TCW DW BALANCED FUND, N-30D, 1997-12-12

TCW DW BALANCED FUND
N-30D, 1997-12-12

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<PAGE>
TCW/DW BALANCED FUND TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997

DEAR SHAREHOLDER:

During the 12-month period ended September 30, 1997, both the U.S. stock market
and bond markets continued to reward investors. Stocks, as measured by the
Standard & Poor's 500 Composite Stock Price Index (S&P 500 Index), returned
40.44 percent, while bonds, as measured by the Lehman Brothers Aggregate Bond
Index (Lehman Index), returned 9.71 percent.

VOLATILITY IN THE STOCK MARKET

The fiscal year began with stronger than expected economic growth. Rapid job
creation, high consumer confidence and strong real income growth all pointed to
more strength in the months immediately ahead. These factors prompted numerous
warnings from the Federal Reserve Board of a potential rise in inflation. On
March 25, 1997, the central bank chose to increase the federal-funds rate by 25
basis points (0.25 percent), resulting in the S&P 500 losing most of the gains
it had achieved in early 1997.

The stock market rebounded significantly during the second quarter of 1997 as
fears of further interest-rate hikes by the Fed abated. A marked slowing in the
rate of economic growth and favorable inflation numbers lessened those fears and
triggered a rally in the bond market, which carried through into the equity
market. Corporate profits continued to surprise investors on the upside,
providing more underlying strength to this extended business cycle.

The third quarter was punctuated by a significant correction in August, caused
primarily by multinational consumer nondurable companies pre-announcing earnings
disappointments. This movement had the effect of placing pressure on many
large-cap companies. During this correction, a pronounced divergence between
large-cap and small-cap stocks took shape as the Nasdaq Index returned 16.9
percent for the quarter, compared to 7.5 percent for the S&P 500. The stock
market rebounded in September as favorable economic data confirmed the view that
the U.S. economy could sustain its current level of growth while keeping
inflation in check.
<PAGE>
TCW/DW BALANCED FUND
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997, CONTINUED

STRENGTH IN THE BOND MARKETS
Despite the March 25 rate tightening by the Federal Reserve, interest rates
declined during the 12-month period under review. The yield on 30-year U.S.
Treasury bonds declined 52 basis points,
from 6.92 percent on September 30,
1996, to 6.40 percent on September 30,
1997. In a similar fashion, the yield
on 10-year U.S. Treasuries fell 59
basis points, to 6.10 percent.
[GRAPHIC]
Looking ahead, it appears that the
Federal Reserve may be having second
thoughts about an additional increase
in short-term interest rates following
the increase implemented on March 25,
1997. If enhanced productivity trends
can continue to contain core inflation
while a strong dollar and excess
supplies in Asia keep a lid on
commodity prices, the need for further
Fed tightening may remain reduced.
PERFORMANCE AND PORTFOLIO
On July 28, 1997, TCW/DW Balanced Fund
began offering four classes of shares
- -- A, B, C and D -- each with its own
sales charge and distribution fee
structure. A revised prospectus, which
includes complete details regarding the
Fund's conversion to multiple classes
of shares, was mailed to shareholders
in midsummer.
[GRAPHIC]
The Fund's Class C shares produced a
total return of 18.67 percent for the
12-month period ended September 30,
1997. This return compares to a return
of 24.92 percent for the Lipper
Balanced Funds Index (Lipper Index).
The accompanying chart illustrates the
growth of a $10,000 investment in the
Fund's Class C shares from inception

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
Growth of $10,000-Class C
<S> <C> <C> <C> <C>
($ in Thousands)
Average Annual Total Return (Fund)
1 Year Life of Fund
18.67%(1) 9.34%(1)
17.67%(2) 9.34%(1)
Fund S&P 500(4) Lehman(5) Lipper(6)
October 1993 $10,000 $10,000 $10,000 $10,000
September 1994 $9,520 $10,149 $9,642 $9,908
September 1995 $10,660 $13,164 $10,997 $11,716
September 1996 $11,950 $15,840 $11,538 $13,102
September 1997 $14,193(3) $22,245 $12,657 $16,367
</TABLE>

