<PAGE> 1
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND Two World Trade Center
LETTER TO THE SHAREHOLDERS August 31, 2000 New York, New York 10048
DEAR SHAREHOLDER:
During the six-month period ended August 31, 2000, many of the trends in the
global utilities arena that were established in 1999 reversed themselves.
Telecommunications stocks, which had been exceptionally strong last year, were
weak during the first six months of the fiscal year. Power stocks, which had
been weak for a number of years, were strong in the current period. The rise of
the U.S. dollar against many currencies, especially those in Europe, led
non-U.S. utilities to underperform their U.S. counterparts on a dollar-adjusted
basis.
PERFORMANCE AND PORTFOLIO
For the six-month period ended August 31, 2000, Morgan Stanley Dean Witter
Global Utilities Fund's Class B shares returned 1.42 percent, compared to a
return of 3.44 percent for the broad-based Morgan Stanley Capital International
(MSCI) World Index.(1) For the same period, the Fund's Class A, C and D shares
had total returns of 1.73 percent, 1.36 percent and 1.88 percent, respectively.
The performance of the Fund's four share classes varies because of differing
expenses. Total return figures assume the reinvestment of all distributions but
do not reflect the deduction of any applicable sales charges.
Although the Fund reduced its exposure to telecommunications stocks during the
first half of its fiscal year, the portfolio's performance was negatively
affected by its overweighting compared to the broad-based index. The Fund
increased its weighting to power investments during the period, a move that
proved beneficial, given that sector's strong performance.
---------------------
(1)The Morgan Stanley Capital International (MSCI) World Index measures
performance from a range of global stock markets including securities
representative of the market structure of 22 developed market countries diverse
in North America, Europe, and the Asia/Pacific region. The performance of the
Index is listed in U.S. dollars and assumes reinvestment of net dividends. "Net
dividends" reflects a reduction in dividends after taking into account
withholding of taxes by certain foreign countries represented in the Index. The
Index does not include any expenses, fees or charges. The Index is unmanaged
and should not be considered an investment.
<PAGE> 2
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS August 31, 2000, continued
The underperformance of non-U.S. utilities led the Fund's managers to reduce
them and redeploy the proceeds into the United States. Among the Fund's new U.S.
holdings were Emerson Electric, McLeodUSA, NRG Energy, Tycom and Public Service
Enterprise. Outside the United States, we reinitiated a position in Telefonos de
Mexico.
LOOKING AHEAD
Although the six-month period ended August 31, 2000, was very strong for power
stocks, we anticipate that in the months ahead there may be some hiatus in the
sector's momentum. Telecom stocks are trading at increasingly favorable
valuations, which should provide this group with support. Going forward, we will
continue to adjust the industry and geographic allocation of the Fund's
utilities investments as we pursue its objective.
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, 2000
AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES*
------------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/00
-------------------------
1 Year 28.00%(1) 21.28%(2)
Since Inception (7/28/97) 23.91%(1) 21.77%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+
------------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/00
-------------------------
1 Year 27.09%(1) 26.09%(2)
Since Inception (7/28/97) 22.98%(1) 22.98%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES**
------------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/00
-------------------------
1 Year 27.23%(1) 22.23%(2)
5 Years 20.50%(1) 20.31%(2)
Since Inception (5/31/94) 18.00%(1) 18.00%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES++
------------------------------------------------
<S> <C> <C>
PERIOD ENDED 8/31/00
-------------------------
1 Year 28.44%(1)
Since Inception (7/28/97) 24.25%(1)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
---------------------
<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, 2000 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (95.6%)
AUSTRALIA (1.0%)
Energy
1,655,000 Australian Gas Light
Company Ltd. ............. $ 10,019,866
--------------
BERMUDA (0.8%)
Telecommunications
255,000 Global Crossing Ltd.*...... 7,665,938
--------------
CANADA (4.1%)
Computer Processing
Hardware
600,000 Sanga International Inc.
(a)*...................... --
--------------
Energy
680,000 Enbridge Inc. ............. 15,605,649
--------------
Telecommunication Equipment
160,000 Nortel Networks Corp. ..... 13,063,553
--------------
Telecommunications
210,000 BCE Inc.................... 4,705,323
140,000 BCT. Telus Communications,
Inc. (Non -Voting)
(Class A)................. 3,716,730
163,233 BCT. Telus Communications,
Inc. (Voting)............. 4,366,771
--------------
12,788,824
--------------
TOTAL CANADA............... 41,458,026
--------------
FINLAND (0.9%)
Telecommunication Equipment
220,000 Nokia Oyj.................. 9,640,579
--------------
FRANCE (1.4%)
Engineering & Construction
70,000 Suez Lyonnaise des Eaux.... 10,369,831
--------------
Telecommunications
35,000 France Telecom S.A.
(ADR)..................... 4,035,937
--------------
TOTAL FRANCE............... 14,405,768
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
GERMANY (2.6%)
Electric Utilities
280,000 E. ON AG................... $ 13,420,512
155,000 RWE AG..................... 5,757,639
--------------
19,178,151
--------------
Electronic Equipment/
Instruments
45,000 Siemens AG................. 7,249,473
--------------
TOTAL GERMANY.............. 26,427,624
--------------
ITALY (0.5%)
Wireless Communications
580,000 Telecom Italia Mobile
SpA....................... 5,024,526
--------------
JAPAN (0.4%)
Wireless Communications
170 NTT Docomo Inc. ........... 4,489,605
--------------
MEXICO (0.9%)
Telecommunications
160,000 Telefonos de Mexico S.A.
(Series L) (ADR).......... 8,710,000
--------------
NEW ZEALAND (0.3%)
Telecommunications
1,080,000 Telecom Corporation of New
Zealand Ltd. ............. 3,001,449
--------------
PORTUGAL (1.3%)
Electric Utilities
2,300,000 Electricidade de Portugal,
S.A. ..................... 7,451,402
--------------
Telecommunications
550,000 Portugal Telecom S.A.
(Registered Shares)....... 5,721,470
--------------
TOTAL PORTUGAL............. 13,172,872
--------------
SPAIN (1.8%)
Electric Utilities
750,000 Empresa Nacional de
Electricidad S.A. ........ 14,612,115
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS August 31, 2000 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Telecommunications
190,000 Telefonica S.A.*........... $ 3,642,710
--------------
TOTAL SPAIN................ 18,254,825
--------------
SWEDEN (0.9%)
Telecommunication Equipment
460,000 Ericsson (L.M.) Telephone
Co. AB (Series "B"
Free)..................... 9,277,728
--------------
SWITZERLAND (1.3%)
Electrical Products
120,000 ABB Ltd. .................. 13,427,440
--------------
UNITED KINGDOM (3.6%)
Electric Utilities
1,900,000 Scottish Power PLC......... 14,464,747
--------------
Telecommunications
55,000 COLT Telecom Group PLC
(ADR)*.................... 7,452,500
775,000 Energis PLC*............... 7,068,875
--------------
14,521,375
--------------
Wireless Communications
190,000 Vodafone Group PLC
(ADR)..................... 7,778,125
--------------
TOTAL UNITED KINGDOM....... 36,764,247
--------------
UNITED STATES (73.8%)
Aerospace & Defense
300,000 General Motors Corp.
