|
|
|
|
|
|
|
|
|
|
Previous: TCW GALILEO FUNDS INC, NSAR-B/A, 1998-01-07 |
Next: FALCON DRILLING CO INC, 15-12G, 1998-01-07 |
<PAGE>
TCW GALILEO FUNDS, INC.
ANNUAL REPORT
OCTOBER 31, 1997
<PAGE>
TCW GALILEO FUNDS,INC.
TABLE OF CONTENTS
- -----------------
<TABLE>
<CAPTION>
<S> <C>
Letter to Shareholders..................................................... 2
Performance Summary........................................................ 3
Schedules of Investments:
TCW Galileo Money Market Fund............................................. 4
TCW Galileo Core 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 Convertible Securities Fund................................... 20
TCW Galileo Core Equity Fund.............................................. 24
TCW Galileo Earnings Momentum Fund........................................ 27
TCW Galileo Mid-Cap Growth Fund........................................... 31
TCW Galileo Small Cap Growth Fund......................................... 34
TCW Galileo Asia Pacific Equity Fund...................................... 39
TCW Galileo Emerging Markets Fund......................................... 41
TCW Galileo Latin America Equity Fund..................................... 47
Statements of Assets and Liabilities....................................... 50
Statements of Operations................................................... 54
Statements of Changes in Net Assets........................................ 58
Notes to Financial Statements.............................................. 71
Financial Highlights....................................................... 82
Independent Auditors' Report............................................... 96
Shareholder Information.................................................... 97
Tax Information Notice..................................................... 98
</TABLE>
1
<PAGE>
TO OUR SHAREHOLDERS
- -------------------
We are pleased to submit the October 31, 1997 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, 1997.
TCW is committed to providing you with superior professional investment
management and distinctive personal service through the TCW Galileo Funds.
On November 3, 1997, we started four new Galileo Mutual Funds; TCW Galileo
International Equities Fund, TCW Galileo European Equities Fund, TCW Galileo
Japanese Equities Fund and TCW Galileo Value Opportunities Fund, each with a
unique investment strategy designed to meet the needs of our investors. TCW
Galileo International Equities Fund is a "Fund of Funds" investing in our five
international Galileo Funds and Galileo Money Market Fund providing investors
with a broad diversification across international markets.
Please call your Account Representative or our Investor 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
November 26, 1997
2
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
PERFORMANCE SUMMARY
- -------------------
<TABLE>
<CAPTION>
Net Asset Value Total Return - Annualized
per Share As of October 31, 1997
--------------- --------------------------------------------------------------
October 31, Year Ended Latest Since Inception
1997 October 31, 1997 5 Years Inception Date
--------------- ---------------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
TCW Galileo Money Market Fund $ 1.00 5.29% 4.54% 5.73% 07/14/88
TCW Galileo Core Fixed Income Fund 9.62 8.45% 6.11%/(1)/ 7.51%/(1)/ 01/01/90/(2)/
TCW Galileo High Yield Bond Fund 10.11 13.26% 11.19%/(1)/ 11.29%/(1)/ 02/01/89/(2)/
TCW Galileo Mortgage Backed Securities Fund 9.70 6.71% 5.89%/(1)/ 7.05%/(1)/ 02/01/90/(2)/
TCW Galileo Long-Term Mortgage Backed
Securities Fund 9.91 11.66% N/A 7.30% 06/17/93
TCW Galileo Convertible Securities Fund/(3)/ 11.41 22.73%/(1)/ 14.42%/(1)/ 13.65%/(1)/ 01/01/89/(2)/
TCW Galileo Core Equity Fund 19.29 22.68% 17.03%/(1)/ 16.44%/(1)/ 07/01/91/(2)/
TCW Galileo Earnings Momentum Fund 13.87 15.53% N/A 14.51%/(1)/ 05/01/93/(2)/
TCW Galileo Mid-Cap Growth Fund 9.40 2.28% N/A 25.19%/(1)/ 11/01/94/(2)/
TCW Galileo Small Cap Growth Fund 18.74 10.38% 22.32%/(1)/ 19.06%/(1)/ 12/01/89/(2)/
TCW Galileo Asia Pacific Equity Fund 7.37 (22.40)% N/A 6.79%/(1)/ 04/01/93/(2)/
TCW Galileo Emerging Markets Fund 8.32 2.82% N/A 5.81%/(1)/ 06/01/93/(2)/
TCW Galileo Latin America Equity Fund 12.51 26.24% 9.47%/(1)/ 13.03%/(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 the predecessor limited partnership.
(3) Inception date of the Fund was January 2, 1997.
3
<PAGE>
TCW Galileo Money Market Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount INVESTMENTS Value
---------- ----------- -------------
<S> <C> <C>
AGENCY FIXED INCOME SECURITIES (26.6% of Net Assets)
$ 4,500,000 Federal Farm Credit Bank, 5.7%, due 09/02/98 $ 4,501,300
6,300,000 Federal Home Loan Bank, 5.5%, due 04/21/98 6,300,000
2,000,000 Federal Home Loan Bank, 5.655%, due 11/26/97 1,999,609
9,000,000 Federal Home Loan Bank, 5.71%, due 06/23/98 9,001,823
4,500,000 Federal Home Loan Bank, 5.8%, due 09/18/98 4,502,293
9,000,000 Federal Home Loan Bank, 7.87%, due 12/15/97 9,022,876
5,000,000 Federal Home Loan Mortgage Corp., 5.84%, due 04/08/98 5,004,247
10,000,000 Federal National Mortgage Association, 5.64%, due 01/29/98 9,864,522
3,500,000 Federal National Mortgage Association, 5.71%, due 03/18/98 3,501,108
5,500,000 Federal National Mortgage Association, 9.55%, due 11/10/97 5,504,458
-------------
TOTAL AGENCY FIXED INCOME SECURITIES (Cost: $59,202,236) 59,202,236
-------------
COMMERCIAL PAPER (58.3%)
6,000,000 Abbott Corp., 5.45%, due 11/06/97 5,995,458
4,100,000 American Express Credit Corp., 5.48%, due 11/03/97 4,098,752
5,700,000 American General Finance Corp., 5.7%, due 11/03/97 5,698,195
7,000,000 Bellsouth Corp., 5.5%, due 11/10/97 6,990,375
2,100,000 Bellsouth Corp., 5.51%, due 11/14/97 2,095,822
5,000,000 Beneficial Corp., 5.55%, due 11/03/97 4,998,458
2,200,000 B.P. America, 5.67%, due 11/03/97 2,199,307
3,000,000 Ciesco L.P., 5.5%, due 11/05/97 2,998,167
5,000,000 Ciesco L.P., 5.5%, due 11/17/97 4,987,778
5,000,000 CIT Group Holdings, 5.47%, due 11/14/97 4,990,124
4,000,000 General Electric Capital Corp., 5.59%, due 01/20/98 3,950,311
5,000,000 International Lease Finance Corp., 5.49%, due 11/04/97 4,997,712
2,900,000 International Lease Finance Corp., 5.5%, due 11/05/97 2,898,228
8,000,000 J.P. Morgan & Co., 5.47%, due 11/07/97 7,992,707
8,400,000 Metlife Funding Inc., 5.57%, due 11/24/97 8,370,108
5,000,000 Morgan Stanley/Dean Witter, Discover, 5.51%, due 11/21/97 4,984,694
5,000,000 Northern Illinois Gas Co., 5.5%, due 11/12/97 4,991,597
6,150,000 Pacific Mutual, 5.5%, due 11/13/97 6,138,725
5,000,000 Pitney-Bowes Credit Corp., 5.51%, due 01/15/98 4,942,604
2,000,000 Sara Lee Corp., 5.5%, due 12/23/97 1,984,111
8,000,000 Sara Lee Corp., 5.67%, due 11/03/97 7,997,480
7,000,000 Schering Corp., 5.55%, due 11/12/97 6,988,129
4,850,000 United Parcel Service, 5.48%, due 11/03/97 4,848,523
4,750,000 USAA Capital Corp., 5.5%, due 11/04/97 4,747,823
4,200,000 USAA Capital Corp., 5.53%, due 01/05/98 4,158,064
4,900,000 Wal-Mart Stores, Inc., 5.5%, due 11/10/97 4,893,263
-------------
TOTAL COMMERCIAL PAPER (Cost: $ 129,936,515) 129,936,515
-------------
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount INVESTMENTS Value
- ------------ ----------- -------------
<S> <C> <C>
CORPORATE FIXED INCOME SECURITIES (14.8%)
$ 6,841,000 Associates Corp. of North America, 8.125%, due 01/15/98 $ 6,871,145
3,000,000 CIT Group Holdings, 6.75%, due 04/30/98 3,014,152
8,100,000 Ford Motor Credit Corp., 7.125%, due 12/01/97 8,108,707
1,000,000 Ford Motor Credit Corp., 8%, due 12/01/97 1,001,696
1,500,000 General Electric Capital Corp., 6.29%, due 11/05/97 1,500,085
2,550,000 General Electric Capital Corp., 7.95%, due 02/02/98 2,562,502
2,350,000 General Electric Capital Corp., 8%, due 01/15/98 2,359,758
5,000,000 NationsBank Corp., 6.625%, due 01/15/98 5,007,043
2,500,000 Norwest Corp., 6.5%, due 11/15/97 2,500,835
-------------
TOTAL CORPORATE FIXED INCOME SECURITIES (Cost: $ 32,925,923) 32,925,923
-------------
SHORT-TERM INVESTMENT (COST: $23,344) (0.0%)
--------------------------------------------
23,344 Bank of New York Depository Reserve, 4.6%, due 11/03/97 23,344
-------------
TOTAL INVESTMENTS (Cost: $222,088,018) (99.7%) 222,088,018
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.3%) 683,015
-------------
NET ASSETS (100%) $222,771,033
=============
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
TCW Galileo Core Fixed Income Fund
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ----------- --------------------------------- -------------
<S> <C> <C>
BASIC INDUSTRIES (5.9% OF Net Assets)
$ 100,000 AMR Corp., 9.5%, due 05/15/01 $ 109,875
25,000 Consumers International, (144A), 10.25%, due 04/01/05 26,750 *
50,000 Doskocil Companies, Inc., (144A), 10.125%, due 09/15/07 51,750 *
25,000 Globalstar LP/Capital, 11.25%, due 06/15/04 24,625
50,000 GSI Group, Inc., (144A), 10.25%, due 11/01/07 50,625 *
100,000 International Business Machines Corp., 7%, due 10/30/25 101,000
50,000 Iron Mountain, Inc., 10.125%, due 10/01/06 54,125
25,000 Jordan Telecommunications Products, Inc., (144A), 9.875%, due 08/01/07 25,375 *
50,000 Lockheed Martin Corp., 7.25%, due 05/15/06 52,625
100,000 MCI Communications Corp., 6.95%, due 08/15/06 103,375
25,000 National Energy Group, Inc., (144A), 10.75%, due 11/01/06 25,875 *
100,000 Raytheon Co., 6.45%, due 08/15/02 100,750
50,000 Telex Communications, Inc., 10.5%, due 05/01/07 49,500
125,000 Transamerica Energy, Inc., (144A), 11.5%, due 06/15/02 127,500 *
50,000 Trico Marine Services, Inc., Series B, 8.5%, due 08/01/05 50,563
100,000 Union Pacific Co., 7.875%, due 02/15/02 105,000
50,000 U. S. Can Corp., Series B, 10.125%, due 10/15/06 52,125
25,000 Viasystems, Inc., (144A), 9.75%, due 06/01/07 25,562 *
-------------
TOTAL BASIC INDUSTRIES (Cost: $1,124,787) 1,137,000
-------------
CONSUMER CYCLICALS (2.4%)
25,000 Atlas Air, Inc., (144A), 10.75%, due 08/01/05 26,375 *
25,000 Foodmaker, 1993A Corp., Series B, 9.75%, due 11/01/03 26,000
25,000 Grand Casinos, Inc., 10.125%, due 12/01/03 26,500
100,000 J. C. Penney Company, Inc., 9.05%, due 03/01/01 108,500
50,000 Livent, Inc., (144A), 9.375%, due 10/15/04 50,375 *
90,000 May Department Stores Co., 9.75%, due 02/15/21 113,625
25,000 Outdoor Communications, Inc., 9.25%, due 08/15/07 24,812
10,000 Outdoor Systems, Inc., 8.875%, due 06/15/07 10,300
25,000 Signature Resorts, Inc., (144A), 9.75%, due 10/01/07 25,250 *
25,000 STC Broadcasting, Inc., Series B, 11%, due 03/15/07 26,750
25,000 Von Hoffman Press, (144A), 10.375%, due 05/15/07 26,500 *
-------------
TOTAL CONSUMER CYCLICALS (Cost: $437,328) 464,987
-------------
CONSUMER NON-CYCLICALS (0.6%)
25,000 Dade International, Inc., Series B, 11.125%, due 05/01/06 27,750
50,000 Physician Sales & Service, Inc., (144A), 8.5%, due 10/01/07 49,000 *
50,000 Stater Brothers Holdings, Inc., (144A), 9%, due 07/01/04 50,875 *
------------
TOTAL CONSUMER NON-CYCLICALS (Cost: $128,833) 127,625
------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
6
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ----------- --------------------------------- -------------
<S> <C> <C>
FINANCIAL SERVICES (2.5%)
$ 100,000 BHP Finance USA Ltd., (Yankee), 6.69%, due 03/01/06 $ 102,125
100,000 Comdisco, Inc., 6.375%, due 11/30/01 100,250
100,000 Hartford Life Inc., 7.65%, due 06/15/27 106,250
100,000 Lehman Brothers, Inc., 7.125%, due 07/15/02 103,125
60,000 Security Pacific Corp., 11.5%, due 11/15/00 68,850
-------------
TOTAL FINANCIAL SERVICES (Cost: $467,148) 480,600
-------------
UTILITIES (2.8%)
100,000 Florida Power & Light Co., 5.5%, due 07/01/99 99,375
100,000 Hydro-Quebec (Yankee), 9.4%, due 02/01/21 126,125
100,000 Northern Telecom Capital Corp., 7.4%, due 06/15/06 106,500
100,000 Pacificorp., 6.75%, due 04/01/05 102,250
100,000 Praxair, Inc., 6.75%, due 03/01/03 101,750
-------------
TOTAL UTILITIES (Cost: $509,936) 536,000
-------------
TOTAL CORPORATE FIXED INCOME SECURITIES
(COST: $2,668,032) (14.2%) 2,746,212
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (8.7%)
--------------------------------------
400,000 Bear Stearns Mortgage Securities Inc. (97-2-A2), 6.5%,
due 04/28/24 392,696
462,882 Federal Home Loan Mortgage Corp (1578-O), 7%,
due 09/15/23 457,105
321,204 Federal Home Loan Mortgage Association - Government
National Mortgage Association (41-K), 8%, due 04/25/24 332,740
500,000 Federal National Mortgage Association (96-46-B),
6.5%, due 11/25/23 500,965
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (Cost: $1,607,719) 1,683,506
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (15.2%)
-------------------------------------------
1,333,370 Federal Home Loan Mortgage Corp., Pool #E20246, 7.5%,
due 06/01/11 1,368,784
346,452 Federal Home Loan Mortgage Corp., Pool #C80409, 8%,
due 06/01/26 359,011
835,774 Government National Mortgage Association, Pool #422688, 7%,
due 05/15/26 840,212
355,791 Government National Mortgage Association, Pool #432017, 8%,
due 08/15/26 369,133
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS-
FIXED RATE PASS-THROUGH SECURITIES (Cost: $2,843,010) 2,937,140
-------------
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
TCW Galileo Core Fixed Income Fund
SCHEDULE OF INVESTMENTS (Continued)
- ------------------------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ----------- --------------------------------- -------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (37.5%)
---------------------------------
$ 675,000 United States Treasury Bonds, 5.5%, due 11/15/98 $ 674,312
1,100,000 United States Treasury Bonds, 6.375%, due 04/30/99 1,111,550
100,000 United States Treasury Bonds, 6.375%, due 08/15/27 102,980
710,000 United States Treasury Bonds, 7.5%, due 11/15/24 826,689
1,050,000 United States Treasury Bonds, 12%, due 08/15/13 1,536,602
100,000 United States Treasury Notes, 5.625%, due 10/31/99 100,007
45,000 United States Treasury Notes, 5.875%, due 01/31/99 45,131
1,000,000 United States Treasury Notes, 7.5%, due 10/31/99 1,033,860
1,000,000 United States Treasury Notes, 7.75%, due 11/30/99 1,039,700
660,000 United States Treasury Notes, 8%, due 11/15/21 802,256
-------------
TOTAL U. S. GOVERNMENT OBLIGATIONS (Cost: $7,129,280) 7,273,087
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (15.8%)
------------------------------------------
555,000 Federal National Mortgage Association, 6.3%, due 09/25/02 556,576
400,000 Federal National Mortgage Association, 6.4%, due 10/24/02 405,500
415,000 Federal National Mortgage Association, 6.4%, due 09/27/05 423,458
600,000 Federal National Mortgage Association, 6.48%, due 06/28/04 614,130
480,000 Federal National Mortgage Association, 6.74%, due 05/13/04 497,026
520,000 Federal National Mortgage Association, 7.4%, due 07/01/04 557,892
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost: $3,001,500) 3,054,582
-------------
TOTAL FIXED INCOME SECURITIES
(COST: $17,249,541) (91.4%) 17,694,527
-------------
SHORT-TERM INVESTMENT (COST: $2,311,587) (11.9%)
------------------------------------------------
2,311,587 Bank of New York Depository Reserve, 4.6%, due 11/03/97 2,311,587
-------------
TOTAL INVESTMENTS (COST: $19,561,128) (103.3%) 20,006,114
LIABILITIES IN EXCESS OF OTHER ASSETS (-3.3%) (637,874)
-------------
NET ASSETS (100%) $ 19,368,240
=============
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo High Yield Bond Fund
October 31, 1997
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ------------- --------------------------------- --------------
<S> <C> <C>
BASIC MATERIALS (17.6% of net Assets)
Chemicals (2.4%)
$ 820,000 Borden Chemical and Plastics, L.P., 9.5%, due 05/01/05 $ 865,100
725,000 Foamex L.P., (144A), 9.875%, due 06/15/07 741,313 *
875,000 ISP Holdings Inc., 9%, due 10/15/03 907,813
2,265,000 NL Industries, Inc., 11.75%, due 10/15/03 2,491,500
--------------
Total Chemicals 5,005,726
--------------
Energy (7.6%)
400,000 Abraxas Petroleum Corp., 11.5%, due 11/01/04 438,000
1,000,000 Chesapeake Energy Corp., 12%, due 03/01/01 1,077,490
1,250,000 Forman Petroleum Corp., (144A), 13.5%, due 06/01/04 1,268,750 *
2,500,000 HarCor Energy, Inc., 14.875%, due 07/15/02 2,943,750
1,950,000 Magnum Hunter Resources, Inc., (144A), 10%, due 06/01/07 1,998,750 *
900,000 National Energy Group, Inc., (144A), 10.75%, due 11/01/06 931,500 *
850,000 Plains Resources, Inc., 10.25%, due 03/15/06 905,250
3,300,000 Transamerica Energy, Inc., (144A), 11.5%, due 06/15/02 3,366,000 *
150,000 Transamerica Energy, Inc., (144A), 13%, due 06/15/02 123,000 *
750,000 Trico Marine Services, Inc., Series B, 8.5%, due 08/01/05 758,438
2,000,000 Veritas DGC, Inc., 9.75%, due 10/15/03 2,150,000
--------------
Total Energy 15,960,928
--------------
Forest Products & Paper (4.4%)
1,750,000 Fibermark, Inc., Series B, 9.375%, due 10/15/06 1,785,000
2,150,000 Malette, Inc., 12.25%, due 07/15/04 2,434,875
1,250,000 SD Warren Co., Series B, 12%, due 12/15/04 1,406,250
1,300,000 Stone Container Corp., 10.75%, due 10/01/02 1,391,000
2,000,000 Stone Container Corp., 12.25%, due 04/01/02 2,090,000
--------------
Total Forest Products & Paper 9,107,125
--------------
Metals & Mining (3.2%)
1,500,000 AK Steel Corp., 9.125%, due 12/15/06 1,571,250
225,000 AK Steel Corp., 10.75%, due 04/01/04 240,750
700,000 Great Lakes Carbon Corp., 10%, due 01/01/06 736,750
1,500,000 Kaiser Aluminum & Chemical Corp., 10.875%, due 10/15/06 1,653,750
720,000 Oregon Steel Mills, Inc., 11%, due 06/15/03 781,200
350,000 Ryerson Tull, Inc., 9.125%, due 07/15/06 375,375
1,250,000 WCI Steel Inc., 10%, due 12/01/04 1,306,250
--------------
Total Metals & Mining 6,665,325
--------------
TOTAL BASIC MATERIALS (Cost: $35,931,795) 36,739,104
--------------
CONSUMER CYCLICALS (21.9%)
Auto Parts (1.9%)
1,250,000 Blue Bird Body Co., Series B, 10.75%, due 11/15/06 1,314,064
2,000,000 Hayes Wheels International, Inc., 11%, due 07/15/06 2,220,000
500,000 Hayes Wheels International, Inc., (144A), 9.125%, due 07/15/07 515,000 *
--------------
Total Auto Parts 4,049,064
--------------
</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>
Entertainment & Leisure (1.5%)
$ 1,000,000 Cinemark, USA Inc., 9.625%, due 08/01/08 $ 1,030,000
1,000,000 Hollywood Park, Inc., (144A), 9.5%, due 08/01/07 1,075,000 *
600,000 Livent, Inc., (144A), 9.375%, due 10/15/04 604,500 *
350,000 Regal Cinemas, Inc., (144A), 8.5%, due 10/01/07 346,500 *
--------------
Total Entertainment & Leisure 3,056,000
--------------
Gaming (2.1%)
670,000 California Hotel Finance Corp., 11%, due 12/01/02 697,639
825,000 Grand Casinos, Inc., 10.125%, due 12/01/03 874,500
1,100,000 Griffin Gaming & Entertainment, Inc., Variable Rate, due 06/30/00 1,133,000
1,605,000 Trump Atlantic City Funding, Inc., 11.25%, due 05/01/06 1,580,925
--------------
Total Gaming 4,286,064
--------------
Lodging (1.2%)
500,000 HMC Acquisition Properties, Inc., Series B, 9%, due 12/15/07 510,000
488,000 John Q. Hammons Hotels, L.P., 8.875%, due 02/15/04 494,100
525,000 La Quinta Inns, Inc., 9.25%, due 05/15/03 546,000
1,000,000 Signature Resorts, Inc., (144A), 9.75%, due 10/01/07 1,010,000 *
--------------
Total Lodging 2,560,100
--------------
Media (4.7%)
675,000 Ackerley Communications, Inc., Series B, 10.75%, due 10/01/03 718,875
2,000,000 Adams Outdoor Advertising, L.P., 10.75%, due 03/15/06 2,180,000
810,000 Chancellor Media Corp., 9.375%, due 10/01/04 834,300
525,000 Heritage Media Services Corp., 11%, due 06/15/02 553,875
500,000 Jacor Communications, Inc., 9.75%, due 12/15/06 527,500
1,100,000 JCAC, Inc., 10.125%, due 06/15/06 1,171,500
850,000 Outdoor Communications, Inc., 9.25%, due 08/15/07 843,625
450,000 Outdoor Systems, Inc., 8.875%, due 06/15/07 463,500
150,000 Outdoor Systems, Inc., 9.375%, due 10/15/06 158,250
2,225,000 STC Broadcasting, Inc., Series B, 11%, due 03/15/07 2,358,500
--------------
Total Media 9,809,925
--------------
Publishing (2.7%)
1,225,000 American Media Operations, 11.625%, due 11/15/04 1,335,250
2,335,000 Garden State Newspapers Co., 12%, due 07/01/04 2,632,714
250,000 Hollinger International Publishing, 8.625%, due 03/15/05 253,750
550,000 K-III Communications Corp., 10.25%, due 06/01/04 594,688
800,000 U. S. Banknote Corp., 10.375%, due 06/01/02 834,000
--------------
Total Publishing 5,650,402
--------------
Restaurants (0.8%)
1,600,000 Foodmaker, 1993A Corp., Series B, 9.75%, due 11/01/03 1,664,000
--------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
10
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ------------- --------------------------------- --------------
<S> <C> <C>
Retailers (5.6%)
$ 850,000 Cole National Corp., (144A), 8.625%, due 08/15/07 $ 843,625 *
2,000,000 County Seat Stores, Inc., (144A), 12.75%, due 11/01/04 2,020,000 *
1,325,000 Finlay Fine Jewelry Corp., 10.625%, due 05/01/03 1,391,250
2,343,000 Guitar Center Management, Inc., 11%, due 07/01/06 2,577,300
475,000 Leslie's Poolmart, (144A), 10.375%, due 07/15/04 491,625 *
2,000,000 Michael's Stores, Inc., 10.875%, due 06/15/06 2,175,000
450,000 Specialty Retailers, Inc., 8.5%, due 07/15/05 459,000
1,650,000 Zale Corp., (144A), 8.5%, due 10/01/07 1,633,500 *
--------------
Total Retailers 11,591,300
--------------
Transportation (1.4%)
500,000 Atlas Air, Inc., (144A), 10.75%, due 08/01/05 527,500 *
810,000 International Shipholding Corp., 9%, due 07/01/03 828,225
680,000 Moran Transportation Company, Inc., 11.75%, due 07/15/04 754,800
825,000 Von Hoffman Press, Inc., (144A), 10.375%, due 05/15/07 874,500 *
--------------
Total Transportation 2,985,025
--------------
TOTAL CONSUMER CYCLICALS (COST: $44,048,308) 45,651,880
--------------
CONSUMER NON-CYCLICALS (16.7%)
Cable (2.8%)
1,000,000 Adelphia Communications Corp., (144A), 9.25%, due 10/01/02 995,000 *
1,175,000 Cablevision Systems Corp., 9.875%, due 05/15/06 1,242,564
175,000 Century Communications Corp., 9.5%, due 08/15/00 181,125
500,000 Comcast Corp., 9.125%, due 10/15/06 531,875
400,000 Comcast Corp., 9.375%, due 05/15/05 429,500
975,000 Jones Intercable, Inc., 8.875%, due 04/01/07 1,014,000
600,000 Rogers Cablesystems of America, Inc., Series B, 10%, due 03/15/05 651,000
750,000 Rogers Communications, Inc., 8.875%, due 07/15/07 750,000
--------------
Total Cable 5,795,064
--------------
Food & Drug Retailers (2.7%)
900,000 Jitney Jungle Stores, Inc., 12%, due 03/01/06 1,010,250
375,000 Jitney Jungle Stores, Inc., (144A), 10.375%, due 09/15/07 390,000 *
250,000 Quality Food Centers, Inc., 8.7%, due 03/15/07 252,500
2,920,000 Ralphs Grocery Co., 10.45%, due 06/15/04 3,219,300
700,000 Stater Brothers Holdings, Inc., (144A), 9%, due 07/01/04 712,250 *
--------------
Total Food & Drug Retailers 5,584,300
--------------
Health & Hospital Management (5.8%)
3,875,000 Dade International, Inc., Series B, 11.125%, due 05/01/06 4,301,250
2,700,000 Integrated Health Services, Inc., (144A), 9.5%, due 09/15/07 2,774,250 *
1,000,000 Physician Sales & Service, Inc., (144A), 8.5%, due 10/01/07 980,000 *
2,000,000 Tenet Healthcare Corp., 8.625%, due 01/15/07 2,045,000
2,000,000 Vencor, Inc., (144A), 8.625%, due 07/15/07 1,940,000 *
--------------
Total Health & Hospital Management 12,040,500
--------------
</TABLE>
* Restricted Security. (See Note 6).
