<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS JANUARY 31, 1999 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
Latin American equity markets fell sharply over the past 12 months as the
Russian debt crisis and a sharp decline in commodity prices affected the
region's economies and markets. Despite structural reforms and diversification
in trade arrangements, several Latin American economies still rely heavily on
commodity exports and taxation of commodity producers for government revenues.
The CRB Index, which measures commodity futures, reached a 21-year low in real
terms during 1998. By the end of the year, oil prices had fallen 30 percent and
copper prices were at a 50-year low. Oil and copper price stability are
particularly important for the economies of Mexico, Chile, Peru, Colombia and
Venezuela.
Latin American stock prices did rebound modestly during the fourth quarter of
1998. However, these rallies proved short-lived after the Brazilian central bank
widened the trading band of Brazil's currency, the real, and ultimately allowed
it to float freely in mid January. This currency devaluation resulted in lower
dollar prices for Brazilian stocks. Fueled by fears that poor economic growth in
Brazil would lead to reduced trade and available capital, other Latin American
markets also traded lower.
PERFORMANCE OVERVIEW
In this difficult market environment, TCW/DW Latin American Growth Fund's Class
B shares posted a total return of -40.12 percent for the fiscal year ended
January 31, 1999. In comparison, the Lipper Latin American Funds Average
returned -40.53 percent and the International Finance Corporation's Investable
Latin America Total Return Index returned -35.46 percent. For the same period,
the Fund's Class A, C and D shares had total returns of -39.62 percent, -40.17
percent and -39.56 percent, respectively. The performance of the Fund's four
share classes varies because of differing expenses.
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 1999, CONTINUED
The accompanying chart illustrates the performance of a $10,000 investment in
the Fund's Class B shares from inception (December 30, 1992) through January 31,
1999, versus the performance of similar hypothetical investments in the issues
comprising the IFC Investable Latin America Total Return Index and the Lipper
Latin American Funds Average.
COUNTRY OVERVIEWS
BRAZIL
The Brazilian equity market fell 53.4 percent, in dollar terms, during the 12
months ended January 31, 1999, primarily as a result of currency depreciation.
By the end of January 1999, the real was trading approximately 41 percent lower
than at the end of 1998. Throughout the year, the economy experienced limited
growth as the government kept real interest rates high in an attempt to stem
import demand and maintain a stable exchange rate regime. But capital flight
ensued as investors became increasingly concerned about the growing interest
burden on the fiscal accounts. The nominal fiscal deficit is expected to end
1998 at around 8 percent of GDP. Despite government efforts to defend the
currency, it became impossible any longer to maintain the exchange rate amid the
strong capital outflows. On the political front, Brazilians reelected Fernando
Cardoso as president and the ruling coalition maintained its majority in
Congress. The Cardoso administration is in the process of redefining its
macroeconomic policy.
MEXICO
Mexican stock prices declined 26.8 percent during the Fund's fiscal year as the
peso fell nearly 17 percent amid the turmoil in the emerging markets and
continued weakness in oil prices. However, the government's proactive response
throughout the year in its fiscal policy was encouraging, as the budget deficit
was limited to just 1.25 percent of GDP. In addition, the economy grew a
stronger than expected 4.8 percent in 1998, on the back of continued strong
consumer demand.
ARGENTINA
Argentine stock prices, which fell 25.2 percent during the past 12 months,
reflected the negative sentiment surrounding Brazil. Investors were particularly
concerned about the impact of Brazil's devaluation on the Argentine economy.
Although Brazil typically receives about 30 percent of Argentina's total
exports, the devaluation will result in lower Brazilian import demand, which
could lead to reduced Argentine industrial production. At the same time, imports
from Brazil are more attractive in Argentina, given the relative strength of the
Argentine Peso compared with the Brazilian Real.
2
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 1999, CONTINUED
CHILE, COLOMBIA, PERU AND VENEZUELA
With respect to the Fund's smaller Latin American holdings, Chilean equities
fell 17.0 percent during the period under review, due primarily to the
persistent weakness of copper prices. Colombian equities fell 49.9 percent
during the Fund's fiscal year as the currency came under pressure from global
market volatility and a worsening current-account deficit. The central bank
ultimately widened the peso's trading band in September. Peruvian stocks
declined 31.7 percent over the past 12 months as the economy failed to rebound
from the twin blows of El Nino and the plunge in global commodity prices.
