<PAGE>
TCW/DW CORE EQUITY TRUST Two World Trade Center,
LETTER TO THE SHAREHOLDERS September 30, 1997 New York, New York 10048
DEAR SHAREHOLDER:
The U.S. stock market continued its remarkable performance during
the six-month period ended September 30, 1997, gaining more than
26.24 percent. During the second quarter of 1997, the market rebounded
significantly as fears of an interest-rate hike by the Federal Reserve Board
abated. A marked slowing in the rate of economic growth and favorable
inflation numbers lessened those fears and triggered a rally in the bond
market, which carried through into the equity market. Corporate profits
continued to surprise investors on the upside, providing more underlying
strength to this extended business cycle. During the twelve months preceding
the second quarter, the predominant share of the market returns had been
registered by the top 22 largest companies in the Standard & Poor's 500
Composite Stock Index (S&P 500), as measured by market capitalization. This
narrowing of leadership is often compared with the "nifty fifty" craze of the
early 1970s.
The third quarter was punctuated by a significant correction in August,
caused primarily by multinational consumer nondurable companies preannouncing
earnings disappointments. This had the effect of placing pressure on many
large-cap companies. During this correction, a pronounced divergence between
large-cap and small-cap stocks took
shape as the Nasdaq returned 16.9 percent for the quarter, compared to
7.5 percent for the S&P 500. The market rebounded in September as favorable
economic data confirmed the view that the U.S. economy can sustain its
current level of growth while keeping inflation in check.
PERFORMANCE AND PORTFOLIO
On July 28, 1997, TCW/DW Core Equity Trust began offering four classes of
shares -- A, B, C and D -each with its own sales charge and distribution
fee structure. A revised prospectus, which includes complete details
regarding the Fund's conversion to multiple classes of shares, was mailed to
shareholders in mid-summer.
The Fund's Class B shares produced a total return of 26.02 percent for the
six-month period ended September 30, 1997. This return compares to a
<PAGE>
TCW/DW CORE EQUITY TRUST
LETTER TO THE SHAREHOLDERS, continued
return of 26.24 percent for the S&P 500 Index and 27.66 percent for the
Lipper Growth Fund Index. Strong outperformance within the technology,
financial and airlines sectors boosted the Fund's performance during this
period.
During the last six months, TCW Funds Management, Inc. (TCW), the Fund's
investment adviser, made several changes to the Fund's portfolio. Chrysler
Corp., Boston Chicken Inc., American Standard Companies, Inc., Kimberly-Clark
Corp., Storage Technology Corp. and Amgen Inc. were sold, while positions in
Time Warner, Inc., Kellogg Company and Tandy Corp. were added. Chrysler Corp.
had been in the Fund since its inception and has proved to be a tremendously
profitable investment. However, more advantageous investment opportunities
have been found that are not as cyclical in nature.
LOOKING AHEAD
On November 6, 1997, the Board of Trustees of the Fund unanimously
recommended that Dean Witter InterCapital Inc., the parent company of Dean
Witter Services Company Inc., the Fund's current manager, serve as the Fund's
new investment adviser and that a new Investment Management Agreement between
the Fund and InterCapital be submitted to shareholders for approval at a
special meeting expected to be held in February, 1998. The Trustees also
recommended that a new sub-advisory agreement between InterCapital and Morgan
Stanley Asset Management Inc. be submitted to shareholders for approval at
the same special meeting.
The Trustees also nominated for election or re-election, as appropriate, the
following nine nominees to the Fund's Board of Trustees: Michael Bozic,
Charles A. Fiumefreddo, Edwin Jacob Garn, John R. Haire, Wayne E. Hedien, Dr.
Manuel H. Johnson, Michael E. Nugent, Philip J. Purcell and John L.
Schroeder. Messrs. Fiumefreddo, Haire, Johnson, Nugent and Schroeder
currently serve as Trustees of the Fund and, with the exception of Mr.
Schroeder, were previously elected by shareholders. Messrs. Bozic, Garn,
Hedien and Purcell currently hold directorships or trusteeships with 84 other
investment companies for which InterCapital serves as investment manager or
investment adviser.
Finally, the Trustees also recommended that the Fund's name be changed from
TCW/DW Core Equity Trust to Dean Witter Growth Fund upon effectiveness of the
aforementioned proposals.
