<PAGE> 1
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND Two World Trade Center
LETTER TO THE SHAREHOLDERS August 31, 1999 New York, New York 10048
DEAR SHAREHOLDER:
During the six-month period ended August 31, 1999, electric utility stocks
performed well as value-oriented equities were emphasized over growth-oriented
issues in the market. Telecommunications equities were weaker on a relative
basis, particularly near the end of the period, when investors came to believe
that a price war had started in the U.S. long-distance telephone industry. Asian
utilities performed well, while those in Europe were held back by the softness
of the new euro currency.
PERFORMANCE AND PORTFOLIO STRATEGY
For the six-month period ended August 31, 1999, Morgan Stanley Dean Witter
Global Utilities Fund's Class B shares posted a return of 3.48 percent, compared
to returns of 7.25 percent for the Lipper Utility Funds Index (Lipper index) and
8.75 percent for the Morgan Stanley Capital International World Index (MSCI
World Index). For the same period, the Fund's Class A, C and D shares had total
returns of 3.86 percent, 3.46 percent and 3.98 percent, respectively.
Performance of the Fund's four share classes varies because of differing
expenses. (Total return figures shown assume the reinvestment of all
distributions and do not reflect the deduction of any applicable sales charges.)
The Fund's underperformance relative to the Lipper index during the first half
of its fiscal year was due to its emphasis on the telecommunications sector.
While this sector's weakness hindered the Fund's performance over the last six
months, it has contributed positively to its longer-term performance results.
For the twelve-month period ended August 31, 1999, the Fund's Class B shares
returned 24.97 percent, compared to 22.61 percent for the Lipper index.
A number of changes were made to the Fund's portfolio during the first half of
its fiscal year. The Fund's allocation to the United States increased from 56
percent of investments on February 28, 1999, to 65 percent as of August 31,
1999. The Fund's European allocation was decreased from 34 percent to 23 percent
over the same period. The Fund also reduced its
<PAGE> 2
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS August 31, 1999, continued
weighting in telecommunications and increased its exposure to electric
utilities. Among the new electric utility stock positions were Calpine
Corporation and UtiliCorp. Within the telecommunications sector, the Fund added
Nippon Telegraph & Telephone and NTT Mobile Communication Network (both in
Japan) to its portfolio.
LOOKING AHEAD
Going forward, we anticipate that the Fund's telecommunications companies will
continue to have strong and relatively consistent growth. The Fund's
non-telecommunications holdings currently include some of the most attractively
valued stocks in the market. Finally, the Fund's non-U.S. holdings, particularly
those in Europe, should benefit from increasing shareholder friendliness,
restructuring of companies and an improving economy.
On May 1, 1999, Mitchell M. Merin was named President of the Morgan Stanley Dean
Witter Funds. Mr. Merin is the President and Chief Operating Officer of Asset
Management for Morgan Stanley Dean Witter & Co. and President, Chief Executive
Officer and Director of Morgan Stanley Dean Witter Advisors Inc., the Fund's
investment manager. He also serves as Chairman, Chief Executive Officer and
Director of the Fund's distributor and transfer agent.
We appreciate your ongoing support of Morgan Stanley Dean Witter Global
Utilities Fund and look forward to continuing to serve your investment needs.
<TABLE>
<S> <C>
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
</TABLE>
2
<PAGE> 3
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FUND PERFORMANCE August 31, 1999
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES*
- ----------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/99
- -------------------------
Since Inception (7/28/97) 22.02(1) 18.92(2)
1 Year 25.83(1) 19.22(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES+
- ----------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/99
- -------------------------
Since Inception (5/31/94) 16.33(1) 16.23(2)
1 Year 24.97(1) 19.97(2)
5 Year 16.61(1) 16.40(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES++
- ----------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/99
- -------------------------
Since Inception (7/28/97) 21.08(1) 21.08(2)
1 Year 24.83(1) 23.83(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES#
- ----------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/99
- -------------------------
Since Inception (7/28/97) 22.32(1)
1 Year 26.10(1)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS.
- ---------------------
<TABLE>
<S> <C>
(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.
