except as such liability may arise from his/her or
its own bad faith, willful misfeasance, gross negligence, or reckless disregard
of his/her or its duties. It also provides that all third persons shall look
solely to the Fund'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 liability 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 Chase Manhattan Bank, One Chase Plaza, New York, New York 10005 is the
Custodian of the Fund's assets in the United States and around the world. As
Custodian, The Chase Manhattan Bank has contracted with various foreign banks
and depositaries to hold portfolio securities of non-U.S. issuers on behalf of
the Fund. 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 InterCapital Inc., the
Fund's Investment 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, 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 from the Fund.
48
<PAGE>
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, together with a report of its independent accountants,
will be sent to shareholders each year.
The Fund's fiscal year ends on March 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
- --------------------------------------------------------------------------------
Barry Fink, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Fund.
EXPERTS
- --------------------------------------------------------------------------------
The financial statements of the Fund included in this Statement of
Additional Information and incorporated by reference in the Prospectus has 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.
49
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS AND RIGHTS (97.1%)
AUSTRALIA (1.6%)
BANKING
1,910,000 Australia & New Zealand Banking
Group, Ltd.................... $ 12,122,465
-----------------
BUILDING & CONSTRUCTION
4,720,000 Pioneer International Ltd....... 16,287,311
-----------------
MULTI-INDUSTRY
1,717,000 Southcorp Holdings Ltd.......... 5,799,425
-----------------
PAPER & FOREST PRODUCTS
2,360,000 Amcor Ltd....................... 15,200,996
-----------------
TOTAL AUSTRALIA................. 49,410,197
-----------------
CANADA (2.9%)
BANKING
680,000 Toronto Dominion Bank........... 17,135,018
-----------------
NATURAL GAS
960,000 TransCanada Pipelines Ltd....... 17,432,491
-----------------
OIL RELATED
399,600 Imperial Oil Ltd................ 18,551,827
605,600 IPL Energy, Inc................. 17,446,527
-----------------
35,998,354
-----------------
TELECOMMUNICATIONS
376,000 BCE, Inc........................ 17,266,137
-----------------
TOTAL CANADA.................... 87,832,000
-----------------
FRANCE (7.6%)
BANKING
161,000 Societe Generale................ 18,763,372
-----------------
BUILDING MATERIALS
125,000 Compagnie de Saint-Gobain....... 18,862,912
290,000 Lafarge S.A..................... 20,021,608
-----------------
38,884,520
-----------------
FINANCIAL SERVICES
40,135 Societe Eurafrance S.A.......... 18,823,500
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOODS & BEVERAGES
119,000 Eridania Beghin-Say S.A......... $ 18,653,029
-----------------
MULTI-INDUSTRY
65,000 Compagnie Generale d'Industrie
et de Participations.......... 19,916,755
74,800 Saint-Louis..................... 19,064,329
286,943 Worms et Compagnie.............. 18,539,994
-----------------
57,521,078
-----------------
OIL INTEGRATED - INTERNATIONAL
192,200 Elf Aquitaine S.A............... 19,642,118
231,000 Total S.A. (B Shares)........... 19,920,988
-----------------
39,563,106
-----------------
TELECOMMUNICATIONS
163,000 Alcatel Alsthom................. 19,573,858
-----------------
TELEVISION
198,000 Societe Television Francaise
1............................. 19,743,890
-----------------
TOTAL FRANCE.................... 231,526,353
-----------------
GERMANY (6.7%)
BANKING
271,000 Deutsche Bank
Aktiengesellschaft............ 15,187,645
-----------------
BUILDING & CONSTRUCTION
375,500 Bilfinger & Berger Bau AG....... 14,634,527
-----------------
CHEMICALS
386,000 BASF AG......................... 14,513,876
356,000 Bayer AG........................ 14,745,688
-----------------
29,259,564
-----------------
ELECTRICAL EQUIPMENT
270,000 Siemens AG...................... 14,487,019
-----------------
MACHINERY - DIVERSIFIED
51,500 MAN AG.......................... 14,723,068
-----------------
MULTI-INDUSTRY
53,200 Preussag AG..................... 14,320,024
334,000 RWE AG.......................... 14,841,122
31,400 Viag AG......................... 14,767,651
-----------------
43,928,797
-----------------
RETAIL - DEPARTMENT STORES
42,100 Karstadt AG..................... 14,410,236
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
RETAIL - SPECIALTY
317,000 Douglas Holding AG.............. $ 11,711,310
-----------------
STEEL & IRON
65,000 Thyssen AG...................... 14,606,088
-----------------
TEXTILES - APPAREL
11,540 Hugo Boss AG (Pref.)............ 15,703,492
-----------------
UTILITIES - ELECTRIC
255,000 Veba AG......................... 14,374,664
-----------------
TOTAL GERMANY................... 203,026,410
-----------------
HONG KONG (3.9%)
BANKING
1,000,000 HSBC Holdings PLC............... 23,230,003
-----------------
CONGLOMERATES
3,195,000 Swire Pacific Ltd. (Class A).... 25,152,286
-----------------
REAL ESTATE
2,700,000 Cheung Kong (Holdings) Ltd...... 23,781,715
-----------------
TELECOMMUNICATIONS
13,390,000 Hong Kong Telecommunications
Ltd........................... 22,896,717
-----------------
UTILITIES - ELECTRIC
6,793,000 Hong Kong Electric Holdings
Ltd........................... 23,977,047
-----------------
TOTAL HONG KONG................. 119,037,768
-----------------
ITALY (4.0%)
FINANCIAL SERVICES
2,860,000 Istituto Mobiliare Italiano
SpA........................... 24,734,904
-----------------
OIL INTEGRATED - INTERNATIONAL
4,700,000 Ente Nazionale Idrocarburi
SpA........................... 23,766,408
-----------------
TELECOMMUNICATIONS
3,871,000 Sirti SpA....................... 23,870,397
11,550,000 Telecom Italia SpA.............. 24,498,956
-----------------
48,369,353
-----------------
TEXTILES - APPAREL
2,089,500 Benetton Group SpA.............. 25,869,406
-----------------
TOTAL ITALY..................... 122,740,071
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
JAPAN (25.2%)
AUTOMOTIVE
1,280,000 Honda Motor Co.................. $ 38,158,022
1,548,000 Toyota Motor Corp............... 39,143,965
-----------------
77,301,987
-----------------
BREWERS
4,615,000 Kirin Brewery Co., Ltd.......... 38,029,569
-----------------
BUILDING MATERIALS
3,845,000 Sekisui House Ltd............... 37,586,444
-----------------
COMPUTER SERVICES
2,572,000 NCR Japan Ltd................... 19,635,967
-----------------
ELECTRONICS & ELECTRICAL
4,385,000 Hitachi, Ltd.................... 38,968,331
675,000 Kyocera Corp.................... 38,281,629
2,445,000 Matsushita Electric Industrial
Co., Ltd...................... 38,122,879
4,182,000 Matsushita Electric Works....... 38,177,896
3,352,000 NEC Corp........................ 37,912,425
3,178,000 Sharp Corp...................... 37,741,638
545,000 Sony Corp....................... 38,085,717
558,000 TDK Corp........................ 38,317,984
-----------------
305,608,499
-----------------
ENTERTAINMENT & LEISURE TIME
2,341,000 Mizuno Corp..................... 13,049,685
519,000 Nintendo Corp., Ltd............. 37,107,368
-----------------
50,157,053
-----------------
FOODS & BEVERAGES
1,018,000 House Food Industry............. 12,829,860
3,407,000 Snow Brand Milk Products........ 16,459,735
-----------------
29,289,595
-----------------
MACHINERY
6,810,000 Mitsubishi Electric Corp........ 38,236,791
5,505,000 Mitsubishi Heavy Industries,
Ltd........................... 35,801,624
-----------------
74,038,415
-----------------
PHARMACEUTICALS
1,609,000 Taisho Pharmaceutical Co.,
Ltd........................... 37,566,731
1,775,000 Takeda Chemical Industries...... 37,140,491
-----------------
74,707,222
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
51
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TOBACCO
3,085 Japan Tobacco, Inc.............. $ 20,486,912
-----------------
TRANSPORTATION
3,870,000 Yamato Transport Co., Ltd....... 38,143,480
-----------------
TOTAL JAPAN..................... 764,985,143
-----------------
MALAYSIA (1.5%)
BANKING
1,669,000 AMMB Holdings Berhad............ 13,870,179
1,669,000 AMMB Holdings Berhad - Bond
Rights*....................... 215,459
1,669,000 AMMB Holdings Berhad - Loan
Stock Rights*................. 161,594
-----------------
14,247,232
-----------------
BUILDING & CONSTRUCTION
1,717,000 United Engineers Malaysia
Berhad........................ 14,961,756
-----------------
CONGLOMERATES
4,077,000 Sime Darby Berhad............... 14,884,965
-----------------
TOTAL MALAYSIA.................. 44,093,953
-----------------
NETHERLANDS (3.0%)
BANKING
166,000 ABN-AMRO Holding NV............. 11,400,128
-----------------
CHEMICALS
113,000 DSM NV.......................... 11,393,846
-----------------
ELECTRICAL EQUIPMENT
246,100 Philips Electronics NV.......... 11,463,879
-----------------
INSURANCE
295,000 Fortis Amev NV.................. 11,480,249
-----------------
OIL INTEGRATED - INTERNATIONAL
63,000 Royal Dutch Petroleum Co........ 11,423,445
-----------------
STEEL
219,000 Koninklijke Hoogovens NV........ 10,819,421
-----------------
TELECOMMUNICATIONS
298,000 Koninklijke PTT Nederland NV.... 11,025,873
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TEXTILES
33,000 Gamma Holding NV................ $ 1,871,007
-----------------
TRANSPORTATION
354,000 KLM Royal Dutch Air Lines NV.... 10,553,663
-----------------
TOTAL NETHERLANDS............... 91,431,511
-----------------
SWITZERLAND (2.1%)
BANKING
99,100 Swiss Bank Corp................. 21,045,062
-----------------
FOODS & BEVERAGES
17,900 Nestle AG....................... 20,829,765
-----------------
HEALTH & PERSONAL CARE
17,193 Novartis AG-Bearer.............. 21,289,399
-----------------
TOTAL SWITZERLAND............... 63,164,226
-----------------
UNITED KINGDOM (10.2%)
BANKING
1,110,000 Hambros PLC..................... 4,290,905
1,662,000 National Westminster Bank PLC... 18,879,539
2,250,000 Royal Bank of Scotland Group
PLC........................... 19,791,135
-----------------
42,961,579
-----------------
BREWERS
1,405,000 Bass PLC........................ 18,721,808
-----------------
ENERGY
706,100 Energy Group PLC*............... 5,875,486
-----------------
FOODS & BEVERAGES
5,050,000 Hazlewood Foods PLC............. 9,512,685
6,232,000 Hillsdown Holdings PLC.......... 19,599,391
-----------------
29,112,076
-----------------
LEISURE
2,610,000 Rank Group PLC.................. 18,126,763
-----------------
MULTI-INDUSTRY
882,625 Hanson PLC...................... 4,149,273
-----------------
NATURAL GAS
7,245,000 BG PLC.......................... 19,225,042
-----------------
RETAIL - MERCHANDISING
3,465,000 Tesco PLC....................... 19,864,845
-----------------
STEEL & IRON
7,473,000 British Steel PLC............... 19,952,461
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
2,627,000 British Telecommunications
PLC........................... $ 19,191,496
-----------------
TOBACCO
2,330,000 B.A.T. Industries PLC........... 19,731,512
-----------------
UTILITIES - ELECTRIC
4,445,000 National Grid Group PLC......... 15,217,102
2,375,000 National Power PLC.............. 18,984,420
3,305,000 Scottish Hydro-Electric PLC..... 19,488,924
-----------------
53,690,446
-----------------
UTILITIES - WATER
1,430,000 Hyder PLC....................... 18,457,639
1,350,000 Hyder PLC (Pref.)............... 2,305,280
1,620,000 Severn Trent PLC................ 18,389,171
-----------------
39,152,090
-----------------
TOTAL UNITED KINGDOM............ 309,754,877
-----------------
UNITED STATES (28.4%)
AEROSPACE & DEFENSE
605,000 Northrop Grumman Corp........... 45,753,125
-----------------
AUTOMOTIVE
1,465,000 Ford Motor Co................... 45,964,375
-----------------
BANKING
448,000 BankAmerica Corp................ 45,136,000
927,000 KeyCorp......................... 45,191,250
-----------------
90,327,250
-----------------
CHEMICALS
559,000 Dow Chemical Co................. 44,720,000
-----------------
COMPUTERS
337,000 International Business Machines
Corp.......................... 46,295,375
-----------------
CONGLOMERATES
547,000 Minnesota Mining & Manufacturing
Co............................ 46,221,500
1,185,000 Tenneco, Inc.................... 46,215,000
-----------------
92,436,500
-----------------
HEALTH & PERSONAL CARE
719,000 Bristol-Myers Squibb Co......... 42,421,000
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MACHINERY - DIVERSIFIED
1,053,000 Deere & Co...................... $ 45,805,500
-----------------
METALS & MINING
628,000 Phelps Dodge Corp............... 45,922,500
-----------------
OIL - DOMESTIC
1,130,300 Ashland, Inc.................... 45,494,575
-----------------
OIL INTEGRATED - INTERNATIONAL
667,000 Chevron Corp.................... 46,439,875
-----------------
PAPER & FOREST PRODUCTS
1,130,000 International Paper Co.......... 43,928,750
-----------------
RETAIL - MERCHANDISING
1,080,700 Dayton-Hudson Corp.............. 45,119,225
-----------------
TELECOMMUNICATIONS
995,000 Sprint Corp..................... 45,272,500
-----------------
TELEPHONES
1,305,100 AT&T Corp....................... 45,352,225
-----------------
TIRE & RUBBER GOODS
881,000 Goodyear Tire & Rubber Co....... 46,032,250
-----------------
TOBACCO
398,000 Philip Morris Companies, Inc.... 45,421,750
-----------------
TOTAL UNITED STATES............. 862,706,775
-----------------
TOTAL COMMON AND PREFERRED
STOCKS AND RIGHTS
(IDENTIFIED COST
$2,622,439,364)................. 2,949,709,284
-----------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (3.5%)
COMMERCIAL PAPER (1.6%)
FINANCE - CONSUMER (0.8%)
$ 25,000 American Express Credit Corp.
5.38% due 04/02/97............ 24,996,264
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FINANCE - DIVERSIFIED (0.8%)
$ 25,000 General Electric Capital Corp.
5.60% due 04/04/97............ $ 24,988,333
-----------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $49,984,597).... 49,984,597
-----------------
U.S. GOVERNMENT AGENCY (1.9%)
56,500 Federal Home Loan Mortgage Corp.
6.50% due04/01/97 (Amortized
Cost $56,500,000)............. 56,500,000
-----------------
TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $106,484,597)... 106,484,597
-----------------
TOTAL INVESTMENTS
(IDENTIFIED COST $2,728,923,961) (B)..... 100.6% 3,056,193,881
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS................................... (0.6) (17,702,793)
------ --------------
NET ASSETS............................... 100.0% $3,038,491,088
------ --------------
------ --------------
<FN>
- ---------------------
* Non-income producing security.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $440,444,453 and the
aggregate gross unrealized depreciation is $113,174,533, resulting in net
unrealized appreciation of $327,269,920.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT MARCH 31, 1997:
<TABLE>
<CAPTION>
UNREALIZED
IN DELIVERY APPRECIATION
CONTRACTS TO DELIVER EXCHANGE FOR DATE (DEPRECIATION)
- -------------------------------------------------------------------
<S> <C> <C> <C>
$ 3,648,730 AUD 4,632,131 04/01/97 $(10,191)
$ 2,470,327 L 1,528,857 04/01/97 33,941
ITL 2,693,679,645 $ 1,594,790 04/01/97 (12,418)
$ 700,510 Y 86,548,000 04/01/97 (1,302)
$ 6,141,677 Y 759,786,850 04/01/97 (3,473)
NLG 2,630,362 $ 1,379,609 04/01/97 (20,712)
$ 1,732,535 AUD 2,213,113 04/02/97 5,865
L 421,231 $ 680,751 04/02/97 (9,225)
ITL 3,254,333,622 $ 1,930,095 04/02/97 (11,631)
$ 3,167,433 Y 391,336,307 04/02/97 (5,886)
NLG 4,012,432 $ 2,118,496 04/02/97 (17,594)
AUD 846,759 $ 663,012 04/03/97 (2,117)
$ 763,757 CAD 1,054,749 04/03/97 (2,206)
$ 1,148,106 Y 141,827,880 04/03/97 (2,300)
$ 3,922,763 NLG 7,392,055 04/03/97 12,530
AUD 1,115,612 $ 871,460 04/04/97 (4,853)
$ 1,765,997 ITL 2,956,543,100 04/04/97 (1,949)
AUD 3,755,871 $ 2,941,035 04/07/97 (9,202)
DEM 1,257,390 $ 749,786 04/07/97 (671)
L 24,058 $ 39,249 04/07/97 (158)
FRF 5,835,183 $ 1,034,423 04/30/97 916
$ 1,274,013 FRF 7,236,650 04/30/97 7,717
---------------
Net unrealized depreciation.................. $(54,919)
---------------
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
SUMMARY OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense..................... $ 45,753,125 1.5%
Automotive.............................. 123,266,362 4.1
Banking................................. 266,419,754 8.8
Brewers................................. 56,751,377 1.9
Building & Construction................. 45,883,594 1.5
Building Materials...................... 76,470,964 2.5
Chemicals............................... 85,373,410 2.8
Computer Services....................... 19,635,967 0.6
Computers............................... 46,295,375 1.5
Conglomerates........................... 132,473,751 4.4
Electrical Equipment.................... 25,950,898 0.9
Electronics & Electrical................ 305,608,499 10.1
Energy.................................. 5,875,486 0.2
Entertainment & Leisure Time............ 50,157,053 1.6
Finance - Consumer...................... 24,996,264 0.8
Finance - Diversified................... 24,988,333 0.8
Financial Services...................... 43,558,404 1.4
Foods & Beverages....................... 97,884,465 3.2
Health & Personal Care.................. 63,710,399 2.1
Insurance............................... 11,480,249 0.4
Leisure................................. 18,126,763 0.6
Machinery............................... 74,038,415 2.4
Machinery - Diversified................. 60,528,568 2.0
Metals & Mining......................... 45,922,500 1.5
Multi-Industry.......................... 111,398,573 3.7
Natural Gas............................. 36,657,533 1.2
Oil - Domestic.......................... 45,494,575 1.5
Oil Integrated - International.......... 121,192,834 4.0
Oil Related............................. 35,998,354 1.2
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C>
Paper & Forest Products................. $ 59,129,746 1.9%
Pharmaceuticals......................... 74,707,222 2.5
Real Estate............................. 23,781,715 0.8
Retail - Department Stores.............. 14,410,236 0.5
Retail - Merchandising.................. 64,984,070 2.1
Retail - Specialty...................... 11,711,310 0.4
Steel................................... 10,819,421 0.4
Steel & Iron............................ 34,558,549 1.1
Telecommunications...................... 183,595,934 6.0
Telephones.............................. 45,352,225 1.5
Television.............................. 19,743,890 0.6
Textiles................................ 1,871,007 0.1
Textiles - Apparel...................... 41,572,898 1.4
Tire & Rubber Goods..................... 46,032,250 1.5
Tobacco................................. 85,640,174 2.8
Transportation.......................... 48,697,143 1.6
U.S. Government Agency.................. 56,500,000 1.9
Utilities - Electric.................... 92,042,157 3.0
Utilities - Water....................... 39,152,090 1.3
-------------- -----
$3,056,193,881 100.6%
-------------- -----
-------------- -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................... $2,931,323,459 96.5%
Preferred Stocks........................ 18,008,772 0.6
Rights.................................. 377,053 0.0
Short-Term Investments.................. 106,484,597 3.5
-------------- -----
$3,056,193,881 100.6%
-------------- -----
-------------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $2,728,923,961).......................... $3,056,193,881
Cash........................................................ 829,422
Receivable for:
Investments sold........................................ 30,669,387
Dividends............................................... 8,912,805
Shares of beneficial interest sold...................... 7,093,490
Foreign withholding taxes reclaimed..................... 2,550,241
Interest................................................ 29,191
Deferred organizational expenses............................ 45,054
Prepaid expenses and other assets........................... 37,907
--------------
TOTAL ASSETS........................................... 3,106,361,378
--------------
LIABILITIES:
Payable for:
Investments purchased................................... 59,929,183
Shares of beneficial interest repurchased............... 2,632,036
Plan of distribution fee................................ 2,145,495
Investment management fee............................... 1,848,077
Accrued expenses and other payables......................... 1,315,499
--------------
TOTAL LIABILITIES...................................... 67,870,290
--------------
NET ASSETS:
Paid-in-capital............................................. 2,576,452,218
Net unrealized appreciation................................. 327,055,942
Accumulated undistributed net investment income............. 15,457
Accumulated undistributed net realized gain................. 134,967,471
--------------
NET ASSETS............................................. $3,038,491,088
--------------
--------------
NET ASSET VALUE PER SHARE,
228,383,365 SHARES OUTSTANDING (UNLIMITED SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$13.30
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $7,080,281 foreign withholding tax)....... $ 70,324,634
Interest.................................................... 2,749,027
------------
TOTAL INCOME........................................... 73,073,661
------------
EXPENSES
Plan of distribution fee.................................... 22,941,076
Investment management fee................................... 19,649,426
Transfer agent fees and expenses............................ 3,068,550
Custodian fees.............................................. 1,551,559
Registration fees........................................... 246,886
Shareholder reports and notices............................. 179,893
Professional fees........................................... 73,525
Organizational expenses..................................... 36,058
Trustees' fees and expenses................................. 21,108
Other....................................................... 38,946
------------
TOTAL EXPENSES......................................... 47,807,027
------------
NET INVESTMENT INCOME.................................. 25,266,634
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. 255,839,635
Foreign exchange transactions........................... (251,928)
------------
NET GAIN............................................... 255,587,707
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................. 39,226,407
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ (40,049)
------------
NET APPRECIATION....................................... 39,186,358
------------
NET GAIN............................................... 294,774,065
------------
NET INCREASE................................................ $320,040,699
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31,1997 MARCH 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 25,266,634 $ 22,314,052
Net realized gain........................................... 255,587,707 127,041,313
Net change in unrealized appreciation....................... 39,186,358 215,212,383
-------------- --------------
NET INCREASE........................................... 320,040,699 364,567,748
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income....................................... (27,883,886) (25,446,868)
Net realized gain........................................... (201,225,779) (83,961,762)
-------------- --------------
TOTAL.................................................. (229,109,665) (109,408,630)
-------------- --------------
Net increase from transactions in shares of beneficial
interest.................................................. 513,559,240 324,894,923
-------------- --------------
NET INCREASE........................................... 604,490,274 580,054,041
NET ASSETS:
Beginning of period......................................... 2,434,000,814 1,853,946,773
-------------- --------------
END OF PERIOD
(INCLUDING ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
OF $15,457 AND DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME
OF $2,223,051, RESPECTIVELY)............................... $3,038,491,088 $2,434,000,814
-------------- --------------
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Global Dividend Growth Securities (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is to
provide reasonable current income and long-term growth of income and capital.
The Fund seeks to achieve its objective by investing primarily in common stock
of issuers worldwide, with a record of paying dividends and the potential for
increasing dividends. The Fund was organized as a Massachusetts business trust
on January 12, 1993 and commenced operations on June 30, 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, American, or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") that sale
and 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); and (4) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-
59
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
dividend date except for certain dividends from foreign securities which are
recorded as soon as the Fund is informed after the ex-dividend date. Discounts
are accreted over the life of the respective securities. Interest income is
accrued daily.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
E. 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.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record 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
60
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
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.
G. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of approximately $180,000 which have been reimbursed for the full
amount thereof. 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. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined at the close of
each business day: 0.75% to the portion of daily net assets not exceeding $1
billion; 0.725% to the portion of daily net assets exceeding $1 billion but not
exceeding $1.5 billion; and 0.70% to the portion of daily net assets exceeding
$1.5 billion. Effective May 1, 1996, the Agreement was amended to reduce the
annual fee to 0.675% to the portion of daily net assets exceeding $2.5 billion
but not exceeding $3.5 billion. Effective May 1, 1997, the Agreement was again
amended to reduce the annual fee to 0.65% to the portion of daily net assets in
excess of $3.5 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment 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 Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act pursuant
to which the Fund pays the Distributor compensation, accrued daily and payable
monthly, at an annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's shares since the Fund's inception (not
including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been
61
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
imposed or upon which such charge has been waived; or (b) the Fund's average
daily net assets. Amounts paid under the Plan are paid to the Distributor to
compensate it for the services provided and the expenses borne by it and others
in the distribution of the Fund's shares, including the payment of commissions
for sales of the Fund's shares and incentive compensation to, and expenses of,
the account executives of Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor, and other employees or selected
broker-dealers who engage in or support distribution of the Fund's shares or who
service shareholder accounts, including overhead and telephone expenses,
printing and distribution of prospectuses and reports used in connection with
the offering of the Fund's shares to other than current shareholders and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may be compensated under the Plan for
its opportunity costs in advancing such amounts, which compensation would be in
the form of a carrying charge on any unreimbursed expenses incurred by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
contingent deferred sales charges paid by investors upon redemption of shares,
if for any reason the Plan is terminated, the Trustees will consider at that
time the manner in which to treat such expenses. The Distributor has advised the
Fund that such excess amounts, including carrying charges, totaled $69,361,411
at March 31, 1997.
The Distributor has informed the Fund that for the year ended March 31, 1997, it
received approximately $3,917,000 in contingent deferred sales charges from
certain redemptions of the Fund's shares.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended March 31, 1997 aggregated
$1,323,786,773 and $1,079,499,286, respectively.
62
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
For the year ended March 31, 1997, the Fund incurred brokerage commissions of
$169,351 with DWR for portfolio transactions executed on behalf of the Fund. At
March 31, 1997, included in the Fund's payable for investments purchased and
receivable for investments sold were unsettled trades with DWR of $1,187,200 and
$1,423,578, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $527,000.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended March 31, 1997 included
in Trustees' fees and expenses in the Statement of Operations amounted to
$4,263. At March 31, 1997, the Fund had an accrued pension liability of $28,923
which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 51,442,695 $ 677,741,563 46,573,003 $566,276,970
Reinvestment of dividends and distributions...................... 16,426,517 213,686,419 8,465,778 101,615,413
----------- -------------- ----------- ------------
67,869,212 891,427,982 55,038,781 667,892,383
Repurchased...................................................... (28,703,758) (377,868,742) (28,302,433) (342,997,460)
----------- -------------- ----------- ------------
Net increase..................................................... 39,165,454 $ 513,559,240 26,736,348 $324,894,923
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $1,000 during fiscal 1997.
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and income from the
mark-to-market of passive foreign investment companies ("PFICs") and permanent
book/tax differences primarily attributable to tax adjustments on
63
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
PFICs sold by the Fund. To reflect reclassifications arising from permanent
book/tax differences for the year ended March 31, 1997, accumulated
undistributed net realized gain was charged $4,855,760 and accumulated
undistributed net investment income was credited $4,855,760.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At March 31, 1997, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions.
64
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE
PERIOD
JUNE 30,
1993*
FOR THE YEAR ENDED MARCH 31 THROUGH
------------------------------- MARCH 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 12.86 $ 11.41 $ 10.81 $ 10.00
--------- --------- --------- ---------
Net investment income.............. 0.12 0.13 0.14 0.05
Net realized and unrealized gain... 1.44 1.96 0.88 0.84
--------- --------- --------- ---------
Total from investment operations... 1.56 2.09 1.02 0.89
--------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income........... (0.13) (0.15) (0.14) (0.05)
Net realized gain............... (0.99) (0.49) (0.28) (0.03)
--------- --------- --------- ---------
Total dividends and
distributions..................... (1.12) (0.64) (0.42) (0.08)
--------- --------- --------- ---------
Net asset value, end of period..... $ 13.30 $ 12.86 $ 11.41 $ 10.81
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 12.58% 18.77% 9.60% 8.89%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.75% 1.85% 1.97% 2.03%(2)
Net investment income.............. 0.93% 1.05% 1.22% 0.66%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $3,038 $2,434 $1,854 $1,121
Portfolio turnover rate............ 40% 40% 32% 21%(1)
Average commission rate paid....... $0.0289 $0.0311 -- --
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
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 Dean Witter Global Dividend Growth
Securities (the "Fund") at March 31, 1997, 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 three years in
the period then ended and for the period June 30, 1993 (commencement of
operations) through March 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 March 31, 1997 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
MAY 16, 1997
- --------------------------------------------------------------------------------
1997 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended March 31, 1997, the Fund paid to
shareholders $0.85 per share from long-term capital gains. For
such period, 36.38% of the ordinary dividends qualified for the
dividends received deduction available to corporations. For the
year ended March 31, 1997, the Fund has elected, pursuant to
Section 853 of the Internal Revenue Code, to pass-through foreign
taxes of $0.03 per share to its shareholders. The Fund generated
net foreign source income of $0.09 per share with respect to this
election.
66
<PAGE>
STATEMENT OF ADDITIONAL
INFORMATION
DEAN WITTER
WORLD WIDE
INVESTMENT TRUST
JULY 28, 1997
- --------------------------------------------------------------------------------
Dean Witter World Wide Investment Trust (the "Fund") is an open-end
diversified management investment company whose investment objective is total
return on its assets primarily through long-term capital growth and to a lesser
extent from income. The Fund will seek to achieve such objective through
investments in all types of common stocks and equivalents, preferred stocks and
bonds and other debt obligations of domestic and foreign companies and
governments and international organizations. (See "Investment Practices and
Policies".)
A Prospectus for the Fund dated July 28, 1997, 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 you
additional information regarding the activities and operations of the Fund, and
should be read in conjunction with the Prospectus.
