TCW GALILEO FUNDS INC, 497, 1999-03-05

TCW GALILEO FUNDS INC
497, 1999-03-05

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<PAGE>

TCW Galileo
Funds, Inc.

This prospectus tells you about the Institutional Class shares of five of the
separate investment funds offered by TCW Galileo Funds, Inc., each of which has
different investment objectives and policies. Please read this document
carefully, and keep it for future reference. Sometimes we will refer to the
funds in this prospectus as the Galileo Fixed Income Funds.

TCW Galileo Money Market Fund

TCW Galileo Core Fixed Income Fund

TCW Galileo Mortgage-Backed Securities Fund

TCW Galileo Total Return Mortgage-Backed Securities Fund

TCW Galileo High Yield Bond Fund

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

March 1, 1999

[LOGO OF TCW GALILEO FUNDS]
THE POWER OF INDEPENDENT THOUGHT

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
General Fund Information
Investment Objectives and Principal Strategies............................. 2

Principal Risks............................................................ 3

Performance Summary........................................................ 6

Fund Expenses and Expense Example.......................................... 9

TCW Galileo Money Market Fund
Investment Objectives/Approach............................................. 10
Main Risks................................................................. 11

TCW Galileo Core Fixed Income
Fund
Investment Objectives/Approach............................................. 12
Main Risks................................................................. 13

TCW Galileo Mortgage-Backed
Securities Fund
Investment Objectives/Approach............................................. 15
Main Risks................................................................. 16

TCW Galileo Total Return
Mortgage-Backed Securities Fund
Investment Objectives/Approach............................................. 18
Main Risks................................................................. 19

TCW Galileo High Yield Bond
Fund
Investment Objectives/Approach............................................. 21
Main Risks................................................................. 22

Risk Considerations........................................................ 24
Management of the Funds.................................................... 34
Multiple Class Structure................................................... 35

Your Investment
Account Policies and Services.............................................. 36
To Open an Account/To Add to an Account.................................... 40
To Sell or Exchange Shares................................................. 41
Distributions and Taxes.................................................... 42
Financial Highlights....................................................... 43

For More Information....................................................... 48
</TABLE>

1
<PAGE>

General Fund Information

Investment Objectives and Principal Strategies

All of the Galileo Fixed Income Funds are affected by changes in the economy,
or in securities and other markets. Additionally, changes in interest rates
will affect not only the current return on the Galileo Fixed Income Funds, but
the value of the capital investment will most likely fluctuate up or down.
There is also the possibility that investment decisions the Adviser makes will
not accomplish what they were designed to achieve or that companies in which
the Funds invest will have disappointing performance or not pay their debts.

<TABLE>
<CAPTION>
TCW Galileo Funds, Inc. Investment Objectives Principal Investment Strategies
- -------------------------------------------------------------------------------
<S> <C> <C>
TCW Galileo Money Current income, Invests in high
Market Fund preservation of credit quality,
capital and liquidity short-term money
market securities.
- -------------------------------------------------------------------------------
TCW Galileo Core Maximize current Invests in fixed
Fixed Income Fund income and achieve income securities
above average total rated A or higher by
return consistent Moody's and S&P.
with prudent
investment management
over a full market
cycle
- -------------------------------------------------------------------------------
TCW Galileo Mortgage- Maximum current Invests in mortgage-
Backed Securities income backed securities
Fund guaranteed by, or
secured by collateral
which is guaranteed
by, the United States
Government, its
agencies,
instrumentalities or
its sponsored
corporations, or
private issued
mortgage-backed
securities rated Aa
or higher by Moody's
or AA or higher by
S&P.
- -------------------------------------------------------------------------------
TCW Galileo Total Maximize current Invests in mortgage-
Return Mortgage- income and achieve backed securities
Backed Securities above average total guaranteed by, or
Fund return consistent secured by collateral
with prudent that is guaranteed
investment management by, the United States
over a full market government, its
cycle agencies,
instrumentalities or
its sponsored
corporations, or
private issued
mortgage-backed
securities rated Aa
or higher by Moody's
or AA or higher by
S&P.
- -------------------------------------------------------------------------------
TCW Galileo High Maximize current Invests in high yield
Yield Bond Fund income and achieve bonds, commonly known
above average total as "junk" bonds.
return consistent
with reasonable risk
over a full
market cycle
</TABLE>

Under adverse market conditions, each Fund could invest some or all of its
assets in money market securities. Although the Funds would do this only when
seeking to avoid losses, it could have the effect of reducing the benefit from
any upswing in the market.

2
<PAGE>

Principal Risks

Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you--and the more you can lose. Since shares
of a Fund represent an investment in securities with fluctuating market prices,
the value of fund shares will vary as the value of each Fund's portfolio
securities increases or decreases in value. Therefore, the value of an
investment in a Fund could go down as well as up. All investments are subject
to:

. MARKET RISK

There is the possibility that the returns from the types of securities in
which a Fund invests will underperform returns from the various general
securities markets or different asset classes. Different types of securities
tend to go through cycles of outperformance and underperformance in
comparison to the general securities markets.

.SECURITIES SELECTION RISK

There is the possibility that the specific securities held in a Fund's
portfolio will underperform the other funds in the same asset class or
benchmarks that are representative of the general performance of the asset
class because of the portfolio manager's choice of securities.

Because the Galileo Funds described in this prospectus are fixed income funds,
each Fund may also be subject (in varying degrees) to the following additional
risks:

. CREDIT RISK

There is the possibility that a Fund could lose money if an issuer is unable
to meet its financial obligations such as the payment of principal and/or
interest on an instrument, or goes bankrupt. The High Yield Bond Fund is
subject to great credit risk because it invests in high yield bond funds,
which are commonly referred to as "junk bonds." The Core Fixed Income Fund
is subject to credit risk because it invests to some degree in below
investment grade fixed income securities.

. INTEREST RATE RISK

There is the possibility that the value of the Fund's portfolio investments
may fall since fixed income securities generally fall in value when interest
rates rise. The longer the term of a fixed income instrument, the more
sensitive it will be to fluctuations in value from interest rate changes.
Changes in interest rates may have a significant effect on the Core Fixed
Income, High Yield Bond, Total Return Mortgage-Backed Securities, and
Mortgage-Backed Securities Funds, because each Fund may hold securities with
long terms to maturity.

3
<PAGE>

In the case of mortgage-backed securities, rising interest rates tend to
extend the term to maturity of the securities, making them even more
susceptible to interest rate changes. When interest rates drop, not only can
the value of fixed income securities drop, but the yield can drop,
particularly where the yield on the fixed income securities is tied to
changes in interest rates, such as adjustable mortgages. Also when interest
rates drop, the holdings of mortgage-backed securities by the Core Fixed
Income, Total Return Mortgage-Backed Securities and Mortgage-Backed
Securities Funds can reduce returns if the owners of the underlying
mortgages pay off their mortgages sooner than anticipated since the funds
prepaid will have to be reinvested at the then lower prevailing rates. This
is known as prepayment risk. When interest rates rise, the holdings of
mortgage-backed securities by these Funds can reduce returns if the owners
of the underlying mortgages pay off their mortgages later than anticipated.
This is known as extension risk.

. JUNK BONDS

These bonds are speculative in nature. They are usually issued by companies
without long track records of sales and earnings, or by those companies with
questionable credit strength. These bonds are considered "below investment
grade." The High Yield Bond Fund primarily invests in below investment grade
corporate securities. The Core Fixed Income Fund may invest in debt
instruments rated below investment grade.

. FOREIGN INVESTING RISK

There is the likelihood that foreign investments may be riskier than U.S.
investments because of a lack of political stability, foreign controls on
investment and currency exchange rates, fluctuations in currency exchange
rates, withholding taxes and lack of adequate company information. The Core
Fixed Income and High Yield Bond Funds are subject to foreign investing risk
because these Funds may invest a portion of their assets in foreign company
securities. If they invest in "emerging markets," and they may, the risk is
even more pronounced. In addition, because foreign securities generally are
denominated and pay dividends or interest in foreign currencies, the Core
Fixed Income and High Yield Bond Funds may hold various foreign currencies,
the value of the net assets of these Funds as measured in U.S. dollars can
be affected favorably or unfavorably by changes in exchange rates.

4
<PAGE>

Principal Risks

. LIQUIDITY RISK

There is the possibility that a Fund may lose money or be prevented from
earning capital gains if it cannot sell a security at the time and price
that is most beneficial to the Fund. Each Fund (except the Money Market
Fund) is subject to liquidity risks because it invests in high yield bonds,
mortgage-backed securities or foreign or emerging markets securities, which
have all experienced periods of illiquidity.

Each Fund may be more susceptible to some of these risks than others, as noted
in the description of each Fund. A more detailed explanation of these risks is
presented under the "Risk Considerations" section at page 24.

Your investment is not a bank deposit, and it is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Money Market Fund seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by investing in the Fund. The
value of the other Galileo Fixed Income Funds will fluctuate in value.

5
<PAGE>

Performance Summary

The two tables below show each Fund's annual returns and its long-term
performance with respect to its Institutional Class shares. The first table
shows you how the Fund's performance has varied from year to year. The second
compares the Fund's performance over time to that of a broad-based securities
market index. Both tables assume reinvestment of dividends and distributions.
Except for the Money Market and Total Return Mortgage-Backed Securities Funds,
the performance information includes performance of the predecessor limited
partnership of each Fund, which were managed by an affiliate of TCW Funds
Management, Inc., using the same investment strategy as the Funds. The
performance of the partnerships were calculated using performance standards
applicable to private investment partnerships, which take into account all
elements of total return and reflect the deduction of all fees and expenses of
operation. The predecessor limited partnerships were not registered under the
Investment Company Act of 1940 ("1940") and, therefore, were not subject to
certain investment restrictions imposed by the 1940 Act and Subchapter M of the
Internal Revenue Code of 1986, as amended. If the limited partnerships had been
registered under the 1940 Act their performance could have been adversely
affected. As with all mutual funds, past performance is not a prediction of
future results.

Year by year total return (%)
as of December 31 each year*

TCW Galileo Money Market Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9.23% 8.18% 6.36% 3.91% 2.97% 3.91% 5.75% 5.14% 5.33% 5.23%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 0.81%

TCW Galileo Core Fixed Income Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.82% 16.10% 6.60% 10.65% -7.73% 18.08% 2.03% 8.90% 9.04%

1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 1.34%

TCW Galileo Mortgaged-Backed Securities Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
8.94% 11.13% 6.59% 4.57% -0.44% 11.58% 6.97% 6.81% 4.09%

1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

The Fund's total return for the period October 31, 1998 to December 31, 1998 is
0.40%

6
<PAGE>

TCW Galileo Total Return Mortgage-Backed Securities Fund

<TABLE>
<S> <C> <C> <C> <C> <C>
3.50% -6.20% 20.80% 5.10% 11.90% 7.23%

1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 0.50%

TCW Galileo High Yield Bond Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4.19% -1.51% 30.97% 15.51% 15.48% -0.34% 15.95% 11.96% 12.28% 2.27%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 3.20%

Best and worst quarterly performance during this period

<TABLE>
<CAPTION>
Fund Performance
- -----------------------------------------------------------------
<S> <C>
. Money Market Fund
Quarter ending June 30, 1989 2.38% (Best)
Quarter ending December 31, 1993 0.72% (Worst)
- -----------------------------------------------------------------
. Core Fixed Income Fund
Quarter ending June 30, 1995 5.93% (Best)
Quarter ending March 31, 1994 -4.54% (Worst)
- -----------------------------------------------------------------
. Mortgage-Backed Securities Fund
Quarter ending March 31, 1995 3.37% (Best)
Quarter ending June 30, 1994 -1.18% (Worst)
- -----------------------------------------------------------------
. Total Return Mortgage-Backed Securities Fund
Quarter ending June 30, 1995 6.81% (Best)
Quarter ending June 30, 1994 -4.78% (Worst)
- -----------------------------------------------------------------
. High Yield Bond Fund
Quarter ending March 31, 1991 11.94% (Best)
Quarter ending September 30, 1990 - 5.32% (Worst)
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
Average annual total return as of Since
December 31 1 year 5 years 10 years* inception
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
. Money Market Fund 5.2% 5.1% 5.6% 5.7%
- -----------------------------------------------------------------------------
Salomon Brothers 3-Month T-Bill Index 5.2% 5.1% 5.4% 5.5%
- -----------------------------------------------------------------------------
. Core Fixed Income Fund 9.0% 5.7% N/A 7.7%
- -----------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index 8.7% 7.3% N/A 8.7%
- -----------------------------------------------------------------------------
. Mortgage-Backed Securities Fund 4.1% 5.8% N/A 6.7%
- -----------------------------------------------------------------------------
Salomon Brothers 1-Year Treasury Index 5.9% 5.7% N/A 6.1%
- -----------------------------------------------------------------------------
. Total Return Mortgage-Backed
Securities Fund 7.2% 7.4% N/A 7.3%
- -----------------------------------------------------------------------------
Lehman Brothers Mortgage-Backed
Securities Index 7.5% 7.2% N/A 6.9%
- -----------------------------------------------------------------------------
. High Yield Bond Fund 2.3% 8.2% N/A 10.4%
- -----------------------------------------------------------------------------
Salomon Brothers High Yield Cash Pay
Index 4.4% 9.1% N/A 10.6%
</TABLE>
- -----------
*No Fund, other than the Money Market Fund, has an operating history of ten
years or greater.

8
<PAGE>

Fund Expenses and Expense Example

As an investor, you pay certain fees and expenses in connection with the Funds,
which are described in the table below. Annual Fund Operating Expenses are paid
out of Fund assets, so their effect is included in the share price. The
Institutional Class shares of the Funds have no sales charge (load) or Rule
12b-1 distribution fees.

FEE TABLE

<TABLE>
<CAPTION>
Total Return
Core Mortgage- Mortgage- High
Money Fixed Backed Backed Yield
Market Income Securities Securities Bond
------ ------ ---------- ------------ -----
<S> <C> <C> <C> <C> <C>
Shareholder Transaction Fees
1) Redemption Fees.......... None None None None None
2) Exchange Fees............ None None None None None
3) Contingent Deferred Sales
Load..................... None None None None None
4) Sales Load on Reinvested
Dividends................ None None None None None
5) Sales Load on Purchases.. None None None None None

Annual Fund Operating Expenses
Management Fees............ 0.25% 0.40%/2/ 0.50% 0.50% 0.75%
Distribution (12b-1) Fees.. None None None None None
Other Expenses............. 0.16% 0.22% 0.33% 0.20% 0.10%
Total Annual Fund Operating
Expenses................. 0.41%/1/ 0.62% 0.83% 0.70% 0.85%
</TABLE>

/1/The Adviser voluntarily agreed to reduce its fee or to pay the operating ex-
penses of the Fund to reduce Annual Fund Operating Expenses to 0.40% of Net As-
sets through October 31, 1998.
/2/The Adviser voluntarily agreed to reduce its fee to 0.35% of Net Assets
through October 31, 1998.

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

This Example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 Initial
Investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether or not you sold your shares at the end of a
period. Because actual return and expenses will be higher or lower, the Example
is for comparison purposes only.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------
<S> <C> <C> <C> <C>
Money Market................................... $42 $132 $230 $ 518
Core Fixed Income.............................. 63 199 346 774
High Yield Bond................................ 87 271 471 1,049
Total Return Mortgage-Backed Securities........ 72 224 390 871
Mortgage-Backed Securities..................... 85 265 460 1,025
</TABLE>

9
<PAGE>

TCW Galileo Money Market Fund

Investment Objectives/Approach

The Fund seeks current income, preservation of capital and liquidity. To pursue
these goals, it invests in high credit quality, short-term money market
securities. The Fund also seeks to maintain a constant net asset value of $1.00
per share. To pursue this goal, the Fund invests in money market instruments
that have remaining maturities of 397 days or less (and an average portfolio
maturity of 90 days or less on a dollar-weighted basis).

If the Fund's board believes that any deviation from a $1.00 amortized cost
price per share may result in material dilution or other unfair results to new
or existing shareholders, it will take steps to eliminate or reduce these
consequences. These steps include:

Concepts to understand . selling portfolio securities prior to
maturity

Maturity is the date on which the . shortening the average maturity of the
principal amount of a note, portfolio
draft, acceptance, bond, or other
debt instrument becomes due and . withholding or reducing dividends
payable.
. redeeming shares in kind

. utilizing a net asset value per share
determined by using available market
quotations

10
<PAGE>

Main Risks

This portfolio generally has the least investment risk of the Galileo Funds
because it invests in securities that have high credit ratings.

The two primary risks affecting this Fund are "credit risk" and "interest rate
risk." Credit risk refers to the likelihood that the Fund could lose money if a
money market issuer is unable to meet its financial obligations, such as the
payment of principal and/or interest on an investment, or goes bankrupt. This
Fund invests primarily in securities that have limited susceptibility to this
risk. Interest rate risk refers to the possibility that the value of the Fund's
portfolio investment may fall since fixed income securities generally fall in
value when interest rates rise. Short-term money market instruments generally
are affected less by changes in interest rates than fixed income securities
with longer terms to maturity.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high-grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

11
<PAGE>

TCW Galileo Core Fixed Income Fund

Investment Objectives/Approach

The Fund seeks to provide maximum current income and achieve above average
total return consistent with prudent investment management over a full market
cycle. To pursue this goal, it invests (except when maintaining a temporary
defensive position) at least 65% of the value of its total assets in fixed
income securities rated A or higher by Moody's and S&P. These securities
include U.S. Government obligations, bonds, notes, debentures, mortgage-backed
securities, asset-backed securities, foreign securities (government and
corporate) and other securities bearing fixed or variable interest rates of any
maturity.

Concepts to understand In managing the Fund's investments, the
Adviser uses a controlled risk approach.
Duration is often used to measure The techniques of this approach attempt
the potential volatility of a to control the principal risk components
bond's price: bonds with longer of the fixed income markets. These
durations are more sensitive to components include:
changes in interest rates, making
them more volatile than bonds . security selection within a given
with shorter durations. Bonds sector
with fixed maturities have a
readily determinable duration. . relative performance of the various
Bonds with uncertain payment market sectors
schedules, such as mortgage-
backed securities, which can be . the shape of the yield curve
prepaid, have durations which may
vary or lengthen in certain . fluctuations in the overall level of
interest rate environments, interest rates
making their values even more
volatile than they were when The Adviser also utilizes active asset
acquired. allocation in managing the Fund's
investments and monitors the duration of
the Fund's portfolio securities to
mitigate the Fund's exposure to interest
rate risk.

Mark L. Attanasio, Philip A. Barach and
Jeffrey E. Gundlach are the Fund's port-
folio managers.

12
<PAGE>

Main Risks

The primary risks affecting this Fund are "credit risk," "interest rate risk"
(including "extension risk" and "prepayment risk"), "foreign investing risk"
and "liquidity risk."

Credit risk refers to the likelihood that the Fund could lose money if an
issuer is unable to meet its financial obligations, such as the payment of
principal and/or interest on an instrument, or goes bankrupt. This Fund invests
primarily in high credit quality securities that have limited susceptibility to
this risk. A portion of the Fund's assets, however, will be invested in low
credit quality securities, which may make the Fund more susceptible to credit
risk. Debt securities that are rated below investment grade are considered to
be speculative. Those securities rated below investment grade are also commonly
known as "junk" bonds. This is especially true during periods of economic
uncertainty or during economic downturns. Interest rate risk refers to the
possibility that the value of the Fund's portfolio investments may fall since
fixed income securities generally fall in value when interest rates rise. The
longer the term of a fixed income instrument, the more sensitive it will be to
fluctuations in value from interest rate changes. Changes in interest rates may
have a significant effect on this Fund, because it may hold securities with
long terms to maturity and mortgage-backed securities, including collateralized
mortgage obligations and stripped mortgage securities. Its holding of mortgage-
backed securities can reduce returns if the owners of the underlying mortgages
pay off their mortgage sooner than anticipated when interest rates go down.
Because this Fund invests in mortgage-backed securities, it may be subject to
extension risk and prepayment risk, which are both a type of interest rate
risk. Extension risk refers to the possibility that rising interest rates may
cause owners of the underlying mortgages to pay off their mortgages at a slower
than expected rate. This particular risk may effectively change a security
which was considered short or intermediate term into a long-term security.
Long-term securities generally drop in value more dramatically in response to
rising interest rates than short or intermediate-term securities. Prepayment
risk refers to the possibility that falling interest rates may cause owners of
the underlying mortgages to pay off their mortgages at a faster than expected
rate. This tends to reduce returns since the funds prepaid will have to be
reinvested at the then lower prevailing rates. Because the Fund may invest a
portion of its assets in foreign company securities, it may be subject to
foreign investing risks. Foreign investing risk refers to the likelihood that
foreign investments may be riskier than U.S. investments because of many
factors, some of which include:

. a lack of political or economic stability

. foreign controls on investment and changes in currency exchange rates

. withholding taxes

. a lack of adequate company information

13
<PAGE>

The risks of foreign investing are even more pronounced if the Fund invests in
emerging markets. In addition, securities traded only through foreign markets
may be more volatile and are often harder to sell. Volatility is a way to
measure the changes in the price of a single security or an entire portfolio.
Large and frequent price changes indicate higher volatility, which generally
indicates that there is a greater chance you could lose money over the short
term. The Fund is also subject to foreign currency risk. Because foreign
securities are generally denominated and pay dividends or interest in foreign
currencies, the value of the net assets of the Fund as measured in U.S. dollars
will be affected favorably or unfavorably by changes in exchange rates.
Liquidity risk refers to the possibility that the Fund may lose money or be
prevented from earning capital gains if it cannot sell a security at the time
and price that is most beneficial to the Fund. Because the Fund invests in
below investment grade fixed income securities and foreign securities, it is
more susceptible to liquidity risks than funds that invest in higher quality
investments or do not invest in foreign securities.

The Fund may invest some assets in options, futures and foreign currency
futures and forward contracts. These practices are used primarily to hedge the
Fund's portfolio but may also be used to increase returns; however, such
practices sometimes may reduce returns or increase volatility. The Fund may
also invest some assets in interest-only and principal-only securities, which
are sometimes referred to as derivatives. These practices may reduce returns or
increase volatility and be very sensitive to changes in interest rates.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

14
<PAGE>

TCW Galileo Mortgage-Backed Securities Fund

Investment Objectives/Approach

The Fund seeks to maximize current income. To pursue this goal, the Fund
invests primarily in short-term mortgage-backed securities guaranteed by, or
secured by collateral that is guaranteed by, the United States Government, its
agencies, instrumentalities or its sponsored corporations (collectively, the
"Federal Agencies"), and in privately issued mortgage-backed securities rated
Aa or higher by Moody's or AA or higher by S&P.

Concepts to understand The Fund will invest (except when
maintaining a temporary defensive
Duration is often used to measure position) at least 65% of the value of
the potential volatility of a its total assets in mortgage-backed
bond's price: bonds with longer securities which are guaranteed by, or
durations are more sensitive to secured by collateral which is guaranteed
changes in interest rates, making by, Federal Agencies. In managing the
them more volatile than bonds Fund's investments, the Adviser seeks to
with shorter durations. Bonds construct a portfolio with a weighted
with fixed maturities have a average duration for fixed rate
readily determinable duration. securities and a weighted average reset
Bonds with uncertain payment frequency for floating rate securities of
schedules, such as mortgage- no more than two years.
backed securities which can be
prepaid, have durations which may Philip A. Barach, Jeffrey E. Gundlach and
vary or lengthen in certain Frederick H. Horton are the Fund's port-
interest rate environments, folio managers.
making their value even more
volatile than they were when
acquired.

Weighted average duration is the
average duration of the
securities in the portfolio
weighted by market value.

Weighted average reset frequency
is the average time to the next
coupon reset date of the floating
rate securities in the portfolio
weighted by market value.

15
<PAGE>

Main Risks

The primary risks affecting this Fund are "credit risk," "interest rate risk"
(including "extension risk" and "prepayment risk"), and "liquidity risk."

Credit risk refers to the likelihood that the Fund could lose money if an
issuer is unable to meet its financial obligations, such as the payment of
principal and/or interest on an instrument, or goes bankrupt. The Fund may
invest a portion of its assets in mortgage-backed securities which are not
guaranteed by the U.S. Government, which may make the Fund subject to
substantial credit risk. This is especially true during periods of economic
uncertainty or during economic downturns. Interest rate risk refers to the
possibility that the value of the Fund's portfolio investments may fall since
fixed income securities generally fall in value when interest rates rise. The
longer the term of a fixed income instrument, the more sensitive it will be to
fluctuations in value from interest rate changes. Changes in interest rates may
have a significant effect on this Fund, because it may hold securities with
long terms to maturity and mortgage-backed securities, including collateralized
mortgage obligations, and stripped mortgage securities. Its holdings of
mortgage-backed securities can reduce returns if the owners of the underlying
mortgages pay off their mortgages sooner than anticipated when interest rates
go down. Because this Fund invests in mortgage-backed securities, it may be
subject to extension risk and prepayment risk, which are both a type of
interest rate risk. Extension risk refers to the possibility that rising
interest rates may cause owners of the underlying mortgages to pay off their
mortgages at a slower than expected rate. This particular risk may effectively
change a security which was considered short or intermediate term into a long-
term security. Long-term securities generally drop in value more dramatically
in response to rising interest rates than short or intermediate-term
securities. Prepayment risk refers to the possibility that falling interest
rates may cause owners of the underlying mortgages to pay off their mortgages
at a faster than expected rate. This tends to reduce returns since the funds
prepaid will have to be reinvested at the then lower prevailing rates.
Liquidity risk refers to the possibility that the Fund may lose money or be
prevented from earning capital gains if it cannot sell a security at the time
and price that is most beneficial to the Fund. Because mortgage-backed
securities may be less liquid than other securities, the Fund may be more
susceptible to liquidity risks than funds that invest in other securities.

The Fund may invest some assets in inverse floaters and interest-only and
principal-only securities, which are sometimes referred to as derivatives.
These practices may reduce returns or increase volatility and may be very
sensitive to changes in interest rates.

16
<PAGE>

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

17
<PAGE>

TCW Galileo Total Return Mortgage-Backed Securities Fund

Investment Objectives/Approach

The Fund seeks to maximize current income and achieve above average total
return consistent with prudent investment management over a full market cycle.
To pursue these goals, the Fund invests primarily in mortgage-backed securities
of any maturity or type guaranteed by, or secured by collateral that is
guaranteed by, the United States Government, its agencies, instrumentalities or
its sponsored corporations (collectively, the "Federal Agencies"), and in
privately issued mortgage-backed securities rated Aa or higher by Moody's or AA
or higher by S&P.

Concepts to understand The Fund will invest (except when
maintaining a temporary defensive
Duration is often used to measure position) at least 65% of the value of
the potential volatility of a its total assets in mortgage-backed
bond's price: bonds with longer securities which are guaranteed by, or
durations are more sensitive to secured by collateral which is guaranteed
changes in interest rates, making by Federal Agencies. In managing the
them more volatile than bonds Fund's investments, the Adviser seeks to
with shorter durations. Bonds construct a portfolio with a weighted
with fixed maturities have a average duration for fixed rate
readily determinable duration. securities and a weighted average reset
Bonds with uncertain payment frequency for floating rate securities of
schedules, such as mortgage- no more than eight years.
backed securities which can be
prepaid, have durations which may Philip A. Barach, Jeffrey E. Gundlach and
vary or lengthen in certain Frederick H. Horton are the Fund's port-
interest rate environments, folio managers.
making their value even more
volatile than they were when
acquired.

Weighted average duration is the
average duration of the
securities in the portfolio
weighted by market value.

Weighted average reset frequency
is the average time to the next
coupon reset date of the floating
rate securities in the portfolio
weighted by market value.

18
<PAGE>

Main Risks

The primary risks affecting this Fund are "credit risk," "interest rate risk"
(including "extension risk" and "prepayment risk"), and "liquidity risk."

Credit risk refers to the likelihood that the Fund could lose money if an
issuer is unable to meet its financial obligations, such as the payment of
principal and/or interest on an instrument, or goes bankrupt. The Fund may
invest a portion of its assets in mortgage-backed securities which are not
guaranteed by the U.S. Government, which may make the Fund subject to
substantial credit risk. This is especially true during periods of economic
uncertainty or during economic downturns. Interest rate risk refers to the
possibility that the value of the Fund's portfolio investments may fall since
fixed income securities generally fall in value when interest rates rise. The
longer the term of a fixed income instrument, the more sensitive it will be to
fluctuations in value from interest rate changes. Changes in interest rates may
have a significant effect on this Fund, because it may hold securities with
long terms to maturity and mortgage-backed securities, including collateralized
mortgage obligations, and stripped mortgage securities. Because this Fund
invests in mortgage-backed securities, it may be subject to extension risk and
prepayment risk, which are both a type of interest rate risk. Extension risk is
the possibility that rising interest rates may cause owners of the underlying
mortgages to pay off their mortgages at a slower than expected rate. This
particular risk may effectively change a security which was considered short or
intermediate term into a long-term security. Long-term securities generally
drop in value more dramatically in response to rising interest rates than short
or intermediate-term securities. Prepayment risk refers to the possibility that
falling interest rates may cause owners of the underlying mortgages to pay off
their mortgages at a faster than expected rate. This tends to reduce returns
since the funds prepaid will have to be reinvested at the then lower prevailing
rates. Liquidity risk refers to the possibility that the Fund may lose money or
be prevented from earning capital gains if it cannot sell a security at the
time and price that is most beneficial to the Fund. Because mortgage-backed
securities may be less liquid than other securities, the Fund may be more
susceptible to liquidity risks than funds that invest in other securities.

19
<PAGE>

extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

20
<PAGE>

TCW Galileo High Yield Bond Fund

Investment Objectives/Approach

The Fund seeks to maximize income and achieve above average total return
consistent with reasonable risk over a full market cycle. To pursue this goal,
it invests (except when maintaining a temporary defensive position) at least
65% of the value of its total assets in high yield/below investment grade
bonds, commonly known as "junk" bonds. It also invests in other high yield
fixed income securities, including convertible and nonconvertible debt
securities and convertible and non-convertible preferred stocks.

Concepts to understand In managing the Fund's investments, the
Adviser places emphasis on securities at
Junk bonds are bonds that have a the lower-risk end of the high yield
credit rating of BB or lower by bond/below investment grade spectrum.
rating agencies such as Moody's These securities are issued by companies
Investors Service, Inc. and that the Adviser believes have stable to
Standard & Poor's Corporation. improving business prospects. The
These bonds are often issued by Adviser's investment approach also
companies without long track emphasizes consistent and high current
records of sales and earnings, or income. It attempts to reduce the Fund's
by those companies with investment risk through diversification
questionable credit strength. In and by analysis of:
the event of a prepayment problem
by the issuer of these bonds, . each issuer
they will only be paid if there
is anything left after the . each issuer's ability to make timely
payment of senior debt, such as payments of principal and interest
bank loans and investment grade
bonds. . broad economic trends and corporate
developments
Junk bonds are considered to be
mostly speculative in nature. Mark L. Attanasio, Mark D. Senkpiel, and
This gives the Fund more credit Melissa V. Weiler are the Fund's portfo-
risk than Galileo's other fixed lio managers.
income funds, but also gives it
the potential for higher returns.

21
<PAGE>

Main Risks

The primary risks affecting this Fund are "credit risk," "interest rate risk,"
"liquidity risk" and, to a lesser extent, "foreign investing risk."

Credit risk refers to the likelihood that the Fund could lose money if an
issuer is unable to meet its financial obligations, such as the payment of
principal and/or interest on an instrument, or goes bankrupt. This Fund is
subject to high credit risk, because it invests primarily in high yield/below
investment grade bonds. Debt securities that are rated below investment grade
are considered to be speculative. Those securities rated below investment grade
are also commonly known as "junk" bonds. This is especially true during periods
of economic uncertainty or during economic downturns. Interest rate risk refers
to the possibility that the value of the Fund's portfolio investments may fall
since fixed income securities generally fall in value when interest rates rise.
The longer the term of a fixed income instrument, the more sensitive it will be
to fluctuations in value from interest rate changes. Changes in interest rates
may have a significant effect on this Fund, because it may hold securities with
long terms to maturity. Liquidity risk refers to the possibility that the Fund
may lose money or be prevented from earning capital gains if it cannot sell a
security at the time and price that is most beneficial to the Fund. Because
high yield bonds may be less liquid than higher quality securities, the Fund
may be more susceptible to liquidity risk than funds that invest in higher
quality investments. A security whose credit rating has been lowered may be
particularly difficult to sell. Because the Fund may invest a portion of its
assets in foreign company securities, it may be subject to foreign investing
risks. Foreign investing risk refers to the likelihood that foreign investments
may be riskier than U.S. investments because of many factors, some of which
include:

. a lack of political or economic stability

. foreign controls on investment and currency exchange rates

. withholding taxes

. a lack of adequate company information

22
<PAGE>

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

23
<PAGE>

Risk Considerations

Please consider the following risks before investing in a Fund.

Various market risks can affect the price or liquidity of an issuer's
securities. Adverse events occurring with respect to an issuer's performance or
financial position can depress the value of the issuer's securities. The
liquidity in a market for a particular security will affect its value and may
be affected by factors relating to the issuer and the depth of the market for
that security. Other market risks that can affect value include a market's
current attitudes about type of security, market reactions to political or
economic events, and

General Investment Risk
tax and regulatory effects (including
Since shares of the Fund lack of adequate regulations for a market
represent an investment in or particular type of instrument). Market
securities with fluctuating restrictions on trading volume can also
market prices, the value of Fund affect price and liquidity.
shares will vary as the value of
each Fund's portfolio securities Prices of most securities tend to be more
increases or decreases. volatile in the short-term. Therefore an
Therefore, the value of an investor who trades frequently or redeems
investment in a Fund could go in the short-term is more likely to incur
down as well as up. This is also loss than an investor who holds
true for funds that invest investments for the longer term. The
primarily in fixed income fewer the number of issuers in which a
securities. High credit quality Fund invests, the greater the potential
investments also react in value volatility of its portfolio. A security
to interest rate changes. that is leveraged, whether explicitly or
implicitly, will also tend to be more
volatile in that both gains and losses
are intensified by the magnifying effects
of leverage. Certain instruments (such as
inverse floaters and interest-only
securities) behave similarly to leveraged
instruments.

