<PAGE>
Filed Pursuant to Rule 497(e)
Registration File No.: 33-62158
PROSPECTUS - JULY 30, 1999
Morgan Stanley Dean Witter
----------------------------------------------------------------
LIMITED TERM MUNICIPAL TRUST
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS TO PROVIDE A HIGH LEVEL
OF CURRENT INCOME THAT IS EXEMPT FROM FEDERAL INCOME
TAX, CONSISTENT WITH THE PRESERVATION OF CAPITAL AND
PRESCRIBED STANDARDS OF QUALITY AND MATURITY
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
CONTENTS
The Fund Investment Objective..............................1
Principal Investment Strategies...................1
Principal Risks...................................2
Past Performance..................................4
Fees and Expenses.................................5
Additional Investment Strategy Information........5
Additional Risk Information.......................6
Fund Management...................................8
Shareholder Information Pricing Fund Shares...............................9
How to Buy Shares.................................9
How to Exchange Shares...........................11
How to Sell Shares...............................13
Distributions....................................14
Tax Consequences.................................15
Financial Highlights ................................................17
Our Family of Funds .................................Inside Back Cover
This Prospectus contains important information
about the Fund. Please read it carefully and keep it
for future reference.
<PAGE>
THE FUND
[GRAPHIC OMITTED]
INVESTMENT OBJECTIVE
- --------------------
Morgan Stanley Dean Witter Limited Term Municipal Trust seeks to provide a high
level of current income that is exempt from Federal income tax, consistent with
the preservation of capital and prescribed standards of quality and maturity.
[GRAPHIC OMITTED]
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
(side bar)
INCOME
An investment objective having the goal of selecting securities to pay out
income rather than rise in price.
(end side bar)
The Fund will invest predominately in intermediate term securities that pay
interest exempt from federal income taxes. The Fund's "Investment Manager,"
Morgan Stanley Dean Witter Advisors Inc., generally invests the Fund's assets in
municipal obligations. Municipal obligations are bonds, notes or short-term
commercial paper issued by state governments, local governments and their
respective agencies. In deciding which securities to buy, hold or sell, the
Investment Manager considers market, economic and political conditions. At least
75% of the Fund's net assets will be invested in municipal obligations with the
following ratings at the time of purchase:
o municipal bonds -- within the four highest grades by Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P"), or Fitch IBCA, Inc. ("Fitch");
o municipal notes -- within the two highest grades or, if not rated, have
outstanding bonds within the four highest grades by
Moody's, S&P or Fitch; and
o municipal commercial paper -- within the highest grade by Moody's, S&P or
Fitch.
The Fund also may invest up to 25% of its assets in municipal securities rated
within the fourth highest grade by Moody's, S&P or Fitch.
The municipal obligations in the Fund's portfolio will have an anticipated
average dollar-weighted maturity range of 7 to 10 years, with a maximum average
dollar-weighted maturity of 12 years. At least 80% of the Fund's net assets will
have a maturity of 15 years or less.
The Fund may invest any amount of its assets in securities that pay interest
income subject to the "alternative minimum tax," and some taxpayers may have to
pay tax on a Fund distribution of this income. The Fund therefore may not be a
suitable investment for these investors. See the "Tax Consequences" section for
more details.
Municipal obligations typically are "general obligation" or "revenue" bonds,
notes or commercial paper. The general obligation securities are secured by the
issuer's faith and credit, and its taxing power, for payment of principal and
interest. Revenue securities, however, are generally payable from a specific
revenue source. They are
1
<PAGE>
issued to fund a wide variety of public and private projects in sectors such as
public utilities, housing units, airports and highways, and schools.
In addition, the Fund may invest in private activity bonds, including industrial
development and pollution control bonds and lease obligations.
In pursuing the Fund's investment objective, the Investment Manager has
considerable leeway in deciding which investments it buys, holds or sells on a
day-to-day basis -- and which investment strategies it uses. For example, the
Investment Manager in its discretion may determine to use some permitted
investment strategies while not using others.
[GRAPHIC OMITTED]
PRINCIPAL RISKS
- ---------------
There is no assurance that the Fund will achieve its investment objective. The
Fund's share price will fluctuate with changes in the market value of the Fund's
portfolio securities. When you sell Fund shares, they may be worth less than
what you paid for them and, accordingly, you can lose money investing in this
Fund.