Dean Witter
World Wide Investment Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The Fund and its Management............................................................ 3
Trustees and Officers.................................................................. 9
Investment Practices and Policies...................................................... 15
Investment Restrictions................................................................ 31
Portfolio Transactions and Brokerage................................................... 32
The Distributor........................................................................ 34
Determination of Net Asset Value....................................................... 39
Purchase of Fund Shares................................................................ 39
Shareholder Services................................................................... 42
Redemptions and Repurchases............................................................ 46
Dividends, Distributions and Taxes..................................................... 47
Performance Information................................................................ 49
Custodian and Transfer Agent........................................................... 50
Independent Accountants................................................................ 50
Description of Shares of the Fund...................................................... 51
Reports to Shareholders................................................................ 51
Legal Counsel.......................................................................... 51
Experts................................................................................ 51
Registration Statement................................................................. 51
Financial Statements--March 31, 1997................................................... 52
Report of Independent Accountants...................................................... 74
</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
July 7, 1983.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. (the "Investment Manager" or "InterCapital"),
a Delaware corporation, whose address is Two World Trade Center, New York, New
York 10048, is the Fund's Investment Manager. InterCapital is a wholly-owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD"), 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 InterCapital. (As
hereinafter used in this Statement of Additional Information, the terms
"InterCapital" and "Investment Manager" refer to DWR's InterCapital Division
prior to the internal reorganization and 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 Investment Manager and Sub-Adviser,
subject to periodic review by the Fund's Board of Trustees. Information as to
these Trustees and officers is contained under the caption "Trustees and
Officers."
InterCapital is also the investment manager or investment adviser of the
following management investment companies: Active Assets Money Trust, Active
Assets Tax-Free Trust, Active Assets California Tax-Free Trust, Active Assets
Government Securities Trust, InterCapital Income Securities Inc., InterCapital
Insured Municipal Bond Trust, InterCapital Insured Municipal Trust, InterCapital
Insured Municipal Income Trust, InterCapital Insured Municipal Securities,
InterCapital California Insured Municipal Income Trust, InterCapital Insured
California Municipal Securities, InterCapital Quality Municipal Investment
Trust, InterCapital Quality Municipal Income Trust, InterCapital Quality
Municipal Securities, InterCapital California Quality Municipal Securities,
InterCapital New York Quality Municipal Securities, High Income Advantage Trust,
High Income Advantage Trust II, High Income Advantage Trust III, Dean Witter
Government Income Trust, Dean Witter High Yield Securities Inc., Dean Witter
Tax-Free Daily Income Trust, Dean Witter Tax-Exempt Securities Trust, Dean
Witter Dividend Growth Securities Inc., Dean Witter Natural Resource Development
Securities Inc., Dean Witter American Value Fund, Dean Witter Developing Growth
Securities Trust, Dean Witter U.S. Government Money Market Trust, Dean Witter
Variable Investment Series, Dean Witter World Wide Investment Trust, Dean Witter
Select Municipal Reinvestment Fund, Dean Witter U.S. Government Securities
Trust, Dean Witter World Wide Income Trust, Dean Witter California Tax-Free
Income Fund, Dean Witter New York Tax-Free Income Fund, Dean Witter Convertible
Securities Trust, Dean Witter Federal Securities Trust, Dean Witter Value-Added
Market Series, Dean Witter Utilities Fund, Dean Witter California Tax-Free Daily
Income Trust, Dean Witter Strategist Fund, Dean Witter Intermediate Income
Securites, Dean Witter Capital Growth Securities, Dean Witter Precious Metals
and Minerals Trust, Dean Witter New York Municipal Money Market Trust, Dean
Witter European Growth Fund Inc., Dean Witter Global Short-Term Income Fund
Inc., Dean Witter Pacific Growth Fund Inc., Dean Witter Multi-State Municipal
Series Trust, Dean Witter Short-Term U.S. Treasury Trust, Dean Witter
Diversified Income Trust, Dean Witter Health Sciences Trust, Dean Witter
Retirement Series, Dean Witter Global Dividend Growth Securities, Dean Witter
Limited Term Municipal Trust, Dean Witter Short-Term Bond Fund, Dean Witter
Global Utilities Fund, Dean Witter High Income Securities, Dean Witter National
Municipal Trust, Dean Witter International SmallCap Fund, Dean Witter Mid-Cap
Growth Fund, Dean Witter Select Dimensions Investment Series, Dean Witter Global
Asset Allocation Fund, Dean Witter Balanced Growth Fund, Dean Witter Balanced
Income Fund, Dean Witter Hawaii Municipal Trust, Dean Witter Capital
Appreciation Fund, Dean Witter Information Fund, Dean Witter Intermediate Term
U.S. Treasury Trust, Dean Witter Japan Fund, Dean Witter Income Builder Fund,
Dean Witter Special Value Fund, Dean Witter Financial Services Trust, Dean
Witter Market Leader Trust, Municipal Income Trust, Municipal Income Trust II,
Municipal Income Trust III, Municipal Income
3
<PAGE>
Opportunities Trust, Municipal Income Opportunities Trust II, Municipal Income
Opportunities Trust III, Municipal Premium Income Trust and Prime Income Trust.
The foregoing investment companies, together with the Fund, are collectively
referred to as the Dean Witter Funds.
In addition, Dean Witter Services Company Inc. ("DWSC"), a wholly-owned
subsidiary of InterCapital, serves as manager for the following investment
companies for which TCW Funds Management, Inc. is the investment adviser: TCW/DW
Core Equity Trust, TCW/DW North American Government Income Trust, TCW/DW Latin
American Growth Fund, TCW/DW Income and Growth Fund, TCW/DW Small Cap Growth
Fund, TCW/DW Balanced Fund, TCW/DW Total Return Trust, TCW/DW Mid-Cap Equity
Trust, TCW/DW Global Telecom Trust, TCW/DW Strategic Income Trust, TCW/DW
Emerging Markets Opportunities Trust, TCW/DW Term Trust 2000, TCW/DW Term Trust
2002 and TCW/DW Term Trust 2003 (the "TCW/DW Funds"). InterCapital also serves
as: (i) administrator of The BlackRock Strategic Term Trust Inc., a closed-end
investment company; and (ii) sub-administrator of MassMutual Participation
Investors and Templeton Global Governments Income Trust, closed-end investment
companies.
Pursuant to an Investment Management Agreement (the "Management Agreement")
with the Investment Manager, the Fund has retained the Investment Manager to
manage the investment of the Fund's United States investments, including the
placing of orders for the purchase and sale of portfolio securities, and to
supervise the investment of all of the Fund's assets. The Investment Manager, in
conjunction with Morgan Grenfell Investment Services Ltd. (the "Sub-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.
Under the terms of the Management Agreement, in addition to managing the
Fund's investments, the Investment Manager maintains certain of the Fund's books
and records and furnishes, at its own expense, such office space, facilities,
equipment, clerical help and bookkeeping and certain 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 federal and state securities commissions
(except insofar as the participation or assistance of independent accountants
and attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In addition, the Investment Manager pays the salaries of all
personnel, including officers of the Fund, who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone service, heat,
light, power and other utilities provided to the Fund.
Pursuant to a Services Agreement between InterCapital and DWSC, InterCapital
has retained DWSC to provide administrative services to the Fund.
Expenses not expressly assumed by the Investment Manager under the
Management Agreement, by the Sub-Adviser pursuant to the Sub-Advisory Agreement
(see below), 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. These expenses will be allocated among the four
classes of shares of the Fund (each, a "Class") pro rata based on the net assets
of the Fund attributable to each Class, except as described below. The expenses
borne by the Fund include, but are not limited to: expenses of the Plan of
Distribution pursuant to Rule 12b-1 (the "12b-1 fee") (see "The Distributor"),
charges and expenses of any registrar, custodian, stock transfer and dividend
disbursing agent; brokerage commissions; 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
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 Manager or the Sub-Adviser or any corporate affiliate of the
Investment Manager or the Sub-Adviser; all expenses incident to any dividend,
withdrawal or redemption options; charges and expenses of any outside
4
<PAGE>
service used for pricing of the Fund's shares; fees and expenses of the Fund's
legal counsel, including counsel to the Trustees who are not interested persons
of the Fund or of the Investment Manager or the Sub-Adviser (not including
compensation or expenses of attorneys who are employees of the Investment
Manager or the Sub-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. The 12b-1 fees
relating to a particular Class will be allocated directly to that Class. In
addition, other expenses associated with a particular Class (except advisory or
custodial fees) may be allocated directly to that Class, provided that such
expenses are reasonably identified as specifically attributable to that Class
and the direct allocation to that Class is approved by the Trustees.
The Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Investment Manager is not liable to the Fund or any
of its investors for any act or omission by the Investment Manager or for any
losses sustained by the Fund or its investors. The Management Agreement in no
way restricts the Investment Manager from acting as investment manager or
adviser to others.
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund pays the
Investment Manager monthly compensation calculated daily by applying the
following annual rates to the Fund's daily net assets: 1.00% of the portion of
daily net assets not exceeding $500 million and 0.95% of the portion of daily
net assets exceeding $500 million.
Pursuant to a Sub-Advisory Agreement between the Investment Manager and
Sub-Adviser, the Sub-Adviser has been retained, subject to the overall
supervision of the Investment Manager and the Trustees of the Fund, to
continuously furnish investment advice concerning individual security
selections, asset allocations and overall economic trends with respect to
issuers located outside the United States, and to manage the portion of the
Fund's portfolio invested in securities issued by issuers located outside the
United States.
Morgan Grenfell Investment Services Limited ("MGIS") was organized as a
British corporation in 1972 and currently manages assets in excess of $15
billion primarily for U.S. corporate and public employee benefit plans,
investment companies, endowments and foundations. MGIS' principal office is
located at 20 Finsbury Circus, London, England. MGIS is a subsidiary of London
based Morgan Grenfell Asset Management Limited which is itself a subsidiary of
London-based Morgan Grenfell Group plc (which is owned by Deutsche Bank AG, an
international commercial and investment banking group) and is registered as an
investment adviser under the Investment Advisers Act of 1940. In 1838 Morgan
Grenfell was founded to provide merchant banking services, primarily trade
financing between Great Britain and the United States. In 1958, its investment
management arm began operations. In recent years Morgan Grenfell Group plc has
achieved a prominent position in the securities industry by providing investment
and commercial banking services, financial services, and discretionary
management and advisory services covering all of the world's leading securities
markets. Morgan Grenfell Asset Management Limited, through its various
investment management subsidiaries, which have extensive experience in global
investment management, is currently managing in excess of $118 billion
worldwide.
Both the Investment Manager and the Sub-Adviser have authorized any of their
directors, officers and employees who have been elected as Trustees or officers
of the Fund to serve in the capacities in which they have been elected. Services
furnished by the Investment Manager and the Sub-Adviser may be furnished by
directors, officers and employees of the Investment Manager and the Sub-Adviser.
In connection with the services rendered by the Sub-Adviser, the Sub-Adviser
bears the following expenses: (a) the salaries and expenses of its personnel;
and (b) all expenses incurred by it in connection with performing the services
provided by it as Sub-Adviser, as described above.
5
<PAGE>
As full compensation for the services and facilities furnished to the Fund
and the Investment Manager and expenses of the Fund and the Investment Manager
assumed by the Sub-Adviser, the Investment Manager pays the Sub-Adviser monthly
compensation equal to 40% of the Investment Manager's monthly compensation
payable under the Management Agreement.
The Management Agreement and the Sub-Advisory Agreement (the "Agreements")
were initially approved by the Board of Trustees on February 21, 1997 and by the
shareholders of the Fund at a Special Meeting of Shareholders held on May 21,
1997. The Agreements are substantially identical to prior management and
sub-advisory agreements which were initially approved by the Trustees on July
26, 1995 and by the shareholders of the Fund at a Special Meeting of
Shareholders held on October 31, 1995. These Agreements took effect on May 31,
1997 upon the consummation of the merger of Dean Witter, Discover & Co. with
Morgan Stanley Group Inc. Both Agreements 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 Investment Company Act of 1940, as amended (the
"Act"), of the outstanding shares of the Fund, or by the Investment Manager or
(in the case of the Sub-Advisory Agreement) by the Sub-Adviser. The Agreements
will automatically terminate in the event of their assignment (as defined in the
Act).
Under their terms, both Agreements have an initial term ending April 30,
1999 and will continue from year to year thereafter, provided continuance of
each 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 Trustees of the Fund who are
not parties to the Agreements or "interested persons" (as defined in the Act) of
any such party (the "Independent Trustees"), which votes must be cast in person
at a meeting called for the purpose of voting on such approval.
The Fund has acknowledged that the name "Dean Witter" is a property right of
DWR. The Fund has agreed that DWR or its parent company may use or, at any time,
permit others to use the name "Dean Witter". The Fund has also agreed that in
the event the Investment Management Agreement between InterCapital and the Fund
is terminated, or if the affiliation between InterCapital and its parent company
is terminated, the Fund will eliminate the name "Dean Witter" from its name if
DWR or its parent company shall so request.
FORMER INVESTMENT MANAGEMENT AND INVESTMENT ADVISORY AGREEMENTS. Prior to
August, 1995, the Fund was advised by three separate investment advisers:
InterCapital, Daiwa International Capital Management Corp. ("DICAM") and NatWest
Investment Management Limited ("NWIM"). InterCapital, DICAM and NWIM are
sometimes collectively referred to herein as the "Former Investment Advisers."
Each of the Former Investment Advisers had exclusive investment responsibility
with respect to the Fund's investments in a particular area of the world.
InterCapital was responsible for investing in North America and South America,
pursuant to an Investment Management Agreement with the Fund, DICAM was
responsible for investing in the Pacific Basin pursuant to an Investment
Advisory Agreement with the Fund, and NWIM was responsible for investing in
Europe and all other areas of the world not covered by InterCapital or DICAM,
pursuant to an Investment Advisory Agreement with the Fund. These agreements are
sometimes collectively referred to as the "Former Agreements" and sometimes
individually referred to as the "Former Investment Management Agreement" or the
"Former Investment Advisory Agreement(s)," as applicable. DICAM was assisted in
providing services to the Fund by its parent, Daiwa International Capital
Management Co., Ltd. ("DICAM, Ltd."), at cost, pursuant to a sub-advisory
agreement between DICAM and DICAM, Ltd. (sometimes referred to as the "Former
Sub-Advisory Agreement").
Under the terms of the Former Investment Management Agreement with
InterCapital and the Former Investment Advisory Agreements with DICAM and NWIM,
each of InterCapital, DICAM and NWIM, subject to the supervision of the Fund's
Trustees and in conformity with the stated policies of the
6
<PAGE>
Fund, provided advisory services with regard to the investment operations and
composition of the Fund's portfolio in the respective geographic regions as
noted above, including the purchase, retention, disposition and loan of
securities.
Each of the Former Investment Advisers had authorized any of its directors,
officers and employees who had been elected as Trustees or officers of the Fund
to serve in the capacities in which they had been elected. Services furnished by
the Former Investment Advisers could have been furnished by directors, officers
and employees of the respective Former Investment Adviser. In connection with
the services rendered by each Former Investment Adviser, such Former Investment
Adviser bore the following expenses: (a) the salaries and expenses of all
personnel of such Former Investment Adviser; and (b) all expenses incurred by
such Former Investment Adviser in connection with performing the services
provided by it as described above.
Under the terms of the Former Investment Management Agreement, in addition
to managing the Fund's North and South American investments, InterCapital
maintained the Fund's books and records and InterCapital furnished, at its
expense, such office space, facilities, equipment, clerical help, bookkeeping
and legal services as the Fund may reasonably have required in the conduct of
its business, including the preparation of prospectuses and statements of
additional information, proxy statements and reports required to be filed with
federal and state securities commissions (except insofar as the participation or
assistance of independent accountants and attorneys was, in the opinion of
InterCapital, necessary or desirable). InterCapital also bore the cost of
telephone service, heat, light, power and other utilities provided to the Fund.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, DWSC began to provide the administrative services to the
Fund which were previously performed directly by InterCapital. On April 17,
1995, DWSC was reorganized in the State of Delaware, necessitating the entry
into a new Services Agreement by InterCapital and DWSC on such date. The
foregoing internal reorganizations did not result in any change in the nature or
scope of the administrative services being provided to the Fund or any of the
fees being paid by the Fund for the overall services being performed under the
terms of the Former Investment Management Agreement.
Expenses not expressly assumed by the Former Investment Advisers under the
Former Agreements or by the Distributor (see "The Distributor"), were paid by
the Fund. The expenses borne by the Fund included, but were not limited to: fees
pursuant to the Plan of Distribution (see "The Distributor"); charges and
expenses of any registrar, custodian, subcustodian, share transfer and dividend
disbursing agent; brokerage commissions; 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
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who were not employees of
the Former Investment Advisers or any corporate affiliate of the Prior
Investment Advisers; 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 were not interested persons of the Fund or of the Former
Investment Advisers (not including compensation or expenses of attorneys who are
employees of the Former Investment Advisers) 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 inured 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.
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Former Investment Advisers, the Fund
paid the Former Investment Advisers aggregate monthly compensation calculated
daily by applying the annual rate of 1.0% to the net assets of the Fund
7
<PAGE>
up to $500 million and 0.95% to the net assets of the Fund over $500 million,
determined as of the close of each business day. Pursuant to their respective
Former Agreements with the Fund, InterCapital, DICAM and NWIM received fees at
the annual rates of 0.55%, 0.225% and 0.225%, respectively, of average daily net
assets up to $500 million and 0.5225%, 0.21375% and 0.21375%, respectively, of
the Fund's average daily net assets over $500 million. This total fee was
greater than that paid by most other investment companies.
The respective Former Agreements provided that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, no Prior Investment Adviser or Sub-adviser was liable to
the Fund or any of its investors for any act or omission by such Prior
Investment Adviser or Sub-adviser or for any losses sustained by the Fund or its
investors.
The Former Investment Management Agreement with InterCapital was initially
approved by the Board of Trustees of the Fund on October 30, 1992 and by the
shareholders of the Fund at a Meeting of Shareholders held on January 12, 1993.
The Former Investment Management Agreement was substantially identical to a
prior investment management agreement which was entered into on August 26, 1983
and originally approved by DWR, the then sole shareholder of the Fund, and by
the Fund's Trustees, including the affirmative vote of a majority of the
Independent Trustees, which vote was cast in person at a meeting called for the
purpose of voting on the approval of such Agreement. The Former Investment
Management Agreement took effect on June 30, 1993 upon the spin-off by Sears,
Roebuck and Co. of its remaining shares of DWDC. The Former Agreement provided
that it could have been 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 Fund's shares, or by the Investment Manager. The Former
Investment Management Agreement provided that it would automatically terminate
in the event of its assignment (as defined in the Act and the rules thereunder).
By its terms, the Former Investment Management Agreement had an initial term
ended April 30, 1994 and provided that it would continue from year to year
thereafter, provided continuance of the Agreement was 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 Board of Trustees of the Fund;
provided that in either event such continuance was approved annually by the vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval. At their meeting held on April 8,
1994, the Fund's Board of Trustees, including all of the Independent Trustees,
approved continuation of the Former Investment Management Agreement until April
30, 1995 and amended its terms to lower management fees charged on average daily
net assets of the Fund in excess of $500 million to 0.5225%. At their meeting
held on April 20, 1995, the Fund's Board of Trustees, including all of the
Independent Trustees, approved continuation of the Former Investment Management
Agreement until April 30, 1996.
The Former Investment Advisory Agreements and the Former Sub-Advisory
Agreement were entered into on August 26, 1983 and were originally approved by
DWR, the then sole shareholder of the Fund, and by the Fund's Trustees,
including the affirmative vote of a majority of the Independent Trustees. By
their terms, these agreements had initial terms ended July 31, 1984 and were
subject to the same renewal and termination provisions as the Former Investment
Management Agreement. At their meeting held on April 8, 1994, the Fund's Board
of Trustees, including all of the Independent Trustees, approved continuation of
the Former Investment Advisory Agreements until April 30, 1995 and amended the
terms of the Former Investment Advisory Agreements to lower advisory fees
charged on average daily net assets of the Fund in excess of $500 million to
0.21375%. At their meeting held on April 20, 1995, the Fund's Board of Trustees,
including all of the Independent Trustees, approved continuation of the Former
Investment Advisory Agreements until April 30, 1996.
At their meeting held on July 26, 1995, the Trustees of the Fund, including
all of the Independent Trustees, approved the present management structure of
the Fund, as described above under "The Investment Manager," and also approved
an Investment Management Agreement with InterCapital and a Sub-Advisory
Agreement with InterCapital and MGIS (the "Interim Agreements"), which took
effect on
8
<PAGE>
August 1, 1995 and terminated on October 31, 1995 upon the effectiveness of the
prior Investment Management and Sub-Advisory Agreements. Other than the
provisions pursuant to which the Interim Agreements took effect and were
terminated, the Interim Agreements were substantially identical to the present
Investment Management and Sub-Advisory Agreements except that under the Interim
Agreements: (i) InterCapital received an investment management fee at the annual
rate of 0.55% on assets up to $500 million and 0.5225% on assets over $500
million, and (ii) MGIS received a sub-advisory fee directly from the Fund at the
annual rate of 0.45% on assets up to $500 million and 0.4275% on assets over
$500 million.
Mellon Bank, N.A., Mutual Funds, P.O. Box 320, Pittsburgh, Pennsylvania
15230-0320, as trustee of the Dean Witter START Plan and the SPS Transaction
Services, Inc. START Plan, employee benefit plans established by DWR and SPS
Transaction Services, Inc. (an affiliate of DWR) for their employees as
qualified under Section 401(k) of the Internal Revenue Code, owned approximately
9.2% of the outstanding shares of the Fund on June 30, 1997.
------------------------
For the fiscal years ended March 31, 1995, 1996 and 1997, the Fund paid to
the Former Investment Advisers (which served the Fund in such capacities until
July 31, 1995) and to the Investment Manager (which has served the Fund in such
capacity since August 1, 1995) compensation totalling $5,588,682, $5,134,018 and
$4,936,673, respectively.
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
InterCapital and with the 83 investment companies managed or advised by
InterCapital (the "Dean Witter Funds"), as well as with the 14 investment
companies for which InterCapital is the Manager and TCW Funds Management, Inc.
is the Investment Adviser ("TCW/ DW Funds"), are shown below.
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- --------------------------------------------------------------------
<S> <C>
Michael Bozic (56) Chairman and Chief Executive Officer of Levitz Furniture Corporation
Trustee (since November, 1995); Director or Trustee of the Dean Witter
c/o Levitz Furniture Corporation Funds; formerly President and Chief Executive Officer of Hills
6111 Broken Sound Parkway, N.W. Department Stores (May, 1991-July, 1995); formerly variously
Boca Raton, Florida Chairman, Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck
and Co.; Director of Eaglemark Financial Services, Inc., the United
Negro College Fund and Weirton Steel Corporation.
Charles A. Fiumefreddo* (64) Chairman, Chief Executive Officer and Director of InterCapital, DWSC
Chairman, President, and Distributors; Executive Vice President and Director of DWR;
Chief Executive Officer and Trustee Chairman, Director or Trustee, President and Chief Executive Officer
Two World Trade Center of the Dean Witter Funds; Chairman, Chief Executive Officer and
New York, New York Trustee of the TCW/DW Funds; Chairman and Director of Dean Witter
Trust Company ("DWTC"); Director and/or officer of various MSDWD
subsidiaries; formerly Executive Vice President and Director of Dean
Witter, Discover & Co. (until February, 1993).
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- --------------------------------------------------------------------
<S> <C>
Edwin J. Garn (64) Director or Trustee of the Dean Witter Funds; formerly United States
Trustee Senator (R-Utah) (1974-1992) and Chairman, Senate Banking Committee
c/o Huntsman Corporation (1980-1986); formerly Mayor of Salt Lake City, Utah (1971-1974);
500 Huntsman Way formerly Astronaut, Space Shuttle Discovery (April 12-19, 1985);
Salt Lake City, Utah Vice Chairman, Huntsman Corporation (since January, 1993); Director
of Franklin Quest (time management systems) and John Alden Financial
Corp. (health insurance); member of the board of various civic and
charitable organizations.
John R. Haire (72) Chairman of the Audit Committee and Chairman of the Committee of the
Trustee Independent Directors or Trustees and Director or Trustee of the
Two World Trade Center Dean Witter Funds; Chairman of the Audit Committee and Chairman of
New York, New York the Committee of the Independent Trustees and Trustee of the TCW/DW
Funds; formerly President, Council for Aid to Education (1978-1989)
and Chairman and Chief Executive Officer of Anchor Corporation, an
Investment Adviser (1964-1978); Director of Washington National
Corporation (insurance).
Wayne E. Hedien** (63) Retired; Director or Trustee of the Dean Witter Funds (commencing on
Trustee September 1, 1997); Director of The PMI Group, Inc. (private
c/o Gordon Altman Butowsky mortgage insurance); Trustee and Vice Chairman of The Field Museum
Weitzen Shalov & Wein of Natural History; formerly associated with the Allstate Companies
Counsel to the Independent (1966-1994), most recently as Chairman of The Allstate Corporation
Trustees (March, 1993-December, 1994) and Chairman and Chief Executive
114 West 47th Street Officer of its wholly-owned subsidiary, Allstate Insurance Company
New York, New York (July, 1989-December, 1994); director of various other business and
charitable organizations.
Dr. Manuel H. Johnson (48) Senior Partner, Johnson Smick International, Inc., a consulting
Trustee firm; Co-Chairman and a founder of the Group of Seven Council (G7C),
c/o Johnson Smick International, Inc. an international economic commission; Director or Trustee of the
1133 Connecticut Avenue, N.W. Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Washington, DC Greenwich Capital Markets, Inc. (broker-dealer); Director of NASDAQ
(since June, 1995); Trustee of the Financial Accounting Foundation
(oversight organization for the Financial Accounting Standards
Board); formerly Vice Chairman of the Board of Governors of the
Federal Reserve System (1988-1990) and Assistant Secretary of the
U.S. Treasury (1982-1986).
Michael E. Nugent (61) General Partner, Triumph Capital, L.P., a private investment
Trustee partnership; Director or Trustee of the Dean Witter Funds; Trustee
c/o Triumph Capital, L.P. of the TCW/DW Funds; formerly Vice President, Bankers Trust Company
237 Park Avenue and BT Capital Corporation (1984-1988); Director of various business
New York, New York organizations.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- --------------------------------------------------------------------
<S> <C>
Philip J. Purcell* (53) Chairman of the Board of Directors and Chief Executive Officer of
Trustee MSDWD, DWR and Novus Credit Services Inc.; Director of InterCapital,
1585 Broadway DWSC and Distributors; Director or Trustee of the Dean Witter Funds;
New York, New York Director and/or officer of various MSDWD subsidiaries.
John L. Schroeder (66) Retired; Director or Trustee of the Dean Witter Funds; Trustee of
Trustee the TCW/DW Funds; Director of Citizens Utilities Company; formerly
c/o Gordon Altman Butowsky Executive Vice President and Chief Investment Officer of the Home
Weitzen Shalov & Wein Insurance Company (August, 1991-September, 1995).
Counsel to the Independent
Trustees
114 West 47th Street
New York, New York
Barry Fink (42) Senior Vice President (since March, 1997) and Secretary and General
Vice President, Secretary and Counsel (since February, 1997) of InterCapital and DWSC; Senior Vice
General Counsel President (since March, 1997) and Assistant Secretary and Assistant
Two World Trade Center General Counsel (since February, 1997) of Distributors; Assistant
New York, New York Secretary of DWR (since August, 1996); Vice President, Secretary and
General Counsel of the Dean Witter Funds and the TCW/DW Funds (since
February, 1997); previously First Vice President (June,
1993-February, 1997), Vice President (until June, 1993) and
Assistant Secretary and Assistant General Counsel of InterCapital
and DWSC and Assistant Secretary of the Dean Witter Funds and the
TCW/DW Funds.
Mark Bavoso (36) Senior Vice President of InterCapital; Vice President of various
Vice President Dean Witter Funds.
Two World Trade Center
New York, New York
Thomas F. Caloia (51) First Vice President and Assistant Treasurer of InterCapital and
Treasurer DWSC; Treasurer of the Dean Witter Funds and the TCW/DW Funds.
Two World Trade Center
New York, New York
<FN>
- ------------------------
* Denotes Trustees who are "interested persons" of the Fund, as defined in
the Act.
** Mr. Hedien's term as Trustee will commence on September 1, 1997.
</TABLE>
In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, Mitchell M. Merin, President and Chief Strategic Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, Executive Vice President and Director of DWR, and Director of
SPS Transaction Services, Inc. and various other MSDWD subsidiaries, Joseph J.
McAlinden, Executive Vice President and Chief Investment Officer of InterCapital
and Director of DWTC, Robert S. Giambrone, Senior Vice President of
InterCapital, DWSC, Distributors and DWTC and Director of DWTC, and Kenton J.
Hinchliffe, Ira N. Ross and Paul D. Vance, Senior Vice Presidents of
InterCapital, are Vice Presidents of the Fund, and Marilyn K. Cranney, First
Vice President and Assistant General Counsel of InterCapital and DWSC, LouAnne
D. McInnis, Carsten Otto and Ruth Rossi, Vice Presidents and Assistant General
Counsels of InterCapital and DWSC, and Frank Bruttomesso, a staff attorney with
InterCapital, are Assistant Secretaries of the Fund.
11
<PAGE>
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees currently consists of eight (8) trustees; as noted
above, Mr. Hedien's term will commence on September 1, 1997. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of this
Statement of Additional Information, there are a total of 83 Dean Witter Funds,
comprised of 126 portfolios. As of June 30, 1997, the Dean Witter Funds had
total net assets of approximately $87.9 billion and more than six million
shareholders.
Six Trustees and Mr. Hedien (77% of the total number) have no affiliation or
business connection with InterCapital or any of its affiliated persons and do
not own any stock or other securities issued by InterCapital's parent company,
MSDWD. These are the "disinterested" or "independent" Trustees. The other two
Trustees (the "management Trustees") are affiliated with InterCapital. Four of
the six independent Trustees are also Independent Trustees of the TCW/DW Funds.