(Class H)*................ 9,937,500
--------------
Cable/Satellite TV
259,600 AT&T Corp. - Liberty Media
Group (Class A)*.......... 5,548,950
61,600 Comcast Corp. (Class A
Special)*................. 2,294,600
--------------
7,843,550
--------------
Computer Communications
100,000 Cisco Systems, Inc.*....... 6,850,000
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Electric Utilities
410,000 AES Corp. (The)*........... $ 26,137,500
110,000 Allegheny Energy, Inc. .... 3,946,250
285,000 Calpine Corp.*............. 28,215,000
300,000 CMS Energy Corp. .......... 7,837,500
150,000 Consolidated Edison,
Inc. ..................... 4,696,875
475,000 Constellation Energy Group,
Inc. ..................... 18,168,750
430,000 Dominion Resources,
Inc. ..................... 22,790,000
735,000 DPL, Inc. ................. 20,074,687
370,000 DQE, Inc. ................. 14,869,375
520,000 DTE Energy Co. ............ 18,070,000
320,000 Duke Energy Corp. ......... 23,940,000
555,000 Edison International....... 11,481,562
625,000 Energy East Corp. ......... 14,179,687
340,000 FPL Group, Inc. ........... 18,147,500
175,000 Montana Power Co. ......... 6,310,937
375,000 NRG Energy, Inc.*.......... 9,843,750
400,000 PECO Energy Co. ........... 19,275,000
585,000 PG & E Corp. .............. 16,928,437
445,000 Pinnacle West Capital
Corp. .................... 18,328,437
415,000 Public Service Enterprise
Group, Inc. .............. 15,043,750
640,000 Reliant Energy, Inc. ...... 23,760,000
590,000 Southern Co. .............. 17,663,125
200,000 TXU Corp. ................. 6,987,500
765,000 UtiliCorp United, Inc. .... 18,216,562
426,250 Xcel Energy, Inc. ......... 10,682,891
--------------
395,595,075
--------------
Electrical Products
150,000 Emerson Electric Co. ...... 9,928,125
--------------
Energy
295,000 Columbia Energy Group...... 20,705,313
538,200 Dynegy, Inc. (Class A)..... 24,219,000
305,000 ENRON Corp. ............... 25,886,875
500,000 KeySpan Corp. ............. 17,218,750
--------------
88,029,938
--------------
Engineering & Construction
154,000 Metromedia Fiber Network,
Inc. (Class A)*........... 6,150,375
--------------
Media Conglomerates
73,600 Time Warner Inc. .......... 6,292,800
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS August 31, 2000 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Miscellaneous Commercial
Services
280,000 Convergys Corp.*........... $ 10,955,000
--------------
Oil & Gas Pipelines
405,000 El Paso Energy Corp. ...... 23,591,250
--------------
Telecommunication Equipment
175,000 American Tower Corp.
(Class A)*................ 6,354,688
120,000 Lucent Technologies,
Inc. ..................... 5,017,500
143,400 Motorola, Inc. ............ 5,171,363
--------------
16,543,551
--------------
Telecommunications
150,000 ALLTEL Corp. .............. 7,584,375
338,925 AT&T Corp. ................ 10,676,138
445,000 BellSouth Corp. ........... 16,604,063
500,000 BroadWing Inc.*............ 13,968,750
295,000 Global Telesystems Group,
Inc.*..................... 2,544,375
115,000 Level 3 Communications,
Inc.*..................... 10,031,953
220,000 McLeodUSA, Inc.
(Class A)*................ 3,478,750
450,000 Qwest Communications
International, Inc.*...... 23,231,250
520,000 SBC Communications, Inc.... 21,710,000
190,000 Sprint Corp. (FON Group)... 6,365,000
188,000 TyCom, Ltd.*............... 7,825,500
502,100 Verizon Communications
Inc. ..................... 21,904,113
255,000 WorldCom, Inc.*............ 9,307,500
--------------
155,231,767
--------------
Wireless Communications
195,000 Sprint Corp. (PCS
Group)*................... 9,786,563
188,250 WinStar Communications,
Inc.*..................... 5,059,219
--------------
14,845,782
--------------
TOTAL UNITED STATES........ 751,794,713
--------------
TOTAL COMMON STOCKS
(Cost $713,225,481)........ 973,535,206
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
-------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (b) (4.3%)
U.S. GOVERNMENT AGENCY
$ 43,600 Federal National Mortgage
Assoc. 6.53% due 09/01/00
(Cost $43,600,000)........ $ 43,600,000
--------------
TOTAL INVESTMENTS
(Cost $756,825,481) (c) ..... 99.9% 1,017,135,206
OTHER ASSETS IN EXCESS OF
LIABILITIES................... 0.1 1,016,499
----- --------------
NET ASSETS.................... 100.0% $1,018,151,705
===== ==============
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Issuer in bankruptcy.
(b) Purchased on a discount basis. The interest rate shown has been adjusted
to reflect a money market equivalent yield.
(c) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $285,008,653 and the aggregate gross unrealized
depreciation is $24,698,928, resulting in net unrealized appreciation of
$260,309,725.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT AUGUST 31, 2000:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE DEPRECIATION
-----------------------------------------------------------
<S> <C> <C> <C>
EUR 3,331,775 $2,954,618 09/05/00 $(2,665)
EUR 4,405,757 $3,907,025 09/05/00 (3,525)
EUR 2,378,523 $2,109,275 09/05/00 (1,903)
--------
Total unrealized depreciation.....