See accompanying Notes to Financial Statements.
11
<PAGE>
TCW Galileo High Yield Bond Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ------------- --------------------------------- --------------
<S> <C> <C>
Other Consumer Non-Cyclicals (5.4%)
$ 255,000 American Safety Razor Co., Series B, 9.875%, due 08/01/05 $ 267,750
1,395,000 Cott Corp., 9.375%, due 07/01/05 1,464,750
600,000 Delta Beverage Group, 9.75%, due 12/15/03 624,000
4,700,000 International Home Foods, Inc., 10.375%, due 11/01/06 4,982,000
175,000 NBTY, Inc., (144A), 8.625%, due 09/15/07 170,625 *
3,000,000 North Atlantic Trading, Inc., (144A), 11%, due 06/15/04 3,060,000 *
615,000 PMI Acquisition Corp., 10.25%, due 09/01/03 650,364
250,000 Revlon Consumer Products Corp., 9.5%, due 06/01/99 256,875
--------------
Total Other Consumer Non-Cyclicals 11,476,364
--------------
TOTAL CONSUMER NON-CYCLICALS (Cost: $33,869,268) 34,896,228
--------------
INDUSTRIALS (35.2%)
Building Materials & Construction (2.7%)
500,000 Atrium Companies, Inc., 10.5%, due 11/15/06 515,000
1,750,000 Johns Manville Corp., 10.875%, due 12/15/04 1,946,875
1,250,000 K Hovnanian Entertainment, 11.25%, due 04/15/02 1,312,500
820,000 Standard Pacific Corp., 10.5%, due 03/01/00 865,100
485,000 Trizec Finance Corp., 10.875%, due 10/15/05 552,294
425,000 U.S. Home Corp., 9.75%, due 06/15/03 447,313
--------------
Total Building Materials & Construction 5,639,082
--------------
Business Services & Distribution (6.7%)
500,000 Allied Waste of North America, 10.25%, due 12/01/06 542,505
2,750,000 American Pad & Paper Co., 13%, due 11/15/05 3,210,625
225,000 Big Flower Press, Inc., 8.875%, due 07/01/07 225,000
1,500,000 Coinmach Laundry Corp., (144A), 11.75%, due 11/15/05 1,665,000 *
1,503,000 Data Documents, Inc., 13.5%, due 7/15/02 1,698,390
671,000 Envirosource, Inc., 9.75%, due 06/15/03 681,065
550,000 Federal Data Corp., (144A), 10.125%, due 08/01/05 554,125 *
3,125,000 Iron Mountain, Inc., 10.125%, due 10/01/06 3,382,813
310,000 Earle M. Jorgensen Co., 10.75%, due 03/01/00 319,300
1,265,000 Mid-American Waste Systems, Inc., 12.25%, due 02/15/03 506,000 **
648,000 Pierce Leahy Corp., 11.125%, due 07/15/06 732,240
450,000 Williams Scotsman, Inc., (144A), 9.875%, due 06/01/07 463,500 *
--------------
Total Business Services & Distribution 13,980,563
--------------
Communication Services (10.3%)
775,000 Brooks Fiber Properties, Inc., 10%, due 06/01/07 875,750
1,200,000 Comcast Cellular Holdings, Inc., (144A), 9.5%, due 05/01/07 1,242,000 *
950,000 Globalstar LP/Capital, 11.25%, due 06/15/04 935,750
275,000 Globalstar LP/Capital, (144A), 10.75%, due 11/01/04 261,938 *
900,000 Intermedia Communications, Inc., (144A), 8.875%, due 11/01/07 879,750 *
3,000,000 Mobile Telecommunications Technologies Corp., 13.5%, due 12/15/02 3,352,500
1,400,000 Nextlink Communications, 9.625%, due 10/01/07 1,400,000
350,000 Paging Network, Inc., 10.125%, due 08/01/07 357,875
4,000,000 Qwest Communications International, Inc., 0%, due 10/15/07 2,560,000
1,100,000 RCN Corp., (144A), 10%, due 10/15/07 1,083,500 *
</TABLE>
* Restricted security. (See Note 6).
** Non-income producing.
See accompanying Notes to Financial Statements.
12
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ------------- --------------------------------- --------------
<S> <C> <C>
Communication Services (Continued)
$ 580,000 Rogers Cantel, Inc., 9.375%, due 06/01/08 $ 614,800
750,000 Rogers Cantel, Inc., (144A), 8.8%, due 10/01/07 742,500 *
1,250,000 Sprint Spectrum, L.P., 11%, due 08/15/06 1,381,250
2,510,000 Teleport Communications Group, Inc., 9.875%, due 07/01/06 2,761,000
3,125,000 Telex Communications, Inc., 10.5%, due 05/01/07 3,093,750
--------------
Total Communication Services 21,542,363
--------------
Containers & Packaging (5.2%)
550,000 Bway Corp., (144A), 10.25%, due 04/15/07 591,250 *
2,050,000 Consumers International, (144A), 10.25%, due 04/01/05 2,193,500 *
500,000 Container Corp. of America, Series A, 11.25%, due 05/01/04 549,375
350,000 Container Corp. of America, Series B, 10.75%, due 05/01/02 385,000
400,000 Huntsman Packaging Corp., (144A), 9.125%, due 10/01/07 408,000 *
500,000 Owens-Illinois, Inc., 8.1%, due 05/15/07 529,285
900,000 Paperboard Industries International, Inc., (144A), 8.375%, due 09/15/07 909,000 *
1,000,000 Plastic Containers, Inc., Series B, 10%, due 12/15/06 1,052,500
2,360,000 Sweetheart Cup Corp., 9.625%, due 09/01/00 2,348,200
1,725,000 U.S. Can Corp., Series B, 10.125%, due 10/15/06 1,798,313
--------------
Total Containers & Packaging 10,764,423
--------------
Miscellaneous Manufacturing (10.3%)
1,000,000 AGCO Corp., 8.5%, due 03/15/06 1,052,200
1,800,000 BE Aerospace, Inc., 9.75%, due 03/01/03 1,881,000
2,570,000 Communications and Power Industries, Inc., Series B, 12%, due 08/01/05 2,852,700
500,000 Doskocil Companies, Inc., (144A), 10.125%, due 09/15/07 517,500 *
1,200,000 GSI Group, Inc., (144A), 10.25%, due 11/01/07 1,215,000 *
500,000 International Wire Group, (144A), 11.75%, due 06/01/05 535,000 *
1,500,000 Jordan Industries, Inc., (144A), 0%, due 04/01/09 847,500 *
2,000,000 Jordan Telecommunications Products, Inc., (144A), 9.875%, due 08/01/07 2,030,000 *
600,000 Mettler-Toledo, Inc., 9.75%, due 10/01/06 673,500
850,000 Neenah Corp., Series B, 11.125%, due 05/01/07 922,250
1,500,000 Rohr Industries, Inc., 11.625%, due 05/15/03 1,680,000
4,905,000 Talley Manufacturing and Technology, Inc., 10.75%, due 10/15/03 5,309,663
775,000 United Defense Industries, Inc., (144A), 8.75%, due 11/15/07 775,000 *
650,000 Viasystems, Inc., (144A), 9.75%, due 06/01/07 664,625 *
575,000 Wavetek Corp., (144A), 10.125%, due 06/15/07 598,000 *
--------------
Total Miscellaneous Manufacturing 21,553,938
--------------
TOTAL INDUSTRIALS (Cost: $72,590,838) 73,480,369
--------------
CREDIT SENSITIVE (5.1%)
Financial Services (2.9%)
1,310,000 American Annuity Group, Inc., 11.125%, due 02/01/03 1,364,784
1,525,000 First Nationwide Holdings, 10.625%, due 10/01/03 1,669,875
2,205,000 First Nationwide Holdings, 12.25%, due 05/15/01 2,447,550
630,000 Reliance Group Holdings, Inc., 9%, due 11/15/00 655,200
--------------
Total Financial Services 6,137,409
--------------
</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>
Principal
Amount CORPORATE FIXED INCOME SECURITIES Value
- ------------- --------------------------------- --------------
<S> <C> <C>
CREDIT SENSITIVE (CONTINUED)
Utilities (2.2%)
$ 1,850,000 California Energy Company, Inc., 0%, due 01/15/04 $ 2,009,563
452,085 Midland Cogeneration Ventures, L.P., Series C-91, 10.33%, due 07/23/02 483,731
1,696,523 Panda Funding Corp., 11.625%, due 08/20/12 1,764,384
290,000 Texas-New Mexico Power, Inc., 10.75%, due 09/15/03 317,077
--------------
Total Utilities 4,574,755
--------------
TOTAL CREDIT SENSITIVE (Cost: $10,540,223) 10,712,164
--------------
TOTAL CORPORATE FIXED INCOME SECURITIES
(Cost: $196,980,432) (96.5%) 201,479,745
--------------
<CAPTION>
Number of
Shares, Rights
or Warrants EQUITY SECURITIES
- --------------- -----------------
<S> <C> <C>
6,969 Fitzgerald Gaming Corp., Warrants, expire 12/19/98 13,938 **
200 PureTec Corp., Common Stock 525 **
2,920 Terex Corp., Stock Appreciation Rights, expire 05/15/02 58,400 **
--------------
TOTAL EQUITY SECURITIES (COST: $31,766) (0.0%) 72,863
--------------
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENT (Cost: $8,340,581) (4.0%)
- --------------- -----------------------------------------------
<S> <C> <C>
$ 8,340,581 Bank of New York Depository Reserve, 4.6%, due 11/03/97 8,340,581
--------------
TOTAL INVESTMENTS (Cost $205,352,779) (100.5%) 209,893,189
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.5%) (1,132,379)
--------------
NET ASSETS (100%) $ 208,760,810
==============
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
14
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mortgage Backed Securities Fund
October 31, 1997
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------ ----------------------- ----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (13.3% of Net Assets)
$ 2,283 CMO Mortgage Investors Trust (6-J), 1752.4%,
due 02/22/21, (I/O) $ 33,789
456,860 Federal Home Loan Mortgage Corp. (1087-G), 8.5%,
due 08/15/20, (PAC) 462,771
639,816 Federal National Mortgage Association (92-152-K), 7%,
due 04/25/99 638,254
3,754,908 Ryland Acceptance Corporation Four (63-D), 8.75%,
due 04/01/19 3,818,742
2,366,267 Salomon Brothers Mortgage Securities VII (96-2-A1), 7.5%,
due 05/25/26 2,398,689
1,487,244 Sears Mortgage Securities (88-A-A2), 0.722%,
due 05/25/18, (I/O) 15,170
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (Cost: $7,919,959) $ 7,367,415
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS -
VARIABLE RATE (12.1%)
797 Federal National Mortgage Association (91-130-SQ), 6,725.76%,
due 09/25/21, (I/O) (I/F) 118,845
95,387 Guardian Savings and Loan Association (88-1-A), 6.5566%,
due 07/25/18 81,079
221,072 Guardian Savings and Loan Association (88-3-A), 6.8495%,
due 11/25/18 187,912
209,260 Guardian Savings and Loan Association (89-3-A), 7.6524%,
due 05/25/19 177,871
991,228 Guardian Savings and Loan Association (89-4-A), 7.9415%,
due 07/25/19 941,666
1,262,027 Guardian Savings and Loan Association (89-5-A), 8.1328%,
due 07/25/19 1,198,925
338,501 Residential Funding Mortgage Securities I (89-4B-B), 6.75%,
due 07/25/19 327,817
2,370 Resolution Trust Corp. (91-6-D2), 3,121.1%, due 08/25/20, (I/O) 88,692
4,508 Resolution Trust Corp. (91-6-C2), 3,351.72%, due 09/25/28, (I/O) 182,421
3,172,503 Resolution Trust Corp. (92-M4-A3), 7.94%, due 09/25/21 3,210,177
165,831 Western Federal Savings and Loan Association (88-9-A),
6.6493%, due 12/25/18 165,595
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
VARIABLE RATE (Cost: $7,534,903) 6,681,000
-------------
NON-GOVERNMENTAL AGENCY VARIABLE RATE
PASS-THROUGH SECURITIES (Cost: $1,006,541) (1.8%)
1,016,137 Greenwich Capital Acceptance, Inc. (91-03), (Private Placement),
8.5638%, due 08/25/19 983,113 *
-------------
</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.
* Restricted security. (See Note 6)
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
- ------------ ----------------------- ----------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (1.3%)
$ 85,511 Federal Home Loan Mortgage Corp., Pool #212346, 9.5%,
due 08/01/01 $ 88,744
622,154 Federal National Mortgage Association, Pool #163492, 8.5%,
due 05/01/16 650,736
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (Cost: $733,474) 739,480
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -
VARIABLE RATE PASS-THROUGH SECURITIES (65.1%)
1,897,844 Federal Home Loan Mortgage Corp., Pool #785630, 6.715%,
due 07/01/26 1,921,472
91,714 Federal Home Loan Mortgage Corp., Pool #770584, 7.125%,
due 05/01/19 93,139
894,621 Federal Home Loan Mortgage Corp., Pool #410013, 7.916%,
due 12/01/24 920,341
211,984 Federal Home Loan Mortgage Corp., Pool #865270, 8.322%,
due 12/01/18 220,890
320,195 Federal Home Loan Mortgage Corp., Pool #865275, 8.352%,
due 02/01/19 334,825
116,002 Federal Home Loan Mortgage Corp., Pool #865009, 8.436%,
due 11/01/18 120,492
162,939 Federal Home Loan Mortgage Corp., Pool #865006, 8.525%,
due 08/01/18 171,158
693,243 Federal Home Loan Mortgage Corp., Pool #310005, 8.915%,
due 11/01/19 716,423
1,490,088 Federal National Mortgage Association, Pool #394575, 5.645%,
due 07/01/27 1,512,991
2,346,567 Federal National Mortgage Association, Pool #394996, 5.656%,
due 08/01/27 2,373,530
2,736,057 Federal National Mortgage Association, Pool #400040, 5.667%,
due 09/01/27 2,765,771
2,284,706 Federal National Mortgage Association, Pool #397897, 5.775%,
due 08/01/27 2,314,019
1,955,732 Federal National Mortgage Association, Pool #376663, 5.836%,
due 06/01/27 1,968,288
2,796,223 Federal National Mortgage Association, Pool #369080, 5.851%,
due 04/01/27 2,850,218
1,969,622 Federal National Mortgage Association, Pool #284916, 5.861%,
due 06/01/27 1,987,822
1,843,876 Federal National Mortgage Association, Pool #393943, 5.869%,
due 07/01/27 1,872,770
2,495,392 Federal National Mortgage Association, Pool #400472, 5.905%,
due 09/01/27 2,523,341
2,028,105 Federal National Mortgage Association, Pool #402972, 5.92%,
due 10/01/27 2,047,798
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------ ----------------------- ----------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -
VARIABLE RATE PASS-THROUGH SECURITIES (Continued)
$2,118,746 Federal National Mortgage Association, Pool #313323, 5.924%,
due 12/01/26 $ 2,140,908
1,693,573 Federal National Mortgage Association, Pool #392275,
6.031%, due 06/01/27 1,727,970
2,516,298 Federal National Mortgage Association, Pool #313343,
6.241%, due 02/01/27 2,570,046
1,342,310 Federal National Mortgage Association, Pool #358869,
7.712%, due 09/01/26 1,382,553
384,951 Federal National Mortgage Association, Pool #111365,
7.742%, due 09/01/19 401,370
904,896 Federal National Mortgage Association, Pool #303334,
7.882%, due 04/01/25 937,237
123,534 Federal National Mortgage Association, Pool #096193,
8.244%, due 09/01/18 129,151
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -
VARIABLE RATE PASS-THROUGH SECURITIES
(Cost: $35,914,976) 36,004,523
-------------
TOTAL FIXED INCOME SECURITIES (Cost: $53,109,853) (93.6%) 51,775,531
-------------
SHORT-TERM INVESTMENTS (Cost: $2,861,668) (5.2%)
------------------------------------------------
2,861,197 Repurchase Agreement, Goldman Sachs, dated 10/31/97,
5.67%, due 11/03/97 (Collateralized by $2,934,916 current face
Federal National Mortgage Association, Pool #296042, 6.14%,
due 12/01/33, valued at $2,939,502) 2,861,197
471 Bank of New York Depository Reserve, 4.6%, due 11/03/97 471
-------------
2,861,668
-------------
TOTAL INVESTMENTS (Cost: $55,971,521) (98.8%) 54,637,199
EXCESS OF OTHER ASSETS OVER LIABILITIES (1.2%) 669,913
-------------
NET ASSETS (100%) $ 55,307,112
=============
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
TCW Galileo Long-Term Mortgage Backed Securities Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
- -----------------------
Principal
Amount FIXED INCOME SECURITIES Value
- ------------- ----------------------- -------------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (47.8% OF Net Assets)
$ 2,000,000 CMC Securities Corporation III (94-A-A12), 6.75%, due 02/25/24, (PAC) $ 1,987,480
1,433,415 Citicorp Mortgage Securities, Inc. (95-2-A1), 7.5%, due 04/25/25 1,448,093
21,785 Federal Home Loan Mortgage Corp. (1484-K), 6%, due 01/15/98 21,749
1,640,209 Federal Home Loan Mortgage Corp. (1796-A-E), 6%, due 09/15/08 1,611,523
1,782,000 Federal Home Loan Mortgage Corp. (1662-N), 6.25%, due 01/15/09 1,726,063
997,034 Federal Home Loan Mortgage Corp. (1805-A-A), 6.5%, due 12/15/08 998,737
1,000,000 Federal Home Loan Mortgage Corp. (1844 E), 6.5%, due 10/15/13 982,586
827,033 Federal Home Loan Mortgage Corp. (1541-J), 6.5% , due 07/15/23 828,240
3,144,107 Federal Home Loan Mortgage Corp. (1717-MA), 6.5%, due 04/15/24 3,073,270
310,642 Federal Home Loan Mortgage Corp. (1175 C), 8%, due 01/15/21, (TAC) 318,082
2,003,310 Federal Home Loan Mortgage Corp. -Government National
Mortgage Association (43-OA), 6.5%, due 07/17/23 1,963,985
2,000,000 Federal National Mortgage Association (93-X-130A-NA), 6.5%, due 05/25/23 1,945,180
1,894,734 Federal National Mortgage Association (93-223-EA), 6.5%, due 12/25/23, (PAC) 1,848,843
487,907 Federal National Mortgage Association (93-2-B), 7.2%, due 11/25/03 500,432
1,000,000 Federal National Mortgage Association (92-215-PL), 7.25%, due 11/25/21, (PAC) 1,037,820
4,000,000 Federal National Mortgage Association (G92-29-J), 8%, due 07/25/22 4,264,360
4,145,426 Government National Mortgage Association (94-2-Z), 7.99125%, due 07/16/24 4,364,014
1,500,000 Residential Funding Mortgage Securities I (95-S7-A9), 8%, due 05/25/10, (I/O) 302,932
4,551,404 Ryland Acceptance Corporation Four (63-D), 8.75%, due 04/01/19 4,628,778
1,577,511 Salomon Brothers Mortgage Securities VII (96-2-A1), 7.5%, due 05/26/26 1,599,126
2,139,106 Securitized Asset Sales, Inc. (95-B-A2), 7.41%, due 09/25/24 2,150,307
1,319,127 Securitized Asset Sales, Inc. (95-4-A7), 7.5%, due 11/25/25 1,318,877
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
FIXED RATE (Cost: $37,847,396) 38,920,477
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS -
VARIABLE RATE (12.8%)
1,500,000 CMC Securities Corporation III (94-A-A22), 7.231%, due 02/25/24, (I/F) 1,158,750
2,000,000 Federal Home Loan Mortgage Corp. (1422-SA), 8.2159%, due 11/15/07, (I/F) 1,914,360
2,000,000 Federal Home Loan Mortgage Corp. (1620-SB), 10%, due 11/15/23, (I/F) 1,720,420
2,288,691 Federal National Mortgage Association (93-189-S), 7.35799%, due 10/25/23, (I/F) 2,084,883
3,000,000 Federal National Mortgage Association (94-40 SA), 7.67812%, due 3/25/24, (I/F) 2,539,770
1,000,000 Federal National Mortgage Association (93-202-SZ), 10%, due 11/25/23, (I/F) (PAC) 958,080
73,817 Northwestern Acceptence Corp. I (A-1), 6.25%, due 02/20/18 73,530
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS -
VARIABLE RATE (Cost: $8,640,990) 10,449,793
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (23.0%)
1,442,295 FHA (#000-13002), 7.125%, due 03/01/04 1,426,070
2,863,784 FHA (#012-11216), 7.185%, due 05/01/29 2,842,306
1,907,088 FHA (#044-10592), 7.625%, due 09/01/22 1,926,159
1,353,539 FHA (#081-11017), 7.75%, due 04/01/24 1,373,842
2,556,687 FHA (#112-43055), 9.25%, due 05/25/32 2,713,284
</TABLE>
PAC - Planned Amortization Class.
I/O - Interest Only security.
TAC - Target Amortization 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.
18
<PAGE>
TCW GALILEO FUNDS,INC
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------- ----------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (Continued)
$ 9,593 Federal Home Loan Mortgage Corp., Pool #250685, 6.5%, due 10/01/99 $ 9,640
1,282,509 Federal National Mortgage Association, Pool #310001, 6%, due 09/01/00 1,276,096
1,807,544 Federal National Mortgage Association, Pool #347216, 6%, due 09/01/00 1,857,270
10,758 Federal National Mortgage Association, Pool #62420, 7.5%, due 03/01/06 11,171
2,244,175 Federal National Mortgage Association, Pool #303786, 7.5%, due 02/01/11 2,304,498
15,752 Federal National Mortgage Association, Pool #29542, 8.75%, due 07/01/09 16,708
1,415,794 Government National Mortgage Association, Pool #365618, 7%, due 10/15/33 1,395,435
1,555,382 Government National Mortgage Association, Pool #351003, 7.5%, due 07/15/28 1,558,788
5,425 Government National Mortgage Association, Pool #176192, 8.25%, due 12/15/01 5,590
50,963 Government National Mortgage Association, Pool #3933, 8.25%, due 07/15/04 52,811
9,425 Government National Mortgage Association, Pool #217350, 9.25%, due 08/15/00 9,719
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -
FIXED RATE PASS-THROUGH SECURITIES (Cost: $18,708,954) 18,779,387
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -
VARIABLE RATE PASS-THROUGH SECURITIES (11.3%)
1,359,643 Federal Home Loan Mortgage Corp., Pool #846317, 7.628%, due 08/01/26 1,397,047
2,148,334 Federal Home Loan Mortgage Corp., Pool #846510, 7.889%, due 04/01/25 2,247,888
726,454 Federal Home Loan Mortgage Corp., Pool #755183, 7.999%, due 12/01/15 754,488
2,617,439 Federal National Mortgage Association, Pool #348025, 7.63%, due 06/01/26 2,693,188
440,401 Federal National Mortgage Association, Pool #137064, 7.657%, due 03/01/19 444,805
1,575,177 Federal National Mortgage Association, Pool #124410, 7.818%, due 07/01/22 1,631,332
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -
VARIABLE RATE PASS-THROUGH SECURITIES (Cost: $8,994,074) 9,168,748
--------------
U.S. TREASURY SECURITIES (0.4%)
197,000 Certificate Accrual Treasury Strip, 0%, due 08/15/01 158,459
177,000 Certificate Accrual Treasury Strip, 0%, due 05/15/06 106,112
112,000 Certificate Accrual Treasury Strip, 0%, due 08/15/08 58,053
--------------
TOTAL U.S. TREASURY SECURITIES (Cost: $307,268) 322,624
--------------
TOTAL FIXED INCOME SECURITIES (Cost: $74,498,682) (95.3%) 77,641,029
--------------
SHORT-TERM INVESTMENT (Cost: $3,985,557) (4.9%)
-----------------------------------------------
3,985,557 Repurchase Agreement, Goldman Sachs, dated 10/31/97,
5.67%, due 11/03/97 (Collateralized by $4,088,264 current face,
Federal National Mortgage Association, Pool #296042, 6.14%,
due 12/01/33, valued at $4,094,652) 3,985,557
--------------
TOTAL INVESTMENTS (COST: $78,484,239) (100.2%) 81,626,586
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.2% ) (184,749)
--------------
NET ASSETS (100%) $ 81,441,837
==============
</TABLE>
See accompanying Notes to Financial Statements.
