<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
The Latin American equity markets rallied in January as TCW/DW Latin
American Growth Fund's fiscal year came to a close. During that month, the
Fund's 10.49 percent total return was in line with that of the International
Finance Corporation's Investable (IFCI) Latin America Total Return Index, which
rose approximately 10 percent. Despite the difficulties experienced over the
course of 1995, the Fund posted a positive total return of 1.39 percent for the
fiscal year ended January 31, 1996. Over the same period, the IFCI Latin America
Index posted a total return of approximately 9 percent.
The accompanying chart illustrates the performance of a $10,000 investment
in the Fund since inception (December 30, 1992) through the fiscal year ended
January 31, 1996, versus the performance of a similar hypothetical investment in
the issues comprising the IFCI Latin America Total Return Index.
As of January 31, 1996, the Fund had net assets in excess of $261 million,
with approximately 98 percent invested in Latin American equities. The largest
country allocations at the end of the fiscal year were Mexico (approximately 32
percent of net assets), Brazil (approximately 32 percent), Chile (approximately
13 percent) and Argentina (approximately 12 percent). Given the investment
adviser's positive outlook for the region's equity markets, the Fund ended the
year with a cash position of less than two percent.
The rally in Latin American stock markets in December and January came on
the heels of a difficult year. With Mexico's fiscal and monetary austerity
leading the way, slower rates of economic growth were posted in most countries
throughout Latin America in 1995, resulting in zero gross domestic product
growth for the region. However, TCW is encouraged that the resounding policy
response across the region has been to remain on the long, difficult path toward
modernization and economic liberalization, and to sustain efforts to restore
investor confidence by moving forward with additional free-market reforms and
privatizations.
In addition to privatization, Mexico, Argentina, Peru and Brazil have
maintained their commitments to balanced fiscal accounts and remained dedicated
to open economies. Foreign exchange reserves are now higher than they were prior
to the Mexican peso devaluation, and the region has turned its trade deficit
into a surplus on the strength of export growth. The expectation for foreign
direct investment in Latin America in 1996 is the highest in seven years.
Multinational corporations, given their abilities to borrow at low rates of
interest, are continuing to invest in faster-growing Latin American equities. As
a result, TCW projects GDP growth of around 35 percent for the region in 1996,
with corporate earnings growth rates expected in the high teens. Despite the
adversity of the last 13 months, TCW believes that the longer-term outlook for
Latin American equities is positive.
THE MAJOR MARKETS
MEXICO
The Mexican stock market advanced 24 percent in U.S. dollar terms for the
fiscal year ended January 31, 1996. Losses posted earlier in the year -- which
are attributable in large part to the peso devaluation and the ensuing economic
and financial crisis -- were reversed as the Mexican government demonstrated its
willingness to adhere to the International Monetary Fund's austerity program,
and avoided the wage/price inflation spiral many observers expected. Mexico also
showed its ability to return to the international financial markets
<PAGE>
by raising over $1.9 billion through the issuance of U.S. dollar-denominated
Cete (peso)-linked Eurobonds, and through the issuance of additional
yen-denominated sovereign bonds. This enabled the Mexican government to prepay
$700 million of its loan from the U.S. government. As a result of the peso
devaluation and the decline in domestic consumption, Mexican exports increased
over 30 percent in 1995 and the current account balance, which posted a deficit
over 7.5 percent of gross domestic product in 1994, was reversed and ended the
year in surplus. TCW's outlook for the Mexican equity market in 1996 is positive
as we anticipate continued export-led growth and a recovery in domestic demand
from currently very depressed levels as the year progresses.
BRAZIL
The Brazilian equity market gained 3.9 percent in U.S. dollar terms for the
fiscal year. Following stellar performance in 1994, the Brazilian equity markets
lagged the other major Latin equity markets as it too was hit hard by the
Mexican peso devaluation and posted substantial losses during the first quarter
of 1995. However, on the strength of robust gross domestic product growth, a
decline in real interest rates (35 to 20 percent), and a continued decline in
inflation to the lowest level in over 20 years, the Fund was able to regain many
of these losses over the course of the year. In addition, watershed political
events, including passage of legislation permitting the break up of state-owned
monopolies and legislation permitting foreigners to own majority control in
Brazilian companies, are expected to provide increased foreign investment and
stimulus to the equity market.
