<PAGE> 1
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST Two World Trade Center, New York,
New York 10048
LETTER TO THE SHAREHOLDERS July 31, 1998
DEAR SHAREHOLDER:
As an asset class, emerging markets underperformed the overall market during the
six-month period ended July 31, 1998. Persistent weakness of the Japanese yen
and several emerging market currencies, coupled with lower commodity prices,
dampened the outlook for most emerging market economies.
ASIA PACIFIC
Following a sharp rally in the first quarter of 1998, the Asian equity markets
went through a severe correction in the second quarter. The recessionary fallout
from the Asian currency crisis has since become apparent, with several countries
posting negative GDP growth in the first quarter. Further, the persistent
weakness of the Japanese yen reignited concerns about the Chinese government's
ability and willingness to maintain its fixed exchange rate at current levels.
Although investors were initially encouraged by the stabilization efforts of the
U.S. and Japanese governments, the yen continued to weaken.
In greater China, the summit between President Clinton and President Jiang Zemin
was successful in that it furthered diplomatic relations between the two
countries, but it failed to address adequately several key issues, including
trade disputes, China's entrance to the World Trade Organization and relations
with Taiwan. In Hong Kong, equities fell 14.4 percent as market sentiment was
hurt by slower than expected first-quarter economic growth and price wars in the
property market. Investors were also concerned about the prospects of a
devaluation in China and its potential impact on the Hong Kong dollar. Stock
prices also fell in Taiwan, Korea and India during the period.
In Southeast Asia, Filipino stock prices fell sharply during the second quarter
amid profit taking in response to indications that the government was seeking to
lower interest rates rather than strengthen the currency. In Thailand, the stock
market rallied briefly as the government
<PAGE> 2
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS July 31, 1998, continued
abandoned its two-tiered foreign exchange system, indicating a shift away from
capital controls and a return to liberalized markets. However, the market ended
the period down nearly 30 percent as a restrictive monetary policy continued to
hurt the economy. The equity markets in Malaysia and Indonesia fell 25.9 percent
and 6.8 percent, respectively, during the period.
LATIN AMERICA
The Latin American equity markets suffered moderate declines during the period
under review, due to investor concerns about the recessionary fallout from the
Asian currency crisis and the impact of lower commodity prices on current
account and fiscal deficits. Regional economic growth is now expected to slow to
around 3 percent in 1998, down from 5.2 percent in 1997. Mexican stock prices
fell 12.1 percent during this period as a sharp drop in crude oil prices
weakened the outlook for Mexican exports as well as the prospects for narrowing
the federal budget deficit. While the near-term outlook remains somewhat
uncertain, the Zedillo administration has been responding prudently to external
shocks with three separate budget cuts, which bodes well for the longer term.
Brazilian equities were volatile during the period, but ended up 6.4 percent in
U.S.-dollar terms. Investors have been concerned about data pointing toward
excessive fiscal spending. In spite of these concerns, the Brazilian central
bank was able to reduce interest rates, due to its strong international reserve
position. In Argentina, the equity market was flat during the period with
investors initially concerned that the economy might be overheating. However,
the market stabilized in June as the economy began to show signs of a soft
landing. In Chile, stock prices declined during the period as lower copper
prices and projections of a 1998 current account deficit of 6.5 percent of GDP
resulted in capital outflows requiring heavy central bank intervention in the
currency market. In order to reduce further outflows the Chilean peso was
permitted to weaken, a new foreign exchange band was set, a series of fiscal
cuts were implemented and reserve requirements on foreign currency inflows were
reduced. In Colombia, a policy of higher interest rates hurt equities, which
fell sharply during the period. In Peru, stock prices moved sideways, hurt by
the release of data indicating that El Nino's economic impact had been more
extensive and prolonged than expected.
EMERGING EUROPE, THE MIDDLE EAST AND AFRICA
The EMEA (Europe, Middle East and Africa) region as a whole was more resilient
than Asia and Latin America, because robust performances in Greece and Portugal
were able partially to offset sharp declines in Russia and South Africa. The
recent shift of investor focus from eastern Europe to the Mediterranean is
primarily due to declining interest rates and lower political risk.
2
<PAGE> 3
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS July 31, 1998, continued
The Russian equity market fell 47.7 percent in dollar terms during the period as
a sharp drop in investor confidence brought the market to the verge of a
meltdown. Investors' confidence in Russia has been eroded by continued global
market volatility, lower oil prices, regional government bond payment defaults,
and a sharp rise in domestic and external debt yields. The Russian central bank
raised the official interest rate, signaling its intention to defend the ruble.
The most immediate threat to the ruble's stability was the government's ability
to meet its maturing short-term debt obligations. Elsewhere in emerging Europe,
the Hungarian equity market rose 6.3 percent as that country's economy continued
to show signs of strengthening and the central bank cut interest rates. Polish
equities gained 17 percent, due to improvements in external account balances and
the continued decline of inflation.
In the Mediterranean and the Middle East, the Greek equity market outperformed
the entire region, gaining 96.8 percent in dollar terms. Earnings growth
expectations have risen in major segments of the Greek market as a result of
increased export profitability and lower interest rates. In Portugal, equities
gained 32.5 percent in dollar terms as the IFC announced that Portugal had
achieved "developed market" status. Turkish stock prices were flat during the
period, with investors discouraged as before by high interest rates and
political tensions early in the year. However, interest rates began to decline,
and expectations of a sharp reduction in inflation fueled a modest recovery
toward the end of the period. In Israel, the equity market rose 17.3 percent
during the period as inflation declined to a 28-year low and the Bank of Israel
cut interest rates.
PERFORMANCE AND PORTFOLIO STRATEGY
Against a difficult backdrop, the Fund's Class A shares returned -13.78 percent
during the six months ended July 31, 1998. For the same period, the Fund's Class
B, C and D shares had total returns of -14.09 percent, -14.09 percent and -13.69
percent, respectively. The performance of the Fund's four share classes varies
because of differing expenses. The Fund underperformed the IFC Investable
Emerging Markets Total Return Index and the Lipper Emerging Markets Funds Index,
which returned -6.19 percent and -8.06 percent, respectively. In January of this
year, TCW/DW Emerging Markets Opportunities Trust began operating with two
subadvisers: TCW Funds Management Inc. (TCW) and Morgan Stanley Asset Management
Inc. (MSAM). Each subadviser manages a specific portion of the Fund.
