<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Table of Contents April 30, 1999
<TABLE>
<S> <C>
Letter To Shareholders...................................................... 1
Performance Summary......................................................... 2
Schedules of Investments
TCW Galileo Money Market Fund............................................. 3
TCW Galileo Core Fixed Income Fund........................................ 5
TCW Galileo High Yield Bond Fund.......................................... 13
TCW Galileo Mortgage-Backed Securities Fund............................... 21
TCW Galileo Total Return Mortgage-Backed Securities Fund.................. 24
Statements of Assets and Liabilities........................................ 28
Statements of Operations.................................................... 29
Statements of Changes in Net Assets......................................... 30
Notes to Financial Statements............................................... 33
Financial Highlights........................................................ 46
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
To Our Shareholders
We are pleased to submit the April 30, 1999 Semi-Annual Reports for the TCW
Galileo Funds. In our new format, we have separated our reports into three cat-
egories; 1) U.S. Equities Funds, 2) U.S. Fixed Income Funds, and 3) Interna-
tional Funds to provide more focused information to our shareholders.
TCW is committed to providing you with superior professional investment manage-
ment and distinctive personal service through the TCW Galileo Funds. On March
1, 1999, we created an additional class of shares (N class) on nine of our Gal-
ileo Funds.
Now individuals can purchase our Select Equities Fund, Aggressive Growth Equi-
ties Fund, Large Cap Growth Fund, Large Cap Value Fund, Small Cap Growth Fund,
European Equities Fund, Core Fixed Income Fund, High Yield Bond Fund or Total
Return Mortgage-Backed Securities Fund with a low initial investment of $2,000.
The Galileo Mutual Funds continue to provide our clients with targeted invest-
ment strategies featuring daily liquidity, competitive management fees and no
front end loads, or deferred sales charges.
Please call our Shareholder Services 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
June 7, 1999
1
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
PERFORMANCE SUMMARY (Unaudited) April 30, 1999
<TABLE>
<CAPTION>
Total Return -- Annualized
As of April 30, 1999
--------------------------------------
Latest 12-Months Latest Since Inception
NAV Ended April 30, 1999 5-Year Inception Date
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TCW Galileo Money Market
Fund $1.00 5.04% 5.19% 5.65% (/1/) 07/14/88 (/2/)
TCW Galileo Core Fixed
Income
Fund -- Institutional
Class $9.77 6.88% 7.13% 7.41% (/1/) 01/01/90 (/2/)
TCW Galileo Core Fixed
Income
Fund -- Advisory Class $9.84 N/A N/A 1.03% (/3/) 03/01/99
TCW Galileo High Yield
Bond
Fund -- Institutional
Class $9.52 3.36% 9.82% 10.49% (/1/) 02/01/89 (/2/)
TCW Galileo High Yield
Bond
Fund -- Advisory Class $9.58 N/A N/A 2.69% (/3/) 03/01/99
TCW Galileo Mortgage-
Backed Securities Fund $9.62 4.65% 6.43% 6.69% (/1/) 02/01/90 (/2/)
TCW Galileo Total Return
Mortgage-Backed
Securities
Fund -- Institutional
Class $9.40 6.51% 8.88% 7.05% 06/17/93
TCW Galileo Total Return
Mortgage- Backed
Securities Fund --
Advisory Class $9.54 N/A N/A 1.49% (/3/) 03/01/99
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the TCW Galileo Funds' registration became ef-
fective. The predecessor limited partnerships were not registered under the
Investment Company Act of 1940, as amended ("1940 Act"), and, therefore
were not subject to certain investment restrictions that are imposed by the
1940 Act. If the limited partnership had been registered under the 1940
Act, the limited partnership's performance may have been lower.
(2) Inception date of predecessor limited partnership.
(3) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999 and not indicative of a full year's operat-
ing results.
2
<PAGE>
TCW Galileo Money Market Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- Agency Fixed Income Securities (15.6% of Net Assets) -----------
<S> <C> <C>
$ 5,000,000 Federal Farm Credit Bank, 5.5%, due 08/03/99 $ 5,001,217
10,000,000 Federal Home Loan Bank, Floating Rate Note,
4.917%, due 04/07/00 9,996,337
7,500,000 Federal National Mortgage Association,
5.63%, due 05/05/99 7,500,493
10,000,000 Student Loan Marketing Association,
4.72%, due 11/04/99 9,999,999
-----------
Total Agency Fixed Income Securities (Cost: $32,498,046) 32,498,046
-----------
Commercial Paper (66.7%)
8,000,000 American Express Credit Corp., 4.78%, due 05/10/99 7,990,440
10,000,000 American General Finance Corp.,
4.92%, due 05/03/99 9,997,267
500,000 Bellsouth Telecom Inc., 4.97%, due 05/03/99 499,862
10,000,000 BP America, Inc., 4.9%, due 05/03/99 9,997,277
3,200,000 Florida Power Corp., 4.74%, due 05/06/99 3,197,893
8,000,000 Ford Motor Credit Corp., 4.86%, due 05/07/99 7,993,520
10,000,000 General Electric Capital Corp., 4.94%, due 05/03/99 9,997,256
8,000,000 General Motors Acceptance Corp.,
4.79%, due 05/04/99 7,996,807
10,000,000 Goldman Sachs Group, 4.8%, due 05/28/99 9,964,000
10,000,000 Nationsbank N.A., 5%, due 01/05/00 9,998,314
5,000,000 Paccar Financial Corp., 4.8%, due 05/06/99 4,996,667
8,000,000 Pacific Mutual Life, 4.78%, due 05/18/99 7,981,942
1,200,000 Prudential Funding Corp., 4.81%, due 05/04/99 1,199,519
10,000,000 Riverwoods Funding Corp., 4.81%, due 06/01/99 9,958,581
9,000,000 Salomon Smith Barney, 4.7%, due 05/03/99 8,997,650
5,500,000 Sara Lee Corp., 4.78%, due 05/06/99 5,496,349
4,555,000 Shell Oil Co., 4.8%, due 05/26/99 4,539,817
3,900,000 Transamerica Corp., 4.79%, due 06/04/99 3,882,357
4,689,000 United Parcel Service of America, Inc.,
5.05%, due 05/03/99 4,687,684
9,600,000 USAA Capital Corp., 4.82%, due 06/04/99 9,556,299
-----------
Total Commercial Paper (Cost: $138,929,501) 138,929,501
-----------
</TABLE>
3
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Money Market Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- Corporate Fixed Income Securities (17.6%) ------------
<S> <C> <C>
$ 3,000,000 Associates Corp. of North America,
7.25%, due 09/01/99 $ 3,018,839
4,000,000 Associates Corp. of North America,
9.125%, due 04/01/00 4,137,997
4,000,000 CIT Group Inc., 6.8%, due 04/17/00 4,057,905
5,000,000 IBM Credit Corp., 5.68%, due 05/07/99 4,999,955
10,000,000 International Lease Finance Corp.,
6.375%, due 01/18/00 10,101,098
2,125,000 Merrill Lynch & Company, Inc., 5.765%, due 06/10/99 2,125,860
3,250,000 Merrill Lynch & Company, Inc., 6.2%, due 07/19/99 3,255,766
5,000,000 Morgan Stanley Group, 7.5%, due 09/01/99 5,036,900
------------
Total Corporate Fixed Income Securities (Cost: $36,734,320) 36,734,320
------------
Total Investments (Cost: $208,161,867) (99.9%) 208,161,867
Excess of Other Assets Over Liabilities (0.1%) 233,610
------------
Net Assets (100.0%) $208,395,477
============
</TABLE>
4
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Fixed Income Securities Value
--------- ----------------------- ---------
<S> <C> <C>
Corporate Bonds (31.3% of Net Assets)
Aerospace/Defense (0.4%)
$ 50,000 BE Aerospace, Inc., (144A), 9.5%, due 11/01/08 $ 53,125*
250,000 United Technologies Corp., 6.7%, due 08/01/28 246,723
---------
Total Aerospace/Defense 299,848
---------
Automotive (0.4%)
75,000 American Axle & Manufacturing, Inc.,
(144A), 9.75%, due 03/01/09 77,813*
150,000 Delphi Automotive Systems Corp., 6.125%, due 05/01/04 148,994
95,000 Hayes Lemmerz International, Inc.,
(144A), 8.25%, due 12/15/08 95,950*
---------
Total Automotive 322,757
---------
Banking & Financial Services (5.3%)
400,000 Abbey National PLC, 6.69%, due 10/17/05 408,000
200,000 AmeriCredit Corp., 9.875%, due 04/15/06 203,000
150,000 Bear Stearns Companies, Inc., 6.75%, due 12/15/07 151,125
100,000 Citicorp, 6.375%, due 01/15/06 99,875
400,000 Corporation Andina De Fomento, 7.75%, due 03/01/04 409,500
500,000 Finova Capital Corp., 6.11%, due 02/18/03 496,175
500,000 General Electric Capital Corp., 5.77%, due 08/27/01 502,500
200,000 International Lease Financial Corp.,
5.75%, due 01/15/03 198,744
350,000 Korea Development Bank, 7.125%, due 04/22/04 346,360
500,000 Lehman Brothers Holdings Inc., 6.625%, due 04/01/04 500,590
250,000 National Rural Utilities Cooperative Finance Corp.,
5.75%, due 12/01/08 240,938
100,000 NationsBank Corp., 7.5%, due 09/15/06 106,125
500,000 PNC Funding Corp., 6.5%, due 05/01/08 501,875
60,000 Security Pacific Corp., 11.5%, due 11/15/00 64,950
---------
Total Banking & Financial Services 4,229,757
---------
Chemicals (1.9%)
150,000 General Chemical Industrial Products,
10.625%, due 05/01/09 153,375
5,000 GEO Specialty Chemicals, Inc., (144A),
10.125%, due 08/01/08 5,038*
350,000 Huntsman Corp., (144A), 9.5%, due 07/01/07 343,000*
600,000 IMC Global Inc., (144A), 6.5%, due 08/01/03 594,210*
250,000 Millennium America, Inc., 7.625%, due 11/15/26 225,815
100,000 Scotts Co., (144A), 8.625%, due 01/15/09 103,625*
75,000 Texas Petrochemicals Corp., 11.125%, due 07/01/06 65,250
---------
Total Chemicals 1,490,313
---------
</TABLE>
5
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Commercial Services (0.7%)
$ 50,000 Anthony Crane Rentals, L.P., 10.375%, due 08/01/08 $ 51,000
50,000 Iron Mountain, Inc., 8.25%, due 07/01/11 50,125
25,000 Iron Mountain, Inc., 8.75%, due 09/30/09 25,625
20,000 Iron Mountain, Inc., 10.125%, due 10/01/06 21,725
40,000 Pierce Leahy, 8.125%, due 05/15/08 39,400
100,000 Protection One Alarm Monitoring, Inc.,
7.375%, due 08/15/08 99,519
75,000 Rental Service Corp., 9.0%, due 05/15/08 75,563
150,000 UIH Australia/Pacific, Inc., 0.0%, due 05/15/06 108,000
50,000 Williams Scotsman, Inc., 9.875%, due 06/01/07 51,875
------------
Total Commercial Services 522,832
------------
Computer Services (0.2%)
150,000 Pitney Bowes, Inc., 5.95%, due 02/01/05 150,375
------------
Construction (0.5%)
200,000 Atrium Companies, Inc., 10.5%, due 11/15/06 214,000
50,000 D.R. Horton, Inc., 8%, due 02/01/09 49,500
75,000 Hovnanian Enterprises, Inc., 9.125%, due 05/01/09 75,000
75,000 NCI Building Systems, Inc., (144A),
9.25%, due 05/01/09 75,690*
------------
Total Construction 414,190
------------
Containers & Packaging (0.3%)
50,000 Anchor Glass Container Corp., 9.875%, due 03/15/08 46,500
25,000 Consumers International, Inc., 10.25%, due 04/01/05 26,250
75,000 Consumers Packaging, Inc., (144A), 9.75%, due 02/01/07 76,875*
50,000 Packaged Ice, Inc., 9.75%, due 02/01/05 50,750
50,000 U.S. Can Corp., Series B, 10.125%, due 10/15/06 53,250
------------
Total Containers & Packaging 253,625
------------
Cosmetics & Household Products (0.1%)
75,000 Chattem, Inc., 8.875%, due 04/01/08 75,937
------------
Electronics (1.4%)
600,000 Ametek, Inc., 7.2%, due 07/15/08 576,000
200,000 International Wire Group, Inc., 11.75%, due 06/01/05 211,500
200,000 Litton Industries, Inc., 6.05%, due 04/15/03 197,000
130,000 Viasystems, Inc., 9.75%, due 06/01/07 120,900
------------
Total Electronics 1,105,400
------------
Energy & Oil Services (2.5%)
300,000 Enserch Corp., 7.125%, due 06/15/05 309,750
100,000 Forest Oil Corp., 10.5%, due 01/15/06 103,750
100,000 Grey Wolf, Inc., 8.875%, due 07/01/07 85,000
25,000 Gulf Canada Resources, Ltd., 9.25%, due 01/15/04 25,399
</TABLE>
6
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Energy & Oil Services (Continued)
$ 250,000 Occidental Petroleum Corp., 7.65%, due 02/15/06 $ 258,823
100,000 P&L Coal Holdings Corp., 8.875%, due 05/15/08 104,000
500,000 Phillips Petroleum Co., 6.375%, due 03/30/09 495,250
150,000 R&B Falcon Corp., 9.5%, due 12/15/08 141,000
150,000 Sonat, Inc., 6.75%, due 10/01/07 151,688
100,000 Trans-Canada Pipelines, Ltd., 7.06%, due 10/14/25 98,875
200,000 Transcontinental Gas Pipe Lines, 6.25%, due 01/15/08 197,250
------------
Total Energy & Oil Services 1,970,785
------------
Entertainment & Leisure (1.7%)
200,000 Florida Panthers Holdings, Inc., 9.875%, due 04/15/09 200,750
100,000 Harrahs Operating Company, Inc., 7.875%, due 12/15/05 101,000
100,000 Hollywood Park, Inc., (144A), 9.25%, due 02/15/07 102,625*
100,000 Marvel Enterprises, Inc., (144A), 12%, due 06/15/09 103,000*
15,000 Park Place Entertainment Corp., (144A),
7.875%, due 12/15/05 14,700*
