<PAGE>
TCW/DW GLOBAL TELECOM TRUST TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS NOVEMBER 30, 1998 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
The six-month period ended November 30, 1998, was a tumultuous one for investing
in international and technology stocks. In August we experienced a dramatic
worldwide correction in the equity markets of a like not seen for several years.
The deterioration of global economies such as in Asia spilled over into Latin
America and Russia. However, quick-acting central banks throughout the world
eased interest rates to offset an impending slowdown. Prognostications that the
Asian flu would severely affect the U.S. economy by the third quarter were not
borne out. Simply put, the domestic economy was affected, but not to the extent
the market expected. The combination of a less draconian view of the U.S.
economy coupled with the worldwide monetary easing sent the equity markets
surging.
PERFORMANCE AND PORTFOLIO
Against this backdrop, TCW/DW Global Telecom Trust's Class B shares posted a
total return of -4.87 percent for the six-month period ended November 30, 1998.
During the same period, the broad-based Standard & Poor's 500 Index and the
Lipper Telecommunications Funds Average returned 7.48 percent and 4.44 percent,
respectively. The Fund's Class A, C and D shares had total returns of -4.63
percent, -4.87 percent and -4.48 percent, respectively. The performance of the
Fund's four share classes varies because of differing expenses.
The Fund's underperformance relative to its peer group is primarily attributed
to its concentration in small-capitalization stocks. Small-cap stocks were hit
particularly hard during the summer's market correction as investors fled to the
relative safety of larger, better-known names. During November and December,
however, the Fund's smaller-cap holdings bolstered performance as this segment
of the market rebounded sharply.
Following the market's sell-off, telecommunications turned into one of the
market's bigger bounce-backs. The Fund took full advantage of this trend by
adding several Internet stocks in October and November, which contributed
strongly to its performance during the final months of 1998. Non-U.S. holdings,
particularly those in Europe, contributed positively to the Fund's performance
while also adding a degree of stability to the portfolio.
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
LETTER TO THE SHAREHOLDERS NOVEMBER 30, 1998, CONTINUED
The Fund's portfolio was well diversified both by geographic region and by
industry throughout the six-month period under review. The United States, at
73.20 percent of assets, remained the Fund's single largest country allocation,
with Japan (5.11 percent), the United Kingdom (4.67 percent), Israel (3.55
percent) and China (2.52 percent) rounding out the Fund's five largest country
allocations. On November 30, 1998, the Fund's largest industry weightings were
major U.S. telecommunications companies (19.61 percent), electronics --
semiconductors and components (5.72 percent), computer software and services
(5.69 percent), electronic data processing (5.38 percent) and cellular telephone
holdings (5.21 percent).
Among the Fund's largest holdings on November 30, 1998, were At Home
Corporation, Cisco Systems, Nippon Telegraph and Telephone, Primus
Telecommunication and Airtouch Communications.
LOOKING AHEAD
TCW Funds Management Inc., the Fund's investment adviser, continues to believe
that stocks with the best fundamentals will, over time, outperform the broader
markets. Accordingly, TCW believes that market sentiment may vacillate between
the technology, financial and retail sectors, but over the long run the facts
remain the same in that the fastest-growing, most profitably sustainable
businesses are expected to outperform the market. The worldwide
telecommunications industry is benefiting from tremendous secular changes such
as deregulation, privatization and the explosion of the Internet. The long-term
growth prospects for the industry remain intact and TCW continues to believe
that this industry may offer greater profitability than others. TCW/DW Global
Telecom Trust currently owns what TCW believes to be some of the best
telecommunications companies with the most advanced technologies. Because of
this strategic advantage, TCW remains optimistic regarding the long-term
prospects for the Fund.