19
<PAGE>
TCW Galileo Convertible Securities Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
- -----------------------
Number
of Shares
or Principal
Amount FIXED INCOME AND EQUITY SECURITIES Value
- ------------ ---------------------------------- -------------
<C> <S> <C>
BASIC INDUSTRIES (7.3% OF NET ASSETS)
OIL & GAS - DOMESTIC (4.2%)
$ 500,000 Baker Hughes, Inc., 0%, due 05/05/08 $ 439,615
7,200 EVI, Inc., (144A), $2.50 Convertible Preferred 362,700 *
330,000 Loews Corp., Exchangeable Diamond Offshore, 3.125%,
due 09/15/07 372,900
6,300 Unocal Corp., $3.125 Convertible Preferred 376,425
-------------
Total Oil & Gas - Domestic 1,551,640
-------------
OIL AND GAS - INTERNATIONAL (0.8%)
3,200 Occidental Petroleum Corp., (Canada) Exchangeable Canadian
Occidental Petroleum, $3.00 Convertible Preferred 302,400
-------------
PAPER, FOREST PRODUCTS & CONTAINERS (0.8%)
$ 305,000 Metsa Serla, OYJ, (Finland), (144A), 4.375%, due 10/15/02 303,475 *
-------------
TRANSPORTATION (1.5%)
$ 240,000 Halter Marine Group, Inc., (144A), 4.5%, due 09/15/04 303,000 *
3,500 Hvide Marine, Inc., (144A), $3.25 Convertible Preferred 233,590 *
-------------
Total Transportation 536,590
-------------
TOTAL BASIC INDUSTRIES (Cost:$2,366,230) 2,694,105
-------------
CAPITAL GOODS (26.2%)
AEROSPACE & CONGLOMERATES (2.5%)
$ 305,000 Hexcel Corp., 7%, due 08/01/03 547,475
$ 330,000 Morgan Stanley Group Inc., Exchangeable Boeing Co., 0%,
due 09/30/00 360,941
-------------
Total Aerospace & Conglomerates 908,416
-------------
ELECTRONICS (5.8%)
$ 95,000 Adaptec, Inc., 4.75%, due 02/01/04 107,469
$ 285,000 Adaptec, Inc., (144A), 4.75%, due 02/01/04 322,406 *
$ 355,000 Premiere Technologies, (144A), 5.75%, due 07/01/04 425,113 *
$ 385,000 Tel-Save Holdings, Inc., (144A), 4.5%, due 09/15/02 422,056 *
$ 885,000 XILINX, Inc., (144A), 5.25%, due 11/01/02 882,788 *
-------------
Total Electronics 2,159,832
-------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
20
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount FIXED INCOME AND EQUITY SECURITIES Value
- ---------- ----------------------------------- -------------
<C> <S> <C>
INFORMATION PROCESSING (5.5%)
7,700 Morgan Stanley Group, Inc., Exchangeable Cisco Systems, Inc.,
$4.00 Convertible Preferred $ 605,120
$ 635,000 Safeguard Scientifics Inc., (144A), 6%, due 02/01/06 695,325 *
$ 385,000 Vantive Corp., (144A), 4.75%, due 09/01/02 361,769 *
$ 365,000 Wind River Systems, Inc., (144A), 5%, due 08/01/02 379,600 *
-------------
Total Information Processing 2,041,814
-------------
OFFICE EQUIPMENT & SUPPLIES (1.0%)
$ 350,000 Xerox Corp., 2.875%, due 07/01/02 354,813
-------------
POLLUTION CONTROL (8.2%)
$ 900,000 Thermo Electron Corp., Euro, 4.25%, due 01/01/03 1,011,600
$ 800,000 USA Waste Systems, Inc., 4%, due 02/01/02 846,000
$ 1,000,000 United States Filter Corp., 4.5%, due 12/15/01 1,183,750
-------------
Total Pollution Control 3,041,350
-------------
TELECOMMUNICATION EQUIPMENT (3.2%)
$ 1,470,000 Motorola, Inc., 0%, due 09/27/13 1,168,650
-------------
TOTAL CAPITAL GOODS (Cost:$9,118,751) 9,674,875
-------------
CONSUMER CYCLICALS (COST : $405,000) (1.2%)
AUTOMOTIVE (1.2%)
$ 405,000 Tower Automotive, Inc., (144A), 5%, due 08/01/04 425,250 *
-------------
CONSUMER STAPLES (55.5%)
DRUGS & HOSPITAL SUPPLY (3.3%)
$ 580,000 Sandoz Capital BVI, Ltd., (Switzerland), Euro, 2%, due 10/06/02 867,825
$ 195,000 Sepracor, Inc., Euro, 7%, due 12/01/02 366,194
-------------
Total Drugs & Hospital Supply 1,234,019
-------------
ENTERTAINMENT, LEISURE & MEDIA (10.7%)
9,500 Chancellor Media Corp., (144A), $3.00 Convertible Preferred 586,321 *
$ 345,000 Family Golf Centers, Inc., (144A), 5.75%, due 10/15/04 339,394 *
20,300 Houston Industries, Inc., Exchangeable Time Warner, Inc.,
$3.215 Convertible Preferred 1,111,425
16,100 Merrill Lynch & Company, Inc., Exchangeable Cox
Communications, Inc., $1.3725 Convertible Preferred 436,713
4,600 TCI Pacific Communications, Inc., $5.00 Convertible Preferred 641,125
$ 400,000 Tele-Communications International, Inc., 4.5%, due 02/15/06 337,000
8,500 U.S. West, Inc., Exchangeable U.S. West Media Group,
$2.25 Convertible Preferred 487,688
-------------
Total Entertainment, Leisure & Media 3,939,666
-------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
21
<PAGE>
TCW Galileo Convertible Securities Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount FIXED INCOME AND EQUITY SECURITIES Value
- ---------- ----------------------------------- -------------
<C> <S> <C>
RETAIL - FOOD & DRUG (1.8%)
$ 605,000 Rite Aid Corp., (144A), 5.25%, due 09/15/02 $ 651,888 *
-------------
FOODS, HOTELS & RESTAURANTS (9.8%)
7,000 Apple South, Inc., (144A), $3.50 Convertible Preferred 504,000 *
$ 405,000 Einstein/Noah Bagel Corp., (144A), 7.25%, due 06/01/04 329,569 *
$ 755,000 Fine Host Corp., (144A), 5%, due 11/01/04 690,825 *
$ 1,030,000 Hospitality Franchise Service, Inc., 4.75%, due 03/01/03 1,275,912
1,000 Host Marriott Financial Trust, $3.375 Convertible Preferred 65,250
5,000 Host Marriott Financial Trust, (144A), $3.375 Convertible
Preferred 321,816 *
$ 400,000 Signature Resorts, 5.75%, due 01/15/07 429,000
-------------
Total Foods, Hotels & Restaurants 3,616,372
-------------
HEALTHCARE (9.3%)
$ 540,000 Assisted Living Concepts, Inc., 6%, due 11/01/02 594,000
$ 360,000 Atria Communities, Inc., (144A), 5%, due 10/15/02 364,500 *
$ 45,000 Concentra Managed Care, Inc., 6%, due 12/15/01 55,871
$ 300,000 Concentra Managed Care, Inc., (144A), 6%, due 12/15/01 370,635 *
8,000 Laboratory Corp. of America, $4.25 Convertible Preferred 436,000
$ 310,000 Morgan Stanley Group, Inc., Exchangeable Johnson & Johnson,
2%, due 03/29/02 332,522
$ 50,000 Physician Resource, (144A), 6%, due 12/01/01 43,225 *
$ 300,000 Physician Resource, (144AI, Reg D), 6%, due 12/01/01 259,347 *
$ 50,000 Quintiles Transnational Corp., 4.25%, due 05/31/00 51,750
$ 320,000 Quintiles Transnational Corp., (144AI, Reg D), 4.25%,
due 05/31/00 348,599 *
$ 285,000 Sunrise Assisted Living, (144A), 5.5%, due 06/15/02 342,356 *
$ 245,000 Tenet Healthcare Corp., Exchangeable Vencor, Inc.,
6%, due 12/01/05 239,488
-------------
Total Healthcare 3,441,293
-------------
RETAIL (9.0%)
$ 350,000 Charming Shoppes, Inc., 7.5%, due 07/15/06 343,438
$ 1,285,000 Costco Companies, Inc., (144A), 0%, due 08/19/17 695,506 *
$ 665,000 Home Depot, Inc., 3.25%, due 10/01/01 857,019
9,100 Kmart Corp., $3.875 Convertible Preferred 518,131
$ 585,000 Staples, Inc., Euro, 4.5%, due 10/01/00 742,650
$ 125,000 Staples, Inc., (144A), 4.5%, due 10/01/00 158,262 *
-------------
Total Retail 3,315,006
-------------
SERVICES - BUSINESS (11.6%)
$ 495,000 Corestaff, Inc., 2.94%, due 08/15/04 407,138
$ 1,050,000 CUC International, Inc., (144A), 3%, due 02/15/02 1,194,375 *
7,200 Dimon, Inc., $2.008 Convertible Preferred 180,000
$ 440,000 Interpublic Group of Companies, Inc., (144A), 1.8%, due 09/16/04 359,700 *
$ 560,000 Omnicom Group, Inc., (144A), 4.25%, due 01/03/07 704,200 *
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
22
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount FIXED INCOME AND EQUITY SECURITIES Value
- ---------- ----------------------------------- -------------
<C> <S> <C>
SERVICES - BUSINESS (CONTINUED)
$ 350,000 Personnel Group of America, Inc., (144A), 5.75%, due 07/01/04 $ 409,500 *
$ 350,000 Smartalk Teleservices, Inc., (144A), 5.75%, due 09/15/04 367,938 *
9,500 Snyder Communications, Inc., $1.6778 Convertible Preferred 270,750
$ 400,000 U.S. Office Products Co., 5.5%, due 05/15/03 375,612
-------------
Total Services - Business 4,269,213
-------------
TOTAL CONSUMER STAPLES (Cost: $18,334,976) 20,467,457
-------------
CREDIT SENSITIVE (5.7%)
REAL ESTATE (1.4%)
$ 220,000 LTC Properties, Inc., 8.25%, due 07/01/01 260,150
$ 200,000 LTC Properties, Inc., 8.5%, due 01/01/01 262,250
-------------
Total Real Estate 522,400
-------------
INSURANCE (1.9%)
1,600 PennCorp Financial Group, Inc., (144A), $3.50
Convertible Preferred 86,112 *
4,500 PennCorp Financial Group, Inc., (144AI, Reg D), $3.50
Convertible Preferred 242,190 *
10,200 Salomon, Inc., Exchangeable Financial Security Assurance
Holdings, Ltd., $2.30 Convertible Preferred 374,213
-------------
Total Insurance 702,515
-------------
FINANCIAL SERVICES (2.4%)
7,400 SunAmerica Corp., $3.188 Convertible Preferred 325,138
18,300 Westpac Banking Corp., Ltd., $3.135 Convertible Preferred 567,300
-------------
Total Financial Services 892,438
-------------
TOTAL CREDIT SENSITIVE (Cost:$1,919,171) 2,117,353
-------------
TOTAL FIXED INCOME AND EQUITY SECURITIES
(COST: $32,144,128) (95.9%) 35,379,040
-------------
SHORT-TERM INVESTMENT (COST: $1,380,527) (3.7%)
-----------------------------------------------
$ 1,380,527 Bank of New York Depository Reserve, 4.6%, due 11/03/97 1,380,527
-------------
TOTAL INVESTMENTS (COST: $33,524,655) (99.6%) 36,759,567
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.4%) 130,473
-------------
NET ASSETS (100%) $ 36,890,040
=============
</TABLE>
* Restricted security. (Note 6)
See accompanying Notes to Financial Statements.
23
<PAGE>
TCW Galileo Core Equity Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
- -----------------------
Number
Of Shares EQUITY SECURITIES VALUE
--------- ----------------- ------------
<S> <C> <C>
BASIC INDUSTRIES (9.5% OF NET ASSETS)
Transportation (9.5%)
13,000 AMR Corp. $ 1,513,688
45,733 Burlington Northern Santa Fe 4,344,635
52,100 Delta Air Lines, Inc. 5,249,075
41,700 UAL Corp. 3,653,962
------------
TOTAL BASIC INDUSTRIES (Cost: $10,257,066) 14,761,360
------------
CAPITAL GOODS (36.5%)
Aerospace (6.5%)
100,500 Boeing Co. 4,811,438
75,200 United Technologies Corp. 5,264,000
------------
Total Aerospace 10,075,438
------------
Electronics, Semiconductors & Instruments (8.7%)
40,900 Honeywell, Inc. 2,783,756
119,400 Intel Corp. 9,193,800
45,500 Oracle Corp. 1,628,047 **
------------
Total Electronics, Semiconductors & Instruments 13,605,603
------------
Telecommunications Equipment (7.7%)
94,000 Cisco Systems, Inc. 7,710,938
29,800 Lucent Technologies, Inc. 2,456,638
45,600 3Com Corp. 1,889,550 **
------------
Total Telecommunications Equipment 12,057,126
------------
Information Processing (9.0%)
62,300 Computer Sciences Corp. 4,419,406
55,200 Microsoft Corp. 7,176,000
30,700 Xerox Corp. 2,434,894
------------
Total Information Processing 14,030,300
------------
Machinery (3.0%)
91,900 Caterpillar, Inc. 4,709,875
------------
Services (1.6%)
84,000 Corrections Corp. of America 2,562,000 **
------------
TOTAL CAPITAL GOODS (Cost: $32,941,023) 57,040,342
------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
24
<PAGE>
TCW GALILEO FUNDS, INC.
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
--------- ----------------- ------------
<S> <C> <C>
CONSUMER CYCLICALS (8.1%)
Autos & Auto Parts (8.1%)
140,226 Ford Motor Co. $ 6,126,123
71,700 Lear Seating Corp. 3,446,081
47,800 Magna International, Inc. 3,148,825
------------
TOTAL CONSUMER CYCLICALS (Cost: $9,153,300) 12,721,029
------------
CONSUMER STAPLES (32.5%)
Beverages, Distributions & Restaurants (2.2%)
92,800 PepsiCo, Inc. 3,416,200
------------
Cosmetics And Household Products (2.5%)
57,400 Procter & Gamble Co. 3,903,200
------------
Foods & Restaurants (1.9%)
60,600 Kellogg Co. 2,609,587
9,280 Tricon Global Restaurants, Inc. 281,300 **
------------
Total Foods & Restuarants 2,890,887
------------
Healthcare (9.3%)
38,600 Johnson & Johnson 2,214,675
78,600 Lilly (Eli) & Co. 5,256,375
35,600 United Healthcare Corp. 1,648,725
38,300 Warner-Lambert Co. 5,484,081
------------
Total Healthcare 14,603,856
------------
Leisure, Entertainment, Media & Hotels (8.3%)
116,400 Mirage Resorts, Inc. 2,910,000 **
195,891 Westinghouse Electric Corp. 5,178,868
83,600 Time Warner, Inc. 4,822,675
------------
Total Leisure, Entertainment, Media & Hotels 12,911,543
------------
Retail (5.6%)
119,699 Home Depot, Inc. 6,658,257
62,800 Tandy Corp. 2,158,750
------------
Total Retail 8,817,007
------------
Tobacco (2.7%)
104,400 Philip Morris Companies, Inc. 4,136,850
------------
TOTAL CONSUMER STAPLES (Cost: $40,406,570) 50,679,543
------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
25
<PAGE>
TCW Galileo Core Equity Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
Number
Of Shares EQUITY SECURITIES Value
--------- ----------------- ------------
<S> <C> <C>
CREDIT SENSITIVE (13.3%)
Financial Services (13.3%)
63,500 Associates First Capital Corp. $ 4,040,188
39,000 Citicorp 4,877,437
82,000 Federal National Mortgage Association 3,971,875
51,300 Marsh & McLennan Companies, Inc. 3,642,300
63,000 Merrill Lynch & Co., Inc. 4,260,375
------------
TOTAL CREDIT SENSITIVE (Cost: $12,624,086) 20,792,175
------------
TOTAL INVESTMENTS (COST: $105,382,045) (99.9%) 155,994,449
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.1%) 118,544
------------
NET ASSETS (100%) $156,112,993
============
</TABLE>
See accompanying Notes to Finacial Statements.
26
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Earnings Momentum Fund
October 31, 1997
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of Shares EQUITY SECURITIES Value
- ---------------- ----------------- -------------
<S> <C> <C>
CAPITAL GOODS (32.5% of Net Assets)
Aerospace & Defense (1.7%)
59,900 BE Aerospace, Inc. $ 1,684,687 **
-------------
Computer Software & Services (7.1%)
11,300 Aspect Development, Inc. 528,275 **
40,000 BDM International, Inc. 885,000 **
50,500 Ciber, Inc. 2,234,625 **
17,400 Hall, Kinion & Associates, Inc. 271,875 **
70,000 Legato Systems, Inc. 2,992,500 **
14,500 RWD Technologies, Inc. 326,250 **
-------------
Total Computer Software & Services 7,238,525
-------------
Electronics (9.3%)
31,125 AFC Cable Systems, Inc. 883,172 **
113,400 Anicom, Inc. 1,757,700 **
64,700 Bolder Technologies Corp. 768,312 **
84,600 C.P. Clare Corp. 1,427,625 **
29,900 ECI Telecommunications, Ltd. (Israel) 825,987
14,700 Genesys Telecommunications Laboratories, Inc. 470,400 **
27,000 Integrated Circuit Systems, Inc. 924,750 **
50,400 MRV Communications, Inc. 1,474,200 **
4,700 Tollgrade Communications, Inc. 115,738
42,500 Sheldahl, Inc. 828,750 **
-------------
Total Electronics 9,476,634
-------------
Information Processing (9.7%)
2,400 Advantage Learning Systems, Inc. 60,600 **
31,900 Aspen Technologies, Inc. 1,200,237 **
54,500 Citrix Systems, Inc. 4,002,344 **
67,800 Computer Products, Inc. 1,847,550 **
10,500 Great Plains Software, Inc. 250,687 **
43,900 QAD, Inc. 620,088 **
29,800 Radiant Systems, Inc. 540,125 **
21,400 Saville Systems, PLC (ADR) (Ireland) 1,278,650 **
3,600 TSI International Software, Ltd. 39,150 **
-------------
Total Information Processing 9,839,431
-------------
Office Equipment & Building Supplies (1.1%)
28,400 Daisytek International Corp. 1,082,750 **
-------------
</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
- -------------- ----------------- -------------
Pollution Control (3.6%)
<S> <C> <C> <C>
3,100 Casella Waste Systems, Inc. $ 68,587
11,300 Culligan Water Technologies, Inc. 481,663 **
50,400 Tetra Tech, Inc. 1,316,700 **
79,100 Tetra Technologies, Inc. 1,824,244 **
-------------
Total Pollution Control 3,691,194
-------------
TOTAL CAPITAL GOODS (Cost: $23,480,321) 33,013,221
-------------
CONSUMER CYCLICALS (1.6%)
Autos & Auto Parts (1.6%)
25,100 Dura Automotive Systems, Inc. 778,100 **
85,900 Miller Industries, Inc. 869,737 **
-------------
TOTAL CONSUMER CYCLICALS (Cost: $1,591,426) 1,647,837
-------------
CONSUMER STAPLES (56.9%)
Cosmetics & Household Products (0.5%)
35,600 Enamelon, Inc. 551,800 **
-------------
Drugs & Hospital Supply (6.7%)
66,700 BioChem Pharma, Inc. (Canada) 1,671,669 **
43,700 Gulf South Medical Supply, Inc. 1,442,100 **
35,200 PathoGenesis Corp. 1,267,200 **
25,600 Pharmacyclics, Inc. 652,800 **
25,700 Safeskin Corp. 1,166,138 **
48,500 Selfcare, Inc. 612,312 **
-------------
Total Drugs & Hospital Supply 6,812,219
-------------
Foods, Hotels & Restaurants (6.5%)
4,000 Beringer Wine Estates Holdings, Inc. 124,000
64,100 Fine Host Corp. 1,794,800 **
29,200 Il Fornaio (America) Corp. 388,725 **
79,100 Interstate Hotels Co. 2,432,325 **
17,500 O'Charley's, Inc. 323,750 **
25,950 Signature Resorts, Inc. 677,944 **
42,300 United Natural Foods, Inc. 888,300 **
-------------
Total Foods, Hotels & Restaurants 6,629,844
-------------
Healthcare (15.4%)
33,300 BioReliance Corp. 740,925 **
65,100 Complete Management, Inc. 1,131,113 **
62,600 Concentra Managed Care, Inc. 2,042,325 **
48,100 Cytyc Corp. 1,142,375 **
51,800 Envoy Corp. 1,450,400 **
</TABLE>
** Non-income producing
See accompanying Notes to Financial Statements.
28
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- -------------- ------------------ -------------
Healthcare (Continued)
<S> <C> <C>
18,000 Express Scripts, Inc. $ 1,014,750 **
51,400 Healthcare Recoveries, Inc. 950,900 **
27,700 MedCath, Inc. 436,275 **
99,400 NeoPath, Inc. 1,801,625 **
72,600 Neoprobe Corp. 726,000 **
25,300 OEC Medical Systems, Inc. 461,725 **
55,100 Ocular Sciences, Inc. 1,212,200 **
42,500 Simione Central Holdings, Inc. 472,812 **
63,333 Total Renal Care Holdings, Inc. 1,951,458 **
16,900 Urocor, Inc. 141,538 **
-------------
Total Healthcare 15,676,421
-------------
Leisure, Entertainment, Photo & Media (5.8%)
72,200 Family Golf Centers, Inc. 1,931,350 **
80,700 Gemstar International Group, Ltd. (Virgin Islands) 1,785,488 **
63,500 Macrovision Corp. 889,000 **
40,200 Metro Networks, Inc. 1,246,200 **
-------------
Total Leisure, Entertainment, Photo & Media 5,852,038
-------------
Retail (2.9%)
73,050 Just for Feet, Inc. 1,082,053 **
9,600 Linens 'N Things, Inc. 345,000 **
93,500 Marks Brothers Jewelers, Inc. 1,519,375 **
-------------
Total Retail 2,946,428
-------------
Schools (1.9%)
22,300 EduTrek International, Inc. 546,350 **
39,100 Learning Tree International, Inc. 1,358,725 **
-------------
Total Schools 1,905,075
-------------
Services - Business (17.2%)
17,400 Administaff, Inc. 376,275 **
90,700 American Residential Services, Inc. 1,326,488 **
54,700 Brightpoint, Inc. 1,960,200 **
172,097 Corporate Express, Inc. 2,527,675 **
50,600 CSG Systems International, Inc. 1,982,887 **
18,100 Hagler Bailly, Inc. 366,525 **
28,500 Industrial Distribution Group, Inc. 552,188 **
28,500 Innovative Valve Technologies, Inc. 498,750 **
33,000 MAXIMUS, Inc. 924,000 **
79,000 Norwood Promotional Products, Inc. 1,264,000 **
28,300 Nova Corp. 760,562 **
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
29
<PAGE>
TCW Galileo Earnings Momentum Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- -------------- ----------------- -------------
<S> <C> <C> <C>
Services - Business (Continued)
49,100 Pegasus Systems, Inc. $ 761,050 **
71,500 Stericycle, Inc. 670,313 **
21,800 Stewart Enterprises, Inc., Class A 904,700 **
50,300 Wackenhut Corrections Corp., Class B 1,012,287
60,600 Wilmar Industries, Inc. 1,590,750 **
-------------
Total Services - Business 17,478,650
-------------
TOTAL CONSUMER STAPLES (Cost: $47,628,640) 57,852,475
-------------
CREDIT SENSITIVE (5.1%)
Financial Services (1.5%)
28,200 American Capital Strategies, Ltd. 507,600 **
46,900 ARM Financial Group, Inc. 1,014,213 **
-------------
Total Financial Services 1,521,813
-------------
Insurance (1.4%)
22,800 PAULA Financial 575,700 **
28,800 PXRE Corp. 878,400
-------------
Total Insurance 1,454,100
-------------
Real Estate (0.9%)
18,400 Imperial Credit Commercial Mortgage Investment Corp. 303,600 **
14,900 LaSalle Partners, Inc. 544,781
-------------
Total Real Estate 848,381
-------------
Telecommunications (1.3%)
58,000 Omnipoint Corp. 1,344,875 **
-------------
TOTAL CREDIT SENSITIVE (Cost: $4,605,318) 5,169,169
-------------
TOTAL EQUITY SECURITIES (Cost: $77,305,705) (96.1%) 97,682,702
-------------
Principal Amount SHORT-TERM INVESTMENT (Cost: $6,266,799) (6.1%)
- ---------------- -----------------------------------------------
$ 6,266,799 Bank Of New York Depository Reserve, 4.6%, due 11/03/97 6,266,799
-------------
TOTAL INVESTMENTS (Cost: $83,572,504) (102.2%) 103,949,501
LIABILITIES IN EXCESS OF OTHER ASSETS (-2.2%) (2,282,133)
-------------
NET ASSETS (100%) $ 101,667,368
=============
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
30
<PAGE>
TCW GALILEO FUNDS, INC.