CHILE
The Chilean market declined by 0.3
percent in U.S. dollar terms for the
fiscal year. Because of Chile's high
savings rate (approximately 30 percent of
gross domestic product, the highest in the
region) and its near balance in the
current account, Chile was insulated from
most of the negative effects of the
Mexican crisis. Further positives include
economic growth of approximately eight
percent and export growth of nearly 40
percent (with non-copper exports growing
by more than 30 percent). On the basis of
this strong growth, the Chilean central
bank slowly raised interest rates over the
course of 1995. TCW believes that real
interest rates (adjusted for inflation)
have peaked at seven percent as economic
growth is forecast to moderate in 1996.
Corporate earnings growth is expected to
approach 20 percent in 1996, driven by the
local economy and investments in
neighboring countries.
ARGENTINA
In Argentina, the stock market rose 33
percent in U.S. dollar terms for the
fiscal year. In the months following the
devaluation in Mexico, as fears mounted
that a similar devaluation might occur in
Argentina, Argentine banks saw
approximately 18 percent of deposits leave
the system (similar withdrawals led to the
bank failures of the Great Depression in
the United States). Later in the year,
money returned to the banks because
Argentina was able to maintain its
currency policy (with the help of
multinational financial aid), reduce its
fiscal deficit and post a trade surplus as
a result of
<PAGE>
strong export growth. The overwhelming reelection of President Carlos Menem was
a clear vote of confidence in the country's economic and political policies. By
the end of January 1996, Argentina had recouped its lost foreign reserves and
bank deposits, resulting in optimism with regard to future economic growth.
INVESTMENT STRATEGY
During 1995, the Fund's investment adviser, TCW Fund Management, Inc. (TCW),
followed an investment strategy focused on Mexican exporters, with a
concentration on blue-chip companies and maintenance of a low cash position.
After the devaluation of the Mexican peso, it was clear that the exporters would
experience large increases in operating income and cash flow. In addition to
exporters, the Fund looked for companies with low debt burdens and top-quality
managements that could emerge from the Mexican economic crisis in a position of
strength.
Over the course of the fiscal year, the Fund's holdings in well known
companies with good liquidity were increased as it became evident that investors
were placing a premium on liquidity during a period dominated by continued
volatility. This strategy paid off as second-tier companies generally
underperformed the larger blue-chips. Finally, after the first quarter of 1995,
when it became apparent that the region had survived the liquidity crisis, the
Fund remained fully invested. Despite market volatility, TCW's outlook for the
region remains positive, as economic fundamentals slowly improve and markets
recover from their March lows.
LOOKING AHEAD
Going forward, we recognize the potential for short-term volatility as the
Latin American markets respond to an ever-changing global economic landscape.
With this in mind, TCW remains optimistic for several reasons. First, they
expect strong earnings growth in 1996 -- in the neighborhood of 20 percent for
the region as a whole. This forecast is predicated on a rebound in economic
activity, currently led by exports and investment, with consumers contributing
later in the year. Second, while domestic monetary policy is tight in many
countries, TCW anticipates a trend toward easing. Real interest rates range from
7 to 20 percent for countries in which the Fund invests. Also, valuations are
compelling, with price/earnings ratios at a fraction of earnings growth rates.
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 JANUARY 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- --------------- -------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, AND RIGHTS (98.2%)
ARGENTINA (11.9%)
AUTOMOTIVE
122,800 Ciadea S.A.*.................... $ 644,764
-------------
BANKS
93,976 Banco de Galicia y Buenos Aires
S.A. (ADR).................... 2,408,135
63,905 Banco Frances del Rio de la
Plata S.A. (ADR).............. 1,869,221
-------------
4,277,356
-------------
BUILDING & CONSTRUCTION
136,479 Juan Minetti S.A................ 584,189
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
47,040 Buenos Aires Embotelladera S.A.