Credit and Interest Rate Risks. A principal risk of investing in the Fund is
associated with its municipal investments. Municipal obligations, like other
debt securities, are subject to two types of risks: credit risk and interest
rate risk.
Credit risk refers to the possibility that the issuer of a security will be
unable to make interest payments and/or repay the principal on its debt. In the
case of revenue bonds, notes or commercial paper, for example, the credit risk
is the possibility that the user fees from a project or other specified revenue
sources are insufficient to meet interest and/or principal payment obligations.
The issuers of private activity bonds, used to finance such projects as health
care facilities and water treatment facilities, also may be negatively impacted
by the general credit of the user of the project. In addition, the Fund may
invest in securities with the lowest investment grade rating. These securities
may have speculative characteristics.
Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates. When the
general level of interest rates goes up, the prices of most fixed-income
securities go down. When the general level of interest rates goes down, the
prices of most fixed-income securities go up. As a general illustration of the
relationship between fixed-income securities and interest rates, the following
table shows how interest rates affect bond prices.
2
<PAGE>
<TABLE>
<CAPTION>
HOW INTEREST RATES AFFECT BOND PRICES
- --------------------------------------------------------------------------------
PRICE PER $1,000 OF A MUNICIPAL BOND IF
INTEREST RATES:
-----------------------------------------
INCREASE* DECREASE**
----------------- ---------------------
YEARS TO BOND
MATURITY MATURITY COUPON 1% 2% 1% 2%
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 1999 3.00% $990 $981 $1,010 $1,020
- --------------------------------------------------------------------------------
5 2003 3.75% $956 $914 $1,046 $1,095
- --------------------------------------------------------------------------------
10 2008 4.10% $922 $852 $1,085 $1,180
- --------------------------------------------------------------------------------
20 2018 4.90% $883 $785 $1,138 $1,302
- --------------------------------------------------------------------------------
30 2028 4.95% $861 $749 $1,175 $1,396
- --------------------------------------------------------------------------------
</TABLE>
Source: Municipal Market Data (a division of Thomson Financial Municipal Group):
"Aaa" yield curve as of 12/31/98
* Assumes no effect from market discount calculation.
** Assumes bonds are non-callable.
The table is an illustration and does not represent expected yields or share
price changes of any Morgan Stanley Dean Witter mutual fund.
Other Risks. The performance of the Fund also will depend on whether the
Investment Manager is successful in pursuing the Fund's investment strategy. The
Fund is also subject to other risks from its permissible investments, including
private activity bonds and lease obligations. For more information about these
risks, see the "Additional Risk Information" section.
Shares of the Fund are not bank deposits and are not guaranteed or insured by
the FDIC or any other government agency.
3
<PAGE>
[GRAPHIC OMITTED]
PAST PERFORMANCE
- ----------------
(side bar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's shares has varied from year
to year over the past 5 calendar years.
(end side bar)
The bar chart and table below provide some indication of the risks of investing
in the Fund. The Fund's past performance does not indicate how the Fund will
perform in the future.
ANNUAL TOTAL RETURNS -- CALENDAR YEARS
1994 -7.95%
'95 16.72%
'96 3.17%
'97 6.46%
'98 5.10%
Year-to-date total return as of March 31, 1999 was 0.40%.
During the periods shown in the bar chart, the highest return for a calendar
quarter was 6.78% (quarter ended March 31, 1995) and the lowest return for a
calendar quarter was -5.50% (quarter ended March 31, 1994).
(side bar)
AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Fund's average annual returns with those of a broad
measure of market performance over time, as well as with an index of funds with
similar investment objectives.
(end side bar)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1998)
- --------------------------------------------------------------------------------
LIFE OF FUND
PAST 1 YEAR PAST 5 YEARS (SINCE 7/12/93)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Limited Term Municipal Trust 5.10% 4.40% 4.88%
- --------------------------------------------------------------------------------
Lehman Brothers 10-Year
Municipal Bond Index(1) 6.76% 6.35% 6.77%(3)
- --------------------------------------------------------------------------------
Lipper Intermediate Muni Debt
Funds Index(2) 5.62% 5.13% 5.51%(3)
- --------------------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers 10-year Municipal Bond Index measures the performance of
municipal bonds rated at least Baa1 by Moody's Investors Services Inc. with
maturities ranging between 9 and 12 years. The performance of the Index does
not include any expenses, fees or charges. The Index is unmanaged and should
not be considered an investment.
