<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Table of Contents October 31, 1999
<TABLE>
<S> <C>
Letter To Shareholders...................................................... 1
Management Discussions...................................................... 2
Schedules of Investments:
TCW Galileo Aggressive Growth Equities Fund............................... 15
TCW Galileo Convertible Securities Fund................................... 18
TCW Galileo Earnings Momentum Fund........................................ 22
TCW Galileo Large Cap Growth Fund......................................... 25
TCW Galileo Large Cap Value Fund.......................................... 27
TCW Galileo Select Equities Fund.......................................... 31
TCW Galileo Small Cap Growth Fund......................................... 33
TCW Galileo Value Opportunities Fund...................................... 37
Statements of Assets and Liabilities........................................ 40
Statements of Operations.................................................... 42
Statements of Changes in Net Assets......................................... 44
Notes to Financial Statements............................................... 48
Financial Highlights........................................................ 60
Independent Auditors' Report................................................ 73
Tax Information Notice...................................................... 74
</TABLE>
[LOGO] TCW GALILEO FUNDS INC.
THE POWER OF INDEPENDENT THINKING(TM)
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
To Our Shareholders
We are pleased to submit the October 31, 1999 Annual Reports for the TCW Gali-
leo Funds. In this report we have incorporated a discussion and analysis of how
each Fund's performance over the last year has compared to the benchmark as
well as a graphical analysis of each Fund's performance since inception.
TCW is committed to providing you with superior professional investment 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
Equities 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
investment 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
December 6, 1999
1
<PAGE>
TCW Galileo Aggressive Growth Equities Fund
- --------------------------------------------------------------------------------
Management Discussions
The TCW Galileo Aggressive Growth Equities Fund (the "Fund") achieved a return
of 121.34% for the fiscal year ended October 31, 1999 for its Institutional
("I") Class Shares. During the same period of time, the S&P 400 Mid Cap Index
appreciated 21.07% resulting in a 100.27% out-performance for the year. For the
Advisory ("N") Class shares the performance for the period March 1, 1999
(Commencement of offering Advisory Class shares) through October 31, 1999 was
38.58% versus the benchmark return of 12.97%. The performance of the Fund's two
classes varies because of timing and differing expenses. More important are our
long-term returns. We have compounded an annualized fund return of 39.28% per
year since inception versus the benchmark return of 19.71%.
The past year proved to have the most ideal conditions for the success of our
strategy. The U.S. economy continued its inflation-free growth; there was a
lack of foreign turmoil and political instability and the interest rate envi-
ronment was relatively benign. While the Fund has now enjoyed a remarkable run,
we would like to caution that these external conditions that were so positive
for our performance will not always be repeated.
As in the past, most of our performance was driven by superior stock selection.
We continued to benefit from large positions in our Internet holdings including
Yahoo!, EBAY and E*TRADE. In addition, we made some successful investments in
companies which are enabling the continued growth of the Internet such as
VeriSign, Juniper Networks and Vignette. At the same time, we had success
investing in more traditional companies such as Best Buy, a consumer
electronics retailer, Univision, the leading Spanish language broadcaster in
the U.S., and Biogen, an emerging pharmaceutical company.
Looking forward, we continue to be optimistic regarding the revolution in
communications being driven by the Internet. Not only will web usage continue
to grow on the personal computer, there are a whole slew of access devices
which will be delivering digital, interactive content going forward. Examples
include digital television, broadband cable networks and wireless delivery. We
plan to invest in those companies which will deliver the information as well as
those which produce the content customers are demanding. This paradigm will
occur regardless of the economic climate and will continue to allow us to
invest in the fastest growing sectors of the economy.
The Fund seeks to invest in companies whose long-term growth rate is not
adequately discounted in their stock price or whose earnings potential is
underestimated by Wall Street. We believe strongly that good fundamental
research, such as company visits and extensive financial modeling, can uncover
investment ideas which fit our high growth profile. Our strategy is to own
these companies over a long period of time as long as they continue to prove
their ability to grow at above average rates. This is a time-tested, albeit
volatile strategy, that has consistently rewarded long-term investors with
superior capital appreciation.
2
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
TCW Galileo Aggressive Growth Equities Fund - I Class
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Average Annualized Total Return /(1)/
1-Year 3-Year 5-Year Since Inception
<S> <C> <C> <C>
121.34% 39.80% 39.28% 39.28%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1994 NOV 243,427.50 238,727.09
DEC 256,049.22 240,916.61
1995 JAN 252,459.41 243,422.67
FEB 264,809.72 256,181.63
MAR 276,270.68 260,622.21
APR 274,480.45 265,854.17
MAY 278,207.90 272,273.22
JUN 305,169.02 283,361.47
JUL 337,983.85 298,142.87
AUG 346,152.92 303,656.22
SEP 365,551.33 311,016.14
OCT 381,935.34 303,014.32
NOV 396,964.49 316,248.11
DEC 411,366.36 315,456.72
1996 JAN 417,578.00 320,037.99
FEB 429,909.07 330,888.82
MAR 451,959.11 334,854.56
APR 501,010.23 345,081.07
MAY 521,777.11 349,750.27
JUN 497,775.36 344,500.72
JUL 439,859.20 321,198.69
AUG 461,772.98 339,726.00
SEP 498,821.03 354,533.78
OCT 479,516.65 355,562.59
NOV 482,125.23 375,593.54
DEC 462,295.41 376,006.82
1997 JAN 477,426.34 390,107.08
FEB 420,550.54 390,107.08
MAR 369,937.29 373,488.52
APR 378,286.77 383,161.87
MAY 435,158.40 416,650.22
JUN 456,550.79 428,358.09
JUL 502,466.10 470,765.54
AUG 489,422.08 470,200.62
SEP 531,164.89 497,237.16
OCT 490,467.04 475,607.34
NOV 490,986.93 482,646.33
DEC 520,726.01 501,373.01
1998 JAN 509,769.94 491,846.92
FEB 562,469.95 532,571.84
MAR 603,687.75 556,590.83
APR 611,511.54 566,720.79
MAY 574,985.96 541,218.35
JUN 654,817.01 544,628.03
JUL 634,465.30 523,496.46
AUG 499,850.80 426,073.77
SEP 575,508.21 465,869.06
OCT 592,203.71 507,517.75
NOV 700,209.82 532,842.89
DEC 850,341.80 597,220.97
1999 JAN 982,654.99 573,971.15
FEB 945,019.30 543,912.29
MAR 1,092,621.87 559,114.63
APR 1,182,599.28 603,217.60
MAY 1,104,382.16 605,829,53
JUN 1,211,407.84 638,271.70
JUL 1,098,504.63 624,708.43
AUG 1,144,960.39 603,293.42
SEP 1,170,252.56 584,669.75
OCT 1,310,799.90 614,458.68
</TABLE>
TCW Galileo Aggressive Growth Equities Fund - N Class
[PERFORMANCE GRAPH APPEARS HERE]
Total Return/(2)/
Since Inception
38.58%
VALUE: $2,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1999 MAR 2,311.14 2,055.90
APR 2,501.55 2,218.07
MAY 2,336.03 2,227.67
JUN 2,562.53 2,346.97
JUL 2,323.57 2,297.09
AUG 2,421.88 2,218.35
SEP 2,475.41 2,149.87
OCT 2,771.61 2,259.40
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
(2) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
3
<PAGE>
TCW Galileo Convertible Securities Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
The TCW Galileo Convertible Securities Fund (the "Fund") produced a return of
29.68% for the fiscal year ended October 31, 1999. The Fund outperformed the
First Boston Convertible Securities Index which returned 27.04%.
During the fiscal year, the Fund benefited primarily from its holdings in the
technology and media sectors. In technology, holdings in LSI Logic, Level One,
Conexant Systems, Solectron, Citrix Systems and STMicroelectronics did excep-
tionally well. In the media area, the Fund's large holdings in Clear Channel
Communications and Time Warner added substantial performance. In addition,
smaller media holdings, such as Cox Communications, Media One and Lamar Adver-
tising also did well. The past year continued to be a difficult one for most
basic industrial companies and the Fund's low exposure to this sector was a
benefit as well.
Also during the fiscal year, the Fund has been an active participant in the
convertible new issue market where there has been approximately $25 billion in
issuance during 1999. Many new issues have been attractively priced and have
performed well. Much of the new issuance has been rated non-investment grade
and has been issued by companies in the technology and telecommunications sec-
tors. The Fund's participation in many of these issues has lowered the overall
credit rating, although it remains investment grade.
A major concern to investors is rising interest rates. Rates have risen signif-
icantly since the beginning of the year and continue to rise during the fourth
quarter. With the economy continuing to grow at a robust pace, it is our expec-
tation that the Federal Reserve will increase rates during the first quarter of
next year. Ultimately though, corporate earnings growth should be quite strong
during the next 12 months and inflation remains in check. Therefore, while we
have sold some securities which have appreciated in price significantly and in-
vested the proceeds in more defensive convertibles, we remain fully invested in
anticipation of a further rise in stock prices.
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
29.68% 17.76% 16.21% 13.97%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
SEP 294,169.10 288,655.92
OCT 284,943.96 279,534.39
NOV 288,343.34 284,090.80
DEC 290,543.40 284,403.30
1990 JAN 277,268.47 273,084.05
FEB 278,818.41 276,688.76
MAR 283,218.16 280,922.10
APR 276,942.05 274,657.54
MAY 294,716.19 287,978.43
JUN 295,541.39 287,632.85
JUL 294,867.56 285,072.92
AUG 280,967.50 268,652.72
SEP 265,691.30 256,912.60
OCT 249,391.14 247,304.06
NOV 265,591.58 259,397.23
DEC 272,842.23 264,818.64
1991 JAN 286,566.20 276,708.99
FEB 306,640.16 293,228.52
MAR 312,628.84 300,412.62
APR 316,267.84 303,446.78
MAY 325,268.83 312,428.81
JUN 316,818.34 303,712.05
JUL 329,842.74 315,253.10
AUG 341,143.16 327,012.04
SEP 340,068.56 326,423.42
OCT 347,043.36 331,123.92
NOV 341,917.53 323,143.83
DEC 363,629.29 341,918.49
1992 JAN 368,592.83 351,799.93
FEB 376,893.54 360,770.83
MAR 371,944.93 358,173.28
APR 373,380.64 362,507.18
MAY 380,291.92 368,814.80
JUN 377,515.78 367,118.26
JUL 387,542.60 376,259.50
AUG 386,015.69 373,889.07
SEP 392,879.04 381,366.85
OCT 394,890.59 382,282,13
NOV 407,791.66 393,330.08
DEC 416,591.81 402,062.01
1993 JAN 429,785.27 414,606.34
FEB 430,103.31 416,016.01
MAR 445,101.01 431,491.80
APR 443,494.20 431,362.35
MAY 453,517.17 438,911.19
JUN 457,417.41 443,080.85
JUL 457,874.83 447,644.58
AUG 475,594.59 459,910.05
SEP 479,779.82 465,107.03
OCT 492,110.16 476,083.55
NOV 485,658.60 468,894.69
DEC 500,325.49 476,631.46
1994 JAN 517,436.62 490,310.78
FEB 511,253.25 482,514.84
MAR 487,807.18 462,828.23
APR 479,982.75 454,404.76
MAY 480,069.15 455,404,45
JUN 472,296.83 450,258.38
JUL 478,521.70 462,955.66
AUG 492,685.94 472,075.89
SEP 488,458.69 463,720.15
OCT 486,363.21 467,708.14
NOV 472,881.22 450,730.34
DEC 466,757.41 454,155.89
1995 JAN 467,784.27 453,565.48
FEB 478,529.28 468,397.07
MAR 493,363.69 480,762.76
APR 505,993.80 491,676.07
MAY 516,316.07 506,180.52
JUN 532,925.96 524,605.49
JUL 554,775.92 543,228.98
AUG 557,327.89 548,932.89
SEP 565,392.43 557,111.99
OCT 548,984.74 540,008.65
NOV 569,736.36 558,800.95
DEC 572,300.17 561,874.35
1996 JAN 583,860.64 574,291.78
FEB 599,041.01 589,740.23
MAR 600,358.90 594,694.04
APR 611,801.75 608,550.42
MAY 621,725.17 622,121.09
JUN 610,981.76 607,376.82
JUL 585,234.99 583,689.12
AUG 613,478.43 605,402.36
SEP 638,637.18 621,203.36
OCT 631,094.87 625,054.82
NOV 656,464.89 644,556.53
DEC 658,276.73 639,657.90
1997 JAN 676,050.20 659,999.02
FEB 661,569.21 656,567.03
MAR 645,770.93 642,976.09
APR 648,431.51 649,470.15
MAY 680,321.37 679,540.62
JUN 715,534.81 699.315.25
JUL 747,111.36 737,637.73
AUG 748,456.16 738,227.84
SEP 785,407.44 769,381.05
OCT 774,545.25 748,300.01
NOV 776,582.31 743,810.21
DEC 785,062.59 747,975.55
1998 JAN 792,434.32 747,751.15
FEB 838,870.97 781,175.63
MAR 865,404.46 809,376.07
APR 863,915.97 816,579.52
MAY 846,084.74 793,062.03
JUN 854,257.92 797,185.95
JUL 848,269.57 779,010.11
AUG 745,696.82 683,425.57
SEP 765,912.66 694,633.75
OCT 795,369.66 719,571.10
NOV 840,689.82 753,901.84
DEC 883,346.42 796,949.63
1999 JAN 924,766.54 822,850.50
FEB 896,884.82 794,297.58
MAR 918,392.12 827,983.74
APR 946,485.74 861,517.09
MAY 939,264.05 853,591.13
JUN 989,035.65 890,389.44
JUL 977,711.20 878,636.30
AUG 976,097.97 881,272.21
SEP 984,189.82 883,563.52
OCT 1,031,440.78 914,134.82
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
4
<PAGE>
TCW Galileo Earnings Momentum Fund
- --------------------------------------------------------------------------------
Despite the lackluster results recorded by the small cap sector of the market
and a disappointing first half, performance for the TCW Galileo Earnings Momen-
tum Fund (the "Fund") was very strong in the fiscal year ended October 31,
1999. For the fiscal year, the Fund gained 50.23%. This compared favorably with
the 14.87% increase in the Russell 2000 Index.
The best performing industry groups for the Fund in the fiscal year were lei-
sure, telecommunications, information processing and business services. Groups
that penalized performance for the year were healthcare, retail, pollution con-
trol and energy. What made 1999 a difficult year for many investors was the
fact that few stocks outside of the technology area were able to realize mean-
ingful gains. Performance in each of the Fund's best performing industry groups
was driven by several stocks that benefited from some unique or proprietary
technological advantage.
One of the surprises of the last twelve months is how well the stock market in
general and growth stocks in particular have performed in the face of rising
interest rates. Although it can be argued that the Federal Reserve has only
"taken back" the rate reductions that were necessary during the Asian financial
crisis in 1998, the 110 basis point rise in long-term interest rates was as
sharp as in past periods where rising rates led to a bear market. While many
sectors of the market were hurt by rising interest rates, the growth prospects
for most of our companies are somewhat insulated from changes in the economy.
Even though the stock prices of our companies are often impacted by swings in
inflation and interest rates, growth stocks as a rule did not suffer from ris-
ing interest rates in 1999.
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return /(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
50.23% 12.59% 13.30% 13.48%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1993 MAY 254,737.50 261,062.31
JUN 259,638.65 262,690.91
JUL 266,609.95 266,317.79
AUG 282,881.15 277,823.10
SEP 291,226.15 285,663.29
OCT 299,048.48 293,015.86
NOV 287,977.71 283,371.79
DEC 309,881.29 293,060.48
1994 JAN 329,131.12 302,248.80
FEB 326,419.08 301,155.63
MAR 307,134.24 285,255.35
APR 299,664.73 286,950.87
MAY 294,450.57 283,728.74
JUN 274,195.31 274,094.24
JUL 273,789.50 278,597.56
AUG 298,518.17 294,121.77
SEP 298,165.92 293,136.97
OCT 304,561.58 291,980.06
NOV 288,419.81 280,187.91
DEC 292,224.07 287,715.76
1995 JAN 284,909.70 284,085.69
FEB 299,232.11 295,903.34
MAR 305,934.91 300,999.46
APR 308,676.09 307,692.31
MAY 312,333.90 312,982.84
JUN 333,969.27 329,217.77
JUL 357,433.95 348,184.01
AUG 356,518.92 355,386.78
SEP 369,620.99 361,732.24
OCT 349,509.91 345,554.68
NOV 364,440.98 360,071.77
DEC 369,462.97 369,572.42
1996 JAN 368,853.36 369,177.23
FEB 391,449.32 380,682.54
MAR 410,074.47 388,430.31
APR 457,708.73 409,200.43
MAY 485,189.56 425,326.99
JUN 454,656.58 407,861.86
JUL 387,999.38 372,236.81
AUG 414,030.26 393,848.32
SEP 428,115.56 409,241.86
OCT 398,412.91 402,934.65
NOV 399,942.81 419,536.09
DEC 408,473.59 430,531.48
1997 JAN 413,105.68 439,142.10
FEB 376,723.47 428,514.87
MAR 329,425.83 408,288.96
APR 331,079.55 409,432.17
MAY 392,597.44 454,961.03
JUN 421,704.62 474,478.86
JUL 431,416.48 496,542.13
AUG 438,716.04 507,912.94
SEP 485,176.07 545,092.17
OCT 460,286.54 521,162.62
NOV 455,310.84 517,775.07
DEC 449,077.64 526,836.13
1998 JAN 449,077.64 518,512.12
FEB 468,010.75 556,830.16
MAR 495,520.42 579,771.57
APR 505,168.20 582,960.31
MAY 471,225.95 551,538.75
JUN 495,164.23 552,696.98
JUL 443,776.09 507,983.79
AUG 331,576.18 409,333.34
SEP 372,797.73 441,384.14
OCT 378,531.36 459,392.62
NOV 421,903.48 483,464.79
DEC 482,539.45 513,381.59
1999 JAN 468,999.39 520,209.56
FEB 425,373.07 478,077.79
MAR 448,692.02 485,535.81
APR 430,641.14 529,044.67
MAY 422,368.52 536,774.01
JUN 475,401.12 561,046.93
JUL 454,716.41 545,651.80
AUG 460,359.44 525,457.23
SEP 509,631.72 525,572.83
OCT 568,682.74 527,701.40
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
5
<PAGE>
TCW Galileo Large Cap Growth Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
The TCW Galileo Large Cap Growth Fund (the "Fund") had another excellent year
ending October 31, 1999 for its Institutional ("I") Class Shares. Total return
for the Fund during this period was 54.59%, well ahead of the S&P Growth Index
return of 31.57% and the S&P 500 return of 25.67%. Since inception, the Fund
has an annualized return of 38.79% compared to 27.85% for the S&P Growth Index
and 22.1% for the S&P 500. Both year-to-date and since inception performance
for the Fund continues to rank in the top fifteen percent of all Large Cap
Funds according to Lipper Analytical Services, Inc. For the Advisory ("N")
Class shares the performance for the period March 1, 1999 (Commencement of
offering Advisory Class shares) through October 31, 1999 was 21.17% versus the
benchmark return of 12.33%. The performance of the Fund's two classes varies
because of timing and differing expenses.