Venezuelan equities fell 46.6 percent over the period. Investors there were
concerned about a potential devaluation of the bolivar, given the country's
large fiscal shortfall due to the collapse in oil prices, as well as political
risk. Newly elected President Chavez has yet to define his economy policy.
PORTFOLIO STRATEGY AND OUTLOOK
Given that 1998 was a year of relatively lower economic growth for the region as
a whole and a weak pricing environment for many of the area's products, the
portfolio manager positioned the Fund in sectors with strong, reliable cash
flows. Hence, telecommunications and utilities were areas of focus. The Fund
reduced investments in deeply cyclical industries such as steel, pulp and paper,
and petrochemicals. This last year was also characterized by high real interest
rates and reduced lending to the region. Therefore, companies that generate the
positive cash flow necessary to fund investments were more attractive than
companies in need of assets in order to grow. Also, the Fund favored companies
with net cash positions, because they were able to acquire weaker companies.
The Fund ended the fiscal year with an emphasis on Mexican investments, given
the prospects for that nation's economy to grow about 2 to 3 percent in 1999, as
well as to exhibit double-digit earnings growth. Although monetary policy has
been tight in Mexico, the government may be able to lower interest rates if the
external environment improves. During the second half of 1998 the Fund reduced
its holdings in Brazilian stocks. High real interest rates and Brazil's large
debt burden hurt the outlook for equities, despite the low-inflation
environment. The Fund was light in Argentine stocks because of concerns about
spillover effects from the Brazilian devaluation. In addition, the Fund also
held a small position in Chile and in the smaller markets of Peru and Colombia,
where valuations were not as compelling. The Fund had no holdings in Venezuela,
due to political risk. As of January 31, 1999, the Fund held a defensive cash
position of 15.1 percent.
Despite the tremendous adversity Latin America has faced in recent months,
several factors make TCW cautiously optimistic about the region's long-term
prospects. Real interest rates are high, due
3
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 1999, CONTINUED
to restrictive monetary policies, and economic growth will therefore slow as a
result of the higher cost of financing faced by most companies in the region.
However, budget cuts, economic reforms and the considerable deleveraging already
achieved should provide for more sustainable growth in the future to the extent
that monetary policy can be loosened. Moreover, valuations appear attractive,
given that stocks are trading above one standard deviation below their average
price-to-book and average price-to-earnings ratios over the past eight years.
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
TRUSTEES RECOMMEND FUND CONVERSION TO
MORGAN STANLEY DEAN WITTER FUND
On February 25, 1999, the Board of Trustees for the Fund, acting on a proposal
in connection with an overall consolidation of the TCW/DW Family of Funds and
the Morgan Stanley Dean Witter Family of Funds, recommended that
- - Morgan Stanley Dean Witter Advisors Inc. (MSDW Advisors), the parent company
of Morgan Stanley Dean Witter Services Company, the Fund's current manager,
serve as the Fund's new investment manager and that a new investment
management agreement between the Fund and MSDW Advisors be submitted to
shareholders for approval at a special meeting expected to be held in June
1999. Under the new investment management agreement, the advisory fee rates
that MSDW Advisors would charge would be as follows: 1.25 percent of average
daily net assets up to $500 million and 1.20 percent of average daily net
assets in excess of $500 million. These fee rates are identical to the total
aggregate fee rates currently in effect under the current management and
advisory agreements.
4
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 1999, CONTINUED
- - A new subadvisory agreement between MSDW Advisors Inc. and TCW Funds
Management, Inc. (TCW) be submitted to shareholders at the same special June
meeting. TCW, a wholly owned subsidiary of The TCW Group, Inc., currently
serves as the Fund's adviser. In return for the services that TCW would
render under the new subadvisory agreement, MSDW Advisors would pay TCW
monthly compensation equal to 40 percent of the compensation it would receive
under the new investment management agreement.
It was also voted that the Fund's name be changed from TCW/DW Latin American
Growth Fund to Morgan Stanley Dean Witter Latin American Growth Fund upon the
effectiveness of the aforementioned proposals.
The Trustees also nominated for election or reelection, as appropriate, the
following eight nominees to each fund's Board of Trustees: Michael Bozic,
Charles A. Fiumefreddo, Edwin Jacob (Jake) Garn, Wayne E. Hedien, Dr. Manuel H.
Johnson, Michael E. Nugent, Philip J. Purcell and John L. Schroeder. Messrs.