(2) The Lipper Intermediate Muni Debt Funds Index is an equally-weighted
performance index of the largest qualifying funds (based on net assets) in
the Lipper Intermediate Muni Debt Funds objective. The Index, which is
adjusted for capital gains distributions and income dividends, is unmanaged
and should not be considered an investment. There are currently 30 funds
represented in this Index.
(3) For the period July 31, 1993 to December 31, 1998.
4
<PAGE>
[GRAPHIC OMITTED]
FEES AND EXPENSES
- -----------------------
The table below briefly describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. The Fund does not charge account or exchange
fees.
(side bar)
ANNUAL FUND
OPERATING EXPENSES
These expenses are deducted from the Fund's assets and are based on expenses
paid for the fiscal year ended March 31, 1999.
(end side bar)
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
- -----------------------------------------------------------
<S> <C>
Management fee 0.50%
- -----------------------------------------------------------
Distribution and service (12b-1) fees None
- -----------------------------------------------------------
Other expenses 0.36%
- -----------------------------------------------------------
Total annual Fund operating expenses 0.86%
- -----------------------------------------------------------
</TABLE>
Example
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your investment has a
5% return each year, and the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, the table below shows your costs at
the end of each period based on these assumptions.
<TABLE>
<CAPTION>
Expenses Over Time
- -----------------------------------------
1 YEAR 3 Years 5 Years 10 Years
- -----------------------------------------
<S> <C> <C> <C>
$88 $274 $477 $1,061
- -----------------------------------------
</TABLE>
[GRAPHIC OMITTED]
ADDITIONAL INVESTMENT STRATEGY INFORMATION
- ------------------------------------------
This section provides additional information relating to the Fund's principal
investment strategies.
Private Activity Bonds. The Fund may invest more than 25% of its assets in
municipal obligations known as private activity bonds. These securities include,
for example, housing, industrial development and pollution control revenue,
electric, utility, manufacturing, and transportation facilities.
Lease Obligations. Included within the revenue bonds category are participations
in lease obligations or installment purchase contracts of municipalities.
Generally, state and local agencies or authorities issue lease obligations to
acquire equipment and facilities for public and private purposes.
5
<PAGE>
Defensive Investing. The Fund may take temporary "defensive" positions in
attempting to respond to adverse market conditions. The Fund may invest any
amount of its assets in taxable money market instruments when the Investment
Manager believes it is advisable to do so. Although taking a defensive posture
is designed to protect the Fund from an anticipated market downturn, it could
have the effect of reducing the Fund's ability to provide tax-exempt income.
When the Fund takes a defensive position, it may not achieve its investment
objective.
The percentage limitations relating to the composition of the Fund's portfolio
apply at the time the Fund acquires an investment. Subsequent percentage changes
that result from market fluctuations will not require the Fund to sell any
portfolio security.
[GRAPHIC OMITTED]
ADDITIONAL RISK INFORMATION
- ---------------------------
This section provides additional information relating to the principal risks of
investing in the Fund.
Bond Insurance Risk. Many of the municipal obligations the Fund invests in will
be covered by insurance at the time of issuance or at a later date. Such
insurance covers the remaining term of the security. Insured municipal
obligations would generally be assigned a lower rating if the rating were based
primarily on the credit quality of the issuer without regard to the insurance
feature. If the claims-paying ability of the insurer were downgraded, the
ratings on the municipal obligations it insures may also be downgraded.
Private Activity Bonds. The issuers of private activity bonds in which the Fund
may invest may be negatively impacted by conditions affecting either the general
credit of the user of the private activity project or the project itself.
Conditions such as regulatory and environmental restrictions and economic
downturns may lower the need for these facilities and the ability of users of
the project to pay for the facilities. This could cause a decline in the Fund's
value. The Fund's private activity bond holdings also may pay interest subject
to the alternative minimum tax. See the "Tax Consequences" section for more
details.
