Morgan Stanley Institutional Fund Inc – ‘485BPOS’ on 5/1/00

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Post-Effective Amendment
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Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Post-Effective Amendment                             273   1.72M 
 2: EX-99.(A)(10)  Miscellaneous Exhibit                               5     17K 
 3: EX-99.(D)(5)  Miscellaneous Exhibit                                1      8K 
 4: EX-99.(D)(6)  Miscellaneous Exhibit                                5     22K 
 5: EX-99.(G)(4)  Miscellaneous Exhibit                                9     31K 
 6: EX-99.(I)   Miscellaneous Exhibit                                  2     12K 
 7: EX-99.(J)   Miscellaneous Exhibit                                  1      7K 
 8: EX-99.(P)   Miscellaneous Exhibit                                 14     38K 
 9: EX-99.(Q)   Miscellaneous Exhibit                                 12     34K 

485BPOS   —   Post-Effective Amendment
Document Table of Contents

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As Filed With the Securities and Exchange Commission on April __, 2000        

                                                               File No. 33-23166
                                                                811-5624
----------------------------------------------------------------------------    
      SECURITIES AND EXCHANGE COMMISSION
     Washington, D.C.  20549
      ----------------

     FORM N-1A

              REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933      / /
                          POST-EFFECTIVE AMENDMENT NO. 43                  /X/

     and

          REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  / /
                                  AMENDMENT NO. 44                         /X/

     MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
----------------------------------------------------
      (Exact Name of Registrant as Specified in Charter)

     1221 Avenue of the Americas
    New York, New York 10020
    ------------------------------------------
     (Address of Principal Executive Offices) (Zip Code)

      Registrant's Telephone Number, including Area Code: (800) 548-7786
                                                          --------------

      Harold J. Schaaff, Jr., Esq.
     Morgan Stanley Dean Witter Investment Management Inc.
   1221 Avenue of the Americas, New York, New York 10020
   -----------------------------------------------------------------
     (Name and Address of Agent for Service)

      Copy to:

                                                                [Download Table]

                                                                                 
Harold J. Schaaff, Jr. Esq.                           Richard W. Grant, Esq.     
Morgan Stanley Dean Witter Investment Management Inc. Morgan, Lewis & Bockius LLP
1221 Avenue of the Americas                           1701 Market Street         
New York, NY 10020                                    Philadelphia, PA  19103    

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

It is proposed that this filing will become effective (check appropriate box)   

immediately upon filing pursuant to paragraph (b)           
----                                                                  
X  on May 1, 2000 pursuant to paragraph (b)                       
----                                                                  
60 days after filing pursuant to paragraph (a)(1)           
----                                                                  
75 days after filing pursuant to paragraph (a)(2)           
----                                                                  
on [ date]  pursuant to paragraph (a) of Rule 485.          
----                                                                  

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

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

PORTFOLIOS OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

EQUITY GROWTH PORTFOLIO                                                         

THE EQUITY GROWTH PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING   
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF LARGE CAPITALIZATION          
COMPANIES.                                                                      

FOCUS EQUITY PORTFOLIO                                                          

THE FOCUS EQUITY PORTFOLIO SEEKS CAPITAL APPRECIATION BY INVESTING PRIMARILY IN 
EQUITY SECURITIES THAT EXHIBIT STRONG OR ACCELERATED EARNINGS GROWTH.           

SMALL COMPANY GROWTH PORTFOLIO                                                  
THE SMALL COMPANY GROWTH PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY      
INVESTING PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF SMALL COMPANIES.    

VALUE EQUITY PORTFOLIO                                                          

THE VALUE EQUITY PORTFOLIO SEEKS HIGH TOTAL RETURN BY INVESTING PRIMARILY IN    
EQUITY SECURITIES THAT THE INVESTMENT ADVISER BELIEVES TO BE UNDERVALUED        
RELATIVE TO THE STOCK MARKET IN GENERAL AT THE TIME OF PURCHASE.                

TECHNOLOGY PORTFOLIO                                                            

THE TECHNOLOGY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING      
PRIMARILY IN EQUITY SECURITIES OF COMPANIES THAT THE INVESTMENT ADVISER EXPECTS 
WILL BENEFIT FROM THEIR INVOLVEMENT IN TECHNOLOGY AND TECHNOLOGY-RELATED        
INDUSTRIES.                                                                     

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           
DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"). 

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     EQUITY GROWTH PORTFOLIO                                   1 
     FOCUS EQUITY PORTFOLIO                                    2 
     SMALL COMPANY GROWTH PORTFOLIO                            3 
     VALUE EQUITY PORTFOLIO                                    4 
     TECHNOLOGY PORTFOLIO                                      5 
     ADDITIONAL RISK FACTORS AND INFORMATION                   6 
FEES AND EXPENSES OF THE PORTFOLIOS                            8 
INVESTMENT ADVISER                                             9 
MANAGEMENT FEES                                                9 
PORTFOLIO MANAGERS                                             10
DISTRIBUTION OF PORTFOLIO SHARES                               11
SHAREHOLDER INFORMATION                                        11
FINANCIAL HIGHLIGHTS                                           14
     EQUITY GROWTH PORTFOLIO                                   15
     FOCUS EQUITY PORTFOLIO                                    16
     SMALL COMPANY GROWTH PORTFOLIO                            17
     VALUE EQUITY PORTFOLIO                                    18
     TECHNOLOGY PORTFOLIO                                      19
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
EQUITY GROWTH PORTFOLIO                                                         
------------------------------------------------------------------------------- 

THE EQUITY GROWTH PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING   
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF LARGE CAPITALIZATION          
COMPANIES.                                                                      

----------------------------------------------------------------------------    
APPROACH                                                                        

MSDW Investment Management seeks to maximize long-term capital appreciation by  
investing primarily in equity securities of U.S. and, to a limited extent,      
foreign companies that exhibit strong or accelerating earnings growth. The      
universe of eligible companies generally includes those with market             
capitalizations of $1 billion or more. MSDW Investment Management emphasizes    
individual security selection and may focus the Portfolio's holdings within the 
limits permissible for a diversified fund.                                      

PROCESS                                                                         
MSDW Investment Management follows a flexible investment program in looking for 
companies with above average capital appreciation potential. MSDW Investment    
Management focuses on companies with consistent or rising earnings growth       
records and compelling business strategies. MSDW Investment Management          
continually and rigorously studies company developments, including business     
strategy, management focus and financial results, to identify companies with    
earnings growth and business momentum. In addition, MSDW Investment Management  
closely monitors analysts' expectations to identify issuers that have the       
potential for positive earnings surprises versus consensus expectations.        
Valuation is of secondary importance and is viewed in the context of prospects  
for sustainable earnings growth and the potential for positive earnings         
surprises in relation to consensus expectations. The Portfolio considers selling
securities of issuers that no longer meet MSDW Investment Management's criteria.

RISK                                                                            

Investing in the Equity Growth Portfolio may be appropriate for you if you are  
willing to accept the risks and uncertainties of investing in equity securities 
in the hope of earning superior returns. In general, prices of equity securities
are more volatile than those of fixed income securities. The prices of equity   
securities will rise and fall in response to a number of different factors. In  
particular, prices of equity securities will respond to events that affect      
entire financial markets or industries (changes in inflation or consumer demand,
for example) and to events that affect particular issuers (news about the       
success or failure of a new product, for example). In addition, at times the    
Portfolio's market sector, large-capitalization growth-oriented equity          
securities, may underperform relative to other sectors.                         

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]
PERFORMANCE  
(CLASS A     
SHARES)      
COMMENCED    
OPERATIONS   
ON APRIL     
2, 1991      
             
1992 7.13%   
1993 4.33%   
1994 3.26%   
1995 45.02%  
1996 30.97%  
1997 31.32%  
1998 19.04%  
1999 39.89%  
HIGH         
(QUARTER)    
10/98        
-            
12/98        
22.67%       
LOW          
(QUARTER)    
7/98         
-            
9/98         
-16.09%      

AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)            

                                                        [Enlarge/Download Table]

                            CLASS A           CLASS B                                
                           (COMMENCED        (COMMENCED                              
                         OPERATIONS ON     OPERATIONS ON            S&P 500 INDEX*   
                         APRIL 2, 1991)   JANUARY 2, 1996)        CLASS A    CLASS B 
                                                                                     
-------------------------------------------------------------------------------------
 PAST ONE YEAR               39.89%            39.61%             21.04%      21.04% 
-------------------------------------------------------------------------------------
 PAST FIVE YEARS             32.93%             N/A               28.55%       N/A   
-------------------------------------------------------------------------------------
 SINCE INCEPTION             21.28%            29.63%             19.35%      26.18% 

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE S&P 500 INDEX IS COMPRISED OF THE STOCKS OF 500 LARGE-CAP U.S. COMPANIES   
WITH MARKET CAPITALIZATIONS OF $1 BILLION OR MORE. THESE 500 COMPANIES        
REPRESENT APPROXIMATELY 100 INDUSTRIES, CHOSEN MAINLY FOR MARKET SIZE,        
LIQUIDITY AND INDUSTRY GROUP REPRESENTATION.                                  

1                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
FOCUS EQUITY PORTFOLIO                                                          
------------------------------------------------------------------------------- 

THE FOCUS EQUITY PORTFOLIO SEEKS CAPITAL APPRECIATION BY INVESTING PRIMARILY IN 
EQUITY SECURITIES THAT EXHIBIT STRONG OR ACCELERATED EARNINGS GROWTH.           

----------------------------------------------------------------------------    
APPROACH                                                                        
MSDW Investment Management seeks to maximize capital appreciation by investing  
in equity securities of U.S., and to a limited extent, foreign companies that   
exhibit strong or accelerating earnings growth. The universe of eligible        
companies mainly includes those with market capitalizations of $1 billion or    
more but may also include smaller companies. MSDW Investment Management         
emphasizes individual security selection. The Portfolio generally concentrates  
its holdings in a relatively small number of companies and may invest up to 25% 
of its assets in a single issuer.                                               

PROCESS                                                                         
MSDW Investment Management follows a flexible investment program in looking for 
companies with above average capital appreciation potential. Fundamental equity 
research drives the process. MSDW Investment Management focuses on companies    
with consistent or rising earnings growth records and compelling business       
strategies. MSDW Investment Management continually and rigorously studies       
company developments, including business strategy, management focus and         
financial results, to identify companies with earnings growth and business      
momentum. In addition, MSDW Investment Management closely monitors analysts'    
expectations to identify issuers that have the potential for positive earnings  
surprises versus consensus expectations. Valuation is of secondary importance   
and is viewed in the context of prospects for sustainable earnings growth and   
the potential for positive earnings surprises in relation to consensus          
expectations. The Portfolio considers selling securities of issuers that no     
longer meet MSDW Investment Management's criteria. MSDW Investment Management's 
focus on individual security selection may lead to an emphasis on particular    
industry sectors.                                                               

RISK                                                                            

Investing in the Focus Equity Portfolio may be appropriate for you if you are   
willing to accept the risks and uncertainties of investing in equity securities 
in the hope of earning superior returns. In general, prices of equity securities
are more volatile than those of fixed income securities. The prices of equity   
securities will rise and fall in response to a number of different factors. In  
particular, equity securities will respond to events that affect entire         
financial markets or industries (changes in inflation or consumer demand, for   
example) and to events that affect particular issuers (news about the success or
failure of a new product, for example). In addition, at times the Portfolio's   
market sector, mid- to large-capitalization growth-oriented equity securities,  
may underperform relative to other sectors.                                     

THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED.                                                 

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
MARCH 8, 1995                       
1996                          40.90%
1997                          33.31%
1998                          15.35%
1999                          46.44%
HIGH (QUARTER)                      
10/98 - 12/98                       
26.17%                              
LOW (QUARTER)                       
7/98 - 9/98                         
-19.27%                             

AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)            

                                                        [Enlarge/Download Table]

                           CLASS A           CLASS B                                 
                         (COMMENCED         (COMMENCED                               
                        OPERATIONS ON     OPERATIONS ON            S&P 500 INDEX*    
                       MARCH 8, 1995)    JANUARY 2, 1996)        CLASS A     CLASS B 
                                                                                     
-------------------------------------------------------------------------------------
 PAST ONE YEAR             46.44%             46.13%             21.04%       21.04% 
-------------------------------------------------------------------------------------
 SINCE INCEPTION           36.58%             32.98%             28.31%       26.18% 

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE S&P 500 INDEX IS COMPRISED OF THE STOCKS OF 500 LARGE-CAP U.S. COMPANIES   
 WITH MARKET CAPITALIZATION OF $1 BILLION OR MORE. THESE 500 COMPANIES REPRESENT
APPROXIMATELY 100 INDUSTRIES, CHOSEN MAINLY FOR MARKET SIZE, LIQUIDITY AND    
INDUSTRY GROUP REPRESENTATION.                                                

2                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
SMALL COMPANY GROWTH PORTFOLIO                                                  
------------------------------------------------------------------------------- 

THE SMALL COMPANY GROWTH PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY      
INVESTING PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF SMALL COMPANIES.    
----------------------------------------------------------------------------    

APPROACH                                                                        

MSDW Investment Management seeks long-term capital appreciation by investing    
primarily in growth-oriented equity securities of small U.S. and, to a limited  
extent, foreign companies. MSDW Investment Management selects issues from a     
universe comprised of approximately 2000 small cap companies, most with market  
capitalization of generally less than $2.5 billion.                             

PROCESS                                                                         
MSDW Investment Management invests in companies that it believes are            
underfollowed by market analysts and that exhibit some or all of the following  
characteristics: (i) superior growth prospects, (ii) accelerating returns on    
invested capital, (iii) sustainable competitive advantages, and                 
(iv) experienced and incentivized management teams. The process for investing is
research intensive and MSDW Investment Management focuses primarily on bottom-up
fundamental analysis, rather than employing a top-down approach. The majority of
the research is generated internally by portfolio managers and their analysts.  
MSDW Investment Management closely tracks companies' earnings quality through   
detailed financial modeling to ensure that reported results accurately reflect  
the underlying economics and trends in the business. In addition, MSDW          
Investment Management utilizes an extensive network of industry contacts and    
access to management teams to monitor changes in the competitive position of the
companies in the Portfolio.                                                     

RISK                                                                            

Investing in the Small Company Growth Portfolio may be appropriate for you if   
you are willing to accept the risks and uncertainties of investing in the equity
securities of growth-oriented small companies in the hope of earning superior   
returns. In general, prices of equity securities are more volatile than those of
fixed income securities. The prices of equity securities will rise and fall in  
response to a number of different factors. In particular, equity securities will
respond to events that affect entire financial markets or industries (changes in
inflation or consumer demand, for example) and to events that affect particular 
issuers (news about the success or failure of a new product, for example). In   
addition, at times the Portfolio's market sector, growth-oriented equity        
securities of small companies, may underperform relative to other sectors.      

THE RISK OF INVESTING IN EQUITY SECURITIES IS INTENSIFIED IN THE CASE OF THE    
SMALL COMPANIES IN WHICH THE PORTFOLIO WILL INVEST. MARKET PRICES FOR SUCH      
COMPANIES' EQUITY SECURITIES TEND TO BE MORE VOLATILE THAN THOSE OF LARGER, MORE
ESTABLISHED COMPANIES. SUCH COMPANIES MAY THEMSELVES BE MORE VULNERABLE TO      
ECONOMIC OR COMPANY SPECIFIC PROBLEMS. BECAUSE OF HIGH VALUATIONS PLACED ON     
COMPANIES WITH GROWTH PROSPECTS WITHIN CERTAIN SECTORS, SUCH AS TECHNOLOGY,     
BIOTECHNOLOGY AND INTERNET, THE PORTFOLIO MAY OWN SECURITIES OF COMPANIES THAT  
HAVE SIGNIFICANT MARKET CAPITALIZATIONS DESPITE A GENERAL LACK OF OPERATING     
HISTORY AND/OR POSITIVE EARNINGS.                                               

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)          
                                      
COMMENCED OPERATIONS ON               
NOVEMBER 1, 1989                      
1990                          3.78%   
1991                          66.79%  
1992                          -11.03% 
1993                          0.00%   
1994                          -0.62%  
1995                          33.31%  
1996                          3.72%   
1997                          11.36%  
1998                          27.54%  
1999                          96.45%  
HIGH (QUARTER)                        
10/99 - 12/99                         
48.70%                                
LOW (QUARTER)                         
7/90 - 9/90                           
-22.43%                               

AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)            

                                                        [Enlarge/Download Table]

                                CLASS A             CLASS B                                         
                               (COMMENCED          (COMMENCED                 RUSSELL 2000          
                             OPERATIONS ON       OPERATIONS ON                   INDEX*             
                           NOVEMBER 1, 1989)    JANUARY 2, 1996)       CLASS A           CLASS B    
                                                                                                    
----------------------------------------------------------------------------------------------------
 PAST ONE YEAR                   96.45%              95.97%             21.26%            21.26%    
----------------------------------------------------------------------------------------------------
 PAST FIVE YEARS                 31.00%               N/A               16.69%             N/A      
----------------------------------------------------------------------------------------------------
 PAST TEN YEARS                  19.43%               N/A               13.40%             N/A      
----------------------------------------------------------------------------------------------------
 SINCE INCEPTION                 19.78%              30.09%             13.26%            13.87%    

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*RUSSELL 2000 INDEX IS AN UNMANAGED INDEX COMPRISED OF 2000 OF THE SMALLEST   
COMPANIES IN THE RUSSELL 3000 INDEX AND REPRESENTS APPROXIMATELY 11% OF THE 
APPROXIMATELY 98% OF THE INVESTIBLE U.S. EQUITY MARKET.                     

3                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
VALUE EQUITY PORTFOLIO                                                          
------------------------------------------------------------------------------- 

THE VALUE EQUITY PORTFOLIO SEEKS HIGH TOTAL RETURN BY INVESTING PRIMARILY IN    
EQUITY SECURITIES THAT MSDW INVESTMENT MANAGEMENT BELIEVES TO BE UNDERVALUED    
RELATIVE TO THE STOCK MARKET IN GENERAL AT THE TIME OF PURCHASE.                

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

APPROACH                                                                        
MSDW Investment Management seeks to construct a diversified portfolio of equity 
securities of U.S. and, to a limited extent, foreign issuers that will          
outperform the market over the long term. MSDW Investment Management emphasizes 
a bottom-up approach to investing that seeks to identify securities of          
undervalued issuers.                                                            

PROCESS                                                                         
MSDW Investment Management selects securities from a universe comprised of the  
500 largest companies in the U.S. market. The selection process focuses on      
companies with distinctively below average price-to-earnings and price-to-book  
value ratios and high dividend yields. MSDW Investment Management conducts      
additional fundamental analysis to ascertain financial soundness. The Portfolio 
then purchases securities of companies that research indicates sell below their 
estimated value. The Portfolio will typically sell securities when prices revert
to MSDW Investment Management's estimated value.                                

RISK                                                                            

Investing in the Value Equity Portfolio may be appropriate for you if you are   
willing to accept the risks and uncertainties of investing in equity securities 
of U.S. issuers in the hope of earning superior returns. In general, prices of  
equity securities are more volatile than those of fixed income securities. The  
prices of equity securities will rise and fall in response to a number of       
different factors. In particular, prices of equity securities will respond to   
events that affect entire financial markets or industries (changes in inflation 
or consumer demand, for example) and to events that affect particular issuers   
(news about the success or failure of a new product, for example). In addition, 
at times the Portfolio's market sector, undervalued equity securities of        
large-capitalization companies, may underperform relative to other sectors.     

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)          
                                      
COMMENCED OPERATIONS ON               
JANUARY 31, 1990                      
1991                          23.60%  
1992                          10.17%  
1993                          15.14%  
1994                          -1.29%  
1995                          33.69%  
1996                          19.73%  
1997                          29.20%  
1998                          8.79%   
1999                          11.63%  
HIGH (QUARTER)                        
4/99 - 6/99                           
16.08%                                
LOW (QUARTER)                         
7/98 - 9/98                           
-17.09%                               

AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)            

                                                        [Enlarge/Download Table]

                            CLASS A            CLASS B                                 
                          (COMMENCED          (COMMENCED                               
                         OPERATIONS ON      OPERATIONS ON            S&P 500 INDEX*    
                       JANUARY 31, 1990)   JANUARY 2, 1996)        CLASS A     CLASS B 
                                                                                       
---------------------------------------------------------------------------------------
 PAST ONE YEAR              11.63%              11.22%             21.04%       21.04% 
---------------------------------------------------------------------------------------
 PAST FIVE YEARS            20.22%               N/A               28.55%        N/A   
---------------------------------------------------------------------------------------
 SINCE INCEPTION            13.93%              16.53%             19.21%       26.18% 

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE S&P 500 INDEX IS COMPRISED OF THE STOCKS OF 500 LARGE-CAP U.S. COMPANIES   
 WITH MARKET CAPITALIZATION OF $1 BILLION OR MORE. THESE 500 COMPANIES REPRESENT
APPROXIMATELY 100 INDUSTRIES, CHOSEN MAINLY FOR MARKET SIZE, LIQUIDITY AND    
INDUSTRY GROUP REPRESENTATION.                                                

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
TECHNOLOGY PORTFOLIO                                                            
------------------------------------------------------------------------------- 

THE TECHNOLOGY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING      
PRIMARILY IN EQUITY SECURITIES OF COMPANIES THAT MSDW INVESTMENT MANAGEMENT     
EXPECTS WILL BENEFIT FROM THEIR INVOLVEMENT IN TECHNOLOGY AND TECHNOLOGY-RELATED
INDUSTRIES.                                                                     

----------------------------------------------------------------------------    
APPROACH                                                                        
MSDW Investment Management seeks to maximize long-term capital appreciation by  
identifying significant long-term technology trends and by investing primarily  
in companies MSDW Investment Management believes are positioned to benefit      
materially from these trends.                                                   

PROCESS                                                                         
MSDW Investment Management extensively researches technology trends in order to 
identify industry sectors and issuers with strong prospects and leading market  
share. The Portfolio invests in a broad range of technology-related industries, 
including: computers; software and peripheral products; electronics;            
communications equipment and services; entertainment; multimedia; and           
information services. The Portfolio seeks to overweight investment in the best- 
positioned sectors, while underweighting the sectors exposed to the greatest    
risk in comparison to potential return. MSDW Investment Management looks to     
invest in issuers with strong management teams, reasonable valuation relative to
growth prospects and whose competitors face sustainable barriers to market      
entry. The Portfolio may participate in the global technology market by         
investing up to 35% of its total assets in the equity or fixed income securities
of foreign issuers, including those located in emerging markets.                

RISK                                                                            

Investing in the Technology Portfolio may be appropriate for you if you are     
willing to accept the risks and uncertainties of investing in equity securities 
of companies in the technology sector in the hope of earning superior returns.  
Because the Portfolio invests primarily in technology-related issuers, there is 
an additional risk that economic events may affect a substantial portion of the 
Portfolio's investments. Historically, the price of securities in this sector   
have tended to be volatile. In general, prices of equity securities are more    
volatile than those of fixed income securities. The prices of equity securities 
will rise and fall in response to a number of different factors. In particular, 
prices of equity securities will respond to events that affect entire financial 
markets or industries (changes in inflation or consumer demand, for example) and
to events that affect a particular issuer (news about the success or failure of 
a new product, for example). In addition, at times the Portfolio's market       
sector, equity securities of technology-related issuers, may underperform       
relative to other sectors.                                                      

THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED. THE PORTFOLIO MAY INVEST IN THE EQUITY          
SECURITIES OF ANY SIZE. WHILE MSDW INVESTMENT MANAGEMENT BELIEVES THAT SMALLER  
COMPANIES MAY PROVIDE GREATER GROWTH POTENTIAL THAN LARGER, MORE ESTABLISHED    
FIRMS, INVESTING IN THE SECURITIES OF SMALLER COMPANIES ALSO INVOLVES GREATER   
RISK AND PRICE VOLATILITY.                                                      

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON              
SEPTEMBER 16, 1996                   
1997                          37.27% 
1998                          53.90% 
1999                          160.62%
HIGH (QUARTER)                       
10/99 - 12/99                        
69.79%                               
LOW (QUARTER)                        
7/98 - 9/98                          
-12.37%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)            

                                                        [Enlarge/Download Table]

                                CLASS A                CLASS B                          
                               (COMMENCED             (COMMENCED                        
                             OPERATIONS ON          OPERATIONS ON                       
                          SEPTEMBER 16, 1996)    SEPTEMBER 16, 1996)     S&P 500 INDEX* 
                                                                                        
----------------------------------------------------------------------------------------
 PAST ONE YEAR                  160.62%                160.26%               21.04%     
----------------------------------------------------------------------------------------
 SINCE INCEPTION                 71.47%                 71.13%               28.15%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE S&P 500 INDEX IS COMPRISED OF THE STOCKS OF 500 LARGE-CAP U.S. COMPANIES   
 WITH MARKET CAPITALIZATION OF $1 BILLION OR MORE. THESE 500 COMPANIES REPRESENT
APPROXIMATELY 100 INDUSTRIES, CHOSEN MAINLY FOR MARKET SIZE, LIQUIDITY AND    
INDUSTRY GROUP REPRESENTATION.                                                

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--------------------------                                                      
INVESTMENT SUMMARY                                                              
--------------------------------------------------------------------------------
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

PRICE VOLATILITY                                                                

The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Over time, equity securities have generally shown gains       
superior to fixed income securities, although they have tended to be more       
volatile in the short term. Fixed income securities, regardless of credit       
quality, also experience price volatility, especially in response to interest   
rate changes. As a result of price volatility, there is a risk that you may lose
money by investing in a Portfolio.                                              

FOREIGN INVESTING                                                               

To the extent that a Portfolio invests in foreign countries, there is the risk  
that news and events unique to a country or region will affect those markets and
their issuers. These same events will not necessarily have an effect on the U.S.
economy or similar issuers located in the United States. In addition, a         
Portfolio's investments in foreign countries generally will be denominated in   
foreign currencies. As a result, changes in the value of a country's currency   
compared to the U.S. dollar may affect the value of a Portfolio's investments.  
These changes may happen separately from and in response to events that do not  
otherwise affect the value of the security in the issuer's home country. These  
risks may be intensified for the Technology Portfolio's investments in emerging 
market countries. These countries may be more likely to experience political    
turmoil or rapid changes in economic conditions than more developed countries,  
and the financial condition of issuers in emerging market countries may be more 
precarious than in other countries. MSDW Investment Management may invest in    
certain instruments, such as derivatives, and may use certain techniques, such  
as hedging, to manage these risks. However, MSDW Investment Management cannot   
guarantee that it will be practical to hedge these risks in certain markets or  
under particular conditions or that it will succeed in doing so.                

DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its cash or liquid securities to cover its obligations under those    
instruments. At certain levels, this can cause the Portfolio to lose flexibility
in managing its investments properly, responding to shareholder redemption      
requests, or meeting other obligations. If a Portfolio is in that position, it  
could be forced to sell other securities that it wanted to retain.              

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A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
has considerable leeway in deciding which investments it buys, holds or sells on
a day-to-day basis, and which trading stategies it uses. For example, MSDW      
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, each Portfolio may invest without limit in certain
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect a Portfolio's performance and   
the Portfolio may not achieve its investment objective.                         

PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders. The Equity Growth,
Focus Equity, Small Company Growth and Technology Portfolios may engage in      
frequent trading of securities to achieve their investment objectives.          

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--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                         EQUITY         FOCUS         SMALL COMPANY        VALUE                    
                         GROWTH         EQUITY           GROWTH           EQUITY        TECHNOLOGY  
                        PORTFOLIO     PORTFOLIO         PORTFOLIO        PORTFOLIO      PORTFOLIO   
                                                                                                    
MANAGEMENT FEES                                                                                     
----------------------------------------------------------------------------------------------------
 CLASS A                  0.60%         0.80%             1.00%            0.50%          1.00%     
----------------------------------------------------------------------------------------------------
 CLASS B                  0.60%         0.80%             1.00%            0.50%          1.00%     
12b-1 FEE                                                                                           
----------------------------------------------------------------------------------------------------
 CLASS A                  NONE           NONE             NONE             NONE            NONE     
----------------------------------------------------------------------------------------------------
 CLASS B                  0.25%         0.25%             0.25%            0.25%          0.25%     
OTHER EXPENSES                                                                                      
----------------------------------------------------------------------------------------------------
 CLASS A                  0.20%         0.27%             0.43%            0.36%          0.28%     
----------------------------------------------------------------------------------------------------
 CLASS B                  0.20%         0.27%             0.41%            0.36%          0.28%     
TOTAL ANNUAL FUND OPERATING                                                                         
EXPENSES                                                                                            
----------------------------------------------------------------------------------------------------
 CLASS A                  0.80%         1.07%             1.43%            0.86%          1.28%     
----------------------------------------------------------------------------------------------------
 CLASS B                  1.05%         1.32%             1.66%            1.11%          1.53%     

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE HIGHEST
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIO, SO THAT TOTAL ANNUAL OPERATING EXPENSES WILL NOT EXCEED
0.80% FOR CLASS A SHARES AND 1.05% FOR CLASS B SHARES OF THE EQUITY GROWTH      
PORTFOLIO; 1.00% FOR CLASS A SHARES AND 1.25% FOR CLASS B SHARES OF THE FOCUS   
EQUITY PORTFOLIO; 1.25% FOR CLASS A SHARES AND 1.50% FOR CLASS B SHARES OF THE  
SMALL COMPANY GROWTH AND TECHNOLOGY PORTFOLIOS; AND 0.70% FOR CLASS A SHARES AND
0.95% FOR CLASS B SHARES OF THE VALUE EQUITY PORTFOLIO.                         

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR A PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED       
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIOS SHOWN ABOVE.             

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE  
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS WERE 1.25% FOR CLASS A SHARES AND
1.50% FOR CLASS B SHARES OF THE SMALL COMPANY GROWTH PORTFOLIO. THE TOTAL       
OPERATING EXPENSES INCURRED BY INVESTORS, INCLUDING CERTAIN INVESTMENT RELATED  
EXPENSES, WERE 1.01% FOR CLASS A SHARES AND 1.26% FOR CLASS B SHARES OF THE     
FOCUS EQUITY PORTFOLIO, 0.73% FOR CLASS A SHARES AND 0.98% FOR CLASS B SHARES OF
THE VALUE EQUITY PORTFOLIO AND 1.26% FOR CLASS A SHARES AND 1.51% FOR CLASS B   
SHARES OF THE TECHNOLOGY PORTFOLIO. EXCLUDING INVESTMENT RELATED EXPENSES, THE  
OPERATING EXPENSES AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS WERE 1.00%   
FOR CLASS A SHARES AND 1.25% FOR CLASS B SHARES OF THE FOCUS EQUITY PORTFOLIO;  
0.70% FOR CLASS A SHARES AND 0.95% FOR CLASS B SHARES OF THE VALUE EQUITY       
PORTFOLIO; AND 1.25% FOR CLASS A SHARES AND 1.50% FOR CLASS B SHARES OF THE     
TECHNOLOGY PORTFOLIO. TOTAL OPERATING EXPENSES FOR THE EQUITY GROWTH PORTFOLIO  
DID NOT EXCEED THE AMOUNTS SHOWN IN THE FIRST PARAGRAPH AND, ACCORDINGLY, TOTAL 
OPERATING EXPENSES INCURRED BY INVESTORS IN THE PORTFOLIO WERE SHOWN IN THE     
TABLE ABOVE.                                                                    

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
------------------------------------------------------------                    

The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                               1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                             
EQUITY GROWTH PORTFOLIO                                                                      
---------------------------------------------------------------------------------------------
 CLASS A                        $82              $255              $444               $990   
---------------------------------------------------------------------------------------------
 CLASS B                        $107             $334              $579              $1,283  

FOCUS EQUITY PORTFOLIO                                                                       
---------------------------------------------------------------------------------------------
 CLASS A                        $109             $340              $590              $1,306  
---------------------------------------------------------------------------------------------
 CLASS B                        $134             $418              $723              $1,590  

SMALL COMPANY GROWTH PORTFOLIO                                                               
---------------------------------------------------------------------------------------------
 CLASS A                        $146             $452              $782              $1,713  
---------------------------------------------------------------------------------------------
 CLASS B                        $169             $523              $902              $1,965  

VALUE EQUITY PORTFOLIO                                                                       
---------------------------------------------------------------------------------------------
 CLASS A                        $88              $274              $477              $1,061  
---------------------------------------------------------------------------------------------
 CLASS B                        $113             $353              $612              $1,352  

TECHNOLOGY PORTFOLIO                                                                         
---------------------------------------------------------------------------------------------
 CLASS A                        $130             $406              $702              $1,545  
---------------------------------------------------------------------------------------------
 CLASS B                        $156             $483              $834              $1,824  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
----------------------------------------------------------------                

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies, managed assets of approximately       
$184.8 billion, including assets under fiduciary advice.                        

----------------------------------------------------------------                
MANAGEMENT FEES                                                                 
----------------------------------------------------------------                

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                                                         SMALL                                                   
                            EQUITY                 FOCUS                COMPANY                                                  
                            GROWTH                EQUITY                GROWTH             VALUE EQUITY           TECHNOLOGY     
                           PORTFOLIO             PORTFOLIO             PORTFOLIO             PORTFOLIO             PORTFOLIO     
                                                                                                                                 
                               -----------------------------------------------------------------------------------------         
                      CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B 
                      -----------------------------------------------------------------------------------------------------------
MANAGEMENT FEE PAID                                                                                                              
IN FISCAL YEAR ENDED                                                                                                             
DECEMBER 31, 1999      0.60%      0.60%      0.74%      0.74%      0.82%      0.82%      0.37%      0.37%      0.98%      0.98%  
(NET OF WAIVERS AND                                                                                                              
AS A PERCENTAGE OF                                                                                                               
AVERAGE NET ASSETS)                                                                                                              

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PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUALS HAVE PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT          
RESPONSIBILITY FOR THE PORTFOLIOS:                                              

EQUITY GROWTH PORTFOLIO                                                         

PHILIP W. FRIEDMAN AND WILLIAM S. AUSLANDER                                     

Philip W. Friedman is a Managing Director of MSDW Investment Management and     
Morgan Stanley. Currently, he is head of the Institutional Equity Group of MSDW 
Investment Management. In addition to portfolio management, his equity research 
responsibilities include capital goods, consumer durables, multi-industry and   
transportation. Prior to joining MSDW Investment Management in 1997, he was the 
North American Director of Equity Research at Morgan Stanley from 1995 to 1997. 
From 1990 to 1995, he was a member of Morgan Stanley's Equity Research team. Mr.
Friedman graduated from Rutgers University with a B.A. (PHI BETA KAPPA AND SUMMA
CUM LAUDE) in Economics. He also holds a Masters of Management degree from the  
J.L. Kellogg School of Management at Northwestern University. William S.        
Auslander, a Principal of MSDW Investment Management and Morgan Stanley, joined 
MSDW Investment Management in 1995 as an equity analyst in the Institutional    
Equity Group. Currently, he is a Portfolio Manager in the Institutional Equity  
Group. Prior to joining MSDW Investment Management, he worked at Icahn & Co. for
nine years as an equity analyst. Mr. Auslander graduated from the University of 
Wisconsin at Madison with a B.A. in Economics and received an M.B.A. from       
Columbia University. Messrs. Friedman and Auslander have shared primary         
responsibility for managing the Portfolio's assets since September 1998.        

FOCUS EQUITY PORTFOLIO                                                          
PHILIP W. FRIEDMAN AND WILLIAM S. AUSLANDER                                     
Information about Philip W. Friedman and William S. Auslander is included under 
the Equity Growth Portfolio above. Messrs. Friedman and Auslander have shared   
primary responsibility for managing the Portfolio's assets since September 1998.

SMALL COMPANY GROWTH PORTFOLIO                                                  
ALEXANDER L. UMANSKY AND DENNIS P. LYNCH                                        

Alexander L. Umansky, a Vice President of MSDW Investment Management and Morgan 
Stanley, joined MSDW Investment Management in 1994 as a Compliance Analyst.     
Currently, he is a Portfolio Manager in the Institutional Equity Group. In 1996,
he became a research analyst in the Institutional Equity Group focusing         
primarily on technology. Prior to joining MSDW Investment Management, he was a  
financial analyst in Morgan Stanley's Global Risk Management department. Mr.    
Umansky graduated from New York University's Stern School of Business with a    
B.S. in Computer Science and Finance. Dennis P. Lynch, a Vice President of MSDW 
Investment Management and Morgan Stanley, joined MSDW Investment Management in  
1998 as a Research Analyst. Currently, he is a Portfolio Manager in the         
Institutional Equity Group. Prior to joining MSDW Investment Management, he     
worked as a research analyst for JP Morgan Securities from 1994 to 1996. Mr.    
Lynch earned a B.A. from Hamilton College in 1993 and an M.B.A. with honors from
Columbia University in 1998. Messrs. Umansky and Lynch have shared primary      
responsibility for managing the Portfolio's assets since January 1999.          

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VALUE EQUITY PORTFOLIO                                                          
STEPHEN C. SEXAUER                                                              

Stephen C. Sexauer, a Principal of MSDW Investment Management and Morgan        
Stanley, joined MSDW Investment Management in 1989. Currently, he is a Portfolio
Manager in the Institutional Equity Group of MSDW Investment Management. In     
addition to portfolio management, his equity research responsibilities include  
telecommunications, technology, finance and utilities. Prior to joining MSDW    
Investment Management, he worked as Vice President at Salomon Brothers for three
years. Previous to that, he was with Merrill Lynch Economics and Wharton        
Econometrics. Mr. Sexauer received a B.S. in Economics from the University of   
Illinois and an M.B.A. in Economics and Statistics from the University of       
Chicago. Mr. Sexauer has had primary responsibility for managing the Portfolio's
assets since January 1992.                                                      

TECHNOLOGY PORTFOLIO                                                            
ALEXANDER L. UMANSKY AND STEPHEN C. SEXAUER                                     
Information about Alexander L. Umansky is included under the Small Company      
Growth Portfolio above. Information about Stephen C. Sexauer is included under  
the Value Equity Portfolio above. Messrs. Umansky and Sexauer have had primary  
responsibility for managing the Portfolio's assets since September 1998 and     
January 1998, respectively.                                                     

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of a Portfolio is    
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        

PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolios as of the close of the New York Stock     
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

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HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of each Portfolio, except that the minimum initial  
investment is $250,000 for Class A shares and $50,000 for Class B shares of the 
Technology Portfolio. The minimum additional investment generally is $1,000 for 
each account that you have. If the value of your account falls below the minimum
initial investment amount for Class A shares or Class B shares as a result of   
share redemptions, the Fund will notify you. Your account may be subject to     
involuntary conversion from Class A shares to Class B shares or involuntary     
redemption in the case of Class B shares if the value of your account remains   
below the minimum initial investment amount for 60 consecutive days. MSDW       
Investment Management may waive the minimum initial investment and involuntary  
conversion or redemption features for certain investors, including individuals  
purchasing through a Financial Intermediary.                                    

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            

HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, a Portfolio may pay redemption proceeds by a distribution-in-kind 
of readily marketable portfolio securities.                                     

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EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
                                       Gold Portfolio+                          
FIXED INCOME                           International Equity Portfolio*          
Emerging Markets Debt Portfolio        International Magnum Portfolio           
Fixed Income Portfolio                 International Small Cap Portfolio        
Global Fixed Income Portfolio          Japanese Equity Portfolio                
High Yield Portfolio                   Latin American Portfolio                 
Mortgage-Backed Securities Portfolio+                                           
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

DIVIDENDS AND DISTRIBUTIONS                                                     

It is the policy of each of the Equity Growth, Focus Equity and Value Equity    
Portfolios to distribute to shareholders substantially all of its taxable net   
investment income in the form of a quarterly dividend. It is the policy of each 
of the Small Company Growth and Technology Portfolios to distribute to          
shareholders substantially all of its taxable net investment income in the form 
of an annual dividend. Each Portfolio's policy is to distribute to shareholders 
net capital gains, if any, at least annually.                                   

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           
TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. The Fund will tell you        
annually how to treat dividends and distributions.                              

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If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
EQUITY GROWTH PORTFOLIO                                                         
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                           CLASS A                          
                                                   -------------------------------------------------------- 
                                                                   YEAR ENDED DECEMBER 31,                  
                                                   -------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                   1999        1998        1997        1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD               $  19.04    $  16.93    $  14.94    $  14.14    $  12.02 
                                                   --------    --------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (LOSS) (1)                     (0.02)       0.04        0.06        0.17        0.22 
 NET REALIZED AND UNREALIZED GAIN ON                                                                        
   INVESTMENTS                                         7.49        3.17        4.48        4.07        4.93 
                                                   --------    --------    --------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                   7.47        3.21        4.54        4.24        5.15 
                                                   --------    --------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                   --       (0.03)      (0.06)      (0.17)      (0.28)
 IN EXCESS OF NET INVESTMENT INCOME                   (0.00)+        --       (0.00)+        --          -- 
 NET REALIZED GAIN                                    (1.47)      (0.64)      (2.49)      (3.27)      (2.75)
 IN EXCESS OF NET REALIZED GAIN                          --       (0.43)         --          --          -- 
                                                   --------    --------    --------    --------    -------- 
    TOTAL DISTRIBUTIONS                               (1.47)      (1.10)      (2.55)      (3.44)      (3.03)
                                                   --------    --------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                     $  25.04    $  19.04    $  16.93    $  14.94    $  14.14 
                                                   ========    ========    ========    ========    ======== 
TOTAL RETURN                                          39.89%      19.04%      31.32%      30.97%      45.02%
                                                   ========    ========    ========    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)              $977,005    $784,565    $591,789    $352,703    $158,112 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)            0.80%       0.80%       0.80%       0.80%       0.80%
RATIO OF NET INVESTMENT INCOME (LOSS) TO                                                                    
  AVERAGE NET ASSETS (1)                              (0.10)%      0.22%       0.35%       1.12%       1.57%
PORTFOLIO TURNOVER RATE                                  91%        156%        177%        186%        186%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
   DURING THE PERIOD:                                                                                       
     PER SHARE BENEFIT TO NET INVESTMENT INCOME       $0.00+      $0.00+      $0.00+      $0.01       $0.01 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                    0.80%       0.80%       0.82%       0.88%       0.88%
     NET INVESTMENT INCOME (LOSS) TO AVERAGE                                                                
       NET ASSETS                                     (0.10)%      0.22%       0.33%       1.04%       1.49%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                 CLASS B                    
                                                             -----------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                YEAR ENDED DECEMBER 31,         1996*** TO  
                                                             ------------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                             1999       1998       1997          1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                         $  18.97    $ 16.91    $ 14.92       $14.22    
                                                             --------    -------    -------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (LOSS) (2)                               (0.04)      0.00+      0.04         0.13    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                 7.44       3.15       4.46         3.99    
                                                             --------    -------    -------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                             7.40       3.15       4.50         4.12    
                                                             --------    -------    -------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                             --      (0.02)     (0.02)       (0.15)   
 IN EXCESS OF NET INVESTMENT INCOME                             (0.00)+       --         --           --    
 NET REALIZED GAIN                                              (1.47)     (0.64)     (2.49)       (3.27)   
 IN EXCESS OF NET REALIZED GAIN                                    --      (0.43)        --           --    
                                                             --------    -------    -------       ------    
    TOTAL DISTRIBUTIONS                                         (1.47)     (1.09)     (2.51)       (3.42)   
                                                             --------    -------    -------       ------    
NET ASSET VALUE, END OF PERIOD                               $  24.90    $ 18.97    $ 16.91       $14.92    
                                                             ========    =======    =======       ======    
TOTAL RETURN                                                    39.61%     18.71%     31.05%       29.92%   
                                                             ========    =======    =======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                        $246,889    $83,330    $27,879       $5,498    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                      1.05%      1.05%      1.05%        1.05%** 
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET                                                        
  ASSETS (2)                                                    (0.34)%    (0.02)%     0.10%        0.91%** 
PORTFOLIO TURNOVER RATE                                            91%       156%       177%         186%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                 $0.00+     $0.00+     $0.01        $0.01    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                              1.05%      1.05%      1.07%        1.12%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS         (0.34)%    (0.02)%     0.08%        0.84%** 
------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            

------------------------------------------------------------------------------- 
FOCUS EQUITY PORTFOLIO                                                          
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                          CLASS A                           
                                                ------------------------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                 MARCH 8,   
                                                          YEAR ENDED DECEMBER 31,                1995* TO   
                                                -------------------------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                1999        1998        1997       1996          1995     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD            $  17.50    $  15.78    $  14.43    $ 12.17       $ 10.00   
                                                --------    --------    --------    -------       -------   
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (LOSS) (1)                  (0.06)       0.00+       0.01       0.18          0.15   
 NET REALIZED AND UNREALIZED GAIN ON                                                                        
   INVESTMENTS                                      7.89        2.42        4.58       4.73          3.95   
                                                --------    --------    --------    -------       -------   
    TOTAL FROM INVESTMENT OPERATIONS                7.83        2.42        4.59       4.91          4.10   
                                                --------    --------    --------    -------       -------   
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                --          --       (0.01)     (0.17)        (0.15)  
 IN EXCESS OF NET INVESTMENT INCOME                   --          --       (0.00)+       --            --   
 NET REALIZED GAIN                                 (5.63)      (0.38)      (3.23)     (2.48)        (1.78)  
 IN EXCESS OF NET REALIZED GAIN                       --       (0.32)         --         --            --   
                                                --------    --------    --------    -------       -------   
    TOTAL DISTRIBUTIONS                            (5.63)      (0.70)      (3.24)     (2.65)        (1.93)  
                                                --------    --------    --------    -------       -------   
NET ASSET VALUE, END OF PERIOD                  $  19.70    $  17.50    $  15.78    $ 14.43       $ 12.17   
                                                ========    ========    ========    =======       =======   
TOTAL RETURN                                       46.44%      15.35%      33.31%     40.90%        41.25%  
                                                ========    ========    ========    =======       =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)           $136,128    $130,734    $155,087    $68,480       $28,548   
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)         1.01%       1.01%       1.02%      1.00%         1.00%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                                     
  EXCLUDING INTEREST EXPENSE                        1.00%       1.00%       1.00%       N/A           N/A   
RATIO OF NET INVESTMENT INCOME TO AVERAGE                                                                   
  NET ASSETS (1)                                   (0.33)%      0.01%       0.08%      1.26%         1.64%**
PORTFOLIO TURNOVER RATE                              155%        373%        302%       380%          309%  
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
   DURING THE PERIOD:                                                                                       
     PER SHARE BENEFIT TO NET INVESTMENT                                                                    
     INCOME                                        $0.01       $0.01       $0.01      $0.03         $0.06   
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                 1.07%       1.03%       1.08%      1.24%         1.59%**
     NET INVESTMENT INCOME (LOSS) TO                                                                        
         AVERAGE NET ASSETS                        (0.39)%     (0.01)%      0.02%      1.02%         1.05%**
------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                 CLASS B                    
                                                              ----------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,        1996*** TO  
                                                              -----------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                             1999       1998       1997          1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                          $ 17.40    $ 15.72    $ 14.42       $12.25    
                                                              -------    -------    -------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (LOSS) (2)                               (0.08)     (0.06)     (0.01)        0.13    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                 7.81       2.44       4.55         4.67    
                                                              -------    -------    -------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                             7.73       2.38       4.54         4.80    
                                                              -------    -------    -------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                             --         --      (0.01)       (0.15)   
 IN EXCESS OF NET INVESTMENT INCOME                                --         --      (0.00)+         --    
 NET REALIZED GAIN                                              (5.63)     (0.38)     (3.23)       (2.48)   
 IN EXCESS OF NET REALIZED GAIN                                    --      (0.32)        --           --    
                                                              -------    -------    -------       ------    
    TOTAL DISTRIBUTIONS                                         (5.63)     (0.70)     (3.24)       (2.63)   
                                                              -------    -------    -------       ------    
NET ASSET VALUE, END OF PERIOD                                $ 19.50    $ 17.40    $ 15.72       $14.42    
                                                              =======    =======    =======       ======    
TOTAL RETURN                                                    46.13%     15.15%     32.90%       39.72%   
                                                              =======    =======    =======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                         $22,168    $16,682    $18,277       $8,805    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                      1.26%      1.26%      1.27%        1.25%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                           
  INTEREST EXPENSE                                               1.25%      1.25%      1.25%         N/A    
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET                                                        
    ASSETS (2)                                                  (0.58)%    (0.26)%    (0.18)%       0.95%** 
PORTFOLIO TURNOVER RATE                                           155%       373%       302%         380%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                 $0.01      $0.00+     $0.00+       $0.03    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                              1.32%      1.28%      1.33%        1.47%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS         (0.64)%    (0.28)%    (0.24)%       0.73%** 
------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                 
**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            

--------------------------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO                                                  
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                             CLASS A                         
                                                      -----------------------------------------------------  
                                                                     YEAR ENDED DECEMBER 31,                 
                                                      -----------------------------------------------------  
SELECTED PER SHARE DATA AND RATIOS                     1999       1998       1997        1996        1995    
                                                                                                             
-----------------------------------------------------------------------------------------------------------  
NET ASSET VALUE, BEGINNING OF PERIOD                  $  8.07    $  7.72    $ 13.50    $  21.49    $  16.12  
                                                      -------    -------    -------    --------    --------  
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME (LOSS) (1)                       (0.05)      0.09      (0.07)      (0.19)      (0.18) 
 NET REALIZED AND UNREALIZED GAIN ON                                                                         
   INVESTMENTS                                           7.40       1.97       1.09        0.89        5.55  
                                                      -------    -------    -------    --------    --------  
    TOTAL FROM INVESTMENT OPERATIONS                     7.35       2.06       1.02        0.70        5.37  
                                                      -------    -------    -------    --------    --------  
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                                     --      (0.09)        --          --          --  
 NET REALIZED GAIN                                      (2.10)     (1.62)     (6.80)      (8.69)         --  
                                                      -------    -------    -------    --------    --------  
    TOTAL DISTRIBUTIONS                                 (2.10)     (1.71)     (6.80)      (8.69)         --  
                                                      -------    -------    -------    --------    --------  
NET ASSET VALUE, END OF PERIOD                        $ 13.32    $  8.07    $  7.72    $  13.50    $  21.49  
                                                      =======    =======    =======    ========    ========  
TOTAL RETURN                                            96.45%     27.54%     11.36%       3.72%      33.31% 
                                                      =======    =======    =======    ========    ========  
RATIOS AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)                 $77,193    $73,276    $57,777     $62,793    $119,378  
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)              1.25%      1.25%      1.25%       1.25%       1.25% 
RATIO OF NET INVESTMENT INCOME TO AVERAGE                                                                    
  NET ASSETS (1)                                        (0.59)%     1.06%     (0.87)%     (0.88)%     (0.76)%
PORTFOLIO TURNOVER RATE                                   204%       331%       228%         33%         25% 
-----------------                                                                                            
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                            
   THE PERIOD:                                                                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME         $0.01      $0.01      $0.01       $0.01      $0.003  
   RATIOS BEFORE EXPENSE LIMITATION:                                                                         
     EXPENSES TO AVERAGE NET ASSETS                      1.43%      1.35%      1.34%       1.30%       1.26% 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET                                                             
       ASSETS                                           (0.78)%     0.96%     (0.95)%     (0.92)%     (0.77)%
-----------------------------------------------------------------------------------------------------------  

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                   
                                                                --------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                  YEAR ENDED DECEMBER 31,       1996*** TO  
                                                                ---------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999       1998      1997         1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $  7.93    $ 7.63    $13.45       $21.47    
                                                                -------    ------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (LOSS) (2)                                 (0.08)     0.09     (0.06)       (0.15)   
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                   7.26      1.90      1.04         0.82    
                                                                -------    ------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                               7.18      1.99      0.98         0.67    
                                                                -------    ------    ------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                               --     (0.07)       --           --    
 NET REALIZED GAIN                                                (2.10)    (1.62)    (6.80)       (8.69)   
                                                                -------    ------    ------       ------    
    TOTAL DISTRIBUTIONS                                           (2.10)    (1.69)    (6.80)       (8.69)   
                                                                -------    ------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                  $ 13.01    $ 7.93    $ 7.63       $13.45    
                                                                =======    ======    ======       ======    
TOTAL RETURN                                                      95.97%    26.86%    11.13%        3.58%   
                                                                =======    ======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                           $14,775    $1,282    $1,313       $3,997    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                        1.50%     1.50%     1.50%        1.50%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          (0.87)%    0.88%    (1.12)%      (1.09)%**
PORTFOLIO TURNOVER RATE                                             204%      331%      228%          33%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                   $0.02     $0.01    $0.00+        $0.01    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                                1.66%     1.60%     1.58%        1.54%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS           (1.03)%    0.78%    (1.21)%      (1.14)%**
------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            

--------------------------------------------------------------------------------
VALUE EQUITY PORTFOLIO                                                          
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                            CLASS A                         
                                                     ------------------------------------------------------ 
                                                                    YEAR ENDED DECEMBER 31,                 
                                                     ------------------------------------------------------ 
SELECTED PER SHARE DATA AND RATIOS                    1999       1998        1997        1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD                 $ 10.78    $ 13.62    $  13.89    $  13.94    $  11.50 
                                                     -------    -------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                              0.26       0.20        0.35        0.41        0.38 
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS        0.97       0.98        3.51        2.27        3.30 
                                                     -------    -------    --------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                    1.23       1.18        3.86        2.68        3.68 
                                                     -------    -------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                 (0.17)     (0.21)      (0.35)      (0.41)      (0.47)
 NET REALIZED GAIN                                     (2.09)     (3.81)      (3.78)      (2.32)      (0.77)
 IN EXCESS OF NET REALIZED GAIN                        (0.12)        --          --          --          -- 
                                                     -------    -------    --------    --------    -------- 
    TOTAL DISTRIBUTIONS                                (2.38)     (4.02)      (4.13)      (2.73)      (1.24)
                                                     -------    -------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                       $  9.63    $ 10.78    $  13.62    $  13.89    $  13.94 
                                                     =======    =======    ========    ========    ======== 
TOTAL RETURN                                           11.63%      8.79%      29.20%      19.73%      33.69%
                                                     =======    =======    ========    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                $46,768    $57,543     $86,054    $106,128    $147,365 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)             0.73%      0.70%       0.70%       0.70%       0.70%
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                           
  INTEREST EXPENSE                                      0.70%       N/A         N/A         N/A         N/A 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
ASSETS (1)                                              1.25%      1.36%       2.15%       2.62%       3.01%
PORTFOLIO TURNOVER RATE                                   80%       153%         36%         42%         43%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                           
   THE PERIOD:                                                                                              
     PER SHARE BENEFIT TO NET INVESTMENT INCOME        $0.03      $0.02       $0.02       $0.01       $0.01 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                     0.86%      0.82%       0.80%       0.78%       0.77%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                   
         ASSETS                                         1.12%      1.25%       2.06%       2.55%       2.94%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                  
                                                                -------------------------------------------
                                                                                               PERIOD FROM 
                                                                                               JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,       1996*** TO  
                                                                --------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999      1998      1997         1996     
                                                                                                           
-----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $10.76    $13.59    $13.89       $14.06    
                                                                ------    ------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                          
 NET INVESTMENT INCOME (2)                                        0.20      0.07      0.28         0.29    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                  0.99      1.08      3.51         2.25    
                                                                ------    ------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              1.19      1.15      3.79         2.54    
                                                                ------    ------    ------       ------    
DISTRIBUTIONS                                                                                              
 NET INVESTMENT INCOME                                           (0.13)    (0.17)    (0.31)       (0.39)   
 NET REALIZED GAIN                                               (2.02)    (3.81)    (3.78)       (2.32)   
 IN EXCESS OF NET REALIZED GAIN                                  (0.20)       --        --           --    
                                                                ------    ------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (2.35)    (3.98)    (4.09)       (2.71)   
                                                                ------    ------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                  $ 9.60    $10.76    $13.59       $13.89    
                                                                ======    ======    ======       ======    
TOTAL RETURN                                                     11.22%     8.59%    28.70%       18.57%   
                                                                ======    ======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                              
NET ASSETS, END OF PERIOD (THOUSANDS)                            $ 921    $1,045    $2,246       $2,555    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       0.98%     0.95%     0.95%        0.95%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING INTEREST                                                 
  EXPENSE                                                         0.95%      N.A       N.A          N.A    
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          1.01%     1.12%     1.86%        2.33%** 
PORTFOLIO TURNOVER RATE                                             80%      153%       36%          42%   
-----------------                                                                                          
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                              
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.03     $0.02     $0.01        $0.01    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                       
     EXPENSES TO AVERAGE NET ASSETS                               1.11%     1.07%     1.04%        1.03%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  0.87%     1.01%     1.77%        2.26%** 
-----------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            

18                                                            

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
TECHNOLOGY PORTFOLIO                                                            
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                 CLASS A                    
                                                             -----------------------------------------------
                                                                                               PERIOD FROM  
                                                                                              SEPTEMBER 16, 
                                                                YEAR ENDED DECEMBER 31,          1996* TO   
                                                             -----------------------------     DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                            1999      1998++      1997           1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                         $ 17.98    $ 11.73    $ 10.71        $10.00    
                                                             -------    -------    -------        ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (LOSS) (1)                              (0.28)     (0.13)      0.07         (0.02)   
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS               28.07       6.45       3.75          0.73    
                                                             -------    -------    -------        ------    
    TOTAL FROM INVESTMENT OPERATIONS                           27.79       6.32       3.82          0.71    
                                                             -------    -------    -------        ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                            --         --      (0.26)           --    
 NET REALIZED GAIN                                             (6.86)     (0.07)     (1.28)           --    
 IN EXCESS OF NET REALIZED GAIN                                   --         --      (1.00)           --    
 RETURN OF CAPITAL                                                --         --      (0.26)           --    
                                                             -------    -------    -------        ------    
    TOTAL DISTRIBUTIONS                                        (6.86)     (0.07)     (2.80)           --    
                                                             -------    -------    -------        ------    
NET ASSET VALUE, END OF PERIOD                               $ 38.91    $ 17.98    $ 11.73        $10.71    
                                                             =======    =======    =======        ======    
TOTAL RETURN                                                  160.62%     53.90%     37.27%         7.10%   
                                                             =======    =======    =======        ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                        $82,190    $27,506    $31,788        $3,595    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)                     1.26%      1.29%      1.25%         1.25%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                           
  INTEREST EXPENSE                                              1.25%      1.25%       N/A           N/A    
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (1)         (1.06)%    (0.95)%    (1.07)%       (0.70)%**
PORTFOLIO TURNOVER RATE                                          250%       265%       622%           77%   
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                           
   THE PERIOD:                                                                                              
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                $0.00+     $0.07      $0.08         $0.22    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                             1.28%      1.82%      2.47%         8.51%** 
     NET INVESTMENT LOSS TO AVERAGE NET ASSETS                 (1.09)%    (1.47)%    (2.30)%       (7.96)%**
------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                   CLASS B                    
                                                                ----------------------------------------------
                                                                                                 PERIOD FROM  
                                                                                                 SEPTEMBER 16 
                                                                  YEAR ENDED DECEMBER 31,          1996* TO   
                                                                ----------------------------     DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999      1998++      1997          1996     
                                                                                                              
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $17.92     $11.72     $10.71        $10.00    
                                                                ------     ------     ------        ------    
INCOME FROM INVESTMENT OPERATIONS                                                                             
 NET INVESTMENT INCOME (LOSS) (2)                                (0.35)     (0.16)      0.04         (0.02)   
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                 27.98       6.43       3.74          0.73    
                                                                ------     ------     ------        ------    
    TOTAL FROM INVESTMENT OPERATIONS                             27.63       6.27       3.78          0.71    
                                                                ------     ------     ------        ------    
DISTRIBUTIONS                                                                                                 
 NET INVESTMENT INCOME                                              --         --      (0.25)           --    
 NET REALIZED GAIN                                               (6.86)     (0.07)     (1.28)           --    
 IN EXCESS OF NET REALIZED GAIN                                     --         --      (1.00)           --    
 RETURN OF CAPITAL                                                  --         --      (0.24)           --    
                                                                ------     ------     ------        ------    
    TOTAL DISTRIBUTIONS                                          (6.86)     (0.07)     (2.77)           --    
                                                                ------     ------     ------        ------    
NET ASSET VALUE, END OF PERIOD                                  $38.69     $17.92     $11.72        $10.71    
                                                                ======     ======     ======        ======    
TOTAL RETURN                                                    160.26%     53.52%     36.90%         7.10%   
                                                                ======     ======     ======        ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                 
NET ASSETS, END OF PERIOD (THOUSANDS)                           $4,192     $  850     $2,394        $1,487    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       1.51%      1.55%      1.50%         1.50%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING INTEREST                                                    
  EXPENSE                                                         1.50%      1.50%       N/A           N/A    
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (2)           (1.31)%    (1.32)%    (1.41)%       (1.00)%**
PORTFOLIO TURNOVER RATE                                            250%       265%       622%           77%   
-----------------                                                                                             
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                                 
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.00+     $0.07      $0.04         $0.19    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                          
     EXPENSES TO AVERAGE NET ASSETS                               1.53%      2.08%      2.72%         9.14%** 
     NET INVESTMENT LOSS TO AVERAGE NET ASSETS                   (1.32)%    (1.84)%    (2.63)%       (8.65)%**
--------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                 
**ANNUALIZED                                                                  

+AMOUNT IS LESS THAN $0.01 PER SHARE.                                       

 ++PER SHARE AMOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 ARE BASED ON
AVERAGE SHARES OUTSTANDING.                                               

19                                                            

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                                                                [Download Table]
                                                                            
                                                     EQUITY GROWTH PORTFOLIO
                                                     FOCUS EQUITY PORTFOLIO 
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER      SMALL COMPANY GROWTH   
INSTITUTIONAL FUND, INC.                             PORTFOLIO              
                                                     VALUE EQUITY PORTFOLIO 
                                                     TECHNOLOGY PORTFOLIO   

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

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

Type of Registration: / / Incorporated / / Unincorporated Association       
/ / Partnership / / Uniform Gift/Transfer to Minor                              
(ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                
/ / Trust -------------------- / / Other (SPECIFY) --------------------         

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                           HOME TELEPHONE NUMBER       BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                     CITY             COUNTRY            POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                     CITY             COUNTRY            POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                      Class A shares minimum $500,000 for each Portfolio
                          ($250,000 for Technology Portfolio) and Class B shares
                    minimum $100,000 for each Portfolio ($50,000 for
Technology Portfolio).      
                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                                     
       EQUITY GROWTH PORTFOLIO  / / Class A Shares (058)  $---------  / / Class B Shares (036) $ --------------------
        FOCUS EQUITY PORTFOLIO  / / Class A Shares (084)  $---------  / / Class B Shares (088) $ --------------------
SMALL COMPANY GROWTH PORTFOLIO  / / Class A Shares (062)  $---------  / / Class B Shares (037) $ --------------------
        VALUE EQUITY PORTFOLIO  / / Class A Shares (064)  $---------  / / Class B Shares (039) $ --------------------
          TECHNOLOGY PORTFOLIO  / / Class A Shares (091)  $---------  / / Class B Shares (092) $ --------------------
                                Total Initial Investment  $---------                                                 

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
   NAME OF PORTFOLIO
                    ------------------------------------------
ACCOUNT NUMBER      

      Account previously established by:

  / / Phone exchange / / Wire on
           ---------------------------------------
          DATE
                      --------------------------------------------------
        ACCOUNT NUMBER
                                               (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                               
/ /  I/we hereby authorize the Fund and its agents to honor                                                    
     any telephone requests to wire redemption proceeds to                                                     
     the commercial bank indicated at right and/or mail                                                        
     redemption proceeds to the name and address in which                                                      
     my/our fund account is registered if such requests are   ------------------------                         
     believed to be authentic.                                NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)       
     The Fund and the Fund's Transfer Agent will employ       ------------------------                         
     reasonable procedures to confirm that instructions       BANK ACCOUNT NUMBER                              
     communicated by telephone are genuine. These procedures  ------------------------                         
     include requiring the investor to provide certain        BANK ABA NUMBER                                  
     personal identification information at the time an       ------------------------                         
     account is opened and prior to effecting each            NAME(S) IN WHICH YOUR BANK ACCOUNT IS ESTABLISHED
     transaction requested by telephone. In addition, all     ------------------------                         
     telephone transaction requests will be recorded and      BANK'S STREET ADDRESS                            
     investors may be required to provide additional          ------------------------                         
     telecopied written instructions of transaction           CITY STATE ZIP CODE                              
     requests. Neither the Fund nor the Transfer Agent will                                                    
     be responsible for any loss, liability, cost or expense                                                   
     for following instructions received by telephone that                                                     
     it reasonably believes to be genuine.                                                                     

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                     CITY                       STATE       ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     
U.S. CITIZEN(S)/TAXPAYER(S):
                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.
SIGN HERE -->                                 
           ---------------------------------------
SIGNATURE     DATE          
           ---------------------------------------
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at             
"http://www.sec.gov"; or (3) By mail: you may request documents, upon payment of
a duplicating fee, by writing to Securities and Exchange Commission, Public     
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

FIXED INCOME PORTFOLIO                                                          

THE FIXED INCOME PORTFOLIO SEEKS TO PRODUCE A HIGH TOTAL RETURN CONSISTENT WITH 
THE PRESERVATION OF CAPITAL BY INVESTING PRIMARILY IN A DIVERSIFIED PORTFOLIO OF
FIXED INCOME SECURITIES.                                                        

MONEY MARKET PORTFOLIO                                                          
THE MONEY MARKET PORTFOLIO SEEKS TO MAXIMIZE CURRENT INCOME AND PRESERVE CAPITAL
WHILE MAINTAINING HIGH LEVELS OF LIQUIDITY.                                     

MUNICIPAL MONEY MARKET PORTFOLIO                                                
THE MUNICIPAL MONEY MARKET PORTFOLIO SEEKS TO MAXIMIZE CURRENT TAX-EXEMPT INCOME
AND PRESERVE CAPITAL.                                                           

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           
DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"), 
EXCEPT THAT THE MUNICIPAL MONEY MARKET PORTFOLIO OFFERS ONLY CLASS A SHARES.    

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     FIXED INCOME PORTFOLIO                                    1 
     MONEY MARKET PORTFOLIO                                    2 
     MUNICIPAL MONEY MARKET PORTFOLIO                          3 
     ADDITIONAL RISK FACTORS AND INFORMATION                   4 
FEES AND EXPENSES OF THE PORTFOLIOS                            6 
INVESTMENT ADVISER AND SUB-ADVISER                             7 
MANAGEMENT FEES                                                7 
PORTFOLIO MANAGERS                                             8 
DISTRIBUTION OF PORTFOLIO SHARES                               8 
SHAREHOLDER INFORMATION                                        9 
FINANCIAL HIGHLIGHTS                                           11
     FIXED INCOME PORTFOLIO                                    12
     MONEY MARKET PORTFOLIO                                    13
     MUNICIPAL MONEY MARKET PORTFOLIO                          13
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
FIXED INCOME PORTFOLIO                                                          
------------------------------------------------------------------------------- 

THE FIXED INCOME PORTFOLIO SEEKS TO PRODUCE A HIGH TOTAL RETURN CONSISTENT WITH 
THE PRESERVATION OF CAPITAL BY INVESTING PRIMARILY IN A DIVERSIFIED PORTFOLIO OF
FIXED INCOME SECURITIES.                                                        
--------------------------------------------------------------------------------

APPROACH                                                                        

MSDW Investment Management seeks to preserve capital and produce an attractive  
real rate of return by investing primarily in a diversified mix of              
dollar-denominated fixed income securities, particularly U.S. Government,       
corporate and mortgage securities. The Portfolio ordinarily maintains an average
weighted maturity in excess of five years. Although there is no minimum or      
maximum maturity for any individual security, MSDW Investment Management        
actively manages the interest rate risk of the Portfolio within a range relative
to the benchmark index. The Portfolio invests exclusively in securities that    
carry an investment grade rating at the time of purchase, and may invest up to  
15% of its assets in fixed income securities denominated in foreign currencies. 

PROCESS                                                                         

MSDW Investment Management employs a value approach toward managing the         
Portfolio. The MSDW Investment Management's research teams seek to identify     
relative attractiveness among corporate, mortgage and U.S. Government           
securities, and also may consider the relative attractiveness of non-dollar     
denominated issues. MSDW Investment Management relies upon value measures to    
guide its decisions regarding sector, security and country selection, such as   
the relative attractiveness of the extra yield offered by securities other than 
those issued by the U.S. Treasury. MSDW Investment Management also measures     
various types of risk, focusing on the level of real interest rates, the shape  
of the yield curve, credit risk, prepayment risk, country risk and currency     
valuations. MSDW Investment Management's team builds an investment portfolio    
designed to take advantage of its judgment of these factors, while balancing the
overall risk of the Portfolio, and may sell securities when it believes that    
expected risk-adjusted return is low compared to other investment opportunities.

RISK                                                                            
Investing in the Fixed Income Portfolio may be appropriate for you if you are   
willing to accept the risks and uncertainties of investing in fixed income      
securities in the hope of earning an attractive rate of return while generally  
preserving capital. Although the Portfolio invests primarily in fixed income    
securities that are rated in the two highest rating categories, or believed by  
MSDW Investment Management to be of equivalent quality, credit risk and market  
risk, particularly changes in interest rates, will still affect the prices of   
fixed income securities. To the extent that the Portfolio invests in securities 
denominated in a foreign currency, changes in the value of that country's       
currency compared to the U.S. dollar will affect the value of the Portfolio's   
investments. In addition, at times the Portfolio's market sector, U.S. fixed    
income securities, may underperform relative to other sectors.                  

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)          
                                      
COMMENCED OPERATIONS ON MAY           
15, 1991                              
1992                          6.82%   
1993                          9.07%   
1994                          -3.10%  
1995                          18.76%  
1996                          4.61%   
1997                          9.54%   
1998                          7.93%   
1999                          -1.56%  
HIGH (QUARTER)                        
4/95 - 6/95                           
6.30%                                 
LOW (QUARTER)                         
1/94 - 3/94                           
-3.13%                                

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                            CLASS A            CLASS B                           LEHMAN             
                           (COMMENCED         (COMMENCED                       AGGREGATE            
                         OPERATIONS ON      OPERATIONS ON                     BOND INDEX*           
                         MAY 15, 1991)     JANUARY 2, 1996)            CLASS A           CLASS B    
                                                                                                    
----------------------------------------------------------------------------------------------------
 PAST ONE YEAR               -1.56%             -1.76%                  -0.82%            -0.82%    
----------------------------------------------------------------------------------------------------
 PAST FIVE YEARS             7.65%               N/A                    7.73%              N/A      
----------------------------------------------------------------------------------------------------
 SINCE INCEPTION             7.24%              4.89%                   7.41%             5.21%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE LEHMAN AGGREGATE BOND INDEX IS AN UNMANAGED INDEX COMPRISED OF THE         
GOVERNMENT/CORPORATE BOND INDEX, THE MORTGAGE-BACKED SECURITIES INDEX AND THE 
ASSET-BACKED SECURITIES INDEX.                                                

1                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
MONEY MARKET PORTFOLIO                                                          
------------------------------------------------------------------------------- 

THE MONEY MARKET PORTFOLIO SEEKS TO MAXIMIZE CURRENT INCOME AND PRESERVE CAPITAL
WHILE MAINTAINING HIGH LEVELS OF LIQUIDITY.                                     
--------------------------------------------------------------------------------

APPROACH                                                                        

MSDW Investment Management and Morgan Stanley Dean Witter Advisors Inc. ("MSDW  
Advisors"), as investment sub-adviser, seek to maximize current income and      
preserve capital while maintaining liquidity by investing in money market       
instruments with effective maturities of 397 days or less. In selecting         
investments, MSDW Investment Management and MSDW Advisors seek to maintain a    
share price of $1.00 per share.                                                 

PROCESS                                                                         

MSDW Advisors assesses current and projected market and economic conditions,    
particularly interest rates. Based on this analysis and the shape of the money  
market yield curve, MSDW Advisors uses gradual shifts in average maturity to    
manage the Portfolio. MSDW Advisors selects particular money market securities  
that it believes offer the most attractive risk/return trade-off. Portfolio     
investments are primarily U.S. government and agency obligations, or corporate  
debt and bank obligations that pay fixed or variable rates of interest.         

RISK                                                                            
Investing in the Money Market Portfolio may be appropriate for you if you want  
to minimize the risk of loss of principal and maintain liquidity of your        
investment, and at the same time receive a return on your investment. The       
Portfolio invests only in money market instruments that MSDW Investment         
Management and MSDW Advisors believe present minimal credit risk. However, an   
investment in the Portfolio is not insured or guaranteed by the Federal Deposit 
Insurance Corporation or any other government agency. Although the Portfolio    
seeks to preserve the value of your investment at $1.00 per share, it is        
possible to lose money by investing in the Portfolio.                           
THE PORTFOLIO WILL INVEST IN A DIVERSIFIED PORTFOLIO OF HIGH QUALITY, SHORT-TERM
MONEY MARKET INSTRUMENTS. MONEY MARKET INSTRUMENTS MAY INCLUDE CERTIFICATES OF  
DEPOSITS, BANKERS' ACCEPTANCES, COMMERCIAL PAPER, U.S. TREASURY SECURITIES, AND 
SOME MUNICIPAL SECURITIES AND REPURCHASE AGREEMENTS. IN SELECTING THESE         
INVESTMENTS, MSDW INVESTMENT MANAGEMENT AND MSDW ADVISORS FOLLOW STRICT RULES   
ABOUT CREDIT RISK, MATURITY AND DIVERSIFICATION OF THE PORTFOLIO'S INVESTMENTS. 
FOR EXAMPLE, THE PORTFOLIO'S MONEY MARKET INSTRUMENTS WILL BE RATED WITHIN THE  
TWO HIGHEST CATEGORIES ASSIGNED BY A RECOGNIZED RATING ORGANIZATION OR, IF NOT  
RATED, ARE OF COMPARABLE QUALITY AS DETERMINED BY MSDW ADVISORS. IN ADDITION,   
THESE INSTRUMENTS WILL HAVE A MAXIMUM REMAINING MATURITY OF 397 DAYS OR LESS.   

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)       
                                   
COMMENCED OPERATIONS ON            
NOVEMBER 15, 1988                  
1989                          9.12%
1990                          8.03%
1991                          5.89%
1992                          3.46%
1993                          2.76%
1994                          3.84%
1995                          5.51%
1996                          5.03%
1997                          5.20%
1998                          5.20%
1999                          4.80%
HIGH (QUARTER)                     
4/89 - 6/89                        
2.34%                              
LOW (QUARTER)                      
4/93 - 6/93                        
0.67%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                                [Download Table]

                                                 CLASS A               CLASS B    
                                                (COMMENCED            (HAVE NOT   
                                              OPERATIONS ON         YET COMMENCED 
                                            NOVEMBER 15, 1988)       OPERATIONS)  
                                                                                  
----------------------------------------------------------------------------------
 SINCE INCEPTION                                  5.37%                  N/A      
----------------------------------------------------------------------------------
 PAST ONE YEAR                                    4.80%                  N/A      
----------------------------------------------------------------------------------
 PAST FIVE YEARS                                  5.15%                  N/A      
----------------------------------------------------------------------------------
 PAST TEN YEARS                                   5.03%                  N/A      

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. HOW THE PORTFOLIO HAS    
PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL      
PERFORM IN THE FUTURE.                                                          
YOU MAY OBTAIN THE CURRENT 7-DAY YIELD OF THE MONEY MARKET PORTFOLIO BY CALLING 
1-800-548-7786.                                                                 

2                                                             

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INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
MUNICIPAL MONEY MARKET PORTFOLIO                                                
------------------------------------------------------------------------------- 

THE MUNICIPAL MONEY MARKET PORTFOLIO SEEKS TO MAXIMIZE CURRENT TAX-EXEMPT INCOME
AND PRESERVE CAPITAL.                                                           
--------------------------------------------------------------------------------

APPROACH                                                                        

MSDW Investment Management and MSDW Advisors, as investment sub-adviser, seek to
maximize current income and preserve capital while maintaining liquidity by     
investing in money market instruments, with effective maturities of 397 days or 
less, that pay interest that is exempt from federal taxation. In selecting      
investments, MSDW Investment Management and MSDW Advisors seek to maintain a    
share price of $1.00 per share.                                                 

PROCESS                                                                         
MSDW Advisors assesses current and projected market and economic conditions,    
particularly interest rates. Based on this analysis, MSDW Advisors uses gradual 
shifts in average maturity to manage the Portfolio. MSDW Advisors selects       
particular municipal money market securities that it believes offer the most    
attractive risk/return trade-off. Individual portfolio securities are money     
market obligations issued by various states, territories and possessions of the 
United States and the District of Columbia, and their political subdivisions,   
agencies and instrumentalities. Typically, the Portfolio will invest at least   
80% of its assets in tax-exempt municipal obligations. The Portfolio will not   
invest in municipal obligations that pay interest subject to the alternative    
minimum tax.                                                                    

RISK                                                                            
Investing in the Municipal Money Market Portfolio may be appropriate for you if 
you want to minimize the risk of loss of principal and maintain liquidity of    
your investment, and at the same time receive a return on your investment that  
is exempt from federal income tax. The Portfolio invests only in municipal money
market instruments that MSDW Investment Management and MSDW Advisors believe    
present minimal credit risk. However, an investment in the Portfolio is not     
insured or guaranteed by the Federal Deposit Insurance Corporation or any other 
government agency. Although the Portfolio seeks to preserve the value of your   
investment at $1.00 per share, it is possible to lose money by investing in the 
Portfolio.                                                                      
THE PORTFOLIO WILL INVEST IN A PORTFOLIO OF HIGH QUALITY, SHORT-TERM MUNICIPAL  
SECURITIES AND REPURCHASE AGREEMENTS. IN SELECTING THESE INVESTMENTS, MSDW      
INVESTMENT MANAGEMENT AND MSDW ADVISORS FOLLOW STRICT RULES ABOUT CREDIT RISK,  
MATURITY AND DIVERSIFICATION OF THE PORTFOLIO'S INVESTMENTS. FOR EXAMPLE, THE   
PORTFOLIO'S MONEY MARKET INSTRUMENTS WILL BE RATED WITHIN THE TWO HIGHEST       
CATEGORIES ASSIGNED BY A RECOGNIZED RATING ORGANIZATION OR, IF NOT RATED, ARE OF
COMPARABLE QUALITY AS DETERMINED BY MSDW ADVISORS. IN ADDITION, THESE           
INSTRUMENTS WILL HAVE A MAXIMUM REMAINING MATURITY OF 397 DAYS OR LESS.         

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)       
                                   
COMMENCED OPERATIONS ON            
FEBRUARY 10, 1989                  
1990                          5.39%
1991                          4.06%
1992                          2.48%
1993                          1.91%
1994                          2.44%
1995                          3.44%
1996                          3.02%
1997                          3.17%
1998                          3.00%
1999                          2.77%
HIGH (QUARTER)                     
4/89 - 6/89                        
1.57%                              
LOW (QUARTER)                      
1/94 - 3/94                        
0.46%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                                [Download Table]

                                                                   CLASS A      
                                                                  (COMMENCED    
                                                                OPERATIONS ON   
                                                              FEBRUARY 10, 1989)
                                                                                
--------------------------------------------------------------------------------
 SINCE INCEPTION                                                    3.40%       
--------------------------------------------------------------------------------
 PAST ONE YEAR                                                      2.77%       
--------------------------------------------------------------------------------
 PAST FIVE YEARS                                                    3.08%       
--------------------------------------------------------------------------------
 PAST TEN YEARS                                                     3.17%       

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. HOW THE PORTFOLIO HAS    
PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL      
PERFORM IN THE FUTURE.                                                          
YOU MAY OBTAIN THE CURRENT 7-DAY YIELD OF THE MUNICIPAL MONEY MARKET PORTFOLIO  
BY CALLING 1-800-548-7786.                                                      

3                                                             

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INVESTMENT SUMMARY                                                              
--------------------------------------------------------------------------------
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in the Fixed Income Portfolio is based on the      
market prices of the securities the Portfolio holds. These prices change daily  
due to economic and other events that affect markets generally, as well as those
that affect particular industries, companies or governments. These price        
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Fixed income securities, regardless of credit quality,        
experience price volatility, especially in response to interest rate changes. As
a result of price volatility, there is a risk that you may lose money by        
investing in any of these Portfolios.                                           

FIXED INCOME SECURITIES                                                         

Investments in fixed income securities are subject to credit risk and market    
risk. Credit risk is the possibility that an issuer may be unable to meet its   
scheduled principal and interest payments. Market risk is the possibility that a
change in interest rates or the market's perception of an issuer's prospects may
adversely affect the value of a fixed income security. Generally, fixed income  
securities decrease in value as interest rates rise and vice versa. Prices of   
longer term securities also are generally more volatile, so the average maturity
of the securities in the Portfolios affects risk.                               

MORTGAGE-BACKED SECURITIES                                                      
Mortgage-backed securities are fixed-income securities representing an interest 
in a pool of underlying mortgage loans. They are sensitive to changes in        
interest rates, but may respond to these changes differently from other fixed   
income securities due to the possibility of prepayment of the underlying        
mortgage loans. As a result, it may not be possible to determine in advance the 
actual maturity date or average life of a mortgage-backed security. Rising      
interest rates tend to discourage refinancings, with the result that the average
life and volatility of the security will increase and its market price will     
decrease. When interest rates fall, however, mortgage-backed securities may not 
gain as much in market value because additional mortgage prepayments must be    
reinvested at lower interest rates. Prepayment risk may make it difficult to    
calculate the average maturity of a portfolio of mortgage-backed securities and,
therefore, to assess the volatility risk of that portfolio.                     
DERIVATIVES                                                                     

The Fixed Income Portfolio may use various instruments that derive their values 
from those of specified securities, indices, currencies or other points of      
reference for both hedging and non-hedging purposes. Derivatives include        
futures, options, forward contracts, swaps, and structured notes. These         
derivatives, including those used to manage risk, are themselves subject to     
risks of the different markets in which they trade and, therefore, may not serve
their intended purposes.                                                        

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for the         
Portfolio to sell a derivative, which could result in difficulty closing a      
position and (iii) certain derivatives can magnify the extent of losses incurred
due to changes in the market value of the securities to which they relate. In   
addition, some derivatives are subject to counterparty risk. To minimize this   
risk, the Portfolio may enter into derivatives transactions only with           
counterparties that meet certain requirements for credit quality and collateral.
Also, the Portfolio may invest in certain derivatives that require the Portfolio
to segregate some or all of its cash or liquid securities to cover its          
obligations under those instruments. At certain levels, this can cause the      
Portfolio to lose flexibility in managing its investments properly, responding  
to shareholder redemption requests, or meeting other obligations. If the        
Portfolio is in that position, it could be forced to sell other securities that 
it wanted to retain.                                                            

4                                                             

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The Portfolio will limit its use of derivatives for non-hedging purposes to     
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to the
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
and MSDW Advisors have 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, MSDW Investment Management and MSDW Advisors may determine to
use some permitted trading strategies while not using others. The success or    
failure of such decisions will affect the Portfolios' performance.              

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management or MSDW Advisors believes that changes in       
economic, financial or political conditions warrant, each Portfolio may invest  
without limit in certain short-and medium-term fixed income securities for      
temporary defensive purposes. If MSDW Investment Management or MSDW Advisors    
incorrectly predicts the effects of these changes, such defensive investments   
may adversely affect a Portfolio's performance and the Portfolio may not achieve
its investment objective.                                                       
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders. The Fixed Income  
Portfolio may engage in frequent trading of securities to achieve its investment
objective.                                                                      

5                                                             

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FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management. No fee waivers   
are in effect for the Money Market and Municipal Money Market Portfolios.       

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                                                                                          MUNICIPAL 
                                                          FIXED            MONEY            MONEY   
                                                         INCOME           MARKET           MARKET   
                                                        PORTFOLIO        PORTFOLIO        PORTFOLIO 
                                                                                                    
MANAGEMENT FEES                                                                                     
----------------------------------------------------------------------------------------------------
 CLASS A                                                  0.35%            0.30%            0.30%   
----------------------------------------------------------------------------------------------------
 CLASS B                                                  0.35%            0.30%             N/A    

12b-1 FEE                                                                                           
----------------------------------------------------------------------------------------------------
 CLASS A                                                  NONE             NONE             NONE    
----------------------------------------------------------------------------------------------------
 CLASS B                                                 0.15%+            0.25%             N/A    

OTHER EXPENSES                                                                                      
----------------------------------------------------------------------------------------------------
 CLASS A                                                  0.22%            0.20%            0.20%   
----------------------------------------------------------------------------------------------------
 CLASS B                                                  0.22%           0.20%++            N/A    

TOTAL ANNUAL FUND OPERATING EXPENSES                                                                
----------------------------------------------------------------------------------------------------
 CLASS A                                                  0.57%            0.50%            0.50%   
----------------------------------------------------------------------------------------------------
 CLASS B                                                  0.72%           0.75%++            N/A    

+THE ACTUAL 12b-1 FEE PAID BY THE PORTFOLIO FOR THE LAST FISCAL YEAR WAS 0.15%
BECAUSE MORGAN STANLEY HAS VOLUNTARILY AGREED TO WAIVE 0.10% OF THE 0.25%   
DISTRIBUTION FEE IT IS ENTITLED TO RECEIVE.                                 

++ESTIMATED.                                                                    

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE      
HIGHEST THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW 
INVESTMENT MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS.
  MSDW INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE
AND/OR REIMBURSE THE PORTFOLIOS SO THAT TOTAL ANNUAL OPERATING EXPENSES WILL
 NOT EXCEED 0.45% FOR CLASS A SHARES AND 0.60% FOR CLASS B SHARES OF THE FIXED
  INCOME PORTFOLIO; 0.55% FOR CLASS A SHARES AND 0.80% FOR CLASS B SHARES OF THE
MONEY MARKET PORTFOLIO; AND 0.57% FOR CLASS A SHARES OF THE MUNICIPAL MONEY 
MARKET PORTFOLIO.                                                           

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR  
EXPENSE REIMBURSEMENT FOR A PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED   
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON       
 BORROWING ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE
  INCURRED, THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS
AND/OR EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIO SHOWN ABOVE.   

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT
  MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS WERE 0.45% FOR CLASS A SHARES
AND 0.60% FOR CLASS B SHARES OF THE FIXED INCOME PORTFOLIO. TOTAL OPERATING 
EXPENSES FOR THE MONEY MARKET AND MUNICIPAL MONEY MARKET PORTFOLIOS DID NOT 
EXCEED THE AMOUNTS SHOWN IN THE FIRST PARAGRAPH AND, ACCORDINGLY, TOTAL     
 OPERATING EXPENSES INCURRED BY INVESTORS IN THESE PORTFOLIOS WERE AS SHOWN IN
THE TABLE ABOVE.                                                            

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT 
 MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT
ANY TIME AND WITHOUT NOTICE.                                                

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    

The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
FIXED INCOME PORTFOLIO                                                                              
----------------------------------------------------------------------------------------------------
 CLASS A                               $58              $183              $318               $714   
----------------------------------------------------------------------------------------------------
 CLASS B                               $74              $230              $401               $894   
MONEY MARKET PORTFOLIO                                                                              
----------------------------------------------------------------------------------------------------
 CLASS A                               $51              $160              $280               $628   
----------------------------------------------------------------------------------------------------
 CLASS B+                              $77              $240               N/A               N/A    
MUNICIPAL MONEY MARKET PORTFOLIO                                                                    
----------------------------------------------------------------------------------------------------
 CLASS A                               $51              $160              $280               $628   

+THE FUND HAS NOT PROJECTED EXPENSES BEYOND THE THREE YEAR PERIOD SHOWN BECAUSE 
THE CLASS B SHARES OF THE MONEY MARKET PORTFOLIO WERE NOT OPERATIONAL AS OF     
DECEMBER 31, 1999.                                                              

--------------------------------------------------------------------------------
INVESTMENT ADVISER AND SUB-ADVISER                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies, managed assets of approximately       
$184.8 billion, including assets under fiduciary advice.                        

Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"), which also is a     
subsidiary of MSDW, located at Two World Trade Center, New York, New York 10048,
serves as investment sub-adviser and manager for the Money Market and Municipal 
Money Market Portfolios on a day-to-day basis. MSDW Advisors selects, buys and  
sells securities for these Portfolios under the supervision of MSDW Investment  
Management.                                                                     

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                                                                                   MUNICIPAL    
                                                                                   MONEY             MONEY      
                                                              FIXED INCOME         MARKET            MARKET     
                                                               PORTFOLIO         PORTFOLIO         PORTFOLIO    
                                                            ----------------------------------------------------
                                                                                                                
                                                            CLASS A  CLASS B  CLASS A  CLASS B  CLASS A  CLASS B
                                                            ----------------------------------------------------
MANAGEMENT FEE PAID IN FISCAL YEAR ENDED DECEMBER 31, 1999   0.23%    0.23%    0.30%     N/A     0.30%     N/A  
(NET OF WAIVER AND AS A PERCENTAGE OF AVERAGE NET ASSETS)                                                       

7                                                             

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PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUALS HAVE PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT          
RESPONSIBILITY FOR THE FIXED INCOME PORTFOLIO:                                  

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

FIXED INCOME PORTFOLIO                                                          

WARREN ACKERMAN, III, THOMAS L. BENNETT, KENNETH B. DUNN, ROBERTO M. SELLA AND  
W. DAVID ARMSTRONG                                                              

Warren Ackerman is a Principal of MSDW Investment Management and Morgan Stanley.
Prior to joining MSDW Investment Management in 1993, he spent over 14 years with
Bankers Trust Company as a Managing Director responsible for institutional      
active fixed income management. Mr. Ackerman is a graduate of Monmouth College  
with a B.S. in Economics. Thomas L. Bennett, a Managing Director of Morgan      
Stanley, joined MSDW Investment Management's affiliated institutional investment
management company, Miller Anderson & Sherrerd, LLP ("MAS") in 1984. He is      
Chairman of the Board of Trustees of MAS Funds, a member of the Executive       
Committee of MAS and a Director of MAS Fund Distributors, Inc. Mr. Bennett holds
a B.S. in Chemistry and an M.B.A. from the University of Cincinnati. Kenneth B. 
Dunn, a Managing Director of Morgan Stanley, joined MAS in 1987. Mr. Dunn       
received a B.S. and M.B.A. from The Ohio State University and a Ph.D. from      
Purdue University. Roberto M. Sella, a Managing Director of Morgan Stanley,     
joined MAS in 1992. He served as a Financial Analyst from 1992 to 1998 and as a 
Portfolio Manager beginning in 1998. Mr. Sella graduated from the University of 
Wisconsin (PHI BETA KAPPA) in 1987 and received an M.B.A. from The Wharton      
School of the University of Pennsylvania in 1993. W. David Armstrong is a       
Managing Director of Morgan Stanley and joined MSDW Investment Management in    
1998 as a Portfolio Manager. He joined the management team for the MAS Funds    
Fixed Income and Special Purpose Fixed Income Portfolios in 2000. He served as a
Senior Vice President and Manager of U.S. proprietary trading at Lehman Brothers
from 1995 to 1997. Mr. Armstrong received a degree in Economics from the State  
University of New York (SUNY) at Plattsburg in 1981 and an M.B.A. from the      
Wharton School of the University of Pennsylvania in 1986. Mr. Ackerman has had  
primary responsibility for managing the Portfolio's assets since March 1994.    
Messrs. Bennett, Dunn, Sella and Armstrong have shared primary responsibility   
for managing the Portfolio's assets since May 2000.                             

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. Morgan Stanley has agreed to waive     
0.10% of the 0.25% distribution fee it is entitled to receive from the Fixed    
Income Portfolio. The distribution fee compensates the Distributor for marketing
and selling Class B shares. The Distributor may pay others for providing        
distribution-related and other services, including account maintenance services.
Over time the distribution fees will increase the cost of your investment and   
may cost you more than paying other types of sales charges.                     

8                                                             

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------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 

ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of a Portfolio is    
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.

In calculating NAV, the Fixed Income Portfolio generally values securities at   
market price. If market prices are unavailable or may be unreliable because of  
events occurring after the close of trading, fair value prices may be determined
in good faith using methods approved by the Board of Directors. The Portfolio   
may hold portfolio securities that are listed on foreign exchanges. These       
securities may trade on weekends or other days when the Portfolio does not      
calculate NAV. As a result, the value of these investments may change on days   
when you cannot purchase or sell shares.                                        

The Money Market and Municipal Money Market Portfolios seek to maintain a stable
NAV per share of $1.00 by valuing portfolio securities using "amortized cost."  
Amortized cost involves valuing a portfolio security at cost and, thereafter,   
assuming a constant amortization to maturity of any discount or premium. This   
method of valuation does not take into account any unrealized gains or losses or
the impact of fluctuating interest rates on the market value of portfolio       
securities. While using amortized cost provides certainty in valuation, it may  
result in periods during which the value as determined by amortized cost is     
higher or lower than the price the Portfolio would receive if it sold the       
security.                                                                       

PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Fixed Income Portfolio as of the close of the New    
York Stock Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) and for the Money
Market and Municipal Money Market Portfolios as of 12:00 noon Eastern Time and  
11:00 a.m. Eastern Time, respectively, on each day that the NYSE is open for    
business (the "Pricing Time").                                                  

HOW TO PURCHASE SHARES                                                          

You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries"), except for Class B shares of the Money Market Portfolio, which
may be purchased only through a Financial Intermediary. You may purchase shares 
of the Portfolios on each day that the NYSE is open.                            

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of the Fixed Income Portfolio and $100,000 for      
Class A shares of the Money Market and Municipal Money Market Portfolios. There 
is no minimum initial investment for Class B shares of the Money Market         
Portfolio. The minimum additional investment generally is $1,000 for each       
account that you have. If the value of your account falls below the minimum     
initial investment amount for Class A shares or Class B shares as a result of   
share redemptions, the Fund will notify you. Your account may be subject to     
involuntary conversion from Class A shares to Class B shares or involuntary     
redemption in the case of Class B shares if the value of your account remains   
below the minimum initial investment amount for 60 consecutive days. MSDW       
Investment Management may waive the minimum initial investment and involuntary  
conversion or redemption features for certain investors, including individuals  
purchasing through a Financial Intermediary.                                    

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

9                                                             

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To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            
HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, a Portfolio may pay redemption proceeds by a distribution-in-kind 
of readily marketable portfolio securities.                                     

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 
+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

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DIVIDENDS AND DISTRIBUTIONS                                                     

The policy of the Fixed Income Portfolio is to distribute to shareholders       
substantially all of its taxable net investment income in the form of a monthly 
dividend and to distribute net capital gains, if any, at least annually.        

Each of the Money Market and Municipal Money Market Portfolios computes net     
investment income and declares a dividend as of 1:00 p.m. Eastern Time on each  
day. These dividends accrue daily and are distributed on the 15th day of each   
month, or the next business day if the 15th is a holiday or weekend. The Money  
Market and Municipal Money Market Portfolios will distribute capital gains, if  
any, at least annually.                                                         

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           
TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. The Fund will tell you        
annually how to treat dividends and distributions.                              

