<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 2000
TWO WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
The six-month period ended September 30, 2000, was difficult for global equity
markets as investors became concerned about corporate profits against a backdrop
of slowing global economic growth. The uncertainty associated with these
concerns resulted in negative equity returns to investors in all but a few small
global markets. Despite these unfavorable recent results, we remain optimistic
about the long-term prospects for the high-quality companies sought out by
Morgan Stanley Dean Witter Global Dividend Growth Securities.
PERFORMANCE
For the six-month period ended September 30, 2000, the Fund's Class B Shares
posted a total return of -4.75 percent, outperforming the Morgan Stanley Capital
International (MSCI) World Index, which returned -8.39 percent.* For the same
period, the Fund's Class A, C and D shares posted total returns of -4.38
percent, -4.75 percent and -4.31 percent, respectively. The performance of the
Fund's four share classes varies because each class has different expenses. The
total return figures given assume the reinvestment of all distributions but do
not reflect the deduction of any applicable sales charges.
In our letter to you six months ago, we wrote about the narrowness of the global
equity indexes, describing how a few sectors -- namely technology, media and
telecommunications -- drove country indexes higher, masking the benign
performance of most other industries. We also explained that we have generally
avoided the fast-growing
----------------
<TABLE>
<C> <S>
* The Morgan Stanley Capital International (MSCI) World Index
measures performance from a diverse range of global stock
markets, including securities representative of the market
structure of 22 developed market countries in North America,
Europe, and the Asia/Pacific region. The performance of the
Index is listed in U.S. dollars and assumes reinvestment of
net dividends. "Net dividends" reflects a reduction in
dividends after taking into account withholding of taxes by
certain foreign countries represented in the Index. The
Index does not include any expenses, fees or charges. The
Index is unmanaged and should not be considered an
investment.
</TABLE>
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 2000 CONTINUED
TWO WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048
technology, media and telecommunications industries because of the Fund's
emphasis on established companies that pay dividends. This lack of exposure
proved fortuitous in the recent period, in which concerns about decelerating
growth rates resulted in large negative returns for these industries. It is
primarily for this reason that the Fund outperformed its benchmark over the
period.
UNITED STATES
Despite recent signs that U.S. economic growth may be moderating, the domestic
economy continued to grow strongly over the period. Continued rises in
productivity offset the impact of wage increases and other inflationary
pressures. Personal consumption was strong, aided by the so-called "wealth
effect" resulting from years of strong stock returns. Recent weakness in the
U.S. equity market may prove to curtail the strength in consumer spending. U.S.
government bond yields rose steadily over the period as the federal funds rate
was increased by 50 basis points in May in an effort to maintain economic growth
while avoiding inflation.
Our expectations of lower U.S. equity market returns seem to be coming true.
Investors are once again focusing on the valuations of stocks, leaving sectors
such as technology and telecommunications vulnerable to continued weakness.
Accordingly, the Fund remains committed to the more attractively valued sectors
of the market, where expectations seem much more realistic. We are currently
targeting 33 percent of the Fund's net assets toward U.S. equity investments, an
increase of 2 percent over six months ago. In some cases, dramatic weakness
among technology and telecom stocks has presented attractive opportunities to
purchase the more established companies in those industries. Recent additions to
the Fund's portfolio have included Verizon Communications, SBC Communications,
Honeywell International, Compaq Computer, Electronic Data Systems and Computer
Associates.
JAPAN AND THE PACIFIC RIM
The Bank of Japan recently abandoned its long-standing policy of attempting to
stimulate economic recovery by maintaining interest rates at virtually zero
percent. Higher interest rates may force Japanese corporations to restructure
further, a development that may cause near-term pain in exchange for long-term
gain. Although moderate, economic growth is recovering, driven more by corporate
capital expenditure than personal consumption.
We expect Japanese gross-domestic-product growth to be approximately 1.5 percent
this fiscal year, constrained in part by its dependence on high-priced imported
oil. Despite the negative effects of high oil prices, sentiment among large
manufacturers appears to be improving. This stands in
2
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 2000 CONTINUED
TWO WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048
contrast to the attitudes among smaller Japanese companies, which have seen no
improvement in sales to the domestic consumer. We thus remain committed to our
strategy of maintaining a heavier exposure to the larger Japanese manufacturers,
particularly the automobile and electronics exporters that rely heavily upon
non-Japanese economic activity. We are currently targeting 13 percent of the
Fund's net assets toward Japan, a decrease of 2.5 percent from six months ago.
NTT Docomo was the only new Japanese position added to the Fund during the
period.
Around the Pacific Rim, the Fund gained new exposure to Singapore by buying
shares in Singapore Airlines and DBS Bank. Our investment case for Singapore
centers on its relative economic stability, consistent with our conservative
management style, as well as very attractive stock valuations. Singapore's
equity market has been among the least volatile in the region; its currency did
not depreciate to any great extent, even through recent regional currency
crises; its sovereign debt credit rating is on a par with those of Japan and the
United States according to S&P, and it has been named the "world's most
competitive economy" for four consecutive years by the World Economic Forum. We
also remain positive about Hong Kong, a market we have long been exposed to, and
are currently targeting 3 percent of the Fund's net assets to that market.
EUROPE
European markets performed reasonably well during the period, outperforming the
MSCI World Index in local currency terms though not when measured in U.S.
dollars. The euro, only 21 months old, continued its downward trend versus the
U.S. dollar as European economic growth seems to be slowing more than growth in
the United States. In addition, oil- and currency-related inflation risks have
intensified, keeping the European Central Bank in a tightening mode.
There has been much debate about whether Europe can expect an information
technology-driven surge in productivity similar to that experienced in the
United States. While it will likely be a long time before any conclusions can be
drawn, European companies are spending heavily on information technology and
appear to be planting the seeds for such a scenario to take hold. However,
further structural reforms are needed, including larger tax cuts across Europe
and changes to labor laws, which would facilitate corporate restructuring. The
focus on shareholder value is spreading across Europe but still has a long way
to go before reaching the levels seen in the United States.
