<PAGE>
TCW/DW GLOBAL TELECOM TRUST Two World Trade Center,
LETTER TO THE SHAREHOLDERS May 31, 1998 New York, New York 10048
DEAR SHAREHOLDER:
The fiscal year ended May 31, 1998, was quite a challenging period for
investors in international and technology stocks. During this period,
investor opinion vacillated regarding the extent and ramifications of the
Asian economic crisis. Companies outside the large-cap universe were the
first to be affected by the Asian turmoil as investors sought safety in more
liquid, better known companies. Technology stocks were hit particularly hard
during the year, since Asia accounts for a significant portion of technology
demand, increasing investor concerns regarding the performance of this
sector.
PERFORMANCE AND PORTFOLIO
For the twelve-month period ended May 31, 1998, TCW/DW Global Telecom Trust's
Class B shares produced a total return of 27.30 percent, compared to a return
of 30.67 percent for the S&P 500 Composite Stock Price Index (S&P 500) and
13.20 percent for the Lipper Science and Technology Funds Index (Lipper
Index). Since their inception on July 28, 1997, the Fund's Class A, C and D
shares had total returns of 12.64 percent, 11.86 percent and 12.80 percent,
respectively. During this period, the Fund's benchmarks, the Lipper Index and
the S&P 500, returned -1.64 percent and 18.22 percent, respectively. (Note:
the total return for the Lipper Index is for the period July 31, 1997 through
May 31, 1998.) The performance of the Fund's four share classes varies
because of differing expenses.
The Fund more than doubled the performance of its peer group during this
fiscal year, although it did underperform the broader S&P 500. Unlike the S&P
500, the Fund invests primarily in domestic and foreign companies operating
in all aspects of the telecommunications and information industries. As
mentioned, these sectors were negatively influenced by the Asian crisis and
thus underperformed the general market. Furthermore, the S&P 500, which is
capitalization weighted, benefited from the strong outperformance of
large-cap stocks relative to small-cap stocks, which include many
technology-related companies.
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
LETTER TO THE SHAREHOLDERS May 31, 1998
The accompanying chart illustrates the growth of a hypothetical $10,000
investment in the Fund's Class B shares from inception (August 28, 1996)
through May 31, 1998, versus a similar investment in the issues that comprise
the S&P 500 Index and the Lipper Science and Technology Funds Index.
The Fund's unique portfolio construction by market segment and geographical
location has provided an added degree of diversification. The Fund's North
American holdings (approximately 71 percent of net assets), dominated by
smaller niche companies, contributed significantly to its performance. The
Fund's foreign holdings (29 percent of net assets) also contributed
positively to the Fund's performance despite the tremendous volatility
experienced abroad.
Within the telecommunications and information industries, approximately 35
percent of the portfolio is invested in transporters of telecommunications
(e.g., voice, video and data), 23 percent in enabling technology (e.g.,
Cisco), 21 percent in content providers (e.g., Sterling Commerce) and 18
percent in infrastructure (e.g., Ericsson).
Over the past year, one of the major investment themes within the
telecommunications arena has been Internet commerce. Growth within this
sector is forecast at more than 75 percent this year, to almost $5 billion.
By the year 2000, this growth is expected to double to $10 billion. The
Fund's addition of Infoseek increased its exposure to this growing sector to
nearly 8 percent of the portfolio.
LOOKING AHEAD
While the telecommunications sector may continue to be negatively affected by
the Asian crisis over the short-term, TCW Funds Management, Inc., the Fund's
adviser, believes that the telecommunications area continues to offer
outstanding long-term investment opportunities. Supporting this view are
several positive long-term trends, including the worldwide infrastructure
expansion of existing communications networks, the growth of wireless
networks and the gradual shift from analog to digital technologies.
Furthermore, TCW believes that the various industries within the
telecommunications sector will continue to converge via mergers and strategic
acquisitions. Recent examples of this trend include the acquisitions of MCI
by WorldCom, TCI and Teleport by AT&T, and Tellabs by Ciena, as well as the
continuing consolidations among the regional telephone companies. TCW expects
the pace of acquisition to accelerate over the next few years and believes
that the Fund is well positioned to benefit from further convergence within
the telecommunications industry.
