<PAGE>
TCW GALILEO FUND
April 30, 2000
SEMI-ANNUAL REPORT
Money Market
Core Fixed Income
High Yield Bond
Mortgage-Backed Securities
Total Return
Mortgage-Backed
Securities
[LOGO] TCW GALILEO FUNDS INC
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THE POWER OF INDEPENDENT THINKING
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TCW Galileo Funds, Inc.
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U.S. Fixed Income
Table of Contents April 30, 2000
Letter to Shareholders................................................. 1
Performance Summary.................................................... 2
Schedules of Investments:
TCW Galileo Money Market Fund........................................ 3
TCW Galileo Core Fixed Income Fund................................... 5
TCW Galileo High Yield Bond Fund..................................... 12
TCW Galileo Mortgage-Backed Securities Fund.......................... 19
TCW Galileo Total Return Mortgage-Backed Securities Fund............. 22
Statements of Assets and Liabilities................................... 25
Statements of Operations............................................... 26
Statements of Changes in Net Assets.................................... 27
Notes to Financial Statements.......................................... 30
Financial Highlights................................................... 41
[LOGO]
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[ICON]
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To Our Shareholders
We are pleased to submit the April 30, 2000 semi-annual reports for the TCW
Galileo Funds. On the following page is an analysis of each Fund's
investment performance for a 1 year, 5 year and since inception period
through April 30, 2000.
TCW is committed to providing you with superior professional investment
management and distinctive personal service through the TCW Galileo Funds.
The Funds' long-term investment performance record is among the best in the
industry. In addition, TCW carefully monitors each Fund's overall expense
ratio to maintain their competitiveness.
The Galileo Mutual Funds continue to provide our clients with targeted
investment strategies featuring daily liquidity, competitive management
fees and no front end loads, or deferred sales charges.
Please call our Shareholder Services Department at (800) FUND-TCW (386-
3829) if you have any questions or would like further information on the
TCW Galileo Funds .
/s/ Marc I. Stern
Marc I. Stern
Chairman of the Board
June 2, 2000
1
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TCW Galileo Funds, Inc.
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U.S. Fixed Income
Performance Summary (Unaudited) April 30, 2000
<TABLE>
<CAPTION>
Total Return --
Annualized As of
April 30, 2000
----------------------------------
Since
NAV 1-Year 5-Year Inception Inception Date
-------- -------- -------- --------- ---------------
<S> <C> <C> <C> <C> <C>
TCW Galileo Money Market Fund $1.00 5.21% 5.26% 5.61% (1) 07/14/88(2)
TCW Galileo Core Fixed Income Fund
-- Institutional Class $9.15 (0.50)% 6.18% 6.62% (1) 01/01/90(2)
TCW Galileo Core Fixed Income Fund
-- Advisory Class $9.24 (0.96)% N/A 0.05% 03/01/99
TCW Galileo High Yield Bond Fund
-- Institutional Class $8.47 (2.15)% 7.27% 9.30% (1) 02/01/89(2)
TCW Galileo High Yield Bond Fund
-- Advisory Class $8.57 (2.12)% N/A 0.44% 03/01/99
TCW Galileo Mortgage-Backed
Securities Fund $9.56 5.51% 6.59% 6.58% (1) 02/01/90(2)
TCW Galileo Total Return Mortgage-
Backed Securities Fund
-- Institutional Class $8.77 0.17% 7.60% 6.02% 06/17/93
TCW Galileo Total Return Mortgage-
Backed Securities Fund
-- Advisory Class $9.02 1.14% N/A 0.29% 03/01/99
</TABLE>
(1) Performance data includes the performance of the
predecessor limited partnership for periods before the TCW
Galileo Funds' registration became effective. The
predecessor limited partnerships were not registered under
the Investment Company Act of 1940, as amended ("1940
act"), and, therefore were not subject to certain
investment restrictions that are imposed by the 1940 Act.
if the limited partnership had been registered under the
1940 act, the limited partnership's performance may have
been lower.
(2) Inception date of predecessor limited partnership.
2
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TCW Galileo Money Market Fund [ICON]
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Schedule of Investments (Unaudited) April 30, 2000
<TABLE>
<CAPTION>
Principal
Amount Fixed Income Securities Value
----------- ----------------------- ------------
<S> <C> <C>
Agency Securities (8.8% of Net Assets)
$10,000,000 Federal National Mortgage Association,
Floating Rate Note, 6.282%,
due 07/14/00 $ 9,995,654
10,000,000 Student Loan Marketing Association,
Variable Rate Note, 6.482%,
due 11/09/00 9,998,965
------------
Total Agency Securities
(Cost: $19,994,619) 19,994,619
------------
Commercial Paper (66.8%)
5,000,000 American Express Credit Corp., 5.99%,
due 05/02/00 4,997,504
5,000,000 American Express Credit Corp., 5.99%,
due 05/03/00 4,996,672
5,000,000 Associates Corp. of North America,
6.03%, due 05/01/00 4,998,325
3,700,000 Bellsouth Telecom, Inc., 5.97%,
due 05/02/00 3,698,159
3,400,000 Bellsouth Telecom, Inc., 6%,
due 05/02/00 3,398,300
2,900,000 Bellsouth Telecom, Inc., 6.15%,
due 06/06/00 2,881,174
10,000,000 Chevron Corp., 5.98%, due 05/04/00 9,991,694
7,850,000 Ciesco L.P., 6%, due 05/10/00 7,835,608
5,000,000 Du Pont (E.I.) De Nemours & Co., Inc.,
5.98%, due 05/05/00 4,995,017
10,000,000 General Electric Capital Corp., 6.03%,
due 05/01/00 9,996,650
10,000,000 Goldman Sachs, Inc., 6.06%,
due 05/01/00 9,996,633
7,500,000 International Lease Finance Corp., 6%,
due 05/25/00 7,467,500
7,800,000 Merrill Lynch & Company, Inc., 6%,
due 05/03/00 7,794,800
6,000,000 Metlife Funding, Inc., 6%, due 05/01/00 5,998,000
5,000,000 Paccar Financial Corp., 6%,
due 05/08/00 4,992,500
6,800,000 Pacific Life Insurance, 6.01%,
due 05/10/00 6,787,513
5,215,000 PepsiCo, Inc., 5.97%, due 05/03/00 5,211,541
10,000,000 Riverwoods Funding Corp., 6.02%,
due 05/17/00 9,969,900
2,478,000 Sara Lee Corp., 6.02%, due 05/12/00 2,472,613
6,000,000 Schering-Plough Corp., 5.98%,
due 05/11/00 5,988,040
9,063,000 Smithkline Beecham Corp., 6.01%,
due 05/05/00 9,053,922
7,900,000 United Parcel Service, Inc., 5.96%,
due 05/01/00 7,897,384
10,000,000 USAA Capital Corp., 5.9%, due 05/16/00 9,972,139
------------
Total Commercial Paper
(Cost: $151,391,588) 151,391,588
------------
Corporate Fixed Income Securities
(24.2%)
4,650,000 Associates Corp. of North America,
5.85%, due 01/15/01 4,620,097
4,000,000 CIT Group, Inc., 5%, due 10/06/00 3,973,693
6,000,000 CIT Group, Inc., 5.8%, due 07/20/00 6,000,971
10,000,000 Ford Motor Credit Corp., 6.25%,
due 11/08/00 9,987,225
9,800,000 IBM Credit Corp., 6.375%, due 06/15/00 9,806,664
2,400,000 International Lease Finance Corp.,
5.875%, due 01/15/01 2,386,839
8,200,000 Nationsbank N.A., 5.75%, due 03/15/01 8,133,800
</TABLE>
See accompanying notes to financial statements.
3
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TCW Galileo Money Market Fund
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Schedule of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Principal
Amount Value
----------- ------------
<S> <C> <C>
Corporate Fixed Income Securities
(Continued)
$ 5,000,000 Paccar Financial Corp., 5.25%,
due 10/19/00 $ 4,979,912
5,000,000 Pitney Bowes Credit Corp., 5.95%,
due 09/29/00 5,000,000
------------
Total Corporate Fixed Income Securities
(Cost: $54,889,201) 54,889,201
------------
Total Fixed Income Securities
(Cost: $226,275,408) (99.8%) 226,275,408
------------
Short-Term Investments (Cost: $25,309) (0.0%)
---------------------------------------------
25,309 Investors Bank & Trust Depository Reserve,
4.85%, due 05/01/00 25,309
------------
Total Investments
(Cost: $226,300,717) (99.8%) 226,300,717
Excess of Other Assets over Liabilities (0.2%) 358,563
------------
Net Assets (100.0%) $226,659,280
============
</TABLE>
See accompanying notes to financial statements.
4
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TCW Galileo Core Fixed Income Fund [ICON]
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Schedule of Investments (Unaudited) April 30, 2000
Principal
Amount Fixed Income Securities Value
---------- ----------------------- -----------
Corporate Bonds
Aerospace/Defense (0.1% of Net Assets)
$ 75,000 BE Aerospace, Inc., 9.5%, due 11/01/08 $ 65,625
-----------
Automotive (0.4%)
25,000 American Axle & Manufacturing Holdings,
Inc., 9.75%, due 03/01/09 23,812
70,000 Hayes Lemmerz International, Inc.,
8.25%, due 12/15/08 59,850
75,000 JL French Automotive Castings, Inc.,
11.5%, due 06/01/09 74,062
75,000 Transportation Manufacturing Operation
Co., 11.25%, due 05/01/09 72,000
-----------
Total Automotive 229,724
-----------
Banking & Financial Services (2.5%)
400,000 Abbey National PLC, 6.69%, due 10/17/05 378,000
50,000 Forest City Enterprises, Inc., 8.5%,
due 03/15/08 45,250
75,000 Metris Companies, Inc., 10.125%,
due 07/15/06 72,000
500,000 National Rural Utilities Cooperative
Financial Corp., 5%, due 10/01/02 473,430
100,000 NationsBank Corp., 7.5%, due 09/15/06 98,000
60,000 Security Pacific Corp., 11.5%,
due 11/15/00 61,350
200,000 Wells Fargo & Co., 7.2%, due 05/01/03 198,660
-----------
Total Banking & Financial Services 1,326,690
-----------
Building Materials (0.2%)
75,000 Juno Lighting, Inc., 11.875%,
due 07/01/09 63,000
75,000 NCI Building Systems, Inc., 9.25%,
due 05/01/09 68,625
-----------
Total Building Materials 131,625
-----------
Chemicals (1.3%)
5,000 GEO Specialty Chemicals, Inc., 10.125%,
due 08/01/08 4,300
600,000 IMC Global, Inc., 6.5%, due 08/01/03 572,922
50,000 Lyondell Chemical Companies, Inc.,
10.875%, due 05/01/09 49,500
50,000 Polymer Group, Inc., 8.75%,
due 03/01/08 44,750
-----------
Total Chemicals 671,472
-----------
Commercial Services (0.6%)
150,000 Stericycle, Inc., 12.375%, due 11/15/09 151,500
75,000 United Rentals, Inc., 9.25%,
due 01/15/09 66,750
50,000 United Rentals, Inc., 9.5%,
due 06/01/08 45,750
50,000 Williams Scotsman, Inc., 9.875%,
due 06/01/07 45,500
-----------
Total Commercial Services 309,500
-----------
Computer Services (0.4%)
50,000 Anteon Corp., 12%, due 05/15/09 45,000
200,000 PSINet, Inc., 11%, due 08/01/09 180,000
-----------
Total Computer Services 225,000
-----------
Construction (0.6%)
200,000 General Electric Global Insurance Corp.,
7%, due 02/15/26 181,124
See accompanying notes to financial statements.
5
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TCW Galileo Core Fixed Income Fund
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Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- -----------
Construction (Continued)
$ 75,000 Hovnanian Enterprises, Inc., 9.125%,
due 05/01/09 $ 65,625
75,000 Lennar Corp., 9.95%, due 05/01/10 71,437
-----------
Total Construction 318,186
-----------
Containers & Packaging (0.4%)
75,000 Anchor Glass Container Corp., 9.875%,
due 03/15/08 47,250
50,000 Consolidated Container Companies, LLC,
(144A), 10.125%, due 07/15/09 50,000*
75,000 Consumers Packaging, Inc., 9.75%,
due 02/01/07 39,750
50,000 U.S. Can Corp., Series B, 10.125%,
due 10/15/06 52,500
-----------
Total Containers & Packaging 189,500
-----------
Electronics (0.6%)
75,000 360networks, Inc., (144A), 13%,
due 05/01/08 73,687*
200,000 Litton Industries, Inc., 6.05%,
due 04/15/03 190,500
55,000 Viasystems, Inc., 9.75%, due 06/01/07 47,025
-----------
Total Electronics 311,212
-----------
Energy & Oil Services (3.1%)
300,000 Coastal Corp., 6.95%, due 06/01/28 255,927
100,000 Forest Oil Corp., 10.5%, due 01/15/06 101,000
100,000 Grey Wolf, Inc., 8.875%, due 07/01/07 92,000
15,000 Gulf Canada Resources, Ltd., 9.25%,
due 01/15/04 15,022
250,000 Occidental Petroleum Corp., 7.65%,
due 02/15/06 242,450
50,000 P&L Coal Holdings Corp., 9.625%,
due 05/15/08 44,500
125,000 Pride International, Inc., 10%,
due 06/01/09 125,000
150,000 Sonat, Inc., 6.75%, due 10/01/07 139,500
100,000 Trans-Canada Pipelines, Ltd., 7.06%,
due 10/14/25 89,250
400,000 Trans-Canada Pipelines, Ltd., 7.7%,
due 06/15/29 390,528
200,000 Transcontinental Gas Pipe Lines, 6.25%,
due 01/15/08 179,500
-----------
Total Energy & Oil Services 1,674,677
-----------
Entertainment & Leisure (0.9%)
150,000 Hollywood Park, Inc., 9.25%,
due 02/15/07 148,500
50,000 International Game Technology, Inc.,
8.375%, due 05/15/09 46,375
100,000 Marvel Enterprises, Inc., 12%,
due 06/15/09 78,000
75,000 Mohegan Tribal Gaming, Inc., 8.75%,
due 01/01/09 71,250
125,000 SFX Entertainment, Inc., 9.125%,
due 12/01/08 125,625
-----------
Total Entertainment & Leisure 469,750
-----------
Foods, Hotels & Restaurants (0.2%)
100,000 New World Pasta Company, Inc., 9.25%,
due 02/15/09 75,000
100,000 Signature Resorts/Sunterra, Inc., 9.25%,
due 05/15/06 50,000
-----------
Total Foods, Hotels & Restaurants 125,000
-----------
Healthcare (1.0%)
75,000 Bio-Rad Laboratories, Inc., (144A),
11.625%, due 02/15/07 76,875*
75,000 Concentra Operating Corp., (144A), 13%,
due 08/15/09 54,000*
100,000 Express Scripts, Inc., 9.625%,
due 06/15/09 94,500
See accompanying notes to financial statements.