Over the last twelve months, technology and consumer cyclicals have led the S&P
Growth Index, while consumer staples and healthcare have lagged. The Fund has
been overweighted relative to the Index in both technology and consumer
cyclicals and underweighted in both consumer staples and healthcare. In addi-
tion to the positive contribution from sector weightings, the Fund enjoyed an
even greater contribution from excellent stock selection. Stand out performers
over the last twelve months include companies such as Qualcomm (2.0% of the
Fund's net assets), XILINX (2.5%), VeriSign (1.3%) and Omnicom (2.5%).
Large cap growth stocks continue to outperform traditional value stocks. Tech-
nology, globalization, dormant inflation and excellent monetary policy have
dampened and elongated the business cycle -- the perfect environment for large
cap growth stocks. We expect these economic and more important secular trends
to continue. The economy is no longer being driven by manufacturing and smoke-
stack industries, but by service business and technological innovations. The
competitive sustainable advantage for many businesses has shifted from capital-
based to knowledge-based intangible assets, which yield significantly higher
returns on invested capital ("ROIC"). In addition, higher productivity and cor-
porate downsizing have improved standards of performance and efficiency further
bolstering ROIC.
Corporate returns are at an all time high providing U.S. companies with an op-
portunistic competitive advantage to capture market share relative to overseas
competition. We believe these returns are not only sustainable, but will con-
tinue to improve. Global companies with dominant industry leadership and a low-
cost, first-mover advantage, are well positioned for continued above-average,
long-term success. Consistent with our strategy, these are the kinds of compa-
nies that we own in the portfolio. We spend less time predicting macroeconomic
events and more time studying companies through traditional bottom-up fundamen-
tal research. From this perspective, we estimate the companies in the portfolio
will continue to grow earnings well ahead of the market average.
6
<PAGE>
- --------------------------------------------------------------------------------
TCW Galileo Large Cap Growth Fund - I Class
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return /(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
54.59% N/A N/A 38.79%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1997 JUN 19-30 251,125.00 250,600.00
JUL 270,474.18 270,447.52
AUG 253,693.96 252,462.76
SEP 265,866.20 265,338.36
OCT 258,134.81 257,351.68
NOV 270,556.26 271,325.87
DEC 271,857.63 274,663.18
1998 JAN 277,998.68 283,891.86
FEB 297,422.68 303,622.35
MAR 311,356.93 319,319.62
APR 321,298.56 322,001.91
MAY 314,204.29 315,529.67
JUN 347,195.74 338,026.93
JUL 349,709.43 337,824.12
AUG 300,064.68 293,873.20
SEP 333,999.00 313,533.32
OCT 351,280.11 339,838.76
NOV 380,186.95 362,859.44
DEC 432,660.35 390,458.53
1999 JAN 471,963.21 414,303.83
FEB 448,709.59 398,050.69
MAR 490,304.97 417,332.27
APR 484,083.00 416,522.64
MAY 463,446.54 404,381.01
JUN 500,786.43 433,322.56
JUL 480,479.54 419,612.23
AUG 499,477.70 425,432.25
SEP 497,514.75 418,191.40
OCT 543,042.32 447,130.24
</TABLE>
TCW Galileo Large Cap Growth Fund - N Class
[PERFORMANCE GRAPH APPEARS HERE]
Total Return /(2)/
Since Inception
21.17%
VALUE: $2,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1999 MAR 2,185.40 2,096.88
APR 2,157.67 2,092.81
MAY 2,065.69 2,031.81
JUN 2,230.65 2,177.22
JUL 2,140.13 2,108.34
AUG 2,224.80 2,137.58
SEP 2,218.97 2,101.20
OCT 2,423.36 2,246.60
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
(2) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
7
<PAGE>
TCW Galileo Large Cap Value Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
The TCW Galileo Large Cap Value Fund (the "Fund") achieved a return of 17.30%
for the year ended October 31, 1999 for its Institutional ("I") Class shares.
During this period, the S&P/BARRA Value benchmark was up 19.02%. For the Advi-
sory ("N") Class shares the performance for the period March 1, 1999 (Commence-
ment of offering Advisory Class shares) through October 31, 1999 was 6.51% ver-
sus the benchmark return of 9.47%. The performance of the Fund's two classes
varies because of timing and differing expenses.
Over the past 12 months, the Fund increased its positions in energy and finan-
cial stocks, and we reduced positions in technology stocks. The Fund benefited
from strong performance in energy stocks (i.e., Baker Hughes, Halliburton,
Schlumberger) as crude oil prices have recovered from $10 per barrel to over
$25 per barrel. Financial stocks, mainly brokerage (Morgan Stanley Dean Witter,
Charles Schwab), Insurance (Progressive, Allstate) and Investment Management
(T. Rowe Price) now represent significant holdings in the Fund. The Fund's po-
sitions in many technology stocks (i.e., Applied Materials, Texas Instruments
and Motorola) have been reduced. These stocks were purchased during 1998 when
the semi-conductor industry was in a cyclical downturn and the stocks were un-
dervalued. These stocks have more than doubled during this time and are no
longer significantly undervalued.
The stock market correction during the summer of 1999, provided several excel-
lent buying opportunities. Despite the news headlines about the lofty stock
valuations of Internet stocks, and certain technology stocks, we believe most
sectors of the market remain undervalued. Our focus is on undervalued companies
with improving returns on invested capital.
8
<PAGE>
- --------------------------------------------------------------------------------
TCW Galileo Large Cap Value Fund - I Class
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return /(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
17.30% N/A N/A 14.62%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1997 DEC 252,350.00 255,550.00
1998 JAN 252,753.76 252,406.74
FEB 267,696.56 271,337.24
MAR 279,293.18 285,094.04
APR 280,725.95 288,458.15
MAY 273,547.79 284,390.89
JUN 277,377.46 286,552.26
JUL 272,454.01 280,334.07
AUG 230,874.80 235,256.36
SEP 248,382.04 249,559.94
OCT 276,831.72 269,100.49
NOV 289,413.72 283,117.93
DEC 300,281.20 293,061.03
1999 JAN 304,401.06 298,980.86
FEB 304,127.10 292,543.81
MAR 320,610.79 301,410.81
APR 344,236.60 327,395.43
MAY 335,720.18 321,610.36
JUN 348,631.98 333,963.41
JUL 334,895.88 323,694.04
AUG 324,182.56 315,494.87
SEP 308,521.30 303,149.55
OCT 327,731.01 320,289.63
</TABLE>
TCW Galileo Large Cap Value Fund - N Class
[PERFORMANCE GRAPH APPEARS HERE]
Total Return /(2)/
Since Inception
6.51%
VALUE: $2,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1999 MAR 2,106.60 2,060.62
APR 2,261.98 2,238.27
MAY 2,205.98 2,198.72
JUN 2,290.88 2,283.17
JUL 2,196.93 2,212.96
AUG 2,126.48 2,156.91
SEP 2,025.30 2,072.51
OCT 2,130.09 2,189.69
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
(2) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
9
<PAGE>
TCW Galileo Select Equities Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
The TCW Galileo Select Equities Fund (the "Fund") generated a strong total re-
turn of 42.12% for the year ended October 31, 1999 for its Institutional ("I")
class shares. This compared favorably to the 25.67% return for the Standard &
Poor's 500 Index. For the Advisory ("N") class shares the performance for the
period March 1, 1999 (Commencement of offering Advisory class shares) through
October 31, 1999 was 17.31% versus the benchmark return of 10.98%. The perfor-
mance of the Fund's two classes varies because of timing and differing ex-
penses.
The Fund generated substantial gains among a broad array of holdings. Returns
in the technology sector were led by Siebel Systems, Cisco Systems, Applied Ma-
terials, Intel and Microsoft. In the finance sector, Charles Schwab Corp. was a
standout. In the cyclical sector, Home Depot was among the strongest performers
as well as Time Warner and Cox Communications.
For much of the year, investors have been focused on the perceived and actual
activities of the Federal Reserve Board (the "Fed"). Fed intervention in late
1998 fueled confidence which resulted in the Dow Jones Industrial Average
crossing the 10,000 point milestone in March of 1999. However, since that time
U.S. equity markets were mired in a trading range as interest rates moved
higher with two Fed rate increases over the summer and weakness in the U.S.
dollar.
During the past year, Brian Beitner and Leigh Crawford joined the Select Equi-
ties team to assist lead portfolio manager Glen Bickerstaff. The Fund remains
committed to investing in leading, high quality companies with strong and en-
during business models, inherent advantages over their competitors, and unique
business franchise characteristics. Companies targeted for investment typically
have superior revenue growth, high and rising margins, high or rising market
share and are able to capitalize on long-term secular trends.
10
<PAGE>
- --------------------------------------------------------------------------------
TCW Galileo Select Equities Fund - I Class
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
42.12% 29.25% 24.55% 20.15%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1991 JUL 257,372.20 261,652.74
AUG 266,007.22 267,850.79
SEP 263,196.95 263,369.77
OCT 272,748.37 266,908.52
NOV 258,669.20 256,153.55
DEC 288,532.23 285,450.30
1992 JAN 293,776.68 280,131.71
FEB 298,307.29 283,759.45
MAR 289,356.37 278,239.32
APR 289,722.64 286,405.66
MAY 291,713.52 287,808.59
JUN 280,186.47 283,526.50
JUL 291,044.56 295,108.57
AUG 283,232.86 289,067.57
SEP 290,277.08 292,464.98
OCT 298,719.53 293,472.68
NOV 313,714.27 303,465.98
DEC 319,831.70 307,190.57
1993 JAN 331,857.37 309,758.26
FEB 332,023.30 313,980.15
MAR 346,964.35 320,604.83
APR 340,989.62 312,854.66
MAY 352,610.55 321,222.54
JUN 363,566.16 322,164.81
JUL 357,589.13 320,869.19
AUG 375,851.21 333,042.80
SEP 376,847.21 330,488.20
OCT 385,480.78 337,324.89
NOV 379,170.46 334,110.71
DEC 393,158.06 338,149.38
1994 JAN 416,130.29 349,647.70
FEB 411,136.72 340,159.56
MAR 388,499.53 325,329.27
APR 384,171.65 329,498.82
MAY 392,162.42 334,906.40
JUN 368,860.13 326,698.18
JUL 378,513.20 337,426.97
AUG 393,161.66 351,262.64
SEP 379,511.09 342,674.90
OCT 385,169.60 350,375.34
NOV 369,188.91 337,615.43
DEC 365,489.64 342,622.55
1995 JAN 358,132.33 351,506.06
FEB 374,183.82 365,203.01
MAR 383,882.67 375,978.91
APR 400,600.76 387,050.59
MAY 412,306.31 402,522.14
JUN 436,380.88 411,871.56
JUL 460,124.36 425,529.24
AUG 458,785.40 426,597.15
SEP 466,139.73 444,599.74
OCT 457,781.84 443,013.59
NOV 468,480.20 462,461.00
DEC 462,174.46 471,368.07
1996 JAN 464,522.31 487,412.84
FEB 482,982.42 491,930.50
MAR 493,385.86 496,668.03
APR 511,843.43 503,988.94
MAY 531,979.35 516,987.04
JUN 516,876.46 518,957.95
JUL 483,310.50 496,029.38
AUG 502,439.93 506,491.20
SEP 532,646.62 534,997.49
OCT 534,660.02 549,751.87
NOV 577,283.12 591,308.60
DEC 557,309.12 579,595.66
1997 JAN 582,471.63 615,820.39
FEB 563,768.47 620,623.79
MAR 530,105.85 595,054.09
APR 569,211.76 630,578.82
MAY 611,037.44 668,981.07
JUN 626,337.82 698,951.42
JUL 693,982.30 754,587.95
AUG 653,870.12 712,331.03
SEP 675,970.93 751,366.77
OCT 655,894.60 726,271.12
NOV 676,292.92 759,897.47
DEC 683,799.77 772,967.71
1998 JAN 692,005.37 781,547.65
FEB 740,584.14 837,897.23
MAR 768,955.92 880,797.57
APR 782,420.34 889,693.63
MAY 758,376.56 874,390.90
JUN 813,199.61 909,891.17
JUL 831,088.68 900,155.33
AUG 693,975.35 769,992.87
SEP 759,347.82 819,349.41
OCT 812,243.99 885,962.52
NOV 854,082.68 939,660.71
DEC 943,496.60 993,803.96
1999 JAN 1,017,145.94 1,035,364.84
FEB 983,112.24 1,003,185.70
MAR 1,056,757.18 1,043,323.16
APR 1,053,407.26 1,083,731.07
MAY 1,015,463.53 1,058,144.18
JUN 1,105,291.43 1,116,860.60
JUL 1,056,194.38 1,081,992.21
AUG 1,062,890.66 1,076,636.35
SEP 1,028,293.57 1,047,125.75
OCT 1,154,393.21 1,113,387.86
</TABLE>
TCW Galileo Select Equities Fund - N Class
[PERFORMANCE GRAPH APPEARS HERE]
Total Return/(2)/
Since Inception
17.31%
VALUE: $2,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1999 MAR 2,148.70 2,080.02
APR 2,143.03 2,160.58
MAY 2,064.70 2,109.57
JUN 2,247.45 2,226.63
JUL 2,147.57 2,157.11
AUG 2,160.05 2,146.43
SEP 2,089.67 2,087.60
OCT 2,346.20 2,219.70
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
(2) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
11
<PAGE>
TCW Galileo Small Cap Growth Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
Performance for the TCW Galileo Small Cap Growth Fund (the "Fund") for the year
ended October 31, 1999 was very gratifying. During the fiscal year, the Fund
gained 89.63%, versus 14.87% for the Russell 2000 Index for its Institutional
("I") Class Shares. For the Advisory ("N") Class shares the performance for the
period March 1, 1999 (Commencement of the Advisory Class shares) through
October 31, 1999 was 49.08% versus the benchmark return of 10.38%. The
performance of the Fund's two classes varies because of timing and differing
expenses.
When we began the fiscal year, world markets were beginning their recovery from
the emerging markets crisis of September and October 1998. The strong growth
and earnings of the Fund's investments enabled us to benefit amply from this
recovery in the first fiscal quarter of 1999. During that period, the Fund
gained 41.25%, versus 13.29% for the Russell 2000. During the second and third
quarters, interest rates moved higher, resulting in meager gains for both the
Fund and the U.S. equity markets as a whole. In the second quarter, the Fund
gained 0.44%, versus a gain of 1.70% for the Russell 2000 Index. In the third
quarter, the Fund gained 6.16%, versus 3.14% for the Russell 2000. During these
two quarters, however, the companies in which we invest continued to deliver
outstanding fundamental results. Due to their rapid rates of growth, they en-
tered the third quarter significantly less expensive than they were just two
quarters before. We believe this positioned the Fund for its 25.95% return in
the fourth quarter, against a backdrop of a 3.29% drop in the Russell 2000.
During fiscal 1999, the best performing industry groups were leisure, commer-
cial and computer services, computer software, electronics, telecommunications
equipment and services. There were no industries that had a material negative
impact on performance. We are very pleased with this, as it suggests we were
able to avoid those industries whose fundamentals were disappointing during the
year. This is consistent with our strategy of investing in the best companies
in the best industries -- companies with the ability to grow at above average
rate with above average profitability regardless of macroeconomic conditions.
One of the surprises of the last twelve months is how well the stock market in
general, and growth stocks in particular have performed in the face of rising
interest rates. It can be argued that the Federal Reserve has only "taken back"
the rate reductions that were necessary during the emerging markets financial
crisis. Nevertheless, the 110 basis point rise in long-term interest rates dur-
ing fiscal 1999, was as sharp as in past periods where rising rates led to a
bear market. Although many sectors of the market were hurt by rising interest
rates, the growth prospects for most of our companies are largely insulated
from short-term macroeconomic events. Even though the stock prices of our com-
panies are often impacted by swings in interest rates, growth stocks as a rule
did not suffer from rising interest rates in 1999.
12
<PAGE>
- --------------------------------------------------------------------------------
TCW Galileo Small Cap Growth Fund - I Class
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
89.63% 25.33% 30.80% 21.86%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1989 DEC 259,590.00 250,953.25
1990 JAN 243,599.26 229,046.57
FEB 250,081.43 236,148.51
MAR 258,336.62 245,405.42
APR 257,055.27 237,381.86
MAY 277,416.62 254,187.98
JUN 277,017.14 254,847,57
JUL 271,274.57 243,684.15
AUG 239,030.88 211,079.39
SEP 224,772.69 192,312.56
OCT 215,138.93 180,561.83
NOV 225,011.65 194,341.04
DEC 229,777.40 201,980.59
1991 JAN 246,797.01 220,178.18
FEB 270,699.30 244,881.36
MAR 290,205.90 262,048.90
APR 279,233.21 261,366.72
MAY 304,738.37 273,808.66
JUN 278,997.12 257,982.90
JUL 310,727.46 267,013.93
AUG 335,511.09 276,867.20
SEP 341,134.25 278,999.58
OCT 376,874.89 286,363.55
NOV 351,831.55 273,103.89
DEC 416,097.10 295,119.00
1992 JAN 436,219.56 319,031.57
FEB 432,167.08 328,338.18
MAR 394,002.40 317,224.46
APR 350,606.98 306,110.74
MAY 351,252.10 310,181.25
JUN 330,872.45 295,512.04
JUL 338,598.32 305,794.50
AUG 325,789.15 297,165.55
SEP 342,808.37 304,019.01
OCT 363,544.85 313,682.53
NOV 407,184.77 337,685.45
DEC 427,515.51 349,449.74
1993 JAN 425,292.43 361,277.26
FEB 379,037.62 352,932.94
MAR 396,617.39 364,385.49
APR 391,576.38 354,383.14
MAY 423,967.58 370,064.33
JUN 431,179.27 372,372.92
JUL 438,668.85 377,514.14
AUG 472,354.24 393,823.30
SEP 493,794.39 404,937.02
OCT 508,805.74 415,359.52
NOV 466,091.50 401,688.74
DEC 483,430.11 415,422.77
1994 JAN 504,846.06 428,447.51
FEB 493,941.38 426,897.92
MAR 454,426.07 404,358.75
APR 444,546.85 406,762.20
MAY 429,730.10 402.194.73
JUN 404,045.14 388,537.51
JUL 411,948.26 394,921.12
AUG 443,561.17 416,927.19
SEP 450,476.29 415,531.20
OCT 463,814.89 413,891.25
NOV 444,552.66 397,175.49
DEC 462,334.76 407,846.47
1995 JAN 443,563.97 402,700.72
FEB 473,695.27 419,452.63
MAR 509,260.31 426,676.55
APR 510,742.26 436,163.87
MAY 522,596.59 443,663.37
JUN 584,341.38 466,676.91
JUL 639,170.13 493,562.17
AUG 651,026.73 503,772.34
SEP 684,938.72 512,767.23
OCT 695,212.80 489,835.01
NOV 735,291.81 510,413.47
DEC 759,563.80 523,880.95
1996 JAN 760,611.99 523,320.74
FEB 797,881.98 539,629.90
MAR 861,919.99 550,612.61
APR 977,400.03 580,054.94
MAY 1,032,515.62 602,914.87
JUN 967,952.42 578,157.47
JUL 814,735.23 527,657.81
AUG 891,426.26 558,292.82
SEP 956,562.77 580,113.67
OCT 901,933.47 571,172.99
NOV 900,887.23 594,706.07
DEC 893,472.93 610,292.39
1997 JAN 901,898.38 622,498.24
FEB 789,161.08 607,433.78
MAR 707,506.58 578,762.91
APR 710,669.14 580,383.44
MAY 848,695.30 644,922.08
JUN 905,591.83 672,589.24
JUL 958,369.72 703,864.64
AUG 948,805.19 719,983.14
SEP 1,034,339.98 772,685.90
OCT 995,562.57 738,764.99
NOV 984,939.92 733,963.02
DEC 1,021,835.77 746,807.37
1998 JAN 1,012,782.31 735,007.82
FEB 1,098,220.62 789,324.89
MAR 1,173,470.70 821,845.08
APR 1,166,113.04 826,365.23
MAY 1,082,945.86 781,824.14
JUN 1,203,466.90 783,465.97
JUL 1,111,546.10 720,083.58
AUG 845,164.08 580,243.35
SEP 934,903.60 625,676.40
OCT 936,044.18 651,204.00
NOV 1,068,382.11 685,327.09
DEC 1,228,853.10 727,735.13
1999 JAN 1,322,184.49 737,414.00
FEB 1,187,943.10 677,690.84
MAR 1,290,486.35 688,262.82
APR 1,327,936.26 749,938.05
MAY 1,295,096.40 760,894.65
JUN 1,473,690.19 795,302.30
JUL 1,409,746.77 773,479.21
AUG 1,467,363.12 744,852.74
SEP 1,541,112.79 745,016.61
OCT 1,775,022.89 748,033.93
</TABLE>
TCW Galileo Small Cap Growth Fund - N Class
[PERFORMANCE GRAPH APPEARS HERE]
Total Return/(2)/
Since Inception
49.08%
VALUE: $2,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1999 MAR 2,171.68 2,031.20
APR 2,234.72 2,213.22
MAY 2,178.48 2,245.55
JUN 2,478.19 2,347.09
JUL 2,370.54 2,282.69
AUG 2,466.57 2,198.21
SEP 2,590.71 2,198.69
OCT 2,981.60 2,207.60
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
(2) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
13
<PAGE>
TCW Galileo Value Opportunities Fund
- --------------------------------------------------------------------------------
Management Discussions (continued)
For the year ended October 31, 1999 the TCW Galileo Value Opportunities Fund
(the "Fund") has delivered strong performance relative to its benchmark. The
Fund appreciated 21.54% for the period, bettering the Wilshire Mid-Cap 750 In-
dex which appreciated 20.14%. As value investors, we continue to reap the gains
made on investments purchased during the summer of 1998's Asian financial cri-
sis. We reinvested profits from richly priced holdings into freshly researched
securities. Because of the contraction in liquidity for small and medium size
companies, market conditions allowed us the opportunity to invest in good solid
businesses with strong balance sheets and excess cash flow selling at inexpen-
sive valuations.
