<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
For the six-month period ended July 31, 1996, TCW/DW Latin American Growth
Fund registered a total return of 3.06 percent, compared to 1.13 percent for the
International Finance Corporation (IFC) Investable Latin America Total Return
Index.
MARKET OVERVIEW
Over the first six months of the year, Latin American stock markets rallied
nearly 16 percent, with a particularly strong showing in January. In July,
however, these markets experienced substantial profit taking, in concert with
the correction in the U.S. stock market. The strong capital inflows and renewed
investor interest in the region in 1996 are the result of an improved earnings
growth outlook. Corporate earnings growth has been robust, with growth rates in
the high teens expected this year. Also, a large number of Latin American
companies have been able to sell their stock in the international markets. The
attractiveness of these companies is evidenced by the strong interest among
managers of mutual funds that are not dedicated to these Latin American markets.
INDIVIDUAL MARKETS
BRAZIL
Brazilian equities outperformed other major Latin American markets, rising
approximately four percent for the six months ended July 31, 1996. Continued
progress on the deregulation and reduction of the federal government's role in
the telecommunications, electricity and petroleum sectors, caused the shares in
many of these state-owned companies to appreciate. The banking and consumer
sectors also performed well as consumer credit became more readily available.
However, an overall lack of economic momentum and increased competitive
pressures have resulted in lackluster performance on the part of many other
Brazilian companies.
MEXICO
The Mexican equity market declined nearly two percent over the six-month
period under review, with strong gains early in the year being offset by
declines in July, which were primarily attributable to the correction in the
U.S. stock market and concerns that U.S. interest rates would rise. However, the
Mexican stock market's weakness overshadowed a number of positive developments
in the real economy, including a continued decline in monthly inflation, a
healthy trade surplus (with exports continuing to post double-digit growth) and
increase in monthly retail sales. In addition, higher-than-consensus
first-quarter economic growth bolstered investor confidence that the economic
contraction had indeed ended. Furthermore, the Mexican government's announcement
that it would make an early loan repayment to the U.S. government of $4.7
billion signals Mexico's growing ability to tap the voluntary international
capital markets.
ARGENTINA
The Argentine equity market fell nearly 10 percent over the six months ended
July 31, 1996. The resignation of Finance Minister Cavallo initially sent
tremors through the market because he had been the architect of Argentina's
economic program since 1991. The transition to the new Finance Minister, Roque
Fernandez, has been smooth. Fernandez is committed to the government's current
economic program and enjoys a broad base of support from the Argentine Congress,
business leaders and investors. While the economy continues to recover
anemically, the market remains dependent on the actions of both the new
<PAGE>
Finance Minister and legislation which could further deregulate the Argentine
economy. In particular, the market will be focusing on measures that the finance
Minister will propose to reduce the country's growing fiscal deficit.
CHILE
The Chilean equity market increased approximately three percent for the
period, as strong gains during the second quarter outweighed losses posted in
the first three months of the year. During the first quarter of 1996, the
Chilean market suffered from high interest rates and selling pressure related to
the liquidation of a large closed-end investment fund. Recent data showing a
slowdown in industrial production and industrial sales indicate that the rate of
economic growth might be moderating. The Chilean market also outperformed other
Latin American markets in July, as it is less influenced by external events
connected to the country's large domestic savings base.
PERU
Peruvian equities rose approximately six percent during the period under
review, outperforming other markets in the region, as fears of "stagflation" and
recession proved unwarranted. Although economic growth rates have slowed
significantly from previous years, and while many observers had anticipated zero
or negative growth, many analysts now predict that economic expansion for the
first six months of 1996 will be at least one percent versus the same period
last year. Many analysts further believe that the Peruvian economy will continue
to accelerate over the balance of 1996, bringing growth for the full year to
approximately three percent. Furthermore, inflation appears to again be on a
steady decline. The government's efforts to reduce the growing current-account
and trade deficits by slowing growth through fiscal tightening appear to be
paying off, as both figures improved during the first quarter of the year. The
current-account deficit registered during the first four months of the year was
nearly 30 percent lower than during the same period in 1995. Finally, the
privatization process in Peru continued to move forward with the government's
sale of nearly all of its remaining stake in the Peruvian telephone company.
