<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND Two World Trade Center,
LETTER TO THE SHAREHOLDERS March 31, 1999 New York, New York 10048
DEAR SHAREHOLDER:
During the twelve-month period ended March 31, 1999, the U.S. equity markets
experienced a significant degree of turbulence, first rising 20 percent in an
environment of declining inflation and interest rates, then falling nearly the
same 20 percent as investors began to question whether the United States would
be drawn into recession. Subsequently, the market rebounded more than 25 percent
after short-term rates were cut and the economy strengthened. In the first
quarter of 1999 the market continued to be buoyed by an unprecedented mix of low
interest rates, robust earnings and a roaring U.S. economy. Throughout the
fiscal year, the world -- and especially the U.S. economy -- continued to evolve
toward an information-based economy. As a result, the sectors targeted by Morgan
Stanley Dean Witter Information Fund continued to prosper.
PERFORMANCE
During the twelve-month period under review, the Fund's Class B shares produced
a total return of 53.44 percent, compared with 18.47 percent for the S&P 500
Composite Stock Price Index (S&P 500) and 42.67 percent for the Lipper Science &
Technology Funds Index. For the same period the Fund's Class A, C and D shares
posted total returns of 54.33 percent, 53.36 percent and 54.96 percent,
respectively. The performance of the Fund's four share classes varies because
each class has different expenses. The accompanying chart illustrates the growth
of a $10,000 investment in the Fund from its inception through the fiscal year
ended March 31, 1999, versus similar investments in the Lipper and S&P 500
indexes.
PORTFOLIO
The Fund continues to invest in all aspects of the communications and
information industries, choosing companies with solid demand, proven management,
proprietary technology or barriers to entry, and strategic relationships or
alliances. As of March 31, 1999, net assets stood at approximately $601 million.
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
LETTER TO THE SHAREHOLDERS March 31, 1999, continued
The Fund's best-performing sector during the fiscal year was Internet-related
stocks. This sector includes both Internet services firms, such as America
Online and Yahoo, and so-called bandwidth stocks: networking equipment vendors
like Cisco and Lucent and companies that build and run networks, such as
WorldCom, Qwest and Global Crossing.
On March 31, the Fund held 48 percent of its assets in information technology
(chips, equipment and software), 30 percent in information services (World Wide
Web firms, consulting, bandwidth service providers and business services) and 15
percent in information distribution and content (media, broadcasters and cable).
Cash equivalents made up the remaining 7 percent. Foreign stocks and American
Depositary Receipts (ADRs) represented 8 percent of investments. Online and
Web-related stocks are spread throughout the categories above. Significant
holdings included Intel, Time Warner, WorldCom, Qualcomm, Teradyne and Lycos.
Among the Fund's technology holdings, we have lowered our overweight position in
high-value-added firms, such as software companies, and raised the weighting in
commodity vendors, such as semiconductor manufacturers and PC-related companies.
LOOKING AHEAD
We believe that the fundamentals underpinning the information and technology
sectors remain robust and that the targeted sectors will outperform over the
long run as technology continues to gain in importance as a component of
worldwide spending. In the coming year we do not expect a recession, but we do
have one concern for the technology sector related to the year 2000 conversion
effort (Y2K). As January 1, 2000, approaches and Y2K-related spending is
reduced, certain technology firms may see correspondingly reduced demand, due to
companies potentially minimizing their technology purchases in late 1999.
In addition, we believe that the Web will play a key role in the future of our
information economy as Web-based firms continue to reinvent significant parts of
Americans' everyday lives. Because of this trend, we continue to favor
Web-related stocks and plan to watch this sector closely for promising
investment opportunities in the year to come.
On May 1, 1999, Mitchell M. Merin was named President of the Morgan Stanley Dean
Witter Funds. Mr. Merin is also the President and Chief Operating Officer of
Asset Management of Morgan Stanley Dean Witter & Co., and President, Chief
Executive Officer and Director of Morgan Stanley Dean Witter Advisors Inc., the
Fund's Investment Manager. He also serves as Chairman, Chief Executive Officer
and Director of the Fund's distributor and transfer agent.