Fiumefreddo, Johnson, Nugent and Schroeder currently serve as Trustees of the
Funds and, with the exception of Mr. Schroeder, were previously elected by
shareholders. Messrs. Bozic, Garn, Hedien and Purcell currently hold
directorships or trusteeships with 84 other investment companies for which MSDW
Advisors serves as investment manager or investment adviser.
A proxy statement formally detailing this proposal and the reasons for the
Trustees' action has been distributed to shareholders of the Fund who were
shareholders on March 12, 1999.
5
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FUND PERFORMANCE JANUARY 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GROWTH OF $10,000 -- CLASS B SHARES
($ in Thousands)
FUND IFCI(4) LIPPER(5)
<S> <C> <C> <C>
December 1992 $10,000 $10,000 $10,000
January 1993 $9,570 $9,707 $9,836
January 1994 $16,220 $18,234 $17,318
January 1995 $9,712 $12,253 $12,040
January 1996 $9,847 $13,254 $12,978
January 1997 $11,914 $15,509 $15,883
January 1998 $12,558 $16,232 $16,466
January 1999 $7,520(3) $10,476 $9,792
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. PERFORMANCE FOR CLASS
A, CLASS C, AND CLASS D SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B
SHARES SHOWN ABOVE DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- ----------------------------------------------------------------------------------------------------
CLASS B SHARES* CLASS A SHARES+
- ----------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year (40.12)(1) (43.11)(2) 1 Year (39.62)(1) (42.79)(2)
5 Years (14.25)(1) (14.59)(2) Since Inception (38.33)(1) (40.50)(2)
Since Inception (4.57)(1) (4.57)(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES++ CLASS D SHARES#
- ----------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year (40.17)(1) (40.76)(2) 1 Year (39.56)(1)
Since Inception (38.84)(1) (38.84)(2) Since Inception (38.22)(1)
</TABLE>
- ------------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on January 31, 1999.
(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, Colombia, Mexico, Peru, and Venezuela, reflects restrictions on
foreign investment. The Index does not include any expenses, fees or
charges. The Index is unmanaged and should not be considered an investment.
(5) The Lipper Latin American Funds Average tracks the performance of the funds
whose primary trading markets or operations are concentrated in the Latin
American region or in a single country within the region, as reported by
Lipper Analytical Services Inc.
* The maximum CDSC for Class B shares is 5.0%. The CDSC declines to 0% after
six years.
+ The maximum front-end sales charge for Class A shares is 5.25%.
++ The maximum CDSC for Class C shares is 1% for shares redeemed within one
year of purchase.
# Class D shares have no sales charge.
6
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (84.6%)
ARGENTINA (12.9%)
ALCOHOLIC BEVERAGES
92,200 Quilmes Industrial S.A. (ADR)..................................... $ 737,600
------------
BANKING
80,598 Banco de Galicia y Buenos Aires S.A. de C.V. (ADR)................ 906,728
58,950 Banco Frances del Rio de La Plato S.A. (ADR)...................... 921,094
------------
1,827,822
------------
INTEGRATED OIL COMPANIES
145,474 Yacimentos Petroliferos Fiscales S.A. (ADR)....................... 4,636,984
------------
MULTI-SECTOR COMPANIES
709,774 Perez Companc S.A. (Class B)...................................... 2,893,457
------------
OIL/GAS TRANSMISSION
63,700 Transportadora de Gas del Sur S.A. (ADR).......................... 609,131
------------
STEEL/IRON ORE
152,280 Siderar S.A.I.C. (Class A)........................................ 220,892
------------
TELECOMMUNICATIONS
52,140 Telecom Argentina Stet - France Telecom S.A. (ADR)................ 1,238,325
63,135 Telefonica de Argentina S.A. (ADR)................................ 1,558,645
------------
2,796,970
------------
TOTAL ARGENTINA................................................... 13,722,856
------------
BRAZIL (21.9%)
BANKING
3,997,156 Banco Itau S.A. (Pref.)........................................... 1,197,216
------------
BUILDING MATERIALS
3,469,000 Companhia Cimento Portland Itau (Pref.)........................... 242,998
------------
CELLULAR TELEPHONE
49,422,000 Tele Celular Sul Participacoes S.A.*.............................. 38,917
268,758,140 Tele Celular Sul Participacoes S.A. (Pref.)*...................... 412,875
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
49,422,000 Telemig Celular Participacoes S.A.*............................... $ 34,619
268,758,140 Telemig Celular Participacoes S.A. (Pref.)*....................... 190,857
49,422,000 Telesudeste Celular Participacoes S.A.*........................... 78,550
40,777,469 Telesudeste Celular Participacoes S.A. (Pref.)*................... 118,195
------------
874,013
------------
ELECTRIC UTILITIES
106,623 Companhia Energetica de Minas Gerais S.A. (Pref.) (ADR)........... 1,319,460
272,800,000 Companhia Paranaense de Energia - Copel (Class B) (Pref.)......... 1,070,114
10,515,000 Eletropaulo Metropolitana (Pref.)................................. 181,295
------------
2,570,869
------------
INTEGRATED OIL COMPANIES
27,896,000 Petroleo Brasileiro S.A. (Pref.).................................. 1,846,257
------------
MULTI-SECTOR COMPANIES
2,652,300 Itausa Investimentos Itau S.A. (Pref.)............................ 896,913
------------
OTHER METALS/MINERALS
281,528 Companhia Vale do Rio Doce (Class A) (Pref.)...................... 4,217,480
266,358 Companhia Vale do Rio Doce S.A. 12/31/99 (Debentures)*............ --
------------
4,217,480
------------
OTHER TELECOMMUNICATIONS