Like most other analysts as well as investors, we have been frustrated in our
call for an appreciation of the euro. Our supposition has been predicated partly
on the narrowing of inflation and interest-rate differentials with the United
States but also on expectations of a shift of investment flows back into Europe.
Although the Fund remains overweighted in Europe relative to the MSCI World
Index, we
3
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 2000 CONTINUED
TWO WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048
concede that our optimism has proved to be premature. The current weakness of
U.S. technology stocks just may provide the catalyst for a period of
outperformance by European equity markets. We are currently targeting 24 percent
of the Fund's net assets to the countries that make up the European Monetary
Union, 4 percent to Scandinavian markets, 6 percent to Switzerland and 11
percent to the United Kingdom. Within Europe we are emphasizing banks,
telecommunications services, consumer staples and chemicals.
AUSTRALIA AND CANADA
Both Australia and Canada, as resource-oriented markets, are benefiting from
rising commodity prices and strong economic growth in their respective
geographic regions. We expect Australia's economic strength to continue because
exports are rising. Income-tax cuts in Australia have lifted disposable incomes,
so consumer sentiment is also improving. Canada's economic fundamentals are also
strong, driven by rising exports and higher corporate capital expenditures. The
strength in both markets should boost corporate profits. We are continuing to
target 2.5 percent of the Fund's net assets to each market, unchanged from six
months ago.
LOOKING AHEAD
We remain optimistic about the long-term prospects for the stocks of
well-established large-cap companies around the world. We will remain sensitive
to any developments that would necessitate a change to the Fund's country
allocations and portfolio holdings.
We appreciate your ongoing support of Morgan Stanley Dean Witter Global Dividend
Growth Securities and look forward to continuing to serve your investment needs.
Very truly yours,
[/S/ CHARLES A. FIUMEFREDDO] [/S/ MITCHELL M. MERIN]
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
CHAIRMAN OF THE BOARD PRESIDENT
4
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FUND PERFORMANCE SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
---------------------------------------------------------------------------------------------------
CLASS A SHARES* CLASS B SHARES**
----------------------------------------------- -----------------------------------------------
PERIOD ENDED 9/30/00 PERIOD ENDED 9/30/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year (4.50)%(1) (9.51)%(2) 1 Year (5.24)%(1) (9.34)%(2)
Since Inception (7/28/97) 3.17%(1) 1.44%(2) 5 Years 9.22%(1) 8.96%(2)
Since Inception (6/30/93) 10.19%(1) 10.19%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+ CLASS D SHARES++
----------------------------------------------- -----------------------------------------------
PERIOD ENDED 9/30/00 PERIOD ENDED 9/30/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year (5.17)%(1) (5.99)%(2) 1 Year (4.34)%(1)
Since Inception (7/28/97) 2.42%(1) 2.42%(2) Since Inception (7/28/97) 3.40%(1)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
LESS THAN THEIR ORIGINAL COST.
------------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%.
The CDSC declines to 0% after six years.
+ The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of purchase.
++ Class D shares have no sales charge.
5
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (96.0%)
AUSTRALIA (2.6%)
AIRLINES
5,500,000 Quantas Airways Ltd...................................................................... $ 10,621,024
--------------
CONTAINERS/PACKAGING
3,750,000 Amcor Ltd................................................................................ 10,384,998
--------------
MAJOR BANKS
1,550,000 Australia & New Zealand Banking Group Ltd................................................ 11,175,054
625,000 Commonwealth Bank of Australia........................................................... 9,365,025
--------------
20,540,079
--------------
MAJOR TELECOMMUNICATIONS
2,750,000 Telstra Corp., Ltd....................................................................... 9,017,569
--------------
OIL & GAS PRODUCTION
3,500,000 Santos Ltd............................................................................... 11,970,945
--------------
TOTAL AUSTRALIA.......................................................................... 62,534,615
--------------
BELGIUM (0.8%)
FINANCIAL CONGLOMERATES
615,000 Fortis (B Shares)........................................................................ 18,901,542
--------------
CANADA (2.7%)
ALUMINUM
400,000 Alcan Aluminium Ltd...................................................................... 11,633,169
--------------
FINANCIAL CONGLOMERATES
1,050,000 EdperBrascan Corp. (Class A)............................................................. 13,591,442
--------------
MAJOR BANKS
425,000 Toronto-Dominion Bank.................................................................... 12,501,664
--------------
MAJOR TELECOMMUNICATIONS
500,000 Telus Corp. (Non-Voting)................................................................. 13,010,781
--------------
OIL & GAS PIPELINES
620,000 Enbridge Inc............................................................................. 14,276,587
--------------
TOTAL CANADA............................................................................. 65,013,643
--------------
FINLAND (1.3%)
INFORMATION TECHNOLOGY SERVICES
600,000 Tietoenator Oyj ABP...................................................................... 16,932,480
--------------
TELECOMMUNICATION EQUIPMENT
350,000 Nokia Oyj................................................................................ 14,173,897
--------------
TOTAL FINLAND............................................................................ 31,106,377
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FRANCE (6.0%)
AUTOMOTIVE AFTERMARKET
600,000 Compagnie Generale des Etablissements Michelin (B Shares)................................ $ 16,667,910
--------------
CONSTRUCTION MATERIALS
243,216 Lafarge S.A.............................................................................. 16,730,391
--------------
CONTAINERS/PACKAGING
135,000 Compagnie de Saint-Gobain................................................................ 16,965,551
--------------
MAJOR BANKS
200,000 BNP Paribas.............................................................................. 17,620,362
340,000 Societe Generale......................................................................... 18,995,244
--------------
36,615,606
--------------
MISCELLANEOUS MANUFACTURING
380,000 Compagnie Generale d'Industrie et de Participations...................................... 16,689,075
--------------
MULTI-LINE INSURANCE
390,000 Assurances Generales de France........................................................... 20,980,401
--------------
OIL REFINING/MARKETING
132,000 Total Fina Elf........................................................................... 19,300,911
--------------
TOTAL FRANCE............................................................................. 143,949,845
--------------
GERMANY (5.4%)
APPAREL/FOOTWEAR
340,000 Adidas-Salomon AG........................................................................ 18,590,452
--------------
CHEMICALS: MAJOR DIVERSIFIED
460,000 BASF AG.................................................................................. 16,247,244
450,000 Bayer AG................................................................................. 16,628,225
--------------
32,875,469
--------------
INDUSTRIAL CONGLOMERATES
390,000 E. ON AG................................................................................. 20,086,154
600,000 MAN AG................................................................................... 15,715,458
128,000 Siemens AG (Registered Shares)........................................................... 16,452,726
665,000 Thyssen Krupp AG......................................................................... 8,931,839
