MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERI, 485APOS, 1999-02-26

MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERI
485APOS, 1999-02-26

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1999
REGISTRATION NOS.: 33-54047
811-7185
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

------------------------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

PRE-EFFECTIVE AMENDMENT NO.

POST-EFFECTIVE AMENDMENT NO. 8 /X/

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

AMENDMENT NO. 9 /X/
------------------------

MORGAN STANLEY DEAN WITTER
SELECT DIMENSIONS INVESTMENT SERIES

(FORMERLY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES)
(A MASSACHUSETTS BUSINESS TRUST)

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600

BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPY TO:

DAVID M. BUTOWSKY, ESQ.
GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after this
Post-Effective Amendment becomes effective
------------------------

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
___ immediately upon filing pursuant to paragraph (b)
___ on (date) pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)
_X_ on April 30, 1999 pursuant to paragraph (a) of rule 485

AMENDING THE PROSPECTUS

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<PAGE>
MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES

CROSS-REFERENCE SHEET

FORM N-1A

<TABLE>
<CAPTION>
ITEM CAPTION
- ---------------------------------------------- ---------------------------------------------------------------------

<S> <C>
PART A

1. ......................................... Cover Page; Back Cover

2. ......................................... Eligible Investors/Overview

3. ......................................... Not Applicable

4. ......................................... Eligible Investors/Overview; Additional Investment Strategy
Information; Additional Risk Information

5. ......................................... Not Applicable

6. ......................................... Portfolio Management

7. ......................................... Shareholder Information

8. ......................................... Not Applicable

9. ......................................... Financial Highlights

PART B STATEMENT OF ADDITIONAL INFORMATION

Information required to be included in Part B is set forth under the appropriate caption in Part B of this
Registration Statement.

PART C

Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C of
this Registration Statement.
</TABLE>
<PAGE>
PROSPECTUS - MAY 1, 1999

Morgan Stanley Dean Witter
SELECT DIMENSIONS INVESTMENT SERIES

[COVER PHOTO]

Morgan Stanley Dean Witter Select Dimensions Investment
Series is a mutual fund comprised of thirteen separate
Portfolios, each with its own distinctive investment
objective(s) and policies. The Portfolios are:

<TABLE>
<S> <C>
The Money Market Portfolio The Value-Added Market Portfolio
The North American Government The Growth Portfolio
Securities Portfolio The American Opportunities Portfolio
The Diversified Income Portfolio The Mid-Cap Growth Portfolio
The Balanced Growth Portfolio The Global Equity Portfolio
The Utilities Portfolio The Developing Growth Portfolio
The Dividend Growth Portfolio The Emerging Markets Portfolio
</TABLE>

Shares of each Portfolio are sold exclusively to certain
life insurance companies in connection with particular life
insurance and/or annuity contracts they issue. The insurance
companies invest in shares of the Portfolios in accordance
with instructions received from owners of the applicable
life insurance or annuity policy.

This PROSPECTUS must be accompanied by a current prospectus
for the variable annuity contracts issued by Hartford Life
Insurance Company or Hartford Life and Annuity Insurance
Company.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this PROSPECTUS. Any representation
to the contrary is a criminal offense.
<PAGE>
CONTENTS

<TABLE>
<S> <C> <C>
Eligible Investors/
Overview ............................................................ 1
The Money Market Portfolio.................................. 2
The North American Government Securities Portfolio.......... 4
The Diversified Income Portfolio............................ 8
The Balanced Growth Portfolio............................... 12
The Utilities Portfolio..................................... 15
The Dividend Growth Portfolio............................... 18
The Value-Added Market Portfolio............................ 20
The Growth Portfolio........................................ 22
The American Opportunities Portfolio........................ 24
The Mid-Cap Growth Portfolio................................ 26
The Global Equity Portfolio................................. 28
The Developing Growth Portfolio............................. 31
The Emerging Markets Portfolio.............................. 33
Additional Investment
Strategy Information ............................................................ 38
Additional Risk
Information ............................................................ 40
Portfolio Management ............................................................ 43
Shareholder Information ............................................................ 46
Pricing Fund Shares......................................... 46
Distributions............................................... 46
Tax Consequences............................................ 46
Financial Highlights ............................................................ 47
</TABLE>
<PAGE>
ELIGIBLE INVESTORS/OVERVIEW

Morgan Stanley Dean Witter Select Dimensions Investment
Series is comprised of thirteen separate Portfolios, each
with its own distinct investment objective(s) and policies.
The Fund is offered exclusively to certain life insurance
companies in connection with particular life insurance
and/or annuity contracts they offer.

Shares of each Portfolio are purchased by the life insurance
companies at net asset value per share without a sales
charge in accordance with instructions received from the
owners of the applicable life insurance or annuity contract.
Currently, the Fund is offered to the following insurance
companies:

<TABLE>
<CAPTION>
INSURANCE COMPANY TYPE OF POLICY
<C> <S>
- -----------------------------------------------------------------------------
Certain flexible premium deferred variable
Hartford Life annuity contracts and flexible premium
Insurance Company variable life insurance policies
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Certain flexible premium deferred variable
Hartford Life and Annuity annuity contracts and flexible premium
Insurance Company variable life insurance policies
- -----------------------------------------------------------------------------
</TABLE>

Shares of the Portfolios are not bank deposits and are not guaranteed or insured
by any bank, governmental entity, or the FDIC.

1
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THE MONEY MARKET PORTFOLIO

ICON INVESTMENT OBJECTIVES
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The Money Market Portfolio seeks high current income,
preservation of capital and liquidity. There is no guarantee
that the Portfolio will achieve these objectives.

ICON PRINCIPAL INVESTMENT STRATEGIES
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The Portfolio invests in high quality, short-term debt
obligations. In selecting investments, the "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., seeks to
manage the Portfolio's share price to remain stable at
$1.00. A mutual fund's share price remaining stable at $1.00
means that the fund would preserve the principal value of
the shareholders' investments.

The Portfolio's investments include the following money
market instruments:

- Commercial paper.

- Corporate obligations.

- Debt obligations of U.S.-regulated banks and instruments
secured by those obligations. These investments include
certificates of deposit.

- Certificates of deposit of savings banks and savings and
loan associations.

- Debt obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or its
instrumentalities.

- Repurchase agreements, which may be viewed as a type of
secured lending by the Portfolio.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
Principal risks of investing in the Money Market Portfolio
are associated with its debt obligation investments. All
debt obligations, such as bonds, are subject to two types of
risk: credit risk and interest rate risk. Credit risk refers
to the possibility that the issuer of a security will be
unable to make interest payments and/or repay the principal
on its debt. Interest rate risk refers to fluctuations in
the value of a debt security resulting from changes in the
general level of interest rates.

The Investment Manager actively manages the Portfolio's
assets to reduce the risk of losing any principal investment
as a result of credit or interest rate risks. The
Portfolio's assets are reviewed to maintain or improve
creditworthiness. In addition, federal regulations require
money market funds to invest only in debt obligations of
high quality and short maturities.

An investment in the Portfolio is not a bank deposit and is
not insured or guaranteed by the FDIC or any other
governmental agency. Although the Portfolio seeks to
preserve the value of your investment at $1.00 per share, if
it is unable to do so, it is possible to lose money by
investing in the Portfolio.
(Sidebar)
MONEY MARKET
A mutual fund having the goal to select securities to provide current income
while seeking to maintain a stable share price of $1.00.
YIELD
The Portfolio's yield reflects the actual income the Portfolio pays to you
expressed as a percentage of the Portfolio share price. Because the Portfolio's
income from its portfolio securities will fluctuate, the income it in turn
distributes to you and the Portfolio's yield will vary.
(End Sidebar)

2
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ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Money Market Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a
calendar quarter was % (quarter ended
, 199 ). Year-to-date total return as
of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR
YEAR)
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PAST 1 YEAR LIFE OF PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------------
Money Market Portfolio % %
- -------------------------------------------------------------------------
Benchmark - [to be inserted] % %
- -------------------------------------------------------------------------
Lipper - [to be inserted] % %
- -------------------------------------------------------------------------
</TABLE>

(Sidebar)
ANNUAL TOTAL
RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

3
<PAGE>
(Sidebar)
INCOME
An investment objective having the goal of selecting securities to pay out
income rather than rise in value.
(End Sidebar)

THE NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The North American Government Securities Portfolio seeks to
earn a high level of current income while maintaining
relatively low volatility of principal. There is no
guarantee that the Portfolio will achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The North American Government Securities Portfolio will
normally invest at least 65% of its assets in investment
grade fixed-income securities issued or guaranteed by the
United States, Canadian or Mexican governments, their
agencies or instrumentalities. These securities are referred
to generally as "government securities." In the case of the
United States and Canada, a substantial portion of these
securities will be mortgage-backed securities. The Portfolio
will normally invest at least fifty percent of its assets in
U.S. government securities, and no more than twenty-five
percent each in Canadian or Mexican government securities.

The Portfolio's "Sub-Advisor," TCW Funds Management, Inc.,
will allocate Portfolio assets among the three countries
based on its analysis of market, economic and political
conditions in those countries. The Sub-Advisor will consider
various factors, such as changes in interest rates and
currency exchange rates, to attempt to take advantage of
favorable investment opportunities in each country. The Sub-
Advisor expects that, under normal circumstances, the
weighted average maturity of the Portfolio's investment
securities will be no greater than 3 years.

MORTGAGE-BACKED SECURITIES. One type of mortgage-backed
security, in which the Portfolio may invest, is a mortgage
pass-through security. These securities represent a
participation interest in a pool of residential mortgage
loans originated by governmental or private lenders such as
banks. They differ from conventional debt securities, which
provide for periodic payment of interest in fixed amounts
and principal payments at maturity or on specified call
dates. Mortgage pass-through securities provide for monthly
payments that are a "pass-through" of the monthly interest
and principal payments made by the individual borrowers on
the pooled mortgage loans.

INVERSE FLOATERS. The Portfolio may invest up to % of its
assets in inverse floaters. An inverse floater has a coupon
rate that moves in the direction opposite to that of a
designated interest rate index.

OTHER SECURITIES. The Portfolio may invest up to 35% of its
assets in securities that are not government securities.
This group of securities also will be issued by U.S.,
Canadian or Mexican issuers and may include corporate debt
securities and securities backed by other assets, such as
automobile or credit card receivables or home equity loans.
They are rated at least Aa by Moody's Investors Services or
AA by Standard & Poor's or, if not rated, determined to be
of comparable quality by the Sub-Advisor.

4
<PAGE>
ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The North American Government Securities Portfolio's share
price will fluctuate with changes in the market value of the
Portfolio's portfolio securities. When you sell Portfolio
shares, they may be worth less than what you paid for them
and, accordingly, you can lose money investing in this
Portfolio.

FIXED-INCOME SECURITIES. Principal risks of investing in the
Portfolio are associated with its fixed-income securities.
All fixed-income securities are subject to two types of
risk: credit risk and interest rate risk. Credit risk refers
to the possibility that the issuer of a security will be
unable to make interest payments and/or repay the principal
on its debt. Interest rate risk refers to fluctuations in
the value of a fixed-income security resulting from changes
in the general level of interest rates. When the general
level of interest rates goes up, the prices of most
fixed-income securities go down. When the general level of
interest rates goes down, the prices of most fixed-income
securities go up.

FOREIGN SECURITIES. The Portfolio's investments in foreign
securities (including depository receipts) involve risks in
addition to the risks associated with domestic securities.
One additional risk is currency risk. While the price of
Portfolio shares is quoted in U.S. dollars, the Portfolio
generally converts U.S. dollars to a foreign market's local
currency to purchase a security in that market. If the value
of that local currency falls relative to the U.S. dollar,
the U.S. dollar value of the foreign security will decrease.
This is true even if the foreign security's local price
remains unchanged.

Foreign securities also have risks related to economic and
political developments abroad, including expropriations,
confiscatory taxation, exchange control regulation,
limitations on the use or transfer of Portfolio assets, and
any effects of foreign social, economic or political
instability. Foreign companies, in general, are not subject
to the regulatory requirements of U.S. companies and, as
such, there may be less publicly available information about
these companies. Moreover, foreign accounting, auditing and
financial reporting standards generally are different from
those applicable to U.S. companies. Finally, in the event of
a default of any foreign debt obligations, it may be more
difficult for the Portfolio to obtain or enforce a judgment
against the issuers of the securities.

Securities of foreign issuers may be less liquid than
comparable securities of U.S. issuers and, as such, their
price changes may be more volatile. Furthermore, foreign
exchanges and broker-dealers are generally subject to less
government and exchange scrutiny and regulation than their
U.S. counterparts.

MORTGAGE-BACKED SECURITIES. Mortgage-backed securities in
which the Portfolio may invest have different risk
characteristics than traditional debt securities.
Mortgage-backed securities in which the Portfolio may invest
have different risk characteristics than traditional debt
securities. Although generally the value of fixed-income
securities increases during periods of falling interest
rates and decreases during periods of rising interest rates,
this is not always the case with mortgage-backed securities.
This is due to the fact that principal on underlying
mortgages may be prepaid at any time as well as other
factors. Generally, prepayments will increase during a
period of falling interest rates and decrease during a
period of rising interest rates. The rate of prepayments
also may be influenced by economic and other factors.
Prepayment risk includes the possibility that, as interest
rates fall,

5
<PAGE>
securities with stated interest rates may have the principal
prepaid earlier than expected, requiring the Portfolio to
invest the proceeds at generally lower interest rates.

Investments in mortgage-backed securities are made based
upon, among other things, expectations regarding the rate of
prepayments on underlying mortgage pools. Rates of
prepayment, faster or slower than expected by the
Sub-Advisor, could reduce a Portfolio's yield, increase the
volatility of the Portfolio and/or cause a decline in net
asset value. Certain mortgage-backed securities in which a
Portfolio may invest may be more volatile and less liquid
than other traditional types of debt securities. The
Portfolio may be subject to a risk referred to as "extension
risk," which is the possibility that rising interest rates
may cause owners of the underlying mortgages to pay off
their mortgages at a slower than expected rate. This risk
may effectively change a security that was short or
intermediate term into a long term security. Long term
securities generally drop in value more dramatically when
the general level of interest rates goes up.

INVERSE FLOATERS. Like most other fixed-income securities,
the value of inverse floaters will decrease as interest
rates increase. They are more volatile, however, than most
other fixed-income securities because the coupon rate on an
inverse floater typically changes at a multiple of the
change in the relevant index rate. Thus, any rise in the
index rate (as a consequence of an increase in interest
rates) causes a correspondingly greater drop in the coupon
rate of an inverse floater while a drop in the index rate
causes a correspondingly greater increase in the coupon of
an inverse floater. Some inverse floaters may also increase
or decrease substantially because of changes in the rate of
prepayments.

CANADIAN AND MEXICAN SECURITIES. The Canadian debt
securities market is significantly smaller than the U.S.
debt securities market. In particular, the Canadian
mortgage-backed securities market is of recent origin, and,
although continued growth is anticipated, is less well
developed and less liquid than its U.S. counterpart.

Because the Portfolio intends to invest in Mexican debt
instruments, investors in the Portfolio should be aware of
certain special considerations associated with investing in
debt obligations of the Mexican government.

The Mexican government has exercised and continues to
exercise a significant influence over many aspects of the
private sector in Mexico. Mexican government actions
concerning the economy could have a significant effect on
market conditions and prices and yields of Mexican debt
obligations, including those in which the Portfolio invests.
Mexico is currently a major debtor nation (among developing
countries) to commercial banks and foreign governments.

The value of the Portfolio's investments may be affected by
changes in oil prices, interest rates, taxation and other
political or economic developments in Mexico, including
recent rates of inflation which have exceeded the rates of
inflation in the U.S. and Canada. The Portfolio can provide
no assurance that future developments in the Mexican economy
will not impair the Portfolio's investment flexibility,
operations or ability to achieve its investment objective.

OTHER RISKS. The performance of the Portfolio also will
depend on whether the Sub-Advisor is successful in pursuing
the Portfolio's investment strategy. The Portfolio is
subject to other risks from its permissible investments. For
more information about these risks, see the "Additional Risk
Information" section.

6
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the North American Government
Securities Portfolio. The Portfolio's past performance does
not indicate how it will perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -----------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------------------
North American Government Securities
Portfolio % %
- -----------------------------------------------------------------
Lehman Brothers Short (1-5) U.S.
Government Index(1) % %
- -----------------------------------------------------------------
Lipper Variable Annuity Global Income
Underlying Funds Average(2) % %
- -----------------------------------------------------------------
</TABLE>

(1) The Lehman Brothers Short (1-5) U.S. Government Index measures the
performance of all U.S. Government agency and U.S. Treasury securities with
maturities of one to five years. The Index does not include any expenses or
fees. The Index is unmanaged and should not be considered an investment.
(2) The Lipper Variable Annuity Global Income Underlying Funds Average tracks
the performance of funds that state in their prospectus that they invest
primarily in debt securities of issuers located in at least three
countries, one of which may be the United States, as reported by Lipper
Analytical Service.

7
<PAGE>
(Sidebar)
INCOME
An investment objective having the goal of selecting securities to pay out
income rather than rise in value.
(End Sidebar)

THE DIVERSIFIED INCOME PORTFOLIO

ICON INVESTMENT OBJECTIVES
- --------------------------------------------------------------------------------
The Diversified Income Portfolio seeks to provide a high
level of current income. As a secondary objective, the
Portfolio seeks to maximize total return but only to the
extent consistent with its primary objective. There is no
guarantee that the Portfolio will achieve these objectives.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Diversified Income Portfolio will normally invest at
least 65% of its assets in a diversified portfolio of
fixed-income securities. The Portfolio's "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., attempts
to equally allocate approximately one-third of the
Portfolio's assets among three separate groups or market
segments of fixed-income securities. The Investment Manager
will adjust the Portfolio's assets not less than quarterly
to reflect any changes in the relative values of the
securities in each group so that following the adjustment
the value of the investments in each group will be equal to
the extent practicable. The Investment Manager diversifies
investments among the groups in an effort to reduce overall
portfolio risk -- a general downturn in one group may be
offset by a rise in another.

The three groups of Portfolio investments include: (1)
global short-term securities; (2) mortgage-backed and U.S.
Government securities; and (3) high yield securities.

(1) GLOBAL SHORT-TERM SECURITIES. The securities in the
first group include:

- High quality fixed-income securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities
or high quality fixed-income securities issued or
guaranteed by a foreign government or supranational
organization or any of their instrumentalities or
fixed-income securities issued by a corporation, all of
which are rated in one of the two highest bond rating
categories by either Standard & Poor's ("S&P") or Moody's
Investors Service ("Moody's") or, if unrated, are
determined by the Investment Manager to be of equivalent
quality;

- Certificates of deposit and bankers' acceptances (a)
issued or guaranteed by, or time deposits maintained at,
banks and (b) rated in the two highest short-term rating
categories by either S&P, Moody's or Duff & Phelps or, if
unrated, are determined by the Investment Manager to be of
high creditworthiness; and

- Commercial paper rated in the two highest short-term
rating category by either S&P, Moody's or Duff & Phelps
or, if unrated, issued by U.S. or foreign companies having
outstanding debt securities rated A or higher by S&P or
Moody's.

- Each security in this first group will have a short-term
maturity remaining (three years or less) when the
Portfolio purchases the investment.

The Investment Manager will actively manage the Portfolio's
assets in this group in accordance with a global market
strategy. Consistent with this strategy, the Investment
Manager intends to allocate the Portfolio's investments
among securities denominated in the currencies of a number
of foreign countries and, within each such country, among
different types of debt securities.

8
<PAGE>
(2) MORTGAGE-BACKED AND U.S. GOVERNMENT SECURITIES. The
securities in the second group include:

- Fixed-rate and adjustable rate mortgage-backed securities
that are issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or by private issuers that
are rated in the highest bond rating category by Moody's
or S&P or, if not rated, are determined to be of
comparable quality by the Investment Manager;

- U.S. Treasury securities, such as bills, notes, bonds and
zero coupon securities (without restrictions as to
remaining maturity at time of purchase); and

- U.S. Government agency securities, such as discount notes,
medium-term notes, debentures and zero coupon securities
(without restrictions as to remaining maturity at time of
purchase).

MORTGAGE-BACKED SECURITIES. One type of mortgage-backed
security, in which the Portfolio may invest, is a mortgage
pass-through security. These securities represent a
participation interest in a pool of residential mortgage
loans originated by U.S. governmental or private lenders
such as banks. They differ from conventional debt
securities, which provide for periodic payment of interest
in fixed amounts and principal payments at maturity or on
specified call dates. Mortgage pass-through securities
provide for monthly payments that are a "pass-through" of
the monthly interest and principal payments made by the
individual borrowers on the pooled mortgage loans.

(3) HIGH YIELD SECURITIES. The securities in the third group
include high yield, high risk fixed-income securities rated
Baa or lower by Moody's or BBB or lower by S&P or, if not
rated, are determined by the Investment Manager to be of
comparable quality. Fixed-income securities rated Ba or
lower by Moody's or BB or lower by S&P are considered
speculative investments, commonly known as "junk bonds." The
securities in this group may include both convertible and
non-convertible debt securities and preferred stock. They
also may include "Rule 144A" securities, which are subject
to resale restrictions. The Portfolio does not have any
minimum quality rating standard for this group of
investments. Thus, the Portfolio may invest in fixed-income
securities that may already be in default on payment of
interest or principal.

OTHER SECURITIES. The Portfolio may invest up to 20% of its
assets in common stocks. The Portfolio may acquire stock,
among other ways, directly or upon exercise of warrants
attached to other securities.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Diversified Income Portfolio's share price will
fluctuate with changes in the market value of the
Portfolio's portfolio securities. When you sell Portfolio
shares, they may be worth less than what you paid for them
and, accordingly, you can lose money investing in this
Portfolio.

9
<PAGE>
The Portfolio is not limited as to the maturities of the
securities in which it may invest, except for the global
short-term securities. Thus, a rise in the general level of
interest rates may cause the prices of the Portfolio's
investment securities to fall substantially.

Many European countries have adopted or are in the process
of adopting a single European currency, referred to as the
"euro." The consequences of the euro conversion for foreign
exchange rates, interest rates and the value of European
securities the Portfolio may purchase are presently unclear.
The consequences may adversely affect the value and/or
increase the volatility of securities held by the Portfolio.

MORTGAGE-BACKED SECURITIES. Mortgage-backed securities in
which the Portfolio may invest have different risk
characteristics than traditional debt securities. Although
generally the value of fixed-income securities increases
during periods of falling interest rates and decreases
during periods of rising interest rates, this is not always
the case with mortgage-backed securities. This is due to the
fact that principal on underlying mortgages may be prepaid
at any time as well as other factors. Generally, prepayments
will increase during a period of falling interest rates and
decrease during a period of rising interest rates. The rate
of prepayments also may be influenced by economic and other
factors. Prepayment risk includes the possibility that, as
interest rates fall, securities with stated interest rates
may have the principal prepaid earlier than expected,
requiring the Portfolio to invest the proceeds at generally
lower interest rates.

10
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

HIGH YIELD SECURITIES. The Portfolio's investments in high
yield securities, commonly known as "junk bonds," pose
significant risks. See the "Additional Risk Information"
section for a description of these risks.

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Diversified Income Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar quarter
was % (quarter ended , 199 ). Year-to-date
total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR
YEAR)
- -------------------------------------------------------------------------
PAST 1 YEAR LIFE OF PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------------
Diversified Income Portfolio % %
- -------------------------------------------------------------------------
Lehman Brothers Government/Corporate
Intermediate Bond Index(1) % %
- -------------------------------------------------------------------------
Lipper Variable General Bond Underlying
Funds Average(2) % %
- -------------------------------------------------------------------------
</TABLE>

(1) The Lehman Brothers Government/Corporate Intermediate Bond Index tracks the
performance of government and corporate bonds, including U.S. Government
agency and U.S. Treasury securities and corporate and yankee bonds with
maturities of 1 to 10 years. The Index does not include any expenses or
fees. The Index is unmanaged and should not be considered an investment.
(2) The Lipper Variable Annuity General Bond Underlying Funds Average tracks
the performance of funds that do not have any quality or maturity
restrictions and intend to keep the bulk of assets in corporate and
government debt issues, as reported by Lipper Analytical Services.

11
<PAGE>
(Sidebar)
GROWTH & INCOME
An investment objective having the goal of selecting securities with the
potential to rise in value and pay out income.
(End Sidebar)

THE BALANCED GROWTH PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Balanced Growth Portfolio seeks to provide capital
growth with reasonable current income. There is no guarantee
that the Portfolio will achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Balanced Growth Portfolio will normally invest at least
60% of its assets in a diversified portfolio of common
stocks, at least 25% in fixed-income securities, and its
remaining assets in money market securities. Within these
limitations, the Portfolio may hold whatever proportion of
these investments its Investment Manager believes desirable
based on the Investment Manager's assessment of business,
economic and investment conditions.

The three groups of Portfolio investments in more detail
include:

(1) COMMON STOCKS. The Portfolio invests in common stocks,
and securities convertible into common stocks, of companies
that have a record of paying dividends and, in the
Investment Manager's opinion, have the potential for
increasing dividends. These investments may include foreign
securities that are listed on a major stock exchange.

(2) FIXED-INCOME SECURITIES. The Portfolio's fixed-income
securities (including zero coupon securities) are limited to
investment grade corporate securities such as bonds and
notes, and U.S. Government securities. The U.S. Government
securities may include:

- U.S. Treasury notes and bonds, all of which are direct
obligations of the U.S. Government.

- Securities (including mortgage-backed securities) issued
by agencies and instrumentalities of the U.S. Government
which are backed by the full faith and credit of the
United States. Among the agencies and instrumentalities
issuing these obligations are the Government National
Mortgage Association and the Federal Housing
Administration.

- Securities (including mortgage-backed securities) issued
by agencies and instrumentalities which are not backed by
the full faith and credit of the United States, but whose
issuing agency or instrumentality has the right to borrow,
to meet its obligations, from U.S. Treasury. Among these
agencies and instrumentalities are the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation.

- Securities issued by agencies and instrumentalities which
are backed solely by the credit of the issuing agency or
instrumentality. Among these agencies and
instrumentalities is the Federal Home Loan Banks.

12
<PAGE>
(3) MONEY MARKET SECURITIES. The money market securities in
which the Portfolio may invest include: securities issued or
guaranteed by the U.S. government, its agencies and
instrumentalities; bank obligations; Eurodollar certificates
of deposit; obligations of savings institutions; fully
insured certificates of deposit; and commercial paper.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Balanced Growth Portfolio's share price will fluctuate
with changes in the market value of the Portfolio's
portfolio securities. When you sell Portfolio shares, they
may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Portfolio.

FIXED-INCOME, INCLUDING MONEY MARKET, SECURITIES. Principal
risks of investing in the Portfolio are also associated with
its fixed-income investments, including its money market
securities. All fixed-income securities are subject to two
types of risk: credit risk and interest rate risk. Credit
risk refers to the possibility that the issuer of a security
will be unable to make interest payments and/or repay the
principal on its debt. Interest rate risk refers to
fluctuations in the value of a fixed-income security
resulting from changes in the general level of interest
rates. When the general level of interest rates goes up, the
prices of most fixed-income securities go down. When the
general level of interest rates goes down, the prices of
most fixed-income securities go up.

The Portfolio is not limited as to the maturities of the
securities in which it may invest. Thus, a rise in the
general level of interest rates may cause the price of the
Portfolio's investment securities to fall substantially.

MORTGAGE-BACKED SECURITIES. Mortgage-backed securities in
which the Portfolio may invest have different risk
characteristics than traditional debt securities. These
risks are described in the "Additional Investment Strategy
Information" section.

13
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Balanced Growth Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR
YEAR)
- -------------------------------------------------------------------------
PAST 1 YEAR LIFE OF PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------------
Balanced Growth Portfolio % %
- -------------------------------------------------------------------------
Standard & Poor's 500 Stock Price
Index(1) % %
- -------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(2) % %
- -------------------------------------------------------------------------
Lipper Variable Annuity Balanced
Underlying Funds Average(3) % %
- -------------------------------------------------------------------------
</TABLE>

(1) The Standard & Poor's 500 Stock Price Index is a broad-based index, the
performance of which is based on the average performance of 500 widely held
common stocks. The performance of the Index does not include any expenses
or fees. The Index is unmanaged and should not be considered an investment.
(2) The Lehman Brothers Aggregate Bond Index tracks the performance of all U.S.
Government agency and Treasury securities, investment-grade corporate debt
securities, agency mortgage-backed securities and asset-backed securities.
The Index does not include any expenses or fees. The Index in unmanaged and
should not be considered an investment.
(3) The Lipper Variable Annuity Balanced Underlying Funds Average tracks the
performance of funds whose primary objective is to conserve principal by
maintaining at all times a balanced portfolio of both stocks and bonds.
Typically, the stock/bond ratio ranges around 60%/40%, as reported by
Lipper Analytical Services.

14
<PAGE>
(Sidebar)
GROWTH AND INCOME
An investment objective having the goal of selecting securities with the
potential to rise in value and pay out income.
(End Sidebar)

THE UTILITIES PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Utilities Portfolio seeks to provide current income and
long-term growth of income and capital. There is no
guarantee that the Portfolio will achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Utilities Portfolio will normally invest at least 65% of
its assets in the common stock, other equity and investment
grade fixed-income securities (including zero coupon
securities) of companies that are primarily engaged in the
utilities industry. These companies are involved in various
aspects of the utilities industry, such as
telecommunications, gas and electric energy, and water
distribution. The companies may be traditionally regulated
public utilities as well as fully or partially deregulated
utility companies. The Portfolio's "Investment Manager,"
Morgan Stanley Dean Witter Advisors Inc., will shift the
Portfolio's asset between different types of utilities and
between equity and fixed-income securities, based on
prevailing market, economic and financial conditions. The
Portfolio does not have any set policies to concentrate its
assets in any particular segment of the utilities industry
or any particular type of security.

The Portfolio may also invest up to 20% of its assets in
foreign securities, with a maximum of 10% in non-depository
receipt securities.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Utilities Portfolio's share price will fluctuate with
changes in the market value of the Fund's portfolio
securities. When you sell Portfolio shares, they may be
worth less than what you paid for them and, accordingly, you
can lose money investing in this Portfolio.

UTILITIES INDUSTRY. The Portfolio's investments in the
utilities industry are impacted by a host of risks
particular to that industry. Changing regulation constitutes
one of the key industry-specific risks for the Portfolio,
especially with respect to its investments in traditionally
regulated public utilities and partially regulated utility
companies. State and other regulators monitor and control
utility revenues and costs, and therefore may limit utility
profits and dividends paid to investors. Regulatory
authorities also may restrict a company's access to new
markets, thereby diminishing the company's long-term
prospects. Individual sectors of the utility market are
subject to additional risks. These risks apply to all
utility companies -- regulated or fully or partially
deregulated. For example, telecommunications companies have
been affected by technological development leading to
increased competition, as well as changing regulation of
local and long-distance telephone service and other
telecommunications businesses. Certain telecommunications
companies have not benefitted from the new competitive
climate.

Electric utilities may be burdened by unexpected increases
in fuel and other operating costs. They are also adversely
affected when long-term interest rates rise. Long-term
borrowings are used to finance most utility investment, and
rising interest rates lead to higher financing costs and
reduced earnings. There are also the considerable costs
associated with environmental compliance, nuclear waste

15
<PAGE>
clean-up, and safety regulation. Increasingly, regulators
are calling upon electric utilities to bear these added
costs, and there is a risk that these costs will not be
fully recovered through an increase in revenues.

Among gas companies, there has been a move to diversify into
oil and gas exploration and development, making investment
return more sesitive to energy prices. In the case of the
water utility sector, the industry is highly fragmented, and
most water supply companies find themselves in mature
markets, with little potential for growth.

COMMON STOCKS AND OTHER EQUITY SECURITIES. A principal risk
of investing in the Portfolio is associated with its common
stock and other equity security investments. In general,
stock and other equity security values fluctuate in response
to activities specific to the company as well as general
market, economic and political conditions. These prices can
fluctuate widely in response to these factors. This can
especially be the case for fully or partially deregulated
utility companies.

FIXED-INCOME SECURITIES. Principal risks of investing in the
Portfolio are also associated with its fixed-income
investments. All fixed-income securities are subject to two
types of risk: credit risk and interest rate risk. Credit
risk refers to the possibility that the issuer of a security
will be unable to make interest payments and/or repay the
principal on its debt. Interest rate risk refers to
fluctuations in the value of a fixed-income security
resulting from changes in the general level of interest
rates. When the general level of interest rates goes up, the
prices of most fixed-income securities go down. When the
general level of interest rates goes down, the prices of
most fixed-income securities go up. (Zero coupon securities
are typically subject to greater price fluctuations than
comparable securities that pay interest.)

The Portfolio is not limited as to the maturities of the
securities in which it may invest. Thus, a rise in the
general level of interest rates may cause the prices of the
Portfolio's investment securities to fall substantially.

16
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Utilities Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a
calendar quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- --------------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- --------------------------------------------------------------------
Utilities Portfolio % %
- --------------------------------------------------------------------
Standard & Poor's 500 Stock Price
Index(1) % %
- --------------------------------------------------------------------
Lipper Variable Annuity Utility
Underlying Funds Average(2) % %
- --------------------------------------------------------------------
</TABLE>

17
<PAGE>
(Sidebar)
TOTAL RETURN
An investment objective having the goal of selecting securities with the
potential to rise in value and pay out income.
(End Sidebar)

THE DIVIDEND GROWTH PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Dividend Growth Portfolio seeks to provide a reasonable
current income and long-term growth of income and capital.
There is no guarantee that the Portfolio will achieve this
objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Dividend Growth Portfolio will invest at least 65% of
its assets in common stocks of companies with a record of
paying dividends and the potential for increasing dividends.
The Portfolio's "Investment Manager," Morgan Stanley Dean
Witter Advisors Inc., considers market, economic and
political factors in making investment decisions for the
Portfolio.

The Portfolio may also invest up to 30% of its assets in
convertible securities, U.S. Government securities issued or
guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities, investment
grade fixed-income securities (including zero coupon
securities) and real estate investment trusts (commonly
known as "REITs"). The Portfolio also may invest any amount
of its assets in foreign securities that are listed on a
major U.S. stock exchange.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Dividend Growth Portfolio's share price will fluctuate
with changes in the market value of the Portfolio's
portfolio securities. When you sell Portfolio shares, they
may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Portfolio.

A principal risk of investing in the Portfolio is associated
with its common stock investments. In general, stock values
fluctuate in response to activities specific to the company
as well as general market, economic and political
conditions. Stock prices can fluctuate widely.

The performance of the Portfolio also will depend on whether
the Investment Manager is successful in pursuing the
Portfolio's investment strategy. The Portfolio is subject to
other risks from its permissible investments. For more
information about these risks, see the "Additional Risk
Information" section.

18
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Dividend Growth Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -------------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------
Dividend Growth Portfolio % %
- -------------------------------------------------------------------
Standard & Poor's 500 Stock Price
Index(1) % %
- -------------------------------------------------------------------
Lipper Variable Annuity Growth and
Income Underlying Funds Average(2) % %
- -------------------------------------------------------------------
</TABLE>

19
<PAGE>
(Sidebar)
TOTAL RETURN
An investment objective having the goal of selecting securities with the
potential to rise in value and pay out income.
(End Sidebar)

THE VALUE-ADDED MARKET PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Value-Added Market Portfolio seeks to achieve a high
level of total return on its assets through a combination of
capital appreciation and current income. There is no
guarantee that the Portfolio will achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Value-Added Market Portfolio will invest, on an
"equally-weighted basis," in a diversified portfolio of
common stocks represented in the Standard & Poor's 500
Index. The S&P 500 represents 500 widely held companies
mostly listed on the New York Stock Exchange. The Portfolio
generally invests in each stock included in the S&P 500 in
equal proportion, referred to as an "equally-weighted
basis." This approach differs from the S&P 500 because
stocks in the S&P 500 are represented in portion to their
market value or market-capitalization. For example, the 50
largest companies in the S&P 500 represent approximately 45%
of the S&P 500's value; however, these same 50 companies
represent roughly 10% of the Portfolio's value
(approximately 0.02% of the Portfolio's value each). The
Portfolio may invest in foreign securities represented in
the S&P 500.

The Portfolio's "Investment Manager," Morgan Stanley Dean
Witter Advisors Inc., believes that an equal-weighting
approach may benefit the Portfolio since a specific company
or industry selection, even with a broad-based index such as
the S&P 500, may not achieve superior performance. The
Investment Manager will adjust the Portfolio's investment
securities at least quarterly to maintain an approximately
equal-weighting.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Value-Added Market Portfolio's share price will
fluctuate with changes in the market value of the
Portfolio's portfolio securities. When you sell Portfolio
shares, they may be worth less than what you paid for them
and, accordingly, you can lose money investing in this
Portfolio.

A principal risk of investing in the Portfolio is associated
with its common stock investments. In general, stock value
fluctuate in response to activities specific to the company
as well as general market, economic and political
conditions. Stock prices can fluctuate widely.

Unlike many mutual funds, the Portfolio is not actively
"managed." Therefore, the Portfolio generally would not sell
a stock because the stock's issuer is in financial trouble,
unless that stock is removed from the S&P 500. In addition,
the Investment Manager does not expect the Portfolio's
performance to track the performance of the S&P 500 because
the Portfolio uses an equally-weighted approach while the
S&P 500 uses a market-capitalization approach.

20
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Value-Added Market Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -----------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------------------
Value-Added Market Portfolio % %
- -----------------------------------------------------------------
Standard & Poor's 500 Stock Price Index
(1) % %
- -----------------------------------------------------------------
Lipper Variable Annuity Growth and
Income Underlying Funds Average(2) % %
- -----------------------------------------------------------------
</TABLE>

21
<PAGE>
(Sidebar)
CAPITAL GROWTH
An investment objective having the goal of selecting securities with the
potential to rise in value rather than pay out income.
(End Sidebar)

THE GROWTH PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Growth Portfolio seeks to provide long-term capital
growth. There is no guarantee that the Portfolio will
achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Growth Portfolio will normally invest at least 65% of
its assets in common stocks and convertible securities
primarily in companies having stock market values or
capitalizations of at least $1 billion. The Portfolio's
"Sub-Advisor," Morgan Stanley Dean Witter Investment
Management Inc., invests the Portfolio's assets by pursuing
its "equity growth" philosophy. That strategy involves a
process that seeks to identify companies that exhibit strong
or accelerating earnings growth.

The Sub-Advisor emphasizes individual security selection.
Individual companies are chosen based on such factors as
potential growth in earnings, quality of management, new
products and/or new markets, and research and development
capabilities. The Sub-Advisor anticipates that the Portfolio
will invest in a relatively limited number of companies,
although the Sub-Advisor continuously monitors up to 250
companies for possible investment. There is no minimum
rating or quality requirements with respect to the
convertible securities in which the Portfolio may invest. Up
to 25% of the Portfolio's assets may be invested in foreign
securities (other than Canadian issuers registered under the
Exchange Act or depository receipts on which there is no
limit).

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Growth Portfolio's share price will fluctuate with
changes in the market value of the Portfolio's portfolio
securities. When you sell Portfolio shares, they may be
worth less than what you paid for them and, accordingly, you
can lose money investing in this Portfolio.

Portfolio investments may include securities of medium-sized
and small companies that involve greater risk than is
customarily associated with investing in more established
companies. Often, medium-sized and small companies and the
industries in which they are focused are still evolving, and
they are more sensitive to changing market conditions than
larger companies in more established industries. Their
securities may be more volatile and have returns that vary,
sometimes significantly, from the overall stock market.

FOREIGN SECURITIES. Any Portfolio holdings of foreign
securities (including depository receipts) involve risks
that are in addition to the risks associated with domestic
securities. See the "Additional Risk Information" section
for a description of these risks.

22
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Growth Portfolio. The Portfolio's
past performance does not indicate how it will perform in
the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -------------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------
Growth Portfolio % %
- -------------------------------------------------------------------
Standard & Poor's 500 Stock Price
Index(1) % %
- -------------------------------------------------------------------
Lipper Variable Annuity Growth
Underlying Funds Average(2) % %
- -------------------------------------------------------------------
</TABLE>

23
<PAGE>
(Sidebar)
CAPITAL GROWTH
An investment objective having the goal of selecting securities with the
potential to rise in value rather than pay out income.
(End Sidebar)

THE AMERICAN OPPORTUNITIES PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The American Opportunities Portfolio seeks long-term capital
growth consistent with an effort to reduce volatility. There
is no guarantee that the Portfolio will achieve this
objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The American Opportunities Portfolio will normally invest at
least 65% of its assets in a diversified portfolio of common
stocks. The Portfolio's "Investment Manager," Morgan Stanley
Dean Witter Advisors Inc., invests in industries that it
believes have attractive earnings growth potential. The
Investment Manager utilizes a process, known as sector
rotation, that emphasizes industry selection over individual
company selection. The Investment Manager invests in those
industries that it believes will have the strongest relative
earnings growth potential given the projected economic
outlook. After selecting the Portfolio's target industries,
the Investment Manager then selects specific companies
within those industries whose prospects are deemed
attractive after assessing company fundamentals and
valuation screens.

SECTOR ROTATION. The Investment Manager will utilize a
sector rotation process designed to respond to changing
economic cycles by proactively investing in industries that
the Investment Manager believes to be positioned to benefit
from the current phase of the economic cycle. First, the
Investment Manager attempts to identify at what stage of the
business cycle the economy is in and which industries have
historically outperformed the overall market during that
stage of the cycle. To accomplish this task, the Investment
Manager establishes an economic forecast based on its short
term and long term views of the domestic and global economic
cycles. As part of this process, the Investment Manager will
attempt to identify secular trends, such as shifting
demographics or technological developments, that could add
clarity to its analysis. Also considered are competitive
industry variables, such as supply and demand, pricing
trends and new product cycles. Once attractive industries
are identified, individual companies that represent these
industries are selected using criteria including new product
cycles, market dominance, business model strength and
valuation measures.

The Portfolio also may invest up to 35% of its assets in
convertible debt and preferred securities; fixed income
securities (including zero coupon bonds) such as U.S.
government securities and investment grade corporate debt
securities; and foreign securities (including depository
receipts).

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The American Opportunities Portfolio's share price will
fluctuate with changes in the market value of the
Portfolio's portfolio securities. When you sell Portfolio
shares, they may be worth less than what you paid for them
and, accordingly, you can lose money investing in this
Portfolio.

COMMON STOCKS. A principal risk of investing in the
Portfolio is associated with its common stock investments.
In general, stock values fluctuate in response to activities
specific to the company as well as general market, economic
and political conditions. Stock prices can fluctuate widely
in response to these factors. The Portfolio's emphasis on
industries may cause its performance to be more sensitive to
developments affecting particular industries than a fund
that places primary emphasis on individual companies.

The Portfolio may invest in medium and small-sized
companies, as well as large, more established companies.
Investing in securities of small and medium-sized growth
companies involves greater risk than is customarily
associated with investing in more established companies.
These stocks may be more volatile and have returns that
vary, sometimes significantly, from the overall stock
market.

24
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

FIXED-INCOME SECURITIES. Any Portfolio investments in
fixed-income securities involve two types of risk: credit
risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to
make interest payments and/or repay the principal on its
debt. Interest rate risk refers to fluctuations in the value
of a fixed-income security resulting from changes in the
general level of interest rates. When the general level of
interest rates goes up, the prices of most fixed-income
securities go down. When the general level of interest rates
goes down, the prices of most fixed-income securities go up.