COLOMBIA
Although Colombian equities rose nearly three percent for the six months
ended July 31, 1996, the market continues to be hampered by the political crisis
resulting from allegations that President Samper's presidential campaign was
partially financed by contributions made by drug-traffickers. Thus far,
expectations that the growing isolation of the president from his former
political allies and the business community would force his ouster have proved
to be unfounded. Following the decertification of Colombia's antinarcotic
program by the United States during the first quarter, investors have recently
become wary that the U.S. government will impose further sanctions on Colombia.
On a positive note, the lowering of reserve requirements by Colombia's central
bank has led to a slight decline in interest rates, and second quarter corporate
earnings were somewhat better than the market's expectations.
THE PORTFOLIO
According to the adviser, TCW Funds Management, Inc. (TCW), the Fund's
outperformance of the IFC Index can be attributed, in part, to the four percent
gain posted by Brazilian equities during the period under review. The Fund has
been concentrated in Brazilian state-owned companies, particularly in the
telecommunications sector, which outperformed the overall Brazil index. The
Fund's weighting in Brazilian equities was approximately 36 percent of net
assets at the end of July.
Signs that an economic recovery is under way has led the Fund to maintain a
strong weighting in Mexican equities (approximately 30 percent of net assets at
the end of July). Because of strong earnings growth and the expectation of a
decline in interest rates, Chilean holdings also represent a substantial portion
of the portfolio
<PAGE>
(approximately 15 percent of net assets). The Fund's Argentine exposure remained
steady at about 10 percent of net assets. An improved economic climate has led
the investment adviser to gradually increase the Fund's exposure to Peruvian
equities (approximately five percent of net assets). Exposure to Colombian
equities (approximately two percent of net assets) has been reduced since an
economic recovery is not expected to occur in the near future. On July 31, 1996,
the Fund was fully invested, with a cash position of less than two percent.
OUTLOOK
The investment adviser continues to be optimistic regarding the potential
for further gains by the Latin American equity markets. Improving economic
fundamentals throughout much of the region indicate that economic growth rates
are improving in Mexico, which suffered an economic contraction in 1995.
Furthermore, the investment adviser believes that there is room for a further
decline in real Mexican interest rates from their current level of 12 percent.
Mexican equity prices are expected to react positively to such a decline, as
well as to second-half corporate earnings which the investment adviser believes
are poised to reflect the pick-up in economic activity.
Given the ongoing process in Brazil of tariff adjustment, deregulation and
in some cases privatization, the investment adviser's outlook for state-owned
companies in that country continues to be favorable. The outlook for the Chilean
equity market also continues to be promising, according to the investment
adviser, with the current consensus being seven percent real gross domestic
product growth in 1996, followed by four percent growth in 1997. As economic
growth in Chile continues to moderate, the investment adviser expects to see a
loosening of monetary policy. The investment adviser's outlook for Argentina
remains tenuous for the time being. In Colombia, while the president may attempt
to win popularity by stimulating the sluggish economy -- which would likely
result in a widening of the fiscal deficit -- monetary policy is expected to
remain tight. In conclusion, the investment adviser believes that the benefits
of economic reform are ringing true for Latin America, which should bode well
for earnings growth in the region.
We appreciate your support of TCW/DW Latin American Growth Fund and look
forward to continuing to serve your investment needs and objectives.
Very truly yours,
[SIGNATURE]
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- -------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (98.6%)
ARGENTINA (10.3%)
AUTOMOTIVE
96,900 Ciadea S.A.*.................... $ 547,501
-------------
BANKS
74,016 Banco de Galicia y Buenos Aires
S.A. de C.V. (ADR)............ 1,591,344
88,605 Banco Frances del Rio de la
Plata S.A. (ADR).............. 2,115,444
-------------
3,706,788
-------------
BUILDING & CONSTRUCTION
212,928 Juan Minetti S.A................ 585,570
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
134,723 Bagley S.A. (Class B)........... 297,747
230,667 Molinos Rio de la Plata S.A.