We appreciate your ongoing support of TCW/DW Global Telecom Trust and look
forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
2
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
PORTFOLIO OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (96.6%)
CANADA (1.9%)
ELECTRONIC DATA PROCESSING
600,000 Sanga International
Inc.* **............................................................................. $ 3,000,000
------------
CHINA (2.5%)
CELLULAR TELEPHONE
100,000 China Telecom (Hong Kong) Ltd. (ADR)................................................... 3,956,250
------------
ISRAEL (3.5%)
TELECOMMUNICATIONS
70,000 ECI Telecommunications Limited Designs................................................. 2,502,500
60,000 Gilat Satellite Networks Ltd.*......................................................... 3,052,500
------------
TOTAL ISRAEL........................................................................... 5,555,000
------------
JAPAN (5.1%)
CELLULAR TELEPHONE
1,300 DDI Corp............................................................................... 4,222,493
------------
UTILITIES - TELECOMMUNICATIONS
100,000 Nippon Telegraph & Telephone Corp. (ADR)............................................... 3,787,500
------------
TOTAL JAPAN............................................................................ 8,009,993
------------
MEXICO (2.5%)
LEISURE TIME/EQUIPMENT
61,400 Grupo Televisa S.A. (GDR).............................................................. 1,561,862
------------
TELECOMMUNICATIONS
276,000 Grupo Iusacell S.A. (Series L) (ADR)*.................................................. 2,277,000
------------
TOTAL MEXICO........................................................................... 3,838,862
------------
NETHERLANDS (1.6%)
ELECTRONIC DATA PROCESSING
40,000 Philips Electronics N.V................................................................ 2,532,500
------------
POLAND (1.5%)
MISCELLANEOUS
500,000 Telekomunikacja Polska S.A. (GDR)*..................................................... 2,362,500
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SINGAPORE (0.1%)
TELECOMMUNICATION EQUIPMENT
30,000 Asia Pacific Wire & Cable Corp.*....................................................... $ 103,125
------------
UNITED KINGDOM (4.7%)
ELECTRIC UTILITIES: CENTRAL
500,000 Independent Energy Holdings PLC (ADR)*................................................. 4,562,500
------------
TELECOMMUNICATIONS
80,000 Esat Telecom Group PLC (ADR)*.......................................................... 2,760,000
------------
TOTAL UNITED KINGDOM................................................................... 7,322,500
------------
UNITED STATES (73.2%)
BOOKS/MAGAZINE
36,800 Time Warner Inc........................................................................ 3,891,600
------------
BROADCAST MEDIA
46,600 Cox Communications, Inc. (Class A)*.................................................... 2,455,237
64,900 Tele-Communications Liberty Media Group (Class A)*..................................... 2,616,281
------------
5,071,518
------------
CABLE & TELECOMMUNICATIONS
300,000 Primus Telecommunications Group, Inc.*................................................. 3,787,500
------------
CABLE TELEVISION
55,400 Viacom Inc. (Class A)*................................................................. 3,639,087
------------
COMMUNICATIONS - EQUIPMENT/MANUFACTURERS
84,700 American Tower Corp. (Class A)......................................................... 1,958,688
------------
COMMUNICATIONS - EQUIPMENT & SOFTWARE
61,950 Cisco Systems, Inc.*................................................................... 4,669,481
------------
COMPUTER SOFTWARE
40,800 Microsoft Corp.*....................................................................... 4,977,600
49,200 VeriSign, Inc.*........................................................................ 1,955,700
------------
6,933,300
------------
COMPUTER/VIDEO CHAINS
39,500 Dell Computer Corp.*................................................................... 2,399,625
------------
COMPUTERS COMMUNICATIONS
93,500 3Com Corp.*............................................................................ 3,617,281
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
PORTFOLIO OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTERS SOFTWARE & SERVICES
75,000 Rational Software Corp.*............................................................... $ 1,701,562
72,800 Siebel Systems, Inc.*.................................................................. 1,756,300
28,400 Yahoo! Inc.*........................................................................... 5,451,025
------------
8,908,887
------------
DIVERSIFIED COMMERCIAL SERVICES
49,000 America Online, Inc.*.................................................................. 4,290,562
43,000 Whittman-Hart, Inc.*................................................................... 946,000
------------
5,236,562
------------
ELECTRICAL PRODUCTS
134,300 FORE Systems, Inc.*.................................................................... 2,031,288
300,000 Jinpan International Ltd.*............................................................. 1,087,500
------------
3,118,788
------------
ELECTRONIC COMPONENTS
55,200 Xilinx, Inc.*.......................................................................... 2,801,400
------------
ELECTRONIC DATA PROCESSING
83,200 Microchip Technology, Inc.*............................................................ 2,896,400
------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
57,600 Altera Corp.*.......................................................................... 2,826,000
29,500 Intel Corp............................................................................. 3,173,094
47,800 Motorola, Inc.......................................................................... 2,963,600
------------
8,962,694
------------
INTERNET SERVICES
58,700 At Home Corp. (Series A)*.............................................................. 3,411,938
20,800 eBay Inc.*............................................................................. 4,108,000
51,000 GeoCities*............................................................................. 1,533,188
------------
9,053,126
------------
SEMICONDUCTORS
64,200 Maxim Integrated Products, Inc.*....................................................... 2,519,850
------------
TELECOMMUNICATION EQUIPMENT
50,000 Vertex Communications Corp.*........................................................... 875,000
------------
TELECOMMUNICATIONS
