TCW DW BALANCED FUND, N-30D, 1995-12-05

TCW DW BALANCED FUND
N-30D, 1995-12-05

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<PAGE>
TCW/DW BALANCED FUND
Two World Trade Center
New York, New York 10048

DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------

For the fiscal year ended September 30, 1995, TCW/DW Balanced Fund posted a
total return of 11.97 percent, versus 29.76 percent for the Standard & Poor's
500 Composite Stock Price Index (S&P 500), 11.49 percent
for the Lehman Brothers Government/Corporate
Bond Index and 14.06 percent for the Lehman
Brothers Aggregate Bond Index. The
accompanying chart illustrates the growth of
a $10,000 investment in the Fund at
inception (October 29, 1993) through the
fiscal year ended September 30, 1995,
compared to similar hypothetical investments
in the issues that comprise the S&P 500 and
the Lehman Brothers Government/Corporate and
Aggregate Bond Indexes.

The performance of the Fund's
fixed-income component during the fiscal
year is reflective of the bond market's
fourth quarter 1994 sell-off. In addition,
because of the portfolio's defensive posture
following last year's dramatic rise in
interest rates, the duration was shorter
than that of the market entering 1995.
(Duration is discussed in greater detail
later in this letter.) As a result, the
Fund's fixed-income holdings underperformed
during the first quarter of 1995 as the bond
market rallied. Equity performance was
affected by the Fund's holdings in Mexico.
Although the Fund held high-quality Mexican
stocks, the peso devaluation in December
1994 triggered a sharp decline in the value
of those securities. In January 1995, the
Fund's Mexican holdings were sold and the
proceeds were redeployed in U.S. technology
and brokerage stocks.

ECONOMIC OVERVIEW

According to the Fund's investment
adviser, TCW Fund Management, Inc. (TCW),
the U.S. economy appears to be losing
momentum for three primary reasons: high
real interest rates, the government's
ongoing commitment to fiscal discipline and
cautious consumers. Following four years of
economic expansion, real economic growth is
struggling to maintain the 2.5 percent pace
deemed acceptable by the Federal Reserve
Board. Similarly, TCW believes that the
central bank's hesitancy to implement
monetary stimulus at a time when inflation
is moderating, the U.S. dollar is
appreciating and productivity is improving
may impede growth in 1996. Thus, TCW is
concerned that the Federal Reserve Board has
not yet followed up its most recent
reduction in the federal-funds rate (0.25
basis points on July 6, 1995) with another
cut. Consequently, TCW's estimate for
average gross domestic product (GDP) growth
in 1996 has been lowered from 3 percent to
the 2.5 percent range.
<PAGE>
Since approximately two-thirds of economic growth comes from consumer
spending, a strong upward trend in this area is critical. TCW's forecast for
consumption is tentative, however. If it continues to be restrained, the rest of
the economy needs to perform extremely well to take up the slack. One sector
expected by many economists to provide substantial growth is exports. However,
there is a lack of strong demand within the markets of the U.S.'s traditional
trading partners. Canada, Japan, Mexico and western Europe, which together
account for approximately 70 percent of U.S. exports, are experiencing only
modest economic growth.

In earlier business cycles, government spending was utilized to offset
sluggish consumer demand. However, because of high debt levels it is now more
expensive and difficult for the U.S. government to borrow. Also, the belief that
government spending creates more problems than it solves is expanding, as
illustrated by congressional attempts to dismantle many government-funded
programs in an effort to balance the federal budget by 2002. According to TCW,
although a major reduction in federal government spending may be sugar coated
with a modest tax cut in 1996, the potential economic stimulus of such a policy
is likely to be negligible.

Against this background, inflation has remained in check. With the baby boom
generation reaching its saving years and global competition maintaining constant
downward pressure on wages, TCW believes it unlikely that inflation will
accelerate. Reflecting these conditions, TCW has lowered its Consumer Price
Index estimates for 1995 and 1996 to 2.8 percent.