6
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April 30, 2000
Principal
Amount Value
---------- -----------
Healthcare (Continued)
$ 75,000 Hanger Orthopedic Group, Inc., 11.25%,
due 06/15/09 $ 58,125
150,000 Hudson Respiratory Care, Inc., 9.125%,
due 04/15/08 114,000
50,000 Prime Medical Services, Inc., 8.75%,
due 04/01/08 42,000
75,000 Unilab Finance Corp., 12.75%,
due 09/28/09 74,812
-----------
Total Healthcare 514,312
-----------
Household Products (0.1%)
29,000 Boyds Collection, Ltd., 9%,
due 05/15/08 25,665
25,000 Home Interiors & Gifts, Inc., 10.125%,
due 06/01/08 19,750
-----------
Total Household Products 45,415
-----------
Machinery (0.4%)
250,000 United Tech Corp., 7.5%, due 09/15/29 241,982
-----------
Media--Broadcasting & Publishing (2.3%)
75,000 American Media Operations, Inc., 10.25%,
due 05/01/09 71,063
150,000 Classic Cable, Inc., 9.375%,
due 08/01/09 140,625
300,000 Cox Communications, Inc., 7.5%,
due 08/15/04 293,304
20,000 Garden State Newspapers, Inc., 8.625%,
due 07/01/11 17,400
50,000 Primedia, Inc., 7.625%, due 04/01/08 45,500
75,000 Sinclair Broadcasting Group, Inc., 9%,
due 07/15/07 66,750
50,000 Sinclair Broadcasting Group, Inc., 10%,
due 09/30/05 47,688
100,000 Spanish Broadcasting System, Inc.,
9.625%, due 11/01/09 97,750
25,000 STC Broadcasting, Inc., 11%,
due 03/15/07 24,750
100,000 TV Guide, Inc., 8.125%, due 03/01/09 100,000
300,000 UIH Australia/Pacific, Inc., 0%,
due 05/15/06 271,500
75,000 WRC Media Corp., 12.75%, due 11/15/09 72,000
-----------
Total Media--Broadcasting & Publishing 1,248,330
-----------
Metals (0.5%)
175,000 International Wire Group, Inc., Series
B, 11.75%, due 06/01/05 179,813
100,000 Neenah Corp., 11.125%, due 05/01/07 78,000
40,000 Wheeling Pittsburgh Corp., 9.25%,
due 11/15/07 36,400
-----------
Total Metals 294,213
-----------
Pollution Control (0.0%)
25,000 Allied Waste North America, Inc.,
7.625%, due 01/01/06 18,750
50,000 Safety-Kleen Corp., 9.25%, due 05/15/09 1,500
50,000 Safety-Kleen Services, Inc., 9.25%,
due 06/01/08 3,000
-----------
Total Pollution Control 23,250
-----------
Telecommunications (1.1%)
75,000 ICG Holdings, Inc., 0%, due 05/01/06 60,723
100,000 Nextlink Communications, Inc., 10.75%,
due 06/01/09 98,500
100,000 Northern Telecom Capital Corp., 7.4%,
due 06/15/06 98,250
100,000 Primus Telecom Group, Inc., 12.75%,
due 10/15/09 100,000
See accompanying notes to financial statements.
7
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TCW Galileo Core Fixed Income Fund
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Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- -----------
Telecommunications (Continued)
$ 75,000 Rhythms NetConnections, Inc., 12.75%,
due 04/15/09 $ 63,750
160,000 US West Capital Funding, Inc., 6.25%,
due 07/15/05 148,960
-----------
Total Telecommunications 570,183
-----------
Textiles, Clothing & Fabrics (0.1%)
50,000 Westpoint Stevens, Inc., 7.875%,
due 06/15/08 40,000
-----------
Transportation (1.3%)
300,000 American Airlines, Inc., 7.024%,
due 10/15/09 282,066
200,000 Continental Airlines, Inc., 7.056%,
due 09/15/09 190,764
150,000 Southwest Airlines Co., 7.375%,
due 03/01/27 141,938
75,000 Western Star Trucks Holdings, Ltd.,
8.75%, due 05/01/07 69,750
-----------
Total Transportation 684,518
-----------
Utilities (1.7%)
400,000 Carolina Power & Light Corp., 5.95%,
due 03/01/09 351,576
500,000 PP & L Capital Funding, 7.75%,
due 04/15/05 488,750
75,000 TNP Enterprises, Inc., (144A), 10.25%,
due 04/01/10 75,563*
-----------
Total Utilities 915,889
-----------
Total Corporate Bonds
(Cost: $11,367,763) (19.8%) 10,626,053
-----------
Asset Backed Securities (0.8%)
170,866 Southern Pacific Secured Assets Corp.
(97-3-A4), 6.66%, due 06/25/24 169,561
250,000 Standard Credit Card Trust 93, 5.95%,
due 10/07/04 239,605
-----------
Total Asset Backed Securities
(Cost: $417,186) 409,166
-----------
Collateralized Mortgage Obligations
(31.5%)
1,584,438 ABN Amro Mortgage Corp. (98-4-A6),
6.75%, due 11/25/28 (TAC) 1,401,115
239,195 Bear Stearns Mortgage Securities, Inc.
(97-2-A2), 6.5%, due 04/28/24 232,765
122,455 Bear Stearns Mortgage Securities, Inc.
(97-2-A5), 6.875%, due 01/28/24 115,490
508,447 Citicorp Mortgage Securities (98-5-A1),
6.75%, due 03/25/25 482,846
435,147 Countrywide Home Loans (97-8-A1), 6.75%,
due 01/25/28 433,180
2,473,599 Federal Home Loan Mortgage Corp.
(1468-ZA), 7%, due 02/15/22 (PAC) 2,335,696
41,429 Federal Home Loan Mortgage Corp.
(1578-O), 7%, due 09/15/23 (PAC) 38,897
781,000 Federal Home Loan Mortgage Corp.
(1588-QD), 6.5%, due 09/15/23 (PAC) 708,500
450,000 Federal Home Loan Mortgage Corp.
(1944-GB), 7.5%, due 04/17/24 448,241
1,000,000 Federal Home Loan Mortgage Corp.
(2018-H), 6.5%, due 01/15/28 (PAC) 970,550
1,000,000 Federal Home Loan Mortgage Corp.
(2043-CH), 6%, due 08/15/26 (PAC) 905,890
See accompanying notes to financial statements.
8
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April 30, 2000
Principal
Amount Value
---------- -----------
Collateralized Mortgage Obligations
(Continued)
$1,000,000 Federal Home Loan Mortgage Corp.
(2061-TA), 5.25%, due 10/15/27 (PAC) $ 827,520
500,000 Federal Home Loan Mortgage Corp.
(2063-PV), 6.25%, due 10/15/26 (PAC) 460,590
2,000,000 Federal Home Loan Mortgage Corp.
(2151-JE), 6%, due 01/15/27 1,722,200
16,357 Federal Home Loan Mortgage
Corp.-Government National Mortgage
Association (41-K), 8%, due 04/25/24
(TAC) 16,322
555,485 Federal National Mortgage Association
(94-2-N), 6.5%, due 01/25/24 (TAC) 510,869
404,327 Federal National Mortgage Association
(G3-40-ZC), 6.5%, due 12/25/23 371,366
1,455,943 Financial Asset Securitization, Inc.
(97-NAM1-A4), 7.75%, due 05/25/27 1,391,652
1,000,000 GE Capital Mortgage Services, Inc.
(99-15-A12), 7%, due 08/25/29 937,060
972,464 Norwest Asset Securities Corp.
(97-8-A4), 7.5%, due 06/25/27 927,672
433,521 Norwest Asset Securites Corp.
(97-15-A1), 6.75%, due 10/25/12 417,910
350,000 Residential Funding Mortgage Securities
I (97-S2-A7), 7%, due 12/25/27 324,640
480,561 Residential Funding Mortgage Securities
I (97-S5-A2), 7.5%, due 04/25/27 473,093
400,000 Residential Funding Mortgage Securities
I (98-S8-A3), 6.5%, due 04/25/28 356,624
-----------
Total Collateralized Mortgage
Obligations (Cost: $17,628,161) 16,810,688
-----------
Foreign Government Bonds & Notes (8.9%)
CAD 710,000 Canada (Government of), 5%, due 09/01/04 456,747
EUR 195,000 Federal Republic of Germany, 5.125%, due
11/21/00 178,446
EUR 795,000 Federal Republic of Germany, 6.5%, due
10/14/05 769,450
EUR 1,046,000 French O.A.T., 5.25%, due 04/25/08 948,246
EUR 94,000 Hypothekenbk In Essen (Germany), 4.25%,
due 07/06/09 76,471
EUR 235,000 Kingdom of Belgium, 6.25%, due 03/28/28 224,000
DKK 1,105,000 Kingdom of Denmark, 7%, due 12/15/04 142,603
SEK 2,200,000 Kingdom of Sweden, 5%, due 01/15/04 243,352
EUR 260,000 Kingdom of the Netherlands, 6.5%, due
04/15/03 249,275
AUD 75,000 New South Wales Treasury Corp., 5.5%,
due 10/01/02 42,666
200,000 Province of Manitoba (Canada), 5.5%, due
10/01/08 176,750
200,000 Province of Quebec (Canada), 7%, due
01/30/07 196,644
AUD 88,000 Queensland Government Developmental
Authority (Australia), 8%, due
05/14/03 53,341
EUR 426,000 Spain (Government of), 5.25%, due
01/31/03 391,311
See accompanying notes to financial statements.
9
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TCW Galileo Core Fixed Income Fund
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Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- -----------
Foreign Government Bonds & Notes
(Continued)
$ 400,000 The Dominion of New Zealand, 8.75%, due
12/15/06 $ 430,052
GBP 125,000 United Kingdom Treasury Strip, 7%, due
06/07/02 198,784
-----------
Total Foreign Government Bonds & Notes
(Cost: $5,351,938) 4,778,138
-----------
U.S. Government Agency Obligations
(13.6%)
$ 600,000 Federal Home Loan Mortgage Corp., 5%,
due 01/15/04 556,524
850,000 Federal Home Loan Mortgage Corp., 5.5%,
due 05/15/02 824,730
964,043 Federal Home Loan Mortgage Corp., Pool
#786793, 6.984%, due 10/01/29 936,548
2,050,000 Federal National Mortgage Association,
5.25%, due 01/15/03 1,954,265
1,150,000 Federal National Mortgage Association,
5.25%, due 01/15/09 996,153
1,150,000 Federal National Mortgage Association,
6%, due 05/15/08 1,058,518
970,773 Federal National Mortgage Association,
Pool # 510299, 6.705%, due 08/01/29 932,861
-----------
Total U.S. Government Agency Obligations
(Cost: $7,387,186) 7,259,599
-----------
U.S. Treasury Bonds (7.3%)
1,900,000 United States Treasury Bonds, 6.125%,
due 11/15/27 1,882,501
600,000 United States Treasury Bonds, 8.5%, due
02/15/20 748,452
700,000 United States Treasury Bonds, 10.625%,
due 08/15/15 988,456
200,000 United States Treasury Bonds, 12%, due
08/15/13 267,282
-----------
Total U.S. Treasury Bonds
(Cost: $3,876,639) 3,886,691
-----------
U.S. Treasury Notes (9.4%)
1,400,000 United States Treasury Notes, 5.5%, due
03/31/03 1,358,070
700,000 United States Treasury Notes, 5.75%, due
06/30/01 693,455
600,000 United States Treasury Notes, 5.875%,
due 10/31/01 593,202
80,000 United States Treasury Notes, 5.875%,
due 11/15/05 77,506
550,000 United States Treasury Notes, 6.125%,
due 12/31/01 545,149
1,050,000 United States Treasury Notes, 6.25%, due
02/15/07 1,035,069
700,000 United States Treasury Notes, 6.5%, due
10/15/06 697,998
-----------
Total U.S. Treasury Notes
(Cost: $5,037,281) 5,000,449
-----------
Total Fixed Income Securities
(Cost: $51,066,154) (91.3%) 48,770,784
-----------
Short-Term Investments
----------------------
249,903 American Express Co., 6.063%, due
05/10/00 249,903**
249,903 American Express Co., 6.09%, due
05/22/00 249,903**
416,504 American Express Co., 6.1%, due 05/01/00 416,504**
333,203 Bank of America, 6.18%, due 06/20/00 333,203**
166,602 Bank of Nova Scotia, 6.05%, due 05/08/00 166,602**
333,203 BNP Paribas, S.A., 6.05%, due 05/10/00 333,203**
333,203 Credit Agricole, 6%, due 05/03/00 333,203**
See accompanying notes to financial statements.
10
<PAGE>
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April 30, 2000
Principal
Amount Short-Term Investments (Continued) Value
---------- ---------------------------------- -----------
$1,065,253 Fleet National Bank, 6.193%, due
10/31/00 $ 1,065,253**
800,594 Foreign Currency Call Accounts 800,594
3,563,011 Investors Bank & Trust Depository
Reserve, 4.85%, due 05/01/00 3,563,011
602,774 Merrimac Money Market Fund 602,774**
166,602 Morgan Stanley Dean Witter & Co., 6.15%,
due 11/22/00 166,602**
-----------
Total Short-Term Investments
(Cost: $8,280,755) (15.5%) 8,280,755
-----------
Total Investments (Cost: $59,346,909)
(106.8%) 57,051,539
Liabilities in Excess of Other Assets
(-6.8%) (3,620,528)
-----------
Net Assets (100.0%) $53,431,011
===========
Notes to the Schedule of Investments:
AUD - Australian Dollar.
CAD - Canadian Dollar.
DKK - Danish Krone.
EUR - Euro Currency.
GBP - British Pound Sterling.
SEK - Swedish Krona.
PAC - Planned Amortization Class.
TAC - Target Amortization Class.
* Restricted security (Note 9).
** Represents investments of security lending collateral (Note 3).
See accompanying notes to financial statements.