</TABLE>
3
<PAGE> 4
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS August 31, 1999 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (88.9%)
AUSTRALIA (1.2%)
Energy
1,460,000 Australian Gas Light Company
Ltd. ....................... $ 9,498,816
------------
CANADA (4.1%)
Electronic Data Processing
600,000 Sanga International Inc.*.... 1,500,000
------------
Energy
236,000 Enbridge Inc. ............... 5,041,789
320,000 TransCanada Pipelines
Ltd. ....................... 4,511,117
------------
9,552,906
------------
Telecommunications
155,000 AT&T Canada Inc.
(Class B)*.................. 9,377,500
54,411 BCT.Telus Communications,
Inc. (Non-Voting) (Class
A).......................... 1,175,164
163,233 BCT.Telus Communications,
Inc. (Voting)............... 3,574,685
------------
14,127,349
------------
Telecommunications Equipment
180,000 Nortel Networks Corp. ....... 7,413,608
------------
TOTAL CANADA................. 32,593,863
------------
DENMARK (0.8%)
Telecommunications
108,000 Tele Danmark AS (B Shares)... 6,116,107
------------
FINLAND (0.9%)
Telecommunications Equipment
80,000 Nokia Oyj (A Shares)......... 6,678,976
------------
FRANCE (2.6%)
Telecommunications
57,000 France Telecom S.A. (ADR).... 4,474,500
------------
Water Supply
47,000 Suez Lyonnaise des Eaux...... 7,842,830
101,454 Vivendi...................... 7,837,532
------------
15,680,362
------------
TOTAL FRANCE................. 20,154,862
------------
GERMANY (2.9%)
Diversified Electronic Products
32,000 Siemens AG................... 2,691,881
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------
<C> <S> <C>
Electric Utilities
91,000 VEBA AG...................... $ 5,798,979
145,600 Viag AG...................... 3,100,482
------------
8,899,461
------------
Telecommunications
94,000 Deutsche Telekom AG.......... 4,162,313
------------
Wireless Communications
48,000 Mannesmann AG................ 7,365,473
------------
TOTAL GERMANY................ 23,119,128
------------
ITALY (1.5%)
Telecommunications
644,000 Telecom Italia SpA........... 6,485,920
21,400 Telecom Italia SpA (ADR)..... 2,161,400
------------
8,647,320
------------
Wireless Communications
580,000 Telecom Italia Mobile SpA.... 3,377,321
------------
TOTAL ITALY.................. 12,024,641
------------
JAPAN (1.6%)
Telecommunications
550 Nippon Telegraph & Telephone
Corp. ...................... 6,170,756
------------
Wireless Communications
410 NTT Mobile Communication
Network, Inc. .............. 6,806,531
------------
TOTAL JAPAN.................. 12,977,287
------------
MEXICO (1.4%)
Telecommunications
105,000 Telefonos de Mexico S.A.
(Series L) (ADR)............ 7,809,375
------------
Wireless Communications
276,000 Nuevo Grupo Iusacell S.A.
(Series V) (ADR)*........... 3,105,000
------------
TOTAL MEXICO ................ 10,914,375
------------
NETHERLANDS (1.4%)
Air Freight/Delivery Services
147,000 TNT Post Group NV............ 3,627,413
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS August 31, 1999 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------
<C> <S> <C>
Telecommunications
157,000 Koninklijke KPN NV........... $ 7,034,906
------------
TOTAL NETHERLANDS............ 10,662,319
------------
NEW ZEALAND (1.3%)
Telecommunications
2,265,000 Telecom Corporation of New
Zealand Ltd. ............... 10,146,722
------------
PORTUGAL (0.7%)
Telecommunications
60,500 Portugal Telecom S.A.
(Registered Shares)......... 2,531,242
------------
Wireless Communications
25,000 Telecel-Comunicacoes Pessoais
S.A......................... 3,228,524
------------
TOTAL PORTUGAL............... 5,759,766
------------
SOUTH KOREA (0.8%)
Telecommunications
183,000 Korea Telecom Corp. (ADR)*... 5,947,500
------------
SPAIN (2.1%)
Electric Utilities
370,000 Empresa Nacional de
Electricidad S.A............ 7,429,304
330,000 Iberdrola S.A................ 4,742,918
------------
12,172,222
------------
Telecommunications
270,000 Telefonica S.A.*............. 4,308,574
------------
TOTAL SPAIN.................. 16,480,796
------------
SWEDEN (0.9%)
Telecommunications Equipment
30,000 Ericsson (L.M.)
