497 1 a497.txt 497 SUPPLEMENT DATED JULY 27, 2000 TO PROSPECTUS DATED MAY 1, 2000 OF EQUITY GROWTH PORTFOLIO FOCUS EQUITY PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO VALUE EQUITY PORTFOLIO TECHNOLOGY PORTFOLIO PORTFOLIOS OF THE MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC. P.O. BOX 2798 BOSTON, MASSACHUSETTS 02208-2798 ------------------------ The Prospectus is hereby amended and supplemented to add risk disclosure regarding each Portfolio's investments in initial public offerings and to reflect changes in the comparative indices for the Small Company Growth and Technology Portfolios. ------------------------ The following paragraph is added to the "ADDITIONAL RISK FACTORS AND INFORMATION" section on page 7: INITIAL PUBLIC OFFERINGS The Portfolios may purchase shares issued as part of, or a short period after, a company's initial public offering ("IPOs"), and may at times dispose of those shares shortly after their acquisition. A Portfolio's purchase of shares issued in IPOs exposes it to the risks associated with companies that have little operating history as public companies, as well as to the risks inherent in those sectors of the market where these new issuers operate. The market for IPO issuers has been volatile, and share prices of newly-public companies have fluctuated significantly over short periods of time. ------------------------ The Russell 2000 Growth Index is being added as the primary comparative index for the Small Company Growth Portfolio. The Russell 2000 Index will remain as a secondary comparative index. MSDW Investment Management believes that the Russell 2000 Growth Index is more representative of the growth-oriented companies in the Small Company Growth Portfolio. Accordingly, the chart on page 3 is hereby deleted and replaced with the following: AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)
CLASS A CLASS B (COMMENCED (COMMENCED RUSSELL 2000 RUSSELL 2000 OPERATIONS ON OPERATIONS ON GROWTH INDEX* INDEX** NOVEMBER 1, 1989) JANUARY 2, 1996) CLASS A CLASS B CLASS A ------------------------------------------------------------------------------------------------------------------------ PAST ONE YEAR 96.45% 95.97% 43.09% 43.09% 21.26% ------------------------------------------------------------------------------------------------------------------------ PAST FIVE YEARS 31.00% N/A 18.99% N/A 16.69% ------------------------------------------------------------------------------------------------------------------------ PAST TEN YEARS 19.43% N/A 13.51% N/A 13.40% ------------------------------------------------------------------------------------------------------------------------ SINCE INCEPTION 19.78% 30.09% 13.52%*** 16.78%*** 13.26% RUSSELL 2000 INDEX** CLASS B --------------------- PAST ONE YEAR 21.26% --------------------- PAST FIVE YEARS N/A --------------------- PAST TEN YEARS N/A --------------------- SINCE INCEPTION 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 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 EACH INDEX 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 RUSSELL 2000 GROWTH INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX COMPRISED OF THOSE COMPANIES OF THE RUSSELL 2000 INDEX WITH HIGHER FORECASTED GROWTH VALUES AND HIGHER PRICE-TO-BOOK RATIOS. **THE 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. ***THE INCEPTION DATES FOR THE RUSSELL 2000 GROWTH INDEX FOR CLASS A AND CLASS B SHARES ARE NOVEMBER 30, 1989 AND JANUARY 31, 1996, RESPECTIVELY. ---------------------------------- The Nasdaq Composite Index is being added as the primary comparative index for the Technology Portfolio. The S&P 500 Index will remain as a secondary comparative index. MSDW Investment Management believes that the Nasdaq Composite Index, which is one of the most widely followed and quoted major market indices and includes over 5,000 companies, is more representative of the companies in the Technology Portfolio. Accordingly, the chart on page 5 is hereby deleted and replaced with the following: AVERAGE ANNUAL TOTAL RETURN (FOR THE YEAR ENDED DECEMBER 31, 1999)
CLASS A CLASS B (COMMENCED (COMMENCED OPERATIONS ON OPERATIONS ON NASDAQ COMPOSITE SEPTEMBER 16, 1996) SEPTEMBER 16, 1996) INDEX* S&P 500 INDEX** -------------------------------------------------------------------------------------------------------------- PAST ONE YEAR 160.62% 160.26% 85.59% 21.04% -------------------------------------------------------------------------------------------------------------- SINCE INCEPTION 71.47% 71.13% 45.16% 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 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. HOW THE PORTFOLIO HAS PERFORMED IN THE PAST DOES NOT NECESSARILY INDICATE HOW THE PORTFOLIO WILL PERFORM IN THE FUTURE. *THE NASDAQ COMPOSITE INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX COMPRISED OF ALL COMMON STOCKS LISTED ON THE NASDAQ STOCK MARKET. **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. ---------------------------------- PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE