<PAGE>
Filed Pursuant to Rule 497(e)
Registration File No.: 33-56853
PROSPECTUS - MAY 28, 1999
Morgan Stanley Dean Witter
BALANCED GROWTH FUND
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS TO PROVIDE CAPITAL
GROWTH WITH REASONABLE CURRENT INCOME
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
CONTENTS
The Fund Investment Objective ............................ 1
Principal Investment Strategies ................. 1
Principal Risks ................................. 2
Past Performance ................................ 5
Fees and Expenses ............................... 6
Additional Investment Strategy Information ...... 7
Additional Risk Information ..................... 8
Fund Management ................................. 9
Shareholder Information Pricing Fund Shares ............................. 10
How to Buy Shares ............................... 10
How to Exchange Shares .......................... 12
How to Sell Shares .............................. 14
Distributions ................................... 16
Tax Consequences ................................ 16
Share Class Arrangements ........................ 17
Financial Highlights ................................................. 25
Our Family of Funds .................................. Inside Back Cover
This Prospectus contains important information
about the Fund. Please read it carefully and keep it
for future reference.
<PAGE>
THE FUND
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INVESTMENT OBJECTIVE
- --------------------
Morgan Stanley Dean Witter Balanced Growth Fund is a mutual fund that seeks to
provide capital growth with reasonable current income.
[GRAPHIC OMITTED]
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
The Fund will normally invest at least 60% of its total assets in dividend
paying common stocks and securities convertible into common stocks and at least
25% in fixed-income securities. Within these limitations, the Fund's "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., may invest in any proportion
of these securities it believes desirable based on its assessment of business,
economic and investment conditions.
(sidebar)
GROWTH & INCOME
An investment objective having the goal of selecting securities with the
potential to rise in price and pay out income.
(end sidebar)
The two groups of Fund investments in more detail are:
(1) Common Stocks/Convertible Securities. The Fund invests in common stocks of
companies that have a record of paying dividends and, in the Investment
Manager's opinion, have the potential for increasing dividends. Investment grade
securities convertible into common stocks may also be Fund investments. These
investments may include foreign securities that are listed in the U.S. on a
national securities exchange.
(2) Fixed-Income Securities. The Fund's fixed-income securities (including zero
coupon securities) are limited to investment grade corporate debt securities,
bank obligations, investment grade mortgage-backed and asset-backed securities,
and U.S. Government securities. The U.S. Government securities may include:
o U.S. Treasury bills, notes and bonds, all of which are direct obligations of
the U.S. Government.
o 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.
o 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 the U.S. Treasury. Among these
agencies and instrumentalities are the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation.
o 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 Bank.
1
<PAGE>
One type of mortgage-backed security, in which the Fund 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. Mortgage pass-through securities may be collateralized by
mortgages with fixed rates of interest or adjustable rates.
* * *
Common stock is a share ownership or equity interest in a corporation. It may or
may not pay dividends, as some companies reinvest all of their profits back into
their businesses, while others pay out some of their profits to shareholders as
dividends.
Fixed-income securities are debt securities such as bonds, notes or commercial
paper. The issuer of the debt security borrows money from the investor who buys
the security. Most debt securities pay either fixed or adjustable rates of
interest at regular intervals until they mature, at which point investors get
their principal back. The Fund's fixed-income investments may include zero
coupon securities which are purchased at a discount and either (i) pay no
interest, or (ii) accrue interest, but make no payments until maturity.
In addition to the securities discussed above, the Fund may invest in
asset-backed securities.
In pursuing the Fund's investment objective, the Investment Manager has
considerable leeway in deciding which investments it buys, holds or sells on a
day-to-day basis -- and which trading strategies it uses. For example, the
Investment Manager in its discretion may determine to use some permitted trading
strategies while not using others.
[GRAPHIC OMITTED]
PRINCIPAL RISKS
- ---------------
There is no assurance that the Fund will achieve its investment objective. The
Fund's share price will fluctuate with changes in the market value of the Fund's
portfolio securities. When you sell Fund shares, they may be worth less than
what you paid for them and, accordingly, you can lose money investing in this
Fund.
Common Stocks. A principal risk of investing in the Fund 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.
2
<PAGE>
Convertible Securities. The Fund's investments in convertible securities subject
the Fund to the risks associated with both fixed-income securities and common
stocks. To the extent that a convertible security's investment value is greater
than its conversion value, its price will likely increase when interest rates
fall and decrease when interest rates rise, as with a fixed-income security. If
the conversion value exceeds the investment value, the price of the convertible
security will tend to fluctuate directly with the price of the underlying equity
security.
Fixed-Income Securities. Principal risks of investing in the Fund 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. While
the Fund invests in investment grade securities, certain of these securities
have speculative characteristics.
Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates. When the
general level of interest rates goes up, the prices of most fixed-income
securities go down. When the general level of interest rates goes down, the
prices of most fixed-income securities go up. (Zero coupon securities are
typically subject to greater price fluctuations than comparable securities that
pay current interest.) As merely illustrative of the relationship between
fixed-income securities and interest rates, the following table shows how
interest rates affect bond prices.
<TABLE>
<CAPTION>
HOW INTEREST RATES AFFECT BOND PRICES
- ----------------------------------------------------------------------------
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 or asset-backed
securities principally because of prepayment risk, and it is not representative
of high yield securities. 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.
The Fund 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 Fund's fixed-income investment securities to fall substantially.
3
<PAGE>
Mortgage-Backed Securities. Mortgage-backed securities in which the Fund 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 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.
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 Investment
Manager, could reduce the Fund's yield, increase the volatility of the Fund
and/or cause a decline in net asset value.
Other Risks. The performance of the Fund also will depend on whether the
Investment Manager is successful in pursuing the Fund's investment strategy. The
Fund is also subject to other risks from its permissible investments including
the risks associated with its foreign investments and asset-backed securities.
Shares of the Fund are not bank deposits and are not guaranteed or insured by
the FDIC or any other governmental entity.
4
<PAGE>
[GRAPHIC OMITTED]
PAST PERFORMANCE
- ----------------
The bar chart and table below provide some indication of the risks of investing
in the Fund. The Fund's past performance does not indicate how the Fund will
perform in the future.
ANNUAL TOTAL RETURNS -- CALENDAR YEARS
[BAR GRAPH]
1996 '97 '98
---- --- ---
14.41% 22.79% 13.67%
The bar chart reflects the performance of Class C shares; the performance of the
other Classes will differ because the Classes have different ongoing fees. The
performance information in the bar chart does not reflect the deduction of sales
charges; if these amounts were reflected, returns would be less than shown.
(sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's Class C shares has varied
from year to year over the past 3 calendar years.
(end sidebar)
During the periods shown in the bar chart, the highest return for a calendar
quarter was 12.40% (quarter ended June 30, 1997) and the lowest return for a
calendar quarter was -7.02% (quarter ended September 30, 1998). Year-to-date
total return as of March 31, 1999 was 2.05%.