Telefonaktiebolaqet (Class
B) (ADR).................... 975,000
181,000 Ericsson (L.M.) Telephone Co.
AB (Series "B" Free)........ 5,836,374
------------
TOTAL SWEDEN................. 6,811,374
------------
SWITZERLAND (1.0%)
Electrical Products
38,904 ABB Ltd. .................... 3,968,224
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------
<C> <S> <C>
Telecommunications
12,000 Swisscom AG - Reg............ $ 3,957,219
------------
TOTAL SWITZERLAND............ 7,925,443
------------
UNITED KINGDOM (5.7%)
Electric Utilities
589,000 Independent Energy Holdings
PLC (ADR)*.................. 7,877,875
505,000 Scottish and Southern Energy
PLC......................... 4,628,674
304,810 United Utilities PLC......... 3,613,340
------------
16,119,889
------------
Telecommunications
75,000 COLT Telecom Group PLC
(ADR)*...................... 6,525,000
290,000 Energis PLC*................. 7,420,198
------------
13,945,198
------------
Wireless Communications
440,000 Orange PLC*.................. 7,408,961
38,000 Vodafone AirTouch PLC
(ADR)....................... 7,621,375
------------
15,030,336
------------
TOTAL UNITED KINGDOM......... 45,095,423
------------
UNITED STATES (58.0%)
Cable Television
129,800 AT&T Corp. - Liberty Media
Group (Class A)*............ 4,153,600
61,600 Comcast Corp. (Class A
Special)*................... 2,005,850
93,200 Cox Communications, Inc.
(Class A)*.................. 3,465,875
159,000 MediaOne Group, Inc.*........ 10,454,250
------------
20,079,575
------------
Computer Communications
105,000 Cisco Systems, Inc.*......... 7,113,750
------------
Diversified Commercial Services
232,600 Convergys Corp.*............. 4,797,375
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS August 31, 1999 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------
<C> <S> <C>
Electric Utilities
231,600 AES Corp. (The)*............. $ 14,055,225
210,000 Allegheny Energy, Inc. ...... 7,087,500
56,000 Calpine Corp.*............... 5,075,000
210,000 Cinergy Corp. ............... 6,378,750
285,000 CMS Energy Corp. ............ 11,275,312
210,000 Consolidated Edison, Inc. ... 9,240,000
191,900 Dominion Resources, Inc. .... 8,875,375
330,000 DPL, Inc. ................... 6,249,375
217,000 DQE, Inc. ................... 8,395,187
220,000 DTE Energy Co. .............. 8,676,250
170,000 Duke Energy Corp. ........... 9,775,000
365,000 Edison International......... 9,261,875
265,000 Energy East Corp. ........... 6,625,000
190,000 FPL Group, Inc. ............. 10,260,000
243,000 GPU, Inc. ................... 8,292,375
250,000 Illinova Corp. .............. 7,968,750
200,000 Montana Power Co. ........... 6,187,500
290,000 Northern States Power Co. ... 6,833,125
120,000 PG & E Corp. ................ 3,637,500
265,000 Reliant Energy, Inc. ........ 7,337,187
350,000 Southern Co. ................ 9,471,875
200,000 Texas Utilities Co. ......... 8,087,500
155,000 USEC Inc. ................... 1,675,937
245,000 Utilicorp United, Inc. ...... 5,680,938
------------
186,402,536
------------
Energy
190,000 Columbia Energy Group........ 11,221,875
400,000 ENRON Corp. ................. 16,750,000
220,000 KeySpan Corp. ............... 6,490,000
------------
34,461,875
------------
Media Conglomerates
73,600 Time Warner Inc. ............ 4,365,400
------------
Military/Gov't/Technical
110,000 General Motors Corp. (Class
H)*......................... 5,665,000
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------
<C> <S> <C>
Telecommunications
107,420 ALLTEL Corp. ................ $ 7,264,278
200,000 Ameritech Corp. ............. 12,625,000
306,000 AT&T Corp. .................. 13,770,000
252,000 Bell Atlantic Corp. ......... 15,435,000
435,000 BellSouth Corp. ............. 19,683,750
284,900 Cincinnati Bell, Inc. ....... 5,270,650
58,000 Frontier Corp. .............. 2,432,375
195,000 Global Crossing Ltd.
(Bermuda)*.................. 5,045,625
200,000 Global Telesystems Group,
Inc.*....................... 6,462,500
205,000 GTE Corp. ................... 14,068,125
217,000 MCI WorldCom, Inc.*.......... 16,424,188
285,000 Qwest Communications
International, Inc.*........ 8,175,938
288,000 SBC Communications, Inc. .... 13,824,000
318,000 Sprint Corp. (FON Group)..... 14,111,250
182,977 U.S. West, Inc. ............. 9,560,548
------------
164,153,227
------------
Telecommunications Equipment
84,700 American Tower Corp. (Class
A)*......................... 1,926,925
115,000 Lucent Technologies, Inc. ... 7,367,188
47,800 Motorola, Inc. .............. 4,409,550
------------
13,703,663
------------
Water Supply
160,000 Azurix Corp.*................ 2,970,000
------------
Wireless Communications
110,000 Sprint Corp. (PCS Group)*.... 6,572,500
125,500 WinStar Communications,
Inc.*....................... 6,376,969
------------
12,949,469
------------
TOTAL UNITED STATES.......... 456,661,870
------------
TOTAL COMMON STOCKS
(Identified Cost
$532,088,794)............... 699,569,268
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS August 31, 1999 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (9.9%)
U.S. GOVERNMENT AGENCIES
$ 48,200 Federal Home Loan Mortgage
Corp. 5.42% due 09/01/99.... $ 48,200,000
30,000 Federal National Mortgage
Assoc. 5.02% due 09/02/99... 29,995,817
------------
TOTAL SHORT TERM INVESTMENTS
(Amortized Cost $78,195,817).. 78,195,817
------------
TOTAL INVESTMENTS
(Identified Cost $610,284,611) (b)..98.8% 777,765,085
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES............... 1.2 9,590,616
---- ------------
NET ASSETS....................... 100.0% $787,355,701
====== ============
</TABLE>
- ---------------------
<TABLE>
<C> <S>
ADR American Depository Receipt.
* Non-income producing security.
(a) Securities were purchased on a discount basis.
The interest rates shown have been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax
purposes approximates identified cost. The
aggregate gross unrealized appreciation is
$184,310,822 and the aggregate gross unrealized
depreciation is $16,830,348, resulting in net
unrealized appreciation of $167,480,474.
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------
<S> <C> <C>
Air Freight/Delivery
Services.................... $ 3,627,413 0.5%
Cable Television............. 20,079,575 2.5
Computer Communications...... 7,113,750 0.9
Diversified Commercial
Services.................... 4,797,375 0.6
Diversified Electronic
Products.................... 2,691,881 0.3
Electric Utilities........... 223,594,108 28.4
Electrical Products.......... 3,968,224 0.5
Electronic Data Processing... 1,500,000 0.2
Energy....................... 53,513,597 6.8
Media Conglomerates.......... 4,365,400 0.6
Military/Gov't/Technical..... 5,665,000 0.7
Telecommunications........... 263,532,308 33.5
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------
<S> <C> <C>
Telecommunications
Equipment................... 34,607,621 4.4
U.S. Government Agencies..... 78,195,817 9.9
Water Supply................. 18,650,362 2.4
Wireless Communications...... 51,862,654 6.6
----------- ----
$777,765,085 98.8%
=========== ====
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- --------------------------------------------------------
<S> <C> <C>
Common Stocks................ $699,569,268 88.9%
Short-Term Investment........ 78,195,817 9.9
----------- ----
$777,765,085 98.8%
=========== ====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1999 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $610,284,611)............................. $777,765,085
Cash........................................................ 96,307
Receivable for:
Investments sold........................................ 10,859,680
Dividends............................................... 1,266,842
Shares of beneficial interest sold...................... 788,538
Foreign withholding taxes reclaimed..................... 312,832
Prepaid expenses and other assets........................... 140,786
------------
TOTAL ASSETS............................................ 791,230,070
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased............... 2,640,615
Plan of distribution fee................................ 679,549
Investment management fee............................... 449,936
Accrued expenses and other payables......................... 104,269
------------
TOTAL LIABILITIES....................................... 3,874,369
------------
NET ASSETS.............................................. $787,355,701
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $536,388,524
Net unrealized appreciation................................. 167,476,113
Accumulated undistributed net investment income............. 1,724,952
Accumulated undistributed net realized gain................. 81,766,112
------------
NET ASSETS.............................................. $787,355,701
============
CLASS A SHARES:
Net Assets.................................................. $8,806,411
Shares Outstanding (unlimited authorized, $.01 par value)... 509,111
NET ASSET VALUE PER SHARE............................... $17.30