2
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
LETTER TO THE SHAREHOLDERS March 31, 1999, continued
We appreciate your ongoing support of Morgan Stanley Dean Witter Information
Fund and look forward to continuing to serve your investment needs.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
- --------------------------- --------------------------------------
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
3
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
FUND PERFORMANCE March 31, 1999
GROWTH OF $10,000 CLASS B SHARES
($ in Thousands)
<TABLE>
<CAPTION>
Date TOTAL S&P 500 LIPPER
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
November 28, 1995 $10,000 $10,000 $10,000
March 31, 1996 $10,677 $10,743 $9,473
March 31, 1997 $8,936 $12,873 $10,121
March 31, 1998 $13,950 $19,047 $13,845
March 31, 1999 $21,204 $22,564 $19,753
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. PERFORMANCE FOR CLASS A,
CLASS C, AND CLASS D SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B SHARES
SHOWN ABOVE DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES**
- --------------------------------------------------------------
PERIOD ENDED 3/31/99
- ----------------------------
<S> <C> <C>
1 Year 53.44%(1) 48.44%(2)
Since Inception (11/28/95) 25.61%(1) 25.26%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES++
- -------------------------------------------------------------
PERIOD ENDED 3/31/99
- ---------------------------
<S> <C> <C>
1 Year 53.36%(1) 52.36%(2)
Since Inception (7/28/97) 45.40%(1) 45.40%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS A SHARES+
- -------------------------------------------------------------
PERIOD ENDED 3/31/99
- ---------------------------
<S> <C> <C>
1 Year 54.33%(1) 46.23%(2)
Since Inception (7/28/97) 46.45%(1) 41.80%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES#
- ---------------------------------------------
PERIOD ENDED 3/31/99
- ---------------------------
<S> <C>
1 Year 54.96%(1)
Since Inception (7/28/97) 46.87%(1)
</TABLE>
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value after the deduction of a 2% CDSC, assuming a complete
redemption on March 31, 1999.
(4) The Standard & Poor's 500 Stock Index (S&P 500) 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.
(5) The Lipper Science and Technology Funds Index is an equally-weighted
performance index of the largest-qualifying funds (based on net assets) in
the Lipper Science and Technology Funds objective. The Index, which is
adjusted for capital gains distributions and income dividends, is unmanaged
and should not be considered an investment. There are currently 10 funds
represented in this Index.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The
CDSC declines to 0% after six years.
+ The maximum front-end sales charge for Class A is 5.25%.
++ The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of purchase.
# Class D shares have no sales charge.
4
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS March 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (92.9%)
Advertising (2.9%)
40,000 DoubleClick Inc.* ...................... $ 7,282,500
90,000 Lamar Advertising Co.* ................. 3,054,375
243,000 Outdoor Systems, Inc.* ................. 7,290,000
------------
17,626,875
------------
Biotechnology (0.0%)
80,000 Hyseq, Inc.* ........................... 235,000
------------
Books/Magazines (0.1%)
9,200 Ziff-Davis Inc.* ....................... 331,200
------------
Broadcasting (5.4%)
100,000 CBS Corp.* ............................. 4,093,750
180,000 Chancellor Media Corp.* ................ 8,471,250
60,000 Clear Channel Communications,
Inc.* .................................. 4,023,750
140,000 Jacor Communications, Inc.* ............ 10,631,250
140,000 USA Networks, Inc.* .................... 5,005,000
------------
32,225,000
------------
Cable Television (4.4%)
140,000 AT&T Corp. -- Liberty Media
Group (Class A)* ....................... 7,367,500
172,900 Cablevision Systems Corp.