11
<PAGE>
TCW Galileo High Yield Bond Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited)
Principal
Amount Fixed Income Securities Value
---------- ----------------------- ------------
Advertising (0.7% of Net Assets)
$1,245,000 Adams Outdoor Advertising, L.P., 10.75%,
due 03/15/06 $ 1,269,900
------------
Aerospace/Defense (0.8%)
600,000 BE Aerospace, Inc., 8%, due 03/01/08 483,000
1,295,000 BE Aerospace, Inc., 9.5%, due 11/01/08 1,133,125
------------
Total Aerospace/Defense 1,616,125
------------
Automotive (4.2%)
725,000 American Axle & Manufacturing Holdings,
Inc., 9.75%, due 03/01/09 690,562
1,900,000 Federal-Mogul Corp., 7.875%, due
07/01/10 1,447,458
1,850,000 Hayes Lemmerz International, Inc.,
8.25%, due 12/15/08 1,581,750
970,000 Hayes Lemmerz International, Inc.,
9.125%, due 07/15/07 887,550
1,300,000 JL French Automotive Castings, Inc.,
11.5%, due 06/01/09 1,283,750
1,500,000 Lear Corp., Series B, 8.11%, due
05/15/09 1,338,990
170,000 Navistar International Corp., 8%, due
02/01/08 159,800
700,000 Transportation Manufacturing Operation
Co., 11.25%, due 05/01/09 672,000
------------
Total Automotive 8,061,860
------------
Banking & Financial Services (3.0%)
2,600,000 AmeriCredit Corp., 9.875%, due 04/15/06 2,548,000
165,000 Chevy Chase Savings Bank, 9.25%, due
12/01/05 157,575
880,000 Chevy Chase Savings Bank, 9.25%, due
12/01/08 836,000
1,245,000 Forest City Enterprises, Inc., 8.5%, due
03/15/08 1,126,725
1,050,000 Metris Companies, Inc., 10.125%, due
07/15/06 1,008,000
------------
Total Banking & Financial Services 5,676,300
------------
Building Materials (1.1%)
285,000 Building Materials Corp., 8.625%, due
12/15/06 252,937
700,000 Juno Lighting, Inc., 11.875%, due
07/01/09 588,000
1,500,000 NCI Building Systems, Inc., 9.25%, due
05/01/09 1,372,500
------------
Total Building Materials 2,213,437
------------
Chemicals (5.2%)
1,555,000 Borden Chemicals & Plastics, L.P., 9.5%,
due 05/01/05 1,453,925
350,000 General Chemical Industrial Products,
10.625%, due 05/01/09 301,000
1,000,000 Gentek, Inc., 11%, due 08/01/09 1,005,000
75,000 GEO Specialty Chemicals, Inc., 10.125%,
due 08/01/08 64,500
1,175,000 Huntsman ICI Chemicals, LLC, 10.125%,
due 07/01/09 1,169,125
915,000 Huntsman Industries/Specialty Chemical
Corp., (144A), 9.5%, due 07/01/07 837,225*
1,325,000 ISP Holdings, Inc., 9%, due 10/15/03 1,192,500
1,450,000 Lyondell Chemical Companies, Inc.,
9.625%, due 05/01/07 1,435,500
600,000 Lyondell Chemical Companies, Inc.,
10.875%, due 05/01/09 594,000
205,000 Polymer Group, Inc., 8.75%, due 03/01/08 183,475
See accompanying notes to financial statements.
12
<PAGE>
[ICON]
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April 30, 2000
Principal
Amount Value
---------- ------------
Chemicals (Continued)
$ 750,000 Sterling Chemicals, Inc., Series B,
12.375%, due 07/15/06 $ 766,875
1,215,000 Texas Petrochemicals Corp., 11.125%, due
07/01/06 996,300
------------
Total Chemicals 9,999,425
------------
Commercial Services (2.4%)
35,000 Anthony Crane Rentals, L.P., 10.375%,
due 08/01/08 24,850
825,000 Avis Rent A Car, Inc., 11%, due 05/01/09 860,062
1,300,000 Stericycle, Inc., 12.375%, due 11/15/09 1,313,000
175,000 United Rentals, Inc., 9%, due 04/01/09 153,125
425,000 United Rentals, Inc., 9.25%, due
01/15/09 378,250
650,000 United Rentals, Inc., 9.5%, due 06/01/08 594,750
1,365,000 Williams Scotsman, Inc., 9.875%, due
06/01/07 1,242,150
------------
Total Commercial Services 4,566,187
------------
Computer Services (2.5%)
1,500,000 Anteon Corp., 12%, due 05/15/09 1,350,000
730,000 infoUSA, Inc., 9.5%, due 06/15/08 642,400
1,250,000 PSINet, Inc., 10.5%, due 12/01/06 1,125,000
1,900,000 PSINet, Inc., 11%, due 08/01/09 1,710,000
------------
Total Computer Services 4,827,400
------------
Conglomerates (0.3%)
620,000 Insilco Corp., 12%, due 08/15/07 585,900
------------
Construction (1.3%)
1,025,000 Atrium Companies, Inc., 10.5%, due
05/01/09 966,062
650,000 Hovnanian Enterprises, Inc., 9.125%, due
05/01/09 568,750
600,000 Lennar Corp., 9.95%, due 05/01/10 571,500
460,000 Standard Pacific Corp., 8%, due 02/15/08 397,900
------------
Total Construction 2,504,212
------------
Containers & Packaging (3.7%)
950,000 Anchor Glass Container Corp., 9.875%,
due 03/15/08 598,500
430,000 BWAY Corp., 10.25%, due 04/15/07 384,850
500,000 Consolidated Container Companies, LLC,
(144A), 10.125%, due 07/15/09 500,000*
700,000 Consumers International, Inc., 10.25%,
due 04/01/05 455,000
665,000 Consumers Packaging, Inc., 9.75%, due
02/01/07 352,450
780,000 Huntsman Packaging Corp., 9.125%, due
10/01/07 803,400
745,000 Paperboard Industries International,
Inc., 8.375%, due 09/15/07 659,325
3,100,000 U.S. Can Corp., Series B, 10.125%, due
10/15/06 3,255,000
------------
Total Containers & Packaging 7,008,525
------------
Electronics (3.9%)
1,650,000 360networks, Inc., (144A), 13%, due
05/01/08 1,621,125*
1,905,000 Ametek, Inc., 7.2%, due 07/15/08 1,693,907
1,635,000 Communications & Power Industries, Inc.,
12%, due 08/01/05 1,283,475
See accompanying notes to financial statements.
13
<PAGE>
TCW Galileo High Yield Bond Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- ------------
Electronics (Continued)
$2,035,000 International Wire Group, Inc., 11.75%,
due 06/01/05 $ 2,090,962
615,000 Viasystems, Inc., 9.75%, due 06/01/07 525,825
255,000 Wavetek Corp., 10.125%, due 06/15/07 276,114
------------
Total Electronics 7,491,408
------------
Energy & Oil Services (4.9%)
1,985,000 Forest Oil Corp., 10.5%, due 01/15/06 2,004,850
675,000 Grey Wolf, Inc., 8.875%, due 07/01/07 621,000
35,000 Gulf Canada Resources, Ltd., 9.25%, due
01/15/04 35,051
275,000 Gulf Canada Resources, Ltd., 9.625%, due
07/01/05 278,869
1,190,000 Magnum Hunter Resources, Inc., 10%, due
06/01/07 1,068,025
1,175,000 Plains Resources, Inc., 10.25%, due
03/15/06 1,128,000
1,100,000 Pride International, Inc., 10%, due
06/01/09 1,100,000
1,800,000 R&B Falcon Corp., 9.5%, due 12/15/08 1,746,000
425,000 Swift Energy Company, Inc., 10.25%, due
08/01/09 412,250
1,025,000 Trico Marine Services, Inc., Series G,
8.5%, due 08/01/05 927,625
------------
Total Energy & Oil Services 9,321,670
------------
Entertainment & Leisure (7.4%)
1,200,000 Alliance Atlantis Communications Corp.,
13%, due 12/15/09 1,200,000
1,395,000 Boyd Gaming Corp., 9.25%, due 10/01/03 1,370,588
1,435,000 Cinemark USA, Inc., Series B, 9.625%,
due 08/01/08 1,004,500
1,005,000 Harrahs Operating Company, Inc., 7.875%,
due 12/15/05 937,163
1,665,000 Hollywood Park, Inc., 9.25%, due
02/15/07 1,648,350
1,100,000 International Game Technology, Inc.,
8.375%, due 05/15/09 1,020,250
1,245,000 Marvel Enterprises, Inc., 12%, due
06/15/09 971,100
1,095,000 Mohegan Tribal Gaming, Inc., 8.75%, due
01/01/09 1,040,250
1,000,000 Park Place Entertainment, Inc., 9.375%,
due 02/15/07 990,000
825,000 Regal Cinemas, Inc., 8.875%, due
12/15/10 297,000
905,000 Regal Cinemas, Inc., 9.5%, due 06/01/08 371,050
400,000 SFX Entertainment, Inc., 9.125%, due
02/01/08 402,000
1,495,000 SFX Entertainment, Inc., 9.125%, due
12/01/08 1,502,475
1,430,000 Station Casinos, Inc., 9.75%, due
04/15/07 1,430,000
------------
Total Entertainment & Leisure 14,184,726
------------
Foods, Hotels & Restaurants (5.5%)
1,300,000 Boca Resorts, Inc., 9.875%, due 04/15/09 1,189,500
620,000 Cott Corp., 9.375%, due 07/01/05 598,300
1,025,000 Di Giorgio Corp., 10%, due 06/15/07 912,250
480,000 HMH Properties, Inc., 7.875%, due
08/01/08 416,400
2,265,000 International Home Foods, Inc., 10.375%,
due 11/01/06 2,242,350
1,750,000 ITT Corp., 6.75%, due 11/15/05 1,535,888
100,000 ITT Corp. (New), 6.25%, due 11/15/00 98,804
1,350,000 La Quinta/Meditrust, Inc., 7.11%, due
10/17/01 1,120,500
1,215,000 New World Pasta Company, Inc., 9.25%,
due 02/15/09 911,250
1,115,000 Packaged Ice, Inc., 9.75%, due 02/01/05 903,150
See accompanying notes to financial statements.
14
<PAGE>
[ICON]
--------------------------------------------------------------------------------
April 30, 2000
Principal
Amount Value
---------- ------------
Foods, Hotels & Restaurants (Continued)
$ 325,000 Signature Resorts/Sunterra, Inc., 9.25%,
due 05/15/06 $ 162,500
1,100,000 Signature Resorts/Sunterra, Inc., 9.75%,
due 10/01/07 363,000
------------
Total Foods, Hotels & Restaurants 10,453,892
------------
Healthcare (4.9%)
1,200,000 Bio-Rad Laboratories, Inc., (144A),
11.625%, due 02/15/07 1,230,000*
1,850,000 Concentra Operating Corp., (144A), 13%,
due 08/15/09 1,332,000*
1,350,000 Express Scripts, Inc., 9.625%, due
06/15/09 1,275,750
1,175,000 Hanger Orthopedic Group, Inc., 11.25%,
due 06/15/09 910,625
645,000 Hudson Respiratory Care, Inc., 9.125%,
due 04/15/08 490,200
395,000 Insight Health Services Corp., Series B,
9.625%, due 06/15/08 341,675
890,000 Prime Medical Services, Inc., 8.75%, due
04/01/08 747,600
1,400,000 Tenet Healthcare Corp., 8.125%, due
12/01/08 1,302,000
980,000 Tenet Healthcare Corp., 8.625%, due
01/15/07 943,250
900,000 Unilab Finance Corp., 12.75%, due
09/28/09 897,750
------------
Total Healthcare 9,470,850
------------
Household Products (1.2%)
383,000 Boyds Collection, Ltd., 9%, due 05/15/08 338,955
1,420,000 Home Interiors & Gifts, Inc., 10.125%,
due 06/01/08 1,121,800
400,000 Owens-Illinois, Inc., 7.15%, due
05/15/05 363,600
500,000 Owens-Illinois, Inc., 7.5%, due 05/15/10 438,040
------------
Total Household Products 2,262,395
------------
Machinery (0.2%)
355,000 AGCO Corp., 8.5%, due 03/15/06 315,950
------------
Media--Broadcasting & Publishing (15.0%)
1,500,000 Acme Television Corp., 0%, due 09/30/04 1,372,500
1,000,000 Adelphia Communications Corp., 9.375%,
due 11/15/09 937,500
400,000 Adelphia Communications Corp., Series B,
9.25%, due 10/01/02 396,000
1,700,000 American Media Operations, Inc., 10.25%,
due 05/01/09 1,610,750
295,000 Century Communications Corp., 9.5%, due
03/01/05 284,675
450,000 Charter Communications Holdings, LLC,
0%, due 04/01/11 246,375
1,000,000 Charter Communications Holdings, LLC,
(144A), 10%, due 04/01/09 965,000*
1,400,000 Classic Cable, Inc., 9.375%, due
08/01/09 1,312,500
2,000,000 Classic Cable, Inc., (144A), 10.5%, due
03/01/10 1,960,000*
585,000 CSC Holdings, Inc., 7.625%, due 07/15/18 509,863
1,600,000 EchoStar DBS Corp., 9.375%, due 02/01/09 1,548,000
1,100,000 Garden State Newspapers, Inc., 8.625%,
due 07/01/11 957,000
275,000 Garden State Newspapers, Inc., 8.75%,
due 10/01/09 242,688
60,000 Hollinger International Publishing,
Inc., 8.625%, due 03/15/05 58,200
175,000 Hollinger International Publishing,
Inc., 9.25%, due 03/15/07 169,750
950,000 K-III Communications Corp., 8.5%, due
02/01/06 912,000
See accompanying notes to financial statements.
15
<PAGE>
TCW Galileo High Yield Bond Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- ------------
Media--Broadcasting & Publishing
(Continued)
$ 295,000 Primedia, Inc., 7.625%, due 04/01/08 $ 268,450
495,000 Rogers Cablesystems, Ltd., 10%, due
03/15/05 519,750
625,000 Rogers Communications, Inc., 8.875%, due
07/15/07 603,125
600,000 Sinclair Broadcasting Group, Inc., 9%,
due 07/15/07 534,000
1,700,000 Sinclair Broadcasting Group, Inc., 10%,
due 09/30/05 1,621,375
2,500,000 Spanish Broadcasting System, Inc.,
9.625%, due 11/01/09 2,443,750
1,950,000 STC Broadcasting, Inc., 11%, due
03/15/07 1,930,500
2,475,000 TV Guide, Inc., 8.125%, due 03/01/09 2,475,000
2,850,000 UIH Australia/Pacific, Inc., 0%, due
05/15/06 2,579,250
905,000 Von Hoffmann Press, Inc., (144A),
10.875%, due 05/15/07 814,500*
1,500,000 WRC Media Corp., 12.75%, due 11/15/09 1,440,000
------------
Total Media--Broadcasting & Publishing 28,712,501
------------
Metals (4.0%)
850,000 California Steel Industries, Series B,
8.5%, due 04/01/09 799,000
1,080,000 Golden Northwest Aluminum, Inc., 12%,
due 12/15/06 1,125,900
990,000 International Wire Group, Inc., Series
B, 11.75%, due 06/01/05 1,017,225
1,000,000 Jorgensen Earle M. Co., Series B, 9.5%,
due 04/01/05 920,000
1,930,000 Kaiser Aluminum & Chemicals Corp.,
10.875%, due 10/15/06 1,862,450
825,000 Neenah Corp., 11.125%, due 05/01/07 643,500
125,000 Neenah Corp., Sr. Sub. Notes, 11.125%,
due 05/01/07 97,500
890,000 Wheeling Pittsburgh Corp., 9.25%, due
11/15/07 809,900
500,000 WHX Corp., 10.5%, due 04/15/05 462,500
------------
Total Metals 7,737,975
------------
Paper & Forest Products (4.0%)
505,000 Buckeye Technologies, Inc., 8%, due
10/15/10 465,863
750,000 Building Materials Corp., Series B, 8%,
due 10/15/07 633,750
1,725,000 Packaging Corp. of North America,
9.625%, due 04/01/09 1,733,625
1,355,000 Riverwood International Corp., 10.625%,
due 08/01/07 1,348,225
875,000 Specialty Paperboard, Inc., 9.375%, due
10/15/06 809,375
2,445,000 Stone Container Corp., 12.25%, due
04/01/02 2,457,225
300,000 Tembec Industries, Inc., 8.625%, due
06/30/09 294,000
------------
Total Paper & Forest Products 7,742,063
------------
Pollution Control (1.0%)
810,000 Allied Waste North America, Inc.,
7.625%, due 01/01/06 607,500
1,400,000 Allied Waste North America, Inc.,
7.875%, due 01/01/09 1,036,000
415,000 Envirosource, Inc., 9.75%, due 06/15/03 269,750
1,050,000 Mid-American Waste System, Inc., 12.25%,
due 02/15/03 10,500**
700,000 Safety-Kleen Corp., 9.25%, due 05/15/09 21,000
245,000 Safety-Kleen Services, Inc., 9.25%, due
06/01/08 14,700
------------
Total Pollution Control 1,959,450
------------
See accompanying notes to financial statements.