The Municipal Money Market Portfolio generally distributes income that is exempt
from federal taxation, however, the Portfolio may invest in securities that     
generate taxable income. Income exempt from federal tax may be subject to state 
and local taxes.                                                                

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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FINANCIAL HIGHLIGHTS                                                            
--------------------------------------------------------------------------------
FIXED INCOME PORTFOLIO                                                          
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                           CLASS A                          
                                                  --------------------------------------------------------- 
                                                                   YEAR ENDED DECEMBER 31,                  
                                                  --------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                  1999         1998        1997        1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD              $  11.08     $  10.88    $  10.58    $  10.81    $   9.82 
                                                  --------     --------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                            0.64         0.62        0.65        0.67        0.72 
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                                 
   INVESTMENTS                                       (0.81)        0.22        0.33       (0.20)       1.06 
                                                  --------     --------    --------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                 (0.17)        0.84        0.98        0.47        1.78 
                                                  --------     --------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                               (0.64)       (0.61)      (0.68)      (0.70)      (0.79)
 IN EXCESS OF NET INVESTMENT INCOME                     --           --       (0.00)+     (0.00)+        -- 
 NET REALIZED GAIN                                      --        (0.03)         --          --          -- 
 IN EXCESS OF NET REALIZED GAIN                      (0.03)          --          --          --          -- 
                                                  --------     --------    --------    --------    -------- 
    TOTAL DISTRIBUTIONS                              (0.67)       (0.64)      (0.68)      (0.70)      (0.79)
                                                  --------     --------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                    $  10.24     $  11.08    $  10.88    $  10.58    $  10.81 
                                                  ========     ========    ========    ========    ======== 
TOTAL RETURN                                         (1.56)%       7.93%       9.54%       4.61%      18.76%
                                                  ========     ========    ========    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)             $171,467     $212,718    $183,192    $130,733    $165,527 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)           0.45%        0.45%       0.45%       0.45%       0.45%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
  ASSETS (1)                                          5.87%        5.63%       6.11%       6.30%       6.85%
PORTFOLIO TURNOVER RATE                                 97%         176%        163%        183%        172%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
   DURING                                                                                                   
     THE PERIOD:                                                                                            
     PER SHARE BENEFIT TO NET INVESTMENT                                                                    
     INCOME                                          $0.01        $0.01       $0.02       $0.02       $0.01 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                   0.57%        0.58%       0.60%       0.60%       0.59%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                   
       ASSETS                                         5.75%        5.51%       5.97%       6.15%       6.71%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                  
                                                                -------------------------------------------
                                                                                               PERIOD FROM 
                                                                                               JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,       1996*** TO  
                                                                --------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999      1998      1997         1996     
                                                                                                           
-----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $11.10    $10.89    $10.58       $10.81    
                                                                ------    ------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                          
 NET INVESTMENT INCOME (2)                                        0.61      0.61      0.64         0.64    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          (0.80)     0.22      0.33        (0.19)   
                                                                ------    ------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                             (0.19)     0.83      0.97         0.45    
                                                                ------    ------    ------       ------    
DISTRIBUTIONS                                                                                              
 NET INVESTMENT INCOME                                           (0.63)    (0.59)    (0.66)       (0.68)   
 NET REALIZED GAIN                                                  --     (0.03)       --           --    
 IN EXCESS OF NET REALIZED GAIN                                  (0.03)       --        --           --    
                                                                ------    ------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (0.66)    (0.62)    (0.66)       (0.68)   
                                                                ------    ------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                  $10.25    $11.10    $10.89       $10.58    
                                                                ======    ======    ======       ======    
TOTAL RETURN                                                     (1.76)%    7.85%     9.48%        4.35%   
                                                                ======    ======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                              
NET ASSETS, END OF PERIOD (THOUSANDS)                           $2,084    $3,649    $4,834       $1,462    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       0.60%     0.60%     0.60%        0.60%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          5.69%     5.50%     5.93%        6.15%** 
PORTFOLIO TURNOVER RATE                                             97%      176%      163%         183%   
-----------------                                                                                          
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                              
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.01     $0.01     $0.02        $0.01    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                       
     EXPENSES TO AVERAGE NET ASSETS                               0.72%     0.72%     0.74%        0.74%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  5.58%     5.38%     5.78%        6.01%** 
-----------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

12                                                            

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FINANCIAL HIGHLIGHTS                                                            
--------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO                                                          
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                YEAR ENDED DECEMBER 31,                      
SELECTED PER SHARE DATA AND                 ---------------------------------------------------------------- 
RATIOS                                         1999          1998          1997          1996         1995   
                                                                                                             
------------------------------------------------------------------------------------------------------------ 
NET ASSET VALUE, BEGINNING OF PERIOD        $    1.000    $    1.000    $    1.000    $    1.000    $  1.000 
                                            ----------    ----------    ----------    ----------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME                           0.047         0.051         0.051         0.049       0.054 
                                            ----------    ----------    ----------    ----------    -------- 
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                          (0.047)       (0.051)       (0.051)       (0.049)     (0.054)
                                            ----------    ----------    ----------    ----------    -------- 
NET ASSET VALUE, END OF PERIOD              $    1.000    $    1.000    $    1.000    $    1.000    $  1.000 
                                            ==========    ==========    ==========    ==========    ======== 
TOTAL RETURN                                      4.80%         5.20%         5.20%         5.03%       5.51%
                                            ==========    ==========    ==========    ==========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)       $2,931,316    $1,958,177    $1,506,210    $1,284,633    $836,693 
RATIO OF EXPENSES TO AVERAGE NET ASSETS           0.50%         0.49%         0.49%         0.52%       0.51%
RATIO OF NET INVESTMENT INCOME TO                                                                            
AVERAGE                                                                                                      
  NET ASSETS                                      4.73%         5.07%         5.12%         4.92%       5.37%
------------------------------------------------------------------------------------------------------------ 

----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
MUNICIPAL MONEY MARKET PORTFOLIO                                                
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                  YEAR ENDED DECEMBER 31,                   
                                                 ---------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                  1999         1998        1997        1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD             $    1.000    $  1.000    $  1.000    $  1.000    $  1.000 
                                                 ----------    --------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME                                0.027       0.030       0.031       0.030       0.034 
                                                 ----------    --------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                               (0.027)     (0.030)     (0.031)     (0.030)     (0.034)
                                                 ----------    --------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                   $    1.000    $  1.000    $  1.000    $  1.000    $  1.000 
                                                 ==========    ========    ========    ========    ======== 
TOTAL RETURN                                           2.77%       3.00%       3.17%       3.02%       3.44%
                                                 ==========    ========    ========    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)            $1,405,646    $990,579    $804,607    $721,410    $451,519 
RATIO OF EXPENSES TO AVERAGE NET ASSETS                0.50%       0.50%       0.50%       0.53%       0.52%
RATIO OF NET INVESTMENT INCOME TO AVERAGE                                                                   
  NET ASSETS                                           2.76%       2.96%       3.14%       2.98%       3.38%
----------------------------------------------------------------------------------------------------------- 

13                                                            

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                                                                [Download Table]
                                                                           
                                                     FIXED INCOME PORTFOLIO
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER      MONEY MARKET PORTFOLIO
INSTITUTIONAL FUND, INC.                             MUNICIPAL MONEY MARKET
                                                     PORTFOLIO             

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

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

Type of Registration: / / Incorporated / / Unincorporated Association       
/ / Partnership / / Uniform Gift/Transfer to Minor                              
(ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                
/ / Trust -------------------- / / Other (SPECIFY) --------------------         

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                     HOME TELEPHONE NUMBER BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
CITY COUNTRY POSTAL CODE  

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
CITY COUNTRY POSTAL CODE  

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                      Class A shares minimum $500,000 for each Portfolio
                         ($100,000 for Money Market and Municipal Money Market
                       Portfolios) and Class B shares minimum $100,000 for
                   the Fixed Income and Municipal Bond Portfolios.

                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                                 
          FIXED INCOME PORTFOLIO  / / Class A Shares (065)  $ ----------    / / Class B Shares (040) $ ----------
          MONEY MARKET PORTFOLIO  / / Class A Shares (060)  $ ----------                                         
MUNICIPAL MONEY MARKET PORTFOLIO  / / Class A Shares (061)  $ ----------                                         
                                  Total Initial Investment    $ ----------                                       

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
   NAME OF PORTFOLIO
                    ------------------------------------------
ACCOUNT NUMBER              

      Account previously established by:

 / /Phone exchange / / Wire on
           ---------------------------------------
DATE  

                         ---------------------------------------
                          ACCOUNT NUMBER
                         (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.
                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.
                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                          
/ /  I/we hereby authorize the Fund and its agents to                                                     
     honor any telephone requests to wire redemption                                                      
     proceeds to the commercial bank indicated at right                                                   
     and/or mail redemption proceeds to the name and                                                      
     address in which my/our fund account is registered                                                   
     if such requests are believed to be authentic.      ------------------------                         
     The Fund and the Fund's Transfer Agent will employ  NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)       
     reasonable procedures to confirm that instructions  ------------------------                         
     communicated by telephone are genuine. These        BANK ACCOUNT NUMBER                              
     procedures include requiring the investor to        ------------------------                         
     provide certain personal identification             BANK ABA NUMBER                                  
     information at the time an account is opened and    ------------------------                         
     prior to effecting each transaction requested by    NAME(S) IN WHICH YOUR BANK ACCOUNT IS ESTABLISHED
     telephone. In addition, all telephone transaction   ------------------------                         
     requests will be recorded and investors may be      BANK'S STREET ADDRESS                            
     required to provide additional telecopied written   ------------------------                         
     instructions of transaction requests. Neither the   CITY STATE ZIP CODE                              
     Fund nor the Transfer Agent will be responsible                                                      
     for any loss, liability, cost or expense for                                                         
     following instructions received by telephone that                                                    
     it reasonably believes to be genuine.                                                                

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                  CITY                          STATE ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
           ---------------------------------------
SIGNATURE     DATE          
           ---------------------------------------
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at "http://    
www.sec.gov"; or (3) By mail: you may request documents, upon payment of a      
duplicating fee, by writing to Securities and Exchange Commission, Public       
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

PORTFOLIOS OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

EMERGING MARKETS PORTFOLIO                                                      

THE EMERGING MARKETS PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF ISSUERS IN EMERGING MARKET    
COUNTRIES.                                                                      

EMERGING MARKETS DEBT PORTFOLIO                                                 
THE EMERGING MARKETS DEBT PORTFOLIO SEEKS HIGH TOTAL RETURN BY INVESTING        
PRIMARILY IN FIXED INCOME SECURITIES OF GOVERNMENT AND GOVERNMENT-RELATED       
ISSUERS AND, TO A LESSER EXTENT, OF CORPORATE ISSUERS IN EMERGING MARKET        
COUNTRIES.                                                                      

LATIN AMERICAN PORTFOLIO                                                        

THE LATIN AMERICAN PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING  
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF LATIN AMERICAN ISSUERS.       

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           
DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"). 

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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

TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     EMERGING MARKETS PORTFOLIO                                1 
     EMERGING MARKETS DEBT PORTFOLIO                           2 
     LATIN AMERICAN PORTFOLIO                                  3 
     ADDITIONAL RISK FACTORS AND INFORMATION                   4 
FEES AND EXPENSES OF THE PORTFOLIOS                            6 
INVESTMENT ADVISER                                             7 
MANAGEMENT FEES                                                7 
PORTFOLIO MANAGERS                                             8 
DISTRIBUTION OF PORTFOLIO SHARES                               9 
SHAREHOLDER INFORMATION                                        9 
FINANCIAL HIGHLIGHTS                                           11
     EMERGING MARKETS PORTFOLIO                                12
     EMERGING MARKETS DEBT PORTFOLIO                           13
     LATIN AMERICAN PORTFOLIO                                  14
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
EMERGING MARKETS PORTFOLIO                                                      
------------------------------------------------------------------------------- 

THE EMERGING MARKETS PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF ISSUERS IN EMERGING MARKET    
COUNTRIES.                                                                      

--------------------------------------------------------------------------------
APPROACH                                                                        

MSDW Investment Management seeks to maximize returns by investing in            
growth-oriented equity securities in emerging markets. MSDW Investment          
Management's investment approach combines top-down country allocation with      
bottom-up stock selection. Investment selection criteria include attractive     
growth characteristics, reasonable valuations and company managements with a    
strong shareholder value orientation.                                           

PROCESS                                                                         

MSDW Investment Management's global strategists analyze the global economic     
environment, particularly its impact on emerging markets and allocates the      
Portfolio's assets among emerging markets based on relative economic, political 
and social fundamentals, stock valuations and investor sentiment. MSDW          
Investment Management invests within countries based on the work of country     
specialists who conduct extensive fundamental analysis of companies within these
markets and seek to identify companies with strong earnings growth prospects. To
manage risk, MSDW Investment Management emphasizes thorough macroeconomic and   
fundamental research.                                                           

RISK                                                                            

Investing in the Emerging Markets Portfolio may be appropriate for you if you   
are willing to accept the risks and uncertainties of investing in the equity    
securities of issuers in emerging markets in the hope of earning superior       
returns. In general, prices of equity securities are more volatile than those of
fixed income securities. The prices of equity securities will rise and fall in  
response to a number of different factors. In particular, prices of equity      
securities will respond to events that affect entire financial markets or       
industries (changes in inflation or consumer demand, for example) and to events 
that affect particular issuers (news about the success or failure of a new      
product, for example). In addition, at times the Portfolio's market sector,     
emerging markets equity securities, may underperform relative to other sectors. 

THE RISK OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO 
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED.                                                 

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON              
SEPTEMBER 25, 1992                   
1993                          85.91% 
1994                          -9.63% 
1995                          -12.77%
1996                          12.19% 
1997                          -1.03% 
1998                          -25.42%
1999                          101.78%
HIGH (QUARTER)                       
10/99 - 12/99                        
52.65%                               
LOW (QUARTER)                        
7/98 - 9/98                          
-23.96%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                         CLASS A           CLASS B                  MSCI EMERGING          
                                       (COMMENCED         (COMMENCED                MARKETS FREE           
                                      OPERATIONS ON     OPERATIONS ON                  INDEX**             
                                   SEPTEMBER 25, 1992) JANUARY 2, 1996)       CLASS A           CLASS B    
                                                                                                           
-----------------------------------------------------------------------------------------------------------
 PAST ONE YEAR                           101.78%           101.26%            66.41%            66.41%     
-----------------------------------------------------------------------------------------------------------
 PAST FIVE YEARS                          7.84%              N/A               2.00%              N/A      
-----------------------------------------------------------------------------------------------------------
 SINCE INCEPTION                         13.45%             13.17%             9.49%             3.71%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI EMERGING MARKETS FREE INDEX IS A MARKET CAPITALIZATION WEIGHTED INDEX 
COMPRISED OF COMPANIES THAT ARE REPRESENTATIVE OF THE MARKET STRUCTURE OF     
DEVELOPING COUNTRIES IN LATIN AMERICA, ASIA, EASTERN EUROPE, THE MIDDLE EAST  
AND AFRICA.                                                                   

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
EMERGING MARKETS DEBT PORTFOLIO                                                 
------------------------------------------------------------------------------- 

THE EMERGING MARKETS DEBT PORTFOLIO SEEKS HIGH TOTAL RETURN BY INVESTING        
PRIMARILY IN FIXED INCOME SECURITIES OF GOVERNMENT AND GOVERNMENT-RELATED       
ISSUERS AND, TO A LESSER EXTENT, OF CORPORATE ISSUERS IN EMERGING MARKET        
COUNTRIES.                                                                      
--------------------------------------------------------------------------------
APPROACH                                                                        
MSDW Investment Management seeks high total return by investing in a portfolio  
of emerging market debt that offers low correlation to many other asset classes.
Using macroeconomic and fundamental analysis, MSDW Investment Management seeks  
to identify developing countries that are undervalued and have attractive or    
improving fundamentals. After the country allocation is determined, the sector  
and security selection is made within each country.                             
PROCESS                                                                         

MSDW Investment Management's global allocation team analyzes the global economic
environment and its impact on emerging markets. MSDW Investment Management      
focuses on investing in countries that show signs of positive fundamental       
change. This analysis considers macroeconomic factors, such as GDP growth,      
inflation, monetary policy, fiscal policy and interest rates and sociopolitical 
factors, such as political risk, leadership, social stability and commitment to 
reform. In selecting securities, MSDW Investment Management first examines yield
curves with respect to a country and then considers instrument-specific         
criteria, including (i) spread duration; (ii) real interest rates; and          
(iii) liquidity. The Portfolio's holdings may range in maturity from overnight  
to 30 years or more and will not be subject to any minimum credit rating        
standard. MSDW Investment Management may, when or if available, use certain     
strategies, including the use of derivatives to protect the Portfolio from      
overvalued currencies or to take advantage of undervalued currencies.           

RISK                                                                            

Investing in the Emerging Markets Debt Portfolio may be appropriate for you if  
you are willing to accept the risks and uncertainties of investing in           
lower-rated and unrated fixed income securities in emerging markets in the hope 
of earning superior total return. Market prices of fixed income securities      
respond to economic developments as well as to perceptions of the               
creditworthiness of individual issuers, including governments. Generally, fixed 
income securities decrease in value as interest rates rise and vice versa.      
Investing in emerging markets intensifies risk, because lower quality fixed     
income securities are more volatile in price. The Portfolio invests in many     
fixed income securities that are rated below "investment grade" or are not      
rated, but are of equivalent quality. These fixed income securities are often   
referred to as "high yield securities" or "junk bonds." High yield securities   
range from those for which the prospect for repayment of principal and interest 
is predominantly speculative to those which are currently in default on         
principal or interest payments. When the Portfolio invests in high yield        
securities, it generally seeks to receive a correspondingly higher return on the
securities it holds to compensate it for the additional credit risk and market  
risk it has assumed. Prices of longer term fixed income securities also are     
generally more volatile, so the average maturity of the securities in the       
Portfolio affects risk. At times the Portfolio's market sector, emerging markets
debt securities, may underperform relative to other sectors.                    

THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED. IN ADDITION, THE PORTFOLIO MAY SELL SHORT. IN A 
SHORT SALE TRANSACTION, THE PORTFOLIO SELLS A BORROWED SECURITY IN ANTICIPATION 
OF A DECLINE IN THE MARKET VALUE OF THAT SECURITY, HOPING TO PROFIT FROM THE    
DIFFERENCE BETWEEN THE AMOUNT RECEIVED FROM THE SALE OF THE COST OF REPLACING   
THE BORROWED SECURITY. IF MSDW INVESTMENT MANAGEMENT INCORRECTLY PREDICTS THAT  
THE PRICE OF A BORROWED SECURITY WILL DECLINE, THE PORTFOLIO MAY LOSE MONEY     
BECAUSE THE AMOUNT NECESSARY TO REPLACE THE BORROWED SECURITY WILL BE GREATER   
THAN THE AMOUNT RECEIVED FROM THE SALE. THE PORTFOLIO MAY BORROW MONEY FOR      
INVESTMENT PURPOSES. BORROWING FOR INVESTMENT PURPOSES IS A SPECULATIVE ACTIVITY
THAT CREATES LEVERAGE. LEVERAGE WILL MAGNIFY THE EFFECT OF INCREASES AND        
DECREASES IN PRICES OF PORTFOLIO SECURITIES.                                    

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON              
FEBRUARY 1, 1994                     
1995                          28.23% 
1996                          50.52% 
1997                          18.29% 
1998                          -35.95%
1999                          29.22% 
HIGH (QUARTER)                       
4/95 - 6/95                          
29.97%                               
LOW (QUARTER)                        
7/98 - 9/98                          
-39.82%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]
                                                                                                          J.P. MORGAN           
                                                                      J.P. MORGAN                          EMERGING             
                                                                       EMERGING                             MARKETS             
                           CLASS A           CLASS B                    MARKETS                           BOND INDEX            
                         (COMMENCED        (COMMENCED                  BOND PLUS                            GLOBAL              
                        OPERATIONS ON     OPERATIONS ON                  INDEX                       (JPM EMBI GLOBAL)**        
                         FEBRUARY 1,       JANUARY 2,               (JPM EMBI(+))*                                              
                            1994)             1996)            CLASS A           CLASS B           CLASS A           CLASS B    
                                                                                                                                
--------------------------------------------------------------------------------------------------------------------------------
 PAST ONE YEAR             29.22%            28.01%            25.97%            25.97%            25.76%            25.76%     
--------------------------------------------------------------------------------------------------------------------------------
 PAST FIVE YEARS           13.57%              N/A             16.58%              N/A             20.16%              N/A      
--------------------------------------------------------------------------------------------------------------------------------
 SINCE INCEPTION            8.53%             9.75%             9.95%            13.86%            10.14%            14.11%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO INDICES OF SIMILAR SECURITIES. AN  
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDICES DO NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDICES' PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND 
CLASS B SHARES TO THE INDICES SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS
FROM ITS COMMENCEMENT DATE. THE INDICES THEMSELVES DO NOT ACTUALLY HAVE TWO     
CLASSES. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY       
INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.                          

* JPM EMBI (+) IS A MARKET WEIGHTED INDEX COMPOSED OF ALL BRADY BONDS,        
OUTSTANDING LOANS AND EUROBONDS, AS WELL AS U.S. DOLLAR LOCAL MARKET      
INSTRUMENTS OF ARGENTINA, BRAZIL, BULGARIA, COLOMBIA, ECUADOR, MEXICO,    
  MOROCCO, NIGERIA, PANAMA, PERU, THE PHILIPPINES, POLAND, RUSSIA, SOUTH KOREA
AND VENEZUELA.                                                            

** THE JPM EMBI GLOBAL TRACKS TOTAL RETURNS FOR U.S. DOLLAR-DENOMINATED DEBT    
INSTRUMENTS ISSUED BY EMERGING MARKETS SOVEREIGN AND QUASI-SOVEREIGN      
ENTITIES: BRADY BONDS, LOANS, EUROBONDS, AND LOCAL MARKET INSTRUMENTS. THE
JPM EMBI GLOBAL INCLUDES COVERAGE OF 27 EMERGING MARKET COUNTRIES.        
PREVIOUSLY, THE PORTFOLIO'S RETURNS HAD BEEN COMPARED ONLY TO THE JPM EMBI
 (+). THE ADVISER BELIEVES THAT THE JPM EMBI GLOBAL HAS A MORE COMPREHENSIVE
   COVERAGE OF GEOGRAPHIC REGIONS AND TYPES OF SECURITIES IN WHICH THE PORTFOLIO
MAY INVEST.                                                               

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
LATIN AMERICAN PORTFOLIO                                                        
------------------------------------------------------------------------------- 

THE LATIN AMERICAN PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING  
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF LATIN AMERICAN ISSUERS.       

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

APPROACH                                                                        

MSDW Investment Management seeks to maximize returns by investing in            
growth-oriented securities in Latin American markets. MSDW Investment           
Management's investment approach combines top-down country allocation with      
bottom-up stock selection. Investment selection criteria include attractive     
growth characteristics, reasonable valuations and managements that have strong  
shareholder value orientation.                                                  

PROCESS                                                                         

MSDW Investment Management allocates the Portfolio's assets among Latin American
countries based on relative economic, political and social fundamentals, stock  
valuations and investor sentiment. MSDW Investment Management invests within    
countries based on fundamental analysis of Latin American companies and seeks to
identify companies with strong earnings growth potential. The Portfolio may     
concentrate in the Latin American telecommunications or financial services      
industries because of the relatively small size of the overall Latin American   
equity markets and the possibility that one or more Latin American markets may  
become dominated by issuers engaged in these industries.                        

RISK                                                                            

Investing in the Latin American Portfolio may be appropriate for you if you are 
willing to accept the risks and uncertainties of investing in the equity        
securities of issuers in Latin America in the hope of achieving superior        
returns. In general, prices of equity securities are more volatile than those of
fixed income securities. The prices of equity securities will rise and fall in  
response to a number of different factors. In particular, prices of equity      
securities will respond to events that affect entire financial markets or       
industries (changes in inflation or consumer demand, for example) and to events 
that affect particular issuers (news about the success or failure of a new      
product, for example). In addition, at times the Portfolio's market sector,     
equity securities of Latin American issuers, may underperform relative to other 
sectors.                                                                        

THE RISK OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO 
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED. IN ADDITION, THE PORTFOLIO MAY SELL SHORT. IN A 
SHORT SALE TRANSACTION, THE PORTFOLIO SELLS A BORROWED SECURITY IN ANTICIPATION 
OF A DECLINE IN THE MARKET VALUE OF THAT SECURITY, HOPING TO PROFIT FROM THE    
DIFFERENCE BETWEEN THE AMOUNT RECEIVED FROM THE SALE OF THE COST OF REPLACING   
THE BORROWED SECURITY. IF MSDW INVESTMENT MANAGEMENT INCORRECTLY PREDICTS THAT  
THE PRICE OF A BORROWED SECURITY WILL DECLINE, THE PORTFOLIO MAY LOSE MONEY     
BECAUSE THE AMOUNT NECESSARY TO REPLACE THE BORROWED SECURITY WILL BE GREATER   
THAN THE AMOUNT RECEIVED FROM THE SALE.                                         

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON              
JANUARY 18, 1995                     
1996                          48.77% 
1997                          41.28% 
1998                          -37.10%
1999                          71.28% 
HIGH (QUARTER)                       
10/99 - 12/99                        
40.10%                               
LOW (QUARTER)                        
7/98 - 9/98                          
-31.43%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]
                           CLASS A           CLASS B                 MSCI EMERGING                       MSCI EMERGING          
                         (COMMENCED        (COMMENCED               MARKETS GLOBAL                       MARKETS FREE           
                        OPERATIONS ON     OPERATIONS ON              LATIN AMERICA                       LATIN AMERICA          
                         JANUARY 18,       JANUARY 2,                   INDEX*                              INDEX*              
                            1995)             1996)            CLASS A           CLASS B           CLASS A           CLASS B    
                                                                                                                                
--------------------------------------------------------------------------------------------------------------------------------
 PAST ONE YEAR             71.28%            70.85%            65.45%            65.45%            58.89%            58.89%     
--------------------------------------------------------------------------------------------------------------------------------
 SINCE INCEPTION           15.80%            21.20%             9.69%            13.85%             8.98%            12.83%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO INDICES OF SIMILAR SECURITIES. AN  
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDICES DO NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDICES' PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND 
CLASS B SHARES TO THE INDICES SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS
FROM ITS COMMENCEMENT DATE. THE INDICES THEMSELVES DO NOT ACTUALLY HAVE TWO     
CLASSES. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY       
INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.                          

*THE MSCI EMERGING MARKETS FREE LATIN AMERICA INDEX IS A BROAD BASED MARKET CAP 
 WEIGHTED COMPOSITE INDEX COVERING AT LEAST 60% OF MARKETS IN ARGENTINA, BRAZIL,
CHILE, COLOMBIA, MEXICO, PERU, AND VENEZUELA. THE INDEX TAKES INTO ACCOUNT    
 LOCAL MARKET RESTRICTIONS FOR SPECIFIC SECURITIES OR CLASSES OF SHARES THAT MAY
BE EXCLUDED FROM OR LIMITED FOR FOREIGN INVESTOR OWNERSHIP. THE MSCI EMERGING 
 MARKETS GLOBAL LATIN AMERICA INDEX INCLUDES THE SAME MARKETS, BUT DOES NOT TAKE
INTO ACCOUNT LOCAL MARKET RESTRICTIONS ON SHARE OWNERSHIP BY FOREIGNERS.      

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INVESTMENT SUMMARY                                                              
--------------------------------------------------------------------------------
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Over time, equity securities have generally shown gains       
superior to fixed income securities, although they have tended to be more       
volatile in the short term. Fixed income securities, regardless of credit       
quality, also experience price volatility, especially in response to interest   
rate changes. As a result of price volatility, there is a risk that you may lose
money by investing in a Portfolio.                                              

FOREIGN INVESTING                                                               
Investing in foreign countries, particularly emerging markets, entails the risk 
that news and events unique to a country or region will affect those markets and
their issuers. These same events will not necessarily have an effect on the U.S.
economy or similar issuers located in the United States. In addition, a         
Portfolio's investments in foreign countries generally will be denominated in   
foreign currencies. As a result, changes in the value of a country's currency   
compared to the U.S. dollar may affect the value of a Portfolio's investments.  
These changes may occur separately from and in response to events that do not   
otherwise affect the value of the security in the issuer's home country. MSDW   
Investment Management may invest in certain instruments, such as derivatives,   
and may use certain techniques, such as hedging, to manage these risks. However,
MSDW Investment Management cannot guarantee that it will be practical to hedge  
these risks in certain markets or under particular conditions or that it will   
succeed in doing so.                                                            

EMERGING MARKET RISKS                                                           
Emerging market countries are countries that major international financial      
institutions, such as the World Bank, generally consider to be less economically
mature than developed nations, such as the United States or most nations in     
Western Europe. Emerging market countries can include every nation in the world 
except the United States, Canada, Japan, Australia, New Zealand and most        
countries located in Western Europe. Emerging market countries may be more      
likely to experience political turmoil or rapid changes in economic conditions  
than more developed countries, and the financial condition of issuers in        
emerging market countries may be more precarious than in other countries. These 
characteristics result in greater risk of price volatility in emerging market   
countries, which may be heightened by currency fluctuations relative to the U.S.
dollar.                                                                         

DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its cash or liquid securities to cover its obligations under those    
instruments. At certain levels, this can cause the Portfolio to lose flexibility
in managing its investments properly, responding to shareholder redemption      
requests, or meeting other obligations. If a Portfolio is in that position, it  
could be forced to sell other securities that it wanted to retain.              

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A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, each Portfolio may invest without limit in certain
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect a Portfolio's performance and   
the Portfolio may not achieve its investment objective.                         

PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders. The Emerging      
Markets Debt and Latin American Portfolios may engage in frequent trading of    
securities to achieve their investment objectives.                              

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FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                              EMERGING MARKETS            EMERGING MARKETS           LATIN AMERICAN  
                                  PORTFOLIO                DEBT PORTFOLIO               PORTFOLIO    
                                                                                                     
MANAGEMENT FEES                                                                                      
-----------------------------------------------------------------------------------------------------
 CLASS A                            1.25%                       0.75%                     1.10%      
-----------------------------------------------------------------------------------------------------
 CLASS B                            1.25%                       0.75%                     1.10%      

12b-1 FEE                                                                                            
-----------------------------------------------------------------------------------------------------
 CLASS A                            NONE                        NONE                      NONE       
-----------------------------------------------------------------------------------------------------
 CLASS B                            0.25%                       0.25%                     0.25%      

OTHER EXPENSES                                                                                       
-----------------------------------------------------------------------------------------------------
 CLASS A                            0.39%                       0.65%                     1.02%      
-----------------------------------------------------------------------------------------------------
 CLASS B                            0.38%                       0.65%                     1.00%      

TOTAL ANNUAL FUND OPERATING EXPENSES                                                                 
-----------------------------------------------------------------------------------------------------
 CLASS A                            1.64%                       1.40%                     2.12%      
-----------------------------------------------------------------------------------------------------
 CLASS B                            1.88%                       1.65%                     2.35%      

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE HIGHEST
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO WAIVE A PORTION OF ITS FEES     
AND/OR REIMBURSE EXPENSES IF ANNUAL OPERATING EXPENSES, EXCLUDING CERTAIN       
INVESTMENT RELATED EXPENSES DESCRIBED BELOW, EXCEED 1.75% FOR CLASS A SHARES AND
2.00% FOR CLASS B SHARES OF THE EMERGING MARKETS AND EMERGING MARKETS DEBT      
PORTFOLIOS AND 1.70% FOR CLASS A SHARES AND 1.95% FOR CLASS B SHARES OF THE     
LATIN AMERICAN PORTFOLIO.                                                       

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR THE PORTFOLIOS, IF ANY, CERTAIN INVESTMENT RELATED    
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWINGS
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIOS SHOWN ABOVE.                     

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSES REIMBURSEMENT, THE 
TOTAL OPERATING EXPENSES, INCLUDING CERTAIN INVESTMENT RELATED EXPENSES,        
INCURRED BY INVESTORS WERE 1.79% FOR CLASS A SHARES AND 2.05% FOR CLASS B SHARES
OF THE LATIN AMERICAN PORTFOLIO. EXCLUDING INVESTMENT RELATED EXPENSES, THE     
OPERATING EXPENSES AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS WERE 1.70%   
FOR CLASS A SHARES AND 1.95% FOR CLASS B SHARES OF THE LATIN AMERICAN PORTFOLIO.
TOTAL OPERATING EXPENSES FOR THE EMERGING MARKETS AND EMERGING MARKETS DEBT     
PORTFOLIOS DID NOT EXCEED THE AMOUNTS SHOWN IN THE FIRST PARAGRAPH AND,         
ACCORDINGLY, TOTAL OPERATING EXPENSES INCURRED BY INVESTORS IN THE PORTFOLIOS   
WERE AS SHOWN IN THE TABLE ABOVE.                                               

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    
The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
EMERGING MARKETS PORTFOLIO                                                                          
----------------------------------------------------------------------------------------------------
 CLASS A                               $167             $517              $892              $1,944  
----------------------------------------------------------------------------------------------------
 CLASS B                               $191             $591             $1,016             $2,201  

EMERGING MARKETS DEBT PORTFOLIO                                                                     
----------------------------------------------------------------------------------------------------
 CLASS A                               $143             $443              $766              $1,680  
----------------------------------------------------------------------------------------------------
 CLASS B                               $168             $520              $897              $1,955  

LATIN AMERICAN PORTFOLIO                                                                            
----------------------------------------------------------------------------------------------------
 CLASS A                               $215             $664             $1,139             $2,452  
----------------------------------------------------------------------------------------------------
 CLASS B                               $238             $733             $1,255             $2,686  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies, managed assets of approximately       
$184.8 billion, including assets under fiduciary advice.                        

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                                         EMERGING              EMERGING                LATIN       
                                                          MARKETS            MARKETS DEBT            AMERICAN      
                                                         PORTFOLIO             PORTFOLIO             PORTFOLIO     
                                                                                                                   
                                                       --------------------------------------------------------    
                                                    CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B 
                                                    ---------------------------------------------------------------
MANAGEMENT FEE PAID IN FISCAL YEAR ENDED                                                                           
DECEMBER 31, 1999                                    1.25%      1.25%      0.75%      0.75%      0.77%      0.77%  
(NET OF WAIVERS AND AS A PERCENTAGE OF AVERAGE NET                                                                 
ASSETS)                                                                                                            

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--------------------------------------------------------------------------------
PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUALS HAVE PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT          
RESPONSIBILITY FOR THE PORTFOLIOS:                                              
----------------------------------------------------------------------------    

EMERGING MARKETS PORTFOLIO                                                      
ROBERT L. MEYER AND ANDY SKOV                                                   

Robert L. Meyer, a Managing Director of MSDW Investment Management and Morgan   
Stanley, joined MSDW Investment Management in 1989. Currently, he is head of and
a Portfolio Manager in the Emerging Markets Equity Group. Mr. Meyer was born in 
Argentina and graduated from Yale University with a B.A. in Economics and       
Political Science. He received a J.D. from Harvard Law School. In addition, Mr. 
Meyer is a Chartered Financial Analyst. Andy Skov, a Managing Director of MSDW  
Investment Management and Morgan Stanley, joined MSDW Investment Management in  
1994. Currently, he is a Portfolio Manager in the Emerging Markets Equity Group.
Prior to joining MSDW Investment Management, he worked in the Latin America     
group at Bankers Trust Company in corporate finance, research and sales; two of 
those years he spent in Argentina. Mr. Skov graduated from the University of    
California at Berkeley with a B.A. (PHI BETA KAPPA) in Political Science and    
Economic Development. Mr. Meyer has assisted in managing the Portfolio's assets 
since its inception and assumed primary responsibility for managing the         
Portfolio's assets in September 1997. Mr. Skov has shared primary responsibility
for managing the Portfolio's assets since October 1998.                         

EMERGING MARKETS DEBT PORTFOLIO                                                 

STEPHEN F. ESSER AND ABIGAIL L. MCKENNA                                         

Stephen F. Esser is a Managing Director of Morgan Stanley and has been a        
Portfolio Manager with MSDW Investment Management's affiliated institutional    
investment management company Miller Anderson & Sherrerd, LLP since 1988. Mr.   
Esser is a member of the New York Society of Security Analysts and holds a B.S. 
degree (SUMMA CUM LAUDE AND PHI BETA KAPPA) from the University of Delaware.    
Abigail L. McKenna is a Principal of MSDW Investment Management and focuses     
primarily on the trading and management of emerging markets debt portfolios.    
Prior to joining MSDW Investment Management in 1996, she was a Senior Portfolio 
Manager at MIMCO from 1995 to 1996 and a Limited Partner at Weiss Peck & Greer  
from 1991 to 1995, where she was responsible for the trading and management of  
corporate bond portfolios. Ms. McKenna holds a B.A. in International Relations  
from Georgetown University and is a Chartered Financial Analyst. Mr. Esser and  
Ms. McKenna have shared primary responsibility for managing the Portfolio's     
assets since October 1998.                                                      

LATIN AMERICAN PORTFOLIO                                                        
ROBERT L. MEYER, ANDY SKOV AND MICHAEL PERL                                     

Information about Robert L. Meyer and Andy Skov is included under the Emerging  
Markets Portfolio above. Michael Perl is a Principal of MSDW Investment         
Management and a Portfolio Manager in the Emerging Markets Equity Group. Prior  
to joining MSDW Investment Management in 1998 as a Portfolio Manager, he worked 
as a Latin American Portfolio Manager at Bankers Trust Australia from 1992 to   
1998. Mr. Perl graduated from the University of New South Wales with a Bachelor 
of Commerce (HONORS), majoring in Finance, Accounting and Taxation. Mr. Meyer   
has had primary responsibility for managing the Portfolio's assets since its    
inception. Mr. Skov has assisted Mr. Meyer in managing the Portfolio's assets   
since its inception and has shared primary responsibility for managing the      
Portfolio's assets since May 1997. Mr. Perl has shared primary responsibility   
for managing the Portfolio's assets since November 1998.                        

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DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of a Portfolio is    
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolios as of the close of the New York Stock     
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of each Portfolio. The minimum additional investment
generally is $1,000 for each account that you have. If the value of your account
falls below the minimum initial investment amount for Class A shares or Class B 
shares as a result of share redemptions, the Fund will notify you. Your account 
may be subject to involuntary conversion from Class A shares to Class B shares  
or involuntary redemption in the case of Class B shares if the value of your    
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

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To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            
HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, a Portfolio may pay redemption proceeds by a distribution-in-kind 
of readily marketable portfolio securities.                                     

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

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DIVIDENDS AND DISTRIBUTIONS                                                     

Each Portfolio's policy is to distribute to shareholders substantially all of   
its taxable net investment income in the form of an annual dividend and to      
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           
TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. A Portfolio may be able to    
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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FINANCIAL HIGHLIGHTS                                                            
--------------------------------------------------------------------------------
EMERGING MARKETS PORTFOLIO                                                      
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                         CLASS A                              
                                              --------------------------------------------------------------  
                                                                 YEAR ENDED DECEMBER 31,                      
                                              --------------------------------------------------------------  
SELECTED PER SHARE DATA AND RATIOS               1999         1998         1997          1996         1995    
                                                                                                              
------------------------------------------------------------------------------------------------------------  
NET ASSET VALUE, BEGINNING OF PERIOD          $     9.55    $  12.97    $    14.66    $    13.14    $  16.30  
                                              ----------    --------    ----------    ----------    --------  
INCOME FROM INVESTMENT OPERATIONS                                                                             
 NET INVESTMENT INCOME                             (0.03)       0.16          0.07          0.09        0.08  
 NET REALIZED AND UNREALIZED GAIN (LOSS)                                                                      
   ON INVESTMENTS                                   9.75       (3.46)        (0.29)         1.51       (2.05) 
                                              ----------    --------    ----------    ----------    --------  
    TOTAL FROM INVESTMENT OPERATIONS                9.72       (3.30)        (0.22)         1.60       (1.97) 
                                              ----------    --------    ----------    ----------    --------  
DISTRIBUTIONS                                                                                                 
 NET INVESTMENT INCOME                                --       (0.12)        (0.07)        (0.08)      (0.06) 
 IN EXCESS OF NET INVESTMENT INCOME                   --          --         (0.07)           --          --  
 NET REALIZED GAIN                                    --          --         (0.69)           --       (1.13) 
 IN EXCESS OF NET REALIZED GAIN                       --          --         (0.64)           --          --  
                                              ----------    --------    ----------    ----------    --------  
    TOTAL DISTRIBUTIONS                               --       (0.12)        (1.47)        (0.08)      (1.19) 
                                              ----------    --------    ----------    ----------    --------  
NET ASSET VALUE, END OF PERIOD                $    19.27    $   9.55    $    12.97    $    14.66    $  13.14  
                                              ==========    ========    ==========    ==========    ========  
TOTAL RETURN                                      101.78%     (25.42)%       (1.03)%       12.19%     (12.77)%
                                              ==========    ========    ==========    ==========    ========  
RATIOS AND SUPPLEMENTAL DATA:                                                                                 
NET ASSETS, END OF PERIOD (THOUSANDS)         $1,544,893    $772,115    $1,501,386    $1,304,006    $876,591  
RATIO OF EXPENSES TO AVERAGE NET ASSETS             1.64%       1.81%         1.75%         1.74%       1.72% 
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                                       
  EXCLUDING FOREIGN TAX EXPENSE AND                                                                           
  INTEREST EXPENSE                                  1.57%       1.70%          N/A           N/A         N/A  
RATIO OF NET INVESTMENT INCOME (LOSS) TO                                                                      
  AVERAGE NET ASSETS                               (0.26)%      1.04%         0.40%         0.69%       0.60% 
PORTFOLIO TURNOVER RATE                              133%         98%           90%           55%         54% 
------------------------------------------------------------------------------------------------------------  

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                   
                                                                --------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                  YEAR ENDED DECEMBER 31,       1996*** TO  
                                                                ---------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999       1998      1997         1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $  9.56    $12.98    $14.66       $ 13.25   
                                                                -------    ------    ------       -------   
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME                                            (0.04)     0.10      0.02          0.04   
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS            9.72     (3.43)    (0.28)         1.42   
                                                                -------    ------    ------       -------   
    TOTAL FROM INVESTMENT OPERATIONS                               9.68     (3.33)    (0.26)         1.46   
                                                                -------    ------    ------       -------   
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                               --     (0.09)    (0.05)        (0.05)  
 IN EXCESS OF NET INVESTMENT INCOME                                  --        --     (0.04)           --   
 NET REALIZED GAIN                                                   --        --     (0.69)           --   
 IN EXCESS OF NET REALIZED GAIN                                      --        --     (0.64)           --   
                                                                -------    ------    ------       -------   
    TOTAL DISTRIBUTIONS                                              --     (0.09)    (1.42)        (0.05)  
                                                                -------    ------    ------       -------   
NET ASSET VALUE, END OF PERIOD                                  $ 19.24    $ 9.56    $12.98       $ 14.66   
                                                                =======    ======    ======       =======   
TOTAL RETURN                                                     101.26%   (25.65)%   (1.31)%      (11.04)% 
                                                                =======    ======    ======       =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                           $16,999    $7,199    $9,666       $14,213   
RATIO OF EXPENSES TO AVERAGE NET ASSETS                            1.88%     2.06%     2.00%         1.99%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                           
  FOREIGN TAX EXPENSE AND INTEREST EXPENSE                         1.81%     1.95%      N/A           N/A   
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS       (0.51)%    0.80%     0.11%         0.33%**
PORTFOLIO TURNOVER RATE                                             133%       98%       90%           55%  
------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
EMERGING MARKETS DEBT PORTFOLIO                                                 
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                            CLASS A                         
                                                     ------------------------------------------------------ 
                                                                    YEAR ENDED DECEMBER 31,                 
                                                     ------------------------------------------------------ 
SELECTED PER SHARE DATA AND RATIOS                    1999       1998        1997        1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD                 $  2.61    $  5.77    $   7.54    $   8.59    $   8.59 
                                                     -------    -------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME                                  0.43       1.13        0.74        1.54        1.36 
 NET REALIZED AND UNREALIZED GAIN (LOSS)                                                                    
   ON INVESTMENTS                                       0.34      (3.19)       0.55        2.79        0.91 
                                                     -------    -------    --------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                    0.77      (2.06)       1.29        4.33        2.27 
                                                     -------    -------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                 (0.37)     (1.08)      (0.71)      (1.17)      (1.86)
 IN EXCESS OF NET INVESTMENT INCOME                    (0.00)+    (0.02)         --       (0.01)         -- 
 NET REALIZED GAIN                                        --         --       (2.17)      (4.20)      (0.41)
 IN EXCESS OF NET REALIZED GAIN                           --         --       (0.08)         --          -- 
 RETURN OF CAPITAL                                     (0.01)        --       (0.10)         --          -- 
                                                     -------    -------    --------    --------    -------- 
    TOTAL DISTRIBUTIONS                                (0.38)     (1.10)      (3.06)      (5.38)      (2.27)
                                                     -------    -------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                       $  3.00    $  2.61    $   5.77    $   7.54    $   8.59 
                                                     =======    =======    ========    ========    ======== 
TOTAL RETURN                                           29.22%    (35.95)%     18.29%      50.52%      28.23%
                                                     =======    =======    ========    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                $52,654    $46,234    $142,382    $152,142    $181,878 
RATIO OF EXPENSES TO AVERAGE NET ASSETS                 1.40%      2.38%       1.60%       2.70%       1.75%
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                                     
  EXCLUDING INTEREST EXPENSE                            1.29%      1.34%        N/A         N/A         N/A 
RATIO OF NET INVESTMENT INCOME TO                                                                           
  AVERAGE NET ASSETS                                   13.12%     11.61%       8.06%      11.66%      14.70%
PORTFOLIO TURNOVER RATE                                  249%       457%        417%        560%        406%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                  
                                                                -------------------------------------------
                                                                                               PERIOD FROM 
                                                                                               JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,        1996** TO  
                                                                --------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999      1998      1997         1996     
                                                                                                           
-----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $ 2.66    $ 5.77    $ 7.53       $ 8.68    
                                                                ------    ------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                          
 NET INVESTMENT INCOME                                            0.28      1.13      0.69         1.01    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS           0.46     (3.17)     0.59         3.20    
                                                                ------    ------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              0.74     (2.04)     1.28         4.21    
                                                                ------    ------    ------       ------    
DISTRIBUTIONS                                                                                              
 NET INVESTMENT INCOME                                           (0.05)    (1.05)    (0.69)       (1.15)   
 IN EXCESS OF NET INVESTMENT INCOME                                 --     (0.02)       --        (0.01)   
 NET REALIZED GAIN                                                  --        --     (2.17)       (4.20)   
 IN EXCESS OF NET REALIZED GAIN                                     --        --     (0.08)          --    
 RETURN OF CAPITAL                                               (0.32)       --     (0.10)          --    
                                                                ------    ------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (0.37)    (1.07)    (3.04)       (5.36)   
                                                                ------    ------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                  $ 3.03    $ 2.66    $ 5.77       $ 7.53    
                                                                ======    ======    ======       ======    
TOTAL RETURN                                                     28.01%   (35.37)%   18.05%       48.52%   
                                                                ======    ======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                              
NET ASSETS, END OF PERIOD (THOUSANDS)                           $  860    $1,187    $2,281       $4,253    
RATIO OF EXPENSES TO AVERAGE NET ASSETS                           1.65%     2.62%     1.91%        2.81%*  
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                          
  INTEREST EXPENSE                                                1.55%     1.60%      N/A          N/A    
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS             12.85%    11.09%     7.87%       11.09%*  
PORTFOLIO TURNOVER RATE                                            249%      457%      417%         560%   
-----------------------------------------------------------------------------------------------------------

*ANNUALIZED                                                                   

**THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.             

+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
LATIN AMERICAN PORTFOLIO                                                        
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                            CLASS A                          
                                                   --------------------------------------------------------- 
                                                                                                PERIOD FROM  
                                                                                                JANUARY 18,  
                                                           YEAR ENDED DECEMBER 31,               1995* TO    
                                                   ----------------------------------------    DECEMBER 31,  
SELECTED PER SHARE DATA AND RATIOS                  1999      1998++      1997       1996          1995      
                                                                                                             
------------------------------------------------------------------------------------------------------------ 
NET ASSET VALUE, BEGINNING OF PERIOD               $  6.74    $ 10.91    $ 11.32    $  9.06       $ 10.00    
                                                   -------    -------    -------    -------       -------    
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME (1)                            0.18       0.13      (0.01)      0.14          0.05    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                                  
   INVESTMENTS                                        4.59      (4.16)      4.32       4.27         (0.92)   
                                                   -------    -------    -------    -------       -------    

    TOTAL FROM INVESTMENT OPERATIONS                  4.77      (4.03)      4.31       4.41         (0.87)   
                                                   -------    -------    -------    -------       -------    
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                               (0.19)     (0.09)        --      (0.13)        (0.04)   
 NET REALIZED GAIN                                      --      (0.05)     (4.04)     (2.02)           --    
 IN EXCESS OF NET REALIZED GAIN                         --         --      (0.68)        --            --    
 RETURN OF CAPITAL                                      --         --         --         --         (0.03)   
                                                   -------    -------    -------    -------       -------    
    TOTAL DISTRIBUTIONS                              (0.19)     (0.14)     (4.72)     (2.15)        (0.07)   
                                                   -------    -------    -------    -------       -------    
NET ASSET VALUE, END OF PERIOD                     $ 11.32    $  6.74    $ 10.91    $ 11.32       $  9.06    
                                                   =======    =======    =======    =======       =======    
TOTAL RETURN                                         71.28%    (37.10)%    41.28%     48.77%        (8.68)%  
                                                   =======    =======    =======    =======       =======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)              $13,809    $15,012    $73,196    $30,409       $15,376    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)           1.79%      1.81%      1.89%      1.70%         1.70%** 
RATIO OF EXPENSE TO AVERAGE NET ASSETS                                                                       
  EXCLUDING COUNTRY TAX AND INTEREST                                                                         
  EXPENSE                                             1.70%      1.64%      1.70%      1.70%         1.70%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                                
  ASSETS (1)                                          1.40%      1.40%     (0.14)%     1.21%         1.62%** 
PORTFOLIO TURNOVER RATE                                124%       196%       286%       192%          137%   
-----------------                                                                                            
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                            
     THE PERIOD:                                                                                             
     PER SHARE BENEFIT TO NET INVESTMENT INCOME      $0.04        N/A      $0.01      $0.05         $0.09    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                         
     EXPENSES TO AVERAGE NET ASSETS                   2.12%       N/A       1.96%      2.18%         3.13%** 
     NET INVESTMENT INCOME TO AVERAGE NET                                                                    
     ASSETS                                           1.07%       N/A      (0.21)%     0.75%        (0.48)%**
------------------------------------------------------------------------------------------------------------ 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                   
                                                                --------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                  YEAR ENDED DECEMBER 31,       1996*** TO  
                                                                ---------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999     1998++      1997         1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $ 6.78    $ 10.80    $11.31       $ 9.44    
                                                                ------    -------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                        0.19       0.12        --         0.09    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS           4.58      (4.09)     4.21         3.90    
                                                                ------    -------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              4.77      (3.97)     4.21         3.99    
                                                                ------    -------    ------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                           (0.19)        --        --        (0.10)   
 NET REALIZED GAIN                                                  --      (0.05)    (4.04)       (2.02)   
 IN EXCESS OF NET REALIZED GAIN                                     --         --     (0.68)          --    
                                                                ------    -------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (0.19)     (0.05)    (4.72)       (2.12)   
                                                                ------    -------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                  $11.36    $  6.78    $10.80       $11.31    
                                                                ======    =======    ======       ======    
TOTAL RETURN                                                     70.85%    (36.86)%   40.37%       42.44%   
                                                                ======    =======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                           $1,387     $1,148    $6,709       $1,333    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       2.05%      2.01%     2.14%        1.95%** 
RATIO OF EXPENSE TO AVERAGE NET ASSETS EXCLUDING COUNTRY                                                    
  TAX AND INTEREST EXPENSE                                        1.95%      1.85%     1.95%        1.95%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          1.04%      1.24%    (0.34)%       0.89%** 
PORTFOLIO TURNOVER RATE                                            124%       196%      286%         192%   
 ------------------                                                                                         
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.05        N/A     $0.00+       $0.05    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                               2.35%       N/A      2.21%        2.43%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  0.75%       N/A     (0.41)%       0.42%** 
------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                 
**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE                                          
++PER SHARE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 1998 ARE BASED ON AVERAGE 
SHARES OUTSTANDING.                                                       

14                                                            

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                                                                [Download Table]
                                                                               
                                                     EMERGING MARKETS PORTFOLIO
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER      EMERGING MARKETS DEBT     
INSTITUTIONAL FUND, INC.                             PORTFOLIO                 
                                                     LATIN AMERICAN PORTFOLIO  

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

                                                        [Enlarge/Download Table]
                                                                                                    
--------------------------------------------------------------------------------------------------  

                                                        [Enlarge/Download Table]
                                                                                       
  Type of Registration: / / Incorporated/ / Unincorporated Association/ / Partnership  
/ / Uniform Gift/Transfer to Minor                                                     
    (ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                           
/ / Trust -------------------- / / Other (SPECIFY) --------------------                

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                           HOME TELEPHONE NUMBER       BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                          Class A shares minimum $500,000 for each Portfolio and
                       Class B shares minimum $100,000 for each Portfolio.
                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                                   
EMERGING MARKETS PORTFOLIO  / / Class A Shares (071)  $ ----------  / / Class B Shares (044) $ --------------------
     EMERGING MARKETS DEBT  / / Class A Shares (078)  $ ----------  / / Class B Shares (049) $ --------------------
                 PORTFOLIO                                                                                         
  LATIN AMERICAN PORTFOLIO  / / Class A Shares (083)  $ ----------  / / Class B Shares (087) $ --------------------
                            Total Initial Investment  $ ----------                                                 

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
   NAME OF PORTFOLIO
                    ------------------------------------------
ACCOUNT NUMBER      

      Account previously established by:

  / / Phone exchange / / Wire on
           ---------------------------------------
          DATE
                      --------------------------------------------------
        ACCOUNT NUMBER
                                               (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.
                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.
                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                   
/ /  I/we hereby authorize the Fund and its agents to                                              
     honor any telephone requests to wire redemption                                               
     proceeds to the commercial bank indicated at right                                            
     and/or mail redemption proceeds to the name and                                               
     address in which my/our fund account is registered  ------------------------                  
     if such requests are believed to be authentic.      NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)
     The Fund and the Fund's Transfer Agent will employ  ------------------------                  
     reasonable procedures to confirm that instructions  BANK ACCOUNT NUMBER                       
     communicated by telephone are genuine. These        ------------------------                  
     procedures include requiring the investor to        BANK ABA NUMBER                           
     provide certain personal identification             ------------------------                  
     information at the time an account is opened and    NAME(S) IN WHICH YOUR BANK ACCOUNT IS     
     prior to effecting each transaction requested by    ESTABLISHED                               
     telephone. In addition, all telephone transaction   ------------------------                  
     requests will be recorded and investors may be      BANK'S STREET ADDRESS                     
     required to provide additional telecopied written   ------------------------                  
     instructions of transaction requests. Neither the   CITY STATE ZIP CODE                       
     Fund nor the Transfer Agent will be responsible                                               
     for any loss, liability, cost or expense for                                                  
     following instructions received by telephone that                                             
     it reasonably believes to be genuine.                                                         

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                     CITY                       STATE       ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
           ---------------------------------------
SIGNATURE     DATE          
           ---------------------------------------
SIGNATURE     DATE          
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at "http://    
www.sec.gov"; or (3) By mail: you may request documents, upon payment of a      
duplicating fee, by writing to Securities and Exchange Commission, Public       
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

GLOBAL EQUITY PORTFOLIO                                                         
THE GLOBAL EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING   
PRIMARILY IN EQUITY SECURITIES OF ISSUERS THROUGHOUT THE WORLD, INCLUDING U.S.  
ISSUERS.                                                                        

INTERNATIONAL EQUITY PORTFOLIO                                                  
THE INTERNATIONAL EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY      
INVESTING PRIMARILY IN EQUITY SECURITIES OF NON-U.S. ISSUERS.                   

INTERNATIONAL SMALL CAP PORTFOLIO                                               

THE INTERNATIONAL SMALL CAP PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY   
INVESTING PRIMARILY IN EQUITY SECURITIES OF SMALL NON-U.S. COMPANIES.           

EUROPEAN EQUITY PORTFOLIO                                                       
THE EUROPEAN EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING 
PRIMARILY IN EQUITY SECURITIES OF EUROPEAN ISSUERS.                             

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"), 
EXCEPT THAT THE INTERNATIONAL SMALL CAP PORTFOLIO OFFERS ONLY CLASS A SHARES.   

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     GLOBAL EQUITY PORTFOLIO                                    1
     INTERNATIONAL EQUITY PORTFOLIO                             2
     INTERNATIONAL SMALL CAP PORTFOLIO                          3
     EUROPEAN EQUITY PORTFOLIO                                  4
     ADDITIONAL RISK FACTORS AND INFORMATION                    5
FEES AND EXPENSES OF THE PORTFOLIOS                             7
INVESTMENT ADVISER                                              8
MANAGEMENT FEES                                                 8
PORTFOLIO MANAGERS                                              9
DISTRIBUTION OF PORTFOLIO SHARES                               10
SHAREHOLDER INFORMATION                                        11
FINANCIAL HIGHLIGHTS                                           13
     GLOBAL EQUITY PORTFOLIO                                   14
     INTERNATIONAL EQUITY PORTFOLIO                            15
     INTERNATIONAL SMALL CAP PORTFOLIO                         16
     EUROPEAN EQUITY PORTFOLIO                                 17
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
GLOBAL EQUITY PORTFOLIO                                                         
------------------------------------------------------------------------------- 

THE GLOBAL EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING   
PRIMARILY IN EQUITY SECURITIES OF ISSUERS THROUGHOUT THE WORLD, INCLUDING U.S.  
ISSUERS.                                                                        
----------------------------------------------------------------------------    
APPROACH                                                                        
MSDW Investment Management seeks to maintain a diversified portfolio of global  
equity securities based on individual stock selection and emphasizes a bottom-up
approach to investing that seeks to identify securities of undervalued issuers. 

PROCESS                                                                         

MSDW Investment Management selects securities for investment from a universe of 
eligible issuers consisting of approximately 4,500 companies throughout the     
world. MSDW Investment Management expects to invest at least 20% of the         
Portfolio's total assets in the common stocks of U.S. issuers. The investment   
process is value driven and based on individual stock selection. In assessing   
investment opportunities, MSDW Investment Management considers value criteria   
with an emphasis on cash flow and the intrinsic value of company assets.        
Securities which appear undervalued according to these criteria are then        
subjected to in-depth fundamental analysis. MSDW Investment Management conducts 
a thorough investigation of the issuer's balance sheet, cash flow and income    
statement and assesses the company's business franchise, including product      
competitiveness, market positioning and industry structure. Meetings with senior
company management are integral to the investment process.                      

RISK                                                                            
Investing in the Global Equity Portfolio may be appropriate for you if you are  
willing to accept the risks and uncertainties of investing in a portfolio of    
equity securities of issuers throughout the world. In general, prices of equity 
securities are more volatile than those of fixed income securities. The prices  
of equity securities will rise and fall in response to a number of different    
factors. In particular, prices of equity securities will respond to events that 
affect entire financial markets or industries (changes in inflation or consumer 
demand, for example) and to events that affect particular issuers (news about   
the success or failure of a new product, for example). In addition, at times the
Portfolio's market sector, foreign and domestic equity securities, may          
underperform relative to other sectors.                                         

INVESTING IN FOREIGN COUNTRIES ENTAILS THE RISK THAT NEWS AND EVENTS UNIQUE TO A
COUNTRY OR REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS
WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS      
LOCATED IN THE UNITED STATES. IN ADDITION, THE PORTFOLIO'S INVESTMENTS IN       
FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN FOREIGN CURRENCIES. AS A     
RESULT, CHANGES IN THE VALUE OF A COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR
MAY AFFECT THE VALUE OF THE PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR    
SEPARATELY FROM AND IN RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE
OF THE SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY    
INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN         
TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER, MSDW INVESTMENT    
MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN   
CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING 
SO.                                                                             

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON JULY        
15, 1992                            
1993                          44.24%
1994                          6.95% 
1995                          18.66%
1996                          22.83%
1997                          23.75%
1998                          14.60%
1999                          4.01% 
HIGH (QUARTER)                      
10/95 - 12/95                       
17.94%                              
LOW (QUARTER)                       
7/98 - 9/98                         
-12.74%                             

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]
                                 CLASS A           CLASS B                                            
                               (COMMENCED         (COMMENCED                    MSCI WORLD            
                              OPERATIONS ON     OPERATIONS ON                     INDEX*              
                             JULY 15, 1992)    JANUARY 2, 1996)          CLASS A           CLASS B    
                                                                                                      
------------------------------------------------------------------------------------------------------
 PAST ONE YEAR                    4.01%             3.75%                24.94%            24.94%     
------------------------------------------------------------------------------------------------------
 PAST FIVE YEARS                 16.54%              N/A                 19.76%              N/A      
------------------------------------------------------------------------------------------------------
 SINCE INCEPTION                 17.02%             15.57%               16.52%            19.42%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI WORLD INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS AND INCLUDES       
SECURITIES REPRESENTATIVE OF THE MARKET STRUCTURE OF 22 DEVELOPED MARKET      
COUNTRIES IN NORTH AMERICA, EUROPE, AND THE ASIA/PACIFIC REGION.              

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INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
INTERNATIONAL EQUITY PORTFOLIO                                                  
------------------------------------------------------------------------------- 

THE INTERNATIONAL EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY      
INVESTING PRIMARILY IN EQUITY SECURITIES OF NON-U.S. ISSUERS.                   
----------------------------------------------------------------------------    
APPROACH                                                                        
MSDW Investment Management seeks to maintain a diversified portfolio of equity  
securities of non-U.S. issuers based on individual stock selection. MSDW        
Investment Management emphasizes a bottom-up approach to investing that seeks to
identify securities of undervalued issuers.                                     

PROCESS                                                                         

MSDW Investment Management selects issuers from a universe comprised of         
approximately 2,600 companies in non-U.S. markets. The investment process is    
value driven and based on individual stock selection. In assessing investment   
opportunities, MSDW Investment Management considers value criteria with an      
emphasis on cash flow and the intrinsic value of company assets. Securities     
which appear undervalued according to these criteria are then subjected to in-  
depth fundamental analysis. MSDW Investment Management conducts a thorough      
investigation of the issuer's balance sheet, cash flow and income statement and 
assesses the company's business franchise, including product competitiveness,   
market positioning and industry structure. Meetings with senior company         
management are integral to the investment process.                              

RISK                                                                            

Investing in the International Equity Portfolio may be appropriate for you if   
you are willing to accept the risks and uncertainties of investing in the equity
securities of non-U.S. issuers in the hope of earning superior returns and      
diversifying your investment portfolio. In general, prices of equity securities 
are more volatile than those of fixed income securities. The prices of equity   
securities will rise and fall in response to a number of different factors. In  
particular, prices of equity securities will respond to events that affect      
entire financial markets or industries (changes in inflation or consumer demand,
for example) and to events that affect particular issuers (news about the       
success or failure of a new product, for example). In addition, at times the    
Portfolio's market sector, equity securities of foreign issuers, may            
underperform relative to other sectors.                                         

INVESTING IN FOREIGN COUNTRIES ENTAILS THE RISK THAT NEWS AND EVENTS UNIQUE TO A
COUNTRY OR REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS
WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS      
LOCATED IN THE UNITED STATES. IN ADDITION, THE PORTFOLIO'S INVESTMENTS IN       
FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN FOREIGN CURRENCIES. AS A     
RESULT, CHANGES IN THE VALUE OF A COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR
MAY AFFECT THE VALUE OF THE PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR    
SEPARATELY FROM AND IN RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE
OF THE SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY    
INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN         
TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER, MSDW INVESTMENT    
MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN   
CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING 
SO.                                                                             

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)          
                                      
COMMENCED OPERATIONS ON               
AUGUST 4, 1989                        
1990                          -5.73%  
1991                          8.92%   
1992                          -2.92%  
1993                          46.50%  
1994                          12.39%  
1995                          11.77%  
1996                          19.64%  
1997                          13.91%  
1998                          18.30%  
1999                          16.91%  
HIGH (QUARTER)                        
1/98 - 3/98                           
16.49%                                
LOW (QUARTER)                         
7/90 - 9/90                           
-18.85%                               

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]
                               CLASS A           CLASS B                     MSCI EUROPE,           
                             (COMMENCED         (COMMENCED               AUSTRALASIA, FAR EAST      
                            OPERATIONS ON     OPERATIONS ON                  (EAFE) INDEX*          
                           AUGUST 4, 1989)   JANUARY 2, 1996)          CLASS A           CLASS B    
                                                                                                    
----------------------------------------------------------------------------------------------------
 PAST ONE YEAR                 16.91%             16.68%               26.96%            26.96%     
----------------------------------------------------------------------------------------------------
 PAST FIVE YEARS               16.07%              N/A                 12.83%              N/A      
----------------------------------------------------------------------------------------------------
 PAST TEN YEARS                13.21%              N/A                  7.01%              N/A      
----------------------------------------------------------------------------------------------------
 SINCE INCEPTION               13.21%             16.74%                7.35%            13.24%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI EAFE INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS IN EUROPE,          
AUSTRALASIA AND THE FAR EAST.                                                 

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
INTERNATIONAL SMALL CAP PORTFOLIO                                               
------------------------------------------------------------------------------- 

THE INTERNATIONAL SMALL CAP PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY   
INVESTING PRIMARILY IN EQUITY SECURITIES OF SMALL NON-U.S. COMPANIES.           

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

APPROACH                                                                        
MSDW Investment Management seeks to maintain a diversified portfolio of equity  
securities of small cap non-U.S. issuers based on individual stock selection.   
MSDW Investment Management emphasizes a bottom-up approach to investing that    
seeks to identify securities of undervalued issuers.                            

PROCESS                                                                         

MSDW Investment Management selects issuers from a universe comprised of         
approximately 5,000 small cap companies in non-U.S. markets, most with market   
capitalizations of generally less than $2 billion. The investment process is    
value driven and based on individual stock selection. In assessing investment   
opportunities, MSDW Investment Management considers value criteria with an      
emphasis on cash flow and the intrinsic value of company assets. Securities     
which appear undervalued according to these criteria are then subjected to      
in-depth fundamental analysis. MSDW Investment Management conducts a thorough   
investigation of the issuer's balance sheet, cash flow and income statement and 
assesses the company's business franchise, including product competitiveness,   
market positioning and industry structure. Meetings with senior company         
management are integral to the investment process.                              

RISK                                                                            

Investing in the International Small Cap Portfolio may be appropriate for you if
you are willing to accept the risks and uncertainties of investing in the equity
securities of small cap non-U.S. issuers in the hope of earning superior returns
and diversifying your investment portfolio. In general, prices of equity        
securities are more volatile than those of fixed income securities. The prices  
of equity securities will rise and fall in response to a number of different    
factors. In particular, prices of equity securities will respond to events that 
affect entire financial markets or industries (changes in inflation or consumer 
demand, for example) and to events that affect particular issuers (news about   
the success or failure of a new product, for example). In addition, at times the
Portfolio's market sector, equity securities of smaller foreign issuers, may    
underperform relative to other sectors.                                         

THE RISK OF INVESTING IN EQUITY SECURITIES IS INTENSIFIED IN THE CASE OF THE    
SMALL CAP COMPANIES IN WHICH THE PORTFOLIO INVESTS. MARKET PRICES FOR SUCH      
COMPANIES' EQUITY SECURITIES TEND TO BE MORE VOLATILE THAN THOSE OF LARGER, MORE
ESTABLISHED COMPANIES. SMALL CAP COMPANIES MAY THEMSELVES BE MORE VULNERABLE TO 
ECONOMIC OR COMPANY SPECIFIC PROBLEMS.                                          

INVESTING IN FOREIGN COUNTRIES ENTAILS THE RISK THAT NEWS AND EVENTS UNIQUE TO A
COUNTRY OR REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS
WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS      
LOCATED IN THE UNITED STATES. IN ADDITION, THE PORTFOLIO'S INVESTMENTS IN       
FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN FOREIGN CURRENCIES. AS A     
RESULT, CHANGES IN THE VALUE OF A COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR
MAY AFFECT THE VALUE OF THE PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR    
SEPARATELY FROM AND IN RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE
OF THE SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY    
INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN         
TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER, MSDW INVESTMENT    
MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN   
CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING 
SO.                                                                             

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
DECEMBER 15, 1992                   
1993                          45.34%
1994                          5.25% 
1995                          2.60% 
1996                          16.82%
1997                          -0.55%
1998                          4.25% 
1999                          39.34%
HIGH (QUARTER)                      
1/93 - 3/93                         
17.46%                              
LOW (QUARTER)                       
7/98 - 9/98                         
-18.68%                             

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                                [Download Table]
                                                       CLASS A                     
                                                     (COMMENCED          MSCI EAFE 
                                                    OPERATIONS ON        SMALL CAP 
                                                 DECEMBER 15, 1992)       INDEX*   
                                                                                   
-----------------------------------------------------------------------------------
 PAST ONE YEAR                                         39.34%                17.67%
-----------------------------------------------------------------------------------
 PAST FIVE YEARS                                       11.60%                -1.76%
-----------------------------------------------------------------------------------
 SINCE INCEPTION                                       14.97%                 4.46%

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE MSCI EAFE SMALL CAP INDEX IS AN UNMANAGED, MARKET VALUE-WEIGHTED AVERAGE OF
THE PERFORMANCE OF OVER 900 SECURITIES OF COMPANIES LISTED ON THE STOCK       
EXCHANGE OF COUNTRIES IN EUROPE, AUSTRALASIA AND THE FAR EAST.                

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
EUROPEAN EQUITY PORTFOLIO                                                       
------------------------------------------------------------------------------- 

THE EUROPEAN EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING 
PRIMARILY IN EQUITY SECURITIES OF EUROPEAN ISSUERS.                             
----------------------------------------------------------------------------    
APPROACH                                                                        
MSDW Investment Management seeks to maintain a diversified portfolio of equity  
securities of European issuers based on individual stock selection. MSDW        
Investment Management emphasizes a bottom-up approach to investing that seeks to
identify securities of undervalued European issuers.                            

PROCESS                                                                         

MSDW Investment Management selects issuers from a universe of approximately     
2,000 European companies. The investment process is value driven and based on   
individual stock selection. In assessing investment opportunities, MSDW         
Investment Management considers value criteria with an emphasis on cash flow and
the intrinsic value of company assets. Securities which appear undervalued      
according to these criteria are then subjected to in-depth fundamental analysis.
MSDW Investment Management conducts a thorough investigation of the issuer's    
balance sheet, cash flow and income statement and assesses the company's        
business franchise, including product competitiveness, market positioning and   
industry structure. Meetings with senior company management are integral to the 
investment process.                                                             

RISK                                                                            

Investing in the European Equity Portfolio may be appropriate for you if you are
willing to accept the risks and uncertainties of investing in the equity        
securities of European issuers in the hope of earning superior returns and      
diversifying your investment portfolio. In general, prices of equity securities 
are more volatile than those of fixed income securities. The prices of equity   
securities will rise and fall in response to a number of different factors. In  
particular, prices of equity securities will respond to events that affect      
entire financial markets or industries (changes in inflation or consumer demand,
for example) and to events that affect particular issuers (news about the       
success or failure of a new product, for example). In addition, at times the    
Portfolio's market sector, equity securities of European issuers, may           
underperform relative to other sectors.                                         

INVESTING IN FOREIGN COUNTRIES ENTAILS THE RISK THAT NEWS AND EVENTS UNIQUE TO A
COUNTRY OR REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS
WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS      
LOCATED IN THE UNITED STATES. IN ADDITION, THE PORTFOLIO'S INVESTMENTS IN       
FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN FOREIGN CURRENCIES. AS A     
RESULT, CHANGES IN THE VALUE OF A COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR
MAY AFFECT THE VALUE OF THE PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR    
SEPARATELY FROM AND IN RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE
OF THE SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY    
INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN         
TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER, MSDW INVESTMENT    
MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN   
CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING 
SO.                                                                             

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)          
                                      
COMMENCED OPERATIONS ON               
APRIL 2, 1993                         
1994                          10.88%  
1995                          11.85%  
1996                          22.29%  
1997                          17.88%  
1998                          8.09%   
1999                          9.60%   
HIGH (QUARTER)                        
1/98 - 3/98                           
18.37%                                
LOW (QUARTER)                         
7/98 - 9/98                           
-21.00%                               

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]
                                 CLASS A           CLASS B                                            
                               (COMMENCED         (COMMENCED                    MSCI EUROPE           
                              OPERATIONS ON     OPERATIONS ON                     INDEX*              
                             APRIL 2, 1993)    JANUARY 2, 1996)          CLASS A           CLASS B    
                                                                                                      
------------------------------------------------------------------------------------------------------
 PAST ONE YEAR                    9.60%             9.36%                15.89%            15.89%     
------------------------------------------------------------------------------------------------------
 PAST FIVE YEARS                 13.80%              N/A                 22.12%              N/A      
------------------------------------------------------------------------------------------------------
 SINCE INCEPTION                 16.08%             13.79%               19.57%            22.08%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI EUROPE INDEX IS AN UNMANAGED MARKET VALUE WEIGHTED INDEX OF COMMON    
STOCKS LISTED ON THE STOCK EXCHANGE OF COUNTRIES IN EUROPE.                   

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--------------------------                                                      
INVESTMENT SUMMARY                                                              
--------------------------------------------------------------------------------
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Over time, equity securities have generally shown gains       
superior to fixed income securities, although they have tended to be more       
volatile in the short term. Fixed income securities, regardless of credit       
quality, also experience price volatility, especially in response to interest   
rate changes. As a result of price volatility, there is a risk that you may lose
money by investing in a Portfolio.                                              

EMERGING MARKET RISKS                                                           
The Portfolios may invest in emerging market countries, which are countries that
major international financial institutions, such as the World Bank, generally   
consider to be less economically mature than developed nations, such as the     
United States or most nations in Western Europe. Emerging market countries can  
include every nation in the world except the United States, Canada, Japan,      
Australia, New Zealand, and most countries located in Western Europe. Emerging  
market countries may be more likely to experience political turmoil or rapid    
changes in economic conditions than more developed countries, and the financial 
condition of issuers in emerging market countries may be more precarious than in
other countries. These characteristics result in greater risk of price          
volatility in emerging market countries, which may be heightened by currency    
fluctuations relative to the U.S. dollar.                                       
DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its cash or liquid securities to cover its obligations under those    
instruments. At certain levels, this can cause the Portfolio to lose flexibility
in managing its investments properly, responding to shareholder redemption      
requests, or meeting other obligations. If a Portfolio is in that position, it  
could be forced to sell other securities that it wanted to retain.              

A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

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INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, each Portfolio may invest without limit in certain
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect a Portfolio's performance and   
the Portfolio may not achieve its investment objective.                         
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders.                   

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FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares, with the exception of the International Small Cap Portfolio which
may charge a transaction fee of up to 0.50%, payable to the Portfolio, in       
connection with each purchase and redemption. The transaction fee is intended to
allocate transaction costs associated with purchases and redemptions of shares  
of the Portfolio to investors actually making such purchases and redemptions    
rather than to the Portfolio's other shareholders. The fee represents MSDW      
Investment Management's estimate of the cost of acquiring and disposing of      
Portfolio securities. The Annual Fund Operating Expenses in the table below do  
not reflect voluntary fee waivers, which are described in the footnotes below,  
and/ or expense reimbursements from MSDW Investment Management.                 

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                                  GLOBAL       INTERNATIONAL      INTERNATIONAL       EUROPEAN   
                                  EQUITY           EQUITY           SMALL CAP          EQUITY    
                                 PORTFOLIO       PORTFOLIO          PORTFOLIO         PORTFOLIO  
                                                                                                 
                                -----------------------------------------------------------------
MANAGEMENT FEES                                                                                  
-------------------------------------------------------------------------------------------------
 CLASS A                           0.80%           0.80%              0.95%             0.80%    
-------------------------------------------------------------------------------------------------
 CLASS B                           0.80%           0.80%               N/A              0.80%    

12b-1 FEE                                                                                        
-------------------------------------------------------------------------------------------------
 CLASS A                           NONE             NONE               NONE             NONE     
-------------------------------------------------------------------------------------------------
 CLASS B                           0.25%           0.25%               N/A              0.25%    

OTHER EXPENSES                                                                                   
-------------------------------------------------------------------------------------------------
 CLASS A                           0.26%           0.21%              0.25%             0.42%    
-------------------------------------------------------------------------------------------------
 CLASS B                           0.26%           0.21%               N/A              0.43%    

TOTAL ANNUAL FUND OPERATING EXPENSES                                                             
-------------------------------------------------------------------------------------------------
 CLASS A                           1.06%           1.01%              1.20%             1.22%    
-------------------------------------------------------------------------------------------------
 CLASS B                           1.31%           1.26%               N/A              1.48%    

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE HIGHEST
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIOS SO THAT TOTAL ANNUAL OPERATING EXPENSES, EXCLUDING     
CERTAIN INVESTMENT RELATED EXPENSES DESCRIBED BELOW, WILL NOT EXCEED 1.00% FOR  
CLASS A SHARES AND 1.25% FOR CLASS B SHARES OF THE GLOBAL EQUITY, INTERNATIONAL 
EQUITY AND EUROPEAN EQUITY PORTFOLIOS AND 1.15% FOR CLASS A SHARES OF THE       
INTERNATIONAL SMALL CAP PORTFOLIO.                                              

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR A PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED       
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIOS SHOWN ABOVE.             

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE  
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS WERE 1.00% FOR CLASS A SHARES AND
1.25% FOR CLASS B SHARES OF THE GLOBAL EQUITY AND INTERNATIONAL EQUITY          
PORTFOLIOS AND 1.15% FOR CLASS A SHARES OF THE INTERNATIONAL SMALL CAP          
PORTFOLIO. THE TOTAL OPERATING EXPENSES INCURRED BY INVESTORS, INCLUDING CERTAIN
INVESTMENT RELATED EXPENSES, WERE 1.09% FOR CLASS A SHARES AND 1.34% FOR        
CLASS B SHARES OF THE EUROPEAN EQUITY PORTFOLIO. EXCLUDING INVESTMENT RELATED   
EXPENSES, THE OPERATING EXPENSES AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS
WERE 1.00% FOR CLASS A SHARES AND 1.25% FOR CLASS B SHARES OF THE EUROPEAN      
EQUITY PORTFOLIO.                                                               

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    

The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
GLOBAL EQUITY PORTFOLIO                                                                             
----------------------------------------------------------------------------------------------------
 CLASS A                               $108             $337              $585              $1,294  
----------------------------------------------------------------------------------------------------
 CLASS B                               $133             $415              $718              $1,579  

INTERNATIONAL EQUITY PORTFOLIO                                                                      
----------------------------------------------------------------------------------------------------
 CLASS A                               $103             $322              $558              $1,236  
----------------------------------------------------------------------------------------------------
 CLASS B                               $128             $400              $692              $1,523  

INTERNATIONAL SMALL CAP PORTFOLIO                                                                   
----------------------------------------------------------------------------------------------------
 CLASS A                               $326             $593              $880              $1,700  

EUROPEAN EQUITY PORTFOLIO                                                                           
----------------------------------------------------------------------------------------------------
 CLASS A                               $124             $387              $670              $1,477  
----------------------------------------------------------------------------------------------------
 CLASS B                               $151             $468              $808              $1,768  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its            

three primary businesses -- securities, asset management and credit services. At
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies (with MSDW Investment Management, the  
"MSDW Investment Management Group"), managed assets of approximately $184.8     
billion, including assets under fiduciary advice.                               

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                         GLOBAL             INTERNATIONAL         INTERNATIONAL           EUROPEAN      
                                         EQUITY                EQUITY               SMALL CAP              EQUITY       
                                        PORTFOLIO             PORTFOLIO             PORTFOLIO             PORTFOLIO     
                                                                                                                        
                                        --------------------------------------------------------------------------      
MANAGEMENT FEE                     CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B 
                                   -------------------------------------------------------------------------------------
PAID IN FISCAL YEAR ENDED                                                                                               
DECEMBER 31, 1999                   0.75%      0.75%      0.79%      0.79%      0.90%       N/A       0.67%      0.67%  
(NET OF WAIVERS AND AS A                                                                                                
PERCENTAGE OF AVERAGE NET ASSETS)                                                                                       

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--------------------------------------------------------------------------------
PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

SUBJECT TO THE SUPERVISION OF MSDW INVESTMENT MANAGEMENT AND ITS INVESTMENT     
MANAGEMENT COMMITTEE EACH PORTFOLIO IS MANAGED BY AN INVESTMENT TEAM COMPRISED  
OF THE FOLLOWING INDIVIDUALS, EACH OF WHOM IS EMPLOYED BY A MEMBER OF THE MSDW  
INVESTMENT MANAGEMENT GROUP:                                                    

----------------------------------------------------------------------------    
GLOBAL EQUITY PORTFOLIO                                                         

FRANCES CAMPION, MANAGING DIRECTOR, RICHARD BOON, PRINCIPAL AND PAUL BOYNE,     
PRINCIPAL                                                                       

Frances Campion joined MSDW Investment Management Group in 1990 as a Global     
Equity Fund Manager. Her responsibilities include day-to-day management of the  
Global Equity product. Ms. Campion is a graduate of University College, Dublin. 
Richard Boon joined MSDW Investment Management Group in 1995. In addition to    
portfolio management, his responsibilities include security analysis on North   
American equities. Prior to 1995, he spent seven years in investment banking    
working on privatizations in both the U.K. and New Zealand. Mr. Boon is a       
graduate of both Canterbury and Victoria Universities, New Zealand. Paul Boyne, 
prior to joining MSDW Investment Management Group in 1993, was a Chartered      
Accountant with Grant Thornton International in Dublin. Mr. Boyne is a graduate 
of University College, Dublin.                                                  

INTERNATIONAL EQUITY PORTFOLIO                                                  

DOMINIC CALDECOTT, MANAGING DIRECTOR, PETER WRIGHT, MANAGING DIRECTOR, WILLIAM  
LOCK, PRINCIPAL, KATE CORNISH-BOWDEN, PRINCIPAL AND WALTER RIDDELL, RESEARCH    
ANALYST                                                                         

Dominic Caldecott is the Chief Investment Officer of Morgan Stanley Dean Witter 
Investment Management Limited. Prior to joining Morgan Stanley in 1986, he      
worked with GT Management Group in Tokyo and Hong Kong, specializing in Pacific 
Basin investment management. Mr. Caldecott is a graduate of New College, Oxford,
England. Peter Wright joined MSDW Investment Management Group in 1996 as a      
Senior Portfolio Manager with the Core International Equity Program. From 1993  
to 1996 he was an Investment Director and Portfolio Manager with the State of   
Wisconsin Investment Board responsible for managing the agency's $2.5 billion   
International Equity portfolio. Mr. Wright is a graduate of Victoria University 
of Wellington, New Zealand. William Lock joined MSDW Investment Management Group
in 1994 as an Equity Analyst with principal responsibility for international    
equity research and selection. Prior to 1994, he was a member of CS First       
Boston's Corporate Finance Group and a Management Consultant with Arthur D.     
Little. Mr. Lock graduated from Keble College, Oxford. Kate Cornish-Bowden      
joined MSDW Investment Management Group in 1992, prior to which she was a       
Research Analyst for M&G Investment Management where her primary                
responsibilities were equity research and selection. Her responsibilities       
include fundamental International Equity research and selection. Ms.            
Cornish-Bowden graduated from Leicester University with an Economics degree and 
holds an M.B.A. from the University of Nottingham. Walter Riddell joined MSDW   
Investment Management Group in 1995 as a member of the International Team. Mr.  
Riddell graduated from Oxford in 1995 with a History degree.                    

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INTERNATIONAL SMALL CAP PORTFOLIO                                               

MARGARET NAYLOR, MANAGING DIRECTOR, WILLEM VINKE, PRINCIPAL, NATHALIE DEGANS,   
PRINCIPAL AND ARTHUR POLLOCK                                                    

Margaret Naylor has overall responsibility for investment strategy and stock    
selection for the International Small Cap program. Prior to joining MSDW        
Investment Management Group in 1987, she spent three years at the Trade Policy  
Research Centre, an independent research unit. Ms. Naylor is a graduate of the  
University of York. Willem Vinke joined MSDW Investment Management Group in     
1995. Prior to 1995, he worked for Morgan Stanley's Investment Banking and Fixed
Income Divisions. Mr. Vinke is a graduate of the University of Manchester and   
the London School of Economics. Nathalie Degans joined MSDW Investment          
Management Group in 1996. From 1993 to 1995 she worked in Morgan Stanley's      
Corporate Treasury Division, and prior to that, she was with Banque Indosuez New
York from 1986 to 1992. Ms. Degans is a graduate of ISG, France and INSEAD,     
France. Arthur Pollock joined MSDW Investment Management Group in 1999. Prior to
1999, he was a partner at DPM Partners from 1998 to 1999 working on Japanese    
equity research. From 1996 to 1998 he was a portfolio manager at Metlife.       

EUROPEAN EQUITY PORTFOLIO                                                       

MARGARET NAYLOR, MANAGING DIRECTOR, ALASTAIR ANDERSON, VICE PRESIDENT AND AMR   
DIAB, VICE PRESIDENT                                                            

Information about Margaret Naylor is included under the International Small Cap 
Portfolio above. Alastair Anderson joined MSDW Investment Management Group in   
1994. Prior to 1994, he worked for Deloitte & Touche LLP. Mr. Anderson is a     
commerce graduate of the University of Cape Town, South Africa. Amr Diab joined 
MSDW Investment Management Group in 1997. From 1993 to 1997, he worked in Morgan
Stanley Dean Witter & Co.'s Investment Banking Division and strategic planning  
team in New York. Prior to that time, he worked as a Business Development       
Manager with Projects and Investment Consulting Co. from 1992 to 1993. Mr. Diab 
is a graduate of the American University in Cairo, Egypt.                       

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

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--------------------------------------------------------------------------------
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of the Portfolio is  
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolios as of the close of the New York Stock     
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The Portfolios do not charge any sales loads or similar fees when you purchase  
or redeem shares, with the exception of the International Small Cap Portfolio   
which may charge up to a 0.50% transaction fee, payable to the Portfolio, in    
connection with each purchase and redemption. The minimum initial investment    
generally is $500,000 for Class A shares and $100,000 for Class B shares of each
Portfolio. The minimum additional investment generally is $1,000 for each       
account that you have. If the value of your account falls below the minimum     
initial investment amount for Class A shares or Class B shares as a result of   
share redemptions, the Fund will notify you. Your account may be subject to     
involuntary conversion from Class A shares to Class B shares or involuntary     
redemption in the case of Class B shares if the value of your account remains   
below the minimum initial investment amount for 60 consecutive days. MSDW       
Investment Management may waive the minimum initial investment and involuntary  
conversion or redemption features for certain investors, including individuals  
purchasing through a Financial Intermediary.                                    

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            

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HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, a Portfolio may pay redemption proceeds by a distribution-in-kind 
of readily marketable portfolio securities.                                     

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

DIVIDENDS AND DISTRIBUTIONS                                                     

Each Portfolio's policy is to distribute to shareholders substantially all of   
its taxable net investment income in the form of an annual dividend and to      
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           

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TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. A Portfolio may be able to    
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
GLOBAL EQUITY PORTFOLIO                                                         
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                             CLASS A                         
                                                     ------------------------------------------------------- 
                                                                     YEAR ENDED DECEMBER 31,                 
                                                     ------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                     1999        1998         1997       1996       1995   
                                                                                                             
------------------------------------------------------------------------------------------------------------ 
NET ASSET VALUE, BEGINNING OF PERIOD                 $  20.74    $   18.52    $  16.24    $ 14.31    $ 13.40 
                                                     --------    ---------    --------    -------    ------- 
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME (1)                               0.44         0.15        0.21       0.23       0.18 
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS         0.32         2.55        3.61       3.02       2.26 
                                                     --------    ---------    --------    -------    ------- 
    TOTAL FROM INVESTMENT OPERATIONS                     0.76         2.70        3.82       3.25       2.44 
                                                     --------    ---------    --------    -------    ------- 
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                                  (0.38)       (0.17)      (0.40)     (0.23)     (0.22)
 IN EXCESS OF NET INVESTMENT INCOME                     (0.06)          --          --         --         -- 
 NET REALIZED GAIN                                      (2.74)       (0.31)      (1.14)     (1.09)     (1.31)
                                                     --------    ---------    --------    -------    ------- 
    TOTAL DISTRIBUTIONS                                 (3.18)       (0.48)      (1.54)     (1.32)     (1.53)
                                                     --------    ---------    --------    -------    ------- 
NET ASSET VALUE, END OF PERIOD                       $  18.32    $   20.74    $  18.52    $ 16.24    $ 14.31 
                                                     ========    =========    ========    =======    ======= 
TOTAL RETURN                                             4.01%       14.60%      23.75%     22.83%     18.66%
                                                     ========    =========    ========    =======    ======= 
RATIO AND SUPPLEMENTAL DATA:                                                                                 
NET ASSETS, END OF PERIOD (THOUSANDS)                $115,646    $ 228,748    $108,074    $80,297    $91,675 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)              1.01%        1.00%       1.00%      1.00%      1.00%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                                
  ASSETS (1)                                             1.26%        0.96%       1.07%      1.38%      1.17%
PORTFOLIO TURNOVER RATE                                    41%          39%         30%        26%        28%
-----------------                                                                                            
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                            
     THE PERIOD:                                                                                             
     PER SHARE BENEFIT TO NET INVESTMENT INCOME         $0.02        $0.01       $0.02      $0.03      $0.02 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                         
     EXPENSES TO AVERAGE NET ASSETS                      1.06%        1.07%       1.11%      1.15%      1.13%
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS         1.20%        0.90%       0.96%      1.23%      1.04%
------------------------------------------------------------------------------------------------------------ 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                   
                                                               ---------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,        1996*** TO  
                                                               ----------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                              1999       1998       1997         1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                           $ 20.63    $ 18.46    $16.21       $14.36    
                                                               -------    -------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                        0.21       0.15      0.16         0.13    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                  0.50       2.46      3.60         3.02    
                                                               -------    -------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              0.71       2.61      3.76         3.15    
                                                               -------    -------    ------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                           (0.35)     (0.13)    (0.37)       (0.21)   
 IN EXCESS OF NET INVESTMENT INCOME                              (0.05)        --        --           --    
 NET REALIZED GAIN                                               (2.74)     (0.31)    (1.14)       (1.09)   
                                                               -------    -------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (3.14)     (0.44)    (1.51)       (1.30)   
                                                               -------    -------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                 $ 18.20    $ 20.63    $18.46       $16.21    
                                                               =======    =======    ======       ======    
TOTAL RETURN                                                      3.75%     14.15%    23.37%       22.04%   
                                                               =======    =======    ======       ======    
RATIO AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)                          $28,089    $13,123    $5,910       $3,928    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       1.26%      1.25%     1.25%        1.25%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          0.89%      0.68%     0.80%        1.29%** 
PORTFOLIO TURNOVER RATE                                             41%        39%       30%          26%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.01      $0.01     $0.02        $0.01    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                               1.31%      1.32%     1.36%        1.39%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  0.83%      0.62%     0.69%        1.15%** 
------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                    
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
INTERNATIONAL EQUITY PORTFOLIO                                                  
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                         CLASS A                             
                                              -------------------------------------------------------------- 
                                                                 YEAR ENDED DECEMBER 31,                     
                                              -------------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS               1999         1998         1997         1996         1995    
                                                                                                             
------------------------------------------------------------------------------------------------------------ 
NET ASSET VALUE, BEGINNING OF PERIOD          $    18.25   $    17.16   $    16.95   $    15.15   $    15.34 
                                              ----------   ----------   ----------   ----------   ---------- 
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME (1)                          0.24         0.27         0.30         0.25         0.16 
 NET REALIZED AND UNREALIZED GAIN ON                                                                         
   INVESTMENTS                                      2.80         2.86         2.01         2.71         1.55 
                                              ----------   ----------   ----------   ----------   ---------- 
    TOTAL FROM INVESTMENT OPERATIONS                3.04         3.13         2.31         2.96         1.71 
                                              ----------   ----------   ----------   ----------   ---------- 
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                             (0.18)       (0.38)       (0.48)       (0.36)       (0.06)
 NET REALIZED GAIN                                 (1.49)       (1.66)       (1.62)       (0.80)       (1.84)
                                              ----------   ----------   ----------   ----------   ---------- 
    TOTAL DISTRIBUTIONS                            (1.67)       (2.04)       (2.10)       (1.16)       (1.90)
                                              ----------   ----------   ----------   ----------   ---------- 
NET ASSET VALUE, END OF PERIOD                $    19.62   $    18.25   $    17.16   $    16.95   $    15.15 
                                              ==========   ==========   ==========   ==========   ========== 
TOTAL RETURN                                       16.91%       18.30%       13.91%       19.64%       11.77%
                                              ==========   ==========   ==========   ==========   ========== 
RATIOS AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)         $4,630,035   $3,400,498   $2,822,900   $2,264,424   $1,598,530 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)         1.00%        1.00%        1.00%        1.00%        1.00%
RATIO OF NET INVESTMENT INCOME TO AVERAGE                                                                    
  NET ASSETS (1)                                    1.28%        1.33%        1.49%        1.64%        1.38%
PORTFOLIO TURNOVER RATE                               37%          33%          33%          18%          27%
-----------------                                                                                            
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                   
      DURING THE PERIOD:                                                                                     
     PER SHARE BENEFIT TO NET INVESTMENT                                                                     
       INCOME                                      $0.00+       $0.00+       $0.00+       $0.00       $0.003 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                         
     EXPENSES TO AVERAGE NET ASSETS                 1.01%        1.02%        1.02%        1.02%        1.03%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                    
       ASSETS                                       1.27%        1.32%        1.47%        1.61%        1.35%
------------------------------------------------------------------------------------------------------------ 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                   
                                                               ---------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,        1996*** TO  
                                                               ----------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                              1999       1998       1997         1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                           $ 18.22    $ 17.13    $16.93       $15.24    
                                                               -------    -------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                        0.19       0.24      0.23         0.23    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                  2.81       2.85      2.02         2.59    
                                                               -------    -------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              3.00       3.09      2.25         2.82    
                                                               -------    -------    ------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                           (0.15)     (0.34)    (0.43)       (0.33)   
 NET REALIZED GAIN                                               (1.49)     (1.66)    (1.62)       (0.80)   
                                                               -------    -------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (1.64)     (2.00)    (2.05)       (1.13)   
                                                               -------    -------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                 $ 19.58    $ 18.22    $17.13       $16.93    
                                                               =======    =======    ======       ======    
TOTAL RETURN                                                     16.68%     18.13%    13.57%       18.58%   
                                                               =======    =======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                          $41,374    $17,076    $3,074       $5,393    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       1.25%      1.25%     1.25%        1.25%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          0.93%      0.96%     1.21%        1.68%** 
PORTFOLIO TURNOVER RATE                                             37%        33%       33%          18%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE                                                       
   PERIOD:                                                                                                  
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.00+     $0.00+    $0.00+       $0.00    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                               1.26%      1.28%     1.27%        1.27%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  0.92%      0.95%     1.19%        1.66%** 
------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
INTERNATIONAL SMALL CAP PORTFOLIO                                               
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                           CLASS A                          
                                                   -------------------------------------------------------- 
                                                                   YEAR ENDED DECEMBER 31,                  
                                                   -------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                   1999        1998        1997        1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD               $  15.25    $  15.61    $  16.83    $  14.94    $  15.15 
                                                   --------    --------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                             0.22        0.22        0.25        0.21        0.24 
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                                 
   INVESTMENTS                                         5.66        0.39       (0.42)       2.29*       0.15*
                                                   --------    --------    --------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                   5.88        0.61       (0.17)       2.50        0.39 
                                                   --------    --------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                (0.27)      (0.24)      (0.31)      (0.22)      (0.23)
 IN EXCESS OF NET INVESTMENT INCOME                   (0.02)         --       (0.05)         --          -- 
 NET REALIZED GAIN                                    (1.20)      (0.79)      (0.77)      (0.39)      (0.37)
                                                   --------    --------    --------    --------    -------- 
    TOTAL DISTRIBUTIONS                               (1.49)      (1.03)      (1.13)      (0.61)      (0.60)
                                                   --------    --------    --------    --------    -------- 
TRANSACTION FEES                                      (0.03)       0.06        0.08          --          -- 
                                                   --------    --------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                     $  19.67    $  15.25    $  15.61    $  16.83    $  14.94 
                                                   ========    ========    ========    ========    ======== 
TOTAL RETURN                                          39.34%       4.25%      (0.55)%     16.82%       2.60%
                                                   ========    ========    ========    ========    ======== 
RATIO AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)              $357,708    $252,642    $230,095    $234,743    $198,669 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)            1.15%       1.15%       1.15%       1.15%       1.15%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
  ASSETS (1)                                           1.30%       1.23%       1.37%       1.29%       1.72%
PORTFOLIO TURNOVER RATE                                  48%         39%         31%         35%         24%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
      DURING THE PERIOD:                                                                                    
     PER SHARE BENEFIT TO NET INVESTMENT INCOME       $0.01       $0.01       $0.01       $0.01       $0.01 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                    1.20%       1.21%       1.22%       1.23%       1.24%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                   
      ASSETS                                           1.25%       1.18%       1.30%       1.20%       1.63%
----------------------------------------------------------------------------------------------------------- 

  *INCLUDES A 1% TRANSACTION FEE ON PURCHASES AND REDEMPTIONS OF CAPITAL SHARES.