(sidebar)
AVERAGE ANNUAL TOTAL RETURNS
This table compares the Fund's average annual returns with those of a broad
measure of market performance over time. The Fund's returns include the maximum
applicable sales charge for each Class and assume you sold your shares at the
end of each period.
(end sidebar)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1998)
- --------------------------------------------------------------------------------
LIFE OF THE FUND
PAST 1 YEAR (AS OF 3/28/95)
- --------------------------------------------------------------------------------
<S> <C> <C>
Class A(1) 8.52% --
- --------------------------------------------------------------------------------
Class B(1) 8.69% --
- --------------------------------------------------------------------------------
Class C 12.67% 18.32%(5)
- --------------------------------------------------------------------------------
Class D(1) 14.78% --
- --------------------------------------------------------------------------------
S&P 500(2) 28.58% 29.33%(5)
- --------------------------------------------------------------------------------
Lehman Brothers Government/Corporate Bond Index(3) 9.47% 9.48%(6)
- --------------------------------------------------------------------------------
Lipper Balanced Funds Index(4) 15.09% 17.72%(6)
- --------------------------------------------------------------------------------
</TABLE>
1 Classes A, B and D commenced operations on July 28, 1997.
2 The Standard & Poor's 500 Stock 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,
fees or charges. The Index is unmanaged and should not be considered an
investment.
3 The Lehman Brothers Government/Corporate Bond Index tracks the performance
of government and corporate obligations, including U.S. government agency
and U.S. Treasury securities and corporate and yankee bonds with maturities
of one to ten years. The performance of the Index does not include any
expenses or fees. The Index is unmanaged and should not be considered an
investment.
4 The Lipper Balanced Funds Index is an equally-weighted performance index of
the largest qualifying funds in the Lipper Balanced Funds objective. The
Index, which is adjusted for capital gains distributions and income
dividends, is unmanaged and should not be considered an investment.
5 For the Period March 28, 1995 to December 31, 1998.
6 For the Period March 31, 1995 to December 31, 1998.
5
<PAGE>
[GRAPHIC OMITTED]
FEES AND EXPENSES
- -----------------
The table below briefly describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. The Fund offers four Classes of shares: Classes
A, B, C and D. Each Class has a different combination of fees, expenses and
other features. The Fund does not charge account or exchange fees. See the
"Share Class Arrangements" section for further fee and expense information.
(sidebar)
SHAREHOLDER FEES
These fees are paid directly from your investment.
(end sidebar)
(sidebar)
ANNUAL FUND OPERATING EXPENSES
These expenses are deducted from the Fund's assets and are based on expenses
paid for the fiscal year ended January 31, 1999.
(end sidebar)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
- -------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) 5.25%(1) None None None
- -------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
price or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
- -------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- -------------------------------------------------------------------------------------------------
Management fee 0.60% 0.60% 0.60% 0.60%
- -------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 0.99% None
- -------------------------------------------------------------------------------------------------
Other expenses 0.21% 0.21% 0.21% 0.21%
- -------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.06% 1.81% 1.80% 0.81%
- -------------------------------------------------------------------------------------------------
</TABLE>
1 Reduced for purchases of $25,000 and over.
2 Investments that are not subject to any sales charge at the time of purchase
are subject to a CDSC of 1.00% that will be imposed if you sell your shares
within one year after purchase, except for certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.
4 Only applicable if you sell your shares within one year after purchase. Fund
shares held prior to July 28, 1997 that have been designated Class C shares
are not subject to the 1.00% CDSC.
6
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your investment has a
5% return each year, and the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, the tables below show your costs at
the end of each period based on these assumptions depending upon whether or not
you sell your shares at the end of each period.
<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
- ------------------------------------------- ----------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A $627 $844 $1,078 $1,749 $627 $844 $1,078 $1,749
- ------------------------------------------- ----------------------------------
CLASS B $684 $869 $1,180 $2,126 $184 $569 $980 $2,126
- ------------------------------------------- ----------------------------------
CLASS C $283 $566 $974 $2,115 $183 $566 $974 $2,115
- ------------------------------------------- ----------------------------------
CLASS D $83 $258 $449 $1,001 $83 $258 $449 $1,001
- ------------------------------------------- ----------------------------------
</TABLE>
Long-term shareholders of Class B and Class C may pay more in sales charges;
including distribution fees, than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers.
[GRAPHIC OMITTED]
ADDITIONAL INVESTMENT STRATEGY INFORMATION
- ------------------------------------------
This section provides additional information relating to the Fund's principal
strategies. Defensive Investing. The Fund may take temporary "defensive"
positions in attempting to respond to adverse market conditions. The Fund may
invest any amount of its assets in cash or money market instruments in a
defensive posture when the Investment Manager believes it is advisable to do so.
Although taking a defensive posture is designed to protect the Fund from an
anticipated market downturn, it could have the effect of reducing the benefit
from any upswing in the market.
The percentage limitations relating to the composition of the Fund's portfolio
referenced in "Principal Investment Strategies" apply at the time the Fund
acquires an investment. Subsequent percentage changes that result from market
fluctuations will not require the Fund to sell any portfolio security. The Fund
may change its principal investment strategies without shareholder approval;
however, you would be notified of any changes.
7
<PAGE>
[GRAPHIC OMITTED]
ADDITIONAL RISK INFORMATION
- ---------------------------
This section provides additional information relating to the principal risks of
investing in the Fund.
Foreign Securities. The Fund's investments in foreign securities involve risks
that are in addition to the risks associated with domestic securities. One
additional risk is currency risk. While the price of Fund shares is quoted in
U.S. dollars, the Fund 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 Fund 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 Fund to obtain or enforce a judgment against the issuers
of the securities.
Year 2000. The Fund could be adversely affected if the computer systems
necessary for the efficient operation of the Investment Manager, the Fund's
other service providers and the markets and individual and governmental issuers
in which the Fund invests do not properly process and calculate date-related
information from and after January 1, 2000. While year 2000-related computer
problems could have a negative effect on the Fund, the Investment Manager and
its affiliates are working hard to avoid any problems and to obtain assurances
from their service providers that they are taking similar steps.
In addition, it is possible that the markets for securities in which the Fund
invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. In
addition, corporate and governmental data processing errors also 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 Fund's investments may be adversely affected.
8
<PAGE>
[GRAPHIC OMITTED]
FUND MANAGEMENT
- ---------------
The Fund has retained the Investment Manager -- Morgan Stanley Dean Witter
Advisors Inc. -- to provide administrative services, manage its business affairs
and invest its assets, including the placing of orders for the purchase and sale
of portfolio securities. The Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & Co., a preeminent global financial services firm
that maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services. Its main business office is
located at Two World Trade Center, New York, NY 10048.
(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 $132.5 billion in assets under
management or administration as of April 30, 1999.
(end sidebar)
The equity portion of the Fund's portfolio is managed within the Investment
Manager's Growth and Income Group, and the fixed-income portion is managed
within the Taxable Fixed-Income Group. Paul D. Vance and Rajesh K. Gupta, Senior
Vice Presidents of the Investment Manager, have been the primary portfolio
managers of the Fund since its inception in March 1995. Mr. Vance manages the
Fund's equity portion, and Mr. Gupta manages the fixed-income portion. They has
been portfolio managers with the Investment Manager for over five years.
The Fund pays the Investment Manager a monthly management fee as full
compensation for the services and facilities furnished to the Fund, and for Fund
expenses assumed by the Investment Manager. The fee is based on the Fund's
average daily net assets. For the fiscal year ended January 31, 1999 the Fund
accrued total compensation to the Investment Manager amounting to 0.60% of the
Fund's average daily net assets.
9
<PAGE>
SHAREHOLDER INFORMATION
[GRAPHIC OMITTED]
PRICING FUND SHARES
- -------------------
The price of Fund shares (excluding sales charges), called "net asset value," is
based on the value of the Fund's portfolio securities. While the assets of each
Class are invested in a single portfolio of securities, the net asset value of
each Class will differ because the Classes have different ongoing distribution
fees.
The net asset value per share of the Fund is determined once daily at 4:00 p.m.
Eastern time on each day that the New York Stock Exchange is open (or, on days
when the New York Stock Exchange closes prior to 4:00 p.m., at such earlier
time). Shares will not be priced on days that the New York Stock Exchange is
closed.
The value of the Fund's portfolio securities is based on the securities' market
price when available. When a market price is not readily available, including
circumstances under which the Investment Manager 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 Fund's net asset value will reflect certain portfolio
securities' fair value rather than their market price. In addition, if the Fund
holds securities primarily listed on foreign exchanges, the value of the Fund's
portfolio securities may change on days when you will not be able to purchase or
sell your shares.
An exception to the Fund's general policy of using market prices concerns its
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.
[GRAPHIC OMITTED]
HOW TO BUY SHARES
- -----------------
You may open a new account to buy Fund shares or buy additional Fund shares for
an existing account by contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative. Your Financial Advisor
will assist you, step-by-step, with the procedures to invest in the Fund. You
may also purchase shares directly by calling the Fund's transfer agent and
requesting an application.
(sidebar)
CONTACTING A FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (800) THE-DEAN for the telephone number of
the Morgan Stanley Dean Witter office nearest you. You may also access our
office locator on our Internet site at: www.deanwitter.com/funds
(end sidebar)
Because every investor has different immediate financial needs and long-term
investment goals, the Fund offers investors four Classes of shares: Classes A,
B, C and D. Class D shares are only offered to a limited group of investors.
Each Class of shares offers a distinct structure of sales charges, distribution
and service fees, and other features that are designed to address a variety of
needs. Your Financial Advisor or other authorized financial representative can
10
<PAGE>
help you decide which Class may be most appropriate for you. When purchasing
Fund shares, you must specify which Class of shares you wish to purchase.
When you buy Fund shares, the shares are purchased at the next share price
calculated (less any applicable front-end sales charge for Class A shares) after
we receive your purchase order in proper form. Your payment is due on the third
business day after you place your purchase order. We reserve the right to reject
any order for the purchase of Fund Shares.
(sidebar)
EASYINVEST(SM)
A purchase plan that allows you to transfer money automatically from your
checking or savings account or from a Money Market Fund on a semi-monthly,
monthly or quarterly basis. Contact your Morgan Stanley Dean Witter Financial
Advisor for further information about this service.
(end sidebar)
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
- ----------------------------------------------------------------------------
MINIMUM INVESTMENT
----------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Regular Accounts $1,000* $100
- ----------------------------------------------------------------------------
Individual Retirement Accounts: Regular IRAs $1,000 $100
Education IRAs $500 $100
- ----------------------------------------------------------------------------
EasyInvest(SM)
(Automatically from your checking or savings
account or Money Market Fund) $100** $100**
- ----------------------------------------------------------------------------
</TABLE>
* The Fund will waive the minimum purchase requirement for investments in
Class B shares in connection with certain unit investment trusts.
** Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund shares through:
(1) the Investment Manager's mutual fund asset allocation plan, (2) a program,
approved by the Fund's distributor, in which you pay an asset-based fee for
advisory, administrative and/or brokerage services, or (3) employer-sponsored
employee benefit plan accounts.
Investment Options for Certain Institutional and Other Investors/Class D Shares.
To be eligible to purchase Class D shares, you must qualify under one of the
investor categories specified in the "Share Class Arrangements" section of this
Prospectus.
Subsequent Investments Sent Directly to the Fund. In addition to buying
additional Fund shares for an existing account by contacting your Morgan Stanley
Dean Witter Financial Advisor, you may send a check directly to the Fund. To buy
additional shares in this manner:
o Write a "letter of instruction" to the Fund specifying the name(s) on the
account, the account number, the social security or tax identification
number, the Class of shares you wish to purchase and the investment amount
(which would include any applicable front-end sales charge). The letter must
be signed by the account owner(s).
o Make out a check for the total amount payable to: Morgan Stanley Dean Witter
Balanced Growth Fund.
o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 1040, Jersey City, NJ 07303.
11
<PAGE>
[GRAPHIC OMITTED]
HOW TO EXCHANGE SHARES
- ----------------------
Permissible Fund Exchanges. You may exchange shares of any Class of the Fund for
the same Class of any other continuously offered Multi-Class Fund, or for shares
of a No-Load Fund, Money Market Fund or Short-Term U.S. Treasury Trust, without
the imposition of an exchange fee. See the inside back cover of this Prospectus
for each Morgan Stanley Dean Witter Fund's designation as a Multi-Class Fund,
No- Load Fund or Money Market Fund. If a Morgan Stanley Dean Witter Fund is not
listed, consult the inside back cover of that fund's Prospectus for its
designation. For purposes of exchanges, shares of FSC Funds (subject to a
front-end sales charge) are treated as Class A shares of a Multi-Class Fund.
Exchanges may be made after shares of the Fund acquired by purchase have been
held for thirty days. There is no waiting period for exchanges of shares
acquired by exchange or dividend reinvestment. The current Prospectus for each
Fund describes its investment objective(s), policies and investment minimums,
and should be read before investment.
Exchange Procedures. You can process an exchange by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative. Otherwise, you must forward an exchange privilege authorization
form to the Fund's transfer agent -- Morgan Stanley Dean Witter Trust FSB -- and
then write the transfer agent or call (800) 869-NEWS to place an exchange order.
You can obtain an exchange privilege authorization form by contacting your
Financial Advisor or other authorized financial representative or by calling
(800) 869-NEWS. If you hold share certificates, no exchanges may be processed
until we have received all applicable share certificates.