$(8,093)
=======
</TABLE>
Currency Abbreviation:
EUR Euro.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
SUMMARY OF INVESTMENTS August 31, 2000 (unaudited)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
-------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense..................................... $ 9,937,500 1.0%
Cable/Satellite TV...................................... 7,843,550 0.8
Computer Communications................................. 6,850,000 0.7
Electric Utilities...................................... 451,301,490 44.3
Electrical Products..................................... 23,355,565 2.3
Electronic Equipment/Instruments........................ 7,249,473 0.7
Energy.................................................. 113,655,453 11.2
Engineering & Construction.............................. 16,520,206 1.6
Media Conglomerates..................................... 6,292,800 0.6
Miscellaneous Commercial Services....................... 10,955,000 1.1
Oil & Gas Pipelines..................................... 23,591,250 2.3
Telecommunication Equipment............................. 48,525,411 4.8
Telecommunications...................................... 215,319,470 21.1
U.S. Government Agency.................................. 43,600,000 4.3
Wireless Communications................................. 32,138,038 3.1
-------------- ----
$1,017,135,206 99.9%
============== ====
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
-------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................................... $ 973,535,206 95.6%
Short-Term Investment................................... 43,600,000 4.3
-------------- ----
$1,017,135,206 99.9%
============== ====
</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, 2000 (unaudited)
ASSETS:
Investments in securities, at value
(cost $756,825,481)........................................ $1,017,135,206
Cash........................................................ 88,115
Receivable for:
Investments sold........................................ 8,970,918
Dividends............................................... 2,315,044
Shares of beneficial interest sold...................... 1,398,520
Foreign withholding taxes reclaimed..................... 296,352
Prepaid expenses and other assets........................... 54,344
--------------
TOTAL ASSETS............................................ 1,030,258,499
--------------
LIABILITIES:
Payable for:
Investments purchased................................... 10,038,750
Plan of distribution fee................................ 800,544
Shares of beneficial interest repurchased............... 553,882
Investment management fee............................... 538,275
Accrued expenses and other payables......................... 175,343
--------------
TOTAL LIABILITIES....................................... 12,106,794
--------------
NET ASSETS.............................................. $1,018,151,705
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $681,701,117
Net unrealized appreciation................................. 260,281,674
Accumulated undistributed net investment income............. 4,431,734
Accumulated undistributed net realized gain................. 71,737,180
--------------
NET ASSETS.............................................. $1,018,151,705
==============
CLASS A SHARES:
Net Assets.................................................. $17,122,447
Shares Outstanding (unlimited authorized, $.01 par value)... 892,544
NET ASSET VALUE PER SHARE............................... $19.18
==============
MAXIMUM OFFERING PRICE PER SHARE
(net asset value plus 5.54% of net asset value)........ $20.24
==============
CLASS B SHARES:
Net Assets.................................................. $985,958,454
Shares Outstanding (unlimited authorized, $.01 par value)... 51,522,322
NET ASSET VALUE PER SHARE............................... $19.14
==============
CLASS C SHARES:
Net Assets.................................................. $14,823,362
Shares Outstanding (unlimited authorized, $.01 par value)... 779,372
NET ASSET VALUE PER SHARE............................... $19.02
==============
CLASS D SHARES:
Net Assets.................................................. $247,442
Shares Outstanding (unlimited authorized, $.01 par value)... 12,860
NET ASSET VALUE PER SHARE............................... $19.24
==============
</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, 2000 (unaudited)
NET INVESTMENT INCOME:
INCOME
Dividends (net of $435,495 foreign withholding tax)......... $11,075,418
Interest.................................................... 1,775,681
-----------
TOTAL INCOME............................................ 12,851,099
-----------
EXPENSES
Plan of distribution fee (Class A shares)................... 19,660
Plan of distribution fee (Class B shares)................... 4,424,932
Plan of distribution fee (Class C shares)................... 62,494
Investment management fee................................... 3,151,618
Transfer agent fees and expenses............................ 457,329
Custodian fees.............................................. 97,841
Registration fees........................................... 66,733
Shareholder reports and notices............................. 53,720
Professional fees........................................... 49,098
Trustees' fees and expenses................................. 5,802
Other....................................................... 15,560