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
EUROPEAN EQUITY PORTFOLIO                                                       
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                            CLASS A                         
                                                    ------------------------------------------------------- 
                                                                    YEAR ENDED DECEMBER 31,                 
                                                    ------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                    1999        1998        1997        1996       1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD                $  15.75    $  17.96    $  16.70    $  13.92    $ 13.94 
                                                    --------    --------    --------    --------    ------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                              0.29        0.43        0.39        0.24       0.14 
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS        1.10        1.08        2.58        2.85       1.37 
                                                    --------    --------    --------    --------    ------- 
    TOTAL FROM INVESTMENT OPERATIONS                    1.39        1.51        2.97        3.09       1.51 
                                                    --------    --------    --------    --------    ------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                 (0.32)      (0.42)      (0.37)      (0.25)     (0.15)
 IN EXCESS OF NET INVESTMENT INCOME                    (0.03)         --          --       (0.02)        -- 
 NET REALIZED GAIN                                     (1.70)      (3.30)      (1.34)      (0.04)     (1.38)
                                                    --------    --------    --------    --------    ------- 
    TOTAL DISTRIBUTIONS                                (2.05)      (3.72)      (1.71)      (0.31)     (1.53)
                                                    --------    --------    --------    --------    ------- 
NET ASSET VALUE, END OF PERIOD                      $  15.09    $  15.75    $  17.96    $  16.70    $ 13.92 
                                                    ========    ========    ========    ========    ======= 
TOTAL RETURN                                            9.60%       8.09%      17.88%      22.29%     11.85%
                                                    ========    ========    ========    ========    ======= 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)               $105,030    $168,712    $242,868    $178,356    $69,583 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)             1.09%       1.00%       1.00%       1.00%      1.00%
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                                     
  EXCLUDING INTEREST EXPENSE                            1.00%        N/A         N/A         N/A        N/A 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
  ASSETS (1)                                            1.46%       1.47%       1.96%       1.83%      1.37%
PORTFOLIO TURNOVER RATE                                   74%         52%         43%         24%        13%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
      DURING THE PERIOD:                                                                                    
     PER SHARE BENEFIT TO NET INVESTMENT INCOME        $0.03       $0.02       $0.02       $0.02      $0.03 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                     1.22%       1.08%       1.09%       1.16%      1.25%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                   
       ASSETS                                           1.34%       1.40%       1.87%       1.67%      1.12%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                  
                                                                -------------------------------------------
                                                                                               PERIOD FROM 
                                                                                               JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,       1996*** TO  
                                                                --------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                               1999      1998      1997         1996     
                                                                                                           
-----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $15.74    $17.94    $16.67       $14.05    
                                                                ------    ------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                          
 NET INVESTMENT INCOME (2)                                        0.12      0.33      0.28         0.18    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                  1.23      1.13      2.66         2.73    
                                                                ------    ------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              1.35      1.46      2.94         2.91    
                                                                ------    ------    ------       ------    
DISTRIBUTIONS                                                                                              
 NET INVESTMENT INCOME                                           (0.26)    (0.36)    (0.33)       (0.23)   
 IN EXCESS OF NET INVESTMENT INCOME                              (0.02)       --        --        (0.02)   
 NET REALIZED GAIN                                               (1.70)    (3.30)    (1.34)       (0.04)   
                                                                ------    ------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (1.98)    (3.66)    (1.67)       (0.29)   
                                                                ------    ------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                  $15.11    $15.74    $17.94       $16.67    
                                                                ======    ======    ======       ======    
TOTAL RETURN                                                      9.36%     7.80%    17.73%       20.76%   
                                                                ======    ======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                              
NET ASSETS, END OF PERIOD (THOUSANDS)                           $2,196    $5,181    $4,654       $2,654    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       1.34%     1.25%     1.25%        1.25%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                                    
  EXCLUDING INTEREST EXPENSE                                      1.25%      N/A       N/A          N/A    
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          1.30%     1.15%     1.55%        1.67%** 
PORTFOLIO TURNOVER RATE                                             74%       52%       43%          24%   
-----------------                                                                                          
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE                                                      
   PERIOD:                                                                                                 
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.01     $0.02     $0.02        $0.02    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                       
     EXPENSES TO AVERAGE NET ASSETS                               1.48%     1.34%     1.34%        1.40%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  1.16%     1.08%     1.46%        1.52%** 
-----------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            

17                                                            

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                                                                [Download Table]
                                                                              
                                                     GLOBAL EQUITY PORTFOLIO  
                                                     INTERNATIONAL EQUITY     
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER      PORTFOLIO                
INSTITUTIONAL FUND, INC.                             INTERNATIONAL SMALL CAP  
                                                     PORTFOLIO                
                                                     EUROPEAN EQUITY PORTFOLIO

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

                                                        [Enlarge/Download Table]
                                                                                                    
--------------------------------------------------------------------------------------------------  

                                                        [Enlarge/Download Table]
                                                                                       
  Type of Registration: / / Incorporated/ / Unincorporated Association/ / Partnership  
/ / Uniform Gift/Transfer to Minor                                                     
    (ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                           
/ / Trust ------ / / Other (SPECIFY) ------                                            

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                     HOME TELEPHONE NUMBER BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

          --------------------------------- OR
       ---------------------------------
            TAXPAYER IDENTIFICATION NUMBER ("TIN")
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

          --------------------------------- OR
       ---------------------------------
            TAXPAYER IDENTIFICATION NUMBER ("TIN")
    SOCIAL SECURITY NUMBER ("SSN")

          --------------------------------- OR
       ---------------------------------
            TAXPAYER IDENTIFICATION NUMBER ("TIN")
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                          Class A shares minimum $500,000 for each Portfolio and
                          Class B shares minimum $100,000 for the Global Equity,
                        International Equity and European Equity Portfolios.
                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                          
          GLOBAL EQUITY PORTFOLIO  / / Class A Shares (070)  $---------  / / Class B Shares (043) $ ------
   INTERNATIONAL EQUITY PORTFOLIO  / / Class A Shares (063)  $---------  / / Class B Shares (038) $ ------
INTERNATIONAL SMALL CAP PORTFOLIO  / / Class A Shares (073)  $---------                                   
        EUROPEAN EQUITY PORTFOLIO  / / Class A Shares (075)  $---------  / / Class B Shares (047) $ ------
                                   Total Initial Investment    $                                          

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
           ---------------------------------------
                             NAME OF PORTFOLIO        ACCOUNT NUMBER

      Account previously established by:

  / / Phone exchange / / Wire on
           ---------------------------------------
           ---------------------------------------
                                     DATE                         ACCOUNT NUMBER
                                               (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                              
/ /  I/we hereby authorize the Fund and its agents to                                         
     honor any telephone requests to wire redemption                                          
     proceeds to the commercial bank indicated at right                                       
     and/or mail redemption proceeds to the name and                                          
     address in which my/our fund account is registered  --------                             
     if such requests are believed to be authentic.      NAME OF COMMERCIAL BANK (NOT SAVINGS 
     The Fund and the Fund's Transfer Agent will employ  BANK)                                
     reasonable procedures to confirm that instructions  --------                             
     communicated by telephone are genuine. These        BANK ACCOUNT NUMBER                  
     procedures include requiring the investor to        --------                             
     provide certain personal identification             BANK ABA NUMBER                      
     information at the time an account is opened and    --------                             
     prior to effecting each transaction requested by    NAME(S) IN WHICH YOUR BANK ACCOUNT IS
     telephone. In addition, all telephone transaction   ESTABLISHED                          
     requests will be recorded and investors may be      --------                             
     required to provide additional telecopied written   BANK'S STREET ADDRESS                
     instructions of transaction requests. Neither the   --------                             
     Fund nor the Transfer Agent will be responsible     CITY STATE ZIP CODE                  
     for any loss, liability, cost or expense for                                             
     following instructions received by telephone that                                        
     it reasonably believes to be genuine.                                                    

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                  CITY                          STATE ZIP CODE
DEALER INFORMATION                                      

                      --------------------------------------------------
                        REPRESENTATIVE NAME  REPRESENTATIVE NUMBER    BRANCH
NUMBER                      
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
           ---------------------------------------
           ---------------------------------------
SIGNATURE     DATE          
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at             
"http://www.sec.gov"; or (3) By mail: you may request documents, upon payment of
a duplicating fee, by writing to the Securities and Exchange Commission, Public 
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

GLOBAL FIXED INCOME PORTFOLIO                                                   
THE GLOBAL FIXED INCOME PORTFOLIO SEEKS TO PRODUCE AN ATTRACTIVE REAL RATE OF   
RETURN WHILE PRESERVING CAPITAL BY INVESTING PRIMARILY IN HIGH QUALITY FIXED    
INCOME SECURITIES OF ISSUERS THROUGHOUT THE WORLD, INCLUDING U.S. ISSUERS.      

HIGH YIELD PORTFOLIO                                                            
THE HIGH YIELD PORTFOLIO SEEKS TO MAXIMIZE TOTAL RETURN BY INVESTING PRIMARILY  
IN A DIVERSIFIED PORTFOLIO OF HIGH YIELD FIXED INCOME SECURITIES THAT OFFER A   
YIELD ABOVE THAT GENERALLY AVAILABLE ON DEBT SECURITIES IN THE FOUR HIGHEST     
RATING CATEGORIES OF THE RECOGNIZED RATING SERVICES.                            

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"). 

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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TABLE OF CONTENTS                                            PAGE               
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     GLOBAL FIXED INCOME PORTFOLIO                             1 
     HIGH YIELD PORTFOLIO                                      2 
     ADDITIONAL RISK FACTORS AND INFORMATION                   3 
FEES AND EXPENSES OF THE PORTFOLIOS                            5 
INVESTMENT ADVISER                                             6 
MANAGEMENT FEES                                                6 
PORTFOLIO MANAGERS                                             7 
DISTRIBUTION OF PORTFOLIO SHARES                               8 
SHAREHOLDER INFORMATION                                        8 
FINANCIAL HIGHLIGHTS                                          10 
     GLOBAL FIXED INCOME PORTFOLIO                            11 
     HIGH YIELD PORTFOLIO                                     12 
ACCOUNT REGISTRATION FORM                                        

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INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
GLOBAL FIXED INCOME PORTFOLIO                                                   
------------------------------------------------------------------------------- 

THE GLOBAL FIXED INCOME PORTFOLIO SEEKS TO PRODUCE AN ATTRACTIVE REAL RATE OF   
RETURN WHILE PRESERVING CAPITAL BY INVESTING PRIMARILY IN HIGH QUALITY FIXED    
INCOME SECURITIES OF ISSUERS THROUGHOUT THE WORLD, INCLUDING U.S. ISSUERS.      
----------------------------------------------------------------------------    

APPROACH                                                                        

MSDW Investment Management seeks to produce an attractive return by constructing
a portfolio of fixed income securities from throughout the world. MSDW          
Investment Management manages interest rate, country, and currency exposures by 
a strategic, value-based approach that favors securities with high real interest
rates and sizable incremental yield at longer maturities. MSDW Investment       
Management seeks to preserve capital by investing in high quality (i.e., those  
rated in the three highest rating categories or believed to be of equivalent    
quality) fixed income securities.                                               

PROCESS                                                                         

MSDW Investment Management assesses real interest rates, inflationary trends and
yield curves in the global fixed income markets and combines this with a        
separate currency analysis that focuses on relative interest rate differentials 
and economic competitiveness. MSDW Investment Management then seeks to establish
overweight positions in markets that offer the most attractive yield curves and 
the highest yields over and above future inflation. The Portfolio generally     
invests in fixed income securities having intermediate maturities (remaining    
maturities between 3 and 7 years) as a starting point, then shifts to longer    
maturities where real yields are attractive and shorter maturities where they   
are less attractive. The Portfolio generally emphasizes investment in securities
of U.S. and foreign governments and their agencies and instrumentalities, and   
may invest in other fixed income securities rated in the three highest rating   
categories of a nationally recognized statistical rating organization or that   
MSDW Investment Management believes to be of equivalent quality.                

RISK                                                                            
Investing in the Global Fixed Income Portfolio may be appropriate for you if you
are willing to accept the risks and uncertainties of investing in fixed income  
securities of U.S. and foreign issuers, many of which may be denominated in     
foreign currencies, in the hope of earning an attractive rate of return. Market 
prices of fixed income securities respond to economic developments, especially  
changes in interest rates, as well as to perceptions of the creditworthiness of 
individual issuers, including governments. Generally, fixed income securities   
decrease in value as interest rates rise and vice versa. Prices of longer term  
fixed income securities also are generally more volatile, so the average        
maturity of the securities in the Portfolio affects risk. In addition, at times 
the Portfolio's market sector, global fixed income securities, may underperform 
relative to other sectors.                                                      

TO THE EXTENT THAT THE PORTFOLIO INVESTS IN FOREIGN COUNTRIES, PARTICULARLY     
EMERGING MARKETS, THERE IS THE RISK THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR 
REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS WILL NOT  
NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS LOCATED IN THE
UNITED STATES. IN ADDITION, THE PORTFOLIO'S INVESTMENTS IN FOREIGN COUNTRIES    
GENERALLY WILL BE DENOMINATED IN FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE
VALUE OF A COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE  
OF THE PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR SEPARATELY FROM AND IN  
RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE OF THE SECURITY IN THE
ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY INVEST IN CERTAIN         
INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN TECHNIQUES, SUCH AS       
HEDGING, TO MANAGE THESE RISKS. HOWEVER, MSDW INVESTMENT MANAGEMENT CANNOT      
GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN CERTAIN MARKETS OR  
UNDER PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING SO. IN ADDITION,   
THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED.                                                 

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)             
                                         
COMMENCED OPERATIONS ON MAY              
1, 1991                                  
1992                               2.74% 
1993                               15.34%
1994                               -6.08%
1995                               19.32%
1996                               6.44% 
1997                               1.50% 
1998                               13.84%
1999                               -6.84%
HIGH (QUARTER)                           
7/98 - 9/98                              
8.07%                                    
LOW (QUARTER)                            
1/98 - 3/98                              
-3.92%                                   

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                    CLASS A          CLASS B                                      
                                  (COMMENCED        (COMMENCED           J.P. MORGAN TRADED       
                                 OPERATIONS ON    OPERATIONS ON          GLOBAL BOND INDEX*       
                                 MAY 1, 1991)    JANUARY 2, 1996)     CLASS A          CLASS B    
                                                                                                  
--------------------------------------------------------------------------------------------------
 PAST ONE YEAR                      -6.84%            -7.09%           -5.08%          -5.08%     
--------------------------------------------------------------------------------------------------
 PAST FIVE YEARS                     6.45%             N/A             6.69%             N/A      
--------------------------------------------------------------------------------------------------
 SINCE INCEPTION                     6.38%            3.22%            7.62%            3.76%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE J.P. MORGAN TRADED GLOBAL BOND INDEX IS AN UNMANAGED INDEX OF SECURITIES   
AND INCLUDES AUSTRALIA, BELGIUM, CANADA, DENMARK, FINLAND, FRANCE, GERMANY,   
IRELAND, ITALY, JAPAN, THE NETHERLANDS, NEW ZEALAND, PORTUGAL, SOUTH AFRICA,  
SPAIN, SWEDEN, THE UNITED KINGDOM AND THE UNITED STATES.                      

1                                                             

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INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
HIGH YIELD PORTFOLIO                                                            
------------------------------------------------------------------------------- 

THE HIGH YIELD PORTFOLIO SEEKS TO MAXIMIZE TOTAL RETURN BY INVESTING PRIMARILY  
IN A DIVERSIFIED PORTFOLIO OF HIGH YIELD FIXED INCOME SECURITIES THAT OFFER A   
YIELD ABOVE THAT GENERALLY AVAILABLE ON DEBT SECURITIES IN THE FOUR HIGHEST     
RATING CATEGORIES OF THE RECOGNIZED RATING SERVICES.                            
----------------------------------------------------------------------------    
APPROACH                                                                        

The Portfolio invests primarily in high yield securities (commonly referred to  
as "junk bonds"). The Portfolio also may invest in other fixed income           
securities, including U.S. Government securities, mortgage-backed securities,   
and investment grade corporate bonds. The Portfolio may also invest in foreign  
fixed income securities, including emerging market securities. MSDW Investment  
Management will generally use derivatives in managing the Portfolio.            

PROCESS                                                                         

MSDW Investment Management uses equity and fixed income valuation techniques,   
together with analyses of economic and industry trends, to determine the        
Portfolio's overall structure, sector allocation and desired maturity. MSDW     
Investment Management emphasizes securities of companies that have strong       
industry positions and favorable outlooks for cash flow and asset values. MSDW  
Investment Management conducts a credit analysis for each security considered   
for investment to evaluate its attractiveness relative to the level of risk it  
presents.                                                                       

RISK                                                                            
Investing in the High Yield Portfolio may be appropriate for you if you are     
willing to accept the risks and uncertainties of investing in non-investment    
grade fixed income securities of U.S. and foreign issuers in the hope of earning
a return that is superior to that available from investment grade fixed income  
securities. Market prices of fixed income securities respond to economic        
developments, especially changes in interest rates, as well as to perceptions of
the creditworthiness of individual issuers, including governments. Generally,   
fixed income securities decrease in value as interest rates rise and vice versa.
The Portfolio invests in fixed income securities that are rated below           
"investment grade" or are not rated, but are of equivalent quality. These fixed 
income securities are often referred to as "high yield securities" or "junk     
bonds." High yield securities range from those for which the prospect for       
repayment of principal and interest is predominantly speculative to those which 
are currently in default on principal or interest payments. When the Portfolio  
invests in high yield securities, it generally seeks to receive a               
correspondingly higher return on the securities it holds to compensate it for   
the additional credit risk and market risk it has assumed, however, prices of   
high yield securities generally are more volatile than prices of investment     
grade fixed income securities. Prices of longer term fixed income securities    
also are generally more volatile, so the average maturity of the securities in  
the Portfolio affects risk. In addition, at times the Portfolio's market sector,
high yield securities, may underperform relative to other sectors.              

TO THE EXTENT THAT THE PORTFOLIO INVESTS IN FOREIGN COUNTRIES, PARTICULARLY     
EMERGING MARKETS, THERE IS THE RISK THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR 
REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS WILL NOT  
NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS LOCATED IN THE
UNITED STATES. IN ADDITION, THE PORTFOLIO'S INVESTMENTS IN FOREIGN COUNTRIES    
GENERALLY WILL BE DENOMINATED IN FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE
VALUE OF A COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE  
OF THE PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR SEPARATELY FROM AND IN  
RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE OF THE SECURITY IN THE
ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY INVEST IN CERTAIN         
INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN TECHNIQUES, SUCH AS       
HEDGING, TO MANAGE THESE RISKS. HOWEVER, MSDW INVESTMENT MANAGEMENT CANNOT      
GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN CERTAIN MARKETS OR  
UNDER PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING SO.                

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)          
                                      
COMMENCED OPERATIONS ON               
SEPTEMBER 28, 1992                    
1993                          22.11%  
1994                          -4.18%  
1995                          23.35%  
1996                          15.01%  
1997                          15.87%  
1998                          3.03%   
1999                          7.77%   
HIGH (QUARTER)                        
1/93 - 3/93                           
7.74%                                 
LOW (QUARTER)                         
7/98 - 9/98                           
-6.16%                                

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                              CLASS A                                                              
                            (COMMENCED          CLASS B                                            
                           OPERATIONS ON       (COMMENCED                  CS FIRST BOSTON         
                           SEPTEMBER 28,     OPERATIONS ON                HIGH YIELD INDEX*        
                               1992)        JANUARY 2, 1996)         CLASS A            CLASS B    
                                                                                                   
---------------------------------------------------------------------------------------------------
 PAST ONE YEAR                 7.77%             7.44%                3.28%              3.28%     
---------------------------------------------------------------------------------------------------
 PAST FIVE YEARS              12.79%              N/A                 9.07%               N/A      
---------------------------------------------------------------------------------------------------
 SINCE INCEPTION              11.18%             9.90%                8.82%              7.07%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       
*THE CS FIRST BOSTON HIGH YIELD INDEX IS AN UNMANAGED INDEX OF HIGH YIELD       
CORPORATE BONDS.                                                              

2                                                             

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INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Fixed income securities, regardless of credit quality,        
experience price volatility, especially in response to interest rate changes. As
a result of price volatility, there is a risk that you may lose money by        
investing in a Portfolio.                                                       

EMERGING MARKET RISKS                                                           

Emerging market countries are countries that major international financial      
institutions, such as the World Bank, generally consider to be less economically
mature than developed nations, such as the United States or most nations in     
Western Europe. Emerging market countries can include every nation in the world 
except the United States, Canada, Japan, Australia, New Zealand, and most       
countries located in Western Europe. Emerging market countries may be more      
likely to experience political turmoil or rapid changes in economic conditions  
than more developed countries, and the financial condition of issuers in        
emerging market countries may be more precarious than in other countries. These 
characteristics result in greater risk of price volatility in emerging market   
countries, which may be heightened by currency fluctuations relative to the U.S.
dollar.                                                                         

DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its cash or liquid securities to cover its obligations under those    
instruments. At certain levels, this can cause the Portfolio to lose flexibility
in managing its investments properly, responding to shareholder redemption      
requests, or meeting other obligations. If a Portfolio is in that position, it  
could be forced to sell other securities that it wanted to retain.              

A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

3                                                             

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INVESTMENT DISCRETION                                                           

In pursuing the Portfolio's investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, each Portfolio may invest without limit in certain
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect a Portfolio's performance and   
the Portfolio may not achieve its investment objective.                         
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders. The Portfolios may
engage in frequent trading of securities to achieve their investment goals.     

4                                                             

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--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                                                                 GLOBAL              HIGH   
                                                              FIXED INCOME           YIELD  
                                                               PORTFOLIO           PORTFOLIO
                                                                                            
                                                              ------------------------------
MANAGEMENT FEES                                                                             
--------------------------------------------------------------------------------------------
 CLASS A                                                         0.40%              0.375%  
--------------------------------------------------------------------------------------------
 CLASS B                                                         0.40%              0.375%  

12b-1 FEE                                                                                   
--------------------------------------------------------------------------------------------
 CLASS A                                                          NONE               NONE   
--------------------------------------------------------------------------------------------
 CLASS B                                                         0.15%+              0.25%  

OTHER EXPENSES                                                                              
--------------------------------------------------------------------------------------------
 CLASS A                                                         0.36%               0.22%  
--------------------------------------------------------------------------------------------
 CLASS B                                                         0.36%               0.23%  

TOTAL ANNUAL FUND OPERATING EXPENSES                                                        
--------------------------------------------------------------------------------------------
 CLASS A                                                         0.76%               0.59%  
--------------------------------------------------------------------------------------------
 CLASS B                                                         0.91%               0.85%  

+THE ACTUAL 12b-1 FEE PAID BY THE PORTFOLIO FOR THE LAST FISCAL YEAR WAS 0.15%  
BECAUSE MORGAN STANLEY HAS VOLUNTARILY AGREED TO WAIVE 0.10% OF THE 0.25%       
DISTRIBUTION FEE IT IS ENTITLED TO RECEIVE.                                     

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE HIGHEST
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIOS SO THAT TOTAL ANNUAL OPERATING EXPENSES, EXCLUDING     
CERTAIN INVESTMENT RELATED EXPENSES DESCRIBED BELOW, WILL NOT EXCEED 0.50% FOR  
CLASS A SHARES AND 0.65% FOR CLASS B SHARES OF THE GLOBAL FIXED INCOME PORTFOLIO
AND 0.695% FOR CLASS A SHARES AND 0.945% FOR CLASS B SHARES OF THE HIGH YIELD   
PORTFOLIO.                                                                      

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR A PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED       
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIO SHOWN ABOVE.              

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE  
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS WERE 0.50% FOR CLASS A SHARES AND
0.65% FOR CLASS B SHARES OF THE GLOBAL FIXED INCOME PORTFOLIO. TOTAL OPERATING  
EXPENSES FOR THE HIGH YIELD PORTFOLIO DID NOT EXCEED THE AMOUNTS SHOWN IN THE   
FIRST PARAGRAPH AND, ACCORDINGLY, TOTAL OPERATING EXPENSES INCURRED BY INVESTORS
WERE AS SHOWN IN THE TABLE ABOVE.                                               

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    
The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
GLOBAL FIXED INCOME PORTFOLIO                                                                       
----------------------------------------------------------------------------------------------------
 CLASS A                               $78              $243              $422               $942   
----------------------------------------------------------------------------------------------------
 CLASS B                               $93              $290              $504              $1,120  

HIGH YIELD PORTFOLIO                                                                                
----------------------------------------------------------------------------------------------------
 CLASS A                               $60              $189              $329               $738   
----------------------------------------------------------------------------------------------------
 CLASS B                               $87              $271              $471              $1,049  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies (with MSDW Investment Management, the  
"MSDW Investment Management Group"), managed assets of approximately            
$184.8 billion, including assets under fiduciary advice.                        

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                                                  GLOBAL                 HIGH        
                                                               FIXED INCOME              YIELD       
                                                                 PORTFOLIO             PORTFOLIO     
                                                                                                     
                                                               -----------------------------------   
MANAGEMENT FEE PAID IN FISCAL YEAR                          CLASS A    CLASS B    CLASS A    CLASS B 
ENDED DECEMBER 31, 1999                                                                              

                                                            -----------------------------------------
(NET OF WAIVERS AND AS A PERCENTAGE OF AVERAGE NET ASSETS)   0.14%      0.14%      0.35%      0.35%  

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--------------------------------------------------------------------------------
PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

SUBJECT TO THE SUPERVISION OF MSDW INVESTMENT MANAGEMENT AND ITS INVESTMENT     
MANAGEMENT COMMITTEE, THE FOLLOWING INDIVIDUALS, EACH OF WHOM IS EMPLOYED BY A  
MEMBER OF THE MSDW INVESTMENT MANAGEMENT GROUP, HAVE PRIMARY DAY-TO-DAY         
PORTFOLIO MANAGEMENT RESPONSIBILITY FOR THE PORTFOLIOS:                         

----------------------------------------------------------------------------    
GLOBAL FIXED INCOME PORTFOLIO                                                   

J. DAVID GERMANY, MANAGING DIRECTOR, MICHAEL B. KUSHMA, PRINCIPAL, PAUL F.      
O'BRIEN, PRINCIPAL, CHRISTIAN G. ROTH, PRINCIPAL AND DAVID STANLEY, VICE        
PRESIDENT                                                                       

J. David Germany joined MSDW Investment Management Group in 1991. He joined     
Morgan Stanley as a Senior Economist in 1987 and was promoted to Vice President 
in 1989. Mr. Germany holds an A.B. degree (VALEDICTORIAN) from Princeton        
University and a Ph.D. in Economics from the Massachusetts Institute of         
Technology. Michael B. Kushma joined Morgan Stanley in 1987. He was a member of 
Morgan Stanley's Global Fixed Income Strategy Group in the fixed income division
from 1987 to 1995, where he became the division's senior government bond        
strategist. He joined MSDW Investment Management Group in 1995, where he took   
responsibility for global fixed income bond strategy. Mr. Kushma received an    
A.B. in Economics from Princeton University in 1979, a Masters in Economics from
the London School of Economics in 1981 and a Masters of Philosophy from Columbia
University in 1983. Paul F. O'Brien joined MSDW Investment Management Group in  
1996. He was head of European Economics from 1993 through 1995 for JP Morgan and
a Principal Administrator from 1991 through 1992 for the Organization for       
Economic Cooperation and Development. Mr. O'Brien attended the United States    
Naval Academy and holds a B.S. degree from the Massachusetts Institute of       
Technology and a Ph.D. in Economics from the University of Minnesota. Christian 
G. Roth joined MSDW Investment Management Group in 1991. Prior to 1991, he      
served as a Senior Associate in the Merchant Banking Group of Dean Witter       
Capital Corporation. Mr. Roth received a B.S. from The Wharton School of the    
University of Pennsylvania. David Stanley joined MSDW Investment Management     
Group in 1994. Prior to joining MSDW Investment Management Group, he was with   
Aetna Capital Management International, where he had sole responsibility for    
managing all European and Global bond funds. Previously, he spent over five     
years at Marine and General Mutual Life Assurance Society, where he managed     
Sterling and Global bond funds. Mr. Stanley graduated from Manchester           
University. Messrs. Germany, Kushma and O'Brien have shared primary             
responsibility for managing the Portfolio's assets since September 1997. Messrs.
Roth and Stanley have shared primary responsibility for managing the Portfolio's
assets since July 1999 and January 2000, respectively.                          

HIGH YIELD PORTFOLIO                                                            

ROBERT E. ANGEVINE, PRINCIPAL, STEPHEN F. ESSER, MANAGING DIRECTOR, GORDON W.   
LOERY, PRINCIPAL AND DEANNA L. LOUGHNANE, PRINCIPAL                             

Robert E. Angevine joined MSDW Investment Management Group in 1988. Prior to    
1988 he spent over eight years at Prudential Insurance where he was responsible 
for one of the largest open-end high yield mutual funds in the country. His     
other experience includes international treasury operations at a major          
pharmaceutical company and commercial banking. Mr. Angevine received a B.A. in  
Economics from Lafayette College and an M.B.A. from Fairleigh Dickinson         
University. He served two years as a Lieutenant in the U.S. Army. Stephen F.    
Esser joined MSDW Investment Management Group in 1988. Mr. Esser is a member of 
the New York Society of Security Analysts and holds a B.S. degree (SUMMA CUM    
LAUDE and PHI BETA KAPPA) from the University of Delaware. Gordon W. Loery      
joined Morgan Stanley in 1990 as a Fixed Income Analyst and joined MSDW         
Investment Management Group in 1996. Mr. Loery received a B.A. in Economics from
Cornell University. Deanna L. Loughnane joined MSDW Investment Management Group 
in 1997. She served as a Vice President and Senior Corporate Bond Analyst for   
Putnam Investments from 1993 to 1997. Ms. Loughnane received a B.S. from The    
University of Virginia's McIntire School of Commerce and an M.B.A from Harvard  
University. Mr. Angevine has had primary responsibility for managing the        
Portfolio's assets since its inception. Messrs. Esser and Loery and Ms.         
Loughnane have shared primary responsibility for managing the Portfolio's assets
since April 1996, April 1999 and January 2000, respectively.                    

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--------------------------------------------------------------------------------
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of a Portfolio is    
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolios as of the close of the New York Stock     
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of each Portfolio. The minimum additional investment
generally is $1,000 for each account that you have. If the value of your account
falls below the minimum initial investment amount for Class A shares or Class B 
shares as a result of share redemptions, the Fund will notify you. Your account 
may be subject to involuntary conversion from Class A shares to Class B shares  
or involuntary redemption in the case of Class B shares if the value of your    
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

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To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            
HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, a Portfolio may pay redemption proceeds by a distribution-in-kind 
of readily marketable portfolio securities.                                     

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

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DIVIDENDS AND DISTRIBUTIONS                                                     

Each Portfolio's policy is to distribute to shareholders substantially all of   
its taxable net investment income in the form of a quarterly dividend and to    
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           
TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. A Portfolio may be able to    
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
GLOBAL FIXED INCOME PORTFOLIO                                                   
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                            CLASS A                         
                                                     ------------------------------------------------------ 
                                                                    YEAR ENDED DECEMBER 31,                 
                                                     ------------------------------------------------------ 
SELECTED PER SHARE DATA AND RATIOS                    1999++     1998++     1997++       1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD                 $  12.51    $ 11.15    $ 11.30    $  11.22    $  10.29 
                                                     --------    -------    -------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                               0.51       0.55       0.56        0.61        0.76 
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                                 
   INVESTMENTS                                          (1.37)      0.98      (0.40)       0.08        1.15 
                                                     --------    -------    -------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                    (0.86)      1.53       0.16        0.69        1.91 
                                                     --------    -------    -------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                  (0.39)     (0.17)     (0.31)      (0.61)      (0.98)
 IN EXCESS OF NET INVESTMENT INCOME                     (0.03)        --         --          --          -- 
 RETURN OF CAPITAL                                      (0.01)        --         --          --          -- 
                                                     --------    -------    -------    --------    -------- 
    TOTAL DISTRIBUTIONS                                 (0.43)     (0.17)     (0.31)      (0.61)      (0.98)
                                                     --------    -------    -------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                       $  11.22    $ 12.51    $ 11.15    $  11.30    $  11.22 
                                                     ========    =======    =======    ========    ======== 
TOTAL RETURN                                            (6.84)%    13.84%      1.50%       6.44%      19.32%
                                                     ========    =======    =======    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                 $34,225    $45,884    $84,635    $112,888    $102,852 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)              0.50%      0.50%      0.50%       0.50%       0.50%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
  ASSETS (1)                                             4.01%      4.76%      5.05%       5.50%       6.79%
PORTFOLIO TURNOVER RATE                                   102%       110%       116%        258%        207%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                           
    THE PERIOD:                                                                                             
    PER SHARE BENEFIT TO NET INVESTMENT INCOME          $0.03      $0.03      $0.02       $0.02       $0.02 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                      0.76%      0.81%      0.71%       0.72%       0.71%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                   
       ASSETS                                            3.75%      4.48%      4.84%       5.29%       6.58%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                    CLASS B                     
                                                               -------------------------------------------------
                                                                                                    PERIOD FROM 
                                                                          YEAR ENDED                JANUARY 2,  
                                                                         DECEMBER 31,               1996*** TO  
                                                               --------------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                              1999++      1998++      1997++         1996     
                                                                                                                
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $12.48      $11.13      $11.29        $11.23    
                                                                ------      ------      ------        ------    
INCOME FROM INVESTMENT OPERATIONS                                                                               
 NET INVESTMENT INCOME (2)                                        0.45        0.53        0.54          0.48    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          (1.32)       0.98       (0.40)         0.18    
                                                                ------      ------      ------        ------    
    TOTAL FROM INVESTMENT OPERATIONS                             (0.87)       1.51        0.14          0.66    
                                                                ------      ------      ------        ------    
DISTRIBUTIONS                                                                                                   
 NET INVESTMENT INCOME                                           (0.39)      (0.16)      (0.30)        (0.60)   
 IN EXCESS OF NET INVESTMENT INCOME                              (0.03)         --          --            --    
                                                                ------      ------      ------        ------    
    TOTAL DISTRIBUTIONS                                          (0.42)      (0.16)      (0.30)        (0.60)   
                                                                ------      ------      ------        ------    
NET ASSET VALUE, END OF PERIOD                                  $11.19      $12.48      $11.13        $11.29    
                                                                ======      ======      ======        ======    
TOTAL RETURN                                                     (7.09)%     13.68%       1.29%         6.12%   
                                                                ======      ======      ======        ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                   
NET ASSETS, END OF PERIOD (THOUSANDS)                             $322        $362        $366        $1,559    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       0.65%       0.65%       0.65%         0.65%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          3.86%       4.54%       4.88%         5.28%** 
PORTFOLIO TURNOVER RATE                                            102%        110%        116%          258%   
-----------------                                                                                               
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                                   
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.03       $0.03       $0.02         $0.02    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                            
     EXPENSES TO AVERAGE NET ASSETS                               0.91%       0.99%       0.86%         0.86%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                  3.60%       4.26%       4.68%         5.08%** 
----------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            

++PER SHARE AMOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 ARE  
BASED ON AVERAGE SHARES OUTSTANDING.                                      

11                                                            

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
HIGH YIELD PORTFOLIO                                                            
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                              CLASS A                       
                                                         -------------------------------------------------- 
                                                                      YEAR ENDED DECEMBER 31,               
                                                         -------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                         1999       1998       1997      1996      1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD                     $  10.75   $  11.58   $  10.91   $ 10.46   $  9.55 
                                                         --------   --------   --------   -------   ------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                                   0.94       1.00       1.00      1.03      1.14 
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                                 
   INVESTMENTS                                              (0.14)     (0.66)      0.67      0.47      0.97 
                                                         --------   --------   --------   -------   ------- 
    TOTAL FROM INVESTMENT OPERATIONS                         0.80       0.34       1.67      1.50      2.11 
                                                         --------   --------   --------   -------   ------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                      (0.95)     (0.98)     (1.00)    (1.05)    (1.20)
 IN EXCESS OF NET INVESTMENT INCOME                         (0.01)     (0.00)+       --     (0.00)+      -- 
 NET REALIZED GAIN                                             --      (0.14)        --        --        -- 
 IN EXCESS OF NET REALIZED GAIN                                --      (0.04)        --        --        -- 
 RETURN OF CAPITAL                                          (0.01)     (0.01)        --        --        -- 
                                                         --------   --------   --------   -------   ------- 
    TOTAL DISTRIBUTIONS                                     (0.97)     (1.17)     (1.00)    (1.05)    (1.20)
                                                         --------   --------   --------   -------   ------- 
NET ASSET VALUE, END OF PERIOD                           $  10.58   $  10.75   $  11.58   $ 10.91   $ 10.46 
                                                         ========   ========   ========   =======   ======= 
TOTAL RETURN                                                 7.77%      3.03%     15.87%    15.01%    23.35%
                                                         ========   ========   ========   =======   ======= 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                    $136,386   $128,237   $113,006   $95,663   $62,245 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)                  0.59%      0.67%      0.69%     0.75%     0.75%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
ASSETS (1)                                                   8.72%      8.70%      8.70%     9.78%    11.09%
PORTFOLIO TURNOVER RATE                                        58%        93%       111%      117%       90%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE                                                       
   PERIOD:                                                                                                  
     PER SHARE BENEFIT TO NET INVESTMENT INCOME               N/A        N/A        N/A     $0.01     $0.01 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                           N/A        N/A        N/A      0.82%     0.83%
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS              N/A        N/A        N/A      9.71%    11.01%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                  CLASS B                   
                                                               ---------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,        1996*** TO  
                                                               ----------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                              1999       1998       1997         1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                           $ 10.73    $ 11.56    $10.90       $10.49    
                                                               -------    -------    ------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                        0.92       0.90      0.97         0.98    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          (0.15)     (0.59)     0.65         0.45    
                                                               -------    -------    ------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                              0.77       0.31      1.62         1.43    
                                                               -------    -------    ------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                           (0.93)     (0.95)    (0.96)       (1.02)   
 IN EXCESS OF NET INVESTMENT INCOME                              (0.01)     (0.00)+      --           --    
 REALIZED NET GAIN                                                  --      (0.14)       --           --    
 IN EXCESS OF NET REALIZED GAIN                                     --      (0.04)       --           --    
 RETURN OF CAPITAL                                               (0.01)     (0.01)       --           --    
                                                               -------    -------    ------       ------    
    TOTAL DISTRIBUTIONS                                          (0.95)     (1.14)    (0.96)       (1.02)   
                                                               -------    -------    ------       ------    
NET ASSET VALUE, END OF PERIOD                                 $ 10.55    $ 10.73    $11.56       $10.90    
                                                               =======    =======    ======       ======    
TOTAL RETURN                                                      7.44%      2.79%    15.48%       14.37%   
                                                               =======    =======    ======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                          $48,457    $56,804    $7,213       $5,665    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       0.85%      0.95%     0.93%        1.00%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)          8.49%      8.73%     8.48%        9.49%** 
PORTFOLIO TURNOVER RATE                                             58%        93%      111%         117%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                    N/A        N/A       N/A        $0.01    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                                N/A        N/A       N/A         1.05%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                   N/A        N/A       N/A         9.44%** 
------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

12                                                            

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                                                                [Download Table]
                                                                              
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER  GLOBAL FIXED INCOME PORTFOLIO
INSTITUTIONAL FUND, INC.                         HIGH YIELD PORTFOLIO         

ACCOUNT REGISTRATION FORM 

ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

                           -----------------------------------------------------
                  Type of Registration: / / Incorporated / /
              Unincorporated Association / / Partnership
                                            / / Uniform Gift/Transfer to
Minor                       
                                               (ONLY ONE CUSTODIAN AND
MINOR PERMITTED)            
/ / Trust                   
                        -------------------------------- / / Other (SPECIFY)
    --------------------------------
MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                           HOME TELEPHONE NUMBER       BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                   --------------------------------- OR TAXPAYER
   IDENTIFICATION NUMBER ("TIN")

       ---------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                   --------------------------------- OR TAXPAYER
   IDENTIFICATION NUMBER ("TIN")

       ---------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                   --------------------------------- OR TAXPAYER
   IDENTIFICATION NUMBER ("TIN")

       ---------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                          Class A shares minimum $500,000 for each Portfolio and
                       Class B shares minimum $100,000 for each Portfolio.
                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                      
GLOBAL FIXED INCOME PORTFOLIO  / / Class A Shares (069)  $---------  / / Class B Shares (042) $ ------
         HIGH YIELD PORTFOLIO  / / Class A Shares (072)  $---------  / / Class B Shares (045) $ ------
                               Total Initial Investment  $---------                                   

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
    --------------------------------

From                        
    --------------------------------
   NAME OF PORTFOLIO
             -----------------------------------
ACCOUNT NUMBER      

                         Account previously established by: / / Phone exchange
/ / Wire on                 
    --------------------------------
                          DATE

    --------------------------------
                          ACCOUNT NUMBER
                         (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                               
/ /  I/we hereby authorize the Fund and its agents to honor                                                    
     any telephone requests to wire redemption proceeds to                                                     
     the commercial bank indicated at right and/or mail                                                        
     redemption proceeds to the name and address in which                                                      
     my/our fund account is registered if such requests are   --------                                         
     believed to be authentic.                                NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)       
     The Fund and the Fund's Transfer Agent will employ       --------                                         
     reasonable procedures to confirm that instructions       BANK ACCOUNT NUMBER                              
     communicated by telephone are genuine. These procedures  --------                                         
     include requiring the investor to provide certain        BANK ABA NUMBER                                  
     personal identification information at the time an       --------                                         
     account is opened and prior to effecting each            NAME(S) IN WHICH YOUR BANK ACCOUNT IS ESTABLISHED
     transaction requested by telephone. In addition, all     --------                                         
     telephone transaction requests will be recorded and      BANK'S STREET ADDRESS                            
     investors may be required to provide additional          --------                                         
     telecopied written instructions of transaction           CITY STATE ZIP CODE                              
     requests. Neither the Fund nor the Transfer Agent will                                                    
     be responsible for any loss, liability, cost or expense                                                   
     for following instructions received by telephone that                                                     
     it reasonably believes to be genuine.                                                                     

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                  CITY                          STATE ZIP CODE
DEALER INFORMATION                                      

                      --------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
    --------------------------------
SIGNATURE     DATE          
    --------------------------------
SIGNATURE     DATE          
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at             
"http://www.sec.gov"; or (3) By mail: you may request documents, upon payment of
a duplicating fee, by writing to Securities and Exchange Commission, Public     
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

A PORTFOLIO OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.       

U.S. EQUITY PLUS PORTFOLIO                                                      
THE U.S. EQUITY PLUS PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING
PRIMARILY IN EQUITY SECURITIES OF ISSUERS INCLUDED IN THE STANDARD & POOR'S 500 
INDEX ("S&P 500").                                                              

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
U.S. EQUITY PLUS PORTFOLIO (THE "PORTFOLIO").                                   

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     U.S. EQUITY PLUS PORTFOLIO                                 1
     ADDITIONAL RISK FACTORS AND INFORMATION                    2
FEES AND EXPENSES OF THE PORTFOLIO                              4
INVESTMENT ADVISER                                              5
MANAGEMENT FEES                                                 5
PORTFOLIO MANAGER                                               6
DISTRIBUTION OF PORTFOLIO SHARES                                6
SHAREHOLDER INFORMATION                                         6
FINANCIAL HIGHLIGHTS                                            9
     U.S. EQUITY PLUS PORTFOLIO                                10
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
U.S. EQUITY PLUS PORTFOLIO                                                      
------------------------------------------------------------------------------- 

THE U.S. EQUITY PLUS PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING
PRIMARILY IN EQUITY SECURITIES OF ISSUERS INCLUDED IN THE S&P 500.              

APPROACH                                                                        
MSDW Investment Management seeks to maintain an investment portfolio that       
consistently exceeds the performance of the S&P 500 Index while maintaining     
comparable price volatility. MSDW Investment Management's investment approach   
combines an active and systematic security selection process with the           
application of a rigorous risk control process.                                 

PROCESS                                                                         

MSDW Investment Management seeks to purchase equity securities of the most      
attractive issuers in the S&P 500 based upon a disciplined, analytical          
investment strategy that combines both quantitative and qualitative analysis.   
MSDW Investment Management first considers historical stock prices, earnings,   
cash flow, dividend yield information, consensus earnings and earnings growth   
forecasts in order to identify and rank the attractiveness of all securities in 
the investment universe. Following this quantitative analysis, MSDW Investment  
Management purchases securities from the remaining pool of issuers based on     
qualitative recommendations from Morgan Stanley & Co. Incorporated's ("Morgan   
Stanley") team of research analysts. MSDW Investment Management also uses a     
proprietary market conditions model to adapt Portfolio investments to changing  
market environments.                                                            

RISK                                                                            

Investing in the U.S. Equity Plus Portfolio may be appropriate for you if you   
are willing to accept the risks and uncertainties of investing in equity        
securities in the hope of earning superior returns. In general, prices of equity
securities are more volatile than those of fixed income securities. The prices  
of equity securities will rise and fall in response to a number of different    
factors. In particular, prices of equity securities will respond to events that 
affect entire financial markets or industries (changes in inflation or consumer 
demand, for example) and to events that affect particular issuers (news about   
the success or failure of a new product, for example). In addition, at times the
Portfolio's market sector, equity securities of larger U.S. issuers, may        
underperform relative to other sectors.                                         

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)             
                                         
COMMENCED OPERATIONS ON JULY             
31, 1997                                 
                              1998 21.26%
                              1999 20.25%
HIGH (QUARTER)                           
10/98 - 12/98                 20.33%     
LOW (QUARTER)                            
7/98 - 9/98                   -12.25%    

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                         CLASS A            CLASS B                           
                                       (COMMENCED         (COMMENCED                          
                                      OPERATIONS ON      OPERATIONS ON          S&P 500       
                                     JULY 31, 1997)     JULY 31, 1997)           INDEX*       
                                                                                              
----------------------------------------------------------------------------------------------
 PAST ONE YEAR                           20.25%             19.99%               21.04%       
----------------------------------------------------------------------------------------------
 SINCE INCEPTION                         18.75%             18.52%               21.26%       

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE S&P 500 INDEX IS COMPRISED OF THE STOCKS OF 500 LARGE-CAP U.S. COMPANIES   
 WITH MARKET CAPITALIZATION OF $1 BILLION OR MORE. THESE 500 COMPANIES REPRESENT
APPROXIMATELY 100 INDUSTRIES, CHOSEN MAINLY FOR MARKET SIZE, LIQUIDITY AND    
INDUSTRY GROUP REPRESENTATION.                                                

1                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIO. THE PORTFOLIO'S INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED IN
MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY IS
A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND   
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

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

PRICE VOLATILITY                                                                

The value of your investment in the Portfolio is based on the market prices of  
the securities the Portfolio holds. These prices change daily due to economic   
and other events that affect markets generally, as well as those that affect    
particular industries and companies. These price movements, sometimes called    
volatility, may be greater or lesser depending on the types of securities the   
Portfolio owns and the markets in which the securities trade. Over time, equity 
securities have generally shown gains superior to fixed income securities,      
although they have tended to be more volatile in the short term. Fixed income   
securities, regardless of credit quality, also experience price volatility,     
especially in response to interest rate changes. As a result of price           
volatility, there is a risk that you may lose money by investing in the         
Portfolio.                                                                      

DERIVATIVES                                                                     

The Portfolio may use various instruments that derive their values from those of
specified securities, indices, currencies or other points of reference for both 
hedging and non-hedging purposes. Derivatives include futures, options, forward 
contracts, swaps, and structured notes. These derivatives, including those used 
to manage risk, are themselves subject to risks of the different markets in     
which they trade and, therefore, may not serve their intended purposes.         

The primary risks of derivatives are: (i) changes in the market value of        
securities held by the Portfolio, and of derivatives relating to those          
securities, may not be proportionate, (ii) there may not be a liquid market for 
the Portfolio to sell a derivative, which could result in difficulty closing a  
position and (iii) certain derivatives can magnify the extent of losses incurred
due to changes in the market value of the securities to which they relate. In   
addition, some derivatives are subject to counterparty risk. To minimize this   
risk, the Portfolio may enter into derivatives transactions only with           
counterparties that meet certain requirements for credit quality and collateral.
Also, the Portfolio may invest in certain derivatives that require the Portfolio
to segregate some or all of its cash or liquid securities to cover its          
obligations under those instruments. At certain levels, this can cause the      
Portfolio to lose flexibility in managing its investments properly, responding  
to shareholder redemption requests, or meeting other obligations. If the        
Portfolio is in that position, it could be forced to sell other securities that 
it wanted to retain.                                                            

The Portfolio will limit its use of derivatives for non-hedging purposes to     
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to the
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolio's investment objective, MSDW Investment Management 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, MSDW       
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolio's performance.                                                        

BANK INVESTORS                                                                  
An investment in the Portfolio is not insured or guaranteed by the Federal      
Deposit Insurance Corporation or any other government agency.                   

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TEMPORARY DEFENSIVE                                                             

INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, the Portfolio may invest without limit in certain 
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect the Portfolio's performance and 
the Portfolio may not achieve its investment objective.                         
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, the Portfolio will purchase and sell   
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause the Portfolio to incur additional transaction costs and may 
result in taxable gains being passed through to shareholders. The Portfolio may 
engage in frequent trading of securities to achieve its investment objectives.  

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FEES AND EXPENSES OF THE PORTFOLIO                                              
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolio. The      
Portfolio does not charge any sales loads or similar fees when you purchase or  
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                                [Download Table]

                                                      U.S. EQUITY PLUS PORTFOLIO
                                                                                
MANAGEMENT FEES                                                                 
--------------------------------------------------------------------------------
 CLASS A                                                       0.45%            
--------------------------------------------------------------------------------
 CLASS B                                                       0.45%            

12b-1 FEE                                                                       
--------------------------------------------------------------------------------
 CLASS A                                                        NONE            
--------------------------------------------------------------------------------
 CLASS B                                                       0.25%            

OTHER EXPENSES                                                                  
--------------------------------------------------------------------------------
 CLASS A                                                       0.72%            
--------------------------------------------------------------------------------
 CLASS B                                                       0.72%            

TOTAL ANNUAL FUND OPERATING EXPENSES                                            
--------------------------------------------------------------------------------
 CLASS A                                                       1.17%            
--------------------------------------------------------------------------------
 CLASS B                                                       1.42%            

*THE MANAGEMENT FEES FOR THE PORTFOLIO SHOWN IN THE TABLE ABOVE ARE THE HIGHEST 
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW        
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE     
AND/OR REIMBURSE THE PORTFOLIO SO THAT TOTAL ANNUAL OPERATING EXPENSES,       
EXCLUDING CERTAIN INVESTMENT RELATED EXPENSES DESCRIBED BELOW, WILL NOT EXCEED
0.80% FOR CLASS A SHARES AND 1.05% FOR CLASS B SHARES.                        

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR    
EXPENSE REIMBURSEMENT FOR THE PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED   
 EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED, 
THE PORTFOLIO'S TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR   
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIO SHOWN ABOVE.            

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS IN THE PORTFOLIO, INCLUDING    
CERTAIN INVESTMENT RELATED EXPENSES, WERE 0.83% FOR CLASS A SHARES AND 1.08%  
FOR CLASS B SHARES. EXCLUDING INVESTMENT RELATED EXPENSES, THE OPERATING      
 EXPENSES AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS WERE 0.80% FOR CLASS A
SHARES AND 1.05% FOR CLASS B SHARES.                                          

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT   
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT 
ANY TIME AND WITHOUT NOTICE.                                                  

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE       
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    

The example assumes that you invest $10,000 in the Portfolio for the time       
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that the Portfolio's operating expenses remain the same. Although your actual   
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
U.S. EQUITY PLUS PORTFOLIO                                                                          
----------------------------------------------------------------------------------------------------
 CLASS A                               $119             $372              $644              $1,420  
----------------------------------------------------------------------------------------------------
 CLASS B                               $145             $449              $776              $1,702  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley, the Fund's Distributor. MSDW is a
preeminent global financial services firm that maintains leading market         
positions in each of its three primary businesses -- securities, asset          
management and credit services. At December 31, 1999, MSDW Investment           
Management, together with its affiliated institutional asset management         
companies, managed assets of approximately $184.8 billion, including assets     
under fiduciary advice.                                                         

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
the Portfolio the management fee set forth in the table below:                  

                                                        [Enlarge/Download Table]

                                                                U.S. EQUITY PLUS PORTFOLIO    
                                                            ----------------------------------
                                                                                              
MANAGEMENT FEE PAID IN FISCAL YEAR                             CLASS A             CLASS B    
ENDED DECEMBER 31, 1999                                                                       

                                                            ----------------------------------
(NET OF WAIVERS AND AS A PERCENTAGE OF AVERAGE NET ASSETS)      0.11%               0.11%     

5                                                             

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

PORTFOLIO MANAGER                                                               
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUAL HAS PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT            
RESPONSIBILITY FOR THE PORTFOLIO:                                               

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

NARAYAN RAMACHANDRAN                                                            

Narayan Ramachandran, a Managing Director of MSDW Investment Management and     
Morgan Stanley, joined MSDW Investment Management in 1996. Currently, he is a   
Portfolio Manager and head of the Structured Asset Management business at MSDW  
Investment Management. Prior to joining MSDW Investment Management, from 1988 to
1996 he was with RogersCasey Associates, Inc. ("RogersCasey"), an investment    
consulting and special assets advisory firm based in Darien, Connecticut. As    
President of RogersCasey's investment advisory subsidiary (1995-1996), he was   
responsible for leading the special assets advisory business with $2 billion in 
assets under management. Prior to that, he was Managing Director of Research for
RogersCasey (1991-1994), with his research efforts focused on quantitative      
investment models. Mr. Ramachandran holds a B.S. in Chemical Engineering from   
the Indian Institute of Technology in Bombay and an M.B.A. from the University  
of Michigan at Ann Arbor. He is also a Chartered Financial Analyst.             
Mr. Ramachandran has had primary responsibility for managing the Portfolio's    
assets since its inception.                                                     

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of the Portfolio. Morgan Stanley receives no compensation for distributing Class
A shares of the Portfolio. The Fund has adopted a Plan of Distribution with     
respect to the Class B shares of the Portfolio pursuant to Rule 12b-1 (the      
"Plan") under the Investment Company Act of 1940. Under the Plan, the Portfolio 
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           

The net asset value ("NAV") per share of a class of shares of the Portfolio is  
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolio may  
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolio does not calculate NAV.  
As a result, the value of these investments may change on days when you cannot  
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of the Portfolio at the 
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolio as of the close of the New York Stock      
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

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HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of the Portfolio directly    
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares. The minimum additional investment generally is     
$1,000 for each account that you have. If the value of your account falls below 
the minimum initial investment amount for Class A shares or Class B shares as a 
result of share redemptions, the Fund will notify you. Your account may be      
subject to involuntary conversion from Class A shares to Class B shares or      
involuntary redemption in the case of Class B shares if the value of your       
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            

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HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, the Portfolio may pay redemption proceeds by a                    
distribution-in-kind of readily marketable portfolio securities.                

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of the Portfolio and raise its expenses.      
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

DIVIDENDS AND DISTRIBUTIONS                                                     

The Portfolio's policy is to distribute to shareholders substantially all of its
taxable net investment income in the form of an annual dividend and to          
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           

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TAXES                                                                           
The dividends and distributions you receive from the Portfolio may be subject to
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. The Fund will tell you        
annually how to treat dividends and distributions.                              

If you redeem shares of the Portfolio, you will be subject to tax on any gains  
you earn based on your holding period for the shares. An exchange of shares of  
the Portfolio for shares of another portfolio is a sale of Portfolio shares for 
tax purposes. Conversions of shares between classes will not result in taxation.

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights table is intended to help you understand the 
financial performance of the Class A shares and Class B shares of the Portfolio 
for the past five years or, if less than five years, the life of the Portfolio  
or Class. Certain information reflects financial results for a single Portfolio 
share. The total returns in the table represent the rate that an investor would 
have earned (or lost) on an investment in the Portfolio (assuming reinvestment  
of all dividends and distributions). This information has been audited by       
PricewaterhouseCoopers LLP, whose report, along with the Fund's financial       
statements, are incorporated by reference into the Fund's SAI and are included  
in the Fund's December 31, 1999 Annual Report to Shareholders. The Annual Report
and the Fund's financial statements, as well as the SAI, are available at no    
cost from the Fund at the toll free number noted on the back cover to this      
Prospectus.                                                                     

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
U.S. EQUITY PLUS PORTFOLIO                                                      
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                 CLASS A                     
                                                             ----------------------------------------------- 
                                                                                                PERIOD FROM  
                                                                                                 JULY 31,    
                                                                YEAR ENDED DECEMBER 31,          1997* TO    
                                                             ------------------------------    DECEMBER 31,  
SELECTED PER SHARE DATA AND RATIOS                              1999++           1998++           1997++     
                                                                                                             
------------------------------------------------------------------------------------------------------------ 
NET ASSET VALUE, BEGINNING OF PERIOD                            $ 12.43          $ 10.31          $ 10.00    
                                                                -------          -------          -------    
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME (1)                                         0.11             0.09             0.06    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                   2.30             2.10             0.33    
                                                                -------          -------          -------    
    TOTAL FROM INVESTMENT OPERATIONS                               2.41             2.19             0.39    
                                                                -------          -------          -------    
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                                            (0.11)           (0.05)           (0.05)   
 IN EXCESS OF NET INVESTMENT INCOME                                  --               --            (0.03)   
 NET REALIZED GAIN                                                (2.34)              --               --    
 IN EXCESS OF NET REALIZED GAIN                                   (0.05)           (0.02)              --    
                                                                -------          -------          -------    
    TOTAL DISTRIBUTIONS                                           (2.50)           (0.07)           (0.08)   
                                                                -------          -------          -------    
NET ASSET VALUE, END OF PERIOD                                  $ 12.34          $ 12.43          $ 10.31    
                                                                =======          =======          =======    
TOTAL RETURN                                                      20.25%           21.26%            3.94%   
                                                                =======          =======          =======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)                           $22,430          $66,640          $20,914    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)                        0.83%            0.80%            0.80%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                            
  INTEREST EXPENSE                                                 0.80%             N/A              N/A    
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (1)           0.35%            0.87%            1.32%** 
PORTFOLIO TURNOVER RATE                                             182%             228%              15%   
-----------------                                                                                            
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING                                                            
   THE PERIOD:                                                                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                   $0.10            $0.03            $0.07    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                         
     EXPENSES TO AVERAGE NET ASSETS                                1.17%            1.05%            2.37%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS            0.00%            0.59%           (0.25)%**
------------------------------------------------------------------------------------------------------------ 

                                                        [Enlarge/Download Table]

                                                                                 CLASS B                    
                                                             -----------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                 JULY 31,   
                                                                YEAR ENDED DECEMBER 31,          1997* TO   
                                                             ------------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                              1999++           1998++           1997++    
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                            $12.42           $10.31           $10.00    
                                                                ------           ------           ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                        0.03             0.06             0.02    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                  2.36             2.10             0.37    
                                                                ------           ------           ------    
    TOTAL FROM INVESTMENT OPERATIONS                              2.39             2.16             0.39    
                                                                ------           ------           ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                           (0.08)           (0.03)           (0.05)   
 NET REALIZED GAIN                                               (2.33)              --            (0.03)   
 IN EXCESS OF NET REALIZED GAIN                                  (0.07)           (0.02)              --    
                                                                ------           ------           ------    
    TOTAL DISTRIBUTIONS                                          (2.48)           (0.05)           (0.08)   
                                                                ------           ------           ------    
NET ASSET VALUE, END OF PERIOD                                  $12.33           $12.42           $10.31    
                                                                ======           ======           ======    
TOTAL RETURN                                                     19.99%           20.95%            3.93%   
                                                                ======           ======           ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                           $1,533           $1,431           $  102    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                       1.08%            1.05%            1.05%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                           
  INTEREST EXPENSE (2)                                            1.05%             N/A              N/A    
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET                                                        
ASSETS (2)                                                        0.15%            0.52%            0.48%** 
PORTFOLIO TURNOVER RATE                                            182%             228%              15%   
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                  $0.08            $0.03            $0.00+   
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                               1.42%            1.34%            2.63%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS          (0.24)%           0.24%           (0.32)%**
------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                 
**ANNUALIZED                                                                  
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

++PER SHARE AMOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND PERIOD    
ENDED DECEMBER 31, 1997 ARE BASED ON AVERAGE SHARES OUTSTANDING.          

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                                                                [Download Table]
                                                                               
A PORTFOLIO OF [ICON] MORGAN STANLEY DEAN WITTER                               
INSTITUTIONAL FUND, INC.                             U.S. EQUITY PLUS PORTFOLIO

ACCOUNT REGISTRATION FORM 

ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

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

Type of Registration: / / Incorporated/ / Unincorporated Association/ /     
Partnership                                                                     
/ / Uniform Gift/Transfer to Minor                                              
(ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                
/ / Trust -------------------- / / Other (SPECIFY) --------------------         

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
    CITY    COUNTRY    POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
    CITY    COUNTRY    POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                         Class A shares minimum $500,000 for the Portfolio and
                      Class B shares minimum $100,000 for the Portfolio.
                        Please indicate class and amount for purchase of the
following Portfolio:        

                                                        [Enlarge/Download Table]
                                                                                                           
U.S. EQUITY PLUS PORTFOLIO  / / Class A Shares (097)  $ ----------    / / Class B Shares (098) $ ----------
                            Total Initial Investment    $ ----------                                       

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
NAME OF PORTFOLIO     
                    ------------------------------------------
ACCOUNT NUMBER              

      Account previously established by:

  / / Phone exchange / / Wire on
           ---------------------------------------
DATE  

           ---------------------------------------
ACCOUNT NUMBER              
   (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                              
/ /  I/we hereby authorize the Fund and its agents to                                         
     honor any telephone requests to wire redemption                                          
     proceeds to the commercial bank indicated at right                                       
     and/or mail redemption proceeds to the name and                                          
     address in which my/our fund account is registered  ------------------------             
     if such requests are believed to be authentic.      NAME OF COMMERCIAL BANK (NOT SAVINGS 
     The Fund and the Fund's Transfer Agent will employ  BANK)                                
     reasonable procedures to confirm that instructions  ------------------------             
     communicated by telephone are genuine. These        BANK ACCOUNT NUMBER                  
     procedures include requiring the investor to        ------------------------             
     provide certain personal identification             BANK ABA NUMBER                      
     information at the time an account is opened and    ------------------------             
     prior to effecting each transaction requested by    NAME(S) IN WHICH YOUR BANK ACCOUNT IS
     telephone. In addition, all telephone transaction   ESTABLISHED                          
     requests will be recorded and investors may be      ------------------------             
     required to provide additional telecopied written   BANK'S STREET ADDRESS                
     instructions of transaction requests. Neither the   ------------------------             
     Fund nor the Transfer Agent will be responsible     CITY STATE ZIP CODE                  
     for any loss, liability, cost or expense for                                             
     following instructions received by telephone that                                        
     it reasonably believes to be genuine.                                                    

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                  CITY                          STATE ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
           ---------------------------------------
SIGNATURE     DATE          

           ---------------------------------------
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the Portfolio.
The SAI is incorporated by reference into this Prospectus and, therefore,       
legally forms a part of this Prospectus.                                        

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about the Portfolio's  
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
the Portfolio's performance during that period.                                 

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at             
"http://www.sec.gov"; or (3) By mail: you may request documents, upon payment of
a duplicating fee, by writing to Securities and Exchange Commission, Public     
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: public info@sec.gov. To aid you in obtaining this        
information, the Fund's Investment Company Act registration number is 811-05624.

[ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

PORTFOLIOS OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

EUROPEAN REAL ESTATE PORTFOLIO                                                  
THE EUROPEAN REAL ESTATE PORTFOLIO SEEKS TO PROVIDE CURRENT INCOME AND LONG-TERM
CAPITAL APPRECIATION BY INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN
THE EUROPEAN REAL ESTATE INDUSTRY.                                              

ASIAN REAL ESTATE PORTFOLIO                                                     
THE ASIAN REAL ESTATE PORTFOLIO SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION 
BY INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN THE ASIAN REAL      
ESTATE INDUSTRY.                                                                

U.S. REAL ESTATE PORTFOLIO                                                      
THE U.S. REAL ESTATE PORTFOLIO SEEKS TO PROVIDE ABOVE AVERAGE CURRENT INCOME AND
LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY IN EQUITY SECURITIES OF   
COMPANIES IN THE U.S. REAL ESTATE INDUSTRY, INCLUDING REAL ESTATE INVESTMENT    
TRUSTS ("REITS").                                                               

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"). 

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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

TABLE OF CONTENTS                                             PAGE              
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     EUROPEAN REAL ESTATE PORTFOLIO                            1 
     ASIAN REAL ESTATE PORTFOLIO                               2 
     U.S. REAL ESTATE PORTFOLIO                                3 
     ADDITIONAL RISK FACTORS AND INFORMATION                   4 
FEES AND EXPENSES OF THE PORTFOLIOS                            6 
INVESTMENT ADVISER                                             7 
MANAGEMENT FEES                                                7 
PORTFOLIO MANAGERS                                             8 
DISTRIBUTION OF PORTFOLIO SHARES                               9 
SHAREHOLDER INFORMATION                                        9 
FINANCIAL HIGHLIGHTS                                          11 
     EUROPEAN REAL ESTATE PORTFOLIO                           12 
     ASIAN REAL ESTATE PORTFOLIO                              13 
     U.S. REAL ESTATE PORTFOLIO                               14 
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
EUROPEAN REAL ESTATE PORTFOLIO                                                  
------------------------------------------------------------------------------- 

THE EUROPEAN REAL ESTATE PORTFOLIO SEEKS TO PROVIDE CURRENT INCOME AND LONG-TERM
CAPITAL APPRECIATION BY INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN
THE EUROPEAN REAL ESTATE INDUSTRY.                                              
--------------------------------------------------------------------------------
APPROACH                                                                        
MSDW Investment Management seeks a combination of current income and capital    
appreciation by constructing a portfolio of equity securities of European real  
estate companies. MSDW Investment Management considers a company to be European 
if its securities are traded on a recognized stock exchange in Europe or if it  
is organized in a European country and operates primarily in Europe. The        
Portfolio will invest primarily in companies located in Germany, France,        
Switzerland, Belgium, Italy, Spain, Portugal, Finland, Sweden, Denmark, Norway, 
Ireland and the United Kingdom but may also invest in the emerging markets of   
Europe. MSDW Investment Management's approach emphasizes bottom-up stock        
selection with a top-down country allocation overlay.                           

PROCESS                                                                         

MSDW Investment Management's dedicated real estate team focuses on valuation,   
including underlying asset values, values per square foot and property yields as
well as property portfolio composition, lease expiration, capital structure and 
management. Before investing, MSDW Investment Management employees typically    
visit with representatives of each company and selected properties. In seeking  
an optimal matrix of country and property market exposure, MSDW Investment      
Management considers broad demographic and macroeconomic factors as well as     
criteria such as space demand, new construction and rental patterns.            

RISK                                                                            

Investing in the European Real Estate Portfolio may be appropriate for you if   
you are willing to accept the risks and uncertainties of the European real      
estate market in the hope of earning current income and long-term gain. In      
general, prices of equity securities are more volatile than those of fixed      
income securities. The prices of equity securities will rise and fall in        
response to a number of different factors. In particular, prices of equity      
securities will respond to events that affect entire financial markets or       
industries (changes in inflation or consumer demand, for example) and to events 
that affect particular issuers (news about the success or failure of a new      
product, for example). Investing in real estate companies entails the risks of  
the real estate business generally, including sensitivity to economic and       
business cycles, changing demographic patterns and government actions. In       
addition, at times the Portfolio's market sector, European real estate          
securities, may underperform relative to other sectors.                         

INVESTING IN FOREIGN COUNTRIES, PARTICULARLY EMERGING MARKETS, ENTAILS THE RISK 
THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR REGION WILL AFFECT THOSE MARKETS AND
THEIR ISSUERS. THESE SAME EVENTS WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S.
ECONOMY OR SIMILAR ISSUERS LOCATED IN THE UNITED STATES. IN ADDITION, THE       
PORTFOLIO'S INVESTMENTS IN FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN   
FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE VALUE OF A COUNTRY'S CURRENCY   
COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE OF THE PORTFOLIO'S INVESTMENTS.
THESE CHANGES MAY OCCUR SEPARATELY FROM AND IN RESPONSE TO EVENTS THAT DO NOT   
OTHERWISE AFFECT THE VALUE OF THE SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW   
INVESTMENT MANAGEMENT MAY INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES,   
AND MAY USE CERTAIN TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER,
MSDW INVESTMENT MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE  
THESE RISKS IN CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT WILL   
SUCCEED IN DOING SO. IN ADDITION, THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE
INTENSIFIED BECAUSE THE PORTFOLIO IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY   
INVEST IN SECURITIES OF A LIMITED NUMBER OF ISSUERS. AS A RESULT, THE           
PERFORMANCE OF A PARTICULAR INVESTMENT OR A SMALL GROUP OF INVESTMENTS MAY      
AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF THE PORTFOLIO WERE DIVERSIFIED. 

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
OCTOBER 1, 1997                     
1998                          4.75% 
1999                          -2.36%
HIGH (QUARTER)                      
1/98 - 3/98                         
16.28%                              
LOW (QUARTER)                       
7/98 - 9/98                         
-9.03%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                                [Download Table]

                               CLASS A            CLASS B             GPR GENERAL   
                              (COMMENCED         (COMMENCED           REAL ESTATE   
                            OPERATIONS ON      OPERATIONS ON           SECURITIES   
                           OCTOBER 1, 1997)   OCTOBER 1, 1997)       INDEX-EUROPE*  
                                                                                    
------------------------------------------------------------------------------------
 PAST ONE YEAR                  -2.36%             -2.61%                3.40%      
------------------------------------------------------------------------------------
 SINCE INCEPTION                -1.14%             -1.34%                1.33%      

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE GPR GENERAL REAL ESTATE SECURITIES INDEX-EUROPE IS A EUROPEAN MARKET       
CAPITALIZATION WEIGHTED INDEX OF LISTED PROPERTY/REAL ESTATE SECURITIES       
MEASURING TOTAL RETURN.                                                       

1                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ASIAN REAL ESTATE PORTFOLIO                                                     
------------------------------------------------------------------------------- 

THE ASIAN REAL ESTATE PORTFOLIO SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION 
BY INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN THE ASIAN REAL      
ESTATE INDUSTRY.                                                                
--------------------------------------------------------------------------------
APPROACH                                                                        

MSDW Investment Management seeks capital appreciation by constructing a         
portfolio of equity securities of Asian real estate companies. MSDW Investment  
Management considers a company to be Asian if its securities are traded on a    
recognized stock exchange in Asia or if it is organized in an Asian country and 
operates primarily in Asia. The Portfolio will invest primarily in the more     
established Asian markets, including Singapore, Malaysia, Hong Kong and         
Thailand, but may also invest in other Asian emerging markets and in Japan,     
Australia and New Zealand. MSDW Investment Management's approach emphasizes     
bottom-up stock selection with a top-down country allocation overlay.           

PROCESS                                                                         

MSDW Investment Management's dedicated real estate team focuses on valuation,   
including underlying asset values, values per square foot and property yields as
well as property portfolio composition, lease expiration, capital structure and 
management. Before investing, MSDW Investment Management employees typically    
visit with representatives of each company and selected properties. In seeking  
an optimal matrix of country and property market exposure, MSDW Investment      
Management considers broad demographic and macroeconomic factors as well as     
criteria such as space demand, new construction and rental patterns.            

RISK                                                                            

Investing in the Asian Real Estate Portfolio may be appropriate for you if you  
are willing to accept the risks and uncertainties of the Asian real estate      
market in the hope of earning long-term gain. In general, prices of equity      
securities are more volatile than those of fixed income securities. The prices  
of equity securities will rise and fall in response to a number of different    
factors. In particular, prices of equity securities will respond to events that 
affect entire financial markets or industries (changes in inflation or consumer 
demand, for example) and to events that affect particular issuers (news about   
the success or failure of a new product, for example). Investing in real estate 
companies entails the risks of the real estate business generally, including    
sensitivity to economic and business cycles, changing demographic patterns and  
government actions. In addition, at times the Portfolio's market sector, Asian  
real estate securities, may underperform relative to other sectors.             

INVESTING IN FOREIGN COUNTRIES, PARTICULARLY EMERGING MARKETS, ENTAILS THE RISK 
THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR REGION WILL AFFECT THOSE MARKETS AND
THEIR ISSUERS. THESE SAME EVENTS WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S.
ECONOMY OR SIMILAR ISSUERS LOCATED IN THE UNITED STATES. IN ADDITION, THE       
PORTFOLIO'S INVESTMENTS IN FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN   
FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE VALUE OF A COUNTRY'S CURRENCY   
COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE OF THE PORTFOLIO'S INVESTMENTS.
THESE CHANGES MAY OCCUR SEPARATELY FROM AND IN RESPONSE TO EVENTS THAT DO NOT   
OTHERWISE AFFECT THE VALUE OF THE SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW   
INVESTMENT MANAGEMENT MAY INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES,   
AND MAY USE CERTAIN TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER,
MSDW INVESTMENT MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO HEDGE  
THESE RISKS IN CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT WILL   
SUCCEED IN DOING SO. THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED 
BECAUSE THE PORTFOLIO IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN     
SECURITIES OF A LIMITED NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A    
PARTICULAR INVESTMENT OR A SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S
PERFORMANCE MORE THAN IF THE PORTFOLIO WERE DIVERSIFIED.                        

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON              
OCTOBER 1, 1997                      
1998                          -11.82%
1999                          24.27% 
HIGH (QUARTER)                       
10/98 - 12/98                        
50.92%                               
LOW (QUARTER)                        
4/98 - 6/98                          
-30.06%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                                [Download Table]

                            CLASS A            CLASS B              GPR GENERAL   
                           (COMMENCED         (COMMENCED            REAL ESTATE   
                         OPERATIONS ON      OPERATIONS ON           SECURITIES    
                        OCTOBER 1, 1997)   OCTOBER 1, 1997)       INDEX-FAR EAST* 
                                                                                  
----------------------------------------------------------------------------------
 PAST ONE YEAR                    24.27%             23.88%                 20.46%
----------------------------------------------------------------------------------
 SINCE INCEPTION                  -5.64%             -6.00%                -13.86%

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE GPR GENERAL REAL ESTATE SECURITIES INDEX-FAR EAST IS A MARKET              
CAPITALIZATION WEIGHTED INDEX MEASURING TOTAL RETURN OF LISTED PROPERTY/REAL  
ESTATE SECURITIES IN THE FAR EAST.                                            

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
U.S. REAL ESTATE PORTFOLIO                                                      
------------------------------------------------------------------------------- 

THE U.S. REAL ESTATE PORTFOLIO SEEKS TO PROVIDE ABOVE AVERAGE CURRENT INCOME AND
LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY IN EQUITY SECURITIES OF   
COMPANIES IN THE U.S. REAL ESTATE INDUSTRY, INCLUDING REAL ESTATE INVESTMENT    
TRUSTS ("REITS").                                                               
--------------------------------------------------------------------------------
APPROACH                                                                        
MSDW Investment Management seeks a combination of current income and long-term  
gain by constructing a portfolio of equity securities of companies that are in  
the U.S. real estate business. The Portfolio focuses on REITs as well as real   
estate operating companies and invests in a variety of property types and       
regions. MSDW Investment Management's approach emphasizes bottom-up stock       
selection with a top-down asset allocation overlay.                             

PROCESS                                                                         
MSDW Investment Management actively manages the Portfolio using a combination of
top-down and bottom-up methodologies. The top-down asset allocation overlay is  
determined by focusing on key regional criteria, which include demographic and  
macroeconomic considerations (for example, population, employment, household    
formation and income). MSDW Investment Management employs a value-driven        
approach to bottom-up security selection which emphasizes underlying asset      
values, values per square foot and property yields. In seeking an optimal matrix
of regional and property market exposure, MSDW Investment Management considers  
broad demographic and macroeconomic factors as well as criteria such as space   
demand, new construction and rental patterns.                                   

RISK                                                                            

Investing in the U.S. Real Estate Portfolio may be appropriate for you if you   
are willing to accept the risks and uncertainties of the U.S. real estate market
in the hope of earning current income and long-term gain. In general, prices of 
equity securities are more volatile than those of fixed income securities. The  
prices of equity securities will rise and fall in response to a number of       
different factors. In particular, prices of equity securities will respond to   
events that affect entire financial markets or industries (changes in inflation 
or consumer demand, for example) and to events that affect particular issuers   
(news about the success or failure of a new product, for example). Investing in 
real estate companies entails the risks of the real estate business generally,  
including sensitivity to economic and business cycles, changing demographic     
patterns and government actions. In addition, at times the Portfolio's market   
sector, U.S. real estate securities, may underperform relative to other sectors.

INVESTING IN REITS EXPOSES INVESTORS TO THE RISKS OF OWNING REAL ESTATE         
DIRECTLY, AS WELL AS TO RISKS THAT RELATE SPECIFICALLY TO THE WAY IN WHICH REITS
ARE ORGANIZED AND OPERATED. REITS GENERALLY INVEST DIRECTLY IN REAL ESTATE      
(EQUITY REITS), IN MORTGAGES (MORTGAGE REITS) OR IN SOME COMBINATION OF THE TWO 
(HYBRID REITS). THE PORTFOLIO WILL INVEST PRIMARILY IN EQUITY REITS. OPERATING  
REITS REQUIRES SPECIALIZED MANAGEMENT SKILLS AND THE PORTFOLIO INDIRECTLY BEARS 
REIT MANAGEMENT EXPENSES ALONG WITH THE DIRECT EXPENSES OF THE PORTFOLIO.       
INDIVIDUAL REITS MAY OWN A LIMITED NUMBER OF PROPERTIES AND MAY CONCENTRATE IN A
PARTICULAR REGION OR PROPERTY TYPE. REITS ALSO MUST SATISFY SPECIFIC INTERNAL   
REVENUE CODE REQUIREMENTS IN ORDER TO QUALIFY FOR THE TAX-FREE PASS THROUGH OF  
INCOME. THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE  
PORTFOLIO IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A 
LIMITED NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR         
INVESTMENT OR A SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S           
PERFORMANCE MORE THAN IF THE PORTFOLIO WERE DIVERSIFIED.                        

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS                 
ON FEBRUARY 24, 1995                 
1996                          39.56% 
1997                          27.62% 
1998                          -12.29%
1999                          -1.48% 
HIGH (QUARTER)                       
10/96 - 12/96                        
16.71%                               
LOW (QUARTER)                        
7/98 - 9/98                          
-9.45%                               

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                                                              NATIONAL             
                                                                           ASSOCIATION OF          
                                                                             REAL ESTATE           
                            CLASS A             CLASS B                      INVESTMENT            
                           (COMMENCED          (COMMENCED                  TRUSTS (NAREIT)         
                         OPERATIONS ON       OPERATIONS ON                  EQUITY INDEX*          
                       FEBRUARY 24, 1995)   JANUARY 2, 1996)          CLASS A           CLASS B    
                                                                                                   
---------------------------------------------------------------------------------------------------
 PAST ONE YEAR               -1.48%              -1.73%               -4.62%            -4.62%     
---------------------------------------------------------------------------------------------------
 SINCE INCEPTION             13.68%              10.89%                8.30%             6.38%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE NAREIT EQUITY INDEX IS AN UNMANAGED MARKET WEIGHTED INDEX OF TAX QUALIFIED 
REITS LISTED ON THE NEW YORK STOCK EXCHANGE, AMERICAN STOCK EXCHANGE AND THE  
NASDAQ NATIONAL MARKET SYSTEM.                                                

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, companies or governments. These price movements, 
sometimes called volatility, may be greater or lesser depending on the types of 
securities the Portfolio owns and the markets in which the securities trade.    
Over time, equity securities have generally shown gains superior to fixed income
securities, although they have tended to be more volatile in the short term.    
Fixed income securities, regardless of credit quality, also experience price    
volatility, especially in response to interest rate changes. As a result of     
price volatility, there is a risk that you may lose money by investing in a     
Portfolio.                                                                      

REAL ESTATE INVESTING                                                           
Each of the Portfolios invests in companies that are mainly in the real estate  
business (that is, they either (i) derived at least 50% of their revenues or    
profits from the ownership, construction, management, financing or sale of      
residential, commercial or industrial real estate, or (ii) have at least 50% of 
the fair market value of their assets invested in residential, commercial or    
industrial real estate). As a result, these companies (and, therefore, the      
Portfolios) will experience the risks of investing in real estate directly. Real
estate is a cyclical business, highly sensitive to general and local economic   
developments and characterized by intense competition and periodic overbuilding.
Real estate income and values may also be greatly affected by demographic       
trends, such as population shifts or changing tastes and values. Government     
actions, such as tax increases, zoning law changes or environmental regulations,
may also have a major impact on real estate markets. Changing interest rates and
credit quality requirements will also affect the cash flow of real estate       
companies and their ability to meet capital needs.                              
EMERGING MARKET RISKS                                                           
The European Real Estate and Asian Real Estate Portfolios may invest in emerging
market countries, which are countries that major international financial        
institutions, such as the World Bank, generally consider to be less economically
mature than developed nations, such as the United States or most nations in     
Western Europe. Emerging market countries can include every nation in the world 
except the United States, Canada, Japan, Australia, New Zealand, and most       
countries located in Western Europe. Emerging market countries may be more      
likely to experience political turmoil or rapid changes in economic conditions  
than more developed countries, and the financial condition of issuers in        
emerging market countries may be more precarious than in other countries. These 
characteristics result in greater risk of price volatility in emerging market   
countries, which may be heightened by currency fluctuations relative to the U.S.
dollar.                                                                         
DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its                                                                   

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cash or liquid securities to cover its obligations under those instruments. At  
certain levels, this can cause the Portfolio to lose flexibility in managing its
investments properly, responding to shareholder redemption requests, or meeting 
other obligations. If a Portfolio is in that position, it could be forced to    
sell other securities that it wanted to retain.                                 

A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, each Portfolio may invest without limit in certain
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect a Portfolio's performance and   
the Portfolio may not achieve its investment objective.                         
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders. A Portfolio may   
engage in frequent trading of securities to achieve its investment objectives.  

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FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers and/or expense reimbursements from MSDW Investment
Management, which are described in the footnotes below.                         

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                              EUROPEAN REAL ESTATE          ASIAN REAL ESTATE        U.S. REAL ESTATE 
                                   PORTFOLIO                    PORTFOLIO                PORTFOLIO    
                                                                                                      
MANAGEMENT FEES                                                                                       
------------------------------------------------------------------------------------------------------
 CLASS A                             0.80%                        0.80%                    0.80%      
------------------------------------------------------------------------------------------------------
 CLASS B                             0.80%                        0.80%                    0.80%      

12b-1 Fee                                                                                             
------------------------------------------------------------------------------------------------------
 CLASS A                              NONE                        NONE                     NONE       
------------------------------------------------------------------------------------------------------
 CLASS B                             0.25%                        0.25%                    0.25%      

OTHER EXPENSES                                                                                        
------------------------------------------------------------------------------------------------------
 CLASS A                             0.91%                        2.39%                    0.22%      
------------------------------------------------------------------------------------------------------
 CLASS B                             0.91%                        2.05%                    0.22%      

TOTAL ANNUAL FUND OPERATING EXPENSES                                                                  
------------------------------------------------------------------------------------------------------
 CLASS A                             1.71%                        3.19%                    1.02%      
------------------------------------------------------------------------------------------------------
 CLASS B                             1.96%                        3.10%                    1.27%      

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE HIGHEST
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIOS SO THAT ANNUAL OPERATING EXPENSES, EXCLUDING CERTAIN   
INVESTMENT RELATED EXPENSES, AS DESCRIBED BELOW, WILL NOT EXCEED 1.00% FOR      
CLASS A SHARES AND 1.25% FOR CLASS B SHARES.                                    

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR A PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED       
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIOS SHOWN ABOVE.             

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY FEE WAIVER AND/ OR EXPENSE REIMBURSEMENT, THE TOTAL      
OPERATING EXPENSES INCURRED BY INVESTORS WERE 1.00% FOR CLASS A SHARES AND 1.25%
FOR CLASS B SHARES OF THE U.S. REAL ESTATE PORTFOLIO. THE TOTAL OPERATING       
EXPENSES INCURRED BY INVESTORS, INCLUDING CERTAIN INVESTMENT RELATED EXPENSES,  
WERE 1.23% FOR CLASS A SHARES AND 1.47% FOR CLASS B SHARES OF THE EUROPEAN REAL 
ESTATE PORTFOLIO AND 1.01% FOR CLASS A SHARES AND 1.25% FOR CLASS B SHARES OF   
THE ASIAN REAL ESTATE PORTFOLIO. EXCLUDING INVESTMENT RELATED EXPENSES, THE     
OPERATING EXPENSES AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS WERE 1.00%   
FOR CLASS A SHARES AND 1.25% FOR CLASS B SHARES OF THE EUROPEAN REAL ESTATE AND 
ASIAN REAL ESTATE PORTFOLIOS.                                                   

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    
The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
EUROPEAN REAL ESTATE PORTFOLIO                                                                      
----------------------------------------------------------------------------------------------------
 CLASS A                               $174             $539              $928              $2,019  
----------------------------------------------------------------------------------------------------
 CLASS B                               $199             $615             $1,057             $2,285  

ASIAN REAL ESTATE PORTFOLIO                                                                         
----------------------------------------------------------------------------------------------------
 CLASS A                               $322             $983             $1,669             $3,494  
----------------------------------------------------------------------------------------------------
 CLASS B                               $313             $957             $1,625             $3,411  

U.S. REAL ESTATE PORTFOLIO                                                                          
----------------------------------------------------------------------------------------------------
 CLASS A                               $104             $325              $563              $1,248  
----------------------------------------------------------------------------------------------------
 CLASS B                               $129             $403              $697              $1,534  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies (with MSDW Investment Management, the  
"MSDW Investment Management Group"), managed assets of approximately            
$184.8 billion, including assets under fiduciary advice.                        