An exchange to any Morgan Stanley Dean Witter Fund (except a Money Market Fund)
is made on the basis of the next calculated net asset values of the Funds
involved after the exchange instructions are accepted. When exchanging into a
Money Market Fund, the Fund's shares are sold at their next calculated net asset
value and the Money Market Fund's shares are purchased at their net asset value
on the following business day.
The Fund may terminate or revise the exchange privilege upon required notice.
Certain services normally available to shareholders of Money Market Funds,
including the check writing privilege, are not available for Money Market Fund
shares you acquire in an exchange.
Telephone Exchanges. For your protection when calling Morgan Stanley Dean Witter
Trust FSB, we will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. These procedures may
include requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number. Telephone
instructions also may be recorded.
12
<PAGE>
Telephone instructions will be accepted if received by the Fund's transfer agent
between 9:00 a.m. and 4:00 p.m. Eastern time, on any day the New York Stock
Exchange is open for business. During periods of drastic economic or market
changes, it is possible that the telephone exchange procedures may be difficult
to implement, although this has not been the case with the Fund in the past.
Margin Accounts. If you have pledged your Fund shares in a margin account,
contact your Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative regarding restrictions on the exchange of such shares.
Tax Considerations of Exchanges. If you exchange shares of the Fund for shares
of another Morgan Stanley Dean Witter Fund there are important tax
considerations. For tax purposes, the exchange out of the Fund is considered a
sale of Fund shares -- and the exchange into the other Fund is considered a
purchase. As a result, you may realize a capital gain or loss.
You should review the "Tax Consequences" section and consult your own tax
professional about the tax consequences of an exchange.
Frequent Exchanges. A pattern of frequent exchanges may result in the Fund
limiting or prohibiting, at its discretion, additional purchases and/or
exchanges. The Fund will notify you in advance of limiting your exchange
privileges.
CDSC Calculations on Exchanges. See the "Share Class Arrangements" section of
this Prospectus for a further discussion of how applicable contingent deferred
sales charges (CDSCs) are calculated for shares of one Morgan Stanley Dean
Witter Fund that are exchanged for shares of another.
For further information regarding exchange privileges, you should contact your
Morgan Stanley Dean Witter Financial Advisor or call (800) 869-NEWS.
13
<PAGE>
[GRAPHIC OMITTED]
HOW TO SELL SHARES
- ------------------
You can sell some or all of your Fund shares at any time. If you sell Class A,
Class B or Class C shares, your net sale proceeds are reduced by the amount of
any applicable CDSC. Your shares will be sold at the next price calculated after
we receive your order to sell as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial Advisor or
Financial Advisor other authorized financial representative.
--------------------------------------------------------------------------------------------
[GRAPHIC OMITTED] Payment will be sent to the address to which the account is registered or deposited in
your brokerage account.
- ------------------------------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:
o your account number;
[GRAPHIC OMITTED] o the dollar amount or the number of shares you wish to sell;
o the Class of shares you wish to sell; and
o the signature of each owner as it appears on the account.
--------------------------------------------------------------------------------------------
If you are requesting payment to anyone other than the registered owner(s) or that payment
be sent to any address other than the address of the registered owner(s) or pre-designated
bank account, you will need a signature guarantee. You can obtain a signature guarantee from
an eligible guarantor acceptable to Morgan Stanley Dean Witter Trust FSB. (You should contact
Morgan Stanley Dean Witter Trust FSB at (800) 869-NEWS for a determination as to whether a
particular institution is an eligible guarantor.) A notary public cannot provide a signature
guarantee. Additional documentation may be required for shares held by a corporation,
partnership, trustee or executor.
--------------------------------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983, Jersey City,
New Jersey 07303. If you hold share certificates, you must return the certificates, along
with the letter and any required additional documentation.
--------------------------------------------------------------------------------------------
A check will be mailed to the name(s) and address in which the account is registered, or
otherwise according to your instructions.
- ------------------------------------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has a total
Withdrawal Plan market value of at least $10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the amount is at least $25), on
[GRAPHIC OMITTED] a monthly, quarterly, semi-annual or annual basis, from any Fund with a balance of at least
$1,000. Each time you add a Fund to the plan, you must meet the plan requirements.
--------------------------------------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC may be waived under
certain circumstances. See the Class B waiver categories listed in the "Share Class
Arrangements" section of this Prospectus.
--------------------------------------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your Morgan Stanley Dean
Witter Financial Advisor or call (800) 869-NEWS. You may terminate or suspend your
plan at any time. Please remember that withdrawals from the plan are sales of shares,
not Fund "distributions," and ultimately may exhaust your account balance. The Fund
may terminate or revise the plan at any time.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Payment for Sold Shares. After we receive your complete instructions to sell as
described above, a check will be mailed to you within seven days, although we
will attempt to make payment within one business day. Payment may also be sent
to your brokerage account.
Payment may be postponed or the right to sell your shares suspended under
unusual circumstances. If you request to sell shares that were recently
purchased by check, payment of the sale proceeds may be delayed for the minimum
time needed to verify that the check has been honored (not more than fifteen
days from the time we receive the check).
Tax Considerations. Normally, your sale of Fund shares is subject to federal and
state income tax. You should review the "Tax Consequences" section of this
Prospectus and consult your own tax professional about the tax consequences of a
sale.
Reinstatement Privilege. If you sell Fund shares and have not previously
exercised the reinstatement privilege, you may, within 35 days after the date of
sale, invest any portion of the proceeds in the same Class of Fund shares at
their net asset value and receive a pro rata credit for any CDSC paid in
connection with the sale.
Involuntary Sales. The Fund reserves the right, on sixty days' notice, to sell
the shares of any shareholder (other than shares held in an IRA or 403(b)
Custodial Account) whose shares, due to sales by the shareholder, have a value
below $100, or in the case of an account opened through EasyInvest(SM), if after
12 months the shareholder has invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will notify you
and allow you sixty days to make an additional investment in an amount that will
increase the value of your account to at least the required amount before the
sale is processed. No CDSC will be imposed on any involuntary sale.
Margin Accounts. If you pledged your Fund shares in a margin account contact
your Morgan Stanley Dean Witter Financial Advisor or other authorized financial
representative regarding restrictions on the sales of such shares.
15
<PAGE>
[GRAPHIC OMITTED]
DISTRIBUTIONS
- -------------
The Fund passes substantially all of its earnings from income and capital gains
along to its investors as "distributions." The Fund earns income from stocks and
interest from fixed-income investments. These amounts are passed along to Fund
shareholders as "income dividend distributions." The Fund realizes capital gains
whenever it sells securities for a higher price than it paid for them. These
amounts may be passed along as "capital gain distributions."
(sidebar)
TARGETED DIVIDENDS(SM)
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another Morgan Stanley Dean Witter Fund
that you own. Contact your Morgan Stanley Dean Witter Financial Advisor for
further information about this service.