THE PORTFOLIO

As of September 30, 1995, 63 percent of the Fund's assets was allocated to
stocks and 34 percent to bonds. The shares of many leading technology issues, a
sector in which the portfolio is significantly overweighted, reached a peak in
mid-July and have been in a correction phase ever since. Clearly, many of these
issues appreciated at unsustainable rates in the first half of 1995, and a pause
of the sort experienced this summer is inevitable. TCW believes that the
September-October period, which was particularly difficult for technology
stocks, may represent the low point in the correction, since investor
expectations now seem more reasonable and longer-term prospects for these issues
still appear bright. At the end of the fiscal year, the portfolio maintained
significant positions in such technology-related companies as AT&T Corp.,
Motorola, Inc. and Texas Instruments Inc.

The Fund's airline holding, AMR Corp., which was added to the portfolio in
April 1995, continues to contribute significantly to performance. In the airline
sector, managements are keeping capacity growth modest while focusing on expense
control. An extended positive business cycle should pave the way for significant
profit gains next year. In addition, aircraft manufacturers such as Boeing Co.
should benefit over the next several years from strong foreign demand and an
emerging aircraft replacement cycle in the U.S.

Given the greatly enhanced competitive position of U.S. automobile,
technology and brokerage companies, the Fund continues to have substantial
exposure to these areas. TCW believes that further cost cutting and the benefits
from demand abroad should lead to higher profits and at least modestly higher
price-to-earnings ratios in 1996.

The Fund's bond holdings consist primarily of U.S. Treasury obligations and
investment-grade corporate bonds. In response to declining economic growth, the
average maturity of the fixed-income portfolio was lengthened during the fiscal
year, thus increasing the Fund's overall sensitivity to expected further
interest rate declines. The Fund's duration, which stood at 4.3 years in
September 1994, was subsequently lengthened early in 1995 to 5.5 years.
(Duration measures a bond fund's sensitivity to interest rate movements;
basically, the effect of interest rate fluctuations on a bond fund can be
determined by multiplying its duration by the percentage rates rise or fall.)
<PAGE>
LOOKING AHEAD

According to TCW, a slowdown in total profit growth, which is to be expected
at this stage of the business cycle, is not the principal risk for equities.
Such a phenomenon will merely concentrate market leadership among those
companies that can achieve above-average increases, a development for which the
portfolio is prepared. Rather, TCW believes that the risk in the market going
forward appears to be related to overall valuation factors. For example, stocks
currently are only modestly undervalued relative to the yields on bonds. If
Congress fails to enact a real deficit-reduction program this fall, the
fixed-income markets could experience another sell-off, forcing stock prices
lower. TCW believes this would be only a temporary development, however, since
long-term demographic changes are forcing a higher savings rate and continued
government downsizing, both of which are clearly bullish for bonds and equities.

Further, equity investors must contend with earnings comparisons that are
likely to be less favorable as the expansion moderates. After advancing 40
percent in 1994, the earnings per share of the S&P 500 could rise by just 17 or
18 percent in 1995 and only 7 percent in 1996, according to TCW. Lower interest
rates will provide a helpful offset to this slowdown.

Intermediate and long-term interest rates remain 3 to 4 percent above
inflation. TCW believes this historically high risk premium will slowly be
reduced as economic growth remains moderate and inflation stays benign. Real
(minus inflation) short-term interest rates are also high. In light of this,
Federal Reserve Board chairman Alan Greenspan, who is facing the expiration of
his tenure in early 1996, has hinted that he may seek to lower the federal-funds
rate -- the interest rate banks charge each other for overnight loans --
following the passage of meaningful budget reduction legislation. Within this
context, TCW believes that the federal-funds rate is likely to decline, the
five-year U.S. Treasury note could reach a yield of 5 percent or less and
long-term U.S. Treasury bonds, now yielding approximately 6.5 percent, could
yield 6 percent or less.

We appreciate your ongoing support of TCW/DW Balanced Fund and look forward
to continuing to serve your investment needs and objectives.