The Fund is well diversified across many industries. We began the year with a
higher than normal weighting in technology because the valuations of these
stocks were extremely attractive. During the course of the year, we were able
to reduce our holdings in technology to more historical levels as the stocks
appreciated to fair value. More recently, we have placed the focus on the
healthcare and consumer sectors which are now suffering depressed valuations.
Our philosophy, discipline and process remain unchanged and are based on the
premise that every company has an intrinsic value based on its growth rate,
earnings potential and inherent assets. We continue to base our investments on
bottom up fundamental analysis, searching for companies whose stock prices have
fallen below that intrinsic value and identifying a catalyst that will lead to
appreciation.
The U.S. economy remains resilient in the face of the recent Federal Reserve
Board interest rate hikes. We believe the confluence of a moderating economy
and stable interest rates should provide a favorable backdrop for continuing
margin improvement among many of our holdings. We expect this to result in sig-
nificant stock price appreciation within our asset class.
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
21.54% 12.54% N/A 12.54%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1996 NOV 269,110.00 263,350.00
DEC 271,314.01 263,297.33
1997 JAN 281,092.17 269,932.42
FEB 278,947.43 267,476.04
MAR 269,368.38 255,038.40
APR 271,332.08 260,113.67
MAY 296,601.23 282,509.45
JUN 309,307.63 292,905.80
JUL 329,505.42 312,911.27
AUG 336,497.52 314,726.15
SEP 346,030.50 333,137.63
OCT 316,967.39 318,013.18
NOV 313,480.75 319,953.06
DEC 317,650.05 326,768.06
1998 JAN 315,108.85 321,605.13
FEB 337,954.24 347,108.42
MAR 344,936.37 363,005.98
APR 348,744.47 367,942.86
MAY 332,876.60 351,532.61
JUN 313,836.06 354,309.72
JUL 288,760.55 331,740.19
AUG 237,361.18 269,572.08
SEP 247,828.80 286,878.61
OCT 293,206.26 305,583.09
NOV 304,629.57 319,395.45
DEC 318,590.75 340,954.64
1999 JAN 325,255.67 337,238.23
FEB 305,899.70 317,813.31
MAR 309,390.02 324,296.70
APR 345,248.32 353,969.85
MAY 364,606.39 360,235.12
JUN 383,963.35 377,634.47
JUL 382,377.58 370,874.82
AUG 378,886.47 359,266.43
SEP 369,050.58 352,655.93
OCT 356,358.93 367,114.83
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
14
<PAGE>
TCW Galileo Aggressive Growth Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ -----------
<C> <S> <C>
Advertising (1.2% of Net Assets)
14,200 DoubleClick, Inc. $ 1,988,000
-----------
Banking & Financial Services (4.8%)
202,922 E*TRADE Group, Inc. 4,832,080*
95,785 T. Rowe Price Associates, Inc. 3,400,368
-----------
Total Banking & Financial Services 8,232,448
-----------
Commercial Services (1.1%)
48,392 Paychex, Inc. 1,905,435
-----------
Computer Services (22.1%)
2,300 Akamai Technologies, Inc. 333,931*
74,416 At Home Corp. 2,781,298*
5,000 Foundry Networks, Inc. 947,500*
42,132 Portal Software, Inc. 2,754,380*
42,055 Scient Corp. 5,209,563*
39,800 StarMedia Network, Inc. 1,144,250*
73,012 VeriSign, Inc. 9,016,982*
86,371 Yahoo!, Inc. 15,465,807*
-----------
Total Computer Services 37,653,711
-----------
Computer Software (15.6%)
22,300 Ariba, Inc. 3,456,500*
10,000 Homestore.com, Inc. 469,375*
38,959 Rational Software Corp. 1,665,497*
135,272 Siebel Systems, Inc. 14,854,557*
2,300 Sycamore Networks, Inc. 494,500*
35,759 Vignette Corp. 5,649,922*
-----------
Total Computer Software 26,590,351
-----------
Electronics (9.2%)
61,317 Altera Corp. 2,981,539*
900 Chartered Semiconductor (ADR) 29,869*
68,918 Maxim Integrated Products, Inc. 5,440,215*
91,267 XILINX, Inc. 7,175,868*
-----------
Total Electronics 15,627,491
-----------
Entertainment & Leisure (1.6%)
60,034 Westwood One, Inc. 2,769,068*
-----------
Insurance (1.2%)
39,959 Hartford Life, Inc. 2,087,858
-----------
Media -- Broadcasting & Publishing (9.7%)
71,244 Cablevision Systems Corp. 4,813,423*
62,481 Clear Channel Communications, Inc. 5,021,910*
18,800 Hispanic Broadcasting Corp. 1,522,800*
</TABLE>
15
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Aggressive Growth Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ------------
<C> <S> <C>
Media -- Broadcasting & Publishing (Continued)
31,335 Playboy Enterprises, Inc. $ 802,959*
52,126 Univision Communications, Inc. 4,433,968*
------------
Total Media -- Broadcasting & Publishing 16,595,060
------------
Medical Supplies (1.7%)
24,100 MiniMed, Inc. 1,827,081*
18,100 VISX, Inc. 1,132,381*
------------
Total Medical Supplies 2,959,462
------------
Pharmaceuticals (5.3%)
36,124 Andrx Corp. 1,724,921*
54,476 Biogen, Inc. 4,038,034*
12,100 Genentech, Inc. 1,763,575*
23,000 Gilead Sciences, Inc. 1,453,313*
------------
Total Pharmaceuticals 8,979,843
------------
Retail (11.9%)
51,314 Amazon.com, Inc. 3,624,051*
88,125 Bed, Bath & Beyond, Inc. 2,935,664*
42,165 Best Buy Company, Inc. 2,342,793*
31,300 Drugstore.com, Inc. 1,138,538*
46,282 Ebay, Inc. 6,253,855*
29,525 Priceline.com, Inc. 1,778,881*
46,182 Talbots, Inc. 2,173,440
------------
Total Retail 20,247,222
------------
Telecommunications (13.0%)
25,700 American Tower Corp. 489,906*
140,378 AT & T Canada, Inc. 4,527,191*
72,396 EchoStar Communications Corp. 4,479,503*
26,000 Exodus Communications, Inc. 2,236,000*
79,463 Global Crossing Ltd. 2,751,406*
13,000 Juniper Networks, Inc. 3,583,125*
56,298 McLeodUSA, Inc. 2,512,298*
47,500 Metromedia Fiber Network, Inc. 1,570,469*
------------
Total Telecommunications 22,149,898
------------
Total Common Stock (Cost: $77,635,505)
(98.4%) 167,785,847
------------
</TABLE>
16
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Short-Term Investments Value
---------- ---------------------- ------------
<S> <C> <C>
$2,610,889 Bank of Montreal, 5.19%, due 11/01/99 $ 2,610,889**
9,348,949 Bank of Nova Scotia, 5.35%, due 11/08/99 9,348,949**
9,052,390 BankBoston Corp., 5.5%, due 11/01/99 9,052,390**
2,667,703 Investors Bank and Trust Depository Reserve,
4.3%, due 11/01/99 2,667,703
2,837,801 Janus Money Market Fund 2,837,801**
7,200,000 Merrimac Money Market Fund 7,200,000**
8,700,000 Royal Bank of Scotland, 5.25%, due 11/01/99 8,700,000**
------------
Total Short-Term Investments (Cost: $42,417,732) (24.8%) 42,417,732
------------
Total Investments (Cost: $120,053,237) (123.2%) 210,203,579
Liabilities in Excess of Other Assets (-23.2%) (39,643,383)
------------
Net Assets (100.0%) $170,560,196
============
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
17
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Convertible Securities Fund
- --------------------------------------------------------------------------------
Schedule of Investments
<TABLE>
<CAPTION>
Principal
Amount Fixed Income Securities Value
---------- ----------------------- ------------
<C> <S> <C>
Advertising (4.3% of Net Assets)
$ 45,000 Interpublic Group of Companies, Inc., 1.87%, due
06/01/06 $ 41,625
885,000 Interpublic Group of Companies, Inc. (144A), 1.87%,
due 06/01/06 818,625*
935,000 Lamar Advertising Co., 5.25%, due 09/15/06 1,262,545
------------
Total Advertising 2,122,795
------------
Banking (1.0%)
590,000 Net.B@nk, Inc., 4.75%, due 06/01/04 514,038
------------
Banking & Financial Services (2.3%)
245,000 Berkshire Hathaway, Inc., 1%, due 12/03/01 604,538
480,000 UBS AG Stamford, Exchangeable Nikkei 225 Index, 0%,
due 12/11/03 520,800
------------
Total Banking & Financial Services 1,125,338
------------
Commercial Services (0.8%)
495,000 Interim Services, Inc., 4.5%, due 06/01/05 393,525
------------
Computer Services (1.3%)
510,000 Safeguard Scientifics, Inc., (144A), 5%, due
06/15/06 654,713*
------------
Computer Software (7.1%)
335,000 Citrix Systems, Inc., 0%, due 03/22/19 167,919
1,500,000 Citrix Systems, Inc., (144A), 0%, due 03/22/19 751,875*
1,110,000 Network Associates, Inc., 0%, due 02/13/18 364,913
315,000 Network Associates, Inc., (144A), 0%, due 02/13/18 103,556*
685,000 Siebel Systems Inc., (144A), 5.5%, due 09/15/06 932,456*
885,000 Veritas Software Corp., 1.856%, due 08/13/06 1,236,513
------------
Total Computer Software 3,557,232
------------
Electronics (17.5%)
100,000 Conexant Systems, Inc., 4.25%, due 05/01/06 214,375
335,000 Conexant Systems, Inc., (144A), 4.25%, due 05/01/06 718,156*
430,000 Lattice Semiconductor, 4.75%, due 11/01/06 430,000
555,000 Level One Communications, Inc., 4%, due 09/01/04 1,418,025
120,000 LSI Logic Corp., 4.25%, due 03/15/04 221,850
245,000 LSI Logic Corp., (144A), 4.25%, due 03/15/04 452,944*
1,550,000 Micron Technology, Inc., 7%, due 07/01/04 1,906,500
695,000 Sanmina Corp., Inc., (144A), 4.25%, due 05/01/04 847,031*
415,000 Solectron Corp., 0%, due 01/27/19 260,413
1,950,000 Solectron Corp., (144A), 0%, due 01/27/19 1,223,625*
1,145,000 STMicroelectronics NV, 0%, due 09/22/09 1,039,088
------------
Total Electronics 8,732,007
------------
</TABLE>
18
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------
<C> <S> <C>
Energy & Oil Services (1.0%)
$ 470,000 Diamond Offshore Drilling, Inc., 3.75%, due
02/15/07 $ 479,400
------------
Entertainment & Leisure (0.9%)
315,000 Speedway Motorsports, Inc., 5.75%, due 09/30/03 465,019
------------
Financial (0.9%)
450,000 Lehman Brothers Holdings, Inc., 0%, due 07/06/04 450,000
------------
Healthcare (2.5%)
800,000 Affymetrix, Inc., (144A), 5%, due 10/01/06 746,000*
735,000 Alternative Living Services, Inc., 5.25%, due
12/15/02 510,825
------------
Total Healthcare 1,256,825
------------
Information Processing (0.9%)
52,295 Morgan Stanley Dean Witter & Co., 6%, due 03/15/01 444,508
------------
Insurance (1.6%)
545,000 American International Group, Inc., 2.25%, due
07/30/04 815,118
------------
Media -- Broadcasting & Publishing (10.0%)
1,910,000 Clear Channel Communications, 2.625%, due 04/01/03 2,678,775
1,555,000 Merrill Lynch & Company, Inc., Exchangeable
Time Warner, 0.25%, due 05/10/06 1,512,238
1,270,000 News America Holdings, Inc., 0%, due 03/11/13 802,488
------------
Total Media -- Broadcasting & Publishing 4,993,501
------------
Pharmaceuticals (6.8%)
375,000 Centocor, Inc., 4.75%, due 02/15/05 548,906
60,000 Centocor, Inc., (144A), 4.75%, due 02/15/05 87,825*
2,505,000 Elan Corp. PLC (Ireland), (144A), 0%, due 12/14/18 1,255,631*
330,000 Sepracor, Inc., 7%, due 12/15/05 318,038
1,200,000 Sepracor, Inc., (144A), 7%, due 12/15/05 1,156,500*
------------
Total Pharmaceuticals 3,366,900
------------
Retail (2.2%)
930,000 Costco Companies, Inc., 0%, due 08/19/17 883,500
200,000 Costco Companies, Inc., (144A), 0%, due 08/19/17 190,000*
------------
Total Retail 1,073,500
------------
Telecommunications (9.6%)
2,570,000 American Tower Corp., (144A), 2.25%, due 10/15/09 1,786,150*
170,000 Comverse Technology, Inc., 4.5%, due 07/01/05 452,519
465,000 Exchangeable Certificates Corp., (144A), 0.25%,
due 07/17/06 473,138*
44,400 Merrill Lynch & Company, Inc., (STRIDES), 5.75%,
due 06/01/00 521,700
</TABLE>
19
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Convertible Securities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued) October 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<C> <S> <C>
Telecommunications (Continued)
$ 300 Morgan Stanley Dean Witter & Co., Exchangeable
Qualcomm, Inc., 7%, due 08/15/01 $ 515,813
1,005,000 Telefonos de Mexico, S.A. de C.V., 4.25%, due
06/15/04 1,059,019
-----------
Total Telecommunications 4,808,339
-----------
Total Fixed Income Securities (Cost: $30,977,107)
(70.7%) 35,252,758
-----------
<CAPTION>
Number of
Shares Common Stock
---------- ------------
<C> <S> <C>
Automotive (0.8%)
23,000 Tower Automotive, Inc. 375,188**
-----------
Banking & Financial Services ( 0.9%)
48,600 Host Marriott Corp. (REIT) 437,400
-----------
Chemicals (0.6%)
13,500 Hercules, Inc. 324,844
-----------
Commercial Services (1.6%)
35,800 Metamor Worldwide, Inc. 675,725**
6,300 United Rentals, Inc. 117,338**
-----------
Total Commercial Services 793,063
-----------
Entertainment & Leisure (0.3%)
7,100 Action Performance Co., Inc. 144,441**
-----------
Total Common Stock (Cost: $2,208,433) (4.2%) 2,074,936
-----------
<CAPTION>
Convertible Preferred Stock
---------------------------
<C> <S> <C>
Banking & Financial Services (4.4%)
27,000 CNB Capital Trust, $1.50 931,500
2,900 Morgan Stanley Dean Witter & Co., $2.35 370,113
15,100 National Australia Bank, $1.97 425,631
15,200 Westpac Banking Corp., Ltd., (STRYPES), $3.125 456,000
-----------
Total Banking & Financial Services 2,183,244
-----------
Beverages, Food & Tobacco (1.0%)
10,200 Seagram Company, Ltd. (ACES), $60.15 504,263
-----------
Commercial Services (2.9%)
4,200 Cendant Corp., $0.65 97,650
36,000 Cendant Corp., $3.75 1,008,000
9,800 United Rentals, Inc., $3.25 330,750
-----------
Total Commercial Services 1,436,400
-----------
Computer Services (7.6%)
18,900 Morgan Stanley Dean Witter & Co., (Reset PERQS),
$5.95 1,138,725
15,325 Tribune Co., $2.00 2,072,706
12,500 Verio, Inc., (144A), $6.75 587,500*
-----------
Total Computer Services 3,798,931
-----------
</TABLE>
20
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -----------
<C> <S> <C>
Energy & Oil Services (0.9%)
12,400 Apache Corp. (ACES), $2.02 $ 443,300
-----------
Healthcare (1.0%)
8,700 Laboratory Corp. of America, $4.25 504,600
-----------
Media -- Broadcasting & Publishing (1.8%)
2,900 Comcast Corp., $1.43 243,963
10,400 Cox Communication, Inc., $3.50 644,800
-----------
Total Media -- Broadcasting & Publishing 888,763
-----------
Retail (1.0%)
13,600 Dollar General Corp., (STRYPES), $3.35 521,900
-----------
Telecommunications (2.9%)
4,200 Adelphia Communications Corp., $11.00 717,150
2,200 Global Crossing Ltd., $6.375 220,000
10,900 MediaOne Group, Inc. $3.04 495,950
-----------
Total Telecommunications 1,433,100
-----------
Utilities (1.1%)
10,600 AES Trust III, $3.375 535,300
-----------
Total Convertible Preferred Stock (Cost:
$11,280,919)
(24.6%) 11,753,851
-----------
Total Fixed Income and Equity Securities
(Cost: $44,466,459) (99.5%) 49,577,495
-----------
<CAPTION>
Principal
Amount Short-Term Investments
---------- ----------------------
<C> <S> <C>
$ 59,706 Bank of Montreal, 5.19%, due 11/01/99 59,706***
849,294 BankBoston Corp., 5.5%, due 11/01/99 849,294***
1,394,043 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 1,394,043
-----------
Total Short-Term Investments (Cost: $2,303,043)
(4.6%) 2,303,043
-----------
Total Investments (Cost: $46,769,502) (104.1%) 51,880,538
Liabilities in Excess of Other Assets (-4.1%) (2,050,221)
-----------
Net Assets (100%) $49,830,317
===========
</TABLE>
Notes to the Schedule of Investments:
* Restricted security (Note 9).