<TABLE>
<CAPTION>
TCW Galileo Mid-Cap Growth Fund
SCHEDULE OF INVESTMENTS October 31, 1997
- -----------------------
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- ------------
<S> <C> <C>
COMMON STOCK
------------
BASIC MATERIALS (2.1% OF Net Assets)
Oil & Gas (2.1%)
24,900 Patterson Energy, Inc. $ 1,394,400 **
45,900 Precision Drilling Corp. 1,411,425 **
------------
TOTAL BASIC MATERIALS (Cost: $3,132,277) 2,805,825
------------
CAPITAL GOODS (37.5%)
Electronics (7.4%)
48,000 Advanced Fibre Communications 1,395,000 **
88,000 Maxim Integrated Products, Inc. 5,830,000 **
97,100 Pairgain Technologies, Inc. 2,743,075 **
------------
Total Electronics 9,968,075
------------
Information Processing (30.0%)
87,200 Avid Technology, Inc. 2,490,650 **
21,900 Baan Company N.V. 1,535,737 **
25,800 CBT Group, PLC (ADR) (Ireland) 1,980,150 **
71,200 Cerner Corp. 1,726,600 **
103,500 Cognex Corp. 2,768,625 **
46,650 Computer Horizons Corp. 1,416,994 **
115,000 E*TRADE Group, Inc. 3,550,625 **
139,300 Fore Systems, Inc. 2,263,625 **
75,800 Netscape Communications Corp. 2,491,925 **
86,300 Peoplesoft, Inc. 5,426,112 **
90,600 Security Dynamics Technologies, Inc. 3,069,075 **
149,600 Siebel Systems, Inc. 6,040,100 **
53,700 Transaction Systems Architects, Inc. 2,101,013 **
89,800 Yahoo!, Inc. 3,937,169 **
------------
Total Information Processing 40,798,400
------------
MANUFACTURING (0.1%)
4,600 Dril-Quip, Inc. 165,025 **
------------
TOTAL CAPITAL GOODS (Cost: $38,175,395) 50,931,500
------------
CONSUMER CYCLICALS (2.1%)
Autos & Auto Parts (1.0%)
135,350 Miller Industries, Inc. 1,370,419 **
------------
Services-Commercial & Consumer (1.1%)
39,300 CB Commercial Real Estate Services Group, Inc. 1,473,750 **
------------
TOTAL CONSUMER CYCLICALS (Cost: $3,670,399) 2,844,169
------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
31
<PAGE>
TCW Galileo Mid-Cap Growth Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
- -----------------------
Number of
Shares EQUITY SECURITIES Value
--------- ----------------- ------------
<S> <C> <C>
CONSUMER STAPLES (52.7%)
Beverages, Distributions & Restaurants (1.3%)
55,300 Starbucks, Corp. $ 1,824,900 **
------------
Foods, Tobacco & Hotels (6.9%)
48,500 HFS, Inc. 3,419,250 **
107,400 Mirage Resorts, Inc. 2,685,000 **
125,700 Signature Resorts, Inc. 3,283,912 **
------------
Total Foods, Tobacco & Hotels 9,388,162
------------
Healthcare (11.0%)
46,700 Biogen, Inc. 1,564,450 **
138,600 Coventry Corp. 1,931,737 **
44,300 Dura-Pharmaceuticals, Inc. 2,143,013 **
119,150 Health Management Associates, Inc., Class A 2,904,281 **
80,075 Phycor, Inc. 1,846,730 **
100,700 Safeskin Corp. 4,569,262 **
------------
Total Healthcare 14,959,473
------------
Leisure, Entertainment, Photo & Media (11.2%)
61,500 Cablevision Systems Corp. 4,297,312 **
81,800 Clear Channel Communications, Inc. 5,398,800 **
95,500 Playboy Enterprises, Inc. 1,319,094 **
40,900 Regal Cinemas, Inc. 940,700 **
104,500 Westwood One, Inc. 3,206,844 **
------------
Total Leisure, Entertainment, Photo & Media 15,162,750
------------
Retail (5.1%)
107,300 Bed, Bath & Beyond, Inc. 3,406,775 **
127,200 Best Buy Co., Inc. 3,553,650 **
------------
Total Retail 6,960,425
------------
Services-Business (17.2%)
68,275 Apollo Group, Inc., Class A 2,884,619 **
63,600 Corrections Corp. of America 1,939,800 **
133,000 National TechTeam, Inc. 1,596,000 **
117,400 Outdoor Systems, Inc. 3,610,050 **
101,150 Paychex, Inc. 3,856,344
119,550 Robert Half International, Inc. 4,894,078 **
228,100 Romac International, Inc. 4,562,000 **
------------
Total Services-Business 23,342,891
------------
TOTAL CONSUMER STAPLES (Cost: $52,583,812) 71,638,601
------------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
32
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number Of
Shares EQUITY SECURITIES Value
--------- ----------------- ------------
<S> <C> <C>
CREDIT SENSITIVE (4.9%)
Banks, Financial Services, and Building (4.9%)
22,000 CCA Prison Realty Trust $ 759,000
86,700 Hartford Life, Inc. 3,202,481
40,100 T. Rowe Price Associates 2,656,625
------------
TOTAL CREDIT SENSITIVE (Cost: $5,075,071) 6,618,106
------------
TOTAL COMMON STOCK (Cost: $102,636,954) (99.3%) 134,838,201
------------
PREFERRED STOCK
---------------
BASIC INDUSTRIES(COST: $1,252,075)
Energy and Oil Services (1.2%)
39,100 Newpark Resources, Inc. 1,622,650 **
------------
TOTAL EQUITY SECURITIES (Cost: $103,889,029)
(100.5%) 136,460,851
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENT (Cost: $8,311,912) (6.1%)
---------- -----------------------------------------------
<S> <C> <C>
$8,311,912 Bank of New York Depository Reserve, 4.6%,
Due 11/03/97 8,311,912
------------
TOTAL INVESTMENTS (Cost: $112,200,941) (106.6%) 144,772,763
LIABILITIES IN EXCESS OF OTHER ASSETS (-6.6%) (8,923,143)
------------
NET ASSETS (100%) $135,849,620
============
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
33
<PAGE>
TCW Galileo Small Cap Growth Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
-----------------------
Number
of Shares
or Warrants EQUITY SECURITIES Value
---------------- ----------------- ------------
<S> <C> <C>
COMMON STOCK
------------
BASIC MATERIALS (3.3%)
Energy & Oil Services (3.3%)
27,600 Cal Dive International, Inc. $ 862,500 **
42,000 Eagle Geophysical, Inc. 735,000 **
44,400 Friede Goldman International, Inc. 1,767,675 **
12,600 Key Energy Group, Inc. 395,325 **
39,400 NS Group, Inc. 1,053,950 **
----------
TOTAL BASIC MATERIALS (Cost: $3,115,346) 4,814,450
----------
CAPITAL GOODS (39.4%)
Aerospace/Defense (0.8%)
43,500 BE Aerospace, Inc. 1,223,438 **
----------
COMPUTER SOFTWARE & SERVICES (12.4%)
17,300 Applied Graphics Technologies, Inc. 925,550 **
26,800 Aspect Development, Inc. 1,252,900 **
33,600 Cambridge Technology Partners, Inc. 1,226,400 **
22,900 Ciber, Inc. 1,013,325 **
28,300 Clarify, Inc. 367,900 **
41,250 Computer Horizons Corp. 1,252,969 **
40,875 Computer Management Sciences, Inc. 715,313 **
71,100 CSG Systems International, Inc. 2,786,231 **
30,400 International Network Services 668,800 **
57,100 Legato Systems, Inc. 2,441,025 **
21,100 Peoplesoft, Inc. 1,326,662 **
3,000 Radiant Systems, Inc. 54,375 **
60,600 Security Dynamics Tech, Inc. 2,052,825 **
21,800 Select Software Tools, Ltd. (ADR) (Great Britain) 175,762 **
16,200 SPR, Inc. 279,450 **
1 Synopsis, Inc. 39 **
36,000 Viasoft, Inc. 1,476,000 **
----------
Total Computer Software & Services 18,015,526
----------
Electronics (8.3%)
3,384 American Satellite Network, Inc., Warrants, expire 06/30/99 -- **
37,000 Bolder Technologies Corp. 439,376 **
46,900 Computer Products, Inc. 1,278,026 **
46,025 EXCEL Communications, Inc. 1,087,342 **
23,100 Genesys Telecommunications Laboratories, Inc. 739,200 **
44,900 GeoTel Communications Corp. 768,912 **
33,300 International Manufacturing Services, Inc. 362,138 **
38,400 Maxim Integrated Products, Inc. 2,544,000 **
20,800 MRV Communications, Inc. 608,400 **
30,000 Natural Microsystems Corp. 1,432,500 **
37,100 Premisys Communications, Inc. 1,010,975 **
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
34
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
---------------- ----------------- ------------
<S> <C> <C>
Electronics (Continued)
24,400 Sheldahl, Inc. $ 475,800 **
54,600 Winstar Communications 1,248,975 **
-----------
Total Electronics 11,995,644
-----------
Information Processing (17.4%)
6,000 Advantage Learning Systems, Inc. 151,500 **
39,400 Aspen Technologies, Inc. 1,482,425 **
29,100 Avid Technology, Inc. 831,169 **
22,000 AXENT Technologies, Inc. 514,250 **
19,300 CBT Group, PLC (ADR)(Ireland) 1,481,275 **
72,300 Citrix Systems, Inc. 5,309,531 **
18,000 Concord EFS, Inc. 319,500 **
30,400 DBT Online, Inc. 837,900 **
57,500 Dendrite International, Inc. 1,114,063 **
24,500 Discreet Logic, Inc. 479,281 **
13,600 Documentum, Inc. 406,300 **
1,100 Great Plains Software, Inc. 26,263 **
19,600 HNC Software, Inc. 725,200 **
10,800 IDX Systems Corp. 364,500 **
800 INSpire Insurance Solutions, Inc. 14,800 **
196,600 Intelligent Electronics, Inc. 1,044,437 **
5,600 Network Appliance, Inc. 281,400 **
77,500 Platinum Software Corp. 804,062 **
9,300 QAD, Inc. 131,362 **
16,300 QuadraMed Corp. 383,050 **
50,800 Saville Systems, PLC (ADR)(Ireland) 3,035,300 **
43,200 Siebel Systems, Inc. 1,744,200 **
98,900 Sigma Designs, Inc. 593,400 **
2,600 TSI International Software, Ltd. 28,275 **
111,200 Topro, Inc. 688,050 **
33,500 Transaction System Architects, Inc. 1,310,688 **
21,750 Yahoo!, Inc. 953,602 **
-----------
Total Information Processing 25,055,783
-----------
Pollution Control (0.5%)
2,000 Casella Waste Systems, Inc. 44,250 **
16,500 Culligan Water Technologies, Inc. 703,313 **
-----------
Total Pollution Control 747,563
-----------
TOTAL CAPITAL GOODS (Cost: $34,902,767) 57,037,954
-----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
35
<PAGE>
TCW Galileo Small Cap Growth Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
-----------------------------------
Number
of Shares EQUITY SECURITIES Value
---------------- ----------------- ------------
<S> <C> <C>
CONSUMER STAPLES (44.8%)
Drugs & Hospital Supply (4.7%)
15,000 Dura Pharmaceuticals, Inc. $ 725,625 **
21,300 Gulf South Medical Supply, Inc. 702,900 **
119,500 Safeskin Corp. 5,422,313 **
-------------
Total Drugs & Hospital Supply 6,850,838
-------------
Food, Hotels & Restaurants (2.4%)
2,300 Beringer Wine Estates Holdings, Inc. 71,300 **
18,200 Il Fornaio (America) Corp. 242,288 **
30,300 Interstate Hotels Co. 931,725 **
37,650 Signature Resorts, Inc. 983,606 **
21,500 Silverleaf Resorts, Inc. 467,625 **
6,100 Star Buffet, Inc. 87,306 **
14,400 Suburban Lodges of America, Inc. 356,400 **
11,400 Trendwest Resorts, Inc. 260,775 **
-------------
Total Food, Hotels & Restaurants 3,401,025
-------------
Healthcare (10.8%)
19,400 BioReliance Corp. 431,650 **
37,600 Cell Therapeutics, Inc. 601,600 **
72,459 Concentra Managed Care, Inc. 2,363,975 **
76,800 Coventry Corp. 1,070,400 **
25,800 Curative Health Services, Inc. 777,225 **
19,300 Cytyc Corp. 458,375 **
36,600 Hanger Orthopedic Group, Inc. 475,800 **
75,000 IRIDEX Corp. 759,375 **
6,300 Monarch Dental Corp. 114,187 **
36,300 NeoPath, Inc. 657,938 **
50,100 Neoprobe Corp. 501,000 **
54,100 Neose Technologies, Inc. 906,175 **
72,300 Ocular Sciences, Inc. 1,590,600 **
32,000 Omnicare, Inc. 890,000
96,500 Orthodontic Centers of America, Inc. 1,670,656 **
38,000 Pharmaceutical Product Development, Inc. 674,500 **
61,200 PolyMedica Industries, Inc. 627,300 **
32,500 Total Renal Care Holdings, Inc. 1,001,406 **
-------------
Total Healthcare 15,572,162
-------------
Leisure, Entertainment, Photo and Media (7.5%)
41,900 Clear Channel Communications, Inc. 2,765,400 **
59,700 Family Golf Centers, Inc. 1,596,975 **
26,200 Gemstar International Group, Ltd. (Virgin Islands) 579,675 **
8,900 Heftel Broadcasting Corp. 591,850 **
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
36
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
---------------- ----------------- ------------
<S> <C> <C>
Leisure, Entertainment, Photo & Media (Continued)
35,000 International Speedway Corp. $ 735,000
28,000 Metro Networks, Inc. 868,000 **
49,400 North Face, Inc. 1,167,075 **
5,900 Penske Motorsports, Inc. 174,788 **
54,900 VDI Media 631,350 **
56,400 Westwood One, Inc. 1,730,775 **
-----------
Total Leisure, Entertainment, Photo & Media 10,840,888
-----------
Retail (4.9%)
40,800 Bed, Bath and Beyond, Inc. 1,295,400 **
49,700 Cost Plus, Inc. 1,348,112 **
23,700 Dollar Tree Stores, Inc. 959,850 **
62,250 Just for Feet, Inc. 922,078 **
30,900 Marks Brothers Jewelers, Inc. 502,125 **
6,800 Men's Wearhouse, Inc. 263,500 **
16,500 St. John Knits, Inc. 663,094 **
14,200 Tiffany & Co. 560,900 **
8,500 Timberland Co. 613,063 **
-----------
Total Retail 7,128,122
-----------
Schools (1.1%)
21,050 Computer Learning Centers, Inc. 952,513 **
10,400 EduTrek International, Inc. 254,800 **
9,800 Learning Tree International, Inc. 340,550 **
-----------
Total Schools 1,547,863
-----------
Services - Business (13.4%)
25,400 Brightpoint, Inc. 838,200 **
42,600 Caribiner International, Inc. 1,909,012 **
27,300 C.H. Robinson Worldwide, Inc. 600,600 **
29,600 Corrections Corp. of America 902,800 **
57,900 Envoy Corp. 1,621,200 **
1,800 Industrial Distribution Group, Inc. 34,875 **
38,300 MAXIMUS, Inc. 1,072,400 **
29,400 Meta Group, Inc. 635,775 **
109,900 National TechTeam, Inc. 1,318,800 **
98,700 Outdoor Systems, Inc. 3,035,025 **
13,200 Pegasus Systems, Inc. 204,600 **
55,050 Robert Half International, Inc. 2,253,609 **
101,000 Romac International, Inc. 2,020,000 **
49,000 Snyder Communications, Inc. 1,445,500 **
26,800 Superior Consultant Holdings Corp. 830,800 **
23,500 Vincam Group, Inc. 737,313 **
-----------
Total Services - Business 19,460,509
-----------
TOTAL CONSUMER STAPLES (Cost: $44,514,651) 64,801,407
-----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
37
<PAGE>
TCW Galileo Small Cap Growth Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
-----------------------------------
Number
of Shares EQUITY SECURITIES Value
---------------- ----------------- ------------
<S> <C> <C>
CONSUMER CYCLICALS (1.6%)
Auto & Auto Parts (1.6%)
22,900 Dura Automotive Systems, Inc. $ 709,900 **
104,600 Miller Industries, Inc. 1,059,075 **
12,100 Tower Automotive, Inc. 506,688 **
------------
TOTAL CONSUMER CYCLICALS (Cost: $1,791,902) 2,275,663
------------
CREDIT SENSITIVE (4.1%)
Banks & Financial Services (2.7%)
42,700 ARM Financial Group, Inc. 923,387
31,000 E*TRADE Group, Inc. 957,125 **
28,900 Imperial Credit Industries, Inc. 726,113 **
29,900 Redwood Trust, Inc. 751,237 **
48,100 United Industrial Corp. 502,044 **
------------
Total Banks & Financial Services 3,859,906
------------
Insurance (0.0%)
2,800 PAULA Financial 70,700 **
------------
Real Estate (1.4%)
22,600 CB Commercial Real Estate Services Group, Inc. 847,500 **
4,000 CCA Prison Realty Trust 138,000 **
53,400 Imperial Credit Commercial Mortgage Investment Corp. 881,100 **
5,400 LaSalle Partners, Inc. 197,437 **
------------
Total Real Estate 2,064,037
------------
TOTAL CREDIT SENSITIVE (Cost: $5,463,466) 5,994,643
------------
TOTAL COMMON STOCK (COST: $89,788,132) (93.2%) 134,924,117
------------
PREFERRED STOCK
---------------
BASIC INDUSTRIES (Cost: $1,011,013)
Energy & Oil Services (1.7%)
57,800 Newpark Resources, Inc. 2,398,700 **
------------
TOTAL EQUITY SECURITIES (Cost: $90,799,145) (94.9%) 137,322,817
------------
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENT (COST: $8,373,144) (5.8%)
----------- -----------------------------------------------
<S> <C> <C>
$ 8,373,144 Bank Of New York Depository Reserve, 4.6%, due 11/03/97 8,373,144
------------
TOTAL INVESTMENTS (Cost: $99,172,289) (100.7%) 145,695,961
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.7%) (940,209)
------------
NET ASSETS (100%) $144,755,752
============
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
38
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Asia Pacific Fund
October 31, 1997
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
- -----------------------
Number
of Shares
or Warrants EQUITY SECURITIES Value
- ----------- ----------------- ----------
COMMON STOCK
------------
<S> <C> <C>
HONG KONG (34.1% OF Net Assets)
734,000 Beijing Datang Power Generation Company, Limited $ 370,252 **
600,000 Beijing Yanhua Petrochemical Company, Limited 174,610 **
91,000 Cheung Kong Holdings, Limited 632,639
244,500 China Light & Power Company, Limited 1,287,092
156,000 Citic Pacific, Limited 746,556
266,500 Hong Kong Electric Holdings, Limited 903,098
139,200 Hong Kong Telecommunications, Limited 266,463
142,000 Hutchison Whampoa, Limited 982,604
240,000 Hysan Development Company, Limited 501,326
142,000 New World Development Company, Limited 499,567
67,000 Sun Hung Kai Properties, Limited 493,953
76,000 Swire Pacific, Limited, Class A 405,975
----------
TOTAL HONG KONG (Cost: $8,967,544) 7,264,135
----------
INDIA (6.9%)
16,000 BSES, Limited (GDR) 248,000 **
5,500 Indian Hotels (GDR) 92,125 **
16,100 Mahindra & Mahindra (GDR) 165,025 **
12,500 Reliance Industries, Limited (GDR) 256,250
25,600 State Bank of India (GDR) 448,000 **
10,000 Tata Engineering & Locomotive (144A) (GDR) 98,800 * **
11,300 Videsh Sanchar Nigam, Limited (GDR) 155,940 **
----------
TOTAL INDIA (Cost: $1,574,926) 1,464,140
----------
INDONESIA (4.1%)
501,600 PT London Sumatra Indonesia 536,934
110,000 PT Ramayana Lestari Sentosa 185,359
7,380 PT Telekomunikasi Indonesia (ADR) 143,449
----------
TOTAL INDONESIA (Cost: $921,663) 865,742
----------
MALAYSIA (Cost: $472,735) (1.7%)
155,000 Malakoff Berhad 369,267
----------
PHILIPPINES (1.8%)
580,700 Belle Corporation 51,906 **
194,140 Belle Corporation, Warrants, expire 09/10/00 24 **
1,310 Far East Bank and Trust Company 1,866
10,443 Manila Electric Company 31,504
6,140 Philippine Long Distance Telephone Company 150,070
909,000 SM Prime Holdings 157,425 **
----------
TOTAL PHILIPPINES (Cost: $642,120) 392,795
----------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
39
<PAGE>
TCW Galileo Asia Pacific Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
- ---------- ----------------- -----------
<S> <C> <C>
SINGAPORE (3.6%)
70,000 Fraser & Neave, Limited $ 350,666
110,000 Keppel Corporation, Limited 347,369
16,600 Orchard Parade Holding, Limited 11,368
23,000 Singapore Land, Limited 65,339
-----------
TOTAL SINGAPORE (Cost: $1,588,668) 774,742
-----------
SOUTH KOREA (0.1%)
2,067 Hyundai Engineering & Construction (New GDR) 10,852 **
111 Samsung Electronics Company, Limited 4,337
-----------
TOTAL SOUTH KOREA (Cost: $31,113) 15,189
-----------
TAIWAN (4.3%)
8,200 China Steel, Limited (GDR) 118,900 **
40,000 Taiwan Semiconductor Manufacturing Company,
Limited (ADR) 792,500 **
-----------
TOTAL TAIWAN (Cost: $1,195,200) 911,400
-----------
TOTAL EQUITY SECURITIES (COST: $15,393,969)(56.6%) 12,057,410
-----------
<CAPTION>
Principal
Amount CONVERTIBLE SECURITIES (COST: $182,792)
- ---------- ---------------------------------------
<S> <C> <C>
TAIWAN (0.8%)
$ 184,000 Far East Department Stores, Limited, Convertible
Bond, 3%, due 07/06/02 176,640
-----------
SHORT-TERM INVESTMENT (COST: $7,297,651)(34.2%)
-----------------------------------------------
7,297,651 Bank of New York Depository Reserve, 4.6%, due
11/03/97 7,297,651
-----------
TOTAL INVESTMENTS (Cost: $22,874,412)(91.6%) 19,531,701
EXCESS OF OTHER ASSETS OVER LIABILITIES (8.4%) 1,795,519
-----------
NET ASSETS (100%) $21,327,220
===========
</TABLE>
** Non-income producing.
See accompanying notes to Financial Statements.
40
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Emerging Markets Fund
October 31, 1997
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ---------- ----------------- --------------
<S> <C> <C>
COMMON STOCK
------------
ARGENTINA (6.1% OF Net Assets)
8,279 Banco de Galicia y Buenos Aires, S.A. (ADR) $ 200,636
10,100 Banco Frances del Rio de la Plata, S.A. (ADR) 106,050
42,968 CEI Citicorp Holdings, S.A. 171,970
41,439 IRSA Inversiones y Representaciones, S.A. 139,314
23,576 Molinos Rio de la Plata, S.A., Series B 58,266
117,393 Perez Companc S.A. 735,299
94,098 Siderca S.A., Series A 230,672
4,800 Telecom Argentina STET-France Telecom, S.A., Series B (ADR) 121,500
12,550 Telefonica de Argentina, Sociedad Anonima, Series B (ADR) 352,969
24,926 Yacimientos Petroliferos Fiscales Sociedad del Estado, Series D (ADR) 797,632
--------------
TOTAL ARGENTINA (Cost: $2,568,293) 2,914,308
--------------
BRAZIL (5.8%)
881,000 Companhia de Saneamento Basico de Estado de Sao Paula (SABESP) 162,985
8,160 Companhia Paranaense de Energia (COPEL) (ADR) 97,410
864,477 CENTRAIS ELETRICAS BRASILEIRAS, S.A. (ELECTROBRAS) 348,864
840 Espirito Santo Centrais Eletricas, S.A. (ESCELSA) 152,353
339,000 Light Participacoes, S.A. 86,694 **
4,800,000 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 426,546
14,580 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) (ADR) 1,479,870
165,883 Telecomunicacoes de Sao Paulo, S.A. (TELESP) 35,352
--------------
TOTAL BRAZIL (Cost: $2,284,270) 2,790,074
--------------
CHILE (5.1%)
8,200 Banco BHIF (ADR) 141,963
11,600 Banco Santander Chile, Series A (ADR) 150,800
4,100 Chilectra, S.A. (144A) (ADR) 106,600 *
5,761 Chilgener, S.A. (ADR) 156,987
18,147 Compania de Telecomunicaciones de Chile, S.A., Series A (ADR) 503,579
10,260 Embotelladora Andina, S.A. (ADR) 210,330
13,860 Embotelladora Andina, S.A., Series B (ADR) 332,640
8,440 Enersis, S.A. (ADR) 278,520
34,000 The Five Arrows Chile Investment Trust, Limited 93,160
7,041 Genesis Chile Fund, Limited 281,640
2,850 Santa Isabel, S.A. (ADR) 52,725 **
5,600 Vina Concha y Toro, S.A. (ADR) 152,600
--------------
TOTAL CHILE (Cost: $2,364,477) 2,461,544
--------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
41
<PAGE>
TCW Galileo Emerging Markets Fund
SCHEDULE OF INVESTMENTS (Continued)
- ----------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ---------- ----------------- --------------
<S> <C> <C>
COLOMBIA (2.8%)
13,900 Almacenes Exito, S.A. $ 49,249
36,926 Banco de Bogota 209,676
8,350 Banco Industrial Colombiano (ADS) 133,600
31,850 Bavaria CB 335,693
26,200 Compania de Cemento Argos, S.A. 175,264
22,770 Compania Nacional de Chocolates, S.A. 182,429
10,600 Compania Suramericana de Seguros, S.A. 234,988
--------------
TOTAL COLOMBIA (Cost: $1,403,878) 1,320,899
--------------
EGYPT (1.4%)
15,000 Commercial International Bank (144A) (GDR) 326,250 *
6,750 MISR International Bank S.A.E. (144A) (GDR) 111,375 *
9,500 Suez Cement Company (144A) (GDR) 217,550 *
--------------
TOTAL EGYPT (Cost: $656,200) 655,175
--------------
HONG KONG (1.8%)
588,000 Beijing Datang Power Generation Company, Limited 296,605
364,000 First Tractor Company, Limited, Series H 282,481
207,000 Guangdong Kelon Electrical Holdings Company, Series H 262,381
--------------
TOTAL HONG KONG (Cost: $866,483) 841,467
--------------
HUNGARY (1.6%)
5,095 Egis 239,241
3,140 Gedeon Richter (144A) (ADR) 326,560 *
8,383 Mol Magyar Olaj-es Gazipari Rt. (144A) (GDR) 203,288 *
--------------
TOTAL HUNGARY (Cost: $732,560) 769,089
--------------
INDIA (6.4%)
24,900 BSES, Limited (GDR) 385,950
13,500 Hindalco Industries, Limited (GDR) 378,000
27,000 Mahindra & Mahindra (GDR) 276,750
14,000 Ranbaxy Laboratories, Limited (GDR) 311,500
27,000 Reliance Industries, Limited (GDR) 553,500
43,600 State Bank of India (GDR) 763,000
17,000 Tata Engineering & Locomotive (144A) (GDR) 167,960 *
17,500 Videsh Sanchar Nigam, Limited (GDR) 241,500
--------------
TOTAL INDIA (Cost: $3,186,153) 3,078,160
--------------
INDONESIA (1.9%)
64,000 PT Gudang Garam 180,331 **
244,800 PT London Sumatra Indonesia 262,044
169,000 PT Ramayana Lestari Sentosa 284,779
201,000 PT Telekomunikasi Indonesia 186,008
--------------
TOTAL INDONESIA (Cost: $1,220,351) 913,162
--------------
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
42
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ---------- ----------------- --------------
<S> <C> <C>
IRELAND (COST: $275,000) (0.4%)
27,500 Central Asia Investment Company, Limited $ 206,250
--------------
KAZAKSTAN (COST: $139,684) (0.3%)
7,430 Kazkommertsbank (144A) (GDR) 148,600 *
--------------
LATIN AMERICAN REGIONAL (COST: $141,309) (0.5%)
6,970 Panamerican Beverages, Inc. (ADR) 216,070
--------------
MALAYSIA (COST: $317,415) (0.3%)
123,000 Kulim Berhad 137,725
--------------
MEXICO (16.0%)
111,683 Alfa, S.A. de C.V., Series A 811,758
43,800 Apasco, S.A.de C.V. 265,297 **
141,300 Cemex, S.A. de C.V., Series B 617,558
384,800 Cifra, S.A. de C.V., Series C 662,660
37,900 DESC, S.A. de C.V., Series B 324,086 **
9,850 Empresas ICA Sociedad Controladora, S.A. de C.V. (ADR) 131,128
9,000 Empresas La Moderna, S.A. de C.V. (ADR) 176,063
50,600 Fomento Economico Mexicano, S.A. de C.V., Series B 354,561
76,400 GROUP CARSO, S.A. De C.V., Series A1 481,810 **
71,891 Grupo Financiero Inbursa, S.A. de C.V., Series B 251,875
35,300 Grupo Industrial Bimbo, S.A. de C.V., Series A 264,540
33,900 Grupo Modelo, S.A. de C.V., Series C 249,620
10,710 Grupo Televisa, S.A. de C.V. (ADR) 332,010
42,200 Jugos del Valle, S.A. de C.V., Series B 60,944 **
158,700 Kimberly-Clark de Mexico, S.A. de C.V., Series A 693,606
36,835 Telefonos de Mexico, S.A. de C.V. (ADR) 1,593,115
17,080 Tubos de Acero de Mexico, S.A. de C.V., (ADR) 344,803 **
--------------
TOTAL MEXICO (Cost: $6,190,271) 7,615,434
--------------
PERU (3.5%)
128,725 Cementos Lima, S.A., Class T 266,082
249,924 Cerveceria Backus y Johnston, S.A., Class T 228,376
3,820 Compania de Minas Buenaventura, S. A. (ADR) 68,521
29,094 Compania de Minas Buenaventura, S. A., Series B 269,071
15,405 Credicorp, Limited (ADR) 276,327
9,400 Telefonica del Peru, S.A., (ADR) 185,650
198,056 Telefonica del Peru, S.A., Series B 394,798
--------------
TOTAL PERU (Cost: $1,384,204) 1,688,825
--------------
</TABLE>
** 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 or
Warrants EQUITY SECURITIES Value
- ---------- ----------------- --------------
<S> <C> <C>
1,260,100 Belle Corporation $ 112,635
252,020 Belle Corporation, Warrants, expire 09/10/00 31
18,990 Manila Electric Company 57,288
10,200 Philippine Long Distance Telephone Company 249,302
--------------
TOTAL PHILIPPINES (Cost: $737,255) 419,256
--------------
POLAND (2.4%)
14,750 @Entertainment, Inc. (ADR) 169,625
1,580 International Trading & Investments Holdings, S.A. (GDR) 371,300
9,900 Krosno, S.A. 96,729
10,618 Powszechne Swiadectwo Udzialowe 390,920
1,800 Zaklady Piwowarskie w Zywcu, S.A. (ZYWIEC) 132,540
--------------
TOTAL POLAND (Cost: $1,425,872) 1,161,114
--------------
RUSSIA (4.0%)
10,406 AO Mosenergo Joint Stock Company (144A) (ADR) 437,052 *
2,000 AO Tatneft (ADR) 280,000
3,208 Lukoil Holdings (144A) (ADR) 266,264 *
16 Nizhny Novgorod Svyazinform (144A) (Bridge Certificates) 84,000 *
53 Samara Svyazinform (144A) (Bridge Certificates) 47,700 *
30,000 Surgutneftegaz (ADR) 270,000
6,252 Unified Energy Systems (144A) (Bridge Certificates) 440,782 *
23 Ural Telcom (144A) (Bridge Certificates) 70,150 *
--------------
TOTAL RUSSIA (Cost: $2,217,999) 1,895,948
--------------
SOUTH AFRICA (4.7%)
24,520 Barlow, Limited 246,854
44,693 JD Group, Limited 299,654
23,400 Johnnies Industrial Corp., Limited 262,294
10,340 Liberty Life Association of Africa, Limited 257,561
13,900 Nedcor, Limited 291,417
139,000 New Africa Investments, Limited, Series N 113,970
30,040 Rembrandt Group, Limited 246,306
42,660 Sasol, Limited 513,602
--------------
TOTAL SOUTH AFRICA (Cost: $2,513,231) 2,231,658
--------------
SOUTH KOREA (Cost: $575) (0.0%)
11 Samsung Electronics Company, Limited 430
--------------
</TABLE>
* Restricted security. (See Note 6)
See accompanying Notes to Financial Statements.