The Fund's underperformance of its benchmark indexes was partly the result of
its defensive strategy during the first quarter of 1998. In addition, Latin
America, which performed poorly, was overweighted. However, approximately 50
percent of this underperformance was recouped during the second quarter
3
<PAGE> 4
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS July 31, 1998, continued
as the Fund shifted to a neutral position in Latin America and Europe while
maintaining an underweighted position in Asia, which began to decline during the
second quarter. Also negatively affecting the Fund's performance was its
exposure to Russia, Pakistan and India, which performed poorly during the
period.
On July 31, 1998, the Fund's largest country allocations were Brazil (14.6
percent), Mexico (12 percent), South Africa (7.5 percent), Turkey (7.0 percent),
Greece (5.6 percent), Taiwan (5.6 percent), Argentina (5.3 percent), Poland (4.0
percent), Israel (3.5 percent), Hungary (3.3 percent) and India (3.9 percent).
The Trust also held smaller positions in Chile, Egypt, Russia, Colombia, the
Philippines, Korea, Portugal, Peru, Hong Kong, and China. As protection against
the increase in market volatility, the Fund also maintains a relatively high
cash position.
LOOKING AHEAD
Despite the sharp declines posted in most of the emerging markets during the
first half of 1998, the Fund remains positive about the long-term prospects for
these countries. While the near-term outlook for the Asian equity markets
remains connected with the fiscal policies of Japan, we believe that the reality
of recession and declining earnings are already reflected in the region's equity
prices. In Latin America, continued declines in commodity prices have increased
concerns about that region's ability to post solid economic growth, given the
fallout from Asia and the subsequent possibility of declining exports.
We appreciate your support of TCW/DW Emerging Markets Opportunities Trust and
look forward to continuing to serve your investment needs and objectives.
Very truly yours,
/S/ CHARLES A. FIUMEFREDDO
CHARLES A. FIUMEFREDDO
Chairman of the Board
4
<PAGE> 5
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, RIGHTS AND
WARRANTS (93.3%)
ARGENTINA (5.3%)
Banking
16,202 Banco de Galicia y Buenos
Aires S.A. de C.V. (ADR)..... $ 332,141
----------
Brewery
12,940 Quilmes Industrial S.A.
(ADR)........................ 147,192
----------
Energy
20,430 Yacimentos Petroliferos
Fiscales S.A. (ADR).......... 597,578
----------
Multi-Industry
47,947 Perez Companc S.A.
(Class B).................... 278,232
----------
Steel
96,901 Siderca S.A. (Class A)........ 185,173
----------
Telecommunications
32,220 Telecom Argentina
Stet - France Telecom S.A.
(ADR)........................ 1,143,810
41,785 Telefonica de Argentina S.A.
(ADR)........................ 1,512,095
----------
2,655,905
----------
TOTAL ARGENTINA............... 4,196,221
----------
BRAZIL (14.6%)
Banking
6,811 Uniao de Bancos Brasileiros
S.A. (GDR)................... 244,344
----------
Energy
2,606,000 Petroleo Brasileiro S.A.
(Pref.)...................... 571,442
----------
Financial Services
340,000 Itausa Investimentos Itau S.A.
(Pref.)...................... 228,050
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Food, Beverage, Tobacco, &
Household Products
7,030 Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar (ADR)................. $ 159,054
10,984 Companhia Cervejaria Brahma
(ADR)........................ 157,895
553,202 Companhia Cervejaria Brahma
(Pref.)*..................... 397,217
----------
714,166
----------
Metals
128,340 Companhia Vale do Rio Doce
S.A. (Debentures)*........... --
21,391 Companhia Vale do Rio Doce
S.A. (Pref.)................. 441,469
----------
441,469
----------
Telecommunications
1,123,076 Cia Riograndense
Telecomunicacoes S.A.
(Pref.)...................... 1,023,700
7,735,264 Telecomunicacoes
Brasileiras S.A. ............ 685,125
35,296 Telecomunicacoes Brasileiras
S.A. (ADR)................... 4,273,022
2,034,329 Telecomunicacoes Brasileiras
S.A. (Pref.)................. 246,135
3,756,020 Telecomunicacoes de Sao Paulo
S.A. (Pref.)*................ 930,236
569,000 Telerj Celular S.A. (B Shares)
(Pref.)*..................... 36,697
2,462,000 Telesp Celular S.A. (B Shares)
(Pref.)*..................... 252,996
----------
7,447,911
----------
Textiles & Apparel
684,000 Companhia de Tecidos Norte de
Minas........................ 174,691
1,458,000 Empresa Nacional de Comercio
Redito e Participacoes
S.A. ........................ 3,385
----------
178,076
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Utilities - Electric
1,140,000 Centrais Electricas
Brasileiras S.A. ............ $ 34,801
4,628,770 Centrais Electricas
Brasileiras S.A. (Pref.)..... 147,234
4,548,770 Centrais Geradoras do Sul do
Brasil S.A.*................. 8,019
40,948 Companhia Energetica de Minas
Gerais S.A. (Pref.) (ADR).... 1,396,071
3,415 Companhia Energetica de Minas
Gerais S.A. (ADR) - 144A**... 116,964
1,776,500 Companhia Energetica de Minas
Gerais S.A. (Pref.).......... 60,342
313,000 Light - Sericos de
Eletricidade S.A. ........... 102,279
----------
1,865,710
----------
TOTAL BRAZIL.................. 11,691,168
----------
CHILE (1.8%)
Beverages
21,020 Embotelladora Andina S.A.
(Series A) (ADR)............. 407,262
8,000 Vina Concha Y Toro (ADR)...... 250,000
----------
657,262
----------
Pharmaceuticals
14,000 Laboratorio Chile (ADR)....... 189,000
----------
Telecommunications
7,311 Compania de
Telecommunicaciones de Chile
S.A. (ADR)................... 161,299
----------
Utilities - Electric
11,500 Chilectra S.A.
(ADR) - 144A**............... 277,438
3,150 Empresa Nacional de
Electricidad S.A. (ADR)...... 44,100
4,555 Enersis S.A. (ADR)............ 126,971
----------
448,509
----------
TOTAL CHILE................... 1,456,070
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
CHINA (0.6%)
Electric
794,000 Beijing Datang Power
Generation Co., Ltd. ........ $ 187,511
----------
Energy
10,222 Yanzhou Coal Mining Co.
(ADR)........................ 70,915
841,000 Zhenhai Refining & Chemical
Co. (Class H)................ 79,227
----------
150,142
----------
Utilities - Electric
9,595 Huaneng Power International,
Inc. (ADR)*.................. 104,945
446,500 Zhejiang Expressway Co.