(end sidebar)
The Fund declares income dividends separately for each Class. Distributions paid
on Class A and Class D shares usually will be higher than for Class B and Class
C because distribution fees that Class B and Class C pay are higher. Normally,
income dividends are distributed quarterly and capital gains are distributed
annually in December. The Fund, however, may retain and reinvest any long-term
capital gains. The Fund may at times make payments from sources other than
income or capital gains that represent a return of a portion of your investment.
Distributions are reinvested automatically in additional shares of the same
Class and automatically credited to your account, unless you request in writing
that all distributions be paid in cash. If you elect the cash option, the Fund
will mail a check to you no later than seven business days after the
distribution is declared. No interest will accrue on uncashed checks. If you
wish to change how your distributions are paid, your request should be received
by the Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at least
five business days prior to the record date of the distributions.
[GRAPHIC OMITTED]
TAX CONSEQUENCES
- ----------------
As with any investment, you should consider how your Fund investment will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in the Fund.
Unless your investment in the Fund is through a tax-deferred retirement account,
such as a 401(k) plan or IRA, you need to be aware of the possible tax
consequences when:
o The Fund makes distributions; and
o You sell Fund shares, including an exchange to another Morgan Stanley Dean
Witter Fund.
Taxes on Distributions. Your distributions are normally subject to federal and
state income tax when they are paid, whether you take them in cash or reinvest
them in
16
<PAGE>
Fund shares. A distribution also may be subject to local income tax. Any income
dividend distributions and any short-term capital gain distributions are taxable
to you as ordinary income. Any long-term capital gain distributions are taxable
as long-term capital gains, no matter how long you have owned shares in the
Fund.
Every January, you will be sent a statement (IRS Form 1099-DIV) showing the
taxable distributions paid to you in the previous year. The statement provides
full information on your dividends and capital gains for tax purposes.
Taxes on Sales. Your sale of Fund shares normally is subject to federal and
state income tax and may result in a taxable gain or loss to you. A sale also
may be subject to local income tax. Your exchange of Fund shares for shares of
another Morgan Stanley Dean Witter Fund is treated for tax purposes like a sale
of your original shares and a purchase of your new shares. Thus, the exchange
may, like a sale, result in a taxable gain or loss to you and will give you a
new tax basis for your new shares.
When you open your Fund account, you should provide your social security or tax
identification number on your investment application. By providing this
information, you will avoid being subject to a federal backup withholding tax of
31% on taxable distributions and redemption proceeds. Any withheld amount would
be sent to the IRS as an advance tax payment.
[GRAPHIC OMITTED]
SHARE CLASS ARRANGEMENTS
- ------------------------
The Fund offers several Classes of shares having different distribution
arrangements designed to provide you with different purchase options according
to your investment needs. Your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative can help you decide which Class may be
appropriate for you.
The general public is offered three Classes: Class A shares, Class B shares and
Class C shares, which differ principally in terms of sales charges and ongoing
expenses. A fourth Class, Class D shares, is offered only to a limited category
of investors. Shares that you acquire through reinvested distributions will not
be subject to any front-end sales charge or CDSC -- contingent deferred sales
charge. Sales personnel may receive different compensation for selling each
Class of shares. The sales charges applicable to each Class provide for the
distribution financing of shares of that Class.
17
<PAGE>
The chart below compares the sales charge and annual 12b-1 fee applicable to
each Class:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CLASS SALES CHARGE ANNUAL 12B-1 FEE
- --------------------------------------------------------------------------------
<S> <C> <C>
A Maximum 5.25% initial sales charge reduced for
purchase of $25,000 or more; shares sold without an
initial sales charge are generally subject to a 1.0%
CDSC during the first year 0.25%
- --------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year decreasing
to 0% after six years 1.0%
- --------------------------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
- --------------------------------------------------------------------------------
D None None
- --------------------------------------------------------------------------------
</TABLE>
CLASS A SHARES Class A shares are sold at net asset value plus an initial
sales charge of up to 5.25%. The initial sales charge is reduced for purchases
of $25,000 or more according to the schedule below. Investments of $1 million or
more are not subject to an initial sales charge, but are generally subject to a
contingent deferred sales charge, or CDSC, of 1.0% on sales made within one year
after the last day of the month of purchase. The CDSC will be assessed in the
same manner and with the same CDSC waivers as with Class B shares. Class A
shares are also subject to a distribution (12b-1) fee of up to 0.25% of the
average daily net assets of the Class.
The offering price of Class A shares includes a sales charge (expressed as a
percentage of the offering price) on a single transaction as shown in the
following table:
(sidebar)
FRONT-END SALES CHARGE OR FSC
An initial sales charge you pay when purchasing Class A shares that is based on
a percentage of the offering price. The percentage declines based upon the
dollar value of Class A shares you purchase. We offer three ways to reduce your
Class A sales charges -- the Combined Purchase Privilege, Right of Accumulation
and Letter of Intent.
(end sidebar)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
FRONT-END SALES CHARGE
----------------------------------------------
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF AMOUNT INVESTED
- -------------------------------------------------------------------------------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
- -------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
- -------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
- -------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
- -------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
- -------------------------------------------------------------------------------------
$1 million and over 0 0
- -------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
The reduced sales charge schedule is applicable to purchases of Class A shares
in a single transaction by:
o A single account (including an individual, trust or fiduciary account).
o Family member accounts (limited to husband, wife and children under the age
of 21).
o Pension, profit sharing or other employee benefit plans of companies and
their affiliates.
o Tax-exempt organizations.
o Groups organized for a purpose other than to buy mutual fund shares.
Combined Purchase Privilege. You also will have the benefit of reduced sales
charges by combining purchases of Class A shares of the Fund in a single
transaction with purchases of Class A shares of other Multi-Class Funds and
shares of FSC Funds.
Right of Accumulation. You also may benefit from a reduction of sales charges if
the cumulative net asset value of Class A shares of the Fund purchased in a
single transaction, together with shares of other Funds you currently own which
were previously purchased at a price including a front-end sales charge
(including shares acquired through reinvestment of distributions), amounts to
$25,000 or more. Also, if you have a cumulative net asset value of all your
Class A and Class D shares equal to at least $5 million (or $25 million for
certain employee benefit plans), you are eligible to purchase Class D shares of
any Fund subject to the Fund's minimum initial investment requirement.
You must notify your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative (or Morgan Stanley Dean Witter Trust
FSB if you purchase directly through the Fund), at the time a purchase order
is placed, that the purchase qualifies for the reduced charge under the
Right of Accumulation. Similar notification must be made in writing when an
order is placed by mail. The reduced sales charge will not be granted if:
(i) notification is not furnished at the time of the order; or (ii) a review of
the records of Dean Witter Reynolds or other authorized dealer of Fund shares
or the Fund's transfer agent does not confirm your represented holdings.