16
<PAGE>
[ICON]
--------------------------------------------------------------------------------
April 30, 2000
Principal
Amount Value
---------- ------------
Retail (0.5%)
$1,000,000 J. Crew Operating Corp., 10.375%, due
10/15/07 $ 860,000
290,000 Specialty Retailers, Inc., 8.5%, due
07/15/05 87,000
------------
Total Retail 947,000
------------
Telecommunications (14.7%)
1,800,000 Alamosa PCS Holdings, Inc., 0%, due
02/15/10 922,500
3,200,000 CapRock Communications Corp., 11.5%, due
05/01/09 3,008,000
1,075,000 CapRock Communications Corp., 12%, due
07/15/08 1,032,000
2,000,000 Frontier Corp., 7.25%, due 05/15/04 1,817,140
3,900,000 GT Group Telecom, Inc., 0%, due 02/01/10 2,067,000
1,000,000 ICG Holdings, Inc., 0%, due 05/01/06 809,640
1,875,000 KMC Telecom Holdings, Inc., 13.5%, due
05/15/09 1,725,000
685,000 Level 3 Communications, Inc., 9.125%,
due 05/01/08 595,950
2,600,000 Level 3 Communications, Inc., (144A),
11%, due 03/15/08 2,496,000*
1,025,000 Nextel Communications, Inc., 0%, due
10/31/07 732,875
2,600,000 Nextlink Communications, Inc., (144A),
0%, due 12/01/09 1,423,500*
545,000 Nextlink Communications, Inc., 9.625%,
due 10/01/07 506,850
2,130,000 Nextlink Communications, Inc., 10.75%,
due 11/15/08 2,092,725
2,525,000 Primus Telecom Group, Inc., 12.75%, due
10/15/09 2,525,000
1,600,000 Rhythms NetConnections, Inc., 12.75%,
due 04/15/09 1,360,000
1,000,000 Rhythms NetConnections, Inc., (144A),
14%, due 02/15/10 890,000*
1,045,000 SBA Communications Corp., 0%, due
03/01/08 721,050
600,000 Spectrasite Holdings, Inc., (144A),
10.75%, due 03/15/10 588,000*
2,075,000 Verio, Inc., 11.25%, due 12/01/08 2,043,875
750,000 Williams Communication Group, Inc.,
10.7%, due 10/01/07 759,375
------------
Total Telecommunications 28,116,480
------------
Textiles, Clothing & Fabrics (0.5%)
500,000 Westpoint Stevens, Inc., 7.875%, due
06/15/05 415,000
810,000 Westpoint Stevens, Inc., 7.875%, due
06/15/08 648,000
------------
Total Textiles, Clothing & Fabrics 1,063,000
------------
Transportation (0.9%)
675,000 International Shipholding Corp., 9%, due
07/01/03 658,125
1,070,000 Western Star Trucks Holdings, Ltd.,
8.75%, due 05/01/07 995,100
------------
Total Transportation 1,653,225
------------
Utilities (2.2%)
825,000 CMS Energy Corp., 7.5%, due 01/15/09 718,616
1,115,000 CMS Energy Corp., 7.625%, due 11/15/04 1,034,464
Utilities (Continued)
85,000 CMS Energy Corp., 8.125%, due 05/15/02 83,191
1,907,696 Panda Funding Corp., 11.625%, due
08/20/12 1,888,619
425,000 TNP Enterprises, Inc., (144A), 10.25%,
due 04/01/10 428,188*
------------
Total Utilities 4,153,078
------------
See accompanying notes to financial statements.
17
<PAGE>
TCW Galileo High Yield Bond Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- ------------
Miscellaneous (0.4%)
$1,245,000 Jordan Industries, Inc., 0%, due
04/01/09 $ 809,250
------------
Total Fixed Income Securities
(Cost: $201,530,352) (96.4%) 184,724,184
------------
Number of
Shares,
Warrants,
or Rights Equity Securities
---------- -----------------
3,300 Classic Communications, Inc., (144A),
Common Stock 55,011***
1,250 Forman Petroleum Corp., Warrants, expire
06/01/04 1**
2,920 Terex Corp., Stock Appreciation Rights,
expire 05/15/02 40,880**
------------
Total Equity Securities (Cost: $132)
(0.0%) 95,892
------------
Principal
Amount Short-Term Investments
---------- ----------------------
$ 377,822 American Express Co., 6.063%, due
05/10/00 377,822***
377,822 American Express Co., 6.09%, due
05/22/00 377,822***
629,703 American Express Co., 6.1%, due 05/01/00 629,703***
503,763 Bank of America, 6.18%, due 06/20/00 503,763***
251,881 Bank of Nova Scotia, 6.05%, due 05/08/00 251,881***
503,763 BNP Paribas, S.A., 6.05%, due 05/10/00 503,763***
503,763 Credit Agricole, 6%, due 05/03/00 503,763***
726,099 Fleet National Bank, 6.193%, due
10/31/00 726,099***
1,283,707 Investors Bank & Trust Depository
Reserve, 4.85%, due 05/01/00 1,283,707
1,295,753 Merrimac Money Market Fund 1,295,753***
751,881 Morgan Stanley Dean Witter & Co., 6.15%,
due 11/22/00 751,881***
------------
Total Short-Term Investments
(Cost: $7,205,957) (3.8%) 7,205,957
------------
Total Investments (Cost: $208,736,441)
(100.2%) 192,026,033
Liabilities in Excess of Other Assets
(-0.2%) (425,796)
------------
Net Assets (100.0%) $191,600,237
============
Notes to the Schedule of Investments:
* Restricted security (Note 9).
** Non-income producing.
*** Represents investments of security lending collateral (Note 3).
See accompanying notes to financial statements.
18
<PAGE>
TCW Galileo Mortgage-backed Securities Fund [ICON]
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) April 30, 2000
Principal
Amount Fixed Income Securities Value
---------- ----------------------- -----------
Collateralized Mortgage Obligations
(17.1% of Net Assets)
$1,261,709 Collateral Mortgage Obligation Trust
(64-Z), 9%, due 11/20/20 $ 1,276,232
109,294 Federal Home Loan Mortgage Corp.
(1899-D), 7.25%, due 09/15/23 (TAC) 109,278
1,706,024 Federal Home Loan Mortgage Corp.
(2021-AD), 7.5%, due 08/15/24 1,674,804
1,798,642 Federal Home Loan Mortgage Corp.
(2032-AU), 7.5%, due 02/15/27 1,768,785
1,500,000 Federal Home Loan Mortgage Corp.
(2057-HJ), 7%, due 05/15/28 (PAC)
(I/O) 530,460
30,121 Federal National Mortgage Association
(91-130-SQ), 6,606.643%, due 09/25/21
(I/O) (I/F) 25,880
1,193,547 Federal National Mortgage Association
(97-55-T), 7%, due 02/18/27 (TAC) 1,154,969
1,389,511 Federal National Mortgage Association
(G93-8-PH), 6.85%, due 01/25/21 (PAC) 1,367,738
419,364 GE Capital Mortgage Services, Inc.
(97-9-2A7), 7%, due 10/25/27 416,709
450,518 Greenwich Capital Acceptance, Inc.
(91-03), (Private Placement), 9.46%,
due 08/01/19 409,971*
70,507 Guardian Savings and Loan Association
(88-3-A), 6.497%, due 10/25/18 59,931
71,494 Guardian Savings and Loan Association
(89-3-A), 7.535%, due 05/25/19 60,770
468,930 Guardian Savings and Loan Association
(89-4-A), 7.504%, due 07/25/19 445,483
450,022 Guardian Savings and Loan Association
(89-5-A), 7.751%, due 07/25/19 427,521
504,870 Residential Funding Mortgage Securities
I (97-S12-A10), 6.7%, due 08/25/27
(PAC) 501,648
99,202 Resolution Trust Corp. (91-6-C2),
3,299.719%, due 08/25/20 (I/O) 14,880
223,842 Resolution Trust Corp. (91-6-D2),
3,262.129%, due 09/25/28 (I/O) 33,576
661,485 Sears Mortgage Securities (88-A-A2),
0.779%, due 05/25/18 (I/O) 6,747
-----------
Total Collateralized Mortgage
Obligations (Cost: $11,334,236) 10,285,382
-----------
U.S. Government Agency Obligations
(79.3%)
23,994 Federal Home Loan Mortgage Corp., Pool
#212346, 9.5%, due 08/01/01 24,181
614,549 Federal Home Loan Mortgage Corp., Pool
#310005, 8.408%, due 11/01/19 614,549
147,039 Federal Home Loan Mortgage Corp., Pool
#410013, 7.549%, due 12/01/24 147,851
See accompanying notes to financial statements.
19
<PAGE>
TCW Galileo Mortgage-Backed Securities Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- -----------
U.S. Government Agency Obligations
(Continued)
$2,620,203 Federal Home Loan Mortgage Corp., Pool
#610967, 7.413%, due 04/01/28 $ 2,675,041
1,711,926 Federal Home Loan Mortgage Corp., Pool
#755313, 7.006%, due 06/01/28 1,738,712
87,016 Federal Home Loan Mortgage Corp., Pool
#770584, 6.75%, due 05/01/19 86,272
199,070 Federal Home Loan Mortgage Corp., Pool
#785630, 7.074%, due 07/01/26 202,693
70,631 Federal Home Loan Mortgage Corp., Pool
#865006, 8.583%, due 08/01/18 71,127
99,394 Federal Home Loan Mortgage Corp., Pool
#865270, 7.604%, due 12/01/18 99,389
48,280 Federal Home Loan Mortgage Corp., Pool
#865275, 8.425%, due 02/01/19 48,493
29,546 Federal National Mortgage Association,
Pool #096193, 7.987%, due 09/01/18 29,649
101,568 Federal National Mortgage Association,
Pool #163492, 8.5%, due 05/01/16 102,696
208,937 Federal National Mortgage Association,
Pool #201909, 7.479%, due 09/01/19 210,510
345,652 Federal National Mortgage Association,
Pool #284916, 6.791%, due 06/01/27 346,813
313,961 Federal National Mortgage Association,
Pool #303334, 7.4%, due 04/01/25 322,209
83,413 Federal National Mortgage Association,
Pool #313920, 7.671%, due 11/01/27 84,434
97,243 Federal National Mortgage Association,
Pool #358869, 7.239%, due 09/01/26 98,943
43,965 Federal National Mortgage Association,
Pool #369080, 6.975%, due 04/01/27 44,374
281,135 Federal National Mortgage Association,
Pool #376663, 6.67%, due 06/01/27 281,186
42,537 Federal National Mortgage Association,
Pool #392275, 6.989%, due 06/01/27 42,934
1,441,690 Federal National Mortgage Association,
Pool #392536, 7.6%, due 08/01/27 1,422,162
145,225 Federal National Mortgage Association,
Pool #393943, 6.981%, due 07/01/27 147,428
106,308 Federal National Mortgage Association,
Pool #394575, 7.94%, due 07/01/27 107,245
329,246 Federal National Mortgage Association,
Pool #394996, 7.107%, due 08/01/27 335,554
1,792,890 Federal National Mortgage Association,
Pool #396814, 6.637%, due 07/01/27 1,799,075
260,011 Federal National Mortgage Association,
Pool #397897, 7.249%, due 08/01/27 265,034
See accompanying notes to financial statements.
20
<PAGE>
[LOGO]
--------------------------------------------------------------------------------
April 30, 2000
Principal
Amount Value
--------- -----------
U.S. Government Agency Obligations (Continued)
$2,212,943 Federal National Mortgage Association,
Pool #434001, 7.151%, due 12/01/27 $ 2,240,605
3,040,781 Federal National Mortgage Association,
Pool #457319, 6.78%, due 10/01/28 3,082,050
8,784,421 Federal National Mortgage Association,
Pool #535174, 6.318%, due 07/01/39 8,784,422
1,842,781 Government National Mortgage
Association, Pool #80011, 7.125%, due
11/20/26 1,861,375
1,853,203 Government National Mortgage
Association, Pool #80022, 7.125%, due
12/20/26 1,871,921
2,044,671 Government National Mortgage
Association, Pool #80057, 6.375%, due
04/01/27 2,043,629
3,969,765 Government National Mortgage
Association, Pool #80185, 6%, due
04/20/28 3,950,670
2,591,377 Government National Mortgage
Association, Pool #80186, 6.375%, due
04/20/28 2,596,274
9,901,752 Government National Mortgage
Association, Pool #80329, 6%, due
10/20/29 9,765,603
-------------
Total U.S. Government Agency Obligations
(Cost: $47,642,076) 47,545,093
-------------
Total Fixed Income Securities
(Cost: $58,976,312) (96.4%) 57,830,475
-------------
Short-Term Investments (Cost: $2,045,254) (3.4%)
------------------------------------------------
2,045,254 Repurchase Agreement, Lehman Brothers, dated
04/28/00, 5.75%, due 05/01/00 (Collateralized
by $2,045,254 current face Federal Home Loan
Mortgage Corp., Pool #2127, 6%, due 01/15/11,
valued at $2,086,153) 2,045,254
-----------
Total Investments (Cost: $61,021,566) (99.8%) 59,875,729
Excess of Other Assets over Liabilities (0.2%) 116,214
-----------
Net Assets (100.0%) $59,991,943
===========
Notes to the Schedule of Investments:
I/F - Inverse Floating rate security whose interest rate moves in the opposite
direction of prevailing interest rates.
I/O - Interest Only Security.
PAC - Planned Amortization Class.
TAC - Target Amortization Class.
* Security valued at fair value as determined in good faith under procedures
established by and under the general supervision of the Fund's Board of
Directors.
See accompanying notes to financial statements.
21
<PAGE>
TCW Galileo Total Return Mortgage-Backed Securities Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited)
Principal
Amount Fixed Income Securities Value
---------- ----------------------- -----------
Collateralized Mortgage Obligations
(70.3% of Net Assets)
$3,961,094 ABN Amro Mortgage Corp. (98-4-A6),
6.75%, due 11/25/28 (TAC) $ 3,502,687
2,013,462 Bear Stearns Mortgage Securities, Inc.