--------------
61,186,177
--------------
MOTOR VEHICLES
350,000 DaimlerChrysler AG....................................................................... 15,596,843
--------------
TOTAL GERMANY............................................................................ 128,248,941
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
HONG KONG (1.8%)
ELECTRIC UTILITIES
3,000,000 CLP Holdings Ltd......................................................................... $ 13,466,891
--------------
REAL ESTATE DEVELOPMENT
1,175,000 Cheung Kong (Holdings) Ltd............................................................... 14,165,886
1,520,000 Sun Hung Kai Properties Ltd.............................................................. 14,328,772
--------------
28,494,658
--------------
TOTAL HONG KONG.......................................................................... 41,961,549
--------------
IRELAND (0.9%)
MAJOR BANKS
1,950,000 Allied Irish Banks PLC................................................................... 21,255,554
--------------
ITALY (2.3%)
MAJOR BANKS
1,150,000 San Paolo - IMI SpA...................................................................... 18,681,288
--------------
MAJOR TELECOMMUNICATIONS
3,300,000 Telecom Italia SpA....................................................................... 17,985,468
--------------
WIRELESS COMMUNICATIONS
3,800,000 Telecom Italia Mobile SpA................................................................ 17,862,003
--------------
TOTAL ITALY.............................................................................. 54,528,759
--------------
JAPAN (13.3%)
BEVERAGES: ALCOHOLIC
1,750,000 Kirin Brewery Co., Ltd................................................................... 17,947,889
--------------
DEPARTMENT STORES
1,250,000 Marui Co., Ltd........................................................................... 19,368,475
--------------
ELECTRICAL PRODUCTS
1,620,000 Matsushita Electric Works, Ltd........................................................... 18,605,377
--------------
ELECTRONIC COMPONENTS
140,000 TDK Corp................................................................................. 17,721,519
--------------
ELECTRONIC EQUIPMENT/INSTRUMENTS
110,000 Kyocera Corp............................................................................. 16,769,842
740,000 Matsushita Electric Industrial Co., Ltd.................................................. 19,349,533
700,000 NEC Corp................................................................................. 15,878,222
--------------
51,997,597
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONICS/APPLIANCES
1,200,000 Sharp Corp............................................................................... $ 18,538,298
170,000 Sony Corp................................................................................ 17,215,190
--------------
35,753,488
--------------
FINANCE/RENTAL/LEASING
220,000 Acom Co., Ltd............................................................................ 18,294,373
--------------
MOTOR VEHICLES
550,000 Honda Motor Co........................................................................... 20,225,446
515,000 Toyota Motor Corp........................................................................ 20,318,304
--------------
40,543,750
--------------
PHARMACEUTICALS: MAJOR
315,000 Takeda Chemical Industries, Ltd.......................................................... 20,780,745
--------------
PHARMACEUTICALS: OTHER
625,000 Taisho Pharmaceutical Co., Ltd........................................................... 19,287,628
--------------
RECREATIONAL PRODUCTS
105,000 Nintendo Co., Ltd........................................................................ 19,141,181
--------------
TOBACCO
2,600 Japan Tobacco, Inc....................................................................... 20,371,431
--------------
WIRELESS COMMUNICATIONS
673 NTT DoCoMo, Inc.......................................................................... 19,276,541
--------------
TOTAL JAPAN.............................................................................. 319,089,994
--------------
NETHERLANDS (3.9%)
CHEMICALS: SPECIALTY
610,500 DSM NV................................................................................... 17,637,982
--------------
ELECTRONIC EQUIPMENT/INSTRUMENTS
417,100 Koninklijke (Royal) Philips Electronics NV............................................... 17,939,581
--------------
FINANCIAL CONGLOMERATES
310,000 ING Groep NV............................................................................. 20,635,402
--------------
FINANCIAL PUBLISHING/SERVICES
850,000 Wolters Kluwer NV........................................................................ 17,241,145
--------------
FOOD: MAJOR DIVERSIFIED
425,000 Unilever NV.............................................................................. 20,614,412
--------------
TOTAL NETHERLANDS........................................................................ 94,068,522
--------------
PORTUGAL (0.7%)
MAJOR TELECOMMUNICATIONS
1,650,000 Portugal Telecom S.A. (Registered Shares)................................................ 16,952,323
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SINGAPORE (0.9%)
AIRLINES
1,000,000 Singapore Airlines Ltd................................................................... $ 9,482,758
--------------
MAJOR BANKS
1,000,000 DBS Group Holdings Ltd................................................................... 11,034,483
--------------
TOTAL SINGAPORE.......................................................................... 20,517,241
--------------
SPAIN (2.2%)
ELECTRIC UTILITIES
1,500,000 Iberdrola S.A............................................................................ 19,049,040
--------------
MAJOR BANKS
1,800,000 Banco Santander Central Hispano, S.A..................................................... 19,747,505
--------------
OIL REFINING/MARKETING
825,000 Repsol-YPF, S.A.......................................................................... 15,169,782
--------------
TOTAL SPAIN.............................................................................. 53,966,327
--------------
SWEDEN (2.2%)
ELECTRONICS/APPLIANCES
1,055,000 Electrolux AB (Series B)................................................................. 13,239,473
--------------
ENGINEERING & CONSTRUCTION
375,000 Skanska AB (B Shares).................................................................... 12,853,920
--------------
INDUSTRIAL MACHINERY
675,000 Sandvik AB (B Shares).................................................................... 13,546,204
--------------
REGIONAL BANKS
1,950,000 Nordbanken Holding AB.................................................................... 13,954,574
--------------
TOTAL SWEDEN............................................................................. 53,594,171
--------------
SWITZERLAND (6.0%)
FOOD: MAJOR DIVERSIFIED
11,000 Nestle S.A. (Registered Shares).......................................................... 22,929,936
--------------
MAJOR BANKS
175,000 UBS AG (Registered Shares)............................................................... 23,306,311
--------------
MAJOR TELECOMMUNICATIONS
90,000 Swisscom AG (Registered Shares).......................................................... 22,070,064
--------------
OTHER CONSUMER SPECIALTIES
8,500 Compagnie Financiere Richemont AG (Series A)............................................. 25,568,906
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PHARMACEUTICALS: MAJOR
16,000 Novartis AG (Registered Shares).......................................................... $ 24,551,245
--------------
PROPERTY - CASUALTY INSURERS
13,000 Schweizerische Rueckversicherungs-Gesellschaft (Registered Shares)....................... 24,840,764
--------------
TOTAL SWITZERLAND........................................................................ 143,267,226
--------------
UNITED KINGDOM (11.6%)
AEROSPACE & DEFENSE
2,900,000 BAE Systems PLC.......................................................................... 15,595,939
--------------
AIRLINES