(Class A)* ............................. 12,816,212
90,000 Comcast Corp. (Class A Special) ........ 5,664,375
40,000 PrimaCom AG (ADR)
(Germany)* ............................. 697,500
------------
26,545,587
------------
Catalog/Specialty Distribution (0.2%)
70,000 Micro Warehouse, Inc.* ................. 1,128,750
------------
Cellular Telephone (1.7%)
70,000 AirTouch Communications, Inc.*.......... 6,763,750
145,000 Powertel, Inc.* ........................ 2,048,125
75,000 Vimpel -- Communications (ADR)
(Russia)* .............................. 1,162,500
------------
9,974,375
------------
Computer Communications (3.2%)
130,000 Ascend Communications, Inc.* ........... 10,879,375
70,000 Cisco Systems, Inc.* ................... 7,669,375
20,000 Tut Systems, Inc.* ..................... 992,500
------------
19,541,250
------------
Computer Hardware (3.6%)
60,000 EMC Corp.* ............................. 7,665,000
30,000 Gateway 2000, Inc.* .................... 2,056,875
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------- ----------------
<S> <C> <C>
90,000 Hewlett-Packard Co. .................... $ 6,103,125
45,000 Sun Microsystems, Inc.* ................ 5,625,000
------------
21,450,000
------------
Computer Software & Services (2.2%)
80,000 Clarify Inc.* .......................... 2,110,000
370,000 Gensym Corp.* .......................... 1,017,500
122,500 I2 Technologies, Inc.* ................. 3,253,906
140,000 JDA Software Group, Inc.* .............. 1,023,750
60,000 Legato Systems, Inc.* .................. 3,078,750
110,000 Rational Software Corp.* ............... 2,915,000
------------
13,398,906
------------
Computer Software (7.4%)
10,000 Autonomy Corp. PLC
(United Kingdom)* ...................... 87,500
130,000 BEA Systems, Inc.* ..................... 2,015,000
150,000 BMC Software, Inc.* .................... 5,559,375
190,000 Citrix Systems, Inc.* .................. 7,220,000
370,000 Compuware Corp.* ....................... 8,833,750
70,000 Entrust Technologies Inc.* ............. 2,358,125
60,000 Hyperion Solutions Corp.* .............. 870,000
140,000 Mastech Corp.* ......................... 1,802,500
40,000 Microsoft Corp.* ....................... 3,582,500
40,000 Network Associates, Inc.* .............. 1,227,500
110,000 New Era of Networks, Inc.* ............. 7,452,500
110,000 Oracle Corp.* .......................... 2,901,250
50,000 Serena Software, Inc.* ................. 678,125
------------
44,588,125
------------
Containers/Packaging (0.3%)
30,000 Temple-Inland, Inc. .................... 1,882,500
------------
Diversified Electronic Products (1.6%)
125,000 Security Dynamics Technologies,
Inc.* .................................. 2,320,312
65,000 Uniphase Corp.* ........................ 7,458,750
------------
9,779,062
------------
Diversified Financial Services (0.6%)
30,000 American Express Co. ................... 3,525,000
------------
E.D.P. Peripherals (2.1%)
247,500 Network Appliance, Inc.* ............... 12,560,625
47,500 Splash Technology Holdings, Inc.* ...... 287,969
------------
12,848,594
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS March 31, 1999, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------- ------------------
<S> <C> <C>
E.D.P. Services (2.0%)
150,000 Diamond Technology Partners,
Inc.* ................................ $ 3,440,625
190,000 First Data Corp.* .................... 8,122,500
10,000 SEMA Group PLC (United
Kingdom) ............................. 112,724
10,000 Zergo Holdings PLC (United
Kingdom)* ............................ 122,474
------------
11,798,323
------------
Electronic Components (1.9%)
40,000 ADC Telecommunications, Inc.* ........ 1,907,500
140,000 Analog Devices, Inc.* ................ 4,165,000
31,000 Anaren Microwave, Inc.* .............. 751,750
5,000 Brokat Infosystems AG
(Germany)* ........................... 786,575
100,000 LSI Logic Corp.* ..................... 3,118,750
20,000 Solectron Corp.* ..................... 971,250
------------
11,700,825
------------
Electronic Data Processing (0.2%)