Very truly yours,

[SIGNATURE]
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -------------
<C> <S> <C>
COMMON STOCKS (62.8%)
AIR TRANSPORT (2.8%)
21,100 AMR Corp.*................................................................................. $ 1,521,838
21,100 Delta Air Lines, Inc....................................................................... 1,461,175
-------------
2,983,013
-------------
AIRCRAFT & AEROSPACE (1.9%)
28,900 Boeing Co.................................................................................. 1,972,425
-------------
AUTOMOTIVE (3.8%)
35,100 Chrysler Corp.............................................................................. 1,860,300
70,500 Ford Motor Co.............................................................................. 2,194,313
-------------
4,054,613
-------------
BANKS (2.0%)
29,400 Citicorp................................................................................... 2,080,050
-------------
BANKS - REGIONAL (1.8%)
50,300 Fleet Financial Group, Inc................................................................. 1,898,825
-------------
BIOTECHNOLOGY (1.7%)
60,099 Guidant Corp............................................................................... 1,757,896
-------------
BROKERAGE (1.9%)
32,500 Merrill Lynch & Co., Inc................................................................... 2,031,250
-------------
BUILDING MATERIALS (1.3%)
25,300 Champion International Corp................................................................ 1,363,038
-------------
BUSINESS SYSTEMS (1.6%)
37,900 General Motors Corp. (Class E)............................................................. 1,724,450
-------------
COMPUTER SERVICES (1.7%)
29,000 First Data Corp............................................................................ 1,798,000
-------------
COMPUTER SOFTWARE (1.2%)
14,600 Microsoft Corp.*........................................................................... 1,321,300
-------------
ELECTRIC - MAJOR (1.6%)
26,900 General Electric Co........................................................................ 1,714,875
-------------
ELECTRONICS - DEFENSE (1.9%)
5,600 General Motors Corp. (Class H)............................................................. 229,600
21,000 Hewlett-Packard Co......................................................................... 1,750,875
-------------
1,980,475
-------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS (6.2%)
25,900 Intel Corp................................................................................. 1,557,237
24,000 Motorola, Inc.............................................................................. 1,833,000
50,900 National Semiconductor Corp.*.............................................................. 1,406,113
23,000 Texas Instruments Inc...................................................................... 1,837,125
-------------
6,633,475
-------------
ENTERTAINMENT (1.2%)
47,400 Circus Circus Enterprises, Inc.*........................................................... 1,327,200
-------------
</TABLE>

<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -------------
<C> <S> <C>
HEALTH CARE/DRUGS (2.4%)
11,883 Lilly (Eli) & Co........................................................................... $ 1,067,984
27,000 Merck & Co., Inc........................................................................... 1,512,000
-------------
2,579,984
-------------
HEALTH EQUIPMENT & SERVICES (1.9%)
42,300 Columbia/HCA Healthcare Corp............................................................... 2,056,838
-------------
HOTELS/MOTELS (1.9%)
31,300 Hilton Hotels Corp......................................................................... 1,999,287
-------------
HOUSEHOLD APPLIANCES (1.5%)
55,900 American Standard, Inc.*................................................................... 1,649,050
-------------
INSURANCE (1.2%)
14,500 American International Group, Inc.......................................................... 1,232,500
-------------
METALS & BASIC MATERIALS (0.8%)
13,000 Phelps Dodge Corp.......................................................................... 814,125
-------------
METALS & MINING (1.1%)
31,700 Case Corp.................................................................................. 1,164,975
-------------
NATURAL RESOURCES (OIL) (1.1%)
18,800 Texaco, Inc................................................................................ 1,214,950
-------------
OFFICE EQUIPMENT & SUPPLIES (2.8%)
170,900 Unisys Corp.*.............................................................................. 1,345,838
12,400 Xerox Corp................................................................................. 1,666,250
-------------
3,012,088
-------------
OIL - DOMESTIC (1.0%)
22,300 Amerada Hess Corp.......................................................................... 1,084,338
-------------
PAPER & FOREST PRODUCTS (1.2%)
28,300 Weyerhaeuser Co............................................................................ 1,291,187
-------------
RECREATION (1.7%)
31,600 Walt Disney Co............................................................................. 1,813,050
-------------
RESTAURANTS (1.0%)
29,000 McDonald's Corp............................................................................ 1,109,250
-------------
RETAIL - DEPARTMENT STORES (0.9%)
20,000 Penney (J.C.) Co., Inc..................................................................... 992,500
-------------
RETAIL - FOOD CHAINS (1.5%)
38,600 Safeway, Inc.*............................................................................. 1,611,550
-------------
RETAIL - SPECIALTY (0.6%)
17,200 Home Depot, Inc............................................................................ 685,850
-------------
SOAP & HOUSEHOLD PRODUCTS (1.2%)
16,900 Procter & Gamble Co........................................................................ 1,301,300
-------------
TELECOMMUNICATIONS (3.9%)
32,400 AT&T Corp.................................................................................. 2,130,300
81,600 Ericsson (L.M.) Telephone Co. (ADR) (Sweden)............................................... 1,989,000
-------------
4,119,300
-------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE
- ----------- --------- ---------
<C> <S> <C> <C> <C>
CORPORATE BONDS (7.2%)
BANKS (1.2%)
$ 1,200 Citicorp................................................................. 7.125% 03/15/04 1,222,236
-------------
FINANCE (1.0%)
1,000 General Motors Acceptance Corp........................................... 7.75 04/15/97 1,020,750
-------------
INDUSTRIALS (2.8%)
600 Caterpillar, Inc......................................................... 9.375 03/15/21 743,094
800 International Paper Co................................................... 6.875 11/01/23 752,464
1,400 May Department Stores Co................................................. 8.375 08/01/24 1,498,546
-------------
2,994,104
-------------
UTILITIES (2.2%)
800 Florida Power & Light Co................................................. 7.05 12/01/26 766,096
800 GTE Corp................................................................. 7.83 05/01/23 816,488
800 Texas Utilities Electric Co.............................................. 7.875 04/01/24 816,176
-------------
2,398,760
-------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $7,651,687)............................................. 7,635,850
-------------
U.S. GOVERNMENT AGENCY MORTGAGE PASS-THROUGH CERTIFICATES (10.8%)
1,318 Federal Home Loan Mortgage Corp.......................................... 6.50 04/01/09 1,298,947
1,015 Federal Home Loan Mortgage Corp.......................................... 8.00 04/01/10 1,042,339
710 Federal Home Loan Mortgage Corp.......................................... 8.00 06/01/10 729,303
3,034 Federal Home Loan Mortgage Corp.......................................... 6.50 09/01/24 2,927,851
2,028 Federal Home Loan Mortgage Corp.......................................... 7.00 08/01/25 1,991,888
1,785 Government National Mortgage Association................................. 6.00 08/20/25 1,786,674
1,750 Government National Mortgage Association................................. 7.50 09/15/25 1,766,406
-------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS-THROUGH CERTIFICATES (IDENTIFIED COST
$11,344,117)................................................................................. 11,543,408
-------------
U.S. GOVERNMENT OBLIGATIONS (12.5%)
960 U.S. Treasury Bond....................................................... 10.75 08/15/05 1,269,000
1,110 U.S. Treasury Bond....................................................... 8.00 11/15/21 1,290,722
1,470 U.S. Treasury Note....................................................... 6.125 05/15/98 1,477,350
180 U.S. Treasury Note....................................................... 6.75 05/31/99 184,359
1,790 U.S. Treasury Note....................................................... 6.25 08/31/00 1,805,942
600 U.S. Treasury Note....................................................... 7.50 11/15/01 642,281
6,165 U.S. Treasury Note....................................................... 7.50 02/15/05 6,709,254
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (IDENTIFIED COST $13,196,762)................................ 13,378,908
-------------
</TABLE>