60,000 AirTouch Communications, Inc.*......................................................... 3,431,250
19,900 Amazon.com, Inc.*...................................................................... 3,820,800
30,800 Comcast Corp. (Class A Special)........................................................ 1,493,800
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
250,000 Euronet Services, Inc.*................................................................ $ 906,250
400,000 General DataComm Industries, Inc.*..................................................... 1,450,000
155,500 Global Crossing Ltd.*.................................................................. 5,889,563
85,000 Global Telesystems Group, Inc.*........................................................ 3,686,875
200,000 ICO Global Communications Holdings Ltd.*............................................... 1,875,000
32,600 Lucent Technologies, Inc............................................................... 2,805,638
50,000 Pacific Gateway Exchange, Inc.*........................................................ 2,237,500
100,000 RSL Communications, Ltd. (Class A)*.................................................... 2,262,500
160,000 Tricom, S.A. (ADR)*.................................................................... 840,000
------------
30,699,176
------------
UTILITIES - TELEPHONE
65,400 Ameritech Corp......................................................................... 3,539,775
------------
TOTAL UNITED STATES.................................................................... 114,579,738
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL COMMON STOCKS
(IDENTIFIED COST $127,310,261) (a)........................................................ 96.6 % 151,260,468
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................ 3.4 5,250,973
------ -------------
NET ASSETS................................................................................ 100.0 % $ 156,511,441
------ -------------
------ -------------
</TABLE>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $30,191,309 and the
aggregate gross unrealized depreciation is $6,241,102, resulting in net
unrealized appreciation of $23,950,207.
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
SUMMARY OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Books/Magazine.................................................................... $ 3,891,600 2.5 %
Broadcast Media................................................................... 5,071,518 3.3
Cable & Telecommunications........................................................ 3,787,500 2.4
Cable Television.................................................................. 3,639,087 2.3
Cellular Telephone................................................................ 8,178,743 5.2
Communications - Equipment/Manufacturers.......................................... 1,958,688 1.2
Communications - Equipment & Software............................................. 4,669,481 3.0
Computer Software................................................................. 6,933,300 4.4
Computer/Video Chains............................................................. 2,399,625 1.5
Computers Communications.......................................................... 3,617,281 2.3
Computers Software & Services..................................................... 8,908,887 5.7
Diversified Commercial Services................................................... 5,236,562 3.4
Electric Utilities: Central....................................................... 4,562,500 2.9
Electrical Products............................................................... 3,118,788 2.0
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Electronic Components............................................................. $ 2,801,400 1.8 %
Electronic Data Processing........................................................ 8,428,900 5.4
Electronics - Semiconductors/
Components...................................................................... 8,962,694 5.7
Internet Services................................................................. 9,053,126 5.8
Leisure Time/Equipment............................................................ 1,561,862 1.0
Miscellaneous..................................................................... 2,362,500 1.5
Semiconductors.................................................................... 2,519,850 1.6
Telecommunication Equipment....................................................... 978,125 0.6
Telecommunications................................................................ 41,291,176 26.4
Utilities - Telecommunications.................................................... 3,787,500 2.4
Utilities - Telephone............................................................. 3,539,775 2.3
------------ ---
$151,260,468 96.6 %
------------ ---
------------ ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $127,310,261).............................................................. $151,260,468
Cash.......................................................................................... 6,985,654
Receivable for:
Shares of beneficial interest sold........................................................ 113,485
Investments sold.......................................................................... 40,824
Interest.................................................................................. 26,727
Dividends................................................................................. 23,077
Foreign withholding taxes reclaimed....................................................... 16,077
Deferred organizational expenses.............................................................. 94,283
Prepaid expenses and other assets............................................................. 91,724
------------
TOTAL ASSETS............................................................................. 158,652,319
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 1,599,587
Shares of beneficial interest repurchased................................................. 254,669
Plan of distribution fee.................................................................. 113,337
Management fee............................................................................ 76,424
Investment advisory fee................................................................... 50,949
Accrued expenses and other payables........................................................... 45,912
------------
TOTAL LIABILITIES........................................................................ 2,140,878