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS.
Prior to July 28, 1997 the Fund offered only one Class of shares. Because all
shares of the Fund held prior to such time (other than shares which were
acquired in exchange for shares of TCW/DW Funds offered with a CDSC and shares
acquired through reinvestment of dividends and distributions thereon) have been
designated Class C, historical performance data has been restated to reflect the
1.0% CDSC imposed on most Class C shares redeemed within one year after
purchase.
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable contingent deferred sales charge (CDSC) (1 year-1%,
since inception-0%). See the Fund's current prospectus for complete details
on fees and sales charges.
(3) Closing value assuming a complete redemption on September 30, 1997.
(4) 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.
(5) The Lehman Brothers Aggregate Bond Index tracks the performance of 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.
(6) The Lipper Balanced Fund Index is an equally-weighted performance index of
the largest qualifying funds (based on net assets) in the Lipper Balanced
Funds objective. The index, which is adjusted for capital gains
distributions and income dividends, is unmanaged and should not be
considered an investment. There are currently 30 funds represented in this
index.
<PAGE>
TCW/DW BALANCED FUND
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997, CONTINUED

(October 29, 1993) through September 30, 1997, versus a similar investment in
the issues that comprise the S&P 500 Index, Lehman Index and Lipper Index.

PORTFOLIO STRATEGY

On September 30, 1997, the Fund had 65 percent of its assets invested in
equities, with the remaining 30 percent invested in high-grade, fixed-income
securities. Among the largest industry weightings are aircraft and aerospace,
electronics -- semiconductors and components, computer software, auto parts and
telecommunications.

Technology companies held in the portfolio include Cisco Systems, Inc., Intel
Corp., Microsoft Corp. and Oracle Corp. These companies should continue to
benefit from the extremely rapid growth of online and Internet services, the
impact of telecommunications deregulation in the United States and continuing
privatization abroad. Aerospace and defense companies owned in the Fund include
Boeing Co., which continues to integrate its purchase of McDonnell Douglas, as
well as Honeywell, Inc. and United Technologies Corp. Orders for commercial
aircraft continue to increase, due to the need to replace aging aircraft with
more fuel efficient, safer models. Demand for new aircraft is also strong in the
emerging economies in Latin America and Asia.

Financial service companies in the Fund include Associates First Capital Corp.,
Citicorp, Federal National Mortgage Association and Merrill Lynch & Co., Inc.
The increasing savings rate in the United States is stimulating demand for
insurance and investment products. Technology is lowering the cost of managing
and distributing consumer financial products such as credit cards and home
mortgage loans. As a result, consumers are benefiting from better services at
lower cost, which is contributing to more rapid industry growth.

In addition to its positions in U.S. Treasury and agency securities, the
fixed-income portion of the Fund holds the corporate bonds of such industrial
issuers as Coca-Cola Enterprises, Inc., Raytheon Co., Caterpillar, Inc. and
Wal-Mart Stores, Inc. The Fund's financial fixed-income holdings include
Associates Corp. of North America, Bear Stearns Companies, Inc., Ford Motor
Credit Corp. and General Electric Capital Corp. The duration of this component,
at 4.8 years, was neutral to its index as of September 30, 1997.

LOOKING AHEAD

On November 6, 1997, the Board of Trustees of TCW/DW Balanced Fund voted to
recommend to shareholders a reorganization plan whereby the Fund would be merged
into Dean Witter Balanced Growth Fund. This plan is subject to the consent of
TCW/DW Balanced Fund's shareholders. If
<PAGE>
TCW/DW BALANCED FUND
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1997, CONTINUED

approved, the Fund's assets would be combined with the assets of Dean Witter
Balanced Growth Fund, and TCW/DW Balanced Fund shareholders would become
shareholders of Dean Witter Balanced Growth Fund, receiving shares of that fund
equal to the value of their holdings in TCW/DW Balanced Fund. A shareholder
letter and supplement to the Fund's July 28, 1997 prospectus was mailed to
shareholders in early November.

A proxy statement formally detailing this proposal, including reasons for the
Trustees' action, and information concerning Dean Witter Balanced Growth Fund
will be distributed to shareholders. We ask that you review the proxy statements
carefully upon receipt and vote on the proposals set forth therein.

We look forward to continuing to serve your investment needs and objectives.