Law and regulation establish both general guidelines and specific duties for
the Independent Trustees. The Dean Witter 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 current Independent Trustees serve as members of the Audit
Committee and the Committee of the Independent Trustees. Three of them also
serve as members of the Derivatives Committee. During the calendar year ended
December 31, 1996, the three Committees held a combined total of sixteen
meetings. The Committees hold some meetings at InterCapital's offices and some
outside InterCapital. Management Trustees or officers do not attend these
meetings unless they are invited for purposes of furnishing information or
making a report.
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. Most of the Dean Witter Funds have 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 COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He 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
12
<PAGE>
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 both 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 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 Committee of the Independent Trustees and the Audit
Committee 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 Dean Witter Funds and as an Independent Trustee and, since July
1, 1996, as Chairman of the Committee of the Independent Trustees and the Audit
Committee of the TCW/DW Funds. The current Committee Chairman has had more than
35 years experience as a senior executive in the investment company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and enhances
their ability to negotiate on behalf of each Fund with the Fund's service
providers. This arrangement also precludes the possibility of separate groups of
Independent Trustees arriving at conflicting decisions regarding operations and
management of the Funds and avoids the cost and confusion that would likely
ensue. Finally, having the same Independent Trustees serve on all Fund Boards
enhances the ability of each Fund to obtain, at modest cost to each separate
Fund, the services of Independent Trustees, and a Chairman of their Committees,
of the caliber, experience and business acumen of the individuals who serve as
Independent Trustees of the Dean Witter Funds.
COMPENSATION OF INDEPENDENT TRUSTEES
The Fund pays each Independent Trustee an annual fee of $1,000 plus a per
meeting fee of $50 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 $750 and pays the Chairman of the Committee of
the Independent Trustees an additional annual fee of $1,200). 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 Investment Manager or an affiliated
company receive no compensation or expense reimbursement from the Fund.
The following table illustrates the compensation paid to the Fund's
Independent Trustees by the Fund for the fiscal year ended March 31, 1997.
FUND COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- -------------------------------------------------------------- ---------------
<S> <C>
Michael Bozic................................................. $1,800
Edwin J. Garn................................................. 1,900
John R. Haire................................................. 3,550
Dr. Manuel H. Johnson......................................... 1,850
Michael E. Nugent............................................. 1,900
John L. Schroeder............................................. 1,900
</TABLE>
13
<PAGE>
The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1996 for services
to the 82 Dean Witter Funds and, in the case of Messrs. Haire, Johnson, Nugent
and Schroeder, the 14 TCW/DW Funds that were in operation at December 31, 1996.
With respect to Messrs. Haire, Johnson, Nugent and Schroeder, the TCW/DW Funds
are included solely because of a limited exchange privilege between those Funds
and five Dean Witter Money Market Funds.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS FOR SERVICE
CHAIRMAN OF AS TOTAL CASH
COMMITTEES OF CHAIRMAN OF COMPENSATION
FOR SERVICE INDEPENDENT COMMITTEES OF FOR SERVICES
AS DIRECTOR OR DIRECTORS/ INDEPENDENT TO
TRUSTEE AND FOR SERVICE AS TRUSTEES AND TRUSTEES AND 82 DEAN
COMMITTEE MEMBER TRUSTEE AND AUDIT AUDIT WITTER
OF 82 DEAN COMMITTEE MEMBER COMMITTEES OF COMMITTEES OF FUNDS AND
NAME OF WITTER OF 14 TCW/DW 82 DEAN WITTER 14 TCW/DW 14 TCW/DW
INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS FUNDS FUNDS
- --------------------------- ---------------- ---------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Michael Bozic.............. $138,850 -- -- -- $138,850
Edwin J. Garn.............. 140,900 -- -- -- 140,900
John R. Haire.............. 106,400 $64,283 $195,450 $ 12,187 378,320
Dr. Manuel H. Johnson...... 137,100 66,483 -- -- 203,583
Michael E. Nugent.......... 138,850 64,283 -- -- 203,133
John L. Schroeder.......... 137,150 69,083 -- -- 206,233
</TABLE>
As of the date of this Statement of Additional Information, 57 of the Dean
Witter Funds, including the Fund, have adopted a retirement program under which
an Independent Trustee who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent Director
or Trustee of any Dean Witter Fund that has adopted the retirement program (each
such Fund referred to as an "Adopting Fund" and each such Trustee referred to as
an "Eligible Trustee") is entitled to retirement payments upon reaching the
eligible retirement age (normally, after attaining age 72). Annual payments are
based upon length of service. Currently, upon retirement, each Eligible Trustee
is entitled to receive from the Adopting Fund, commencing as of his or her
retirement date and continuing for the remainder of his or her life, an annual
retirement benefit (the "Regular Benefit") equal to 25.0% of his or her Eligible
Compensation plus 0.4166666% of such Eligible Compensation for each full month
of service as an Independent Director or Trustee of any Adopting Fund in excess
of five years up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the Board.(1) "Eligible Compensation" is one-fifth
of the total compensation earned by such Eligible Trustee for service to the
Adopting Fund in the five year period prior to the date of the Eligible
Trustee's retirement. Benefits under the retirement program are not secured or
funded by the Adopting Funds.
- ------------------------
(1) An Eligible Trustee may elect alternate payments of his or her retirement
benefits based upon the combined life expectancy of such Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement. The
amount estimated to be payable under this method, through the remainder of
the later of the lives of such Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit. In addition, the Eligible
Trustee may elect that the surviving spouse's periodic payment of benefits
will be equal to either 50% or 100% of the previous periodic amount, an
election that, respectively, increases or decreases the previous periodic
amount so that the resulting payments will be the actuarial equivalent of
the Regular Benefit.
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<PAGE>
The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the Fund for the fiscal year ended March 31, 1997
and by the 57 Dean Witter Funds (including the Fund) for the year ended December
31, 1996, and the estimated retirement benefits for the Fund's Independent
Trustees, to commence upon their retirement, from the Fund as of March 31, 1997
and from the 57 Dean Witter Funds as of December 31, 1996.
RETIREMENT BENEFITS FROM THE FUND AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
------------------------- ESTIMATED ANNUAL
ESTIMATED RETIREMENT BENEFITS BENEFITS
CREDITED ACCRUED AS EXPENSES UPON
YEARS ESTIMATED RETIREMENT(2)
OF SERVICE PERCENTAGE ------------------- ----------------
AT OF BY ALL FROM FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUND FUNDS FUND FUNDS
- --------------------------------------------- ------------ ---------- ------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic................................ 10 50.0% $ 378 $20,147 $1,850 $ 51,325
Edwin J. Garn................................ 10 50.0 547 27,772 1,850 51,325
John R. Haire................................ 10 50.0 (437)(3) 46,952 4,492 129,550
Dr. Manuel H. Johnson........................ 10 50.0 229 10,926 1,850 51,325
Michael E. Nugent............................ 10 50.0 392 19,217 1,850 51,325
John L. Schroeder............................ 8 41.7 730 38,700 1,850 42,771
</TABLE>
- ------------------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) above.
(3) This number reflects the effect of the extension of Mr. Haire's term as
Trustee until June 1, 1998
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
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
As discussed in the Prospectus, the Fund may enter into forward foreign
currency exchange contracts ("forward contracts") as a hedge against
fluctuations in future foreign exchange rates. The Fund will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A forward
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. These
contracts are traded in the interbank market conducted directly between currency
traders (usually large, commercial and investment banks) and their customers.
Such forward contracts will only be entered into with United States banks and
their foreign branches or foreign banks whose assets total $1 billion or more. A
forward contract generally has no deposit requirement, and no commissions are
charged at any stage for trades.
When management of the Fund believes that the currency of a particular
foreign country may suffer a substantial movement against the U.S. dollar, it
may enter into a forward contract to purchase or sell, for a fixed amount of
dollars or other currency, the amount of foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency. The Fund will not enter into such forward contracts or
maintain a net exposure to such contracts where the consummation of the
contracts would obligate the Fund to deliver an amount of foreign currency in
excess of the value of the Fund's portfolio securities or other assets
denominated in that currency. Under normal circumstances, consideration of the
prospect for currency parities will be incorporated into the longer term
investment decisions made with regard to overall diversification strategies.
However, management of the Fund believes that it is important to have the
flexibility to enter into such forward contracts when it determines that the
best interests of the Fund will be served. The Fund's custodian bank will place
cash, U.S. Government securities or other appropriate liquid high grade debt
securities in a segregated
15
<PAGE>
account of the Fund in an amount equal to the value of the Fund's total assets
committed to the consummation of forward contracts entered into under the
circumstances set forth above. If the value of the securities placed in the
segregated account declines, additional cash or securities will be placed in the
account on a daily basis so that the value of the account will equal the amount
of the Fund's commitments with respect to such contracts.
Where, for example, the Fund is hedging a portfolio position consisting of
foreign fixed-income securities denominated in a foreign currency against
exchange rate moves vis-a-vis the U.S. dollar, at the maturity of the forward
contract for delivery by the Fund of a foreign currency, the Fund may either
sell the portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract with the same currency
trader obligating it to purchase, on the same maturity date, the same amount of
the foreign currency (however, the ability of the Fund to terminate a contract
is contingent upon the willingness of the currency trader with whom the contract
has been entered into to permit an offsetting transaction). It is impossible to
forecast the market value of portfolio securities at the expiration of the
contract. Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or loss to the extent that there has
been movement in spot or forward contract prices. If the Fund engages in an
offsetting transaction, it may subsequently enter into a new forward contract to
sell the foreign currency. Should forward prices decline during the period
between the Fund's entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the purchase of
the foreign currency, the Fund will realize a gain to the extent the price of
the currency it has agreed to sell exceeds the price of the currency it has
agreed to purchase. Should forward prices increase, the Fund will suffer a loss
to the extent the price of the currency it has agreed to purchase exceeds the
price of the currency it has agreed to sell.
If the Fund purchases a fixed-income security which is denominated in U.S.
dollars but which will pay out its principal based upon a formula tied to the
exchange rate between the U.S. dollar and a foreign currency, it may hedge
against a decline in the principal value of the security by entering into a
forward contract to sell an amount of the relevant foreign currency equal to
some or all of the principal value of the security.
At times when the Fund has written a call option on a fixed-income security
or the currency in which it is denominated, it may wish to enter into a forward
contract to purchase or sell the foreign currency in which the security is
denominated. A forward contract would, for example, hedge the risk of the
security on which a call option has been written declining in value to a greater
extent than the value of the premium received for the option. The Fund will
maintain with its Custodian at all times, cash, U.S. Government securities, or
other appropriate high grade debt obligations in a segregated account equal in
value to all forward contract obligations and option contract obligations
entered into in hedge situations such as this.
Of course, the Fund is not required to enter into such transactions with
regard to its foreign currency-denominated securities and will not do so unless
deemed appropriate by the Investment Manager or the Sub-Adviser. It also should
be realized that this method of protecting the value of the Fund's portfolio
securities against a decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. It simply establishes a
rate of exchange which one can achieve at some future point in time.
Additionally, although such contracts tend to minimize the risk of loss due to a
decline in the value of the hedged currency, at the same time, they tend to
limit any potential gain which might result should the value of such currency
increase.
16
<PAGE>
Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. It will, however, do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the spread
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer.
PRIVATE PLACEMENTS
The Fund may invest up to 10% 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. 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 Investment Manager,
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.
The procedures require that the following factors be taken into account in
making a liquidity determination: (1) the frequency of trades and price quotes
for the security; (2) the number of dealers and other potential purchasers who
have issued quotes on the security; (3) any dealer undertakings to make a market
in the security; and (4) the nature of the security and the nature of the
marketplace trades (the time needed to dispose of the security, the method of
soliciting offers, and the mechanics of transfer). If a restricted security is
determined to be "liquid", such security will not be included within the
category "illiquid securities", which is limited by the Fund's investment
restrictions to 10% of the Fund's total assets.
The Rule 144A marketplace of sellers and qualified institutional buyers is
new and still developing and may take a period of time to develop into a mature
liquid market. As such, the market for certain private placements purchased
pursuant to Rule 144A may be initially small or may, subsequent to purchase,
become illiquid. Furthermore, the Investment Manager may not possess all the
information concerning an issue of securities that it wishes to purchase in a
private placement to which it would normally have had access, had the
registration statement necessitated by a public offering been filed with the
Securities and Exchange Commission.
WARRANTS
The Fund may acquire warrants, including warrants which are attached to
fixed-income securities purchased for its portfolio, and hold such warrants
until the relevant Investment Adviser determines it is prudent to sell. 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.
LENDING OF PORTFOLIO SECURITIES
Consistent with applicable regulatory requirements, the Fund may lend its
United States 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 appropriate high grade debt obligations, 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.
17
<PAGE>
A loan may be terminated by the borrower on one business day's notice, or by
the Fund on four business days' notice. If the borrower fails to deliver the
loaned securities within four 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
Fund will pay reasonable finder's, administrative and custodial fees in
connection with a loan of its securities. The creditworthiness of firms to which
the Fund lends its portfolio securities will be monitored on an ongoing basis by
the Fund's management pursuant to procedures adopted and reviewed, on an ongoing
basis, by the Board of Trustees of the Fund.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loaned securities, to
be delivered within one day after notice, to permit the exercise of such rights
if the matters involved would have a material effect on the Fund's investment in
such loaned securities. 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 10% of the value of
its total assets. The Fund may lend its non-United States portfolio securities
after the Trustees adopt procedures consistent with applicable regulatory
requirements. During the fiscal year ended March 31, 1997, the Fund did not loan
any of its portfolio securities.
BORROWING OF MONEY
The Fund did not borrow any money from any source during the fiscal year
ended March 31, 1997.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS
From time to time 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 commitment. While the Fund will only purchase securities
on a when-issued, delayed delivery or forward commitment basis with the
intention of acquiring the securities, the Fund may sell the securities before
the settlement date, if it is deemed advisable. The securities so purchased or
sold are subject to market fluctuation and no interest or dividends accrue to
the purchaser prior to the settlement date. At the time the Fund makes the
commitment to purchase or sell securities on a when-issued, delayed delivery or
forward commitment basis, it will record the transaction and thereafter reflect
the value, each day, of such security purchased, or if a sale, the proceeds to
be received, in determining its net asset value. At the time of delivery of the
securities, their value may be more or less than the purchase or sale price. The
Fund will also establish a segregated account with its custodian bank in which
it will continually maintain cash or U.S. Government securities or other 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 Fund's management and
the Trustees do not believe that the Fund's net asset value or income will be
adversely affected by its purchase of securities on such basis.
WHEN, AS AND IF ISSUED SECURITIES
The Fund may purchase securities on a "when, as and if issued" basis under
which the issuance of the security depends upon the occurence of a subsequent
event, such as approval of a merger, corporate reorganization or debt
restructuring. The commitment for the purchase of any such security will not be
recognized in the portfolio of the Fund until InterCapital 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
18
<PAGE>
account with its custodian bank in which it will maintain cash or U.S.
Government securities or other high grade debt portfolio securities equal in
value to recognized commitments for such securities. The value of the Fund's
commitments to purchase the securities of any one issuer, together with the
value of all securities of such issuer owned by the Fund, may not exceed 5% of
the value of the Fund's total assets at the time the initial commitment to
purchase such securities is made (see "Investment Restrictions"). Subject to the
foregoing, 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 Fund's management and the Trustees do not believe that
the Fund's net asset value 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 the issuance of the security will result automatically
from the exchange or conversion of a security owned by the Fund at the time of
sale.
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. A repurchase agreement may be
viewed as a type of secured lending by the Fund which typically involves the
acquisition by the Fund of government securities or other 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 Fund will 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. Repurchase agreements will be transacted only with large,
well-capitalized and well-established United States financial institutions whose
financial condition will be continuously monitored by the management of the Fund
subject to procedures established by the Trustees. In addition, the collateral
will be maintained in a segregated account and will be marked-to-market daily to
determine that the full 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 maintain full collateralization. In the event of a default or
bankruptcy by a selling financial institution, the Fund will seek to liquidate
such collateral. However, the exercise 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, amount to more than 10% of its total assets. The Fund's
investments in repurchase agreements may at times be substantial when, in the
view of the Investment Manager or the Sub-Adviser, liquidity or other
considerations warrant.
OPTIONS AND FUTURES TRANSACTIONS
As discussed in the Prospectus, the Fund may write (sell) covered call
options and covered put options on eligible portfolio securities (and the
currencies in which they are denominated) and stock indexes to hedge against
potential changes in the market value of its investments (or anticipated
investments) and to aid in achieving its investment objective. For hedging
(including anticipatory hedging) purposes, the Fund may purchase put and call
options on eligible portfolio securities (and the currencies in which they are
denominated) and purchase and sell financial futures contracts and options on
such contracts.
Call and put options on U.S. Treasury notes, bonds and bills and on various
foreign currencies are listed on several U.S. and foreign securities exchanges
and are written in over-the-counter transactions
19
<PAGE>
("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 (in the U.S.) or other clearing corporation or exchange, the
underlying security or currency covered by the option at the stated exercise
price (the price per unit of the underlying security or currency) by filing an
exercise notice prior to the expiration date of the option. The writer (seller)
of the option would then have the obligation to sell, to the OCC (in the U.S.)
or other clearing corporation or exchange, the underlying security or currency
at that exercise price prior to the expiration date of the option, regardless of
its then current market price. Ownership of a listed put option would give the
Fund the right to sell the underlying security or currency to the OCC (in the
U.S.) or other clearing corporation or exchange at the stated exercise price.
Upon notice of exercise of the put option, the writer of the option would have
the obligation to purchase the underlying security or currency from the OCC (in
the U.S.) or other clearing corporation or exchange at the exercise price.
OPTIONS ON TREASURY BONDS AND NOTES. Because trading in options written on
Treasury bonds and notes tends to center on the most recently auctioned issues,
the exchanges on which such securities trade will not continue indefinitely to
introduce options with new expirations to replace expiring options on particular
issues. Instead, the expirations introduced at the commencement of options
trading on a particular issue will be allowed to run their course, with the
possible addition of a limited number of new expirations as the original ones
expire. Options trading on each issue of bonds or notes will thus be phased out
as new options are listed on more recent issues, and options representing a full
range of expirations will not ordinarily be available for every issue on which
options are traded.
OPTIONS ON TREASURY BILLS. Because a deliverable Treasury bill changes from
week to week, writers of Treasury bill calls cannot provide in advance for their
potential exercise settlement obligations by acquiring and holding the
underlying security. However, if the Fund holds a long position in Treasury
bills with a principal amount of the securities deliverable upon exercise of the
option, the position may be hedged from a risk standpoint by the writing of a
call option. For so long as the call option is outstanding, the Fund will hold
the Treasury bills in a segregated account with its Custodian, so that they will
be treated as being covered.
OPTIONS ON FOREIGN CURRENCIES. The Fund may purchase and write options on
foreign currencies for purposes similar to those involved with investing in
forward foreign currency exchange contracts. For example, in order to protect
against declines in the dollar value of portfolio securities which are
denominated in a foreign currency, the Fund may purchase put options on an
amount of such foreign currency equivalent to the current value of the portfolio
securities involved. As a result, the Fund would be enabled to sell the foreign
currency for a fixed amount of U.S. dollars, thereby "locking in" the dollar
value of the portfolio securities (less the amount of the premiums paid for the
options). Conversely, the Fund may purchase call options on foreign currencies
in which securities it anticipates purchasing are denominated to secure a set
U.S. dollar price for such securities and protect against a decline in the value
of the U.S. dollar against such foreign currency. The Fund may also purchase
call and put options to close out written option positions.
The Fund may also write call options on foreign currency to protect against
potential declines in its portfolio securities which are denominated in foreign
currencies. If the U.S. dollar value of the portfolio securities falls as a
result of a decline in the exchange rate between the foreign currency in which
it is denominated and the U.S. dollar, then a loss to the Fund occasioned by
such value decline would be ameliorated by receipt of the premium on the option
sold. At the same time, however, the Fund gives up the benefit of any rise in
value of the relevant portfolio securities above the exercise price of the
option and, in fact, only receives a benefit from the writing of the option to
the extent that the value of the portfolio securities falls below the price of
the premium received. The Fund may also write options to close out long call
option positions.
The markets in foreign currency options are relatively new and the Fund's
ability to establish and close out positions on such options is subject to the
maintenance of a liquid secondary market. While in the opinion of the management
of the Fund, the market for such options has developed sufficiently to
20
<PAGE>
ensure that the risks in connection with such options are not greater than the
risks in connection with the underlying currency, there can be no assurance that
a liquid secondary market will exist for a particular option at any specific
time. In addition, options on foreign currencies are affected by all of those
factors which influence foreign exchange rates and investments generally.
The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of the
option position may vary with changes in the value of either or both currencies
and have no relationship to the investment merits of a foreign security,
including foreign securities held in a "hedged" investment portfolio. Because
foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having to deal in an
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information available is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(i.e., less than $1 million) where rates may be less favorable. The interbank
market in foreign currencies is a global, around-the-clock market. To the extent
that the U.S. options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that are not reflected in the options market.
OTC OPTIONS. Exchange-listed options are issued by the OCC (in the U.S.) 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 the 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, on stock indexes and on the
U.S. dollar and foreign currencies, without limit, in order to aid in achieving
its investment objectives. 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 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 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
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(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. The value of the premium received
will fluctuate with varying economic market conditions.
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.
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 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 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 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 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 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 mark to
market difference is maintained by the Fund in cash, U.S. Government securities
or other high grade debt obligations which the Fund holds in a segregated
account maintained at its Custodian. 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. 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 two purposes: (1) to receive the income
derived from the premiums paid by purchasers; and (2) when the Investment
Manager and/or the Sub-Adviser wishes to purchase the security 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. The potential gain on a covered put option is limited to the premium
received on the option (less the commissions paid
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on the transaction) while the potential loss equals the difference between the
exercise price of the option and the current market price of the underlying
securities when the put is exercised, offset by the premium received (less the
commissions paid on the transaction).
The Fund may also purchase put options to close out written put positions in
a manner similar to call options closing purchase transactions. In addition, the
Fund may sell a put option which it has previously purchased prior to the sale
of the securities (currency) 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 other transaction costs paid on the put option
which is sold. Any 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.
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 and currencies (or related
currencies) which it holds in its portfolio only to protect itself against a
decline in the value of the security (currency). 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 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. The successful use of options depends on the
ability of the Investment Manager and/or the Sub-Adviser to forecast correctly
interest rates and market movements. If the market value of the portfolio
securities (or the currencies in which they are denominated) upon which call
options have been written increases, the Fund may receive a lower total return
from the portion of its portfolio upon which calls have been written than it
would have had such calls not been written. In writing puts, the Fund assumes
the risk of loss should the market value of the underlying securities (or the
currencies in which they are denominated) decline below the exercise price of
the option (any loss being decreased by the receipt of the premium on the option
written). During the option period, the covered call writer has, in return for
the premium on the option, given up the opportunity for capital appreciation
above the exercise price should the market price of the underlying security (or
the currency in which it is denominated) increase, but has retained the risk of
loss should the price of the underlying security (currency) decline. The covered
put writer also retains the risk of loss should the market value of the
underlying security (currency) decline below the exercise price of the option
less the premium received on the sale of the option. In both cases, the writer
has no control over the time when it may be required to fulfill its obligation
as a writer of the option. 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. A covered 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 (currency) until the option expires
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or is exercised. In addition, a covered put writer would be unable to utilize
the amount held in cash or U.S. Government or other high grade short-term debt
obligations as security for the put option for other investment purposes until
the exercise or expiration of the option.
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 (exchange) an underlying security (currency) at a
time when it might otherwise be advantageous to do so.
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.
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" in the Prospectus).
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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 Standard & Poor's 100 Index and the
Standard & Poor's 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." Options on stock indexes provide the Fund with a
means of protecting against the risk of market wide price movements. If the
Investment Manager and/or the Sub-Adviser anticipates a market decline, the Fund
would be able to 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 Investment Manager and/or the Sub-Adviser anticipates a market
rise, the Fund would be able to 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 Investment Manager and/or the Sub-Adviser to more speedily achieve changes
in the Fund's equity positions.
The Fund will be able to write put options on stock indexes only if such
positions are covered by cash, U.S. Government securities or other high grade
debt obligations equal to the aggregate exercise price of the puts, 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
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 INDEX OPTIONS. Because exercises of stock index options are
settled in cash, the Fund, as a call writer, would not be able to provide in
advance for 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
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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. The Fund will not purchase or sell commodities or
commodity futures contracts, except that the Fund may purchase and sell
financial futures contracts and related options as described herein. As stated
in the Prospectus, the Fund may purchase and sell interest rate, currency, and
index futures contracts ("futures contracts"), that are traded on U.S. and
foreign 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 U.S. and foreign securities as may exist or come into being
("index futures").
As a futures contract purchaser, the Fund incurs an obligation to take
delivery of a specified amount of the obligation underlying the contract at a
specified time in the future for a specified price. As a seller of a futures
contract, the Fund incurs an obligation to deliver the specified amount of the
underlying obligation at a specified time in return for an agreed upon price.
The Fund will purchase or sell interest rate futures contracts and bond
index futures contracts for the purpose of hedging some or all of the value of
its fixed-income portfolio securities (or anticipated portfolio securities)
against changes in prevailing interest rates. If the Investment Manager and/or
the Sub-Adviser anticipates that interest rates may rise and, concomitantly, the
price of fixed-income securities fall, the Fund may sell an interest rate
futures contract or a bond index 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 fixed-income securities the
Fund intends to purchase. Subsequently, appropriate fixed-income 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.
The Fund will purchase or sell stock index futures contracts for the purpose
of hedging some or all of its equity portfolio (or anticipated portfolio)
securities against changes in their prices. If the Investment Manager and/or the
Sub-Adviser anticipates that the prices of stock held by the Fund may fall, the
Fund may sell a stock index futures contract. Conversely, if the Investment
Manager and/or the Sub-Adviser wishes to hedge against anticipated price rises
in those stocks which the Fund intends to purchase, the Fund may purchase a
stock index futures contract.
The Fund will purchase or sell futures contracts on the U.S. dollar and on
foreign currencies to hedge against an anticipated rise or decline in the value
of the U.S. dollar or foreign currency in which a portfolio security of the Fund
is denominated vis-a-vis another currency.
In addition to the above, interest rate, index and currency 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.
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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. 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
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 broker's client but is, rather, a good faith deposit on the futures
contract which will be returned to the Fund upon the proper termination of the
futures contract. The margin deposits made are marked to market daily and the
Fund may be required to make subsequent deposits of cash or U.S. Government
securities called "variation margin," with the Fund's futures contract clearing
broker, which are reflective of price fluctuations in the futures contract.
Currently, interest rate futures contracts can be purchased on debt securities
such as U.S. Treasury Bills and Bonds, U.S. Treasury Notes with Maturities
between 6 1/2 and 10 years, GNMA Certificates and Bank Certificates of Deposit.
CURRENCY FUTURES. Generally, foreign currency futures provide for the
delivery of a specified amount of a given currency, on the exercise date, for a
set exercise price denominated in U.S. dollars or other currency. Foreign
currency futures contracts would be entered into for the same reason and under
the same circumstances as forward foreign currency exchange contracts. The
Investment Manager will assess such factors as cost spreads, liquidity and
transaction costs in determining whether to utilize futures contracts or forward
contracts its in foreign currency transactions and hedging strategy. Currently,
currency futures exist for, among other foreign currencies, the Japanese yen,
German mark, Canadian dollar, British pound, Swiss franc and European currency
unit.
Purchasers and sellers of foreign currency futures contracts are subject to
the same risks that apply to the buying and selling of futures generally. In
addition, there are risks associated with foreign currency futures contracts and
their use as a hedging device similar to those associated with options on
foreign currencies described above. Further, settlement of a foreign currency
futures contract must occur within the country issuing the underlying currency.
Thus, the Fund must accept or make delivery of the underlying foreign currency
in accordance with any U.S. or foreign restrictions or regulations regarding the
maintenance of foreign banking arrangements by U.S. residents and may be
required to pay any fees, taxes or charges associated with such delivery which
are assessed in the issuing country.
Options on foreign currency futures contracts may involve certain additional
risks. Trading options on foreign currency futures contracts is relatively new.
The ability to establish and close out positions on such options is subject to
the maintenance of a liquid secondary market. To reduce this risk, the Fund will
not purchase or write options on foreign currency futures contracts unless and
until, in the Investment Manager's opinion, the market for such options has
developed sufficiently that the risks in connection with such options are not
greater than the risks in connection with transactions in the underlying foreign
currency.
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INDEX FUTURES. As discussed in the Prospectus, the Fund may invest in index
futures contracts. 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. Currently, the initial
margin requirements range from 3% to 10% of the contract amount for index
futures. 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.
Currently, index futures contracts can be purchased or sold with respect to,
among others, the Standard & Poor's 500 Stock Price Index and the Standard &
Poor's 100 Stock Price Index on the Chicago Mercantile Exchange, the New York
Stock Exchange Composite Index on the New York Futures Exchange, the Major
Market Index on the American Stock Exchange, the Moody's Investment-Grade
Corporate Bond Index on the Chicago Board of Trade and the Value Line Stock
Index on the Kansas City Board of Trade.
OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write call and put
options on futures contracts which are traded on an exchange and enter into
closing transactions with respect to such options to terminate an existing
position. 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 the case of a call, or is less than, in the case of a put, the
exercise price of the option on the futures contract.
The writer of an option on a futures contract is required to deposit initial
and variation margin pursuant to requirements similar to those applicable to
futures contracts. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.
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 Fund's
management 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, the Fund might write a call option on an interest rate futures
contract, the underlying security of which correlates with the portion of the
portfolio the Fund 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 initial 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. 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. In accordance with the regulations of the
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Commodity Futures Trading Commission ("CFTC") under which the Fund is exempted
from registration as a commodity pool operator, the Fund may only enter into
futures contracts and options on futures contracts transactions in accordance
with the limitation described above. If the CFTC changes its regulations so that
the Fund would be permitted more latitude to write options on futures contracts
for purposes other than hedging the Fund's investments without CFTC
registration, the Fund may engage in such transactions for those purposes.