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the American Opportunities Portfolio.
The Portfolio's past performance does not indicate how it
will perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -------------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------
American Opportunities Portfolio % %
- -------------------------------------------------------------------
Standard & Poor's 500 Stock Price
Index(1) % %
- -------------------------------------------------------------------
Lipper Variable Annuity Growth
Underlying Fund Average(2) % %
- -------------------------------------------------------------------
</TABLE>

25
<PAGE>
(Sidebar)
CAPITAL GROWTH
An investment objective
having the goal of
selecting securities with
the potential to rise in
value rather than pay
out income.
(End Sidebar)

THE MID-CAP GROWTH PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Mid-Cap Growth Portfolio seeks long-term capital growth.
There is no guarantee that the Portfolio will achieve this
objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Mid-Cap Growth Portfolio will normally invest at least
65% of its assets in a diversified portfolio of domestic and
foreign equity securities of "mid-cap" companies. A mid-cap
company's market value or capitalization generally is
between $250 million to $5 billion. The Investment Manager
seeks to identify companies whose prospects are attractive
on the basis of valuation screens and prospective company
fundamentals. From companies included in the industry
valuation process, the Investment Manager selects companies
from each industry as representative of that industry. Those
companies which the Investment Manager believes to be
attractive investments are finally selected for inclusion in
the Portfolio.

The Portfolio also may invest a portion of its assets in
investment grade fixed-income securities, including
convertible securities, in an effort to moderate extremes of
price fluctuation. The Investment Manager will determine the
appropriate asset allocation between equity and fixed-income
investments based upon its evaluation of economic and market
conditions. Up to 35% of the Portfolio's assets may be
invested in U.S. Government securities and investment grade
corporate debt securities, or equity securities of
non-mid-cap companies. The Portfolio also may invest up to
35% of its assets in foreign securities.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Mid-Cap Growth Portfolio's share price will fluctuate
with changes in the market value of the Portfolio's
portfolio securities. When you sell Portfolio shares, they
may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Portfolio.

Investing in securities of medium-sized companies may
involve greater risk than is customarily associated with
investing in more established companies. Often, medium-sized
companies and the industries in which they are focused are
still evolving, and they are more sensitive to changing
market conditions than larger companies in more established
industries. Their securities may be more volatile and have
returns that vary, sometimes significantly, from the overall
stock market.

26
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)
FIXED-INCOME SECURITIES. Any Portfolio investments in
fixed-income securities involve two types of risk: credit
risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to
make interest payments and/or repay the principal on its
debt. Interest rate risk refers to fluctuations in the value
of a fixed-income security resulting from changes in the
general level of interest rates. When the general level of
interest rates goes up, the prices of most fixed-income
securities go down. When the general level of interest rates
goes down, the prices of most fixed-income securities go up.
FOREIGN SECURITIES. Any Portfolio holdings of foreign
securities (including depository receipts) involve risks
that are in addition to the risks associated with domestic
securities. See the "Additional Risk Information" section
for a description of these risks.
The performance of the Portfolio also will depend on whether
the Investment Manager is successful in pursuing the
Portfolio's investment strategy. The Portfolio is subject to
other risks from its permissible investments. For more
information about these risks, see the "Additional Risk
Information" section.

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Mid-Cap Growth Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period January 21, 1997 through December 31, 1997.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -----------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------------------
Mid-Cap Growth Portfolio % %
- -----------------------------------------------------------------
Standard & Poor's Midcap Index(1) % %
- -----------------------------------------------------------------
Lipper Variable Annuity Mid-Cap Growth
Underlying Funds Average(2) % %
- -----------------------------------------------------------------
</TABLE>

(1) The S&P Midcap Index is a market-value weighted index, the performance of
which is based on the average performance of 400 domestic stocks chosen for
market size, liquidity and industry group representation. The Index does
not include any expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.
(2) The Lipper Variable Annuity Mid-Cap Growth Underlying Funds Average tracks
the performance of funds which by prospectus or portfolio practice invest
primarily in companies with market capitalizations less than $5 billion at
the time of purchase, as reported by Lipper Analytical Services.

27
<PAGE>
(Sidebar)
TOTAL RETURN
An investment objective having the goal of selecting securities with the
potential to rise in value and pay out income.
(End Sidebar)

THE GLOBAL EQUITY PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Global Equity Portfolio seeks to obtain total return on
its assets primarily through long-term capital growth and to
a lessor extent from income. There is no guarantee that the
Portfolio will achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Global Equity Portfolio will normally invest at least
65% of its assets in common stocks and other equity
securities of companies located in various countries around
the world. The Portfolio's "Investment Manager," Morgan
Stanley Dean Witter Advisors Inc., will maintain a flexible
investment policy and invest in a diversified portfolio of
securities based on a worldwide investment strategy.
However, the Portfolio's assets normally will be invested in
at least three separate countries. Portfolio investments
generally will be those with a record of paying dividends
and the potential for increasing dividends. The Investment
Manager will shift the percentage of assets invested in
particular geographical regions based on its view of market,
economic and political conditions.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Global Equity Portfolio's share price will fluctuate
with changes in the market value of the Portfolio's
portfolio securities. When you sell Portfolio shares, they
may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Portfolio.

28
<PAGE>
local currency falls relative to the U.S. dollar, the U.S.
dollar value of the foreign security will decrease. This is
true even if the foreign security's local price remains
unchanged.

29
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Global Equity Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.

During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -------------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------
Global Equity Portfolio % %
- -------------------------------------------------------------------
Morgan Stanley Capital International
World Index(1) % %
- -------------------------------------------------------------------
Lipper Variable Annuity Global
Underlying Funds Average(2) % %
- -------------------------------------------------------------------
</TABLE>

(1) The Morgan Stanley Capital International World 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
reflect the deduction of any expense or fees or reinvestment of dividends.
The Index is unmanaged and should not be considered an investment.
(2) The Lipper Variable Annuity Global Underlying Funds Average tracks the
performance of funds which invest at least 25% of their portfolio in
securities traded outside of the United States and that may own U.S.
securities as well, as reported by Lipper Analytical Services.

30
<PAGE>
(Sidebar)
CAPITAL GROWTH
An investment objective having the goal of selecting securities with the
potential to rise in value rather than pay out income.
(End Sidebar)
THE DEVELOPING GROWTH PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Developing Growth Portfolio seeks long-term capital
growth. There is no guarantee that the Portfolio will
achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Developing Growth Portfolio will normally invest at
least 65% of its assets in common stocks and other equity
securities of companies that the Portfolio's "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., believes
have the potential to growth much more rapidly than the
economy. The Portfolio will invest primarily in smaller and
medium-sized companies. The Investment Manager focuses its
securities selection upon a diversified group of emerging
growth companies that have moved beyond the difficult and
extremely risky start-up phase and show positive earnings
with the prospects of achieving significant further profit
gains in at least the next two-to-three years. The
proportion of the Portfolio's assets invested in particular
industries will shift in accordance with the Investment
Manager's views of the market, economy and political
conditions.
The Portfolio may invest up to 35% of its assets in (a)
fixed-income securities issued or guaranteed by the United
States government, its agencies or instrumentalities, and
(b) corporate debt securities rated Baa or better by Moody's
Investors Service or BBB or better by Standard & Poor's or,
if not rated, judged to be of comparable quality by the
Investment Manager. Up to 10% of the Portfolio's assets may
be invested in foreign securities (other than Canadian
issues registered under the Exchange Act or depository
receipts on which there is no limit).

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Developing Growth Portfolio's share price will fluctuate
with changes in the market value of the Portfolio's
portfolio securities. When you sell Portfolio shares, they
may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Portfolio.
COMMON STOCKS. A principal risk of investing in the
Portfolio is associated with its common stock investments.
In general, stock values fluctuate in response to activities
specific to the company as well as general market, economic
and political conditions. These prices can fluctuate widely.
Investing in securities of medium-sized and small companies
may involve greater risk than is customarily associated with
investing in more established companies. Often, medium-sized
and small companies and the industries in which they are
focused are still evolving, and they are more sensitive to
changing market conditions than larger companies in more
established industries. Their securities may be more
volatile and have returns that vary, sometimes
significantly, from overall stock market.
FIXED-INCOME SECURITIES. Principal risks of investing in the
Portfolio are associated with its fixed-income securities.
All fixed-income securities are subject to two types of
risk: credit risk and interest rate risk. The "Additional
Risk Information" section contains a description of credit
and interest rate risks.

The Portfolio is not limited as to the maturities of the
securities in which it may invest. Thus, a risk in the
general level of interest rates may cause the prices of the
Portfolio's investment securities to fall substantially.

31
<PAGE>
FOREIGN SECURITIES. Any Portfolio holdings of foreign
securities (including depository receipts) involve risks
that are in addition to the risks associated with domestic
securities. See the "Additional Risk Information" section
for a description of these risks.

OTHER RISKS. The performance of the Portfolio also will
depend on whether the Investment Manager is successful in
pursuing the Portfolio's investment strategy. The Portfolio
is subject to other risks from its permissible investments.
For more information about these risks, see the "Additional
Risk Information" section.
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Developing Growth Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

* For the period November 9, 1994 through December 31, 1994.
During the periods shown in the bar chart, the highest
return for a calendar quarter was % (quarter ended
, 199 ) and the lowest return for a calendar
quarter was % (quarter ended , 199 ).
Year-to-date total return as of March 31, 1999 was %.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR
YEAR)
- -------------------------------------------------------------------------
PAST 1 YEAR LIFE OF PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------------
Developing Growth Portfolio % %
- -------------------------------------------------------------------------
Standard & Poor's 500 Stock Price
Index(1) % %
- -------------------------------------------------------------------------
Russell 2000 Index(2) % %
- -------------------------------------------------------------------------
Lipper Variable Annuity Small-Cap
Underlying Funds Average(3) % %
- -------------------------------------------------------------------------
</TABLE>

(1) The Standard & Poor's 500 Stock Price Index is a broad-based index, the
performance of which is based on the average performance of 500 widely held
common stocks. The Index does not include any expenses or fees. The Index
is unmanaged and should not be considered an investment.
(2) The Russell 2000 Index is a capitalization weighted index which is
comprised of 2000 of the smallest stocks (on the basis of capitalization)
in the Russell 3000 Index. The performance of the Index does not include
any expenses or fees. The Index is unmanaged and should not be considered
an investment.
(3) The Lipper Variable Annuity Small-Cap Underlying Funds Average tracks the
performance of funds that by prospectus or portfolio practice invest
primarily in companies with market capitalizations less than $1 billion at
the time of purchase, as reported by Lipper Analytical Services.

32
<PAGE>
(Sidebar)
CAPITAL APPRECIATION
An investment objective having the goal of selecting securities with the
potential to rise in value rather than pay out income.
(End Sidebar)

THE EMERGING MARKETS PORTFOLIO

ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Emerging Markets Portfolio seeks long-term capital
appreciation. There is no guarantee that the Portfolio will
achieve this objective.

ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Emerging Markets Portfolio will normally invest at least
65% of its assets in common stocks and other equity
securities of companies in emerging markets. Each of these
companies is: organized in an emerging market country;
derives at least fifty percent of its revenues from goods
produced or sold, investments made, or services performed in
emerging markets; maintains at least fifty percent of its
assets in emerging market countries; or has securities that
are traded principally on a stock exchange in an emerging
market country. Presently, there are approximately 158
countries considered to be emerging market countries.

The Portfolio's "Sub-Advisor," TCW Funds Management, Inc.,
utilizes a top-down/ bottom-up approach. The Sub-Advisor
begins with an evaluation of the country in which the
proposed investment is to be made. Following the country
level review, the Sub-Advisor conducts a fundamental
analysis of securities, industries and companies, including
consideration of liquidity, market capitalization, financial
position, relative competitive position, together with
overall growth prospects. The Portfolio's assets will be
allocated among emerging market countries in accordance with
the Sub-Advisor's view of best investment opportunities;
however, the Portfolio will normally invest in at least five
emerging market counties.

The Portfolio may invest at least 35% of its assets in
fixed-income securities of government and corporate issuers
located in emerging market countries, and equity and
fixed-income securities of issuers in developed countries.

ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Emerging Markets Portfolio's share price will fluctuate
with changes in the market value of the Portfolio's
portfolio securities. When you sell Portfolio shares, they
may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Portfolio.

33
<PAGE>
Foreign securities also have risks related to economic and
political developments abroad, including expropriations,
confiscatory taxation, exchange control regulation,
limitations on the use or transfer of Portfolio assets, and
any effects of foreign social, economic or political
instability. Foreign companies, in general, are not subject
to the regulatory requirements of U.S. companies and, as
such, there may be less publicly available information about
these companies. Moreover, foreign accounting, auditing and
financial reporting standards generally are different from
those applicable to U.S. companies. Finally, in the event of
a default of any foreign debt obligations, it may be more
difficult for the Portfolio to obtain or enforce a judgment
against the issuers of the securities.

EMERGING MARKET COUNTRIES. You should recognize that
investing in securities of emerging market countries
involves certain risks, and special considerations that are
not typically associated with investing in securities of
U.S. companies or issuers located in foreign developed
countries.

The securities markets of emerging market countries are
substantially smaller, less developed, less liquid and more
volatile than the major securities markets in the United
States. The limited size of many emerging securities markets
and limited trading volume in issuers compared to volume of
trading in U.S. securities could cause prices to be erratic
for reasons apart from factors that affect the quality of
the securities. For example, limited market size may cause
prices to be unduly influenced by traders who control large
positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease
the value and liquidity of portfolio securities, especially
in these markets.

In addition, emerging market countries' exchanges and
broker-dealers are generally subject to less government and
exchange scrutiny and regulation than their American
counterparts. Brokerage commissions, dealer concessions,
custodial expenses and other transaction costs may be higher
on foreign markets than in the U.S. Thus, the Portfolio's
operating expenses are expected to be higher than those of
mutual funds investing primarily in domestic or other more
established market regions. Also, differences in clearance
and settlement procedures on foreign markets may occasion
delays in settlements of Portfolio trades effected in such
markets. Inability to dispose of securities due to
settlement delays could result in losses to the Portfolio
due to subsequent declines in value of such securities and
the inability of the Portfolio to make intended security
purchases due to settlement problems could result in a
failure of the Portfolio to make potentially advantageous
investments.

Many of the emerging market countries may be subject to a
greater degree of economic, political and social instability
than is the case in the United States and Western European
countries. This instability may result from, among other
things,

34
<PAGE>
the following: (i) authoritarian governments or military
involvement in political and economic decision-making,
including changes in government through extra-constitutional
means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; (iii)
internal insurgencies; (iv) hostile relations with
neighboring countries; and (v) ethnic, religious and racial
disaffection. Social, political and economic instability
could significantly disrupt the principal financial markets
in which the Portfolio invests and adversely affect the
value of the Portfolio's assets.

Certain emerging market countries are among the largest
debtors to commercial banks and foreign governments. Trading
in sovereign debt involves a high degree of risk, since the
governmental entity that controls the repayment of sovereign
debt may not be willing or able to repay the principal
and/or interest of the debt obligations when they become
due, due to factors such as debt service burden, political
constraints, cash flow situation and other national economic
factors. As a result, governments of emerging market
countries may default on their sovereign debt, which may
require holders of sovereign debt to participate in debt
rescheduling or additional lending to defaulting
governments. There is no bankruptcy proceeding by which
defaulted sovereign debt may be collected in whole or in
part. At times certain emerging market countries have
declared moratoria on the payment of principal and/or
interest on external debt.

The governments of some emerging market countries, to
varying degrees, have been engaged in programs of selling
part or all of their stakes in government-owned or
government-controlled enterprises -- referred to as
"privatizations." The Sub-Advisor believes that
privatizations may offer investors opportunities for
significant capital appreciation and intends to invest
assets of the Portfolio in privatizations in appropriate
circumstances. In certain emerging market countries, the
ability of foreign investors, such as the Portfolio, to
participate in privatizations may be limited by local law,
or the terms on which the Portfolio may be permitted to
participate may be less advantageous than those for local
investors. There can be no assurance that privatization
programs will continue or be successful.

Most emerging market countries have experienced substantial,
and in some periods extremely high, rates of inflation for
many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative
effects on the economies and securities markets of certain
emerging market countries.

Many of the currencies of emerging market countries have
experienced steady devaluations relative to the U.S. dollar,
and major devaluations have historically occurred in certain
countries. Any devaluations in the currencies in which
portfolio securities are denominated may have a detrimental
impact on the Portfolio.

As a result of the absence of established securities markets
and publicly-owned corporations in certain emerging market
countries, as well as restrictions on direct investment by
foreign entities, the Portfolio may be able to invest in
such countries solely or primarily through depository
receipts or similar securities and government approved
investment vehicles. For example, due to Chile's current
investment restrictions (in most cases capital invested
directly in Chile cannot be repatriated for at least one
year), the Portfolio's investments in Chile primarily will
be through investment in depository receipts and established
Chilean investment companies not subject to repatriation
restrictions.

35
<PAGE>
FIXED-INCOME SECURITIES. Any Portfolio investments in
fixed-income securities involve two types of risk: credit
risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to
make interest payments and/or repay the principal on its
debt. Interest rate risk refers to fluctuations in the value
of a fixed-income security resulting from changes in the
general level of interest rates. When the general level of
interest rates goes up, the prices of most fixed-income
securities go down. When the general level of interest rates
goes down, the prices of most fixed-income securities go up.

36
<PAGE>
(Sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Portfolio's shares has varied from
year to year during the life of the Portfolio.

AVERAGE ANNUAL
TOTAL RETURNS
This table compares the Portfolio's average annual returns with those of a broad
measure of market performance over time.
(End Sidebar)

ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Emerging Markets Portfolio. The
Portfolio's past performance does not indicate how it will
perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998
CALENDAR YEAR)
- -------------------------------------------------------------------
LIFE OF
PAST 1 YEAR PORTFOLIO
<S> <C> <C>
- -------------------------------------------------------------------
Emerging Markets Portfolio % %
- -------------------------------------------------------------------
International Finance Corporation
Investable Emerging Markets Total
Returns Index(1) % %
- -------------------------------------------------------------------
Lipper Variable Annuity Emerging Market
Underlying Funds Average(2) % %
- -------------------------------------------------------------------
</TABLE>

(1) The International Finance Corporation Investable Emerging Markets Total
Returns Index (IFCI) is designed to measure more precisely the returns
foreign portfolio investors might receive from investing in baskets of
stocks that were legally and practically available to them in the emerging
markets of Latin America, East Asia, South Asia, Europe, the Mideast and
Africa. The Index does not include any expense, fees or charges. The Index
is unmanaged and should not be considered an investment.
(2) The Lipper Variable Annuity Emerging Market Underlying Funds Average tracks
the performance of funds which seek long-term capital appreciation by
investing at least 65% of their equity portfolio in emerging market shares,
as reported by Lipper Analytical Services.

37
<PAGE>
ADDITIONAL INVESTMENT STRATEGY INFORMATION

This section provides additional information concerning each
Portfolio's principal strategies.

INVESTMENT DISCRETION. In pursuing each Portfolio's
investment objective, the Investment Manager has
considerable leeway in deciding which investments it buys,
holds or sells on a day-to-day basis - and which trading
strategies it uses. For example, the Investment Manager in
its discretion may determine to use some permitted trading
strategies while not using others. The Sub-Advisors -- TCW
Funds Management and Morgan Stanley Dean Witter Investment
Management -- have a similar degree of discretion.

OPTIONS AND FUTURES. Certain Portfolios may invest in put
and call options and futures with respect to financial
instruments, stock and interest rate indexes, and foreign
currencies. Options and futures may be used to facilitate
allocation of a Portfolio's investments among asset classes,
to increase or decrease a Portfolio's exposure to the stock
or bond markets, to generate income or to seek to protect
against a decline in securities or currency prices or an
increase in prices of securities or currencies that may be
purchased.

FORWARD CURRENCY CONTRACTS. A Portfolio's investments also
may include forward currency contracts, which involve the
purchase or sale of a specific amount of foreign currency at
the current price with delivery at a specified future date.
A Portfolio may use these contracts to hedge against adverse
price movements in its portfolio securities and the
currencies in which they are denominated. A Portfolio also
may enter into "cross-currency" hedging transactions
involving currencies other than those in which securities
are held or proposed to be purchased are denominated. A
Portfolio may engage in "anticipatory" hedging transactions
in which it purchases or sells a specific amount of a
foreign currency in order to lock in the current exchange
rate of a currency in which a security that a Portfolio
intends to purchase in the future is denominated. A
Portfolio may close out the anticipatory hedge without
purchasing the security.

DEFENSIVE INVESTING. Each Portfolio (other than the Money
Market Portfolio) may take temporary "defensive" positions
in attempting to respond to adverse market conditions. Each
Portfolio may invest any amount of its assets in cash or
money market instruments in a defensive posture when the
Investment Manager or its Sub-Advisor, as the case may be,
believes it advisable to do so. Although taking a defensive
posture is designed to protect the Fund from an anticipated
market downturn, it could have the effect of reducing the
benefit of an upswing in the market.

INVESTMENT POLICIES. The percentage limitations relating to
the composition of a Portfolio referenced in the discussion
of a Portfolio apply at the time a Portfolio acquires an
investment. Subsequent percentage changes that result from
market fluctuations or changes in assets will not require a
Portfolio to sell any Portfolio security. A Portfolio may
change its principal investment strategies without
shareholder approval; however you would be notified of any
change.

38
<PAGE>
PORTFOLIO TURNOVER. Each Portfolio's turnover rate is not
expected to exceed the following respective percentages
annually under normal circumstances.

<TABLE>
<S> <C>
The North American Government Securities
Portfolio 100%
- ---------------------------------------------------------------
The Diversified Income Portfolio
200%
- ---------------------------------------------------------------
The Balanced Growth Portfolio
150%
- ---------------------------------------------------------------
The Utilities Portfolio
100%
- ---------------------------------------------------------------
The Dividend Growth Portfolio
100%
- ---------------------------------------------------------------
The Value-Added Market Portfolio
50%
- ---------------------------------------------------------------
The Growth Portfolio
100%
- ---------------------------------------------------------------
The American Opportunities Portfolio
300%
- ---------------------------------------------------------------
The Mid-Cap Growth Portfolio
150%
- ---------------------------------------------------------------
The Global Equity Portfolio
100%
- ---------------------------------------------------------------
The Developing Growth Portfolio
200%
- ---------------------------------------------------------------
The Emerging Markets Portfolio
150%
- ---------------------------------------------------------------
</TABLE>

A high turnover rate will increase a Portfolio's brokerage
costs. It may also increase a Portfolio's capital gains,
which will be passed along to Portfolio shareholders as
distributions.

39
<PAGE>
ADDITIONAL RISK INFORMATION

This section provides additional information regarding the
principal risks of investing in the Portfolios.

YEAR 2000. Each Portfolio could be adversely affected if the
computer systems necessary for the efficient operation of
the Investment Manager, the Sub-Advisor, the Fund's other
service providers and the markets and individual and
governmental issuers in which the Portfolios invest do not
properly process and calculate date-related information from
and after January 1, 2000. While year 2000-related computer
problems could have a negative effect on the Fund and the
Portfolios, the Investment Manager, the Sub-Advisor and
affiliates are working hard to avoid any problems and to
obtain assurances from their service providers that they are
taking similar steps.

* * *

The risks set forth below are applicable to a Portfolio only
to the extent the Portfolio invests in the investment
described.

FIXED-INCOME SECURITIES. All fixed-income securities are
subject to two types of risk: credit risk and interest rate
risk. Credit risk refers to the possibility that the issuer
of a security will be unable to make interest payments
and/or repay the principal on its debt.

Interest rate risk refers to fluctuations in the value of a
fixed-income security resulting from changes in the general
level of interest rates. When the general level of interest
rates goes up, the prices of most fixed-income securities go
down. When the general level of interest rates goes down,
the prices of most fixed-income securities go up. (Zero
coupon securities are typically subject to greater price
fluctuations than comparable securities that pay interest.)
Accordingly, a rise in the general level of interest rates
may cause the price of a Portfolio's fixed-income securities
to fall substantially. As merely illustrative of the
relationship between fixed-income securities and interest
rates, the following table shows how interest rates affect
bond prices.

HOW INTEREST RATES AFFECT BOND PRICES

<TABLE>
<CAPTION>
PRICE PER $1,000 OF A BOND IF
INTEREST RATES:
-------------------------------------
INCREASE DECREASE
----------------- -----------------
BOND MATURITY COUPON 1% 2% 1% 2%
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
1 year N/A $ 1,000 $ 1,000 $ 1,000 $ 1,000
- -------------------------------------------------------------------------------
5 years 4.25% $ 967 $ 934 $ 1,038 $ 1,076
- -------------------------------------------------------------------------------
10 years 4.75% $ 930 $ 867 $ 1,074 $ 1,155
- -------------------------------------------------------------------------------
30 years 5.25% $ 865 $ 756 $ 1,166 $ 1,376
- -------------------------------------------------------------------------------
</TABLE>

Coupons reflect yields on Treasury securities as of December
31, 1998. The table is not representative of price changes
for mortgage-backed securities principally because of
prepayments, and it is not representative of junk bonds. In
addition, the table is an illustration and does not
represent expected yields or share price changes of any
Morgan Stanley Dean Witter mutual fund.

40
<PAGE>
MORTGAGE-BACKED SECURITIES. Mortgage-backed securities have
different risk characteristics than traditional debt
securities. Although generally the value of fixed-income
securities increases during periods of falling interest
rates and decreases during periods of rising interest rates,
this is not always the case with mortgage-backed securities.
This is due to the fact that principal on underlying
mortgages may be prepaid at any time as well as other
factors. Generally, prepayments will increase during a
period of falling interest rates and decrease during a
period of rising interest rates. The rate of prepayments
also may be influenced by economic and other factors.
Prepayment risk includes the possibility that, as interest
rates fall, securities with stated interest rates may have
the principal prepaid earlier than expected, requiring the
Fund to invest the proceeds at generally lower interest
rates.

JUNK BONDS. A Portfolio's investments in securities rated
lower than investment grade or if unrated of comparable
quality as determined by the Investment Manager (commonly
known as "junk bonds") pose significant risks. The prices of
junk bonds are likely to be more sensitive to adverse
economic changes or individual corporate developments than
higher rated securities. During an economic downturn or
substantial period of rising interest rates, junk bond
issuers and, in particular, highly leveraged issuers may
experience financial stress that would adversely affect
their ability to service their principal and interest
payment obligations, to meet their projected business goals
or to obtain additional financing. In the event of a
default, the Portfolio may incur additional expenses to seek
recovery. The secondary market for junk bonds may be less
liquid than the markets for higher quality securities and,
as such, may have an adverse effect on the market prices of
certain securities. The Rule 144A securities could have the
effect of increasing the level of Portfolio illiquidity to
the extent a Portfolio may be unable to find qualified
institutional buyers interested in purchasing the
securities. The illiquidity of the market may also adversely
affect the ability of the Fund's Trustees to arrive at a
fair value for certain junk bonds at certain times and could
make it difficult for the Portfolios to sell certain
securities. In addition, periods of economic uncertainty and
change probably would result in an increased volatility of
market prices of high yield securities and a corresponding
volatility in a Portfolio's net asset value.

SECURITIES RATED IN THE LOWEST INVESTMENT GRADE CATEGORY.
Investments in the fixed-income securities rated in the
lowest investment grade category by Moody's or S&P may have
speculative characteristics and therefore changes in
economic or other circumstances are more likely to weaken
their capacity to make principal and interest payments than
would be the case with investments in securities with higher
credit ratings.

FOREIGN SECURITIES. Foreign securities (including depository
receipts) involve risks in addition to the risks associated
with domestic securities. One additional risk is currency
risk. While the price of Portfolio shares is quoted in U.S.
dollars, a Portfolio generally converts U.S. dollars to a
foreign market's local currency to purchase a security in
that market. If the value of that local currency falls
relative to the U.S. dollar, the U.S. dollar value of the
foreign security will decrease. This is true even if the
foreign security's local price remains unchanged.

41
<PAGE>
Foreign securities also have risks related to economic and
political developments abroad, including effects of foreign
social, economic or political instability. Foreign
companies, in general, are not subject to the regulatory
requirements of U.S. companies and, as such, there may be
less publicly available information about these companies.
Moreover, foreign accounting, auditing and financial
reporting standards generally are different from those
applicable to U.S. companies. Finally, in the event of a
default of any foreign debt obligations, it may be more
difficult for the Fund to obtain or enforce a judgment
against the issuers of the securities.

The foreign securities in which certain of the Portfolios
may invest may be issued by companies located in developing
countries. Compared to the United States and other developed
countries, developing countries may have relatively unstable
governments, economies based on only a few industries and
securities markets that trade a small number of securities.
Prices of these securities tend to be especially volatile
and, in the past, securities in these countries have offered
greater potential loss (as well as gain) than securities of
companies located in developed countries.

Many European countries have adopted or are in the process
of adopting a single European currency, referred to as the
"euro." The consequences of the euro conversion for foreign
exchange rates, interest rates and the value of European
securities the Fund may purchase are presently unclear. The
consequences may adversely affect the value and/or increase
the volatility of securities held by a Portfolio.

OPTIONS AND FUTURES. If a Portfolio invests in options
and/or futures, its participation in these markets would
subject the Portfolio to certain risks. The Investment
Manager's predictions of movements in the direction of the
stock, bond, currency or interest rate markets may be
inaccurate, and the adverse consequences to the Portfolio
(e.g., a reduction in the Portfolio's net asset value or a
reduction in the amount of income available for
distribution) may leave the Portfolio in a worse position
than if these strategies were not used. Other risks inherent
in the use of options and futures include, for example, the
possible imperfect correlation between the price of options
and futures contracts and movements in the prices of the
securities being hedged, and the possible absence of a
liquid secondary market for any particular instrument.
Certain options may be over-the-counter options, which are
options negotiated with dealers; there is no secondary
market for these investments.

FORWARD CURRENCY CONTRACTS. A Portfolio's participation in
forward currency contracts also involves risks. If the
Investment Manager employs a strategy that does not
correlate well with the Fund's investments or the currencies
in which the investments are denominated, currency contracts
could result in a loss. The contracts also may increase the
Fund's volatility and may involve a significant risk.

REITS. REITs pool investors' funds for investments primarily
in commercial real estate properties. Like mutual funds,
REITs have expenses, including advisory and administration
fees that are paid by its shareholders. As a result, you
will absorb duplicate levels of fees when the Fund invests
in REITs. The performance of any Fund REIT holdings
ultimately depends on the types of real property in which
the REITs invest and how well the property is managed. A
general downturn in real estate values also can hurt REIT
performance.

42
<PAGE>
PORTFOLIO MANAGEMENT

Morgan Stanley Dean Witter Advisors Inc. is the Investment
Manager to each Portfolio. Each Portfolio has retained the
Investment Manager to provide administrative services,
manage its business affairs and (except for the North
American Government Securities, Emerging Markets, and Growth
Portfolios) invest its assets, including the placing of
orders for the purchase and sale of portfolio securities.
The Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & Co., a preeminent global
financial services firm that maintains leading market
positions in each of its three primary businesses:
securities, asset management and credit services. Its main
business office is located at Two World Trade Center, New
York, NY 10048.

Each of the North American Government Securities, Emerging
Markets, and Growth Portfolios has retained the Investment
Manager to supervise the investment of its assets. The
Investment Manager has, in turn, contracted with -- TCW
Funds Management Inc. -- to invest the North American
Government Securities Portfolio and the Emerging Markets
Portfolio's assets, including the placing of orders for the
purchase and sales of investment securities. TCW Funds
Management, Inc., together with its affiliated companies,
manages more than $50 billion primarily for institutional
investors. It is a wholly-owned subsidiary of The TCW Group,
Inc., and its main business address is 865 South Figueroa
Street, Suite 1800, Los Angeles California 90017.

The Investment Manager also has contracted with Morgan
Stanley Dean Witter Investment Management Inc. -- to invest
the Growth Portfolio's assets, including the placing of
orders for the purchase and sales of investment securities.
Morgan Stanley Dean Witter Investment Management Inc.,
together with its institutional investment management
affiliates, manages more than $150 billion primarily for
employee benefit plans, investment companies, endowments,
foundations and wealthy individuals. It is a wholly-owned
subsidiary of Morgan Stanley Dean Witter & Co. Its main
business office is located at 1221 Avenue of the Americas,
New York, New York.
(Sidebar)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc., its
wholly-owned subsidiary, has more than $ billion in assets under management
or administration as of March 31, 1999.
(End Sidebar)

Each Portfolio pays the Investment Manager a monthly
management fee as full compensation for the services and
facilities furnished to each Portfolio, and for Portfolio
expenses assumed by the Investment Manager. The fee is based
on the

43
<PAGE>
Portfolio's average daily net assets. For the fiscal year
ended December 31, 1998 each Portfolio accrued total
compensation to the Investment Manager as set forth in the
following table.

<TABLE>
<CAPTION>
MANAGEMENT FEES AS A
PERCENTAGE OF
AVERAGE
PORTFOLIO DAILY NET ASSETS
<S> <C>
- ------------------------------------------------------------------------
The Money Market Portfolio 0.50%
- ------------------------------------------------------------------------
The North American Government Securities
Portfolio 0.39%(1)
- ------------------------------------------------------------------------
The Diversified Income Portfolio 0.40%
- ------------------------------------------------------------------------
The Balanced Growth Portfolio(2) 0.62%
- ------------------------------------------------------------------------
The Utilities Portfolio 0.65%
- ------------------------------------------------------------------------
The Dividend Growth Portfolio(3) 0.60%
- ------------------------------------------------------------------------
The Value-Added Market Portfolio 0.50%
- ------------------------------------------------------------------------
The Growth Portfolio(4) 0.80%(1)
- ------------------------------------------------------------------------
The American Opportunities Portfolio 0.62%
- ------------------------------------------------------------------------
The Mid-Cap Growth Portfolio(5) 0%
- ------------------------------------------------------------------------
The Global Equity Portfolio 1.00%
- ------------------------------------------------------------------------
The Developing Growth Portfolio 0.50%
- ------------------------------------------------------------------------
The Emerging Markets Portfolio 1.25%(1)
- ------------------------------------------------------------------------
</TABLE>

(1) 40% of the Investment Manager's compensation is paid to the Portfolio's
Sub-Advisor.
(2) Effective March 2, 1998, the investment management fee was reduced to 0.60%
of the Portfolio's daily net assets. Previously the fee had been 0.75% of
daily net assets.
(3) Effective May 1, 1998, the investment management fee was reduced to 0.625%
of the Portfolio's daily net assets up to $500 million and 0.50% of the
Portfolio's daily net assets over $500 million. Previously the fee had been
0.625% of daily net assets.
(4) Effective March 2, 1998, the investment management fee was reduced to 0.80%
of the Portfolio's daily net assets. Previously the fee had been 0.85% of
daily net assets.
(5) The Mid-Cap Growth Portfolio commenced operations on January 21, 1997. The
Investment Manager had undertaken to assume all expenses of this Portfolio
(except for any brokerage fees) and to waive the compensation provided for
this Portfolio in its Management Agreement with the Fund until such time as
the Portfolio attained $50 million of net assets or until April 30, 1999,
whichever occurred first. As of the date of this Prospectus, the Mid-Cap
Growth Portfolio had not attained $50 million of net assets.

The following individuals are primarily responsible for the
day-to-day management of certain of the Portfolios. Except
as otherwise noted, each of these individuals has been a
primary portfolio manager of the designated Portfolio for
over five years or since the inception of the Portfolio (if
less than five years) and has been a portfolio manager with
the Investment Manager for over five years.

NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO - Philip A.
Barach, James M. Goldberg, Frederick E. Horton and Jeffrey
E. Gundlach, Managing Directors of TCW, are the primary
portfolio managers of the Portfolio.

DIVERSIFIED INCOME PORTFOLIO - Peter M. Avelar and Rajesh K.
Gupta, Senior Vice Presidents of the Investment Manager, and
Anne Pickrell and Peter J. Seeley, Vice Presidents of the
Investment Manager, are the primary portfolio managers of
the Portfolio - Messrs. Avelar and Gupta since the inception
of the Portfolio and Ms. Pickrell and Mr. Seeley since
February 1998. Prior to Mr. Seeley joining the Investment
Manager in July 1994, he was a portfolio manager at Nikko
Capital Management.

BALANCED GROWTH PORTFOLIO - Mr. Gupta and Paul D. Vance,
Senior Vice Presidents of the Investment Manager, have been
the primary portfolio managers of the Portfolio since March
1998. Mr. Vance has been a portfolio manager with the
Investment Manager for over five years.

44
<PAGE>
UTILITIES PORTFOLIO - Edward F. Gaylor, Senior Vice
President of the Investment Manager, is the primary
portfolio manager of the Portfolio.

DIVIDEND GROWTH PORTFOLIO - Paul D. Vance, Senior Vice
President of the Investment Manager, is the primary
portfolio manager of the Portfolio.

VALUE-ADDED MARKET PORTFOLIO - Kenton J. Hinchliffe, Senior
Vice President of the Investment Manager, is the primary
portfolio manager of the Portfolio.

GROWTH PORTFOLIO - Philip Friedman, a Managing Director of
Morgan Stanley Dean Witter Investment Management Inc.,
Margaret Johnson, a Principal of Morgan Stanley Dean Witter
Investment Management Inc., and William Auslander, a Vice
President of Morgan Stanley Dean Witter Investment
Management Inc., are all portfolio managers in the
Institutional Equity Group and have been the primary
portfolio managers since September 1998, in the case of
Messrs. Friedman and Auslander, and March 1998, in the case
of Ms. Johnson.

AMERICAN OPPORTUNITIES PORTFOLIO - Anita H. Kolleeny, Senior
Vice President of the Investment Manager, is the primary
portfolio manager of the Portfolio. Ms. Kolleeny has been
assisted by Michelle Kaufman since March 1998.

MID-CAP GROWTH PORTFOLIO - Peter Hermann, Vice President of
the Investment Manager, has been the primary portfolio
manager of the Portfolio since January 1998. Prior to
joining the Investment Manager in March 1994, Mr. Hermann
was a portfolio manager with The Bank of New York.

GLOBAL EQUITY PORTFOLIO - Mark Bavoso, Senior Vice President
of the Investment Manager, has been the primary portfolio
manager of Portfolio since August 1995 and has been a
portfolio manager with the Investment Manager for over five
years.

DEVELOPING GROWTH PORTFOLIO - Jayne S. Stevlingson, Vice
President of the Investment Manager, is the primary
portfolio manager of the Portfolio and has been assisted by
Armon Bar-Tur since May 1998. Ms. Stevlingson has been the
primary portfolio manager since the Portfolio's inception
and has been a portfolio manager with the Investment Manager
for over five years. Mr. Bar-Tur has been a portfolio
manager with the Investment Manager since October 1996;
prior to this, he was a research analyst with Merrill Lynch
Asset Management.

EMERGING MARKETS PORTFOLIO - Terence F. Mahony, Managing
Director of TCW, and Michael P. Reilly, Managing Director of
TCW, are the primary portfolio managers of the Portfolio.
Mr. Mahony has been a primary portfolio manager since July
1996; prior to this, he was Chief Investment Officer for
HSBC Asset Management. Mr. Reilly has been a primary
portfolio manager since December 1994 and has been a
portfolio manager with affiliates of TCW Group for over five
years.

45
<PAGE>
SHAREHOLDER INFORMATION

ICON PRICING FUND SHARES
- --------------------------------------------------------------------------------
The price of shares of each Portfolio called "net asset
value," is based on the value of its portfolio securities.

The net asset value for each Portfolio is determined once
daily at 4:00 p.m. Eastern time, on each day that the New
York Stock Exchange is open (or, on days when the New York
Stock Exchange closes prior to 4:00 p.m., at such earlier
time). Shares will not be priced on days that the New York
Stock Exchange is closed.

The value of each Portfolio's securities (other than the
Money Market Portfolio) is based on the securities' market
price when available. When a market price is not readily
available, including circumstances under which the
Investment Manager (or, if applicable, the Sub-Advisor)
determines that a security's market price is not accurate, a
portfolio security is valued at its fair value, as
determined under procedures established by the Fund's Board
of Trustees. In these cases, the applicable Portfolio's net
asset value will reflect certain portfolio securities' fair
value rather than their market price. In addition, if a
Portfolio holds securities primarily listed on foreign
exchanges, the value of the Portfolio's investment
securities may change on days when you will not be able to
purchase or sell Portfolio shares.

An exception to the general policy of using market prices
concerns each Portfolio's short-term debt portfolio
securities. Debt securities with remaining maturities of
sixty days or less at the time of purchase are valued at
amortized cost. However, if the cost does not reflect the
securities' market value, these securities will be valued at
their fair value.

The Money Market Portfolio utilizes amortized cost in
determining the value of its portfolio securities. The
amortized cost valuation method involves valuing a debt
obligation in reference to its acquisition cost rather than
market forces.

ICON DISTRIBUTIONS
- --------------------------------------------------------------------------------
Each Portfolio passes substantially all of its earnings from
income and capital gains along to its investors as
"distributions." Each Portfolio earns income from stocks and
interest from fixed-income investments. These amounts are
passed along to the appropriate Portfolio investors as
"income dividend distributions." Each Portfolio realizes
capital gains whenever it sells securities for a higher
price than it paid for them. These amounts may be passed
along as "capital gain distributions." Normally, for each of
the Portfolios (except for the Money Market Portfolio),
income dividends are distributed monthly and capital gains
are distributed annually in December. The Money Market
Portfolio declares income dividends, payable on each day the
New York Stock Exchange is open for business, of all of its
daily net income to shareholders of record as of the close
of business the preceding business day. The Investment
Manager does not anticipate that the Money Market Portfolio
will make significant capital gain distributions.

ICON TAX CONSEQUENCES
- --------------------------------------------------------------------------------
As with any investment, you should consider how your
investment in any Portfolio will be taxed. For information
concerning the tax consequences to holders of the underlying
variable annuity or variable life insurance contracts, see
the accompanying prospectus for the applicable contract.

46
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand each
Portfolio's financial performance for the past 5 fiscal years of the
Fund. Certain information reflects financial results for a single
Portfolio share. The total returns in the tables represent the rate an
investor would have earned or lost on an investment in each Portfolio
(assuming reinvestment of all dividends and distributions).

Further information about the performance of the Portfolios of the Fund
is contained in the Fund's ANNUAL REPORT TO SHAREHOLDERS, which may be
obtained without charge upon request to the Fund. See the discussion
under the caption "Charges and Other Deductions" in the accompanying
prospectus for either the Variable Annuity Contracts or the Variable
Life Contracts issued by the applicable insurance company for a
description of charges which are applicable. These charges are not
reflected in the financial highlights below. Inclusion of any of these
charges would reduce the total return figures for all periods shown.

This information has been audited by , whose report, along
with the Fund's financial statements, is included in the annual report,
which is available upon request.

47
<PAGE>
MORGAN STANLEY DEAN WITTER
SELECT DIMENSIONS INVESTMENT SERIES

Additional information about the Fund's investments is
available in the Fund's ANNUAL AND SEMI-ANNUAL REPORTS TO
SHAREHOLDERS. In the Fund's ANNUAL REPORT, you will find a
discussion of the market conditions and investment
strategies that significantly affected the Fund's
performance during its last fiscal year. The Fund's
STATEMENT OF ADDITIONAL INFORMATION also provides additional
information about the Fund. The STATEMENT OF ADDITIONAL
INFORMATION is incorporated herein by reference (legally is
part of this PROSPECTUS). For a free copy of any of these
documents, to request other information about the Fund, or
to make shareholder inquiries, please call:

(800) 869-NEWS

You also may obtain information about the Fund by calling
your Morgan Stanley Dean Witter Financial Advisor or by
visiting our Internet site at:

WWW.DEANWITTER.COM/FUNDS

Information about the Fund (including the STATEMENT OF
ADDITIONAL INFORMATION) can be viewed and copied at the
Securities and Exchange Commission's Public Reference Room
in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800)
SEC-0330. Reports and other information about the Fund are
available on the SEC's Internet site (www.sec.gov), and
copies of this information may be obtained, upon payment of
a duplicating fee, by writing the Public Reference Section
of the SEC, Washington, DC 20549-6009.

(MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES; INVESTMENT
COMPANY ACT FILE NO. 811-7185)
<PAGE>
MORGAN STANLEY DEAN WITTER
SELECT DIMENSIONS

STATEMENT OF ADDITIONAL INFORMATION INVESTMENT

MAY 1, 1999 SERIES

- ----------------------------------------------------------------------------

-THE MONEY MARKET PORTFOLIO

-THE NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO

-THE DIVERSIFIED INCOME PORTFOLIO

-THE BALANCED GROWTH PORTFOLIO

-THE UTILITIES PORTFOLIO

-THE DIVIDEND GROWTH PORTFOLIO

-THE VALUE-ADDED MARKET PORTFOLIO

-THE GROWTH PORTFOLIO

-THE AMERICAN OPPORTUNITIES PORTFOLIO

-THE MID-CAP GROWTH PORTFOLIO

-THE GLOBAL EQUITY PORTFOLIO

-THE DEVELOPING GROWTH PORTFOLIO

-THE EMERGING MARKETS PORTFOLIO

This STATEMENT OF ADDITIONAL INFORMATION is not a PROSPECTUS. The PROSPECTUS
(dated May 1, 1999) for the Morgan Stanley Dean Witter Select Dimensions
Investment Series (the "Fund") provides the basic information you should know
before allocating your investment under your variable annuity contract or your
variable life contract. The Prospectus may be obtained without charge from the
Fund at its address or telephone number listed below or from the Fund's
Distributor, Morgan Stanley Dean Witter Distributors Inc., or from Dean Witter
Reynolds at any of its branch offices.

Morgan Stanley Dean Witter
Select Dimensions Investment Series
Two World Trade Center
New York, New York 10048
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C> <C>
I. Fund History........................................................ 4
II. Description of the Fund and Its Investments and Risks............... 4
A. Classification................................................. 4
B. Eligible Purchasers............................................ 4
C. Investment Strategies and Risks................................ 4
D. Fund Policies/Investment Restrictions.......................... 16
III. Management of the Fund.............................................. 18
A. Board of Trustees.............................................. 18
B. Management Information......................................... 18
C. Compensation................................................... 24
IV. Control Persons and Principal Holders of Securities................. 26
V. Investment Management and Other Services............................ 26
A. Investment Manager and Sub-Advisors............................ 26
B. Principal Underwriter.......................................... 28
C. Services Provided by the Investment Manager and Fund Expenses
Paid by Third Parties.......................................... 29
D. Other Service Providers........................................ 30
VI. Brokerage Allocation and Other Practices............................ 30
A. Brokerage Transactions......................................... 30
B. Commissions.................................................... 31
C. Brokerage Selection............................................ 33
D. Directed Brokerage............................................. 34
E. Regular Broker-Dealers......................................... 34
VII. Capital Stock and Other Securities.................................. 34
VIII. Purchase, Redemption and Pricing of Shares.......................... 35
A. Purchase/Redemption of Shares.................................. 35
B. Offering Price................................................. 35
IX. Taxation of the Fund and Shareholders............................... 38
X. Underwriters........................................................ 39
XI. Calculation of Performance Data..................................... 39
XII. Financial Statements................................................ 41
</TABLE>

2
<PAGE>
GLOSSARY OF SELECTED DEFINED TERMS
- --------------------------------------------------------------------------------

The terms defined in this glossary are frequently used in this STATEMENT OF
ADDITIONAL INFORMATION (other terms used occasionally are defined in the text of
the document).

"CONTRACT"--Variable annuity contract and/or variable life insurance contract
issued by Hartford Life Insurance Company and Hartford Life and Annuity
Insurance Company.

"CONTRACT OWNERS"--Owners of a Contract.

"CUSTODIAN"--The Bank of New York for each Portfolio other than the EMERGING
MARKETS PORTFOLIO and grouping (1) of the DIVERSIFIED INCOME PORTFOLIO. The
Chase Manhattan Bank for the EMERGING MARKETS PORTFOLIO and grouping (1) of the
DIVERSIFIED INCOME PORTFOLIO.

"DEAN WITTER REYNOLDS"--Dean Witter Reynolds Inc., a wholly-owned broker-dealer
subsidiary of MSDW.

"DISTRIBUTOR"--Morgan Stanley Dean Witter Distributors Inc., a wholly-owned
broker-dealer subsidiary of MSDW.

"FUND"--Morgan Stanley Dean Witter Select Dimensions Investment Series, a
registered open-end series investment company currently consisting of thirteen
Portfolios.

"INVESTMENT MANAGER"--Morgan Stanley Dean Witter Advisors Inc., a wholly-owned
investment advisor subsidiary of MSDW.

"INDEPENDENT TRUSTEES"--Trustees who are not "interested persons" (as defined by
the Investment Company Act) of the Fund.

"MORGAN STANLEY & CO."--Morgan Stanley & Co. Incorporated, a wholly-owned
broker-dealer subsidiary of MSDW.

"MORGAN STANLEY DEAN WITTER FUNDS"--Registered investment companies (i) for
which the Investment Manager serves as the investment advisor; and (ii) that
hold themselves out to investors as related companies for investment and
investor services.

"MSDW"--Morgan Stanley Dean Witter & Co., a preeminent global financial services
firm.

"MSDW INVESTMENT MANAGEMENT"--Morgan Stanley Dean Witter Investment Management
Inc., a wholly-owned investment advisor subsidiary of MSDW.

"MSDW SERVICES COMPANY"--Morgan Stanley Dean Witter Services Company Inc., a
wholly-owned fund services subsidiary of the Investment Manager.

"PORTFOLIO(S)"--The separate investment portfolio(s) of the Fund.

"SUB-ADVISORS"--TCW Funds Management, Inc. (only applicable to the North
American Government Securities Portfolio and the Emerging Markets Portfolio) and
Morgan Stanley Asset Management Inc. (only applicable to the Growth Portfolio).

"TCW"--TCW Funds Management Inc.

"TRANSFER AGENT"--Morgan Stanley Dean Witter Trust FSB, a wholly-owned transfer
agent subsidiary of MSDW.

"TRUSTEES"--The Board of Trustees of the Fund.

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I. FUND HISTORY
- --------------------------------------------------------------------------------

The Fund was organized under the laws of the Commonwealth of Massachusetts
on June 2, 1994, under the name Dean Witter Select Dimensions Investment Series
and is a trust of the type commonly referred to as a Massachusetts Business
Trust. Effective March 2, 1998, the name of the BALANCED PORTFOLIO was changed
to the BALANCED GROWTH PORTFOLIO and the name of the CORE EQUITY PORTFOLIO was
changed to the GROWTH PORTFOLIO. Effective April 26, 1999, the American Value
Portfolio was changed to the American Opportunities Portfolio. Effective June
22, 1998, the Fund's name was changed to Morgan Stanley Dean Witter Select
Dimensions Investment Series.

II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------

A. CLASSIFICATION

The Fund is an open-end, diversified management investment company.

B. ELIGIBLE PURCHASERS

As discussed in the Prospectus, shares of the Fund are sold only to
particular insurance companies in connection with variable annuity and/or
variable life insurance contracts they issue. It is conceivable that in the
future it may become disadvantageous for both variable life insurance and
variable annuity contract separate accounts to invest in the same underlying
funds. Although neither the insurance companies nor the Fund currently foresee
any such disadvantage, the Trustees intend to monitor events in order to
identify any material irreconcilable conflict between the interest of variable
annuity contract owners and variable life insurance contract owners and to
determine what action, if any, should be taken in response thereto.

C. INVESTMENT STRATEGIES AND RISKS

The following discussion of each Portfolio's investment strategies and risks
should be read with the sections of the Fund's PROSPECTUS titled "Principal
Investment Strategies," "Principal Risks," "Additional Investment Strategy
Information" and "Additional Risk Information."

CONVERTIBLE SECURITIES. Each Portfolio, other than the MONEY MARKET
PORTFOLIO, the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the
VALUE-ADDED MARKET PORTFOLIO, may acquire through purchase fixed-income
securities which are convertible into common stock ("CONVERTIBLE SECURITIES").
In addition, each Portfolio, other than the MONEY MARKET PORTFOLIO, may acquire
convertible securities through a distribution by a security held in its
portfolio. Convertible securities rank senior to common stocks in a
corporation's capital structure and, therefore, entail less risk than the
corporation's common stock. The value of a convertible security is a function of
its "investment value" (its value as if it did not have a conversion privilege)
and its "conversion value" (the security's worth if it were to be exchanged for
the underlying security, at market value, pursuant to its conversion privilege).

To the extent that a convertible security's investment value is greater than
its conversion value, its price will be primarily a reflection of such
investment value and its price will be likely to increase when interest rates
fall and to decrease when interest rates rise, as with a fixed-income security
(the credit standing of the issuer and other factors may also have an effect on
the convertible security's value). If the conversion value exceeds the
investment value, the price of the convertible security will rise above its
investment value and, in addition, will sell at some premium over its conversion
value. (This premium represents the price investors are willing to pay for the
privilege of purchasing a fixed-income security with a possibility of capital
appreciation due to the conversion privilege.) At such times the price of the
convertible security will tend to fluctuate directly with the price of the
underlying equity security. Convertible securities may be purchased by a
Portfolio at varying price levels above their investment values and/ or their
conversion values in keeping with the Portfolio's objective.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the GLOBAL EQUITY
PORTFOLIO, the GROWTH PORTFOLIO, the DEVELOPING GROWTH PORTFOLIO, the AMERICAN
OPPORTUNITIES PORTFOLIO, the MID-CAP GROWTH PORTFOLIO, the UTILITIES

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PORTFOLIO and the EMERGING MARKETS PORTFOLIO may enter into forward foreign
currency exchange contracts ("FORWARD CONTRACTS") to facilitate settlement or in
an attempt to limit the effect of changes in the relationship between the U.S.
dollar and the foreign currency during the period between the date on which the
security is purchased or sold and the date on which payment is made or received.
In addition, the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO, the DIVERSIFIED
INCOME PORTFOLIO, the GLOBAL EQUITY PORTFOLIO and the EMERGING MARKETS PORTFOLIO
may enter into forward contracts as a hedge against fluctuations in future
foreign exchange rates. Each Portfolio may conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, or through entering into forward contracts
to purchase or sell foreign currencies. A forward contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. These contracts are traded
in the interbank market conducted directly between currency traders (usually
large commercial and investment banks) and their customers. Forward contracts
will only be entered into with United States banks and their foreign branches,
insurance companies or other dealers or foreign banks whose assets total $1
billion or more. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.

The Portfolios also may from time to time utilize forward contracts to hedge
a foreign security held in the portfolio or a security which pays out principal
tied to an exchange rate between the U.S. dollar and a foreign currency, against
a decline in value of the applicable foreign currency. They also may be used to
lock in the current exchange rate of the currency in which those securities
anticipated to be purchased are denominated. At times, the Portfolios may enter
into "cross-currency" hedging transactions involving currencies other than those
in which securities are held or proposed to be purchased are denominated.

A Portfolio will not enter into forward currency contracts or maintain a net
exposure to these contracts where the consummation of the contracts would
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the Portfolio's portfolio securities.

Although a Portfolio values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. It will, however, do so from time to time, and investors
should be aware of the costs of currency conversion. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on
the spread between the prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to the Portfolio
at one rate, while offering a lesser rate of exchange should the Portfolio
desire to resell that currency to the dealer.

A Portfolio may be limited in its ability to enter into hedging transactions
involving forward contracts by the Internal Revenue Code requirements relating
to qualification as a regulated investment company.

Forward contracts may limit gains on portfolio securities that could
otherwise be realized had they not been utilized and could result in losses. The
contracts also may increase the Portfolio's volatility and may involve a
significant amount of risk relative to the investment of cash.

OPTION AND FUTURES TRANSACTIONS. Each of the following Portfolios may
engage in transactions in listed and OTC options: the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the BALANCED GROWTH
PORTFOLIO, the UTILITIES PORTFOLIO, the AMERICAN OPPORTUNITIES PORTFOLIO, the
MID-CAP GROWTH PORTFOLIO, the GLOBAL EQUITY PORTFOLIO and the EMERGING MARKETS
PORTFOLIO. Listed options are issued or guaranteed by the exchange on which they
are traded or by a clearing corporation such as the Options Clearing Corporation
("OCC"). Ownership of a listed call option gives the Portfolio the right to buy
from the OCC (in the U.S.) or other clearing corporation or exchange, the
underlying security or currency covered by the option at the stated exercise
price (the price per unit of the underlying security) by filing an exercise
notice prior to the expiration date of the option. The writer (seller) of the
option would then have the obligation to sell to the OCC (in the U.S.) or other
clearing corporation or exchange, the underlying security or currency at that
exercise price prior to the expiration date of the option, regardless of its
then current market price. Ownership of a listed put option would give the
Portfolio the right to sell the underlying security or currency to the OCC (in
the U.S.) or other clearing corporation or exchange, at

5
<PAGE>
the stated exercise price. Upon notice of exercise of the put option, the writer
of the put would have the obligation to purchase the underlying security or
currency from the OCC (in the U.S.) or other clearing corporation or exchange,
at the exercise price.

COVERED CALL WRITING. Each of the above-named Portfolios (except the
BALANCED GROWTH PORTFOLIO) is permitted to write covered call options on
portfolio securities, without limit, and the BALANCED GROWTH PORTFOLIO is
permitted to write covered call options on portfolio securities in an amount not
exceeding, in the aggregate with covered put options, 5% of the value of its
total assets. Each of the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO, the
DIVERSIFIED INCOME PORTFOLIO, the GLOBAL EQUITY PORTFOLIO and the EMERGING
MARKETS PORTFOLIO may also write covered call options on the U.S. dollar and
foreign currencies in which its portfolio securities are denominated, without
limit.

The Portfolio will receive from the purchaser, in return for a call it has
written, a "premium;" I.E., the price of the option. Receipt of these premiums
may better enable the Portfolio to earn a higher level of current income than it
would earn from holding the underlying securities (or currencies) alone.
Moreover, the premium received will offset a portion of the potential loss
incurred by the Portfolio if the securities (or currencies) underlying the
option decline in value.

The Portfolio may be required, at any time during the option period, to
deliver the underlying security (or currency) against payment of the exercise
price on any calls it has written. This obligation is terminated upon the
expiration of the option period or at such earlier time when the writer effects
a closing purchase transaction. A closing purchase transaction is accomplished
by purchasing an option of the same series as the option previously written.
However, once the Portfolio has been assigned an exercise notice, the Portfolio
will be unable to effect a closing purchase transaction.

Options written by the Portfolio normally have expiration dates of from up
to eighteen months from the date written. The exercise price of a call option
may be below, equal to or above the current market value of the underlying
security at the time the option is written.

COVERED PUT WRITING. Each of the Portfolios that may engage in covered call
writing may engage in covered put writing. As a writer of a covered put option,
the Portfolio incurs an obligation to buy the security underlying the option
from the purchaser of the put, at the option's exercise price at any time during
the option period, at the purchaser's election. Through the writing of a put
option, the Portfolio would receive income from the premium paid by purchasers.
The potential gain on a covered put option is limited to the premium received on
the option (less the commissions paid on the transaction). At any time during
the option period, the Portfolio may be required to make payment of the exercise
price against delivery of the underlying security (or currency). The aggregate
value of the obligations underlying puts may not exceed 50% of the Portfolio's
net assets (in the case of the BALANCED GROWTH PORTFOLIO, 30% of the Portfolio's
total assets).

PURCHASING CALL AND PUT OPTIONS. Each of the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO and the BALANCED GROWTH
PORTFOLIO may purchase listed and OTC call and put options in amounts equaling
up to 5% of its total assets and, in the case of the EMERGING MARKETS PORTFOLIO,
up to 10% of its total assets. Each of the UTILITIES PORTFOLIO, the AMERICAN
OPPORTUNITIES PORTFOLIO, the MID-CAP GROWTH PORTFOLIO and the GLOBAL EQUITY
PORTFOLIO may purchase call and put options in an amount equaling up to 10% of
its total assets with a maximum of 5% of its assets invested in stock index
options. The BALANCED GROWTH PORTFOLIO may purchase put and call options on
stock indexes in an amount equaling up to 5% of its total assets. The purchase
of a call option would enable a Portfolio, in return for the premium paid, to
lock in a purchase price for a security or currency during the term of the
option. The purchase of a put option would enable a Portfolio, in return for a
premium paid, to lock in a price at which it may sell a security or currency
during the term of the option.

OPTIONS ON FOREIGN CURRENCIES. The NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the GLOBAL EQUITY PORTFOLIO and the
EMERGING MARKETS PORTFOLIO may purchase and write options on foreign currencies
for purposes similar to those involved with investing in forward foreign
currency exchange contracts.

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OTC OPTIONS. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with a
Portfolio. With OTC options, such variables as expiration date, exercise price
and premium will be agreed upon between a Portfolio and the transacting dealer,
without the intermediation of a third party such as the OCC. The Portfolios may
engage in OTC option transactions only with member banks of the Federal Reserve
Bank System or primary dealers in U.S. Government securities or with affiliates
of such banks or dealers.

RISKS OF OPTIONS TRANSACTIONS. The successful use of options depends on the
ability of the Investment Manager or, if applicable, the Sub-Advisors, to
forecast correctly interest rates, currency exchange rates and/or market
movements. If the market value of the portfolio securities (or the currencies in
which they are denominated) upon which call options have been written increases,
a Portfolio may receive a lower total return from the portion of its portfolio
upon which calls have been written than it would have had such calls not been
written. During the option period, the covered call writer has, in return for
the premium on the option, given up the opportunity for capital appreciation
above the exercise price should the market price of the underlying security (or
the value of its denominated currency) increase, but has retained the risk of
loss should the price of the underlying security (or the value of its
denominated currency) decline. The covered put writer also retains the risk of
loss should the market value of the underlying security decline below the
exercise price of the option less the premium received on the sale of the
option. In both cases, the writer has no control over the time when it may be
required to fulfill its obligation as a writer of the option. Prior to exercise
or expiration, an option position can only be terminated by entering into a
closing purchase or sale transaction. Once an option writer has received an
exercise notice, it cannot effect a closing purchase transaction in order to
terminate its obligation under the option and must deliver or receive the
underlying securities at the exercise price.

A Portfolio's ability to close out its position as a writer of an option is
dependent upon the existence of a liquid secondary market on option exchanges.
There is no assurance that such a market will exist, particularly in the case of
OTC options.

In the event of the bankruptcy of a broker through which a Portfolio engages
in transactions in options, the Portfolio could experience delays and/or losses
in liquidating open positions purchased or sold through the broker and/or incur
a loss of all or part of its margin deposits with the broker. In the case of OTC
options, if the transacting dealer fails to make or take delivery of the
securities underlying an option it has written, in accordance with the terms of
that option, due to insolvency or otherwise, the Portfolio would lose the
premium paid for the option as well as any anticipated benefit of the
transaction.

Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security which may be
written by a single investor, whether acting alone or in concert with others
(regardless of whether such options are written on the same or different
exchanges or are held or written on one or more accounts or through one or more
brokers). An exchange may order the liquidation of positions found to be in
violation of these limits and it may impose other sanctions or restrictions.
These position limits may restrict the number of listed options which the
Portfolios may write.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the option markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the option markets.

The markets in foreign currency options are relatively new and a Portfolio's
ability to establish and close out positions on such options is subject to the
maintenance of a liquid secondary market. There can be no assurance that a
liquid secondary market will exist for a particular option at any specific time.

The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of the
option position may vary with changes in the value of either or both currencies
and have no relationship to the investment merits of a foreign security. Because
foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having

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<PAGE>
to deal in an odd lot market (generally consisting of transactions of less than
$1 million) for the underlying foreign currencies at prices that are less
favorable than for round lots.

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information available is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(i.e., less than $1 million) where rates may be less favorable. The interbank
market in foreign currencies is a global, around-the-clock market. To the extent
that the U.S. options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that are not reflected in the options market.

STOCK INDEX OPTIONS. Each of the BALANCED GROWTH PORTFOLIO, the UTILITIES
PORTFOLIO, the AMERICAN OPPORTUNITIES PORTFOLIO, the MID-CAP GROWTH PORTFOLIO
and the GLOBAL EQUITY PORTFOLIO may invest in options on stock indexes. Options
on stock indexes are similar to options on stock except that, rather than the
right to take or make delivery of stock at a specified price, an option on a
stock index gives the holder the right to receive, upon exercise of the option,
an amount of cash if the closing level of the stock index upon which the option
is based is greater than, in the case of a call, or less than, in the case of a
put, the exercise price of the option. This amount of cash is equal to such
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount.

RISKS OF OPTIONS ON INDEXES. Because exercises of stock index options are
settled in cash, a Portfolio could not, if it wrote a call option, provide in
advance for its potential settlement obligations by acquiring and holding the
underlying securities. A call writer can offset some of the risk of its writing
position by holding a diversified portfolio of stocks similar to those on which
the underlying index is based. However, most investors cannot, as a practical
matter, acquire and hold a portfolio containing exactly the same stocks as the
underlying index, and, as a result, bear a risk that the value of the securities
held will vary from the value of the index. Even if an index call writer could
assemble a stock portfolio that exactly reproduced the composition of the
underlying index, the writer still would not be fully covered from a risk
standpoint because of the "timing risk" inherent in writing index options.

When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. As with
other kinds of options, the writer will not learn that it had been assigned
until the next business day, at the earliest. The time lag between exercise and
notice of assignment poses no risk for the writer of a covered call on a
specific underlying security, such as a common stock, because there the writer's
obligation is to deliver the underlying security, not to pay its value as of a
fixed time in the past. So long as the writer already owns the underlying
security, it can satisfy its settlement obligations by simply delivering it, and
the risk that its value may have declined since the exercise date is borne by
the exercising holder. In contrast, even if the writer of an index call holds
stocks that exactly match the composition of the underlying index, it will not
be able to satisfy its assignment obligations by delivering those stocks against
payment of the exercise price. Instead, it will be required to pay cash in an
amount based on the closing index value on the exercise date; and by the time it
learns that it has been assigned, the index may have declined, with a
corresponding decrease in the value of its stock portfolio. This "timing risk"
is an inherent limitation on the ability of index call writers to cover their
risk exposure by holding stock positions.

A holder of an index option who exercises it before the closing index value
for that day is available runs the risk that the level of the underlying index
may subsequently change. If a change causes the exercised option to fall
out-of-the-money, the exercising holder will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.

If dissemination of the current level of an underlying index is interrupted,
or if trading is interrupted in stocks accounting for a substantial portion of
the value of an index, the trading of options on that index

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will ordinarily be halted. If the trading of options on an underlying index is
halted, an exchange may impose restrictions prohibiting the exercise of such
options.

FUTURES CONTRACTS. Each of the NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the BALANCED GROWTH PORTFOLIO, the
UTILITIES PORTFOLIO, the AMERICAN OPPORTUNITIES PORTFOLIO, the MID-CAP GROWTH
PORTFOLIO, the GLOBAL EQUITY PORTFOLIO, and the EMERGING MARKETS PORTFOLIO may
purchase and sell interest rate and index futures contracts that are traded on
U.S. commodity exchanges on such underlying securities as U.S. Treasury bonds,
notes, bills and GNMA Certificates and, in the case of the NORTH AMERICAN
GOVERNMENT SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the GLOBAL
EQUITY PORTFOLIO and the EMERGING MARKETS PORTFOLIO, on any foreign government
fixed-income security and on various currencies, and with respect to each of the
eight listed Portfolios that may engage in futures transactions, on such indexes
of U.S. securities (and, if applicable, foreign securities) as may exist or come
into existence.

A futures contract purchaser incurs an obligation to take delivery of a
specified amount of the obligation underlying the contract at a specified time
in the future for a specified price. A seller of a futures contract incurs an
obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed upon price. The purchase of a futures
contract enables a Portfolio, during the term of the contract, to lock in a
price at which it may purchase a security or currency and protect against a rise
in prices pending purchase of portfolio securities. The sale of a futures
contract enables a Portfolio to lock in a price at which it may sell a security
or currency and protect against declines in the value of portfolio securities.

Although most futures contracts call for actual delivery or acceptance of
securities, the contracts usually are closed out before the settlement date
without the making or taking of delivery. Index futures contracts provide for
the delivery of an amount of cash equal to a specified dollar amount times the
difference between the index value at the open or close of the last trading day
of the contract and the futures contract price. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of the specific type of security (currency) and the same delivery date.
If the sale price exceeds the offsetting purchase price, the seller would be
paid the difference and would realize a gain. If the offsetting purchase price
exceeds the sale price, the seller would pay the difference and would realize a
loss. Similarly, a futures contract purchase is closed out by effecting a
futures contract sale for the same aggregate amount of the specific type of
security (currency) and the same delivery date. If the offsetting sale price
exceeds the purchase price, the purchaser would realize a gain, whereas if the
purchase price exceeds the offsetting sale price, the purchaser would realize a
loss. There is no assurance that a Portfolio will be able to enter into a
closing transaction.

MARGIN. If a Portfolio enters into a futures contract, it is initially
required to deposit an "initial margin" of cash or U.S. Government securities or
other liquid portfolio securities ranging from approximately 2% to 5% of the
contract amount. Initial margin requirements are established by the exchanges on
which futures contracts trade and may, from time to time, change. In addition,
brokers may establish margin deposit requirements in excess of those required by
the exchanges.

Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing of
funds by a broker's client but is, rather, a good faith deposit on the futures
contract which will be returned to the Portfolio upon the proper termination of
the futures contract. The margin deposits made are marked to market daily and
the Portfolio may be required to make subsequent deposits of cash or U.S.
Government securities, called "variation margin," which are reflective of price
fluctuations in the futures contract.

OPTIONS ON FUTURES CONTRACTS. Each of the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the BALANCED GROWTH
PORTFOLIO, the UTILITIES PORTFOLIO, the AMERICAN OPPORTUNITIES PORTFOLIO, the
MID-CAP GROWTH PORTFOLIO, the GLOBAL EQUITY PORTFOLIO and the EMERGING MARKETS
PORTFOLIO may purchase and write call and put options on futures contracts and
enter into closing transactions with respect to such options to terminate an
existing position. An option on a futures contract gives the purchaser the right
(in return for the premium paid), and the writer the obligation, to assume a
position in a futures contract (a long position if the option is a call and a
short position if the

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option is a put) at a specified exercise price at any time during the term of
the option. Upon exercise of the option, the delivery of the futures position by
the writer of the option to the holder of the option is accompanied by delivery
of the accumulated balance in the writer's futures margin account, which
represents the amount by which the market price of the futures contract at the
time of exercise exceeds, in the case of a call, or is less than, in the case of
a put, the exercise price of the option on the futures contract.

The writer of an option on a futures contract is required to deposit initial
and variation margin pursuant to requirements similar to those applicable to
futures contracts. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.

LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS ON FUTURES. A Portfolio may
not enter into futures contracts or purchase related options thereon if,
immediately thereafter, the amount committed to margin plus the amount paid for
premiums for unexpired options on futures contracts exceeds 5% of the value of
the Portfolio's total assets, after taking into account unrealized gains and
unrealized losses on such contracts into which it has entered; provided,
however, that in the case of an option that is in-the-money (the exercise price
of the call (put) option is less (more) than the market price of the underlying
security) at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%. However, there is no overall limitation on the percentage of
a Portfolio's net assets which may be subject to a hedge position.

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS. The prices
of securities and indexes subject to futures contracts (and thereby the futures
contract prices) may correlate imperfectly with the behavior of the cash prices
of the Portfolio's securities (and the currencies in which they are
denominated). Also, prices of futures contracts may not move in tandem with the
changes in prevailing interest rates, market movements and/or currency exchange
rates against which a Portfolio seeks a hedge. A correlation may also be
distorted (a) temporarily, by short-term traders' seeking to profit from the
difference between a contract or security price objective and their cost of
borrowed funds; (b) by investors in futures contracts electing to close out
their contracts through offsetting transactions rather than meet margin deposit
requirements; (c) by investors in futures contracts opting to make or take
delivery of underlying securities rather than engage in closing transactions,
thereby reducing liquidity of the futures market; and (d) temporarily, by
speculators who view the deposit requirements in the futures markets as less
onerous than margin requirements in the cash market. Due to the possibility of
price distortion in the futures market and because of the possible imperfect
correlation between movements in the prices of securities and movements in the
prices of futures contracts, a correct forecast of interest rate, currency
exchange rate and/or market movement trends by the Investment Manager (and/or if
applicable, the Sub-Advisors) may still not result in a successful hedging
transaction.

There is no assurance that a liquid secondary market will exist for futures
contracts and related options in which a Portfolio may invest. In the event a
liquid market does not exist, it may not be possible to close out a futures
position and, in the event of adverse price movements, the Portfolio would
continue to be required to make daily cash payments of variation margin. In
addition, limitations imposed by an exchange or board of trade on which futures
contracts are traded may compel or prevent the Portfolio from closing out a
contract which may result in reduced gain or increased loss to the Portfolio.
The absence of a liquid market in futures contracts might cause the Portfolio to
make or take delivery of the underlying securities (currencies) at a time when
it may be disadvantageous to do so.

Exchanges limit the amount by which the price of a futures contract may move
on any day. If the price moves equal the daily limit on successive days, then it
may prove impossible to liquidate a futures position until the daily limit moves
have ceased. In the event of adverse price movements, a Portfolio would continue
to be required to make daily cash payments of variation margin on open futures
positions. In these situations, if the Portfolio has insufficient cash, it may
have to sell portfolio securities to meet daily variation margin requirements at
a time when it may be disadvantageous to do so. In addition, the Portfolio may
be required to take or make delivery of the instruments underlying interest rate
futures contracts it holds at a time when it is disadvantageous to do so. The
inability to close out options and

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futures positions could also have an adverse impact on a Portfolio's ability to
effectively hedge its portfolio.

Futures contracts and options thereon which are purchased or sold on foreign
commodities exchanges may have greater price volatility than their U.S.
counterparts. Furthermore, foreign commodities exchanges may be less regulated
and under less governmental scrutiny than U.S. exchanges. Brokerage commissions,
clearing costs and other transaction costs may be higher on foreign exchanges.
Greater margin requirements may limit a Portfolio's ability to enter into
certain commodity transactions on foreign exchanges. Moreover, differences in
clearance and delivery requirements on foreign exchanges may occasion delays in
the settlement of a Portfolio's transactions effected on foreign exchanges.

In the event of the bankruptcy of a broker through which a Portfolio engages
in transactions in futures or options thereon, the Portfolio could experience
delays and/or losses in liquidating open positions purchased or sold through the
broker and/or incur a loss of all or part of its margin deposits with the
broker.

ADDITIONAL INFORMATION CONCERNING THE NORTH AMERICAN GOVERNMENT SECURITIES AND
DIVERSIFIED INCOME PORTFOLIOS

COLLATERALIZED MORTGAGE OBLIGATIONS. The Portfolio(s) may invest in CMOs -
collateralized mortgage obligations. CMOs are debt obligations collateralized by
mortgage loans or mortgage pass-through securities (collectively "Mortgage
Assets"). Payments of principal and interest on the Mortgage Assets and any
reinvestment income are used to make payments on the CMOs. CMOs are issued in
multiple classes. Each class has a specific fixed or floating coupon rate and a
stated maturity or final distribution date. The principal and interest on the
Mortgage Assets may be allocated among the classes in a number of different
ways. Certain classes will, as a result of the collection, have more predictable
cash flows than others. As a general matter, the more predictable the cash flow,
the lower the yield relative to other Mortgage Assets. The less predictable the
cash flow, the higher the yield and the greater the risk. The Portfolio(s) may
invest in any class of CMO.

Certain mortgage-backed securities in which the Portfolio(s) may invest
(E.G.,certain classes of CMOs) may increase or decrease in value substantially
with changes in interest rates and/or the rates of prepayment. In addition, if
the collateral securing CMOs or any third party guarantees are insufficient to
make payments, the Portfolio could sustain a loss.

In addition, the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the
DIVERSIFIED INCOME PORTFOLIO may invest in stripped mortgage-backed securities,
which are usually structured in two classes. One class entitles the holder to
receive all or most of the interest but little or none of the principal of a
pool of Mortgage Assets (the interest-only or "IO Class"), while the other class
entitles the holder to receive all or most of the principal but little or none
of the interest (the principal-only or "PO" Class). IOs tend to decrease in
value substantially if interest rates decline and prepayment rates become more
rapid. POs tend to decrease in value substantially if interest rates increase
and the rate of repayment decreases.

The NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO may invest up to 10% of
its assets in inverse floaters. An inverse floater has a coupon rate that moves
in the direction opposite to that of a designated interest rate index. Like most
other fixed income securities, the value of inverse floaters will decrease as
interest rates increase. They are more volatile, however, than most other fixed
income securities because the coupon rate on an inverse floater typically
changes at a multiple of the change in the relevant index rate. Thus, any rise
in the index rate (as a consequence of an increase in interest rates) causes a
correspondingly greater drop in the coupon rate of an inverse floater while a
drop in the index rate causes a correspondingly greater increase in the coupon
of an inverse floater. Some inverse floaters may also increase or decrease
substantially because of changes in the rate of prepayments.

ASSET-BACKED SECURITIES. Each of the NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO and the BALANCED GROWTH PORTFOLIO
may invest in Asset-Backed Securities. Asset-Backed Securities represent the
securitization techniques used to develop mortgage-backed securities are also
applied to a broad range of other assets. Various types of assets, primarily
automobile and

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<PAGE>
credit card receivables and home equity loans, are being securitized in
pass-through structures similar to the mortgage pass-through structures. These
types of securities are known as asset-backed securities. The Portfolio(s) may
invest in any type of asset-backed security.

Asset-backed securities have risk characteristics similar to mortgage-backed
securities. Like mortgage-backed securities, they generally decrease in value as
a result of interest rate increases, but may benefit less than other
fixed-income securities from declining interest rates, principally because of
prepayments. Also, as in the case of mortgage-backed securities, prepayments
generally increase during a period of declining interest rates although other
factors, such as changes in credit use and payment patterns, may also influence
prepayment rates. Asset-backed securities also involve the risk that various
federal and state consumer laws and other legal and economic factors may result
in the collateral backing the securities being insufficient to support payment
on the securities.

MONEY MARKET SECURITIES. In addition to the short-term fixed-income
securities in which the Portfolios may otherwise invest, the Portfolios may
invest in various money market securities for cash management purposes or when
assuming a temporary position, which among others may include commercial paper,
bank acceptances, bank obligations, corporate debt securities, certificates of
deposit, U.S. Government securities, obligations of savings institutions and
repurchase agreements. This section does not apply to the MONEY MARKET
PORTFOLIO, the BALANCED GROWTH PORTFOLIO and the DIVERSIFIED INCOME PORTFOLIO
whose money market instruments are described in the Prospectus.

U.S. GOVERNMENT SECURITIES. Obligations issued or guaranteed as to
principal and interest by the United States or its agencies (such as the
Export-Import Bank of the United States, Federal Housing Administration and
Government National Mortgage Association) or its instrumentalities (such as the
Federal Home Loan Bank, including Treasury bills, notes and bonds;

BANK OBLIGATIONS. Obligations (including certificates of deposit, time
deposits and bankers' acceptances) of banks subject to regulation by the U.S.
Government and having total assets of $1 billion or more, and instruments
secured by such obligations, not including obligations of foreign branches of
domestic banks except to the extent below;

EURODOLLAR CERTIFICATES OF DEPOSIT. Eurodollar certificates of deposit
issued by foreign branches of domestic banks having total assets of $1 billion
or more;

OBLIGATIONS OF SAVINGS INSTITUTIONS. Certificates of deposit of savings
banks and savings and loan association, having total assets of $1 billion or
more;

FULLY INSURED CERTIFICATES OF DEPOSIT. Certificates of deposit of banks and
savings institutions, having total assets of less than $1 billion, if the
principal amount of the obligation is federally insured by the Bank Insurance
Fund or the Savings Association Insurance Fund (each of which is administered by
the FDIC), limited to $100,000 principal amount per certificate and to 10% or
less of a Portfolio's total assets in all such obligations and in all illiquid
assets, in the aggregate; and

COMMERCIAL PAPER. Commercial paper rated within the two highest grades by
Standard & Poor's Corporation ("S&P") or the two highest grades by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, issued by a company having
an outstanding debt issue rated at least AA by S&P or Aa by Moody's.

REPURCHASE AGREEMENTS. Each Portfolio may invest in repurchase agreements.
When cash may be available for only a few days, it may be invested by a
Portfolio in repurchase agreements until such time as it may otherwise be
invested or used for payments of obligations of the Portfolio. These agreements,
which may be viewed as a type of secured lending by the Portfolio, typically
involve the acquisition by the Portfolio of debt securities from a selling
financial institution such as a bank, savings and loan association or
broker-dealer. The agreement provides that the Portfolio will sell back to the
institution, and that the institution will repurchase, the underlying security
serving as collateral at a specified price and at a fixed time in the future,
usually not more than seven days from the date of purchase. The collateral will
be marked-to-market daily to determine that the value of the collateral, as
specified in the agreement, does not decrease below the purchase price plus
accrued interest. If such decrease occurs, additional collateral will be
requested and, when received, added to the account to

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<PAGE>
maintain full collateralization. The Portfolio will accrue interest from the
institution until the time when the repurchase is to occur. Although this date
is deemed by the Portfolio to be the maturity date of a repurchase agreement,
the maturities of securities subject to repurchase agreements are not subject to
any limits.

While repurchase agreements involve certain risks not associated with direct
investments in debt securities, each Portfolio follows procedures designed to
minimize such risks. These procedures include effecting repurchase transactions
only with large, well-capitalized and well-established financial institutions
whose financial condition will be continually monitored by the Investment
Manager or, in the case of the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO,
the GROWTH PORTFOLIO and the EMERGING MARKETS PORTFOLIO, the Sub-Advisors,
subject to procedures established by the Trustees. In addition, as described
above, the value of the collateral underlying the repurchase agreement will be
at least equal to the repurchase price, including any accrued interest earned on
the repurchase agreement. In the case of the MONEY MARKET PORTFOLIO, such
collateral will consist entirely of securities that are direct obligations of,
or that are fully guaranteed as to principal and interest by, the United States
or any agency thereof, and/or certificates of deposit, bankers' acceptances
which are eligible for acceptance by a Federal Reserve Bank, and, if the seller
is a bank, mortgage related securities (as such term is defined in section
3(a)(41) of the Securities Exchange Act of 1934) that at the time the repurchase
agreement is entered into are rated in the highest rating category by the
"Requisite NRSROs" (as defined in Rule 2a-7 under the Investment Company Act of
1940). Additionally, in the case of the MONEY MARKET PORTFOLIO, the collateral
must qualify the repurchase agreement for preferential treatment under the
Federal Deposit Insurance Act of the Federal Bankruptcy Code. In the event of a
default or bankruptcy by a selling financial institution, the Portfolio will
seek to liquidate such collateral. However, the exercising of the Portfolio's
right to liquidate such collateral could involve certain costs or delays and, to
the extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Portfolio could suffer a
loss. It is the current policy of each Portfolio not to invest in repurchase
agreements that do not mature within seven days if any such investment, together
with any other illiquid assets held by the Portfolio, amounts to more than 10%
of its net assets in the case of the MONEY MARKET PORTFOLIO, and 15% of its net
assets in the case of each of the other Portfolios.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. Each of the MONEY MARKET
PORTFOLIO, the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the
DIVERSIFIED INCOME PORTFOLIO may use reverse repurchase agreements for purposes
of meeting redemptions or as part of its investment strategy. The NORTH AMERICAN
GOVERNMENT SECURITIES PORTFOLIO and the DIVERSIFIED INCOME PORTFOLIO may also
use dollar rolls as part of their investment strategy.

Reverse repurchase agreements involve sales by the Portfolio of assets
concurrently with an agreement by the Portfolio to repurchase the same assets at
a later date at a fixed price. Reverse repurchase agreements involve the risk
that the market value of the securities the Portfolio is obligated to purchase
under the agreement may decline below the repurchase price. In the event the
buyer of securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, the Portfolio's use of the proceeds of the agreement may be
restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Portfolio's obligation to repurchase the
securities.

Dollar rolls involve the Portfolio selling securities for delivery in the
current month and simultaneously contracting to repurchase substantially similar
(same type and coupon) securities on a specified future date. During the roll
period, the Portfolio will forgo principal and interest paid on the securities.
The Portfolio is compensated by the difference between the current sales price
and the lower forward price for the future purchase (often referred to as the
"drop") as well as by the interest earned on the cash proceeds of the initial
sale.

Reverse repurchase agreements and dollar rolls are speculative techniques
involving leverage and are considered borrowings by the Portfolio. With respect
to each of the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the
DIVERSIFIED INCOME PORTFOLIO, reverse repurchase agreements and dollar rolls are
not expected to exceed 25% of the Portfolio's total assets. With respect to the
MONEY MARKET

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<PAGE>
PORTFOLIO, reverse repurchase agreements (other than for purposes of meeting
redemptions) may not exceed 5% of the Portfolio's total assets.

INVESTMENT IN REAL ESTATE INVESTMENT TRUSTS. Each of the BALANCED GROWTH
PORTFOLIO, the UTILITIES PORTFOLIO, the DIVIDEND GROWTH PORTFOLIO, the GROWTH
PORTFOLIO, the AMERICAN OPPORTUNITIES PORTFOLIO, the MID-CAP GROWTH PORTFOLIO,
the GLOBAL EQUITY PORTFOLIO, the DEVELOPING GROWTH PORTFOLIO and the EMERGING
MARKETS PORTFOLIO may invest in real estate investment trusts, which pool
investors' funds for investments primarily in commercial real estate properties.
Investment in real estate investment trusts may be the most practical available
means for a Portfolio to invest in the real estate industry (the Fund is
prohibited from investing in real estate directly). As a shareholder in a real
estate investment trust, a Portfolio would bear its ratable share of the real
estate investment trust's expenses, including its advisory and administration
fees. At the same time the Portfolio would continue to pay its own investment
management fees and other expenses, as a result of which the Portfolio and its
shareholders in effect will be absorbing duplicate levels of fees with respect
to investments in real estate investment trusts. Real estate investment trusts
are not diversified and are subject to the risk of financing projects. They are
also subject to heavy cash flow dependency, defaults by borrowers or tenants,
self-liquidation, and the possibility of failing to qualify for tax-free status
under the Internal Revenue Code and failing to maintain exemption from the
Investment Company Act.

LENDING PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio
securities to brokers, dealers and other financial institutions, provided that
the loans are callable at any time by the Portfolio, and are at all times
secured by cash or cash equivalents, which are maintained in a segregated
account pursuant to applicable regulations and that are equal to at least 100%
of the market value, determined daily, of the loaned securities. The advantage
of these loans is that the Portfolio continues to receive the income on the
loaned securities while at the same time earning interest on the cash amounts
deposited as collateral, which will be invested in short-term obligations. A
Portfolio will not lend securities with a value exceeding 25% of the Portfolio's
total assets.

As with any extensions of credit, there are risks of delay in recovery and,
in some cases, even loss of rights in the collateral should the borrower of the
securities fail financially. However, these loans of portfolio securities will
only be made to firms deemed by the Portfolio's management to be creditworthy
and when the income which can be earned from such loans justifies the attendant
risks. Upon termination of the loan, the borrower is required to return the
securities to the Portfolio. Any gain or loss in the market price during the
loan period would inure to the Portfolio.

