<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
ANNUAL REPORT
OCTOBER 31, 1998
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TABLE OF CONTENTS
- -----------------
<TABLE>
<S> <C>
Letter to Shareholders............................................... 2
Management Discussions............................................... 3
Schedules of Investments:
TCW Galileo Asia Pacific Equities Fund.............................. 15
TCW Galileo Emerging Markets Equities Fund.......................... 17
TCW Galileo Emerging Markets Income Fund............................ 22
TCW Galileo European Equities Fund.................................. 25
TCW Galileo International Equities Fund............................. 28
TCW Galileo Japanese Equities Fund.................................. 29
TCW Galileo Latin America Equities Fund............................. 31
Statements of Assets and Liabilities................................. 34
Statements of Operations............................................. 36
Statements of Changes in Net Assets.................................. 38
Notes to Financial Statements........................................ 45
Financial Highlights................................................. 52
Independent Auditors' Report......................................... 59
Shareholder Information.............................................. 60
Tax Information Notice............................................... 61
</TABLE>
1
<PAGE>
TO OUR SHAREHOLDERS
- -------------------
We are pleased to submit the October 31, 1998 Annual Reports for the TCW Galileo
Funds. In our new format, we have separated our reports into three categories;
1) U.S. Equities Funds, 2) U.S. Fixed Income Funds, and 3) International Funds
to provide more focused information to our shareholders. In addition, we have
incorporated in this report a discussion and analysis of how the Fund's
performance over the last fiscal year has compared to the benchmark as well as a
graphical analysis of each Fund's performance since inception.
TCW is committed to providing you with superior professional investment
management and distinctive personal service through 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.
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.
/s/ Marc I. Stern
Marc I. Stern
Chairman of the Board
December 10, 1998
2
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
MANAGEMENT DISCUSSIONS
- ----------------------
TCW GALILEO ASIA PACIFIC EQUITIES FUND
- --------------------------------------
The total return earned by the Fund during the fiscal year ended October 31,
1998, was a negative 14.8%. This compares favorably to the negative 25.2%
return of the Fund's benchmark, the Morgan Stanley Combined Far East Free ex-
Japan Index, for the same period.
During the last year, the Asian equity markets have witnessed unprecedented
volatility, with several monthly swings in excess of 20%. Nevertheless, the
trend has been a downward spiral as the devaluation of the Thai baht (in July
1997) triggered currency weaknesses in Singapore, Malaysia, South Korea,
Indonesia and the Philippines. The only currencies to hold up have been the
Hong Kong dollar and the Chinese remimbi. In addition, economic growth in the
region has slowed sharply, and several economies have moved into recession.
The Fund was able to withstand this volatility by holding large cash positions
at certain critical times, which at one point was as high as 30%. The Fund also
totally avoided the weaker markets of Malaysia, Indonesia and Thailand. The Fund
focused its investments mostly in Hong Kong, Taiwan and Singapore over the
fiscal year.
At October 31, 1998, the Fund's industry weightings (as a percentage of net
assets)were: 5.6% in Banking, 3% in Capital Goods, 6.4% in Conglomerates, 2.2%
in Construction, 10.2% in Electricity, 26.4% in Electronics, 3.2% in Financial
Services, 2.2% in Foods, 2.6% in Media & Publishing, 0.8% in Mining, 14.1% in
Real Estate, 3.1% in Specialty Chemicals, 1.5% in Steel and 6.5% in
Telecommunications.
The outlook for Asia has improved in recent months and we believe that the
market declines may well have touched bottom. Investor sentiment has been
bolstered by lower interest rates, more stable currencies and current account
balances moving from deficits to surpluses. On a relative basis, we believe
that Asia will likely outperform other Emerging Market regions on a risk-reward
basis.
3
<PAGE>
MANAGEMENT DISCUSSIONS (CONTINUED)
- ---------------------------------
TCW GALILEO ASIA PACIFIC EQUITIES FUND (CONTINUED)
- --------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
(14.8)% (9.7)% (5.7)% 2.5%
-----------------------------------------------
TCW MSCI FAR EAST FREE (EX-JAPAN)
-----------------------------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1993 APR 260,747.50 271,375.00
MAY 282,603.36 286,626.28
JUN 278,864.51 278,744.05
JULY 284,578.45 279,914.78
AUG 306,547.90 302,839.80
SEP 319,790.77 313,954.02
OCT 385,207.17 371,376.21
NOV 395,557.69 368,368.06
DEC 485,139.64 457,402.62
1994 JAN 458,447.26 425,750.36
FEB 430,647.01 400,843.96
MAR 380,261.31 356,310.20
APR 396,627.76 372,237.27
MAY 413,424.95 387,647.89
JUN 391,029.72 369,777.32
JULY 407,824.44 389,893.21
AUG 438,399.04 421,006.68
SEP 432,800.69 413,512.77
OCT 438,829.60 421,080.05
NOV 391,457.94 380,403.72
DEC 376,453.36 370,475.18
1995 JAN 333,341.92 330,315.67
FEB 362,232.67 363,248.14
MAR 360,454.10 363,938.31
APR 358,677.07 359,753.02
MAY 401,790.05 402,995.34
JUN 396,458.30 396,426.51
JULY 414,679.52 402,055.77
AUG 395,612.55 382,314.83
SEP 396,514.55 388,431.87
OCT 390,658.03 382,022.74
NOV 384,802.07 377,476.67
DEC 402,375.98 395,746.54
1996 JAN 444,730.07 431,482.46
FEB 438,872.98 429,368.19
MAR 436,621.56 432,030.27
APR 452,392.33 443,349.47
MAY 449,239.16 438,295.28
JUN 431,664.92 428,871.93
JUL 408,342.06 397,221.19
AUG 425,998.78 410,806.15
SEP 435,507.07 420,665.50
OCT 435,054.14 412,252.19
NOV 470,819.94 435,338.31
DEC 484,403.10 432,116.81
1997 JAN 485,308.93 437,820.75
FEB 486,667.80 439,002.87
MAR 460,412.07 413,935.80
APR 454,528.00 402,759.53
MAY 496,630.93 422,333.65
JUN 541,451.87 432,934.22
JUL 545,550.66 434,233.03
AUG 464,934.64 353,639.38
SEP 455,775.43 350,491.99
OCT 337,592.86 264,411.15
NOV 320,645.70 247,171.55
DEC 313,161.83 235,579.20
1998 JAN 306,557.25 215,248.72
FEB 340,680.13 264,196.27
MAR 331,325.06 257,274.33
APR 309,308.51 230,286.25
MAY 265,278.44 193,993.14
JUN 248,767.51 172,324.11
JUL 244,128.00 167,102.69
AUG 226,045.44 140,817.43
SEP 241,303.50 155,631.43
OCT 287,643.43 197,807.54
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Galileo Asia Pacific Equities Fund's
registration became effective. The predecessor limited partnership was not
registered under the Investment Company Act of 1940, as amended ("1940
Act"), and, therefore was not subject to certain investment restrictions
that are imposed by the 1940 Act. If the limited partnership had been
registered under the 1940 Act, the limited partnership's performance may
have been lower.
4
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
TCW GALILEO EMERGING MARKETS EQUITIES FUND
- ------------------------------------------
The total return earned by the Fund during the fiscal year ended October 31,
1998, was a negative 33%. This compares to the Fund's benchmark, the
International Finance Corporation Composite Investable Index ("IFC Investible
Emerging Markets"), which posted a negative 10.1% return for the same period.
As an asset class, Emerging Markets have witnessed unprecedented turmoil over
the past 12 months. The crisis scenario began in Asia as the devaluation of the
Thai baht in the summer of 1997 sparked other Asian currency devaluations.
Subsequently, Latin America came under pressure in the latter part of 1997 as
investors became concerned about the widening current account deficits. In the
spring of 1998, Emerging Markets rallied on the back of a strong but short-lived
rebound in Asia, which withered rapidly as the sharp slowdown of the Asian
economies materialized. The crisis culminated with the Russian devaluation and
debt default in mid-August 1998. Emerging Markets have rebounded sharply as the
U.S. Federal Reserve began to cut interest rates toward the end of September.
Monetary authorities in other G-7 and Emerging Market countries have followed
suit and we expect that global interest rates will continue to decline in the
short term.
The Fund has had a difficult year as performance was hurt by the overweight
allocation to Latin America. The Fund also raised its cash position amid the
sharp declines toward the end of 1997. While this defensive strategy proved
fortuitous through much of the Fund's fiscal year, we missed the rally in South
Africa, and were underweight in Asia when the markets turned upward in
September. In order to better weather the recent volatility, the Fund closed
out the fiscal year neutrally weighted in most countries.
At October 31, 1998, the Fund's industry weightings (as a percentage of net
assets) were: 15.2% in Banking, 6.4% in Beverages, 2.8% in Cement, 2.9% in
Conglomerates, 1.2% in Consumer Durables, 18.5% in Electronics, 3.5% in
Financial Services, 1.5% in Foods, 0.6% in Healthcare, 1.1% in Industrials, 1.6%
in Investment Companies, 3.3% in Media & Publishing, 5.5% in Mining, 3.4% in
Petroleum, 3.9% in Retail, 2.6% in Specialty Chemicals, 2% in Steel and 15.5% in
Telecommunications.
The outlook for Emerging Markets has improved considerably as most of the risk
going forward appears to have already been priced into equity valuations at
current prices. Furthermore, we believe that Asia has probably seen its lows
and will likely outperform the other regions. Emerging equity markets appear to
have become attractive again on a risk-reward basis for the longer term
investor.
5
<PAGE>
MANAGEMENT DISCUSSIONS (CONTINUED)
- ----------------------------------
TCW GALILEO EMERGING MARKETS EQUITIES FUND (CONTINUED)
- ------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
(33.0)% (7.7)% (7.7)% (2.7)%
-----------------------------------------------
IFC INVESTABLE
TCW EMERGING MARKETS
----------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1993 JUN 254,500.00 257,096.46
JULY 259,793.60 265,078.74
AUG 278,005.13 286,604.33
SEP 283,815.44 298,139.76
OCT 320,370.87 323,238.19
NOV 335,972.93 343,730.31
DEC 404,276.22 402,450.79
1994 JAN 408,561.55 405,236.22
FEB 380,329.95 394,714.57
MAR 337,733.00 354,901.57
APR 332,406.95 348,159.45
MAY 340,394.68 356,348.43
JUN 321,758.08 343,592.52
JULY 336,591.12 368,277.56
AUG 371,960.12 415,620.08
SEP 376,903.47 425,935.04
OCT 370,058.90 411,929.13
NOV 352,943.68 396,092.52
DEC 311,486.91 353,484.25
1995 JAN 273,834.37 306,830.71
FEB 269,269.56 302,864.17
MAR 265,467.47 302,076.77
APR 275,735.75 314,753.94
MAY 292,470.15 326,535.43
JUN 289,808.68 328,494.09
JULY 300,076.60 338,946.85
AUG 293,231.85 329,862.20
SEP 287,906.76 327,362.20
OCT 273,453.84 315,009.84
NOV 273,453.84 313,435.04
DEC 283,809.54 324,340.55
1996 JAN 310,513.18 351,515.75
FEB 301,359.25 343,710.63
MAR 307,082.06 348,730.31
APR 323,867.17 362,795.28
MAY 326,917.99 359,606.30
JUN 325,773.78 363,877.95
JUL 305,243.52 339,970.47
AUG 317,453.26 350,511.81
SEP 317,834.20 355,679.13
OCT 312,110.01 348,041.34
NOV 322,028.86 353,188.98
DEC 330,443.48 354,753.94
1997 JAN 353,445.65 379,793.31
FEB 367,247.70 398,395.67
MAR 357,662.54 388,415.35
APR 358,045.24 381,820.87
MAY 376,828.29 394,803.15
JUN 406,729.61 411,850.39
JUL 418,118.04 415,826.77
AUG 372,217.04 362,736.22
SEP 382,244.57 374,537.40
OCT 320,917.25 313,090.55
NOV 317,444.93 298,513.78
DEC 330,945.86 302,460.63
1998 JAN 305,873.40 282,627.95
FEB 321,301.66 311,486.22
MAR 330,172.79 323,690.94
APR 330,172.79 324,576.77
MAY 287,745.59 284,074.80
JUN 262,288.74 254,950.79
JUL 274,962.53 265,127.95
AUG 196,952.91 190,580.71
SEP 196,952.91 199,625.98
OCT 215,104.09 222,736.22
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Galileo Emerging Markets Equities
Fund's registration became effective. The predecessor limited partnership
was not registered under the Investment Company Act of 1940, as amended
("1940 Act"), and, therefore was not subject to certain investment
restrictions that are imposed by the 1940 Act. If the limited partnership
had been registered under the 1940 Act, the limited partnership's
performance may have been lower.
6
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
TCW GALILEO EMERGING MARKETS INCOME FUND
- ----------------------------------------
For the fiscal year ended October 31, 1998, Fund declined 30.7% versus the J.P.
Morgan Emerging Markets Bond Index Plus ("EMBI+") which declined 10.1%. The
negative variance in excess returns can largely be attributed to an overweight
in U.S. dollar denominated Russian debt and the liquidation of Indonesian debt
positions in May of this year.
Our medium term outlook for emerging markets fixed income has been framed around
two competing scenarios. The first scenario views the dramatic and volatile
adjustment processes that are underway as a necessary condition for restoring
global economic balances and promoting more balanced economic growth. The main
elements to this scenario are: lower G-3 interest rates, rising aggregate
demand, exchange rate stability, banking reform (Japan, Asia), fully restored
funding for the IMF, and continuity of reform. In the second scenario,
collapsing aggregate demand in Japan and Asia forms the catalyst for a deeper,
more insidious deterioration of global economic conditions. Through the
transmission mechanisms of trade and credit, regional economic weakness in Japan
and Asia is exported to the rest of the world in the form of declining demand,
deflation, exchange rate instability, systemic pressures on the financial
system, and rising default rates.
At October 31, 1998, the Fund's industry weightings (as a percentage of net
assets) were: 1.5% in Cement, 1.7% in Conglomerates, 1% in Media & Publishing,
89.4% in Sovereign Debt Issues, 1.8% in Telecommunications and 2.7% in
Utilities.
Our baseline outlook has been clearly constructed and around the first scenario
outlined above. In October, four important elements to that baseline outlook
fell into place. First, monetary policies in the U.S., Europe, and Japan turned
increasingly stimulative. Second, a program to restructure the banking system
was finally adopted in Japan. Third, funding for the IMF was fully restored
after a contentious political debate in the U.S. Fourth, Brazil and the IMF
(will full support from the U.S.) reached an agreement on the emergency
financing package to support the exchange rate and relieve some of the financing
pressures associated with Brazil's heavy short-term domestic debt burden.
7
<PAGE>
MANAGEMENT DISCUSSIONS (CONTINUED)
- ----------------------------------
TCW GALILEO EMERGING MARKETS INCOME FUND (CONTINUED)
- ----------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
(30.7)% N/A N/A (7.5)%
-----------------------------------------------
TCW EMBI
--------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1996 SEPT 257,620.00 266,122.61
OCT 257,748.81 268,212.58
NOV 267,053.54 281,588.38
DEC 272,226.37 284,972.13
1997 JAN 281,114.56 292,854.30
FEB 289,677.31 297,949.84
MAR 280,033.95 287,201.43
APR 289,261.07 295,700.64
MAY 301,974.09 307,185.51
JUNE 310,954.80 314,251.59
JUL 320,445.14 327,289.01
AUG 321,127.69 325,963.38
SEP 329,974.76 335,923.57
OCT 295,169.02 297,227.31
NOV 303,776.15 311,345.61
DEC 300,592.58 322,116.12
1998 JAN 298,311.08 321,423.43
FEB 311,180.22 330,623.45
MAR 321,984.40 338,860.07
APR 324,286.59 339,676.17
MAY 304,861.82 328,081.60
JUNE 287,027.40 318,610.87
JULY 287,489.52 320,809.29
AUG 181,693.37 228,608.70
SEP 193,461.65 250,966.63
OCT 211,364.60 267,204.17
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Galileo Emerging Markets Income
Fund's registration became effective. The predecessor limited partnership
was not registered under the Investment Company Act of 1940, as amended
("1940 Act"), and, therefore was not subject to certain investment
restrictions that are imposed by the 1940 Act. If the limited partnership
had been registered under the 1940 Act, the limited partnership's
performance may have been lower.