2
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
LETTER TO THE SHAREHOLDERS May 31, 1998
We appreciate your ongoing support of TCW/DW Global Telecom Trust and look
forward to continuing to serve your investment needs and objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
3
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FUND PERFORMANCE May 31, 1998
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
GROWTH OF $10,000 Class--B
($ in thousands)
<TABLE>
<CAPTION>
Date TOTAL S&P 500(4) LIPPER(5)
- ---- ----- ------- ------
<S> <C> <C> <C>
August 28, 1996 $10,000 $10,000 $10,000
May 31, 1997 $11,430 $12,978 $12,233
May 31, 1998 $14,151(3) $16,958 $13,847
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. PERFORMANCE FOR CLASS
A, CLASS C, AND CLASS D SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B
SHARES SHOWN ABOVE DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
AVERAGE ANNUAL TOTAL RETURNS*
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES**
- --------------------------------------------------
PERIOD ENDED 5/31/98
- ------------------------
<S> <C> <C>
1 year 27.30%(1) 22.30%(2)
From Inception (8/28/96) 23.83%(1) 21.87%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES++
- --------------------------------------------------
PERIOD ENDED 5/31/98
- ------------------------
<S> <C> <C>
FROM INCEPTION (7/28/97) 11.86%(1) 10.86%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS A SHARES+
- -------------------------------------------------
PERIOD ENDED 5/31/98
- ------------------------
<S> <C> <C>
From Inception (7/28/97) 12.64%(1) 6.73%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES#
- --------------------------------------------------
PERIOD ENDED 5/31/98
- ------------------------
<S> <C>
From Inception (7/28/97) 12.80%(1)
</TABLE>
- ------------
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction
of the maximum applicable sales charge. See the Fund's current
prospectus for complete details on fees and sales charges.
(3) Closing value after the deduction of a 4% CDSC, assuming a complete
redemption on May 31, 1998.
(4) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the
Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(5) The Lipper Science and Technology Funds Index is an equally-weighted
performance index of the largest qualifying funds (based on net assets)
in the Lipper Science and Technology Funds objective. The Index, which
is adjusted for capital gains distributions and income dividends, is
unmanaged and should not be considered an investment. There are
currently 10 funds represented in this Index.
* For periods of less than one year, the fund quotes its total return on a
non-annualized basis.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5%.
The CDSC declines to 0% after six years.
+ The maximum front-end sales charge for Class A is 5.25%.
++ The maximum contingent deferred sales charge for Class C shares is 1%
for shares redeemed within one year of purchase.
# Class D shares have no sales charge.
4
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
PORTFOLIO OF INVESTMENTS May 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCKS
AND RIGHTS (99.1%)
BRAZIL (5.7%)
Telephones
1,600,000 Cia Riograndense Telecomunicacoes S.A. (Pref.) .................. $1,724,617
42,341 Cia Riograndense Telecomunicacoes S.A. (Rights)* ................ --
Telecomunicacoes Brasileiras
20,000 S.A.-Telebras (ADR) ............................................ 2,132,500
11,000,000 Telecomunicacoes de Minas Gerais-Telemig ........................ 1,109,179
11,000,000 Telecomunicacoes de Minas Gerais-Telemig (Pref.)* ............... 564,152
25,000,000 Telecomunicacoes do Rio de Janeiro S.A.-Telerj .................. 2,086,231
25,000,000 Telecomunicacoes do Rio de Janeiro S.A.-Telerj (Pref.)* ......... 1,825,452
--------------
TOTAL BRAZIL ................................................... 9,442,131
--------------
CANADA (4.7%)
Computer Software
95,300 Cognicase Inc. ................................................. 1,453,325
114,100 CrossKeys Systems Corp.* ....................................... 1,162,394
600,000 Sanga International Inc.* ** ................................... 3,000,000
--------------
5,615,719
--------------
Telecommunications
190,400 Clearnet Communications Inc. (Class A)* ........................ 2,165,800
--------------
TOTAL CANADA ................................................... 7,781,519
--------------
CHINA (0.8%)
Telephones
40,000 China Telecom (Hong Kong) Ltd. (ADR)* .......................... 1,425,000
--------------
FINLAND (2.4%)
Telecommunications
60,588 Nokia Corp. (ADR) .............................................. 3,934,433
--------------
HONG KONG (0.9%)
Telecommunications
160,000 APT Satellite Holdings Ltd. (ADR)* ............................. 1,520,000
--------------
INDIA (0.9%)
Telecommunications
125,000 Videsh Sanchar Nigam Ltd. (GDR)* ............................... $1,485,000
--------------
ISRAEL (2.4%)
Telecommunications
70,000 ECI Telecommunications Limited Designs .......................... 2,213,750
60,000 Gilat Satellite Networks Ltd. .................................. 1,860,000
--------------
TOTAL ISRAEL ................................................... 4,073,750
--------------
ITALY (2.7%)
Communications Equipment
800,000 Pirelli SpA .................................................... 2,636,693
--------------
Telecommunications
250,000 Telecom Italia SpA .............................................. 1,887,310
--------------
TOTAL ITALY .................................................... 4,524,003
--------------
JAPAN (3.8%)
Computers
130,000 Fujitsu Ltd. .................................................... 1,488,657
--------------
Electronic Components
17,700 Hitachi Ltd. (ADR) ............................................. 1,174,838
--------------
Telephones
1,300 DDI Corp. ...................................................... 3,726,323
--------------
TOTAL JAPAN .................................................... 6,389,818
--------------
MEXICO (1.3%)
Telephones
44,400 Telefonos de Mexico S.A. de C.V. (Series L)(ADR) ............... 2,106,225
--------------
NETHERLANDS (0.9%)
Electronics
15,000 Philips Electronics N.V. ....................................... 1,426,875
--------------
PERU (1.3%)
Telephones
100,000 Telefonica del Peru S.A. (ADR) ................................. 2,162,500
--------------
RUSSIA (0.6%)
Telephones
20,000 Vimpel-Communications (ADR)* ................................... 968,750
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
PORTFOLIO OF INVESTMENTS May 31, 1998, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
SINGAPORE (0.6%)
Wire & Cable
151,300 Asia Pacific Wire & Cable Corp.* ................................ $1,096,925
--------------
SWEDEN (2.5%)
Telecommunications
151,800 Ericsson (L.M.) Telephone Co. (Class B)(ADR) .................... 4,231,425
--------------
UNITED KINGDOM (1.7%)
Telecommunications
95,000 Esat Telecom Group PLC (ADR)* ................................... 2,850,000
--------------
UNITED STATES (64.8%)
Broadcast Media
Cox Communications, Inc.