Very truly yours,

/s/ C. FIUMEFREDDO
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (64.9%)
AIR TRANSPORT (4.1%)
5,100 AMR Corp.*.............................................................................. $ 564,506
19,900 Delta Air Lines, Inc.................................................................... 1,874,331
16,300 UAL Corp.*.............................................................................. 1,379,387
-----------
3,818,224
-----------
AIRCRAFT & AEROSPACE (4.7%)
38,800 Boeing Co............................................................................... 2,112,175
28,300 United Technologies Corp................................................................ 2,292,300
-----------
4,404,475
-----------
AUTO PARTS - ORIGINAL EQUIPMENT (3.3%)
34,900 Lear Corp.*............................................................................. 1,718,825
20,400 Magna International, Inc. (Class A) (Canada)............................................ 1,410,150
-----------
3,128,975
-----------
AUTOMOTIVE (2.6%)
53,700 Ford Motor Co........................................................................... 2,429,925
-----------
BANKS (2.1%)
14,900 Citicorp................................................................................ 1,995,669
-----------
BEVERAGES - SOFT DRINKS (1.6%)
36,200 PepsiCo, Inc............................................................................ 1,468,362
-----------
BROADCAST MEDIA (1.7%)
59,832 Westinghouse Electric Corp.............................................................. 1,619,203
-----------
BROKERAGE (1.9%)
24,100 Merrill Lynch & Co., Inc................................................................ 1,787,919
-----------
COMMERCIAL SERVICES (1.6%)
33,400 Corrections Corp. of America*........................................................... 1,452,900
-----------
COMMUNICATIONS - EQUIPMENT & SOFTWARE (2.8%)
36,000 Cisco Systems, Inc.*.................................................................... 2,630,250
-----------
COMPUTER SOFTWARE (3.6%)
21,100 Microsoft Corp.*........................................................................ 2,791,794
17,000 Oracle Corp.*........................................................................... 619,438
-----------
3,411,232
-----------
COMPUTERS - SYSTEMS (0.9%)
24,000 Tandy Corp.............................................................................. 807,000
-----------
ELECTRICAL EQUIPMENT (1.2%)
16,000 Honeywell, Inc.......................................................................... 1,075,000
-----------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS (4.5%)
46,100 Intel Corp.............................................................................. 4,258,488
-----------
ENTERTAINMENT (1.3%)
41,200 Mirage Resorts, Inc.*................................................................... 1,241,150
-----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCIAL (1.6%)
32,200 Fannie Mae.............................................................................. $ 1,513,400
-----------
FINANCIAL SERVICES (1.6%)
24,300 Associates First Capital Corp........................................................... 1,512,675
-----------
FOODS (1.1%)
23,600 Kellogg Co.............................................................................. 994,150
-----------
HEALTHCARE - DIVERSIFIED (2.1%)
14,700 Warner-Lambert Co....................................................................... 1,983,581
-----------
HEALTHCARE - DRUGS (3.0%)
15,100 Johnson & Johnson....................................................................... 870,138
15,900 Lilly (Eli) & Co........................................................................ 1,918,931
-----------
2,789,069
-----------
INDUSTRIALS (2.0%)
35,200 Caterpillar, Inc........................................................................ 1,898,600
-----------
INSURANCE BROKERS (1.6%)
19,400 Marsh & McLennan Companies, Inc......................................................... 1,486,525
-----------
OFFICE EQUIPMENT & SUPPLIES (1.1%)
12,000 Xerox Corp.............................................................................. 1,010,250
-----------
OIL & GAS EXPLORATION (0.8%)
26,000 Canadian Natural Resources Ltd. (Canada)*............................................... 767,253
-----------
OIL - DOMESTIC (0.7%)
6,800 Amoco Corp.............................................................................. 655,350
-----------
PUBLISHING (2.0%)
33,900 Time Warner, Inc........................................................................ 1,836,956
-----------
RAILROADS (1.8%)
17,800 Burlington Northern Santa Fe Corp....................................................... 1,719,925
-----------
RETAIL - SPECIALTY (2.5%)
45,800 Home Depot, Inc......................................................................... 2,387,325
-----------
SOAP & HOUSEHOLD PRODUCTS (2.3%)
30,800 Procter & Gamble Co..................................................................... 2,127,125
-----------
TELECOMMUNICATIONS (1.0%)
11,700 Lucent Technologies, Inc................................................................ 952,088
-----------
TOBACCO (1.8%)
40,000 Philip Morris Companies, Inc............................................................ 1,662,500
-----------