-----------
TOTAL EXPENSES.......................................... 8,404,787
-----------
NET INVESTMENT INCOME................................... 4,446,312
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments............................................. 73,625,854
Foreign exchange transactions........................... (30,448)
-----------
NET GAIN................................................ 73,595,406
-----------
Net change in unrealized appreciation/depreciation on:
Investments............................................. (63,702,593)
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................. (2,630)
-----------
NET DEPRECIATION........................................ (63,705,223)
-----------
NET GAIN................................................ 9,890,183
-----------
NET INCREASE................................................ $14,336,495
===========
</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 FOR THE YEAR
MONTHS ENDED ENDED
AUGUST 31, 2000 FEBRUARY 29, 2000
----------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................... $ 4,446,312 $ 4,492,463
Net realized gain................................... 73,595,406 119,382,547
Net change in unrealized appreciation............... (63,705,223) 83,643,198
-------------- ------------
NET INCREASE.................................... 14,336,495 207,518,208
-------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares.................................. (48,088) (83,825)
Class B shares.................................. (1,651,153) (3,039,664)
Class C shares.................................. (18,609) (30,462)
Class D shares.................................. (595) (1,867)
Net realized gain
Class A shares.................................. (900,018) (948,759)
Class B shares.................................. (52,375,700) (80,131,375)
Class C shares.................................. (717,480) (832,287)
Class D shares.................................. (10,043) (13,662)
-------------- ------------
TOTAL DIVIDENDS AND DISTRIBUTIONS............... (55,721,686) (85,081,901)
-------------- ------------
Net increase from transactions in shares of
beneficial interest................................ 91,301,733 296,584,034
-------------- ------------
NET INCREASE.................................... 49,916,542 419,020,341
NET ASSETS:
Beginning of period................................. 968,235,163 549,214,822
-------------- ------------
END OF PERIOD
(Including undistributed net investment income
of $4,431,734 and $1,703,867, respectively)..... $1,018,151,705 $968,235,163
============== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 2000 (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 portfolio security listed or traded
on the New York or American Stock Exchange, NASDAQ, or other exchange is valued
at its latest sale price prior to the time when assets are valued; if there were
no sales that day, the security is valued at the latest bid price; (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest available bid price; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager"), that sale 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 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
11
<PAGE> 12
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 2000 (unaudited) continued
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 the forward contract is extinguished (compensated) by
entering into a closing transaction prior to delivery.
12
<PAGE> 13
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 2000 (unaudited) continued
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the 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 tax purposes are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.65% to the portion of the daily net assets not exceeding
$500 million; 0.625% to the portion of the daily net assets exceeding $500
million but not exceeding $1 billion; and 0.60% to the portion of daily net
assets in excess of $1 billion.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Class B shares
since the inception of the Fund (not including reinvestment of dividend or
capital gain distributions) less the average daily aggregate net 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.
13
<PAGE> 14
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 2000 (unaudited) continued
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$19,972,712 at August 31, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended August 31, 2000 the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the six months ended August 31,
2000, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares and Class C shares of $386,893 and $3,151,
respectively and received $46,048 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, 2000 aggregated
$200,979,457 and $144,660,214, respectively.
For the six months ended August 31, 2000, the Fund incurred brokerage
commissions of $4,899 with Dean Witter Reynolds Inc., an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund.
For the six months ended August 31, 2000, the Fund incurred brokerage
commissions of $47,519 with Morgan Stanley & Co. Inc., an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund.
14
<PAGE> 15
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 2000 (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, 2000, the Fund had
transfer agent fees and expenses payable of approximately $63,000.