Ltd. ........................ 66,840
----------
171,785
----------
TOTAL CHINA................... 509,438
----------
COLOMBIA (1.2%)
Banking
50,229 Banco de Bogota............... 170,423
16,065 Bancolombia S.A. (ADR)........ 168,682
----------
339,105
----------
Beverages
54,801 Bavaria S.A. ................. 317,890
----------
Financial Services
60,448 Suramericana de Inversiones... 132,319
----------
Multi-Industry
54,926 Valores Bavaria S.A. ......... 94,142
----------
Retail
39,444 Almacenes Exito S.A. ......... 69,074
----------
TOTAL COLOMBIA................ 952,530
----------
EGYPT (1.5%)
Banking
23,465 Commercial International Bank
(GDR) - 144A**............... 233,477
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Building Materials
6,820 Industrial Engineering........ $ 111,807
18,350 Suez Cement Co.
(GDR) - 144A**............... 317,455
----------
429,262
----------
Chemicals
3,110 Egyptian Financial and
Industrial Co. .............. 55,447
7,050 Paints & Chemical Industries
Co. S.A.E. (GDR)............. 60,630
----------
116,077
----------
Food, Beverage, Tobacco, &
Household Products
4,000 Al-Ahram Beverages Co. S.A.E.
(GDR)........................ 155,900
5,400 Eastern Tobacco............... 103,376
----------
259,276
----------
Real Estate
1,905 Madinet NASR for Housing &
Development.................. 90,006
----------
Utilities - Electric
500 Egypt Gas Co. ................ 47,633
----------
TOTAL EGYPT................... 1,175,731
----------
GREECE (5.6%)
Banking
8,840 Alpha Credit Bank............. 891,786
3,440 National Bank of Greece
S.A. ........................ 650,826
----------
1,542,612
----------
Building & Construction
10,200 Titan Cement Co. S.A. ........ 822,012
----------
Energy
22,000 Hellenic Petroleum S.A.*...... 202,710
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Telecommunications
59,899 Hellenic Telecommunication
Organization S.A. ........... $1,674,007
2,300 STET Hellas Telecommunications
S.A. (ADR)*.................. 98,900
----------
1,772,907
----------
Transportation
15,000 Strintzis Lines............... 105,437
----------
TOTAL GREECE.................. 4,445,678
----------
HONG KONG (1.5%)
Broadcasting
134,000 South China Morning Post
(Holdings) Ltd. ............. 69,602
----------
Computers
360,000 Legend Holdings Ltd. ......... 80,836
----------
Manufacturing
55,000 Shanghai Industrial Holdings
Ltd. ........................ 89,786
----------
Multi-Industry
92,000 China Resources
Enterprise Ltd. ............. 67,080
161,400 NG Fung Hong Ltd. ............ 112,474
----------
179,554
----------
Real Estate
46,900 Sun Hung Kai Properties
Ltd. ........................ 173,704
----------
Telecommunications
248,000 China Telecom Ltd. ........... 363,247
----------
Utilities - Electric
54,500 CLP Holdings Ltd. ............ 243,348
----------
TOTAL HONG KONG............... 1,200,077
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
HUNGARY (3.3%)
Banking
2,425 OTP Bank RT (GDR)............. $ 132,162
----------
Chemicals - Specialty
4,000 Pannonplast RT................ 187,227
----------
Energy
45,150 MOL Magyar Olaj-es Gazipari RT
(GDR) - 144A**............... 1,383,847
----------
Health & Personal Care
2,594 Gedeon Richter RT
(GDR) - 144A**............... 208,168
----------
Hotels
15,316 Pannonia Hotels............... 209,410
----------
Telecommunications
29,500 Magyar Tavkozlesi RT*......... 188,955
9,880 Magyar Tavkozlesi RT (ADR).... 315,543
----------
504,498
----------
TOTAL HUNGARY................. 2,625,312
----------
INDIA (3.9%)
Automobiles
65,000 Mahindra & Mahindra Ltd.
(GDR)........................ 216,125
----------
Banking
50,400 State Bank of India (GDR)..... 554,400
----------
Chemicals
95,000 Reliance Industries Ltd.
(GDR)........................ 586,625
----------
Health & Personal Care
32,000 Ranbaxy Laboratories Ltd.
(GDR)........................ 536,000
----------
Metals
32,475 Hindalco Industries Ltd.
(GDR) - 144A**............... 435,165
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Telecommunications
14,100 Mahanagar Telephone Nigam
(GDR) - 144A**............... $ 171,315
54,750 Videsh Sanchar Nigam Ltd.
(GDR)*....................... 632,363
----------
803,678
----------
TOTAL INDIA................... 3,131,993
----------
INDONESIA (0.6%)
Building & Construction
50,000 PT Semen Gresik Tbk........... 44,039
----------
Energy
2,450 Gulf Indonesia Resources
Ltd.*........................ 23,581
----------
Paper & Forest Products
380,000 PT Indah Kiat Pulp & Paper
Corp. Tbk.................... 98,654
----------
Telecommunications
38,000 PT Telekomunikasi Indonesia
(ADR)........................ 249,375
----------
Tobacco
130,000 PT Gudang Garam Tbk........... 89,000
----------
TOTAL INDONESIA............... 504,649
----------
ISRAEL (3.5%)
Banking
240,750 Bank Hapoalim Ltd. ........... 707,777
----------
Electronic Components
5,230 Orbotech Ltd.*................ 173,897
----------
Health & Personal Care
2,425 Teva Pharmaceutical Industries
Ltd. (ADR)................... 83,511
----------
Merchandising
26,400 Supersol Ltd. (ADR)........... 432,300
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Multi-Industry
26,400 Koor Industries Ltd. (ADR).... $ 610,500
----------
Retail
19,190 Blue Square Chain Investments
& Properties Ltd.*........... 252,556
----------
Telecommunication Equipment
13,810 NICE-Systems Ltd. (ADR)*...... 532,548
----------
TOTAL ISRAEL.................. 2,793,089
----------
MALAYSIA (1.4%)
Banking
82,000 Malayan Banking Berhad........ 63,298
----------
Food, Beverage, Tobacco, &
Household Products
18,000 Nestle (Malaysia) Berhad...... 82,499
16,000 Rothmans of Pall Mall
(Malaysia) Berhad............ 112,893
----------
195,392
----------
Miscellaneous Materials &
Commodities
253,000 Golden Hope Plantations
Berhad....................... 207,502
45,000 Kuala Lumpur Kepong Berhad.... 75,443
----------
282,945
----------
Publishing
117,900 New Straits Time Press........ 35,266
----------
Telecommunications
60,000 Technology Resources
Industries Berhad............ 34,013
108,000 Telekom Malaysia Berhad*...... 168,038
----------
202,051
----------
Tourism
58,000 Genting Berhad................ 118,924
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Transportation - Shipping
53,000 Malaysian International
Shipping Berhad.............. $ 71,596
----------
Utilities - Electric
45,000 Petronas Gas Berhad........... 77,614
87,000 Tenaga Nasional Berhad........ 73,453
----------
151,067
----------
TOTAL MALAYSIA................ 1,120,539
----------
MEXICO (12.0%)
Banking
86,000 Grupo Financiero Banamex
Accival, S.A. de C.V.