Lease Obligations. Lease obligations may have risks not normally associated with
general obligation or other revenue bonds. Leases and installment purchase or
conditional sale contracts (which may provide for title to the leased asset to
pass eventually to the issuer) have developed as a means for governmental
issuers to acquire property and equipment without the necessity of complying
with the constitutional and statutory requirements generally applicable for the
issuance of debt. Certain lease obligations contain "non-appropriation" clauses
that provide that the governmental issuer has no obligation to make future
payments under the lease or contract unless money is appropriated for that
purpose by the appropriate legislative body on an annual
6
<PAGE>
or other periodic basis. Consequently, continued lease payments on those lease
obligations containing "non-appropriation" clauses are dependent on future
legislative actions. If these legislative actions do not occur, the holders of
the lease obligation, such as the Fund, may experience difficulty in exercising
their rights, including disposition of the property.
Year 2000. The Fund could be adversely affected if the computer systems
necessary for the efficient operation of the Investment Manager, the Fund's
other service providers and the markets and governmental issuers in which the
Fund invests do not properly process and calculate date-related information from
and after January 1, 2000. While year 2000-related computer problems could have
a negative effect on the Fund, the Investment Manager and its affiliates are
working hard to avoid any problems and to obtain assurances from their service
providers that they are taking similar steps.
In addition, it is possible that the markets for securities in which the Fund
invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. In
addition, governmental data processing errors also may result in overall
economic uncertainties. Earnings of individual issuers will be affected by
remediation costs, which may be substantial. Accordingly, the Fund's investments
may be adversely affected.
7
<PAGE>
[GRAPHIC OMITTED]
FUND MANAGEMENT
- ---------------
(side bar)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc.,
its wholly-owned subsidiary, has more than $136.9 billion in assets under
management or administration as of June 30, 1999.
(end side bar)
The Fund has retained the Investment Manager -- Morgan Stanley Dean Witter
Advisors Inc. -- to provide administrative services, manage its business affairs
and invest its assets, including the placing of orders for the purchase and sale
of portfolio securities. The Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & 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. Its main business office is
located at Two World Trade Center, New York, New York 10048.
The Fund's portfolio is managed within the Investment Manager's Tax-Exempt
Group. Katherine H. Stromberg is the Fund's portfolio manager. Ms. Stromberg has
been a portfolio manager at the Investment Manager for over five years.
The Fund pays the Investment Manager a monthly management fee as full
compensation for the services and facilities furnished to the Fund, and for Fund
expenses assumed by the Investment Manager. The fee is based on the Fund's
average daily net assets. For the fiscal year ended March 31, 1999, the Fund
accrued total compensation to the Investment Manager amounting to 0.50% of the
Fund's average daily net assets.
8
<PAGE>
SHAREHOLDER INFORMATION
[GRAPHIC OMITTED]
PRICING FUND SHARES
- -------------------
The price of Fund shares, called "net asset value," is based on the value of the
Fund's portfolio securities.
The net asset value per share of the Fund is determined once daily at 4:00 p.m.
Eastern time, on each day that the New York Stock Exchange is open (or, on days
when the New York Stock Exchange closes prior to 4:00 p.m., at such earlier
time). Shares will not be priced on days that the New York Stock Exchange is
closed.
The value of the Fund's portfolio securities (except for short-term taxable debt
securities and certain other investments) are valued by an outside independent
pricing service. The service uses a computerized grid matrix of tax-exempt
securities and its evaluations in determining what it believes is the fair value
of the portfolio securities. The Fund's Board of Trustees believes that timely
and reliable market quotations are generally not readily available to the Fund
to value tax-exempt securities and the valuations that the pricing service
supplies are more likely to approximate the fair value of the securities.
Short-term debt portfolio securities with remaining maturities of sixty days or
less at the time of purchase are valued at amortized cost. However, if the cost
does not reflect the securities' market value, these securities will be valued
at their fair value.
[GRAPHIC OMITTED]
HOW TO BUY SHARES
- -----------------
(side bar)
CONTACTING A
FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (800) THE-DEAN for the telephone number of
the Morgan Stanley Dean Witter office nearest you. You may also access our
office locator on our Internet site at: www.msdw.com/individual/funds
(end side bar)
You may open a new account to buy Fund shares or buy additional Fund shares for
an existing account by contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative. Your Financial Advisor
will assist you, step-by-step, with the procedures to invest in the Fund. You
may also purchase shares directly by calling the Fund's transfer agent and
requesting an application.
When you buy Fund shares, the shares are purchased at the next share price
calculated after we receive your purchase order. Your payment is due on the
third business day after you place your purchase order. We reserve the right to
reject any order for the purchase of Fund shares.