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, 2000 FEBRUARY 29, 2000
-------------------------- ---------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold....................................................... 748,469 $ 14,322,788 248,936 $ 4,643,609
Reinvestment of dividends and distributions................ 46,355 868,537 51,630 952,265
Acquisition of TCW/DW Global Telecom Trust................. -- -- 179,364 3,214,533
Redeemed................................................... (567,227) (10,706,313) (100,084) (1,816,074)
---------- ------------- ----------- -------------
Net increase - Class A..................................... 227,597 4,485,012 379,846 6,994,333
---------- ------------- ----------- -------------
CLASS B SHARES
Sold....................................................... 7,097,699 138,510,208 12,053,173 222,066,989
Reinvestment of dividends and distributions................ 2,596,545 48,493,435 4,049,198 74,773,828
Acquisition of TCW/DW Global Telecom Trust................. -- -- 12,225,911 219,153,286
Redeemed................................................... (5,382,477) (105,479,513) (12,652,467) (232,053,322)
---------- ------------- ----------- -------------
Net increase - Class B..................................... 4,311,767 81,524,130 15,675,815 283,940,781
---------- ------------- ----------- -------------
CLASS C SHARES
Sold....................................................... 288,827 5,617,149 382,126 7,027,864
Reinvestment of dividends and distributions................ 38,018 705,408 45,087 828,680
Acquisition of TCW/DW Global Telecom Trust................. -- -- 76,323 1,361,239
Redeemed................................................... (57,878) (1,117,907) (191,340) (3,559,146)
---------- ------------- ----------- -------------
Net increase - Class C..................................... 268,967 5,204,650 312,196 5,658,637
---------- ------------- ----------- -------------
CLASS D SHARES
Sold....................................................... 6,675 128,691 203,662 3,579,874
Reinvestment of dividends and distributions................ 538 10,100 805 14,784
Redeemed................................................... (2,614) (50,850) (203,024) (3,604,375)
---------- ------------- ----------- -------------
Net increase (decrease) - Class D.......................... 4,599 87,941 1,443 (9,717)
---------- ------------- ----------- -------------
Net increase in Fund....................................... 4,812,930 $ 91,301,733 16,369,300 $ 296,584,034
========== ============= =========== =============
</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 $18,000 during fiscal 2000.
15
<PAGE> 16
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS August 31, 2000 (unaudited) continued
As of February 29, 2000, the Fund had temporary book/tax differences primarily
attributable to post-October losses and capital loss deferrals on wash sales.
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, 2000, there were 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.
16
<PAGE> 17
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 FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
AUGUST 31, 2000 FEBRUARY 29, 2000 FEBRUARY 28, 1999 FEBRUARY 28, 1998
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period....... $20.02 $17.16 $15.10 $13.77
------ ------ ------ ------
Income from investment operations:
Net investment income..................... 0.16 0.23 0.21 0.07
Net realized and unrealized gain.......... 0.16 4.78 4.02 1.76
------ ------ ------ ------
Total income from investment operations.... 0.32 5.01 4.23 1.83
------ ------ ------ ------
Less dividends and distributions from:
Net investment income..................... (0.07) (0.20) (0.21) (0.07)
Net realized gain......................... (1.09) (1.95) (1.96) (0.43)
------ ------ ------ ------
Total dividends and distributions.......... (1.16) (2.15) (2.17) (0.50)
------ ------ ------ ------
Net asset value, end of period............. $19.18 $20.02 $17.16 $15.10
====== ====== ====== ======
TOTAL RETURN+.............................. 1.73%(1) 30.68% 28.37% 13.74%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................... 1.04%(2)(3) 1.06%(3) 1.10%(3) 1.18%(2)
Net investment income...................... 1.56%(2)(3) 1.25%(3) 1.30%(3) 0.88%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.... $17,122 $13,313 $4,892 $948
Portfolio turnover rate.................... 16%(1) 52% 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
17
<PAGE> 18
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED FEBRUARY 28,
MONTHS ENDED ------------------------------------
AUGUST 31, 2000(++) 2000*(++) 1999(++) 1998++(++)
--------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period.............................. $20.01 $17.15 $15.09 $12.66
------ ------ ------ ------
Income from investment operations:
Net investment income............... 0.09 0.11 0.12 0.15
Net realized and unrealized gain.... 0.16 4.78 4.01 3.05
------ ------ ------ ------
Total income from investment
operations.......................... 0.25 4.89 4.13 3.20
------ ------ ------ ------
Less dividends and distributions
from:
Net investment income............... (0.03) (0.08) (0.11) (0.15)
Net realized gain................... (1.09) (1.95) (1.96) (0.62)
------ ------ ------ ------
Total dividends and distributions.... (1.12) (2.03) (2.07) (0.77)