75,000 Regal Cinemas, Inc., 9.5%, due 06/01/08 74,625
125,000 SFX Entertainment, Inc., (144A), 9.125%, due 12/01/08 128,750*
500,000 Station Casinos, Inc., (144A), 9.75%, due 04/15/07 530,000*
100,000 Station Casinos, Inc., 10.125%, due 03/15/06 107,000
------------
Total Entertainment & Leisure 1,362,450
------------
Foods, Hotels & Restaurants (0.5%)
150,000 Di Giorgio Corp., 10%, due 06/15/07 148,500
100,000 ITT Corp., 7.375%, due 11/15/15 90,985
50,000 Mrs. Fields Original Cookies, Inc.,
(144A), 10.125%, due 12/01/04 47,250*
100,000 New World Pasta Co., (144A), 9.25%, due 02/15/09 101,500*
------------
Total Foods, Hotels & Restaurants 388,235
------------
Health Care (0.4%)
10,000 Dade International, Inc., 11.125%, due 05/01/06 11,050
125,000 Insight Health Services Corp., 9.625%, due 06/15/08 128,125
100,000 Magellan Health Services, Inc., 9%, due 02/15/08 84,500
50,000 Prime Medical Services, Inc., 8.75%, due 04/01/08 49,500
------------
Total Health Care 273,175
------------
Household Products (0.1%)
29,000 Boyds Collection Ltd., (144A), 9%, due 05/15/08 30,740*
------------
Insurance (0.1%)
75,000 United Industries Corp., (144A), 9.875%, due 04/01/09 78,375*
------------
Machinery (0.3%)
25,000 Federal Mogul Corp., 7.875%, due 07/01/10 24,867
220,000 Insilco Corp., (144A), 12%, due 08/15/07 220,000*
------------
Total Machinery 244,867
------------
</TABLE>
7
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Media -- Broadcasting & Publishing (1.6%)
$ 25,000 Adelphia Communications Corp., 8.375%, due 02/01/08 $ 25,625
75,000 American Media Operations, Inc., (144A),
10.25%, due 05/01/09 75,885*
500,000 Chancellor Media Corp., (144A), 8%, due 11/01/08 516,250*
125,000 Chancellor Media Corp., 8.75%, due 06/15/07 128,750
75,000 Chancellor Media Corp., (144A), 9%, due 10/01/08 80,438*
100,000 Charter Communications Holdings, LLC, (144A),
0%, due 04/01/11 66,125*
75,000 Classic Cable, Inc., (144A), 9.875%, due 08/01/08 80,438*
100,000 EchoStar DBS Corp., (144A), 9.375%, due 02/01/09 104,500*
20,000 Garden State Newspapers, Inc., (144A),
8.625%, due 07/01/11 20,300*
50,000 Primedia, Inc., 7.625%, due 04/01/08 50,250
50,000 STC Broadcasting, Inc., 11%, due 03/15/07 53,125
25,000 Von Hoffmann Press, Inc., (144A), 10.875%, due 05/15/07 25,750*
------------
Total Media -- Broadcasting & Publishing 1,227,436
------------
Metals (0.5%)
100,000 AK Steel Corp., (144A), 7.875%, due 02/15/09 100,375*
75,000 Golden Northwest Aluminum, Inc., (144A), 12%, due 12/15/06 77,250*
100,000 Mark IV Industries, Inc., 7.75%, due 04/01/06 98,420
100,000 Neenah Corp., (144A), 11.125%, due 05/01/07 101,000*
40,000 Wheeling Pittsburgh Corp., 9.25%, due 11/15/07 40,000
------------
Total Metals 417,045
------------
Miscellaneous (0.4%)
200,000 NSWTC International, 7%, due 04/01/04 140,887
50,000 Polymer Group, Inc., 8.75%, due 03/01/08 50,875
75,000 Simmons Co., (144A), 10.25%, due 03/15/09 78,375*
------------
Total Miscellaneous 270,137
------------
Pharmaceuticals (0.8%)
550,000 Amgen, Inc., 6.25%, due 12/18/02 554,125
100,000 King Pharmaceuticals, Inc., (144A), 10.75%, due 02/15/09 105,000*
------------
Total Pharmaceuticals 659,125
------------
Pollution Control (0.3%)
25,000 Allied Waste North America, Inc., 7.625%, due 01/01/06 24,625
125,000 Allied Waste North America, Inc., 7.875%, due 01/01/09 123,438
50,000 Safety-Kleen Services, Inc., 9.25%, due 06/01/08 53,000
------------
Total Pollution Control 201,063
------------
Real Estate (0.1%)
50,000 Forest City Enterprises, Inc., 8.5%, due 03/15/08 50,750
------------
</TABLE>
8
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
Retail (0.7%)
$ 300,000 Albertson's, Inc., 6.625%, due 06/01/28 $ 291,000
50,000 Home Interiors & Gifts, Inc., 10.125%, due 06/01/08 50,625
90,000 May Department Stores Co., 9.75%, due 02/15/21 117,900
100,000 Panolam Industries International, Inc., (144A),
11.5%, due 02/15/09 104,500*
-----------
Total Retail 564,025
-----------
Telecommunications (4.5%)
250,000 AirTouch Communications, Inc., 6.65%, due 05/01/08 254,375
500,000 AT&T Capital Corp., 5.625%, due 03/15/04 494,110
500,000 AT&T Capital Corp., 6.75%, due 02/04/02 508,330
75,000 Bresnan Communications Group, (144A),
8%, due 02/01/09 77,063*
75,000 Bresnan Communications Group, (144A),
9.25%, due 02/01/09 51,563*
425,000 Intermedia Communications, Inc., 8.5%, due 01/15/08 422,875
100,000 Intermedia Communications, Inc., (144A),
9.5%, due 03/01/09 104,000*
100,000 Jordan Telecommunications Products, Inc.,
0%, due 08/01/07 83,500
20,000 Jordan Telecommunications Products, Inc.,
9.875%, due 08/01/07 20,200
300,000 Level 3 Communications, Inc., 9.125%, due 05/01/08 306,000
500,000 Lucent Technologies, Inc., 6.45%, due 03/15/29 481,850
300,000 Mcleod USA, Inc., (144A), 8.125%, due 02/15/09 297,750*
25,000 MetroNet Communications Corp., 12%, due 08/15/07 30,000
100,000 Northern Telecom Capital Corp., 7.4%, due 06/15/06 106,000
60,000 Outdoor Communications, Inc., 9.25%, due 08/15/07 63,750
200,000 Rhythms NetConnections, Inc., 12.75%, due 04/15/09 199,000
-----------
Total Telecommunications 3,500,366
-----------
Textiles, Clothing & Fabrics (0.1%)
50,000 Westpoint Stevens, Inc., 7.875%, due 06/15/08 51,250
-----------
Transportation (0.2%)
25,000 Atlas Air, Inc., 10.75%, due 08/01/05 26,250
150,000 Southwest Airlines Co., 7.375%, due 03/01/27 156,375
-----------
Total Transportation 182,625
-----------
Utilities (5.3%)
50,000 Calpine Corp., 7.75%, due 04/15/09 50,125
100,000 CMS Energy Corp., 7.5%, due 01/15/09 99,881
300,000 CMS Energy Corp., 7.625%, due 11/15/04 305,694
500,000 Commonwealth Edison Co., 6.95%, due 07/15/18 502,500
200,000 GTE South, Inc., 7.25%, due 08/01/02 207,500
</TABLE>
9
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
Utilities (Continued)
$ 575,000 NEXTLINK Communications, Inc., (144A),
10.75%, due 11/15/08 $ 613,813*
75,000 Niagara Mohawk Power Corp., 0%, due 07/01/10 57,532
75,000 Niagara Mohawk Power Corp., 7.625%, due 10/01/05 77,319
1,700,000 Tennessee Valley Authority, 6.375%, due 06/15/05 1,736,125
500,000 Western Resources, Inc., 6.875%, due 08/01/04 511,250
-----------
Total Utilities 4,161,739
-----------
Total Corporate Bonds (Cost: $24,406,964) 24,499,222
-----------
Asset Backed Securities (3.5%)
500,000 Capital Auto Receivables Asset Trust, 5.68%, due 08/15/04 501,719
750,000 EQCC Home Equity Loan Trust (1999-1- A2F),
5.765%, due 03/20/29 744,795
300,000 Southern Pacific Secured Assets Corp. (1997-3-A4),
6.66%, due 06/25/24 302,076
182,341 The Money Store Home Equity Trust (1997-C-AF3),
6.307%, due 08/15/12 183,009
1,000,000 Toyota Auto Lease Trust (1998-B-A2), 5.45%, due 03/25/03 989,890
-----------
Total Asset Backed Securities (Cost: $2,732,092) 2,721,489
-----------
Collateralized Mortgage Obligations (29.3%)
295,782 Bear Stearns Mortgage Securities, Inc. (1997-2-A2),
6.5%, due 04/28/24 296,152
122,455 Bear Stearns Mortgage Securities, Inc. (97-2-A5),
6.875%, due 01/28/24 120,580
702,688 Citicorp Mortgage Securities (1998-5-A1), 6.75%, due 03/25/25 713,397
665,000 Countrywide Home Loans (1997-8-A1), 6.75%, due 01/25/28 668,644
1,000,000 Federal Home Loan Mortgage Corp. (2061-TA),
5.25%, due 10/15/27 896,670
1,000,000 Federal Home Loan Mortgage Corp. (1648-LA),
6%, due 05/15/23 935,810
1,000,000 Federal Home Loan Mortgage Corp. (2043-CH),
6%, due 08/15/26 956,410
500,000 Federal Home Loan Mortgage Corp. (2063-PV),
6.25%, due 10/15/26 485,885
1,000,000 Federal Home Loan Mortgage Corp. (2081-PC),
6.25%, due 10/15/26 979,900
781,000 Federal Home Loan Mortgage Corp. (1588-QD),
6.5%, due 09/15/23 767,059
1,000,000 Federal Home Loan Mortgage Corp. (2018-H),
6.5%, due 01/15/28 1,012,440
2,306,838 Federal Home Loan Mortgage Corp. (1468-ZA),
7%, due 02/15/22 2,317,540
65,985 Federal Home Loan Mortgage Corp. (1578-O),
7%, due 09/15/23 66,409
</TABLE>
10
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
Collateralized Mortgage Obligations (Continued)
$ 450,000 Federal Home Loan Mortgage Corp. (1944-GB),
7.5%, due 04/17/24 $ 458,384
111,778 Federal Home Loan Mortgage Corp. -- Government
National Mortgage Association (41-K),
8%, due 04/25/24 112,612
330,343 Federal National Mortgage Association (1995-22-J),
6.5%, due 04/25/23 329,319
495,452 Federal National Mortgage Association (G3-40-ZC),
6.5%, due 12/25/23 496,745
850,581 Federal National Mortgage Association (1994-2-N),
6.5%, due 01/25/24 827,556
1,000,000 Federal National Mortgage Association (1992-181-PL),
7%, due 10/25/21 1,011,670
1,472,646 Financial Asset Securitization, Inc.
(1997-NAM1-A4), 7.75%, due 05/25/27 1,497,042
250,000 Green Tree Financial Corp. (1998-4-A3),
5.98%, due 02/01/30 250,765
987,869 Headlands Mortgage Securities, Inc. (1997-5-AI5),
7.25%, due 11/25/27 998,999
537,769 Norwest Asset Securites Corp. (1997-15-A1),
6.75%, due 10/25/12 545,066
983,114 Norwest Asset Securities Corp. (1997-8-A4),
7.5%, due 06/25/27 1,000,464
2,777,305 Prudential Home Mortgage Securities (1993-50-A11),
8.75%, due 11/25/23 2,680,098
400,000 Residential Funding Mortgage Securities I (1998-S8-A3),
6.5%, due 04/25/28 391,796
1,000,000 Residential Funding Mortgage Securities I (97-S12-A10),
6.7%, due 08/25/27 1,002,940
350,000 Residential Funding Mortgage Securities I (1997-S2-A7),
7%, due 12/25/27 353,488
711,780 Residential Funding Mortgage Securities I (1997-S5-A2),
7.5%, due 04/25/27 718,947
-----------
Total Collateralized Mortgage Obligations
(Cost: $22,787,507) 22,892,787
-----------
Foreign Government Bonds & Notes (7.6%)
473,000 Canada (Government of), 8.75%, due 12/01/05 388,729
22,000 Federal Republic of Germany, 5.125%, due 11/21/00 24,116
301,000 Federal Republic of Germany, 5.625%, due 01/04/28 353,555
831,000 French O.A.T., 5.25%, due 04/25/08 967,213
1,181,000 Kingdom of Denmark, 7%, due 12/15/04 196,009
1,100,000 Kingdom of Sweden, 5.5%, due 04/12/02 139,038
260,000 Netherlands Government, 7%, due 02/15/03 312,660
500,000 Ontario Province (Canada), 5.5%, due 10/01/08 479,375
500,000 Province of Manitoba (Canada), 5.5%, due 10/01/08 481,250
</TABLE>
11
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
Foreign Government Bonds & Notes (Continued)
$ 500,000 Province of Quebec (Canada), 7%, due 01/30/07 $ 522,800
183,000 Queensland Government Developmental Authority
(Australia), 8%, due 05/14/03 132,703
489,001 Republic of Italy, 6.25%, due 03/01/02 563,308
705,000 Treuhandanstalt (Germany), 6.625%, due 07/09/03 846,298
425,000 United Kingdom Treasury Strip, 0%, due 06/07/04 535,529
-----------
Total Foreign Government Bonds & Notes
(Cost: $6,294,137) 5,942,583
-----------
U.S. Government Agency Obligations (8.8%)
2,350,000 Federal Home Loan Mortgage Corp., 5%, due 02/15/01 2,338,343
2,050,000 Federal National Mortgage Association, 5.25%, due 01/15/03 2,029,089
1,525,000 Federal National Mortgage Association, 5.86%, due 08/20/03 1,521,355
555,000 Federal National Mortgage Association, 6.3%, due 09/25/02 558,302
400,000 Federal National Mortgage Association, 6.4%, due 10/24/02 403,056
-----------
Total U.S. Government Agency Obligations
(Cost: $6,894,042) 6,850,145
-----------
U.S. Treasury Bonds (9.7%)
780,000 United States Treasury Bonds, 6.125%, due 11/15/27 806,863
1,600,000 United States Treasury Bonds, 7.5%, due 11/15/16 1,874,351
1,520,000 United States Treasury Bonds, 7.5%, due 11/15/24 1,832,953
1,440,000 United States Treasury Bonds, 8.5%, due 02/15/20 1,877,730
800,000 United States Treasury Bonds, 12%, due 08/15/13 1,161,808
-----------
Total U.S. Treasury Bonds (Cost: $7,955,005) 7,553,705
-----------
U.S. Treasury Notes (4.3%)
934,416 United States Treasury Inflation Index Notes,
3.504%, due 01/15/07 900,534
1,350,000 United States Treasury Notes, 5.375%, due 07/31/00 1,355,792
1,100,000 United States Treasury Notes, 6.25%, due 06/30/02 1,132,758
-----------
Total U.S. Treasury Notes (Cost: $3,411,967) 3,389,084
-----------
Total Fixed Income Securities (Cost: $74,481,714)
(94.5%) 73,849,015
-----------
Short-term Investment (Cost: $2,129,500) (2.7%)
----------------------------------------------
2,129,500 BankBoston Corp., 5.068%, due 10/29/99 2,129,500**
-----------
Total Investments (Cost: $76,611,214) (97.2%) 75,978,515
Excess of Other Assets Over Liabilities (2.8%) 2,178,911
-----------
Net Assets (100.0%) $78,157,426
===========
</TABLE>
Notes to the Schedule of Investments:
* Restricted Security (Note 8).