49,422,000 Embratel Participacoes S.A.*...................................... 310,141
173,348,140 Embratel Participacoes S.A. (Pref.)*.............................. 1,942,839
49,422,000 Tele Centro Sul Participacoes S.A.*............................... 171,903
268,758,140 Tele Centro Sul Participacoes S.A. (Pref.)*....................... 1,791,721
20,752,000 Tele Norte Leste Participacoes S.A.*.............................. 112,281
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
153,477,469 Tele Norte Leste Participacoes S.A. (Pref.)*...................... $ 1,534,775
49,422,000 Telesp Participacoes S.A.*........................................ 465,569
268,758,140 Telesp Participacoes S.A. (Pref.)*................................ 4,674,054
------------
11,003,283
------------
PAPER
37,960,000 Votorantim Celulose e Papel S.A. (Pref.).......................... 421,778
------------
TOTAL BRAZIL...................................................... 23,270,807
------------
CHILE (5.2%)
ALCOHOLIC BEVERAGES
38,100 Vina Concha Y Toro (ADR).......................................... 928,688
------------
BANKING
76,040 Banco Santander Chile (ADR)....................................... 1,064,560
------------
BEVERAGES - NON-ALCOHOLIC
83,240 Embotelladora Andina S.A. (Series A) (ADR)........................ 1,165,360
------------
ELECTRIC UTILITIES
31,020 Gener S.A. (ADR).................................................. 418,770
------------
FOOD CHAINS
62,560 Distribucion Y Servicio D&S S.A. (ADR)............................ 672,520
------------
MAJOR PHARMACEUTICALS
71,450 Laboratorio Chile S.A. (ADR)...................................... 857,400
------------
TELECOMMUNICATIONS
20,968 Compania de Telecommunicaciones de Chile S.A. (ADR)............... 427,223
------------
TOTAL CHILE....................................................... 5,534,521
------------
COLOMBIA (1.9%)
ALCOHOLIC BEVERAGES
342,370 Bavaria S.A....................................................... 1,256,802
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BANKING
141,300 Banco de Bogota................................................... $ 397,965
68,335 Bancolombia S.A. (ADR)............................................ 328,862
------------
726,827
------------
TOTAL COLOMBIA.................................................... 1,983,629
------------
MEXICO (41.2%)
ALCOHOLIC BEVERAGES
130,860 Fomento Economico Mexicano S.A. de C.V. (ADR)..................... 2,895,277
2,045,600 Grupo Modelo S.A. de C.V. (Series C).............................. 4,552,732
------------
7,448,009
------------
BEVERAGES - NON-ALCOHOLIC
82,400 Coca-Cola Femsa S.A. (ADR)........................................ 1,035,150
------------
BUILDING MATERIALS
368,770 Apasco S.A. de C.V................................................ 1,332,114
------------
CONSUMER SUNDRIES
1,213,300 Kimberly-Clark de Mexico S.A. de C.V. (A Shares).................. 3,508,655
------------
MEDIA CONGLOMERATES
215,290 Grupo Televisa S.A. de C.V. (GDR)................................. 5,516,806
------------
MULTI-SECTOR COMPANIES
253,799 Grupo Carso S.A. de C.V. (Series A1).............................. 726,428
------------
PACKAGED FOODS
1,938,200 Grupo Industrial Bimbo S.A. de C.V. (Series A).................... 3,768,510
12,740 Grupo Industrial Maseca S.A. de C.V. (ADR)........................ 155,269
244,600 Grupo Industrial Maseca S.A. de C.V. (B Shares)................... 202,787
------------
4,126,566
------------
RETAIL
5,388,918 Cifra S.A. de C.V. (Series C)..................................... 5,988,869
791,200 Organizacion Soriana S.A. de C.V. (Series B)...................... 2,334,868
------------
8,323,737
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
228,778 Telefonos de Mexico S.A. de C.V. (Series L) (ADR)................. $ 11,696,275
------------
TOTAL MEXICO...................................................... 43,713,740
------------
PERU (1.5%)
BUILDING MATERIALS
554,799 Cementos Lima, S.A................................................ 575,347
------------
PRECIOUS METALS
160,369 Compania de Minas Buenaventura S.A. (B Shares).................... 974,093
------------
TOTAL PERU........................................................ 1,549,440
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $100,493,613) (A)........................................................ 84.6 % 89,774,993
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................ 15.4 16,335,027
------ -------------
NET ASSETS................................................................................ 100.0 % $ 106,110,020
------ -------------
------ -------------
</TABLE>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $10,330,116 and the
aggregate gross unrealized depreciation is $21,048,736, resulting in net
unrealized depreciation of $10,718,620.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JANUARY 31, 1999:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN DELIVERY APPRECIATION/
RECEIVE EXCHANGE FOR DATE DEPRECIATION
- ----------------------------------------------------
<S> <C> <C> <C>
MXN 965,275 $ 95,185 02/01/99 $ 85
MXN 1,080,847 $ 107,376 02/02/99 (700)
-----
Net unrealized depreciation... $(615)
-----
-----
</TABLE>
CURRENCY ABBREVIATION:
<TABLE>
<S> <C>
MXN Mexican Peso.
</TABLE>
SUMMARY OF INVESTMENTS
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alcoholic Beverages................................................................ $10,371,099 9.8 %
Banking............................................................................ 4,816,425 4.5
Beverages - Non-Alcoholic.......................................................... 2,200,510 2.1