44
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ---------- ----------------- --------------
<S> <C> <C>
TAIWAN (3.4%)
10,490 China Steel, Limited (GDR) $ 152,105
100,600 R.O.C. Taiwan Fund, Limited 873,963
30,000 Taiwan Semiconductor Manufacturing Company, Limited (ADR) 594,375
--------------
TOTAL TAIWAN (Cost: $2,086,879) 1,620,443
--------------
TURKEY (6.2%)
3,700,000 Aksigorta, A.S. 287,017
950,000 Baticim Bati Anadolu Cimento Sanayii, A.S. 134,458
970,000 Cimsa Cimento Sanayi Ve Ticaret, A.S. 219,134
43,500 Haci Omer Sabanci Holdings (144A) (ADR) 565,500 *
1,110,000 Netas Northern Electric Telekomunikasyon, A.S. 332,335
7,800,000 Trakya Cam Sanayii, A.S. 562,602
10,400,000 Turkey Garanti Bankasi, A.S. 537,833
2,900,000 Vestel Elektronik Sanayi Ve Ticaret, A.S. 224,959
2,630 Yapi Ve Kredi Bankasi, A.S. (144A) (GDR) 78,900 *
--------------
TOTAL TURKEY (Cost: $3,077,290) 2,942,738
--------------
VENEZUELA (4.7%)
40,000 Banco Provincial, S.A. de C.V. 79,720
466,995 C.A. La Electricidad de Caracas 612,683
35,250 Compania Anonima Nacional Telefonos de Venezuela (ADR) 1,542,189 **
--------------
TOTAL VENEZUELA (Cost: $1,477,387) 2,234,592
--------------
TOTAL COMMON STOCK (Cost: $37,267,036) (80.2%) 38,262,961
--------------
PREFERRED STOCK
---------------
ARGENTINA (Cost: $97,906) (0.2%)
7,650 Quilmes Industrial, S.A. (ADR) 94,669
--------------
BRAZIL (7.4%)
3,700,000 Companhia Paranaense de Energia (COPEL), Series B 44,660
633,289 CENTRAIS ELETRICAS BRASILEIRAS, S.A. (ELECTROBRAS),
Series B 273,945
432,677 Companhia Cervejaria Brahma 270,742
21,625 COMPANHIA ENERGETICA DE MINAS GERIAS (CEMIG) (ADR) 859,594
198,376 Companhia Riograndense de Telecomunicacoes 152,915
21,158 Companhia Vale do Rio Doce 408,693
312,000 Itausa - Investimentos Itau, S.A. 212,206
2,280,000 Petrobras Distribudora, S.A. 41,146
1,873,000 Petroleo Brasileiro, S.A. (PETROBRAS) 348,204
</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 or
Rights PREFERRED STOCK Value
- ---------- --------------- --------------
<S> <C> <C>
BRAZIL (CONTINUED)
217,000 Sadia-Concordia, S.A. Industria e Comercio $ 216,469
4,822,166 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 481,036
946,282 Telecomunicacoes de Sao Paulo, S.A. (TELESP) 247,147
37,187 Telecomunicacoes de Sao Paulo, S.A. (TELESP),
Rights, expire 11/07/97 337 **
--------------
TOTAL BRAZIL (Cost: $3,160,325) 3,557,094
--------------
TOTAL PREFERRED STOCK (Cost: $3,258,231) (7.6%) 3,651,763
--------------
TOTAL EQUITY SECURITIES (Cost: $40,525,267) (87.8%) 41,914,724
--------------
Principal
Amount CONVERTIBLE SECURITIES (Cost: $341,000)
- ---------- ----------------------------------------
PHILIPPINES (0.5%)
$ 350,000 Bacnotan Consolidated Industries Inc., Convertible Bond,
5.5%, due 06/21/04 215,250
--------------
SHORT-TERM INVESTMENT (Cost: $3,139,846) (6.6%)
-----------------------------------------------
3,139,846 Bank of New York Depository Reserve, 4.6%, due 11/03/97 3,139,846
--------------
TOTAL INVESTMENTS (COST: $44,006,113) (94.9%) 45,269,820
EXCESS OF OTHER ASSETS OVER LIABILITIES (5.1%) 2,456,648
--------------
NET ASSETS (100%) $ 47,726,468
==============
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
46
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Latin America Equity Fund
October 31, 1997
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ----------- ----------------- -----------
<S> <C> <C>
COMMON STOCK
------------
ARGENTINA (10.9% OF Net Assets)
19,297 Banco de Galicia y Buenos Aires, S.A., (ADR) $ 467,651
21,700 Banco Frances del Rio de la Plata, S.A., (ADR) 227,850
82,000 IRSA Inversiones y Representaciones, S.A. 275,677
59,316 Molinos Rio de la Plata, S.A., Series B 146,594
279,557 Perez Companc, S.A. 1,751,025
216,138 Siderca, S.A., Series A 529,840
12,723 Telecom Argentina STET-France Telecom, S.A., Series B 63,651
9,850 Telecom Argentina STET-France Telecom, S.A., Series B (ADR) 249,328
22,090 Telefonica de Argentina, Sociedad Anonima, Series B (ADR) 621,281
52,870 Yacimientos Petroliferos Fiscales Sociedad del Estado,
Series D (ADR) 1,691,840
-----------
TOTAL ARGENTINA (Cost: $4,799,618) 6,024,737
-----------
BRAZIL (13.8%)
5,230,000 COMPANHIA ENERGETICA DE MINAS GERIAS (CEMIG) 208,688
2,175,033 CENTRAIS ELETRICAS BRASILEIRAS, S.A. (ELETROBRAS) 877,745
827,400 Empresa Nacional de Comercio Redito e Participacoes, S.A. --
2,030 Espirito Santo Centrais Eletricas, S.A. (ESCELSA) 368,187
1,074,900 Light Participacoes, S.A. 274,891 **
5,200,000 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 462,091
53,625 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) (ADR) 5,442,937
-----------
TOTAL BRAZIL (Cost: $4,641,980) 7,634,539
-----------
CHILE (8.4%)
9,960 Banco BHIF (ADR) 172,433
18,440 Banco Santander Chile, Series A (ADR) 239,720
9,300 Chilectra, S.A. (144A) (ADR) 241,800 *
9,221 Chilgener, S.A. (ADR) 251,272
22,400 Compania de Telecomunicaciones de Chile, S.A., Series A (ADR) 621,600
30,500 Embotelladora Andina, S.A., (ADR) 732,000
11,840 Embotelladora Andina, S.A., Series B (ADR) 242,720
20,962 Enersis, S.A. (ADR) 691,746
185,491 The Five Arrows Chile Investment Trust, Limited 508,245
14,987 Genesis Chile Fund, Limited 599,480
5,275 Santa Isabel, S.A. (ADR) 97,588 **
9,400 Vina Concha y Toro, S.A. (ADR) 256,150
-----------
TOTAL CHILE (Cost: $4,467,664) 4,654,754
-----------
COLOMBIA (3.7%)
32,400 Almacenes Exito, S.A. 114,796
54,394 Banco de Bogota 308,865
13,470 Banco Industrial Colombiano (ADS) 215,520
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
47
<PAGE>
TCW Galileo Latin America Equity Fund
SCHEDULE OF INVESTMENTS CONTINUED
- ---------------------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ----------- ----------------- -----------
<S> <C> <C>
COLOMBIA (CONTINUED)
41,750 Bavaria CB $ 440,038
30,028 Compania de Cemento Argos, S.A. 200,872
26,809 Compania Nacional de Chocolates, S.A. 214,789
23,900 Compania Suramericana de Seguros, S.A. 529,830
-----------
TOTAL COLOMBIA (Cost: $2,233,698) 2,024,710
-----------
LATIN AMERICA REGIONAL (Cost: $481,219) (1.1%)
19,400 Panamerican Beverages, Inc. (ADR) 601,400
-----------
MEXICO (32.8%)
258,990 Alfa, S.A. de C.V., Series A 1,882,445
98,500 Apasco, S.A. de C.V. 596,615 **
352,500 Cemex, S.A. de C.V., Series B 1,540,617
62,726 Cifra, S.A. de C.V., Series A 114,576
780,640 Cifra, S.A. de C.V., Series C 1,344,333
80,900 DESC, S.A. de C.V., Series B 691,781
25,900 Empresas ICA Sociedad Controladora, S.A. de C.V. (ADR) 344,794
25,900 Empresas La Moderna, S.A. de C.V. (ADR) 506,669
82,900 Fomento Economico Mexicano, S.A. de C.V., Series B 580,891
188,000 GROUPO CARSO, S.A. de C.V., Series A1 1,185,606 **
189,639 Grupo Financiero Inbursa, S.A. de C.V., Series B 664,412
85,100 Grupo Industrial Bimbo, S.A. de C.V., Series A 637,745
13,290 SanLuis Corporacion, S.A. de C.V. 102,279
93,000 Grupo Modelo, S.A. de C.V., Series C 684,798
27,640 Grupo Televisa, S.A. de C.V. (ADR) 856,840
20,200 Industries Bachoco, S.A. (ADR) 343,400
87,700 Jugos Del Valle, S.A. de C.V., Series B 126,655 **
401,500 Kimberly-Clark de Mexico, S.A. de C.V., Series A 1,754,774
76,745 Telefonos de Mexico, S.A. de C.V. (ADR) 3,319,221
44,032 Tubos de Acero de Mexico, S.A. de C.V. (ADR) 888,896 **
-----------
TOTAL MEXICO (Cost: $13,377,305) 18,167,347
-----------
PERU (4.6%)
153,856 Cementos Lima, S.A., Class T 318,029
335,389 Cerveceria Backus y Johnston, S.A., Class T 306,472
11,400 Compania de Minas Buenaventura, S.A. (ADR) 204,488
44,046 Compania de Minas Buenaventura, S.A., Series B 407,352
26,568 Credicorp, Limited (ADR) 476,563
9,100 Telefonica del Peru, S.A., (ADR) 179,725
328,153 Telefonica del Peru, S.A., Series B 654,130
-----------
TOTAL PERU (Cost: $2,080,624) 2,546,759
-----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
48
<PAGE>
TCW GALILEO FUNDS, INC.
OCTOBER 31, 1997
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ----------- ----------------- -----------
<S> <C> <C>
VENEZUELA (3.6%)
50,000 Banco Provincial, S.A. de C.V., $ 99,649
816,466 C.A. La Electricidad de Caracas 1,071,177
16,550 Compania Anonima Nacional Telefonos de Venezuela (ADR) 724,063 **
15,500 Mavesa (ADR) 116,250
-----------
TOTAL VENEZUELA (Cost: $1,346,562) 2,011,139
-----------
TOTAL COMMON STOCK (Cost: $33,428,670) (78.9%) 43,665,385
-----------
PREFERRED STOCK
---------------
BRAZIL (16.5%)
383,700 Banco Itau, S.A. 154,844
28,900,000 Companhia Paranaense de Energia (COPEL), Series B 348,834
1,786,180 CENTRAIS ELECTRICAS BRASILEIRAS, S.A.
(ELECTROBRAS), Series B 772,656
1,100,491 Companhia Cervejara Brahma 688,618
970,000 Companhia Cimento Portland Itau 248,944
2,137 COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) (144A) (ADR) 84,946 *
39,950 COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) (ADR) 1,588,012
64,242 Companhia Vale do Rio Doce 1,240,913
676,000 Itausa - Investimentos Itau, S.A. 459,780
9,450,000 Petrobras Distribudora, S.A. 170,540
8,980,000 Petroleo Brasiliero, S.A. (PETROBRAS) 1,669,448
7,155,257 Telecomunicacoes Brasileiras, S.A. (TELEBRAS) 713,774
3,143,800 Telecomunicacoes de Sao Paulo, S.A. (TELESP) 821,089
105,121 Telecomunicacoes de Sao Paulo, S.A. (TELESP), Rights,
expire 11/07/97 953 **
21,500 Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS) 155,981
-----------
TOTAL PREFERRED STOCK (Cost: $7,853,193) (16.5%) 9,119,332
-----------
TOTAL EQUITY SECURITIES (Cost: $41,281,863) (95.4%) 52,784,717
-----------
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENT (Cost: $1,568,128) (2.8%)
- ------------ -----------------------------------------------
<S> <C> <C>
$1,568,128 Bank of New York Depository Reserve, 4.6%, due 11/03/97 1,568,128
-----------
TOTAL INVESTMENTS (Cost: $42,849,991) (98.2%) 54,352,845
EXCESS OF OTHER ASSETS OVER LIABILITIES (1.8%) 982,660
-----------
NET ASSETS (100%) $55,335,505
===========
</TABLE>
* Restricted security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
49
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
TCW Galileo TCW Galileo
Money Market Core Fixed
Fund Income Fund
------------ -----------
<S> <C> <C>
ASSETS
Investments, at Value /(1)/ $ 222,088 $ 20,006
Receivables for Fund Shares Sold - 112
Receivables for Securities Sold - 560
Accrued Interest and Dividends Receivable 1,704 245
Deferred Organization Costs - 3
------------ -----------
Total Assets 223,792 20,926
------------ -----------
LIABILITIES
Payables for Fund Shares Redeemed - -
Distributions Payable 930 110
Payables for Securities Purchased - 1,407
Management Fees and Other Accrued Expenses 91 41
------------ -----------
Total Liabilities 1,021 1,558
------------ -----------
NET ASSETS $ 222,771 $ 19,368
============ ===========
NET ASSETS CONSIST OF:
Paid-in Capital $ 222,771 $ 21,567
Undistributed Net Realized Gain (Loss) on Investments - (3,217)
Unrealized Appreciation (Depreciation) on Investments - 445
Undistributed (Overdistributed) Net Investment Income - 573
------------ -----------
NET ASSETS $ 222,771 $ 19,368
============ ===========
CAPITAL SHARES OUTSTANDING 222,771,033 2,012,966
============ ===========
NET ASSET VALUE PER SHARE $ 1.00 $ 9.62
============ ===========
</TABLE>
/(1)/ The identified cost for the TCW Galileo Money Market Fund, the TCW Galileo
Core Fixed Income Fund, the TCW Galileo High Yield Bond Fund, the TCW
Galileo Mortgage Backed Securities Fund, the TCW Galileo Long-Term
Mortgage Backed Securities Fund and the TCW Convertible Securities Fund at
October 31, 1997 was $222,088, $19,561, $205,353, $55,972, $78,484 and
$33,525 respectively.
See accompanying Notes to Financial Statements.
50
<PAGE>
TCW GALILEO FUNDS, INC.
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
(Except per Share Amounts)
October 31, 1997
TCW Galileo TCW Galileo TCW Galileo Long-Term TCW Galileo
High Yield Mortgage Backed Mortgage Backed Convertible
Bond Fund Securities Fund Securities Fund Securities Fund
- -------------- --------------- ---------------------- ---------------
<S> <C> <C> <C>
$ 209,893 $ 54,637 $ 81,627 $ 36,760
88 - 5 -
1,532 600 128 387
5,370 423 571 279
3 3 6 3
- -------------- -------------- --------------- --------------
216,886 55,663 82,337 37,429
- -------------- -------------- --------------- --------------
4,730 - 200 -
1,636 285 618 -
1,564 - - 468
195 71 77 71
- -------------- -------------- --------------- --------------
8,125 356 895 539
- -------------- -------------- --------------- --------------
$ 208,761 $ 55,307 $ 81,442 $ 36,890
============== ============== =============== ==============
$ 201,054 $ 63,316 $ 77,539 $ 31,176
2,871 (5,455) 473 2,477
4,540 (1,335) 3,143 3,235
296 (1,219) 287 2
- -------------- -------------- --------------- --------------
$ 208,761 $ 55,307 $ 81,442 $ 36,890
============== ============== =============== ==============
20,646,868 5,701,120 8,218,873 3,232,972
============== ============== =============== ==============
$ 10.11 $ 9.70 $ 9.91 $ 11.41
============== ============== =============== ==============
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (Continued)
- ------------------------------------------------
TCW TCW Galileo
Galileo Core Earnings Momentum
Equity Fund Fund
------------ -----------------
ASSETS
<S> <C> <C>
Investments, at Value /(1)/ $ 155,994 $ 103,950
Receivables for Fund Shares Sold 166 -
Receivables for Securities Sold 53 1,986
Unrealized Appreciation of Forward Foreign Currency Contracts - -
Accrued Interest and Dividends Receivable 174 12
Deferred Organization Costs 3 1
------------ ------------
Total Assets 156,390 105,949
------------ ------------
LIABILITIES
Payables for Fund Shares Redeemed - -
Payables for Securities Purchased - 4,151
Management Fees and Other Accrued Expenses 277 131
------------ ------------
Total Liabilities 277 4,282
------------ ------------
NET ASSETS $ 156,113 $ 101,667
============ ============
NET ASSETS CONSIST OF:
Paid-in Capital $ 46,832 $ 74,995
Undistributed Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions 58,504 7,865
Unrealized Appreciation (Depreciation) on Investments
and Foreign Currency Translations 50,612 20,377
Undistributed (Overdistributed) Net Investment Income 165 -
Net Investment (Loss) - (1,570)
------------ ------------
NET ASSETS $ 156,113 $ 101,667
============ ============
CAPITAL SHARES OUTSTANDING 8,091,318 7,327,493
============ ============
NET ASSET VALUE PER SHARE $ 19.29 $ 13.87
============ ============
</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, 1997 was $105,382, $83,573, $112,201, $99,172,
$22,874, $44,006 and $42,850, respectively.
See accompanying Notes to Financial Statements.
52
<PAGE>
<TABLE>
<CAPTION>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
(Except per Share Amounts)
October 31, 1997
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>
$ 144,773 $ 145,696 $ 19,532 $ 45,270 $ 54,353
- 53 - - 36
936 2,904 2,097 3,118 932
- - - 35 93
34 14 25 66 83
2 3 2 2 3
----------- ----------- ---------- ------------- -------------
145,745 148,670 21,656 48,491 55,500
----------- ----------- ---------- ------------- -------------
2,825 2,511 - 11 -
6,909 1,218 241 621 -
161 185 88 133 164
----------- ----------- ---------- ------------- -------------
9,895 3,914 329 765 164
----------- ----------- ---------- ------------- -------------
$ 135,850 $ 144,756 $ 21,327 $ 47,726 $ 55,336
=========== =========== ========== ============= =============
$ 115,616 $ 89,492 $ 20,834 $ 51,337 $ 57,306
(11,123) 11,233 4,068 (5,020) (14,458)
32,572 46,524 (3,342) 1,299 11,596
- - (233) 110 892
(1,215) (2,493) - - -
----------- ----------- ---------- ------------- -------------
$ 135,850 $ 144,756 $ 21,327 $ 47,726 $ 55,336
=========== =========== ========== ============= =============
14,451,046 7,724,218 2,891,878 5,737,619 4,424,572
=========== =========== ========== ============= =============
$ 9.40 $ 18.74 $ 7.37 $ 8.32 $ 12.51
=========== =========== ========== ============= =============
</TABLE>
53
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
Money Market Core Fixed
Fund Income Fund
-------------------- --------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ - $ -
Interest 13,174 1,559
---------------- ----------------
Total 13,174 1,559
---------------- ----------------
Expenses:
Management Fees 592 77
Accounting Service Fees 237 35
Custodian Fees 40 6
Transfer Agent Fees 35 34
Registration Fees 3 7
Directors' Fees and Expenses 9 9
Audit and Tax Fees 15 16
Amortization of Deferred Organization Costs - 10
Other 24 11
---------------- ----------------
Total Expenses 955 205
Less Expenses Borne by Investment Adviser 11 -
---------------- ----------------
Net Expenses 944 205
---------------- ----------------
Net Investment Income 12,230 1,354
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) on Investments During the Year - 241
Change in Unrealized Appreciation
on Investments During the Year - 42
---------------- ----------------
Net Realized and Unrealized Gain on Investments
During the Year - 283
---------------- ----------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 12,230 $ 1,637
================ ================
</TABLE>
See accompanying Notes to Financial Statements.
54
<PAGE>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
Year Ended October 31, 1997
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo Long-Term TCW Galileo
High Yield Mortgage Backed Mortgage Backed Convertible
Bond Fund Securities Fund Securities Fund Securities Fund /(1)/
- ----------- --------------- --------------------- -------------------
<S> <C> <C> <C>
$ - $ - $ - $ 329
21,365 3,615 8,641 861
- ----------- ----------- ----------- -----------
21,365 3,615 8,641 1,190
- ----------- ----------- ----------- -----------
1,612 265 512 198
35 35 35 29
21 11 12 11
40 35 38 11
5 6 5 4
9 9 9 8
16 23 24 17
10 10 10 1
46 16 21 7
- ----------- ----------- ----------- -----------
1,794 410 666 286
- - - 35
- ----------- ----------- ----------- -----------
1,794 410 666 251
- ----------- ----------- ----------- -----------
19,571 3,205 7,975 939
- ----------- ----------- ----------- -----------
5,556 (78) 569 2,477
804 248 1,875 1,623
- ----------- ----------- ----------- -----------
6,360 170 2,444 4,100
- ----------- ----------- ----------- -----------
$ 25,931 $ 3,375 $ 10,419 $ 5,039
=========== =========== =========== ===========
</TABLE>
(1) For the period January 2, 1997 (commencement of operations) through
October 31, 1997.
55
<PAGE>
STATEMENTS OF OPERATIONS (Continued)
- ------------------------------------
<TABLE>
<CAPTION>
TCW TCW Galileo
Galileo Core Earnings Momentum
Equity Fund Fund
------------- -----------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 1,987 $ 80
Interest - 95
------------- -------------
Total 1,987 175
------------- -------------
Expenses:
Management Fees 1,628 828
Accounting Service Fees 35 35
Custodian Fees 31 24
Transfer Agent Fees 41 31
Registration Fees 13 6
Directors' Fees and Expenses 9 9
Audit and Tax Fees 16 16
Amortization of Deferred Organization Costs 10 1
Other 23 19
------------- -------------
Total Expenses 1,806 969
------------- -------------
Net Investment Income (Loss) 181 (794)
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions During the Year 58,507 7,257
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations
During the Year (9,558) 8,786
------------- -------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency During the Year 48,949 16,043
------------- -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 49,130 $ 15,249
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
56
<PAGE>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
Year Ended October 31, 1997
<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>
$ 69 $ 135 $ 617/(1)/ $ 1,013/(1)/ $ 1,676/(1)/
204 184 54 144 84
--------- --------- --------- --------- ---------
273 319 671 1,157 1,760
--------- --------- --------- --------- ---------
1,090 1,290 457 623 754
35 35 35 35 35
14 29 117 203 225
36 39 29 30 36
5 24 6 5 5
8 9 9 9 9
16 16 16 16 16
- 2 2 3 10
13 26 10 12 12
--------- --------- --------- --------- ---------
1,217 1,470 681 936 1,102
--------- --------- --------- --------- ---------
(944) (1,151) (10) 221 658
--------- --------- --------- --------- ---------
(8,474) 10,965 4,190 4,502 17,076
12,646 2,818 (9,363) (1,473) 3,998
--------- --------- --------- --------- ---------
4,172 13,783 (5,173) 3,029 21,074
--------- --------- --------- --------- ---------
$ 3,228 $ 12,632 $ (5,183) $ 3,250 $ 21,732
========= ========= ========= ========= =========
</TABLE>
(1) Net of foreign taxes withheld of $50, $70 and $105 for TCW Galileo Asia
Pacific Equity Fund, TCW Galileo Emerging Markets Fund and TCW Galileo
Latin America Equity Fund, respectively. None of the foreign taxes withheld
are subject to reclaim.
