<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES TWO WORLD TRADE CENTER,
FUND NEW YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1999
DEAR SHAREHOLDER:
Morgan Stanley Dean Witter Global Utilities Fund's most recent fiscal year began
with positive news surrounding the then-anticipated adoption of the new European
single currency, the euro. In turn, European utilities posted strong showings
across the board. In addition, telecommunications stocks in many regions of the
world advanced as the sector experienced strong growth, new company alliances
and increased acquisition activity. By late summer, however, investor concerns
that emerging-market difficulties would spread to developed markets around the
world, including the United States, caused markets to weaken.
During this latter period, technology stocks, which had previously performed
well, were particularly hard hit. In response to the challenging global credit
market conditions, the U.S. Federal Reserve and other central banks around the
world aggressively eased short-term interest rates in early fall. The global
markets, including technology stocks, subsequently rallied as investors came to
believe that emerging-market difficulties would indeed remain contained.
PERFORMANCE AND PORTFOLIO STRATEGY
For the 12-month period ended February 28, 1999, Morgan Stanley Dean Witter
Global Utilities Fund's Class B shares posted a return of 27.60 percent,
compared to returns of 11.41 percent for the Lipper Utility Fund Index (Lipper
Index) and 13.12 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 28.37 percent, 27.36 percent and 28.70 percent,
respectively. Performance of the Fund's four classes varies because of differing
expenses. The accompanying chart illustrates the performance of the Fund
compared to the Lipper and MSCI indexes.
The Fund's strong performance during this period was partly due to its emphasis
on telecommunications stocks and its heavy exposure to Europe early in the
fiscal year. In addition, the Fund's performance was further bolstered by its
limited exposure to the emerging markets.
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1999, CONTINUED
During the fiscal year, the Fund increased its investments in the United States
by eliminating any remaining emerging-markets positions. European holdings,
which were heavy at the beginning of the year, when they rose strongly, were
reduced during the more volatile period that followed. The Fund's Canadian
position was built up during the period, with it ending as the portfolio's
third-largest country allocation after the United States and the United Kingdom.
The Fund's Canadian positions benefited from an expanding economy and attractive
individual stocks such as Northern Telecom and Metronet Communications.
Among the portfolio's additions during the fiscal year were Columbia Energy,
Dominion Resources, Global Crossing, Qwest and Winstar in the United States,
Energis and Independent Energy in the United Kingdom, Deutsche Telekom in
Germany, Suez Lyonnaise des Eaux in France and Swisscom in Switzerland.
LOOKING AHEAD
At the close of the Fund's fiscal year, the world's stock markets were again
undergoing a period of uncertainty. In the United States, a strong economy
precipitated a rise in bond yields, while technology stocks, including many
telecom stocks, began once again to weaken. However, several advantages for
global utilities stocks remain in place. The telecommunications industry
continues to have strong and relatively consistent growth. At the same time, the
Fund's other utility investments, including electricity, natural gas and water,
consist of dependable companies that perform consistently in a variety of
economic environments.
We appreciate your ongoing support of Morgan Stanley Dean Witter Global
Utilities Fund and look forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
2
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES
FUND
FUND PERFORMANCE FEBRUARY 28, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GROWTH OF $10,000 CLASS B SHARES
($ In Thousands)
Fund MSCI(4) Lipper(5)
<S> <C> <C> <C>
May 31, 1994 10,000 10,000 10,000
February 28, 1995 9,913 10,135 10,308
February 29, 1996 11,773 12,602 12,546
February 28, 1997 13,293 14,357 13,988
February 28, 1998 16,757 17,888 17,640
February 28, 1999 21,182(3) 20,234 19,654
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. PERFORMANCE FOR CLASS
A, CLASS C, AND CLASS D SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B
SHARES SHOWN ABOVE DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- ----------------------------------------------------------------------------------------------------
CLASS B+ CLASS A*
- ----------------------------------------------- -----------------------------------------------
PERIOD ENDED 2/28/99 PERIOD ENDED 2/28/99
- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 27.60%(1) 22.60%(2) 1 Year 28.37%(1) 21.63%(2)
Since Inception (5/31/94) 17.36(1) 17.13(2) Since Inception (7/28/97) 26.91(1) 22.68(2)
<CAPTION>
CLASS C** CLASS D#
- ----------------------------------------------- -----------------------------------------------
PERIOD ENDED 2/28/99 PERIOD ENDED 2/28/99
- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 27.36%(1) 26.36%(2) 1 Year 28.70%(1)
Since Inception (7/28/97) 25.93(1) 25.93(2) Since Inception (7/28/97) 27.23(1)
</TABLE>
- ------------------------
(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.