Building Materials................................................................. 2,150,459 2.0
Cellular Telephone................................................................. 874,013 0.8
Consumer Sundries.................................................................. 3,508,655 3.3
Electric Utilities................................................................. 2,989,639 2.8
Food Chains........................................................................ 672,520 0.6
Integrated Oil Companies........................................................... 6,483,241 6.1
Major Pharmaceuticals.............................................................. 857,400 0.8
Media Conglomerates................................................................ 5,516,806 5.2
Multi-Sector Companies............................................................. 4,516,798 4.3
Oil/Gas Transmission............................................................... 609,131 0.6
Other Metals/Minerals.............................................................. 4,217,480 4.0
Other Telecommunications........................................................... 11,003,283 10.4
Packaged Foods..................................................................... 4,126,566 3.9
Paper.............................................................................. 421,778 0.4
Precious Metals.................................................................... 974,093 0.9
Retail............................................................................. 8,323,737 7.8
Steel/Iron Ore..................................................................... 220,892 0.2
Telecommunications................................................................. 14,920,468 14.1
----------- ---
$89,774,993 84.6 %
----------- ---
----------- ---
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks...................................................................... $67,716,166 63.8 %
Preferred Stocks................................................................... 22,058,827 20.8
----------- ---
$89,774,993 84.6 %
----------- ---
----------- ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $100,493,613).............................................................. $ 89,774,993
Cash.......................................................................................... 15,982,330
Receivable for:
Investments sold.......................................................................... 1,384,207
Dividends................................................................................. 207,441
Shares of beneficial interest sold........................................................ 32,325
Interest.................................................................................. 27,666
Prepaid expenses and other assets............................................................. 67,477
------------
TOTAL ASSETS............................................................................. 107,476,439
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 602,521
Shares of beneficial interest repurchased................................................. 372,157
Plan of distribution fee.................................................................. 96,924
Management fee............................................................................ 72,734
Investment advisory fee................................................................... 48,489
Accrued expenses and other payables........................................................... 173,594
------------
TOTAL LIABILITIES........................................................................ 1,366,419
------------
NET ASSETS............................................................................... $106,110,020
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $229,904,609
Net unrealized depreciation................................................................... (10,874,590)
Net investment loss........................................................................... (854,690)
Accumulated net realized loss................................................................. (112,065,309)
------------
NET ASSETS............................................................................... $106,110,020
------------
------------
CLASS A SHARES:
Net Assets.................................................................................... $58,091
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 7,929
NET ASSET VALUE PER SHARE................................................................ $7.33
------------
------------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET
ASSET VALUE)........................................................................... $7.74
------------
------------
CLASS B SHARES:
Net Assets.................................................................................... $105,678,293
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 14,598,716
NET ASSET VALUE PER SHARE................................................................ $7.24
------------
------------
CLASS C SHARES:
Net Assets.................................................................................... $368,797
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 50,934
NET ASSET VALUE PER SHARE................................................................ $7.24
------------
------------
CLASS D SHARES:
Net Assets.................................................................................... $4,839
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 658