57
<PAGE>
TCW Galileo Money Market Fund
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 12,230 $ 9,174
--------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (12,230) (9,174)
--------------- ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,234,945,155 shares in 1997 and 1,034,355,297 shares in 1996) 1,234,945 1,034,355
Proceeds from Shares Issued upon Reinvestment of Dividends
(5,434,998 shares in 1997 and 4,792,741 shares in 1996) 5,435 4,793
Cost of Shares Redeemed
(1,251,280,223 shares in 1997 and 891,779,229 shares in 1996) (1,251,280) (891,779)
--------------- ------------
Increase (Decrease) in Net Assets Resulting from Capital
Share Transactions (10,900) 147,369
--------------- ------------
Increase (Decrease) in Net Assets (10,900) 147,369
NET ASSETS
Beginning of Year 233,671 86,302
--------------- ------------
End of Year $ 222,771 $ 233,671
=============== ============
</TABLE>
See accompanying Notes to Financial Statements.
58
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Core Fixed Income Fund
Dollar Amounts in Thousands
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
------------------ ------------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 1,354 $ 1,859
Net Realized Gain on Investments 241 165
Change in Unrealized Appreciation (Depreciation) on
Investments 42 (887)
------------------ ------------------
Increase in Net Assets Resulting from Operations 1,637 1,137
------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (1,373) (1,844)
------------------ ------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(717,575 shares in 1997 and 1,277,842 shares in 1996) 6,812 12,275
Proceeds from Shares Issued upon Reinvestment of Dividends
(138,935 shares in 1997 and 169,477 shares in 1996) 1,310 1,595
Cost of Shares Redeemed
(1,490,800 shares in 1997 and 2,570,171 shares in 1996) (14,024) (24,393)
------------------ ------------------
(Decrease) in Net Assets Resulting from
Capital Share Transactions (5,902) (10,523)
------------------ ------------------
(Decrease) in Net Assets (5,638) (11,230)
NET ASSETS
Beginning of Year 25,006 36,236
------------------ ------------------
End of Year $ 19,368 $ 25,006
================== ==================
</TABLE>
See accompanying Notes to Financial Statements.
59
<PAGE>
TCW Galileo High Yield Bond Fund
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 19,571 $ 11,400
Net Realized Gain (Loss) on Investments 5,556 (1,228)
Change in Unrealized Appreciation
on Investments 804 2,582
-------------- -------------
Increase in Net Assets Resulting from Operations 25,931 12,754
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (19,383) (11,413)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(13,039,199 shares in 1997 and 13,695,295 shares in 1996) 130,756 132,706
Proceeds from Shares Issued upon Reinvestment of Dividends
(1,688,689 shares in 1997 and 795,733 shares in 1996) 16,818 7,704
Cost of Shares Redeemed
(12,886,525 shares in 1997 and 5,199,280 shares in 1996) (129,176) (50,588)
-------------- --------------
Increase in Net Assets Resulting from
Capital Share Transactions 18,398 89,822
-------------- --------------
Increase in Net Assets 24,946 91,163
NET ASSETS
Beginning of Year 183,815 92,652
-------------- --------------
End of Year $ 208,761 $ 183,815
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
60
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mortgage Backed Securities Fund
Dollar Amounts in Thousands
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 3,205 $ 3,959
Net Realized (Loss) on Investments (78) (861)
Change in Unrealized Appreciation
on Investments 248 2,487
------------- --------------
Increase in Net Assets Resulting from Operations 3,375 5,585
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (2,046) (3,794)
Distributions in Excess of Net Investment Income (1,219) (1,159)
------------- --------------
Total Distributions to Shareholders (3,265) (4,953)
------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(8,709,536 shares in 1997 and 5,564,984 shares in 1996) 84,756 53,480
Proceeds from Shares Issued upon Reinvestment of Dividends
(321,824 shares in 1997 and 453,325 shares in 1996) 3,115 4,350
Cost of Shares Redeemed
(9,728,007 shares in 1997 and 8,115,490 shares in 1996) (94,509) (77,993)
------------- --------------
(Decrease) in Net Assets Resulting from
Capital Share Transactions (6,638) (20,163)
------------- --------------
(Decrease) in Net Assets (6,528) (19,531)
NET ASSETS
Beginning of Year 61,835 81,366
------------- --------------
End of Year $ 55,307 $ 61,835
============= ==============
</TABLE>
See accompanying Notes to Financial Statements.
61
<PAGE>
TCW Galileo Long-Term Mortgage Backed Securities Fund
Dollar Amounts in Thousands
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 7,975 $ 5,912
Net Realized Gain on Investments 569 466
Change in Unrealized Appreciation
on Investments 1,875 827
--------------- --------------
Increase in Net Assets Resulting from Operations 10,419 7,205
--------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (7,476) (5,934)
Distributions in Excess of Net Investment Income - (212)
---------------- --------------
Total Distributions to Shareholders (7,476) (6,146)
---------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(516,324 shares in 1997 and 5,357,272 shares in 1996) 4,947 50,184
Proceeds from Shares Issued upon Reinvestment of Dividends
(758,014 shares in 1997 and 570,644 shares in 1996) 7,257 5,384
Cost of Shares Redeemed
(4,796,056 shares in 1997 and 2,572,042 shares in 1996) (45,965) (24,526)
---------------- --------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions (33,761) 31,042
---------------- --------------
Increase (Decrease) in Net Assets (30,818) 32,101
NET ASSETS
Beginning of Year 112,260 80,159
---------------- --------------
End of Year $ 81,442 $ 112,260
================ ==============
</TABLE>
See accompanying Notes to Financial Statements.
62
<PAGE>
<TABLE>
<CAPTION>
TCW GALILEO FUNDS, INC.
TCW Galileo Convertible Securities Fund
Dollar Amounts in Thousands
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
January 2, 1997
(Commencement of
Operations) through
October 31, 1997
-------------------
<S> <C>
OPERATIONS
Net Investment Income $ 939
Net Realized Gain on Investments 2,477
Change in Unrealized Appreciation on Investments 1,623
------------------
Increase in Net Assets Resulting from Operations 5,039
------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (937)
------------------
CAPITAL SHARE TRANSACTIONS
Shares Issued Upon Exchange of Limited Partnership
Interests (2,485,514 shares) (Note 1) 24,855
Proceeds from Shares Sold (1,575,745 shares) 16,632
Proceeds from Shares Issued upon Reinvestment of Dividends
(62,882 shares) 672
Cost of Shares Redeemed (891,169 shares) (9,371)
------------------
Increase in Net Assets Resulting from
Capital Share Transactions 32,788
------------------
Increase in Net Assets 36,890
NET ASSETS
Beginning of Period -
------------------
End of Period $ 36,890
==================
</TABLE>
See accompanying Notes to Financial Statements.
63
<PAGE>
TCW Galileo Core Equity Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
------------------ ------------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 181 $ 379
Net Realized Gain on Investments 58,507 11,808
Change in Unrealized Appreciation (Depreciation)
on Investments (9,558) 19,564
-------------- -------------
Increase in Net Assets Resulting from Operations 49,130 31,751
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (291) (722)
Distributions from Net Realized Gains (2,817) -
-------------- -------------
Total Distributions to Shareholders (3,108) (722)
-------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(916,772 shares in 1997 and 3,809,396 shares in 1996) 15,783 57,075
Proceeds from Shares Issued upon Reinvestment of Dividends
(178,643 shares in 1997 and 39,376 shares in 1996) 2,971 539
Cost of Shares Redeemed
(7,520,587 shares in 1997 and 3,778,090 shares in 1996) (139,965) (55,062)
-------------- -------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions (121,211) 2,552
-------------- -------------
Increase (Decrease) in Net Assets (75,189) 33,581
NET ASSETS
Beginning of Year 231,302 197,721
-------------- -------------
End of Year $ 156,113 $ 231,302
============== =============
</TABLE>
See accompanying Notes to Financial Statements.
64
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Earnings Momentum Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss) $ (794) $ (608)
Net Realized Gain on Investments 7,257 6,438
Change in Unrealized Appreciation on Investments 8,786 2,416
----------- -----------
Increase in Net Assets Resulting from Operations 15,249 8,246
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions From Net Realized Gains (5,829) (369)
----------- -----------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(2,696,542 shares in 1997 and 1,440,632 shares in 1996) 31,271 19,079
Proceeds from Shares Issued upon
Reinvestment of Dividends
(458,342 shares in 1997 and 26,564 shares in 1996) 5,474 357
Cost of Shares Redeemed
(1,821,359 shares in 1997 and 1,002,762 shares in 1996) (22,492) (12,730)
----------- -----------
Increase in Net Assets Resulting from
Capital Share Transactions 14,253 6,706
----------- -----------
Increase in Net Assets 23,673 14,583
NET ASSETS
Beginning of Year 77,994 63,411
----------- -----------
End of Year $ 101,667 $ 77,994
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
65
<PAGE>
TCW Galileo Mid-Cap Growth Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
June 3, 1996
(Commencement of
Year Ended Operations) through
October 31, 1997 October 31, 1996
------------------ ---------------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss) $ (944) $ (271)
Net Realized (Loss) on Investments (8,474) (2,649)
Change in Unrealized Appreciation (Depreciation)
on Investments 12,646 (2,861)
------------------ ------------------
Increase (Decrease) in Net Assets Resulting from Operations 3,228 (5,781)
------------------ ------------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon Exchange of Limited Partnership
Interests (6,603,028 shares in 1996) - 66,030
Proceeds from Shares Sold (7,109,713 shares in 1997 and
3,972,481 shares in 1996) 63,202 36,973
Cost of Shares Redeemed (2,719,048 shares in 1997 and
515,128 shares in 1996) (23,010) (4,792)
------------------ ------------------
Increase in Net Assets Resulting from
Capital Share Transactions 40,192 98,211
------------------ ------------------
Increase in Net Assets 43,420 92,430
NET ASSETS
Beginning of Period 92,430 -
------------------ ------------------
End of Period $ 135,850 $ 92,430
================== ==================
</TABLE>
See accompanying Notes to Financial Statements.
66
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Small Cap Growth Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss) $ (1,151) $ (839)
Net Realized Gain on Investments 10,965 1,368
Change in Unrealized Appreciation on Investments 2,818 22,379
-------------- --------------
Increase in Net Assets Resulting from Operations 12,632 22,908
-------------- --------------
DISTRIBUTION TO SHAREHOLDERS
Distributions from Net Investment Income - (98)
Distributions from Net Realized Gains (1,426) (1,514)
-------------- --------------
Total Distributions to Shareholders (1,426) (1,612)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(2,161,818 shares in 1997 and 3,841,344 shares in 1996) 35,977 62,195
Proceeds from Shares Issued upon Reinvestment of Dividends
(80,731 shares in 1997 and 109,774 shares in 1996) 1,386 1,531
Cost of Shares Redeemed
(2,231,297 shares in 1997 and 1,121,510 shares in 1996) (36,257) (18,634)
-------------- --------------
Increase in Net Assets Resulting from Capital
Share Transactions 1,106 45,092
-------------- --------------
Increase in Net Assets 12,312 66,388
NET ASSETS
Beginning of Year 132,444 66,056
-------------- --------------
End of Year $ 144,756 $ 132,444
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
67
<PAGE>
TCW Galileo Asia Pacific Equity Fund
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
-------------------- --------------------
<S> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (10) $ 320
Net Realized Gain on Investments and
Foreign Currency Transactions 4,190 1,060
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations (9,363) 3,103
-------------- --------------
Increase (Decrease) in Net Assets Resulting from Operations (5,183) 4,483
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (322) (242)
Distributions in Excess of Net Investment Income (233) -
-------------- --------------
Total Distributions to Shareholders (555) (242)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(671,147 shares in 1997 and 1,653,606 shares in 1996) 7,355 15,972
Proceeds from Shares Issued Upon Reinvestment of Dividends
(47,638 shares in 1997 and 24,113 shares in 1996) 540 232
Cost of Shares Redeemed
(2,849,433 shares in 1997 and 2,040,994 shares in 1996) (29,096) (18,888)
-------------- --------------
(Decrease) in Net Assets Resulting from Capital
Share Transactions (21,201) (2,684)
-------------- --------------
Increase (Decrease) in Net Assets (26,939) 1,557
NET ASSETS
Beginning of Year 48,266 46,709
-------------- --------------
End of Year $ 21,327 $ 48,266
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
68
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Emerging Markets Fund
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------------- ----------------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 221 $ 443
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions 4,502 (902)
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations (1,473) 6,769
------------------- -------------------
Increase in Net Assets Resulting from Operations 3,250 6,310
------------------- -------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (670) (151)
------------------- -------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(775,118 shares in 1997 and 2,488,039 shares in 1996) 7,428 20,122
Proceeds from Shares Issued Upon Reinvestment of Dividends
(49,995 shares in 1997 and 17,923 shares in 1996) 483 135
Cost of Shares Redeemed (2,135,058 shares in 1997 and
2,676,057 shares in 1996) (20,404) (20,650)
------------------- -------------------
(Decrease) in Net Assets Resulting from Capital
Share Transactions (12,493) (393)
------------------- -------------------
Increase (Decrease) in Net Assets (9,913) 5,766
NET ASSETS
Beginning of Year 57,639 51,873
------------------- -------------------
End of Year $ 47,726 $ 57,639
=================== ===================
</TABLE>
See accompanying Notes to Financial Statements.
69
<PAGE>
TCW Galileo Latin America Equity Fund
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 658 $ 688
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions 17,076 (3,423)
Change in Unrealized Appreciation on Investments
and Foreign Currency Translations 3,998 14,716
------------- -------------
Increase in Net Assets Resulting from Operations 21,732 11,981
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (726) (192)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(879,898 shares in 1997 and 3,090,695 shares in 1996) 11,912 27,546
Proceeds from Shares Issued upon Reinvestment of Dividends
(8,386 shares in 1997 and 5,047 shares in 1996) 94 43
Cost of Shares Redeemed
(3,292,335 shares in 1997 and 1,181,839 shares in 1996) (45,999) (9,997)
------------- -------------
Increase (Decrease) in Net Assets Resulting from
Capital Share Transactions (33,993) 17,592
------------- -------------
Increase (Decrease) in Net Assets (12,987) 29,381
NET ASSETS
Beginning of Year 68,323 38,942
------------- -------------
End of Year $ 55,336 $ 68,323
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
70
<PAGE>
TCW GALILEO FUNDS, INC.
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 thirteen 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 Core 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), a convertible securities
fund (the TCW Galileo Convertible 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 Convertible Securities Fund commenced operations
on January 2, 1997, 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 January 2, 1997, and the fair value of which was
exchanged for shares of common shares 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 Core Fixed
Income Fund seeks capital appreciation and income through investment principally
in Core 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 Convertible Securities Fund seeks high
total return from current income and capital appreciation through investment
principally in convertible securities; (7) the TCW Galileo Core Equity Fund
emphasizes capital appreciation and preservation with focus on long-term
results; (8) 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; (9) the TCW
Galileo Mid-Cap Growth Fund seeks long-term capital appreciation, primarily by
investing in publicly-traded equity securities of medium capitalization
companies; (10) the TCW Galileo Small Cap Growth Fund seeks long-term capital
appreciation, primarily by investing in publicly-traded equity securities of
smaller capitalization companies; (11) 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; (12) 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 (13) the TCW Galileo Latin America Equity Fund seeks long-term capital
appreciation, primarily by investing in Latin American equity securities.
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.
71
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- -----------------------------------------
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.
For Funds other than TCW Galileo Money Market Funds, 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 Core
Fixed Income Fund recognizes as interest income discounts on securities
purchased using a constant yield to maturity accretion method and also 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 year.
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 (See
Note 7).
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, 1997.
72
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
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 year ended October 31, 1997.
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,
$2,200 and $4,400 for the TCW Galileo Earnings Momentum Fund, TCW Galileo Mid-
Cap Growth Fund and the TCW Galileo Convertible Securities 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 10,008
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, the TCW Galileo Mid-Cap
Growth Fund and the TCW Convertible Securities 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. TCW Galileo Convertible Securities Fund
declares dividends from net investment income quarterly. 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.
73
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- -----------------------------------------
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, 1997, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows:
<TABLE>
<CAPTION>
TCW TCW TCW TCW
Galileo Galileo Galileo Galileo Long-Term
Core Fixed High Yield Mortgage Backed Mortgage Backed
Income Fund Bond Fund Securities Fund Securities Fund
------------- ----------- --------------- -----------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 464,780 $ 6,031,961 $ 177,088 $ 4,399,666
Unrealized (Depreciation) (20,357) (1,505,301) (1,511,410) (1,257,319)
----------- ----------- ------------ ------------
Net Unrealized Appreciation $ 444,423 $ 4,526,660 $ (1,334,322) $ 3,142,347
=========== =========== ============ ============
Cost of Investments for Federal
Income Tax Purposes $19,561,689 $205,352,779 $ 55,971,521 $ 78,484,238
=========== ============ ============ ============
<CAPTION>
TCW Galileo TCW TCW Galileo TCW Galileo
Convertible Galileo Core Earnings Mid-Cap
Securities Fund Equity Fund Momentum Fund Growth Fund
--------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 3,701,656 $ 52,227,054 $ 23,312,494 $ 36,933,803
Unrealized (Depreciation) (485,693) (1,615,363) (2,935,497) (4,361,981)
----------- ------------ ------------ ------------
Net Unrealized Appreciation $ 3,215,963 $ 50,611,691 $ 20,376,997 $ 32,571,822
=========== ============ ============ ============
Cost of Investments for Federal
Income Tax Purposes $33,543,604 $105,382,758 $ 77,305,705 $109,375,922
=========== ============ ============ ============
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo
Small Cap Asia Pacific Emerging Latin America
Growth Fund Equity Fund Markets Fund Equity Fund
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $49,301,708 $ 288,858 $ 5,520,832 $ 13,325,562
Unrealized (Depreciation) (2,893,941) (3,822,017) (4,282,277) (1,822,708)
----------- ------------ ------------ ------------
Net Unrealized Appreciation
(Depreciation) $46,407,767 $ (3,533,159) $ 1,238,555 $ 11,502,854
=========== ============ ============ ============
Cost of Investments for Federal
Income Tax Purposes $90,819,259 $ 23,064,391 $ 44,026,112 $ 42,838,258
=========== ============ ============ ============
</TABLE>
74
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
At October 31, 1997, the following Funds had net realized loss carryforwards for
federal income tax purposes:
<TABLE>
<CAPTION>
Expiring in
---------------------------------------------------------
2002 2003 2004 2005
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
TCW Galileo Core Fixed Income Fund $ 1,977,000 $ 644,000 $ -- $ --
TCW Galileo Mortgage Backed Securities Fund 446,000 4,070,000 861,000 73,000
TCW Galileo Mid-Cap Growth Fund -- -- 2,649,000 8,154,000
TCW Galileo Emerging Markets Fund -- 3,478,000 902,000 --
TCW Galileo Latin America Equity Fund -- 10,558,000 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:
<TABLE>
<CAPTION>
<S> <C>
TCW Galileo Money Market Fund 0.25%
TCW Galileo Core Fixed Income Fund 0.35%
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 Convertible Securities Fund 0.75%
TCW Galileo Core Equity Fund 0.75%
TCW Galileo Earnings Momentum Fund 1.00%
TCW Galileo Small Cap Growth Fund 1.00%
TCW Galileo 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%
</TABLE>
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 are limited to 0.40% of
the Fund's daily net assets. The ordinary operating expenses of the TCW Galileo
Convertible Securities Fund are limited to 0.95% of the Fund's daily net assets
until December 31, 1997 and 1.05% of the Fund's daily assets until October 31,
1998.
Certain officers and/or directors of the Company are officers and/or directors
of the Adviser.
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- -----------------------------------------
Note 5 - Purchases and Sales of Securities
Investment transactions (excluding short-term investments) for the year ended
October 31, 1997 were as follows:
<TABLE>
<CAPTION>
TCW TCW TCW TCW
Galileo Galileo Galileo Galileo Long-Term
Core Fixed High Yield Mortgage Backed Mortgage Backed
Income Fund Bond Fund Securities Fund Securities Fund
------------- ------------- --------------- -----------------
<S> <C> <C> <C> <C>
Purchases at Cost $ 6,706,718 $ 251,330,075 $ 2,769,636 $ 2,015,264
============ ============= ============ ============
Sales Proceeds $ 8,866,206 $ 220,874,363 $ 8,396,144 $ 6,927,076
============ ============= ============ ============
U.S. Government Purchases
at Cost $ 22,659,379 $ -- $ 48,725,076 $ 13,521,386
============ ============= ============ ============
U.S. Government Sales Proceeds $ 26,799,139 $ -- $ 46,979,375 $ 39,160,479
============ ============= ============ ============
<CAPTION>
TCW Galileo TCW TCW Galileo TCW Galileo
Convertible Galileo Core Earnings Mid-Cap
Securities Fund Equity Fund Momentum Fund Growth Fund
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Purchases at Cost $ 46,899,785 $ 83,346,735 $ 83,422,395 $ 94,470,812
============ ============= ============ ============
Sales Proceeds $ 43,760,219 $ 205,699,168 $ 75,686,919 $ 52,655,257
============ ============= ============ ============
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo
Small Cap Asia Pacific Emerging Latin America
Growth Fund Equity Fund Markets Fund Equity Fund
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Purchases at Cost $ 76,433,042 $ 35,530,481 $ 46,600,802 $ 15,109,693
============ ============= ============ ============
Sales Proceeds $ 82,042,172 $ 65,972,755 $ 63,628,733 $ 51,207,786
============ ============= ============ ============
</TABLE>
There were no purchases or sales of U.S. Government Securities for the equity
funds for the year ended October 31, 1997.
Note 6 - Restricted Securities
The following restricted securities held by the Funds as of October 31, 1997,
were valued both at the date of acquisition and October 31, 1997, 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.
76
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
<TABLE>
<CAPTION>
TCW Galileo Core Fixed Income Fund:
Date of
Principal Amount Investment Acquisition Cost
---------------- --------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
$ 25,000 Atlas Air, Inc., (144A), 10.75%, due 08/01/05 08/08/97 $ 25,000
25,000 Consumers International, (144A), 10.25%, due 04/01/05 04/10/97 25,000
50,000 Doskocil Companies, Inc., (144A), 10.125%, due 09/15/07 09/11/97 50,000
50,000 GSI Group, Inc., (144A), 10.25%, due 11/01/07 10/30/97 49,616
25,000 Jordan Telecommunications Products, Inc., (144A), 9.875%,
due 08/01/07 07/21/97 24,807
50,000 Livent, Inc., (144A), 9.375%, due 10/15/04 10/10/97 50,344
25,000 National Energy Group, Inc., (144A), 10.75%, due 11/01/06 09/17/97 25,938
50,000 Physician Sales & Service, Inc., (144A), 8.5%, due 10/01/07 10/02/97 49,833
25,000 Signature Resorts, Inc., (144A), 9.75%, due 10/01/07 08/05/97 24,811
50,000 Stater Brothers Holdings, Inc., (144A), 9%, due 07/01/04 07/29/97 51,000
125,000 Transamerica Energy, Inc., (144A), 11.5%, due 06/15/02 06/05/97 124,250
25,000 Viasystems, Inc., (144A), 9.75%, due 06/01/07 09/12/97 25,719
25,000 Von Hoffman Press, (144A), 10.375%, due 05/15/07 10/03/97 27,113
</TABLE>
The total value of restricted securities is $561,812, which represents 2.9% of
net assets of the Fund at October 31, 1997.
<TABLE>
<CAPTION>
TCW Galileo High Yield Bond Fund:
Date of
Principal Amount Investment Acquisition Cost
---------------- --------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
$ 1,000,000 Adelphia Communications Corp., (144A), 9.25%,
due 10/01/02 09/22/97 $ 1,000,000
500,000 Atlas Air, Inc., (144A), 10.75%, due 08/01/05 08/08/97 500,000
550,000 Bway Corp., (144A), 10.25%, due 04/15/07 04/08/97 550,000
1,500,000 Coinmach Laundry Corp., (144A), 11.75%, due 11/15/05 10/01/97 1,648,125
850,000 Cole National Corp., (144A), 8.625%, due 08/15/07 08/15/97 850,000
1,200,000 Comcast Cellular Holdings, Inc., (144A), 9.5%,
due 05/01/07 07/02/97 1,234,875
2,050,000 Consumers International, (144A), 10.25%, due 04/01/05 04/10/97 2,083,000
2,000,000 County Seat Stores, Inc., (144A), 12.75%, due 11/01/04 10/23/97 2,000,000
500,000 Doskocil Companies, Inc., (144A), 10.125%, due 09/15/07 09/11/97 500,000
550,000 Federal Data Corp., (144A), 10.125%, due 08/01/05 07/18/97 550,000
725,000 Foamex L.P., (144A), 9.875%, due 06/15/07 05/29/97 725,000
1,250,000 Forman Petroleum Corp., (144A), 13.5%, due 06/01/04 10/10/97 1,281,250
275,000 Globalstar LP/Capital (144A), 10.75%, due 11/01/04 10/23/97 271,700
1,200,000 GSI Group, Inc., (144A), 10.25%, due 11/01/07 10/30/97 1,190,772
500,000 Hayes Wheels International, Inc., (144A), 9.125%,
due 07/15/07 07/16/97 500,000
1,000,000 Hollywood Park, Inc., (144A), 9.5%, due 08/01/07 08/21/97 1,012,500
400,000 Huntsman Packaging Corp., (144A), 9.125%, due 10/01/07 09/19/97 400,000
2,700,000 Integrated Health Services, Inc., (144A), 9.5%, due 09/15/97 09/18/97 2,806,375
900,000 Intermedia Communications, Inc., (144A), 8.875%,
due 11/01/07 10/24/97 900,000
500,000 International Wire Group, (144A), 11.75%, due 06/01/05 06/11/97 543,750
375,000 Jitney Jungle Stores, Inc., (144A), 10.375%, due 09/15/07 09/10/97 375,000
1,500,000 Jordan Industries, Inc., (144A), 0%, due 04/01/09 09/22/97 844,438
2,000,000 Jordan Telecommunications Products, Inc., (144A), 9.875%,
due 08/01/07 07/21/97 1,984,580
475,000 Leslie's Poolmart, (144A), 10.375%, due 07/15/04 06/06/97 480,594
600,000 Livent, Inc., (144A), 9.375%, due 10/15/04 10/10/97 602,063
1,950,000 Magnum Hunter Resources, Inc., (144A), 10%, due 06/01/07 05/23/97 1,955,544
900,000 National Energy Group, Inc., (144A), 10.75%, due 11/01/06 09/17/97 938,000
</TABLE>
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- -----------------------------------------
Note 6 - Restricted Securities (Continued)
<TABLE>
<CAPTION>
TCW Galileo High Yield Bond Fund: (Continued)
Date of
Principal Amount Investment Acquisition Cost
---------------- --------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
$ 175,000 NBTY, Inc., (144A), 8.625%, due 09/15/07 09/17/97 $ 173,565
3,000,000 North Atlantic Trading, Inc., (144A), 11%, due 06/15/04 06/18/97 3,022,875
900,000 Paperboard Industries International, Inc., (144A), 8.375%,
due 09/15/07 09/18/97 908,250
1,000,000 Physician Sales & Service, Inc., (144A), 8.5%, due 10/01/07 10/02/97 996,665
1,100,000 RCN Corp., (144A), 10%, due 10/15/07 10/10/97 1,110,288
350,000 Regal Cinemas, Inc., (144A), 8.5%, due 10/01/07 09/19/97 347,431
750,000 Rogers Cantel, Inc., (144A), 8.8%, due 10/01/07 09/23/97 748,038
1,000,000 Signature Resorts, Inc., (144A), 9.75%, due 10/01/07 08/05/97 992,445
700,000 Stater Brothers Holdings, Inc., (144A), 9%, due 07/01/04 07/21/97 704,000
3,300,000 Transamerica Energy, Inc., (144A), 11.5%, due 06/15/02 06/13/97 3,324,250
150,000 Transamerica Energy, Inc., (144A), 13%, due 06/15/02 06/05/97 118,804
775,000 United Defense Industries, Inc., (144A), 8.75%, due 11/15/07 10/01/97 775,000
2,000,000 Vencor, Inc., (144A), 8.625%, due 07/15/07 07/16/97 1,991,653
650,000 Viasystems, Inc., (144A), 9.75%, due 06/01/07 06/02/97 651,438
825,000 Von Hoffman Press, Inc., (144A), 10.375%, due 05/15/07 10/03/97 894,781
575,000 Wavetek Corp., (144A), 10.125%, due 06/15/07 06/06/97 587,688
450,000 Williams Scotsman, Inc., (144A), 9.875%, due 06/01/07 05/16/97 450,000
1,650,000 Zale Corp., (144A), 8.5%, due 10/01/07 09/23/97 1,638,358
</TABLE>
The total value of restricted securities is $47,569,876, which represents 22.8%
of net assets of the Fund at October 31, 1997.
