<PAGE>
TCW GALILEO FUNDS, INC.
ANNUAL REPORT
OCTOBER 31, 1996
<PAGE>
TCW GALILEO FUNDS, INC.
TABLE OF CONTENTS
- -----------------
Letter to Shareholders ....................................................... 2
Performance Summary .......................................................... 3
Schedule of Investments:
TCW Galileo Money Market Fund .............................................. 4
TCW Galileo High Grade Fixed Income Fund ................................... 6
TCW Galileo High Yield Bond Fund ........................................... 9
TCW Galileo Mortgage Backed Securities Fund ............................... 15
TCW Galileo Long-Term Mortgage Backed Securities Fund ..................... 18
TCW Galileo Core Equity Fund .............................................. 20
TCW Galileo Earnings Momentum Fund ........................................ 23
TCW Galileo Mid-Cap Growth Fund ........................................... 29
TCW Galileo Small Cap Growth Fund ......................................... 32
TCW Galileo Asia Pacific Equity Fund ...................................... 37
TCW Galileo Emerging Markets Fund ......................................... 41
TCW Galileo Latin America Equity Fund ..................................... 49
Statements of Assets and Liabilities ........................................ 52
Statements of Operations .................................................... 56
Statements of Changes in Net Assets ......................................... 60
Notes to Financial Statements ............................................... 72
Financial Highlights ........................................................ 81
Independent Auditors' Report ................................................ 94
Shareholder Information ..................................................... 95
1
<PAGE>
TO OUR SHAREHOLDERS
- -------------------
We are pleased to submit the October 31, 1996 Annual Report for the TCW Galileo
Funds. The Galileo Mutual Funds continue to provide our clients with targeted
investment strategies featuring daily liquidity, competitive management fees and
no front-end loads, 12b-1 or deferred sales charges. On the next page is a
summary of each Fund's net asset value and returns through October 31, 1996.
TCW is committed to providing you with superior professional investment
management and distinctive personal service through the TCW Galileo Funds.
Please call your Account Representative or our Shareholder Relations Department
at (800) FUND TCW [(800) 386-3829] if you have any questions or would like
further information on the TCW Galileo Funds.
Very truly yours,
/s/ Marc I. Stern
Marc I. Stern
Chairman of the Board
December 4, 1996
2
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
PERFORMANCE SUMMARY
- -------------------
<TABLE>
<CAPTION>
Net Asset Value Total Return - Annualized
per Share As of October 31, 1996
------------------ ------------------------------------------------
October 31, Year Ended Latest Since Inception
1996 October 31, 1996 5 Years Inception Date
----------- ---------------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
TCW Galileo Money Market Fund $ 1.00 5.21% 4.35% 5.79% 07/14/88
TCW Galileo High Grade Fixed
Income Fund /(3)/ 9.45 4.26% 6.34%/(1)/ 7.38%/(1)/ 01/01/90/(2)/
TCW Galileo High Yield Bond Fund 9.77 9.92% 11.23%/(1)/ 11.05%/(1)/ 02/01/89/(2)/
TCW Galileo Mortgage Backed
Securities Fund 9.67 7.86% 5.99%/(1)/ 7.10%/(1)/ 02/01/90/(2)/
TCW Galileo Long-Term Mortgage
Backed Securities Fund 9.56 7.69% N/A 6.05% 06/17/93
TCW Galileo Core Equity Fund 15.93 16.79% 14.41%/(1)/ 15.32%/(1)/ 07/01/91/(2)/
TCW Galileo Earnings
Momentum Fund 13.01 13.99% N/A 14.24%/(1)/ 05/01/93/(2)/
TCW Galileo Mid-Cap
Growth Fund/(4)/ 9.19 25.46%/(1)/ N/A 38.56%/(1)/ 11/01/94/(2)/
TCW Galileo Small Cap
Growth Fund 17.17 29.73% 19.06%/(1)/ 20.39%/(1)/ 12/01/89/(2)/
TCW Galileo Asia Pacific
Equity Fund 9.61 11.36% N/A 16.75%/(1)/ 04/01/93/(2)/
TCW Galileo Emerging Markets
Fund 8.18 14.14% N/A 6.71%/(1)/ 06/01/93/(2)/
TCW Galileo Latin America
Equity Fund 10.01 27.08% 7.68%/(1)/ 10.73%/(1)/ 07/01/91/(2)/
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Galileo Funds' registration became
effective. The predecessor limited partnerships were not registered under
the Investment Company Act of 1940, as amended ("1940 Act"), and, therefore
were not subject to certain investment restrictions that are imposed by the
1940 Act. If the limited partnerships had been registered under the 1940
Act, the limited partnership's performance may have been lower
(2) Inception date of predecessor limited partnership.
(3) On November 1, 1996, the Fund changed its name to TCW Galileo Core Fixed
Income Fund.
(4) Inception date of the Fund was June 3, 1996.
3
<PAGE>
TCW Galileo Money Market Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount INVESTMENTS Value
- ------------ ----------- -------------
<S> <C> <C>
AGENCY FIXED INCOME SECURITIES (8.2% of Net Assets)
$ 2,000,000 Federal Farm Credit Bank, 5.4%, due 11/08/96 $ 1,999,926
2,000,000 Federal Farm Credit Bank, 5.8%, due 07/29/97 1,998,626
2,000,000 Federal Home Loan Bank, 5.64%, due 08/28/97 1,995,186
3,740,000 Federal Home Loan Bank, 5.84%, due 07/24/97 3,742,522
6,450,000 Federal Home Loan Mortgage Corp., 5.53%, due 11/01/96 6,450,000
3,000,000 Federal National Mortgage Association, 5.47%, due 11/14/96 2,999,932
-------------
TOTAL AGENCY FIXED INCOME SECURITIES (Cost: $19,186,192) 19,186,192
-------------
COMMERCIAL PAPER (73.9%)
5,000,000 Abbott Laboratories, 5.23%, due 12/27/96 4,959,322
7,000,000 American Express Credit Corp., 5.27%, due 11/05/96 6,995,901
1,900,000 Ameritech Corp., 5.22%, due 11/18/96 1,895,317
4,200,000 Ameritech Corp., 5.23%, due 11/08/96 4,195,729
5,000,000 Bear Stearns Companies, Inc., 5.25%, due 11/01/96 5,000,000
5,000,000 Bear Stearns Companies, Inc., 5.26%, due 11/12/96 4,991,964
5,000,000 Ciesco L.P., 5.23%, due 12/05/96 4,975,303
850,000 Ciesco L.P., 5.25%, due 11/01/96 850,000
4,000,000 Dean Witter, Discover, 5.28%, due 11/15/96 3,991,787
1,900,000 Du Pont (E.I.) De Nemours & Co., 5.22%, due 11/19/96 1,895,041
5,000,000 Du Pont (E.I.) De Nemours & Co., 5.23%, due 11/25/96 4,982,567
4,000,000 Ford Motor Credit Corp., 5.24%, due 11/01/96 4,000,000
2,000,000 General Electric Capital Corp., 5.26%, due 11/26/96 1,992,694
5,000,000 International Lease Finance Corp., 5.22%, due 11/07/96 4,995,650
5,000,000 McDonald's Corp., 5.27%, due 12/31/96 4,956,083
5,000,000 Merrill Lynch & Co., Inc., 5.26%, due 11/04/96 4,997,808
5,000,000 Merrill Lynch & Co., Inc., 5.5%, due 11/04/96 4,997,708
4,242,000 Metlife Funding Inc., 5.23%, due 11/12/96 4,235,221
2,830,000 Metlife Funding Inc., 5.27%, due 11/13/96 2,825,029
3,480,000 Nordstrom Credit Corp., 5.23%, due 11/14/96 3,473,428
4,000,000 Nordstrom Credit Corp., 5.24%, due 11/07/96 3,996,507
2,590,000 Northern Illinois Gas Company, 5.3%, due 01/15/97 2,561,402
5,500,000 Pitney-Bowes Credit Corp., 5.32%, due 04/08/97 5,371,581
5,000,000 Preferred Receivables Funding Corp., 5.25%, due 11/01/96 5,000,000
5,000,000 Preferred Receivables Funding Corp., 5.27%, due 11/13/96 4,991,217
5,000,000 Prudential Funding Corp., 5.19%, due 11/01/96 5,000,000
5,000,000 Prudential Funding Corp., 5.23%, due 11/01/96 5,000,000
6,370,000 Raytheon Co., 5.23%, due 11/19/96 6,353,342
2,000,000 SAFECO Credit Co., 5.29%, due 01/29/97 1,973,844
5,000,000 SAFECO Credit Co., 5.3%, due 11/19/96 4,986,750
3,000,000 SAFECO Credit Co., 5.3%, due 01/06/97 2,970,850
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount INVESTMENTS Value
--------- ----------- -------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
$ 8,000,000 Sara Lee Corp., 5.28%, due 12/24/96 $ 7,937,813
10,000,000 Smithkline Beecham Corp., 5.23%, due 11/06/96 9,992,736
3,600,000 Southern California Gas Co., 5.25%, due 11/25/96 3,587,400
5,000,000 Southern California Gas Co., 5.25%, due 12/03/96 4,976,667
5,000,000 Toyota Motor Credit Corp., 5.31%, due 02/07/97 4,927,725
3,000,000 Transamerica Finance Corp., 5.24%, due 11/01/96 3,000,000
3,900,000 Transamerica Finance Corp., 5.24%, due 11/14/96 3,892,620
4,850,000 Walt Disney Co., 5.23%, due 12/16/96 4,818,293
-------------
TOTAL COMMERCIAL PAPER (Cost: $172,545,299) 172,545,299
-------------
CORPORATE FIXED INCOME SECURITIES (17.9%)
3,000,000 American Express Credit Corp., 7.875%, due 12/01/96 3,005,773
5,500,000 Associates Corp. of North America, 5.875%, due 08/15/97 5,490,503
2,500,000 Associates Corp. of North America, 6.7%, due 06/03/97 2,512,611
1,000,000 Associates Corp. of North America, 6.875%, due 01/15/97 1,002,349
500,000 CIT Group Holdings, 7.125%, due 11/15/96 500,271
3,500,000 CIT Group Holdings, 7.625%, due 12/5/96 3,506,446
4,500,000 CIT Group Holdings, 8.75%, due 07/01/97 4,585,175
1,000,000 Ford Motor Credit Corp., 8%, due 12/01/96 1,002,127
2,000,000 General Electric Capital Corp., 7.78%, due 12/30/96 2,006,162
5,500,000 General Electric Capital Corp., 7.85%, due 02/01/97 5,534,182
2,100,000 Norwest Corp., 7.875%, due 01/30/97 2,111,258
5,130,000 Norwest Financial Inc., 6.25%, due 02/15/97 5,135,943
2,000,000 Shell Oil Co., 6%, due 01/15/97 2,001,302
3,500,000 Toyota Motor Credit Corp., 7.7%, due 01/23/97 3,519,164
-------------
TOTAL CORPORATE FIXED INCOME SECURITIES
(Cost: $41,913,266) 41,913,266
-------------
SHORT-TERM INVESTMENTS (Cost: $23,750) (0.0%)
--------------------------------------------
23,750 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 23,750
-------------
TOTAL INVESTMENTS (Cost: $233,668,507) (100.0%) 233,668,507
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.0%) 2,596
-------------
NET ASSETS (100%) $ 233,671,103
-------------
-------------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
TCW Galileo High Grade Fixed Income Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------ ----------------------- -------------
<S> <C> <C>
ASSET-BACKED SECURITIES (4.1% of Net Assets)
$ 143,920 AFC Home Equity Loan Trust, Series 1992-4, Class A, 6.2%,
due 09/15/07 $ 142,164
155,493 AFC Home Equity Loan Trust, Series 1993-2, Class A, 6%,
due 01/20/13 151,373
345,438 Old Stone Credit Corp., Home Equity Trust, 1992-4A, 6.55%,
due 11/25/07 342,446
392,596 UCFC Home Equity Loans, 1993-D, Class A-1, 5.45%,
due 07/10/13 383,904
-------------
TOTAL ASSET-BACKED SECURITIES (Cost: $1,050,569) 1,019,887
-------------
FINANCIAL (6.8%)
500,000 American General Finance Corp., 7.25%, due 05/15/05 511,250
500,000 BHP Finance USA Ltd., 6.69%, due 03/01/06 491,250
600,000 NationsBank Corp., 7.5%, due 09/15/06 620,250
60,000 Security Pacific Corp., 11.5%, due 11/15/00 70,425
-------------
TOTAL FINANCIAL (Cost: $1,675,789) 1,693,175
-------------
INDUSTRIAL (4.3%)
200,000 General Motors Corp., 9.125%, due 07/15/01 219,750
675,000 Northrop-Grumman Corp., 9.375%, due 10/15/24 757,687
100,000 Whirlpool Corp., 9.1%, due 03/15/04 112,625
-------------
TOTAL INDUSTRIAL (Cost: $979,238) 1,090,062
-------------
RETAIL (1.3%)
90,000 May Department Stores Company, 9.75%, due 02/15/21 110,138
200,000 J. C. Penney Company, Inc., 9.05%, due 03/01/01 218,750
-------------
TOTAL RETAIL (Cost: $297,505) 328,888
-------------
TELEPHONE (Cost: $596,054) (2.5%)
600,000 Northern Telecom Capital Corp., 7.4%, due 06/15/06 621,000
-------------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------ ----------------------- -------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS-
FIXED RATE PASS-THROUGH SECURITIES (33.9%)
$ 1,938,465 Federal Home Loan Mortgage Association, Pool #D66964, 7%,
due 01/01/26 $ 1,906,344
1,485,982 Federal Home Loan Mortgage Association, Pool #E20246, 7.5%,
due 06/01/11 1,511,987
1,374,301 Federal Home Loan Mortgage Association, Pool #C80409, 8%,
due 06/01/26 1,404,783
2,648,158 Government National Mortgage Association, Pool #422688, 7%,
due 05/15/26 2,597,657
653,311 Government National Mortgage Association, Pool #432001, 8%,
due 08/15/26 668,011
377,193 Government National Mortgage Association, Pool #432017, 8%,
due 08/15/26 385,680
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (Cost: $8,393,871) 8,474,462
-------------
U.S. TREASURY OBLIGATIONS (40.0%)
2,360,000 United States Treasury Bonds, 7.5%, due 11/15/24 2,589,368
145,000 United States Treasury Bonds, 10.75%, due 08/15/05 187,462
1,490,000 United States Treasury Notes, 5%, due 01/31/98 1,478,840
735,000 United States Treasury Notes, 5.125%, due 03/31/98 730,061
290,000 United States Treasury Notes, 5.5%, due 11/15/98 288,501
2,190,000 United States Treasury Notes, 5.875%, due 11/15/05 2,119,307
710,000 United States Treasury Notes, 6.375%, due 08/15/02 718,186
1,000,000 United States Treasury Notes, 7.5%, due 10/31/99 1,041,730
470,000 United States Treasury Notes, 8.125%, due 02/15/98 484,255
500,000 United States Treasury Strips, 0%, due 05/15/02 357,670
-------------
TOTAL U. S. TREASURY OBLIGATIONS (Cost: $9,824,297) 9,995,380
-------------
UTILITY - ELECTRIC & GAS (Cost: $458,976) (1.8%)
460,000 Pacificorp., 6.75%, due 04/01/05 456,550
-------------
TOTAL FIXED INCOME SECURITIES (Cost: $23,276,299) (94.7%) 23,679,404
-------------
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
TCW Galileo High Grade Fixed Income Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
--------- ----------------------- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS (Cost $1,173,060) (4.7%)
-----------------------------------------------
$ 1,173,060 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 $ 1,173,060
-------------
TOTAL INVESTMENTS (Cost: $24,449,359) (99.4%) 24,852,464
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.6%) 153,559
-------------
NET ASSETS (100%) $ 25,006,023
-------------
-------------
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo High Yield Bond Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
--------- --------------------------------- -------------
<S> <C> <C>
CONSUMER NON-CYCLICALS (16.9% of Net Assets)
Cable (0.9%)
$ 175,000 Century Communications Corp., 9.5%, due 08/15/00 $ 176,750
500,000 Comcast Corp., 9.125%, due 10/15/06 491,875
400,000 Comcast Corp., 9.375%, due 05/15/05 401,000
485,000 Rogers Cablesystems, Series B, 10%, due 03/15/05 497,125
-------------
Total Cable 1,566,750
-------------
Food and Drug Retailers (4.4%)
600,000 Di Giorgio Corp., 12%, due 02/15/03 603,000
125,000 Dominick's Finer Foods, 10.875%, due 05/01/05 138,125
2,270,000 Ralph's Grocery Company, 10.45%, due 06/15/04 2,301,213
3,225,000 Smith's Food & Drug Centers, Inc., 11.25%, due 05/15/07 3,507,187
1,500,000 The Grand Union Company, 12%, due 09/01/04 1,513,125
-------------
Total Food and Drug Retailers 8,062,650
-------------
Health and Hospital Management (4.0%)
3,825,000 Dade International, Inc., (144A), 11.125%, due 05/01/06 4,092,750 *
1,760,000 Integrated Health Services, Inc., 10.75%, due 7/15/04 1,856,800
370,000 Ornda Healthcorp., 11.375%, due 08/15/04 420,875
855,000 Ornda Healthcorp., 12.25%, due 05/15/02 919,125
-------------
Total Health and Hospital Management 7,289,550
-------------
Other Consumer Non-Cyclicals (7.6%)
1,500,000 American Banknote Corp., 10.375%, due 06/01/02 1,417,500
490,000 American Rice, Inc. 13%, due 07/31/02 453,250
155,000 American Safety Razor Company, Series B, 9.875%,
due 08/01/05 162,750
1,395,000 Cott Corp., 9.375%, due 07/01/05 1,401,975
525,000 E & S Holdings Corp., (144A), 10.375%, due 10/01/06 538,781 *
675,000 Foodbrands America, Inc., 10.75%, due 05/15/06 702,000
1,000,000 International Home Foods Inc., (144A), 10.375%,
due 11/01/06 1,007,500 *
1,115,000 PMI Acquisition Corp., 10.25%, due 09/01/03 1,142,875
1,000,000 Rayovac Corp., (144A), 10.25%, due 11/01/06 1,023,750 *
1,450,000 Remington Arms Company, Inc., (144A), 9.5%, due 12/01/03 1,283,250 *
1,500,000 Remington Product Company, L.L.C., (144A), 11%,
due 05/15/06 1,511,250 *
250,000 Revlon Consumer Products Corp., 9.5%, due 06/01/99 257,813
3,000,000 Revlon Consumer Products Corp., Series B, 10.5%,
due 02/15/03 3,127,500
-------------
Total Other Consumer Non-Cyclicals 14,030,194
-------------
TOTAL CONSUMER NON-CYCLICALS (Cost: $30,035,987) 30,949,144
-------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
9
<PAGE>
TCW Galileo High Yield Bond Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
--------- --------------------------------- -------------
<S> <C> <C>
CONSUMER CYCLICALS (24.4%)
Auto Parts (1.2%)
$ 2,000,000 Hayes Wheels International, Inc., 11%, due 07/15/06 $ 2,080,000
-------------
Entertainment & Leisure (1.1%)
500,000 Cinemark, USA Inc., (144A), 9.625%, due 08/01/08 487,500 *
1,470,000 United Artists Theatre Circuit, Inc., 11.5%, due 05/01/02 1,558,200
-------------
Total Entertainment & Leisure 2,045,700
-------------
Gaming (5.1%)
1,735,000 Bally's Grand, Inc., Series B, 10.375%, due 12/15/03 1,943,200
1,510,000 Bally's Park Place Funding, Inc., 9.25%, due 03/15/04 1,638,350
1,170,000 California Hotel Finance Corp., 11%, due 12/01/02 1,222,650
1,085,000 Fitzgerald's Gaming Corp., 13%, due 12/31/02 922,250
950,000 Griffin Gaming and Entertainment, Inc., Variable Rate,
due 06/30/00 907,250
2,855,000 Trump Atlantic City Funding, Inc., 11.25%, due 05/01/06 2,712,250
-------------
Total Gaming 9,345,950
-------------
Lodging (0.8%)
500,000 HMC Acquisition Properties, Inc., Series B, 9%,
due 12/15/07 488,750
488,000 John Q. Hammons Hotels, L.P., 8.875%, due 02/15/04 479,460
525,000 La Quinta Inns, Inc. 9.25%, due 05/15/03 540,750
-------------
Total Lodging 1,508,960
-------------
Media (9.4%)
1,675,000 Ackerley Communications, Inc., Series B, 10.75%,
due 10/01/03 1,775,500
3,700,000 Adams Outdoor Advertising, L.P., 10.75%, due 03/15/06 3,848,000
3,500,000 American Media Operation, 11.625%, due 11/15/04 3,692,500
2,500,000 Chancellor Broadcasting Company, 12.5%, due 10/01/04 2,775,000
510,000 Chancellor Radio Broadcasting Company, 9.375%,
due 10/01/04 499,800
2,335,000 Garden State Newspapers Company, 12%, due 07/01/04 2,486,775
975,000 Heritage Media Services Corp., 11%, due 06/15/02 1,040,813
1,100,000 Outdoor Systems, Inc., 9.375%, due 10/15/06 1,090,375
-------------
Total Media 17,208,763
-------------
Publishing (0.4%)
695,000 K-III Communications Corp., 10.625%, due 05/01/02 731,487
-------------
Restaurants (0.8%)
1,550,000 Foodmaker, 1993A Corp., Series B, 9.75%, due 11/01/03 1,519,000
-------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
10
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
--------- --------------------------------- -------------
<S> <C> <C>
Retailers (4.8%)
$ 1,000,000 Central Rents, Inc., Series B, 12.875%, due 12/15/03 $ 1,020,000
2,350,000 Cole National Corp., 11.25%, due 10/01/01 2,508,625
2,000,000 Finlay Fine Jewelry Corp.,10.625%, due 05/01/03 2,060,000
3,000,000 Guitar Center Management, Inc., (144A), 11%, due 07/01/06 3,135,000 *
175,000 Michael's Stores, Inc., 10.875%, due 06/15/06 154,000
-------------
Total Retailers 8,877,625
-------------
Transportation (0.8%)
810,000 International Shipholding Corp., 9%, due 07/01/03 799,875
680,000 Moran Transportation Company, Inc., 11.75%, due 07/15/04 720,800
-------------
Total Transportation 1,520,675
-------------
TOTAL CONSUMER CYCLICALS (Cost: $43,916,428) 44,838,160
-------------
BASIC MATERIALS (18.5%)
Chemicals (2.7%)
820,000 Borden Chemical and Plastics, L.P., 9.5%, due 05/01/05 824,100
875,000 ISP Holdings Inc., (144A), 9%, due 10/15/03 877,187 *
1,765,000 NL Industries, Inc., 11.75%, due 10/15/03 1,824,569
1,300,000 Viridian, Inc., 9.75%, due 04/01/03 1,384,500
-------------
Total Chemicals 4,910,356
-------------
Energy (9.9%)
1,200,000 Chesapeake Energy Corp., 10.5%, due 06/01/02 1,282,500
1,000,000 Chesapeake Energy Corp., 12%, due 03/01/01 1,100,000
970,000 Flores and Rucks, Inc., 13.5%, due 12/01/04 1,142,175
1,000,000 Forcenergy, Inc., 9.5%, due 11/01/06 1,012,500
1,000,000 Giant Industries, Inc., 9.75%, due 11/15/03 1,025,000
1,200,000 Maxus Energy Corp., 9.875%, due 10/15/02 1,227,000
4,150,000 Mesa Operating Company, 10.625%, due 07/01/06 4,388,625
2,000,000 Nuevo Energy Company, 9.5%, due 04/15/06 2,065,000
1,500,000 Petroleum Heat & Power Company, Inc., 12.25%,
due 02/01/05 1,650,000
1,300,000 Plains Resources Inc., (144A), 10.25%, due 03/15/06 1,348,750 *
2,000,000 Veritas DGC Inc., 9.75%, due 10/15/03 2,015,000
-------------
Total Energy 18,256,550
-------------
Forest Products and Paper (3.5%)
350,000 Container Corp. of America, Series B, 10.75%, due 05/01/02 369,250
500,000 Container Corp. of America, Series A, 11.25%, due 05/01/04 532,500
2,150,000 Malette, Inc., 12.25%, due 07/15/04 2,332,750
865,000 Rainy River Forest Products, Inc., 10.75%, due 10/15/01 935,281
890,000 Stone Consolidated Corp., 10.25%, due 12/15/00 943,400
1,300,000 Stone Container Corp., 10.75%, due 10/01/02 1,348,750
-------------
Total Forest Products and Paper 6,461,931
-------------
</TABLE>
See accompanying Notes to Financial Statements.