============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value)........ $18.26
============
CLASS B SHARES:
Net Assets.................................................. $770,521,029
Shares Outstanding (unlimited authorized, $.01 par value)... 44,583,966
NET ASSET VALUE PER SHARE............................... $17.28
============
CLASS C SHARES:
Net Assets.................................................. $7,900,628
Shares Outstanding (unlimited authorized, $.01 par value)... 459,380
NET ASSET VALUE PER SHARE............................... $17.20
============
CLASS D SHARES:
Net Assets.................................................. $127,633
Shares Outstanding (unlimited authorized, $.01 par value)... 7,370
NET ASSET VALUE PER SHARE............................... $17.32
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended August 31, 1999 (unaudited)
NET INVESTMENT INCOME:
INCOME
Dividends (net of $400,988 foreign withholding tax)......... $ 6,661,600
Interest.................................................... 1,751,872
------------
TOTAL INCOME............................................ 8,413,472
------------
EXPENSES
Plan of distribution fee (Class A shares)................... 8,253
Plan of distribution fee (Class B shares)................... 3,026,407
Plan of distribution fee (Class C shares)................... 27,683
Investment management fee................................... 2,159,517
Transfer agent fees and expenses............................ 299,776
Custodian fees.............................................. 58,272
Registration fees........................................... 57,664
Shareholder reports and notices............................. 42,786
Professional fees........................................... 38,274
Organizational expenses..................................... 11,988
Trustees' fees and expenses................................. 6,158
Other....................................................... 5,119
------------
TOTAL EXPENSES.......................................... 5,741,897
------------
NET INVESTMENT INCOME................................... 2,671,575
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. 81,789,812
Foreign exchange transactions........................... (10,607)
------------
NET GAIN................................................ 81,779,205
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................. (72,867,782)
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................. 196
------------
NET DEPRECIATION........................................ (72,867,586)
------------
NET GAIN................................................ 8,911,619
------------
NET INCREASE................................................ $ 11,583,194
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX
MONTHS ENDED FOR THE YEAR
AUGUST 31, ENDED
1999 FEBRUARY 28, 1999
- ---------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................ $ 2,671,575 $ 3,246,437
Net realized gain.................................... 81,779,205 77,667,622
Net change in unrealized appreciation................ (72,867,586) 30,477,011
------------ ------------
NET INCREASE..................................... 11,583,194 111,391,070
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares................................... (28,058) (29,255)
Class B shares................................... (1,281,892) (2,974,816)
Class C shares................................... (12,062) (9,401)
Class D shares................................... (930) (828)
Net realized gain
Class A shares................................... (137,468) (318,524)
Class B shares................................... (14,411,310) (54,115,225)
Class C shares................................... (139,972) (216,058)
Class D shares................................... (3,797) (9,518)
------------ ------------
TOTAL DIVIDENDS AND DISTRIBUTIONS................ (16,015,489) (57,673,625)
------------ ------------
Net increase from transactions in shares of
beneficial interest................................. 242,573,174 97,890,757
------------ ------------
NET INCREASE..................................... 238,140,879 151,608,202
NET ASSETS:
Beginning of period.................................. 549,214,822 397,606,620
------------ ------------
END OF PERIOD
(Including undistributed net investment income of
$1,724,952 and $376,319, respectively)........... $787,355,701 $549,214,822
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Global Utilities Fund (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 seek both capital appreciation and current income. The Fund
seeks to achieve its objective by investing in equity and fixed income
securities of issuers worldwide, which are primarily engaged in the utilities
industry. The Fund was organized as a Massachusetts business trust on October
22, 1993 and commenced operations on May 31, 1994. 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 security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager"), that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of the
Trustees; (4) certain portfolio securities may be valued by an outside pricing
service approved by the Trustees. The pricing service may utilize a matrix
system incorporating security quality, maturity and coupon as the evaluation
model
11
<PAGE> 12
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited) continued
parameters, and/or research and evaluations by its staff, including review of
broker-dealer market price quotations, if available, in determining what it
believes is the fair valuation of the securities valued by such pricing service;
and (5) short-term debt securities having a maturity date of more than sixty
days at time of purchase are valued on a mark-to-market basis until sixty days
prior to maturity and thereafter at amortized cost based on their value on the
61st day. Short-term debt securities having a maturity date of sixty days or
less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Discounts are accreted over the
life of the respective securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized foreign currency gain or loss and in the Statement of
Assets and Liabilities as part of the related foreign currency denominated asset
or liability. The Fund records realized gains or losses on delivery of the
currency or at the time
12
<PAGE> 13
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited) continued
the forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
H. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of approximately $174,000 which have been
reimbursed for the full amount thereof. Such expenses have been deferred and are
being amortized on the straight-line method over a period not to exceed five
years from the commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day; 0.65% to the portion of the daily net assets not exceeding
$500 million and 0.625% to the portion of the daily net assets exceeding $500
million. Effective May 1, 1999, the Agreement was amended to reduce the annual
rate to 0.60% of the portion of daily net assets in excess of $1 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office
13
<PAGE> 14
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited) continued
space, facilities, equipment, clerical, bookkeeping and certain legal services
and pays the salaries of all personnel, including officers of the Fund who are
employees of the Investment Manager. The Investment Manager also bears the cost
of telephone services, heat, light, power and other utilities provided to the
Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by 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 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 A shares, amounts paid under the Plan
are paid to the Distributor for services provided. In the case of Class B and
Class C shares, amounts paid under the Plan are paid to the Distributor for (1)
services provided and the expenses borne by it and others in the distribution of
the shares of these Classes, including the payment of commissions for sales of
these Classes and incentive compensation to, and expenses of, Morgan Stanley
Dean Witter Financial Advisors and others who engage in or support distribution
of the shares or who service shareholder accounts, including overhead and
telephone expenses; (2) printing and distribution of prospectuses and reports
used in connection with the offering of these shares to other than current
shareholders; and (3) preparation, printing and distribution of sales literature
and advertising materials. In addition, the Distributor may utilize fees paid
pursuant to the Plan, in the case of Class B shares, to compensate Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and Distributor,
and other selected broker-dealers for their opportunity costs in advancing such
amounts, which compensation would be in the form of a carrying charge on any
unreimbursed expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay
14
<PAGE> 15
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited) continued
expenses incurred in excess of payments made to the Distributor under the Plan
and the proceeds of contingent deferred sales charges paid by investors upon
redemption of shares, if for any reason the Plan is terminated, the Trustees
will consider at that time the manner in which to treat such expenses. The
Distributor has advised the Fund that such excess amounts, including carrying
charges, totaled $19,495,932 at August 31, 1999.
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 August 31, 1999 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 August 31,
1999, it received contingent deferred sales charges from certain redemptions of
the Fund's Class A shares, Class B shares and Class C shares of $2,152, $331,817
and $2,722, respectively and received $23,689 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 August 31, 1999 aggregated
$197,582,237 and $145,631,065, respectively.
For the six months ended August 31, 1999, the Fund incurred brokerage
commissions of $3,573 with DWR for portfolio transactions executed on behalf of
the Fund.
For the six months ended August 31, 1999, the fund incurred brokerage
commissions of $38,603 with Morgan Stanley & Co. Inc., an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund. Included at August 31, 1999, in the receivable for
investments sold was $1,026,716 for unsettled trades with Morgan Stanley & Co.,
Inc.