3,600,000 British Airways PLC...................................................................... 15,156,866
--------------
APPAREL/FOOTWEAR RETAIL
2,000,000 Next PLC................................................................................. 21,231,694
--------------
BEVERAGES: ALCOHOLIC
1,700,000 Bass PLC................................................................................. 16,656,787
2,125,100 Diageo PLC............................................................................... 18,927,634
--------------
35,584,421
--------------
CONSTRUCTION MATERIALS
2,700,000 Hanson PLC............................................................................... 14,997,739
--------------
ELECTRIC UTILITIES
2,450,000 PowerGen PLC............................................................................. 18,716,968
2,000,000 United Utilities PLC..................................................................... 20,244,516
--------------
38,961,484
--------------
ELECTRONIC COMPONENTS
6,000,000 Cookson Group PLC........................................................................ 16,752,558
--------------
FINANCIAL CONGLOMERATES
1,000,000 HSBC Holdings PLC........................................................................ 13,979,915
--------------
MAJOR BANKS
900,000 Royal Bank of Scotland Group PLC......................................................... 18,936,137
--------------
MAJOR TELECOMMUNICATIONS
1,450,000 British Telecommunications PLC........................................................... 15,190,017
--------------
MOVIES/ENTERTAINMENT
8,272,000 Rank Group PLC........................................................................... 20,049,202
--------------
STEEL
14,000,000 Corus Group PLC.......................................................................... 10,571,645
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO
3,200,000 British American Tobacco PLC............................................................. $ 20,604,026
--------------
WATER UTILITIES
1,798,000 Severn Trent PLC......................................................................... 19,471,423
--------------
TOTAL UNITED KINGDOM..................................................................... 277,083,066
--------------
UNITED STATES (31.4%)
ALUMINUM
770,000 Alcoa, Inc............................................................................... 19,490,625
--------------
AUTOMOTIVE AFTERMARKET
1,025,000 Goodyear Tire & Rubber Co. (The)......................................................... 18,450,000
--------------
CHEMICALS: MAJOR DIVERSIFIED
795,000 Dow Chemical Co.......................................................................... 19,825,312
--------------
COMPUTER PROCESSING HARDWARE
755,000 Compaq Computer Corp..................................................................... 20,822,900
215,000 Hewlett-Packard Co....................................................................... 20,855,000
190,000 International Business Machines Corp..................................................... 21,375,000
--------------
63,052,900
--------------
DEPARTMENT STORES
680,000 Sears, Roebuck & Co...................................................................... 22,045,600
--------------
DISCOUNT STORES
850,000 Target Corp.............................................................................. 21,781,250
--------------
ELECTRIC UTILITIES
370,000 FPL Group, Inc........................................................................... 24,327,500
760,000 GPU, Inc................................................................................. 24,652,500
--------------
48,980,000
--------------
ELECTRONIC EQUIPMENT/INSTRUMENTS
82,001 Agilent Technologies, Inc.*.............................................................. 4,012,924
1,200,000 Xerox Corp............................................................................... 18,075,000
--------------
22,087,924
--------------
ENGINEERING & CONSTRUCTION
800,000 Fluor Corp............................................................................... 24,000,000
--------------
FINANCE/RENTAL/LEASING
620,000 Associates First Capital Corp. (Class A)................................................. 23,560,000
--------------
FOOD RETAIL
775,000 Albertson's, Inc......................................................................... 16,275,000
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INDUSTRIAL CONGLOMERATES
650,000 Honeywell International, Inc............................................................. $ 23,156,250
265,000 Minnesota Mining & Manufacturing Co...................................................... 24,148,125
--------------
47,304,375
--------------
INFORMATION TECHNOLOGY SERVICES
525,000 Electronic Data Systems Corp............................................................. 21,787,500
--------------
INTEGRATED OIL
270,000 Chevron Corp............................................................................. 23,017,500
--------------
MAJOR BANKS
430,000 Bank of America Corp..................................................................... 22,521,250
945,000 KeyCorp.................................................................................. 23,920,312
--------------
46,441,562
--------------
MAJOR TELECOMMUNICATIONS
485,000 SBC Communications, Inc.................................................................. 24,250,000
530,000 Verizon Communications................................................................... 25,671,875
--------------
49,921,875
--------------
MOTOR VEHICLES
917,791 Ford Motor Co............................................................................ 23,231,585
68,739 Visteon Corp............................................................................. 1,039,677
--------------
24,271,262
--------------
OIL REFINING/MARKETING
755,000 Ashland, Inc............................................................................. 25,434,063
835,000 USX-Marathon Group....................................................................... 23,693,125
--------------
49,127,188
--------------
OTHER METALS/MINERALS
565,000 Phelps Dodge Corp........................................................................ 23,588,750
--------------
PACKAGED SOFTWARE
800,000 Computer Associates International, Inc................................................... 20,150,000
--------------
PHARMACEUTICALS: MAJOR
415,000 Bristol-Myers Squibb Co.................................................................. 23,706,875
--------------
PULP & PAPER
750,000 International Paper Co................................................................... 21,515,625
--------------
RECREATIONAL PRODUCTS
410,000 Eastman Kodak Co......................................................................... 16,758,750
--------------
SAVINGS BANKS
625,000 Washington Mutual, Inc................................................................... 24,882,813
--------------
SEMICONDUCTORS
345,000 Intel Corp............................................................................... 14,339,063
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO
820,000 Philip Morris Companies, Inc............................................................. $ 24,138,750
--------------
TRUCKS/CONSTRUCTION/ FARM MACHINERY
625,000 Deere & Co............................................................................... 20,781,251
--------------
TOTAL UNITED STATES...................................................................... 751,281,750
--------------
TOTAL COMMON STOCKS (COST $2,288,280,013)................................................ 2,297,321,445
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
-------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (3.4%)
U.S. GOVERNMENT AGENCY
$82,200 Federal Home Loan Mortgage Assoc. 6.32% due 10/02/00 (COST $82,185,569).................. 82,185,569
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $2,370,465,582) (b)............................................................... 99.4% 2,379,507,014
OTHER ASSETS IN EXCESS OF LIABILITIES................................................... 0.6 14,548,257
----- ---------------
NET ASSETS.............................................................................. 100.0% $ 2,394,055,271