NET ASSET VALUE PER SHARE................................................................ $7.35
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1999
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $515,400 foreign withholding tax)........................................... $ 6,516,477
Interest...................................................................................... 306,528
------------
TOTAL INCOME............................................................................. 6,823,005
------------
EXPENSES
Plan of distribution fee (Class A shares)..................................................... 213
Plan of distribution fee (Class B shares)..................................................... 1,960,820
Plan of distribution fee (Class C shares)..................................................... 6,369
Management fee................................................................................ 1,476,124
Investment advisory fee....................................................................... 984,082
Transfer agent fees and expenses.............................................................. 547,257
Custodian fees................................................................................ 391,563
Foreign exchange provisional tax.............................................................. 139,879
Shareholder reports and notices............................................................... 120,949
Professional fees............................................................................. 83,776
Registration fees............................................................................. 80,214
Trustees' fees and expenses................................................................... 31,118
Other......................................................................................... 36,594
------------
TOTAL EXPENSES........................................................................... 5,858,958
------------
NET INVESTMENT INCOME.................................................................... 964,047
------------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss on:
Investments............................................................................... (14,274,867)
Foreign exchange transactions............................................................. (3,117,469)
------------
NET LOSS................................................................................. (17,392,336)
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... (69,549,574)
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies....................................................... 1,237,888
------------
NET DEPRECIATION......................................................................... (68,311,686)
------------
NET LOSS................................................................................. (85,704,022)
------------
NET DECREASE.................................................................................. $(84,739,975)
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR
FOR THE YEAR ENDED
ENDED JANUARY 31,
JANUARY 31, 1999 1998*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)....................................... $ 964,047 $ (2,058,685 )
Net realized gain (loss)........................................... (17,392,336) 25,945,579
Net change in unrealized appreciation.............................. (68,311,686) (8,606,911 )
---------------- ----------------
NET INCREASE (DECREASE)....................................... (84,739,975) 15,279,983
Net decrease from transactions in shares of beneficial interest.... (82,770,172) (12,503,040 )
---------------- ----------------
NET INCREASE (DECREASE)....................................... (167,510,147) 2,776,943
NET ASSETS:
Beginning of period................................................ 273,620,167 270,843,224
---------------- ----------------
END OF PERIOD
(INCLUDING A NET INVESTMENT LOSS OF $854,690 AND $733,256,
RESPECTIVELY).................................................. $ 106,110,020 $ 273,620,167
---------------- ----------------
---------------- ----------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999
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. On July 28, 1997, the Fund commenced offering
three additional classes of shares, with the then current shares designated as
Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by TCW Funds Management, Inc. (the "Adviser") that sale or bid prices
are not reflective of a security's market value, portfolio securities are valued
at their fair value as determined in good faith under procedures established by
and under the general supervision of the Trustees (valuation of debt securities
for which market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing
13
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
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. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
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.
E. FORWARD CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized foreign currency gain or loss. 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.
14
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. MANAGEMENT AGREEMENT
Pursuant to a Management Agreement, the Fund pays Morgan Stanley Dean Witter
Services Company, Inc. (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.
3. INVESTMENT ADVISORY AGREEMENT
Pursuant to an Investment Advisory Agreement, the Fund pays the Adviser an
advisory fee, accrued daily and payable monthly, by applying the following
annual rates to the 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.