(3) Closing value assuming a complete redemption on February 28, 1999.
(4) The Morgan Stanley Capital International World Total Return Index (MSCI)
measures performance for a diverse range of global stock markets including
the U.S., Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(5) The Lipper Utility Funds Index is an equally-weighted performance index of
the largest qualifying funds (based on net assets) in the Lipper Utility
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.
+ The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The
CDSC declines to 0% after six years.
* The maximum front-end sales charge for Class A is 5.25%.
** 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.
3
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (82.5%)
AUSTRALIA (1.7%)
NATURAL GAS
1,460,000 Australian Gas Light Company Ltd...................................................... $ 9,528,716
------------
CANADA (4.7%)
NATURAL GAS
49,500 Enbridge Inc.......................................................................... 2,331,652
320,000 TransCanada Pipelines Ltd............................................................. 4,394,613
------------
6,726,265
------------
TELECOMMUNICATIONS
217,644 BCT.Telus Communications, Inc......................................................... 6,050,079
150,000 Metronet Communications Corp. (Class B) (ADR)*........................................ 6,506,250
------------
12,556,329
------------
TELECOMMUNICATIONS EQUIPMENT
114,000 Northern Telecom Ltd.................................................................. 6,640,483
------------
TOTAL CANADA.......................................................................... 25,923,077
------------
DENMARK (1.2%)
TELECOMMUNICATIONS
54,000 Tele Danmark AS (B Shares)............................................................ 6,517,987
------------
FINLAND (1.5%)
TELECOMMUNICATIONS EQUIPMENT
60,000 Nokia AB (Series K)................................................................... 8,207,308
------------
FRANCE (3.4%)
TELECOMMUNICATIONS
57,000 France Telecom S.A. (ADR)............................................................. 5,204,812
------------
WATER SUPPLY
28,000 Suez Lyonnaise des Eaux............................................................... 5,617,858
31,000 Vivendi............................................................................... 8,112,003
------------
13,729,861
------------
TOTAL FRANCE.......................................................................... 18,934,673
------------
GERMANY (3.8%)
CELLULAR TELEPHONE
49,000 Mannesmann AG......................................................................... 6,602,757
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRIC UTILITIES
91,000 VEBA AG............................................................................... $ 4,872,821
5,600 Viag AG............................................................................... 3,000,510
------------
7,873,331
------------
ELECTRICAL PRODUCTS
32,000 Siemens AG............................................................................ 2,027,312
------------
TELECOMMUNICATIONS
94,000 Deutsche Telekom AG................................................................... 4,329,192
------------
TOTAL GERMANY......................................................................... 20,832,592
------------
ITALY (2.0%)
CELLULAR TELEPHONE
580,000 Telecom Italia Mobile SpA............................................................. 3,910,949
------------
TELECOMMUNICATIONS
644,000 Telecom Italia SpA.................................................................... 6,804,673
------------
TOTAL ITALY........................................................................... 10,715,622
------------
NETHERLANDS (2.4%)
AIR FREIGHT/DELIVERY SERVICES
147,000 TNT Post Group NV..................................................................... 5,045,198
------------
TELECOMMUNICATIONS
157,000 Koninklijke KPN NV.................................................................... 8,268,568
------------
TOTAL NETHERLANDS..................................................................... 13,313,766
------------
NEW ZEALAND (2.1%)
TELECOMMUNICATIONS
2,265,000 Telecom Corporation of New Zealand Ltd................................................ 11,475,192
------------
PORTUGAL (1.3%)
CELLULAR TELEPHONE
25,000 Telecel-Comunicacoes Pessoais S.A..................................................... 4,438,877
------------
TELECOMMUNICATIONS
55,000 Portugal Telecom S.A.................................................................. 2,703,321
------------
TOTAL PORTUGAL........................................................................ 7,142,198
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SPAIN (3.5%)
ELECTRIC UTILITIES
370,000 Empresa Nacional de Electricidad S.A.................................................. $ 9,841,057
330,000 Iberdrola S.A......................................................................... 5,181,215
------------
15,022,272
------------
TELECOMMUNICATIONS
90,000 Telefonica de Espana.................................................................. 4,125,139
------------
TOTAL SPAIN........................................................................... 19,147,411
------------
SWEDEN (0.9%)
TELECOMMUNICATIONS EQUIPMENT
181,000 Ericsson (L.M.) Telephone Co. AB (Series "B" Free).................................... 4,816,191
------------
SWITZERLAND (1.4%)
ELECTRICAL PRODUCTS
2,400 ABB AG - Bearer....................................................................... 2,936,744
------------
TELECOMMUNICATIONS
12,000 Swisscom AG - Reg*.................................................................... 4,753,543
------------
TOTAL SWITZERLAND..................................................................... 7,690,287
------------
UNITED KINGDOM (6.3%)
CABLE TELEVISION
100,000 Telewest PLC*......................................................................... 435,690