9
<PAGE>
(side bar)
EASYINVEST(SM)
A purchase plan that allows you to transfer money automatically from your
checking or savings account or from a Money Market Fund on a semi-monthly,
monthly or quarterly basis. Contact your Morgan Stanley Dean Witter Financial
Advisor for further information about this service.
(end side bar)
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
- --------------------------------------------------------------------
MINIMUM INVESTMENT
----------------------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
- --------------------------------------------------------------------
<S> <C> <C>
Regular accounts: $1,000 $100
- --------------------------------------------------------------------
EasyInvest(SM)
(Automatically from your
checking or savings
account or Money Market Fund) $100* $100*
- --------------------------------------------------------------------
</TABLE>
* Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund shares through: (1)
the Investment Manager's mutual fund asset allocation plan, (2) a program,
approved by the Fund's distributor, in which you pay an asset-based fee for
advisory, administrative and/or brokerage services, or (3) employer-sponsored
employee benefit plan accounts.
Subsequent Investments Sent Directly to the Fund. In addition to buying
additional Fund shares for an existing account by contacting your Morgan Stanley
Dean Witter Financial Advisor, you may send a check directly to the Fund. To buy
additional shares in this manner:
o Write a "letter of instruction" to the Fund specifying the name(s) on the
account, the account number, the social security or tax identification
number, and the investment amount. The letter must be signed by the account
owner(s).
o Make out a check for the total amount payable to: Morgan Stanley Dean Witter
Limited Term Municipal Trust.
o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB at P.O. Box
1040, Jersey City, NJ 07303.
PLAN OF DISTRIBUTION The Fund has adopted a Plan of Distribution in accordance
with Rule 12b-1 under the Investment Company Act of 1940. The Plan allows the
Fund's distributor to pay distribution fees for the sale and distribution of
Fund shares.
10
<PAGE>
[GRAPHIC OMITTED]
HOW TO EXCHANGE SHARES
- ----------------------
Permissible Fund Exchanges. You may only exchange shares of the Fund for shares
of other continuously offered Morgan Stanley Dean Witter Funds if the Fund
shares were acquired in an exchange of shares initially purchased in a
Multi-Class Fund or an FSC Fund (subject to a front-end sales charge). In that
case, the shares may be subsequently re-exchanged for shares of the same Class
of any Multi-Class Fund or FSC Fund or for shares of another No-Load Fund, Money
Market Fund, North American Government Income Trust or Short-Term U.S. Treasury
Trust. Of course, if an exchange is not permitted, you may sell shares of the
Fund and buy another Fund's shares with the proceeds.
See the inside back cover of this Prospectus for each Morgan Stanley Dean Witter
Fund's designation as a Multi-Class Fund, FSC Fund, No-Load Fund or Money Market
Fund. If a Morgan Stanley Dean Witter Fund is not listed, consult the inside
back cover of that Fund's Prospectus for its designation. For purposes of
exchanges, shares of FSC Funds are treated as Class A shares of a Multi-Class
Fund.
Exchanges may be made after shares of the Fund acquired by purchase have been
held for thirty days. There is no waiting period for exchanges of shares
acquired by exchange or dividend reinvestment. The current Prospectus for each
fund describes its investment objective(s), policies and investment minimums,
and should be read before investment.
Exchange Procedures. You can process an exchange by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative. Otherwise, you must forward an exchange privilege authorization
form to the Fund's transfer agent -- Morgan Stanley Dean Witter Trust FSB -- and
then write the transfer agent or call (800) 869-NEWS to place an exchange order.
You can obtain an exchange privilege authorization form by contacting your
Financial Advisor or other authorized financial representative, or by calling
(800) 869-NEWS. If you hold share certificates, no exchanges may be processed
until we have received all applicable share certificates.
An exchange to any Morgan Stanley Dean Witter Fund (except a Money Market Fund)
is made on the basis of the next calculated net asset values of the Funds
involved after the exchange instructions are accepted. When exchanging into a
Money Market Fund, the Fund's shares are sold at their next calculated net asset
value and the Money Market Fund's shares are purchased at their net asset value
on the following business day.
The Fund may terminate or revise the exchange privilege upon required notice.
The check writing privilege is not available for Money Market Fund shares you
acquire in an exchange.