<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1995 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- -------------
<C> <S> <C> <C> <C>
ASSET-BACKED SECURITIES (3.0%)
$ 514 First Alliance Mortgage Loan Trust 94 A-1................................ 5.85% 04/25/25 $ 492,820
673 First Alliance Mortgage Loan Trust 94 A-2................................ 7.625 07/25/25 682,385
1,574 The Money Stores Home Equity Trust 93 D.................................. 5.675 02/15/09 1,516,004
542 UCFC Home Equity Loan 93 D............................................... 5.45 07/10/13 521,449
-------------
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $3,284,722)..................................... 3,212,658
-------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
SHARES DATE
- ----------- ---------
<C> <S> <C> <C>
RIGHTS* (0.1%)
TELECOMMUNICATIONS
81,600 Ericsson (L.M.) Telephone Co. (Sweden) (Identified Cost $0)....................... 10/27/95 92,208
-------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE
- ----------- --------- ---------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENT (0.9%)
REPURCHASE AGREEMENT
$ 955 The Bank of New York (dated 09/29/95; proceeds $955,282; collateralized
by $1,005,585 U.S. Treasury Note 7.25% due 05/15/04 valued at
$1,097,891) (Identified Cost $954,854)................................. 5.375% 10/02/95 954,854
-------------
TOTAL INVESTMENTS (IDENTIFIED COST $93,893,214) (A)....................... 97.3% 103,839,618
OTHER ASSETS IN EXCESS OF LIABILITIES..................................... 2.7 2,876,820
----- -----------
NET ASSETS................................................................ 100.0% $106,716,438
----- -----------
----- -----------
<FN>
- ----------------
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(A) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $94,093,645; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $11,514,084 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $1,768,111, RESULTING IN NET UNREALIZED
APPRECIATION OF $9,745,973.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
SEPTEMBER 30, 1995
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $93,893,214)...... $103,839,618
Receivable for:
Investments sold................... 3,829,052
Interest........................... 414,797
Dividends.......................... 130,843
Shares of beneficial interest
sold............................. 63,280
Deferred organizational expenses..... 109,875
Prepaid expenses..................... 64,920
-----------
TOTAL ASSETS................. 108,452,385
-----------
LIABILITIES:
Payable for:
Investments purchased.............. 1,423,887
Plan of distribution fee........... 88,048
Shares of beneficial interest
repurchased...................... 76,033
Management fee..................... 39,622
Investment advisory fee............ 26,414
Dividends to shareholders.......... 4,231
Accrued expenses..................... 77,712
-----------
TOTAL LIABILITIES............ 1,735,947
-----------
NET ASSETS:
Paid-in-capital...................... 105,602,374
Net unrealized appreciation.......... 9,946,404
Accumulated undistributed net
investment income.................. 729,690
Accumulated net realized loss........ (9,562,030)
-----------
NET ASSETS................... $106,716,438
-----------
-----------
NET ASSET VALUE PER SHARE, 10,202,144
shares outstanding (unlimited
shares authorized of $.01 par
value).............................
$10.46
-----------
-----------
</TABLE>

Statement of Operations
FOR THE YEAR ENDED SEPTEMBER 30, 1995

<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest............................ $3,167,319
Dividends (net of $2,264 foreign
withholding tax).................. 1,631,397
----------
TOTAL INCOME...................... 4,798,716
----------
EXPENSES
Plan of distribution fee............ 1,178,353
Management fee...................... 541,070
Investment advisory fee............. 360,714
Transfer agent fees and expenses.... 142,657
Professional fees................... 78,310
Shareholder reports and notices..... 57,444
Trustees' fees and expenses......... 53,241
Registration fees................... 48,986
Organizational expenses............. 35,646
Custodian fees...................... 21,149
Other............................... 15,002
----------
TOTAL EXPENSES.................... 2,532,572
----------
NET INVESTMENT INCOME............. 2,266,144
----------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
NET REALIZED LOSS ON:
Investments......................... (5,553,383)
Foreign exchange transactions....... (78,614)
----------
TOTAL LOSS........................ (5,631,997)
----------
NET CHANGE IN UNREALIZED DEPRECIATION
ON:
Investments......................... 14,913,753
Translation of other assets and
liabilities denominated in foreign
currencies........................ 6,088
----------
TOTAL APPRECIATION................ 14,919,841
----------
NET GAIN.......................... 9,287,844
----------
NET INCREASE...................... $11,553,988
----------
----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 29,
FOR THE YEAR 1993*
ENDED THROUGH
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income......................................... $ 2,266,144 $ 1,538,998
Net realized loss............................................. (5,631,997) (4,424,442)
Net change in unrealized appreciation/depreciation............ 14,919,841 (4,973,437)
---------------- ----------------
Net increase (decrease)................................... 11,553,988 (7,858,881)
Dividends from net investment income............................ (1,210,475) (1,370,568)
Net increase (decrease) from transactions in shares of
beneficial interest........................................... (52,984,026) 158,486,400
---------------- ----------------
Total increase (decrease)................................. (42,640,513) 149,256,951
NET ASSETS:
Beginning of period............................................. 149,356,951 100,000
---------------- ----------------
END OF PERIOD (including undistributed net investment income of
$729,690 and distributions in excess of net investment income
of $214,539, respectively)..................................... $106,716,438 $149,356,951
---------------- ----------------
---------------- ----------------
<FN>
- ----------------
* COMMENCEMENT OF OPERATIONS.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995
- --------------------------------------------------------------------------------