(ADR)......................... 999,600
160,966 Molinos Rio de la Plata S.A.*... 1,456,888
93,034 Nobleza Piccardo S.A............ 370,312
-------------
2,826,800
-------------
MULTI-INDUSTRY
1,391,976 Companhia Naviera Perez Compac
S.A.C.F.I.M.F.A............... 8,784,247
286,800 Sociedad Commercial del Plata
S.A........................... 1,003,900
-------------
9,788,147
-------------
OIL & GAS
559,610 Astra Compania Argentina de
Petroleo S.A.................. 1,080,155
93,650 Transportadora de Gas del Sur
S.A. (ADR).................... 1,182,331
-------------
2,262,486
-------------
OIL RELATED
143,399 Yacimientos Petroliferos
Fiscales S.A. (ADR)........... 3,244,402
-------------
REAL ESTATE
242,078 Inversiones y Representacion
S.A. (Class B)................ 702,096
-------------
TELECOMMUNICATIONS
256,103 Telecom Argentina Stet - France
Telecom S.A................... 1,360,043
25,900 Telecom Argentina Stet - France
Telecom S.A. (ADR)............ 1,382,413
124,925 Telefonica de Argentina S.A.
(ADR)......................... 3,997,600
-------------
6,740,056
-------------
TOTAL ARGENTINA................. 31,070,296
-------------
<CAPTION>
SHARES VALUE
- --------------- -------------
<C> <S> <C>
BRAZIL (31.6%)
BANKING
532,756,084 Banco Bradesco S.A. (Pref.)..... $ 6,101,092
11,437,453 Banco Bradesco S.A. (Rights)*... 50,287
4,700,200 Banco Itau S.A. (Pref.)......... 1,634,016
-------------
7,785,395
-------------
BREWERY
16,681,964 Companhia Cervejaria Brahma
(Pref.)*...................... 8,127,767
-------------
BUILDING MATERIALS
120,000 Companhia Cimento Portland Itau
(Pref.)....................... 33,742
9,000,000 Duratex S.A. (Pref.)............ 409,509
-------------
443,251
-------------
FINANCIAL SERVICES
2,807,000 Itausa Investimentos Itau S.A.
(Pref.)....................... 1,894,294
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
1,760,000 Brasmotor S.A. (Pref.).......... 487,689
118,500 Companhia Souza Cruz Industria
de Comercio S.A............... 884,509
127,137,939 Refrigeracao Parana S.A......... 337,995
-------------
1,710,193
-------------
MACHINERY - DIVERSIFIED
3,190 Bardella S.A. Industrias
Mecanicas (Pref.)............. 260,941
3,126,200 Confab Industrial S.A.
(Pref.)....................... 1,246,644
-------------
1,507,585
-------------
METALS & MINING
28,282,300 Companhia Vale do Rio Doce S.A.
(Pref.)....................... 4,886,939
-------------
PAPER & FOREST PRODUCTS
207,598 Industria Klabin de Papel e
Celulose (Pref.).............. 220,759
-------------
RETAIL - DEPARTMENT STORES
35,191,300 Lojas Americanas S.A. (Pref.)... 813,214
-------------
TELECOMMUNICATIONS
49,422,000 Telecomunicacoes Brasileiras
S.A........................... 2,147,684
358,443,140 Telecomunicacoes Brasileiras
S.A.
(Pref.)......................... 19,974,592
68,305,300 Telecomunicacoes de Sao Paulo
S.A. (Pref.)*................. 12,564,543
-------------
34,686,819
-------------
TEXTILES
2,120,600 Companhia de Tecidos Norte de
Minas......................... 921,529
-------------
</TABLE>
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- --------------- -------------
<C> <S> <C>
UTILITIES - ELECTRIC
19,372,338 Centrais Electricas Brasileiras
S.A. (ADR).................... $ 5,902,819
30,526,403 Centrais Electricas Brasileiras
S.A. (Pref.).................. 9,207,862
93,456 Companhia Energetica de Minas
Gerais* (ADR) - 144A**........ 2,324,718
4,710,900 Light Participacoes S.A......... 435,999
4,710,900 Light-Servicos de Electricidade
S.A........................... 1,517,314
-------------
19,388,712
-------------
TOTAL BRAZIL.................... 82,386,457
-------------
CHILE (13.2%)
BUILDING & CONSTRUCTION
88,700 Madeco S.A. (ADR)............... 2,394,900
129,906 Maderas y Sinteticos Sociedad
Anonima Masisa (ADR).......... 2,581,882
-------------
4,976,782
-------------
CHEMICALS
26,900 Quimica y Minera Chile S.A.