<PAGE>
TCW/DW CORE EQUITY TRUST
LETTER TO THE SHAREHOLDERS, continued
A shareholder letter and supplement to the Fund's July 28, 1997 prospectus
announcing the Trustees' recommendations was mailed to shareholders in early
November. A proxy statement formally detailing the proposals and the reasons
for the Trustees' action will be distributed to shareholders of the Fund. We
ask that you review the proxy statement carefully upon receipt and vote on
the proposals set forth therein.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
TCW/DW CORE EQUITY TRUST
PORTFOLIO OF INVESTMENTS September 30, 1997 (unaudited)
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCKS (99.1%)
Air Transport (5.8%)
64,300 AMR Corp.* ...................................... $ 7,117,206
257,300 Delta Air Lines, Inc. ........................... 24,234,444
205,900 UAL Corp.* ...................................... 17,424,287
------------
48,775,937
------------
Aircraft & Aerospace (6.7%)
500,600 Boeing Co. ...................................... 27,251,412
361,400 United Technologies Corp. ....................... 29,273,400
------------
56,524,812
------------
Auto Parts - Original Equipment (4.9%)
460,800 Lear Corp.* ..................................... 22,694,400
Magna International, Inc.
265,900 (Class A)(Canada) ............................... 18,380,337
------------
41,074,737
------------
Automobiles (3.8%)
703,600 Ford Motor Co. .................................. 31,837,900
------------
Banks-Money Center (3.1%)
193,600 Citicorp ........................................ 25,930,300
------------
Beverages - Soft Drinks (2.2%)
458,600 PepsiCo, Inc. ................................... 18,601,962
------------
Brokerage (2.8%)
316,200 Merrill Lynch & Co., Inc. ....................... 23,458,087
------------
Commercial Services (2.3%)
435,100 Corrections Corp. of America* ................... 18,926,850
------------
Communications - Equipment & Software (4.0%)
464,406 Cisco Systems, Inc.* ............................ 33,930,663
------------
Computer Services (2.6%)
312,800 Computer Sciences Corp.* ........................ 22,130,600
------------
Computer Software (5.3%)
274,300 Microsoft Corp.* ................................ 36,293,319
218,100 Oracle Corp.* ................................... 7,947,019
------------
44,240,338
------------
Computers - Systems (1.2%)
312,200 Tandy Corp. ..................................... 10,497,725
------------
Electrical Equipment (4.7%)
203,100 Honeywell, Inc. ................................. 13,645,781
969,111 Westinghouse Electric Corp. ..................... 26,226,566
------------
39,872,347
------------
Electronics - Semiconductors/
Components (6.6%)
598,900 Intel Corp. ..................................... 55,323,387
------------
Entertainment (2.1%)
594,900 Mirage Resorts, Inc.* ........................... 17,921,363
------------
Financial (2.3%)
413,700 Fannie Mae ...................................... $ 19,443,900
------------
Financial Services (2.4%)
318,500 Associates First Capital Corp. (Class A) ........ 19,826,625
------------
Foods (1.5%)
301,100 Kellogg Company ................................. 12,683,838
------------
Healthcare - Diversified (5.6%)
196,100 Johnson & Johnson ............................... 11,300,263
206,300 United Healthcare Corp. ......................... 10,315,000
188,800 Warner-Lambert Co. .............................. 25,476,200
------------
47,091,463
------------
Healthcare - Drugs (2.9%)
204,500 Lilly (Eli) & Co. ............................... 24,680,594
------------
Insurance (2.4%)
258,200 Marsh & McLennan Companies, Inc. ................ 19,784,575
------------
Machinery - Construction & Materials (3.0%)
461,200 Caterpillar, Inc. ............................... 24,875,975
------------
Office Equipment & Supplies (1.6%)
156,000 Xerox Corp. ..................................... 13,133,250
------------
Oil - Exploration & Production (1.2%)
338,700 Canadian Natural Resources Ltd. (Canada)* ....... 9,994,949
------------
Oil Integrated - International (1.0%)
89,900 Amoco Corp. ..................................... 8,664,113
------------
Publishing (2.9%)
445,400 Time Warner, Inc. ............................... 24,135,113
------------
Railroads (1.7%)
150,997 Burlington Northern Santa Fe Corp. .............. 14,590,085
------------
Retail - Specialty (3.7%)
600,850 Home Depot, Inc. ................................ 31,319,306
------------
Soap & Household Products (3.3%)
404,200 Procter & Gamble Co. ............................ 27,915,063
Telecommunications (2.9%)
382,800 Ascend Communications, Inc.* .................... 12,369,225
151,600 Lucent Technologies, Inc. ....................... 12,336,450
------------
24,705,675
------------
Tobacco (2.6%)
515,800 Philip Morris Companies, Inc. ................... 21,437,938
------------
TOTAL COMMON STOCKS
(Identified Cost $513,011,199) .................. 833,329,470
------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW CORE EQUITY TRUST
PORTFOLIO OF INVESTMENTS September 30, 1997 (unaudited) continued
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENT (0.3%)
REPURCHASE AGREEMENT
$2,403 The Bank of New York
5.25% due 10/01/97
(dated 09/30/97; proceeds
$2,403,617)(a)
(Identified Cost $2,403,267) ................... $ 2,403,267
------------
TOTAL INVESTMENTS
(Identified Cost $515,414,466)(b) .................. 99.4% 835,732,737
OTHER ASSETS IN EXCESS OF
LIABILITIES ......................................... 0.6 4,755,680
----- ------------
NET ASSETS .......................................... 100.0% $840,488,417
===== ============
- ------------
* Non-income producing security.