(97-2-A5), 6.875%, due 01/28/24 1,898,936
2,000,000 CMC Securities Corp. III (94-A-A12),
6.75%, due 02/25/24 (PAC) 1,940,844
1,500,000 CMC Securities Corp. III (94-A-A22),
7.411%, due 02/25/24 (I/F) 1,035,000
4,710,119 Countrywide Funding Corp. (93-7-A5), 7%,
due 11/25/23 (TAC) 4,175,194
1,418,798 Federal Home Loan Mortgage Corp.
(1422-SA), 6.37%, due 11/15/07 (I/F) 1,221,429
91,887 Federal Home Loan Mortgage Corp.
(1541-J), 6.5%, due 07/15/23 84,514
3,350,000 Federal Home Loan Mortgage Corp.
(1620-SB), 7.895%, due 11/15/23 (I/F) 2,422,854
3,357,000 Federal Home Loan Mortgage Corp.
(1629-PB), 6%, due 05/15/23 2,819,276
1,782,000 Federal Home Loan Mortgage Corp.
(1662-N), 6.25%, due 01/15/09 1,657,581
814,616 Federal Home Loan Mortgage Corp.
(1717-MA), 6.5%, due 04/15/24 781,974
840,583 Federal Home Loan Mortgage Corp.
(1796-E), 6%, due 09/15/08 780,666
733,233 Federal Home Loan Mortgage Corp.
(1844-E), 6.5%, due 10/15/13 679,845
3,500,000 Federal Home Loan Mortgage Corp.
(2020-D), 6.25%, due 01/15/27 (PAC) 3,200,225
2,774,559 Federal Home Loan Mortgage Corp.
(2052-PA), 6.25%, due 01/15/15 (PAC) 2,752,973
2,000,000 Federal Home Loan Mortgage Corp.
(2061-TA), 5.25%, due 10/15/27 (PAC) 1,655,040
4,000,000 Federal Home Loan Mortgage Corp.
(2121-C), 6%, due 02/15/29 (PAC) 3,332,730
1,000,000 Federal National Mortgage Association
(92-215-PL), 7.25%, due 11/25/21 (PAC) 967,720
311,814 Federal National Mortgage Association
(93-2-B), 7.2%, due 11/25/03 308,069
2,288,691 Federal National Mortgage Association
(93-189-S), 7.221%, due 10/25/23 (I/F) 1,663,329
1,000,000 Federal National Mortgage Association
(93-202-SZ), 10%, due 11/25/23 (I/F)
(TAC) 803,890
292,454 Federal National Mortgage Association
(93-223-EA), 6.5%, due 12/25/23 (PAC) 280,048
1,992,743 Federal National Mortgage Association
(93-X-130A-NA), 6.5%, due 05/25/23 1,879,057
See accompanying notes to financial statements.
22
<PAGE>
[LOGO]
--------------------------------------------------------------------------------
April 30, 2000
Principal
Amount Value
---------- -----------
Collateralized Mortgage Obligations
(Continued)
$3,000,000 Federal National Mortgage Association
(94-40-SA), 6.038%, due 03/25/24 (I/F) $ 2,372,010
1,353,524 Federal National Mortgage Association
(G92-29-J), 8%, due 07/25/22 1,344,456
3,359,699 First Union Residential Securities Trust
(98-A-SA4), 7%, due 04/25/25 3,132,860
368,845 GE Capital Mortgage Services, Inc.
(96-12-A2), 7.25%, due 07/25/11 367,097
2,713,165 GE Capital Mortgage Services, Inc.
(97-5-A2), 7.5%, due 06/25/27 2,583,467
4,000,000 Government National Mortgage Association
(97-2-E), 7.5%, due 02/20/27 3,860,001
2,922,760 Residential Accredit Loans, Inc.
(97-QS-13-A7), 7.25%, due 12/25/27 2,780,276
2,300,000 Residential Asset Securitization Trust
(98-A12-A16), 6.75%, due 11/25/28 2,147,625
2,836,364 Residential Funding Mortgage Securities
I (95-S21-A6), 7.5%, due 12/26/25 2,779,807
184,250 Residential Funding Mortgage Securities
I (95-S7-A9), 8%, due 05/25/10 (I/O) 22,110
-----------
Total Collateralized Mortgage
Obligations (Cost: $63,828,412) 61,233,590
-----------
U.S. Government Agency Obligations
(22.7%)
413,964 Federal Home Loan Mortgage Corp., Pool
#755183, 7.478%, due 12/01/15 420,355
259,623 Federal Home Loan Mortgage Corp., Pool
#846317, 7.25%, due 08/01/26 265,182
746,490 Federal Home Loan Mortgage Corp., Pool
#846510, 7.284%, due 04/01/25 768,191
958,210 Federal Housing Authority (#000-13002),
7.125%, due 03/01/04 905,508
2,801,191 Federal Housing Authority (#012-11216),
7.185%, due 03/25/29 2,647,125
1,838,400 Federal Housing Authority (#044-10592),
7.625%, due 08/01/22 1,774,056
2,528,484 Federal Housing Authority (#112-43055),
9.25%, due 05/25/32 2,566,411
10,019 Federal National Mortgage Association,
Pool #029542, 8.75%, due 07/01/09 10,168
4,380 Federal National Mortgage Association,
Pool #062420, 7.5%, due 03/01/06 4,376
596,397 Federal National Mortgage Association,
Pool #124410, 7.08%, due 07/01/22 611,456
179,203 Federal National Mortgage Association,
Pool #137064, 7.38%, due 03/01/19 180,871
1,887,555 Federal National Mortgage Association,
Pool #252386, 6.5%, due 04/01/19 1,785,829
See accompanying notes to financial statements.
23
<PAGE>
Tcw Galileo Total Return Mortgage-Backed Securities Fund
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) (Continued)
Principal
Amount Value
---------- -----------
U.S. Government Agency Obligations (Continued)
$ 470,488 Federal National Mortgage Association,
Pool #303786, 7.5%, due 02/01/11 $ 471,222
464,217 Federal National Mortgage Association,
Pool #310001,
6%, due 09/01/00 462,750
35,980 Federal National Mortgage Association,
Pool #347216, 6.845%, due 06/01/26 36,209
359,984 Federal National Mortgage Association,
Pool #348025, 6.7%, due 06/01/26 359,902
3,892,587 Federal National Mortgage Association,
Pool #413618, 6.5%, due 03/01/18 3,688,227
19,936 Government National Mortgage
Association, Pool #003933, 8.25%, due
07/15/04 19,973
1,641 Government National Mortgage
Association, Pool #176192, 8.25%, due
12/15/01 1,645
586 Government National Mortgage
Association, Pool #217350, 9.25%, due
08/15/00 587
1,521,417 Government National Mortgage
Association, Pool #351003, 7.5%, due
07/15/28 1,492,419
1,394,640 Government National Mortgage
Association, Pool #365618, 7%, due
10/15/33 1,320,426
-----------
Total U.S. Government Agency Obligations
(Cost: $20,651,174) 19,792,888
-----------
U.S. Treasury Securities (0.4%)
197,000 Certificates Accrual Treasury Strips,
0%, due 08/15/01 181,309
177,000 Certificates Accrual Treasury Strips,
0%, due 05/15/06 119,344
112,000 Certificates Accrual Treasury Strips,
0%, due 08/15/08 65,529
-----------
Total U.S. Treasury Securities
(Cost: $366,890) 366,182
-----------
Total Fixed Income Securities
(Cost: $84,846,476) (93.4%) 81,392,660
-----------
Short-Term Investments (Cost: $5,251,823) (6.1%)
------------------------------------------------
5,251,823 Repurchase Agreement, Lehman Brothers, dated
04/28/00, 5.75%, due 05/01/00 (Collateralized
by $5,251,823 current face Federal Home Loan
Mortgage Corp., Pool #2127, 6%, due 01/15/11,
valued at $5,356,846) 5,251,823
-------------
Total Investments (Cost: $90,098,299) (99.5%) 86,644,483
Excess of Other Assets over Liabilities (0.5%) 473,901
-------------
Net Assets (100.0%) $ 87,118,384
=============
Notes to the Schedule of Investments:
I/F - Inverse Floating rate security whose interest rate moves in the opposite
direction of prevailing interest rates.
I/O - Interest Only Security.
PAC - Planned Amortization Class.
TAC - Target Amortization Class.
See accompanying notes to financial statements.
24
<PAGE>
TCW Galileo Funds, Inc. [LOGO]
--------------------------------------------------------------------------------
U.S. Fixed Income
Statements of Assets and Liabilities (Unaudited) April 30, 2000
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo Total Return
TCW Galileo TCW Galileo TCW Galileo Mortgage- Mortgage-
Money Core Fixed High Yield Backed Backed
Market Income Bond Securities Securities
Fund Fund Fund Fund Fund
------------ ----------- ----------- ----------- ------------
Dollar Amounts in Thousands
(Except per Share Amounts)
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at
Value/(1)/ $ 226,301 $ 57,052 $ 192,026 $ 59,876 $ 86,644
Receivables for
Securities Sold -- 31 1,259 66 34
Receivable for Fund
Shares Sold 906 -- -- -- --
Interest Receivable 1,040 706 5,334 407 521
------------ ---------- ----------- ---------- ----------
Total Assets 228,247 57,789 198,619 60,349 87,199
------------ ---------- ----------- ---------- ----------
LIABILITIES
Distributions Payable 306 89 306 91 24
Payables for Securities
Purchased -- 300 634 -- --
Payables for Fund
Shares Redeemed 1,214 3 -- 209 --
Payables Upon Return of
Securities Loaned
(Note 3) -- 3,917 5,922 -- --
Accrued Management Fees 43 13 108 16 31
Other Accrued Expenses 25 36 49 41 26
------------ ---------- ----------- ---------- ----------
Total Liabilities 1,588 4,358 7,019 357 81
------------ ---------- ----------- ---------- ----------
NET ASSETS $ 226,659 $ 53,431 $ 191,600 $ 59,992 $ 87,118
============ ========== =========== ========== ==========
NET ASSETS CONSIST OF:
Paid-in Capital $ 226,659 $ 59,543 $ 219,150 $ 66,743 $ 91,816
Undistributed Net
Realized Gain (Loss)
on Investments -- (4,349) (10,629) (5,638) 812
Unrealized
(Depreciation) on
Investments -- (2,302) (16,710) (1,146) (3,454)
Undistributed
(Distributions in
excess of) Net
Investment Income -- 539 (211) 33 (2,056)
------------ ---------- ----------- ---------- ----------
NET ASSETS $ 226,659 $ 53,431 $ 191,600 $ 59,992 $ 87,118
============ ========== =========== ========== ==========
NET ASSETS ATTRIBUTABLE
TO:
Institutional Class
Shares $ 226,659 $ 53,354 $ 191,268 $ 59,992 $ 87,083
============ ========== =========== ========== ==========
Advisory Class Shares $ -- $ 77 $ 332 $ -- $ 35
============ ========== =========== ========== ==========
CAPITAL SHARES
OUTSTANDING:
Institutional Class 226,659,280 5,833,148 22,582,677 6,276,431 9,926,987
============ ========== =========== ========== ==========
Advisory Class -- 8,339 38,695 -- 3,921
============ ========== =========== ========== ==========
NET ASSET VALUE PER
SHARE:
Institutional Class $ 1.00 $ 9.15 $ 8.47 $ 9.56 $ 8.77
============ ========== =========== ========== ==========
Advisory Class $ -- $ 9.24 $ 8.57 $ -- $ 9.02
============ ========== =========== ========== ==========
</TABLE>
(1) The identified cost for the TCW Galileo Money Market Fund, the TCW Galileo
Core Fixed Income Fund, the TCW Galileo High Yield Bond Fund, the TCW
Galileo Mortgage-Backed Securities Fund and the TCW Galileo Total Return
Mortgage-Backed Securities Fund at April 30, 2000 was $226,301, $59,347,
$208,736, $61,022 And $90,098, respectively.
See accompanying notes to financial statements.