(Class B)*.................... 745,077
70,192 Nobleza Piccardo S.A............ 249,189
-------------
1,292,013
-------------
MULTI-INDUSTRY
1,499,032 Perez Companc S.A. (Class B).... 8,619,693
-------------
OIL & GAS
785,599 Astra Compania Argentina de
Petroleo S.A.................. 1,178,434
63,850 Transportadora de Gas del Sur
S.A. (ADR).................... 750,238
147,559 Yacimentos Petroliferos Fiscales
S.A. (ADR).................... 3,098,739
-------------
5,027,411
-------------
REAL ESTATE
339,982 Inversiones y
Representaciones S.A.......... 992,777
-------------
STEEL
51,040 Siderar S.A. (A Shares) (ADR)* -
144A**........................ 988,900
1,111,600 Siderca S.A. (Class A).......... 1,367,309
-------------
2,356,209
-------------
TELECOMMUNICATIONS
72,103 Telecom Argentina Stet - France
Telecom S.A................... 271,836
20,200 Telecom Argentina Stet - France
Telecom S.A. (ADR)............ 767,600
87,385 Telefonica de Argentina
S.A. (ADR).................... 2,042,624
-------------
3,082,060
-------------
TOTAL ARGENTINA................. 26,210,022
-------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- -------------
<C> <S> <C>
BRAZIL (35.9%)
BANKING
647,190,305 Banco Bradesco S.A. (Pref.)..... $ 5,111,079
3,942,200 Banco Itau S.A. (Pref.)......... 1,529,402
14,000,000 Uniao de Bancos Brasileiros S.A.
(Pref.)....................... 353,110
-------------
6,993,591
-------------
BREWERY
15,326,964 Companhia Cervejaria Brahma
(Pref.)*...................... 9,365,637
-------------
BUILDING MATERIALS
2,545,000 Companhia Cimento Portland Itau
(Pref.)....................... 620,548
9,000,000 Duratex S.A. (Pref.)............ 363,376
-------------
983,924
-------------
FINANCIAL SERVICES
2,807,000 Itausa Investimentos Itau
S.A. (Pref.).................. 2,161,362
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
5,360,000 Brasmotor S.A. (Pref.).......... 1,904,837
227,137,939 Refrigeracao Parana S.A......... 627,825
-------------
2,532,662
-------------
MACHINERY - DIVERSIFIED
943,200 Confab Industrial S.A.
(Pref.)....................... 363,127
-------------
METALS & MINING
39,735,000 Companhia Siderurgica Nacional.. 917,867
272,058 Companhia Vale do Rio Doce S.A.
(Pref.)....................... 5,156,479
-------------
6,074,346
-------------
OIL & GAS
53,503,000 Petroleo Brasileiro S.A.
(Pref.)....................... 5,994,660
-------------
PAPER & FOREST PRODUCTS
210,670 Aracruz Celulose S.A. (ADR)..... 1,790,695
1,056,000 Industrias Klabin de Papel e
Celulose S.A. (Pref.)......... 1,094,571
-------------
2,885,266
-------------
STEEL & IRON
1,449,000,000 Usinas Siderurgicas de Minas
Gerais S.A. (Pref.)........... 1,544,837
-------------
TELECOMMUNICATIONS
49,422,000 Telecomunicacoes Brasileiras
S.A........................... 2,975,565
63,300 Telecomunicacoes Brasileiras
S.A. (ADR).................... 4,589,250
347,083,140 Telecomunicacoes Brasileiras
S.A. (Pref.).................. 25,217,492
22,275,300 Telecomunicacoes de Sao Paulo
S.A. (Pref.)*................. 4,397,887
-------------
37,180,194
-------------
</TABLE>
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1996 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- -------------
<C> <S> <C>
TEXTILES
2,120,600 Companhia de Tecidos Norte de
Minas......................... $ 731,638
-------------
UTILITIES - ELECTRIC
12,922,338 Centrais Electricas Brasileiras
S.A. (ADR).................... 3,571,821
24,276,403 Centrais Electricas Brasileiras
S.A. (Pref.).................. 7,045,669
32,000 Companhia Energetica de Minas
Gerais S.A. (ADR)............. 876,000
58,756 Companhia Energetica de Minas
Gerais S.A. (ADR) - 144A**.... 1,608,446
4,710,900 Light Participacoes S.A......... 796,854
-------------
13,898,790
-------------
TOTAL BRAZIL.................... 90,710,034
-------------
CHILE (14.5%)
BANKING
49,550 Banco BHIF (ADR)*............... 941,450
-------------
BUILDING & CONSTRUCTION
94,200 Madeco S.A. (ADR)............... 2,402,100
51,503 Maderas y Sinteticos Sociedad
Anonima Masisa (ADR).......... 875,551
-------------
3,277,651
-------------
CHEMICALS
36,620 Sociedad Quimica y Minera de
Chile S.A. (ADR).............. 2,009,522
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
51,945 Compania Cervecerias Unidas S.A.