20,000 Electronic Data Systems Corp. ........ 973,750
------------
Electronic Production Equipment (4.9%)
90,000 Advanced Energy Industries, Inc.* 2,115,000
70,000 Applied Materials, Inc.* ............. 4,318,125
227,500 ATMI, Inc.* .......................... 4,535,781
75,000 Novellus Systems, Inc.* .............. 4,125,000
260,000 Teradyne, Inc.* ...................... 14,186,250
------------
29,280,156
------------
Internet Services (9.7%)
10,000 Allaire Corp.* ....................... 678,750
30,000 America Online, Inc.* ................ 4,380,000
90,000 Excite, Inc.* ........................ 12,588,750
60,000 Inktomi Corp.* ....................... 5,130,000
13,600 iVillage Inc.* ....................... 1,363,400
40,000 Lycos, Inc.* ......................... 3,440,000
90,000 Network Solutions, Inc. (Class A)* 9,517,500
6,200 OneMain.com, Inc.* ................... 224,750
120,000 USWeb Corp.* ......................... 4,935,000
20,000 VeriSign, Inc.* ...................... 3,080,000
90,000 XOOM.com, Inc.* ...................... 6,030,000
40,000 Yahoo! Inc.* ......................... 6,727,500
------------
58,095,650
------------
Investment Bankers/Brokers/
Services (1.5%)
105,000 Merrill Lynch & Co., Inc. ............ 9,285,938
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------- ------------------
<S> <C> <C>
Major Chemicals (0.3%)
40,000 Monsanto Co. ......................... $ 1,837,500
------------
Major Pharmaceuticals (0.8%)
60,000 Merck & Co., Inc. .................... 4,811,250
------------
Major U.S. Telecommunications (4.1%)
28,785 AT&T Corp. ........................... 2,297,403
120,000 GTE Corp. ............................ 7,260,000
170,000 MCI WorldCom, Inc.* .................. 15,045,000
------------
24,602,403
------------
Media Conglomerates (2.7%)
230,000 Time Warner, Inc. .................... 16,344,375
------------
Movies/Entertainment (0.0%)
2,600 Westwood One, Inc.* .................. 74,100
------------
Office/Plant Automation (0.4%)
320,000 Manugistics Group, Inc.* ............. 2,120,000
------------
Oilfield Services/Equipment (0.8%)
340,000 Veritas DGC Inc.* .................... 4,823,750
------------
Other Consumer Services (0.1%)
6,500 Autobytel.com, Inc.* ................. 271,375
5,400 Autoweb.com, Inc.* ................... 192,038
------------
463,413
------------
Other Telecommunications (1.7%)
190,000 Pacific Gateway Exchange, Inc.* ...... 6,305,625
60,000 Teligent, Inc. (Class A)* ............ 2,475,000
42,200 United Pan-Europe
Communications NV (ADR)
(Netherlands) ........................ 1,614,150
------------
10,394,775
------------
Recreational Products/Toys (0.4%)
45,000 Electronic Arts Inc.* ................ 2,131,875
------------
Semiconductors (8.5%)
40,000 Altera Corp.* ........................ 2,377,500
52,500 ANADIGICS, Inc.* ..................... 922,031
110,000 Broadcom Corp. (Class A)* ............ 6,765,000
150,000 Conexant Systems, Inc.* .............. 4,143,750
110,000 Galileo Technology Ltd. (ADR)
(Israel)* ............................ 2,530,000
140,000 Genesis Microchip, Inc.* ............. 3,325,000
75,000 Intel Corp. .......................... 8,915,625
40,000 STMicroelectronics NV
(Netherlands)* ....................... 3,885,000
85,000 Vitesse Semiconductor Corp.* ......... 4,297,813
340,000 Xilinx, Inc.* ........................ 13,770,000
------------
50,931,719
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS March 31, 1999, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ---------------
<S> <C> <C>
Services to the Health Industry (0.2%)
40,000 IMS Health Inc. ...................... $ 1,325,000
------------
Telecommunications (4.5%)
96,500 COLT Telecom Group PLC (ADR)
(United Kingdom)* .................... 6,929,906
130,000 Frontier Corp. ....................... 6,743,750
130,000 Global Crossing Ltd. (Bermuda)* ...... 6,012,500
70,000 Telecom Italia S.p.A. (ADR) (Italy) 7,306,250
------------
26,992,406
------------
Telecommunications Equipment (11.7%)
220,000 Corning, Inc. ........................ 13,200,000
50,000 EchoStar Communications Corp.