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                               EUROPEAN             ASIAN REAL             U.S. REAL     
                                              REAL ESTATE             ESTATE                ESTATE       
                                               PORTFOLIO             PORTFOLIO             PORTFOLIO     
                                                                                                         
                                                ---------------------------------------------------      
MANAGEMENT FEE PAID IN FISCAL YEAR ENDED  CLASS A    CLASS B    CLASS A    CLASS B    CLASS A    CLASS B 
                                          ---------------------------------------------------------------
DECEMBER 31, 1999                          0.32%      0.32%      0.00%      0.00%      0.78%      0.78%  
(NET OF WAIVERS AND AS A PERCENTAGE OF                                                                   
AVERAGE NET ASSETS)                                                                                      

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PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

SUBJECT TO THE SUPERVISION OF MSDW INVESTMENT MANAGEMENT AND ITS INVESTMENT     
MANAGEMENT COMMITTEE, THE FOLLOWING INDIVIDUALS, EACH OF WHOM IS EMPLOYED BY A  
MEMBER OF THE MSDW INVESTMENT MANAGEMENT GROUP, HAVE PRIMARY DAY-TO-DAY         
PORTFOLIO MANAGEMENT RESPONSIBILITY FOR THE PORTFOLIOS:                         

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

EUROPEAN REAL ESTATE PORTFOLIO                                                  

THEODORE R. BIGMAN, MANAGING DIRECTOR AND JAN WILLEM DE GEUS, VICE PRESIDENT    

Theodore R. Bigman has primary responsibility for managing MSDW Investment      
Management Group's global real estate securities business. Prior to joining MSDW
Investment Management Group in 1995, he was a Director at CS First Boston, where
he worked for eight years in the Real Estate Group. While at CS First Boston,   
Mr. Bigman established and managed that firm's REIT effort, which included      
primary responsibility for $2.5 billion of initial public offerings by REITs.   
Mr. Bigman graduated from Brandeis University in 1983 with a B.A. in Economics  
and received his M.B.A. from Harvard University in 1987. Jan Willem de Geus     
joined MSDW Investment Management Group in 1997 to establish and manage the     
European Real Estate Portfolio. During March through May 1999, he departed MSDW 
Investment Management Group to act as a consultant in the real estate securities
business. Prior to 1997, he was employed at the Dutch Metalworkers Pensionfund  
(MPMA), where he worked for four years in the international real estate         
department. At the MPMA he was involved in the acquisition of direct real       
estate, was responsible for selecting REIT managers in the United States and was
a portfolio manager of international real estate securities. Mr. de Geus        
graduated from the University of Nijmegen in 1991 with a doctorate in city      
planning with a specialization in real estate and received a masters degree in  
real estate investment from the Pennsylvania State University in 1993. He is    
currently in the final stage of finishing his RBS (the Dutch equivalent of an   
American CFA). Mr. Bigman has shared primary responsibility for managing the    
Portfolio's assets since January 1999. Mr. de Geus had primary responsibility   
for managing the Portfolio's assets from its inception until his departure in   
February 1999 and has shared primary responsibility for managing the Portfolio's
assets since his return in June 1999.                                           

ASIAN REAL ESTATE PORTFOLIO                                                     

THEODORE R. BIGMAN, MANAGING DIRECTOR AND ANGELINE HO, PORTFOLIO MANAGER        

Information about Theodore R. Bigman is included under the European Real Estate 
Portfolio above. Angeline Ho joined MSDW Investment Management Group in 1997.   
Prior to 1997 she was a senior research analyst at Schroder Securities from 1993
to 1995, and at SocGen-Crosby Securities from 1995 to 1997, where she was       
primarily responsible for the coverage of listed real estate securities in      
Singapore and Malaysia. Prior to 1991, she worked for Debenham Tewson           
International where she was involved in property appraisal and consultancy. Ms. 
Ho is a qualified property appraiser, and received a B.Sc. with honours in      
Estate Management from the National University of Singapore and an M.B.A. in    
Accountancy from the Nanyang Technological University. Mr. Bigman has shared    
primary responsibility for managing the Portfolio's assets since June 1999. Ms. 
Ho has shared primary responsibility for managing the Portfolio's assets since  
January 2000.                                                                   

U.S. REAL ESTATE PORTFOLIO                                                      

THEODORE R. BIGMAN, MANAGING DIRECTOR AND DOUGLAS A. FUNKE, VICE PRESIDENT      

Information about Theodore R. Bigman is included under the European Real Estate 
Portfolio above. Douglas A. Funke joined Morgan Stanley in 1993. Currently, he  
is responsible for providing research and analytical support for MSDW Investment
Management Group's real estate securities investment business. Prior to joining 
MSDW Investment Management Group in 1995, he was a member of Morgan Stanley's   
Interest Rate and Foreign Exchange Risk Management Group, where he assisted in  
the execution of more than $3 billion of structured financings and firm-related 
risk management                                                                 

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projects. Mr. Funke graduated from the University of Chicago in 1993 with a B.A.
in Economics and Political Science. He is a member of the National Association  
of Real Estate Investment Trusts and the New York Society of Security Analysts. 
Mr. Bigman has shared primary responsibility for managing the Portfolio's assets
since March 1995. Mr. Funke has shared primary responsibility for managing the  
Portfolio's assets since January 1999.                                          

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of a Portfolio is    
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolios as of the close of the New York Stock     
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of each Portfolio. The minimum additional investment
generally is $1,000 for each account that you have. If the value of your account
falls below the minimum initial investment amount for Class A shares or Class B 
shares as a result of share redemptions, the Fund will notify you. Your account 
may be subject to involuntary conversion from Class A shares to Class B shares  
or involuntary redemption in the case of Class B shares if the value of your    
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

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You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

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To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            

HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but may take up to seven business  
days. However, if you purchased shares by check, the Fund will not distribute   
redemption proceeds until it has collected your purchase payment, which may take
up to eight days. In certain circumstances, for example, if payment of          
redemption proceeds in cash would be detrimental to the remaining shareholders, 
a Portfolio may pay redemption proceeds by a distribution-in-kind of readily    
marketable portfolio securities.                                                

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

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DIVIDENDS AND DISTRIBUTIONS                                                     

Each Portfolio's policy is to distribute to shareholders substantially all of   
its taxable net investment income in the form of quarterly dividends and to     
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           
TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20% and short-term capital gains   
distributions are taxed at ordinary income rates. A Portfolio may be able to    
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
EUROPEAN REAL ESTATE PORTFOLIO                                                  
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                       CLASS A                  
                                                                     -------------------------------------------
                                                                                                    PERIOD FROM 
                                                                                                    OCTOBER 1,  
                                                                     YEAR ENDED DECEMBER 31,         1997* TO   
                                                                     ------------------------      DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                                    1999             1998            1997     
                                                                                                                
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                                 $ 9.58          $  9.52          $ 10.00   
                                                                     ------          -------          -------   
INCOME FROM INVESTMENT OPERATIONS                                                                               
 NET INVESTMENT INCOME (LOSS) (1)                                     (0.05)            0.12             0.05   
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS               (0.17)            0.33            (0.52)  
                                                                     ------          -------          -------   
    TOTAL FROM INVESTMENT OPERATIONS                                  (0.22)            0.45            (0.47)  
                                                                     ------          -------          -------   
DISTRIBUTIONS                                                                                                   
 NET INVESTMENT INCOME                                                (0.18)           (0.25)           (0.01)  
 IN EXCESS OF NET INVESTMENT INCOME                                   (0.02)           (0.14)              --   
                                                                     ------          -------          -------   
    TOTAL DISTRIBUTIONS                                               (0.20)           (0.39)           (0.01)  
                                                                     ------          -------          -------   
NET ASSET VALUE, END OF PERIOD                                       $ 9.16          $  9.58          $  9.52   
                                                                     ======          =======          =======   
TOTAL RETURN                                                          (2.36)%           4.75%           (4.72)% 
                                                                     ======          =======          =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                                   
NET ASSETS, END OF PERIOD (THOUSANDS)                                $9,931          $33,422          $15,177   
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)                            1.23%            1.03%            1.00%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING INTEREST                                                      
  EXPENSE                                                              1.00%            1.00%             N/A   
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (1)               2.33%            1.33%            2.08%**
PORTFOLIO TURNOVER RATE                                                  35%             119%              47%  
-----------------                                                                                               
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE                                                           
   PERIOD:                                                                                                      
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                       $0.01            $0.03            $0.05   
   RATIOS BEFORE EXPENSE LIMITATION:                                                                            
     EXPENSES TO AVERAGE NET ASSETS                                    1.71%            1.43%            3.05%**
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                       1.85%            0.95%            0.03%**
----------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                        CLASS B                    
                                                                     ----------------------------------------------
                                                                                                       PERIOD FROM 
                                                                                                       OCTOBER 1,  
                                                                       YEAR ENDED DECEMBER 31,          1997* TO   
                                                                     ---------------------------      DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                                     1999              1998             1997     
                                                                                                                   
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                                  $ 9.61            $ 9.52           $10.00    
                                                                      ------            ------           ------    
INCOME FROM INVESTMENT OPERATIONS                                                                                  
 NET INVESTMENT INCOME (2)                                              0.19              0.11             0.02    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                (0.43)             0.33            (0.50)   
                                                                      ------            ------           ------    
    TOTAL FROM INVESTMENT OPERATIONS                                   (0.24)             0.44            (0.48)   
                                                                      ------            ------           ------    
DISTRIBUTIONS                                                                                                      
 NET INVESTMENT INCOME                                                 (0.16)            (0.22)              --    
 IN EXCESS OF NET INVESTMENT INCOME                                    (0.02)            (0.13)              --    
                                                                      ------            ------           ------    
    TOTAL DISTRIBUTIONS                                                (0.18)            (0.35)              --    
                                                                      ------            ------           ------    
NET ASSET VALUE, END OF PERIOD                                        $ 9.19            $ 9.61           $ 9.52    
                                                                      ======            ======           ======    
TOTAL RETURN                                                           (2.61)%            4.60%           (4.76)%  
                                                                      ======            ======           ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                      
NET ASSETS, END OF PERIOD (THOUSANDS)                                 $1,786            $2,531             $789    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                             1.47%             1.28%            1.25%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING INTEREST                                                         
  EXPENSE                                                               1.25%             1.25%             N/A    
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)                2.35%             1.15%            1.51%** 
PORTFOLIO TURNOVER RATE                                                   35%              119%              47%   
-----------------                                                                                                  
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                                      
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                        $0.04             $0.04            $0.03    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                               
     EXPENSES TO AVERAGE NET ASSETS                                     1.96%             1.68%            3.12%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS                 1.91%             0.77%           (0.36)%**
-------------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                   
**ANNUALIZED                                                                  

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
ASIAN REAL ESTATE PORTFOLIO                                                     
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                     CLASS A                   
                                                                   --------------------------------------------
                                                                                                   PERIOD FROM 
                                                                                                   OCTOBER 1,  
                                                                    YEAR ENDED DECEMBER 31,         1997* TO   
                                                                   -------------------------      DECEMBER 31, 
            SELECTED PER SHARE DATA AND RATIOS                       1999             1998            1997     
                                                                                                               
---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                                $ 6.63           $ 7.94          $10.00    
                                                                    ------           ------          ------    
INCOME FROM INVESTMENT OPERATIONS                                                                              
 NET INVESTMENT INCOME (1)                                            0.11             0.26            0.11    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS               1.50            (1.24)          (2.10)   
                                                                    ------           ------          ------    
    TOTAL FROM INVESTMENT OPERATIONS                                  1.61            (0.98)          (1.99)   
                                                                    ------           ------          ------    
DISTRIBUTIONS                                                                                                  
 NET INVESTMENT INCOME                                               (0.32)           (0.33)          (0.07)   
 IN EXCESS OF NET INVESTMENT INCOME                                  (0.02)              --              --    
                                                                    ------           ------          ------    
    TOTAL DISTRIBUTIONS                                              (0.34)           (0.33)          (0.07)   
                                                                    ------           ------          ------    
NET ASSET VALUE, END OF PERIOD                                      $ 7.90           $ 6.63          $ 7.94    
                                                                    ======           ======          ======    
TOTAL RETURN                                                         24.27%          (11.82)%        (19.92)%  
                                                                    ======           ======          ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                  
NET ASSETS, END OF PERIOD (THOUSANDS)                               $2,912           $2,447          $2,385    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)                           1.01%            1.05%           1.08%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING INTEREST                                                     
EXPENSE                                                               1.00%            1.00%           1.00%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (1)              1.64%            2.47%           5.21%** 
PORTFOLIO TURNOVER RATE                                                 98%             261%             38%   
-----------------                                                                                              
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE                                                          
   PERIOD:                                                                                                     
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                      $0.15            $0.36           $0.25    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                           
     EXPENSES TO AVERAGE NET ASSETS                                   3.19%            4.52%          12.95%** 
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS              (0.54)%          (1.00)%         (6.66)%**
---------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                    CLASS B                  
                                                                   ------------------------------------------
                                                                                                 PERIOD FROM 
                                                                                                 OCTOBER 1,  
                                                                   YEAR ENDED DECEMBER 31,        1997* TO   
                                                                   -----------------------      DECEMBER 31, 
            SELECTED PER SHARE DATA AND RATIOS                      1999            1998            1997     
                                                                                                             
-------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                               $ 6.66          $ 8.03          $10.00    
                                                                   ------          ------          ------    
INCOME FROM INVESTMENT OPERATIONS                                                                            
 NET INVESTMENT INCOME (2)                                           0.13            0.12              --    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS              1.46           (1.16)          (1.97)   
                                                                   ------          ------          ------    
    TOTAL FROM INVESTMENT OPERATIONS                                 1.59           (1.04)          (1.97)   
                                                                   ------          ------          ------    
DISTRIBUTIONS                                                                                                
 NET INVESTMENT INCOME                                              (0.30)          (0.33)             --    
 IN EXCESS OF NET INVESTMENT INCOME                                 (0.02)             --              --    
                                                                   ------          ------          ------    
    TOTAL DISTRIBUTIONS                                             (0.32)          (0.33)             --    
                                                                   ------          ------          ------    
NET ASSET VALUE, END OF PERIOD                                     $ 7.93          $ 6.66          $ 8.03    
                                                                   ======          ======          ======    
TOTAL RETURN                                                        23.88%         (12.53)%        (19.70)%  
                                                                   ======          ======          ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)                              $1,372          $  761          $    0+   
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                          1.25%           1.38%           1.18%** 
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING INTEREST                                                   
EXPENSE                                                              1.25%           1.25%            N/A    
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)             1.39%           2.39%           4.24%** 
PORTFOLIO TURNOVER RATE                                                98%            261%             38%   
-----------------                                                                                            
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                                
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                     $0.17           $0.18             N/A    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                         
     EXPENSES TO AVERAGE NET ASSETS                                  3.10%           5.03%            N/A    
     NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS             (0.45)%         (1.27)%           N/A    
-------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                   
**ANNUALIZED                                                                  
+AMOUNT IS LESS THAN $500.                                                    

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
U.S. REAL ESTATE PORTFOLIO                                                      
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                          CLASS A                           
                                               -------------------------------------------------------------
                                                                                                PERIOD FROM 
                                                                                               FEBRUARY 24, 
                                                         YEAR ENDED DECEMBER 31,                 1995* TO   
                                               --------------------------------------------    DECEMBER 31, 
    SELECTED PER SHARE DATA AND RATIOS           1999        1998        1997        1996          1995     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD           $  12.71    $  15.38    $  14.41    $  11.42       $ 10.00   
                                               --------    --------    --------    --------       -------   
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                         0.81        0.47        0.42        0.37          0.26   
 NET REALIZED AND UNREALIZED GAIN (LOSS)                                                                    
   ON INVESTMENTS                                 (0.98)      (2.32)       3.40        4.02          1.84   
                                               --------    --------    --------    --------       -------   
    TOTAL FROM INVESTMENT OPERATIONS              (0.17)      (1.85)       3.82        4.39          2.10   
                                               --------    --------    --------    --------       -------   
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                            (0.66)      (0.49)      (0.43)      (0.39)        (0.24)  
 NET REALIZED GAIN                                   --       (0.10)      (2.16)      (1.01)        (0.44)  
 IN EXCESS OF NET REALIZED GAIN                   (0.04)      (0.23)      (0.26)         --            --   
                                               --------    --------    --------    --------       -------   
    TOTAL DISTRIBUTIONS                           (0.70)      (0.82)      (2.85)      (1.40)        (0.68)  
                                               --------    --------    --------    --------       -------   
NET ASSET VALUE, END OF PERIOD                 $  11.84    $  12.71    $  15.38    $  14.41       $ 11.42   
                                               ========    ========    ========    ========       =======   
TOTAL RETURN                                      (1.48)%    (12.29)%    27.62%       39.56%        21.07%  
                                               ========    ========    ========    ========       =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)          $311,064    $259,589    $361,549    $210,368       $69,509   
RATIO OF EXPENSES TO AVERAGE NET                                                                            
  ASSETS (1)                                       1.00%       1.00%       1.00%       1.00%         1.00%**
RATIO OF NET INVESTMENT INCOME TO AVERAGE                                                                   
  NET ASSETS (1)                                   6.52%       3.33%       2.72%       3.08%         4.04%**
PORTFOLIO TURNOVER RATE                              47%        117%        135%        171%          158%  
 ------------------                                                                                         
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
      DURING THE PERIOD:                                                                                    
     PER SHARE BENEFIT TO NET INVESTMENT                                                                    
       INCOME                                     $0.00+      $0.00+      $0.01       $0.02         $0.02   
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                1.02%       1.04%       1.04%       1.14%         1.33%**
     NET INVESTMENT INCOME TO AVERAGE                                                                       
       NET ASSETS                                  6.51%       3.30%       2.68%       2.93%         3.71%**
------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                 CLASS B                    
                                                              ----------------------------------------------
                                                                                                PERIOD FROM 
                                                                                                JANUARY 2,  
                                                                 YEAR ENDED DECEMBER 31,        1996*** TO  
                                                              -----------------------------    DECEMBER 31, 
            SELECTED PER SHARE DATA AND RATIOS                 1999       1998       1997          1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                          $ 12.67    $ 15.34    $ 14.39       $11.50    
                                                              -------    -------    -------       ------    
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                       0.82       0.47       0.47         0.35    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS         (1.02)     (2.35)      3.29         3.92    
                                                              -------    -------    -------       ------    
    TOTAL FROM INVESTMENT OPERATIONS                            (0.20)     (1.88)      3.76         4.27    
                                                              -------    -------    -------       ------    
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                          (0.63)     (0.46)     (0.39)       (0.37)   
 NET REALIZED GAIN                                                 --      (0.10)     (2.16)       (1.01)   
 IN EXCESS OF NET REALIZED GAIN                                 (0.04)     (0.23)     (0.26)          --    
                                                              -------    -------    -------       ------    
    TOTAL DISTRIBUTIONS                                         (0.67)     (0.79)     (2.81)       (1.38)   
                                                              -------    -------    -------       ------    
NET ASSET VALUE, END OF PERIOD                                $ 11.80    $ 12.67    $ 15.34       $14.39    
                                                              =======    =======    =======       ======    
TOTAL RETURN                                                    (1.73)%   (12.52)%    27.21%       38.23%   
                                                              =======    =======    =======       ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                         $13,418    $13,523    $21,231       $8,734    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                      1.25%      1.25%      1.25%        1.25%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)         6.13%      3.23%      3.49%        2.91%** 
PORTFOLIO TURNOVER RATE                                            47%       117%       135%         171%   
 ------------------                                                                                         
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                 $0.00+     $0.01      $0.00+       $0.02    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                              1.27%      1.29%      1.28%        1.37%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                 6.12%      3.20%      3.46%        2.79%** 
------------------------------------------------------------------------------------------------------------

* COMMENCEMENT OF OPERATIONS                                                

** ANNUALIZED                                                                 

*** THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.             

+ AMOUNT IS LESS THAN $0.01 PER SHARE.                                      

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                                                                [Download Table]
                                                                                
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER      EUROPEAN REAL ESTATE       
INSTITUTIONAL FUND, INC.                             PORTFOLIO                  
                                                     ASIAN REAL ESTATE PORTFOLIO
                                                     U.S. REAL ESTATE PORTFOLIO 

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

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

Type of Registration: / / Incorporated / / Unincorporated Association       
/ / Partnership / / Uniform Gift/Transfer to Minor                              
(ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                
/ / Trust -------------------- / / Other (SPECIFY) --------------------         

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                           HOME TELEPHONE NUMBER       BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                     CITY             COUNTRY            POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                     CITY             COUNTRY            POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                          Class A shares minimum $500,000 for each Portfolio and
                       Class B shares minimum $100,000 for each Portfolio.
                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                                       
EUROPEAN REAL ESTATE PORTFOLIO  / / Class A Shares (001)  $ ----------  / / Class B Shares (002) $ --------------------
   ASIAN REAL ESTATE PORTFOLIO  / / Class A Shares (051)  $ ----------  / / Class B Shares (099) $ --------------------
    U.S. REAL ESTATE PORTFOLIO  / / Class A Shares (085)  $ ----------  / / Class B Shares (089) $ --------------------
                                Total Initial Investment  $ ----------                                                 

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
   NAME OF PORTFOLIO
                    ------------------------------------------
ACCOUNT NUMBER      

      Account previously established by:

  / / Phone exchange / / Wire on
           ---------------------------------------
          DATE
                      --------------------------------------------------
        ACCOUNT NUMBER
                                               (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.
                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.
                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                          
/ /  I/we hereby authorize the Fund and its agents to                                                     
     honor any telephone requests to wire redemption                                                      
     proceeds to the commercial bank indicated at right                                                   
     and/or mail redemption proceeds to the name and                                                      
     address in which my/our fund account is registered                                                   
     if such requests are believed to be authentic.      ------------------------                         
     The Fund and the Fund's Transfer Agent will employ  NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)       
     reasonable procedures to confirm that instructions  ------------------------                         
     communicated by telephone are genuine. These        BANK ACCOUNT NUMBER                              
     procedures include requiring the investor to        ------------------------                         
     provide certain personal identification             BANK ABA NUMBER                                  
     information at the time an account is opened and    ------------------------                         
     prior to effecting each transaction requested by    NAME(S) IN WHICH YOUR BANK ACCOUNT IS ESTABLISHED
     telephone. In addition, all telephone transaction   ------------------------                         
     requests will be recorded and investors may be      BANK'S STREET ADDRESS                            
     required to provide additional telecopied written   ------------------------                         
     instructions of transaction requests. Neither the   CITY STATE ZIP CODE                              
     Fund nor the Transfer Agent will be responsible                                                      
     for any loss, liability, cost or expense for                                                         
     following instructions received by telephone that                                                    
     it reasonably believes to be genuine.                                                                

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                     CITY                       STATE       ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
                         -----------------------------------------------------
                    SIGNATURE                                   DATE

                         -----------------------------------------------------
                      SIGNATURE (IF JOINT ACCOUNT, BOTH MUST SIGN)  DATE

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090; (2) On-line: you may retrieve       
information from the EDGAR Database on the Commission's web site at "http://    
www.sec.gov"; or (3) By mail: you may request documents, upon payment of a      
duplicating fee, by writing to Securities and Exchange Commission, Public       
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

A PORTFOLIO OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.       

INTERNATIONAL MAGNUM PORTFOLIO                                                  
THE INTERNATIONAL MAGNUM PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY      
INVESTING PRIMARILY IN EQUITY SECURITIES OF NON-U.S. ISSUERS DOMICILED IN EAFE  
COUNTRIES.                                                                      

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
INTERNATIONAL MAGNUM PORTFOLIO (THE "PORTFOLIO").                               

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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

TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     INTERNATIONAL MAGNUM PORTFOLIO                            1 
     ADDITIONAL RISK FACTORS AND INFORMATION                   2 
FEES AND EXPENSES OF THE PORTFOLIO                             4 
INVESTMENT ADVISER                                             5 
MANAGEMENT FEE                                                 5 
PORTFOLIO MANAGER                                              6 
DISTRIBUTION OF PORTFOLIO SHARES                               6 
SHAREHOLDER INFORMATION                                        6 
FINANCIAL HIGHLIGHTS                                           9 
     INTERNATIONAL MAGNUM PORTFOLIO                            10
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
INTERNATIONAL MAGNUM PORTFOLIO                                                  
------------------------------------------------------------------------------- 

THE INTERNATIONAL MAGNUM PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY      
INVESTING PRIMARILY IN EQUITY SECURITIES OF NON-U.S. ISSUERS DOMICILED IN EAFE  
COUNTRIES.                                                                      
--------------------------------------------------------------------------------

APPROACH                                                                        

MSDW Investment Management seeks to achieve superior long-term returns by       
creating a portfolio of attractively valued international equity securities. To 
achieve this goal, MSDW Investment Management uses a combination of strategic   
geographic asset allocation and fundamental stock selection.                    

PROCESS                                                                         

The Portfolio is managed using a two-part process combining the expertise of    
investment teams based in New York, London, Tokyo and Singapore. The New        
York-based portfolio management team decides upon the appropriate allocation of 
the Portfolio's assets among Europe, Japan and developed Asia, including        
Australia and New Zealand. Regional allocation decisions are based on a variety 
of factors, including relative valuations, earnings expectations, macroeconomic 
factors, as well as input from the regional stock selection teams and from MSDW 
Investment Management's Asset Allocation Group, which is made up of several of  
MSDW Investment Management's most senior investment officers. Once allocations  
to Europe, Asia and Japan have been determined, overseas investment teams in    
London (for European stocks), Tokyo (for Japanese stocks) and Singapore (for    
Asian stocks) decide which stocks to purchase for their respective geographic   
regions. The regional portfolio management teams look for stocks that they      
believe to be attractively valued. The regional specialists analyze each        
company's finances, products and management, typically meeting with each        
company's management before a stock is purchased for the Portfolio. The         
Portfolio invests primarily in countries comprising the MSCI Europe,            
Australasia, Far East (EAFE) Index (the "EAFE Index"). EAFE countries include   
Japan, most nations in Western Europe, Australia, New Zealand, Hong Kong and    
Singapore. However, the Portfolio also may invest up to 5% of its assets in     
countries not included in the EAFE Index, including emerging market countries.  

RISK                                                                            

Investing in the International Magnum Portfolio may be appropriate for you if   
you are willing to accept the risks and uncertainties of investing in the equity
securities of non-U.S. issuers in the hope of earning superior returns. In      
general, prices of equity securities are more volatile than those of fixed      
income securities. The prices of equity securities will rise and fall in        
response to a number of different factors. In particular, prices of equity      
securities will respond to events that affect entire financial markets or       
industries (changes in inflation or consumer demand, for example) and to events 
that affect particular issuers (news about the success or failure of a new      
product, for example). In addition, at times the Portfolio's market sector,     
foreign equity securities, may underperform relative to other sectors.          

THE RISKS OF INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO
IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED   
NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A 
SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE THAN IF  
THE PORTFOLIO WERE DIVERSIFIED. MSDW INVESTMENT MANAGEMENT MAY INVEST IN CERTAIN
INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE CERTAIN TECHNIQUES, SUCH AS       
HEDGING, TO MANAGE RISKS. HOWEVER, MSDW INVESTMENT MANAGEMENT CANNOT GUARANTEE  
THAT IT WILL BE PRACTICAL TO HEDGE THESE RISKS IN CERTAIN MARKETS OR UNDER      
PARTICULAR CONDITIONS OR THAT IT WILL SUCCEED IN DOING SO. MSDW INVESTMENT      
MANAGEMENT MAY USE DERIVATIVES FOR OTHER PURPOSES, SUCH AS GAINING EXPOSURE TO  
FOREIGN MARKETS.                                                                

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
MARCH 15, 1996                      
1997                          6.58% 
1998                          7.33% 
1999                          24.87%
HIGH (QUARTER)                      
1/98 - 3/98                         
14.26%                              
LOW (QUARTER)                       
7/98 - 9/98                         
-17.57%                             

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                        CLASS A             CLASS B                        
                                       (COMMENCED          (COMMENCED                      
                                     OPERATIONS ON       OPERATIONS ON         MSCI EAFE   
                                    MARCH 15, 1996)     MARCH 15, 1996)         INDEX*     
                                                                                           
-------------------------------------------------------------------------------------------
 PAST ONE YEAR                           24.87%              24.58%             26.96%     
-------------------------------------------------------------------------------------------
 SINCE INCEPTION                         12.16%              11.87%             14.09%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE MSCI EAFE INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS IN EUROPE,          
AUSTRALASIA AND THE FAR EAST.                                                 

1                                                             

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--------------------------                                                      
INVESTMENT SUMMARY                                                              
--------------------------------------------------------------------------------
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIO. THE PORTFOLIO'S INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED IN
MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY IS
A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND   
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in the Portfolio is based on the market prices of  
the securities the Portfolio holds. These prices change daily due to economic   
and other events that affect markets generally, as well as those that affect    
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Over time, equity securities have generally shown gains       
superior to fixed income securities, although they have tended to be more       
volatile in the short term. Fixed income securities, regardless of credit       
quality, also experience price volatility, especially in response to interest   
rate changes. As a result of price volatility, there is a risk that you may lose
money by investing in the Portfolio.                                            

FOREIGN INVESTING                                                               
Investing in foreign countries entails the risk that news and events unique to a
country or region will affect those markets and their issuers. These same events
will not necessarily have an effect on the U.S. economy or similar issuers      
located in the United States. In addition, the Portfolio's investments in       
foreign countries generally will be denominated in foreign currencies. As a     
result, changes in the value of a country's currency compared to the U.S. dollar
may affect the value of the Portfolio's investments. These changes may occur    
separately from and in response to events that do not otherwise affect the value
of the security in the issuer's home country. MSDW Investment Management may    
invest in certain instruments, such as derivatives, and may use certain         
techniques, such as hedging, to manage these risks. However, MSDW Investment    
Management cannot guarantee that it will be practical to hedge these risks in   
certain markets or under particular conditions or that it will succeed in       
doing so.                                                                       
EMERGING MARKET RISKS                                                           
Emerging market countries are countries that major international financial      
institutions, such as the World Bank, generally consider to be less economically
mature than developed nations, such as the United States or most nations in     
Western Europe. Emerging market countries can include every nation in the world 
except the United States, Canada, Japan, Australia, New Zealand, and most       
countries located in Western Europe. Emerging market countries may be more      
likely to experience political turmoil or rapid changes in economic conditions  
than more developed countries, and the financial condition of issuers in        
emerging market countries may be more precarious than in other countries. These 
characteristics result in greater risk of price volatility in emerging market   
countries, which may be heightened by currency fluctuations relative to the U.S.
dollar.                                                                         
DERIVATIVES                                                                     
The Portfolio may use various instruments that derive their values from those of
specified securities, indices, currencies or other points of reference for both 
hedging and non-hedging purposes. Derivatives include futures, options, forward 
contracts, swaps, and structured notes. These derivatives, including those used 
to manage risk, are themselves subject to risks of the different markets in     
which they trade and, therefore, may not serve their intended purposes.         
The primary risks of derivatives are: (i) changes in the market value of        
securities held by the Portfolio, and of derivatives relating to those          
securities, may not be proportionate, (ii) there may not be a liquid market for 
the Portfolio to sell a derivative, which could result in difficulty closing a  
position and (iii) certain derivatives can magnify the extent of losses incurred
due to changes in the market value of the securities to which they relate. In   
addition, some derivatives                                                      

2                                                             

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are subject to counterparty risk. To minimize this risk, the Portfolio may enter
into derivatives transactions only with counterparties that meet certain        
requirements for credit quality and collateral. Also, the Portfolio may invest  
in certain derivatives that require the Portfolio to segregate some or all of   
its cash or liquid securities to cover its obligations under those instruments. 
At certain levels, this can cause the Portfolio to lose flexibility in managing 
its investments properly, responding to shareholder redemption requests, or     
meeting other obligations. If the Portfolio is in that position, it could be    
forced to sell other securities that it wanted to retain.                       

The Portfolio will limit its use of derivatives for non-hedging purposes to     
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to the
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolio's investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolio's performance.                                                        

BANK INVESTORS                                                                  

An investment in the Portfolio is not insured or guaranteed by the Federal      
Deposit Insurance Corporation or any other government agency.                   

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, the Portfolio may invest without limit in certain 
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect the Portfolio's performance and 
the Portfolio may not achieve its investment objective.                         
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, the Portfolio will purchase and sell   
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause the Portfolio to incur additional transaction costs and may 
result in taxable gains being passed through to shareholders.                   

3                                                             

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--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE PORTFOLIO                                              
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolio. The      
Portfolio does not charge any sales loads or similar fees when you purchase or  
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                                [Download Table]

                                               INTERNATIONAL MAGNUM PORTFOLIO
                                                                             
MANAGEMENT FEES                                                              
-----------------------------------------------------------------------------
 CLASS A                                                   0.80%             
-----------------------------------------------------------------------------
 CLASS B                                                   0.80%             

12b-1 FEE                                                                    
-----------------------------------------------------------------------------
 CLASS A                                                    NONE             
-----------------------------------------------------------------------------
 CLASS B                                                   0.25%             

OTHER EXPENSES                                                               
-----------------------------------------------------------------------------
 CLASS A                                                   0.31%             
-----------------------------------------------------------------------------
 CLASS B                                                   0.30%             

TOTAL ANNUAL FUND OPERATING EXPENSES                                         
-----------------------------------------------------------------------------
 CLASS A                                                   1.11%             
-----------------------------------------------------------------------------
 CLASS B                                                   1.35%             

*THE MANAGEMENT FEES FOR THE PORTFOLIO SHOWN IN THE TABLE ABOVE ARE THE HIGHEST 
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIO SO THAT TOTAL ANNUAL OPERATING EXPENSES, EXCLUDING      
CERTAIN INVESTMENT RELATED EXPENSES DESCRIBED BELOW, WILL NOT EXCEED 1.00% FOR  
CLASS A SHARES AND 1.25% FOR CLASS B SHARES.                                    

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR THE PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED     
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIO'S TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIO SHOWN ABOVE.              

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE  
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS IN THE PORTFOLIO, INCLUDING      
CERTAIN INVESTMENT RELATED EXPENSES, WERE 1.01% FOR CLASS A SHARES AND 1.25% FOR
CLASS B SHARES. EXCLUDING INVESTMENT RELATED EXPENSES, THE OPERATING EXPENSES   
AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS WERE 1.00% FOR CLASS A SHARES   
AND 1.25% FOR CLASS B SHARES.                                                   

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE       
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    
The example assumes that you invest $10,000 in the Portfolio for the time       
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that the Portfolio's operating expenses remain the same. Although your actual   
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                     1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                   
INTERNATIONAL MAGNUM PORTFOLIO                                                                     
---------------------------------------------------------------------------------------------------
 CLASS A                              $113             $353              $612              $1,352  
---------------------------------------------------------------------------------------------------
 CLASS B                              $137             $428              $739              $1,624  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies, managed assets of approximately       
$184.8 billion, including assets under fiduciary advice.                        

------------------------------------------------------------------------------- 
MANAGEMENT FEE                                                                  
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
the Portfolio the management fee set forth in the table below:                  

                                                        [Enlarge/Download Table]

                                                           INTERNATIONAL MAGNUM PORTFOLIO       
                                                                                                
MANAGEMENT FEE PAID IN FISCAL YEAR                        CLASS A                  CLASS B      
ENDED DECEMBER 31, 1999                                                                         
                                                    --------------------------------------------
(NET OF WAIVERS AND AS A PERCENTAGE OF AVERAGE NET                                              
ASSETS)                                                    0.70%                    0.70%       

5                                                             

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--------------------------------------------------------------------------------
PORTFOLIO MANAGER                                                               
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUAL HAS PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT            
RESPONSIBILITY FOR THE PORTFOLIO:                                               
----------------------------------------------------------------------------    

FRANCINE J. BOVICH                                                              

Francine J. Bovich is a Managing Director of MSDW Investment Management and     
Morgan Stanley. Prior to joining MSDW Investment Management in 1993, she was a  
Principal and Executive Vice President of Westwood Management Corp., a          
registered investment adviser. She began her investment career at Bankers Trust 
Company. She was also a Managing Director of Citicorp Investment Management,    
Inc., where she had responsibility for the Institutional Investment Management  
Group. Ms. Bovich serves as the U.S. Representative to the United Nations       
Investments Committee. Additionally, she serves as an Emeritus Trustee and Chair
of the Investment Sub-Committee for Connecticut College. She is a former board  
member of the YWCA Retirement Fund. Ms. Bovich graduated from Connecticut       
College with a B.A. in Economics and received her M.B.A. in Finance from New    
York University. Ms. Bovich has had primary responsibility for managing the     
Portfolio's assets since its inception.                                         

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of the Portfolio. Morgan Stanley receives no compensation for distributing Class
A shares of the Portfolio. The Fund has adopted a Plan of Distribution with     
respect to the Class B shares of the Portfolio pursuant to Rule 12b-1 (the      
"Plan") under the Investment Company Act of 1940. Under the Plan, the Portfolio 
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of the Portfolio is  
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolio may  
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolio does not calculate NAV.  
As a result, the value of these investments may change on days when you cannot  
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of the Portfolio at the 
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolio as of the close of the New York Stock      
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

6                                                             

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HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of the Portfolio directly    
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares. The minimum additional investment generally is     
$1,000 for each account that you have. If the value of your account falls below 
the minimum initial investment amount for Class A shares or Class B shares as a 
result of share redemptions, the Fund will notify you. Your account may be      
subject to involuntary conversion from Class A shares to Class B shares or      
involuntary redemption in the case of Class B shares if the value of your       
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            

HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, the Portfolio may pay redemption proceeds by a                    
distribution-in-kind of readily marketable portfolio securities.                

7                                                             

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EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of the Portfolio and raise its expenses.      
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

DIVIDENDS AND DISTRIBUTIONS                                                     

The Portfolio's policy is to distribute to shareholders substantially all of its
taxable net investment income in the form of an annual dividend and to          
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           

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TAXES                                                                           
The dividends and distributions you receive from the Portfolio may be subject to
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. The Portfolio may be able to  
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of the Portfolio, you will be subject to tax on any gains  
you earn based on your holding period for the shares. An exchange of shares of  
the Portfolio for shares of another portfolio is a sale of Portfolio shares for 
tax purposes. Conversions of shares between classes will not result in taxation.

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights table is intended to help you understand the 
financial performance of the Class A shares and Class B shares of the Portfolio 
for the past five years or, if less than five years, the life of the Portfolio  
or Class. Certain information reflects financial results for a single Portfolio 
share. The total returns in the table represent the rate that an investor would 
have earned (or lost) on an investment in the Portfolio (assuming reinvestment  
of all dividends and distributions). This information has been audited by       
PricewaterhouseCoopers LLP, whose report, along with the Fund's financial       
statements, are incorporated by reference into the Fund's SAI and are included  
in the Fund's December 31, 1999 Annual Report to Shareholders. The Annual Report
and the Fund's financial statements, as well as the SAI, are available at no    
cost from the Fund at the toll free number noted on the back cover to this      
Prospectus.                                                                     

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
INTERNATIONAL MAGNUM PORTFOLIO                                                  
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                               CLASS A                     
                                                          -------------------------------------------------
                                                                                               PERIOD FROM 
                                                                     YEAR ENDED                 MARCH 15,  
                                                                    DECEMBER 31,                1996* TO   
                                                          --------------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                          1999        1998        1997          1996     
                                                                                                           
-----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                      $  11.57    $  10.87    $  10.66       $ 10.00   
                                                          --------    --------    --------       -------   
INCOME FROM INVESTMENT OPERATIONS                                                                          
 NET INVESTMENT INCOME (1)                                    0.19        0.14        0.17          0.06   
 NET REALIZED AND UNREALIZED GAIN (LOSS)                                                                   
   ON INVESTMENTS                                             2.64        0.66        0.54          0.76   
                                                          --------    --------    --------       -------   
    TOTAL FROM INVESTMENT OPERATIONS                          2.83        0.80        0.71          0.82   
                                                          --------    --------    --------       -------   
DISTRIBUTIONS                                                                                              
 NET INVESTMENT INCOME                                       (0.15)      (0.10)      (0.41)        (0.13)  
 IN EXCESS OF NET INVESTMENT INCOME                             --          --          --         (0.02)  
 NET REALIZED GAIN                                           (0.63)         --       (0.09)        (0.01)  
                                                          --------    --------    --------       -------   
    TOTAL DISTRIBUTIONS                                      (0.78)      (0.10)      (0.50)        (0.16)  
                                                          --------    --------    --------       -------   
NET ASSET VALUE, END OF PERIOD                            $  13.62    $  11.57    $  10.87       $ 10.66   
                                                          ========    ========    ========       =======   
TOTAL RETURN                                                 24.87%       7.33%       6.58%         8.25%  
                                                          ========    ========    ========       =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                              
NET ASSETS, END OF PERIOD (THOUSANDS)                     $188,586    $269,814    $159,096       $85,316   
RATIO OF EXPENSES TO AVERAGE NET ASSETS                       1.01%       1.00%       1.00%         1.00%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                          
  COUNTRY TAX AND INTEREST EXPENSE                            1.00%        N/A         N/A           N/A   
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                              
  ASSETS (1)                                                  0.89%       1.34%       1.44%         0.99%**
PORTFOLIO TURNOVER RATE                                         59%         39%         41%           18%  
-----------------                                                                                          
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE                                                      
   PERIOD:                                                                                                 
     PER SHARE BENEFIT TO NET INVESTMENT INCOME              $0.02       $0.01       $0.02         $0.03   
   RATIOS BEFORE EXPENSE LIMITATION:                                                                       
     EXPENSES TO AVERAGE NET ASSETS                           1.11%       1.13%       1.19%         1.54%**
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS              0.80%       1.24%       1.25%         0.44%**
-----------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                 CLASS B                    
                                                              ----------------------------------------------
                                                                                                PERIOD FROM 
                                                                       YEAR ENDED                MARCH 15,  
                                                                      DECEMBER 31,               1996* TO   
                                                              -----------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                             1999       1998       1997          1996     
                                                                                                            
------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                          $ 11.54    $ 10.84    $ 10.63       $ 10.00   
                                                              -------    -------    -------       -------   
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (2)                                       0.11       0.14       0.16          0.01   
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          2.68       0.64       0.52          0.78   
                                                              -------    -------    -------       -------   
    TOTAL FROM INVESTMENT OPERATIONS                             2.79       0.78       0.68          0.79   
                                                              -------    -------    -------       -------   
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                          (0.12)     (0.08)     (0.38)        (0.13)  
 IN EXCESS OF NET INVESTMENT INCOME                                --         --         --         (0.02)  
 NET REALIZED GAIN                                              (0.63)        --      (0.09)        (0.01)  
                                                              -------    -------    -------       -------   
    TOTAL DISTRIBUTIONS                                         (0.75)     (0.08)     (0.47)        (0.16)  
                                                              -------    -------    -------       -------   
NET ASSET VALUE, END OF PERIOD                                $ 13.58    $ 11.54    $ 10.84       $ 10.63   
                                                              =======    =======    =======       =======   
TOTAL RETURN                                                    24.58%      7.13%      6.33%         7.90%  
                                                              =======    =======    =======       =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)                         $30,770    $26,151    $28,217       $23,173   
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                      1.25%      1.25%      1.25%         1.25%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDING                                                           
  COUNTRY TAX AND INTEREST EXPENSE                               1.25%       N/A        N/A           N/A   
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (2)         0.87%      1.24%      1.19%         0.60%**
PORTFOLIO TURNOVER RATE                                            59%        39%        41%           18%  
-----------------                                                                                           
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                               
     PER SHARE BENEFIT TO NET INVESTMENT INCOME                 $0.01      $0.01      $0.02         $0.01   
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                              1.35%      1.37%      1.44%         1.69%**
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS                 0.54%      1.14%      1.00%         0.15%**
------------------------------------------------------------------------------------------------------------

*COMMENCEMENT OF OPERATIONS                                                   
**ANNUALIZED                                                                  

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                                                                [Download Table]
                                                                         
A PORTFOLIO OF [ICON] MORGAN STANLEY DEAN WITTER                         
INSTITUTIONAL FUND, INC.                             INTERNATIONAL MAGNUM
                                                     PORTFOLIO           

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

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

Type of Registration: / / Incorporated/ / Unincorporated Association/ /     
Partnership                                                                     
/ / Uniform Gift/Transfer to Minor                                              
(ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                
/ / Trust ------ / / Other (SPECIFY) ------                                     

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                           HOME TELEPHONE NUMBER       BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                           CITY                COUNTRY               POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

          --------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

       ---------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

          --------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

       ---------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

          --------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

       ---------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                         Class A shares minimum $500,000 for the Portfolio and
                      Class B shares minimum $100,000 for the Portfolio.
                        Please indicate class and amount for purchase of the
following Portfolio:        

                                                        [Enlarge/Download Table]
                                                                                                       
INTERNATIONAL MAGNUM PORTFOLIO  / / Class A Shares (090)  $---------  / / Class B Shares (033) $ ------
                                Total Initial Investment  $---------                                   

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
    --------------------------------

From                        
    --------------------------------
   NAME OF PORTFOLIO
             -----------------------------------
ACCOUNT NUMBER      

      Account previously established by:

  / / Phone exchange / / Wire on
    --------------------------------
          DATE
                                     -------------------------------------------
        ACCOUNT NUMBER
                                               (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                               
/ /  I/we hereby authorize the Fund and its agents to honor                                                    
     any telephone requests to wire redemption proceeds to                                                     
     the commercial bank indicated at right and/or mail                                                        
     redemption proceeds to the name and address in which                                                      
     my/our fund account is registered if such requests are   --------                                         
     believed to be authentic.                                NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)       
     The Fund and the Fund's Transfer Agent will employ       --------                                         
     reasonable procedures to confirm that instructions       BANK ACCOUNT NUMBER                              
     communicated by telephone are genuine. These procedures  --------                                         
     include requiring the investor to provide certain        BANK ABA NUMBER                                  
     personal identification information at the time an       --------                                         
     account is opened and prior to effecting each            NAME(S) IN WHICH YOUR BANK ACCOUNT IS ESTABLISHED
     transaction requested by telephone. In addition, all     --------                                         
     telephone transaction requests will be recorded and      BANK'S STREET ADDRESS                            
     investors may be required to provide additional          --------                                         
     telecopied written instructions of transaction           CITY STATE ZIP CODE                              
     requests. Neither the Fund nor the Transfer Agent will                                                    
     be responsible for any loss, liability, cost or expense                                                   
     for following instructions received by telephone that                                                     
     it reasonably believes to be genuine.                                                                     

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                     CITY                       STATE       ZIP CODE
DEALER INFORMATION                                      

                      --------------------------------------------------
                        REPRESENTATIVE NAME  REPRESENTATIVE NUMBER    BRANCH
NUMBER                      
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
    --------------------------------
SIGNATURE     DATE          
    --------------------------------
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the Portfolio.
The SAI is incorporated by reference into this Prospectus and, therefore,       
legally forms a part of this Prospectus.                                        

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about the Portfolio's  
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
the Portfolio's performance during that period.                                 

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at "http://    
www.sec.gov"; or (3) By mail: you may request documents, upon payment of a      
duplicating fee, by writing to Securities and Exchange Commission, Public       
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[ICON] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 
PORTFOLIOS OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

ASIAN EQUITY PORTFOLIO                                                          
THE ASIAN EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING    
PRIMARILY IN EQUITY SECURITIES OF ASIAN ISSUERS.                                

JAPANESE EQUITY PORTFOLIO                                                       
THE JAPANESE EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING 
PRIMARILY IN EQUITY SECURITIES OF JAPANESE ISSUERS.                             

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"). 

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     ASIAN EQUITY PORTFOLIO                                   1  
     JAPANESE EQUITY PORTFOLIO                                2  
     ADDITIONAL RISK FACTORS AND INFORMATION                  3  
FEES AND EXPENSES OF THE PORTFOLIOS                           5  
INVESTMENT ADVISER                                            6  
MANAGEMENT FEES                                               6  
PORTFOLIO MANAGERS                                            7  
DISTRIBUTION OF PORTFOLIO SHARES                              8  
SHAREHOLDER INFORMATION                                       8  
FINANCIAL HIGHLIGHTS                                          10 
     ASIAN EQUITY PORTFOLIO                                   11 
     JAPANESE EQUITY PORTFOLIO                                12 
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ASIAN EQUITY PORTFOLIO                                                          
------------------------------------------------------------------------------- 

THE ASIAN EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING    
PRIMARILY IN EQUITY SECURITIES OF ASIAN ISSUERS.                                
--------------------------------------------------------------------------------
APPROACH                                                                        
MSDW Investment Management seeks to achieve long-term capital appreciation by   
investing in a diversified portfolio of equity securities of issuers in Asian   
countries, excluding Japan. MSDW Investment Management employs a disciplined,   
value-oriented approach to security selection, focusing on larger companies with
strong management teams. MSDW Investment Management evaluates top-down country  
risk factors and opportunities when determining position sizes and overall      
exposure to individual markets.                                                 
PROCESS                                                                         

MSDW Investment Management emphasizes its internal research of the leading      
companies as the basis for stock selection. This research process encompasses   
analysis of historical financial statements, identification of the potential for
future earnings and cash flows, valuation of key assets, discussions with       
analysts to determine consensus expectations and an evaluation of the strength  
and depth of management. Visits with management are central to this process.    
Depending on the type of company, factors considered in selecting securities    
include price to sales, price to earnings, price to cash flow, price to book    
value and price to replacement value of assets. MSDW Investment Management      
considers valuation on an absolute basis and relative to market average and     
comparable companies in the region and emphasizes stocks where a catalyst can be
identified which will correct undervaluation. MSDW Investment Management        
combines bottom-up stock evaluation with a thorough analysis of risk factors and
opportunities within individual Asian countries. The team evaluates             
macroeconomic and political factors when determining overall exposures within   
individual countries.                                                           

RISK                                                                            

Investing in the Asian Equity Portfolio may be appropriate for you if you are   
willing to accept the risks and uncertainties of investing in the equity        
securities of issuers in emerging markets in the hope of earning superior       
returns and diversifying your investment portfolio. In general, prices of equity
securities are more volatile than those of fixed income securities. The prices  
of equity securities will rise and fall in response to a number of different    
factors. In particular, prices of equity securities will respond to events that 
affect entire financial markets or industries (changes in inflation or consumer 
demand, for example) and to events that affect particular issuers (news about   
the success or failure of a new product, for example). In addition, at times the
Portfolio's market sector, equity securities of Asian issuers, may underperform 
relative to other sectors.                                                      

THE PORTFOLIO INVESTS PRIMARILY IN EMERGING MARKET COUNTRIES. EMERGING MARKET   
COUNTRIES ARE COUNTRIES THAT MAJOR INTERNATIONAL FINANCIAL INSTITUTIONS, SUCH AS
THE WORLD BANK, GENERALLY CONSIDER TO BE LESS ECONOMICALLY MATURE THAN DEVELOPED
NATIONS, SUCH AS THE UNITED STATES OR MOST NATIONS IN WESTERN EUROPE. EMERGING  
MARKET COUNTRIES CAN INCLUDE EVERY NATION IN THE WORLD EXCEPT THE UNITED STATES,
CANADA, JAPAN, AUSTRALIA, NEW ZEALAND, AND MOST COUNTRIES LOCATED IN WESTERN    
EUROPE. EMERGING MARKET COUNTRIES MAY BE MORE LIKELY TO EXPERIENCE POLITICAL    
TURMOIL OR RAPID CHANGES IN ECONOMIC CONDITIONS THAN MORE DEVELOPED COUNTRIES,  
AND THE FINANCIAL CONDITION OF ISSUERS IN EMERGING MARKET COUNTRIES MAY BE MORE 
PRECARIOUS THAN IN OTHER COUNTRIES. THESE CHARACTERISTICS RESULT IN GREATER RISK
OF PRICE VOLATILITY IN EMERGING MARKET COUNTRIES, WHICH MAY BE HEIGHTENED BY    
CURRENCY FLUCTUATIONS RELATIVE TO THE U.S. DOLLAR.                              

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON JULY         
1, 1991                              
1992                          26.42% 
1993                          105.71%
1994                          -15.81%
1995                          6.87%  
1996                          3.49%  
1997                          -48.29%
1998                          -11.38%
1999                          81.00% 
HIGH (QUARTER)                       
10/93 - 12/93                        
49.56%                               
LOW (QUARTER)                        
10/97 - 12/97                        
-37.43%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                   CLASS A          CLASS B             MSCI ALL-COUNTRY      
                                  (COMMENCED       (COMMENCED            FAR EAST FREE        
                                OPERATIONS ON    OPERATIONS ON          EX-JAPAN INDEX*       
                                JULY 1, 1991)   JANUARY 2, 1996)    CLASS A        CLASS B    
                                                                                              
----------------------------------------------------------------------------------------------
 PAST ONE YEAR                      81.00%           79.95%          59.40%         59.40%    
----------------------------------------------------------------------------------------------
 PAST FIVE YEARS                    -1.71%            N/A            0.78%           N/A      
----------------------------------------------------------------------------------------------
 SINCE INCEPTION                    9.06%            -4.15%          10.20%         -1.21%    

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI ALL-COUNTRY FAR EAST FREE EX-JAPAN INDEX IS AN UNMANAGED INDEX OF     
 COMMON STOCKS AND INCLUDES CHINA, INDONESIA, HONG KONG, THE PHILIPPINES, KOREA,
SINGAPORE, TAIWAN AND THAILAND.                                               

1                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
JAPANESE EQUITY PORTFOLIO                                                       
------------------------------------------------------------------------------- 

THE JAPANESE EQUITY PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING 
PRIMARILY IN EQUITY SECURITIES OF JAPANESE ISSUERS.                             
--------------------------------------------------------------------------------
APPROACH                                                                        
MSDW Investment Management seeks to achieve long-term capital appreciation by   
investing in a diversified portfolio of equity securities of Japanese issuers   
that are undervalued relative to their intrinsic assets, cash flow and earnings 
potential.                                                                      

PROCESS                                                                         

MSDW Investment Management conducts a quantitative screening of Japanese        
companies, including both large-cap and small-cap issuers. The screening is     
designed to identify undervalued issuers, based on price-to-book value,         
price-to-cash flow and other value-oriented criteria. MSDW Investment Management
analysts conduct fundamental analysis on the 25% of companies that quantitative 
screening indicate are most undervalued, with an emphasis on financial          
structure, strategic value of assets, business franchise, product line and      
management quality and focus. Company visits also are a normal part of the      
investment process. MSDW Investment Management closely monitors companies that  
are no longer among the 25% most undervalued and generally sells the securities 
following a material fundamental disappointment in earnings or when they are no 
longer among the one-third most undervalued securities.                         

RISK                                                                            

Investing in the Japanese Equity Portfolio may be appropriate for you if you are
willing to accept the risks and uncertainties of investing in the equity        
securities of issuers in Japan in the hope of achieving superior returns and    
diversifying your investment portfolio. In general, prices of equity securities 
are more volatile than those of fixed income securities. The prices of equity   
securities will rise and fall in response to a number of different factors. In  
particular, prices of equity securities will respond to events that affect      
entire financial markets or industries (changes in inflation or consumer demand,
for example) and to events that affect particular issuers (news about the       
success or failure of a new product, for example). In addition, at times the    
Portfolio's market sector, equity securities of Japanese issuers, may           
underperform relative to other sectors.                                         

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
APRIL 25, 1994                      
1995                          -3.64%
1996                          -1.40%
1997                          -9.23%
1998                          8.82% 
1999                          63.75%
HIGH (QUARTER)                      
4/97 - 6/97                         
25.58%                              
LOW (QUARTER)                       
10/97 - 12/97                       
-20.29%                             

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                    CLASS A          CLASS B                                      
                                  (COMMENCED        (COMMENCED                                    
                                 OPERATIONS ON    OPERATIONS ON           MSCI JAPAN INDEX*       
                                APRIL 25, 1994)  JANUARY 2, 1996)     CLASS A          CLASS B    
                                                                                                  
--------------------------------------------------------------------------------------------------
 PAST ONE YEAR                      63.75%            63.46%           61.53%          61.53%     
--------------------------------------------------------------------------------------------------
 PAST FIVE YEARS                     8.97%             N/A             1.96%             N/A      
--------------------------------------------------------------------------------------------------
 SINCE INCEPTION                     7.52%            12.01%           2.07%            2.48%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI JAPAN INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS.                   

2                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY
IS A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

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

PRICE VOLATILITY                                                                

The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Over time, equity securities have generally shown gains       
superior to fixed income securities, although they have tended to be more       
volatile in the short term. Fixed income securities, regardless of credit       
quality, also experience price volatility, especially in response to interest   
rate changes. As a result of market volatility, there is a risk that you might  
lose money by investing in a Portfolio.                                         

FOREIGN INVESTING                                                               
Investing in foreign countries entails the risk that news and events unique to a
country or region will affect those markets and their issuers. These same events
will not necessarily have an effect on the U.S. economy or similar issuers      
located in the United States. In addition, a Portfolio's investments generally  
will be denominated in foreign currencies. As a result, changes in the value of 
a country's currency compared to the U.S. dollar may affect the value of a      
Portfolio's investments. These changes may occur separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. MSDW Investment Management may invest in certain instruments, such
as derivatives, and may use certain techniques, such as hedging, to manage these
risks. However, MSDW Investment Management cannot guarantee that it will be     
practical to hedge these risks in certain markets or under particular conditions
or that it will succeed in doing so.                                            

DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its cash or liquid securities to cover its obligations under those    
instruments. At certain levels, this can cause the Portfolio to lose flexibility
in managing its investments properly, responding to shareholder redemption      
requests, or meeting other obligations. If a Portfolio is in that position, it  
could be forced to sell other securities that it wanted to retain.              

A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

3                                                             

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INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, each Portfolio may invest without limit in certain
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect a Portfolio's performance and   
the Portfolio may not achieve its investment objective.                         

PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause a Portfolio to incur additional transaction costs and may   
result in taxable gains being passed through to shareholders. The Asian Equity  
Portfolio may engage in frequent trading of securities to achieve its investment
objective.                                                                      

4                                                             

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FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolios. The     
Portfolios do not charge any sales loads or similar fees when you purchase or   
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                                [Download Table]

                                          ASIAN EQUITY  JAPANESE EQUITY
                                           PORTFOLIO       PORTFOLIO   
                                                                       
MANAGEMENT FEES                                                        
-----------------------------------------------------------------------
 CLASS A                                     0.80%           0.80%     
-----------------------------------------------------------------------
 CLASS B                                     0.80%           0.80%     

12b-1 FEE                                                              
-----------------------------------------------------------------------
 CLASS A                                      NONE           NONE      
-----------------------------------------------------------------------
 CLASS B                                     0.25%           0.25%     

OTHER EXPENSES                                                         
-----------------------------------------------------------------------
 CLASS A                                     0.81%           0.34%     
-----------------------------------------------------------------------
 CLASS B                                     0.82%           0.34%     

TOTAL ANNUAL FUND OPERATING EXPENSES                                   
-----------------------------------------------------------------------
 CLASS A                                     1.61%           1.14%     
-----------------------------------------------------------------------
 CLASS B                                     1.87%           1.39%     

*THE MANAGEMENT FEES FOR THE PORTFOLIOS SHOWN IN THE TABLE ABOVE ARE THE HIGHEST
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIOS SO THAT ANNUAL OPERATING EXPENSES, EXCLUDING CERTAIN   
INVESTMENT RELATED EXPENSES, AS DESCRIBED BELOW, WILL NOT EXCEED 1.00% FOR CLASS
A SHARES AND 1.25% FOR CLASS B SHARES.                                          

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR A PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED       
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIOS' TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIOS SHOWN ABOVE.                     

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY FEE WAIVER AND/ OR EXPENSE REIMBURSEMENT, THE TOTAL      
OPERATING EXPENSES INCURRED BY INVESTORS, INCLUDING CERTAIN INVESTMENT RELATED  
EXPENSES, WERE 1.07% FOR CLASS A SHARES AND 1.32% FOR CLASS B SHARES OF THE     
ASIAN EQUITY PORTFOLIO AND 1.01% FOR CLASS A SHARES AND 1.26% FOR CLASS B SHARES
OF THE JAPANESE EQUITY PORTFOLIO. EXCLUDING INVESTMENT RELATED EXPENSES, THE    
OPERATING EXPENSES AFTER FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS WERE 1.00%   
FOR CLASS A SHARES AND 1.25% FOR CLASS B SHARES.                                

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    
The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                                [Download Table]

                                1 YEAR  3 YEARS  5 YEARS  10 YEARS
                                                                  
ASIAN EQUITY PORTFOLIO                                            
------------------------------------------------------------------
 CLASS A                         $164    $508     $876     $1,911 
------------------------------------------------------------------
 CLASS B                         $190    $588    $1,011    $2,190 

JAPANESE EQUITY PORTFOLIO                                         
------------------------------------------------------------------
 CLASS A                         $116    $362     $628     $1,386 
------------------------------------------------------------------
 CLASS B                         $142    $440     $761     $1,669 

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies (with MSDW Investment Management, the  
"MSDW Investment Management Group"), managed assets of approximately            
$184.8 billion, including assets under fiduciary advice.                        

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                                [Download Table]

                                    ASIAN            JAPANESE    
                                    EQUITY            EQUITY     
                                  PORTFOLIO         PORTFOLIO    
                               ----------------------------------
                                                                 
MANAGEMENT FEE PAID IN FISCAL                                    
YEAR                           CLASS A  CLASS B  CLASS A  CLASS B
ENDED DECEMBER 31, 1999                                          
                               ----------------------------------
(NET OF WAIVERS AND AS A                                         
PERCENTAGE OF AVERAGE NET                                        
ASSETS)                         0.26%    0.26%    0.67%    0.67% 

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--------------------------------------------------------------------------------
PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

SUBJECT TO THE SUPERVISION OF MSDW INVESTMENT MANAGEMENT AND ITS INVESTMENT     
MANAGEMENT COMMITTEE, THE FOLLOWING INDIVIDUALS, EACH OF WHOM IS EMPLOYED BY A  
MEMBER OF THE MSDW INVESTMENT MANAGEMENT GROUP, HAVE PRIMARY DAY-TO-DAY         
PORTFOLIO MANAGEMENT RESPONSIBILITY FOR THE PORTFOLIOS:                         

----------------------------------------------------------------------------    
ASIAN EQUITY PORTFOLIO                                                          

ASHUTOSH SINHA, PRINCIPAL                                                       

Ashutosh Sinha joined MSDW Investment Management Group in 1995. Currently, he is
a member of the Group's Emerging Markets Equity Group, focusing primarily on    
Asian Markets other than Japan. Prior to 1995, he spent two years at SBI Funds  
Management Ltd., where he was an analyst for the India Magnum Fund. Previous to 
that, he worked for three years as a consultant for Citicorp Overseas Software  
Ltd. Mr. Sinha graduated from the Indian Institute of Technology, Kanpur, with a
degree in Electrical Engineering and received an M.B.A from the Indian Institute
of Management, Calcutta. Mr. Sinha has had primary responsibility for managing  
the Portfolio's assets since August 1996.                                       

JAPANESE EQUITY PORTFOLIO                                                       

JOHN R. ALKIRE, MANAGING DIRECTOR AND KUNIHIKO SUGIO, MANAGING DIRECTOR         

John R. Alkire joined MSDW Investment Management Group in 1981 to initiate      
foreign equity sales and trading to Pacific basin institutions and was appointed
President of Morgan Stanley Investment Advisory, Japan in October 1993. Prior to
1993, he specialized in Japanese warrants and cash equity sales and trading to  
Japanese financial institutions in the Tokyo office. Mr. Alkire is a graduate of
the University of Victoria, Canada. Kunihiko Sugio joined MSDW Investment       
Management Group in 1993. Currently, he manages dedicated Japanese equity       
portfolios. Prior to 1993, he worked with Baring International Investment       
Management, Tokyo, where he was a Director and fund manager. Mr. Sugio graduated
from Wakayama Kokuritsu University. Messrs. Alkire and Sugio have shared primary
responsibility for managing the Portfolio's assets since its inception in 1995. 

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--------------------------------------------------------------------------------
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, each Portfolio
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of the Portfolio is  
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        

PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolios as of the close of the New York Stock     
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of each Portfolio. The minimum additional investment
generally is $1,000 for each account that you have. If the value of your account
falls below the minimum initial investment amount for Class A shares or Class B 
shares as a result of share redemptions, the Fund will notify you. Your account 
may be subject to involuntary conversion from Class A shares to Class B shares  
or involuntary redemption in the case of Class B shares if the value of your    
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   

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purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            
HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, a Portfolio may pay redemption proceeds by a distribution-in-kind 
of readily marketable portfolio securities.                                     

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

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DIVIDENDS AND DISTRIBUTIONS                                                     

Each Portfolio's policy is to distribute to shareholders substantially all of   
its taxable net investment income in the form of an annual dividend and to      
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           

TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. A Portfolio may be able to    
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights tables are intended to help you understand   
the financial performance of the Class A shares and Class B shares of each      
Portfolio for the past five years or, if less than five years, the life of the  
Portfolio or Class. Certain information reflects financial results for a single 
Portfolio share. The total returns in the tables represent the rate that an     
investor would have earned (or lost) on an investment in each Portfolio         
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's 
financial statements, are incorporated by reference into the Fund's SAI and are 
included in the Fund's December 31, 1999 Annual Report to Shareholders. The     
Annual Report and the Fund's financial statements, as well as the SAI, are      
available at no cost from the Fund at the toll free number noted on the back    
cover to this Prospectus.                                                       

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
ASIAN EQUITY PORTFOLIO                                                          
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                      CLASS A                        
                                               ----------------------------------------------------- 
                                                              YEAR ENDED DECEMBER 31,                
                                               ----------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS               1999       1998       1997       1996       1995    
                                                                                                     
---------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD           $   8.01    $  9.43   $  18.73   $  19.48   $  21.54  
                                               --------    -------   --------   --------   --------  
INCOME FROM INVESTMENT OPERATIONS                                                                    
 NET INVESTMENT INCOME (1)                         0.06       0.12       0.14       0.17       0.18  
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                          
   INVESTMENTS                                     6.42      (1.24)     (8.93)      0.50       1.11  
                                               --------    -------   --------   --------   --------  
    TOTAL FROM INVESTMENT OPERATIONS               6.48      (1.12)     (8.79)      0.67       1.29  
                                               --------    -------   --------   --------   --------  
DISTRIBUTIONS                                                                                        
 NET INVESTMENT INCOME                            (0.10)     (0.30)     (0.00)+    (0.15)     (0.34) 
 IN EXCESS OF NET INVESTMENT INCOME                  --         --         --      (0.00)+    (0.00)+
 NET REALIZED GAIN                                   --         --         --      (1.27)     (3.01) 
 IN EXCESS OF NET REALIZED GAIN                      --         --      (0.51)        --         --  
                                               --------    -------   --------   --------   --------  
    TOTAL DISTRIBUTIONS                           (0.10)     (0.30)     (0.51)     (1.42)     (3.35) 
                                               --------    -------   --------   --------   --------  
NET ASSET VALUE, END OF PERIOD                 $  14.39    $  8.01   $   9.43   $  18.73   $  19.48  
                                               ========    =======   ========   ========   ========  
TOTAL RETURN                                      81.00%    (11.38)%   (48.29)%     3.49%      6.87% 
                                               ========    =======   ========   ========   ========  
RATIOS AND SUPPLEMENTAL DATA:                                                                        
NET ASSETS, END OF PERIOD (THOUSANDS)          $103,513    $51,334    $85,503   $363,498   $314,884  
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)        1.07%      1.19%      1.12%      1.00%      1.00% 
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                              
  EXCLUDING INTEREST EXPENSE                       1.00%      1.00%      1.00%       N/A        N/A  
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                        
  ASSETS (1)                                       0.58%      1.36%      0.47%      0.74%      0.97% 
PORTFOLIO TURNOVER RATE                             197%       151%       107%        69%        42% 
-----------------                                                                                    
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                           
     DURING THE PERIOD:                                                                              
     PER SHARE BENEFIT TO NET INVESTMENT                                                             
     INCOME                                       $0.06      $0.05      $0.05      $0.05      $0.03  
    RATIOS BEFORE EXPENSE LIMITATION:                                                                
     EXPENSES TO AVERAGE NET ASSETS                1.61%      1.79%      1.31%      1.25%      1.18% 
     NET INVESTMENT INCOME TO AVERAGE NET                                                            
       ASSETS                                      0.04%      0.76%      0.29%      0.54%      0.79% 
---------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                  CLASS B                    
                                               ----------------------------------------------
                                                                                 PERIOD FROM 
                                                                                 JANUARY 2,  
                                                   YEAR ENDED DECEMBER 31,       1996*** TO  
                                               -------------------------------  DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS               1999       1998       1997         1996     
                                                                                             
---------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD            $  7.97    $  9.40    $ 18.74      $ 19.55   
                                                -------    -------    -------      -------   
INCOME FROM INVESTMENT OPERATIONS                                                            
 NET INVESTMENT INCOME (2)                         0.05       0.07       0.03         0.11   
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                  
 INVESTMENTS                                       6.34      (1.20)     (8.86)        0.46   
                                                -------    -------    -------      -------   
    TOTAL FROM INVESTMENT OPERATIONS               6.39      (1.13)     (8.83)        0.57   
                                                -------    -------    -------      -------   
DISTRIBUTIONS                                                                                
 NET INVESTMENT INCOME                            (0.08)     (0.30)     (0.00)+      (0.11)  
 IN EXCESS OF NET INVESTMENT INCOME                  --         --         --           --   
 NET REALIZED GAIN                                   --         --         --        (1.27)  
 IN EXCESS OF NET REALIZED GAIN                      --         --      (0.51)          --   
                                                -------    -------    -------      -------   
    TOTAL DISTRIBUTIONS                           (0.08)     (0.30)     (0.51)       (1.38)  
                                                -------    -------    -------      -------   
NET ASSET VALUE, END OF PERIOD                  $ 14.28    $  7.97    $  9.40      $ 18.74   
                                                =======    =======    =======      =======   
TOTAL RETURN                                      79.95%    (11.53)%   (48.48)%       2.92%  
                                                =======    =======    =======      =======   
RATIOS AND SUPPLEMENTAL DATA:                                                                
NET ASSETS, END OF PERIOD (THOUSANDS)           $ 2,828    $ 1,487    $ 1,468      $11,002   
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)        1.32%      1.47%      1.37%        1.25%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                      
EXCLUDING INTEREST EXPENSE                         1.25%      1.25%      1.25%         N/A   
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                
ASSETS (2)                                         0.33%      1.06%      0.18%        0.58%**
PORTFOLIO TURNOVER RATE                             197%       151%       107%          69%  
-----------------                                                                            
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                   
     DURING THE PERIOD:                                                                      
     PER SHARE BENEFIT TO NET INVESTMENT                                                     
     INCOME                                       $0.08      $0.04      $0.04        $0.04   
    RATIOS BEFORE EXPENSE LIMITATION:                                                        
     EXPENSES TO AVERAGE NET ASSETS                1.87%      2.07%      1.56%        1.52%**
     NET INVESTMENT INCOME (LOSS) TO AVERAGE                                                 
     NET ASSETS                                   (0.22)%     0.46%     (0.01)%       0.37%**
---------------------------------------------------------------------------------------------

**ANNUALIZED                                                                  
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            
+AMOUNT IS LESS THAN $0.01 PER SHARE.                                         

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
JAPANESE EQUITY PORTFOLIO                                                       
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                       CLASS A                         
                                               --------------------------------------------------------
                                                               YEAR ENDED DECEMBER 31,                 
                                               --------------------------------------------------------
SELECTED PER SHARE DATA AND RATIOS              1999++      1998       1997      1996++        1995    
                                                                                                       
-------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD            $  6.18    $  5.89   $   7.96   $   9.27     $   9.83  
                                                -------    -------   --------   --------     --------  
INCOME FROM INVESTMENT OPERATIONS                                                                      
 NET INVESTMENT INCOME (LOSS) (1)                 (0.02)      0.04       0.17         --         0.04  
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                                            
   INVESTMENTS+                                    3.96       0.48      (0.94)     (0.13)       (0.40) 
                                                -------    -------   --------   --------     --------  
    TOTAL FROM INVESTMENT OPERATIONS               3.94       0.52      (0.77)     (0.13)       (0.36) 
                                                -------    -------   --------   --------     --------  
DISTRIBUTIONS                                                                                          
 NET INVESTMENT INCOME                               --      (0.23)     (1.30)     (0.66)          --  
 IN EXCESS OF NET INVESTMENT INCOME                  --         --         --      (0.52)       (0.20) 
                                                -------    -------   --------   --------     --------  
    TOTAL DISTRIBUTIONS                              --      (0.23)     (1.30)     (1.18)       (0.20) 
                                                -------    -------   --------   --------     --------  
NET ASSET VALUE, END OF PERIOD                  $ 10.12    $  6.18   $   5.89   $   7.96     $   9.27  
                                                =======    =======   ========   ========     ========  
TOTAL RETURN                                      63.75%      8.82%     (9.23)%    (1.40)%      (3.64)%
                                                =======    =======   ========   ========     ========  
RATIOS AND SUPPLEMENTAL DATA:                                                                          
NET ASSETS, END OF PERIOD (THOUSANDS)           $73,666    $57,755    $77,086   $152,229     $119,278  
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)        1.01%      1.11%      1.06%      1.00%        1.00% 
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                                
  EXCLUDING INTEREST EXPENSE                       1.00%      1.00%      1.00%       N/A          N/A  
RATIO OF NET INVESTMENT INCOME (LOSS) TO                                                               
  AVERAGE NET ASSETS (1)                          (0.28)%     0.03%     (0.21)%    (0.04)%       0.15% 
PORTFOLIO TURNOVER RATE                              26%        66%        40%        38%          52% 
-----------------                                                                                      
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                             
    DURING THE PERIOD:                                                                                 
     PER SHARE BENEFIT TO NET INVESTMENT                                                               
       INCOME (LOSS)                              $0.01      $0.01      $0.01      $0.01        $0.06  
    RATIOS BEFORE EXPENSE LIMITATION:                                                                  
     EXPENSES TO AVERAGE NET ASSETS                1.14%      1.30%      1.14%      1.07%        1.20% 
     NET INVESTMENT LOSS TO AVERAGE NET                                                                
       ASSETS                                     (0.41)%    (0.14)%    (0.28)%    (0.11)%      (0.05)%
-------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                               CLASS B                  
                                               ---------------------------------------- 
                                                                           PERIOD FROM  
                                                                           JANUARY 2,   
                                                YEAR ENDED DECEMBER 31,     1996** TO   
                                               -------------------------  DECEMBER 31,  
SELECTED PER SHARE DATA AND RATIOS             1999++    1998     1997       1996++     
                                                                                        
--------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD           $  6.13  $  5.87  $ 7.94      $ 9.25     
                                               -------  -------  ------      ------     
INCOME FROM INVESTMENT OPERATIONS                                                       
 NET INVESTMENT INCOME (LOSS) (2)                 0.08    (0.09)   0.09       (0.02)    
 NET REALIZED AND UNREALIZED GAIN (LOSS) ON                                             
 INVESTMENTS                                      3.81     0.58   (0.89)      (0.14)    
                                               -------  -------  ------      ------     
    TOTAL FROM INVESTMENT OPERATIONS              3.89     0.49   (0.80)      (0.16)    
                                               -------  -------  ------      ------     
DISTRIBUTIONS                                                                           
 NET INVESTMENT INCOME                              --    (0.23)  (1.27)      (0.64)    
 IN EXCESS OF NET INVESTMENT INCOME                 --       --      --       (0.51)    
                                               -------  -------  ------      ------     
    TOTAL DISTRIBUTIONS                             --    (0.23)  (1.27)      (1.15)    
                                               -------  -------  ------      ------     
NET ASSET VALUE, END OF PERIOD                 $ 10.02  $  6.13  $ 5.87      $ 7.94     
                                               =======  =======  ======      ======     
TOTAL RETURN                                     63.46%    8.33%  (9.64)%     (1.67)%   
                                               =======  =======  ======      ======     
RATIOS AND SUPPLEMENTAL DATA:                                                           
NET ASSETS, END OF PERIOD (THOUSANDS)          $ 3,538  $ 1,083  $1,703      $3,431     
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)       1.26%    1.36%   1.31%       1.25%*   
RATIO OF EXPENSES TO AVERAGE NET ASSETS                                                 
EXCLUDING INTEREST                                                                      
  EXPENSE                                         1.25%    1.25%   1.25%        N/A     
RATIO OF NET INVESTMENT INCOME (LOSS) TO                                                
AVERAGE NET ASSETS (2)                           (0.57)%   (0.25)%  (0.53)%     (0.26)%*
PORTFOLIO TURNOVER RATE                             26%      66%     40%         38%    
-----------------                                                                       
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                           
     PER SHARE BENEFIT TO NET INVESTMENT                                                
     INCOME (LOSS)                               $0.01    $0.02   $0.01       $0.01     
    RATIOS BEFORE EXPENSE LIMITATION:                                                   
     EXPENSES TO AVERAGE NET ASSETS               1.39%    1.55%   1.38%       1.31%*   
     NET INVESTMENT LOSS TO AVERAGE NET                                                 
     ASSETS                                      (0.67)%   (0.42)%  (0.60)%     (0.32)%*
--------------------------------------------------------------------------------------- 

*ANNUALIZED                                                                 
**THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.             
+THE AMOUNT SHOWN FOR THE YEAR ENDED DECEMBER 31, 1995 FOR A SHARE OUTSTANDING
THROUGHOUT THE YEAR DOES NOT AGREE WITH THE AMOUNT OF AGGREGATE NET GAINS ON
  INVESTMENTS FOR THE YEAR BECAUSE OF THE TIMING OF SALES AND REPURCHASES OF THE
  PORTFOLIO SHARES IN RELATION TO FLUCTUATING MARKET VALUE OF THE INVESTMENTS IN
THE PORTFOLIO.                                                              

++PER SHARE AMOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1996 ARE BASED
ON AVERAGE SHARES OUTSTANDING.                                          

12                                                            

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                                                                [Download Table]
                                                                              
PORTFOLIOS OF [ICON] MORGAN STANLEY DEAN WITTER      ASIAN EQUITY PORTFOLIO   
INSTITUTIONAL FUND, INC.                             JAPANESE EQUITY PORTFOLIO

ACCOUNT REGISTRATION FORM 
ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

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

                                                        [Enlarge/Download Table]
                                                                                       
  Type of Registration: / / Incorporated/ / Unincorporated Association/ / Partnership  
/ / Uniform Gift/Transfer to Minor                                                     
    (ONLY ONE CUSTODIAN AND MINOR PERMITTED)                                           
/ / Trust -------------------- / / Other (SPECIFY) --------------------                

MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
CITY COUNTRY POSTAL CODE  

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
CITY COUNTRY POSTAL CODE  

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")
                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")
                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                        ----------------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")
                     -----------------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                          Class A shares minimum $500,000 for each Portfolio and
                       Class B shares minimum $100,000 for each Portfolio.

                   Please indicate Portfolio, class and amount for
           purchase of the following Portfolio(s):

                                                        [Enlarge/Download Table]
                                                                                                               
   ASIAN EQUITY PORTFOLIO  / / Class A Shares (057) $---------  / / Class B Shares (035) $ --------------------
JAPANESE EQUITY PORTFOLIO  / / Class A Shares (080) $---------  / / Class B Shares (068) $ --------------------
                           Total Initial Investment $---------                                                 

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------
NAME OF PORTFOLIO           
                    ------------------------------------------
ACCOUNT NUMBER        

      Account previously established by:

  / / Phone exchange / / Wire on
           ---------------------------------------
DATE  
                      --------------------------------------------------
        ACCOUNT NUMBER
                           (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                        
/ /  I/we hereby authorize the Fund and its agents to honor                                             
     any telephone requests to wire redemption proceeds to                                              
     the commercial bank indicated at right and/or mail                                                 
     redemption proceeds to the name and address in which                                               
     my/our fund account is registered if such requests are   ------------------------                  
     believed to be authentic.                                NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)
     The Fund and the Fund's Transfer Agent will employ       ------------------------                  
     reasonable procedures to confirm that instructions       BANK ACCOUNT NUMBER                       
     communicated by telephone are genuine. These procedures  ------------------------                  
     include requiring the investor to provide certain        BANK ABA NUMBER                           
     personal identification information at the time an       ------------------------                  
     account is opened and prior to effecting each            NAME(S) IN WHICH YOUR BANK ACCOUNT IS     
     transaction requested by telephone. In addition, all     ESTABLISHED                               
     telephone transaction requests will be recorded and      ------------------------                  
     investors may be required to provide additional          BANK'S STREET ADDRESS                     
     telecopied written instructions of transaction           ------------------------                  
     requests. Neither the Fund nor the Transfer Agent will   CITY STATE ZIP CODE                       
     be responsible for any loss, liability, cost or expense                                            
     for following instructions received by telephone that                                              
     it reasonably believes to be genuine.                                                              

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                  CITY                          STATE ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 

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           ---------------------------------------
SIGNATURE     DATE          
           ---------------------------------------
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the           
Portfolios. The SAI is incorporated by reference into this Prospectus and,      
therefore, legally forms a part of this Prospectus.                             

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about each Portfolio's 
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
each Portfolio's performance during that period.                                

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI and shareholder reports without charge by contacting the 
Fund at the toll-free number above. If you purchased shares through a Financial 
Intermediary, you may also obtain these documents, without charge, by contacting
your Financial Intermediary.                                                    

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways:      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at             
"http://www.sec.gov"; or (3) By mail: you may request documents, upon payment of
a duplicating fee, by writing to Securities and Exchange Commission, Public     
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 
PORTFOLIOS OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.        

CHINA GROWTH PORTFOLIO                                                          

THE CHINA GROWTH PORTFOLIO SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION BY   
INVESTING PRIMARILY IN EQUITY SECURITIES OF ISSUERS IN THE PEOPLE'S REPUBLIC OF 
CHINA, HONG KONG AND TAIWAN.                                                    

GOLD PORTFOLIO                                                                  
THE GOLD PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY  
IN THE EQUITY SECURITIES OF FOREIGN AND DOMESTIC ISSUERS ENGAGED IN GOLD-RELATED
ACTIVITIES.                                                                     

MICROCAP PORTFOLIO                                                              
THE MICROCAP PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING        
PRIMARILY IN GROWTH ORIENTED EQUITY SECURITIES OF SMALL CORPORATIONS.           

MORTGAGE-BACKED SECURITIES PORTFOLIO                                            
THE MORTGAGE-BACKED SECURITIES PORTFOLIO SEEKS TO PRODUCE AS HIGH A LEVEL OF    
CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL BY INVESTING   
PRIMARILY IN A VARIETY OF INVESTMENT GRADE MORTGAGE-BACKED SECURITIES.          

MUNICIPAL BOND PORTFOLIO                                                        

THE MUNICIPAL BOND PORTFOLIO SEEKS TO PRODUCE A HIGH LEVEL OF CURRENT INCOME    
CONSISTENT WITH PRESERVATION OF PRINCIPAL BY INVESTING PRIMARILY IN MUNICIPAL   
OBLIGATIONS, THE INTEREST ON WHICH IS EXEMPT FROM FEDERAL INCOME TAX.           

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           
DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
PORTFOLIOS LISTED ABOVE (EACH A "PORTFOLIO" AND COLLECTIVELY THE "PORTFOLIOS"). 
THE CHINA GROWTH, MICROCAP AND MORTGAGE-BACKED SECURITES PORTFOLIOS CURRENTLY   
ARE NOT BEING OFFERED. THE GOLD PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS  
WITH THE EXCEPTION OF CERTAIN MORGAN STANLEY EMPLOYEES AND CUSTOMERS, CERTAIN   
TAX-QUALIFIED RETIREMENT PLANS AND OTHER INVESTMENT COMPANIES ADVISED BY MSDW   
INVESTMENT MANAGEMENT.                                                          

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.                                             

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TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     CHINA GROWTH PORTFOLIO                                    1 
     GOLD PORTFOLIO                                            2 
     MICROCAP PORTFOLIO                                        3 
     MORTGAGE-BACKED SECURITIES PORTFOLIO                      4 
     MUNICIPAL BOND PORTFOLIO                                  5 
     ADDITIONAL RISK FACTORS AND INFORMATION                   6 
FEES AND EXPENSES OF THE PORTFOLIOS                            8 
INVESTMENT ADVISER AND SUB-ADVISER                             9 
MANAGEMENT FEES                                                9 
PORTFOLIO MANAGERS                                            10 
DISTRIBUTION OF PORTFOLIO SHARES                              11 
SHAREHOLDER INFORMATION                                       11 

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
CHINA GROWTH PORTFOLIO                                                          
------------------------------------------------------------------------------- 
THE CHINA GROWTH PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING    
PRIMARILY IN EQUITY SECURITIES OF ISSUERS IN THE PEOPLE'S REPUBLIC OF CHINA,    
HONG KONG AND TAIWAN.                                                           
APPROACH                                                                        
MSDW Investment Management seeks to maximize long-term capital appreciation by  
investing in the equity securities of issuers located in The People's Republic  
of China, Hong Kong and Taiwan that exhibit strong or accelerating earnings     
growth. In addition, the Portfolio may also invest in securities of issuers     
located in other Asian countries, such as Singapore, Malaysia, the Philippines, 
Indonesia, Korea, Vietnam and Thailand.                                         
PROCESS                                                                         
MSDW Investment Management relies on its research capabilities, analytical      
resources and experience to identify well established companies with consistent 
or rising earnings growth records and that present accelerating growth          
prospects. MSDW Investment Management rigorously studies company developments,  
including changes in strategy, management focus and results, and closely        
monitors analysts' expectations to ascertain issuers that have the potential for
positive earnings surprises versus consensus expectations.                      
RISK                                                                            
Investing in the China Growth Portfolio may be appropriate for you if you are   
willing to accept the risks and uncertainties of investing in the equity        
securities of issuers in China and other foreign countries in the hope of       
earning superior returns. In general, prices of equity securities are more      
volatile than those of fixed income securities. The prices of equity securities 
will rise and fall in response to a number of different factors. In particular, 
prices of equity securities will respond to events that affect entire financial 
markets or industries (changes in inflation or consumer demand, for example) and
to events that affect particular issuers (news about the success or failure of a
new product, for example). In addition, at times the Portfolio's market sector, 
equity securities of Chinese issuers, may underperform relative to other        
sectors.                                                                        
    INVESTING IN FOREIGN COUNTRIES, PARTICULARLY EMERGING MARKETS,
         ENTAILS THE RISK THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR REGION
         WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS WILL
           NOT NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR ISSUERS
LOCATED IN THE UNITED STATES. IN ADDITION, THE PORTFOLIO'S
       INVESTMENTS IN FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN
          FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE VALUE OF A COUNTRY'S
      CURRENCY COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE OF THE
          PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR SEPARATELY FROM AND
         IN RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE OF THE
           SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY
     INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE
          CERTAIN TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER,
           MSDW INVESTMENT MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL
 TO HEDGE THESE RISKS IN CERTAIN MARKETS OR UNDER PARTICULAR
  CONDITIONS OR THAT IT WILL SUCCEED IN DOING SO. THE RISKS OF
         INVESTING IN THE PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO
           IS NON-DIVERSIFIED, WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A
  LIMITED NUMBER OF ISSUERS. AS A RESULT, THE PERFORMANCE OF A
          PARTICULAR INVESTMENT OR A SMALL GROUP OF INVESTMENTS MAY AFFECT THE
          PORTFOLIO'S PERFORMANCE MORE THAN IF THE PORTFOLIO WERE DIVERSIFIED.

A BAR CHART AND TABLE SHOWING THE PERFORMANCE OF THE PORTFOLIO IS NOT PROVIDED  
BECAUSE, AS OF DECEMBER 31, 1999, THE CHINA GROWTH PORTFOLIO HAD NOT COMMENCED  
OPERATIONS.                                                                     

1                                                             

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
GOLD PORTFOLIO                                                                  
------------------------------------------------------------------------------- 

THE GOLD PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY  
IN EQUITY SECURITIES OF ISSUERS ENGAGED IN GOLD-RELATED ACTIVITIES.             
APPROACH                                                                        
MSDW Investment Management and Sun Valley Gold Company ("Sun Valley Gold") as   
investment sub-adviser, seek to maximize long-term capital appreciation by      
investing in domestic and foreign companies engaged in the exploration, mining, 
fabrication, processing, distribution or trading of gold and, to a lesser       
extent, other precious metals.                                                  
PROCESS                                                                         
Sun Valley Gold employs a flexible investment program in an attempt to identify 
securities of issuers engaged in gold-related activities that offer the         
potential for capital appreciation. Sun Valley Gold evaluates various countries 
and regions based on factors such as political stability and economic outlook.  
Based on this evaluation, they select particular countries and issuers for      
investment by the Portfolio. Because most of the world's gold production is     
outside of the United States, the Portfolio frequently invests in securities of 
foreign issuers, particularly those located in Canada, Australia and South      
Africa.                                                                         
RISK                                                                            
Investing in the Gold Portfolio may be appropriate for you if you are willing to
accept the risks and uncertainties of investing in a portfolio of equity        
securities of foreign and domestic issuers engaged in gold-related activities.  
In general, prices of equity securities are more volatile than those of fixed   
income securities. The prices of equity securities will rise and fall in        
response to a number of different factors. In particular, prices of equity      
securities will respond to events that affect entire financial markets or       
industries (changes in inflation or consumer demand, for example) and to events 
that affect particular issuers (news about the success or failure of a new      
product, for example). The Portfolio's concentration in investments in          
gold-related issuers may expose it to risks unique to that industry. In         
addition, at times the Portfolio's market sector, securities of gold-related    
related issuers, may underperform relative to other sectors.                    
TO THE EXTENT THAT THE PORTFOLIO INVESTS IN SECURITIES OF FOREIGN ISSUERS, THERE
IS THE RISK THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR REGION WILL AFFECT THOSE
MARKETS AND THEIR ISSUERS. THESE SAME EVENTS WILL NOT NECESSARILY HAVE AN EFFECT
ON THE U.S. ECONOMY OR SIMILAR ISSUERS LOCATED IN THE UNITED STATES. IN         
ADDITION, THE PORTFOLIO'S INVESTMENTS IN FOREIGN COUNTRIES GENERALLY WILL BE    
DENOMINATED IN FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE VALUE OF A       
COUNTRY'S CURRENCY COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE OF A        
PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR SEPARATELY FROM AND IN RESPONSE
TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE OF THE SECURITY IN THE ISSUER'S
HOME COUNTRY. SUN VALLEY GOLD MAY INVEST IN CERTAIN INSTRUMENTS, SUCH AS        
DERIVATIVES, AND MAY USE CERTAIN TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE   
RISKS. HOWEVER, SUN VALLEY GOLD CANNOT GUARANTEE THAT IT WILL BE PRACTICAL TO   
HEDGE THESE RISKS IN CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS OR THAT IT  
WILL SUCCEED IN DOING SO.                                                       

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)         
                                     
COMMENCED OPERATIONS ON              
FEBRUARY 1, 1994                     
1995                          13.21% 
1996                          16.94% 
1997                          -55.64%
HIGH (QUARTER)                       
1/96-3/96                            
34.50%                               
LOW (QUARTER)                        
10/97-12/97                          
-34.99%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                                     CLASS A           CLASS B                PHILADELPHIA          
                                   (COMMENCED         (COMMENCED             GOLD AND SILVER        
                                  OPERATIONS ON     OPERATIONS ON                INDEX*             
                                FEBRUARY 1, 1994)  JANUARY 2, 1996)     CLASS A          CLASS B    
                                                                                                    
----------------------------------------------------------------------------------------------------
 PAST ONE YEAR                          %                 %                %                %       
----------------------------------------------------------------------------------------------------
 SINCE INCEPTION                        %                 %                %                %       

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE PHILADELPHIA GOLD AND SILVER INDEX IS AN UNMANAGED INDEX COMPRISED OF THE  
LEADING COMPANIES INVOLVED IN THE MINING OF GOLD AND SILVER.                  

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INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
MICROCAP PORTFOLIO                                                              
------------------------------------------------------------------------------- 
THE MICROCAP PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING        
PRIMARILY IN GROWTH-ORIENTED EQUITY SECURITIES OF SMALL COMPANIES.              
APPROACH                                                                        
MSDW Investment Management seeks to maximize long-term capital appreciation by  
investing in small, growth-oriented domestic and, to a limited extent, foreign  
companies. The universe of eligible companies generally includes those with     
annual gross revenues of $150 million or less or market capitalizations of $250 
million or less.                                                                
PROCESS                                                                         
MSDW Investment Management employs a flexible investment program in an attempt  
to identify issuers early in their life cycle with the potential for long-term  
growth. MSDW Investment Management uses its judgment and research capabilities  
to assess economic, industry, market and company developments to identify       
promising companies that are expected to benefit from new technology or new     
products or services. In addition, MSDW Investment Management looks for special 
developments, such as research discoveries, changes in customer demand,         
rejuvenated management or basic changes in the economic environment.            
RISK                                                                            
Investing in the MicroCap Portfolio may be appropriate for you if you are       
willing to accept the risks and uncertainties of investing in a portfolio of    
equity securities of small issuers. In general, prices of equity securities are 
more volatile than those of fixed income securities. The prices of equity       
securities will rise and fall in response to a number of different factors. In  
particular, prices of equity securities will respond to events that affect      
entire financial markets or industries (changes in inflation or consumer demand,
for example) and to events that affect particular issuers (news about the       
success or failure of a new product, for example).                              
         THE RISK OF INVESTING IN EQUITY SECURITIES IS INTENSIFIED IN THE CASE
        OF THE SMALL COMPANIES IN WHICH THE PORTFOLIO INVESTS. MARKET PRICES
       FOR SUCH COMPANIES' EQUITY SECURITIES TEND TO BE MORE VOLATILE THAN
    THOSE OF LARGER, MORE ESTABLISHED COMPANIES. SMALL COMPANIES MAY
 THEMSELVES BE MORE VULNERABLE TO ECONOMIC OR COMPANY SPECIFIC
         PROBLEMS. IN ADDITION, AT TIMES THE PORTFOLIO'S MARKET SECTOR, EQUITY
      SECURITIES OF SMALLER ISSUERS, MAY UNDER PERFORM RELATIVE TO OTHER
SECTORS.                                                    
     TO THE EXTENT THAT THE PORTFOLIO INVESTS IN SECURITIES OF FOREIGN
          ISSUERS, THERE IS THE RISK THAT NEWS AND EVENTS UNIQUE TO A COUNTRY OR
         REGION WILL AFFECT THOSE MARKETS AND THEIR ISSUERS. THESE SAME EVENTS
      WILL NOT NECESSARILY HAVE AN EFFECT ON THE U.S. ECONOMY OR SIMILAR
      ISSUERS LOCATED IN THE UNITED STATES. IN ADDITION, THE PORTFOLIO'S
     INVESTMENTS IN FOREIGN COUNTRIES GENERALLY WILL BE DENOMINATED IN
        FOREIGN CURRENCIES. AS A RESULT, CHANGES IN THE VALUE OF A COUNTRY'S
    CURRENCY COMPARED TO THE U.S. DOLLAR MAY AFFECT THE VALUE OF THE
        PORTFOLIO'S INVESTMENTS. THESE CHANGES MAY OCCUR SEPARATELY FROM AND
       IN RESPONSE TO EVENTS THAT DO NOT OTHERWISE AFFECT THE VALUE OF THE
         SECURITY IN THE ISSUER'S HOME COUNTRY. MSDW INVESTMENT MANAGEMENT MAY
   INVEST IN CERTAIN INSTRUMENTS, SUCH AS DERIVATIVES, AND MAY USE
        CERTAIN TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE RISKS. HOWEVER,
         MSDW INVESTMENT MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE PRACTICAL
          TO HEDGE THESE RISKS IN CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS
      OR THAT IT WILL SUCCEED IN DOING SO. THE RISKS OF INVESTING IN THE
          PORTFOLIO MAY BE INTENSIFIED BECAUSE THE PORTFOLIO IS NON-DIVERSIFIED,
       WHICH MEANS THAT IT MAY INVEST IN SECURITIES OF A LIMITED NUMBER OF
         ISSUERS. AS A RESULT, THE PERFORMANCE OF A PARTICULAR INVESTMENT OR A
          SMALL GROUP OF INVESTMENTS MAY AFFECT THE PORTFOLIO'S PERFORMANCE MORE
THAN IF THE PORTFOLIO WERE DIVERSIFIED.                     

A BAR CHART AND TABLE SHOWING THE PERFORMANCE OF THE PORTFOLIO IS NOT PROVIDED  
BECAUSE, AS OF DECEMBER 31, 1999, THE MICROCAP PORTFOLIO HAD NOT COMMENCED      
OPERATIONS.                                                                     

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
MORTGAGE-BACKED SECURITIES PORTFOLIO                                            
------------------------------------------------------------------------------- 

THE MORTGAGE-BACKED SECURITIES PORTFOLIO SEEKS TO PRODUCE AS HIGH A LEVEL OF    
CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL BY INVESTING   
PRIMARILY IN A VARIETY OF INVESTMENT GRADE MORTGAGE-BACKED SECURITIES.          

APPROACH                                                                        
MSDW Investment Management seeks to preserve capital and produce an attractive  
real rate of return by emphasizing investment in high quality (i.e., those rated
in the three highest rating categories or believed to be of equivalent quality) 
short- and intermediate-term mortgage-backed securities. The investment process 
is designed to achieve an attractive return through gradual shifts in portfolio 
maturity.                                                                       

PROCESS                                                                         
MSDW Investment Management assesses current and projected market and economic   
conditions and, based on its evaluation, sets an annual target rate of return   
for the Portfolio. MSDW Investment Management manages the Portfolio primarily   
using gradual shifts in maturities to achieve the target rate of return. Short- 
and intermediate-term mortgage-backed securities form the core of the Portfolio.
The Portfolio may hold long-term securities (i.e., securities with maturities   
over 10 years) when MSDW Investment Management believes that they will enhance  
return without significantly increasing risk. Typically, the Portfolio expects  
to invest at least 75% of its assets in mortgage-backed securities issued or    
guaranteed by the U.S. Government, its agencies or instrumentalities or rated in
the highest rating category. However, the Portfolio may invest up to 15% in     
mortgage-backed securities rated in the third highest rating category or, if    
unrated, believed by MSDW Investment Management to be of equivalent quality.    

RISK                                                                            
Investing in the Mortgage-Backed Securities Portfolio may be appropriate for you
if you are willing to accept the risks and uncertainties of investing in fixed  
income securities, and mortgage-backed securities in particular. Although most  
of the Portfolio's investments are issued or guaranteed by the U.S. Government  
or its instrumentalities or rated in the top three rating categories, or of     
equivalent quality, market risks, particularly changes in interest rates, will  
still affect the prices of fixed income securities. Moreover, mortgage-backed   
securities are subject to prepayment risk. In addition, at times the Portfolio's
market sector, mortgage-backed securities, may underperform relative to other   
sectors.                                                                        

MORTGAGE-BACKED SECURITIES ARE FIXED-INCOME SECURITIES REPRESENTING AN INTEREST 
IN A POOL OF UNDERLYING MORTGAGE LOANS. THEY ARE SENSITIVE TO CHANGES IN        
INTEREST RATES, BUT MAY RESPOND TO THESE CHANGES DIFFERENTLY FROM OTHER FIXED   
INCOME SECURITIES DUE TO THE POSSIBILITY OF PREPAYMENT OF THE UNDERLYING        
MORTGAGE LOANS. AS A RESULT, IT MAY NOT BE POSSIBLE TO DETERMINE IN ADVANCE THE 
ACTUAL MATURITY DATE OR AVERAGE LIFE OF A MORTGAGE-BACKED SECURITY. RISING      
INTEREST RATES TEND TO DISCOURAGE REFINANCINGS, WITH THE RESULT THAT THE AVERAGE
LIFE AND VOLATILITY OF THE SECURITY WILL INCREASE AND ITS MARKET PRICE WILL     
DECREASE. WHEN INTEREST RATES FALL, HOWEVER, MORTGAGE-BACKED SECURITIES MAY NOT 
GAIN AS MUCH IN MARKET VALUE BECAUSE ADDITIONAL MORTGAGE PREPAYMENTS MUST BE    
REINVESTED AT LOWER INTEREST RATES. PREPAYMENT RISK MAY MAKE IT DIFFICULT TO    
CALCULATE THE AVERAGE MATURITY OF A PORTFOLIO OF MORTGAGE-BACKED SECURITIES AND,
THEREFORE, TO ASSESS THE VOLATILITY RISK OF THAT PORTFOLIO.                     

A BAR CHART AND TABLE SHOWING THE PERFORMANCE OF THE PORTFOLIO IS NOT PROVIDED  
BECAUSE, AS OF DECEMBER 31, 1999, THE MORTGAGE-BACKED SECURITIES PORTFOLIO HAD  
NOT COMMENCED OPERATIONS.                                                       

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

INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
MUNICIPAL BOND PORTFOLIO                                                        
------------------------------------------------------------------------------- 

THE MUNICIPAL BOND PORTFOLIO SEEKS TO PRODUCE A HIGH LEVEL OF CURRENT INCOME    
CONSISTENT WITH PRESERVATION OF PRINCIPAL BY INVESTING PRIMARILY IN MUNICIPAL   
OBLIGATIONS, THE INTEREST ON WHICH IS EXEMPT FROM FEDERAL INCOME TAX.           

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

APPROACH                                                                        

MSDW Investment Management seeks to preserve capital and produce an attractive  
real rate of return by emphasizing investment in investment grade (i.e., those  
rated in the four highest rating categories or believed to be of equivalent     
quality) intermediate- and long-term obligations that pay interest that is      
exempt from federal income tax and in certain instances from state and local    
taxes. The investment process is designed to capture value in the municipal     
market through credit analysis, recognition of relative value and trade         
execution.                                                                      

PROCESS                                                                         

MSDW Investment Management assesses the relative yields available on securities 
of different maturities and its expectations of future changes in interest      
rates. Based on evolving economic and credit market conditions, MSDW Investment 
Management adjusts the Portfolio's average maturity, usually in a range between 
7 and 10 years. Individual portfolio securities are municipal obligations issued
by various states, territories and possessions of the United States and the     
District of Columbia, and their political subdivisions, agencies and            
instrumentalities, with an emphasis on general obligation and essential purpose 
revenue bonds. The Portfolio has a fundamental policy of investing, under normal
circumstances, at least 80% of its assets in municipal obligations rated        
investment grade at the time of investment, or futures and options on futures   
relating to these municipal obligations. The Portfolio will not invest more than
20% of its assets in municipal obligations that pay interest subject to the     
alternative minimum tax. The Portfolio may invest up to 20% of its assets in    
cash, cash equivalents, U.S. Government securities and investment grade         
corporate fixed income securities. Typically, at least 65% of the Portfolio's   
assets will be invested in municipal obligations having an initial maturity of  
more than a year.                                                               

RISK                                                                            

Investing in the Municipal Bond Portfolio may be appropriate for you if you are 
willing to accept the risks and uncertainties of investing in municipal fixed   
income securities. Although the Portfolio's investments in municipal obligations
are rated investment grade, or of equivalent quality, market risks, particularly
changes in interest rates, will still affect the prices of fixed income         
securities. In addition, at times the Portfolio's market sector, municipal      
bonds, may underperform relative to other sectors.                              

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
JANUARY 18, 1995                    
1996                          3.67% 
1997                          7.25% 
1998                          5.52% 
1999                          -1.79%
HIGH (QUARTER)                      
7/98 - 9/98                         
3.07%                               
LOW (QUARTER)                       
4/99 - 6/99                         
-1.66%                              

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)           

                                                        [Enlarge/Download Table]

                                          CLASS A           CLASS B**        LEHMAN 7-YEAR  
                                        (COMMENCED         (COMMENCED          MUNICIPAL    
                                       OPERATIONS ON      OPERATIONS ON       BOND INDEX*   
                                     JANUARY 18, 1995)  JANUARY 2, 1996)                    
                                                                                            
--------------------------------------------------------------------------------------------
 PAST ONE YEAR                            -1.79%               N/A              -0.14%      
--------------------------------------------------------------------------------------------
 SINCE INCEPTION                           4.67%               N/A               6.02%      

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST
DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE.     

*THE LEHMAN 7-YEAR MUNICIPAL BOND INDEX CONSISTS OF INVESTMENT GRADE BONDS WITH 
MATURITIES BETWEEN 6-8 YEARS, RATED BAA OR BETTER. ALL BONDS HAVE BEEN TAKEN  
FROM ISSUES OF AT LEAST $50 MILLION IN SIZE SOLD WITHIN THE LAST FIVE YEARS.  

**NO PAST PERFORMANCE INFORMATION IS PROVIDED FOR CLASS B SHARES BECAUSE THERE  
CURRENTLY ARE NO CLASS B SHAREHOLDERS.                                      

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATED TO THE   
PORTFOLIOS. THE PORTFOLIOS' INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED  
IN MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION, WHICH LEGALLY IS A   
PART OF THIS PROSPECTUS. FOR DETAILS ABOUT HOW TO OBTAIN A COPY OF THE STATEMENT
OF ADDITIONAL INFORMATION AND OTHER REPORTS AND INFORMATION, SEE THE BACK COVER 
OF THIS PROSPECTUS.                                                             
----------------------------------------------------------------------------    

PRICE VOLATILITY                                                                
The value of your investment in a Portfolio is based on the market prices of the
securities the Portfolio holds. These prices change daily due to economic and   
other events that affect markets generally, as well as those that affect        
particular regions, countries, industries or companies. These price movements,  
sometimes called volatility, may be greater or lesser depending on the types of 
securities the Portfolio owns and the markets in which the securities trade.    
Over time, equity securities have generally shown superior gains, although they 
have tended to be more volatile than fixed income securities in the short term. 
Fixed income securities, regardless of credit quality, also experience price    
volatility, especially in response to interest rate changes. As a result of     
price volatility, there is a risk that you may lose money by investing in a     
Portfolio.                                                                      

FIXED INCOME SECURITIES                                                         
Investments in fixed income securities are subject to credit risk and market    
risk. Credit risk is the possibility that an issuer may be unable to meet its   
scheduled principal and interest payments. Market risk is the possibility that a
change in interest rates or the market's perception of an issuer's prospects may
adversely affect the value of a fixed income security. Generally, fixed income  
securities decrease in value as interest rates rise and vice versa. Prices of   
longer term securities also are generally more volatile, so the average maturity
of portfolio securities affects risk.                                           

EMERGING MARKET RISKS                                                           
Emerging market countries are countries that major international financial      
institutions, such as the World Bank, generally consider to be less economically
mature than developed nations, such as the United States or most nations in     
Western Europe. Emerging market countries can include every nation in the world 
except the United States, Canada, Japan, Australia, New Zealand, and most       
countries located in Western Europe. Emerging market countries may be more      
likely to experience political turmoil or rapid changes in economic conditions  
than more developed countries, and the financial condition of issuers in        
emerging market countries may be more precarious than in other countries. These 
characteristics result in greater risk of price volatility in emerging market   
countries, which may be heightened by currency fluctuations relative to the U.S.
dollar.                                                                         

DERIVATIVES                                                                     
The Portfolios may use various instruments that derive their values from those  
of specified securities, indices, currencies or other points of reference for   
both hedging and non-hedging purposes. Derivatives include futures, options,    
forward contracts, swaps, and structured notes. These derivatives, including    
those used to manage risk, are themselves subject to risks of the different     
markets in which they trade and, therefore, may not serve their intended        
purposes.                                                                       

The primary risks of derivatives are: (i) changes in the market value of        
securities held by a Portfolio, and of derivatives relating to those securities,
may not be proportionate, (ii) there may not be a liquid market for a Portfolio 
to sell a derivative, which could result in difficulty closing a position and   
(iii) certain derivatives can magnify the extent of losses incurred due to      
changes in the market value of the securities to which they relate. In addition,
some derivatives are subject to counterparty risk. To minimize this risk, a     
Portfolio may enter into derivatives transactions only with counterparties that 
meet certain requirements for credit quality and collateral. Also, a Portfolio  
may invest in certain derivatives that require the Portfolio to segregate some  
or all of its cash or liquid securities to cover its obligations under those    
instruments. At certain levels, this                                            

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can cause the Portfolio to lose flexibility in managing its investments         
properly, responding to shareholder redemption requests, or meeting other       
obligations. If the Portfolio is in that position, it could be forced to sell   
other securities that it wanted to retain.                                      

A Portfolio will limit its use of derivatives for non-hedging purposes to       
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to a  
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the Statement of Additional Information for more about the     
risks of different types of derivatives.                                        

INVESTMENT DISCRETION                                                           

In pursuing the Portfolios' investment objectives, MSDW Investment Management   
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, MSDW     
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decision will affect the 
Portfolios' performance.                                                        

BANK INVESTORS                                                                  

An investment in a Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.                           