** Non-income producing.
*** Represents investments of security lending collateral (Note 3).
21
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Earnings Momentum Fund
- --------------------------------------------------------------------------------
Schedule of Investments
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ ----------
<C> <S> <C>
Advertising (3.6% of Net Assets)
7,100 Getty Images, Inc. $ 218,769*
9,000 XOOM.com, Inc. 562,500*
----------
Total Advertising 781,269
----------
Apparel Retailers (0.8%)
6,800 Factory 2-U Stores, Inc. 173,400*
----------
Automotive (1.4%)
13,800 Copart, Inc. 317,400*
----------
Banking & Financial Services (2.9%)
15,450 Profit Recovery Group International, Inc. 636,347*
----------
Commercial Services (8.9%)
3,500 Abacus Direct Corp. 512,750*
6,700 Corporate Executive Board Co. 252,925*
4,000 Forrester Research, Inc. 190,500*
5,300 HNC Software, Inc. 211,669*
6,600 Intraware, Inc. 121,275*
400 Navisite, Inc. 18,800*
9,400 Pegasus Systems, Inc. 401,850*
12,700 Provant, Inc. 223,838*
----------
Total Commercial Services 1,933,607
----------
Computer Services (12.8%)
3,300 Agile Software Corp. 323,400*
4,300 Breakaway Solutions, Inc. 228,706*
6,400 DBT Online, Inc. 149,600*
7,800 International Integration, Inc. 504,075*
19,300 MapQuest.com, Inc. 299,150*
300 Predictive Systems, Inc. 13,050*
4,900 Project Software & Development, Inc. 235,813*
3,500 VeriSign, Inc. 432,250*
6,100 Viant Corp. 606,950*
----------
Total Computer Services 2,792,994
----------
Computer Software (16.8%)
8,500 Brio Technology, Inc. 206,125*
6,700 Citrix Systems, Inc. 429,638*
5,700 Clarify, Inc. 440,325*
3,900 Great Plains Software, Inc. 216,450*
5,800 Informatica Corp. 419,050*
600 Intertrust Technologies Corp. 32,700*
6,400 Legato Systems, Inc. 344,000*
8,000 NetIQ Corp. 365,500*
</TABLE>
22
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ----------
<C> <S> <C>
Computer Software (Continued)
7,400 Peregrine Systems, Inc. $ 324,675*
1,700 SmartDisk Corp. 93,181*
3,100 Software.com, Inc. 208,669*
14,800 TSI International Software, Ltd. 355,200*
3,500 Verity, Inc. 241,063*
----------
Total Computer Software 3,676,576
----------
Electronics (2.1%)
12,700 Cymer, Inc. 469,106*
----------
Energy & Oil Services (1.0%)
18,900 Tuboscope, Inc. 210,263
----------
Entertainment & Leisure (13.5%)
17,400 Gemstar International Group, Ltd. 1,511,625*
20,700 Macrovision Corp. 1,172,138*
5,550 Westwood One, Inc. 255,994*
----------
Total Entertainment & Leisure 2,939,757
----------
Foods, Hotels & Restaurants (2.1%)
15,000 BUCA, Inc. 183,750*
10,500 O'Charleys, Inc. 160,781*
5,100 P.F. Chang's China Bistro, Inc. 109,650*
----------
Total Foods, Hotels & Restaurants 454,181
----------
Healthcare (1.3%)
17,700 Eclipsys Corp. 280,988*
----------
Media -- Broadcasting & Publishing (4.4%)
10,700 Cumulus Media, Inc. 383,863
4,600 Radio One, Inc. 229,425*
1,000 Spanish Broadcasting System, Inc. 26,625*
1,500 TiVo, Inc. 64,313*
7,400 Wink Communications, Inc. 259,925*
----------
Total Media -- Broadcasting & Publishing 964,151
----------
Medical Supplies (4.1%)
7,200 ArthroCare Corp. 522,000*
14,400 Eclipse Surgical Technologies, Inc. 134,100*
4,100 Xomed Surgical Products, Inc. 249,331*
----------
Total Medical Supplies 905,431
----------
Pharmaceuticals (5.2%)
8,800 Biomatrix, Inc. 199,650*
2,900 ILEX Oncology, Inc. 40,600*
</TABLE>
23
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Earnings Momentum Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<C> <S> <C>
Pharmaceuticals (Continued)
6,700 Invitrogen Corp. $ 167,500*
6,500 Medicis Pharmaceutical Corp., Class A 198,250*
8,300 Pharmacyclics, Inc. 293,613*
5,300 Transkaryotic Therapies, Inc. 246,450*
-----------
Total Pharmaceuticals 1,146,063
-----------
Pollution Control (2.1%)
28,800 Stericycle, Inc. 450,000*
-----------
Retail (3.1%)
13,600 Charlotte Russe Holding, Inc. 192,100*
11,700 Hibbett Sporting Goods, Inc. 186,469*
7,900 Insight Enterprises, Inc 295,263*
-----------
Total Retail 673,832
-----------
Telecommunications (11.4%)
11,800 Concord Communications, Inc. 612,863*
6,200 CSG Systems International, Inc. 212,738*
6,400 Genesys Telecommunications Laboratories, Inc. 314,400*
500 MCK Communications, Inc. 11,250*
6,600 Micromuse, Inc. 705,375*
8,200 RSA Security, Inc. 291,100*
7,600 Terayon Communication Systems 332,500*
-----------
Total Telecommunications 2,480,226
-----------
Total Common Stock (Cost: $12,658,360) (97.5%) 21,285,591
-----------
<CAPTION>
Principal
Amount Short-Term Investments
--------- ----------------------
<C> <S> <C>
$161,619 Bank of Montreal, 5.19%, due 11/01/99 161,619**
198,981 BankBoston Corp., 5.5%, due 11/01/99 198,981**
553,161 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 553,161
400,000 Janus Money Market Fund 400,000**
800,000 Merrimac Money Market Fund 800,000**
900,000 Royal Bank of Scotland, 5.25%, due 11/01/99 900,000**
-----------
Total Short-Term Investments (Cost: $3,013,761)
(13.8%) 3,013,761
-----------
Total Investments (Cost: $15,672,121) (111.3%) 24,299,352
Liabilities in Excess of Other Assets (-11.3%) (2,461,661)
-----------
Net Assets (100.0%) $21,837,691
===========
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
24
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Growth Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ ------------
<C> <S> <C>
Advertising (2.5% of Net Assets)
6,700 Omnicom Group, Inc. $ 589,600
------------
Banking & Financial Services (2.6%)
15,500 Schwab (Charles) Corp. 603,531
------------
Beverages, Food & Tobacco (2.9%)
6,100 Anheuser-Busch Companies, Inc. 438,056
1,400 General Mills, Inc. 122,063
1,700 Quaker Oats Co. 119,000
------------
Total Beverages, Food & Tobacco 679,119
------------
Computer Services (14.2%)
4,400 America Online, Inc. 570,625*
10,500 Dell Computer Corp. 421,313*
3,800 EMC Corp. -- Mass 277,400*
3,000 International Business Machines Corp. 295,125
6,300 Scient Corp. 780,413*
2,800 Sun Microsystems, Inc. 296,275*
2,400 VeriSign, Inc. 296,400*
2,000 Yahoo!, Inc. 358,125*
------------
Total Computer Services 3,295,676
------------
Computer Software (9.8%)
19,800 Microsoft Corp. 1,832,738*
4,000 Siebel Systems, Inc. 439,250*
------------
Total Computer Software 2,271,988
------------
Cosmetics & Household Products (1.4%)
3,200 Procter & Gamble Co. 335,600
------------
Electrical Equipment (7.7%)
13,150 General Electric Co. 1,782,647
------------
Electronics (8.2%)
10,450 Intel Corp. 809,222
6,700 Maxim Integrated Products, Inc. 528,881*
7,300 XILINX, Inc. 573,963*
------------
Total Electronics 1,912,066
------------
Entertainment & Leisure (1.2%)
9,300 Harrah's Entertainment, Inc. 269,119*
------------
Healthcare (2.4%)
5,400 Johnson & Johnson 565,650
------------
</TABLE>
25
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Growth Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ------------
<C> <S> <C>
Media -- Broadcasting & Publishing (6.6%)
6,150 Clear Channel Communications, Inc. $ 494,306*
12,200 Cox Communications, Inc. 554,338*
6,875 Time Warner, Inc. 479,102
------------
Total Media -- Broadcasting & Publishing 1,527,746
------------
Medical Supplies (1.4%)
4,300 MiniMed, Inc. 325,994*
------------
Pharmaceuticals (10.4%)
5,850 Amgen, Inc. 466,538*
4,900 Bristol-Myers Squibb Co. 376,381
19,050 Pfizer, Inc. 752,475
6,450 Schering-Plough Corp. 319,275
6,300 Warner-Lambert Co. 502,819
------------
Total Pharmaceuticals 2,417,488
------------
Retail (7.0%)
2,700 Costco Wholesale Corp. 216,844*
5,450 Home Depot, Inc. 411,475
17,800 Wal-Mart Stores, Inc. 1,009,038
------------
Total Retail 1,637,357
------------
Telecommunications (20.0%)
200 Allied Riser Communications, Inc. 3,613*
10,800 Bell Atlantic Corp. 701,325
15,800 Cisco Systems, Inc. 1,169,200*
1,200 Juniper Networks, Inc. 330,750*
12,600 Lucent Technologies, Inc. 809,550
7,300 MCI WorldCom, Inc. 626,431*
2,000 Nextel Communications, Inc., Class A 172,375*
2,100 Qualcomm, Inc. 467,775*
7,625 Vodafone AirTouch PLC (ADR) 365,523
------------
Total Telecommunications 4,646,542
------------
Total Common Stock (Cost: $16,060,732) (98.3%) 22,860,123
------------
<CAPTION>
Principal
Amount Short-Term Investments
--------- ----------------------
<C> <S> <C>
$161,806 Bank of Montreal, 5.19%, due 11/01/99 161,806**
754,420 BankBoston Corp., 5.5%, due 11/01/99 754,420**
900,000 Janus Money Market Fund 900,000**
647,224 Merrimac Money Market Fund 647,224**
------------
Total Short-Term Investments (Cost: $2,463,450)
(10.6%) 2,463,450
------------
Total Investments (Cost: $18,524,182) (108.9%) 25,323,573
Liabilities in Excess of Other Assets (-8.9%) (2,073,940)
------------
Net Assets (100.0%) $ 23,249,633
============
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
26
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Value Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ -----------
<C> <S> <C>
Aerospace/Defense (1.8% of Net Assets)
15,600 Boeing Co. $ 718,575
2,200 Lockheed Martin Corp. 44,000
1,100 Northrop Grumman Corp. 60,363
10,500 Raytheon Co., Class B 305,813
1,100 United Technologies Corp. 66,550
-----------
Total Aerospace/Defense 1,195,301
-----------
Automotive (5.0%)
88,212 Delphi Automotive Systems Corp. 1,449,985
16,400 Ford Motor Co. 899,950
14,100 General Motors Corp. 990,525
-----------
Total Automotive 3,340,460
-----------
Banking (6.0%)
4,720 Bank One Corp. 177,295
19,400 BankAmerica Corp. 1,248,875
11,400 Chase Manhattan Corp. 996,075
8,100 Fifth Third Bancorp 597,881
19,800 Wells Fargo & Co. 947,925
-----------
Total Banking 3,968,051
-----------
Banking & Financial Services (22.0%)
5,200 American Express Co. 800,800
19,700 Associates First Capital Corp., Class A 719,050
49,550 Citigroup, Inc. 2,681,894
26,500 Federal Home Loan Mortgage Corp. 1,432,656
21,800 Federal National Mortgage Association 1,542,350
4,500 Golden West Financial Corp. 502,875
16,300 Household International, Inc. 727,388
8,300 J.P. Morgan & Company, Inc. 1,086,263
6,900 Merrill Lynch & Company, Inc. 541,650
12,400 Morgan Stanley Dean Witter & Co. 1,367,875
27,100 Schwab (Charles) Corp. 1,055,206
42,200 T. Rowe Price Associates, Inc. 1,498,100
7,200 Wachovia Corp. 621,000
-----------
Total Banking & Financial Services 14,577,107
-----------
Beverages, Food & Tobacco (0.7%)
18,300 Philip Morris Companies, Inc. 460,931
-----------
Chemicals (2.6%)
600 Dow Chemical Co. 70,950
5,100 Du Pont (E.I.) De Nemours & Co. 328,631
57,000 Occidental Petroleum Corp. 1,300,313
-----------
Total Chemicals 1,699,894
-----------
</TABLE>
27
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Value Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<C> <S> <C>
Computer Services (2.3%)
28,200 Compaq Computer Corp. $ 535,800
13,200 Hewlett-Packard Co. 977,625
-----------
Total Computer Services 1,513,425
-----------
Cosmetics & Household Products (2.0%)
36,100 Gillette Co. 1,306,369
-----------
Electronics (3.4%)
3,100 Applied Materials, Inc. 278,419*
6,400 Emerson Electric Co. 384,400
600 Honeywell, Inc. 63,263
13,400 Motorola, Inc. 1,305,663
2,700 Texas Instruments, Inc. 242,325
-----------
Total Electronics 2,274,070
-----------
Energy & Oil Services (17.6%)
64,500 Baker Hughes, Inc. 1,801,969
4,300 Chevron Corp. 392,644
12,900 Enron Corp. 515,194
36,500 Exxon Corp. 2,703,281
37,100 Halliburton Co. 1,398,206
10,800 Mobil Corp. 1,042,200
28,100 Royal Dutch Petroleum Co. (Netherlands) 1,684,244
51,800 Santa Fe International Corp. 1,091,038
16,300 Schlumberger, Ltd. 987,169
1,000 Texaco, Inc. 61,375
-----------
Total Energy & Oil Services 11,677,320
-----------
Entertainment & Leisure (3.7%)
40,300 Harrah's Entertainment, Inc. 1,166,181*
50,000 The Walt Disney Co. 1,318,750
-----------
Total Entertainment & Leisure 2,484,931
-----------
Food Retailers (0.1%)
1,300 Albertson's, Inc. 47,206
-----------
Foods, Hotels & Restaurants (5.7%)
27,900 McDonald's Corp. 1,150,875
42,600 Mirage Resorts, Inc. 620,363*
34,900 PepsiCo, Inc. 1,210,594
20,315 Tricon Global Restaurants, Inc. 816,409*
-----------
Total Foods, Hotels & Restaurants 3,798,241
-----------
</TABLE>
28
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<C> <S> <C>
Insurance (8.2%)
30,300 Allstate Corp. $ 871,125
18,300 American International Group, Inc. 1,883,756
10,000 Marsh & McLennan Companies, Inc. 790,625
20,500 Progressive Corp. 1,897,531
-----------
Total Insurance 5,443,037
-----------
Machinery (0.5%)
7,500 Grainger (W.W.), Inc. 317,813
-----------
Media -- Broadcasting & Publishing (2.3%)
21,900 Time Warner, Inc. 1,526,156
-----------
Metals (1.0%)
6,400 Alcoa, Inc. 388,800
4,500 Phelps Dodge Corp. 253,688
-----------
Total Metals 642,488
-----------
Paper & Forest Products (2.6%)
65,500 Fort James Corp. 1,723,469
-----------
Pharmaceuticals (2.1%)
25,900 Pharmacia & Upjohn, Inc. 1,396,981
-----------
Telecommunications (3.0%)
1,100 AT&T Corp. 51,425
2,100 Bell Atlantic Corp. 136,369
7,200 BellSouth Corp. 324,000
7,700 Sprint Corp. (FON Group) 572,206
28,100 Williams Communications Group, Inc. 895,688*
-----------
Total Telecommunications 1,979,688
-----------
Transportation (6.6%)
37,400 Burlington Northern Santa Fe Corp. 1,192,125
28,000 Delta Air Lines, Inc. 1,524,250
15,200 FDX Corp. 654,550*
15,200 UAL Corp. 1,034,550*
-----------
Total Transportation 4,405,475
-----------
Utilities (0.3%)
3,800 Duke Energy Corp. 214,700
-----------
Total Common Stock (Cost: $61,277,995) (99.5%) 65,993,113
-----------
</TABLE>
29
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Value Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Principal
Amount Short-Term Investments Value
---------- ---------------------- -----------
<C> <S> <C>
$ 86,130 Bank of Montreal, 5.19%, due 11/01/99 $ 86,130**
746,208 BankBoston Corp., 5.5%, due 11/01/99 746,208**
63,776 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 63,776
478,962 Merrimac Money Market Fund 478,962**
-----------
Total Short-Term Investments (Cost: $1,375,076)
(2.1%) 1,375,076
-----------
Total Investments (Cost: $62,653,071) (101.6%) 67,368,189
Liabilities in Excess of Other Assets (-1.6%) (1,075,712)
-----------
Net Assets (100.0%) $66,292,477
===========
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
30
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Select Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
---------- ------------ -----------
<C> <S> <C>
Banking & Financial Services (8.7% of Net Assets)
10,955 Goldman Sachs Group, Inc. $ 777,805
74,400 Providian Financial Corp. 8,109,600
252,792 Schwab (Charles) Corp. 9,843,089
222,335 T. Rowe Price Associates, Inc. 7,892,893
-----------
Total Banking & Financial Services 26,623,387
-----------
Commercial Services (2.8%)
217,835 Paychex, Inc. 8,577,253
-----------
Computer Services (5.0%)
386,079 Dell Computer Corp. 15,491,420*
-----------
Computer Software (13.6%)
126,769 Microsoft Corp. 11,734,056*
273,623 Siebel Systems, Inc. 30,047,226*
-----------
Total Computer Software 41,781,282
-----------
Cosmetics & Household Products (3.0%)
100,065 Gillette Co. 3,621,102
53,016 Procter & Gamble Co. 5,560,053
-----------
Total Cosmetics & Household Products 9,181,155
-----------
Electronics (15.6%)
179,133 Applied Materials, Inc. 16,088,383*
194,876 Intel Corp. 15,090,710