11
<PAGE>
TCW Galileo High Yield Bond Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
--------- --------------------------------- -------------
<S> <C> <C>
Metals and Mining (2.4%)
$ 1,289,000 Carbide Graphite Group, Inc., 11.5%, due 09/01/03 $ 1,395,343
700,000 Great Lakes Carbon Corp., 10%, due 01/01/06 736,750
990,000 Northwestern Steel and Wire Company, 9.5%, due 06/15/01 955,350
720,000 Oregon Steel Mills, Inc., 11%, due 06/15/03 765,000
580,000 Weirton Steel Corp., 11.5%, due 03/01/98 591,600
-------------
Total Metals and Mining 4,444,043
-------------
TOTAL BASIC MATERIALS (Cost: $33,131,160) 34,072,880
-------------
INDUSTRIALS (20.8%)
Building Materials and Construction (1.3%)
1,000,000 Standard Pacific Corp., 10.5%, due 03/01/00 1,030,000
790,000 Trizec Finance Corp., 10.875%, due 10/15/05 869,000
425,000 U.S. Home Corp., 9.75%, due 06/15/03 429,250
-------------
Total Building Materials and Construction 2,328,250
-------------
Business Services and Distribution (5.7%)
1,502,000 American Pad & Paper Company, 13%, due 11/15/05 1,742,320
1,400,000 Big Flower Press, Inc., 10.75%, due 08/01/03 1,442,000
1,503,000 Data Documents, Inc., 13.5%, due 7/15/02 1,687,117
2,630,000 Envirosource, Inc., 9.75%, due 06/15/03 2,498,500
625,000 Iron Mountain, Inc., 10.125%, due 10/01/06 640,625
660,000 Earle M. Jorgensen Company, 10.75%, due 03/01/00 660,000
1,265,000 Mid-American Waste Systems, Inc., 12.25%, due 02/15/03 759,000 **
1,000,000 Pierce Leahy Corp., (144A), 11.125%, due 07/15/06 1,065,000 *
-------------
Total Business Services and Distribution 10,494,562
-------------
Communication Services (4.4%)
660,000 Bell & Howell Operating Company, Inc., Series B, 10.75%,
due 10/01/02 702,900
1,000,000 Paging Network, Inc., 10.125%, due 08/01/07 997,500
415,000 Paging Network, Inc., 11.75%, due 05/15/02 448,200
500,000 PanAmSat, L.P., 9.75%, due 08/01/00 527,500
830,000 Rogers Cantel Inc., 9.375%, due 06/01/08 832,075
1,250,000 Sprint Spectrum L.P., 11%, due 08/15/06 1,268,750
2,210,000 Teleport Communications Group, Inc., 9.875%, due 07/01/06 2,254,200
940,000 Telex Communications, Inc., 12%, due 07/15/04 1,010,500
-------------
Total Communication Services 8,041,625
-------------
Containers and Packaging (2.8%)
2,000,000 Owens-Illinois, Inc., 11%, due 12/01/03 2,195,000
1,080,000 Plastic Containers, Inc., 10.75%, due 04/01/01 1,136,160
1,110,000 Sweetheart Cup Corp., 9.625%, due 09/01/00 1,148,850
725,000 U.S. Can Corp., (144A), 10.125%, due 10/15/06 748,563 *
-------------
Total Containers and Packaging 5,228,573
-------------
</TABLE>
* Restricted security. (See note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
12
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
--------- --------------------------------- -------------
<S> <C> <C>
Miscellaneous Manufacturing (6.6%)
$ 800,000 BE Aerospace, 9.75%, due 03/1/03 $ 828,000
2,570,000 Communications and Power Industries, Inc., Series B, 12%,
due 08/01/05 2,788,450
500,000 Foamex L.P., 9.5%, due 06/01/00 508,750
3,500,000 Foamex L.P., 11.25%, due 10/01/02 3,701,250
600,000 Mettler-Toledo, Inc., 9.75%, due 10/01/06 614,250
695,000 NEWFLO Corp., Series B, 13.25%, due 11/15/02 766,237
1,000,000 Rohr Industries, Inc., 11.625%, due 05/15/03 1,105,000
1,755,000 Talley Manufacturing and Technology, Inc., 10.75%,
due 10/15/03 1,803,263
-------------
Total Miscellaneous Manufacturing 12,115,200
-------------
TOTAL INDUSTRIALS (Cost: $37,640,501) 38,208,210
-------------
CREDIT SENSITIVE (8.2%)
Financial Services and Institutions (6.4%)
1,310,000 American Annuity Group, Inc., 11.125%, due 02/01/03 1,412,508
1,000,000 CalEnergy Company, Inc., (144A), 9.5%, due 09/15/06 1,020,000 *
1,250,000 CDV Acquisition Corp., 9.75%, due 02/15/03 1,328,125
1,750,000 First Nationwide Escrow Corp., (144A), 10.625%,
due 10/01/03 1,837,500 *
2,000,000 First Nationwide Holdings, Inc., 12.25%, due 05/15/01 2,200,000
1,750,000 Homeside Inc., (144A), 11.25%, due 05/15/03 1,903,125 *
1,350,000 Outsourcing Solutions Inc., (144A), 11%, due 11/01/06 1,373,625 *
630,000 Reliance Group Holdings, Inc., 9%, due 11/15/00 645,750
-------------
Total Financial Services and Institutions 11,720,633
-------------
Utilities (1.8%)
518,757 Midland Cogeneration Ventures, L.P., Series C-91, 10.33%,
due 07/23/02 547,289
2,500,000 Panda Funding Corp., (144A), 11.625%, due 08/20/12 2,568,750 *
290,000 Texas-New Mexico Power, 10.75%, due 09/15/03 311,921
-------------
Total Utilities 3,427,960
-------------
TOTAL CREDIT SENSITIVE (Cost: $14,730,638) 15,148,593
-------------
MULTI-INDUSTRY (Cost: $1,420,100) (0.8%)
1,480,000 Valcor, Inc., 9.625%, due 11/01/03 1,413,400
-------------
TOTAL CORPORATE FIXED INCOME SECURITIES
(Cost: $160,874,814) (89.6%) 164,630,387
-------------
</TABLE>
* Restricted security. (See note 6)
See accompanying Notes to Financial Statements.
13
<PAGE>
TCW Galileo High Yield Bond Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares, Rights
or Warrants EQUITY SECURITIES Value
-------------- ----------------- -------------
<S> <C> <C>
10,119 Fitzgerald Gaming Corp., Warrants, Expire 12/19/98 $ 30,357 **
100 PST Holdings, Inc., Common Stock 100 **
429 Terex Corp., Stock Appreciation Rights, expire 07/01/97 21 **
2,920 Terex Corp., Stock Appreciation Rights, expire 05/15/02 5,840 **
17,349 Transamerican Refining, Warrants, expire 02/15/02 34,698 **
-------------
TOTAL EQUITY SECURITIES (Cost: $90,281) (0.0%) 71,016
-------------
Principal
Amount SHORT-TERM INVESTMENTS (Cost: $10,135,488) (5.5%)
---------- -------------------------------------------------
$ 10,135,488 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 10,135,488
-------------
TOTAL INVESTMENTS (Cost $171,100,583) (95.1%) 174,836,891
EXCESS OF OTHER ASSETS OVER LIABILITIES (4.9%) 8,978,557
-------------
NET ASSETS (100%) $ 183,815,448
-------------
-------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
14
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mortgage Backed Securities Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
--------- ------------------------ -----
<S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (8.6% of Net Assets)
$ 1,969 CMO Mortgage Investors Trust (5-J), 1225.2%,
due 12/22/20, (I/O) $ 41,467
2,945 CMO Mortgage Investors Trust (6-J), 1752.4%,
due 02/22/21, (I/O) 95,260
825,988 Federal Home Loan Mortgage Corp. (1087-G), 8.5%,
due 08/15/20, (PAC) 846,605
750,000 Federal National Mortgage Association (92-152-K), 7%,
due 04/25/99 755,790
3,443,565 Ryland Acceptance Corporation Four (63-D), 8.75%,
due 04/01/19 3,532,132
1,538,690 Sears Mortgage Securities (88-A-A2), 0.658%,
due 05/25/18, (I/O) 15,695
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (Cost: $6,050,617) 5,286,949
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS -
VARIABLE RATE (23.7%)
37,455 Columbia Savings and Loan (88-1-A), 6.999%, due 08/25/18 36,156
1,011 Federal National Mortgage Association (91-130-SQ),
6858.1%, due 09/25/21, (I/O) (I/F) 174,368
124,762 Guardian Savings and Loan Association (88-1-A), 6.7007%,
due 07/25/18 106,047
317,078 Guardian Savings and Loan Association (88-3-A), 6.8306%,
due 11/25/18 269,515
320,782 Guardian Savings and Loan Association (89-3-A), 7.6573%,
due 05/25/19 272,665
1,546,232 Guardian Savings and Loan Association (89-4-A), 7.7669%,
due 07/25/19 1,468,921
1,492,589 Guardian Savings and Loan Association (89-5-A), 8.0289%,
due 07/25/19 1,417,960
77,019 Merrill Lynch Trust (26-B), 6.325%, due 07/01/16 77,366
375,546 Residential Funding Mortgage Securities I (89-4B-B),
6.9856%, due 07/25/19 362,402
5,727 Resolution Trust Corp. (91-6-C2), 3,315.8%,
due 09/25/28, (I/O) 227,146
3,078 Resolution Trust Corp. (91-6-D2), 3,120.8%,
due 08/25/20, (I/O) 108,942
3,805,834 Resolution Trust Corp. (92-1-A2), 7.8268%, due 08/25/20 3,822,960
6,110,178 Resolution Trust Corp. (92-M4-A3), 7.57%, due 09/25/21 6,100,630
207,942 Western Federal Savings and Loan Association (88-9-A),
6.6397%, due 12/25/18 208,150
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
VARIABLE RATE (Cost: $15,905,448) 14,653,228
-------------
</TABLE>
I/F - Inverse floating rate security whose interest rate moves in the opposite
direction of prevailing interest rates.
I/O - Interest Only security.
PAC - Planned Amortization Class.
See accompanying Notes to Financial Statements.
15
<PAGE>
TCW Galileo Mortgage Backed Securities Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
--------- ------------------------ -----
<S> <C> <C>
NON-AGENCY VARIABLE RATE PASS-THROUGH
SECURITIES (Cost: $1,298,116) (2.0%)
$ 1,309,639 Greenwich Capital Acceptance, Inc. (91-03), (Private Placement),
8.3064%, due 08/25/19 $ 1,267,076 *
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - FIXED RATE
PASS-THROUGH SECURITIES (1.3%)
142,178 Federal Home Loan Mortgage Corp., Pool #212346, 9.5%,
due 08/01/01 147,865
634,352 Federal National Mortgage Association, Pool #163492, 8.5%,
due 05/01/16 655,760
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (Cost: $805,813) 803,625
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - VARIABLE RATE
PASS-THROUGH SECURITIES (54.7%)
4,841,728 Federal Home Loan Mortgage Corp., Pool #410329, 5.405%,
due 05/01/26 4,893,098
2,617,242 Federal Home Loan Mortgage Corp., Pool #785630, 6.753%,
due 07/01/26 2,670,817
93,269 Federal Home Loan Mortgage Corp., Pool #770584, 7.25%,
due 05/01/19 94,170
1,797,637 Federal Home Loan Mortgage Corp., Pool #410013, 7.541%,
due 12/01/24 1,853,939
173,787 Federal Home Loan Mortgage Corp., Pool #865006, 7.851%,
due 08/01/18 179,355
164,933 Federal Home Loan Mortgage Corp., Pool #865009, 8.009%,
due 11/01/18 170,020
246,630 Federal Home Loan Mortgage Corp., Pool #865270, 8.273%,
due 12/01/18 254,273
325,707 Federal Home Loan Mortgage Corp., Pool #865275, 8.532%,
due 02/01/19 337,703
729,209 Federal Home Loan Mortgage Corp., Pool #310005, 9.417%,
due 11/01/19 751,085
1,985,363 Federal National Mortgage Association, Pool #358869, 5.75%,
due 09/01/26 2,011,034
2,623,407 Federal National Mortgage Association, Pool #124681, 7.482%,
due 01/01/23 2,687,523
2,154,731 Federal National Mortgage Association, Pool #328747, 7.511%,
due 10/01/24 2,237,042
2,935,566 Federal National Mortgage Association, Pool #303172, 7.627%,
due 12/01/24 3,029,798
1,326,358 Federal National Mortgage Association, Pool #303334, 7.673%,
due 04/01/25 1,369,372
126,744 Federal National Mortgage Association, Pool #96193, 7.684%,
due 09/01/18 130,535
3,949,915 Federal National Mortgage Association, Pool #318764, 7.853%,
due 08/01/25 4,103,843
</TABLE>
* Restricted security. (See note 6)
See accompanying Notes to Financial Statements.
16
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
--------- ------------------------ -----
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- VARIABLE RATE
PASS-THROUGH SECURITIES (Continued)
$ 2,664,104 Federal National Mortgage Association, Pool #303063, 7.87%,
due 09/01/24 $ 2,775,730
482,172 Federal National Mortgage Association, Pool #111365, 8.073%,
due 09/01/19 498,807
3,690,709 Government National Mortgage Association II, Pool #8595, 6.5%,
due 02/20/25 3,750,720
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS --
VARIABLE RATE PASS-THROUGH SECURITIES (Cost: $33,333,119) 33,798,864
--------------
TOTAL FIXED INCOME SECURITIES (Cost: $57,393,113) (90.3%) 55,809,742
--------------
SHORT-TERM INVESTMENTS (Cost: $5,846,871) (9.4%)
------------------------------------------------
5,846,871 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 5,846,871
--------------
TOTAL INVESTMENTS (Cost: $63,239,984) (99.7%) 61,656,613
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.3%) 177,854
--------------
NET ASSETS (100%) $ 61,834,467
--------------
--------------
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
TCW Galileo Long-Term Mortgage Backed Securities Fund
SCHEDULE OF INVESTMENTS
- ------------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
--------- ------------------------ -----
<S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS --
FIXED RATE (40.2% of Net Assets)
$ 2,000,000 CMC Securities Corporation III (94-A-A12), 6.75%,
due 02/25/24, (PAC) $ 1,936,660
2,515,019 Citicorp Mortgage Securities, Inc. (95-2-A1), 7.5%, due 04/25/25 2,527,292
139,451 Federal Home Loan Mortgage Corp. (1484-K), 6%, due 01/15/98 139,436
1,000,000 Federal Home Loan Mortgage Corp. (1780-B-D), 6%, due 09/15/08 942,960
782,000 Federal Home Loan Mortgage Corp. (1662-N), 6.25%, due 01/15/09 735,760
1,000,000 Federal Home Loan Mortgage Corp. (1805-A-A), 6.5%, due 12/15/08 956,980
841,341 Federal Home Loan Mortgage Corp. (1750-A-BA), 6.5%, due 04/15/09 812,727
1,000,000 Federal Home Loan Mortgage Corp. (1844-E), 6.5% , due 10/15/13 938,310
1,118,492 Federal Home Loan Mortgage Corp. (1541-J), 6.5% , due 07/15/23 1,117,754
3,750,000 Federal Home Loan Mortgage Corp. (1796-D-G), 6.5%, due 11/15/23 3,551,925
2,000,000 Federal Home Loan Mortgage Corp. (1665-M), 6.5%, due 01/15/24 1,950,420
3,144,107 Federal Home Loan Mortgage Corp. (1717-MA), 6.5%, due 04/15/24 2,975,362
396,972 Federal Home Loan Mortgage Corp. (1175 C), 8%, due 01/15/21, (TAC) 408,623
2,624,084 Federal Home Loan Mortgage Corp. -- Government National Mortgage
Association (43-OA), 6.5%, due 07/17/23 2,534,628
181,685 Federal National Mortgage Association (92-194-D), 5.75%,
due 09/25/13, (PAC) 181,175
931,613 Federal National Mortgage Association (95-X-19E-L), 6.25%,
due 08/25/08 907,084
2,000,000 Federal National Mortgage Association (93-X-130A-NA), 6.5%,
due 05/25/23 1,893,820
1,894,734 Federal National Mortgage Association (93-223-EA), 6.5%,
due 12/25/23, (PAC) 1,794,995
500,000 Federal National Mortgage Association (93-2-B), 7.2%, due 11/25/03 511,815
1,000,000 Federal National Mortgage Association (92-215-PL), 7.25%,
due 11/25/21, (PAC) 1,021,460
4,000,000 Federal National Mortgage Association (G92-29-J), 8%, due 07/25/22 4,135,600
3,828,059 Government National Mortgage Association (94-2-Z), 7.99125%,
due 07/16/24 3,726,883
1,500,000 Residential Funding Mortgage Securities I (95-S7-A9), 8%,
due 05/25/10, (I/O) 337,500
4,174,018 Ryland Acceptance Corporation Four (63-D), 8.75%, due 04/01/19 4,281,374
2,715,457 Securitized Asset Sales, Inc. (95-B-A2), 7.41%, due 09/25/24 2,737,857
2,165,192 Securitized Asset Sales, Inc. (95-4-A7), 7.5%, due 11/25/25 2,143,280
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS --
FIXED RATE (Cost: $44,082,640) 45,201,680
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
VARIABLE RATE (10.7%)
1,500,000 CMC Securities Corporation III (94-A-A22), 7.455%, due 02/25/24, (I/F) 885,469
3,850,113 Countrywide Funding Corp. (94-4-A9), 10.128%, due 04/25/24,
(I/F) (PAC) 2,964,587
2,000,000 Federal Home Loan Mortgage Corp. (1422-SA), 7.3839%,
due 11/15/07, (I/F) 1,749,500
1,000,000 Federal Home Loan Mortgage Corp. (1620-SB), 10%, due 11/15/23, (I/F) 743,290
2,288,691 Federal National Mortgage Association (93-189-S), 7.5097%,
due 10/25/23, (I/F) 1,668,364
3,000,000 Federal National Mortgage Association (94-40-SA), 8.5531%,
due 03/25/24, (I/F) 2,196,810
1,000,000 Federal National Mortgage Association (93-202-SZ), 10%,
due 11/25/23, (I/F) (PAC) 826,320
90,014 Northwestern Acceptance Corp. I (A-1), 6%, due 02/20/18 89,605
975,414 Prudential Home Mortgage Securities (93-47-A8), 10.063%,
due 12/25/23, (I/F) 840,426
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS --
VARIABLE RATE (Cost: $11,731,026) 11,964,371
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS --
FIXED RATE PASS-THROUGH SECURITIES (20.0%)
1,612,725 FHA (#000-13002), 7.125%, due 03/01/04 1,562,005
3,158,568 FHA (#012-11218), 7.125%, due 04/01/29 3,059,862
2,886,629 FHA (#012-11216), 7.185%, due 05/01/29 2,818,071
</TABLE>
<TABLE>
<S> <C> <C>
PAC-Planned Amorization Class. I/O-Interest Only security. TAC-Target Amorization Class.
I/F-Inverse floating rate security whose interest rate moves in the opposite
direction of prevailing interest rates.
See accompanying Notes to Financial Statements.
</TABLE>
18
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ----------- ------------------------ ----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS --
FIXED RATE PASS-THROUGH SECURITIES (Continued)
$ 1,930,989 FHA (#044-10592), 7.625%, due 09/01/22 $ 1,917,472
1,368,139 FHA (#081-11017), 7.75%, due 04/01/24 1,376,690
2,566,223 FHA (#112-43055), 9.25%, due 05/25/32 2,733,027
21,698 Federal Home Loan Mortgage Corp., Pool #250685, 6.5%, due 10/01/99 21,892
1,506,197 Federal National Mortgage Association, Pool #310001, 6%,
due 09/01/00 1,488,786
15,143 Federal National Mortgage Association, Pool #62420, 7.5%,
due 03/01/06 15,394
4,389,085 Federal National Mortgage Association, Pool #303786, 7.5%,
due 02/01/11 4,457,642
16,896 Federal National Mortgage Association, Pool #29542, 8.75%,
due 07/01/09 17,796
1,423,209 Government National Mortgage Association, Pool #365618, 7%,
due 10/15/33 1,367,163
1,567,234 Government National Mortgage Association, Pool #351003, 7.5%,
due 07/15/28 1,540,779
11,903 Government National Mortgage Association, Pool #176192, 8.25%,
due 12/15/01 12,327
61,923 Government National Mortgage Association, Pool #3933, 8.25%,
due 07/15/04 63,694
12,828 Government National Mortgage Association, Pool #217350, 9.25%,
due 08/15/00 13,318
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -- FIXED RATE
PASS-THROUGH SECURITIES (Cost: $22,787,851) 22,465,918
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS --
VARIABLE RATE PASS-THROUGH SECURITIES (22.2%)
3,238,691 Federal Home Loan Mortgage Corp., Pool #846317, 6.004%,
due 08/01/26 3,303,465
487,426 Federal Home Loan Mortgage Corp., Pool #406874, 7.257%,
due 06/01/22 496,260
539,326 Federal Home Loan Mortgage Corp., Pool #846125, 7.53%,
due 04/01/25 553,488
889,450 Federal Home Loan Mortgage Corp., Pool #755183, 7.686%, due 12/01/15 914,185
1,708,476 Federal Home Loan Mortgage Corp., Pool #846089, 7.7%, due 09/01/24 1,758,415
2,713,931 Federal National Mortgage Association, Pool #347216, 5.39%,
due 06/01/26 2,752,333
4,427,234 Federal National Mortgage Association, Pool #348025, 5.83%,
due 06/01/26 4,474,517
799,130 Federal National Mortgage Association, Pool #137064, 7.558%,
due 03/01/19 820,986
2,095,797 Federal National Mortgage Association, Pool #124410, 7.614%,
due 07/01/22 2,172,168
3,811,080 Government National Mortgage Association II, Pool #8717, 6%,
due 10/20/25 3,866,798
3,695,544 Government National Mortgage Association II, Pool #8608, 6.5%,
due 03/20/25 3,756,262
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -- VARIABLE
RATE PASS-THROUGH SECURITIES (Cost: $24,637,656) 24,868,877
-------------
U.S. TREASURY SECURITIES (0.3%)
197,000 Certificate Accrual Treasury Strip, 0%, due 08/15/01 147,130
177,000 Certificate Accrual Treasury Strip, 0%, due 05/15/06 95,263
112,000 Certificate Accrual Treasury Strip, 0%, due 08/15/08 51,336
-------------
TOTAL U.S. TREASURY SECURITIES (Cost: $287,645) 293,729
-------------
TOTAL FIXED INCOME SECURITIES (Cost: $103,526,818) (93.4%) 104,794,575
-------------
SHORT-TERM INVESTMENTS (Cost: $7,297,626) (6.5%)
------------------------------------------------
7,297,626 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 7,297,626
-------------
TOTAL INVESTMENTS (Cost: $110,824,444) (99.9%) 112,092,201
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.1% ) 167,632
-------------
NET ASSETS (100%) $ 112,259,833
-------------
-------------
</TABLE>
See accompanying Notes to Financial Statements.