15
<PAGE> 16
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited) continued
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At August 31, 1999, the Fund had
transfer agent fees and expenses payable of approximately $1,000.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
AUGUST 31, 1999 FEBRUARY 28, 1999
-------------------------- ---------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold....................................................... 104,751 $ 1,873,370 240,816 $ 4,119,117
Reinvestment of dividends and distributions................ 8,406 151,127 19,668 331,877
Acquisition of TCW/DW Global Telecom Trust................. 179,364 3,214,533 -- --
Redeemed................................................... (68,511) (1,228,844) (38,156) (655,888)
---------- ------------- ----------- -------------
Net increase - Class A..................................... 224,010 4,010,186 222,328 3,795,106
---------- ------------- ----------- -------------
CLASS B SHARES
Sold....................................................... 6,522,540 116,579,612 12,373,472 211,867,538
Reinvestment of dividends and distributions................ 778,335 14,033,225 3,000,176 50,663,889
Acquisition of TCW/DW Global Telecom Trust................. 12,225,911 219,153,286 -- --
Redeemed................................................... (6,477,560) (115,882,917) (10,108,495) (171,762,641)
---------- ------------- ----------- -------------
Net increase - Class B..................................... 13,049,226 233,883,206 5,265,153 90,768,786
---------- ------------- ----------- -------------
CLASS C SHARES
Sold....................................................... 227,971 4,073,570 203,868 3,508,714
Reinvestment of dividends and distributions................ 7,908 142,018 12,557 211,323
Acquisition of TCW/DW Global Telecom Trust................. 76,323 1,361,239 -- --
Redeemed................................................... (51,031) (906,643) (28,900) (493,816)
---------- ------------- ----------- -------------
Net increase - Class C..................................... 261,171 4,670,184 187,525 3,226,221
---------- ------------- ----------- -------------
CLASS D SHARES
Sold....................................................... 2,946 52,711 5,348 91,912
Reinvestment of dividends and distributions................ 257 4,621 523 8,837
Redeemed................................................... (2,651) (47,734) (6) (105)
---------- ------------- ----------- -------------
Net increase - Class D..................................... 552 9,598 5,865 100,644
---------- ------------- ----------- -------------
Net increase in Fund....................................... 13,534,959 $ 242,573,174 5,680,871 $ 97,890,757
========== ============= =========== =============
</TABLE>
6. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $19,000 during fiscal 1999. As of
16
<PAGE> 17
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1999 (unaudited) continued
February 28, 1999, the Fund had temporary book/tax differences primarily
attributable to post-October losses.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At August 31, 1999, there were no outstanding forward contracts.
8. ACQUISITION OF TCW/DW GLOBAL TELECOM TRUST
On June 28, 1999, the Fund acquired all the net assets of TCW/DW Global Telecom
Trust ("Global") based on the respective valuations as of the close of business
on June 25, 1999, pursuant to a plan of reorganization approved by the
shareholders of Global on June 8, 1999. The acquisition was accomplished by a
tax-free exchange of 179,364 Class A shares of the Fund at a net asset value of
$17.92 per share for 216,883 Class A shares of Global; 12,225,911 Class B shares
of the Fund at a net asset value of $17.93 per share for 15,004,147 Class B
shares of Global; and 76,323 Class C shares of the Fund at a net asset value of
$17.84 per share for 93,581 Class C shares of Global. The net assets of the Fund
and Global immediately before the acquisition were $603,906,296 and
$223,729,058, respectively, including unrealized appreciation of $55,835,844 for
Global. Immediately after the acquisition, the combined net assets of the Fund
amounted to $827,635,354.
17
<PAGE> 18
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
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 JULY 28, 1997*
MONTHS ENDED ENDED THROUGH
AUGUST 31, 1999 FEBRUARY 28, 1999 FEBRUARY 28, 1998
- ---------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $17.16 $15.10 $13.77
------ ------ ------
Income from investment operations:
Net investment income...................................... 0.13 0.21 0.07
Net realized and unrealized gain........................... 0.56 4.02 1.76
------ ------ ------
Total income from investment operations..................... 0.69 4.23 1.83
------ ------ ------
Less dividends and distributions from:
Net investment income...................................... (0.10) (0.21) (0.07)
Net realized gain.......................................... (0.45) (1.96) (0.43)
------ ------ ------
Total dividends and distributions........................... (0.55) (2.17) (0.50)
------ ------ ------
Net asset value, end of period.............................. $17.30 $17.16 $15.10
====== ====== ======
TOTAL RETURN+............................................... 3.86%(1) 28.37% 13.74%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.05%(2)(3) 1.10%(3) 1.18%(2)