When voting or consent rights which accompany loaned securities pass to the
borrower, a Portfolio will follow the policy of calling the loaned securities,
to be delivered within one day after notice, to permit the exercise of the
rights if the matters involved would have a material effect on the Portfolio's
investment in the loaned securities. The Portfolio will pay reasonable finder's,
administrative and custodial fees in connection with a loan of its securities.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time, each Portfolio other than the VALUE-ADDED MARKET PORTFOLIO may
purchase securities on a when-issued or delayed delivery basis or may purchase
or sell securities on a forward commitment basis. When these transactions are
negotiated, the price is fixed at the time of the commitment, but delivery and
payment can take place a month or more after the date of commitment. While a
Portfolio will only purchase securities on a when-issued, delayed delivery or
forward commitment basis with the intention of acquiring the securities, the
Portfolio may sell the securities before the settlement date, if it is deemed
advisable. The securities so purchased or sold are subject to market fluctuation
and no interest or dividends accrue to the purchaser prior to the settlement
date.

At the time a Portfolio makes the commitment to purchase or sell securities
on a when-issued, delayed delivery or forward commitment basis, it will record
the transaction and thereafter reflect the value, each day, of such security
purchased, or if a sale, the proceeds to be received, in determining its net
asset value. At the time of delivery of the securities, their value may be more
or less than the purchase or sale price. An increase in the percentage of a
Portfolio's assets committed to the purchase of securities on a when-issued,
delayed delivery or forward commitment basis may increase the volatility of

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<PAGE>
its net asset value. The Portfolio will also establish a segregated account on
its books in which it will continually maintain cash or cash equivalents or
other liquid portfolio securities equal in value to commitments to purchase
securities on a when-issued, delayed delivery or forward commitment basis.

WHEN, AS AND IF ISSUED SECURITIES. Each Portfolio other than the MONEY
MARKET PORTFOLIO and the VALUE-ADDED MARKET PORTFOLIO may purchase securities on
a "when, as and if issued" basis under which the issuance of the security
depends upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization or debt restructuring. The commitment for the purchase
of any such security will not be recognized in a Portfolio until the Portfolio
determines that issuance of the security is probable. At that time, the
Portfolio will record the transaction and, in determining its net asset value,
will reflect the value of the security daily. At that time, the Portfolio will
also establish a segregated account on the Portfolio's books in which it will
maintain cash or cash equivalents or other liquid portfolio securities equal in
value to recognized commitments for such securities.

The value of a Portfolio's commitments to purchase the securities of any one
issuer, together with the value of all securities of such issuer owned by the
Portfolio, may not exceed 5% of the value of the Portfolio's total assets at the
time the initial commitment to purchase such securities is made. An increase in
the percentage of the Portfolio assets committed to the purchase of securities
on a "when, as and if issued" basis may increase the volatility of its net asset
value. A Portfolio may also sell securities on a "when, as and if issued" basis
provided that the issuance of the security will result automatically from the
exchange or conversion of a security owned by the Portfolio at the time of sale.

PRIVATE PLACEMENTS. Each of the NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the BALANCED GROWTH PORTFOLIO, the
UTILITIES PORTFOLIO, the DIVIDEND GROWTH PORTFOLIO, the GROWTH PORTFOLIO, the
AMERICAN OPPORTUNITIES PORTFOLIO, the MID-CAP GROWTH PORTFOLIO, the GLOBAL
EQUITY PORTFOLIO, the DEVELOPING GROWTH PORTFOLIO and the EMERGING MARKETS
PORTFOLIO may invest up to 15% of its total assets in securities which are
subject to restrictions on resale because they have not been registered under
the Securities Act of 1933 (the "SECURITIES ACT"), or which are otherwise not
readily marketable. (With respect to these eleven Portfolios, securities
eligible for resale pursuant to Rule 144A under the Securities Act, and
determined to be liquid pursuant to the procedures discussed in the following
paragraph, are not subject to the foregoing restriction.) Limitations on the
resale of these securities may have an adverse effect on their marketability,
and may prevent a Portfolio from disposing of them promptly at reasonable
prices. A Portfolio may have to bear the expense of registering the securities
for resale and the risk of substantial delays in effecting the registration.

Rule 144A permits the above-listed Portfolios to sell restricted securities
to qualified institutional buyers without limitation. The Investment Manager or,
in the case of the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO, the EMERGING
MARKETS PORTFOLIO and the GROWTH PORTFOLIO, the Sub-Advisors, pursuant to
procedures adopted by the Trustees, will make a determination as to the
liquidity of each restricted security purchased by a Portfolio. If a restricted
security is determined to be "liquid," the security will not be included within
the category "illiquid securities," which under current policy may not exceed,
as to each Portfolio (other than the MONEY MARKET PORTFOLIO), 15% of the
Portfolio's total assets and as to the MONEY MARKET PORTFOLIO, 10% of the
Portfolio's net assets, as more fully described under "Fund Policies/ Investment
Restrictions" below. However, investing in Rule 144A securities could have the
effect of increasing the level of Portfolio illiquidity to the extent the
Portfolio, at a particular point in time, may be unable to find qualified
institutional buyers interested in purchasing such securities.

WARRANTS. Each Portfolio, other than the MONEY MARKET PORTFOLIO, the NORTH
AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the VALUE-ADDED MARKET PORTFOLIO,
may acquire warrants attached to other securities. In addition, each Portfolio
other than the MONEY MARKET PORTFOLIO, the NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, the UTILITIES PORTFOLIO AND THE
VALUE-ADDED MARKET PORTFOLIO may invest up to 5% of its assets in warrants not
attached to other securities with a limit of up to 2 % of its total assets in
warrants that are not listed on the New York or American Stock Exchange. A
warrant is, in effect, an option to purchase equity securities at a specific
price, generally valid for a specific period of time, and has no voting rights,
pays no dividends and has no rights with respect to the corporation issuing it.

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YEAR 2000. The investment management services provided to the Portfolios by
the Investment Manager, and, in the case of the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, the EMERGING MARKETS PORTFOLIO and the GROWTH PORTFOLIO,
by the Sub-Advisors, and the services provided to shareholders by the
Distributor and the Transfer Agent depend on the smooth functioning of their
computer systems. Many computer software systems in use today cannot recognize
the year 2000, but revert to 1900 or some other date, due to the manner in which
dates were encoded and calculated. That failure could have a negative impact on
the handling of securities trades, pricing and account services. The Investment
Manager, the Sub-Advisors, the Distributor and the Transfer Agent have been
actively working on necessary changes to their own computer systems to prepare
for the year 2000 and expect that their systems will be adapted before that
date, but there can be no assurance that they will be successful, or that
interaction with other non-complying computer systems will not impair their
services at that time.

In addition, it is possible that the markets for securities in which the
Portfolios invest may be detrimentally affected by computer failures throughout
the financial services industry beginning January 1, 2000. Improperly
functioning trading systems may result in settlement problems and liquidity
issues. In addition, corporate and governmental data processing errors may
result in production problems for individual companies and overall economic
uncertainties. Earnings of individual issuers will be affected by remediation
costs, which may be substantial and may be reported inconsistently in U.S. and
foreign financial statements. Accordingly, the Portfolios' investments may be
adversely affected.

REITS. REITs pool investors' funds for investments primarily in commercial
real estate properties. Like mutual funds, REITs have expenses, including
advisory and administration fees that are paid by its shareholders. As a result,
you will absorb duplicate levels of fees when the Fund invests in REITs. The
performance of any Fund REIT holdings ultimately depends on the types of real
property in which the REITs invest and how well the property is managed. A
general downturn in real estate values also can hurt REIT performance.

D. FUND POLICIES/INVESTMENT RESTRICTIONS

The investment objectives, policies and restrictions listed below have been
adopted by the Fund as fundamental policies of the Portfolios except as
otherwise indicated. Under the Investment Company Act of 1940 (the "INVESTMENT
COMPANY ACT"), a fundamental policy of a Portfolio may not be changed without
the vote of a majority of the outstanding voting securities of the Portfolio.
The Investment Company Act defines a majority as the lesser of (a) 67% or more
of the shares of a Portfolio present at a meeting of Fund shareholders, if the
holders of 50% of the outstanding shares of the Portfolio are present or
represented by proxy; or (b) more than 50% of the outstanding shares of the
Portfolio. For purposes of the following restrictions: (i) all percentage
limitations apply immediately after a purchase or initial investment; and (ii)
any subsequent change in any applicable percentage resulting from market
fluctuations or other changes in total or net assets does not require
elimination of any security from the portfolio.

RESTRICTIONS APPLICABLE TO ALL PORTFOLIOS

Each Portfolio may not:

1. With the exception of the MONEY MARKET PORTFOLIO, as to 75% of its total
assets, invest more than 5% of the value of its total assets in the securities
of any one issuer (other than obligations issued or guaranteed by the United
States Government, its agencies or instrumentalities).

2. As to 75% of its total assets, purchase more than 10% of all outstanding
voting securities or any class of securities of any one issuer. (All of the
Portfolios of the Fund may, collectively, purchase more than 10% of all
outstanding voting securities or any class of securities of any one issuer).

3. With the exception of the MONEY MARKET PORTFOLIO and the UTILITIES
PORTFOLIO, invest more than 25% or more of the value of its total assets in
securities of issuers in any one industry. This restriction does not apply to
obligations issued or guaranteed by the United States Government or its agencies
or instrumentalities or, in the case of the NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO and the DIVERSIFIED INCOME PORTFOLIO, to Mortgage-Backed Securities.

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4. With the exception of the MONEY MARKET PORTFOLIO, invest more than 5% of
its total assets in securities of issuers having a record, together with
predecessors, of less than three years of continuous operation. This restriction
shall not apply to any obligation issued or guaranteed by the United States
Government, its agencies or instrumentalities or, in the case of the NORTH
AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the DIVERSIFIED INCOME PORTFOLIO,
to Mortgage-Backed Securities and Asset-Backed Securities.

5. Borrow money (except insofar as the MONEY MARKET PORTFOLIO, the NORTH
AMERICAN GOVERNMENT SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO and
the BALANCED GROWTH PORTFOLIO may be deemed to have borrowed by entrance into a
reverse repurchase agreement or the NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO and the BALANCED GROWTH PORTFOLIO
may be deemed to have borrowed by entrance into a dollar roll), except from
banks for temporary or emergency purposes or to meet redemption requests which
might otherwise require the untimely disposition of securities, and, in the case
of Portfolios other than the DEVELOPING GROWTH PORTFOLIO, not for investment or
leveraging, provided that borrowing in the aggregate (other than, in the case of
the DEVELOPING GROWTH PORTFOLIO, for investment or leveraging) may not exceed 5%
(taken at the lower of cost or current value) of the value of the Portfolio's
total assets (not including the amount borrowed).

6. Purchase or sell real estate or interests therein (including limited
partnership interests), although the Portfolio may purchase securities of
issuers which engage in real estate operations and securities secured by real
estate or interests therein (as such, in case of default of such securities, a
Portfolio may hold the real estate securing such security).

7. Purchase oil, gas or other mineral leases, rights or royalty contracts
or exploration or development programs, except that the Portfolios may invest in
the securities of companies which operate, invest in, or sponsor such programs.

8. Pledge its assets or assign or otherwise encumber them except: (a) to
secure borrowings effected within the limitations set forth in restriction 5
above; or (b) in the case of the Developing Growth Portfolio, to secure
borrowings effected in connection with leverage. For the purpose of this
restriction, collateral arrangements with respect to initial or variation margin
for futures are not deemed to be pledges of assets.

9. Issue senior securities as defined in the [Investment Company Act]
except insofar as the Portfolio may be deemed to have issued a senior security
by reason of: (a) entering into any repurchase agreement or reverse repurchase
agreement; (b) purchasing any securities on a when-issued or delayed delivery
basis; (c) purchasing or selling any financial futures contracts or options
thereon; (d) borrowing money in accordance with restrictions described above; or
(e) lending portfolio securities.

10. Make loans of money or securities, except: (a) by the purchase of
portfolio securities in which the Portfolio may invest consistent with its
investment objective and policies; (b) by investing in repurchase agreements; or
(c) by lending its portfolio securities; or (d) in the case of Emerging Markets
Portfolio, by investing in loan participations and loan assignments.

11. Make short sales of securities.

12. Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of portfolio securities. The deposit or payment by
the Portfolio of initial or variation margin in connection with futures
contracts or related options thereon is not considered the purchase of a
security on margin.

13. Purchase or sell commodities or commodities contracts except that the
Portfolios may purchase or sell futures contracts or options on futures.

14. Engage in the underwriting of securities, except insofar as the
Portfolio may be deemed an underwriter under the Securities Act of 1933 in
disposing of a portfolio security. (The Portfolios may invest in restricted
securities subject to fundamental (in the case of the MONEY MARKET PORTFOLIO)
and non-fundamental (in the case of the other Portfolios) limitations applicable
to each Portfolio).

15. Invest for the purpose of exercising control or management of any other
issuer.

17
<PAGE>
RESTRICTIONS APPLICABLE TO THE MONEY MARKET PORTFOLIO ONLY

The MONEY MARKET PORTFOLIO may not:

1. As to 75% of its total assets, purchase any securities, other than
obligations of the U.S. Government or its agencies or instrumentalities, if,
immediately after such purchase, more than 5% of the value of its total assets
would be invested in securities of any one issuer. However, as a non-fundamental
policy, the MONEY MARKET PORTFOLIO will not invest more than 10% of its total
assets in the securities of any one issuer. Furthermore, pursuant to current
regulatory requirements, the MONEY MARKET PORTFOLIO may only invest more than 5%
of its total assets in the securities of a single issuer (and only with respect
to one issuer at a time) for a period of not more than three business days and
only if the securities have received the highest quality rating by at least two
NRSROs).

2. Purchase any securities, other than obligations of domestic banks or of
the U.S. Government, or its agencies or instrumentalities, if, immediately after
such purchase, more than 25% of the value of the MONEY MARKET PORTFOLIO'S total
assets would be invested in the securities of issuers in the same industry;
however, there is no limitation as to investments in domestic bank obligations
or in obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

In addition, as a non-fundamental policy, each Portfolio of the Fund may not
invest more than 15% (10% in the case of the MONEY MARKET PORTFOLIO) of its
total assets in "illiquid securities" (securities for which market quotations
are not readily available) and repurchase agreements which have a maturity of
longer than seven days. For purposes of this policy, securities eligible for
sale pursuant to Rule 144A under the Securities Act are not considered liquid if
they are determined to be liquid under procedures adopted by the Trustees of the
Fund. As another non-fundamental policy, each Portfolio of the Fund may not
purchase securities of other investment companies, except in connection with a
merger, consolidation, reorganization or acquisition of assets or, in the case
of the GLOBAL EQUITY PORTFOLIO, and the EMERGING MARKETS PORTFOLIO, in
accordance with the provisions of Section 12(d) of the Investment Company Act
and any Rules promulgated thereunder (E.G., each of these Portfolios may not
invest in more than 3% of the outstanding voting securities of any investment
company). For this purpose, Mortgage-Backed Securities and Asset-Backed
Securities are not deemed to be investment companies.

If a percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in value of portfolio
securities or amount of total or net assets will not be considered a violation
of any of the foregoing restrictions.

III. MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

A. BOARD OF TRUSTEES

The Trustees oversee the management of the Portfolios but do not manage each
Portfolio. The Trustees review various services provided by or under the
direction of the Investment Manager to ensure that each Portfolio's general
investment policies and programs are properly carried out. The Trustees also
conduct their review to ensure that administrative services are provided to each
Portfolio in a satisfactory manner.

Under state law, the duties of the Trustees are generally characterized as a
duty of loyalty and a duty of care. The duty of loyalty requires a Trustee to
exercise his or her powers in the interest of the Fund and each Portfolio and
not the Trustee's own interest or the interest of another person or
organization. A Trustee satisfies his or her duty of care by acting in good
faith with the care of an ordinarily prudent person and in a manner the Trustee
reasonably believes to be in the best interest of the Fund and each Portfolio
and its shareholders.

B. MANAGEMENT INFORMATION

TRUSTEES AND OFFICERS. The Board of the Fund consists of eight (8)
Trustees. These same individuals also serve as directors or trustees for all of
the Morgan Stanley Dean Witter Funds. Six Trustees (75% of the total number)
have no affiliation or business connection with the Investment Manager or any of
its affiliated persons and do not own any stock or other securities issued by
the Investment Manager's parent

18
<PAGE>
company, MSDW. These are the "non-interested" or "independent" Trustees. The
other two Trustees (the "MANAGEMENT TRUSTEES") are affiliated with the
Investment Manager. All of the Independent Trustees also serve as Independent
Trustees of "Discover Brokerage Index Series," a mutual fund for which the
Investment Manager is the investment advisor. Three of the six Independent
Trustees are also Independent Trustees of certain other mutual funds, referred
to as the "TCW/DW Funds," for which MSDW Services Company is the manager and TCW
is the investment adviser.

The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Investment Manager, and with the 84 Morgan Stanley Dean Witter Funds, the 11
TCW/DW Funds and Discover Brokerage Index Series are shown below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Michael Bozic (58) Vice Chairman of Kmart Corporation (since December, 1998); Director or
Trustee Trustee of the Morgan Stanley Dean Witter Funds; Trustee of Discover
c/o Kmart Corporation Brokerage Index Series; formerly Chairman and Chief Executive Officer
3100 West Big Beaver Road of Levitz Furniture Corporation (November, 1995-November, 1998) and
Troy, Michigan President and Chief Executive Officer of Hills Department Stores (May,
1991-July, 1995); formerly variously Chairman, Chief Executive Officer,
President and Chief Operating Officer (1987-1991) of the Sears Mer-
chandise Group of Sears, Roebuck and Co.; Director of Eaglemark
Financial Services, Inc. and Weirton Steel Corporation.
Charles A. Fiumefreddo* (65) Chairman, Director or Trustee, President and Chief Executive Officer of
Chairman of the Board, the Morgan Stanley Dean Witter Funds; Chairman, Chief Executive Officer
President, Chief Executive and Trustee of the TCW/DW Funds; Trustee of Discover Brokerage Index
Officer and Trustee Series; formerly Chairman, Chief Executive Officer and Director of the
Two World Trade Center Investment Manager, the Distributor and MSDW Services Company;
New York, New York Executive Vice President and Director of Dean Witter Reynolds; Chairman
and Director of the Transfer Agent; formerly Director and/or officer of
various MSDW subsidiaries (until June, 1998).
Edwin J. Garn (66) Director or Trustee of the Morgan Stanley Dean Witter Funds; Trustee of
Trustee Discover Brokerage Index Series; formerly United States Senator
c/o Huntsman Corporation (R-Utah)(1974-1992) and Chairman, Senate Banking Committee (1980-1986);
500 Huntsman Way formerly Mayor of Salt Lake City, Utah (1971-1974); formerly Astronaut,
Salt Lake City, Utah Space Shuttle Discovery (April 12-19, 1985); Vice Chairman, Huntsman
Corporation; Director of Franklin Covey (time management systems), John
Alden Financial Corp. (health insurance), United Space Alliance (joint
venture between Lockheed Martin and the Boeing Company) and Nuskin Asia
Pacific (multilevel marketing); member of the board of various civic
and charitable organizations.
Wayne E. Hedien (65) Retired; Director or Trustee of the Morgan Stanley Dean Witter Funds;
Trustee Trustee of Discover Brokerage Index Series; Director of The PMI Group,
c/o Gordon Altman Butowsky Inc. (private mortgage insurance); Trustee and Vice Chairman of The
Weitzen Shalov & Wein Field Museum of Natural History; formerly associated with the Allstate
Counsel to the Companies (1966-1994), most recently as Chairman of The Allstate
Independent Trustees Corporation (March, 1993-December, 1994) and Chairman and Chief
114 West 47th Street Executive Officer of its wholly-owned subsidiary, Allstate Insurance
New York, New York Company (July, 1989-December, 1994); director of various other busi-
ness and charitable organizations.
</TABLE>

19
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Dr. Manuel H. Johnson (50) Senior Partner, Johnson Smick International, Inc., a consulting firm;
Trustee Co-Chairman and a founder of the Group of Seven Council (G7C), an
c/o Johnson Smick international economic commission; Director or Trustee of the Morgan
International, Inc. Stanley Dean Witter Funds; Trustee of the TCW/DW Funds; Trustee of
1133 Connecticut Avenue, N.W. Discover Brokerage Index Series; Director of NASDAQ (since June, 1995);
Washington, D.C. Director of Greenwich Capital Markets, Inc. (broker-dealer) and NVR,
Inc. (home construction); Chairman and Trustee of the Financial
Accounting Foundation (oversight organization of the Financial
Accounting Standards Board); formerly Vice Chairman of the Board of
Governors of the Federal Reserve System (1986-1990) and Assistant
Secretary of the U.S. Treasury.
Michael E. Nugent (62) General Partner, Triumph Capital, L.P., a private investment part-
Trustee nership; Director or Trustee of the Morgan Stanley Dean Witter Funds;
c/o Triumph Capital, L.P. Trustee of the TCW/DW Funds; Trustee of Discover Brokerage Index
237 Park Avenue Series; formerly Vice President, Bankers Trust Company and BT Capital
New York, New York Corporation (1984-1988); director of various business organizations.
Philip J. Purcell* (55) Chairman of the Board of Directors and Chief Executive Officer of MSDW,
Trustee Dean Witter Reynolds and Novus Credit Services Inc.; Director of the
1585 Broadway Distributor; Director or Trustee of the Morgan Stanley Dean Witter
New York, New York Funds; Trustee of Discover Brokerage Index Series; Director and/or
officer of various MSDW subsidiaries.
John L. Schroeder (68) Retired; Director or Trustee of the Morgan Stanley Dean Witter Funds;
Trustee Trustee of the TCW/DW Funds; Trustee of Discover Brokerage Index
c/o Gordon Altman Butowsky Series; Director of Citizens Utilities Company; formerly Executive Vice
Weitzen Shalov & Wein President and Chief Investment Officer of the Home Insurance Company
Counsel to the Independent (August, 1991-September, 1995).
Trustees
114 West 47th Street
New York, New York
Barry Fink (44) Senior Vice President (since March, 1997) and Secretary and General
Vice President, Counsel (since February, 1997) and Director (since July, 1998) of the
Secretary and General Counsel Investment Manager and MSDW Services Company; Senior Vice President
Two World Trade Center (since March, 1997) and Assistant Secretary and Assistant General
New York, New York Counsel (since February, 1997) of the Distributor; Assistant Secretary
of Dean Witter Reynolds (since August, 1996); Vice President, Secretary
and General Counsel of the Morgan Stanley Dean Witter Funds and the
TCW/ DW Funds (since February, 1997); Vice President, Secretary and
General Counsel of Discover Brokerage Index Series; previously First
Vice President (June, 1993-February, 1997), Vice President and
Assistant Secretary and Assistant General Counsel of the Investment
Manager and MSDW Services Company and Assistant Secretary of the Morgan
Stanley Dean Witter Funds and the TCW/DW Funds.
</TABLE>

20
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Peter M. Avelar (40) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Mark Bavoso (38) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Edward F. Gaylor (57) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Rajesh K. Gupta (38) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Peter Hermann (39) Vice President of the Investment Manager (since May, 1995) and
Vice President portfolio manager with the Investment Manager (since March, 1994); Vice
Two World Trade Center President of various Morgan Stanley Dean Witter Funds.
New York, New York
Kenton J. Hinchliffe (54) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Michelle Kaufman (34) Vice President of the Investment Manager (since June, 1997) and
Vice President portfolio manager with the Investment Manager (since September, 1993);
Two World Trade Center Vice President or Assistant Vice President of various Morgan Stanley
New York, New York Dean Witter Funds; previously Assistant Vice President of the
Investment Manager (May, 1995-June, 1997).
Anita H. Kolleeny (43) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Paula LaCosta (47) Vice President of the Investment Manager; Vice President of various
Vice President Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Jonathan R. Page (52) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Rochelle G. Siegel (50) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
</TABLE>

21
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Anne Pickrell (45) Vice President of the Investment Manager (since April, 1996); Vice
Vice President President of various Morgan Stanley Dean Witter Funds; previously
Two World Trade Center Assistant Vice President of the Investment Manager.
New York, New York
Peter J. Seeley (49) Vice President of the Investment Manager (since April, 1996); Vice
Vice President President of various Morgan Stanley Dean Witter Funds; previously
Two World Trade Center Senior Fixed-Income Portfolio Manager with the Investment Manager
New York, New York (July, 1994-April, 1996) and prior thereto Senior Vice President of
Nikko Capital Management (October, 1992-June, 1994).
Paul D. Vance (63) Senior Vice President of the Investment Manager; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Jayne Stevlingson (39) Vice President of the Investment Manager; Vice President of various
Vice President Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York
Philip A. Barach (46) Managing director of TCW Funds Management, Inc.; Managing Director,
Vice President Mortgage-Backed Securities of Trust Company of the West and TCW Asset
865 South Figueroa Street Management Company; Vice President of various TCW/DW Funds.
Los Angeles, California
James M. Goldberg (53) Managing Director of TCW Funds Management, Inc.; Managing Director and
Vice President Chairman of the Fixed Income Policy Committee of Trust Company of the
865 South Figueroa Street West and TCW Asset Management Company; Vice President of various TCW/DW
Los Angeles, California Funds.
Jeffrey E. Gundlach (39) Group Managing Director of TCW Funds Management, Inc.; Managing
Vice President Director, Mortgage-Backed Securities of Trust Company of the West and
865 South Figueroa Street TCW Asset Management Company; Vice President of various TCW/DW Funds.
Los Angeles, California
Frederick E. Horton (40) Managing Director of TCW; previously Vice President of various TCW/DW
Vice President Funds.
865 South Figueroa Street
Los Angeles, California
Terence F. Mahony (56) Managing Director and Head of Emerging Markets Equities of TCW (since
Vice President April, 1996); previously Chief Investment Officer for Global Emerging
865 South Figueroa Street Markets at HSBC Asset Management (September, 1993-April, 1996).
Los Angeles, California
Michael P. Reilly (35) Managing Director of TCW; Vice President of various TCW/DW Funds.
Vice President
865 South Figueroa Street
Los Angeles, California
</TABLE>

22
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND
AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Thomas F. Caloia (53) First Vice President and Assistant Treasurer of the Investment Manager
Treasurer and MSDW Services Company; Treasurer of the Morgan Stanley Dean Witter
Two World Trade Center Funds, the TCW/DW Funds and Discover Brokerage Index Series.
New York, New York
</TABLE>

- -------------------
* Denotes Trustees who are "interested persons" of the Fund, as defined in the
Investment Company Act.

In addition, MITCHELL M. MERIN, President and Chief Operating Officer of
Asset Management of MSDW, President, Chief Executive Officer and Director of the
Investment Manager and MSDW Services Company, Chairman and Director of the
Distributor and the Transfer Agent, Executive Vice President and Director of
Dean Witter Reynolds, and Director of various MSDW subsidiaries, RONALD E.
ROBISON, Executive Vice President and Chief Administrative Officer and Director
of the Investment Manager and MSDW Services Company, ROBERT S. GIAMBRONE, Senior
Vice President of the Investment Manager, MSDW Services Company, the Distributor
and the Transfer Agent and Director of the Transfer Agent, and JOSEPH J.
MCALINDEN, Executive Vice President and Chief Investment Officer of the
Investment Manager and Director of the Transfer Agent, are Vice Presidents of
the Fund.

In addition, FRANK BRUTTOMESSO, MARILYN K. CRANNEY, LOU ANNE D. MCINNIS,
CARSTEN OTTO AND RUTH ROSSI, First Vice Presidents and Assistant General
Counsels of the Investment Manager and MSDW Services Company, and TODD LEBO,
Vice President and Assistant General Counsel of the Investment Manager and MSDW
Services Company, are Assistant Secretaries of the Fund.

INDEPENDENT TRUSTEES AND THE COMMITTEES. Law and regulation establish both
general guidelines and specific duties for the Independent Trustees. The Morgan
Stanley Dean Witter Funds seek as Independent Trustees individuals of
distinction and experience in business and finance, government service or
academia; these are people whose advice and counsel are in demand by others and
for whom there is often competition. To accept a position on the Funds' Boards,
such individuals may reject other attractive assignments because the Funds make
substantial demands on their time. Indeed, by serving on the Funds' Boards,
certain Trustees who would otherwise be qualified and in demand to serve on bank
boards would be prohibited by law from doing so. All of the Independent Trustees
serve as members of the Audit Committee. In addition, three of the Trustees,
including two Independent Trustees, serve as members of the Derivatives
Committee and the Insurance Committee.

The Independent Trustees are charged with recommending to the full Board
approval of man-agement, advisory and administration contracts and distribution
and underwriting agreements; continually reviewing Portfolio performance;
checking on the pricing of portfolio securities, brokerage commissions, transfer
agent costs and performance, and trading among Funds in the same complex; and
approving fidelity bond and related insurance coverage and allocations, as well
as other matters that arise from time to time.

The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of the services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
Board.

The Board of each Fund has a Derivatives Committee to approve parameters for
and monitor the activities of the Fund with respect to derivative investments,
if any, made by the Portfolios.

Finally, the Board of each Fund has formed an Insurance Committee to review
and monitor the insurance coverage maintained by the Fund.

23
<PAGE>
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL MORGAN
STANLEY DEAN WITTER FUNDS. The Independent Trustees and the Funds' management
believe that having the same Independent Trustees for each of the Morgan Stanley
Dean Witter Funds avoids the duplication of effort that would arise from having
different groups of individuals serving as Independent Trustees for each of the
Funds or even of sub-groups of Funds. They believe that having the same
individuals serve as Independent Trustees of all the Funds tends to increase
their knowledge and expertise regarding matters which affect the Fund complex
generally and enhances their ability to negotiate on behalf of each Fund with
the Fund's service providers. This arrangement also precludes the possibility of
separate groups of Independent Trustees arriving at conflicting decisions
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent Trustees
serve on all Fund Boards enhances the ability of each Fund to obtain, at modest
cost to each separate Fund, the services of Independent Trustees, of the
caliber, experience and business acumen of the individuals who serve as
Independent Trustees of the Morgan Stanley Dean Witter Funds.

TRUSTEE AND OFFICER INDEMNIFICATION. The Fund's Declaration of Trust
provides that no Trustee, officer, employee or agent of the Fund is liable to
the Fund or to a shareholder, nor is any Trustee, officer, employee or agent
liable to any third persons in connection with the affairs of the Fund, except
as such liability may arise from his/her or its own bad faith, willful
misfeasance, gross negligence or reckless disregard of his/her or its duties. It
also provides that all third persons shall look solely to the Fund property for
satisfaction of claims arising in connection with the affairs of the Fund. With
the exceptions stated, the Declaration of Trust provides that a Trustee,
officer, employee or agent is entitled to be indemnified against all liability
in connection with the affairs of the Fund.

C. COMPENSATION

The Fund pays each Independent Trustee an annual fee of $800 plus a per
meeting fee of $50 for meetings of the Board of Trustees, the Independent
Trustees or Committees of the Board of Trustees attended by the Trustee (the
Fund pays the Chairman of the Audit Committee an additional annual fee of $750).
If a Board meeting and a meeting of the Independent Trustees or a Committee
meeting, or a meeting of the Independent Trustees and/or more than one Committee
meeting, take place on a single day, the Trustees are paid a single meeting fee
by the Fund. The Fund also reimburses such Trustees for travel and other
out-of-pocket expenses incurred by them in connection with attending such
meetings. Trustees and officers of the Fund who are or have been employed by the
Investment Manager or an affiliated company receive no compensation or expenses
reimbursed from the Fund for their services as Trustee. Effective May 1, 1999,
Dr. Johnson serves as Chairman of the Audit Committee.

The following table illustrates the compensation that the Fund paid to its
Independent Trustees for the fiscal year ended December 31, 1998.

FUND COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- ------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Michael Bozic.................................................................................... $ 1,500
Edwin J. Garn.................................................................................... 1,650
Wayne E. Hedien.................................................................................. 1,650
Dr. Manuel H. Johnson............................................................................ 1,600
Michael E. Nugent................................................................................ 1,650
John L. Schroeder................................................................................ 1,650
</TABLE>

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1998 for services
to the 85 Morgan Stanley Dean Witter Funds and, in the case of Messrs. Johnson,
Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at December 31,
1998. Effective May 1, 1999, Dr. Johnson serves as Chairman of the Audit
Committee of each Morgan Stanley Dean Witter Fund and each TCW/DW Fund. With
respect to Messrs. Johnson,

24
<PAGE>
Nugent and Schroeder, the TCW/DW Funds are included solely because of a limited
exchange privilege between those Funds and five Morgan Stanley Dean Witter Money
Market Funds. No compensation was paid to the Fund's Independent Trustees by
Discover Brokerage Index Series for the calendar year ended December 31, 1998.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS AND TCW/DW FUNDS

<TABLE>
<CAPTION>
FOR SERVICE AS
DIRECTOR OR TOTAL CASH
TRUSTEE AND COMPENSATION FOR
COMMITTEE FOR SERVICE AS SERVICES TO 85
MEMBER OF 85 TRUSTEE AND MORGAN STANLEY
MORGAN STANLEY COMMITTEE DEAN WITTER FUNDS
DEAN WITTER MEMBER OF 11 AND 11 TCW/DW
NAME OF INDEPENDENT TRUSTEE FUNDS TCW/DW FUNDS FUNDS
- ---------------------------------------------------------- ---------------- ---------------- ------------------
<S> <C> <C> <C>
Michael Bozic............................................. $ 120,150 -- $ 120,150
Edwin J. Garn............................................. 132,450 -- 132,450
Wayne E. Hedien........................................... 132,350 -- 132,350
Dr. Manuel H. Johnson..................................... 128,400 62,331 190,781
Michael E. Nugent......................................... 132,450 62,131 194,581
John L. Schroeder......................................... 132,450 64,731 197,181
</TABLE>

As of the date of this STATEMENT OF ADDITIONAL INFORMATION, 55 of the Morgan
Stanley Dean Witter Funds, including the Fund, have adopted a retirement program
under which an Independent Trustee who retires after serving for at least five
years (or such lesser period as may be determined by the Board) as an
Independent Director or Trustee of any Morgan Stanley Dean Witter Fund that has
adopted the retirement program (each such Fund referred to as an "ADOPTING FUND"
and each such Trustee referred to as an "ELIGIBLE TRUSTEE") is entitled to
retirement payments upon reaching the eligible retirement age (normally, after
attaining age 72). Annual payments are based upon length of service.

Currently, upon retirement, each Eligible Trustee is entitled to receive
from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "REGULAR BENEFIT") equal to 30.22% of his or her Eligible Compensation plus
0.5036667% of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years up
to a maximum of 60.44% after ten years of service. The foregoing percentages may
be changed by the Board.(1) "ELIGIBLE COMPENSATION" is one-fifth of the total
compensation earned by such Eligible Trustee for service to the Adopting Fund in
the five year period prior to the date of the Eligible Trustee's retirement.
Benefits under the retirement program are not secured or funded by the Adopting
Funds.

The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the Fund for the fiscal year ended December 31,
1998 and by the 55 Morgan Stanley Dean Witter Funds (including the Fund) for the
year ended December 31, 1998, and the estimated retirement benefits for the
Independent Trustees, to commence upon their retirement, from the Fund as of
December 31, 1998 and from the 55 Morgan Stanley Dean Witter Funds as of
December 31, 1998.

25
<PAGE>
RETIREMENT BENEFITS FROM THE FUND AND ALL MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
--------------------------- ESTIMATED ANNUAL
ESTIMATED RETIREMENT BENEFITS BENEFITS
CREDITED ACCRUED AS EXPENSES UPON
YEARS ESTIMATED RETIREMENT(2)
OF SERVICE PERCENTAGE ------------------------- ----------------
AT OF BY ALL FROM FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUND FUNDS FUND FUNDS
- ------------------------------ ------------ ------------ ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic................. 10 60.44% $ $ 22,377 $ $ 52,250
Edwin J. Garn................. 10 60.44 35,225 52,250
Wayne E. Hedien............... 9 51.37 41,978 44,413
Dr. Manuel H. Johnson......... 10 60.44 14,047 52,250
Michael E. Nugent............. 10 60.44 25,336 52,250
John L. Schroeder............. 8 50.37 45,117 44,243
</TABLE>

- ------------------------------
(1) An Eligible Trustee may elect alternative payments of his or her retirement
benefits based upon the combined life expectancy of the Eligible Trustee and
his or her spouse on the date of such Eligible Trustee's retirement. In
addition, the Eligible Trustee may elect that the surviving spouse's
periodic payment of benefits will be equal to a lower percentage of the
periodic amount, when both spouses were alive. The amount estimated to be
payable under this method, through the remainder of the later of the lives
of the Eligible Trustee and spouse, will be the actuarial equivalent of the
Regular Benefit.
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) above.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------

As of the date of this STATEMENT OF ADDITIONAL INFORMATION, Hartford Life
Insurance Company and Hartford Life and Annuity Insurance Company owned all of
the outstanding shares of the Fund for allocation to their respective separate
accounts ("ACCOUNTS"), none of the Fund's Trustees was a Contract Owner under
the Accounts, and the aggregate number of shares of each Portfolio of the Fund
allocated to Contracts owned by the Fund's officers as a group was less than one
percent of each Portfolio's outstanding shares.

V. INVESTMENT MANAGEMENT AND OTHER SERVICES
- --------------------------------------------------------------------------------

A. INVESTMENT MANAGER AND SUB-ADVISORS

The Investment Manager to each Portfolio is Morgan Stanley Dean Witter
Advisors Inc., a Delaware corporation, whose address is Two World Trade Center,
New York, New York 10048. The Investment Manager is a wholly-owned subsidiary of
MSDW, a Delaware corporation. MSDW is a preeminent global financial services
firm that maintains leading market positions in each of its three primary
businesses: securities, asset management and credit services.

The Sub-Advisor to the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO and
the EMERGING MARKETS PORTFOLIO is TCW Funds Management Inc., a subsidiary of The
TCW Group Inc., whose direct and indirect subsidiaries, including Trust Company
of the West and TCW Asset Management Company, provide a variety of trust,
investment management and investment advisory services. TCW's address is 865
South Figueroa Street, Suite 1800, Los Angeles, California 90017. TCW was
retained to provide sub-advisory services to the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO and the EMERGING MARKETS PORTFOLIO since the inception of
each Portfolio.

The Sub-Advisor to the GROWTH PORTFOLIO is Morgan Stanley Dean Witter
Investment Management Inc., a subsidiary of MSDW. MSDW Investment Management,
together with its affiliated asset management companies, conducts a worldwide
portfolio management business and provides a broad range of portfolio management
services to customers in the United States and abroad. MSDW Investment
Management's address is 1221 Avenue of the Americas, New York, New York 10020.
MSDW Investment Management was retained to provide sub-advisory services to the
GROWTH PORTFOLIO effective March 2, 1998.

26
<PAGE>
Pursuant to an Investment Management Agreement (the "Management Agreement")
with the Investment Manager, the Fund has retained the Investment Manager to
provide each Portfolio administrative services, manage its business affairs and,
other than with respect to the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO,
the EMERGING MARKETS PORTFOLIO and the GROWTH PORTFOLIO, manage its investments,
including the placing of orders for the purchase and sale of portfolio
securities. With respect to the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO,
the EMERGING MARKETS PORTFOLIO and the GROWTH PORTFOLIO, the Investment Manager
supervises these Portfolios' investments. The Fund pays the Investment Manager
monthly compensation calculated daily by applying the following annual rates to
the net assets of each Portfolio determined as of the close of each business
day:

<TABLE>
<CAPTION>
NAME OF PORTFOLIO INVESTMENT MANAGEMENT FEE RATES
- ------------------------------------------- ---------------------------------------------------------------------
<S> <C>
The Money Market Portfolio 0.50% of net assets
The North American Government Securities 0.65% of net assets
Portfolio
The Diversified Income Portfolio 0.40% of net assets
The Balanced Growth Portfolio 0.60% of net assets
The Utilities Portfolio 0.65% of net assets
The Dividend Growth Portfolio 0.625% of net assets up to $500 million;
0.50% of net assets exceeding $500 million
The Value-Added Market Portfolio 0.50% of net assets
The Growth Portfolio 0.80% of net assets
The American Opportunities Portfolio 0.625% of net assets
The Mid-Cap Growth Portfolio 0.75% of net assets
The Global Equity Portfolio 1.0% of net assets
The Developing Growth Portfolio 0.50% of net assets
The Emerging Markets Portfolio 1.25% of net assets
</TABLE>

For the fiscal years ended December 31, 1996, 1997 and 1998, the Investment
Manager accrued compensation under the Management Agreement as follows:

<TABLE>
<CAPTION>
COMPENSATION ACCRUED FOR THE FISCAL YEAR ENDED
DECEMBER 31,
----------------------------------------------
NAME OF PORTFOLIO 1996 1997 1998
- ---------------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
The Money Market Portfolio...................................... $ 288,326 $ 463,709 $
The North American Government Securities Portfolio.............. 0 30,048
The Diversified Income Portfolio................................ 36,906 186,066
The Balanced Growth Portfolio................................... 54,817 422,583
The Utilities Portfolio......................................... 100,392 261,168
The Dividend Growth Portfolio................................... 1,015,687 2,477,416
The Value-Added Market Portfolio................................ 196,612 540,475
The Growth Portfolio............................................ 6,411 254,398
The American Opportunities Portfolio............................ 473,945 1,082,276
The Mid-Cap Growth Portfolio.................................... N/A 0
The Global Equity Portfolio..................................... 179,010 852,703
The Developing Growth Portfolio................................. 155,982 355,267
The Emerging Markets Portfolio.................................. 0 308,327
-------------- -------------- --------------
Total....................................................... $ 2,508,088 $ 7,234,436
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

The Investment Manager has retained its wholly-owned subsidiary, MSDW
Services Company, to perform administrative services for the Fund.

27
<PAGE>
Under a Sub-Advisory Agreement between TCW and the Investment Manager (the
"TCW Sub-Advisory Agreement") respecting the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO and the EMERGING MARKETS PORTFOLIO, TCW provides these
Portfolios with investment advice and portfolio management, subject to the
overall supervision of the Investment Manager. The Investment Manager pays TCW
monthly compensation equal to 40% of the Investment Manager's fee, payable in
respect of the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO and the EMERGING
MARKETS PORTFOLIO.

Under a Sub-Advisory Agreement between MSDW Investment Management and the
Investment Manager (the "MSDW Investment Management Sub-Advisory Agreement")
respecting the GROWTH PORTFOLIO, MSDW Investment Management provides that
Portfolio with investment advice and portfolio management, subject to the
overall supervision of the Investment Manager. The Investment Manager pays MSDW
Investment Management monthly compensation equal to 40% of the Investment
Manager's fee, payable in respect of the GROWTH PORTFOLIO.

Prior to March 1998, the BALANCED GROWTH PORTFOLIO (then named the BALANCED
PORTFOLIO) and the GROWTH PORTFOLIO (then named the CORE EQUITY PORTFOLIO) were
sub-advised by TCW. In October 1997, TCW indicated its intention to resign as
Sub-Advisor of these Portfolios and, on November 6, 1997, the Board of Trustees
recommended that the Investment Manager assume the investment management advice
and portfolio management function then being performed by TCW for BALANCED
GROWTH PORTFOLIO and that the MSDW Investment Management Sub-Advisory Agreement
be submitted to shareholders of the GROWTH PORTFOLIO (then named the CORE EQUITY
PORTFOLIO) for approval. The shareholders of the GROWTH PORTFOLIO approved the
MSDW Investment Management Sub-Advisory Agreement on February 26, 1998 and the
agreement became effective on March 2, 1998, at which time TCW also resigned as
Sub-Advisor of the GROWTH PORTFOLIO and the BALANCED GROWTH PORTFOLIO.