19
<PAGE>
TCW Galileo Core Equity Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
CONSUMER STAPLES (20.1% of Net Assets)
Cosmetics and Household Products (3.2%)
52,400 Kimberly-Clark Corp. $ 4,886,300
25,300 Procter & Gamble Company 2,504,700
-------------
Total Cosmetics and Household Products 7,391,000
-------------
Restaurants (1.4%)
90,000 Boston Chicken, Inc. 3,273,750 **
-------------
Leisure, Entertainment and Media (4.2%)
177,400 Brunswick Corp. 4,168,900
71,700 Electronic Arts, Inc. 2,688,750
102,500 Infinity Broadcasting Corp., Class A 2,972,500 **
-------------
Total Leisure, Entertainment and Media 9,830,150
-------------
Healthcare (8.4%)
86,000 Amgen, Inc. 5,272,875
144,000 Columbia/HCA Healthcare Corp. 5,148,000
68,400 Johnson & Johnson 3,368,700
47,400 Oxford Health Plans, Inc. 2,156,700
53,400 Warner-Lambert Company 3,397,575
-------------
Total Healthcare 19,343,850
-------------
Retail (2.9%)
84,150 CUC International, Inc. 2,061,675
85,766 Home Depot, Inc. 4,695,688
-------------
Total Retailing 6,757,363
-------------
TOTAL CONSUMER STAPLES (Cost: $38,313,148) 46,596,113
-------------
CONSUMER CYCLICALS (8.3%)
Autos and Auto Parts (8.3%)
239,700 Chrysler Corp. 8,059,913
80,126 Ford Motor Company 2,503,938
131,700 Lear Seating Corp. 4,872,900
74,400 Magna International, Inc. 3,729,300
-------------
TOTAL CONSUMER CYCLICALS (Cost: $16,039,261) 19,166,051
-------------
</TABLE>
** Non-income producing.
See accomanying Notes to Financial Statements.
20
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
CAPITAL GOODS AND BUSINESS SERVICES (48.5%)
Aerospace (6.8%)
93,800 Boeing Company $ 8,946,175
53,300 United Technologies Corp. 6,862,375
-------------
Total Aerospace 15,808,550
-------------
Electronics, Semiconductors and Instruments (10.9%)
167,800 Hewlett Packard Company 7,404,175
71,500 Honeywell, Inc. 4,441,937
120,900 Intel Corp. 13,283,887
-------------
Total Electronics, Semiconductors and Instruments 25,129,999
-------------
Telecommunications Equipment (11.2%)
73,600 Ascend Communications, Inc. 4,811,600
67,700 Cascade Communications Corp. 4,916,713
116,800 Cisco Systems, Inc. 7,227,000
62,700 Lucent Technologies, Inc. 2,946,900
120,800 Premisys Communications, Inc. 6,040,000 **
-------------
Total Telecommunications Equipment 25,942,213
-------------
Information Processing (14.9%)
90,600 Computer Sciences Corp. 6,727,050
115,700 Electronic Data Systems Corp. 5,206,500
76,800 First Data Corp. 6,124,800
54,200 Microsoft Corp. 7,438,950
121,600 Storage Technology Corp. 5,183,200
80,500 Xerox Corp. 3,733,187
-------------
Total Information Processing 34,413,687
-------------
Machinery (1.9%)
63,700 Caterpillar, Inc. 4,371,413
-------------
Services-Business (2.8%)
97,900 Corporate Express, Inc. 3,193,988
124,800 Corrections Corp. of America 3,229,200 **
-------------
Total Services-Business 6,423,188
-------------
TOTAL CAPITAL GOODS AND BUSINESS SERVICES
(Cost: $76,078,097) 112,089,050
-------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
21
<PAGE>
TCW Galileo Core Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
BASIC INDUSTRIES (12.6%)
Transportation (12.6%)
76,300 AMR Corp. $ 6,409,200
76,033 Burlington Northern Santa Fe 6,263,217
188,100 Continental Airlines, Inc., Class B 4,726,013
92,600 Delta Air Lines, Inc. 6,563,025
107,400 UAL Corp. 5,088,075
-------------
TOTAL BASIC INDUSTRIES (Cost: $23,602,073) 29,049,530
-------------
CREDIT SENSITIVE (9.7%)
Banks and Financial Services (9.7%)
109,200 Associates First Capital Corp. 4,736,550
62,100 Citicorp 6,147,900
87,500 Green Tree Financial Corp. 3,467,187
32,900 Marsh & McLennan Companies, Inc. 3,425,713
67,200 Merrill Lynch & Company, Inc. 4,720,800
-------------
TOTAL CREDIT SENSITIVE (Cost: $15,196,724) 22,498,150
-------------
TOTAL EQUITY SECURITIES (Cost: $169,229,303) (99.2%) 229,398,894
-------------
Principal
Amount SHORT-TERM INVESTMENTS (Cost: $1,390,025) (0.6%)
--------- ------------------------------------------------
$ 1,390,025 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 1,390,025
-------------
TOTAL INVESTMENTS (Cost: $170,619,328) (99.8%) 230,788,919
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.2%) 513,342
-------------
NET ASSETS (100.0%) $ 231,302,261
-------------
-------------
</TABLE>
See accompanying Notes to Financial Statements.
22
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Earnings Momentum Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
CONSUMER STAPLES (40.4% of Net Assets)
Cosmetics and Household Products (0.1%)
2,200 Carson, Inc. $ 35,750 **
-------------
Drugs and Hospital Supply (6.3%)
28,400 Biochem Pharma, Inc. 1,210,550 **
29,000 Depotech Corp. 453,125 **
15,600 Dura Pharmaceuticals, Inc. 538,200 **
20,200 Interneuron Pharmaceuticals 499,950 **
8,600 Martek Biosciences Corp. 184,900 **
61,500 Orthologic Corp. 403,593 **
14,300 Safeskin Corp. 563,062 **
32,500 Vivus, Inc. 1,088,750 **
-------------
Total Drugs and Hospital Supply 4,942,130
-------------
Foods, Hotels and Restaurants (1.5%)
44,100 Interstate Hotels Company 1,190,700 **
-------------
Healthcare (12.4%)
32,300 Amerisource Health Corp. 1,368,713 **
3,100 Applied Analytical Industries, Inc. 67,425 **
81,200 Chronimed, Inc. 1,177,400 **
16,100 Collaborative Clinical Resource 225,400 **
3,400 Housecall Medical Resources, Inc. 15,300 **
44,600 Intelligent Medical Imaging, Inc. 278,750 **
53,300 Medcath, Inc. 692,900 **
31,700 Medical Resources, Inc. 273,413 **
23,300 Neopath, Inc. 380,081 **
62,900 Neoprobe Corp. 904,187 **
94,800 Noven Pharmaceuticals, Inc. 1,291,650 **
37,500 Occusystems, Inc. 1,026,562 **
29,800 Total Renal Care Holdings, Inc. 1,162,200 **
4,500 Urocor, Inc. 52,875 **
38,800 Veterinary Centers of America, Inc. 712,950 **
-------------
Total Healthcare 9,629,806
-------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
23
<PAGE>
TCW Galileo Earnings Momentum Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Leisure, Entertainment, Photo and Media (4.1%)
9,300 Cox Radio, Inc. $ 168,563 **
33,100 Metro Networks, Inc. 670,275 **
59,000 Norwood Promotional Products, Inc. 870,250 **
73,100 Oakley, Inc. 1,096,500 **
31,200 Rockshox, Inc. 397,800 **
-------------
Total Leisure, Entertainment, Photo and Media 3,203,388
-------------
Retail (7.3%)
15,700 Baby Superstore Inc. 425,863 **
28,800 Bed, Bath & Beyond, Inc. 727,200 **
46,800 Central Garden & Pet Company 1,105,650 **
30,800 Cost Plus, Inc. 546,700 **
9,600 Designer Holdings, Ltd. 184,800 **
34,050 Just for Feet, Inc. 889,556 **
43,400 Mossimo, Inc. 938,525 **
40,600 Wilmar Industries, Inc. 872,900 **
-------------
Total Retail 5,691,194
-------------
Services - Business (8.7%)
2,600 Abacus Direct Corp. 68,250 **
44,000 Brightpoint, Inc. 1,100,000 **
31,500 Corporate Express, Inc. 1,027,687 **
24,600 Learning Tree International, Inc. 1,039,350 **
10,000 Nova Corp. 217,500 **
22,400 PIA Merchandising Services, Inc. 268,800 **
33,200 Pittston Brink's Group 946,200
45,600 Stericycle, Inc. 336,300 **
31,800 Stewart Enterprises, Inc., Class A 1,089,150
8,000 Superior Consultant Holdings Corp. 196,000 **
38,300 Wackenhut Corrections Corp., Class B 512,263
-------------
Total Services - Business 6,801,500
-------------
TOTAL CONSUMER STAPLES (Cost: $27,358,613) 31,494,468
-------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
24
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
CONSUMER CYCLICALS (Cost: $316,148) (0.6%)
Autos and Auto Parts (0.6%)
18,700 Dura Automotive Systems, Inc. $ 448,800 **
-------------
CAPITAL GOODS (38.7%)
Aerospace and Conglomerates (1.0%)
22,500 Nichols Research Corp. 781,875 **
-------------
Computer Software and Services (17.0%)
27,950 American Management Systems 883,919 **
14,000 Aspect Development, Inc. 348,250 **
1,500 Aurum Software, Inc. 47,625 **
50,200 Baan Company, N.V. 1,857,400 **
15,000 BDM International 753,750 **
44,600 CSG Systems International, Inc. 747,050 **
39,600 Dialogic Corp. 1,356,300 **
20,000 Digex, Inc. 218,750 **
25,800 Farallon Communications, Inc. 328,950 **
41,800 Gensym Corp. 418,000 **
31,400 IQ Software Corp. 631,925 **
24,800 Legato Systems, Inc. 880,400 **
38,200 MDL Information Systems, Inc. 587,325 **
40,900 Mechanical Dynamics, Inc. 587,937 **
33,500 Openvision Technologies, Inc. 360,125 **
23,400 Remedy Corp. 1,140,750 **
7,100 Security Dynamics Tech, Inc. 576,875 **
38,300 Segue Software, Inc. 517,050 **
17,400 Select Software Tools (ADR) (Great Britain) 382,800 **
27,000 Transition Systems, Inc. 256,500 **
8,600 Trusted Information Systems, Inc. 116,100 **
7,600 USCS International, Inc. 136,800 **
3,900 Verilink Corp. 140,400 **
-------------
Total Computer Software and Services 13,274,981
-------------
</TABLE>
** Non-income producint.
See accompanying Notes to Finincial Statements.
25
<PAGE>
TCW Galileo Earnings Momentum Fund
SCHEDULE OF ENVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Electrical Equipment (2.6%)
29,300 AFC Cable Systems, Inc. $ 520,075 **
41,600 Bolder Technologies Corp. 618,800 **
33,500 C.P. Clare Corp. 276,375 **
42,500 Sheldahl, Inc. 642,813 **
-------------
Total Electrical Equipment 2,058,063
-------------
Electronics - Communication Equipment (4.2%)
6,800 Advanced Fibre Communications 388,450 **
103,400 Anicom, Inc. 930,600 **
51,900 ECI Telecommunications, Ltd. 1,038,000
14,700 Premiere Technologies, Inc. 238,875 **
5,000 Premisys Communications, Inc. 250,000 **
35,300 Worldtalk Communications Corp. 441,250 **
-------------
Total Electronics - Communication Equipment 3,287,175
-------------
Electronics - Semiconductors and Instruments (2.9%)
26,500 Ciber, Inc. 940,750 **
22,900 Digi International, Inc. 337,775 **
17,500 Epic Design Technology, Inc. 428,750 **
8,000 Fisher Scientific International 359,000
18,800 Nimbus CD International, Inc. 185,650 **
-------------
Total Electronics - Semiconductors and Instruments 2,251,925
-------------
Information Processing (3.3%)
12,400 Citrix Systems, Inc. 685,100 **
12,200 International Network Services 436,150 **
45,700 Objective Systems Integrator, Inc. 982,550 **
8,800 Saville Systems, PLC (ADR) (Ireland) 379,500 **
6,800 Storm Technology, Inc. 75,650 **
-------------
Total Information Processing 2,558,950
-------------
Office Equipment and Building Supplies (1.2%)
67,300 Cameron Ashley, Inc. 916,963 **
-------------
</TABLE>
** Non-income producint.
See accompanying Notes to Financial Statements.
26
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Pollution Control (6.5%)
18,600 Culligan Water Technologies, Inc. $ 697,500 **
31,900 Memtec, Ltd. (ADR) (Australia) 1,088,587
58,100 Molten Metal Technology, Inc. 777,088 **
79,100 Tetra Technologies, Inc. 1,651,212 **
25,700 U.S.A. Waste Services, Inc. 822,400 **
-------------
Total Pollution Control 5,036,787
-------------
TOTAL CAPITAL GOODS (Cost: $23,957,728) 30,166,719
-------------
BASIC INDUSTRIES (5.3%)
Chemicals (2.1%)
83,300 Landec Corp. 739,288 **
35,800 Mississippi Chemical Corp. 899,475
-------------
Total Chemicals 1,638,763
-------------
Metals (1.0%)
25,000 Titanium Metals Corp. 768,750 **
-------------
Transportation (2.2%)
19,400 Atlas Air, Inc. 715,375 **
33,700 United Transnet, Inc. 492,862 **
33,400 Wabash National Corp. 538,575
-------------
Total Transportation 1,746,812
-------------
TOTAL BASIC INDUSTRIES (Cost: $3,817,790) 4,154,325
-------------
CREDIT SENSITIVE (9.8%)
Bank and Financial Services (2.9%)
17,400 Envoy Corp. 639,450 **
48,800 Glendale Federal Bank FSB 902,800 **
43,100 Vallicorp Holdings, Ltd. 678,825
-------------
Total Banks and Financial Services 2,221,075
-------------
Insurance (3.2%)
28,300 Amerin Corp. 558,925 **
23,100 CapMAC Holdings, Inc. 770,963
15,400 Meadowbrook Insurance Group, Inc. 392,700
31,700 PXRE Corp. 784,575
-------------
Total Insurance 2,507,163
-------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
27
<PAGE>
TCW Galileo Earnings Momentum Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Telecommunications (3.7%)
68,100 Coherent Communications Systems Corp. $ 1,319,437 **
4,500 International Telecom Data Systems, Inc. 73,125 **
9,500 McLeod, Inc. 633,750 **
30,000 Omnipoint Corp. 817,500 **
4,500 Smartalk Teleservices, Inc. 67,501 **
-------------
Total Telecommunications 2,911,313
-------------
TOTAL CREDIT SENSITIVE (Cost: $6,862,487) 7,639,551
-------------
TOTAL EQUITY SECURITIES (Cost: $62,312,766) (94.8%) 73,903,863
-------------
Principal
Amount SHORT-TERM INVESTMENTS (Cost: $2,738,454) (3.5%)
--------- -------------------------------------------------
$2,738,454 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 2,738,454
-------------
TOTAL INVESTMENTS (Cost: $65,051,220) (98.3%) 76,642,317
EXCESS OF OTHER ASSETS OVER LIABILITIES (1.7%) 1,351,810
-------------
NET ASSETS (100%) $ 77,994,127
-------------
-------------
</TABLE>
** Non-income producing.
See accompanying Notes in Financial Statements.
28
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mid-Cap Growth Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
CONSUMER STAPLES (56.8% of Net Assets)
Foods, Hotels and Restaurants (8.3%)
54,300 Boston Chicken, Inc. $ 1,975,163
51,400 HFS, Inc. 3,765,050
40,200 Mirage Resorts, Inc. 884,400
34,100 Starbucks Corp. 1,108,250
-------------
Total Foods, Hotels and Restaurants 7,732,863
-------------
Healthcare (14.3%)
19,600 Biogen, Inc. 1,460,200
53,600 Dura Pharmaceuticals, Inc. 1,849,200
48,900 Health Management Associates, Inc., Class A 1,069,687
48,900 Medic Computer Systems, Inc. 1,381,425
44,300 Medpartners, Inc. 941,375
34,200 Omnicare, Inc. 931,950
17,700 Oxford Health Plans, Inc. 805,350
59,975 Phycor, Inc. 1,859,225
46,400 Physician Sales & Service, Inc. 986,000
26,100 Safeskin Corp. 1,027,688
28,700 Thermo Cardiosystems, Inc. 911,225
-------------
Total Healthcare 13,223,325
-------------
Leisure, Entertainment, Photo and Media (5.8%)
39,200 Clear Channel Communications, Inc. 2,861,600
50,200 Oakley, Inc. 753,000
32,400 Regal Cinemas, Inc. 842,400
58,400 Westwood One, Inc. 897,900
-------------
Total Leisure, Entertainment, Photo and Media 5,354,900
-------------
Retail (10.5%)
80,100 Bed, Bath & Beyond, Inc. 2,022,525
9,200 Blyth Industries, Inc. 357,650
79,875 CUC International, Inc. 1,956,937
46,050 Just for Feet, Inc. 1,203,056
22,600 Global Direct Mail Corp. 1,113,050
30,500 Mossimo, Inc. 659,563
87,400 Petsmart, Inc. 2,359,800
-------------
Total Retail 9,672,581
-------------
</TABLE>
See accompanying Notes to Financial Statements.
29
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Services-Business (17.9%)
70,000 AccuStaff, Inc. $ 1,872,500
40,375 Apollo Group, Inc., Class A 1,110,312
92,550 Corporate Express, Inc. 3,019,444
45,000 Corrections Corp. of America 1,164,375
10,400 MSC Industrial Direct Company, Inc., Class A 384,800
40,400 National Techteam, Inc. 1,090,800
35,000 Outdoor Systems, Inc. 1,566,250
44,600 Paychex, Inc. 2,542,200
47,200 Robert Half International, Inc. 1,893,900
65,900 Romac International, Inc. 1,894,625
-------------
Total Services-Business 16,539,206
-------------
TOTAL CONSUMER STAPLES (Cost: $44,156,768) 52,522,875
-------------
CONSUMER CYCLICALS (Cost: $1,779,175) (1.9%)
Autos and Auto Parts (1.9%)
75,000 Miller Industries, Inc. 1,753,125
-------------
CAPITAL GOODS (34.0%)
Electronics-Semiconductors and Instruments (2.3%)
60,400 Maxim Integrated Products, Inc. 2,114,000
-------------
Electronics-Telecommunications (13.7%)
16,500 Advanced Fibre Communications 942,562
71,500 Ascend Communications, Inc. 4,674,312
57,500 Cascade Communications Corp. 4,175,938
43,600 Premisys Communications, Inc. 2,180,000
22,800 Westell Technologies, Inc., Class A 644,100
-------------
Total Electronics-Telecommunications 12,616,912
-------------
Information Processing (16.2%)
37,000 Baan Company, N.V. 1,369,000
29,200 DST Systems, Inc. 897,900
800 I2 Technologies, Inc. 30,400
16,800 Inso Corp. 827,400
28,000 Netscape Communications Corp. 1,239,000
24,200 Peoplesoft, Inc. 2,171,950
24,900 Rational Software Corp. 955,538
64,500 Remedy Corp. 3,144,375
</TABLE>
See accompanying Notes to Financial Statements.