The Adviser may temporarily invest up to
100% of the Fund's assets in high
quality, short-term money market
instruments if it believes adverse
economic or market conditions, such as
excessive volatility or sharp market
declines, justify taking a defensive
investment posture. If the Fund attempts
to limit investment risk by temporarily
taking a defensive investment position,
it may be unable to pursue its investment
objective during that time, and it may
miss out on some or all of an upswing in
the securities markets.

24
<PAGE>

Fixed income securities are subject to various risks. The two primary (but not
exclusive) risks affecting fixed income instruments are "credit risk" and
"interest rate risk." These risks can affect a security's price volatility to
varying degrees, depending upon the nature of the instrument. In addition, the
depth and liquidity of the market for an individual or class of fixed income
security can also affect its price and, hence, the market value of a Fund.

Fixed Income Securities "Credit risk" refers to the likelihood
that an issuer will default in the
payment of principal and/or interest on
an instrument. Financial strength and
solvency of an issuer are the primary
factors influencing credit risk. In
addition, lack of or inadequacy of
collateral or credit enhancements for a
fixed income security may affect its
credit risk. Credit risk of a security
may change over its life and securities
which are rated by rating agencies are
often reviewed and may be subject to
downgrades.

The High Yield Bond portfolio consists
primarily of below investment grade
corporate securities that are commonly
known as junk bonds. In addition, the
Core Fixed Income Fund may invest in debt
instruments rated below investment grade.
Generally, lower-rated debt securities
provide a higher yield than higher rated
debt securities of similar maturity but
are subject to greater credit risk than
higher rated securities of similar
maturity. These securities are regarded
as predominantly speculative with respect
to the issuer's continuing ability to
meet principal and interest payments.
Because investment in lower quality
securities involves greater investment
risk, achievement of a Fund's investment
objective will be more dependent on the
Adviser's analysis than would be the case
if the Fund were investing in higher

25
<PAGE>

quality bonds. In addition, lower quality securities may be more susceptible to
real or perceived adverse economic and individual corporate developments than
would investment grade bonds. Moreover, the secondary trading market for lower
quality securities may be less liquid than the market for investment grade
bonds. This potential lack of liquidity may make it more difficult for the
Adviser to value accurately certain portfolio securities.

"Interest rate risk" refers to the change in value of debt instruments
associated with changes in interest rates. Interest rate changes may affect the
value of a fixed income security directly (especially in the case of fixed rate
securities) and indirectly (especially in the case of adjustable rate
securities). In general, rises in interest rates will negatively impact the
value of fixed rate securities and falling interest rates will have a positive
effect on value. The degree to which a security's price will change as a result
of changes in interest rates is measured by its "duration." For example, the
price of a bond with a 5 year duration would be expected under normal market
conditions to decrease 5% for every 1% increase in interest rates. Generally,
securities with longer maturities have a greater duration and thus are subject
to greater price volatility from changes in interest rates. Adjustable rate
instruments also react to interest rate changes in a similar manner although
generally to a lesser degree (depending, however, on the characteristics of the
reset terms, including the index chosen, frequency of reset and reset caps or
floors, among other things).

26
<PAGE>

Investment in foreign securities involves special risks in addition to the
usual risks inherent in domestic investments. These include: political or
economic instability; the unpredictability of international trade patterns; the
possibility of foreign governmental actions such as expropriation,
nationalization or confiscatory taxation; the imposition or modification of
currency exchange or foreign investment controls; the imposition of withholding
taxes on dividends, interest and gains; price volatility; and fluctuations in
currency exchange rates. These risks are more pronounced in emerging market
countries.

Foreign Investing As compared to U.S. companies, foreign
issuers generally disclose less financial
and other information publicly and are
subject to less stringent and less
uniform accounting, auditing and
financial reporting standards. Foreign
countries typically impose less thorough
regulations on brokers, dealers, stock
exchanges, insiders and listed companies
than does the U.S., and foreign
securities markets may be less liquid and
more volatile than domestic markets.
Investment in foreign securities involves
higher costs than investment in U.S.
securities, including higher transaction
and custody costs as well as the
imposition of additional taxes by foreign
governments. In addition, security
trading practices abroad may offer less
protection to investors such as the
Funds. Settlement of transactions in some
foreign markets may be delayed or may be
less frequent than in the U.S., which
could affect the liquidity of each Fund's
portfolio. Also, it may be more difficult
to obtain and enforce legal judgments
against foreign corporate issuers than
against domestic issuers and it may be
impossible to obtain and enforce
judgments against foreign governmental
issuers.

Because foreign securities generally are
denominated and pay dividends or interest
in foreign currencies, and some of

27
<PAGE>

the Funds may hold various foreign currencies from time to time, the value of
the net assets of those Funds as measured in U.S. dollars can be affected
favorably or unfavorably by changes in exchange rates. Generally, currency
exchange transactions will be conducted on a spot (i.e., cash) basis at the
spot rate prevailing in the currency exchange market. The cost of currency
exchange transactions will generally be the difference between the bid and
offer spot rate of the currency being purchased or sold. In order to protect
against uncertainty in the level of future foreign currency exchange rates, the
Core Fixed Income Fund is authorized to enter into certain foreign currency
futures and forward contracts. However, it is not obligated to do so and,
depending on the availability and cost of these devices, the Fund may be unable
to use foreign currency futures and forward contracts to protect against
currency uncertainty. Please see the Statement of Additional Information for
further information.

With respect to the Core Fixed Income Fund, the forward currency market for the
purchase or sale of U.S. dollars in some countries is not highly developed, and
in certain countries, there may be no such market. If a devaluation of a
currency is generally anticipated, the Fund may not be able to contract to sell
the currency at an exchange rate more advantageous than that which would
prevail after the anticipated amount of devaluation, particularly as regards
forward contracts for local currencies in view of the relatively small,
inactive or even non-existent market for these contracts. In the event the
Funds hold securities denominated in a currency that suffers a devaluation, the
Funds' net asset values will suffer corresponding reductions. In this regard,
in December 1994, the Mexican government determined to allow the Mexican peso
to trade freely against the U.S. dollar rather than within a controlled band,
which resulted in a significant devaluation of the Mexican peso against the
dollar. Further, in July 1997, the Thai and Philippine governments allowed the
baht and peso, respectively, to trade freely against the U.S. dollar resulting
in a sharp devaluation of both currencies, and in 1998 Russia did the same,
causing a sharp devaluation of the ruble.

28
<PAGE>

Credit and Market Risks of Mortgage-Backed Securities. The investments by Core
Fixed Income in fixed rate and floating rate mortgage-backed securities will
entail normal credit risks (i.e., the risk of non-payment of interest and
principal) and market risks (i.e., the risk that interest rates and other
factors will cause the value of the instrument to decline). Many issuers or
servicers of mortgage-backed securities guarantee timely payment of interest
and principal on the securities, whether or not payments are made when due on
the underlying mortgages. This kind of guarantee generally increases the
quality of a security, but does not mean that the security's market value and
yield will not change. Like bond investments, the value of fixed rate mortgage-
backed securities will tend to rise when interest rates fall, and fall when
rates rise. Floating rate mortgage-backed securities will generally tend to
have minimal changes in price when interest rates rise or fall, but their
current yield will be affected. The value of all mortgage-backed securities may
also change because

of changes in the market's perception of
Mortgage-Backed Securities the creditworthiness of the organization
that issued or guarantees them. In
addition, the mortgage-backed securities
market in general may be adversely
affected by changes in governmental
legislation or regulation. Fluctuations
in the market value of mortgage-backed
securities after their acquisition
usually do not affect cash income from
these securities but are reflected in
Fund's net asset value. Factors that
could affect the value of a mortgage-
backed security include, among other
things, the types and amounts of
insurance which a mortgage carries, the
amount of time the mortgage loan has been
outstanding, the loan-to-value ratio of
each mortgage and the amount of
overcollateralization of a mortgage pool.

Liquidity Risk of Mortgage-Backed
Securities. The liquidity of mortgage-
backed securities varies by type of
security; at certain times a Fund may
encounter difficulty in disposing of
investments. Because mortgage-backed
securities may be less liquid than other

29
<PAGE>

securities, a Fund may be more susceptible to liquidity risks than funds that
invest in other securities. In the past, in stressed markets, certain types of
mortgage-backed securities, such as inverse floaters, and interest-only
securities, suffered periods of illiquidity if disfavored by the market.

Prepayment, Extension and Redemption Risks of Mortgage-Backed Securities.
Mortgage-backed securities reflect an interest in monthly payments made by the
borrowers who receive the underlying mortgage loans. Although the underlying
mortgage loans are for specified periods of time, such as 20 or 30 years, the
borrowers can, and typically do, pay them off sooner. When that happens, the
mortgage-backed security which represents an interest in the underlying
mortgage loan will be prepaid. A borrower is more likely to prepay a mortgage
which bears a relatively high rate of interest. This means that in times of
declining interest rates, a portion of the Fund's higher yielding securities
are likely to be redeemed and the Fund will probably be unable to replace them
with securities having as great a yield. Prepayments can result in lower yields
to shareholders. The increased likelihood of prepayment when interest rates
decline also limits market price appreciation of mortgage-backed securities.
This is known as prepayment risk. Mortgage-backed securities are also subject
to extension risk. Extension risk is the possibility that rising interest rates
may cause prepayments to occur at a slower than expected rate. This particular
risk may effectively change a security which was considered short or
intermediate term into a long-term security. Long-term securities generally
fluctuate more widely in response to changes in interest rates than short or
intermediate-term securities. In addition, a mortgage-backed security may be
subject to redemption at the option of the issuer. If a mortgage-backed
security held by a Fund is called for redemption, the Fund will be required to
permit the issuer to redeem or "pay-off" the security, which could have an
adverse effect on the Fund's ability to achieve its investment objective.

Collateralized Mortgage Obligations. There are certain risks associated
specifically with collateralized mortgage obligations ("CMOs.") CMOs are debt
obligations collateralized by mortgage loans or mortgage pass-through
securities. The average life of CMOs is determined using mathematical models
that incorporate prepayment assumptions and other factors that involve
estimates of future economic and market conditions. These estimates may vary
from actual future results, particularly during periods of extreme market
volatility. Further, under certain market conditions, such as those that
occurred in 1994, the average weighted life of certain CMOs may not accurately
reflect the price volatility of such securities. For example, in periods of
supply and demand imbalances in the market for such securities and/or in
periods of sharp interest rate movements, the prices of CMOs may fluctuate to a
greater extent than would be expected from interest rate movements alone. CMOs
issued by private entities are not obligations issued or guaranteed by the

30
<PAGE>

United States Government, its agencies or instrumentalities and are not
guaranteed by any government agency, although the securities underlying a CMO
may be subject to a guarantee. Therefore, if the collateral securing the CMO,
as well as any third party credit support or guarantees, is insufficient to
make payment, the holder could sustain a loss.

Stripped Mortgage Securities. Part of the investment strategy of the Core Fixed
Income, Total Return Mortgage-Backed Securities and Mortgage-Backed Securities
Funds involves interest-only Stripped Mortgage Securities. These investments
may be highly sensitive to changes in interest and tend to be less liquid than
other CMOs. In addition, prepayments of the underlying mortgages likely would
lower the Funds' returns from stripped securities they hold.

Inverse Floaters. Total Return Mortgage-Backed and Mortgage-Backed Securities
Funds invest in inverse floaters, a class of CMOs with a coupon rate that
resets in the opposite direction from the market rate of interest to which it
is indexed such as London Interbank Offered Rate (LIBOR) or COFI. Any rise in
the index rate (as a consequence of an increase in interest rates) causes a
drop in the coupon rate of an inverse floater while any drop in the index rate
causes an increase in the coupon of an inverse floater. An inverse floater may
behave like a security that is leveraged since its interest rate usually varies
by a magnitude much greater than the magnitude of the change in the index rate
of interest. The "leverage-like" characteristics inherent in inverse floaters
are associated with greater volatility in their market prices.

Adjustable Rate Mortgages. ARMs contain maximum and minimum rates beyond which
the mortgage interest rate may not vary over the lifetime of the security. In
addition, many ARMs provide for additional limitations on the maximum amount by
which the mortgage interest rate may adjust for any single adjustment period.
Alternatively, certain ARMs contain limitations on changes in the required
monthly payment. In the event that a monthly payment is not sufficient to pay
the interest accruing on an ARM, any excess interest is added to the principal
balance of the mortgage loan, which is repaid through future monthly payments.
If the monthly payment for such an instrument exceeds the sum of the interest
accrued at the applicable mortgage interest rate and the principal payment
required at such point to amortize the outstanding principal balance over the
remaining term of the loan, the excess is utilized to reduce the then-
outstanding principal balance of the ARM.

31
<PAGE>

cards, thereby reducing the balance due. In addition, some issuers of
automobile receivables permit the servicers to retain possession of the
underlying obligations. If the servicer were to sell these obligations to
another party, there is a risk that the purchaser would acquire an interest
superior to that of the holders of the related automobile receivables.

Year 2000 assurance that they will be successful,
or that interaction with other non-
complying computer systems will not
impair their services at that time. The
Adviser has been, and is currently in
contact with, each of its external
service providers to evaluate their
readiness for the year 2000. The Adviser
has requested each of its external
service providers to either (i) prepare a
description of its process for
identifying date sensitive areas, its
approach for implementing changes and its
testing methodology, along with its
timetable for completion, or (ii) certify
as to its year 2000 compliance.

In addition, it is possible that the
markets for securities in which the Funds
invest may be negatively affected by
computer failures throughout the
financial services industry commencing
January 1, 2000. Improperly functioning
trading systems may result in settlement
problems. In addition, corporate and
governmental data processing errors may
result in production problems for
individual companies and create overall
economic uncertainties. Earnings of
individual issuers will be

32
<PAGE>

affected by remediation costs which may be substantial. Individual firms may
further experience disruptions to their business due to the failure of their
counterparts to address approaching year 2000 problems, or could experience
further disruption to the economy at large, which could adversely affect
corporate earnings generally and the value of their securities. Accordingly, a
Fund's portfolio investments may be negatively affected.

Certain of the Funds will invest in European countries that have agreed to
enter into the European Monetary Union (EMU). EMU is an effort by certain
European countries to, among other things, reduce barriers between countries
and eliminate fluctuations in their currencies. Among other things, EMU
establishes a single European currency (the euro), which was introduced on
January 1, 1999 and is expected to replace the existing national currencies of
all initial EMU participants by July 1, 2002. Upon introduction of the euro,

European Economic and Monetary certain securities (beginning with
Union government and corporate bonds) have been
redonominated in the euro and, thereafter
trade and make dividend and other
payments only in euros.

Like other investment companies and
business organizations, including the
companies in which the Funds invest, the
Funds could be adversely affected: (i) if
the euro, or EMU as a whole does not take
effect as planned; (ii) if a
participating country withdraws from EMU;
or (iii) if the computing, accounting and
trading systems used by the Funds'
service providers, or by other business
entities with which the Funds or their
service providers do business, are not
capable of recognizing the euro as a
distinct currency at the time of, and
following euro conversion.

33
<PAGE>

Management of the Funds

Investment Adviser

The Funds' investment adviser is TCW Funds Management, Inc. and is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles, California
90017. As of December 31, 1998, the Adviser and its affiliated companies, which
provide a variety of trust, investment management and investment advisory
services, had over $50 billion under management or committed for management.

Portfolio Managers

Listed below are the individuals who have been primarily responsible for the
day-to-day portfolio management of the Funds, including a summary of each
person's business experience during the past five years:

* Positions with the TCW Group, Inc. and its affiliates may have changed over
time.

Advisory Agreement

The Funds and the Adviser have entered into an Investment Advisory and
Management Agreement (the "Advisory Agreement"), under the terms of which the
Funds have employed the Adviser to manage the investment of their assets, to
place orders for the purchase and sale of their portfolio securities, and to be
responsible for overall management of the Funds' business affairs, subject to
control by the Board of Directors. The Adviser also pays certain costs of
marketing the Funds, including sales personnel compensation, from legitimate
profits from its investment advisory fees and other resources

34
<PAGE>

available to it. In addition, the Adviser may reimburse third party
administrators for retirement plan shareholder servicing expenses. Under the
Advisory Agreement, the Funds pay to the Adviser as compensation for the
services rendered, facilities furnished, and expenses paid by it the following
fees:

<TABLE>
<CAPTION>
Fund Annual Management Fee (As Percent of Average Net Asset Value)
- ------------------------------------------------------------------------------------------------------
<S> <C>
Money Market 0.25%
Core Fixed Income 0.40%
Mortgage-Backed Securities 0.50%
Total Return Mortgage-Backed Securities 0.50%
High Yield Bond 0.75%
</TABLE>

The Adviser has agreed to reduce its investment advisory fee or to pay the
ordinary operating expenses of the Funds to the extent necessary to limit the
Funds' ordinary operating expenses to an amount not to exceed the trailing
monthly expense ratio average for comparable funds calculated by Lipper
Analytical Services, Inc. through December 31, 1999.

The Advisory Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by a Fund in
connection with the matters to which the agreement relates, except a loss
resulting from willful misfeasance, bad faith, gross negligence on the part of
the Adviser in the performance of its duties or from reckless disregard by the
Adviser of its duties under the agreement.

Multiple Class Structure

Each Fund currently offers two classes of shares, Institutional Class shares
and Class N shares. Shares of each class of a Fund represents an equal pro rata
interest in that Fund and generally give you the same voting, dividend,
liquidation, and other rights. The Institutional Class shares are offered at
the current net asset value. The Class N shares are also offered at the current
net asset value, but will be subject to fees imposed under a distribution plan
("Distribution Plan") adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended. Pursuant to the Distribution Plan, each Fund
compensates the Funds' distributor at a rate equal to 0.25% of the average
daily net assets of the Fund attributable to its Class N shares for
distribution and related services. Because these fees are paid out of the
Fund's Class N assets on an on-going basis, over time, these fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.

35
<PAGE>

Your Investment

Account Policies and Services

Buying shares

You pay no sales charges to invest in a Fund. Your price for Fund shares is the
Fund's net asset value per share (NAV) which is calculated as of the close of
trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) every
day the exchange is open. Your order will be priced at the next NAV calculated
after your order is accepted by the Fund. Orders received by a Fund's Transfer
Agent from dealers, brokers or other service providers after the NAV for the
day is determined will receive that same day's NAV if the orders were received
by the dealers, brokers or service providers from their customers prior to 4:00
p.m. and were transmitted to and received by the Transfer Agent prior to 8:00
a.m. Eastern time on the next day. A Fund's investments are valued based on
market value, or where market quotations are not readily available, based on
fair value as determined in good faith by the Fund pursuant to procedures
established by the Fund's Board.

Minimums

<TABLE>
<CAPTION>
Initial Additional
- ---------------------------------------------------------
<S> <C> <C>
All Funds except Money Market Fund $250,000 $25,000
Money Market Fund $100,000 $ 1,000
</TABLE>

TCW Galileo Funds, Inc. may waive the minimum and subsequent investments. All
investments must be in U.S. dollars. Third-party checks, except those payable
to an existing shareholder, will normally not be accepted. If your check or
wire does not clear, you will be responsible for any loss a Fund incurs.

Selling shares

You may sell shares at any time. Your shares will be sold at the next NAV
calculated after your order is accepted by the Fund's transfer agent. Any
certificates representing Fund shares being sold must be returned with your
redemption request. Your order will be processed promptly and you will
generally receive the proceeds within a week.

Before selling recently purchased shares, please note that if the Fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to fifteen days.

36
<PAGE>

Written sell order

Some circumstances require written sell orders, along with signature
guarantees. These include:

. amounts of $100,000 or more

. amounts of $1,000 or more on accounts whose address has been changed within
the last 30 days

. requests to send the proceeds to a payee or address different than what is on
our records

A signature guarantee helps protect against fraud. You can obtain one from most
banks or securities dealers but not from a notary public. Please call us to
ensure that your signature guarantee will be processed correctly.

Check writing privilege

You may request checks which may be drawn on your Money Market Fund account.
These checks may be drawn in amounts of $1,000 or more, may be made payable to
the order of any person and may be cashed or deposited. You can set up this
service with your New Account Form or by calling 800-248-4486.

Exchange privilege

You can exchange from one Class I Galileo Fund into another. You must meet the
investment minimum for the Fund you are exchanging into. You can request your
exchange in writing or by phone. Be sure to read the current prospectus for any
Fund into which you are exchanging. Any new account established through an
exchange will have the same privileges as your original account (as long as
they are available).

Third Party Transaction

You may buy and redeem Fund shares through certain broker-dealers and financial
organizations and their authorized intermediaries. If purchases and redemptions
of Fund shares are arranged and settlement is made at an investor's election
through a registered broker-dealer, other than the Fund's distributor, that
broker-dealer may, at its discretion, charge a fee for that service.

Account statements

Every Fund investor automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.

37
<PAGE>

General policies

For any Fund except the Money Market Fund, if your account falls below $250,000
($100,000 for Money Market Fund) as a result of redemptions and or exchanges
for six months or more, the Fund may close your account and send you the
proceeds upon 60 days' written notice. If your account with the Money Market
Fund drops below $10,000 as a result of redemptions and or exchanges, the Fund
may close your account and send you the proceeds upon 30 days' written notice.

Unless you decline telephone privileges on your New Account Form, you may be
responsible for any fraudulent telephone order as long as the Transfer Agent
takes reasonable measures to verify the order.

38
<PAGE>

Large Redemption Amounts Each Fund restricts excessive trading
(usually defined as more than four
The Fund also reserves the right exchanges out of the Fund within a
to make a "redemption in kind"-- calendar year). You are limited to one
payment in portfolio securities exchange of shares in the same Fund
rather than cash--if the amount during any 15-day period except the TCW
you are redeeming in any 90-day Galileo International Equities Fund,
period is large enough to affect investors in 401(k) and other group
Fund operations (for example, if retirement accounts, investors who
it equals more than $250,000 or purchase shares through certain broker-
represents more than 1% of the dealers and asset allocation accounts
Fund's assets). managed by the Adviser or an affiliate.
Each Fund reserves the right to:

. refuse any purchase or exchange request
that could adversely affect a Fund or
its operations, including those from
any individual or group who, in the
Fund's view, are likely to engage in
excessive trading

. change or discontinue its exchange
privilege, or temporarily suspend this
privilege during unusual market
conditions

. delay sending out redemption proceeds
for up to seven days (generally applies
only in cases of very large
redemptions, excessive trading or
during unusual market conditions)

39
<PAGE>

TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C>
In Writing

Complete the New Account Form. Mail your New
Account Form and a check made payable to TCW
Galileo ___________ Fund to:

Regular Mail
TCW Galileo Funds, Inc. (Same, except that you should include a note specifying
DST Systems, Inc. the Fund name, your account number, and the name(s)
P.O. Box 419951 your account is registered in.)
Kansas City, MO 64141-6951

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105- 2005

- ---------------------------------------------------------------------------------------------------------
By Telephone

Please contact the Transfer Agent at
(800) 248-4486 for a New Account Form.

Wire: Have your bank send your investment to: (Same)

United Missouri Bank of Kansas City, N.A.
ABA No. 101000695
DST Systems, Inc./AC 9870371553 (for all
Galileo Funds except the Money Market Fund)
DST Systems, Inc./AC 9870371170 (for Money
Market Fund only)
FBO TCW Galileo _____________ Fund
(Name on the Fund Account)
(Fund Account Number)

- ---------------------------------------------------------------------------------------------------------
Via Exchange

Call the Transfer Agent at (800) 248-4486 or
the Investor Relations Department at
(800) 386-3829. The new account will have
the same registration as the account from which
you are exchanging.
</TABLE>

If you need help completing the New Account Form, please call the Transfer
Agent at (800) 248-4486, the Investor Relations Department at TCW Galileo Funds
at (800) FUND TCW (800) 386-3829 or your investment representative at TCW
Galileo Funds.

40
<PAGE>

<TABLE>
<CAPTION>
TO SELL OR EXCHANGE SHARES
- ---------------------------------
<S> <C>
By Mail To reach the Transfer Agent at
Write a letter of instruction DST Systems, Inc., call toll free
that includes: in the U.S.
. your name(s) and signature(s)
as they appear on the account (800) 248-4486
form Outside the U.S.
. your account number (816) 843-7166 (collect)
. the Fund name
. the dollar amount you want to To reach your investment repre-
sell or exchange sentative or the Investor Rela-
. how and where to send the tions Department at TCW Galileo
proceeds Funds, call toll free in the U.S.
- ---------------------------------
Obtain a signature guarantee or (800) 386-3829
other documentation, if required
(see "Account Policies and
Services--Selling Shares").
Mail your letter of instruction
to:
Regular Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
P.O. Box 419951
Kansas City, MO 64141-6951
Express, Registered or Certified
Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005
- ---------------------------------
By Telephone
Be sure the Fund has your bank
account information on file. Call
the Transfer Agent at (800) 248-
4486 to request your transaction.
Proceeds will be wired to your
bank.
Telephone redemption requests
must be for a minimum of $1,000.
- ---------------------------------
Systematic Withdrawal Plan: Call
(800) 248-4486 to request a form
to add the plan. Complete the
form, specifying the amount and
frequency of withdrawals you
would like.
Be sure to maintain an account
balance of $25,000
($10,000--the Money Market Fund
only) or more.
Systematic Withdrawal plans are
subject to a minimum
annual withdrawal of $500.
</TABLE>

41
<PAGE>

Distributions and Taxes

The amount of dividends of net investment income and distributions of net
realized long and short-term capital gains payable to shareholders will be
determined separately for each Fund. Dividends from the net investment income
of each Fund except the Money Market Fund will be declared and paid monthly.
Dividends from net investment income for the Money Market Fund will be declared
and paid each weekday exclusive of days the New York Stock Exchange or the
Fund's custodian bank is closed. The Funds will distribute any net realized
long or short-term capital gains at least annually. Your distributions will be
reinvested in the fund unless you instruct the fund otherwise. There are no
fees or sales charges on reinvestments.

In any fiscal year in which the Funds qualify as regulated investment companies
and distribute to shareholders all of their net investment income and net
capital gains, the Funds are relieved of federal income tax.

Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash--unless you are exempt from taxation or entitled
to tax deferral. Capital gains distributions may be taxable at different rates
depending on the length of time a Fund has held the assets sold. Early each
year, you will be notified as to the amount and federal tax status of all
distributions paid during the prior year. Distributions may also be subject to
state or local taxes. The tax treatment of redemptions from a retirement plan
account may differ from redemptions from an ordinary shareholder account. If
you redeem shares of a Fund or exchange them for shares of another Fund, any
gain on the transaction may be subject to tax. You must provide the Funds with
a correct taxpayer identification number (generally your Social Security
Number) and certify that you are not subject to backup withholding. If you fail
to do so, the IRS can require the Funds to withhold 31% of your taxable
distributions and redemptions. Federal law also requires the Funds to withhold
30% or the applicable tax treaty rate from dividends paid to nonresident alien,
non-U.S. partnership and non-U.S. corporation shareholder accounts.

This is a brief summary of some of the tax laws that affect your investment in
the Fund. Please see the Statement of Additional Information and your tax
adviser for further information.

42
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance for the fiscal years indicated. Certain information
reflects financial results for a single Fund share. "Total return" shows how
much your investment in the Institutional Class shares of the Fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been audited by Deloitte &
Touche LLP, whose report, along with Company's financial statements, are
included in the annual report, which is available upon request.

TCW Galileo Money Market Fund

Ratio of expenses to
average net assets/3/ (%) 0.40% 0.40% 0.40% 0.40% 0.40%/2/
Ratio of net income to
average net assets (%) 5.19% 5.17% 5.04% 5.49% 3.65%/2/
</TABLE>

/1/For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
/2/Annualized.
/3/The Adviser has voluntarily agreed to reduce its fee, or to pay the operat-
ing expenses of the Fund, to the extent necessary to limit the annual ordinary
operating expenses of the Fund to 0.40% 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 0.41% for the fiscal year
ended October 31, 1998, 0.44% for the fiscal year ended October 31, 1996, 0.46%
for the fiscal year ended October 31, 1995 and 0.68% for the ten months ended
October 31, 1994.

43
<PAGE>

Financial Highlights

TCW Galileo Core Fixed Income Fund

<TABLE>
<CAPTION>
Ten Months
Year Ended October 31 Ended
----------------------------------- 10/31
1998 1997 1996 1995 1994
-------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value,
beginning of period $9.62 $9.45 $9.61 $8.94 $10.04
-------------------------------------------
Investment operations:
Investment income--net 0.55 0.58 0.55 0.58 0.44
Net realized and
unrealized gain (loss)
on investments 0.29 0.19 (0.16) 0.62 (1.16)
-------------------------------------------
Total from investment
operations 0.84 0.77 0.39 1.20 (0.72)
-------------------------------------------
Distributions:
Dividends from net
investment income (0.57) (0.60) (0.55) (0.53) (0.38)
-------------------------------------------
Total Distributions (0.57) (0.60) (0.55) (0.53) (0.38)
-------------------------------------------
Net asset value, end of
period $9.89 $9.62 $9.45 $9.61 $8.94
-------------------------------------------
Total return (%) 9.02% 8.45% 4.26% 13.92% (7.24)%/1/
Ratios/Supplemental Data
Net assets, end of
period ($ x 1,000) $162,996 $19,368 $25,006 $36,236 $ 50,153
Ratio of expenses to
average net assets (%) 0.62% 0.93% 0.76% 0.68%/3/ 0.50%/2/,/3/
Ratio of net income to
average net assets (%) 5.60% 6.13% 5.85% 6.38% 6.11%/2/
Portfolio turnover rate
(%) 272.77% 142.96% 238.73% 223.78% 208.63%/1/
</TABLE>

/1/For the ten months ended October 31, 1994, and not indicative of a full
year's operating results.
/2/Annualized.
/3/The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
operating expenses of the Fund to 0.50% of net assets through December 31
,1994. Had such action not been taken, total annualized operating expenses for
the ten months ended October 31, 1994 would have been 0.68% and for the fiscal
year ended October 31, 1995, total operating expenses would have been 0.72% of
average net assets.

44
<PAGE>

Financial Highlights

TCW Galileo Mortgage-Backed Securities Fund

<TABLE>
<CAPTION>
Ten Months
Year Ended October 31 Ended
---------------------------------- 10/31
1998 1997 1996 1995 1994
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value,
beginning of period $9.70 $9.67 $9.58 $9.41 $9.86
------------------------------------------------
Investment operations:
Investment income--net 0.35 0.58 0.51 0.67 0.42
Net realized and
unrealized gain (loss)
on investments 0.10 0.05 0.22 0.25 (0.48)
------------------------------------------------
Total from investment
operations 0.45 0.63 0.73 0.92 (0.06)
------------------------------------------------
Distributions:
Dividends from net
investment income (0.11) (0.38) (0.46) (0.71) (0.39)
Dividends from paid-in-
capital (0.44) -- -- -- --
Dividends in excess of
net investment income -- (0.22) (0.18) (0.04) --
------------------------------------------------
Total Distributions (0.55) (0.60) (0.64) (0.75) (0.39)
------------------------------------------------
Net asset value, end of
period $9.60 $9.70 $9.67 $9.58 $9.41
------------------------------------------------
Total return (%) 4.73% 6.71% 7.86% 10.16% (0.61)%
Ratios/Supplemental Data
Net assets, end of
period ($ x 1,000) $43,639 $55,307 $61,835 $81,366 $134,948
Ratio of expenses to
average net assets (%) 0.83% 0.77% 0.69% 0.61%/2/ 0.55%/2/,/3/
Ratio of net income to
average net assets (%) 3.61% 6.00% 5.34% 7.13% 5.18%/2/
Portfolio turnover rate
(%) 68.40% 109.91% 54.10% 37.83% 65.54%/1/
</TABLE>

/1/For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
/2/Annualized.
/3/The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
ordinary operating expenses of the Fund to 0.55% of net assets through December
31, 1994. Had such action not been taken, total annualized operating expenses
for the ten months ended October 31, 1994 total annualized operating expenses
would have been 0.62% of average net assets and for the fiscal year ended Octo-
ber 31, 1995, total operating expense would have been 0.63% of average net as-
sets.

45
<PAGE>

Financial Highlights

TCW Galileo Total Return Mortgage-Backed Securities Fund (formerly TCW Galileo
Long-Term Mortgage-Backed Securities Fund)

<TABLE>
<CAPTION>
Ten Months
Year Ended October 31 Ended
------------------------------------ 10/31
1998 1997 1996 1995 1994
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value,
beginning of period $9.91 $9.56 $9.56 $8.95 $10.07
--------------------------------------------------
Investment operations:
Investment income--net 0.84 0.75 0.68 0.72 0.63
Net realized and
unrealized gain (loss)
on investments (0.07) 0.32 0.02 0.71 (1.26)
--------------------------------------------------
Total from investment
operations 0.77 1.07 0.70 1.43 (0.63)
--------------------------------------------------
Distributions:
Dividends from net
investment income (0.86) (0.72) (0.68) (0.82) (0.49)
Dividends from net
realized gains on
investments (0.05) -- -- -- --
Dividends in excess of
net investment income (0.01) -- (0.02) -- --
--------------------------------------------------
Total Distributions (0.92) (0.72) (0.70) (0.82) (0.49)
--------------------------------------------------
Net asset value, end of
period $9.76 $9.91 $9.56 $9.56 $8.95
--------------------------------------------------
Total return (%) 8.20% 11.66% 7.69% 16.84% (6.39)%/1/
Ratios/Supplemental Data
Net assets, end of
period ($ x 1,000) $101,501 $81,442 $112,260 $80,159 $66,632
Ratio of expenses to
average net assets (%) 0.70% 0.67% 0.68% 0.68%/3/ 0.65%/2/,/3/
Ratio of net income to
average net assets (%) 8.52% 7.77% 7.15% 7.88% 8.03%/2/
Portfolio turnover rate
(%) 27.95% 16.01% 39.28% 23.76% 36.71%/1/
</TABLE>

/1/For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
/2/Annualized.
/3/The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
ordinary operating expenses of the Fund to 0.65% of net assets through December
31, 1994. Had such action not been taken, for the ten months ended October 31,
1994 total annualized operating expenses would have been 0.78% of average net
assets, and for the fiscal year ended October 31, 1995, total operating ex-
penses would have been 0.69% of average net assets.