Concurrent with the effectiveness of the MSDW Investment Management
Sub-Advisory Agreement, the Investment Manager and the Fund amended the
Management Agreement to reduce the fee paid by the Fund to the Investment
Manager under the Agreement in respect of the BALANCED GROWTH PORTFOLIO from
0.75% to 0.60% of the Portfolio's average daily net assets and to reduce the fee
paid by the Fund to the Investment Manager under the Agreement in respect of the
GROWTH PORTFOLIO from 0.85% to 0.80% of the Portfolio's average daily net
assets.

Effective May 1, 1998, the Management Agreement was amended to lower the
management fees charged on daily net assets of the Dividend Growth Portfolio in
excess of $500 million to 0.50%.

The Investment Manager had undertaken to assume all expenses of the Mid-Cap
Growth Portfolio (except for any brokerage fees) and to waive the compensation
provided for the Portfolio in its Management Agreement with the Fund until such
time as the Portfolio attained $50 million of net assets or Until April 30,
1999, whichever occurred first. As of May 1, 1999, the Mid-Cap Growth Portfolio
had not attained $50 million of net assets.

B. PRINCIPAL UNDERWRITER

The Fund's principal underwriter is the Distributor (which has the same
address as the Investment Manager). In this capacity, each Portfolio's shares
are distributed by the Distributor. The Distributor, a Delaware corporation, is
a wholly-owned subsidiary of MSDW.

The Distributor bears all expenses incurred by it in connection with its
duties and activities under the Distribution Agreement (except such expenses as
are specifically undertaken by the Fund under the Agreement). The Fund bears all
costs and expenses of the Fund, including the expense of preparing, printing,
mailing and otherwise distributing prospectuses, annual or interim reports or
proxy materials to Contract Owners. The Fund also bears the costs of registering
the Fund and its shares under federal securities laws and, if deemed necessary
or advisable, to qualify the shares of the Fund for sale under state securities
laws.

The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under the
Distribution Agreement, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to the Fund or any of its

28
<PAGE>
shareholders for any error of judgment or mistake of law or for any act or
omission or for any losses sustained by the Fund or its shareholders.

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER AND FUND EXPENSES PAID BY THIRD
PARTIES

Each Portfolio has retained the Investment Manager to provide administrative
services, manage its business affairs and (except for the NORTH AMERICAN
GOVERNMENT SECURITIES PORTFOLIO, THE EMERGING MARKETS PORTFOLIO and the GROWTH
PORTFOLIO) invest its assets, including the placing of orders for the purchase
and sale of portfolio securities. Each of the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, THE EMERGING MARKETS PORTFOLIO and the GROWTH PORTFOLIO
has retained the Investment Manager to supervise the investment of its assets.

Under the terms of the Management Agreement, the Investment Manager also
maintains certain of the Fund's books and records and furnishes, at its own
expense, the office space, facilities, equipment, clerical help, bookkeeping and
certain legal services as the Fund may reasonably require in the conduct of its
business, including the preparation of prospectuses, proxy statements and
reports required to be filed with federal and state securities commissions
(except insofar as the participation or assistance of independent accountants
and attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In addition, the Investment Manager 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 service, heat,
light, power and other utilities provided to the Fund.

The services provided by the Sub-Advisors are discussed above under
"Investment Manager and Sub-Advisors."

Expenses not expressly assumed by the Investment Manager under the
Management Agreement, by the Sub-Advisors for the NORTH AMERICAN GOVERNMENT
SECURITIES PORTFOLIO, THE EMERGING MARKETS PORTFOLIO and the GROWTH PORTFOLIO
under the TCW Sub-Advisory Agreement and the MSDW Investment Management
Sub-Advisory Agreement, or by the Distributor, will be paid by the Portfolios.
Each Portfolio pays all expenses incurred in its operation and a portion of the
Fund's general administration expenses allocated based on the asset sizes of the
Portfolios. The Portfolios' direct expenses include, but are not limited to:
charges and expenses of any registrar, custodian, transfer and dividend
disbursing agent; brokerage commissions; certain taxes; registration costs of
the Fund under federal and state securities laws; shareholder servicing costs,
charges and expenses of any outside service used for pricing of the Portfolios'
shares; fees and expenses of legal counsel, including counsel to the Trustees
who are not interested persons of the Fund or of the Investment Manager (or the
Sub-Advisors) (not including compensation or expenses of attorneys who are
employees of the Investment Manager (or the Sub-Advisors)); fees and expenses of
the Fund's independent accountants; interest on Portfolio borrowings; and all
other expenses attributable to a particular Portfolio.

Expenses which are allocated on the basis of size of the respective
Portfolios include the costs and expenses of printing, including typesetting,
and distributing prospectuses and statements of additional information of the
Fund and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees of
the Investment Manager (or the Sub-Advisors) or any corporate affiliate of the
Investment Manager (or the Sub-Advisors); state franchise taxes; Securities and
Exchange Commission fees; membership dues of industry associations; postage;
insurance premiums on property or personnel (including officers and Trustees) of
the Fund which inure to its benefit; and all other costs of the Fund's
operations properly payable by the Fund and allocable on the basis of size to
the respective Portfolios. Depending on the nature of a legal claim, liability
or lawsuit, litigation costs, payment of legal claims or liabilities and any
indemnification relating thereto may be directly applicable to the Portfolio or
allocated on the basis of the size of the respective Portfolios. The Trustees
have determined that this is an appropriate method of allocation of expenses.

Each of the Management Agreement, the TCW Sub-Advisory Agreement and the
MSDW Investment Management Sub-Advisory Agreement provides that in the absence
of willful misfeasance, bad faith,

29
<PAGE>
gross negligence or reckless disregard of its obligations thereunder, the
Investment Manager and the Sub-Advisors, respectively, are not liable to the
Fund or any of its investors (and, in the case of the TCW Sub-Advisory Agreement
and the MSDW Investment Management Sub-Advisory Agreement, to the Investment
Manager) for any act or omission or for any losses sustained by the Fund or its
investors.

D. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-DISBURSING AGENT

Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for each
Portfolio's shares and the Dividend Disbursing Agent for payment of dividends
and distributions on Portfolio shares. The principal business address of the
Transfer Agent is Harborside Financial Center, Plaza Two, Jersey City, New
Jersey 07311.

(2) CUSTODIAN AND INDEPENDENT ACCOUNTANTS

The Bank of New York, 90 Washington Street, New York, New York 10286, is the
Custodian of each Portfolio's assets other than those of the EMERGING MARKETS
PORTFOLIO, and grouping (1) of the DIVERSIFIED INCOME PORTFOLIO. The Chase
Manhattan Bank, One Chase Plaza, New York, New York 10005 is the Custodian of
the assets of the EMERGING MARKETS PORTFOLIO and grouping (1) of the DIVERSIFIED
INCOME PORTFOLIO. Any Portfolio's cash balances with the Custodian in excess of
$100,000 are unprotected by federal deposit insurance. These balances may, at
times, be substantial.

serves as the independent accountants of the Fund.
The independent accountants are responsible for auditing the annual financial
statements of the Fund.

(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, of MSDW
Investment Management and of the Distributor. As Transfer Agent and Dividend
Disbursing Agent, the Transfer Agent's responsibilities include maintaining
shareholder accounts, reinvesting dividends, processing account registration
changes, handling purchase and redemption transactions, tabulating proxies and
maintaining shareholder records and lists. For these services, the Transfer
Agent receives a fee from each Portfolio.

VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
- --------------------------------------------------------------------------------

A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Trustees, the Investment Manager
and, for the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO, the EMERGING
MARKETS PORTFOLIO and the GROWTH PORTFOLIO, the Sub-Advisors, are responsible
for decisions to buy and sell securities for each Portfolio, the selection of
brokers and dealers to effect the transactions, and the negotiation of brokerage
commissions, if any. Purchases and sales of securities on a stock exchange are
effected through brokers who charge a commission for their services. In the
over-the-counter market, securities are generally traded on a "net" basis with
dealers acting as principal for their own accounts without a stated commission,
although the price of the security usually includes a profit to the dealer. The
Fund also expects that securities will be purchased at times in underwritten
offerings where the price includes a fixed amount of compensation, generally
referred to as the underwriter's concession or discount. Options and futures
transactions will usually be effected through a broker and a commission will be
charged. Certain securities (e.g., certain money market instruments) are
purchased directly from an issuer, in which case no commissions or discounts are
paid.

30
<PAGE>
For the fiscal years ended December 31, 1996, 1997 and 1998, the Portfolios
paid brokerage commissions as follows:

<TABLE>
<CAPTION>
BROKERAGE BROKERAGE BROKERAGE
COMMISSIONS PAID COMMISSIONS PAID COMMISSIONS PAID
FOR FISCAL YEAR FOR FISCAL YEAR FOR FISCAL YEAR
NAME OF PORTFOLIO ENDED 12/31/96 ENDED 12/31/97 ENDED 12/31/98
- ---------------------------------------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
Diversified Income Portfolio........................ $ 413 $ 1,875
Balanced Growth Portfolio........................... 26,227 52,983
Utilities Portfolio................................. 28,391 23,494
Dividend Growth Portfolio........................... 288,011 420,488
Value-Added Market Portfolio........................ 39,218 48,470
Growth Portfolio.................................... 19,971 45,268
American Opportunities Portfolio.................... 313,876 764,656
Mid-Cap Growth Portfolio............................ -- 23,517
Global Equity Portfolio............................. 243,803 433,239
Developing Growth Portfolio......................... 91,128 143,389
Emerging Markets Portfolio.......................... 106,025 140,267
------------------ ------------------ ------------------
Total........................................... $ $ $
------------------ ------------------ ------------------
------------------ ------------------ ------------------
</TABLE>

B. COMMISSIONS

Pursuant to an order of the SEC, the Portfolios may effect principal
transactions in certain money market instruments with Dean Witter Reynolds. The
Portfolios will limit their transactions with Dean Witter Reynolds to U.S.
Government and government agency securities, bank money instruments (i.e.,
certificates of deposit and bankers' acceptances) and commercial paper. The
transactions will be effected with Dean Witter Reynolds only when the price
available from Dean Witter Reynolds is better than that available from other
dealers.

During the fiscal years ended December 31, 1996, 1997 and 1998, the Fund did
not effect any principal transactions with Dean Witter Reynolds.

Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may be
effected through Dean Witter Reynolds, Morgan Stanley & Co. and other affiliated
brokers and dealers. In order for an affiliated broker or dealer to effect any
portfolio transactions on an exchange for the Portfolios, the commissions, fees
or other remuneration received by the affiliated broker or dealer must be
reasonable and fair compared to the commissions, fees or other remuneration paid
to other brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period of
time. This standard would allow the affiliated broker or dealer to receive no
more than the remuneration which would be expected to be received by an
unaffiliated broker in a commensurate arm's-length transaction. Furthermore, the
Trustees, including the Independent Trustees, have adopted procedures which are
reasonably designed to provide that any commissions, fees or other remuneration
paid to an affiliated broker or dealer are consistent with the foregoing
standard. The Fund does not reduce the management fee it pays to the Investment
Manager by any amount of the brokerage commissions it may pay to an affiliated
broker or dealer.

31
<PAGE>
During the fiscal years ended December 31, 1996 and 1997 the Portfolios paid
brokerage commissions to Dean Witter Reynolds as follows:

<TABLE>
<CAPTION>
BROKERAGE COMMISSIONS
PAID
TO DEAN WITTER REYNOLDS
FOR FISCAL YEAR ENDED
------------------------
NAME OF PORTFOLIO 12/31/96 12/31/97
- ---------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Balanced Growth Portfolio......................................................... $ 5,464 $ 4,707
Utilities Portfolio............................................................... 25,530 15,600
Dividend Growth Portfolio......................................................... 173,213 148,680
Growth Portfolio.................................................................. 4,616 3,655
American Opportunities Portfolio.................................................. 108,676 73,465
Mid-Cap Growth Portfolio.......................................................... N/A 9,511
Global Equity Portfolio........................................................... 28,026 38,917
Developing Growth Portfolio....................................................... 28,536 27,638
----------- -----------
Total......................................................................... $ 374,061 $ 322,173
----------- -----------
----------- -----------
</TABLE>

For the fiscal year ended December 31, 1998, the Portfolios paid brokerage
commissions to Dean Witter Reynolds as follows:

<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE DOLLAR
AMOUNT OF EXECUTED
PERCENTAGE OF TRADES ON WHICH
BROKERAGE AGGREGATE BROKERAGE BROKERAGE
COMMISSIONS PAID TO COMMISSIONS FOR COMMISSIONS WERE
DWR FOR FISCAL YEAR FISCAL YEAR ENDED PAID FOR FISCAL
NAME OF PORTFOLIO ENDED 12/31/98 12/31/98 YEAR ENDED 12/31/98
- ----------------------------------------------- -------------------- --------------------- -------------------
<S> <C> <C> <C>
Balanced Growth Portfolio......................
Utilities Portfolio............................
Dividend Growth Portfolio......................
Growth Portfolio...............................
American Opportunities Portfolio...............
Mid-Cap Growth Portfolio.......................
Global Equity Portfolio........................
Developing Growth Portfolio....................
Total......................................
</TABLE>

During the period June 1 through December 31, 1997, the Portfolios paid
brokerage commissions to Morgan Stanley & Co., which broker-dealer became an
affiliate of the Investment Manager on May 31, 1997 upon consummation of the
merger of Dean Witter, Discover & Co. with Morgan Stanley Group Inc., as
follows:

<TABLE>
<CAPTION>
BROKERAGE COMMISSIONS PAID TO
MORGAN STANLEY & CO. FOR FISCAL
NAME OF PORTFOLIO YEAR ENDED 12/31/97
- --------------------------------------------------------------------------------- -------------------------------
<S> <C>
Balanced Growth Portfolio........................................................ $ 165
Dividend Growth Portfolio........................................................ 11,150
Growth Portfolio................................................................. 135
American Opportunities Portfolio................................................. 27,095
Mid-Cap Growth Portfolio......................................................... 850
Global Equity Portfolio.......................................................... 3,141
Developing Growth Portfolio...................................................... 2,758
Emerging Markets Portfolio....................................................... 3,274
----------
Total........................................................................ $
----------
----------
</TABLE>

32
<PAGE>
For the fiscal year ended December 31, 1998, the Portfolios paid brokerage
commissions to Morgan Stanley & Co. as follows:

<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE DOLLAR
AMOUNT OF EXECUTED
PERCENTAGE OF TRADES ON WHICH
BROKERAGE COMMISSIONS AGGREGATE BROKERAGE BROKERAGE
PAID TO MORGAN STANLEY & COMMISSIONS FOR COMMISSIONS WERE
CO. FOR FISCAL YEAR FISCAL YEAR ENDED PAID FOR FISCAL YEAR
NAME OF PORTFOLIO ENDED 12/31/98 12/31/98 ENDED 12/31/98
- ------------------------------------------ ------------------------ --------------------- --------------------
<S> <C> <C> <C>
Balanced Growth Portfolio.................
Dividend Growth Portfolio.................
Growth Portfolio..........................
American Opportunities Portfolio..........
Mid-Cap Growth Portfolio..................
Global Equity Portfolio...................
Developing Growth Portfolio...............
Emerging Markets Portfolio................
Total.................................
</TABLE>

C. BROKERAGE SELECTION

The policy of the Fund regarding purchases and sales of securities for the
Portfolios is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Fund believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Fund and the Investment Manager (or, if applicable, the
Sub-Advisors) from obtaining a high quality of brokerage and research services.
In seeking to determine the reasonableness of brokerage commissions paid in any
transaction, the Investment Manager (or, if applicable, the Sub-Advisors) relies
upon its experience and knowledge regarding commissions generally charged by
various brokers and on its judgment in evaluating the brokerage and research
services received from the broker effecting the transaction. These
determinations are necessarily subjective and imprecise, as in most cases an
exact dollar value for those services is not ascertainable.

The Fund anticipates that certain of its transactions involving foreign
securities will be effected on foreign securities exchanges. Fixed commissions
on such transactions are generally higher than negotiated commissions on
domestic transactions. There is also generally less government supervision and
regulation of foreign securities exchanges and brokers than in the United
States.

In seeking to implement each Portfolio's policies, the Investment Manager
(or, if applicable, the Sub-Advisors) effects transactions with those brokers
and dealers who the Investment Manager (or, if applicable, the Sub-Advisors)
believes provide the most favorable prices and are capable of providing
efficient executions. If the Investment Manager (or, if applicable, the
Sub-Advisors) believes the prices and executions are obtainable from more than
one broker or dealer, it may give consideration to placing portfolio
transactions with those brokers and dealers who also furnish research and other
services to the Fund or the Investment Manager (or, if applicable, the
Sub-Advisors). The services may include, but are not limited to, any one or more
of the following: information as to the availability of securities for purchase
or sale; statistical or factual information or opinions pertaining to
investment; wire services; and appraisals or evaluations of portfolio
securities. The information and services received by the Investment Manager (or,
if applicable, the Sub-Advisors) from brokers and dealers may be of benefit to
the Investment Manager (or, if applicable, the Sub-Advisors) in the management
of accounts of some of its other clients and may not in all cases benefit a
Portfolio directly.

The Investment Manager and the Sub-Advisors currently serve as investment
advisors to a number of clients, including other investment companies, and may
in the future act as investment advisors to others. It is the practice of the
Investment Manager (or, if applicable, the Sub-Advisors) to cause

33
<PAGE>
purchase and sale transactions to be allocated among the Portfolios and others
whose assets it manages in such manner as it deems equitable. In making such
allocations among the Portfolios and other client accounts, various factors may
be considered, including the respective investment objectives, the relative size
of portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and the
opinions of the persons responsible for managing the Portfolios and other client
accounts. In the case of certain initial and secondary public offerings, the
Investment Manager (or, if applicable, the Sub-Advisors) utilizes a pro rata
allocation process based on the size of the Morgan Stanley Dean Witter Funds
involved and the number of shares available from the public offering.

D. DIRECTED BROKERAGE

During the fiscal year ended December 31, 1998, the Portfolios paid
brokerage commissions to brokers because of research services provided as
follows:

<TABLE>
<CAPTION>
AGGREGATE DOLLAR AMOUNT OF
BROKERAGE COMMISSIONS DIRECTED TRANSACTIONS FOR WHICH
IN CONNECTION WITH RESEARCH SUCH COMMISSIONS WERE PAID
SERVICES PROVIDED FOR FISCAL FOR FISCAL YEAR ENDED
NAME OF PORTFOLIO YEAR ENDED 12/31/98 12/31/98
- ---------------------------------------------------- ------------------------------- --------------------------
<S> <C> <C>
Balanced Growth Portfolio...........................
Utilities Portfolio.................................
Dividend Growth Portfolio...........................
Growth Portfolio....................................
American Opportunities Portfolio....................
Mid-Cap Growth Portfolio............................
Global Equity Portfolio.............................
Developing Growth Portfolio.........................
Emerging Markets Portfolio..........................
Total...........................................
</TABLE>

E. REGULAR BROKER-DEALERS

During the fiscal year ended December 31, 1998, [Portfolio] purchased [type
of securities] issued by [list brokers], which were among the ten brokers or the
ten dealers that executed transactions for or with the Fund or the Portfolio in
the largest dollar amounts during the year. At December 31, 1998, [Portfolio]
held [type of securities] issued by such brokers with market values of [ ]
[and , respectively]. [Add similar sentences for each relevant Portfolio.]

VII. CAPITAL STOCK AND OTHER SECURITIES
- --------------------------------------------------------------------------------

The shareholders of each Portfolio are entitled to a full vote for each full
share of beneficial interest held. The Fund is authorized to issue an unlimited
number of shares of beneficial interest. The Fund's shares of beneficial
interest are divided currently into thirteen separate Portfolios.

The Fund's Declaration of Trust permits the Trustees to authorize the
creation of additional Portfolios and additional classes of shares within any
Portfolio.

The Fund is not required to hold annual meetings of shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call special meetings of shareholders for action by shareholder
vote as may be required by the Investment Company Act or the Declaration of
Trust. Under certain circumstances, the Trustees may be removed by action of the
Trustees or by the shareholders.

Under Massachusetts law, shareholders of a business trust may, under certain
limited circumstances, be held personally liable as partners for the obligations
of the Fund. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund, requires that notice
of such Fund obligations include such disclaimer, and provides for
indemnification out of the Fund's property for any shareholder held personally
liable for the obligations of the Fund. Thus, the risk

34
<PAGE>
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability, and
the nature of the Fund's assets and operations, the possibility of the Fund
being unable to meet its obligations is remote and thus, in the opinion of
Massachusetts counsel to the Fund, the risk to Fund shareholders of personal
liability is remote.

Shareholders have the right to vote on the election of Trustees of the Fund
and on any and all matters on which by law or the provisions of the Fund's
By-Laws they may be entitled to vote. To the extent required by law, Hartford
Life Insurance Company and Hartford Life and Annuity Insurance Company, which
are the only shareholders of the Fund, will vote the shares of the Fund held in
each Account established to fund the benefits under either a flexible premium
deferred variable annuity Contract or a flexible premium variable life insurance
Contract in accordance with instructions from the owners of such Contracts.
Shareholders of all Portfolios vote for a single set of Trustees. All of the
Trustees have been elected by the shareholders of the Fund, most recently at a
Special Meeting of Shareholders held on May 21, 1997. The Trustees themselves
have the power to alter the number and the terms of office of the Trustees (as
provided for in the Declaration of Trust), and they may at any time lengthen or
shorten their own terms or make their terms of unlimited duration and appoint
their own successors, provided that always at least a majority of the Trustees
has been elected by the shareholders of the Fund.

On any matters affecting only one Portfolio, only the shareholders of that
Portfolio are entitled to vote. On matters relating to all the Portfolios, but
affecting the Portfolios differently, separate votes by Portfolio are required.
Approval of an Investment Management Agreement and a change in fundamental
policies would be regarded as matters requiring separate voting by each
Portfolio.

With respect to the submission to shareholder vote of a matter requiring
separate voting by Portfolio, the matter shall have been effectively acted upon
with respect to any Portfolio if a majority of the outstanding voting securities
of that Portfolio votes for the approval of the matter, notwithstanding that:
(1) the matter has not been approved by a majority of the outstanding voting
securities of any other Portfolio; or (2) the matter has not been approved by a
majority of the outstanding voting securities of the Fund. The voting rights of
shareholders are not cumulative, so that holders of more than 50 percent of the
shares voting can, if they choose, elect all Trustees being selected, while the
holders of the remaining shares would be unable to elect any Trustees.

VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
- --------------------------------------------------------------------------------

A. PURCHASE/REDEMPTION OF SHARES

Information concerning how Fund shares are offered (and how they are
redeemed) is provided in the Fund's Prospectus.

B. OFFERING PRICE

The price of each Portfolio shares, called "net asset value," is based on
the value of the Portfolio's securities.

The MONEY MARKET PORTFOLIO, however, utilizes the amortized cost method in
valuing its portfolio securities for purposes of determining the net asset value
of its shares. The MONEY MARKET PORTFOLIO utilizes the amortized cost method in
valuing its portfolio securities even though the portfolio securities may
increase or decrease in market value, generally in connection with changes in
interest rates. The amortized cost method of valuation involves valuing a
security at its cost at the time of purchase adjusted by a constant amortization
to maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the MONEY MARKET
PORTFOLIO would receive if it sold the investment. During such periods, the
yield to investors in the MONEY MARKET PORTFOLIO may differ somewhat from that
obtained in a similar company which uses mark-to-market values for all of its
portfolio securities. For example, if the use of amortized

35
<PAGE>
cost resulted in a lower (higher) aggregate portfolio value on a particular day,
a prospective investor in the MONEY MARKET PORTFOLIO would be able to obtain a
somewhat higher (lower) yield than would result from investment in such a
similar company and existing investors would receive less (more) investment
income. The purpose of this method of calculation is to facilitate the
maintenance of a constant net asset value per share of $1.00.

The use of the amortized cost method to value the portfolio securities of
the MONEY MARKET PORTFOLIO and the maintenance of the per share net asset value
of $1.00 is permitted pursuant to Rule 2a-7 of the Investment Company Act (the
"RULE") and is conditioned on its compliance with various conditions contained
in the Rule including: (a) the Trustees are obligated, as a particular
responsibility within the overall duty of care owed to the Portfolio's
shareholders, to establish procedures reasonably designed, taking into account
current market conditions and the Portfolio's investment objectives, to
stabilize the net asset value per share as computed for the purpose of
distribution and redemption at $1.00 per share; (b) the procedures include (i)
calculation, at such intervals as the Trustees determine are appropriate and as
are reasonable in light of current market conditions, of the deviation, if any,
between net asset value per share using amortized cost to value portfolio
securities and net asset value per share based upon available market quotations
with respect to such portfolio securities; (ii) periodic review by the Trustees
of the amount of deviation as well as methods used to calculate it; and (iii)
maintenance of written records of the procedures, and the Trustees'
considerations made pursuant to them and any actions taken upon such
consideration; (c) the Trustees should consider what steps should be taken, if
any, in the event of a difference of more than 1/2 of 1% between the two methods
of valuation; and (d) the Trustees should take such action as they deem
appropriate (such as shortening the average portfolio maturity, realizing gains
or losses, withholding dividends or, as provided by the Declaration of Trust,
reducing the number of outstanding shares of the MONEY MARKET PORTFOLIO) to
eliminate or reduce to the extent reasonably practicable material dilution or
other unfair results to investors or existing shareholders which might arise
from differences between the two methods of valuation. Any reduction of
outstanding shares will be effected by having each shareholder proportionately
contribute to the MONEY MARKET PORTFOLIO'S capital the necessary shares that
represent the amount of excess upon such determination. Each Contract Owner will
be deemed to have agreed to such contribution in these circumstances by
allocating investment under his or her Contract to the MONEY MARKET PORTFOLIO.

Generally, for purposes of the procedures adopted under the Rule, the
maturity of a portfolio security is deemed to be the period remaining
(calculated from the trade date or such other date on which the MONEY MARKET
PORTFOLIO'S interest in the instrument is subject to market action) until the
date on which in accordance with the terms of the security the principal amount
must unconditionally be paid, or in the case of a security called for
redemption, the date on which the redemption payment must be made.

A variable rate security that is subject to a demand feature is deemed to
have a maturity equal to the period remaining until the principal amount can be
recovered through demand. A floating rate security that is subject to a demand
feature is deemed to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.

An "NRSRO" is a nationally recognized statistical rating organization. The
term "Requisite NRSROs" means (i) any two NRSROs that have issued a rating with
respect to a security or class of debt obligations of an issuer, or (ii) if only
one NRSRO has issued a rating with respect to such security or issuer at the
time a fund purchases or rolls over the security, that NRSRO.

An Eligible Security is generally defined in the Rule to mean (i) a security
with a remaining maturity of 397 calendar days or less that has received a
short-term rating (or that has been issued by an issuer that has received a
short-term rating with respect to a class of debt obligations, or any debt
obligation within that class, that is comparable in priority and security with
the security) by the Requisite NRSROs in one of the two highest short-term
rating categories (within which there may be sub-categories or gradations
indicating relative standing); or (ii) a security: (A) that at the time of
issuance had a remaining maturity of more than 397 calendar days but that has a
remaining maturity of 397 calendar days or less; and (B) whose issuer has
received from the Requisite NRSROs a rating with respect to a class of debt

36
<PAGE>
obligations (or any debt obligations within that class) that is now comparable
in priority and security with the security, in one of the two highest short-term
rating categories (within which there may be subcategories or gradations
indicating relative standing); or (iii) an unrated security that is of
comparable quality to a security meeting the requirements of (i) or (ii) above,
as determined by the Trustees. The MONEY MARKET PORTFOLIO will limit its
investments to securities that meet the requirements for Eligible Securities
including the required ratings by S&P or Moody's.

As permitted by the Rule, the Board has delegated to the Fund's Investment
Manager, subject to the Board's oversight pursuant to guidelines and procedures
adopted by the Board, the authority to determine which securities present
minimal credit risks and which unrated securities are comparable in quality to
rated securities.

Also, as required by the Rule, the MONEY MARKET PORTFOLIO will limit its
investments in securities, other than Government securities, so that, at the
time of purchase: (a) except as further limited in (b) below with regard to
certain securities, no more than 5% of its total assets will be invested in the
securities of any one issuer; and (b) with respect to Eligible Securities that
have received a rating in less than the highest category by any one of the
NRSROs whose ratings are used to qualify the security as an Eligible Security,
or that have been determined to be of comparable quality: (i) no more than 5% in
the aggregate of the Portfolio's total assets in all such securities, and (ii)
no more than the greater of 1% of total assets, or $1 million, in the securities
on any one issuer.

The presence of a line of credit or other credit facility offered by a bank
or other financial institution which guarantees the payment obligation of the
issuer, in the event of a default in the payment of principal or interest of an
obligation, may be taken into account in determining whether an investment is an
Eligible Security, provided that the guarantee itself is an Eligible Security.

The Rule further requires that the Money Market Portfolio limit its
investments to U.S. dollar-denominated instruments which the Trustees determine
present minimal credit risks and which are Eligible Securities. The Rule also
requires the Portfolio to maintain a dollar-weighted average portfolio maturity
(not more than 90 days) appropriate to its objective of maintaining a stable net
asset value of $1.00 per share and precludes the purchase of any instrument with
a remaining maturity of more than 397 days. (An Investment Restriction of the
Fund further precludes the Portfolio from investing in securities maturing more
than one year from the date of purchase.) Should the disposition of a portfolio
security result in a dollar-weighted average portfolio maturity of more than 90
days, the Portfolio will invest its available cash in such a manner as to reduce
such maturity to 90 days or less a soon as is reasonably practicable.

If the Trustees determine that it is no longer in the best interests of the
MONEY MARKET PORTFOLIO and its shareholders to maintain a stable price of $1 per
share or if the Trustees believe that maintaining such price no longer reflects
a market-based net asset value per share, the board has the right to change from
an amortized cost basis of valuation to valuation based on market quotations.
The Fund will notify shareholders of the Portfolio of any such change.

In the calculation of a Portfolio's net asset value (other than for the
MONEY MARKET PORTFOLIO): (1) an equity security listed or traded on the New York
or American Stock Exchange or other 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 a security is traded on more than one exchange, the security is valued on
the exchange designated as the primary market pursuant to procedures adopted by
the Trustees); and (2) all other securities for which over-the-counter market
quotations are readily available are valued at the latest bid price. When market
quotations are not readily available, including circumstances under which it is
determined by the Investment Manager (or if applicable, the Sub-Advisor) 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 Fund's
Trustees. For valuation purposes, quotations of foreign portfolio securities,
other assets and liabilities and forward contracts stated in foreign currency
are translated into U.S. dollar equivalents at the prevailing market rates prior
to the close of the New York Stock Exchange.

37
<PAGE>
Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Trustees. Other short-term debt securities will be valued on a mark-to-market
basis until such time as they reach a remaining maturity of sixty days,
whereupon they will be valued at amortized cost using their value on the 61st
day unless the Trustees determine such does not reflect the securities' market
value, in which case the securities will be valued at their fair value as
determined by the Trustees.

Certain of the Portfolios' securities (other than securities of the MONEY
MARKET PORTFOLIO) may be valued by an outside pricing service approved by the
Fund's Trustees. The pricing service may utilize a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters, and/or
research evaluations by its staff, including review of broker-dealer market
price quotations in determining what it believes is the fair valuation of the
portfolio securities valued by such pricing service.

Listed options on debt securities are valued at the latest sale price on the
exchange on which they are listed unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
latest bid and asked prices. Unlisted options on debt securities and all options
on equity securities are valued at the mean between their latest bid and asked
prices. Futures are valued at the latest sale price on the commodities exchange
on which they trade unless the Trustees determine such price does not reflect
their market value, in which case they will be valued at their fair value as
determined in good faith under procedures established by and under the
supervision of the Trustees.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments, is substantially completed
each day at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the
Portfolios' shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events which may affect the values of such securities
and such exchange rates may occur between the times at which they are determined
and the close of the New York Stock Exchange and will therefore not be reflected
in the computation of a Portfolio's net asset value. If events that may affect
the value of such securities occur during such period, then these securities may
be valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees.

IX. TAXATION OF THE PORTFOLIOS AND SHAREHOLDERS
- --------------------------------------------------------------------------------

Each of the Portfolios is treated as a separate entity for federal tax
purposes. Each of the Portfolios intends to remain qualified as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986. As
such, each of the Portfolios will not be subject to federal income tax on its
net investment income and capital gains, if any, to the extent that it
distributes such income and capital gains to its shareholders. Each of the
Portfolios generally intends to distribute sufficient income and gains so that
each of the Portfolios will not pay corporate income tax on its earnings.

Section 817(h) of the Internal Revenue Code provides that the investments of
a separate account underlying a variable insurance contract (or the investments
of a mutual fund, the shares of which are owned by the variable separate
account) must be "adequately diversified" in order for the contract to be
treated as an annuity or life insurance for tax purposes. The Treasury
Department has issued regulations prescribing these diversification
requirements. Each Portfolio intends to comply with these requirements.

Information concerning the federal income tax consequences to holders of the
underlying variable annuity or variable life insurance Contracts is contained in
the accompanying prospectus for the applicable Contract.

38
<PAGE>
X. UNDERWRITERS
- --------------------------------------------------------------------------------

The Portfolios' shares are offered on a continuous basis. The Distributor,
as the principal underwriter of the shares, has certain obligations under the
Distribution Agreement concerning the distribution of the shares. These
obligations are described above in the section titled "Principal Underwriter."

XI. CALCULATION OF PERFORMANCE DATA
- --------------------------------------------------------------------------------

The annualized current yield of the MONEY MARKET PORTFOLIO, as may be quoted
from time to time in advertisements and other communications to shareholders and
potential investors, is computed by determining, for a stated seven-day period,
the net change, exclusive of capital changes and including the value of
additional shares purchased with dividends and any dividends declared therefrom,
in the value of a hypothetical pre-existing account having a balance of one
share at the beginning of the period, subtracting a hypothetical charge which
reflects deductions from shareholder accounts (such as management fees), and
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return, and then multiplying the base period
return by (365/7).

The MONEY MARKET PORTFOLIO'S annualized effective yield, as may be quoted
from time to time in advertisements and other communications to shareholders and
potential investors, is computed by determining (for the same stated seven-day
period as for the current yield), the net change, exclusive of capital changes
and including the value of additional shares purchased with dividends and any
dividends declared therefrom, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the based period return by adding 1, raising the sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.

The yields quoted in any advertisement or other communication should not be
considered a representation of the yields of the MONEY MARKET PORTFOLIO in the
future since the yield is not fixed. Actual yields will depend not only on the
type, quality and maturities of the investments held by the MONEY MARKET
PORTFOLIO and changes in interest rates on such investments, but also on changes
in the Portfolio's expenses during the period.

Yield information may be useful in reviewing the performance of the Money
Market Portfolio and for providing a basis for comparison with other investment
alternatives. However, unlike bank deposits or other investments which typically
pay a fixed yield for a stated period of time, the Money Market Portfolio's
yield fluctuates. Furthermore, the quoted yield does not reflect charges which
may be imposed on the Contracts by the applicable Account and therefore is not
equivalent to total return under a Contract. (For a description of such charges,
see the Prospectus for the Contracts which accompanies the PROSPECTUS for the
Fund.)

The current yield of the MONEY MARKET PORTFOLIO for the seven days ending
December 31, 1998 was %. The effective annual yield on % is %,
assuming daily compounding.

From time to time the Fund may quote the "yield" of each of the NORTH
AMERICAN GOVERNMENT SECURITIES PORTFOLIO, the DIVERSIFIED INCOME PORTFOLIO, and
the BALANCED GROWTH PORTFOLIO in advertising and sales literature. Yield is
calculated for any 30-day period as follows: the amount of interest and/or
dividend income for each security in the Portfolio is determined in accordance
with regulatory requirements; the total for the entire portfolio constitutes the
Portfolio's gross income for the period. Expenses accrued during the period are
subtracted to arrive at "net investment income." The resulting amount is divided
by the product of the net asset value per share on the last day of the period
multiplied by the average number of Portfolio shares outstanding during the
period that were entitled to dividends. This amount is added to 1 and raised to
the sixth power. 1 is then subtracted from the result and the difference is
multiplied by 2 to arrive at the annualized yield. The "yield" of a Portfolio
does not reflect the deduction of any charges which may be imposed on the
Contracts by the applicable Account which, if quoted, would reduce the yield
quoted. For the 30-day period ended December 31, 1998, the yield of the NORTH

39
<PAGE>
AMERICAN GOVERNMENT SECURITIES PORTFOLIO, calculated pursuant to this formula,
was %, the yield of the DIVERSIFIED INCOME PORTFOLIO, calculated pursuant to
this formula, was %, and the yield of the BALANCED GROWTH PORTFOLIO,
calculated pursuant to this formula, was %.

From time to time the Fund may quote the "total return" of each Portfolio in
advertising and sales literature. A Portfolio's "average annual total return"
represents an annualization of the Portfolio's total return over a particular
period and is computed by finding the annual percentage rate which will result
in the ending redeemable value of a hypothetical $1,000 investment made at the
beginning of a one, five or ten year period, or for the period from the date of
commencement of the Portfolio's operations, if shorter than any of the
foregoing. For the purpose of this calculation, it is assumed that all dividends
and distributions are reinvested. However, average annual total return does not
reflect the deduction of any charges which may be imposed on the Contracts by
the applicable Account which, if quoted, would reduce the performance quoted.
The formula for computing the average annual total return involves a percentage
obtained by dividing the ending redeemable value by the amount of the initial
investment, taking a root of the quotient (where the root is equivalent to the
number of years in the period) and subtracting 1 from the result.

The average annual total returns for each Portfolio (other than the MID-CAP
GROWTH PORTFOLIO) for the period from November 9, 1994 (commencement of
operations) through December 31, 1998 and for the fiscal year ended December 31,
1998 were % and %, respectively, for the MONEY MARKET PORTFOLIO; % and
%, respectively, for the NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO; %
and %, respectively, for the DIVERSIFIED INCOME PORTFOLIO; % and %,
respectively, for the BALANCED GROWTH PORTFOLIO; % and %, respectively,
for the UTILITIES PORTFOLIO; % and %, respectively, for the DIVIDEND
GROWTH PORTFOLIO; % and %, respectively, for the VALUE-ADDED MARKET
PORTFOLIO; % and %, respectively, for the GROWTH PORTFOLIO; % and %,
respectively, for the AMERICAN OPPORTUNITIES PORTFOLIO; % and %,
respectively, for the GLOBAL EQUITY PORTFOLIO; % and %, respectively, for
the DEVELOPING GROWTH PORTFOLIO; and % and %, respectively, for the
EMERGING MARKETS PORTFOLIO. The average annual total return for the MID-CAP
GROWTH PORTFOLIO for the year ended December 31, 1998 and for the period from
January 21, 1997 (commencement of the Portfolio's operations) through December
31, 1998 were % and %, respectively.

In addition to the foregoing, the Fund may advertise the total return of the
Portfolios over different periods of time by means of aggregate, average,
year-by-year or other types of total return figures. Such calculations similarly
do not reflect the deduction of any charges which may be imposed on the
Contracts by an Account. The Fund may also compute the aggregate total returns
of the Portfolios for specified periods by determining the aggregate percentage
rate which will result in the ending value of a hypothetical $1,000 investment
made at the beginning of the period. For the purpose of this calculation, it is
assumed that all dividends and distributions are reinvested. The formula for
computing aggregate total return involves a percentage obtained by dividing the
ending value (without the reduction for any charges imposed on the Contracts by
the applicable Account) by the initial $1,000 investment and subtracting 1 from
the result. Based on the foregoing calculation, the total returns for each
Portfolio (other than the MID-CAP GROWTH PORTFOLIO) for the period from November
9, 1994 (commencement of operations) through December 31, 1998 and for the
fiscal year ended December 31, 1998 were % and %, respectively, for the
MONEY MARKET PORTFOLIO; % and %, respectively, for the NORTH AMERICAN
GOVERNMENT SECURITIES PORTFOLIO; % and %, respectively, for the
DIVERSIFIED INCOME PORTFOLIO; % and %, respectively, for the BALANCED
GROWTH PORTFOLIO; % and %, respectively, for the UTILITIES PORTFOLIO; %
and %, respectively, for the DIVIDEND GROWTH PORTFOLIO; % and %,
respectively, for the VALUE-ADDED MARKET PORTFOLIO; % and %, respectively,
for the GROWTH PORTFOLIO; % and %, respectively, for the AMERICAN
OPPORTUNITIES PORTFOLIO; % and %, respectively, for the GLOBAL EQUITY
PORTFOLIO; % and %, respectively, for the DEVELOPING GROWTH PORTFOLIO; and
% and %, respectively, for the EMERGING MARKETS PORTFOLIO. Applying the
same calculation, the total returns for the MID-CAP GROWTH PORTFOLIO for the
year ended December 31, 1998 and for the period from January 21, 1997
(commencement of the Portfolio's operations) through December 31, 1998 were %
and %, respectively.

40
<PAGE>
The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in shares of a Portfolio by adding 1 to the
Portfolio's aggregate total return to date (expressed as a decimal) and
multiplying by $10,000, $50,000 or $100,000, as the case may be. Investments of
$10,000, $50,000 and $100,000 in each Portfolio of the Fund at inception
(January 21, 1997 in the case of the MID-CAP GROWTH PORTFOLIO and November 9,
1994 in the case of each of the other Portfolios) of the Portfolio would have
grown (or declined) to the following amounts at December 31, 1998:

<TABLE>
<CAPTION>
INVESTMENT AT COMMENCEMENT OF
OPERATIONS OF
-----------------------------------
NAME OF PORTFOLIO $10,000 $50,000 $100,000
- ---------------------------------------------------------------------------- --------- ----------- -----------
<S> <C> <C> <C>
Money Market Portfolio...................................................... $ 11,818 $ 59,090 $ 118,180
North American Government Securities Portfolio.............................. 11,831 59,155 118,310
Diversified Income Portfolio................................................ 12,788 63,940 127,880
Balanced Growth Portfolio................................................... 16,542 82,710 165,420
Utilities Portfolio......................................................... 17,679 88,395 176,790
Dividend Growth Portfolio................................................... 21,990 109,950 219,900
Value-Added Market Portfolio................................................ 18,743 93,715 187,430
Growth Portfolio............................................................ 17,343 86,715 173,430
American Opportunities Portfolio............................................ 20,848 104,240 208,480
Mid-Cap Growth Portfolio.................................................... 11,584 57,920 115,840
Global Equity Portfolio..................................................... 13,733 68,665 137,330
Developing Growth Portfolio................................................. 19,745 98,725 197,450
Emerging Markets Portfolio.................................................. 11,918 59,590 119,180
</TABLE>

The Fund from time to time may also advertise the performance of the
Portfolios relative to certain performance rankings and indexes compiled by
independent organizations.

XII. FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

EXPERTS. The financial statements of the Fund for the fiscal year ended
December 31, 1998 are included in this STATEMENT OF ADDITIONAL INFORMATION and
are incorporated by reference in the PROSPECTUS included herein in reliance on
the report of , independent accountants, given on the
authority of said firm as experts in auditing and accounting.

* * * * *

This STATEMENT OF ADDITIONAL INFORMATION and the PROSPECTUS do not contain
all of the information set forth in the REGISTRATION STATEMENT the Fund has
filed with the SEC. The complete REGISTRATION STATEMENT may be obtained from the
SEC.

41
<PAGE>

MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES

PART C OTHER INFORMATION

Item 23. EXHIBITS

1. Form of Amendment to the Declaration of Trust of the Registrant.

2. Amended and Restated By-Laws of the Registrant dated January 28,
1999.

4(a). Form of Amended Investment Management Agreement between the
Registrant and Morgan Stanley Dean Witter Advisors Inc.

4(b). Form of Sub-Advisory Agreement between the Registrant and Morgan
Stanley Dean Witter Investment Management Inc. (formerly Morgan
Stanley Asset Management Inc.).