----- ---------------
----- ---------------
</TABLE>
---------------------
* Non-income producing security.
(a) 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 the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $314,946,626 and the aggregate gross unrealized
depreciation is $305,905,194, resulting in net unrealized appreciation of
$9,041,432.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT SEPTEMBER 30, 2000:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
--------------------------------------------------------------------
<S> <C> <C> <C>
EUR 3,952,506 $ 3,488,087 10/02/2000 $ 2,372
GBP 3,708,495 $ 5,422,190 10/02/2000 (41,906)
JPY 202,798,716 $ 1,882,123 10/02/2000 8,347
$ 3,981,687 EUR 4,501,624 10/03/2000 (11,704)
HKD 11,262,724 $ 1,444,587 10/03/2000 74
$ 1,428,597 SGD 2,484,758 10/03/2000 (575)
EUR 3,055,742 $ 2,702,956 10/04/2000 8,098
HKD 9,659,412 $ 1,238,879 10/04/2000 --
$ 2,496,182 SGD 4,340,361 10/04/2000 (1,722)
EUR 2,831,738 $ 2,494,724 10/05/2000 (2,577)
GBP 1,452,702 $ 2,143,549 10/05/2000 3,138
------------
Net unrealized depreciation................... $ (36,455)
============
</TABLE>
CURRENCY ABBREVIATIONS:
------------------------
<TABLE>
<S> <C>
GBP British Pound.
EUR Euro.
HKD Hong Kong Dollar.
JPY Japanese Yen.
SGD Singapore Dollar.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
SUMMARY OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense............................................................. $ 15,595,939 0.7%
Airlines........................................................................ 35,260,649 1.5
Aluminum........................................................................ 31,123,794 1.3
Apparel/Footwear................................................................ 18,590,452 0.8
Apparel/Footwear Retail......................................................... 21,231,694 0.9
Automotive Aftermarket.......................................................... 35,117,910 1.5
Beverages: Alcoholic............................................................ 53,532,310 2.2
Chemicals: Major Diversified.................................................... 52,700,781 2.2
Chemicals: Specialty............................................................ 17,637,982 0.8
Computer Processing Hardware.................................................... 63,052,900 2.6
Construction Materials.......................................................... 31,728,129 1.3
Containers/Packaging............................................................ 27,350,550 1.1
Department Stores............................................................... 41,414,075 1.7
Discount Stores................................................................. 21,781,250 0.9
Electric Utilities.............................................................. 120,457,415 5.0
Electrical Products............................................................. 18,605,377 0.8
Electronic Components........................................................... 34,474,077 1.4
Electronic Equipment/Instruments................................................ 92,025,102 3.9
Electronics/Appliances.......................................................... 48,992,961 2.1
Engineering & Construction...................................................... 36,853,920 1.5
Finance/Rental/Leasing.......................................................... 41,854,373 1.7
Financial Conglomerates......................................................... 67,108,301 2.8
Financial Publishing/Services................................................... 17,241,145 0.7
Food Retail..................................................................... 16,275,000 0.7
Food: Major Diversified......................................................... 43,544,349 1.8
Industrial Conglomerates........................................................ 108,490,553 4.5
Industrial Machinery............................................................ 13,546,204 0.6
Information Technology Services................................................. 38,719,980 1.6
Integrated Oil.................................................................. 23,017,500 1.0
Major Banks..................................................................... 229,060,188 9.6
Major Telecommunications........................................................ 144,148,098 6.0
Miscellaneous Manufacturing..................................................... 16,689,076 0.7
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Motor Vehicles.................................................................. $ 80,411,854 3.4%
Movies/Entertainment............................................................ 20,049,202 0.8
Multi-Line Insurance............................................................ 20,980,401 0.9
Oil & Gas Pipelines............................................................. 14,276,587 0.6
Oil & Gas Production............................................................ 11,970,945 0.5
Oil Refining/Marketing.......................................................... 83,597,881 3.5
Other Consumer Specialties...................................................... 25,568,906 1.1
Other Metals/Minerals........................................................... 23,588,750 1.0
Packaged Software............................................................... 20,150,000 0.8
Pharmaceuticals: Major.......................................................... 69,038,865 2.9
Pharmaceuticals: Other.......................................................... 19,287,628 0.8
Property - Casualty Insurers.................................................... 24,840,764 1.0
Pulp & Paper.................................................................... 21,515,625 0.9
Real Estate Development......................................................... 28,494,658 1.2
Recreational Products........................................................... 35,899,931 1.5
Regional Banks.................................................................. 13,954,574 0.6
Savings Banks................................................................... 24,882,812 1.0
Semiconductors.................................................................. 14,339,062 0.6
Steel........................................................................... 10,571,645 0.4
Telecommunication Equipment..................................................... 14,173,897 0.6
Tobacco......................................................................... 65,114,207 2.7
Trucks/Construction/Farm Machinery.............................................. 20,781,251 0.9
U.S. Government Agency.......................................................... 82,185,569 3.4
Water Utilities................................................................. 19,471,423 0.8
Wireless Communications......................................................... 37,138,543 1.6
-------------- ----
$2,379,507,014 99.4%
-------------- ----
-------------- ----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks................................................................... $2,297,321,445 96.0%
Short-Term Investment........................................................... 82,185,569 3.4
-------------- ----
$2,379,507,014 99.4%
-------------- ----
-------------- ----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $2,370,465,582)................................... $2,379,507,014
Cash........................................................................................ 108,430
Receivable for:
Investments sold........................................................................ 26,972,901
Dividends............................................................................... 6,658,359
Foreign withholding taxes reclaimed..................................................... 3,144,566
Shares of beneficial interest sold...................................................... 407,605
Prepaid expenses and other assets........................................................... 134,961
--------------
TOTAL ASSETS........................................................................... 2,416,933,836
--------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts.......................... 36,455