------------
NET ASSETS............................................................................... $156,511,441
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $123,488,585
Net unrealized appreciation................................................................... 23,950,835
Accumulated net investment loss............................................................... (1,356,175)
Accumulated undistributed net realized gain................................................... 10,428,196
------------
NET ASSETS............................................................................... $156,511,441
------------
------------
CLASS A SHARES:
Net Assets.................................................................................... $1,153,224
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 86,041
NET ASSET VALUE PER SHARE................................................................ $13.40
------------
------------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $14.14
------------
------------
CLASS B SHARES:
Net Assets.................................................................................... $154,693,027
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 11,640,293
NET ASSET VALUE PER SHARE................................................................ $13.29
------------
------------
CLASS C SHARES:
Net Assets.................................................................................... $654,395
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 49,318
NET ASSET VALUE PER SHARE................................................................ $13.27
------------
------------
CLASS D SHARES:
Net Assets.................................................................................... $10,795
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 803
NET ASSET VALUE PER SHARE................................................................ $13.44
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends (net of $11,531 foreign withholding tax)............................................ $ 314,276
Interest...................................................................................... 80,579
------------
TOTAL INCOME............................................................................. 394,855
------------
EXPENSES
Plan of distribution fee (Class A shares)..................................................... 1,364
Plan of distribution fee (Class B shares)..................................................... 668,478
Plan of distribution fee (Class C shares)..................................................... 3,058
Management fee................................................................................ 457,367
Investment advisory fee....................................................................... 304,911
Transfer agent fees and expenses.............................................................. 121,221
Registration fees............................................................................. 53,315
Shareholder reports and notices............................................................... 24,582
Professional fees............................................................................. 24,556
Custodian fees................................................................................ 23,175
Organizational expenses....................................................................... 17,235
Trustees' fees and expenses................................................................... 16,149
Foreign exchange provisional tax.............................................................. 9,864
Other......................................................................................... 6,910
------------
TOTAL EXPENSES........................................................................... 1,732,185
------------
NET INVESTMENT LOSS...................................................................... (1,337,330)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments............................................................................... (10,825,408)
Foreign exchange transactions............................................................. (9,937)
------------
NET LOSS................................................................................. (10,835,345)
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... 2,732,164
Translation of other assets and liabilities denominated in foreign currencies............. 756
------------
NET APPRECIATION......................................................................... 2,732,920
------------
NET LOSS................................................................................. (8,102,425)
------------
NET DECREASE.................................................................................. $ (9,439,755)
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
NOVEMBER 30, 1998 MAY 31, 1998*
- ---------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss................................................... $ (1,337,330) $ (1,969,236)
Net realized gain (loss).............................................. (10,835,345) 28,180,765
Net change in unrealized appreciation................................. 2,732,920 7,811,784
----------------- -------------
NET INCREASE (DECREASE).......................................... (9,439,755) 34,023,313
----------------- -------------
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 (decrease) from transactions in shares of beneficial
interest............................................................ (871,004) 16,161,166
----------------- -------------
NET INCREASE (DECREASE).......................................... (10,310,759) 44,581,884
NET ASSETS:
Beginning of period................................................... 166,822,200 122,240,316
----------------- -------------
END OF PERIOD
(INCLUDING ACCUMULATED NET INVESTMENT LOSSES OF $1,356,175 AND
$18,845, RESPECTIVELY)............................................ $156,511,441 $ 166,822,200
----------------- -------------
----------------- -------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED)
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 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.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange; the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by 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
9
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED) CONTINUED
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 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.