------------
CELLULAR TELEPHONE
307,000 Orange PLC*........................................................................... 4,442,985
384,000 Vodafone Group PLC.................................................................... 7,042,794
------------
11,485,779
------------
ELECTRIC UTILITIES
300,000 Independent Energy Holdings PLC (ADR)*................................................ 3,431,250
505,000 Scottish and Southern Energy PLC...................................................... 4,679,539
304,810 United Utilities PLC.................................................................. 3,864,456
------------
11,975,245
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
102,000 COLT Telecom Group PLC (ADR)*......................................................... $ 7,522,500
140,000 Energis PLC*.......................................................................... 3,352,567
------------
10,875,067
------------
TOTAL UNITED KINGDOM.................................................................. 34,771,781
------------
UNITED STATES (46.3%)
CABLE TELEVISION
144,000 MediaOne Group Inc.*.................................................................. 7,848,000
------------
CELLULAR TELEPHONE
80,000 Sprint Corp. (PCS Group)*............................................................. 2,560,000
------------
ELECTRIC UTILITIES
60,000 CINergy Corp.......................................................................... 1,751,250
255,000 CMS Energy Corp....................................................................... 10,550,625
195,000 Dominion Resources, Inc............................................................... 7,531,875
140,000 Duke Energy Corp...................................................................... 7,962,500
320,000 Edison International.................................................................. 8,160,000
120,000 PG&E Corp............................................................................. 3,780,000
170,000 Reliant Energy, Inc................................................................... 4,558,125
300,000 Southern Co........................................................................... 7,518,750
175,000 Texas Utilities Holdings Co........................................................... 7,426,562
155,000 USEC Inc.............................................................................. 2,199,062
------------
61,438,749
------------
NATURAL GAS
190,000 Columbia Energy Group................................................................. 9,595,000
200,000 ENRON Corp............................................................................ 13,000,000
110,000 KeySpan Energy........................................................................ 2,915,000
------------
25,510,000
------------
TELECOMMUNICATIONS
69,220 ALLTEL Corp........................................................................... 4,144,547
150,000 Ameritech Corp........................................................................ 9,806,250
165,000 AT&T Corp............................................................................. 13,550,625
187,000 Bell Atlantic Corp.................................................................... 10,740,813
340,000 BellSouth Corp........................................................................ 15,725,000
185,000 Cincinnati Bell, Inc.................................................................. 3,653,750
165,000 Convergys Corp.*...................................................................... 2,856,562
127,000 General Motors Corp. (Class H)*....................................................... 5,992,812
50,000 Global Crossing Ltd. (Bermuda)*....................................................... 2,968,750
147,000 GTE Corp.............................................................................. 9,536,625
211,000 MCI WorldCom, Inc.*................................................................... 17,407,500
199,000 Qwest Communications International, Inc.*............................................. 12,226,063
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
226,000 SBC Communications, Inc............................................................... $ 11,949,750
160,000 Sprint Corp. (FON Group).............................................................. 13,730,000
118,277 U.S. West, Inc........................................................................ 6,305,643
72,700 WinStar Communications, Inc.*......................................................... 2,280,963
------------
142,875,653
------------
TELECOMMUNICATIONS EQUIPMENT
74,000 Lucent Technologies, Inc.............................................................. 7,515,625
------------
UNREGULATED POWER GENERATION
170,000 AES Corp. (The)*...................................................................... 6,321,875
------------
TOTAL UNITED STATES................................................................... 254,069,902
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $268,575,931)........................................................ 453,086,703
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- ----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (18.4%)
U.S. GOVERNMENT AGENCIES
$ 2,500 Federal Farm Credit Bank 4.70% due 03/01/99........................................... 2,500,000
10,100 Federal Home Loan Mortgage Corp. 4.70% due 03/01/99................................... 10,100,000
3,491 Federal Home Loan Mortgage Corp. 4.75% due 03/05/99................................... 3,489,157
14,000 Federal Home Loan Mortgage Corp. 4.75% due 03/18/99................................... 13,968,597
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
$ 71,000 Federal National Mortgage Assoc. 4.76% due 03/15/99................................... $ 70,868,572
------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $100,926,326)........................................................ 100,926,326