Letter of Intent. The schedule of reduced sales charges for larger purchases
also will be available to you if you enter into a written "letter of intent." A
letter of intent provides for the purchase of Class A shares of the Fund or
other Multi-Class Funds or shares of FSC Funds. The initial purchase under a
letter of intent must be at least 5% of the stated investment goal. To determine
the applicable sales charge reduction, you may also include: (1) the cost of
shares of other Morgan Stanley Dean Witter Funds which were previously purchased
at a price including a front-end sales charge during the 90-day period prior to
the distributor receiving the letter of intent, and (2) the cost of shares of
other Funds you currently own acquired in exchange for shares of Funds purchased
during that period at a price including a front-end sales charge. You can obtain
a letter of intent by contacting your Morgan Stanley Dean Witter Financial
Advisor or other
19
<PAGE>
authorized financial representative, or by calling (800) 869-NEWS. If you do not
achieve the stated investment goal within the thirteen-month period, you are
required to pay the difference between the sales charges otherwise applicable
and sales charges actually paid, which may be deducted from your investment.
Other Sales Charge Waivers. In addition to investments of $1 million or more,
your purchase of Class A shares is not subject to a front-end sales charge (or a
CDSC upon sale) if your account qualifies under one of the following categories:
o A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.
o Persons participating in a fee-based investment program (subject to all of
its terms and conditions, including mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor pursuant to which they
pay an asset-based fee for investment advisory, administrative and/or
brokerage services.
o Employer-sponsored employee benefit plans, whether or not qualified under
the Internal Revenue Code, for which Morgan Stanley Dean Witter Trust FSB
serves as trustee or Dean Witter Reynolds' Retirement Plan Services serves
as recordkeeper under a written Recordkeeping Services Agreement ("MSDW
Eligible Plans") which have at least 200 eligible employees.
o An MSDW Eligible Plan whose Class B shares have converted to Class A shares,
regardless of the plan's asset size or number of eligible employees.
o A client of a Morgan Stanley Dean Witter Financial Advisor who joined us
from another investment firm within six months prior to the date of purchase
of Fund shares, and you used the proceeds from the sale of shares of a
proprietary mutual fund of that Financial Advisor's previous firm that
imposed either a front-end or deferred sales charge to purchase Class A
shares, provided that: (1) you sold the shares not more than 60 days prior
to the purchase of Fund shares, and (2) the sale proceeds were maintained in
the interim in cash or a money market fund.
o Current or retired Directors/Trustees of the Morgan Stanley Dean Witter
Funds, such persons' spouses and children under the age of 21, and trust
accounts for which any of such persons is a beneficiary.
o Current or retired directors, officers and employees of Morgan Stanley Dean
Witter & Co. and any of its subsidiaries, such persons' spouses and children
under the age of 21, and trust accounts for which any of such persons is a
beneficiary.
20
<PAGE>
CLASS B SHARES Class B shares are offered at net asset value with no initial
sales charge but are subject to a contingent deferred sales charge, or CDSC, as
set forth in the table below. For the purpose of calculating the CDSC, shares
are deemed to have been purchased on the last day of the month during which they
were purchased.
(sidebar)
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A fee you pay when you sell shares of certain Morgan Stanley Dean Witter Funds
purchased without an initial sales charge. This fee declines the longer you hold
your shares as set forth in the table.
(end sidebar)
<TABLE>
<CAPTION>
CDSC AS A PERCENTAGE
YEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED
- ---------------------------------------------------------
<S> <C>
First 5.0%
- ---------------------------------------------------------
Second 4.0%
- ---------------------------------------------------------
Third 3.0%
- ---------------------------------------------------------
Fourth 2.0%
- ---------------------------------------------------------
Fifth 2.0%
- ---------------------------------------------------------
Sixth 1.0%
- ---------------------------------------------------------
Seventh and thereafter None
- ---------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange shares, shares with no CDSC
will be sold or exchanged first, then shares with the lowest CDSC will be sold
or exchanged next. For any shares subject to a CDSC, the CDSC will be assessed
on an amount equal to the lesser of the current market value or the cost of the
shares being sold.
Special CDSC Considerations for Fund Shares Held Prior to July 28, 1997. If you
held Fund shares prior to July 28, 1997 that were acquired in exchange for
shares of Morgan Stanley Dean Witter Global Short-Term Income Fund, Dean Witter
National Municipal Trust or Dean Witter High Income Securities that have been
designated Class B shares, these Fund shares are subject to the other fund's
lower CDSC schedule, with two exceptions. First, if you subsequently exchange
these Class B shares for shares of a fund with a higher CDSC schedule, the
higher CDSC schedule will apply. Second, if you exchange the Class B shares for
shares of a Morgan Stanley Dean Witter Money Market Fund and re-exchange back
into the Fund, the CDSC schedule set forth in the above table will apply.
CDSC Waivers. A CDSC, if otherwise applicable, will be waived in the case of:
o Sales of shares held at the time you die or become disabled (within the
definition in Section 72(m)(7) of the Internal Revenue Code which relates
to the ability to engage in gainful employment), if the shares are:
(i) registered either in your name (not a trust) or in the names of you and
your spouse as joint tenants with right of survivorship; or (ii) held in a
qualified corporate or self-employed retirement plan, IRA or 403(b)
Custodial Account, provided in either case that the sale is requested within
one year of your death or initial determination of disability.
o Sales in connection with the following retirement plan "distributions":
(i) lump-sum or other distributions from a qualified corporate or
self-employed retirement plan following retirement (or, in the case of a
"key employee" of a "top heavy" plan,
21
<PAGE>
following attainment of age 59 1/2); (ii) distributions from an IRA or
403(b) Custodial Account following attainment of age 59 1/2; or (iii) a
tax-free return of an excess IRA contribution (a "distribution" does not
include a direct transfer of IRA, 403(b) Custodial Account or retirement
plan assets to a successor custodian or trustee).
o Sales of shares held for you as a participant in an MSDW Eligible Plan.
o Sales of shares in connection with the Systematic Withdrawal Plan of up to
12% annually of the value of each Fund from which plan sales are made. The
percentage is determined on the date you establish the Systematic Withdrawal
Plan and based on the next calculated share price. You may have this CDSC
waiver applied in amounts up to 1% per month, 3% per quarter, 6%
semi-annually or 12% annually. Shares with no CDSC will be sold first,
followed by those with the lowest CDSC. As such, the waiver benefit will be
reduced by the amount of your shares that are not subject to a CDSC. If you
suspend your participation in the plan, you may later resume plan payments
without requiring a new determination of the account value for the 12% CDSC
waiver.
o Sales of shares that (i) certain unit investment trusts purchased (on which
a sales charge has been paid) or (ii) are attributable to reinvested
distributions from, or the proceeds of, certain unit investment trusts.
All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for a CDSC
waiver, please contact your Financial Advisor or call (800) 869-NEWS.
Distribution Fee. Class B shares are subject to an annual 12b-1 fee of 1.0% of
the average daily net assets of Class B shares.