TOTAL COMMON STOCKS
(IDENTIFIED COST $41,432,833)........................................................... 60,825,544
-----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (4.6%)
AIRCRAFT & AEROSPACE (0.1%)
$ 100 Lockheed Martin Corp............................................................ 7.25% 05/15/06 $ 103,870
-----------
AUTOMOTIVE (0.2%)
200 General Motors Corp............................................................. 8.10 06/15/24 213,230
-----------
BANKS (0.2%)
200 Citicorp........................................................................ 7.125 03/15/04 205,306
-----------
BEVERAGES - SOFT DRINKS (0.1%)
100 Coca-Cola Enterprises, Inc...................................................... 7.88 02/01/02 105,951
-----------
CABLE & TELECOMMUNICATIONS (0.3%)
200 News America Holdings, Inc...................................................... 8.50 02/15/05 216,324
-----------
FINANCIAL (1.1%)
200 Abbey National PLC (United Kingdom)............................................. 6.69 10/17/05 200,378
150 Associates Corp. of North America............................................... 6.25 03/15/99 150,685
100 Associates Corp. of North America............................................... 5.25 03/30/00 97,878
200 Bear Stearns Companies, Inc..................................................... 5.75 02/15/01 196,472
200 Comdisco, Inc................................................................... 6.50 04/30/99 201,398
150 General Electric Capital Corp................................................... 8.85 04/01/05 170,292
-----------
1,017,103
-----------
FINANCIAL SERVICES (0.2%)
150 Ford Motor Credit Corp.......................................................... 8.20 02/15/02 160,176
-----------
INDUSTRIALS (0.7%)
200 Caterpillar, Inc................................................................ 9.375 03/15/21 252,122
100 Praxair, Inc.................................................................... 6.75 03/01/03 101,070
250 Raytheon Co..................................................................... 6.45 08/15/02 249,573
-----------
602,765
-----------
OIL & GAS PRODUCTS (0.2%)
200 BP America, Inc................................................................. 9.375 11/01/00 217,898
-----------
RETAIL (0.5%)
200 Federated Department Stores, Inc................................................ 8.125 10/15/02 212,628
200 Wal-Mart Stores, Inc............................................................ 7.50 05/15/04 211,566
-----------
424,194
-----------
TELEPHONES (0.2%)
200 MCI Communications Corp......................................................... 6.95 08/15/06 204,742
-----------
TRANSPORTATION (0.2%)
100 Norfolk Southern Corp........................................................... 7.35 05/15/07 104,105
100 Union Pacific Corp.............................................................. 7.875 02/15/02 105,485
-----------
209,590
-----------
UTILITIES (0.6%)
200 Florida Power & Light Co........................................................ 7.05 12/01/26 195,136
200 Texas Utilities Electric Co..................................................... 7.875 04/01/24 206,222
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997, CONTINUED

TOTAL CORPORATE BONDS
(IDENTIFIED COST $4,224,945)....................................................................... 4,284,131
-----------

U.S. GOVERNMENT AGENCIES & OBLIGATIONS (15.8%)
575 Federal National Mortgage Assoc. ............................................... 7.40 07/01/04 609,592
880 Federal National Mortgage Assoc. ............................................... 6.40 09/27/05 883,890
1,730 U.S. Treasury Bond.............................................................. 12.00 08/15/13 2,493,120
1,595 U.S. Treasury Bond.............................................................. 7.50 11/15/24 1,801,935
290 U.S. Treasury Bond.............................................................. 6.50 11/15/26 291,917
350 U.S. Treasury Note.............................................................. 5.50 11/15/98 349,202
155 U.S. Treasury Note.............................................................. 5.875 01/31/99 155,268
4,380 U.S. Treasury Note.............................................................. 6.375 04/30/99 4,420,296
965 U.S. Treasury Note.............................................................. 6.00 08/15/99 967,992
850 U.S. Treasury Note.............................................................. 6.25 02/15/03 858,271
820 U.S. Treasury Note.............................................................. 7.875 11/15/04 901,475
1,120 U.S. Treasury Note.............................................................. 5.875 11/15/05 1,099,179
-----------

TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS
(IDENTIFIED COST $14,611,600)...................................................................... 14,832,137
-----------

CANADIAN GOVERNMENT AGENCIES (0.5%)
200 Hydro-Quebec.................................................................... 9.40 02/01/21 247,734
150 Province of Manitoba............................................................ 6.875 09/15/02 153,527
100 Province of Ontario............................................................. 6.00 02/21/06 96,819
-----------

TOTAL CANADIAN GOVERNMENT AGENCIES
(IDENTIFIED COST $485,647)......................................................................... 498,080
-----------

ASSET-BACKED SECURITY (0.8%)
782 Federal Housing Administration Burbank Gardens Retirement Center**
(IDENTIFIED COST $759,597).................................................... 7.50 02/01/32 784,048
-----------