(ADR)......................... 1,334,913
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
91,945 Compania Cervecerias Unidas S.A.
(ADR)......................... 1,838,900
94,140 Embotelladora Andina S.A.
(ADR)......................... 3,271,365
-------------
5,110,265
-------------
INVESTMENT COMPANIES
84,525 Genesis Chile Fund Ltd.......... 3,592,313
1,624,300 The Five Arrows Chile Investment
Trust Ltd..................... 4,742,956
-------------
8,335,269
-------------
RETAIL - DEPARTMENT STORES
102,800 Santa Isabel S.A. (ADR)......... 2,351,550
-------------
TELECOMMUNICATIONS
29,200 Compania de Telecomunicaciones
de Chile S.A. (ADR)........... 2,339,650
-------------
UTILITIES - ELECTRIC
41,100 Chilectra S.A. (ADR)............ 2,191,164
100,400 Chilgener S.A. (ADR)............ 2,359,400
94,100 Empresa Nacional de Electricidad
Chile S.A. (ADS).............. 1,905,525
133,304 Enersis S.A. (ADR).............. 3,665,860
-------------
10,121,949
-------------
TOTAL CHILE..................... 34,570,378
-------------
<CAPTION>
SHARES VALUE
- --------------- -------------
<C> <S> <C>
COLOMBIA (4.7%)
BANKING
291,763 Banco de Bogota................. $ 1,356,442
61,000 Banco Industrial Colombiano
(ADR)......................... 1,090,375
-------------
2,446,817
-------------
BUILDING & CONSTRUCTION
85,400 Cementos Diamante S.A. (ADR) -
144A**........................ 2,022,955
483,887 Compania de Cementos Argos
S.A........................... 2,815,600
-------------
4,838,555
-------------
FINANCIAL SERVICES
138,980 Compania Suramericana de Seguros
S.A........................... 2,492,429
-------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
171,052 Compania Nacional de Chocolates
S.A........................... 1,283,724
-------------
RETAIL
428,100 Almacenes Exito S.A............. 1,251,754
-------------
TOTAL COLOMBIA.................. 12,313,279
-------------
MEXICO (32.3%)
AUTOMOTIVE
56,440 Corporacion Industrial San Luis
S.A. de C. V. (Units)++....... 312,874
4,896,000 Industria Automotriz S.A. (B
Shares)*...................... 731,739
-------------
1,044,613
-------------
BANKING
935,500 Grupo Financiero Inbursa S.A. de
C.V. (B Shares)............... 3,171,294
-------------
BUILDING & CONSTRUCTION
142,600 Empresas ICA Sociedad
Controladora S.A. de C.V.
(ADR)......................... 1,925,100
-------------
BUILDING MATERIALS
86,000 Apasco S.A. de C.V.............. 448,696
1,700,700 Cemex S.A. de C.V. (B Shares)... 6,955,308
882,080 Grupo Cementos de Chihuahua S.A.
de C.V........................ 738,263
-------------
8,142,267
-------------
CONGLOMERATES
1,456,899 Grupo Carso S.A. de C.V.*....... 10,115,155
599,341 Grupo Industria Alfa S.A. de
C.V. (A Shares)............... 8,102,504
-------------
18,217,659
-------------
</TABLE>
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- --------------- -------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
14,400 Coca Cola FEMSA S.A. de C.V.
(ADR)......................... $ 361,800
74,100 Empresas la Moderna S.A. de C.V.