(ADR)......................... 1,233,694
112,340 Embotelladora Andina
S.A. (ADR).................... 4,156,580
-------------
5,390,274
-------------
INVESTMENT COMPANIES
91,495 Genesis Chile Fund Ltd.......... 3,671,237
1,658,300 The Five Arrows Chile Investment
Trust Ltd..................... 4,659,823
-------------
8,331,060
-------------
SUPERMARKETS
102,800 Santa Isabel S.A. (ADR)......... 2,775,600
-------------
TELECOMMUNICATIONS
43,400 Compania de
Telecommunicaciones de Chile
S.A. (ADR).................... 4,215,225
-------------
UTILITIES - ELECTRIC
31,100 Chilectra S.A. (ADR) - 144A**... 1,784,362
48,210 Chilgener S.A. (ADR)............ 1,144,987
94,100 Empresa Nacional de
Electricidad Chile S.A.
(ADR)......................... 1,917,288
167,404 Enersis S.A. (ADR).............. 5,105,822
-------------
9,952,459
-------------
TOTAL CHILE..................... 36,893,241
-------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- -------------
<C> <S> <C>
COLOMBIA (2.4%)
BANKING
266,066 Banco de Bogota................. $ 1,349,756
59,000 Banco Industrial Colombiano S.A.
(ADR)......................... 921,875
-------------
2,271,631
-------------
BUILDING & CONSTRUCTION
75,400 Cementos Diamante S.A. (ADR) -
144A**........................ 796,450
119,375 Compania de Cementos
Argos S.A..................... 633,890
-------------
1,430,340
-------------
FINANCIAL SERVICES
42,604 Compania Suramericana de Seguros
S.A........................... 727,169
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
124,829 Compania Nacional de Chocolates
S.A........................... 1,056,418
-------------
RETAIL
193,527 Almacenes Exito S.A............. 550,339
-------------
TOTAL COLOMBIA.................. 6,035,897
-------------
MEXICO (30.2%)
AUTOMOTIVE
4,896,000 Industria Automotriz S.A. (B
Shares)*...................... 742,503
56,440 Sanluis Corporacion S.A. de C.V.
(Units)++..................... 330,468
-------------
1,072,971
-------------
BANKING
1,000,500 Grupo Financiero Inbursa S.A. de
C.V. (B Shares)............... 3,958,196
-------------
BUILDING & CONSTRUCTION
126,700 Empresas ICA Sociedad
Controladora S.A. de C.V.
(ADR)*........................ 1,694,612
-------------
BUILDING MATERIALS
272,300 Apasco S.A. de C.V.............. 1,520,758
1,862,600 Cemex S.A. de C.V. (B Shares)... 6,656,529
882,080 Grupo Cementos de Chihuahua S.A.
de C.V. (B Shares)*........... 939,893
-------------
9,117,180
-------------
CONGLOMERATES
1,237,799 Grupo Carso S.A. de C.V. (Series
A1)*.......................... 4,921,488
2,128,280 Grupo Industria Alfa S.A. de
C.V. (A Shares)............... 8,476,072
-------------
13,397,560
-------------
CONSTRUCTION & HOUSING
148,400 Corporacion GEO S.A. de C.V.
(Series B)*................... 637,006
-------------
</TABLE>
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1996 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- -------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
164,800 Empresas la Moderna S.A. de C.V.