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     
When MSDW Investment Management or Sun Valley Gold believes that changes in     
economic, financial or political conditions warrant, each Portfolio may invest  
without limit in certain short-and medium-term fixed income securities for      
temporary defensive purposes. If MSDW Investment Management or Sun Valley Gold  
incorrectly predicts the effects of these changes, such defensive investments   
may adversely affect a Portfolio's performance and the Portfolio may not achieve
its investment objective.                                                       

PORTFOLIO TURNOVER                                                              
Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover (e.g. over 100% per year) will cause a Portfolio to incur additional   
transaction costs and may result in taxable gains being passed through to       
shareholders.                                                                   

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--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE PORTFOLIOS                                             
------------------------------------------------------------------------------- 

The Securities and Exchange Commission (the "Commission") requires that the Fund
disclose in the table below the fees and expenses that you may pay if you buy   
and hold shares of the Portfolios. The Portfolios do not charge any sales loads 
or similar fees when you purchase or redeem shares. The Annual Fund Operating   
Expenses in the table below do not reflect voluntary fee waivers and/or expense 
reimbursements from MSDW Investment Management.                                 

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                                                                                      MORTGAGE-                      
                              CHINA                                                    BACKED            MUNICIPAL   
                              GROWTH          GOLD             MICROCAP              SECURITIES             BOND     
                            PORTFOLIO+     PORTFOLIO+         PORTFOLIO+             PORTFOLIO+          PORTFOLIO+  
                                                                                                                     
MANAGEMENT FEES                                                                                                      
---------------------------------------------------------------------------------------------------------------------
 CLASS A                      1.25%          1.00%               1.00%                  0.35%              0.35%     
---------------------------------------------------------------------------------------------------------------------
 CLASS B                      1.25%          1.00%               1.00%                  0.35%              0.35%     

12B-1 FEE                                                                                                            
---------------------------------------------------------------------------------------------------------------------
 CLASS A                       NONE           NONE               NONE                   NONE                NONE     
---------------------------------------------------------------------------------------------------------------------
 CLASS B                      0.25%          0.25%               0.25%                  0.25%              0.25%     

OTHER EXPENSES                                                                                                       
---------------------------------------------------------------------------------------------------------------------
 CLASS A                      0.77%          0.62%               0.57%                  0.25%              0.46%     
---------------------------------------------------------------------------------------------------------------------
 CLASS B                      0.77%          0.62%               0.57%                  0.25%              0.46%     

TOTAL ANNUAL FUND OPERATING EXPENSES                                                                                 
---------------------------------------------------------------------------------------------------------------------
 CLASS A                      2.02%          1.62%               1.57%                  0.60%              0.81%     
---------------------------------------------------------------------------------------------------------------------
 CLASS B                      2.27%          1.87%               1.82%                  0.85%              1.06%     

+ ESTIMATED. AS OF THE DATE OF THIS PROSPECTUS, NONE OF THE PORTFOLIOS WERE     
OPERATIONAL.                                                                    

* The Management Fees for the Portfolios shown in the table above are the       
highest that could be charged. This table does not show the effects of MSDW 
Investment Management's voluntary fee waivers and/or expense reimbursements.
  MSDW Investment Management has voluntarily agreed to reduce its management fee
and/or reimburse the Portfolios so that total annual operating expenses,    
  excluding certain investment related expenses described below, will not exceed
1.75% for Class A shares and 2.00% for Class B shares of the China Growth   
Portfolio; 1.25% for Class A shares and 1.50% for Class B shares of the Gold
Portfolio; 1.50% for Class A shares and 1.75% for Class B shares of the     
MicroCap Portfolio; 0.60% for Class A shares and 0.85% for Class B shares of
the Mortgage-Backed Securities Portfolio; and 0.45% for Class A shares and  
0.70% for Class B shares of the Municipal Bond Portfolio.                   

In determining the actual amount of voluntary management fee waiver and/or  
expense reimbursement for a Portfolio, if any, MSDW Investment Management   
excludes from annual operating expenses certain investment related expenses,
such as foreign country tax expense and interest expense on borrowing. If   
these expenses were incurred, the Portfolios' total operating expenses after
voluntary fee waivers and/or expense reimbursements would exceed the expense
ratio shown above.                                                          

Fee waivers and/or expense reimbursements are voluntary and MSDW Investment 
 Management reserves the right to terminate any waiver and/or reimbursement at
any time and without notice.                                                

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8                                                             

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH      
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    

The example assumes that you invest $10,000 in each Portfolio for the time      
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that each Portfolio's operating expenses remain the same. Although your actual  
costs may be higher or lower, based on these assumptions your costs would be:   

                                                                [Download Table]

                                1 YEAR  3 YEARS  5 YEARS  10 YEARS
                                                                  
CHINA GROWTH PORTFOLIO                                            
------------------------------------------------------------------
 CLASS A                         $205    $634    $1,088    $2,348 
------------------------------------------------------------------
 CLASS B                         $230    $709    $1,215    $2,605 
GOLD PORTFOLIO                                                    
------------------------------------------------------------------
 CLASS A                         $165    $511     $881     $1,922 
------------------------------------------------------------------
 CLASS B                         $190    $588    $1,011    $2,190 
MICROCAP PORTFOLIO                                                
------------------------------------------------------------------
 CLASS A                         $160    $496     $855     $1,867 
------------------------------------------------------------------
 CLASS B                         $185    $573     $985     $2,137 
MORTGAGE-BACKED SECURITIES PORTFOLIO                              
------------------------------------------------------------------
 CLASS A                         $61     $192     $335      $750  
------------------------------------------------------------------
 CLASS B                         $87     $271     $471     $1,049 
MUNICIPAL BOND PORTFOLIO                                          
------------------------------------------------------------------
 CLASS A                         $83     $259     $450     $1,002 
------------------------------------------------------------------
 CLASS B                         $108    $337      N/A      N/A   

--------------------------------------------------------------------------------
INVESTMENT ADVISER AND SUB-ADVISER                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley. MSDW is a preeminent global      
financial services firm that maintains leading market positions in each of its  
three primary businesses -- securities, asset management and credit services. At
December 31, 1998, MSDW Investment Management, together with its affiliated     
institutional asset management companies, managed assets of approximately       
$163.4 billion, including assets under fiduciary advice.                        

Sun Valley Gold Company ("Sun Valley Gold"), located at 620 Sun Valley Road, Sun
Valley, Idaho 83340, serves as investment sub-adviser and manager for the Gold  
Portfolio on a day-to-day basis. Sun Valley Gold selects, buys and sells        
securities for the Gold Portfolio under the supervision of MSDW Investment      
Management and the Board of Directors.                                          

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
each Portfolio the management fee set forth in the table below:                 

                                                        [Enlarge/Download Table]

                                                                                              MORTGAGE-                        
                                          CHINA                                                 BACKED            MUNICIPAL    
                                          GROWTH             GOLD            MICROCAP         SECURITIES            BOND       
                                        PORTFOLIO+        PORTFOLIO+        PORTFOLIO+        PORTFOLIO+          PORTFOLIO    
                                                                                                                               
MANAGEMENT FEE                       CLASS A  CLASS B  CLASS A  CLASS B  CLASS A  CLASS B  CLASS A  CLASS B   CLASS A   CLASS B
                                     ------------------------------------------------------------------------------------------
PAID IN FISCAL YEAR ENDED                                                                                                      
DECEMBER 31, 1999                     0.90%    0.90%    0.65%    0.65%    1.05%    1.05%    0.20%    0.20%     0.00%      N/A  
(NET OF WAIVERS AND AS A PERCENTAGE                                                                                            
OF AVERAGE NET ASSETS)                                                                                                         

+ESTIMATED. AS OF THE DATE OF THIS PROSPECTUS, NONE OF THE PORTFOLIOS WERE      
OPERATIONAL.                                                                    

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PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUALS HAVE PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT          
RESPONSIBILITY FOR THE PORTFOLIOS:                                              
----------------------------------------------------------------------------    

CHINA GROWTH PORTFOLIO                                                          
[TO BE PROVIDED]                                                                

GOLD PORTFOLIO                                                                  
[TO BE PROVIDED]                                                                

MICROCAP PORTFOLIO                                                              
[TO BE PROVIDED]                                                                

MORTGAGE-BACKED SECURITIES PORTFOLIO                                            
[TO BE PROVIDED]                                                                

MUNICIPAL BOND PORTFOLIO                                                        

[TO BE PROVIDED]                                                                

10                                                            

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DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 
Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of each Portfolio. Morgan Stanley receives no compensation for distributing     
Class A shares of the Portfolios. The Fund has adopted a Plan of Distribution   
with respect to the Class B shares of each Portfolio pursuant to Rule 12b-1     
under the Investment Company Act of 1940, as amended, (the "Plan"). Under the   
Plan, each Portfolio pays the Distributor a distribution fee of 0.25% of the    
Class B shares' average daily net assets on an annualized basis. The            
distribution fee compensates the Distributor for marketing and selling Class B  
shares. The Distributor may pay others for providing distribution-related and   
other services, including account maintenance services. Over time the           
distribution fees will increase the cost of your investment and may cost you    
more than paying other types of sales charges.                                  

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           
The net asset value ("NAV") per share of a class of shares of the Portfolio is  
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolios may 
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolios do not calculate NAV. As
a result, the value of these investments may change on days when you cannot     
purchase or sell shares.                                                        
PRICING OF PORTFOLIO SHARES                                                     
You may buy or sell (redeem) Class A and Class B shares of each Portfolio at the
net asset value next determined for the class after receipt of your order. The  
Fund determines net asset value as of the close of the New York Stock Exchange  
("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is open for
business (the "Pricing Time").                                                  
HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of each Portfolio directly   
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             
The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares of each Portfolio. The minimum additional investment
generally is $1,000 for each account that you have. If the value of your account
falls below the minimum initial investment amount for Class A shares or Class B 
shares as a result of share redemptions, the Fund will notify you. Your account 
may be subject to involuntary conversion from Class A shares to Class B shares  
or involuntary redemption in the case of Class B shares if the value of your    
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        
You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the net asset value        
calculated at the Pricing Time following receipt of your purchase order and     
payment.                                                                        
To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary.        

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Certain Financial Intermediaries have made arrangements with the Fund so that   
you may purchase shares at the price calculated at the next Pricing Time after  
your Financial Intermediary receives your purchase order. Your Financial        
Intermediary may charge an additional service or transaction fee.               

HOW TO REDEEM SHARES                                                            
You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the net asset value per share    
calculated at the next Pricing Time, which may be more or less than the purchase
price of your shares. The Fund will ordinarily distribute redemption proceeds in
cash within one business day of your redemption request, but it may take up to  
seven business days. However, if you purchased shares by check, the Fund will   
not distribute redemption proceeds until it has collected your purchase payment,
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, the Portfolio may pay redemption proceeds by a                    
distribution-in-kind of readily marketable portfolio securities.                

EXCHANGE FEATURES                                                               
You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Aggressive Equity Portfolio            Active International Allocation Portfolio
Emerging Growth Portfolio              Asian Real Estate Portfolio              
Equity Growth Portfolio                Asian Equity Portfolio                   
MicroCap Portfolio+                    China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of a Portfolio and raise its expenses.        
Therefore, the Fund may bar a shareholder who trades excessively from making    
further exchanges or purchases.                                                 

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DIVIDENDS AND DISTRIBUTIONS                                                     

It is the policy of each of the China Growth and MicroCap Portfolio's to        
distribute to shareholders substantially all of its taxable net investment      
income in the form of an annual dividend. The Gold Portfolio's policy is to     
distribute to shareholders substantially all of its taxable net investment      
income in the form of quarterly dividends. The Mortgage-Backed Securities       
Portfolio's policy is to distribute to shareholders substantially all of its    
taxable net investment income in the form of monthly dividends. Each Portfolio's
policy is to distribute to shareholders net capital gains, if any, at least     
annually.                                                                       

The Fund automatically reinvests all distributions in additional shares.        
However, you may elect to receive distributions in cash by giving written notice
to the Fund or your Financial Intermediary or by checking the appropriate box in
the Distribution Option section on the Account Registration Form.               

TAXES                                                                           
The dividends and distributions you receive from a Portfolio may be subject to  
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary rates. A Portfolio may be able to pass      
through to you a credit for foreign income taxes it pays. The Fund will tell you
annually how to treat dividends and distributions.                              

If you redeem shares of a Portfolio, you will be subject to tax on any gains you
earn based on your holding period for the shares. An exchange of shares of a    
Portfolio for shares of another portfolio is a sale of Portfolio shares for tax 
purposes. Conversions of shares between classes will not result in taxation.    

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             
In addition to this Prospectus, the Fund has a Statement of Additional          
Information, dated May 1, 1999, which contains additional, more detailed        
information about the Fund and the Portfolio. The Statement of Additional       
Information is incorporated by reference into this Prospectus and, therefore,   
legally forms a part of this Prospectus.                                        

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements, and quarterly reports. These reports contain additional information 
about the Portfolio's investments. In the Fund's shareholder reports, you will  
find a discussion of the market conditions and the investment strategies that   
significantly affected the Portfolio's performance during that period.          

For additional Fund information, including information regarding the investments
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the Statement of Additional Information and shareholder reports  
without charge by contacting the Fund at the toll-free number above. If you     
purchased shares through a Financial Intermediary, you may also obtain these    
documents, without charge, by contacting your Financial Intermediary.           

Information about the Fund, including the Statement of Additional Information,  
and the annual and semi-annual reports, may be obtained from the Securities and 
Exchange Commission in any of the following ways: (1) In person: you may review 
and copy documents in the Commission's Public Reference Room in Washington D.C. 
(for information call 1-800-SEC-0330); (2) On-line: you may retrieve information
from the Commission's web site at "http://www.sec.gov"; or (3) By mail: you may 
request documents, upon payment of a duplicating fee, by writing to Securities  
and Exchange Commission, Public Reference Section, Washington, D.C. 20549-6009. 
To aid you in obtaining this information, the Fund's Investment Company Act     
registration number is 811-05624.                                               

[LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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

PROSPECTUS                                                           MAY 1, 2000
------------------------------------------------------------------------------- 

A PORTFOLIO OF [LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.       

ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO                                       

THE ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO SEEKS LONG-TERM CAPITAL           
APPRECIATION BY INVESTING PRIMARILY, IN ACCORDANCE WITH COUNTRY AND SECTOR      
WEIGHTINGS DETERMINED BY THE INVESTMENT ADVISER, IN EQUITY SECURITIES OF        
NON-U.S. ISSUERS WHICH, IN THE AGGREGATE, REPLICATE BROAD MARKET INDICES.       

INVESTMENT ADVISER                                                              
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.                           

DISTRIBUTOR                                                                     
MORGAN STANLEY & CO. INCORPORATED                                               

MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. (THE "FUND") IS A NO-LOAD   
MUTUAL FUND THAT IS DESIGNED TO MEET THE INVESTMENT NEEDS OF DISCERNING         
INVESTORS WHO PLACE A PREMIUM ON QUALITY AND PERSONAL SERVICE. THE FUND MAKES   
AVAILABLE TO INSTITUTIONAL INVESTORS A SERIES OF PORTFOLIOS WHICH BENEFIT FROM  
THE INVESTMENT EXPERTISE AND COMMITMENT TO EXCELLENCE ASSOCIATED WITH MORGAN    
STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT MANAGEMENT")   
AND ITS AFFILIATES. THIS PROSPECTUS OFFERS CLASS A AND CLASS B SHARES OF THE    
ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO (THE "PORTFOLIO").                    

THE SECURITIES AND EXCHANGE COMMISSION (THE "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.                           

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

TABLE OF CONTENTS                                                           PAGE
------------------------------------------------------------------------------- 

                                                                [Download Table]
                                                                 
INVESTMENT SUMMARY                                               
     ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO                  1
     ADDITIONAL RISK FACTORS AND INFORMATION                    2
FEES AND EXPENSES OF THE PORTFOLIO                              4
INVESTMENT ADVISER                                              5
MANAGEMENT FEES                                                 5
PORTFOLIO MANAGERS                                              6
DISTRIBUTION OF PORTFOLIO SHARES                                6
SHAREHOLDER INFORMATION                                         6
FINANCIAL HIGHLIGHTS                                            9
     ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO                 10
ACCOUNT REGISTRATION FORM                                        

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----------------------------                                                    
INVESTMENT SUMMARY                                                              
------------------------------------------------------------------------------- 
ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO                                       
------------------------------------------------------------------------------- 

THE ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO SEEKS LONG-TERM CAPITAL           
APPRECIATION BY INVESTING PRIMARILY, IN ACCORDANCE WITH COUNTRY AND SECTOR      
WEIGHTINGS DETERMINED BY MSDW INVESTMENT MANAGEMENT, IN EQUITY SECURITIES OF    
NON-U.S. ISSUERS WHICH, IN THE AGGREGATE, REPLICATE BROAD MARKET INDICES.       

--------------------------------------------------------------------------------
APPROACH                                                                        

MSDW Investment Management seeks to maintain a diversified portfolio of         
international equity securities based on a top-down approach that emphasizes    
country and sector selection and weighting rather than individual stock         
selection. MSDW Investment Management capitalizes on the significance of country
and sector selection in international equity portfolio returns by over and      
underweighting countries and/or sectors based on three factors: (i) valuation;  
(ii) fundamental change; and (iii) market momentum/technicals.                  

PROCESS                                                                         

MSDW Investment Management's Active International Allocation team analyzes both 
the global economic environment and the economies of countries throughout the   
world, focusing mainly on the industrialized countries comprising the MSCI      
Europe, Australasia, Far East (EAFE) Index (the "EAFE Index"). EAFE countries   
include Japan, most nations in Western Europe, Australia, New Zealand, Hong Kong
and Singapore. MSDW Investment Management views each country and sector as      
unique investment opportunities and evaluates prospects for value, growth,      
inflation, interest rates, corporate earnings, liquidity and risk               
characteristics, investor sentiment and economic and currency outlook. MSDW     
Investment Management - on an ongoing basis - establishes the proportion or     
weighting for each country (e.g., overweight, underweight or neutral) relative  
to the EAFE Index for investment by the Portfolio. MSDW Investment Management   
may also choose to overweight or underweight particular sectors, such as        
telecommunications or banking, within each country or region. MSDW Investment   
Management invests the Portfolio's assets within each country and/or sector     
based on its assigned weighting. Within each country, MSDW Investment Management
will try to match the performance of a broad local market index by investing in 
"baskets" of common stocks and other equity securities. In most cases, the MSCI 
Index for that country will be used as the benchmark index. The Portfolio may   
invest in emerging market countries and, with regard to such investments, may   
make global and regional allocations to emerging markets, as well as allocations
to specific emerging market countries.                                          

RISK                                                                            

Investing in the Active International Allocation Portfolio may be appropriate   
for you if you are willing to accept the risks and uncertainties of investing in
the equity securities of issuers in foreign countries, including emerging market
countries, on a very diversified basis, in the hope of earning superior returns 
and to diversify your portfolio. In general, prices of equity securities are    
more volatile than those of fixed income securities. The prices of equity       
securities will rise and fall in response to a number of different factors. In  
particular, prices of equity securities will respond to events that affect      
entire financial markets or industries (changes in inflation or consumer demand,
for example) and to events that affect particular issuers (news about the       
success or failure of a new product, for example). In addition, at times the    
Portfolio's market sector, foreign equity securities, may underperform relative 
to other sectors.                                                               

MSDW INVESTMENT MANAGEMENT MAY INVEST IN CERTAIN INSTRUMENTS, SUCH A            
DERIVATIVES, AND MAY USE CERTAIN TECHNIQUES, SUCH AS HEDGING, TO MANAGE THESE   
RISKS. HOWEVER, MSDW INVESTMENT MANAGEMENT CANNOT GUARANTEE THAT IT WILL BE     
PRACTICAL TO HEDGE THESE RISKS IN CERTAIN MARKETS OR UNDER PARTICULAR CONDITIONS
OR THAT IT WILL SUCCEED IN DOING SO. MSDW INVESTMENT MANAGEMENT MAY USE         
DERIVATIVES FOR OTHER PURPOSES, SUCH AS GAINING EXPOSURE TO FOREIGN MARKETS.    

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]                   

                                                                [Download Table]

PERFORMANCE (CLASS A SHARES)        
                                    
COMMENCED OPERATIONS ON             
JANUARY 17, 1992                    
1993                          30.72%
1994                          -0.52%
1995                          10.57%
1996                          9.71% 
1997                          8.61% 
1998                          20.12%
1999                          27.82%
HIGH (QUARTER)                      
10/99-12/99                         
18.68%                              
LOW (QUARTER)                       
7/98-9/98                           
-11.55%                             

AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED DECEMBER 31, 1999)         

                                                        [Enlarge/Download Table]

                             CLASS A            CLASS B                                         
                           (COMMENCED          (COMMENCED                                       
                          OPERATIONS ON      OPERATIONS ON             MSCI EAFE INDEX*         
                        JANUARY 17, 1992)   JANUARY 2, 1996)       CLASS A           CLASS B    
                                                                                                
------------------------------------------------------------------------------------------------
 PAST ONE YEAR               27.82%              26.63%            26.96%            26.96%     
------------------------------------------------------------------------------------------------
 PAST FIVE YEARS             15.15%               N/A              12.83%              N/A      
------------------------------------------------------------------------------------------------
 SINCE INCEPTION             12.33%              15.98%            11.66%            13.24%     

THE BAR CHART AND TABLE ABOVE SHOW THE PERFORMANCE OF THE PORTFOLIO YEAR-BY-YEAR
AND AS AN AVERAGE OVER DIFFERENT PERIODS OF TIME. TOGETHER, THE BAR CHART AND   
TABLE DEMONSTRATE THE VARIABILITY OF PERFORMANCE OVER TIME AND PROVIDE AN       
INDICATION OF THE RISKS OF INVESTING IN THE PORTFOLIO. IN ADDITION, THE TABLE   
COMPARES THE PERFORMANCE OF THE PORTFOLIO TO AN INDEX OF SIMILAR SECURITIES. AN 
INDEX IS A HYPOTHETICAL MEASURE OF PERFORMANCE BASED ON THE UPS AND DOWNS OF    
SECURITIES THAT MAKE UP A PARTICULAR MARKET. THE INDEX DOES NOT SHOW ACTUAL     
INVESTMENT RETURNS OR REFLECT PAYMENT OF MANAGEMENT OR BROKERAGE FEES, WHICH    
WOULD LOWER THE INDEX'S PERFORMANCE. THE TABLE SEPARATELY COMPARES CLASS A AND  
CLASS B SHARES TO THE INDEX SO THAT YOU CAN COMPARE PERFORMANCE FOR EACH CLASS  
FROM ITS COMMENCEMENT DATE. THE INDEX ITSELF DOES NOT ACTUALLY HAVE TWO CLASSES.
HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW   
THE PORTFOLIO WILL PERFORM IN THE FUTURE.                                       

*THE MSCI EAFE INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS IN EUROPE,          
AUSTRALASIA AND THE FAR EAST.                                                 

1                                                     

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ADDITIONAL RISK FACTORS AND INFORMATION                                         
------------------------------------------------------------------------------- 
INVESTMENT SUMMARY                                                              

THIS SECTION DISCUSSES ADDITIONAL RISK FACTORS AND INFORMATION RELATING TO THE  
PORTFOLIO. THE PORTFOLIO'S INVESTMENT PRACTICES AND LIMITATIONS ARE DESCRIBED IN
MORE DETAIL IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI"), WHICH LEGALLY IS
A PART OF THIS PROSPECTUS. FOR DETAILS ON HOW TO OBTAIN A COPY OF THE SAI AND   
OTHER REPORTS AND INFORMATION, SEE THE BACK COVER OF THIS PROSPECTUS.           

----------------------------------------------------------------------------    
PRICE VOLATILITY                                                                

The value of your investment in the Portfolio is based on the market prices of  
the securities the Portfolio holds. These prices change daily due to economic   
and other events that affect markets generally, as well as those that affect    
particular regions, countries, industries, companies or governments. These price
movements, sometimes called volatility, may be greater or lesser depending on   
the types of securities the Portfolio owns and the markets in which the         
securities trade. Over time, equity securities have generally shown gains       
superior to fixed income securities, although they have tended to be more       
volatile in the short term. Fixed income securities, regardless of credit       
quality, also experience price volatility, especially in response to interest   
rate changes. As a result of price volatility, there is a risk that you may lose
money by investing in the Portfolio.                                            

FOREIGN INVESTING                                                               

Investing in foreign countries, particularly emerging markets, entails the risk 
that news and events unique to a country or region will affect those markets and
their issuers. These same events will not necessarily have an effect on the U.S.
economy or similar issuers located in the United States. In addition, the       
Portfolio's investments in foreign countries generally will be denominated in   
foreign currencies. As a result, changes in the value of a country's currency   
compared to the U.S. dollar may affect the value of the Portfolio's investments.
These changes may occur separately from and in response to events that do not   
otherwise affect the value of the security in the issuer's home country. MSDW   
Investment Management may invest in certain instruments, such as derivatives,   
and may use certain techniques, such as hedging, to manage these risks. However,
MSDW Investment Management cannot guarantee that it will be practical to hedge  
these risks in certain markets or under particular conditions or that it will   
succeed in doing so. MSDW Investment Management may use derivatives for other   
purposes such as gaining exposure to foreign markets.                           

EMERGING MARKET RISKS                                                           

Emerging market countries are countries that major international financial      
institutions, such as the World Bank, generally consider to be less economically
mature than developed nations, such as the United States or most nations in     
Western Europe. Emerging market countries can include every nation in the world 
except the United States, Canada, Japan, Australia, New Zealand, and most       
countries located in Western Europe. Emerging market countries may be more      
likely to experience political turmoil or rapid changes in economic conditions  
than more developed countries, and the financial condition of issuers in        
emerging market countries may be more precarious than in other countries. These 
characteristics result in greater risk of price volatility in emerging market   
countries, which may be heightened by currency fluctuations relative to the U.S.
dollar.                                                                         
DERIVATIVES                                                                     

The Portfolio may use various instruments that derive their values from those of
specified securities, indices, currencies or other points of reference for both 
hedging and non-hedging purposes. Derivatives include futures, options, forward 
contracts, swaps, and structured notes. These derivatives, including those used 
to manage risk, are themselves subject to risks of the different markets in     
which they trade and, therefore, may not serve their intended purposes.         

The primary risks of derivatives are: (i) changes in the market value of        
securities held by the Portfolio, and of derivatives relating to those          
securities, may not be proportionate, (ii) there may not be a liquid market for 
the Portfolio to sell a derivative, which could result in difficulty closing a  
position and (iii) certain derivatives can magnify the extent of losses incurred
due to changes in the market value of the securities to which they relate. In   
addition, some derivatives are subject to counterparty risk. To minimize this   
risk, the Portfolio may enter into derivatives transactions only with           
counterparties that meet certain requirements for credit quality and collateral.
Also, the Portfolio may invest in certain derivatives that require the Portfolio
to segregate some or all of its cash or liquid securities to cover its          
obligations under those instruments. At certain levels, this can cause the      
Portfolio to lose flexibility in managing                                       

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its investments properly, responding to shareholder redemption requests, or     
meeting other obligations. If the Portfolio is in that position, it could be    
forced to sell other securities that it wanted to retain.                       

The Portfolio will limit its use of derivatives for non-hedging purposes to     
33 1/3% of its total assets measured by the aggregate notional amount of        
outstanding derivatives. While the use of derivatives may be advantageous to the
Portfolio, if MSDW Investment Management is not successful in employing them,   
the Portfolio's performance may be worse than if it did not make such           
investments. See the SAI for more about the risks of different types of         
derivatives.                                                                    

INVESTMENT DISCRETION                                                           

In pursuing the Portfolio's investment objective, MSDW Investment Management 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, MSDW       
Investment Management may determine to use some permitted trading strategies    
while not using others. The success or failure of such decisions will affect the
Portfolio's performance.                                                        

BANK INVESTORS                                                                  

An investment in the Portfolio is not insured or guaranteed by the Federal      
Deposit Insurance Corporation or any other government agency.                   

TEMPORARY DEFENSIVE                                                             
INVESTMENTS                                                                     

When MSDW Investment Management believes that changes in economic, financial or 
political conditions warrant, the Portfolio may invest without limit in certain 
short- and medium-term fixed income securities for temporary defensive purposes.
If MSDW Investment Management incorrectly predicts the effects of these changes,
such defensive investments may adversely affect the Portfolio's performance and 
the Portfolio may not achieve its investment objective.                         
PORTFOLIO TURNOVER                                                              

Consistent with its investment policies, a Portfolio will purchase and sell     
securities without regard to the effect on portfolio turnover. Higher portfolio 
turnover will cause the Portfolio to incur additional transaction costs and may 
result in taxable gains being passed through to shareholders.                   

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--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE PORTFOLIO                                              
------------------------------------------------------------------------------- 

The Commission requires that the Fund disclose in the table below the fees and  
expenses that you may pay if you buy and hold shares of the Portfolio. The      
Portfolio does not charge any sales loads or similar fees when you purchase or  
redeem shares. The Annual Fund Operating Expenses in the table below do not     
reflect voluntary fee waivers, which are described in the footnotes below,      
and/or expense reimbursements from MSDW Investment Management.                  

1999 ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND       
ASSETS)*                                                                        

                                                        [Enlarge/Download Table]

                                                  ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO   
                                                                                              
MANAGEMENT FEES                                                                               
----------------------------------------------------------------------------------------------
 CLASS A                                                            0.65%                     
----------------------------------------------------------------------------------------------
 CLASS B                                                            0.65%                     

12b-1 FEE                                                                                     
----------------------------------------------------------------------------------------------
 CLASS A                                                            NONE                      
----------------------------------------------------------------------------------------------
 CLASS B                                                            0.25%                     

OTHER EXPENSES                                                                                
----------------------------------------------------------------------------------------------
 CLASS A                                                            0.27%                     
----------------------------------------------------------------------------------------------
 CLASS B                                                            0.27%                     

TOTAL ANNUAL FUND OPERATING EXPENSES                                                          
----------------------------------------------------------------------------------------------
 CLASS A                                                            0.92%                     
----------------------------------------------------------------------------------------------
 CLASS B                                                            1.17%                     

*THE MANAGEMENT FEES FOR THE PORTFOLIO SHOWN IN THE TABLE ABOVE ARE THE HIGHEST 
THAT COULD BE CHARGED. THIS TABLE DOES NOT SHOW THE EFFECTS OF MSDW INVESTMENT  
MANAGEMENT'S VOLUNTARY FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. MSDW          
INVESTMENT MANAGEMENT HAS VOLUNTARILY AGREED TO REDUCE ITS MANAGEMENT FEE AND/OR
REIMBURSE THE PORTFOLIO SO THAT TOTAL ANNUAL OPERATING EXPENSES, EXCLUDING      
CERTAIN INVESTMENT RELATED EXPENSES DESCRIBED BELOW, WILL NOT EXCEED 0.80% FOR  
CLASS A SHARES AND 1.05% FOR CLASS B SHARES.                                    

IN DETERMINING THE ACTUAL AMOUNT OF VOLUNTARY MANAGEMENT FEE WAIVER AND/OR      
EXPENSE REIMBURSEMENT FOR THE PORTFOLIO, IF ANY, CERTAIN INVESTMENT RELATED     
EXPENSES, SUCH AS FOREIGN COUNTRY TAX EXPENSE AND INTEREST EXPENSE ON BORROWING 
ARE EXCLUDED FROM ANNUAL OPERATING EXPENSES. IF THESE EXPENSES WERE INCURRED,   
THE PORTFOLIO'S TOTAL OPERATING EXPENSES AFTER VOLUNTARY FEE WAIVERS AND/OR     
EXPENSE REIMBURSEMENTS WOULD EXCEED THE EXPENSE RATIO SHOWN ABOVE.              

FOR THE YEAR ENDED DECEMBER 31, 1999, AFTER GIVING EFFECT TO MSDW INVESTMENT    
MANAGEMENT'S VOLUNTARY MANAGEMENT FEE WAIVER AND/OR EXPENSE REIMBURSEMENT, THE  
TOTAL OPERATING EXPENSES INCURRED BY INVESTORS WERE 0.80% FOR CLASS A SHARES AND
1.05% FOR CLASS B SHARES.                                                       

FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS ARE VOLUNTARY AND MSDW INVESTMENT     
MANAGEMENT RESERVES THE RIGHT TO TERMINATE ANY WAIVER AND/OR REIMBURSEMENT AT   
ANY TIME AND WITHOUT NOTICE.                                                    

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EXAMPLE                                                                         
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE       
PORTFOLIO WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS HAVING SIMILAR       
INVESTMENT OBJECTIVES.                                                          
----------------------------------------------------------------------------    

The example assumes that you invest $10,000 in the Portfolio for the time       
periods indicated and then redeem all of your shares at the end of those        
periods. The example assumes that your investment has a 5% return each year and 
that the Portfolio's operating expenses remain the same. Although your actual   
costs may be higher or lower, based on these assumptions your costs would be:   

                                                        [Enlarge/Download Table]

                                      1 YEAR           3 YEARS           5 YEARS           10 YEARS 
                                                                                                    
ACTIVE INTERNATIONAL                                                                                
ALLOCATION PORTFOLIO                                                                                
----------------------------------------------------------------------------------------------------
 CLASS A                               $94              $293              $509              $1,131  
----------------------------------------------------------------------------------------------------
 CLASS B                               $119             $372              $644              $1,420  

--------------------------------------------------------------------------------
INVESTMENT ADVISER                                                              
------------------------------------------------------------------------------- 

Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment         
Management"), with principal offices at 1221 Avenue of the Americas, New York,  
New York 10020, conducts a worldwide portfolio management business and provides 
a broad range of portfolio management services to customers in the United States
and abroad. Morgan Stanley Dean Witter & Co. ("MSDW") is the direct parent of   
MSDW Investment Management and Morgan Stanley & Co. Incorporated ("Morgan       
Stanley"), the Fund's Distributor. MSDW is a preeminent global financial        
services firm that maintains leading market positions in each of its three      
primary businesses -- securities, asset management and credit services. At      
December 31, 1999, MSDW Investment Management, together with its affiliated     
institutional asset management companies, managed assets of approximately       
$184.8 billion, including assets under fiduciary advice.                        

------------------------------------------------------------------------------- 
MANAGEMENT FEES                                                                 
------------------------------------------------------------------------------- 

For the year ended December 31, 1999, MSDW Investment Management received from  
the Portfolio the management fee set forth in the table below:                  

                                                        [Enlarge/Download Table]

                                               ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO       
                                        -------------------------------------------------------
                                                                                               
MANAGEMENT FEE PAID IN FISCAL YEAR                                                             
ENDED DECEMBER 31, 1999                         CLASS A                        CLASS B         
                                        -------------------------------------------------------
(NET OF WAIVERS AND AS A PERCENTAGE OF                                                         
AVERAGE NET ASSETS)                              0.53%                          0.53%          

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--------------------------------------------------------------------------------
PORTFOLIO MANAGERS                                                              
------------------------------------------------------------------------------- 

THE FOLLOWING INDIVIDUALS HAVE PRIMARY DAY-TO-DAY PORTFOLIO MANAGEMENT          
RESPONSIBILITY FOR THE PORTFOLIO:                                               
----------------------------------------------------------------------------    

ANN D. THIVIERGE AND BARTON M. BIGGS                                            

Ann D. Thivierge, a Managing Director of MSDW Investment Management and Morgan  
Stanley, joined MSDW Investment Management in 1986. Ms. Thivierge holds a B.A.  
in International Relations from James Madison College, Michigan State           
University, and an M.B.A. in Finance from New York University. Barton M. Biggs, 
Chairman and a Director of MSDW Investment Management and a Managing Director of
Morgan Stanley, joined Morgan Stanley in 1975. He is also a director and        
chairman of various registered investment companies to which MSDW Investment    
Management and certain of its affiliates provide investment advisory services.  
Mr. Biggs holds a B.A. from Yale University and an M.B.A. from New York         
University. Ms. Thivierge and Mr. Biggs have shared primary responsibility for  
managing the Portfolio's assets since June 1995.                                

------------------------------------------------------------------------------- 
DISTRIBUTION OF PORTFOLIO SHARES                                                
------------------------------------------------------------------------------- 

Morgan Stanley is the exclusive Distributor of Class A shares and Class B shares
of the Portfolio. Morgan Stanley receives no compensation for distributing Class
A shares of the Portfolio. The Fund has adopted a Plan of Distribution with     
respect to the Class B shares of the Portfolio pursuant to Rule 12b-1 (the      
"Plan") under the Investment Company Act of 1940. Under the Plan, the Portfolio 
pays the Distributor a distribution fee of 0.25% of the Class B shares' average 
daily net assets on an annualized basis. The distribution fee compensates the   
Distributor for marketing and selling Class B shares. The Distributor may pay   
others for providing distribution-related and other services, including account 
maintenance services. Over time the distribution fees will increase the cost of 
your investment and may cost you more than paying other types of sales charges. 

------------------------------------------------------------------------------- 
SHAREHOLDER INFORMATION                                                         
------------------------------------------------------------------------------- 
ABOUT NET ASSET VALUE                                                           

The net asset value ("NAV") per share of a class of shares of the Portfolio is  
determined by dividing the total market value of the Portfolio's investments and
other assets attributable to the class, less any liabilities attributable to the
class, by the total number of outstanding shares of that class of the Portfolio.
In making this calculation, the Portfolio generally values securities at market 
price. If market prices are unavailable or may be unreliable because of events  
occurring after the close of trading, fair value prices may be determined in    
good faith using methods approved by the Board of Directors. The Portfolio may  
hold portfolio securities that are listed on foreign exchanges. These securities
may trade on weekends or other days when the Portfolio does not calculate NAV.  
As a result, the value of these investments may change on days when you cannot  
purchase or sell shares.                                                        

PRICING OF PORTFOLIO SHARES                                                     

You may buy or sell (redeem) Class A and Class B shares of the Portfolio at the 
NAV next determined for the class after receipt of your order. The Fund         
determines the NAV for the Portfolio as of the close of the New York Stock      
Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) on each day that the NYSE is
open for business (the "Pricing Time").                                         

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HOW TO PURCHASE SHARES                                                          
You may purchase Class A shares and Class B shares of the Portfolio directly    
from the Fund, from the Distributor or through certain third parties ("Financial
Intermediaries") on each day that the NYSE is open.                             

The minimum initial investment generally is $500,000 for Class A shares and     
$100,000 for Class B shares. The minimum additional investment generally is     
$1,000 for each account that you have. If the value of your account falls below 
the minimum initial investment amount for Class A shares or Class B shares as a 
result of share redemptions, the Fund will notify you. Your account may be      
subject to involuntary conversion from Class A shares to Class B shares or      
involuntary redemption in the case of Class B shares if the value of your       
account remains below the minimum initial investment amount for 60 consecutive  
days. MSDW Investment Management may waive the minimum initial investment and   
involuntary conversion or redemption features for certain investors, including  
individuals purchasing through a Financial Intermediary.                        

You may arrange to purchase shares directly from the Fund by calling            
1-800-548-7786 or by returning a completed Account Registration Form with       
payment for your purchase. The price you pay will be the NAV calculated at the  
Pricing Time following receipt of your purchase order and payment.              

To purchase shares through the Distributor or a Financial Intermediary, you     
should contact the Distributor or your Financial Intermediary for details.      
Generally, the price of shares purchased through the Distributor or a Financial 
Intermediary is the price calculated at the next Pricing Time after the Fund    
receives your order from the Distributor or your Financial Intermediary. Certain
Financial Intermediaries have made arrangements with the Fund so that you may   
purchase shares at the price calculated at the next Pricing Time after your     
Financial Intermediary receives your purchase order. Your Financial Intermediary
may charge an additional service or transaction fee.                            

HOW TO REDEEM SHARES                                                            

You may redeem Portfolio shares directly from the Fund, through the Distributor 
or through your Financial Intermediary, each as described above under "How to   
purchase shares." The redemption price will be the NAV per share calculated at  
the next Pricing Time, which may be more or less than the purchase price of your
shares. The Fund will ordinarily distribute redemption proceeds in cash within  
one business day of your redemption request, but it may take up to seven        
business days. However, if you purchased shares by check, the Fund will not     
distribute redemption proceeds until it has collected your purchase payment,    
which may take up to eight days. In certain circumstances, for example, if      
payment of redemption proceeds in cash would be detrimental to the remaining    
shareholders, the Portfolio may pay redemption proceeds by a                    
distribution-in-kind of readily marketable portfolio securities.                

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EXCHANGE FEATURES                                                               

You may exchange Portfolio shares for shares of other available portfolios of   
the Fund. To obtain a prospectus for another portfolio, call the Fund at        
1-800-548-7786 or contact your Financial Intermediary. If you purchased         
Portfolio shares through a Financial Intermediary, certain portfolios may be    
unavailable for exchange. Contact your Financial Intermediary to determine which
portfolios are available for exchange. The Fund currently consists of the       
following portfolios:                                                           

                                                                [Download Table]
                                                                                
U.S. EQUITY                            GLOBAL AND INTERNATIONAL EQUITY          
Equity Growth Portfolio                Active International Allocation Portfolio
Focus Equity Portfolio                 Asian Real Estate Portfolio              
MicroCap Portfolio+                    Asian Equity Portfolio                   
Small Company Growth Portfolio         China Growth Portfolio+                  
Technology Portfolio                   Emerging Markets Portfolio               
U.S. Equity Plus Portfolio             European Equity Portfolio                
U.S. Real Estate Portfolio             European Real Estate Portfolio           
Value Equity Portfolio                 Global Equity Portfolio                  
FIXED INCOME                           Gold Portfolio+                          
Emerging Markets Debt Portfolio        International Equity Portfolio*          
Fixed Income Portfolio                 International Magnum Portfolio           
Global Fixed Income Portfolio          International Small Cap Portfolio        
High Yield Portfolio                   Japanese Equity Portfolio                
Mortgage-Backed Securities Portfolio+  Latin American Portfolio                 
Municipal Bond Portfolio+              MONEY MARKET                             
                                       Money Market Portfolio                   
                                       Municipal Money Market Portfolio         

*PORTFOLIO IS CURRENTLY CLOSED TO NEW INVESTORS                                 

+PORTFOLIO IS NOT OPERATIONAL                                                   

When you exchange for shares of another portfolio, your transaction will be     
treated the same as an initial purchase. You will be subject to the same minimum
initial investment and account size as an initial purchase. Accordingly, you    
will not necessarily receive the same class of shares that you tendered for     
exchange. Your exchange price will be the price calculated at the next Pricing  
Time after the Fund receives your exchange order. Frequent trades in your       
account(s) can disrupt management of the Portfolio and raise its expenses.      
Therefore, the Fund may, in its sole discretion, bar a shareholder who trades   
excessively from making further exchanges or purchases.                         

DIVIDENDS AND DISTRIBUTIONS                                                     

The Portfolio's policy is to distribute to shareholders substantially all of its
taxable net investment income in the form of an annual dividend and to          
distribute net capital gains, if any, at least annually.                        

The Fund automatically reinvests all dividends and distributions in additional  
shares. However, you may elect to receive distributions in cash by giving       
written notice to the Fund or your Financial Intermediary or by checking the    
appropriate box in the Distribution Option section on the Account Registration  
Form.                                                                           

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TAXES                                                                           
The dividends and distributions you receive from the Portfolio may be subject to
Federal, state and local taxation, depending on your tax situation. The tax     
treatment of dividends and distributions is the same whether or not you reinvest
them. Dividends are taxed as ordinary income, long-term capital gains           
distributions are taxed at a maximum rate of 20%, and short-term capital gains  
distributions are taxed at ordinary income rates. The Portfolio may be able to  
pass through to you a credit for foreign income taxes it pays. The Fund will    
tell you annually how to treat dividends and distributions.                     

If you redeem shares of the Portfolio, you will be subject to tax on any gains  
you earn based on your holding period for the shares. An exchange of shares of  
the Portfolio for shares of another portfolio is a sale of Portfolio shares for 
tax purposes. Conversions of shares between classes will not result in taxation.

Because each investor's tax circumstances are unique and the tax laws may       
change, you should consult your tax advisor about your investment.              

------------------------------------------------------------------------------- 
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 

The following financial highlights table is intended to help you understand the 
financial performance of the Class A shares and Class B shares of the Portfolio 
for the past five years or, if less than five years, the life of the Portfolio  
or Class. Certain information reflects financial results for a single Portfolio 
share. The total returns in the table represent the rate that an investor would 
have earned (or lost) on an investment in the Portfolio (assuming reinvestment  
of all dividends and distributions). This information has been audited by       
PricewaterhouseCoopers LLP, whose report, along with the Fund's financial       
statements, are incorporated by reference into the Fund's SAI and are included  
in the Fund's December 31, 1999 Annual Report to Shareholders. The Annual Report
and the Fund's financial statements, as well as the SAI, are available at no    
cost from the Fund at the toll free number noted on the back cover to this      
Prospectus.                                                                     

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----------------------------                                                    
FINANCIAL HIGHLIGHTS                                                            
------------------------------------------------------------------------------- 
ACTIVE INTERNATIONAL ALLOCATION PORTFOLIO                                       
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                           CLASS A                          
                                                   -------------------------------------------------------- 
                                                                   YEAR ENDED DECEMBER 31,                  
                                                   -------------------------------------------------------- 
SELECTED PER SHARE DATA AND RATIOS                   1999       1998++      1997++       1996        1995   
                                                                                                            
----------------------------------------------------------------------------------------------------------- 
NET ASSET VALUE, BEGINNING OF PERIOD               $  11.90    $  10.39    $  11.44    $  11.63    $  11.65 
                                                   --------    --------    --------    --------    -------- 
INCOME FROM INVESTMENT OPERATIONS                                                                           
 NET INVESTMENT INCOME (1)                             0.22        0.22        0.18        0.24        0.17 
 NET REALIZED AND UNREALIZED GAIN ON                                                                        
   INVESTMENTS                                         3.01        1.86        0.80        0.88        1.00 
                                                   --------    --------    --------    --------    -------- 
    TOTAL FROM INVESTMENT OPERATIONS                   3.23        2.08        0.98        1.12        1.17 
                                                   --------    --------    --------    --------    -------- 
DISTRIBUTIONS                                                                                               
 NET INVESTMENT INCOME                                (0.05)      (0.30)      (0.83)      (0.81)      (0.25)
 IN EXCESS OF NET INVESTMENT INCOME                   (0.06)      (0.04)      (0.02)      (0.02)      (0.10)
 NET REALIZED GAIN                                    (0.76)      (0.23)      (1.18)      (0.48)      (0.84)
                                                   --------    --------    --------    --------    -------- 
    TOTAL DISTRIBUTIONS                               (0.87)      (0.57)      (2.03)      (1.31)      (1.19)
                                                   --------    --------    --------    --------    -------- 
NET ASSET VALUE, END OF PERIOD                     $  14.26    $  11.90    $  10.39    $  11.44    $  11.63 
                                                   ========    ========    ========    ========    ======== 
TOTAL RETURN                                          27.82%      20.12%       8.61%       9.71%      10.57%
                                                   ========    ========    ========    ========    ======== 
RATIOS AND SUPPLEMENTAL DATA:                                                                               
NET ASSETS, END OF PERIOD (THOUSANDS)              $583,607    $266,832    $138,667    $183,193    $170,663 
RATIO OF EXPENSES TO AVERAGE NET ASSETS (1)            0.80%       0.80%       0.80%       0.80%       0.80%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                               
  ASSETS (1)                                           1.71%       1.91%       1.47%       1.22%       1.26%
PORTFOLIO TURNOVER RATE                                  53%         49%         49%         65%         72%
-----------------                                                                                           
(1) EFFECT OF VOLUNTARY EXPENSE LIMITATION                                                                  
   DURING THE PERIOD:                                                                                       
     PER SHARE BENEFIT TO NET INVESTMENT INCOME       $0.01       $0.02       $0.03       $0.03       $0.05 
   RATIOS BEFORE EXPENSE LIMITATION:                                                                        
     EXPENSES TO AVERAGE NET ASSETS                    0.92%       1.03%       1.10%       1.09%       1.18%
     NET INVESTMENT INCOME TO AVERAGE NET                                                                   
       ASSETS                                          1.59%       1.70%       1.18%       0.94%       0.88%
----------------------------------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                CLASS B                        
                                                         ------------------------------------------------------
                                                                                                   PERIOD FROM 
                                                                                                   JANUARY 2,  
                                                                YEAR ENDED DECEMBER 31,            1996*** TO  
                                                         -------------------------------------    DECEMBER 31, 
SELECTED PER SHARE DATA AND RATIOS                         1999       1998++        1997++            1996     
                                                                                                               
---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                      $12.12      $10.48        $11.44           $11.66    
                                                          ------      ------        ------           ------    
INCOME FROM INVESTMENT OPERATIONS                                                                              
 NET INVESTMENT INCOME (2)                                  0.13        0.22          0.08             0.06    
 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS            3.02        1.94          0.87             1.00    
                                                          ------      ------        ------           ------    
    TOTAL FROM INVESTMENT OPERATIONS                        3.15        2.16          0.95             1.06    
                                                          ------      ------        ------           ------    
DISTRIBUTIONS                                                                                                  
 NET INVESTMENT INCOME                                     (0.05)      (0.23)        (0.71)           (0.78)   
 IN EXCESS OF NET INVESTMENT INCOME                        (0.05)      (0.06)        (0.02)           (0.02)   
 NET REALIZED GAIN                                         (0.76)      (0.23)        (1.18)           (0.48)   
                                                          ------      ------        ------           ------    
    TOTAL DISTRIBUTIONS                                    (0.86)      (0.52)        (1.91)           (1.28)   
                                                          ------      ------        ------           ------    
NET ASSET VALUE, END OF PERIOD                            $14.41      $12.12        $10.48           $11.44    
                                                          ======      ======        ======           ======    
TOTAL RETURN                                               26.63%      20.71%         8.35%            9.22%   
                                                          ======      ======        ======           ======    
RATIOS AND SUPPLEMENTAL DATA:                                                                                  
NET ASSETS, END OF PERIOD (THOUSANDS)                     $9,959         $96           $14             $633    
RATIO OF EXPENSES TO AVERAGE NET ASSETS (2)                 1.05%       1.05%         1.05%            1.05%** 
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET                                                                  
  ASSETS (2)                                                1.16%       1.80%         0.71%            1.09%** 
PORTFOLIO TURNOVER RATE                                       53%         49%           49%              65%   
-----------------                                                                                              
(2) EFFECT OF VOLUNTARY EXPENSE LIMITATION DURING THE PERIOD:                                                  
     PER SHARE BENEFIT TO NET INVESTMENT INCOME            $0.01       $0.03         $0.03            $0.02    
   RATIOS BEFORE EXPENSE LIMITATION:                                                                           
     EXPENSES TO AVERAGE NET ASSETS                         1.17%       1.27%         1.32%            1.33%** 
     NET INVESTMENT INCOME TO AVERAGE NET ASSETS            0.95%       1.58%         0.45%            0.82%** 
---------------------------------------------------------------------------------------------------------------

**ANNUALIZED                                                                    
***THE PORTFOLIO BEGAN OFFERING CLASS B SHARES ON JANUARY 2, 1996.            

++PER SHARE AMOUNTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 ARE BASED ON 
AVERAGE SHARES OUTSTANDING.                                                 

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A PORTFOLIO OF [ICON] MORGAN STANLEY DEAN WITTER     ACTIVE INTERNATIONAL       
INSTITUTIONAL FUND, INC.                             ALLOCATION PORTFOLIO       

ACCOUNT REGISTRATION FORM 

ACCOUNT INFORMATION                                       
                       If you need assistance in filling out this form for
                        Morgan Stanley Dean Witter Institutional Fund, Inc.,
                        please contact your Morgan Stanley representative or
                      call us toll free 1-800-548-7786. Please print all
                       items except signature, and mail to the Fund at the
                        address on the back cover. Fill in where appropriate
below.                      
REGISTRATION                                
/ / INDIVIDUAL              

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                           -----------------------------------------------------
                   FIRST NAME    MIDDLE INITIAL        LAST NAME

                       / / CORPORATIONS, TRUSTS AND OTHERS Please call the
                              Fund for additional documents that may be required
                            to set up account and to authorize transactions.

                           -----------------------------------------------------
                 Type of Registration: / / Incorporated/ /
             Unincorporated Association/ / Partnership
                                              / / Uniform Gift/Transfer to
Minor                       
                                                 (ONLY ONE CUSTODIAN AND
MINOR PERMITTED)            
/ / Trust                   
                     --------------------------------------- / / Other
(SPECIFY)                   
           ---------------------------------------
MAILING ADDRESS                                   
                  Please fill in completely, including telephone
number(s).                  

                 / / UNITED STATES CITIZEN  / / RESIDENT ALIEN

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                CITY            STATE             ZIP CODE

                           -----------------------------------------------------
                     HOME TELEPHONE NUMBER BUSINESS TELEPHONE NUMBER

/ / NON-RESIDENT ALIEN      
                           Permanent Address (WHERE YOU RESIDE PERMANENTLY FOR
TAX PURPOSES)               

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                     CITY             COUNTRY            POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER

                            Current Mailing Address (IF DIFFERENT FROM PERMANENT
ADDRESS)                    

                           -----------------------------------------------------
STREET OR P.O. BOX        

                           -----------------------------------------------------
                     CITY             COUNTRY            POSTAL CODE

                           -----------------------------------------------------
                        HOME TELEPHONE NUMBER    BUSINESS TELEPHONE NUMBER
TAXPAYER IDENTIFICATION NUMBER                                                  
                       Enter your Taxpayer Identification Number. For most
                      individual taxpayers, this is your Social Security
Number.                     

/ / INDIVIDUAL              

                 ---------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

              ----------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                      / / JOINT TENANTS (RIGHTS OF SURVIVORSHIP PRESUMED
                  UNLESS TENANCY IN COMMON IS INDICATED)

                 ---------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

              ----------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

                 ---------------------------------------- OR
            TAXPAYER IDENTIFICATION NUMBER ("TIN")

              ----------------------------------------
    SOCIAL SECURITY NUMBER ("SSN")

             For Custodian account of a minor (Uniform
                       Gifts/Transfers to Minor Acts), give the SSN of the
minor.                      

IMPORTANT TAX INFORMATION   
                          You (as a payee) are required by law to provide us (as
                       payor) with your correct TIN(s) or SSN(s). Accounts
                          that have a missing or incorrect TIN(s) or SSN(s) will
                     be subject to backup withholding at a 31% rate on
                       dividends, distributions and other payments. If you
                    have not provided us with your correct TIN(s) or
                          SSN(s), you may be subject to a $50 penalty imposed by
         the Internal Revenue Service ("IRS").
                            Backup withholding is not an additional tax; the tax
                      liability of persons subject to backup withholding
                     will be reduced by the amount of tax withheld. If
                     withholding results in an overpayment of taxes, a
refund may be obtained.     
                          You may be notified that you are subject to backup
                  withholding under Section 3406(a)(1)(C) of the
                        Internal Revenue Code because you have underreported
                      interest or dividends or you were required to, but
                        failed to, file a return which would have included a
            reportable interest or dividend payment.

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PORTFOLIO AND CLASS SECTION                                               
                         Class A shares minimum $500,000 for the Portfolio and
                      Class B shares minimum $100,000 for the Portfolio.
                        Please indicate class and amount for purchase of the
following Portfolio:        

         ACTIVE INTERNATIONAL  / / Class A Shares (056)      $ -------------
    ALLOCATION PORTFOLIO  Total Initial Investment $ -------------
                          / / Class B Shares (034) $ -------------

METHOD OF INVESTMENT                                        
                    Please indicate Portfolio and manner of payment.

                        / / Check (MAKE CHECK PAYABLE TO MORGAN STANLEY DEAN
                    WITTER INSTITUTIONAL FUND, INC.--PORTFOLIO NAME)

/ / Exchange $              
           ---------------------------------------

From                        
           ---------------------------------------

NAME OF PORTFOLIO           
           ---------------------------------------

ACCOUNT NUMBER              
           ---------------------------------------

      Account previously established by:
  / / Phone exchange / / Wire on

DATE                        
           ---------------------------------------

ACCOUNT NUMBER              
           ---------------------------------------
                                               (PREVIOUSLY ASSIGNED BY THE FUND)

DISTRIBUTION OPTION                                       
                        Income dividends and capital gains distributions (if
                     any) to be reinvested in additional shares unless
either box below is checked.

                          / / Income dividends to be paid in cash, capital gains
     distributions (if any) in shares.

                        / / Income dividends and capital gains distributions
(if any) to be paid in cash.
TELEPHONE REDEMPTION                                        
                       Please select at time of initial application if you
                     wish to redeem or exchange shares by telephone. A
                          SIGNATURE GUARANTEE IS REQUIRED IF BANK ACCOUNT IS NOT
                REGISTERED IDENTICALLY TO YOUR FUND ACCOUNT.

                       TELEPHONE REQUESTS FOR REDEMPTIONS OR EXCHANGE WILL
             NOT BE HONORED UNLESS THE BOX IS CHECKED.

                                                        [Enlarge/Download Table]
                                                                                                        
/ /  I/we hereby authorize the Fund and its agents to honor                                             
     any telephone requests to wire redemption proceeds to                                              
     the commercial bank indicated at right and/or mail                                                 
     redemption proceeds to the name and address in which                                               
     my/our fund account is registered if such requests are   ----------------                          
     believed to be authentic.                                NAME OF COMMERCIAL BANK (NOT SAVINGS BANK)
     The Fund and the Fund's Transfer Agent will employ       ----------------                          
     reasonable procedures to confirm that instructions       BANK ACCOUNT NUMBER                       
     communicated by telephone are genuine. These procedures  ----------------                          
     include requiring the investor to provide certain        BANK ABA NUMBER                           
     personal identification information at the time an       ----------------                          
     account is opened and prior to effecting each            NAME(S) IN WHICH YOUR BANK ACCOUNT IS     
     transaction requested by telephone. In addition, all     ESTABLISHED                               
     telephone transaction requests will be recorded and      ----------------                          
     investors may be required to provide additional          BANK'S STREET ADDRESS                     
     telecopied written instructions of transaction           ----------------                          
     requests. Neither the Fund nor the Transfer Agent will   CITY STATE ZIP CODE                       
     be responsible for any loss, liability, cost or expense                                            
     for following instructions received by telephone that                                              
     it reasonably believes to be genuine.                                                              

INTERESTED PARTY OPTION                                           
                    / / In addition to the account statement sent to
                            my/our registered address, I/we hereby authorize
                             the Fund to mail duplicate statements to the name
       and address provided below.

                           -----------------------------------------------------
           NAME               STREET OR P.O. BOX

                           -----------------------------------------------------
                     CITY                        STATE      ZIP CODE
DEALER INFORMATION                                      

                          ------------------------------------------------------
                              REPRESENTATIVE NAME  REPRESENTATIVE NUMBER  BRANCH
                                                                          NUMBER
SIGNATURE OF ALL HOLDERS                                            
AND TAXPAYER CERTIFICATION                                              
                         The undersigned certify that I/we have full authority
                       and legal capacity to purchase and redeem shares of
                         the Fund and affirm that I/we have received a current
                          Prospectus of Morgan Stanley Dean Witter Institutional
                     Fund, Inc. and agree to be bound by its terms. By
                       signing this application, I/we hereby certify under
                     penalties of perjury that the information on this
                   application is complete and correct and that as
                          required by federal law (please check applicable boxes
below):                     

U.S. CITIZEN(S)/TAXPAYER(S):

                          / / I/We certify that (1) the number(s) shown above on
                             this form is/are the correct SSN(s) or TIN(s) and
                              (2) I/we are not subject to any backup withholding
                          either because (a) I/we are exempt from backup
                           withholding; (b) I/we have not been notified by
                   the IRS that I/we are subject to backup
                              withholding as a result of a failure to report all
                              interest or dividends; or (c) the IRS has notified
                              me/us that I am/we are no longer subject to backup
withholding.        

                     / / If no TIN(s) or SSN(s) has/have been provided
                            above, I/we have applied, or intend to apply, to
                             the IRS or the Social Security Administration for
                              a TIN or a SSN and I/we understand that if I/we do
                           not provide either number to Chase Global Funds
                            Services Company ("CGFSC") within 60 days of the
                       date of this application or if I/we fail to
                              furnish my/ our correct SSN(s) or TIN(s), I/we may
                    be subject to a penalty and a 31% backup
                       withholding on distributions and redemption
                          proceeds. (Please provide either number on IRS
                           Form W-9). You may request such form by calling
  CGFSC at 800-548-7786.

    NON-U.S. CITIZEN(S)/TAXPAYER(S):

                          / / Under penalties of perjury, I/we certify that I/we
                           are not U.S. citizens or residents and I/we are
                         exempt foreign persons as defined by the IRS.

                          The IRS does not require your consent to any provision
                  of this document other than the certifications
         required to avoid backup withholding.

SIGN HERE -->                                 
           ---------------------------------------
SIGNATURE                   

           ---------------------------------------
DATE                        
          SIGNATURE (IF JOINT ACCOUNT, BOTH MUST
SIGN)  DATE                 

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------------------------------------------------------------------------------- 
WHERE TO FIND ADDITIONAL INFORMATION                                            
------------------------------------------------------------------------------- 

STATEMENT OF ADDITIONAL INFORMATION                                             

In addition to this Prospectus, the Fund has an SAI, dated May 1, 2000, which   
contains additional, more detailed information about the Fund and the Portfolio.
The SAI is incorporated by reference into this Prospectus and, therefore,       
legally forms a part of this Prospectus.                                        

SHAREHOLDER REPORTS                                                             
The Fund publishes annual and semi-annual reports containing financial          
statements. These reports contain additional information about the Portfolio's  
investments. In the Fund's shareholder reports, you will find a discussion of   
the market conditions and the investment strategies that significantly affected 
the Portfolio's performance during that period.                                 

For additional Fund information, including information regarding investments    
comprising the Fund's Portfolios, please call 1-800-548-7786.                   

You may obtain the SAI, and shareholder reports, when available, without charge 
by contacting the Fund at the toll-free number above. If you purchased shares   
through a Financial Intermediary, you may also obtain these documents, without  
charge, by contacting your Financial Intermediary.                              

Information about the Fund, including the SAI, and the annual and semi-annual   
reports, may be obtained from the Commission in any of the following ways.      
(1) In person: you may review and copy documents in the Commission's Public     
Reference Room in Washington D.C. (for information on the operation of the      
Public Reference Room, call 1-202-942-8090); (2) On-line: you may retrieve      
information from the EDGAR Database on the Commission's web site at             
"http://www.sec.gov"; or (3) By mail: you may request documents, upon payment of
a duplicating fee, by writing to Securities and Exchange Commission, Public     
Reference Section, Washington, D.C. 20549-0102. You may also obtain this        
information, upon payment of a duplicating fee, by e-mailing the Commission at  
the following address: publicinfo@sec.gov. To aid you in obtaining this         
information, the Fund's Investment Company Act registration number is 811-05624.

[LOGO] MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.                      
P.O. Box 2798                                                                   
Boston, Massachusetts 02208-2798                                                

FOR INFORMATION CALL 1-800-548-7786                                             

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MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. 
STATEMENT OF ADDITIONAL INFORMATION 

This statement of additional information is not a prospectus. It should be read 
in conjunction with a prospectus for the applicable portfolio, which may be     
obtained by calling the Morgan Stanley Dean Witter Institutional Fund, Inc. (the
"Fund") Services Group at 1-800-548-7786.                                       
--------------

TABLE OF CONTENTS 

                                                                [Download Table]

                                            PAGE  
                                          --------
                                                  
INVESTMENT POLICIES AND STRATEGIES......      2   
INVESTMENT LIMITATIONS..................     25   
PURCHASE OF SHARES......................     27   
REDEMPTION OF SHARES....................     29   
ACCOUNT POLICIES AND FEATURES...........     30   
MANAGEMENT OF THE FUND..................     32   
INVESTMENT ADVISORY AND OTHER                     
  SERVICES..............................     35   
DISTRIBUTIONS OF SHARES.................     36   
BROKERAGE PRACTICES.....................     38   
GENERAL INFORMATION.....................     41   
TAXES...................................     42   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF          
  SECURITIES............................     46   
PERFORMANCE INFORMATION.................     53   
DESCRIPTION OF RATINGS..................     57   

The Fund's audited financial statements for the fiscal year ended December 31,  
1999, including notes thereto and the report of PricewaterhouseCoopers LLP, are 
incorporated by reference herein from the Fund's Annual Report. A copy of the   
Fund's Annual Report to Shareholders must accompany the delivery of this        
Statement of Additional Information. The China Growth, Mortgage-Backed          
Securities and MicroCap Portfolios had not commenced operations at December 31, 
1999. You may obtain the Fund's most recent Annual Report by calling the Morgan 
Stanley Dean Witter Institutional Fund, Inc. Services Group at 1-800-548-7786.  

STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 2000.                         

- Prospectus for the European Real Estate Portfolio, Asian Real Estate  
Portfolio and U.S. Real Estate Portfolio, dated May 1, 2000         

  - Prospectus for the Asian Equity Portfolio and Japanese Equity Portfolio,
dated May 1, 2000                                                   

- Prospectus for the Emerging Markets Portfolio, Emerging Markets Debt  
Portfolio and Latin American Portfolio, dated May 1, 2000           

- Prospectus for the Global Equity Portfolio, International Equity      
Portfolio, International Small Cap Portfolio and European Equity    
Portfolio, dated May 1, 2000                                        

- Prospectus for the U.S. Equity Plus Portfolio, dated May 1, 2000      

- Prospectus for the International Magnum Portfolio, dated May 1, 2000  

- Prospectus for the Fixed Income Portfolio, Money Market Portfolio and 
Municipal Money Market Portfolio, dated May 1, 2000                 

- Prospectus for the Equity Growth Portfolio, Focus Equity Portfolio    
      (formerly the Aggressive Equity Portfolio), Small Company Growth Portfolio
(formerly the Emerging Growth Portfolio), Value Equity Portfolio and
Technology Portfolio, dated May 1, 2000                             

    - Prospectus for the Global Fixed Income Portfolio and High Yield Portfolio,
dated May 1, 2000                                                   

    - Prospectus for the Active International Allocation Portfolio, dated May 1,
2000                                                                

- Prospectus for the China Growth Portfolio, Gold Portfolio, MicroCap   
Portfolio, Mortgage-Backed Securities Portfolio and Municipal Bond  
Portfolio dated May 1, 2000                                         

                                                                       1

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INVESTMENT POLICIES AND STRATEGIES

This Statement of Additional Information provides additional information about  
the investment policies and operations of the Fund and its investment portfolios
(each a "Portfolio"). Morgan Stanley Dean Witter Investment Management Inc.     
("MSDW Investment Management") acts as investment adviser to each Portfolio.    
Under the supervision of MSDW Investment Management, Morgan Stanley Dean Witter 
Advisors Inc. ("MSDW Advisors") acts as investment sub-adviser to the Money     
Market and Municipal Money Market Portfolios and Sun Valley Gold Company ("Sun  
Valley" and, together with MSDW Advisors, the "Sub-Advisers") acts as investment
sub-adviser to the Gold Portfolio. References to MSDW Investment Management,    
when used in connection with its activities as investment adviser, include the  
Sub-Advisers acting under its supervision.                                      

The following table provides additional information about the Portfolios'       
investment policies. Capitalized items used below are described in more detail  
later in this section.                                                          

Fixed Income Portfolio          Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                                Investment Grade Fixed Income Securities and may
                         invest over 50% of its assets in Mortgage
                          Related Securities. The Portfolio may also
                                invest in Fixed Income Securities denominated in
   foreign currencies.
Municipal Bond Portfolio        Under normal circumstances, the Portfolio       
                                invests at least 80% of its assets in Municipals
                                rated investment grade at the time of investment
                             or futures and options on futures relating to
                             these Municipals and 65% of its net assets in
                             Municipals having an initial maturity of more
                             than one year. The Portfolio may invest up to
                            20% of its net assets in Municipals that pay
                               interest subject to alternative minimum tax and
                         up to 20% in cash, cash equivalents, U.S.
                            Government securities and taxable investment
                        grade corporate Fixed Income Securities.
Money Market Portfolio          Under normal circumstances, the Portfolio       
                           invests at least 65% of its assets in Money
                               Market Instruments with effective maturities of
 397 days or less.
Municipal Money Market          Under normal circumstances, the Portfolio       
 Portfolio                     invests at least 80% of its assets in Municipal
                       Money Market Instruments with effective
                                maturities of 397 days or less that pay interest
                     that is exempt from federal taxation.
Global Fixed Income Portfolio   Under normal circumstances, the Portfolio       
                                invests at least 65% of its total assets in high
                          quality Fixed Income Securities of issuers
                             throughout the world, including U.S. issuers.
High Yield Portfolio            Under normal circumstances, the Portfolio       
                                invests at least 65% of its total assets in High
                               Yield Securities (commonly referred to as "junk
                               bonds"). The Portfolio may also invest in other
                               Fixed Income Securities including Foreign Fixed
                             Income Securities and Emerging Market Country
Securities.     
Equity Growth Portfolio         Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                          growth oriented Equity Securities of large
                             capitalization U.S. and, to a limited extent,
  foreign companies.
Focus Equity Portfolio          Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                                Equity Securities U.S. and, to a limited extent,
                          foreign companies. The Portfolio generally
                               concentrates its holdings in a relatively small
                               number of companies and may invest up to 25% of
              its assets in a single issuer.
Small Company Growth Portfolio  Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                               growth oriented Equity Securities of small U.S.
                         issuers and, to a limited extent, foreign
issuers.        
Value Equity Portfolio          Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                           Equity Securities of U.S. and, to a limited
                            extent, foreign issuers that MSDW Investment
                              Management believes to be undervalued relative
                             to the stock market in general at the time of
purchase.       
Technology Portfolio            Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                        Equity Securities of companies that MSDW
                               Investment Management expects will benefit from
                   their involvement in technology and
              technology-related industries.
European Real Estate Portfolio  Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                          Equity Securities of companies principally
                             engaged in the European real estate industry.
Asian Real Estate Portfolio     Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                          Equity Securities of companies principally
                          engaged in the Asian real estate industry.

2                                                                       

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U.S. Real Estate Portfolio      Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                          Equity Securities of companies principally
                         engaged in the U.S. real estate industry,
                                including real estate investment trusts (REITs).
Active International            Under normal circumstances, the Portfolio       
Allocation Portfolio          invests at least 65% of its total assets in   
                              Equity Securities of non-U.S. issuers that, in
                               the aggregate, generally replicate broad market
                             indices. The Portfolio may invest in Emerging
            Market Countries Securities.
Global Equity Portfolio         Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                               Equity Securities of issuers located throughout
                           the world, including issuers located in the
                               United States and in Emerging Market Countries.
                           Ordinarily, at least 20% of the Portfolio's
                       total assets will be invested in Equity
           Securities of U.S. issuers.
International Equity Portfolio  Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                      Equity Securities of non-U.S. issuers.
International Small Cap         Under normal circumstances, the Portfolio       
Portfolio                     invests at least 65% of its total assets in   
                          Equity Securities of non-U.S. issuers with
                             equity market capitalizations of less than $1
billion.        
European Equity Portfolio       Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                      Equity Securities of European issuers.
International Magnum Portfolio  Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                               Equity Securities of non-U.S. issuers domiciled
                               in at least three different EAFE countries. The
                          Portfolio may invest up to 5% of its total
                                assets in the securities of issuers domiciled in
                             non-EAFE countries, including emerging market
countries.      
Asian Equity Portfolio          Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                             Equity Securities of Asian issuers (excluding
  Japanese issuers).
Japanese Equity Portfolio       Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                               Equity Securities of Japanese issuers that MSDW
                              Investment Management believes are undervalued
                             relative to their intrinsic assets, cash flow
       and earnings potential.
Emerging Markets Portfolio      Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                               growth-oriented Equity Securities of issuers in
          Emerging Market Countries.
Emerging Markets Debt           Under normal circumstances, the Portfolio       
Portfolio                     invests at least 65% of its total assets in   
                         Fixed Income Securities of government and
                           government-related issuers and, to a lesser
                            extent, corporate issuers in Emerging Market
Countries.      
Latin American Portfolio        Under normal circumstances, the Portfolio       
                           invests at least 65% of its total assets in
                          growth-oriented Equity Securities of Latin
                            American issuers. In addition, the Portfolio
                                will invest between 25% and 50% of its assets in
                    securities of issuers engaged in the
            telecommunications industry.
U.S. Equity Plus Portfolio      Under normal circumstances, the Portfolio       
                            invests at least 65% of its assets in Equity
                          Securities of U.S. issuers included in the
            Standard & Poor's 500 Index.
China Growth Portfolio          Under normal circumstances, the Portfolio       
                            invests at least 65% of its assets in Equity
                              Securities of issuers in The People's Republic
               of China, Hong Kong and Taiwan.
Gold Portfolio                  Under normal circumstances, the Portfolio       
                            invests at least 65% of its assets in Equity
                                Securities of U.S. and foreign companies engaged
                         in gold-related activities. The Portfolio
                           frequently invests in securities of foreign
issuers.        
Microcap Portfolio              Under normal circumstances, the Portfolio       
                            invests at least 65% of its assets in growth
                   oriented Equity Securities of small
                          growth-oriented domestic and, to a limited
                            extent, foreign companies with potential for
 long-term growth.
Mortgage-Backed Securities      Under normal circumstances, the Portfolio       
  Portfolio                     invests at least 65% of its assets in Investment
                           Grade short and intermediate-term Mortgage-
                               Related Securities. The Portfolio may invest up
                              to 15% in Mortgage-Related Securities rated in
                        the third highest rating category or, if
                               unrated, believed by MSDW Investment Management
            to be of equivalent quality.

                                                                       3

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The following tables summarize the permissible strategies and investments for   
each Portfolio. These tables should be used in conjunction with the investment  
summaries for each Portfolio contained in the Prospectus in order to provide a  
more complete description of such Portfolio's investment policies.              

GLOBAL AND INTERNATIONAL EQUITY PORTFOLIOS                                      

                                                        [Enlarge/Download Table]

                                                     ACTIVE                                                                    
                                                     INTER-                                                                    
                                                    NATIONAL                ASIAN                                     EUROPEAN 
                                                      ALLO-      ASIAN      REAL       CHINA    EMERGING   EUROPEAN     REAL   
                                                     CATION     EQUITY     ESTATE     GROWTH     MARKETS    EQUITY     ESTATE  
                                                                                                                               
                                                    ---------------------------------------------------------------------------
EQUITY SECURITIES:                                                                                                             
  Common Stocks...................................         X          X          X          X         X          X          X  
  Depositary Receipts.............................         X          X          X          X         X          X          X  
  Preferred Stocks................................         X          X          X          X         X          X          X  
  Rights..........................................         X          X          X          X         X          X          X  
  Warrants........................................         X          X          X          X         X          X          X  
  Convertible Securities..........................         X          X          X          X         X          X          X  
  Limited Partnerships............................                                                                             
  Investment Company Securities...................         X          X          X          X         X          X          X  
  Real Estate Investing...........................         X          X          X          X         X          X          X  
  --REITS.........................................         X          X          X          X         X          X          X  
  --Specialized Ownership Vehicles................         X          X          X          X         X          X          X  
FIXED INCOME SECURITIES:                                                                                                       
  High Yield Securities...........................                                                    X                        
  U.S. Government Securities......................         X          X          X          X         X          *          X  
  Agencies........................................         X          X          X          X         X          *          X  
  Corporates......................................         X          X          X          X         X          *          X  
  Money Market Instruments........................         X          X          X          X         X          X          X  
  Mortgage Related Securities.....................                                                                             
  --MBSs..........................................                                                                             
  --CMOs..........................................                                                                             
  --SMBSs.........................................                                                                             
  Repurchase Agreements...........................         X          X          X          X         X          X          X  
  Municipals......................................                                                                             
  Asset-Backeds...................................                                                                             
  Loan Participations and Assignments.............                                                    X                        
  Temporary Investments...........................         X          X          X          X         X          X          X  
  Zero Coupons, Pay-In-Kind Securities or Deferred                                                                             
   Payment Securities.............................         X          X          X          X         X                     X  
  Floaters........................................                                                                             
  Inverse Floaters................................                                                                             
FOREIGN INVESTMENT:                                                                                                            
  Foreign Equity Securities.......................         X          X          X          X         X          X          X  
  Foreign Government Fixed Income Securities......         X          X          X          X         X                     X  
  Foreign Corporate Fixed Income Securities.......         X          X          X          X         X                     X  
  Emerging Market Country Securities..............         X          X          X          X         X          X          X  
  Russian Equity Securities.......................                                                    X                        
  Foreign Currency Transactions...................         X          X          X          X         X          X          X  
  Brady Bonds.....................................         X          X          X                    X          X          X  
  Investment Funds................................         X          X          X          X         X          X          X  



                                                                                                 INTER-                        
                                                                           INTER-     INTER-    NATIONAL                       
                                                     GLOBAL               NATIONAL   NATIONAL     SMALL    JAPANESE     LATIN  
                                                     EQUITY      GOLD      EQUITY     MAGNUM       CAP      EQUITY    AMERICAN 
                                                                                                                               
                                                    ---------------------------------------------------------------------------
EQUITY SECURITIES:                                                                                                             
  Common Stocks...................................         X          X          X          X          X         X            X
  Depositary Receipts.............................         X          X          X          X          X         X            X
  Preferred Stocks................................         X          X          X          X          X         X            X
  Rights..........................................         X          X          X          X          X         X            X
  Warrants........................................         X          X          X          X          X         X            X
  Convertible Securities..........................         X          X          X          X          X         X            X
  Limited Partnerships............................                                                                             
  Investment Company Securities...................         X          X          X          X          X         X            X
  Real Estate Investing...........................         X                     X          X          X         X            X
  --REITS.........................................         X                     X          X          X         X            X
  --Specialized Ownership Vehicles................         X                     X          X          X         X            X
FIXED INCOME SECURITIES:                                                                                                       
  High Yield Securities...........................                                                                            X
  U.S. Government Securities......................         *          X          *          X          *         X            X
  Agencies........................................         *          X          *          X          *         X            X
  Corporates......................................         *          X          *          X          *         X            X
  Money Market Instruments........................         X          X          X          X          X         X            X
  Mortgage Related Securities.....................                                                                             
  --MBSs..........................................                                                                             
  --CMOs..........................................                                                                             
  --SMBSs.........................................                                                                             
  Repurchase Agreements...........................         X          X          X          X          X         X            X
  Municipals......................................                                                                             
  Asset-Backeds...................................                                                                             
  Loan Participations and Assignments.............                                                                            X
  Temporary Investments...........................         X          X          X          X          X         X            X
  Zero Coupons, Pay-In-Kind Securities or Deferred                                                                             
   Payment Securities.............................                    X                     X                    X            X
  Floaters........................................                                                                             
  Inverse Floaters................................                                                                             
FOREIGN INVESTMENT:                                                                                                            
  Foreign Equity Securities.......................         X          X          X          X          X         X            X
  Foreign Government Fixed Income Securities......                    X                     X                    X            X
  Foreign Corporate Fixed Income Securities.......                    X                     X                    X            X
  Emerging Market Country Securities..............         X          X          X          X          X                      X
  Russian Equity Securities.......................                                                                             
  Foreign Currency Transactions...................         X          X          X          X          X         X            X
  Brady Bonds.....................................         X          X          X          X                    X            X
  Investment Funds................................         X          X          X          X          X         X            X

4                                                                       

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GLOBAL AND INTERNATIONAL EQUITY PORTFOLIOS (CONTINUED)                          

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                                                    ACTIVE                                                                    
                                                    INTER-                                                                    
                                                   NATIONAL                ASIAN                                     EUROPEAN 
                                                     ALLO-      ASIAN      REAL       CHINA    EMERGING   EUROPEAN     REAL   
                                                    CATION     EQUITY     ESTATE     GROWTH     MARKETS    EQUITY     ESTATE  
                                                                                                                              
                                                   ---------------------------------------------------------------------------
OTHER SECURITIES AND INVESTMENT TECHNIQUES:                                                                                   
  Loans of Portfolio Securities...................        X          X          X          X         X          X          X  
  Non-Publicly Traded Securities, Private                                                                                     
   Placements and Restricted Securities...........        X          X          X          X         X          X          X  
  When-Issued and Delayed Delivery Securities.....        X          X          X          X         X          X          X  
  Borrowing for Investment Purposes...............                                                                            
  Temporary Borrowing.............................        X          X          X          X         X          X          X  
  Reverse Repurchase Agreements...................                                                                            
  Short Sales.....................................                                                                            
  Structured Investments..........................        X          X          X          X         X          X          X  
DERIVATIVE PRODUCTS:                                                                                                          
  Foreign Currency Forward Contracts..............        X          X          X          X         X          X          X  
  Futures Contracts...............................        X          X          X          X         X          X          X  
  Forward Contracts...............................        X          X          X          X         X          X          X  
  Option Transactions.............................        X          X          X          X         X          X          X  
  Swaps...........................................        X          X          X          X         X          X          X  



                                                                                               INTER-                         
                                                                          INTER-     INTER-   NATIONAL                        
                                                    GLOBAL               NATIONAL   NATIONAL    SMALL    JAPANESE     LATIN   
                                                    EQUITY      GOLD      EQUITY     MAGNUM      CAP      EQUITY    AMERICAN  
                                                                                                                              
                                                   -------------------------------------------------------------------------- 
OTHER SECURITIES AND INVESTMENT TECHNIQUES:                                                                                   
  Loans of Portfolio Securities...................        X          X          X       X            X         X            X 
  Non-Publicly Traded Securities, Private                                                                                     
   Placements and Restricted Securities...........        X          X          X       X            X         X            X 
  When-Issued and Delayed Delivery Securities.....        X          X          X       X            X         X            X 
  Borrowing for Investment Purposes...............                                                                            
  Temporary Borrowing.............................        X          X          X       X            X         X            X 
  Reverse Repurchase Agreements...................                                                                          X 
  Short Sales.....................................                                                                          X 
  Structured Investments..........................        X          X          X       X            X         X            X 
DERIVATIVE PRODUCTS:                                                                                                          
  Foreign Currency Forward Contracts..............        X          X          X       X            X         X            X 
  Futures Contracts...............................        X          X          X       X            X         X            X 
  Forward Contracts...............................        X          X          X       X            X         X            X 
  Option Transactions.............................        X          X          X       X            X         X            X 
  Swaps...........................................        X          X          X       X            X         X            X 

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

*  This Portfolio may invest in certain U.S. Government Securities, Agencies and
Corporate Debt as described under Money Market Instruments and Temporary  
Investments.                                                              

U.S. EQUITY PORTFOLIOS                                                          

                                                        [Enlarge/Download Table]

                                                            SMALL                                                      
                                                FOCUS      COMPANY    EQUITY                                           
                                                EQUITY     GROWTH     GROWTH    MICROCAP   TECHNOLOGY  U.S. EQUITY PLUS
                                                                                                                       
                                              -------------------------------------------------------------------------
EQUITY SECURITIES:                                                                                                     
  Common Stocks..............................         X         X           X         X            X              X    
  Depositary Receipts........................         X         X           X         X            X              X    
  Preferred Stocks...........................         X         X           X         X            X              X    
  Rights.....................................         X         X           X         X            X              X    
  Warrants...................................         X         X           X         X            X              X    
  Convertible Securities.....................         X         X           X         X            X              X    
  Limited Partnerships.......................                                                                          
  Investment Company Securities..............         X         X           X         X            X              X    
  Real Estate Investing......................         X         X           X         X                           X    
  --REITS....................................         X         X           X         X                           X    
  --Specialized Ownership Vehicles...........         X         X           X         X                           X    
FIXED INCOME SECURITIES:                                                                                               
  High Yield Securities......................                                                      X                   
  U.S. Government Securities.................         X         X           X         X            X              X    
  Agencies...................................         X         X           X         X            X              X    
  Corporates.................................         X         X           X         X            X              X    
  Money Market Instruments...................         X         X           X         X            X              X    



                                              U.S. REAL ESTATE  VALUE EQUITY                                           
                                                                                                                       
                                              ------------------------------                                           
EQUITY SECURITIES:                                                                                                     
  Common Stocks..............................             X              X                                             
  Depositary Receipts........................             X              X                                             
  Preferred Stocks...........................             X              X                                             
  Rights.....................................             X              X                                             
  Warrants...................................             X              X                                             
  Convertible Securities.....................             X              X                                             
  Limited Partnerships.......................                                                                          
  Investment Company Securities..............             X              X                                             
  Real Estate Investing......................             X              X                                             
  --REITS....................................             X              X                                             
  --Specialized Ownership Vehicles...........             X              X                                             
FIXED INCOME SECURITIES:                                                                                               
  High Yield Securities......................                                                                          
  U.S. Government Securities.................             X              X                                             
  Agencies...................................             X              X                                             
  Corporates.................................             X              X                                             
  Money Market Instruments...................             X              X                                             

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U.S. EQUITY PORTFOLIOS (CONTINUED)                                              

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                                                           SMALL                                        U.S.       U.S.   
                                                FOCUS     COMPANY    EQUITY                            EQUITY      REAL   
                                               EQUITY     GROWTH     GROWTH    MICROCAP   TECHNOLOGY    PLUS      ESTATE  
                                                                                                                          
                                              ----------------------------------------------------------------------------
FIXED INCOME SECURITIES: (CONTINUED)                                                                                      
  Mortgage Related Securities................                                                                             
  --MBSs.....................................                                                                             
  --CMOs.....................................                                                                             
  --SMBSs....................................                                                                             
  Repurchase Agreements......................        X          X          X          X           X          X          X 
  Municipals.................................                                                                             
  Asset-Backeds..............................                                                                             
  Loan Participations and Assignments........                                                                             
  Temporary Investments......................        X          X          X          X           X          X          X 
  Zero Coupons, Pay-In-Kind Securities or                                                                                 
   Deferred Payment Securities...............        X          X          X          X           X          X          X 
  Floaters...................................                                                                             
  Inverse Floaters...........................                                                                             
FOREIGN INVESTMENT:                                                                                                       
  Foreign Equity Securities..................        X          X          X          X           X          X          X 
  Foreign Bonds..............................                                                     X                     X 
  Emerging Market Country Securities.........                                                     X                     X 
  Russian Equity Securities..................                                                                             
  Foreign Currency Transactions..............        X          X          X          X           X          X          X 
  Brady Bonds................................                                                                             
  Investment Funds...........................        X          X          X          X           X          X          X 
OTHER SECURITIES AND INVESTMENT TECHNIQUES:                                                                               
  Loans of Portfolio Securities..............        X          X          X          X           X          X          X 
  Non-Publicly Traded Securities, Private                                                                                 
   Placements and Restricted Securities......        X          X          X          X           X          X          X 
  When-Issued and Delayed Delivery                                                                                        
   Securities................................        X          X          X          X           X          X          X 
  Borrowing for Investment Purposes..........                                         X                                   
  Temporary Borrowing........................        X          X          X          X           X          X          X 
  Reverse Repurchase Agreements..............                                                     X          X            
  Short Sales................................                                                                             
  Structured Investments.....................        X          X          X          X           X          X          X 
DERIVATIVE PRODUCTS:                                                                                                      
  Foreign Currency Forward Contracts.........        X          X          X          X           X          X          X 
  Futures Contracts..........................        X          X          X          X           X          X          X 
  Forward Contracts..........................        X          X          X          X           X          X          X 
  Option Transactions........................        X          X          X          X           X          X          X 
  Swaps......................................        X          X          X          X           X          X          X 



                                                VALUE                                                                     
                                               EQUITY                                                                     
                                                                                                                          
                                              ---------                                                                   
FIXED INCOME SECURITIES: (CONTINUED)                                                                                      
  Mortgage Related Securities................                                                                             
  --MBSs.....................................                                                                             
  --CMOs.....................................                                                                             
  --SMBSs....................................                                                                             
  Repurchase Agreements......................         X                                                                   
  Municipals.................................                                                                             
  Asset-Backeds..............................                                                                             
  Loan Participations and Assignments........                                                                             
  Temporary Investments......................         X                                                                   
  Zero Coupons, Pay-In-Kind Securities or                                                                                 
   Deferred Payment Securities...............         X                                                                   
  Floaters...................................                                                                             
  Inverse Floaters...........................                                                                             
FOREIGN INVESTMENT:                                                                                                       
  Foreign Equity Securities..................         X                                                                   
  Foreign Bonds..............................                                                                             
  Emerging Market Country Securities.........                                                                             
  Russian Equity Securities..................                                                                             
  Foreign Currency Transactions..............         X                                                                   
  Brady Bonds................................                                                                             
  Investment Funds...........................         X                                                                   
OTHER SECURITIES AND INVESTMENT TECHNIQUES:                                                                               
  Loans of Portfolio Securities..............         X                                                                   
  Non-Publicly Traded Securities, Private                                                                                 
   Placements and Restricted Securities......         X                                                                   
  When-Issued and Delayed Delivery                                                                                        
   Securities................................         X                                                                   
  Borrowing for Investment Purposes..........                                                                             
  Temporary Borrowing........................         X                                                                   
  Reverse Repurchase Agreements..............                                                                             
  Short Sales................................                                                                             
  Structured Investments.....................         X                                                                   
DERIVATIVE PRODUCTS:                                                                                                      
  Foreign Currency Forward Contracts.........         X                                                                   
  Futures Contracts..........................         X                                                                   
  Forward Contracts..........................         X                                                                   
  Option Transactions........................         X                                                                   
  Swaps......................................         X                                                                   

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FIXED INCOME AND MONEY MARKET PORTFOLIOS                                        

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                                         EMERGING               GLOBAL               MORTGAGE-                         MUNICIPAL
                                          MARKETS     FIXED      FIXED      HIGH       BACKED    MUNICIPAL    MONEY      MONEY  
                                           DEBT      INCOME     INCOME      YIELD    SECURITIES    BOND      MARKET     MARKET  
                                                                                                                                
                                         ---------------------------------------------------------------------------------------
EQUITY SECURITIES:                                                                                                              
  Common Stocks.........................                                         X                                              
  Depositary Receipts...................        X                                                                               
  Preferred Stocks......................        X          X          X          X                                              
  Rights................................        X          X          X          X                                              
  Warrants..............................        X          X          X          X                                              
  Convertible Securities................        X          X          X          X                                              
  Limited Partnerships..................                                         X                                              
  Investment Company Securities.........        X          X          X          X           X          X          X           X
  Real Estate Investing.................                                                                                        
  --REITs...............................                                         +                                              
  --Specialized Ownership Vehicles......                                                                                        
FIXED INCOME SECURITIES:                                                                                                        
  High Yield Securities.................        X                                X                                              
  U.S. Government Securities............        X          X          X          X           X          X          X           X
  Agencies..............................        X          X          X          X           X          X          X           X
  Corporates............................        X          X          X          X           *          X          X           *
  Money Market Instruments..............        X          X          X          X           X          X          X           X
  Mortgage Related Securities...........        X          X          X          X           X          X          X            
  --MBSs................................        X          X          X          X           X          X                       
  --CMOs................................        X          X          X          X           X                                  
  --SMBSs...............................                   X          X          X           X                                  
  Repurchase Agreements.................        X          X          X          X           X          X          X           X
  Municipals............................        X          X          X          X                      X          X           X
  Asset-Backeds.........................        X          X          X          X                                 X            
  Loan Participations and Assignments...        X                                X                                              
  Temporary Investments.................        X          X          X          X           X          X          X           X
  Zero Coupons, Pay-In-Kind Securities                                                                                          
   or Deferred Payment Securities.......        X          X          X          X           X          X          X           X
  Floaters..............................        X          X          X          X           X          X          X           X
  Inverse Floaters......................        X          X          X          X           X          X                       
FOREIGN INVESTMENT:                                                                                                             
  Foreign Equity Securities.............        X          X          X          X                                              
  Foreign Bonds.........................        X          X          X          X                                              
  Emerging Market Country Securities....        X                     X          X                                              
  Russian Equity Securities.............                                                                                        
  Foreign Currency Transactions.........        X          X          X          X                                              
  Brady Bonds...........................        X                     X          X                                              
  Investment Funds......................        X                                                                               

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FIXED INCOME AND MONEY MARKET PORTFOLIOS (CONTINUED)                            

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                                              EMERGING               GLOBAL               MORTGAGE-                       
                                               MARKETS     FIXED      FIXED      HIGH       BACKED    MUNICIPAL    MONEY  
                                                DEBT      INCOME     INCOME      YIELD    SECURITIES    BOND      MARKET  
                                                                                                                          
                                              ----------------------------------------------------------------------------
OTHER SECURITIES AND INVESTMENT TECHNIQUES:                                                                               
  Loans of Portfolio Securities..............        X          X          X          X           X          X            
  Non-Publicly Traded Securities, Private                                                                                 
   Placements and Restricted Securities......        X          X          X          X           X          X          X 
  When-Issued and Delayed Delivery                                                                                        
   Securities................................        X          X          X          X           X          X          X 
  Borrowing for Investment Purposes..........        X                                                                    
  Temporary Borrowing........................        X          X          X          X           X          X          X 
  Reverse Repurchase Agreements..............        X                                X                                 X 
  Short Sales................................        X                                                                    
  Structured Investments.....................        X          X          X          X           X          X          X 
DERIVATIVE PRODUCTS:                                                                                                      
  Foreign Currency Forward Contracts.........        X          X          X          X           X          X            
  Futures Contracts..........................        X          X          X          X           X          X            
  Forward Contracts..........................        X          X          X          X           X          X            
  Option Transactions........................        X          X          X          X           X          X            
  Swaps......................................        X          X          X          X           X          X            


                                              MUNICIPAL                                                                   
                                                MONEY                                                                     
                                               MARKET                                                                     
                                                                                                                          
                                              ---------                                                                   
OTHER SECURITIES AND INVESTMENT TECHNIQUES:                                                                               
  Loans of Portfolio Securities..............                                                                             
  Non-Publicly Traded Securities, Private                                                                                 
   Placements and Restricted Securities......         X                                                                   
  When-Issued and Delayed Delivery                                                                                        
   Securities................................         X                                                                   
  Borrowing for Investment Purposes..........                                                                             
  Temporary Borrowing........................         X                                                                   
  Reverse Repurchase Agreements..............                                                                             
  Short Sales................................                                                                             
  Structured Investments.....................                                                                             
DERIVATIVE PRODUCTS:                                                                                                      
  Foreign Currency Forward Contracts.........                                                                             
  Futures Contracts..........................                                                                             
  Forward Contracts..........................                                                                             
  Option Transactions........................                                                                             
  Swaps......................................                                                                             

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

*  This Portfolio may invest in certain Corporate Debt as described under Money 
Market Instruments and Temporary Investments.                             

+  The High Yield Portfolio may invest in certain fixed income securities issued
by REITs.                                                                 

8                                                                       

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EQUITY SECURITIES                                                               

Equity Securities generally represent an ownership interest in an issuer, or may
be convertible into or represent a right to acquire an ownership interest in an 
issuer. While there are many types of Equity Securities, prices of all equity   
securities will fluctuate. Economic, political and other events may affect the  
prices of broad equity markets. For example, changes in inflation or consumer   
demand may affect the prices of all Equity Securities in the United States.     
Similar events also may affect the prices of particular equity securities. For  
example, news about the success or failure of a new product may affect the price
of a particular issuer's Equity Securities.                                     