(B Shares)*.................. 172,386
3,290 Grupo Financiero Bancomer,
S.A. de C.V. (ADR) - 144A**.. 21,763
42,050 Grupo Financiero Bancomer,
S.A. de C.V. (B Shares)...... 13,922
----------
208,071
----------
Broadcasting
31,396 Grupo Televisa S.A. de C.V.
(GDR)*....................... 1,106,709
4,882 TV Azteca S.A. de C.V.
(ADR)*....................... 62,245
----------
1,168,954
----------
Building Materials
55,800 Apasco S.A. de C.V. .......... 286,202
220,460 Cemex S.A. de C.V. (B
Shares)...................... 891,366
3,998 Cemex S.A. de C.V. (Class B)
(ADR)........................ 34,103
7,068 Cemex S.A. de C.V. - (CPO).... 25,860
----------
1,237,531
----------
Conglomerates
24,990 DESC S.A. de C.V. (Series
B)........................... 149,211
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Food, Beverage, Tobacco, &
Household Products
5,600 Coca-Cola Femsa S.A. (ADR).... $ 99,050
21,547 Fomento Economico Mexicano,
S.A. de C.V. (ADR)........... 667,957
167,400 Fomento Economico Mexicano,
S.A. de C.V. (UBD)........... 526,061
150,600 Grupo Industrial Bimbo S.A. de
C.V. (Series A).............. 307,623
44,100 Grupo Modelo S.A. de C.V.
(Series C)................... 396,455
9,870 Panamerican Beverages, Inc.
(Class A).................... 306,587
----------
2,303,733
----------
Health & Personal Care
249,884 Kimberly-Clark de Mexico S.A.
de C.V. (A Shares)........... 729,179
----------
Multi-Industry
63,400 Grupo Carso S.A. de C.V.
(Series A1)*................. 270,393
----------
Retail
403,519 Cifra S.A. de C.V. (Series
C)........................... 588,748
47,900 Organizacion Soriana S.A. de
C.V. (Series B).............. 155,635
----------
744,383
----------
Steel & Iron
8,250 Tubos de Acero de Mexico S.A.
de C.V. (ADR)*............... 80,953
----------
Telecommunications
53,104 Telefonos de Mexico S.A. de
C.V. (Series L) (ADR)........ 2,655,200
----------
TOTAL MEXICO.................. 9,547,608
----------
PAKISTAN (0.7%)
Banking
11 Muslim Commercial Bank Ltd. .. 3
----------
Chemicals
8,500 Fauji Fertilizer Co., Ltd.*... 7,494
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Telecommunications
12,300 Pakistan Telecomm
(GDR) - 144A**............... $ 484,835
----------
Utilities - Electric
350,000 Hub Power Co.*................ 87,834
7,000 Sui Northern Gas Pipelines*... 1,336
----------
89,170
----------
TOTAL PAKISTAN................ 581,502
----------
PERU (0.7%)
Building Materials
265,480 Cementos Lima, S.A. .......... 534,949
----------
PHILIPPINES (1.5%)
Food, Beverage, Tobacco, &
Household Products
100,000 San Miguel Corp. (Class B).... 131,265
----------
Multi-Industry
400,000 Ayala Corp. .................. 92,601
----------
Real Estate
480,000 SM Prime Holdings............. 69,881
----------
Restaurants
490,000 Jollibee Foods Co. (Warrants
due 03/25/03)*............... 157,876
----------
Telecommunications
22,800 Philippine Long Distance
Telephone Co. ............... 503,341
7,700 Philippine Long Distance
Telephone Co. (ADR).......... 170,363
----------
673,704
----------
Utilities - Electric
46,069 Manila Electric Co. (B
Shares)...................... 112,149
----------
TOTAL PHILIPPINES............. 1,237,476
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
POLAND (4.0%)
Banking
8,100 Bank Handlowy W. Warszawie.... $ 162,747
3,000 Bank Przemyslowo-Handlowy
S.A. ........................ 270,979
11,100 Bank Rozwoju Eksportu S.A.
(Receipts)................... 355,769
5,500 Bank Rozwoju Eksportu S.A. ... 176,282
12,100 BIG Bank Gdanski S.A. (GDR)... 268,015
----------
1,233,792
----------
Building & Construction
8,025 Exbud S.A. (GDR)*............. 110,998
----------
Data Processing
3,800 Prokom Software (GDR)......... 78,660
----------
Publishing
5,692 International Trading &
Investment Co. .............. 1,420,154
----------
Wholesale
27,000 Elektrim Spolka Akcyjna
S.A. ........................ 387,063
----------
TOTAL POLAND.................. 3,230,667
----------
PORTUGAL (0.7%)
Banking
5,900 Banco Espirito Santo e
Comercial de Lisboa, S.A. ... 213,427
1,917 Banco Espirito Santo e
Comercial de Lisboa, S.A.