** Represents investments of security lending collateral (Note 2).
12
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Corporate Bonds Value
---------- ----------------- ------------
<S> <C> <C>
Advertising (1.0% of Net Assets)
$1,245,000 Adams Outdoor Advertising, L.P., 10.75%, due 03/15/06 $ 1,360,163
710,000 Outdoor Systems, Inc., 9.375%, due 10/15/06 772,125
------------
Total Advertising 2,132,288
------------
Aerospace/Defense (0.4%)
600,000 BE Aerospace, Inc., 8%, due 03/01/08 600,000
295,000 BE Aerospace, Inc., (144A), 9.5%, due 11/01/08 313,438*
------------
Total Aerospace/Defense 913,438
------------
Automotive (2.3%)
825,000 American Axle & Manufacturing, Inc.,
(144A), 9.75%, due 03/01/09 855,938*
970,000 Hayes Lemmerz International, Inc.,
9.125%, due 07/15/07 1,018,500
2,050,000 Hayes Lemmerz International, Inc., (144A),
8.25%, due 12/15/08 2,070,499*
745,000 Navistar International Corp., 8%, due 02/01/08 769,213
------------
Total Automotive 4,714,150
------------
Banking & Financial Services (2.5%)
2,800,000 AmeriCredit Corp., 9.875%, due 04/15/06 2,841,999
165,000 Chevy Chase Savings Bank, 9.25%, due 12/01/05 165,825
755,000 Chevy Chase Savings Bank, 9.25%, due 12/01/08 756,888
1,575,000 GS Escrow Corp., (144A), 7.125%, due 08/01/05 1,567,409*
------------
Total Banking & Financal Services 5,332,121
------------
Building Materials (0.1%)
85,000 Building Materials Corp., (144A), 8.625%, due 12/15/06 86,275*
------------
Chemicals (3.5%)
1,705,000 Borden Chemicals & Plastics, L.P., 9.5%, due 05/01/05 1,713,525
1,275,000 General Chemical Industrial Products,
10.625%, due 05/01/09 1,303,688
75,000 GEO Specialty Chemicals, Inc., (144A),
10.125%, due 08/01/08 75,563*
915,000 Huntsman Corp., (144A), 9.5%, due 07/01/07 896,700*
875,000 ISP Holdings, Inc., 9%, due 10/15/03 901,250
1,205,000 Scotts Co., (144A), 8.625%, due 01/15/09 1,248,681*
1,215,000 Texas Petrochemicals Corp., 11.125%, due 07/01/06 1,057,050
------------
Total Chemicals 7,196,457
------------
</TABLE>
13
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Commercial Services (4.7%)
$ 85,000 Anthony Crane Rentals, L.P., 10.375%, due 08/01/08 $ 86,700
1,455,000 Coinmach Corp., 11.75%, due 11/15/05 1,607,775
600,000 Iron Mountain, Inc., 8.25%, due 07/01/11 601,500
390,000 Iron Mountain, Inc., 8.75%, due 09/30/09 399,750
1,205,000 Iron Mountain, Inc., 10.125%, due 10/01/06 1,308,931
165,000 Pierce Leahy, 8.125%, due 05/15/08 162,525
1,365,000 Protection One Alarm Monitoring, Inc., 7.375%, due 08/15/08 1,358,434
1,315,000 Rental Service Corp., 9%, due 05/15/08 1,324,863
2,000,000 UIH Australia/Pacific, Inc., 0%, due 05/15/06 1,440,000
1,365,000 Williams Scotsman, Inc., 9.875%, due 06/01/07 1,416,188
------------
Total Commercial Services 9,706,666
------------
Computer Services (0.3%)
730,000 infoUSA, Inc., 9.5%, due 06/15/08 697,150
------------
Conglomerates (0.4%)
1,245,000 Jordan Industries, Inc., 0%, due 04/01/09 796,800
------------
Construction (2.3%)
1,785,000 Atrium Companies, Inc., 10.5%, due 11/15/06 1,909,950
915,000 D.R. Horton, Inc., 8%, due 02/01/09 905,850
650,000 Hovnanian Enterprises, Inc., 9.125%, due 05/01/09 650,000
1,000,000 NCI Building Systems, Inc., (144A), 9.25%, due 05/01/09 1,010,000*
310,000 Standard Pacific Corp., 8%, due 02/15/08 302,250
------------
Total Construction 4,778,050
------------
Containers & Packaging (8.2%)
800,000 Anchor Glass Container Corp., 9.875%, due 03/15/08 744,000
1,245,000 Ball Corp., 7.75%, due 08/01/06 1,288,575
455,000 Ball Corp., 8.25%, due 08/01/08 470,925
455,000 BWAY Corp., 10.25%, due 04/15/07 486,850
855,000 Consumers International, Inc., 10.25%, due 04/01/05 897,750
665,000 Consumers Packaging, Inc., (144A), 9.75%, due 02/01/07 681,625*
555,000 Huntsman Packaging Corp., 9.125%, due 10/01/07 560,550
165,000 Owens-Illinois, Inc., 7.15%, due 05/15/05 162,571
535,000 Owens-Illinois, Inc., 7.85%, due 05/15/04 547,321
1,075,000 Owens-Illinois, Inc., 8.1%, due 05/15/07 1,104,434
1,115,000 Packaged Ice, Inc., 9.75%, due 02/01/05 1,131,725
1,725,000 Packaging Corp. of America (144A), 9.625%, due 04/01/09 1,794,000*
825,000 Plastic Containers, Inc., 10%, due 12/15/06 886,875
2,730,000 Riverwood International Corp., 10.625%, due 08/01/07 2,852,849
1,245,000 Stone Container Corp., 12.75%, due 04/01/02 1,251,225
1,520,000 Sweetheart Cup, Inc., 9.625%, due 09/01/00 1,474,400
600,000 U.S. Can Corp., Series B, 10.125%, due 10/15/06 639,000
------------
Total Containers & Packaging 16,974,675
------------
</TABLE>
14
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Cosmetics & Household Products (0.5%)
$1,000,000 Chattem, Inc., 8.875%, due 04/01/08 $ 1,012,500
------------
Electronics (4.2%)
2,905,000 Ametek, Inc., 7.2%, due 07/15/08 2,788,799
2,135,000 Communications & Power Industries, Inc.,
12%, due 08/01/05 2,263,099
1,035,000 International Wire Group, Inc., 11.75%, due 06/01/05 1,094,513
865,000 International Wire Group, Inc., 11.75%, due 06/01/05 914,738
1,215,000 Viasystems, Inc., 9.75%, due 06/01/07 1,129,950
480,000 Wavetek Corp., 10.125%, due 06/15/07 441,600
------------
Total Electronics 8,632,699
------------
Energy & Oil Services (3.7%)
1,985,000 Forest Oil Corp., 10.5%, due 01/15/06 2,059,438
1,500,000 Grey Wolf, Inc., 8.875%, due 07/01/07 1,275,000
85,000 Gulf Canada Resources, Ltd., 9.25%, due 01/15/04 86,357
625,000 Gulf Canada Resources, Ltd., 9.625%, due 07/01/05 643,956
1,190,000 Magnum Hunter Resources, Inc., 10%, due 06/01/07 1,082,900
1,260,000 P&L Coal Holdings Corp., 8.875%, due 05/15/08 1,310,400
1,225,000 R&B Falcon Corp., 9.5%, due 12/15/08 1,151,500
------------
Total Energy & Oil Services 7,609,551
------------
Entertainment & Leisure (8.4%)
495,000 Boyd Gaming Corp., 9.25%, due 10/01/03 519,750
1,435,000 Cinemark USA, Inc., 9.625%, due 08/01/08 1,492,400
2,800,000 Florida Panthers Holdings, Inc., 9.875%, due 04/15/09 2,810,499
2,155,000 Harrahs Operating Company, Inc., 7.875%, due 12/15/05 2,176,549
1,165,000 Hollywood Park, Inc., (144A), 9.25%, due 02/15/07 1,195,581*
1,245,000 Marvel Enterprises, Inc., (144A), 12%, due 06/15/09 1,282,350*
770,000 Mohegan Tribal Gaming Authority, (144A),
8.75%, due 01/01/09 793,100*
350,000 Park Place Entertainment Corp., (144A),
7.875%, due 12/15/05 343,000*
825,000 Regal Cinemas, Inc., 8.875%, due 12/15/10 798,188
1,905,000 Regal Cinemas, Inc., 9.5%, due 06/01/08 1,895,475
400,000 SFX Entertainment, Inc., 9.125%, due 02/01/08 413,000
1,495,000 SFX Entertainment, Inc., (144A), 9.125%, due 12/01/08 1,539,850*
270,000 Station Casinos, Inc., 10.125%, due 03/15/06 288,900
1,655,000 Station Casinos, Inc., (144A), 9.75%, due 04/15/07 1,754,300*
------------
Total Entertainment & Leisure 17,302,942
------------
</TABLE>
15
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Foods, Hotels & Restaurants (5.5%)
$ 620,000 Cott Corp., 9.375%, due 07/01/05 $ 613,800
2,000,000 Di Giorgio Corp., 10%, due 06/15/07 1,980,000
560,000 Foodmaker, Inc. Series 1993A, 9.75%, due 11/01/03 576,800
1,655,000 HMH Properties, Inc., 7.875%, due 08/01/08 1,605,350
1,840,000 International Home Foods, Inc., 10.375%, due 11/01/06 2,001,000
1,285,000 ITT Corp., 7.375%, due 11/15/15 1,169,157
400,000 ITT Corp. (New), 6.25%, due 11/15/00 395,324
1,350,000 La Quinta Inns, Inc., 7.11%, due 10/17/01 1,256,202
351,000 Mrs. Fields Original Cookies, Inc., (144A),
10.125%, due 12/01/04 331,695*
1,315,000 New World Pasta Co., (144A), 9.25%, due 02/15/09 1,334,725*
------------
Total Foods, Hotels & Restaurants 11,264,053
------------
Health Care (2.6%)
640,000 Dade International, Inc., 11.125%, due 05/01/06 707,200
1,145,000 Insight Health Services Corp., 9.625%, due 06/15/08 1,173,625
900,000 Magellan Health Services, Inc., 9%, due 02/15/08 760,500
890,000 Prime Medical Services, Inc., 8.75%, due 04/01/08 881,100
400,000 Tenet Healthcare Corp., (144A), 8.125%, due 12/01/08 396,000*
1,430,000 Tenet Healthcare Corp., 8.625%, due 01/15/07 1,444,300
------------
Total Health Care 5,362,725
------------
Household Products (0.2%)
383,000 Boyds Collection Ltd., (144A), 9%, due 05/15/08 405,980*
------------
Insurance (0.2%)
400,000 United Industries Corp., (144A), 9.875%, due 04/01/09 418,000*
------------
Machinery (0.6%)
355,000 AGCO Corp., 8.5%, due 03/15/06 337,250
270,000 Federal Mogul Corp., 7.875%, due 07/01/10 268,564
620,000 Insilco Corp., (144A), 12%, due 08/15/07 620,000*
------------
Total Machinery 1,225,814
------------
Media -- Broadcasting & Publishing (13.1%)
475,000 Adelphia Communications Corp., 8.375%, due 02/01/08 486,875
665,000 Adelphia Communications Corp., 9.25%, due 10/01/02 693,263
825,000 Adelphia Communications Corp., (144A), 8.375%, due 02/01/08 845,625*
1,200,000 American Media Operations, Inc., (144A), 10.25%, due 05/01/09 1,210,500*
1,535,000 American Media Operations, Inc., 11.625%, due 11/15/04 1,657,800
295,000 Century Communications Corp., 9.5%, due 03/01/05 315,650
1,245,000 Chancellor Media Corp., (144A), 8%, due 11/01/08 1,285,463*
1,285,000 Chancellor Media Corp., 8.75%, due 06/15/07 1,323,550
585,000 Chancellor Media Corp., (144A), 9%, due 10/01/08 627,413*
1,505,000 Chancellor Media Corp., 9.375%, due 10/01/04 1,557,675
</TABLE>
16
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Media -- Broadcasting & Publishing (Continued)
$1,700,000 Charter Communications Holdings, LLC, (144A),
0%, due 04/01/11 $ 1,124,125*
1,205,000 Classic Cable, Inc., (144A), 9.875%, due 08/01/08 1,292,363*
585,000 CSC Holdings, Inc., 7.625%, due 07/15/18 585,614
270,000 CSC Holdings, Inc., 8.125%, due 08/15/09 292,275
500,000 CSC Holdings, Inc., 9.875%, due 05/15/06 546,250
1,980,000 EchoStar DBS Corp., (144A), 9.375%, due 02/01/09 2,069,100*
850,000 Emmis Communications Corp., (144A), 8.125%, due 03/15/09 850,000*
350,000 Garden State Newspapers, Inc., (144A), 8.625%, due 07/01/11 355,250*
625,000 Garden State Newspapers, Inc., 8.75%, due 10/01/09 632,813
60,000 Hollinger International Publishing, Inc., 8.625%, due 03/15/05 62,700
640,000 Jones Intercable, Inc., 8.875%, due 04/01/07 697,600
950,000 K-III Communications Corp., 8.5%, due 02/01/06 976,125
295,000 Primedia, Inc., 7.625%, due 04/01/08 296,475
495,000 Rogers Cablesystems, Ltd., 10%, due 03/15/05 559,350
625,000 Rogers Communications, Inc., 8.875%, due 07/15/07 650,000
2,550,000 STC Broadcasting, Inc., 11%, due 03/15/07 2,709,374
2,550,000 TV Guide, Inc., (144A), 8.125%, due 03/01/09 2,600,999*
680,000 Von Hoffmann Press, Inc., (144A), 10.875%, due 05/15/07 700,400*
------------
Total Media -- Broadcasting & Publishing 27,004,627
------------
Metals (4.0%)
1,100,000 AK Steel Corp., (144A), 7.875%, due 02/15/09 1,104,125*
250,000 California Steel Industries, (144A), 8.5%, due 04/01/09 255,000*
955,000 Golden Northwest Aluminum, Inc., (144A), 12%, due 12/15/06 983,650*
1,930,000 Kaiser Aluminum & Chemicals Corp., 10.875%, due 10/15/06 2,007,200
1,245,000 Mark IV Industries, Inc., 7.75%, due 04/01/06 1,225,329
125,000 Neenah Corp., 11.125%, due 05/01/07 126,250
825,000 Neenah Corp., (144A), 11.125%, due 05/01/07 833,250*
890,000 Wheeling Pittsburgh Corp., 9.25%, due 11/15/07 890,000
845,000 Wyman Gordon Co., 8%, due 12/15/07 845,000
------------
Total Metals 8,269,804
------------
Miscellaneous (0.4%)
205,000 Polymer Group, Inc., 8.75%, due 03/01/08 208,588
650,000 Simmons Co., (144A), 10.25%, due 03/15/09 679,250*
------------
Total Miscellaneous 887,838
------------
Paper & Forest Products (1.2%)
705,000 Buckeye Technologies, Inc., 8%, due 10/15/10 710,288