8
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
TCW Galileo European Equities Fund
- ----------------------------------
The Fund returned 17% for the fiscal year ended October 31, 1998 versus 23.4%
for the MSCI Europe Index. The Fund was negatively affected by the Fund's cash
flows in the first two months of its inception.
Up to the end of July, the Fund benefited from being overweight in the growth
sectors of the European markets, particularly in telecommunications, technology
and automobiles. The earnings growth in these sectors was substantially ahead of
the IBES median growth for the European market. However, during the market
correction in August, September and October, the Fund suffered from being
underweight in defensive sectors such as health, utilities and food retailers.
At October 31, 1998, the Fund's industry weightings were: 3.1% in Aerospace,
4.9% in Automobile Manufacturing, 1.7% in Auto Parts, 1.2% in Beverages &
Tobacco, 4% in Business Services, 4.8% in Computers, 5.7% in Electronics, 3.4%
in Engineering & Machines, 7.2% in Energy, 19.8% in Financial Services, 3.1% in
Food & Healthcare, 0.5% in Furniture, 2% in Hotels, 8% in Pharmaceuticals, 5.1%
in Publishing & Media, 5.4% in Retail, 12.2% in Telecommunications and 2.3% in
Utilities.
It is our belief that as the effects of the Asian crises are absorbed in the
market, performance will again favor the growth sectors that the Fund is
invested in, as investors will resume rewarding achievable above average
earnings, rather than the safe haven of defensive issuers. The current weighted
forecast earnings growth of the stocks held in the Fund over a twelve month
rolling period is substantially ahead of the market average at 21.2% vis-a-vis
10.2%, while being valued at the same P/E multiple as the market at 19x.
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
17.0% N/A N/A 16.8%
-----------------------------------------------
TCW MSCI EUROPE
--------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1997 NOV 251,750.00 253,900.00
DEC 254,750.86 263,243.52
1998 JAN 263,751.21 274,273.42
FEB 288,000.49 295,776.46
MAR 307,999.25 316,924.48
APR 318,249.46 323,136.20
MAY 329,248.16 329,760.49
JUN 324,997.57 333,453.81
JUL 330,246.28 340,122.88
AUG 287,997.87 297,437.46
SEP 272,247.27 285,629.19
OCT 291,996.09 308,565.22
</TABLE>
(1) Performance Date includes the performance of the predecessor limited
partnership for periods before the TCW Galileo Japanese Equities Fund's
registration became effective. The predecessor limited partnership was not
registered under the Investment Company Act of 1940, as amended ("1940
Act"), and therefore was not subject to certain investment restrictions that
are imposed by the 1940 Act. If the limited partnership had been registered
under the 1940 Act, the limited partnership's performance may have been
lower.
9
<PAGE>
MANAGEMENT DISCUSSIONS (Continued)
- ----------------------------------
TCW GALILEO INTERNATIONAL EQUITIES FUND
- ---------------------------------------
The Fund returned 7.5% versus the MSCI EAFE Index return of 10% for the fiscal
year ended October 31, 1998. The Fund was adversely affected by cash flows in
the first two months following its inception and also negatively impacted by
having an exposure to Latin America during the period, although, the weighting
was reduced dramatically as the crisis for these countries developed. The Latin
American markets declined by over 30% during the year compared to the MSCI EAFE
benchmark rise of 10%.
The Fund was heavily weighted in Europe where the equity markets were the
strongest in the non-U.S. universe, with the MSCI Europe Index rising by over
23%. In the European portion of the Fund, performance benefited, until the end
of July, from being overweight in the growth sectors of telecommunications,
technology and automobiles, where consumer demand was strong. However, during
the equity market correction beginning in August, performance suffered due to an
underweighting in defensive sectors such as health, utilities and food
retailers.
The Fund's exposure to the Asia Pacific region was reduced sharply during the
period as we anticipated the economic and financial problems of this region.
Throughout this period, the Fund underweighted the Japanese equity market due to
our analysis of the weakness of the Japanese economy and the problems facing the
Japanese banking system.
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
7.5% 6.7% N/A 6.2%
-----------------------------------------------
TCW MSCI EAFE
------------------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1993 DEC 267,967.50 268,108.50
1994 JAN 291,275.31 290,833.64
FEB 285,979.93 290,087.95
MAR 280,360.42 277,655.36
APR 288,384.34 289,497.91
MAY 286,348.34 287,897.57
JUNE 281,509.06 292,030.63
JUL 289,520.80 294,904.21
AUG 301,828.33 301,950.94
SEP 292,233.21 292,506.82
OCT 297,373.59 302,315.46
NOV 281,526.56 287,852.68
DEC 277,886.42 289,723.15
1995 JAN 269,313.62 278,660.94
FEB 267,350.32 277,933.64
MAR 273,916.45 295,346.18
APR 284,177.36 306,533.30
MAY 280,593.88 302,957.90
JUNE 275,851.85 297,725.51
JUL 292,819.49 316,342.29
AUG 287,621.95 304,351.65
SEP 287,688.10 310,374.77
OCT 276,502.79 302,111.04
NOV 282,289.99 310,596.13
DEC 291,464.41 323,190.80
1996 JAN 298,672.33 324,593.45
FEB 302,283.28 325,771.73
MAR 307,143.99 332,772.56
APR 321,435.40 342,529.45
MAY 321,721.48 336,309.12
JUN 317,835.08 338,283.25
JUL 304,994.55 328,479.80
AUG 304,887.80 329,284.58
SEP 311,290.44 338,115.99
OCT 306,182.17 334,741.59
NOV 312,563.00 348,144.65
DEC 306,464.90 343,751.06
1997 JAN 297,568.22 331,798.84
FEB 300,790.89 337,306.70
MAR 299,843.40 338,612.08
APR 299,483.58 340,491.37
MAY 321,441.72 362,732.27
JUN 337,057.36 382,816.75
JUL 340,444.78 389,087.29
AUG 317,570.30 360,108.07
SEP 332,635.83 380,362.35
OCT 312,142.14 351,226.59
NOV 305,275.01 347,714.33
DEC 304,026.44 350,843.76
1998 JAN 315,576.40 366,982.57
FEB 340,547.96 390,616.25
MAR 355,841.97 402,725.35
APR 364,581.45 405,987.43
MAY 368,639.24 404,119.88
JUN 363,644.18 407,272.02
JUL 368,637.02 411,507.65
AUG 322,752.77 360,604.15
SEP 309,642.55 349,641.79
OCT 335,550.34 386,179.35
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Galileo International Equities Fund's
registration became effective. The predecessor limited partnership was not
registered under the Investment Company Act of 1940, as amended ("1940
Act"), and, therefore was not subject to certain investment restrictions
that are imposed by the 1940 Act. If the limited partnership had been
registered under the 1940 Act, the limited partnership's performance may
have been lower.
10
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
TCW GALILEO JAPANESE EQUITIES FUND
- ----------------------------------
The fiscal year ended October 31, 1998, proved to be another difficult period
for the Japanese equity market. The Fund declined 14.9% in U.S. Dollar terms
during the period, which was slightly better than the return of the Tokyo Stock
Exchange Section I return of 14.7%. The Yen appreciated marginally during the
period.
The market weakness reflected the very difficult economic environment and poor
performance of corporate earnings. The spring fiscal stimulus measure adopted
by the authorities failed to revive the economy, and as we approach 1999 the
Japanese economy has yet to show signs that it is emerging from its deepest
recession since the war. Consumption has been constrained by weak earnings
growth and sharply rising unemployment, while capital expenditure is suffering
from over capacity in many industries and restrictive bank lending.
Consequently, corporate sector earnings have been hit hard. Pre-tax non-
financial sector profits are expected to fall around 30% in fiscal 1999.
Pricing pressure has been severe in many areas of the economy and profit margins
have been squeezed.
The Fund benefited from the defensive nature of its exposure to convertible
bonds and underweight position in the banking sector. This was offset by its
overweight position in small-cap stocks, which performed poorly during the
period. The Fund remains overweight in small cap stocks, which we believe offer
exceptional value, and continues to have a low exposure to the financial sector
which we believe is still some way from liquidating its bad debt positions.
The outlook for the next twelve months is mixed. We expect the economy to
bottom during the following period, but a strong rebound is unlikely. At the
same time an increased level of corporate restructuring should help to halt the
decline in corporate profits, but if the Yen stays strong profits are likely to
remain under pressure. Nevertheless, the Japanese market is trading at
historical lows on many valuation measures and any sign of a stronger than
expected recovery could lead to a sharp rally in the market. In such a long
bear market it is often easy to lose sight of the fact that Japan still has many
world class companies that can compete successfully in global markets.
At October 31, 1998, the Fund's industry weightings (as a percentage of net
assets) were: 13.6% in Banks & Financial Services, 4% in Business Services, 9.4%
in Chemicals, 6.2% in Communications, 3.4% in Construction, 24% in Electrical
Machinery, 1.4% in Iron & Steel, 8.3% in Machinery, 0.1% in Metal Products, 4.1%
in Miscellaneous Industries, 2.4% in Nonferrous Metals, 4.5% in Other Products,
0.4% in Pharmaceuticals, 5% in Precision Instruments, 3.1% in Retail, 5.5% in
Transport Equipment and 0.6% in Wholesale.
11
<PAGE>
MANAGEMENT DISCUSSIONS (CONTINUED)
- ----------------------------------
TCW GALILEO JAPANESE EQUITIES FUND (CONTINUED)
- ----------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
(14.9)% (14.7)% N/A (16.6)%
-----------------------------------------------
TOKYO STOCK EXCHANGE
TCW SECTION 1
------------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1995 MAY 227,015.00 233,725.00
JUNE 220,881.05 222,576.32
JUL 233,729.71 239,759.21
AUG 231,013.77 230,456.55
SEP 223,686.01 230,456.55
OCT 212,881.98 218,380.63
NOV 229,344.14 231,396.11
DEC 244,024.46 242,549.41
1996 JAN 247,438.36 239,299.24
FEB 243,526.36 235,590.11
MAR 250,863.81 243,482.37
APR 277,490.49 259,747.00
MAY 267,345.44 247,201.22
JUN 267,992.42 248,585.54
JUL 256,163.23 236,504.29
AUG 242,730.03 226,287.30
SEP 247,880.76 232,804.38
OCT 232,070.93 217,462.57
NOV 226,733.30 219,311.00
DEC 207,091.39 202,577.57
1997 JAN 188,053.48 180,739.71
FEB 188,978.70 183,993.02
MAR 180,187.41 177,498.07
APR 178,167.51 181,687.02
MAY 204,787.52 204,452.41
JUN 213,130.56 217,925.82
JUL 193,288.11 209,099.83
AUG 175,816.80 190,510.85
SEP 158,555.10 184,928.88
OCT 155,439.50 170,522.92
NOV 131,812.69 157,972.44
DEC 113,316.73 145,429.42
1998 JAN 136,859.42 161,266.69
FEB 140,625.79 163,266.40
MAR 131,994.18 152,180.61
APR 134,661.78 149,684.85
MAY 130,895.29 142,874.19
JUN 130,266.99 144,545.81
JUL 131,679.09 141,597.08
AUG 117,710.57 128,032.08
SEP 116,298.04 124,575.21
OCT 132,306.47 145,441.56
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Japanese Equities Fund's registration
became effective. The predecessor limited partnership was not registered
under the Investment Company Act of 1940, as amended ("1940 Act"), and,
therefore was not subject to certain investment restrictions that are
imposed by the 1940 Act. If the limited partnership had been registered
under the 1940 Act, the limited partnership's performance may have been
lower.
12
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
TCW GALILEO LATIN AMERICA EQUITIES FUND
- ---------------------------------------
The total return earned by the Fund during the fiscal year ended October 31,
1998, was a negative 30%. This was in line with the negative 30.3% return of
the International Finance Corporation Latin America Investable Index ("IFC
Investable Latin America") for the same period.
Against a difficult backdrop of slowing global growth, Latin American equity
markets declined sharply during the Fund's fiscal year. Sentiment was hurt by
the recessionary fallout of the Asian currency crisis, and declining commodity
prices through much of the year. Investor confidence was also shaken by
Russia's devaluation of the ruble and partial default on domestic debt. The
financial crisis in Russia increased concerns about Brazil's large fiscal
deficit and the sustainability of its current exchange rate regime. However,
the markets rebounded in October as the U.S. began to ease monetary policy and
sparked a downward trend in global interest rates. The rallies were also fueled
by positive developments in Brazil. Following President Cardoso's re-election
on October 4, 1998, the government announced a long-awaited fiscal austerity
program, which paved the way for a $41.5 billion IMF-led loan package.
The Fund maintained its overweight position in Mexico due to superior earnings
growth, driven, in part, by strong consumer demand. The Fund has also generally
been overweight in Brazil, with the exception of August and September 1998. The
Brazilian market offers attractive investment opportunities in recently
privatized companies. We maintained a significantly underweight position in
Chile as high real interest rates continued to constrain economic growth and
valuations have been high relative to other markets. We shifted to an
underweight position in Colombia, and maintained our underweight allocation in
Peru. Earlier in the fiscal year, the Fund reduced its Venezuelan exposure due
to concerns about the impact of continued weak oil prices. Subsequently, the
Fund reduced its Venezuelan weighting to zero due to increased uncertainty in
the run-up to the presidential election in December.
At October 31, 1998, the Fund's industry weightings (as a percentage of net
assets) were: 4.8% in Banking, 13% in Beverages, 4.1% in Cement, 4.1% in
Congolmerates, 4.4% in Consumer Durables, 6.5% in Electronics, 2.5% in Financial
Services, 2.5% in Foods, 0.8% in Healthcare, 4.2% in Media & Publishing, 3.8% in
Mining, 6% in Petroleum, 6.9% in Retail and 29.8% in Telecommunications.
We remain cautiously optimistic on the prospect for Latin American equities
given the improved outlook for worldwide liquidity in the wake of global
interest rate cuts. As a result of the poor market performance in the past
twelve months, valuations for Latin American equities have become compelling.
For the five-year period 1992-1997, earnings growth has exceeded market
performance by 43%, according to data provided by the IFC. Furthermore, in the
last nine calendar years, market performance has exceeded earnings growth in
only three years.