46
<PAGE>

Financial Highlights

TCW Galileo High Yield Bond Fund

<TABLE>
<CAPTION>
Year Ended October 31 Ten Months
------------------------------------- Ended
1998 1997 1996 1995 10/31 1994
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value,
beginning of period $10.11 $9.77 $9.74 $9.43 $10.12
---------------------------------------------------
Investment operations:
Investment income--net 0.88 0.91 0.89 0.92 0.73
Net realized and
unrealized gain (loss)
on investments (0.74) 0.34 0.03 0.39 (0.77)
---------------------------------------------------
Total from investment
operations 0.14 1.25 0.92 1.31 (0.04)
---------------------------------------------------
Distributions:
Dividends from net
investment income (0.89) (0.91) (0.89) (1.00) (0.65)
Dividends from net
realized gains on
investments (0.15) -- -- -- --
Dividends in excess of
net realized gains (0.01) -- -- -- --
---------------------------------------------------
Total Distributions (1.05) (0.91) (0.89) (1.00) (0.65)
---------------------------------------------------
Net asset value, end of
period $9.20 $10.11 $9.77 $9.74 $9.43
---------------------------------------------------
Total return (%) 1.18% 13.26% 9.92% 14.65% (0.34)%/1/
Ratios/Supplemental Data
Net assets, end of
period ($ x 1,000) $165,702 $208,761 $183,815 $92,652 $90,577
Ratio of expenses to
average net assets (%) 0.85% 0.83% 0.90% 0.87%/3/ 0.79%/2/,/3/
Ratio of net income to
average net assets (%) 8.89% 9.10% 9.21% 9.60% 9.18%/2/
Portfolio turnover rate
(%) 92.24% 109.45% 82.56% 36.32% 34.01%/1/
</TABLE>

/1/For the ten months ended October 31, 1994 and not indicative for a full
year's operating results.
/2/Annualized.
/3/ The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
ordinary operating expenses of the Fund to 0.79% of net assets through December
31, 1994. Had such action not been taken, for the ten months ended October 31,
1994 total annualized operating expenses would have been 0.91% of average net
assets, and for the fiscal year ended October 31, 1995, total operating ex-
penses would have been 0.88% of average net assets.

47
<PAGE>

For More Information

For all shareholder account TCW Galileo Funds, Inc.
information such as transactions
and account inquiries: SEC file number: 811-7170

Call (800) 248-4486 More information on the Fund is avail-
able free upon request, including the
For information regarding the following:
TCW Galileo Funds, Inc.:
Annual / Semi-Annual Report
Call (800) FUNDTCW (386-3829)
Describes the Fund's performance, lists
In writing: portfolio holdings and contains a letter
from the Fund's portfolio manager
TCW Galileo Funds, Inc. discussing recent market conditions,
c/o DST System, Inc., economic trends and Fund strategies.

P.O. Box 419951 Statement of Additional Information
Kansas City, MO 64141-6951 (SAI)

On the Internet: Provides more details about the Fund and
Text-only versions of Fund docu- its policies. A current SAI is on file
ments filed with the SEC can be with the Securities and Exchange
viewed online or downloaded Commission (SEC) and is incorporated by
from: reference and is legally considered part
of this prospectus.
SEC
http://www.sec.gov

TCW GALILEO FUNDS, INC.
http://www.tcwgroup.com

You can also obtain copies by
visiting the SEC's Public
Reference Room in Washington, DC
(phone 1-800-SEC-0330) or by
sending your request and a
duplicating fee to the SEC's
Public Reference Section, 450
Fifth Street, N.W., Washington,
DC 20549-6009.

48
<PAGE>

TCW Galileo
Funds, Inc.

This prospectus tells you about the Institutional Class shares of nine of the
separate investment funds offered by TCW Galileo Funds, Inc., each of which has
different investment objectives and policies. Please read this document
carefully, and keep it for future reference. Sometimes we will refer to the
funds in this prospectus as the Galileo Equity Funds.

TCW Galileo Convertible Securities Fund

TCW Galileo Select Equities Fund

TCW Galileo Earnings Momentum Fund

TCW Galileo Large Cap Growth Fund

TCW Galileo Large Cap Value Fund

TCW Galileo Aggressive Growth Equities Fund

TCW Galileo Small Cap Growth Fund

TCW Galileo Small Cap Value Fund

TCW Galileo Value Opportunities Fund

March 1, 1999

[LOGO OF TCW GALILEO FUNDS]
Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
General Fund Information

Investment Objectives and Principal Strategies............................. 2
Principal Risks............................................................ 3
Performance Summary........................................................ 5
Fund Expenses.............................................................. 9
Expense Example............................................................ 10

TCW Galileo Convertible Securities Fund

Investment Objectives/Approach............................................. 11
Main Risks................................................................. 12

TCW Galileo Select Equities Fund

Investment Objectives/Approach............................................. 14
Main Risks................................................................. 15

TCW Galileo Earnings Momentum Fund

Investment Objectives/Approach............................................. 17
Main Risks................................................................. 18

TCW Galileo Large Cap Growth Fund

Investment Objectives/Approach............................................. 20
Main Risks................................................................. 21

TCW Galileo Large Cap Value Fund

Investment Objectives/Approach............................................. 22
Main Risks................................................................. 23

TCW Galileo Aggressive Growth Equities
Fund

Investment Objectives/Approach............................................. 24
Main Risks................................................................. 25

TCW Galileo Small Cap Growth Fund

Investment Objectives/Approach............................................. 26
Main Risks................................................................. 27

TCW Galileo Small Cap Value Fund

Investment Objectives/Approach............................................. 28
Main Risks................................................................. 29

TCW Galileo Value Opportunities Fund

Investment Objectives/Approach............................................. 30
Main Risks................................................................. 31
Risk Considerations........................................................ 32
Management of the Funds.................................................... 38
Multiple Class Structure................................................... 41

Your Investment

Account Policies and Services.............................................. 42
To Open an Account/To Add to an Account.................................... 45
To Sell or Exchange Shares................................................. 46
Distributions and Taxes.................................................... 47
Financial Highlights....................................................... 48
For More Information....................................................... 56
</TABLE>

1
<PAGE>

General Fund Information

Investment Objectives and Principal Strategies

All of the Galileo Equity Funds are affected by changes in the economy, or in
securities and other markets. There is also the possibility that investment
decisions the Adviser makes will not accomplish what they were designed to
achieve or that companies in which the Funds invest will have disappointing
performance or not pay their debts.

<TABLE>
<CAPTION>
TCW Galileo Funds, Inc. Investment Objectives Principal Investment Strategies
- --------------------------------------------------------------------------------------------------------
<C> <C> <S>
TCW Galileo Convertible Securities Fund High total return from current Invests in
income and capital appreciation convertible
securities.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Select Equities Fund Long-term capital appreciation Invests in
common stock of
large
capitalization
companies.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Earnings Momentum Fund Long-term capital appreciation Invests in
equity
securities of
companies
experiencing or
expected to
experience
accelerating
earnings
growth.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Large Cap Growth Fund Long-term capital appreciation Invests in
equity
securities of
large
capitalization
U.S. companies
with above
average
earnings
prospects.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Large Cap Value Fund Long-term capital appreciation Invests in
equity
securities of
large
capitalization
value
companies.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Aggressive Growth Long-term capital appreciation Invests in
Equities Fund equity
securities
issued by
companies that
appear to offer
superior growth
prospects.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Small Cap Growth Fund Long-term capital appreciation Invests in
equity
securities
issued by small
capitalization
growth
companies.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Small Cap Value Fund Long-term capital appreciation Invests in
equity
securities
issued by small
capitalization
value
companies.
- --------------------------------------------------------------------------------------------------------
TCW Galileo Value Opportunities Fund Long-term capital appreciation Invests in
equity
securities of
companies with
market
capitalizations
between $500
million and $5
billion.
</TABLE>

Under adverse market conditions, each Fund could invest some or all of its
assets in money market securities. Although the Funds would do this only in
seeking to avoid losses, it could have the effect of reducing the benefit from
any upswing in the market.

2
<PAGE>

Principal Risks

Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you and the more you can lose. Since shares
of a Fund represent an investment of securities with fluctuating market prices,
the value of Fund shares will vary as each Fund's portfolio securities increase
or decrease in value. Therefore, the value of an investment in a Fund could go
down as well as up. All investments are subject to:

. MARKET RISK

. SECURITIES SELECTION RISK

There is the possibility that the specific securities held in a Fund's
portfolio will underperform other funds in the same asset class or
benchmarks that are representative of the general performance of the asset
class because of the portfolio manager's choice of securities.

. PRICE VOLATILITY

Each Fund may also be subject (in varying degrees) to the following risks:

. LIQUIDITY RISK

There is the possibility that a Fund may lose money or be prevented from
earning capital gains if it cannot sell a security at the time and price
that is most beneficial to the Fund. The Earnings Momentum, Aggressive
Growth Equities, Small Cap Growth, Small Cap Value, and Value Opportunities
Funds are subject to liquidity risk because they invest primarily in
securities of small or medium sized companies. The Convertible Securities
Fund is subject to liquidity risk because it may invest in lower quality
securities.

3
<PAGE>

. FOREIGN INVESTING RISK

There is the likelihood that foreign investments may be riskier than U.S.
investments because of a lack of political stability, foreign controls on
investment and currency exchange rates, fluctuations in currency exchange
rates, withholding taxes, and lack of adequate company information. Each
Fund is subject to foreign investing risk because it may invest in foreign
company securities. In addition, because foreign securities generally are
denominated and pay dividends or interest in foreign currencies, and each
Fund may hold various foreign currencies, the value of the net assets of
these Funds as measured in U.S. dollars can be affected favorably or
unfavorably by changes in exchange rates.

. JUNK BONDS

These bonds are speculative in nature. They are usually issued by companies
without long track records of sales and earnings, or by those companies with
questionable credit strength. The Convertible Securities Fund's portfolio
consists, at times, primarily of below investment grade corporate
securities.

Each Fund may be more susceptible to some of the risks discussed on the
previous page than others, as noted in the description of each Fund. A more
detailed explanation of these risks is presented under the "Risk
Considerations" section at page 32.

Because each Fund is non-diversified for Investment Company Act of 1940 ("1940
Act") purposes, it may invest more than 5% of its total assets in the
securities of any one issuer. Consequently, its exposure to credit and market
risks associated with that issuer is increased.

Your investment is not a bank deposit, and it is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.

4
<PAGE>

Performance Summary

The two tables below show each Fund's annual returns and its long-term
performance with respect to its Institutional Class shares. The first table
shows you how the Fund's performance has varied from year to year. The second
compares the Fund's performance over time to that of a broad-based securities
index. Both tables assume reinvestment of dividends and distributions. The
performance information includes performance of the predecessor limited
partnership of each Fund which were managed by an affiliate of TCW Funds
Management, Inc., using the same investment strategy as the Funds'. The
performance of the partnerships were calculated using performance standards
applicable to private investment partnerships, which take into account all
elements of total return and reflect the deduction of all fees and expenses of
operation. The predecessor limited partnerships were not registered under the
1940 Act and, therefore, were not subject to certain investment restrictions
imposed by the 1940 Act. If the limited partnerships had been registered under
the 1940 Act and Subchapter M of the Internal Revenue Code of 1986, as amended
their performance might have been adversely affected. As with all mutual funds,
past performance is not a prediction of future results.

Year by year total return (%)
as of December 31 each year*

TCW Galileo Convertible Securities Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16.22% -6.09% 33.28% 14.57% 20.10% -6.71% 22.61% 15.02% 19.26% 12.52%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 11.1%

TCW Galileo Select Equities Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
15.41% 10.85% 22.93% -7.04% 26.45% 20.58% 22.70% 37.97%

1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 16.2%

TCW Galileo Earnings Momentum Fund

<TABLE>
<S> <C> <C> <C> <C> <C>
23.95% -5.70% 26.43% 10.56% 9.94% 7.45%

1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 27.5%

TCW Galileo Large Cap Growth Fund

<TABLE>
<S> <C>
8.70% 59.15%

1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 23.2%

5
<PAGE>

TCW Galileo Large Cap Value Fund

18.99%

1998

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 8.4%

TCW Galileo Aggressive Growth Equities Fund

<TABLE>
<S> <C> <C> <C>
60.66% 12.38% 12.65% 63.30%

1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 43.6%

TCW Galileo Small Cap Growth Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-11.49% 81.09% 2.74% 13.06% -4.38% 64.29% 17.63% 14.37% 20.26%

1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 31.3%

TCW Galileo Value Opportunities Fund

<TABLE>
<S> <C> <C>
8.50% 17.10% 0.30%

1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 8.5%

6
<PAGE>

Best and worst quarterly performance during this period

<TABLE>
<CAPTION>
Fund Performance
- ---------------------------------------------------------------------------
<S> <C>
. Convertible Securities Fund
Quarter ending December 31, 1998 15.30% (Best)
Quarter ending September 30, 1998 -10.34% (Worst)
- ---------------------------------------------------------------------------
. Select Equities Fund
Quarter ending December 31, 1998 24.30% (Best)
Quarter ending September 30, 1998 -6.62% (Worst)
- ---------------------------------------------------------------------------
. Earnings Momentum Fund
Quarter ending June 30, 1997 29.40% (Best)
Quarter ending September 30, 1998 -24.71% (Worst)
- ---------------------------------------------------------------------------
. Large Cap Growth Fund
Quarter ending December 31, 1998 29.50% (Best)
Quarter ending September 30, 1998 -3.81% (Worst)
- ---------------------------------------------------------------------------
. Large Cap Value Fund
Quarter ending December 31, 1998 20.90% (Best)
Quarter ending September 30, 1998 -10.46% (Worst)
- ---------------------------------------------------------------------------
. Aggressive Growth Equities Fund
Quarter ending December 31, 1998 47.80% (Best)
Quarter ending March 31, 1997 -12.10% (Worst)
- ---------------------------------------------------------------------------
. Small Cap Growth Fund
Quarter ending December 31, 1998 31.40% (Best)
Quarter ending September 30, 1998 -22.30% (Worst)
- ---------------------------------------------------------------------------
. Value Opportunities Fund
Quarter ending December 31, 1998 28.60% (Best)
Quarter ending September 30, 1998 -21.00% (Worst)

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Average annual total return as of
December 31 1 year 5 years Since inception
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>

. Convertible Securities Fund 12.5% 12.0% 13.5%
- ---------------------------------------------------------------------------
First Boston Convertible Securities Index 6.5% 10.8% 12.3%
- ----------------------------------------------------------------------------
. Select Equities Fund 38.0% 19.1% 19.4%
- ----------------------------------------------------------------------------
S&P 500 28.6% 24.1% 20.2%
- ----------------------------------------------------------------------------
. Earnings Momentum Fund 7.5% 9.3% 12.3%
- ----------------------------------------------------------------------------
Russell 2000 Index -2.6% 11.6% 13.5%
- ----------------------------------------------------------------------------
. Large Cap Growth Fund 59.2% N/A 43.0%
- ----------------------------------------------------------------------------
S&P/BARRA Growth Index 42.2% N/A 33.7%
- ----------------------------------------------------------------------------
. Large Cap Value Fund 19.0% N/A 18.4%
- ----------------------------------------------------------------------------
S&P/BARRA Value Index 14.7% N/A 15.8%
- ----------------------------------------------------------------------------
. Aggressive Growth Fund 63.3% N/A 34.2%
- ----------------------------------------------------------------------------
S&P 400 Mid-Cap 19.1% N/A 23.2%
- ----------------------------------------------------------------------------
. Small Cap Growth Fund 20.3% 20.5% 19.2%
- ----------------------------------------------------------------------------
Russell 2000 Index -2.6% 11.9% 12.5%
- ----------------------------------------------------------------------------
. Value Opportunities Fund 0.3% N/A 11.8%
- ----------------------------------------------------------------------------
Wilshire Mid-Cap 750 4.3% N/A 15.4%
</TABLE>

8
<PAGE>

Fund Expenses and Expense Example

As an investor, you pay certain fees and expenses in connection with the Funds,
which are described in the table below. Annual Fund operating expenses are paid
out of Fund assets, so their effect is included in the share price. The
Institutional Class shares of the Funds have no sales charge (load) or Rule
12b-1 distribution fees.

FEE TABLE

<TABLE>
<CAPTION>
Large Large Aggressive Small Small Value
Convertible Select Earnings Cap Cap Growth Cap Cap Oppor-
Securities Equities Momentum Growth Value Equities Growth Value tunities
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Fees
1) Redemption Fees...... None None None None None None None None None
2) Exchange Fees........ None None None None None None None None None
3) Contingent Deferred
Sales Load........... None None None None None None None None None
4) Sales Load on
Reinvested
Dividends............ None None None None None None None None None
5) Sales Load on
Purchases............ None None None None None None None None None

Annual Fund Operating Expenses
Management Fees........ 0.75% 0.75% 1.00% 0.55% 0.55% 1.00% 1.00% 1.00% 0.80%
Distribution (12b-1)
Fees None None None None None None None None None
Other Expenses......... 0.41% 0.11% 0.27% 1.98% 1.93% 0.17% 0.13% 0.20% 0.36%
--------------------------------------------------------------------------------------
Total Annual Fund
Operating Expenses... 1.16%/1/ 0.86% 1.27% 2.53%/2/ 2.48%/3/ 1.17% 1.13% 1.20%/4/ 1.16%
</TABLE>

/1/The Adviser voluntarily agreed to reduce its fee or to pay the operating ex-
penses of the Fund to reduce Annual Fund Operating Expenses to 1.05% of Net As-
sets through October 31, 1998.
/2/The Adviser voluntarily agreed to reduce its fee or to pay the operating ex-
penses of the Fund to reduce Annual Fund Operating Expenses to 0.91% of Net As-
sets through October 31, 1998.
/3/The Adviser voluntarily agreed to reduce its fee or to pay the operating ex-
penses of the Fund to reduce Annual Fund Operating Expenses to 0.55% of Net As-
sets through October 31, 1998.
/4/Estimated. Fund has no operating history.

9
<PAGE>

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 Initial
Investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether or not you sold your shares at the end of a
period. Because actual return and expenses will be higher or lower, the Example
is for comparison purposes only.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
--------------------------------------
<S> <C> <C> <C> <C>
Convertible Securities.......................... $118 $368 $638 $1,409
Select Equities................................. 88 274 477 1,061
Earnings Momentum............................... 129 403 697 1,534
Large Cap Growth................................ 256 788 1,345 2,866
Large Cap Value................................. 251 773 1,321 2,816
Aggressive Growth Equities...................... 119 372 644 1,420
Small Cap Growth................................ 115 359 622 1,375
Small Cap Value................................. 122 381 660 1,455
Value Opportunities............................. 118 368 638 1,409
</TABLE>

10
<PAGE>

TCW Galileo Convertible Securities Fund

Investment Objectives/Approach

The Fund seeks high total return from current income and capital appreciation.
To pursue this goal, the Fund (except when maintaining a temporary defensive
position) invests at least 65% of the value of its total assets in convertible
securities.

In managing the Fund's investments, the Adviser considers the following factors
when determining which securities to select:

Concepts to understand . the Adviser's own evaluations of the
- ---------------------- creditworthiness of the issuers of the
Convertible securities are securities
corporate securities that are
exchangeable for a set number of . the interest or dividend income
another form of security at a generated by the securities
prestated price. They can be in
the form of equity or debt. . the potential for capital appreciation
of the securities and the underlying
The Fund anticipates that it will common stocks
primarily invest in convertible
securities that have a credit . the protection against price declines
rating of at least B- or B3 by relative to the underlying common
rating agencies such as Moody's stocks
Investors Service, Inc. or
Standard & Poor's Corporation or . the prices of the securities relative
if unrated are deemed of to other comparable securities
comparable quality by the
Adviser. These securities are . whether the securities have protective
considered to be mostly conditions
speculative in nature.
. the diversification of the Fund's
investments

. the ratings assigned to the securities

Thomas D. Lyon and Kevin A. Hunter
are the Fund's portfolio managers.

11
<PAGE>

Main Risks

The Fund holds primarily convertible securities, which may go up or down in
value, in accordance with moves in the convertible securities' underlying
stock, sometimes rapidly and unpredictably. Although stocks offer the potential
for greater long-term growth than most fixed income securities, stocks
generally have higher short-term volatility.

The primary risks affecting this Fund are "credit risk," "interest rate risk,"
"liquidity risk" and, to a lesser extent, "foreign investing risk."

Credit risk refers to the likelihood that the Fund could lose money if an
issuer is unable to meet its financial obligations, such as the payment of
principal and/or interest on an instrument, or goes bankrupt. This Fund may be
subject to greater credit risk, because it invests in convertible debt
securities that are below investment grade. Debt securities that are rated
below investment grade are considered to be speculative. These securities rated
below investment grade are also commonly known as "junk" bonds. This is
especially true during periods of economic uncertainty or during economic
downturns. Below investment grade securities are often issued by companies
without long track records of sales and earnings, or by those companies with
questionable credit strength. In the event of a prepayment problem by the
issuer of these securities, they will only be paid if there is anything left
after the payment of senior debt, such as bank loans and investment grade
bonds. Interest rate risk refers to the possibility that the value of the
Fund's portfolio investments may fall since fixed income securities generally
fall in value when interest rates rise. The longer the term of a fixed income
instrument, the more sensitive it will be to fluctuations in value from
interest rate changes. Liquidity risk refers to the possibility that the Fund
may lose money or be prevented from earning capital gains if it cannot sell a
security at the time and price that is most beneficial to the Fund. Because
lower quality securities may be less liquid than higher quality securities, the
Fund may be more susceptible to liquidity risk than funds that invest in higher
quality securities. A security whose credit rating has been lowered may be
particularly difficult to sell. Because the Fund may invest a portion of its
assets in securities issued by foreign companies, it may be subject to foreign
investing risks. Foreign investing risk refers to the likelihood that foreign
investments may be riskier than U.S. investments because of many factors, some
of which include:

. a lack of political or economic stability

. foreign controls on investment and changes in currency exchange rates

. withholding taxes

. a lack of adequate company information

12
<PAGE>

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

13
<PAGE>

TCW Galileo Select Equities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. Performance should be measured
over a full market cycle.

Concepts to understand To pursue this goal, the Fund invests
- ---------------------- primarily in the common stocks of larger
Large capitalization companies companies. The investment philosophy
are established companies that underlying our strategy is a highly
are considered known quantities. focused approach which seeks to achieve
Large companies often have the superior long-term returns by owning
resources to weather economic shares in companies that are believed to
shifts, though they can be slower have strong and enduring business models
to innovate than small companies. and inherent advantages over their
competitors. Except when maintaining a
temporary defensive position, the Fund
anticipates that at least 65% of the
value of its total assets will be
invested in equity securities of these
companies. In implementing its investment
policy, the Fund may purchase and sell
convertible securities and foreign
securities.

Glen A. Bickerstaff is the Fund's portfo-
lio manager.

14
<PAGE>

Main Risks

The Fund holds primarily stocks, which may go up or down in value, sometimes
rapidly and unpredictably. Although stocks offer the potential for greater
long-term growth than most fixed income securities, stocks generally have
higher short-term volatility. In addition, the Fund may hold convertible debt
securities. Many convertible debt securities are rated below investment grade
and are considered speculative by rating agencies as to repayment of principal
and interest.

The primary risks affecting this Fund are "price volatility" and "foreign
investing risk." Price volatility refers to the possibility that the value of
the Fund's portfolio will change as the prices of its investments go up or
down. Although the Fund is subject to price volatility because of its stock
investments, it is subject to less price volatility than funds that invest in
the securities of smaller companies. Because the Fund may invest a portion of
its assets in securities issued by foreign companies, it may be subject to
foreign investing risks. Foreign investing risk refers to the likelihood that
foreign investments may be riskier than U.S. investments because of many
factors, some of which include:

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

In addition, securities traded only through foreign markets may be more
volatile and are often harder to sell. Volatility is a way to measure the
changes in the price of a single security or an entire portfolio. Large and
frequent price changes indicate higher volatility, which generally indicates
that there is a greater chance you could lose money over the short-term. The
Fund is also subject to foreign currency risk. Because foreign securities are
generally denominated and pay dividends or interest in foreign currencies, the
value of the net assets of the Fund as measured in U.S. dollars will be
affected favorably or unfavorably by changes in exchange rates.

The Fund may invest some assets in options, futures and foreign currency
futures and forward contracts. These practices are used primarily to hedge the
Fund's portfolio but may be used to increase returns; however, such practices
sometimes may reduce returns or increase volatility.

15
<PAGE>

extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

16
<PAGE>

TCW Galileo Earnings Momentum Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, the Fund
invests primarily in equity securities of companies experiencing or expected to
experience accelerating earnings growth. The Fund will invest primarily in
common stocks, but may also invest in convertible securities, warrants, options
and foreign securities.

Concepts to understand The Adviser uses a "bottom-up" approach
- ---------------------- to identify industries or companies that
Earnings acceleration is the are experiencing or expected to
pattern of increasing rate of experience an acceleration in earnings
growth in a company or industry growth. It monitors the following changes
is typically triggered by a in an attempt to identify these
change that causes fundamentals companies:
to improve.
. changes in general economic, political
or demographic trends

. development of new products or
technology

. changes in consumer attitudes

. changes in a company's competitive
advantage

. changes in the way a company is
operated or valued

Richard C. Farra, Charles Larsen and Lisa
Zeller are the Fund's portfolio managers.

17
<PAGE>

Main Risks

The primary risks affecting this Fund are "price volatility," "liquidity risk"
and "foreign investing risk." Price volatility refers to the possibility that
the value of the Fund's portfolio will change as the prices of its investments
go up or down. This Fund may be subject to greater price volatility than funds
that invest in the securities of large companies. Liquidity risk refers to the
possibility that the Fund may lose money or be prevented from earning capital
gains if it cannot sell securities at the time and price that is most
beneficial to the Fund. Because the securities of small-sized companies may be
less liquid than the securities of large-sized companies, the Fund may be more
susceptible to liquidity risk than funds that invest in the securities of
large-sized companies. Because the Fund may invest a portion of its assets in
securities issued by foreign companies, it may be subject to foreign investing
risks. Foreign investing risk refers to the likelihood that foreign investments
may be riskier than U.S. investments because of many factors, some of which
include:

. a lack of political or economic stability

. foreign controls on investment and currency exchange rates

. withholding taxes

. a lack of adequate company information

In addition, securities traded only through foreign markets may be more
volatile and are often harder to sell. Volatility is a way to measure the
changes in the price of a single security or an entire portfolio. Large and
frequent price changes include higher volatility, which generally indicates
that there is a greater chance you could lose money over the short term. The
Fund is also subject to foreign currency risk. Because foreign securities are
generally denominated and pay dividends or interest in foreign currencies, the
value of the net assets of the Fund as measured in U.S. dollars will be
affected favorably or unfavorably by changes in exchange rates.

The Fund may invest some assets in options. This practice is used primarily to
hedge the Fund's portfolio but it may be used to increase returns; however,
this practice sometimes may reduce returns or increase volatility.

18
<PAGE>

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realize gains, for investors.

19
<PAGE>

TCW Galileo Large Cap Growth Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, the Fund
invests primarily in equity securities of large capitalization U.S. companies
with above-average earnings prospects. It will invest (except when maintaining
a temporary defensive position) at least 65% of the value of its total assets
in companies with a market capitalization of greater than $3 billion at the
time of purchase.

Concepts to understand In managing the Fund's investments, the
- ---------------------- Adviser seeks to invest in companies that
Large capitalization companies will have reported earnings that exceed
are established companies that analysts' expectations (i.e., potential
are considered known quantities. for earnings surprises). The Adviser
Large capitalization companies utilizes "bottom-up" fundamental research
often have the resources to to identify these companies. The Adviser
weather economic shifts, although performs fundamental research by using
they can be slower to innovate techniques such as:
than small companies.
. making company visits
Growth companies are companies
exhibiting faster than average . attending industry conferences
gains in earnings and which are
expected to continue to show high . maintaining communication with company
levels of growth gain. management

The Adviser then uses the information
that it has obtained from its fundamental
research to analyze the company's long-
term growth potential, future earnings
and cash flow.

The Adviser uses quantitative and
qualitative screening criteria to
determine which companies to subject to
its fundamental analysis.

Wendy S. Barker and Douglas S. Foreman
are the Fund's portfolio managers.

20
<PAGE>

Main Risks

The primary risk affecting this Fund is "price volatility." Price volatility
refers to the possibility that the value of the Fund's portfolio will change as
the prices of its investments go up or down. This Fund may be less susceptible
to price volatility risk because it invests in the securities of large
companies. This is especially true during periods of economic uncertainty or
during economic downturns.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

21
<PAGE>

TCW Galileo Large Cap Value Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, the Fund
invests primarily in equity securities of large capitalization companies. The
securities include common and preferred stock and convertible securities. The
Fund will invest (except when maintaining a temporary defensive position) at
least 65% of the value its total assets in publicly traded equity securities of
companies with a market capitalization of greater than $3 billion at the time
of purchase. The Fund will invest mostly in "value companies."

Concepts to understand In managing the Fund's investments, the
- ---------------------- Adviser seeks to invest in attractively
Large capitalization companies valued equity securities of companies
are established companies that where the return on invested capital is
are considered known quantities. improving. The Adviser utilizes bottom-up
Large capitalization companies fundamental research to identify these
often have the resources to companies. The Adviser performs
weather economic shifts, although fundamental research by using techniques
they can be slower to innovate such as:
than small companies.

. making company visits

Value companies are companies . financial screening to identify
that appear underpriced according companies
to certain financial measurements
of their intrinsic worth or
business prospects (such as
price-to-earnings or price-to-
book ratios). Because a stock can
remain undervalued for years,
value investors often look for
factors that could trigger a rise
in price.

. maintaining a disciplined approach to
stock selection and portfolio
construction

The Adviser will use both quantitative
and qualitative screening criteria to
supplement the scope of fundamental
research.

Thomas K. McKissick is the Fund's
portfolio manager.

22
<PAGE>

Main Risks

The primary risk affecting this Fund is "price volatility." Price volatility
refers to the possibility that the value of the Fund's portfolio will change as
the prices of its investments go up or down. This Fund may be less susceptible
to price volatility than funds that invest in the securities of small
companies. This is especially true during periods of economic uncertainty or
during economic downturns.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased gains, for investors.

23
<PAGE>

TCW Galileo Aggressive Growth Equities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, the Fund
anticipates that at least 65% of the value of its total assets will be invested
(except when maintaining a temporary defensive position) in equity securities
in issuers which are characterized as "growth" companies according to criteria
established by the Adviser. These securities include common and preferred stock
and convertible securities. In managing the Fund's investments, the Adviser
will focus on emerging companies that exhibit this characteristic.

Concepts to understand The Adviser utilizes a "bottom-up"
- ---------------------- approach to identify securities for
Emerging growth companies are investment. First, the Adviser uses
companies that are likely to show quantitative and qualitative criteria to
rapid growth through reinventing screen companies. The Adviser then
an existing industry or subjects companies that make it through
pioneering a new industry. this screening process to fundamental
analysis, which generally looks for at
least some of the following factors:

. a demonstrated record of consistent
earnings growth or the potential to
grow earnings

. an ability to earn an attractive return
on equity

. a price/earnings ratio which is less
than the Adviser's internally estimated
three-year earnings growth rate

. a large and growing market share

. a strong balance sheet

. significant ownership interest by
management and a strong management
team.

Christopher J. Ainley and
Douglas S. Foreman are the Fund's
portfolio managers.

24
<PAGE>

Main Risks

The primary risks affecting this Fund are "price volatility" and "liquidity
risk." Price volatility refers to the possibility that the value of the Fund's
portfolio will change as the prices of its investments go up or down. This Fund
may be subject to greater price volatility than funds that invest in the
securities of larger companies. Liquidity risk refers to the possibility that
the Fund may lose money or be prevented from earning capital gains if it cannot
sell securities at the time and price that is most beneficial to the Fund.
Because the securities of medium-sized companies may be less liquid than the
securities of large-sized companies, the Fund may be susceptible to liquidity
risk more than funds that invest in the securities of large-sized companies. In
addition, the Fund may be subject to liquidity risk because it may invest in
debt instruments rated below investment grade.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

25
<PAGE>

TCW Galileo Small Cap Growth Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
(except when maintaining a temporary defensive position) at least 65% of the
value of its total assets in equity securities issued by companies with market
capitalizations, at the time of acquisition, within the capitalization range of
the companies comprising the Standard & Poor's Small Cap 600 Index.

Concepts to understand In managing the Fund's investments, the
- ---------------------- Adviser pursues a small cap growth
Small-Sized Companies seek long investment philosophy. That philosophy
term capital appreciation by consists of fundamental company-by-
focusing on small, fast-growing company analysis used in conjunction with
companies that offer cutting-edge technical and quantitative market
products, services or analysis to screen potential investments
technologies. Because these and to continuously monitor securities in
companies are often in their the Fund's portfolio.
early stages of development,
their stocks tend to fluctuate
more than most other securities.

Douglas S. Foreman, Christopher J.
Ainley, Nicholas J. Capuano and Charles
Larsen are the Fund's portfolio managers.

26
<PAGE>

Main Risks

The primary risks affecting this Fund are "price volatility" and "liquidity
risk." Price volatility refers to the possibility that the value of the Fund's
portfolio will change as the prices of its investments go up or down. This Fund
may be subject to greater price volatility than funds that invest in the
securities of large or midcap companies. Liquidity risk refers to the
possibility that the Fund may lose money or be prevented from earning capital
gains if it cannot sell securities at the time and price that is most
beneficial to the Fund. Because the securities of small-size companies may be
less liquid than the securities of large-size companies, the Fund may be more
susceptible to liquidity risk than funds that invest in the securities of
large-sized companies.

The Fund may invest some assets in options. This practice is used primarily to
hedge the Fund's portfolio but may be used to increase returns; however, such
practice sometimes may reduce returns or increase volatility.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

27
<PAGE>

TCW Galileo Small Cap Value Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
(except when maintaining a temporary defensive position) at least 65% of the
value of its total assets in equity securities issued by value companies with
market capitalizations, at the time of acquisition, within the range of the
companies comprising the Standard & Poor's Small Cap 600 Index. These
securities include common and preferred stocks, rights or warrants to purchase
common or preferred stock and convertible securities.

