<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST Two World Trade Center, New York,
LETTER TO THE SHAREHOLDERS January 31, 1998 New York 10048
Dear Shareholder:
On July 22, 1997, shareholders of TCW/DW Emerging Markets Opportunities Trust
approved the conversion of the Fund from a closed-end to an open-end
investment company, effective January 26, 1998. Later, at a special meeting
of shareholders on January 12, 1998, new co-investment advisory agreements
between the Fund and TCW Funds Management, Inc. (TCW), and Morgan Stanley
Asset Management Inc. (MSAM) were approved.
Also on January 26, 1998, the Fund began offering four classes of shares, A,
B, C and D, each with its own sales charge and distribution fee structure.
Existing shares of the Fund were designated Class A shares. At that time, a
revised prospectus, which includes complete details regarding the Fund's
conversion to multiple classes of shares, was mailed to shareholders.
Performance
Under difficult investing conditions, the Fund's Class A shares registered a
total return of -12.43 percent for the fiscal year ended January 31, 1998,
versus -25.61 percent for the International Finance Corporation (IFC)
Investable Emerging Markets Total Return Index and -22.39 percent for the
Lipper Analytical Services, Inc. Emerging Markets Funds Index.
The accompanying chart illustrates the performance of a $10,000 investment in
the Fund's Class A shares from its inception on March 30, 1994, through the
fiscal year ended January 31, 1998, versus the performance of similar
hypothetical investments in the issues comprising the International Finance
Corporation (IFC) Investable Emerging Markets Total Return Index and the
Lipper Emerging Markets Funds Index.
As an asset class, emerging-market equities declined over the past 12 months
as a result of the spillover effect of the currency crisis in Asia into other
regions. The Fund's outperformance of its benchmark indexes is primarily
attributable to its significantly underweighted position in Asian securities,
while maintaining an overweighted position in Latin America and emerging
markets in Europe.
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS, continued
Sectors
Latin America
#############################################################################
GRAPHIC OMITTED
#############################################################################
The Latin American equity markets, which represented over 45 percent of the
Fund's total assets on January 31, 1998, began the year on a strong note as
robust corporate earnings growth and attractive valuations prompted strong
capital inflows to the region. However, the region's markets suffered
moderate declines in the second half of 1997 as stock prices were hurt by the
global trend of capital flight to safety witnessed in the wake of the Asian
currency crisis.
Mexican equities outperformed those of the entire region, gaining 15.9
percent for the 12 months ended January 31, 1998. This market was driven by
the continued improvement of the country's macroeconomic environment,
including strong economic growth and a recovery in consumer spending, while
inflation continued its gradual decline. Stock prices fell sharply in January
as continued turmoil in the Southeast Asian equity markets and fears of a
spillover effect on Mexico's foreign trade prospects led to a 5 percent
depreciation of the peso relative to the U.S. dollar. Furthermore, a sharp
drop in crude oil prices dampened the outlook for Mexican exports as well as
prospects for narrowing the federal budget deficit.
Brazilian equities performed particularly well during the first half of the
fiscal year, rising 56 percent in U.S. dollar terms. TCW attributes this
strength to continued progress on political and economic reform, with
virtually all of the country's large, state-owned companies in the process of
privatization or deregulation. Later in the year, however, the Fund took
profits and reduced its exposure to Brazil as the currency crisis in Asia --
and particularly the ensuing capital flight-to-quality - put into question
the sustainability of financing Brazil's current-account deficit. The
Brazilian
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS, continued
central bank abruptly raised interest rates in October to stave off currency
speculation. Although this hike in interest rates prompted analysts to revise
downward their 1998 economic growth forecasts, there is hope that interest
rates can be reduced early in 1998. Brazilian stocks provided a return of
13.6 percent for the 12-month period ended January 31, 1998.
Argentine stock prices rose 28.3 percent during the Fund's fiscal year as the
country's economy continued to show signs of strong growth. Preliminary
figures indicate that economic growth in 1997 rose to 8.4 percent, and the
fiscal deficit has improved to about 1.4 percent of gross domestic product
(GDP).