30
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Information Processing (Continued)
37,500 Security Dynamics Technologies, Inc. $ 3,046,875
8,200 Siebel Systems, Inc. 446,900
31,200 Sterling Commerce, Inc. 877,500
-------------
Total Information Processing 15,006,838
-------------
Office Equipment and Supplies (1.8%)
58,000 Viking Office Products, Inc. 1,689,250
-------------
TOTAL CAPITAL GOODS (Cost: $20,720,918) 31,427,000
-------------
CREDIT SENSITIVE (5.2%)
Banks and Financial Services (4.0%)
20,000 Credit Acceptance Corp. 540,000
101,500 Gartner Group, Inc. 3,121,125
-------------
Total Banks and Financial Services 3,661,125
-------------
Telecommunications (1.2%)
34,800 LCI International, Inc. 1,109,250
-------------
TOTAL CREDIT SENSITIVE (Cost: $3,890,474) 4,770,375
-------------
TOTAL EQUITY SECURITIES (Cost: $70,547,335) (97.9%) 90,473,375
-------------
Principal
Amount SHORT-TERM INVESTMENTS (Cost: $2,321,190) (2.5%)
--------- -------------------------------------------------
$2,321,190 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 2,321,190
-------------
TOTAL INVESTMENTS (Cost: $72,868,525) (100.4%) 92,794,565
EXCESS OF LIABILITIES OVER OTHER ASSETS (-0.4%) (364,887)
-------------
NET ASSETS (100%) $ 92,429,678
-------------
-------------
</TABLE>
31
<PAGE>
TCW Galileo Small Cap Growth Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
COMMON STOCK
------------
CONSUMER STAPLES (53.6% of Net Assets)
Beverages and Distribution (0.2%)
25,300 Odwalla, Inc. $ 306,763
-------------
Cosmetics and Household Products (2.4%)
2,000 Carson, Inc. 32,500
24,900 Diamond Home Services, Inc. 572,700 **
31,500 Sola International, Inc. 1,137,937 **
16,700 Thermolase Corp. 327,738 **
31,800 USA Detergents, Inc. 1,049,400 **
-------------
Total Cosmetics and Household Products 3,120,275
-------------
Drugs and Hospital Supply (5.3%)
900 Applied Analytical Industries, Inc. 19,575 **
58,000 Capstone Pharmacy Service, Inc. 677,875 **
29,400 Dura Pharmaceuticals, Inc. 1,014,300 **
25,500 Gulf South Medical Supply, Inc. 561,000 **
39,000 Pharmaceutical Product Development, Inc. 745,875 **
84,900 Safeskin Corp. 3,342,937 **
20,700 Vivus, Inc. 693,450 **
-------------
Total Drugs and Hospital Supply 7,055,012
-------------
Foods, Hotels and Restaurants (2.1%)
27,400 Boston Chicken, Inc. 996,675 **
3,500 Einstein/Noah Bagel Corp. 117,688 **
20,800 Interstate Hotels Company 561,600 **
22,500 Papa John's International, Inc. 1,119,375 **
-------------
Total Foods, Hotels and Restaurants 2,795,338
-------------
Healthcare (13.2%)
14,400 ABR Information Services, Inc. 997,200 **
38,800 Access Health, Inc. 1,280,400 **
23,600 Amerisource Health Corp. 1,000,050 **
14,100 Cohr, Inc. 345,450 **
31,500 CRA Managed Care, Inc. 1,598,625 **
32,600 First Commonwealth, Inc. 684,600 **
2,300 Housecall Medical Resources, Inc. 10,350 **
67,000 HPR, Inc. 938,000 **
75,000 IRIDEX Corp. 600,000 **
64,300 Lumisys, Inc. 618,887 **
29,600 MedCath, Inc. 384,800 **
32,000 Medpartners/Mullikin, Inc. 680,000 **
50,100 Neoprobe Corp. 720,188 **
52,000 Occusystems, Inc. 1,423,500 **
32,000 Omnicare, Inc. 872,000 **
92,600 Orthodontic Centers of America, Inc. 1,331,125 **
11,500 Oxford Health Plans, Inc. 523,250 **
17,500 Pediatrix Medical Group, Inc. 689,063 **
35,325 Phycor, Inc. 1,095,075 **
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
32
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Healthcare (Continued)
20,000 Total Renal Care Holdings, Inc. $ 780,000 **
2,900 Urocor, Inc. 34,075 **
47,300 Veterinary Centers of America, Inc. 869,138 **
-------------
Total Healthcare 17,475,776
-------------
Leisure, Entertainment, Photo and Media (6.9%)
28,000 Clear Channel Communications, Inc. 2,044,000 **
25,200 Cox Radio, Inc. 456,750 **
59,700 Family Golf Centers, Inc. 1,753,687 **
17,400 Lin Television Corp. 659,025 **
26,900 Metro Networks, Inc. 544,725 **
65,000 Oakley, Inc. 975,000 **
5,900 Penske Motorsports, Inc. 202,075 **
15,100 Premiere Radio Networks, Inc. 177,425 **
15,950 Premiere Radio Networks, Inc., Class A 185,419 **
42,075 Regal Cinemas, Inc. 1,093,950 **
49,900 Westwood One, Inc. 767,213 **
8,200 Young Broadcasting Corp. 233,700 **
-------------
Total Leisure, Entertainment, Photo and Media 9,092,969
-------------
Retail (7.8%)
41,800 Bed, Bath & Beyond, Inc. 1,055,450 **
22,000 Blyth Industries, Inc. 855,250 **
28,500 Cost Plus, Inc. 505,875 **
20,400 Designer Holdings, Ltd. 392,700 **
16,200 Dollar Tree Stores, Inc. 611,550 **
63,150 Just for Feet, Inc. 1,649,793 **
15,800 K & G Men's Center, Inc. 396,975 **
67,000 Kenneth Cole Productions, Inc. 1,105,500 **
1,200 Marks Bros. Jewelers, Inc. 27,900 **
56,200 Mossimo, Inc. 1,215,325 **
21,100 North Face, Inc. 427,275 **
59,200 Petsmart, Inc. 1,598,400 **
1,000 PJ America, Inc. 16,000 **
14,200 Tiffany & Company 525,400
-------------
Total Retail 10,383,393
-------------
Services - Business (15.5%)
2,600 Abacus Direct Corp. 68,250 **
36,600 AccuStaff, Inc. 979,050 **
20,800 Career Horizons, Inc. 839,800 **
16,800 Caribiner International, Inc. 764,400 **
52,200 Corporate Express, Inc. 1,703,025 **
22,600 Corrections Corp. of America 584,775 **
100,000 Gartner Group, Inc., Class A 3,075,000 **
22,700 Meta Group, Inc. 715,050 **
136,800 National Techteam, Inc. 3,693,600
3,600 Nova Corp. 78,300 **
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
33
<PAGE>
TCW Galileo Small Cap Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -----
<S> <C> <C>
Services - Business (Continued)
46,800 Outdoor Systems, Inc. $ 2,094,300 **
19,500 Pittston Brink's Group 555,750
40,600 PMT Services, Inc. 812,000 **
37,600 Robert Half International, Inc. 1,508,700 **
49,600 Romac International, Inc. 1,426,000 **
21,400 Superior Consultant Holdings Corp. 524,300 **
14,600 Sylvan Learning Systems, Inc. 616,850 **
900 The Vincam Group, Inc. 28,575 **
20,300 Wackenhut Corrections Corp. 375,550 **
2,600 Xlconnect Solutions, Inc. 76,050 **
-------------
Total Services - Business 20,519,325
-------------
Wholesale - Food and Drug (0.2%)
14,500 Nuco2, Inc. 192,125 **
-------------
TOTAL CONSUMER STAPLES (Cost: $49,649,763) 70,940,976
-------------
CONSUMER CYCLICALS (1.8%)
Autos and Auto Parts (1.8%)
23,000 Dura Automotive Systems, Inc. 552,000 **
80,400 Miller Industries, Inc. 1,879,350 **
-------------
TOTAL CONSUMER CYCLICALS (Cost: $1,326,447) 2,431,350
-------------
CAPITAL GOODS (32.8%)
Computer Software and Services (13.4%)
12,900 Aspect Development, Inc. 320,888 **
1,100 Aurum Software, Inc. 34,925 **
45,600 Cambridge Tech Partners, Inc. 1,504,800 **
19,800 CBT Group, PLC (ADR) (Ireland) 1,089,000 **
3,700 Check Point Software Technologies, Ltd. 101,750 **
12,400 Clarify, Inc. 598,300 **
27,250 Computer Management Sciences, Inc. 797,063 **
71,700 CSG Systems International, Inc. 1,200,975 **
13,300 Inso Corp. 655,025 **
49,600 Legato Systems, Inc. 1,760,800 **
19,428 Logic Works, Inc. 111,711 **
10,800 Peoplesoft, Inc. 969,300 **
11,200 Planning Sciences International, PLC 142,800 **
44,175 Pure Atria Corp. 1,203,768 **
34,200 Remedy Corp. 1,667,250 **
31,600 Security Dynamics Tech, Inc. 2,567,500 **
24,300 Segue Software, Inc. 328,050 **
1,900 Select Software Tools (ADR) (Great Britain) 41,800 **
4,950 Syke Enterprises, Inc. 230,175 **
10,300 Transition Systems, Inc. 97,850 **
3,300 Trusted Information Systems, Inc. 44,550 **
14,400 Verilink Corp. 518,400 **
36,000 Viasoft, Inc. 1,773,000 **
-------------
Total Computer Software and Services 17,759,680
-------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statments.
34
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares or
Warrants EQUITY SECURITIES Value
--------- ----------------- -------------
<S> <C> <C>
Electrical Equipment (0.7%)
37,000 Bolder Technologies Corp. $ 550,375 **
24,400 Sheldahl, Inc. 369,050 **
----------
Total Electrical Equipment 919,425
----------
Electronics -- Communication Equipment (6.5%)
3,384 American Satellite Network, Inc., Warrants, expire 6/30/99 3 **
34,100 Ascend Communications, Inc. 2,229,287 **
48,000 Cascade Communications Corp. 3,486,000 **
13,536 Millicom Inc., Escrow --- **
19,500 Natural Microsystems Corp. 1,038,375 **
2,000 Orckit Communications, Ltd. 24,000 **
36,600 Premisys Communications, Inc. 1,830,000 **
----------
Total Electronics -- Communication Equipment 8,607,665
----------
Electronics -- Semiconductors and Instruments (2.6%)
14,224 C.P. Clare Corp. 117,348 **
56,600 Epic Design Technology, Inc. 1,386,700 **
44,300 Maxim Integrated Products, Inc. 1,550,500 **
28,700 SRS Labs, Inc. 452,025 **
----------
Total Electronics -- Semiconductors and Instruments 3,506,573
----------
Information Processing (8.1%)
24,700 Aspen Technologies, Inc. 1,661,075 **
14,500 Astea International, Inc. 85,188 **
60,200 Business Objects, S.A. 895,475 **
42,700 Citrix Systems, Inc. 2,359,175 **
4,200 Computer Products, Inc. 82,950 **
19,600 HNC Software, Inc. 617,400 **
1,000 I2 Technologies, Inc. 38,000 **
700 IDX Systems Corp. 20,650 **
1,700 Intelligroup, Inc. 26,775 **
13,600 International Network Services 486,200 **
38,200 Medic Computer Systems, Inc. 1,079,150 **
5,600 Network Appliance, Inc. 196,000 **
39,500 Objective Systems Integrators, Inc. 849,250 **
51,300 Saville Systems, PLC (ADR) (Ireland) 2,212,313 **
3,400 Storm Technology, Inc. 37,825 **
17,600 Workgroup Technology Corp. 103,400 **
----------
Total Information Processing 10,750,826
----------
Machinery and Infrastructure (0.2%)
5,300 Roper Industries, Inc. 223,925
----------
Pollution Control (1.3%)
24,500 Culligan Water Technologies, Inc. 918,750 **
22,700 Memtec, Ltd. ADR (Australia) 774,637
----------
Total Pollution Control 1,693,387
----------
TOTAL CAPITAL GOODS (Cost: $24,335,393) 43,461,481
----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
35
<PAGE>
TCW Galileo Small Cap Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- -------------
<S> <C> <C>
BASIC INDUSTRIES (1.2%)
Transportation (1.2%)
22,900 Atlas Air, Inc. $ 844,437 **
48,000 Wabash National Corp. 774,000
------------
TOTAL BASIC INDUSTRIES (Cost: $1,142,553) 1,618,437
------------
CREDIT SENSITIVE (6.3%)
Banks and Financial Services (2.5%)
21,000 Envoy Corp. 771,750 **
10,100 First USA Paymentech, Inc. 373,700 **
52,800 Imperial Credit Industries, Inc. 957,000 **
37,400 Redwood Trust, Inc. 1,234,200
------------
Total Banks and Financial Services 3,336,650
------------
Insurance (0.4%)
28,400 Amerin Corp. 560,900 **
------------
Telecommunications (3.4%)
4,600 International Telecom Data Systems, Inc. 74,750 **
55,700 LCI International, Inc. 1,775,437 **
44,000 McLeod, Inc. 1,430,000 **
54,600 Winstar Communications, Inc. 1,146,600 **
------------
Total Telecommunications 4,426,787
------------
TOTAL CREDIT SENSITIVE (Cost: $6,512,511) 8,324,337
------------
TOTAL COMMON STOCK (Cost: $82,967,667 ) (95.7%) 126,776,581
------------
PREFERRED STOCK
---------------
CAPITAL GOODS (0.8%)
Electronics - Communication Equipment (Cost: $1,285,287) (0.8%)
33,400 Teltrend, Inc. 1,102,200 **
------------
BASIC INDUSTRIES (1.0%)
Energy and Oil Services (Cost: $1,191,543) (1.0%)
33,900 Newpark Resources, Inc. 1,271,250 **
------------
TOTAL PREFERRED STOCK (Cost: 2,476,830) (1.8%) 2,373,450
------------
TOTAL EQUITY SECURITIES (Cost: $85,444,497) (97.5%) 129,150,031
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENTS (Cost: $1,137,545) (0.9%)
----------- -------------------------------------------------------
<S> <C> <C>
$1,137,545 Bank of New York Depositary Reserve, 4.4%, due 11/01/96 1,137,545
------------
TOTAL INVESTMENTS (Cost: $86,582,042) (98.4%) 130,287,576
EXCESS OF OTHER ASSETS OVER LIABILITIES (1.6%) 2,156,909
------------
NET ASSETS (100%) $132,444,485
------------
------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
36
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Asia Pacific Equity Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
------------- ----------------- ----------
<S> <C> <C>
COMMON STOCK
------------
HONG KONG (38.6% of Net Assets)
642,000 Amoy Properties, Limited $ 792,880
157,000 Cheung Kong Holdings, Limited 1,258,810
199,500 China Light & Power Company, Limited 926,203
2,376,000 China Overseas Land & Investment, Limited 883,391
1,099,000 China Resources, Limited 1,236,476
284,000 Citic Pacific, Limited 1,380,941
910,000 Guangdong Investment, Limited 653,135
1,397,000 Guangzhou Investment Company, Limited 451,653
116,500 Hang Seng Bank, Limited 1,382,295
76,000 Henderson Land Development, Limited 675,702
87,937 HSBC Holdings Public, Limited 1,791,105
206,000 Hutchison Whampoa, Limited 1,438,566
425,000 Hysan Development Company, Limited 1,363,043
307,000 New World Development Company, Limited 1,786,568
204,000 Shanghai Industrial Holdings, Limited 462,995
114,000 Sun Hung Kai Properties, Limited 1,297,348
96,500 Swire Pacific, Limited, Class A 851,724
----------
TOTAL HONG KONG (Cost: $14,255,397) 18,632,835
----------
INDIA (2.1%)
7,800 Bajaj Auto, Limited (GDS) 243,750
31,000 India Cement (GDR) 77,500
12,000 Indian Hotels (ADR) 279,000
25,600 State Bank of India (GDR) 382,720
----------
TOTAL INDIA (Cost: $1,014,789) 982,970
----------
INDONESIA (5.5%)
375,930 PT Bank International Indonesia
(Foreign Registered) 604,964
66,500 PT HM Sampoerna (Foreign Registered) 617,828
166,940 PT Indofood Sukses Makmur
(Foreign Registered) 351,030
209,000 PT London Sumatra Indonesia
(Foreign Registered) 542,613
17,700 Telekomunikasi Indonesia (ADR) 531,000
----------
TOTAL INDONESIA (Cost: $2,197,885) 2,647,435
----------
</TABLE>
See accompanying Notes to Financial Statements.
37
<PAGE>
TCW Galileo Asia Pacific Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares or
Warrants EQUITY SECURITIES Value
------------- ----------------- ----------
<S> <C> <C>
MALAYSIA (23.1%)
185,000 Amway Malaysia $ $ 1,105,461
150,000 Commerce Asset Holdings 979,422
250,000 DCB Holdings Berhad 855,758
30,000 Edarar Otomobil 280,174
135,000 Gadek Berhad 1,121,883
70,000 Gadek Berhad, Warrants, expire 12/19/00 264,543 **
170,000 Ho Hup Construction 474,278
87,000 Kwong Yik Bank 239,276
315,000 Larut Consolidated 466,205
155,000 Malakoff Berhad 699,248
106,666 Mancon Berhad 356,679
175,000 Nam Fatt Berhad 543,629
135,000 New Straits Times Press Berhad 710,526
120,000 Samanda Holdings Berhad 655,323
228,000 Sime Darby Berhad 807,519
93,000 Sistem Televisyen Malaysia Berhad 191,373
70,000 Telecom Malaysia Berhad 617,729
100,180 United Engineers Malaysia 792,877
----------
TOTAL MALAYSIA (Cost: $8,448,440) 11,161,903
----------
PHILIPPINES (3.7%)
1,320 Far East Bank and Trust Company 4,514
65,910 Manila Electric Company 483,307
15,900 Metropolitan Bank and Trust 350,380
34,500 Philipine Commerce International Bank 445,669
79,300 San Miguel Corporation, Series B 286,227
2,183,600 Southeast Asia Cement Holdings 207,409
----------
TOTAL PHILIPPINES (Cost: $1,812,030) 1,777,506
----------
SINGAPORE (10.0%)
80,000 City Development, Limited 630,234
67,000 Development Bank of Singapore, Limited
(Foreign Registered) 803,620
80,000 Far East Levingston Shipbuilding, Limited 383,251
70,000 Fraser & Neave, Limited 695,529
88,000 Keppel Corporation, Limited 655,784
114,000 Orchard Parade Holding, Limted 210,362
135,000 Singapore Land, Limited 747,339
78,000 ST Capital, Limited 91,341
64,000 United Overseas Bank, Limited
(Foreign Registered) 622,285
----------
TOTAL SINGAPORE (Cost: $4,793,586) 4,839,745
----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
38
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares or
Warrants EQUITY SECURITIES Value
------------- ----------------- ------------
<S> <C> <C>
SOUTH KOREA (3.2%)
115 Daewoo Corporation, Warrants, expire 11/08/96 $ 575 **
28,000 Hyundai Engineering and Construction (GDR) 203,000
1,630 Hyundai Engineering and Construction (New GDR) 19,560
13,800 Korea Electric Power (ADR) 248,400
57,000 Korea Exchange Bank 557,960
12,000 L.G. Securities, Limited 192,637
16,400 Pohang Iron & Steel Company, Limited (ADR) 340,300
------------
TOTAL SOUTH KOREA (Cost: $2,293,400) 1,562,432
------------
TAIWAN (3.6%)
54,000 Acer, Inc., Limited (GDR) 378,000
8,000 China Steel, Limited (GDR) 152,000
104,395 The Taiwan Index Fund, Limited 1,214,114
------------
TOTAL TAIWAN (Cost: $1,832,640) 1,744,114
------------
THAILAND (5.9%)
57,000 Bangkok Bank, Public Company, Limited
(Foreign Registered) 607,595
169,300 Electricity Generating, Public Company, Limited
(Foreign Registered) 490,975
41,500 Mathicon Company, Public Company, Limited
(Foreign Registered) 191,911
65,700 Phatra Thanakit, Public Company, Limited
(Foreign Registered) 243,314
35,200 PTT Exploration & Production, Public Company, Limited
(Foreign Registered) 504,887
13,200 Siam Cement Company, Public Company, Limited
(Foreign Registered) 451,088
45,000 Thai Farmer's Bank Company, Public Company, Limited
(Foreign Registered) 343,888
5,625 Thai Farmer's Bank Company, Public Company, Limited,
Warrants, expire 11/09/02 --- **
------------
TOTAL THAILAND (Cost: $3,369,747) 2,833,658
------------
TOTAL COMMON STOCK (Cost: $40,017,914) (95.7%) 46,182,598
------------
PREFERRED STOCK
SOUTH KOREA (Cost: $601,931) (1.0%)
6,730 Samsung Electronics Company, Limited Non-Voting,
Preferred (GDR) 471,953
------------
TOTAL EQUITY SECURITIES (Cost: $40,619,845) (96.7%) 46,654,551
------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
39
<PAGE>
TCW Galileo Asia Pacific Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount CONVERTIBLE SECURITIES Value
----------- ---------------------- --------------
<S> <C> <C>
INDIA (Cost: $251,000) (0.5%)
251,000 Mahindra & Mahindra, Limited (144A), Convertible Bond,
5%, due 07/09/01 $ 261,040 *
--------------
TAIWAN (1.7%)
184,000 Far East Department Store, Limited, Convertible Bond,
3%, due 07/06/02 196,880
511,000 United Microelectric Corporation, Limited (144A),
Convertible Bond, 1.25%, due 08/06/04 620,865 *
--------------
TOTAL TAIWAN (Cost: $841,202) 817,745
--------------
TOTAL CONVERTIBLE SECURITIES (Cost: $1,092,202) (2.2%) 1,078,785
--------------
SHORT-TERM INVESTMENTS (Cost: $1,086,511) (2.2%)
-----------------------------------------------
1,086,511 Bank of New York Depositary Reserve, 4.4%,
due 11/01/96 1,086,511
--------------
TOTAL INVESTMENTS (Cost: $42,798,558) (101.1%) 48,819,847
LIABILITIES IN EXCESS OF OTHER ASSETS (-1.1%) (553,644)
--------------
NET ASSETS (100%) $ 48,266,203
==============
</TABLE>
*Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
40
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Emerging Markets Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
----------- ---------------------- ------------
<S> <C> <C>
COMMON STOCK
------------
ARGENTINA (3.0% of Net Assets)
4,479 Banco de Galicia y Buenos Aires, S.A. (ADR) $ 81,182
5,840 Banco Frances del Rio de la Plata, S.A. (ADR) 153,300
93,863 Compania Naviera Perez Companc S.A.C.I.M.F.A. 596,090
29,339 IRSA Inversiones y Representaciones, S.A. 89,786
19,967 Molinos Rio de la Plata, S.A. 62,902
4,195 Siderar, S.A. (144A) (ADR) 89,144 *
83,600 Siderca, S.A., Series A 132,937
8,400 Telecom Argentina STET-France Telecom, S.A., Series B 31,713
2,000 Telecom Argentina STET-France Telecom, S.A., Series B (ADR) 75,500
4,500 Telefonica de Argentina Sociedad Anonima, Series B (ADR) 104,625
5,000 TRANSPORTADORA DE GAS DEL SUR, S.A. (ADR) 58,125
10,401 Yacimientos Petroliferos Fiscales Sociedad del Estado,
Series D (ADR) 236,623
------------
TOTAL ARGENTINA (Cost: $1,368,151) 1,711,927
------------
BRAZIL (3.5%)
17,760 Aracruz Celulose, S.A. (ADR) 142,080
1,654,373 CENTRAIS ELETRICAS BRASILEIRAS, S.A. (ELETROBRAS) 513,520
9,860,000 Companhia Paranaense de Energia (COPEL) 101,699
6,740,000 Companhia Siderurgica Nacional 167,238
960,000 Light Participacoes, S.A. 151,048
4,060 Multicanal Participacoes, S.A. (ADR) 56,840
4,800,000 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 292,381
7,500 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) (ADR) 558,750
165,883 Telecomunicacoes de Sao Paulo, S.A. (TELESP) 28,247
------------
TOTAL BRAZIL (Cost: $1,706,451) 2,011,803
------------
CHILE (7.1%)
10,200 Banco BHIF (ADR) 183,600
3,000 Chilectra, S.A. (144A) (ADR) 160,875 *
5,000 Chilgener, S.A. (ADR) 113,125
6,200 Compania Cervecerias Unidas, S.A. (ADR) 125,550
8,450 Compania de Telecomunicaciones de Chile, S.A.,
Series A (ADR) 833,381
10,260 Embotelladora Andina, S.A. (ADR) 353,970
11,300 Empresa Nacional de Electricdad, S.A. (ADR) 207,638
14,540 Enersis, S.A. (ADR) 427,110
10,680 Genesis Chile Fund, Limited 443,220
</TABLE>
*Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
41
<PAGE>
TCW Galileo Emerging Markets Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
----------- ----------------- ------------
<S> <C> <C>
CHILE (Continued)
8,400 Madeco, S.A. (ADR) $ 201,600
7,850 Maderas y Sinteticos, S.A. (MASISA) (ADR) 111,863
8,850 Santa Isabel, S.A. (ADR) 248,906 **
6,480 Sociedad Quimica y Minera de Chile, S.A. (ADR) 372,600
104,000 The Five Arrows Chile Investment Trust, Limited 304,200
------------
TOTAL CHILE (Cost: $4,014,838) 4,087,638
------------
COLOMBIA (0.9%)
13,900 Almacenes Exito, S.A. 37,568
20,746 Banco de Bogota 126,677
2,900 Banco Industrial Colombiano (ADR) 53,650
6,400 Cementos Diamante, S.A. (144A) (ADS) 89,600 *
9,300 Compania de Cemento Argos, S.A. 50,270
10,770 Compania Nacional de Chocolates, S.A. 90,559
3,300 Compania Suramericana de Seguros, S.A. 61,111
------------
TOTAL COLOMBIA (Cost: $639,638) 509,435
------------
CZECH REPUBLIC (0.8%)
4,150 Komercni Banka (144A) (GDR) 101,675 *
968 SPT Telekom 103,172
970 Tabak A.S. 229,824
------------
TOTAL CZECH REPUBLIC (Cost: $467,630) 434,671
------------
GREECE (0.9%)
20,820 Aegek 88,132
7,230 Ergo Bank 423,164
------------
TOTAL GREECE (Cost: $500,462) 511,296
------------
HONG KONG (5.0%)
78,000 Cheung Kong Holdings, Limited 625,396
121,000 Citic Pacific, Limited 588,359
304,000 Cosco Pacific, Limited 290,920
7,360 Guangshen Railway (ADR) 137,080
1,666,000 Guangzhou Investment Company, Limited 538,622
76,600 New World Development Company, Limited 445,769
121,000 Shanghai Industrial Holdings, Limited 274,619
------------
TOTAL HONG KONG (Cost: $2,637,065) 2,900,765
------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing
See accompanying Notes to Financial Statements.