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $369,502,257) (b)........................................................ 100.9 % 554,013,029
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS............................................ (0.9) (4,798,207)
------ -------------
NET ASSETS................................................................................ 100.0 % $ 549,214,822
------ -------------
------ -------------
</TABLE>
- ---------------------
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 $190,785,207 and the
aggregate gross unrealized depreciation is $6,274,435, resulting in net
unrealized appreciation of $184,510,772.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT FEBRUARY 28, 1999:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN DELIVERY APPRECIATION/
DELIVER EXCHANGE FOR DATE DEPRECIATION
- ----------------------------------------------------
<S> <C> <C> <C>
$ 453,805 CAD 681,071 03/01/99 ($1,957)
$ 102,809 CAD 155,210 03/02/99 164
$ 428,261 CAD 646,460 03/03/99 625
-------
Net unrealized depreciation... ($1,168)
-------
-------
</TABLE>
CURRENCY ABBREVIATION:
<TABLE>
<S> <C>
CAD Canadian Dollar.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
SUMMARY OF INVESTMENTS FEBRUARY 28, 1999
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Air Freight/Delivery Services..................................................... $ 5,045,198 0.9 %
Cable Television.................................................................. 8,283,690 1.5
Cellular Telephone................................................................ 28,998,362 5.3
Electric Utilities................................................................ 96,309,597 17.5
Electrical Products............................................................... 4,964,056 0.9
Natural Gas....................................................................... 41,764,981 7.6
Telecommunications................................................................ 220,489,476 40.1
Telecommunications Equipment...................................................... 27,179,607 5.0
U.S. Government Agencies.......................................................... 100,926,326 18.4
Unregulated Power Generation...................................................... 6,321,875 1.2
Water Supply...................................................................... 13,729,861 2.5
------------ -----
$554,013,029 100.9 %
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Common Stocks..................................................................... $453,086,703 82.5 %
Short-Term Investments............................................................ 100,926,326 18.4
------------ -----
$554,013,029 100.9 %
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $369,502,257).............................................................. $554,013,029
Cash.......................................................................................... 97,174
Receivable for:
Shares of beneficial interest sold........................................................ 1,279,573
Dividends................................................................................. 661,519
Foreign withholding taxes reclaimed....................................................... 137,175
Deferred organizational expenses.............................................................. 11,988
Prepaid expenses and other assets............................................................. 50,637
------------
TOTAL ASSETS............................................................................. 556,251,095
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 5,762,245
Shares of beneficial interest repurchased................................................. 477,374
Plan of distribution fee.................................................................. 393,155
Investment management fee................................................................. 292,104
Accrued expenses and other payables........................................................... 111,395
------------
TOTAL LIABILITIES........................................................................ 7,036,273
------------
NET ASSETS............................................................................... $549,214,822
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $349,651,194
Net unrealized appreciation................................................................... 184,507,855
Accumulated undistributed net investment income............................................... 376,319
Accumulated undistributed net realized gain................................................... 14,679,454
------------
NET ASSETS............................................................................... $549,214,822
------------
------------
CLASS A SHARES:
Net Assets.................................................................................... $4,892,129
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 285,101
NET ASSET VALUE PER SHARE................................................................ $17.16
------------
------------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $18.11
------------
------------
CLASS B SHARES:
Net Assets.................................................................................... $540,820,015
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 31,534,740
NET ASSET VALUE PER SHARE................................................................ $17.15
------------
------------
CLASS C SHARES:
Net Assets.................................................................................... $3,385,556
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 198,209
NET ASSET VALUE PER SHARE................................................................ $17.08
------------
------------
CLASS D SHARES:
Net Assets.................................................................................... $117,122
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 6,818