1. ORGANIZATION AND ACCOUNTING POLICIES--TCW/DW Balanced Fund (the "Fund") is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
a diversified, open-end management investment company. The Fund was organized as
a Massachusetts business trust on March 2, 1993 and on July 1, 1993 issued
10,000 shares of beneficial interest for $100,000 to Dean Witter InterCapital
Inc. ("InterCapital"), an affiliate of Dean Witter Services Company, Inc. (the
"Manager"), to effect the Fund's initial capitalization. The Fund commenced
operations on October 29, 1993.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS--(1) an equity security listed or traded on the
New York, American, other domestic or foreign stock exchange is valued at
its latest sale price on that exchange prior to the time when assets are
valued; if there were no sales that day, the security is valued at the
latest bid price (in cases where securities are traded on more than one
exchange, the securities are valued on the exchange designated as the
primary market by the Adviser); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it
is determined by the Adviser that sale and bid prices are not reflective of
a security's market value, portfolio securities are valued at their fair
value as determined in good faith under procedures established by and under
the general supervision of the Trustees (valuation of debt securities for
which market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and
maturity or an appropriate matrix utilizing similar factors); (4) portfolio
securities may be valued by an outside pricing service approved by the
Trustees. The pricing service utilizes a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters,
and/or research and evaluation by its staff, including review of
broker-dealer market price quotations, if available, in determining what it
believes is the fair valuation of the portfolio securities valued by such
pricing service; and (5) short-term debt securities having a maturity date
of more than sixty days at time of purchase are valued on a mark-to-market
basis until sixty days prior to maturity and thereafter at amortized cost
based on their value on the 61st day. Short-term debt securities having a
maturity date of sixty days or less at the time of purchase are valued at
amortized cost.

B. ACCOUNTING FOR INVESTMENTS--Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Discounts are accreted over the life of the respective securities.
Dividend income is recorded on the ex-dividend date except with respect to
certain dividends on foreign securities which are recorded as soon as the
Fund is informed after the ex-dividend date. Interest income is accrued
daily.

C. FOREIGN CURRENCY TRANSLATION--The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value
of investment securities, other assets and liabilities and forward contracts
are translated at the exchange rates prevailing at the end of the period;
and (2) purchases, sales, income and expenses are translated at the exchange
rates prevailing on the respective dates of such transactions. The resultant
exchange gains and losses are included in the Statement of Operations as
realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange
gains/losses included in realized and unrealized gain/loss are included in
or are a reduction of ordinary income for federal income tax purposes. The
Fund does not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the changes in the
market prices of the securities.
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (CONTINUED)
- --------------------------------------------------------------------------------

D. FORWARD FOREIGN CURRENCY CONTRACTS--The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate
exchange rates. The resultant exchange gains and losses are included in the
Statement of Operations as unrealized gain/loss on foreign exchange
transactions. The Fund records realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished (compensated)
by entering into a closing transaction prior to delivery.

E. FEDERAL INCOME TAX STATUS--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.

F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS--The Fund records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such
amounts are reclassified within the capital accounts based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized capital gains. To the extent they
exceed net investment income and net realized capital gains for tax
purposes, they are reported as distributions of paid-in-capital.

G. ORGANIZATIONAL EXPENSES--InterCapital paid the organizational expenses of
the Fund in the amount of $180,493 which have been reimbursed by the Fund
for the full amount thereof. Such expenses have been deferred and are being
amortized by the Fund on the straight-line method over a period not to
exceed five years from the commencement of operations.

2. MANAGEMENT AGREEMENT--Pursuant to a Management Agreement, the Fund pays a
management fee, accrued daily and payable monthly, by applying the annual rate
of 0.45% to the net assets of the Fund determined as of the close of each
business day.