COMMON STOCKS.  Common Stocks represent an ownership interest in a corporation, 
entitling the stockholder to voting rights and receipt of dividends paid based  
on proportionate ownership.                                                     

DEPOSITARY RECEIPTS.  Depositary Receipts represent an ownership interest in    
securities of foreign companies (an "underlying issuer") that are deposited with
a depositary. Depositary Receipts are not necessarily denominated in the same   
currency as the underlying securities. Depositary Receipts include American     
Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs") and other     
types of Depositary Receipts (which, together with ADRs and GDRs, are           
hereinafter collectively referred to as "Depositary Receipts"). ADRs are        
dollar-denominated Depositary Receipts typically issued by a U.S. financial     
institution which evidence an ownership interest in a security or pool of       
securities issued by a foreign issuer. ADRs are listed and traded in the United 
States. GDRs and other types of Depositary Receipts are typically issued by     
foreign banks or trust companies, although they also may be issued by U.S.      
financial institutions, and evidence ownership interests in a security or pool  
of securities issued by either a foreign or a U.S. corporation. Generally,      
Depositary Receipts in registered form are designed for use in the U.S.         
securities market and Depositary Receipts in bearer form are designed for use in
securities markets outside the United States.                                   

Depositary Receipts may be "sponsored" or "unsponsored." Sponsored Depositary   
Receipts are established jointly by a depositary and the underlying issuer,     
whereas unsponsored Depositary Receipts may be established by a depositary      
without participation by the underlying issuer. Holders of unsponsored          
Depositary Receipts generally bear all the costs associated with establishing   
unsponsored Depositary Receipts. In addition, the issuers of the securities     
underlying unsponsored Depository Receipts are not obligated to disclose        
material information in the United States and, therefore, there may be less     
information available regarding such issuers and there may not be a correlation 
between such information and the market value of the Depositary Receipts. For   
purposes of a Portfolio's investment policies, the Portfolio's investments in   
Depositary Receipts will be deemed to be an investment in the underlying        
securities, except that ADRs may be deemed to be issued by a U.S. issuer.       

PREFERRED STOCKS.  Preferred Stocks are securities that evidence ownership in a 
corporation and pay a fixed or variable stream of dividends. Preferred Stocks   
have a preference over Common Stocks in the event of the liquidation of an      
issuer and usually do not carry voting rights. Because Preferred Stocks pay a   
fixed or variable stream of dividends they have many of the characteristics of a
Fixed Income Security and are, therefore, included in both the definition of    
Equity Security and Fixed Income Security.                                      

RIGHTS.  Rights represent the right, but not the obligation, for a fixed period 
of time to purchase additional shares of an issuer's Common Stock at the time of
a new issuance, usually at a price below the initial offering price of the      
Common Stock and before the Common Stock is offered to the general public.      
Rights are usually freely transferrable. The risk of investing in a Right is    
that the Right may expire prior to the market value of the Common Stock         
exceeding the price fixed by the Right.                                         

WARRANTS.  Warrants give holders the right, but not the obligation, to buy      
Common Stock of an issuer at a given price, usually higher than the market price
at the time of issuance, during a specified period. Warrants are usually freely 
transferrable. The risk of investing in a Warrant is that the Warrant may expire
prior to the market value of the Common Stock exceeding the price fixed by the  
Warrant.                                                                        

CONVERTIBLE SECURITIES.  Convertible Securities are securities that may be      
exchanged under certain circumstances for a fixed number of shares of Common    
Stock or other Equity Securities. Convertible Securities generally represent a  
feature of some other type of security, such as a Fixed Income Security or      
Preferred Stock, so that, for example, a Convertible Fixed Income Security would
be a Fixed Income Security that is convertible into Common Stock. Convertible   
Securities may be viewed as an investment in the current security or the        
security into which the Convertible Securities may be exchanged and, therefore, 
are included in both the definition of Equity Security and Fixed Income         
Security.                                                                       

LIMITED PARTNERSHIPS.  A limited partnership interest entitles a Portfolio to   
participate in the investment return of the partnership's assets as defined by  
the agreement among the partners. As a limited partner, a Portfolio generally is
not permitted to participate in the management of the partnership. However,     
unlike a general partner whose liability is not limited, a limited partner's    
liability generally is limited to the amount of its commitment to the           
partnership.                                                                    

INVESTMENT COMPANY SECURITIES.  Investment Company Securities are securities of 
other open-end or closed-end investment companies. The Investment Company Act of
1940, as amended (the "1940 Act"), generally prohibits an investment company    
from acquiring more than 3% of the outstanding voting shares of an investment   
company and limits such investments to no more than 5% of the Portfolio's total 
assets in any one investment company and no more than 10% in any combination of 
investment companies. A Portfolio may invest in Investment Company Securities of
investment companies managed by MSDW Investment                                 

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Management or its affiliates to the extent permitted under the 1940 Act or as   
otherwise authorized by the Securities and Exchange Commission ("SEC"). To the  
extent a Portfolio invests a portion of its assets in Investment Company        
Securities, those assets will be subject to the risks of the purchased          
investment company's portfolio securities. The Portfolio also will bear it's    
proportionate share of the expenses of the purchased investment company in      
addition to its own expenses.                                                   

REAL ESTATE INVESTING.  Investments in securities of issuers engaged in the real
estate industry entail special risks and considerations. In particular,         
securities of such issuers may be subject to risks associated with the direct   
ownership of real estate. These risks include: the cyclical nature of real      
estate values, risks related to general and local economic conditions,          
overbuilding and increased competition, increases in property taxes and         
operating expenses, demographic trends and variations in rental income, changes 
in zoning laws, casualty or condemnation losses, environmental risks, regulatory
limitations on rents, changes in neighborhood values, changes in the appeal of  
properties to tenants, increases in interest rates and other real estate capital
market influences. Generally, increases in interest rates will increase the     
costs of obtaining financing, which could directly and indirectly decrease the  
value of the Portfolios' investments.                                           

REITS.  Real Estate Investment Trusts ("REITs") pool investors' funds for       
investment primarily in income producing real estate or real estate related     
loans or interests. A REIT is not taxed on income distributed to its            
shareholders or unitholders if it complies with regulatory requirements relating
to its organization, ownership, assets and income, and with a regulatory        
requirement that it distribute to its shareholders or unitholders at least 95%  
of its taxable income for each taxable year. Generally, REITs can be classified 
as Equity REITs, Mortgage REITs or Hybrid REITs. Equity REITs invest the        
majority of their assets directly in real property and derive their income      
primarily from rents and capital gains from appreciation realized through       
property sales. Equity REITs are further categorized according to the types of  
real estate securities they own, e.g., apartment properties, retail shopping    
centers, office and industrial properties, hotels, health-care facilities,      
manufactured housing and mixed-property types. Mortgage REITs invest the        
majority of their assets in real estate mortgages and derive their income       
primarily from interest payments. Hybrid REITs combine the characteristics of   
both Equity and Mortgage REITs.                                                 

A shareholder in any of the Portfolios, by investing in REITs indirectly through
the Portfolio, will bear not only his proportionate share of the expenses of the
Portfolio, but also, indirectly, the management expenses of underlying REITs.   
REITs may be affected by changes in the value of their underlying properties and
by defaults by borrowers or tenants. Mortgage REITs may be affected by the      
quality of the credit extended. Furthermore, REITs are dependent on specialized 
management skills. Some REITs may have limited diversification and may be       
subject to risks inherent in investments in a limited number of properties, in a
narrow geographic area, or in a single property type. REITs depend generally on 
their ability to generate cash flow to make distributions to shareholders or    
unitholders, and may be subject to defaults by borrowers and to                 
self-liquidations. In addition, the performance of a REIT may be affected by its
failure to qualify for tax-free pass-through of income, or its failure to       
maintain exemption from registration under the 1940 Act.                        

SPECIALIZED OWNERSHIP VEHICLES.  Specialized ownership vehicles pool investors' 
funds for investment primarily in income-producing real estate or real estate   
related loans or interests. Such specialized ownership vehicles in which the    
Portfolios may invest include property unit trusts, REITs and other similar     
specialized investment vehicles. Investments in such specialized ownership      
vehicles may have favorable or unfavorable legal, regulatory or tax implications
for a Portfolio and, to the extent such vehicles are structured similarly to    
investment funds, may cause the Portfolios' shareholders to indirectly bear     
certain additional operating expenses.                                          

FIXED INCOME SECURITIES                                                         

Fixed Income Securities generally represent an issuer's obligation to repay     
money that it has borrowed together with interest on the amount borrowed. Fixed 
Income Securities come in many varieties and may differ in the way that interest
is calculated, the amount and frequency of payments, the type of collateral, if 
any, and some Fixed Income Securities may have other novel features such as     
conversion rights. Prices of Fixed Income Securities fluctuate and, in          
particular, are subject to credit risk and market risk. Credit risk is the      
possibility that an issuer may be unable to meet scheduled interest and         
principal payments. Market risk is the possibility that a change in interest    
rates or the market's perception of the issuer's prospects may adversely affect 
the value of a Fixed Income Security. Economic, political and other events also 
may affect the prices of broad fixed income markets. Generally, the values of   
Fixed Income Securities vary inversely with changes in interest rates. During   
periods of falling interest rates, the values of outstanding Fixed Income       
Securities generally rise and during periods of rising interest rates, the      
values of such securities generally decline. Prepayments also will affect the   
maturity and value of Fixed Income Securities. Prepayments generally rise in    
response to a decline in interest rates as debtors take advantage of the        
opportunity to refinance their obligations. When this happens, a Portfolio may  
be forced to reinvest in lower yielding Fixed Income Securities.                

The length of time to the final payment, or maturity, of a Fixed Income Security
also affects its price volatility. While securities with longer maturities tend 
to produce higher yields, the prices of longer maturity securities are subject  
to greater market fluctuation, especially as a result of changes in interest    
rates. Traditionally, term to maturity has been used as a barometer of a Fixed  
Income Security's sensitivity to interest rate changes. However, this measure   
considers only the time until final payment and takes no account of the pattern 
of payments prior to maturity. Duration is a more precise measure of the        
expected life of a                                                              
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Fixed Income Security that combines consideration of yield, coupon, interest    
payments, final maturity and call features and measures the expected life of a  
Fixed Income Security on a present value basis. The duration of a Fixed Income  
Security ordinarily is shorter than its maturity.                               

INVESTMENT GRADE SECURITIES.  Investment Grade Securities are Fixed Income      
Securities rated by one or more of the rating agencies in one of the four       
highest rating categories at the time of purchase (e.g., AAA, AA, A or BBB by   
Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service, Inc.        
("Fitch"), or Aaa, Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's")) 
or determined to be of equivalent quality by MSDW Investment Management.        
Securities rated BBB or Baa represent the lowest of four levels of Investment   
Grade Securities and are regarded as borderline between definitely sound        
obligations and those in which the speculative element begins to predominate.   
Ratings assigned to Fixed Income Securities represent only the opinion of the   
rating agency assigning the rating and are not dispositive of the credit risk   
associated with the purchase of a particular Fixed Income Security. Moreover,   
market risk also will affect the prices of even the highest rated Fixed Income  
Securities so that their prices may rise or fall even if the issuer's capacity  
to repay its obligations remains unchanged.                                     

HIGH YIELD SECURITIES.  High Yield Securities are generally considered to       
include Fixed Income Securities rated below the four highest rating categories  
at the time of purchase (e.g., Ba through C by Moody's or BB through D by S&P)  
and unrated securities considered by MSDW Investment Management to be of        
equivalent quality. High Yield Securities are not considered investment grade   
and are commonly referred to as junk bonds or high yield, high risk securities. 

While High Yield Securities offer higher yields, they carry a high degree of    
credit risk and are considered speculative by the major credit rating agencies. 
High Yield Securities are often issued by smaller, less credit worthy issuers,  
or by highly leveraged (indebted) issuers that are generally less able than more
established or less leveraged issuers to make scheduled payments of interest and
principal. In comparison to Investment Grade Securities, the price movement of  
these securities is influenced less by changes in interest rates and more by the
financial and business position of the issuer. The values of High Yield         
Securities are more volatile and may react with greater sensitivity to market   
changes.                                                                        

U.S. GOVERNMENT SECURITIES.  U.S. Government Securities are Fixed Income        
Securities that are backed by the full faith and credit of the U.S. Government  
as to the payment of both principal and interest. U.S. Government Securities may
include securities issued by the U.S. Treasury and securities issued by federal 
agencies and U.S. Government sponsored instrumentalities.                       

AGENCIES.  Agencies are Fixed Income Securities which are not guaranteed by, or 
backed by the full faith and credit of the U.S. Government, but which are       
issued, sponsored or guaranteed by a federal agency or federally sponsored      
agency such as the Student Loan Marketing Association, or any of several other  
agencies.                                                                       

CORPORATES.  Corporates are Fixed Income Securities issued by private           
businesses. Holders, as creditors, have a prior legal claim over holders of     
Equity Securities of the issuer as to both income and assets for the principal  
and interest due the holder.                                                    

MONEY MARKET INSTRUMENTS.  Money Market Instruments are high quality short-term 
Fixed Income Securities. Money Market Instruments may include obligations of    
governments, government agencies, banks, corporations and special purpose       
entities and Repurchase Agreements relating to these obligations. Certain Money 
Market Instruments may be denominated in a foreign currency.                    

MORTGAGE RELATED SECURITIES.  Mortgage related securities are securities that,  
directly or indirectly, represent a participation in, or are secured by and     
payable from, mortgage loans on real property. Mortgage related securities      
include collateralized mortgage obligations and mortgage-backed securities      
issued or guaranteed by agencies or instrumentalities of the U.S. Government or 
by private sector entities.                                                     

   MORTGAGE-BACKED SECURITIES.  With mortgage-backed securities ("MBSs"), many
mortgagees' obligations to make monthly payments to their lending institution   
are pooled together and passed through to investors. The pools are assembled by 
various governmental, Government-related and private organizations. A Portfolio 
may invest in securities issued or guaranteed by Government National Mortgage   
Association ("GNMA" or "Ginnie Mae"), Federal Home Loan Mortgage Corporation    
("FHLMC" or "Freddie Mac"), Fannie Mae, private issuers and other government    
agencies. MBSs issued by non-agency issuers, whether or not such securities are 
subject to guarantees, may entail greater risk, since private issuers may not be
able to meet their obligations under the policies. If there is no guarantee     
provided by the issuer, a Portfolio will purchase only MBSs which at the time of
purchase are rated investment grade by one or more NRSROs or, if unrated, are   
deemed by MSDW Investment Management to be of comparable quality.               

MBSs are issued or guaranteed by private sector originators of or investors in  
mortgage loans and structured similarly to governmental pass-through securities.
Because private pass-throughs typically lack a guarantee by an entity having the
credit status of a governmental agency or instrumentality, however, they are    
generally structured with one or more of the types of credit enhancement        
described below. Fannie Mae and FHLMC obligations are not backed by the full    
faith and credit of the U.S. Government as GNMA certificates are. FHLMC         
securities are supported by its right to borrow from the U.S. Treasury. Each of 
GNMA, Fannie Mae and FHLMC guarantees timely distributions of interest to       
certificate holders. Each of GNMA and Fannie Mae also guarantees timely         
distributions of scheduled principal. Although FHLMC has in the past guaranteed 
only the ultimate                                                               

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collection of principal of the underlying mortgage loan, FHLMC now issues MBSs  
("FHLMC Gold PCS") which also guarantee timely payment of monthly principal     
reductions. Resolution Funding Corporation ("REFCORP") obligations are backed,  
as to principal payments, by zero coupon U.S. Treasury bonds, and as to interest
payment, ultimately by the U.S. Treasury.                                       

There are two methods of trading MBSs. A specified pool transaction is a trade  
in which the pool number of the security to be delivered on the settlement date 
is known at the time the trade is made. This is in contrast with the typical MBS
transaction, called a TBA (to be announced) transaction, in which the type of   
MBS to be delivered is specified at the time of trade but the actual pool       
numbers of the securities that will be delivered are not known at the time of   
the trade. The pool numbers of the pools to be delivered at settlement are      
announced shortly before settlement takes place. The terms of the TBA trade may 
be made more specific if desired. Generally, agency pass-through MBSs are traded
on a TBA basis.                                                                 

Like Fixed Income Securities in general, MBSs will generally decline in price   
when interest rates rise. Rising interest rates also tend to discourage         
refinancings of home mortgages, with the result that the average life of MBSs   
held by a Portfolio may be lengthened. As average life extends, price volatility
generally increases. This extension of average life causes the market price of  
the MBSs to decrease further when interest rates rise than if their average     
lives were fixed. However, when interest rates fall, mortgages may not enjoy as 
large a gain in market value due to prepayment risk because additional mortgage 
prepayments must be reinvested at lower interest rates. Faster prepayment will  
shorten the average life and slower prepayments will lengthen it. However, it is
possible to determine what the range of the average life movement could be and  
to calculate the effect that it will have on the price of the MBS. In selecting 
MBSs, MSDW Investment Management looks for those that offer a higher yield to   
compensate for any variation in average maturity. If the underlying mortgage    
assets experience greater than anticipated prepayments of principal, a Portfolio
may fail to fully recoup its initial investment in these securities, even if the
security is in one of the highest rating categories. A Portfolio may invest,    
without limit, in MBSs issued by private issuers when MSDW Investment Management
deems that the quality of the investment, the quality of the issuer, and market 
conditions warrant such investments. The Portfolios will purchase securities    
issued by private issuers which are rated investment grade at the time of       
purchase by Moody's or S&P or be deemed by MSDW Investment Management to be of  
comparable investment quality.                                                  

   FANNIE MAE CERTIFICATES.  Fannie Mae is a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage    
Association Charter Act of 1938. The obligations of Fannie Mae are not backed by
the full faith and credit of the U.S. Government.                               

Each Fannie Mae certificate represents a pro rata interest in one or more pools 
of mortgage loans insured by the Federal Housing Administration under the       
Housing Act, or Title V of the Housing Act of 1949 ("FHA Loans"), or guaranteed 
by the Department of Veteran Affairs under the Servicemen's Readjustment Act of 
1944, as amended ("VA Loans") or conventional mortgage loans (i.e., mortgage    
loans that are not insured or guaranteed by any governmental agency) of the     
following types: (i) fixed rate level payment mortgage loans; (ii) fixed rate   
growing equity mortgage loans; (iii) fixed rate graduated payment mortgage      
loans; (iv) variable rate California mortgage loans; (v) other adjustable rate  
mortgage loans; and (vi) fixed rate and adjustable mortgage loans secured by    
multi-family projects.                                                          

    FREDDIE MAC CERTIFICATES.  Freddie Mac is a corporate instrumentality of the
United States created pursuant to the Emergency Home Finance Act of 1970, as    
amended (the "FHLMC Act"). The obligations of Freddie Mac are obligations solely
of Freddie Mac and are not backed by the full faith and credit of the U.S.      
Government.                                                                     

Freddie Mac certificates represent a pro rata interest in a group of mortgage   
loans (a "Freddie Mac Certificate group") purchased by Freddie Mac. The mortgage
loans underlying the Freddie Mac Certificates consist of fixed rate or          
adjustable rate mortgage loans with original terms to maturity of between ten   
and thirty years, substantially all of which are secured by first liens on      
one-to-four-family residential properties or multi-family projects. Each        
mortgage loan must meet the applicable standards set forth in the FHLMC Act. A  
Freddie Mac Certificate group may include whole loans, participation interests  
in whole loans and undivided interests in whole loans and participations        
comprising another Freddie Mac Certificate group.                               

GINNIE MAE CERTIFICATES.  Ginnie Mae is a wholly-owned corporate        
instrumentality of the United States within the Department of Housing and Urban 
Development. The National Housing Act of 1934, as amended (the "Housing Act"),  
authorizes Ginnie Mae to guarantee the timely payment of the principal and      
interest on certificates that are based on and backed by a pool of FHA Loans, VA
Loans or by pools of other eligible mortgage loans. The Housing Act provides    
that the full faith and credit of the U.S. Government is pledged to the payment 
of all amounts that may be required to be paid under any guaranty. In order to  
meet its obligations under such guaranty, Ginnie Mae is authorized to borrow    
from the U.S. Treasury with no limitations as to amount.                        

Each Ginnie Mae certificate represents a pro rata interest in one or more of the
following types of mortgage loans: (i) fixed rate level payment mortgage loans; 
(ii) fixed rate graduated payment mortgage loans; (iii) fixed rate growing      
equity mortgage loans; (iv) fixed rate mortgage loans secured by manufactured   
(mobile) homes; (v) mortgage loans on multi-family residential properties under 
construction; (vi) mortgage loans on completed multi-family projects;           
(vii) fixed rate mortgage loans as to which escrowed funds are used to reduce   
the borrower's monthly payments during the early years of the mortgage loans    
("buydown" mortgage loans); (viii) mortgage loans that provide for adjustments  
in payments based on periodic changes in                                        
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interest rates or in other payment terms of the mortgage loans; and             
(ix) mortgage-backed serial notes. All of these mortgage loans will be FHA Loans
or VA loans and, except as otherwise specified above, will be fully-amortizing  
loans secured by first liens on one- to-four-family housing units.              

 COLLATERALIZED MORTGAGE OBLIGATIONS.  Collateralized mortgage obligations
("CMOs") are debt obligations or multiclass pass-through certificates issued by 
agencies or instrumentalities of the U.S. Government or by private originators  
or investors in mortgage loans. They are backed by mortgage-backed securities   
(discussed below) or whole loans (all such assets, the "Mortgage Assets") and   
are evidenced by a series of bonds or certificates issued in multiple classes.  
Each class of a CMO, often referred to as a "tranche," may be issued with a     
specific fixed or floating coupon rate and has a stated maturity or final       
scheduled distribution date. The principal and interest on the underlying       
Mortgage Assets may be allocated among the several classes of a series of CMOs  
in many ways. Interest is paid or accrues on CMOs on a monthly, quarterly or    
semi-annual basis.                                                              

CMOs may be issued by agencies or instrumentalities of the U.S. Government, or  
by private originators of, or investors in, mortgage loans, including savings   
and loan associations, mortgage bankers, commercial banks, investment banks and 
special purpose subsidiaries of the foregoing. CMOs that are issued by private  
sector entities and are backed by assets lacking a guarantee of an entity having
the credit status of a governmental agency or instrumentality are generally     
structured with one or more types of credit enhancement as described below. An  
issuer of CMOs may elect to be treated for federal income tax purposes as a Real
Estate Mortgage Investment Conduit (a "REMIC"). An issuer of CMOs issued after  
1991 must elect to be treated as a REMIC or it will be taxable as a corporation 
under rules regarding taxable mortgage pools.                                   

The principal and interest on the Mortgage Assets may be allocated among the    
several classes of a CMO in many ways. The general goal in allocating cash flows
on Mortgage Assets to the various classes of a CMO is to create certain tranches
on which the expected cash flows have a higher degree of predictability than do 
the underlying Mortgage Assets. As a general matter, the more predictable the   
cash flow is on a particular CMO tranche, the lower the anticipated yield on    
that tranche at the time of issue will be relative to prevailing market yields  
on Mortgage Assets. As part of the process of creating more predictable cash    
flows on certain tranches of a CMO, one or more tranches generally must be      
created that absorb most of the changes in the cash flows on the underlying     
Mortgage Assets. The yields on these tranches are generally higher than         
prevailing market yields on other mortgage related securities with similar      
average lives. Principal prepayments on the underlying Mortgage Assets may cause
the CMOs to be retired substantially earlier than their stated maturities or    
final scheduled distribution dates. Because of the uncertainty of the cash flows
on these tranches, the market prices and yields of these tranches are more      
volatile. In addition, some inverse floating rate obligation CMOs exhibit       
extreme sensitivity to changes in prepayments. As a result, the yield to        
maturity of these CMOs is sensitive not only to changes in interest rates, but  
also to changes in prepayment rates on the related underlying Mortgage Assets.  

Included within the category of CMOs are PAC Bonds. PAC Bonds are a type of CMO 
tranche or series designed to provide relatively predictable payments, provided 
that, among other things, the actual prepayment experience on the underlying    
Mortgage Assets falls within a predefined range. If the actual prepayment       
experience on the underlying Mortgage Assets is faster or slower than the       
predefined range or if deviations from other assumptions occur, payments on the 
PAC Bond may be earlier or later than predicted and the yield may rise or fall. 
The magnitude of the predefined range varies from one PAC Bond to another; a    
narrower range increases the risk that prepayments on the PAC Bond will be      
greater or smaller than predicted. Because of these features, PAC Bonds         
generally are less subject to the risk of prepayment than are other types of    
mortgage related securities.                                                    

 STRIPPED MORTGAGE-BACKED SECURITIES.  Stripped Mortgage-Backed Securities
("SMBSs") are multi-class mortgage securities issued by agencies or             
instrumentalities of the U.S. Government and private originators of, or         
investors in, mortgage loans. SMBSs are usually structured with two classes that
receive different proportions of the interest and principal distributions on a  
pool of Mortgage Assets. In some cases, one class will receive all of the       
interest ("interest-only" or "IO class"), while the other class will receive all
of the principal ("principal-only" or "PO class"). The yield to maturity on IO  
classes and PO classes is extremely sensitive to the rate of principal payments 
(including prepayments) on the related underlying Mortgage Assets, and          
significant changes in the rate of principal repayments will have a             
corresponding effect on the SMBSs' yield to maturity.                           

   CREDIT ENHANCEMENT.  Mortgage related securities are often backed by a pool
of assets representing the obligations of a number of parties. To lessen the    
effect of failure by obligors on underlying assets to make payments, these      
securities may have various types of credit support. Credit support falls into  
two primary categories: (i) liquidity protection, and (ii) protection against   
losses resulting from ultimate default by an obligor on the underlying assets.  
Liquidity protection generally refers to the provision of advances, typically by
the entity administering the pool of assets, to ensure that the pass-through of 
payments due on the underlying pool occurs in a timely fashion. Protection      
against losses resulting from ultimate default enhances the likelihood of       
ultimate payment of the obligations on at least a portion of the assets in the  
pool. Such protection may be provided through guarantees, insurance policies or 
letters of credit obtained by the issuer or sponsor from third parties (referred
to herein as "third party credit support"), through various means of structuring
the transaction or through a combination of such approaches.                    
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The ratings of mortgage related securities for which third party credit         
enhancement provides liquidity protection or protection against losses from     
default are generally dependent upon the continued creditworthiness of the      
provider of the credit enhancement. The ratings of such securities could decline
in the event of deterioration in the creditworthiness of the credit enhancement 
provider even in cases where the delinquency and loss experience on the         
underlying pool of assets is better than expected.                              

Examples of credit support arising out of the structure of the transaction      
include "senior-subordinated securities" (multiple class securities with one or 
more classes subordinate to other classes as to the payment of principal and    
interest thereon, with defaults on the underlying assets being borne first by   
the holders of the most subordinated class), creation of "reserve funds" (where 
cash or investments, sometimes funded from a portion of the payments on the     
underlying assets, are held in reserve against future losses) and               
"over-collateralization" (where the scheduled payments on, or the principal     
amount of, the underlying assets exceed those required to make payment of the   
securities and pay any servicing or other fees). The degree of credit support   
provided for each security is generally based on historical information with    
respect to the level of credit risk associated with the underlying assets.      
Delinquency or loss in excess of that which is anticipated could adversely      
affect the return on an investment in such a security.                          

REPURCHASE AGREEMENTS.  Repurchase Agreements are transactions in which a       
Portfolio purchases a security or basket of securities and simultaneously       
commits to resell that security or basket to the seller (a bank, broker or      
dealer) at a mutually agreed upon date and price. The resale price reflects the 
purchase price plus an agreed upon market rate of interest which is unrelated to
the coupon rate or date of maturity of the purchased security. Repurchase       
Agreements may be viewed as a fully collateralized loan of money by the         
Portfolio to the seller at a mutually agreed upon rate and price. The term of   
these agreements is usually from overnight to one week, and never exceeds one   
year. Repurchase Agreements with a term of over seven days are considered       
illiquid.                                                                       

In these transactions, the Portfolio receives as collateral securities that have
a market value at least equal to the purchase price (including accrued interest)
of the Repurchase Agreement, and this value is maintained during the term of the
agreement. These securities are held by the Portfolio's Custodian or an approved
third party for the benefit of the Portfolio until repurchased. Repurchase      
Agreements permit a Portfolio to remain fully invested while retaining overnight
flexibility to pursue investments of a longer-term nature. If the seller        
defaults and the collateral value declines, the Portfolio might incur a loss. If
bankruptcy proceedings are commenced with respect to the seller, the Portfolio's
realization upon the collateral may be delayed or limited.                      

Pursuant to an order issued by the SEC, the Portfolios may pool their daily     
uninvested cash balances in order to invest in Repurchase Agreements on a joint 
basis with other investment companies advised by MSDW Investment Management. By 
entering into Repurchase Agreements on a joint basis, the Portfolios expect to  
incur lower transaction costs and potentially obtain higher rates of interest on
such Repurchase Agreements. Each Portfolio's participation in the income from   
jointly purchased Repurchase Agreements will be based on that Portfolio's       
percentage share in the total Repurchase Agreement.                             

MUNICIPALS.  Municipal securities ("Municipals") are debt obligations issued by 
local, state and regional governments that provide interest income that is      
exempt from federal income taxes and in certain instances, from state and local 
taxes. Municipals include both municipal bonds (those securities with maturities
of five years or more) and municipal notes (those securities with maturities of 
less than five years). Municipal bonds are issued for a wide variety of reasons:
to construct public facilities, such as airports, highways, bridges, schools,   
hospitals, mass transportation, streets, water and sewer works; to obtain funds 
for operating expenses; to refund outstanding municipal obligations; and to loan
funds to various public institutions and facilities. Certain industrial         
development bonds are also considered municipal bonds if their interest is      
exempt from federal income taxes. Industrial development bonds are issued by or 
on behalf of public authorities to obtain funds for various privately-operated  
manufacturing facilities, housing, sports arenas, convention centers, airports, 
mass transportation systems and water, gas or sewer works. Industrial           
development bonds are ordinarily dependent on the credit quality of a private   
user, not the public issuer.                                                    

ASSET-BACKED SECURITIES.  Asset-Backed Securities ("Asset-Backeds") are         
securities collateralized by shorter-term loans such as automobile loans, home  
equity loans, equipment or computer leases or credit card receivables. The      
payments from the collateral are passed through to the security holder. The     
collateral underlying Asset-Backeds tends to have prepayment rates that usually 
do not vary with interest rates. In addition, the short-term nature of the loans
reduces the impact of any change in prepayment level. However, it is possible   
that prepayments (on automobile loans and other collateral) will alter the cash 
flow on Asset-Backeds and it is not possible to determine in advance the actual 
final maturity date or average life. Faster prepayment will shorten the average 
life and slower prepayment will lengthen it. However, it is possible to         
determine what the range of that movement could be and to calculate the effect  
that it will have on the price of the security. The maturity of Asset-Backeds   
will be based on the expected average life of the instrument. In selecting these
securities, MSDW Investment Management will look for those securities that offer
a higher yield to compensate for any variation in average maturity.             

PREFERRED STOCKS.  Preferred Stocks are securities that evidence ownership in a 
corporation and pay a fixed or variable stream of dividends. Preferred Stocks   
have a preference over Common Stocks in the event of the liquidation of an      
issuer and usually do not carry voting rights. Because Preferred Stocks         
represent an ownership interest in the issuer they have many of the             
characteristics of an Equity Security and are, therefore, included in both the  
definition of Fixed Income Security and Equity Security.                        
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CONVERTIBLE SECURITIES.  Convertible Securities are securities that may be      
exchanged under certain circumstances for a fixed number of shares of Common    
Stock or other Equity Securities. Convertible Securities generally represent a  
feature of some other type of security, such as a Fixed Income Security or      
Preferred Stock, so that, for example, a Convertible Fixed Income Security would
be a Fixed Income Security that is convertible into Common Stock. Prices of     
Convertible Fixed Income Securities frequently are more volatile than           
non-Convertible Fixed Income Securities. Convertible Securities may be viewed as
an investment in the current security or the security into which the Convertible
Security may be exchanged and, therefore, are included in both the definition of
Fixed Income Security or Equity Security.                                       

LOAN PARTICIPATIONS AND ASSIGNMENTS.  Loan Participations are interests in loans
or other direct debt instruments ("Loans") relating to amounts owed by a        
corporate, governmental or other borrower to another party. Loans may represent 
amounts owed to lenders or lending syndicates, to suppliers of goods or services
(trade claims or other receivables), or to other parties ("Lenders") and may be 
fixed rate or floating rate. Loans also may be arranged through private         
negotiations between an issuer of sovereign debt obligations and Lenders.       

A Portfolio's investments in Loans are expected in most instances to be in the  
form of a participation in Loans ("Participations") and assignments of all or a 
portion of Loans ("Assignments") from third parties. In the case of a           
Participation, a Portfolio will have the right to receive payments of principal,
interest and any fees to which it is entitled only from the Lender selling the  
Participation and only upon receipt by the Lender of the payments from the      
borrower. In the event of an insolvency of the Lender selling a Participation, a
Portfolio may be treated as a general creditor of the Lender and may not benefit
from any set-off between the Lender and the borrower. Certain Participations may
be structured in a manner designed to avoid purchasers of Participations being  
subject to the credit risk of the Lender with respect to the Participation. Even
under such a structure, in the event of a Lender's insolvency, the Lender's     
servicing of the Participation may be delayed and the assignability of the      
Participation may be impaired. A Portfolio will acquire Participations only if  
the Lender interpositioned between a Portfolio and the borrower is determined by
MSDW Investment Management to be creditworthy.                                  

When a Portfolio purchases Assignments from Lenders it will acquire direct      
rights against the borrower on the Loan. However, because Assignments are       
arranged through private negotiations between potential assignees and potential 
assignors, the rights and obligations acquired by a Portfolio as the purchaser  
of an Assignment may differ from, and be more limited than, those held by the   
assigning Lender. Because there is no liquid market for such securities, it is  
likely that such securities could be sold only to a limited number of           
institutional investors. The lack of a liquid secondary market may have an      
adverse impact on the value of such securities and a Portfolio's ability to     
dispose of particular Assignments or Participations when necessary to meet a    
Portfolio's liquidity needs or in response to a specific economic event, such as
a deterioration in the creditworthiness of the borrower. The lack of a liquid   
secondary market for Assignments and Participations also may make it more       
difficult for a Portfolio to assign a value to these securities for purposes of 
valuing a Portfolio's securities and calculating its net asset value.           

Loan Participations and Assignments involve a risk of loss in case of default or
insolvency of the borrower. In addition, they may offer less legal protection to
a Portfolio in the event of fraud or misrepresentation and may involve a risk of
insolvency of the Lender. Certain Loan Participations and Assignments may also  
include standby financing commitments that obligate the investing Portfolio to  
supply additional cash to the borrower on demand. Participations involving      
emerging market country issuers may relate to Loans as to which there has been  
or currently exists an event of default or other failure to make payment when   
due, and may represent amounts owed to Lenders that are themselves subject to   
political and economic risks, including the risk of currency devaluation,       
expropriation, or failure. Such Loan Participations and Assignments present     
additional risk of default or loss.                                             

TEMPORARY INVESTMENTS.  When MSDW Investment Management believes that changes in
economic, financial or political conditions make it advisable, each Portfolio   
may invest up to 100% of its assets in cash and certain short- and medium-term  
Fixed Income Securities for temporary defensive purposes. These Temporary       
Investments may consist of obligations of the U.S. or foreign governments, their
agencies or instrumentalities; Money Market Instruments; and instruments issued 
by international development agencies.                                          

ZERO COUPONS, PAY-IN-KIND SECURITIES OR DEFERRED PAYMENT SECURITIES.  Zero      
Coupon, Pay-In-Kind and Deferred Payment Securities are all types of Fixed      
Income Securities on which the holder does not receive periodic cash payments of
interest or principal. Generally, these securities are subject to greater price 
volatility and lesser liquidity in the event of adverse market conditions than  
comparably rated securities paying cash interest at regular intervals. Although 
a Portfolio will not receive cash periodic coupon payments on these securities, 
the Portfolio may be deemed to have received interest income, or "phantom       
income" during the life of the obligation. The Portfolio may have to pay taxes  
on this phantom income, although it has not received any cash payment.          

ZERO COUPONS.  Zero Coupons are fixed income securities that do not make
regular interest payments. Instead, Zero Coupons are sold at a discount from    
their face value. The difference between a Zero Coupon's issue or purchase price
and its face value represents the imputed interest an investor will earn if the 
obligation is held until maturity. Zero Coupons may offer investors the         
opportunity to earn a higher yield than that available on ordinary              
interest-paying obligations of similar credit quality and maturity.             
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PAY-IN-KIND SECURITIES.  Pay-In-Kind Securities are securities that have
interest payable by delivery of additional securities. Upon maturity, the holder
is entitled to receive the aggregate par value of the securities.               

DEFERRED PAYMENT SECURITIES.  Deferred Payment Securities are securities
that remain Zero Coupons until a predetermined date, at which time the stated   
coupon rate becomes effective and interest becomes payable at regular intervals.

FLOATERS.  Floaters are Fixed Income Securities with a rate of interest that    
varies with changes in specified market rates or indices, such as the prime     
rate, or at specified intervals. Certain Floaters may carry a demand feature    
that permits the holder to tender them back to the issuer of the underlying     
instrument, or to a third party, at par value prior to maturity. When the demand
feature of certain Floaters represents an obligation of a foreign entity, the   
demand feature will be subject to certain risks discussed under "Foreign        
Investment."                                                                    

INVERSE FLOATERS.  Inverse floating rate obligations ("Inverse Floaters") are   
Fixed Income Securities that have coupon rates that vary inversely at a multiple
of a designated floating rate, such as LIBOR (London Inter-Bank Offered Rate).  
Any rise in the reference rate of an Inverse Floater (as a consequence of an    
increase in interest rates) causes a drop in the coupon rate while any drop in  
the reference rate of an Inverse Floater causes an increase in the coupon rate. 
Inverse Floaters may exhibit substantially greater price volatility than fixed  
rate obligations having similar credit quality, redemption provisions and       
maturity, and Inverse Floater CMOs exhibit greater price volatility than the    
majority of other mortgage-related securities.                                  

EURODOLLAR AND YANKEE DOLLAR OBLIGATIONS.  The Portfolios may invest in         
Eurodollar and Yankee dollar obligations. Eurodollar bank obligations are       
dollar-denominated certificates of deposit and time deposits issued outside the 
U.S. capital markets by foreign branches of U.S. banks and by foreign banks.    
Yankee dollar bank obligations are dollar-denominated obligations issued in the 
U.S. capital markets by foreign banks. The Portfolios may consider Yankee dollar
obligations to be domestic securities for purposes of their investment policies.

Eurodollar and Yankee dollar obligations are subject to the same risks as       
domestic issues but Eurodollar (and to a limited extent, Yankee dollar)         
obligations are also subject to certain sovereign risks. One such risk is the   
possibility that a sovereign country might prevent capital, in the form of      
dollars, from flowing across its borders. Other risks include adverse political 
and economic developments; the extent and quality of government regulations of  
financial markets and institutions; the imposition of foreign withholding taxes;
and the expropriation or nationalization of foreign issuers.                    

FOREIGN INVESTMENT                                                              

Investing in foreign securities involves certain special considerations which   
are not typically associated with investing in the Equity Securities or Fixed   
Income Securities of U.S. issuers. Foreign issuers are not generally subject to 
uniform accounting, auditing and financial reporting standards and may have     
policies that are not comparable to those of domestic issuers. As a result,     
there may be less information available about foreign issuers than about        
domestic issuers. Securities of some foreign issuers are generally less liquid  
and more volatile than securities of comparable domestic issuers. There is      
generally less government supervision and regulation of stock exchanges, brokers
and listed issuers than in the United States. In addition, with respect to      
certain foreign countries, there is a possibility of expropriation or           
confiscatory taxation, political and social instability, or diplomatic          
developments which could affect U.S. investments in those countries. The costs  
of investing in foreign countries frequently is higher than the costs of        
investing in the United States. Although MSDW Investment Management endeavors to
achieve the most favorable execution costs in portfolio transactions, fixed     
commissions on many foreign stock exchanges are generally higher than negotiated
commissions on U.S. exchanges.                                                  

Investments in securities of foreign issuers generally are denominated in       
foreign currencies. Accordingly, the value of a Portfolio's assets, as measured 
in U.S. dollars may be affected favorably or unfavorably by changes in currency 
exchange rates and in exchange control regulations. A Portfolio may incur costs 
in connection with conversions between various currencies.                      

Certain foreign governments levy withholding or other taxes on dividend and     
interest income. Although in some countries a portion of these taxes are        
recoverable, the non-recovered portion of foreign withholding taxes will reduce 
the income received from investments in such countries. The Portfolios may be   
able to claim a credit for U.S. tax purposes with respect to any such foreign   
taxes.                                                                          

MSDW Investment Management considers an issuer to be from a particular country  
if (i) its principal securities trading market is in that country; (ii) alone or
on a consolidated basis it derives 50% or more of its annual revenue from either
goods produced, sales made or services performed in that country; or (iii) it is
organized under the laws of, or has a principal office in that country. By      
applying these tests, it is possible that a particular company could be deemed  
to be from more than one country.                                               

FOREIGN EQUITY SECURITIES.  Foreign Equity Securities are Equity Securities of  
an issuer in a foreign country.                                                 

FOREIGN GOVERNMENT FIXED INCOME SECURITIES.  Foreign Government Fixed Income    
Securities are Fixed Income Securities issued by a foreign government or        
government-related issuer in a foreign country.                                 

FOREIGN CORPORATE FIXED INCOME SECURITIES.  Foreign Corporate Fixed Income      
Securities are Fixed Income Securities issued by a private issuer in a foreign  
country.                                                                        
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EMERGING MARKET COUNTRY SECURITIES.  An emerging market country security is one 
issued by a foreign government or private issuer that has one or more of the    
following characteristics: (i) its principal securities trading market is in an 
emerging market country, (ii) alone or on a consolidated basis it derives 50% or
more of its annual revenue from either goods produced, sales made or services   
performed in emerging markets, or (iii) it is organized under the laws of, or   
has a principal office in, an emerging market country.                          

Emerging market describes any country which is generally considered to be an    
emerging or developing country by major organizations in the international      
financial community, such as the International Bank for Reconstruction and      
Development (more commonly known as the World Bank) and the International       
Finance Corporation. Emerging markets can include every nation in the world     
except the United States, Canada, Japan, Australia, New Zealand and most nations
located in Western Europe.                                                      

The economies of individual emerging market countries may differ favorably or   
unfavorably from the U.S. economy in such respects as growth of gross domestic  
product, rate of inflation, currency depreciation, capital reinvestment,        
resource self-sufficiency and balance of payments position. Further, the        
economies of developing countries generally are heavily dependent upon          
international trade and, accordingly, have been, and may continue to be,        
adversely affected by trade barriers, exchange controls, managed adjustments in 
relative currency values and other protectionist measures. These economies also 
have been, and may continue to be, adversely affected by economic conditions in 
the countries with which they trade.                                            

Prior governmental approval for foreign investments may be required under       
certain circumstances in some emerging market countries, and the extent of      
foreign investment in certain fixed income securities and domestic companies may
be subject to limitation in other emerging market countries. Foreign ownership  
limitations also may be imposed by the charters of individual companies in      
emerging market countries to prevent, among other concerns, violation of foreign
investment limitations. Repatriation of investment income, capital and the      
proceeds of sales by foreign investors may require governmental registration    
and/or approval in some emerging countries. A Portfolio could be adversely      
affected by delays in, or a refusal to grant, any required governmental         
registration of approval for such repatriation. Any investment subject to such  
repatriation controls will be considered illiquid if it appears reasonably      
likely that this process will take more than seven days.                        

Investing in emerging market countries may entail purchasing securities issued  
by or on behalf of entities that are insolvent, bankrupt, in default or         
otherwise engaged in an attempt to reorganize or reschedule their obligations,  
and in entities that have little or no proven credit rating or credit history.  
In any such case, the issuer's poor or deteriorating financial condition may    
increase the likelihood that the investing Portfolio will experience losses or  
diminution in available gains due to bankruptcy, insolvency or fraud. Emerging  
market countries also pose the risk of nationalization, expropriation or        
confiscatory taxation, political changes, government regulation, social         
instability or diplomatic developments (including war) that could affect        
adversely the economies of such countries or the value of a Portfolio's         
investments in those countries. In addition, it may be difficult to obtain and  
enforce a judgment in a court outside the United States.                        

Portfolios that invest in emerging markets may also be exposed to an extra      
degree of custodial and/or market risk, especially where the securities         
purchased are not traded on an official exchange or where ownership records     
regarding the securities are maintained by an unregulated entity (or even the   
issuer itself).                                                                 

RUSSIAN EQUITY SECURITIES.  The registration, clearing and settlement of        
securities transactions involving Russian issuers are subject to significant    
risks not normally associated with securities transactions in the United States 
and other more developed markets. Ownership of Equity Securities in Russian     
companies is evidenced by entries in a company's share register (except where   
shares are held through depositories that meet the requirements of the 1940 Act)
and the issuance of extracts from the register or, in certain limited cases, by 
formal share certificates. However, Russian share registers are frequently      
unreliable and a Portfolio could possibly lose its registration through         
oversight, negligence or fraud. Moreover, Russia lacks a centralized registry to
record securities transactions and registrars located throughout Russia or the  
companies themselves maintain share registers. Registrars are under no          
obligation to provide extracts to potential purchasers in a timely manner or at 
all and are not necessarily subject to effective state supervision. In addition,
while registrars are liable under law for losses resulting from their errors, it
may be difficult for a Portfolio to enforce any rights it may have against the  
registrar or issuer of the securities in the event of loss of share             
registration. Although Russian companies with more than 1,000 shareholders are  
required by Russian law to employ an independent registrar, in practice, such   
companies have not always followed this law. Because of this lack of            
independence of registrars, management of a Russian company may be able to exert
considerable influence over who can purchase and sell the company's shares by   
illegally instructing the registrar to refuse to record transactions on the     
share register. Furthermore, these practices may prevent a Portfolio from       
investing in the securities of certain Russian companies deemed suitable by the 
Adviser and could cause a delay in the sale of Russian Securities by the        
Portfolio if the company deems a purchaser unsuitable, which may expose the     
Portfolio to potential loss on its investment.                                  

In light of the risks described above, the Board Directors of the Fund has      
approved certain procedures concerning the Fund's investments in Russian        
Securities. Among these procedures is a requirement that a Portfolio will not   
invest in the Equity Securities of a Russian company unless that issuer's       
registrar has entered into a contract with the Fund's sub-custodian containing  
certain protective conditions, including, among other things, the               
sub-custodian's right to conduct regular share confirmations on behalf of the   
Portfolio. This requirement will likely have the effect of precluding           
investments in certain Russian companies that a Portfolio would otherwise make. 
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FOREIGN CURRENCY TRANSACTIONS.  The U.S. dollar value of the assets of the      
Portfolios, to the extent they invest in securities denominated in foreign      
currencies, may be affected favorably or unfavorably by changes in foreign      
currency exchange rates and exchange control regulations, and the Portfolios may
incur costs in connection with conversions between various currencies. The      
Portfolios may conduct their foreign currency exchange transactions on a spot   
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange 
market. The Portfolios also may manage their foreign currency transactions by   
entering into foreign currency forward contracts to purchase or sell foreign    
currencies or by using other instruments and techniques described under         
"Derivatives" below.                                                            

Under normal circumstances, consideration of the prospect for changes in the    
values of currency will be incorporated into the long-term investment decisions 
made with regard to overall diversification strategies. However, MSDW Investment
Management believes that it is important to have the flexibility to use such    
derivative products when it determines that it is in the best interests of a    
Portfolio. It may not be practicable to hedge foreign currency risk in all      
markets, particularly emerging markets.                                         

FOREIGN CURRENCY WARRANTS.  Portfolios may invest in foreign currency   
warrants, which entitle the holder to receive from the issuer an amount of cash 
(generally, for warrants issued in the U.S., in U.S. dollars) which is          
calculated pursuant to a predetermined formula and based on the exchange rate   
between a specified foreign currency and the U.S. dollar as of the exercise date
of the warrant. Foreign currency warrants generally are exercisable upon their  
issuance and expire as of a specified date and time.                            

Foreign currency warrants have been issued in connection with U.S.              
dollar-denominated debt offerings by major corporate issuers in an attempt to   
reduce the foreign currency exchange risk which, from the point of view of      
prospective purchasers of the securities, is inherent in the international      
fixed-income marketplace. Foreign currency warrants may attempt to reduce the   
foreign exchange risk assumed by purchasers of a security by, for example,      
providing for a supplemental payment in the event that the U.S. dollar          
depreciates against the value of a major foreign currency such as the Japanese  
Yen or German Deutschmark. The formula used to determine the amount payable upon
exercise of a foreign currency warrant may make the warrant worthless unless the
applicable foreign currency exchange rate moves in a particular direction (E.G.,
unless the U.S. dollar appreciates or depreciates against the particular foreign
currency to which the warrant is linked or indexed). Foreign currency warrants  
are severable from the debt obligations with which they may be offered, and may 
be listed on exchanges.                                                         

Foreign currency warrants may be exercisable only in certain minimum amounts,   
and an investor wishing to exercise warrants who possesses less than the minimum
number required for exercise may be required either to sell the warrants or to  
purchase additional warrants, thereby incurring additional transaction costs. In
the case of any exercise of warrants, there may be a delay between the time a   
holder of warrants gives instructions to exercise and the time the exchange rate
relating to exercise is determined, during which time the exchange rate could   
change significantly, thereby affecting both the market and cash settlement     
values of the warrants being exercised. The expiration date of the warrants may 
be accelerated if the warrants should be delisted from an exchange or if their  
trading should be suspended permanently, which would result in the loss of any  
remaining "time value" of the warrants (I.E., the difference between the current
market value and the exercise value of the warrants), and, in the case where the
warrants were "out-of-the-money," in a total loss of the purchase price of the  
warrants.                                                                       

Foreign currency warrants are generally unsecured obligations of their issuers  
and are not standardized foreign currency options issued by the Options Clearing
Corporation ("OCC"). Unlike foreign currency options issued by the OCC, the     
terms of foreign exchange warrants generally will not be amended in the event of
governmental or regulatory actions affecting exchange rates or in the event of  
the imposition of other regulatory controls affecting the international currency
markets. The initial public offering price of foreign currency warrants is      
generally considerably in excess of the price that a commercial user of foreign 
currencies might pay in the interbank market for a comparable option involving  
significantly larger amounts of foreign currencies. Foreign currency warrants   
are subject to complex political or economic factors.                           

  PRINCIPAL EXCHANGE RATE LINKED SECURITIES.  Principal exchange rate linked
securities are debt obligations the principal on which is payable at maturity in
an amount that may vary based on the exchange rate between the U.S. dollar and a
particular foreign currency at or about that time. The return on "standard"     
principal exchange rate linked securities is enhanced if the foreign currency to
which the security is linked appreciates against the U.S. dollar, and is        
adversely affected by increases in the foreign exchange value of the            
U.S. dollar; "reverse" principal exchange rate linked securities are like the   
"standard" securities, except that their return is enhanced by increases in the 
value of the U.S. dollar and adversely impacted by increases in the value of    
foreign currency. Interest payments on the securities are generally made in     
U.S. dollars at rates that reflect the degree of foreign currency risk assumed  
or given up by the purchaser of the notes (I.E., at relatively higher interest  
rates if the purchaser has assumed some foreign currency risk).                 

BRADY BONDS.  Brady Bonds are Fixed Income Securities that are created through  
the exchange of existing commercial bank loans to foreign entities for new      
obligations in connection with debt restructuring under a plan introduced by    
Nicholas F. Brady when he was the U.S. Secretary of the Treasury. They may be   
collateralized or uncollateralized and issued in various currencies (although   
most are U.S. dollar-denominated) and they are actively traded in the           
over-the-counter secondary market. The Portfolios will invest in Brady Bonds    
only if they are consistent with the Portfolio's quality specifications.        
However, Brady Bonds should be viewed as speculative in light of the history of 
defaults with respect to commercial bank loans by public and private entities of
countries issuing Brady Bonds.                                                  
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INVESTMENT FUNDS.  Some emerging market countries have laws and regulations that
currently preclude direct investment or make it undesirable to invest directly  
in the securities of their companies. However, indirect investment in the       
securities of companies listed and traded on the stock exchanges in these       
countries is permitted by certain emerging market countries through Investment  
Funds that have been specifically authorized. A Portfolio may invest in these   
Investment Funds subject to the provisions of the 1940 Act, as applicable, and  
other applicable laws.                                                          

EUROPEAN CURRENCY TRANSITION.  On January 1, 1999, the European Monetary Union  
(EMU) implemented a new currency unit, the Euro, which is expected to reshape   
financial markets, banking systems and monetary policies in Europe and other    
parts of the world. Implementation of this plan will mean that financial        
transactions and market information, including share quotations and company     
accounts, in participating countries will be denominated in Euros. Monetary     
policy for participating countries will be uniformly managed by a new central   
bank, the European Central Bank (ECB).                                          

The transition to the Euro may change the economic environment and behavior of  
investors, particularly in European markets. For example, the process of        
implementing the Euro may adversely affect financial markets world-wide and may 
result in changes in the relative strength and value of the U.S. dollar or other
major currencies, as well as possible adverse tax consequences. The transition  
to the Euro is likely to have a significant impact on fiscal and monetary policy
in the participating countries and may produce unpredictable effects on trade   
and commerce generally. These resulting uncertainties could create increased    
volatility in financial markets world-wide.                                     

OTHER SECURITIES                                                                

LOANS OF PORTFOLIO SECURITIES.  Each Portfolio may lend its investment          
securities to qualified institutional investors that need to borrow securities  
in order to complete certain transactions, such as covering short sales,        
avoiding failures to deliver securities or completing arbitrage operations. By  
lending its investment securities, a Portfolio attempts to increase its net     
investment income through the receipt of interest on the loan. Any gain or loss 
in the market price of the securities loaned that might occur during the term of
the loan would be for the account of the Portfolio. Each Portfolio may lend its 
investment securities to qualified brokers, dealers, domestic and foreign banks 
or other financial institutions, so long as the terms, structure and the        
aggregate amount of such loans are not inconsistent with the 1940 Act or the    
Rules and Regulations or interpretations of the SEC thereunder, which currently 
require that (i) the borrower pledge and maintain with the Portfolio collateral 
consisting of liquid, unencumbered assets having a value at all times not less  
than 100% of the value of the securities loaned; (ii) the borrower add to such  
collateral whenever the price of the securities loaned rises (i.e., the borrower
"marks to market" on a daily basis); (iii) the loan be made subject to          
termination by the Portfolio at any time; and (iv) the Portfolio receive        
reasonable interest on the loan (which may include the Portfolio investing any  
cash collateral in interest bearing short-term investments), any distributions  
on the loaned securities and any increase in their market value. There may be   
risks of delay in recovery of the securities or even loss of rights in the      
collateral should the borrower of the securities fail financially. However,     
loans will be made only to borrowers deemed by MSDW Investment Management to be 
of good standing and when, in the judgment of MSDW Investment Management, the   
consideration which can be earned currently from such securities loans justifies
the attendant risk. All relevant facts and circumstances, including the         
creditworthiness of the broker, dealer or institution, will be considered in    
making decisions with respect to the lending of securities, subject to review by
the Board of Directors.                                                         

At the present time, the staff of the SEC does not object if an investment      
company pays reasonable negotiated fees in connection with loaned securities, so
long as such fees are set forth in a written contract and approved by the       
investment company's Board of Directors. In addition, voting rights may pass    
with the loaned securities, but if a material event will occur affecting an     
investment on loan, the loan must be called and the securities voted.           

NON-PUBLICLY TRADED SECURITIES, PRIVATE PLACEMENTS AND RESTRICTED               
SECURITIES.  The Portfolios may invest in securities that are neither listed on 
a stock exchange nor traded over-the-counter, including privately placed and    
restricted securities. Such unlisted securities may involve a higher degree of  
business and financial risk that can result in substantial losses. As a result  
of the absence of a public trading market for these securities, they may be less
liquid than publicly traded securities. Although these securities may be resold 
in privately negotiated transactions, the prices realized from these sales could
be less that those originally paid by the Portfolio or less than what may be    
considered the fair value of such securities. Furthermore, companies whose      
securities are not publicly traded may not be subject to the disclosure and     
other investor protection requirements which might be applicable if their       
securities were publicly traded. If such securities are required to be          
registered under the securities laws of one or more jurisdictions before being  
sold, the Portfolio may be required to bear the expenses of registration.       

As a general matter, a Portfolio may not invest more than 15% (10% for the Money
Market and Municipal Money Market Portfolios) of its net assets in illiquid     
securities, such as securities for which there is not a readily available       
secondary market or securities that are restricted from sale to the public      
without registration. However, certain Restricted Securities can be offered and 
sold to qualified institutional buyers under Rule 144A under the Securities Act 
of 1933 (the "1993 Act") ("Rule 144A Securities") and may be deemed to be liquid
under guidelines adopted by the Fund's Board of Directors. The Portfolios may   
invest without limit in liquid Rule 144A Securities. Rule 144A Securities may   
become illiquid if qualified institutional buyers are not interested in         
acquiring the securities.                                                       

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES.  When-Issued and Delayed Delivery  
Securities are securities purchased with payment and delivery taking place in   
the future in order to secure what is considered to be an advantageous yield or 
price at the                                                                    

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time of the transaction. Delivery of and payment for these securities may take  
as long as a month or more after the date of the purchase commitment, but will  
take place no more than 120 days after the trade date. The payment obligation   
and the interest rates that will be received are each fixed at the time a       
Portfolio enters into the commitment and no interest accrues to the Portfolio   
until settlement. Thus, it is possible that the market value at the time of     
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. When a Portfolio agrees to purchase When-Issued  
or Delayed Delivery Securities, it will earmark or segregate cash or liquid     
securities in an amount equal to the Portfolio's commitment to purchase these   
securities.                                                                     

BORROWING FOR INVESTMENT PURPOSES.  Borrowing for investment purposes creates   
leverage which is a speculative characteristic. Portfolios authorized to borrow 
will do so only when MSDW Investment Management believes that borrowing will    
benefit the Portfolio after taking into account considerations such as the costs
of borrowing and the likely investment returns on securities purchased with     
borrowed funds. Borrowing by a Portfolio will create the opportunity for        
increased net income but, at the same time, will involve special risk           
considerations. Leverage that results from borrowing will magnify declines as   
well as increases in a Portfolio's net asset value per share and net yield. Each
Portfolio that engages in borrowing expects that all of its borrowing will be   
made on a secured basis. The Portfolio will either segregate the assets securing
the borrowing for the benefit of the lenders or arrangements will be made with a
suitable sub-custodian. If assets used to secure the borrowing decrease in      
value, a Portfolio may be required to pledge additional collateral to the lender
in the form of cash or securities to avoid liquidation of those assets.         

TEMPORARY BORROWING.  Each Portfolio is permitted to borrow from banks in an    
amount up to 10% (33 1/3% for the High Yield Portfolio) of its total assets for 
extraordinary or emergency purposes, except that the Emerging Markets Debt      
Portfolio may borrow up to 33 1/3% of its total assets from banks and other     
entities. For example, the Portfolios may borrow for temporary defensive        
purposes or to meet shareholder redemptions when MSDW Investment Management     
believes that it would not be in the best interests of a Portfolio to liquidate 
portfolio holdings. A Portfolio will not purchase additional securities while   
temporary borrowings exceed 5% of its total assets.                             

The Board of Directors of the Fund has approved procedures whereby the          
Portfolios together with other investment companies advised by MSDW Investment  
Management or its affiliates may enter into a joint line of credit arrangement  
with a bank. Each Portfolio would be liable only for its own temporary          
borrowings under the joint line of credit arrangements.                         

REVERSE REPURCHASE AGREEMENTS.  Under a Reverse Repurchase Agreement, a         
Portfolio sells a security and promises to repurchase that security at an agreed
upon future date and price. The price paid to repurchase the security reflects  
interest accrued during the term of the agreement. The Portfolio will earmark   
cash or liquid assets or establish a segregated account holding cash and other  
liquid assets in an amount not less than the purchase obligations of the        
agreement. Reverse Repurchase Agreements may be viewed as a speculative form of 
borrowing called leveraging. A Portfolio may invest in Reverse Repurchase       
Agreements if (i) interest earned from leveraging exceeds the interest expense  
of the original reverse repurchase transaction and (ii) proceeds from the       
transaction are not invested for longer than the term of the Reverse Repurchase 
Agreement.                                                                      

SHORT SALES.  A short sale is a transaction in which the Portfolio sells        
securities it owns or has the right to acquire at no added cost (i.e., "against 
the box") or does not own (but has borrowed) in anticipation of a decline in the
market price of the securities. To deliver the securities to the buyer, the     
Portfolio arranges through a broker to borrow the securities and, in so doing,  
the Portfolio becomes obligated to replace the securities borrowed at their     
market price at the time of replacement. When selling short, the Portfolio      
intends to replace the securities at a lower price and therefore, profit from   
the difference between the cost to replace the securities and the proceeds      
received from the sale of the securities. When the Portfolio makes a short sale,
the proceeds it receives from the sale will be held on behalf of a broker until 
the Portfolio replaces the borrowed securities. The Portfolio may have to pay a 
premium to borrow the securities and must pay any dividends or interest payable 
on the securities until they are replaced.                                      

The Portfolio's obligation to replace the securities borrowed in connection with
a short sale will be secured by collateral deposited with the broker that       
consists of cash or other liquid securities. In addition, the Portfolio will    
earmark cash or liquid assets or place in a segregated account an amount of cash
or other liquid assets equal to the difference, if any, between (i) the market  
value of the securities sold at the time they were sold short, and (ii) any cash
or other liquid securities deposited as collateral with the broker in connection
with the short sale. Short sales by the Portfolio involve certain risk and      
special considerations. If MSDW Investment Management incorrectly predicts that 
the price of the borrowed security will decline, the Portfolio will have to     
replace the securities with securities with a greater value than the amount     
received from the sale. As a result, losses from short sales differ from losses 
that could be incurred from a purchase of a security, because losses from short 
sales may be unlimited, whereas losses from purchases can equal only the total  
amount invested.                                                                

STRUCTURED INVESTMENTS.  Structured Investments are securities that are         
convertible into, or the value of which is based upon the value of, other fixed 
income or equity securities or indices upon certain terms and conditions. The   
amount a Portfolio receives when it sells a Structured Investment or at maturity
of a Structured Investment is not fixed, but is based on the price of the       
underlying security or index. Particular Structured Investments may be designed 
so that they move in conjunction with or differently from their underlying      
security or index in terms of price and volatility. It is impossible to predict 
whether the underlying index or price of the underlying security will rise or   
fall, but prices of the underlying indices and securities (and, therefore, the  
prices of Structured Investments) will be influenced by the same types of       
political and economic events that affect particular issuers of fixed income and
equity securities and capital markets generally. Structured Investments also may
trade                                                                           
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differently from their underlying securities. Structured Investments generally  
trade on the secondary market, which is fairly developed and liquid. However,   
the market for such securities may be shallow compared to the market for the    
underlying securities or the underlying index. Accordingly, periods of high     
market volatility may affect the liquidity of Structured Investments, making    
high volume trades possible only with discounting.                              

Structured Investments are a relatively new innovation and may be designed to   
have various combinations of equity and fixed income characteristics. The       
following sections describe four of the more common types of Structured         
Investments. The Portfolios may invest in other Structured Investments,         
including those that may be developed in the future, to the extent that the     
Structured Investments are otherwise consistent with a Portfolio's investment   
objective and policies.                                                         

  PERCS.  Preferred Equity Redemption Cumulative Stock ("PERCS") technically
is preferred stock with some characteristics of common stock. PERCS are         
mandatorily convertible into common stock after a period of time, usually three 
years, during which the investors' capital gains are capped, usually at 30%.    
Commonly, PERCS may be redeemed by the issuer at any time or if the issuer's    
common stock is trading at a specified price level or better. The redemption    
price starts at the beginning of the PERCS duration period at a price that is   
above the cap by the amount of the extra dividends the PERCS holder is entitled 
to receive relative to the common stock over the duration of the PERCS and      
declines to the cap price shortly before maturity of the PERCS. In exchange for 
having the cap on capital gains and giving the issuer the option to redeem the  
PERCS at any time or at the specified common stock price level, a Portfolio may 
be compensated with a substantially higher dividend yield than that on the      
underlying common stock. Investors that seek current income find PERCS          
attractive because PERCS provide a high dividend income than that paid with     
respect to a company's common stock.                                            

ELKS.  Equity-Linked Securities ("ELKS") differ from ordinary debt      
securities, in that the principal amount received at maturity is not fixed but  
is based on the price of the issuer's common stock. ELKS are debt securities    
commonly issued in fully registered form for a term of three years under an     
indenture trust. At maturity, the holder of ELKS will be entitled to receive a  
principal amount equal to the lesser of a cap amount, commonly in the range of  
30% to 55% greater than the current price of the issuer's common stock, or the  
average closing price per share of the issuer's common stock, subject to        
adjustment as a result of certain dilution events, for the 10 trading days      
immediately prior to maturity. Unlike PERCS, ELKS are commonly not subject to   
redemption prior to maturity. ELKS usually bear interest during the three-year  
term at a substantially higher rate than the dividend yield on the underlying   
common stock. In exchange for having the cap on the return that might have been 
received as capital gains on the underlying common stock, a Portfolio may be    
compensated with the higher yield, contingent on how well the underlying common 
stock does. Investors that seek current income, find ELKS attractive because    
ELKS provide a higher dividend income than that paid with respect to a company's
common stock. The return on ELKS depends on the creditworthiness of the issuer  
of the securities, which may be the issuer of the underlying securities or a    
third party investment banker or other lender. The creditworthiness of such     
third party issuer of ELKS may, and often does, exceed the creditworthiness of  
the issuer of the underlying securities. The advantage of using ELKS over       
traditional equity and debt securities is that the former are income producing  
vehicles that may provide a higher income than the dividend income on the       
underlying equity securities while allowing some participation in the capital   
appreciation of the underlying equity securities. Another advantage of using    
ELKS is that they may be used for hedging to reduce the risk of investing in the
generally more volatile underlying equity securities.                           

LYONs.  Liquid Yield Option Notes ("LYONs") differ from ordinary debt   
securities, in that the amount received prior to maturity is not fixed but is   
based on the price of the issuer's common stock. LYONs are zero-coupon notes    
that sell at a large discount from face value. For an investment in LYONs, the  
Portfolio will not receive any interest payments until the notes mature,        
typically in 15 to 20 years, when the notes are redeemed at face, or par, value.
The yield on LYONs, typically, is lower-than-market rate for debt securities of 
the same maturity, due in part to the fact that the LYONs are convertible into  
common stock of the issuer at any time at the option of the holder of the LYONs.
Commonly, the LYONs are redeemable by the issuer at any time after an initial   
period or if the issuer's common stock is trading at a specified price level or 
better or, at the option of the holder, upon certain fixed dates. The redemption
price typically is the purchase price of the LYONs plus accrued original issue  
discount to the date of redemption, which amounts to the lower-than-market      
yield. A Portfolio will receive only the lower-than-market yield unless the     
underlying common stock increases in value at a substantial rate. LYONs are     
attractive to investors when it appears that they will increase in value due to 
the rise in value of the underlying common stock.                               

   STRUCTURED NOTES.  Structured Notes are derivative securities for which the
amount of principal repayment and/or interest payments is based upon the        
movement of one or more "factors." These factors include, but are not limited   
to, currency exchange rates, interest rates (such as the prime lending rate and 
LIBOR) and stock indices, such as the S&P 500. In some cases, the impact of the 
movements of these factors may increase or decrease through the use of          
multipliers or deflators. Structured Notes may be designed to have particular   
quality and maturity characteristics and may vary from money market quality to  
below investment grade. Depending on the factor used and the use of multipliers 
or deflators, however, changes in interest rates and movement of the factor may 
cause significant price fluctuations or may cause particular Structured Notes to
become illiquid. The Portfolios will use Structured Notes to tailor their       
investments to the specific risks and returns the Adviser wishes to accept while
avoiding or reducing certain other risks.                                       
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DERIVATIVES                                                                     

The Portfolios are permitted to utilize various exchange-traded and             
over-the-counter derivative instruments and derivative securities, both for     
hedging and non-hedging purposes. Permitted derivative products include, but are
not limited to futures contracts ("futures"); forward contracts ("forwards");   
options; swaps, caps, collars and floors; structured notes; and other derivative
products yet to be developed, so long as these new products are used in a manner
consistent with the objectives of the Portfolios. These derivative products may 
be based on a wide variety of underlying rates, indices, instruments, securities
and other products, such as interest rates, foreign currencies, foreign and     
domestic fixed income and equity securities, groups or "baskets" of securities  
and securities indices (for each derivative product, the "underlying"). Each    
Portfolio will limit its use of foreign currency forward contracts and other    
derivative products for non-hedging purposes to 33 1/3% of its total assets,    
measured by the aggregate notional amount of outstanding derivative products.   

The term hedging, generally, means that a Portfolio is using a derivative       
product as a way to reduce or limit risk. For example, a Portfolio may hedge in 
order to limit the effects of a change in the value of a particular foreign     
currency versus the U.S. dollar or a Portfolio could use a portion of its cash  
to buy securities futures in order to hedge the risk of not being fully         
invested. The Portfolios also may use certain complex hedging techniques. For   
example, a Portfolio may use a type of hedge known as a cross hedge or a proxy  
hedge, where the Portfolio hedges the risk associated with one underlying by    
purchasing or selling a derivative product with an underlying that is different.
There is no limit on the use of foreign currency forward contracts or other     
derivative products for hedging purposes.                                       

The Portfolios may use derivative products under a number of different          
circumstances to further their investment objectives. For example, a Portfolio  
may purchase derivatives to gain exposure to a market or currency quickly in    
response to changes in the Portfolio's investment strategy, upon the inflow of  
investable cash or when the derivative provides greater liquidity than the      
underlying market. A Portfolio may also use derivatives when it is restricted   
from directly owning the "underlying" or when derivatives provide a pricing     
advantage or lower transaction costs. The Portfolios also may purchase          
combinations of derivatives in order to gain exposure to an investment in lieu  
of actually purchasing such investment. Derivatives may also be used by a       
Portfolio for hedging or risk management purposes and in other circumstances    
when MSDW Investment Management believes it advantageous to do so consistent    
with the Portfolio's investment objectives and policies. Except under           
circumstances where a segregated account is not required under the 1940 Act or  
the rules adopted thereunder, the Portfolio will earmark cash or liquid assets  
or place them in a segregated account in an amount necessary to cover the       
Portfolio's obligations under such derivative transactions.                     

The use of derivative products is a highly specialized activity which involves  
investment techniques and risks different from those associated with ordinary   
portfolio securities transactions. If MSDW Investment Management is incorrect in
forecasts of market values, interest rates, and currency exchange rates, the    
investment performance of the Portfolios will be less favorable than it would   
have been if these investment techniques had not been used.                     

Some of the derivative products in which the Portfolios may invest and some of  
the risks related thereto are described in further detail below.                

FOREIGN CURRENCY FORWARD CONTRACTS.  A foreign currency forward contract        
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon 
by the parties, at a price set at the time of the contract. These contracts are 
traded in the interbank market conducted directly between currency traders      
(usually large commercial banks) and their customers. A forward contract        
generally has no deposit requirement, and no commissions are charged at any     
stage for such trades. The Portfolios may enter into foreign currency forward   
contracts in many circumstances. For example, when a Portfolio enters into a    
contract for the purchase or sale of a security denominated in a foreign        
currency, or when a Portfolio anticipates the receipt in a foreign currency of  
dividends or interest payments on a security which it holds, the Portfolio may  
desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar    
equivalent of such dividend or interest payment, as the case may be. By entering
into a forward contract for a fixed amount of dollars, for the purchase or sale 
of the amount of foreign currency involved in the underlying transactions, the  
Portfolio will be able to protect itself against a possible loss resulting from 
an adverse change in the relationship between the U.S. dollar and the subject   
foreign currency during the period between the date on which the security is    
purchased or sold, or on which the dividend or interest payment is declared, and
the date on which such payments are made or received. For example, when any of  
the Portfolios anticipates that the currency of a particular foreign country may
suffer a decline against the U.S. dollar, it may enter into a forward contract  
for a fixed amount of dollars to sell the amount of foreign currency            
approximating the value of some or all of such Portfolio's securities           
denominated in such foreign currency. Similarly, when any of the Portfolios     
anticipates that the U.S. dollar may suffer a decline against a foreign currency
it may enter into a foreign currency forward contract to buy that currency for a
fixed amount. However, it may not be practicable to hedge currency in all       
markets, particularly emerging markets.                                         

The precise matching of the forward contract amounts and the value of the       
securities involved generally will not be possible since the future value of    
securities in foreign currencies will change as a consequence of market         
movements in the value of these securities between the date on which the forward
contract is entered into and the date it matures. The projection of short-term  
currency market movement is extremely difficult, and the successful execution of
a short-term hedging strategy is highly uncertain.                              
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Under normal circumstances, consideration of the prospect for changes in the    
values of currency will be incorporated into the long-term investment decisions 
made with regard to overall diversification strategies. However, MSDW Investment
Management believes that it is important to have the flexibility to enter into  
such forward contracts when it determines that it is in the best interests of a 
Portfolio. Except under circumstances where a segregated account is not required
under the 1940 Act or the rules adopted thereunder, the Portfolio will earmark  
cash or liquid assets or place them into a segregated account in an amount      
necessary to cover the Portfolio's obligations under such foreign currency      
forward contracts.                                                              

The Portfolios generally will not enter into a forward contract with a term of  
greater than one year. At the maturity of a forward contract, a Portfolio may   
either sell the portfolio security and make delivery of the foreign currency, or
it may retain the security and terminate its contractual obligation to deliver  
the foreign currency by purchasing an "offsetting" contract with the same       
currency trader obligating it to purchase, on the same maturity date, the same  
amount of the foreign currency.                                                 

It is impossible to forecast with absolute precision the market value of a      
particular portfolio security at the expiration of the contract. Accordingly, it
may be necessary for a Portfolio to purchase additional foreign currency on the 
spot market (and bear the expense of such purchase) if the market value of the  
security is less than the amount of foreign currency that such Portfolio is     
obligated to deliver and if a decision is made to sell the security and make    
delivery of the foreign currency.                                               

If a Portfolio retains the portfolio security and engages in an offsetting      
transaction, such Portfolio will incur a gain or a loss (as described below) to 
the extent that there has been movement in forward contract prices. Should      
forward prices decline during the period between a Portfolio entering into a    
forward contract for the sale of a foreign currency and the date it enters into 
an offsetting contract for the purchase of the foreign currency, such Portfolio 
will realize a gain to the extent that the price of the currency it has agreed  
to sell exceeds the price of the currency it has agreed to purchase. Should     
forward prices increase, such Portfolio would suffer a loss to the extent that  
the price of the currency it has agreed to purchase exceeds the price of the    
currency it has agreed to sell.                                                 

The Portfolios are not required to enter into such transactions with regard to  
their foreign currency-denominated securities. It also should be realized that  
this method of protecting the value of portfolio securities against a decline in
the value of a currency does not eliminate fluctuations in the underlying prices
of the securities. It simply establishes a rate of exchange which one can       
achieve at some future point in time. Additionally, although such contracts tend
to minimize the risk of loss due to a decline in the value of the hedged        
currency, at the same time, they tend to limit any potential gain which might   
result should the value of such currency increase.                              

FUTURES CONTRACTS (FUTURES) AND FORWARD CONTRACTS (FORWARDS).  The Portfolios   
may purchase and sell futures contracts, including futures on securities        
indices, baskets of securities, foreign currencies and interest rates of the    
type generally known as financial futures. These are standardized contracts that
are bought and sold on organized exchanges. A futures contract obligates a party
to buy or sell a specific amount of the "underlying," such as a particular      
foreign currency, on a specified future date at a specified price or to settle  
the value in cash.                                                              

The Portfolios may also purchase and sell forward contracts, such as forward    
rate agreements and other financial forward contracts. The Portfolios may also  
use foreign currency forward contracts which are separately discussed under     
"Foreign Currency Forward Contracts." These forward contracts are privately     
negotiated and are bought and sold in the over-the-counter market. Like a       
future, a forward contract obligates a party to buy or sell a specific amount of
the underlying on a specified future date at a specified price. The terms of the
forward contract are customized. Forward contracts, like other over-the-counter 
contracts that are negotiated directly with an individual counterparty, subject 
the Portfolio to the risk of counterparty default.                              

In some cases, the Portfolios may be able to use either futures contracts,      
forward contracts or exchange-traded or over-the-counter options to accomplish  
similar purposes. In all cases, the Portfolios will uses these products only as 
permitted by applicable laws and regulations. Some of the ways in which the     
Portfolios may use futures contracts, forward contracts and related options are 
as follows:                                                                     

The Portfolios may sell securities index futures contracts and/or options       
thereon in anticipation of or during a market decline to attempt to offset the  
decrease in market value of investments in its portfolio, or may purchase       
securities index futures or options in order to gain market exposure. There     
currently are limited securities index futures and options on such futures in   
many countries, particularly emerging markets. The nature of the strategies     
adopted by MSDW Investment Management, and the extent to which those strategies 
are used, may depend on the development of such markets. The Portfolios may also
purchase and sell foreign currency futures to lock in rates or to adjust their  
exposure to a particular currency.                                              

The Portfolio may engage in transactions in interest rate futures and related   
products. The value of these contracts rises and falls inversely with change in 
interest rates. The Portfolios may engage in such transactions to hedge their   
holdings of debt instruments against future changes in interest rates or for    
other purposes.                                                                 

Gains and losses on futures contracts, forward contracts and related options    
depend on MSDW Investment Management's ability to predict correctly the         
direction of movement of securities prices, interest rates and other economic   
factors. Other risks associated with the use of these instruments include       
(i) imperfect correlation between the changes in market value of investments    
held by a Portfolio and the prices of derivative products relating to           
investments purchased or sold by the Portfolio, and (ii) possible lack of a     
liquid secondary market for a derivative product and the resulting inability to 
close out a position. A                                                         
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Portfolio will seek to minimize the risk by only entering into transactions for 
which there appears to be a liquid exchange or secondary market. In some        
strategies, the risk of loss in trading on futures and related transactions can 
be substantial, due both to the low margin deposits required and the extremely  
high degree of leverage involved in pricing.                                    

Under rules adopted by the Commodity Futures Trading Commission (the "CFTC"),   
each Portfolio may, without registering with the CFTC as a Commodity Pool       
Operator, enter into futures contracts and options thereon for both hedging and 
non-hedging purposes, provided that not more than 5% of such Portfolio's total  
assets at the time of entering the transaction are required as margin and option
premiums to secure obligations under such contracts relating to non-bona fide   
hedging activities.                                                             

OPTIONS.  The Portfolios may seek to increase their returns or may hedge their  
portfolio investments through options transactions with respect to individual   
securities, indices or baskets in which such Portfolios may invest; other       
financial instruments; and foreign currency. Various options may be purchased   
and sold on exchanges or over-the-counter markets.                              

Each Portfolio may purchase put and call options. Purchasing a put option gives 
a Portfolio the right, but not the obligation, to sell the underlying (such as a
securities index or a particular foreign currency) at the exercise price either 
on a specific date or during a specified exercise period. The purchaser pays a  
premium to the seller (also known as the writer) of the option.                 

Each Portfolio also may write put and call options on investments held in its   
portfolio, as well as foreign currency options. A Portfolio that has written an 
option receives a premium that increases the Portfolio's return on the          
underlying in the event the option expires unexercised or is closed out at a    
profit. However, by writing a call option, a Portfolio will limit its           
opportunity to profit from an increase in the market value of the underlying    
above the exercise price of the option. By writing a put option, a Portfolio    
will be exposed to the amount by which the price of the underlying is less than 
the strike price.                                                               

By writing an option, a Portfolio incurs an obligation either to buy (in the    
case of a put option) or sell (in the case of a call option) the underlying from
the purchaser of the option at the option's exercise price, upon exercise by the
purchaser. Pursuant to guidelines established by the Board of Directors, the    
Portfolios may only write options that are "covered." A covered call option     
means that until the expiration of the option, the Portfolio will either earmark
or segregate sufficient liquid assets to cover its obligations under the option 
or will continue to own (i) the underlying; (ii) securities or instruments      
convertible or exchangeable without the payment of any consideration into the   
underlying; or (iii) a call option on the same underlying with a strike price no
higher than the price at which the underlying was sold pursuant to a short      
option position. In the case of a put option, the Portfolio will either earmark 
or segregate sufficient liquid assets to cover its obligations under the option 
or will own another put option on the same underlying with an equal or higher   
strike price.                                                                   

There currently are limited options markets in many countries, particularly     
emerging market countries, and the nature of the strategies adopted by MSDW     
Investment Management and the extent to which those strategies are used will    
depend on the development of these options markets. The primary risks associated
with the Portfolios' use of options as described include (i) imperfect          
correlation between the change in market value of investments held, purchased or
sold by a Portfolio and the prices of options relating to such investments, and 
(ii) possible lack of a liquid secondary market for an option.                  

SWAPS, CAPS, COLLARS AND FLOORS.  Swaps are privately negotiated                
over-the-counter derivative products in which two parties agree to exchange     
payment streams calculated in relation to a rate, index, instrument or certain  
securities and a particular "notional amount." As with many of the other        
derivative products available to the Portfolios, the underlying may include an  
interest rate (fixed or floating), a currency exchange rate, a commodity price  
index, and a security, securities index or a combination thereof. A great deal  
of flexibility is possible in the way the products may be structured, with the  
effect being that the parties may have exchanged amounts equal to the return on 
one rate, index or group of securities for another. For example, in a simple    
fixed-to-floating interest rate swap, one party makes payments equivalent to a  
fixed interest rate, and the other make payments equivalent to a specified      
interest rate index. A Portfolio may engage in simple or more complex swap      
transactions involving a wide variety of underlyings. The currency swaps that   
the Portfolios may enter will generally involve an agreement to pay interest    
streams in one currency based on a specified index in exchange for receiving    
interest streams denominated in another currency. Such swaps may involve initial
and final exchanges that correspond to the agreed upon notional amount.         

Caps, collars and floors are privately-negotiated option-based derivative       
products. A Portfolio may use one or more of these products in addition to or in
lieu of a swap involving a similar rate or index. As in the case of a put or    
call option, the buyer of a cap or floor pays a premium to the writer. In       
exchange for that premium, the buyer receives the right to a payment equal to   
the differential if the specified index or rate rises above (in the case of a   
cap) or falls below (in the case of a floor) a pre-determined strike level. As  
in the case of swaps, obligations under caps and floors are calculated based    
upon an agreed notional amount, and like most swaps (other than foreign currency
swaps), the entire notional amount is not exchanged and thus is not at risk. A  
collar is a combination product in which the same party, such as the Portfolio, 
buys a cap from and sells a floor to the other party. As with put and call      
options, the amount at risk is limited for the buyer, but, if the cap or floor  
in not hedged or covered, may be unlimited for the seller. Under current market 
practice, caps, collars and floors between the same two parties are generally   
documented under the same "master agreement." In some cases, options and forward
agreements may also be governed by the same master agreement. In the event of a 
default, amounts owed under all transactions entered into under, or covered by, 
the same master agreement would be netted and only a single payment would be    
made.                                                                           

Swaps, caps, collars and floors are credit-intensive products. A Portfolio that 
enters into a swap transaction bears the risk of default, i.e. nonpayment, by   
the other party. The guidelines under which each Portfolio enters derivative    
transactions, along with                                                        
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some features of the transactions themselves, are intended to reduce these risks
to the extent reasonably practicable, although they cannot eliminate the risks  
entirely. Under guidelines established by the Board of Directors, a Portfolio   
may enter into swaps only with parties that meet certain credit rating          
guidelines. Consistent with current market practices, a Portfolio will generally
enter into swap transactions on a net basis, and all swap transactions with the 
same party will be documented under a single master agreement to provide for net
payment upon default. In addition, a Portfolio's obligations under an agreement 
will be accrued daily (offset against any amounts owing to the Portfolio) and   
any accrued, but unpaid, net amounts owed to the other party to a master        
agreement will be covered by the maintenance of a segregated account consisting 
of cash or liquid securities.                                                   

Interest rate and total rate of return (fixed income or equity) swaps generally 
do not involve the delivery of securities, other underlying assets, or          
principal. In such case, if the other party to an interest rate or total rate of
return swap defaults, a Portfolio's risk of loss will consist of the payments   
that a Portfolio is contractually entitled to receive from the other party. This
may not be true for currency swaps that require the delivery of the entire      
notional amount of one designated currency in exchange for the other. If there  
is a default by the other party, a Portfolio may have contractual remedies under
the agreements related to the transaction.                                      

INVESTMENT LIMITATIONS

FUNDAMENTAL LIMITATIONS                                                         

Each current Portfolio has adopted the following restrictions which are         
fundamental policies and may not be changed without the approval of the lesser  
of: (i) at least 67% of the voting securities of the Portfolio present at a     
meeting if the holders of more than 50% of the outstanding voting securities of 
the Portfolio are present or represented by proxy; or (ii) more than 50% of the 
outstanding voting securities of the Portfolio. Each Portfolio of the Fund will 
not:                                                                            

(1) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (except this shall not prevent the 
Portfolio from purchasing or selling options or futures contracts or from       
investing in securities or other instruments backed by physical commodities),   
and except that the Gold Portfolio may invest in gold bullion in accordance with
its investment objectives and policies;                                         

(2) purchase or sell real estate, although it may purchase and sell     
securities of companies that deal in real estate and may purchase and sell      
securities that are secured by interests in real estate;                        

(3) lend any security or make any other loan if, as a result, more than 
33 1/3% of its total assets would be lent to other parties, but this limitation 
does not apply to purchases of debt securities or repurchase agreements;        

(4) except with respect to the Global Fixed Income, Emerging Markets,   
Emerging Markets Debt, China Growth, International Magnum, Latin American,      
MicroCap, Focus Equity, European Real Estate, Asian Real Estate, Technology and 
U.S. Real Estate Portfolios (i) purchase more than 10% of any class of the      
outstanding voting securities of any issuer and (ii) purchase securities of an  
issuer (except obligations of the U.S. Government and its agencies and          
instrumentalities) if as a result, with respect to 75% of its total assets, more
than 5% of the Portfolio's total assets, at market value, would be invested in  
the securities of such issuer;                                                  

   (5) issue senior securities and will not borrow, except from banks and as a
temporary measure for extraordinary or emergency purposes and then, in no event,
in excess of 33 1/3% of its total assets (including the amount borrowed) less   
liabilities (other than borrowings), except that each of the Emerging Markets   
Debt and Latin American Portfolios may borrow from banks and other entities, and
the Technology Portfolio may borrow from banks, in an amount not in excess of   
33 1/3% of its total assets (including the amount borrowed) less liabilities in 
accordance with its investment objectives and policies;                         

 (6) underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the 1933 Act in
the disposition of restricted securities;                                       

   (7) acquire any securities of companies within one industry if, as a result
of such acquisition, more than 25% of the value of the Portfolio's total assets 
would be invested in securities of companies within such industry; provided,    
however, that there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities, or (in 
the case of the Money Market Portfolio or the Municipal Money Market Portfolio) 
instruments issued by U.S. Banks, except that (i) the Latin American Portfolio  
may invest more than 25% of its total assets in securities of companies involved
in the telecommunications industry or financial services industry; (ii) the Gold
Portfolio will invest more than 25% of its total assets in securities of        
companies in the group of industries involved in gold-related or                
precious-metals-related activities, as described in its prospectus, and may     
invest more than 25% of its total assets in one or more of the industries that  
are a part of such group of industries, as described in its prospectus; (iii)   
each of the Asian Real Estate, European Real Estate and U.S. Real Estate        
Portfolios will invest more than 25% of its total assets in the Asian, European 
and U.S. real estate industries, respectively, as described in their            
prospectuses; and (iv) the Technology Portfolio will invest more than 25% of its
assets in securities of companies in the technology or technology-related       
industries; and                                                                 

(8) write or acquire options or interests in oil, gas or other mineral  
exploration or development programs.                                            
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NON-FUNDAMENTAL LIMITATIONS                                                     

In addition, each current Portfolio of the Fund has adopted non-fundamental     
investment limitations as stated below and in their respective Prospectuses.    
Such limitations may be changed without shareholder approval. Each current      
Portfolio of the Fund will not:                                                 

  (1) purchase on margin or sell short, except (i) that the Emerging Markets
Debt and Latin American Portfolios may from time to time sell securities short  
without limitation but consistent with applicable legal requirements as stated  
in its Prospectus; (ii) that each Portfolio, except the Money Market and        
Municipal Money Market Portfolios, may enter into option transactions and       
futures contracts as described in its Prospectus; and (iii) as specified above  
in fundamental investment limitation number (1) above;                          

    (2) except for the High Yield Portfolio, purchase or retain securities of an
issuer if those officers and Directors of the Fund or its investment adviser    
owning more than 1/2 of 1% of such securities together own more than 5% of such 
securities;                                                                     

   (3) pledge, mortgage, or hypothecate any of its assets to an extent greater
than 10% of its total assets at fair market value, except that the High Yield   
Portfolio may pledge, mortgage or hypothecate a maximum of 50% of its assets,   
not counting assets segregated to comply with coverage requirements under       
Section 18(f) of the 1940 Act, and the SEC's rules, regulations, orders, and    
interpretations thereunder;                                                     

(4) invest for the purpose of exercising control over management of any 
company;                                                                        

(5) except for the U.S. Real Estate, European Real Estate and Asian Real
Estate Portfolios, invest in real estate limited partnership interests, and the 
U.S. Real Estate, European Real Estate and Asian Real Estate Portfolios may not 
invest in such interests that are not publicly traded;                          

(6) make loans except (i) by purchasing bonds, debentures or similar    
obligations (including repurchase agreements, subject to the limitations as     
described in the respective Prospectuses) that are publicly distributed, except 
that the High Yield Portfolio also may purchase such securities that are not    
publicly distributed; (ii) by lending its portfolio securities to banks,        
brokers, dealers and other financial institutions so long as such loans are not 
inconsistent with the 1940 Act or the Rules and Regulations or interpretations  
of the SEC thereunder; and (iii) the High Yield Portfolio may lend securities to
institutional investors in addition to entities described in (ii);              

    (7) borrow money, except from banks for extraordinary or emergency purposes,
and then only in amounts up to 10% of the value of the Portfolio's total assets,
or purchase securities while borrowings exceed 5% of its total assets, except   
that (i) the Emerging Markets Debt Portfolio may borrow in accordance with      
fundamental investment limitation number (5) above; and (ii) the High Yield     
Portfolio may borrow up to 33 1/3% of its total assets in the aggregate,        
including reverse repurchase agreements; and                                    

The Fixed Income and Value Equity Portfolios will only issue shares for         
securities or assets other than cash in a bona fide reorganization, statutory   
merger, or in other acquisitions of portfolio securities (except for municipal  
debt securities issued by state political subdivisions or their agencies or     
instrumentalities) which (i) meet their respective investment objectives; and   
(ii) are acquired for investment and not for resale.                            

Each of the Global Fixed Income, Emerging Markets, Emerging Markets Debt, China 
Growth, Latin American, Focus Equity, European Real Estate, Asian Real Estate,  
U.S. Real Estate and Technology Portfolios will diversify its holdings so that, 
at the close of each quarter of its taxable year or within 30 days thereafter,  
(i) at least 50% of the market value of the Portfolio's total assets is         
represented by cash (including cash items and receivables), U.S. Government     
securities, and other securities, with such other securities limited, in respect
of any one issuer, for purposes of this calculation to an amount not greater    
than 5% of the value of the Portfolio's total assets and 10% of the outstanding 
voting securities of such issuer; and (ii) not more than 25% of the value of its
total assets is invested in the securities of any one issuer (other than U.S.   
Government securities). Prior to the close of each quarter (or within 30 days   
thereafter), the Portfolio's holdings maybe less diversified and are not        
required to satisfy any diversification test.                                   

With respect to fundamental investment limitation number (7), each Portfolio    
will determine industry concentration in accordance with the industry           
classifications used by its benchmark index, except that (i) with respect to the
Money Market, Municipal Money Market and High Yield Portfolios, (a) financial   
service companies will be classified according to the end users of their        
services, for example, automobile finance, bank finance and diversified finance 
will each be considered a separate industry and (b) asset-backed securities will
be classified according to the underlying assets securing such securities; and  
(ii) with respect to the High Yield Portfolio, utility companies will be        
classified according to their services, for example, electric, gas, gas         
transmission, and telephone will be treated as separate industries.             

In accordance with fundamental investment limitation number (7), the Latin      
American Portfolio will only invest more than 25% of its total assets in        
companies involved in the telecommunications industry or financial services     
industry if the Board of Directors determines that the Latin American markets   
are dominated by securities of issuers in such industries and that, in light of 
the anticipated return, investment quality, availability and liquidity of the   
issuers in such industries, the Portfolio's ability to achieve its investment   
objective would, in light of the investment policies and limitations, be        
materially adversely affected if the                                            

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Portfolio was not able to invest greater than 25% of its total assets in such   
industries. As stated in the Prospectus, the Board of Directors has made the    
foregoing determination and, accordingly, the Latin American Portfolio will     
invest between 25% and 50% of its assets in securities of issuers engaged in the
telecommunications industry.                                                    

The percentage limitations contained in these restrictions apply at the time of 
purchase of securities. Future Portfolios of the Fund may adopt different       
limitations.                                                                    

PURCHASE OF SHARES

You may purchase shares of each Portfolio on any day the New York Stock Exchange
("NYSE") is open. Each Portfolio reserves the right in its sole discretion      
(i) to suspend the offering of its shares; (ii) to reject purchase orders when  
in the judgment of management such rejection is in the best interest of the     
Fund; and (iii) to reduce or waive the minimum for initial and subsequent       
investments for certain accounts such as employee benefit plans or under        
circumstances where certain economies can be achieved in sales of a Portfolio's 
shares. The International Equity Portfolio is currently closed to new investors 
with the exception of certain Morgan Stanley & Co. Incorporated ("Morgan        
Stanley") customers, employees of Morgan Stanley and its affiliates, certain    
tax-qualified retirement plans and other investment companies advised by MSDW   
Investment Management and its affiliates. The China Growth, Gold, MicroCap,     
Mortgage-Backed Securities and Municipal Bond Portfolios currently are not      
operational.                                                                    

Shares of each Portfolio may be purchased at the net asset value per share next 
determined after receipt by the Fund or its designee of a purchase order as     
described under "Methods of Purchase" and "Investment through Financial         
Intermediaries." The International Small Cap Portfolio may impose a transaction 
fee of up to 0.50%. CLASS B SHARES OF THE MONEY MARKET PORTFOLIO ARE AVAILABLE  
FOR PURCHASE ONLY THROUGH FINANCIAL INTERMEDIARIES (AS DISCUSSED BELOW) THAT    
HAVE MADE ARRANGEMENTS WITH THE FUND. The net asset value per share of each     
Portfolio is calculated on days that the NYSE is open for business. Net asset   
value per share is determined (i) for each non-money market Portfolio, as of the
close of trading of the NYSE (normally 4:00 p.m. Eastern Time); (ii) for the    
Money Market Portfolio, as of 12:00 noon Eastern Time; and (ii) for the         
Municipal Money Market Portfolio, as of 11:00 a.m. Eastern Time (for each       
Portfolio, the "Pricing Time").                                                 

MINIMUM INVESTMENT                                                              

The minimum initial investment is $500,000 for Class A shares and $100,000 for  
Class B shares of each non-money market Portfolio, except that the minimum      
initial investment is $250,000 for Class A shares and $50,000 for Class B shares
of the Technology Portfolio. The minimum initial investment is $100,000 for     
Class A shares of each money market Portfolio. There is no minimum initial      
investment for Class B shares of the Money Market Portfolio. These minimums may 
be waived at MSDW Investment Management's discretion for certain types of       
investors, including trust departments, brokers, dealers, agents, financial     
planners, financial services firms, investment advisers or various retirement   
and deferred compensation plans ("Financial Intermediaries"); certain accounts  
managed by MSDW Investment Management and its affiliates ("Managed Accounts");  
and certain employees and customers of Morgan Stanley and its affiliates. The   
Fund's determination of an investor's eligibility to purchase shares of a given 
class will take precedence over the investor's selection of a class.            