MORTGAGE-BACKED SECURITIES (6.2%)
1,424 Federal Home Loan Mortgage Corp................................................. 7.50 06/01/11 1,457,342
642 Federal Home Loan Mortgage Corp................................................. 7.50 08/01/11 656,829
995 Federal Home Loan Mortgage Corp................................................. 7.00 03/01/17 997,446
1,802 Federal Home Loan Mortgage Corp................................................. 7.00 08/01/25 1,797,198
458 Federal Home Loan Mortgage Corp................................................. 8.00 06/01/26 472,725
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997, CONTINUED

TOTAL MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $5,651,018)....................................................................... 5,772,984
-----------

COLLATERALIZED MORTGAGE OBLIGATIONS (2.4%)
600 Bear Stearns Mortgage Securities, Inc.
1997-2 A2..................................................................... 6.50 04/28/24 582,885
1,000 Federal National Mortgage Assoc.
1996-53 M..................................................................... 6.50 12/18/11 946,666
697 Residential Funding Mortgage Securities, Inc. 1993-S23 A8....................... 6.50 06/25/08 693,550
-----------

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(IDENTIFIED COST $2,169,430)....................................................................... 2,223,101
-----------

SHORT-TERM INVESTMENT (0.6%)
REPURCHASE AGREEMENT
591 The Bank of New York (dated 09/30/97; proceeds $590,667) (a)
(IDENTIFIED COST $590,581).................................................... 5.25 10/01/97 590,581
-----------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $69,925,651) (B).......................................................... 95.8 % 89,810,606

CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................. 4.2 3,935,534
------ ------------

NET ASSETS................................................................................. 100.0 % $ 93,746,140
------ ------------
------ ------------
</TABLE>

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

* Non-income producing security.
** Resale is restricted.
+ ARM -- Adjustable Rate Mortgage
(a) Collateralized by $455,065 U.S. Treasury Bond 9.00% due 11/15/18 valued at
$602,392.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $19,926,461 and the
aggregate gross unrealized depreciation is $41,506, resulting in net
unrealized appreciation of $19,884,955.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $69,925,651)................................................................ $89,810,606
Cash........................................................................................... 36,023
Receivable for:
Investments sold........................................................................... 3,689,310
Interest................................................................................... 416,358
Dividends.................................................................................. 41,417
Shares of beneficial interest sold......................................................... 40,424
Deferred organizational expenses............................................................... 38,484
Prepaid expenses and other assets.............................................................. 99,358
-----------
TOTAL ASSETS.............................................................................. 94,171,980
-----------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased.................................................. 227,470
Plan of distribution fee................................................................... 82,622
Management fee............................................................................. 37,196
Investment advisory fee.................................................................... 24,798
Dividends and distributions to shareholders................................................ 2,534
Accrued expenses and other payables............................................................ 51,220
-----------
TOTAL LIABILITIES......................................................................... 425,840
-----------
NET ASSETS................................................................................ $93,746,140
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital................................................................................ $66,491,685
Net unrealized appreciation.................................................................... 19,884,955
Accumulated undistributed net investment income................................................ 65,565
Accumulated undistributed net realized gain.................................................... 7,303,935
-----------
NET ASSETS................................................................................ $93,746,140
-----------
-----------
CLASS A SHARES:
Net Assets..................................................................................... $45,619
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 3,335
NET ASSET VALUE PER SHARE.................................................................
$13.68
-----------
-----------

MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE).........................................
$14.44
-----------
-----------
CLASS B SHARES:
Net Assets..................................................................................... $5,478,596
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 400,498
NET ASSET VALUE PER SHARE.................................................................
$13.68
-----------
-----------
CLASS C SHARES:
Net Assets..................................................................................... $88,211,844
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 6,448,320
NET ASSET VALUE PER SHARE.................................................................
$13.68
-----------
-----------
CLASS D SHARES:
Net Assets..................................................................................... $10,081
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 737
NET ASSET VALUE PER SHARE.................................................................
$13.68
-----------
-----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1997*

<TABLE>
<S> <C>
NET INVESTMENT INCOME:

INCOME
Interest....................................................................................... $ 2,074,386
Dividends (net of $2,786 foreign withholding tax).............................................. 650,808
-----------