Concepts to understand In managing the Fund's investments, the
- ---------------------- Adviser looks to invest the Fund's assets
Undervalued Assets: When a in the equity securities of companies
company's securities are selling that:
below probable liquidation
values, net working capital or
tangible book value.

. have undervalued assets or undervalued
growth potential

Undervalued Growth Potential: . are in a turnaround situation
When a company has a strong
potential growth rate and a
strong balance sheet but has
securities selling at a market
multiple (based on normalized
earnings) and/or a price earnings
multiple at a discount to its
peer group of companies.

. are emerging growth companies

The Adviser performs fundamental analysis
on each company. This includes a review
of available financial and other business
information, company visits and
management interviews.

Nicholas F. Gallucio, Susan I.
Schottenfeld and Tyler D. Davis are the
Fund's portfolio managers.

Turnaround Situation: When a
company has a sound balance sheet
but has securities that are
selling at a significant market
discount to the Adviser's
estimate of the company's 24
month sustainable earnings.

Emerging Growth Company: When a
company has the potential for a
significant annual growth rate, a
proprietary product and/or pre-
eminent market position, with a
price/earnings multiple of
generally not more than half the
expected growth rate.

28
<PAGE>

Main Risks

The primary risks affecting this Fund are "price volatility" and "liquidity
risk." Price volatility refers to the possibility that the value of the Fund's
portfolio will change as the prices of its investments go up or down. This Fund
may be subject to greater price volatility than funds that invest in the
securities of large companies. Liquidity risk refers to the possibility that
the Fund may lose money or be prevented from earning capital gains if it cannot
sell securities at the time and price that is most beneficial to the Fund.
Because the securities of small-size companies may be less liquid than the
securities of large-size companies, the Fund may be susceptible to liquidity
risk more than funds that invest in the securities of large-sized companies.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

29
<PAGE>

TCW Galileo Value Opportunities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, the Fund
invests (except when maintaining a temporary defensive position) at least 65%
of the value of its total assets in equity securities of companies with market
capitalizations between $500 million and $5 billion. These equity securities
include common and preferred stocks, rights or warrants to purchase common
stock and convertible securities.

. have undervalued assets

. have undervalued growth potential

. are in a turnaround situation

Undervalued Growth Potential: . are emerging growth companies
When a company has a strong
potential growth rate and a
strong balance sheet but has
securities selling at less than a
market multiple (based on
normalized earnings) and/or a
price earnings multiple at a
discount to its peer group of
companies.

The Adviser also utilizes fundamental
analysis on each company. This includes a
review of available financial
information, company visits and
management interviews.

Nicholas F. Gallucio, Susan I.
Schottenfeld and Tyler D. Davis are the
Fund's portfolio managers.

30
<PAGE>

Main Risks

The primary risks affecting this Fund are "price volatility" and "liquidity
risk." Price volatility refers to the possibility that the value of the Fund's
portfolio will change as the prices of its investments go up or down. This Fund
may be subject to greater price volatility than funds that invest in the
securities of large companies. Liquidity risk refers to the possibility that
the Fund may lose money or be prevented from earning capital gains if it cannot
sell securities at the time and price that is most beneficial to the Fund.
Because the securities of small-size companies may be less liquid than the
securities of large-size companies, the Fund may be susceptible to liquidity
risk more than funds that invest in the securities of large-sized companies.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

31
<PAGE>

Risk Considerations

Please consider the following risks before investing in a Fund.

Various market risks can affect the price or liquidity of an issuer's
securities. Adverse events occurring with respect to an issuer's performance or
financial position can depress the value of the issuer's securities. The
liquidity in a market for a particular security will affect its value and may
be affected by factors relating to the issuer, as well as the depth of the
market for that security. Other market risks that can affect value include a
market's current attitudes about types of securities, market reactions to
political or economic events, and tax and regulatory effects (including lack of
adequate regulations for a market or particular type of instrument). Market
restrictions on trading volume can also affect price and liquidity.

General Investment Risk Prices of many securities tend to be more
- ----------------------- volatile in the short-term. Therefore an
Since shares of a Fund represent investor who trades frequently or redeems
an investment in securities with in the short-term is more likely to incur
fluctuating market prices, the loss than an investor who holds
value of Fund shares will vary as investments for the longer term. The
the value of each Fund's fewer the number of issuers in which a
portfolio securities increases or Fund invests, the greater the potential
decreases. Therefore, the value volatility of its portfolio.
of an investment in a Fund could
go down as well as up.

The Adviser may temporarily invest up to
100% of a Fund's assets in high quality,
short-term money market instruments if it
believes adverse economic or market
conditions, such as excessive volatility
or sharp market declines, justify taking
a defensive investment posture. If a Fund
attempts to limit investment risk by
temporarily taking a defensive investment
position, it may be unable to pursue its
investment objective during that time,
and it may miss out on some or all of an
upswing in the securities markets.

32
<PAGE>

Investment in foreign securities involves special risks in addition to the
usual risks inherent in domestic investments. These include: political or
economic instability; the unpredictability of international trade patterns; the
possibility of foreign governmental actions such as expropriation,
nationalization or confiscatory taxation; the imposition or modification of
foreign currency or foreign investment controls; the imposition of withholding
taxes on dividends, interest and gains; price volatility; and fluctuations in
currency exchange rates.

Foreign Investing As compared to U.S. companies, foreign
- ----------------- issuers generally disclose less financial
and other information publicly and are
subject to less stringent and less
uniform accounting, auditing and
financial reporting standards. Foreign
countries typically impose less thorough
regulations on brokers, dealers, stock
exchanges, insiders and listed companies
than does the U.S., and foreign
securities markets may be less liquid and
more volatile than domestic markets.
Investment in foreign securities involves
higher costs than investment in U.S.
securities, including higher transaction
and custody costs as well as the
imposition of additional taxes by foreign
governments. In addition, security
trading practices abroad may offer less
protection to investors such as the
Funds. Settlement of transactions in some
foreign markets may be delayed or may be
less frequent than in the U.S., which
could affect the liquidity of each Fund's
portfolio. Also, it may be more difficult
to obtain and enforce legal judgments
against foreign corporate issuers than
against domestic issuers and it may be
impossible to obtain and enforce
judgments against foreign governmental
issuers.

Because foreign securities generally are
denominated and pay dividends or interest
in foreign currencies, and some of the
Funds hold various foreign currencies
from time to time, the value of the net

33
<PAGE>

assets of those Funds as measured in United States dollars will be affected
favorably or unfavorably by changes in exchange rates. Generally, currency
exchange transactions will be conducted on a spot (i.e., cash) basis at the
spot rate prevailing in the currency exchange market. The cost of currency
exchange transactions will generally be the difference between the bid and
offer spot rate of the currency being purchased or sold. In order to protect
against uncertainty in the level of future foreign currency exchange rates,
certain of the Funds are authorized to enter into certain foreign currency
futures and forward contracts. However, a Fund is not obligated to do so and,
depending on the availability and cost of these services, the Fund may be
unable to use foreign currency futures and forward contracts to protect against
currency uncertainty. Please see the Statement of Additional Information for
further information.

The forward currency market for the purchase or sale of U.S. dollars in most
countries is not highly developed, and in certain countries, there may be no
such market. If a devaluation of a currency is generally anticipated, a Fund
may not be able to contract to sell the currency at an exchange rate more
advantageous than that which would prevail after the anticipated amount of
devaluation, particularly in regards to forward contracts for local Latin
American currencies in view of the relatively small, inactive or even non-
existent market for these contracts. In the event the Funds hold securities
denominated in a currency that suffers a devaluation, the Funds' net asset
values will suffer corresponding reductions. In this regard, in December 1994,
the Mexican government determined to allow the Mexican peso to trade freely
against the U.S. dollar rather than within a controlled band, which action
resulted in a significant devaluation of the Mexican peso against the dollar.
Further, in July 1997, the Thai and Philippine governments allowed the baht and
peso, respectively, to trade freely against the U.S. dollar resulting in a
sharp devaluation of both currencies, and in 1998 Russia did the same, causing
a sharp devaluation of the ruble.

34
<PAGE>

Fixed Income securities are subject to various risks. The two primary (but not
exclusive) risks affecting fixed income instruments are "credit risk" and
"interest rate risk." These risks can affect a security's price volatility to
varying degrees, depending upon the nature of the instrument. In addition, the
depth and liquidity of the market for an individual or class of fixed income
security can also affect its price and, hence, the market value of a Fund.

Fixed Income Securities "Credit risk" refers to the likelihood
- ----------------------- that an issuer will default in the
payment of principal and/or interest on
an instrument. Financial strength and
solvency of an issuer are the primary
factors influencing credit risk. In
addition, lack of or inadequacy of
collateral or credit enhancements for a
fixed income security may affect its
credit risk. Credit risk of a security
may change over its life, and securities
which are rated by rating agencies are
often reviewed and may be subject to
downgrade.

Each Galileo Equity Fund may invest in
convertible securities rated below
investment grade. Debt securities that
are rated below investment grade are
considered to be speculative. Those
securities rated below investment grade
are also commonly known as "junk" bonds.
Generally, lower-rated debt securities
provide a higher yield than higher rated
debt securities of similar maturity but
are subject to greater credit risk than
higher rated securities of similar
maturity. Such securities are regarded as
predominantly speculative with respect to
the issuer's continuing ability to meet
principal and interest payments. Because
investment in lower quality securities
involves greater investment risk,
achievement of a Fund's investment
objective will be more dependent on the
Adviser's analysis than would be the case
if the Fund were investing in higher
quality bonds. In addition, lower quality

35
<PAGE>

securities may be more susceptible to real or perceived adverse economic and
individual corporate developments than would investment grade bonds. Moreover,
the secondary trading market for lower quality securities may be less liquid
than the market for investment grade bonds. This potential lack of liquidity
may make it more difficult for the Adviser to value accurately certain
portfolio securities.

"Interest rate risk" refers to the risks associated with market changes in
interest rates. Interest rate changes may affect the value of a fixed income
security directly (especially in the case of fixed rate securities) and
indirectly (especially in the case of adjustable rate securities). In general,
rises in interest rates will negatively impact the price of fixed rate
securities and falling interest rates will have a positive effect on price. The
degree to which a security's price will change as a result of changes in
interest rates is measured by its "duration." For example, the price of a bond
with a 5 year duration would be expected under normal market conditions to
decrease 5% for every 1% increase in interest rates. Generally, securities with
longer maturities have a greater duration and thus are subject to greater price
volatility from changes in interest rates. Adjustable rate instruments also
react to interest rate changes in a similar manner although generally to a
lesser degree (depending, however, on the characteristics of the reset terms,
including the index chosen, frequency of reset and reset caps or floors, among
other things).

Each of the Galileo Equity Funds is non-diversified for 1940 Act purposes and
as such may invest a larger percentage of its assets in individual issuers than
a diversified investment company. In this regard, the Fund is not subject to
the general limitation that it not invest more than 5% of its total assets in
the securities of any one issuer. To the extent the Fund makes investments in

Non-Diversified Status excess of 5% of its assets in a
- ---------------------- particular issuer, its exposure to credit
and market risks associated with that
issuer is increased. However, each Fund's
investments will be limited so as to
qualify for the special tax treatment
afforded "regulated investment companies"
under the Internal Revenue Code of 1986,
as amended.

36
<PAGE>

The investment advisory and management services provided by the Adviser and the
services provided to shareholders by the Transfer Agent depend on the smooth
functioning of their computer systems. Many computer software systems in use
today cannot recognize the year 2000, but revert to 1900 or some other date,
due to the manner in which dates were encoded and calculated. That failure
could have a negative impact on the handling of securities trades, pricing and
account services. The Adviser and the Transfer Agent have been actively working
on necessary changes to their own computer systems to prepare for the year 2000
and expect that their systems will be adapted for year 2000 compliance before
that date, but there can be no assurance that they will be successful, or that
interaction with other non-complying computer systems will not impair their
services at that time. The Adviser has been, and is currently in contact with,
each of its external service providers to evaluate their readiness for the year
2000. The Adviser has requested each of its external service providers to
either; (i) prepare a description of its process for identifying date sensitive
areas, its approach for implementing changes and its testing methodology, along
with its timetable for completion, or (ii) certify as to its year 2000
compliance.

Year 2000 In addition, it is possible that the
- --------- markets for securities in which the Funds
invest may be negatively affected by
computer failures throughout the
financial services industry commencing
January 1, 2000. Improperly functioning
trading systems may result in settlement
problems. In addition, corporate and
governmental data processing errors may
result in production problems for
individual companies and create overall
economic uncertainties. Earnings of
individual issuers will be affected by
remediation costs which may be
substantial. Individual firms may further
experience disruptions to their business
due to the failure of their counterparts
to address year 2000 problems, or could
experience further disruption to the
economy at large, which could adversely
affect corporate earnings generally and
the value of their securities.
Accordingly, a Fund's portfolio
investments may be negatively affected.

37
<PAGE>

European Economic and Like other investment companies and
Monetary Union business organizations, including the
- -------------------- companies in which the Funds invest, the
Funds could be adversely affected: (i) if
the euro, or EMU as a whole does not take
affect; (ii) if a participating country
withdraws from EMU; or (iii) if the
computing, accounting and trading systems
used by the Funds' service providers, or
by other business entities with which the
Funds or their service providers do
business, are not capable of recognizing
the euro as a distinct currency at the
time of, and following euro conversion.

Management of the Funds

Investment Adviser

The Funds' investment adviser is TCW Funds Management, Inc. (the "Adviser") and
is headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles,
California 90017. As of December 31, 1998, the Adviser and its affiliated
companies, which provide a variety of trust, investment management and
investment advisory services, had over $50 billion under management or
committed for management.

38
<PAGE>

Portfolio Managers

<TABLE>
<CAPTION>
Portfolio Manager(s) Business Experience During Last Five Years*
- ---------------------------------------------------------------------------------------
<C> <S>
Christopher J. Ainley Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West. Prior to joining
TCW in 1994 he was a portfolio manager with Putnam
Investments.

Wendy S. Barker Senior Vice President, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Glen A. Bickerstaff Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West since May 1998.
Previously, he was senior portfolio manager and Vice
President of Transamerica Investment Services.

Nicholas J. Capuano Senior Vice President, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Tyler D. Davis Senior Vice President, the Adviser, TCW Asset Management
Company and Trust Company of the Trust since March 1998.
Previously a Director of Cowen Asset Management Company
(March 1996 to February 1998) and prior thereto a
Partner with Beck Mack & Oliver.

Richard C. Farra Senior Vice President, the Adviser, TCW Asset Management
Company and Trust Company of the West. Previously, he
was managing director of the Domestic Equity Group of
ARCO Investment Management Company, a subsidiary of
Atlantic Richfield Company (ARCO).

Douglas S. Foreman Group Managing Director and Chief Investment Officer-
U.S. Equities, the Adviser, TCW Asset Management Company
and Trust Company of the West since May 1994.
Previously, he was a portfolio manager with Putnam
Investments.

Nicholas F. Galluccio Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Kevin A. Hunter Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Charles Larsen Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Thomas D. Lyon Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West since November,
1997. Previously, he was Vice President--Portfolio
Management with Transamerica Investment Services.

Thomas K. McKissick Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Susan I. Schottenfeld Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West.

Lisa Zeller Senior Vice President, the Adviser, TCW Asset Management
Company and Trust Company of the West.
</TABLE>
*Positions with the TCW Group, Inc. and its affiliates may have changed over
time.

39
<PAGE>

Advisory Agreements

The Fund and the Adviser have entered into an Investment Advisory and
Management Agreement (the "Advisory Agreement"), under the terms of which the
Funds have employed the Adviser to manage the investment of their assets, to
place orders for the purchase and sale of their portfolio securities, and to be
responsible for overall management of the Funds' business affairs, subject to
control by the Board of Directors. The Adviser also pays certain costs of
marketing the Funds, including sales personnel compensation, from legitimate
profits from its investment advisory fees and other resources available to it.
In addition, the Adviser may reimburse third party administrators for
retirement plan shareholder servicing expenses. Under the Advisory Agreement,
the Funds pay to the Adviser as compensation for the services rendered,
facilities furnished, and expenses paid by it the following fees:

<TABLE>
<CAPTION>
Fund Annual Management Fee (As Percent of Average Net Asset Value)
- ---------------------------------------------------------------------------------------
<S> <C>
Convertible Securities 0.75%
Select Equities 0.75%
Earnings Momentum 1.00%
Large Cap Growth 0.55%
Large Cap Value 0.55%
Aggressive Growth
Equities 1.00%
Small Cap Growth 1.00%
Small Cap Value 1.00%
Value Opportunities Fund 0.80%
</TABLE>

The Advisory Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by a Fund in
connection with the matters to which the agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part
of the Adviser in the performance of its duties or from reckless disregard by
the Adviser of its duties under the agreement.

40
<PAGE>

Multiple Class Structure

Each Fund currently offers two classes of shares, Institutional Class shares
and Class N shares. Shares of each class of a Fund represent an equal pro rata
interest in that Fund and generally give you the same voting, dividend,
liquidation, and other rights. The Institutional Class shares are offered at
the current net asset value. The Class N shares are also offered at the current
net asset value, but will be subject to fees imposed under a distribution plan
("Distribution Plan") adopted pursuant to Rule 12b-1 under the 1940 Act.
Pursuant to the Distribution Plan, each Fund compensates the Funds' distributor
at a rate equal to 0.25% of the average daily net assets of the Fund
attributable to its Class N shares for distribution and related services.
Because these fees are paid out of the Fund's Class N assets on an on-going
basis, over time, these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

41
<PAGE>

Your Investment

Account Policies and Services

Buying shares

You pay no sales charges to invest in a Fund. Your price for Fund shares is the
Fund's net asset value per share (NAV) which is calculated as of the close of
trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) every
day the exchange is open. Your order will be priced at the next NAV calculated
after your order is accepted by the Fund. Orders received by a Fund's transfer
agent from dealers, brokers or other service providers after NAV for the day is
determined will receive that same day's NAV if the orders were received by the
dealers, brokers or service providers from their customers prior to 4:00 p.m.
and were transmitted to and received by the transfer agent prior to 8:00 a.m.
Eastern time on the next day. A Fund's investments are valued based on market
value, or where market quotations are not readily available, based on fair
value as determined in good faith by the Fund pursuant to procedures
established by the Fund's Board.

Minimums

The TCW Galileo Funds, Inc. may waive the minimum and subsequent investments.
All investments must be in U.S. dollars. Third-party checks, except those
payable to an existing shareholder, will normally not be accepted. If your
check or wire does not clear, you will be responsible for any loss a Fund
incurs.

Selling shares

You may sell shares at any time. Your shares will be sold at the next NAV
calculated after your order is accepted by the Fund's Transfer Agent. Any
certificates representing Fund shares being sold must be returned with your
redemption request. Your order will be processed promptly, and you will
generally receive the proceeds within a week.

Before selling recently purchased shares, please note that if the Fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to fifteen days.

42
<PAGE>

Written sell order

Some circumstances require written sell orders, along with signature
guarantees. These include:

. amounts of $100,000 or more

. amounts of $1,000 or more on accounts whose address has been changed within
the last 30 days

. requests to send the proceeds to a payee or address different than what is on
our records

A signature guarantee helps protect against fraud. You can obtain one from most
banks or securities dealers but not from a notary public. Please call
(800) 248-4486 to ensure that your signature guarantee will be processed
correctly.

Exchange privilege

Third Party Transactions

Account statements

Every Fund investor automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.

43
<PAGE>

General policies

For any Fund, if your account falls below $250,000 ($100,000 for Money Market
Fund) as a result of redemptions and or exchanges for six months or more, the
Fund may close your account and send you the proceeds upon 60 days' written
notice.

Each Fund restricts excessive trading
Large Redemption Amounts (usually defined as more than four
- ------------------------ exchanges out of the Fund within a
Each Fund also reserves the right calendar year). You are limited to one
to make a "redemption in kind"-- exchange of shares in the same Fund
payment in portfolio securities during any 15-day period except investors
rather than cash--if the amount in 401(k) and other group retirement
you are redeeming in any 90-day accounts, investors who purchase shares
period is large enough to affect through certain broker-dealers and asset
Fund operations ( for example, if allocation accounts managed by the
it equals more than $250,000 or Adviser or an affiliate. Each Fund
represents more than 1% of the reserves the right to:
Fund's assets).

. change or discontinue its exchange
privilege, or temporarily suspend this
privilege during unusual market
conditions

. delay sending out redemption proceeds
for up to seven days (generally applies
only in cases of very large
redemptions, excessive trading or
during unusual market conditions)

44
<PAGE>

<TABLE>
<CAPTION>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C>

In Writing

Complete the New Account
Form. Mail your New
Account Form and a check
made payable to TCW
Galileo____Fund to:
Regular Mail
TCW Galileo Funds, Inc. (Same, except that you should include a note specifying
DST Systems, Inc. the Fund name, your account number, and the name(s)
P.O. Box 419951 your account is registered in.)
Kansas City, MO 64141-6951

Express, Registered or
Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- -----------------------------------------------------------------------------------------------------------------
By Telephone

Please contact the Transfer Agent at
(800) 248-4486 for a New Account Form.

Wire: Have your bank send your investment to: (Same)

United Missouri Bank of Kansas City, N.A.
ABA No. 101000695
DST Systems, Inc./AC 9870371553
FBO TCW Galileo____Fund
(Name on the Fund Account)
(Fund Account Number)

- -----------------------------------------------------------------------------------------------------------------
Via Exchange

If you need help completing the New Account Form, please call the transfer
agent at (800) 248-4486, the Investor Relations Department at TCW Galileo Funds
at (800) FUND TCW (800) 386-3829 or your investment representative at TCW
Galileo Funds.

45
<PAGE>

TO SELL OR EXCHANGE SHARES
- --------------------------------- To reach the Transfer Agent,
By Mail DST Systems, Inc., call toll
free in the U.S.
Write a letter of instruction
that includes: (800) 248-4486
. your name(s) and signature(s) Outside the U.S.
as on the account form (816) 843-7166 (collect)
. your account number
. the Fund name To reach your investment
. the dollar amount you want to representative or the Investor
sell or exchange Relations Department at TCW
. how and where to send the Galileo Funds, call toll free
proceeds in the U.S.

- --------------------------------- (800) 386-3829
Obtain a signature guarantee or
other documentation, if required
(see "Account Policies and
Services--Selling Shares").

Mail your letter of instruction
to:

Regular Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
P.O. Box 419951
Kansas City, MO 64141-6951

Express, Registered or Certified
Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- ---------------------------------
By Telephone

Be sure the Fund has your bank
account information on file. Call
the Transfer Agent at (800) 248-
4486 to request your transaction.
Proceeds will be wired to your
bank.

Telephone redemption requests
must be for a minimum of $1,000.

- ---------------------------------
Systematic Withdrawal Plan: Call
(800) 248-4486 to request a form
to add the plan. Complete the
form, specifying the amount and
frequency of withdrawals you
would like.

Be sure to maintain an account
balance of $25,000 or more.
Systematic Withdrawal plans are
subject to a minimum annual
withdrawal of $500.

46
<PAGE>

Distributions and Taxes

The amount of dividends of net investment income and distributions of net
realized long and short-term capital gains payable to shareholders will be
determined separately for each Fund. Dividends from the net investment income
of each Fund will be declared and paid annually except for the Convertible
Securities Fund, which will declare and pay dividends quarterly. The Funds will
distribute any net realized long or short-term capital gains at least annually.
Your distributions will be reinvested in the fund unless you instruct the fund
otherwise. There are no fees or sales charges on reinvestments.

Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash--unless you are exempt from taxation or entitled
to tax deferral. Capital gains distributions may be taxable at different rates
depending on the length of time a Fund has held the assets sold. Early each
year, you will be notified as to the amount and Federal tax status of all
distributions paid during the prior year. Distributions may also be subject to
state or local taxes. The tax treatment of redemptions from a retirement plan
account may differ from redemptions from an ordinary shareholder account. If
you redeem shares of a Fund or exchange them for shares of another Fund, any
gain on the transaction may be subject to tax. You must provide the Funds with
a correct taxpayer identification number (generally your Social Security
Number) and certify that you are not subject to backup withholding. If you fail
to do so, the IRS can require the Funds to withhold 31% of your taxable
distributions and redemptions. Federal law also requires the Funds to withhold
30% or the applicable tax treaty rate from dividends paid to nonresident alien,
non-U.S. partnership and non-U.S. corporation shareholder accounts.

This is a brief summary of some of the tax laws that affect your investment in
the Fund. Please see the Statement of Additional Information and your tax
adviser for further information.

47
<PAGE>

Financial Highlights

TCW Galileo Convertible Securities Fund

<TABLE>
<CAPTION>
January 2, 1997
(Commencement
of Operations)
Year Ended through
October 31, October 31,
1998 1997
----------------------------------
<S> <C> <C>
Per-Share Data ($)
Net asset value, beginning of period $11.41 $10.00
----------------------------------
Investment operations:
Investment income--net 0.37 0.31
Net realized and unrealized gain on
investments (0.08) 1.43
---------------------------------
Total from investment operations 0.29 1.74
---------------------------------
Distributions:
Dividends from investment income--net (0.37) (0.33)
Dividends from net realized gains on
investments (0.75) --
Dividends in excess of net investment income (0.05) --
---------------------------------

Total Distributions (1.17) (0.33)
---------------------------------
Net asset value, end of period $10.53 $11.41
---------------------------------
Total return (%) 2.69% 17.66%

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $27,388 $36,890
Ratio of expenses to average net assets (%) 1.05%/3/ 0.95%/2/,/3/
Ratio of net income to average net assets (%) 3.34% 3.54%/2/
Portfolio turnover rate (%) 139.65% 141.43%/1/
</TABLE>

/1/For the period January 2, 1997 (commencement of operations) to October 31,
1997 and not indicative of a full year's operating results.
/2/Annualized.
/3/The Adviser had voluntarily agreed to reduce its fee, or to pay the operat-
ing 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 December 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 as-
sets would have been 1.51% for the period January 2, 1997 (commencement of op-
erations) through October 31, 1997 and 1.16% for the year ended October 31,
1998.

48
<PAGE>

Financial Highlights

TCW Galileo Select Equities Fund
(formerly TCW Galileo Core Equities Fund)

<TABLE>
<CAPTION>
Ten
Months
Year Ended October 31 Ended
-------------------------------------- 10/31,
1998 1997 1996 1995 1994
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning
of period $19.29 $15.93 $13.69 $11.57 $11.81
-----------------------------------------------
Investment operations:
Investment income (loss)--
net (0.02) 0.01 0.11 0.06 0.04
Net realized and
unrealized gain (loss) on
investments 3.38 3.57 2.18 2.11 (0.28)
-----------------------------------------------
Total from investment
operations 3.36 3.58 2.29 2.17 (0.24)
-----------------------------------------------
Distributions:
Dividends from investment
income--net -- (0.02) (0.05) (0.05) --
Dividends from net
realized gains on
investments (5.76) (0.20) -- -- --
-----------------------------------------------
Total Distributions (5.76) (0.22) (0.05) (0.05) --
-----------------------------------------------
Net asset value, end of
period $16.89 $19.29 $15.93 $13.69 $11.57
-----------------------------------------------

Total return (%) 23.83% 22.68% 16.79% 18.85% (2.03)%/1/

Ratios/Supplemental Data
Net assets, end of period
($ x 1,000) $184,865 $156,113 $231,302 $197,721 $136,122
Ratio of expenses to
average net assets (%) 0.86% 0.83% 0.82% 0.85% 0.91%/2/
Ratio of net income (loss)
to average net assets (%) (0.14)% 0.08% 0.18% 0.48% 0.44%/2/
Portfolio turnover rate
(%) 103.51% 39.22% 39.58% 53.77% 23.53%/1/
</TABLE>

/1/For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
/2/Annualized.

49
<PAGE>

Financial Highlights

TCW Galileo Earnings Momentum Fund

<TABLE>
<CAPTION>
Year Ended October 31
-------------------------------------
1998 1997 1996 1995
-------------------------------------
<S> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning of year $13.87 $13.01 $11.47 $10.00
-------------------------------------
Investment operations:
Investment income (loss)--net (0.14) (0.12) (0.11) (0.03)
Net realized and unrealized gain on
investments (2.20) 1.98 1.72 1.51
-------------------------------------
Total from investment operations (2.34) 1.86 1.61 1.48
-------------------------------------
Distributions:
Dividends from net realized gains on
investments (0.97) (1.00) (0.07) --
Dividends in excess of net investment
income -- -- -- (0.01)
-------------------------------------
Total Distributions (0.97) (1.00) (0.07) (0.01)
-------------------------------------
Net asset value, end of period $10.56 $13.87 $13.01 $11.47
-------------------------------------

Total return (%) (17.76)% 15.53% 13.99% 14.76%

Ratios/Supplemental Data
Net assets, end of year ($ x 1,000) $ 32,299 $101,667 $77,994 $63,411
Ratio of expenses to average net
assets (%) 1.27% 1.17% 1.13% 1.14%/1/
Ratio of net income (loss) to average
net assets (%) (1.10)% (0.96)% (0.82)% (0.28)%
Portfolio turnover rate (%) 51.25% 93.06% 99.03% 85.91%
</TABLE>

/1/The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
ordinary operating expenses of the Fund to 1.14% of net assets through December
31, 1995. Had such action not been taken, total operating expenses for the fis-
cal years ended October 31, 1996 and October 31, 1995 would have been 1.14% of
average net assets.

50
<PAGE>

Financial Highlights

TCW Galileo Large Cap Growth Fund

<TABLE>
<CAPTION>
June 3, 1998
(Commencement
of
Operations)
through
October 31,
1998

<S> <C>
Per-Share Data ($)
Net asset value, beginning of period $10.00
------
Investment operations:
Investment income--net --
Net realized and
unrealized gain (loss) on investments 1.18
---------
Total from investment operations 1.18
---------
Net asset value, end of period $11.18
---------

Total return (%) 11.80%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $ 7,800
Ratio of expenses to average net assets (%) 0.91%/2/,/3/
Ratio of net income (loss) to average net assets (%) (0.07)%/2/
Portfolio turnover rate (%) 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 Adviser has voluntarily agreed to reduce its fee, or to pay the operat-
ing expenses of the Fund, to the extent necessary to limit ordinary operating
expenses of the Fund to 0.91% of net assets through December 31, 1998. Had such
action not been taken, total annualized operating expenses for the period June
3, 1998 (commencement of operations) through October 31, 1998 would have been
2.53% of average net assets.

51
<PAGE>

Financial Highlights

TCW Galileo Large Cap Value Fund

<TABLE>
<CAPTION>
June 3, 1998
(Commencement
of
Operations)
through
October 31,
1998
--------------
<S> <C>
Per-Share Data ($)
Net asset value, beginning of period $10.00
--------------
Investment operations:
Investment income--net 0.04
Net realized and unrealized gain (loss) on investments 0.08
--------------
Total from investment operations 0.12
--------------
Net asset value, end of period $10.12
--------------

Total return (%) 1.20%/3/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $7,505
Ratio of expenses to average net assets (%) 0.55%/1/,/2/
Ratio of net income (loss) to average net assets (%) 1.04%/1/
Portfolio turnover rate (%) 83.84%/3/
</TABLE>

/1/Annualized.
/2/The Adviser has voluntarily agreed to reduce its fee, or to pay the operat-
ing expenses of the Fund, to the extent necessary to limit ordinary operating
expenses of the Fund to 0.55% of net assets through December 31, 1998. Had such
action not been taken, total annualized operating expenses for the period June
3, 1998 (commencement of operations) through October 31, 1998 would have been
2.48% of average net assets.
/3/For the period June 3, 1998 (commencement of operations) and not indicative
of a full year's operating results.

52
<PAGE>

Financial Highlights

TCW Galileo Aggressive Growth Equities Fund
(formerly TCW Galileo Mid-Cap Growth Fund)

<TABLE>
<CAPTION>
June 3, 1996
(Commencement
Year Ended of Operations)
October 31 through
--------------- October 31,
1998 1997 1996
-------------------------------
<S> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning of period $9.40 $9.19 $10.00
-------------------------------
Investment operations:
Investment income (loss)--net (0.11) (0.08) (0.03)
Net realized and unrealized gain (loss)
on investments 2.06 0.29 (0.78)
-------------------------------
Total from investment operations 1.95 0.21 (0.81)
-------------------------------
Net asset value, end of period $11.35 $9.40 $9.19
-------------------------------

Total return (%) 20.74% 2.28% (8.10)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $84,904 $135,850 $92,430
Ratio of expenses to average net
assets (%) 1.17% 1.12% 1.20%/2/,/3/
Ratio of net income (loss) to average
net assets (%) (1.03)% (0.86)% (0.80)%/2/
Portfolio turnover rate (%) 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 Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
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
for the period June 3, 1996 (commencement of operations) through October 31,
1996.

53
<PAGE>

Financial Highlights

TCW Galileo Small Cap Growth Fund

<TABLE>
<CAPTION>
March 31, 1994
(Commencement
of Operations)
Year Ended October 31 through
-------------------------------------- October 31,
1998 1997 1996 1995 1994
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value,
beginning of period $18.74 $17.17 $13.53 $9.39 $10.00
----------------------------------------------------------
Investment operations:
Investment income
(loss)--net (0.18) (0.15) (0.13) (0.07) (0.04)
Net realized and
unrealized gain (loss)
on investments (0.90) 1.91 4.08 4.72 (0.57)
----------------------------------------------------------
Total from investment
operations (1.08) 1.76 3.95 4.65 (0.61)
----------------------------------------------------------
Distributions:
Dividends from
investment income--net -- -- (0.01) -- --
Dividends from net
realized gains on
investments (1.18) (0.19) (0.30) (0.51) --
----------------------------------------------------------
Total Distributions: (1.18) (0.19) (0.31) (0.51) --
----------------------------------------------------------
Net asset value, end of
period $16.48 $18.74 $17.17 $13.53 $9.39
----------------------------------------------------------

Total return (%) (5.98)% 10.38% 29.73% 49.89% (6.10)%/1/

Ratios/Supplemental Data
Net assets, end of
period ($ x 1,000) $116,050 $144,756 $132,444 $ 66,056 $51,089
Ratio of expenses to
average net assets (%) 1.13% 1.14% 1.14% 1.21%/3/ 1.09%/2/,/3/
Ratio of net income
(loss) to average net
assets (%) (0.95)% (0.89)% (0.76)% (0.61)% (0.59)%/2/
Portfolio turnover rate
(%) 63.67% 60.52% 45.43% 89.73% 88.63%/1/
</TABLE>
/1/For the period March 1, 1994 (commencement of operations) through October
31, 1994 and not indicative of a full year's operating results.