214,211 Maxim Integrated Products, Inc. 16,909,281*
-----------
Total Electronics 48,088,374
-----------
Energy & Oil Services (2.1%)
160,810 Enron Corp. 6,422,349
-----------
Foods, Hotels & Restaurants (2.7%)
20,848 Coca-Cola Co. 1,230,032
494,400 Mirage Resorts, Inc. 7,199,700*
-----------
Total Foods, Hotels & Restaurants 8,429,732
-----------
Insurance (6.5%)
57,125 American International Group, Inc. 5,880,305
151,634 Progressive Corp. 14,035,622
-----------
Total Insurance 19,915,927
-----------
Media -- Broadcasting & Publishing (8.5%)
158,853 Cox Communications, Inc. 7,217,883*
253,803 Pixar, Inc. 9,660,377*
132,161 Time Warner, Inc. 9,209,970
-----------
Total Media -- Broadcasting & Publishing 26,088,230
-----------
</TABLE>
31
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Select Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
----------- ------------
<C> <S> <C>
Pharmaceuticals (7.8%)
80,600 Biogen, Inc. $ 5,974,475*
249,429 Pfizer, Inc. 9,852,446
104,076 Warner-Lambert Co. 8,306,566
------------
Total Pharmaceuticals 24,133,487
------------
Retail (6.0%)
175,969 Home Depot, Inc. 13,285,660
148,778 Safeway, Inc. 5,253,723*
------------
Total Retail 18,539,383
------------
Telecommunications (7.5%)
229,328 Cisco Systems, Inc. 16,970,272*
92,338 Lucent Technologies, Inc. 5,932,717
------------
Total Telecommunications 22,902,989
------------
Transportation (4.5%)
292,369 Kansas City Southern Industries, Inc. 13,869,254
------------
Total Common Stock (Cost: $189,570,803) (94.3%) 290,044,222
------------
<CAPTION>
Principal
Amount Short-Term Investments
----------- ----------------------
<C> <S> <C>
$ 2,269,371 Bank of Montreal, 5.19%, due 11/01/99 2,269,371**
1,657,468 Bank of Nova Scotia, 5.35%, due 11/08/99 1,657,468**
1,802,140 BankBoston Corp., 5.5%, due 11/01/99 1,802,140**
17,560,108 Investors Bank and Trust Depository Reserve,
4.3%, due 11/01/99 17,560,108
4,370,576 Janus Money Market Fund 4,370,576**
12,350,962 Merrimac Money Market Fund 12,350,962**
12,100,000 Royal Bank of Scotland, 5.25%, due 11/01/99 12,100,000**
------------
Total Short-Term Investments (Cost: $52,110,625)
(16.9%) 52,110,625
------------
Total Investments (Cost: $241,681,428) (111.2%) 342,154,847
Liabilities in Excess of Other Assets (-11.2%) (34,498,106)
------------
Net Assets (100.0%) $307,656,741
============
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
32
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Small Cap Growth Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ ------------
<C> <S> <C>
Advertising (0.0% of Net Assets)
1 Ventiv Health, Inc. $ 5*
------------
Banking (0.7%)
51,200 NextCard, Inc. 1,596,800*
------------
Banking & Financial Services (0.6%)
56,400 Telebanc Financial Corp. 1,353,600*
------------
Commercial Services (8.9%)
50,600 CBT Group PLC (ADR) (Ireland) 1,043,625*
66,500 Corporate Executive Board Co. 2,510,375*
84,400 GoTo.com, Inc. 4,810,800*
124,900 HNC Software, Inc. 4,988,194*
36,300 HotJobs.com, Ltd. 837,169*
27,300 MedQuist, Inc. 873,600*
17,100 Navisite, Inc. 803,700*
25,900 Online Resources & Communications Corp. 275,188*
50,000 Pegasus Systems, Inc. 2,137,500*
83,100 Whittman-Hart, Inc. 3,194,156*
------------
Total Commercial Services 21,474,307
------------
Computer Services (19.0%)
40,500 About.com 1,913,625*
14,700 Agile Software Corp. 1,440,600*
1,400 Akamai Technologies, Inc. 203,263*
32,000 Checkfree Holdings Corp. 1,196,000*
2,300 Commerce One, Inc. 393,875*
39,900 Critical Path, Inc. 1,825,425*
38,700 Digex, Inc. 1,107,788*
28,500 Exchange Applications, Inc. 776,625*
53,500 InfoSpace.com, Inc. 2,975,938*
5,500 InterNAP Network Services Corp. 508,063*
67,600 International Integration, Inc. 4,368,650*
25,200 Lason, Inc. 936,339*
47,200 Lycos, Inc. 2,525,200*
46,800 Macromedia, Inc. 3,015,675*
34,000 Mercury Interactive Corp. 2,758,250*
1,600 Packeteer, Inc. 54,400*
12,400 Paradyne Networks, Inc. 376,650*
39,300 Predictive Systems, Inc. 1,709,550*
19,800 Proxicom, Inc. 1,519,650*
15,400 Scient Corp. 1,907,675*
42,000 VeriSign, Inc. 5,187,000*
34,500 Viant Corp. 3,432,750*
31,746 Yahoo!, Inc. 5,684,518*
------------
Total Computer Services 45,817,509
------------
</TABLE>
33
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Small Cap Growth Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ------------
<C> <S> <C>
Computer Software (19.9%)
196,800 Citrix Systems, Inc. $ 12,619,800*
14,900 Great Plains Software, Inc. 826,950*
20,500 Informatica Corp. 1,481,125*
17,700 Intertrust Technologies Corp. 964,650*
12,400 Interwoven, Inc. 971,850*
177,000 Legato Systems, Inc. 9,513,750*
13,700 Mission Critical Software, Inc. 806,588*
72,800 Peregrine Systems, Inc. 3,194,100*
39,300 Quest Software, Inc. 2,898,375*
78,000 Siebel Systems, Inc. 8,565,375*
30,300 Software.com, Inc. 2,039,569*
97,800 Technology Solutions Co. 2,004,900*
35,200 Tibco Software, Inc. 1,372,800*
5,900 Vignette Corp. 932,200*
------------
Total Computer Software 48,192,032
------------
Electronics (8.9%)
30,000 Cymer, Inc. 1,108,125*
46,200 Galileo Technology, Inc. 1,056,825*
1,900 JNI Corp. 101,531*
61,400 Maxim Integrated Products, Inc. 4,846,763*
73,600 Micrel, Inc. 4,002,000*
30,400 MIPS Technologies, Inc. 877,800*
19,700 Power Integrations, Inc. 2,008,169*
85,400 Semtech Corp. 3,271,888*
46,400 Silicon Image, Inc. 2,050,300*
21,900 Transwitch Corp. 1,030,669*
50,600 Varian Semiconductor Equipment Associates, Inc. 1,144,825*
1,800 Vixel Corp. 57,600*
------------
Total Electronics 21,556,495
------------
Entertainment & Leisure (7.3%)
33,200 Championship Auto Racing Teams, Inc. 761,525
132,400 Gemstar International Group, Ltd. 11,502,250*
36,000 Macrovision Corp. 2,038,500*
37,050 SFX Entertainment, Inc. 1,294,434*
45,000 Westwood One, Inc. 2,075,625*
------------
Total Entertainment & Leisure 17,672,334
------------
Healthcare (2.6%)
186,450 Dendrite International, Inc. 5,849,869*
44,600 Trizetto Group, Inc. 446,000*
------------
Total Healthcare 6,295,869
------------
Machinery (0.1%)
10,700 Dycom Industries, Inc. 348,419*
------------
</TABLE>
34
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ------------
<C> <S> <C>
Media -- Broadcasting & Publishing (7.2%)
36,400 Citadel Communications, Corp. $ 1,758,575*
69,700 Clear Channel Communications, Inc. 5,602,138*
19,900 Cox Radio, Inc. 1,393,000*
35,400 Emmis Communications Corp. 2,553,225*
18,600 Entercom Communications Corp. 926,513*
42,800 Radio One, Inc. 2,134,650*
29,700 Spanish Broadcasting System, Inc. 790,763*
40,400 TiVo, Inc. 1,732,150*
13,200 Wink Communications, Inc. 463,650*
------------
Total Media -- Broadcasting & Publishing 17,354,664
------------
Pharmaceuticals (1.4%)
65,100 Alkermes, Inc. 2,298,844
14,800 Andrx Corp. 706,700*
32,000 Geltex Pharmaceuticals, Inc. 394,000*
------------
Total Pharmaceuticals 3,399,544
------------
Retail (5.6%)
31,400 Ann Taylor Stores, Inc. 1,336,463*
32,700 barnesandnoble.com, Inc. 600,863*
77,000 Bed, Bath & Beyond, Inc. 2,565,063*
77,850 Cost Plus, Inc. 2,841,525*
37,925 Dollar Tree Stores, Inc. 1,652,108*
19,400 Drugstore.com, Inc. 705,675*
78,400 E4L, Inc. 205,800*
52,100 Linens 'N Things Inc. 2,070,975*
50,200 Pacific Sunwear of California, Inc. 1,515,413*
------------
Total Retail 13,493,885
------------
Telecommunications (12.7%)
600 Allied Riser Communications, Inc. 10,838*
58,000 AT & T Canada, Inc. 1,870,500*
168,084 CSG Systems International, Inc. 5,767,382*
201,800 Exodus Communications, Inc. 17,354,800*
151,500 Verio, Inc. 5,652,844*
------------
Total Telecommunications 30,656,364
------------
Utilities (0.6%)
53,700 Independent Energy Holdings PLC (ADR) 1,453,256*
------------
Total Common Stock (Cost: $100,316,647) (95.5%) 230,665,083
------------
</TABLE>
35
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Small Cap Growth Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Principal
Amount Short-Term Investments Value
----------- ---------------------- ------------
<C> <S> <C>
$ 2,545,691 Bank of Montreal, 5.19%, due 11/01/99 $ 2,545,691**
8,320,658 Bank of Nova Scotia, 5.35%, due 11/08/99 8,320,658**
8,391,561 BankBoston Corp., 5.5%, due 11/01/99 8,391,561**
14,032,689 Investors Bank and Trust Depository Reserve,
4.3%, due 11/01/99 14,032,689
2,938,519 Janus Money Market Fund 2,938,519**
9,760,971 Merrimac Money Market Fund 9,760,971**
6,800,000 Royal Bank of Scotland, 5.25%, due 11/01/99 6,800,000**
------------
Total Short-Term Investments (Cost: $52,790,089)
(21.9%) 52,790,089
------------
Total Investments (Cost: $153,106,736) (117.4%) 283,455,172
Liabilities in Excess of Other Assets (-17.4%) (41,992,038)
------------
Net Assets (100.0%) $241,463,134
============
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
36
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Value Opportunities Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
- --------- ------------ ----------
<S> <C> <C>
Banking (5.7% of Net Assets)
6,600 Astoria Financial Corp. $ 237,600
21,700 Hudson United Bancorp 682,194
42,400 Peoples Heritage Financial Group, Inc. 805,600
----------
Total Banking 1,725,394
----------
Beverages, Food & Tobacco (1.8%)
28,300 Universal Foods Corp. 541,238
----------
Building Materials (4.6%)
45,000 Johns Manville Corp. 492,188
14,900 Martin Marietta Materials, Inc. 580,169
6,400 Southdown, Inc. 309,200
----------
Total Building Materials 1,381,557
----------
Chemicals (3.7%)
70,800 CK Witco Corp. 663,750
13,300 Mallinckrodt, Inc. 451,369
----------
Total Chemicals 1,115,119
----------
Commercial Services (1.9%)
19,800 Dun & Bradstreet Corp. 581,625
----------
Computer Services (10.4%)
50,800 Cambridge Technology Partners, Inc. 561,975*
19,200 Keane, Inc. 451,200*
54,100 Mentor Graphics Corp. 436,181*
15,900 NCR Corp. 526,688*
74,000 Read-Rite Corp. 291,375*
5,100 Seagate Technology, Inc. 150,131*
19,500 Shared Medical Systems Corp. 736,125
----------
Total Computer Services 3,153,675
----------
Construction (1.0%)
19,000 Lennar Corp. 312,313
----------
Electronics (13.0%)
18,600 Anixter International, Inc. 388,275*
46,500 Arrow Electronics, Inc. 1,014,281*
46,400 International Rectifier Corp. 901,900*
11,900 Millipore Corp. 379,313
18,000 Molex, Inc., Class A 594,000
26,450 Vishay Intertechnology, Inc. 646,372*
----------
Total Electronics 3,924,141
----------
</TABLE>
37
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Value Opportunities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ----------
<C> <S> <C>
Energy & Oil Services (3.8%)
52,600 Pride International, Inc. $ 723,250*
16,700 Talisman Energy, Inc. 434,200*
----------
Total Energy & Oil Services 1,157,450
----------
Entertainment & Leisure (0.9%)
12,500 Polaroid Corp. 278,906
----------
Food Retailers (3.8%)
15,800 Albertson's, Inc. 573,738
8,000 Hannaford Brothers Co. 560,500
----------
Total Food Retailers 1,134,238
----------
Foods, Hotels & Restaurants (4.3%)
15,600 Dean Foods Co. 721,500
40,800 Mirage Resorts, Inc. 594,150*
----------
Total Foods, Hotels & Restaurants 1,315,650
----------
Healthcare (10.6%)
122,900 Beverly Enterprises, Inc. 483,919*
57,300 Health Management Associates, Inc. 508,538*
67,800 Henry Schein, Inc. 881,400*
34,400 McKesson HBOC, Inc. 690,150
67,700 Omnicare, Inc. 626,225
----------
Total Healthcare 3,190,232
----------
Insurance (1.5%)
33,200 Old Republic International Corp. 454,425
----------
Machinery (8.2%)
29,974 Albany International Corp., Class A 455,230*
24,000 Applied Power, Inc. 697,500
34,200 Crane Co. 698,963
47,700 Unova, Inc. 635,006*
----------
Total Machinery 2,486,699
----------
Media -- Broadcasting & Publishing (1.3%)
12,000 Readers Digest Association, Inc., Class A 387,000
----------
Medical Supplies (2.1%)
24,800 Becton Dickinson & Co. 629,300
----------
Paper & Forest Products (1.0%)
14,000 Smurfit-Stone Container Corp. 302,750*
----------
Retail (8.9%)
46,100 Borders Group, Inc. 599,300*
40,000 Consolidated Stores Corp. 732,500*
25,800 Jostens, Inc. 545,025
47,500 Saks, Inc. 816,406*
----------
Total Retail 2,693,231
----------
</TABLE>
38
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -----------
<C> <S> <C>
Textiles, Clothing & Fabrics (5.9%)
18,600 Jones Apparel Group, Inc. $ 588,225*
17,000 Liz Claiborne, Inc. 680,000
35,700 Warnaco Group, Inc. 508,725
-----------
Total Textiles, Clothing & Fabrics 1,776,950
-----------
Transportation (1.0%)
10,400 Trinity Industries, Inc. 310,050
-----------
Total Common Stock (Cost: $29,003,147) (95.4%) 28,851,943
-----------
<CAPTION>
Principal
Amount Short-Term Investments
---------- ----------------------
<C> <S> <C>
$ 76,757 Bank of Montreal, 5.19%, due 11/01/99 76,757**
784,816 BankBoston Corp., 5.5%, due 11/01/99 784,816**
2,233,331 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 2,233,331
307,027 Merrimac Money Market Fund 307,027**
-----------
Total Short-Term Investments (Cost: $3,401,931)
(11.3%) 3,401,931
-----------
Total Investments (Cost: $32,405,078) (106.7%) 32,253,874
Liabilities in Excess of Other Assets (-6.7%) (2,016,058)
-----------
Net Assets (100.0%) $30,237,816
===========
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
39
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Statements of Assets and Liabilities October 31, 1999
<TABLE>
<CAPTION>
TCW Galileo
Aggressive TCW Galileo TCW Galileo
Growth Convertible Earnings
Equities Securities Momentum
Fund Fund Fund
----------- ----------- -----------
Dollar Amounts in Thousands
(Except per Share Amounts)
<S> <C> <C> <C>
ASSETS
Investments, at Value (/1/) $ 210,204 $ 51,881 $ 24,299
Receivables for Securities Sold 2,098 1,853 317
Receivable for Fund Shares Sold 184 -- --
Interest and Dividends Receivable 44 312 4
Deferred Organization Costs 1 1 --
--------- --------- ---------
Total Assets 212,531 54,047 24,620
--------- --------- ---------
LIABILITIES
Payables for Securities Purchased 2,035 3,218 249
Payables Upon Return of Securities Loaned
(Note 3) 39,750 909 2,461
Accrued Management Fees 135 30 23
Other Accrued Expenses 51 60 49
--------- --------- ---------
Total Liabilities 41,971 4,217 2,782
--------- --------- ---------
NET ASSETS $ 170,560 $ 49,830 $ 21,838
========= ========= =========
NET ASSETS CONSIST OF:
Paid-in Capital $ 47,800 $ 37,938 $ 915
Undistributed Net Realized Gain on
Investments 35,948 6,595 14,880
Unrealized Appreciation on Investments 90,151 5,111 8,627
Undistributed Net Investment Income (Loss) (3,339) 186 (2,584)
--------- --------- ---------
NET ASSETS $ 170,560 $ 49,830 $ 21,838
========= ========= =========
NET ASSETS ATTRIBUTABLE TO:
Institutional Class Shares $ 168,193 $ 49,830 $ 21,838
========= ========= =========
Advisory Class Shares $ 2,367 $ -- $ --
========= ========= =========
CAPITAL SHARES OUTSTANDING:
Institutional Class 7,546,207 3,937,227 1,444,253
========= ========= =========
Advisory Class 106,267 -- --
========= ========= =========
NET ASSET VALUE PER SHARE:
Institutional Class $ 22.29 $ 12.66 $ 15.12
========= ========= =========
Advisory Class $ 22.27 $ -- $ --
========= ========= =========
</TABLE>
(1) The identified cost for the TCW Galileo Aggressive Growth Equities Fund,
TCW Galileo Convertible Securities Fund and the TCW Galileo Earnings Momen-
tum Fund was $120,053, $46,770 and $15,672, respectively.