745,000 Paperboard Industries International, Inc., 8.375%, due 09/15/07 737,550
875,000 Specialty Paperboard, Inc., 9.375%, due 10/15/06 892,500
200,000 Tembec Industries, Inc., 8.625%, due 06/30/09 207,250
------------
Total Paper & Forest Products 2,547,588
------------
</TABLE>
17
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Pharmaceuticals (0.6%)
$1,165,000 King Pharmaceuticals, Inc., (144A), 10.75%, due 02/15/09 $ 1,223,250*
------------
Pollution Control (1.0%)
310,000 Allied Waste North America, Inc., 7.625%, due 01/01/06 305,350
1,050,000 Allied Waste North America, Inc., 7.875%, due 01/01/09 1,036,875
415,000 Envirosource, Inc., 9.75%, due 06/15/03 249,000
1,050,000 Mid-American Waste System, Inc., 12.25%, due 02/15/03 210,000***
245,000 Safety-Kleen Services, Inc., 9.25%, due 06/01/08 259,700
------------
Total Pollution Control 2,060,925
------------
Real Estate (0.6%)
1,245,000 Forest City Enterprises, Inc., 8.5%, due 03/15/08 1,263,675
------------
Retail (4.0%)
1,093,000 Guitar Center Management, Inc., 11%, due 07/01/06 1,158,580
1,520,000 Home Interiors & Gifts, Inc., 10.125%, due 06/01/08 1,539,000
1,000,000 J. Crew Operating Corp., 10.375%, due 10/15/07 965,000
1,720,000 Michaels Stores, Inc., 10.875%, due 06/15/06 1,844,700
1,140,000 Panolam Industries International, Inc., (144A),
11.5%, due 02/15/09 1,191,300*
415,000 Specialty Retailers, Inc., 8.5%, due 07/15/05 315,400
1,220,000 Zale Corp., 8.5%, due 10/01/07 1,250,500
------------
Total Retail 8,264,480
------------
Telecommunications (12.7%)
590,000 Bresnan Communications Group, (144A), 8%, due 02/01/09 606,225*
665,000 Bresnan Communications Group, (144A), 9.25%, due 02/01/09 457,188*
1,075,000 Caprock Communications Corp., 12%, due 07/15/08 1,136,813
1,100,000 Classic Communications, Inc., (144A), 0%, due 08/01/09 836,000*
625,000 GST Telecommunications, Inc., (144A), 0%, due 05/01/08 390,625*
1,365,000 Intermedia Communications, Inc., 8.5%, due 01/15/08 1,358,175
245,000 Intermedia Communications, Inc., 8.875%, due 11/01/07 247,450
2,485,000 Intermedia Communications, Inc., (144A), 9.5%, due 03/01/09 2,584,399*
1,495,000 Jordan Telecommunications Products, Inc., 0%, due 08/01/07 1,248,325
1,310,000 Jordan Telecommunications Products, Inc., 9.875%, due 08/01/07 1,323,100
2,985,000 Level 3 Communications, Inc., 9.125%, due 05/01/08 3,044,699
1,385,000 Mastec, Inc., 7.75%, due 02/01/08 1,371,150
1,775,000 Mcleod USA, Inc., (144A), 8.125%, due 02/15/09 1,761,688*
140,000 MetroNet Communications Corp., 12%, due 08/15/07 168,000
990,000 Outdoor Communications, Inc., 9.25%, due 08/15/07 1,051,875
1,500,000 Paging Network, Inc., 10.125%, due 08/01/07 1,215,000
1,270,000 RCN Corp., 0%, due 10/15/07 885,825
415,000 RCN Corp., 10%, due 10/15/07 430,563
1,875,000 Rhythms NetConnections, Inc., 12.75%, due 04/15/09 1,865,625
165,000 Rogers Cantel, Inc., 9.375%, due 06/01/08 181,913
</TABLE>
18
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<S> <C> <C>
Telecommunications (Continued)
$1,720,000 Verio, Inc., 10.375%, due 04/01/05 $ 1,836,100
2,075,000 Verio, Inc., (144A), 11.25%, due 12/01/08 2,329,187*
------------
Total Telecommunications 26,329,925
------------
Textiles, Clothing & Fabrics (0.7%)
500,000 Westpoint Stevens, Inc., 7.875%, due 06/15/05 512,500
810,000 Westpoint Stevens, Inc., 7.875%, due 06/15/08 830,250
------------
Total Textiles, Clothing & Fabrics 1,342,750
------------
Transportation (1.5%)
375,000 Atlas Air, Inc., 10.75%, due 08/01/05 393,750
1,035,000 Blue Bird Body Co., 10.75%, due 11/15/06 1,102,275
675,000 International Shipholding Corp., 9%, due 07/01/03 683,438
995,000 Western Star Trucks Holdings, Ltd., 8.75%, due 05/01/07 995,000
------------
Total Transportation 3,174,463
------------
Utilities (5.5%)
600,000 Calpine Corp., 7.75%, due 04/15/09 601,500
825,000 CMS Energy Corp., 7.5%, due 01/15/09 824,018
1,115,000 CMS Energy Corp., 7.625%, due 11/15/04 1,136,163
85,000 CMS Energy Corp., 8.125%, due 05/15/02 87,402
1,745,000 NEXTLINK Communications, Inc., 9.625%, due 10/01/07 1,758,088
2,405,000 NEXTLINK Communications, Inc., (144A), 10.75%, due 11/15/08 2,567,337*
600,000 Niagara Mohawk Power Corp., 0%, due 07/01/10 460,254
535,000 Niagara Mohawk Power Corp., 7.625%, due 10/01/05 551,542
825,000 Niagara Mohawk Power Corp., 7.75%, due 10/01/08 874,871
2,030,834 Panda Funding Corp., 11.625%, due 08/20/12 2,071,450
745,000 SBA Communications Corp., 0%, due 03/01/08 484,250
------------
Total Utilities 11,416,875
------------
Total Corporate Bonds (Cost: $198,114,394) (96.9%) 200,348,534
------------
</TABLE>
19
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Number of
Shares,
Rights or
Warrants Equity Securities Value
---------- ----------------- ------------
<S> <C> <C>
6,969 Fitzgerald Gaming Corp., Common Stock $ 7***
1,250 Forman Petroleum Corp., Warrants expire 06/01/04 1***
2,920 Terex Corp., Stock Appreciation Rights, expire 05/15/2002 40,880***
------------
Total Equity Securities (Cost: $202) (0.1%) 40,888
------------
<CAPTION>
Principal
Amount Short-term Investments
---------- ----------------------
<S> <C> <C>
$1,273,449 Merrimac Cash Fund -- Premium Class 1,273,449**
467,301 BankBoston Corp., 5.068%, due 10/29/99 467,301**
------------
Total Short-term Investments (Cost: $1,740,750) (0.8%) 1,740,750
------------
Total Investments (Cost: $199,855,346) (97.8%) 202,130,172
Excess of Other Assets Over Liabilities (2.2%) 4,525,560
------------
Net Assets (100.0%) $206,655,732
============
</TABLE>
Notes to the Schedule of Investments:
* Restricted Security (Note 8).
** Represents investments of security lending collateral (Note 2).
*** Non-income producing.
20
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Mortgage-Backed Securities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Fixed Income Securities Value
--------- ----------------------- ----------
<S> <C> <C>
Collaterized Mortgage Obligations (42.9% of Net Assets)
$1,675,317 Collateral Mortgage Obligation Trust 64,
9%, due 11/20/20 $1,723,432
1,500,000 Federal Home Loan Mortgage Corp. (2057-HJ),
7%, due 05/15/28 502,140
414,796 Federal Home Loan Mortgage Corp. (1899-D),
7.25%, due 09/15/23 417,550
2,077,150 Federal Home Loan Mortgage Corp. (2021-AD),
7.5%, due 08/15/24 2,079,098
2,128,997 Federal Home Loan Mortgage Corp. (2032-AU),
7.5%, due 02/15/27 2,183,552
2,000,000 Federal National Mortgage Association (97-57-PC),
6.5%, due 04/18/20 2,012,800
2,000,000 Federal National Mortgage Association (G93-8-PH),
6.85%, due 01/25/21 2,014,800
1,622,925 Federal National Mortgage Association (97-55-T),
7%, due 02/18/27 1,644,047
44,973 Federal National Mortgage Association (91-130-SQ),
71.1%, due 09/25/21 47,706
616,153 General Electric Capital Mortgage Services, Inc.,
(97-9-2A7), 7%, due 10/25/27 615,472
606,356 Greenwich Capital Acceptance Inc. (91-03),
(Private Placement), 9.46%, due 03/01/21 586,649*
21,541 Guardian Savings and Loan Association (88-1-A),
6.67%, due 07/25/18 18,310
114,343 Guardian Savings and Loan Association (88-3-A),
6.888%, due 10/25/18 97,192
120,240 Guardian Savings and Loan Association (89-3-A),
7.671%, due 05/25/19 102,204
626,342 Guardian Savings and Loan Association Private Placement
(89-4-A), 7.704%, due 07/25/19 595,025
722,089 Guardian Savings and Loan Association (89-5-A),
7.756%, due 07/25/19 685,984
2,000,000 Residential Funding Mortgage Securities I (97-S12-A10),
6.7%, due 08/25/27 1,995,342
206,173 Residential Funding Mortgage Securities I (89-4-B),
6.854%, due 07/25/19 201,190
1,832,125 Resolution Trust Corp. (92-M4-A3),
7.25%, due 09/25/21 1,832,125
132,581 Resolution Trust Corp. (91-6-02),
30.15%, due 08/25/20 24,528
282,689 Resolution Trust Corp. (91-6-D2),
33.08%, due 09/25/28 52,297
</TABLE>
21
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Mortgage-Backed Securities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
Collaterized Mortgage Obligations (Continued)
$ 271,565 Salomon Brothers Mortgage Securities VII (96-2-A1),
7.5%, due 05/01/26 $ 275,226
737,312 Sears Mortgage Securities (88-A-A2),
0.713%, due 05/25/18 7,521
-----------
Total Collaterized Mortgage Obligations (Cost: $20,626,059) 19,714,190
-----------
U.S. Government Agency Obligations (45.8%)
278,605 Federal Home Loan Mortgage Corp., Pool #410013,
6.991%, due 12/01/24 283,453
88,995 Federal Home Loan Mortgage Corp., Pool #770584,
7.125%, due 05/01/19 91,528
288,810 Federal Home Loan Mortgage Corp., Pool #785630,
7.376%, due 07/01/26 293,982
10,544 Federal Home Loan Mortgage Corp., Pool #865006,
8.201%, due 11/01/18 10,660
84,004 Federal Home Loan Mortgage Corp., Pool #865275,
8.249%, due 02/01/19 86,508
136,016 Federal Home Loan Mortgage Corp., Pool #865270,
8.34%, due 12/01/18 138,061
101,400 Federal Home Loan Mortgage Corp., Pool #865006,
8.564%, due 08/01/18 103,433
655,161 Federal Home Loan Mortgage Corp., Pool #310005,
8.664%, due 11/01/19 651,067
39,189 Federal Home Loan Mortgage Corp., Pool #212346,
9.5%, due 08/01/01 40,186
1,798,001 Federal National Mortgage Association, Pool #303972,
7%, due 07/01/03 1,821,039
423,232 Federal National Mortgage Association, Pool #284916,
7.291%, due 06/01/27 433,716
553,742 Federal National Mortgage Association, Pool #313920,
7.293%, due 11/01/27 567,935
373,276 Federal National Mortgage Association, Pool #376663,
7.295%, due 06/01/27 380,253
374,754 Federal National Mortgage Association, Pool #303334,
7.32%, due 04/01/25 386,139
498,501 Federal National Mortgage Association, Pool #394996,
7.408%, due 08/01/27 510,185
75,830 Federal National Mortgage Association, Pool #392275,
7.446%, due 06/01/27 77,393
205,066 Federal National Mortgage Association, Pool #394575,
7.528%, due 07/01/27 209,755
254,449 Federal National Mortgage Association, Pool #393943,
7.576%, due 07/01/27 259,629
3,789,671 Federal National Mortgage Association, Pool #434001,
7.583%, due 12/01/27 3,855,990
</TABLE>
22
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
U.S. Government Agency Obligations (Continued)
$ 181,181 Federal National Mortgage Association, Pool #358869,
7.588%, due 09/01/26 $ 184,675
262,516 Federal National Mortgage Association, Pool #397897,
7.593%, due 08/01/27 269,711
90,867 Federal National Mortgage Association, Pool #369080,
7.6%, due 04/01/27 92,581
1,716,804 Federal National Mortgage Association, Pool #392536,
7.6%, due 08/01/27 1,749,234
287,952 Federal National Mortgage Association, Pool #201909,
7.748%, due 09/01/19 297,071
31,617 Federal National Mortgage Association, Pool #96193,
8.308%, due 09/01/18 32,361
104,200 Federal National Mortgage Association, Pool #163492,
8.5%, due 05/01/16 109,214
4,657,209 Government National Mortgage Association, Pool #80185,
5%, due 04/20/28 4,662,146
3,415,418 Government National Mortgage Association, Pool #80186,
5.5%, due 04/20/28 3,453,602
-----------
Total U.S. Government Agency Obligations (Cost: $21,008,657) 21,051,507
-----------
Total Fixed Income Securities (Cost: $41,634,716) (88.7%) 40,765,697
-----------
Short-term Investment (Cost: $4,922,392) (10.7%)
------------------------------------------------
4,922,392 Repurchase Agreement, Goldman Sachs, dated 04/30/99,
4.89%, due 05/03/99 (Collaterized by $5,184,000
current face Federal National Mortgage Corp.,
Pool #323541, 6%, due 02/01/29, valued at $5,054,400) 4,922,392
-----------
Total Investments (Cost: $46,557,108) (99.4%) 45,688,089
Excess of Other Assets Over Liabilities (0.6%) 290,377
-----------
Net Assets (100.0%) $45,978,466
===========
</TABLE>
Notes to the Schedule of Investments:
* Restricted Security (Note 8).