/2/Annualized.
/3/The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
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
for the period March 1, 1994 (commencement of operations) through October 31,
1994 would have been 1.39% of average net assets and for the fiscal year ended
October 31, 1995, total operating expenses would have been 1.24% of average net
assets.

54
<PAGE>

Financial Highlights

TCW Galileo Value Opportunities Fund

<TABLE>
<CAPTION>
November 3, 1997
(Commencement
of Operations)
through
October 31, 1998
----------------
<S> <C>
Per-Share Data ($)
Net asset value, beginning of period $10.00
--------
Investment operations:
Investment income (loss)--net --
Net realized and unrealized gain (loss) on investments (0.75)
--------
Total from investment operations (0.75)
--------
Distributions:
Dividends from investment income--net --
Dividends from net realized gains on investments --
Dividends in excess of net realized gains (0.01)
--------
Total Distributions (0.01)
--------
Net asset value, end of period $9.24
--------

Total return (%) (7.49)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $28,634
Ratio of expenses to average net assets (%) 1.16%/2/
Ratio of net income to average net assets (%) 0.05%/2/
Portfolio turnover rate (%) 97.30%/1/
</TABLE>

/1/For the period November 3, 1997 (commencement of operations) through October
31, 1998 and not indicative of a full year's operating results.
/2/Annualized.

55
<PAGE>

FOR MORE INFORMATION

For all shareholder account TCW Galileo Funds, Inc.
information such as transactions
and account inquiries: SEC file number: 811-7170

Call (800) 248-4486 More information on the Fund is available
free upon request, including the follow-
For information regarding the TCW ing
Galileo Funds, Inc.:

Call (800) FUNDTCW (386-3829) Annual / Semi-Annual Report

In writing: Describes the Fund's performance, lists
portfolio holdings and contains a letter
TCW Galileo Funds, Inc. from the Fund's portfolio manager
c/o DST System, Inc., discussing recent market conditions,
P.O. Box 419951 economic trends and Fund strategies.
Kansas City, MO 64141-6951

On the Internet: Statement of Additional Information (SAI)
Text-only versions of Fund docu-
ments filed with the SEC can be Provides more details about the Fund and
viewed online or downloaded from: its policies. A current SAI is on file
with the Securities and Exchange
SEC Commission (SEC) and is incorporated by
http://www.sec.gov reference and is legally considered part
of this prospectus.
TCW GALILEO FUNDS, INC.
http://www.tcwgroup.com

56
<PAGE>

TCW Galileo
Funds, Inc.

This prospectus tells you about the Institutional Class of seven of the
separate investment funds offered by TCW Galileo Funds, Inc., each of which has
different investment objectives and policies. Please read this document
carefully, and keep it for future reference. Sometimes we will refer to the
Funds in this Prospectus as the Galileo International Funds.

TCW Galileo Asia Pacific Equities Fund

TCW Galileo Emerging Markets Equities Fund

TCW Galileo Emerging Markets Income Fund

TCW Galileo European Equities Fund

TCW Galileo International Equities Fund

TCW Galileo Japanese Equities Fund

TCW Galileo Latin America Equities Fund

March 1, 1999

[LOGO OF TCW GALILEO FUNDS]
THE POWER OF INDEPENDENT THOUGHT

Table of Contents

TCW Galileo Asia Pacific Equities Fund
Investment Objectives/Approach............................................. 11
Main Risks................................................................. 12

TCW Galileo Emerging Markets Equities Fund
Investment Objectives/Approach............................................. 13
Main Risks................................................................. 15

TCW Galileo Emerging Markets Income Fund
Investment Objectives/Approach............................................. 17
Main Risks................................................................. 18

TCW Galileo European Equities Fund
Investment Objectives/Approach............................................. 20
Main Risks................................................................. 21

TCW Galileo International Equities Fund
Investment Objectives/Approach............................................. 22
Main Risks................................................................. 23

TCW Galileo Japanese Equities Fund
Investment Objectives/Approach............................................. 24
Main Risks................................................................. 25

TCW Galileo Latin America Equities Fund
Investment Objectives/Approach............................................. 27
Main Risks................................................................. 29
Risk Considerations........................................................ 31
Management of the Funds.................................................... 39
Multiple Class Structure................................................... 42

Your Investment
Account Policies and Services.............................................. 43
To Open an Account/To Add to an Account.................................... 46
To Sell or Exchange Shares................................................. 47
Distributions and Taxes.................................................... 48
Financial Highlights....................................................... 49

For More Information....................................................... 56
</TABLE>

1
<PAGE>

General Fund Information

Investment Objectives and Principal Strategies

All of the Galileo Institutional Funds are affected by changes in the economy,
or in securities and other markets. There is also the possibility that
investment decisions the Adviser makes will not accomplish what they were
designed to achieve or that companies in which the Funds invest will have
disappointing performance or not pay their debts.

<TABLE>
<CAPTION>
TCW Galileo Funds, Inc. Investment Objective Principal Investment Strategies
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S>
TCW Galileo Asia Pacific Equities Fund Long-term capital appreciation Invests in equity securities of companies in
the Asia Pacific Region, except Australia,
Japan and New Zealand, or securities
convertible into such equity securities.
- ---------------------------------------------------------------------------------------------------------------------------------
TCW Galileo Emerging Markets Equities Fund Long-term capital appreciation Invests in equity securities of companies in
emerging market countries around the world.
- ---------------------------------------------------------------------------------------------------------------------------------
TCW Galileo Emerging Markets Income Fund High total return from current Invests in debt securities issued by Emerging
income and capital appreciation Market Country governments or their
agencies or instrumentalities or private
corporate issuers.
- ---------------------------------------------------------------------------------------------------------------------------------
TCW Galileo European Equities Fund Long-term capital appreciation Invests in equity securities issued by
European companies.
- ---------------------------------------------------------------------------------------------------------------------------------
TCW Galileo International Equities Fund Long-term capital appreciation Invests principally in equity markets outside
the U.S. through investment in shares of the
Galileo Funds.
- ---------------------------------------------------------------------------------------------------------------------------------
TCW Galileo Japanese Equities Fund Long-term capital appreciation Invests in equity securities issued by
Japanese companies.
- ---------------------------------------------------------------------------------------------------------------------------------
TCW Galileo Latin America Equities Fund Long-term capital appreciation Invests in equity securities issued by Latin
American companies.
</TABLE>

Under adverse market conditions, each Fund could invest some or all of its
assets in money market securities. Although the Fund will do this only in
seeking to avoid losses, it could have the effect of reducing the benefit from
any upswing in the market.

2
<PAGE>

Principal Risks

Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you--and the more you can lose. Since shares
of a Fund represent an investment in securities with fluctuating market prices,
the value of Fund shares will vary as the value of each Fund's portfolio
securities increases or decreases in value. Therefore, the value of an
investment in a Fund could go down as well as up. All investments are subject
to:

. MARKET RISK

There is the possibility that the returns from the types of securities in
which a Fund invests will underperform returns from the various general
securities markets. Different types of securities tend to go through cycles
of outperformance and underperformance in comparison to the general
securities markets.

. SECURITIES SELECTION RISK

There is the possibility that the specific securities held in the Funds'
portfolio will underperform the other funds in the same asset class or
benchmarks that are representative of the general performance of the asset
class because of the portfolio manager's choice of securities.

. FOREIGN INVESTING RISK

There is the likelihood that foreign investments may be riskier than U.S.
investments because of a lack of political stability, foreign controls on
investment and currency exchange rates, fluctuations in currency exchange
rates, withholding taxes, and lack of adequate company information. Each
Fund is subject to foreign investing risk because it invests primarily in
the assets of foreign governments or companies. Because each Fund (except
the Japanese Equities Fund) invests in securities of emerging market
countries, the risk factors listed above are more likely to occur. In
addition, because foreign securities generally are denominated and pay
dividends or interest in foreign currencies, and the Galileo International
Funds hold various foreign currencies, the value of the net assets of these
Funds as measured in United States dollars will be affected favorably or
unfavorably by changes in exchange rates.

Each Fund may also be subject (in varying degrees) to the following risks:

. LIQUIDITY RISK

There is the possibility that a Fund may lose money or be prevented from
earning capital gains if it cannot sell a security at the time and price
that is

3
<PAGE>

most beneficial to the Fund. Each Fund is subject to liquidity risk because
foreign securities may be less liquid than U.S. securities.

. PRICE VOLATILITY

There is the possibility that the value of the Fund's portfolio will change
as the prices of its investments go up or down. Although stocks offer the
potential for greater long-term growth than most fixed income securities,
stocks generally have higher short-term volatility. Each Fund (except the
Emerging Markets Income Fund) is subject to this risk. In addition, the
Emerging Markets Income Fund is subject to price volatility because it
invests in low rated emerging market debt.

Because the Galileo International Funds are non-diversified for Investment
Company Act of 1940 ("1940 Act") purposes, they may invest more than 5% of its
total assets in the securities of any one issuer. Consequently, their exposure
to credit and market risks associated with that issuer is increased.

Your investment is not a bank deposit, and it is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.

4
<PAGE>

Performance Summary

The two tables below show each Fund's annual returns and its long-term
performance with respect to its Institutional Class shares. The first table
shows you how the Fund's performance has varied from year to year. The second
compares the Fund's performance over time to that of a broad-based securities
index. Both tables assume reinvestment of dividends and distributions. Except
for the European Equities Fund, the performance information includes the
performance of each Fund's predecessor limited partnership, which were managed
by an affiliate of TCW Funds Management, Inc. , using the same investment
strategy as the Funds. The performance of the partnerships were calculated
using performance standards applicable to private investment partnerships,
which take into account all elements of total return and reflect the deduction
of all fees and expenses of operation. The predecessor limited partnerships
were not registered under the 1940 Act and, therefore, were not subject to
certain investment restrictions imposed by the 1940 Act and Subchapter M of the
Internal Revenue Code of 1986, as amended. If the limited partnerships had been
registered under the 1940 Act their performance might have been adversely
affected. As with all mutual funds, past performance is not a prediction of the
future.

Year by year total return (%)
as of December 31 each year*

TCW Galileo Asia Pacific Equities Fund

<TABLE>
<S> <C> <C> <C> <C> <C>
94.06% -22.40% 6.90% 20.40% -35.35% -2.19%

1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 6.4%

TCW Galileo Emerging Markets Equities Fund

<TABLE>
<S> <C> <C> <C> <C> <C>
61.70% -22.95% -8.90% 16.40% 0.15% -33.60%

1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 2.2%

TCW Galileo Emerging Markets Income Fund

<TABLE>
<S> <C> <C>
8.90% 10.42% -23.71%

1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 8.7%

5
<PAGE>

TCW Galileo European Equities Fund

25.45%

1998

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 9.2%

TCW Galileo International Equities Fund

<TABLE>
<S> <C> <C> <C> <C>
3.70% 4.90% 5.15% -0.80% 20.85%

1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 9.3%

TCW Galileo Japanese Equities Fund

<TABLE>
<S> <C> <C> <C>
-2.39% -15.13% -45.28% 31.30%

1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is 12.5%

TCW Galileo Latin America Equities Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
17.81% 27.90% 53.53% -22.19% -19.72% 24.40% 33.59% -38.59%

1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is -3.2%

6
<PAGE>

Best and worst quarterly performance during this period

<TABLE>
<CAPTION>
Fund Performance
- -------------------------------------------------------------
<S> <C>
. Asia Pacific Equities Fund
Quarter ending December 31, 1993 51.72% (Best)
Quarter ending December 31, 1997 -31.29% (Worst)
- -------------------------------------------------------------
. Emerging Markets Equities Fund
Quarter ending December 31, 1993 42.44% (Best)
Quarter ending September 30, 1998 -24.90% (Worst)
- -------------------------------------------------------------
. Emerging Markets Income Fund
Quarter ending December 31, 1998 18.60% (Best)
Quarter ending September 30, 1998 -32.60% (Worst)
- -------------------------------------------------------------
. European Equities Fund
Quarter ending March 31, 1998 20.89% (Best)
Quarter ending September 30, 1998 -16.22% (Worst)
- -------------------------------------------------------------
. International Equities Fund
Quarter ending December 31, 1998 18.70% (Best)
Quarter ending September 30, 1998 -14.85% (Worst)
- -------------------------------------------------------------
. Japanese Equities Fund
Quarter ending December 31, 1998 27.90% (Best)
Quarter ending December 31, 1997 -28.53% (Worst)
- -------------------------------------------------------------
. Latin America Equities Fund
Quarter ending December 31, 1993 35.90% (Best)
Quarter ending March 31, 1995 -29.09% (Worst)
</TABLE>

7
<PAGE>

Average annual total return as of Since
December 31 1 year 5 years inception
- --------------------------------------------------------------
<S> <C> <C> <C>
. Asia Pacific Equities Fund -2.2% -8.8% 3.6%
- --------------------------------------------------------------
MSCI Far East Free (Ex Japan) -7.4% -13.8% -2.3%
- --------------------------------------------------------------
. Emerging Markets Equities Fund -33.6% -11.5% -2.3%
- --------------------------------------------------------------
IFC Investable Emerging Markets
Total Return Index -22.0% -10.1% -1.0%
- --------------------------------------------------------------
. Emerging Markets Income Fund -23.7% N/A -3.6%
- --------------------------------------------------------------
J.P. Morgan Emerging Markets Bond
Index Plus -14.4% N/A 4.3%
- --------------------------------------------------------------
. European Equities Fund 25.5% N/A 23.4%
- --------------------------------------------------------------
MSCI Europe 15 Index 28.9% N/A 30.0%
- --------------------------------------------------------------
. International Equities Fund 20.8% 6.5% 7.9%
- --------------------------------------------------------------
MSCI EAFE Index 20.3% 9.5% 10.9%
- --------------------------------------------------------------
. Japanese Equities Fund 31.3% N/A -13.2%
- --------------------------------------------------------------
TSE First Section Index 7.8% N/A -11.9%
- --------------------------------------------------------------
. Latin America Equities Fund -38.6% -8.6% 5.3%
- --------------------------------------------------------------
IFC Investable Total Return Latin
America Index
- -------------------------------------------------------------
</TABLE>

8
<PAGE>

Fund Expenses

FEE TABLE

<TABLE>
<CAPTION>
Asia Emerging Emerging Latin
Pacific Markets Markets European International Japanese America
Equities Equities Income Equities Equities Equities Equities
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction
Fees
1) Redemption Fees...... None None None None None None None
2) Exchange Fees........ None None None None None None None
3) Contingent Deferred
Sales Load............ None None None None None None None
4) Sales Load on
Reinvested Dividends.. None None None None None None None
5) Sales Load on
Purchases............. None None None None None None None
Annual Fund Operating
Expenses
Management Fees........ 1.00% 1.00% 0.75% 0.75% -- 0.75% 1.00%
Distribution (12b-1)
Fees................. None None None None None None None
Other Expenses......... 1.48% 0.70% 0.78% 0.31% 0.17% 0.76% 0.64%
---------------------------------------------------------------------
Total Annual Fund
Operating Expenses..... 2.48% 1.70% 1.53% 1.06% 0.17% 1.51%/1/ 1.64%
</TABLE>
- -----------
/1/The Adviser voluntarily agreed to reduce its fee or to pay the operating ex-
penses of the Fund to reduce Annual Fund Operating Expenses 1.20% of Net Assets
through October 31, 1998.

9
<PAGE>

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------
<S> <C> <C> <C> <C>
Asia Pacific Equities........................... $251 $773 $1,321 $2,816
Emerging Markets Equities....................... 173 536 923 2,009
Emerging Markets Income......................... 156 483 834 1,824
European Equities............................... 108 337 585 1,294
International Equities.......................... 17 55 96 217
Japanese Equities............................... 154 477 824 1,802
Latin America Equities.......................... 167 517 892 1,944
</TABLE>

10
<PAGE>

TCW Galileo Asia Pacific Equities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
in equity securities of companies in the Asia Pacific Region ("Asia-Pacific
Countries"), except Australia, Japan and New Zealand. At least 65% of the value
of the Fund's total assets will be invested (except when maintaining a
temporary defensive position) in equity securities of Asia Pacific Companies,
or securities convertible into such equity securities.

<TABLE>

<S> <C>
Concepts to understand The Fund will generally invest its
- ---------------------- portfolio securities among at least three
Asia Pacific Countries.
Asian Pacific Company (i) is organized
under the laws of an Asia-Pacific Country In managing the Fund's investments, the
and has a principal office in Asia; or (ii) Adviser utilizes an investment process that
derives 50% or more of its gross revenues or incorporates both a "top-down" and
profits from goods produced or sold, "bottom-up" analysis of the Asia-Pacific
investments made, or services performed in Countries. The "top-down" analysis focuses
Asia-Pacific Countries or has at least 50% of on an evaluation of the global environment.
its assets situated in Asia-Pacific Countries; The Adviser then complements its "top-down"
or (iii) its equity securities are traded analysis with a "bottom-up" analysis. The
principally on a stock exchange or over-the- Adviser uses "bottom-up" analysis to determine
counter in an Asia-Pacific country. country allocation based on estimated
earnings. The key factors used by the
Adviser in assessing the potential for an
expansion (rerating) or contraction
(derating) of a stock market's earnings
multiple are:

.liquidity

.historical valuations

. the sustainability of economic growth
and political environment

The Adviser then performs an industry
analysis and screens companies based on
certain quantitative analyses.

Terence F. Mahony is the Fund's portfolio
manager.
</TABLE>

11
<PAGE>

Main Risks

The primary risks affecting this Fund are "foreign investing risk," "liquidity
risk" and "price volatility." Because the Fund invests almost all of its assets
in securities issued by foreign companies, it is subject to foreign investing
risks. Foreign investing risk refers to the likelihood that foreign investments
may be riskier than U.S. investments because of many factors, some of which
include:

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

Because the Fund invests in the securities of emerging market countries, these
risks are more pronounced. In addition, securities traded only through foreign
markets may be more volatile and are often harder to sell. The Fund also is
subject to foreign currency risk. Because foreign securities generally are
denominated and pay dividends or interest in foreign currencies, the value of
the net assets of the Fund as measured in U.S. dollars will be affected
favorably or unfavorably by changes in exchange rates. Liquidity risk refers to
the possibility that the Fund may lose money or be prevented from earning
capital gains if it cannot sell a security at the time and price that is most
beneficial to the Fund. Because foreign securities may be less liquid than U.S.
securities, the Fund may be more susceptible to liquidity risk than funds that
invest in U.S. securities. Price volatility refers to the possibility that the
value of the Fund's portfolio will change as the prices of its investments go
up or down. This Fund may be subject to greater price volatility than funds
that invest in the securities of U.S. companies.

The Fund may invest some assets in foreign currency futures, forward contracts,
options and futures. These practices are used primarily to hedge the Fund's
portfolio but may be used to increase returns; however, such practices
sometimes may reduce returns or increase volatility.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

12
<PAGE>

TCW Galileo Emerging Markets Equities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
primarily in equity securities of companies in Emerging Market Countries.

The Fund will generally invest its assets among at least five Emerging Market
Countries. At least 65% of the value of its total assets will be invested
(except when maintaining a temporary defensive position) in Emerging Market
Company equity-related securities.

<TABLE>

<S> <C>
Concepts to understand In managing the Fund's investments, the
- ---------------------- Adviser utilizes both a "top-down view"
and a "bottom-up analysis". In allocating
Emerging Market Country is a investments among Emerging Market
country that has a developing Counties, the Adviser attempts to
economy or market and is integrate an assessment of how the global
considered an emerging or environment affects a particular country,
developing country by the with an analysis of internal political,
International Bank of market and economic factors. Among the
Reconstruction and Development or country economic variables examined are:
any affiliate thereof (the "World
Bank"), as well as Hong Kong, . level of economic activity or GDP
Israel and Singapore. growth

Emerging Market Company: (i) is . level and direction of local inflation
organized under the laws of an
Emerging Market Country and has a . level and direction of interest rates
principal office in an Emerging
Market Country; or (ii) derives . monetary policy and money supply growth
50% or more of its gross revenues
or profits from goods produced or . current account balances and financing
sold, investments made, or requirements
services performed in Emerging
Market Countries or has at least . the pace and degree of privatization
50% of its assets situated in
Emerging Market Countries; or Based on these analyses, the Adviser
(iii) its equity securities are estimates the overall earnings growth
traded principally on a stock rate (in local currency and in U.S.
exchange or over-the-counter in dollars) of the corporate sector within
an Emerging Market Country. each country. Market valuation levels are
examined and compared with historical
levels and the levels of other Emerging
Market Countries that have gone through
similar stages of economic development.
These analyses and estimates form the
basis for a
</TABLE>

13
<PAGE>

calculation of the expected return for each market, which is a key element of
country allocation. The next step in the investment decision process is
industry analysis within sectors, which includes assessing the effects of such
developments as privatization programs, infrastructure investments, consumer
trends and government regulation on particular industry sectors. The Adviser
attempts to identify the sectors that would benefit from structural changes.
The Adviser also considers the possible impact of short-term cyclical factors,
such as business and political cycles, on particular industries. These analyses
produce industry weightings for each market.

In selecting Emerging Market Companies for investment, the Adviser takes into
account a variety of factors, including price/earnings ratio, earnings growth,
quality of management, availability of new products and markets, current and
historical stock prices, sales growth and country factors affecting particular
companies.

Terence F. Mahony and Michael P. Reilly are the Fund's portfolio managers.

14
<PAGE>

Main Risks

The primary risks affecting this Fund are "foreign investing risk," "liquidity
risk," and "price volatility." Because the Fund invests in securities issued by
foreign companies, it is subject to foreign investing risks. Foreign investing
risk refers to the likelihood that foreign investments may be riskier than U.S.
investments because of many factors, some of which include:

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

Price volatility refers to the possibility that the value of the Fund's
portfolio will change as the prices of its investments go up or down. This Fund
may be subject to greater price volatility than funds that invest in the
securities of U.S. companies.

The Fund may invest some assets in options, futures, foreign currency futures
and forward contracts. These practices are used primarily to hedge the Fund's
portfolio but may be used to increase returns; however, such practices
sometimes may reduce returns or increase volatility.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be

15
<PAGE>

secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

16
<PAGE>

TCW Galileo Emerging Markets Income Fund

Investment Objectives/Approach

The Fund seeks high total return from current income and capital appreciation.
To pursue this goal, it invests (except when maintaining a temporary defensive
position) at least 65% of the value of its total assets in debt securities
issued or guaranteed by companies, financial institutions and government
entities in Emerging Market Countries. The debt securities in which the Fund
may invest may consist of securities that are unrated or rated BB or lower by
S&P or Ba or lower by Moody's. Debt securities rated below investment grade are
the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
The Fund will invest in at least four Emerging Market Countries.

<TABLE>

<S> <C>
Concepts to understand In allocating investments among the
- ---------------------- various Emerging Market Countries, the
Adviser attempts to analyze internal
Emerging Market Country is a political, market and economic factors.
country that has a developing The factors include:
economy or market and is
considered an emerging or . public finances
developing country by the
International Bank of . monetary policy
Reconstruction and Development or
any affiliate thereof (the "World . external accounts
Bank") as well as Hong Kong,
Israel and Singapore. . financial markets

Emerging Market Company (i) is . foreign investment regulations
organized under the laws of an
Emerging Market Country and has a . stability of exchange rate policy and
principal office in an Emerging labor conditions
Market Country; or (ii) derives
50% or more of its gross revenues The Fund may invest up to 20% of its
or profits from goods produced or total assets in structured investments
sold, investments made, or that may be either subordinated or
services performed in Emerging unsubordinated, and in indexed debt
Market Countries or has at least securities.
50% of its assets situated in
Emerging Market Countries; or Javier Baz and Nathan B. Sandler are the
(iii) its equity securities are Fund's portfolio managers.
traded principally on a stock
exchange or over-the-counter in
an Emerging Market Country.
</TABLE>

17
<PAGE>

Main Risks

The primary risks affecting this Fund are "foreign investing risk," "liquidity
risk," "credit risk," "interest rate risk," and "price volatility." Because the
Fund invests in securities issued by foreign governments or companies, it is
subject to foreign investing risks. Foreign investing risk refers to the
likelihood that foreign investments may be riskier than U.S. investments
because of many factors, some of which include:

. a lack of political or economic stability

. foreign controls on investment and currency exchange rates

. withholding taxes

. a lack of adequate company information

Because the Fund invests in the securities of emerging market countries, these
risk factors are more pronounced. In addition, securities traded only through
foreign markets may be more volatile and are often harder to sell. The Fund
also is subject to foreign currency risk. Because foreign securities generally
are denominated and pay dividends or interest in foreign currencies, the value
of the net assets of the Fund as measured in U.S. dollars will be affected
favorably or unfavorably by changes in exchange rates. Liquidity risk refers to
the possibility that the Fund may lose money or be prevented from earning
capital gains if it cannot sell a security at the time and price that is most
beneficial to the Fund. Because lower quality securities and foreign securities
may be less liquid than higher quality securities, the Fund may be more
susceptible to liquidity risk than funds that invest in higher quality or
U.S. securities. Credit risk refers to the likelihood that the Fund could lose
money if an issuer is unable to meet its financial obligations, such as the
payment of principal and/or interest on an instrument, or goes bankrupt. This
Fund may be subject to greater credit risk, because it invests in securities
that are below investment grade and have no minimum credit rating. Debt
securities that are rated below investment grade are considered to be
speculative. Those securities rated below investment grade are also commonly
known as "junk" bonds. This is especially true during periods of economic
uncertainty or during economic downturns. Interest rate risk refers to the
possibility that the value of the Fund's portfolio investments may fall when
interest rates rise. Changes in interest rates may have a significant effect on
the Fund, because it may hold securities with long terms to maturity and may
use hedging techniques. Price volatility refers to the possibility that the
value of the Fund's portfolio will change as the value of its investments go up
or down. The Fund may be subject to greater price volatility than funds that
invest in the securities of U.S. issuers.

18
<PAGE>

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

19
<PAGE>

TCW Galileo European Equities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
primarily in the securities of issuers located in Europe. The Fund invests
(except when maintaining a temporary defensive position) at least 65% of the
value of its total assets in equity securities issued by European companies.
These securities include common and preferred stocks, rights or warrants to
purchase common stock and convertible debt or equity securities. The Fund
invests in companies based in at least three European Countries.

Concepts to understand
- ----------------------
<S> <C>
In managing the Fund's investments, the
European Company (i) is organized Adviser seeks to emphasize companies
under the laws of a European which are moving towards the North
country and has a principal American concept of shareholder value.
office in Europe; or (ii) derives
50% or more of its gross revenues The Adviser also seeks investment
or profits from goods produced or opportunities resulting from the fact
sold, investments made, or that economic ties between the former
services performed in European "Eastern bloc" countries of Europe and
countries or has at least 50% of other European countries have been
its assets situated in Europe; or strengthened. The Fund will not invest
(iii) its equity securities are more than 30% of its total assets in
traded principally on a stock issuers based in former "Eastern bloc"
exchange or over-the-counter in a countries, or more than 10% of its total
European country. assets in issuers based in any one former
"Eastern bloc" country.

James M. Burns and Saker A. Nusseibeh are
the Fund's portfolio managers.
</TABLE>

20
<PAGE>

Main Risks

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

21
<PAGE>

TCW Galileo International Equities Fund

Investment Objectives/Approach

This Fund seeks long-term capital appreciation. To pursue its goal, it invests
primarily in equity markets outside the U.S. both in developed and emerging
countries through investment in shares of the Galileo Funds.

In managing the Fund's assets, the Fund allocates its assets, within
predetermined percentage ranges, among certain of the underlying Galileo Funds
which, except for the TCW Galileo Money Market Fund, invest predominantly in
foreign securities. The Fund will invest (except when maintaining a temporary
defensive position) in the following underlying Galileo Funds up to the
percentage limits set forth below:

<TABLE>
<CAPTION>
Fund Investment Limit (Percent of the
Underlying Galileo Funds International Equities Fund's Total Assets)
- ----------------------------------------------------------------------------
<S> <C>
Asia Pacific Equities Fund 50%
Emerging Markets Equities Fund 35%
European Equities Fund 80%
Japanese Equities Fund 75%
Latin America Equities Fund 50%
Money Market Fund 50%
</TABLE>

The Fund may invest directly in Australian and New Zealand securities. The
Board may alter these percentage limits when it deems appropriate.

Each underlying Galileo Fund has a specific investment objective, investment
policies and risks. Investors should read the disclosure contained in this
Prospectus regarding each underlying Galileo Fund's investment objective,
policies, permissible investments and risks. The TCW Galileo Money Market Fund
invests in high credit quality, short-term money market securities.

Saker A. Nusseibeh is the Fund's portfolio manager.

22
<PAGE>

Main Risks

The Fund holds primarily shares of other funds.

The primary risks affecting the Fund are "foreign investing risk," "liquidity
risk" "price volatility," and to a lesser extent, "credit risk." Because the
Fund will invest most of its assets in underlying Galileo Funds, which invest
in securities issued by foreign governments or companies, it is subject to
foreign investing risks. Foreign investing risk refers to the likelihood that
foreign investments may be riskier than U.S. investments because of many
factors, some of which include:

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

Because the Fund invests in underlying Galileo Funds, which invest in the
securities of emerging market countries, these risks are more pronounced. In
addition, securities traded only through foreign markets may be more volatile
and are often harder to sell. The Fund also is subject to foreign currency
risk. Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, the value of the net assets of those Funds as
measured in U.S. dollars will be affected favorably or unfavorably by changes
in exchange rates. Liquidity risk refers to the possibility that the Fund may
lose money or be prevented from earning capital gains if it cannot sell a
security at the time and price that is most beneficial to the Fund. Because
foreign securities may be less liquid than U.S. securities, the Fund may be
more susceptible to liquidity risk than funds that invest in U.S. securities.
Price volatility refers to the possibility that the value of the Fund's
portfolio will change as the value of its investments go up or down. The Fund
may be subject to greater price volatility than funds that invest in the
securities of U.S. companies.

Investing in the underlying Galileo Funds through the Fund involves certain
additional expenses and taxes that would not be present in direct investments
in the underlying Galileo Funds.

The Fund invests in underlying Galileo Funds, which seek to earn additional
income by making loans of their portfolio securities to brokers, dealers and
other financial institutions. The loans will be secured at all times by cash
and liquid high grade debt obligations. As with any extension of credit, there
are risks of delay in recovery and in some cases even loss of rights in the
collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may have tax
consequences, such as increased realized gains, for investors.

23
<PAGE>

TCW Galileo Japanese Equities Fund

Investment Objectives/approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
(except when maintaining a temporary defensive position) at least 65% of the
value of its total assets in equity securities issued by Japanese Companies.
These securities include common and preferred stocks, rights or warrants to
purchase common stock and convertible debt or equity securities.

Concepts to understand
- ----------------------
<S> <C>
The Fund may invest up to 25% of the
Japanese Companies (i) are value of its total assets in equity
organized under the laws of Japan securities of Japanese Companies traded
and have a principal office in on the second sections of the main
Japan; or (ii) derive 50% or more Japanese exchanges and in the over-the-
of their gross revenues or counter market which generally are
profits from goods produced or smaller companies. The Fund will invest
sold, investments made, or in companies that the Adviser believes:
services performed in Japan or
have at least 50% of their assets . have potential for good medium term
situated in Japan; or (iii) have earnings growth
their equity securities traded
principally on a stock exchange . are undervalued within the Japanese
or over-the-counter market in equities market
Japan.
The Adviser will seek companies that have
at least some of the following
characteristics:

.strong balance sheets

.strong management team

.high quality assets

.large market share

The Fund also may invest up to 35% of its
total assets in debt securities of
issuers located in Japan or issued or
guaranteed by the Japanese government.

Stephen J. Harker and Peter A. Kirkman
are the Fund's portfolio managers.
</TABLE>

24
<PAGE>

Main Risks

The primary risks affecting this Fund are "foreign investing risk," "single
country risk," "liquidity risk," "price volatility" and "credit risk." Because
the Fund invests in securities issued by foreign governments or companies, it
is subject to foreign investing risks. Foreign investing risk refers to the
likelihood that foreign investments may be riskier than U.S. investments
because of many factors, some of which include:

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

In addition, securities traded only through foreign markets may be more
volatile and are often harder to sell. The Fund also is subject to foreign
currency risk. Because foreign securities generally are denominated and pay
dividends or interest in foreign currencies, the value of the net assets of
those Funds as measured in U.S. dollars will be affected favorably or
unfavorably by changes in exchange rates. Liquidity risk refers to the
possibility that the Fund may lose money or be prevented from earning capital
gains if it cannot sell a security at the time and price that is most
beneficial to the Fund. Because foreign securities may be less liquid than U.S.
securities, the Fund may be more susceptible to liquidity risk than funds that
invest in U.S. securities. In addition, because the Fund may invest in the
securities of small-sized companies, these securities may be less liquid than
the securities of large-sized companies. Price volatility refers to the
possibility that the value of the Fund's portfolio will change as the prices of
its investments go up or down. The Fund may be subject to greater price
volatility than funds that invest in the securities of large U.S. companies.
The Fund is subject to "single country" risk. As a "single country" mutual
fund, the Fund may exhibit certain speculative characteristics and thus should
not constitute a complete investment program. The concentration of the Fund's
assets in Japanese issuers will subject the Fund to the risks of adverse
social, political or economic events which occur in Japan. Credit risk refers
to the likelihood that the Fund could lose money if an issuer is unable to meet
its financial obligations, such as the payment of

25
<PAGE>

principal and/or interest on an instrument, or goes bankrupt. The Fund may be
subject to substantial credit risk because it may invest in securities that are
below investment grade. Debt securities that are rated below investment grade
are considered to be speculative. Those securities rated below investment grade
are also commonly known as "junk" bonds.