13
<PAGE>
MANAGEMENT DISCUSSIONS (CONTINUED)
- ----------------------------------
TCW GALILEO LATIN AMERICA EQUITIES FUND (CONTINUED)
- ---------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------
AVERAGE ANNUALIZED TOTAL RETURN(1)
1-YEAR 3-YEARS 5-YEARS SINCE INCEPTION
(30.0)% 4.0% (3.6)% 5.9%
-----------------------------------------------
IFC INVESTABLE
TCW LATIN AMERICA
----------------------------------
<S> <C> <C>
INITIAL VALUE 250,000.00 250,000.00
1991 JULY 257,000.00 273,535.47
AUG 274,990.00 299,097.53
SEP 265,365.35 294,672.26
OCT 286,461.90 331,301.46
NOV 289,326.51 318,476.88
DEC 294,534.39 364,114.95
1992 JAN 336,358.28 424,540.85
FEB 391,521.03 448,210.89
MAR 411,488.60 449,366.69
APR 395,440.55 454,583.60
MAY 404,140.24 456,586.45
JUN 340,286.08 368,160.23
JULY 348,861.29 370,645.98
AUG 328,976.20 350,395.82
SEP 312,856.37 335,433.82
OCT 345,706.28 350,308.74
NOV 355,386.06 347,830.91
DEC 376,709.22 376,678.28
1993 JAN 371,209.27 365,650.73
FEB 352,648.80 362,127.93
MAR 383,681.90 392,962.32
APR 369,577.75 378,443.64
MAY 364,640.19 383,510.13
JUN 382,624.25 404,686.51
JULY 396,023.75 416,276.12
AUG 428,466.02 452,739.08
SEP 425,646.71 460,117.16
OCT 458,089.50 491,220.71
NOV 486,655.96 528,736.54
DEC 578,346.81 605,509.82
1994 JAN 643,034.90 686,827.11
FEB 596,723.53 655,588.98
MAR 532,420.60 611,629.20
APR 497,206.30 566,759.02
MAY 511,366.74 596,398.04
JUN 465,435.78 550,633.31
JULY 501,795.62 603,316.97
AUG 572,990.38 702,889.49
SEP 601,313.30 734,111.78
OCT 573,755.11 691,228.63
NOV 569,543.75 679,164.03
DEC 450,007.91 548,139.65
1995 JAN 391,830.88 461,550.03
FEB 338,788.74 394,632.68
MAR 319,111.89 382,845.16
APR 355,471.50 443,001.90
MAY 353,761.68 444,173.53
JUN 357,182.55 453,459.47
JULY 372,580.69 477,754.91
AUG 378,143.32 484,499.68
SEP 373,439.22 478,316.97
OCT 338,791.53 432,726.41
NOV 355,473.62 447,712.16
DEC 361,282.06 456,356.87
1996 JAN 403,432.84 499,255.86
FEB 380,638.89 472,886.32
MAR 388,811.20 480,470.23
APR 406,875.37 505,755.22
MAY 425,367.86 518,991.45
JUN 435,691.53 528,237.81
JUL 417,196.43 504,939.84
AUG 432,248.88 518,635.21
SEP 439,990.45 528,681.13
OCT 430,526.26 518,809.37
NOV 434,396.69 521,152.63
DEC 449,448.54 534,895.50
1997 JAN 493,265.27 584,190.94
FEB 524,498.83 622,387.59
MAR 520,161.22 615,745.73
APR 543,589.29 640,848.64
MAY 584,369.35 692,621.91
JUN 633,824.53 748,274.22
JUL 671,651.18 789,779.92
AUG 606,051.01 721,128.88
SEP 665,134.92 782,006.02
OCT 543,488.40 636,312.54
NOV 573,467.22 655,913.55
DEC 600,402.97 691,481.95
1998 JAN 533,061.78 611,431.29
FEB 558,259.61 641,774.86
MAR 593,016.85 683,755.54
APR 587,804.23 677,881.57
MAY 512,212.61 593,342.31
JUN 487,882.51 560,394.24
JUL 508,178.42 582,583.91
AUG 324,273.73 385,877.14
SEP 349,148.77 412,017.10
OCT 380,687.38 443,492.72
</TABLE>
(1) Performance data includes the performance of the predecessor limited
partnership for periods before the TCW Galileo Latin America Equities Fund's
registration became effective. The predecessor limited partnership was not
registered under the Investment Company Act of 1940, as amended ("1940
Act"), and therefore was not subject to certain investment restrictions that
are imposed by the 1940 Act. If the limited partnership had been registered
under the 1940 Act, the limited partnership's performance may have been
lower.
14
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO ASIA PACIFIC EQUITIES FUND
October 31, 1998
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares
or Warrants EQUITY SECURITIES Value
- -------------- ----------------- -----------
<S> <C> <C>
445,000 HONG KONG (41.0% OF NET ASSETS)
244,000 Beijing Datang Power Generation Company, Limited $ 137,878
73,000 Cafe De Coral Holdings, Limited 83,475
88,000 Cheung Kong Holdings, Limited 499,484
91,000 China Telecom (Hong Kong), Limited 165,298 **
74,500 CLP Holdings, Limited 511,038 **
11,600 Dao Heng Bank Group, Limited 155,329
110,000 HSBC Holdings Public Company, Limited 265,815
77,000 Huaneng Power International, Inc. 38,342 **
107,000 Hutchison Whampoa, Limited 551,704
21,000 Hysan Development Company, Limited 130,538
477,000 Johnson Electric Holdings, Limited 48,799
132,000 Legend Holdings, Limited 160,108
67,000 New World Infrastructure, Limited 188,304 **
370,000 Sun Hung Kai Properties, Limited 467,080
Yanzhou Coal Mining Company, Limited 72,605 **
-----------
TOTAL HONG KONG (Cost: $3,110,322) 3,475,797
-----------
INDIA (2.2%)
18,500 Reliance Industries, Limited (GDR) 93,795 **
8,800 Videsh Sanchar Nigam, Limited (GDR) 92,400 **
-----------
TOTAL INDIA (Cost: $ 225,045) 186,195
-----------
PHILIPPINES (3.6%)
43,200 Ayala Land, Inc. 13,138
247,000 Jollibee Foods Corporation,Warrants, expire 03/25/03 110,377 **
33,900 Manila Electric Company 100,152
3,470 Philippine Long Distance Telephone Company 83,132
-----------
TOTAL PHILIPPINES (Cost: $ 295,246) 306,799
-----------
SINGAPORE (11.7%)
25,000 City Developments, Limited 90,769
22,000 Elec & Eltek International Company, Limited 110,000 **
40,000 Natsteel Electronics, Limited 82,215 **
20,000 Oversea-Chinese Banking Corporation, Limited 87,385
25,520 Singapore Press Holdings, Limited 221,435
259,397 Singapore Technologies Engineering, Limited 255,406 **
84,000 Singapore Telecommunications, Limited 145,256
-----------
TOTAL SINGAPORE (Cost: $ 985,107) 992,466
-----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
15
<PAGE>
TCW GALILEO ASIA PACIFIC EQUITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
- -------------- ----------------- ----------
<S> <C> <C>
SOUTH KOREA (7.4%)
5,000 Korea Electric Power Corporation $ 89,083 **
22,000 L.G. Chemical, Limited 170,963 **
2,310 Pohang Iron & Steel Company, Limited 127,987 **
5,665 Samsung Display Devices Company 212,598 **
671 Samsung Electronics Company, Limited 27,471 **
----------
TOTAL SOUTH KOREA (Cost: $509,207) 628,102
----------
TAIWAN (20.6%)
84,280 Asustek Computer, Inc. (GDR) 644,742 **
10,000 Fubon Insurance Company (144A) (GDR) 126,250 * **
32,000 Siliconware Precision Industries Company (GDR) 339,200 **
42,584 Taiwan Semiconductor Manufacturing Company, Limited (ADR) 636,099 **
----------
TOTAL TAIWAN (Cost: $1,796,550) 1,746,291
----------
THAILAND (1.3%)
220,000 National Finance &Securities Public Company, Limited
(Foreign Registered) 59,281 **
43,000 Thai Farmers' Bank Public Company, Limited (Foreign Registered) 54,423 **
----------
TOTAL THAILAND (Cost: $100,722) 113,704
----------
TOTAL EQUITY SECURITIES (COST: $7,022,199) (87.8%) 7,449,354
----------
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENT (COST: $1,112,055) (13.1%)
- -------------- -------------------------------------------------
<S> <C> <C>
$1,112,055 Bank of New York Depository Reserve, 4%, due 11/02/98 1,112,055
----------
TOTAL INVESTMENTS (COST: $8,134,254) (100.9%) 8,561,409
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.9%) (78,932)
----------
NET ASSETS (100%) $8,482,477
==========
</TABLE>
* Restricted Security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
16
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EMERGING MARKETS EQUITIES FUND
October 31, 1998
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ------------- ----------------- ------------
<S> <C> <C>
COMMON STOCK
------------
ARGENTINA (4.6% of Net Assets)
8,260 Banco de Galicia y Buenos Aires, S.A. (ADR) $ 140,936
4,380 Banco Frances, S.A. (ADR) 91,433
9,300 Perez Companc, S.A., Series B 45,942
9,100 Telecom Argentina, STET-France Telecom, S.A., Series B (ADR) 293,475
4,150 Telefonica de Argentina, Sociedad Anonima, Series B (ADR) 137,209
5,226 Yacimientos Petroliferos Fiscales Sociedad del Estado, Series D (ADR) 151,227
------------
TOTAL ARGENTINA (Cost: $ 863,466) 860,222
------------
BRAZIL (2.9%)
11,145 Companhia Energetica de Minas Gerais (CEMIG) (ADR) 214,541
5,840,000 Embratel Participacoes, S.A. 45,036 **
5,840,000 Tele Celular Sul Participacoes, S.A. 3,720 **
5,840,000 Tele Centro Sul Participacoes, S.A. 26,924 **
5,840,000 Tele Norte Leste Participacoes, S.A. 32,798
5,840,000 Tele Sudeste Celular Participacoes, S.A. 11,259
5,840,000 Telemig Celular Participacoes, S.A. 3,574
5,840,000 Telesp Celular Participacoes, S.A. 19,042
5,840,000 Telesp Participacoes, S.A. 104,758 **
5,000 Uniao de Bancos Brasileros, S.A. (UNIBANCO) (ADR) 86,875
------------
TOTAL BRAZIL (Cost: $ 832,401) 548,527
------------
CHILE (2.2%)
5,147 Compania de Telecomunicaciones de Chile, S.A., Series A (ADR) 112,912
5,260 Embotelladora Andina, S.A., Series A (ADR) 70,024
7,890 Laboratorio Chile, S.A. (ADR) 114,405 **
4,570 Vina Concha y Toro, S.A. (ADR) 117,392
------------
TOTAL CHILE (Cost: $ 483,181) 414,733
------------
COLOMBIA (0.5%)
4,950 BanColombia, S.A. (ADR) 24,441
22,950 Bavaria CB 76,248
------------
TOTAL COLOMBIA (Cost: $ 226,054) 100,689
------------
EGYPT (COST: $191,425) (0.7%)
9,500 Suez Cement Company (144A) (GDR) 139,650 * **
------------
</TABLE>
* Restricted Security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
17
<PAGE>
TCW GALILEO EMERGING MARKETS EQUITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
- ------------- ----------------- -----------
<S> <C> <C>
GREECE (7.3%)
4,920 Alpha Credit Bank $ 393,303
15,496 Hellenic Telecommunication Organization, S.A. 352,432
3,526 National Bank of Greece, S.A. 501,208
1,870 Titan Cement Company, S.A. 115,629 **
-----------
TOTAL GREECE (Cost: $1,195,578) 1,362,572
-----------
HONG KONG (2.7%)
573,000 Beijing Datang Power Generation Company, Limited 177,537
284,000 Huaneng Power International, Inc. 98,993
309,000 Legend Holdings, Limited 103,718 **
620,000 Yanzhou Coal Mining Company, Limited 121,663 **
-----------
TOTAL HONG KONG (Cost: $569,471) 501,911
-----------
HUNGARY (4.3%)
15,283 Mol Magyar Olaj-es Gazipari Rt. (144A) (GDR) 347,688 * **
7,100 OTP Bank Rt. 252,879 **
6,500 Pannonplast Rt. 201,574 **
-----------
TOTAL HUNGARY (Cost: $786,956) 802,141
-----------
INDIA (2.7%)
14,600 Mahanagar Telephone Nigam, Limited (144A) (GDR) 160,235 * **
59,500 Reliance Industries, Limited (GDR) 301,665 **
4,000 Videsh Sanchar Nigam, Limited (GDR) 42,000 **
-----------
TOTAL INDIA (Cost: $579,879) 503,900
-----------
ISRAEL (3.1%)
174,000 Bank Hapoalim, Limited 316,661 **
9,715 Blue Square Chain Investments & Properties, Limited 124,493 **
7,710 NICE-Systems, Limited (ADR) 146,490 **
-----------
TOTAL ISRAEL (Cost: $944,022) 587,644
-----------
</TABLE>
* Restricted Security. (See Note 6)
** Non-income producing.
See accompanying Notes to Financial Statements.
18
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares EQUITY SECURITIES Value
- ------------- ----------------- -----------
<S> <C> <C>
LATIN AMERICAN REGIONAL (COST: $133,598) (0.7%)
6,770 Panamerican Beverages, Inc. (ADR) $ 137,093
------------
MEXICO (12.1%)
32,500 Apasco, S.A.de C.V. 119,059
35,320 Cemex, S.A. de C.V., Series B 98,267 **
221,500 Cifra, S.A. de C.V., Series C 287,292 **
3,200 Coca Cola Femsa, S.A. (ADR) 52,800
5,900 Fomento Economico Mexicano, S.A. de C.V., Series B (ADR) 153,769 **
96,600 Grupo Industrial Bimbo, S.A. de C.V., Series A 162,594
96,300 Grupo Modelo, S.A. de C.V., Series C 203,088 **
8,160 Grupo Televisa, S.A. de C.V. (ADR) 221,340 **
77,500 Kimberly-Clark de Mexico, S.A. de C.V., Series A 227,129
31,600 Organizacion Soriana, S.A. de C.V., Series B 93,861 **
12,285 Telefonos de Mexico, S.A. de C.V. (ADR) 648,801
-----------
TOTAL MEXICO (Cost: $2,389,675) 2,268,000
-----------
PERU (0.8%)
51,463 Cementos Lima, S.A., Class T 59,845
9,894 Compania de Minas Buenaventura, S. A., Series B 59,396
94,783 Union de Cerveceria Peruanas Backus y Johnston, S.A., Class T 33,652
-----------
TOTAL PERU (Cost: $215,338) 152,893
-----------
PHILIPPINES (1.7%)
270,000 Jollibee Foods Corporation, Warrants, expire 03/25/03 120,656 **
35,900 Manila Electric Company 106,060
4,070 Philippine Long Distance Telephone Company 97,506
-----------
TOTAL PHILIPPINES (Cost: $296,788) 324,222
-----------
POLAND (4.7%)
2,500 Bank Przemyslowo-Handlowy, S.A. 161,594 **
28,000 Electricm Spolka Akcyjna, S.A. 332,754 **
1,580 International Trading & Investments Holdings, S.A. (GDR) 394,210 **
-----------
TOTAL POLAND (Cost: $818,147) 888,558
-----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
19
<PAGE>
TCW GALILEO EMERGING MARKETS EQUITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- ------------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
- ------------- ----------------- ------------
<S> <C> <C>
PORTUGAL (2.6%)
2,000 Banco Comercial Portugues, S.A. $ 62,345 **
4,902 Banco Espirito Santo e Comercial de Lisboa, S.A. 144,219 **
7,480 Banco Pinto & Sotto Mayor, S.A. 142,735 **
5,400 EDP-Electricidade de Portugal, S.A. 135,166 **
------------
TOTAL PORTUGAL (Cost: $597,651) 484,465
------------
SOUTH AFRICA (10.7%)
40,200 Allied Technologies, Limited 104,089 **
9,600 Anglo American Corporation of South Africa 313,029 **
7,751 Anglo American Platinum Corporation, Limited 117,649 **
5,072 Anglogold, Limited 258,129 **
17,920 Liberty Life Association of Africa, Limited 307,200
18,092 Nedcor, Limited 361,840
135,640 New Africa Investments, Limited, Series N 88,408 **
108,200 New Clicks Holdings, Limited 111,098 **
17,974 South African Breweries, Limited 349,209 **
------------
TOTAL SOUTH AFRICA (Cost: $2,430,466) 2,010,651
------------
SOUTHEAST ASIAN REGIONAL (COST: $275,000) (0.2%)
27,500 Central Asia Investment Company, Limited 35,750 **
------------
SOUTH KOREA (7.9%)
23,000 Korea Electric Power Corporation 409,780 **
23,100 L.G. Chemical, Limited 179,511 **
6,800 Pohang Iron & Steel Company, Limited 376,758 **
12,650 Samsung Display Devices Company 474,735 **
1,204 Samsung Electronics Company, Limited 49,292 **
------------
TOTAL SOUTH KOREA (Cost: $1,344,187) 1,490,076
------------
TAIWAN (10.0%)
87,366 Asustek Computer, Inc. (GDR) 668,350 **
6,800 Fubon Insurance Company (144A) (GDR) 85,850 * **
24,000 Siliconware Precision Industries Company (GDR) 254,400 **
25,000 Taiwan Index Fund, Limited (GDR) 263,750 **
39,900 Taiwan Semiconductor Manufacturing Company, Limited (ADR) 596,006 **
------------
TOTAL TAIWAN (Cost: $1,995,819) 1,868,356
------------
THAILAND (0.7%)
245,000 National Finance & Securities Public Company, Limited (Foreign Registered) 66,018 **
46,000 Thai Farmers' Bank Public Company, Limited (Foreign Registered) 58,220 **
------------
TOTAL THAILAND (Cost: $109,980) 124,238
------------
</TABLE>
* Restricted Security. (See Note 6)
** Non-income producing.
See accompanying Note to Financial Statements.