Except as described above, there are no other limitations on the use of futures
and options thereon by the Fund.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS. The
successful use of futures and related options depends on the ability of the
Investment Manager and/or the Sub-Adviser to accurately predict market, interest
rate and currency movements. 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.
In addition, if the Fund holds a long position in a futures contract or has
sold a call option on a futures contract, it will hold cash, U.S. Government
securities or other high grade debt obligations equal to the purchase price of
the contract or the exercise price of the put option (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.
If the Fund maintains a short position in a futures contract or 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 high grade debt obligations equal in value (when added to any initial
or variation margin on deposit) to the market value of the securities underlying
the futures contract or the exercise price of the option. Such position may also
be covered by owning the securities underlying the futures contract (in the case
of a stock index futures contract a portfolio of securities substantially
replicating the relevant index), or by holding a call option permitting the Fund
to purchase the same contract at a price no higher than the price at which a
short position was established.
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
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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 Investment Manager.
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 (a) temporarily, by short-term traders seeking to profit
from the difference between a contract or security price objective and their
cost of borrowed funds; (b) by investors in futures contracts electing to close
out their contracts through offsetting transactions rather than meet margin
deposit requirements; (c) by investors in futures contracts opting to make or
take delivery of underlying securities rather than engage in closing
transactions, thereby reducing liquidity of the futures market; and (d)
temporarily, by speculators who view the deposit requirements in the futures
markets as less onerous than margin requirements in the cash market. Due to the
possibility of price 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" in the
Prospectus).
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 (currencies).
NEW INSTRUMENTS. 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.
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PORTFOLIO TRADING
It is anticipated that the Fund's portfolio turnover rate will not exceed
150% in any one year. A 150% turnover rate would occur, for example, if 150% 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 in the Act as the lesser of (a) sixty-seven percent or more
of the shares present at a meeting of shareholders, if the holders of more than
fifty percent of the outstanding shares of the Fund are present or represented
by proxy, or (b) more than fifty percent of the outstanding shares of the Fund.
For purposes of the following restrictions: (i) all percentage limitations apply
immediately after a purchase or initial investment; and (ii) any subsequent
change in any applicable percentage resulting from market fluctuations or other
changes in total or net assets does not require elimination of any security from
the portfolio.
The Fund may not:
1. 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
InterCapital or MGIS owns more than 1/2 of 1% of the outstanding securities
of such issuer, and such officers, trustees or directors who own more than
1/2 of 1% own in the aggregate more than 5% of the outstanding securities of
such issuer.
2. Purchase or sell real estate or interests therein, although the Fund
may purchase readily marketable securities of issuers which engage in real
estate operations and securities which are secured by real estate or
interests therein, including real estate investment trusts.
3. 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.
4. Invest more than 5% of the value of its total assets in warrants,
including not more than 2% of such assets in warrants not listed on either
the New York or American Stock Exchange. However, the acquisition of
warrants attached to other securities is not subject to this restriction.
5. 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 the value of its total assets (not
including the amount borrowed).
6. Pledge its assets or assign or otherwise encumber them except to
secure borrowings effected within the limitations set forth in restriction
(7). (To meet the requirements of regulations in certain states, the Fund,
as a matter of operating policy but not as a fundamental policy, will limit
any pledge of its assets to 10% of its net assets so long as shares of the
Fund are being sold in those states.)
7. 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) borrowing money in accordance
with restrictions described above; (c) lending portfolio securities; (d)
entering into forward foreign currency contracts; or (e) purchasing or
selling futures contracts or options.
8. Make loans of money or securities, except: (a) by the purchase of
debt obligations 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, but not to exceed 10% of its total
assets at the time of the loan.
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9. Make short sales of securities.
10. Purchase securities on margin.
11. 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.
12. Invest for the purpose of exercising control or management of any
other issuer.
13. Invest in securities which cannot be readily resold because of legal
or contractual restrictions or which are not otherwise readily marketable
if, regarding all such securities, more than 10% of its total assets, taken
at market value, would be invested in such securities.
In addition, as stated in the Prospectus, the Fund may not purchase
securities of other United States investment companies, except in connection
with a merger, consolidation, reorganization or acquisition of assets. However,
the Fund may invest up to 10% of the value of its total assets in the securities
of foreign investment companies. The ability to invest in foreign investment
companies increases the Investment Advisers flexibility in the management of the
Fund's portfolio by enabling the Fund to access world markets, such as Korea and
Taiwan, in which markets the Fund may be limited in investing directly, due in
part to foreign laws and regulations. As a non-fundamental policy, the Fund will
not invest in other investment companies in reliance on Sections 12(d)(1)(F),
12(d)(1)(G) or 12(d)(1)(J) of the Act.
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.
PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------
Subject to the general supervision of the Fund's Trustees, the Investment
Manager and the Sub-Adviser are responsible for decisions to buy and sell
securities of 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 non-affiliated dealers
acting as principal for their own accounts without a stated commission, although
the price of the security usually includes a profit to the dealer. The Fund also
expects that securities will be purchased at times in underwritten offerings
where the price includes a fixed amount of compensation, generally referred to
as the underwriter's concession or discount. In the underwritten offerings,
securities are purchased at a fixed price which includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. On occasion, certain money market instruments may be
purchased directly from an issuer, in which case no commissions or discounts are
paid. For the fiscal years ended March 31, 1995, 1996 and 1997, the Fund paid a
total of $1,884,537, $2,671,155 and $1,593,672, respectively, in brokerage
commissions.
The Investment Manager and the Sub-Adviser currently serve as investment
advisers to a number of clients, including other investment companies, and may
in the future act as investment manager or adviser to others. It is the practice
of each of the Investment Manager and the Sub-Adviser to cause purchase and sale
transactions to be allocated among the Fund and others whose assets it manages
in such manner as it deems equitable. In making such allocations among the Fund
and other client accounts, various factors may be considered, including the
respective investment objectives, the relative size of the portfolio holdings of
the same or comparable securities, the availability of cash for investment, the
size of the investment commitments generally held and the opinions of the
persons responsible for managing the portfolios of the Fund and other client
accounts. In the case of certain initial and secondary public offerings, the
Investment Manager or the Sub-Adviser may utilize a pro rata allocation process
based on the size of the Dean Witter Funds involved and the number of shares
available from the public offering. This procedure may, under certain
circumstances, have an adverse effect on the Fund.
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The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Fund believes that a requirement always to seek the
lowest commission cost could impede effective portfolio management and preclude
the Fund and the Investment Manager and the Sub-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 Investment
Advisers rely on their experience and knowledge regarding commissions generally
charged by various brokers and on their 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.
The Fund anticipates that its transactions involving foreign securities will
be effected primarily on a principal stock exchange for such securities. Fixed
commissions on such transactions are generally higher than negotiated
commissions on domestic transactions. There is also generally less government
supervision and regulaton of foreign stock exchanges and brokers than in the
United States.
In seeking to implement the Fund's policies, the Investment Manager and the
Sub-Adviser effect transactions with those brokers and dealers who the
Investment Advisers believe provide the most favorable prices and which are
capable of providing efficient executions. If the Investment Advisers believe
such price and execution are obtainable from more than one broker or dealer,
they will give consideration to placing portfolio transactions with those
brokers and dealers who also furnish research and other services to the Fund or
the Investment Manager and the Sub-Adviser. Such services may include, but are
not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investments; wire services; and appraisals
or evaluations of portfolio securities. During the fiscal year ended March 31,
1997, the Fund directed the payment of $113,816 in brokerage commissions in
connection with transactions in the aggregate amount of $82,789,345 to brokers
because of research services provided.
Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may be
effected through DWR and other affiliated brokers and dealers. In order for an
affiliated broker or dealer to effect any portfolio transactions for the Fund,
the commissions, fees or other remuneration received by the affiliated broker or
dealer must be reasonable and fair compared to the commissions, fees or other
remuneration paid to other brokers in connection with comparable transactions
involving similar securities being purchased or sold on an exchange during a
comparable period of time. This standard would allow the affiliated broker or
dealer to receive no more than the remuneration which would be expected to be
received by an unaffiliated broker in a commensurate arm's-length transaction.
Furthermore, the Trustees of the Fund, including a majority of the Trustees who
are not interested persons of the Fund or of its Distributor, as defined in the
Act, have adopted procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to an affiliated broker or dealer
are consistent with the foregoing standard. The Fund does not reduce the
management fee it pays to InterCapital by any amount of the brokerage
commissions it may pay to an affiliated broker or dealer. During the fiscal
years ended March 31, 1995, 1996 and 1997, the Fund paid a total of $89,120,
$69,800 and $16,375, respectively, in brokerage commissions to DWR. During the
fiscal year ended March 31, 1997, the brokerage commissions paid to DWR
represented approximately 1.03% of the total brokerage commissions paid by the
Fund during the year and were paid on account of transactions having a dollar
value equal to approximately 3.87% of the aggregate dollar value of all
portfolio transactions by the Fund during the year for which commissions were
paid.
The information and services received by the Investment Manager and the
Sub-Adviser from brokers and dealers may be of benefit to the Investment Manager
and the Sub-Adviser in the management of accounts of some of their other clients
and may not in all cases benefit the Fund directly. While
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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 Investment Manager and/or the Sub-Adviser, it is of indeterminable value and
the management fee paid to the Investment Manager is not reduced by any amount
that may be attributable to the value of such services.
Under the investment advisory arrangements in effect prior to August 1,
1995, it had been contemplated that, consistent with the above policy, a
substantial amount of the Fund's brokerage transactions with respect to Pacific
Basin equities would be conducted through brokerage affiliates of DICAM, Ltd. In
order for brokerage affiliates of DICAM, Ltd. to effect any portfolio
transactions for the Fund, the commissions, fees or other remuneration received
by those affiliates had to 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 allowed such affiliates to
receive no more than the remuneration which would be expected to be received by
an unaffiliated broker in a commensurate arm's-length transaction. Furthermore,
the Trustees of the Fund, including a majority of the Trustees who are not
interested persons of the Fund or of its Distributor, as defined in the Act, had
adopted procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to such affiliates were consistent
with the foregoing standard. During the fiscal year ended March 31, 1995, the
Fund paid a total of $2,667 in brokerage commissions to affiliates of DICAM,
Ltd. The Fund did not reduce the advisory fee it paid to DICAM by any amount of
the brokerage commissions it might have paid to such affiliates. The Fund did
not pay any brokerage commissions to affiliates to DICAM, Ltd. during the period
from April 1, 1995 through July 31, 1995.
Pursuant to an order of the Securities and Exchange Commission, the Fund may
effect principal transactions in certain money market instruments with DWR. The
Fund will limit its transactions with DWR to U.S. Government and Government
Agency Securities, Bank Money Instruments (i.e. Certificates of Deposit and
Bankers' Acceptances) and Commercial Paper. Such transactions will be effected
with DWR only when the price available from DWR is better than that available
from other dealers. During its fiscal years ended March 31, 1995, 1996 and 1997,
the Fund did not effect any principal transactions with DWR.
At March 31, 1997, the Fund held common stock issued by Ford Motor Company,
which issuer was among the ten brokers or the ten dealers which executed
transactions for or with the Fund in the largest dollar amounts during the year,
with a market value of $3,137,500.
The Trustees have considered the possibilities of seeking to recapture, for
the benefit of the Fund, brokerage commissions and other expenses of possible
portfolio transactions by conducting portfolio transactions through affiliated
entities. For example, brokerage commissions received by affiliated brokers
could be offset against the advisory fees paid by the Fund. After considering
all factors deemed relevant, the Trustees made a determination not to seek such
recapture. The Trustees will reconsider this matter from time to time.
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. In addition, the Distributor may enter into similar
agreements with other selected broker-dealers. The Distributor, a Delaware
corporation, is a wholly-owned subsidiary of MSDWD. The Trustees who are not,
and were not at the time they voted, interested persons of the Fund, as defined
in the Act (the "Independent Trustees"), approved, at their meeting held on June
30, 1997, the current Distribution Agreement appointing the Distributor as
exclusive distributor of the Fund's shares and providing for the Distributor to
bear distribution expenses not borne by the Fund. By its terms, the Distribution
Agreement has an initial term ending April 30, 1998, and will remain in effect
from year to year thereafter if approved by the Board.
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<PAGE>
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 securities laws and pays filing fees in accordance with
state securities laws. The Fund and the Distributor have agreed to indemnify
each other against certain liabilities, including liabilities under the
Securities Act 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
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act (the "Plan") pursuant to which each Class, other than Class D, pays the
Distributor compensation accrued daily and payable monthly at the following
annual rates: 0.25% and 1.0% of the average daily net assets of Class A and
Class C, respectively, and, with respect to Class B, 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Fund's Class B shares since the
inception of the Fund (not including reinvestments of dividends or capital gains
distributions), less the average daily aggregate net asset value of the Fund's
Class B shares redeemed since the Fund's inception upon which a contingent
deferred sales charge has been imposed or upon which such charge has been
waived, or (b) the average daily net assets of Class B. The Distributor also
receives the proceeds of front-end sales charges and of contingent deferred
sales charges imposed on certain redemptions of shares, which are separate and
apart from payments made pursuant to the Plan (see "Purchase of Fund Shares" in
the Prospectus). The Distributor has informed the Fund that it and/or DWR
received approximately $785,000, $998,000 and $803,000 in contingent deferred
sales charges for the fiscal years ended March 31, 1995, 1996 and 1997,
respectively.
The Distributor has informed the Fund that the entire fee payable by Class A
and a portion of the fees payable by each of Class B and Class C each year
pursuant to the Plan equal to 0.25% of such Class's average daily net assets are
currently each characterized as a "service fee" under the Rules of the
Association of the National Association of Securities Dealers, Inc. (of which
the Distributor is a member). The "service fee" is a payment made for personal
service and/or the maintenance of shareholder accounts. The remaining portion of
the Plan fees payable by a Class, if any, is characterized as an "asset-based
sales charge" as such is defined by the aforementioned Rules of the Association.
The Plan was originally adopted by a majority vote of the Board of Trustees,
including all of the Independent Trustees (none of whom had or have any 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 the Plan, at their Meeting held on July 19, 1983 (continued after adjournment
on July 27, 1983), and by DWR, the then sole shareholder of the Fund, on August
6, 1983. The Plan was amended (as a result of the resignation of Daiwa as a
Distributor of the Fund's shares) by the Trustees at their Meeting held on July
17, 1984, and such amendment was ratified by the shareholders holding a
majority, as defined in the Act, of the outstanding shares of the Fund, at their
Annual Meeting held on October 1, 1984. At their meeting held on October 30,
1992, the Trustees of the Fund, including all of the Independent 12b-1 Trustees,
approved certain amendments to the Plan which took effect in January, 1993 and
were designed to reflect the fact that upon an internal reorganization the share
distribution activities theretofore performed for the Fund by DWR were assumed
by the Distributor and DWR's sales activities are now being performed pursuant
to the terms of a selected dealer agreement between the Distributor and DWR. The
amendments provide that payments under the Plan will be made to the Distributor
rather than to DWR as before the amendment, and that the Distributor in turn is
authorized to make payments
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to DWR, its affiliates or other selected broker-dealers (or direct that the Fund
pay such entities directly). The Distributor is also authorized to retain part
of such fee as compensation for its own distribution-related expenses. At their
meeting held on April 28, 1993, the Trustees of the Fund, including all of the
Independent 12b-1 Trustees, approved certain technical amendments to the Plan in
connection with recent amendments adopted by the National Association of
Securities Dealers, Inc. to its Rules of the Association. At their meeting held
on October 26, 1995, the Trustees of the Fund, including all of the Independent
12b-1 Trustees, approved an amendment to the Plan to permit payments to be made
under the Plan with respect to certain distribution expenses incurred in
connection with the distribution of shares, including personal services to
shareholders with respect to holdings of such shares, of an investment company
whose assets are acquired by the Fund in a tax-free reorganization. At their
meeting held on June 30, 1997, the Trustees, including a majority of the
Independent 12b-1 Trustees, approved amendments to the Plan to reflect the
multiple-class structure for the Fund, which took effect on July 28, 1997.
Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each calendar quarter a written report provided
by the Distributor of the amounts expended by the Distributor under the Plan and
the purpose for which such expenditures were made. The Fund accrued amounts
payable to the Distributor under the Plan, during the fiscal year ended March
31, 1997, of $4,941,515. This amount is equal to payments required to be paid
monthly by the Fund which were computed at the annual rate of 1.0% of the
average daily net assets of the Fund for the fiscal year and was calculated
pursuant to clause (b) under the Plan. This amount is treated by the Fund as an
expense in the year it is accrued. This amount represents amounts paid by Class
B only; there were no Class A or Class C shares outstanding on such date.
The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method the Fund offers four
Classes of shares, each with a different distribution arrangement as set forth
in the Prospectus.
With respect to Class A shares, DWR compensates its account executives by
paying them, from proceeds of the front-end sales charge, commissions for the
sale of Class A shares, currently a gross sales credit of up to 5.0% of the
amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value of
the respective accounts for which they are the account executives or dealers of
record in all cases. On orders of $1 million or more (for which no sales charge
was paid) or net asset value purchases by 401(k) plans or other
employer-sponsored plans qualified under Section 401(a) of the Internal Revenue
Code for which Dean Witter Trust Company ("DWTC") or Dean Witter Trust FSB
("DWTFSB") serves as Trustee or the 401(k) Support Services Group of DWR serves
as recordkeeper, the Investment Manager compensates DWR's account executives by
paying them, from its own funds, a gross sales credit of 1.0% of the amount
sold.
With respect to Class B shares, DWR compensates its account executives by
paying them, from its own funds, commissions for the sale of Class B shares,
currently a gross sales credit of up to 5.0% of the amount sold (except as
provided in the following sentence) and an annual residual commission, currently
a residual of up to 0.25% of the current value (not including reinvested
dividends or distributions) of the amount sold in all cases. In the case of
retirement plans qualified under Section 401(k) of the Internal Revenue Code and
other employer-sponsored plans qualified under Section 401(a) of the Internal
Revenue Code for which DWTC or DWTFSB serves as Trustee or the 401(k) Support
Services Group of DWR serves as recordkeeper, and which plans are opened on or
after July 28, 1997, DWR compensates its account executives by paying them, from
its own funds, a gross sales credit of 3.0% of the amount sold.
With respect to Class C shares, DWR compensates its account executives by
paying them, from its own funds, commissions for the sale of Class C shares,
currently a gross sales credit of up to 1.0% of the amount sold and an annual
residual commission, currently a residual of up to 1.0% of the current value of
the respective accounts for which they are the account executives of record.
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With respect to Class D shares other than shares held by participants in
InterCapital's mutual fund asset allocation program, the Investment Manager
compensates DWR's account executives by paying them, from its own funds,
commissions for the sale of Class D shares, currently a gross sales credit of up
to 1.0% of the amount sold. There is a chargeback of 100% of the amount paid if
the Class D shares are redeemed in the first year and a chargeback of 50% of the
amount paid if the Class D shares are redeemed in the second year after
purchase. The Investment Manager also compensates DWR's account executives by
paying them, from its own funds, an annual residual commission, currently a
residual of up to 0.10% of the current value of the respective accounts for
which they are the account executives of record (not including accounts of
participants in the InterCapital mutual fund asset allocation program).
The gross sales credit is a charge which reflects commissions paid by DWR to
its account executives and DWR's Fund-associated distribution-related expenses,
including sales compensation, and overhead and other branch office
distribution-related expenses including: (a) the expenses of operating DWR's
branch offices in connection with the sale of Fund shares, including lease
costs, the salaries and employee benefits of operations and sales support
personnel, utility costs, communications costs and the costs of stationery and
supplies, (b) the costs of client sales seminars, (c) travel expenses of mutual
fund sales coordinators to promote the sale of Fund shares and (d) other
expenses relating to branch promotion of Fund share sales. The distribution fee
that the Distributor receives from the Fund under the Plan, in effect, offsets
distribution expenses incurred on behalf of the Fund and, in the case of Class B
shares, opportunity costs, such as the gross sales credit and an assumed
interest charge thereon ("carrying charge"). In the Distributor's reporting of
the distribution expenses to the Fund, in the case of Class B shares, such
assumed interest (computed at the "broker's call rate") has been calculated on
the gross sales credit as it is reduced by amounts received by the Distributor
under the Plan and any contingent deferred sales charges received by the
Distributor upon redemption of shares of the Fund. No other interest charge is
included as a distribution expense in the Distributor's calculation of its
distribution costs for this purpose. The broker's call rate is the interest rate
charged to securities brokers on loans secured by exchange-listed securities.
The Fund paid 100% of the $4,941,515 accrued under the Plan for the fiscal
year ended March 31, 1997 to the Distributor. DWR and the Distributor estimate
that they have spent, pursuant to the Plan, $71,831,535 on behalf of the Fund
since the inception of the Fund. It is estimated that this amount was spent in
approximately the following ways: (i) 6.28% ($4,507,832)--advertising and
promotional expenses; (ii) 0.78% ($561,732)--printing of prospectuses for
distribution to other than current shareholders; and (iii) 92.94%
($66,761,971)--other expenses, including the gross sales credit and the carrying
charge, of which 16.68% ($11,137,491) represents carrying charges, 34.08%
($22,750,412) represents commission credits to DWR branch offices for payments
of commissions to account executives and 49.24% ($32,874,068) represents
overhead and other branch office distribution-related expenses. These amounts
represent amounts paid by Class B only; there were no Class A or Class C shares
outstanding on such date.
The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments at
the end of each month. The amount of each monthly payment may in no event exceed
an amount equal to a payment at the annual rate of 0.25%, in the case of Class
A, and 1.0%, in the case of Class C, of the average net assets of the respective
Class during the month. No interest or other financing charges, if any, incurred
on any distribution expenses on behalf of Class A and Class C will be
reimbursable under the Plan. With respect to Class A, in the case of all
expenses other than expenses representing the service fee, and, with respect to
Class C, in the case of all expenses other than expenses representing a gross
sales credit or a residual to account executives, such amounts shall be
determined at the beginning of each calendar quarter by the Trustees, including
a majority of the Independent 12b-1 Trustees. Expenses representing the service
fee (for Class A) or a gross sales credit or a residual to account executives
(for Class C) may be reimbursed without prior determination. In the event that
the Distributor proposes that monies shall be reimbursed for other than such
expenses, then
37
<PAGE>
in making quarterly determinations of the amounts that may be reimbursed by the
Fund, the Distributor will provide and the Trustees will review a quarterly
budget of projected distribution expenses to be incurred on behalf of the Fund,
together with a report explaining the purposes and anticipated benefits of
incurring such expenses. The Trustees will determine which particular expenses,
and the portions thereof, that may be borne by the Fund, and in making such a
determination shall consider the scope of the Distributor's commitment to
promoting the distribution of the Fund's Class A and Class C shares.
At any given time, the expenses in distributing shares of the Fund may be
more or less than the total of (i) the payments made by the Fund pursuant to the
Plan and (ii) the proceeds of contingent deferred sales charges paid by
investors upon redemption of shares. The Distributor has advised the Fund that
in the case of Class B shares such excess amount, including the carrying charge
designed to approximate the opportunity costs incurred by DWR which arise from
it having advanced monies without having received the amount of any sales
charges imposed at the time of sale of the Fund's Class B shares, totalled
$20,399,997 as of March 31, 1997, which amount constitutes 4.87% of the Fund's
net assets on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all expenses with respect to Class B shares or any
requirement that the Plan be continued from year to year, this excess amount
does not constitute a liability of the Fund. Although there is no legal
obligation for the Fund to pay expenses incurred in excess of payments made to
the Distributor under the Plan and the proceeds of contingent deferred sales
charges paid by investors upon redemption of shares, if for any reason the Plan
is terminated, the Trustees will consider at that time the manner in which to
treat such expenses. Any cumulative expenses incurred, but not yet recovered
through distribution fees or contingent deferred sales charges, may or may not
be recovered through future distribution fees or contingent deferred sales
charges.
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, had any direct or indirect
financial interest in the operation of the Plan except to the extent that the
Distributor, InterCapital, DWR, DWSC or certain of their employees may be deemed
to have such 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.
Under its terms, the Plan had an initial term ending July 31, 1984, and will
remain in effect from year to year thereafter, provided such continuance is
approved annually by a vote of the Trustees in the manner described above. Prior
to the Board's approval of amendments to the Plan to reflect the multiple class
structure for the Fund, the most recent continuance of the Plan for one year,
until April 30, 1998, was approved by the Board of Trustees of the Fund,
including a majority of the Independent 12b-1 Trustees, at a Board meeting held
on April 24, 1997. Prior to approving the continuation of the Plan, the Board
requested and received from the Distributor and reviewed all the information
which it deemed necessary to arrive at an informed determination. In making
their determination to continue the Plan, the Trustees considered: (1) the
Fund's experience under the Plan and whether such experience indicates that the
Plan is operating as anticipated; (2) the benefits the Fund had obtained, was
obtaining and would be likely to obtain under the Plan; and (3) what services
had been provided and were continuing to be provided under the Plan by the
Distributor to the Fund and its shareholders. Based upon their review, the
Trustees of the Fund, including each of the Independent 12b-1 Trustees,
determined that continuation of the Plan would be in the best interest of the
Fund and would have a reasonable likelihood of continuing to benefit the Fund
and its shareholders. In the Trustees' quarterly review of the Plan, they will
consider its continued appropriateness and the level of compensation provided
therein.
The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval of the shareholders of the
affected Class or Classes of the Fund, and all material amendments of the Plan
must also be approved by the Trustees in the manner described above. The Plan
may be terminated at any time, without payment of any penalty, by vote of a
majority of the Independent 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the Act) on not more
than thirty days' written notice to any other party to the Plan. So long as the
Plan is in effect, the election and nomination of Independent 12b-1 Trustees
shall be committed to the discretion of the Independent 12b-1 Trustees.
38
<PAGE>
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
As stated in the Prospectus, short-term debt securities with remaining
maturities of sixty days or less at the time of purchase are valued at amortized
cost, unless the Board of Trustees determines 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 sixty 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. 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.
As stated in the Prospectus, InterCapital will compute the net asset value
per share for each Class of shares of the Fund once daily as of 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 the New York Stock Exchange is open for
trading. The New York Stock Exchange currently observes the following holidays:
New Year's Day; Presidents' Day; Good Friday; Memorial Day; Labor Day;
Independence Day; Thanksgiving Day; and Christmas Day.
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
As discussed in the Prospectus, the Fund offers four Classes of shares as
follows:
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
Class A shares are sold to investors with an initial sales charge that
declines to zero for larger purchases; however, Class A shares sold without an
initial sales charge are subject to a contingent deferred sales charge ("CDSC")
of 1.0% if redeemed within one year of purchase, except in the circumstances
discussed in the Prospectus.
RIGHT OF ACCUMULATION. As discussed in the Prospectus, investors may
combine the current value of shares purchased in separate transactions for
purposes of benefitting from the reduced sales charges available for purchases
of shares of the Fund totalling at least $25,000 in net asset value. For
example, if any person or entity who qualifies for this privilege holds Class A
shares of the Fund and/or other Dean Witter Funds that are multiple class funds
("Dean Witter Multi-Class Funds") or shares of other Dean Witter Funds sold with
a front-end sales charge purchased at a price including a front-end sales charge
having a current value of $5,000, and purchases $20,000 of additional shares of
the Fund, the sales charge applicable to the $20,000 purchase would be 4.75% of
the offering price.
The Distributor must be notified by the selected broker-dealer or the
shareholder at the time a purchase order is placed that the purchase qualifies
for the reduced charge under the Right of Accumulation. Similar notification
must be made in writing by the selected broker-dealer or shareholder when such
an order is placed by mail. The reduced sales charge will not be granted if: (a)
such notification is not furnished at the time of the order; or (b) a review of
the records of the Distributor or Dean Witter Trust Company (the "Transfer
Agent") fails to confirm the investor's represented holdings.
LETTER OF INTENT. As discussed in the Prospectus, reduced sales charges are
available to investors who enter into a written Letter of Intent providing for
the purchase, within a thirteen-month period, of Class A shares of the Fund from
the Distributor or from a single Selected Broker-Dealer.
A Letter of Intent permits an investor to establish a total investment goal
to be achieved by any number of purchases over a thirteen-month period. Each
purchase of Class A shares made during the period will receive the reduced sales
commission applicable to the amount represented by the goal, as if it were a
single purchase. A number of shares equal in value to 5% of the dollar amount of
the Letter of Intent will be held in escrow by the Transfer Agent, in the name
of the shareholder. The initial purchase under a Letter of Intent must be equal
to at least 5% of the stated investment goal.
39
<PAGE>
The Letter of Intent does not obligate the investor to purchase, nor the
Fund to sell, the indicated amount. In the event the Letter of Intent goal is
not achieved within the thirteen-month period, the investor is required to pay
the difference between the sales charge otherwise applicable to the purchases
made during this period and sales charges actually paid. Such payment may be
made directly to the Distributor or, if not paid, the Distributor is authorized
by the shareholder to liquidate a sufficient number of his or her escrowed
shares to obtain such difference.
If the goal is exceeded and purchases pass the next sales charge level, the
sales charge on the entire amount of the purchase that results in passing that
level and on subsequent purchases will be subject to further reduced sales
charges in the same manner as set forth above under "Right of Accumulation," but
there will be no retroactive reduction of sales charges on previous purchases.
For the purpose of determining whether the investor is entitled to a further
reduced sales charge applicable to purchases at or above a sales charge level
which exceeds the stated goal of a Letter of Intent, the cumulative current net
asset value of any shares owned by the investor in any other Dean Witter Funds
held by the shareholder which were previously purchased at a price including a
front-end sales charge (including shares of the Fund and other Dean Witter Funds
acquired in exchange for those shares, and including in each case shares
acquired through reinvestment of dividends and distributions) will be added to
the cost or net asset value of shares of the Fund owned by the investor.