The Fund may invest some assets in options, futures, foreign currency futures
and forward contracts. It may also sell short securities These practices are
used primarily to hedge the Fund's portfolio but may be used to increase
returns; however, such practices sometimes may reduce returns or increase
volatility.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

26
<PAGE>

TCW Galileo Latin America Equities Fund

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, it invests
(except when maintaining a temporary defensive position) at least 65% of the
value of its total assets in Latin American equity securities. The Fund invests
its assets among at least three Latin American countries at all times.
Typically, 95% of the Fund's investments will consist of equity securities of
issuers in Brazil, Mexico, Argentina, Chile, Columbia, Peru and Venezuela.

Concepts to understand Other Latin American countries in which
- ---------------------- the Fund may invest are: the Bahamas,
Barbados, Belize, Bolivia, Costa Rica,
Latin American securities include Dominican Republic, Ecuador, El Salvador,
(i) debt or equity securities of French Guinea, Guatemala, Guyana, Haiti,
companies organized in a country Honduras, Jamaica, the Netherlands,
in Latin America or for which the Antilles, Nicaragua, Panama, Paraguay,
principal trading market (the Suriname, Trinidad, Tobago, and Uruguay.
exchange or over-the-counter
market in which the largest The Fund seeks superior returns by
portion of the shares of the investing in countries, or sectors within
company's securities are traded) countries, exhibiting strong earnings
is located in Latin America, (ii) growth potential in U.S. dollar terms as
equity securities of companies well as reasonable value. Allocation of
that derive at least 50% of their assets among Latin American countries is
gross revenues or profits from based on the risk adjusted attractiveness
either goods produced or services of each market.
performed in Latin America or
sales made in Latin America, The Adviser carries out both country
(iii) equity securities in the political and economic analysis in order
form of Depositary Instruments to identify attractive investment
listed on securities exchanges or opportunities. This analysis involves:
traded in other regulated markets
in the United States issued by .internal research
companies which meet the
requirements set forth in clauses . in-country visits with government
(i) and (ii), (iv) debt officials, business leaders, and
securities issued or guaranteed private sector consultants
by the government of a country in
Latin America, its agencies or . communicating with multilateral
instrumentalities, or the central agencies such as the World Bank, IMF,
bank of such country, and (v) and IADB
debt securities denominated in a
Latin American currency issued by . in-country visits with the management
companies to finance operations of companies in which the Fund invests
in Latin America.

27
<PAGE>

The Adviser uses its research to identify countries with:

. declining interest rates

. a reduction in country risk

. strong economic growth

The Adviser seeks to invest in the equity securities of companies with:

.quality management

.strong earnings growth

.reasonable valuation measures relative to other market proxies

Shannon M. Callan and Michael P. Reilly are the Fund's portfolio managers.

28
<PAGE>

Main Risks

The primary risks affecting this Fund are "foreign investing risk," "liquidity
risk," and "price volatility." Because the Fund invests a portion of its assets
in securities issued by foreign governments or companies, it may be subject to
foreign investing risks. Foreign investing risk refers to the likelihood that
foreign investments may be riskier than U.S. investments because of many
factors, some of which include:

.a lack of political or economic stability

.foreign controls on investment and currency exchange rates

.withholding taxes

.a lack of adequate company information

Because the Fund invests in the securities of emerging market countries, these
risks are more pronounced. In addition, securities traded only through foreign
markets may be more volatile and are often harder to sell. The Fund also is
subject to foreign currency risk. Because foreign securities generally are
denominated and pay dividends or interest in foreign currencies, and some of
the Funds hold various foreign currencies from time to time, the value of the
net assets of those Funds as measured in U.S. dollars will be affected
favorably or unfavorably by changes in exchange rates. Liquidity risk refers to
the possibility that the Fund may lose money or be prevented from earning
capital gains if it cannot sell a security at the time and price that is most
beneficial to the Fund. Because lower quality securities and foreign securities
may be less liquid than higher quality or U.S. securities, the Fund may be more
susceptible to liquidity risk than funds that invest in higher quality or U.S.
investments. Price volatility refers to the possibility that the value of the
Fund's portfolio will change as the prices of its investments go up or down.
This Fund may be subject to greater price volatility than funds that invest in
the securities of large U.S. companies.

29
<PAGE>

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences, such as
increased realized gains, for investors.

30
<PAGE>

Risk Considerations

Please consider the following risks before investing in a Fund.

Various market risks can affect the price or liquidity of an issuer's
securities. Adverse events occurring with respect to an issuer's performance or
financial position can depress the value of the issuer's securities. The
liquidity in a market for a particular security will affect its value and may
be affected by factors relating to the issuer, as well as the depth of the
market for that security. Other market risks that can affect value include a
market's current attitudes about type of security, market reactions to
political or economic events, and tax and regulatory effects (including the
lack of adequate regulations for a market or particular type of instrument).
Market restrictions on trading volume can also affect price and liquidity.

General Investment Risk Prices of most securities tend to be more
- ------------------------ volatile in the short-term. Therefore, an
investor who trades frequently or redeems
Since shares of a Fund represent in the short-term is more likely to incur
an investment in securities with loss than an investor who holds
fluctuating market prices, the investments for the long term. The fewer
value of Fund shares will vary as the number of issuers in which a Fund
the value of each Fund's invests, the greater the potential
portfolio securities increases or volatility of its portfolio.
decreases. Therefore, the value
of an investment in a Fund could The Adviser may temporarily invest up to
go down as well as up. 100% of a Fund's assets in high quality,
short-term money market instruments if it
believes adverse economic or market
conditions, such as excessive volatility
or sharp market declines, justify taking
a defensive investment posture. If a Fund
attempts to limit investment risk by
temporarily taking a defensive investment
position, it may be unable to pursue its
investment objective during that time,
and it may miss out on some or all of an
upswing in the securities markets.

31
<PAGE>

Investment in foreign securities involves special risks in addition to the
usual risks inherent in domestic investments. These include: political or
economic instability; the unpredictability of international trade patterns; the
possibility of foreign governmental actions such as expropriation,
nationalization or confiscatory taxation; the imposition or modification of
foreign currency or foreign investment controls; the imposition of withholding
taxes on dividends, interest and gains; price volatility; and fluctuations in
currency exchange rates.

Foreign Investing As compared to U.S. companies, foreign
- ------------------ issuers generally disclose less financial
and other information publicly and are
subject to less stringent and less
uniform accounting, auditing and
financial reporting standards. Foreign
countries typically impose less thorough
regulations on brokers, dealers, stock
exchanges, insiders and listed companies
than does the U.S. Foreign securities
markets may be less liquid and more
volatile than domestic markets.
Investment in foreign securities involves
higher costs than investment in U.S.
securities, including higher transaction
and custody costs as well as the
imposition of additional taxes by foreign
governments. In addition, security
trading practices abroad may offer less
protection to investors such as the
Funds. Settlement of transactions in some
foreign markets may be delayed or may be
less frequent than in the U.S., which
could affect the liquidity of each Fund's
portfolio. Also, it may be more difficult
to obtain and enforce legal judgments
against foreign corporate issuers than
against domestic issuers and it may be
impossible to obtain and enforce
judgments against foreign governmental
issuers.

Because foreign securities generally are
denominated and pay dividends or interest
in foreign currencies, and some of the
Funds hold various foreign currencies
from time to time, the value of the net

32
<PAGE>

assets of those Funds as measured in U.S. dollars will be affected favorably or
unfavorably by changes in exchange rates. Generally, currency exchange
transactions will be conducted on a spot (i.e., cash) basis at the spot rate
prevailing in the currency exchange market. The cost of currency exchange
transactions will generally be the difference between the bid and offer spot
rate of the currency being purchased or sold. In order to protect against
uncertainty in the level of future foreign currency exchange rates, the Galileo
International Funds are authorized to enter into certain foreign currency
futures and forward contracts. However, they are not obligated to do so and,
depending on the availability and cost of these devices, the Funds may be
unable to use foreign currency futures and forward contracts to protect against
currency uncertainty. Please see the Statement of Additional Information for
further information.

With respect to the Emerging Markets Equities, Emerging Markets Income, and
Latin America Equities Funds, the forward currency market for the purchase or
sale of U.S. dollars in most Latin American countries is not highly developed,
and, in certain countries, there may be no such market. If a devaluation of a
currency is generally anticipated, the Funds may not be able to contract to
sell the currency at an exchange rate more advantageous than that which would
prevail after the anticipated amount of devaluation, particularly in regard to
forward contracts for local currencies in view of the relatively small,
inactive or even non-existent market for these contracts. In the event the
Funds hold securities denominated in a currency that suffers a devaluation, the
Funds' net asset values will suffer corresponding reductions. In this regard,
in December 1994, the Mexican government determined to allow the Mexican peso
to trade freely against the U.S. dollar rather than within a controlled band,
which action resulted in a significant devaluation of the Mexican peso against
the dollar. Further, in July 1997, the Thai and Philippine governments allowed
the baht and peso, respectively, to trade freely against the U.S. dollar
resulting in a sharp devaluation of both currencies, and in 1998 Russia did the
same, causing a sharp devaluation of the ruble.

33
<PAGE>

Investors should recognize that investing in securities of emerging market
countries through investment in the Asia Pacific Equities, Emerging Markets
Equities, Emerging Markets Income, European Equities, International Equities
and Latin America Equities Funds involves certain risks, and considerations,
including those set forth below, which are not typically associated with
investing in the United States or other developed countries.

Risks Associated With Political and economic structures in many
Emerging Market Countries emerging markets countries may be
- ------------------------- undergoing significant evolution and
rapid development, and such countries may
lack the social, political and economic
stability characteristics of more
developed countries. Some of these
countries may have in the past failed to
recognize private property rights and
have at times nationalized or
expropriated the assets of private
companies.

The securities markets of emerging market
countries are substantially smaller, less
developed, less liquid and more volatile
than the major securities markets in the
United States and other developed
nations. The limited size of many
emerging securities markets and limited
trading volume in issuers compared to the
volume of trading in U.S. securities or
securities of issuers in other developed
countries could cause prices to be
erratic for reasons apart from factors
that affect the quality of the
securities. For example, limited market
size may cause prices to be unduly
influenced by traders who control large
positions. Adverse publicity and
investors' perceptions, whether or not
based on fundamental analysis, may
decrease the value and liquidity of
portfolio securities, especially in these
markets.

In addition, emerging market countries'
exchanges and broker-dealers are
generally subject to less government and

34
<PAGE>

exchange regulation than their counterparts in developed countries. Brokerage
commissions, dealer concessions, custodial expenses and other transaction costs
may be higher in emerging markets than in developed countries. As a result,
Funds investing in emerging market countries have operating expenses that are
expected to be higher than other Funds investing in more established market
regions.

Many of the emerging market countries may be subject to a greater degree of
economic, political and social instability than is the case in the United
States, Canada, Australia, New Zealand, Japan and Western European and certain
Asian countries. Such instability may result from, among other things,
(i) popular unrest associated with demands for improved political, economic and
social conditions, and (ii) internal insurgencies. Such social, political and
economic instability could disrupt the financial markets in which the Asia
Pacific Equities, Emerging Markets Equities, Emerging Markets Income,
International Equities and Latin America Equities Funds invest and adversely
affect the value of a Fund's assets.

In certain emerging market countries governments participate to a significant
degree, through ownership or regulation, in their respective economies. Action
by these governments could have a significant adverse effect on market prices
of securities and payment of dividends. In addition, most emerging market
countries have experienced substantial, and in some periods extremely high,
rates of inflation. Inflation and rapid fluctuation in inflation rates have had
and may continue to have very negative effects on the economies and securities
markets of certain emerging market countries. In addition, many emerging market
countries are grappling with severe recession and government instability.

Many of the currencies of emerging market countries have experienced
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which portfolio securities are denominated will have a detrimental impact on
Funds investing in emerging market countries. Many emerging market countries
are experiencing currency exchange problems. Countries have and may in the
future impose foreign currency controls and repatriation control.

35
<PAGE>

Fixed Income Securities "Credit risk" refers to the likelihood
- ----------------------- that an issuer will default in the
payment of principal and/or interest on
an instrument. Financial strength and
solvency of an issuer are the primary
factors influencing credit risk. In
addition, lack of or inadequacy of
collateral or credit enhancements for a
fixed income security may affect credit
risk. Credit risk of a security may
change over its life and securities which
are rated by rating agencies are often
reviewed and may be subject to
downgrades.

The Emerging Markets Income Fund may
invest in debt instruments rated below
investment grade. Debt securities that
are rated below investment grade are
considered to be speculative. Those
securities rated below investment grade
are also commonly known as "junk" bonds.
Generally, lower-rated debt securities
provide a higher yield than higher rated
debt securities of similar maturity but
are subject to greater credit risk than
higher rated securities of similar
maturity. Such securities are regarded as
predominantly speculative with respect to
the issuer's continuing ability to meet
principal and interest payments. Because
investment in lower quality securities
involves greater investment risk,
achievement of a Fund's investment
objective will be more dependent on the
Adviser's analysis than would be the case
if the Fund were investing in higher
quality bonds. In addition, lower quality

36
<PAGE>

Each of the Galileo International Funds are non-diversified for 1940 Act
purposes and as such may invest a larger percentage of its assets in individual
issuers than a diversified investment company. In this regard, the Fund is not
subject to the general limitation that it not invest more than 5% of its total
assets in the securities of any one issuer. To the extent the Fund makes

investments in excess of 5% of its assets
Non-Diversified Status in a particular issuer, its exposure to
- ---------------------- credit and market risks associated with
that issuer is increased. However, the
Fund's investments will be limited so as
to qualify for the special tax treatment
afforded "regulated investment companies"
under the Internal Revenue Code of 1986,
as amended.

37
<PAGE>

38
<PAGE>

European Economic and Monetary Like other investment companies and
Union business organizations, including the
- ------------------------------ companies in which the Funds invest, the
Funds could be adversely affected: (i) if
the euro, or EMU as a whole does not take
effect; (ii) if a participating country
withdraws from EMU; or (iii) if the
computing, accounting and trading systems
used by the Funds' service providers, or
by other business entities with which the
Funds or their service providers do
business, are not capable of recognizing
the euro as a distinct currency at the
time of, and following euro conversion.

Management of the Funds

Investment Adviser

The Funds' investment adviser is TCW Funds Management, Inc. and is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles, California
90017. As of December 31, 1998, the Adviser and its affiliated companies, which
provide a variety of trust, investment management and investment advisory
services had over $50 billion under management or committed for management.

Investment Sub-Advisers

TCW Asia Limited ("TCW Asia"), Sub-Adviser to the Asia Pacific Equities and
Emerging Markets Equities Funds, is headquartered at One Pacific Place,
88 Queensway, Hong Kong. TCW London International, Limited ("TCW London")
(regulated by I.M.R.O.), Sub-Adviser to the Emerging Markets Equities, European
Equities, Japanese Equities and International Equities Funds, is headquartered
at 16 Charles II Street, London, England SW1Y4QU.

39
<PAGE>

Portfolio Managers

<TABLE>
<CAPTION>
Portfolio Manager(s) Business Experience During Last Five Years*
- -------------------------------------------------------------------------------
<C> <S>
Javier Baz Managing Director and Chief Investment Officer-
International, the Adviser, TCW Asset Management Company
and Trust Company of the West since January 1994.
Previously Managing Director, Merrill Lynch Capital
Markets-International Emerging Markets Corporate Finance
Group.
James M. Burns Managing Director and Executive Vice President, TCW
London International Limited (since August 1993) and
Managing Director, TCW Asset Management Company since
October 1994. Previously Managing Director Dillon, Read
International Asset Management Co. (London).
Shannon M. Callan Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West. Prior to rejoining
the Adviser in 1994, portfolio manager for Moore Capital,
an offshore hedge fund. Prior to 1993 portfolio
manager/analyst for TCW Asset Management Company.
Stephen J. Harker Managing Director and Executive Vice President, TCW
London International, Limited (since January 1994) and
Managing Director, TCW Asset Management Company (since
October 1994). Previously Assistant Director and Fund
Manager for Prudential Portfolio Managers, Ltd.
(England).
Peter A. Kirkman Vice President TCW London International, Ltd. and TCW
Asset Management Company since March 1996. Previously
Senior Fund Manager Prudential Portfolio Managers, Ltd.
(England).
Terence F. Mahony Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West since April 1996.
Previously he was Chief Investment Officer for Global
Emerging Markets Equities at HSBC Asset Management
(September 1993 to April 1996) and prior thereto was a
Director at Baring Asset Management.
Saker A. Nusseibeh Managing Director and Executive Vice President, TCW
London International, Limited and Managing Director, TCW
Asset Management Company since July 1996. Previously
Director of Mercury Asset Management (London).
Michael P. Reilly Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West.
Nathan B. Sandler Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West since September
1993. Previously a Principal of SCS Leveraged Global
Markets, a fixed income investment Fund.
</TABLE>

*Positions with the TCW Group, Inc. and its affiliates may have changed over
time.

Advisory Agreement

40
<PAGE>

marketing the Funds, including sales personnel compensation, from legitimate
profits from its investment advisory fees and other resources available to it.
In addition, the Adviser may reimburse third party administrators for
retirement plan shareholder servicing expenses. Under the Advisory Agreement,
the Funds pay to the Adviser as compensation for the services rendered,
facilities furnished, and expenses paid by it the following fees:

<TABLE>
<CAPTION>
Fund Annual Management Fee (As Percent of Average Net Asset Value)
- --------------------------------------------------------------------------------------
<S> <C>
Asia Pacific Equities 1.00%
Emerging Markets Equities 1.00%
Emerging Markets Income 0.75%
European Equities 0.75%
Latin America Equities 1.00%
International Equities --
Japanese Equities 0.75%
</TABLE>

The Advisory Agreement for International Equities provides that the Fund does
not pay a direct management fee. However, as a "Fund of Funds" investing its
assets in a mix of other Galileo Funds, International Equities will bear its
proportionate share of the management fee of any other Fund in which it
invests.

The Adviser has retained, at its sole expense, TCW Asia to provide investment
advisory services for the Asia Pacific Equities and Emerging Markets Equities
Funds, and TCW London to provide such services with respect to the Emerging
Markets Equities, European Equities, International Equities and Japanese
Equities Funds. Under the Sub-Advisory Agreements the Sub-Advisers assist the
Adviser in performing its advisory functions in respect of the Funds.

The Advisory and Sub-Advisory Agreements provide that the Adviser and Sub-
Advisers, respectively, shall not be liable for any error of judgment or
mistake of law or for any loss suffered by a Fund in connection with the
matters to which the agreements relate, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser or Sub-
Advisers in the performance of their duties or from reckless disregard by them
of their duties under each respective agreement.

41
<PAGE>

Multiple Class Structure

Each Fund currently offers two classes of shares, Institutional Class shares
and Class N shares. Shares of each class of a Fund represents an equal pro rata
interest in that Fund and generally gives you the same voting, dividend,
liquidation, and other rights. The Institutional Class shares are offered at
the current net asset value. The Class N shares are also offered at the current
net asset value, but will be subject to fees imposed under a distribution plan
("Distribution Plan") adopted pursuant to Rule 12b-1 under the 1940 Act.
Pursuant to the Distribution Plan, each Fund compensates the Funds' distributor
at a rate equal to 0.25% of the average daily net assets of that Fund
attributable to its Class N shares for distribution and related services.
Because these fees are paid out of the Fund's Class N assets on an on-going
basis, over time, these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

42
<PAGE>

Your Investment

Account Policies and Services

Buying shares

You pay no sales charges to invest in a Fund. Your price for Fund shares is the
Fund's net asset value per share (NAV) which is calculated as of the close of
trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) every
day the exchange is open. Your order will be priced at the next NAV calculated
after your order is accepted by the Fund. Orders received by a Fund's Transfer
agent from dealers, brokers or other service providers after the NAV for the
day is determined will receive that same day's NAV if the orders were received
by the dealers, brokers or service providers from their customers prior to 4:00
p.m. and were transmitted to and received by the transfer agent prior to 8:00
a.m. Eastern time on the next day. A Fund's investments are valued based on
market value, or where market quotations are not readily available, based on
fair value as determined in good faith by the Fund's Board.

Minimums

Selling shares

Before selling recently purchased shares, please note that if the Fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to fifteen days.

43
<PAGE>

Written sell order

Some circumstances require written sell orders, along with signature
guarantees. These include:

. amounts of $100,000 or more

. amounts of $1,000 or more on accounts whose address has been changed within
the last 30 days

. requests to send the proceeds to a payee or address different than what is on
our records

Exchange privilege

You can exchange from one Class I Galileo Fund into another. You must meet the
investment minimum of the Fund you are exchanging into. You can request your
exchange in writing or by phone. Be sure to read the current prospectus for any
Fund into which you are exchanging. Any new account established through an
exchange will have the same privileges as your original account (as long as
they are available).

Third-party transactions

You may buy and redeem Fund shares through certain broker-dealers and financial
organizations and their authorized intermediaries. If purchases and redemptions
of Fund shares are arranged and settlement is made at an investors election
through a registered broker-dealer other than the Fund's distributor, that
broker-dealer may, at its discretion, charge a fee for that service.

Account statements

Every Fund investor automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.

44
<PAGE>

General policies

Large Redemption Amounts Each Fund restricts excessive trading
- ------------------------ (usually defined as more than four
exchanges out of the Fund within a
Each Fund also reserves the right calendar year). You are limited to one
to make a "redemption in kind"-- exchange of shares in the same Fund
payment in portfolio securities during any 15-day period except for the
rather than cash--if the amount International Equities Fund, 401(k) and
you are redeeming in any 90-day other group retirement accounts,
period is large enough to affect investors who purchase shares through
Fund operations (for example, if certain broker-dealers and asset
it equals more than $250,000 or allocation accounts managed by the
represents more than 1% of the Adviser or an affiliate. Each Fund
Fund's assets). reserves the right to:

. change or discontinue its exchange
privilege, or temporarily suspend this
privilege during unusual market
conditions

. delay sending out redemption proceeds
for up to seven days (generally applies
only in cases of very large
redemptions, excessive trading or
during unusual market conditions)

45
<PAGE>

Complete the New Account Form. Mail your New
Account Form and a check made payable to
TCW Galileo _______ Fund to:

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- --------------------------------------------------------------------------------------------------------------------------
By Telephone
Please contact the Transfer Agent at
(800) 248-4486 for a New Account Form.

Wire: Have your bank send your investment to: (Same)

United Missouri Bank of
Kansas City, N.A.
ABA No. 101000695
DST Systems, Inc./AC 9870371553
FBO TCW Galileo ________ Fund
(Name on the Fund Account)
(Fund Account Number)

- --------------------------------------------------------------------------------------------------------------------------
Via Exchange
Call the Transfer Agent at (800) 248-4486 or
the Investor Relations Department at
(800) 386-3829.
The new account will have the same registration
as the account from which you are exchanging.
</TABLE>

If you need help completing the New Account Form, please call the Transfer
Agent at (800) 248-4486, the Investor Relations Department at TCW Galileo
Funds. at (800) FUND TCW (800) 386-3829 or your investment representative at
TCW Galileo Funds.

46
<PAGE>

<TABLE>
<CAPTION>
TO SELL OR EXCHANGE SHARES
- -------------------------------------------------------------
<S> <C>
By Mail To reach the Transfer Agent,
Write a letter of instruction that includes: DST Systems, Inc., call toll free
. your name(s) and signature(s) as on the account form in the U.S.
. your account number
. the Fund name (800) 248-4486
. the dollar amount you want to sell or exchange Outside the U.S.
. how and where to send the proceeds (816) 843-7166 (collect)
- -------------------------------------------------------------
Obtain a signature guarantee or other documentation, if To reach your investment repre-
required (see "Account Policies--Selling Shares"). sentative or the Investor Rela-
tions Department at TCW Galileo
Mail your letter of instruction to: Funds, call toll free in the U.S.

Regular Mail (800) 386-3829
TCW Galileo Funds, Inc.
DST Systems, Inc.
P.O. Box 419951
Kansas City, MO 64141-6951

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- -------------------------------------------------------------
By Telephone

Be sure the Fund has your bank account information on file.
Call the Transfer Agent at (800) 248-4486 to request your
transaction. Proceeds will be wired to your bank.

Telephone redemption requests must be for a minimum of
$1,000.

- -------------------------------------------------------------
System Withdrawal Plan: Call (800) 248-4486 to
request a form to add the plan. Complete the form, specifying
the amount and frequency of withdrawals you would like.

Be sure to maintain an account balance of $25,000 or more.
Systematic Withdrawal plans are subject to a minimum annual
withdrawal of $500.
</TABLE>

47
<PAGE>

Distributions and Taxes

The amount of dividends of net investment income and distributions of net
realized long and short-term capital gains payable to shareholders will be
determined separately for each Fund. Dividends from the net investment income
of the Emerging Markets Income Fund will be declared and paid monthly.
Dividends from the net investment income of each other Fund will be declared
and paid annually. The Funds will distribute any net realized long or short-
term capital gains at least annually. Your distributions will be reinvested in
the fund unless you instruct the fund otherwise. There are no fees or sales
charges on reinvestments.

Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash--unless you are exempt from taxation or entitled
to tax deferral. Capital gains distributions may be taxable at different rates
depending on the length of time a Fund has held the assets sold. Early each
year, you will be notified as to the amount and Federal tax status of all
distributions paid during the prior year. Distributions may also be subject to
state or local taxes. The tax treatment of redemptions from a retirement plan
account may differ from redemptions from an ordinary shareholder account. If
you redeem shares of a Fund or exchange them for shares of another Fund, any
gain on the transaction may be subject to tax. You must provide the Funds with
a correct taxpayer identification number (generally your Social Security
Number) and certify that you are not subject to backup withholding. If you fail
to do so, the IRS can require the Funds to withhold 31% of your taxable
distributions and redemptions. Federal law also requires the Funds to withhold
30% or the applicable tax treaty rate from dividends paid to nonresident alien,
non-U.S. partnership and non-U.S. corporation shareholder accounts.

This is a brief summary of some of the tax laws that affect your investment in
the Fund. Please see the Statement of Additional Information and your tax
adviser for further information.

48
<PAGE>

Financial Highlights

TCW Galileo Asia Pacific Equities Fund

<TABLE>
<CAPTION>
March 1, 1994
(Commencement
of Operations)
Year Ended October 31 through
------------------------------------- October 31,
1998 1997 1996 1995 1994
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning of period $7.37 $9.61 $8.67 $10.19 $10.00
-----------------------------------------------------
Investment operations:
Investment income (loss)--net 0.02 (0.01) 0.06 0.06 0.03
Net realized and unrealized gain (loss) on
investments and foreign currency (1.04) (2.10) 0.93 (1.19) 0.16
-----------------------------------------------------
Total from investment operations (1.02) (2.11) 0.99 (1.13) 0.19
-----------------------------------------------------
Distributions:
Dividends from investment income--net -- (0.08) (0.05) (0.01) --
Dividends from net realized gains on investments (1.26) -- -- (0.16) --
Dividends in excess of net investment income -- (0.05) -- (0.22) --
-----------------------------------------------------
Total Distributions (1.26) (0.13) (0.05) (0.39) --
-----------------------------------------------------
Net asset value, end of period $5.09 $7.37 $9.61 $8.67 $10.19
-----------------------------------------------------

Total return (%) (14.80)% (22.40)% 11.36% (10.98)% 1.90%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $8,482 $21,327 $48,266 $46,709 $54,019
Ratio of expenses to average net assets (%) 2.48% 1.49% 1.43% 1.47%/3/ 1.40%/2/,/3/
Ratio of net income (loss) to average net assets (%) 0.36% (0.02)% 0.66% 0.74% 0.45%/2/
Portfolio turnover rate (%) 190.33% 81.92% 84.81% 102.01% 46.75%/1/
</TABLE>

/1/ For the period March 1, 1994 (commencement of operations) through October
31, 1994 and not indicative of a full year's operating results.
/2/ Annualized.
/3/ The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
ordinary operating expenses of the Fund to 1.40% of net assets through December
31, 1994. Had such action not been taken, total annualized operating expenses
for the period March 1, 1994 (commencement of operations) through October 31,
1994 would have been 1.60% of average net assets and for the fiscal year ended
October 31, 1995, total annualized operating expenses would have been 1.51% of
average net assets.

49
<PAGE>

Financial Highlights

TCW Galileo Emerging Markets Equities Fund

<TABLE>
<CAPTION>
March 1, 1994
(Commencement
of Operations)
Year Ended October 31 through
------------------------------------ October 31,
1998 1997 1996 1995 1994
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning of period $8.32 $8.18 $7.19 $9.73 $10.00
--------------------------------------------------
Investment operations:
Investment income (loss)--net 0.09 0.03 0.07 0.04 (0.01)
Net realized and unrealized gain (loss) on investments
and foreign currency (2.83) 0.22 0.94 (2.58) (0.26)
--------------------------------------------------
Total from investment operations (2.74) 0.25 1.01 (2.54) (0.27)
--------------------------------------------------
Distributions:
Dividends from investment income--net (0.01) (0.11) (0.02) -- --
--------------------------------------------------
Total Distributions (0.01) (0.11) (0.02) -- --
--------------------------------------------------
Net asset value, end of period $5.57 $8.32 $8.18 $7.19 $9.73
--------------------------------------------------

Total return (%) (32.97)% 2.82% 14.14% (26.11)% (2.70)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $18,763 $47,726 $57,639 $51,873 $70,212
Ratio of expenses to average net assets (%) 1.70% 1.50% 1.41% 1.55% 1.70%/2/
Ratio of net income to average net assets (%) 1.15% 0.36% 0.82% 0.54% (0.09)%/2/
Portfolio turnover rate (%) 102.28% 79.80% 83.76% 74.24% 61.28%/1/
</TABLE>

/1/For the period March 1, 1994 (commencement of operations) through October
31, 1994 and not indicative of a full year's operating results.
/2/Annualized.

50
<PAGE>

Financial Highlights

TCW Galileo Emerging Markets Income Fund

<TABLE>
<CAPTION>
June 3, 1998
(Commencement
of Operations)
through
October 31, 1998
----------------
<S> <C>
Per-Share Data ($)
Net asset value, beginning of period $10.00
----------------
Investment operations:
Investment income--net 0.37
Net realized and unrealized gain (loss) on investments and foreign currency (3.41)
----------------
Total from investment operations (3.04)
----------------
Distributions:
Dividends from investment income--net (0.37)
Dividends in excess of net investment income (0.01)
----------------
Total Distributions (0.38)
----------------
Net asset value, end of period $6.58
----------------
Total return (%) (30.67)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $30,090
Ratio of expenses to average net assets (%) 1.53%/2/
Ratio of net income to average net assets (%) 11.90%/2/
Portfolio turnover rate (%) 68.46%/1/
</TABLE>

/1/For the period June 3, 1998 (commencement of operations) through October 31,
1998 and not indicative of a full year's operating results.
/2/Annualized.

51
<PAGE>

Financial Highlights

TCW Galileo European Equities Fund

<TABLE>
<CAPTION>
November 3, 1997
(Commencement
of Operations)
through
October 31, 1998
----------------
<S> <C>
Per-Share Data ($)
Net asset value, beginning of period $10.00
----------------
Investment operations:
Investment income--net 0.06
Net realized and unrealized gain (loss) on investments and foreign currency 1.64
----------------
Total from investment operations 1.70
----------------
Net asset value, end of period $11.70
----------------
Total return (%) 17.00%/1/
Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $63,994
Ratio of expenses to average net assets (%) 1.06%/2/
Ratio of net income to average net assets (%) 0.52%/2/
Portfolio turnover rate (%) 72.05%/1/
</TABLE>

/1/For the period November 3, 1997 (commencement of operations) through October
31, 1998 and not indicative of a full year's operating results.
/2/Annualized.

52
<PAGE>

Financial Highlights

TCW Galileo International Equities Fund

Total return (%) 7.50%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $74,853
Ratio of expenses to average net assets (%) 0.17%/2/
Ratio of net income to average net assets (%) 0.50%/2/
Portfolio turnover rate (%) 21.12%/1/
</TABLE>

/1/For the period November 3, 1997 (commencement of operations) through October
31, 1998 and not indicative of a full year's operating results.
/2/Annualized.

53
<PAGE>

Financial Highlights

TCW Galileo Japanese Equities Fund

<TABLE>
<CAPTION>
November 3, 1997
(Commencement
of Operations)
through
October 31, 1998
----------------
<S> <C>
Per-Share Data ($)
Net asset value, beginning of period $10.00
----------------
Investment operations:
Investment income (loss)--net (0.04)
Net realized and unrealized gain (loss) on investments and foreign currency (1.46)
----------------
Total from investment operations (1.50)
Distributions:
Dividends from investment income--net (0.07)
----------------
Total Distributions (0.07)
----------------
Net asset value, end of period $8.43
----------------

Total return (%) (14.88)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) 28,648
Ratio of expenses to average net assets (%) 1.20%/2/,/3/
Ratio of net income to average net assets (%) (0.48)%/2/
Portfolio turnover rate (%) 178.53%/1/
</TABLE>

/1/For the period November 3, 1997 (commencement of operations) through October
31, 1998 and not indicative of a full year's operating results.
/2/Annualized.
/3/The Adviser has voluntarily agreed to reduce its fee, or to pay the operat-
ing expenses of the Fund, to the extent necessary to limit ordinary operating
expenses of the Fund to 1.20% of net assets through December 31, 1998. Had such
action not been taken, total annualized operating expenses for the period No-
vember 3, 1997 (commencement of operations) through October 31, 1998 would have
been 1.51% of average net assets.