NET ASSET VALUE PER SHARE................................................................ $17.18
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED FEBRUARY 28, 1999
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $539,346 foreign withholding tax)........................................... $ 7,863,808
Interest...................................................................................... 3,342,081
------------
TOTAL INCOME............................................................................. 11,205,889
------------
EXPENSES
Plan of distribution fee (Class A shares)..................................................... 6,268
Plan of distribution fee (Class B shares)..................................................... 3,955,861
Plan of distribution fee (Class C shares)..................................................... 12,179
Investment management fee..................................................................... 3,029,554
Transfer agent fees and expenses.............................................................. 507,783
Custodian fees................................................................................ 127,529
Registration fees............................................................................. 92,001
Shareholder reports and notices............................................................... 81,407
Professional fees............................................................................. 78,816
Organizational expenses....................................................................... 34,018
Trustees' fees and expenses................................................................... 13,004
Other......................................................................................... 21,032
------------
TOTAL EXPENSES........................................................................... 7,959,452
------------
NET INVESTMENT INCOME.................................................................... 3,246,437
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on:
Investments............................................................................... 77,668,008
Foreign exchange transactions............................................................. (386)
------------
NET GAIN................................................................................. 77,667,622
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... 30,470,050
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies....................................................... 6,961
------------
NET APPRECIATION......................................................................... 30,477,011
------------
NET GAIN................................................................................. 108,144,633
------------
NET INCREASE.................................................................................. $111,391,070
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 1999 FEBRUARY 28, 1998*
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................ $ 3,246,437 $ 3,919,171
Net realized gain.................................................... 77,667,622 2,910,628
Net change in unrealized appreciation................................ 30,477,011 78,610,298
----------------- ------------------
NET INCREASE.................................................... 111,391,070 85,440,097
----------------- ------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares................................................... (29,255 ) (3,553 )
Class B shares................................................... (2,974,816 ) (3,902,063 )
Class C shares................................................... (9,401 ) (280 )
Class D shares................................................... (828 ) (61 )
Net realized gain
Class A shares................................................... (318,524 ) (24,201 )
Class B shares................................................... (54,115,225 ) (16,373,274 )
Class C shares................................................... (216,058 ) (4,095 )
Class D shares................................................... (9,518 ) (315 )
----------------- ------------------
TOTAL DIVIDENDS AND DISTRIBUTIONS............................... (57,673,625 ) (20,307,842 )
----------------- ------------------
Net increase (decrease) from transactions in shares of beneficial
interest........................................................... 97,890,757 (19,765,137 )
----------------- ------------------
NET INCREASE.................................................... 151,608,202 45,367,118
NET ASSETS:
Beginning of period.................................................. 397,606,620 352,239,502
----------------- ------------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $376,319 AND
$135,281, RESPECTIVELY).......................................... $ 549,214,822 $ 397,606,620
----------------- ------------------
----------------- ------------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Global Utilities Fund (the "Fund"), formerly Dean
Witter Global Utilities 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 commenced offering three additional classes of shares,
with the then current shares designated as Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase 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"), formerly Dean Witter InterCapital Inc., 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
11
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999, CONTINUED
by the Trustees. The pricing service may utilize a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters, and/or
research and evaluations by its staff, including review of broker-dealer market
price quotations, 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
12
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999, CONTINUED
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 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.