46,600 (Class A)* ...................................................... 2,035,837
61,400 Sinclair Broadcast Group, Inc.* ................................. 1,561,862
--------------
3,597,699
--------------
Business Services
44,700 Cognizant Corp. ................................................. 2,380,275
109,800 LCC International, Inc. (Class A)* .............................. 1,756,800
69,000 Omnicom Group, Inc. ............................................ 3,230,062
--------------
7,367,137
--------------
Cable Television Equipment
42,000 CIENA Corp.* ................................................... 2,173,500
--------------
Cable/Cellular
57,200 Houston Industries, Inc. $3.22 (Conv. Pref.) .................... 3,982,550
--------------
Commercial & Consumer Services
100,800 Cendant Corp.* .................................................. 2,186,100
--------------
Communications-Equipment & Software
41,300 Cisco Systems, Inc.* ............................................ 3,118,150
117,600 Pairgain Technologies, Inc.* .................................... 1,837,500
35,100 Tellabs, Inc.* .................................................. 2,410,931
--------------
7,366,581
--------------
Communications-Equipment/
Manufacturers
51,300 3Com Corp.* .................................................... 1,301,737
68,200 Andrew Corp.* .................................................. 1,496,137
--------------
2,797,874
--------------
Communications-Equipment
45,000 ADC Telecommunications, Inc.* ................................... 1,254,375
134,300 FORE Systems, Inc.* ............................................. 2,929,419
55,800 MRV Communications, Inc.* ....................................... $1,297,350
96,000 Xircom, Inc.* ................................................... 1,500,000
--------------
6,981,144
--------------
Computer Software
158,000 Pervasive Software, Inc.* ....................................... 1,757,750
64,400 Security Dynamics Technologies, Inc.* ........................... 1,352,400
--------------
3,110,150
--------------
Computer Software & Services
95,800 Checkfree Holdings Corp.* ....................................... 2,167,475
56,500 Sterling Commerce, Inc.* ....................................... 2,242,344
--------------
4,409,819
--------------
Consumer Services
64,800 E*TRADE Group, Inc.* ............................................ 1,401,300
--------------
Electrical Equipment
300,000 Jinpan International Ltd.* ...................................... 1,875,000
--------------
Electronics & Electrical
69,700 Cymer, Inc.* .................................................... 1,324,300
32,500 Teradyne, Inc.* ................................................. 999,375
--------------
2,323,675
--------------
Electronics-Semiconductors/
Components
22,600 Intel Corp. .................................................... 1,613,075
64,200 Maxim Integrated Products, Inc.* ................................ 2,142,675
--------------
3,755,750
--------------
Home Entertainment
55,800 Electronic Arts, Inc.* .......................................... 2,413,350
134,400 T-HQ, Inc.* ..................................................... 3,192,000
--------------
5,605,350
--------------
Internet
87,500 At Home Corp. (Series A)* ....................................... 3,029,688
62,100 Infoseek Corp.* ................................................ 1,432,181
94,700 USWeb Corp.* ................................................... 1,994,619
--------------
6,456,488
--------------
Media
98,100 Tele-Communications Liberty Media Group (Class A)* ............. 3,225,038
204,400 VDI Media* ..................................................... 3,066,000
--------------
6,291,038
--------------
Publishing
50,100 Mecklermedia Corp.* ............................................ 1,039,575
129,800 Ziff-Davis Inc.* ............................................... 2,190,375
--------------
3,229,950
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
PORTFOLIO OF INVESTMENTS May 31, 1998, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Publishing-Newspaper
31,400 Tribune Co....................................................... $ 2,099,875
--------------
Telecommunications
43,100 Advanced Fibre Communications, Inc.* ............................ 1,594,700
176,200 Boston Communications Group, Inc.* .............................. 1,497,700
250,000 Euronet Services, Inc. ......................................... 1,468,750
400,000 General DataComm Industries, Inc.* .............................. 1,825,000
85,000 Global Telesystems Group, Inc.* ................................. 3,251,250
34,500 Iridium World Communications Ltd. .............................. 1,897,500
39,100 NEXTLINK Communications, Inc. (Class A)* ....................... 1,216,988
84,100 Premiere Technologies, Inc.* .................................... 2,007,888
107,000 Primus Telecommunications Group, Inc.* .......................... 1,952,750
RSL Communications, Ltd.