Telephone Exchanges. For your protection when calling Morgan Stanley Dean Witter
Trust FSB, we will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. These procedures may
include
11
<PAGE>
requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number. Telephone
instructions also may be recorded.
Telephone instructions will be accepted if received by the Fund's transfer agent
between 9:00 a.m. and 4:00 p.m. Eastern time, on any day the New York Stock
Exchange is open for business. 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 Fund in the past.
Margin Accounts. If you have pledged your Fund shares in a margin account,
contact your Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative regarding restrictions on the sale of such shares.
Tax Considerations of Exchanges. If you exchange shares of the Fund for shares
of another Morgan Stanley Dean Witter Fund there are important tax
considerations. For tax purposes, the exchange out of the Fund is considered a
sale of Fund shares -- and the exchange into the other Fund is considered a
purchase. As a result, you may realize a capital gain or loss.
You should review the "Tax Consequences" section and consult your own tax
professional about the tax consequences of an exchange.
Frequent Exchanges. A pattern of frequent exchanges may result in the Fund
limiting or prohibiting, at its discretion, additional purchases and/or
exchanges. The Fund will notify you in advance of limiting your exchange
privileges.
For further information regarding exchange privileges, you should contact your
Morgan Stanley Dean Witter Financial Advisor or call (800) 869-NEWS.
12
<PAGE>
[GRAPHIC OMITTED]
HOW TO SELL SHARES
- ------------------
You can sell some or all of your Fund shares at any time. Your shares will be
sold at the next price calculated after we receive your order to sell as
described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial Advisor or
Financial Advisor other authorized financial representative.
--------------------------------------------------------------------------------------------
[GRAPHIC OMITTED] Payment will be sent to the address to which the account is registered or deposited in
your brokerage account.
- ------------------------------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:
o your account number;
[GRAPHIC OMITTED] o the dollar amount or the number of shares you wish to sell; and
o the signature of each owner as it appears on the account.
--------------------------------------------------------------------------------------------
If you are requesting payment to anyone other than the registered owner(s) or that
payment be sent to any address other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature guarantee. You can generally
obtain a signature guarantee from an eligible guarantor acceptable to Morgan Stanley
Dean Witter Trust FSB. (You should contact Morgan Stanley Dean Witter Trust FSB at
(800) 869-NEWS for determination as to whether a particular institution is an eligible
guarantor.) A notary public cannot provide a signature guarantee. Additional
documentation may be required for shares held by a corporation, partnership, trustee
or executor.
--------------------------------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983, Jersey City,
New Jersey 07303. If you hold share certificates, you must return the certificates, along
with the letter and any required additional documentation.
--------------------------------------------------------------------------------------------
A check will be mailed to the name(s) and address in which the account is registered, or
otherwise according to your instructions.
- ------------------------------------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has a total
Withdrawal Plan market value of at least $10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the amount is at least $25), on
[GRAPHIC OMITTED] a monthly, quarterly, semi-annual or annual basis, from any Fund with a balance of at least
$1,000. Each time you add a Fund to the plan, you must meet the plan requirements.
--------------------------------------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your Morgan Stanley Dean
Witter Financial Advisor or call (800) 869-NEWS. You may terminate or suspend your
plan at any time. Please remember that withdrawals from the plan are sales of shares,
not Fund "distributions," and ultimately may exhaust your account balance. The Fund
may terminate or revise the plan at any time.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Payment for Sold Shares. After we receive your complete instructions to sell as
described above, a check will be mailed to you within seven days, although we
will attempt to make payment within one business day. Payment may also be sent
to your brokerage account.
Payment may be postponed or the right to sell your shares suspended under
unusual circumstances. If you request to sell shares that were recently
purchased by check,
13
<PAGE>
payment of the sale proceeds may be delayed for the minimum time needed to
verify that the check has been honored (not more than fifteen days from the time
we receive the check).
Involuntary Sales. The Fund reserves the right, on sixty days' notice, to sell
the shares of any shareholder (other than shares held in an IRA or 403(b)
Custodial Account) whose shares, due to sales by the shareholder, have a value
below $100, or in the case of an account opened through EasyInvest(SM), if after
12 months the shareholder has invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will notify you
and allow you sixty days to make an additional investment in an amount that will
increase the value of your account to at least the required amount before the
sale is processed.