20
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
- ------------- ----------------- ------------
<S> <C> <C>
TURKEY (2.6%)
8,225,000 Akbank, T.A.S. $ 122,139 **
2,500,000 Aksigorta, A.S. 54,158 **
10,870,000 Dogan Yayin Holdings 68,365 **
141,000 Migros Turk, T.A.S. 120,702 **
5,166,000 Netas Northern Electric Telekomunikasyon, A.S. (Receipts) 115,522 **
30,000 Netas Northern Electric Telekomunikasyon, A.S. 671 **
------------
TOTAL TURKEY (Cost: $560,887) 481,557
------------
TOTAL COMMON STOCK (COST: $17,839,969) (85.7%) 16,087,848
------------
PREFERRED STOCK
---------------
BRAZIL (5.8%)
167,000 Banco Itau, S.A. 81,192
10,400,000 Companhia Paranaense de Energia (COPEL), Series B 81,073
10,408 Companhia Vale do Rio Doce 157,036
6,430,000 Embratel Participacoes, S.A. 90,548 **
108,400 Itausa - Investimentos Itau, S.A. 57,244
1,079,000 Petroleo Brasileiro, S.A. (PETROBRAS) 135,666
3,990,000 Tele Celular Sul Participacoes, S.A. 4,181
3,990,000 Tele Centro Oeste Participacoes, S.A. 3,010
12,210,000 Tele Centro Sul Participacoes, S.A. 117,699
3,990,000 Tele Leste Celular Participacoes, S.A. 1,940
990,000 Tele Nordeste Celular Participacoes, S.A. 631
3,990,000 Tele Norte Celular Participacoes, S.A. 1,137
3,990,000 Telemig Celular Participacoes, S.A. 4,114 **
8,220,000 Telesp Celular Participacoes, S.A. 61,323 **
11,010,000 Telesp Participacoes, S.A. 281,479 **
------------
TOTAL BRAZIL (Cost: $1,274,846) 1,078,273
------------
TOTAL EQUITY SECURITIES (COST: $19,114,815) (91.5%) 17,166,121
------------
Principal
Amount SHORT-TERM INVESTMENT (COST: $1,216,663) (6.5%)
- ------------- ------------------------------------------------
$1,216,663 Bank of New York Depository Reserve, 4%, due 11/02/98 1,216,663
------------
TOTAL INVESTMENTS (COST: $20,331,478) (98.0%) 18,382,784
EXCESS OF OTHER ASSETS OVER LIABILITIES (2.0%) 379,809
------------
NET ASSETS (100%) $18,762,593
============
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
21
<PAGE>
TCW GALILEO EMERGING MARKETS INCOME FUND
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------- ----------------------- ------------
<S> <C> <C>
ALGERIA (COST: $1,019,152) (2.2% OF NET ASSETS)
$ 1,558,963 The People's Democratic Republic of Algeria, U.B.A.F.
as Agent, Rescheduling Deed dated June 27, 1996, Tranche 3,
Variable Rate based on Six Month LIBOR + 0.8125%, due 2010 $ 670,354
------------
ARGENTINA (4.9%)
815,000 Republic of Argentina Discount Bonds, Series L-GL, Six Month
LIBOR + 0.8125%, due 03/31/23 562,350
930,000 Republic of Argentina, Series BGL5, 11.375%, due 01/30/17 905,820
------------
TOTAL ARGENTINA (Cost: $ 1,514,875) 1,468,170
------------
BRAZIL (19.6%)
535,000 CSN Iron, S.A., (Reg. S), 9.125%, due 06/01/07 304,950 *
575,000 Globopar Communications, (Reg. S), 10.625%, due 310,500 *
12/05/08
5,575,000 Republic of Brazil Debt Conversion Bonds, Six Month
LIBOR + 0.875%,
due 04/15/12 2,933,844
3,425,000 Republic of Brazil, 9.375%, due 04/07/08 2,354,687
------------
TOTAL BRAZIL (Cost: $ 6,507,348) 5,903,981
------------
BULGARIA (7.9%)
645,000 Republic of Bulgaria Discount Bonds, Series A,
Variable Rate based
on Six Month LIBOR + 0.8125%, due 07/28/24 456,338
3,470,000 Republic of Bulgaria Front Loaded Interest Reduction
Bonds,
Series A, 2.5%, due 07/28/12 1,908,500
------------
TOTAL BULGARIA (Cost: 2,401,755) 2,364,838
------------
CHINA (COST: $342,675) (0.7%)
390,000 AES China Generating Company, 10.125%, due 12/15/06 210,600
------------
COLOMBIA (COST: $2,662,272) (9.1%)
3,490,000 Republic of Colombia, 8.625%, due 04/01/08 2,722,200
------------
DOMINICAN REPUBLIC (COST: $285,381) (0.7%)
305,000 Tricom S.A., 11.375%, due 09/01/04 222,650
------------
ECUADOR (3.0%)
1,250,000 Republic of Ecuador Discount Bonds, Variable Rate based on
Six Month LIBOR + 0.8125%, due 02/28/25 640,625
410,000 Republic of Ecuador, (Reg. S), Variable Rate based on Six Month
LIBOR + 4.75%, due 04/25/04 270,600 *
------------
TOTAL ECUADOR (Cost: $1,000,912) 911,225
------------
</TABLE>
* Restricted Security. (See Note 6)
See accompanying Notes to Financial Statements.
22
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- -------------- ----------------------- -------------
<S> <C> <C>
MEXICO (15.5%)
MXP 2,284,650 B 990408, due 04/08/99 (Cetes) $ 195,190
$ 560,000 Cemex International Capital, LLC, (Reg. S), 9.66%, due 11/29/99,
Par Put 05/15/05 464,800 *
4,045,000 United Mexican States Global Bonds, 11.375%, due 09/15/16 3,994,437
-------------
TOTAL MEXICO (Cost: $4,719,371) 4,654,427
-------------
PANAMA (COST: $2,102,790) (7.2%)
2,380,000 Republic of Panama, 8.875%, due 09/30/27 2,177,700
-------------
PERU (COST: $423,082) (1.5%)
905,000 Republic of Peru Front Loaded Interest Reduction Bonds,
3.25%, due 03/07/17 459,287
-------------
PHILIPPINES (3.7%)
820,000 Ce Casecnan Water and Energy, Series A, 11.45%, due 11/15/05 598,600
100,000 JG Summit (Cayman), Limited, 3.5%, due 12/23/03 47,000
735,000 JG Summit Philippines, (Reg. S), 8.375%, due 03/17/04 455,700 *
-------------
TOTAL PHILIPPINES (Cost: $1,299,568) 1,101,300
-------------
RUSSIA (5.1%)
RUB 9,467,000 Russia OFZ-Federal Loan Bond, Series 5023, 14%, due 09/12/01 28,344
$ 785,000 Russian Federation, (144A), 11%, due 07/24/18 155,038 *
820,000 Russian Federation, (144A), 12.75%, due
06/24/28, Par Put 06/24/08 192,700 *
4,970,000 Russian Federation, (Reg. S), 12.75%, due
06/24/28, Par Put 06/24/08 1,167,950 *
-------------
TOTAL RUSSIA (Cost: $3,458,731) 1,544,032
-------------
SOUTH KOREA (COST: $2,449,080) (8.0%)
2,630,000 Republic of Korea, 8.875%, due 04/15/08 2,419,600
-------------
TURKEY (3.7%)
335,000 Cellco Finance N.V., (144A), 15%, due 08/01/05 268,000 *
75,000 Cellco Finance N.V., (Reg. S), 15%, due 08/01/05 60,000 *
935,000 Republic of Turkey, (Reg. S), 9.875%, due 02/23/05 776,050 *
-------------
TOTAL TURKEY (Cost: $1,219,307) 1,104,050
-------------
</TABLE>
MXP-Mexican Peso.
RUB - Russian Ruble.
* Restricted Security. (See Note 6)
See accompanying Notes to Financial Statements.
23
<PAGE>
TCW GALILEO EMERGING MARKETS INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount FIXED INCOME SECURITIES Value
- ------------- ----------------------- -----------
<S> <C> <C>
VENEZUELA (COST: $1,244,540) (4.0%)
$1,665,000 Republic of Venezuela, 13.625%, due 08/15/18 $ 1,211,288
-----------
VIETNAM (COST: $767,855) (1.3%)
1,660,000 Socialist Republic of Vietnam, Past Due Interest Bonds, 3%,
due 03/14/16 381,800
-----------
TOTAL FIXED INCOME SECURITIES (COST: $33,418,694) (98.1%) 29,527,502
-----------
SHORT-TERM INVESTMENT (COST: $554,543) (1.9%)
----------------------------------------------
554,543 Bank of New York Depository Reserve, 4%, due 11/02/98 554,543
-----------
TOTAL INVESTMENTS (COST: $33,973,237) (100.0%) 30,082,045
-----------
EXCESS OF OTHER ASSETS OVER LIABILITIES (0.0%) 8,039
-----------
NET ASSETS (100%) $30,090,084
===========
</TABLE>
See accompanying Notes to Financial Statements.
24
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EUROPEAN EQUITIES FUND
October 31, 1998
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares
or Warrants EQUITY SECURITIES Value
----------- ----------------- ------------
<S> <C> <C>
COMMON STOCK
------------
FINLAND (2.4% of Net Assets)
4,402 Nokia, OYJ $ 400,986
12,487 Nokia, Series A 1,139,696
------------
TOTAL FINLAND (Cost: $617,434) 1,540,682
------------
FRANCE (13.5%)
4,930 Accor, S.A. 1,037,380
13,362 Axa, S.A. 1,513,043
6,191 Cap Gemini, S.A. 932,111
11,242 Equant, N.V. 488,113 **
1,300 Galeries Lafayette 1,443,924 **
15,299 Total, S.A., Class B 1,768,240
66 Valeo, S.A. 5,724
6,129 Vivendi 1,402,398
4,341 Vivendi, Warrants, expire 05/02/01 8,884 **
------------
TOTAL FRANCE (Cost: $6,688,047) 8,599,817
------------
GERMANY (11.7%)
19,999 Bayerische Hypo-Und Vereinsbank AG 1,590,967
898 Bayerische Motoren Werke AG 633,978
238 Bayerische Motoren Werke AG - New 168,025
13,269 Daimler-Benz AG 1,035,512 **
20,828 Mannesmann AG 2,051,300
1,662 SAP AG 698,784
21,972 Tarkett Sommer AG 365,535
12,724 Volkswagen AG 962,190 **
------------
TOTAL GERMANY (Cost: $7,311,925) 7,506,291
------------
GREAT BRITAIN (27.3%)
75,473 Abbey National, PLC 1,469,005
296,646 British Aerospace, PLC 2,208,696
203,588 British Airways, PLC 1,480,020
109,510 Computacenter, PLC 830,038 **
86,718 General Electric Company, PLC 693,599
177,660 Kingfisher, PLC 1,560,849
69,419 National Westminster Bank, PLC 1,172,100
55,340 Orange, PLC 514,931 **
76,452 Pearson, PLC 1,334,388
59,959 PizzaExpress, PLC 763,297
38,063 Reckitt & Coleman, PLC 658,611
138,436 Royal & Sun Alliance Insurance Group, PLC 1,268,417
145,010 SmithKline Beecham, PLC 1,814,447
130,350 Vodafone Group, PLC 1,746,734
------------
TOTAL GREAT BRITAIN (Cost: $15,736,331) 17,515,132
------------
</TABLE>
** Non-income producing
See accompanying Notes to Financial Statements.
25
<PAGE>
TCW GALILEO EUROPEAN EQUITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
of Shares EQUITY SECURITIES Value
--------- ----------------- -----------
<S> <C> <C>
IRELAND (3.8%)
77,220 Bank of Ireland $ 1,430,431 **
14,194 Elan Corp., PLC (ADR) 994,467 **
-----------
TOTAL IRELAND (Cost: $2,191,702) 2,424,898
-----------
ITALY (8.2%)
32,278 Banca Intesa, S.p.A. 162,435
186,919 Eni, S.p.A. 1,115,462
982,418 Seat-Pagine Gialle, S.p.A. 808,379 **
225,905 Telecom Italia, S.p.A. 1,634,741
286,286 Unicredito Italiano, S.p.A. 1,542,831
-----------
TOTAL ITALY (Cost: $4,800,482) 5,263,848
-----------
LUXEMBOURG (COST: $1,066,524) (1.7%)
6,640 Societe Europeenne des Satellites 1,108,936 **
-----------
NETHERLANDS (1.4%)
190 Internationale Nederlanden Groep 9,204
16,086 Philips Electronics, N.V. 856,886
-----------
TOTAL NETHERLANDS (Cost: $1,111,700) 866,090
-----------
PORTUGAL (3.4%)
35,222 Banco Portugues do Atlantico 702,871 **
58,031 EDP-Electricidade de Portugal, S.A. 1,452,561 **
-----------
TOTAL PORTUGAL (Cost: $2,065,826) 2,155,432
-----------
SPAIN (5.4%)
32,423 Repsol, S.A. 1,630,026
40,754 Telefonica de Espana, S.A. 1,843,102
-----------
TOTAL SPAIN (Cost: $2,636,906) 3,473,128
-----------
SWEDEN (COST: $1,171,827) (1.7%)
33,215 Autoliv, Inc. 1,111,012
-----------
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
26
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
<TABLE>
<CAPTION>
Number of
of Shares EQUITY SECURITIES Value
--------- ----------------- -----------
<S> <C> <C>
SWITZERLAND (12.1%)
4,042 Adecco, S.A. $1,614,409
651 Nestle, S.A. 1,386,746
1,201 Novartis AG 2,167,485
4,300 Swisscom AG 1,459,837 **
1,759 Zurich Allied AG 1,070,752
-----------
TOTAL SWITZERLAND (Cost: $6,201,655) 7,699,229
-----------
TOTAL COMMON STOCK (COST: $51,600,359) (92.6%) 59,264,495
-----------
PREFERRED STOCK
---------------
GERMANY (1.7%)
295 Hugo Boss 459,543
349 Porsche AG 618,615 **
-----------
TOTAL GERMANY (Cost: $1,430,586) 1,078,158
-----------
TOTAL EQUITY SECURITIES (COST: $53,030,945) (94.3%) 60,342,653
-----------
<CAPTION>
Principal
Amount SHORT-TERM INVESTMENTS
------------ ----------------------
<S> <C> <C>
$1,972,355 Bank Of New York Depository Reserve, 4%, due 11/02/98 1,972,355
1,947,344 Foreign Currency Call Accounts 1,937,597
-----------
TOTAL SHORT-TERM INVESTMENTS (COST: $3,919,699) (6.1%) 3,909,952
-----------
TOTAL INVESTMENTS (COST: $56,950,644) (100.4%) 64,252,605
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.4%) (258,245)
-----------
NET ASSETS (100.0%) $63,994,360
===========
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
27
<PAGE>
TCW GALILEO INTERNATIONAL EQUITIES FUND
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number
of Shares INVESTMENT COMPANIES Value
--------- -------------------- -----------
<S> <C> <C>
TCW GALILEO FUNDS
310,876 TCW Galileo Asia Pacific Equities Fund $ 1,582,359
4,819,855 TCW Galileo European Equities Fund 56,295,903
1,605,304 TCW Galileo Japanese Equities Fund 13,532,714
84,493 TCW Galileo Latin America Equities Fund 724,109
2,369,381 TCW Galileo Money Market Fund 2,369,381
-----------
TOTAL TCW GALILEO FUNDS (COST: $70,199,439) (99.5%) 74,504,466
-----------
Principal
Amount SHORT-TERM INVESTMENT (COST: $368,540) (0.5%)
--------- ----------------------------------------------
$368,540 Bank of New York Depository Reserve, 4%, due 11/02/98 368,540
-----------
TOTAL INVESTMENTS (COST: $70,567,979) (100.0%) 74,873,006
LIABILITIES IN EXCESS OF OTHER ASSETS (0.0%) (20,289)
-----------
NET ASSETS (100%) $74,852,717
===========
</TABLE>
See accompanying Notes to Financial Statements.