100,000 (Class A)* ..................................................... 2,475,000
103,600 SmarTalk Teleservices, Inc.* .................................... 1,897,175
44,700 Teleport Communications Group Inc. (Class A)* .................. 2,497,613
160,000 Tricom, S.A. (ADR)* ............................................. 1,350,000
--------------
24,932,314
--------------
Telecommunications-Cellular/
Wireless
40,000 Airtouch Communications, Inc.* .................................. 1,905,000
89,600 Nextel Communications, Inc. (Class A)* ......................... 2,105,600
--------------
4,010,600
--------------
Utilities-Telecommunications
29,400 Intermedia Communications, Inc.* ................................ 2,175,600
--------------
TOTAL UNITED STATES ............................................ 108,129,494
--------------
VENEZUELA (1.1%)
Telephones
Compania Anonima Nacional Telefonos de Venezuela
60,000 (ADR) * ......................................................... 1,848,750
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------------------
TOTAL COMMON AND PREFERRED STOCKS AND RIGHTS
<S> <C> <C>
(Identified Cost $144,178,555)(a)....................... 99.1% $165,396,598
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .. 0.9 1,425,602
----- ------------
NET ASSETS ......................................... 100.0% $166,822,200
===== ============
</TABLE>
- ------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
* Non-income producing security.
** Restricted security.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$34,887,310 and the aggregate gross unrealized depreciation is
$13,669,267, resulting in net unrealized appreciation of $21,218,043.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
SUMMARY OF INVESTMENTS May 31, 1998
<TABLE>
<CAPTION>
PERCENT
OF NET
INDUSTRY VALUE ASSETS
- ----------------------------------------- ------------ -------
<S> <C> <C>
Broadcast Media .......................... $ 3,597,699 2.2%
Business Services ........................ 7,367,137 4.4
Cable Television Equipment ............... 2,173,500 1.3
Cable/Cellular ........................... 3,982,550 2.4
Commercial & Consumer Services ........... 2,186,100 1.3
Communications -Equipment & Software .... 7,366,581 4.4
Communications -Equipment/Manufacturers . 2,797,874 1.7
Communications Equipment ................. 9,617,837 5.8
Computer Software ........................ 8,725,869 5.2
Computer Software & Services ............. 4,409,819 2.6
Computers ................................ 1,488,657 0.9
Consumer Services ........................ 1,401,300 0.8
Electrical Equipment ..................... 1,875,000 1.1
Electronic Components .................... 1,174,838 0.7
Electronics .............................. 1,426,875 0.9
Electronics & Electrical ................. 2,323,675 1.4
Electronics -Semiconductors/Components .. 3,755,750 2.2
Home Entertainment ....................... 5,605,350 3.4
Internet ................................. 6,456,488 3.9
Media .................................... 6,291,038 3.8
Publishing ............................... 3,229,950 1.9
Publishing -Newspaper .................... 2,099,875 1.3
Telecommunications ....................... 47,080,032 28.2
Telecommunications -Cellular/Wireless ... 4,010,600 2.4
Telephones ............................... 21,679,679 13.0
Utilities -Telecommunications ............ 2,175,600 1.3
Wire & Cable ............................. 1,096,925 0.6
-------------- ------
$165,396,598 99.1%
============== ======
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ----------------------------- -------------- ------------
<S> <C> <C>
Common Stocks ................ $157,299,827 94.3%
Convertible Preferred Stocks 3,982,550 2.4
Preferred Stocks ............. 4,114,221 2.4
-------------- ------------
$165,396,598 99.1%
============== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $144,178,555) ............ $165,396,598
Cash ....................................... 329,239
Receivable for:
Investments sold ......................... 3,621,891
Shares of beneficial interest sold ...... 385,028
Dividends ................................ 84,633
Interest ................................. 30,698
Deferred organizational expenses ........... 111,518
Prepaid expenses and other assets .......... 105,600
---------------
TOTAL ASSETS ............................. 170,065,205
---------------
LIABILITIES:
Payable for:
Investments purchased .................... 2,826,110
Shares of beneficial interest
repurchased ............................. 131,900
Plan of distribution fee ................. 110,143
Management fee ........................... 89,196
Investment advisory fee .................. 59,464
Accrued expenses and other payables ....... 26,192
---------------
TOTAL LIABILITIES ........................ 3,243,005
---------------
NET ASSETS ............................... $166,822,200
===============
COMPOSITION OF NET ASSETS:
Paid-in-capital ............................ $124,359,589
Net unrealized appreciation ................ 21,217,915
Net investment loss ........................ (18,845)
Accumulated undistributed net realized
gain....................................... 21,263,541
---------------
NET ASSETS ............................... $166,822,200
===============
CLASS A SHARES:
Net Assets ................................. $966,443
Shares Outstanding (unlimited authorized,
$.01 par value) ........................... 68,811