(Class A)* ........................... 4,068,750
50,000 JDS Fitel Inc. (Canada) .............. 2,818,302
190,000 Motorola, Inc. ....................... 13,917,500
60,000 Nokia Corp. (ADR) (Class A)
(Finland) ............................ 9,345,000
200,000 QUALCOMM, Inc.* ...................... 24,850,000
283,000 Tekelec* ............................. 2,069,438
------------
70,268,990
------------
Utilities -- Telecommunications (0.5%)
110,000 Intermedia Communications, Inc.* 2,928,750
------------
Wireless Communications (0.3%)
50,000 Western Wireless Corp. (Class A)* 1,806,250
------------
TOTAL COMMON STOCKS
(Identified Cost $451,352,209) ....... 558,071,422
------------
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------- ---------------
SHORT-TERM INVESTMENT (a) (6.6%)
U.S. GOVERNMENT AGENCY
$ 39,500 Federal Home Loan Mortgage
Corp. 4.82% due 04/01/99
(Amortized Cost $39,500,000) ...... $ 39,500,000
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL INVESTMENTS
(Identified Cost $490,852,209) (b) ..... 99.5% 597,571,422
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ......................... 0.5 3,004,285
----- -----------
NET ASSETS ............................. 100.0% $600,575,707
===== ============
</TABLE>
- --------------------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate
shown has been adjusted to reflect a money market equivalent
yield.
(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$114,893,663 and the aggregate gross unrealized depreciation is
$8,174,450, resulting in net unrealized appreciation of
$106,719,213.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT MARCH 31, 1999:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO RECEIVE FOR DATE DEPRECIATION
- --------------- ----------- ---------- -------------
<S> <C> <C> <C>
CAD 4,239,750 $2,812,998 04/05/99 $(1,492)
</TABLE>
Currency abbreviation:
- ----------------------
CAD Canadian Dollar.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $490,852,209) ............... $597,571,422
Cash ............................................ 3,660,641
Receivable for:
Investments sold ........................... 13,107,548
Shares of beneficial interest sold ......... 6,239,315
Dividends .................................. 175,283
Deferred organizational expenses ................ 59,599
Prepaid expenses and other assets ............... 127,222
------------
TOTAL ASSETS ................................ 620,941,030
------------
LIABILITIES:
Payable for:
Investments purchased ...................... 18,250,562
Shares of beneficial interest
repurchased ............................. 1,212,981
Plan of distribution fee ................... 433,374
Investment management fee .................. 369,662
Accrued expenses and other payables ............. 98,744
------------
TOTAL LIABILITIES ........................... 20,365,323
------------
NET ASSETS .................................. $600,575,707
============
COMPOSITION OF NET ASSETS:
Paid-in-capital ................................. $399,780,529
Net unrealized appreciation ..................... 106,719,213
Accumulated undistributed net realized gain 94,075,965
------------
NET ASSETS .................................. $600,575,707
============
CLASS A SHARES:
Net Assets ...................................... $ 5,252,659
Shares Outstanding (unlimited authorized,
$.01 par value)............................... 273,200
NET ASSET VALUE PER SHARE ................... $ 19.23
============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net
asset value) ............................. $ 20.30
============
CLASS B SHARES:
Net Assets ...................................... $580,993,529
Shares Outstanding (unlimited authorized,
$.01 par value)............................... 30,598,991
NET ASSET VALUE PER SHARE ................... $ 18.99
============
CLASS C SHARES:
Net Assets ...................................... $ 11,890,018
Shares Outstanding (unlimited authorized,
$.01 par value)............................... 626,314
NET ASSET VALUE PER SHARE ................... $ 18.98
============
CLASS D SHARES:
Net Assets ...................................... $ 2,439,501
Shares Outstanding (unlimited authorized,
$.01 par value)............................... 126,224
NET ASSET VALUE PER SHARE ................... $ 19.33
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended March 31, 1999
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Interest .......................................... $ 1,201,542
Dividends (net of $14,037 foreign withholding tax) 468,774
------------
TOTAL INCOME .................................. 1,670,316
------------
EXPENSES
Plan of distribution fee (Class A shares) ......... 2,847
Plan of distribution fee (Class B shares) ......... 3,076,724
Plan of distribution fee (Class C shares) ......... 28,291
Investment management fee ......................... 2,497,979
Transfer agent fees and expenses .................. 511,558
Registration fees ................................. 119,880
Shareholder reports and notices ................... 74,039
Professional fees ................................. 46,462
Custodian fees .................................... 42,097
Organizational expenses ........................... 35,839
Trustees' fees and expenses ....................... 10,326
Other ............................................. 11,904
------------
TOTAL EXPENSES ................................ 6,457,946
------------
NET INVESTMENT LOSS ........................... (4,787,630)
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain ................................. 121,979,309
Net change in unrealized appreciation ............. 44,883,484
------------
NET GAIN ...................................... 166,862,793
------------
NET INCREASE ...................................... $162,075,163
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998*