8(a). Form of Amended and Restated Transfer Agency and Service
Agreement between the Registrant and Morgan Stanley Dean Witter
Trust FSB.

8(b). Form of Amended Services Agreement between Morgan Stanley Dean
Witter Advisors Inc. and Morgan Stanley Dean Witter Services
Company Inc.

14. Financial Data Schedules - to be filed by amendment.

All other exhibits were previously filed via EDGAR and are hereby incorporated
by reference.

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.

None

Item 25. INDEMNIFICATION

Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the Registrant's
trustees, officers, employees and agents is permitted if it is determined that
they acted under the belief that their actions were in or not opposed to the
best interest of the Registrant, and, with respect to any criminal proceeding,
they had reasonable cause to believe their conduct was not unlawful. In
addition, indemnification is permitted only if it is determined that the actions
in question did not render them liable by reason of willful misfeasance, bad
faith or gross negligence in the performance of their duties or by reason of
reckless disregard of their obligations and duties to the Registrant. Trustees,
officers, employees and agents will be indemnified for the expense of litigation
if it is determined that they are entitled to indemnification against any
liability established in such litigation. The Registrant may also advance money
for these expenses provided that they give their undertakings to repay the
Registrant unless their conduct is later determined to permit indemnification.

Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer,

1
<PAGE>

employee or agent of the Registrant shall be liable for any action or failure to
act, except in the case of bad faith, willful misfeasance, gross negligence or
reckless disregard of duties to the Registrant.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer, or controlling person of the Registrant
in connection with the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such trustee, officer or controlling person
in connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act, and will
be governed by the final adjudication of such issue.

The Registrant hereby undertakes that it will apply the indemnification
provision of its by-laws in a manner consistent with Release 11330 of the
Securities and Exchange Commission under the Investment Company Act of 1940, so
long as the interpretation of Sections 17(h) and 17(i) of such Act remains in
effect.

Registrant, in conjunction with the Investment Manager, Registrant's
Trustees, and other registered investment management companies managed by the
Investment Manager, maintains insurance on behalf of any person who is or was a
Trustee, officer, employee, or agent of Registrant, or who is or was serving at
the request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him and
incurred by him or arising out of his position. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for which
Registrant itself is not permitted to indemnify him.

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR

See "The Fund and Its Management" in the Prospectus regarding the business
of the investment advisor. The following information is given regarding
officers of Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"). MSDW
Advisors is a wholly-owned subsidiary of Morgan Stanley Dean Witter & Co. The
principal address of the Morgan Stanley Dean Witter Funds is Two World Trade
Center, New York, New York 10048.

The term "Morgan Stanley Dean Witter Funds" refers to the following
registered investment companies:

CLOSED-END INVESTMENT COMPANIES
(1) Morgan Stanley Dean Witter California Insured Municipal Income Trust
(2) Morgan Stanley Dean Witter California Quality Municipal Securities
(3) Morgan Stanley Dean Witter Government Income Trust
(4) Morgan Stanley Dean Witter High Income Advantage Trust
(5) Morgan Stanley Dean Witter High Income Advantage Trust II
(6) Morgan Stanley Dean Witter High Income Advantage Trust III
(7) Morgan Stanley Dean Witter Income Securities Inc.
(8) Morgan Stanley Dean Witter Insured California Municipal Securities
(9) Morgan Stanley Dean Witter Insured Municipal Bond Trust
(10) Morgan Stanley Dean Witter Insured Municipal Income Trust

2
<PAGE>

(11) Morgan Stanley Dean Witter Insured Municipal Securities
(12) Morgan Stanley Dean Witter Insured Municipal Trust
(13) Morgan Stanley Dean Witter Municipal Income Opportunities Trust
(14) Morgan Stanley Dean Witter Municipal Income Opportunities Trust II
(15) Morgan Stanley Dean Witter Municipal Income Opportunities Trust III
(16) Morgan Stanley Dean Witter Municipal Income Trust
(17) Morgan Stanley Dean Witter Municipal Income Trust II
(18) Morgan Stanley Dean Witter Municipal Income Trust III
(19) Morgan Stanley Dean Witter Municipal Premium Income Trust
(20) Morgan Stanley Dean Witter New York Quality Municipal Securities
(21) Morgan Stanley Dean Witter Prime Income Trust
(22) Morgan Stanley Dean Witter Quality Municipal Income Trust
(23) Morgan Stanley Dean Witter Quality Municipal Investment Trust
(24) Morgan Stanley Dean Witter Quality Municipal Securities

OPEN-END INVESTMENT COMPANIES
(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Money Trust
(4) Active Assets Tax-Free Trust
(5) Morgan Stanley Dean Witter Aggressive Equity Fund
(6) Morgan Stanley Dean Witter American Value Fund
(7) Morgan Stanley Dean Witter Balanced Growth Fund
(8) Morgan Stanley Dean Witter Balanced Income Fund
(9) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(10) Morgan Stanley Dean Witter California Tax-Free Income Fund
(11) Morgan Stanley Dean Witter Capital Growth Securities
(12) Morgan Stanley Dean Witter Competitive Edge Fund, "BEST IDEAS PORTFOLIO"
(13) Morgan Stanley Dean Witter Convertible Securities Trust
(14) Morgan Stanley Dean Witter Developing Growth Securities Trust
(15) Morgan Stanley Dean Witter Diversified Income Trust
(16) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(17) Morgan Stanley Dean Witter Equity Fund
(18) Morgan Stanley Dean Witter European Growth Fund Inc.
(19) Morgan Stanley Dean Witter Federal Securities Trust
(20) Morgan Stanley Dean Witter Financial Services Trust
(21) Morgan Stanley Dean Witter Fund of Funds
(22) Morgan Stanley Dean Witter Global Dividend Growth Securities
(23) Morgan Stanley Dean Witter Global Utilities Fund
(24) Morgan Stanley Dean Witter Growth Fund
(25) Morgan Stanley Dean Witter Hawaii Municipal Trust
(26) Morgan Stanley Dean Witter Health Sciences Trust
(27) Morgan Stanley Dean Witter High Yield Securities Inc.
(28) Morgan Stanley Dean Witter Income Builder Fund
(29) Morgan Stanley Dean Witter Information Fund
(30) Morgan Stanley Dean Witter Intermediate Income Securities
(31) Morgan Stanley Dean Witter International SmallCap Fund
(32) Morgan Stanley Dean Witter Japan Fund
(33) Morgan Stanley Dean Witter Limited Term Municipal Trust
(34) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(35) Morgan Stanley Dean Witter Market Leader Trust

3
<PAGE>

(36) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(37) Morgan Stanley Dean Witter Mid-Cap Growth Fund
(38) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(39) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(40) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(41) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(42) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(43) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(44) Morgan Stanley Dean Witter S&P 500 Index Fund
(45) Morgan Stanley Dean Witter S&P 500 Select Fund
(46) Morgan Stanley Dean Witter Select Dimensions Investment Series
(47) Morgan Stanley Dean Witter Select Municipal Reinvestment Fund
(48) Morgan Stanley Dean Witter Short-Term Bond Fund
(49) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(50) Morgan Stanley Dean Witter Special Value Fund
(51) Morgan Stanley Dean Witter Strategist Fund
(52) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(53) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(54) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(55) Morgan Stanley Dean Witter U.S. Government Securities Trust
(56) Morgan Stanley Dean Witter Utilities Fund
(57) Morgan Stanley Dean Witter Value-Added Market Series
(58) Morgan Stanley Dean Witter Value Fund
(59) Morgan Stanley Dean Witter Variable Investment Series
(60) Morgan Stanley Dean Witter World Wide Income Trust

The term "TCW/DW Funds" refers to the following registered investment
companies:

OPEN-END INVESTMENT COMPANIES
(1) TCW/DW Emerging Markets Opportunities Trust
(2) TCW/DW Global Telecom Trust
(3) TCW/DW Income and Growth Fund
(4) TCW/DW Latin American Growth Fund
(5) TCW/DW Mid-Cap Equity Trust
(6) TCW/DW North American Government Income Trust
(7) TCW/DW Small Cap Growth Fund
(8) TCW/DW Total Return Trust

CLOSED-END INVESTMENT COMPANIES
(1) TCW/DW Term Trust 2000
(2) TCW/DW Term Trust 2002
(3) TCW/DW Term Trust 2003

4
<PAGE>

NAME AND POSITION WITH OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
MORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
WITTER ADVISORS INC. AND NATURE OF CONNECTION
- ---------------------- -----------------------------------------------------------------------
<S> <C>
Mitchell M. Merin President and Chief Operating Officer of Asset Management of
President, Chief Executive Morgan Stanley Dean Witter & Co. ("MSDW"); Chairman and
Officer and Director Director of Morgan Stanley Dean Witter Distributors Inc.
("MSDW Distributors") and Morgan Stanley Dean Witter Trust FSB
("MSDW Trust"); President, Chief Executive Officer and Director
of Morgan Stanley Dean Witter Services Company Inc. ("MSDW Services");
Vice President of the Morgan Stanley Dean Witter Funds, TCW/DW
Funds and Discover Brokerage Index Series; Executive Vice President
and Director of Dean Witter Reynolds Inc. ("DWR"); Director of various
MSDW subsidiaries.

Thomas C. Schneider Executive Vice President and Chief Strategic and
Executive Vice Administrative Officer of MSDW; Executive Vice
President and Chief President and Chief Financial Officer of MSDW Services;
Financial Officer Director of DWR and MSDW.

Joseph J. McAlinden Vice President of the Morgan Stanley Dean Witter Funds and Discover Brokerage
Executive Vice President Index Series; Director of MSDW Trust.
and Chief Investment
Officer

Ronald E. Robison Executive Vice President, Chief Administrative Officer and
Executive Vice President, and Director of MSDW Services; Vice President of the
Chief Administrative Morgan Stanley Dean Witter Funds, TCW/DW Funds and
Officer and Director Discover Brokerage Index Series.

Edward C. Oelsner, III
Executive Vice President

Barry Fink Assistant Secretary of DWR; Senior Vice President,
Senior Vice President, Secretary, General Counsel and Director of MSDW
Secretary and General Services; Senior Vice President, Assistant Secretary and
Counsel Assistant General Counsel of MSDW Distributors; Vice
President, Secretary and General Counsel of the Morgan
Stanley Dean Witter Funds, TCW/DW Funds and
Discover Brokerage Index Series.

Peter M. Avelar Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Mark Bavoso Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Rosalie Clough
Senior Vice President
and Director of Marketing

5
<PAGE>

Edward F. Gaylor Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Robert S. Giambrone Senior Vice President of MSDW Services, MSDW
Senior Vice President Distributors and MSDW Trust and Director of MSDW Trust; Vice President
of the Morgan Stanley Dean Witter Funds, TCW/DW Funds and Discover Brokerage
Index Series.

Rajesh K. Gupta Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Kenton J. Hinchliffe Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds and Discover Brokerage Index Series.

Kevin Hurley Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Margaret Iannuzzi
Senior Vice President

Jenny Beth Jones Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

John B. Kemp, III President of MSDW Distributors.
Senior Vice President

Anita H. Kolleeny Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Jonathan R. Page Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Ira N. Ross Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Guy G. Rutherfurd, Jr. Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Rochelle G. Siegel Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

James Solloway
Senior Vice President

6
<PAGE>

Paul D. Vance Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Elizabeth A. Vetell
Senior Vice President
and Director of Shareholder
Communication

James F. Willison Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Douglas Brown
First Vice President

Frank Bruttomesso First Vice President and Assistant Secretary of MSDW
First Vice President Services; Assistant Secretary of the Morgan Stanley
and Assistant Secretary Dean Witter Funds, TCW/DW Funds and Discover Brokerage
Index Series.

Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President MSDW Services; Assistant Treasurer of MSDW
and Assistant Distributors; Treasurer and Chief Financial and
Treasurer Accounting Officer of the Morgan Stanley Dean
Witter Funds, TCW/DW Funds and Discover Brokerage
Index Series.
Thomas Chronert
First Vice President

Marilyn K. Cranney Assistant Secretary of DWR; First Vice President and
First Vice President Assistant Secretary of MSDW Services; Assistant
and Assistant Secretary Secretary of the Morgan Stanley Dean Witter Funds, TCW/DW
Funds and Discover Brokerage Index Series.

Salvatore DeSteno Vice President of MSDW Services.
First Vice President

Michael Interrante First Vice President and Controller of MSDW Services;
First Vice President Assistant Treasurer of MSDW Distributors; First Vice
and Controller President and Treasurer of MSDW Trust.

David Johnson
First Vice President

Stanley Kapica
First Vice President

<PAGE>

Carsten Otto First Vice President and Assistant Secretary of MSDW
First Vice President Services; Assistant Secretary of the Morgan Stanley
and Assistant Secretary Dean Witter Funds, TCW/DW Funds and Discover Brokerage
Index Series.

Ruth Rossi First Vice President and Assistant Secretary of MSDW
First Vice President Services; Assistant Secretary of the Morgan Stanley
and Assistant Secretary Dean Witter Funds, TCW/DW Funds and Discover Brokerage
Index Series.

James P. Wallin
First Vice President

Robert Zimmerman
First Vice President

Dale Albright
Vice President

Joan G. Allman
Vice President

Andrew Arbenz
Vice President

Joseph Arcieri Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Nancy Belza
Vice President

Maurice Bendrihem
Vice President and
Assistant Controller

Dale Boetcher
Vice President

Ronald Caldwell
Vice President

Joseph Cardwell
Vice President

Philip Casparius
Vice President

<PAGE>

Bruce Dunn
Vice President

Michael Durbin
Vice President

Sheila Finnerty Vice President of Morgan Stanley Dean Witter Prime
Vice President Income Trust.

Jeffrey D. Geffen
Vice President

Sandra Gelpieryn
Vice President

Michael Geringer
Vice President

Ellen Gold
Vice President

Stephen Greenhut
Vice President

Peter W. Gurman
Vice President

Matthew Haynes Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Peter Hermann Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

David Hoffman
Vice President

Christopher Jones
Vice President

Kevin Jung
Vice President

Carol Espejo Kane
Vice President

<PAGE>

Paula LaCosta Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Thomas Lawlor
Vice President

Todd Lebo Vice President and Assistant Secretary of MSDW
Vice President Services; Assistant Secretary of the Morgan Stanley
Dean Witter Funds, TCW/DW Funds and Discover Brokerage
Index Series.

Gerard J. Lian Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Nancy Login
Vice President

Steven MacNamara
Vice President

Catherine Maniscalco Vice President of Morgan Stanley Dean Witter Natural
Vice President Resource Development Securities Inc.

Albert McGarity
Vice President

Teresa McRoberts Vice President of Morgan Stanley Dean Witter S&P 500
Vice President Select Fund.

Sharon K. Milligan
Vice President

Mark Mitchell
Vice President

Julie Morrone
Vice President

Mary Beth Mueller
Vice President

David Myers Vice President of Morgan Stanley Dean Witter Natural
Vice President Resource Development Securities Inc.

Richard Norris
Vice President

George Paoletti Vice President of Morgan Stanley Dean Witter
Vice President Information Fund.

<PAGE>

Michael Roan
Vice President

John Roscoe
Vice President

Hugh Rose
Vice President

Robert Rossetti Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Carl F. Sadler
Vice President

Deborah Santaniello
Vice President

Howard A. Schloss Vice President of Morgan Stanley Dean Witter Federal
Vice President Securities Trust.

Peter J. Seeley Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Robert Stearns
Vice President

Naomi Stein
Vice President

Michael Strayhorn
Vice President

Kathleen H. Stromberg Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Marybeth Swisher
Vice President

Robert Vanden Assem
Vice President

Alice Weiss Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

<PAGE>

Item 27. PRINCIPAL UNDERWRITERS

(a) Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"),
a Delaware corporation, is the principal underwriter of the Registrant. MSDW
Distributors is also the principal underwriter of the following investment
companies:

(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Money Trust
(4) Active Assets Tax-Free Trust
(5) Morgan Stanley Dean Witter Aggressive Equity Fund
(6) Morgan Stanley Dean Witter American Value Fund
(7) Morgan Stanley Dean Witter Balanced Growth Fund
(8) Morgan Stanley Dean Witter Balanced Income Fund
(9) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(10) Morgan Stanley Dean Witter California Tax-Free Income Fund
(11) Morgan Stanley Dean Witter Capital Growth Securities
(12) Morgan Stanley Dean Witter Competitive Edge Fund, "BEST IDEAS PORTFOLIO"
(13) Morgan Stanley Dean Witter Convertible Securities Trust
(14) Morgan Stanley Dean Witter Developing Growth Securities Trust
(15) Morgan Stanley Dean Witter Diversified Income Trust
(16) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(17) Morgan Stanley Dean Witter Equity Fund
(18) Morgan Stanley Dean Witter European Growth Fund Inc.
(19) Morgan Stanley Dean Witter Federal Securities Trust
(20) Morgan Stanley Dean Witter Financial Services Trust
(21) Morgan Stanley Dean Witter Fund of Funds
(22) Morgan Stanley Dean Witter Global Dividend Growth Securities
(23) Morgan Stanley Dean Witter Global Utilities Fund
(24) Morgan Stanley Dean Witter Growth Fund
(25) Morgan Stanley Dean Witter Hawaii Municipal Trust
(26) Morgan Stanley Dean Witter Health Sciences Trust
(27) Morgan Stanley Dean Witter High Yield Securities Inc.
(28) Morgan Stanley Dean Witter Income Builder Fund
(29) Morgan Stanley Dean Witter Information Fund
(30) Morgan Stanley Dean Witter Intermediate Income Securities
(31) Morgan Stanley Dean Witter International SmallCap Fund
(32) Morgan Stanley Dean Witter Japan Fund
(33) Morgan Stanley Dean Witter Limited Term Municipal Trust
(34) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(35) Morgan Stanley Dean Witter Market Leader Trust
(36) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(37) Morgan Stanley Dean Witter Mid-Cap Growth Fund

<PAGE>

(38) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(39) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(40) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(41) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(42) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(43) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(44) Morgan Stanley Dean Witter Prime Income Trust
(45) Morgan Stanley Dean Witter S&P 500 Index Fund
(46) Morgan Stanley Dean Witter S&P 500 Select Fund
(47) Morgan Stanley Dean Witter Short-Term Bond Fund
(48) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(49) Morgan Stanley Dean Witter Special Value Fund
(50) Morgan Stanley Dean Witter Strategist Fund
(51) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(52) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(53) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(54) Morgan Stanley Dean Witter U.S. Government Securities Trust
(55 Morgan Stanley Dean Witter Utilities Fund
(56) Morgan Stanley Dean Witter Value-Added Market Series
(57) Morgan Stanley Dean Witter Value Fund
(58) Morgan Stanley Dean Witter Variable Investment Series
(59) Morgan Stanley Dean Witter World Wide Income Trust
(1) TCW/DW Emerging Markets Opportunities Trust
(2) TCW/DW Global Telecom Trust
(3) TCW/DW Income and Growth
(4) TCW/DW Latin American Growth Fund
(5) TCW/DW Mid-Cap Equity Trust
(6) TCW/DW North American Government Income Trust
(7) TCW/DW Small Cap Growth Fund
(8) TCW/DW Total Return Trust

(b) The following information is given regarding directors and officers of MSDW
Distributors not listed in Item 26 above. The principal address of MSDW
Distributors is Two World Trade Center, New York, New York 10048. Other
than Mr. Purcell, who is a Trustee of the Registrant, none of the following
persons has any position or office with the Registrant.

NAME POSITIONS AND OFFICE WITH MSDW DISTRIBUTORS
- ---- -------------------------------------------
<S> <C>
Christine Edwards Executive Vice President, Secretary, Director and Chief Legal Officer.

Michael T. Gregg Vice President and Assistant Secretary.

James F. Higgins Director

Fredrick K. Kubler Senior Vice President, Assistant Secretary and Chief Compliance
Officer.

Philip J. Purcell Director

<PAGE>

John Schaeffer Director

Charles Vidala Senior Vice President and Financial Principal
</TABLE>

Item 28. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained by the Investment Manager at its offices, except records relating to
holders of shares issued by the Registrant, which are maintained by the
Registrant's Transfer Agent, at its place of business as shown in the
prospectus.

Item 29. MANAGEMENT SERVICES

Registrant is not a party to any such management-related service contract.

Item 30. UNDERTAKINGS

None
14

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 26th day of February, 1999.

MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES

By: /s/ Barry Fink
--------------
Barry Fink
Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 8 has been signed below by the following persons in
the capacities and on the dates indicated.

SIGNATURES TITLE DATE
---------- ----- ----

(1) Principal Executive Officer President, Chief
Executive Officer,
By: /s/ Charles A. Fiumefreddo Trustee and Chairman 2/26/99
------------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By: /s/ Thomas F. Caloia 2/26/99
--------------------
Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)
Philip J. Purcell

By: /s/ Barry Fink 2/26/99
------------
Barry Fink
Attorney-in-Fact

Michael Bozic Manuel H. Johnson
Edwin J. Garn Michael E. Nugent
John R. Haire John L. Schroeder
Wayne E. Hedien

By: /s/ David M. Butowsky 2/26/99
--------------------
David M. Butowsky
Attorney-in-Fact
<PAGE>

MORGAN STANLEY DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES
EXHIBIT INDEX

1. Form of Amendment to the Declaration of Trust of the
Registrant.

2. Amended and Restated By-Laws of the Registrant dated January
28, 1999.

4(a). Form of Amended Investment Management Agreement between the
Registrant and Morgan Stanley Dean Witter Advisors Inc.

4(b). Form of Sub-Advisory Agreement between the Registrant and
Morgan Stanley Dean Witter Investment Management Inc.
(formerly Morgan Stanley Asset Management Inc.).

8(a). Form of Amended and Restated Transfer Agency and
Service Agreement between the Registrant and Morgan Stanley
Dean Witter Trust FSB.

8(b). Form of Amended Services Agreement between Morgan Stanley
Dean Witter Advisors Inc. and Morgan Stanley Dean Witter
Services Company Inc.

14. Financial Data Schedules - to be filed by amendment.

<PAGE>

CERTIFICATE

The undersigned hereby certifies that he is the Secretary of Dean Witter
Select Dimensions Investment Series (the "Trust"), an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts, that
annexed hereto is an Amendment to the Declaration of Trust of the Trust adopted
by the Trustees of the Trust on April 30, 1998 as provided in Section 9.3 of the
said Declaration, said Amendment to take effect on June 22, 1998, and I do
hereby further certify that such amendment has not been amended and is on the
date hereof in full force and effect.

Dated this 22nd day of June, 1998.

/s/ Barry Fink
--------------------------------
Barry Fink
Secretary

<PAGE>

AMENDMENT

Dated: June 22, 1998

To be Effective: June 22, 1998

DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES

DECLARATION OF TRUST

DATED

JUNE 2,1994

<PAGE>

Amendment dated June 22, 1998 to the Declaration of Trust (the "Declaration")
of Dean Witter Select Dimensions Investment Series (the "Trust")
dated June 2, 1994

WHEREAS, the Trust was established by the Declaration on the date
hereinabove set forth under the laws of the Commonwealth of Massachusetts; and

WHEREAS, the Trustees of the Trust have deemed it advisable to change the
name of the Trust to "Morgan Stanley Dean Witter Select Dimensions Investment
Series," such change to be effective on June 22,1998;

NOW, THEREFORE:

1. Section 1.1 of Article I of the Declaration is hereby amended so that
that Section shall read in its entirety as follows:

"Section 1.1 NAME. The name of the Trust created hereby is the Morgan
Stanley Dean Witter Select Dimensions Investment Series
and so far as may be practicable the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued under
that name, which name (and the word "Trust" whenever herein used)
shall refer to the Trustees as Trustees, and not as individuals, or
personally, and shall not refer to the officers, agents, employees or
Shareholders of the Trust. Should the Trustees determine that the use
of such name is not advisable, they may use such other name for the
Trust as they deem proper and the Trust may hold its property and
conduct its activities under such other name."

2. Subsection (o) of Section 1.2 of Article I of the Declaration is hereby
amended so that that Subsection shall read in its entirety as follows:

"Section 1.2 DEFINITIONS

"(o) "TRUST" means the Morgan Stanley Dean Witter Select Dimensions
Investment Series."

3. Section 11.7 of Article XI of the Declaration is hereby amended so that
that Section shall read as follows:

"Section 11.7 USE OF THE NAME "MORGAN STANLEY DEAN WITTER." Morgan
Stanley Dean Witter & Co. ("MSDW") has consented to the use by the
Trust of the identifying name "Morgan Stanley Dean Witter," which is a
property right of MSDW. The Trust will only use

<PAGE>

the name "Morgan Stanley Dean Witter" as a component of its name and
for no other purpose, and will not purport to grant to any third party
the right to use the name "Morgan Stanley Dean Witter" for any
purpose. MSDW, or any corporate affiliate of MSDW, may use or grant
to others the right to use the name "Morgan Stanley Dean Witter," or
any combination or abbreviation thereof, as all or a portion of a
corporate or business name or for any commercial purpose, including a
grant of such right to any other investment company. At the request
of MSDW or any corporate affiliate of MSDW, the Trust will take such
action as may be required to provide its consent to the use of the
name "Morgan Stanley Dean Witter," or any combination or abbreviation
thereof, by MSDW or any corporate affiliate of MSDW, or by any person
to whom MSDW or a corporate affiliate of MSDW shall have granted the
right to such use. Upon the termination of any investment advisory
agreement into which a corporate affiliate of MSDW and the Trust may
enter, the Trust shall, upon request of MSDW or any corporate
affiliate of MSDW, cease to use the name "Morgan Stanley Dean Witter"
as a component of its name, and shall not use the name, or any
combination or abbreviation thereof, as part of its name or for any
other commercial purpose, and shall cause its officers, Trustees and
Shareholders to take any and all actions which MSDW or any corporate
affiliate of MSDW may request to effect the foregoing and to reconvey
to MSDW any and all rights to such name."

4. The Trustees of the Trust hereby reaffirm the Declaration, as amended,
in all respects.

5. This Amendment may be executed in more than one counterpart, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.

<PAGE>

IN WITNESS WHEREOF, the undersigned, the Trustees of the Trust, have executed
this instrument this 22nd day of June, 1998.

/s/ Michael Bozic /s/ Manuel H. Johnson
- ----------------------------------- ------------------------------------
Michael Bozic, as Trustee Manuel H. Johnson, as Trustee
and not individually and not individually
c/o Levitz Furniture Corp. c/o Johnson Smick International Inc.
6111 Broken Sound Parkway, NW 1133 Connecticut Avenue, NW
Boca Raton, FL 33487 Washington, D.C. 20036

/s/ Charles A. Fiumefreddo /s/ Michael E. Nugent, as Trustee
- ----------------------------------- ------------------------------------
Charles A. Fiumefreddo, as Trustee and not individually
and not individually c/o Triumph Capital, L.P.
Two World Trade Center 237 Park Avenue
New York, NY 10048 New York, NY 10017

/s/ Edwin J. Garn /s/ Philip J. Purcell
- ----------------------------------- ------------------------------------
Edwin J. Garn, as Trustee Philip J. Purcell, as Trustee
and not individually and not individually
c/o Huntsman Corporation 1585 Broadway
500 Huntsman Way New York, NY 10036
Salt Lake City, UT 84111

/s/ John R. Haire /s/ John L. Schroeder
- ----------------------------------- ------------------------------------
John R. Haire, as Trustee John L. Schroeder, as Trustee
and not individually and not individually
Two World Trade Center c/o Gordon Altman
New York, NY 10048 Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, NY 10036

/s/ Wayne E. Hedien
- -----------------------------------
Wayne E. Hedien, as Trustee
and not individually
c/o Gordon Altman Butowsky Weitzen
Shalov & Wein
Counsel to the Independent Trustees
114 West 47th Street
New York, NY 10036

<PAGE>

STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )

On this 22nd day of June, 1998, MICHAEL BOZIC, CHARLES A. FIUMEFREDDO,
EDWIN J. GARN, JOHN R. HAIRE, WAYNE E. HEDIEN, MANUEL H. JOHNSON,
MICHAEL E. NUGENT, PHILIP J. PURCELL and JOHN L. SCHROEDER, known to
me to be the individuals described in and who executed the foregoing
instrument, personally appeared before me and they severally
acknowledged the foregoing instrument to be their free act and deed.

/s/ Marilyn K. Cranney
----------------------
Notary Public

MARILYN K. CRANNEY
NOTARY PUBLIC, State of New York
No. 24-4795538
Qualified in Kings County
Commission Expires May 31, 1999

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BY-LAWS

MORGAN STANLEY DEAN WITTER SELECT
DIMENSIONS INVESTMENT SERIES
AMENDED AND RESTATED AS OF JANUARY 28, 1999

ARTICLE I

DEFINITIONS

The terms "COMMISSION," "DECLARATION," "DISTRIBUTOR," "INVESTMENT
ADVISER," "MAJORITY SHAREHOLDER VOTE," "1940 ACT," "SHAREHOLDER," "SHARES,"
"TRANSFER AGENT," "TRUST," "TRUST PROPERTY," and "TRUSTEES" have the
respective meanings given them in the Declaration of Trust of Morgan Stanley
Dean Witter Select Dimensions Investment Series dated June 2, 1994, as
amended from time to time.

ARTICLE II

OFFICES

SECTION 2.1. PRINCIPAL OFFICE. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.

SECTION 2.2. OTHER OFFICES. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.

ARTICLE III

SHAREHOLDERS' MEETINGS

SECTION 3.1. PLACE OF MEETINGS. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.

SECTION 3.2. MEETINGS. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the
provisions of Section 16(a) of the 1940 Act, for that purpose. Meetings of
Shareholders shall also be called by the Secretary upon the written request
of the holders of Shares entitled to vote as otherwise required by Section
16(c) of the 1940 Act and to the extent required by the corporate or business
statute of any state in which the Shares of the Trust are sold, as made
applicable to the Trust by the provisions of Section 2.3 of the Declaration.
Such request shall state the purpose or purposes of such meeting and the
matters proposed to be acted on thereat. Except to the extent otherwise
required by Section 16(c) of the 1940 Act, as made applicable to the Trust by
the provisions of Section 2.3 of the Declaration, the Secretary shall inform
such Shareholders of the reasonable estimated cost of preparing and mailing
such notice of the meeting, and upon payment to the Trust of such costs, the
Secretary shall give notice stating the purpose or purposes of the meeting to
all entitled to vote at such meeting. No meeting need be called upon the
request of the holders of Shares entitled to cast less than a majority of all
votes entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any meeting of Shareholders
held during the preceding twelve months.

SECTION 3.3. NOTICE OF MEETINGS. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.

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SECTION 3.4. QUORUM AND ADJOURNMENT OF MEETINGS. Except as otherwise
provided by law, the Declaration or by these By-Laws, at all meetings of
Shareholders, the holders of a majority of the Shares issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall be requisite and shall constitute a quorum for the transaction of
business. In the absence of a quorum, the Shareholders present or represented
by proxy and entitled to vote thereat shall have the power to adjourn the
meeting from time to time. The Shareholders present in person or represented
by proxy at any meeting and entitled to vote thereat also shall have the
power to adjourn the meeting from time to time if the vote required to
approve or reject any proposal described in the original notice of such
meeting is not obtained (with proxies being voted for or against adjournment
consistent with the votes for and against the proposal for which the required
vote has not been obtained). The affirmative vote of the holders of a
majority of the Shares then present in person or represented by proxy shall
be required to adjourn any meeting. Any adjourned meeting may be reconvened
without further notice. At any reconvened meeting at which a quorum shall be
present, any business may be transacted that might have been transacted at
the meeting as originally called.

SECTION 3.5. VOTING RIGHTS, PROXIES. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy for each Share of beneficial interest of the Trust
and for the fractional portion of one vote for each fractional Share entitled
to vote so registered in his or her name on the records of the Trust on the
date fixed as the record date for the determination of Shareholders entitled
to vote at such meeting. Without limiting the manner in which a Shareholder
may authorize another person or persons to act for such Shareholder as proxy
pursuant hereto, the following shall constitute a valid means by which a
Shareholder may grant such authority:

(i) A Shareholder may execute a writing authorizing another person or
persons to act for such Shareholder as proxy. Execution may be
accomplished by the Shareholder or such Shareholder's authorized
officer, director, employee, attorney-in-fact or another agent signing
such writing or causing such person's signature to be affixed to such
writing by any reasonable means including, but not limited to, by
facsimile or telecopy signature. No written evidence of authority of a
Shareholder's authorized officer, director, employee, attorney-in-fact
or other agent shall be required; and

(ii) A Shareholder may authorize another person or persons to act for
such Shareholder as proxy by transmitting or authorizing the
transmission of a telegram or cablegram or by other means of
telephonic, electronic or computer transmission to the person who will
be the holder of the proxy or to a proxy solicitation firm, proxy
support service organization or like agent duly authorized by the
person who will be the holder of the proxy to receive such
transmission, provided that any such telegram or cablegram or other
means of telephonic, electronic or computer transmission must either
set forth or be submitted with information from which it can be
determined that the telegram, cablegram or other transmission was
authorized by the Shareholder.

No proxy shall be valid after eleven months from its date, unless otherwise
provided in the proxy. At all meetings of Shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualification of
voters and the validity of proxies and the acceptance or rejection of votes
shall be decided by the chairman of the meeting. In determining whether a
telegram, cablegram or other electronic transmission is valid, the chairman
or inspector, as the case may be, shall specify the information upon which he
or she relied. Pursuant to a resolution of a majority of the Trustees,
proxies may be solicited in the name of one or more Trustees or Officers of
the Trust. Proxy solicitations may be made in writing or by using telephonic
or other electronic solicitation procedures that include appropriate methods
of verifying the identity of the Shareholder and confirming any instructions
given thereby.

SECTION 3.6. VOTE REQUIRED. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority
Shareholder Vote.

SECTION 3.7. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any

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Shareholder or his proxy shall, appoint Inspectors of Election of the
meeting. In case any person appointed as Inspector fails to appear or fails
or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting as chairman. The Inspectors of Election shall determine the
number of Shares outstanding, the Shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies,
shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results,
and do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or
of any Shareholder or his proxy, the Inspectors of Election shall make a
report in writing of any challenge or question or matter determined by them
and shall execute a certificate of any facts found by them.

SECTION 3.8. INSPECTION OF BOOKS AND RECORDS. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under Section 32 of the Business Corporation Law
of the Commonwealth of Massachusetts.

SECTION 3.9. ACTION BY SHAREHOLDERS WITHOUT MEETING. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.

SECTION 3.10. PRESENCE AT MEETINGS. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other
electronic means.

ARTICLE IV

TRUSTEES

SECTION 4.1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as shall be
determined from time to time by the Trustees without further notice. Special
meetings of the Trustees may be called at any time by the President and shall
be called by the President or the Secretary upon the written request of any
two (2) Trustees.

SECTION 4.2. NOTICE OF SPECIAL MEETINGS. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.

SECTION 4.3. TELEPHONE MEETINGS. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.

SECTION 4.4. QUORUM, VOTING AND ADJOURNMENT OF MEETINGS. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.

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SECTION 4.5. ACTION BY TRUSTEES WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.

SECTION 4.6. EXPENSES AND FEES. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.

SECTION 4.7. EXECUTION OF INSTRUMENTS AND DOCUMENTS AND SIGNING OF CHECKS
AND OTHER OBLIGATIONS AND TRANSFERS. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the Chairman, the President, any Vice
President or the Treasurer or by any one or more officers or agents of the
Trust as shall be designated for that purpose by vote of the Trustees;
notwithstanding the above, nothing in this Section 4.7 shall be deemed to
preclude the electronic authorization, by designated persons, of the Trust's
Custodian (as described herein in Section 9.1) to transfer assets of the
Trust, as provided for herein in Section 9.1.

SECTION 4.8. INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
AGENTS. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.

(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.

(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

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(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).

(2) The determination shall be made:

(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or

(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a written
opinion; or

(iii) By the Shareholders.

(3) Notwithstanding any provision of this Section 4.8, no person
shall be entitled to indemnification for any liability, whether or not there
is an adjudication of liability, arising by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duties as described in
Section 17(h) and (i) of the Investment Company Act of 1940 ("disabling
conduct"). A person shall be deemed not liable by reason of disabling conduct
if, either:

(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or

(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--

(A) a majority of a quorum of Trustees who are neither
"interested persons" of the Trust, as defined in Section 2(a)(19) of
the Investment Company Act of 1940, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:

(1) authorized in the specific case by the Trustees; and

(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by the
Trust; and

(3) either, (i) such person provides a security for his undertaking,
or

(ii) the Trust is insured against losses by reason of any lawful
advances, or

(iii) a determination, based on a review of readily available
facts, that there is reason to believe that such person ultimately will
be found entitled to indemnification, is made by either--

(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no

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person may satisfy any right of indemnity or reimbursement granted herein or
to which he may be otherwise entitled except out of the property of the
Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.

(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such. However, in no event will the Trust
purchase insurance to indemnify any officer or Trustee against liability for
any act for which the Trust itself is not permitted to indemnify him.

(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

ARTICLE V

COMMITTEES

SECTION 5.1. EXECUTIVE AND OTHER COMMITTEES. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.

The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.

All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.

SECTION 5.2. ADVISORY COMMITTEE. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.

SECTION 5.3. COMMITTEE ACTION WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.

ARTICLE VI

OFFICERS

SECTION 6.1. EXECUTIVE OFFICERS. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute,

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acknowledge or verify any instrument in more than one capacity. The executive
officers of the Trust shall be elected annually by the Trustees and each
executive officer so elected shall hold office until his successor is elected
and has qualified.

SECTION 6.2. OTHER OFFICERS AND AGENTS. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and may elect, or may delegate to the President the power to
appoint, such other officers and agents as the Trustees shall at any time or
from time to time deem advisable.

SECTION 6.3. TERM AND REMOVAL AND VACANCIES. Each officer of the Trust
shall hold office until his successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in
their judgment, the best interests of the Trust will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed.

SECTION 6.4. COMPENSATION OF OFFICERS. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the President to
the extent provided by the Trustees with respect to officers appointed by the
President.

SECTION 6.5. POWER AND DUTIES. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws, or to the extent not so provided, as may be prescribed by the
Trustees; provided, that no rights of any third party shall be affected or
impaired by any such By-Law or resolution of the Trustees unless he has
knowledge thereof.

SECTION 6.6. THE CHAIRMAN. The Chairman shall preside at all meetings of
the Shareholders and of the Trustees, shall be a signatory on all Annual and
Semi-Annual Reports as may be sent to shareholders, and he shall perform such
other duties as the Trustees may from time to time prescribe.

SECTION 6.7. THE PRESIDENT. (a) The President shall be the chief executive
officer of the Trust; he shall have general and active management of the
business of the Trust, shall see that all orders and resolutions of the
Trustees are carried into effect, and, in connection therewith, shall be
authorized to delegate to one or more Vice Presidents such of his powers and
duties at such times and in such manner as he may deem advisable.

(b) In the absence of the Chairman, the President shall preside at all
meetings of the shareholders and the Board of Trustees; and he shall perform
such other duties as the Board of Trustees may from time to time prescribe.

SECTION 6.8. THE VICE PRESIDENTS. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Trustees. The Vice President, or, if there be more than one, the Vice
Presidents in the order of their seniority as may be determined from time to
time by the Trustees or the President, shall, in the absence or disability of
the President, exercise the powers and perform the duties of the President,
and he or they shall perform such other duties as the Trustees or the
President may from time to time prescribe.

SECTION 6.9. THE ASSISTANT VICE PRESIDENTS. The Assistant Vice President,
or, if there be more than one, the Assistant Vice Presidents, shall perform
such duties and have such powers as may be assigned them from time to time by
the Trustees or the President.

SECTION 6.10. THE SECRETARY. The Secretary shall attend all meetings of
the Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Trustees in a book
to be kept for that purpose, and shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the Shareholders and special meetings of the Trustees, and shall
perform such other duties and have such powers as the Trustees, or the
President, may from time to time prescribe. He shall keep in safe custody the
seal of the Trust and affix or cause the same to be affixed to any instrument
requiring it, and, when so affixed, it shall be attested by his signature or
by the signature of an Assistant Secretary.

<PAGE>

SECTION 6.11. THE ASSISTANT SECRETARIES. The Assistant Secretary, or, if
there be more than one, the Assistant Secretaries in the order determined by
the Trustees or the President, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such duties and have such other powers as the Trustees or the
President may from time to time prescribe.

SECTION 6.12. THE TREASURER. The Treasurer shall be the chief financial
officer of the Trust. He shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and
he shall render to the Trustees and the President, whenever any of them
require it, an account of his transactions as Treasurer and of the financial
condition of the Trust; and he shall perform such other duties as the
Trustees, or the President, may from time to time prescribe.

SECTION 6.13. THE ASSISTANT TREASURERS. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in the order
determined by the Trustees or the President, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers
as the Trustees, or the President, may from time to time prescribe.

SECTION 6.14. DELEGATION OF DUTIES. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.

ARTICLE VII

DIVIDENDS AND DISTRIBUTIONS

Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.

Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.

ARTICLE VIII

CERTIFICATES OF SHARES

SECTION 8.1. CERTIFICATES OF SHARES. Certificates for Shares of each
series or class of Shares shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to change such
form and design at any time or from time to time, and shall be entered in the
records of the Trust as they are issued. Each such certificate shall bear a
distinguishing number; shall exhibit the holder's name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of the
Trust by the President, or a Vice President, and countersigned by the
Secretary or an Assistant Secretary or the Treasurer and an Assistant
Treasurer of the Trust; shall be sealed with the seal; and shall contain such
recitals as may be required by law. Where any certificate is signed by a
Transfer Agent or by a Registrar, the signature of such officers and the seal
may be facsimile, printed or engraved. The Trust may, at its option,
determine not to issue a certificate or certificates to evidence Shares owned
of record by any Shareholder.

In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.

<PAGE>

No certificate shall be issued for any share until such share is fully
paid.

SECTION 8.2. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The
Trustees may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representative, to give to the Trust and to such Registrar, Transfer Agent
and/or Transfer Clerk as may be authorized or required to countersign such
new certificate or certificates, a bond in such sum and of such type as they
may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them on
account of or in connection with the alleged loss, theft or destruction of
any such certificate.

ARTICLE IX

CUSTODIAN

SECTION 9.1. APPOINTMENT AND DUTIES. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:

(1) to receive and hold the securities owned by the Trust and
deliver the same upon written or electronically transmitted order;

(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the Trustees
may direct;

(3) to disburse such funds upon orders or vouchers;

all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.

The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.

SECTION 9.2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.

ARTICLE X

WAIVER OF NOTICE

Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.

<PAGE>

ARTICLE XI

MISCELLANEOUS

SECTION 11.1. LOCATION OF BOOKS AND RECORDS. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.

SECTION 11.2. RECORD DATE. The Trustees may fix in advance a date as the
record date for the purpose of determining the Shareholders entitled to (i)
receive notice of, or to vote at, any meeting of Shareholders, or (ii)
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. The
record date, in any case, shall not be more than ninety (90) days, and in the
case of a meeting of Shareholders not less than ten (10) days, prior to the
date on which such meeting is to be held or the date on which such other
particular action requiring determination of Shareholders is to be taken, as
the case may be. In the case of a meeting of Shareholders, the meeting date
set forth in the notice to Shareholders accompanying the proxy statement
shall be the date used for purposes of calculating the 90 day or 10 day
period, and any adjourned meeting may be reconvened for up to 60 days from
the original meeting without a change in record date. In lieu of fixing a
record date, the Trustees may provide that the transfer books shall be closed
for a stated period but not to exceed, in any case, twenty (20) days. If the
transfer books are closed for the purpose of determining Shareholders
entitled to notice of a vote at a meeting of Shareholders, such books shall
be closed for at least ten (10) days immediately preceding the meeting.

SECTION 11.3. SEAL. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.

SECTION 11.4. FISCAL YEAR. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.