(a) Collateralized by $2,305,251 U.S. Treasury Note 7.50% due 10/31/99
valued at $2,451,332.
(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$334,119,336 and the aggregate gross unrealized depreciation is
$13,801,065, resulting in net unrealized appreciation of
$320,318,271.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW CORE EQUITY TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $515,414,466).......................... $835,732,737
Receivable for:
Investments sold....................................... 5,328,000
Shares of beneficial interest sold..................... 562,963
Dividends.............................................. 514,911
Prepaid expenses and other assets........................ 184,390
------------
TOTAL ASSETS .......................................... $842,323,001
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased.............. 704,516
Plan of distribution fee............................... 471,945
Management fee ........................................ 374,452
Investment advisory fee................................ 249,635
Accrued expenses and other payables ..................... 34,036
------------
TOTAL LIABILITIES...................................... 1,834,584
------------
NET ASSETS............................................. $840,488,417
============
COMPOSITION OF NET ASSETS:
Paid-in-capital.......................................... $443,111,377
Net unrealized appreciation ............................. 320,318,271
Net investment loss...................................... (2,570,926)
Accumulated undistributed net realized gain.............. 79,629,695
------------
NET ASSETS ............................................ $840,488,417
============
CLASS A SHARES:
Net Assets............................................... $19,781
Shares Outstanding (unlimited authorized,
$.01 par value)........................................ 1,121
NET ASSET VALUE PER SHARE ............................. $17.65
======
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) ...... $18.63
======
CLASS B SHARES:
Net Assets............................................... $840,330,312
Shares Outstanding (unlimited authorized,
$.01 par value)........................................ 47,640,662
NET ASSET VALUE PER SHARE ............................. $17.64
======
CLASS C SHARES:
Net Assets............................................... $128,258
Shares Outstanding (unlimited authorized,
$.01 par value)........................................ 7,274
NET ASSET VALUE PER SHARE ............................. $17.63
======
CLASS D SHARES:
Net Assets............................................... $10,066
Shares Outstanding (unlimited authorized,
$.01 par value)........................................ 570
NET ASSET VALUE PER SHARE ............................. $17.66
======
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW CORE EQUITY TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended September 30, 1997* (unaudited)
NET INVESTMENT INCOME:
INCOME
Dividends (net of $17,747 foreign withholding
tax).............................................. $ 4,027,911
Interest........................................... 74,567
------------
TOTAL INCOME..................................... 4,102,478
------------
EXPENSES
Plan of distribution fee (Class B shares) ......... 2,744,816
Management fee .................................... 2,083,167
Investment advisory fee ........................... 1,388,778
Transfer agent fees and expenses................... 335,087
Shareholder reports and notices.................... 27,240
Custodian fees..................................... 22,474
Professional fees.................................. 22,171
Trustees' fees and expenses........................ 18,818
Registration fees.................................. 15,357
Organizational expenses............................ 6,681
Other.............................................. 8,815
------------
TOTAL EXPENSES .................................. 6,673,404
------------
NET INVESTMENT LOSS.............................. (2,570,926)
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain.................................. 79,731,203
Net change in unrealized appreciation.............. 107,209,341
------------
NET GAIN......................................... 186,940,544
------------
NET INCREASE....................................... $184,369,618
============
- ------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW CORE EQUITY TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1997* MARCH 31, 1997
- --------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss.................................... $ (2,570,926) $ (5,793,842)
Net realized gain...................................... 79,731,203 90,999,031
Net change in unrealized appreciation ................. 107,209,341 (22,753,082)
------------ ------------
NET INCREASE ........................................ 184,369,618 62,452,107
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
REALIZED GAIN
Class B shares........................................ (59,461,770) (61,217,104)
Net decrease from transactions in shares of
beneficial interest................................... (11,947,461) (40,876,663)
------------ ------------
NET INCREASE (DECREASE).............................. 112,960,387 (39,641,660)
NET ASSETS:
Beginning of period.................................... 727,528,030 767,169,690
------------ ------------
END OF PERIOD
(Including a net investment loss of $2,570,926 and
$0, respectively)................................... $840,488,417 $727,528,030
============ ============
</TABLE>
- ------------
* Class A, Class C, and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW CORE EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
TCW/DW Core Equity Trust (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open-end management
investment company. The Fund's investment objective is long-term growth of
capital. The Fund seeks to achieve its objective by investing primarily in
common stocks and securities convertible into common stocks issued by
domestic and foreign companies. The Fund was organized as a Massachusetts
business trust on January 31, 1992 and commenced operations on May 29, 1992.