42
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares or
Warrants EQUITY SECURITIES Value
------------- ----------------- -----------
<S> <C> <C>
HUNGARY (1.0%)
2,908 Egis $ 179,099
3,940 Gedeon Richter (144A) 207,835 *
9,200 Mol Magyar Olaj-Es Gazipari (144A) (GDR) 92,920 *
5,668 OTP Bank (GDR) 97,490
------------
TOTAL HUNGARY (Cost: $592,090) 577,344
------------
INDIA (2.9%)
33,500 BSES, Limited (GDR) 619,750
10,500 Hindalco Industries, Limited (GDR) 189,000
20,000 Larsen & Toubro, Limited (GDR) 287,600
39,500 State Bank of India (GDR) 590,525
------------
TOTAL INDIA (Cost: $1,777,384) 1,686,875
------------
INDONESIA (3.3%)
110,000 PT London Sumatra Indonesia 285,586
426,008 PT Bank International Indonesia (Foreign Registered) 685,547
172,000 PT Gundag Garam (Foreign Registered) 686,435
126,950 PT Indofood Sukses Makmur (Foreign Registered) 266,942
------------
TOTAL INDONESIA (Cost: $1,550,858) 1,924,510
------------
IRELAND (Cost: $275,000) (0.4%)
27,500 Central Asia Investment Company, Limited 254,375
------------
MALAYSIA (17.5%)
190,000 Commerce Asset Holdings 1,240,602
307,000 DCB Holdings Berhad 1,050,871
55,000 Edaran Otomobil 513,653
146,000 Gadek Berhad 1,213,296
80,000 Gadek Berhad, Warrants expire 12/31/96 302,335 **
70,000 Genting Berhad 523,546
493,000 Hicom Holdings Berhad 1,316,878
73,250 Hicom Holdings Berhad, Warrants expire 12/18/00 82,903 **
388,000 Larut Consolidated 574,246
248,000 New Straits Times Press Berhad 1,305,263
4,000 Prime Utilities Berhad, Warrants, expire 3/11/01 11,080 **
108,000 Telekom Malaysia Berhad 953,067
128,000 United Engineers Malaysia 1,013,059
------------
TOTAL MALAYSIA (Cost: $8,165,679) 10,100,799
------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing
See accompanying Notes to Financial Statements.
43
<PAGE>
TCW Galileo Emerging Markets Fund
SCHEDULE OF INVESTMENTS (Continued)
- ----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
----------- ----------------- ------------
<S> <C> <C>
MEXICO (9.8%)
27,400 Apasco, S.A.de C.V., Series A $ 168,246
143,900 Cemex, S.A. de C.V., Series B 521,142
366,100 Cifra, S.A. de C.V., Series C 472,535
27,300 DESC, S.A. de C.V., Series B 134,789
9,200 Empresas ICA Sociedad Controladora, S.A. de C.V. (ADR) 119,600
11,200 Empresas La Moderna, S.A. de C.V. (ADR) 201,600
40,600 Fomento Economica Mexicano, S.A. de C.V., Series B 124,140
60,900 GRUPO CARSO, S.A. de C.V., Series A1 278,553 **
63,000 Grupo Cementos de Chihuahua, S.A. de C.V., Series B 71,053
82,891 Grupo Financiero Inbursa, S.A. de C.V., Series B 270,071
119,883 Grupo Industrial Alfa, S.A. de C.V., Series A 503,268
43,700 Grupo Industrial Bimbo, S.A. de C.V., Series A 218,774
29,300 Grupo Modelo, S.A. de C.V. 152,925
11,030 Grupo Televisa, S.A. de C.V. (ADR) 289,538
66,600 Jugos del Valle, S.A. de C.V., Series B 92,138 **
33,800 Kimberly-Clark de Mexico, S.A. de C.V., Series A 656,516
36,045 Telefonos de Mexico, S.A. de C.V., Series L (ADR) 1,099,373
5,200 Transportacion Maritima Mexicana, S.A. de C.V.,
Series A (ADR) 29,900
19,150 Tubos de Acero de Mexico, S.A. de C.V. (ADR) 213,044
------------
TOTAL MEXICO (Cost: $5,724,393) 5,617,205
------------
PANAMA (Cost: $163,690) (0.3%)
4,110 Panamerican Beverages, Inc. (ADR) 179,299
------------
PERU (2.7%)
90,502 Cementos Lima, S.A., Class T 125,462
221,983 Cerveceria Backus y Johnston, S.A. 224,749
24,158 Compania de Minas Buenaventura, S. A. 188,429
4,936 Compania de Minas Buenaventura, S. A., Series B 42,094
4,600 Compania de Minas Buenaventura, S.A. (ADR) 77,050
227,056 CPT - Telefonica del Peru, S.A., Series B 482,759
6,200 CPT - Telefonica del Peru, S.A. (ADR) 127,875
16,763 Credicorp, Limited (ADR) 293,353
------------
TOTAL PERU (Cost: $1,392,249) 1,561,771
------------
</TABLE>
** Non-income producing
See accompanying Notes to Financial Statements.
44
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares or
Warrants EQUITY SECURITIES Value
------------- ----------------- ------------
<S> <C> <C>
PHILIPPINES (3.4%)
136,200 Manila Electric Company 998,731
29,200 Philippine National Bank 335,600
174,400 San Miguel Corporation, Series B 629,483
------------
TOTAL PHILIPPINES (Cost: $1,959,919) 1,963,814
------------
POLAND (2.8%)
13,491 Bank Rozwoju Exsportu, S.A. 399,936
45,343 Electrim Spolka Akcyjna, S.A. 378,301
90,905 Mostostal Export, S.A. 230,756
11,394 Powszechne Swiadectwo Udzialowe 582,503
------------
TOTAL POLAND (Cost: $1,698,073) 1,591,496
------------
PORTUGAL (2.0%)
24,079 Corticeira Amorim 249,283
18,600 Espirito Santo Financial Holding, S.A. (ADR) 225,525
9,700 Portugal Telecom 252,162
20,650 Soares da Costa 173,455
8,800 Sonae Investments, Series A 257,850
------------
TOTAL PORTUGAL (Cost: $1,368,958) 1,158,275
------------
RUSSIA (2.5%)
13,406 AO Mosenergo Joint Stock Company (144A) (ADR) 377,044 *
10,000 Gazprom (144A) (ADR) 186,250 *
8,008 Lukoil Holdings (144A) (ADR) 310,310 *
8 Megionneftegaz (144A) (RDC) 256,000 *
13 Rostelecom (144A) (RDC) 328,900 *
------------
TOTAL RUSSIA (Cost: $1,469,348) 1,458,504
------------
SOUTH AFRICA (Cost: $40,800) (0.1%)
2,000 DeBeers Consolidated Mines, Limited (ADR) 59,000
------------
SOUTH KOREA (3.4%)
60 Daewoo Corporation Warrants, expire 11/08/96 300 **
39,800 Korea Electric Power Corporation (New ADR) 716,400
38,000 Korea Exchange Bank 371,973
11,800 L.G. Chemical, Limited (GDR) 132,750
35,200 Pohang Iron & Steel Company, Limited (ADR) 730,400
------------
TOTAL SOUTH KOREA (Cost: $2,623,735) 1,951,823
------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing
See accompanying Notes to Financial Statements.
45
<PAGE>
TCW Galileo Emerging Markets Fund
SCHEDULE OF INVESTMENTS (Continued)
- ----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
----------- ----------------- ------------
<S> <C> <C>
TAIWAN (3.8%)
36,400 Acer, Inc., Limited (GDR) $ 254,800
15,000 China Steel, Limited (GDR) 285,000
100,600 R.O.C. Taiwan Fund, Limited 980,850
58,900 The Taiwan Index Fund, Limited 685,007
------------
TOTAL TAIWAN (Cost: $2,458,021) 2,205,657
------------
THAILAND (4.2%)
52,000 Bankok Bank, Public Company, Limited (Foreign
Registered) 554,297
62,000 PTT Exploration & Production, Public Company, Limited
(Foreign Registered) 889,289
11,500 Siam Cement Company, Public Company, Limited
(Foreign Registered) 392,993
77,000 Thai Farmer's Bank Public Company, Limited
(Foreign Registered) 588,431
9,500 Thai Farmer's Bank Public Company, Limited
(Foreign Registered), Warrants, expire 11/09/02 --- **
------------
TOTAL THAILAND (Cost: $2,487,670) 2,425,010
------------
TURKEY (3.4%)
8,574,000 Aksigorta 275,377
2,870,000 Arcelik A.S. 282,480
4,030,000 Eczacibasi Yapi 150,311
490,000 Ege Biracilik Ve Malt Sanayi 152,300
916,000 Kordsa Kord Bezi Sanayi Ve Ticaret A.S. 360,630
334,000 Migros Turk A.S. 335,661
7,862,000 Turkiye Garanti Bankasi A.S. 390,982
6,971 Turkiye Garanti Bankasi A.S. (ADR) 33,112
------------
TOTAL TURKEY (Cost: $2,090,299) 1,980,853
------------
VIETNAM (Cost: $343,850) (0.4%)
29,900 Lazard Vietnam Fund, Limited (Preference Shares) 209,300
------------
TOTAL COMMON STOCK (Cost: $47,516,251) (85.1%) 49,073,445
------------
</TABLE>
** Non-income producing
See accompanying Notes to Financial Statements.
46
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares PREFERRED STOCK Value
----------- --------------- ------------
<S> <C> <C>
BRAZIL (10.2%)
49,188,282 Banco Bradesco, S.A. $ 419,275
576,500 Banco Itau, S.A. 249,628
270,000 Brasmotor, S.A. 91,690
2,231,289 CENTRAIS ELETRICAS BRASILEIRAS, S.A., Series B
(ELETROBRAS) 722,992
1,235,677 Companhia Cervejaria Brahma 763,506
219,000 Companhia Cimento Portland Itau 57,536
354,000 COMPANHIA DE TECIDOS NORTE DE MINAS (COTEMINAS) 118,838
4,400 COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) (ADR) 139,150
25,858 Companhia Vale do Rio Doce 535,930
52,771 Industrias Klabin de Papel e Celulose, S.A. 52,376
200,000 Itausa - Investimentos Itau, S.A. 157,634
5,248,000 Petroleo Brasileiro, S.A. (PETROBRAS) 679,171
20,467,492 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 1,519,577
1,441,700 Telecomunicacoes de Sao Paulo, S.A. (TELESP) 263,734
97,000,000 Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS) 101,936
------------
TOTAL BRAZIL (Cost: $4,616,363) 5,872,973
------------
SOUTH KOREA (Cost: $56,779) (0.1%)
670 Samsung Electronics Company, Limited,
(Non-Voting Preferred Shares) 46,985
------------
TOTAL PREFERRED STOCK (Cost: $4,673,142) (10.3%) 5,919,958
------------
TOTAL EQUITY SECURITIES (Cost: $52,189,393) (95.4%) 54,993,403
------------
</TABLE>
See accompanying Notes to Financial Statements.
47
<PAGE>
TCW Galileo Emerging Markets Fund
SCHEDULE OF INVESTMENTS (Continued)
- ----------------------------------
<TABLE>
<CAPTION>
Principal
Amount CONVERTIBLE SECURITIES Value
----------- ---------------------- ------------
<S> <C> <C>
INDIA (Cost: $274,000) (0.5%)
$ 274,000 Mahindra & Mahindra, Limited (144A), Convertible
Bond, 5%, due 07/09/01 $ 284,960 *
------------
PHILIPPINES (Cost: $341,000) (0.5%)
350,000 Bacnotan Consolidated Industries Inc., Convertible
Bond, 5.5%, due 06/21/04 304,500
------------
TAIWAN (0.8%)
130,000 Far East Department Store, Limited, Convertible
Bond, 3%, due 07/06/02 139,100
265,000 United Microelectric Corporation, Limited (144A),
Convertible Bond, 1.25%, due 08/06/04 321,975 *
------------
TOTAL TAIWAN (Cost: $467,532) 461,075
------------
TOTAL CONVERTIBLE SECURITIES (Cost: $1,082,532) (1.8%) 1,050,535
------------
SHORT-TERM INVESTMENTS (Cost: $1,365,989) (2.4%)
------------------------------------------------
1,365,989 Bank of New York Depositary Reserve, 4.4%,
due 11/01/96 1,365,989
------------
TOTAL INVESTMENTS (Cost: $54,637,914) (99.6%) 57,409,927
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.4%) 229,291
------------
NET ASSETS (100%) $ 57,639,218
------------
------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
48
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Latin America Equity Fund
October 31, 1996
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
------------- ----------------- ------------
<S> <C> <C>
COMMON STOCK
------------
ARGENTINA (9.6% of Net Assets)
173,630 Astra Compania Argentina de Petroleo, S.A. $ 312,566
17,240 Banco Frances del Rio de la Plata, S.A. (ADR) 452,550
19,297 Banco de Galicia y Buenos Aires, S.A. (ADR) 349,758
22,000 Compania Interamericana de Automoviles, S.A. 98,570
374,988 Compania Naviera Perez Companc, S.A.C.I.M.F.A. 2,381,412
36,803 IRSA Inversiones y Representaciones, S.A. 112,628
58,916 Molinos Rio de la Plata, S.A. 185,604
13,060 Siderar, S.A. (144A) (ADR) 277,525 *
284,800 Siderca, S.A., Series A 452,877
19,400 Telecom Argentina STET - France Telecom, S.A.,
Series B 73,242
5,225 Telecom Argentina STET - France Telecom, S.A.,
Series B (ADR) 197,244
23,540 Telefonica de Argentina, Sociedad Anonima,
Series B (ADR) 547,305
16,455 TRANSPORTADORA DE GAS DEL SUR, S.A. (ADR) 191,289
40,470 Yacimientos Petroliferos Fiscales Sociedad del Estado,
Series D (ADR) 920,693
------------
TOTAL ARGENTINA (Cost: $5,465,756) 6,553,263
------------
BRAZIL (3.8%)
3,035,033 CENTRAIS ELETRICAS BRASILEIRAS, S.A. (ELETROBRAS) 942,080
34,300,000 Companhia Paranaense de Energia (COPEL) 353,780
20,000,000 Companhia Siderurgica Nacional 496,254
1,877,900 Light Participacoes, S.A. 295,472
15,400 Multicanal Participacoes, S.A. (ADR) 215,600
5,200,000 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 316,746
------------
TOTAL BRAZIL (Cost: $2,482,450) 2,619,932
------------
CHILE (13.9%)
12,960 Banco BHIF (ADR) 233,280
10,300 Chilectra, S.A. (144A) (ADR) 552,338 *
11,240 Chilgener, S.A. (ADR) 254,305
13,600 Compania Cervecerias Unidas, S.A. (ADR) 275,400
10,240 Compania de Telecomunicaciones de Chile, S.A.,
Series A (ADR) 1,009,920
30,500 Embotelladora Andina, S.A. (ADR) 1,052,250
34,400 Empresa Nacional de Electricidad, S.A. (ADR) 632,100
43,432 Enersis, S.A. (ADR) 1,275,814
20,280 Genesis Chile Fund, Limited 841,620
24,700 Madeco, S.A. (ADR) 592,800
9,013 Maderas y Sinteticos, S.A. (MASISA) (ADR) 128,435
25,725 Santa Isabel (ADR) 723,516 **
10,370 Sociedad Quimica y Minera de Chile, S.A., Series B (ADR) 596,275
458,000 The Five Arrows Chile Investment Trust, Limited 1,339,650
------------
TOTAL CHILE (Cost: $9,415,446) 9,507,703
------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing
See accompanying Notes to Financial Statements.
49
<PAGE>
TCW Galileo Latin America Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
------------- ----------------- ------------
<S> <C> <C>
COLOMBIA (2.6%)
48,000 Almacenes Exito, S.A. $ 129,730
71,885 Banco de Bogota 438,937
16,870 Banco Industrial Colombiano (ADR) 312,095
18,900 Cementos Diamante, S.A. (144A) (ADS) 264,600 *
30,828 Compania de Cemento Argos, S.A. 166,638
29,358 Compania Nacional de Chocolates, S.A. 246,854
11,000 Compania Suramericana de Seguros, S.A. 203,704
------------
TOTAL COLOMBIA (Cost: $2,204,241) 1,762,558
------------
MEXICO (26.9%)
98,500 Apasco, S.A. de C.V. 604,825
488,800 Cemex, S.A. de C.V., Series B 1,770,216
1,163,640 Cifra, S.A. de C.V., Series C 1,501,941
38,630 Corporacion Geo, S.A. de C.V., Series B 174,271
13,290 Corporacion Industrial San Luis, S.A. de C.V. 67,116
98,300 DESC, S.A. de C.V., Series B 485,341
32,800 Empresas ICA Sociedad Controladora, S.A. de C.V. (ADR) 426,400
40,200 Empresas La Moderna, S.A. de C.V. (ADR) 723,600
126,900 Fomento Economica Mexicano, S.A. de C.V., Series B 388,015
188,300 GRUPO CARSO, S.A. de C.V., Series A1 861,272 **
144,100 Grupo Cementos Chihuahua, S.A. de C.V., Series B 162,519
275,440 Grupo Financiero Inbursa, S.A. de C.V., Series B 897,424
391,590 Grupo Industrial Alfa, S.A. de C.V., Series A 1,643,893
118,600 Grupo Industrial Bimbo, S.A. de C.V., Series A 593,743
9,858 Grupo Industrial Maseca, S.A. de C.V. (ADR) 179,909
83,700 Grupo Modelo, S.A. de C.V., Series C 436,855
36,040 Grupo Televisa, S.A. de C.V. (ADR) 946,050
134,700 Jugos del Valle, S.A. de C.V., Series B 186,352 **
108,800 Kimberly-Clark de Mexico, S.A. de C.V., Series A 2,113,283
109,645 Telefonos de Mexico, S.A. de C.V. (ADR) 3,344,173
14,500 Transportacion Maritima Mexicana, S.A. de C.V.,
Series A (ADR) 83,375
69,282 Tubos de Acero de Mexico, S.A. de C.V. (ADR) 770,761
------------
TOTAL MEXICO (Cost: $17,809,244) 18,361,334
------------
PANAMA (Cost: $370,948) (0.6%)
9,450 Panamerican Beverages, Inc. (ADR) 412,256
------------
PERU (4.7%)
242,000 Cementos Lima, S.A., Class T 335,483
426,449 Cerveceria Backus y Johnston, S.A., Class T 431,763
46,646 Compania de Minas Buenaventura, S.A. 363,832
11,661 Compania de Minas Buenaventura, S.A., Series B 99,445
11,400 Compania de Minas Buenaventura, S.A. (ADR) 190,950
503,153 CPT - Telefonica del Peru, S.A., Series B 1,069,787
8,400 CPT - Telefonica del Peru, S.A. (ADR) 173,250
31,265 Credicorp, Limited (ADR) 547,138
------------
TOTAL PERU (Cost: $2,946,250) 3,211,648
------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing
See accompanying Notes to Financial Statements.
50
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
----------- ----------------- ------------
<S> <C> <C>
VENEZUELA (1.1%)
436,316 C.A. La Eletricidad de Caracas, S.A.C.A. $ 477,452
17,500 Mavesa (144A) 109,375 *
36,800 Siderurgica Venezolana Sivensa, Saica S.A.C.A. (ADR) 122,360
2,509 Siderurgica Venezolana Sivensa, Saica S.A.C.A.,
Series B (144A) (ADR) 8,280 *
------------
TOTAL VENEZUELA (Cost: $569,987) 717,467
------------
TOTAL COMMON STOCK (Cost: $41,264,322) (63.2%) 43,146,161
------------
PREFERRED STOCK
---------------
BRAZIL (35.9%)
56,400 Aracruz Celulose, S.A. (ADR) 451,200
168,131,638 Banco Bradesco, S.A. 1,433,135
1,203,700 Banco Itau, S.A. 521,209
1,097,000 Brasmotor, S.A. 372,534
7,601,180 CENTRAIS ELETRICAS BRASILEIRAS, S.A.,
Series B (ELETROBRAS) 2,462,969
4,005,784 Companhia Cervejaria Brahma 2,475,112
403,000 Companhia Cimento Portland Itau 105,877
1,199,400 Companhia de Tecidos Norte de Minas, S.A. (COTEMINAS) 402,640
14,300 COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) (ADR) 452,238
10,237 COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) (144A) (ADR) 323,745 *
91,442 Compania Vale do Rio Doce 1,895,217
244,000 Industrias Klabin de Papel e Celulose, S.A. 242,172
813,000 Itausa - Investimentos Itau, S.A. 640,780
17,428,000 Petroleo Brasiliero, S.A. (PETROBRAS) 2,255,448
72,653,207 Refrigeracao Parana, S.A. 176,737
63,145,257 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 4,688,122
53,625 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) (ADR) 3,995,063
5,803,800 Telecomunicacoes de Sao Paulo, S.A. (TELESP) 1,061,705
7,040,000 Uniao de Bancos Brasileiros (UNIBANCO) 195,232
383,000,000 Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS) 402,491
------------
TOTAL PREFERRED STOCK (Cost: $18,837,506) 24,553,626
------------
TOTAL EQUITY SECURITIES (Cost: $60,101,828) (99.1%) 67,699,787
------------
Principal
Amount SHORT-TERM INVESTMENTS (Cost: $1,105,739) (1.6%)
----------- -----------------------------------------------
$ 1,105,739 Bank of New York Depositary Reserve, 4.4%,
due 11/01/96 1,105,739
------------
TOTAL INVESTMENTS (Cost: $61,207,567) (100.7%) 68,805,526
EXCESS OF LIABILITIES OVER OTHER ASSETS (-0.7%) (482,733)
------------
NET ASSETS (100%) $ 68,322,793
------------
------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
51
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
<TABLE>
<CAPTION>
TCW Galileo
Money Market
Fund
--------------
<S> <C>
ASSETS
Investments, at Value (1) $ 233,669
Receivables for Fund Shares Sold ---
Receivables for Securities Sold ---
Accrued Interest and Dividends Receivable 1,237
Deferred Organization Costs ---
------------
Total Assets 234,906
------------
LIABILITIES
Payable for Fund Shares Redeemed ---
Distributions Payable 1,080
Payable for Securities Purchased ---
Management Fees and Other Accrued Expenses 155
------------
Total Liabilities 1,235
------------
NET ASSETS $ 233,671
------------
------------
NET ASSETS CONSIST OF:
Paid-in Capital $ 233,671
Undistributed (Overdistributed) Net Realized
Gain (Loss) on Investments and Foreign Currency Transactions ---
Unrealized Appreciation (Depreciation) on Investments
and Foreign Currency Translations ---
Undistributed (Overdistributed) Net Investment Income (Loss) ---
------------
NET ASSETS $ 233,671
------------
------------
CAPITAL SHARES OUTSTANDING 233,671,103
NET ASSET VALUE PER SHARE $ 1.00
------------
------------
</TABLE>
(1) The identified cost for the TCW Galileo Money Market Fund, the TCW Galileo
High Grade Fixed Income Fund, the TCW Galileo High Yield Bond Fund, the TCW
Galileo Mortgage Backed Securities Fund and the TCW Galileo Long-Term Mortgage
Backed Securities Fund at October 31, 1996, was $233,669, $24,449, $171,101,
$63,240, and $110,824, respectively.
See accompanying Notes to Financial Statements.