15
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, 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 Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- up to 0.25% of the
average daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Class B shares since the
inception of the Fund (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Class B
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or waived; or (b) the average daily net assets of
Class B; and (iii) Class C -- up to 1.0% of the average daily net assets of
Class C. In the case of Class A shares, amounts paid under the Plan are paid to
the Distributor for services provided. In the case of Class B and Class C
shares, amounts paid under the Plan are paid to the Distributor for (1) services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of these
Classes and incentive compensation to, and expenses of, Morgan Stanley Dean
Witter Financial Advisors, and others who engage in or support distribution of
the shares or who service shareholder accounts, including overhead and telephone
expenses; (2) printing and distribution of prospectuses and reports used in
connection with the offering of these shares to other than current shareholders;
and (3) preparation, printing and distribution of sales literature and
advertising materials. In addition, the Distributor may utilize fees paid
pursuant to the Plan, in the case of Class B shares, to compensate Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Manager and Distributor, and other
selected broker-dealers for their opportunity costs in advancing such amounts,
which compensation would be in the form of a carrying charge on any unreimbursed
expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future
16
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
distribution fees from the Fund pursuant to the Plan and contingent deferred
sales charges paid by investors upon redemption of Class B shares. Although
there is no legal obligation for the Fund to pay expenses incurred in excess of
payments made to the Distributor under the Plan and the proceeds of contingent
deferred sales charges paid by investors upon redemption of shares, if for any
reason the Plan is terminated, the Trustees will consider at that time the
manner in which to treat such expenses. The Distributor has advised the Fund
that such excess amounts, including carrying charges, totaled $19,612,473 at
January 31, 1999.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended January 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.23% and
1.0%, respectively.
The Distributor has informed the Fund that for the year ended January 31, 1999,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $2, $916,003 and
$2,365, respectively and received $1,799 in front-end sales charges from sales
of the Fund's Class A shares. The respective shareholders pay such charges which
are not an expense of the Fund.
5. SECURITY TRANSACTIONS AND TRANSACTION WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended January 31, 1999 aggregated
$50,543,050 and $144,265,887, respectively.
For the year ended January 31, 1999, the Fund incurred brokerage commissions of
$13,262 with Morgan Stanley & Co., Inc., an affiliate of the Manager and
Distributor, for portfolio transactions executed on behalf of the Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Manager and
Distributor, is the Fund's transfer agent. At January 31, 1999, the Fund had
transfer agent fees and expenses payable of approximately $370.
17
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 1999 JANUARY 31, 1998*
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 14,534 $ 136,263 10,002 $ 142,946
Redeemed......................................................... (15,663) (144,192) (944) (11,957)
----------- -------------- ----------- ------------
Net increase (decrease) - Class A................................ (1,129) (7,929) 9,058 130,989
----------- -------------- ----------- ------------
CLASS B SHARES
Sold............................................................. 2,410,988 25,661,963 5,890,546 80,346,802
Redeemed......................................................... (10,363,817) (108,304,032) (6,955,022) (93,949,547)
----------- -------------- ----------- ------------
Net decrease - Class B........................................... (7,952,829) (82,642,069) (1,064,476) (13,602,745)
----------- -------------- ----------- ------------
CLASS C SHARES
Sold............................................................. 27,783 283,451 72,243 1,050,903
Redeemed......................................................... (42,306) (403,625) (6,786) (92,205)
----------- -------------- ----------- ------------
Net increase (decrease) -- Class C............................... (14,523) (120,174) 65,457 958,698
----------- -------------- ----------- ------------
CLASS D SHARES
Sold............................................................. -- -- 658 10,018
----------- -------------- ----------- ------------
Net decrease in Fund............................................. (7,968,481) $ (82,770,172) (989,303) $(12,503,040)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
- ---------------------
* For Class A, C, and D shares, for the period July 28, 1997, (issue date)
through January 31, 1998.
7. FEDERAL INCOME TAX STATUS
At January 31, 1999, the Fund had a net capital loss carryover of approximately
$96,436,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through January 31 of the following
years:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- ----------------------------------------------------------------------
2004 2005 2007
- ---------------------- ---------------------- ----------------------
<S> <C> <C>
$73,539 $ 19,839 $ 3,058
</TABLE>
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 $11,321,000 and $855,000,
respectively, during fiscal 1999.
As of January 31, 1999, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and post-October losses.
The Fund had permanent book/tax differences primarily attributable to foreign
currency losses, a net operating loss and tax adjustments on passive
18
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
foreign investment companies sold by the Fund. To reflect reclassifications
arising from the permanent differences, paid-in-capital was charged $1,634,943,
accumulated net investment loss was charged $1,085,481 and accumulated net
realized loss was credited $2,720,424.