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss .................................. $ (4,787,630) $ (3,690,258)
Net realized gain .................................... 121,979,309 47,488,489
Net change in unrealized appreciation ................ 44,883,484 61,837,292
------------- -------------
NET INCREASE ...................................... 162,075,163 105,635,523
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
REALIZED GAIN:
Class A shares ....................................... (70,594) --
Class B shares ....................................... (35,107,622) --
Class C shares ....................................... (186,602) --
Class D shares ....................................... (143,401) --
------------- -------------
TOTAL DISTRIBUTIONS ............................... (35,508,219) --
------------- -------------
Net increase (decrease) from transactions in shares of
beneficial interest ................................ 204,706,149 (50,059,140)
------------- -------------
NET INCREASE ...................................... 331,273,093 55,576,383
NET ASSETS:
Beginning of period .................................. 269,302,614 213,726,231
------------- -------------
END OF PERIOD
(Including accumulated net investment losses of
$0 and $93, respectively) ......................... $ 600,575,707 $ 269,302,614
============= =============
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1999
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Information Fund (the "Fund"), formerly Dean Witter
Information Fund, is registered under the Investment Company Act of 1940, as
amended (the "Act"), as a diversified, open-end management investment company.
The Fund's investment objective is long-term capital appreciation. The Fund
seeks to achieve its investment objective by investing primarily in common
stocks and securities convertible into common stocks of domestic and foreign
companies which are involved in the communications and information industry. The
Fund was organized as a Massachusetts business trust on December 8, 1994 and
commenced operations on November 28, 1995. On July 28, 1997, the Fund commenced
offering three additional classes of shares, with the then current shares
designated as Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager"), formerly Dean Witter InterCapital Inc., that sale or bid prices are
not reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Trustees; and (4) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a
10
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1999, continued
mark-to-market basis until sixty days prior to maturity and thereafter at
amortized cost based on their value on the 61st day. Short-term debt securities
having a maturity date of sixty days or less at the time of purchase are valued
at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Discounts are accreted over the
life of the respective securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized foreign currency gain or loss and in the Statement of
Assets and Liabilities as part of the related foreign currency denominated asset
or liability. The Fund records realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished (compensated) by
entering into a closing transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
11
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1999, continued
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
H. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of approximately $179,000 which have been
reimbursed for the full amount thereof. Such expenses have been deferred and are
being amortized on the straight-line method over a period not to exceed five
years from commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.75% to the portion of daily net assets not exceeding
$500 million; and 0.725% to the portion of daily net assets exceeding $500
million.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net
12
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1999, continued
assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Class B shares since the inception of the Fund (not
including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Class B shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been imposed
or waived; or (b) the average daily net assets of Class B; and (iii) Class C --
up to 1.0% of the average daily net assets of Class C. In the case of Class A
shares, amounts paid under the Plan are paid to the Distributor for services
provided. In the case of Class B and Class C shares, amounts paid under the Plan
are paid to the Distributor for (1) services provided and the expenses borne by
it and others in the distribution of the shares of these Classes, including the
payment of commissions for sales of these Classes and incentive compensation to,
and expenses of, Morgan Stanley Dean Witter Financial Advisors and others who
engage in or support distribution of the shares or who service shareholder
accounts, including overhead and telephone expenses; (2) printing and
distribution of prospectuses and reports used in connection with the offering of
these shares to other than current shareholders; and (3) preparation, printing
and distribution of sales literature and advertising materials. In addition, the
Distributor may utilize fees paid pursuant to the Plan, in the case of Class B
shares, to compensate Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor, and other selected broker-dealers for their
opportunity costs in advancing such amounts, which compensation would be in the
form of a carrying charge on any unreimbursed expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $15,203,812 at March 31, 1999.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended March 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.23% and
1.0%, respectively.