(ADR)......................... $ 2,863,400
683,500 Fomento Economico Mexicano S.A.
de C.V. (B Shares)............ 1,775,676
457,900 Grupo Industrial Bimbo S.A. de
C.V. (Series A)............... 2,125,555
599,340 Grupo Industrial Maseca S.A. de
C.V. (B2 Shares).............. 679,721
112,000 Grupo Modelo S.A. de C.V.
(Series C) ... 512,515
516,800 Jugos de Valle S.A. de C.V. (B
Shares)....................... 1,008,656
18,170 Panamerican Beverages, Inc.
(Class A) .... 783,581
-------------
9,749,104
-------------
MEDIA GROUP
161,100 Grupo Televisa S.A. (GDR)*...... 4,269,150
-------------
METALS & MINING
65,400 Grupo Mexico S.A. (Series B).... 211,733
265,384 Tubos de Acero de Mexico S.A. de
C.V. (ADR)*................... 2,637,253
-------------
2,848,986
-------------
MULTI-INDUSTRY
377,800 DESC S.A. de C.V. (Series B).... 1,793,591
6,783 DESC S.A. de C.V. (Series C)*... 32,560
-------------
1,826,151
-------------
MULTI-LINE INSURANCE
1,237,799 Invercorporacion S.A.
(Series A1)*.................. 200,777
-------------
PAPER & FOREST PRODUCTS
396,300 Kimberly-Clark de Mexico S.A. de
C.V. (A Shares)............... 6,668,585
-------------
RETAIL
4,530,918 Cifra S.A. de C.V. (C Shares)*.. 6,142,402
-------------
TELECOMMUNICATIONS
463,973 Telefonos de Mexico S.A. de C.V.
(Series L) (ADR).............. 14,209,173
-------------
TRANSPORTATION
141,500 Transportacion Maritima Mexicana
S.A. de C.V. (Series A)
(ADR)......................... 813,625
-------------
TOTAL MEXICO.................... 76,605,478
-------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- -------------
<C> <S> <C>
PERU (4.6%)
BREWERY
1,435,893 Cerveceria Backus & Johnston
S.A........................... $ 1,562,401
-------------
FINANCIAL SERVICES
117,419 Credicorp Ltd. (ADR)............ 2,333,703
-------------
METALS & MINING
43,000 Companhia de Minas Buenaventura
S.A. (ADR)*................... 768,625
183,144 Companhia de Minas Buenaventura
S.A. (A Shares)............... 1,576,392
45,786 Companhia de Minas Buenaventura
S.A. (B Shares)............... 408,969
-------------
2,753,986
-------------
TELECOMMUNICATIONS
20,800 CPT Telefonica del Peru S.A.
(ADR)......................... 455,000
2,118,420 CPT Telefonica del Peru S.A. (B
Shares)....................... 4,601,521
-------------
5,056,521
-------------
TOTAL PERU...................... 11,706,611
-------------
VENEZUELA (0.7%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
93,000 Mavesa (ADR) - 144A**........... 372,000
-------------
STEEL & IRON
135,900 Siderurgica Venezolana Sivens
S.A. de C.V. (ADR)............ 410,418
-------------
UTILITIES - ELECTRIC
1,370,967 C.A. la Electricidad de Caracas
S.A.C.A....................... 1,010,416
-------------
TOTAL VENEZUELA................. 1,792,834
-------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST
$224,659,880) (A)................ 98.6% 249,954,117
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES...................... 1.4 3,677,334
----- -----------
NET ASSETS......................... 100.0% $253,631,451
----- -----------
----- -----------
<FN>
- ------------------
ADR AMERICAN DEPOSITORY RECEIPT.
GDR GLOBAL DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
** RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
++ CONSISTS OF ONE OR MORE THAN ONE CLASS OF SECURITIES TRADED TOGETHER AS A
UNIT; GENERALLY STOCKS WITH ATTACHED WARRANTS.