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.
At January 31, 1999, the Fund had outstanding forward contracts to facilitate
settlements of foreign currency denominated portfolio transactions.
At January 31, 1999, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.
9. SUBSEQUENT EVENT
On February 25, 1999, the Board of Trustees of the Fund recommended that the
Fund engage Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"), an
affiliate of the Manager, to serve as the Fund's new investment manager and that
a new investment management agreement between the Fund and MSDW Advisors be
submitted to shareholders for approval. Under the new agreement, MSDW Advisors
would be responsible for all the services presently provided by both the Manager
and the Adviser. The compensation paid to MSDW Advisors would be equal to the
total compensation presently paid to both the Manager and the Adviser.
Additionally, on February 25, 1999, the Board of Trustees recommended that a new
sub-advisory agreement between MSDW Advisors and the present Adviser be
submitted to shareholders for approval. Under the new sub-advisory agreement,
MSDW Advisors would pay the new sub-adviser monthly compensation equal to 40% of
the compensation it receives under the new investment management agreement.
19
<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 YEAR ENDED JANUARY 31,
-------------------------------------------------------
1999++ 1998*++ 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.09 $ 11.47 $ 9.48 $ 9.35 $ 16.05
---------- --------- --------- ---------- ---------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.05 (0.09) (0.04) (0.06) (0.17)
Net realized and unrealized gain (loss)............................ (4.90) 0.71 2.03 0.19 (6.21)
---------- --------- --------- ---------- ---------
Total income (loss) from investment operations........................ (4.85) 0.62 1.99 0.13 (6.38)
---------- --------- --------- ---------- ---------
Less distributions from net realized gain............................. -- -- -- -- (0.32)
---------- --------- --------- ---------- ---------
Net asset value, end of period........................................ $ 7.24 $ 12.09 $ 11.47 $ 9.48 $ 9.35
---------- --------- --------- ---------- ---------
---------- --------- --------- ---------- ---------
TOTAL RETURN+......................................................... (40.12)% 5.41% 20.99% 1.39% (40.12)%
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.98%(1) 2.81% 2.78% 2.98% 2.87%
Net investment income (loss).......................................... 0.49%(1) (0.64)% (0.29)% (0.61)% (1.46)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $105,678 $272,710 $270,843 $261,066 $294,774
Portfolio turnover rate............................................... 27% 30% 29% 64% 145%
</TABLE>
- ---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH JANUARY
JANUARY 31, 1999 31, 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.14 $ 15.22
------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.15 (0.07)
Net realized and unrealized loss................................... (4.96) (3.01)
------ ------
Total loss from investment operations................................. (4.81) (3.08)
------ ------
Net asset value, end of period........................................ $ 7.33 $ 12.14
------ ------
------ ------
TOTAL RETURN+......................................................... (39.62)% (20.24)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.21%(3) 2.15%(2)
Net investment income (loss).......................................... 1.26%(3) (1.04)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $58 $110
Portfolio turnover rate............................................... 27% 30%
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.10 $ 15.22
------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.06 (0.12)
Net realized and unrealized loss................................... (4.92) (3.00)
------ ------
Total loss from investment operations................................. (4.86) (3.12)
------ ------
Net asset value, end of period........................................ $ 7.24 $ 12.10
------ ------
------ ------
TOTAL RETURN+......................................................... (40.17)% (20.50)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.98%(3) 2.91%(2)
Net investment income (loss).......................................... 0.49%(3) (1.76)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $369 $792
Portfolio turnover rate............................................... 27% 30%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
JANUARY 31, 1999 JANUARY 31, 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.16 $ 15.22
------- -------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.16 (0.04)
Net realized and unrealized loss................................... (4.97) (3.02)
------- -------
Total loss from investment operations................................. (4.81) (3.06)
------- -------
Net asset value, end of period........................................ $ 7.35 $ 12.16
------- -------
------- -------
TOTAL RETURN+......................................................... (39.56)% (20.11)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.98%(3) 1.86%(2)
Net investment income (loss).......................................... 1.49%(3) (0.52)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $5 $8
Portfolio turnover rate............................................... 27% 30%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
22
<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, 1999, 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 periods
indicated, 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, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
MARCH 12, 1999
23
<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
Barry Fink
Vice President, Secretary and
General Counsel
Michael P. Reilly
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
Morgan Stanley Dean Witter Services Company Inc.
ADVISER
TCW Funds Management, Inc.
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, 1999