54
<PAGE>

Financial Highlights

TCW Galileo Latin America Equities Fund

Total return (%) (29.95)% 26.24% 27.08% (40.96)% (0.79)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $11,796 $55,336 $68,323 $38,942 $122,610
Ratio of expenses to average net assets (%) 1.64% 1.46% 1.44% 1.58% 1.36%/2/
Ratio of net income to average net assets (%) 1.13% 0.87% 1.12% 0.59% 0.11%/2/
Portfolio turnover rate (%) 32.33% 21.17% 44.32% 75.62% 143.65%/1/

/1/For the ten months ended October 31, 1994 and not indicative of a full
year's operating results.
/2/Annualized.
</TABLE>

55
<PAGE>

<TABLE>
<S> <C>
FOR MORE INFORMATION

For all shareholder account TCW Galileo Funds, Inc.
information such as transactions
and account inquiries: SEC file number: 811-7170

Call (800) 248-4486 More information on the Fund is available
free upon request, including the following:
For information regarding the TCW
Galileo Funds, Inc.: Annual / Semi-Annual Report

Call (800) FUNDTCW (386-3829) Describes the Fund's performance, lists
portfolio holdings and contains a letter
In writing: from the Fund's portfolio manager
discussing recent market conditions,
TCW Galileo Funds, Inc. economic trends and Fund strategies.
c/o DST System, Inc.,
P.O. Box 419951 Statement of Additional Information (SAI)
Kansas City, MO 64141-6951
Provides more details about the Fund and
On the Internet: its policies. A current SAI is on file
Text-only versions of Fund documents filed with the Securities and Exchange Commission
with the SEC can be viewed online or (SEC) and is incorporated by reference
downloaded from: and is legally considered part of this
prospectus.
SEC
http://www.sec.gov

TCW GALILEO FUNDS, INC.
http://www.tcwgroup.com

You can also obtain copies by visiting the
SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-
0330) or by sending your request and a
duplicating fee to the SEC's Public
Reference Section, 450 Fifth Street,
N.W., Washington, DC 20549-6009.
</TABLE>
56
<PAGE>

TCW Galileo
Funds, Inc.

This prospectus tells you about the Class N shares of one of the separate
investment funds offered by TCW Galileo Funds, Inc., each of which has
different investment objectives and policies. Please read this document
carefully, and keep it for future reference.

TCW Galileo Aggressive Growth Equities Fund

March 1, 1999

[LOGO OF TCW GALILEO FUNDS]
THE POWER OF INDEPENDENT THOUGHT

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
General Fund Information

Investment Objectives and Principal Strategies............................. 2

Principal Risks............................................................ 2

Performance Summary........................................................ 4

Fund Expenses and Expense Example.......................................... 5

Investment Objectives/Approach............................................. 6

Main Risks................................................................. 7

Risk Considerations........................................................ 8

Management of the Fund..................................................... 15

Multiple Class Structure................................................... 16

Your Investment
Account Policies and Services.............................................. 16

To Open an Account/To Add to an Account.................................... 19

To Sell or Exchange Shares................................................. 20

Distributions and Taxes.................................................... 21

Financial Highlights....................................................... 22

For More Information....................................................... 23
</TABLE>

1
<PAGE>

General Fund Information

Investment Objectives and Principal Strategies

The Fund is affected by changes in the economy, or in securities and other
markets. There is also the possibility that investment decisions the Adviser
makes will not accomplish what they were designed to achieve or that companies
in which the Fund invests will have disappointing performance or not pay their
debts.

<TABLE>
<CAPTION>
TCW Galileo Funds, Inc. Investment Objectives Principal Investment Strategies
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
TCW Galileo Aggressive Long-term capital appreciation Invests in equity securities issued by companies
Growth Equities Fund that appear to offer superior growth prospects
</TABLE>

Under adverse market conditions, the Fund could invest some or all of its
assets in money market securities. Although the Fund would do this only in
seeking to avoid losses, it could have the effect of reducing the benefit from
any upswing in the market.

Principal Risks

Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you--and the more you can lose. Since shares
of the Fund represent an investment of securities with fluctuating market
prices, the value of Fund shares will vary as the Fund's portfolio securities
increase or decrease in value. Therefore, the value of an investment in the
Fund could go down as well as up. All investments are subject to:

. MARKET RISK

There is the possibility that the returns from the types of securities in
which the Fund invests will underperform returns from the various general
securities markets or different asset classes. Different types of securities
tend to go through cycles of outperformance and underperformance in
comparison to the general securities markets.

. SECURITIES SELECTION RISK

There is the possibility that the specific securities held in the Fund's
portfolio will underperform other funds in the same asset class or
benchmarks that are representative of the general performance of the asset
class because of the portfolio manager's choice of securities.

. PRICE VOLATILITY

There is the possibility that the value of the Fund's portfolio will change
as the prices of its investments go up or down. Although stocks offer the

2
<PAGE>

potential for greater long-term growth than most fixed income securities,
stocks generally have higher short-term volatility.

The Fund may also be subject to the following risks:

. LIQUIDITY RISK

There is the possibility that the Fund may lose money or be prevented from
earning capital gains if it cannot sell a security at the time and price
that is most beneficial to the Fund. The Fund is subject to liquidity risk
because it invests primarily in securities of medium sized companies.

. FOREIGN INVESTING RISK

There is the likelihood that foreign investments may be riskier than U.S.
investments because of a lack of political stability, foreign controls on
investment and currency exchange rates, fluctuations in currency exchange
rates, withholding taxes, and lack of adequate company information. The Fund
is subject to foreign investing risk because it may invest a portion of its
assets in foreign company securities. In addition, because foreign
securities generally are denominated and pay dividends or interest in
foreign currencies, and the Fund may hold various foreign currencies, the
value of the net assets of the Fund as measured in U.S. dollars can be
affected favorably or unfavorably by changes in exchange rates.

Because the Fund is non-diversified for Investment Company Act of 1940 ("1940
Act") purposes, it may invest more than 5% of its total assets in the
securities of any one issuer. Consequently, its exposure to credit and market
risks associated with that issuer is increased.

Your investment is not a bank deposit, and it is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.

3
<PAGE>

Performance Summary

The two tables below show the Fund's annual returns and its long-term
performance with respect to its Institutional Class shares (Class N shares of
the Fund commenced operations on March 1, 1999). The first table shows you how
the Fund's performance has varied from year to year. The second compares the
Fund's performance over time to that of a broad-based securities index. Both
tables assume reinvestment of dividends and distributions. The performance
information includes performance of a predecessor limited partnership, which
was managed by an affiliate of TCW Funds Management, Inc. using the same
investment strategy as the Fund. The performance of the partnership was
calculated using performance standards applicable to private investment
partnerships which take into account all elements of total return and reflect
the deduction of all fees and expenses of operations. The predecessor limited
partnership was not registered under the 1940 Act and, therefore was not
subject to certain investment restrictions imposed by the 1940 Act and
Subchapter M of the Internal Revenue Code of 1986, as amended. If the limited
partnership had been registered under the 1940 Act its performance might have
been adversely affected. As with all mutual funds, past performance is not a
prediction of future results.

Year by year total return (%)
as of December 31 each year*

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 43.6%

Best and worst quarterly performance during this period

<TABLE>
<CAPTION>
Fund Performance
- ----------------------------------------------------
<S> <C>
. Aggressive Growth Equities Fund
Quarter ending December 31, 1998 47.80% (Best)
Quarter ending March 31, 1998 -12.10% (Worst)
</TABLE>

<TABLE>
<CAPTION>
Average annual total return as of
December 31 1 year Since inception
- ------------------------------------------------------------
<S> <C> <C>
. Aggressive Growth Equities Fund 63.3% 34.2%
- ------------------------------------------------------------
S&P 400 Mid-Cap 19.1% 23.2%
</TABLE>

4
<PAGE>

Fund Expenses and Expense Example

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Annual Fund operating expenses are paid
out of Fund assets, so their effect is included in the share price. The Class N
shares of the Fund have no sales charge (load), but are subject to Rule 12b-1
distribution fees.

FEE TABLE

<TABLE>
<CAPTION>
Aggressive
Growth Equities
----------------
<S> <C>
Shareholder Transaction Fees
1) Redemption Fees.............................................. None
2) Exchange Fees................................................ None
3) Contingent Deferred Sales Load............................... None
4) Sales Load on Reinvested Dividends........................... None
5) Sales Load on Purchases...................................... None

Annual Fund Operating Expenses
Management Fees................................................ 1.00%
Distribution (12b-1) Fees...................................... 0.25%
Other Expenses................................................. 0.17%
----------------
Total Annual Fund Operating Expenses........................... 1.42%
</TABLE>

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth Equitites..................... $145 $449 $776 $1,702
</TABLE>

5
<PAGE>

Investment Objectives/Approach

The Fund seeks long-term capital appreciation. To pursue this goal, the Fund
anticipates that at least 65% of the value of its total assets will be invested
in equity securities (except when maintaining a temporary defensive position)
of issuers which are characterized as "growth" companies according to criteria
established by the Adviser. These securities include common and preferred stock
and convertible securities. In managing the Fund's investments, the Adviser
will focus on emerging companies that exhibit this characteristic.

Concepts to understand The Adviser utilizes a "bottom-up"
approach to identify securities for
Emerging growth companies are investment. First, the Adviser uses
companies that are likely to show quantitative and qualitative criteria to
rapid growth through reinventing screen companies. The Adviser then
an existing industry or subjects companies that make it through
pioneering a new industry. this screening process to fundamental
analysis, which generally looks for at
least some of the following factors:

. a demonstrated record of consistent
earnings growth or the potential to
grow earnings

. an ability to earn an attractive return
on equity

. a price/earnings ratio which is less
than the Adviser's internally estimated
three-year earnings growth rate

. a large and growing market share

. a strong balance sheet

. significant ownership interest by
management and a strong management
team.

Christopher J. Ainley and Douglas S.
Foreman are the Fund's portfolio
managers.

6
<PAGE>

Main Risks

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences such as increased
realized gains for investors.

7
<PAGE>

Risk Considerations

Please consider the following risks before investing in the Fund.

Various market risks can affect the price or liquidity of an issuer's
securities. Adverse events occurring with respect to an issuer's performance or
financial position can depress the value of the issuer's securities. The
liquidity in a market for a particular security will affect its value and may
be affected by factors relating to the issuer, as well as the depth of the
market for that security. Other market risks that can affect value include a
market's current attitudes about types of securities, market reactions to
political or economic events, and tax and regulatory effects (including lack of
adequate regulations for a market or particular type of instrument). Market
restrictions on trading volume can also affect price and liquidity.

General Investment Risk Prices of many securities tend to be more
volatile in the short-term. Therefore, an
Since shares of the Fund investor who trades frequently or redeems
represent an investment in in the short-term is more likely to incur
securities with fluctuating loss than an investor who holds
market prices, the value of Fund investments for the longer term. The
shares will vary as the value of fewer the number of issuers in which the
the Fund's portfolio securities Fund invests, the greater the potential
increases or decreases. volatility of its portfolio.
Therefore, the value of an
investment in the Fund could go The Adviser may temporarily invest up to
down as well as up. 100% of the Fund's assets in high quality
short-term money market instruments if it
believes adverse economic or market
conditions, such as excessive volatility
or sharp market declines, justify taking
a defensive investment posture. If the
Fund attempts to limit investment risk by
temporarily taking a defensive investment
position, it may be unable to pursue its
investment objective during that time,
and it may miss out on some or all of an
upswing in the securities markets.

8
<PAGE>

Investment in foreign securities involves special risks in addition to the
usual risks inherent in domestic investments. These include: political or
economic instability; the unpredictability of international trade patterns; the
possibility of foreign governmental actions such as expropriation,
nationalization or confiscatory taxation; the imposition or modification of
foreign currency or foreign investment controls; the imposition of withholding
taxes on dividends, interest and gains; price volatility; and fluctuations in
currency exchange rates.

Foreign Investing As compared to U.S. companies, foreign
issuers generally disclose less financial
and other information publicly and are
subject to less stringent and less
uniform accounting, auditing and
financial reporting standards. Foreign
countries typically impose less thorough
regulations on brokers, dealers, stock
exchanges, insiders and listed companies
than does the U.S, and foreign securities
markets may be less liquid and more
volatile than domestic markets.
Investment in foreign securities involves
higher costs than investment in U.S.
securities, including higher transaction
and custody costs as well as the
imposition of additional taxes by foreign
governments. In addition, security
trading practices abroad may offer less
protection to investors such as the Fund.
Settlement of transactions in some
foreign markets may be delayed or may be
less frequent than in the U.S., which
could affect the liquidity of the Fund's
portfolio. Also, it may be more difficult
to obtain and enforce legal judgments
against foreign corporate issuers than
against domestic issuers and it may be
impossible to obtain and enforce
judgments against foreign governmental
issuers.

Because foreign securities generally are
denominated and pay dividends or interest
in foreign currencies, and the Fund may
hold various foreign currencies from time
to time, the value of the net

9
<PAGE>

The forward currency market for the purchase or sale of U.S. dollars in most
countries is not highly developed, and in certain countries, there may be no
such market. If a devaluation of a currency is generally anticipated, the Fund
may not be able to contract to sell the currency at an exchange rate more
advantageous than that which would prevail after the anticipated amount of
devaluation, particularly in regards to forward contracts for local Latin
American currencies in view of the relatively small, inactive or even non-
existent market for these contracts. In the event the Fund holds securities
denominated in a currency that suffers a devaluation, the Fund's net asset
values will suffer corresponding reductions. In this regard, in December 1994,
the Mexican government determined to allow the Mexican peso to trade freely
against the U.S. dollar rather than within a controlled band, which action
resulted in a significant devaluation of the Mexican peso against the dollar.
Further, in July 1997, the Thai and Philippine governments allowed the baht and
peso, respectively, to trade freely against the U.S. dollar resulting in a
sharp devaluation of both currencies, and in 1998 Russia did the same, causing
a sharp devaluation of the ruble.

10
<PAGE>

Fixed Income Securities "Credit risk" refers to the likelihood
that an issuer will default in the
payment of principal and/or interest on
an instrument. Financial strength and
solvency of an issuer are the primary
factors influencing credit risk. In
addition, lack of or inadequacy of
collateral or credit enhancements for a
fixed income security may affect its
credit risk. Credit risk of a security
may change over its life, and securities
which are rated by rating agencies are
often reviewed and may be subject to
downgrade.

The Fund may invest in convertible
securities rated below investment grade.
Debt securities that are rated below
investment grade are considered to be
speculative; they are also commonly known
as "junk" bonds. Generally, lower-rated
debt securities provide a higher yield
than higher rated debt securities of
similar maturity but are subject to
greater credit risk than higher rated
securities of similar maturity. Such
securities are regarded as predominantly
speculative with respect to the issuer's
continuing ability to meet principal and
interest payments. Because investment in
lower quality securities involves greater
investment risk, achievement of the
Fund's investment objective will be more
dependent on the Adviser's analysis than
would be the case if the Fund were
investing in higher quality bonds. In
addition, lower quality securities may be
more susceptible to real or perceived

11
<PAGE>

adverse economic and individual corporate developments than would investment
grade bonds. Moreover, the secondary trading market for lower quality
securities may be less liquid than the market for investment grade bonds. This
potential lack of liquidity may make it more difficult for the Adviser to value
accurately certain portfolio securities.

The Fund is non-diversified for 1940 Act purposes and as such may invest a
larger percentage of its assets in individual issuers than a diversified
investment company. In this regard, the Fund is not subject to the general
limitation that

Non-Diversified Status it not invest more than 5% of its total
assets in the securities of any one
issuer. To the extent the Fund makes
investments in excess of 5% of its assets
in a particular issuer, its exposure to
credit and market risks associated with
that issuer is increased. However, the
Fund's investments will be limited so as
to qualify for the special tax treatment
afforded "regulated investment companies"
under the Internal Revenue Code of 1986,
as amended.

12
<PAGE>

Year 2000 assurance that they will be successful,
or that interaction with other non-
complying computer systems will not
impair their services at that time. The
Adviser has been, and is currently, in
contact with each of its external service
providers to evaluate their readiness for
the year 2000. The Adviser has requested
each of its external service providers to
either (i) prepare a description of its
process for identifying date sensitive
areas, its approach for implementing
changes, its testing methodology, along
with its timetable for completion, or
(ii) certify as to its year 2000
compliance.

In addition, it is possible that the
markets for securities in which the Fund
invests may be negatively affected by
computer failures throughout the
financial services industry commencing
January 1, 2000. Improperly functioning
trading systems may result in settlement
problems. In addition, corporate and
governmental data processing errors may
result in production problems for
individual companies and create overall
economic uncertainties. Earnings of
individual issuers will be affected by
remediation costs which may be
substantial. Individual firms may further
experience disruptions to their business
due to the failure of their counterparts
to address year 2000 problems, or could
experience further disruption to the

13
<PAGE>

economy at large, which could adversely affect corporate earnings generally and
the value of their securities. Accordingly, the Fund's portfolio investments
may be negatively affected.

European Economic and Monetary a single European currency (the euro),
Union which was introduced on January 1, 1999
and is expected to replace the existing
national currencies of all initial EMU
participants by July 1, 2002. Upon
introduction of the euro, certain
securities (beginning with government and
corporate bonds) have been redonominated
in the euro and, thereafter trade and
make dividend and other payments only in
euros.

Like other investment companies and
business organizations, including the
companies in which the Fund invests, the
Fund could be adversely affected: (i) if
the euro, or EMU as a whole does not take
affect as planned; (ii) if a
participating country withdraws from EMU;
or (iii) if the computing, accounting and
trading systems used by the Fund's
service providers, or by other business
entities with which the Fund or its
service providers do business, are not
capable of recognizing the euro as a
distinct currency at the time of, and
following euro conversion.

14
<PAGE>

Management of the Fund

Investment Adviser

The Fund's investment adviser is TCW Funds Management, Inc. (the "Adviser") and
is headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles,
California 90017. As of December 31, 1998, the Adviser and its affiliated
companies, which provide a variety of trust, investment management and
investment advisory services, had over $50 billion under management or
committed for management.

Portfolio Managers

Listed below are the individuals who have been primarily responsible for the
day-to-day portfolio management of the Fund, including a summary of each
person's business experience during the past five years:

<TABLE>
<CAPTION>
Portfolio Manager(s) Business Experience During Last Five Years*
- -------------------------------------------------------------------------------
<C> <S>
Christopher J. Ainley Managing Director, the Adviser, TCW Asset Management
Company and Trust Company of the West. Prior to joining
TCW in 1994 he was a portfolio manager with Putnam
Investments.
Douglas S. Foreman Group Managing Director and Chief Investment Officer-
U.S. Equities, the Adviser, TCW Asset Management Company
and Trust Company of the West since May 1994.
Previously, he was a portfolio manager with Putnam
Investments.
</TABLE>

* Positions with the TCW Group, Inc. and its affiliates may have changed over
time.

Advisory Agreement

The Fund and the Adviser have entered into an Investment Advisory and
Management Agreement (the "Advisory Agreement"), under the terms of which the
Fund has employed the Adviser to manage the investment of its assets, to place
orders for the purchase and sale of its portfolio securities, and to be
responsible for overall management of the Fund's business affairs, subject to
control by the Board of Directors. The Adviser also pays certain costs of
marketing the Fund, including sales personnel compensation, from legitimate
profits from its investment advisory fees and other resources available to it.
Under the Advisory Agreement, the Fund pays to the Adviser as compensation for
the services rendered, facilities furnished, and expenses paid by it the
following fees:

The Adviser has agreed to reduce its investment advisory fee or to pay the
ordinary operating expenses of the Fund to the extent necessary to limit the
Fund's ordinary annual operating expenses to an amount not to exceed the
trailing monthly expense ratio average for comparable funds calculated by
Lipper Analytical Services, Inc. through December 31, 1999.

15
<PAGE>

The Advisory Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which the agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part
of the Adviser in the performance of its duties or from reckless disregard by
the Adviser of its duties under the agreement.

Multiple Class Structure

The Fund currently offers two classes of shares, Institutional Class shares and
Class N shares. Shares of each class of the Fund represent an equal pro rata
interest in the Fund and generally gives you the same voting, dividend,
liquidation, and other rights. The Institutional Class shares are offered at
the current net asset value. The Class N shares are also offered at the current
net asset value, but will be subject to fees imposed under a distribution plan
("Distribution Plan") adopted pursuant to Rule 12b-1 under the 1940 Act.
Pursuant to the Distribution Plan, the Fund compensates the Fund's distributor
at a rate equal to 0.25% of the average daily net assets of the Fund
attributable to its Class N shares for distribution and related services.
Because these fees are paid out of the Fund's Class N assets on an on-going
basis, over time, these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

Your Investment

Account Policies and Services

Buying shares

You pay no sales charges to invest in the Fund. Your price for Fund shares is
the Fund's net asset value per share (NAV) which is calculated as of the close
of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time)
every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the Fund. Orders received by the
Fund's Transfer Agent from dealers, brokers or other service providers after
the NAV for the day is determined, will receive that same day's NAV if the
orders were received by the dealers, brokers or service providers from their
customers prior to 4:00 p.m. and were transmitted to and received by the
Transfer Agent prior to 8:00 a.m. Eastern time on the next day. The Fund's
investments are valued based on market value, or where market quotations are
not readily available, based on fair value as determined in good faith by the
Fund pursuant to procedures established by the Fund's Board.

16
<PAGE>

Minimums

<TABLE>
<CAPTION>
Initial IRA Additional
- -----------------------------------------------------------
<S> <C> <C> <C>
Aggressive Growth Equitites Fund $2,000 $500 $250
</TABLE>

The TCW Galileo Funds, Inc. may waive the minimum initial investment. All
investments must be in U.S. dollars. Third-party checks, except those payable
to an existing shareholder, will normally not be accepted. If your check or
wire does not clear, you will be responsible for any loss the Fund incurs.

Automatic Investment Plan ($100 minimum)

You may arrange to make investments on a regular basis through automatic
deductions from your bank checking account. Please call (800) 248-4486 for more
information and enrollment form.

Selling shares

Before selling recently purchased shares, please note that if the Fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to fifteen days.

Written sell order

Some circumstances require written sell orders, along with signature
guarantees. These include:

. amounts of $100,000 or more

. amounts of $1,000 or more on accounts whose address has been changed within
the last 30 days

. requests to send the proceeds to a payee or address different than what is on
our records

17
<PAGE>

Exchange privilege

You can exchange from one Class N Galileo Fund into another. You can request
your exchange in writing or by phone. Be sure to read the current prospectus
for any Fund into which you are exchanging. Any new account established through
an exchange will have the same privileges as your original account (as long as
they are available).

Third Party Transactions

Account statements

Every Fund investor automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.

General policies

If your non-retirement account falls below $1,000 as a result of redemptions
and or exchanges for six months or more, the Fund may close your account and
send you the proceeds upon 60 days' written notice.

Large Redemption Amounts The Fund restricts excessive trading
(usually defined as more than four
The Fund also reserves the right exchanges out of the Fund within a
to make a "redemption in kind"-- calendar year). You are limited to one
payment in portfolio securities exchange of shares in the Fund during any
rather than cash--if the amount 15-day period except investors in 401(k)
you are redeeming in any 90-day and other group retirement accounts,
period is large enough to affect investors who purchase shares through
Fund operations (for example, if certain broker dealers, and asset
it equals more than $250,000 or allocation accounts managed by the
represents more than 1% of the Adviser or an affiliate. The Fund
Fund's assets). reserves the right to:

18
<PAGE>

. refuse any purchase or exchange request that could adversely affect the Fund
or its operations, including those from any individual or group who, in the
Fund's view, are likely to engage in excessive trading

. change or discontinue its exchange privilege, or temporarily suspend this
privilege during unusual market conditions

. delay sending out redemption proceeds for up to seven days (generally applies
only in cases of very large redemptions, excessive trading or during unusual
market conditions).

<TABLE>
<CAPTION>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C>
In Writing
Complete the New Account Form. Mail your New
Account Form and a check made payable to
TCW Galileo Aggressive Growth Equities Fund to:

Regular Mail
TCW Galileo Funds, Inc. (Same, except that you should include a note
specifying the Fund name, your account number,
DST Systems, Inc. and the name(s) your account is registered in.)
P.O. Box 419951
Kansas City, MO 64141-6951

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- ----------------------------------------------------------------------------------------------------------
By Telephone

Please contact the Transfer Agent at
(800) 248-4486 for a New Account Form.

Wire: Have your bank send your investment to: (Same)
United Missouri Bank of Kansas City, N.A.
ABA No. 101000695
DST Systems, Inc./AC 9870371553
FBO TCW Galileo Aggressive Growth Equities Fund
(Name on the Fund Account)
(Fund Account Number)

- ----------------------------------------------------------------------------------------------------------
Via Exchange Call the Transfer Agent at (800) 248-4486. The
new account will have the same registration as
the account from which you are exchanging.
</TABLE>

If you need help completing the New Account Form, please call the Transfer
Agent at (800) 248-4486.

19
<PAGE>

<TABLE>
<CAPTION>
TO SELL OR EXCHANGE SHARES
- ------------------------------------------------------------ <C>
<S>
By Mail To reach the Transfer Agent,
Write a letter of instruction that includes: DST Systems, Inc., call toll free
. your name(s) and signature(s) as on the account form in the U.S.
. your account number
. the Fund name (800) 248-4486
. the dollar amount you want to sell or exchange Outside the U.S.
. how and where to send the proceeds (816) 843-7166 (collect)

- ------------------------------------------------------------
Obtain a signature guarantee or other documentation, if
required (see "Account Policies and Services--Selling
Shares").

Mail your letter of instruction
to:
Regular Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
P.O. Box 419951
Kansas City, MO 64141-6951

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- ------------------------------------------------------------

By Telephone

Be sure the Fund has your bank account information on file.
Call the Transfer Agent at (800) 248-4486 to request your
transaction. Proceeds will be wired to your bank.

Telephone redemption requests must be for a minimum of
$1,000.

- ------------------------------------------------------------
Systematic Withdrawal Plan: Call (800) 248-4486
to request a form to add the plan. Complete the form,
specifying the amount and frequency of withdrawals you would
like.

Be sure to maintain an account balance of $2,000 or more.
Systematic Withdrawal plans are subject to a minimum annual
withdrawal of $500.
</TABLE>

20
<PAGE>

Distributions and Taxes

The amount of dividends of net investment income and distributions of net
realized long and short-term capital gains payable to shareholders will be
determined separately for the Fund. Dividends from the net investment income of
the Fund will be declared and paid annually. The Fund will distribute any net
realized long or short-term capital gains at least annually. Your distributions
will be reinvested in the Fund unless you instruct the Fund otherwise. There
are no fees or sales charges on reinvestments.

In any fiscal year in which the Fund qualifies as a regulated investment
company and distributes to shareholders all of its net investment income and
net capital gains, the Fund is relieved of Federal income tax.

Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash--unless you are exempt from taxation or entitled
to tax deferral. Capital gains distributions may be taxable at different rates
depending on the length of time the Fund has held the assets sold. Early each
year, you will be notified as to the amount and Federal tax status of all
distributions paid during the prior year. Distributions may also be subject to
state or local taxes. The tax treatment of redemptions from a retirement plan
account may differ from redemptions from an ordinary shareholder account. If
you redeem shares of the Fund or exchange them for shares of another Fund, any
gain on the transaction may be subject to tax. You must provide the Fund with a
correct taxpayer identification number (generally your Social Security Number)
and certify that you are not subject to backup withholding. If you fail to do
so, the IRS can require the Fund to withhold 31% of your taxable distributions
and redemptions. Federal law also requires the Fund to withhold 30% or the
applicable tax treaty rate from dividends paid to nonresident alien, non-U.S.
partnership and non-U.S. corporation shareholder accounts.

This is a brief summary of some of the tax laws that affect your investment in
the Fund. Please see the Statement of Additional Information and your tax
adviser for further information.

21
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance for the fiscal years indicated. Certain information
reflects financial results for a single Fund share. "Total return" shows how
much your investment in the Institutional Class shares of the Fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions (Class N shares of the Fund commenced operations on
March 1, 1999). These figures have been audited by Deloitte & Touche LLP, whose
report, along with Company's financial statements, are included in the annual
report, which is available upon request.

TCW Galileo Aggressive Growth Equities Fund
(formerly TCW Galileo Mid-Cap Growth Fund)

<TABLE>
<CAPTION>
June 3, 1996
(Commencement
of
Year Ended Operations)
October 31 through
----------------- October 31,
1998 1997 1996
-------------------------------
<S> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning of period $9.40 $9.19 $10.00
-------------------------------
Investment operations:
Investment income (loss)--net (0.11) (0.08) (0.03)
Net realized and unrealized gain (loss)
on investments 2.06 0.29 (0.78)
-------------------------------
Total from investment operations 1.95 0.21 (0.81)
-------------------------------
Net asset value, end of period $11.35 $9.40 $9.19
-------------------------------

Total return (%) 20.74% 2.28% (8.10)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $84,904 $135,850 $92,430
Ratio of expenses to average net assets
(%) 1.17% 1.12% 1.20%/2/,/3/
Ratio of net income (loss) to average net
assets (%) (1.03)% (0.86)% (0.80)%/2/
Portfolio turnover rate (%) 55.36% 50.45% 19.19%/1/
</TABLE>

22
<PAGE>

<TABLE>

<S> <C>
For More Information TCW Galileo Funds, Inc.

For all shareholder account SEC file number: 811-7170
information such as transactions
and account inquiries: More information on the Fund is available
free upon request, including the following:
Call (800) 248-4486
Annual / Semi-Annual Report
For information regarding the TCW
Galileo Funds, Inc.: Describes the Fund's performance, lists
portfolio holdings and contains a letter
Call (800) FUNDTCW (386-3829) from the Fund's portfolio manager
discussing recent market conditions,
In writing: economic trends and Fund strategies.

TCW Galileo Funds, Inc. Statement of Additional Information (SAI)
c/o DST System, Inc.,
P.O. Box 419951 Provides more details about the Fund and
Kansas City, MO 64141-6951 its policies. A current SAI is on file
with the Securities and Exchange
On the Internet: Commission (SEC) and is incorporated by
Text only versions of Fund documents reference and is legally considered part
filed with the SEC can be viewed online or of this prospectus.
downloaded from:

SEC
http://www.sec.gov

TCW GALILEO FUNDS, INC.
http://www.tcwgroup.com

You can also obtain copies by visiting the
SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-
0330) or by sending your request and a
duplicating fee to the SEC's Public
Reference Section, 450 Fifth Street,
N.W., Washington, DC 20549-6009.
</TABLE>

23
<PAGE>

TCW Galileo
Funds, Inc.

TCW Galileo Core
Fixed Income Fund

March 1, 1999

[LOGO OF TCW GALILEO FUNDS]
THE POWER OF INDEPENDENT THOUGHT

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
General Fund Information

Investment Objectives and Principal Strategies............................. 2

Principal Risks............................................................ 2

Performance Summary........................................................ 5

Fund Expenses and Expense Example.......................................... 6

Investment Objectives/Approach............................................. 7

Main Risks................................................................. 8

Risk Considerations........................................................ 10

Management of the Fund..................................................... 20

Multiple Class Structure................................................... 21

Your Investment

Account Policies and Services.............................................. 22

To Open an Account/To Add to an Account.................................... 25

To Sell or Exchange Shares................................................. 26

Distributions and Taxes.................................................... 27

Financial Highlights....................................................... 28

For More Information....................................................... 29
</TABLE>

1
<PAGE>

General Fund Information

Investment Objectives and Principal Strategies

The Fund is affected by changes in the economy, or in securities and other
markets. Additionally, changes in interest rates will affect not only the
current return on the Fund, but the value of the capital investment will most
likely fluctuate up or down. There is also the possibility that investment
decisions the Adviser makes will not accomplish what they were designed to
achieve or that companies in which the Fund invests will have disappointing
performance or not pay their debts.

<TABLE>
<CAPTION>
TCW Galileo Funds, Inc. Investment Objectives Principal Investment Strategies
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TCW Galileo Core Fixed Income Fund Maximize current income and achieve above Invests in fixed income securities rated A
average total return consistent with prudent or higher by Moody's and S&P.
investment management over a full market
cycle
</TABLE>

Under adverse market conditions, the Fund could invest some or all of its
assets in money market securities. Although the Fund would do this only when
seeking to avoid losses, it could have the effect of reducing the benefit from
any upswing in the market.

Principal Risks

Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you--and the more you can lose. Since shares
of the Fund represent an investment in securities with fluctuating market
prices, the value of fund shares will vary as the value of the Fund's portfolio
securities increases or decreases in value. Therefore, the value of an
investment in the Fund could go down as well as up. All investments are subject
to:

. MARKET RISK

. SECURITIES SELECTION RISK

There is the possibility that the specific securities held in the Fund's
portfolio will underperform the other funds in the same asset class or will
underperform benchmarks that are representative of the general performance
of the asset class because of the portfolio manager's choice of securities.

2
<PAGE>

Because the Fund is a fixed-income fund. The Fund is subject (in varying
degrees) to the following additional risks:

. CREDIT RISK

There is the possibility that the Fund could lose money if an issuer is
unable to meet its financial obligations such as the payment of principal
and/or interest on an instrument, or goes bankrupt. The Fund is subject to
credit risk because it invests to some degree in below investment grade
fixed income securities.

. INTEREST RATE RISK

There is the possibility that the value of the Fund's portfolio investments
may fall since fixed income securities generally fall in value when interest
rates rise. The longer the term of a fixed income instrument, the more
sensitive it will be to fluctuations in value from interest rate changes.
Changes in interest rates may have a significant effect on the Fund because
it may hold securities with long terms to maturity.

In the case of mortgage-backed securities, rising interest rates tend to
extend the term to maturity of the securities, making them even more
susceptible to interest rate changes. When interest rates drop, not only can
the value of fixed income securities drop, but the yield can drop,
particularly where the yield on the fixed income securities is tied to
changes in interest rates, such as adjustable mortgages. Also when interest
rates drop, the holdings of mortgage-backed securities by the Fund can
reduce returns if the owners of the underlying mortgages pay off their
mortgages sooner than anticipated since the funds prepaid will have to be
reinvested at the then lower prevailing rates. This is known as prepayment
risk. When interest rates rise, the holdings of mortgage-backed securities
by the Fund can reduce returns if the owners of the underlying mortgages pay
off their mortgages later than anticipated. This is known as extension risk.

. JUNK BONDS

These bonds are speculative in nature. They are usually issued by companies
without long track records of sales and earnings, or by those companies with
questionable credit strength. These bonds are considered "below investment
grade." The Fund may invest in debt instruments rated below investment
grade.

. FOREIGN INVESTING RISK

3
<PAGE>

rates withholding taxes, and a lack of adequate company information. The
Fund is subject to foreign investing risk because it may invest a portion of
its assets in foreign company securities. If it invests in "emerging
markets," and it may, the risk is even more pronounced. In addition, because
foreign securities generally are denominated and pay dividends or interest
in foreign currencies, and the Fund may hold various foreign currencies, the
value of the net assets of the Fund as measured in U.S. dollars can be
affected favorably or unfavorably by changes in exchange rates.