Payable for:
Investments purchased................................................................... 14,025,816
Shares of beneficial interest repurchased............................................... 4,870,073
Plan of distribution fee................................................................ 1,952,441
Investment management fee............................................................... 1,476,035
Accrued expenses and other payables......................................................... 517,745
--------------
TOTAL LIABILITIES...................................................................... 22,878,565
--------------
NET ASSETS............................................................................. $2,394,055,271
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................. $2,413,108,542
Net unrealized appreciation................................................................. 8,561,393
Accumulated undistributed net investment income............................................. 4,464,650
Accumulated net realized loss............................................................... (32,079,314)
--------------
NET ASSETS............................................................................. $2,394,055,271
==============
CLASS A SHARES:
Net Assets.................................................................................. $36,569,161
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 3,259,435
NET ASSET VALUE PER SHARE.............................................................. $11.22
==============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)...................................... $11.84
==============
CLASS B SHARES:
Net Assets.................................................................................. $2,270,928,338
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 202,715,743
NET ASSET VALUE PER SHARE.............................................................. $11.20
==============
CLASS C SHARES:
Net Assets.................................................................................. $14,943,921
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 1,339,613
NET ASSET VALUE PER SHARE.............................................................. $11.16
==============
CLASS D SHARES:
Net Assets.................................................................................. $71,613,851
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 6,368,654
NET ASSET VALUE PER SHARE.............................................................. $11.24
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $3,973,317 foreign withholding tax)........................................ $ 40,236,157
Interest..................................................................................... 2,377,407
-------------
TOTAL INCOME............................................................................ 42,613,564
-------------
EXPENSES
Plan of distribution fee (Class A shares).................................................... 52,289
Plan of distribution fee (Class B shares).................................................... 13,181,909
Plan of distribution fee (Class C shares).................................................... 83,453
Investment management fee.................................................................... 9,977,984
Transfer agent fees and expenses............................................................. 1,913,424
Custodian fees............................................................................... 350,933
Shareholder reports and notices.............................................................. 118,604
Registration fees............................................................................ 40,660
Professional fees............................................................................ 37,529
Trustees' fees and expenses.................................................................. 9,191
Other........................................................................................ 334
-------------
TOTAL EXPENSES.......................................................................... 25,766,310
-------------
NET INVESTMENT INCOME................................................................... 16,847,254
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments.............................................................................. 15,399,421
Foreign exchange transactions............................................................ (327,899)
-------------
NET GAIN................................................................................ 15,071,522
-------------
Net change in unrealized appreciation/depreciation on:
Investments.............................................................................. (156,315,628)
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies...................................................... (306,466)
-------------
NET DEPRECIATION........................................................................ (156,622,094)
-------------
NET LOSS................................................................................ (141,550,572)
-------------
NET DECREASE................................................................................. $(124,703,318)
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................... $ 16,847,254 $ 34,054,425
Net realized gain....................................................... 15,071,522 415,807,416
Net change in unrealized appreciation................................... (156,622,094) (204,074,148)
-------------- --------------
NET INCREASE (DECREASE)............................................ (124,703,318) 245,787,693
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares...................................................... (298,592) (928,326)
Class B shares...................................................... (14,051,105) (45,697,105)
Class C shares...................................................... (91,045) (244,145)
Class D shares...................................................... (603,905) (1,628,170)
Net realized gain
Class A shares...................................................... (2,078,262) (4,957,870)
Class B shares...................................................... (136,009,940) (368,305,589)
Class C shares...................................................... (862,075) (1,935,417)
Class D shares...................................................... (3,860,315) (7,932,181)
-------------- --------------
TOTAL DIVIDENDS AND DISTRIBUTIONS.................................. (157,855,239) (431,628,803)
-------------- --------------
Net decrease from transactions in shares of beneficial interest......... (336,248,571) (256,234,981)
-------------- --------------
NET DECREASE....................................................... (618,807,128) (442,076,091)
NET ASSETS:
Beginning of period..................................................... 3,012,862,399 3,454,938,490
-------------- --------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $4,464,650 AND
$2,662,043, RESPECTIVELY)........................................... $2,394,055,271 $3,012,862,399
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley 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 converted to a multiple class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security listed or traded
on the New York or American Stock Exchange, NASDAQ, or other exchange is valued
at its latest sale price, prior to the time when assets are valued; if there
were no sales that day, the security is valued at the latest bid price (in cases
where 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; (3) when market quotations are not readily available, including
circumstances under which it is determined by Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager") 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
15
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
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 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 ("forward 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
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.