40
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
<TABLE>
<CAPTION>
TCW TCW TCW TCW TCW
Galileo Galileo Galileo Galileo Galileo
Large Cap Large Cap Select Small Cap Value
Growth Value Equities Growth Opportunities
Fund Fund Fund Fund Fund
--------- --------- ---------- --------- -------------
Dollar Amounts in Thousands
(Except per Share Amounts)
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at Value
(/1/) $ 25,324 $ 67,368 $ 342,155 $ 283,455 $ 32,254
Receivables for
Securities Sold 1,330 335 -- 774 --
Receivables for Fund
Shares Sold 1 -- 221 1,732 --
Interest and Dividends
Receivable 10 66 151 50 18
Deferred Organization
Costs -- -- -- -- 3
--------- --------- ---------- --------- ---------
Total Assets 26,665 67,769 342,527 286,011 32,275
--------- --------- ---------- --------- ---------
LIABILITIES
Payables for Securities
Purchased 26 62 -- 5,514 793
Payables for Fund
Shares Redeemed -- -- 31 32 --
Payables Upon Return of
Securities Loaned
(Note 3) 2,463 1,311 34,551 38,757 1,169
Accrued Management Fees 11 29 178 184 21
Other Accrued Expenses 915 75 110 61 54
--------- --------- ---------- --------- ---------
Total Liabilities 3,415 1,477 34,870 44,548 2,037
--------- --------- ---------- --------- ---------
NET ASSETS $ 23,250 $ 66,292 $ 307,657 $ 241,463 $ 30,238
========= ========= ========== ========= =========
NET ASSETS CONSIST OF:
Paid-in Capital $ 14,872 $ 64,413 $ 152,342 $ 94,450 $ 27,338
Undistributed Net
Realized Gain
(Loss) on Investments 1,692 (3,289) 55,833 22,008 3,104
Unrealized Appreciation
(Depreciation) on
Investments 6,800 4,715 100,474 130,348 (151)
Undistributed Net
Investment Income
(Loss) (114) 453 (992) (5,343) (53)
--------- --------- ---------- --------- ---------
NET ASSETS $ 23,250 $ 66,292 $ 307,657 $ 241,463 $ 30,238
========= ========= ========== ========= =========
NET ASSETS ATTRIBUTABLE
TO:
Institutional Class
Shares $ 23,164 $ 66,234 $ 288,546 $ 240,792 $ 30,238
========= ========= ========== ========= =========
Advisory Class Shares $ 86 $ 58 $ 19,111 $ 671 $ --
========= ========= ========== ========= =========
CAPITAL SHARES
OUTSTANDING:
Institutional Class 1,396,944 5,605,929 13,947,435 7,814,481 2,691,623
========= ========= ========== ========= =========
Advisory Class 5,161 4,972 924,774 21,820 --
========= ========= ========== ========= =========
NET ASSET VALUE PER
SHARE:
Institutional Class $ 16.58 $ 11.82 $ 20.69 $ 30.81 $ 11.23
========= ========= ========== ========= =========
Advisory Class $ 16.60 $ 11.79 $ 20.67 $ 30.74 $ --
========= ========= ========== ========= =========
</TABLE>
(1) The identified cost for the TCW Galileo Large Cap Growth Fund, the TCW
Galileo Large Cap Value Fund, the TCW Galileo Select Equities Fund, the TCW
Galileo Small Cap Growth Fund and the TCW Galileo Value Opportunities Fund
was $18,524, $62,653, $241,681, $153,107 and $32,405, respectively.
41
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Statements of Operations Year Ended October 31, 1999
<TABLE>
<CAPTION>
TCW
Galileo TCW
Aggressive TCW Galileo Galileo
Growth Convertible Earnings
Equities Securities Momentum
Fund Fund Fund
---------- ----------- --------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 78 $ 733 $ 1
Interest (Note 2) 408 1,274 43
------- ------- -------
Total 486 2,007 44
------- ------- -------
Expenses:
Management Fees 1,384 330 280
Accounting Service Fees 35 23 21
Administration Fees 30 13 10
Transfer Agent Fees -- Institutional
Class 40 26 31
Transfer Agent Fees -- Advisory Class 8 -- --
Custodian Fees 14 14 21
Professional Fees 39 22 19
Directors' Fees & Expenses 7 7 7
Registration Fees -- Institutional Class 7 -- --
Registration Fees -- Advisory Class 35 -- --
Distribution Fees -- Advisory Class (Note
2) 2 -- --
Amortization of Deferred Organization
Costs -- 1 --
Other 29 18 19
------- ------- -------
Total Expenses 1,630 454 408
Less Expenses Borne by Investment Advisor 47 -- --
------- ------- -------
Net Expenses 1,583 454 408
------- ------- -------
Net Investment Income (Loss) (1,097) 1,553 (364)
------- ------- -------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net Realized Gain on Investments 32,828 5,420 10,386
Change in Unrealized Appreciation
(Depreciation) on Investments 63,049 4,528 (121)
------- ------- -------
Net Realized and Unrealized Gain on
Investments 95,877 9,948 10,265
------- ------- -------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $94,780 $11,501 $ 9,901
======= ======= =======
</TABLE>
42
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations Year Ended October 31, 1999
<TABLE>
<CAPTION>
TCW TCW TCW
Galileo Galileo TCW Galileo
Large Large Galileo Small TCW Galileo
Cap Cap Select Cap Value
Growth Value Equities Growth Opportunities
Fund Fund Fund Fund Fund
------- ------- -------- -------- -------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 97 $ 899 $ 665 $ 1 $ 247
Interest (Note 2) 21 91 536 341 70
------ ------ ------- -------- ------
Total 118 990 1,201 342 317
------ ------ ------- -------- ------
Expenses:
Management Fees 97 330 1,824 1,706 235
Accounting Service Fees 22 29 58 41 22
Administration Fees 14 23 61 38 12
Transfer Agent Fees --
Institutional Class 15 27 44 41 24
Transfer Agent Fees --
Advisory Class 8 8 8 8 --
Custodian Fees 8 18 8 28 7
Professional Fees 24 31 51 43 21
Directors' Fees and
Expenses 7 7 7 7 7
Registration Fees --
Institutional Class 23 29 17 9 --
Registration Fees --
Advisory Class 35 35 34 34 --
Distribution Fees --
Advisory Class (Note 2) -- -- 8 -- --
Amortization of Deferred
Organization Costs -- -- -- 1 1
Other 25 23 70 38 16
------ ------ ------- -------- ------
Total Expenses 278 560 2,190 1,994 345
Less Expenses Borne by
Investment Advisor 48 47 47 47 --
------ ------ ------- -------- ------
Net Expenses 230 513 2,143 1,947 345
------ ------ ------- -------- ------
Net Investment Income
(Loss) (112) 477 (942) (1,605) (28)
------ ------ ------- -------- ------
NET REALIZED AND
UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain (Loss)
on Investments 1,680 (3,003) 21,665 20,462 3,685
Change in Unrealized
Appreciation on
Investments 4,700 4,318 59,270 90,934 1,766
------ ------ ------- -------- ------
Net Realized and
Unrealized Gain on
Investments 6,380 1,315 80,935 111,396 5,451
------ ------ ------- -------- ------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,268 $1,792 $79,993 $109,791 $5,423
====== ====== ======= ======== ======
</TABLE>
43
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo
Aggressive TCW Galileo
Growth Equities Convertible
Fund Securities Fund
----------------- ----------------
Year Ended Year Ended
October 31, October 31,
----------------- ----------------
1999 1998 1999 1998
-------- ------- ------- -------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (1,097) $(1,027) $ 1,553 $ 1,057
Net Realized Gain on Investments 32,828 26,267 5,420 2,821
Change in Unrealized Appreciation
(Depreciation) on Investments 63,049 (5,470) 4,528 (2,652)
-------- ------- ------- -------
Increase in Net Assets Resulting from
Operations 94,780 19,770 11,501 1,226
-------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income -- -- (1,264) (1,059)
Distributions in Excess of Net Investment
Income -- -- -- (103)
Distributions from Net Realized Gains-
Institutional Class (12,024) -- (2,009) (2,114)
-------- ------- ------- -------
Total Distributions to Shareholders (12,024) -- (3,273) (3,276)
-------- ------- ------- -------
NET CAPITAL SHARE TRANSACTIONS (NOTE 8)
Institutional Class 848 (70,716) 14,214 (7,452)
Advisory Class 2,052 -- -- --
-------- ------- ------- -------
Increase (Decrease) in Net Assets
Resulting from Net Capital Share
Transactions 2,900 (70,716) 14,214 (7,452)
-------- ------- ------- -------
Increase (Decrease) in Net Assets 85,656 (50,946) 22,442 (9,502)
NET ASSETS
Beginning of Year 84,904 135,850 27,388 36,890
-------- ------- ------- -------
End of Year $170,560 $84,904 $49,830 $27,388
======== ======= ======= =======
</TABLE>
44
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo Earnings TCW Galileo Large Cap
Momentum Fund Growth Fund
---------------------- -------------------------
June 3, 1998
(Commencement
Year Ended of Operations)
October 31, Year Ended through
---------------------- October 31, October 31,
1999 1998 1999 1998
---------- ---------- ----------- -------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment (Loss) $ (364) $ (650) $ (112) $ (2)
Net Realized Gain on
Investments 10,386 4,544 1,680 451
Change in Unrealized
Appreciation
(Depreciation) on
Investments (121) (11,629) 4,700 345
---------- ---------- ------- ------
Increase (Decrease) in Net
Assets Resulting from
Operations 9,901 (7,735) 6,268 794
---------- ---------- ------- ------
DISTRIBUTIONS TO
SHAREHOLDERS
Distributions from Net
Realized Gains-
Institutional Class (1,596) (6,319) (439) --
---------- ---------- ------- ------
NET CAPITAL SHARE
TRANSACTIONS
(NOTE 8)
Institutional Class (18,766) (55,314) 9,542 7,006
Advisory Class -- -- 79 --
---------- ---------- ------- ------
Increase (Decrease) in Net
Assets Resulting from Net
Capital Share
Transactions (18,766) (55,314) 9,621 7,006
---------- ---------- ------- ------
Increase (Decrease) in Net
Assets (10,461) (69,368) 15,450 7,800
NET ASSETS
Beginning of Period 32,299 101,667 7,800 --
---------- ---------- ------- ------
End of Period $ 21,838 $ 32,299 $23,250 $7,800
========== ========== ======= ======
</TABLE>
45
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo Large Cap Select Equities
Value Fund Fund
---------------------------- ------------------
June 3, 1998
(Commencement of Year Ended
Year Ended Operations) October 31,
October 31, through ------------------
1999 October 31, 1998 1999 1998
----------- ---------------- -------- --------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ 477 $ 36 $ (942) $ (215)
Net Realized Gain (Loss) on
Investments (3,003) (286) 21,665 40,589
Change in Unrealized
Appreciation (Depreciation)
on Investments 4,318 159 59,270 (9,408)
------- ------ -------- --------
Increase (Decrease) in Net
Assets Resulting from
Operations 1,792 (91) 79,993 30,966
------- ------ -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net
Investment Income-
Institutional Class (60) -- -- --
Distributions from Net
Realized Gains-
Institutional Class -- -- (27,870) (37,055)
------- ------ -------- --------
Total Distributions to
Shareholders (60) -- (27,870) (37,055)
------- ------ -------- --------
NET CAPITAL SHARE
TRANSACTIONS
(NOTE 8)
Institutional Class 56,990 7,596 53,279 34,841
Advisory Class 65 -- 17,390 --
------- ------ -------- --------
Increase in Net Assets
Resulting from Net Capital
Share Transactions 57,055 7,596 70,669 34,841
------- ------ -------- --------
Increase in Net Assets 58,787 7,505 122,792 28,752
NET ASSETS
Beginning of Period 7,505 -- 184,865 156,113
------- ------ -------- --------
End of Period $66,292 $7,505 $307,657 $184,865
======= ====== ======== ========
</TABLE>
46
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo Small TCW Galileo Value
Cap Growth Fund Opportunities Fund
------------------ ----------------------------
November 3, 1997
Year Ended (Commencement of
October 31, Year Ended Operations)
------------------ October 31, through
1999 1998 1999 October 31, 1998
-------- -------- ----------- ----------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (1,605) $ (1,245) $ (28) $ 16
Net Realized Gain (Loss) on
Investments 20,462 1,477 3,685 (581)
Change in Unrealized Appreciation
(Depreciation) on Investments 90,934 (7,110) 1,766 (2,809)
-------- -------- ------- -------
Increase (Decrease) in Net Assets
Resulting from Operations 109,791 (6,878) 5,423 (3,374)
-------- -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment
Income -- -- -- (16)
Distributions in Excess of Net
Investment Income -- -- -- (25)
Distributions from Net Realized Gains-
Institutional Class (1,936) (9,228) -- --
-------- -------- ------- -------
Total Distributions to Shareholders (1,936) (9,228) -- (41)
-------- -------- ------- -------
NET CAPITAL SHARE TRANSACTIONS (NOTE 8)
Institutional Class 17,017 (12,600) (3,819) 32,049
Advisory Class 541 -- -- --
-------- -------- ------- -------
Increase (Decrease) in Net Assets
Resulting from Net Capital Share
Transactions 17,558 (12,600) (3,819) 32,049
-------- -------- ------- -------
Increase (Decrease) in Net Assets 125,413 (28,706) 1,604 28,634
NET ASSETS
Beginning of Period 116,050 144,756 28,634 --
-------- -------- ------- -------
End of Period $241,463 $116,050 $30,238 $28,634
======== ======== ======= =======
</TABLE>
47
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Notes to Financial Statements
Note 1 -- Organization
TCW Galileo Funds, Inc., a Maryland corporation (the "Company"), is an open-end
management investment company registered under the Investment Company Act of
1940, as amended, that currently offers a selection of 20 no-load mutual funds
known as the TCW Galileo Funds (the "Funds"). TCW Funds Management, Inc. (the
"Advisor") is the investment advisor to the Funds. On January 3, 2000, the Ad-
visor changed its name to TCW Investment Management Company, Inc. TCW London
International, Limited is a sub-advisor for the TCW Galileo Asia Pacific Equi-
ties Fund, the TCW Galileo Emerging Markets Equities Fund, the TCW Galileo Eu-
ropean Equities Fund, the TCW Galileo International Equities Fund and the TCW
Galileo Japanese Equities Fund. The advisors are registered under the Invest-
ment Advisors Act of 1940. On March 25, 1999, the TCW Galileo Enhanced 500 Fund
was liquidated. Each Fund has distinct investment objectives and policies. For
the period November 1, 1998 through February 28, 1999, TCW Investment Manage-
ment Company, Inc. was also the administrator of the Funds' day-to-day opera-
tions. As of March 1, 1999, Investors Bank & Trust Company became the adminis-
trator of the Funds.
The Funds' financial statements are separated into three reports: 1) U.S. Equi-
ties Funds, 2) U.S. Fixed Income Funds, and 3) International Funds. However,
all Funds are listed below along with their investment objectives, and are cur-
rently offered by the Company.
U.S. Equities
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Convertible Securities Fund
TCW Galileo Convertible Securities Seeks high total return from current
Fund income and capital appreciation
through investment principally in con-
vertible securities.
Non-Diversified U.S. Equity Funds
TCW Galileo Aggressive Growth Equities Seeks long-term capital appreciation,
Fund (formerly TCW Galileo Mid-Cap primarily by investing in publicly-
Growth Fund) traded equity securities of medium
capitalization companies.
TCW Galileo Earnings Momentum Fund Seeks capital appreciation through in-
vestment primarily in publicly-traded
equity securities of companies experi-
encing or expected to experience ac-
celerating earnings growth.
TCW Galileo Large Cap Growth Fund Seeks long-term appreciation by in-
vesting primarily in publicly traded
equity securities of large capitaliza-
tion U.S. companies with above average
earnings prospects.
TCW Galileo Large Cap Value Fund Seeks long-term capital appreciation
by investing primarily in publicly
traded equity securities of large cap-
italization companies.
TCW Galileo Select Equities Fund Emphasizes capital appreciation and
(formerly TCW Galileo Core Equities preservation with focus on long-term
Fund) results.
TCW Galileo Small Cap Growth Fund Seeks long-term capital appreciation,
primarily by investing in publicly-
traded equity securities of smaller
capitalization companies.
</TABLE>
48
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
U.S. Equities
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Non-Diversified U.S. Equity Funds
TCW Galileo Value Opportunities Fund Seeks capital appreciation by invest-
ing at least 65% of its total assets,
under normal circumstances, in pub-
licly traded equity securities issued
by small and medium companies with
market capitalization at the time of
purchase between $500 million and $5
billion.
U.S. Fixed Income
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Diversified Money Market Fund
TCW Galileo Money Market Fund Seeks current income, preservation of
capital and liquidity by investing in
short-term money market securities.
Diversified Fixed Income Funds
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.
TCW Galileo High Yield Bond Fund Seeks high current income through in-
vestment principally in high yield
fixed income securities.
TCW Galileo Mortgage-Backed Securities Seeks income by investing primarily in
Fund short-term mortgage-backed securities.
TCW Galileo Total Return Mortgage- Seeks income by investing primarily in
Backed Securities Fund (formerly TCW long-term mortgage-backed securities.
Galileo Long Term Mortgage-Backed
Securities Fund)
</TABLE>
International
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Non-Diversified International Equity
Funds
TCW Galileo Asia Pacific Equities Fund Seeks long-term capital appreciation,
primarily by investing in equity secu-
rities of companies in the Asia Pa-
cific region.
TCW Galileo Emerging Markets Equities Seeks long-term capital appreciation
Fund by investing in equity securities of
companies in emerging market countries
around the world.
TCW Galileo European Equities Fund Seeks long-term capital appreciation
by investing primarily in the securi-
ties of issuers located in Europe.
</TABLE>
49
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Notes to Financial Statements (Continued)
International
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Non-Diversified International Equity
Funds
TCW Galileo International Equities Seeks long-term capital appreciation
Fund by investing in a mix of underlying
TCW Galileo Funds.
TCW Galileo Japanese Equities Fund Seeks long-term capital appreciation
by investing primarily in Japanese eq-
uity securities.
TCW Galileo Latin America Equities Seeks long-term capital appreciation,
Fund primarily by investing in Latin Ameri-
can equity securities.
Non-Diversified Fixed Income Fund
TCW Galileo Emerging Markets Income Seeks high total return from capital
Fund appreciation and current income by in-
vesting at least 65% of its total as-
sets in debt securities issued or
guaranteed by companies, financial in-
stitutions, and government entities in
emerging market countries.
</TABLE>
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
Mortgage-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 give 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.
Note 2 -- Significant Accounting Policies
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
Principles of Accounting: The Funds use the accrual method of accounting for
financial reporting purposes.
Security Valuations: Equity fund securities listed or traded on the New York,
American or other stock exchanges are valued at the latest sale price on that
exchange (if there were no
50
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
sales that day, the security is valued at the latest bid price). All other
securities for which over-the-counter market quotations are readily available,
are valued at the latest bid price prior to the time of valuation.
Securities for which market quotations are not readily available, including
circumstances under which it is determined by the Advisor that sale or bid
prices are not reflective of a security's market value, are valued at their
fair value as determined in good faith under procedures established by and
under the general supervision of the Company's Board of Directors.
Short-term debt securities with remaining maturities of 60 days or less at the
time of purchase are valued at amortized cost. Other short-term debt securities
are valued on a marked-to-market basis until such time as they reach a
remaining maturity of 60 days, whereupon they will be valued at amortized value
using their value of the 61st day prior to maturity.
Security Transactions and Related Investment Income: Security transactions are
recorded as of the trade date. Dividend income is recorded on the ex-dividend
date. Interest income earned on convertible securities, short-term investments
and securities lending is recorded on the accrual basis. Realized and
unrealized gains and losses on investments are recorded on the basis of
specific identification.
Repurchase Agreements: The Funds may invest in repurchase agreements secured by
U.S. Government obligations and in other securities. Securities pledged as
collateral for repurchase agreements are held by the Funds' custodian bank
until maturity of the repurchase agreements. Provisions of the agreements
ensure that the market value of the collateral is sufficient in the event of
default; however, in the event of default or bankruptcy by the other party to
the agreements, realization and/or retention of the collateral may be subject
to legal proceedings.