52
<PAGE>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
(Except per Share Amounts)
October 31, 1996
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo Long-Term
High Grade High Yield Mortgage Backed Mortgage Backed
Fixed Income Fund Bond Fund Securities Fund Securities Fund
----------------- ------------- --------------- ---------------------
<S> <C> <C> <C>
$ 24,852 $ 174,837 $ 61,657 $ 112,092
--- 6,700 --- ---
--- 3,337 68 220
317 4,848 486 707
13 13 13 16
---------- ----------- ---------- -----------
25,182 189,735 62,224 113,035
---------- ----------- ---------- -----------
--- 81 --- ---
132 1,405 320 675
--- 4,233 --- ---
44 201 69 100
---------- ----------- ---------- -----------
176 5,920 389 775
---------- ----------- ---------- -----------
$ 25,006 $ 183,815 $ 61,835 $ 112,260
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
$ 27,469 $ 182,656 $ 69,954 $ 111,300
(3,458) (2,685) (5,377) (96)
403 3,736 (1,583) 1,268
592 108 (1,159) (212)
---------- ----------- ---------- -----------
$ 25,006 $ 183,815 $ 61,835 $ 112,260
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
2,647,256 $18,805,505 6,397,767 11,740,591
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
$ 9.45 $ 9.77 $ 9.67 $ 9.56
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
</TABLE>
53
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (Continued)
- -----------------------------------------------
<TABLE>
<CAPTION>
TCW TCW Galileo
Galileo Core Earnings Momentum
Equity Fund Fund
------------ -----------------
<S> <C> <C>
ASSETS
Investments, at Value (1) $ 230,789 $ 76,642
Receivables for Fund Shares Sold 1,858 ---
Receivables for Securities Sold 669 1,806
Accrued Interest and Dividends Receivable 175 22
Deferred Organization Costs 13 2
------------ ------------
Total Assets 233,504 78,472
------------ ------------
LIABILITIES
Payables for Fund Shares Redeemed 663 ---
Payables for Securities Purchased 1,353 365
Management Fees and Other Accrued Expenses 186 113
------------ ------------
Total Liabilities 2,202 478
------------ ------------
NET ASSETS $ 231,302 $ 77,994
------------ ------------
------------ ------------
NET ASSETS CONSIST OF:
Paid-in Capital $ 168,043 $ 60,742
Undistributed (Overdistributed) Net Realized Gain (Loss)
on Investments and Foreign Currency Transactions 2,814 6,437
Unrealized Appreciation (Depreciation) on Investments
and Foreign Currency Translations 60,170 11,591
Undistributed (Overdistributed) Net Investment Income (Loss) 275 (776)
------------ ------------
NET ASSETS $ 231,302 $ 77,994
------------ ------------
------------ ------------
CAPITAL SHARES OUTSTANDING 14,516,490 5,993,968
------------ ------------
------------ ------------
NET ASSET VALUE PER SHARE $ 15.93 $ 13.01
------------ ------------
------------ ------------
</TABLE>
(1) The identified cost for the TCW Galileo Core Equity Fund, the TCW Galileo
Earnings Momentum Fund, the TCW Galileo Mid-Cap Growth Fund, the TCW Galileo
Small Cap Growth Fund, the TCW Galileo Asia Pacific Equity Fund, the TCW Galileo
Emerging Markets Fund and the TCW Galileo Latin America Equity Fund at October
31, 1996 was $170,619, $65,051, $72,869, $86,582, $42,799, $54,638, and $61,208,
respectively.
See accompanying Notes to Financial Statements.
54
<PAGE>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
(Except per Share Amounts)
October 31, 1996
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo TCW Galileo
Mid-Cap Small Cap Asia Pacific Emerging Markets Latin America
Growth Fund Growth Fund Equity Fund Fund Equity Fund
----------- ------------ ------------ ---------------- -------------
<S> <C> <C> <C> <C>
$ 92,795 $ 130,288 $ 48,820 $ 57,410 $ 68,806
--- --- --- --- 45
--- 2,692 96 507 ---
17 25 55 59 42
2 5 4 5 13
----------- ------------ ----------- ----------- -----------
92,814 133,010 48,975 57,981 68,906
----------- ------------ ----------- ----------- -----------
250 15 456 --- ---
--- 374 152 222 444
134 177 101 120 139
----------- ------------ ----------- ----------- -----------
384 566 709 342 583
----------- ------------ ----------- ----------- -----------
$ 92,430 $ 132,444 $ 48,266 $ 57,639 $ 68,323
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
$ 75,424 $ 88,386 $ 42,035 $ 63,830 $ 91,299
(2,649) 1,694 (122) (9,522) (31,534)
19,926 43,706 6,021 2,772 7,598
(271) (1,342) 332 559 960
----------- ------------ ----------- ----------- -----------
$ 92,430 $ 132,444 $ 48,266 $ 57,639 $ 68,323
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
10,060,381 7,712,966 5,022,526 7,047,564 6,828,623
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
$ 9.19 $ 17.17 $ 9.61 $ 8.18 $ 10.01
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
</TABLE>
55
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
<TABLE>
<CAPTION>
TCW Galileo
Money Market
Fund
------------
INVESTMENT INCOME
<S> <C>
Income:
Interest $ 9,902
------------
Expenses:
Management Fees 455
Custodian Fees 31
Registration Fees 39
Transfer Agent Fees 45
Directors' Fees and Expenses 9
Audit and Tax Fees 27
Accounting Service Fees 182
Amortization of Deferred Organization Costs --
Other 5
------------
Total Expenses 793
Less Expenses Borne by Investment Adviser 65
------------
Net Expenses 728
------------
Net Investment Income 9,174
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions During the Year --
Change in Unrealized Appreciation (Depreciation)
on Investments and Foreign Currency
Translations During the Year --
------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency During the Year --
------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 9,174
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
56
<PAGE>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
Year Ended October 31, 1996
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo Long-Term
High Grade Fixed High Yield Mortgage Backed Mortgage Backed
Income Fund Bond Fund Securities Fund Securities Fund
---------------- ----------- --------------- ---------------------
<S> <C> <C> <C>
$ 2,102 $ 12,518 $ 4,470 $ 6,471
----------- ---------- ------------ ------------
127 928 373 413
5 13 11 9
1 30 1 8
32 42 33 36
9 9 9 9
14 14 18 19
35 35 35 35
10 10 10 10
10 37 21 20
----------- ---------- ------------ ------------
243 1,118 511 559
--- --- --- ---
----------- ---------- ------------ ------------
243 1,118 511 559
----------- ---------- ------------ ------------
1,859 11,400 3,959 5,912
----------- ---------- ------------ ------------
165 (1,228) (861) 466
(887) 2,582 2,487 827
----------- ---------- ------------ ------------
(722) 1,354 1,626 1,293
----------- ---------- ------------ ------------
$ 1,137 $ 12,754 $ 5,585 $ 7,205
----------- ---------- ------------ ------------
----------- ---------- ------------ ------------
</TABLE>
57
<PAGE>
STATEMENTS OF OPERATIONS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
TCW TCW Galileo
Galileo Core Earnings Momentum
Equity Fund Fund
-------------- -----------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 1,948 $ 92
Interest 115 141
------------- ---------------
Total 2,063 233
------------- ---------------
Expenses:
Management Fees 1,549 742
Custodian Fees 17 21
Registration Fees --- ---
Transfer Agent Fees 43 24
Directors' Fees and Expenses 9 9
Audit and Tax Fees 14 14
Accounting Service Fees 35 35
Amortization of Deferred
Organization Costs 10 1
Other 7 ---
------------- ---------------
Total Expenses 1,684 846
Less Expenses Borne by
Investment Adviser --- 5
------------- ---------------
Net Expenses 1,684 841
------------- ---------------
Net Investment Income (Loss) 379 (608)
------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain (Loss) on
Investments and Foreign Currency
Transactions During the Year 11,808 6,438
Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Translations During
the Year 19,564 2,416
------------- ---------------
Net Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency During the Year 31,372 8,854
------------- ---------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 31,751 $ 8,246
------------- ---------------
------------- ---------------
</TABLE>
See accompanying Notes to Financial Statements.
58
<PAGE>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
Year Ended October 31, 1996
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo TCW Galileo
Mid-Cap Small Cap Asia Pacific Emerging Markets Latin America
Growth Fund/(2)/ Growth Fund Equity Fund Fund Equity Fund
---------------- ------------ ------------- ---------------- --------------
<S> <C> <C> <C> <C>
$ 114 $ 113 $ 926/(1)/ $ 1,043/(1)/ $ 1,515/(1)/
21 298 93 165 58
------------ ------------ ------------ ------------ ------------
135 411 1,019 1,208 1,573
------------ ------------ ------------ ------------ ------------
338 1,101 490 541 614
6 25 120 132 154
29 16 1 1 7
14 37 25 25 30
5 9 9 9 9
17 14 14 14 14
15 35 35 35 35
--- 2 3 2 10
4 11 2 6 12
------------ ------------ ------------ ------------ ------------
428 1,250 699 765 885
22 --- --- --- ---
------------ ------------ ------------ ------------ ------------
406 1,250 699 765 885
------------ ------------ ------------ ------------ ------------
(271) (839) 320 443 688
------------ ------------ ------------ ------------ ------------
(2,649) 1,368 1,060 (902) (3,423)
(2,861) 22,379 3,103 6,769 14,716
------------ ------------ ------------ ------------ ------------
(5,510) 23,747 4,163 5,867 11,293
------------ ------------ ------------ ------------ ------------
$ (5,781) $ 22,908 $ 4,483 $ 6,310 $ 11,981
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
(1) Net of foreign taxes withheld of $74, $87 and $120 for TCW Galileo
Asia Pacific Equity Fund, TCW Galileo Emerging Markets Fund and TCW Galileo
Latin America Equity Fund, respectively.
(2) For the period June 3, 1996 (commencement of operations) through
October 31, 1996.
59
<PAGE>
TCW Galileo Money Market Fund
- -----------------------------
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 9,174 $ 6,660
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment
Income (9,174) (6,660)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,034,355,297 shares in 1996 and
666,989,130 shares in 1995) 1,034,355 666,989
Proceeds from Shares Issued upon
Reinvestment of Dividends (4,792,741
shares in 1996 and 4,274,516
shares in 1995) 4,793 4,274
Cost of Shares Redeemed
(891,779,229 shares in 1996 and
709,352,932 shares in 1995) (891,779) (709,353)
--------------- ---------------
Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 147,369 (38,090)
--------------- ---------------
Increase (Decrease) in Net Assets 147,369 (38,090)
NET ASSETS
Beginning of Year 86,302 124,392
--------------- ---------------
End of Year $ 233,671 $ 86,302
--------------- ---------------
--------------- ---------------
</TABLE>
60
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo High Grade Fixed Income Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 1,859 $ 2,285
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions 165 (1,514)
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations (887) 3,904
----------- -----------
Increase in Net Assets Resulting from Operations 1,137 4,675
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (1,844) (2,147)
----------- -----------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,277,842 shares in 1996 and 2,119,508 shares
in 1995) 12,275 19,224
Proceeds from Shares Issued upon Reinvestment
of Dividends (169,477 shares in 1996 and 189,055
shares in 1995) 1,595 1,718
Cost of Shares Redeemed
(2,570,171 shares in 1996 and 4,148,031
shares in 1995) (24,393) (37,387)
----------- -----------
(Decrease) in Net Assets Resulting from
Capital Share Transactions (10,523) (16,445)
----------- -----------
(Decrease) in Net Assets (11,230) (13,917)
NET ASSETS
Beginning of Year 36,236 50,153
----------- -----------
End of Year $ 25,006 $ 36,236
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Financial Statements.
61
<PAGE>
TCW Galileo High Yield Bond Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
OPERATIONS
<S> <C> <C>
Net Investment Income $ 11,400 $ 9,064
Net Realized (Loss) on Investments (1,228) (1,241)
Change in Unrealized Appreciation
on Investments 2,582 5,286
------------ ------------
Increase in Net Assets Resulting
from Operations 12,754 13,109
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (11,413) (9,725)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(13,695,295 shares in 1996 and 4,675,533
shares in 1995) 132,706 44,410
Proceeds from Shares Issued upon
Reinvestment of Dividends (795,733 shares
in 1996 and 753,663 shares in 1995) 7,704 7,155
Cost of Shares Redeemed
(5,199,280 shares in 1996 and 5,518,004
shares in 1995) (50,588) (52,874)
------------ ------------
Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 89,822 (1,309)
------------ ------------
Increase in Net Assets 91,163 2,075
NET ASSETS
Beginning of Year 92,652 90,577
------------ ------------
End of Year $ 183,815 $ 92,652
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
62
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mortgage Backed Securities Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 3,959 $ 7,031
Net Realized (Loss) on Investments (861) (4,070)
Change in Unrealized Appreciation
on Investments 2,487 6,177
------------- -------------
Increase in Net Assets Resulting
from Operations 5,585 9,138
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment
Income (3,794) (7,576)
Distributions in Excess of Net
Investment Income (1,159) (165)
------------- -------------
Total Distributions to
Shareholders (4,953) (7,741)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(5,564,984 shares in 1996 and
1,303,201 shares in 1995) 53,480 12,379
Proceeds from Shares Issued upon
Reinvestment of Dividends (453,325
shares in 1996 and 779,171 shares in 1995) 4,350 7,325
Cost of Shares Redeemed
(8,115,490 shares in 1996 and 7,928,897
shares in 1995) (77,993) (74,683)
------------- -------------
(Decrease) in Net Assets Resulting from
Capital Share Transactions (20,163) (54,979)
------------- -------------
(Decrease) in Net Assets (19,531) (53,582)
NET ASSETS
Beginning of Year 81,366 134,948
------------- -------------
End of Year $ 61,835 $ 81,366
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
63
<PAGE>
TCW Galileo Long-Term Mortgage Backed Securities Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 5,912 $ 5,561
Net Realized Gain (Loss) on
Investments 466 (531)
Change in Unrealized Appreciation
on Investments 827 6,062
------------- -------------
Increase in Net Assets Resulting
from Operations 7,205 11,092
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment
Income (5,934) (6,263)
Distributions in Excess of Net
Investment Income (212) ---
------------- -------------
Total Distributions to
Shareholders (6,146) (6,263)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(5,357,272 shares in 1996 and 1,550,163
shares in 1995) 50,184 14,209
Proceeds from Shares Issued upon
Reinvestment of Dividends (570,644 shares
in 1996 and 681,560 shares in 1995) 5,384 6,205
Cost of Shares Redeemed
(2,572,042 shares in 1996 and 1,293,849
shares in 1995) (24,526) (11,716)
------------- -------------
Increase in Net Assets Resulting from
Capital Share Transactions 31,042 8,698
------------- -------------
Increase in Net Assets 32,101 13,527
NET ASSETS
Beginning of Year 80,159 66,632
------------- -------------
End of Year $ 112,260 $ 80,159
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
64
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Core Equity Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 379 $ 781
Net Realized Gain (Loss) on Investments 11,808 (5,733)
Change in Unrealized Appreciation on
Investments 19,564 33,993
------------- -------------
Increase in Net Assets Resulting
from Operations 31,751 29,041
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (722) (543)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(3,809,396 shares in 1996 and 7,935,518
shares in 1995) 57,075 94,454
Proceeds from Shares Issued upon Reinvest-
ment of Dividends (39,376 shares in
1996 and 40,364 shares in 1995) 539 437
Cost of Shares Redeemed
(3,778,090 shares in 1996 and 5,300,160
shares in 1995) (55,062) (61,790)
------------- -------------
Increase in Net Assets Resulting from
Capital Share Transactions 2,552 33,101
------------- -------------
Increase in Net Assets 33,581 61,599
NET ASSETS
Beginning of Year 197,721 136,122
------------- -------------
End of Year $ 231,302 $ 197,721
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
65
<PAGE>
TCW Galileo Earnings Momentum Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss) $ (608) $ (146)
Net Realized Gain on Investments 6,438 368
Change in Unrealized Appreciation
on Investments 2,416 7,003
------------- -------------
Increase in Net Assets Resulting
from Operations 8,246 7,225
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions in Excess of
Net Investment Income -- (22)
Distributions From Net Realized Gains (369) --
------------- -------------
Total Distributions to
Shareholders (369) (22)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon exchange of Limited
Partnership Interests (4,059,985 shares
in 1995) -- 40,600
Proceeds from Shares Sold
(1,440,632 shares in 1996 and 3,047,975
shares in 1995) 19,079 31,464
Proceeds from Shares Issued upon
Reinvestment of Dividends
(26,564 shares in 1996 and 2,265 shares
in 1995) 357 21
Cost of Shares Redeemed
(1,002,762 shares in 1996 and 1,580,691
shares in 1995) (12,730) (15,877)
------------- -------------
Increase in Net Assets Resulting from
Capital Share Transactions 6,706 56,208
------------- -------------
Increase in Net Assets 14,583 63,411
NET ASSETS
Beginning of Year 63,411 --
------------- -------------
End of Year $ 77,994 $ 63,411
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
66
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mid-Cap Growth Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
June 3, 1996
(Commencement of
Operations) through
October 31, 1996
-------------------
<S> <C>
OPERATIONS
Net Investment (Loss) $ (271)
Net Realized (Loss) on Investments (2,649)
Change in Unrealized (Depreciation) on Investments (2,861)
------------
(Decrease) in Net Assets Resulting from Operations (5,781)
------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon Exchange of Limited Partnership
Interests (6,603,028 shares) (Note 1) 66,030
Proceeds from Shares Sold (3,972,481 shares) 36,973
Cost of Shares Redeemed (515,128 shares) (4,792)
------------
Increase in Net Assets Resulting from
Capital Share Transactions 98,211
------------
Increase in Net Assets 92,430
NET ASSETS
Beginning of Period ---
------------
End of Period $ 92,430
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
67
<PAGE>
TCW Galileo Small-Cap Growth Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss) $ (839) $ (268)
Net Realized Gain on Investments 1,368 4,011
Change in Unrealized Appreciation
on Investments 22,379 13,475
------------- -------------
Increase in Net Assets Resulting
from Operations 22,908 17,218
------------- -------------
DISTRIBUTION TO SHAREHOLDERS
Distributions from Net Investment Income (98) ---
Distributions from Net Realized Gains (1,514) (2,137)
------------- -------------
Total Distributions to Shareholders (1,612) (2,137)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(3,841,344 shares in 1996 and 1,983,967 shares in 1995) 62,195 23,244
Proceeds from Shares Issued upon Reinvestment of Dividends
(109,774 shares in 1996 and 163,629 shares in 1995) 1,531 2,073
Cost of Shares Redeemed
(1,121,510 shares in 1996 and 2,704,761 shares in 1995) (18,634) (25,431)
------------- -------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions 45,092 (114)
------------- -------------
Increase in Net Assets 66,388 14,967
NET ASSETS
Beginning of Year 66,056 51,089
------------- -------------
End of Year $ 132,444 $ 66,056
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
68
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Asia Pacific Equity Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 320 $ 328
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions 1,060 (612)
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations 3,103 (5,846)
------------- -------------
Increase (Decrease) in Net Assets Resulting from Operations 4,483 (6,130)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (242) (218)
Distributions from Net Realized Gains --- (676)
Distributions in Excess of Net Realized Gains --- (1,182)
------------- -------------
Total Distributions to Shareholders (242) (2,076)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,653,606 shares in 1996 and 1,755,040 shares in 1995) 15,972 15,396
Proceeds from Shares Issued Upon Reinvestment of Dividends
(24,113 shares in 1996 and 234,996 shares in 1995) 232 2,014
Cost of Shares Redeemed
(2,040,994 shares in 1996 and 1,905,568 shares in 1995) (18,888) (16,514)
------------- -------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions (2,684) 896
------------- -------------
Increase (Decrease) in Net Assets 1,557 (7,310)
NET ASSETS
Beginning of Year 46,709 54,019
------------- -------------
End of Year $ 48,266 $ 46,709
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
69
<PAGE>
TCW Galileo Emerging Markets Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 443 $ 298
Net Realized (Loss) on Investments and
Foreign Currency Transactions (902) (7,843)
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations 6,769 (11,550)
------------- -------------
Increase in Net Assets Resulting from Operations 6,310 19,095
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (151) ---
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(2,488,039 shares in 1996 and 2,180,661 shares in 1995) 20,122 17,546
Proceeds from Shares Issued Upon Reinvestment of Dividends
(17,923 shares in 1996) 135 ---
Cost of Shares Redeemed
(2,676,057 shares in 1996 and 2,181,253 shares in 1995) (20,650) (16,790)
------------- -------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions (393) 756
------------- -------------
Increase (Decrease) in Net Assets 5,766 (18,339)
NET ASSETS
Beginning of Year 51,873 70,212
------------- -------------
End of Year $ 57,639 $ 51,873
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
70
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Latin America Equity Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Oct. 31, 1996 Oct. 31, 1995
------------- -------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 688 $ 356
Net Realized (Loss) on Investments and
Foreign Currency Transactions (3,423) (27,909)
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations 14,716 (21,001)
------------- -------------
Increase (Decrease) in Net Assets Resulting from Operations 11,981 (48,554)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (192) ---
Distributions in Excess of Net Realized Gains --- (9,447)
------------- -------------
Total Distributions to Shareholders (192) (9,447)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(3,090,695 shares in 1996 and 467,985 shares in 1995) 27,546 4,319
Proceeds from Shares Issued upon Reinvestment of Dividends
(5,047 shares in 1996 and 867,090 shares in 1995) 43 8,922
Cost of Shares Redeemed
(1,181,839 shares in 1996 and 4,601,924 shares in 1995) (9,997) (38,908)
------------- -------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions 17,592 (25,667)
------------- -------------
Increase (Decrease) in Net Assets 29,381 (83,668)
------------- -------------
NET ASSETS
Beginning of Year 38,942 122,610
------------- -------------
End of Year $ 68,323 $ 38,942
------------- -------------
------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
71
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
Note 1 - Organization
TCW Galileo Funds, Inc., a Maryland corporation (the "Company"), is an open-end
management investment company registered under the Investment Company Act of
1940, as amended, that currently offers a selection of twelve no-load mutual
funds known as the TCW Galileo Funds (the "Funds"). TCW Funds Management, Inc.
(the "Adviser") is the investment adviser to the Funds, as well as the
administrator of their day-to-day operations. TCW Asia Limited and TCW London
International, Limited are sub-advisers for the TCW Galileo Emerging Markets
Fund and TCW Asia Limited is a sub-adviser to the TCW Galileo Asia Pacific
Equity Fund. The advisers are registered under the Investment Advisers Act of
1940. Each Fund has distinct investment objectives and policies. There is one
diversified money market fund (the TCW Galileo Money Market Fund), four
diversified bond funds (the TCW Galileo High Grade Fixed Income Fund, the TCW
Galileo High Yield Bond Fund, the TCW Galileo Mortgage Backed Securities Fund
and the TCW Galileo Long-Term Mortgage Backed Securities Fund) and seven
non-diversified equity funds (the TCW Galileo Core Equity Fund, the TCW Galileo
Earnings Momentum Fund, the TCW Galileo Mid-Cap Growth Fund, the TCW Galileo
Small Cap Growth Fund, the TCW Galileo Asia Pacific Equity Fund, the TCW Galileo
Emerging Markets Fund, and the TCW Galileo Latin America Equity Fund) currently
offered by the Company. The TCW Galileo Mid-Cap Growth Fund commenced operations
on June 3, 1996, resulting from the exchange of limited partnership interest.
The assets and liabilities were transferred at historical cost from the limited
partnership to the Fund on June 3, 1996 and the fair value of which was
exchanged for shares of common stock of the Fund. The transfer was treated as a
tax-free exchange in accordance with the Internal Revenue Code.