(ADR)......................... 1,333,800
778,400 Fomento Economico Mexicano S.A.
de C.V. (B Shares)............ 2,189,250
245,846 Gruma S.A. de C.V. (B Shares)... 800,002
385,300 Grupo Industrial Bimbo S.A. de
C.V. (Series A)............... 1,570,516
599,340 Grupo Industrial Maseca S.A. de
C.V. (B2 Shares).............. 433,219
839,800 Jugos de Valle S.A. de C.V. (B
Shares)....................... 1,198,084
71,070 Panamerican Beverages, Inc...... 2,807,265
-------------
10,693,936
-------------
MEDIA GROUP
175,000 Grupo Televisa S.A. (GDR)....... 4,921,875
-------------
METALS & MINING
277,984 Tubos de Acero de Mexico S.A. de
C.V. (ADR)*................... 2,258,620
-------------
MULTI-INDUSTRY
200,600 DESC S.A. de C.V. (Series B).... 812,212
-------------
PAPER & FOREST PRODUCTS
332,100 Kimberly-Clark de Mexico S.A. de
C.V. (A Shares)............... 5,572,602
-------------
RETAIL
5,099,118 Cifra S.A. de C.V. (C Shares)*.. 6,470,892
-------------
TELECOMMUNICATIONS
578,873 Telefonos de Mexico S.A. de C.V.
(Series L) (ADR).............. 19,609,323
-------------
<CAPTION>
SHARES VALUE
- --------------- -------------
<C> <S> <C>
TRANSPORTATION
176,500 Transportacion Maritima Mexicana
S.A. de C.V. (Series A)
(ADR)......................... $ 1,456,125
-------------
TOTAL MEXICO.................... 84,296,518
-------------
PERU (4.5%)
BREWERY
1,149,309 Cerveceria Backus & Johnston
S.A........................... 1,781,307
-------------
CHEMICALS
474,847 Explosivos S.A.................. 766,207
-------------
DISTRIBUTION
378,372 Enrique Ferreyros S.A........... 472,363
-------------
FINANCIAL SERVICES
139,095 Credicorp Ltd. (ADR)............ 2,573,258
-------------
METALS & MINING
134,825 Companhia de Minas Buenaventura
S.A. (C Shares)............... 1,061,425
-------------
TELECOMMUNICATIONS
2,270,420 CPT-Telefonica de Peru S.A. (B
Shares)....................... 5,051,805
-------------
TOTAL PERU...................... 11,706,365
-------------
VENEZUELA (0.0%)
UTILITIES - ELECTRIC
23,223 C.A. la Electricidad de Caracas
S.A.C.A....................... 18,301
-------------
TOTAL COMMON AND PREFERRED STOCKS,
AND RIGHTS (IDENTIFIED COST
$247,336,708)(A)................. 98.2% 256,361,594
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES...................... 1.8 4,704,262
----- -----------
NET ASSETS......................... 100.0% $261,065,856
----- -----------
----- -----------
<FN>
- ------------------
ADR AMERICAN DEPOSITORY RECEIPT.
ADS AMERICAN DEPOSITORY SHARES.
GDR GLOBAL DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
** RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
++ CONSISTS OF 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 $255,416,965; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $29,915,409 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $28,970,780, RESULTING IN NET UNREALIZED
APPRECIATION OF $944,629.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
SUMMARY OF INVESTMENTS JANUARY 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------ ----------- -------------
<S> <C> <C>
Automotive................................................................................ $ 1,689,377 0.7%
Banking................................................................................... 13,403,506 5.1
Banks..................................................................................... 4,277,356 1.6
Brewery................................................................................... 9,909,074 3.8
Building & Construction................................................................... 12,324,626 4.7
Building Materials........................................................................ 8,585,518 3.3
Chemicals................................................................................. 2,101,120 0.8
Conglomerates............................................................................. 18,217,659 7.0
Distribution.............................................................................. 472,363 0.2
Financial Services........................................................................ 6,959,981 2.7
Food, Beverage, Tobacco & Household Products.............................................. 21,624,918 8.2
Investment Companies...................................................................... 8,335,269 3.2
Machinery - Diversified................................................................... 1,507,585 0.6
Media Group............................................................................... 4,921,875 1.9
Metals & Mining........................................................................... 8,206,984 3.1
Multi-Industry............................................................................ 10,600,359 4.1
Oil & Gas................................................................................. 2,262,486 0.9
Oil Related............................................................................... 3,244,402 1.2
Paper & Forest Products................................................................... 5,793,361 2.2
Real Estate............................................................................... 702,096 0.3
Retail.................................................................................... 7,722,646 2.9
Retail - Department Stores................................................................ 3,164,764 1.2
Telecommunications........................................................................ 68,427,653 26.2
Textiles.................................................................................. 921,529 0.4