<TABLE>
<CAPTION>
TCW Galileo Mortgage Backed Securities Fund:
Date of
Principal Amount Investment Acquisition Cost
---------------- --------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
$ 1,016,137 Greenwich Capital Acceptance, Inc. (91-03),
(Private Placement), 8.5638%, due 08/25/19 03/21/91 $ 1,006,541 *
</TABLE>
The total value of restricted securities is $983,113, which represents 1.8% of
net assets of the Fund at October 31, 1997.
<TABLE>
<CAPTION>
TCW Galileo Convertible Securities Fund:
Date of
Principal Amount Investment Acquisition Cost
---------------- -------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
$ 285,000 Adaptec, Inc., (144A), 4.75%, due 02/01/04 01/28/97 $ 285,000
7,000 Apple South, Inc., (144A), $3.50 Convertible Preferred 03/06/97 359,000
$ 360,000 Atria Communities, Inc., (144A), 5%, due 10/15/02 10/10/97 360,000
9,500 Chancellor Media Corp., (144A), $3.00 Convertible Preferred 06/11/97 495,188
$ 300,000 Concentra Managed Care, Inc., (144A), 6%, due 12/15/01 04/08/97 292,981
$ 1,285,000 Costco Companies, Inc., (144A), 0%, due 08/19/17 08/14/97 646,481
$ 1,050,000 CUC International, Inc., (144A), 3%, due 02/15/02 02/05/97 1,059,772
</TABLE>
* Security deemed illiquid.
78
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
TCW Galileo Convertible Securities Fund (Continued)
<TABLE>
<CAPTION>
Number of Shares Date of
or Principal Amount Investment Acquisition Cost
------------------- -------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
$ 405,000 Einstein/Noah Bagel Corp., (144A), 7.25%,
due 06/01/04 05/22/97 $ 397,354
7,200 EVI, Inc., (144A), $2.50 Convertible Preferred 10/29/97 360,000
$ 345,000 Family Golf Centers, Inc., (144A), 5.75%,
due 10/15/04 10/10/97 345,000
$ 755,000 Fine Host Corp., (144A), 5%, due 11/01/04 10/22/97 753,978
$ 240,000 Halter Marine Group, Inc., (144A), 4.5%,
due 09/15/04 09/10/97 240,000
5,000 Host Marriott Financial Trust, (144A), $3.375
Convertible Preferred 01/06/97 267,500
3,500 Hvide Marine, Inc., (144A), $3.25 Convertible
Preferred 06/24/97 177,000
$ 440,000 Interpublic Group of Companies, Inc., (144A),
1.8%, due 09/16/04 09/10/97 353,360
$ 305,000 Metsa Serla, OYJ, (Finland) (144A), 4.375%,
due 10/15/02 10/09/97 305,401
$ 560,000 Omnicom Group, Inc., (144A), 4.25%,
due 01/03/07 01/06/97 602,431
1,600 PennCorp Financial Group, Inc., (144A), $3.50
Convertible Preferred 07/07/97 93,250
4,500 PennCorp Financial Group, Inc., (144AI, Reg D),
$3.50 Convertible Preferred 08/02/96 225,000
$ 350,000 Personnel Group of America, Inc., (144A), 5.75%,
due 07/01/04 06/17/97 365,225
$ 50,000 Physician Resource, (144A), 6%, due 12/01/01 07/07/97 41,861
$ 300,000 Physician Resource, (144AI, Reg D), 6%,
due 12/01/01 12/06/96 300,000
$ 355,000 Premiere Technologies, 144AI, 5.75%,
due 07/01/04 06/25/97 357,550
$ 320,000 Quintiles Transnational Corp., (144AI, Reg D),
4.25%, due 05/31/00 04/23/96 320,000
$ 605,000 Rite Aid Corp., (144A), 5.25%, due 09/15/02 04/23/96 605,000
$ 635,000 Safeguard Scientifics, Inc., (144A), 6%,
due 02/01/06 01/07/97 645,725
$ 350,000 Smartalk Teleservices, Inc., (144A), 5.75%,
due 09/15/04 09/12/97 350,000
$ 125,000 Staples, Inc., (144A), 4.5%, due 10/01/00 07/07/97 154,375
$ 285,000 Sunrise Assisted Living, (144A), 5.5%,
due 06/15/02 06/03/97 289,988
$ 385,000 Tel-Save Holdings, Inc., (144A), 4.5%,
due 09/15/02 09/03/97 385,000
$ 405,000 Tower Automotive, Inc., (144A), 5%,
due 08/01/04 07/24/97 405,000
$ 385,000 Vantive Corp., (144A), 4.75%, due 09/01/02 08/14/97 379,955
$ 365,000 Wind River Systems, Inc., (144A), 5%,
due 08/01/02 07/23/97 365,000
$ 885,000 XILINX, Inc., (144A), 5.25%, due 11/01/02 04/25/97 1,003,569
</TABLE>
The total value of restricted securities is $14,487,330, which represents 39.3%
of net assets of the Fund at October 31, 1997.
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- -----------------------------------------
Note 6 - Restricted Securities (Continued)
TCW Galileo Asia Pacific Equity Fund:
<TABLE>
<CAPTION>
Date of
Number of Shares Investment Acquisition Cost
----------------- -------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
10,000 Tata Engineering & Locomotive (144A) (GDR) (India) 02/13/97 $ 103,750
</TABLE>
The total value of restricted securities is $98,800, which represents 0.5% of
net assets of the Fund at October 31, 1997.
<TABLE>
<CAPTION>
TCW Galileo Emerging Markets Fund:
Date of
Number of Shares Investment Acquisition Cost
----------------- -------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
10,406 AO Mosenergo Joint Stock Company (144A) (ADR) (Russia) 06/14/96 $ 425,990
4,100 Chilectra, S.A. (144A) (ADR) (Chile) 06/24/97 125,050
15,000 Commercial International Bank (144A) (GDR) (Egypt) 02/25/97 358,125
3,140 Gedeon Richter (144A) (ADR) (Hungary) 08/02/96 164,957
43,500 Haci Omer Sabanci Holdings (144A) (ADR) (Turkey) 09/16/97 470,675
7,430 Kazkommertsbank (144A) (GDR) (Kazakstan) 07/15/97 139,684
3,208 Lukoil Holdings (144A) (ADR) (Russia) 06/21/96 136,080
6,750 MISR International Bank S.A.E. (144A) (GDR) (Egypt) 06/25/97 106,650 *
8,383 Mol Magyar Olaj-es Gazipari Rt. (144A) (GDR) (Hungary) 10/17/97 207,898
16 Nizhny Novgorod Svyazinform (144A) (Bridge Certificates)
(Russia) 06/06/97 102,880 *
53 Samara Svyazinform (144A) (Bridge Certificates) (Russia) 06/06/97 99,349 *
9,500 Suez Cement Company (144A) (GDR) (Egypt) 07/14/97 191,425
17,000 Tata Engineering & Locomotive (144A) (GDR) (India) 02/14/97 189,295
6,252 Unified Energy Systems (144A) (Bridge Certificates) (Russia) 08/18/97 629,889 *
23 Ural Telcom (144A) (Bridge Certificates) (Russia) 06/06/97 97,911 *
2,630 Yapi Ve Kredi Bankasi, A.S. (144A) (GDR) (Turkey) 10/02/97 70,024
</TABLE>
The total value of restricted securities is $3,598,531, which represents 7.5% of
net assets of the Fund at October 31, 1997.
<TABLE>
<CAPTION>
TCW Galileo Latin America Equity Fund:
Date of
Number of Shares Investment Acquisition Cost
----------------- -------------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
9,300 Chilectra, S.A. (144A) (ADR) (Chile) 06/24/97 $ 289,213
2,137 COMPANHIA ENERGETICA DE MINAS GERAIS
(CEMIG) (144A) (ADR) (Brazil) 12/14/94 64,743
</TABLE>
The total value of restricted securities is $326,746, which represents 0.6% of
net assets of the Fund at October 31, 1997.
* Security deemed illiquid
80
<PAGE>
TCW GALILEO FUNDS, INC.
October 31, 1997
Note 7 - Forward Foreign Currency Contracts
The Funds listed below invested in forward foreign currency contracts during the
year ended October 31, 1997. These contracts are used for the purpose of
hedging against foreign exchange risk arising from the Funds' investment in
foreign securities. These contracts are"marked-to-market" at the valuation date
at the applicable translation rates and any resulting unrealized gains or losses
are recorded in the Funds' financial statements. The Funds record realized
gains or losses at the time the forward contract is closed. There were no
realized gains or losses recorded in the financial statements for the year ended
October 31, 1997. A forward contract is extinguished through a sale or the
expiration of the contract. 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 following forward foreign currency contracts
were outstanding as of October 31, 1997:
<TABLE>
<CAPTION>
TCW Galileo Emerging Markets Fund:
Unrealized
Expiration Contract In Exchange Appreciation
Date to Sell for U.S. $ on Contracts
---------- ------------------------ ------------ ------------
<S> <C> <C> <C>
04/29/98 Brazilian Real 1,338,000 $ 1,115,000 $ 17,379
04/30/98 Brazilian Real 1,338,000 $ 1,115,000 17,379
---------
Net Unrealized Appreciation
on Forward Foreign Currency Contracts $ 34,758
=========
</TABLE>
TCW Galileo Latin America Equity Fund:
<TABLE>
<CAPTION>
Unrealized
Expiration Contract In Exchange Appreciation
Date to Sell for U.S. $ on Contracts
---------- ------------------------ ------------ ------------
<S> <C> <C> <C>
04/29/98 Brazilian Real 3,601,200 $ 3,001,000 $ 46,725
04/30/98 Brazilian Real 3,601,200 $ 3,001,000 46,725
---------
Net Unrealized Appreciation
on Forward Foreign Currency Contracts $ 93,450
=========
</TABLE>
Note 8 - Subsequent Event
On November 3, 1997, TCW Galileo International Equities Fund, TCW Galileo
European Equities Fund, TCW Galileo Japanese Equities Fund and TCW Galileo Value
Opportunities Fund commenced operations resulting from the exchange of Limited
Partnership interests. The assets and liabilities were transferred at
historical cost from the respective predecessor limited partnerships to the
Funds on November 3, 1997, and the fair values of which were exchanged for
common shares of the Funds. The transfers were treated as tax-free exchanges in
accordance with the Internal Revenue Code.
81
<PAGE>
TCW Galileo Money Market Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Year Ended October 31,
----------------------------------------------------------------
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Net Asset Value per Share, Beginning of Period $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income 0.0516 0.0509 0.0549
Less Distributions:
Distributions from Net Investment Income (0.0516) (0.0509) (0.0549)
--------------- --------------- ---------------
Net Asset Value per Share, End of Period $ 1.00 $ 1.00 $ 1.00
=============== =============== ===============
Total Return 5.29% 5.21% 5.67%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 222,771 $ 233,671 $ 86,302
Ratio of Net Expenses to Average Net Assets (4) 0.40% 0.40% 0.40%
Ratio of Net Investment Income to Average Net Assets 5.17% 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 0.40% , 0.44%, and 0.46% for the fiscal
years ended October 31, 1997, 1996 and 1995, respectively, 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.
82
<PAGE>
TCW GALILEO FUNDS, INC.
<TABLE>
<CAPTION>
Year Ended December 31, July 14, 1988
----------------------------------------------------- (Commencement of
Ten Months Ended Operations)
October 31, 1994 1993 1992 1991 1990 1989 December 31, 1988
---------------- -------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value per Share,
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 1.00
Income from Investment Operations:
Net Investment Income 0.0304 0.0293 0.0381 0.0620 0.0800 0.0882 0.0379
Less Distributions:
Distributions from Net
Investment Income (0.0304) (0.0293) (0.0381) (0.0620) (0.0800) (0.0882) (0.0379)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value per Share,
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ========
Total Return 3.04% /(1)/ 2.97% 3.92% 6.35% 8.18% 9.22% 7.68% /(2)/
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $124,392 $ 81,204 $183,465 $140,987 $167,572 $ 88,620 $ 63,703
Ratio of Net Expenses to Average
Net Assets /(4)/ 0.40% /(3)/ 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% /(3)/
Ratio of Net Investment Income
to Average Net Assets 3.65% /(3)/ 2.93% 3.81% 6.20% 8.00% 8.82% 8.08% /(3)/
</TABLE>
83
<PAGE>
TCW Galileo Core Fixed Income Fund
<TABLE>
<CAPTION>
March 1, 1993
Year Ended October 31, Ten Months (Commencement of
------------------------------------------ Ended Operations) through
1997 1996 1995 October 31, 1994 December 31, 1993
------------ ------------ ------------ ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.45 $ 9.61 $ 8.94 $ 10.04 $ 10.00
------------ ------------ ------------ ------------ ------------
Income (Loss) from Investment Operations:
Net Investment Income 0.58 0.55 0.58 0.44 0.45
Net Realized and Unrealized Gain (Loss) 0.19 (0.16) 0.62 (1.16) 0.19
on Investments ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 0.77 0.39 1.20 (0.72) 0.64
------------ ------------ ------------ ------------ ------------
Less Distributions:
Distributions from Net Investment Income (0.60) (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 (0.60) (0.55) (0.53) (0.38) (0.60)
------------ ------------ ------------ ------------ ------------
Net Asset Value per Share, End of Period $ 9.62 $ 9.45 $ 9.61 $ 8.94 $ 10.04
============ ============ ============ ============ ============
Total Return 8.45% 4.26% 13.92% (7.24)%(1) 6.54%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 19,368 $ 25,006 $ 36,236 $ 50,153 $ 33,328
Ratio of Expenses to Average Net Assets 0.93% 0.76% 0.68%(4) 0.50%(3)(4) 0.50%(3)(4)
Ratio of Net Investment Income to Average
Net Assets 6.13% 5.85% 6.38% 6.11%(3) 5.24%(3)
Portfolio Turnover Rate 142.96% 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.
84
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo High Yield Bond Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Year Ended October 31, Ten Months (Commencement of
----------------------------------- Ended Operations) through
1997 1996 1995 October 31, 1994 December 31, 1993
------- --------- -------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.77 $ 9.74 $ 9.43 $ 10.12 $ 10.00
------- --------- -------- --------- --------
Income (Loss) from Investment Operations:
Net Investment Income 0.91 0.89 0.92 0.73 0.74
Net Realized and Unrealized Gain (Loss)
on Investments 0.34 0.03 0.39 (0.77) 0.27
------- --------- -------- --------- --------
Total from Investment Operations 1.25 0.92 1.31 (0.04) 1.01
------- --------- -------- --------- --------
Less Distributions:
Distributions from Net Investment Income (0.91) (0.89) (1.00) (0.65) (0.74)
Distributions from Net Realized Gains - - - - (0.15)
------- --------- -------- --------- --------
Total Distributions (0.91) (0.89) (1.00) (0.65) (0.89)
------- --------- -------- --------- --------
Net Asset Value per Share, End of Period $ 10.11 $ 9.77 $ 9.74 $ 9.43 $ 10.12
======= ========= ======== ========= ========
Total Return 13.26% 9.92% 14.65% (0.34)% (1) 10.47% (2)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $208,761 $ 183,815 $ 92,652 $ 90,577 $ 73,737
Ratio of Expenses to Average Net Assets 0.83% 0.90% 0.87% (4) 0.79% (3)(4) 0.79% (3)(4)
Ratio of Net Investment Income to Average
Net Assets 9.10% 9.21% 9.60% 9.18% (3) 8.60% (3)
Portfolio Turnover Rate 109.45% 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) 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 0.79% 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.
85
<PAGE>
TCW Galileo Mortgage Backed Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Year Ended October 31, Ten Months (Commencement of
--------------------------------- Ended Operations) through
1997 1996 1995 October 31, 1994 December 31, 1993
--------- --------- --------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.67 $ 9.58 $ 9.41 $ 9.86 $ 10.00
--------- --------- --------- ---------- ----------
Income (Loss) from Investment Operations:
Net Investment Income 0.58 0.51 0.67 0.42 0.50
Net Realized and Unrealized Gain (Loss)
on Investments 0.05 0.22 0.25 (0.48) (0.12)
--------- --------- --------- ---------- ----------
Total from Investment Operations 0.63 0.73 0.92 (0.06) 0.38
--------- --------- --------- ---------- ----------
Less Distributions:
Distributions from Net Investment Income (0.38) (0.46) (0.71) (0.39) (0.50)
Distributions in Excess of Net Investment
Income (0.22) (0.18) (0.04) - -
Distributions from Net Realized Gains - - - - (0.02)
--------- --------- --------- ---------- ----------
Total Distributions (0.60) (0.64) (0.75) (0.39) (0.52)
--------- --------- --------- ---------- ----------
Net Asset Value per Share, End of Period $ 9.70 $ 9.67 $ 9.58 $ 9.41 $ 9.86
========= ========= ========= ========== ==========
Total Return 6.71% 7.86% 10.16% (0.61)%/(1)/ 3.89%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 55,307 $ 61,835 $ 81,366 $ 134,948 $ 147,666
Ratio of Expenses to Average Net Assets 0.77% 0.69% 0.61%/(4)/ 0.55%/(3)(4)/ 0.55%/(3)(4)/
Ratio of Net Investment Income to Average
Net Assets 6.00% 5.34% 7.13% 5.18%/(3)/ 5.98%/(3)/
Portfolio Turnover Rate 109.91% 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) 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 0.55% 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.
86
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Long-Term Mortgage Backed Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
June 17, 1993
Year Ended October 31, Ten Months (Commencement of
-------------------------------- Ended Operations) through
1997 1996 1995 October 31, 1994 December 31, 1993
------- -------- ------ ---------------- -------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.56 $ 9.56 $ 8.95 $ 10.07 $ 10.00
------- -------- ------ ------- -------
Income (Loss) from Investment Operations:
Net Investment Income 0.75 0.68 0.72 0.63 0.28
Net Realized and Unrealized Gain (Loss)
on Investments 0.32 0.02 0.71 (1.26) 0.07
------- -------- ------ ------- -------
Total from Investment Operations 1.07 0.70 1.43 (0.63) 0.35
------- -------- ------ ------- -------
Less Distributions:
Distributions from Net Investment Income (0.72) (0.68) (0.82) (0.49) (0.28)
Distributions in Excess of Net Investment
Income - (0.02) - - -
------- -------- ------ ------- -------
Total Distributions (0.72) (0.70) (0.82) (0.49) (0.28)
------- -------- ------ ------- -------
Net Asset Value per Share, End of Period $ 9.91 $ 9.56 $ 9.56 $ 8.95 $ 10.07
======= ======== ======= ======= =======
Total Return 11.66% 7.69% 16.84% (6.39)%/(1)/ 3.51%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $81,442 $112,260 $80,159 $ 66,632 $25,215
Ratio of Expenses to Average Net Assets 0.67% 0.68% 0.68%/(4)/ 0.65%/(3)(4)/ 0.65%/(3)(4)/
Ratio of Net Investment Income to Average
Net Assets 7.77% 7.15% 7.88% 8.03%/(3)/ 5.37%/(3)/
Portfolio Turnover Rate 16.01% 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) 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 0.65% 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.
87
<PAGE>
TCW GALILEO CONVERTIBLE SECURITIES FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
January 2, 1997
(Commencement of
Operations) through
October 31, 1997
--------------------
<S> <C>
Net Asset Value per Share, Beginning
of Period $ 10.00
Income from Investment Operations:
Net Investment Income 0.31
Net Realized and Unrealized Gain
on Investments 1.43
Total from Investment Operations 1.74
Less Distributions:
Distributions from Net Investment Income (0.33)
Net AssetValue per Share, End of Period $ 11.41
Total Return 17.66% (1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 36,890
Ratio of Net Expenses to Average Net Assets 0.95% (2)(3)
Ratio of Net Investment Income to Average
Net Assets 3.54% (2)
Portfolio Turnover Rate 141.43% (1)
Average Commission Rate Paid by the Fund (4) $ 0.06
</TABLE>
(1) For the period January 2,1997 (commencement of operations) through October
31, 1997 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 0.95% of Net Assets as disclosed in
Note 4 of the Financial Statements. Had such action not been taken, total
annualized operating expenses as a percentage of average net assets would have
been 1.08% for the period January 2,1997 (commencement of operations) through
October 31, 1997.
(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.
88
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Core Equity Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1993
Year Ended October 31, Ten Months (Commencement of
----------------------------------- Ended Operations) through
1997 1996 1995 October 31, 1994 December 31, 1993
------- --------- -------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 15.93 $ 13.69 $ 11.57 $ 11.81 $ 10.00
-------- ---------- --------- ---------- ---------
Income (Loss) from Investment Operations:
Net Investment Income 0.01 0.11 0.06 0.04 0.03
Net Realized and Unrealized Gain (Loss)
on Investments 3.57 2.18 2.11 (0.28) 1.81
-------- ---------- --------- ---------- ---------
Total from Investment Operations 3.58 2.29 2.17 (0.24) 1.84
-------- ---------- --------- ---------- ---------
Less Distributions:
Distributions from Net Investment Income (0.02) (0.05) (0.05) - (0.03)
Distributions from Net Realized Gains (0.20) - - - -
-------- ---------- --------- ---------- ---------
Total Distributions (0.22) (0.05) (0.05) - (0.03)
-------- ---------- --------- ---------- ---------
Net Asset Value per Share, End of Period $ 19.29 $ 15.93 $ 13.69 $ 11.57 $ 11.81
======== ========== ========= ========== =========
Total Return 22.68% 16.79% 18.85% (2.03)%/(1)/ 18.41%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $156,113 $ 231,302 $ 197,721 $ 136,122 $ 55,885
Ratio of Expenses to Average Net Assets 0.83% 0.82% 0.85% 0.91% /(3)/ 1.00% /(3)/(4)/
Ratio of Net Investment Income to Average
Net Assets 0.08% 0.18% 0.48% 0.44%/(3)/ 0.55%/(3)/
Portfolio Turnover Rate 39.22% 39.58% 53.77% 23.53%/(1)/ 29.67%/(2)/
Average Commission Rate Paid by the Fund/(5)/ $ 0.06 $ 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.
89
<PAGE>
TCW Galileo Earnings Momentum Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
November 1, 1994
Years Ended October 31, (Commencement of
------------------------------------------ Operations) through
1997 1996 October 31, 1995
-------------------- ------------------ ---------------------
<S> <C> <C> <C>
Net Asset Value per Share, Beginning of Period $ 13.01 $ 11.47 $ 10.00
--------------- -------------- ----------------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.12) (0.11) (0.03)
Net Realized and Unrealized Gain on
Investments 1.98 1.72 1.51
--------------- -------------- ----------------
Total from Investment Operations 1.86 1.61 1.48
--------------- -------------- ----------------
Less Distributions:
Distributions in Excess of Net Investment Income - - (0.01)
Distributions From Net Realized Gains (1.00) (0.07) -
--------------- -------------- ----------------
Total Distributions (1.00) (0.07) (0.01)
--------------- -------------- ----------------
Net Asset Value per Share, End of Period $ 13.87 $ 13.01 $ 11.47
=============== ============== ================
Total Return 15.53% 13.99% 14.76%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 101,667 $ 77,994 $ 63,411
Ratio of Net Expenses to Average Net Assets 1.17% 1.13% 1.14%/(1)/
Ratio of Net Investment (Loss) to Average Net Assets (0.96)% (0.82)% (0.28)%
Portfolio Turnover Rate 93.06% 99.03% 85.91%
Average Commission Rate Paid by the Fund /(2)/ $ 0.06 $ 0.06 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 November 1, 1994
(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.
90
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Mid-Cap Growth Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
June 3, 1996
(Commencement of
Year Ended Operations) through
October 31, 1997 October 31, 1996
---------------- -------------------
<S> <C> <C>
Net Asset Value per Share, Beginning of Period $ 9.19 $ 10.00
---------------- -------------------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.08) (0.03)
Net Realized and Unrealized Gain (Loss) on Investments 0.29 (0.78)
---------------- -------------------
Total from Investments Operations 0.21 (0.81)
---------------- -------------------
Net Asset Value per Share, End of Period $ 9.40 $ 9.19
================ ===================
Total Return 2.28% (8.10)% (1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 135,850 $ 92,430
Ratio of Net Expenses to Average Net Assets 1.12% 1.20% (2)(3)
Ratio of Net Investment (Loss) to Average Net Assets (0.86)% (0.80)% (2)
Portfolio Turnover Rate 50.45% 19.19% (1)
Average Commission Rate Paid by the Fund /(4)/ $ 0.06 $ 0.06
</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 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 1.20% of net assets
through December 31, 1996. 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.