The primary investment objective of each Fund follows: (1) the TCW Galileo Money
Market Fund seeks current income, preservation of capital and liquidity by
investing in short-term money market securities; (2) the TCW Galileo High Grade
Fixed Income Fund seeks capital appreciation and income through investment
principally in high grade fixed income securities emphasizing high quality and
liquid investments; (3) the TCW Galileo High Yield Bond Fund seeks high current
income through investment principally in high yield fixed income securities; (4)
the TCW Galileo Mortgage Backed Securities Fund seeks income by investing
primarily in short-term mortgage backed securities; (5) the TCW Galileo
Long-Term Mortgage Backed Securities Fund seeks income by investing primarily in
long-term mortgage backed securities; (6) the TCW Galileo Core Equity Fund
emphasizes capital appreciation and preservation with focus on long-term
results; (7) the TCW Galileo Earnings Momentum Fund seeks capital appreciation
through investment primarily in publicly-traded equity securities of companies
experiencing or expected to experience accelerating earnings growth; (8) the TCW
Galileo Mid-Cap Growth Fund seeks long-term capital appreciation, primarily by
investing in publicly-traded equity securities of medium capitalization
companies; (9) the TCW Galileo Small Cap Growth Fund seeks long-term capital
appreciation, primarily by investing in publicly-traded equity securities of
smaller capitalization companies; (10) the TCW Galileo Asia Pacific Equity Fund
seeks long-term capital appreciation, primarily by investing in equity
securities of companies in the Asia Pacific region; (11) the TCW Galileo
Emerging Markets Fund seeks long-term capital appreciation by investing in
equity securities of companies in emerging market countries around the world;
and (12) the TCW Galileo Latin America Equity Fund seeks long-term capital
appreciation, primarily by investing in Latin American equity securities.
Effective November 1, 1996, the TCW Galileo High Grade Fixed Income Fund was
named TCW Galileo Core Fixed Income Fund.
Note 2 - Significant Accounting Policies
Principles of Accounting: The Funds use the accrual method of accounting
for financial reporting purposes.
Security Valuations: The value of securities held in the TCW Galileo Money
Market Fund is determined by using the amortized cost method applied to each
individual security unless, due to special circumstances, the use of such a
method would result in a valuation that does not approximate fair market value.
Equity fund securities listed or traded on the New York, American or other stock
exchanges are valued at the latest sale price on that exchange (if there were no
sales that day, the security is valued at the latest bid price). All other
securities, including the bond fund securities, for which over-the-counter
market quotations are readily available, are valued at the latest bid price
prior to the time of valuation.
72
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
Securities for which 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, are valued at their fair
value as determined in good faith under procedures established by and under the
general supervision of the Company's Board of Directors.
Short-term debt securities with remaining maturities of 60 days or less at the
time of purchase are valued at amortized cost. Other short-term debt securities
are valued on a marked-to-market basis until such time as they reach a remaining
maturity of 60 days, whereupon they will be valued at amortized value using
their value on the 61st day prior to maturity.
Security Transactions and Related Investment Income: Security transactions are
recorded as of the trade date. Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis. Original issue discount
is accreted as interest income using a constant yield to maturity method. The
TCW Galileo High Yield Bond Fund recognizes as interest income discounts on
securities purchased at the time the security is sold. The TCW Galileo High
Grade Fixed Income Fund recognizes as interest income discounts on securities
purchased using a constant yield to maturity accretion method. TCW Galileo High
Grade Fixed Income Fund amortizes premiums as a reduction to interest for
securities purchased in excess of par value on a constant yield to maturity
amortization method. For all other Funds, premiums on securities purchased are
not amortized, except for mortgage backed obligations for which amortization has
been elected as allowed by federal income tax regulations. Realized and
unrealized gains and losses on investments are recorded on the basis of specific
identification.
Foreign Currency Translation: The books and records of each Fund are maintained
in U.S. dollars as follows: (1) the foreign currency market value of investment
securities, and other assets and liabilities stated in foreign currencies, are
translated using the daily spot rate; and (2) purchases, sales, income and
expenses are translated at the rate of exchange prevailing on the respective
dates of such transactions. The resultant exchange gains and losses are included
in the Statements of Operations with the related net realized gain (loss).
Pursuant to U.S. federal income tax regulations, certain foreign exchange gains
and losses included in realized and unrealized gains and losses are included in,
or are a reduction of, ordinary income for federal income tax purposes. It is
not practicable to separately identify that portion of gains and losses of the
Funds that arise as a result of changes in the exchange rates from the
fluctuations that arise from changes in market prices of investments during the
period.
Forward Foreign Currency Contracts: Certain Funds may enter into forward foreign
currency contracts as a hedge against fluctuations in foreign exchange rates.
Forward foreign currency contracts are marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
contract is closed or delivery is taken, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of the foreign currency relative to the U.S. dollar. The Funds have not entered
into any forward foreign currency contracts during the year ended October 31,
1996.
Dollar Roll Transactions: The Funds may enter into dollar roll transactions with
financial institutions to take advantage of opportunities in the mortgage backed
securities market. A dollar roll transaction involves a simultaneous sale by the
Fund of securities that it holds with an agreement to repurchase substantially
similar securities at an agreed upon price and date, but generally will be
collaterialized at time of delivery by different pools of mortgages with
different prepayment histories than those securities sold. These transactions
are accounted for as financing transactions as opposed to sales and purchases.
The differential between the sale price and the repurchase price is recorded as
deferred income and recognized between the settlement dates of the sale and
repurchase. During the period between the sale and repurchase, the Fund will not
be entitled to receive interest and principal payments on the securities sold.
Dollar roll transactions involve risk that the market value of the security sold
by the Fund may decline below the repurchase price of the security. There were
no such transactions outstanding as of October 31, 1996.
73
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- ----------------------------------------
Repurchase Agreements: The Funds may invest in repurchase agreements secured by
U.S. Government obligations and in other securities. Securities pledged as
collateral for repurchase agreements are held by the Funds' custodian bank until
maturity of the repurchase agreements. Provisions of the agreements ensure that
the market value of the collateral is sufficient in the event of default;
however, in the event of default or bankruptcy by the other party to the
agreements, realization and/or retention of the collateral may be subject to
legal proceedings.
Options: Premiums received from call options written are recorded as a
liability. The amount of the liability is subsequently adjusted to reflect the
current market value of the option written. If the option expires unexercised,
premiums received are realized as a gain at expiration date. If the position is
closed prior to expiration, a gain or loss is realized based on premiums
received, less the cost to close the option. When an option is exercised,
premiums received are added to the proceeds from the sale of the underlying
securities and a gain or loss is realized. Call options purchased are accounted
for in the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. There were
no option contracts entered into during the fiscal year ended October 31, 1996.
Deferred Organization Costs: For those Funds which commenced operations during
1993, organization costs of $50,000 per Fund have been deferred and are being
amortized on a straight line basis over a five-year period from the commencement
of operations of each Fund. Organization costs of $10,000 per Fund for the TCW
Galileo Small Cap Growth Fund, the TCW Galileo Asia Pacific Equity Fund and the
TCW Galileo Emerging Markets Fund have been deferred and are also being
amortized on a straight line basis over a five-year period from the commencement
of operations of each Fund. Organizational costs of approximately $3,800 and
$2,200 for the TCW Galileo Earnings Momentum Fund and TCW Galileo Mid-Cap Growth
Fund, respectively, have been deferred and are also being amortized on a
straight line basis over a five year period from the commencement of operations.
Upon formation of the Funds, the Company sold and issued to the Adviser 10,007
shares of common stock (one share each of the TCW Galileo Money Market Fund, the
TCW Galileo Small Cap Growth Fund, the TCW Galileo Earnings Momentum Fund, the
TCW Galileo Asia Pacific Equity Fund, the TCW Galileo Emerging Markets Fund, TCW
Galileo Long-Term Mortgage Backed Securities Fund and the TCW Galileo Mid-Cap
Growth Fund, and 2,000 shares each of the other five Funds, collectively the
"Initial Shares"). In the event the Adviser redeems any of its Initial Shares
from one or more of the Funds prior to the end of the five-year period, the
proceeds of the redemption payable in respect of such shares will be reduced by
any unamortized organization costs in the same ratio as the number of Initial
Shares being redeemed bears to the number of Initial Shares outstanding at the
time of the redemption.
Expense Allocation: Common expenses incurred by the Company are allocated among
the Funds based upon the ratio of net assets of each Fund to the combined net
assets of all the Funds. All other expenses are charged to each Fund as incurred
on a specific identification basis.
Net Asset Value: The Net Asset Value of each Fund's shares is determined by
dividing the net assets of the Fund by the number of issued and outstanding
shares on each business day as of 9:00 A.M. Pacific Time for the TCW Galileo
Money Market Fund and as of 1:00 P.M. Pacific Time for the other Funds.
Dividends and Distributions: Dividends from net investment income of the TCW
Galileo Money Market Fund are declared each business day. It is the policy of
the equity funds to declare and pay, or reinvest, dividends from net investment
income annually and the bond funds to declare and pay, or reinvest, dividends
from net investment income monthly. Distribution of any net long-term and net
short-term capital gains earned by a Fund will be distributed at least annually.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign currency
transactions, market discount, losses deferred to wash sales and excise tax
regulations. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may affect
net investment income per share. Undistributed net investment income may include
temporary book and tax basis differences which will reverse in a subsequent
period. Any taxable income or gain remaining at fiscal year end is distributed
in the following year.
74
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
Use of Estimates: The preparation of the accompanying financial statements
requires management to make estimates and assumptions that effect the reported
amount of assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual
results could differ from these estimates.
Note 3 -- Federal Income Taxes
It is the policy of each Fund to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its net taxable income, including any net realized gains on investments, to
its shareholders. Therefore, no federal income tax provision is required. At
October 31, 1996, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows:
<TABLE>
<CAPTION>
TCW TCW TCW TCW
Galileo High Galileo Galileo Galileo Long-Term
Grade Fixed High Yield Mortgage Backed Mortgage Backed
Income Fund Bond Fund Securities Fund Securities Fund
-------------- ------------ --------------- -----------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 480,064 $ 4,845,460 $ 519,613 $ 2,574,814
Unrealized (Depreciation) (100,160) (1,130,105) (2,102,984) (1,307,057)
------------- ------------ ------------ ------------
Net Unrealized Appreciation
(Depreciation) $ 379,904 $ 3,715,355 $ (1,583,371) $ 1,267,757
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Cost of Investments for Federal
Income Tax Purposes $ 24,472,560 $171,121,536 $ 63,239,984 $110,824,44
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
TCW TCW Galileo TCW Galileo TCW Galileo
Galileo Core Earnings Mid-Cap Small Cap
Equity Fund Momentum Fund Growth Fund Growth Fund
-------------- ------------- -------------- ----------------
Unrealized Appreciation $ 62,176,205 $ 16,733,281 $ 21,978,300 $ 49,081,082
Unrealized (Depreciation) (2,008,138) (5,142,184) (2,052,260) (5,434,041)
------------- ------------ ------------ ------------
Net Unrealized Appreciation $ 60,168,067 $ 11,591,097 $ 19,926,040 $ 43,647,041
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Cost of Investments for Federal
Income Tax Purposes $ 170,620,852 $ 65,051,220 $ 72,868,525 $ 86,640,535
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
TCW Galileo TCW Galileo TCW Galileo
Asia Pacific Emerging Latin America
Equity Fund Markets Fund Equity Fund
-------------- ------------- --------------
Unrealized Appreciation $ 8,257,817 $ 14,427,705 $ 10,458,425
Unrealized (Depreciation) (2,244,420) (11,723,375) (2,926,401)
------------- ------------ ------------
Net Unrealized Appreciation $ 6,013,397 $ 2,704,330 $ 7,532,024
------------- ------------ ------------
------------- ------------ ------------
Cost of Investments for Federal
Income Tax Purposes $ 42,806,450 $ 54,705,597 $ 61,303,202
------------- ------------ ------------
------------- ------------ ------------
</TABLE>
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- ----------------------------------------
At October 31, 1996, the following Funds had net realized loss carryforwards for
federal income tax purposes:
<TABLE>
<CAPTION>
Expiring in
------------------------------------------------------------
2002 2003 2004
-------------- ------------- -------------
<S> <C> <C> <C>
TCW Galileo High Grade Fixed Income Fund $ 1,977,000 $ 203,000 $ ---
TCW Galileo High Yield Bond Fund 243,700 1,213,000 1,228,000
TCW Galileo Mortgage Backed Securities Fund 446,000 4,070,000 861,000
TCW Galileo Long-Term Mortgage
Backed Securities Fund --- 109,000 109,000
TCW Galileo Mid-Cap Growth Fund --- --- 2,649,000
TCW Galileo Emerging Markets Fund 483,600 7,490,000 902,000
TCW Galileo Latin America Equity Fund --- 26,437,000 3,423,000
</TABLE>
Note 4 - Investment Advisory and Accounting Service Fees
The Funds pay to the Adviser, as compensation for services rendered, facilities
furnished and expenses borne by it, the following annual management fees:
TCW Galileo Money Market Fund 0.25%
TCW Galileo High Grade Fixed Income Fund 0.40%
TCW Galileo High Yield Bond Fund 0.75%
TCW Galileo Mortgage Backed Securities Fund 0.50%
TCW Galileo Long-Term Mortgage Backed Securities Fund 0.50%
TCW Galileo Core Equity Fund 0.75%
TCW Galileo Earnings Momentum Fund 1.00%
TCW Galileo Small Cap Growth Fund 1.00%
TCW Galielo Mid-Cap Growth Fund 1.00%
TCW Galileo Asia Pacific Equity Fund 1.00%
TCW Galileo Emerging Markets Fund 1.00%
TCW Galileo Latin America Equity Fund 1.00%
The TCW Galileo Money Market Fund reimburses the Adviser for the costs of
providing accounting services to the Fund in an amount not exceeding an annual
rate of 0.10% of the Fund's average daily net assets. Each equity and bond Fund
also reimburses the Adviser for the cost of providing accounting services to the
Fund in an amount not exceeding $35,000 for any fiscal year. The ordinary
operating expenses of the TCW Galileo Money Market Fund and the TCW Galileo
Mid-Cap Growth Fund are limited to 0.40% and 1.20% of the Fund's daily net
assets, respectively. The ordinary operating expenses of the TCW Galileo
Earnings Momentum Fund were limited to 1.14% until December 31, 1995. The
expense limitation on the TCW Galileo Mid-Cap Growth Fund will expire on
December 31, 1996.
Certain officers and/or directors of the Company are officers and/or directors
of the Adviser.
76
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
Note 5 - Purchases and Sales of Securities
Investment transactions (excluding short-term investments) for the year ended
October 31, 1996 were as follows:
<TABLE>
<CAPTION>
TCW TCW TCW TCW
Galileo High Galileo Galileo Galileo Long-Term
Grade Fixed High Yield Mortgage Backed Mortgage Backed
Income Fund Bond Fund Securities Fund Securities Fund
--------------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
Purchases at Cost $ 2,160,293 $174,557,453 $ 783,650 $ 10,595,659
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Sales Proceeds $ 7,091,269 $ 98,758,313 $ 25,987,207 $ 11,425,219
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
U.S. Government Purchases
at Cost $ 67,670,796 $ --- $ 35,698,586 $ 51,449,313
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
U.S. Government Sales Proceeds $ 73,217,839 $ 369,264 $ 30,310,118 $ 19,103,806
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
TCW TCW Galileo TCW Galileo TCW Galileo
Galileo Core Earnings Mid-Cap Small Cap
Equity Fund Momentum Fund Growth Fund Growth Fund
--------------- -------------- --------------- ---------------
Purchases at Cost $ 88,946,200 $ 78,873,146 $ 44,445,055 $ 92,851,495
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Sales Proceeds $ 80,903,769 $ 70,623,365 $ 14,631,570 $ 47,129,702
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
TCW Galileo TCW Galileo TCW Galileo
Asia Pacific Emerging Latin America
Equity Fund Markets Fund Equity Fund
--------------- -------------- ---------------
Purchases at Cost $ 40,295,058 $ 43,054,259 $ 43,993,281
------------- ------------ ------------
------------- ------------ ------------
Sales Proceeds $ 41,873,402 $ 43,248,263 $ 26,206,320
------------- ------------ ------------
------------- ------------ ------------
</TABLE>
There were no purchases or sales of U.S. Government Securities for the equity
funds for the year ended October 31, 1996.
Note 6 - Restricted Securities
The following restricted securities held by the Funds as of October 31, 1996
were valued both at the date of acquisition and October 31, 1996, in accordance
with the security valuation policy of the Funds described in Note 2. The
restricted securities include securities purchased in private placement
transactions without registration under the Securities Act of 1933, as well as
Rule 144A securities. Such securities generally may be sold only in a privately
negotiated transaction with a limited number of purchasers or in a public
offering registered under the Securities Act of 1933. Each Fund will bear any
costs incurred in connection with the disposition of such securities.
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- ----------------------------------------
TCW Galileo High Yield Bond Fund:
<TABLE>
<CAPTION>
Number of Shares, Rights, Date of
Units or Principal Amount Investment Acquisition Cost
------------------------- -------------------------------- ------------ ------------
<S> <C> <C> <C>
$ 1,000,000 CalEnergy Company, Inc.,
(144A), 9.5%, due 09/15/06 09/18/96 $ 996,160
500,000 Cinemark, USA Inc.,
(144A), 9.625%, due 08/01/08 08/12/96 497,765
825,000 Dade International, Inc.,
(144A), 11.125%, due 05/01/06 04/30/96 825,000
3,000,000 Dade International, Inc.,
(144A), 11.125%, due 05/01/06 06/25/96 3,112,500
525,000 E & S Holdings Corp.,
(144A), 10.375%, due 10/01/06 09/24/96 525,000
1,250,000 First Nationwide Escrow Corp.,
(144A), 10.625%, due 10/01/03 09/13/96 1,250,000
500,000 First Nationwide Escrow Corp.,
(144A), 10.625%, due 10/01/03 10/15/96 522,500
3,000,000 Guitar Center Management, Inc.,
(144A), 11%, due 07/01/06 06/27/96 3,000,000
750,000 Homeside Inc.,
(144A), 11.25%, due 05/15/03 05/07/96 750,000
1,000,000 Homeside Inc.,
(144A), 11.25%, due 05/15/03 06/27/96 1,035,000
875,000 ISP Holdings Inc.,
(144A), 9%, due 10/15/03 10/15/96 872,559
1,000,000 International Home Foods, Inc.,
(144A), 10.375%, due 11/01/06 10/29/96 1,000,000
1,350,000 Outsourcing Solutions Corp.,
(144A), 11%, due 11/01/06 10/31/96 1,350,000
2,000,000 Panda Funding Corp.,
(144A), 11.625%, due 08/20/12 07/26/96 2,000,000
500,000 Panda Funding Corp.,
(144A), 11.625%, due 08/20/12 08/28/96 512,500
1,000,000 Pierce Leahy Corp.,
(144A), 11.125%, due 07/15/06 07/17/96 1,000,000
1,300,000 Plains Resources, Inc.,
(144A), 10.25%, due 03/15/06 08/19/96 1,302,850
1,000,000 Rayovac Corp.,
(144A), 10.25%, due 11/01/06 10/17/96 1,000,000
450,000 Remington Arms Company, Inc.,
(144A), 9.5%, due 12/01/03 08/07/96 411,750
1,000,000 Remington Arms Company, Inc.,
(144A), 9.5%, due 12/01/03 08/21/96 922,500
1,000,000 Remington Product Company, L.L.C.,
(144A), 11%, due 05/15/06 05/16/96 992,510
500,000 Remington Product Company, L.L.C.,
(144A), 11%, due 05/15/06 06/05/96 498,750
725,000 U.S. Can Corp.,
(144A), 10.125%, due 10/15/06 10/10/96 725,000
</TABLE>
78
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1996
Note 6 - Restricted Securities (Continued)
The total value of restricted securities is $25,822,281, which represents 14% of
net assets of the Fund at October 31, 1996.
TCW Galileo Mortgage Backed Securities Fund:
<TABLE>
<CAPTION>
Date of
Principal Amount Investment Acquisition Cost
---------------- ------------------------------------------- ------------- --------------
<S> <C> <C> <C>
$ 1,309,639 Greenwich Capital Acceptance, Inc. (91-03),
(Private Placement), 8.3064%, due 08/25/19 03/21/91 $ 1,298,116
</TABLE>
The total value of restricted securities is $1,267,076, which represents 2% of
net assets of the Fund at October 31, 1996.
TCW Galileo Asia Pacific Equity Fund:
<TABLE>
<CAPTION>
Date of
Number of Shares Investment Acquisition Cost
---------------- ------------------------------------------- ------------- --------------
<S> <C> <C> <C>
251,000 Mahindra & Mahindra, Limited (144A),
Convertible Bond, 5%, due 07/09/01 07/05/96 $ 251,000
511,000 United Microelectric Corporation, Limited
(144A), Convertible Bond, 1.25%, due
08/06/04 (Taiwan) 07/08/96 658,410
</TABLE>
The total value of restricted securities is $881,905, which represents 1.8% of
net assets of the Fund at October 31, 1996.
TCW Galileo Emerging Markets Fund:
<TABLE>
<CAPTION>
Date of
Number of Shares Investment Acquisition Cost
---------------- ------------------------------------------- ------------- --------------
<S> <C> <C> <C>
13,406 AO Mosenergo Joint Stock Company (144A) (ADR)
(Russia) 06/14/96 $ 339,990
6,400 Cementos Diamante, S.A., (144A) (ADS)
(Columbia) 05/17/94 107,724
3,000 Chilectra, S.A. (144A) (ADR) (Chile) 08/17/95 135,375
10,000 Gazprom (144A) (ADR) (Russia) 10/22/96 157,500
3,940 Gedeon Richter (144A) (Hungary) 08/02/96 201,997
4,150 Komercni Banka (144A) (GDR) (Czech Republic) 08/23/96 124,600
8,008 Lukoil Holdings (144A) (ADR) (Russia) 06/21/96 332,358
274,000 Mahindra & Mahindra, Limited (144A),
Convertible Bond, 5%, due 07/09/02 (India) 07/03/96 274,000
8 Megionneftegaz (144A) (RDC) (Russia) 09/03/96 302,000
9,200 Mol Magyar Olaj-Es Gazipazi (144A) (GDR)
(Hungary) 08/22/96 97,250
13 Rostelecom (144A) (RDC) (Russia) 08/21/96 337,500
4,195 Siderar, S.A. (144A) (ADR) (Argentina) 04/30/96 71,315
265,000 United Microelectric Corporation, Limited (144A)
Convertible Bond, 1.25%, due 08/06/04 (Taiwan) 07/05/96 343,175
</TABLE>
The total value of restricted securities is $2,807,488, which represents 4.9% of
net assets of the Fund at October 31, 1996.
79
<PAGE>
October 31, 1996
NOTES TO FINANCIAL STATEMENTS (Continued)
- ----------------------------------------
Note 6 - Restricted Securities (Continued)
TCW Galileo Latin America Equity Fund:
<TABLE>
<CAPTION>
Date of
Number of Shares Investment Acquisition Cost
---------------- ------------------------------------------- ------------- --------------
<S> <C> <C> <C>
18,900 Cementos Diamante, S.A. (144A) (ADS) (Colombia) 05/17/94 $ 311,989
10,300 Chilectra, S.A. (144A) (ADR) (Chile) 12/01/95 525,875
10,237 COMPANHIA ENERGETICA DE MINAS GERAIS
(CEMIG) (144A) (ADR) (Brazil) 12/14/94 310,142
17,500 Mavesa (144A) (Venezuela) 05/09/96 78,081
13,060 Siderar, S.A. (144A) (ADR) (Argentina) 04/30/96 222,020
2,509 Siderurgica Venezolana Sivensa, Saica
S.A.C.A., Series B (144A) (ADR) (Venezuela) 08/14/96 605
</TABLE>
The total value of restricted securities is $1,535,863, which represents 2.2% of
net assets of the Fund at October 31, 1996.