16
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the 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 tax purposes are
reported as distributions of paid-in-capital.
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; 0.675% to the portion of daily net
assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.65% to the
portion of daily net assets exceeding $3.5 billion but not exceeding $4.5
billion; and 0.625% to the portion of daily net assets in excess of $4.5
billion.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Class B shares
since the inception of the Fund (not including reinvestment of dividend or
capital gain distributions) less the average daily aggregate net
17
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
asset value of the Class B shares redeemed since the Fund's inception upon which
a contingent deferred sales charge has been imposed or waived; or (b) the
average daily net assets of Class B; and (iii) Class C -- up to 1.0% of the
average daily net assets of Class C.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$47,519,953 at September 30, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended September 30, 2000, the distribution fee
was accrued for Class A shares and Class C shares at the annual rate of 0.25%
and 1.0%, respectively.
The Distributor has informed the Fund that for the six months ended
September 30, 2000, it received contingent deferred sales charges from certain
redemptions of the Fund's Class A, Class B and Class C shares of $243,
$1,433,733 and $2,275, respectively and received $8,482 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, 2000 aggregated
$622,031,973 and $1,033,682,452, respectively.
18
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
For the six months ended September 30, 2000, the Fund incurred $92,715 in
brokerage commissions with Dean Witter Reynolds Inc., an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund.
For the six months ended September 30, 2000, the Fund incurred brokerage
commissions of $622,704 with Morgan Stanley & Co., Inc., an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At September 30, 2000, the Fund had
transfer agent fees and expenses payable of approximately $123,000.
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 six months ended September 30, 2000
included in Trustees' fees and expenses in the Statement of Operations amounted
to $3,281. At September 30, 2000, the Fund had an accrued pension liability of
$66,271 which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. 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 $11,000 during fiscal 2000.
As of March 31, 2000, 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.
19
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 (UNAUDITED) CONTINUED
6. 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, 2000 MARCH 31, 2000
--------------------------- --------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 940,067 $ 11,350,006 4,124,442 $ 54,870,198
Reinvestment of dividends and distributions...................... 192,744 2,237,757 426,081 5,518,151
Redeemed......................................................... (1,478,163) (17,731,193) (3,648,207) (47,923,994)
----------- ------------- ----------- -------------
Net increase (decrease) - Class A................................ (345,352) (4,143,430) 902,316 12,464,355
----------- ------------- ----------- -------------
CLASS B SHARES
Sold............................................................. 3,375,074 40,728,354 17,079,751 231,824,851
Reinvestment of dividends and distributions...................... 11,956,708 138,936,947 29,414,839 382,988,816
Redeemed......................................................... (43,141,033) (513,094,591) (69,348,420) (907,049,946)
----------- ------------- ----------- -------------
Net decrease - Class B........................................... (27,809,251) (333,429,290) (22,853,830) (292,236,279)
----------- ------------- ----------- -------------
CLASS C SHARES
Sold............................................................. 145,649 1,752,271 606,768 8,206,945
Reinvestment of dividends and distributions...................... 79,019 914,250 161,933 2,091,513
Redeemed......................................................... (286,884) (3,401,499) (404,616) (5,255,312)
----------- ------------- ----------- -------------
Net increase (decrease) - Class C................................ (62,216) (734,978) 364,085 5,043,146
----------- ------------- ----------- -------------
CLASS D SHARES
Sold............................................................. 2,000,949 24,328,629 3,357,181 45,082,025
Reinvestment of dividends and distributions...................... 374,496 4,355,388 724,675 9,401,482
Redeemed......................................................... (2,191,120) (26,624,890) (2,666,619) (35,989,710)
----------- ------------- ----------- -------------
Net increase - Class D........................................... 184,325 2,059,127 1,415,237 18,493,797
----------- ------------- ----------- -------------
Net decrease in Fund............................................. (28,032,494) $(336,248,571) (20,172,192) $(256,234,981)
=========== ============= =========== =============
</TABLE>
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into 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, 2000, there were outstanding forward contracts.