(Baby Shares)................ 69,346
11,000 Banco Pinto & Sotto Mayor,
S.A. ........................ 250,853
11,000 Banco Pinto & Sotto Mayor,
S.A. (Rights)................ 2,088
----------
TOTAL PORTUGAL................ 535,714
----------
RUSSIA (3.5%)
Energy
17,866 Lukoil Holding Co. (ADR)...... 589,578
116,550 Surgutneftegaz (ADR).......... 699,300
----------
1,288,878
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Gas
67,000 Gazprom (ADR) - 144A**........ $ 730,300
----------
Telecommunications
35,700 Rostelecom (ADR).............. 499,800
3,635 Vimpel - Communications
(ADR)*....................... 152,670
----------
652,470
----------
Utilities - Electric
11,000 Unified Energy Systems
(BRIDGE) Certificate (ADR)... 151,250
----------
TOTAL RUSSIA.................. 2,822,898
----------
SOUTH AFRICA (7.5%)
Banking
40,000 NBS Boland Group Ltd. ........ 62,091
21,163 Nedcor Ltd. .................. 428,793
213,000 Orion Selections Holdings
Ltd. ........................ 428,088
----------
918,972
----------
Broadcasting
17,630 Primedia Ltd. (N Shares)+..... 106,587
----------
Business & Public Services
87,500 Education Investment
Corp. Ltd.+.................. 151,552
30,100 Persetel Q Data Holding
Ltd.+........................ 322,641
----------
474,193
----------
Business Services
7,265 Barlow Ltd. .................. 36,028
----------
Chemicals
12,000 Sasol Ltd. (ADR).............. 72,000
61,237 Sasol Ltd.*+.................. 382,731
----------
454,731
----------
Financial Services
6,900 ABSA Group Ltd. .............. 37,770
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Food, Beverage, Tobacco, &
Household Products
46,100 Illovo Sugar Ltd. ............ $ 48,962
31,330 Rembrandt Group Ltd. ......... 197,092
37,303 South African Breweries
Ltd.+........................ 738,746
----------
984,800
----------
Insurance
387,875 New Africa Investments Ltd. (N
Shares)...................... 456,324
----------
Life Insurance
31,700 Liberty Life Association of
Africa Ltd.+................. 577,023
----------
Merchandising
34,920 Ellerine Holdings Ltd. ....... 152,632
105,460 Woolworths Holdings Ltd. ..... 65,482
----------
218,114
----------
Metals
535,000 Iscor Ltd.*................... 123,260
----------
Metals & Mining
7,366 Anglogold Ltd. ............... 312,935
----------
Miscellaneous Materials &
Commodities
14,840 Anglo American Corporation of
South Africa Ltd. ........... 528,614
----------
Multi-Industry
15,960 Bidvest Group Ltd.+........... 127,132
296,695 New Clicks Holdings Ltd. ..... 339,357
----------
466,489
----------
Retail
147,100 Protea Furnishers Ltd. ....... 93,740
----------
Telecommunication Equipment
62,700 Allied Technologies Ltd. ..... 163,922
----------
TOTAL SOUTH AFRICA............ 5,953,502
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
SOUTH KOREA (3.2%)
Appliances & Household Durables
33,588 Samsung Electronics
(GDR) - 144A**............... $ 684,356
5,423 Samsung Electronics
Co. - 144A**................. 200,770
----------
885,126
----------
Electronic Components
600 S1 Corporation................ 77,136
----------
Housewares
3,200 Hankuk Glass Industry Co.,
Ltd. ........................ 52,856
----------
Insurance
200 Samsung Fire & Marine
Insurance.................... 50,692
----------
Metals
29,210 Pohang Iron & Steel Co., Ltd.
(ADR)........................ 1,301,021
----------
Telecommunications
24,000 Sk Telecom Co., Ltd. (ADR).... 186,000
----------
TOTAL SOUTH KOREA............. 2,552,831
----------
TAIWAN (5.6%)
Computers
12,600 Synnex Technology
International Corp. (GDR)*... 207,585
----------
Electronic Components
90,700 Asustek Computer Inc. (GDR)... 768,682
----------
Electronics & Electrical
49,080 Siliconware Precision
Industries Co. (GDR)......... 485,892
62,700 Taiwan Semiconductor
Manufacturing Co., Ltd.
(ADR)........................ 1,152,113
----------
1,638,005
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE> 13
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Insurance
58,800 Fubon Insurance Co.
(GDR) - 144A**............... $ 702,660
----------
Investment Companies
175,300 ROC Taiwan Fund............... 1,194,231
----------
TOTAL TAIWAN.................. 4,511,163
----------
THAILAND (1.1%)
Banking
120,550 Bangkok Bank PCL*............. 143,653
----------
Broadcasting
45,000 BEC World PCL................. 182,432
----------
Building Materials
35,900 Siam City Cement PCL*......... 40,354
----------
Electronics & Electrical
18,400 Delta Electronics, Inc. ...... 71,430
12,200 Shinawatra Computer PCL*...... 40,467
----------
111,897
----------
Energy
22,750 PTT Exploration &
Production PCL............... 190,049
----------
Telecommunications
42,000 Advanced Info Service PCL..... 216,708
----------
TOTAL THAILAND................ 885,093
----------
TURKEY (7.0%)
Appliances & Household Durables
1,910,000 Arcelik A.S. ................. 81,007
1,600,000 Vestel Elektronik Sanayi ve
Ticaret A.S.*................ 256,685
----------
337,692
----------
Banking
23,962,500 Akbank T.A.S. ................ 724,663
10,000,000 Turkiye Is Bankasi (C
Shares)...................... 414,900
28,500,000 Yapi Ve Kredi Bankasi A.S. ... 882,906
7,900,000 Yapi Ve Kredi Bankasi A.S. ... 244,735
----------
2,267,204
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
Electronics
26,800,000 Dogan Yayin Holdings*......... $ 355,818
1,000,000 Netas Northern Elektric
Telecomunikasyon A.S.
(Rights)*.................... 236,216
1,000,000 Netas Northern Elektric
Telekomunikasyon A.S.*....... 59,930
----------
651,964
----------
Energy
840,000 Petrol Ofisi A.S. ............ 213,756
----------
Food, Beverage, Tobacco, &
Household Products
1,725,000 Ege Biracilik Ve Malt
Sanayii A.S. ................ 238,567
760,000 Erciyas Biracilik Ve Malt
Sanayii A.S. ................ 116,319
----------
354,886
----------
Housewares
5,013,461 Trakya Cam Sanayii A.S. ...... 203,386
----------
Metals
1,355,000 Eregli Demir Ve Celik
Fabrikalari T.A.S.*.......... 202,388
----------
Property - Casualty Insurance
11,395,000 Aksigorta A.S. ............... 777,457
----------
Retail
580,400 Migros Turk T.A.S. ........... 620,749
----------
TOTAL TURKEY.................. 5,629,482
----------
UNITED KINGDOM (0.3%)
Banking
5,700 HSBC Holdings PLC............. 139,024
----------
Food, Beverage, Tobacco, &
Household Products
30,000 Coca Cola Beverages PLC*...... 91,077
----------
TOTAL UNITED KINGDOM.......... 230,101
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE> 14
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS July 31, 1998 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------
<C> <S> <C>
UNITED STATES (0.0%)
Electronics & Electrical
775 Comverse Technology, Inc.*.... $ 39,573
----------
UZBEKISTAN (0.5%)
Investment Companies
80,000 Central Asian Investment
Company Ltd. ................ 376,000
----------
VENEZUELA (0.0%)
Utilities -- Electric
49,902 C.A. la Electridad de Caracas
S.A.C.A. .................... 24,407
----------
ZIMBABWE (0.2%)
Food, Beverage, Tobacco, & Household
Products
225,000 Delta Corporation Ltd. ....... 128,906
----------
TOTAL COMMON AND PREFERRED STOCKS, RIGHTS
AND WARRANTS
(Identified Cost $86,550,542) (a).. 93.3% 74,624,367
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES........................ 6.7 5,377,501
---- ----------
NET ASSETS......................... 100.0% $80,001,868
====== ==========
</TABLE>
- ---------------------
<TABLE>
<C> <S>
ADR American Depository Receipt.