However, shares of "Exchange Funds" (see "Shareholder Services--Exchange
Privilege") and the purchase of shares of other Dean Witter Funds will not be
included in determining whether the stated goal of a Letter of Intent has been
reached.
At any time while a Letter of Intent is in effect, a shareholder may, by
written notice to the Distributor, increase the amount of the stated goal. In
that event, only shares purchased during the previous 90-day period and still
owned by the shareholder will be included in the new sales charge reduction. The
5% escrow and minimum purchase requirements will be applicable to the new stated
goal. Investors electing to purchase shares of the Fund pursuant to a Letter of
Intent should carefully read such Letter of Intent.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES
Class B shares are sold without an initial sales charge but are subject to a
CDSC payable upon most redemptions within six years after purchase. As stated in
the Prospectus, a CDSC will be imposed on any redemption by an investor if after
such redemption the current value of the investor's Class B shares of the Fund
is less than the dollar amount of all payments by the shareholder for the
purchase of Class B shares during the preceding six years (or, in the case of
shares held by certain employer-sponsored benefit plans, three years). However,
no CDSC will be imposed to the extent that the net asset value of the shares
redeemed does not exceed: (a) the current net asset value of shares purchased
more than six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years) prior to the redemption, plus (b)
the current net asset value of shares purchased through reinvestment of
dividends or distributions of the Fund or another Dean Witter Fund (see
"Shareholder Services-- Targeted Dividends"), plus (c) the current net asset
value of shares acquired in exchange for (i) shares of Dean Witter front-end
sales charge funds, or (ii) shares of other Dean Witter Funds for which shares
of front-end sales charge funds have been exchanged (see "Shareholder
Services--Exchange Privilege"), plus (d) increases in the net asset value of the
investor's shares above the total amount of payments for the purchase of Fund
shares made during the preceding six (three) years. The CDSC will be paid to the
Distributor. In addition, no CDSC will be imposed on redemptions of shares which
are attributable to reinvestment of dividends or distributions from, or the
proceeds of, certain Unit Investment Trusts.
In determining the applicability of the CDSC to each redemption, the amount
which represents an increase in the net asset value of the investor's shares
above the amount of the total payments for the purchase of shares within the
last six years (or, in the case of shares held by certain employer-sponsored
benefit plans, three years) will be redeemed first. In the event the redemption
amount exceeds such increase in value, the next portion of the amount redeemed
will be the amount which represents the net asset value of the investor's shares
purchased more than six (three) years prior to the redemption and/or
40
<PAGE>
shares purchased through reinvestment of dividends or distributions and/or
shares acquired in exchange for shares of Dean Witter front-end sales charge
funds, or for shares of other Dean Witter funds for which shares of front-end
sales charge funds have been exchanged. A portion of the amount redeemed which
exceeds an amount which represents both such increase in value and the value of
shares purchased more than six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years) prior to the redemption and/or
shares purchased through reinvestment of dividends or distributions and/or
shares acquired in the above-described exchanges will be subject to a CDSC.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of Class B shares of the Fund until
the time of redemption of such shares. For purposes of determining the number of
years from the time of any payment for the purchase of shares, all payments made
during a month will be aggregated and deemed to have been made on the last day
of the month. The following table sets forth the rates of the CDSC applicable to
most Class B shares of the Fund:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- ------------------------------------------------------------------------------------------ --------------------------
<S> <C>
First..................................................................................... 5.0%
Second.................................................................................... 4.0%
Third..................................................................................... 3.0%
Fourth.................................................................................... 2.0%
Fifth..................................................................................... 2.0%
Sixth..................................................................................... 1.0%
Seventh and thereafter.................................................................... None
</TABLE>
The following table sets forth the rates of the CDSC applicable to Class B
shares of the Fund held by 401(k) plans or other employer-sponsored plans
qualified under Section 401(a) of the Internal Revenue Code for which DWTC or
DWTFSB serves as Trustee or the 401(k) Support Services Group of DWR serves as
recordkeeper and whose accounts are opened on or after July 28, 1997:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- ------------------------------------------------------------------------------------------ --------------------------
<S> <C>
First..................................................................................... 2.0%
Second.................................................................................... 2.0%
Third..................................................................................... 1.0%
Fourth and thereafter..................................................................... None
</TABLE>
In determining the rate of the CDSC, it will be assumed that a redemption is
made of shares held by the investor for the longest period of time within the
applicable six-year or three-year period. This will result in any such CDSC
being imposed at the lowest possible rate. The CDSC will be imposed, in
accordance with the table shown above, on any redemptions within six years (or,
in the case of shares held by certain employer-sponsored benefit plans, three
years) of purchase which are in excess of these amounts and which redemptions do
not qualify for waiver of the CDSC, as described in the Prospectus.
LEVEL LOAD ALTERNATIVE--CLASS C SHARES
Class C shares are sold without a sales charge but are subject to a CDSC of
1.0% on most redemptions made within one year after purchase, except in the
circumstances discussed in the Prospectus.
NO LOAD ALTERNATIVE--CLASS D SHARES
Class D shares are offered without any sales charge on purchase or
redemption. Class D shares are offered only to those persons meeting the
qualifications set forth in the Prospectus.
41
<PAGE>
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
Upon the purchase of shares of the Fund, a Shareholder Investment Account is
opened for the investor on the books of the Fund and maintained by the Transfer
Agent. 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. Whenever a shareholder-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 other selected broker-dealer.
AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. As stated in the
Prospectus, all income dividends and capital gains distributions are
automatically paid in full and fractional shares of the applicable Class 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 distributrions will be paid, at the net asset value per share, in
shares of the applicable Class 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. To assure sufficient time to process the change, such request must
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.
TARGETED DIVIDENDS.-SM- In states where it is legally permissible,
shareholders may also have all income dividends and capital gains distributions
automatically invested in shares of any Class of an open-end Dean Witter Fund
other than Dean Witter World Wide Investment Trust or in another Class of Dean
Witter World Wide Investment Trust. Such investment will be made as described
above for automatic investment in shares of the applicable Class of the Fund, at
the net asset value per share of the selected Dean Witter Fund as of the close
of business on the payment date of the dividend or distribution and will begin
to earn dividends, if any, in the selected Dean Witter Fund 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 selected
Class of the Dean Witter Fund targeted to receive investments from dividends at
the time they enter the Targeted Dividends program. Investors should review the
prospectus of the targeted Dean Witter Fund before entering the program.
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 or following
redemption of shares of a Dean Witter money market fund, 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 account executive or the Transfer
Agent.
INVESTMENT OF DIVIDENDS OR DISTRIBUTIONS RECEIVED IN CASH. As discussed in
the Prospectus, any shareholder who receives a cash payment representing a
dividend or distribution may invest such dividend or distribution in shares of
the applicable Class at net asset value, without the imposition of a CDSC upon
redemption, by returning the check or the proceeds to the Transfer Agent within
thirty 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 proceeds by the Transfer Agent.
42
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN. As discussed in the Prospectus, 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. Any applicable CDSC will be imposed on shares redeemed under
the Withdrawal Plan (see "Purchase of Fund Shares"). Therefore, any shareholder
participating in the Withdrawal Plan will have sufficient shares redeemed from
his or her account so that the proceeds (net of any applicable CDSC) to the
shareholder will be the designated monthly or quarterly amount.
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, or amounts credited to a shareholder's DWR or other
selected broker-dealer brokerage account, within five business days after the
date of redemption. The Withdrawal Plan may be terminated at any time by the
Fund.
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. Although the
shareholder may make additional investments of $2,500 or more under the
Withdrawal Plan, withdrawals made concurrently with purchases of additional
shares may be inadvisable because of sales charges which may be applicable to
purchases or redemptions of shares (see "Purchase of Fund Shares").
Any shareholder who wishes to have payments under the Withdrawal Plan made
to a third party or sent to an address other than the one listed on the account
must send complete written instructions to the Transfer Agent to enroll in the
Withdrawal Plan. The shareholder's signature on such instructions 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 shareholder
may, at any time, change the amount and interval of withdrawal payments through
his or her DWR or other selected broker-dealer account executive or by written
notification to the Transfer Agent. In addition, the party and/or the address to
which checks are mailed may be changed by written notification to the Transfer
Agent, with signature guarantees required in the manner described above. The
shareholder may also terminate the 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 regular shareholder investment account. The shareholder may also
redeem all or part of the shares held in the Withdrawal Plan account (see
"Redemptions and Repurchases" in the Prospectus) at any time. Shareholders
wishing to enroll in the Withdrawal Plan should contact their account executive
or the Transfer Agent.
DIRECT INVESTMENTS THROUGH TRANSFER AGENT. As discussed in the Prospectus,
shareholders may make additional investments in any Class of shares of the Fund
for which they qualify at any time by sending a check in any amount, not less
than $100, payable to Dean Witter World Wide Investment Trust, and indicating
the selected Class, directly to the Fund's Transfer Agent. In the case of Class
A shares, after deduction of any applicable sales charge, the balance will be
applied to the purchase of Fund shares, and, in the case of shares of the other
Classes, the entire amount will be applied to the purchase of Fund shares, at
the net asset value per share next computed after receipt of the check or
purchase payment by the Transfer Agent. The shares so purchased will be credited
to the investor's account.
EXCHANGE PRIVILEGE
As discussed in the Prospectus, the Fund makes available to its shareholders
an Exchange Privilege whereby shareholders of each Class of shares of the Fund
may exchange their shares for shares of
43
<PAGE>
the same Class of shares of any other Dean Witter Multi-Class Fund without the
imposition of any exchange fee. Shares may also be exchanged for shares of any
of the following funds: Dean Witter Short-Term U.S. Treasury Trust, Dean Witter
Limited Term Municipal Trust, Dean Witter Short-Term Bond Fund, Dean Witter
Intermediate Term U.S. Treasury Trust and five Dean Witter Funds which are money
market funds (the foregoing nine funds are hereinafter referred to as the
"Exchange Funds"). Class A shares may also be exchanged for shares of Dean
Witter Multi-State Municipal Series Trust and Dean Witter Hawaii Municipal
Trust, which are Dean Witter Funds sold with a front-end sales charge ("FSC
Funds"). Class B shares may also be exchanged for shares of Dean Witter Global
Short-Term Income Fund Inc., Dean Witter High Income Securities and Dean Witter
National Municipal Trust, which are Dean Witter Funds offered with a CDSC ("CDSC
Funds"). Exchanges may be made after the shares of the 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. 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.
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.)
As described below, and in the Prospectus under the captions "Purchase of
Fund Shares," a CDSC may be imposed upon a redemption, depending on a number of
factors, including the number of years from the time of purchase until the time
of redemption or exchange ("holding period"). When shares of a Dean Witter
Multi-Class Fund or 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 Exchange 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 Dean Witter Multi-Class Fund or
in a CDSC Fund. However, in the case of shares exchanged into an Exchange Fund
on or after April 23, 1990, 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 incurred on or
after that date 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 Dean Witter Multi-Class Fund or a CDSC Fund from the
Exchange Fund, with no charge 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 Dean Witter
Multi-Class Fund or a CDSC Fund are reacquired. A CDSC is imposed only upon an
ultimate redemption, based upon the time (calculated as described above) the
shareholder was invested in a Dean Witter Multi-Class Fund or in a CDSC Fund. In
the case of exchanges of Class A shares which are subject to a CDSC, the holding
period also includes the time (calculated as described above) the shareholder
was invested in a FSC Fund.
When shares initially purchased in a Dean Witter Multi-Class Fund or in a
CDSC Fund are exchanged for shares of a Dean Witter Multi-Class Fund, shares of
a CDSC Fund, shares of a FSC Fund, or 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 one, three or six years (depending on the CDSC schedule applicable to the
shares) prior to the exchange, (ii) originally acquired through reinvestment of
44
<PAGE>
dividends or distributions and (iii) acquired in exchange for shares of FSC
Funds, or for shares of other Dean Witter Funds for which shares of FSC Funds
have been exchanged (all such shares called "Free Shares"), will be exchanged
first. After an exchange, all dividends earned on shares in an 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 (except that, with respect to Class B
shares, if shares held for identical periods of time but subject to different
CDSC schedules are held in the same Exchange Privilege account, the shares of
that block that are subject to a lower CDSC rate will be exchanged prior to the
shares of that block that are subject to a higher CDSC rate). 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 Prospectus under the caption
"Purchase of Fund Shares," 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, if any, in the performance of such functions. With
respect to exchanges, redemptions and 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 various selected broker-dealers 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
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.
Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment for the
Exchange Privilege account of each Class 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 the Exchange Privilege
account of each Class is $10,000 for Dean Witter Short-Term U.S. Treasury Trust,
although that fund may, at its discretion, accept purchases as low as $5,000.
The minimum initial investment for the Exchange Privilege account of each Class
is $5,000 for Dean Witter Special Value Fund. The minimum initial investment for
the Exchange Privilege account of each Class of all other Dean Witter Funds for
which the Exchange Privilege is available is $1,000.) Upon exchange into an
Exchange 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 those funds, including the check writing
feature, will not be available for funds held in that account.
The Fund and each of the other Dean Witter 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
45
<PAGE>
may be terminated or revised at any time by the Fund and/or any of the Dean
Witter Funds for which shares of the Fund have been exchanged, upon such notice
as may be required by applicable regulatory agencies (presently sixty days'
prior written notice for termination or material revision), provided that six
months' prior written notice of termination will be given to 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
without notice 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, 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.
REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------------
REDEMPTION. As stated in the Prospectus, shares of each Class of the Fund
can be redeemed for cash at any time at the net asset value per share next
determined; however, such redemption proceeds will be reduced by the amount of
any applicable CDSC. If shares are held in a shareholder's account without a
share certificate, a written request for redemption to the Fund's Transfer Agent
at P.O. Box 983, Jersey City, NJ 07303 is required. If certificates are held by
the shareholder, the shares may be redeemed by surrendering the certificates
with a written request for redemption. 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 computed (see "Purchase of Fund Shares" in the Prospectus) after it
receives the request, and certificate, if any, in good order. Any redemption
request received after such computation 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.
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
the Distributor or a selected broker-dealer for the acccount 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 new
prospectus.
REPURCHASE. As stated in the Prospectus, 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
46
<PAGE>
selected broker-dealers upon the telephonic request of the shareholder. The
repurchase price is the net asset value next computed after such purchase order
is received by DWR or other selected broker-dealer reduced by any applicable
CDSC.
PAYMENT FOR SHARES REDEEMED OR REPURCHASED. As discussed in the prospectus,
payment for shares of any Class 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 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 (including a certified or bank cashier's
check), payment of 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.
TRANSFERS OF SHARES. In the event a shareholder requests a transfer of any
shares to a new registration, such shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to the CDSC or free of such charge (and with regard to the length
of time shares subject to the charge have been held), any transfer involving
less than all of the shares in an account will be made on a pro rata basis (that
is, by transferring shares in the same proportion that the transferred shares
bear to the total shares in the account immediately prior to the transfer). The
transferred shares will continue to be subject to any applicable CDSC as if they
had not been so transferred.
REINSTATEMENT PRIVILEGE. As discussed in the Prospectus, a shareholder who
has had his or her shares redeemed or repurchased and has not previously
exercised this reinstatement privilege may, within 35 days after the date of
redemption or repurchase, reinstate any portion or all of the proceeds of such
redemption or repurchase in shares of the Fund in the same Class at the net
asset value next determined after a reinstatement request, together with the
proceeds, is received by the Transfer Agent.
Exercise of the reinstatement privilege will not affect the federal income
tax treatment of any gain or loss realized upon the redemption or repurchase,
except that if the redemption or repurchase resulted in a loss and reinstatement
is made in shares of the Fund, some or all of the loss, depending on the amount
reinstated, will not be allowed as a deduction for federal income tax purposes
but will be applied to adjust the cost basis of the shares acquired upon
reinstatement.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
As discussed in the Prospectus under "Dividends, Distributions and Taxes,"
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
include such undistributed gains in determining 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.
Gains or losses on sales of securities by the Fund generally will be
long-term capital gains or losses if the securities have been held by the Fund
for more than one year. Gains or losses on the sale of securities held for one
year or less generally will be short-term capital gains or losses.
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code (the "Code").
If so qualified, the Fund will not be subject to
47
<PAGE>
federal income tax on its net investment income and net short-term capital
gains, if any, realized during any fiscal year to the extent that it distributes
such income and capital gains to its shareholders, other than any tax resulting
from investing in passive foreign investment companies, as discussed in the
Prospectus. In addition, the Fund intends to distribute to its shareholders each
calendar year a sufficient amount of ordinary income and capital gains to avoid
the imposition of a 4% excise 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 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 year.
Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash.
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 investment 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.
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 some
portion of the 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 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. Therefore, an investor should
consider the tax implications of purchasing Fund shares immediately prior to a
distribution record date.
Dividends and interest received by the Fund may give rise to withholding and
other taxes imposed by foreign countries. Tax conventions and treaties between
certain countries and the United States may reduce or eliminate such taxes.
Investors may be entitled to claim United States foreign tax credits with
respect to such taxes, subject to certain provisions and limitations contained
in the Code. If more than 50% of the Fund's total assets at the close of its
fiscal year consist of securities of foreign corporations, the Fund will be
eligible and will determine whether or not to file an election with the Internal
Revenue Service pursuant to which shareholders of the Fund will be required to
include their respective pro rata portions of such withholding taxes in their
United States income tax returns as gross income, treat such respective pro rata
portions as taxes paid by them, and deduct such respective pro rata portions in
computing their taxable incomes or, alternatively, use them as foreign tax
credits against their United States income taxes. If it qualifies for and elects
to file such election with the Internal Revenue Service, the Fund will report
annually to its shareholders the amount per share of such withholding. The Fund
does not intend to make such election for its fiscal year ended March 31, 1997.
If the Fund invests in an entity which is classified as a "passive foreign
investment company" ("PFIC") for U.S. tax purposes, the application of certain
technical tax provisions applying to such
48
<PAGE>
companies could result in the imposition of federal income tax with respect to
such investments at the Fund level which could not be eliminated by
distributions to shareholders. It is not anticipated that any taxes on the Fund
with respect to investments in PFICs would be significant.
The Fund may be subject to taxes in foreign countries in which it invests.
In addition, if the Fund were deemed to be a resident of the United Kingdom for
United Kingdom tax purposes or if the Fund were treated as being engaged in a
trading activity through an agent in the United Kingdom, there is a risk that
the United Kingdom would attempt to tax all or a portion of the Fund's gains or
income. In light of the terms and conditions of the Investment Management and
Sub-Advisory Agreements, it is believed by the Investment Manager that any such
risk is minimal.
SPECIAL RULES FOR CERTAIN FOREIGN CURRENCY TRANSACTIONS. In general, gains
from foreign currencies and from foreign currency options, foreign currency
futures and forward foreign exchange contracts relating to investments in stock,
securities or foreign currencies are currently considered to be qualifying
income for purposes of determining whether the Fund qualifies as a regulated
investment company. It is currently unclear, however, who will be treated as the
issuer of certain foreign currency instruments or how foreign currency options,
futures, or forward currency contracts will be valued for purposes of the
regulated investment company diversification requirements applicable to the
Fund.
Under Code Section 988, special rules are provided for certain transactions
in a foreign currency other than the taxpayer's functional currency (I.E.,
unless certain special rules apply, currencies other than the U.S. dollar). In
general, foreign currency gains or losses from forward contracts, from futures
contracts that are not "regulated futures contracts," and from unlisted options
will be treated as ordinary income or loss under Code Section 988. Also, certain
foreign exchange gains or losses derived with respect to foreign fixed-income
securities are also subject to Section 988 treatment. In general, therefore,
Code Section 988 gains or losses will increase or decrease the amount of the
Fund's investment company taxable income available to be distributed to
shareholders as ordinary income, rather than increasing or decreasing the amount
of the Fund's net capital gain. Additionally, if Code Section 988 losses exceed
other investment company taxable income during a taxable year, the Fund would
not be able to make any ordinary dividend distributions.
Shareholders are urged to consult their own attorneys or tax advisers
regarding specific questions as to federal, state or local taxes.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
As discussed in the Prospectus, from time to time the Fund may quote its
"total return" in advertisements and sales literature. These figures are
computed separately for Class A, Class B, Class C and Class D shares. The Fund's
"average annual total return" represents an annualization of the Fund's total
return over a particular period and is computed by finding the annual percentage
rate which will result in the ending redeemable value of a hypothetical $1,000
investment made at the beginning of a one, five or ten year period, or for the
period from the date of commencement of operations, if shorter than any of the
foregoing. The ending redeemable value is reduced by any CDSC at the end of the
one, five or ten year or other period. For the purpose of this calculation, it
is assumed that all dividends and distributions are reinvested. The formula for
computing the average annual total return involves a percentage obtained by
dividing the ending redeemable value by the amount of the initial investment,
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 one, five and ten year periods ended March 31, 1997
were -3.13%, 6.58% and 6.02%, respectively. These returns are for Class B only;
there were no other Classes of shares outstanding on such date.
In addition to the foregoing, the Fund may advertise its total return for
each Class over different periods of time by means of aggregate, average,
year-by-year or other types of total return figures. Such calculations may or
may not reflect the imposition of the maximum front-end sales charge for Class A
or the deduction of the CDSC for each of Class B and Class C which, if
reflected, would reduce the
49
<PAGE>
performance quoted. For example, the average annual total return of the Fund may
be calculated in the manner described in the preceding paragraph, but without
deduction for any applicable sales charge. Based on this calculation, the
average annual total returns of the Fund for the one, five and ten year periods
ended March 31, 1997 were 1.61%, 6.89% and 6.02%, respectively. These returns
are for Class B only; there were no other Classes of shares outstanding on such
date.
In addition, the Fund may compute its aggregate total return for each Class
for specified periods by determining the aggregate percentage rate which will
result in the ending value of a hypothetical $1,000 investment made at the
beginning of the period. For the purpose of this calculation, it is assumed that
all dividends and distributions are reinvested. The formula for computing
aggregate total return involves a percentage obtained by dividing the ending
value (without reduction for any sales charge) by the initial $1,000 investment
and subtracting 1 from the result. Based on the foregoing calculation, the
Fund's total return for the year ended March 31, 1997 was 1.61%, the total
return for the five years ended March 31, 1997 was 39.55% and the total return
for the ten year period ended March 31, 1997 was 79.36%. These returns are for
Class B only; there were no other Classes of shares outstanding on such date.
The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1 to
the Fund's aggregate total return to date (expressed as a decimal and without
taking into account the effect of any applicable CDSC) and multiplying by
$9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as the
case may be. Investments of $10,000, $50,000 and $100,000 in the Fund at
inception would have grown to $36,853, $184,265 and $368,530, respectively, at
March 31, 1997. This information is for Class B only; there were no other
Classes of shares outstanding on
such date.
The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent organizations.
CUSTODIAN AND TRANSFER AGENT
- --------------------------------------------------------------------------------
The Chase Manhattan Bank, One Chase Plaza, New York, New York 10081 is the
Custodian of the Fund's assets. As Custodian, The Chase Manhattan Bank has
contracted with various foreign banks and depositaries to hold portfolio
securities of non-U.S. issues on behalf of the Fund. 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 of Fund shares and
Agent for shareholders under various investment plans described herein. Dean
Witter Trust Company is an affiliate of Dean Witter InterCapital Inc., the
Fund's Investment Manager, and 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, 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 from the Fund.
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
serves as the independent accountants of the Fund. The independent accountants
are responsible for auditing the annual financial statements of the Fund.
50
<PAGE>
DESCRIPTION OF SHARES OF THE FUND
- --------------------------------------------------------------------------------
The shareholders of the Fund are entitled to a full vote for each full share
held. All of the Trustees have been elected by the shareholders of the Fund,
most recently at a Special Meeting of Shareholders held on May 21, 1997. On that
date, Wayne E. Hedien was also elected as a Trustee of the Fund, with his term
to commence on September 1, 1997. 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 under certain circumstances to remove the
Trustees. The voting rights of shareholders are not cumulative, so that holders
of more than 50 percent of the shares voting can, if they choose, elect all
Trustees being selected, while the holders of the remaining shares would be
unable to elect any Trustees. The Fund is not required to hold Annual Meetings
of Shareholders.
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). The Trustees have not authorized any such
additional series or classes of shares other than as set forth in the
Prospectus.
The Declaration of Trust further 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 or its
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 liability in connection with the affairs of the Fund.
The Fund shall be of unlimited duration subject to the provisions in the
Declaration of Trust concerning termination by action of the shareholders.
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 the independent accountants, will be sent to
shareholders each year. The Fund's fiscal year ends on March 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
- --------------------------------------------------------------------------------
Barry Fink, Esq., who is an officer and the General Counsel of InterCapital,
is an officer and the General Counsel of the Fund.
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.
51
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, WARRANTS, RIGHTS
AND BONDS (96.3%)
ARGENTINA (0.2%)
ENERGY
38,500 Yacimentos Petroliferos
Fiscales S.A. (ADR)......... $ 1,020,250
---------------
AUSTRALIA (0.9%)
ENERGY
41,000 Broken Hill Proprietary Co.,
Ltd......................... 547,493
90,000 Woodside Petroleum Ltd........ 664,109
---------------
1,211,602
---------------
FOODS & BEVERAGES
740,000 Goodman Fielder Ltd........... 959,096
---------------
METALS & MINING
600,000 M.I.M. Holdings Ltd........... 805,923
262,000 Pasminco Ltd.................. 506,476
---------------
1,312,399
---------------
RETAIL
225,000 Woolworth's Ltd............... 602,675
---------------
TOTAL AUSTRALIA............... 4,085,772
---------------
AUSTRIA (0.1%)
CONSUMER PRODUCTS
2,665 Wolford AG.................... 298,093
---------------
BELGIUM (0.4%)
RESTAURANTS
1,840 Quick Restaurants S.A......... 95,714
---------------
RETAIL
35,500 G.I.B. Holdings Ltd........... 1,620,958
---------------
TOTAL BELGIUM................. 1,716,672
---------------
BRAZIL (3.1%)
BUILDING & CONSTRUCTION
103,000 Elevadores Atlas S.A.*........ 1,282,037
---------------
INVESTMENT COMPANIES
1,000,000 Brazilian Smaller Co.
Investment Trust PLC........ 1,380,000
200,000 Brazilian Smaller Co.
Investment Trust (Warrants
due 09/30/07)*.............. 146,000
---------------
1,526,000
---------------
RETAIL
80,000 Makro Atacadista S.A. (GDS)... 1,073,600
10,000 Makro Atacadista S.A. (ADR) -
144A**...................... 134,200
---------------
1,207,800
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
STEEL
1,904,000 Companhia Siderurgica Paulista
(Pref.)*.................... $ 1,310,627
---------------
STEEL & IRON
202,000 Companhia Acos Especia
(ADR)*...................... 925,160
---------------
TELECOMMUNICATIONS
24,705 Telecomunicacoes Brasileiras
S.A. (ADR).................. 2,529,174
---------------
UTILITIES - ELECTRIC
120,000 Centrais Electricas
Brasileiras S.A. (Class B)
(ADR)....................... 2,478,000
25,000,000 Companhia de Electricidade do
Estado da Bahia*............ 1,885,903
---------------
4,363,903
---------------
TOTAL BRAZIL.................. 13,144,701
---------------
CANADA (0.4%)
ENERGY
19,500 Talisman Energy, Inc.*........ 578,664
---------------
INDUSTRIALS
22,000 Canadian Pacific, Ltd......... 524,982
---------------
MANUFACTURING
35,000 Bombardier, Inc. (Class B).... 633,033
---------------
TOTAL CANADA.................. 1,736,679
---------------
CHILE (0.5%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
100,000 Compania Cervecerias Unidas
S.A. (ADR).................. 1,975,000
---------------
COLOMBIA (0.2%)
FINANCIAL SERVICES
3,465 Corporacion Financiera Valle
(GDR)....................... 12,994
---------------
RETAIL
42,000 Gran Cadena Almacenes (Class
B) (Pref.) (ADR) - 144A**... 414,750
30,000 Gran Cadena Almacenes (ADR) (B
Shares)..................... 292,500
---------------
707,250
---------------
TOTAL COLOMBIA................ 720,244
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
DENMARK (1.3%)
BUSINESS & PUBLIC SERVICES
20,200 Kobenhavns Lufthavne AS....... $ 2,093,232
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
2,270 Oticon Holding AS............. 381,357
---------------
PHARMACEUTICALS
29,000 Novo-Nordisk AS (Series B).... 3,027,900
---------------
TOTAL DENMARK................. 5,502,489
---------------
FRANCE (4.3%)
BUILDING MATERIALS
9,500 IMETAL........................ 1,475,646
---------------
BUSINESS & PUBLIC SERVICES
1,770 Grand Optical-Photoservice.... 273,996
---------------
COMMERCIAL SERVICES
550 Altran Technologies S.A....... 201,258
---------------
CONSUMER PRODUCTS
12,500 Societe BIC S.A............... 1,892,933
---------------
ENERGY
20,000 Elf Aquitaine S.A............. 2,043,925
---------------
FINANCIAL SERVICES
12,000 Cetelem Group................. 1,417,641
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
28,000 SEITA......................... 1,007,722
---------------
HEALTH & PERSONAL CARE
10,640 Sanofi S.A.................... 1,036,486
---------------
INSURANCE
41,000 AXA-UAP....................... 2,703,560
45,000 Scor.......................... 1,829,171
---------------
4,532,731
---------------
RETAIL
2,070 Carrefour Supermarche......... 1,279,910
6,122 Castorama Dubois
Investissement.............. 962,865
FRF 250 Castorama Dubois
Investissement 3.15% due
01/01/03 (Conv.)............ 54,331
2,129 Guilbert S.A.................. 395,935
---------------
2,693,041
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
STEEL & IRON
80,250 Usinor Sacilor................ $ 1,307,651
---------------
TEXTILES
2,433 Deveaux S.A................... 413,688
---------------
WHOLESALE & INTERNATIONAL TRADE
42 Bertrand Faure................ 2,131
---------------
TOTAL FRANCE.................. 18,298,849
---------------
GERMANY (3.8%)
APPAREL
14,400 Adidas AG..................... 1,628,648
---------------
AUTOMOBILES
2,750 Bayerische Motoren Werke (BMW)
AG.......................... 2,215,756
5,975 Volkswagen AG................. 3,287,944
---------------
5,503,700
---------------
CHEMICALS
37,746 BASF AG....................... 1,419,277
28,000 Bayer AG...................... 1,159,773
18,300 SGL Carbon AG................. 2,501,164
---------------
5,080,214
---------------
ENTERTAINMENT
1,043 CeWe Color Holdings AG........ 264,563
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
11,580 Berentzen-Gruppe AG (Pref.)... 352,480
---------------
FURNITURE
3,420 Moebel Walther AG............. 183,706
---------------
INSURANCE
1,452 Marschollek Lautenschlaeger
und Partner AG (Pref.)...... 303,312
---------------
PHARMACEUTICALS
10,500 Gehe AG....................... 717,547
---------------
RETAIL
12,732 Fielmann AG (Pref.)........... 355,630
---------------
TEXTILES
360 Jil Sander AG (Pref.)......... 217,010
3,000 Puma AG*...................... 111,549
---------------
328,559
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
UTILITIES - ELECTRIC
18,500 Veba AG....................... $ 1,042,868
---------------
TOTAL GERMANY................. 15,761,227
---------------
HONG KONG (4.4%)
BANKING
302,000 Guoco Group Ltd............... 1,492,734
77,200 HSBC Holdings PLC............. 1,793,356
39,000 Wing Hang Bank Ltd............ 171,128
---------------
3,457,218
---------------
CONGLOMERATES
367,000 Hutchison Whampoa Ltd......... 2,758,918
305,000 Wharf (Holdings) Ltd.......... 1,167,082
---------------
3,926,000
---------------
REAL ESTATE
241,000 Cheung Kong (Holdings) Ltd.... 2,122,738
580,000 China Overseas Land &
Investment.................. 314,379
140,000 China Resources Enterprise
Ltd......................... 301,732
271,000 Great Eagle Holdings Ltd...... 895,336
172,260 HKR International Ltd......... 227,869
823,000 Hong Kong Land Holdings
Ltd......................... 1,909,360
211,000 New World Development Co.,
Ltd......................... 1,138,244
---------------
6,909,658
---------------
TELECOMMUNICATIONS
1,188,400 Hong Kong Telecommunications
Ltd......................... 2,032,148
---------------
TRANSPORTATION
980,000 China Travel International
Investment Ltd.............. 471,117
---------------
UTILITIES
339,000 China Light & Power Co.,
Ltd......................... 1,491,870
---------------
TOTAL HONG KONG............... 18,288,011
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
INDIA (0.4%)
AUTOMOBILES
30,500 Mahindra & Mahindra Ltd.