. LIQUIDITY RISK

There is the possibility that the Fund may lose money or be prevented from
earning capital gains if it can not sell a security at the time and price
that is most beneficial to the Fund. The Fund is subject to liquidity risks
because it invests in high yield bonds, mortgage-backed securities or
foreign or emerging markets securities, which have all experienced periods
of illiquidity.

The Fund may be more susceptible to some of these risks than others, as noted
in the description of the Fund. A more detailed explanation of these risks is
presented under the "Risk Considerations" section at page 10.

Your investment is not a bank deposit, and it is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.

4
<PAGE>

Performance Summary

The two tables below show the Fund's annual returns and its long-term
performance with respect to its Institutional Class shares (Class N shares of
the Fund commenced operations on March 1, 1999) The first table shows you how
the Fund's performance has varied from year to year. The second compares the
Fund's performance over time to that of a broad based securities market index.
Both tables assume reinvestment of dividends and distributions. The performance
information includes the performance of a predecessor limited partnership,
which was managed by an affiliate of TCW Funds Management, Inc. using the same
investment strategy as the Fund. The performance of the partnership was
calculated using performance standards applicable to private investment
partnerships which take into account all elements of total return and reflect
the deduction of all fees and expenses of operations. The predecessor limited
partnership was not registered under the Investment Company Act of 1940 ("1940
Act") and, therefore, was not subject to certain investment restrictions
imposed by the 1940 Act and Subchapter M of the Internal Revenue Code of 1986,
as amended. If the Limited Partnership had been registered under the 1940 Act,
it's performance may have been adversely affected. As with all mutual funds,
past performance is not a prediction of future results.

Year by year total return (%)
as of December 31 each year*

TCW Galileo Core Fixed Income Fund

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.82% 16.10% 6.60% 10.65% -7.73% 18.08% 2.03% 8.90% 9.04%

1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

*The Fund's total return for the period October 31, 1998 to December 31, 1998
is: 1.34%

Best and worst quarterly performance during this period

<TABLE>
<CAPTION>
Fund Performance
- ------------------------------------------------
<S> <C>
. Core Fixed Income Fund
Quarter ending June 30, 1995 5.93% (Best)
Quarter ending March 31, 1994 -4.54% (Worst)
</TABLE>

<TABLE>
<CAPTION>
Average annual total return as of
December 31 1 year 5 years Since inception
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
. Core Fixed Income Fund 9.0% 5.7% 7.7%
- ----------------------------------------------------------------------------
Lehman Brothers Aggregate Bond 8.7% 7.3% 8.7%
</TABLE>

5
<PAGE>

Fund Expenses and Expense Example

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Annual Fund Operating Expenses are paid
out of Fund assets, so their effect is included in the share price. The Class N
shares of the Fund have no sales charge (load), but are subject to Rule 12b-1
distribution fees.

FEE TABLE

<TABLE>
<CAPTION>
Core Fixed Income
----------------
<S> <C>
Shareholder Transaction Fees
1) Redemption Fees............................................ None
2) Exchange Fees.............................................. None
3) Contingent Deferred Sales Load............................. None
4) Sales Load on Reinvested Dividends......................... None
5) Sales Load on Purchases.................................... None

Annual Fund Operating Expenses
Management Fees........................................... 0.40%/1/
Distribution (12b-1) Fees................................. 0.25%
Other Expenses............................................ 0.22%
----------------
Total Annual Fund Operating Expenses......................... 0.87%
</TABLE>

/1/The Adviser voluntarily agreed to reduce its fee to 0.35% of Net Assets
through October 31, 1998.

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------
<S> <C> <C> <C> <C>
Core Fixed Income............................... $89 $278 $482 $1,073
</TABLE>

6
<PAGE>

Investment Objectives/Approach

The Fund seeks to provide maximum current income and achieve above average
total return consistent with prudent investment management over a full market
cycle. To pursue this goal, it invests (except when maintaining a temporary
defensive position) at least 65% of the value of its total assets in fixed
income securities rated A or higher by Moody's and S&P. These securities
include, U.S. Government obligations, bonds, notes, debentures, mortgage-backed
securities, asset-backed securities, foreign securities (government and
corporate), and other securities bearing fixed or variable interest rates of
any maturity.

<TABLE>

<S> <C>
Concepts to understand In managing the Fund's investments, the
- ---------------------- Adviser uses a controlled risk approach.
The techniques of this approach attempt
Duration is often used to measure to control the principal risk components
the potential volatility of a of the fixed income markets. These
bond's price: bonds with longer components include:
durations are more sensitive to
changes in interest rates, making . security selection within a given sector
them more volatile than bonds
with shorter durations. Bonds . relative performance of the various
with fixed maturities have a market sectors
readily determinable duration.
Bonds with uncertain payment . the shape of the yield curve
schedules, such as mortgage-
backed securities, which can be . fluctuations in the overall level of
prepaid, have durations which may interest rates
vary or lengthen in certain
interest rate environments, The Adviser also utilizes active asset
making their values even more allocation in managing the Fund's
volatile than when they were investments and monitors the duration of
acquired. the Fund's portfolio securities to
mitigate the Fund's exposure to interest
rate risk.

Mark L. Attanasio, Philip A. Brarach and
Jeffrey E. Gundlach are the Fund's
portfolio managers.
</TABLE>

7
<PAGE>

Main Risks

The primary risks affecting this Fund are "credit risk," "interest rate risk"
(including "extension risk" and "prepayment risk"), "foreign investing risk"
and "liquidity risk."

Credit risk refers to the likelihood that the Fund could lose money if an
issuer is unable to meet its financial obligations, such as the payment of
principal and/or interest on an instrument, or goes bankrupt. This Fund invests
primarily in high credit quality securities that have limited susceptibility to
this risk. A portion of the Fund's assets, however, will be invested in low
credit quality securities that may make the Fund subject to greater credit
risk, especially during periods of economic uncertainty or during economic
downturns. Debt securities that are rated below investment grade are considered
to be speculative. Securities rated below investment grade are also known as
"junk" bonds. Interest rate risk refers to the possibility that the value of
the Fund's portfolio investments may fall since fixed income securities
generally fall in value when interest rates rise. The longer the term of a
fixed income instrument, the more sensitive it will be to fluctuations in value
from interest rate changes. Changes in interest rates may have a significant
effect on this Fund because it may hold securities with long terms to maturity
as well as mortgage-backed securities, including collateralized mortgage
obligations and stripped mortgage securities. Its holding of mortgage-backed
securities can reduce returns if the owners of the underlying mortgages pay off
their mortgages sooner than anticipated when interest rates go down. Because
this Fund may invest in mortgage-backed securities, it may be subject to
extension risk and prepayment risk, which are both a type of interest rate
risk. Extension risk refers to the possibility that rising interest rates may
cause owners of the underlying mortgages to pay off their mortgages at a slower
than expected rate. This particular risk may effectively change a security
which was considered short or intermediate term into a long-term security.
Long-term securities generally drop in value more dramatically in response to
rising interest rates than short or intermediate-term securities. Prepayment
risk refers to the possibility that falling interest rates may cause owners of
the underlying mortgages to pay off their mortgages at a faster than expected
rate. Because the Fund may invest a portion of its assets in foreign company
securities, it may be subject to foreign investing risks. Foreign investing
risk refers to the likelihood that foreign investments may be riskier than U.S.
investments because of many factors, some of which include:

.a lack of political or economic stability

.foreign controls on investment and changes in currency exchange rates

.withholding taxes

.a lack of adequate company information

8
<PAGE>

The risks of foreign investing are even more pronounced if the Fund invests in
emerging markets. In addition, securities traded only through foreign markets
may be more volatile and are often harder to sell. Volatility is a way to
measure the changes in the price of a single security or an entire portfolio.
Large and frequent price changes indicate higher volatility, which generally
indicates that there is a greater chance you could lose money over the short
term. The Fund is also subject to foreign currency risk. Because foreign
securities are generally denominated and pay dividends or interest in foreign
currencies, the value of the net assets of the Fund as measured in U.S. dollars
will be affected favorably or unfavorably by changes in exchange rates.
Liquidity risk refers to the possibility that the Fund may lose money or be
prevented from earning capital gains if it cannot sell a security at the time
and price that is most beneficial to the Fund. Because the Fund invests in
below grade fixed income securities, it is more susceptible to liquidity risk
than funds that invest in higher quality investments.

The Fund may invest some assets in options, futures and foreign currency
futures, and forward contracts. These practices are used primarily to hedge the
Fund's portfolio, but may also be used to increase returns; however, such
practices sometimes may reduce returns or increase volatility. The Fund may
also invest some assets in interest-only and principal-only securities, which
are sometimes referred to as derivatives. These practices may be used to
increase returns; however, such practices sometimes may reduce returns or
increase volatility and may be very sensitive to changes in interest rates.

The Fund seeks to earn additional income by making loans of its portfolio
securities to brokers, dealers and other financial institutions. The loans will
be secured at all times by cash and liquid high grade debt obligations. As with
any extension of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower fail financially.

The Fund may engage in active portfolio management which may result in
increased Fund transaction expenses and have tax consequences such as increased
realized gains.

9
<PAGE>

Risk Considerations

Please consider the following risks before investing in the Fund.

General Investment Risk Prices of most securities tend to be more
- ----------------------- volatile in the short-term. Therefore, an
investor who trades frequently or redeems
Since shares of the Fund in the short-term is more likely to incur
represent an investment in loss than an investor who holds
securities with fluctuating investments for the long term. The fewer
market prices, the value of Fund the number of issuers in which the Fund
shares will vary as the value of invests, the greater the potential
the Fund's portfolio securities volatility of its portfolio. A security
increases or decreases. that is leveraged, whether explicitly or
Therefore, the value of an implicitly, will also tend to be more
investment in a Fund could go volatile in that both gains and losses
down as well as up. This is also are intensified by the magnifying effects
true for funds that invest of leverage. Certain instruments (such as
primarily in fixed income inverse floaters and interest-only
securities. High credit quality securities) behave similarly to leveraged
investments also react in value instruments.
to interest rate changes.
The Adviser may temporarily invest up to
100% of the Fund's assets in high
quality, short-term money market
instruments if it believes adverse
economic or market conditions, such as
excessive volatility or sharp market
declines, justify taking a defensive
investment posture. If the Fund attempts
to limit investment risk by temporarily
taking a defensive investment position,
it may be unable to pursue its investment
objective during that time, and it may
miss out on some or all of an upswing in
the securities markets.

10
<PAGE>

Fixed Income Securities "Credit risk" refers to the likelihood
- ----------------------- that an issuer will default in the
payment of principal and/or interest on
an instrument. Financial strength and
solvency of an issuer are the primary
factors influencing credit risk. In
addition, lack of or inadequacy of
collateral or
credit enhancements for a fixed income
security may affect its credit risk.
Credit risk of a security may change over
its life and securities which are rated
by rating agencies are often reviewed and
may be subject to downgrades.

The Fund may invest in debt instruments
rated below investment grade. Debt
securities that are rated below
investment grade are considered to be
speculative; they are also commonly known
as "junk" bonds. Generally, lower-rated
debt securities provide a higher yield
than higher rated debt securities of
similar maturity but are subject to
greater credit risk than higher rated
securities of similar maturity. These
securities are regarded as predominantly
speculative with respect to the issuer's
continuing ability to meet principal and
interest payments. Because investment in
lower quality securities involves greater
investment risk, achievement of the
Fund's investment objective will be more
dependent on the Adviser's analysis than
would be the case if the Fund were
investing in higher quality bonds. In
addition, lower quality securities may be
more susceptible to real or perceived
adverse economic and

11
<PAGE>

individual corporate developments than would investment grade bonds. Moreover,
the secondary trading market for lower quality securities may be less liquid
than the market for investment grade bonds. This potential lack of liquidity
may make it more difficult for the Adviser to value accurately certain
portfolio securities.

"Interest rate risk" refers to the change in value of debt instruments
associated with changes in interest rates. Interest rate changes may affect the
value of a fixed income security directly (especially in the case of fixed rate
securities) and indirectly (especially in the case of adjustable rate
securities). In general, rises in interest rates will negatively impact the
value of fixed rate securities and falling interest rates will have a positive
effect on value. The degree to which a security's price will change as a result
of changes in interest rates is measured by its "duration." For example, the
price of a bond with a 5-year duration would be expected under normal market
conditions to decrease 5% for every 1% increase in interest rates. Generally,
securities with longer maturities have a greater duration and thus are subject
to greater price volatility from changes in interest rates. Adjustable rate
instruments also react to interest rate changes in a similar manner although
generally to a lesser degree (depending, however, on the characteristics of the
reset terms, including the index chosen, frequency of reset and reset caps or
floors, among other things).

12
<PAGE>

Foreign Investing As compared to U.S. companies, foreign
- ----------------- issuers generally disclose less financial
and other information publicly and are
subject to less stringent and less
uniform accounting, auditing and
financial reporting standards. Foreign
countries typically impose less thorough
regulations on brokers, dealers, stock
exchanges, insiders and listed companies
than does the U.S., and foreign
securities markets may be less liquid and
more volatile than domestic markets.
Investment in foreign securities involves
higher costs than investment in U.S.
securities, including higher transaction
and custody costs as well as the
imposition of additional taxes by foreign
governments. In addition, security
trading practices abroad may offer less
protection to investors such as the Fund.
Settlement of transactions in some
foreign markets may be delayed or may be
less frequent than in the U.S., which
could affect the liquidity of the Fund's
portfolio. Also, it may be more difficult
to obtain and enforce legal judgments
against foreign corporate issuers than
against domestic issuers and it may be
impossible to obtain and enforce
judgments against foreign governmental
issues.

Because foreign securities generally are
denominated and pay dividends or interest
in foreign currencies, and the Fund may
hold various foreign currencies from time
to time, the value of the net

13
<PAGE>

assets of the Fund as measured in U.S. dollars can be affected favorably or
unfavorably by changes in exchange rates. Generally, currency exchange
transactions will be conducted on a spot (i.e., cash) basis at the spot rate
prevailing in the currency exchange market. The cost of currency exchange
transactions will generally be the difference between the bid and offer spot
rate of the currency being purchased or sold. In order to protect against
uncertainty in the level of future foreign currency exchange rates, the Fund is
authorized to enter into certain foreign currency futures and forward
contracts. However, it is not obligated to do so and, depending on the
availability and cost of these devices, the Fund may be unable to use foreign
currency futures and forward contracts to protect against currency uncertainty.
Please see the Statement of Additional Information for further information.

With respect to the Fund, the forward currency market for the purchase or sale
of U.S. dollars in some countries is not highly developed, and in certain
countries, there may be no such market. If a devaluation of a currency is
generally anticipated, the Fund may not be able to contract to sell the
currency at an exchange rate more advantageous than that which would prevail
after the anticipated amount of devaluation, particularly as regards forward
contracts for local currencies in view of the relatively small, inactive or
even non-existent market for these contracts. In the event the Fund holds
securities denominated in a currency that suffers a devaluation, the Fund's net
asset value will suffer corresponding reductions. In this regard, in December
1994, the Mexican government determined to allow the Mexican peso to trade
freely against the U.S. dollar rather than within a controlled band, which
resulted in a significant devaluation of the Mexican peso against the dollar.
Further, in July 1997, the Thai and Philippine governments allowed the baht and
peso, respectively, to trade freely against the U.S. dollar resulting in a
sharp devaluation of both currencies, and in 1998 Russia did the same, causing
a sharp devaluation of the ruble.

14
<PAGE>

Credit and Market Risks of Mortgage-Backed Securities. The investments by the
Fund in fixed rate and floating rate mortgage-backed securities will entail
normal credit risks (i.e., the risk of non-payment of interest and principal)
and

Mortgage-Backed Securities market risks (i.e., the risk that
- -------------------------- interest rates and other factors will
cause the value of the instrument to
decline). Many issuers or servicers of
mortgage-backed securities guarantee
timely payment of interest and principal
on the securities, whether or not
payments are made when due on the
underlying mortgages. This kind of
guarantee generally increases the quality
of a security, but does not mean that the
security's market value and yield will
not change. Like bond investments, the
value of fixed rate mortgage-backed
securities will tend to rise when
interest rates fall, and fall when rates
rise. Floating rate mortgage-backed
securities will generally tend to have
minimal changes in price when interest
rates rise or fall, but their current
yield will be affected. The value of all
mortgage-backed securities may also
change because of changes in the market's
perception of the creditworthiness of the
organization that issued or guarantees
them. In addition, the mortgage-backed
securities market in general may be
adversely affected by changes in
governmental legislation or regulation.
Fluctuations in the market value of
mortgage-backed securities after their
acquisition usually do not affect cash
income from these securities but are
reflected in the Fund's net asset value.
Factors that could affect the value of a
mortgage-backed security include, among
other things, the types and amounts of
insurance which a mortgagor carries, the
amount of time the mortgage loan has been
outstanding, the loan-to-value ratio of
each mortgage and the amount of
overcollateralization of a mortgage pool.

15
<PAGE>

Liquidity Risk of Mortgage-Backed Securities. The liquidity of mortgage-backed
securities varies by type of security; at certain times the Fund may encounter
difficulty in disposing of investments. Because mortgage-backed securities may
be less liquid than other securities, the Fund may be more susceptible to
liquidity risks than funds that invest in other securities. In the past, in
stressed markets, certain types of mortgage-backed securities, such as inverse
floaters, and interest-only securities, suffered periods of illiquidity if
disfavored by the market.

Prepayment, Extension and Redemption Risks of Mortgage-Backed Securities.
Mortgage-backed securities reflect an interest in monthly payments made by the
borrowers who receive the underlying mortgage loans. Although the underlying
mortgage loans are for specified periods of time, such as 20 or 30 years, the
borrowers can, and typically do, pay them off sooner. When that happens, the
mortgage-backed security which represents an interest in the underlying
mortgage loan will be prepaid. A borrower is more likely to prepay a mortgage
which bears a relatively high rate of interest. This means that in times of
declining interest rates, a portion of the Fund's higher yielding securities
are likely to be redeemed and the Fund will probably be unable to replace them
with securities having as great a yield. Prepayments can result in lower yields
to shareholders. The increased likelihood of prepayment when interest rates
decline also limits market price appreciation of mortgage-backed securities.
This is known as prepayment risk. Mortgage-backed securities are also subject
to extension risk. Extension risk is the possibility that rising interest rates
may cause prepayments to occur at a slower than expected rate. This particular
risk may effectively change a security which was considered short or
intermediate term into a long term security. Long-term return securities
generally fluctuate more widely in response to changes in interest rates than
short or intermediate-term securities. In addition, a mortgage-backed security
may be subject to redemption at the option of the issuer. If a mortgage-backed
security held by the Fund is called for redemption, the Fund will be required
to permit the issuer to redeem or "pay-off" the security, which could have an
adverse effect on the Fund's ability to achieve its investment objective.

16
<PAGE>

accurately reflect the price volatility of such securities. For example, in
periods of supply and demand imbalances in the market for such securities
and/or in periods of sharp interest rate movements, the prices of CMOs may
fluctuate to a greater extent than would be expected from interest rate
movements alone. CMOs issued by private entities are not obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
and are not guaranteed by any government agency, although the securities
underlying a CMO may be subject to a guarantee. Therefore, if the collateral
securing the CMO, as well as any third party credit support or guarantees, is
insufficient to make payment, the holder could sustain a loss.

Stripped Mortgage Securities. Part of the investment strategy of the Fund
involves interest-only Stripped Mortgage Securities. These investments may be
highly sensitive to changes in interest and prepayment rates and tend to be
less liquid than other CMOs. In addition, prepayments of the underlying
mortgages likely would lower the Fund's return from stripped securities it
holds.

Asset-Backed Securities. Certain asset-backed securities do not have the
benefit of the same security interest in the related collateral as do mortgage-
backed securities; nor are they provided government guarantees of repayment.
Credit card receivables are generally unsecured, and the debtors are entitled
to the protection of a number of state and federal consumer credit laws, many
of which give such debtors the right to set off certain amounts owed on the
credit cards, thereby reducing the balance due. In addition, some issuers of
automobile receivables permit the servicers to retain possession of the
underlying obligations. If the servicer were to sell these obligations to
another party, there is a risk that the purchaser would acquire an interest
superior to that of the holders of the related automobile receivables.

17
<PAGE>

Year 2000 other non-complying computer systems will
- --------- not impair their services at that time.
The Adviser has been, and is currently in
contact with each of its external service
providers to evaluate their readiness for
the year 2000. The Adviser has requested
each of its external service providers to
either (i) prepare a description of its
process for identifying date sensitive
areas, its approach for implementing
changes and its testing methodology,
along with its timetable for completion,
or (ii) certify its year 2000 compliance.

In addition, it is possible that the
markets for securities in which the Fund
invests may be negatively affected by
computer failures throughout the
financial services industry commencing
January 1, 2000. Improperly functioning
trading systems may result in settlement
problems. In addition, corporate and
governmental data processing errors may
result in production problems for
individual companies and create overall
economic uncertainties. Earnings of
individual issuers will be affected by
remediation costs which may be
substantial. Individual firms may further
experience disruptions to their business
due to the failure of their counterparts
to address approaching year 2000
problems, or could experience further
disruption to the economy at large, which
could adversely affect corporate earnings
generally and the value of their
securities. Accordingly, the Fund's
portfolio investments may be negatively
affected.

18
<PAGE>

European Economic a single European currency (the euro),
and Monetary Union which was introduced on January 1, 1999
- ------------------ and is expected to replace the existing
national currencies of all initial EMU
participants by July 1, 2002. Upon
introduction of the euro, certain
securities (beginning with government and
corporate bonds) have been redonominated
in the euro and, thereafter trade and
make dividend and other payments only in
euros.

Like other investment companies and
business organizations, including the
companies in which the Fund invests, the
Fund could be adversely affected: (i) if
the euro, or EMU as a whole does not take
effect; (ii) if a participating country
withdraws from EMU; or (iii) if the
computing, accounting and trading systems
used by the Fund's service providers, or
by other business entities with which the
Fund or its service providers do
business, are not capable of recognizing
the euro as a distinct currency at the
time of, and following euro conversion.

19
<PAGE>

Management of the Fund

Investment Adviser

The Fund's investment adviser is TCW Funds Management, Inc. ("Adviser") and is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles, California
90017. As of December 31, 1998, the Adviser and its affiliated companies, which
provide a variety of trust, investment management and investment advisory
services, had over $50 billion under management or committed for management.

Portfolio Managers

*Positions with the TCW Group, Inc. and its affiliates may have changed over
time.

Advisory Agreement

The Fund and the Adviser have entered into an Investment Advisory and
Management Agreement (the "Advisory Agreement"), under the terms of which the
Fund has employed the Adviser to manage the investment of its assets, to place
orders for the purchase and sale of its portfolio securities, and to be
responsible for overall management of the Fund's business affairs, subject to
control by the Board of Directors. The Adviser also pays certain costs of
marketing the Fund, including sales personnel compensation, from its legitimate
profits from its investment advisory fees and other resources available to it.
Under the Advisory Agreement, the Fund pays to the Adviser as compensation for
the services rendered, facilities furnished, and expenses paid by it the
following fees:

20
<PAGE>

The Advisory Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which the agreements relate, except a loss
resulting from willful misfeasance, bad faith, gross negligence on the part of
the Adviser in the performance of its duties or from reckless disregard by the
Adviser of its duties under the agreement.

Multiple Class Structure

The Fund currently offers two classes of shares, Institutional Class shares and
Class N shares. Shares of each class of the Fund represents an equal pro rata
interest in that Fund and generally give you the same voting, dividend,
liquidation, and other rights. The Institutional Class shares are offered at
the current net asset value. The Class N shares are also offered at the current
net asset value, but will be subject to fees imposed under a distribution plan
("Distribution Plan") adopted pursuant to Rule 12b-1 under the 1940 Act by the
Fund. The Distribution Plan allows the Fund to pay distribution and other fees
for the sale of its Class N shares and for services provided to shareholders.
Pursuant to the Distribution Plan, the Fund compensates the Fund's distributor
at a rate equal to 0.25% of the average daily net assets of the Fund
attributable to its Class N shares. Because these fees are paid out of the
Fund's Class N assets on an on-going basis, over time, these fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.

21
<PAGE>

Your Investment

Account Policies and Services

Buying shares

You pay no sales charges to invest in the Fund. Your price for Fund shares is
the Fund's net asset value per share (NAV) which is calculated as of the close
of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time)
every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the Fund. Orders received by the
Fund's Transfer agent from dealers, brokers or other service providers after
the NAV for the day is determined, will receive that same day's NAV if the
orders were received by the dealers, brokers or service providers from their
customers prior to 4:00 p.m. and were transmitted to and received by the
transfer agent prior to 8:00 a.m. Eastern time on the next day. The Fund's
investments are valued based on market value, or where market quotations are
not readily available, based on fair value as determined in good faith by the
Fund pursuant to procedures established by the Fund's Board.

Minimums

<TABLE>
<CAPTION>
Initial IRA Additional
- --------------------------------------------------------
<S> <C> <C> <C>
Core Fixed Income Fund $2,000 $500 $250
</TABLE>

TCW Galileo Funds, Inc. may waive the minimum initial investment. All
investments must be in U.S. dollars. Third-party checks, except those payable
to an existing shareholder, will normally not be accepted. If your check or
wire does not clear, you will be responsible for any loss the Fund incurs.

Automatic Investment Plan ($100 minimum)

You may arrange to make investments on a regular basis through automatic
deductions from your bank checking account. Please call (800) 248-4486 for more
information and an enrollment form.

Selling shares

Before selling recently purchased shares, please note that if the Fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to fifteen days.

22
<PAGE>

Written sell order

Some circumstances require written sell orders, along with signature
guarantees. These include:

. amounts of $100,000 or more

. amounts of $1,000 or more on accounts whose address has been changed within
the last 30 days

. requests to send the proceeds to a payee or address different than what is on
our records

Exchange privilege

Third Party Transactions

Account statements

Every Fund investor automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.

General policies

23
<PAGE>

Large Redemption Amounts The Fund restricts excessive trading
- ------------------------ (usually defined as more than four
The Fund also reserves the right exchanges out of the Fund within a
to make a "redemption in kind"-- calendar year). You are limited to one
payment in portfolio securities exchange of shares in the Fund during any
rather than cash--if the amount 15-day period except investors in 401(k)
you are redeeming in any 90-day and other group retirement accounts,
period is large enough to affect investors who purchase shares through
Fund operations (for example, if certain broker-dealers and asset
it equals more than $250,000 or allocation accounts managed by the
represents more than 1% of the Adviser or an affiliate. The Fund
Fund's assets). reserves the right to:

. refuse any purchase or exchange request
that could adversely affect the Fund or
its operations, including those from
any individuals or groups who, in the
Fund's view, are likely to engage in
excessive trading

. change or discontinue its exchange
privilege, or temporarily suspend this
privilege during unusual market
conditions

. delay sending out redemption proceeds
for up to seven days (generally applies
only in cases of very large
redemptions, excessive trading or
during unusual market conditions)

24
<PAGE>

Complete the New Account Form. Mail your New
Account Form and a check made payable to
TCW Galileo Core Fixed Income Fund to:

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- ------------------------------------------------------------------------------------------------------------------------------------
By Telephone

Please contact the Transfer Agent at
(800) 248-4486 for a New Account Form.

Wire: Have your bank send your investment to: (Same)

United Missouri Bank of Kansas City, N.A.
ABA No. 101000695
DST Systems, Inc./AC 9870371553
FBO TCW Galileo Core Fixed Income Fund
(Name on the Fund Account)
(Fund Account number)

- ------------------------------------------------------------------------------------------------------------------------------------
Via Exchange

Call the Transfer Agent at (800) 248-4486. The
new account will have the same registration as
the account from which you are exchanging.
</TABLE>

If you need help completing the New Account Form, please call the Transfer
Agent at (800) 248-4486.
25
<PAGE>

<TABLE>
<CAPTION>
TO SELL OR EXCHANGE SHARES
- --------------------------------------------------------------
<S> <C>
By Mail To reach the Transfer Agent at
DST Systems, Inc., call toll free
Write a letter of instruction that includes: in the U.S.
. your name(s) and signature(s) as they appear on the
account form (800) 248-4486
. your account number Outside the U.S.
. the Fund name (816) 843-7166 (collect)
. the dollar amount you want to sell or exchange
. how and where to send the proceeds
- --------------------------------------------------------------
Obtain a signature guarantee or other documentation, if
required (see "Account Policies and Services--Selling
Shares").

Mail your letter of instruction to:

Regular Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
P.O. Box 419951
Kansas City, MO 64141-6951

Express, Registered or Certified Mail
TCW Galileo Funds, Inc.
DST Systems, Inc.
330 W. 9th Street
Poindexter Building, 1st Floor
Kansas City, MO 64105-2005

- --------------------------------------------------------------
By Telephone

Be sure the Fund has your bank account information on file.
Call the Transfer Agent at (800) 248-4486 to request your
transaction. Proceeds will be wired to your bank.

Telephone redemption requests must be for a minimum of
$1,000.

- --------------------------------------------------------------
Systematic Withdrawal Plan: Call (800) 248-4486
to request a form to add the plan. Complete the form,
specifying the amount and frequency of withdrawals you would
like.

Be sure to maintain an account balance of $2,000 or more.
Systematic Withdrawal plans are subject to a minimum annual
withdrawal of $500.
</TABLE>

26
<PAGE>

Distributions and Taxes

The amount of dividends of net investment income and distributions of net
realized long and short-term capital gains payable to shareholders will be
determined separately for the Fund. Dividends from the net investment income of
the Fund will be declared and paid monthly. The Fund will distribute any net
realized long or short-term capital gains at least annually. Your distributions
will be reinvested in the Fund unless you instruct the Fund otherwise. There
are no fees or sales charges on reinvestments.

Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash- unless you are exempt from taxation or entitled
to tax deferral. Capital gains distributions may be taxable at different rates
depending on the length of time the Fund has held the assets sold. Early each
year, you will be notified as to the amount and federal tax status of all
distributions paid during the prior year. Distributions may also be subject to
state or local taxes. The tax treatment of redemptions from a retirement plan
account may differ from redemptions from an ordinary shareholder account. If
you redeem shares of the Fund or exchange them for shares of another Fund, any
gain on the transaction may be subject to tax. You must provide the Funds with
a correct taxpayer identification number (generally your Social Security
Number) and certify that you are not subject to backup withholding. If you fail
to do so, the IRS can require the Fund to withhold 31% of your taxable
distributions and redemptions. Federal law also requires the Fund to withhold
30% or the applicable tax treaty rate from dividends paid to nonresident alien,
non-U.S. partnership and non-U.S. corporation shareholder accounts.

This is a brief summary of some of the tax laws that affect your investment in
the Fund. Please see the Statement of Additional Information and your tax
adviser for further information.

27
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance for the fiscal years indicated. Certain information
reflects financial results for a single Fund share. "Total return" shows how
much your investment in the Institutional Class shares of the Fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions (Class N shares of the Fund commenced operations on
March 1, 1999). These figures have been audited by Deloitte & Touche LLP, whose
report, along with Company's financial statements, are included in the annual
report, which is available upon request.

TCW Galileo Core Fixed Income Fund

<TABLE>
<CAPTION>
Ten
Year Ended October 31 Months
------------------------------------- Ended
1998 1997 1996 1995 10/31/94
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-Share Data ($)
Net asset value, beginning of period $9.62 $9.45 $9.61 $8.94 $10.04
-------------------------------------------------
Investment operations:
Investment income--net 0.55 0.58 0.55 0.58 0.44
Net realized and unrealized gain (loss)
on investments 0.29 0.19 0.16 0.62 (1.16)
-------------------------------------------------
Total from investment operations 0.84 0.77 0.39 1.20 (0.72)
-------------------------------------------------
Distributions:
Dividends from net investment income (0.57) (0.60) (0.55) (0.53) (0.38)
-------------------------------------------------
Total Distributions (.057) (0.60) (0.55) (0.53) (0.38)
-------------------------------------------------
Net asset value, end of period $9.89 $9.62 $9.45 $9.61 $8.94
-------------------------------------------------

Total return (%) 9.02% 8.45% 4.26% 13.92% (7.24)%/1/

Ratios/Supplemental Data
Net assets, end of period ($ x 1,000) $162,996 $19,368 $25,006 $36,236- $50,153
Ratio of expenses to average net assets (%) 0.62% 0.93% 0.76% 0.68%/3/ 0.50%/2/,/3/
Ratio of net income to average net assets (%) 5.60% 6.13% 5.85% 6.38% 6.11%/2/
Portfolio turnover rate (%) 272.77% 142.96% 238.73% 223.78% 208.63%/1/
</TABLE>

/1/ For the ten months ended October 31, 1994, and not indicative of a full
year's operating results.
/2/Annualized.
/3/ The Adviser has voluntarily agreed to reduce its fee from the Fund, or to
pay the operating expenses of the Fund, to the extent necessary to limit the
operating expenses of the Fund to 0.50% of net assets through December 31,
1994. Had such action not been taken, total annualized operating expenses for
the ten months ended October 31, 1994 would have been 0.68% and for the fiscal
year ended October 31, 1995, total operating expenses would have been 0.72% of
average net assets.

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<TABLE>

<S> <C>
For More Information

For all shareholder account TCW Galileo Funds, Inc.
information such as transactions
and account inquiries:

Call (800) 248-4486 SEC file number: 811-7170

For information regarding the TCW
Galileo Funds, Inc.: More information on the Fund is available
free upon request, including the following:
Call (800) FUNDTCW (386-3829)
Annual / Semi-Annual Report
In writing:
Describes the Fund's performance, lists
TCW Galileo Funds, Inc. portfolio holdings and contains a letter
c/o DST System, Inc., from the Fund's portfolio manager
P.O. Box 419951 discussing recent market conditions,
Kansas City, MO 64141-6951 economic trends and Fund strategies.

On the Internet: Statement of Additional Information
Text-only versions of Fund documents (SAI)
filed with the SEC can be viewed online or
downloaded from: Provides more details about the Fund and
its policies. A current SAI is on file
SEC with the Securities and Exchange
http://www.sec.gov Commission (SEC) and is incorporated by
reference and is legally considered part
TCW GALILEO FUNDS, INC. of this prospectus.
http://www.tcwgroup.com

29
<PAGE>

TCW Galileo
Funds, Inc.

TCW Galileo
European Equities Fund