23
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Total Return Mortgaged-Backed Securities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Fixed Income Securities Value
---------- ----------------------- ----------
<S> <C> <C>
Collaterized Mortgage Obligations (68.5% of Net Assets)
$2,013,462 Bear Stearns Mortgage Securities, Inc. (97-2-A5),
6.875%, due 01/28/24 $1,982,621
2,000,000 CMC Securites Corp. III (94-A-A12),
6.75%, due 02/25/24 2,015,020
1,500,000 CMC Securites Corp. III (94-A-A22),
7.721%, due 02/25/24 1,205,625
4,710,119 Countrywide Funding Corp., (93-7-A5),
7.0%, due 11/25/23 4,504,381
2,000,000 Federal Home Loan Mortgage Corp. (2061-TA),
5.25%, due 10/15/27 1,793,340
974,907 Federal Home Loan Mortgage Corp. (1796-E),
6.0%, due 09/15/08 966,839
3,357,000 Federal Home Loan Mortgage Corp. (1629-PB),
6.0%, due 05/15/23 3,047,518
4,000,000 Federal Home Loan Mortgage Corp. (2121-C),
6.0%, due 02/15/29 3,689,101
1,782,000 Federal Home Loan Mortgage Corp. (1662-N),
6.25%, due 01/15/09 1,717,741
3,500,000 Federal Home Loan Mortgage Corp. (2020-D),
6.25%, due 01/15/27 3,444,490
794,376 Federal Home Loan Mortgage Corp. (1844-E),
6.5%, due 10/15/13 783,152
208,814 Federal Home Loan Mortgage Corp. (1541-J),
6.5%, due 07/15/23 209,524
1,385,226 Federal Home Loan Mortgage Corp. (1717-MA),
6.5%, due 04/15/24 1,377,095
48,237 Federal Home Loan Mortgage Corp. (1175-C),
8.0%, due 01/15/21 48,342
2,000,000 Federal Home Loan Mortgage Corp. (1620-SB),
10.0%, due 11/15/23 1,896,420
1,708,663 Federal Home Loan Mortgage Corp. (1422-SA),
11.44%, due 11/15/07 1,729,184
2,000,000 Federal National Mortgage Association (93-X-130A-NA),
6.5%, due 05/25/23 1,981,220
439,281 Federal National Mortgage Association (93-223-EA),
6.5%, due 12/25/23 440,678
386,223 Federal National Mortgage Association (93-2-B),
7.2%, due 11/25/03 393,523
1,000,000 Federal National Mortgage Association (92-215-PL),
7.25%, due 11/25/21 1,021,260
2,288,691 Federal National Mortgage Association (93-189-S),
7.445%, due 10/25/23 2,048,653
3,000,000 Federal National Mortgage Association (94-40-SA),
7.678%, due 03/25/24 2,749,290
</TABLE>
24
See accompanying notes to the financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
Collaterized Mortgage Obligations (Continued)
$2,533,014 Federal National Mortgage Association (G92-29-J),
8.0%, due 07/25/22 $ 2,598,366
1,000,000 Federal National Mortgage Association (93-202-SZ),
10.0%, due 11/25/23 983,160
3,434,600 First Union Residential Securities Trust (98-A-SA4),
7.0%, due 04/25/25 3,427,982
1,075,255 General Electric Capital Mortgage Services, Inc. (96-12-A2),
7.25%, due 07/25/11 1,074,423
3,352,511 General Electric Capital Mortgage Services, Inc. (97-5-A2),
7.5%, due 06/25/27 3,372,110
4,000,000 Government National Mortgage Association (97-2-E),
7.5%, due 02/20/27 4,077,152
922,893 Government National Mortgage Association (94-2-Z),
7.991%, due 07/16/24 922,976
2,961,401 Residential Accredit Loans, Inc. (97-QS-13-A7),
7.25%, due 12/25/27 2,987,313
2,300,000 Residential Asset Securitization Trust (98-A12-A16),
6.75%, due 11/25/28 2,297,125
2,891,277 Residential Funding Mortgage Securities I (95-S21-A6),
7.5%, due 12/26/25 2,941,672
474,574 Residential Funding Mortgage Securities I (95-S7-A9),
8.0%, due 05/25/10 20,565
181,043 Salomon Brothers Mortgage Securities VII (96-2-A1),
7.5%, due 05/01/26 183,484
-----------
Total Collaterized Mortgage Obligations (Cost: $63,986,465) 63,931,345
-----------
U.S. Government Agency Obligations (26.1%)
998 Federal Home Loan Mortgage Corp., Pool #250685,
6.5%, due 10/01/99 997
385,070 Federal Home Loan Mortgage Corp., Pool #846317,
7.319%, due 08/01/26 394,727
993,362 Federal Home Loan Mortgage Corp., Pool #846510,
7.41%, due 04/01/25 1,020,242
480,707 Federal Home Loan Mortgage Corp., Pool #755183,
7.939%, due 12/01/15 486,963
1,162,401 Federal Housing Authority (#000-13002),
7.125%, due 03/01/04 1,168,213
2,826,239 Federal Housing Authority (#012-11216),
7.185%, due 05/01/29 2,840,371
1,329,375 Federal Housing Authority (#081-11017),
7.75%, due 04/01/24 1,349,316
1,867,528 Federal Housing Authority (#044-10592),
7.875%, due 09/01/22 1,895,540
2,540,512 Federal Housing Authority (#112-43055),
9.25%, due 05/25/32 2,654,835
</TABLE>
25
See accompanying notes to the financial statements.
<PAGE>
TCW Galileo Total Return Mortgaged-Backed Securities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
U.S. Government Agency Obligations (Continued)
$ 742,562 Federal National Mortgage Association, Pool #310001,
6.0%, due 09/01/00 $ 745,116
4,726,579 Federal National Mortgage Association, Pool #413618,
6.5%, due 03/01/18 4,729,510
1,994,474 Federal National Mortgage Association (TBA),
6.5%, due 03/01/19 2,003,979*
183,524 Federal National Mortgage Association, Pool #137064,
6.897%, due 03/01/19 184,986
780,950 Federal National Mortgage Association, Pool #124410,
7.25%, due 07/01/22 802,777
381,196 Federal National Mortgage Association, Pool #348025,
7.342%, due 06/01/26 390,448
6,795 Federal National Mortgage Association, Pool #062420,
7.5%, due 03/01/06 6,946
618,231 Federal National Mortgage Association, Pool #303786,
7.5%, due 02/01/11 638,323
36,399 Federal National Mortgage Association, Pool #347216,
7.579%, due 06/01/26 37,175
11,302 Federal National Mortgage Association, Pool #029542,
8.75%, due 07/01/09 11,965
1,403,579 Government National Mortgage Association, Pool #365618,
7.0%, due 10/15/33 1,417,615
1,535,795 Government National Mortgage Association, Pool #351003,
7.5%, due 07/15/28 1,575,142
3,362 Government National Mortgage Association, Pool #176192,
8.25%, due 12/15/01 3,454
34,847 Government National Mortgage Association, Pool #3933,
8.25%, due 07/15/04 36,094
2,919 Government National Mortgage Association, Pool #217350,
9.25%, due 08/15/00 2,960
-----------
Total U.S. Government Agency Obligations (Cost: $24,255,075) 24,397,694
-----------
U.S. Treasury Securities (0.4%)
197,000 Certificates Accrual Treasury Strips, 0.0%, due 08/15/01 174,981
177,000 Certificates Accrual Treasury Strips, 0.0%, due 05/15/06 120,316
112,000 Certificates Accrual Treasury Strips, 0.0%, due 08/15/08 66,322
-----------
Total U.S. Treasury Securities (Cost: $339,079) 361,619
-----------
Total Fixed Income Securities (Cost $88,580,619) (95.0%) 88,690,658
-----------
</TABLE>
26
See accompanying notes to the financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued) April 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Short-term Investment (Cost: $3,436,636) (3.7%) Value
---------- ----------------------------------------------- -----------
<S> <C> <C>
$3,436,636 Repurchase Agreement, Goldman Sachs, dated 04/30/99,
4.89%, due 05/03/99 (Collaterized by $3,528,000
current face Federal National Mortgage Corp.,
Pool #323541, due 05/01/14, valued at $3,528,000) $ 3,436,636
-----------
Total Investments (Cost: $92,017,255) (98.7%) 92,127,294
Excess of Other Assets Over Liabilities (1.3%) 1,223,492
-----------
Net Assets (100.0%) $93,350,786
===========
</TABLE>
Notes to the Schedule of Investments:
* Securities purchased on a forward commitment with an approximate principal
amount. The actual principal amount will be determined upon settlement when
the securities are delivered to the Fund.
27
See accompanying notes to the financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Statements of Assets and Liabilities (Unaudited) April 30, 1999
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo Total Return
TCW Galileo TCW Galileo TCW Galileo Mortgage- Mortgage-
Money Core Fixed High Yield Backed Backed
Market Income Bond Securities Securities
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ------------
Dollar Amounts in Thousands
(Except per Share Amounts)
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at
Value (/1/) $ 208,162 $ 75,979 $ 202,130 $ 45,688 $ 92,127
Cash 73 2,618 5,830 -- 3
Foreign Currency, at
Value (/2/) -- 1,110 -- -- --
Receivables for
Securities Sold -- 227 3,416 190 653
Receivables for Fund
Shares Sold 62 -- 59 -- --
Interest Receivable 1,096 1,096 4,676 267 732
----------- --------- ---------- --------- ---------
Total Assets 209,393 81,030 216,111 46,145 93,515
----------- --------- ---------- --------- ---------
LIABILITIES
Distributions Payable 238 110 222 78 48
Payables for Securities
Purchased 526 7,283 -- --
Payables for Fund
Shares Redeemed -- 4 6 -- 1
Payables Upon Return of
Securities Loaned
(Note 2) -- 2,130 1,741 -- --
Management Fees 41 26 125 19 39
Other Accrued Expenses 719 77 78 70 76
----------- --------- ---------- --------- ---------
Total Liabilities 998 2,873 9,455 167 164
----------- --------- ---------- --------- ---------
NET ASSETS $ 208,395 $ 78,157 $ 206,656 $ 45,978 $ 93,351
=========== ========= ========== ========= =========
NET ASSETS CONSIST OF:
Paid-in Capital $ 208,395 $ 80,372 $ 211,140 $ 52,194 $ 94,243
Undistributed Net
Realized Gain (Loss)
on Investments -- (2,264) (6,786) (5,665) 689
Unrealized Appreciation
(Depreciation) on
Investments -- (622) 2,275 (869) 110
Undistributed
(Distributions in
excess of) Net
Investment Income -- 671 27 318 (1,691)
----------- --------- ---------- --------- ---------
NET ASSETS $ 208,395 $ 78,157 $ 206,656 $ 45,978 $ 93,351
=========== ========= ========== ========= =========
NET ASSETS ATTRIBUTABLE
TO:
Institutional Class
Shares $ 208,395 $ 78,157 $ 206,556 $ 45,978 $ 93,351
=========== ========= ========== ========= =========
Advisory Class Shares $ -- $ -- (/3/) $ 100 $ -- $ -- (/3/)
=========== ========= ========== ========= =========
CAPITAL SHARES
OUTSTANDING:
Institutional Class 208,395,478 8,003,438 21,693,156 4,777,625 9,926,514
=========== ========= ========== ========= =========
Advisory Class -- 1 10,479 -- 1
=========== ========= ========== ========= =========
NET ASSET VALUE PER
SHARE:
Institutional Class $ 1.00 $ 9.77 $ 9.52 $ 9.62 $ 9.40
=========== ========= ========== ========= =========
Advisory Class $ -- $ 9.84 $ 9.58 $ -- $ 9.54
=========== ========= ========== ========= =========
</TABLE>
(1) The identified cost for the TCW Galileo Money Market Fund, the TCW Galileo
Core Fixed Income Fund, the TCW Galileo High Yield Bond Fund, the TCW Gali-
leo Mortgage-Backed Securities Fund and the TCW Galileo Total Return Mort-
gage-Backed Securities Fund at April 30, 1999, was $208,162, $76,611,
$199,855, $46,557 and $92,017, respectively.
(2) The identified cost for the TCW Galileo Core Fixed Income Fund at April 30,
1999 was $1,093.
(3) Amount is less than $1.