Under the terms of the Management Agreement, the Manager maintains certain
of the Fund's books and records and furnishes, at its own expense, office space,
facilities, equipment, clerical, bookkeeping and certain legal services and pays
the salaries of all personnel, including officers of the Fund who are employees
of the Manager. The Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.

3. INVESTMENT ADVISORY AGREEMENT--Pursuant to an Investment Advisory Agreement
with TCW Funds Management, Inc. (the "Adviser"), the Fund pays an advisory fee,
accrued daily and payable monthly, by applying the annual rate of 0.30% to the
net assets of the Fund determined as of the close of each business day.

Under the terms of the Investment Advisory Agreement, the Fund has retained
the Adviser to invest the Fund's assets, including placing orders for the
purchase and sale of portfolio securities. The Adviser obtains and evaluates
such information and advice relating to the economy, securities markets, and
specific securities as it considers necessary or useful to continuously manage
the assets of the Fund in a manner consistent with its investment objective. In
addition, the Adviser pays the salaries of all personnel, including officers of
the Fund, who are employees of the Adviser.
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (CONTINUED)
- --------------------------------------------------------------------------------

4. PLAN OF DISTRIBUTION--Dean Witter Distributors Inc. (the "Distributor"), an
affiliate of the Manager, is the Distributor of the Fund's shares and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under
the Act, finances certain expenses in connection therewith.

Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses that
the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, account executives
of Dean Witter Reynolds Inc. ("DWR"), an affiliate of the Manager and
Distributor, its affiliates and other dealers who have entered into selected
dealer agreements with the Distributor under the Plan: (1) compensation to, and
expenses of, account executives of DWR and other selected broker-dealers and
others including overhead and telephone expenses; (2) sales incentives and
bonuses to sales representatives and to marketing personnel in connection with
promoting sales of the Fund's shares; (3) expenses incurred in connection with
promoting sales of the Fund's shares; (4) preparing and distributing sales
literature; and (5) providing advertising and promotional activities, including
direct mail solicitation and television, radio, newspaper, magazine and other
media advertisements.

The amount of each monthly reimbursement may in no event exceed an amount
equal to a payment at the annual rate of 1.0% of the Fund's average daily net
assets. Expenses incurred pursuant to the Plan in any fiscal year in excess of
1.0% of the Fund's average daily net assets will not be reimbursed by the Fund
through payments accrued in any subsequent fiscal year. For the year ended
September 30, 1995, the distribution fee accrued was at the annual rate of
0.98%.

5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES--The cost of
purchases and proceeds from sales of portfolio securities, excluding short-term
investments, for the year ended September 30, 1995 aggregated $142,729,312 and
$191,511,050, respectively. Included in the aforementioned are purchases and
sales of U.S. Government securities of $94,176,890 and $91,066,544,
respectively.

For the year ended September 30, 1995, the Fund incurred $49,753 in
brokerage commissions with DWR for portfolio transactions executed on behalf of
the Fund.

Dean Witter Trust Company, an affiliate of the Manager and Distributor, is
the Fund's transfer agent. At September 30, 1995, the Fund had transfer agent
fees and expenses payable of approximately $15,000.

6. SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial interest
were as follows:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR OCTOBER 29, 1993*
ENDED THROUGH
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Sold............................................... 1,576,172 $ 14,889,309 21,141,779 $ 209,527,754
Reinvestment of dividends.......................... 114,844 1,094,653 127,755 1,222,256
----------- -------------- ------------ --------------
1,691,016 15,983,962 21,269,534 210,750,010
Repurchased........................................ (7,332,918) (68,967,988) (5,435,488) (52,263,610)
----------- -------------- ------------ --------------
Net increase (decrease)............................ (5,641,902) $ (52,984,026) 15,834,046 $ 158,486,400
----------- -------------- ------------ --------------
----------- -------------- ------------ --------------
</TABLE>

- --------------
* COMMENCEMENT OF OPERATIONS.
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (CONTINUED)
- --------------------------------------------------------------------------------

7. FEDERAL INCOME TAX STATUS--At September 30, 1995, the Fund had a net capital
loss carryover of approximately $4,030,000 which will be available through
September 30, 2003 to offset future capital gains to the extent provided by
regulations.