NET ASSET VALUE PER SHARE ................ $14.04
===============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net
asset value) ............................ $14.82
===============
CLASS B SHARES:
Net Assets ................................. $165,285,396
Shares Outstanding (unlimited authorized,
$.01 par value) ........................... 11,832,228
NET ASSET VALUE PER SHARE ................ $13.97
===============
CLASS C SHARES:
Net Assets ................................. $559,065
Shares Outstanding (unlimited authorized,
$.01 par value) ........................... 40,065
NET ASSET VALUE PER SHARE ................ $13.95
===============
CLASS D SHARES:
Net Assets ................................. $11,296
Shares Outstanding (unlimited authorized,
$.01 par value) ........................... 803
NET ASSET VALUE PER SHARE ................ $14.07
===============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended May 31, 1998*
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $73,845 foreign
withholding tax) ......................... $ 1,105,413
Interest .................................. 144,228
-------------
TOTAL INCOME ............................ 1,249,641
-------------
EXPENSES
Plan of distribution fee (Class A Shares) 736
Plan of distribution fee (Class B Shares) 1,206,683
Plan of distribution fee (Class C Shares) 2,932
Management fee ............................ 910,689
Investment advisory fee ................... 607,126
Transfer agent fees and expenses .......... 219,574
Registration fees ......................... 51,959
Custodian fees ............................ 43,110
Professional fees ......................... 42,538
Trustees' fees and expenses ............... 39,619
Organizational expenses ................... 34,925
Shareholder reports and notices ........... 26,134
Foreign exchange provisional tax .......... 20,095
Other ..................................... 12,757
-------------
TOTAL EXPENSES .......................... 3,218,877
-------------
NET INVESTMENT LOSS ..................... (1,969,236)
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on:
Investments ............................. 28,200,756
Foreign exchange transactions ........... (19,991)
-------------
NET GAIN ................................ 28,180,765
-------------
Net change in unrealized appreciation on:
Investments ............................. 7,811,237
Translation of other assets and
liabilities denominated in foreign
currencies ............................. 547
-------------
NET APPRECIATION ........................ 7,811,784
-------------
NET GAIN ................................ 35,992,549
-------------
NET INCREASE .............................. $34,023,313
=============
</TABLE>
- ------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR AUGUST 28,
ENDED 1996*
MAY 31, THROUGH
1998** MAY 31, 1997
---------------------------------------------------- ------------ -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss ................................... $ (1,969,236) $ (1,003,201)
Net realized gain ..................................... 28,180,765 1,507,340
Net change in unrealized appreciation ................. 7,811,784 13,406,131
--------------- -------------
NET INCREASE ........................................ 34,023,313 13,910,270
--------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
REALIZED GAIN:
Class A shares ........................................ (8,783) --
Class B shares ........................................ (5,580,481) --
Class C shares ........................................ (12,951) --
Class D shares ........................................ (380) --
--------------- -------------
TOTAL DISTRIBUTIONS ................................. (5,602,595) --
--------------- -------------
Net increase from transactions in shares of beneficial
interest ............................................. 16,161,166 108,230,046
--------------- -------------
NET INCREASE ........................................ 44,581,884 122,140,316
NET ASSETS:
Beginning of period ................................... 122,240,316 100,000
--------------- -------------
END OF PERIOD
(Including a net investment loss of $18,845
and $0, respectively) ............................... $166,822,200 $122,240,316
=============== =============
</TABLE>
- ------------
* Commencement of operations.
** Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998
1. ORGANIZATIONAL AND ACCOUNTING POLICIES
TCW/DW Global Telecom Trust (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, open-end
management investment company. The Fund's investment objective is long-term
capital appreciation. The Fund seeks to achieve its objective by investing
primarily in securities of domestic and foreign companies operating in all
aspects of the telecommunications and information industries. The Fund was
organized as a Massachusetts business trust on March 28, 1996 and had no
other operations other than those relating to organizational matters and the
issuance of 10,000 shares of beneficial interest for $100,000 to Morgan
Stanley Dean Witter Advisors Inc. ("MSDWA"), an affiliate of Morgan Stanley
Dean Witter Services Company Inc. (the "Manager"), to effect the Fund's
initial capitalization. The Fund commenced operations on August 28, 1996. On
July 28, 1997, the Fund commenced offering three additional classes of
shares, with the then current shares designated as Class B shares.