(GDR)*...................... $ 343,125
---------------
BANKS
21,200 State Bank of India (GDR)*.... 473,820
---------------
METALS & MINING
22,000 Hindalco Industries Ltd.
(GDR)*...................... 709,500
---------------
TOTAL INDIA................... 1,526,445
---------------
INDONESIA (0.3%)
BANKS
921,000 PT Bank Negara................ 527,656
---------------
MEDICAL PRODUCTS & SUPPLIES
278,000 PT Kalbe Farma................ 312,750
---------------
TOBACCO
55,000 PT Hanjaya Mandala
Sampoerna................... 257,813
---------------
TOTAL INDONESIA............... 1,098,219
---------------
ITALY (1.4%)
APPAREL
7,500 Fila Holding SpA (ADR)........ 407,813
---------------
APPLIANCES & HOUSEHOLD DURABLES
19,375 Industrie Natuzzi SpA (ADR)... 462,578
---------------
ELECTRICAL EQUIPMENT
32,945 Gewiss SpA.................... 465,869
---------------
ELECTRONICS
17,047 Saes Getters Di Risp.......... 166,808
12,791 Saes Getters SpA.............. 183,165
---------------
349,973
---------------
ENERGY
298,000 Ente Nazionale Idrocarburi
SpA......................... 1,506,891
---------------
TELECOMMUNICATIONS
260,000 Seat SpA*..................... 89,976
260,000 Stet Societa Finanziaria
Telefonica SpA.............. 1,130,907
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
546,000 Telecom Italia Mobile SpA..... $ 1,563,723
---------------
2,784,606
---------------
VISION CARE & INSTRUMENTS
7,235 De Rigo SpA (ADR)*............ 49,741
---------------
TOTAL ITALY................... 6,027,471
---------------
JAPAN (17.7%)
AUTO PARTS
20,000 Bridgestone Metalpha Corp..... 156,730
---------------
AUTOMOBILES
433,000 Mitsubishi Motors Corp........ 3,207,796
150,000 Suzuki Motor Co., Ltd......... 1,454,193
---------------
4,661,989
---------------
BANKING
94,000 Asahi Bank, Ltd............... 590,822
133,000 Bank of Tokyo-Mitsubishi
Ltd......................... 2,073,760
161,000 Sumitomo Trust & Banking...... 1,287,688
---------------
3,952,270
---------------
BUILDING & CONSTRUCTION
2,000 Kaneshita Construction........ 14,461
322,000 Sekisui House Ltd............. 3,147,681
---------------
3,162,142
---------------
BUILDING MATERIALS
10,000 Nichiha Corp.................. 144,611
---------------
BUSINESS & PUBLIC SERVICES
5,000 Chuo Warehouse Co............. 34,052
3,000 Nichii Gakkan Co.............. 131,120
67,000 Secom......................... 3,761,916
---------------
3,927,088
---------------
CHEMICALS
600,000 Asahi Chemical Industrial Co.,
Ltd......................... 3,121,667
62,000 Kaneka Corp................... 330,086
323,000 Nippon Shokubai K.K. Co....... 1,925,788
30,000 Sumitomo Bakelite Co., Ltd.... 198,740
---------------
5,576,281
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE
12,000 Ines.......................... $ 142,511
12,000 Meitec........................ 240,427
---------------
382,938
---------------
CONGLOMERATES
554,000 Mitsui & Co................... 4,063,920
13,000 Yamae Hisano.................. 102,609
---------------
4,166,529
---------------
ELECTRICAL EQUIPMENT
195,000 Canon, Inc.................... 4,174,745
40,000 Kyocera Corp.................. 2,268,541
30,700 Mabuchi Motor Co.............. 1,510,446
150,000 Matsushita Electric Industrial
Co., Ltd.................... 2,338,827
11,000 Mitsui High-Tec............... 223,057
Y 1,000K Nippon Densan Corp. 1.00%
09/30/03 (Conv.)............ 9,937
16,500 Nitto Electric Works.......... 254,605
66,000 Rohm Co....................... 4,868,153
---------------
15,648,311
---------------
ELECTRONICS
46,000 Sony Corp..................... 3,214,574
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
25,000 Toshiba Ceramics Co., Ltd..... 168,242
---------------
ENGINEERING & CONSTRUCTION
119,000 Kajima Corp................... 553,757
---------------
FINANCIAL SERVICES
405,000 New Japan Securities Co.,
Ltd.*....................... 1,047,019
150,000 Nomura Securities Co., Ltd.... 1,660,204
---------------
2,707,223
---------------
HEALTH & PERSONAL CARE
11,000 Aderans Co., Ltd.............. 238,164
20,000 Kawasumi Laboratories, Inc.... 242,365
15,000 Terumo Corp................... 212,070
---------------
692,599
---------------
INSURANCE
312,000 Tokio Marine & Fire Insurance
Co.......................... 3,175,957
---------------
LEISURE
3,000 H.I.S. Co., Ltd............... 135,725
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MACHINE TOOLS
6,600 Nitto Kohki Co., Ltd.......... $ 188,221
---------------
MACHINERY
18,000 Aichi Corp.................... 103,975
273,980 Asahi Diamond Industries Co.,
Ltd......................... 2,180,242
225,000 Minebea Co., Ltd.............. 1,872,273
439,000 Mitsubishi Heavy Industries,
Ltd......................... 2,855,025
30,000 OSG Corp...................... 178,139
---------------
7,189,654
---------------
METALS
10,000 Sumitomo Sitix Corp........... 175,311
---------------
REAL ESTATE
15,000 Chubu Sekiwa Real Estate,
Ltd......................... 130,877
400 Japan Industrial Land
Development................. 4,363
9,000 Sekiwa Real Estate............ 59,622
---------------
194,862
---------------
RETAIL
6,000 Circle K Japan Co., Ltd....... 252,060
9,300 Ministop Co., Ltd............. 235,919
11,000 Olympic Corp.................. 227,500
11,000 Shimachu Co., Ltd............. 257,715
---------------
973,194
---------------
STEEL & IRON
1,500,000 NKK Corp...................... 3,150,751
20,000 Yamato Kogyo Co., Ltd......... 171,272
---------------
3,322,023
---------------
TELECOMMUNICATIONS
446 DDI Corp...................... 2,814,073
363 Nippon Telegraph & Telephone
Corp........................ 2,554,314
---------------
5,368,387
---------------
TELECOMMUNICATIONS EQUIPMENT
3,000 Forval Corp................... 76,587
Y 11,000K Forval Corp. 1.35% 09/30/03
(Conv.)..................... 82,647
---------------
159,234
---------------
TEXTILES
192,000 Kuraray Co., Ltd.............. 1,549,588
70,000 Nitto Boseki Co., Ltd......... 202,456
---------------
1,752,044
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TRANSPORTATION
369,000 Nippon Yusen Kabushiki
Kaish....................... $ 1,305,720
100,000 Yamato Transport Co., Ltd..... 985,620
---------------
2,291,340
---------------
WHOLESALE DISTRIBUTOR
3,960 Fujimi, Inc................... 207,950
---------------
TOTAL JAPAN................... 74,249,186
---------------
MALAYSIA (3.4%)
AGRICULTURE
218,000 IOI Corporated Berhad......... 362,337
---------------
AUTO PARTS
74,000 MBM Resources Berhad.......... 203,001
---------------
AUTOMOBILES
168,000 Diversified Resources
Berhad...................... 548,975
78,000 Perusahaan Otomobil Nasional
Berhad...................... 494,029
---------------
1,043,004
---------------
BANKING
334,000 Arab Malaysian Finance
Berhad...................... 1,010,570
163,000 DCB Holdings Berhad........... 614,834
456,250 Public Finance Berhad......... 754,649
---------------
2,380,053
---------------
BUILDING & CONSTRUCTION
139,999 Gamuda Berhad................. 530,898
18,666 Gamuda Berhad (Warrants)...... 6,024
280,000 Metacorp Berhad............... 807,649
191,000 Road Builder (M) Holdings
Berhad...................... 1,109,569
272,000 Sunway City Berhad............ 696,789
---------------
3,150,929
---------------
ENTERTAINMENT
120,000 Berjaya Sports Toto Berhad.... 614,814
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
40,000 RJ Reynolds Berhad............ 98,435
---------------
LEISURE
1,022,000 Magnum Corporation Berhad..... 1,937,793
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MACHINERY
100,000 UMW Holdings Berhad........... $ 552,687
338,000 United Engineers Malaysia
Berhad...................... 2,945,296
---------------
3,497,983
---------------
REAL ESTATE
186,000 Bandar Raya Developments
Berhad...................... 366,177
---------------
TELECOMMUNICATIONS
50,000 Telekom Malaysia Berhad....... 389,301
---------------
TOTAL MALAYSIA................ 14,043,827
---------------
MEXICO (2.9%)
BUILDING & CONSTRUCTION
220,000 International de Ceramica S.A.
de C.V. (ADR)*.............. 304,829
---------------
BUILDING MATERIALS
430,000 Cemex, S.A. de C.V. (B
Shares)..................... 1,739,570
---------------
ENGINEERING & CONSTRUCTION
274,240 Corporacion GEO S.A. de C.V.
(Series B)*................. 1,310,528
---------------
FINANCIAL SERVICES
4,500,000 Grupo Financiero Bancomer S.A.
de C.V. (B Shares)*......... 1,609,987
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
124,000 Sigma Alimentos S.A........... 1,332,491
---------------
FOODS & BEVERAGES
273,000 Fomento Economico Mexicano
S.A. de C.V. (Series B)..... 1,211,416
---------------
RETAIL
380,000 Nacional de Drogas S.A. de
C.V. (Series L)............. 1,369,153
---------------
TELECOMMUNICATIONS
87,800 Telefonos de Mexico S.A. de
C.V. (Series L) (ADR)....... 3,380,300
---------------
TOTAL MEXICO.................. 12,258,274
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
NETHERLANDS (4.4%)
APPLIANCES & HOUSEHOLD DURABLES
32,986 Ahrend Groep NV............... $ 2,105,527
---------------
BANKING
52,771 ING Groep NV.................. 2,076,116
---------------
CHEMICALS
11,900 Akzo Nobel.................... 1,706,697
---------------
CONSUMER PRODUCTS
23,770 Gucci Group NV................ 1,736,182
---------------
INSURANCE
22,936 Aegon NV...................... 1,612,993
---------------
MACHINERY
14,740 Aalberts Industries NV........ 337,425
---------------
MEDIA
100,000 Elsevier NV................... 1,623,722
35,000 PolyGram NV................... 1,757,081
60,000 Ver Ned Utigev Ver Bezit NV... 1,232,964
18,620 Wolters Kluwer NV............. 2,239,277
---------------
6,853,044
---------------
MERCHANDISING
31,215 Koninklijke Ahold NV.......... 2,171,955
---------------
TOTAL NETHERLANDS............. 18,599,939
---------------
NORWAY (0.3%)
DATA PROCESSING
18,979 System Etikettering AS........ 275,432
---------------
ENTERTAINMENT
77,001 NCL Holdings AS (Series A)*... 238,627
---------------
MACHINERY
26,485 Tomra Systems AS.............. 532,503
---------------
OIL DRILLING & SERVICES
39,830 Hitec AS*..................... 225,794
---------------
TOTAL NORWAY.................. 1,272,356
---------------
PERU (0.3%)
FOOD SERVICES
400,000 Consorcio Alimentos Fabril
Pacifico.................... 573,585
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
755,917 Cerveceria Backus & Johnston
S.A.*....................... $ 676,046
---------------
TOTAL PERU.................... 1,249,631
---------------
PHILIPPINES (0.2%)
BANKING
3,129 Metropolitan Bank & Trust
Co.......................... 81,373
2,600 Union Bank of Philippines*.... 2,863
---------------
84,236
---------------
CONGLOMERATES
44,712 Ayala Corp. - 144A** *........ 380,052
---------------
ENGINEERING & CONSTRUCTION
405,000 DMCI Holdings, Inc.*.......... 288,297
---------------
OIL DRILLING & SERVICES
112,500 First Philippine Holdings
Corp. (B Shares)............ 207,147
---------------
TRANSPORTATION
26,400 International Container
Terminal.................... 15,786
---------------
TOTAL PHILIPPINES............. 975,518
---------------
PORTUGAL (0.1%)
MEDIA
30,000 Journalgeste*................. 320,532
226,000 TVI-Televisao Independente
S.A.*....................... 114,026
---------------
TOTAL PORTUGAL................ 434,558
---------------
SINGAPORE (1.2%)
BANKING
107,000 Overseas Chinese Banking
Corp., Ltd.................. 1,274,074
---------------
ELECTRICAL EQUIPMENT
110,000 Amtek Engineering Ltd......... 192,662
52,500 Venture Manufacturing Ltd..... 128,660
---------------
321,322
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE
139,000 City Developments Ltd......... $ 1,231,707
334,000 DBS Land Ltd.................. 1,142,236
---------------
2,373,943
---------------
SHIPBUILDING
126,000 Sembawang Corp., Ltd.......... 606,231
---------------
TRANSPORTATION
79,000 Singapore Airlines Ltd........ 634,406
---------------
TOTAL SINGAPORE............... 5,209,976
---------------
SOUTH AFRICA (0.6%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
120,000 Malbak Ltd.................... 597,420
---------------
METALS & MINING
21,500 De Beers Consolidated Mines
Ltd. (Units)++.............. 783,322
35,200 Rustenburg Platinum Holdings
Ltd......................... 569,541
---------------
1,352,863
---------------
OIL & GAS
50,000 Sasol Ltd..................... 534,623
---------------
TOTAL SOUTH AFRICA............ 2,484,906
---------------
SOUTH KOREA (0.2%)
ELECTRICAL EQUIPMENT
14,353 Samsung Electronics Co. (GDS)
(Non-voting) - 144A**....... 292,683
---------------
UTILITIES - ELECTRIC
15,000 Korea Electric Power Corp..... 436,730
---------------
TOTAL SOUTH KOREA............. 729,413
---------------
SPAIN (1.6%)
BANKING
25,000 Banco Bilbao Vizcaya S.A...... 1,509,500
11,250 Banco Popular Espanol S.A..... 2,012,491
---------------
3,521,991
---------------
FINANCIAL SERVICES
13,300 Corporacion Financiera Alba... 1,307,537
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
NATURAL GAS
4,360 Gas Natural SDG S.A. (Series
E).......................... $ 947,786
---------------
TELECOMMUNICATIONS
45,000 Telefonica de Espana S.A...... 1,081,457
---------------
TOTAL SPAIN................... 6,858,771
---------------
SWEDEN (2.0%)
AUTO TRUCKS & PARTS
73,400 Scania AB (A Shares).......... 1,829,434
---------------
BUILDING & CONSTRUCTION
5,570 Cardo AB...................... 178,860
---------------
COMMERCIAL SERVICES
42,700 Securitas AB (Series "B"
Free)....................... 1,216,300
---------------
INSURANCE
58,700 Scandia Forsakrings AB........ 1,838,487
---------------
PHARMACEUTICALS
30,000 Astra AB (B Shares)........... 1,402,479
---------------
STEEL & IRON
7,713 SinterCast AB (Series "A"
Free)*...................... 154,606
---------------
TELECOMMUNICATIONS
49,500 Ericsson (L.M.) Telephone Co.
AB (Series "B" Free)........ 1,736,384
---------------
TOTAL SWEDEN.................. 8,356,550
---------------
SWITZERLAND (2.0%)
CHEMICALS - SPECIALTY
2,253 Ciba Specialty Chemicals AG... 185,157
---------------
ELECTRICAL EQUIPMENT
1,280 ABB AG - Bearer............... 1,529,282
---------------
INSURANCE
1,000 Schweizerische
Rueckversicherungs-
Gesellschaft................ 1,056,630
---------------
PHARMACEUTICALS
2,253 Novartis AG................... 2,778,907
312 Roche Holding AG.............. 2,681,519
---------------
5,460,426
---------------
TOTAL SWITZERLAND............. 8,231,495
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TAIWAN (0.5%)
BUILDING MATERIALS
9,087 Asia Cement Corp. (GDR)....... $ 168,109
---------------
INVESTMENT COMPANIES
100,000 Paribas Emerging Markets Fund
- Taiwan Series*............ 1,043,000
---------------
RETAIL
$ 180K Far Eastern Department Stores
3.00% due 07/06/01 (Conv.) -
144A**...................... 188,550
---------------
STEEL
12,230 China Steel Corp.............. 236,039
---------------
TRANSPORTATION
$ 300K Yang Ming Marine
Transportation 2.00% due
10/06/01 (Conv.) - 144A**... 344,250
---------------
TOTAL TAIWAN.................. 1,979,948
---------------
THAILAND (0.1%)
OIL RELATED
18,000 PTT Exploration & Production
PCL......................... 267,746
---------------
UNITED KINGDOM (12.3%)
AEROSPACE & DEFENSE
46,000 British Aerospace PLC......... 1,027,747
353,000 Rolls-Royce PLC............... 1,318,328
63,000 Smiths Industries PLC......... 821,424
25,800 Vickers PLC................... 101,425
---------------
3,268,924
---------------
APPLIANCES & HOUSEHOLD DURABLES
53,500 MFI Furniture Group PLC....... 127,068
---------------
AUTO PARTS
24,800 Laird Group PLC............... 144,006
---------------
AUTO PARTS - ORIGINAL EQUIPMENT
231,900 BBA Group PLC................. 1,375,065
---------------
BANKING
119,000 Abbey National PLC............ 1,452,169
93,000 National Westminster Bank
PLC......................... 1,056,436
---------------
2,508,605
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
BUILDING & CONSTRUCTION
243,000 Blue Circle Industries PLC.... $ 1,651,841
80,000 CRH PLC....................... 791,482
---------------
2,443,323
---------------
BUILDING MATERIALS
51,800 Scapa Group................... 187,091
---------------
BUSINESS & PUBLIC SERVICES
59,000 Reuters Holdings PLC.......... 599,180
---------------
CHEMICALS
120,000 Albright & Wilson PLC......... 307,616
57,585 Allied Colloids Group PLC..... 116,019
125,000 Courtaulds PLC................ 743,242
---------------
1,166,877
---------------
COMPUTER SOFTWARE
54,363 SEMA Group PLC................ 1,224,168
---------------
CONGLOMERATES
250,000 BTR PLC....................... 1,093,365
---------------
CONSUMER PRODUCTS
110,000 Vendome Luxury Group PLC
(Units)++................... 918,918
---------------
DISTRIBUTION
24,100 Cowie Group PLC............... 155,140
---------------
ELECTRICAL EQUIPMENT
224,000 General Electric Co. PLC...... 1,372,251
221,000 The BICC Group PLC............ 966,535
---------------
2,338,786
---------------
ENERGY
284,000 Lasmo PLC..................... 1,107,157
233,000 Shell Transport & Trading Co.
PLC......................... 4,140,946
---------------
5,248,103
---------------
ENTERTAINMENT
72,000 Granada Group PLC............. 1,083,832
30,100 London Clubs International
PLC......................... 205,104
---------------
1,288,936
---------------
FOOD PROCESSING
146,000 Associated British Foods
PLC......................... 1,312,923
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
71,000 Bass PLC...................... 946,084
33,650 Devro International PLC....... 167,561
186,000 Guinness PLC.................. 1,567,517
---------------
2,681,162
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOREST PRODUCTS, PAPER & PACKING
29,700 David S. Smith Holdings PLC... $ 121,135
100,000 De La Rue PLC................. 912,366
---------------
1,033,501
---------------
HEALTH & PERSONAL CARE
169,000 Glaxo Wellcome PLC............ 3,089,334
236,833 Medeva PLC.................... 1,187,073
---------------
4,276,407
---------------
HEALTHCARE
6,600 Amersham International PLC.... 133,838
---------------
INSURANCE
109,000 General Accident PLC.......... 1,460,027
195,000 Prudential Corp. PLC.......... 1,814,249
223,000 Royal & Sun Alliance Insurance
Group PLC................... 1,640,080
---------------
4,914,356
---------------
MACHINERY
10,700 Spirax-Sarco Engineering
PLC......................... 114,536
290,000 Tomkins PLC................... 1,292,054
---------------
1,406,590
---------------
MANUFACTURING
65,700 Bunzl PLC..................... 234,604
9,100 Vosper Thornycroft Holdings
PLC......................... 132,960
---------------
367,564
---------------
MEDIA
6,500 Daily Mail & General Trust
(Class A)................... 175,676
15,900 EMAP PLC...................... 202,363
54,000 Flextech PLC*................. 550,171
85,100 General Cable PLC*............ 254,394
45,100 Mirror Group PLC.............. 154,396
---------------
1,337,000
---------------
MERCHANDISING
107,000 Next PLC...................... 1,091,907
---------------
PHARMACEUTICALS
117,430 British Biotech PLC*.......... 482,799
---------------
REAL ESTATE
20,400 Bradford Properties Trust
PLC......................... 97,572
54,375 Pillar Property Investments
PLC......................... 197,727
---------------
295,299
---------------
RESTAURANTS
9,600 Compass Group PLC............. 103,312
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
484,000 British Telecommunications
PLC......................... $ 3,535,852
371,730 Securicor PLC................. 1,790,148
224,000 Vodafone Group PLC............ 1,023,684
---------------
6,349,684
---------------
TRANSPORTATION
31,400 Associated British Ports
Holdings PLC................ 141,956
102,000 British Airways PLC........... 1,096,019
15,800 Forth Ports PLC............... 168,223
14,088 Stagecoach Holdings PLC....... 156,918
---------------
1,563,116
---------------
TOTAL UNITED KINGDOM.......... 51,437,013
---------------
UNITED STATES (24.7%)
AEROSPACE & DEFENSE
25,000 Boeing Co..................... 2,465,625
43,000 General Motors Corp. (Class
H).......................... 2,332,750
125,000 Watkins-Johnson Co............ 2,859,375
---------------
7,657,750
---------------
AUTOMOBILES
100,000 Ford Motor Co................. 3,137,500
55,000 General Motors Corp........... 3,045,625
---------------
6,183,125
---------------
BANKING
30,000 Citicorp...................... 3,247,500
---------------
BEVERAGES - SOFT DRINKS
56,000 Coca Cola Co.................. 3,129,000
103,000 PepsiCo Inc................... 3,360,375
---------------
6,489,375
---------------
COMMUNICATIONS - EQUIPMENT & SOFTWARE
48,000 Cisco Systems, Inc.*.......... 2,310,000
---------------
COMPUTER SOFTWARE
32,000 Microsoft Corp.*.............. 2,932,000
69,000 Oracle Corp.*................. 2,656,500
---------------
5,588,500
---------------
COMPUTERS - PERIPHERAL EQUIPMENT
59,000 Seagate Technology, Inc.*..... 2,647,625
---------------
COMPUTERS - SYSTEMS
64,000 Hewlett-Packard Co............ 3,408,000
---------------
CONGLOMERATES
51,000 Litton Industries, Inc.*...... 2,052,750
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT
56,000 Emerson Electric Co........... $ 2,520,000
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
97,000 Micron Technology, Inc........ 3,928,500
---------------
ENERGY
28,000 Exxon Corp.................... 3,017,000
21,000 Mobil Corp.................... 2,743,125
26,000 Texaco, Inc................... 2,847,000
---------------
8,607,125
---------------
FINANCIAL SERVICES
81,000 Federal National Mortgage
Assoc....................... 2,926,125
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
30,000 Procter & Gamble Co........... 3,450,000
---------------
FOREST PRODUCTS, PAPER & PACKING
54,000 International Paper Co........ 2,099,250
---------------
HARDWARE & TOOLS
75,000 Black & Decker Corp........... 2,409,375
---------------
HEALTHCARE - MISCELLANEOUS
36,000 PacifiCare Health Systems,
Inc. (Class B)*............. 3,105,000
---------------
HEALTHCARE PRODUCTS & SERVICES
65,000 Baxter International, Inc..... 2,803,125
79,500 Columbia/HCA Healthcare
Corp........................ 2,673,187
---------------
5,476,312
---------------
HOUSEWARES
60,000 Tupperware Corp............... 2,010,000
---------------
INDUSTRIALS
39,000 Honeywell, Inc................ 2,647,125
---------------
INSURANCE
29,000 American International Group,
Inc......................... 3,403,875
---------------
OFFICE EQUIPMENT
18,000 Ikon Office Solutions, Inc.... 603,000
---------------
PAPER & FOREST PRODUCTS
51,000 Champion International
Corp........................ 2,320,500
9,000 Unisource Worldwide, Inc...... 138,375
---------------
2,458,875
---------------
PHARMACEUTICALS
49,000 Johnson & Johnson............. 2,590,875
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1997, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
RETAIL
370,000 Charming Shoppes, Inc.*....... $ 1,988,750
54,000 Home Depot, Inc............... 2,889,000
---------------
4,877,750
---------------
RETAIL - SPECIALTY
90,000 Circuit City Stores, Inc...... 3,003,750
---------------
SAVINGS & LOAN ASSOCIATIONS
45,000 Golden West Financial Corp.... 2,823,750
---------------
STEEL & IRON
193,000 Bethlehem Steel Corp.*........ 1,592,250
---------------
UTILITIES - GAS
72,000 Williams Co., Inc............. 3,204,000
---------------
TOTAL UNITED STATES........... 103,321,562
---------------
VENEZUELA (0.1%)
TELECOMMUNICATIONS
13,000 Compania Anonima Nacional
Telefonos de Venezuela
(Class D) (ADR)............. 378,625
---------------
TOTAL COMMON AND PREFERRED
STOCKS, WARRANTS, RIGHTS AND
BONDS
(IDENTIFIED COST
$371,453,404)................. 403,539,416
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (3.1%)
U.S. GOVERNMENT AGENCY
$ 13,000 Federal Home Loan Mortgage
Corp. 6.50% due04/01/97
(Amortized Cost
$13,000,000)................ 13,000,000
---------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
PURCHASED PUT OPTION ON FOREIGN CURRENCY (0.2%)
DEM 24,165 July 17, 1997/DEM 1.611
(IDENTIFIED COST
$287,250)................... $ 627,750
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$384,740,654) (B)........... 99.6% 417,167,166
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES....... 0.4 1,791,008
----- ------------
NET ASSETS.................. 100.0% $418,958,174
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
GDS Global Depository Shares.
K In thousands.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
generally stocks with attached warrants.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $62,160,161 and the
aggregate gross unrealized depreciation is $29,733,649, resulting in net
unrealized appreciation of $32,426,512.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT MARCH 31, 1997:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
- ------------------------------------------------------------
<S> <C> <C> <C>
L 339,840 $ 550,031 04/01/97 $ (6,627)
CHF 350,179 $ 238,606 04/01/97 (3,230)
NLG 1,396,751 $ 733,935 04/01/97 (9,651)
$ 885,414 Y 109,437,189 04/01/97 (1,288)
Y 83,303,207 $ 673,702 04/02/97 708
--------------
Net Unrealized Depreciation........... $ (20,088)
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
SUMMARY OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense....................... $ 10,926,674 2.6%
Agriculture............................... 362,337 0.1
Apparel................................... 2,036,461 0.5
Appliances & Household Durables........... 2,695,173 0.6
Auto Parts................................ 503,738 0.1
Auto Parts - Original Equipment........... 1,375,065 0.3
Auto Trucks & Parts....................... 1,829,434 0.4
Automobiles............................... 17,734,944 4.2
Banking................................... 22,502,064 5.4
Banks..................................... 1,001,476 0.2
Beverages - Soft Drinks................... 6,489,375 1.5
Building & Construction................... 10,522,120 2.5
Building Materials........................ 3,715,028 0.9
Business & Public Services................ 6,893,496 1.7
Chemicals................................. 13,530,069 3.2
Chemicals - Specialty..................... 185,157 0.0
Commercial Services....................... 1,417,557 0.3
Communications - Equipment & Software..... 2,310,000 0.6
Computer Software......................... 7,195,606 1.7
Computers - Peripheral Equipment.......... 2,647,625 0.6
Computers - Systems....................... 3,408,000 0.8
Conglomerates............................. 11,618,696 2.8
Consumer Products......................... 4,846,126 1.2
Currency Options.......................... 627,750 0.2
Data Processing........................... 275,432 0.1
Distribution.............................. 155,140 0.0
Electrical Equipment...................... 23,116,253 5.6
Electronics............................... 3,564,547 0.9
Electronics - Semiconductors/
Components.............................. 4,096,742 1.0
Energy.................................... 20,216,561 4.9
Engineering & Construction................ 2,152,581 0.5
Entertainment............................. 2,406,940 0.6
Financial Services........................ 9,981,506 2.4
Food Processing........................... 1,312,923 0.3
Food Services............................. 573,585 0.1
Food, Beverage, Tobacco & Household
Products................................ 12,552,113 3.0
Foods & Beverages......................... 2,170,511 0.5
Forest Products, Paper & Packing.......... 3,132,751 0.7
Furniture................................. 183,706 0.0
Hardware & Tools.......................... 2,409,375 0.6
Health & Personal Care.................... 6,005,493 1.4
Healthcare................................ 133,838 0.0
Healthcare - Miscellaneous................ 3,105,000 0.7
Healthcare Products & Services............ 5,476,312 1.3
Housewares................................ 2,010,000 0.5
Industrials............................... 3,172,107 0.8
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Insurance................................. $ 20,838,342 5.0%
Investment Companies...................... 2,569,000 0.6
Leisure................................... 2,073,517 0.5
Machine Tools............................. 188,221 0.0
Machinery................................. 12,964,155 3.1
Manufacturing............................. 1,000,596 0.2
Media..................................... 8,624,602 2.1
Medical Products & Supplies............... 312,750 0.1
Merchandising............................. 3,263,862 0.8
Metals.................................... 175,311 0.0
Metals & Mining........................... 3,374,762 0.8
Natural Gas............................... 947,786 0.2
Office Equipment.......................... 603,000 0.1
Oil & Gas................................. 534,623 0.1
Oil Drilling & Services................... 432,941 0.1
Oil Related............................... 267,746 0.1
Paper & Forest Products................... 2,458,875 0.6
Pharmaceuticals........................... 13,682,028 3.3
Real Estate............................... 10,139,940 2.4
Restaurants............................... 199,026 0.1
Retail.................................... 14,596,000 3.5
Retail - Specialty........................ 3,003,750 0.7
Savings & Loan Associations............... 2,823,750 0.7
Shipbuilding.............................. 606,231 0.1
Steel..................................... 1,546,666 0.4
Steel & Iron.............................. 7,301,690 1.7
Telecommunications........................ 26,030,067 6.2
Telecommunications Equipment.............. 159,234 0.0
Textiles.................................. 2,494,290 0.6
Tobacco................................... 257,812 0.1
Transportation............................ 5,320,014 1.3
U.S. Government Agency.................... 13,000,000 3.1
Utilities................................. 1,491,869 0.4
Utilities - Electric...................... 5,843,501 1.4
Utilities - Gas........................... 3,204,000 0.8
Vision Care & Instruments................. 49,741 0.0
Wholesale & International Trade........... 2,131 0.0
Wholesale Distributor..................... 207,950 0.1
----------------- -----
$ 417,167,166 99.6%
----------------- -----
----------------- -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks............................. $ 399,753,868 95.4%
Convertible Bonds......................... 679,715 0.1
Preferred Stocks.......................... 2,953,809 0.7
Purchased Option Outstanding.............. 627,750 0.2
Rights and Warrants....................... 152,024 0.1
Short-Term Investments.................... 13,000,000 3.1
----------------- -----
$ 417,167,166 99.6%
----------------- -----
----------------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $384,740,654)............................ $417,167,166
Cash (including $2,055,643 in foreign currency)............. 2,579,859
Receivable for:
Investments sold........................................ 1,767,206
Dividends............................................... 769,133
Shares of beneficial interest sold...................... 447,053
Foreign withholding taxes reclaimed..................... 133,780
Interest................................................ 16,622
Prepaid expenses and other assets........................... 26,219
------------
TOTAL ASSETS........................................... 422,907,038
------------
LIABILITIES:
Payable for:
Investments purchased................................... 2,252,884
Shares of beneficial interest repurchased............... 473,058
Plan of distribution fee................................ 367,786
Investment management fee............................... 367,786
Accrued expenses and other payables......................... 487,350
------------
TOTAL LIABILITIES...................................... 3,948,864
------------
NET ASSETS:
Paid-in-capital............................................. 381,184,491
Net unrealized appreciation................................. 32,426,602
Net investment loss......................................... (1,043,971)
Accumulated undistributed net realized gain................. 6,391,052
------------
NET ASSETS............................................. $418,958,174
------------
------------
NET ASSET VALUE PER SHARE,
24,260,898 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$17.27
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $642,014 foreign withholding tax)......... $ 7,280,358
Interest.................................................... 234,481
-----------
TOTAL INCOME........................................... 7,514,839
-----------
EXPENSES
Plan of distribution fee.................................... 4,941,515
Investment management fee................................... 4,936,673
Transfer agent fees and expenses............................ 860,950
Custodian fees.............................................. 496,155
Professional fees........................................... 174,924
Shareholder reports and notices............................. 150,159
Registration fees........................................... 47,655
Trustees' fees and expenses................................. 16,595
Other....................................................... 36,856
-----------
TOTAL EXPENSES......................................... 11,661,482
-----------
NET INVESTMENT LOSS.................................... (4,146,643)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments............................................. 19,297,729
Foreign exchange transactions........................... 1,668,371
-----------
NET GAIN............................................... 20,966,100
-----------
Net change in unrealized appreciation/depreciation on:
Investments............................................. (8,008,589)
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ (713,283)
-----------
NET DEPRECIATION....................................... (8,721,872)
-----------
NET GAIN............................................... 12,244,228
-----------
NET INCREASE................................................ $ 8,097,585
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED FOR THE YEAR
MARCH 31, ENDED
1997 MARCH 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss......................................... $ (4,146,643) $ (1,087,335)
Net realized gain........................................... 20,966,100 41,362,377
Net change in unrealized appreciation....................... (8,721,872) 36,965,641
------------- --------------
NET INCREASE........................................... 8,097,585 77,240,683
Distributions from net realized gain........................ (31,533,387) (692,945)
Net decrease from transactions in shares of beneficial
interest.................................................. (77,594,246) (68,817,900)
------------- --------------
NET INCREASE (DECREASE)................................ (101,030,048) 7,729,838
NET ASSETS:
Beginning of period......................................... 519,988,222 512,258,384
------------- --------------
END OF PERIOD
(INCLUDING A NET INVESTMENT LOSS OF $1,043,971 AND
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF
$903,011, RESPECTIVELY)................................. $ 418,958,174 $ 519,988,222
------------- --------------
------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter World Wide Investment Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is total
return on its assets primarily through long-term capital growth and to a lesser
extent, from income. The Fund seeks to achieve its objective by investing in
common stocks and equivalents, preferred stocks, bonds and other debt
obligations of domestic and foreign companies, governments and international
organizations. The Fund was organized as a Massachusetts business trust on July
7, 1983 and commenced operations on October 31, 1983.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange; the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") or Morgan
Grenfell Investment Services Limited (the "Sub-Adviser") that sale and 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); and (4)
short-term debt securities having a maturity date of more than sixty days at
time of purchase are valued on a mark-to-market basis until sixty days prior to
maturity and thereafter at amortized cost based on their value on the 61st day.
Short-term debt securities having a maturity date of sixty days or less at the
time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined
67
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
by the identified cost method. Dividend income and other distributions are
recorded on the ex-dividend date except for certain dividends on foreign
securities which are recorded as soon as the Fund is informed after the
ex-dividend date. Discounts are accreted over the life of the respective
securities. Interest income is accrued daily.
C. OPTION ACCOUNTING PRINCIPLES -- When the Fund purchases a call or put option,
the premium paid is recorded as an investment which is subsequently
marked-to-market to reflect the current market value. If a purchased option
expires, the Fund will realize a loss to the extent of the premium paid. If the
Fund enters into a closing sale transaction, a gain or loss is realized for the
difference between the proceeds from the sale and the cost of the option. If a
put option is exercised, the cost of the security or currency sold upon exercise
will be increased by the premium originally paid. If a call option is exercised,
the cost of the security purchased upon exercise will be increased by the
premium originally paid.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
68
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 1.0% to the portion of daily net assets not exceeding $500
million and 0.95% to the portion of daily net assets in excess of $500 million.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services as the Fund may reasonably
require in the conduct of its business and also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.
Under a Sub-Advisory Agreement between the Sub-Adviser and the Investment
Manager, the Sub-Adviser provides the Fund with investment advice and portfolio
management relating to the Fund's non-U.S. investments, subject to the overall
supervision of the Investment Manager. As compensation for its services provided
pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Adviser monthly compensation equal to 40% of its monthly compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to
69
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
Rule 12b-1 under the Act pursuant to which the Fund pays the Distributor
compensation, accrued daily and payable monthly, at an annual rate of 1.0% of
the lesser of: (a) the average daily aggregate gross sales of the Fund's shares
since the Fund's inception (not including reinvestment of dividend or capital
gain distributions) less the average daily aggregate net asset value of the
Fund's shares redeemed since the Fund's inception upon which a contingent
deferred sales charge has been imposed or upon which such charge has been
waived; or (b) the Fund's average daily net assets. Amounts paid under the Plan
are paid to the Distributor to compensate it for the services provided and the
expenses borne by it and others in the distribution of the Fund's shares,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and other employees or selected broker-dealers who engage in or
support distribution of the Fund's shares or who service shareholder accounts,
including overhead and telephone expenses, printing and distribution of
prospectuses and reports used in connection with the offering of the Fund's
shares to other than current shareholders and preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may be compensated under the Plan for its opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses incurred by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered by the Distributor may be recovered through future
distribution fees from the Fund and contingent deferred sales charges from the
Fund's shareholders.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
contingent deferred sales charges paid by investors upon redemption of shares,
if for any reason the Plan is terminated, the Trustees will consider at that
time the manner in which to treat such expenses. The Distributor has advised the
Fund that such excess amounts, included carrying charges, totaled $20,399,997 at
March 31, 1997.
The Distributor has informed the Fund that for the year ended March 31, 1997, it
received approximately $803,000 in contingent deferred sales charges from
redemptions of the Fund's shares.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended March 31, 1997 aggregated
$232,691,627 and $356,048,768, respectively.
70
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
For the year ended March 31, 1997, the Fund incurred brokerage commissions of
$16,375 with DWR for portfolio transactions executed on behalf of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $148,000.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended March 31, 1997 included
in Trustees' fees and expenses in the Statement of Operations amounted to
$1,290. At March 31, 1997, the Fund had an accrued pension liability of $49,252
which is included in accrued expenses in the Statement of Assets and
Liabilities.
During the year ended March 31, 1997, foreign regulatory authorities initiated
an investigation involving an individual associated with an affiliate of the
Fund's Sub-Adviser. Although this investigation did not at any time involve the
Fund or the Investment Manager, the Sub-Adviser's affiliate purchased from the
Fund two securities whose separate holdings by the affiliate had become part of
the investigation. These securities represented only a very small percentage of
the Fund's portfolio (approximately one-twentieth of one percent) and were
purchased by the Sub-Adviser's affiliate at the Fund's cost plus interest.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Sold............................................................. 3,614,740 $ 65,929,566 5,790,518 $ 100,249,259
Reinvestment of distributions.................................... 1,730,254 29,812,283 37,871 656,681
---------- ------------- ---------- -------------
5,344,994 95,741,849 5,828,389 100,905,940
Repurchased...................................................... (9,610,570) (173,336,095) (9,903,997) (169,723,840)
---------- ------------- ---------- -------------
Net decrease..................................................... (4,265,576) $ (77,594,246) (4,075,608) $ (68,817,900)
---------- ------------- ---------- -------------
---------- ------------- ---------- -------------
</TABLE>
71
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997, CONTINUED
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $296,000 during fiscal 1997.
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses and income from the mark-to-market of
passive foreign investment companies ("PFICs") and permanent book/tax
differences primarily attributable to a net operating loss, foreign currency
losses and tax adjustments on PFICs sold by the Fund. To reflect
reclassifications arising from permanent book/tax differences for the year ended
March 31, 1997, accumulated undistributed net realized gain was charged
$4,586,743, paid-in-capital was credited $581,060 and net investment loss was
credited $4,005,683.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At March 31, 1997, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions.
72
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31
---------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period............. $ 18.23 $ 15.71 $ 18.20 $14.72 $14.65 $14.57 $14.84 $14.98 $14.93 $17.36
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
Net investment
income (loss)...... (0.18) (0.06) (0.02) (0.05) -- -- 0.23 0.11 0.08 0.04
Net realized and
unrealized gain
(loss)............. 0.45 2.60 (1.83) 4.24 0.39 1.05 0.18 0.82 1.24 (0.07)
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
Total from
investment
operations......... 0.27 2.54 (1.85) 4.19 0.39 1.05 0.41 0.93 1.32 (0.03)
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
Less dividends and
distributions:
From net
investment
income........... -- -- -- -- -- (0.05) (0.23) (0.11) (0.08) (0.15)
In excess of net
investment
income........... -- -- (0.02) -- -- -- -- -- -- --
From net realized
gain............. (1.23) (0.02) (0.39) (0.71) (0.32) (0.92) (0.45) (0.96) (1.19) (2.25)
In excess of net
realized gain.... -- -- (0.23) -- -- -- -- -- -- --
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions...... (1.23) (0.02) (0.64) (0.71) (0.32) (0.97) (0.68) (1.07) (1.27) (2.40)
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period.......... $ 17.27 $ 18.23 $ 15.71 $18.20 $14.72 $14.65 $14.57 $14.84 $14.98 $14.93
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT
RETURN+............. 1.61% 16.20% (10.37)% 28.40% 2.69% 7.33% 2.80% 6.09% 9.31% 0.39%
RATIOS TO AVERAGE
NET ASSETS:
Expenses............ 2.36% 2.45% 2.41% 2.40% 2.42% 2.27% 2.29% 2.21% 2.18% 2.13%
Net investment
income (loss)...... (0.84)% (0.21)% (0.32)% (0.61)% 0.06% 0.03% 1.53% 0.70% 0.50% 0.23%
SUPPLEMENTAL DATA:
Net assets, end of
period, in
millions........... $419 $520 $512 $494 $218 $263 $279 $306 $312 $368
Portfolio turnover
rate............... 48% 126% 67% 68% 139% 89% 68% 75% 67% 70%
Average commission
rate paid.......... $0.0116 $0.0169 -- -- -- -- -- -- -- --
<FN>
- ---------------------
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
73
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER WORLD WIDE INVESTMENT TRUST
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 Dean Witter World Wide Investment
Trust (the "Fund") at March 31, 1997, 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 ten years in the
period then ended, 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 March
31, 1997 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
MAY 16, 1997
1997 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended March 31, 1997, the Fund paid to
shareholders $1.12 per share from long-term capital gains. For
such period, 27.07% of the ordinary dividends qualified for the
dividends received deduction available to corporations.
74
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The response to this item is incorporated herein by reference to Exhibits 1
and 2 under Item 16 below and by reference to Item 27 of, Post-Effective
Amendment No. 6 to Registrant's Registration Statement on Form N-1A, dated July
28, 1997, which was filed electronically pursuant to Regulation S-T on July 16,
1997 ("Post-Effective Amendment No. 6") as an amendment to Registrant's
Registration Statement on Form N-1A (File Nos. 811-7458 and 33-59004) (the
"Registration Statement").
ITEM 16. EXHIBITS
<TABLE>
<C> <S> <C>
(1) Declaration of Trust dated January 8, 1993 ("Declaration of Trust") (incorporated herein by
reference to Exhibit 1 of Post-Effective Amendment No. 4); Amendment Establishing and
Designating Additional Classes of Shares to Declaration of Trust (incorporated herein by
reference to Exhibit 1 to Post-Effective Amendment No. 6)
(2) Amended and Restated By-Laws of Registrant dated as of October 23, 1997
(3) Not Applicable
(4) Copy of Agreement and Plan of Reorganization (filed herewith as Exhibit A to the Proxy
Statement and Prospectus)
(5) Not Applicable
(6) Investment Management Agreement (incorporated herein by reference to Exhibit 5 to Post-
Effective Amendment No. 6)
(7) (a) Distribution Agreement between Registrant and Dean Witter Distributors Inc.
(incorporated herein by reference to Exhibit 6(a) to Post-Effective Amendment No.
6)
(b) Multiple Class Distribution Agreement between Registrant and Dean Witter
Distributors, Inc. (incorporated herein by reference to Exhibit 6(b) of
Post-Effective Amendment No. 6)
(c) Form of Selected Dealer Agreement
(8) Not Applicable
(9) (a) Custody Agreement dated April 28, 1993 (incorporated herein by reference to
Exhibit 8 to Post-Effective Amendment No. 4)
(b) Amended and Restated Transfer Agency and Services Agreement between Registrant and
Dean Witter Trust Company
(10) (a) Amended and Restated Plan of Distribution pursuant to Rule 12b-1, dated July 28,
1997 (incorporated herein by reference to Exhibit 15 to Post-Effective Amendment
No. 6)
(b) Dean Witter Funds Multiple Class Plan pursuant to Rule 18f-3 (incorporated herein
by reference to Exhibit 18 to Post-Effective Amendment No. 6)
(11) (a) Opinion and consent of Gordon Altman Butowsky Weitzen Shalov & Wein
(b) Opinion and consent of Lane Altman & Owens
</TABLE>
C-1
<PAGE>
<TABLE>
<C> <S> <C>
(12) Opinion and consent of Gordon Altman Butowsky Weitzen Shalov & Wein regarding tax matters
(13) Form of Services Agreement between Dean Witter InterCapital Inc. and Dean Witter Services
Company Inc. (incorporated herein by reference to Exhibit 9 to Post-Effective Amendment No.
6)
(14) Consent of Independent Accountants
(15) Not Applicable
(16) Powers of Attorney
(17) (a) Registrant's Rule 24f-2 Notice pursuant to Rule 24f-2 under the Investment Company
Act of 1940, for its fiscal year ended March 31, 1997 (incorporated herein by
reference to Form 24f-2 filed with the Securities and Exchange Commission on April
29, 1997)
(b) Form of Proxy
</TABLE>
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of the prospectus which is a part of
this registration statement on Form N-14 by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c) of the Securities Act of
1933, the reoffering prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
2. The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to this
registration statement on Form N-14 and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act of
1933, each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial BONA FIDE offering of them.
C-2
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the registrant, in the City of New York and State of
New York, on the 29th day of January 1998.
DEAN WITTER GLOBAL DIVIDEND GROWTH
SECURITIES
By: /s/ BARRY FINK
-----------------------------------
VICE PRESIDENT AND SECRETARY
As required by the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C>
1. Principal Executive Officer
President, Chief Executive
/s/ CHARLES A. FIUMEFREDDO Officer, Trustee and Chairman January 29, 1998
------------------------------
2. Principal Financial Officer
Treasurer and Principal
/s/ THOMAS F. CALOIA Accounting Officer January 29, 1998
------------------------------
3. Majority of Trustees
/s/ MICHAEL BOZIC Trustee January 29, 1998
------------------------------
/s/ EDWIN J. GARN Trustee January 29, 1998
------------------------------
/s/ JOHN R. HAIRE Trustee January 29, 1998
------------------------------
/s/ WAYNE E. HEDIEN Trustee January 29, 1998
------------------------------
/s/ MANUEL H. JOHNSON Trustee January 29, 1998
------------------------------
/s/ MICHAEL E. NUGENT Trustee January 29, 1998
------------------------------
/s/ JOHN L. SCHROEDER Trustee January 29, 1998
------------------------------
/s/ PHILIP J. PURCELL Trustee January 29, 1998
------------------------------
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT NUMBER
- ---------- ---------------------------------------------------------------------------------------------------- ----------
<C> <S> <C>
(2) Amended and Restated By-Laws of Registrant dated October 23, 1997
(7) (c) Form of Selected Dealer Agreement
(9) (b) Amended and Restated Transfer Agency and Services Agreement between Registrant and Dean Witter
Trust Company
(11) (a) Opinion and consent of Gordon Altman Butowsky Weitzen Shalov & Wein
(b) Opinion and consent of Lane Altman & Owens
(12) Opinion and consent of Gordon Altman Butowsky Weitzen Shalov & Wein regarding tax matters
(14) Consent of Independent Accountants
(16) Powers of Attorney
(17) (b) Form of Proxy
</TABLE>
<PAGE>
BY-LAWS
OF
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
AMENDED AND RESTATED AS OF OCTOBER 23, 1997
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 Dean Witter
Global Dividend Growth Securities dated January 8, 1993.
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 not less than twenty-five percent
(25%) of all the votes entitled to be cast at such meeting, 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.
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.
1
<PAGE>
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 issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall be requisite and shall constitute a quorum for the transaction of
business. In the absence of a quorum, the Shareholders present or represented
by proxy and entitled to vote thereat shall have the power to adjourn the
meeting from time to time. The Shareholders present in person or represented
by proxy at any meeting and entitled to vote thereat also shall have the
power to adjourn the meeting from time to time if the vote required to
approve or reject any proposal described in the original notice of such
meeting is not obtained (with proxies being voted for or against adjournment
consistent with the votes for and against the proposal for which the required
vote has not been obtained). The affirmative vote of the holders of a
majority of the Shares then present in person or represented by proxy shall
be required to adjourn any meeting. Any adjourned meeting may be reconvened
without further notice or change in record date. At any reconvened meeting at
which a quorum shall be present, any business may be transacted that might
have been transacted at the meeting as originally called.
SECTION 3.5. Voting Rights, Proxies. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy, 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 the Corporations and Associations Law of
the State of Maryland.
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.
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SECTION 3.10. Presence at Meetings. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other
electronic means.
ARTICLE IV
TRUSTEES
SECTION 4.1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as shall be
determined from time to time by the Trustees without further notice. Special
meetings of the Trustees may be called at any time by the President and shall
be called by the President or the Secretary upon the written request of any
two (2) Trustees.
SECTION 4.2. Notice of Special Meetings. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.
SECTION 4.3. Telephone Meetings. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.
SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.
SECTION 4.5. Action by Trustees Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required 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.
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SECTION 4.8. Indemnification of Trustees, Officers, Employees and
Agents. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.
(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.
(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
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(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--
(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:
(1) authorized in the specific case by the Trustees; and
(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by
the Trust; and
(3) either, (i) such person provides a security for his undertaking,
or
(ii) the Trust is insured against losses by reason of any lawful
advances, or
(iii) a determination, based on a review of readily available
facts, that there is reason to believe that such person ultimately
will be found entitled to indemnification, is made by either--
(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no 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
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at any meeting, whether or not they constitute a quorum, may appoint a
Trustee to act in place of such absent member. Each such committee shall keep
a record of its proceedings.
The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.
All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.
SECTION 5.2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.
SECTION 5.3. Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.
ARTICLE VI
OFFICERS
SECTION 6.1. Executive Officers. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute, 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 President 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 President to
the extent provided by the Trustees with respect to officers appointed by the
President.
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.
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SECTION 6.6. The Chairman. The Chairman shall preside at all meetings of
the Shareholders and of the Trustees, 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.
SECTION 6.7. The President. (a) The President shall be the chief executive
officer of the Trust; 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 one or more Vice Presidents such of his powers and
duties at such times and in such manner as he may deem advisable.
(b) In the absence of the Chairman, the President shall preside at all
meetings of the shareholders and the Board of Trustees; and he shall perform
such other duties as the Board of Trustees 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 President, 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
President may from time to time prescribe.
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 President.
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
President, 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 President, 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
President 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 President, 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 President, 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 President, 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 President, 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.
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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 President, or a Vice President, and countersigned by the
Secretary or an Assistant Secretary or the Treasurer and an Assistant
Treasurer of the Trust; shall be sealed with the seal; and shall contain such
recitals as may be required by law. Where any certificate is signed by a
Transfer Agent or by a Registrar, the signature of such officers and the seal
may be facsimile, printed or engraved. The Trust may, at its option,
determine not to issue a certificate or certificates to evidence Shares owned
of record by any Shareholder.
In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and 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:
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(1) to receive and hold the securities owned by the Trust and deliver
the same upon written or electronically transmitted order;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct;
(3) to disburse such funds upon orders or vouchers;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.
SECTION 9.2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
Shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Location of Books and Records. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.
SECTION 11.2 Record Date. The Trustees may fix in advance a date as the
record date for the purpose of determining the Shareholders entitled to (i)
receive notice of, or to vote at, any meeting of Shareholders, or (ii)
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. The
record date, in any case, shall not be more than one hundred eighty (180)
days, and in the case of a meeting of Shareholders not less than ten (10)
days, prior to the date on which such meeting is to be held or the date on
which such other particular action requiring determination of Shareholders is
to be taken, as the case may be. In the case of a meeting of Shareholders,
the meeting date set forth in the notice to Shareholders accompanying the
proxy statement shall be the date used for purposes of calculating the 180
day or 10 day period, and any adjourned meeting may be reconvened without a
change in record date. In lieu of fixing a record date, the Trustees may
provide that the transfer books shall be closed for a stated period but not
to exceed, in any case, twenty (20) days. If the transfer books are closed
for the purpose of determining Shareholders entitled to notice of a vote at a
meeting of Shareholders, such books shall be closed for at least ten (10)
days immediately preceding the meeting.
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SECTION 11.3. Seal. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.
SECTION 11.4. Fiscal Year. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.
SECTION 11.5. Orders for Payment of Money. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.
ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS
The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.
ARTICLE XIII
AMENDMENTS
These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.
ARTICLE XIV
DECLARATION OF TRUST
The Declaration of Trust establishing Dean Witter Global Dividend Growth
Securities, dated January 8, 1993, a copy of which is on file in the office
of the Secretary of the Commonwealth of Massachusetts, provides that the name
Dean Witter Global Dividend Growth Securities 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 Dean
Witter Global Dividend Growth Securities 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 Dean Witter Global Dividend Growth Securities, but the Trust
Estate only shall be liable.
10
<PAGE>
DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
SELECTED DEALERS AGREEMENT
Gentlemen:
Dean Witter Distributors Inc. (the "Distributor") has a distribution
agreement (the "Distribution Agreement") with Dean Witter Global Dividend Growth
Securities, a Massachusetts business trust (the "Fund"), pursuant to which it
acts as the Distributor for the sale of the Fund's shares of common stock, 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 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 a 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.
<PAGE>
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 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 from you 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.
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 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.
10. We reserve the right in our discretion, without notice, to suspend sales
or 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.
<PAGE>
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:
--------------------------------
Charles A. Fiumefreddo
Address: Two World Trade Center
---------------------------
New York, NY 10048
---------------------------
Date: January 22, 1998
------------------------------
<PAGE>
AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT
with
DEAN WITTER TRUST FSB
[open-end funds]
<PAGE>
TABLE OF CONTENTS
Page
----
Article 1 Terms of Appointment . . . . . . . . . . . . . . . . . 1
Article 2 Fees and Expenses. . . . . . . . . . . . . . . . . . . 5
Article 3 Representations and Warranties of DWTFSB . . . . . . . 6
Article 4 Representations and Warranties of the Fund . . . . . . 7
Article 5 Duty of Care and Indemnification . . . . . . . . . . . 7
Article 6 Documents and Covenants of the Fund and DWTFSB . . . .10
Article 7 Duration and Termination of Agreement. . . . . . . . .13
Article 8 Assignment . . . . . . . . . . . . . . . . . . . . . .14
Article 9 Affiliations . . . . . . . . . . . . . . . . . . . . .14
Article 10 Amendment. . . . . . . . . . . . . . . . . . . . . . .15
Article 11 Applicable Law . . . . . . . . . . . . . . . . . . . .15
Article 12 Miscellaneous. . . . . . . . . . . . . . . . . . . . .15
Article 13 Merger of Agreement. . . . . . . . . . . . . . . . . .17
Article 14 Personal Liability . . . . . . . . . . . . . . . . . .17
<PAGE>
AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of the 1st day of August,
1997 by and between each of the 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 FSB ("DWTFSB"), a
federally chartered savings bank, having its principal office and place of
business at Harborside Financial Center, Plaza Two, Jersey City, New Jersey
07311.
WHEREAS, the Fund desires to appoint DWTFSB as its transfer agent,
dividend disbursing agent and shareholder servicing agent and DWTFSB desires to
accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 TERMS OF APPOINTMENT; DUTIES OF DWTFSB
1.1 Subject to the terms and conditions set forth in
this Agreement, the Fund hereby employs and appoints DWTFSB to act as, and
DWTFSB 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
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<PAGE>
information ("prospectus") of the Fund, including without limitation any
periodic investment plan or periodic withdrawal program.