28
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations (Unaudited) Six Months Ended April 30, 1999
<TABLE>
<CAPTION>
TCW
TCW Galileo
TCW TCW Galileo Total Return
Galileo Galileo TCW Mortgage- Mortgage-
Money Core Fixed Galileo Backed Backed
Market Income High Yield Securities Securities
Fund Fund Bond Fund Fund Fund
------- ---------- ---------- ---------- ------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest (Note 2) $5,477 $ 3,012 $ 9,828 $1,520 $ 3,519
------ ------- ------- ------ -------
Expenses:
Management Fees 268 176 818 109 240
Accounting Service Fees 82 17 23 15 16
Custodian Fees 26 16 13 9 12
Transfer Agent Fees 18 20 21 18 19
Audit and Tax Fees 8 8 8 11 12
Directors' Fees and
Expenses 3 3 3 3 3
Administration Fees 10 6 13 3 6
Registration Fees 4 5 14 14 15
Other 12 9 42 12 16
------ ------- ------- ------ -------
Total Expenses 431 260 955 194 339
Less Expenses Borne by
Investment Adviser 8 -- -- -- --
------ ------- ------- ------ -------
Net Expenses 423 260 955 194 339
------ ------- ------- ------ -------
Net Investment Income 5,054 2,752 8,873 1,326 3,180
------ ------- ------- ------ -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND
FOREIGN CURRENCY
Net Realized Gain (Loss)
on:
Investments -- (280) (3,823) (195) 610
Foreign Currency (37) -- -- --
Change in Unrealized
Appreciation
(Depreciation) on:
Investments -- (1,930) 10,759 (46) (2,482)
Foreign Currency -- 10 -- -- --
------ ------- ------- ------ -------
Net Realized and
Unrealized Gain (Loss)
on Investments and
Foreign Currency -- (2,237) 6,936 (241) (1,872)
------ ------- ------- ------ -------
INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS $5,054 $ 515 $15,809 $1,085 $ 1,308
====== ======= ======= ====== =======
</TABLE>
29
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo Core Fixed
Money Market Fund Income Fund
----------------------- -----------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
1999 October 31, 1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
----------- ----------- ----------- -----------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 5,054 $ 14,062 $ 2,752 $ 3,677
Net Realized Gain (Loss) on
Investments and Foreign
Currency -- -- (317) 1,270
Change in Unrealized
Appreciation (Depreciation)
on Investments and Foreign
Currency -- -- (1,920) 853
-------- -------- -------- --------
Increase in Net Assets
Resulting from Operations 5,054 14,062 515 5,800
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net
Investment Income (5,054) (14,062) (2,161) (4,170)
-------- -------- -------- --------
NET CAPITAL SHARE TRANSACTIONS
(NOTE 7):
Advisory Class -- -- -- --
-------- -------- -------- --------
Institutional Class (34,056) 19,680 (83,193) 141,998
Increase (Decrease) in Net
Assets Resulting from Net
Capital Share Transactions (34,056) 19,680 (83,193) 141,998
-------- -------- -------- --------
Increase (Decrease) in Net
Assets (34,056) 19,680 (84,839) 143,628
NET ASSETS
Beginning of Period 242,451 222,771 162,996 19,368
-------- -------- -------- --------
End of Period $208,395 $242,451 $ 78,157 $162,996
======== ======== ======== ========
</TABLE>
30
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
High Yield Mortgage-Backed
Bond Fund Securities Fund
----------------------- -----------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
1999 October 31, 1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
----------- ----------- ----------- -----------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 8,873 $ 18,130 $ 1,326 $ 1,812
Net Realized (Loss) on
Investments (3,823) (2,950) (195) (15)
Change in Unrealized
Appreciation
(Depreciation) on
Investments 10,759 (13,024) (46) 512
-------- -------- ------- --------
Increase in Net Assets
Resulting from Operations 15,809 2,156 1,085 2,309
-------- -------- ------- --------
DISTRIBUTIONS TO
SHAREHOLDERS
Distributions from Net
Investment Income (8,833) (18,426) (1,008) (593)
Distributions in Excess of
Net Investment Income -- (13) -- --
Distributions from Net
Realized Gains -- (2,884) -- (2,222)
-------- -------- ------- --------
Total Distributions to
Shareholders (8,833) (21,323) (1,008) (2,815)
-------- -------- ------- --------
NET CAPITAL SHARE TRANSACTIONS
(NOTE 7):
Institutional Class 33,879 (23,892) 2,262 (11,162)
Advisory Class 99 -- -- --
-------- -------- ------- --------
Increase (Decrease) in Net
Assets Resulting from Net
Capital Share
Transactions 33,978 (23,892) 2,262 (11,162)
-------- -------- ------- --------
Increase (Decrease) in Net
Assets 40,954 (43,059) 2,339 (11,668)
NET ASSETS
Beginning of Period 165,702 208,761 43,639 55,307
-------- -------- ------- --------
End of Period $206,656 $165,702 $45,978 $ 43,639
======== ======== ======= ========
</TABLE>
31
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo Total Return
Mortgage-Backed Securities Fund
---------------------------------
Six Months Ended
April 30, 1999 Year ended
(Unaudited) October 31, 1998
---------------- ----------------
Dollar Amounts in Thousands
<S> <C> <C>
OPERATIONS
Net Investment Income $ 3,180 $ 7,475
Net Realized Gain on Investments 610 41
Change in Unrealized (Depreciation) on
Investments (2,482) (551)
-------- --------
Increase in Net Assets Resulting from
Operations 1,308 6,965
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income (3,093) (7,762)
Distributions in Excess of Net Investment
Income (1,691) (87)
Distributions from Net Realized Gains -- (435)
-------- --------
Total Distributions to Shareholders (4,784) (8,284)
-------- --------
NET CAPITAL SHARE TRANSACTIONS (NOTE 7):
Institutional Class (4,674) 21,378
Advisory Class -- --
-------- --------
Increase (Decrease) in Net Assets Resulting
from Net Capital Share Transactions (4,674) 21,378
-------- --------
Increase (Decrease) in Net Assets (8,150) 20,059
NET ASSETS
Beginning of Period 101,501 81,442
-------- --------
End of Period $ 93,351 $101,501
======== ========
</TABLE>
32
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) April 30, 1999
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 20 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. For the period November 1,
1998 through February 28, 1999, TCW Funds Management, Inc. was also the
administrator of the Funds day-to-day operations. As of March 1, 1999,
Investors Bank & Trust Company became the administrator of the Funds. 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. 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 Total
Return Mortgage-Backed Securities Fund (formerly 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 thirteen non-diversified equity
funds (the TCW Galileo Select Equities Fund (formerly TCW Galileo Core Equities
Fund), the TCW Galileo Earnings Momentum Fund, the TCW Galileo Aggressive
Growth Equities Fund (formerly TCW Galileo Mid-Cap Growth Fund), the TCW
Galileo Small Cap Growth 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.
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 Total Return
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
Select Equities 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 Aggressive Growth Equities 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
33
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
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 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 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 (20) the TCW Galileo Large
Cap Value Fund seeks long-term capital appreciation by investing primarily in
publicly traded equity securities of large capitalization companies.
As of March 1, 1999, nine funds (TCW Galileo Select Equities Fund, TCW Galileo
Large Cap Value Fund, TCW Galileo Large Cap Growth Fund, TCW Galileo Aggressive
Growth Equities Fund, TCW Galileo Small Cap Growth Fund, TCW Galileo European
Equities Fund, TCW Galileo Core Fixed Income Fund, TCW Galileo Total Return
Mortage-Backed Securities Fund and TCW Galileo High Yield Bond Fund) commenced
offering two classes of shares, Institutional Class shares and Advisory Class
shares. Shares of each class of the Funds represent an equal pro rata interest
in the Funds and generally gives the shareholder the same voting, dividend,
liquidation, and other rights. The Institutional Class shares are offered at
the current net asset value. The Advisory Class shares are also offered at the
current net asset value, but are subject to fees imposed under a distribution
plan adopted pursuant to Rule 12b-1 under the 1940 Act.
The following is a summary of significant accounting policies which are in
conformity with generally accepted accounting principles and which are
consistently followed by the Funds in the preparation of their financial
statements. The preparation of the financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements
Note 2 -- Significant Accounting Policies
Principles of Accounting: The Funds use the accrual method of accounting for
financial reporting purposes.
Security Valuations: The value of securities held in the TCW Galileo Money Mar-
ket Fund is determined by using the amortized cost method applied to each indi-
vidual security unless, due
34
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
to special circumstances, the use of such a method would result in a valuation
that does not approximate fair market value. All other securities, including
the bond fund securities, for which over-the-counter market quotations are
readily available, are valued at the latest bid price prior to the time of val-
uation.
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 un-
der the general supervision of the Company's Board of Directors.
For Funds other than TCW Galileo Money Market Fund, 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. Interest income is recorded on the accrual
basis. The TCW Galileo Core Fixed Income Fund and the TCW Galileo High Yield
Bond Fund recognize as interest income discounts on securities purchased using
a constant yield to maturity accretion method. Original issue discount is
accreted as interest income using a constant yield to maturity method. Premiums
on securities purchased are not amortized, except for mortgage backed
obligations for which amortization has been elected as allowed by federal
income tax regulations and securities held by the TCW Galileo Core Fixed Income
Fund. Realized and unrealized gains and losses on investments are recorded on
the basis of specific identification.
Dollar Roll Transactions: The Funds may enter into dollar roll transactions
with financial institutions to take advantage of opportunities in the mortgage
backed securities market. A dollar roll transaction involves a simultaneous
sale by the Fund of securities that it holds with an agreement to repurchase
substantially similar securities at an agreed upon price and date, but
generally will be collateralized at time of delivery by different pools of
mortgages with different prepayment histories than those securities sold. These
transactions are accounted for as financing transactions as opposed to sales
and purchases. The differential between the sale price and the repurchase price
is recorded as deferred income and recognized between the settlement dates of
the sale and repurchase. During the period between the sale and repurchase, the
Fund will not be entitled to receive interest and principal payments on the
securities sold. Dollar roll transactions involve risk that the market value of
the security sold by the Fund may decline below the repurchase price of the
security. There were no such transactions outstanding as of April 30, 1999.
Repurchase Agreements: The Funds may invest in repurchase agreements secured by
U.S. Government obligations and in other securities. Securities pledged as col-
lateral 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; how-
ever, in the event of default or bankruptcy by the other party to the agree-
ments, realization and/or retention of the collateral may be subject to legal
proceedings.
35
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Security Lending: The Funds may lend their securities to qualified brokers. The
loans are collateralized at all times with cash or securities with a market
value at least equal to the market value of the securities on loan. As with
other extensions of credit, the Funds may bear the risk of delay in recovery or
even loss of rights in the collateral if the borrowers of the securities fail
financially. The Funds receive compensation for lending their securities. At
April 30, 1999, the following Funds loaned securities that were collateralized
in cash which was invested in short-term investments:
<TABLE>
<CAPTION>
Securities
Market Value of Lending
Loaned Securities Collateral Value Fees
----------------- ---------------- ----------
<S> <C> <C> <C>
TCW Galileo Core Fixed Income
Fund $2,084,688 $2,129,500 $176
TCW Galileo High Yield Bond Fund 1,698,108 1,740,750 734
</TABLE>
Securities lending fees are included in interest income in the Statements of
Operations.
Allocation of Operating Activity: Investment income, common expenses and real-
ized and unrealized gains and losses are allocated among the classes of shares
of the Funds based on the relative net assets of each class. Distribution fees,
which are directly attributable to a class of shares, are charged to that
class' operations. 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 di-
viding the net assets of the Fund by the number of issued and outstanding
shares on each business day as of 9:00 A.M. Pacific Standard Time for the TCW
Galileo Money Market Fund and as of 1:00 P.M. Pacific Standard Time for the
other Funds.
Dividends and Distributions: Dividends from net investment income of the TCW
Galileo Money Market Fund are declared each business day. The other fixed in-
come funds declare and pay, or reinvest, dividends from net investment income
monthly. Distribution of any net long-term and net short-term capital gains
earned by a Fund will be distributed at least annually.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign cur-
rency transactions, market discount, losses deferred to wash sales and excise
tax regulations. Permanent book and tax basis differences relating to share-
holder 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 re-
quires 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.
36
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
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
April 30, 1999, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows:
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo TCW Galileo TCW Galileo Total Return
Core Fixed High Yield Mortgage- Mortgage-
Income Bond Backed Backed
Fund Fund Securities Fund Securities Fund
----------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 619,937 $ 4,664,413 $ 133,059 $ 3,541,769
Unrealized (Depreciation) (1,252,630) (2,389,587) (1,002,075) (3,431,730)
----------- ------------ ----------- -----------
Net Unrealized
Appreciation (Depreciation) $ (632,693) $ 2,274,826 $ (869,016) $ 110,039
=========== ============ =========== ===========
Cost of Investments for
Federal Income Tax Purposes $76,611,214 $199,855,346 $46,557,108 $92,017,255
=========== ============ =========== ===========
</TABLE>
At April 30, 1999, the following Funds had net realized loss carryforwards for
federal income tax purposes (in thousands):
<TABLE>
<CAPTION>
Expiring in
----------------------------
2002 2003 2004 2005 2006
---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C>
TCW Galileo Core Fixed Income Fund $641 $ 644 $ -- $-- $ --
TCW Galileo High Yield Bond Fund -- -- -- -- 2,560
TCW Galileo Mortgage-Backed Securities Fund 446 4,068 861 73 15
</TABLE>
Note 4 -- Investment Advisory and Accounting Service Fees
The Funds pay to the Adviser, as compensation for services rendered, facilities
furnished and expenses borne by it, the following annual management fees:
<TABLE>
<S> <C>
TCW Galileo Money Market Fund 0.25%
TCW Galileo Core Fixed Income Fund 0.40%
TCW Galileo High Yield Bond Fund 0.75%
TCW Galileo Mortgage-Backed Securities Fund 0.50%
TCW Galileo Total Return Mortgage-Backed Securities Fund 0.50%
</TABLE>
For the period November 1, 1998 through February 28, 1999, when the Adviser was
the administrator of the Funds, the TCW Galileo Money Market Fund reimbursed
the Adviser for the cost of providing accounting services in an amount not
exceeding an annual rate of 0.10% of the Fund's average daily net assets. Each
of the other Funds also reimbursed the Adviser for the cost of providing
accounting services in an amount not exceeding $35,000 for any fiscal year.
The ordinary operating expenses of the TCW Galileo Money Market Fund is limited
to 0.40% of the Fund's daily net assets. The ordinary operating expenses of the
other funds are limited to, the average of the total expense ratios as reported
by Lipper Analytical Services, Inc. for each Fund's respective investment
objective, which is subject to change
37
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 4 -- Investment Advisory and Accounting Service Fees (continued)
on a monthly basis. At April 30, 1999, the ordinary operating expenses for the
TCW Core Fixed Income Fund, the TCW Galileo High Yield Bond Fund, the TCW
Galileo Mortgage-Backed Securities Fund and the TCW Galileo Total Return
Mortgage-Backed Securities Fund were limited to 1.00%, 1.30%, 0.90% and 1.00%,
respectively of each Fund's daily net assets.
Effective May 1, 1999, the ordinary operating expenses of the TCW Galileo Mort-
gage-Backed Securities Fund is limited to 0.53% of daily net assets.
Certain officers and/or directors of the Company are officers and/or directors
of the Adviser.
Note 5 -- Distribution Plan
The Company has a distribution plan pursuant to Rule 12b-1 under the 1940 Act
with respect to the Advisory Class shares of each Fund. Under the terms of the
Distribution Plan, each Fund compensates the Distributor at a rate equal to
0.25% of the average daily net assets of the Fund attributable to its Advisory
Class shares for distribution and related services. Distribution fees for the
period March 1, 1999 (Commencement of offering of Advisory Class shares) were
less than $1,000 for each Fund and as a result, are not disclosed in the State-
ments of Operations.