------ ------ ------ ------
Net asset value, end of period....... $19.14 $20.01 $17.15 $15.09
====== ====== ====== ======
TOTAL RETURN+........................ 1.42%(1) 29.81% 27.60% 26.06%
RATIOS TO AVERAGE NET ASSETS:
Expenses............................. 1.71%(2)(3) 1.74%(3) 1.71%(3) 1.80%
Net investment income................ 0.89%(2)(3) 0.57%(3) 0.69%(3) 1.08%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands........................... $985,958 $944,600 $540,820 $396,483
Portfolio turnover rate.............. 16%(1) 52% 40% 14%
<CAPTION>
FOR THE YEAR ENDED FEBRUARY 28,
-------------------------------
1997 1996*
--------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period.............................. $11.33 $9.80
------ ------
Income from investment operations:
Net investment income............... 0.10 0.18
Net realized and unrealized gain.... 1.35 1.64
------ ------
Total income from investment
operations.......................... 1.45 1.82
------ ------
Less dividends and distributions
from:
Net investment income............... (0.12) (0.16)
Net realized gain................... -- (0.13)
------ ------
Total dividends and distributions.... (0.12) (0.29)
------ ------
Net asset value, end of period....... $12.66 $11.33
====== ======
TOTAL RETURN+........................ 12.91% 18.76%
RATIOS TO AVERAGE NET ASSETS:
Expenses............................. 1.82% 1.87%
Net investment income................ 0.85% 1.66%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands........................... $352,240 $360,347
Portfolio turnover rate.............. 10% 16%
</TABLE>
---------------------
* 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> 19
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
AUGUST 31, 2000 FEBRUARY 29, 2000 FEBRUARY 28, 1999 FEBRUARY 28, 1998
-------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.............. $ 19.90 $ 17.08 $ 15.07 $13.77
------- ------- ------- ------
Income from investment operations:
Net investment income............................ 0.08 0.09 0.07 0.01
Net realized and unrealized gain................. 0.16 4.76 4.02 1.76
------- ------- ------- ------
Total income from investment operations........... 0.24 4.85 4.09 1.77
------- ------- ------- ------
Less dividends and distributions from:
Net investment income............................ (0.03) (0.08) (0.12) (0.04)
Net realized gain................................ (1.09) (1.95) (1.96) (0.43)
------- ------- ------- ------
Total dividends and distributions................. (1.12) (2.03) (2.08) (0.47)
------- ------- ------- ------
Net asset value, end of period.................... $ 19.02 $ 19.90 $ 17.08 $15.07
======= ======= ======= ======
TOTAL RETURN+..................................... 1.36%(1) 29.73% 27.36% 13.24%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.......................................... 1.79%(2)(3) 1.81%(3) 1.85%(3) 1.93%(2)
Net investment income............................. 0.81%(2)(3) 0.50%(3) 0.55%(3) 0.06%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $14,823 $10,156 $3,386 $161
Portfolio turnover rate........................... 16%(1) 52% 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> 20
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
AUGUST 31, 2000 FEBRUARY 29, 2000 FEBRUARY 28, 1999 FEBRUARY 28, 1998
-------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.............. $20.06 $17.18 $15.11 $13.77
------ ------ ------ ------
Income from investment operations:
Net investment income............................ 0.18 0.32 0.25 0.09
Net realized and unrealized gain................. 0.17 4.76 4.03 1.76
------ ------ ------ ------
Total income from investment operations........... 0.35 5.08 4.28 1.85
------ ------ ------ ------
Less dividends and distributions from:
Net investment income............................ (0.08) (0.25) (0.25) (0.08)
Net realized gain................................ (1.09) (1.95) (1.96) (0.43)
------ ------ ------ ------
Total dividends and distributions................. (1.17) (2.20) (2.21) (0.51)
------ ------ ------ ------
Net asset value, end of period.................... $19.24 $20.06 $17.18 $15.11
====== ====== ====== ======
TOTAL RETURN+..................................... 1.88%(1) 31.08% 28.70% 13.90%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.......................................... 0.79%(2)(3) 0.81%(3) 0.85%(3) 0.92%(2)
Net investment income............................. 1.81%(2)(3) 1.50%(3) 1.55%(3) 1.04%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $247 $166 $117 $14
Portfolio turnover rate........................... 16%(1) 52% 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> 21
MORGAN STANLEY DEAN WITTER GLOBAL UTILITIES FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such periods.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.
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
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
----------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
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
----------------------------------
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
----------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and accordingly they
do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
MORGAN STANLEY
DEAN WITTER
GLOBAL UTILITIES
FUND
[PHOTO]
Semiannual Report
August 31, 2000