Note 7 -Disclosure of Galileo Funds Voting Results
A Special Meeting of Shareholders of the TCW Galileo Asia Pacific Equity and TCW
Galileo Emerging Markets Funds was held on November 1, 1995. At the meeting, the
following matters were submitted to a shareholder vote and approved by a
majority of each Fund's outstanding voting securities: (i) approval of an
amended and restated sub-investment advisory agreement between the TCW Galileo
Asia Pacific Equity Fund, TCW Funds Management, Inc., the Fund's investment
adviser, and TCW Asia Limited, the sub-adviser (votes for: 3,322,546; votes
against: 0; abstentions: 163,973), and (ii) approval of amended and restated
sub-investment advisory agreements between the TCW Galileo Emerging Markets
Fund, TCW Funds Management, Inc., the fund's investment advisor, and TCW Asia
Limited and TCW London International, Limited, the sub-advisers. (both
sub-advisory agreements were approved with votes for: 3,683,240; votes against:
46,531; abstentions: 151,200). 5,304,333 and 7,227,618 shares were outstanding
on the record date of the meeting for the TCW Galileo Asia Pacific Equity and
TCW Galileo Emerging Markets Funds, respectively, and 3,486,519 and 3,812,748
shares entitled to vote were present in person or by proxy at the meeting for
the TCW Galileo Asia Pacific Equity and TCW Galileo Emerging Markets Funds,
respectively.
A Special Meeting of Shareholders of the TCW Galileo Long-Term Mortgage Backed
Securities and TCW Galileo Mortgage Backed Securities Funds was held on February
1, 1996. At the meeting, the following matters were submitted to a shareholder
vote and approved by a majority of each Fund's outstanding voting securities:
(i) approval of a modification to the investment objective of the TCW Galileo
Long-Term Mortgage Backed Securities Fund (votes for: 4,273,794; votes against
95,669; abstentions: 0), and (ii) approval of a modification to the investment
objective of the TCW Galileo Mortgage Backed Securities Fund (votes for:
6,116,571; votes against: 0; abstentions: 73,282). 7,900,072 and 9,557,864
shares were outstanding on the record date of the meeting for the TCW Galileo
Long-Term Mortgage Backed Securities and TCW Galileo Mortgage Backed Securities
Funds, respectively, and 4,369,463 and 6,189,854 shares entitled to vote were
present in person or by proxy at the meeting for the TCW Galileo Long-Term
Mortgage Backed Securities and TCW Galileo Mortgage Backed Securities Funds,
respectively.
Note 8 - Subsequent Event
On January 2, 1997, the TCW Convertible Limited Partnership will exchange its
limited partnership interests for a new TCW Galileo Fund, called the TCW Galileo
Convertible Securities Fund.
80
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Money Market Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------- ----------------
<S> <C> <C>
Net Asset Value per Share, Beginning of Period $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income 0.0509 0.0549
Less Distributions:
Distributions from Net Investment Income (0.0509) (0.0549)
----------- ----------
Net Asset Value per Share, End of Period $ 1.00 $ 1.00
----------- ----------
----------- ----------
Total Return 5.21% 5.67%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 233,671 $ 86,302
Ratio of Net Expenses to Average Net Assets (4) 0.40% 0.40%
Ratio of Net Investment Income to Average Net Assets 5.04% 5.49%
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the period July 14, 1988 (commencement of operations) to
December 31, 1988 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser has voluntarily agreed to reduce its fee, or to
pay the operating expenses of the Fund, to the extent necessary to limit
the annual ordinary operating expenses of the Fund to 0.40% of net
assets as disclosed in Note 4 of the Notes to Financial Statements. Had
such action not been taken, total annualized operating expenses as a
percentage of average net assets would have been 0.44% for the fiscal
year ended October 31, 1996, 0.46% for the fiscal year ended October 31,
1995, 0.68% for the ten months ended October 31, 1994, 0.52%, 0.49%,
0.47%, 0.51 % and 0.71% for the years ended December 31, 1993 through
1989, respectively, and 0.47% for the period July 14, 1988 (commencement
of operations) through December 31, 1988.
81
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, July 14, 1988
Ten Months Ended ----------------------------------------------------------------- (Inception) to
October 31, 1994 1993 1992 1991 1990 1989 December 31, 1988
---------------- --------- --------- --------- --------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
0.0304 0.0293 0.0381 0.0620 0.0800 0.0882 0.0379
(0.0304) (0.0293) (0.0381) (0.0620) (0.0800) (0.0882) (0.0379)
---------- --------- --------- --------- --------- --------- ---------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- --------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- --------- ---------
3.04% (1) 2.97% 3.92% 6.35% 8.18% 9.22% 7.68% (2)
$ 124,392 $ 81,204 $ 183,465 $ 140,987 $ 167,572 $ 88,620 $ 63,703
0.40% (3) 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% (3)
3.65% (3) 2.93% 3.81% 6.20% 8.00% 8.82% 8.08% (3)
</TABLE>
82
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo High Grade Fixed Income Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Ten Months (Commencement of
Year Ended Year Ended Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Dec. 31, 1993
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.61 $ 8.94 $ 10.04 $ 10.00
------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.55 0.58 0.44 0.45
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions/Translations (0.16) 0.62 (1.16) 0.19
------------ ------------ ------------ ------------
Total from Investment Operations 0.39 1.20 (0.72) 0.64
------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net Investment Income (0.55) (0.53) (0.38) (0.45)
Distributions from Net Realized Gains --- --- --- (0.14)
Distributions in Excess of Net
Realized Gains --- --- --- (0.01)
------------ ------------ ------------ ------------
Total Distributions (0.55) (0.53) (0.38) (0.60)
------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 9.45 $ 9.61 $ 8.94 $ 10.04
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return 4.26% 13.92% (7.24)%(1) 6.54%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 25,006 $ 36,236 $ 50,153 $ 33,328
Ratio of Expenses to Average Net Assets 0.76% 0.68%(4) 0.50%(3)(4) 0.50%(3)(4)
Ratio of Net Investment Income to Average
Net Assets 5.85% 6.38% 6.11%(3) 5.24%(3)
Portfolio Turnover Rate 238.73% 223.78% 208.63%(1) 149.96%(2)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a
full year's operating results.
(2) For the period March 1, 1993 (commencement of operations) to December 31,
1993 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.50% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.72% for the fiscal year ended October 31, 1995, 0.68% for the ten months
ended October 31, 1994 and 0.89% for the period March 1, 1993, (commencement
of operations) through December 31, 1993.
83
<PAGE>
TCW Galileo High Yield Bond Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Ten Months (Commencement of
Year Ended Year Ended Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Dec. 31, 1993
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.74 $ 9.43 $ 10.12 $ 10.00
------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.89 0.92 0.73 0.74
Net Realized and Unrealized Gain (Loss)
on Investments 0.03 0.39 (0.77) 0.27
------------ ------------ ------------ ------------
Total from Investment Operations 0.92 1.31 (0.04) 1.01
------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net Investment Income (0.89) (1.00) (0.65) (0.74)
Distributions from Net Realized Gains --- --- --- (0.15)
------------ ------------ ------------ ------------
Total Distributions (0.89) (1.00) (0.65) (0.89)
------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 9.77 $ 9.74 $ 9.43 $ 10.12
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return 9.92% 14.65% (0.34)% (1) 10.47% (2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 183,815 $ 92,652 $ 90,577 $ 73,737
Ratio of Expenses to Average Net Assets 0.90% 0.87% (4) 0.79% (3)(4) 0.79% (3)(4)
Ratio of Net Investment Income to Average
Net Assets 9.21% 9.60% 9.18% (3) 8.60% (3)
Portfolio Turnover Rate 82.56% 36.32% 34.01% (1) 47.60% (2)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a
full year's operating results.
(2) For the period March 1, 1993 (commencement of operations) through
December 31, 1993 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.79% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.88% for the fiscal year ended October 31, 1995, 0.91% for the ten months
ended October 31, 1994 and 0.96% for the period March 1, 1993 (commencement
of operations) through December 31, 1993.
84
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mortgage Backed Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Ten Months (Commencement of
Year Ended Year Ended Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Dec. 31, 1993
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.58 $ 9.41 $ 9.86 $ 10.00
------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.51 0.67 0.42 0.50
Net Realized and Unrealized Gain
(Loss) on Investments 0.22 0.25 (0.48) (0.12)
------------ ------------ ------------ ------------
Total from Investment Operations 0.73 0.92 (0.06) 0.38
------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net Investment
Income (0.46) (0.71) (0.39) (0.50)
Distributions in Excess of Net
Investment Income (0.18) (0.04) --- ---
Distributions from Net Realized Gains --- --- --- (0.02)
------------ ------------ ------------ ------------
Total Distributions (0.64) (0.75) (0.39) (0.52)
------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 9.67 $ 9.58 $ 9.41 $ 9.86
============ ============ ============ ============
Total Return 7.86% 10.16% (0.61)%(1) 3.89%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 61,835 $ 81,366 $ 134,948 $ 147,666
Ratio of Expenses to Average Net Assets 0.69% 0.61%(4) 0.55%(3)(4) 0.55%(3)(4)
Ratio of Net Investment Income to Average
Net Assets 5.34% 7.13% 5.18%(3) 5.98%(3)
Portfolio Turnover Rate 54.10% 37.83% 65.64%(1) 70.44%(2)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a
full year's operating results.
(2) For the period March 1, 1993 (commencement of operations) through
December 31, 1993 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.55% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.63% for the fiscal year ended October 31, 1995, 0.62% for the ten months
ended October 31, 1994 and 0.70% for the period March 1, 1993 (commencement
of operations) through December 31, 1993.
85
<PAGE>
TCW Galileo Long-Term Mortgage Backed Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
June 17, 1993
Ten Months (Commencement of
Year Ended Year Ended Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Dec. 31, 1993
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.56 $ 8.95 $ 10.07 $ 10.00
------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.68 0.72 0.63 0.28
Net Realized and Unrealized Gain
(Loss) on Investments 0.02 0.71 (1.26) 0.07
------------ ------------ ------------ ------------
Total from Investment
Operations 0.70 1.43 (0.63) 0.35
------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net
Investment Income (0.68) (0.82) (0.49) (0.28)
Distributions in Excess of Net
Investment Income (0.02) --- --- ---
------------ ------------ ------------ ------------
Total Distributions (0.70) (0.82) (0.49) (0.28)
------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 9.56 $ 9.56 $ 8.95 $ 10.07
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return 7.69% 16.84% (6.39)%/(1)/ 3.51%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 112,260 $ 80,159 $ 66,632 $ 25,215
Ratio of Expenses to Average Net Assets 0.68% 0.68%/(4)/ 0.65%/(3)(4)/ 0.65%/(3)(4)/
Ratio of Net Investment Income to Average
Net Assets 7.15% 7.88% 8.03%/(3)/ 5.37%/(3)/
Portfolio Turnover Rate 39.28% 23.76% 36.71%/(1)/ 44.47%/(2)/
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the period June 17, 1993 (commencement of operations) through
December 31, 1993 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.65% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.69% for the fiscal year ended October 31, 1995, 0.78% for the ten months
ended October 31, 1994 and 1.13% for the period June 17, 1993 (commencement
of operations) through December 31, 1993.
86
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Core Equity Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Ten Months (Commencement of
Year Ended Year Ended Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Dec. 31, 1993
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 13.69 $ 11.57 $ 11.81 $ 10.00
------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.11 0.06 0.04 0.03
Net Realized and Unrealized Gain
(Loss) on Investments 2.18 2.11 (0.28) 1.81
------------ ------------ ------------ ------------
Total from Investment Operations 2.29 2.17 (0.24) 1.84
------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net
Investment Income (0.05) (0.05) --- (0.03)
------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 15.93 $ 13.69 $ 11.57 $ 11.81
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return 16.79% 18.85% (2.03)%(1) 18.41%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 231,302 $ 197,721 $ 136,122 $ 55,885
Ratio of Expenses to Average Net Assets 0.82% 0.85% 0.91%(3) 1.00%(3)(4)
Ratio of Net Investment Income to Average
Net Assets 0.18% 0.48% 0.44%(3) 0.55%(3)
Portfolio Turnover Rate 39.58% 53.77% 23.53%(1) 29.67%(2)
Average Commission Rate Paid by the Fund(5) $ 0.06 N/A N/A N/A
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the period March 1, 1993 (commencement of operations) through
December 31, 1993 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.00% of net assets
through December 31, 1993. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.09% for the period March 1, 1993 (commencement of operations) through
December 31, 1993.
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
87
<PAGE>
TCW Galileo Earnings Momentum Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
November 1, 1994
(Commencement of
Year Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995
--------------- -------------------
<S> <C> <C>
Net Asset Value per Share, Beginning of Period $ 11.47 $ 10.00
------------- -------------
Income from Investment Operations:
Net Investment (Loss) (0.11) (0.03)
Net Realized and Unrealized Gain on Investments 1.72 1.51
------------- -------------
Total from Investment Operations 1.61 1.48
------------- -------------
Less Distributions:
Distributions in Excess of Net Investment Income --- (0.01)
Distributions From Net Realized Gains (0.07) ---
------------- -------------
Total Distributions (0.07) (0.01)
------------- -------------
Net Asset Value per Share, End of Period $ 13.01 $ 11.47
------------- -------------
------------- -------------
Total Return 13.99% 14.76%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 77,994 $ 63,411
Ratio of Net Expenses to Average Net Assets 1.13% 1.14%(1)
Ratio of Net Investment (Loss) to Average Net Assets (0.82%) (0.28%)
Portfolio Turnover Rate 99.03% 85.91%
Average Commission Rate Paid by the Fund $ 0.06(4) N/A
</TABLE>
(1) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.14% of net assets
through December 31, 1995. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.14% for the year ended October 31, 1996 and (commencement of operations)
through October 31, 1995.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
88
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mid-Cap Growth Fund
October 31, 1996
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
June 3, 1996
(Commencement of
Operations) through
October 31, 1996
-------------------
<S> <C>
Net Asset Value per Share, Beginning of Period $ 10.00
-------------
Loss from Investment Operations:
Net Investment (Loss) (0.03)
Net Realized and Unrealized (Loss) on Investments (0.78)
-------------
Total from Investments Operations (0.81)
-------------
Net Asset Value per Share, End of Period $ 9.19
-------------
-------------
Total Return (8.10)% (1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 92,430
Ratio of Net Expenses to Average Net Assets 1.20%(2)(3)
Ratio of Net Investment (Loss) to Average Net Assets (0.80%)(2)
Portfolio Turnover Rate 19.19%(1)
Average Commission Rate Paid by the Fund $ 0.06(4)
</TABLE>
(1) For the period June 3, 1996 (commencement of operations) through
October 31, 1996 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Adviser has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.20% of net assets as
disclosed in Note 4 of the Note to Financial Statements. Had such action not
been taken, total annualized operating expenses as a percentage of average
net assets would have been 1.27% for the period June 3, 1996 (commencement
of operations) through October 31, 1996.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
89
<PAGE>
TCW Galileo Small Cap Growth Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Year Ended Year Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994
------------- ------------- -------------------
<S> <C> <C> <C>
Net Asset Value per Share, Beginning of Period $ 13.53 $ 9.39 $ 10.00
------------- ------------- -------------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.13) (0.07) (0.04)
Net Realized and Unrealized Gain (Loss) on Investments 4.08 4.72 (0.57)
------------- ------------- -------------
Total from Investment Operations 3.95 4.65 (0.61)
------------- ------------- -------------
Less Distributions:
Distributions from Net Investment Income (0.01) --- ---
Distributions from Net Realized Gains (0.30) (0.51) ---
------------- ------------- -------------
Total Distributions (0.31) (0.51) ---
------------- ------------- -------------
Net Asset Value per Share, End of Period $ 17.17 $ 13.53 $ 9.39
------------- ------------- -------------
------------- ------------- -------------
Total Return 29.73% 49.89% (6.10%)(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 132,444 $ 66,056 $ 51,089
Ratio of Expenses to Average Net Assets 1.14% 1.21%(3) 1.09%(2)(3)
Ratio of Net Investment (Loss) to Average Net Assets (0.76)% (0.61)% (0.59%)(2)
Portfolio Turnover Rate 45.43% 89.73% 88.63%(1)
Average Commission Rate Paid by the Fund (4) $ 0.06 N/A N/A
</TABLE>
(1) For the period March 1, 1994 (commencement of operations) through
October 31, 1994 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.09% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.24% for the fiscal year ended October 31, 1995 and 1.39% for the period
March 1, 1994 (commencement of operations) through October 31, 1994.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
90
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Asia Pacific Equity Fund
October 31, 1996
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Year Ended Year Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994
------------- ------------- -------------------
<S> <C> <C> <C>
Net Asset Value per Share, Beginning of Period $ 8.67 $ 10.19 $ 10.00
------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.06 0.06 0.03
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency 0.93 (1.19) 0.16
------------ ------------ ------------
Total from Investment Operations 0.99 (1.13) 0.19
------------ ------------ ------------
Less Distributions:
Distributions from Net Investment Income (0.05) (0.01) ---
Distributions from Net Realized Gains --- (0.16) ---
Distributions in Excess of Net Realized Gains --- (0.22) ---
------------ ------------ ------------
Total Distributions (0.05) (0.39) ---
------------ ------------ ------------
Net Asset Value per Share, End of Period $ 9.61 $ 8.67 $ 10.19
------------ ------------ ------------
------------ ------------ ------------
Total Return 11.36% (10.98%) 1.90%(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 48,266 $ 46,709 54,019
Ratio of Expenses to Average Net Assets 1.43% 1.47%(3) 1.40%(2)(3)
Ratio of Net Investment Income to Average Net Assets 0.66% 0.74% 0.45%(2)
Portfolio Turnover Rate 84.81% 102.01% 46.75%(1)
Average Commission Rate Paid by the Fund (4) $ 0.01 N/A N/A
</TABLE>
(1) For the period March 1, 1994 (commencement of operations) through
October 31, 1994 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.40% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.51% for the fiscal year ended October 31, 1995 and 1.60% for the period
March 1, 1994 (commencement of operations) through October 31, 1994.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
91
<PAGE>
TCW Galileo Emerging Markets Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Year Ended Year Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994
------------- ------------- -------------------
<S> <C> <C> <C>
Net Asset Value per Share, Beginning of Period $ 7.19 $ 9.73 $ 10.00
------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.07 0.04 (0.01)
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency 0.94 (2.58) (0.26)
------------ ------------ ------------
Total from Investment Operations 1.01 (2.54) (0.27)
------------ ------------ ------------
Less Distributions:
Distributions from Net Investment Income (0.02) --- ---
------------ ------------ ------------
Net Asset Value per Share, End of Period $ 8.18 $ 7.19 $ 9.73
------------ ------------ ------------
------------ ------------ ------------
Total Return 14.14% (26.11%) (2.70%)(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 57,639 $ 51,873 $ 70,212
Ratio of Expenses to Average Net Assets 1.41% 1.55% 1.70%(2)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.82% 0.54% (0.09)%(2)
Portfolio Turnover Rate 83.76% 74.24% 61.28%(1)
Average Commission Rate Paid by the Fund (3) $ 0.00 N/A N/A
</TABLE>
(1) For the period March 1, 1994 (commencement of operations) through
October 31, 1994 and not indicative of a full year's operating results.
(2) Annualized.
(3) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
92
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Latin America Equity Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Year Ended Year Ended Year Ended Operations) through
Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Dec. 31, 1993
-------------- -------------- -------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 7.92 $ 14.99 $ 15.11 $ 10.00
------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.11 0.06 0.01 0.08
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency 2.03 (5.92) (0.13) 6.35
------------ ------------ ------------ ------------
Total from Investment Operations 2.14 (5.86) (0.12) 6.43
------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net Investment Income (0.05) --- --- (0.08)
Distributions from Net Realized Gains --- --- --- (1.21)
Distributions in Excess of Net Realized Gains --- (1.21) --- (0.03)
------------ ------------ ------------ ------------
Total Distributions (0.05) (1.21) --- (1.32)
------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 10.01 $ 7.92 $ 14.99 $ 15.11
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return 27.08% (40.95)% (0.79)%(1) 64.27%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 68,323 $ 38,942 $ 122,610 $ 89,910
Ratio of Expenses to Average Net Assets 1.44% 1.58% 1.36%(3) 1.50%(3)(4)
Ratio of Net Investment Income to Average
Net Assets 1.12% 0.59%(4) 0.11%(3)(4) 0.77%(3)(4)
Portfolio Turnover Rate 44.32% 75.62% 143.65%(1) 120.06%(2)
Average Commission Rate Paid by the Fund (5) $ 0.00 N/A N/A N/A
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the period March 1, 1993 (commencement of operations) through
December 31, 1993 and not indicative of a full year's operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.50% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.52% for the period March 1, 1993 (commencement of operations) through
December 31, 1993.
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
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<PAGE>
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Board of Directors and Shareholders of TCW Galileo Funds, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedule of investments, of TCW Galileo Funds, Inc. (comprising TCW Galileo
Money Market Fund, TCW Galileo High Grade Fixed Income Fund, TCW Galileo High
Yield Bond Fund, TCW Galileo Mortgage Backed Securities Fund, TCW Galileo
Long-Term Mortgage Backed Securities Fund, TCW Galileo Core Equity Fund, TCW
Galileo Earnings Momentum Fund, TCW Galileo Mid-Cap Growth Fund, TCW Galileo
Small Cap Growth Fund, TCW Galileo Asia Pacific Equity Fund, TCW Galileo
Emerging Markets Fund, and TCW Galileo Latin America Equity Fund) (the "Funds")
as of October 31, 1996 and the related statements of operations for the periods
then ended, the statements of changes in net assets for each of the periods
ended October 31, 1996 and 1995, and the financial highlights for each of the
respective periods in the periods ended October 31, 1996. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based upon our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996 by correspondence with the custodians and brokers. Where
confirmations were not received, we performed alternative procedures. An audit
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds as of October 31, 1996 and the results of their operations, the changes in
their net assets, and the financial highlights for the respective stated periods
in conformity with generally accepted accounting principles.
/s/ Deloitte + Touche LLP
[SIGNATURE APPEARS HERE]
December 13, 1996
Los Angeles, California
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<PAGE>
SHAREHOLDER INFORMATION
- -----------------------
DIRECTORS AND OFFICERS
Marc I. Stern
Director and Chairman of the Board
Thomas E. Larkin, Jr.
Director and President
John C. Argue
Director
Norman Barker, Jr.
Director
Richard W. Call
Director
Alvin R. Albe, Jr.
Senior Vice President
Michael E. Cahill
Senior Vice President,
General Counsel and Assistant Secretary
Ronald E. Robison
Senior Vice President
David K. Sandie
Senior Vice President and Treasurer
Philip K. Holl
Secretary
Marie M. Bender
Assistant Secretary
Hilary G.D. Lord
Assistant Secretary
INVESTMENT ADVISER
TCW Funds Management, Inc.
865 South Figueroa Street
Los Angeles, California 90017
(213) 244-0000
SUB-ADVISERS
TCW Asia Limited
Suite 1308, One Pacific Place
88 Queensway
Hong Kong
TCW London International, Limited
Birkett House
27 Albemarle Street
London W1X3FA
CUSTODIAN
BNY Western Trust Company
700 South Flower Street
Suite 200
Los Angeles, California 90017
TRANSFER AGENT
DST Systems, Inc.
811 Main Street
Kansas City, Missouri 64105
DISTRIBUTOR
TCW Brokerage Services
865 South Figueroa Street
Los Angeles, California 90017
(213) 244-0000
INDEPENDENT AUDITORS
Deloitte & Touche llp
1000 Wilshire Boulevard
Los Angeles, California 90017
95
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