SECTION 11.5. ORDERS FOR PAYMENT OF MONEY. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.

ARTICLE XII

COMPLIANCE WITH FEDERAL REGULATIONS

The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.

ARTICLE XIII

AMENDMENTS

These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.

<PAGE>

ARTICLE XIV

DECLARATION OF TRUST

The Declaration of Trust establishing Morgan Stanley Dean Witter Select
Dimensions Investment Series, dated June 2, 1994, a copy of which, together
with all amendments thereto, is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name Morgan Stanley Dean
Witter Select Dimensions Investment Series refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally;
and no Trustee, Shareholder, officer, employee or agent of Morgan Stanley
Dean Witter Select Dimensions Investment Series shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise, in connection with the
affairs of said Morgan Stanley Dean Witter Select Dimensions Investment
Series, but the Trust Estate only shall be liable.

<PAGE>
EXHIBIT 4(a)

INVESTMENT MANAGEMENT AGREEMENT

AGREEMENT made as of the 31st day of May, 1997, and amended as of March
2, 1998 and May 1, 1998, by and between Dean Witter Select Dimensions
Investment Series, an unincorporated business trust organized under the laws
of the Commonwealth of Massachusetts (hereinafter called the "Fund"), and
Dean Witter InterCapital Inc., a Delaware corporation (hereinafter called the
"Investment Manager"):

WHEREAS, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and

WHEREAS, The Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, and engages in the business of
acting as investment adviser; and

WHEREAS, The Fund is authorized to issue shares of beneficial interest
in separate portfolios (the "Portfolios") with each Portfolio representing
interests in a separate portfolio of securities and other assets; and

WHEREAS, The Fund currently offers shares in thirteen Portfolios, such
Portfolios together with all other Portfolios subsequently established by the
Fund with respect to which the Fund desires to retain the Investment Manager
to render management and investment advisory services in the manner and on
the terms and conditions hereinafter set forth being collectively referred to
as the "Portfolios;" and

WHEREAS, The Investment Manager desires to be retained to perform
services on said terms and conditions:

Now, Therefore, this Agreement

W I T N E S S E T H:

that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:

1. The Fund hereby retains the Investment Manager to act as investment
manager of the Portfolios and, subject to the supervision of the Trustees, to
supervise the investment activities of the Portfolios as hereinafter set
forth. Without limiting the generality of the foregoing, the Investment
Manager: shall obtain and evaluate such information and advice relating to
the economy, securities and commodities markets and securities and
commodities as it deems necessary or useful to discharge its duties
hereunder; with respect to the Portfolios other than such Portfolios in
respect of which a Sub-Advisory Agreement is in effect in accordance with
paragraph 2 hereof, shall continuously manage the assets of the Portfolios in
a manner consistent with the investment objectives and policies of the
Portfolios and shall determine the securities and commodities to be
purchased, sold or otherwise disposed of by the Portfolios and the timing of
such purchases, sales and dispositions; with respect to the Portfolios in
respect of which a Sub-Advisory Agreement is in effect in accordance with
paragraph 2 hereof, shall supervise the management of the assets of the
Portfolio in a manner consistent with the investment objectives and policies
of the Portfolio and subject to such other limitations and directions as the
Trustees of the Fund may from time to time prescribe; and shall take such
further action, including the placing of purchase and sale orders on behalf
of the Portfolios other than the Portfolios in respect of which a
Sub-Advisory Agreement is in effect in accordance with paragraph 2 hereof, as
the Investment Manager shall deem necessary or appropriate. The Investment
Manager shall also furnish to or place at the disposal of the Fund such of
the information, evaluations, analyses and opinions formulated or obtained by
the Investment Manager in the discharge of its duties as the Fund may, from
time to time, reasonably request.

In the event the Fund establishes another Portfolio other than the
current Portfolios with respect to which it desires to retain the Investment
Manager to render investment advisory services hereunder, it shall notify the
Investment Manager in writing. If the Investment Manager is willing to render
such services, it shall notify the Fund in writing, whereupon such other
Portfolio shall become a Portfolio hereunder.

<PAGE>

2. The Investment Manager may, at its own expense, from time to time
and in its discretion, enter into a Sub-Advisory Agreement or Sub-Advisory
Agreements in respect of any of the Portfolios with a Sub-Adviser or
Sub-Advisers to make determinations as to the securities and commodities to
be purchased, sold or otherwise disposed of by the Portfolio and the timing
of such purchases, sales and dispositions and to take such further action,
including the placing of purchase and sale orders on behalf of the Portfolio,
as the Sub-Adviser, in consultation with the Investment Manager, shall deem
necessary or appropriate; provided that the Investment Manager shall be
responsible for monitoring compliance by such Sub-Adviser with the investment
policies and restrictions of the Portfolio and with such other limitations or
directions as the Trustees of the Fund may from time to time prescribe. Upon
the termination of any such Sub-Advisory Agreement, the Investment Manager
may assume all of the duties that were the responsibility of the Sub-Adviser
under the Sub-Advisory Agreement.

3. The Investment Manager shall, at its own expense, maintain such
staff and employ or retain such personnel and consult with such other persons
as it shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Investment
Manager shall be deemed to include persons employed or otherwise retained by
the Investment Manager to furnish statistical and other factual data, advice
regarding economic factors and trends, information with respect to technical
and scientific developments, and such other information, advice and
assistance as the Investment Manager may desire. The Investment Manager
shall, as agent for the Fund, maintain the Fund's records and books of
account (other than those maintained by the Fund's transfer agent, registrar,
custodian and other agencies). All such books and records so maintained shall
be the property of the Fund and, upon request therefor, the Investment
Manager shall surrender to the Fund such of the books and records so
requested.

4. The Fund will, from time to time, furnish or otherwise make
available to the Investment Manager such financial reports, proxy statements
and other information relating to the business and affairs of the Fund as the
Investment Manager may reasonably require in order to discharge its duties
and obligations hereunder.

5. The Investment Manager shall bear the cost of rendering the
investment management and supervisory services to be performed by it under
this Agreement, and shall, at its own expense, pay the compensation of the
officers and employees, if any, of the Fund who are also directors, officers
or employees of the Investment Manager, and provide such office space,
facilities and equipment and such clerical help and bookkeeping services as
the Fund shall reasonably require in the conduct of its business. The
Investment Manager shall also bear the cost of telephone service, heat,
light, power and other utilities provided to the Fund.

6. The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including without limitation: the charges and expenses
of any registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio transactions to which the Fund is a party; all taxes, including
securities or commodities issuance and transfer taxes, and fees payable by
the Fund to federal, state or other governmental agencies; the cost and
expense of engraving or printing certificates representing shares of the
Fund; all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the Securities
and Exchange Commission and various states and other jurisdictions (including
filing fees and legal fees and disbursements of counsel); the cost and
expense of printing (including typesetting) and distributing prospectuses and
statements of additional information of the Fund and supplements thereto to
the Fund's shareholders; all expenses of shareholders' and Trustees' meetings
and of preparing, printing and mailing proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Manager or any
corporate affiliate of the Investment Manager; all expenses incident to the
payment of any dividend, distribution, withdrawal or redemption, whether in
shares or in cash; charges and expenses of any outside

2
<PAGE>

service used for pricing of the Fund's shares; charges and expenses of legal
counsel, including counsel to the Trustees of the Fund who are not interested
persons (as defined in the Act) of the Fund or the Investment Manager, and of
independent accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Fund which inure to its benefit; extraordinary
expenses (including but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto); and all other
charges and costs of the Fund's operation unless otherwise explicitly
provided herein.

7. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the various Portfolios of the
Fund shall pay to the Investment Manager monthly compensation determined by
applying the following annual rates to the daily net assets of the respective
Portfolios determined as of the close of each business day: (a) the Money
Market Portfolio -- 0.50%; (b) the North American Government Securities
Portfolio -- 0.65%; (c) the Diversified Income Portfolio -- 0.40%; (d) the
Balanced Growth Portfolio -- 0.60%; (e) the Utilities Portfolio -- 0.65%; (f)
the Dividend Growth Portfolio -- 0.625% of daily net assets up to $500
million and 0.50% of daily net assets over $500 million; (g) the Value-Added
Market Portfolio -- 0.50%; (h) the Growth Portfolio -- 0.80%; (i) the American
Value Portfolio -- 0.625%; (j) the Mid-Cap Growth Portfolio -- 0.75%; (k) the
Global Equity Portfolio -- 1.0%; (l) the Developing Growth Portfolio --
0.50%; and (m) the Emerging Markets Portfolio -- 1.25%. Except as hereinafter
set forth, compensation under this Agreement shall be calculated and accrued
daily and the amounts of the daily accruals shall be paid monthly. Such
calculations shall be made by applying 1/365ths of the annual rates to the
net assets of the respective Portfolios each day determined as of the close
of business on that day or the last previous business day. If this Agreement
becomes effective subsequent to the first day of a month or shall terminate
before the last day of a month, compensation for that part of the month this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above.

Subject to the provisions of paragraph 8 hereof, payment of the
Investment Manager's compensation for the preceding month shall be made as
promptly as possible after completion of the computations contemplated by
paragraph 8 hereof.

8. In the event that the operating expenses of any of the Money Market
Portfolio, the North American Government Securities Portfolio, the
Diversified Income Portfolio, the Balanced Growth Portfolio, the Utilities
Portfolio, the Dividend Growth Portfolio, the Value-Added Market Portfolio,
the Growth Portfolio, the American Value Portfolio, the Global Equity
Portfolio, the Developing Growth Portfolio or the Emerging Markets Portfolio,
including amounts payable to the Investment Manager pursuant to paragraph 7
hereof, for any year ending on a date on which this Agreement is in effect
exceed 2.5% of the average daily net assets of such Portfolio up to $30
million, 2.0% of the next $70 million and 1.5% of the average daily net
assets of such Portfolio in excess of $100 million (the "expense limitation"
of these Portfolios), the Investment Manager shall reduce its management fee
in respect of such Portfolio to the extent of such excess and will reimburse
such Portfolio for annual operating expenses in excess of the expense
limitation, up to the amount of the management fee for that Portfolio which
otherwise would be payable for that year; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by such Portfolio. Such reduction, if any, shall be
computed and accrued daily, shall be settled on a monthly basis, and shall be
based upon the expense limitation applicable to such Portfolio as at the end
of the last business day of the month.

9. The Investment Manager will use its best efforts in the supervision
and management of the investment activities of the Fund, but in the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of
its obligations hereunder, the Investment Manager shall not be liable to the
Fund or any of its investors for any error of judgment or mistake of law or
for any act or omission by the Investment Manager or for any losses sustained
by the Fund or its investors.

3
<PAGE>

10. Nothing contained in this Agreement shall prevent the Investment
Manager or any affiliated person of the Investment Manager from acting as
investment adviser or manager for any other person, firm or corporation and
shall not in any way bind or restrict the Investment Manager or any such
affiliated person from buying, selling or trading any securities or
commodities for their own accounts or for the account of others for whom they
may be acting. Nothing in this Agreement shall limit or restrict the right of
any Trustee, officer or employee of the Investment Manager to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business whether of a similar or
dissimilar nature.

11. This Agreement shall remain in effect until April 30, 1999 and from
year to year thereafter with respect to each Portfolio provided such
continuance with respect to a Portfolio is approved at least annually by the
vote of holders of a majority (as defined in the Act) of the outstanding
voting securities of such Portfolio or by the Trustees of the Fund; provided
that in either event such continuance is also approved annually by the vote
of a majority of the Trustees of the Fund who are not parties to this
Agreement or "interested parties" (as defined in the Act) of any such party,
which vote must be cast in person at a meeting called for the purpose of
voting on such approval; provided, however, that (a) the Fund may, at any
time and without the payment of any penalty, terminate this Agreement upon
thirty days' written notice to the Investment Manager, either by majority
vote of the Trustees of the Fund or, with respect to a Portfolio, by the vote
of a majority of the outstanding voting securities of such Portfolio; (b)
this Agreement shall immediately terminate in the event of its assignment (to
the extent required by the Act and the rules thereunder) unless such
automatic terminations shall be prevented by an exemptive order of the
Securities and Exchange Commission; and (c) the Investment Manager may
terminate this Agreement without payment of penalty on thirty days' written
notice to the Fund. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed post-paid, to the other party at
the principal office of such party.

Any approval of this Agreement by the holders of a majority of the
outstanding voting securities of any Portfolio shall be effective to continue
this Agreement with respect to such Portfolio notwithstanding (a) that this
Agreement has not been approved by the holders of a majority of the
outstanding voting securities of any other Portfolio or (b) that this
Agreement has not been approved by the vote of a majority of the outstanding
voting securities of the Fund, unless such approval shall be required by any
other applicable law or otherwise.

12. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Investment Manager shall be liable for failing to do so.

13. This Agreement shall be construed in accordance with the laws of
the State of New York and the applicable provisions of the Act. To the extent
the applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.

14. The Investment Manager and the Fund each agree that the name "Dean
Witter," which comprises a component of the Fund's name, is a property right
of Dean Witter Reynolds Inc. The Fund agrees and consents that (i) it will
only use the name "Dean Witter" as a component of its name and for no other
purpose, (ii) it will not purport to grant to any third party the right to
use the name "Dean Witter" for any purpose, (iii) the Investment Manager or
its parent, Morgan Stanley Dean Witter & Co., or any corporate affiliate of
the Investment Manager's parent, may use or grant to others the right to use
the name "Dean Witter," or any combination or abbreviation thereof, as all or
a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, (iv) at the
request of the Investment Manager or its parent, the Fund will take such
action as may be required to provide its consent to the use of the name "Dean
Witter," or any combination or abbreviation thereof, by the Investment
Manager or its parent or any corporate affiliate of the Investment Manager's
parent, or by any

4
<PAGE>

person to whom the Investment Manager or its parent or any corporate
affiliate of the Investment Manager's parent shall have granted the right to
such use, and (v) upon the termination of any investment advisory agreement
into which the Investment Manager and the Fund may enter, or upon termination
of affiliation of the Investment Manager with its parent, the Fund shall,
upon request by the Investment Manager or its parent, cease to use the name
"Dean Witter" as a component of its name, and shall not use the name, or any
combination or abbreviation thereof, as a part of its name or for any other
commercial purpose, and shall cause its officers, Trustees and shareholders
to take any and all actions which the Investment Manager or its parent may
request to effect the foregoing and to reconvey to the Investment Manager or
its parent any and all rights to such name.

15. The Declaration of Trust establishing Dean Witter Select Dimensions
Investment Series, dated June 2, 1994, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Dean
Witter Select Dimensions Investment Series refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally;
and no Trustee, shareholder, officer, employee or agent of Dean Witter Select
Dimensions Investment Series shall be held to any personal liability, nor
shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said Dean
Witter Select Dimensions Investment Series, but the Trust Estate only shall
be liable.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, as amended, on May 1, 1998 in New York, New York.

DEAN WITTER SELECT DIMENSIONS
INVESTMENT SERIES

By:
----------------------------------

Attest:
------------------------------

DEAN WITTER INTERCAPITAL INC.

By:
----------------------------------
Attest:
------------------------------

<PAGE>
EXHIBIT 4(b)
SUB-ADVISORY AGREEMENT

AGREEMENT made as of the 2nd day of March, 1998, by and between Dean Witter
InterCapital Inc., a Delaware corporation (hereinafter called the "Investment
Manager"), and Morgan Stanley Asset Management Inc., a Delaware corporation
(hereinafter called the "Sub-Adviser").

WHEREAS, Dean Witter Select Dimensions Investment Series (hereinafter called
the "Fund") is engaged in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act"); and

WHEREAS, the Investment Manager has entered into an Investment Management
Agreement (hereinafter called the "Investment Management Agreement") with the
Fund wherein the Investment Manager has agreed to provide investment management
services to the thirteen current Portfolios of the Fund and may provide such
services to other Portfolios subsequently established by the Fund; and

WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as an
investment adviser; and

WHEREAS, the Investment Manager desires to retain the services of the
Sub-Adviser to render investment advisory services for the Growth Portfolio in
the manner and on the terms and conditions hereinafter set forth (this Portfolio
together with all other Portfolios subsequently established by the Fund with
respect to which the Fund will have retained the Investment Manager to render
management and investment advisory services under the Investment Management
Agreement and with respect to which the Investment Manager desires to retain the
Sub-Adviser to render investment advisory services in the manner and on the
terms and conditions hereinafter set forth being collectively referred to as the
"Sub-Advisory Portfolios"); and

WHEREAS, the Sub-Adviser desires to be retained by the Investment Manager to
perform services on said terms and conditions:

NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:

1. Subject to the supervision of the Fund, its officers and Trustees, and
the Investment Manager, and in accordance with the investment objectives,
policies and restrictions set forth in the then current Registration
Statement relating to the Fund, and such investment objectives, policies and
restrictions from time to time prescribed by the Trustees of the Fund and
communicated by the Investment Manager to the Sub-Adviser, the Sub-Adviser
agrees to provide each Sub-Advisory Portfolio with investment advisory
services; to obtain and evaluate such information and advice relating to the
economy, securities and commodities markets and securities or commodities as
it deems necessary or useful to discharge its duties hereunder; to
continuously manage the assets of the Sub-Advisory Portfolio in a manner
consistent with the investment objective and policies of the Sub-Advisory
Portfolio; to make decisions as to foreign currency matters and make
determinations as to forward foreign exchange contracts and options and
futures contracts in foreign currencies; to determine the securities and
commodities to be purchased or otherwise acquired, or sold or otherwise
disposed of, by the Sub-Advisory Portfolio and the timing of such purchases,
acquisitions, sales and dispositions; to take such further action, including
the placing of purchase and sale orders on behalf of the Sub-Advisory
Portfolio, as it shall deem necessary or appropriate; to furnish to or place
at the disposal of the Sub-Advisory Portfolio and the Investment Manager such
of the information, evaluations, analyses and opinions formulated or obtained
by it in the discharge of its duties as the Fund and the Investment Manager
may, from time to time, reasonably request. The Investment Manager and the
Sub-Adviser shall each make its officers and employees available to the other
from time to time at reasonable times to review investment policies of the
Sub-Advisory Portfolios and to consult with each other.

In the event the Fund establishes another Portfolio other than the current
Sub-Advisory Portfolio with respect to which the Investment Manager desires to
retain the Sub-Adviser to render investment advisory services

<PAGE>

hereunder, the Investment Manager shall notify the Sub-Adviser in writing. If
the Sub-Adviser is willing to render such services, it shall notify the
Investment Manager in writing, whereupon such other Portfolio shall become a
Sub-Advisory Portfolio hereunder.

2. The Sub-Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Sub-Adviser shall
be deemed to include persons employed or otherwise retained by the
Sub-Adviser to furnish statistical and other factual data, advice regarding
economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Investment Manager may desire. The Sub-Adviser shall maintain whatever
records as may be required to be maintained by it under the Act. All such
records so maintained shall be made available to the Fund, upon the request
of the Investment Manager or the Fund.

3. The Fund will, from time to time, furnish or otherwise make available
to the Sub-Adviser such financial reports, proxy statements and other
information relating to the business and affairs of the Sub-Advisory
Portfolios as the Sub-Adviser may reasonably require in order to discharge
its duties and obligations hereunder or to comply with any applicable law and
regulations and the investment objectives, policies and restrictions from
time to time prescribed by the Trustees of the Fund.

4. The Sub-Adviser shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at
its own expense, pay the compensation of the officers and employees, if any,
of the Fund, employed by the Sub-Adviser, and such clerical help and
bookkeeping services as the Sub-Adviser shall reasonably require in
performing its duties hereunder.

5. The Fund, on behalf of each Sub-Advisory Portfolio, assumes and shall
pay or cause to be paid all other expenses of the Sub-Advisory Portfolio,
including, without limitation: any fees paid to the Investment Manager; the
charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of the Sub-Advisory
Portfolio's cash, portfolio securities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers'
commissions chargeable to the Sub-Advisory Portfolio in connection with
portfolio securities transactions to which the Sub-Advisory Portfolio is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Sub-Advisory Portfolio to federal, state or other governmental
agencies or pursuant to any foreign laws; the cost and expense of engraving
or printing certificates representing shares of the Sub-Advisory Portfolio;
all costs and expenses in connection with the registration and maintenance of
registration of the Sub-Advisory Portfolio and its shares with the Securities
and Exchange Commission and various states and other jurisdictions or
pursuant to any foreign laws (including filing fees and legal fees and
disbursements of counsel); the cost and expense of printing (including
typesetting) and distributing prospectuses of the Fund and supplements
thereto to the Sub-Advisory Portfolio's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
of the Investment Manager or Sub-Adviser; all expenses incident to the
payment of any dividend, distribution, withdrawal or redemption whether in
shares or in cash; charges and expenses of any outside service used for
pricing of the Sub-Advisory Portfolio's shares; charges and expenses of legal
counsel, including counsel to the Trustees of the Fund who are not interested
persons (as defined in the Act) of the Fund, the

2
<PAGE>
Investment Manager or the Sub-Adviser, and of independent accountants, in
connection with any matter relating to the Sub-Advisory Portfolio; membership
dues of industry associations; interest payable on Sub-Advisory Portfolio
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Sub-Advisory Portfolio which inure to its benefit;
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto); and
all other charges and costs of the Sub-Advisory Portfolio's operation unless
otherwise explicitly provided herein.

6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Sub-Adviser, the Investment Manager shall pay to the
Sub-Adviser monthly compensation equal to 40% of its monthly compensation
receivable pursuant to the Investment Management Agreement in respect of the
Growth Portfolio. Any subsequent change in the Investment Management
Agreement which has the effect of raising or lowering the compensation of the
Investment Manager will have the concomitant effect of raising or lowering
the fees payable to the Sub-Adviser under this Agreement. In addition, if the
Investment Manager has undertaken in the Fund's Registration Statement as
filed under the Act or elsewhere to waive all or part of its fees under the
Investment Management Agreement, the Sub-Adviser's fees payable under this
Agreement will be proportionately waived in whole or in part. The calculation
of the fees payable to the Sub-Adviser pursuant to this Agreement will be
made, each month, at the time designated for the monthly calculation of the
fees payable to the Investment Manager pursuant to the Investment Management
Agreement. If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month, compensation for
the part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above.
Subject to the provisions of paragraph 7 hereof, payment of the Sub-Adviser's
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by paragraph 7 hereof.

7. In the event the operating expenses of the Growth Portfolio, including
amounts payable to the Investment Manager pursuant to the Investment
Management Agreement in respect of this Sub-Advisory Portfolio, for any
fiscal year ending on a date on which this Agreement is in effect, exceed
2.5% of the average daily net assets of the Sub-Advisory Portfolio up to $30
million, 2.0% of the next $70 million and 1.5% of the average daily net
assets of the Sub-Advisory Portfolio in excess of $100 million (the "expense
limitation"), the Sub-Adviser shall reduce its advisory fee to the extent of
40% of such excess and will reimburse the Investment Manager for annual
operating expenses in the amount of 40% of such excess of the expense
limitation, up to the amount of the Sub-Adviser's fee which would otherwise
be payable under this Agreement for that year, it being understood that the
Investment Manager has agreed to effect a reduction and reimbursement of 100%
of such excess, up to the amount of its management fee in respect of the
Sub-Advisory Portfolio which otherwise would be payable for that year, in
accordance with the terms of the Investment Management Agreement; provided,
however, there shall be excluded from such expenses the amount of any
interest, taxes, brokerage commissions, and extraordinary expenses (including
but not limited to legal claims and liabilities and litigation costs and any
indemnification related thereto) paid or payable by the Sub-Advisory
Portfolio. Such reduction, if any, shall be computed and accrued daily, shall
be settled on a monthly basis, and shall be based upon the expense limitation
applicable to the Sub-Advisory Portfolio as at the end of the last business
day of the month.

8. The Sub-Adviser will use its best efforts in the performance of
investment activities on behalf of the Sub-Advisory Portfolios, but in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of

3
<PAGE>
its obligations hereunder, the Sub-Adviser shall not be liable to the Investment
Manager or the Fund or any of its investors for any error of judgment or mistake
of law or for any act or omission by the Sub-Adviser or for any losses sustained
by the Sub-Advisory Portfolios or their investors.

9. It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Sub-Adviser, and in any person controlled
by or under common control or affiliated with the Sub-Adviser, and that the
Sub-Adviser and any person controlled by or under common control or
affiliated with the Sub-Adviser may have an interest in the Fund. It is also
understood that the Sub-Adviser and any affiliated persons thereof or any
persons controlled by or under common control with the Sub-Adviser have and
may have advisory, management service or other contracts with other
organizations and persons, and may have other interests and businesses, and
further may purchase, sell or trade any securities or commodities for their
own accounts or for the account of others for whom they may be acting.
Nothing contained in this Agreement shall limit or restrict the Sub-Adviser
or any affiliated person thereof from so acting or engaging in any other
business.

10. This Agreement shall remain in effect until April 30, 1999 and from
year to year thereafter with respect to each Sub-Advisory Portfolio provided
such continuance with respect to a Sub-Advisory Portfolio is approved at
least annually by the vote of holders of a majority, as defined in the Act,
of the outstanding voting securities of the Sub-Advisory Portfolio or by the
Trustees of the Fund; provided, that in either event such continuance is also
approved annually by the vote of a majority of the Trustees of the Fund who
are not parties to this Agreement or "interested persons" (as defined in the
Act) of any such party, which vote must be cast in person at a meeting called
for the purpose of voting on such approval; provided, however, that (a) the
Fund may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days' written notice to the Investment Manager and the
Sub-Adviser, either by majority vote of the Trustees of the Fund or, with
respect to a Sub-Advisory Portfolio, by the vote of a majority of the
outstanding voting securities of such Sub-Advisory Portfolio; (b) this
Agreement shall immediately terminate in the event of its assignment (within
the meaning of the Act) unless such automatic termination shall be prevented
by an exemptive order of the Securities and Exchange Commission; (c) this
Agreement shall immediately terminate in the event of the termination of the
Investment Management Agreement; (d) the Investment Manager may terminate
this Agreement without payment of penalty on thirty days' written notice to
the Fund and the Sub-Adviser; and (e) the Sub-Adviser may terminate this
Agreement without the payment of penalty on thirty days' written notice to
the Fund and the Investment Manager. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed post-paid, to the other
party at the principal office of such party.

11. This Agreement may be amended by the parties without the vote or
consent of the shareholders of any Sub-Advisory Portfolio to supply any
omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, or if they deem it necessary to conform this
Agreement to the requirements of applicable federal laws or regulations, but
neither the Fund, the Investment Manager nor the Sub-Adviser shall be liable
for failing to do so.

12. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.

4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.

DEAN WITTER INTERCAPITAL INC.

By:
..................................

Attest:
..............................

MORGAN STANLEY ASSET MANAGEMENT INC.

By:
..................................

Attest:
..............................

Accepted and agreed to as of
the day and year first above written:

DEAN WITTER SELECT DIMENSIONS
INVESTMENT SERIES

By:
..................................

Attest:
..............................

<PAGE>

EXHIBIT 8(a)

AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT

with

MORGAN STANLEY DEAN WITTER TRUST FSB

[open-end funds]
<PAGE>

TABLE OF CONTENTS

Page
----

Article 1 Terms of Appointment. . . . . . . . . . . . . . . . . . . . 1

Article 2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 5

Article 3 Representations and Warranties of MSDW TRUST. . . . . . . . 6

Article 4 Representations and Warranties of the Fund. . . . . . . . . 7

Article 5 Duty of Care and Indemnification. . . . . . . . . . . . . . 7

Article 6 Documents and Covenants of the Fund and MSDW TRUST. . . . .10

Article 7 Duration and Termination of Agreement . . . . . . . . . . .13

Article 8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . .14

Article 9 Affiliations. . . . . . . . . . . . . . . . . . . . . . . .14

Article 10 Amendment . . . . . . . . . . . . . . . . . . . . . . . . .15

Article 11 Applicable Law. . . . . . . . . . . . . . . . . . . . . . .15

Article 12 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . .15

Article 13 Merger of Agreement . . . . . . . . . . . . . . . . . . . .17

Article 14 Personal Liability. . . . . . . . . . . . . . . . . . . . .17

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<PAGE>

AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT

AMENDED AND RESTATED AGREEMENT made as of the 22nd day of June,
1998 by and between each of the Funds listed on the signature pages hereof, each
of such Funds acting severally on its own behalf and not jointly with any of
such other Funds (each such Fund hereinafter referred to as the "Fund"), each
such Fund having its principal office and place of business at Two World Trade
Center, New York, New York, 10048, and MORGAN STANLEY DEAN WITTER TRUST FSB
("MSDW TRUST"), a federally chartered savings bank, having its principal office
and place of business at Harborside Financial Center, Plaza Two, Jersey City,
New Jersey 07311.

WHEREAS, the Fund desires to appoint MSDW TRUST as its transfer
agent, dividend disbursing agent and shareholder servicing agent and MSDW TRUST
desires to accept such appointment;

NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

Article 1 TERMS OF APPOINTMENT; DUTIES OF MSDW TRUST

1.1 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints MSDW TRUST to act as, and MSDW
TRUST agrees to act as, the transfer agent for each series and class of shares
of the Fund, whether now or hereafter authorized or issued ("Shares"), dividend
disbursing agent and shareholder servicing agent in

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<PAGE>

connection with any accumulation, open-account or similar plans provided to the
holders of such Shares ("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus") of the Fund,
including without limitation any periodic investment plan or periodic withdrawal
program.

1.2 MSDW TRUST agrees that it will perform the following
services:

(a) In accordance with procedures established from time to
time by agreement between the Fund and MSDW TRUST, MSDW TRUST shall:

(i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation therefor to the
custodian of the assets of the Fund (the "Custodian");

(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and issue certificates therefor or hold such Shares in book form in
the appropriate Shareholder account;

(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Custodian;

(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;

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<PAGE>

(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;

(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;

(vii) Calculate any sales charges payable by a Shareholder on
purchases and/or redemptions of Shares of the Fund as such charges may be
reflected in the prospectus;

(viii) Maintain records of account for and advise the Fund and
its Shareholders as to the foregoing; and

(ix) Record the issuance of Shares of the Fund and maintain
pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934 ("1934
Act") a record of the total number of Shares of the Fund which are authorized,
based upon data provided to it by the Fund, and issued and outstanding. MSDW
TRUST shall also provide to the Fund on a regular basis the total number of
Shares that are authorized, issued and outstanding and shall notify the Fund in
case any proposed issue of Shares by the Fund would result in an overissue. In
case any issue of Shares would result in an overissue, MSDW TRUST shall refuse
to issue such Shares and shall not countersign and issue any certificates
requested for such Shares. When recording the issuance of Shares, MSDW TRUST
shall have no obligation to take cognizance of any Blue Sky laws relating to the
issue of sale of such Shares, which functions shall be the sole responsibility
of the Fund.

(b) In addition to and not in lieu of the services set forth
in the above paragraph (a), MSDW TRUST shall:

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<PAGE>

(i) perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, shareholder servicing agent in
connection with dividend reinvestment, accumulation, open-account or similar
plans (including without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to, maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident alien
accounts, preparing and filing appropriate forms required with respect to
dividends and distributions by federal tax authorities for all Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing activity statements
for Shareholders and providing Shareholder account information;

(ii) open any and all bank accounts which may be necessary or
appropriate in order to provide the foregoing services; and

(iii) provide a system that will enable the Fund to monitor the
total number of Shares sold in each State or other jurisdiction.

(i) identify to MSDW TRUST in writing those transactions and
assets to be treated as exempt from Blue Sky reporting for each State; and

-4-
<PAGE>

(ii) verify the inclusion on the system prior to activation of
each State in which Fund shares may be sold and thereafter monitor the daily
purchases and sales for shareholders in each State. The responsibility of MSDW
TRUST for the Fund's status under the securities laws of any State or other
jurisdiction is limited to the inclusion on the system of each State as to which
the Fund has informed MSDW TRUST that shares may be sold in compliance with
state securities laws and the reporting of purchases and sales in each such
State to the Fund as provided above and as agreed from time to time by the Fund
and MSDW TRUST.

(d) MSDW TRUST shall provide such additional services and
functions not specifically described herein as may be mutually agreed between
MSDW TRUST and the Fund. Procedures applicable to such services may be
established from time to time by agreement between the Fund and MSDW TRUST.

Article 2 FEES AND EXPENSES

2.1 For performance by MSDW TRUST pursuant to this Agreement,
each Fund agrees to pay MSDW TRUST an annual maintenance fee for each
Shareholder account and certain transactional fees, if applicable, as set out in
the respective fee schedule attached hereto as Schedule A. Such fees and
out-of-pocket expenses and advances identified under Section 2.2 below may be
changed from time to time subject to mutual written agreement between the Fund
and MSDW TRUST.

2.2 In addition to the fees paid under Section 2.1 above, the
Fund agrees to reimburse MSDW TRUST for out of pocket expenses in connection
with the services rendered

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<PAGE>

by MSDW TRUST hereunder. In addition, any other expenses incurred by MSDW TRUST
at the request or with the consent of the Fund will be reimbursed by the Fund.

2.3 The Fund agrees to pay all fees and reimbursable expenses
within a reasonable period of time following the mailing of the respective
billing notice. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all Shareholder accounts shall be advanced to MSDW TRUST by
the Fund upon request prior to the mailing date of such materials.

Article 3 REPRESENTATIONS AND WARRANTIES OF MSDW TRUST

MSDW TRUST represents and warrants to the Fund that:

3.1 It is a federally chartered savings bank whose principal
office is in New Jersey.

3.2 It is and will remain registered with the U.S. Securities
and Exchange Commission ("SEC") as a Transfer Agent pursuant to the requirements
of Section 17A of the 1934 Act.

3.3 It is empowered under applicable laws and by its charter
and By-Laws to enter into and perform this Agreement.

3.4 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.

3.5 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.

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<PAGE>

Article 4 REPRESENTATIONS AND WARRANTIES OF THE FUND

The Fund represents and warrants to MSDW TRUST that:

4.1 It is a corporation duly organized and existing and in
good standing under the laws of Delaware or Maryland or a trust duly organized
and existing and in good standing under the laws of Massachusetts, as the case
may be.

4.2 It is empowered under applicable laws and by its Articles
of Incorporation or Declaration of Trust, as the case may be, and under its
By-Laws to enter into and perform this Agreement.

4.3 All corporate proceedings necessary to authorize it to
enter into and perform this Agreement have been taken.

4.4 It is an investment company registered with the SEC under
the Investment Company Act of 1940, as amended (the "1940 Act").

4.5 A registration statement under the Securities Act of 1933
(the "1933 Act") is currently effective and will remain effective, and
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale.

Article 5 DUTY OF CARE AND INDEMNIFICATION

5.1 MSDW TRUST shall not be responsible for, and the Fund
shall indemnify and hold MSDW TRUST harmless from and against, any and all
losses, damages, costs,

-7-
<PAGE>

charges, counsel fees, payments, expenses and liability arising out of or
attributable to:

(a) All actions of MSDW TRUST or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such actions are
taken in good faith and without negligence or willful misconduct.

(b) The Fund's refusal or failure to comply with the terms of
this Agreement, or which arise out of the Fund's lack of good faith, negligence
or willful misconduct or which arise out of breach of any representation or
warranty of the Fund hereunder.

(c) The reliance on or use by MSDW TRUST or its agents or
subcontractors of information, records and documents which (i) are received by
MSDW TRUST or its agents or subcontractors and furnished to it by or on behalf
of the Fund, and (ii) have been prepared and/or maintained by the Fund or any
other person or firm on behalf of the Fund.

(d) The reliance on, or the carrying out by MSDW TRUST or its
agents or subcontractors of, any instructions or requests of the Fund.

(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the securities
or Blue Sky laws of any State or other jurisdiction that notice of offering of
such Shares in such State or other jurisdiction or in violation of any stop
order or other determination or ruling by any federal agency or any State or
other jurisdiction with respect to the offer or sale of such Shares in such
State or other jurisdiction.

-8-
<PAGE>

5.2 MSDW TRUST shall indemnify and hold the Fund harmless from
or against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or failure
or omission to act by MSDW TRUST as a result of the lack of good faith,
negligence or willful misconduct of MSDW TRUST, its officers, employees or
agents.

5.3 At any time, MSDW TRUST may apply to any officer of the
Fund for instructions, and may consult with legal counsel to the Fund, with
respect to any matter arising in connection with the services to be performed by
MSDW TRUST under this Agreement, and MSDW TRUST and its agents or subcontractors
shall not be liable and shall be indemnified by the Fund for any action taken or
omitted by it in reliance upon such instructions or upon the opinion of such
counsel. MSDW TRUST, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or
documents provided to MSDW TRUST or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Fund. MSDW TRUST, its
agents and subcontractors shall also be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper manual or
facsimile signature of the officers of the Fund, and the proper countersignature
of any former transfer agent or registrar, or of a co-transfer agent or
co-registrar.

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<PAGE>

5.4 In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes.

5.5 Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of this Agreement or
for any act or failure to act hereunder.

5.6 In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which either party
may be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.

Article 6 DOCUMENTS AND COVENANTS OF THE FUND AND MSDW TRUST

6.1 The Fund shall promptly furnish to MSDW TRUST the
following, unless previously furnished to Dean Witter Trust Company, the prior
transfer agent of the Fund:

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<PAGE>

(a) If a corporation:

(i) A certified copy of the resolution of the Board of
Directors of the Fund authorizing the appointment of MSDW TRUST and the
execution and delivery of this Agreement;

(ii) A certified copy of the Articles of Incorporation and
By-Laws of the Fund and all amendments thereto;

(iii) Certified copies of each vote of the Board of Directors
designating persons authorized to give instructions on behalf of the Fund and
signature cards bearing the signature of any officer of the Fund or any other
person authorized to sign written instructions on behalf of the Fund;

(iv) A specimen of the certificate for Shares of the Fund in
the form approved by the Board of Directors, with a certificate of the Secretary
of the Fund as to such approval;

(b) If a business trust:

(i) A certified copy of the resolution of the Board of
Trustees of the Fund authorizing the appointment of MSDW TRUST and the execution
and delivery of this Agreement;

(ii) A certified copy of the Declaration of Trust and By-Laws
of the Fund and all amendments thereto;

-11-
<PAGE>

(iii) Certified copies of each vote of the Board of Trustees
designating persons authorized to give instructions on behalf of the Fund and
signature cards bearing the signature of any officer of the Fund or any other
person authorized to sign written instructions on behalf of the Fund;

(iv) A specimen of the certificate for Shares of the Fund in
the form approved by the Board of Trustees, with a certificate of the Secretary
of the Fund as to such approval;

(c) The current registration statements and any amendments and
supplements thereto filed with the SEC pursuant to the requirements of the 1933
Act or the 1940 Act;

(d) All account application forms or other documents relating
to Shareholder accounts and/or relating to any plan, program or service offered
or to be offered by the Fund; and

(e) Such other certificates, documents or opinions as MSDW
TRUST deems to be appropriate or necessary for the proper performance of its
duties.

6.2 MSDW TRUST hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for safekeeping of
Share certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.

-12-
<PAGE>

6.3 MSDW TRUST shall prepare and keep records relating to the
services to be performed hereunder, in the form and manner as it may deem
advisable and as required by applicable laws and regulations. To the extent
required by Section 31 of the 1940 Act, and the rules and regulations
thereunder, MSDW TRUST agrees that all such records prepared or maintained by
MSDW TRUST relating to the services performed by MSDW TRUST hereunder are the
property of the Fund and will be preserved, maintained and made available in
accordance with such Section 31 of the 1940 Act, and the rules and regulations
thereunder, and will be surrendered promptly to the Fund on and in accordance
with its request.

6.4 MSDW TRUST and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential and shall not be voluntarily disclosed to
any other person except as may be required by law or with the prior consent of
MSDW TRUST and the Fund.

6.5 In case of any request or demands for the inspection of
the Shareholder records of the Fund, MSDW TRUST will endeavor to notify the Fund
and to secure instructions from an authorized officer of the Fund as to such
inspection. MSDW TRUST reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.

Article 7 DURATION AND TERMINATION OF AGREEMENT

7.1 This Agreement shall remain in full force and effect until
August 1,

-13-
<PAGE>

2000 and from year-to-year thereafter unless terminated by either party as
provided in Section 7.2 hereof.

7.2 This Agreement may be terminated by the Fund on 60 days
written notice, and by MSDW TRUST on 90 days written notice, to the other party
without payment of any penalty.

7.3 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and other
materials will be borne by the Fund. Additionally, MSDW TRUST reserves the
right to charge for any other reasonable fees and expenses associated with such
termination.

Article 8 ASSIGNMENT

8.1 Except as provided in Section 8.3 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.

8.2 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and assigns.

8.3 MSDW TRUST may, in its sole discretion and without further
consent by the Fund, subcontract, in whole or in part, for the performance of
its obligations and duties hereunder with any person or entity including but not
limited to companies which are affiliated with MSDW TRUST; PROVIDED, HOWEVER,
that such person or entity has and maintains the qualifications, if any,
required to perform such obligations and duties, and that MSDW TRUST

-14-
<PAGE>

shall be as fully responsible to the Fund for the acts and omissions of any
agent or subcontractor as it is for its own acts or omissions under this
Agreement.

Article 9 AFFILIATIONS

9.1 MSDW TRUST may now or hereafter, without the consent of or
notice to the Fund, function as transfer agent and/or shareholder servicing
agent for any other investment company registered with the SEC under the 1940
Act and for any other issuer, including without limitation any investment
company whose adviser, administrator, sponsor or principal underwriter is or may
become affiliated with Morgan Stanley Dean Witter & Co. or any of its direct or
indirect subsidiaries or affiliates.

9.2 It is understood and agreed that the Directors or Trustees
(as the case may be), officers, employees, agents and shareholders of the Fund,
and the directors, officers, employees, agents and shareholders of the Fund's
investment adviser and/or distributor, are or may be interested in MSDW TRUST as
directors, officers, employees, agents and shareholders or otherwise, and that
the directors, officers, employees, agents and shareholders of MSDW TRUST may be
interested in the Fund as Directors or Trustees (as the case may be), officers,
employees, agents and shareholders or otherwise, or in the investment adviser
and/or distributor as directors, officers, employees, agents, shareholders or
otherwise.

Article 10 AMENDMENT

10.1 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors or the Board of Trustees (as the case may be) of the
Fund.

-15-
<PAGE>

Article 11 APPLICABLE LAW

11.1 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of New
York.

Article 12 MISCELLANEOUS

12.1 In the event that one or more additional investment
companies managed or administered by Morgan Stanley Dean Witter Advisors Inc. or
any of its affiliates ("Additional Funds") desires to retain MSDW TRUST to act
as transfer agent, dividend disbursing agent and/or shareholder servicing agent,
and MSDW TRUST desires to render such services, such services shall be provided
pursuant to a letter agreement, substantially in the form of Exhibit A hereto,
between MSDW TRUST and each Additional Fund.

12.2 In the event of an alleged loss or destruction of any
Share certificate, no new certificate shall be issued in lieu thereof, unless
there shall first be furnished to MSDW TRUST an affidavit of loss or non-receipt
by the holder of Shares with respect to which a certificate has been lost or
destroyed, supported by an appropriate bond satisfactory to MSDW TRUST and the
Fund issued by a surety company satisfactory to MSDW TRUST, except that MSDW
TRUST may accept an affidavit of loss and indemnity agreement executed by the
registered holder (or legal representative) without surety in such form as MSDW
TRUST deems appropriate indemnifying MSDW TRUST and the Fund for the issuance of
a replacement certificate, in cases where the alleged loss is in the amount of
$1,000 or less.