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, 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; (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
the 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) short-term debt securities having a maturity date of more than sixty days
at time of purchase are valued on a
<PAGE>
TCW/DW CORE EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
mark-to-market basis until sixty days prior to maturity and thereafter at
amortized cost based on their value on the 61st day. Short-term debt
securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date. 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. 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.
E. 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.
F. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. ("InterCapital"),
an affiliate of Dean Witter Services Company Inc. (the "Manager"), paid the
organizational expenses of approximately $202,000 which have been reimbursed
for the full amount thereof, exclusive of $2,000 which has been absorbed by
InterCapital. 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.
<PAGE>
TCW/DW CORE EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
2. MANAGEMENT AGREEMENT
Pursuant to a Management Agreement, the Fund pays the Manager a management
fee, accrued daily and payable monthly, by applying the following annual
rates to the Fund's daily net assets determined at the close of each business
day: 0.51% to the portion of daily net assets not exceeding $750 million;
0.48% to the portion of daily net assets exceeding $750 million but not
exceeding $1.5 billion; and 0.45% to the portion of daily net assets
exceeding $1.5 billion.
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 following
annual rates to the Fund's daily net assets determined at the close of each
business day: 0.34% to the portion of daily net assets not exceeding $750
million; 0.32% to the portion of daily net assets exceeding $750 million but
not exceeding $1.5 billion; and 0.30% to the portion of daily net assets
exceeding $1.5 billion.
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 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 -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
<PAGE>
TCW/DW CORE EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
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 -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, the account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Manager and Distributor, and others who engage in or support
distribution of the shares or who service shareholder accounts, including
overhead and 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
DWR 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 $20,200,651 at
September 30, 1997.
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 account executives may be reimbursed in
the subsequent calendar year. For the period ended September 30, 1997, 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 period ended September 30,
1997, it received contingent deferred sales charges from certain redemptions
of the Fund's Class B shares of $687,899 and received $524 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.
<PAGE>
TCW/DW CORE EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (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 September 30, 1997
aggregated $133,456,965 and $212,730,152, respectively.
For the six months ended September 30, 1997, the Fund incurred $3,195 in
brokerage commissions with DWR for portfolio transactions executed on behalf
of the Fund.
For the period May 31, 1997 through September 30, 1997, the Fund incurred
brokerage commissions of $3,040 with Morgan Stanley & Co. Inc., an affiliate
of the Manager since May 31, 1997, for portfolio transactions executed on
behalf of the Fund.
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
SEPTEMBER 30, 1997 MARCH 31, 1997
------------------------- ---------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold 1,121 $ 19,497 -- --
--------- ------------ ---------- -------------
CLASS B SHARES
Sold 1,217,575 20,625,735 3,329,142 $ 52,606,423
Reinvestment of distributions 3,375,053 55,418,369 3,693,581 57,173,675
Redeemed (5,169,883) (88,150,072) (9,631,148) (150,656,761)
--------- ------------ ---------- -------------
Net decrease - Class B (577,255) (12,105,968) (2,608,425) (40,876,663)
--------- ------------ ---------- -------------
CLASS C SHARES*
Sold 8,398 148,798
Redeemed (1,124) (19,809) -- --
--------- ------------ ---------- -------------
Net increase - Class C 7,274 128,989 -- --
--------- ------------ ---------- -------------
CLASS D SHARES*
Sold 570 10,021 -- --
--------- ------------ ---------- -------------
Net decrease in Fund (568,290) $(11,947,461) (2,608,425) $ (40,876,663)
========= ============ ========== =============
</TABLE>
- ------------
* For the period July 28, 1997 (issue date) through September 30, 1997.