METHODS OF PURCHASE                                                             

You may purchase shares directly from the Fund by Federal Funds wire, by bank   
wire or by check; however, on days that the NYSE is open but the custodian bank 
is closed, you may only purchase shares by check. Investors may also invest in  
the Portfolios by purchasing shares through Financial Intermediaries that have  
made arrangements with the Fund. Class B shares of the Money Market Portfolio   
may only be purchased through Financial Intermediaries. Some Financial          
Intermediaries may charge an additional service or transaction fee (see also    
"Investment through Financial Intermediaries.") If a purchase is canceled due to
nonpayment or because your check does not clear, you will be responsible for any
loss the Fund or its agents incur. If you are already a shareholder, the Fund   
may redeem shares from your account(s) to reimburse the Fund or its agents for  
any loss. In addition, you may be prohibited or restricted from making future   
investments in the Fund.                                                        

FEDERAL FUNDS WIRE.  Purchases may be made by having your bank wire Federal     
Funds to the Fund's bank account. Federal Funds purchase orders will be accepted
only on a day on which the Fund and The Chase Manhattan Bank ("Chase Bank") are 
open for business. Your bank may charge a service fee for wiring Federal Funds. 
In order to ensure proper handling of your purchase by Federal Funds wire,      
please follow these steps.                                                      
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1. Place your order by telephoning the Fund at 1-800-548-7786. A Fund 
        representative will request certain purchase information and provide you
with a confirmation number.                                     

2. Instruct your bank to wire the specified amount to the Fund's Wire 
Concentration Bank Account as follows:                          

The Chase Manhattan Bank                                      
One Manhattan Plaza                                           
New York, NY 10081-1000                                       
ABA# 021000021                                                
DDA# 910-2-733293                                             
Attn: Morgan Stanley Dean Witter Institutional Fund, Inc.     
Ref: (Portfolio name, your account number, your account name) 

Please call the Fund at 1-800-548-7786 prior to wiring funds. 

3. Complete and sign an Account Registration Form and mail it to the  
address shown thereon.                                          

When a purchase order is received prior to the Pricing Time and Federal Funds   
are received prior to the regular close of the Federal Funds Wire Control Center
("FFWCC") (normally 6:00 p.m. Eastern Time) the purchase will be executed at the
net asset value computed on the date of receipt. Purchases for which an order is
received after the Pricing Time or for which Federal Funds are received after   
the regular close of the FFWCC will be executed at the net asset value next     
determined. Certain institutional investors and financial institutions have     
entered into an agreement with the Fund pursuant to which they may place orders 
prior to the Pricing Time, but make payment in Federal Funds for those shares   
the following business day.                                                     

BANK WIRE.  A purchase of shares by bank wire must follow the same procedure as 
for a Federal Funds wire, described above. However, depending on the time the   
bank wire is sent and the bank handling the wire, money transferred by bank wire
may or may not be converted into Federal Funds prior to the close of the FFWCC. 
Prior to conversion to Federal Funds and receipt by the Fund, an investor's     
money will not be invested.                                                     

CHECK.  An account may be opened by completing and signing an Account           
Registration Form and mailing it, together with a check payable to "Morgan      
Stanley Dean Witter Institutional Fund, Inc. -- [Portfolio name]" to:           

Morgan Stanley Dean Witter Institutional Fund, Inc.           
P.O. Box 2798                                                 
Boston, Massachusetts 02208-2798                              

The Fund ordinarily is credited with Federal Funds within one business day of   
deposit of a check. Thus, a purchase of shares by check ordinarily will be      
credited to your account at the net asset value per share of each of the        
Portfolios determined on the next business day after receipt. An investor's     
money will not be invested prior to crediting of Federal Funds.                 

INVESTMENT THROUGH FINANCIAL INTERMEDIARIES.  Certain Financial Intermediaries  
have made arrangements with the Fund so that an investor may purchase or redeem 
shares at the net asset value per share next determined after the Financial     
Intermediary receives the share order. In other instances, the Fund has also    
authorized such Financial Intermediaries to designate other intermediaries to   
receive purchase and redemption orders on the Fund's behalf at the share price  
next determined after such designees receive the share order. Under these       
arrangements, the Fund will be deemed to have received a purchase or redemption 
order when the Financial Intermediary or, if applicable, a Financial            
Intermediary's authorized designee, receives the share order from an investor.  

ADDITIONAL INVESTMENTS.  You may purchase additional shares for your account at 
any time by purchasing shares at net asset value by any of the methods described
above. The minimum additional investment generally is $1,000 per Portfolio,     
except that there is no minimum for Class B shares of the Money Market          
Portfolio. The minimum additional investment may be lower for certain accounts  
described above under "Minimum Investment." For purchases directly from the     
Fund, your account name, the Portfolio name and the class selected must be      
specified in the letter or wire to assure proper crediting to your account.     

INVOLUNTARY CONVERSION AND REDEMPTION OF NEW ACCOUNT SHARES                     

Class A and Class B shares of each non-money market Portfolio may be subject to 
the involuntary conversion and redemption features described below. Shares of   
the money market Portfolios are not subject to involuntary conversion or        
redemption. The conversion and redemption features may be waived at MSDW        
Investment Management's discretion for shares held in a Managed Account and     
shares purchased through a Financial Intermediary. Accounts that were open prior
to January 2, 1996 are not subject to involuntary conversion or redemption. The 
Fund reserves the right to modify or terminate the conversion or redemption     
features of the shares at any time upon 60 days notice to shareholders.         

CONVERSION FROM CLASS A TO CLASS B SHARES.  If the value of an account          
containing Class A shares of a non-money market Portfolio falls below $500,000  
($250,000 for the Technology Portfolio), but remains at or above $100,000       
($50,000 for the Technology Portfolio), because of shareholder redemption(s),   
the Fund will notify the shareholder, and if the account value remains below    
$500,000 ($250,000 for the Technology Portfolio), but remains at or above       
$100,000 ($50,000 for the Technology Portfolio), for a continuous 60-day period,
the Class A shares in such account will convert to Class B shares and will be   
subject to                                                                      
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the distribution fee and other features applicable to Class B shares. The Fund  
will not convert Class A shares to Class B shares based solely upon changes in  
the market that reduce the net asset value of shares. Under current tax law,    
conversion between share classes is not a taxable event to the shareholder.     

CONVERSION FROM CLASS B TO CLASS A SHARES.  If the value of an account          
containing Class B shares of a non-money market Portfolio increases to $500,000 
or more, ($250,000 for the Technology Portfolio), whether due to shareholder    
purchases or market activity, the Class B shares will convert to Class A shares.
Class B shares purchased through a Financial Intermediary that has entered into 
an arrangement with the Fund for the purchase of such shares may not be         
converted. Under current tax law, such conversion is not a taxable event to the 
shareholder. Class A shares converted from Class B shares are subject to the    
same minimum account size requirements as are applicable to accounts containing 
Class A shares described above.                                                 

INVOLUNTARY REDEMPTION OF SHARES.  If the value of an account falls below       
$100,000 ($50,000 for the Technology Portfolio), because of shareholder         
redemption(s), the Fund will notify the shareholder, and if the account value   
remains below $100,000 ($50,000 for the Technology Portfolio), for a continuous 
60-day period, the shares in such account will be subject to redemption by the  
Fund. The Fund will not redeem shares based solely upon changes in the market   
that reduce the net asset value of shares. If redeemed, redemption proceeds will
be promptly paid to the shareholder.                                            

REDEMPTION OF SHARES

The Fund normally makes payment for all shares redeemed within one business day 
of receipt of the request, and in no event more than seven days after receipt of
a redemption request in good order. However, payments to investors redeeming    
shares which were purchased by check will not be made until payment for the     
purchase has been collected, which may take up to eight days after the date of  
purchase. The Fund may suspend the right of redemption or postpone the date of  
payment (i) during any period that the NYSE is closed, or trading on the NYSE is
restricted as determined by the SEC; (ii) during any period when an emergency   
exists as defined by the rules of the SEC as a result of which it is not        
practicable for a Portfolio to dispose of securities it owns, or fairly to      
determine the value of its assets; and (iii) for such other periods as the SEC  
may permit.                                                                     

Class A shares of each Portfolio and Class B shares of each Portfolio, except   
for the International Small Cap and Municipal Money Market Portfolios that do   
not offer Class B shares, may be redeemed at any time and without charge at the 
net asset value per share next determined after receipt by the Fund of a        
redemption order as described under "Methods of Redemption," except that the    
International Small Cap Portfolio may impose a transaction fee of up to 0.50%.  
Redemption proceeds may be more or less than the purchase price of your shares  
depending on, among other factors, the market value of the investment securities
held by a Portfolio.                                                            

METHODS OF REDEMPTION                                                           

You may redeem shares directly from the Fund by mail or by telephone. HOWEVER,  
SHARES PURCHASED THROUGH A FINANCIAL INTERMEDIARY MUST BE REDEEMED THROUGH A    
FINANCIAL INTERMEDIARY. Certain Financial Intermediaries may charge an          
additional service or transaction fee.                                          

BY MAIL.  Each Portfolio will redeem shares upon receipt of a redemption request
in "good order." Redemption requests may be sent by regular mail to Morgan      
Stanley Dean Witter Institutional Fund, Inc., P.O. Box 2798, Boston,            
Massachusetts 02208-2798 or, by overnight courier, to Morgan Stanley Dean Witter
Institutional Fund, Inc., c/o Chase Global Funds Services Company, 73 Tremont   
Street, Boston, Massachusetts 02108-3913.                                       

"Good order" means that the request to redeem shares must include the following:

  1.  A letter of instruction or a stock assignment specifying the class and
number of shares or dollar amount to be redeemed, signed by all 
    registered owners of the shares in the exact names in which they are
registered;                                                     

2.  Any required signature guarantees; and                              

  3.  Other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and
profit-sharing plans and other organizations.                   

Redemption requests received in "good order" prior to the Pricing Time will be  
executed at the net asset value computed on the date of receipt. Redemption     
requests received after the Pricing Time will be executed at the next determined
net asset value. Shareholders who are uncertain of requirements for redemption  
by mail should consult with a Fund representative.                              

BY TELEPHONE.  If you have previously elected the Telephone Redemption Option on
the Account Registration Form, you can redeem Portfolio shares by calling the   
Fund and requesting that the redemption proceeds be mailed to you or wired to   
your bank. Please contact one of the Fund's representatives for further details.
To change the commercial bank or account designated to receive redemption       
proceeds, send a written request to the Fund at the address above. Requests to  
change the bank or account must be signed by each shareholder and each signature
must be guaranteed. The telephone redemption option may be difficult to         
implement at times, particularly during volatile market conditions. If you      
experience difficulty in making a telephone redemption, you may redeem shares by
mail as described above.                                                        

The Fund and the Transfer Agent will employ reasonable procedures to confirm    
that instructions communicated by telephone are genuine. These procedures       
include requiring the investor to provide certain personal identification       
information at the time an account is opened and prior to effecting each        
telephone transaction. In addition, all telephone transaction requests will be  
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recorded and investors may be required to provide additional telecopied written 
instructions regarding transactions requests. Neither the Fund nor the Transfer 
Agent will be responsible for any loss, liability, cost or expense for following
instructions received by telephone that either of them reasonably believes to be
genuine.                                                                        

REDEMPTION THROUGH FINANCIAL INTERMEDIARIES.  Certain Financial Intermediaries  
have made arrangements with the Fund to accept redemption request from          
underlying beneficial owners. These redemptions may be processed in the same way
as purchases made through Financial Intermediaries, as described above.         

FURTHER REDEMPTION INFORMATION                                                  

If the Board of Directors determines that it would be detrimental to the best   
interests of the remaining shareholders of a Portfolio to make payment in cash, 
the Fund may pay redemption proceeds in whole or in part by a                   
distribution-in-kind of readily marketable portfolio securities in accordance   
with applicable SEC rules. Shareholders may incur brokerage charges on the sale 
of securities received from a distribution-in-kind.                             

The Fund has made an election with the SEC pursuant to Rule 18f-1 under the 1940
Act to pay in cash all redemptions requested by any shareholder of record       
limited in amount during any 90-day period to the lesser of $250,000 or 1% of   
the net assets of a Portfolio at the beginning of such period. Such commitment  
is irrevocable without the prior approval of the SEC. Redemptions in excess of  
the above limits may be paid in whole or in part in portfolio securities or in  
cash, as the Board of Directors may deem advisable as being in the best         
interests of the Fund. If redemptions are paid in portfolio securities, such    
securities will be valued as set forth under "Valuation of Shares."             

No charge is made by any Portfolio for redemptions, except for the transaction  
fee of up to 0.50% that may be assessed upon redemption by the International    
Small Cap Portfolio. Any redemption may be more or less than the shareholder's  
cost depending on the market value of the securities held by the Portfolio.     

To protect your account and the Fund from fraud, signature guarantees are       
required for certain redemptions. Signature guarantees enable the Fund to verify
the identity of the person who has authorized a redemption from your account.   
Signature guarantees are required in connection with: (i) all redemptions,      
regardless of the amount involved, when the proceeds are to be paid to someone  
other than the registered owner(s) and/or registered address; and (ii) share    
transfer requests. An "eligible guarantor institution" may include a bank, a    
trust company, a credit union or savings and loan association, a member firm of 
a domestic stock exchange, or a foreign branch of any of the foregoing. Notaries
public are not acceptable guarantors. The signature guarantees must appear      
either: (i) on the written request for redemption; (ii) on a separate instrument
for assignment ("stock power") which should specify the total number of shares  
to be redeemed; or (iii) on all stock certificates tendered for redemption and, 
if shares held by the Fund are also being redeemed, on the letter or stock      
power.                                                                          

ACCOUNT POLICIES AND FEATURES 

EXCHANGE FEATURES                                                               

You may exchange shares of each Portfolio that you own for shares of any other  
available Portfolio(s) of the Fund, subject to certain limitations. Any such    
exchange will be based on the respective net asset values of the shares         
involved. There is no sales commission or sales charge of any kind (although a  
transaction fee of up to 0.50% may be charged on exchanges to and from the      
International Small Cap Portfolio). You cannot exchange for shares of the       
International Equity Portfolio because it is currently closed to new investors. 
In addition, certain Portfolios are not operational or may be unavailable to    
shareholders who purchased Portfolio shares through a Financial Intermediary.   
Contact your Financial Intermediary to determine which Portfolios are available 
for exchange.                                                                   

Before you make an exchange, you should read the prospectus of the Portfolio(s) 
in which you seek to invest. The class of shares you receive in exchange will be
determined in the same manner as any other purchase of shares, including minimum
initial investment and account size requirements, and will not be based on the  
class of shares you surrender for the exchange. Exchange transactions are       
treated as a redemption followed by a purchase. Therefore, an exchange will be  
considered a taxable event for shareholders subject to tax. Exchange            
transactions will be processed at the net asset value per share next determined 
after receipt of the request.                                                   

Exchange requests may be made either by mail or telephone. Exchange requests by 
mail should be sent to Morgan Stanley Dean Witter Institutional Fund, Inc.,     
P.O. Box 2798, Boston, Massachusetts 02208-2798. Telephone exchanges will be    
accepted only if the certificates for the shares to be exchanged are held by the
Fund for the account of the shareholder and the registration of the two accounts
will be identical. The telephone exchange privilege is automatic and made       
available without shareholder election. Exchanges may be subject to limitations 
as to amounts or frequency, and to other restrictions established by the Board  
of Directors to assure that such exchanges do not disadvantage the Fund and its 
shareholders. The exchange privilege may be modified or terminated by the Fund  
at any time upon 60-days notice to shareholders.                                

TRANSFER OF SHARES                                                              

Shareholders may transfer Portfolio shares to another person by making a written
request to the Fund. The request should clearly identify the account and number 
of shares to be transferred, and include the signature of all registered owners 
and all stock certificates, if any, which are subject to the transfer. It may   
not be possible to transfer shares purchased through a Financial Intermediary.  
The signature on the letter of request, the stock certificate or any stock power
must be guaranteed in the same                                                  
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manner as described under "Redemption of Shares." As in the case of redemptions,
the written request must be received in good order before any transfer can be   
made. Transferring shares may affect the eligibility of an account for a given  
class of the Portfolio's shares and may result in involuntary conversion or     
redemption of such shares.                                                      

VALUATION OF SHARES                                                             

The net asset value per share of a class of shares of each of the non-money     
market Portfolios is determined by dividing the total market value of the       
Portfolio's investments and other assets attributable to such class, less all   
liabilities attributable to such class, by the total number of outstanding      
shares of such class of the Portfolio. Net asset value is calculated separately 
for each class of a Portfolio. Net asset value per share of the non-money market
Portfolios is determined as of the close of the NYSE (normally 4:00 p.m. Eastern
Time) on each day that the NYSE is open for business. The NYSE will be closed on
the following days: New Year's Day, Martin Luther King, Jr. Day, Presidents'    
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day   
and Christmas Day. Price information on listed securities is taken from the     
exchange where the security is primarily traded. Portfolio securities generally 
are valued at their market value. Securities listed on a U.S. securities        
exchange for which market quotations are available generally are valued at the  
last quoted sale price on the day the valuation is made. Securities listed on a 
foreign exchange generally are valued at their closing price. Unlisted          
securities and listed securities not traded on the valuation date and for which 
market quotations are not readily available generally are valued at a price     
within a range not exceeding the current asked price nor less than the current  
bid price. The current bid and asked prices are determined based on the average 
of the bid and asked prices quoted on such valuation date by reputable brokers. 

Bonds and other fixed income securities are valued according to the broadest and
most representative market, which will ordinarily be the over-the-counter       
market. Net asset value includes interest on fixed income securities, which is  
accrued daily unless collection is in doubt. In addition, bonds and other fixed 
income securities may be valued on the basis of prices provided by a pricing    
service when such prices are believed to reflect the fair market value of such  
securities. The prices provided by a pricing service are determined without     
regard to bid or last sale prices, but take into account institutional-size     
trading in similar groups of securities and any developments related to the     
specific securities. Securities not priced in this manner are valued at the most
recently quoted bid price or, when securities exchange valuations are used, at  
the latest quoted sale price on the day of valuation. If there is no such       
reported sale, the latest quoted bid price will be used. Securities purchased   
with remaining maturities of 60 days or less are valued at amortized cost, if it
approximates market value. In the event that amortized cost does not approximate
market value, market prices as determined above will be used.                   

The value of other assets and securities for which quotations are not readily   
available (including certain restricted and unlisted securities) and those      
securities for which it is inappropriate to determine prices in accordance with 
the above-stated procedures are determined in good faith at fair value using    
methods determined by the Board of Directors. For purposes of calculating net   
asset value per share, all assets and liabilities initially expressed in foreign
currencies generally will be converted into U.S. dollars at the mean of the bid 
and asked price of such currencies against the U.S. dollar as quoted by a major 
bank.                                                                           

Although the legal rights of Class A and Class B shares will be identical, the  
different expenses borne by each class will result in different net asset values
and dividends for the class. Dividends will differ by approximately the amount  
of the distribution expense accrual differential among the classes. The net     
asset value of Class B shares will generally be lower than the net asset value  
of Class A shares as a result of the distribution expense charged to Class B    
shares.                                                                         

The net asset value per share of each of the Money Market and Municipal Money   
Market Portfolios is determined by subtracting the Portfolio's liabilities      
(including accrued expenses and dividends payable) from the total value of the  
Portfolio's investments and other assets and dividing the result by the total   
number of outstanding shares of the Portfolio. The net asset value per share of 
the Municipal Money Market Portfolio and the Money Market Portfolio are         
determined as of 11:00 a.m. and 12:00 noon (Eastern Time), respectively, on the 
days on which the NYSE is open. For purposes of calculating each money market   
Portfolio's net asset value per share, securities are valued by the "amortized  
cost" method of valuation, which does not take into account unrealized gains or 
losses. This involves valuing an instrument at its cost and thereafter assuming 
a constant amortization to maturity of any discount or premium, regardless of   
the impact of fluctuating interest rates on the market value of the instrument. 
While this method provides certainty in valuation, it may result in periods     
during which the value, as determined by the amortized cost, is higher or lower 
than the price the Portfolio would receive if it sold the instrument.           
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MANAGEMENT OF THE FUND

OFFICERS AND DIRECTORS                                                          

The Fund's officers, under the supervision of the Board of Directors, manage the
day-to-day operations of the Fund. The Directors set broad policies for the Fund
and choose its officers. Two Directors and all of the officers of the Fund are  
directors, officers or employees of MSDW Investment Management, Morgan Stanley  
or Chase Global Funds Services Company ("Chase Global"). The other Directors    
have no affiliation with MSDW Investment Management, Morgan Stanley or Chase    
Global. Directors and officers of the Fund are also directors and officers of   
some or all of the funds in the Fund Complex (defined below) or other investment
companies managed, administered, advised or distributed by MSDW Investment      
Management or its affiliates. A list of the Directors and officers of the Fund  
and a brief statement of their present positions and principal occupations      
during the past five years is set forth below:                                  

                                                        [Enlarge/Download Table]

NAME, ADDRESS AND DATE OF BIRTH            POSITION WITH FUND    PRINCIPAL; OCCUPATION DURING PAST FIVE YEARS      
---------------------------------------  ----------------------  --------------------------------------------      
                                                                                                                   
Barton M. Biggs*                         Chairman and Director   Chairman, Director and Managing Director of Morgan
 Morgan Stanley Dean Witter Investment                             Stanley Dean Witter Investment Management Inc.  
 Management Inc.                                                   and Morgan Stanley Dean Witter Investment       
 1221 Avenue of the Americas                                       Management Limited; Managing Director of Morgan 
 New York, NY 10020                                                Stanley & Co. Incorporated; Member of the Yale  
 11/26/32                                                          Development Board; and Chairman and Director of 
                                                                   various funds in the Fund Complex.**            

John D. Barrett, II                      Director                Chairman and Director of Barrett Associates, Inc. 
 Barrett Associates Inc.                                           (investment counseling); Director of the        
 521 Fifth Avenue                                                  Ashforth Company (real estate); and Director of 
 New York, NY 10135                                                various funds in the Fund Complex.              
 8/21/35                                                                                                           

Gerard E. Jones                          Director                Partner, Richards & O'Neil LLP (law firm); and    
 Richards & O'Neil LLP                                             Director of various funds in the Fund Complex.  
 43 Arch Street                                                                                                    
 Greenwich, CT 06830                                                                                               
 1/23/37                                                                                                           

Graham E. Jones                          Director                Senior Vice President of BGK Properties; Trustee  
 330 Garfield Street                                               of various investment companies managed by      
 Suite 200                                                         Weiss, Peck & Greer; Trustee of various         
 Santa Fe, NM 87501                                                investment companies managed by Morgan Grenfell 
 1/31/33                                                           Capital Management Incorporated; Trustee of     
                                                                   various investment companies managed by Sun     
                                                                   Capital Advisors, Inc.; and Director of various 
                                                                   funds in the Fund Complex. Formerly, Chief      
                                                                   Financial Officer of Practice Management        
                                                                   Systems, Inc.                                   

John A. Levin                            Director                Chairman and Chief Executive Officer of John A.   
 One Rockeffeller Plaza                                            Levin & Co., Inc.; Director, President and Chief
 New York, NY 10020                                                Executive Officer of Baker Fentress & Company;  
 8/20/38                                                           and Director of various funds in the Fund       
                                                                   Complex.                                        

Andrew McNally IV                        Director                Director of Mercury Finance (consumer finance) and
 333 North Michigan Avenue                                         Zenith Electronics, Hubbell, Inc. (industrial   
 Suite 501                                                         electronics) and Director of various funds in   
 Chicago, IL 60601                                                 the Fund Complex. Formerly, Chairman and Chief  
 11/11/39                                                          Executive Officer of Rand McNally & Company     
                                                                   (publishing).                                   

William G. Morton, Jr.                   Director                Chairman and Chief Executive Officer of Boston    
 100 Franklin Street                                               Stock Exchange; Director of Tandy Corporation;  
 Boston, MA 02110                                                  and Director of various funds in the Fund       
 3/13/37                                                           Complex.                                        

Samuel T. Reeves                         Director                President, Pinnacle Trading L.L.C (investments)   
 8211 North Fresno Street                                          and Director of various funds in the Fund       
 Fresno, CA 93720                                                  Complex.                                        
 7/28/34                                                                                                           

Fergus Reid                              Director                Chairman and Chief Executive Officer of LumeLite  
 85 Charles Colman Blvd                                            Plastics Corporation (injection molding);       
 Pawling, NY 12564                                                 Trustee and Director of Vista Mutual Fund Group;
 8/12/32                                                           and Director of various funds in the Fund       
                                                                   Complex.                                        

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NAME, ADDRESS AND DATE OF BIRTH            POSITION WITH FUND    PRINCIPAL; OCCUPATION DURING PAST FIVE YEARS      
---------------------------------------  ----------------------  --------------------------------------------      
                                                                                                                   
Frederick O. Robertshaw                  Director                Of Counsel, Copple, Chamberlin and Boehm, P.C.    
 2025 North Third Street                                           (law firm); and Director of various funds in the
 Suite 300                                                         Fund Complex. Formerly, of Counsel, Bryan, Cave 
 Phoenix, AZ 85004                                                 LLP (law firm).                                 
 1/24/34                                                                                                           

Harold J. Schaaff, Jr.                   President               Managing Director of Morgan Stanley & Co.         
 Morgan Stanley Dean Witter Investment                             Incorporated and Morgan Stanley Dean Witter     
 Management Inc.                                                   Investment Management Inc.; and Director and    
 1221 Avenue of the Americas                                       President of various funds in the Fund Complex. 
 New York, NY 10020                                                Previously General Counsel and Secretary of MSDW
 6/10/60                                                           Investment Management                           

Joseph P. Stadler                        Vice President          Principal of Morgan Stanley & Co. Incorporated and
 Morgan Stanley Dean Witter Investment                             Morgan Stanley Dean Witter Investment Management
 Management Inc.                                                   Inc.; and Vice President of various funds in the
 1221 Avenue of the Americas                                       Fund Complex. Previously with Price Waterhouse  
 New York, NY 10020                                                LLP (now PricewaterhouseCoopers LLP).           
 6/7/54                                                                                                            

Stefanie V. Chang                        Vice President          Vice President of Morgan Stanley & Co.            
 Morgan Stanley Dean Witter Investment                             Incorporated and Morgan Stanley Dean Witter     
 Management Inc.                                                   Investment Management Inc.; and Vice President  
 1221 Avenue of the Americas                                       of various funds in the Fund Complex. Previously
 New York, NY 10020                                                practiced law with the New York law firm of     
 11/30/66                                                          Rogers & Wells.                                 

Mary E. Mullin                           Secretary               Vice President of Morgan Stanley & Co.            
 Morgan Stanley Dean Witter Investment                             Incorporated and Morgan Stanley Dean Witter     
 Management Inc.                                                   Investment Management Inc.; and Secretary of    
 1221 Avenue of the Americas                                       various funds in the Fund Complex. Previously   
 New York, NY 10020                                                practiced law with the New York law firms of    
 3/22/67                                                           McDermott, Will & Emery and Skadden, Arps,      
                                                                   Slate, Meagher & Flom LLP.                      

Belinda A. Brady                         Treasurer               Fund Administration Senior Manager, Chase Global  
 Chase Global Funds                                                Funds Services Company; and Treasurer of various
 Services Company                                                  funds in the Fund Complex. Previously was senior
 73 Tremont Street                                                 auditor at Price Waterhouse LLP (now            
 Boston, MA 02108-3913                                             PricewaterhouseCoopers LLP).                    
 1/23/68                                                                                                           

Robin L. Conkey                          Assistant Treasurer     Fund Administration Manager, Chase Global Funds   
 Chase Global Funds                                                Services Company; and Assistant Treasurer of    
 Services Company                                                  various various funds in the Fund Complex.      
 73 Tremont Street                                                 Previously, was senior auditor at Price         
 Boston, MA 02108-3913                                             Waterhouse LLP (now PricewaterhouseCoopers LLP).
 5/11/70                                                                                                           

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

* Indicates each director that is an "interested person" within the meaning of
the 1940 Act.                                                             

** The Fund Complex currently includes Morgan Stanley Dean Witter Institutional 
Fund, Inc.; The Universal Institutional Funds, Inc.; Morgan Stanley Dean  
Witter Strategic Adviser Fund, Inc.; Morgan Stanley Dean Witter Africa    
Investment Fund, Inc.; Morgan Stanley Dean Witter Asia-Pacific Fund, Inc.;
Morgan Stanley Dean Witter Eastern Europe Fund, Inc.; Morgan Stanley Dean 
Witter Emerging Markets Fund, Inc.; Morgan Stanley Dean Witter Emerging   
 Markets Debt Fund, Inc.; Morgan Stanley Dean Witter Global Opportunity Bond
  Fund, Inc.; Morgan Stanley Dean Witter High Yield Fund, Inc.; Morgan Stanley
 Dean Witter India Investment Fund, Inc.; The Latin American Discovery Fund,
 Inc.; The Malaysia Fund, Inc.; The Pakistan Investment Fund, Inc.; The Thai
Fund, Inc.; and The Turkish Investment Fund, Inc.                         

As of December 31, 1999, the Directors and officers of the Fund, as a group,    
owned more than 1% of the outstanding common stocks of the following Portfolios 
of the Fund: Asian Equity Portfolio (6.13%); Fixed Income Portfolio (2.17%);    
Muncipal Money Market Portfolio (1.15%); and Value Equity Portfolio (1.82%).    

COMPENSATION OF DIRECTORS AND OFFICERS                                          

The Fund, together with the other funds in the Fund Complex for which a Director
serves as director, pays each of the Directors who is not an "interested person"
an annual aggregate fee of $75,000, plus reasonable out-of-pocket expenses for  
service as a Director and for serving on the Board's Audit and/or               
Nominating/Compensation Committees. Directors' fees will be allocated among the 
Fund and the other funds in the Fund Complex for which the Directors serves as a
director in proportion to their respective average net assets. For the fiscal   
year ended December 31, 1999, the Fund paid approximately $654,000 in Directors'
fees and expenses. Directors who are also officers or affiliated persons receive
no remuneration from the Fund for their services as Directors. The Fund's       
officers and employees are paid by MSDW Investment Management or its agents.    

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The following table shows aggregate compensation paid to each of the Fund's     
Directors by the Fund and the Fund Complex, respectively, in the fiscal year    
ended December 31, 1999. Prior to April 1, 2000 each Independent Director       
received annual compensation of $65,000, plus reasonable out-of-pocket expenses 
from the Fund Complex. Members of the Board's Audit Committee received an       
additional $10,000 per year from the Fund Complex.                              

COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                  TOTAL COMPENSATION 
                                                    AGGREGATE         FROM FUND      
                                                   COMPENSATION    AND FUND COMPLEX  
NAME OF PERSON, POSITION                            FROM FUND    PAYABLE TO DIRECTORS
------------------------                           ------------  --------------------
                                                                                     
Barton M. Biggs,                                                                     
 Director and Chairman of the Board...............    None              None         
Michael F. Klein,(1)                                                                 
 Director and President...........................    None              None         
John D. Barrett, II(5)                                                               
 Director.........................................   62,320            65,000        
Gerard E. Jones,(6)                                                                  
 Director.........................................   62,320            72,100        
Andrew McNally, IV(2)(6)                                                             
 Director.........................................   71,908            75,000        
Samuel T. Reeves,(2)(5)                                                              
 Director.........................................   71,908            82,100        
Fergus Reid,(2)(5)                                                                   
 Director.........................................   62,320            72,100        
Frederick O. Robertshaw,(2)(6)                                                       
 Director.........................................   71,908            75,000        
Graham E. Jones,(3)(6)                                                               
 Director.........................................    N/A              75,750        
John A. Levin,(3)(5)                                                                 
 Director.........................................    N/A              72,100        
William G. Morton, Jr.,(3)(6)                                                        
 Director.........................................    N/A              65,000        

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

(1) Mr. Klein resigned from the Board effective March 2, 2000.                  

(2) Messrs. McNally, Reeves, Reid and Robertshaw have elected, pursuant to the  
deferred compensation plan, to defer all, or a portion, of their        
  compensation received from the Fund for the fiscal year ended December 31,
1999.                                                                   

(3) Messrs. Jones, Levin and Morton were appointed to the Board on February 17, 
2000 and therefore, did not receive compensation from the Fund for the  
fiscal year ended December 31, 1999.                                    

(4) Number of other investment companies in Fund Complex from whom Directors    
  received compensation: Mr. Barrett-2; Mr. Gerard E. Jones-3; Mr. Graham E.
Jones-12; Mr. Levin-12; Mr. McNally-2; Mr. Morton-12; Mr. Reeves-3; Mr. 
Reid-3; Mr. Robertshaw-2.                                               

(5) Member of Nominating/Compensation Committee of the Board of Directors of the
Fund.                                                                   

(6) Member of the Audit Committee of the Board of Directors of the Fund.        

The Fund maintains an unfunded Deferred Compensation Plan which allows each     
independent Director to defer payment of all, or a portion, of the fees he or   
she receives for attending meetings of the Board of Directors throughout the    
year. Each eligible Director generally may elect to have the deferred amounts   
credited with a return equal to either of the following: (i) a rate equal to the
prevailing rate for 90-day U.S. Treasury Bills, or (ii) a rate equal to the     
total return on one or more portfolios of the Fund or other funds in the Fund   
Complex selected by the Director. Distributions generally are in the form of    
equal annual installments over a period of five years beginning on the first day
of the year following the year in which the Director's service terminates,      
except that the Board of Directors, in its sole discretion, may accelerate or   
extend such distribution schedule. The Fund intends that the Deferred           
Compensation Plan shall be maintained at all times on an unfunded basis for     
federal income tax purposes under the Internal Revenue Code of 1986, as amended 
(the "Code"). The rights of an eligible Director and the beneficiaries to the   
amounts held under the Deferred Compensation Plan are unsecured and such amounts
are subject to the claims of the creditors of the Fund.                         

CODE OF ETHICS                                                                  

Pursuant to Rule 17j-1 under the 1940 Act, the Board of Directors has adopted a 
Code of Ethics for the Fund and approved Codes of Ethics adopted by MSDW        
Investment Management and Morgan Stanley (collectively the "Codes"). The Codes  
are intended to ensure that the interests of shareholders and other clients are 
placed ahead of any personal interest, that no undue personal benefit is        
obtained from the person's employment activities and that actual and potential  
conflicts of interest are avoided.                                              

The Codes apply to the personal investing activities of Directors and officers  
of the Fund, MSDW Investment Management and Morgan Stanley ("Access Persons").  
Rule 17j-1 and the Codes are designed to prevent unlawful practices in          
connection with the purchase or sale of securities by Access Persons. Under the 
Codes, Access Persons are permitted to engage in personal securities            
transactions, but are required to report their personal securities transactions 
for monitoring purposes. In addition, certain Access Persons are required to    
obtain approval before investing in initial public offerings or private         
placements. The Codes are on file with the SEC, and are available to the Public.

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INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISER                                                              

MSDW Investment Management is a wholly-owned subsidiary of Morgan Stanley Dean  
Witter & Co. ("MSDW"). The principal offices of MSDW are located at 1585        
Broadway, New York, NY 10036, and the principal offices of MSDW Investment      
Management are located at 1221 Avenue of the Americas, New York, NY 10020. MSDW 
Investment Management provides investment advice and portfolio management       
services pursuant to an Investment Advisory Agreement and, subject to the       
supervision of the Fund's Board of Directors, makes each of the Portfolio's     
day-to-day investment decisions, arranges for the execution of portfolio        
transactions and generally manages each of the Portfolio's investments. In      
managing the Portfolio, MSDW Investment Management may use the services of      
associated investment personnel employed by its affiliated institutional asset  
management companies. Pursuant to the Investment Advisory Agreement, MSDW       
Investment Management is entitled to receive from the Class A and Class B shares
of each Portfolio an annual management fee, payable quarterly, equal to the     
percentage of average daily net assets set forth in the table below. MSDW       
Investment Management has voluntarily agreed to a reduction in the fees payable 
to it and to reimburse the Portfolios, if necessary, if such fees would cause   
the total annual operating expenses of each Portfolio to exceed the percentage  
of average daily net assets set forth in the table below. In determining the    
actual amount of voluntary fee waiver and/or expense reimbursement for a        
Portfolio, if any, MSDW Investment Management excludes from annual operating    
expenses certain investment related expenses, such as foreign country tax       
expense and interest expense on borrowing. MSDW Investment Management reserves  
the right to terminate any of its fee waivers and/or expense reimbursements at  
any time in its sole discretion.                                                

The following table shows, for each of the Class A and Class B shares of each   
Portfolio, (i) the contractual advisory fee as a percentage of average daily net
assets; (ii) the advisory fee paid for each of the past three fiscal years;     
(iii) the total operating expenses after voluntary fee waivers (excluding       
certain investment related expenses); and (iv) total operating expenses after   
voluntary fee waivers for the fiscal year ended December 31, 1999.              

                                                        [Enlarge/Download Table]


                                                                          ADVISORY FEE PAID                       
                                                                    (AFTER VOLUNTARY FEE WAIVERS)                 
                                                   ---------------------------------------------------------------
                                                       YEAR ENDED            YEAR ENDED            YEAR ENDED     
                                    CONTRACTUAL     DECEMBER 31, 1999     DECEMBER 31, 1998     DECEMBER 31, 1997 
PORTFOLIO                           ADVISORY FEE          (000)                 (000)                 (000)       
---------                           ------------   -------------------   -------------------   -------------------
                                                                                                                  
Emerging Markets Portfolio.........     1.25%            $12,672*              $16,181*              $21,203*     
Emerging Markets Debt Portfolio....     0.75                 492*                1,410*                1,623*     
Latin American Portfolio...........     1.10                 144                   636*                  718      
Active International Allocation                                                                                   
  Portfolio........................     0.65               2,262                 1,017                   588      
Asian Equity Portfolio.............     0.80                 191                    88                 1,674      
Asian Real Estate Portfolio........     0.80                   0                     0                     0      
China Growth Portfolio.............     1.25                  --                    --                    --      
European Equity Portfolio..........     0.80                 872                 2,015                 1,696      
European Real Estate Portfolio.....     0.80                  63                   178                     0      
Global Equity Portfolio............     0.80               1,592                 1,409                   673      
Gold Portfolio.....................     1.00                  --                    --                   150      
International Equity Portfolio.....     0.80              32,217                25,948                21,159      
International Magnum Portfolio.....     0.80               1,592                 1,728                   984      
International Small Cap                                                                                           
  Portfolio........................     0.95               2,571                 2,462                 2,268      
Japanese Equity Portfolio..........     0.80                 412                   440                 1,139      
Focus Equity Portfolio.............     0.80               1,017                 1,535                 1,067      
Small Company Growth Portfolio.....     1.00                 388                   616                   558      
Equity Growth Portfolio............     0.60               6,007                 4,635                 2,961      
MicroCap Portfolio.................     1.00                  --                    --                    --      
Technology Portfolio...............     1.00                 320                   135                     0      
U.S. Equity Plus Portfolio.........     0.45                  31                    85                     0      
U.S. Real Estate Portfolio.........     0.80               2,391                 2,423                 2,313      
Value Equity Portfolio.............     0.50                 192                   342                   415      
Fixed Income Portfolio.............     0.35                 466                   473                   294      
Global Fixed Income Portfolio......     0.40                  45                    77                   182      
High Yield Portfolio...............     0.375                698*                  711*                  489*     
Mortgage-Backed Securities                                                                                        
  Portfolio........................     0.35                  --                    --                    --      
Municipal Bond Portfolio...........     0.35                   0                    51                    67      
Money Market Portfolio.............     0.30               6,153*                5,176*                4,066*     
Municipal Money Market Portfolio...     0.30               3,349*                2,881*                2,213*     


                                                                     TOTAL OPERATING                              
                                         TOTAL OPERATING              EXPENSES AFTER                              
                                          EXPENSES AFTER              VOLUNTARY FEE                               
                                          VOLUNTARY FEE              WAIVERS FOR THE                              
                                             WAIVERS                   FISCAL YEAR                                
                                            (EXCLUDING                    ENDED                                   
                                            INVESTMENT                 DECEMBER 31,                               
                                        RELATED EXPENSES)                  1999                                   
                                    --------------------------  --------------------------                        
PORTFOLIO                             CLASS A       CLASS B       CLASS A       CLASS B                           
---------                           ------------  ------------  ------------  ------------                        
                                                                                                                  
Emerging Markets Portfolio.........        1.57%         1.81%         1.64%         1.88%                        
Emerging Markets Debt Portfolio....        1.29          1.55          1.40          1.65                         
Latin American Portfolio...........        1.70          1.95          1.79          2.05                         
Active International Allocation                                                                                   
  Portfolio........................        0.80          1.05          0.80          1.05                         
Asian Equity Portfolio.............        1.00          1.25          1.07          1.32                         
Asian Real Estate Portfolio........        1.00          1.25          1.01          1.25                         
China Growth Portfolio.............          --            --            --            --                         
European Equity Portfolio..........        1.00          1.25          1.09          1.34                         
European Real Estate Portfolio.....        1.00          1.25          1.23          1.47                         
Global Equity Portfolio............        1.00          1.25          1.01          1.26                         
Gold Portfolio.....................          --            --            --            --                         
International Equity Portfolio.....        1.00          1.25          1.00          1.25                         
International Magnum Portfolio.....        1.00          1.25          1.01          1.25                         
International Small Cap                                                                                           
  Portfolio........................        1.15            --          1.15            --                         
Japanese Equity Portfolio..........        1.00          1.25          1.01          1.26                         
Focus Equity Portfolio.............        1.00          1.25          1.01          1.26                         
Small Company Growth Portfolio.....        1.25          1.50          1.25          1.50                         
Equity Growth Portfolio............        0.80          1.05          0.80          1.05                         
MicroCap Portfolio.................          --            --            --            --                         
Technology Portfolio...............        1.25          1.50          1.26          1.51                         
U.S. Equity Plus Portfolio.........        0.80          1.00          0.83          1.08                         
U.S. Real Estate Portfolio.........        1.00          1.25          1.00          1.25                         
Value Equity Portfolio.............        0.70          0.95          0.73          0.98                         
Fixed Income Portfolio.............        0.45          0.60          0.45          0.60                         
Global Fixed Income Portfolio......        0.50          0.65          0.50          0.65                         
High Yield Portfolio...............        0.59          0.85          0.59          0.85                         
Mortgage-Backed Securities                                                                                        
  Portfolio........................          --            --            --            --                         
Municipal Bond Portfolio...........        0.45            --          0.45            --                         
Money Market Portfolio.............        0.50            --          0.50            --                         
Municipal Money Market Portfolio...        0.50            --          0.50            --                         

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

* No fee waivers were necessary for this portfolio because total operating      
expenses did not exceed the expense limitation.                             

INVESTMENT SUB-ADVISERS                                                         

MSDW Advisors, with principal offices at Two World Trade Center, New York, New  
York 10048, serves as the investment sub-adviser to the Money Market and        
Municipal Money Market Portfolios pursuant to an investment sub-advisory        
agreement with                                                                  

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MSDW Investment Management. As compensation for managing the day-to-day         
investments of the Money Market and Municipal Money Market Portfolios, MSDW     
Investment Management pays MSDW Advisors 40% of the investment advisory fee that
MSDW Investment Management receives from each of those Portfolios (net of       
applicable fee waivers).                                                        

Sun Valley, with principal offices at 620 Sun Valley Road, Sun Valley, Idaho,   
serves as the investment sub-adviser of the Gold Portfolio, pursuant to a       
sub-advisory agreement among the Fund, MSDW Investment Management and Sun Valley
(the "Sub-Advisory Agreement"). MSDW Investment Management and Sun Valley have  
entered into an indemnification agreement under which, generally, Sun Valley has
agreed to indemnify MSDW Investment Management and the Fund for claims or losses
in connection with any failure by Sun Valley to comply with its obligations     
under the Sub-Advisory Agreement or related agreements or any act or omission   
that amounts to negligence, misfeasance or bad faith, and MSDW Investment       
Management has agreed to indemnify Sun Valley for claims or losses in connection
with any failure by MSDW Investment Management to comply with its obligations   
under the Sub-Advisory Agreement or related agreements. As compensation for     
sub-advisory services for the fiscal years ended December 31, 1999,             
December 31, 1998 and December 31, 1997, Sun Valley earned fees of approximately
$0, $172 and $106,000, respectively, and from such fees voluntarily waived fees 
of $0, $172 and $46,000, respectively.                                          

PRINCIPAL UNDERWRITER                                                           

Morgan Stanley serves as principal underwriter to the Fund. For information     
relating to the services provided by Morgan Stanley see "Distribution of        
Shares."                                                                        

FUND ADMINISTRATION                                                             

MSDW Investment Management also provides administrative services to the Fund    
pursuant to an Administration Agreement. The services provided under the        
Administration Agreement are subject to the supervision of the officers and the 
Board of Directors of the Fund and include day-to-day administration of matters 
related to the corporate existence of the Fund, maintenance of records,         
preparation of reports, supervision of the Fund's arrangements with its         
custodian, and assistance in the preparation of the Fund's registration         
statement under federal laws. The Administration Agreement also provides that   
MSDW Investment Management, through its agents, will provide dividend disbursing
and transfer agent services to the Fund. For its services under the             
Administration Agreement, the Fund pays MSDW Investment Management a monthly fee
which on an annual basis equals 0.15% of the average daily net assets of each   
Portfolio.                                                                      

SUB-ADMINISTRATOR.  Under an agreement between MSDW Investment Management and   
Chase Bank, Chase Global, a corporate affiliate of Chase Bank, provides certain 
administrative services to the Fund. MSDW Investment Management supervises and  
monitors the administrative services provided by Chase Global. Their services   
are also subject to the supervision of the officers and Board of Directors of   
the Fund. Chase Global provides operational and administrative services to      
investment companies with approximately $164 billion in assets and having       
approximately 391,442 shareholder accounts as of December 31, 1999. Chase       
Global's business address is 73 Tremont Street, Boston, Massachusetts           
02108-3913.                                                                     

CUSTODIAN                                                                       

Chase Bank, located at 73 Tremont Street, Boston, MA 02108-3913, acts as the    
Fund's custodian.                                                               

DIVIDEND DISBURSING AND TRANSFER AGENT                                          

Chase Global, 73 Tremont Street, Boston, MA 02108-3913, provides dividend       
disbursing and transfer agency for the Fund pursuant to the Sub-Administration  
Agreement.                                                                      

INDEPENDENT ACCOUNTANTS                                                         

PricewaterhouseCoopers LLP, located at 1177 Avenue of the Americas, New York,   
NY, serves as independent accountants for the Fund and audits the annual        
financial statements of each Portfolio.                                         

FUND COUNSEL                                                                    

Morgan, Lewis & Bockius LLP, located at 1701 Market Street, Philadelphia, PA    
19103, acts as the Fund's legal counsel.                                        

YEAR 2000                                                                       

The Fund and its service providers do not appear to have been adversely affected
by computer problems related to the transition to the year 2000. However, there 
remains a risk that such problems could rise or be discovered in the future.    
Year 2000 related problems also may adversely affect issuers whose securities   
the Fund purchases, which could have an impact on the value of your investment. 

DISTRIBUTION OF SHARES

Morgan Stanley, a wholly-owned subsidiary of MSDW, serves as the Fund's         
exclusive distributor of Portfolio shares pursuant to a Distribution Agreement. 
In addition, to promote the sale of Fund shares, the Fund has adopted a Plan of 
Distribution with respect to the Class B shares of each Portfolio (except the   
Municipal Money Market and International Small Cap Portfolios which do not offer
Class B shares) under Rule 12b-1 of the 1940 Act (each, a "Plan"). Under each   
Plan, Morgan Stanley is entitled to receive as compensation from each Portfolio 
a fee, which is accrued daily and paid quarterly, at an annual rate of 0.25% of 
the average daily net assets of the Class B shares. Each Plan is designed to    
compensate Morgan Stanley for its services                                      
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in connection with distributing shares of all Portfolios. Morgan Stanley may    
retain any portion of the fees it does not expend in meeting its obligations to 
the Fund. Morgan Stanley may compensate financial intermediaries, plan          
fiduciaries and administrators for providing distribution-related services,     
including account maintenance services, to shareholders (including, where       
applicable, underlying beneficial owners) of Class B shares.                    

The Plans for the Class B shares were most recently approved by the Fund's Board
of Directors, including those directors who are not "interested persons" of the 
Fund and who have no direct or indirect financial interest in the operation of a
Plan or in any agreements related thereto, on June 22, 1999.                    

The following table describes the 12b-1 fees paid by each Portfolio pursuant to 
the Plan and the distribution-related expenses for each Portfolio for the fiscal
year ended December 31, 1999. To the extent that expenditures on                
distribution-related activities exceed the fees paid by a Portfolio, the excess 
amounts were paid by MSDW Investment Management or Morgan Stanley out of their  
own resources.                                                                  

                                                        [Enlarge/Download Table]

                                                       PRINTING                                                            
                                                         AND                                                               
                                          TOTAL       MAILING OF                                              12B-1 FEES   
                                       DISTRIBUTION  PROSPECTUSES                                             RETAINED BY  
                                         (12B-1)       TO OTHER                                             MORGAN STANLEY/
                                           FEES          THAN                                 COMPENSATION   (EXPENDITURES 
                                         PAID BY       CURRENT     SHAREHOLDER      SUB-        TO SALES     IN EXCESS OF  
                                        PORTFOLIO    SHAREHOLDERS   SERVICING   DISTRIBUTION   PERSONNEL      12B-1 FEES)  
                                                                                                                           
                                       ------------------------------------------------------------------------------------
Emerging Markets Portfolio............   $ 24,343      $    46        $  0        $  3,670      $ 3,286        $ 17,341    
Emerging Markets Debt Portfolio.......      2,342            0           0               0          472           1,870    
Latin American Portfolio..............      3,367            0           0               2          728           2,637    
Active International Allocation                                                                                            
  Portfolio...........................      7,166           13           0           5,838          527             788    
Asian Equity Portfolio................      4,769           31           0               0        1,285           3,453    
Asian Real Estate Portfolio...........      2,522            0           0               0          888           1,634    
European Equity Portfolio.............      8,399           58           0               0        3,075           5,266    
European Real Estate Portfolio........      5,154            0           0               0        1,970           3,184    
Global Equity Portfolio...............     60,609          624       2,031          58,836        4,627          (5,509)   
Gold Portfolio........................          0            0           0               0            0               0    
International Equity Portfolio........     70,706            0           0          44,771          294          25,641    
International Magnum Portfolio........     64,287          227       1,198          62,643        6,892          (6,673)   
Japanese Equity Portfolio.............      5,223           42           0             469        1,817           2,895    
Focus Equity Portfolio................     46,666            0         736              63       16,883          28,984    
Small Company Growth Portfolio........     10,152            0           0           8,740          584             828    
Equity Growth Portfolio...............    405,992          359       6,632         417,061        6,399         (24,459)   
Technology Portfolio..................      5,986            0           0               6        1,800           4,180    
U.S. Equity Plus Portfolio............      3,473            0           0           2,325          130           1,018    
U.S. Real Estate Portfolio............     34,819            0           0           3,264        7,822          23,733    
Value Equity Portfolio................      2,357            0           0               0          495           1,862    
Fixed Income Portfolio................      4,040           40         340               0        1,163           2,497    
Global Fixed Income Portfolio.........        501           26           0               0           16             459    
High Yield Portfolio..................    117,169            0           0               0       45,675          71,494    

                                                                      37

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BROKERAGE PRACTICES 

PORTFOLIO TRANSACTIONS                                                          

MSDW Investment Management, as each Portfolio's investment adviser, is          
responsible for decisions to buy and sell securities for each Portfolio, for    
broker-dealer selection and for negotiation of commission rates. Purchases and  
sales of securities on a stock exchange are effected through brokers who charge 
a commission for their services. In the over-the-counter market, securities are 
generally traded on a "net" basis with dealers acting as principal for their own
accounts without a stated commission, although the price of the security usually
includes profit to the dealer. In underwritten offerings, securities are        
purchased at a fixed price which includes an amount of compensation to the      
underwriter, generally referred to as the underwriter's concession or discount. 
When securities are purchased or sold directly from or to an issuer, no         
commissions or discounts are paid.                                              

On occassion, a Portfolio may purchase certain money market instruments directly
from an issuer without payment of a commission or concession. Money market      
instruments are generally traded on a "net" basis with dealers acting as        
principal for their own accounts without a stated commission, although the price
of the security usually includes a profit to the dealer.                        

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

MSDW Investment Management serves as investment adviser to a number of clients, 
including other investment companies. MSDW Investment Management attempts to    
equitably allocate purchase and sale transactions among the Portfolios of the   
Fund and other client accounts. To that end, MSDW Investment Management         
considers various factors, including respective investment objectives, relative 
size of portfolio holdings of the same or comparable securities, availability of
cash for investment, size of investment commitments generally held and the      
opinions of the persons responsible for managing the Portfolios of the Fund and 
other client accounts.                                                          

MSDW Investment Management selects the brokers or dealers that will execute the 
purchases and sales of investment securities for each Portfolio. MSDW Investment
Management seeks the best execution for all portfolio transactions. A Portfolio 
may pay higher commission rates than the lowest available when MSDW Investment  
Management believes it is reasonable to do so in light of the value of the      
research, statistical, and pricing services provided by the broker effecting the
transaction. In seeking to determine the reasonableness of brokerage commissions
paid in any transaction, MSDW Investment Management relies upon its experience  
and knowledge regarding commissions generally charged by various brokers and on 
its judgement in evaluating the brokerage and research services received from   
the broker effecting the transaction. MSDW Investment Management is unable to   
ascertain the value of these services due to the subjective nature of their     
determinations.                                                                 

In cases where suitable price and execution are obtainable from more than one   
broker or dealer, MSDW Investment Management may place portfolio transactions   
with those who also furnish research and other services to the Fund and MSDW    
Investment Management. Such services may include information as to the          
availability of securities for purchase or sale, statistical or factual         
information or opinions pertaining to investment, wire services, and appraisals 
or evaluations of portfolio securities. MSDW Investment Management may use these
research services to service all of its accounts and may not use all of these   
services in connection with providing investment advice to the Portfolios. While
the receipt of such information and services would generally reduce the amount  
of research or services otherwise performed by MSDW Investment Management and   
thus reduce its expenses, the value of such reduction is indeterminable and     
therefore will not reduce the fees paid to MSDW Investment Management.          

It is not the Fund's practice to direct brokerage or principal business on the  
basis of sales of Portfolio shares which may be made through intermediary       
brokers or dealers. However, MSDW Investment Management may, consistent with    
NASD rules, place portfolio orders with qualified broker-dealers who recommend  
the applicable Portfolio to their clients or who act as agents in the purchase  
of shares of the Portfolio for their clients.                                   

Subject to the overriding objective of obtaining the best execution of orders,  
the Fund may use broker-dealer affiliates of MSDW Investment Management to      
effect Portfolio brokerage transactions under procedures adopted by the Fund's  
Board of Directors. Pursuant to these procedures, MSDW Investment Management    
uses two broker-dealer affiliates, Morgan Stanley (including Morgan Stanley     
International Limited) and Dean Witter Reynolds, Inc. ("DWR"), each of which is 
wholly owned by MSDW for such transactions, the commission rates and other      
remuneration paid to Morgan Stanley or DWR must be fair and reasonable in       
comparison to those of other broker-dealers for comparable transactions         
involving similar securities being purchased or sold during a comparable time   
period. This standard would allow the affiliated broker or dealer to receive no 
more than the remuneration which would be expected to be received by an         
unaffiliated broker.                                                            

For the fiscal years ended December 31, 1997, 1998 and 1999, the Fund paid      
brokerage commissions of approximately $25,893,432, $23,357,888 and $20,717,111,
respectively. For the fiscal years ended December 31, 1997, 1998 and 1999, the  
Fund paid in the aggregate $1,060,894, $755,255 and $1,021,566, respectively, as
brokerage commissions to Morgan Stanley, an affiliated broker-dealer, which     
represented 4.10%, 3.23% and 4.93% of the total amount of brokerage commissions 
paid in each                                                                    

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respective period. For the fiscal years ended December 31, 1997, 1998 and 1999, 
the Fund paid in the aggregate $7,010, $0 and $0, respectively, as brokerage    
commissions to DWR, an affiliated broker-dealer which represented 0.03%, 0% and 
0% of the total amount of brokerage commissions paid in the period.             

                                                        [Enlarge/Download Table]

                                                BROKERAGE COMMISSIONS PAID DURING FISCAL YEAR ENDED DECEMBER 31, 1999           
                                     -------------------------------------------------------------------------------------------
                                                    COMMISSIONS PAID TO MORGAN STANLEY           COMMISSIONS PAID TO DWR        
                                                  --------------------------------------  --------------------------------------
                                                                             PERCENT OF                              PERCENT OF 
                                        TOTAL                  PERCENT OF      TOTAL                   PERCENT OF      TOTAL    
                                     COMMISSIONS     TOTAL        TOTAL       BROKERED       TOTAL        TOTAL       BROKERED  
PORTFOLIO                               PAID      COMMISSIONS  COMMISSIONS  TRANSACTIONS  COMMISSIONS  COMMISSIONS  TRANSACTIONS
---------                            -----------  -----------  -----------  ------------  -----------  -----------  ------------
                                                                                                                                
Emerging Markets.................... $8,082,739    $307,639        3.81%         3.43%        $0            0%            0%    
Emerging Markets Debt...............          0           0           0             0          0            0             0     
Latin American......................    133,838       1,192        0.89          1.75          0            0             0     
Active International Allocation.....    472,261       2,982        0.63          1.42          0            0             0     
Asian Equity........................    954,117     165,631       17.36         16.60          0            0             0     
Asian Real Estate...................     29,936       8,082       27.00         21.63          0            0             0     
China Growth........................         --          --          --            --         --           --            --     
European Equity.....................    547,509      15,863        2.90          8.06          0            0             0     
European Real Estate................    103,184       6,577        6.37          7.13          0            0             0     
Global Equity.......................    363,210      24,249        6.68         10.25          0            0             0     
Gold................................         --          --          --            --         --           --            --     
International Equity................  5,660,807     181,116        3.20          6.53          0            0             0     
International Magnum................    681,129      77,269       11.34         14.93          0            0             0     
International Small Cap.............    727,604       6,581        0.90          1.13          0            0             0     
Japanese Equity.....................     94,093      32,567       34.61         34.59          0            0             0     
Focus Equity........................    306,306      20,575        6.72          6.91          0            0             0     
Small Company Growth................    158,925      16,527       10.40          8.23          0            0             0     
Equity Growth.......................  1,276,547     121,443        9.51         10.96          0            0             0     
MicroCap............................         --          --          --            --         --           --            --     
Technology..........................     82,051       2,468        3.01          2.17          0            0             0     
U.S. Equity Plus....................     93,874           0           0             0          0            0             0     
U.S. Real Estate....................    851,550           0           0             0          0            0             0     
Value Equity........................     96,861      30,805       31.80         30.76          0            0             0     
Fixed Income........................          0           0           0             0          0            0             0     
Global Fixed Income.................          5           0           0        100.00          0            0             0     
High Yield..........................        565           0           0             0          0            0             0     
Mortgage-Backed Securities..........         --          --          --            --         --           --            --     
Municipal Bond......................          0           0           0             0          0            0             0     
Money Market........................          0           0           0             0          0            0             0     
Municipal Money Market..............          0           0           0             0          0            0             0     

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                                      BROKERAGE COMMISSION PAID DURING FISCAL YEARS ENDED DECEMBER 31, 1998 AND 1997   
                                    -----------------------------------------------------------------------------------
                                      FISCAL YEAR ENDED DECEMBER 31, 1998        FISCAL YEAR ENDED DECEMBER 31, 1997   
                                    ----------------------------------------   ----------------------------------------
PORTFOLIO                              TOTAL      MORGAN STANLEY      DWR         TOTAL      MORGAN STANLEY      DWR   
---------                           -----------   --------------   ---------   -----------   --------------   ---------
                                                                                                                       
Emerging Markets................... $7,405,604       $427,280       $    0     $9,553,152       $508,656       $     0 
Emerging Markets Debt..............     11,600              0            0              0              0             0 
Latin American.....................    612,986         16,187            0        934,181         48,639             0 
Active International Allocation....    271,986          1,858            0        221,850              8             0 
Asian Equity.......................    893,159         63,049            0      3,340,107        269,475             0 
Asian Real Estate..................     89,878         13,591            0         17,777          1,663             0 
China Growth.......................         --             --           --             --             --            -- 
European Equity....................    701,142         23,472            0        428,978            893             0 
European Real Estate...............    262,099         18,479            0         57,604            760             0 
Global Equity......................    428,439         33,841            0        146,658          7,724             0 
Gold...............................         --             --           --        182,258              0             0 
International Equity...............  4,447,250         36,072            0      4,108,858         34,331             0 
International Magnum...............    505,962         39,045            0        478,263          3,816             0 
International Small Cap............    613,660         11,066            0        534,567          4,183             0 
Japanese Equity....................    345,321         71,315            0        687,376        133,968             0 
Focus Equity.......................  1,412,028              0            0        914,888              0             0 
Small Company Growth...............    646,865              0            0        237,105              0             0 
Equity Growth......................  2,460,784              0            0      1,911,995            108         1,988 
MicroCap...........................         --             --           --             --             --            -- 
Technology.........................     80,839              0            0        138,077              0             0 
U.S. Equity Plus...................    125,983              0            0          7,886             18             0 
U.S. Real Estate...................  1,677,239              0            0      1,886,276         46,652         5,022 
Value Equity.......................    361,047              0            0        105,576              0             0 
Fixed Income.......................          0              0            0              0              0             0 
Global Fixed Income................      4,017              0            0              0              0             0 
High Yield.........................          0              0            0              0              0             0 
Mortgage-Backed Securities.........         --             --           --             --             --            -- 
Municipal Bond.....................          0              0            0              0              0             0 
Money Market.......................          0              0            0              0              0             0 
Municipal Money Market.............          0              0            0              0              0             0 

DIRECTED BROKERAGE. During the fiscal year ended December 31, 1999, the         
Portfolios paid brokerage commissions to brokers because of research services   
provided as follows:                                                            

                                                        [Enlarge/Download Table]

                                                                   AGGREGATE DOLLAR  
                                                                      AMOUNT OF      
                                         BROKERAGE COMMISSIONS     TRANSACTIONS FOR  
                                         DIRECTED IN CONNECTION       WHICH SUCH     
                                         WITH RESEARCH SERVICES    COMMISSIONS WERE  
                                              PROVIDED FOR       PAID FOR FISCAL YEAR
                                           FISCAL YEAR ENDED            ENDED        
PORTFOLIO                                  DECEMBER 31, 1999      DECEMBER 31, 1999  
---------                                ----------------------  --------------------
                                                                                     
Emerging Markets Portfolio..............     $    8,082,739         $2,256,971,055   
Emerging Markets Debt Portfolio.........                  0                      0   
Latin American Portfolio................            133,838             46,790,770   
Active International Allocation                                                      
  Portfolio.............................            472,261            553,750,205   
Asian Equity Portfolio..................            954,117            265,190,629   
Asian Real Estate Portfolio.............             29,936              7,272,994   
China Growth Portfolio..................                N/A                    N/A   
European Equity Portfolio...............            547,509            255,333,380   
European Real Estate Portfolio..........            103,184             42,118,725   
Global Equity Portfolio.................            363,210            178,232,101   
Gold Portfolio..........................                N/A                    N/A   
International Equity Portfolio..........          5,660,807          2,867,296,834   
International Magnum Portfolio..........            681,129            327,294,974   
International Small Cap Portfolio.......            727,604            251,714,788   
Japanese Equity Portfolio...............             94,093             47,075,457   
Focus Equity Portfolio..................            295,422            294,376,401   
Small Company Growth Portfolio..........            117,810             63,714,789   
Equity Growth Portfolio.................          1,225,950          1,226,095,337   
MicroCap Portfolio......................                N/A                    N/A   
Technology Portfolio....................             48,815             40,166,997   
U.S. Equity Plus Portfolio..............             93,874            137,936,317   
U.S. Real Estate Portfolio..............            844,237            335,582,148   
Value Equity Portfolio..................             96,861             78,221,277   
Fixed Income Portfolio..................                  0                      0   

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                                                                   AGGREGATE DOLLAR  
                                                                      AMOUNT OF      
                                         BROKERAGE COMMISSIONS     TRANSACTIONS FOR  
                                         DIRECTED IN CONNECTION       WHICH SUCH     
                                         WITH RESEARCH SERVICES    COMMISSIONS WERE  
                                              PROVIDED FOR       PAID FOR FISCAL YEAR
                                           FISCAL YEAR ENDED            ENDED        
PORTFOLIO                                  DECEMBER 31, 1999      DECEMBER 31, 1999  
---------                                ----------------------  --------------------
                                                                                     
Global Fixed Income Portfolio...........                  5                796,912   
High Yield Portfolio....................                565                516,150   
Mortgage-Backed Securities Portfolio....                N/A                    N/A   
Municipal Bond Portfolio................                  0                      0   
Money Market Portfolio..................                  0                      0   
Municipal Money Market Portfolio........                  0                      0   

REGULAR BROKER-DEALERS.  The Fund's regular broker-dealers are (i) the ten      
broker-dealers that received the greatest dollar amount of brokerage commissions
from the Fund; (ii) the ten broker-dealers that engaged as principal in the     
largest dollar amount of portfolio transactions; and (iii) the ten              
broker-dealers that sold the largest dollar amount of Portfolio shares. During  
the fiscal year ended December 31, 1999, the following Portfolios purchased     
securities issued by the Fund's regular broker-dealers:                         

                                                        [Enlarge/Download Table]

                                                                                        VALUE OF PORTFOLIO HOLDING
PORTFOLIO                                         REGULAR BROKER-DEALER                  AS OF DECEMBER 31, 1999  
---------                           --------------------------------------------------  --------------------------
                                                                                                                  
International Equity Portfolio..... Manulife Financial                                          $   22,481        
U.S. Equity Plus Portfolio......... Charles Schwab                                              $       23        
                                    Lehman Brothers, Inc.                                       $      136        
Money Market Portfolio............. Goldman Sachs Group, Inc.                                   $   69,679        
                                    Merrill Lynch & Co.                                         $   69,488        

PORTFOLIO TURNOVER.  The Portfolios generally do not invest for short-term      
trading purposes, however, when circumstances warrant, each Portfolio may sell  
investment securities without regard to the length of time they have been held. 
Market conditions in a given year could result in a higher or lower portfolio   
turnover rate than expected and the Portfolios will not consider portfolio      
turnover rate a limiting factor in making investment decisions consistent with  
their investment objectives and policies. Higher portfolio turnover (e.g., over 
100%) necessarily will cause the Portfolios to pay correspondingly increased    
brokerage and trading costs. In addition to transaction costs, higher portfolio 
turnover may result in the realization of capital gains. As discussed under     
"Taxes," to the extent net short-term capital gains are realized, any           
distributions resulting from such gains are considered ordinary income for      
federal income tax purposes.                                                    

GENERAL INFORMATION 

FUND HISTORY                                                                    

The Fund was incorporated pursuant to the laws of the State of Maryland on      
June 16, 1988 under the name Morgan Stanley Institutional Fund, Inc. The Fund   
filed a registration statement with the SEC registering itself as an open-end   
management investment company offering diversified and non-diversified series   
under the 1940 Act and its shares under the 1933 Act, as amended, and commenced 
operations on November 15, 1988. Effective December 1, 1998, the Fund changed   
its name to Morgan Stanley Dean Witter Institutional Fund, Inc.                 

DESCRIPTION OF SHARES AND VOTING RIGHTS                                         

The Fund's Amended and Restated Articles of Incorporation permit the Directors  
to issue 40 billion shares of common stock, par value $.001 per share, from an  
unlimited number of classes or series of shares. The Fund currently consists of 
shares of thirty Portfolios. Each Portfolio offers Class A and Class B shares   
except that the Municipal Money Market and International Small Cap Portfolios   
offer only Class A shares.                                                      

The shares of each Portfolio of the Fund are fully paid and nonassessable, and  
have no preference as to conversion, exchange, dividends, retirement or other   
features. Portfolio shares have no pre-emptive rights. The shares of the Fund   
have non-cumulative voting rights, which means that the holders of more than 50%
of the shares voting for the election of Directors can elect 100% of the        
Directors if they choose to do so. Shareholders are entitled to one vote for    
each full share held (and a fractional vote for each fractional share held),    
then standing in their name on the books of the Fund.                           

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS                                       

The Fund's policy is to distribute substantially all of each Portfolio's net    
investment income, if any. The Fund may also distribute any net realized capital
gains in the amount and at the times that will avoid both income (including     
taxable gains) taxes on it and the imposition of the federal excise tax on      
income and capital gains (see "Taxes"). However, the Fund may also choose to    
retain net realized capital gains and pay taxes on such gains. The amounts of   
any income dividends or capital gains distributions cannot be predicted.        
                                                                      41

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Any dividend or distribution paid shortly after the purchase of shares of a     
Portfolio by an investor may have the effect of reducing the per share net asset
value of that Portfolio by the per share amount of the dividend or distribution.
Furthermore, such dividends or distributions, although in effect a return of    
capital, are subject to income taxes for shareholders subject to tax as set     
forth herein and in the applicable Prospectus.                                  

As set forth in the Prospectuses, unless you elect otherwise in writing, all    
dividends and capital gains distributions for a class of shares are             
automatically reinvested in additional shares of the same class of the Portfolio
at net asset value (as of the business day following the record date). This     
automatic reinvestment of dividends and distributions will remain in effect     
until you notify the Fund in writing at least three days prior to the record    
date that either the Income Option (income dividends in cash and capital gains  
distributions reinvested in shares at net asset value) or the Cash Option (both 
income dividends and capital gains distributions in cash) has been elected.     

TAXES 

The following is only a summary of certain additional federal income tax        
considerations generally affecting the Fund, Portfolios and their shareholders  
that are not described in the Prospectuses. No attempt is made to present a     
detailed explanation of the federal, state or local tax treatment of the Fund,  
Portfolios or shareholders, and the discussion here and in the Prospectuses is  
not intended to be a substitute for careful tax planning.                       

The following general discussion of certain federal income tax consequences is  
based on the Internal Revenue Code of 1986, as amended (the "Code") and the     
regulations issued thereunder as in effect on the date of this Statement of     
Additional Information. New legislation, as well as administrative changes or   
court decisions, may significantly change the conclusions expressed herein, and 
may have a retroactive effect with respect to the transactions contemplated     
herein.                                                                         

Each Portfolio within the Fund is generally treated as a separate corporation   
for federal income tax purposes. Thus, the provisions of the Code generally will
be applied to each Portfolio separately, rather than to the Fund as a whole.    

REGULATED INVESTMENT COMPANY QUALIFICATION                                      

Each Portfolio intends to qualify and elect to be treated for each taxable year 
as a regulated investment company ("RIC") under Subchapter M of the Code. In    
order to so qualify, each Portfolio must, among other things, (i) derive at     
least 90% of its gross income each taxable year from dividends, interest,       
payments with respect to securities loans, gains from the sale or other         
disposition of stock, securities or foreign currencies, and other income derived
with respect to its business of investing in such stock securities or           
currencies, including, generally, certain gains from options, futures and       
forward contracts; and (ii) diversify its holdings so that, at the end of each  
fiscal quarter of the Portfolio's taxable year, (a) at least 50% of the market  
value of the Portfolio's total assets is represented by cash and cash items,    
U.S. Government securities, securities of other RICs, and other securities, with
such other securities limited, in respect to any one issuer, to an amount not   
greater than 5% of the value of the Portfolio's total assets or 10% of the      
outstanding voting securities of such issuer, and (b) not more than 25% of the  
value of its total assets are invested in the securities (other than U.S.       
Government securities or securities of other RICs) of any one issuer or two or  
more issuers which the Portfolio controls and which are engaged in the same,    
similar, or related trades or business. For purposes of the 90% of gross income 
requirement described above, foreign currency gains which are not directly      
related to a Portfolio's principal business of investing in stock or securities 
(or options or futures with respect to stock or securities) may be excluded from
income that qualifies under the 90% requirement. For purposes of the            
diversification requirement described above, the Portfolio will not be treated  
as in violation of such requirement as a result of a discrepency between the    
value of its various investments and the diversification percentages described  
above, unless such discrepancy exists immediately following the acquisition of  
any security or other property and is wholly or partly the result of such       
acquisition. Moreover, even in the event of noncompliance with the              
diversification requirement as of the end of any given quarter, the Portfolio is
permitted to cure the violation by eliminating the discrepancy causing such     
noncompliance within a period of 30 days from the close of the relevant quarter.

In addition to the requirements described above, in order to qualify, a         
Portfolio must distribute at least 90% of its net investment income (which      
generally includes dividends, taxable interest, and the excess of net short-term
capital gains over net long-term capital losses less operating expenses) and at 
least 90% of its net tax-exempt interest income, for each tax year, if any, to  
its shareholders. If a Portfolio meets all of the RIC requirements, it will not 
be subject to federal income tax on any of its net investment income or capital 
gains that it distributes to shareholders.                                      

If a Portfolio fails to qualify as a RIC for any taxable year, all of its net   
income will be subject to tax at regular corporate rates (whether or not        
distributed to shareholders), and its distributions (including capital gains    
distributions) will be taxable as ordinary income dividends to its shareholders 
to the extent of the Portfolio's current and accumulated earnings and profits,  
and will be eligible for the corporate dividends-received deduction for         
corporate shareholders.                                                         

GENERAL TAX TREATMENT OF QUALIFYING RICS AND SHAREHOLDERS                       

Each Portfolio intends to distribute substantially all of its net investment    
income (including, for this purpose, net short-term capital gain) to            
shareholders. Dividends from a Portfolio's net investment income are taxable to 
shareholders as ordinary income, whether received in cash or in additional      
shares. Such dividends paid by a Portfolio generally will only qualify for the  

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dividends-received deduction for corporate shareholders to the extent of the    
Portfolio's qualifying dividend income and to the extent designated by the      
Portfolio. Each Portfolio will report annually to its shareholders the amount of
dividend income qualifying for such treatment.                                  

Each Portfolio will decide whether to distribute or to retain all or part of any
net capital gains (the excess of net long-term capital gains over net short-term
capital losses) in any year for reinvestment. Distributions of net capital gain 
are taxable to shareholders as a long-term capital gain regardless of how long  
shareholders have held their shares. Each Portfolio will send reports annually  
to shareholders regarding the federal income tax status of all distributions    
made during the preceding year. If any such gains are retained, the Portfolio   
will pay federal income tax thereon, and, if the Portfolio makes an election,   
the shareholders will include such undistributed gains in their income, will    
increase their tax basis in Portfolio shares by 65% of the amount included in   
their income and will be able to claim their share of the tax paid by the       
Portfolio as a refundable credit.                                               

Dividends and other distributions declared by a Portfolio in October,           
November or December of any year and payable to shareholders of record on a date
in such month will be deemed to have been paid by the Portfolio and received by 
shareholders on December 31 of that year if the distributions are paid by the   
Portfolio at any time during the following January.                             

A gain or loss realized by a shareholder on the sale, exchange or redemption of 
shares of a Portfolio held as a capital asset will be capital gain or loss, and 
such gain or loss will be long-term if the holding period for the shares exceeds
12 months and otherwise will be short-term. Any loss realized on a sale,        
exchange or redemption of shares of a Portfolio will be disallowed to the extent
the shares disposed of are replaced within the 61-day period beginning 30 days  
before and ending 30 days after the shares are disposed of. Any loss realized by
a shareholder on the disposition of shares held 6 months or less is treated as a
long-term capital loss to the extent of any distributions of net long-term      
capital gains received by the shareholder with respect to such shares or any    
inclusion of undistributed capital gain with respect to such shares.            

The conversion of Class A shares to Class B shares will not be a taxable event  
to the shareholder.                                                             

Each Portfolio will generally be subject to a nondeductible 4% federal excise   
tax to the extent it fails to distribute by the end of any calendar year at     
least 98% of its ordinary income for that year and 98% of its capital gain net  
income (the excess of short- and long-term capital gains over short- and        
long-term capital losses) for the one-year period ending on October 31 of that  
year, plus certain other amounts. Each Portfolio intends to make sufficient     
distributions or deemed distributions of its ordinary income and capital gain   
net income (the excess of short-term and long-term capital gain over short-term 
and long-term capital losses, including any available capital loss              
carryforwards), prior to the end of each calendar year to avoid liability for   
federal excise tax.                                                             

The Fund may be required to withhold and remit to the U.S. Treasury 31% of any  
dividends, capital gains distributions and redemption proceeds paid to any      
individual or certain other non-corporate shareholder (i) who has failed to     
provide a correct taxpayer identification number (generally an individual's     
social security number or non-individual's employer identification number) on   
the Account Registration Form; (ii) who is subject to backup withholding by the 
Internal Revenue Service; or (iii) who has not certified to the Fund that such  
shareholder is not subject to backup withholding. This backup withholding is not
an additional tax, and any amounts withheld may be credited against the         
shareholder's ultimate U.S. tax liability.                                      

As discussed above, in order for each Portfolio to continue to qualify for      
federal income tax treatment as a RIC, at least 90% of its gross income for a   
taxable year must be derived from certain qualifying income, including          
dividends, interest, income derived from loans of securities, and gains from the
sale or other disposition of stock, securities or foreign currencies, or other  
related income, including gains from options, futures and forward contracts,    
derived with respect to its business of investing in stock, securities or       
currencies. Any net gain realized from the closing out of futures contracts will
therefore generally be qualifying income for purposes of the 90% requirement.   

SPECIAL RULES FOR CERTAIN FOREIGN CURRENCY AND DERIVATIVES TRANSACTIONS         

In general, gains from foreign currencies and from foreign currency options,    
foreign currency futures and forward foreign exchange contracts relating to     
investments in stock, securities or foreign currencies are currently considered 
to be qualifying income for purposes of determining whether the Portfolio       
qualifies as a RIC. It is unclear, however, who will be treated as the issuer of
certain foreign currency instruments or how foreign currency options, futures,  
or forward foreign currency contracts will be valued for purposes of the        
regulated investment company diversification requirements applicable to the     
Portfolio. The Portfolio may request a private letter ruling from the Internal  
Revenue Service on some or all of these issues.                                 

Under Code Section 988, special rules are provided for certain transactions in a
foreign currency other than the taxpayer's functional currency (i.e., unless    
certain special rules apply, currencies other than the U.S. dollar). In general,
foreign currency gains or losses from forward contracts, from futures contracts 
that are not "regulated futures contracts", and from unlisted options will be   
treated as ordinary income or loss under Code Section 988. Also, certain foreign
exchange gains or losses derived with respect to foreign fixed-income securities
are also subject to Section 988 treatment. In general, therefore, Code Section  
988 gains or losses will increase or decrease the amount of the Portfolio's     
investment company taxable income available to be distributed to shareholders as
ordinary income, rather than increasing or decreasing the amount of the         
Portfolio's net capital gain.                                                   

A Portfolio's investment in options, swaps and related transactions, futures    
contracts and forward contracts, options on futures contracts and stock indices 
and certain other securities, including transactions involving actual or deemed 
short sales or foreign exchange gains or losses are subject to many complex and 
special tax rules. For example, over-the-counter options on debt                
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securities and equity options, including options on stock and on narrow-based   
stock indexes, will be subject to tax under Section 1234 of the Code, generally 
producing a long-term or short-term capital gain or loss upon exercise, lapse or
closing out of the option or sale of the underlying stock or security. By       
contrast, a Portfolio's treatment of certain other options, futures and forward 
contracts entered into by a Portfolio is generally governed by Section 1256 of  
the Code. These "Section 1256" positions generally include listed options on    
debt securities, options on broad-based stock indexes, options on securities    
indexes, options on futures contracts, regulated futures contracts and certain  
foreign currency contracts and options thereon.                                 

When a Portfolio holds options or futures contracts which substantially diminish
their risk of loss with respect to other positions (as might occur in some      
hedging transactions), this combination of positions could be treated as a      
"straddle" for tax purposes, resulting in possible deferral of losses,          
adjustments in the holding periods of Portfolio securities and conversion of    
short-term capital losses into long-term capital losses. Certain tax elections  
exist for mixed straddles (i.e., straddles comprised of at least one Section    
1256 position and at least one non-Section 1256 position) which may reduce or   
eliminate the operation of these straddle rules.                                

A Section 1256 position held by a Portfolio will generally be marked-to-market  
(i.e. treated as if it were sold for fair market value) on the last business day
of the Fund's fiscal year, and all gain or loss associated with fiscal year     
transactions and mark-to-market positions at fiscal year end (except certain    
currency gain or loss covered by Section 988 of the Code) will generally be     
treated as 60% long-term capital gain or loss and 40% short-term capital gain or
loss. The effect of Section 1256 mark-to-market rules may be to accelerate      
income or to convert what otherwise would have been long-term capital gains into
short-term capital gains or short-term capital losses into long-term capital    
losses within a Portfolio. The acceleration of income on Section 1256 positions 
may require a Portfolio to accrue taxable income without the corresponding      
receipt of cash. In order to generate cash to satisfy the distribution          
requirements of the Code, a Portfolio may be required to dispose of portfolio   
securities that it otherwise would have continued to hold or to use cash flows  
from other sources. Any or all of these rules may, therefore, affect the amount,
character and timing of income earned and, in turn, distributed to shareholders 
by a Portfolio.                                                                 

SPECIAL TAX CONSIDERATIONS RELATING TO MUNICIPAL BOND AND MUNICIPAL MONEY MARKET
PORTFOLIOS                                                                  

Each of the Municipal Bond Portfolio and the Municipal Money Market Portfolio   
will qualify to pay "exempt-interest dividends" to its shareholders, provided   
that, at the close of each quarter of its taxable year, at least 50% of the     
value of its total assets consist of obligations the interest on which is exempt
from federal income tax. Current federal tax law limits the types and volume of 
bonds qualifying for federal income tax exemption of interest, which may have an
effect on the ability of these Portfolios to purchase sufficient amounts of     
tax-exempt securities to satisfy this requirement. Any loss on the sale or      
exchange of shares of the Municipal Bond Portfolio or the Municipal Money Market
Portfolio held for six months or less will be disallowed to the extent of any   
exempt-interest dividends received by the selling shareholder with respect to   
such shares.                                                                    

In addition, for the Municipal Bond Portfolio and the Municipal Money Market    
Portfolio, exempt-interest dividends are excludable from a shareholder's gross  
income for regular Federal income tax purposes. Exempt-interest dividends may,  
nevertheless, be subject to the alternative minimum tax imposed by Section 55 of
the Code (the "Alternative Minimum Tax"). The Alternative Minimum Tax is imposed
at the rate of up to 28% in the case of non-corporate taxpayers and at the rate 
of 20% in the case of corporate taxpayers, to the extent it exceeds the         
taxpayer's regular tax liability. The Alternative Minimum Tax may be affected by
the receipt of exempt-interest dividends in two circumstances. First,           
exempt-interest dividends derived from certain "private activity bonds" issued  
after August 7, 1986, will generally be an item of tax preference and therefore 
potentially subject to the Alternative Minimum Tax. The Portfolios intend, when 
possible, to avoid investing in private activity bonds. Second, in the case of  
exempt-interest dividends received by corporate shareholders, all               
exempt-interest dividends, regardless of when the bonds from which they are     
derived were issued or whether they are derived from private activity bonds,    
will be included in the corporation's "adjusted current earnings," as defined in
Section 56(g) of the Code, in calculating the corporation's alternative minimum 
taxable income for purposes of determining the Alternative Minimum Tax.         

The percentage of income that constitutes exempt-interest dividends will be     
determined for each year for the Municipal Bond Portfolio and the Municipal     
Money Market Portfolio and will be applied uniformly to all dividends declared  
with respect to the Portfolios during that year. This percentage may differ from
the actual percentage for any particular day.                                   

Interest on indebtedness incurred or continued by shareholders to purchase or   
carry shares of the Municipal Bond Portfolio or the Municipal Money Market      
Portfolio will be limited for federal income tax purposes to the extent that any
portion of such Portfolio's distributions consist of exempt-interest dividends. 
The deduction otherwise allowable to property and casualty insurance companies  
for "losses incurred" will be reduced by an amount equal to a portion of        
exempt-interest dividends received or accrued during any taxable year. Foreign  
corporations engaged in a trade or business in the United States will be subject
to a "branch profits tax" on their "dividend equivalent amount" for the taxable 
year, which will include exempt-interest dividends. Certain Subchapter S        
corporations may also be subject to taxes on their "passive investment income," 
which could include exempt-interest dividends. Up to 85% of the Social Security 
benefits or railroad retirement benefits received by an individual during any   
taxable year will be included in the gross income of such individual if the     
individual's "modified adjusted gross income" (which includes exempt-interest   
dividends) plus one-half of the Social Security benefits or railroad retirement 
benefits received by such individual during that taxable year exceeds the base  
amount described in Section 86 of the Code.                                     

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Entities or persons who are "substantial users" (or persons related to          
"substantial users") of facilities financed by industrial development bonds or  
private activity bonds should consult their tax advisors before purchasing      
shares of the Municipal Bond Portfolio or the Municipal Money Market Portfolio. 
"Substantial user" is defined generally for these purposes as including a       
"non-exempt person" who regularly uses in trade or business a part of a facility
financed from the proceeds of such bonds.                                       

Issuers of bonds purchased by the Municipal Bond Portfolio (or the beneficiary  
of such bonds) may have made certain representations or covenants in connection 
with the issuance of such bonds to satisfy certain requirements of the Code that
must be satisfied subsequent to the issuance of such bonds. Investors should be 
aware that exempt-interest dividends derived from such bonds may become subject 
to federal income taxation retroactively to the date thereof if such            
representations are determined to have been inaccurate or if the issuer of such 
bonds (or the beneficiary of such bonds) fails to comply with such covenants.   

The state and local tax consequences of an investment in either the Municipal   
Bond or Municipal Money Market Portfolios may differ from the federal           
consequences described above and shareholders are urged to consult their tax    
advisers with respect to such aspects.                                          

SPECIAL TAX CONSIDERATIONS RELATING TO FOREIGN INVESTMENTS                      

Gains or losses attributable to foreign currency contracts, or to fluctuations  
in exchange rates that occur between the time a Portfolio accrues interest or   
other receivables or accrues expenses or other liabilities denominated in a     
foreign currency and the time the Portfolio actually collects such receivables  
or pays such liabilities are treated as ordinary income or ordinary loss to the 
Portfolio. Similarly, gains or losses on disposition of debt securities         
denominated in a foreign currency attributable to fluctuations in the value of  
the foreign currency between the date of acquisition of the security and the    
date of disposition also are treated as ordinary gain or loss to the Portfolio. 
These gains or losses increase or decrease the amount of a Portfolio's net      
investment income available to be distributed to its shareholders as ordinary   
income.                                                                         

It is expected that each Portfolio will be subject to foreign withholding taxes 
with respect to its dividend and interest income from foreign countries, and a  
Portfolio may be subject to foreign income taxes with respect to other income.  
So long as more than 50% in value of a Portfolio's total assets at the close of 
the taxable year consists of stock or securities of foreign corporations, the   
Portfolio may elect to treat certain foreign income taxes imposed on it for U.S.
federal income tax purposes as paid directly by its shareholders. A Portfolio   
will make such an election only if it deems it to be in the best interest of its
shareholders and will notify shareholders in writing each year if it makes an   
election and of the amount of foreign income taxes, if any, to be treated as    
paid by the shareholders. If a Portfolio makes the election, shareholders will  
be required to include in income their proportionate share of the amount of     
foreign income taxes treated as imposed on the Portfolio and will be entitled to
claim either a credit (subject to the limitations discussed below) or, if they  
itemize deductions, a deduction, for their shares of the foreign income taxes in
computing their federal income tax liability.                                   

Certain foreign governments levy withholding or other taxes on dividend and     
interest income. Although in some countries a portion of these taxes are        
recoverable, the non-recovered portion of foreign withholding taxes will reduce 
the income received from investments in such countries. Except in the case of   
the Global Equity, European Equity, Japanese Equity, Asian Equity, Global Fixed 
Income, International Fixed Income, International Magnum, International Small   
Cap, Latin American, Active International Allocation, European Real Estate,     
Asian Real Estate, Emerging Markets, Emerging Markets Debt, and China Growth    
Portfolios, it is not expected that a Portfolio or its shareholders would be    
able to claim a credit for U.S. tax purposes with respect to any such foreign   
taxes. However, these foreign withholding taxes may not have a significant      
impact on such Portfolios, considering that each Portfolio's investment         
objective is to seek long-term capital appreciation and any dividend or interest
income should be considered incidental.                                         

Shareholders who choose to utilize a credit (rather than a deduction) for       
foreign taxes will be subject to a number of complex limitations regarding the  
availability and utilization of the credit. Because of these limitations,       
shareholders may be unable to claim a credit for the full amount of their       
proportionate shares of the foreign income taxes paid by a Portfolio.           
Shareholders are urged to consult their tax advisors regarding the application  
of these rules to their particular circumstances.                               

TAXES AND FOREIGN SHAREHOLDERS                                                  

Taxation of a shareholder who, as to the United States, is a nonresident alien  
individual, a foreign trust or estate, a foreign corporation, or a foreign      
partnership ("Foreign Shareholder") depends on whether the income from the      
Portfolio is "effectively connected" with a U.S. trade or business carried on by
such shareholder.                                                               

If the income from a Portfolio is not effectively connected with a U.S. trade or
business carried on by a Foreign Shareholder, distributions of net investment   
income plus the excess of net short-term capital gains over net long-term       
capital losses will be subject to U.S. withholding tax at the rate of 30% (or   
such lower treaty rate as may be applicable) upon the gross amount of the       
dividend. Furthermore, Foreign Shareholders will generally be exempt from U.S.  
federal income tax on gains realized on the sale of shares of a Portfolio,      
distributions of net long-term capital gains, and amounts retained by the Fund  
that are designated as undistributed capital gains.                             
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If the income from a Portfolio is effectively connected with a U.S. trade or    
business carried on by a Foreign Shareholder, then distributions from the       
Portfolio and any gains realized upon the sale of shares of the Portfolio, will 
be subject to U.S. federal income tax at the rates applicable to U.S. citizens  
and residents or domestic corporations.                                         

A Portfolio may be required to withhold U.S. federal income tax on distributions
that are otherwise exempt from withholding tax (or taxable at a reduced treaty  
rate) unless the Foreign Shareholder complies with Internal Revenue Service     
certification requirements.                                                     

The tax consequences to a Foreign Shareholder entitled to claim the benefits of 
an applicable tax treaty may differ from those described here. Furthermore,     
Foreign Shareholders are strongly urged to consult their own tax advisors with  
respect to the particular tax consequences to them of an investment in a        
Portfolio, including the potential application of the provisions of the Foreign 
Investment in Real Estate Property Tax Act of 1980, as amended.                 

STATE AND LOCAL TAX CONSIDERATIONS                                              

Rules of U.S. state and local taxation of dividend and capital gains from       
regulated investment companies often differ from the rules for U.S. federal     
income taxation described above. Shareholders are urged to consult their tax    
advisors as to the consequences of these and other U.S. state and local tax     
rules regarding an investment in the Fund.                                      

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 

CONTROL PERSONS                                                                 

The following shareholders may be deemed to control the following Portfolios    
because they are record owners of 25% or more of the outstanding shares of that 
Portfolio of the Fund as of April 14, 2000. For each control person, the        
following table provides the name, address and percentage of outstanding shares 
of such Portfolio owned.                                                        

SMALL COMPANY GROWTH PORTFOLIO: Fidelity Investments Institutional, Operations  
Co. FIIOC as Benefit Plans, 100 Magellan Way KW1C, Covington, KY 41015, owned   
42.07% of such Portfolio's total outstanding shares.                            

VALUE EQUITY PORTFOLIO: Morgan Stanley Asset Mgmt for the Account of Hubbell    
Inc., Attn: John Larn, 22nd Floor, 1221 Avenue of the Americas, New York, NY    
10020, owned 35.73% of such Portfolio's total outstanding shares.               

GLOBAL FIXED INCOME PORTFOLIO: Northern Trust Company as Custodian FBO The Lund 
Foundation, P.O. Box 92956, Chicago, IL 60675, owned 35.52% of such Portfolio's 
total outstanding shares.                                                       

EUROPEAN REAL ESTATE PORTFOLIO: Trustees of Dartmouth College, One Rope Ferry   
Road, Hanover, NH 03755, owned 34.20% of such Portfolio's total outstanding     
shares.                                                                         

INTERNATIONAL MAGNUM PORTFOLIO: Bankers Trust TTEE for Harris Corp. Retirement  
Plan, 1025 W. Nasa Boulevard, Boston, MA 02110, owned 28.10% of such Portfolio's
outstanding shares.                                                             

GLOBAL EQUITY PORTFOLIO: Fidelity Investments Inst'l, Operations Co. FIIOC as   
Benefit Plans, 100 Magellan Way KW1C, Covington, KY 41015, owned 34.93% of such 
Portfolio's total outstanding shares.                                           

EMERGING MARKETS PORTFOLIO: Morgan Stanley & Co. 401k Pension Plan, Cust. c/o   
Northern Trust Co. Cust., 770 Broadway, New York, NY 10003 owned 51.33% of such 
Portfolio's total outstanding shares.                                           

ASIAN REAL ESTATE PORTFOLIO: Morgan Stanley Asset Management Inc., Attn: Elisa  
Divito, 1221 Avenue of the Americas, New York, NY 10020, owned 64.32% of such   
Portfolio's total outstanding shares.                                           

ASIAN EQUITY PORTFOLIO: Morgan Stanley & Co. 401k Pension Plan, Cust c/o        
Northern Trust Co. Cust, 770 Broadway, New York, NY 10003, owned 31.80% of such 
Portfolio's total outstanding shares.                                           

FIXED INCOME PORTFOLIO: Morgan Stanley & Co. 401k Pension Plan, Cust c/o        
Northern Trust Co. Cust, 770 Broadway, New York, NY 10003, owned 31.23% of such 
Portfolio's total outstanding shares.                                           

FOCUS EQUITY PORTFOLIO: Morgan Stanley & Co. 401k Pension Plan, Cust c/o        
Northern Trust Co. Cust, 770 Broadway, New York, NY 10003, owned 31.06% of such 
Portfolio's total outstanding shares.                                           

EQUITY PLUS PORTFOLIO: The Flinn Foundation, Northern Trust Co., Master Trust   
Dept., 7th Fl., P.O. Box 92984, Chicago, IL 60675, owned 26.47% of such         
Portfolio's total outstanding shares.                                           

The Institute for Genomic Research, 9712 Medical Center Dr., Rockville, MD      
20850, owned 27.85% of such Portfolio's total outstanding shares.               

PRINCIPAL HOLDERS                                                               

The following shareholders are record owners of 5% or more of the outstanding   
shares of any class of Portfolio shares as of April 14, 2000. For each principal
holder, the following table provides the name, address and percentage of        
outstanding shares of such classes owned.                                       

EUROPEAN REAL ESTATE PORTFOLIO: Trustees of Dartmouth College, One Rope Ferry   
Road, Hanover, NH 03755, owned 41.76% of such Portfolio's total outstanding     
Class A shares.                                                                 

The C J Mack Foundation, 91 Sunset Ln, Rye, NY 10580, owned 12.30% of such      
Portfolio's total outstanding Class A shares.                                   

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Florence Lloyd Jones Barnett Charitabe, Remainder Unitrust, 6120 South Yale,    
Suite 350, Tulsa, OK 74136, owned 8.78% of such Portfolio's total outstanding   
Class A shares.                                                                 

The Cathryn R Fortune Char, Remainder Unitrust Of 5/15/98, 5505 Lake Wa Blvd Ne 
Unit 1D, Kirkland, WA 98033-7379, owned 17.86% of such Portfolio's total        
outstanding Class B shares.                                                     

Harold M Mayer Family Trust, Dtd 7/16/74, Attn Barbara Pope, 115 S Lasalle St,  
Suite 2285, Chicago, IL 60603-3801, owned 14.53% of such Portfolio's total      
outstanding Class B shares.                                                     

Irene R Miller & Anoush Khoshkish, Apt 10e, 186 Riverside Dr, Manhattan,        
NY 10024-1007, owned 11.75% of such Portfolio's total outstanding Class B       
shares.                                                                         

The 1991 Kidder Family Trust, FBO Kevin C Kidder, 900 Knollwood Drive, Santa    
Barbara, CA 93108-1433, owned 7.96% of such Portfolio's total outstanding       
Class B shares.                                                                 

The 1991 Kidder Family Trust, FBO Karin E Kidder, 900 Knollwood Drive, Santa    
Barbara, CA 93108-1433, owned 6.17% of such Portfolio's total outstanding       
Class B shares.                                                                 

Bernard M Madej and Elaine M Madej Jtwros, 10831 Oakland Drive, Orland Park,    
IL 60462, owned 5.80% of such Portfolio's total outstanding Class B shares.     

Ned McCarthy Trust, 3 Sugar Maple Ln, Hanover, NH 03755, owned 5.70% of such    
Portfolio's total outstanding Class B shares.                                   