GDR Global Depository Receipt.
UBD Represents 1 B Share, 2 D-B Shares & 2 D-L
Shares.
* Non-income producing security.
** Resale is restricted to qualified institutional
investors.
+ Some or all of these securities are segregated in
connection with open forward foreign currency
contracts.
(a) The aggregate cost for federal income tax
purposes approximates identified cost. The
aggregate gross unrealized appreciation is
$4,941,507 and the aggregate gross unrealized
depreciation is $16,867,682, resulting in net
unrealized depreciation of $11,926,175.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JULY 31, 1998:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO RECEIVE FOR DATE APPRECIATION
- ---------------------------------------------------------
<S> <C> <C> <C>
TRL 96,480,000,000 $ 352,503 08/06/98 $ 3,315
$ 165,000 ZAR 915,750 09/18/98 18,567
$ 422,000 ZAR 2,341,456 09/18/98 47,590
-------
Total unrealized appreciation..............
$69,472
=======
</TABLE>
Currency Abbreviations:
ZAR South African Rand.
TRL Turkish Lira.
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE> 15
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
SUMMARY OF INVESTMENTS July 31, 1998 (unaudited)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------------------------------------
<S> <C> <C>
Appliances & Household
Durables.................... $1,222,818 1.5%
Automobiles.................. 216,125 0.3
Banking...................... 9,595,749 12.0
Beverages.................... 975,152 1.2
Brewery...................... 147,192 0.2
Broadcasting................. 1,527,575 1.9
Building & Construction...... 977,049 1.2
Building Materials........... 2,242,096 2.8
Business & Public Services... 474,193 0.6
Business Services............ 36,028 0.0
Chemicals.................... 1,164,927 1.5
Chemicals - Specialty........ 187,227 0.2
Computers.................... 288,421 0.4
Conglomerates................ 149,211 0.2
Data Processing.............. 78,660 0.1
Electric..................... 187,511 0.2
Electronic Components........ 1,019,715 1.3
Electronics.................. 651,964 0.8
Electronics & Electrical..... 1,789,475 2.2
Energy....................... 4,621,983 5.8
Financial Services........... 398,139 0.5
Food, Beverage, Tobacco &
Household Products.......... 5,163,501 6.5
Gas.......................... 730,300 0.9
Health & Personal Care....... 1,556,858 2.0
Hotels....................... 209,410 0.3
Housewares................... 256,242 0.3
Insurance.................... 1,209,676 1.5
Investment Companies......... 1,570,231 2.0
Life Insurance............... 577,023 0.7
Manufacturing................ 89,786 0.1
Merchandising................ 650,414 0.8
Metals....................... 2,503,303 3.1
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
PERCENT OF
INDUSTRY VALUE NET ASSETS
Metals & Mining.............. $ 312,935 0.4%
Miscellaneous Materials &
Commodities................. 811,559 1.0
Multi-Industry............... 1,991,911 2.5
Paper & Forest Products...... 98,654 0.1
Pharmaceuticals.............. 189,000 0.2
Property - Casualty
Insurance................... 777,457 1.0
Publishing................... 1,455,420 1.8
Real Estate.................. 333,591 0.4
Restaurants.................. 157,876 0.2
Retail....................... 1,780,502 2.3
Steel........................ 185,173 0.2
Steel & Iron................. 80,953 0.1
Telecommunication
Equipment................... 696,470 0.9
Telecommunications........... 19,029,788 23.9
Textiles & Apparel........... 178,076 0.2
Tobacco...................... 89,000 0.1
Tourism...................... 118,924 0.1
Transportation............... 105,437 0.1
Transportation - Shipping.... 71,596 0.1
Utilities - Electric......... 3,305,028 4.1
Wholesale.................... 387,063 0.5
---------- ----
$74,624,367 93.3%
========== ====
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- -------------------------------------------------------
<S> <C> <C>
Common Stocks................ $68,496,598 85.6%
Preferred Stocks............. 5,731,589 7.2
Rights....................... 238,304 0.3
Warrants..................... 157,876 0.2
---------- ----
$74,624,367 93.3%
========== ====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE> 16
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1998 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $86,550,542).............. $ 74,624,367
Unrealized appreciation on open forward
foreign currency contracts................. 69,472
Cash........................................ 5,112,087
Receivable for:
Investments sold........................ 1,036,965
Dividends............................... 119,949
Interest................................ 23,040
Shares of beneficial interest sold...... 13,508
Deferred organizational expenses............ 6,439
Prepaid expenses............................ 215,951
------------
TOTAL ASSETS............................ 81,221,778
------------
LIABILITIES:
Payable for:
Investments purchased................... 842,278
Shares of beneficial interest
repurchased............................ 75,967
Management fee.......................... 52,510
Investment advisory fee................. 35,007
Plan of distribution fee................ 17,662
Accrued expenses............................ 196,486
------------
TOTAL LIABILITIES....................... 1,219,910
------------
NET ASSETS.............................. $ 80,001,868
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................. $130,361,338
Net unrealized depreciation................. (11,862,519)
Accumulated undistributed net investment
income..................................... 12,947
Accumulated net realized loss............... (38,509,898)
------------
NET ASSETS.............................. $ 80,001,868
============
CLASS A SHARES:
Net Assets.................................. $79,683,342
Shares Outstanding (unlimited authorized,
$.01 par value)............................ 7,298,682
NET ASSET VALUE PER SHARE............... $10.92
============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.55% of net
asset value)........................... $11.53
============
CLASS B SHARES:
Net Assets.................................. $279,576
Shares Outstanding (unlimited authorized,
$.01 par value)............................ 25,699
NET ASSET VALUE PER SHARE............... $10.88
============
CLASS C SHARES:
Net Assets.................................. $30,041
Shares Outstanding (unlimited authorized,
$.01 par value)............................ 2,762
NET ASSET VALUE PER SHARE............... $10.88
============
CLASS D SHARES:
Net Assets.................................. $8,909
Shares Outstanding (unlimited authorized,
$.01 par value)............................ 815
NET ASSET VALUE PER SHARE............... $10.93
============
</TABLE>
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended July 31, 1998
(unaudited)
NET INVESTMENT INCOME:
INCOME
Dividends (net of $71,247 foreign
withholding tax)........................ $ 1,166,961
Interest................................. 184,302
------------
TOTAL INCOME......................... 1,351,263
------------
EXPENSES
Management fee........................... 409,544
Investment advisory fee.................. 273,029
Custodian fees........................... 188,105
Transfer agent fees and expenses......... 168,748
Plan of distribution fee (Class A
shares)................................. 136,309
Plan of distribution fee (Class B
shares)................................. 655
Plan of distribution fee (Class C
shares)................................. 117
Professional fees........................ 102,066
Registration fees........................ 67,396
Shareholder reports and notices.......... 51,729