28
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EUROPEAN EQUITIES FUND
October 31, 1998
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares
or Warrants EQUITY SECURITIES Value
----------- ----------------- ------------
<S> <C> <C>
COMMON STOCK
------------
JAPAN (68.7% of Net Assets)
45,000 Anritsu Corporation $356,620
100,000 Asahi Diamond Industrial Company, Limited 440,176 **
30,000 CMK Corporation 271,342
115,000 Daifuku Company, Limited 487,380 **
16,000 Fuji Photo Film Company 588,509
10,000 Fujitsu Support and Service, Inc. 503,920 **
1,000 Gunze, Limited 2,447
27,900 Heiwa Corporation 251,146
150,000 Hitachi Cable, Limited 633,130 **
145,000 Hitachi, Limited 740,676
224,000 JSR Corporation 887,587
283,000 Kawasaki Steel Corporation 450,986
55,900 Kyokuto Kaihatsu Kogyo Company, Limited 158,903
750 Mabe International, Warrants, expire 09/09/99 555 **
18,400 Micronics Japan Company, Limited 198,122 **
100,000 Mitsubishi Heavy Industries, Limited 387,630
185,000 Mitsui Marine and Fire Insurance Company, Limited 922,689
12,000 Murata Manufacturing Company, Limited 402,102
78,000 NEC Corporation 579,843
7,000 Nichiei Company, Limited 568,008
5,000 Nintendo Company, Limited 426,393
67,000 Nippon Densetsu Kogyo Company, Limited 204,307 **
117 Nippon Telegraph & Telephone Corporation 919,149
116,000 Nissan Fire & Marine Insurance Company, Limited 322,750
40,000 Nomura Securities Company, Limited 303,213
30,000 Noritsu Koki Company, Limited 630,545 **
26 NTT Mobile Communication Network, Inc. 942,889 **
12,000 Promise Company, Limited 544,750
12,000 Riso Kagaku 677,061 **
30,000 S.T. Chemical Company, Limited 107,244
39,000 Sagami Company, Limited 79,955 **
96,000 Sanyo Denki 281,161 **
22,000 Sanyo Shinpan Finance Company, Limited 731,501 **
26,000 Satori Electric Company, Limited 150,056
28,000 Seikagaku Corporation 120,596
37,000 Sekisui Chemical Company, Limited 202,386
118,000 Shimadzu Corporation 398,449
40 Shin Nippon Air Technologies Company, Limited 162
41,000 Shiseido Company, Limited 450,650
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
29
<PAGE>
TCW GALILEO JAPANESE EQUITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
shares EQUITY SECURITIES Value
------------- ----------------- -----------
<S> <C> <C>
JAPAN (CONTINUED)
17,000 Sony Corporation $1,083,642
11,000 Takada Kiko Company, Limited 36,291
34,000 Tasaki Shinju Company, Limited 98,992
60,000 Tokyo Broadcasting System, Incorporated 565,940 **
72,000 Toppan Printing Company, Limited 741,149
145,000 Toshiba Plant Kensetsu Company, Limited 322,250
50,000 Yamatake Corporation 493,583 **
-----------
TOTAL EQUITY SECURITIES (COST: $21,159,526) (68.7%) 19,666,835
-----------
<CAPTION>
Principal
Amount CONVERTIBLE SECURITIES
------------- ----------------------
JAPAN (27.2%)
<S> <C> <C>
(Yen) 100,000,000 Fuji Heavy Industries, Limited, Convertible Bond,
0.9%, due 09/30/03 977,690
(Yen) 67,000,000 Konami Company, Limited, Convertible Bond,
0.75%, due 03/31/00 672,366
(Yen) 80,000,000 Minebea Company, Limited, Convertible Bond,
0.65%, due 03/31/05 785,597
(Yen) 95,000,000 Mitsui High-Tech, Inc., Series 2, Convertible Bond,
1.9%, due 01/31/00 905,892
(Yen) 60,000,000 NEC System Integration & Construction, Limited, Convertible Bond,
0.375%, due 03/31/02 532,862
(Yen) 100,000,000 Nitto Denko Corporation, Series 4, Convertible Bond,
3.9%, due 03/31/01 973,383
(Yen) 70,000,000 Ricoh Company, Limited, Series 8, Convertible Bond,
1.5%, due 03/29/02 663,278
(Yen) 75,000,000 Sumitomo Bakelite Company, Limited, Series 6, Convertible Bond,
1.2%, due 09/29/06 697,735
(Yen) 90,000,000 Sumitomo Bank International Finance N.V., Convertible Bond,
0.75%, due 05/31/01 732,621
CHF 1,150,000 Yamada Denki Company, Limited, Convertible Bond,
0.125%, due 09/30/02 848,465
-----------
TOTAL CONVERTIBLE SECURITIES (COST: $7,424,172) (27.2%) 7,789,889
-----------
SHORT-TERM INVESTMENT (COST: $7,954) (0.0%)
--------------------------------------------
$7,954 Foreign Currency Call Accounts 17,446
-----------
TOTAL INVESTMENTS (COST: $28,591,652) (95.9%) 27,474,170
EXCESS OF OTHER ASSETS OVER LIABILITIES (4.1%) 1,173,530
-----------
NET ASSETS (100.0%) $28,647,700
-----------
</TABLE>
Yen - Japanese Yen.
CHF - Swiss Francs.
** Non-income producing.
See accompanying Notes to Financial Statements.
30
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO LATIN AMERICA EQUITIES FUND
October 31, 1998
SCHEDULE OF INVESTMENTS
- -----------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
- --------------- ----------------- ----------
<S> <C> <C>
COMMON STOCK
------------
ARGENTINA (12.9% of Net Assets)
13,873 Banco de Galicia y Buenos Aires, S.A. (ADR) $ 236,708
5,000 Banco Frances, S.A. (ADR) 104,375
71,443 Perez Companc, S.A., Series B 352,928
8,350 Telecom Argentina STET - France Telecom, S.A., Series B (ADR) 269,288
6,910 Telefonica de Argentina, Sociedad Anonima, Series B (ADR) 228,462
11,350 Yacimientos Petroliferos Fiscales Sociedad del Estado, Series D (ADR) 328,441
----------
TOTAL ARGENTINA (Cost: $1,364,120) 1,520,202
----------
BRAZIL (2.0%)
5,200,000 Embratel Participacoes, S.A. 40,101 **
5,200,000 Tele Centro Sul Participacoes, S.A. 23,973 **
5,200,000 Telesp Celular Participacoes, S.A. 16,956 **
3,500,000 Telesp Participacoes, S.A. 62,783 **
5,200 Uniao de Bancos Brasileros, S.A. (UNIBANCO) (ADR) 90,350
----------
TOTAL BRAZIL (Cost: $ 178,059) 234,163
----------
CHILE (2.5%)
7,900 Embotelladora Andina, S.A., Series A (ADR) 105,169
6,500 Laboratorio Chile, S.A.(ADR) 94,250 **
3,530 Vina Concha y Toro, S.A. (ADR) 90,677
----------
TOTAL CHILE (Cost: $ 363,871) 290,096
----------
COLOMBIA (2.0%)
22,198 Banco de Bogota 74,580
7,580 BanColombia, S.A. (ADR) 37,426
28,250 Bavaria CB 93,856
30,616 Suramericana de Inversiones, S.A. 31,053
----------
TOTAL COLOMBIA (Cost: $ 585,148) 236,915
----------
LATIN AMERICA REGIONAL (COST: $355,665) (2.1%)
12,060 Panamerican Beverages, Inc. (ADR) 244,215
----------
MEXICO (40.8%)
60,000 Apasco, S.A. de C.V. 219,802
76,080 Cemex, S.A. de C.V., Series B 211,668 **
479,240 Cifra, S.A. de C.V., Series C 621,588 **
6,840 Coca Cola Femsa, S.A. (ADR) 112,860
13,200 Fomento Economico Mexicano, S.A. de C.V., Series B (ADR) 344,025 **
39,400 GRUPO CARSO, S.A. de C.V., Series A1 136,535 **
175,900 Grupo Industrial Bimbo, S.A. de C.V., Series A 296,069
203,000 Grupo Modelo, S.A. de C.V., Series C 428,109 **
</TABLE>
** Non-income producing.
See accompanying Notes to Financial Statements.
31
<PAGE>
TCW GALILEO LATIN AMERICA EQUITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
- -----------------------------------
<TABLE>
<CAPTION>
Number of
Shares EQUITY SECURITIES Value
----------------- ----------
<S> <C> <C>
MEXICO (CONTINUED)
18,210 Grupo Televisa, S.A. de C.V. (ADR) $ 493,946 **
177,300 Kimberly-Clark de Mexico, S.A. de C.V., Series A 519,612
64,500 Organizacion Soriana, S.A., de C.V., Series B 191,584 **
23,345 Telefonos de Mexico, S.A. de C.V. (ADR) 1,232,908
----------
TOTAL MEXICO (Cost: $5,050,973) 4,808,706
----------
PERU (1.5%)
47,379 Cementos Lima, S.A., Class T 55,096
14,196 Compania de Minas Buenaventura, S.A., Series B 85,222
118,088 Union de Cerveceria Peruanas Backus y Johnston, S.A., Class T 41,927
----------
TOTAL PERU (Cost: $ 254,539) 182,245
----------
TOTAL COMMON STOCK (COST: $8,152,375) (63.8%) 7,516,542
----------
PREFERRED STOCK
---------------
ARGENTINA (COST: $102,848) (0.6%)
7,900 Quilmes Industrial, S.A. (ADR) 72,581
----------
BRAZIL (29.0%)
223,700 Banco Itau, S.A. 108,758
61,400 CENTRAIS ELETRICAS DE SANTA CATARINA, S.A. (CELESC) 34,483
26,593 Companhia Energetica de Minas Gerais (CEMIG) (ADR) 511,915
28,995,000 Companhia Paranaense de Energia (COPEL), Series B 226,029
24,142 Companhia Vale do Rio Doce 364,255
22,855,000 Embratel Participacoes, S.A. 321,847 **
333,000 Itausa - Investimentos Itau, S.A. 175,851
3,067,000 Petroleo Brasiliero, S.A. (PETROBRAS) 385,624
23,625,000 Tele Centro Sul Participacoes, S.A. 227,735 **
13,625,000 Tele Norte Leste Participacoes, S.A. 171,312 **
28,225,000 Telemig Celular Participacoes, S.A. 29,100 **
19,025,000 Telesp Celular Participacoes, S.A. 141,930 **
25,425,000 Telesp Participacoes, S.A. 650,010 **
18,825,000 Telesp Sudeste Celular Participacoes, S.A. 74,164 **
----------
TOTAL BRAZIL (Cost: $3,519,508) 3,423,013
----------
TOTAL PREFERRED STOCK (COST: $3,622,356) (29.6%) 3,495,594
----------
TOTAL EQUITY SECURITIES (COST: $11,774,731) (93.4%) 11,012,136
----------
</TABLE>
** Non-income producing.
See accompasnying Notes to Financial Statements.
32
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
<TABLE>
<CAPTION>
Principal
Amount OTHER INVESTMENTS Value
- ---------------- ----------------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENT (COST: $956,695) (8.1%)
----------------------------------------------
$956,695 Bank of New York Depository Reserve, 4%, due 11/02/98 $956,695
-----------
TOTAL INVESTMENTS (COST: $12,731,426) (101.5%) 11,968,831
LIABILITIES IN EXCESS OF OTHER ASSETS (-1.5%) (173,321)
-----------
NET ASSETS (100.0%) $11,795,510
===========
</TABLE>
See accompanying Notes to Financial Statements.
33
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
<TABLE>
<CAPTION>
TCW GALILEO TCW GALILEO
ASIA PACIFIC EMERGING MARKETS
EQUITIES FUND EQUITIES FUND
-------------- ----------------
<S> <C> <C>
ASSETS
Investments, at Value /(1)/ $ 8,561 $ 18,383
Receivables for Fund Shares Sold - 1,366
Receivables for Securities Sold - -
Accrued Interest and Dividends Receivable 17 29
Foreign Tax Reclaim Receivable - -
Deferred Organization Costs - -
-------------- ----------------
Total Assets 8,578 19,778
-------------- ----------------
LIABILITIES
Payables for Fund Shares Redeemed 36 -
Distribution Payable - -
Payables for Securities Purchased - 934
Management Fees and Other Accrued Expenses 60 81
-------------- ----------------
Total Liabilities 96 1,015
-------------- ----------------
NET ASSETS $ 8,482 $ 18,763
============== ================
NET ASSETS CONSIST OF:
Paid-in Capital $ 13,663 $ 33,211
Undistributed Net Realized Gain (Loss) on Investments
and Foreign Currency Transactions (5,415) (12,951)
Unrealized Appreciation (Depreciation) on Investments
and Foreign Currency Translations 427 (1,948)
Undistributed (Overdistributed) Net Investment Income (193) 451
-------------- ----------------
NET ASSETS $ 8,482 $ 18,763
============== ================
CAPITAL SHARES OUTSTANDING 1,665,428 3,367,869
============== ================
NET ASSET VALUE PER SHARE $ 5.09 $ 5.57
============== ================
</TABLE>
(1) The identified cost for the TCW Galileo Asia Pacific Equities Fund, the TCW
Galileo Emerging Markets Equities Fund, the TCW Galileo Emerging Markets
Income Fund, the TCW Galileo European Equities Fund, the TCW Galileo
International Equities Fund, the TCW Galileo Japanese Equities Fund and the
TCW Galileo Latin America Equities Fund at October 31, 1998, was $8,134,
$20,331, $33,973, $56,951, $70,568, $28,591 and $12,732, respectively.
See accompanying Notes to Financial Statements.