12.3 In the event that any check or other order for payment of
money on the

-16-
<PAGE>

account of any Shareholder or new investor is returned unpaid for any reason,
MSDW TRUST will (a) give prompt notification to the Fund's distributor
("Distributor") (or to the Fund if the Fund acts as its own distributor) of such
non-payment; and (b) take such other action, including imposition of a
reasonable processing or handling fee, as MSDW TRUST may, in its sole
discretion, deem appropriate or as the Fund and, if applicable, the Distributor
may instruct MSDW TRUST.

12.4 Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or to MSDW TRUST shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.

To the Fund:

[Name of Fund]
Two World Trade Center
New York, New York 10048

Attention: General Counsel

To MSDW TRUST:

Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311

Attention: President

Article 13 MERGER OF AGREEMENT

13.1 This Agreement constitutes the entire agreement between
the parties hereto and supersedes any prior agreement with respect to the
subject matter hereof whether oral or written.

-17-
<PAGE>

Article 14 PERSONAL LIABILITY

14.1 In the case of a Fund organized as a Massachusetts
business trust, a copy of the Declaration of Trust of the Fund is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Board of Trustees of the Fund
as Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund; provided, however, that
the Declaration of Trust of the Fund provides that the assets of a particular
Series of the Fund shall under no circumstances be charged with liabilities
attributable to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against, a particular Series
of the Fund shall look only to the assets of that particular Series for payment
of such credit, contract or claim.

IN WITNESS WHEREOF, the parties hereto have caused this Amended
and Restated Agreement to be executed in their names and on their behalf by and
through their duly authorized officers, as of the day and year first above
written.

MORGAN STANLEY DEAN WITTER FUNDS

MONEY MARKET FUNDS

1. Morgan Stanley Dean Witter Liquid Asset Fund Inc.
2. Active Assets Money Trust
3. Morgan Stanley Dean Witter U.S. Government Money Market Trust
4. Active Assets Government Securities Trust
5. Morgan Stanley Dean Witter Tax-Free Daily Income Trust
6. Active Assets Tax-Free Trust
7. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
8. Morgan Stanley Dean Witter New York Municipal Money Market Trust
9. Active Assets California Tax-Free Trust

-18-
<PAGE>

EQUITY FUNDS

10. Morgan Stanley Dean Witter American Value Fund
11. Morgan Stanley Dean Witter Mid-Cap Growth Fund
12. Morgan Stanley Dean Witter Dividend Growth Securities Inc.
13. Morgan Stanley Dean Witter Capital Growth Securities
14. Morgan Stanley Dean Witter Global Dividend Growth Securities
15. Morgan Stanley Dean Witter Income Builder Fund
16. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
17. Morgan Stanley Dean Witter Precious Metals and Minerals Trust
18. Morgan Stanley Dean Witter Developing Growth Securities Trust
19. Morgan Stanley Dean Witter Health Sciences Trust
20. Morgan Stanley Dean Witter Capital Appreciation Fund
21. Morgan Stanley Dean Witter Information Fund
22. Morgan Stanley Dean Witter Value-Added Market Series
23. Morgan Stanley Dean Witter European Growth Fund Inc.
24. Morgan Stanley Dean Witter Pacific Growth Fund Inc.
25. Morgan Stanley Dean Witter International SmallCap Fund
26. Morgan Stanley Dean Witter Japan Fund
27. Morgan Stanley Dean Witter Utilities Fund
28. Morgan Stanley Dean Witter Global Utilities Fund
29. Morgan Stanley Dean Witter Special Value Fund
30. Morgan Stanley Dean Witter Financial Services Trust
31. Morgan Stanley Dean Witter Market Leader Trust
32. Morgan Stanley Dean Witter Fund of Funds
33. Morgan Stanley Dean Witter S&P 500 Index Fund
34. Morgan Stanley Dean Witter Competitive Edge Fund
35. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
36. Morgan Stanley Dean Witter Equity Fund
37. Morgan Stanley Dean Witter Growth Fund
38. Morgan Stanley Dean Witter S&P 500 Select Fund

BALANCED FUNDS

39. Morgan Stanley Dean Witter Balanced Growth Fund
40. Morgan Stanley Dean Witter Balanced Income Trust

ASSET ALLOCATION FUNDS

41. Morgan Stanley Dean Witter Strategist Fund
42. Dean Witter Global Asset Allocation Fund

-19-
<PAGE>

FIXED INCOME FUNDS

43. Morgan Stanley Dean Witter High Yield Securities Inc.
44. Morgan Stanley Dean Witter High Income Securities
45. Morgan Stanley Dean Witter Convertible Securities Trust
46. Morgan Stanley Dean Witter Intermediate Income Securities
47. Morgan Stanley Dean Witter Short-Term Bond Fund
48. Morgan Stanley Dean Witter World Wide Income Trust
49. Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
50. Morgan Stanley Dean Witter Diversified Income Trust
51. Morgan Stanley Dean Witter U.S. Government Securities Trust
52. Morgan Stanley Dean Witter Federal Securities Trust
53. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
54. Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
55. Morgan Stanley Dean Witter Tax-Exempt Securities Trust
56. Morgan Stanley Dean Witter Limited Term Municipal Trust
57. Morgan Stanley Dean Witter California Tax-Free Income Fund
58. Morgan Stanley Dean Witter New York Tax-Free Income Fund
59. Morgan Stanley Dean Witter Hawaii Municipal Trust
60. Morgan Stanley Dean Witter Multi-State Municipal Series Trust
61. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund

SPECIAL PURPOSE FUNDS

62. Dean Witter Retirement Series
63. Morgan Stanley Dean Witter Variable Investment Series
64. Morgan Stanley Dean Witter Select Dimensions Investment Series

TCW/DW FUNDS

65. TCW/DW North American Government Income Trust
66. TCW/DW Latin American Growth Fund
67. TCW/DW Income and Growth Fund
68. TCW/DW Small Cap Growth Fund
69. TCW/DW Total Return Trust

-20-
<PAGE>

70. TCW/DW Global Telecom Trust
71. TCW/DW Mid-Cap Equity Trust
72. TCW/DW Emerging Markets Opportunities Trust

By:
----------------------------------
Barry Fink
Vice President and General Counsel

ATTEST:

- ------------------------------
Assistant Secretary

MORGAN STANLEY DEAN WITTER TRUST FSB

By:
----------------------------------
John Van Heuvelen
President

ATTEST:

- ------------------------------
Executive Vice President

-21-
<PAGE>

EXHIBIT A

Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, NJ 07311

Gentlemen:

The undersigned, (INSET NAME OF INVESTMENT COMPANY) a
(Massachusetts business trust/Maryland corporation) (the "Fund"), desires to
employ and appoint Morgan Stanley Dean Witter Trust FSB ("MSDW TRUST") to act as
transfer agent for each series and class of shares of the Fund, whether now or
hereafter authorized or issued ("Shares"), dividend disbursing agent and
shareholder servicing agent, registrar and agent in connection with any
accumulation, open-account or similar plan provided to the holders of Shares,
including without limitation any periodic investment plan or periodic withdrawal
plan.

The Fund hereby agrees that, in consideration for the payment by
the Fund to MSDW TRUST of fees as set out in the fee schedule attached hereto as
Schedule A, MSDW TRUST shall provide such services to the Fund pursuant to the
terms and conditions set forth in the Transfer Agency and Service Agreement
annexed hereto, as if the Fund was a signatory thereto.

-22-
<PAGE>

Please indicate MSDW TRUST's acceptance of employment and
appointment by the Fund in the capacities set forth above by so indicating in
the space provided below.

Very truly yours,

(NAME OF FUND)

By:
----------------------------------
Barry Fink
Vice President and General Counsel

ACCEPTED AND AGREED TO:

MORGAN STANLEY DEAN WITTER TRUST FSB

By:
--------------------------
Its:
-------------------------
Date:
------------------------

-23-
<PAGE>

SCHEDULE A

Fund: Morgan Stanley Dean Witter Select Dimensions Investment Series

Fees: (1) Annual maintenance fee for each Portfolio of $500 per annum
per account.

(2) Out-of-pocket expenses in accordance with Section 2.2 of the
Agreement.

(3) Fees for additional services not set forth in this Agreement
shall be as negotiated between the parties.

-24-

<PAGE>
EXHIBIT 8(b)
SERVICES AGREEMENT

AGREEMENT made as of the 17th day of April, 1995, and amended as of June 22,
1998, by and between Morgan Stanley Dean Witter Advisors Inc., a Delaware
corporation (herein referred to as "MSDW Advisors"), and Morgan Stanley Dean
Witter Services Company Inc., a Delaware corporation (herein referred to as
"MSDW Services").

WHEREAS, MSDW Advisors has entered into separate agreements (each such
agreement being herein referred to as an "Investment Management Agreement") with
certain investment companies as set forth on Schedule A (each such investment
company being herein referred to as a "Fund" and, collectively, as the "Funds")
pursuant to which MSDW Advisors is to perform, or supervise the performance of,
among other services, administrative services for the Funds (and, in the case of
Funds with multiple portfolios, the Series or Portfolios of the Funds (such
Series and Portfolio being herein individually referred to as "a Series" and,
collectively, as "the Series"));

WHEREAS, MSDW Advisors desires to retain MSDW Services to perform the
administrative services as described below; and

WHEREAS, MSDW Services desires to be retained by MSDW Advisors to perform
such administrative services:

Now, therefore, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:

1. MSDW Services agrees to provide administrative services to each Fund as
hereinafter set forth. Without limiting the generality of the foregoing, MSDW
Services shall (i) administer the Fund's business affairs and supervise the
overall day-to-day operations of the Fund (other than rendering investment
advice); (ii) provide the Fund with full administrative services, including the
maintenance of certain books and records, such as journals, ledger accounts and
other records required under the Investment Company Act of 1940, as amended (the
"Act"), the notification to the Fund and MSDW Advisors of available funds for
investment, the reconciliation of account information and balances among the
Fund's custodian, transfer agent and dividend disbursing agent and MSDW
Advisors, and the calculation of the net asset value of the Fund's shares; (iii)
provide the Fund with the services of persons competent to perform such
supervisory, administrative and clerical functions as are necessary to provide
effective operation of the Fund; (iv) oversee the performance of administrative
and professional services rendered to the Fund by others, including its
custodian, transfer agent and dividend disbursing agent, as well as accounting,
auditing and other services; (v) provide the Fund with adequate general office
space and facilities; (vi) assist in the preparation and the printing of the
periodic updating of the Fund's registration statement and prospectus (and, in
the case of an open-end Fund, the statement of additional information), tax
returns, proxy statements, and reports to its shareholders and the Securities
and Exchange Commission; and (vii) monitor the compliance of the Fund's
investment policies and restrictions.

In the event that MSDW Advisors enters into an Investment Management
Agreement with another investment company, and wishes to retain MSDW Services to
perform administrative services hereunder, it shall notify MSDW Services in
writing. If MSDW Services is willing to render such services, it shall notify
MSDW Advisors in writing, whereupon such other Fund shall become a Fund as
defined herein.

2. MSDW Services shall, at its own expense, maintain such staff and employ
or retain such personnel and consult with such other persons as it shall from
time to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of MSDW Services shall be deemed to include
officers of MSDW Services and persons employed or otherwise retained by MSDW
Services (including officers and employees of MSDW Advisors, with the consent of
MSDW Advisors) to furnish services, statistical and other factual data,
information with respect to technical and scientific developments, and such
other information, advice and assistance as MSDW Services may desire. MSDW
Services shall maintain each Fund's records and books of account

<PAGE>
(other than those maintained by the Fund's transfer agent, registrar, custodian
and other agencies). All such books and records so maintained shall be the
property of the Fund and, upon request therefor, MSDW Services shall surrender
to MSDW Advisors or to the Fund such of the books and records so requested.

3. MSDW Advisors will, from time to time, furnish or otherwise make
available to MSDW Services such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as MSDW Services
may reasonably require in order to discharge its duties and obligations to the
Fund under this Agreement or to comply with any applicable law and regulation or
request of the Board of Directors/Trustees of the Fund.

4. For the services to be rendered, the facilities furnished, and the
expenses assumed by MSDW Services, MSDW Advisors shall pay to MSDW Services
monthly compensation calculated daily (in the case of an open-end Fund) or
weekly (in the case of a closed-end Fund) by applying the annual rate or rates
set forth on Schedule B to the net assets of each Fund. Except as hereinafter
set forth, (i) in the case of an open-end Fund, compensation under this
Agreement shall be calculated by applying 1/365th of the annual rate or rates to
the Fund's or the Series' daily net assets determined as of the close of
business on that day or the last previous business day and (ii) in the case of a
closed-end Fund, compensation under this Agreement shall be calculated by
applying the annual rate or rates to the Fund's average weekly net assets
determined as of the close of the last business day of each week. If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth on Schedule B. Subject to the
provisions of paragraph 5 hereof, payment of MSDW Services' compensation for the
preceding month shall be made as promptly as possible after completion of the
computations contemplated by paragraph 5 hereof.

5. In the event the operating expenses of any open-end Fund and/or any
Series thereof, or of InterCapital Income Securities Inc., including amounts
payable to MSDW Advisors pursuant to the Investment Management Agreement, for
any fiscal year ending on a date on which this Agreement is in effect, exceed
the expense limitations applicable to the Fund and/or any Series thereof imposed
by state securities laws or regulations thereunder, as such limitations may be
raised or lowered from time to time, or, in the case of InterCapital Income
Securities Inc. or Morgan Stanley Dean Witter Variable Investment Series or any
Series thereof, the expense limitation specified in the Fund's Investment
Management Agreement, the fee payable hereunder shall be reduced on a pro rata
basis in the same proportion as the fee payable by the Fund under the Investment
Management Agreement is reduced.

6. MSDW Services shall bear the cost of rendering the administrative
services to be performed by it under this Agreement, and shall, at its own
expense, pay the compensation of the officers and employees, if any, of the Fund
employed by MSDW Services, and such clerical help and bookkeeping services as
MSDW Services shall reasonably require in performing its duties hereunder.

7. MSDW Services will use its best efforts in the performance of
administrative activitives on behalf of each Fund, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, MSDW Services shall not be liable to the Fund or any of
its investors for any error of judgment or mistake of law or for any act or
omission by MSDW Services or for any losses sustained by the Fund or its
investors. It is understood that, subject to the terms and conditions of the
Investment Management Agreement between each Fund and MSDW Advisors, MSDW
Advisors shall retain ultimate responsibility for all services to be performed
hereunder by MSDW Services. MSDW Services shall indemnify MSDW Advisors and hold
it harmless from any liability that MSDW Advisors may incur arising out of any
act or failure to act by MSDW Services in carrying out its responsibilities
hereunder.

8. It is understood that any of the shareholders, Directors/Trustees,
officers and employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, MSDW Services, and in any person
controlling, controlled by or under common control with MSDW Services, and that
MSDW Services and any person controlling, controlled by or under common control
with MSDW

2
<PAGE>
Services may have an interest in the Fund. It is also understood that MSDW
Services and any affiliated persons thereof or any persons controlling,
controlled by or under common control with MSDW Services have and may have
advisory, management, administration service or other contracts with other
organizations and persons, and may have other interests and businesses, and
further may purchase, sell or trade any securities or commodities for their own
accounts or for the account of others for whom they may be acting.

9. This Agreement shall continue until April 30, 1999, and thereafter shall
continue automatically for successive periods of one year unless terminated by
either party by written notice delivered to the other party within 30 days of
the expiration of the then-existing period. Notwithstanding the foregoing, this
Agreement may be terminated at any time, by either party on 30 days' written
notice delivered to the other party. In the event that the Investment Management
Agreement between any Fund and MSDW Advisors is terminated, this Agreement will
automatically terminate with respect to such Fund.

10. This Agreement may be amended or modified by the parties in any manner
by written agreement executed by each of the parties hereto.

11. This Agreement may be assigned by either party with the written consent
of the other party.

12. This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, as amended, on June 22, 1998 in New York, New York.

MORGAN STANLEY DEAN WITTER ADVISORS INC.

By: -----------------------------------------

Attest:
- ----------------------------------

MORGAN STANLEY DEAN WITTER SERVICES COMPANY
INC.

By: -----------------------------------------

Attest:
- ----------------------------------

3
<PAGE>
SCHEDULE A
MORGAN STANLEY DEAN WITTER FUNDS
AS AMENDED AS OF FEBRUARY 9, 1999

OPEN-END FUNDS

<TABLE>
<C> <S>
1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Morgan Stanley Dean Witter Aggressive Equity Fund
6. Morgan Stanley Dean Witter American Value Fund
7. Morgan Stanley Dean Witter Balanced Growth Fund
8. Morgan Stanley Dean Witter Balanced Income Fund
9. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
10. Morgan Stanley Dean Witter California Tax-Free Income Fund
11. Morgan Stanley Dean Witter Capital Appreciation Fund
12. Morgan Stanley Dean Witter Capital Growth Securities
13. Morgan Stanley Dean Witter Competitive Edge Fund, "BEST IDEAS" Portfolio
14. Morgan Stanley Dean Witter Convertible Securities Trust
15. Morgan Stanley Dean Witter Developing Growth Securities Trust
16. Morgan Stanley Dean Witter Diversified Income Trust
17. Morgan Stanley Dean Witter Dividend Growth Securities Inc.
18. Morgan Stanley Dean Witter Equity Fund
19. Morgan Stanley Dean Witter European Growth Fund Inc.
20. Morgan Stanley Dean Witter Federal Securities Trust
21. Morgan Stanley Dean Witter Financial Services Trust
22. Morgan Stanley Dean Witter Fund of Funds
(i) Domestic Portfolio
(ii) International Portfolio
23. Morgan Stanley Dean Witter Global Dividend Growth Securities
24. Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
25. Morgan Stanley Dean Witter Global Utilities Fund
26. Morgan Stanley Dean Witter Growth Fund
27. Morgan Stanley Dean Witter Hawaii Municipal Trust
28. Morgan Stanley Dean Witter Health Sciences Trust
29. Morgan Stanley Dean Witter High Yield Securities Inc.
30. Morgan Stanley Dean Witter Income Builder Fund
31. Morgan Stanley Dean Witter Information Fund
32. Morgan Stanley Dean Witter Intermediate Income Securities
33. Morgan Stanley Dean Witter International Fund
34. Morgan Stanley Dean Witter International SmallCap Fund
35. Morgan Stanley Dean Witter Japan Fund
36. Morgan Stanley Dean Witter Limited Term Municipal Trust
37. Morgan Stanley Dean Witter Liquid Asset Fund Inc.
38. Morgan Stanley Dean Witter Managers Focus Fund
39. Morgan Stanley Dean Witter Market Leader Trust
40. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
41. Morgan Stanley Dean Witter Mid-Cap Growth Fund
42. Morgan Stanley Dean Witter Multi-State Municipal Series Trust
43. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
</TABLE>

A-1
<PAGE>
<TABLE>
<C> <S>
44. Morgan Stanley Dean Witter New York Municipal Money Market Trust
45. Morgan Stanley Dean Witter New York Tax-Free Income Fund
46. Morgan Stanley Dean Witter Pacific Growth Fund Inc.
47. Morgan Stanley Dean Witter Precious Metals and Minerals Trust
48. Morgan Stanley Dean Witter Select Dimensions Investment Series
(i) American Value Portfolio
(ii) Balanced Growth Portfolio
(iii) Developing Growth Portfolio
(iv) Diversified Income Portfolio
(v) Dividend Growth Portfolio
(vi) Emerging Markets Portfolio
(vii) Global Equity Portfolio
(viii) Growth Portfolio
(ix) Mid-Cap Growth Portfolio
(x) Money Market Portfolio
(xi) North American Government Securities Portfolio
(xii) Utilities Portfolio
(xiii) Value-Added Market Portfolio
49. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund
50. Morgan Stanley Dean Witter U.S. Government Money Market Trust
51. Morgan Stanley Dean Witter Utilities Fund
52. Morgan Stanley Dean Witter Short-Term Bond Fund
53. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
54. Morgan Stanley Dean Witter Special Value Fund
55. Morgan Stanley Dean Witter Strategist Fund
56. Morgan Stanley Dean Witter S&P 500 Index Fund
57. Morgan Stanley Dean Witter S&P 500 Select Fund
58. Morgan Stanley Dean Witter Tax-Exempt Securities Trust
59. Morgan Stanley Dean Witter Tax-Free Daily Income Trust
60. Morgan Stanley Dean Witter U.S. Government Securities Trust
61. Morgan Stanley Dean Witter Value Fund
62. Morgan Stanley Dean Witter Value-Added Market Series
63. Morgan Stanley Dean Witter Variable Investment Series
(i) Capital Appreciation Portfolio
(ii) Capital Growth Portfolio
(iii) Competitive Edge "Best Ideas" Portfolio
(iv) Dividend Growth Portfolio
(v) Equity Portfolio
(vi) European Growth Portfolio
(vii) Global Dividend Growth Portfolio
(viii) High Yield Portfolio
(ix) Income Builder Portfolio
(x) Money Market Portfolio
(xi) Quality Income Plus Portfolio
(xii) Pacific Growth Portfolio
(xiii) S&P 500 Index Portfolio
(xiv) Strategist Portfolio
(xv) Utilities Portfolio
64. Morgan Stanley Dean Witter World Wide Income Trust
65. Morgan Stanley Dean Witter Worldwide High Income Fund
</TABLE>

A-2
<PAGE>
<TABLE>
<CAPTION>
CLOSED-END FUNDS
<C> <S>
66. High Income Advantage Trust
67. High Income Advantage Trust II
68. High Income Advantage Trust III
69. InterCapital Income Securities Inc.
70. Dean Witter Government Income Trust
71. InterCapital Insured Municipal Bond Trust
72. InterCapital Insured Municipal Trust
73. InterCapital Insured Municipal Income Trust
74. InterCapital California Insured Municipal Income Trust
75. InterCapital Insured Municipal Securities
76. InterCapital Insured California Municipal Securities
77. InterCapital Quality Municipal Investment Trust
78. InterCapital Quality Municipal Income Trust
79. InterCapital Quality Municipal Securities
80. InterCapital California Quality Municipal Securities
81. InterCapital New York Quality Municipal Securities
</TABLE>

A-3
<PAGE>
SCHEDULE B

MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC.
SCHEDULE OF ADMINISTRATIVE FEES
AS AMENDED AS OF FEBRUARY 9, 1999

Monthly compensation calculated daily by applying the following annual rates
to a fund's daily net assets:

<TABLE>
<S> <C>
FIXED INCOME FUNDS

Morgan Stanley Dean Witter Balanced Income Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter California Tax-Free Income Fund 0.055% of the portion of the daily net assets not exceeding $500
million; 0.0525% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.050% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.0475% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.25 billion; and
0.045% of the portion of the daily net assets exceeding $1.25
billion.

Morgan Stanley Dean Witter Convertible Securities Trust 0.060% of the portion of the daily net assets not exceeding $750
million; 0.055% of the portion of the daily net assets exceeding
$750 million but not exceeding $1 billion; 0.050% of the portion
of the daily net assets of the exceeding $1 billion but not
exceeding $1.5 billion; 0.0475% of the portion of the daily net
assets exceeding $1.5 billion but not exceeding $2 billion;
0.045% of the portion of the daily net assets exceeding $2
billion but not exceeding $3 billion; and 0.0425% of the portion
of the daily net assets exceeding $3 billion.

Morgan Stanley Dean Witter Diversified Income Trust 0.040% of the daily net assets.

Morgan Stanley Dean Witter Federal Securities Trust 0.055% of the portion of the daily net assets not exceeding $1
billion; 0.0525% of the portion of the daily net assets exceeding
$1 billion but not exceeding $1.5 billion; 0.050% of the portion
of the daily net assets exceeding $1.5 billion but not exceeding
$2 billion; 0.0475% of the portion of the daily net assets
exceeding $2 billion but not exceeding $2.5 billion; 0.045% of
the portion of the daily net assets exceeding $2.5 billion but
not exceeding $5 billion; 0.0425% of the portion of the daily net
assets exceeding $5 billion but not exceeding $7.5 billion;
0.040% of the portion of the daily net assets exceeding $7.5
billion but not exceeding $10 billion; 0.0375% of the portion of
the daily net assets exceeding $10 billion but not exceeding
$12.5 billion; and 0.035% of the portion of the daily net assets
exceeding $12.5 billion.

Morgan Stanley Dean Witter Global Short-Term Income Fund Inc. 0.055% of the portion of the daily net assets not exceeding $500
million; and 0.050% of the portion of the daily net assets
exceeding $500 million.
</TABLE>

B-1
<PAGE>
<TABLE>
<S> <C>
Morgan Stanley Dean Witter Hawaii Municipal Trust 0.035% of the daily net assets.

Morgan Stanley Dean Witter High Yield Securities Inc. 0.050% of the portion of the daily net assets not exceeding $500
million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $2 billion; 0.0325%
of the portion of the daily net assets exceeding $2 billion but
not exceeding $3 billion; and 0.030% of the portion of daily net
assets exceeding $3 billion.

Morgan Stanley Dean Witter Intermediate Income Securities 0.060% of the portion of the daily net assets not exceeding $500
million; 0.050% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.040% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; and 0.030% of the portion of the daily net
assets exceeding $1 billion.

Morgan Stanley Dean Witter Limited Term Municipal Trust 0.050% of the daily net assets.

Morgan Stanley Dean Witter Multi-State Municipal Series Trust 0.035% of the daily net assets.
(10 Series)

Morgan Stanley Dean Witter New York Tax-Free Income Fund 0.055% of the portion of the daily net assets not exceeding $500
million; and 0.0525% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Select Dimensions Investment Series-- 0.039% of the daily net assets.
North American Government Securities Portfolio

Morgan Stanley Dean Witter Select Municipal Reinvestment Fund 0.050% of the daily net assets.

Morgan Stanley Dean Witter Short-Term Bond Fund 0.070% of the daily net assets.

Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust 0.035% of the daily net assets.

Morgan Stanley Dean Witter Tax-Exempt Securities Trust 0.050% of the portion of the daily net assets not exceeding $500
million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; and 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.25 billion;
.0325% of the portion of the daily net assets exceeding $1.25
billion.
</TABLE>

B-2
<PAGE>
<TABLE>
<S> <C>
Morgan Stanley Dean Witter U.S. Government Securities Trust 0.050% of the portion of the daily net assets not exceeding $1
billion; 0.0475% of the portion of the daily net assets exceeding
$1 billion but not exceeding $1.5 billion; 0.045% of the portion
of the daily net assets exceeding $1.5 billion but not exceeding
$2 billion; 0.0425% of the portion of the daily net assets
exceeding $2 billion but not exceeding $2.5 billion; 0.040% of
the portion of the daily net assets exceeding $2.5 billion but
not exceeding $5 billion; 0.0375% of the portion of the daily net
assets exceeding $5 billion but not exceeding $7.5 billion;
0.035% of the portion of the daily net assets exceeding $7.5
billion but not exceeding $10 billion; 0.0325% of the portion of
the daily net assets exceeding $10 billion but not exceeding
$12.5 billion; and 0.030% of the portion of the daily net assets
exceeding $12.5 billion.

Morgan Stanley Dean Witter Variable Investment Series--High 0.050% of the portion of the daily net assets not exceeding $500
Yield Portfolio million; and 0.0425% of the daily net assets exceeding $500
million.

Quality Income Plus Portfolio 0.050% of the portion of the daily the net assets up to $500
million; and 0.045% of the portion of the daily net assets
exceeds $500 million.

Morgan Stanley Dean Witter World Wide Income Trust 0.075% of the portion of the daily net assets up to $250 million;
0.060% of the portion of the daily net assets exceeding $250
million but not exceeding $500 million; 0.050% of the portion of
the daily net assets of the exceeding $500 million but not
exceeding $750 million; 0.040% of the portion of the daily net
assets exceeding $750 million but not exceeding $1 billion; and
0.030% of the portion of the daily net assets exceeding $1
billion.

Morgan Stanley Dean Witter Worldwide High Income Fund 0.060% of the daily net assets.

EQUITY FUNDS

Morgan Stanley Dean Witter Aggressive Equity Fund 0.075% of the daily net assets.

Morgan Stanley Dean Witter American Value Fund 0.0625% of the portion of the daily net assets not exceeding $250
million; 0.050% of the portion of the daily net assets exceeding
$250 million but not exceeding $2.25 billion; 0.0475% of the
portion of the daily net assets exceeding $2.25 billion but not
exceeding $3.5 billion; 0.0450% of the portion of the daily net
assets exceeding $3.5 billion but not exceeding $4.5 billion; and
0.0425% of the portion of the daily net assets exceeding $4.5
billion.

Morgan Stanley Dean Witter Balanced Growth Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter Capital Appreciation Fund 0.075% of the portion of the daily net assets not exceeding $500
million; and 0.0725% of the portion of the daily net assets
exceeding $500 million.
</TABLE>

B-3
<PAGE>
<TABLE>
<S> <C>
Morgan Stanley Dean Witter Capital Growth Securities 0.065% of the portion of the daily net assets not exceeding $500
million; 0.055% of the portion exceeding $500 million but not
exceeding $1 billion; 0.050% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.5 billion; and
0.0475% of the portion of the daily net assets exceeding $1.5
billion.

Morgan Stanley Dean Witter Competitive Edge Fund, "BEST IDEAS" 0.065% of the portion of the daily net assets not exceeding $1.5
Portfolio billion; and 0.0625% of the portion of the daily net assets
exceeding $1.5 billion.

Morgan Stanley Dean Witter Developing Growth Securities Trust 0.050% of the portion of the daily net assets not exceeding $500
million; and 0.0475% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Dividend Growth Securities Inc. 0.0625% of the portion of the daily net assets not exceeding $250
million; 0.050% of the portion of the daily net assets exceeding
$250 million but not exceeding $1 billion; 0.0475% of the portion
of the daily net assets exceeding $1 billion but not exceeding $2
billion; 0.045% of the portion of the daily net assets exceeding
$2 billion but not exceeding $3 billion; 0.0425% of the portion
of the daily net assets exceeding $3 billion but not exceeding $4
billion; 0.040% of the portion of the daily net assets exceeding
$4 billion but not exceeding $5 billion; 0.0375% of the portion
of the daily net assets exceeding $5 billion but not exceeding $6
billion; 0.035% of the portion of the daily net assets exceeding
$6 billion but not exceeding $8 billion; 0.0325% of the portion
of the daily net assets exceeding $8 billion but not exceeding
$10 billion; 0.030% of the portion of the daily net assets
exceeding $10 billion but not exceeding $15 billion; and 0.0275%
of the portion of the daily net assets exceeding $15 billion.

Morgan Stanley Dean Witter Equity Fund 0.051% of the daily net assets.

Morgan Stanley Dean Witter European Growth Fund Inc. 0.057% of the portion of the daily net assets not exceeding $500
million; 0.054% of the portion of the daily net assets exceeding
$500 million but not exceeding $2 billion; and 0.051% of the
portion of the daily net assets exceeding $2 billion.

Morgan Stanley Dean Witter Financial Services Trust 0.075% of the daily net assets.

Morgan Stanley Dean Witter Fund of Funds-
Domestic Portfolio None
International Portfolio None
</TABLE>

B-4
<PAGE>
<TABLE>
<S> <C>
Morgan Stanley Dean Witter Global Dividend Growth Securities 0.075% of the portion of the daily net assets not exceeding $1
billion; 0.0725% of the portion of the daily net assets exceeding
$1 billion but not exceeding $1.5 billion; 0.070% of the portion
of the daily net assets exceeding $1.5 billion but not exceeding
$2.5 billion; 0.0675% of the portion of the daily net assets
exceeding $2.5 billion but not exceeding $3.5 billion; 0.0650% of
the portion of the daily net assets exceeding $3.5 billion but
not exceeding $4.5 billion; and 0.0625% of the portion of the
daily net assets exceeding $4.5 billion.

Morgan Stanley Dean Witter Global Utilities Fund 0.065% of the portion of the daily net assets not exceeding $500
million; and 0.0625% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Growth Fund 0.048% of the portion of daily net assets not exceeding $750
million; 0.045% of the portion of daily net assets exceeding $750
million but not exceeding $1.5 billion; and 0.042% of the portion
of daily net assets exceeding $1.5 billion.

Morgan Stanley Dean Witter Health Sciences Trust 0.10% of the portion of daily net assets not exceeding $500
million; and 0.095% of the portion of daily net assets exceeding
$500 million.

Morgan Stanley Dean Witter Income Builder Fund 0.075% of the portion of the net assets not exceeding $500
million; and 0.0725% of the portion of daily net assets exceeding
$500 million.

Morgan Stanley Dean Witter Information Fund 0.075% of the portion of the daily net assets not exceeding $500
million; and 0.0725% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter International Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter International SmallCap Fund 0.069% of the daily net assets.

Morgan Stanley Dean Witter Japan Fund 0.057% of the daily net assets.

Morgan Stanley Dean Witter Managers Focus Fund 0.0625% of the daily net assets.

Morgan Stanley Dean Witter Market Leader Trust 0.075% of the daily net assets.

Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities 0.075 of the daily net assets.

Morgan Stanley Dean Witter Mid-Cap Growth Fund 0.075% of the portion of the daily net assets not exceeding $500
million; and 0.0725% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Natural Resource Development 0.0625% of the portion of the daily net assets not exceeding $250
Securities Inc. million and 0.050% of the portion of the daily net assets
exceeding $250 million.
</TABLE>

B-5
<PAGE>
<TABLE>
<S> <C>
Morgan Stanley Dean Witter Pacific Growth Fund Inc. 0.057% of the portion of the daily net assets not exceeding $1
billion; 0.054% of the portion of the daily net assets exceeding
$1 billion but not exceeding $2 billion; and 0.051% of the
portion of the daily net assets exceeding $2 billion.

Morgan Stanley Dean Witter Precious Metals and Minerals Trust 0.080% of the daily net assets.

Morgan Stanley Dean Witter Real Estate Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter Select Dimensions Investment Series--
American Value Portfolio 0.0625% of the daily net assets.
Balanced Growth Portfolio 0.065% of the daily net assets.
Developing Growth Portfolio 0.050% of the daily net assets.
Diversified Income Portfolio 0.040% of the daily net assets.
Dividend Growth Portfolio 0.0625% of the portion of the daily net assets not exceeding $500
million; and 0.050% of the portion of the daily net assets
exceeding $500 million.
Emerging Markets Portfolio 0.075% of the daily net assets.
Global Equity Portfolio 0.10% of the daily net assets.
Growth Portfolio 0.048% of the daily net assets.
Mid-Cap Growth Portfolio 0.075% of the daily net assets
Utilities Portfolio 0.065% of the daily net assets.
Value-Added Market Portfolio 0.050% of the daily net assets.

Morgan Stanley Dean Witter Special Value Fund 0.075% of the daily net assets.

Morgan Stanley Dean Witter Strategist Fund 0.060% of the portion of the daily net assets not exceeding $500
million; 0.055% of the portion of the daily net assets exceeding
$500 million but not exceeding $1 billion; 0.050% of the portion
of the daily net assets exceeding $1 billion but not exceeding
$1.5 billion; 0.0475% of the portion of the daily net assets
exceeding $1.5 billion but not exceeding $2.0 billion; and 0.045%
of the portion of the daily net assets exceeding $2.0 billion.

Morgan Stanley Dean Witter S&P 500 Index Fund 0.040% of the daily net assets.

Morgan Stanley Dean Witter S&P 500 Select Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter Utilities Fund 0.065% of the portion of the daily net assets not exceeding $500
million; 0.055% of the portion of the daily net assets exceeding
$500 million but not exceeding $1 billion; 0.0525% of the portion
of the daily net assets exceeding $1 billion but not exceeding
$1.5 billion; 0.050% of the portion of the daily net assets
exceeding $1.5 billion but not exceeding $2.5 billion; 0.0475% of
the portion of the daily net assets exceeding $2.5 billion but
not exceeding $3.5 billion; 0.045% of the portion of the daily
net assets exceeding $3.5 but not exceeding $5 billion; and
0.0425% of the daily net assets exceeding $5 billion.
</TABLE>

B-6
<PAGE>
<TABLE>
<S> <C>

Morgan Stanley Dean Witter Value Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter Value-Added Market Series 0.050% of the portion of the daily net assets not exceeding $500
million; 0.45% of the portion of the daily net assets exceeding
$500 million but not exceeding $1 billion; 0.0425% of the portion
of the daily net assets exceeding $1.0 billion but not exceeding
$2.0 billion; and 0.040% of the portion of the daily net assets
exceeding $2 billion.

Morgan Stanley Dean Witter Variable Investment Series--
Capital Appreciation Portfolio 0.075% of the daily net assets.
Capital Growth Portfolio 0.065% of the daily net assets.
Competitive Edge "Best Ideas" Portfolio 0.065% of the daily net assets.
Dividend Growth Portfolio 0.0625% of the portion of the daily net assets not exceeding $500
million; and 0.050% of the portion of the daily net assets
exceeding $500 million but not exceeding $1 billion; 0.0475% of
the portion of the daily net assets exceeding $1.0 billion but
not exceeding $2.0 billion; and 0.045% of the portion of the
daily net assets exceeding $2 billion.
Equity Portfolio 0.050% of the portion of the daily net assets not exceeding $1
billion; and 0.0475% of the portion of the daily net assets
exceeding $1 billion.
European Growth Portfolio 0.057% of the portion of the daily net assets not exceeding $500
million; and 0.054% of the portion of the daily net assets
exceeding $500 million.
Income Builder Portfolio 0.075% of the daily net assets.
Pacific Growth Portfolio 0.057% of the daily net assets.
S&P 500 Index Portfolio 0.040% of the daily net assets.
Strategist Portfolio 0.050% of the daily net assets.
Utilities Portfolio 0.065% of the portion of the daily net assets not exceeding $500
million and 0.055% of the portion of the daily net assets
exceeding $500 million.
MONEY MARKET FUNDS

Active Assets Trusts: 0.050% of the portion of the daily net assets not exceeding $500
(1) Active Assets Money Trust million; 0.0425% of the portion of the daily net assets exceeding
(2) Active Assets Tax-Free Trust $500 million but not exceeding $750 million; 0.0375% of the
(3) Active Assets California Tax-Free Trust portion of the daily net assets exceeding $750 million but not
(4) Active Assets Government Securities Trust exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.5 billion;
0.0325% of the portion of the daily net assets exceeding $1.5
billion but not exceeding $2 billion; 0.030% of the portion of
the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.0275% of the portion of the daily net assets exceeding
$2.5 billion but not exceeding $3 billion; and 0.025% of the
portion of the daily net assets exceeding $3 billion.

</TABLE>

B-7

Morgan Stanley Dean Witter California Tax-Free Daily 0.050% of the portion of the daily net assets not exceeding $500
Income Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.5 billion;
0.0325% of the portion of the daily net assets exceeding $1.5
billion but not exceeding $2 billion; 0.030% of the portion of
the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.0275% of the portion of the daily net assets exceeding
$2.5 billion but not exceeding $3 billion; and 0.025% of the
portion of the daily net assets exceeding $3 billion.

Morgan Stanley Dean Witter Liquid Asset Fund Inc. 0.050% of the portion of the daily net assets not exceeding $500
million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.35 billion;
0.0325% of the portion of the daily net assets exceeding $1.35
billion but not exceeding $1.75 billion; 0.030% of the portion of
the daily net assets exceeding $1.75 billion but not exceeding
$2.15 billion; 0.0275% of the portion of the daily net assets
exceeding $2.15 billion but not exceeding $2.5 billion; 0.025% of
the portion of the daily net assets exceeding $2.5 billion but
not exceeding $15 billion; 0.0249% of the portion of the daily
net assets exceeding $15 billion but not exceeding $17.5 billion;
and 0.0248% of the portion of the daily net assets exceeding
$17.5 billion.

Morgan Stanley Dean Witter New York Municipal Money 0.050% of the portion of the daily net assets not exceeding $500
Market Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.5 billion;
0.0325% of the portion of the daily net assets exceeding $1.5
billion but not exceeding $2 billion; 0.030% of the portion of
the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.0275% of the portion of the daily net assets exceeding
$2.5 billion but not exceeding $3 billion; and 0.025% of the
portion of the daily net assets exceeding $3 billion.

Morgan Stanley Dean Witter Select Dimensions Investment Series--
Money Market Portfolio 0.050% of the daily net assets.
</TABLE>

B-8
<PAGE>
<TABLE>
<S> <C>

Morgan Stanley Dean Witter Tax-Free Daily Income Trust 0.050% of the portion of the daily net assets not exceeding $500
million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.5 billion;
0.0325% of the portion of the daily net assets exceeding $1.5
billion but not exceeding $2 billion; 0.030% of the portion of
the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.0275% of the portion of the daily net assets exceeding
$2.5 billion but not exceeding $3 billion; and 0.025% of the
portion of the daily net assets exceeding $3 billion.

Morgan Stanley Dean Witter U.S. Government Money Market Trust 0.050% of the portion of the daily net assets not exceeding $500
million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the
portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net
assets exceeding $1 billion but not exceeding $1.5 billion;
0.0325% of the portion of the daily net assets exceeding $1.5
billion but not exceeding $2 billion; 0.030% of the portion of
the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.0275% of the portion of the daily net assets exceeding
$2.5 billion but not exceeding $3 billion; and 0.025% of the
portion of the daily net assets exceeding $3 billion.

Morgan Stanley Dean Witter Variable Investment Series-- Money 0.050% of the daily net assets.
Market Portfolio
</TABLE>

Monthly compensation calculated weekly by applying the following annual
rates to a fund's weekly net assets:

<TABLE>
CLOSED-END FUNDS

<S> <C>
Dean Witter Government Income Trust 0.060% of the average weekly net assets.

High Income Advantage Trust 0.075% of the portion of the average weekly net assets not
exceeding $250 million; 0.060% of the portion of average
weekly net assets exceeding $250 million and not exceeding
$500 million; 0.050% of the portion of average weekly net
assets exceeding $500 million and not exceeding $750
million; 0.040% of the portion of average weekly net assets
exceeding $750 million and not exceeding $1 billion; and
0.030% of the portion of average weekly net assets exceeding
$1 billion.
</TABLE>

B-9
<PAGE>
<TABLE>
<S> <C>
CLOSED-END FUNDS

High Income Advantage Trust II 0.075% of the portion of the average weekly net assets not
exceeding $250 million; 0.060% of the portion of average
weekly net assets exceeding $250 million and not exceeding
$500 million; 0.050% of the portion of average weekly net
assets exceeding $500 million and not exceeding $750
million; 0.040% of the portion of average weekly net assets
exceeding $750 million and not exceeding $1 billion; and
0.030% of the portion of average weekly net assets exceeding
$1 billion.

High Income Advantage Trust III 0.075% of the portion of the average weekly net assets not
exceeding $250 million; 0.060% of the portion of average
weekly net assets exceeding $250 million and not exceeding
$500 million; 0.050% of the portion of average weekly net
assets exceeding $500 million and not exceeding $750
million; 0.040% of the portion of the average weekly net
assets exceeding $750 million and not exceeding $1 billion;
and 0.030% of the portion of average weekly net assets
exceeding $1 billion.

InterCapital Income Securities Inc. 0.050% of the average weekly net assets.

InterCapital Insured Municipal Bond Trust 0.035% of the average weekly net assets.

InterCapital Insured Municipal Trust 0.035% of the average weekly net assets.

InterCapital Insured Municipal Income Trust 0.035% of the average weekly net assets.

InterCapital California Insured Municipal Income Trust 0.035% of the average weekly net assets.

InterCapital Quality Municipal Investment Trust 0.035% of the average weekly net assets.

InterCapital New York Quality Municipal Securities 0.035% of the average weekly net assets.

InterCapital Quality Municipal Income Trust 0.035% of the average weekly net assets.

InterCapital Quality Municipal Securities 0.035% of the average weekly net assets.

InterCapital California Quality Municipal Securities 0.035% of the average weekly net assets.

InterCapital Insured Municipal Securities 0.035% of the average weekly net assets.

InterCapital Insured California Municipal Securities 0.035% of the average weekly net assets.
</TABLE>

B-10