Shimer And Fortune Chart Rem, Unitrust Of 2/6/98 John Shimer, 5505 Lk Wa        
Blvd NE Unit 1D, Houghton, WA 98033-7376, owned 5.70% of such Portfolio's total 
outstanding Class B shares.                                                     

John A Karoly 1989 Declaration Of Trust, 1420 N Lake Shore Dr, Chicago,         
IL 60610, owned 5.60% of such Portfolio's total outstanding Class B shares.     

Arthur H Bilger TTEE FBO The Bilger Foundation, 480 Bel Air Rd, Los Angeles,    
CA 90077, owned 5.16% of such Portfolio's total outstanding Class B shares.     

INTERNATIONAL MAGNUM PORTFOLIO: Fidelity Investments Inst'l Operations Co FIIOC 
as Benefit Plans, 100 Magellan Way KW1C, Covington, KY 41015, owned 67.66% of   
such Portfolio's total outstanding Class B shares.                              

Bankers Trust TTEE, Mailstop 3048, 1025 W Nasa Blvd, Boston, MA 02110, owned    
32.28% of such Portfolio's total outstanding Class A shares.                    

Bankers Trust as Trustee, Mailstop 3048, 100 Plaza One Plz, Jersey City,        
NJ 07311-3999, owned 15.16% of such Portfolio's total outstanding Class A       
shares.                                                                         

Norwest Bank Minnesota NA, FBO Lutheran Brotherhood, PO Box 1533, Minneapolis,  
MN 55480, owned 12.04% of such Portfolio's total outstanding Class A shares.    

Strafe & Co, FAO SKL Investment Group LLC, PO Box 160, Westerville, OH 43086,   
owned 6.52% of such Portfolio's total outstanding Class A shares.               

MAC & Co. A/C 10260102926, Mutual Fund Operations, PO L Box 3198, Pittsburgh,   
PA 15230-3198, owned 5.04% of such Portfolio's total outstanding class A shares.

ACTIVE INTERNATIONAL PORTFOLIO: Resources Trust Co, Various IMS Customers, PO   
Box 3865, Englewood, CO 80155-3865, owned 63.30% of such Portfolio's total      
outstanding Class B shares.                                                     

The Trustees Of Columbia University, In The City Of New York, 475 Riverside Dr  
Ste 400, New York, NY 10115, owned 12.59% of such Portfolio's total outstanding 
Class A shares.                                                                 

Puerto Rico Telephone Company, Attn Felipe Piazza, 1500 Roosevelt Ave, San Juan,
owned 9.70% of such Portfolio's total outstanding Class A shares.               

Western Metal Industry, C/O Miller Anderson & Sherrerd, One Tower Bridge, West  
Conshohocken, PA 19428, owned 6.84% of such Portfolio's total outstanding       
Class A shares.                                                                 

University Of Illinois Foundation, 1305 West Green St, Urbana, IL 61801, owned  
5.06% of such Portfolio's total outstanding Class A shares.                     

ASIAN EQUITY PORTFOLIO: James L & Sarah M Barksdale, Ttees Jim & Sally          
Barksdale, Equity Acct/Attn Walter Denny, 800 Woodlands Pky Ste 118, Ridgeland, 
MS 39157-5216, owned 19.99% of such Portfolio's total outstanding Class B       
shares.                                                                         

Rosekrans Family Partnership, Ste 1940, 220 Montgomery St, San Francisco,       
CA 94104, owned 11.06% of such Portfolio's total outstanding Class B shares.    

W H OBrien, PO Box 9618, Amarillo, TX 79105-9618, owned 10.93% of such          
Portfolio's total outstanding Class B shares.                                   

The Pickwick Group Lp Intl, C/O Walter Denny, 800 Woodlands Pky, Ste 118,       
Ridgeland, MS 39157-5215, owned 6.66% of such Portfolio's total outstanding     
Class B shares.                                                                 

John David Barksdale, C/O Walter Denny, 800 Woodlands Pky Ste 118, Ridgeland, MS
39157-5216, owned 6.66% of such Portfolio's total outstanding Class B shares.   

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John Mobley -- Trading Acct, Stillhouse Canyon Office Park, 2801 W 35th St,     
Austin, TX 78703, owned 5.97% of such Portfolio's total outstanding Class B     
shares.                                                                         

Berl Bernhard & Karen Bernhard, TTEE FBO The Berl Bernhard, 1693 Epping         
Farms Ln, Annapolis, MD 21401, owned 5.57% of such Portfolio's total outstanding
Class B shares.                                                                 

Morgan Stanley & Co 401k Pension Plan, Cust c/o Northern Trust Co Cust, 770     
Broadway, New York, NY 10003, owned 32.63% of such Portfolio's total outstanding
Class A shares.                                                                 

Association De Biefsaissance Et De, Retraite Des Pollciers De La Communaue, 480 
Gilford Street, Suite 200, Montreal, owned 23.28% of such Portfolio's total     
outstanding Class A shares.                                                     

Barton M Biggs, 390 Riversville Rd, Greenwich, CT 06830, owned 5.86% of such    
Portfolio's total outstanding Class A shares.                                   

EQUITY GROWTH PORTFOLIO: Bankers Trust Co as Custodian, for Marriott            
International Inc, and Savings Plan and Trust, 100 Plaza One Attn Donna         
Dekowski, Jersey City USA, NJ 07311-3999, owned 32.36% of such Portfolio's total
outstanding Class B shares.                                                     

Fidelity Investments Inst'l, Operations Co FIIOC As Benefit Plans, 100 Magellan 
Way KW1C, Covington, KY 41015, owned 26.22% of such Portfolio's total           
outstanding Class B shares.                                                     

Manufacturers Life Insurance Co USA, 250 Bloor Street East 7th Floor, Toronto,  
Ontario M4W 1E5, owned 22.84% of such Portfolio's total outstanding Class B     
shares.                                                                         

FNB Nominee Co, C/O First Commonwealth Trust, 614 Philadelphia St, Indiana,     
PA 15701, owned 6.02% of such Portfolio's total outstanding Class B shares.     

Fidelity Investments Inst'l Operations Co FIIOC As Benefit Plans, 100 Magellan  
Way Kw1c, Covington, KY 41015, owned 16.54% of such Portfolio's total           
outstanding Class A shares.                                                     

Morgan Stanley & Co 401K Pension Plan, Cust c/o Northern Trust Co Cust, 770     
Broadway, New York, NY 10003, owned 15.96% of such Portfolio's total outstanding
Class A shares.                                                                 

Fidelity Management Trust Company as Trustee For GTE Master Mail Zone M3, 82    
Devonshire St, Boston, MA 02109, owned 14.10% of such Portfolio's total         
outstanding Class A shares.                                                     

The Northern Trust Co FBO Enron Savings Plan, PO Box 92956, Chicago, IL 60675,  
owned 5.46% of such Portfolio's total outstanding Class A shares.               

Fleet National Bank, Attn 0001396250, PO Box 92800, Rochester, NY 14692-8900,   
owned 5.12% of such Portfolio's total outstanding Class A shares.               

SMALL COMPANY GROWTH PORTFOLIO: Fidelity Investments Inst'l, Operations Co FIIOC
as Benefit Plans. 100 Magellan Way KW1C, Covington, KY 41015, owned 94.62% of   
such Portfolio's total outstanding Class B shares.                              

Factory Mutual Insurance Company, Attn Michael D Bank, 225 Wyman Street PO Box  
9198, Waltham, MA 02454-9198, owned 39.54% of such Portfolio's total outstanding
Class A shares.                                                                 

Morgan Stanley Asset Mgmt For The Account Of Hubbell Inc, Attn John Lam 22nd    
Floor, 1221 Avenue Of The Americas, New York, NY 10020, owned 9.89% of such     
Portfolio's total outstanding Class A shares.                                   

Iowa Municipal Fire & Police Public Benfit Plan, 2836 104 Street, Des Moines, IA
50322, owned 7.58% of such Portfolio's total outstanding Class A shares.        

Commonwealth of Pennsylvania Public School Employees Retirement, 5 North 5th St,
Harrisburg, PA 17101, owned 5.71% of such Portfolio's total outstanding Class A 
shares.                                                                         

INTERNATIONAL EQUITY PORTFOLIO: Memphis Commerce Square, Trust Division,        
c/o National Trust Bank of Commerce, One Commerce Square, Memphis, TN 38150,    
owned 45.41% of such Portfolio's total outstanding Class B shares.              

Memphis Commerce Square, Trust Division, C/O National Trust Bank Of Commerce,   
One Commerce Square, Memphis, TN 38150, owned 22.95% of such Portfolio's total  
outstanding Class B shares.                                                     

1st Source Bank TTEE, FBO Morris & Co, Attn John Seidl, P O Box 1602, South     
Bend, IN 46634-1602, owned 12.60% of such Portfolio's total outstanding Class B 
shares.                                                                         

Vanguard Fiduciary Trust Company, FBO Ball Corp Plan 91324, The Vanguard Group, 
PO BOX 2600 VM421, Valley Forge, PA 19482, owned 7.22% of such Portfolio's total
outstanding Class B shares.                                                     

VALUE EQUITY PORTFOLIO: Robbin L Dobson IRREV Family Trust, 1221 Avenue of The  
Americas, New York, NY 10020, owned 29.34% of such Portfolio's total outstanding
Class B shares.                                                                 

Everett R Dobson Irrev Fam Tr, Msdw Institutional Value Eqty, Attn Jon Klein,   
1221 Avenue Of The Americas, New York, NY 10020-1001, owned 28.13% of such      
Portfolio's total outstanding Class B shares.                                   

George N Fugelsang & Susan P Fugelsang, 17 Calhoun Dr, Greenwich, CT 06831,     
owned 20.56% of such Portfolio's total outstanding Class B shares.              

Jeffrey L Caruso & Melissa M Weiksnar Trustees of Weiksnar-Caruso Nominee,      
51 Robbins Dr, Carlisle, MA 01741, owned 5.96% of such Portfolio's total        
outstanding Class B shares.                                                     

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Susan Afeman Howell, 352 Delgado Dr, Baton Rouge, LA 70808-4723, owned 5.06% of 
such Portfolio's total outstanding Class B shares.                              

Morgan Stanley Asset Mgmt For The Account Of Hubbell Inc, Attn John Lam         
22nd Floor, 1221 Avenue Of The Americas, New York, NY 10020, owned 36.27% of    
such Portfolio's total outstanding Class A shares.                              

Frank R. Mori, 935 Park Ave. Apt. 16 A, Manhattan, NY 10028-0212, owned 5.21% of
such Portfolio's total outstanding class A shares.                              

FIXED INCOME PORTFOLIO: Carolyn S Young, 514 Chestertown St, Gaithersburgc,     
MD 20878-5734, owned 19.11% of such Portfolio's total outstanding Class B       
shares.                                                                         

Burton D Cohen, 3912 Zenith Ave South, Minneapolis, MN 55410-1169, owned 18.71% 
of such Portfolio's total outstanding Class B shares.                           

Mary Ann Young Brownsey Trust, Michael S Virgil Trustee Serritella PC, 330 N    
Wabash Ave 22nd Floor, Chicago, IL 60611-3603, owned 15.33% of such Portfolio's 
total outstanding Class B shares.                                               

Laverne M Brownsey Trust UA DTD, 5-23-79 as Amended Gale's, Burke Warren Mackay 
Serritella, 330 N Wabash Ave 22nd Floor, Chicago, IL 60611-3603, owned 12.22% of
such Portfolio's total outstanding Class B shares.                              

Joan H Giblichman IRA Chase Cust for Ms&Co, 3860 Mission Hills Rd S, Apt 209,   
Northbrook, IL 60062, owned 6.56% of such Portfolio's total outstanding Class B 
shares.                                                                         

Daniel D Moseley, 2 Southbury Dr, Columbia, SC 29209, owned 5.22% of such       
Portfolio's total outstanding Class B shares.                                   

Morgan Stanley & Co 401K Pension Plan Cust C/O Northern Trust Co Cust,          
770 Broadway, New York, NY 10003, owned 31.56% of such Portfolio's total        
outstanding Class A shares.                                                     

Fleet National Bank, Attn 0001396250, PO Box 92800, Rochester, NY 14692-8900,   
owned 10.80% of such Portfolio's total outstanding Class A shares.              

Morgan Stanley Dean Witter Foundation, Attn Kathleen Toohill 27th Floor,        
1221 Avenue Of The Americas, Manhattan, NY 10020-1001, owned 7.51% of such      
Portfolio's total outstanding Class A shares.                                   

Brooks School, Co Mr Frank Marino, N Andover, MA 01845, owned 5.52% of such     
Portfolio's total outstanding Class A shares.                                   

GLOBAL FIXED INCOME PORTFOLIO: David Brooks Gendron, 2 Montpelier Pl, London SW7
1HJ England, owned 71.18% of such Portfolio's total outstanding Class B shares. 

George N Fugelsang & Susan P Fugelsang, 17 Calhoun Dr, Greenwich CT 06831, owned
20.76% of such Portfolio's total outstanding Class B shares.                    

Anthony F Rowland, Colette H Rowland Jt Wros, c/o Cambrian Management, 1114 Ave 
of the Americas 2702, New York, NY 10036-7703, owned 8.06% of such Portfolio's  
total outstanding Class B shares.                                               

Northern Trust Company as Custodian FBO The Lund Foundation, P O Box 92956,     
Chicago, IL 60675, owned 35.86% of such Portfolio's total outstanding Class A   
shares.                                                                         

National Bulk Carriers, Attn David Fey, 605 Third Ave, 33rd Floor, New York,    
NY 10158, owned 13.73% of such Portfolio's total outstanding Class A shares.    

National Bank Of Commerce Trustee, Fbo National Bank Of Commerce Pension, C/O   
Nbc Trust Dept, One Commerce Square, Memphis, TN 38150, owned 11.95% of such    
Portfolio's total outstanding Class A shares.                                   

State Street Bank & Trust Co, Custodian For The Feinstein Family Fun M/S JQB7S, 
ATTN Steve Pinto, N Quincy, MA 02171, owned 5.15% of such Portfolio's total     
outstanding Class A shares.                                                     

GLOBAL EQUITY PORTFOLIO: Fidelity Investments Inst'l Operations Co FIIOC As     
Benefit Plans, 100 Magellan Way KW1C, Covington, KY 41015, owned 80.82% of such 
Portfolio's total outstanding Class B shares.                                   

Balsa & Co, c/o Chase Manhattan Bank, P O Box 1768, New York, NY 10163-1768,    
owned 16.09% of such Portfolio's total outstanding Class A shares.              

Fleet National Bank, Attn 0001396250, Po Box 92800, Rochester, NY 14692-8900,   
owned 8.76% of such Portfolio's total outstanding Class A shares.               

CIBC Mellon Global Securities, Jayvee And Co, 2nd Floor, 320 Bay St, Toronto,   
owned 8.29% of such Portfolio's total outstanding Class A shares.               

Fidelity Investments Inst'l Operations Co FIIOC as Benefit Plans, 100 Magellan  
Way KW1C, Covington, KY 41015, owned 6.81% of such Portfolio's total outstanding
Class A shares.                                                                 

National Fincl Services, 200 Liberty St., New York, NY 10281, owned 12.01% of   
such Portfolio's total outstanding class A shares.                              

EMERGING MARKETS PORTFOLIO: Fidelity Investments Inst'l Operations Co FIIOC As  
Benefit Plans, 100 Magellan Way KW1C, Covington, KY 41015, owned 35.10% of such 
Portfolio's total outstanding Class B shares.                                   

Capinco, C/O Firstar Trust Company, Po Box 1787, Milwaukee, WI 53201-1787, owned
15.47% of such Portfolio's total outstanding Class B shares.                    

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Morgan Stanley & Co 401K Pension Plan, Cust c/o Northern Trust Co Cust, 770     
Broadway, New York, NY 10003, owned 5.11% of such Portfolio's total outstanding 
Class A shares.                                                                 

HIGH YIELD PORTFOLIO: Universal Computer Consulting Holding Inc, 300 Delaware   
Ave Ste 1704, Wilmington, DE 19801-1612, owned 37.57% of such Portfolio's total 
outstanding Class B shares.                                                     

Blake Hogan And Shawn Hogan Jttic-High Yield A/C, 30 Farnham Park, Houston,     
TX 77024-7501, owned 5.51% of such Portfolio's total outstanding Class B shares.

Morgan Stanley & Co 401K Pension Plan, Cust c/o Northern Trust Co Cust, 770     
Broadway, New York, NY 10003, owned 28.65% of such Portfolio's total outstanding
Class A shares.                                                                 

Morgan Stanley & Co Pension Fd, C/O Northern Trust Co Cust, 770 Broadway, New   
York, NY 10003, owned 9.50% of such Portfolio's total outstanding Class A       
shares.                                                                         

EUROPEAN EQUITY PORTFOLIO: Wayne Gretzky Trustee Of The 650 North Sepulveda     
Blvd, Los Angeles, CA 90049, owned 25.64% of such Portfolio's total outstanding 
Class B shares.                                                                 

The Pickwick Group LP Intl C/O Walter Denny, 800 Woodlands Pky, Ste 118,        
Ridgeland, MS 39157-5215, owned 10.43% of such Portfolio's total outstanding    
Class B shares.                                                                 

Karen Zateslo Gray Cust For John David Gray Under Il Ugma Three First National  
Plaza, 70 W Madison St Suite 2350, Chicago, IL 60603, owned 8.52% of such       
Portfolio's total outstanding Class B shares.                                   

Deborah Meredith, 1386 Pritchett Ct, Los Altos, CA 94024-5713, owned 8.06% of   
such Portfolio's total outstanding Class B shares.                              

Christopher S Ruisi, 11 Colts Dr, Holmdel, NJ 07733, owned 7.20% of such        
Portfolio's total outstanding Class B shares.                                   

Dr Martin B Meyerson, Acct II International, 1601 Landfall Dr, Wilmington,      
NC 28405-4255, owned 6.96% of such Portfolio's total outstanding Class B shares.

Steve Vesce & Carol A Vesce Jtwros Equity Account 8 Middle Hollow Rd, Lloyd     
Harbor, NY 11743-1632, owned 6.59% of such Portfolio's total outstanding        
Class B shares.                                                                 

Sandra Titus McKinstry 7264 South Jasmine Ct, Englewood, CO 80112, owned 6.29%  
of such Portfolio's total outstanding Class B shares.                           

Barbara Howe Spousal IRA Chase Custodian, 350 Ponca Place, Apt 29, Boulder,     
CO 80303, owned 5.22% of such Portfolio's total outstanding Class B shares.     

Liberty Northwest Insurance Corp, Attn John R Galbraith Exe, PO Box 4555,       
Portland, OR 97208-4555, owned 6.66% of such Portfolio's total outstanding      
Class A shares.                                                                 

The Wortham Foundation Inc, 2727 Allen Pkwy 2000, Houston, TX 77019-2125, owned 
5.89% of such Portfolio's total outstanding Class A shares.                     

EMERGING MARKETS DEBT PORTFOLIO: PACO, Box 513577, Los Angeles, CA 90051, owned 
28.58% of such Portfolio's total outstanding Class B shares.                    

FFP Investments Ltd, STE 101, 1920 Nacogdoches, Alamo Heights, TX 78209-2241,   
owned 12.96% of such Portfolio's total outstanding Class B shares.              

Alice H Bartlett Trust A Paul D Bartlett Jr TTEE, 4800 Main St Ste 600, Kansas  
City, MO 64112, owned 17.36% of such Portfolio's total outstanding Class B      
shares.                                                                         

Brenton D Anderson, 514 Silvermine Rd, New Canaan, CT 06840, owned 16.63% of    
such Portfolio's total outstanding Class B shares.                              

Bartlett And Company, Grain Charitable Foundation, Ste 600, 4800 Main St, Kansas
City, MO 64112, owned 12.93% of such Portfolio's total outstanding Class B      
shares.                                                                         

Frances B Bernstein 1989 Trust, Douglas Lehman & David Botwinik, C/O Pavia &    
Harcourt, 600 Madison Ave, New York, NY 10022, owned 7.37% of such Portfolio's  
total outstanding Class B shares.                                               

Morgan Stanley & Co 401k Pension Plan, Cust c/o Northern Trust Co Cust, 770     
Broadway, New York, NY 10003, owned 14.73% of such Portfolio's total outstanding
Class A shares.                                                                 

Charles Schwab & Co Inc, Attn Mutual Funds, 101 Montgomery Street, San          
Francisco, CA 94104, owned 12.60% of such Portfolio's total outstanding Class A 
shares.                                                                         

Wellesley College, Attn Robert Bower, 139 Green Hall, Wellesley, MA 02481, owned
11.22% of such Portfolio's total outstanding Class A shares.                    

Commonwealth Of Pennsylvania, Public School Employees Retirement, 5 North 5th   
St, Harrisburg, PA 17101, owned 7.75% of such Portfolio's total outstanding     
Class A shares.                                                                 

Janx Partners LP II, Attn John Naporano, Foot Of Hawkins Street, Newark,        
NJ 07105, owned 7.34% of such Portfolio's total outstanding Class A shares.     

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Morgan Stanley & Co Pension Fd, C/O Northern Trust Co Cust, 770 Broadway, New   
York, NY 10003, owned 6.80% of such Portfolio's total outstanding Class A       
shares.                                                                         

ASIAN REAL ESTATE PORTFOLIO: Morgan Stanley Asset Management Inc, Attn Elisa    
Divito, 1221 Avenue Of The Americas, New York, NY 10020, owned 85.24% of such   
Portfolio's total outstanding Class A shares.                                   

John Harris & Sharon Harris, 1998 Trust Dtd 10-1-98, 67 Marymont, Menlo Park,   
CA 94027, owned 8.91% of such Portfolio's total outstanding Class A shares.     

The Cathryn R Fortune Char, Remainder Unitrust Of 5/15/98, 5505 Lake WA Blvd NE 
Unit 1D, Kirkland, WA 98033-7379, owned 38.03% of such Portfolio's total        
outstanding Class B shares.                                                     

Shimer and Fortune Chart REM, Unitrust of 2/6/98 John Shimer, 5505 LK WA Blvd NE
Unit 1D, HOUGHTON, WA 98033-7376, owned 21.07% of such Portfolio's total        
outstanding Class B shares.                                                     

Bernard M Madej And Elaine M Madej Jtwros, 10831 Oakland Drive, Orland Park,    
IL 60462, owned 14.50% of such Portfolio's total outstanding Class B shares.    

Ned McCarthy Trust, 3 Sugar Maple Ln, Hanover, NH 03755, owned 13.57% of such   
Portfolio's total outstanding Class B shares.                                   

KEVIN L Jackson, 3112 Grimes Ranch Road, Austin, TX 78732-2124, owned 12.83% of 
such Portfolio's total outstanding Class B shares.                              

JAPANESE EQUITY PORTFOLIO: Resources Trust Co Various IMS Customers,            
PO Box 3865, Englewood, CO 80155-3865, owned 32.92% of such Portfolio's total   
outstanding Class B shares.                                                     

Barlett and Company Profit Sharing Plan and Trust, STE 600, 4800 Main St, Kansas
City, MO 64112, owned 10.34% of such Portfolio's total outstanding Class B      
shares.                                                                         

John David Barksdale, c/o Walter Denny, 800 Woodlands Pky, Ste 118, Ridgeland,  
MS 39157-5216, owned 9.93% of such Portfolio's total outstanding Class B shares.

Robert J Weinstein M D & Lois Weinstein, Suite 2930, 875 N Michigan Ave,        
Chicago, IL 60611-1803, owned 7.59% of such Portfolio's total outstanding       
Class B shares.                                                                 

Bank Morgan Stanley AG, Attn Thomas Genschwiler, Bahnhofstrasse 92, Zurich      
Ch-8023 Switzerland, owned 5.62% of such Portfolio's total outstanding Class B  
shares.                                                                         

Donaldson Lufkin & Jenrette, Pershing Division, Po Box 2052, Jersey City,       
NJ 07303, owned 6.14% of such Portfolio's total outstanding Class A shares.     

Retired Staff Benefits Investment Accts, of The International Monetary Fund, 700
19th St NW, Washington, DC 20431, owned 6.13% of such Portfolio's total         
outstanding Class A shares.                                                     

The Wortham Foundation Inc, 2727 Allen Pkwy 2000, Houston, TX 77019-2125, owned 
5.60% of such Portfolio's total outstanding Class A shares.                     

INTERNATIONAL SMALL CAP PORTFOLIO: Charles Schwab & Co Inc, Attn Mutual Funds,  
101 Montgomery Street, San Francisco, CA 94104, owned 9.67% of such Portfolio's 
total outstanding Class A shares.                                               

The Skillman Foundation, 600 Renaissance Center, Suite 1700, Attn Jean E        
Gregory, Detroit, MI 48243, owned 7.97% of such Portfolio's total outstanding   
Class A shares.                                                                 

Carnegie Corp Of New York, Vice President & Chief Investment Offic, Attn Ellen  
Shuman, 437 Madison Ave, New York, NY 10022, owned 7.28% of such Portfolio's    
total outstanding Class A shares.                                               

Trustees of Boston College, Attn Paul Haran Assoc Treasurer, St Thomas More Hall
310, Chestnut Hill, MA 02167-3819, owned 6.44% of such Portfolio's total        
outstanding Class A shares.                                                     

General Mills Inc, One General Mills Blvd, Minneapolis, MN 55426, owned 5.67% of
such Portfolio's total outstanding Class A shares.                              

Cornell University, Morgan Stanley Asset Management, c/o Gail Reeke, 1221 Ave of
The Americas, New York, NY 10020, owned 5.23% of such Portfolio's total         
outstanding Class A shares.                                                     

LATIN AMERICA PORTFOLIO: Batrus & Co, PO Box 9005, Church Street Station, New   
York, NY 10008, owned 17.83% of such Portfolio's total outstanding Class A      
shares.                                                                         

Eastern Europe Fund, PO Box 852 9T, Georgetown, Cayman Islands, owned 10.79% of 
such Portfolio's total outstanding Class A shares.                              

The Hostetter Foundation, The Pilot House, Lewis Wharf, Boston, MA 02110, owned 
8.93% of such Portfolio's total outstanding Class A shares.                     

MHCH Ltd International, Discretionary Only Equity A/C, 301 Little John Ln,      
Houston, TX 77024-5715, owned 8.92% of such Portfolio's total outstanding       
Class A shares.                                                                 

Nettie Sharp Washburn, Po Box 3779, Greenville, DE 19807, owned 6.96% of such   
Portfolio's total outstanding Class A shares.                                   

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Charles Schwab & Co Inc, Attn Mutual Funds, 101 Montgomery Street, San          
Francisco, CA 94104, owned 6.92% of such Portfolio's total outstanding Class A  
shares.                                                                         

Michael E Hora Revocable Trust, C/O A T Kearney, 1350 North Lake Shore Dr Apt   
1714, Chicago, IL 60610-5267, owned 23.05% of such Portfolio's total outstanding
Class B shares.                                                                 

Fred Middleton, Capitol Ac, 545 El Cerrito Ave, Hillsborough, CA 94010-6821,    
owned 20.25% of such Portfolio's total outstanding Class B shares.              

Fleur Cates Netanyahu, 45 E 62nd St No 8A, New York, NY 10021-7428, owned 11.28%
of such Portfolio's total outstanding Class B shares.                           

BBJ Family Limited Partnership, BBJ Family Corp General Partner, 623 East Bailey
Rd, Naperville, IL 60565-2633, owned 10.13% of such Portfolio's total           
outstanding Class B shares.                                                     

Gerald W Bodzy, Sue A Strauss, Po Box 980097, Houston, TX 77098-0097, owned     
9.11% of such Portfolio's total outstanding Class B shares.                     

Nezar M Al-Saie, c/o Investcorp, PO Box 5340, Manama, Bahrain, owned 8.36% of   
such Portfolio's total outstanding Class B shares.                              

Christopher S Ruisi, 11 Colts Dr, Holmdel, NJ 07733, owned 7.34% of such        
Portfolio's total outstanding Class B shares.                                   

Donald L Gustafson, MSTC Custodian, 3420 Norman Dr, Reno, NV 89899, owned 7.32% 
of such Portfolio's total outstanding Class B shares.                           

FOCUS EQUITY PORTFOLIO: Morgan Stanley & Co 401K Pension Plan, Cust             
c/o Northern Trust Co Cust, 770 Broadway, New York, NY 10003, owned 36.18% of   
such Portfolio's total outstanding Class A shares.                              

US REAL ESTATE PORTFOLIO: Charles Schwab & Co Inc, Attn Mutual Funds,           
101 Montgomery Street, San Francisco, CA 94104, owned 10.16% of such Portfolio's
total outstanding Class A shares.                                               

Commonwealth of Pennsylvania, Public School Employees Retirement, 5 North       
5th St, Harrisburg, PA 17101, owned 6.92% of such Portfolio's total outstanding 
Class A shares.                                                                 

Northwestern University, Attn Investment Dept 1-209 Crown, 633 Clark St,        
Evanston, IL 60208-1122, owned 5.86% of such Portfolio's total outstanding      
Class A shares.                                                                 

Merrill Lynch Trust Co TTEE, FBO Qualified Retirement Plans, 265 Davidson Ave,  
4th Flr, Somerset, NJ 08873, owned 32.29% of such Portfolio's total outstanding 
Class B shares.                                                                 

Putnam Fiduciary Trust Company TTEE, Ball Horticultural Co Inc, Profit Sharing  
Retirement, 859 Willard St MSE 2C Attn Trading Serv, Quincy, MA 02269-9110,     
owned 7.83% of such Portfolio's total outstanding Class B shares.               

Mark A Mansour and Sharon A Mansour JTTIC -- US REIT FU, 2610 NE 40th Street,   
Fort Lauderdale, FL 33308-5737, owned 7.05% of such Portfolio's total           
outstanding Class B shares.                                                     

TECHNOLOGY PORTFOLIO: Bank Of New York AS Attn Ellie Whalen One Wall Street     
12th Floor, Bank Of New York, NY 10286, owned 13.28% of such Portfolio's total  
outstanding Class A shares.                                                     

Bruce W Bastian & McKay S Matthews TTEES FBO Bruce W, 51 West CTR755, Orem,     
UT 84057, owned 11.63% of such Portfolio's total outstanding Class A shares.    

Putnam Fiduciary Trust Co TTEE, FBO Viacom Investment Plan, 859 Willard St,     
Attn Trading Services, Quincy, MA 02269-9110, owned 7.41% of such Portfolio's   
total outstanding Class A shares.                                               

Chesed Congregation Of America, One State Street Plaza, 29th Fl, New York,      
NY 10004-1505, owned 5.40% of such Portfolio's total outstanding Class A shares.

John Wallace, 6314 Norway Road, Dallas, TX 75230, owned 9.21% of such           
Portfolio's total outstanding Class B shares.                                   

Donald L Gustafson, MSTC Custodian, 3420 Norman Dr, Reno, NV 89899, owned 8.48% 
of such Portfolio's total outstanding Class B shares.                           

EQUITY PLUS PORTFOLIO: The Institute For Genomic Research, 9712 Medical Center  
Dr, Rockville, MD 20850, owned 29.73% of such Portfolio's total outstanding     
Class A shares.                                                                 

The Flinn Foundation, Northern Trust Co, Master Trust Dept 7th Fl, Po           
Box 92984, Chicago, IL 60675, owned 28.26% of such Portfolio's total outstanding
Class A shares.                                                                 

Morgan Stanley Dean Witter Foundation, Attn Kathleen Toohill 27th Floor,        
1221 Avenue of The Americas, Manhattan, NY 10020-1001, owned 23.72% of such     
Portfolio's total outstanding Class A shares.                                   

MAT Charitable Foundation, 476 Broadway, New York, NY 10013, owned 9.83% of such
Portfolio's total outstanding Class A shares.                                   

Memphis Commerce Square, Trust Division, C/O National Trust Bank Of Commerce,   
One Commerce Square, Memphis, TN 38150, owned 99.61% of such Portfolio's total  
outstanding Class B shares.                                                     

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PERFORMANCE INFORMATION 

The Fund may from time to time quote various performance figures to illustrate  
the Portfolios' past performance.                                               

Performance quotations by investment companies are subject to rules adopted by  
the SEC, which require the use of standardized performance quotations. In the   
case of total return, non-standardized performance quotations may be furnished  
by the Fund but must be accompanied by certain standardized performance         
information computed as required by the SEC. Current yield and average annual   
compounded total return quotations used by the Fund are based on the            
standardized methods of computing performance mandated by the SEC. An           
explanation of those and other methods used by the Fund to compute or express   
performance follows.                                                            

TOTAL RETURN                                                                    

From time to time each Portfolio, except the Money Market and Municipal Money   
Market Portfolios, may advertise total return for each class of shares of the   
Portfolio. Total return figures are based on historical earnings and are not    
intended to indicate future performance. The average annual total return is     
determined by finding the average annual compounded rates of return over 1-, 5-,
and 10-year periods (or over the life of the Portfolio) that would equate an    
initial hypothetical $1,000 investment to its ending redeemable value. The      
calculation assumes that all dividends and distributions are reinvested when    
paid. The quotation assumes the amount was completely redeemed at the end of    
each 1-, 5-, and 10-year period (or over the life of the Portfolio) and the     
deduction of all applicable Fund expenses on an annual basis.                   

The average annual compounded rates of return (unless otherwise noted) for the  
Fund's Portfolios for the one year and five year periods ended December 31, 1999
and for the period from inception through December 31, 1999 are as follows:     

                                                        [Enlarge/Download Table]

                                         INCEPTION       ONE       AVERAGE ANNUAL  AVERAGE ANNUAL  AVERAGE ANNUAL 
NAME OF PORTFOLIO+                         DATE         YEAR         FIVE YEARS      TEN YEARS     SINCE INCEPTION
------------------                       ---------  -------------  --------------  --------------  ---------------
                                                                                                                  
Active International Allocation                                                                                   
  Class A...............................  1/17/92           27.82%         15.15%            N/A            12.33%
  Class B...............................  1/02/96           26.63%           N/A             N/A            15.98%
Asian Equity                                                                                                      
  Class A...............................  7/01/91           81.00%         -1.71%            N/A             9.06%
  Class B...............................  1/02/96           79.95%           N/A             N/A            -4.15%
Asian Real Estate                                                                                                 
  Class A............................... 10/01/97           24.27%           N/A             N/A            -5.64%
  Class B............................... 10/01/97           23.88%           N/A             N/A            -6.00%
Emerging Markets                                                                                                  
  Class A...............................  9/25/92          101.78%          7.84%            N/A            13.45%
  Class B...............................  1/02/96          101.26%           N/A             N/A            13.17%
Emerging Markets Debt                                                                                             
  Class A...............................  2/01/94           29.22%         13.57%            N/A             8.53%
  Class B...............................  1/02/96           28.01%           N/A             N/A             9.75%
Equity Growth                                                                                                     
  Class A...............................  4/02/91           39.89%         32.93%            N/A            21.28%
  Class B...............................  1/02/96           39.61%           N/A             N/A            29.63%
European Equity                                                                                                   
  Class A...............................  4/02/93            9.60%         13.80%            N/A            16.08%
  Class B...............................  1/02/96            9.36%           N/A             N/A            13.79%
European Real Estate                                                                                              
  Class A............................... 10/01/97           -2.36%           N/A             N/A            -1.14%
  Class B............................... 10/01/97           -2.61%           N/A             N/A            -1.34%
Fixed Income                                                                                                      
  Class A...............................  5/15/91           -1.56%          7.65%            N/A             7.24%
  Class B...............................  1/02/96           -1.76%           N/A             N/A             4.89%
Focus Equity                                                                                                      
  Class A...............................  3/08/95           46.44%           N/A             N/A            36.58%
  Class B...............................  1/02/96           46.13%           N/A             N/A            32.98%
Global Equity                                                                                                     
  Class A...............................  7/15/92            4.01%         16.54%            N/A            17.02%
  Class B...............................  1/02/96            3.75%           N/A             N/A            15.57%

                                                                      53

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                                                        [Enlarge/Download Table]

                                         INCEPTION       ONE       AVERAGE ANNUAL  AVERAGE ANNUAL  AVERAGE ANNUAL 
NAME OF PORTFOLIO+                         DATE         YEAR         FIVE YEARS      TEN YEARS     SINCE INCEPTION
------------------                       ---------  -------------  --------------  --------------  ---------------
                                                                                                                  
Global Fixed Income                                                                                               
  Class A...............................  5/01/91           -6.84%          6.45%            N/A             6.38%
  Class B...............................  1/02/96           -7.09%           N/A             N/A             3.22%
High Yield                                                                                                        
  Class A...............................  9/28/92            7.77%         12.79%            N/A            11.18%
  Class B...............................  1/02/96            7.44%           N/A             N/A             9.90%
International Equity                                                                                              
  Class A...............................  8/04/89           16.91%         16.07%          13.21%           13.21%
  Class B...............................  1/02/96           16.68%           N/A             N/A            16.74%
International Magnum                                                                                              
  Class A...............................  3/15/96           24.87%           N/A             N/A            12.16%
  Class B...............................  3/15/96           24.58%           N/A             N/A            11.87%
International Small Cap                                                                                           
  Class A............................... 12/15/92           39.34%         11.60%            N/A            14.97%
Japanese Equity                                                                                                   
  Class A...............................  4/25/94           63.75%          8.97%            N/A             7.52%
  Class B...............................  1/02/96           63.46%           N/A             N/A            12.01%
Latin American                                                                                                    
  Class A...............................  1/18/95           71.28%           N/A             N/A            15.80%
  Class B...............................  1/02/96           70.85%           N/A             N/A            21.20%
Money Market                                                                                                      
  Class A............................... 11/15/88            4.80%          5.15%           5.03%            5.37%
  Class B...............................      N/A             N/A            N/A             N/A              N/A 
Municipal Bond                                                                                                    
  Class A...............................  1/18/95           -1.79%           N/A             N/A             4.67%
  Class B*..............................  1/02/96             N/A            N/A             N/A              N/A 
Municipal Money Market                                                                                            
  Class A...............................  2/10/89            2.77%          3.08%           3.17%            3.40%
  Class B...............................      N/A             N/A            N/A             N/A              N/A 
Small Company Growth                                                                                              
  Class A............................... 11/01/89           96.45%         31.00%          19.43%           19.78%
  Class B...............................  1/02/96           95.97%           N/A             N/A            30.09%
Technology                                                                                                        
  Class A...............................  9/16/96          160.62%           N/A             N/A            71.47%
  Class B...............................  9/16/96          160.26%           N/A             N/A            71.13%
U.S. Equity Plus                                                                                                  
  Class A...............................  7/31/97           20.25%           N/A             N/A            18.75%
  Class B...............................  7/31/97           19.99%           N/A             N/A            18.52%
U.S. Real Estate                                                                                                  
  Class A...............................  2/24/95           -1.48%           N/A             N/A            13.68%
  Class B...............................  1/02/96           -1.73%           N/A             N/A            10.89%
Value Equity                                                                                                      
  Class A...............................  1/31/90           11.63%         20.22%            N/A            13.93%
  Class B...............................  1/02/96           11.22%           N/A             N/A            16.53%

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

+  The China Growth, Mortgage-Backed Securities and MicroCap Portfolios had not 
commenced operations as of December 31, 1999. The Gold Portfolio ceased   
operations effective March 11, 1998 for Class A shares and May 6, 1998 for
Class B shares. The Municipal Bond Portfolio ceased operations effective  
March 14, 2000.                                                           

*  As of the date of this Statement of Additional Information, there were no    
outstanding Class B shares of the Municipal Bond Portfolio.               

These figures were calculated according to the following formula:               
P(1+T)TO THE POWER OF n = ERV                                                   

where:                                                                          

                                                                [Download Table]
                                                                      
  P   =   a hypothetical initial payment of $1,000                    
  T   =   average annual total return                                 
  n   =   number of years                                             
ERV   =   ending redeemable value of hypothetical $1,000 payment made 
          at the beginning of the 1-, 5-, or 10-year periods at the   
          end of the 1-, 5-, or 10-year periods (or fractional portion
          thereof).                                                   

CALCULATION OF YIELD FOR NON-MONEY MARKET PORTFOLIOS                            

From time to time certain of the Fund's Portfolios may advertise yield.         
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Current yield reflects the income per share earned by a Portfolio's investments.

Current yield is determined by dividing the net investment income per share     
earned during a 30-day base period by the maximum offering price per share on   
the last day of the period and annualizing the result. Expenses accrued for the 
period include any fees charged to all shareholders during the base period.     

The respective current yields for certain of the Fund's Portfolios for the      
30-day period ended December 31, 1999 were as follows:                          

                                                                [Download Table]

                                          CLASS A     CLASS B  
PORTFOLIO NAME                            SHARES      SHARES   
--------------                            -------   -----------
                                                               
Emerging Markets Debt...................  15.66%      15.36%   
Fixed Income............................   6.77%       6.62%   
Global Fixed Income.....................   4.64%       4.48%   
High Yield..............................  10.58%      10.33%   
Municipal Bond..........................   4.97%         --%   

These figures were obtained using the following formula:                        

                                                                [Download Table]
                                                         
Yield      =          2[(a - b + 1)TO THE POWER OF 6 - 1]
                              -------------------        
                                       cd                

CALCULATION OF YIELD FOR MONEY MARKET PORTFOLIOS                                

The current yield of the Money Market and Municipal Money Market Portfolios is  
calculated daily on a base period return for a hypothetical account having a    
beginning balance of one share for a particular period of time (generally 7     
days). The return is determined by dividing the net change (exclusive of any    
capital changes in such account) by its average net asset value for the period, 
and then multiplying it by 365/7 to determine the annualized current yield. The 
calculation of net change reflects the value of additional shares purchased with
the dividends by the Portfolio, including dividends on both the original share  
and on such additional shares. The current yields of the Money Market and       
Municipal Money Market Portfolios for the 7-day period ended December 31, 1999  
were 5.33% and 3.84%, respectively. An effective yield, which reflects the      
effects of compounding and represents an annualization of the current yield with
all dividends reinvested, may also be calculated for each Portfolio by dividing 
the base period return by 7, adding 1 to the quotient, raising the sum to the   
365th power, and subtracting 1 from the result. The effective yields of the     
Money Market and Municipal Money Market Portfolios for the 7-day period ended   
December 31, 1999 were 5.47% and 3.91%, respectively.                           

The yield of a Portfolio will fluctuate. The annualization of a week's dividend 
is not a representation by the Portfolio as to what an investment in the        
Portfolio will actually yield in the future. Actual yields will depend on such  
variables as investment quality, average maturity, the type of instruments the  
Portfolio invests in, changes in interest rates on instruments, changes in the  
expenses of the Fund and other factors. Yields are one basis investors may use  
to analyze the Portfolios of the Fund, and other investment vehicles; however,  
yields of other investment vehicles may not be comparable because of the factors
set forth in the preceding sentence, differences in the time periods compared,  
and differences in the methods used in valuing portfolio instruments, computing 
net asset value and calculating yield.                                          

TAXABLE EQUIVALENT YIELDS FOR THE MUNICIPAL BOND AND MUNICIPAL MONEY MARKET     
PORTFOLIOS                                                                  

It is easy to calculate your own taxable equivalent yield if you know your tax  
bracket. The formula is:                                                        

                                                                [Download Table]
                                                                
Tax Free Yield                 =   Your Taxable Equivalent Yield
-------------                                                   
1 - Your Tax Bracket                                            

For example, if you are in the 28% tax bracket and can earn a tax-free yield of 
7.5%, the taxable equivalent yield would be 10.42%.                             

The table below indicates the advantages of investments in Municipal Bonds for  
certain investors. Tax-exempt rates of interest payable on a Municipal Bond     
(shown at the top of each column) are equivalent to the taxable yields set forth
opposite the respective income tax levels, based on income tax rates effective  
for the tax year 1999 under the Internal Revenue Code. There can, of course, be 
no guarantee that the Municipal Money Market Portfolio will achieve a specific  
yield. Also, it is possible that some portion of the Portfolio's dividends may  
be subject to Federal income taxes. A substantial portion, if not all, of such  
dividends may be subject to state and local taxes.                              

TAXABLE EQUIVALENT YIELD TABLE

                                                        [Enlarge/Download Table]

          SAMPLE LEVEL OF              FEDERAL                                                                
           TAXABLE INCOME              INCOME       TAXABLE EQUIVALENT RATES BASED ON TAX-EXEMPT YIELD OF:    
------------------------------------     TAX     -------------------------------------------------------------
  JOINT RETURN       SINGLE RETURN    BRACKETS    3%     4%     5%     6%     7%     8%     9%     10%    11% 
-----------------  -----------------  ---------  -----  -----  -----  -----  -----  -----  -----  -----  -----
                                                                                                              
$0-42,350          $0-25,350              15.0%   3.5%   4.7%   5.9%   7.1%   8.2%   9.4%  10.6%  11.8%  12.9%
42,350-102,300     25,350-61,400          28.0    4.2    5.6    6.9    8.3    9.7   11.1   12.5   13.9   15.3 
102,300-155,950    61,400-128,100         31.0    4.3    5.8    7.2    8.7   10.1   11.6   13.0   14.5   15.9 
155,950-278,450    128,100-278,450        36.0    4.7    6.3    7.8    9.4   10.9   12.5   14.1   15.6   17.2 
over 278,450       over 278,450           39.6    5.0    6.6    8.3    9.9   11.6   13.2   14.9   16.6   18.2 

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

* Net amount subject to 1999 Federal Income Tax after deductions and exemptions,
not indexed for 1999 income tax rates.                                      

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The taxable equivalent yield for the Municipal Money Market Portfolio for the   
seven days ended December 31, 1999 assuming a Federal income tax rate of 39.6%  
(maximum rate), was 6.36%. The taxable equivalent effective yield for the       
Municipal Money Market for the seven days ended December 31, 1999, assuming the 
same tax rate, was 6.47%.                                                       

GENERAL PERFORMANCE INFORMATION                                                 

Each Portfolio's performance will fluctuate, unlike bank deposits or other      
investments which pay a fixed yield for a stated period of time. Past           
performance is not necessarily indicative of future return. Actual performance  
will depend on such variables as portfolio quality, average portfolio maturity, 
the type of portfolio instruments acquired, changes in interest rates, portfolio
expenses and other factors. Performance is one basis investors may use to       
analyze a Portfolio as compared to other funds and other investment vehicles.   
However, performance of other funds and other investment vehicles may not be    
comparable because of the foregoing variables, and differences in the methods   
used in valuing their portfolio instruments, computing net asset value and      
determining performance.                                                        

From time to time, a Portfolio's performance may be compared to other mutual    
funds tracked by financial or business publications and periodicals. For        
example, Morningstar, Inc. may be quoted in advertising materials.              
Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the
basis of risk-adjusted performance. Rankings that compare the performance of    
funds to one another in appropriate categories over specific periods of time may
also be quoted in advertising.                                                  

Portfolio advertising may include data on historical returns of the capital     
markets in the United States compiled or published by Ibbotson Associates of    
Chicago, Illinois ("Ibbotson"), including returns on common stocks, small       
capitalization stocks, long-term corporate bonds, intermediate-term government  
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation   
(based on the Consumer Price Index), and combinations of various capital        
markets. The performance of these capital markets is based on the returns of    
different indices to which the performance of the Portfolios may also be        
compared. The Portfolios may use the performance of these capital markets in    
order to demonstrate general risk-versus-reward investment scenarios.           
Performance comparisons may also include the value of a hypothetical investment 
in any of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the           
Portfolios. The Portfolios may also compare their performance to that of other  
compilations or indices that may be developed and made available in the future. 

The Portfolios may include in advertisements, charts, graphs or drawings which  
illustrate the potential risks and rewards of investment in various investment  
vehicles, including but not limited to, foreign securities, stocks, bonds,      
treasury bills and shares of a Portfolio. In addition, advertisements may       
include a discussion of certain attributes or benefits to be derived by an      
investment in a Portfolio and/or other mutual funds, shareholder profiles and   
hypothetical investor scenarios, timely information on financial management, tax
and retirement planning and various investment alternatives. Advertisements may 
include lists of representative Morgan Stanley clients. The Portfolios may also 
from time to time include discussions or illustrations of the effects of        
compounding in advertisements. "Compounding" refers to the fact that, if        
dividends or other distributions on a Portfolio investment are reinvested by    
being paid in additional Portfolio shares, any future income or capital         
appreciation of a Portfolio would increase the value, not only of the original  
investment in the Portfolio, but also of the additional Portfolio shares        
received through reinvestment.                                                  

The Portfolios may include in their advertisements, discussions or illustrations
of the potential investment goals of a prospective investor (including materials
that describe general principles of investing, such as asset allocation,        
diversification, risk tolerance, goal setting, questionnaires designed to help  
create a personal financial profile, worksheets used to project savings needs   
based on assumed rates of inflation and hypothetical rates of return and action 
plans offering investment alternatives), investment management techniques,      
policies or investment suitability of a Portfolio (such as value investing,     
market timing, dollar cost averaging, asset allocation, constant ratio transfer,
automatic account rebalancing, the advantages and disadvantages of investing in 
tax-deferred and taxable investments). Advertisements and sales materials       
relating to a Portfolio may include information regarding the background and    
experience of its portfolio managers; the resources, expertise and support made 
available to the portfolio managers by Morgan Stanley; and the portfolio        
manager's goals, strategies and investment techniques.                          

The Portfolios' advertisements may discuss economic and political conditions of 
the United States and foreign countries, the relationship between sectors of the
U.S., a foreign, or the global economy and the U.S., a foreign, or the global   
economy as a whole and the effects of inflation. The Portfolios' advertisements 
may include discussions and illustrations of the growth potential of various    
global markets including, but not limited to, Africa, Asia, Europe, Latin       
America, North America, South America, Emerging Markets and individual          
countries. These discussions may include the past performance of the various    
markets or market sectors; forecasts of population, gross national product and  
market performance; and the underlying data which supports such forecasts. From 
time to time, advertisements, sales literature, communications to shareholders  
or other materials may summarize the substance of information contained in the  
Portfolios' shareholder reports (including the investment composition of a      
Portfolio), as well as the views of Morgan Stanley as to current market,        
economic, trade and interest rate trends, legislative, regulatory and monetary  
developments, investment strategies and related matters believed to be of       
relevance to a Portfolio.                                                       

The Portfolios may quote various measures of volatility and benchmark           
correlation in advertising. The Portfolios may compare these measures to those  
of other funds. Measures of volatility seek to compare the historical share     
price fluctuations or total                                                     
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returns to those of a benchmark. Measures of benchmark correlation indicate how 
valid a comparative benchmark may be. Measures of volatility and correlation may
be calculated using averages of historical data. A Portfolio may also advertise 
its current interest rate sensitivity, duration, weighted average maturity or   
similar maturity characteristics.                                               

The Portfolios may advertise examples of the effects of periodic investment     
plans, including the principle of dollar cost averaging. In such a program, an  
investor invests a fixed dollar amount in a Portfolio at periodic intervals,    
thereby purchasing fewer shares when prices are high and more shares when prices
are low. While such a strategy does not assure a profit or guard against loss in
a declining market, the investor's average cost per share can be lower than if  
fixed numbers of shares are purchased at the same intervals. In evaluating such 
a plan, investors should consider their ability to continue purchasing shares   
during periods of low price levels.                                             

ADVISER'S USE OF COMPANIES COMPRISING THE S&P 500 INDEX                         

MSDW Investment Management uses the 500 companies included in the S&P 500 Index 
as the universe of potential investments for the U.S. Equity Plus Portfolio. The
U.S. Equity Plus Portfolio is not sponsored, endorsed, sold or promoted by S&P, 
a division of The McGraw-Hill Companies, Inc. S&P makes no representation or    
warranty, express or implied, to investors in the U.S. Equity Plus Portfolio or 
any member of the public regarding the advisability of investing in the U.S.    
Equity Plus Portfolio or the ability of the S&P 500 Index to track general stock
market performance. S&P's only relationship to MSDW Investment Management is the
licensing of certain trademarks and trade names of S&P and of the S&P 500 Index 
which is determined, composed and calculated by S&P without regard to MSDW      
Investment Management or the U.S. Equity Plus Portfolio. S&P has no obligation  
to take the needs of MSDW Investment Management or the investors in the U.S.    
Equity Plus Portfolio into consideration in determining, composing or           
calculating the S&P 500 Index. S&P is not responsible for, does not participate 
in and has no obligation or liability in connection with the management,        
administration or marketing of the U.S. Equity Plus Portfolio.                  

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR COMPLETENESS OF THE S&P 500 INDEX OR 
ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,       
OMISSIONS OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,  
AS TO THE PERFORMANCE OF THE ADVISER OR THE U.S. EQUITY PLUS PORTFOLIO, AND     
EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A          
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY  
LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES         
(INCLUDING LOST PROFITS) ARISING OUT OF ANY USE OF THE S&P 500 INDEX OR ANY DATA
INCLUDED THEREIN, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.          

DESCRIPTION OF RATINGS

DESCRIPTION OF COMMERCIAL PAPER AND BOND RATINGS                                

EXCERPTS FROM MOODY'S DESCRIPTION OF BOND RATINGS:  Aaa -- Bonds which are rated
Aaa are judged to be of the best quality. They carry the smallest degree of     
investment risk and are generally referred to as "gilt-edged." Interest payments
are protected by a large or by an exceptionally stable margin and principal is  
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong       
position of such issues. Aa -- Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they comprise what are    
generally known as high-grade bonds. They are rated lower than the best bonds   
because margins of protection may not be as large as in Aaa securities or       
fluctuation of protective elements may be of greater amplitude or there may be  
other elements present which make the long-term risks appear somewhat larger    
than Aaa securities. A -- Bonds which are rated A possess many favorable        
investment attributes and are to be considered as upper-medium-grade            
obligations. Factors giving security to principal and interest are considered   
adequate, but elements may be present which suggest a susceptibility to         
impairment some time in the future. Baa -- Bonds which are rated Baa are        
considered as medium-grade obligations, i.e., they are neither highly protected 
nor poorly secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be            
characteristically unreliable over any great length of time. Such bonds lack    
outstanding investment characteristics and in fact have speculative             
characteristics as well. Ba -- Bonds which are rated Ba are judged to have      
speculative elements; their future cannot be considered as well assured. Often  
the protection of interest and principal payments may be very moderate, and     
thereby not well safeguarded during both good and bad times over the future.    
Uncertainty of position characterizes bonds in this class. B -- Bonds which are 
rated B generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small. Moody's applies numerical modifiers  
1, 2 and 3 in each generic voting classification from Aa through B. The modifier
1 indicates that the security ranks at a higher end of the rating category;     
modifier 2 indicates a mid-range rating; and the modifier 3 indicates that the  
issue ranks at the lower end of the rating category. Caa -- Bonds which are     
rated Caa are of poor standing. Such issues may be in default or there may be   
present elements of danger with respect to principal or interest. Ca -- Bonds   
which are rated Ca                                                              
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represent obligations which are speculative in a high degree. Such issues are   
often in default or have other marked shortcomings. C -- Bonds which are rated C
are the lowest rated class of bonds, and issues so rated can be regarded as     
having extremely poor prospects of ever attaining any real investment standing. 

EXCERPTS FROM S&P'S DESCRIPTION OF BOND RATINGS:  AAA -- Bonds rated AAA have   
the highest rating assigned by Standard & Poor's to a debt obligation and       
indicate an extremely strong capacity to pay principal and interest. AA -- Bonds
rated AA have a very strong capacity to pay interest and repay principal and    
differ from the highest rated issues only to a small degree. A -- Bonds rated A 
have a strong capacity to pay interest and repay principal although they are    
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than bonds in higher rated categories. BBB -- Bonds rated   
BBB are regarded as having an adequate capacity to pay interest and repay       
principal. Whereas they normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a      
weakened capacity to pay interest and repay principal for debt in this category 
than for debt in higher rated categories. BB, B, CCC, CC -- Debt rated BB, B,   
CCC, CC and C is regarded, on balance, as predominantly speculative with respect
to capacity to pay interest and repay principal in accordance with the terms of 
the obligation. BB indicates the lowest degree of speculation and C the highest 
degree of speculation. While such debt will likely have some quality and        
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions. C -- The rating C may be used to cover a  
situation where a bankruptcy petition has been filed or similar action has been 
taken, but payments on this obligation are being continued. D -- Debt rated D is
in default, and payment of interest and/or repayment of principal is in arrears.

DESCRIPTION OF MOODY'S RATINGS OF STATE AND MUNICIPAL NOTES:  Moody's ratings   
for state and municipal notes and other short-term obligations are designated   
Moody's Investment Grade ("MIG"). Symbols used are as follows: MIG-1 -- best    
quality, enjoying strong protection from established cash flows of funds for    
their servicing or from established broad-based access to the market for        
refinancing, or both; MIG-2 -- high quality with margins of protection ample    
although not so large as in the preceding group; MIG-3 -- favorable quality,    
with all security elements accounted for but lacking the undeniable strength of 
the preceding grades.                                                           

DESCRIPTION OF MOODY'S HIGHEST COMMERCIAL PAPER RATING:  Prime-1 ("Pl") --      
Judged to be of the best quality. Their short-term debt obligations carry the   
smallest degree of investment risk.                                             

EXCERPT FROM S&P'S RATING OF MUNICIPAL NOTE ISSUES:  SP-l+ -- very strong       
capacity to pay principal and interest; SP-2--strong capacity to pay principal  
and interest.                                                                   

DESCRIPTION OF S&P'S HIGHEST COMMERCIAL PAPER RATINGS:  A-l+ -- this designation
indicates the degree of safety regarding timely payment is extremely strong. A-1
-- this designation indicates the degree of safety regarding timely payment is  
strong.                                                                         

FINANCIAL STATEMENTS

The Fund's audited financial statements for the fiscal year ended December 31,  
1999, including notes thereto and the report of PricewaterhouseCoopers LLP are  
herein incorporated by reference from the Fund's Annual Report. A copy of the   
Fund's Annual Report to Shareholders must accompany the delivery of this        
Statement of Additional Information. The China Growth, Mortgage-Backed          
Securities, MicroCap Portfolios had not commenced operations at December 31,    
1999. On March 15, 2000 the shareholders of The Municipal Bond Portfolio        
redeemed the outstanding shares as of that date and the Portfolio ceased        
operations.                                                                     

58                                                                      

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PART C.   OTHER INFORMATION                                                     

Item 23.  Exhibits                                                              

 (a)(1)    Registrant's Articles of Amendment and Restatement,
                   incorporated by reference to Exhibit 1(a) to Post-Effective
                   Amendment No. 26 to the Registrant's Registration Statement
                on Form N-1A (Registration No. 33-23166), filed with the
               Securities and Exchange Commission via EDGAR (Accession
      No. 0000912057-95-008594) on October 13, 1995.

          (a)(2)    Registrant's Articles Supplementary to Registrant's Articles
            of Amendment and Restatement (reclassifying shares),
                   incorporated by reference to Exhibit 1(b) to Post-Effective
                  Amendment No. 30 to Registrant's Registration Statement on
             Form N-1A (Registration No. 33-23166), filed with the
                   Securities and Exchange Commission via EDGAR (Accession No.
0000912057-96-010828) on May 24, 1996.  

          (a)(3)    Registrant's Articles Supplementary to Registrant's Articles
           of Amendment and Restatement (adding new Technology
                Portfolio), incorporated by reference to Exhibit 1(c) to
                    Post-Effective Amendment No. 30 to Registrant's Registration
                 Statement on Form N-1A (Registration No. 33-23166), filed
             with the Securities and Exchange Commission via EDGAR
             (Accession No. 0000912057-96-010828) on May 24, 1996.

          (a)(4)    Registrant's Articles Supplementary to Registrant's Articles
             of Amendment and Restatement (adding U.S. Equity Plus
                Portfolio), incorporated by reference to Exhibit 1(d) to
                    Post-Effective Amendment No. 38 to Registrant's Registration
                 Statement on Form N-1A (Registration No. 33-23166), filed
             with the Securities and Exchange Commission via EDGAR
                 (Accession No. 0001047469-98-008051)on February 27, 1998.

          (a)(5)    Registrant's Articles Supplementary to Registrant's Articles
                 of Amendment and Restatement (adding European Real Estate
                    and Asian Real Estate Portfolios), incorporated by reference
             to Exhibit 1(e) to Post-Effective Amendment No. 38 to
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
    00001047469-98-008051) on February 27, 1998.

          (a)(6)    Registrant's Articles Supplementary to Registrant's Articles
                  of Amendment and Restatement (adding Class B shares to the
             Money Market Portfolio), incorporated by reference to
          Exhibit 1(f) to Post-Effective Amendment No. 38 to
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
    00001047469-98-008051) on February 27, 1998.

         (a)(7)    Articles of Amendment to Registrant's Articles of Amendment
                 and Restatement (Active Country Allocation Portfolio name
                   changed to Active International Portfolio), incorporated by
                   reference to Exhibit (a)(7) to Post-Effective Amendment No.
                  40 to the Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
  0001047469-99-002378) on January 27, 1999.

         (a)(8)    Articles of Amendment to Registrant's Articles of Amendment
                    and Restatement (Active International Portfolio name changed
                   to Active International Allocation Portfolio), incorporated
                  by reference to Exhibit (a)(8) to Post-Effective Amendment
                 No. 40 to the Registrant's Registration Statement on Form
N-1A                                    

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                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
  0001047469-99-002378) on January 27, 1999.

         (a)(9)    Articles of Amendment to Registrant's Articles of Amendment
                  and Restatement (changing corporate name to Morgan Stanley
              Dean Witter Institutional Fund, Inc.), incorporated by
                   reference to Exhibit (a)(9) to Post-Effective Amendment No.
                  40 to the Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
  0001047469-99-002378) on January 27, 1999.

(a)(10)   Articles of Amendment to Registrant's Articles of 
                   Amendment and Restatement (Aggressive Equity Portfolio name
             changed to Focus Equity Portfolio and Emerging Growth
                  Portfolio name changed to Small Company Growth Portfolio),
filed herewith.                         

        (b)       Amended and Restated By-Laws, incorporated by reference to
                    Exhibit 2 to Post-Effective Amendment No. 33 to Registrant's
             Registration Statement on Form N-1A (Registration No.
                    33-23166), filed with the Securities and Exchange Commission
         via EDGAR (Accession No. 0000912057-97-007488) on
February 28, 1997.                      

(c)(1)    Specimen Security with respect to Morgan Stanley  
               Institutional Fund, Inc. Class A shares incorporated by
                   reference to Exhibit 1(a) (Amended and Restated Articles of
            Incorporation), as amended to date to Post-Effective
               Amendment No. 26 to Registrant's Registration Statement
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
               0000912057-95-008594) on October 13, 1995 and Exhibit 2
             (Amended and Restated By-Laws), as amended to date to
                    Post-Effective Amendment No. 33 to Registrant's Registration
                    Statement, filed with the Securities and Exchange Commission
          via EDGAR (Accession  No. 0000912057-97-007488) on
February 28, 1997.                      

(c)(2)    Specimen Security with respect to Morgan Stanley  
               Institutional Fund, Inc. Class B shares incorporated by
                   reference to Exhibit 1(a) (Amended and Restated Articles of
            Incorporation), as amended to date to Post-Effective
               Amendment No. 26 to Registrant's Registration Statement
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
               0000912057-95-008594) on October 13, 1995 and Exhibit 2
             (Amended and Restated By-Laws), as amended to date to
                    Post-Effective Amendment No. 33 to Registrant's Registration
                    Statement, filed with the Securities and Exchange Commission
          via EDGAR (Accession  No. 0000912057-97-007488) on
February 28, 1997.                      

         (d)(1)    Investment Advisory Agreement between Registrant and Morgan
                   Stanley Asset Management Inc., incorporated by reference to
                Exhibit (d)(1) to Post-Effective Amendment No. 40 to the
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
  0001047469-99-002378) on January 27, 1999.

        (d)(2)    Investment Sub-Advisory Agreement among Registrant, Morgan
                 Stanley Asset Management Inc. and Sun Valley Gold Company
               (with respect to the Gold Portfolio) is incorporated by
                    reference to Exhibit 5(i) to Post-Effective Amendment No. 25
           to Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
0000912057-95-005830) on August 1, 1995.

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 (d)(3)    Supplement to Investment Advisory Agreement between
                   Registrant and Morgan Stanley Asset Management Inc. (adding
           the U.S. Equity Plus Portfolio), is incorporated by
                    reference to Exhibit 5(q) to Post-Effective Amendment No. 38
           to Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
   0001047469-98-008051) on February 27, 1998.

 (d)(4)    Supplement to Investment Advisory Agreement between
                   Registrant and Morgan Stanley Asset Management Inc. (adding
          the Asian and European Real Estate Portfolios), is
                   incorporated by reference to Exhibit 5(r) to Post-Effective
                  Amendment No. 38 to Registrant's Registration Statement on
             Form N-1A (Registration No. 33-23166), filed with the
                   Securities and Exchange Commission via EDGAR (Accession No.
   0001047469-98-008051) on February 27, 1998.

(d)(5)    Amendment to Investment Advisory Agreement between
               Registrant and MSDW Investment Management (reducing the
                annual advisory fee payable by the Emerging Markets Debt
                   Portfolio of the Fund from 1.00% to 0.75%), filed herewith.

       (d)(6)    Sub-Advisory Agreement between MSDW Investment Management
           and Morgan Stanley Dean Witter Advisors Inc., filed
herewith.                               

          (e)(1)    Distribution Agreement between Registrant and Morgan Stanley
                 & Co. Incorporated., incorporated by reference to Exhibit
               6(a) to Post-Effective Amendment No. 25 to Registrant's
             Registration Statement on Form N-1A (Registration No.
                    33-23166), filed with the Securities and Exchange Commission
                   via EDGAR (Accession No. 0000912057-95-005830) on August 1,
1995.                                   

         (e)(2)    Supplement to Distribution Agreement between Registrant and
                    Morgan Stanley & Co. Incorporated, incorporated by reference
             to Exhibit 6(b) to Post-Effective Amendment No. 29 to
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
0000912057-96-007390) on April 30, 1996.

(f)       Not applicable.                                   

       (g)(1)    Mutual Fund Domestic Custody Agreement between Registrant
                  and United States Trust Company, incorporated by reference
             to Exhibit 8(a) to Post-Effective Amendment No. 25 to
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
0000912057-95-005830) August 1, 1995.   

    (g)(2)    International Custody Agreement between Registrant and
                  Morgan Stanley Trust Company, incorporated by reference to
          Exhibit 8(b) to Post-Effective Amendment No. 25 to
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
0000912057-95-005830) on August 1, 1995.

  (g)(3)    Amendment to International Custody Agreement between
                    Registrant and Morgan Stanley Trust Company, incorporated by
                    reference to Exhibit 8(c) to Post-Effective Amendment No. 30
           to Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
0000912057-96-010828) on May 24, 1996.  

  (g)(4)    Amendment to International Custody Agreement between
                Registrant and The Chase Manhattan Bank, filed herewith.

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    (h)(1)    Administration Agreement between Registrant and Morgan
                   Stanley Asset Management Inc., incorporated by reference to
          Exhibit 9(a) to Post-Effective Amendment No. 25 to
        Registrant's Registration Statement on Form N-1A
                  (Registration No. 33-23166), filed with the Securities and
    Exchange Commission via EDGAR (Accession No.
0000912057-95-005830) on August 1, 1995.

    (h)(2)    Administration Agreement between Registrant and United
                  States Trust Company, incorporated by reference to Exhibit
               9(b) to Post-Effective Amendment No. 25 to Registrant's
             Registration Statement on Form N-1A (Registration No.
                    33-23166), filed with the Securities and Exchange Commission
                   via EDGAR (Accession No. 0000912057-95-005830) on August 1,
1995.                                   

(i)       Opinion of Counsel, filed herewith.               

(j)       Consent of Accountant, filed herewith.            

(k)       None.                                             

         (l)       Purchase Agreement, incorporated by reference to Exhibit 13
          to Post-Effective Amendment No. 25 to Registrant's
             Registration Statement on Form N-1A (Registration No.
                    33-23166), filed with the Securities and Exchange Commission
                   via EDGAR (Accession No. 0000912057-95-005830) on August 1,
1995.                                   

       (m)(1)    Distribution Plan with respect to the Class B shares (the
                   "Class B Plan") of the Active Country Allocation Portfolio,
                 incorporated by reference to Exhibit 15 to Post-Effective
                  Amendment No. 33 to Registrant's Registration Statement on
                    Form N-1A (Registration No. 33-23166), filed with Securities
        and Exchange Commission via EDGAR (Accession No.
                  0000912057-97-007488) on February 28, 1997.  The following
        Class B Plans have been omitted because they are
                    substantially identical to the one incorporated by reference
                  herein.  The omitted Class B Plans differ from the Class B
                  Plan incorporated by reference herein only with respect to
              the portfolio to which the Class B Plan relates: Fixed
                    Income, Global Fixed Income, Municipal Bond, Mortgage-Backed
                  Securities, High Yield, Value Equity, Gold, Global Equity,
            International Equity, Asian Equity, European Equity,
                   Japanese Equity, Latin American, Emerging Markets, Emerging
                   Markets Debt, China Growth, Equity Growth, Emerging Growth,
                    MicroCap, Aggressive Equity, U.S. Real Estate, International
                   Magnum, Technology, U.S. Equity Plus, European Real Estate,
      Asian Real Estate and Money Market Portfolios.

(n)       Financial Data Schedules, not applicable.         

    (o)       18f-3 Plan, incorporated by reference to Exhibit 19 to
                    Post-Effective Amendment No. 33 to Registrant's Registration
                 Statement on Form N-1A (Registration No. 33-23166), filed
             with the Securities and Exchange Commission via EDGAR
                  (Accession No. 0000912057-97-007488) on February 28, 1997.

(p)       Code of Ethics, filed herewith                    

(q)       Powers of Attorney, filed herewith.               

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Item 24.  Persons Controlled by or under Common Control with Registrant         

   Provide a list or diagram of all persons directly or indirectly
controlled by or under common control with the Registrant.  For any person      
controlled by another person, disclose the percentage of voting securities owned
by the immediately controlling person or other basis of that person's control.  
For each company, also provide the state or other sovereign power under the laws
of which the company is organized.                                              

None.                                                       

Item 25.   Indemnification                                                      

     State the general effect of any contract, arrangements or statute
under which any director, officer, underwriter or affiliated person of the      
Registrant is insured or indemnified against any liability incurred in their    
official capacity, other than insurance provided by any director, officer,      
affiliated person, or underwriter for their own protection.                     

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

Item 26.  Business and Other Connections of the Investment Adviser              

        Describe any other business, profession, vocation or employment of a
substantial nature in which the investment adviser and each director, officer or
partner of the investment adviser, is or has been, engaged within the last two  
fiscal years for his or her own account or in the capacity of director, officer,
employee, partner or trustee.  (Disclose the name and principal business address
of any company for which a person listed above serves in the capacity of        
director, officer, employee, partner or trustee, and the nature of the          
relationship.)                                                                  

                                                                [Download Table]

 NAME AND POSITION WITH                                                         
    MSDW INVESTMENT                                    POSITION WITH OTHER      
    MANAGEMENT INC.         NAME OF OTHER COMPANY            COMPANY            
------------------------    ---------------------      -------------------      
                                                                                
 Barton M. Biggs            Morgan Stanley & Co.       Managing Director        
    Chairman, Director      Incorporated                                        
    and Managing                                                                
    Director                                                                    

 Richard B. Worley          Miller Anderson &          Portfolio Manager and    
    President, Director,    Sherrerd, LLP              Executive Committee      
    Managing Director                                  Member                   
    and Member of                                                               
    Executive Committee     MAS Fund Distribution,     Registered Representative
                            Inc.                                                
                            Morgan Stanley & Co.       Managing Director        
                            Incorporated                                        

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 Harold J. Schaaff, Jr.     Morgan Stanley & Co.       Managing Director        
    General Counsel,        Incorporated                                        
    Secretary and                                                               
    Managing Director                                                           

 Donald P. Ryan             Morgan Stanley & Co.       Principal                
    Compliance Officer      Incorporated                                        
    and Principal                                                               

 Alexander C. Frank         Morgan Stanley & Co.       Managing Director        
    Treasurer               Incorporated                                        

 Marna C. Whittington       Miller Anderson &          Executive Committee      
    Chief Operating         Sherrerd, LLP              Member                   
    Officer, Managing                                                           
    Director and Member                                                         
    of Executive                                                                
    Committee                                                                   

 Peter D. Caldecott         Morgan Stanley Dean        Managing Director        
    Managing Director       Witter Investment                                   
    and Member of           Management Limited                                  
    Executive Committee                                                         

 Thomas L. Bennett          Morgan Stanley & Co.       Managing Director        
    Member of Executive     Incorporated                                        
    Committee and                                                               
    Portfolio               MAS Fund Distribution,     Director                 
    Manager                 Inc.                                                
                            Miller Anderson &          Portfolio Manager [and   
                            Sherrerd, LLP              Executive Committee      
                                                       Member]                  

 Alan E. Goldberg           Morgan Stanley & Co.       Managing Director        
    Member of Executive     Incorporated                                        
    Committee                                                                   

         In addition, MSDW Investment Management acts as investment adviser or
sub-adviser to the following registered investment companies: CIGNA Charter     
Funds - Large Company Stock Growth Fund; Fifth Third Funds - International      
Equity Fund; The Latin American Discovery Fund, Inc.; The Malaysia Fund, Inc.;  
Morgan Stanley Dean Witter Africa Investment Fund, Inc.; Morgan Stanley Dean    
Witter Asia-Pacific Fund, Inc.; Morgan Stanley Dean Witter                      

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Emerging Markets Debt Fund, Inc.; Morgan Stanley Dean Witter Emerging Markets   
Fund, Inc.; Morgan Stanley Dean Witter Global Opportunity Bond Fund, Inc.;      
Morgan Stanley Dean Witter High Yield Fund, Inc.; Morgan Stanley Dean Witter    
Eastern Europe Fund, Inc.; Morgan Stanley Dean Witter India Investment Fund,    
Inc.; certain portfolios of Morgan Stanley Dean Witter Universal Funds, Inc.;   
Morgan Stanley Dean Witter Strategic Adviser Fund, Inc.; The Pakistan           
Investment Fund, Inc.; The Thai Fund, Inc.; The Turkish Investment Fund,        
Inc.; Aggressive Growth and Asset Allocation, Accounts of Principal Variable    
Contracts Fund, Inc.; Principal Partners Aggressive Growth Fund, Inc.;          
SunAmerica Series Trust - International Diversified Equities Portfolio;         
SunAmerica Series Trust - Worldwide High Income Portfolio; Fortis Series        
Fund, Inc. - Global Asset Allocation Series; Morgan Stanley Dean Witter         
International Fund; Morgan Stanley Dean Witter International SmallCap Fund;     
Morgan Stanley Dean Witter Pacific Growth Fund, Inc.; Morgan Stanley Dean       
Witter Real Estate Fund; Morgan Stanley Dean Witter Variable Investment         
Series - Pacific Growth Portfolio; Morgan Stanley Dean Witter Japan Fund,       
Inc.; Morgan Stanley Dean Witter European Growth Fund Inc.; Morgan Stanley      
Dean Witter Variable Investment Series - European Growth Portfolio; Morgan      
Stanley Dean Witter  Growth Fund; Morgan Stanley Dean Witter Select             
Dimensions Investment Series -- The Growth Portfolio; Endeavor Money Market     
Portfolio; Endeavor Series Trust - Endeavor Asset Allocation Portfolio; EQ      
Advisors Trust - Morgan Stanley Emerging Markets Equity Portfolio; John         
Hancock Variable Series Trust I - Emerging Markets Equity Portfolio; LSA        
Variable Series Trust - MSAM Focused Equity Fund; Manufacturers Investment      
Trust - Global Equity Trust; New England Zenith Fund - Morgan Stanley           
International Magnum Equity Series; North American Funds -Global Equity Fund;   
North American Funds - International Equity Fund; Pacific Select Fund - The     
International Portfolio; Pacific Select Fund - Real Estate Investment Trust     
("REIT") Portfolio; Phoenix Edge Series Fund - Morgan Stanley Focus Equity      
Series; SEI Institutional International Trust - Emerging Markets Equity         
Portfolio; Van Kampen World Portfolio Series Trust - Global Government          
Securities Fund; Van Kampen Life Investment Trust - Global Equity Portfolio;    
Van Kampen Life Investment Trust - Morgan Stanley Real Estate Securities        
Portfolio; Van Kampen Global Managed Assets Fund; Van Kampen Real Estate        
Securities Fund; certain portfolios of the Van Kampen Series Fund, Inc.         

        Describe any other business, profession, vocation or employment of a
substantial nature in which the investment sub-adviser, and each director,      
officer or partner of the investment sub-adviser, is or has been, engaged within
the last two fiscal years, for his or her own account or in the capacity of     
director, officer, employee, partner or trustee.  (Disclose the name and        
principal business address of any company for which a person listed above serves
in the capacity of director, officer, employee, partner or trustee, and the     
nature of the relationship.)                                                    

   During the last two fiscal years, no director or officer of Sun
Valley Gold Company or Morgan Stanley Dean Witter Advisors Inc., the            
Registrant's investment sub-advisers, has engaged in any other business,        
profession, vocation or employment of a substantial nature other than that of   
the business of investment management and, through affiliates, investment       
banking.                                                                        

Item 27.                                                                        
Principal Underwriters                                                        

  (a)  State the name of each investment company (other than the
Registrant) for which each principal underwriter currently distributing         
securities of the Registrant also acts as a principal underwriter, depositor or 
investment adviser.                                                             

    Morgan Stanley & Co. Incorporated acts as distributor for Morgan
     Stanley Dean Witter Institutional Fund, Inc., Morgan Stanley Dean
         Witter Universal Funds, Inc. and Morgan Stanley Dean Witter Strategic
     Adviser Fund, Inc., all registered open-end management investment
companies.                                                  

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          (b)  Provide the information with respect to each director, officer or
partner of each principal underwriter named in answer to item 20.               

                                                        [Enlarge/Download Table]

                                   POSITION AND                                        
                                   OFFICES WITH                   POSITION AND         
NAME AND PRINCIPAL                 MORGAN STANLEY                 OFFICES WITH         
BUSINESS ADDRESS*                  & CO. INCORPORATED             REGISTRANT           
------------------                 ------------------             -------------        
                                                                                       
Barton M. Biggs                    Director                       Chairman and Director

Bruce D. Fiedorek                  Director and Vice Chairman                          

Mario Francescotti                 Director                                            

Peter F. Karches                   Director, President and                             
                                   Chief Operating Officer                             

John J. Mack                       Director                                            

Robert A. Metzler                  Director                                            

Stephan F. Newhouse                Director and Vice Chairman                          

Ralph L. Pellecchio                General Counsel and Secretary                       

Joseph R. Perella                  Director                                            

Philip J. Purcell                  Director                                            

John H. Schaefer                   Director                                            

Robert G. Scott                    Director and Chief Financial                        
                                   Officer                                             

John S. Wadswoth, Jr.              Director                                            

Sir David Alan Walker              Director                                            

Alexander C. Frank                 Treasurer                                           
-----------------------                                                                
Morgan Stanley & Co. Incorporated                                                      
*1585 Broadway                                                                         
New York, NY  10036                                                                    

(c)  Not applicable.                                        

Item 28.  Location of Accounts and Records                                      

   State the name and address of each person maintaining principal
possession of each account, book or other document required to be maintained by 
section 31(a) of the 1940 Act [15 U.S.C. 80a-30(a)] and the rules under that    
section.                                                                        

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         Chase Global Funds Services Company,  Registrant's sub-transfer agent
and sub-dividend disbursing agent, P.O. Box 2798, Boston, Massachusetts,        
02208-2798, maintains physical possession of each such account, book or other   
document of the Fund.                                                           

In particular, with respect to the records required by Rule 
31a-1(b)(1), Chase Global Funds Services Company maintains physical possession  
of all journals containing itemized daily records of all purchases and sales of 
securities, including sales and redemptions of Fund securities, and also        
maintains physical possession all receipts and deliveries of securities         
(including certificate numbers if such detail is not recorded by custodian or   
transfer agent), all receipts and disbursements of cash, and all other debts and
credits.                                                                        

       In addition, Morgan Stanley Dean Witter Investment Management Inc.,
Registrant's investment adviser and administrator, 1221 Avenue of the Americas, 
New York, New York 10020, maintains possession of the Fund's corporate          
organizational records, in addition to certain other records required by Rule   
31a-1(b).                                                                       

Item 29.  Management Services                                                   

Provide a summary of the substantive provisions of any      
management-related service contract not discussed in part A or part B,          
disclosing the parties to the contract and the total amount paid and by whom,   
for the fund's last three fiscal years.                                         

Not applicable.                                             

Item 30.  Undertakings                                                          

      In initial registration statements filed under the Securities Act,
provide an undertaking to file an amendment to the registration statement with  
certified financial statements showing the initial capital received before      
accepting subscriptions from more than 25 persons if the Fund intends to raise  
its initial capital under section 14(a)(3)[15U.S.C. 80a-14(a)(3)].              

Not applicable.                                             

     C-9

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    SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended, the Registrant 
certifies that it meets all of the requirements for effectiveness of this       
Amendment pursuant to Rule 485(b) under the 1933 Act and has duly caused this   
Amendment to its Registration Statement to be signed on its behalf by the       
undersigned, duly authorized, in the City of New York and State of New York on  
April __, 2000.                                                                 

           MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.

By:  /s/ Harold J. Schaaff, Jr.         
--------------------------    
Harold J. Schaaff, Jr.        
President                     

Pursuant to the requirements of the 1933 Act, this Amendment to the   
Registration Statement has been signed below by the following persons in the    
capacities and on the dates indicated.                                          

                                                                [Download Table]

SIGNATURE                        TITLE                          DATE          
-------------------------------  -----------------------------  ---------     
                                                                              
/s/ Harold J. Schaaff, Jr.       President                      April 28, 2000
-------------------------------  (Principal Executive                         
Harold J. Schaaff, Jr.           Officer)                                     

*/s/ Barton M. Biggs             Director (Chairman)            April 28, 2000
-------------------------------                                               
Barton M. Biggs                                                               

*/s/ Fergus Reid                 Director                       April 28, 2000
-------------------------------                                               
Fergus Reid                                                                   

*/s/ Frederick O. Robertshaw     Director                       April 28, 2000
-------------------------------                                               
Frederick O. Robertshaw                                                       

*/s/ Andrew McNally, IV          Director                       April 28, 2000
-------------------------------                                               
Andrew McNally IV                                                             

*/s/ John D. Barrett, II         Director                       April 28, 2000
-------------------------------                                               
John D. Barrett II                                                            

*/s/ Gerard E. Jones             Director                       April 28, 2000
-------------------------------                                               
Gerard E. Jones                                                               

*/s/ Samuel T. Reeves            Director                       April 28, 2000
-------------------------------                                               
Samuel T. Reeves                                                              

*/s/ Graham E. Jones             Director                       April 28, 2000
-------------------------------                                               
Graham E. Jones                                                               

*/s/ John A. Levin               Director                       April 28, 2000
-------------------------------                                               
John A. Levin                                                                 

*/s/ William G. Morton, Jr.      Director                       April 28, 2000
-------------------------------                                               
William G. Morton, Jr.                                                        

/s/ Belinda Anne Brady           Treasurer                      April 28, 2000
-------------------------------                                               
Belinda Anne Brady                                                            

*By: /s/ Harold J. Schaaff, Jr.                                                 
--------------------------                                            
Harold J. Schaaff, Jr.                                                
Attorney-In-Fact                                                      

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                                       MORGAN STANLEY INSTITUTIONAL FUND, INC.

                                         INDEX OF EXHIBITS

                                                        [Enlarge/Download Table]

 EDGAR                                                                                                                     
 EXHIBIT                                                                                                                   
 NUMBER                        DOCUMENT                                                                                    
 -------  ---------------------------------------------------------------------------------------------------------------- 
                                                                                                                           
          (a)(1)    Registrant's Articles of Amendment and Restatement, incorporated by reference to Exhibit 1(a) to Post- 
                    Effective Amendment No. 26 to the Registrant's Registration Statement on Form N-1A (Registration No.   
                    33-23166), filed with the Securities and Exchange Commission via EDGAR (Accession No. 0000912057-95-   
                    008594) on October 13, 1995.                                                                           

          (a)(2)    Registrant's Articles Supplementary to Registrant's Articles of Amendment and Restatement              
                    (reclassifying shares), incorporated by reference to Exhibit 1(b) to Post-Effective Amendment No. 30   
                    to Registrant's Registration Statement on Form N-1A (Registration No. 33-23166), filed with the        
                    Securities and Exchange Commission via EDGAR (Accession No. 0000912057-96-010828) on May 24, 1996.     

          (a)(3)    Registrant's Articles Supplementary to Registrant's Articles of Amendment and Restatement (adding new  
                    Technology Portfolio), incorporated by reference to Exhibit 1(c) to Post-Effective Amendment No. 30 to 
                    Registrant's Registration Statement on Form N-1A (Registration No. 33-23166), filed with the           
                    Securities and Exchange Commission via EDGAR (Accession No. 0000912057-96-010828) on May 24, 1996.     

          (a)(4)    Registrant's Articles Supplementary to Registrant's Articles of Amendment and Restatement (adding U.S. 
                    Equity Plus Portfolio), incorporated by reference to Exhibit 1(d) to Post-Effective Amendment No. 38   
                    to Registrant's Registration Statement on Form N-1A (Registration No. 33-23166), filed with the        
                    Securities and Exchange Commission via EDGAR (Accession No. 0001047469-98-008051)on February 27, 1998. 

          (a)(5)    Registrant's Articles Supplementary to Registrant's Articles of Amendment and Restatement (adding      
                    European Real Estate and Asian Real Estate Portfolios), incorporated by reference to Exhibit 1(e) to   
                    Post-Effective Amendment No. 38 to Registrant's Registration Statement on Form N-1A (Registration No.  
                    33-23166), filed with the Securities and Exchange Commission via EDGAR (Accession No. 00001047469-98-  
                    008051) on February 27, 1998.                                                                          

          (a)(6)    Registrant's Articles Supplementary to Registrant's Articles of Amendment and Restatement (adding      
                    Class B shares to the Money Market Portfolio), incorporated by reference to Exhibit 1(f) to Post-      
                    Effective Amendment No. 38 to Registrant's Registration Statement on Form N-1A (Registration No. 33-   
                    23166), filed with the Securities and Exchange Commission via EDGAR (Accession No. 00001047469-98-     
                    008051) on February 27, 1998.                                                                          

          (a)(7)    Articles of Amendment to Registrant's Articles of Amendment and Restatement (Active Country Allocation 
                    Portfolio name changed to Active International Portfolio), incorporated by reference to Exhibit (a)(7) 
                    to Post-Effective Amendment No. 40 to the Registrant's Registration Statement on Form N-1A             
                    (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR (Accession    
                    No. 0001047469-99-002378) on January 27, 1999.                                                         

          (a)(8)    Articles of Amendment to Registrant's Articles of Amendment and Restatement (Active International      
                    Portfolio name changed to Active International Allocation Portfolio), incorporated by reference to     
                    Exhibit (a)(8) to Post-Effective Amendment No. 40 to the Registrant's Registration Statement on Form   
                    N-1A (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR          
                    (Accession No. 0001047469-99-002378) on January 27, 1999.                                              

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          (a)(9)    Articles of Amendment to Registrant's Articles of Amendment and Restatement (changing corporate name   
                    to Morgan Stanley Dean Witter Institutional Fund, Inc.), incorporated by reference to Exhibit (a)(9)   
                    to Post-Effective Amendment No. 40 to the Registrant's Registration Statement on Form N-1A             
                    (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR (Accession    
                    No. 0001047469-99-002378) on January 27, 1999.                                                         

EX-99.    (a)(10)   Articles of Amendment to Registrant's Articles of Amendment and Restatement (Aggressive Equity         
                    Portfolio name changed to Focus Equity Portfolio and Emerging Growth Portfolio name changed to Small   
                    Company Growth Portfolio), filed herewith.                                                             

          (b)       Amended and Restated By-Laws, incorporated by reference to Exhibit 2 to Post-Effective Amendment       
                    No. 33 to Registrant's Registration Statement on Form N-1A (Registration No. 33-23166), filed with the 
                    Securities and Exchange Commission via EDGAR (Accession No. 0000912057-97-007488) on February 28, 1997.

          (c)(1)    Specimen Security with respect to Morgan Stanley Institutional Fund, Inc. Class A shares incorporated  
                    by reference to Exhibit 1(a) (Amended and Restated Articles of Incorporation), as amended to date to   
                    Post-Effective Amendment No. 26 to Registrant's Registration Statement (Registration No. 33-23166),    
                    filed with the Securities and Exchange Commission via EDGAR (Accession No. 0000912057-95-008594) on    
                    October 13, 1995 and Exhibit 2 (Amended and Restated By-Laws), as amended to date to Post-Effective    
                    Amendment No. 33 to Registrant's Registration Statement, filed with the Securities and Exchange        
                    Commission via EDGAR (Accession  No. 0000912057-97-007488) on February 28, 1997.                       

          (c)(2)    Specimen Security with respect to Morgan Stanley Institutional Fund, Inc. Class B shares incorporated  
                    by reference to Exhibit 1(a) (Amended and Restated Articles of Incorporation), as amended to date to   
                    Post-Effective Amendment No. 26 to Registrant's Registration Statement (Registration No. 33-23166),    
                    filed with the Securities and Exchange Commission via EDGAR (Accession No. 0000912057-95-008594) on    
                    October 13, 1995 and Exhibit 2 (Amended and Restated By-Laws), as amended to date to Post-Effective    
                    Amendment No. 33 to Registrant's Registration Statement, filed with the Securities and Exchange        
                    Commission via EDGAR (Accession  No.0000912057-97-007488) on February 28, 1997.                        

          (d)(1)    Investment Advisory Agreement between Registrant and Morgan Stanley Asset Management Inc.,             
                    incorporated by reference to Exhibit (d)(1) to Post-Effective Amendment No. 40 to the Registrant's     
                    Registration Statement on Form N-1A (Registration No. 33-23166), filed with the Securities and         
                    Exchange Commission via EDGAR (Accession No. 0001047469-99-002378) on January 27, 1999.                

          (d)(2)    Investment Sub-Advisory Agreement among Registrant, Morgan Stanley Asset Management Inc. and Sun       
                    Valley Gold Company (with respect to the Gold Portfolio) is incorporated by reference to Exhibit 5(i)  
                    to Post-Effective Amendment No. 25 to Registrant's Registration Statement on Form N-1A (Registration   
                    No. 33-23166), filed with the Securities and Exchange Commission via EDGAR (Accession No. 0000912057-  
                    95-005830) on August 1, 1995.                                                                          

          (d)(3)    Supplement to Investment Advisory Agreement between Registrant and Morgan Stanley Asset Management     
                    Inc. (adding the U.S. Equity Plus Portfolio), is incorporated by reference to Exhibit 5(q) to Post-    
                    Effective Amendment No. 38 to Registrant's Registration Statement on Form N-1A (Registration No. 33-   
                    23166), filed with the Securities and Exchange Commission via EDGAR (Accession No. 0001047469-98-      
                    008051) on February 27, 1998.                                                                          

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          (d)(4)    Supplement to Investment Advisory Agreement between Registrant and Morgan Stanley Asset Management     
                    Inc. (adding the Asian and European Real Estate Portfolios), is incorporated by reference to Exhibit   
                    5(r) to Post-Effective Amendment No. 38 to Registrant's Registration Statement on Form N-1A            
                    (Registration No. 33-23166), filed with the Securities and Exchange Commission on February 27, 1998.   

EX-99.    (d)(5)    Amendment to Investment Advisory Agreement between Registrant and MSDW Investment Management (reducing 
                    the annual advisory fee payable by the Emerging Markets Debt Portfolio of the Fund from 1.00% to       
                    0.75%), filed herewith.                                                                                

EX-99.    (d)(6)    Sub-Advisory Agreement between Registrant and Morgan Stanley Dean Witter Advisors Inc., filed herewith.

          (e)(1)    Distribution Agreement between Registrant and Morgan Stanley & Co. Incorporated., incorporated by      
                    reference to Exhibit 6(a) to Post-Effective Amendment No. 25 to Registrant's Registration Statement on 
                    Form N-1A (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR     
                    (Accession No. 0000912057-95-005830) on August 1, 1995.                                                

          (e)(2)    Supplement to Distribution Agreement between Registrant and Morgan Stanley & Co. Incorporated,         
                    incorporated by reference to Exhibit 6(b) to Post-Effective Amendment No. 29 to Registrant's           
                    Registration Statement on Form N-1A (Registration No. 33-23166), filed with the Securities and         
                    Exchange Commission via EDGAR (Accession No. 0000912057-96-007390) on April 30, 1996.                  

          (f)       Not applicable.                                                                                        

          (g)(1)    Mutual Fund Domestic Custody Agreement between Registrant and United States Trust Company,             
                    incorporated by reference to Exhibit 8(a) to Post-Effective Amendment No. 25 to Registrant's           
                    Registration Statement on Form N-1A (Registration No. 33-23166), filed with the Securities and         
                    Exchange Commission via EDGAR (Accession No. 0000912057-95-005830) August 1, 1995.                     

          (g)(2)    International Custody Agreement between Registrant and [Morgan Stanley Trust Company], incorporated by 
                    reference to Exhibit 8(b) to Post-Effective Amendment No. 25 to Registrant's Registration Statement on 
                    Form N-1A (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR     
                    (Accession No. 0000912057-95-005830) on August 1, 1995.                                                

          (g)(3)    Amendment to International Custody Agreement between Registrant and [Morgan Stanley Trust Company],    
                    incorporated by reference to Exhibit 8(c) to Post-Effective Amendment No. 30 to Registrant's           
                    Registration Statement on Form N-1A (Registration No. 33-23166), filed with the Securities and         
                    Exchange Commission via EDGAR (Accession No. 0000912057-96-010828) on May 24, 1996.                    

EX-99.    (g)(4)    Amendment to International Custody Agreement                                                           
                    between Registrant and The Chase Manhattan Bank, filed herewith.                                       

          (h)(1)    Administration Agreement between Registrant and Morgan Stanley Asset Management Inc., incorporated by  
                    reference to Exhibit 9(a) to Post-Effective Amendment No. 25 to Registrant's Registration Statement on 
                    Form N-1A (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR     
                    (Accession No. 0000912057-95-005830) on August 1, 1995.                                                

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          (h)(2)    Administration Agreement between Registrant and United States Trust Company, incorporated by reference 
                    to Exhibit 9(b) to Post-Effective Amendment No. 25 to Registrant's Registration Statement on Form N-1A 
                    (Registration No. 33-23166), filed with the Securities and Exchange Commission via EDGAR (Accession    
                    No. 0000912057-95-005830) on August 1, 1995.                                                           

EX-99.    (i)       Opinion of Counsel, filed herewith.                                                                    

EX-99.    (j)        Consent of Accountant, filed herewith.                                                                

          (k)        None.                                                                                                 

          (l)        Purchase Agreement, incorporated by reference to Exhibit 13 to Post-Effective Amendment No. 25 to     
                     Registrant's Registration Statement on Form N-1A (Registration No. 33-23166), filed with the          
                     Securities and Exchange Commission via EDGAR (Accession No. 0000912057-95-005830) on August 1, 1995.  

          (m)(1)     Distribution Plan with respect to the Class B shares (the "Class B Plan") of the Active Country       
                     Allocation Portfolio, incorporated by reference to Exhibit 15 to Post-Effective Amendment No. 33 to   
                     Registrant's Registration Statement on Form N-1A (Registration No. 33-23166), filed with Securities   
                     and Exchange Commission via EDGAR (Accession No. 0000912057-97-007488) on February 28, 1997.  The     
                     following Class B Plans have been omitted because they are substantially identical to the one         
                     incorporated by reference herein.  The omitted Class B Plans differ from the Class B Plan incorporated
                     by reference herein only with respect to the portfolio to which the Class B Plan relates: Fixed       
                     Income, Global Fixed Income, Municipal Bond, Mortgage-Backed Securities, High Yield, Value Equity,    
                     Gold, Global Equity, International Equity, Asian Equity, European Equity, Japanese Equity, Latin      
                     American, Emerging Markets, Emerging Markets Debt, China Growth, Equity Growth, Emerging Growth,      
                     MicroCap, Aggressive Equity, U.S. Real Estate, International Magnum, Technology, U.S. Equity Plus,    
                     European Real Estate, Asian Real Estate and Money Market Portfolios.                                  

EX-27.    (n)        Financial Data Schedules, not applicable.                                                             

          (o)        18f-3 Plan, incorporated by reference to Exhibit 19 to Post-Effective Amendment No. 33 to Registrant's
                     Registration Statement on Form N-1A (Registration No. 33-23166), filed with the Securities and        
                     Exchange Commission via EDGAR (Accession No. 0000912057-97-007488) on February 28, 1997.              

EX-99.    (p)        Code of Ethics, filed herewith                                                                        

EX-99.    (q)        Powers of attorney, filed herewith