13
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1999, continued
The Distributor has informed the Fund that for the year ended March 31, 1999, it
received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $28, $555,684 and
$3,690, respectively and received $83,321 in front-end sales charges from sales
of the Fund's Class A shares. The respective shareholders pay such charges which
are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended March 31, 1999 aggregated
$1,457,892,778 and $1,331,345,823, respectively.
For the year ended March 31, 1999, the Fund incurred brokerage commissions of
$130,835 with DWR for portfolio transactions executed on behalf of the Fund. At
March 31, 1999, the Fund's receivable for investments sold and payable for
investments purchased included unsettled trades with DWR of $1,850,824 and
$1,193,313, respectively.
For the year ended March 31, 1999, the Fund incurred brokerage commissions of
$70,777 with Morgan Stanley & Co., Inc., an affiliate of the Investment Manager
and Distributor for portfolio transactions executed on behalf of the Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1999, the Fund had
transfer agent fees and expenses payable of approximately $5,400.
5. FEDERAL INCOME TAX STATUS
As of March 31, 1999, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and permanent book/tax
differences primarily attributable to a net operating loss. To reflect
reclassifications arising from the permanent differences, paid-in-capital was
charged $35,479, accumulated undistributed net realized gain was charged
$4,752,244 and net investment loss was credited $4,787,723.
14
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1999, continued
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998*
---------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold ....................................... 794,860 $ 13,534,680 15,349 $ 178,877
Reinvestment of distributions .............. 4,724 68,291 -- --
Reedemed ................................... (541,066) (9,175,146) (667) (8,097)
-------- -------------- ------ -------------
Net increase -- Class A .................... 258,518 4,427,825 14,682 170,780
-------- -------------- ------ -------------
CLASS B SHARES
Sold ....................................... 20,256,885 326,607,844 3,649,152 42,792,430
Reinvestment of distributions .............. 2,344,073 32,974,532 -- --
Redeemed ................................... (11,182,276) (169,607,131) (8,387,989) (94,589,565)
----------- -------------- ---------- -------------
Net increase (decrease) -- Class B ......... 11,418,682 189,975,245 (4,738,837) (51,797,135)
----------- -------------- ---------- -------------
CLASS C SHARES
Sold ....................................... 902,795 14,998,830 19,252 242,097
Reinvestment of distributions .............. 12,281 175,587 -- --
Redeemed ................................... (306,601) (5,003,784) (1,413) (17,311)
----------- -------------- ---------- -------------
Net increase -- Class C .................... 608,475 10,170,633 17,839 224,786
----------- -------------- ---------- -------------
CLASS D SHARES
Sold ....................................... 370,541 5,507,461 104,357 1,342,429
Reinvestment of distributions .............. 691 9,984 -- --
Redeemed ................................... (349,365) (5,384,999) -- --
----------- -------------- ---------- -------------
Net increase -- Class D .................... 21,867 132,446 104,357 1,342,429
----------- -------------- ---------- -------------
Net increase (decrease) in Fund ............ 12,307,542 $ 204,706,149 (4,601,959) $ (50,059,140)
=========== ============== ========== =============
</TABLE>
- ---------------
* For Class A, C and D shares, for the period July 28, 1997 (issue date) through
March 31, 1998.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At March 31, 1999, there were outstanding forward foreign currency contracts
used to facilitate settlement of foreign currency denominated portfolio
transactions.