(A) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $232,740,137; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $35,527,041 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $18,313,061, RESULTING IN NET UNREALIZED
APPRECIATION OF $17,213,980.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
SUMMARY OF INVESTMENTS JULY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Automotive.............................................................................. $ 1,620,472 0.6%
Banking................................................................................. 14,164,868 5.6
Banks................................................................................... 3,706,788 1.5
Brewery................................................................................. 10,928,038 4.3
Building & Construction................................................................. 6,988,173 2.8
Building Materials...................................................................... 10,101,103 4.0
Chemicals............................................................................... 2,009,523 0.8
Conglomerates........................................................................... 13,397,560 5.3
Construction & Housing.................................................................. 637,007 0.3
Financial Services...................................................................... 5,222,234 2.1
Food, Beverage, Tobacco & Household Products............................................ 20,392,470 8.0
Investment Companies.................................................................... 8,331,060 3.3
Machinery - Diversified................................................................. 363,127 0.1
Media Group............................................................................. 4,269,150 1.7
Metals & Mining......................................................................... 11,677,319 4.6
Multi-Industry.......................................................................... 10,445,843 4.1
Multi-Line Insurance.................................................................... 200,777 0.1
Oil & Gas............................................................................... 11,022,070 4.3
Paper & Forest Products................................................................. 9,553,851 3.8
Real Estate............................................................................. 992,777 0.4
Retail.................................................................................. 6,692,741 2.6
Steel................................................................................... 2,356,209 0.9
Steel & Iron............................................................................ 1,955,255 0.8
Supermarkets............................................................................ 2,775,600 1.1
Telecommunications...................................................................... 63,743,175 25.1
Textiles................................................................................ 731,638 0.3
Transportation.......................................................................... 813,625 0.3
Utilities - Electric.................................................................... 24,861,664 9.8
----------- ---
$249,954,117 98.6%
----------- ---
----------- ---
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ---------------------------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Common Stocks........................................................................... $177,730,044 70.1%
Preferred Stocks........................................................................ 72,224,073 28.5
----------- ---
$249,954,117 98.6%
----------- ---
----------- ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
JULY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $224,659,880).......... $249,954,117
Cash...................................... 4,188,324
Receivable for:
Investments sold........................ 4,286,767
Dividends............................... 568,607
Shares of beneficial interest sold...... 139,268
Interest................................ 10,326
Deferred organizational expenses.......... 55,537
Prepaid expenses.......................... 40,340
------------
TOTAL ASSETS...................... 259,243,286
------------
LIABILITIES:
Payable for:
Investments purchased................... 4,547,270
Plan of distribution fee................ 237,484
Management fee.......................... 178,113
Shares of beneficial interest
repurchased........................... 123,728
Investment advisory fee................. 118,742
Accrued expenses.......................... 406,498
------------
TOTAL LIABILITIES................. 5,611,835
------------
NET ASSETS:
Paid-in-capital........................... 353,399,334
Net unrealized appreciation............... 25,292,173
Accumulated undistributed net investment
income.................................. 22,253
Accumulated net realized loss............. (125,082,309)
------------
NET ASSETS........................ $253,631,451
------------
------------
NET ASSET VALUE PER SHARE, 25,963,448
shares outstanding (unlimited shares
authorized of $.01 par value)...........