25
<PAGE>
TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. FIXED INCOME
Statements of Operations (Unaudited) Six Months Ended April 30, 2000
<TABLE>
<CAPTION>
TCW
TCW Galileo
TCW TCW Galileo Total Return
Galileo Galileo TCW Mortgage- Mortgage-
Money Core Fixed Galileo Backed Backed
Market Income High Yield Securities Securities
Fund Fund Bond Fund Fund Fund
------- ---------- ---------- ---------- ------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest (Note 2) $6,392 $ 1,884 $10,730 $2,265 $ 2,648
------ ------- ------- ------ -------
Expenses:
Management Fees 278 110 765 139 218
Accounting Service Fees 29 20 27 14 16
Administration Fees 32 14 30 12 14
Transfer Agent Fees:
Institutional Class 20 20 22 19 20
Advisory Class -- 7 8 -- 7
Custodian Fees 7 7 3 3 3
Professional Fees 19 16 18 13 17
Directors' Fees and
Expenses 4 4 4 4 4
Registration Fees:
Institutional Class -- 4 4 -- 4
Advisory Class -- 3 3 -- 3
Distribution Fees:
Advisory Class
(Note 6) -- -- 5 -- --
Other 29 15 27 13 15
------ ------- ------- ------ -------
Total Expenses 418 220 916 217 321
Less Expenses Borne by
Investment Advisor -- 12 10 27 13
------ ------- ------- ------ -------
Net Expenses 418 208 906 190 308
------ ------- ------- ------ -------
Net Investment Income 5,974 1,676 9,824 2,075 2,340
------ ------- ------- ------ -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND
FOREIGN CURRENCY
Net Realized Gain
(Loss) on:
Investments -- (1,187) (2,148) (168) 697
Foreign Currency -- 57 -- -- --
Change in Unrealized
Appreciation
(Depreciation) on:
Investments -- (365) (6,122) (220) (1,988)
Foreign Currency -- (120) -- -- --
------ ------- ------- ------ -------
Net Realized and
Unrealized (Loss) on
Investments and
Foreign Currency -- (1,615) (8,270) (388) (1,291)
------ ------- ------- ------ -------
INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS $5,974 $ 61 $ 1,554 $1,687 $ 1,049
====== ======= ======= ====== =======
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
[LOGO]
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo Core
Money Market Fund Fixed Income Fund
------------------------ ------------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
2000 October 31, 2000 October 31,
(Unaudited) 1999 (Unaudited) 1999
----------- ----------- ----------- -----------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 5,974 $ 10,300 $ 1,676 $ 4,603
Net Realized (Loss) on
Investments and Foreign
Currency -- -- (1,130) (1,272)
Change in Unrealized
(Depreciation) on
Investments and Foreign
Currency -- -- (485) (3,115)
-------- -------- -------- --------
Increase in Net Assets
Resulting from Operations 5,974 10,300 61 216
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net
Investment Income:
Institutional Class (5,974) (10,300) (1,679) (4,137)
Advisory Class -- -- (2) (2)
-------- -------- -------- --------
Total Distributions to
Shareholders (5,974) (10,300) (1,681) (4,139)
-------- -------- -------- --------
NET CAPITAL SHARE TRANSACTIONS
(NOTE 8)
Institutional Class (34,641) 18,849 (15,695) (88,408)
Advisory Class -- -- (3) 84
-------- -------- -------- --------
Increase (Decrease) in Net
Assets Resulting from Net
Capital Share Transactions (34,641) 18,849 (15,698) (88,324)
-------- -------- -------- --------
Increase (Decrease) in Net
Assets (34,641) 18,849 (17,318) (92,247)
NET ASSETS
Beginning of Period 261,300 242,451 70,749 162,996
-------- -------- -------- --------
End of Period $226,659 $261,300 $ 53,431 $ 70,749
======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. Fixed Income
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
High Yield Mortgage-Backed
Bond Fund Securities Fund
------------------------ ------------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
2000 October 31, 2000 October 31,
(Unaudited) 1999 (Unaudited) 1999
----------- ----------- ----------- -----------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 9,824 $ 17,734 $ 2,075 $ 2,525
Net Realized (Loss) on Investments (2,148) (5,518) (168) --
Change in Unrealized (Depreciation) on
Investments (6,122) (2,104) (220) (103)
-------- -------- ------- -------
Increase in Net Assets Resulting
from Operations 1,554 10,112 1,687 2,422
-------- -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment
Income:
Institutional Class (10,077) (17,287) (2,061) (2,506)
Advisory Class (154) (9) -- --
Distributions in Excess of Net
Investment Income:
Institutional Class (229) -- -- --
-------- -------- ------- -------
Total Distributions to Shareholders (10,460) (17,296) (2,061) (2,506)
-------- -------- ------- -------
NET CAPITAL SHARE TRANSACTIONS
(NOTE 8)
Institutional Class 12,009 29,567 6,870 9,941
Advisory Class 210 202 -- --
-------- -------- ------- -------
Increase in Net Assets Resulting from
Net Capital Share Transactions 12,219 29,769 6,870 9,941
-------- -------- ------- -------
Increase (Decrease) in Net Assets 3,313 22,585 6,496 9,857
NET ASSETS
Beginning of Period 188,287 165,702 53,496 43,639
-------- -------- ------- -------
End of Period $191,600 $188,287 $59,992 $53,496
======== ======== ======= =======
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
[LOGO]
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
TCW Galileo Total Return
Mortgage-Backed
Securities Fund
------------------------
Six Months
Ended
April 30, Year Ended
2000 October 31,
(Unaudited) 1999
----------- -----------
Dollar Amounts in
Thousands
OPERATIONS
Net Investment Income $ 2,340 $ 6,837
Net Realized Gain on Investments 697 36
Change in Unrealized (Depreciation) on
Investments (1,988) (4,058)
------- --------
Increase in Net Assets Resulting from
Operations 1,049 2,815
------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income:
Institutional Class (2,339) (6,750)
Advisory Class (1) --
Distributions in Excess of Net
Investment Income:
Institutional Class (672) (1,384)
------- --------
Total Distributions to Shareholders (3,012) (8,134)
------- --------
NET CAPITAL SHARE TRANSACTIONS (NOTE 8)
Institutional Class (1,230) (5,907)
Advisory Class (1) 37
------- --------
(Decrease) in Net Assets Resulting
from Net Capital Share Transactions (1,231) (5,870)
------- --------
(Decrease) in Net Assets (3,194) (11,189)
NET ASSETS
Beginning of Period 90,312 101,501
------- --------
End of Period $87,118 $ 90,312
======= ========
See accompanying notes to financial statements.
29
<PAGE>
TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited)
Note 1 -- Organization
TCW Galileo Funds, Inc., a Maryland corporation (the "Company"), is an
open-end management investment company registered under the Investment
Company Act of 1940, (the "1940 Act"), as amended, that currently offers a
selection of 20 no-load mutual funds known as the TCW Galileo Funds (the
"Funds"). TCW Investment Management Company (the "Advisor") is the
investment advisor to the Funds. TCW London International, Limited is a
sub-advisor for the TCW Galileo Asia Pacific Equities Fund, the TCW Galileo
Emerging Markets Equities Fund, the TCW Galileo European Equities Fund, the
TCW Galileo International Equities Fund, and the TCW Galileo Japanese
Equities Fund. The advisors are registered under the Investment Advisors
Act of 1940. Each Fund has distinct investment objectives and policies.
Investors Bank & Trust Company serves as the administrator of the Funds.
The Funds' financial statements are separated into three reports: 1) U.S.
Equities Funds, 2) U.S. Fixed Income Funds, and 3) International Funds.
However, all Funds are listed below along with their investment objectives,
and are currently offered by the Company.
U.S. Equities
TCW Galileo Fund Investment Objective
---------------- ---------------------------
Convertible Securities Fund
TCW Galileo Convertible Securities Fund Seeks high total return from
current income and capital
appreciation through
investment principally in
convertible securities.
Non-Diversified U.S. Equity Funds
TCW Galileo Aggressive Growth Equities Seeks long-term capital
Fund appreciation by investing
primarily in publicly-traded
equity securities of medium
capitalization companies.
TCW Galileo Earnings Momentum Fund Seeks capital appreciation
by investing primarily in
publicly-traded equity
securities of companies
experiencing or expected to
experience accelerating
earnings growth.
TCW Galileo Large Cap Growth Fund Seeks long-term capital
appreciation by investment
primarily in publicly-traded
equity securities of large
capitalization U.S.
companies with above average
earnings prospects.
TCW Galileo Large Cap Value Fund Seeks long-term capital
appreciation by investing
primarily in publicly-traded
equity securities of large
capitalization companies.
TCW Galileo Select Equities Fund Emphasizes capital
appreciation and
preservation with focus on
long-term results.
TCW Galileo Small Cap Growth Fund Seeks long-term capital
appreciation by investing
primarily in publicly-traded
equity securities of smaller
capitalization companies.
30
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April 30, 2000
U.S. Equities (Continued)
TCW Galileo Fund Investment Objective
---------------- ---------------------------
Non-Diversified U.S. Equity Funds
TCW Galileo Value Opportunities Fund Seeks capital appreciation
by investing at least 65% of
its total assets, under
normal circumstances, in
publicly-traded equity
securities issued by small
and medium companies with
market capitalization at the
time of purchase between
$500 million and $5 billion.
U.S. Fixed Income
TCW Galileo Fund Investment Objective
---------------- ----------------------------
Diversified Money Market Fund
TCW Galileo Money Market Fund Seeks current income,
preservation of capital and
liquidity by investing in
short-term money market
securities.
Diversified Fixed Income Funds
TCW Galileo Core Fixed Income Fund Seeks capital appreciation
and income by investment
principally in core fixed
income securities
emphasizing high quality and
liquid investments.
TCW Galileo High Yield Bond Fund Seeks high current income by
investment principally in
high yield fixed income
securities.
TCW Galileo Mortgage-Backed Securities Fund Seeks income by investing
primarily in short-term
mortgage-backed securities.
TCW Galileo Total Return Mortgage-Backed Seeks income by investing
Securities Fund primarily in long-term
mortgage-backed securities.
International
TCW Galileo Fund Investment Objective
---------------- ----------------------------
Non-diversified International Equity Funds
TCW Galileo Asia Pacific Equities Fund Seeks long-term capital
appreciation by investing
primarily in equity
securities of companies in
the Asia Pacific region.
TCW Galileo Emerging Markets Equities Fund Seeks long-term capital
appreciation by investing in
equity securities of
companies in emerging
market countries around the
world.
TCW Galileo European Equities Fund Seeks long-term capital
appreciation by investing
primarily in the securities
of issuers located in
Europe.
TCW Galileo International Equities Fund Seeks long-term capital
appreciation by investing
in a mix of underlying TCW
Galileo Funds.
31
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TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued)
Note 1 -- Organization (Continued)
International (Continued)
TCW Galileo Fund Investment Objective
---------------- ----------------------------
Non-Diversified International Equity Funds
TCW Galileo Japanese Equities Fund Seeks long-term capital
appreciation by investing
primarily in Japanese equity
securities.
TCW Galileo Latin America Equities Fund Seeks long-term capital
appreciation by investing
primarily in Latin American
equity securities.
Non-Diversified Fixed Income Fund
TCW Galileo Emerging Markets Income Fund Seeks high total return from
capital appreciation and
current income by investing
at least 65% of its total
assets in debt securities
issued or guaranteed by
companies, financial
institutions, and government
entities in emerging market
countries.
Nine funds (TCW Galileo Aggressive Growth Equities Fund, TCW Galileo Large Cap
Growth Fund, TCW Galileo Large Cap Value Fund, TCW Galileo Select Equities Fund,
TCW Galileo Small Cap Growth Fund, TCW Galileo Core Fixed Income Fund, TCW
Galileo High Yield Bond Fund, TCW Galileo Total Return Mortgage-Backed
Securities Fund and TCW Galileo European Equities Fund) offer two classes of
shares, Institutional Class shares and Advisory Class shares. Shares of each
class of the Funds represent an equal pro rata interest in the Funds and
generally give the shareholder the same voting, dividend, liquidation, and other
rights. The Institutional Class shares are offered at the current net asset
value. The Advisory Class shares are also offered at the current net asset
value, but are subject to fees imposed under a distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act.
Note 2 -- Significant Accounting Policies
The following is a summary of significant accounting policies which are in
conformity with generally accepted accounting principles and which are
consistently followed by the Funds in the preparation of their financial
statements. The preparation of the financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements.
Principles of Accounting: The Funds use the accrual method of accounting for
financial reporting purposes.
Security Valuations: The value of securities held in the TCW Galileo Money
Market Fund is determined by using the amortized cost method applied to each
individual security unless, due to special circumstances, the use of such a
method would result in a valuation that does not approximate fair market value.
All other securities, including the bond fund securities, for which
over-the-counter market quotations are readily available, are valued at the
latest bid price prior to the time of valuation.
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April 30, 2000
Securities for which market quotations are not readily available, including
circumstances under which it is determined by the Advisor that sale or bid
prices are not reflective of a security's market value, are valued at their fair
value as determined in good faith under procedures established by and under the
general supervision of the Company's Board of Directors.
For Funds other than the TCW Galileo Money Market Fund, short-term debt
securities with remaining maturities of 60 days or less at the time of purchase
are valued at amortized cost. Other short-term debt securities are valued on a
marked-to-market basis until such time as they reach a remaining maturity of 60
days, whereupon they will be valued at amortized value using their value on the
61st day prior to maturity.
Security Transactions and Related Investment Income: Security transactions are
recorded as of the trade date. Interest income is recorded on the accrual basis.
The TCW Galileo Core Fixed Income Fund and the TCW Galileo High Yield Bond Fund
recognize as interest income discounts on securities purchased using a constant
yield to maturity accretion method. Original issue discount is accreted as
interest income using a constant yield to maturity method. Premiums on
securities purchased are not amortized, except for mortgage backed obligations
for which amortization has been elected as allowed by federal income tax
regulations and securities held by the TCW Galileo Core Fixed Income Fund.
Realized gains and losses on investments are recorded on the basis of specific
identification.
Foreign Currency Translation: The books and records of each Fund are maintained
in U.S. dollars as follows: (1) the foreign currency market value of investment
securities, and other assets and liabilities stated in foreign currencies, are
translated using the daily spot rate; and (2) purchases, sales, income and
expenses are translated at the rate of exchange prevailing on the respective
dates of such transactions. The resultant exchange gains and losses are included
in the Statements of Operations with the related net realized gain (loss).
Pursuant to U.S. federal income tax regulations, certain foreign exchange gains
and losses included in realized and unrealized gains and losses are included in,
or are a reduction of, ordinary income for federal income tax purposes. It is
not practicable to separately identify that portion of gains and losses of the
Funds that arise as a result of changes in the exchange rates from the
fluctuations that arise from changes in market prices of investments during the
year.
Dollar Roll Transactions: The Funds may enter into dollar roll transactions
with financial institutions to take advantage of opportunities in the mortgage
backed securities market. A dollar roll transaction involves a simultaneous sale
by the Fund of securities that it holds with an agreement to repurchase
substantially similar securities at an agreed upon price and date, but generally
will be collateralized at time of delivery by different pools of mortgages with
different prepayment histories than those securities sold. These transactions
are accounted for as financing transactions as opposed to sales and purchases.
The differential between the sale price and the repurchase price is recorded as
deferred income and recognized between the settlement dates of the sale and
repurchase. During the period between the sale and repurchase, the Fund will not
be entitled to receive interest and principal payments on the securities sold.
Dollar roll transactions involve risk that the market value of the security sold
by the Fund may decline below the repurchase price of the security. There were
no such transactions outstanding as of April 30, 2000.
Repurchase Agreements: The Funds may invest in repurchase agreements secured by
U.S. Government obligations and by other securities. Securities pledged as
collateral for repurchase agreements are held by the Funds' custodian bank until
maturity of the repurchase agreements.
33
<PAGE>
TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued)
Note 2 -- Significant Accounting Policies (Continued)
Provisions of the agreements ensure that the market value of the collateral
is sufficient in the event of default; however, in the event of default or
bankruptcy by the other party to the agreements, realization and/or
retention of the collateral may be subject to legal proceedings.
Security Lending: The Funds may lend their securities to qualified brokers.
The loans are collateralized at all times with cash or securities with a
market value at least equal to the market value of the securities on loan.
As with any extensions of credit, the Funds may bear the risk of delay in
recovery or even loss of rights in the collateral if the borrowers of the
securities fail financially. The Funds receive compensation for lending
their securities (see Note 3).
Options: Premiums received from call options written are recorded as a
liability. The amount of the liability is subsequently adjusted to reflect
the current market value of the option written. If the option expires
unexercised, premiums received are realized as a gain at expiration date.
If the position is closed prior to expiration, a gain or loss is realized
based on premiums received, less the cost to close the option. When an
option is exercised, premiums received are added to the proceeds from the
sale of the underlying securities and a gain or loss is realized. Call
options purchased are accounted for in the same manner as portfolio
securities. The cost of securities acquired through the exercise of call
options is increased by premiums paid. There were no option contracts
entered into during the six months ended April 30, 2000.
Allocation of Operating Activity: Investment income, common expenses and
realized and unrealized gains and losses are allocated among the classes of
shares of the Funds based on the relative net assets of each class.
Distribution fees, which are directly attributable to a class of shares,
are charged to that class' operations. All other expenses are charged to
each Fund as incurred on a specific identification basis.
Net Asset Value: The Net Asset Value of each Fund's shares is determined by
dividing the net assets of the Fund by the number of issued and outstanding
shares on each business day as of 9:00 A.M. Pacific Standard Time for the
TCW Galileo Money Market Fund and as of 1:00 P.M. Pacific Standard Time for
the other Funds.