10
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED) CONTINUED
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 -- Morgan Stanley Dean Witter Advisors Inc., an
affiliate of Morgan Stanley Dean Witter Services Company Inc. (the "Manager"),
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.
11
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED) 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 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 (1) services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of these
Classes and incentive compensation to, and expenses of, the Morgan Stanley Dean
Witter Financial Advisors and others who engage in or support
12
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED) CONTINUED
distribution of the shares or who service shareholder accounts, including
overhead and telephone expenses; (2) printing and distribution of prospectuses
and reports used in connection with the offering of these shares to other than
current shareholders; and (3) preparation, printing and distribution of sales
literature and advertising materials. In addition, the Distributor may utilize
fees paid pursuant to the Plan, in the case of Class B shares, to compensate
Dean Witter Reynolds Inc. ("DWR"), an affiliate of the 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 $7,857,213 at November 30, 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 six months ended November 30, 1998, the distribution fee
was accrued for Class A shares and Class C shares at the annual rate of 0.25%
and 1.0%, respectively.
The Distributor has informed the Fund that for the six months ended November 30,
1998, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B and Class C shares of $251,289 and $104, respectively and
received $3,865 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.
13
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED) CONTINUED
5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended November 30, 1998 aggregated
$128,999,568 and $132,871,495, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Manager and
Distributor, is the Fund's transfer agent.
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
NOVEMBER 30, 1998 MAY 31, 1998*
--------------------------- ---------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold............................................................. 34,146 $ 471,885 70,641 $ 1,010,003
Reinvestment of distributions.................................... -- -- 687 8,164
Redeemed......................................................... (16,916) (210,384) (2,517) (35,654)
----------- ------------- ----------- -------------
Net increase - Class A........................................... 17,230 261,501 68,811 982,513
----------- ------------- ----------- -------------
CLASS B SHARES
Sold............................................................. 1,246,097 16,516,889 2,865,878 38,687,349
Reinvestment of distributions.................................... -- -- 444,412 5,270,720
Redeemed......................................................... (1,438,032) (17,793,473) (2,172,212) (29,334,428)
----------- ------------- ----------- -------------
Net increase (decrease) - Class B................................ (191,935) (1,276,584) 1,138,078 14,623,641
----------- ------------- ----------- -------------
CLASS C SHARES
Sold............................................................. 15,979 219,106 43,731 598,390
Reinvestment of distributions.................................... -- -- 1,064 12,611
Redeemed......................................................... (6,726) (75,027) (4,730) (66,384)
----------- ------------- ----------- -------------
Net increase - Class C........................................... 9,253 144,079 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 (decrease) in Fund.................................. (165,452) $ (871,004) 1,247,757 $ 16,161,166
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
- ---------------------
* For Class A, C and D shares, for the period July 28, 1997 (issue date)
through May 31, 1998.
14
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1998 (UNAUDITED) 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.
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 November 30, 1998, there were no outstanding forward contracts.
15
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout the period:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED FOR THE YEAR AUGUST 28, 1996*
NOVEMBER 30, 1998++ ENDED THROUGH
(UNAUDITED) MAY 31, 1998**++ MAY 31, 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.............. $ 13.97 $ 11.43 $ 10.00
------ ------ ------
Income (loss) from investment operations:
Net investment loss............................ (0.11) (0.17) (0.09)
Net realized and unrealized gain (loss)........ (0.57) 3.20 1.52
------ ------ ------
Total income (loss) from investment operations.... (0.68) 3.03 1.43
------ ------ ------
Less distributions from net realized gain......... -- (0.49) --
------ ------ ------
Net asset value, end of period.................... $ 13.29 $ 13.97 $ 11.43
------ ------ ------
------ ------ ------
TOTAL RETURN+..................................... (4.87)%(1) 27.30% 14.30%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.......................................... 2.28%(2)(3) 2.12% 2.38%(2)
Net investment loss............................... (1.76)%(2)(3) (1.30)% (1.27)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $154,693 $165,284 $122,240
Portfolio turnover rate........................... 87%(1) 116% 80%(1)
</TABLE>
- ---------------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JULY 28, 1997*
NOVEMBER 30, 1998 THROUGH
(UNAUDITED) MAY 31, 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 14.04 $ 12.99
------ ------
Income (loss) from investment operations:
Net investment loss................................................ (0.13) (0.09)
Net realized and unrealized gain (loss)............................ (0.51) 1.63
------ ------
Total income (loss) from investment operations........................ (0.64) 1.54
------ ------
Less distributions from net realized gain............................. -- (0.49)
------ ------
Net asset value, end of period........................................ $ 13.40 $ 14.04
------ ------
------ ------
TOTAL RETURN+......................................................... (4.63)%(1) 12.64%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.64%(2)(3) 1.52%(2)
Net investment loss................................................... (1.12)%(2)(3) (0.76)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $ 1,153 $ 966
Portfolio turnover rate............................................... 87%(1) 116%
</TABLE>
<TABLE>
<S> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 13.95 $ 12.99
------ ------
Income (loss) from investment operations:
Net investment loss................................................ (0.17) (0.17)
Net realized and unrealized gain (loss)............................ (0.51) 1.62
------ ------
Total income (loss) from investment operations........................ (0.68) 1.45
------ ------
Less distributions from net realized gain............................. -- (0.49)
------ ------
Net asset value, end of period........................................ $ 13.27 $ 13.95
------ ------
------ ------
TOTAL RETURN+......................................................... (4.87)%(1) 11.86%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.39%(2)(3) 2.30%(2)
Net investment loss................................................... (1.87)%(2)(3) (1.52)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $654 $559
Portfolio turnover rate............................................... 87%(1) 116%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
TCW/DW GLOBAL TELECOM TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JULY 28, 1997*
NOVEMBER 30, 1998 THROUGH
(UNAUDITED) MAY 31, 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 14.07 $ 12.99
------ ------
Income (loss) from investment operations:
Net investment loss................................................ (0.06) (0.05)
Net realized and unrealized gain (loss)............................ (0.57) 1.62
------ ------
Total income (loss) from investment operations........................ (0.63) 1.57
------ ------
Less distributions from net realized gain............................. -- (0.49)
------ ------
Net asset value, end of period........................................ $ 13.44 $ 14.07
------ ------
------ ------
TOTAL RETURN+......................................................... (4.48)%(1) 12.80%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.39%(2)(3) 1.33%(2)
Net investment loss................................................... (0.87)%(2)(3) (0.46)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $11 $11
Portfolio turnover rate............................................... 87%(1) 116%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini [GRAPHIC]
Charles A. Fiumefreddo GLOBAL
John R. Haire TELECOM TRUST
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 [GRAPHIC]
Thomas E. Larkin, Jr.
President
Barry Fink
Vice President, Secretary and
General Counsel
Robert M. Hanisee SEMIANNUAL REPORT
Vice President NOVEMBER 30, 1998
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
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
Morgan Stanley Dean Witter Services Company Inc.
ADVISER
TCW Funds Management, Inc.
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
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.