TOTAL INCOME.............................................................................. 2,725,194
-----------

EXPENSES
Plan of distribution fee (Class B shares)...................................................... 9,461
Plan of distribution fee (Class C shares)...................................................... 908,897
Management fee................................................................................. 417,405
Investment advisory fee........................................................................ 278,270
Transfer agent fees and expenses............................................................... 92,831
Professional fees.............................................................................. 53,942
Shareholder reports and notices................................................................ 48,833
Organizational expenses........................................................................ 35,648
Trustees' fees and expenses.................................................................... 32,966
Registration fees.............................................................................. 19,989
Custodian fees................................................................................. 17,593
Other.......................................................................................... 8,614
-----------

TOTAL EXPENSES............................................................................ 1,924,449
-----------

NET INVESTMENT INCOME..................................................................... 800,745
-----------

NET REALIZED AND UNREALIZED GAIN:
Net realized gain.............................................................................. 7,860,641
Net change in unrealized appreciation.......................................................... 7,052,433
-----------

NET GAIN.................................................................................. 14,913,074
-----------

NET INCREASE................................................................................... $15,713,819
-----------
-----------

- ---------------------
* Class A, Class B and Class D shares were issued July 28, 1997.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1997* SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income.............................................. $ 800,745 $ 1,102,597
Net realized gain.................................................. 7,860,641 7,206,334
Net change in unrealized appreciation.............................. 7,052,433 2,886,118
------------------- ------------------

NET INCREASE.................................................. 15,713,819 11,195,049
------------------- ------------------

DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A shares................................................. (151 ) --
Class B shares................................................. (10,275 ) --
Class C shares................................................. (721,547 ) (36,468 )
Class D shares................................................. (36 ) --
In excess of net investment income
Class C shares................................................. -- (838,389 )
------------------- ------------------

TOTAL DIVIDENDS............................................... (732,009 ) (874,857 )
------------------- ------------------
Net decrease from transactions in shares of beneficial interest.... (13,726,947 ) (24,545,353 )
------------------- ------------------

NET INCREASE (DECREASE)....................................... 1,254,863 (14,225,161 )

NET ASSETS:
Beginning of period................................................ 92,491,277 106,716,438
------------------- ------------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $65,565 AND
DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME OF $3,171,
RESPECTIVELY).................................................. $ 93,746,140 $ 92,491,277
------------------- ------------------
------------------- ------------------

- ---------------------
* Class A, Class B, and Class D shares were issued July 28, 1997.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997

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's investment objective is to achieve a high total
return through a combination of income and capital appreciation. The Fund seeks
to achieve its objective by investing in a diversified portfolio of common
stocks and investment grade fixed-income securities. The Fund was organized as a
Massachusetts business trust on March 2, 1993 and commenced operations on
October 29, 1993. On July 28, 1997, the Fund commenced offering three additional
classes of shares, with the then current shares, other than shares which were
acquired in exchange for shares of Funds for which Dean Witter Services Company
Inc. serves as Manager and TCW Funds Management, Inc. serves as Adviser ("TCW/DW
Funds") offered with a contingent deferred sale charge ("CDSC") and shares
acquired through reinvestment of dividends and distributions thereon, have been
designated Class C shares. Shares held prior to July 28, 1997 which were
acquired in exchange for shares of a TCW/DW Fund sold with a CDSC, including
shares acquired through reinvestment of dividends and distributions thereon,
have been designated Class B shares.

The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.

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 pursuant to procedures
adopted by the Trustees); (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
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997, CONTINUED

not readily available, including circumstances under which it is determined by
TCW Funds Management, Inc. (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) certain portfolio
securities may be valued by an outside pricing service approved by the Trustees.
The pricing service may utilize a matrix system incorporating security quality,
maturity and coupon as the evaluation model parameters, and/or research and
evaluations 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.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Discounts are accreted over the
life of the respective securities. Interest income is accrued daily.

C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.

D. 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.

E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record 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"
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997, CONTINUED

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.

F. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc., an affiliate of
Dean Witter Services Company, Inc. (the "Manager"), paid the organizational
expenses of the Fund in the amount of $180,493 which have been reimbursed for
the full amount thereof. Such expenses have been deferred and are being
amortized 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 the Manager 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 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, the Fund pays the Adviser 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 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
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997, CONTINUED

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.

4. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Manager. The Fund has adopted a Plan of
Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A--0.25% of the average
daily net assets of Class A; (ii) Class B--1.0% of the average daily net assets
of Class B; and (iii) Class C--1.0% of the average daily net assets of Class C.
In the case of Class A shares, amounts paid under the Plan are paid to the
Distributor for services provided. In the case of Class B and Class C shares,
amounts paid under the Plan are paid to the Distributor for services provided
and the expenses borne by it and others in the distribution of the shares of
these Classes, including the payment of commissions for sales of these Classes
and incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Manager and Distributor, and
others who engage in or support distribution of the shares or who service
shareholder accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering of
these shares to other than current shareholders; and preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may utilize fees paid pursuant to the Plan, in the case of Class B
shares, to compensate DWR and other selected broker-dealers for their
opportunity costs in advancing such amounts, which compensation would be in the
form of a carrying charge on any unreimbursed expenses.

In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that there were no such excess amounts at
September 30, 1997.
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997, CONTINUED

In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to account executives may be reimbursed in the subsequent
calendar year. For the period ended September 30, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.

The Distributor has informed the Fund that for the period ended September 30,
1997, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares and Class C shares of $1,110 and $216, respectively,
and received $524 in front-end sales charges from sales of the Fund's Class A
shares. The respective shareholders pay such charges which are not an expense of
the Fund.

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, 1997 aggregated
$72,283,760 and $89,079,914, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $27,928,133 and
$29,024,333, respectively.

For the year ended September 30, 1997, the Fund incurred $10,895 in brokerage
commissions with DWR for portfolio transactions executed on behalf of the Fund.

For the period May 31, 1997 through September 30, 1997, the Fund incurred
brokerage commissions of $1,140 with Morgan Stanley & Co., Inc., an affiliate of
the Manager since May 31, 1997, for portfolio transactions executed on behalf of
the Fund. At September 30, 1997 the Fund's receivable for investments sold
included unsettled trades with Morgan Stanley & Co., Inc., of $902,934.

Dean Witter Trust FSB, an affiliate of the Manager and Distributor, is the
Fund's transfer agent. At September 30, 1997, the Fund had transfer agent fees
and expenses payable of approximately $1,700.

6. FEDERAL INCOME TAX STATUS

During the year ended September 30, 1997, the Fund utilized its net capital loss
carryover of approximately $461,000.

At September 30, 1997, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales.
<PAGE>
TCW/DW BALANCED FUND
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997, CONTINUED

7. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1997+ SEPTEMBER 30, 1996
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold.............................................. 3,330 $ 45,072 -- --
Reinvestment of dividends......................... 5 64 -- --
------------ ------------ ------------ ------------
Net increase--Class A............................. 3,335 45,136 -- --
------------ ------------ ------------ ------------

CLASS B SHARES*
Sold.............................................. 17,715 242,841 -- --
Reinvestment of dividends......................... 466 6,427 -- --
Redeemed.......................................... (16,038) (219,934) -- --
------------ ------------ ------------ ------------
Net increase--Class B............................. 2,143 29,334 -- --
------------ ------------ ------------ ------------

CLASS C SHARES
Sold.............................................. 1,137,529 13,933,845 1,434,033 $ 15,701,592
Reinvestment of dividends......................... 51,366 643,934 71,704 794,910
Redeemed.......................................... (2,298,398) (28,389,248) (3,751,703) (41,041,855)
------------ ------------ ------------ ------------
Net decrease--Class C............................. (1,109,503) (13,811,469) (2,245,966) (24,545,353)
------------ ------------ ------------ ------------

CLASS D SHARES*
Sold.............................................. 734 10,016 -- --
Reinvestment of dividends......................... 3 36 -- --
------------ ------------ ------------ ------------
Net increase--Class D............................. 737 10,052 -- --
------------ ------------ ------------ ------------
Net decrease in Fund.............................. (1,103,288) $(13,726,947) (2,245,966) $(24,545,353)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

- ---------------------
+ On July 28, 1997, 398,355 shares representing $5,433,568 were
transferred to Class B.
* For the period July 28, 1997 (issue date) through September 30, 1997.

8. SUBSEQUENT EVENT

On November 6, 1997, the Board of Trustees of the Fund and of Dean Witter
Balanced Growth Fund ("Balanced Growth") approved a reorganization plan whereby
the Fund would be merged into Balanced Growth. This plan is subject to the
consent of the Fund's shareholders. If approved, the assets of the Fund would be
combined with the assets of Balanced Growth and shareholders of the Fund would
become shareholders of Balanced Growth, receiving shares of the corresponding
class of Balanced Growth equal to the value of their holdings in the Fund.
<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
OCTOBER 29,
1993*
FOR THE YEAR ENDED SEPTEMBER 30, THROUGH
--------------------------------- SEPTEMBER
1997**++ 1996 1995 30, 1994
- -----------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
CLASS C SHARES