Foreign exchange provisional tax......... 40,830
Trustees' fees and expenses.............. 14,381
Organizational expenses.................. 4,977
Other.................................... 9,231
------------
TOTAL EXPENSES....................... 1,467,117
------------
NET INVESTMENT LOSS.................. (115,854)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments.......................... (219,202)
Foreign exchange transactions........ (430,181)
------------
NET LOSS............................. (649,383)
------------
Net change in unrealized
appreciation/depreciation on:
Investments.......................... (11,260,517)
Translation of forward foreign
currency contracts, other assets and
liabilities denominated in foreign
currencies.......................... 430,088
------------
NET DEPRECIATION..................... (10,830,429)
------------
NET LOSS............................. (11,479,812)
------------
NET DECREASE............................. $(11,595,666)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE> 17
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JULY 31, ENDED
1998 JANUARY 31, 1998*
<CAPTION>
- ---------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)......................... $ (115,854) $ 2,016,172
Net realized gain (loss)............................. (649,383) 14,419,055
Net change in unrealized depreciation................ (10,830,429) (56,929,504)
------------ ------------
NET DECREASE..................................... (11,595,666) (40,494,277)
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM
NET INVESTMENT INCOME:
Class A shares....................................... (347,671) (3,126,315)
Class B shares....................................... (795) --
Class C shares....................................... (87) --
Class D shares....................................... (38) --
------------ ------------
TOTAL DIVIDENDS.................................. (348,591) (3,126,315)
------------ ------------
Net decrease from transactions in shares of
beneficial interest................................. (77,362,296) (92,378,521)
------------ ------------
NET DECREASE..................................... (89,306,553) (135,999,113)
NET ASSETS:
Beginning of period.................................. 169,308,421 305,307,534
------------ ------------
END OF PERIOD
(Including undistributed net investment income of
$12,947 and $477,392, respectively).............. $80,001,868 $169,308,421
============ ============
</TABLE>
- ---------------------
* Class B, Class C and Class D shares were issued January 26, 1998.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE> 18
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
TCW/DW Emerging Markets Opportunities Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Fund's investment objective is to seek
capital appreciation through investment in equity securities of emerging market
countries. The Fund was organized as a Massachusetts business trust on December
22, 1993 and commenced operations as a closed-end management investment company
on March 30, 1994. On January 26, 1998 the Fund converted to an open-end
management investment company and commenced offering four classes of shares with
the then current shares designated as Class A 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 or 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 not readily available, including circumstances under which it is
determined by TCW Funds Management, Inc. ("TCW") or Morgan Stanley Asset
Management Inc. ("MSAM"), an affiliate of Morgan Stanley Dean Witter Services
Company Inc. (the "Manager"), (collectively, the "Co-Advisers"), that sale or
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
18
<PAGE> 19
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited) continued
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 of the Fund's 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 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 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. 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. 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 foreign currency
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.
19
<PAGE> 20
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited) continued
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts as a hedge against fluctuations in foreign exchange rates.
Forward contracts 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.
F. 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.
G. 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.
H. ORGANIZATIONAL EXPENSES -- Morgan Stanley Dean Witter Advisors Inc., formerly
Dean Witter InterCapital Inc., an affiliate of the Manager, paid the
organizational expenses of the Fund in the amount of approximately $50,000 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,
calculated daily and payable monthly, by applying the annual rate of 0.75% to
the Fund's daily net assets.
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
20
<PAGE> 21
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited) continued
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 a Co-Investment Advisory Agreement with the Co-Advisers, the Fund
pays the Co-Advisers collectively an advisory fee, calculated daily and payable
monthly, by applying the annual rate of 0.50% to the Fund's daily net assets.
TCW has in turn entered into further sub-advisory agreements with two of its
affiliates, TCW Asia Limited, a Hong-Kong corporation, and TCW London
International, Limited, a California corporation (the "Sub-Advisers"), pursuant
to which the Sub-Advisers assist TCW in providing services under its Co-Advisory
Agreement.
Under the terms of the Co-Investment Advisory Agreement, the Fund has retained
the Co-Advisers to invest the Fund's assets, including placing orders for the
purchase and sale of portfolio securities. The Co-Advisers obtain and evaluate
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 Co-Advisers pay the salaries of all personnel, including officers
of the Fund, who are employees of the Co-Advisers.
For the six months ended July 31, 1998, TCW and MSAM received $138,639 and
$134,390, respectively, in advisory fees.
4. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley 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 -- up to 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 -- up to 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
21
<PAGE> 22
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited) continued
payment of commissions for sales of these Classes and incentive compensation to,
and expenses of, Morgan Stanley Dean Witter Financial Advisors, 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 Dean Witter Reynolds Inc. ("DWR"), an affiliate of the Manager and
Distributor, 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 such excess amounts, including
carrying charges, totaled $114,701 at July 31, 1998.
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 Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended July 31, 1998, 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 six months ended July 31,
1998, it received $5,348 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.
22
<PAGE> 23
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited) continued
5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended July 31, 1998 aggregated
$58,796,356 and $113,772,276, respectively.
For the six months ended July 31, 1998, the Fund incurred brokerage commissions
with Morgan Stanley & Co., Inc., an affiliate of the Manager, in the amount of
$13,529.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent.