34
<PAGE>
<TABLE>
<CAPTION>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
Dollar Amounts in Thousands
(Except per Share Amounts)
October 31, 1998
TCW GALILEO TCW GALILEO TCW GALILEO TCW GALILEO TCW GALILEO
EMERGING MARKETS EUROPEAN EQUITIES INTERNATIONAL EQUITIES JAPANESE EQUITIES LATIN AMERICA
INCOME FUND FUND FUND FUND EQUITIES FUND
---------------- ----------------- ---------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
$ 30,082 $ 64,253 $ 74,873 $ 27,474 $ 11,969
5,435 - - 1,146 37
- - - - 161
699 56 17 75 71
- 117 - - -
- 5 7 6 -
---------------- ----------------- ---------------------- ------------------ ---------------
36,216 64,431 74,897 28,701 12,238
---------------- ----------------- ---------------------- ------------------ ---------------
- - - - 45
281 - - - -
5,802 - - - 285
43 437 44 53 112
---------------- ----------------- ---------------------- ------------------ ---------------
6,126 437 44 53 442
---------------- ----------------- ---------------------- ------------------ ---------------
$ 30,090 $ 63,994 $ 74,853 $ 28,648 $ 11,796
================ ================= ====================== ================== ===============
$ 40,619 $ 54,700 $ 70,953 $ 35,399 $ 22,397
(6,632) 1,708 (751) (5,508) (10,486)
(3,891) 7,302 4,305 (1,117) (763)
(6) 284 346 (126) 648
----------------- ----------------- ---------------------- ------------------ ---------------
$ 30,090 $ 63,994 $ 74,853 $ 28,648 $ 11,796
================= ================= ====================== ================== ===============
4,569,625 5,470,577 6,960,861 3,397,544 1,376,180
================= ================= ====================== ================== ===============
$ 6.58 $ 11.70 $ 10.75 $ 8.43 $ 8.57
================= ================= ====================== ================== ===============
</TABLE>
35
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
<TABLE>
<CAPTION>
TCW GALILEO TCW GALILEO
ASIA PACIFIC EQUITY EMERGING MARKETS
FUND EQUITIES FUND
------------------- ----------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 195 /(3)/ $ 765 /(3)/
Interest 123 164
------------------- ----------------
Total 318 929
------------------- ----------------
Expenses:
Management Fees 112 327
Accounting Service Fees 35 35
Custodian Fees 36 94
Transfer Agent Fees 34 35
Registration Fees 26 26
Directors' Fees and Expenses 6 6
Audit and Tax Fees 21 21
Amortization of Deferred Organization Costs 2 2
Other 6 8
------------------- ----------------
Total Expenses 278 554
Less Expenses Borne by Investment Adviser - -
------------------- ----------------
Net Expenses 278 554
------------------- ----------------
Net Investment Income (Loss) 40 375
------------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions During the Period (7,018) (7,931)
Change in Unrealized Appreciation (Depreciation)
on Investments and Foreign Currency Translations
During the Period 3,769 (3,247)
------------------- ----------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency During the Period (3,249) (11,178)
------------------- ----------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ (3,209) $ (10,803)
=================== ================
</TABLE>
(1) For the period November 3, 1997 (commencement of operations) through October
31, 1998.
(2) For the period June 3, 1998 (commencement of operations) through October 31,
1998.
(3) Net of foreign taxes withheld of $17, $47, $78, $11 and $63 for TCW Galileo
Asia Pacific Equities Fund, TCW Galileo Emerging Markets Equities Fund,
TCW Galileo European Equities Fund, TCW Galileo Japanese Equities Fund and
TCW Galileo Latin America Equities Fund, respectively.
See accompanying Notes to Financial Statements.
36
<PAGE>
<TABLE>
<CAPTION>
TCW GALILEO FUNDS, INC.
Dollar Amounts in Thousands
Year Ended October 31, 1998
TCW GALILEO TCW GALILEO TCW GALILEO TCW GALILEO TCW GALILEO
EMERGING MARKETS EUROPEAN EQUITIES INTERNATIONAL EQUITIES JAPANESE EQUITIES LATIN AMERICA
INCOME FUND /(2)/ FUND/ (1)/ FUND/ (1)/ FUND/ (1)/ EQUITIES FUND
------------------ ----------------- ---------------------- ----------------- --------------
<S> <C> <C> <C> <C>
$ - $ 798 /(3)/ $ 426 $ 70 /(3)/ $ 815 /(3)/
1,279 70 39 42 48
------------------ ----------------- ---------------------- ----------------- --------------
1,279 868 465 112 863
------------------ ----------------- ---------------------- ----------------- --------------
71 412 - 116 313
15 35 35 35 35
8 51 2 9 61
5 23 30 13 37
24 30 30 29 26
2 6 6 6 6
11 19 8 20 21
1 1 2 2 3
9 7 6 5 10
------------------ -------------- ---------------------- ----------------- --------------
146 584 119 235 512
- - - 49 -
------------------ -------------- ---------------------- ----------------- --------------
146 584 119 186 512
------------------ -------------- ---------------------- ----------------- --------------
1,133 284 346 (74) 351
------------------ -------------- ---------------------- ----------------- --------------
(6,632) 1,708 (751) (5,508) 3,972
(3,087) 3,856 4,305 4,310 (12,359)
------------------ -------------- ---------------------- ----------------- --------------
(9,719) 5,564 3,554 (1,198) (8,387)
------------------ -------------- ---------------------- ----------------- --------------
$ (8,586) $ 5,848 $ 3,900 $ (1,272) $ (8,036)
================== ============== ====================== ================= ==============
</TABLE>
37
<PAGE>
TCW GALILEO ASIA PACIFIC EQUITIES FUND
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1998 October 31, 1997
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ 40 $ (10)
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions (7,018) 4,190
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations 3,769 (9,363)
---------------- ----------------
(Decrease) in Net Assets Resulting from Operations (3,209) (5,183)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS
Distribution from Net Investment Income - (322)
Distribution in Excess of Net Investment Income - (233)
Distribution of Net Realized Gains (2,465) -
---------------- ----------------
Total Distributions to Shareholders (2,465) (555)
---------------- ----------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,605,901 shares in 1998 and 671,147 shares in 1997) 9,663 7,355
Proceeds from Shares Issued Upon Reinvestment of Dividends
(440,561 shares in 1998 and 47,638 Shares in 1997) 2,425 540
Cost of Shares Redeemed
(3,272,912 shares in 1998 and 2,849,433 shares in 1997) (19,259) (29,096)
---------------- ----------------
(Decrease) in Net Assets Resulting from Capital
Share Transactions (7,171) (21,201)
---------------- ----------------
(Decrease) in Net Assets (12,845) (26,939)
NET ASSETS
Beginning of Year 21,327 48,266
---------------- ----------------
End of Year $ 8,482 $ 21,327
================ ================
</TABLE>
See accompanying Notes to Financial Statements.
38
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EMERGING MARKETS EQUITIES FUND
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 375 $ 221
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions (7,931) 4,502
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations (3,247) (1,473)
---------------- ----------------
Increase (Decrease) in Net Assets Resulting from Operations (10,803) 3,250
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (34) (670)
---------------- ----------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,729,977 shares in 1998 and 775,118 shares in 1997) 10,216 7,428
Proceeds from Shares Issued Upon Reinvestment of Dividends
(3,688 shares in 1998 and 49,995 shares in 1997) 27 483
Cost of Shares Redeemed
(4,103,415 shares in 1998 and 2,135,058 shares in 1997) (28,369) (20,404)
---------------- ----------------
(Decrease) in Net Assets Resulting from Capital
Share Transactions (18,126) (12,493)
---------------- ----------------
(Decrease) in Net Assets (28,963) (9,913)
NET ASSETS
Beginning of Year 47,726 57,639
---------------- ----------------
End of Year $ 18,763 $ 47,726
================ ================
</TABLE>
See accompanying Notes to Financial Statements.
39
<PAGE>
TCW GALILEO EMERGING MARKETS INCOME FUND
Dollar Amounts in Thousands
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
<TABLE>
<CAPTION>
JUNE 3, 1998
(COMMENCEMENT
OF OPERATIONS)
THROUGH
OCTOBER 31, 1998
----------------
<S> <C>
OPERATIONS
Net Investment Income $ 1,133
Net Realized (Loss) on Investments and Foreign Currency
Transactions (6,632)
Change in Unrealized (Depreciation) on Investments
and Foreign Currency Translations (3,087)
--------------
(Decrease) in Net Assets Resulting from Operations (8,586)
--------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (1,133)
Distribution in Excess of Net Investment Income (6)
--------------
(1,139)
--------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon Exchange of Limited Partnership
Interests (2,821,844 shares) (Note 1) 28,218
Proceeds from Shares Sold (1,871,153 shares) 12,305
Proceeds from Shares Issued upon Reinvestment of
Dividends (114,557 shares) 834
Cost of Shares Redeemed (237,929 shares) (1,542)
--------------
Increase in Net Assets Resulting from
Capital Share Transactions 39,815
--------------
Increase in Net Assets 30,090
NET ASSETS
Beginning of Period -
--------------
End of Period $ 30,090
==============
</TABLE>
See accompanying Notes to Financial Statements.
40
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EUROPEAN EQUITIES FUND
Dollar Amounts in Thousands
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
<TABLE>
<CAPTION>
NOVEMBER 3, 1997
(COMMENCEMENT
OF OPERATIONS)
THROUGH
OCTOBER 31, 1998
----------------
<S> <C>
OPERATIONS
Net Investment Income $ 284
Net Realized Gain on Investments and Foreign Currency Transactions 1,708
Change in Unrealized Appreciation on Investments
and Foreign Currency Translations 3,856
---------------
Increase in Net Assets Resulting from Operations 5,848
---------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon Exchange of Limited Partnership Interests
(3,226,833 shares) (Note 1) 32,268
Proceeds from Shares Sold (2,746,292 shares) 32,078
Cost of Shares Redeemed (502,548 shares) (6,200)
---------------
Increase in Net Assets Resulting from
Capital Share Transactions 58,146
---------------
Increase in Net Assets 63,994
NET ASSETS
Beginning of Period -
---------------
End of Period $ 63,994
===============
</TABLE>
See accompanying Notes to Financial Statements.
41
<PAGE>
TCW GALILEO INTERNATIONAL EQUITIES FUND
Dollar Amounts in Thousands
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
<TABLE>
<CAPTION>
NOVEMBER 3, 1997
(COMMENCEMENT
OF OPERATIONS)
THROUGH
OCTOBER 31, 1998
----------------
<S> <C>
OPERATIONS
Net Investment Income $ 346
Net Realized (Loss) on Investments (751)
Change in Unrealized Appreciation on Investments 4,305
---------------
Increase in Net Assets Resulting from Operations 3,900
---------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon Exchange of Limited Partnership
Interests (4,670,385 shares) (Note 1) 46,704
Proceeds from Shares Sold (3,196,699 shares) 34,126
Cost of Shares Redeemed (906,223 shares) (9,877)
---------------
Increase in Net Assets Resulting from
Capital Share Transactions 70,953
---------------
Increase in Net Assets 74,853
NET ASSETS
Beginning of Period -
---------------
End of Period $ 74,853
===============
</TABLE>
See accompanying Notes to Financial Statements.
42
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO JAPANESE EQUITIES FUND
Dollar Amounts in Thousands
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
<TABLE>
<CAPTION>
NOVEMBER 3, 1997
(COMMENCEMENT
OF OPERATIONS)
THROUGH
OCTOBER 31, 1998
----------------
<S> <C>
OPERATIONS
Net Investment (Loss) $ (74)
Net Realized (Loss) on Investments and Foreign Currency
Transactions (5,508)
Change in Unrealized Appreciation on Investments
and Foreign Currency Translations 4,310
-------------
(Decrease) in Net Assets Resulting from Operations (1,272)
-------------
DISTRIBUTIONS TO SHAREHOLDERS
Distribution from Net Investment Income (52)
-------------
CAPITAL SHARE TRANSACTIONS
Shares Issued upon Exchange of Limited Partnership
Interests (960,559 shares) (Note 1) 9,606
Proceeds from Shares Sold (2,813,291shares) 23,503
Proceeds from Shares Issued upon Reinvestment of
Dividends (7,216 shares) 52
Cost of Shares Redeemed (383,522 shares) (3,189)
-------------
Increase in Net Assets Resulting from
Capital Share Transactions 29,972
Increase in Net Assets -------------
28,648
NET ASSETS
Beginning of Period -
-------------
End of Period $ 28,648
=============
</TABLE>
See accompanying Notes to Financial Statements.
43
<PAGE>
TCW GALILEO LATIN AMERICA EQUITIES FUND
Dollar Amounts in Thousands
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<CAPTION>
YEAR ENDED Year Ended
OCTOBER 31, 1998 October 31, 1997
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net Investment Income $ 351 $ 658
Net Realized Gain on Investments and
Foreign Currency Transactions 3,972 17,076
Change in Unrealized Appreciation (Depreciation)
on Investments and Foreign Currency Translations (12,359) 3,998
-------------- --------------
Increase (Decrease) in Net Assets Resulting from Operations (8,036) 21,732
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (595) (726)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares Sold
(1,123,813 shares in 1998 and 879,898 shares in 1997) 13,900 11,912
Proceeds from Shares Issued upon Reinvestment of Dividends
(28,695 shares in 1998 and 8,386 shares in 1997) 345 94
Cost of Shares Redeemed
(4,200,900 shares in 1998 and 3,292,335 shares in 1997) (49,154) (45,999)
-------------- --------------
(Decrease) in Net Assets Resulting from
Capital Share Transactions (34,909) (33,993)
-------------- --------------
(Decrease) in Net Assets (43,540) (12,987)
NET ASSETS
Beginning of Year 55,336 68,323
-------------- --------------
End of Year $ 11,796 $ 55,336
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
44
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
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 21 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 Equities Fund.
TCW London International, Limited is also a sub-adviser to the TCW Galileo
International Equities Fund, TCW Galileo European Equities Fund, and TCW Galileo
Japanese Equities Fund. TCW Asia Limited is a sub-adviser to the TCW Galileo
Asia Pacific Equities Fund. Berkeley Quantitative Advisors is sub-adviser to
the TCW Galileo Enhanced 500 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 fixed income 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), one non-diversified Fixed Income Fund (the TCW Galileo Emerging Markets
Income Fund), a convertible securities fund (the TCW Galileo Convertible
Securities Fund), and fourteen non-diversified equity funds (the TCW Galileo
Core Equities Fund, the TCW Galileo Earnings Momentum Fund, the TCW Galileo Mid-
Cap Growth Fund, the TCW Galileo Small Cap Growth Fund, the TCW Galileo Enhanced
500 Fund, the TCW Galileo Large Cap Growth Fund, the TCW Galileo Large Cap Value
Fund the TCW Galileo Asia Pacific Equities Fund, the TCW Galileo Emerging
Markets Equities Fund, the TCW Galileo Latin America Equities Fund, the
TCW Galileo International Equities Fund, the TCW Galileo European Equities Fund,
the TCW Galileo Japanese Equities Fund and the TCW Galileo Value Opportunities
Fund) currently offered by the Company. On November 3, 1997, TCW Galileo
International Equities Fund, TCW Galileo Japanese Equities Fund and TCW Galileo
Value Opportunities Fund commenced operations resulting from the exchange of
Limited Partnership interests. On June 3, 1998, four additional Galileo Funds
(the TCW Galileo Enhanced 500 Fund, the TCW Galileo Large Cap Growth Fund, the
TCW Galileo Large Cap Value Fund and the TCW Galileo Emerging Markets Income
Fund) also 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 those dates, and the fair values of which were exchanged for commons
shares of the Funds. The transfers were treated as tax-free exchanges in
accordance with the Internal Revenue Code. The TCW Galileo European Equities
Fund commenced operations on November 3, 1997, as a new Galileo Fund.