PER SHARE OPERATING PERFORMANCE:

Net asset value, beginning of
period............................ $ 11.63 $ 10.46 $ 9.43 $ 10.00
---------- ---------- --------- ------

Net investment income.............. 0.11 0.15 0.20 0.10

Net realized and unrealized gain
(loss)............................ 2.04 1.12 0.93 (0.58)
---------- ---------- --------- ------

Total from investment operations... 2.15 1.27 1.13 (0.48)
---------- ---------- --------- ------

Less dividends:
From net investment income...... (0.10) -- (0.10) (0.09)
In excess of net investment
income.......................... -- (0.10) -- --
---------- ---------- --------- ------

Total dividends.................... (0.10) (0.10) (0.10) (0.09)
---------- ---------- --------- ------

Net asset value, end of period..... $ 13.68 $ 11.63 $ 10.46 $ 9.43
---------- ---------- --------- ------
---------- ---------- --------- ------

TOTAL INVESTMENT RETURN+........... 18.67% 12.20% 11.97% (4.80)%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 2.08% 2.14% 2.11% 2.06%(2)

Net investment income.............. 0.86% 1.12% 1.88% 1.22%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $ 88,212 $ 92,491 $ 106,716 $ 149,357

Portfolio turnover rate............ 80% 117% 123% 113%(1)

Average commission rate paid....... $ 0.0584 $ 0.0583 -- --

- ---------------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that time, other than shares which were acquired in
exchange for shares of Funds for which Dean Witter Services Company Inc.
serves as Manager and TCW Fund's Management, Inc. serves as Adviser
("TCW/DW Funds") offered with a contingent deferred sales charge ("CDSC")
and shares acquired through reinvestment of dividends and distributions
thereon, have been designated Class C shares. Shares held prior to July 28,
1997 which were acquired in exchange for shares of a TCW/DW Fund sold with
a CDSC, including shares acquired through reinvestment of dividends and
distributions thereon, have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30,
1997++
- -----------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 13.64
------
Net investment income.............. 0.03
Net realized and unrealized gain... 0.06
------
Total from investment operations... 0.09
------
Less dividends from net investment
income............................ (0.05)
------
Net asset value, end of period..... $ 13.68
------
------

TOTAL INVESTMENT RETURN+........... 0.62%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.40%(2)
Net investment income.............. 1.53%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $46
Portfolio turnover rate............ 80%
Average commission rate paid....... $ 0.0584

CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 13.64
------
Net investment income.............. 0.02
Net realized and unrealized gain... 0.05
------
Total from investment operations... 0.07
------
Less dividends from net investment
income............................ (0.03)
------
Net asset value, end of period..... $ 13.68
------
------

TOTAL INVESTMENT RETURN+........... 0.48%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 2.09%(2)
Net investment income.............. 0.75%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $5,479
Portfolio turnover rate............ 80%
Average commission rate paid....... $ 0.0584

- ---------------------
* The date shares were first issued. Shareholders who held shares prior to
July 28, 1997 (the date the fund converted to a multiple class share
structure) should refer to the Financial Highlights of Class C to obtain
the historical per share and ratio information of their shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW BALANCED FUND
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30,
1997++
- -----------------------------------------------------

<S> <C>
CLASS D SHARES

PER SHARE OPERATING PERFORMANCE:

Net asset value, beginning of
period............................ $ 13.64
------

Net investment income.............. 0.04

Net realized and unrealized gain... 0.05
------

Total from investment operations... 0.09
------

Less dividends from net investment
income............................ (0.05)
------

Net asset value, end of period..... $ 13.68
------
------

TOTAL INVESTMENT RETURN+........... 0.65%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.09%(2)

Net investment income.............. 1.75%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $10

Portfolio turnover rate............ 80%

Average commission rate paid....... $ 0.0584

- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
</TABLE>

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, 1997, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the periods presented, 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 at September 30, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.

As described in Note 8 to the financial statements, the Fund's Board of Trustees
has approved, subject to the consent of the Fund's shareholders, a
reorganization plan whereby the Fund would be merged into Dean Witter Balanced
Growth Fund.

PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
NOVEMBER 6, 1997

1997 FEDERAL TAX NOTICE

During the period ended September 30, 1997, 79.29% of the income
paid qualified 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
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

Barry Fink
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 FSB
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.

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BALANCED FUND

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ANNUAL REPORT
SEPTEMBER 30, 1997