Note 6 -- Purchases and Sales of Securities
Investment transactions (excluding short-term investments) for the six months
ended April 30, 1999, were as follows:
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
TCW Galileo TCW Galileo Mortgage- Total Return
Core Fixed High Yield Backed Mortgage-Backed
Income Fund Bond Fund Securities Fund Securities Fund
----------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
Purchases at Cost $31,112,474 $195,616,220 $ 1,957,299 $ 6,607,381
=========== ============ =========== ===========
Sales Proceeds $63,060,314 $156,807,126 $ 2,815,960 $ 5,226,254
=========== ============ =========== ===========
U.S. Government
Purchases at Cost $23,637,247 $ -- $12,192,830 $ 9,940,779
=========== ============ =========== ===========
U.S. Government
Sales Proceeds $49,988,929 $ -- $ 8,511,284 $14,662,812
=========== ============ =========== ===========
</TABLE>
Note 7 -- Capital Share Transactions
The Declaration of Trust permits the Trustees to issue an unlimited number of
shares of beneficial interest (without par value). Transaction in each Fund's
shares were as follows:
<TABLE>
<CAPTION>
TCW Galileo Money Six Months Ended
Market Fund April 30, 1999 Year Ended
(Unaudited) October 31, 1998
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Sold 1,275,915,599 $ 1,275,916 3,148,816,550 $ 3,148,816
Shares Issued Upon
Reinvestment of
Dividends 3,900,281 3,900 8,491,656 8,492
Shares Redeemed (1,313,871,899) (1,313,872) (3,137,627,742) (3,137,628)
-------------- ----------- -------------- -----------
Net Increase (Decrease) (34,056,019) $ (34,056) 19,680,464 $ 19,680
============== =========== ============== ===========
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 7 -- Capital Share Transactions (continued)
<TABLE>
<CAPTION>
TCW Galileo Core Fixed Six Months Ended
Income Fund April 30, 1999 Year Ended
Institutional Class (Unaudited) October 31, 1998
-------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 1,267,595 $ 12,508 22,816,543 $224,517
Shares Issued Upon
Reinvestment of
Dividends 211,457 2,082 263,818 2,578
Shares Redeemed (9,954,106) (97,783) (8,614,835) (85,097)
---------- -------- ---------- --------
Net Increase (Decrease) (8,475,054) $(83,193) 14,465,526 $141,998
========== ======== ========== ========
</TABLE>
<TABLE>
<CAPTION>
TCW Galileo Core Fixed Income Fund Period Ended
Advisory Class Advisory April 30, 1999 (/1/)
(Unaudited)
---------------------
Amount
Shares (in thousands)
------ --------------
<S> <C> <C>
Shares Sold 1 $ -(/2/)
--- ---
Net Increase 1 $ -
=== ===
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999.
(2) Amount is less than $1.
<TABLE>
<CAPTION>
TCW Galileo High Yield Six Months Ended
Bond Fund April 30, 1999 Year Ended
Institutional Class (Unaudited) October 31, 1998
-------------------------- ---------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
Shares Sold 10,679,399 $ 99,798 8,469,692 $ 84,380
Shares Issued Upon
Reinvestment of
Dividends 915,625 8,615 1,952,231 19,439
Shares Redeemed (7,906,976) (74,534) (13,063,683) (127,711)
---------- -------- ----------- ---------
Net Increase (Decrease) 3,688,048 $ 33,879 (2,641,760) $ (23,892)
========== ======== =========== =========
</TABLE>
39
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
U.S. Fixed Income
Note 7 -- Capital Share Transactions (continued)
<TABLE>
<CAPTION>
TCW Galileo High Yield Bond Fund Period Ended
Advisory Class April 30, 1999 (/1/)
(Unaudited)
-----------------------
Amount
Shares (in thousands)
------- --------------
<S> <C> <C>
Shares Sold 26,089 $ 250
Shares Issued Upon Reinvestment
of Dividends 68 --
Shares Redeemed (15,678) (150)
------- -----
Net Increase 10,479 $ 100
======= =====
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999.
<TABLE>
<CAPTION>
TCW Galileo Mortgage- Six Months Ended
Backed April 30, 1999 Year Ended
Securities Fund (Unaudited) October 31, 1998
-------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 355,847 $ 3,458 2,948,909 $ 28,585
Shares Issued Upon
Reinvestment of
Dividends 70,337 675 242,345 2,343
Shares Redeemed (195,033) (1,871) (4,345,900) (42,090)
---------- -------- ---------- --------
Net Increase (Decrease) 231,151 $ 2,262 (1,154,646) $(11,162)
========== ======== ========== ========
<CAPTION>
TCW Galileo Total Six Months Ended
Return Mortgage-Backed April 30, 1999 Year Ended
Securities Fund (Unaudited) October 31, 1998
Institutional Class -------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 1,003,192 $ 9,569 2,490,553 $ 24,464
Shares Issued Upon
Reinvestment of
Dividends 522,730 4,990 782,364 7,673
Shares Redeemed (2,000,281) (19,233) (1,090,917) (10,759)
---------- -------- ---------- --------
Net Increase (Decrease) (474,359) $ (4,674) 2,182,000 $ 21,378
========== ======== ========== ========
</TABLE>
40
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 7 -- Capital Share Transactions (continued)
<TABLE>
<CAPTION>
TCW Galileo Total Return Mortgage- Period Ended
Backed Securities Fund Advisory Class April 30, 1999 (/1/)
(Unaudited)
---------------------
Amount
Shares (in thousands)
------ --------------
<S> <C> <C>
Shares Sold 1 $ -(/2/)
--- ---
Net Increase 1 $ -
=== ===
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999.
(2) Amount is less than $1.
Note 8 -- Restricted Securities
The following restricted securities held by the Funds as of April 30, 1999,
were valued both at the date of acquisition and April 30, 1999, 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 Core Fixed Income Fund:
<TABLE>
<CAPTION>
Principal Date of
Amount Investment Acquisition Cost
--------- --------------------------------------- ----------------- --------
<C> <S> <C> <C>
$100,000 AK Steel Corp., (144A), 7.875%, due 02/05/99
02/10/99 $ 99,686
75,000 American Axle and Manufacturing, Inc., 03/02/99 74,421
(144A), 9.75%, due 03/01/09
75,000 American Media Operations, (144A), 04/30/99 75,000
10.25%, due 05/01/09
50,000 BE Aerospace, Inc., (144A), 9.5%, due 10/28/98
11/01/08 50,000
29,000 Boyds Collection, Ltd., (144A), 9%, due 05/06/98-07/29/98
05/15/08 29,308
75,000 Bresnan Communications, (144A), 01/25/99-03/10/99 74,938
8%, due 02/01/09
75,000 Bresnan Communications, (144A), 01/25/99 47,998
9.25%, due 02/01/09
75,000 Chancellor Media Corp., (144A), 09/25/98 75,000
9%, due 10/01/08
500,000 Chancellor Media Corp., (144A), 11/11/98 496,147
8%, due 11/01/08
100,000 Charter Communication Holdings, LLC., 03/12/99 62,155
(144A), 0%, due 04/01/11
75,000 Classic Cable, Inc., (144A), 07/21/98-07/22/98 75,359
9.875%, due 08/01/08
</TABLE>
41
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 8 -- Restricted Securities (continued)
<TABLE>
<CAPTION>
Principal Date of
Amount Investment Acquisition Cost
--------- --------------------------------------- ----------------- --------
<C> <S> <C> <C>
$ 75,000 Consumers Packaging, Inc., (144A), 01/26/99 $ 75,000
9.75%, due 02/01/07
100,000 Echostar DBS Corp., (144A), 9.375%, due 01/15/99 103,047
02/01/09
20,000 Garden State Newspapers, (144A), 03/10/99 19,809
8.625%, due 07/01/11
5,000 Geo Specialty Chemicals, (144A), 10/28/98 4,479
10.125%, due 08/01/08
75,000 Golden Northwest Aluminum, Inc., 12/14/98 75,000
(144A),
12%, due 12/15/06
95,000 Hayes Lemmerz International Inc., 12/07/98 95,000
(144A),
8.25%, due 12/15/08
100,000 Hollywood Park, Inc., (144A), 9.25%, 02/12/99 100,000
due 02/15/07
350,000 Huntsman Corp., (144A), 9.5%, due 11/04/98 343,556
07/01/07
600,000 IMC Global Inc., (144A), 6.5%, due 04/22/99 603,011
08/01/03
220,000 Insilco Corp., (144A), 12%, due 04/03/99 220,000
08/15/07
100,000 Intermedia Communications, Inc., 02/19/99 99,551
(144A),
9.5%, due 03/01/09
100,000 King Pharmaceutical, Inc., (144A), 02/26/99 100,000
10.75%, due 02/15/09
100,000 Marvel Enterprises, Inc., (144A), 12%, 02/17/99 100,000
due 06/15/09
300,000 McLeod USA, Inc., (144A), 8.125%, due 02/12/99-04/07/99 301,031
02/15/09
50,000 Mrs. Fields Co., (144A), 10.125%, due 08/13/98 48,620
12/01/04
75,000 NCI Building Systems, Inc., (144A), 04/30/99 75,000
9.25%, due 05/01/09
100,000 Neenah Corp., (144A), 11.125%, due 11/19/98 103,450
05/01/07
100,000 New World Pasta Co., (144A), 9.25%, due 02/11/99-03/19/99 100,434
02/15/09
575,000 NEXTLINK Communications, Inc., (144A), 11/04/98 575,000
10.75%, due 11/15/08
100,000 Panolam Industries International, 02/10/99 100,000
(144A),
11.5%, due 02/15/09
15,000 Park Place Entertainment, (144A), 12/14/98 15,000
7.875%, due 12/15/05
100,000 Scotts Co., (144A), 8.625%, due 01/14/99 100,000
01/15/09
125,000 SFX Entertainment, Inc., (144A), 01/13/99-01/26/99 126,451
9.125%, due 12/01/08
75,000 Simmons Co., (144A), 10.25%, due 03/10/99 75,000
03/16/99
500,000 Station Casinos, Inc., (144A), 9.75%, 10/27/98-11/19/98 509,972
due 04/15/07
75,000 United Industries Corp., (144A), 03/19/99 75,000
9.875%, due 04/01/09
25,000 Von Hoffman Press, Inc., (144A), 10/03/97 27,082
10.375%, due 05/15/07
</TABLE>
The total value of restricted securities is $5,462,641, which represents 7.0%
of net assets of the Fund at April 30, 1999.
42
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 8 -- Restricted Securities (continued)
TCW Galileo High Yield Bond Fund:
<TABLE>
<CAPTION>
Principal Date of
Amount Investment Acquisition Cost
--------- ------------------------------------ ----------------- ----------
<C> <S> <C> <C>
$ 825,000 Adelphia Communications Corp., 11/16/98 $ 840,469
(144A),
8.375%, due 02/01/08
1,100,000 AK Steel Corp., (144A), 02/05/99 1,097,029
7.875%, due 02/10/99
825,000 American Axle and Manufacturing, 03/02/99 818,565
Inc., (144A), 9.75%, due 03/01/09
1,200,000 American Media Operations, (144A), 04/30/99 1,200,000
10.25%, due 05/01/09
295,000 BE Aerospace , Inc., (144A), 10/28/98 295,000
9.5%, due 11/01/08
383,000 Boyds Collection, Ltd., (144A), 05/06/98-07/29/98 387,185
9%, due 05/15/08
590,000 Bresnan Communications, (144A), 01/25/99-03/10/99 589,504
8%, due 02/01/09
665,000 Bresnan Communications, (144A), 01/25/99 427,672
9.25%, due 02/01/09
85,000 Building Materials Corp., (144A), 10/26/98 83,781
8.625%, due 12/15/06
250,000 California Steel Industries, (144A), 03/30/99 250,000
8.5%, due 04/01/09
1,245,000 Chancellor Media Corp., (144A), 11/11/98 1,234,754
8%, due 11/01/08
585,000 Chancellor Media Corp., (144A), 09/25/98 585,000
9%, due 10/01/08
1,700,000 Charter Communication Holdings, 03/12/99 1,043,698
LLC., (144A),
0%, due 04/01/11
1,205,000 Classic Cable, Inc., (144A), 9.875%, 07/21/98-12/11/98 1,242,779
due 08/01/08
1,100,000 Classic Communications, (144A), 03/08/99 735,625
0%, due 08/01/09
665,000 Consumers Packaging, Inc., (144A), 01/26/99 665,000
9.75%, due 02/01/07
1,980,000 Echostar DBS Corp., (144A), 01/15/99 1,992,188
9.375%, due 02/01/09
850,000 Emmis Communications Corp., (144A), 02/09/99-03/03/99 846,657
8.125%, due 03/15/09
350,000 GST Telecommunications, Inc., 03/18/99-03/19/99 317,938
(144A),
0%, due 05/01/08
350,000 GS Escrow Corp., (144A), 7.125%, due 07/30/98 1,569,555
08/01/05
350,000 Garden State Newspapers, (144A), 03/10/99 346,685
8.625%, due 07/01/11
75,000 Geo Specialty Chemicals, (144A), 10/28/98 67,344
10.125%, due 08/01/08
</TABLE>
43
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 8 -- Restricted Securities (continued)
<TABLE>
<CAPTION>
Principal Date of
Amount Investment Acquisition Cost
--------- ----------------------------------- ----------------- ----------
<C> <S> <C> <C>
$ 955,000 Golden Northwest Aluminum, Inc., 12/14/98 $ 955,000
(144A),
12%, due 12/15/06
2,050,000 Hayes Lemmerz International Inc., 12/07/98-01/05/99 2,052,000
(144A),
8.25%, due 12/15/08
1,165,000 Hollywood Park, Inc., (144A), 02/12/99 1,165,000
9.25%, due 02/15/07
915,000 Huntsman Corp., (144A), 9.5%, due 11/03/98 898,471
07/01/07
620,000 Insilco Corp., (144A), 12%, due 11/02/98 620,000
08/15/07
2,485,000 Intermedia Communications, Inc., 02/19/99 2,473,968
(144A),
9.5%, due 03/01/09
1,165,000 King Pharmaceutical, Inc., (144A), 02/26/99 1,165,000
10.75%, due 02/15/09
1,245,000 Marvel Enterprises, Inc., (144A), 02/17/99 1,245,000
12%, due 06/15/09
1,775,000 McLeod USA, Inc., (144A), 8.125%, 02/12/99-04/07/99 1,776,899
due 02/15/09
351,000 Mrs. Fields Co., (144A), 10.125%, 08/13/98 341,312
due 12/01/04
770,000 Mohegan Tribal Gaming, (144A), 02/24/99 770,000
8.75%, due 01/01/09
1,000,000 NCI Building Systems, Inc., (144A), 04/30/99 1,000,000
9.25%, due 05/01/09
825,000 Neenah Corp., (144A), 11.125%, due 11/19/98 853,875
05/01/07
1,315,000 New World Pasta Co., (144A), 02/11/99-03/19/99 1,319,625
9.25%, due 02/15/09
2,405,000 NEXTLINK Communications, Inc., 11/04/98-12/16/98 2,405,000
(144A),
10.75%, due 11/15/08
1,140,000 Panolam Industries International, 02/10/99-02/23/99 1,145,500
(144A), 11.5%, due 02/15/09
1,725,000 Packaging Corp. America, (144A), 03/31/99-04/28/99 1,771,813
9.625%, due 04/01/09
350,000 Park Place Entertainment, (144A), 12/14/98 350,000
7.875%, due 12/15/05
1,205,000 Scotts Co., (144A), 8.625%, due 01/14/99 1,205,000
01/15/09
1,495,000 SFX Entertainment, Inc., (144A), 01/13/99-01/26/99 1,521,750
9.125%, due 12/01/08
650,000 Simmons Co., (144A), 10.25%, due 03/10/99 650,000
03/16/99
1,655,000 Station Casinos, Inc., (144A), 10/27/98-11/19/98 1,680,438
9.75%, due 04/15/07
400,000 Tenet Healthcare Corp., (144A), 03/23/99 396,026
8.125%, due 12/01/08
2,550,000 TV Guide, Inc., (144A), 8.125%, due 02/23/99-02/26/99 2,549,367
03/01/09
400,000 United Industries Corp., (144A), 03/19/99 400,000
9.875%, due 04/01/09
2,075,000 Verio, Inc., (144A), 11.25%, due 11/20/98 2,075,000
12/01/08
680,000 Von Hoffman Press, Inc., (144A), 10/03/97 737,456
10.375%, due 05/15/07
</TABLE>
The total value of restricted securities is $51,778,423, which represents 25.1%
of net assets of the Fund at April 30, 1999.