Dividends and Distributions: Dividends from net investment income of the
TCW Galileo Money Market Fund are declared each business day. The other
fixed income funds declare and pay, or reinvest, dividends from net
investment income monthly. Distribution of any net long-term and net short-
term capital gains earned by a Fund will be distributed at least annually.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, market discount, losses deferred to wash
sales and excise tax regulations. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to
paid in capital and may affect net investment income per share.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
Use of Estimates: The preparation of the accompanying financial statements
requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from these estimates.
34
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April 30, 2000
Note 3 -- Security Lending
The Funds listed below loaned securities that were collateralized in cash which
was invested in short-term investments as of April 30, 2000:
<TABLE>
<CAPTION>
Market Value of Securities
Loaned Securities Collateral Value Lending Fees*
------------------ ---------------- ---------------
<S> <C> <C> <C>
TCW Galileo Core Fixed Income Fund $ 3,827,494 $ 3,917,150 $ 1,752
TCW Galileo High Yield Bond Fund 5,759,935 5,922,250 4,062
</TABLE>
* Net of broker fees
Securities lending fees are included in interest income in the Statements of
Operations.
Note 4 -- Federal Income Taxes
It is the policy of each Fund to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its net taxable income, including any net realized gains on investments, to
its shareholders. Therefore, no federal income tax provision is required. At
April 30, 2000, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows (amounts in thousands):
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo Total Return
TCW Galileo TCW Galileo Mortgage- Mortgage-
Core Fixed High Yield Backed Backed
Income Fund Bond Fund Securities Fund Securities Fund
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 71 $ 661 $ 153 $ 1,273
Unrealized (Depreciation) (2,373) (17,371) (1,299) (4,727)
-------------- --------------- -------------- --------------
Net Unrealized (Depreciation) $ (2,302) $ (16,710) $ (1,146) $ (3,454)
============== =============== ============== ==============
Cost of Investments for
Federal Income Tax Purposes $ 59,347 $ 208,736 $ 61,022 $ 90,098
============== =============== ============== ==============
</TABLE>
At April 30, 2000, the following Funds had net realized loss carryforwards for
federal income tax purposes (amounts in thousands):
Expiring In
-------------------------------------------
2002 2003 2004 2005 2006 2007
----- ------ ---- ------ ------ ------
TCW Galileo Core Fixed
Income Fund $ 641 $ 644 $ -- $ -- $ -- $1,259
TCW Galileo High Yield
Bond Fund -- -- -- -- 2,560 5,718
TCW Galileo
Mortgage-Backed
Securities Fund 446 4,068 861 73 406 --
Note 5 -- Fund Expenses
The Funds pay to the Advisor, as compensation for services rendered, facilities
furnished and expenses borne by it, the following annual management fees as a
percentage of daily net asset value:
TCW Galileo Money Market Fund 0.25%
TCW Galileo Core Fixed Income Fund 0.40%
TCW Galileo High Yield Bond Fund 0.75%
TCW Galileo Mortgage-Backed Securities Fund 0.35%
TCW Galileo Total Return Mortgage-Backed Securities Fund 0.50%
35
<PAGE>
TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued)
Notes 5-- Fund Expenses (Continued)
Prior to January 15, 2000, the TCW Galileo Mortgage-Backed Securities Fund
paid to the Advisor an annual management fee of 0.50% of the daily net
assets.
The ordinary operating expenses of the TCW Galileo Money Market Fund are
limited to 0.40% of the Fund's daily net assets. The ordinary operating
expenses (each share class) of the other funds are limited to the average
of the total expense ratios as reported by Lipper Analytical Services, Inc.
for each Fund's respective investment objective, which is subject to change
on a monthly basis. At April 30, 2000, the average expense ratios reported
by Lipper Analytical Services, Inc. as they relate to each fund were:
TCW Galileo Core Fixed Income Fund 1.00%
TCW Galileo High Yield Bond Fund 1.30%
TCW Galileo Mortgage-Backed Securities Fund 1.00%
TCW Galileo Total Return Mortgage-Backed Securities Fund 1.00%
Prior to January 15, 2000, the ordinary operating expenses of the TCW
Galileo Mortgage-Backed Securities Fund were limited to 0.53% of daily net
assets.
Certain officers and/or directors of the Company are officers and/or
directors of the Advisor.
Note 6 -- Distribution Plan
The Company has a distribution plan pursuant to Rule 12b-1 under the 1940
Act with respect to the Advisory Class shares of each Fund. Under the terms
of the Distribution Plan, each Fund compensates the distributor at a rate
equal to 0.25% of the average daily net assets of the Fund attributable to
its Advisory Class shares for distribution and related services.
Distribution fees for the six months ended April 30, 2000 were less than
$1,000 for the TCW Galileo Core Fixed Income Fund and TCW Galileo Total
Return Mortgage-Backed Securities Fund and as a result, are not disclosed
in the Statement of Operations.
Note 7 -- Purchases and Sales of Securities
Investment transactions (excluding short-term investments) for the six
months ended April 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo Total Return
TCW Galileo TCW Galileo Mortgage- Mortgage-
Core Fixed High Yield Backed Backed
Income Fund Bond Fund Securities Fund Securities Fund
----------- ----------- --------------- ---------------
<S> <C> <C> <C> <C>
Purchases at Cost $ 6,007 $79,881 $ 25 $ --
======= ======= ======= ======
Sales Proceeds $16,212 $69,575 $ 852 $ 891
======= ======= ======= ======
U.S. Government Purchases at
Cost $16,806 $ -- $18,894 $ --
======= ======= ======= ======
U.S. Government Sales Proceeds $22,890 $ -- $ 8,867 $2,216
======= ======= ======= ======
</TABLE>
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April 30, 2000
Note 8 -- Capital Share Transactions
The Declaration of Trust permits the Trustees to issue an unlimited number of
shares of beneficial interest (without par value). Transactions in each Fund's
shares were as follows:
<TABLE>
<CAPTION>
TCW Galileo Money Market
Fund Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Sold 1,353,421,102 $ 1,353,421 2,699,538,689 $ 2,699,539
Shares Issued upon
Reinvestment of Dividends 3,832,713 3,833 7,371,745 7,372
Shares Redeemed (1,391,894,778) (1,391,895) (2,688,061,688) (2,688,062)
-------------- ----------- -------------- -----------
Net Increase (Decrease) (34,640,963) $ (34,641) 18,848,746 $ 18,849
============== =========== ============== ===========
TCW Galileo Core Fixed Income
Fund Six Months Ended
Institutional Class April 30, 2000 Year Ended
(Unaudited) October 31, 1999
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
Shares Sold 930,731 $ 8,728 3,702,145 $ 35,593
Shares Issued upon
Reinvestment of Dividends 134,746 1,253 326,089 3,172
Shares Redeemed (2,732,856) (25,676) (13,006,199) (127,173)
-------------- ----------- -------------- -----------
Net (Decrease) (1,667,379) $ (15,695) (8,977,965) $ (88,408)
============== =========== ============== ===========
TCW Galileo Core Fixed Income
Fund Six Months Ended
Advisory Class April 30, 2000 Period Ended
(Unaudited) October 31, 1999/(1)/
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
Shares Sold 346 $ 4 8,529 $ 83
Shares Issued upon
Reinvestment of Dividends 296 2 -- --
Shares Redeemed (1,004) (9) 172 1
-------------- ----------- -------------- -----------
Net Increase (Decrease) (362) $ (3) 8,701 $ 84
============== =========== ============== ===========
</TABLE>
(1) For the period March 1, 1999 (commencement of offering of Advisory Class
shares) through October 31, 1999.
37
<PAGE>
TCW Galileo Funds, Inc.
--------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued)
Note 8 -- Capital Share Transactions (Continued)
<TABLE>
<CAPTION>
TCW Galileo High Yield Bond
Fund Six Months Ended
Institutional Class April 30, 2000 Year Ended
(Unaudited) October 31, 1999
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Sold 7,065,467 $ 62,406 15,528,524 $ 144,250
Shares Issued upon
Reinvestment of Dividends 1,129,407 9,884 1,547,242 14,195
Shares Redeemed (6,864,735) (60,281) (13,828,336) (128,878)
-------------- ----------- -------------- -----------
Net Increase 1,330,139 $ 12,009 3,247,430 $ 29,567
============== =========== ============== ===========
TCW Galileo High Yield Bond
Fund Six Months Ended
Advisory Class April 30, 2000 Period Ended
(Unaudited) October 31, 1999/(1)/
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
Shares Sold 1,463,407 $ 13,157 36,157 $ 345
Shares Issued upon
Reinvestment of Dividends 17,355 154 790 7
Shares Redeemed (1,463,336) (13,101) (15,678) (150)
-------------- ----------- -------------- -----------
Net Increase 17,426 $ 210 21,269 $ 202
============== =========== ============== ===========
</TABLE>
(1) For the period March 1, 1999 (commencement of offering of advisory
Class shares) through October 31, 1999.
<TABLE>
<CAPTION>
TCW Galileo Mortgage-
Backed Securities Fund Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Sold 4,434,108 $ 42,491 1,189,983 $ 11,464
Shares Issued upon
Reinvestment of Dividends 178,923 1,710 147,725 1,418
Shares Redeemed (3,914,648) (37,331) (306,134) (2,941)
-------------- ----------- -------------- -----------
Net Increase 698,383 $ 6,870 1,031,574 $ 9,941
============== =========== ============== ===========
</TABLE>
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April 30, 2000
<TABLE>
<CAPTION>
TCW Galileo Total Return Six Months Ended
Mortgage-Backed April 30, 2000 Year Ended
Securities Fund (Unaudited) October 31, 1999
Institutional Class ------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Sold 63,725 $ 570 1,086,156 $ 10,319
Shares Issued upon
Reinvestment of Dividends 376,775 3,330 809,473 7,598
Shares Redeemed (583,325) (5,130) (2,226,690) (23,824)
-------------- ----------- -------------- -----------
Net (Decrease) (142,825) $ (1,230) (331,061) $ (5,907)
============== =========== ============== ===========
</TABLE>
<TABLE>
TCW Galileo Total Return Six Months Ended
Mortgage-Backed April 30, 2000 Period Ended
Securities Fund (Unaudited) October 31, 1999 (1)
Advisory Class ------------------------------ ------------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Sold 1,102 $ 10 4,015 $ 37
Shares Issued upon
Reinvestment of Dividends 123 1 16 --
Shares Redeemed (1,335) (12) -- --
-------------- ----------- -------------- -----------
Net Increase (Decrease) (110) $ (1) 4,031 $ 37
============== =========== ============== ===========
</TABLE>
(1) For the period March 1, 1999 (commencement of offering of Advisory Class
shares) through October 31, 1999.
Note 9 -- Restricted Securities
The following restricted securities held by the Funds as of April 30, 2000, were
valued both at the date of acquisition and April 30, 2000, in accordance with
the security valuation policy of the Funds described in Note 2. The restricted
securities include securities purchased in private placement transactions
without registration under the Securities Act of 1933, as well as Rule 144A
securities. Such securities generally may be sold only in a privately negotiated
transaction with a limited number of purchasers or in a public offering
registered under the Securities Act of 1933. Each Fund will bear any costs
incurred in connection with the disposition of such securities.
TCW Galileo Core Fixed Income Fund:
Principal Date of
Amount Investment Acquisition Cost
--------- ----------------------------------- ----------- -------
$75,000 360networks, Inc., (144A), 13%, 04/20/00 $73,194
due 05/01/08
75,000 Bio-Rad Laboratories, Inc., (144A), 02/14/00 74,124
11.625%, due 02/15/07
75,000 Concentra Operating Corp., (144A), 08/05/99 75,000
13%, due 08/15/09
50,000 Consolidated Container Companies, 06/24/99 50,270
LLC, (144A), 10.125%, due 07/15/09
75,000 TNP Enterprises, Inc., (144A), 03/31/00 75,000
10.25%, due 04/01/10
The total value of restricted securities is $330,125, which represents 0.6% of
net assets of the Fund at April 30, 2000.
39
<PAGE>
TCW Galileo Funds, Inc.
-------------------------------------------------------------------------------
U.S. Fixed Income
Notes to Financial Statements (Unaudited) (Continued)
Note 9 -- Restricted Securities
TCW Galileo High Yield Bond Fund:
Principal
Amount or
Number of Date of
Shares Investment Acquisition Cost
---------- ----------------------------------- ----------- ----------
$1,650,000 360networks, Inc., (144A), 13%, 04/20/00 $1,610,259
due 05/01/08
$1,200,000 Bio-Rad Laboratories, Inc., (144A), 02/14/00 1,185,984
11.625%, due 02/15/07
$1,000,000 Charter Communications Holdings, 02/08/00 1,002,500
LLC, (144A), 10%, due 04/01/09
$2,000,000 Classic Cable, Inc., (144A), 10.5%, 11/09/99 2,000,000
due 03/01/10
3,300 Classic Communications, Inc., 05/03/99 0
(144A), Common Stock
$1,850,000 Concentra Operating Corp., (144A), 08/05/99 1,753,421
13%, due 08/15/09
$ 500,000 Consolidated Container Companies, 06/24/99 501,125
LLC, (144A), 10.125%, due 07/15/09
$ 915,000 Huntsman Industries/Specialty 11/03/98 898,153
Chemical Corp., (144A), 9.5%,
due 07/01/07
$2,600,000 Level 3 Communications, Inc., 02/24/00 2,600,000
(144A), 11%, due 03/15/08
$2,600,000 Nextlink Communications, Inc., 11/12/99 1,505,287
(144A), 0%, due 12/01/09
$1,000,000 Rhythms NetConnections, Inc., 02/16/00 1,000,000
(144A), 14%, due 02/15/10
$ 600,000 Spectrasite Holdings, Inc., (144A), 03/10/00 600,000
10.75%, due 03/15/10
$ 425,000 TNP Enterprises, Inc., (144A), 03/31/00 425,000
10.25%, due 04/01/10
$ 905,000 Von Hoffmann Press, Inc., (144A), 03/09/00 960,579
10.875%, due 05/15/07
The total value of restricted securities is $15,140,549, which represents 7.9%
of net assets of the Fund at April 30, 2000.
40
<PAGE>
TCW Galileo Money Market Fund
[LOGO]
--------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
April 30, 2000 ---------------------------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
-------------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- --------- -------- -------- -------
Income from Investment
Operations:
Net Investment Income 0.0266 0.0434 0.0519 0.0516 0.0509 0.0549
-------- -------- -------- -------- -------- -------
Less Distributions:
Distributions from Net
Investment Income (0.0266) (0.0434) (0.0519) (0.0516) (0.0509) (0.0549)
-------- -------- -------- -------- -------- -------
Net Asset Value per
Share, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== =======
Total Return 3.14%/(1)/ 4.85% 5.31% 5.29% 5.21% 5.67%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $226,659 $261,300 $242,451 $222,771 $233,671 $86,302
Ratio of Expenses to
Average Net Assets 0.38%/(2)/(3)/ 0.38% 0.40%/(3)/ 0.40%/(3)/ 0.40%/(3)/ 0.40%/(3)/
Ratio of Net Investment
Income to Average Net
Assets 5.37%/(2)/ 4.76% 5.19% 5.17% 5.04% 5.49%
</TABLE>
(1) For the six months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 0.40% of net assets as
disclosed in Note 5 of the Notes to financial statements. Had such action
not been taken, total annualized operating expenses as a percentage of
average net assets would have been 0.41%, 0.40%, 0.44%, and 0.46% for the
fiscal years ended October 31, 1998, 1997, 1996 and 1995, respectively.