$9.77
------------
------------
</TABLE>
Statement of Operations
FOR THE SIX MONTHS ENDED JULY 31, 1996 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $538,357 foreign
withholding tax)...................... $4,412,960
Interest................................ 82,588
----------
TOTAL INCOME........................ 4,495,548
----------
EXPENSES
Plan of distribution fee................ 1,279,738
Management fee.......................... 959,803
Investment advisory fee................. 639,869
Transfer agent fees and expenses........ 307,253
Custodian fees.......................... 204,696
Professional fees....................... 50,728
Shareholder reports and notices......... 35,935
Registration fees....................... 22,315
Trustees' fees and expenses............. 19,535
Organizational expenses................. 19,520
Other................................... 39,004
----------
TOTAL EXPENSES...................... 3,578,396
----------
NET INVESTMENT INCOME............... 917,152
----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
NET REALIZED LOSS ON:
Investments........................... (9,470,230)
Foreign exchange transactions......... (101,821)
----------
TOTAL LOSS.......................... (9,572,051)
----------
NET CHANGE IN UNREALIZED APPRECIATION
ON:
Investments........................... 16,269,351
Net translation of other assets and
liabilities denominated in foreign
currencies.......................... 698
----------
TOTAL APPRECIATION.................. 16,270,049
----------
NET GAIN............................ 6,697,998
----------
NET INCREASE........................ $7,615,150
----------
----------
</TABLE>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED ENDED
JULY 31, 1996 JANUARY 31,
(UNAUDITED) 1996
------------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)............................................ $ 917,152 $ (1,564,418)
Net realized loss....................................................... (9,572,051) (68,233,853)
Net change in unrealized appreciation................................... 16,270,049 68,526,655
------------------- ---------------
Net increase (decrease)............................................. 7,615,150 (1,271,616)
Net decrease from transactions in shares of beneficial interest........... (15,049,555) (32,436,582)
------------------- ---------------
Total decrease...................................................... (7,434,405) (33,708,198)
NET ASSETS:
Beginning of period....................................................... 261,065,856 294,774,054
------------------- ---------------
END OF PERIOD (Including undistributed net investment income of $22,253
and accumulated net investment loss of $894,899)......................... $ 253,631,451 $ 261,065,856
------------------- ---------------
------------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES--TCW/DW Latin American Growth Fund (the
"Fund") is registered under the Investment Company Act of 1940, as amended (the
"Act"), as a non-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 equity securities of Latin
American issuers. The Fund was organized as a Massachusetts business trust on
February 25, 1992 and commenced operations on December 30, 1992.
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 by the Adviser); (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 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 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. 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.
D. 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
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1996 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
losses are included in the Statement of Operations as unrealized foreign
currencies gain or loss. 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.
E. 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.
F. 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.
G. ORGANIZATIONAL EXPENSES--Dean Witter InterCapital Inc., an affiliate of
Dean Witter Services Company Inc. (the "Manager") paid the organizational
expenses in the amount of approximately $244,000 which have been reimbursed
in the amount of $200,000. 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
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.75% to the portion of daily net assets not exceeding
$500 million and 0.72% to the portion of the daily net assets exceeding $500
million.
Under the terms of the Management Agreement, the Manager maintains certain
of the Fund's book 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.
If, in any fiscal year, the Fund's total operating expenses, exclusive of
tax, interest, brokerage fees, distribution fees and extraordinary expenses,
exceed 2 1/2% of the first $30,000,000 of average daily net assets, 2% of the
next $70,000,000 and 1 1/2% of any excess over $100,000,000, the Manager and the
Adviser will reimburse the Fund, on a pro-rata basis, for the amount of such
excess. Such amount, if any, will be calculated daily and credited on a monthly
basis.
3. INVESTMENT ADVISORY AGREEMENT--Pursuant to an Investment Advisory Agreement
with TCW Funds Management, Inc. (the "Adviser"), the Fund pays the Adviser an
advisory fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.50% to the portion of daily net assets not exceeding $500
million and 0.48% to the portion of the daily net assets exceeding $500 million.
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1996 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
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, pursuant to which the Fund pays the Distributor compensation, accrued daily
and payable monthly, at an annual rate of 1.0% of the lesser of: (a) the average
daily aggregate gross sales of the Fund's shares since the Fund's inception (not
including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception of the Plan upon which a contingent deferred sales charge has
been imposed or upon which such charge has been waived; or (b) the Fund's
average daily net assets. Amounts paid under the Plan are paid to the
Distributor to compensate it for the services provided and the expenses borne by
it and others in the distribution of the Fund's shares, including the payment of
commissions for sales of the Fund's shares and incentive compensation to, and
expenses of, the account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Manager and Distributor, and other employees or selected
broker-dealers who engage in or support distribution of the Fund's 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 the Fund's shares to other than current shareholders and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may be compensated under the Plan for
its opportunity costs in advancing such amounts, which compensation would be in
the form of a carrying charge on any unreimbursed expenses incurred by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred
but not yet recovered, may be recovered through future distribution fees from
the Fund and contingent deferred sales charges from the Fund's shareholders.