Capital and foreign currency losses incurred after October 31
("post-October" losses) within the taxable year are deemed to arise on the first
business day of the Fund's next taxable year. The Fund incurred and will elect
to defer net capital and foreign currency losses of approximately $3,532,000 and
$1,799,000, respectively during fiscal 1995. As of September 30, 1995, the Fund
had temporary book/tax differences primarily attributable to post-October losses
and capital loss deferrals on wash sales, and permanent book/tax differences due
to foreign currency losses. To reflect reclassifications arising from permanent
book/tax differences for the year ended September 30, 1995, accumulated net
realized loss was credited and accumulated undistributed net investment income
was charged $111,440.

8. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS--The Fund
may enter into forward foreign currency contracts ("forward contracts") to
facilitate settlement of foreign currency denominated portfolio transactions or
to manage foreign currency exposure associated with foreign currency denominated
securities.

Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR OCTOBER 29, 1993*
ENDED THROUGH
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
------------------ --------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 9.43 $ 10.00
-------- --------
Net investment income................................................. 0.20 0.10
Net realized and unrealized gain (loss)............................... 0.93 (0.58)
-------- --------
Total from investment operations...................................... 1.13 (0.48)
Less dividends from net investment income............................. (0.10) (0.09)
-------- --------
Net asset value, end of period........................................ $ 10.46 $ 9.43
-------- --------
-------- --------

TOTAL INVESTMENT RETURN............................................... 11.97% (4.80)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.11% 2.06%(2)
Net investment income................................................. 1.88% 1.22%(2)
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).............................. $106,716 $149,357
Portfolio turnover rate............................................... 123% 113%(1)
</TABLE>

- --------------
* COMMENCEMENT OF OPERATIONS.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of TCW/DW Balanced Fund

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of TCW/DW Balanced Fund (the "Fund")
at September 30, 1995, the results of its operations for the year then ended,
and the changes in its net assets and the financial highlights for the year then
ended and for the period October 29, 1993 (commencement of operations) through
September 30, 1994, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities owned at
September 30, 1995 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
November 8, 1995

1995 FEDERAL INCOME TAX NOTICE (UNAUDITED)
During the fiscal year ended September 30, 1995, 71% of the income dividends
paid qualifies for the dividends received deduction available to corporations.
<PAGE>

TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Thomas E. Larkin, Jr.
President

Sheldon Curtis
Vice President, Secretary and
General Counsel

James A. Tilton
Vice President

James M. Goldberg
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036

MANAGER
Dean Witter Services Company Inc.

ADVISER
TCW Funds Management, Inc.

This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of the
Fund.

This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.

TCW/DW

BALANCED FUND

[Graphic]

ANNUAL REPORT
SEPTEMBER 30, 1995

<PAGE>

TCW/DW BALANCED FUND
GROWTH OF $10,000
<TABLE>
<CAPTION>

DATE TOTAL S&P LEHMAN(G/C) LEHMAN(AG)
<S> <C> <C> <C> <C>
October 29, 1993 $10000 $10000 $10000 $10000
September 30, 1994 $ 9520 $10149 $ 9547 $ 9642
September 30, 1995 $10660 (2) $13169 $10917 $10997

</TABLE>

AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>

ONE YEAR LIFE OF FUND
<S> <C>
11.97 (1) 3.38 (1)
</TABLE>

_______ Fund _______ S&P 500 (3) _______ LEHMAN (G/C)(4) ______ LEHMAN (AG)(5)

Past performance is not predictive of future returns.
________________________________________

(1) Figure shown assumes reinvestment of all distributions. There is no sales
charge.

(2) Closing value assuming a complete redemption on September 30, 1995.

(3) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the index
does not include any expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.

(4) The Lehman Brothers Government/Corporate Bond Index tracks the performance
of government and corporate obligations, including U.S. government agency
and U.S. treasury securities and corporate and yankee bonds. The
performance of the index does not include any expenses, fees or charges.
The Index is unmanaged and should not be considered an investment.

(5) The Lehman Brothers Aggregate Bond Index tracks the performance of all U.S.
Government agency and Treasury securities, investment-grade corporate debt
securities, agency mortgage-backed securities and asset-backed securities.
The performance of the index does not include any expenses, fees or
charges. The Index is unmanaged and should not be considered an
investment.