See accompanying notes to financial statements.
41
<PAGE>
TCW Galileo Core Fixed Income Fund
--------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
April 30, 2000 ---------------------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
-------------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 9.42 $ 9.89 $ 9.62 $ 9.45 $ 9.61 $ 8.94
------- ------- -------- ------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.28 0.57 0.55 0.58 0.55 0.58
Net Realized and
Unrealized Gain (Loss)
on Investments (0.27) (0.50) 0.29 0.19 (0.16) 0.62
------- ------- -------- ------- ------- -------
Total from Investment
Operations 0.01 0.07 0.84 0.77 0.39 1.20
------- ------- -------- ------- ------- -------
Less Distributions:
Distributions from Net
Investment Income (0.28) (0.54) (0.57) (0.60) (0.55) (0.53)
------- ------- -------- ------- ------- -------
Net Asset Value per
Share, End of Period $ 9.15 $ 9.42 $ 9.89 $ 9.62 $ 9.45 $ 9.61
======= ======= ======== ======= ======= =======
Total Return 0.10%/(1)/ 0.69% 9.02% 8.45% 4.26% 13.92%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $53,354 $70,666 $162,996 $19,368 $25,006 $36,236
Ratio of Expenses to
Average Net Assets 0.76%/(2)/ 0.58%/(3)/ 0.62% 0.93% 0.76% 0.68%/(3)/
Ratio of Net Investment
Income to Average Net
Assets 6.09%/(2)/ 5.83% 5.60% 6.13% 5.85% 6.38%
Portfolio Turnover Rate 43.37%/(1)/ 136.63% 272.77% 142.96% 238.73% 223.78%
</TABLE>
(1) For the six months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extend necessary to limit the
annual ordinary operating expenses of the Fund as disclosed in Note 5 in
the Notes to Financial Statements. Had such action not been taken, total
annualized operating expenses as a percentage of average net assets would
have been 0.59% and 0.72% for the years ended October 31, 1999 and 1995,
respectively.
See accompanying notes to financial statements.
42
<PAGE>
TCW Galileo Core Fixed Income Fund
[LOGO]
--------------------------------------------------------------------------------
Advisory Class
Financial Highlights
March 1, 1999
Six Months (Commencement of
Ended offering of Advisory
April 30, 2000 Class shares) through
(Unaudited) October 31, 1999
-------------- ---------------------
Net Asset Value per Share, Beginning of
Period $ 9.51 $ 9.74
------ ------
Income (Loss) from Investment
Operations:
Net Investment Income 0.27 0.37
Net Realized and Unrealized (Loss) on
Investments (0.28) (0.35)
------ ------
Total from Investment Operations (0.01) 0.02
------ ------
Less Distributions:
Distributions from Net Investment Income (0.26) (0.25)
------ ------
Net Asset Value per Share, End of Period $ 9.24 $ 9.51
====== ======
Total Return (0.11)%/(1)/ 0.17%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 77 $ 83
Ratio of Expenses to Average Net Assets 1.00%/(3)/(4)/ 1.00%/(3)/(4)/
Ratio of Net Investment Income to
Average Net Assets 5.72% /(3)/ 5.68%/(3)/
Portfolio Turnover Rate 43.37% /(1)/ 136.63%
(1) For the six months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund as disclosed in Note 5 in
the Notes to the Financial Statements. Had such action not been taken,
total annualized operating expenses, as a percentage of average net assets,
would have been 31.45% for the six months ended April 30, 2000 and 134.10%
for the period from March 1, 1999 (Commencement of offering of Advisory
Class shares) to October 31, 1999, respectively.
See accompanying notes to financial statements.
43
<PAGE>
TCW Galileo High Yield Bond Fund
--------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
April 30, 2000 ---------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
-------------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 8.85 $ 9.20 $ 10.11 $ 9.77 $ 9.74 $ 9.43
-------- -------- -------- -------- -------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.42 0.80 0.88 0.91 0.89 0.92
Net Realized and
Unrealized Gain (Loss)
on Investments (0.35) (0.37) (0.74) 0.34 0.03 0.39
-------- -------- -------- -------- -------- -------
Total from Investment
Operations 0.07 0.43 0.14 1.25 0.92 1.31
-------- -------- -------- -------- -------- -------
Less Distributions:
Distributions from Net
Investment Income (0.44) (0.78) (0.89) (0.91) (0.89) (1.00)
Distributions in Excess
of Net Investment
Income (0.01) -- (0.01) -- -- --
Distributions from Net
Realized Gain -- -- (0.15) -- -- --
-------- -------- -------- -------- -------- -------
Total Distributions (0.45) (0.78) (1.05) (0.91) (0.89) (1.00)
-------- -------- -------- -------- -------- -------
Net Asset Value per
Share, End of Period $ 8.47 $ 8.85 $ 9.20 $ 10.11 $ 9.77 $ 9.74
======== ======== ======== ======== ======== =======
Total Return 0.75%/(1)/ 4.60% 1.18% 13.26% 9.92% 14.65%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $191,268 $188,098 $165,702 $208,761 $183,815 $92,652
Ratio of Expenses to
Average Net Assets 0.88%/(2)/ 0.90% 0.85% 0.83% 0.90% 0.87%/(3)/
Ratio of Net Investment
Income to Average Net
Assets 9.66%/(2)/ 8.60% 8.89% 9.10% 9.21% 9.60%
Portfolio Turnover Rate 35.88%/(1)/ 128.15% 92.24% 109.45% 82.56% 36.32%
</TABLE>
(1) For the six-months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund. Had such action not been
taken, total annualized operating expenses as a percentage of average net
assets would have been 0.88% for the year ended October 31, 1995.
See accompanying notes to financial statements.
44
<PAGE>
TCW Galileo High Yield Bond Fund
[LOGO]
--------------------------------------------------------------------------------
Advisory Class
Financial Highlights
March 1, 1999
Six Months (Commencement of
Ended offering of Advisory
April 30, 2000 Class shares) through
(Unaudited) October 31, 1999
-------------- ---------------------
Net Asset Value per Share, Beginning of
Period $ 8.91 $ 9.39
------ ------
Income (Loss) from Investment
Operations:
Net Investment Income 0.39 0.55
Net Realized and Unrealized (Loss) on
Investments (0.32) (0.57)
------ ------
Total from Investment Operations 0.07 (0.02)
------ ------
Less Distributions:
Distributions from Net Investment Income (0.41) (0.46)
------ ------
Net Asset Value per Share, End of Period $ 8.57 $ 8.91
====== ======
Total Return 0.87%/(1)/ (0.24)%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 332 $ 189
Ratio of Expenses to Average Net Assets 1.26%/(3)/(4)/ 1.30%/(3)/(4)/
Ratio of Net Investment Income to
Average Net Assets 8.67%/(3)/ 8.78%/(3)/(4)/
Portfolio Turnover Rate 35.88%/(1)/ 128.15%
(1) For the six-months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund as disclosed in Note 5 in
the Notes to the Financial Statements. Had such action not been taken,
total annualized operating expenses, as a percentage of average net assets,
would have been 1.75% for the six months ended April 30, 2000 and 47.83%
for the period from March 1, 1999 (Commencement of offering of Advisory
Class shares) to October 31, 1999, respectively.
See accompanying notes to financial statements.
45
<PAGE>
TCW Galileo Mortgage-Backed Securities Fund
--------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
April 30, 2000 --------------------------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
-------------- -------------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 9.59 $ 9.60 $ 9.70 $ 9.67 $ 9.58 $ 9.41
------- ------- ------- ------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.29 0.59 0.35 0.58 0.51 0.67
Net Realized and
Unrealized Gain (Loss)
on Investments (0.04) (0.09) 0.10 0.05 0.22 0.25
------- ------- ------- ------- ------- -------
Total from Investment
Operations 0.25 0.50 0.45 0.63 0.73 0.92
------- ------- ------- ------- ------- -------
Less Distributions:
Distributions from Net
Investment Income (0.28) (0.51) (0.11) (0.38) (0.46) (0.71)
Distributions in Excess
of Net Investment
Income -- -- -- (0.22) (0.18) (0.04)
Distributions from
Paid-in-Capital -- -- (0.44) -- -- --
------- ------- ------- ------- ------- -------
Total Distributions (0.28) (0.51) (0.55) (0.60) (0.64) (0.75)
------- ------- ------- ------- ------- -------
Net Asset Value per
Share, End of Period $ 9.56 $ 9.59 $ 9.60 $ 9.70 $ 9.67 $ 9.58
======= ======= ======= ======= ======= =======
Total Return 2.67%/(1)/ 5.36% 4.73% 6.71% 7.86% 10.16%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $59,992 $53,496 $43,639 $53,307 $61,835 $81,366
Ratio of Expenses to
Average Net Assets 0.57%/(2)(3)/ 0.75%/(3)/ 0.83% 0.77% 0.69% 0.61%/(3)/
Ratio of Net Investment
Income to Average Net
Assets 6.19%/(2)/ 6.10% 3.61% 6.00% 5.34% 7.13%
Portfolio Turnover Rate 17.16%/(1)/ 53.48% 68.40% 109.91% 54.10% 37.83%
</TABLE>
(1) For the six-months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund. Had such action not been
taken, total annualized operating expenses as a percentage of average net
assets would have been 0.65%, 0.80% and 0.63% for the six months ended
April 30, 2000, and the years ended October 31, 1999 and 1995,
respectively.
See accompanying notes to financial statements.
46
<PAGE>
TCW Galileo Total Return Mortgage-backed Securities Fund
[ICON]
--------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
April 30, 2000 ------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
-------------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Period $ 8.96 $ 9.76 $ 9.91 $ 9.56 $ 9.56 $ 8.95
------- ------- -------- ------- -------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.24 0.62 0.84 0.75 0.68 0.72
Net Realized and
Unrealized Gain (Loss)
on Investments (0.13) (0.60) (0.07) 0.32 0.02 0.71
------- ------- -------- ------- -------- -------
Total from Investment
Operations 0.11 0.02 0.77 1.07 0.70 1.43
------- ------- -------- ------- -------- -------
Less Distributions:
Distributions from Net
Investment Income (0.23) (0.62) (0.86) (0.72) (0.68) (0.82)
Distributions in Excess
of Net Investment
Income (0.07) (0.20) (0.01) -- (0.02) --
Distributions from Net
Realized Gain -- -- (0.05) -- -- --
------- ------- -------- ------- -------- -------
Total Distributions (0.30) (0.82) (0.92) (0.72) (0.70) (0.82)
------- ------- -------- ------- -------- -------
Net Asset Value per
Share, End of Period $ 8.77 $ 8.96 $ 9.76 $ 9.91 $ 9.56 $ 9.56
======= ======= ======== ======= ======== =======
Total Return 1.29%(1) 0.20% 8.20% 11.66% 7.69% 16.84%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $87,083 $90,275 $101,501 $81,442 $112,260 $80,159
Ratio of Expenses to
Average Net Assets 0.71%/(2)/ 0.69% 0.70% 0.67% 0.68% 0.68%/(3)/
Ratio of Net Investment
Income to Average Net
Assets 5.38% /(2)/ 6.62% 8.52% 7.77% 7.15% 7.88%
Portfolio Turnover Rate 0.00% /(1)/ 28.07% 27.95% 16.01% 39.28% 23.76%
</TABLE>
(1) For the six-months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) Annualized
(3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund. Had such action not been
taken, total annualized operating expenses, as a percentage of average net
assets would have been 0.69% for the year ended October 31, 1995.
See accompanying notes to financial statements.
47
<PAGE>
TCW Galileo Total Return Mortgage-Backed Securities Fund
--------------------------------------------------------------------------------
Advisory class
Financial Highlights
March 1, 1999
Six Months (Commencement of
Ended offering of Advisory
April 30, 2000 Class shares) through
(Unaudited) October 31, 1999
--------- ----------------
Net Asset Value per Share, Beginning of
Period $ 9.23 $ 9.40
------ ------
Income (Loss) from Investment
Operations:
Net Investment Income 0.23 0.43
Net Realized and Unrealized (Loss) on
Investments (0.14) (0.49)
------ ------
Total from Investment Operations 0.09 (0.06)
------ ------
Less Distributions:
Distributions from Net Investment Income (0.30) (0.11)
------ ------
Net Asset Value per Share, End of Period $ 9.02 $ 9.23
====== ======
Total Return 1.14%/(1)/ (0.69)%/(2)/
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $ 35 $ 37
Ratio of Expenses to Average Net Assets 1.00%/(3)(4)/ 1.02%/(3)(4)/
Ratio of Net Investment Income to
Average Net Assets 5.12%/(3)/ 7.00%/(3)/
Portfolio Turnover Rate 0.00%/(1)/ 28.07%
(1) For the six-months ended April 30, 2000 and not indicative of a full year's
operating results.
(2) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(3) Annualized.
(4) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund as disclosed in Note 5 in
the Notes to the Financial Statements. Had such action not been taken,
total annualized operating expenses, as a percentage of average net assets,
would have been 69.46% for the six months ended april 30, 2000 and 722.10%
for the period from March 1, 1999 (Commencement of offering of Advisory
Class shares) to October 31, 1999, respectively.
See accompanying notes to financial statements.
48
<PAGE>
TCW GALILEO FUNDS
April 30, 2000
SHAREHOLDER INFORMATION
DIRECTORS AND OFFICERS INVESTMENT ADVISOR
Marc I. Stern TCW Investment Management Company
Director and Chairman of the Board 865 South Figueroa Street
Los Angeles, California 90017
Alvin R. Albe, Jr. (213) 244-0000
Director and President
CUSTODIAN & ADMINISTRATOR
John C. Argue
Director Investors Bank & Trust Company
200 Clarendon Street
Norman Barker, Jr. Boston, Massachusetts 02116
Director
TRANSFER AGENT
Richard W. Call
Director DST Systems, Inc.
210 West 10th Street
Matthew K. Fong Kansas City, Missouri 64105
Director
DISTRIBUTOR
Thomas E. Larkin, Jr.
Director TCW Brokerage Services
865 South Figueroa Street
Charles W. Baldiswieler Los Angeles, California 90017
Senior Vice President
INDEPENDENT AUDITORS
Michael E. Cahill
Senior Vice President, Deloitte & Touche, LLP
General Counsel and Assistant Secretary 350 South Grand Avenue
Los Angeles, California 90017
Jeffery V. Peterson
Senior Vice President
Robert S. Sant
Senior Vice President
Philip K. Holl
Secretary
Hilary G.D. Lord
Assistant Secretary
Peter C. DiBona
Treasurer