Margin Accounts. If you have pledged your Fund shares in a margin account,
contact your Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative regarding restrictions on the sale of such shares.
[GRAPHIC OMITTED]
DISTRIBUTIONS
- -------------
(side bar)
TARGETED DIVIDENDS(SM)
You may select to have your Fund distributions automatically invested in
another Morgan Stanley Dean Witter Fund that you own. Contact your Morgan
Stanley Dean Witter Financial Advisor for further information about this
service.
(end side bar)
The Fund passes substantially all of its earnings from income and capital gains
along to its investors as "distributions." The Fund earns interest from
fixed-income investments. These amounts are passed along to Fund shareholders as
"income dividend distributions." The Fund realizes capital gains whenever it
sells securities for a higher price than it paid for them. These amounts may be
passed along as "capital gain distributions."
Normally, income dividends are declared on each day the New York Stock Exchange
is open for business and are distributed to shareholders monthly. Capital gains,
if any, are usually distributed in June and December. The Fund, however, may
retain and reinvest any long-term capital gains. The Fund may at times make
payments from sources other than income or capital gains that represent a return
of a portion of your investment.
Distributions are reinvested automatically in additional shares of the Fund and
automatically credited to your account, unless you request in writing that all
distributions be paid in cash. If you elect the cash option, processing of your
dividend checks begins immediately following the monthly payment date, and the
Fund will mail a monthly dividend check to you normally during the first seven
days of the following month. No interest will accrue on uncashed checks. If you
wish to change how your
14
<PAGE>
distributions are paid, your request should be received by the Fund's transfer
agent, Morgan Stanley Dean Witter Trust FSB, at least five business days prior
to the record date of the distributions.
[GRAPHIC OMITTED]
TAX CONSEQUENCES
- ----------------
As with any investment, you should consider how your Fund investment will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in the Fund.
You need to be aware of the possible tax consequences when:
o The Fund makes distributions; and
o You sell Fund shares, including an exchange to another Morgan Stanley Dean
Witter Fund.
Taxes on Distributions. Your income dividend distributions are normally exempt
from federal income taxes -- to the extent they are derived from municipal
obligations. Income derived from other portfolio securities may be subject to
federal, state and/or local income taxes.
Income derived from some municipal securities is subject to the federal
"alternative minimum tax." Certain tax-exempt securities whose proceeds are used
to finance private, for-profit organizations are subject to this special tax
system that ensures that individuals pay at least some federal taxes. Although
interest on these securities is generally exempt from federal income tax, some
taxpayers who have many tax deductions or exemptions nevertheless may have to
pay tax on the income.
If you borrow money to purchase shares of the Fund, the interest on the borrowed
money is generally not deductible for personal income tax purposes.
If the Fund makes any capital gain distributions, those distributions will
normally be subject to federal and state income tax when they are paid, whether
you take them in cash or reinvest them in Fund shares. Any short-term capital
gain distributions are taxable to you as ordinary income. Any long-term capital
gain distributions are taxable to you as long-term capital gains, no matter how
long you have owned shares in the Fund.
The Fund may derive gains in part from municipal obligations the Fund purchased
below their principal or face values. All, or a portion, of these gains may be
taxable to you as ordinary income rather than capital gains.
15
<PAGE>
Every January, you will be sent a statement (IRS Form 1099-DIV) showing the
distributions paid to you in the previous year. The statement provides full
information on your dividends and capital gains for tax purposes.
Taxes on Sales. Your sale of Fund shares normally is subject to federal and
state income tax and may result in a taxable gain or loss to you. A sale also
may be subject to local income tax. Your exchange of Fund shares for shares of
another Morgan Stanley Dean Witter Fund is treated for tax purposes like a sale
of your original shares and a purchase of your new shares. Thus, the exchange
may, like a sale, result in a taxable gain or loss to you and will give you a
new tax basis for your new shares.
When you open your Fund account, you should provide your social security or tax
identification number on your investment application. By providing this
information, you will avoid being subject to a federal backup withholding tax of
31% on taxable distributions and sale proceeds. Any withheld amount would be
sent to the IRS as an advance tax payment.
16
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years of the Fund. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the Fund's financial statements, is
included in the annual report, which is available upon request.