Net investment income....................................... 1.45%(2)(3) 1.30%(3) 0.88%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $8,806 $4,892 $948
Portfolio turnover rate..................................... 24%(1) 40% 14%
</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
18
<PAGE> 19
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR ENDED FEBRUARY 28, MAY 31, 1994*
MONTHS ENDED -------------------------------------------------- THROUGH
AUGUST 31, 1999++ 1999++ 1998++++ 1997 1996** FEBRUARY 28, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period........................ $17.15 $15.09 $12.66 $11.33 $9.80 $10.00
------ ------ ------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income......... 0.07 0.12 0.15 0.10 0.18 0.13
Net realized and unrealized
gain (loss)................. 0.55 4.01 3.05 1.35 1.64 (0.21)
------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations......... 0.62 4.13 3.20 1.45 1.82 (0.08)
------ ------ ------ ------ ------ ------
Less dividends and
distributions from:
Net investment income......... (0.04) (0.11) (0.15) (0.12) (0.16) (0.12)
Net realized gain............. (0.45) (1.96) (0.62) -- (0.13) --
------ ------ ------ ------ ------ ------
Total dividends and
distributions................. (0.49) (2.07) (0.77) (0.12) (0.29) (0.12)
------ ------ ------ ------ ------ ------
Net asset value, end of
period........................ $17.28 $17.15 $15.09 $12.66 $11.33 $9.80
====== ====== ====== ====== ====== ======
TOTAL RETURN+.................. 3.48%(1) 27.60% 26.06% 12.91% 18.76% (0.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses....................... 1.72%(2)(3) 1.71%(3) 1.80% 1.82% 1.87% 1.97%(2)
Net investment income.......... 0.78%(2)(3) 0.69%(3) 1.08% 0.85% 1.66% 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands..................... $770,521 $540,820 $396,483 $352,240 $360,347 $337,600
Portfolio turnover rate........ 24%(1) 40% 14% 10% 16% 2%(1)
</TABLE>
- ---------------------
* Commencement of operations.
** Year ended February 29.
++ Prior to July 28, 1997, the Fund issued one class of shares. All shares
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
19
<PAGE> 20
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED THROUGH
AUGUST 31, 1999 FEBRUARY 28, 1999 FEBRUARY 28, 1998
- ---------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $17.08 $15.07 $13.77
------ ------ ------
Income from investment operations:
Net investment income...................................... 0.06 0.07 0.01
Net realized and unrealized gain........................... 0.55 4.02 1.76
------ ------ ------
Total income from investment operations..................... 0.61 4.09 1.77
------ ------ ------
Less dividends and distributions from:
Net investment income...................................... (0.04) (0.12) (0.04)
Net realized gain.......................................... (0.45) (1.96) (0.43)
------ ------ ------
Total dividends and distributions........................... (0.49) (2.08) (0.47)
------ ------ ------
Net asset value, end of period.............................. $17.20 $17.08 $15.07
====== ====== ======
TOTAL RETURN+............................................... 3.46%(1) 27.36% 13.24%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.80%(2)(3) 1.85%(3) 1.93%(2)
Net investment income....................................... 0.70%(2)(3) 0.55%(3) 0.06%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $7,901 $3,386 $161
Portfolio turnover rate..................................... 24%(1) 40% 14%
</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
20
<PAGE> 21
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED THROUGH
AUGUST 31, 1999 FEBRUARY 28, 1999 FEBRUARY 28, 1998
- ---------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $17.18 $15.11 $13.77
------ ------ ------
Income from investment operations:
Net investment income...................................... 0.16 0.25 0.09
Net realized and unrealized gain........................... 0.55 4.03 1.76
------ ------ ------
Total income from investment operations..................... 0.71 4.28 1.85
------ ------ ------
Less dividends and distributions from:
Net investment income...................................... (0.12) (0.25) (0.08)
Net realized gain.......................................... (0.45) (1.96) (0.43)
------ ------ ------
Total dividends and distributions........................... (0.57) (2.21) (0.51)
------ ------ ------
Net asset value, end of period.............................. $17.32 $17.18 $15.11
====== ====== ======
TOTAL RETURN+............................................... 3.98%(1) 28.70% 13.90%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 0.80%(2)(3) 0.85%(3) 0.92%(2)
Net investment income....................................... 1.70%(2)(3) 1.55%(3) 1.04%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $128 $117 $14
Portfolio turnover rate..................................... 24%(1) 40% 14%
</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
21
<PAGE> 22
(This Page Intentionally Left Blank)
<PAGE> 23
(This Page Intentionally Left Blank)
<PAGE> 24
TRUSTEES
- ----------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
- ----------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
James F. Willison
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
- ----------------------------------
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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
Trust 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
GLOBAL UTILITIES
FUND
Semiannual Report
August 31, 1999