<PAGE>
TCW/DW CORE EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
7. SUBSEQUENT EVENT
On November 6, 1997, the Board of Trustees of the Fund recommended that the
Fund engage InterCapital to serve as the Fund's new investment manager.
InterCapital would be responsible for all of the services that are presently
being provided in accordance with the current management agreement between
the Fund and the Manager and the current investment advisory agreement
between the Fund and the Adviser. The fee paid to InterCapital would be five
basis points lower than the total aggregate fees paid to the Manager and the
Adviser.
Additionally, the Board recommended that InterCapital engage Morgan Stanley
Asset Management Inc. ("MSAM"), an affiliate of the Manager, as the Fund's
Sub-Adviser. In return for MSAM's services, InterCapital would pay MSAM 40%
of its compensation.
Both proposals are subject to the consent of the Fund's shareholders.
<PAGE>
TCW/DW CORE EQUITY TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR ENDED MARCH 31, MAY 29, 1992*
MONTHS ENDED -------------------------------------------- THROUGH
SEPTEMBER 30, 1997**++ 1997 1996 1995 1994 MARCH 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $15.09 $15.09 $12.11 $12.10 $11.26 $ 10.00
------ ------ ------ ------ ------ --------
Net investment loss....................... (0.05) (0.12) (0.11) (0.06) (0.06) (0.01)
Net realized and unrealized gain.......... 3.88 1.39 3.09 0.07 0.90 1.27
------ ------ ------ ------ ------ --------
Total from investment operations.......... 3.83 1.27 2.98 0.01 0.84 1.26
------ ------ ------ ------ ------ --------
Less distributions from net realized gain (1.28) (1.27) -- -- -- --
------ ------ ------ ------ ------ --------
Net asset value, end of period............ $17.64 $15.09 $15.09 $12.11 $12.10 $ 11.26
====== ====== ====== ====== ====== ========
TOTAL INVESTMENT RETURN+ ................. 26.02%(1) 8.31% 24.69% 0.08% 7.46% 12.60%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................. 1.63%(2) 1.73% 1.82% 1.96% 1.93% 2.07%(2)
Net investment loss....................... (0.05)%(2) (0.75)% (0.72)% (0.48)% (0.59)% (0.14)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $840,330 $727,528 $767,170 $697,350 $707,069 $486,829
Portfolio turnover rate................... 17%(1) 45% 48% 38% 35% 26%(1)
Average commission rate paid.............. $0.0596 $0.0590 $0.0595 -- -- --
</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
<PAGE>
TCW/DW CORE EQUITY TRUST
FINANCIAL HIGHLIGHTS, continued
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30, 1997++
- --------------------------------------------------------------
[S] [C]
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 17.58
-------
Net realized and unrealized gain ....... 0.07
-------
Net asset value, end of period .......... $ 17.65
=======
TOTAL INVESTMENT RETURN+ ................ 0.40%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 1.24%(2)
Net investment loss ..................... -- %(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 20
Portfolio turnover rate ................. 17%(1)
Average commission rate paid ............ $0.0596
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 17.58
-------
Net investment loss ..................... (0.03)
Net realized and unrealized gain ....... 0.08
-------
Total from investment operations ....... 0.05
-------
Net asset value, end of period .......... $ 17.63
=======
TOTAL INVESTMENT RETURN+ ................ 0.28%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 2.00%(2)
Net investment loss ..................... (0.03)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 128
Portfolio turnover rate ................. 17%(1)
Average commission rate paid ............ $0.0596
- ------------
* 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
<PAGE>
TCW/DW CORE EQUITY TRUST
FINANCIAL HIGHLIGHTS, continued
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30, 1997++
- ---------------------------------------------------------------
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $17.58
------
Net investment income ................... 0.01
Net realized and unrealized gain ....... 0.07
------
Total from investment operations ....... 0.08
------
Net asset value, end of period .......... $17.66
======
TOTAL INVESTMENT RETURN+ ................ 0.46%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 0.97%(2)
Net investment income ................... 0.01%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 10
Portfolio turnover rate ................. 17%(1)
$0.0596
Average commission rate paid ............
- ------------
* 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
<PAGE>
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<PAGE>
(This page has been left blank intentionally.)
<PAGE>
BOARD OF DIRECTORS
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Thomas E. Larkin, Jr.
Michael E. Nugent
Philip J. Purcell
Marc I. Stern
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Thomas E. Larkin
President
Barry Fink
Vice President, Secretary and
General Counsel
Robert M. Hanisee
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
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.
TCW/DW
CORE EQUITY
TRUST
SEMIANNUAL REPORT
September 30, 1997