Conversion Feature. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales charge. The
ten year period runs from the last day of the month in which the shares were
purchased, or in the case of Class B shares acquired through an exchange, from
the last day of the month in which the original Class B shares were purchased;
the shares will convert to Class A shares based on their relative net asset
values in the month following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically reinvested
distributions will convert to Class A shares on the same basis. (Class B shares
held before May 1, 1997, however, will convert to Class A shares in May 2007.)
In the case of Class B shares held in an MSDW Eligible Plan, the plan is treated
as a single investor and all Class B shares will convert to Class A shares on
the conversion date of the Class B shares of a Morgan Stanley Dean Witter Fund
purchased by that plan.
Currently, the Class B share conversion is not a taxable event; the conversion
feature may be cancelled if it is deemed a taxable event in the future by the
Internal Revenue Service.
22
<PAGE>
If you exchange your Class B shares for shares of a Money Market Fund, No-Load
Fund or Short-Term U.S. Treasury Trust, the holding period for conversion is
frozen as of the last day of the month of the exchange and resumes on the last
day of the month you exchange back into Class B shares.
Exchanging Shares Subject to a CDSC. There are special considerations when you
exchange Fund shares that are subject to a CDSC. When determining the length of
time you held the shares and the corresponding CDSC rate, any period (starting
at the end of the month) during which you held shares of a fund that does not
charge a CDSC will not be counted. Thus, in effect the "holding period" for
purposes of calculating the CDSC is frozen upon exchanging into a fund that does
not charge a CDSC.
For example, if you held Class B shares of the Fund in a regular account for one
year, exchanged to Class B of another Morgan Stanley Dean Witter Multi-Class
Fund for another year, then sold your shares, a CDSC rate of 4% would be imposed
on the shares based on a two year holding period -- one year for each Fund.
However, if you had exchanged the shares of the Fund for a Money Market Fund
(which does not charge a CDSC) instead of the Multi-Class Fund, then sold your
shares, a CDSC rate of 5% would be imposed on the shares based on a one year
holding period. The one year in the Money Market Fund would not be counted.
Nevertheless, if shares subject to a CDSC are exchanged for a Fund that does not
charge a CDSC, you will receive a credit when you sell the shares equal to the
distribution (12b-1) fees, if any, you paid on those shares while in that Fund
up to the amount of any applicable CDSC.
In addition, shares that are exchanged into or from a Morgan Stanley Dean Witter
Fund subject to a higher CDSC rate will be subject to the higher rate, even if
the shares are re-exchanged into a Fund with a lower CDSC rate.
CLASS C SHARES Class C shares are sold at net asset value with no initial
sales charge but are subject to a CDSC of up to 1.0% on sales made within one
year after the last day of the month of purchase. The CDSC will be assessed in
the same manner and with the same CDSC waivers as with Class B shares.
Distribution Fee. Class C shares are subject to an annual distribution (12b-1)
fee of up to 1.0% of the average daily net assets of that Class. The Class C
shares' distribution fee may cause that Class to have higher expenses and pay
lower dividends than Class A or Class D shares. Unlike Class B shares, Class C
shares have no conversion feature and, accordingly, an investor that purchases
Class C shares may be subject to distribution (12b-1) fees applicable to Class C
shares for an indefinite period.
23
<PAGE>
CLASS D SHARES Class D shares are offered without any sales charge on
purchases or sales and without any distribution (12b-1) fee. Class D shares are
offered only to investors meeting an initial investment minimum of $5 million
($25 million for MSDW Eligible Plans) and the following investor categories:
o Investors participating in the Investment Manager's mutual fund asset
allocation program (subject to all of its terms and conditions, including
mandatory sale or transfer restrictions on termination) pursuant to which
they pay an asset-based fee.
o Persons participating in a fee-based investment program (subject to all of
its terms and conditions, including mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor pursuant to which they
pay an asset-based fee for investment advisory, administrative and/or
brokerage services.
o Employee benefit plans maintained by Morgan Stanley Dean Witter & Co. or any
of its subsidiaries for the benefit of certain employees of Morgan Stanley
Dean Witter & Co. and its subsidiaries.
o Certain unit investment trusts sponsored by Dean Witter Reynolds.
o Certain other open-end investment companies whose shares are distributed by
the Fund's distributor.
o Investors who were shareholders of the Dean Witter Retirement Series on
September 11, 1998 for additional purchases for their former Dean Witter
Retirement Series accounts.
Meeting Class D Eligibility Minimums. To meet the $5 million ($25 million for
MSDW Eligible Plans) initial investment to qualify to purchase Class D shares
you may combine: (1) purchases in a single transaction of Class D shares of the
Fund and other Morgan Stanley Dean Witter Multi-Class Funds and/or (2) previous
purchases of Class A and Class D shares of Multi-Class Funds and shares of FSC
Funds you currently own, along with shares of Morgan Stanley Dean Witter Funds
you currently own that you acquired in exchange for those shares.
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a cash
payment representing an income dividend or capital gain and you reinvest that
amount in the applicable Class of shares by returning the check within 30 days
of the payment date, the purchased shares would not be subject to an initial
sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12b-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment Company Act of
1940 with respect to the distribution of Class A, Class B and Class C shares.
The Plan allows the Fund to pay distribution fees for the sale and distribution
of these shares. It also allows the Fund to pay for services to shareholders of
Class A, Class B and Class C shares. Because these fees are paid out of the
Fund's assets on an ongoing basis, over time these fees will increase the cost
of your investment in these Classes and may cost you more than paying other
types of sales charges.
24
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the life of the Fund. Certain information reflects
financial results for a single Fund share throughout each year. The total
returns in the table represent the rate an investor would have earned or lost
on an investment in the Fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report,
which is available upon request.
<TABLE>
<CAPTION>
CLASS C SHARES
- -----------------------------------------------------------------------------------------------------------
FOR THE PERIOD
MARCH 28, 1995*
THROUGH
FOR THE YEAR ENDED JANUARY 31 JANUARY 31,
1999++ 1998***++ 1997 1996
- -----------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.66 $13.01 $11.92 $10.00
- -----------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.22 0.32 0.25 0.31
Net realized and unrealized gain 2.04 2.23 1.33 1.88
-------- -------- -------- -------
Total income from investment
operations 2.26 2.55 1.58 2.19
- -----------------------------------------------------------------------------------------------------------
Less dividends and distributions from:
Net investment income (0.28) (0.30) (0.27) (0.27)**
Net realized gain (1.65) (0.60) (0.22) --
-------- -------- -------- -------
Total dividends and distributions (1.93) (0.90) (0.49) (0.27)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.99 $14.66 $13.01 $11.92
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 16.23% 19.82% 13.44% 22.13%(1)
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -----------------------------------------------------------------------------------------------------------
Expenses 1.80%(4) 1.87% 1.92%(3) --(2)(3)
- -----------------------------------------------------------------------------------------------------------
Net investment income 1.88%(4) 2.18% 2.31%(3) 4.25%(2)(3)
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $203,132 $110,909 $119,416 $47,596
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 28% 16% 2%(1)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