Security Lending: On December 17, 1998, the Funds' Board of Directors approved
securities lending 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 any 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 (see Note 3).
Options: Premiums received from call options written are recorded as a
liability. The amount of the liability is subsequently adjusted to reflect the
current market value of the option written. If the option expires unexercised,
premiums received are realized as a gain at expiration date. If the position is
closed prior to expiration, a gain or loss is realized based on premiums
received, less the cost to close the option. When an option is exercised,
premiums received are added to the proceeds from the sale of the underlying
securities and a gain or loss is realized. Call options purchased are accounted
for in the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. There were
no option contracts entered into during the year ended October 31, 1999.
Deferred Organization Costs: Organizational costs of approximately $4,000,
$2,000 and $5,000 for the TCW Galileo Convertible Securities Fund, the TCW
Galileo Aggressive
51
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Notes to Financial Statements (Continued)
Note 2 -- Significant Accounting Policies (Continued)
Growth Equities Fund and the TCW Galileo Value Opportunities Fund,
respectively, have been deferred and are being amortized on a straight line
basis over a five-year period from the commencement of operations.
Organizational costs for all other U.S. Equities funds have been fully
amortized or were de minimus and therefore, were not deferred. Those costs were
expensed as incurred.
Upon formation of the Funds, the Company sold and issued to the Advisor 10,008
shares of common stock (one share each of the TCW Galileo Convertible
Securities Fund, the TCW Galileo Aggressive Growth Equities Fund, the TCW
Galileo Small Cap Growth Fund, and the TCW Galileo Value Opportunities Fund,
and 2,000 shares each of the other two funds, collectively the "Initial
Shares"). In the event the Advisor redeems any of its Initial Shares from one
or more of the Funds prior to the end of the five-year period, the proceeds of
the redemption payable in respect of such shares will be reduced by any
unamortized organization costs in the same ratio as the number of Initial
Shares being redeemed bears to the number of Initial Shares outstanding at the
time of the redemption.
Allocation of Operating Activity: Investment income, common expenses and
realized 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
dividing the net assets of the Fund by the number of issued and outstanding
shares on each business day as of 1:00 P.M. Pacific Standard Time.
Dividends and Distributions: The TCW Galileo Convertible Securities Fund
declares and pays, or reinvests, dividends from net investment income
quarterly. The other equity funds declare and pay, or reinvest, dividends from
net investment income annually. Distribution of any net long-term and net
short-term capital gains earned by a Fund will be distributed at least
annually.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign
currency transactions, market discount, losses deferred to wash sales, excise
tax regulations and employing equalization in determining amounts to be
distributed to Fund shareholders. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to paid-
in capital and may impact 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.
52
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
Note 3 -- Security Lending
The funds listed below loaned securities that were collateralized in cash which
was invested in short-term investments as of October 31, 1999.
<TABLE>
<CAPTION>
Security
Market Value of Lending
Loaned Securities Collateral Value Fees *
----------------- ---------------- --------
<S> <C> <C> <C>
TCW Galileo Aggressive Growth Eq-
uities Fund $38,748,267 $39,750,029 $169,195
TCW Galileo Convertible Securities
Fund 861,781 909,000 1,555
TCW Galileo Earnings Momentum Fund 2,363,181 2,460,600 12,825
TCW Galileo Large Cap Growth Fund 2,390,664 2,463,450 4,316
TCW Galileo Large Cap Value Fund 1,272,156 1,311,300 6,231
TCW Galileo Select Equities Fund 33,589,637 34,550,517 119,683
TCW Galileo Small Cap Growth Fund 37,672,965 38,757,400 74,471
TCW Galileo Value Opportunities
Fund 1,096,150 1,168,600 547
</TABLE>
* Net of broker fees.
Securities lending fees are included in interest income in the Statements of
Operations.
Note 4 -- Federal Income Taxes
It is the policy of each Fund to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its net taxable income, including any net realized gains on investments, to
its shareholders. Therefore, no federal income tax provision is required. At
October 31, 1999, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows (Amounts in Thousands):
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo
Aggressive Growth Convertible Earnings Momentum
Equities Fund Securities Fund Fund
----------------- --------------- -----------------
<S> <C> <C> <C>
Unrealized Appreciation $ 92,512 $ 6,467 $ 9,159
Unrealized (Depreciation) (2,456) (1,437) (620)
-------- ------- --------
Net Unrealized
Appreciation $ 90,056 $ 5,030 $ 8,539
======== ======= ========
Cost of Investments for
Federal Income Tax
Purposes $120,148 $46,851 $ 15,760
======== ======= ========
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo
Large Cap Growth Large Cap Value Select Equities
Fund Fund Fund
----------------- --------------- -----------------
<S> <C> <C> <C>
Unrealized Appreciation $ 6,945 $ 5,517 $109,547
Unrealized (Depreciation) (194) (2,999) (9,288)
-------- ------- --------
Net Unrealized
Appreciation $ 6,751 $ 2,518 $100,259
======== ======= ========
Cost of Investments for
Federal Income Tax
Purposes $ 18,573 $64,850 $241,896
======== ======= ========
</TABLE>
53
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Notes to Financial Statements (Continued)
Note 4 -- Federal Income Taxes (Continued)
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
Small Cap Growth Value Opportunities
Fund Fund
---------------- -------------------
<S> <C> <C>
Unrealized Appreciation $132,682 $ 2,944
Unrealized (Depreciation) (2,373) (3,321)
-------- -------
Net Unrealized Appreciation
(Depreciation) $130,309 $ (377)
======== =======
Cost of Investments for Federal Income
Tax Purposes $153,146 $32,632
======== =======
</TABLE>
At October 31, 1999, the TCW Galileo Large Cap Value Fund had net realized loss
carryforwards for federal income tax purposes of $11 and $1,081 (Amounts in
Thousands) expiring in 2006 and 2007, respectively.
Note 5 -- Fund Expenses
The Funds pay to the Advisor, as compensation for services rendered, facilities
furnished and expenses borne by it, the following annual management fees as a
percentage of daily net asset value:
<TABLE>
<S> <C>
TCW Galileo Aggressive Growth Equities Fund 1.00%
TCW Galileo Convertible Securities Fund 0.75%
TCW Galileo Earnings Momentum Fund 1.00%
TCW Galileo Large Cap Growth Fund 0.55%
TCW Galileo Large Cap Value Fund 0.55%
TCW Galileo Select Equities Fund 0.75%
TCW Galileo Small Cap Growth Fund 1.00%
TCW Galileo Value Opportunities Fund 0.80%
</TABLE>
For the period November 1, 1998 through February 28, 1999, when the Advisor was
the administrator of the Funds, each equity Fund reimbursed the Advisor for the
cost of providing accounting services to the Fund in an amount not exceeding
$35,000 for any fiscal year.
For the period November 1, 1998 through March 15, 1999, the ordinary operating
expenses of the following Funds were limited to the ratio as indicated below
(as a percentage of daily net assets):
<TABLE>
<S> <C>
TCW Galileo Convertible Securities Fund 1.05%
TCW Galileo Large Cap Growth Fund 0.91%
TCW Galileo Large Cap Value Fund 0.55%
TCW Galileo Value Opportunities Fund 1.36%
</TABLE>
54
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
Effective March 15, 1999, the ordinary operating expenses for all Funds (each
share class) are limited to the average total expense ratio as reported by
Lipper Analytical Services, Inc. for each Fund's respective investment
objective, which is subject to change on a monthly basis. At October 31, 1999,
the average expense ratios reported by Lipper Analytical Services, Inc. as they
relate to each Fund were:
<TABLE>
<S> <C>
TCW Galileo Aggressive Growth Equities Fund 1.53%
TCW Galileo Convertible Securities Fund 1.53%
TCW Galileo Earnings Momentum Fund 1.63%
TCW Galileo Large Cap Growth Fund 1.39%
TCW Galileo Large Cap Value Fund 1.39%
TCW Galileo Select Equities Fund 1.39%
TCW Galileo Small Cap Growth Fund 1.63%
TCW Galileo Value Opportunities Fund 1.53%
</TABLE>
Certain officers and/or directors of the Company are officers and/or directors
of the Advisor.
Note 6 -- 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.
Note 7 -- Purchases and Sales of Securities
Investment transactions (excluding short-term investments) for the year ended
October 31, 1999, were as follows (Amounts in Thousands):
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo
Aggressive Growth Convertible Earnings Momentum
Equities Fund Securities Fund Fund
----------------- ------------------- -----------------
<S> <C> <C> <C>
Purchases at Cost $ 85,096 $ 75,064 $ 32,732
======== ======== ========
Sales Proceeds $ 95,545 $ 62,816 $ 51,933
======== ======== ========
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo
Large Cap Growth Large Cap Value Select
Fund Fund Equities Fund
----------------- ------------------- -----------------
<S> <C> <C> <C>
Purchases at Cost $ 22,409 $136,581 $139,600
======== ======== ========
Sales Proceeds $ 13,603 $ 78,910 $112,094
======== ======== ========
<CAPTION>
TCW Galileo TCW Galileo
Small Cap Growth Value Opportunities
Fund Fund
----------------- -------------------
<S> <C> <C>
Purchases at Cost $137,237 $ 39,229
======== ========
Sales Proceeds $123,067 $ 43,170
======== ========
</TABLE>
There were no purchases or sales of U.S. Government Securities for the year
ended October 31, 1999.
55
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Notes to Financial Statements (Continued)
Note 8 -- 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 Aggressive Year Ended Year Ended
Growth Equities Fund October 31, 1999 October 31, 1998
Institutional Class -------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 3,217,826 $ 61,670 1,103,927 $ 12,278
Shares Issued Upon
Reinvestment of
Dividends 897,111 11,286 -- --
Shares Redeemed (4,048,436) (72,108) (8,075,267) (82,994)
---------- -------- ---------- --------
Net Increase (Decrease) 66,501 $ 848 (6,971,340) $(70,716)
========== ======== ========== ========
<CAPTION>
TCW Galileo Aggressive Period Ended
Growth Equities Fund October 31, 1999 (/1/)
Advisory Class --------------------------
Amount
Shares (in thousands)
---------- --------------
<S> <C> <C>
Shares Sold 177,921 $ 3,453
Shares Redeemed (71,654) (1,401)
---------- --------
Net Increase 106,267 $ 2,052
========== ========
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999.
<CAPTION>
Year Ended Year Ended
TCW Galileo Convertible October 31, 1999 October 31, 1998
Securities Fund -------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 2,763,917 $ 31,234 703,651 $ 7,530
Shares Issued Upon
Reinvestment of
Dividends 266,413 2,893 259,441 2,773
Shares Redeemed (1,692,831) (19,913) (1,596,336) (17,755)
---------- -------- ---------- --------
Net Increase (Decrease) 1,337,499 $ 14,214 (633,244) $ (7,452)
========== ======== ========== ========
<CAPTION>
Year Ended Year Ended
TCW Galileo Earnings October 31, 1999 October 31, 1998
Momentum Fund -------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 110,213 $ 1,249 106,293 $ 1,100
Shares Issued Upon
Reinvestment of
Dividends 132,982 1,471 517,955 6,240
Shares Redeemed (1,856,416) (21,486) (4,894,267) (62,654)
---------- -------- ---------- --------
Net (Decrease) (1,613,221) $(18,766) (4,270,019) $(55,314)
========== ======== ========== ========
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
TCW Galileo Large Cap June 3, 1998
Growth Fund (Commencement of
Institutional Class Year Ended Operations) through
October 31, 1999 October 31, 1998
-------------------------- ------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- -------- --------------
<S> <C> <C> <C> <C>
Shares Issued Upon
Exchange of Limited
Partnership Interests -- $ -- 721,349 $7,213
Shares Sold 961,287 13,683 17,315 201
Shares Issued Upon
Reinvestment of Dividends 36,641 439 -- --
Shares Redeemed (298,866) (4,580) (40,782) (408)
---------- ------- -------- ------
Net Increase 699,062 $ 9,542 697,882 $7,006
========== ======= ======== ======
<CAPTION>
TCW Galileo Large Cap Period Ended
Growth Fund October 31, 1999 (/1/)
Advisory Class --------------------------
Amount
Shares (in thousands)
---------- --------------
<S> <C> <C>
Shares Sold 5,290 $ 81
Shares Redeemed (129) (2)
---------- -------
Net Increase 5,161 $ 79
========== =======
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999.
<CAPTION>
TCW Galileo Large Cap June 3, 1998
Value Fund (Commencement of
Institutional Class Year Ended Operations) through
October 31, 1999 October 31, 1998
-------------------------- ------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- -------- --------------
<S> <C> <C> <C> <C>
Shares Issued Upon
Exchange of Limited
Partnership Interests -- $ -- 815,447 $8,154
Shares Sold 8,030,981 92,437 224,593 2,280
Shares Issued Upon
Reinvestment of Dividends 2,910 30 -- --
Shares Redeemed (3,169,587) (35,477) (298,415) (2,838)
---------- ------- -------- ------
Net Increase 4,864,304 $56,990 741,625 $7,596
========== ======= ======== ======
<CAPTION>
TCW Galileo Large Cap Period Ended
Value Fund Advisory Class October 31, 1999 (/1/)
--------------------------
Amount
Shares (in thousands)
---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 13,353 $ 167
Shares Redeemed (8,381) (102)
---------- -------
Net Increase 4,972 $ 65
========== =======
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999.
57
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Notes to Financial Statements (Continued)
Note 8 -- Capital Share Transactions (Continued)
<TABLE>
<CAPTION>
TCW Galileo Select
Equities Fund Year Ended Year Ended
Institutional October 31, 1999 October 31, 1998
Class -------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 6,400,424 $120,104 5,447,733 $ 85,536
Shares Issued Upon
Reinvestment of
Dividends 1,613,101 24,632 2,586,870 35,957
Shares Redeemed (5,012,731) (91,457) (5,179,280) (86,652)
---------- -------- ---------- --------
Net Increase 3,000,794 $ 53,279 2,855,323 $ 34,841
========== ======== ========== ========
<CAPTION>
TCW Galileo Select Period Ended
Equities Fund October 31, 1999 (/1/)
Advisory Class --------------------------
Amount
Shares (in thousands)
---------- --------------
<S> <C> <C>
Shares Sold 1,018,247 $ 19,178
Shares Redeemed (93,473) (1,788)
---------- --------
Net Increase 924,774 $ 17,390
========== ========
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999.
<TABLE>
<CAPTION>
TCW Galileo Small Cap Year Ended Year Ended
Growth Fund October 31, 1999 October 31, 1998
Institutional Class -------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 2,977,400 $ 68,370 2,331,443 $ 43,092
Shares Issued Upon
Reinvestment of
Dividents 100,650 1,878 522,318 8,940
Shares Redeemed (2,307,584) (53,231) (3,533,964) (64,632)
---------- -------- ---------- --------
Net Increase (Decrease) 770,466 $ 17,017 (680,203) $(12,600)
========== ======== ========== ========
<CAPTION>
TCW Galileo Small Cap Period Ended
Growth Fund October 31, 1999 (/1/)
Advisory Class --------------------------
Amount
Shares (in thousands)
---------- --------------
<S> <C> <C>
Shares Sold 21,894 $ 543
Shares Redeemed (74) (2)
---------- --------
Net Increase 21,820 $ 541
========== ========
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999.
<TABLE>
<CAPTION>
November 3, 1997
(Commencement of
Year Ended Operations) through
TCW Galileo Value October 31, 1999 October 31, 1998
Opportunities Fund ------------------------ --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Issued Upon
Exchange of Limited
Partnership Interests -- $ -- 2,356,794 $23,568
Shares Sold 334,352 3,783 2,590,325 26,409
Shares Issued Upon
Reinvestment of Dividends -- -- 3,727 37
Shares Redeemed (742,180) (7,602) (1,851,395) (17,965)
-------- ------- ---------- -------
Net Increase (Decrease) (407,828) $(3,819) 3,099,451 $32,049
======== ======= ========== =======
</TABLE>
58
<PAGE>
- --------------------------------------------------------------------------------
October 31, 1999
Note 9 -- Restricted Securities
The following restricted securities held by the Funds as of October 31, 1999,
were valued both at the date of acquisition and October 31, 1999, in accordance
with the security valuation policy of the Funds described in Note 2. The re-
stricted securities include securities purchased in private placement transac-
tions without registration under the Securities Act of 1933, as well as Rule
144A securities. Such securities generally may be sold only in a privately ne-
gotiated transaction with a limited number of purchasers or in a public offer-
ing registered under the Securities Act of 1933. Each Fund will bear any costs
incurred in connection with the disposition of such securities.
TCW Galileo Convertible Securities Fund:
<TABLE>
<CAPTION>
Principal
Amount or
Number of Date of
Shares Investment Acquisition Cost
---------- ------------------------------------------ ----------- ----------
<C> <S> <C> <C>
$ 800,000 Affymetrix, Inc., (144A), 5%, due 10/01/06 09/22/99 $ 787,329
American Tower Corp., (144A), 2.25%, due
$2,570,000 10/15/09 10/04/99 1,816,312
Centocor, Inc., (144A), 4.75%, due
$ 60,000 02/15/05 02/13/98 60,000
Citrix System, Inc., (144A), 0%, due
$1,500,000 03/22/19 03/16/99 540,579
Conexant Systems, Inc., (144A), 4.25%, due
$ 335,000 05/01/06 05/07/99 481,670
Costco Companies, Inc., (144A), 0%, due
$ 200,000 08/19/17 08/14/97 107,833
Elan Corp. PLC, (Ireland), (144A), 0%, due
$2,505,000 12/14/18 12/08/98 1,461,217
$ 465,000 Exchangeable Certificates Corp., (144A),
0.25%, due 07/17/06 07/16/99 466,422
$ 885,000 Interpublic Group of Companies, Inc.,
(144A), 1.87%, due 06/01/06 06/01/99 762,608
LSI Logic Corp., (144A), 4.25%, due
$ 245,000 03/15/04 03/19/99 261,000
Network Associates, Inc., (144A), 0%, due
$ 315,000 02/13/18 02/13/98 133,499
Safeguard Scientifics, Inc., (144A), 5%,
$ 510,000 due 06/15/06 06/09/99 520,300
Sanmina Corp., Inc., (144A), 4.25%, due
$ 695,000 05/01/04 07/15/99 712,113
$1,200,000 Sepracor, Inc., (144A), 7%, due 12/15/05 12/15/98 1,288,010
Siebel Systems Inc., (144A), 5.5%, due
$ 685,000 09/15/06 09/21/99 705,375
$1,950,000 Solectron Corp., (144A), 0%, due 01/27/19 01/27/99 936,248
Verio, Inc., (144A), $6.25 Convertible
12,500 Preferred 07/15/99 565,625
</TABLE>
The total value of restricted securities is $12,785,725, which represents 25.7%
of net assets of the Fund at October 31, 1999.