20
<PAGE>
MORGAN STANLEY 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
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
SEPTEMBER 30, 2000 MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998
---------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................... $ 12.46 $ 13.20 $ 14.43 $ 14.91
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income................................ 0.12 0.22 0.17 0.09
Net realized and unrealized gain (loss).............. (0.64) 0.86 (0.04) 0.62
------- ------- ------- -------
Total income (loss) from investment operations.......... (0.52) 1.08 0.13 0.71
------- ------- ------- -------
Less dividends and distributions from:
Net investment income................................ (0.09) (0.29) (0.14) (0.16)
Net realized gain.................................... (0.63) (1.53) (1.22) (1.03)
------- ------- ------- -------
Total dividends and distributions....................... (0.72) (1.82) (1.36) (1.19)
------- ------- ------- -------
Net asset value, end of period.......................... $ 11.22 $ 12.46 $ 13.20 $ 14.43
======= ======= ======= =======
TOTAL RETURN+........................................... (4.38)%(1) 8.00% 1.10% 5.77%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................ 1.15 %(2)(3) 1.13%(3) 1.12%(3) 1.17%(2)
Net investment income................................... 1.64 %(2)(3) 1.61%(3) 1.39%(3) 1.02%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................. $36,569 $44,929 $35,673 $13,027
Portfolio turnover rate................................. 24 %(1) 41% 47% 51%
</TABLE>
---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED MARCH 31
MONTHS ENDED ----------------------------------------------------------
SEPTEMBER 30, 2000++ 2000++ 1999++ 1998*++
----------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period......................... $12.46 $13.19 $14.44 $13.30
------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income........ 0.07 0.13 0.10 0.11
Net realized and unrealized
gain (loss).................. (0.64) 0.86 (0.06) 2.79
------ ------ ------ ------
Total income (loss) from
investment operations.......... (0.57) 0.99 0.04 2.90
------ ------ ------ ------
Less dividends and distributions
from:
Net investment income........ (0.06) (0.19) (0.07) (0.12)
Net realized gain............ (0.63) (1.53) (1.22) (1.64)
------ ------ ------ ------
Total dividends and
distributions.................. (0.69) (1.72) (1.29) (1.76)
------ ------ ------ ------
Net asset value, end of
period......................... $11.20 $12.46 $13.19 $14.44
====== ====== ====== ======
TOTAL RETURN+................... (4.75)%(1) 7.30% 0.42% 23.41%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................ 1.90 %(2)(3) 1.79%(3) 1.78%(3) 1.71%
Net investment income........... 0.89 %(2)(3) 0.95%(3) 0.74%(3) 0.80%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions....................... $2,271 $2,873 $3,343 $3,812
Portfolio turnover rate......... 24 %(1) 41% 47% 51%
<CAPTION>
FOR THE YEAR ENDED MARCH 31
-----------------------------------
1997 1996
-------------------------------- ---------------
<S> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period......................... $12.86 $11.41
------ ------
Income (loss) from investment
operations:
Net investment income........ 0.12 0.13
Net realized and unrealized
gain (loss).................. 1.44 1.96
------ ------
Total income (loss) from
investment operations.......... 1.56 2.09
------ ------
Less dividends and distributions
from:
Net investment income........ (0.13) (0.15)
Net realized gain............ (0.99) (0.49)
------ ------
Total dividends and
distributions.................. (1.12) (0.64)
------ ------
Net asset value, end of
period......................... $13.30 $12.86
====== ======
TOTAL RETURN+................... 12.58% 18.77%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................ 1.75% 1.85%
Net investment income........... 0.93% 1.05%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions....................... $3,038 $2,434
Portfolio turnover rate......... 40% 40%
</TABLE>
---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
SEPTEMBER 30, 2000 MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998
--------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of
period............................ $ 12.42 $ 13.17 $ 14.42 $14.91
------- ------- ------- ------
Income (loss) from investment
operations:
Net investment income........... 0.07 0.11 0.08 0.02
Net realized and unrealized gain
(loss).......................... (0.63) 0.87 (0.05) 0.62
------- ------- ------- ------
Total income (loss) from investment
operations........................ (0.56) 0.98 0.03 0.64
------- ------- ------- ------
Less dividends and distributions
from:
Net investment income........... (0.07) (0.20) (0.06) (0.10)
Net realized gain............... (0.63) (1.53) (1.22) (1.03)
------- ------- ------- ------
Total dividends and
distributions..................... (0.70) (1.73) (1.28) (1.13)
------- ------- ------- ------
Net asset value, end of period..... $ 11.16 $ 12.42 $ 13.17 $14.42
======= ======= ======= ======
TOTAL RETURN+...................... (4.75)%(1) 7.22% 0.37% 5.26%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.90 %(2)(3) 1.90%(3) 1.85%(3) 1.92%(2)
Net investment income.............. 0.89 %(2)(3) 0.84%(3) 0.66%(3) 0.24%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $14,944 $17,406 $13,664 $9,711
Portfolio turnover rate............ 24 %(1) 41% 47% 51%
</TABLE>
---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
SEPTEMBER 30, 2000 MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998
---------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................... $ 12.48 $ 13.21 $ 14.44 $ 14.91
------- ------- ------- -------
Income (loss) from investments operations:
Net investment income................................ 0.13 0.25 0.20 0.11
Net realized and unrealized gain (loss).............. (0.64) 0.86 (0.05) 0.62
------- ------- ------- -------
Total income (loss) from investment operations.......... (0.51) 1.11 0.15 0.73
------- ------- ------- -------
Less dividends and distributions from:
Net investment income................................ (0.10) (0.31) (0.16) (0.17)
Net realized gain.................................... (0.63) (1.53) (1.22) (1.03)
------- ------- ------- -------
Total dividends and distributions....................... (0.73) (1.84) (1.38) (1.20)
------- ------- ------- -------
Net asset value, end of period.......................... $ 11.24 $ 12.48 $ 13.21 $ 14.44
======= ======= ======= =======
TOTAL RETURN+........................................... (4.31)%(1) 8.28% 1.27% 5.97%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................ 0.90 %(2)(3) 0.90%(3) 0.90%(3) 0.92%(2)
Net investment income................................... 1.89 %(2)(3) 1.84%(3) 1.61%(3) 1.21%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................. $71,614 $77,195 $63,013 $20,032
Portfolio turnover rate................................. 24 %(1) 41% 47% 51%
</TABLE>
---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL DIVIDEND GROWTH
SECURITIES
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.
25
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Paul D. Vance
Vice President
Matthew T. Haynes
Assistant Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc.
Two World 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. Read the
prospectus carefully before investing. Morgan Stanley Dean Witter
Distributors Inc., member NASD.
MORGAN STANLEY
DEAN WITTER
GLOBAL DIVIDEND
GROWTH SECURITIES
SEMIANNUAL REPORT
SEPTEMBER 30, 2000