91
<PAGE>
TCW Galileo Small Cap Growth Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
Years Ended October 31, (Commencement of
------------------------------------------------------ Operations) through
1997 1996 1995 October 31, 1994
--------------- --------------- ------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 17.17 $ 13.53 $ 9.39 $ 10.00
--------------- --------------- ------------- ---------------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.15) (0.13) (0.07) (0.04)
Net Realized and Unrealized Gain (Loss)
on Investments 1.91 4.08 4.72 (0.57)
--------------- --------------- ------------- ---------------
Total from Investment Operations 1.76 3.95 4.65 (0.61)
--------------- --------------- ------------- ---------------
Less Distributions:
Distributions from Net Investment Income - (0.01) - -
Distributions from Net Realized Gains (0.19) (0.30) (0.51) -
--------------- --------------- ------------- ---------------
Total Distributions (0.19) (0.31) (0.51) -
--------------- --------------- ------------- ---------------
Net Asset Value per Share, End of Period $ 18.74 $ 17.17 $ 13.53 $ 9.39
=============== =============== ============= ===============
Total Return 10.38% 29.73% 49.89% (6.10)%/(1)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 144,756 $ 132,444 $ 66,056 $ 51,089
Ratio of Expenses to Average Net Assets 1.14% 1.14% 1.21%/(3)/ 1.09%/(2)(3)/
Ratio of Net Investment (Loss) to Average
Net Assets (0.89)% (0.76)% (0.61)% (0.59)%/(2)/
Portfolio Turnover Rate 60.52% 45.43% 89.73% 88.63%/(1)/
Average Commission Rate Paid by the Fund/(4)/ $ 0.06 $ 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.
92
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Asia Pacific Equity Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- --------------------
March 1, 1994
Year Ended October 31, (Commencement of
------------------------------------------------- Operations) through
1997 1996 1995 October 31, 1994
------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 9.61 $ 8.67 $ 10.19 $ 10.00
------------- ------------- ------------- -------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) (0.01) 0.06 0.06 0.03
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency (2.10) 0.93 (1.19) 0.16
------------- ------------- ------------- -------------
Total from Investment Operations (2.11) 0.99 (1.13) 0.19
------------- ------------- ------------- -------------
Less Distributions:
Distributions from Net Investment Income (0.08) (0.05) (0.01) -
Distributions in Excess of Net Investment Income (0.05) - (0.22) -
Distributions from Net Realized Gains - - (0.16) -
------------- ------------- ------------- -------------
Total Distributions (0.13) (0.05) (0.39) -
------------- ------------- ------------- -------------
Net Asset Value per Share, End of Period $ 7.37 $ 9.61 $ 8.67 $ 10.19
============= ============= ============= =============
Total Return (22.40)% 11.36% (10.98)% 1.90%/(1)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 21,327 $ 48,266 $ 46,709 $ 54,019
Ratio of Expenses to Average Net Assets 1.49% 1.43% 1.47%/(3)/ 1.40%/(2)(3)/
Ratio of Net Investment Income (Loss) to
Average Net Assets (0.02)% 0.66% 0.74% 0.45%/(2)/
Portfolio Turnover Rate 81.92% 84.81% 102.01% 46.75%/(1)/
Average Commission Rate Paid by the Fund/(4)/ $ 0.00 $ 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.
93
<PAGE>
TCW Galileo Emerging Markets Fund
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Year Ended October 31, Operations) through
------------------------------------
1997 1996 1995 October 31, 1994
-------- -------- -------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 8.18 $ 7.19 $ 9.73 $ 10.00
-------- -------- -------- ---------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.03 0.07 0.04 (0.01)
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency 0.22 0.94 (2.58) (0.26)
-------- -------- -------- ---------
Total from Investment Operations 0.25 1.01 (2.54) (0.27)
-------- -------- -------- ---------
Less Distributions:
Distributions from Net Investment Income (0.11) (0.02) - -
-------- -------- -------- ---------
Net Asset Value per Share, End of Period $ 8.32 $ 8.18 $ 7.19 $ 9.73
======== ======== ======== =========
Total Return 2.82% 14.14% (26.11)% (2.70)% /(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 47,726 $ 57,639 $ 51,873 $ 70,212
Ratio of Expenses to Average Net Assets 1.50% 1.41% 1.55% 1.70% /(2)/
Ratio of Net Investment Income (Loss) to
Average Net Assets 0.36% 0.82% 0.54% (0.09)% /(2)/
Portfolio Turnover Rate 79.80% 83.76% 74.24% 61.28% /(1)/
Average Commission Rate Paid by the Fund /(3)/ $ 0.00 $ 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.
94
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo Latin America Equity Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -------------------- March 1, 1993
Year Ended October 31, Ten Months (Commencement of
---------------------------------------- Ended Operations) through
1997 1996 1995 October 31, 1994 December 31, 1993
------------ ------------ ------------ ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 10.01 $ 7.92 $ 14.99 $ 15.11 $ 10.00
------------ ------------ ------------ ------------- ---------------
Income (Loss) from Investment Operations:
Net Investment Income 0.11 0.11 0.06 0.01 0.08
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency 2.50 2.03 (5.92) (0.13) 6.35
------------ ------------ ------------ ------------- ---------------
Total from Investment Operations 2.61 2.14 (5.86) (0.12) 6.43
------------ ------------ ------------ ------------- ---------------
Less Distributions:
Distributions from Net Investment Income (0.11) (0.05) - - (0.08)
Distributions from Net Realized Gains - - - - (1.21)
Distributions in Excess of Net Realized
Gains - - (1.21) - (0.03)
------------ ------------ ------------ ------------- ---------------
Total Distributions (0.11) (0.05) (1.21) - (1.32)
------------ ------------ ------------ ------------- ---------------
Net Asset Value per Share, End of Period $ 12.51 $ 10.01 $ 7.92 $ 14.99 $ 15.11
============ ============ ============ ============= ===============
Total Return 26.24% 27.08% (40.95)% (0.79)% /(1)/ 64.27% /(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 55,336 $ 68,323 $ 38,942 $ 122,610 $ 89,910
Ratio of Expenses to Average Net Assets 1.46% 1.44% 1.58%/(4)/ 1.36% /(3)(4)/ 1.50% /(3)/
/(4)/
Ratio of Net Investment Income to Average
Net Assets 0.87% 1.12% 0.59% 0.11% /(3)/ 0.77% /(3)/
Portfolio Turnover Rate 21.17% 44.32% 75.62% 143.65% /(1)/ 120.06% /(2)/
Average Commission Rate Paid by the Fund /(5)/ $ 0.00 0.0 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.
95
<PAGE>
TCW GALILEO FUNDS, INC.
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 schedules of investments, of TCW Galileo Funds, Inc. (comprising TCW Galileo
Money Market Fund, TCW Galileo Core 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 Convertible 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, 1997 and related statements of
operations for the periods then ended, the statements of changes in net assets
for each of the periods ended October 31, 1997 and 1996, and the financial
highlights for each of the respective periods in the periods ended October 31,
1997. 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, 1997 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, 1997 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
December 10, 1997
Los Angeles, California
96
<PAGE>
TCW GALILEO FUNDS, INC.
SHAREHOLDER INFORMATION INVESTMENT ADVISER
- -----------------------
TCW Funds Management, Inc.
865 South Figueroa Street
DIRECTORS AND OFFICERS Los Angeles, California 90017
(213) 244-0000
Marc I. Stern
Director and Chairman of the Board
SUB-ADVISERS
Thomas E. Larkin, Jr.
Director and President TCW Asia Limited
Suite 1308, One Pacific Place
John C. Argue 88 Queensway
Director Hong Kong
Norman Barker, Jr. TCW London International, Limited
Director 14-16 Charles II Street
London, England SW1Y4QU
Richard W. Call
Director
CUSTODIAN
Alvin R. Albe, Jr.
Senior Vice President BNY Western Trust Company
700 South Flower Street
Michael E. Cahill Suite 200
Senior Vice President, Los Angeles, California 90017
General Counsel and Assistant Secretary
Ronald E. Robison TRANSFER AGENT
Senior Vice President
DST Systems, Inc.
David K. Sandie 811 Main Street
Senior Vice President and Treasurer Kansas City, Missouri 64105
Philip K. Holl
Secretary DISTRIBUTOR
TCW Brokerage Services
Marie M. Bender 865 South Figueroa Street
Assistant Secretary Los Angeles, California 90017
(213) 244-0000
Hilary G.D. Lord
Assistant Secretary
INDEPENDENT AUDITORS
Peter C. DiBona
Assistant Treasurer Deloitte & Touche LLP
1000 Wilshire Boulevard
Los Angeles, California 90017
97
<PAGE>
TAX INFORMATION NOTICE (Unaudited)
----------------------------------
On account of the year ended October 31, 1997, the following funds paid capital
gain distributions within the meaning of Section 852 (b)(3)(c) of the Internal
Revenue Code.
<TABLE>
<CAPTION>
Amount Per
Fund Share
- -------- ------------
<S> <C>
TCW Galileo Long-Term Mortgage Backed Securities Fund $ 0.05
TCW Galileo High Yield Bond Fund 0.15
TCW Galileo Convertible Securities Fund 0.58
TCW Galileo Core Equity Fund 9.12
TCW Galileo Earnings Momentum Fund 1.04
TCW Galileo Small Cap Growth Fund 1.28
TCW Galileo Asia Pacific Equity Fund 1.96
</TABLE>
This information is given to meet certain requirements of the Internal Revenue
Code and should not be used by shareholders for preparing their income tax
returns. For income tax preparation purposes, please refer to the calendar year
end information you will receive from the Funds' transfer agent in January 1998.
98
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> TCW GALILEO CORE EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 105,382
<INVESTMENTS-AT-VALUE> 155,994
<RECEIVABLES> 393
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 156,390
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 277
<TOTAL-LIABILITIES> 277
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 46,832
<SHARES-COMMON-STOCK> 8,091
<SHARES-COMMON-PRIOR> 14,516
<ACCUMULATED-NII-CURRENT> 165
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 58,504
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 50,612
<NET-ASSETS> 156,113
<DIVIDEND-INCOME> 1,987
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,806
<NET-INVESTMENT-INCOME> 181
<REALIZED-GAINS-CURRENT> 58,507
<APPREC-INCREASE-CURRENT> (9,558)
<NET-CHANGE-FROM-OPS> 49,130
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 291
<DISTRIBUTIONS-OF-GAINS> 2,817
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 917
<NUMBER-OF-SHARES-REDEEMED> 7,521
<SHARES-REINVESTED> 179
<NET-CHANGE-IN-ASSETS> (75,189)
<ACCUMULATED-NII-PRIOR> 275
<ACCUMULATED-GAINS-PRIOR> 2,814
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,628
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,806
<AVERAGE-NET-ASSETS> 211,603
<PER-SHARE-NAV-BEGIN> 15.93
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 3.57
<PER-SHARE-DIVIDEND> .02
<PER-SHARE-DISTRIBUTIONS> .20
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.29
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> TCW GALILEO LATIN AMERICA EQUITY FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 42,850
<INVESTMENTS-AT-VALUE> 54,353
<RECEIVABLES> 1,051
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 93
<TOTAL-ASSETS> 55,500
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 164
<TOTAL-LIABILITIES> 164
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57,306
<SHARES-COMMON-STOCK> 4,425
<SHARES-COMMON-PRIOR> 6,829
<ACCUMULATED-NII-CURRENT> 892
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (14,458)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,596
<NET-ASSETS> 55,336
<DIVIDEND-INCOME> 1,676
<INTEREST-INCOME> 84
<OTHER-INCOME> 0
<EXPENSES-NET> 1,102
<NET-INVESTMENT-INCOME> 658
<REALIZED-GAINS-CURRENT> 17,076
<APPREC-INCREASE-CURRENT> 3,998
<NET-CHANGE-FROM-OPS> 21,732
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 726
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 880
<NUMBER-OF-SHARES-REDEEMED> 3,292
<SHARES-REINVESTED> 8
<NET-CHANGE-IN-ASSETS> (12,987)
<ACCUMULATED-NII-PRIOR> 960
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 31,534
<GROSS-ADVISORY-FEES> 754
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,102
<AVERAGE-NET-ASSETS> 73,223
<PER-SHARE-NAV-BEGIN> 10.01
<PER-SHARE-NII> 0.11
<PER-SHARE-GAIN-APPREC> 2.50
<PER-SHARE-DIVIDEND> 0.11
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.51
<EXPENSE-RATIO> 1.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> TCW GALILEO CORE FIXED INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 19,561
<INVESTMENTS-AT-VALUE> 20,006
<RECEIVABLES> 917
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20,926
<PAYABLE-FOR-SECURITIES> 1,407
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 151
<TOTAL-LIABILITIES> 1,558
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21,567
<SHARES-COMMON-STOCK> 2,013
<SHARES-COMMON-PRIOR> 2,647
<ACCUMULATED-NII-CURRENT> 573
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,217)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 445
<NET-ASSETS> 19,368
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,559
<OTHER-INCOME> 0
<EXPENSES-NET> 205
<NET-INVESTMENT-INCOME> 1,354
<REALIZED-GAINS-CURRENT> 241
<APPREC-INCREASE-CURRENT> 42
<NET-CHANGE-FROM-OPS> 1,637
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,373
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 718
<NUMBER-OF-SHARES-REDEEMED> 1,491
<SHARES-REINVESTED> 139
<NET-CHANGE-IN-ASSETS> (5,638)
<ACCUMULATED-NII-PRIOR> 592
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3,458
<GROSS-ADVISORY-FEES> 77
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 205
<AVERAGE-NET-ASSETS> 21,745
<PER-SHARE-NAV-BEGIN> 9.45
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> .19
<PER-SHARE-DIVIDEND> (.60)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.62
<EXPENSE-RATIO> 0.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> TCW GALILEO HIGH YIELD BOND FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 205,353
<INVESTMENTS-AT-VALUE> 209,893
<RECEIVABLES> 6,990
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 216,886
<PAYABLE-FOR-SECURITIES> 1,564
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,561
<TOTAL-LIABILITIES> 8,125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 201,054
<SHARES-COMMON-STOCK> 20,647
<SHARES-COMMON-PRIOR> 18,806
<ACCUMULATED-NII-CURRENT> 296
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,871
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,540
<NET-ASSETS> 208,761
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21,365
<OTHER-INCOME> 0
<EXPENSES-NET> 1,794
<NET-INVESTMENT-INCOME> 19,571
<REALIZED-GAINS-CURRENT> 5,556
<APPREC-INCREASE-CURRENT> 804
<NET-CHANGE-FROM-OPS> 25,931
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19,383
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,039
<NUMBER-OF-SHARES-REDEEMED> 12,887
<SHARES-REINVESTED> 1,689
<NET-CHANGE-IN-ASSETS> 24,946
<ACCUMULATED-NII-PRIOR> 108
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 2,685
<GROSS-ADVISORY-FEES> 1,612
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,794
<AVERAGE-NET-ASSETS> 213,552
<PER-SHARE-NAV-BEGIN> 9.77
<PER-SHARE-NII> .91
<PER-SHARE-GAIN-APPREC> .34
<PER-SHARE-DIVIDEND> .91
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.11
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> TCW GALILEO MORTGAGE BACKED SECURITIES FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 55,972
<INVESTMENTS-AT-VALUE> 54,637
<RECEIVABLES> 1,023
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 55,663
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 356
<TOTAL-LIABILITIES> 356
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63,316
<SHARES-COMMON-STOCK> 5,701
<SHARES-COMMON-PRIOR> 6,398
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,219
<ACCUMULATED-NET-GAINS> (5,455)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,335)
<NET-ASSETS> 55,307
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,615
<OTHER-INCOME> 0
<EXPENSES-NET> 410
<NET-INVESTMENT-INCOME> 3,205
<REALIZED-GAINS-CURRENT> (78)
<APPREC-INCREASE-CURRENT> 248
<NET-CHANGE-FROM-OPS> 3,375
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,046
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1,219
<NUMBER-OF-SHARES-SOLD> 8,710
<NUMBER-OF-SHARES-REDEEMED> 9,728
<SHARES-REINVESTED> 321
<NET-CHANGE-IN-ASSETS> (6,528)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 1,159
<OVERDIST-NET-GAINS-PRIOR> 5,377
<GROSS-ADVISORY-FEES> 265
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 410
<AVERAGE-NET-ASSETS> 52,644
<PER-SHARE-NAV-BEGIN> 9.67
<PER-SHARE-NII> 0.58
<PER-SHARE-GAIN-APPREC> 0.05
<PER-SHARE-DIVIDEND> 0.60
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.70
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> TCW GALILEO LONG TERM MORTGAGE BACKED SECURITIES FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 78,484
<INVESTMENTS-AT-VALUE> 81,627
<RECEIVABLES> 704
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 82,337
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 895
<TOTAL-LIABILITIES> 895
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77,539
<SHARES-COMMON-STOCK> 8,219
<SHARES-COMMON-PRIOR> 11,741
<ACCUMULATED-NII-CURRENT> 287
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 473
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,143
<NET-ASSETS> 81,442
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,641
<OTHER-INCOME> 0
<EXPENSES-NET> 666
<NET-INVESTMENT-INCOME> 7,975
<REALIZED-GAINS-CURRENT> 569
<APPREC-INCREASE-CURRENT> 1,875
<NET-CHANGE-FROM-OPS> 10,419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,476
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 516
<NUMBER-OF-SHARES-REDEEMED> 4,796
<SHARES-REINVESTED> 758
<NET-CHANGE-IN-ASSETS> (30,818)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 212
<OVERDIST-NET-GAINS-PRIOR> 125
<GROSS-ADVISORY-FEES> 512
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 666
<AVERAGE-NET-ASSETS> 101,936
<PER-SHARE-NAV-BEGIN> 9.56
<PER-SHARE-NII> 0.75
<PER-SHARE-GAIN-APPREC> 0.32
<PER-SHARE-DIVIDEND> 0.72
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> 0.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> TCW GALILEO SMALL CAP GROWTH FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 99,172
<INVESTMENTS-AT-VALUE> 145,696
<RECEIVABLES> 2,971
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 148,670
<PAYABLE-FOR-SECURITIES> 1,218
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,696
<TOTAL-LIABILITIES> 3,914
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 89,492
<SHARES-COMMON-STOCK> 7,724
<SHARES-COMMON-PRIOR> 7,713
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 2,493
<ACCUMULATED-NET-GAINS> 11,233
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 46,524
<NET-ASSETS> 144,756
<DIVIDEND-INCOME> 135
<INTEREST-INCOME> 184
<OTHER-INCOME> 0
<EXPENSES-NET> 1,470
<NET-INVESTMENT-INCOME> (1,151)
<REALIZED-GAINS-CURRENT> 10,965
<APPREC-INCREASE-CURRENT> 2,818
<NET-CHANGE-FROM-OPS> 12,632
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,426
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,162
<NUMBER-OF-SHARES-REDEEMED> 2,231
<SHARES-REINVESTED> 81
<NET-CHANGE-IN-ASSETS> 17,312
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,694
<OVERDISTRIB-NII-PRIOR> 1,342
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,470
<AVERAGE-NET-ASSETS> 129,704
<PER-SHARE-NAV-BEGIN> 17.17
<PER-SHARE-NII> (0.15)
<PER-SHARE-GAIN-APPREC> 1.91
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.74
<EXPENSE-RATIO> 1.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> TCW GALILEO EMERGING MARKETS FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 44,006
<INVESTMENTS-AT-VALUE> 45,270
<RECEIVABLES> 3,184
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 35
<TOTAL-ASSETS> 48,491
<PAYABLE-FOR-SECURITIES> 621
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 144
<TOTAL-LIABILITIES> 765
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 51,337
<SHARES-COMMON-STOCK> 5,738
<SHARES-COMMON-PRIOR> 7,048
<ACCUMULATED-NII-CURRENT> 110
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5,020)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,299
<NET-ASSETS> 47,726
<DIVIDEND-INCOME> 1,013
<INTEREST-INCOME> 144
<OTHER-INCOME> 0
<EXPENSES-NET> 936
<NET-INVESTMENT-INCOME> 221
<REALIZED-GAINS-CURRENT> 4,502
<APPREC-INCREASE-CURRENT> (1,473)
<NET-CHANGE-FROM-OPS> 3,250
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 670
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 775
<NUMBER-OF-SHARES-REDEEMED> 2,135
<SHARES-REINVESTED> 50
<NET-CHANGE-IN-ASSETS> (9,913)
<ACCUMULATED-NII-PRIOR> 559
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 9,522
<GROSS-ADVISORY-FEES> 623
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 936
<AVERAGE-NET-ASSETS> 62,133
<PER-SHARE-NAV-BEGIN> 8.18
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .22
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.32
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> TCW GALILEO ASIA PACIFIC FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 22,874
<INVESTMENTS-AT-VALUE> 19,532
<RECEIVABLES> 2,122
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,656
<PAYABLE-FOR-SECURITIES> 241
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 88
<TOTAL-LIABILITIES> 329
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,834
<SHARES-COMMON-STOCK> 2,892
<SHARES-COMMON-PRIOR> 5,023
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 233
<ACCUMULATED-NET-GAINS> 4,068
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,342)
<NET-ASSETS> 21,327
<DIVIDEND-INCOME> 617
<INTEREST-INCOME> 54
<OTHER-INCOME> 0
<EXPENSES-NET> 681
<NET-INVESTMENT-INCOME> (10)
<REALIZED-GAINS-CURRENT> 4,190
<APPREC-INCREASE-CURRENT> (9,363)
<NET-CHANGE-FROM-OPS> (5,183)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 322
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 233
<NUMBER-OF-SHARES-SOLD> 671
<NUMBER-OF-SHARES-REDEEMED> 2,849
<SHARES-REINVESTED> 47
<NET-CHANGE-IN-ASSETS> (26,939)
<ACCUMULATED-NII-PRIOR> 332
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 122
<GROSS-ADVISORY-FEES> 457
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 681
<AVERAGE-NET-ASSETS> 45,636
<PER-SHARE-NAV-BEGIN> 9.61
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> (2.10)
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.37
<EXPENSE-RATIO> 1.49
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> TCW GALILEO MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 222,088
<INVESTMENTS-AT-VALUE> 222,088
<RECEIVABLES> 1,704
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 223,792
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,021
<TOTAL-LIABILITIES> 1,021
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 222,771
<SHARES-COMMON-STOCK> 222,771
<SHARES-COMMON-PRIOR> 233,671
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 222,771
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13,174
<OTHER-INCOME> 0
<EXPENSES-NET> 944
<NET-INVESTMENT-INCOME> 12,230
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 12,230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12,230
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,234,945
<NUMBER-OF-SHARES-REDEEMED> 1,251,280
<SHARES-REINVESTED> 5,435
<NET-CHANGE-IN-ASSETS> (10,900)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 592
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 955
<AVERAGE-NET-ASSETS> 236,732
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> TCW GALILEO EARNINGS MOMENTUM FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 83,573
<INVESTMENTS-AT-VALUE> 103,950
<RECEIVABLES> 1,998
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 105,949
<PAYABLE-FOR-SECURITIES> 4,151
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 131
<TOTAL-LIABILITIES> 4,282
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74,995
<SHARES-COMMON-STOCK> 7,327
<SHARES-COMMON-PRIOR> 5,994
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,570
<ACCUMULATED-NET-GAINS> 7,865
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20,377
<NET-ASSETS> 101,667
<DIVIDEND-INCOME> 80
<INTEREST-INCOME> 95
<OTHER-INCOME> 0
<EXPENSES-NET> 969
<NET-INVESTMENT-INCOME> (794)
<REALIZED-GAINS-CURRENT> 7,257
<APPREC-INCREASE-CURRENT> 8,786
<NET-CHANGE-FROM-OPS> 15,249
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 5,829
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,697
<NUMBER-OF-SHARES-REDEEMED> 1,822
<SHARES-REINVESTED> 458
<NET-CHANGE-IN-ASSETS> 23,673
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6,437
<OVERDISTRIB-NII-PRIOR> 776
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 828
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 969
<AVERAGE-NET-ASSETS> 82,890
<PER-SHARE-NAV-BEGIN> 13.01
<PER-SHARE-NII> (.12)
<PER-SHARE-GAIN-APPREC> 1.98
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.87
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> TCW GALILEO MID-CAP GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 112,201
<INVESTMENTS-AT-VALUE> 144,773
<RECEIVABLES> 970
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 145,745
<PAYABLE-FOR-SECURITIES> 6,909
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,986
<TOTAL-LIABILITIES> 9,895
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 115,616
<SHARES-COMMON-STOCK> 14,451
<SHARES-COMMON-PRIOR> 10,060
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,215
<ACCUMULATED-NET-GAINS> (11,123)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32,572
<NET-ASSETS> 135,850
<DIVIDEND-INCOME> 69
<INTEREST-INCOME> 204
<OTHER-INCOME> 0
<EXPENSES-NET> 1,217
<NET-INVESTMENT-INCOME> (944)
<REALIZED-GAINS-CURRENT> (8,474)
<APPREC-INCREASE-CURRENT> 12,646
<NET-CHANGE-FROM-OPS> 3,228
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,110
<NUMBER-OF-SHARES-REDEEMED> 2,719
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 43,420
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 271
<OVERDIST-NET-GAINS-PRIOR> 2,649
<GROSS-ADVISORY-FEES> 1,090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,217
<AVERAGE-NET-ASSETS> 109,297
<PER-SHARE-NAV-BEGIN> 9.19
<PER-SHARE-NII> (.08)
<PER-SHARE-GAIN-APPREC> .29
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.40
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> TCW GALILEO CONVERTIBLE SECURITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 33,525
<INVESTMENTS-AT-VALUE> 36,760
<RECEIVABLES> 666
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 37,429
<PAYABLE-FOR-SECURITIES> 468
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 71
<TOTAL-LIABILITIES> 539
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,176
<SHARES-COMMON-STOCK> 3,233
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,477
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,235
<NET-ASSETS> 36,890
<DIVIDEND-INCOME> 329
<INTEREST-INCOME> 861
<OTHER-INCOME> 0
<EXPENSES-NET> 251
<NET-INVESTMENT-INCOME> 939
<REALIZED-GAINS-CURRENT> 2,477
<APPREC-INCREASE-CURRENT> 1,623
<NET-CHANGE-FROM-OPS> 5,039
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 937
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,061
<NUMBER-OF-SHARES-REDEEMED> 891
<SHARES-REINVESTED> 63
<NET-CHANGE-IN-ASSETS> 36,890
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 198
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 286
<AVERAGE-NET-ASSETS> 31,611
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 1.43
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.33
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.41
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
|
|