** Includes a capital gain distribution of $0.004.
*** Prior to July 28, 1997, the fund issued one class of shares. All shares
of the Fund held prior to that date, other than shares which were
acquired in exchange for shares of Funds for which Morgan Stanley Dean
Witter Advisors Inc. serves as Investment Manager ("Morgan Stanley Dean
Witter Funds") offered with either a front-end sales charge or a
contingent deferred sales charge ("CDSC") and shares acquired through
reinvestment of dividends and distributions thereon, have been designated
Class C shares. Shares held prior to July 28, 1997 which were acquired in
exchange for shares of a Morgan Stanley Dean Witter Fund sold with a
front-end sales charge, including shares acquired through reinvestment of
dividends and distributions thereon, have been designated Class A shares
and shares held prior to July 28, 1997 which were acquired in exchange
for shares of a Morgan Stanley Dean Witter Fund sold with a CDSC,
including shares acquired through reinvestment of dividends and
distributions thereon, have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) If the Investment Manager had not reimbursed expenses and waived the
management fee, the annualized expense and net investment income ratios
would have been 1.95% and 2.28%, respectively, for the year ended January
31, 1997, and 2.42% and 1.83%, respectively, for the period ended January
31, 1996.
(4) Reflects overall Fund ratios for investment income and non-class specific
expenses.
25
<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES++
- ---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
JANUARY 31, 1999 THROUGH JANUARY 31, 1998
- ---------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $14.68 $14.69
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.36 0.21
Net realized and unrealized gain 2.01 0.50
--------- ---------
Total income from investment operations 2.37 0.71
- ---------------------------------------------------------------------------------------------
Less dividends and distributions from:
Net investment income (0.39) (0.21)
Net realized gain (1.65) (0.51)
--------- ---------
Total dividends and distributions (2.04) (0.72)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $15.01 $14.68
- ---------------------------------------------------------------------------------------------
TOTAL RETURN+ 17.02% 4.77%(1)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------
Expenses 1.06%(3) 1.12%(2)
- ---------------------------------------------------------------------------------------------
Net investment income 2.62%(3) 2.84%(2)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $3,670 $343
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 28%
- ---------------------------------------------------------------------------------------------
</TABLE>
* The date the shares were first issued. Shareholders who held shares of
the Fund prior to July 28, 1997 (the date the Fund converted to a
multiple class share structure) should refer to the Financial Highlights
of Class C to obtain the historical per share data and ratio information
of their shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
26
<PAGE>
<TABLE>
<CAPTION>
CLASS B SHARES++
- ---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
JANUARY 31, 1999 THROUGH JANUARY 31, 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA:
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.67 $14.69
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.21 0.16
Net realized and unrealized gain 2.03 0.49
-------- --------
Total income from investment operations 2.24 0.65
- ---------------------------------------------------------------------------------------------
Less dividends and distributions from:
Net investment income (0.27) (0.16)
Net realized gain (1.65) (0.51)
-------- --------
Total dividends and distributions (1.92) (0.67)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $14.99 $14.67
- ---------------------------------------------------------------------------------------------
TOTAL RETURN+ 16.09% 4.38%(1)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------
Expenses 1.81%(3) 1.86%(2)
- ---------------------------------------------------------------------------------------------
Net investment income 1.87%(3) 2.14%(2)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $99,666 $71,900
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 28%
- ---------------------------------------------------------------------------------------------
</TABLE>
* The date the shares were first issued. Shareholders who held shares of
the Fund prior to July 28, 1997 (the date the Fund converted to a
multiple class share structure) should refer to the Financial Highlights
of Class C to obtain the historical per share data and ratio information
of their shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
27
<PAGE>
<TABLE>
<CAPTION>
CLASS D SHARES++
- ---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
JANUARY 31, 1999 THROUGH JANUARY 31, 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA:
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.68 $14.69
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.37 0.24
Net realized and unrealized gain 2.03 0.48
--------- ---------
Total income from investment operations 2.40 0.72
- ---------------------------------------------------------------------------------------------
Less dividends and distributions from:
Net investment income (0.42) (0.22)
Net realized gain (1.65) (0.51)
--------- ---------
Total dividends and distributions (2.07) (0.73)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $15.01 $14.68
- ---------------------------------------------------------------------------------------------
TOTAL RETURN+ 17.28% 4.88%(1)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------
Expenses 0.81%(3) 0.86%(2)
- ---------------------------------------------------------------------------------------------
Net investment income 2.87%(3) 3.08%(2)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $1,853 $16
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 28%
- ---------------------------------------------------------------------------------------------
</TABLE>
* The date the shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
28
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on
in and meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Equity Fund
Growth Fund
Market Leader Trust
Mid-Cap Growth Fund
Special Value Fund
Value Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
Precious Metals and Minerals Trust
Real Estate Fund
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas" Portfolio
European Growth Fund
Fund of Funds - International Portfolio
Global Dividend Growth Securities
International Fund
International SmallCap Fund
Japan Fund
Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH & INCOME FUNDS
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Value/Added Market Series/Equity Portfolio
THEME FUNDS
Global Utilities Fund
Utilities Fund
- --------------------------------------------------------------------------------
INCOME FUNDS
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund(NL)
GLOBAL INCOME FUNDS
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust(FSC)
Limited Term Municipal Trust(NL)
Multi-State Municipal Series Trust(FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund(MM)
U.S. Government Money Market Trust(MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust(MM)
New York Municipal Money Market Trust(MM)
Tax-Free Daily Income Trust(MM)
There may be Funds created after this Prospectus was published. Please consult
the inside front cover of a new Fund's prospectus for its designations, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund except for
Short-Term U.S. Treasury Trust, unless otherwise noted, is a Multi-Class Fund,
which is a mutual fund offering multiple Classes of shares. The other types of
Funds are: NL -- No-Load (Mutual) Fund; MM -- Money Market Fund; FSC -- A
mutual fund sold with a front-end sales charge and a distribution (12b-1) fee.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS - MAY 28, 1999
- --------------------------------------------------------------------------------
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's Statement of Additional Information also provides additional information
about the Fund. The Statement of Additional Information is incorporated herein
by reference (legally is part of this Prospectus). For a free copy of any of
these documents, to request other information about the Fund, or to make
shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
WWW.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.
TICKER SYMBOLS:
Class A: BGRAX Class C: BGRCX
- ---------------- ----------------
Class B: BGRBX Class D: BGRDX
- ---------------- ----------------
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-7245)
Morgan Stanley Dean Witter
BALANCED GROWTH FUND
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS TO
PROVIDE CAPITAL GROWTH WITH
REASONABLE CURRENT INCOME