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 10.26 $ 9.91 $ 9.95 $ 9.56 $ 9.61
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.39 0.40 0.40 0.41 0.42
Net realized and unrealized gain (loss) 0.08 0.35 (0.04) 0.39 (0.05)
------- ------- ------- ------- -------
Total income from investment operations 0.47 0.75 0.36 0.80 0.37
- ---------------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.39) (0.40) (0.40) (0.41) (0.42)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.34 $10.26 $ 9.91 $ 9.95 $ 9.56
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 4.68% 7.70% 3.65% 8.42% 4.01%
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses 0.86%(1) 0.83% 0.88%(1) 0.87%(1) 0.76%
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income 3.75% 3.92% 3.99% 4.09% 4.41%
- ---------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $58,648 $57,500 $61,098 $72,766 $85,499
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% -- -- -- 2%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Does not reflect the effect of expense offset of 0.01%.
17
<PAGE>
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20
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on
in and meet the family!
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH FUNDS Aggressive Equity Fund Health Sciences Trust
American Opportunities Fund Information Fund
Capital Growth Securities Natural Resource Development Securities
Developing Growth Securities Precious Metals and Minerals Trust
Equity Fund GLOBAL/INTERNATIONAL FUNDS
Growth Fund Competitive Edge Fund - "Best Ideas" Portfolio
Market Leader Trust European Growth Fund
Mid-Cap Equity Trust Fund of Funds - International Portfolio
Small Cap Growth Fund International Fund
Special Value Fund International SmallCap Fund
Value Fund Japan Fund
THEME FUNDS Latin American Growth Fund
Financial Services Trust Pacific Growth Fund
- --------------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUNDS Balanced Growth Fund Strategist Fund
Balanced Income Fund Value-Added Market Series/Equity Portfolio
Convertible Securities Trust THEME FUNDS
Dividend Growth Securities Global Utilities Fund
Fund of Funds - Domestic Portfolio Real Estate Fund
Income Builder Fund Utilities Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund GLOBAL FUNDS
S&P 500 Select Fund Global Dividend Growth Securities
- --------------------------------------------------------------------------------------------------------------
INCOME FUNDS GOVERNMENT INCOME FUNDS GLOBAL INCOME FUNDS
Federal Securities Trust North American Government Income Trust
Short-Term U.S. Treasury Trust World Wide Income Trust
U.S. Government Securities Trust TAX-FREE INCOME FUNDS
DIVERSIFIED INCOME FUNDS California Tax-Free Income Fund
Diversified Income Trust Hawaii Municipal Trust(FSC)
CORPORATE INCOME FUNDS Limited Term Municipal Trust(NL)
High Yield Securities Multi-State Municipal Series Trust(FSC)
Intermediate Income Securities New York Tax-Free Income Fund
Short-Term Bond Fund(NL) Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET FUNDS
Liquid Asset Fund(MM) California Tax-Free Daily Income Trust(MM)
U.S. Government Money Market Trust(MM) N.Y. Municipal Money Market Trust(MM)
Tax-Free Daily Income Trust(MM)
</TABLE>
There may be funds created after this Prospectus was published. Please consult
the inside back cover of a new Fund's prospectus for its designation, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
Short-Term U.S. Treasury Trust, is a Multi-Class Fund. A Multi-Class Fund is a
mutual fund offering multiple Classes of shares. The other types of Funds are:
NL -- No-Load (Mutual) Fund; MM -- Money Market Fund; FSC -- A mutual fund sold
with a front-end sales charge and a distribution (12b-1) fee.
<PAGE>
PROSPECTUS - JULY 30, 1999
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's Statement of Additional Information also provides additional information
about the Fund. The Statement of Additional Information is incorporated herein
by reference (legally is part of this Prospectus). For a free copy of any of
these documents, to request other information about the Fund, or to make
shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
www.msdw.com/individual/funds
Information about the Fund (including the Statement of Additional Information)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site at
(www.sec.gov), and copies of this information may be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the SEC, Washington,
DC 20549-6009.
TICKER SYMBOL:
DWLTX
- ---------
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-7700)
Morgan Stanley Dean Witter
----------------------------------------------------------------
LIMITED TERM MUNICIPAL TRUST
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS TO PROVIDE A HIGH LEVEL
OF CURRENT INCOME THAT IS EXEMPT FROM FEDERAL
INCOME TAX, CONSISTENT WITH THE PRESERVATION OF
CAPITAL AND PRESCRIBED STANDARDS OF QUALITY AND MATURITY