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 Equities Fund
(formerly 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 Equities 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 Equities Fund seeks long-term
capital appreciation by investing in equity securities of companies in emerging
market countries around the world; (13) the TCW Galileo Latin America Equities
Fund seeks long-term capital appreciation, primarily by investing in Latin
American equity
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -----------------------------------------
securities; (14) the TCW Galileo International Equities Fund seeks long-term
capital appreciation by investing in a mix of underlying TCW Galileo Funds; (15)
the TCW Galileo European Equities Fund seeks long-term capital appreciation by
investing primarily in the securities of issuers located in Europe; (16) the
TCW Galileo Japanese Equities Fund seeks long-term capital appreciation by
investing primarily in Japanese equity securities; (17) the TCW Galileo Value
Opportunities Fund seeks capital appreciation by investing at least 65% of its
total assets, under normal circumstances, in publicly traded equity securities
issued by small and medium companies with market capitalization at the time of
purchase between $500 million and $2.5 billion; (18) the TCW Galileo Emerging
Markets Income Fund seeks high total return from capital appreciation and
current income by investing at least 65% of its total assets in debt securities
issued or guaranteed by companies, financial institutions, and government
entities in emerging market countries; (19) the TCW Galileo Enhanced 500 Fund
seeks to achieve a high level of total return through a combination of capital
appreciation and current income by investing at least 65% of its total assets in
a broadly diversified portfolio of common stock of companies which are included
in the Standard & Poor's 500 Composite Stock Price Index; (20) the TCW Galileo
Large Cap Growth Fund seeks long-term appreciation by investing primarily in
publicly traded equity securities of large capitalization U.S. companies with
above average earnings prospects; and (21) the TCW Galileo Large Cap Value Fund
seeks long-term capital appreciation by investing primarily in publicly traded
equity securities of large capitalization companies.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF ACCOUNTING: The Funds use the accrual method of accounting for
financial reporting purposes.
SECURITY VALUATIONS: 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 for which over-the-counter market quotations
are readily available, are valued at the latest bid price prior to the time of
valuation.
Securities for which market quotations are not readily available, including
circumstances under which it is determined by the Adviser that sale or bid
prices are not reflective of a security's market value, are valued at their fair
value as determined in good faith under procedures established by and under the
general supervision of the Company's Board of Directors.
Short-term debt securities with remaining maturities of 60 days or less at the
time of purchase are valued at amortized cost. Other short-term debt securities
are valued on a marked-to-market basis until such time as they reach a remaining
maturity of 60 days, whereupon they will be valued at amortized value using
their value on the 61st day prior to maturity.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are
recorded as of the trade date. Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis. Realized and
unrealized gains and losses on investments are recorded on the basis of specific
identification. The TCW Galileo Emerging Markets Income Fund recognizes as
interest income discounts on securities purchased using a constant yield to
maturity accretion method. Premiums on securities purchased are not ammortized.
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.
46
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
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.
There were no forward foreign currency contracts outstanding on October 31,
1998.
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, 1998.
DEFERRED ORGANIZATION COSTS: Organization costs of $10,000 per Fund for the
TCW Galileo Asia Pacific Equities Fund and the TCW Galileo Emerging Markets
Equities Fund and $50,000 for the TCW Galileo Latin America Equities Fund have
been completely amortized as of October 31, 1998. Organizational costs of
approximately $7,000, $9,000 and $7,000 for the TCW Galileo European Equities
Fund, TCW Galileo International Equities Fund and the TCW Galileo Japanese
Equities 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. Organizational costs for the TCW Galileo Emerging Markets Income
Fund were de minimus and therefore, were not deferred. Those costs were
expensed as incurred.
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 Asia Pacific Equities
Fund, the TCW Galileo Emerging Markets Equities Fund, the TCW Galileo European
Equities Fund, the TCW Galileo International Equities Fund, and the TCW Galileo
Japanese Equities Fund, and 2,000 shares of the TCW Galileo Latin America
Equities Fund, 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 1:00 P.M. Pacific Time.
DIVIDENDS AND DISTRIBUTIONS: It is the policy of the Funds to declare and pay,
or reinvest, dividends from net investment income annually. Distribution of any
net long-term and net short-term capital gains earned by a Fund will be
distributed at least annually.
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- ----------------------------------------
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, excise tax
regulations and employing equalization in determining amounts to be distributed
to Fund shareholders. 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.
USE OF ESTIMATES: The preparation of the accompanying financial statements
requires management to make estimates and assumptions that affect 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, 1998, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows:
<TABLE>
<CAPTION>
TCW GALILEO TCW GALILEO TCWGALILEO TCW GALILEO
ASIA PACIFIC EQUITIES EMERGING MARKETS EUROPEAN EQUITIES EMERGING MARKETS
FUND EQUITIES FUND FUND INCOME FUND
--------------------- ----------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 378,592 $ 580,617 $ 9,688,521 $ 418,747
Unrealized (Depreciation) (452,014) (3,358,743) (2,519,892) (4,512,770)
---------- ----------- ----------- -----------
Net Unrealized Appreciation (Depreciation) $ (73,422) $(2,778,126) $ 7,168,629 $(4,094,023)
========== =========== =========== ===========
Cost of Investments for Federal
Income Tax Purposes $ 8,634,831 $21,160,910 $57,083,976 $34,176,068
========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
TCW GALILEO TCW GALILEO TCW GALILEO
INTERNATIONAL EQUITIES JAPANESE EQUITIES LATIN AMERICA EQUITIES
FUND FUND FUND
---------------------- ------------------ ----------------------
<S> <C> <C> <C>
Unrealized Appreciation $ 5,579,356 $ 1,535,009 $ 1,315,662
Unrealized (Depreciation) (1,722,130) (2,698,055) (2,744,518)
------------ ------------ -----------
Net Unrealized Appreciation (Depreciation) $ 3,857,226 $ (1,163,046) $(1,428,856)
============ ============ ===========
Cost of Investments for Federal
Income Tax Purposes $ 71,015,780 $ 28,637,216 $13,397,687
============ ============ ===========
</TABLE>
48
<PAGE>
At October 31, 1998, the following Funds had net realized loss carryforwards for
federal income tax purposes (in thousands):
<TABLE>
<CAPTION>
Expiring in
----------------------------------------------
2003 2004 2005 2006
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
TCW Galileo Asia Pacific Equities Fund $ - $ - $ - $ 6,632
TCW Galileo Emerging Markets Equities Fund 3,478 902 - 7,540
TCW Galileo Emerging Markets Income Fund - - - 6,429
TCW Galileo International Equities Fund - - - 555
TCW Galileo Japanese Equities Fund - - - 5,511
TCW Galileo Latin America Equities Fund 6,586 3,423 - -
</TABLE>
NOTE 4 - INVESTMENT ADVISORY AND ACCOUNTING SERVICE FEES
The Funds pay to the Adviser, as compensation for services rendered, facilities
furnished and expenses borne by it, the following annual management fees:
TCW Galileo Asia Pacific Equities Fund 1.00%
TCW Galileo Emerging Markets Equities Fund 1.00%
TCW Galileo Emerging Markets Income Fund 0.75%
TCW Galileo European Equities Fund 0.75%
TCW Galileo International Equities Fund 0.00%
TCW Galileo Japanese Equities Fund 0.75%
TCW Galileo Latin America Equities Fund 1.00%
Each 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 TCWGalileo Emerging Markets Income Fund, the
TCW Galileo European Equities Fund, the TCWGalileo International Equities Fund,
and the TCW Galileo Japanese Equities Fund are limited to 1.78%, 1.20%, 1.16%,
and 1.20%, respectively, of the Fund's daily net assets until December 31, 1998.
Certain officers and/or directors of the Company are officers and/or directors
of the Adviser.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
Investment transactions (excluding short-term investments) for the year ended
October 31, 1998, were as follows:
<TABLE>
<CAPTION>
TCW GALILEO TCW GALILEO TCW GALILEO TCW GALILEO
ASIA PACIFIC EQUITIES EMERGING MARKETS EMERGING MARKETS EUROPEAN EQUITIES
FUND EQUITIES FUND INCOME FUND FUND
--------------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Purchases at Cost $ 16,677,012 $ 29,864,941 $ 29,801,807 $ 60,438,221
------------- ------------- ------------- -------------
Sales Proceeds $ 18,328,648 $ 44,049,144 $ 15,014,213 $ 37,646,395
============= ============= ============= =============
</TABLE>
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- ----------------------------------------
<TABLE>
<CAPTION>
TCW GALILEO TCW GALILEO TCW GALILEO
INTERNATIONAL EQUITIES JAPANESE EQUITIES LATIN AMERICA EQUITIES
FUND FUND FUND
---------------------- ----------------- ---------------------
<S> <C> <C> <C>
Purchases at Cost $ 42,524,047 $ 45,158,943 $ 9,799,361
------------ ------------- ------------
Sales Proceeds $ 13,775,389 $ 25,796,565 $ 43,679,135
============ ============= ============
</TABLE>
There were no purchases or sales of U.S. Government Securities for the year
ended October 31, 1998.
NOTE 6 - RESTRICTED SECURITIES
The following restricted securities held by the Funds as of October 31, 1998,
were valued both at the date of acquisition and October 31, 1998, 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.
TCW GALILEO ASIA PACIFIC EQUITIES FUND:
<TABLE>
<CAPTION>
NUMBER OF DATE OF
SHARES INVESTMENT ACQUISITION COST
-------------- ------------------------------------------ --------------- ----------
<S> <C> <C> <C>
10,000 Fubon Insurance Company (144A) (GDR)(Taiwan) 04/08/98 $ 143,357
</TABLE>
The total value of restricted securities is $126,250, which represents 1.5% of
net assets of the Fund at October 31, 1998.
TCW GALILEO EMERGING MARKETS EQUITIES FUND:
<TABLE>
<CAPTION>
NUMBER OF DATE OF
SHARES INVESTMENT ACQUISITION COST
------------ --------------------------------------------------- ---------------- -------
<S> <C> <C> <C>
6,800 Fubon Insurance Company (144A) (GDR) (Taiwan) 05/05/98 $ 98,357
14,600 Mahanagar Telephone Nigam, Limited (144A) (GDR) (India) 12/04/97 174,587
15,283 Mol Magyar Olaj-es Gazipari Rt. (144A) (GDR) (Hungary) 10/17/97 326,952
9,500 Suez Cement Company (144A) (GDR) (Egypt) 07/14/97 191,425
</TABLE>
The total value of restricted securities is $733,423, which represents 3.9% of
net assets of the Fund at October 31, 1998.
50
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
October 31, 1998
TCW GALILEO EMERGING MARKETS INCOME FUND:
<TABLE>
<CAPTION>
PRINCIPAL DATE OF
AMOUNT INVESTMENT ACQUISITION COST
- -------------- ------------------------------------------------------------- ----------- --------
<S> <C> <C> <C>
$335,000 Cellco Finance N.V., (144A), 15% due 08/01/05 (Turkey) 08/11/98 $ 328,300
75,000 Cellco Finance N.V., (Reg. S), 15% due 08/01/05 (Turkey) 10/30/98 59,344
560,000 Cemex International Capital, LLC, (Reg. S), 9.66%, due 11/29/99,
Par Put 05/15/05 (Mexico) 10/14/98 471,800
535,000 CSN Iron, S.A., (Reg. S), 9.125%, due 06/01/07 (Brazil) 10/19/98 315,616
575,000 Globopar Communications, (Reg. S), 10.625%, due 12/05/08 (Brazil) 10/16/98 302,406
735,000 JG Summit Philippines, (Reg. S), 8.375%, due 03/17/04 (Philippines) 02/03/98 522,713
410,000 Republic of Ecuador, (Reg. S), Variable Rate based on Six Month
LIBOR + 4.75%, due 04/25/04 (Ecuador) 10/22/98 277,347
935,000 Republic of Turkey, (Reg. S), 9.875%, due 02/23/05 (Turkey) 08/11/98 831,663
785,000 Russian Federation, (144A), 11%, due 07/24/18 (Russia) 07/20/98 497,316
820,000 Russian Federation, (144A), 12.75%, due 06/24/28,
Par Put 06/24/08 (Russia) 07/23/98 727,340
4,970,000 Russian Federation, (Reg. S), 12.75%, due 06/24/28,
Par Put 06/24/08 (Russia) 08/18/98 1,232,231
</TABLE>
The total value of restricted securities is $4,017,588, which represents 13.4%
of net assets of the Fund at October 31, 1998.
51
<PAGE>
TCW GALILEO ASIA PACIFIC EQUITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
Year Ended October 31, (Commencement of
--------------------------------------------------- Operations) through
1998 1997 1996 1995 October 31, 1994
-------- -------- -------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 7.37 $ 9.61 $ 8.67 $ 10.19 $ 10.00
------- -------- ------- ----------- ------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.02 (0.01) 0.06 0.06 0.03
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency (1.04) (2.10) 0.93 (1.19) 0.16
------- -------- ------- ----------- ------------------
Total from Investment Operations (1.02) (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 (1.26) - - (0.16) -
------- ------- ------- ----------- ------------------
Total Distributions (1.26) (0.13) (0.05) (0.39) -
------- ------- ------- ----------- ------------------
Net Asset Value per Share, End of Period $ 5.09 $ 7.37 $ 9.61 $ 8.67 $ 10.19
======= ======= ======= =========== ==================
Total Return (14.80)% (22.40)% 11.36% (10.98)% 1.90%/(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 8,482 $21,327 $48,266 $ 46,709 $ 54,019
Ratio of Expenses to Average Net Assets 2.48% 1.49% 1.43% 1.47% /(3)/ 1.40% /(2)(3)/
Ratio of Net Investment Income (Loss) to
Average Net Assets 0.36% (0.02)% 0.66% 0.74% 0.45% /(2)/
Portfolio Turnover Rate 190.33% 81.92% 84.81% 102.01% 46.75% /(1)/
</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.
52
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EMERGING MARKETS EQUITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
March 1, 1994
Year Ended October 31, (Commencement of
---------------------------------------------------- Operations) through
1998 1997 1996 1995 October 31, 1994
-------- ------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 8.32 $ 8.18 $ 7.19 $ 9.73 $ 10.00
-------- ------- -------- -------- -------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.09 0.03 0.07 0.04 (0.01)
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency (2.83) 0.22 0.94 (2.58) (0.26)
-------- ------- -------- -------- -------------------
Total from Investment Operations (2.74) 0.25 1.01 (2.54) (0.27)
-------- ------- -------- --------- -------------------
Less Distributions:
Distributions from Net Investment Income (0.01) (0.11) (0.02) - -
-------- ------- -------- --------- -------------------
Net Asset Value per Share, End of Period $ 5.57 $ 8.32 $ 8.18 $ 7.19 $ 9.73
======== ======= ======== ========= ==================
Total Return (32.97)% 2.82% 14.14% (26.11)% (2.70)%/(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 18,763 $47,726 $ 57,639 $ 51,873 $ 70,212
Ratio of Expenses to Average Net Assets 1.70% 1.50% 1.41% 1.55% 1.70% /(2)/
Ratio of Net Investment Income (Loss) to
Average Net Assets 1.15% 0.36% 0.82% 0.54% (0.09)% /(2)/
Portfolio Turnover Rate 102.28% 79.80% 83.76% 74.24% 61.28% /(1)/
</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.
53
<PAGE>
TCW GALILEO EMERGING MARKETS INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
June 3, 1998
(Commencement of
Operations) through
October 31, 1998
--------------------
<S> <C>
Net Asset Value per Share, Beginning
of Period $ 10.00
----------------
Income (Loss) from Investment Operations:
Net Investment Income 0.37
Net Realized and Unrealized (Loss)
on Investments and Foreign Currency (3.41)
----------------
Total from Investment Operations (3.04)
----------------
Less Distributions:
Distributions from Net Investment Income (0.37)
Distributions in Excess of Net Investment Income (0.01)
----------------
Total Distributions (0.38)
----------------
Net Asset Value per Share, End of Period $ 6.58
================
Total Return (30.67)%/(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 30,090
Ratio of Expenses to Average Net Assets 1.53% /(2)/
Ratio of Net Investment Income to
Average Net Assets 11.90% /(2)/
Portfolio Turnover Rate 68.46% /(1)/
</TABLE>
(1) For the period June 3, 1998 (commencement of operations) through October 31,
1998 and not indicative of a full year's operating results.