Transportation............................................................................ 1,456,125 0.6
Utilities - Electric...................................................................... 29,528,962 11.3
----------- ---
$256,361,594 98.2%
----------- ---
----------- ---
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------------------ ----------- -------------
<S> <C> <C>
Common Stocks............................................................................. $188,447,704 72.2%
Preferred Stocks.......................................................................... 67,863,603 26.0
Rights.................................................................................... 50,287 0.0
----------- ---
$256,361,594 98.2%
----------- ---
----------- ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
JANUARY 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $247,336,708)........... $256,361,594
Cash....................................... 4,935,497
Receivable for:
Shares of beneficial interest sold....... 634,158
Dividends................................ 199,528
Interest................................. 17,519
Deferred organizational expenses........... 75,057
Prepaid expenses and other assets.......... 58,888
-----------
TOTAL ASSETS....................... 262,282,241
-----------
LIABILITIES:
Payable for:
Plan of distribution fee................. 227,484
Shares of beneficial interest
repurchased............................ 177,807
Management fee........................... 170,613
Investment advisory fee.................. 113,742
Investments purchased.................... 102,952
Accrued expenses and other payables........ 423,787
-----------
TOTAL LIABILITIES.................. 1,216,385
-----------
NET ASSETS:
Paid-in-capital............................ 368,448,889
Net unrealized appreciation................ 9,022,124
Accumulated net investment loss............ (894,899)
Accumulated net realized loss.............. (115,510,258)
-----------
NET ASSETS......................... $261,065,856
-----------
-----------
NET ASSET VALUE PER SHARE, 27,546,662
shares outstanding (unlimited shares
authorized of $.01 par value)............
$9.48
-----------
-----------
</TABLE>
Statement of Operations
FOR THE YEAR ENDED JANUARY 31, 1996
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $639,669 foreign
withholding tax)..................... $ 5,525,949
Interest............................... 592,392
-----------
TOTAL INCOME....................... 6,118,341
-----------
EXPENSES
Plan of distribution fee............... 2,580,274
Management fee......................... 1,935,206
Investment advisory fee................ 1,290,137
Custodian fees......................... 796,720
Transfer agent fees and expenses....... 752,768
Professional fees...................... 95,175
Registration fees...................... 64,141
Shareholder reports and notices........ 52,549
Trustees' fees and expenses............ 46,932
Organizational expenses................ 39,146
Other.................................. 29,711
-----------
TOTAL EXPENSES..................... 7,682,759
-----------
NET INVESTMENT LOSS................ (1,564,418)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
NET REALIZED LOSS ON:
Investments.......................... (67,614,802)
Foreign exchange transactions........ (619,051)
-----------
TOTAL LOSS......................... (68,233,853)
-----------
NET CHANGE IN UNREALIZED APPRECIATION/
DEPRECIATION ON:
Investments.......................... 68,480,678
Net translation of other assets and
liabilities denominated in foreign
currencies......................... 45,977
-----------
TOTAL APPRECIATION................. 68,526,655
-----------
NET GAIN........................... 292,802
-----------
NET DECREASE....................... $(1,271,616)
-----------
-----------
</TABLE>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, JANUARY 31,
1996 1995
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss......................................................... $ (1,564,418) $ (5,488,643)
Net realized loss........................................................... (68,233,853) (50,838,277)
Net change in unrealized appreciation/depreciation.......................... 68,526,655 (131,066,806)
--------------- ---------------
Net decrease............................................................ (1,271,616) (187,393,726)
Distributions from net realized gain.......................................... -- (8,954,749)
Net increase (decrease) from transactions in shares of beneficial interest.... (32,436,582) 165,166,940
--------------- ---------------
Total decrease.......................................................... (33,708,198) (31,181,535)
NET ASSETS:
Beginning of period........................................................... 294,774,054 325,955,589
--------------- ---------------
END OF PERIOD (including accumulated net investment loss of $894,899 and $0,
respectively)................................................................ $ 261,065,856 $ 294,774,054
--------------- ---------------
--------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1996
- --------------------------------------------------------------------------------
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 JANUARY 31, 1996 (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 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 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 JANUARY 31, 1996 (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
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.