59
<PAGE>
TCW Galileo Aggressive Growth Equities Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
June 3, 1996
(Commencement
of
Operations)
Year Ended October 31, through
----------------------------- October 31,
1999 1998 1997 1996
-------- ------- -------- -------------
<S> <C> <C> <C> <C>
Net Asset Value per
Share,
Beginning of Period $ 11.35 $ 9.40 $ 9.19 $ 10.00
-------- ------- -------- -------
Income (Loss) from
Investment Operations:
Net Investment (Loss) (0.14) (0.11) (0.08) (0.03)
Net Realized and
Unrealized Gain (Loss)
on Investments 12.68 2.06 0.29 (0.78)
-------- ------- -------- -------
Total from Investment
Operations 12.54 1.95 0.21 (0.81)
-------- ------- -------- -------
Less Distributions:
Distributions from Net
Realized Gains (1.60) -- -- --
-------- ------- -------- -------
Net Asset Value per
Share, End of Period $ 22.29 $ 11.35 $ 9.40 $ 9.19
======== ======= ======== =======
Total Return 121.34% 20.74% 2.28% (8.10)% (/1/)
Ratios/Supplemental
Data:
Net Assets, End of
Period (in thousands) $168,193 $84,904 $135,850 $92,430
Ratio of Expenses to
Average Net Assets 1.14% 1.17% 1.12% 1.20% (/2/)(/3/)
Ratio of Net Investment
(Loss) to Average Net
Assets (0.79)% (1.03)% (0.86)% (0.80)% (/2/)
Portfolio Turnover Rate 64.12% 55.36% 50.45% 19.19% (/1/)
</TABLE>
(1) For the period June 3, 1996 (Commencement of Operations) through October
31, 1996 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.20% of net assets
through December 31, 1996. Had such action not been taken, total annualized
operating expenses, as a percentage of average net assets, would have been
1.27% for the period June 3, 1996 (Commencement of Operations) through Oc-
tober 31, 1996.
60
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
October 31, 1999
----------------
<S> <C>
Net Asset Value per Share, Beginning of Period $16.07
------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.12)
Net Realized and Unrealized Gain on Investments 6.32
------
Total from Investment Operations 6.20
------
Net Asset Value per Share, End of Period $22.27
======
Total Return 38.58% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $2,367
Ratio of Net Expenses to Average Net Assets 1.47% (/2/)(/3/)
Ratios of Net Investment (Loss) to Average Net Assets (0.92)% (/2/)
Portfolio Turnover Rate 64.12%
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual operating expenses of the Fund as disclosed in Note 5 in the Notes
to the Financial Statements. Had such action not been taken, total
annualized operating expenses, as a percentage of average net assets, would
have been 6.83% for the period from March 1, 1999 (Commencement of offering
of Advisory Class shares) to October 31, 1999.
61
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Convertible Securities Fund
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
January 2,
1997
(Commencement
of
Year Ended Operations)
October 31, through
---------------- October 31,
1999 1998 1997
------- ------- -------------
<S> <C> <C> <C>
Net Asset Value per Share,
Beginning of Period $ 10.53 $ 11.41 $ 10.00
------- ------- -------
Income (Loss) from Investment
Operations:
Net Investment Income 0.41 0.37 0.31
Net Realized and Unrealized
Gain (Loss)
on Investments 2.56 (0.08) 1.43
------- ------- -------
Total from Investment
Operations 2.97 0.29 1.74
------- ------- -------
Less Distributions:
Distributions from Net
Investment Income (0.34) (0.37) (0.33)
Distributions in Excess of Net
Investment Income -- (0.05) --
Distributions from Net
Realized Gains (0.50) (0.75) --
------- ------- -------
Total Distributions (0.84) (1.17) (0.33)
------- ------- -------
Net Asset Value per Share, End
of Period $ 12.66 $ 10.53 $ 11.41
======= ======= =======
Total Return 29.68% 2.69% 17.66% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands) $49,830 $27,388 $36,890
Ratio of Expenses to Average
Net Assets 1.03% 1.05% (/3/) 0.95% (/2/)(/3/)
Ratio of Net Investment Income
to Average Net Assets 3.53% 3.34% 3.54% (/2/)
Portfolio Turnover Rate 150.91% 139.65% 141.43% (/1/)
</TABLE>
(1) For the period January 2, 1997 (Commencement of Operations) through October
31, 1997 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.95% of net assets
through October 31, 1997 and 1.05% of net assets through December 31, 1998.
Had such action not been taken, total annualized operating expenses, as a
percentage of average net assets, would have been 1.16% for the year ended
October 31, 1998 and 1.51% for the period January 2, 1997 (Commencement of
Operations) through October 31, 1997.
62
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Earnings Momentum Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
November 1, 1994
(Commencement of
Operations)
Year Ended October 31, through
-------------------------------------- October 31, 1995
<S> <C> <C> <C> <C> ----------------
1999 1998 1997 1996
------- ------- -------- -------
Net Asset Value per
Share, Beginning of
Period $ 10.56 $ 13.87 $ 13.01 $ 11.47 $ 10.00
------- ------- -------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment (Loss) (0.16) (0.14) (0.12) (0.11) (0.03)
Net Realized and
Unrealized Gain (Loss)
on Investments 5.26 (2.20) 1.98 1.72 1.51
------- ------- -------- ------- -------
Total from Investment
Operations 5.10 (2.34) 1.86 1.61 1.48
------- ------- -------- ------- -------
Less Distributions:
Distributions in Excess
of Net Investment
Income -- -- -- -- (0.01)
Distributions from Net
Realized Gains (0.54) (0.97) (1.00) (0.07) --
------- ------- -------- ------- -------
Total Distributions (0.54) (0.97) (1.00) (0.07) (0.01)
------- ------- -------- ------- -------
Net Asset Value per
Share, End of Period $ 15.12 $ 10.56 $ 13.87 $ 13.01 $ 11.47
======= ======= ======== ======= =======
Total Return 50.23% (17.76)% 15.53% 13.99% 14.76%
Ratios/Supplemental
Data:
Net Assets, End of
Period (in thousands) $21,838 $32,299 $101,667 $77,994 $63,411
Ratio of Expenses to
Average Net Assets 1.46% 1.27% 1.17% 1.13% (/1/) 1.14% (/1/)
Ratios of Net Investment
(Loss) to Average Net
Assets (1.30)% (1.10)% (0.96)% (0.82)% (0.28)%
Portfolio Turnover Rate 118.87% 51.25% 93.06% 99.03% 85.91%
</TABLE>
(1) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.14% of net assets
through December 31, 1995. Had such action not been taken, total annualized
operating expenses, as a percentage of average net assets, would have been
1.14% for the year ended October 31, 1996 and November 1, 1994 (Commence-
ment of Operations) through October 31, 1995.
63
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Growth Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
June 3, 1998
(Commencement
of
Operations)
Year Ended through
October 31, October 31,
1999 1998
----------- -------------
<S> <C> <C>
Net Asset Value per Share, Beginning of
Period $ 11.18 $10.00
------- ------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.09) --
Net Realized and Unrealized Gain on
Investments 6.00 1.18
------- ------
Total from Investment Operations 5.91 1.18
------- ------
Less Distributions:
Distributions from Net Realized Gains (0.51) --
------- ------
Net Asset Value per Share, End of Period $ 16.58 $11.18
======= ======
Total Return 54.59% 11.80% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $23,164 $7,800
Ratio of Expenses to Average Net Assets 1.30% 0.91% (/2/)(/3/)
Ratio of Net Investment (Loss) to Average
Net Assets (0.64)% (0.07)% (/2/)
Portfolio Turnover Rate 78.02% 50.76% (/1/)
</TABLE>
(1) For the period June 3, 1998 (Commencement of Operations) through October
31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Advisor 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 as disclosed in Note 5 of
the Notes to the Financial Statements. Had such actions not been taken,
total annualized operating expenses, as a percentage of average net assets,
would have been 2.53% for the period June 3, 1998 (Commencement of
Operations) through October 31, 1998.
64
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
October 31, 1999
----------------
<S> <C>
Net Asset Value per Share, Beginning of Period $13.70
-------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.08)
Net Realized and Unrealized Gain on Investments 2.98
-------
Total from Investment Operations 2.90
-------
Net Asset Value per Share, End of Period $16.60
=======
Total Return 21.17% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 86
Ratio of Net Expenses to Average Net Assets 1.46% (/2/)(/3/)
Ratio of Net Investment (Loss) to Average Net Assets (0.74)% (/2/)
Portfolio Turnover Rate 78.02%
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor 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 as disclosed in Note 5 of
the Notes to the Financial Statements. Had such action not been taken, to-
tal annualized operating expenses, as a percentage of average net assets,
would have been 392.27% for the period ended October 31, 1999.
65
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Large Cap Value Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
June 3, 1998
(Commencement
of
Operations)
Year Ended through
October 31, October 31,
1999 1998
----------- -------------
<S> <C> <C>
Net Asset Value per Share, Beginning of
Period $ 10.12 $10.00
------- ------
Income from Investment Operations:
Net Investment Income 0.09 0.04
Net Realized and Unrealized Gain on
Investments 1.66 0.08
------- ------
Total from Investment Operations 1.75 0.12
------- ------
Less Distributions:
Distributions from Net Investment Income (0.05) --
------- ------
Net Asset Value per Share, End of Period $ 11.82 $10.12
------- ------
Total Return 17.30% 1.20%(/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $66,234 $7,505
Ratio of Expenses to Average Net Assets 0.85% 0.55% (/2/)(/3/)
Ratio of Net Investment Income to Average
Net Assets 0.79% 1.04% (/2/)
Portfolio Turnover Rate 142.36% 83.84% (/1/)
</TABLE>
(1) For the period June 3, 1998 (Commencement of Operations) through October
31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Advisor 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 as disclosed in Note 5 of
the Notes to the Financial Statements. Had such actions not been taken, to-
tal annualized operating expenses, as a percentage of average net assets,
would have 2.48% for the period June 3, 1998 (Commencement of Operations)
through October 31, 1998.
66
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
October 31, 1999
----------------
<S> <C>
Net Asset Value per Share, Beginning of Period $11.07
------
Income from Investment Operations:
Net Investment Income 0.06
Net Realized and Unrealized Gain on Investments 0.66
------
Total from Investment Operations 0.72
------
Net Asset Value per Share, End of Period $11.79
======
Total Return 6.51% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 58
Ratio of Net Expenses to Average Net Assets 1.46% (/2/)(/3/)
Ratio of Net Investment Income to Average Net Assets 0.71% (/2/)
Portfolio Turnover Rate 142.36%
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's oper-
ating results.
(2) Annualized.
(3) The Investment Advisor 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 as disclosed in Note 5 of
the Notes to the Financial Statements. Had such action not been taken, to-
tal annualized operating expenses, as a percentage of average net assets,
would have been 163.61% for the period ended October 31, 1999.
67
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Select Equities Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share,
Beginning of Year $ 16.89 $ 19.29 $ 15.93 $ 13.69 $ 11.57
-------- -------- -------- -------- --------
Income (Loss) from
Investment Operations:
Net Investment Income (Loss) (0.07) (0.02) 0.01 0.11 0.06
Net Realized and Unrealized
Gain on Investments 6.32 3.38 3.57 2.18 2.11
-------- -------- -------- -------- --------
Total from Investment
Operations 6.25 3.36 3.58 2.29 2.17
-------- -------- -------- -------- --------
Less Distributions:
Distributions from Net
Investment Income -- -- (0.02) (0.05) (0.05)
Distributions from Net
Realized Gains (2.45) (5.76) (0.20) -- --
-------- -------- -------- -------- --------
Total Distributions (2.45) (5.76) (0.22) (0.05) (0.05)
-------- -------- -------- -------- --------
Net Asset Value per Share,
End of Year $ 20.69 $ 16.89 $ 19.29 $ 15.93 $ 13.69
======== ======== ======== ======== ========
Total Return 42.12% 23.83% 22.68% 16.79% 18.85%
Ratios/Supplemental Data:
Net Assets, End of Year
(in thousands) $288,546 $184,865 $156,113 $231,302 $197,721
Ratio of Expenses to Average
Net Assets 0.88% 0.86% 0.83% 0.82% 0.85%
Ratio of Net Investment
Income (Loss)
to Average Net Assets (0.39)% (0.14)% 0.08% 0.18% 0.48%
Portfolio Turnover Rate 48.29% 103.51% 39.22% 39.58% 53.77%
</TABLE>
68
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
October 31, 1999
----------------
<S> <C>
Net Asset Value per Share, Beginning of Period $ 17.62
-------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.07)
Net Realized and Unrealized Gain on Investments 3.12
-------
Total from Investment Operations 3.05
-------
Net Asset Value per Share, End of Period $ 20.67
=======
Total Return 17.31% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $19,111
Ratio of Net Expenses to Average Net Assets 1.46% (/2/)(/3/)
Ratio of Net Investment (Loss) to Average Net Assets (0.53)% (/2/)
Portfolio Turnover Rate 48.29%
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's oper-
ating results.
(2) Annualized.
(3) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
ordinary operating expenses of the Fund as disclosed in Note 5 of the Notes
to the Financial Statements. Had such action not been taken, total
annualized operating expenses, as a percentage of average net assets, would
have been 2.66% for the period from March 1, 1999 (Commencement of offering
of Advisory class shares) to October 31, 1999.
69
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Small Cap Growth Fund
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Year Ended October 31,
---------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value per
Share,
Beginning of Year $ 16.48 $ 18.74 $ 17.17 $ 13.53 $ 9.39
-------- -------- -------- -------- -------
Income (Loss) from
Investment Operations:
Net Investment (Loss) (0.22) (0.18) (0.15) (0.13) (0.07)
Net Realized and
Unrealized Gain (Loss)
on Investments 14.82 (0.90) 1.91 4.08 4.72
-------- -------- -------- -------- -------
Total from Investment
Operations 14.60 (1.08) 1.76 3.95 4.65
-------- -------- -------- -------- -------
Less Distributions:
Distributions from Net
Investment Income -- -- -- (0.01) --
Distributions from Net
Realized Gains (0.27) (1.18) (0.19) (0.30) (0.51)
-------- -------- -------- -------- -------
Total Distributions (0.27) (1.18) (0.19) (0.31) (0.51)
-------- -------- -------- -------- -------
Net
Asset Value per Share,
End of Year $ 30.81 $ 16.48 $ 18.74 $ 17.17 $ 13.53
======== ======== ======== ======== =======
Total Return 89.63% (5.98)% 10.38% 29.73% 49.89%
Ratios/Supplemental
Data:
Net Assets, End of Year
(in thousands) $240,792 $116,050 $144,756 $132,444 $66,056
Ratio of Expenses to
Average Net Assets 1.14% 1.13% 1.14% 1.14% 1.21% (/1/)
Ratio of Net Investment
(Loss) to
Average Net Assets (0.94)% (0.95)% (0.89)% (0.76)% (0.61)%
Portfolio Turnover Rate 74.52% 63.67% 60.52% 45.43% 89.73%
</TABLE>
(1) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.09% of net assets
through December 31, 1994. Had such action not been taken, total annualized
operating expenses, as a percentage of average net assets, would have been
1.24% for the year ended October 31, 1995.
70
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
October 31,
1999
-------------
<S> <C>
Net Asset Value per Share, Beginning of Period $20.62
------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.20)
Net Realized and Unrealized Gain on Investments 10.32
------
Total from Investment Operations 10.12
------
Net Asset Value per Share, End of Period $30.74
======
Total Return 49.08% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 671
Ratio of Net Expenses to Average Net Assets 1.53% (/2/)(/3/)
Ratios of Net Investment (Loss) to Average Net Assets (1.15)% (/2/)
Portfolio Turnover Rate 74.52%
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor 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 as disclosed in Note 5 of
the Notes to the Financial Statements. Had such action not been taken, to-
tal annualized operating expenses, as a percentage of net assets, would
have been 35.14% for the period ended October 31, 1999.
71
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Value Opportunities Fund
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
November 3,
1997
(Commencement
of
Operations)
Year Ended through
October 31, October 31,
1999 1998
----------- -------------
<S> <C> <C>
Net Asset Value per Share, Beginning of Period $ 9.24 $ 10.00
------- -------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) (0.01) --
Net Realized and Unrealized Gain (Loss) on
Investments 2.00 (0.75)
------- -------
Total from Investment Operations 1.99 (0.75)
------- -------
Less Distributions:
Distributions in Excess of Net Investment
Income -- (0.01)
------- -------
Net Asset Value per Share, End of Period $ 11.23 $ 9.24
======= =======
Total Return 21.54% (7.49)% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $30,238 $28,634
Ratio of Expenses to Average Net Assets 1.18% 1.16% (/2/)
Ratio of Net Investment Income (Loss) to
Average Net Assets (0.10)% 0.05% (/2/)
Portfolio Turnover Rate 140.07% 97.30% (/1/)
</TABLE>
(1) For the period November 3, 1997 (Commencement of Operations) through Octo-
ber 31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
72
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Independent Auditors' Report
To the Board of Directors and Shareholders of TCW Galileo Funds, Inc.:
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments, of TCW Galileo Aggressive Growth Equities
Fund, TCW Galileo Convertible Securities Fund, TCW Galileo Earnings Momentum
Fund, TCW Galileo Large Cap Growth Fund, TCW Galileo Large Cap Value Fund, TCW
Galileo Select Equities Fund, TCW Galileo Small Cap Growth Fund, and TCW Gali-
leo Value Opportunities Fund (the "Galileo U.S. Equities Funds") (eight of
twenty funds comprising TCW Galileo Funds, Inc.) as of October 31, 1999 and the
related statements of operations for the periods then ended, the statements of
changes in net assets for each of the periods ended October 31, 1999 and 1998,
and the financial highlights for each of the respective periods in the periods
ended October 31, 1999. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of Oc-
tober 31, 1999 by correspondence with the custodians and brokers. Where replies
were not received from brokers, we performed other auditing procedures. An au-
dit also includes assessing the accounting principles used and significant es-
timates made by management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Galileo U.S. Equities Funds as of October 31, 1999 and the
results of their operations, the changes in their net assets and the financial
highlights for the respective stated periods in conformity with generally ac-
cepted accounting principles.
/s/ Deloitte & Touche LLP
December 21, 1999
Los Angeles, California
73
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
U.S. Equities
Tax Information Notice (Unaudited)
On account of the year ended October 31, 1999, the following funds paid capital
gain distributions within the meaning of Section 852(b)(3)(c) of the Internal
Revenue Code. The Funds also designate as a capital gain distribution a portion
of earnings and profits paid to shareholders in redemption of their shares.
<TABLE>
<CAPTION>
Amounts per
Fund Share
---- -----------
<S> <C>
TCW Galileo Aggressive Growth Equities Fund $4.03
TCW Galileo Convertible Securities Fund 1.27
TCW Galileo Earnings Momentum Fund 7.00
TCW Galileo Large Cap Growth Fund 1.14
TCW Galileo Select Equities Fund 1.36
TCW Galileo Small Cap Growth Fund 2.48
TCW Galileo Value Opportunities Funds 1.30
</TABLE>
This information is given to meet certain requirements of the Internal Revenue
Code and should not be used by shareholders for preparing their income tax re-
turns. For income tax preparation purposes, please refer to the calendar year
end information you will receive from the Funds' transfer agent in January
2000.
74