44
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued) April 30, 1999
Note 8 -- Restricted Securities (continued)
TCW Galileo Mortgage Backed Securities Fund:
<TABLE>
<CAPTION>
Principal Date of
Amount Investment Acquisition Cost
--------- ----------------------------------- ---------------- ----------
<C> <S> <C> <C>
$ 606,356 Greenwich Capital Acceptance, Inc., 03/21/91 $ 600,368
(91-03) (Private Placement), 9.46%
due 03/01/21
</TABLE>
The total value of restricted securities is $586,649, which represents 1.3% of
net assets of the Fund at April 30, 1999.
45
<PAGE>
TCW Galileo Money Market Fund
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ten Months
Ended Year Ended October 31, Ended
April 30, 1999 ------------------------------------- October 31,
(Unaudited) 1998 1997 1996 1995 1994
-------------- -------- -------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- --------
Income from Investment
Operations:
Net Investment Income .0079 0.0519 0.0516 0.0509 0.0549 0.0304
-------- -------- -------- -------- ------- --------
Less Distributions:
Distributions from Net
Investment Income (.0079) (0.0519) (0.0516) (0.0509) (0.0549) (0.0304)
-------- -------- -------- -------- ------- --------
Net Asset Value per
Share, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= ========
Total Return 2.36% (/2/) 5.31% 5.29% 5.21% 5.67% 3.04% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $208,395 $242,451 $222,771 $233,671 $86,302 $124,392
Ratio of Net Expenses to
Average Net Assets (2) 0.40% (/3/) 0.40% 0.40% 0.40% 0.40% 0.40% (/3/)
Ratio of Net Investment
Income to Average Net
Assets (4) 4.71% (/3/) 5.19% 5.17% 5.04% 5.49% 3.65% (/3/)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the six-months ended April 30, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Adviser has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.40% of net assets as
disclosed in Note 4 of the Notes to Financial Statements. Had such action
not been taken, total annualized operating expenses as a percentage of
average net assets would have been 0.40% for the six months ended April 30,
1999, 0.41%, 0.40%, 0.44%, and 0.46% for the fiscal years ended October 31,
1998, 1997, 1996 and 1995, respectively, and 0.68% for the ten months ended
October 31, 1994.
46
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ten Months
Ended Year Ended October 31, Ended
April 30, 1999 ----------------------------------- October 31,
(Unaudited) 1998 1997 1996 1995 1994
-------------- -------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 9.89 $ 9.62 $ 9.45 $ 9.61 $ 8.94 $ 10.04
------- -------- ------- ------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.33 0.55 0.58 0.55 0.58 0.44
Net Realized and
Unrealized Gain (Loss)
on Investments (0.20) 0.29 0.19 (0.16) 0.62 (1.16)
------- -------- ------- ------- ------- -------
Total from Investment
Operations 0.12 0.84 0.77 0.39 1.20 (0.72)
------- -------- ------- ------- ------- -------
Less Distributions:
Distributions from Net
Investment Income (0.25) (0.57) (0.60) (0.55) (0.53) (0.38)
------- -------- ------- ------- ------- -------
Net Asset Value per
Share, End of Period $ 9.77 $ 9.89 $ 9.62 $ 9.45 $ 9.61 $ 8.94
======= ======== ======= ======= ======= =======
Total Return 1.30% (/2/) 9.02% 8.45% 4.26% 13.92% (7.24)% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $78,157 $162,996 $19,368 $25,006 $36,236 $50,153
Ratio of Expenses to
Average Net Assets 0.56% (/3/) 0.62% 0.93% 0.76% 0.68% (/2/) 0.50% (/3/)(/4/)
Ratio of Net Investment
Income to Average Net
Assets 5.94% (/3/) 5.60% 6.13% 5.85% 6.38% 6.11% (/3/)
Portfolio Turnover Rate 61.75% (/2/) 272.77% 142.96% 238.73% 223.78% 208.63% (/1/)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the six-months ended April 30, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.50% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.72% for the fiscal year ended October 31, 1995 and 0.68% for the ten
months ended October 31, 1994.
47
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Core Fixed Income Fund
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
April 30, 1999
(Unaudited)
--------------
<S> <C>
Net Asset Value per Share, Beginning of Period $9.74
-----
Income from Investment Operations:
Net Investment Income 0.07
Net Realized and Unrealized Gain on Investments 0.03
-----
Total from Investment Operations 0.10
-----
Net Asset Value per Share, End of Period $9.84
=====
Total Return 1.03% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ -- (/3/)
Ratio of Expenses to Average Net Assets --% (/2/)
Ratio of Net Investment Income to Average Net Assets 4.33% (/2/)
Portfolio Turnover Rate 61.75% (/1/)
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999 and not indicative of a full year's operat-
ing results.
(2) Annualized.
(3) Amount less than $1.
48
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ten Months
Ended Year Ended October 31, Ended
April 30, 1999 ------------------------------------- October 31,
(Unaudited) 1998 1997 1996 1995 1994
-------------- -------- -------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 9.20 $ 10.11 $ 9.77 $ 9.74 $ 9.43 $ 10.12
-------- -------- -------- -------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.38 0.88 0.91 0.89 0.92 0.73
Net Realized and
Unrealized Gain (Loss)
on Investments 0.32 (0.74) 0.34 0.03 0.39 (0.77)
-------- -------- -------- -------- ------- -------
Total from Investment
Operations 0.70 0.14 1.25 0.92 1.31 (0.04)
-------- -------- -------- -------- ------- -------
Less Distributions:
Distributions from Net
Investment Income (0.38) (0.89) (0.91) (0.89) (1.00) (0.65)
Distributions in Excess
of Net Investment
Income -- (0.01) -- -- -- --
Distributions from Net
Realized Gains -- (0.15) -- -- -- --
-------- -------- -------- -------- ------- -------
Total Distributions (0.38) (1.05) (0.91) (0.89) (1.00) (0.65)
-------- -------- -------- -------- ------- -------
Net Asset Value per
Share, End of Period $ 9.52 $ 9.20 $ 10.11 $ 9.77 $ 9.74 $ 9.43
======== ======== ======== ======== ======= =======
Total Return 7.69% (/2/) 1.18% 13.26% 9.92% 14.65% (0.34)% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $206,556 $165,702 $208,761 $183,815 $92,652 $90,577
Ratio of Expenses to
Average Net Assets 0.88% (/3/) 0.85% 0.83% 0.90% 0.87% (/4/) 0.79% (/3/)(/4/)
Ratio of Net Investment
Income to Average Net
Assets 8.20% (/3/) 8.89% 9.10% 9.21% 9.60% 9.18% (/3/)
Portfolio Turnover Rate 77.27% (/2/) 92.24% 109.45% 82.56% 36.32% 34.01% (/1/)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the six-months ended April 30, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.79% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.88% for the fiscal year ended October 31, 1995 and 0.91% for the ten
months ended October 31, 1994.
49
See accompanying notes to financial statements.
<PAGE>
TCW Galileo High Yield Bond Fund
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
April 30, 1999
(Unaudited)
--------------
<S> <C>
Net Asset Value per Share, Beginning of Period $ 9.39
------
Income from Investment Operations:
Net Investment Income 0.08
Net Realized and Unrealized Gain on Investments 0.17
------
Total from Investment Operations 0.25
------
Less Distributions:
Distributions from Net Investment Income (0.06)
------
Total Distributions (0.06)
------
Net Asset Value per Share, End of Period $ 9.58
======
Total Return 2.69% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 100
Ratio of Expenses to Average Net Assets 1.16% (/2/)
Ratio of Net Investment Income to Average Net Assets 7.87% (/2/)
Portfolio Turnover Rate 77.27% (/1/)
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999 and not indicative of a full year of
operating results.
(2) Annualized.
50
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Mortgage-Backed Securities Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ten Months
Ended Year Ended October 31, Ended
April 30, 1999 ---------------------------------- October 31,
(Unaudited) 1998 1997 1996 1995 1994
-------------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 9.60 $ 9.70 $ 9.67 $ 9.58 $ 9.41 $ 9.86
------- ------- ------- ------- ------- --------
Income (Loss) from
Investment Operations:
Net Investment Income 0.29 0.35 0.58 0.51 0.67 0.42
Net Realized and
Unrealized Gain (Loss)
on Investments (0.05) 0.10 0.05 0.22 0.25 (0.48)
------- ------- ------- ------- ------- --------
Total from Investment
Operations 0.24 0.45 0.63 0.73 0.92 (0.06)
------- ------- ------- ------- ------- --------
Less Distributions:
Distributions from Net
Investment Income (0.22) (0.11) (0.38) (0.46) (0.71) (0.39)
Distributions in Excess
of Net Investment
Income -- -- (0.22) (0.18) (0.04) --
Distributions from Paid-
in-Capital -- (0.44) -- -- -- --
------- ------- ------- ------- ------- --------
Total Distributions (0.22) (0.55) (0.60) (0.64) (0.75) (0.39)
------- ------- ------- ------- ------- --------
Net Asset Value per
Share, End of Period $ 9.62 $ 9.60 $ 9.70 $ 9.67 $ 9.58 $ 9.41
======= ======= ======= ======= ======= ========
Total Return 2.53% (/2/) 4.73% 6.71% 7.86% 10.16% (0.61)% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $45,978 $43,639 $53,307 $61,835 $81,366 $134,948
Ratio of Expenses to
Average Net Assets 0.89% (/3/) 0.83% 0.77% 0.69% 0.61% (/4/) 0.55% (/3/)(/4/)
Ratio of Net Investment
Income to Average Net
Assets 6.09% (/3/) 3.61% 6.00% 5.34% 7.13% 5.18% (/3/)
Portfolio Turnover Rate 29.17% (/2/) 68.40% 109.91% 54.10% 37.83% 65.64% (/4/)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the six months ended April 30, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.55% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.63% for the fiscal year ended October 31, 1995 and 0.62% for the ten
months ended October 31, 1994.
51
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Total Return Mortgage-Backed Securities Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ten Months
Ended Year Ended October 31, Ended
April 30, 1999 ------------------------------------ October 31,
(Unaudited) 1998 1997 1996 1995 1994
-------------- -------- ------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 9.76 $ 9.91 $ 9.56 $ 9.56 $ 8.95 $ 10.07
------- -------- ------- -------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.32 0.84 0.75 0.68 0.72 0.63
Net Realized and
Unrealized Gain (Loss)
on Investments (0.20) (0.07) 0.32 0.02 0.71 (1.26)
------- -------- ------- -------- ------- -------
Total from Investment
Operations 0.12 0.77 1.07 0.70 1.43 (0.63)
------- -------- ------- -------- ------- -------
Less Distributions:
Distributions from Net
Investment Income (0.31) (0.86) (0.72) (0.68) (0.82) (0.49)
Distributions in Excess
of Net Investment
Income (0.17) (0.01) -- (0.02) -- --
Distributions from Net
Realized Gains -- (0.05) -- -- -- --
------- -------- ------- -------- ------- -------
Total Distributions (0.48) (0.92) (0.72) (0.70) (0.82) (0.49)
------- -------- ------- -------- ------- -------
Net Asset Value per
Share, End of Period $ 9.40 $ 9.76 $ 9.91 $ 9.56 $ 9.56 $ 8.95
======= ======== ======= ======== ======= =======
Total Return 1.32% (/2/) 8.20% 11.66% 7.69% 16.84% (6.39)% (/1/)
Ratios/Supplemental
Data:
Net Assets, End of
Period (in thousands) $93,351 $101,501 $81,442 $112,260 $80,159 $66,632
Ratio of Expenses to
Average Net Assets 0.71% (/3/) 0.70% 0.67% 0.68% 0.68% (/4/) 0.65% (/3/)(/4/)
Ratio of Net Investment
Income to Average Net
Assets 6.62% (/3/) 8.52% 7.77% 7.15% 7.88% 8.03% (/3/)
Portfolio Turnover Rate 17.91% (/2/) 27.95% 16.01% 39.28% 23.76% 36.71% (/1/)
</TABLE>
(1) For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
(2) For the six months ended April 30, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Adviser had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.65% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
0.69% for the fiscal year ended October 31, 1995 and 0.78% for the ten
months ended October 31, 1994.
52
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Total Return Mortgage-Backed Securities Fund
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
April 30, 1999
(Unaudited)
--------------
<S> <C>
Net Asset Value per Share, Beginning of Period $ 9.40
------
Income from Investment Operations:
Net Investment Income 0.07
Net Realized and Unrealized Gain on Investments 0.07
------
Total from Investment Operations 0.14
------
Net Asset Value per Share, End of Period $ 9.54
======
Total Return 1.49% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ -- (/3/)
Ratio of Expenses to Average Net Assets --% (/2/)
Ratio of Net Investment Income to Average Net Assets 4.48% (/2/)
Portfolio Turnover Rate 17.91% (/1/)
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through April 30, 1999 and not indicative of a full year's of oper-
ating results.
(2) Annualized.
(3) Amount is less than $1.
53
See accompanying notes to financial statements.