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 1998 JANUARY 31, 1998*
------------------------- -------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold........................................................ 24,083 $ 315,155 -- --
Reinvestment of dividends................................... 19,069 203,087 -- --
Redeemed.................................................... (6,057,000) (78,182,957) (7,451,203) $(92,433,846)
---------- ------------ ---------- ------------
Net decrease - Class A...................................... (6,013,848) (77,664,715) (7,451,203) (92,433,846)
---------- ------------ ---------- ------------
CLASS B SHARES
Sold........................................................ 28,124 346,915 2,766 34,325
Reinvestment of dividends................................... 73 775 -- --
Redeemed.................................................... (5,264) (68,121) -- --
---------- ------------ ---------- ------------
Net increase - Class B...................................... 22,933 279,569 2,766 34,325
---------- ------------ ---------- ------------
CLASS C SHARES
Sold........................................................ 1,863 22,713 891 11,000
Reinvestment of dividends................................... 8 86 -- --
---------- ------------ ---------- ------------
Net increase - Class C...................................... 1,871 22,799 891 11,000
---------- ------------ ---------- ------------
CLASS D SHARES
Sold........................................................ 1 13 810 10,000
Reinvestment of dividends................................... 4 38 -- --
---------- ------------ ---------- ------------
Net increase - Class D...................................... 5 51 810 10,000
---------- ------------ ---------- ------------
Net decrease in Fund........................................ (5,989,039) $(77,362,296) (7,446,736) $(92,378,521)
========== ============ ========== ============
</TABLE>
- ---------------------
* For Class A, C, and D, for the period January 26, 1998 (issue date) through
January 31, 1998.
23
<PAGE> 24
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1998 (unaudited) continued
7. FEDERAL INCOME TAX STATUS
At January 31, 1998, the Fund had a net capital loss carryover of approximately
$29,379,000 of which $21,279,000 will be available through January 31, 2004 and
$8,100,000 will be available through January 31, 2005 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 $7,934,000 and $378,000,
respectively, during fiscal 1998.
As of January 31, 1998, the Fund had temporary book/tax differences primarily
attributable to post-October losses, capital loss deferrals on wash sales,
income from the mark-to-market of passive foreign investment companies and
mark-to-market of open foreign currency exchange contracts.
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 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.
At July 31, 1998, the Fund had outstanding forward contracts to facilitate
settlements of foreign currency denominated portfolio transactions and forward
contracts used to manage foreign currency exposure.
At July 31, 1998, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.
24
<PAGE> 25
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
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 SIX FOR THE YEAR ENDED JANUARY 31, MARCH 30, 1994*
MONTHS ENDED ------------------------------ THROUGH
JULY 31, 1998++ 1998**++ 1997 1996 JANUARY 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................... $12.71 $14.70 $13.07 $11.18 $14.02
------ ------ ------ ------ ------
Net investment income (loss)............................. (0.01) 0.10 0.02 0.04 0.11
Net realized and unrealized gain (loss).................. (1.73) (1.94) 1.65 1.73 (2.89)
------ ------ ------ ------ ------
Total from investment operations......................... (1.74) (1.84) 1.67 1.77 (2.78)
------ ------ ------ ------ ------
Offering costs charged against capital................... -- -- -- -- (0.02)
------ ------ ------ ------ ------
Less dividends and distributions from:
Net investment income................................... (0.05) (0.15) (0.05) (0.02) (0.09)
Net realized gain....................................... -- -- -- -- (0.01)
------ ------ ------ ------ ------
Total dividends and distributions........................ (0.05) (0.15) (0.05) (0.02) (0.10)
------ ------ ------ ------ ------
Anti-dilutive effect of acquiring treasury shares........ -- -- 0.01 0.14 0.06
------ ------ ------ ------ ------
Net asset value, end of period........................... $10.92 $12.71 $14.70 $13.07 $11.18
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN+................................. (13.78)%(1) (12.43)% 13.03% 17.04% (19.47)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................. 2.69%(2) 1.67% 1.72% 1.69% 1.73%(2)
Net investment income (loss)............................. (0.21)%(2) 0.64% 0.12% 0.28% 0.94%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................. $79,683 $169,252 $305,308 $273,172 $254,358
Portfolio turnover rate.................................. 57%(1) 85% 66% 66% 61%(1)
</TABLE>
- ---------------------
* Commencement of operations.
** Prior to January 26, 1998, the Fund operated as a closed-end management
investment company and was solely advised by TCW Funds Management, Inc.
Shares of the Fund existing at the time of its conversion to an open-end
management investment company have been designated as Class A 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.
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE> 26
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JANUARY 26, 1998*
MONTHS ENDED THROUGH
JULY 31, 1998++ JANUARY 31, 1998++
- -----------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................ $12.71 $12.34
------ ------
Net investment loss......................................... (0.03) --
Net realized and unrealized gain (loss)..................... (1.75) 0.37
------ ------
Total from investment operations............................ (1.78) 0.37
------ ------
Less dividends from net investment income................... (0.05) --
------ ------
Net asset value, end of period.............................. $10.88 $12.71
====== ======
TOTAL INVESTMENT RETURN+.................................... (14.09)%(1) 3.08%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 3.60%(2) 3.18%(2)
Net investment loss......................................... (0.56)%(2) (2.77)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $280 $35
Portfolio turnover rate..................................... 57%(1) 85%
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................ $12.71 $12.34
------ ------
Net investment loss......................................... (0.06) --
Net realized and unrealized gain (loss)..................... (1.72) 0.37
------ ------
Total from investment operations............................ (1.78) 0.37
------ ------
Less dividends from net investment income................... (0.05) --
------ ------
Net asset value, end of period.............................. $10.88 $12.71
====== ======
TOTAL INVESTMENT RETURN+.................................... (14.09)%(1) 3.08%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 3.50%(2) 3.07%(2)
Net investment loss......................................... (0.89)%(2) (2.85)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $30 $11
Portfolio turnover rate..................................... 57%(1) 85%
</TABLE>
- ---------------------
* The date shares were first issued.
++ 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.
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE> 27
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JANUARY 26, 1998*
MONTHS ENDED THROUGH
JULY 31, 1998++ JANUARY 31, 1998++
- -----------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................ $12.72 $12.34
------ ------
Net investment income....................................... 0.01 --
Net realized and unrealized gain (loss)..................... (1.75) 0.38
------ ------
Total from investment operations............................ (1.74) 0.38
------ ------
Less dividends from net investment income................... (0.05) --
------ ------
Net asset value, end of period.............................. $10.93 $12.72
====== ======
TOTAL INVESTMENT RETURN+.................................... (13.69)%(1) 3.08%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.48%(2) 2.07%(2)
Net investment income (loss)................................ 0.11%(2) (1.60)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $9 $10
Portfolio turnover rate..................................... 57%(1) 85%
</TABLE>
- ---------------------
* 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.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE> 28
[TCW/DW LOGO]
EMERGING
MARKETS
OPPORTUNITIES
TRUST
[GRAPHIC]
SEMIANNUAL REPORT
JULY 31, 1998
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
Shaun C.K. Chan
Vice President
Michael P. Reilly
Vice President
Terence F. Mahony
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
Morgan Stanley Dean Witter Services Company Inc.
CO-ADVISERS
TCW Funds Management, Inc.
Morgan Stanley Asset Management Inc.
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
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.