Effective June 22, 1998, the following entities have changed their name:
<TABLE>
<CAPTION>
OLD NAME NEW NAME
------------------------------------- ---------------------------------------------------
<S> <C>
Dean Witter InterCapital Inc. Morgan Stanley Dean Witter Advisors Inc.
Dean Witter Distributors Inc. Morgan Stanley Dean Witter Distributors Inc.
Dean Witter Services Company Inc. Morgan Stanley Dean Witter Services Company Inc.
</TABLE>
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year,
six years and one year, respectively. Class D shares are not subject to a
sales charge. Additionally, Class A shares, Class B shares and Class C shares
incur distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS--(1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at
its latest sale price on that exchange prior to the time when assets are
valued; if there were no sales that day, the security is valued at the latest
bid price (in cases where securities are traded on more than one exchange;
the securities are valued on the
exchange designated as the primary market pursuant to procedures adopted by
the Trustees); (2) all other
11
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest available bid price prior to the time of
valuation; (3) when market quotations are not readily available, including
circumstances under which it is determined by TCW Funds Management, Inc. (the
"Adviser") that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in
good faith under procedures established by and under the general supervision
of the Trustees (valuation of debt securities for which market quotations are
not readily available may be based upon current market prices of securities
which are comparable in coupon, rating and maturity or an appropriate matrix
utilizing similar factors); and (4) certain portfolio securities may be
valued by an outside pricing service approved by the Trustees. The pricing
service may utilize a matrix system incorporating security quality, maturity
and coupon as the evaluation model parameters, and/or research and
evaluations by its staff, including review of broker-dealer market price
quotations, if available, in determining what it believes is the fair
valuation of the securities valued by such pricing service; (5) short-term
debt securities having a maturity date of more than sixty days at time of
purchase are valued on a mark-to-market basis until sixty days prior to
maturity and thereafter at amortized cost based on their value on the 61st
day. Short-term debt securities having a maturity date of sixty days or less
at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS--Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date except for certain dividends on foreign securities which are
recorded as soon as the Fund is informed after the ex-dividend date.
Discounts are accreted over the life of the respective securities. Interest
income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS--Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are
allocated to each class of shares based upon the relative net asset value on
the date such items are recognized. Distribution fees are charged directly to
the respective class.
D. FOREIGN CURRENCY TRANSLATION--The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value
of investment securities, other assets and liabilities and forward contracts
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the exchange
rates prevailing on the respective dates of such transactions. The resultant
exchange gains and losses are included in the Statement of Operations as
realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss
12
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued
are included in or are a reduction of ordinary income for federal income tax
purposes. The Fund does not isolate that portion of the results of operations
arising as a result of changes in the foreign exchange rates from the changes
in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS--The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate exchange
rates. The resultant unrealized exchange gains and losses are included in the
Statement of Operations as unrealized foreign currency gain or loss and in
the Statement of Assets and Liabilities as part of the related foreign
currency denominated asset or liability. The Fund records realized gains or
losses on delivery of the currency or at the time the forward contract is
extinguished (compensated) by entering into a closing transaction prior to
delivery.
F. FEDERAL INCOME TAX STATUS--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS--The Fund records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends
and distributions which exceed net investment income and net realized capital
gains for financial reporting purposes but not for tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
H. ORGANIZATIONAL EXPENSES--MSDWA paid the organizational expenses in the
amount of approximately $172,000 which has been reimbursed for the full
amount thereof. Such expenses have been deferred and are being amortized on
the straight-line method over a period not to exceed five years from the
commencement of operations.
2. MANAGEMENT AGREEMENT
Pursuant to a Management Agreement, the Fund pays the Manager a management
fee, accrued daily and payable monthly, by applying the annual rate of 0.60%
to the net assets of the Fund determined as of the close of each business
day.
13
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued
Under the terms of the Management Agreement, the Manager maintains certain of
the Fund's books and records and furnishes, at its own expense, office space,
facilities, equipment, clerical, bookkeeping and certain legal services and
pays the salaries of all personnel, including officers of the Fund who are
employees of the Manager. The Manager also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.
3. INVESTMENT ADVISORY AGREEMENT
Pursuant to an Investment Advisory Agreement, the Fund pays the Adviser an
advisory fee, accrued daily and payable monthly, by applying the annual rate
of 0.40% to the net assets of the Fund determined as of the close of each
business day.
Under the terms of the Investment Advisory Agreement, the Fund has retained
the Adviser to invest the Fund's assets, including placing orders for the
purchase and sale of portfolio securities. The Adviser obtains and evaluates
such information and advice relating to the economy, securities markets, and
specific securities as it considers necessary or useful to continuously
manage the assets of the Fund in a manner consistent with its investment
objective. In addition, the Adviser pays the salaries of all personnel,
including officers of the Fund, who are employees of the Adviser.
4. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund
has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under
the Act. The Plan provides that the Fund will pay the Distributor a fee which
is accrued daily and paid monthly at the following annual rates: (i) Class A
- -up to 0.25% of the average daily net assets of Class A; (ii) Class B -1.0%
of the lesser of: (a) the average daily aggregate gross sales of the Class B
shares since the inception of the Fund (not including reinvestment of
dividend or capital gain distributions) less the average daily aggregate net
asset value of the Class B shares redeemed since the Fund's inception upon
which a contingent deferred sales charge has been imposed or waived; or (b)
the average daily net assets of Class B; and (iii) Class C -up to 1.0% of the
average daily net assets of
Class C. In the case of Class A shares, amounts paid under the Plan are paid
to the Distributor for services provided. In the case of Class B and Class C
shares, amounts paid under the Plan are paid to the Distributor for services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of
these Classes and incentive compensation to, and expenses of, Morgan Stanley
Dean Witter Financial Advisors and others who engage in or support
distribution of the shares or who service shareholder accounts, including
overhead and
14
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued
telephone expenses; printing and distribution of prospectuses and reports
used in connection with the offering of these shares to other than current
shareholders; and preparation, printing and distribution of sales literature
and advertising materials. In addition, the Distributor may utilize fees paid
pursuant to the Plan, in the case of Class B shares, to compensate Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Manager and Distributor,
and other selected broker-dealers for their opportunity costs in advancing
such amounts, which compensation would be in the form of a carrying charge on
any unreimbursed expenses.
In the case of Class B shares, provided that the Plan continues in effect,
any cumulative expenses incurred by the Distributor but not yet recovered may
be recovered through the payment of future distribution fees from the Fund
pursuant to the Plan and contingent deferred sales charges paid by investors
upon redemption of Class B shares. Although there is no legal obligation for
the Fund to pay expenses incurred in excess of payments made to the
Distributor under the Plan and the proceeds of contingent deferred sales
charges paid by investors upon redemption of shares, if for any reason the
Plan is terminated, the Trustees will consider at that time the manner in
which to treat such expenses. The Distributor has advised the Fund that such
excess amounts, including carrying charges, totaled $7,673,197 at
May 31, 1998.
In the case of Class A shares and Class C shares, expenses incurred pursuant
to the Plan in any calendar year in excess of 0.25% or 1.0% of the average
daily net assets of Class A or Class C, respectively, will not be reimbursed
by the Fund through payments in any subsequent year, except that expenses
representing a gross sales credit to Morgan Stanley Dean Witter Financial
Advisors or other selected broker-dealer representatives may be reimbursed in
the subsequent calendar year. For the period ended May 31, 1998, the
distribution fee was accrued for Class A shares and Class C shares at the
annual rate of 0.24% and 1.0%, respectively.
The Distributor has informed the Fund that for the period ended May 31, 1998,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares and Class C shares of $430,611, and $393, respectively,
and received $11,497 in front-end sales charges from sales of the Fund's
Class A shares. The respective shareholders pay such charges which are not an
expense of the Fund.
5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the year ended May 31, 1998 aggregated
$179,976,218 and $170,506,083, respectively.
For the year ended May 31, 1998, the Fund incurred brokerage commissions of
$3,460 with Morgan Stanley & Co., Inc., an affiliate of the Manager, for
portfolio transactions executed on behalf of the Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Manager and
Distributor, is the Fund's transfer agent.
15
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR AUGUST 28, 1996*
ENDED THROUGH
MAY 31, 1998 MAY 31, 1997
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
CLASS A SHARES**
Sold........................... 70,641 $ 1,010,003 -- --
Reinvestment of distributions 687 8,164
Redeemed....................... (2,517) (35,654) -- --
------------- -------------- ------------ --------------
Net increase-Class A........... 68,811 982,513 -- --
------------- -------------- ------------ --------------
CLASS B SHARES
Sold........................... 2,865,878 38,687,349 11,662,388 $118,594,978
Reinvestment of distributions . 444,412 5,270,720 -- --
Redeemed....................... (2,172,212) (29,334,428) (978,238) (10,364,932)
------------- -------------- ------------ --------------
Net increase-Class B........... 1,138,078 14,623,641 10,684,150 108,230,046
------------- -------------- ------------ --------------
CLASS C SHARES**
Sold........................... 43,731 598,390 -- --
Reinvestment of distributions . 1,064 12,611 -- --
Redeemed....................... (4,730) (66,384) -- --
------------- -------------- ------------ --------------
Net increase-Class C .......... 40,065 544,617 -- --
------------- -------------- ------------ --------------
CLASS D SHARES**
Sold........................... 771 10,015 -- --
Reinvestment of distributions . 32 380 -- --
------------- -------------- ------------ --------------
Net increase-Class D........... 803 10,395 -- --
------------- -------------- ------------ --------------
Net increase in Fund........... 1,247,757 $ 16,161,166 10,684,150 $108,230,046
============= ============== ============ ==============
</TABLE>
- ------------
* Commencement of operations.