(2) Annualized.
54
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO EUROPEAN EQUITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
NOVEMBER 3,1997
(COMMENCEMENT OF
OPERATIONS) THROUGH
OCTOBER 31, 1998
--------------------
<S> <C>
Net Asset Value per Share, Beginning
of Period $ 10.00
------------------
Income from Investment Operations:
Net Investment Income 0.06
Net Realized and Unrealized Gain
on Investments and Foreign Currency 1.64
------------------
Total from Investment Operations 1.70
------------------
Net Asset Value per Share, End of Period $ 11.70
==================
Total Return 17.00% /(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 63,994
Ratio of Expenses to Average Net Assets 1.06% /(2)/
Ratio of Net Investment Income to
Average Net Assets 0.52% /(2)/
Portfolio Turnover Rate 72.05% /(1)/
</TABLE>
(1) For the period November 3, 1997 (commencement of operations) through October
31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
55
<PAGE>
TCW GALILEO INTERNATIONAL EQUITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
NOVEMBER 3, 1997
(COMMENCEMENT OF
OPERATIONS) THROUGH
OCTOBER 31, 1998
---------------------
<S> <C>
Net Asset Value per Share, Beginning
of Period $ 10.00
----------
Income from Investment Operations:
Net Investment Income 0.05
Net Realized and Unrealized Gain
on Investments 0.70
----------
Total from Investment Operations 0.75
----------
Net Asset Value per Share, End of Period $ 10.75
==========
Total Return 7.50%/(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 74,853
Ratio of Expenses to Average Net Assets 0.17%/(2)/
Ratio of Net Investment Income to
Average Net Assets 0.50%/(2)/
Portfolio Turnover Rate 21.12%/(1)/
</TABLE>
(1) For the period November 3, 1997 (commencement of operations) through October
31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
56
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TCW GALILEO JAPANESE EQUITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
NOVEMBER 3, 1997
(COMMENCEMENT OF
OPERATIONS) THROUGH
OCTOBER 31, 1998
---------------------
<S> <C>
Net Asset Value per Share, Beginning
of Period $ 10.00
----------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.04)
Net Realized and Unrealized (Loss)
on Investments and Foreign Currency (1.46)
----------
Total from Investment Operations (1.50)
----------
Less Distributions:
Distributions from Net Investment Income (0.07)
----------
Net Asset Value per Share, End of Period $ 8.43
==========
Total Return (14.88)%/(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 28,648
Ratio of Net Expenses to Average Net Assets 1.20%/(2)/(3)/
Ratio of Net Investment (Loss) to
Average Net Assets (0.48)%/(2)/
Portfolio Turnover Rate 178.53%/(1)/
</TABLE>
(1) For the period November 3, 1997 (commencement of operations) through October
31, 1998 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 October 31, 1998. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.51% for the period November 3, 1997 (commencement of operations) through
October 31, 1998.
57
<PAGE>
TCW GALILEO LATIN AMERICA EQUITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
Year Ended October 31, Ten Months
------------------------------------------------ Ended
1998 1997 1996 1995 October 31, 1994
---------- ---------- ---------- --------- ------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share, Beginning
of Period $ 12.51 $ 10.01 $ 7.92 $ 14.99 $ 15.11
-------- -------- ------- -------- --------
Income (Loss) from Investment Operations:
Net Investment Income 0.13 0.11 0.11 0.06 0.01
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency (3.80) 2.50 2.03 (5.92) (0.13)
-------- -------- ------- -------- --------
Total from Investment Operations (3.67) 2.61 2.14 (5.86) (0.12)
-------- -------- ------- -------- --------
Less Distributions:
Distributions from Net Investment Income (0.27) (0.11) (0.05) - -
Distributions in Excess of Net Realized
Gains - - - (1.21) -
-------- -------- ------- -------- --------
Total Distributions (0.27) (0.11) (0.05) (1.21) -
-------- -------- ------- -------- --------
Net Asset Value per Share, End of Period $ 8.57 $ 12.51 $ 10.01 $ 7.92 $ 14.99
======== ======== ======= ======== ========
Total Return (29.95)% 26.24% 27.08% (40.95)% (0.79)% /(1)/
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) $ 11,796 $ 55,336 $ 68,323 $ 38,942 $122,610
Ratio of Expenses to Average Net Assets 1.64% 1.46% 1.44% 1.58% 1.36% /(2)/
Ratio of Net Investment Income to Average
Net Assets 1.13% 0.87% 1.12% 0.59% 0.11% /(2)/
Portfolio Turnover Rate 32.33% 21.17% 44.32% 75.62% 143.65% /(1)/
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) Annualized.
58
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
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 Asia Pacific Equities Fund, TCW
Galileo Emerging Markets Equities Fund, TCW Galileo Emerging Markets Income
Fund, TCW Galileo European Equities Fund, TCW Galileo International Equities
Fund, TCW Galileo Japanese Equities Fund, and TCW Galileo Latin America Equities
Fund (the "Galileo International Funds")(seven of twenty-one funds comprising
TCW Galileo Funds, Inc.) as of October 31, 1998 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, 1998 and 1997, and the financial
highlights for each of the respective periods in the periods ended October 31,
1998. 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 on 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, 1998 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 each
of the respective Galileo International Funds as of October 31, 1998 and the
results of their operations, the changes in their net assets, the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
December 22, 1998
Los Angeles, California
59
<PAGE>
SHAREHOLDER INFORMATION
- -----------------------
DIRECTORS AND OFFICERS INVESTMENT ADVISER
Marc I. Stern TCW Funds Management, Inc.
Director and Chairman of the Board 865 South Figueroa Street
Los Angeles, California 90017
(213) 244-0000
Thomas E. Larkin, Jr.
Director and President
John C. Argue SUB-ADVISERS
Director
TCW Asia Limited
Suite 1308, One Pacific Place
Norman Barker, Jr. 88 Queensway
Director Hong Kong
Richard W. Call TCW London International, Limited
Director 16 Charles II Street
London, England SW1Y4QU
Alvin R. Albe, Jr.
Senior Vice President
CUSTODIAN
Michael E. Cahill BNY Western Trust Company
Senior Vice President, 700 South Flower Street
General Counsel and Assistant Secretary Suite 200
Los Angeles, California 90017
Philip K. Holl
Secretary
TRANSFER AGENT
Marie M. Bender DST Systems, Inc.
Assistant Secretary 811 Main Street
Kansas City, Missouri 64105
Hilary G.D. Lord
Assistant Secretary
DISTRIBUTOR
Peter C. DiBona TCW Brokerage Services
Treasurer 865 South Figueroa Street
Los Angeles, California 90017
(213) 244-0000
INDEPENDENT AUDITORS
Deloitte & Touche llp
1000 Wilshire Boulevard
Los Angeles, California 90017
60
<PAGE>
TCW GALILEO FUNDS, INC.
(INTERNATIONAL)
TAX INFORMATION NOTICE (UNAUDITED)
----------------------------------
On account of the year ended October 31, 1998, the following funds paid capital
gain distributions within the meaning 852 (b)(3)(c) of the Internal Revenue
Code. The Fund designated as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.
AMOUNTS PER
FUND SHARE
------ ---------------
TCW Galileo European Equities Fund $ 0.33
This information is given to meet certain requirements of the Internal Revenue
Code and should not be used by shareholders for preparing their income returns.
For income tax preparation purposes, please refer to the calendar year end
information you will receive from the Fund's transfer agent in January 1999.
61
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK.
62
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK.
63
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK.
64
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> TCW GALILEO LATIN AMERICA EQUITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 12,732
<INVESTMENTS-AT-VALUE> 11,969
<RECEIVABLES> 269
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,238
<PAYABLE-FOR-SECURITIES> 285
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 157
<TOTAL-LIABILITIES> 442
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,397
<SHARES-COMMON-STOCK> 1,376
<SHARES-COMMON-PRIOR> 4,425
<ACCUMULATED-NII-CURRENT> 648
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,486)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (763)
<NET-ASSETS> 11,796
<DIVIDEND-INCOME> 815
<INTEREST-INCOME> 48
<OTHER-INCOME> 0
<EXPENSES-NET> 512
<NET-INVESTMENT-INCOME> 351
<REALIZED-GAINS-CURRENT> 3,972
<APPREC-INCREASE-CURRENT> (12,359)
<NET-CHANGE-FROM-OPS> (8,036)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 595
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,124
<NUMBER-OF-SHARES-REDEEMED> 4,201
<SHARES-REINVESTED> 28
<NET-CHANGE-IN-ASSETS> (43,540)
<ACCUMULATED-NII-PRIOR> 892
<ACCUMULATED-GAINS-PRIOR> (14,458)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 313
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 512
<AVERAGE-NET-ASSETS> 29,398
<PER-SHARE-NAV-BEGIN> 12.51
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> (3.80)
<PER-SHARE-DIVIDEND> 0.27
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.57
<EXPENSE-RATIO> 1.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> TCW GALILEO EMERGING MARKETS EQUITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 20,331
<INVESTMENTS-AT-VALUE> 18,383
<RECEIVABLES> 1,395
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19,778
<PAYABLE-FOR-SECURITIES> 934
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 81
<TOTAL-LIABILITIES> 1,015
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 33,211
<SHARES-COMMON-STOCK> 3,368
<SHARES-COMMON-PRIOR> 5,738
<ACCUMULATED-NII-CURRENT> 451
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,951)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,948)
<NET-ASSETS> 18,763
<DIVIDEND-INCOME> 765
<INTEREST-INCOME> 164
<OTHER-INCOME> 0
<EXPENSES-NET> 554
<NET-INVESTMENT-INCOME> 375
<REALIZED-GAINS-CURRENT> (7,931)
<APPREC-INCREASE-CURRENT> (3,247)
<NET-CHANGE-FROM-OPS> (10,803)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 34
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,730
<NUMBER-OF-SHARES-REDEEMED> 4,103
<SHARES-REINVESTED> 3
<NET-CHANGE-IN-ASSETS> (28,963)
<ACCUMULATED-NII-PRIOR> 110
<ACCUMULATED-GAINS-PRIOR> (5,020)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 327
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 554
<AVERAGE-NET-ASSETS> 31,645
<PER-SHARE-NAV-BEGIN> 8.32
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> (2.83)
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.57
<EXPENSE-RATIO> 1.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> TCW GALILEO ASIA PACIFIC EQUITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 8,134
<INVESTMENTS-AT-VALUE> 8,561
<RECEIVABLES> 17
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,578
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 96
<TOTAL-LIABILITIES> 96
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,663
<SHARES-COMMON-STOCK> 1,665
<SHARES-COMMON-PRIOR> 2,892
<ACCUMULATED-NII-CURRENT> (5,415)
<OVERDISTRIBUTION-NII> (193)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 427
<NET-ASSETS> 8,482
<DIVIDEND-INCOME> 195
<INTEREST-INCOME> 123
<OTHER-INCOME> 0
<EXPENSES-NET> 278
<NET-INVESTMENT-INCOME> 40
<REALIZED-GAINS-CURRENT> (7,018)
<APPREC-INCREASE-CURRENT> 3,769
<NET-CHANGE-FROM-OPS> (3,209)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 2,465
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,605
<NUMBER-OF-SHARES-REDEEMED> 3,273
<SHARES-REINVESTED> 441
<NET-CHANGE-IN-ASSETS> (12,845)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,068
<OVERDISTRIB-NII-PRIOR> 233
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 112
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 278
<AVERAGE-NET-ASSETS> 10,582
<PER-SHARE-NAV-BEGIN> 7.37
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> (1.04)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.26
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.09
<EXPENSE-RATIO> 2.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> TCW GALILEO EUROPEAN EQUITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 56,951
<INVESTMENTS-AT-VALUE> 64,253
<RECEIVABLES> 173
<ASSETS-OTHER> 5
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 64,431
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 437
<TOTAL-LIABILITIES> 437
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 54,700
<SHARES-COMMON-STOCK> 5,471
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 284
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,708
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,302
<NET-ASSETS> 63,994
<DIVIDEND-INCOME> 798
<INTEREST-INCOME> 70
<OTHER-INCOME> 0
<EXPENSES-NET> 584
<NET-INVESTMENT-INCOME> 284
<REALIZED-GAINS-CURRENT> 1,708
<APPREC-INCREASE-CURRENT> 3,856
<NET-CHANGE-FROM-OPS> 5,848
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,973
<NUMBER-OF-SHARES-REDEEMED> 502
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 63,994
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 412
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 584
<AVERAGE-NET-ASSETS> 55,739
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 1.64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.70
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> TCW GALILEO JAPANESE EQUITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 28,591
<INVESTMENTS-AT-VALUE> 27,474
<RECEIVABLES> 1,221
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 28,701
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 53
<TOTAL-LIABILITIES> 53
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,399
<SHARES-COMMON-STOCK> 3,398
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 126
<ACCUMULATED-NET-GAINS> (5,508)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,117)
<NET-ASSETS> 28,648
<DIVIDEND-INCOME> 70
<INTEREST-INCOME> 42
<OTHER-INCOME> 0
<EXPENSES-NET> 186
<NET-INVESTMENT-INCOME> (74)
<REALIZED-GAINS-CURRENT> (5,508)
<APPREC-INCREASE-CURRENT> 4,310
<NET-CHANGE-FROM-OPS> (1,272)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 52
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,774
<NUMBER-OF-SHARES-REDEEMED> 384
<SHARES-REINVESTED> 8
<NET-CHANGE-IN-ASSETS> 28,648
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 116
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 235
<AVERAGE-NET-ASSETS> 16,038
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> (1.46)
<PER-SHARE-DIVIDEND> 0.07
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.43
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 16
<NAME> TCW GALILEO INTERNATIONAL EQUITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 70,568
<INVESTMENTS-AT-VALUE> 74,873
<RECEIVABLES> 17
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,897
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 44
<TOTAL-LIABILITIES> 44
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 70,953
<SHARES-COMMON-STOCK> 6,961
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 346
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (751)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,305
<NET-ASSETS> 74,853
<DIVIDEND-INCOME> 426
<INTEREST-INCOME> 39
<OTHER-INCOME> 0
<EXPENSES-NET> 119
<NET-INVESTMENT-INCOME> 346
<REALIZED-GAINS-CURRENT> (751)
<APPREC-INCREASE-CURRENT> 4,305
<NET-CHANGE-FROM-OPS> 3,900
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,867
<NUMBER-OF-SHARES-REDEEMED> 906
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 74,853
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 119
<AVERAGE-NET-ASSETS> 66,781
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.70
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.75
<EXPENSE-RATIO> 0.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 21
<NAME> TCW GALILEO EMERGING MARKETS INCOME FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> JUN-01-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 33,973
<INVESTMENTS-AT-VALUE> 30,082
<RECEIVABLES> 6,134
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36,216
<PAYABLE-FOR-SECURITIES> 5,802
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 324
<TOTAL-LIABILITIES> 6,126
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,619
<SHARES-COMMON-STOCK> 4,570
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 6
<ACCUMULATED-NET-GAINS> (6,632)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,891)
<NET-ASSETS> 30,090
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,279
<OTHER-INCOME> 0
<EXPENSES-NET> 146
<NET-INVESTMENT-INCOME> 1,133
<REALIZED-GAINS-CURRENT> (6,632)
<APPREC-INCREASE-CURRENT> (3,087)
<NET-CHANGE-FROM-OPS> (8,586)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,133
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 6
<NUMBER-OF-SHARES-SOLD> 4,693
<NUMBER-OF-SHARES-REDEEMED> 238
<SHARES-REINVESTED> 115
<NET-CHANGE-IN-ASSETS> 30,090
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 71
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 146
<AVERAGE-NET-ASSETS> 24,224
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> (3.41)
<PER-SHARE-DIVIDEND> 0.38
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.58
<EXPENSE-RATIO> 1.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