The Distributor has informed the Fund that for the year ended January 31,
1996, it received approximately $1,455,000 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 year ended January 31, 1996 aggregated $157,588,277 and
$163,386,951, respectively.
Dean Witter Trust Company, an affiliate of the Manager and Distributor, is
the Fund's transfer agent. At January 31, 1996, the Fund had transfer agent fees
and expenses payable of approximately $80,000.
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
6. SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
JANUARY 31, 1996 JANUARY 31, 1995
---------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Sold............................................. 7,422,903 $ 63,325,768 18,877,547 $ 258,325,274
Reinvestment of distributions.................... -- -- 739,138 8,455,745
------------ -------------- ------------ ---------------
7,422,903 63,325,768 19,616,685 266,781,019
Repurchased...................................... (11,407,729) (95,762,350) (8,388,944) (101,614,079)
------------ -------------- ------------ ---------------
Net increase (decrease).......................... (3,984,826) $ (32,436,582) 11,227,741 $ 165,166,940
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</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. To reflect reclassifications
arising from permanent book/tax differences for the year ended January 31, 1996,
accumulated net investment loss was credited $669,519, paid-in-capital was
charged $2,019,184 and accumulated net realized loss was credited $1,349,665.
8. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS--The Fund
may enter into forward 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 January 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
------------------ -------- -------- ------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................... $ 9.35 $ 16.05 $ 9.56 $ 10.00
-------- -------- -------- -------
Net investment loss...................................... (0.06) (0.17 ) (0.04 ) (0.01)
Net realized and unrealized gain (loss).................. 0.19 (6.21 ) 6.68 (0.43)
-------- -------- -------- -------
Total from investment operations......................... 0.13 (6.38 ) 6.64 (0.44)
Less distributions from net realized gain................ -- (0.32 ) (0.15 ) --
-------- -------- -------- -------
Net asset value, end of period........................... $ 9.48 $ 9.35 $ 16.05 $ 9.56
-------- -------- -------- -------
-------- -------- -------- -------
TOTAL INVESTMENT RETURN+................................. 1.39% (40.12 )% 69.49% (4.30)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................. 2.98% 2.87% 2.89% 3.08%(2)
Net investment loss...................................... (0.61)% (1.46 )% (0.90 )% (1.08)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................. $261,066 $294,774 $325,956 $69,611
Portfolio turnover rate.................................. 64% 145% 111% 1%(1)
<FN>
- --------------
* COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of TCW/DW Latin American Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of TCW/DW Latin American Growth Fund
(the "Fund") at January 31, 1996, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the three years in
the period then ended and for the period December 30, 1992 (commencement of
operations) through January 31, 1993, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at January 31, 1996 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
March 13, 1996
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Maunuel H. Johnson
Paul Kolton
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
Micheal 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.
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
LATIN AMERICAN GROWTH FUND
[Graphic]
ANNUAL REPORT
JANUARY 31, 1996
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
GROWTH OF $10,000
DATE TOTAL IFC
---- ----- ---
December 30, 1992 $10,000 $10,000
January 31, 1993 $ 9,570 $ 9,707
January 31, 1994 $16,220 $18,233
January 31, 1995 $ 9,712 $12,253
January 31, 1996 $ 9,657(3) $13,297
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR LIFE OF FUND
------ ------------
1.39 (1) -0.50 (1)
-3.61 (2) -1.12 (2)
Fund IFC (4)
------- -------
Past performance is not predictive of future returns.
__________________________________________________________
(1) Figure shown assumes reinvestment of all distributions and
does not reflect the deduction of any sales charges.
(2) Figure shown assumes the deduction of the maximum applicable
contingent deferred sales charge (CDSC) (1 Year-5%, since
inception 2%). See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value after the deduction of a 2% CDSC, assuming a
complete redemption on January 31, 1996.
(4) The International Finance Corporation's Investable Latin
America Total Return Index is a broad, neutral and
historically consistent benchmark for the Latin American
Markets. The Index, which includes Argentina, Brazil,
Chile, Columbia, Mexico and Venezuela, reflects restrictions
on foreign investment. No single market is dramatically
overweighted. The Index is unmanaged and should not be
considered an investment.