13
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999, CONTINUED
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services 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
14
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999, CONTINUED
distribution fees from the Fund pursuant to the Plan and contingent deferred
sales charges paid by investors upon redemption of Class B shares. Although
there is no legal obligation for the Fund to pay expenses incurred in excess of
payments made to the Distributor under the Plan and the proceeds of contingent
deferred sales charges paid by investors upon redemption of shares, if for any
reason the Plan is terminated, the Trustees will consider at that time the
manner in which to treat such expenses. The Distributor has advised the Fund
that such excess amounts, including carrying charges, totaled $10,841,679 at
February 28, 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 year ended February 28, 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 year ended February 28, 1999,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares and Class C shares of $429,662 and $1,560, respectively
and received $24,898 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 year ended February 28, 1999 aggregated
$160,187,936 and $196,331,951, respectively.
For the year ended February 28, 1999, the Fund incurred brokerage commissions of
$11,335 with DWR for portfolio transactions executed on behalf of the Fund.
For the year ended February 28, 1999, the fund incurred brokerage commissions of
$148,065 with Morgan Stanley & Co. Inc., an affiliate of the Investment Manager
and Distributor, for portfolio transactions executed on behalf of the Fund.
15
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999, CONTINUED
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At February 28, 1999, the Fund had
transfer agent fees and expenses payable of approximately $4,000.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 1999 FEBRUARY 28, 1998*
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 240,816 $ 4,119,117 64,407 $ 867,738
Reinvestment of dividends and distributions...................... 19,668 331,877 1,974 26,818
Redeemed......................................................... (38,156) (655,888) (3,608) (51,558)
----------- -------------- ----------- ------------
Net increase - Class A........................................... 222,328 3,795,106 62,773 842,998
----------- -------------- ----------- ------------
CLASS B SHARES
Sold............................................................. 12,373,472 211,867,538 5,287,804 71,906,678
Reinvestment of dividends and distributions...................... 3,000,176 50,663,889 1,337,025 18,124,561
Redeemed......................................................... (10,108,495) (171,762,641) (8,174,924) (110,798,834)
----------- -------------- ----------- ------------
Net increase (decrease) - Class B................................ 5,265,153 90,768,786 (1,550,095) (20,767,595)
----------- -------------- ----------- ------------
CLASS C SHARES
Sold............................................................. 203,868 3,508,714 10,598 145,286
Reinvestment of dividends and distributions...................... 12,557 211,323 311 4,213
Redeemed......................................................... (28,900) (493,816) (225) (3,358)
----------- -------------- ----------- ------------
Net increase - Class C........................................... 187,525 3,226,221 10,684 146,141
----------- -------------- ----------- ------------
CLASS D SHARES
Sold............................................................. 5,348 91,912 926 12,944
Reinvestment of dividends and distributions...................... 523 8,837 27 375
Redeemed......................................................... (6) (105) -- --
----------- -------------- ----------- ------------
Net increase - Class D........................................... 5,865 100,644 953 13,319
----------- -------------- ----------- ------------
Net increase (decrease) in Fund.................................. 5,680,871 $ 97,890,757 (1,475,685) $(19,765,137)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
- ---------------------
* For Class A, C and D shares, for the period July 28, 1997 (issue date)
through February 28, 1998.
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.
16
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1999, CONTINUED
As of 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 February 28, 1999, there were outstanding forward contracts to facilitate
settlement of foreign currency denominated portfolio transactions.
8. SUBSEQUENT EVENT
On February 25, 1999, the Board of Trustees of the Fund and of TCW/DW Global
Telecom Trust ("Global") approved a reorganization plan (the "Plan") whereby
Global would be merged into the Fund. The Plan is subject to the consent of the
Global shareholders. Under the terms of the Plan, the assets of Global would be
combined with the assets of the Fund and shareholders of Global would become
shareholders of the Fund, receiving shares of the corresponding class of the
Fund equal to the value of their holdings in Global.