** For the period July 28, 1997 (issue date) through May 31, 1998.
16
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued
7. FEDERAL INCOME TAX STATUS
Foreign currency losses incurred after October 31 ("post-October losses")
within the taxable year are deemed to arise on the first business day of the
Fund's next taxable year. The Fund incurred and will elect to defer net
foreign currency losses of approximately $19,000 during fiscal 1998.
As of May 31, 1998, the Fund had temporary book/tax differences primarily
attributable to post-October losses and capital loss deferrals on wash sales
and permanent book/tax differences primarily attributable to a net operating
loss. To reflect reclassifications arising from the permanent differences,
paid-in-capital was charged $107,536, accumulated undistributed net realized
gain was charged $1,842,855 and net investment loss was credited $1,950,391.
8. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward
contracts") to facilitate settlement of foreign currency denominated
portfolio transactions or to manage foreign currency exposure associated with
foreign currency denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk
of an unfavorable change in foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counter parties to meet the terms of their
contracts.
At May 31, 1998, there were no outstanding forward contracts.
17
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE PERIOD
ENDED AUGUST 28, 1996*
MAY 31, THROUGH
1998**++ MAY 31, 1997
- ------------------------------------------ --------------- ----------------
<S> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $ 11.43 $ 10.00
--------------- ----------------
Net investment loss........................ (0.17) (0.09)
Net realized and unrealized gain .......... 3.20 1.52
--------------- ----------------
Total from investment operations........... 3.03 1.43
Less distributions from net realized gain (0.49) --
--------------- ----------------
Net asset value, end of period ............ $ 13.97 $ 11.43
=============== ================
TOTAL INVESTMENT RETURN+................... 27.30 % 14.30 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .................................. 2.12 % 2.38 %(2)
Net investment loss........................ (1.30)% (1.27)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $165,284 $122,240
Portfolio turnover rate ................... 116 % 80 %(1)
Average commission rate paid............... $0.0049 $0.0283
</TABLE>
- ------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date have been designated Class B
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
MAY 31, 1998++
- ------------------------------------------ --------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $ 12.99
--------------
Net investment loss ....................... (0.09)
Net realized and unrealized gain .......... 1.63
--------------
Total from investment operations .......... 1.54
Less distributions from net realized gain (0.49)
--------------
Net asset value, end of period ............ $ 14.04
==============
TOTAL INVESTMENT RETURN+ .................. 12.64 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .................................. 1.52 %(2)
Net investment loss ....................... (0.76)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $ 966
Portfolio turnover rate.................... 116 %
Average commission rate paid............... $0.0049
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $ 12.99
--------------
Net investment loss ....................... (0.17)
Net realized and unrealized gain .......... 1.62
--------------
Total from investment operations........... 1.45
Less distributions from net realized gain . (0.49)
--------------
Net asset value, end of period ............ $ 13.95
==============
TOTAL INVESTMENT RETURN+ .................. 11.86 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .................................. 2.30 %(2)
Net investment loss ....................... (1.52)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ... $ 559
Portfolio turnover rate ................... 116 %
Average commission rate paid............... $0.0049
</TABLE>
- ------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
MAY 31, 1998++
- ----------------------------------------- --------------
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .... $ 12.99
--------------
Net investment loss ...................... (0.05)
Net realized and unrealized gain ........ 1.62
--------------
Total from investment operations ........ 1.57
Less distributions from net realized
gain..................................... (0.49)
--------------
Net asset value, end of period ........... $ 14.07
==============
TOTAL INVESTMENT RETURN+ ................. 12.80 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................. 1.33 %(2)
Net investment loss ...................... (0.46)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $ 11
Portfolio turnover rate................... 116 %
Average commission rate paid.............. $0.0049
</TABLE>
- ------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF TCW/DW GLOBAL TELECOM TRUST
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of TCW/DW Global
Telecom Trust (the "Fund") at May 31, 1998, the results of its operations for
the year then ended, and the changes in its net assets and the financial
highlights for each of the periods presented, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at May 31, 1998 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
July 10, 1998
-----------------------------------------------------------------------
1998 FEDERAL TAX NOTICE (unaudited)
For the year ended May 31, 1998, the Fund paid to shareholders $0.05
per share from long-term capital gains. This $0.05 distribution is
taxable as 28% rate gain.
-----------------------------------------------------------------------
21
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<PAGE>
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<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Thomas E. Larkin, Jr.
President
Barry Fink
Vice President, Secretary and General Counsel
Robert M. Hanisee
Vice President
John A. Healey
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
PrcewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
Morgan Stanley Dean Witter Services Company Inc.
ADVISER
TCW Funds Management, Inc.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
TCW/DW
GLOBAL TELECOM TRUST
[graphic]
ANNUAL REPORT
MAY 31, 1998