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, included carrying charges, totaled $20,505,542 at
July 31, 1996.
The Distributor has informed the Fund that for the six months ended July 31,
1996, it received approximately $487,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES--The cost of
purchases and proceeds from sales of portfolio securities, excluding short-term
investments, for the six months ended July 31, 1996 aggregated $46,549,343, and
$59,755,941, respectively.
Dean Witter Trust Company, an affiliate of the Manager and Distributor, is
the Fund's transfer agent. At July 31, 1996, the Fund had transfer agent fees
and expenses payable of approximately $69,000.
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1996 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
6. SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JULY 31, 1996
---------------------------- FOR THE YEAR ENDED
JANUARY 31, 1996
(UNAUDITED) ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Sold............................................. 1,553,279 $ 14,901,336 7,422,903 $ 63,325,768
Repurchased...................................... (3,136,493) (29,950,891) (11,407,729) (95,762,350)
------------ -------------- ------------ --------------
Net decrease..................................... (1,583,214) $ (15,049,555) (3,984,826) $ (32,436,582)
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>
7. FEDERAL INCOME TAX STATUS--At January 31, 1996, the Fund had a net capital
loss carryover of approximately $96,914,000 of which $4,864,000 will be
available through January 31, 2003 and $92,050,000 will be available through
January 31, 2004 to offset future capital gains to the extent provided by
regulations.
Capital and 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 capital and foreign currency losses of approximately $10,456,000
and $60,000, respectively, during fiscal 1996.
As of January 31, 1996, the Fund had temporary book/tax differences
primarily attributable to post-October losses, capital loss deferrals on wash
sales and income from the mark-to-market of passive foreign investment
companies. The Fund had permanent book/tax differences primarily attributable to
foreign currency losses and a net operating loss.
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 counterparties to meet the terms of their contracts.
The Fund is also permitted to write covered call options on portfolio
securities and certain foreign currencies to hedge against a decline in the
value of a security or the underlying currency of such security.
At July 31, 1996, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan N.A., the Fund's custodian.
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
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 YEAR ENDED JANUARY 31, DECEMBER 30, 1992*
-------------------------------------------- THROUGH
1996 1995 1994 JANUARY 31, 1993
FOR THE SIX ------------------ ---------- ---------- ------------------
MONTHS ENDED
JULY 31, 1996
------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period... $9.48 $ 9.35 $16.05 $ 9.56 $10.00
-------- -------- ---------- ---------- -------
Net investment income (loss)........... 0.03 (0.06) (0.17) (0.04) (0.01)
Net realized and unrealized gain
(loss)............................... 0.26 0.19 (6.21) 6.68 (0.43)
-------- -------- ---------- ---------- -------
Total from investment operations....... 0.29 0.13 (6.38) 6.64 (0.44)
Less distributions from net realized
gain................................. -- -- (0.32) (0.15) --
-------- -------- ---------- ---------- -------
Net asset value, end of period......... $9.77 $ 9.48 $ 9.35 $16.05 $ 9.56
-------- -------- ---------- ---------- -------
-------- -------- ---------- ---------- -------
TOTAL INVESTMENT RETURN+............... 3.06%(1) 1.39% (40.12)% 69.49% (4.30)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses............................... 2.79%(2) 2.98% 2.87% 2.89% 3.08%(2)
Net investment income (loss)........... 0.71%(2) (0.61)% (1.46)% (0.90)% (1.08)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands............................ $253,631 $261,066 $294,774 $325,956 $69,611
Portfolio turnover rate................ 18%(1) 64% 145% 111% 1%(1)
Average commission rate paid........... $ 0.0002 -- -- -- --
<FN>
- --------------
* COMMENCEMENT OF OPERATIONS.
+ 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.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and
General Counsel
Michael P. Reilly
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
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 permanent information, please see the prospectus of
the Fund.
This report is not authorized for the distribution to prospective investors
in the Fund unless preceded or accompanied by an effective prospectus.
[LOGO]
LATIN AMERICAN
GROWTH FUND
[GRAPHIC]
SEMIANNUAL REPORT
JULY 31, 1996