15
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31,
---------------------------------------------------------
1999++ 1998**++ 1997
-------------------- ----------------- ------------------
<S> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $ 13.94 $ 8.94 $ 10.67
----------- -------- ----------
Income (loss) from investment operations:
Net investment loss ................................... (0.22) (0.18) (0.13)
Net realized and unrealized gain (loss) ............... 6.99 5.18 (1.60)
----------- -------- ----------
Total income (loss) from investment operations ......... 6.77 5.00 (1.73)
----------- -------- ----------
Less dividends and distributions:
In excess of net investment income .................... -- -- --
From net realized gain ................................ (1.72) -- --
----------- -------- ----------
Total dividends and distributions ...................... (1.72) -- --
----------- -------- ----------
Net asset value, end of period ......................... $ 18.99 $ 13.94 $ 8.94
=========== ======== ==========
TOTAL RETURN+ .......................................... 53.44 % 56.10 % (16.31)%
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 1.95 %(3) 2.05 % 2.01 %
Net investment loss .................................... (1.45)%(3) (1.54)% (1.16)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $580,994 $267,384 $ 213,726
Portfolio turnover rate ................................ 419 % 218 % 132 %
<CAPTION>
FOR THE PERIOD
NOVEMBER 28, 1995*
THROUGH
MARCH 31, 1996
-----------------------
<S> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $ 10.00
----------
Income (loss) from investment operations:
Net investment loss ................................... (0.01)
Net realized and unrealized gain (loss) ............... 0.69
----------
Total income (loss) from investment operations ......... 0.68
----------
Less dividends and distributions:
In excess of net investment income .................... (0.01)
From net realized gain ................................ --
----------
Total dividends and distributions ...................... (0.01)
----------
Net asset value, end of period ......................... $ 10.67
==========
TOTAL RETURN+ .......................................... 6.77 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 2.31 %(2)
Net investment loss .................................... (0.51)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $207,321
Portfolio turnover rate ................................ 8 %(1)
</TABLE>
- -------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
MARCH 31, 1999 MARCH 31, 1998
------------------ ------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period .............. $ 14.02 $ 11.43
-------- -------
Income (loss) from investment operations:
Net investment loss .............................. (0.11) (0.08)
Net realized and unrealized gain ................. 7.04 2.67
-------- -------
Total income from investment operations ........... 6.93 2.59
-------- -------
Less distributions from net realized gain......... (1.72) --
-------- -------
Net asset value, end of period .................... $ 19.23 $ 14.02
======== =======
TOTAL RETURN+ ..................................... 54.33 % 22.66 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .......................................... 1.24 %(3) 1.27 %(2)
Net investment loss ............................... (0.74)%(3) (0.93)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........... $ 5,253 $ 206
Portfolio turnover rate ........................... 419 % 218 %
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period .............. $ 13.94 $ 11.43
-------- -------
Income (loss) from investment operations:
Net investment loss .............................. (0.24) (0.14)
Net realized and unrealized gain ................. 7.00 2.65
-------- -------
Total income from investment operations ........... 6.76 2.51
-------- -------
Less distributions from net realized gain......... (1.72) --
-------- -------
Net asset value, end of period .................... $ 18.98 $ 13.94
======== =======
TOTAL RETURN+ ..................................... 53.36 % 21.96 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .......................................... 2.01 %(3) 2.05 %(2)
Net investment loss ............................... (1.51)%(3) (1.72)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........... $11,890 $ 249
Portfolio turnover rate ........................... 419 % 218 %
</TABLE>
- --------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
MARCH 31, 1999 MARCH 31, 1998
------------------ ------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period .............. $ 14.03 $ 11.43
--------- ---------
Income (loss) from investment operations:
Net investment loss .............................. (0.08) (0.07)
Net realized and unrealized gain ................. 7.10 2.67
--------- ---------
Total income from investment operations ........... 7.02 2.60
--------- ---------
Less distributions from net realized gain......... (1.72) --
--------- ---------
Net asset value, end of period .................... $ 19.33 $ 14.03
========= =========
TOTAL RETURN+ ..................................... 54.96 % 22.75 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .......................................... 1.01 %(3) 1.04 %(2)
Net investment loss ............................... (0.51)%(3) (0.82)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........... $ 2,440 $ 1,464
Portfolio turnover rate ........................... 419 % 218 %
</TABLE>
- --------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
MORGAN STANLEY DEAN WITTER INFORMATION FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER INFORMATION FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Morgan Stanley Dean Witter
Information Fund (the "Fund"), formerly Dean Witter Information Fund, at March
31, 1999, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended and the
financial highlights for each of the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at March 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
May 7, 1999
1999 FEDERAL TAX NOTICE (unaudited)
During the year ended March 31, 1999, the Fund paid to shareholders $1.72
per share from long-term capital gains.
19
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
George Paoletti
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus
of the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
MORGAN STANLEY
DEAN WITTER
INFORMATION FUND
[Graphic]
ANNUAL REPORT
MARCH 31, 1999