17
<PAGE>
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
MAY 31,
1994*
FOR THE YEAR ENDED FEBRUARY 28, THROUGH
-------------------------------------------------- FEBRUARY
1999++ 1998++++ 1997 1996** 28, 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period.............................. $ 15.09 $ 12.66 $ 11.33 $ 9.80 $ 10.00
--------- --------- --------- --------- ---------
Income (loss) from investment
operations:
Net investment income............. 0.12 0.15 0.10 0.18 0.13
Net realized and unrealized gain
(loss)............................ 4.01 3.05 1.35 1.64 (0.21)
--------- --------- --------- --------- ---------
Total income (loss) from investment
operations.......................... 4.13 3.20 1.45 1.82 (0.08)
--------- --------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income............. (0.11) (0.15) (0.12) (0.16) (0.12)
Net realized gain................. (1.96) (0.62) -- (0.13) --
--------- --------- --------- --------- ---------
Total dividends and distributions.... (2.07) (0.77) (0.12) (0.29) (0.12)
--------- --------- --------- --------- ---------
Net asset value, end of period....... $ 17.15 $ 15.09 $ 12.66 $ 11.33 $ 9.80
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN+........................ 27.60% 26.06% 12.91% 18.76% (0.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses............................. 1.71%(3) 1.80% 1.82% 1.87% 1.97%(2)
Net investment income................ 0.69%(3) 1.08% 0.85% 1.66% 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands........................... $540,820 $396,483 $352,240 $360,347 $337,600
Portfolio turnover rate.............. 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
18
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE
PERIOD
JULY 28,
FOR THE YEAR 1997*
ENDED THROUGH
FEBRUARY 28, FEBRUARY 28,
1999 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period................ $ 15.10 $ 13.77
------ ------
Income from investment operations:
Net investment income............................ 0.21 0.07
Net realized and unrealized gain................. 4.02 1.76
------ ------
Total income from investment operations............. 4.23 1.83
------ ------
Less dividends and distributions from:
Net investment income............................ (0.21) (0.07)
Net realized gain................................ (1.96) (0.43)
------ ------
Total dividends and distributions................... (2.17) (0.50)
------ ------
Net asset value, end of period...................... $ 17.16 $ 15.10
------ ------
------ ------
TOTAL RETURN+....................................... 28.37% 13.74%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses............................................ 1.10%(3) 1.18%(2)
Net investment income............................... 1.30%(3) 0.88%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............. $4,892 $948
Portfolio turnover rate............................. 40% 14%
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period................ $ 15.07 $ 13.77
------ ------
Income from investment operations:
Net investment income............................ 0.07 0.01
Net realized and unrealized gain................. 4.02 1.76
------ ------
Total income from investment operations............. 4.09 1.77
------ ------
Less dividends and distributions from:
Net investment income............................ (0.12) (0.04)
Net realized gain................................ (1.96) (0.43)
------ ------
Total dividends and distributions................... (2.08) (0.47)
------ ------
Net asset value, end of period...................... $ 17.08 $ 15.07
------ ------
------ ------
TOTAL RETURN+....................................... 27.36% 13.24%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses............................................ 1.85%(3) 1.93%(2)
Net investment income............................... 0.55%(3) 0.06%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............. $3,386 $161
Portfolio turnover rate............................. 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
19
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE
PERIOD
JULY 28,
FOR THE YEAR 1997*
ENDED THROUGH
FEBRUARY 28, FEBRUARY 28,
1999 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period................ $ 15.11 $ 13.77
------ ------
Income from investment operations:
Net investment income............................ 0.25 0.09
Net realized and unrealized gain................. 4.03 1.76
------ ------
Total income from investment operations............. 4.28 1.85
------ ------
Less dividends and distributions from:
Net investment income............................ (0.25) (0.08)
Net realized gain................................ (1.96) (0.43)
------ ------
Total dividends and distributions................... (2.21) (0.51)
------ ------
Net asset value, end of period...................... $ 17.18 $ 15.11
------ ------
------ ------
TOTAL RETURN+....................................... 28.70% 13.90%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses............................................ 0.85%(3) 0.92%(2)
Net investment income............................... 1.55%(3) 1.04%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............. $117 $14
Portfolio turnover rate............................. 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
20
<PAGE>
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES
FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Morgan Stanley Dean Witter Global
Utilities Fund (the "Fund"), formerly Dean Witter Global Utilities Fund, at
February 28, 1999, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at February 28, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
MARCH 25, 1999
1999 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended February 28, 1999, the Fund paid to its
shareholders $1.95 per share from long-term capital gains. For
such period, 97.82% of the income paid qualified for the dividends
received deduction available to corporations.
21
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Edward F. Gaylor
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
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.
MORGAN STANLEY DEAN WITTER
GLOBAL UTILITIES
FUND
[GRAPHIC]
ANNUAL REPORT
FEBRUARY 28, 1999