1.2 DWTFSB agrees that it will perform the following
services:
(a) In accordance with procedures established from time
to time by agreement between the Fund and DWTFSB, DWTFSB 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 of the Fund (the "Custodian");
(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;
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<PAGE>
(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
(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. DWTFSB shall also provide to the Fund on a regular basis the total
number of Shares that 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, DWTFSB
shall refuse to issue such Shares and shall not countersign and issue any
certificates requested for such Shares. When recording the issuance of Shares,
DWTFSB 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), DWTFSB 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
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<PAGE>
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, 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 that 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 DWTFSB in writing those transactions and
assets to be treated as exempt from Blue Sky reporting for each State; and
(ii) verify the inclusion on the system prior to
activation of each State in
-4-
<PAGE>
which Fund shares may be sold and thereafter monitor the daily purchases and
sales for shareholders in each State. The responsibility of DWTFSB for the
Fund's status under the securities laws of any State or other jurisdiction is
limited to the inclusion on the system of each State as to which the Fund has
informed DWTFSB that shares may be sold in compliance with state securities laws
and the reporting of purchases and sales in each such State to the Fund as
provided above and as agreed from time to time by the Fund and DWTFSB.
(d) DWTFSB shall provide such additional services and
functions not specifically described herein as may be mutually agreed between
DWTFSB and the Fund. Procedures applicable to such services may be established
from time to time by agreement between the Fund and DWTFSB.
Article 2 FEES AND EXPENSES
2.1 For performance by DWTFSB pursuant to this
Agreement, each Fund agrees to pay DWTFSB 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 DWTFSB.
2.2 In addition to the fees paid under Section 2.1
above, the Fund agrees to reimburse DWTFSB for out of pocket expenses in
connection with the services rendered by DWTFSB hereunder. In addition, any
other expenses incurred by DWTFSB at the request or with the consent of the Fund
will be reimbursed by the Fund.
-5-
<PAGE>
2.3 The Fund agrees to pay all fees and reimbursable
expenses within a reasonable period of time 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
DWTFSB by the Fund upon request prior to the mailing date of such materials.
Article 3 REPRESENTATIONS AND WARRANTIES OF DWTFSB
DWTFSB represents and warrants to the Fund that:
3.1 It is a federally chartered savings bank whose
principal office is 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.
Article 4 REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to DWTFSB that:
-6-
<PAGE>
4.1 It is a corporation duly organized and existing and
in good standing under the laws of Delaware or 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
5.1 DWTFSB shall not be responsible for, and the Fund
shall indemnify and hold DWTFSB harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to:
(a) All actions of DWTFSB or its agents or
subcontractors required to
-7-
<PAGE>
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 DWTFSB or its agents or
subcontractors of information, records and documents which (i) are received by
DWTFSB 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 DWTFSB or
its agents or subcontractors of, any instructions or requests of the Fund.
(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 notice of offering of
such Shares 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 DWTFSB 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 DWTFSB as a result of the lack of good faith,
negligence or willful misconduct of DWTFSB, its officers, employees or
-8-
<PAGE>
agents.
5.3 At any time, DWTFSB 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
DWTFSB under this Agreement, and DWTFSB 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. DWTFSB, its agents and subcontractors shall be protected and
indemnified 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 DWTFSB 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. DWTFSB, 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.
-9-
<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 DWTFSB
6.1 The Fund shall promptly furnish to DWTFSB the
following, unless previously furnished to Dean Witter Trust Company, the prior
transfer agent of the Fund:
(a) If a corporation:
(i) A certified copy of the resolution of the Board of
Directors of the Fund authorizing the appointment of DWTFSB and the execution
and delivery of this Agreement;
(ii) A certified copy of the Articles of Incorporation
and By-Laws of the Fund and all amendments thereto;
-10-
<PAGE>
(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 DWTFSB 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;
(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;
-11-
<PAGE>
(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
DWTFSB deems to be appropriate or necessary for the proper performance of its
duties.
6.2 DWTFSB 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 DWTFSB 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 Section 31 of the 1940 Act, and the rules and regulations
thereunder, DWTFSB agrees that all such records prepared or maintained by DWTFSB
relating to the services performed by DWTFSB 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.
-12-
<PAGE>
6.4 DWTFSB 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
DWTFSB and the Fund.
6.5 In case of any request or demands for the inspection
of the Shareholder records of the Fund, DWTFSB will endeavor to notify the Fund
and to secure instructions from an authorized officer of the Fund as to such
inspection. DWTFSB 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 to such person.
Article 7 DURATION AND TERMINATION OF AGREEMENT
7.1 This Agreement shall remain in full force and effect
until August 1, 2000 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 DWTFSB 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, DWTFSB reserves the right to
charge for any other reasonable fees and expenses
-13-
<PAGE>
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.
8.3 DWTFSB may, in its 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 DWTFSB;
PROVIDED, HOWEVER, that such person or entity has and maintains the
qualifications, if any, required to perform such obligations and duties, and
that DWTFSB shall be as fully responsible to the Fund for 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 DWTFSB 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 Morgan Stanley, Dean Witter, Discover & Co. or any of its
direct
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<PAGE>
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
Fund's investment adviser and/or distributor, are or may be interested in DWTFSB
as directors, officers, employees, agents and shareholders or otherwise, and
that the directors, officers, employees, agents and shareholders of DWTFSB 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 Funds") desires to retain DWTFSB to act as transfer
agent, dividend disbursing agent and/or
-15-
<PAGE>
shareholder servicing agent, and DWTFSB desires to render such services, such
services shall be provided pursuant to a letter agreement, substantially in the
form of Exhibit A hereto, between DWTFSB and each Additional 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 DWTFSB 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 DWTFSB and
the Fund issued by a surety company satisfactory to DWTFSB, except that DWTFSB
may accept an affidavit of loss and indemnity agreement executed by the
registered holder (or legal representative) without surety in such form as
DWTFSB deems appropriate indemnifying DWTFSB and the Fund for the issuance of a
replacement certificate, in cases where the alleged loss is in the amount of
$1,000 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, DWTFSB 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 DWTFSB may, in its sole discretion,
deem appropriate or as the Fund and, if applicable, the Distributor may instruct
DWTFSB.
12.4 Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or to DWTFSB 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
-16-
<PAGE>
designate in writing.
To the Fund:
[Name of Fund]
Two World Trade Center
New York, New York 10048
Attention: General Counsel
To DWTFSB:
Dean Witter Trust FSB
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.
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
-17-
<PAGE>
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.
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.
DEAN WITTER FUNDS
-----------------
MONEY MARKET FUNDS
------------------
1. Dean Witter Liquid Asset Fund Inc.
2. Active Assets Money Trust
3. Dean Witter U.S. Government Money Market Trust
4. Active Assets Government Securities Trust
5. Dean Witter Tax-Free Daily Income Trust
6. Active Assets Tax-Free Trust
7. Dean Witter California Tax-Free Daily Income Trust
8. Dean Witter New York Municipal Money Market Trust
9. Active Assets California Tax-Free Trust
EQUITY FUNDS
------------
10. Dean Witter American Value Fund
11. Dean Witter Mid-Cap Growth Fund
12. Dean Witter Dividend Growth Securities Inc.
13. Dean Witter Capital Growth Securities
14. Dean Witter Global Dividend Growth Securities
15. Dean Witter Income Builder Fund
16. Dean Witter Natural Resource Development Securities Inc.
17. Dean Witter Precious Metals and Minerals Trust
18. Dean Witter Developing Growth Securities Trust
19. Dean Witter Health Sciences Trust
20. Dean Witter Capital Appreciation Fund
21. Dean Witter Information Fund
22. Dean Witter Value-Added Market Series
23. Dean Witter World Wide Investment Trust
-18-
<PAGE>
24. Dean Witter European Growth Fund Inc.
25. Dean Witter Pacific Growth Fund Inc.
26. Dean Witter International SmallCap Fund
27. Dean Witter Japan Fund
28. Dean Witter Utilities Fund
29. Dean Witter Global Utilities Fund
30. Dean Witter Special Value Fund
31. Dean Witter Financial Services Trust
32. Dean Witter Market Leader Trust
33. Dean Witter Managers' Select Fund
34. Dean Witter Fund of Funds
35. Dean Witter S&P 500 Index Fund
BALANCED FUNDS
--------------
36. Dean Witter Balanced Growth Fund
37. Dean Witter Balanced Income Trust
ASSET ALLOCATION FUNDS
----------------------
38. Dean Witter Strategist Fund
39. Dean Witter Global Asset Allocation Fund
FIXED INCOME FUNDS
------------------
40. Dean Witter High Yield Securities Inc.
41. Dean Witter High Income Securities
42. Dean Witter Convertible Securities Trust
43. Dean Witter Intermediate Income Securities
44. Dean Witter Short-Term Bond Fund
45. Dean Witter World Wide Income Trust
46. Dean Witter Global Short-Term Income Fund Inc.
47. Dean Witter Diversified Income Trust
48. Dean Witter U.S. Government Securities Trust
49. Dean Witter Federal Securities Trust
50. Dean Witter Short-Term U.S. Treasury Trust
51. Dean Witter Intermediate Term U.S. Treasury Trust
52. Dean Witter Tax-Exempt Securities Trust
53. Dean Witter National Municipal Trust
55. Dean Witter Limited Term Municipal Trust
55. Dean Witter California Tax-Free Income Fund
56. Dean Witter New York Tax-Free Income Fund
57. Dean Witter Hawaii Municipal Trust
58. Dean Witter Multi-State Municipal Series Trust
59. Dean Witter Select Municipal Reinvestment Fund
-19-
<PAGE>
SPECIAL PURPOSE FUNDS
---------------------
60. Dean Witter Retirement Series
61. Dean Witter Variable Investment Series
62. Dean Witter Select Dimensions Investment Series
TCW/DW FUNDS
------------
63. TCW/DW Core Equity Trust
64. TCW/DW North American Government Income Trust
65. TCW/DW Latin American Growth Fund
66. TCW/DW Income and Growth Fund
67. TCW/DW Small Cap Growth Fund
68. TCW/DW Balanced Fund
69. TCW/DW Total Return Trust
70. TCW/DW Global Telecom Trust
71. TCW/DW Strategic Income Trust
72. TCW/DW Mid-Cap Equity Trust
By:
-------------------------------------
Barry Fink
Vice President and General Counsel
ATTEST:
- -----------------------------------
Assistant Secretary
DEAN WITTER TRUST FSB
By:
-------------------------------------
John Van Heuvelen
President
ATTEST:
- -----------------------------------
Executive Vice President
-20-
<PAGE>
EXHIBIT A
Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, NJ 07311
Gentlemen:
The undersigned, (INSET NAME OF INVESTMENT COMPANY) a (Massachusetts
business trust/Maryland corporation) (the "Fund"), desires to employ and appoint
Dean Witter Trust FSB ("DWTFSB") 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 DWTFSB of fees as set out in the fee schedule attached hereto as
Schedule A, DWTFSB 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.
-21-
<PAGE>
Please indicate DWTFSB'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:
-------------------------------------
Barry Fink
Vice President and General Counsel
ACCEPTED AND AGREED TO:
DEAN WITTER TRUST FSB
By:
--------------------------------
Its:
-------------------------------
Date:
------------------------------
-22-
<PAGE>
SCHEDULE A
Fund: Dean Witter Global Dividend Growth Securities
Fees: (1) Annual maintenance fee of $12.65 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.
-23-
<PAGE>
[LETTERHEAD]
GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN
January 29, 1998
Dean Witter Global Dividend Growth Securities
Two World Trade Center
New York, New York 10048
Ladies and Gentlemen:
This opinion is being furnished to Dean Witter Global Dividend Growth
Securities, a Massachusetts business trust (the "Trust"), in connection with the
Registration Statement on Form N-14 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "1933 Act"), to be filed by the Trust in
connection with the acquisition by the Trust of substantially all the assets of
World Wide Invesment Trust ("World Wide") in exchange for shares of beneficial
interest, par value $.01, of the Trust ("Shares") and the assumption by the
Trust of certain stated liabilities of World Wide pursuant to an Agreement and
Plan of Reorganization dated as of January 29, 1998, between the Trust and World
Wide (the "Reorganization Agreement"). We have examined such statutes,
regulations, corporate records and other documents and reviewed such questions
of law that we deemed necessary or appropriate for the purposes of this opinion.
As to matters of Massachusetts law contained in this opinion, we have
relied upon the opinion of Lane Altman & Owens LLP, dated January 29, 1998.
Based upon the foregoing, we are of the opinion that the Shares when
issued, as described in the Reorganization Agreement, will be duly authorized
and, assuming receipt of the consideration to be paid therefor, upon delivery as
provided in the Reorganization Agreement, will be legally issued, fully paid and
non-assessable (except for the potential liability of shareholders described in
the Trust's Prospectus dated July 28, 1997 under the caption "Additional
Information").
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. We do
not thereby admit that we are within the category of persons whose consent is
required under Section 7 of the 1933 Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Gordon Altman Butowsky Weitzen
Shalov & Wein
<PAGE>
[LETTERHEAD]
LANE ALTMAN & OWENS LLP
January 29, 1998
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, NY 10036
Dear Sirs:
We understand that the trustees (the "Trustees") of Dean Witter Global
Dividend Growth Securities, a Massachusetts business trust (the "Trust"),
intend, on or about January 29, 1998, to cause to be filed on behalf of the
Trust a Registration Statement on Form N-14 (the "Registration Statement") in
connection with the acquisition (the "Acquisition") by the Trust of
substantially all the assets of World Wide Investment Trust ("World Wide
Investment"), in exchange for shares of beneficial interest of the Trust (the
"Shares"), and the assumption by the Trust of certain stated liabilities of
World Wide Investment pursuant to an Agreement and Plan of Reorganization dated
as of January 29, 1998 between the Trust and World Wide (the "Agreement"). We
further understand that the Shares will be issued pursuant to the Agreement.
You have requested that we act as special counsel to the Trust with respect
to the laws of the Commonwealth of Massachusetts on certain specified matters,
and in such capacity we are furnishing you with this opinion. You have not
asked for, and we do not offer, an opinion on any other matter or transaction
related to the Trust, World Wide Investment, the Acquisition, the Agreement or
any matter related thereto, except as specifically set forth below.
The Trust is a business trust created under an Agreement and Declaration of
Trust finally executed and delivered in Boston, Massachusetts on January 12,
1993 (as amended, the "Trust Agreement"). The Board of Trustees of the Trust
(as defined in the Trust Agreement) (the "Trustees") have the powers set forth
in the Trust Agreement, subject to the terms, provisions and conditions provided
therein.
In connection with our opinions delivered herein, we have examined the
following items some of which have been provided to us by, or on behalf of, you:
(i) a copy of the Agreement in the form to be executed by the Trust and World
Wide Investment; (ii) a copy of the Trust Agreement; (iii) a copy of the Amended
and Restated By-laws of the Trust effective as of October 23, 1997 ("By-laws");
(iv) a Certificate of Legal Existence for the Trust provided by the
<PAGE>
Gordon Altman Butowsky, et. al.
January 29, 1998
Page 2
Secretary of State of the Commonwealth of Massachusetts dated January 28, 1998;
and (v) copies of the Registration Statement on Form N-14 to be filed by the
Trust and the Trust's current Prospectus and Statement of Additional Information
each dated July 28, 1997.
In rendering this opinion we have assumed, without independent
verification, (i) the due authority of all individuals signing in representative
capacities and the genuineness of signatures, (ii) the authenticity,
completeness and continued effectiveness of all documents or copies furnished to
us, (iii) that resolutions approving the Registration Statement, the Acquisition
and the Agreement have been duly adopted by the Trustees, (iv) that no
amendments, agreements, resolutions or actions have been approved, executed or
adopted which would limit, supersede or modify the items described above, and
(v) that the Trust Agreement and the By-laws provided to us have been duly
adopted by the Trustees, have not been amended, modified or replaced since the
date of adoption thereof, and remain in full force and effect as of the date
hereof. We have also examined such questions of law as we have concluded
necessary or appropriate for purposes of the opinions expressed below. Where
documents relevant to this opinion are referred to in the Registration
Statement, we assume such documents are the same as in the most recent form
provided to us, whether as an exhibit to the Registration Statement, or
otherwise. When any opinion set forth below relates to the existence or
standing of the Trust, such opinion is based entirely upon and is limited by the
items referred to above, and we understand that the foregoing assumptions,
limitations and qualifications are acceptable to you. We understand that the
foregoing assumptions, limitations and qualifications are acceptable to you.
Based upon the foregoing, and with respect to Massachusetts law only
(except that no opinion is herein expressed with respect to compliance with the
Massachusetts Uniform Securities Act), to the extent that Massachusetts law may
be applicable, and without reference to the laws of any of the other several
states or of the United States of America, including State and Federal
securities laws, we are of the opinion that:
1. The Trust is a business trust with transferable shares, organized in
compliance with the requirements of The Commonwealth of Massachusetts, and the
Trust Agreement is legal and valid.
2. The Shares to be issued as described in the Registration Statement,
including any Exhibits thereto, have been duly authorized and, assuming receipt
of the consideration to be paid therefor, upon delivery as provided in the
Agreement, will be validly issued, fully paid and nonassessable (except for the
potential liability of shareholders described in the Trust's Prospectus dated
July 28, 1997, under the caption "Additional Information").
<PAGE>
Gordon Altman Butowsky, et. al.
January 29, 1998
Page 3
We understand that you will rely on this opinion solely in connection with
your opinion to be filed with the Securities and Exchange Commission as an
Exhibit to the Registration Statement. We hereby consent to such use of this
opinion and we also consent to the filing of said opinion with the Securities
and Exchange Commission. In so consenting, we do not thereby admit to be within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ LANE ALTMAN & OWENS LLP
LANE ALTMAN & OWENS LLP
<PAGE>
[LETTERHEAD]
GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN
January 29, 1998
Dean Witter Global Dividend Growth Securities
Two World Trade Center
New York, New York 10048
Dean Witter World Wide Investment Trust
Two World Trade Center
New York, New York 10048
Gentlemen:
You have requested our opinion as to the Federal income tax
consequences of the transaction (the "Reorganization") described below pursuant
to which (i) substantially all assets of Dean Witter World Wide Investment Trust
("World Wide"), a Massachusetts business trust, will be combined with those of
Dean Witter Global Dividend Growth Securities, a Massachusetts business trust
(the "Trust"), in exchange for shares of the Trust ("Trust Shares"), and the
assumption by the Trust of certain liabilities of World Wide (the
"Liabilities"); (ii) World Wide will be liquidated; and (iii) the Trust Shares
will be distributed to the holders ("World Wide Shareholders") of shares in
World Wide ("World Wide Shares") pursuant to such liquidation.
We have examined and are familiar with such documents, records and
other instruments as we have deemed appropriate for purposes of this opinion
letter, including the Registration Statement filed with the Securities and
Exchange Commission under the Securities Act of 1933 on Form N-14, relating to
the Trust Shares (the "Registration Statement") which includes, as a part
thereof, the proxy statement of World Wide (the "World Wide Proxy"), which will
be used to solicit proxies of World Wide Shareholders in connection with the
Special Meeting of World Wide Shareholders and the Agreement and Plan of
Reorganization by and between the Trust and World Wide (the "Plan").
In rendering this opinion, we have assumed that such documents as yet
unexecuted will, when executed, conform to the proposed forms of such documents
that we have examined. We have further assumed that the Reorganization will be
carried out
<PAGE>
January 29, 1998
Page 2
pursuant to the terms of the Plan, that factual statements and information
contained in the Registration Statement, the World Wide Proxy and other
documents, records and instruments supplied to us are correct and that there
will be no material change with respect to such facts or information prior to
the time of the Reorganization. In rendering our opinion, we have also relied
on the representations and facts discussed below which have been provided to us
by Dean Witter InterCapital Inc. ("InterCapital"), the Trust and World Wide, and
we have assumed that such representations and facts will remain correct at the
time of the Reorganization.
FACTS
The Trust is an open-end diversified management investment company
engaged in the continuous offering of its shares to the public. Since its
inception, the Trust has conducted its affairs so as to qualify, and has elected
to be taxed, as a regulated investment company under Section 851 of the Internal
Revenue Code of 1986, as amended (the "Code").
World Wide is an open-end diversified management investment company
engaged in the continuous offering of its shares to the public. Since its
inception, World Wide has conducted its affairs so as to qualify, and has
elected to be taxed, as a regulated investment company under Section 851 of the
Code.
The Board of Trustees of each of the Trust and World Wide have
determined, for valid business reasons, that it is advisable to combine the
assets of the Trust and World Wide into one fund.
In view of the above, the Board of Trustees of World Wide adopted the
Plan, subject to, among other things, approval by World Wide Shareholders.
Pursuant to the Plan, World Wide will transfer all of its assets to
the Trust in exchange for the Trust Shares (including fractional Trust Shares)
and the assumption by the Trust of the Liabilities. Immediately thereafter,
World Wide will distribute the Trust Shares to World Wide Shareholders in
exchange for and in cancellation of their World Wide Shares and in complete
liquidation of World Wide.
Each of the following representations, among other representations,
has been made to us in connection with the Reorganization by InterCapital, World
Wide and by the Trust.
<PAGE>
January 29, 1998
Page 3
(1) To the best of the knowledge of the management of InterCapital,
World Wide, the Trust, and their affiliates, there is no plan or intention on
the part of World Wide Shareholders, to redeem, sell, exchange or otherwise
dispose of a number of Trust Shares that would reduce World Wide Shareholders'
ownership of Trust Shares to a number of Trust Shares having a value, as of the
date of the Reorganization, of less than fifty percent of the value of all of
the formerly outstanding World Wide Shares as of such date;
(2) The Trust has no plan or intention to reacquire any of the Trust
Shares to be issued pursuant to the Reorganization except to the extent
necessary to comply with its legal obligation to redeem its own shares;
(3) The Liabilities to be assumed by or transferred to the Trust were
incurred by World Wide in the ordinary course of business and are associated
with the assets being transferred to the Trust;
(4) The amount of the Liabilities will not exceed the aggregate
adjusted basis of World Wide for its assets transferred to the Trust;
(5) The Trust has no plan or intention to sell or otherwise dispose
of more than fifty percent of the assets of World Wide acquired in the
Reorganization, except for dispositions made in the ordinary course of business;
(6) There is no indebtedness between World Wide and the Trust that
was issued, acquired or will be settled at a discount;
(7) World Wide has been a regulated investment company within the
meaning of Section 851 of the Code since the date of its organization through
the end of its last complete taxable year and will qualify as a regulated
investment company for its taxable year ending on the date of the
Reorganization;
(8) The Trust has been a regulated investment company within the
meaning of Section 851 of the Code since the date of its organization through
the date hereof and will qualify as a regulated investment company for its
taxable year ending on March 31, 1997;
(9) World Wide will have no accumulated earnings and profits as of
the close of its taxable year ending on the date of the Reorganization.
<PAGE>
January 29, 1998
Page 4
OPINION
Based on the Code, Treasury Regulations issued thereunder, Internal
Revenue Service Rulings and the relevant case law, as of the date hereof, and on
the facts, representations and assumptions set forth above, and the documents,
records and other instruments we have reviewed, it is our opinion that the
Federal income tax consequences of the Reorganization to the Trust, World Wide
and the World Wide Shareholders will be as follows:
(1) The transfer of substantially all of World Wide's assets in
exchange for the Trust Shares and the assumption by the Trust of certain stated
Liabilities of World Wide, followed by the distribution by World Wide of the
Trust Shares to the World Wide Shareholders in exchange for their World Wide
Shares, will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code, and World Wide and the Trust will each be a "party to
a reorganization" within the meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by the Trust upon the receipt
of the assets of World Wide solely in exchange for the Trust Shares and the
assumption of the Liabilities by the Trust;
(3) No gain or loss will be recognized by World Wide upon the
transfer of the assets of World Wide to the Trust, in exchange for the Trust
Shares and the assumption of the Liabilities by the Trust, or upon the
distribution of the Trust Shares to World Wide Shareholders in exchange for
their World Wide Shares as provided in the Plan;
(4) No gain or loss will be recognized by World Wide Shareholders
upon the exchange of their World Wide Shares for the Trust Shares;
(5) The aggregate tax basis for the Trust Shares received by each
World Wide Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the World Wide Shares held by each such World Wide
Shareholder immediately prior to the Reorganization;
(6) The holding period of the Trust Shares to be received by each
World Wide Shareholder will include the period during which the World Wide
Shares surrendered in exchange therefor were held (provided such World Wide
Shares were held as capital assets on the date of the Reorganization);
<PAGE>
January 29, 1998
Page 5
(7) The tax basis of the assets of World Wide acquired by the Trust
will be the same as the tax basis of such assets to World Wide immediately prior
to the Reorganization; and
(8) The holding period of the assets of World Wide in the hands of
the Trust will include the period during which those assets were held by World
Wide.
We are not expressing an opinion as to any aspect of the
Reorganization other than those opinions expressly stated above.
As noted above, this opinion is based upon our analysis of the Code,
Treasury Regulations issued thereunder, Internal Revenue Service Rulings and
case law which we deem relevant as of the date hereof. No assurances can be
given that there will not be a change in the existing law or that the Internal
Revenue Service will not alter its present views, either prospectively or
retroactively, or adopt new views with regard to any of the matters upon which
we are rendering this opinion, nor can any assurances be given that the Internal
Revenue Service will not audit or question the treatment accorded to the
Reorganization on the Federal income tax returns of the Trust, World Wide or the
World Wide Shareholders.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and any reference to our firm
in the Registration Statement and the World Wide Proxy constituting a part
thereof.
Very truly yours,
/s/ Gordon Altman Butowsky
Weitzen Shalov & Wein
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Proxy Statement and
Prospectus and the Statement of Additional Information constituting parts of
this Registration Statement on Form N-14 (the "Registration Statement") of our
reports dated May 16, 1997 relating to the March 31, 1997 financial statements
and financial highlights of Dean Witter Global Dividend Growth Securities and
Dean Witter World Wide Investment Trust (the "Funds") and to the reference to us
under the heading "Financial Statements and Experts" in such Proxy Statement and
Prospectus. We also consent to the references to us under the headings
"Independent Accountants" and "Experts" in each Funds' Statement of Additional
Information dated July 28, 1997 and to the reference to us under the heading
"Financial Highlights" in each Funds' Prospectus dated July 28, 1997, which
Statement of Additional Information and Prospectus have been incorporated by
reference into the Registration Statement.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
January 28, 1998
<PAGE>
POWER OF ATTORNEY
Know All Men by These Presents, that each person whose signature appears
below constitutes and appoints David M. Butowsky, Stuart M. Strauss and Ronald
M. Feiman and each and any one of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to the Registration Statement
on Form N-14 of Dean Witter Global Dividend Growth Securities, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, 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, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------------------------------------------------- ------------------------------- ----------------------
<S> <C> <C> <C>
/s/ MICHAEL BOZIC Trustee January 29, 1998
/s/ EDWIN J. GARN Trustee January 29, 1998
/s/ JOHN R. HAIRE Trustee January 29, 1998
/s/ MANUEL H. JOHNSON Trustee January 29, 1998
/s/ MICHAEL E. NUGENT Trustee January 29, 1998
/s/ JOHN L. SCHROEDER Trustee January 29, 1998
/s/ WAYNE E. HEDIEN Trustee January 29, 1998
</TABLE>
<PAGE>
POWER OF ATTORNEY
Know All Men by These Presents, that each person whose signature appears
below constitutes and appoints Barry Fink and Marilyn K. Cranney and each and
any one of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to the Registration Statement on Form N-14 of Dean
Witter Global Dividend Growth Securities, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, 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, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------------------------------------------------- ------------------------------- ----------------------
<S> <C> <C> <C>
/s/ CHARLES A. FIUMEFREDDO Trustee January 29, 1998
/s/ PHILIP J. PURCELL Trustee January 29, 1998
</TABLE>
<PAGE>
DEAN WITTER WORLD WIDE INVESTMENT TRUST
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
The undersigned shareholder of Dean Witter World Wide Investment
Trust does hereby appoint BARRY FINK, ROBERT M. SCANLAN and JOSEPH
MCALINDEN and each of them, as attorneys-in-fact and proxies of
the undersigned, each with the full power of substitution, to
attend the Special Meeting of Shareholders of Dean Witter World
Wide Investment Trust to be held on May 21, 1998, in Conference
Room A, 44th Floor, Two World Trade Center, New York, New York at
9:00 A.M., New York time, and at all adjournments thereof and to
vote the shares held in the name of the undersigned on the record
date for said meeting for the Proposal specified on the reverse
side hereof. Said attorneys-in-fact shall vote in accordance with
their best judgment as to any other matter.
(CONTINUED ON REVERSE SIDE)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" THE PROPOSAL SET FORTH ON THE
REVERSE HEREOF AND AS RECOMMENDED BY THE BOARD OF TRUSTEES.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE
SIDE.
<PAGE>
/x/ PLEASE MARK BOXES IN BLACK OR BLUE INK
The Proposal:
FOR AGAINST ABSTAIN
Approval of the Agreement and
Plan of
Reorganization, dated as of
January 29, 1998,
pursuant to which substantially
all of the assets
/ / / / / /
of Dean Witter World Wide Investment Trust would be combined with those of Dean
Witter Global Dividend Growth Securities and
shareholders of Dean Witter World Wide Investment Trust would become
shareholders of Dean Witter Global Dividend Growth Securities
receiving shares in Dean Witter Global Dividend Growth Securities with a value
equal to the value of their holdings
in Dean Witter World Wide Investment Trust.
Please sign personally. If the shares are registered in more than one name, each
joint owner or each fiduciary
should sign personally. Only authorized officers should sign for corporations.
Date
------------------------------------------------------------------------
Please make sure to sign and date
this Proxy using black or blue ink.
-----------------------
Shareholder sign in
the box above
-----------------------
Co-Owner (if any) sign
in the box above
- --------------------------------------------------------------------------------
-- PLEASE DETACH AT PERFORATION - -
DEAN WITTER WORLD WIDE INVESTMENT TRUST
- -------------------------------------------------------------------------------
IMPORTANT
PLEASE SEND IN YOUR PROXY......TODAY!
YOU ARE URGED TO DATE AND SIGN THE ATTACHED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. THIS WILL HELP SAVE THE
EXPENSE OF FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT
RESPONDED.