Chilean equities underperformed those of the entire region, rising only 9.1
percent in U.S. dollar terms over the past 12 months. A decline in copper
prices resulted in both a significant deterioration of the country's trade
deficit in late 1997 and poor prospects for the trade deficit in 1998. This
in turn weakened the peso vis-|f2-vis the U.S. dollar in the latter part of
1997. The Chilean central bank raised interest rates in January in an attempt
to moderate domestic demand and to lower inflation. Nevertheless, real GDP
growth of approximately 5 percent is expected in 1998.
Asia Pacific
Most of the Asian equity markets fell sharply during the fiscal year as the
region's currencies weakened in the wake of the devaluation of the Thai baht
on July 2. As the currency weakness spread to the Philippines, Indonesia and
Malaysia, investors became concerned about the region's policy responses to
the transition from fixed or managed exchange rates to floating rates. The
currency turmoil in Southeast Asia quickly spread northeast. At this time
investors were particularly discouraged when the central bank in Taiwan
yielded to market pressure in choosing to no longer support the new Taiwan
dollar. This move exacerbated concern about the Hong Kong government's
ability to maintain its own currency peg. As a result, the Hong Kong stock
market witnessed one of its worst corrections ever. Although the markets in
Greater China were able to restabilize themselves somewhat toward the end of
the year, other markets in the region were subjected to further selling
pressure as Moody's downgraded its credit ratings of South Korea, Indonesia
and Thailand to below investment grade.
The Hong Kong equity market fell 30.4 percent during the 12 months ended
January 31, 1998, despite experiencing record highs after the successful
handover of sovereignty on July 1. Sharp declines were witnessed in October
following Taiwan's decision to abandon its managed exchange-rate system.
Although the Hong Kong Monetary Authority was able to stabilize the local
market and reduce interest rates, the deepening financial crisis throughout
the region led to an increase in Hong Kong's risk premium. Investors were
also concerned about export growth in China as a deterioration in exports
increased speculation that China could devalue its currency in 1998.
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS, continued
Equities in Taiwan fell 9.6 percent over the course of the Fund's fiscal
year. Since the onset of the currency crisis, that country's government has
spent approximately $7 billion of its $90 billion in foreign exchange
reserves in an effort to counter currency speculation before ultimately
allowing the currency to float with market forces. At the end of the Fund's
fiscal year, Taiwan's currency was 18.6 percent weaker than the previous
year.
Indian equities fell 11.6 percent over the past 12 months, primarily on
intense political friction throughout the year. Investors were initially
encouraged by a pro-business budget for fiscal 1998, which included
reductions in corporate and personal income taxes. However, political tension
peaked in the fourth quarter of 1997 when Parliament was suspended as members
of the DMK party in the United Front Coalition were implicated in the 1991
assassination of Rajiv Gandhi. The Fund remains overweighted in India
relative to the IFC Investable Emerging Markets Total Return Index on
expectations that the new government will maintain the country's economic
reform and deregulation programs, albeit at a slower pace.
During the fiscal year the Fund shifted to an underweighted position relative
to the IFC Investable Emerging Markets Total Return Index in the Philippines,
which fell 63.9 percent over the past 12 months. The peso weakened 36.6
percent on disappointing corporate earnings and tight domestic liquidity.
Over the course of the fiscal year the Fund exited the Korean, Thai,
Malaysian and Indonesian equity markets. Korean stocks declined 53.1 percent
during the fiscal year as investors focused on the country's high external
debt figures, widespread bankruptcies and concern over nonperforming loans in
the banking sector. The Fund then reentered the Korean stock market in
January on signs that the government appeared willing to implement the
structural changes recommended by the IMF. A position in Thai equities was
also reestablished as interest rates continued to climb and money supply
remained tight in an effort to pay off the country's maturing debt. After
falling 75.5 percent in 1997, Thai stock prices rallied in January as the
government abandoned its two-tiered foreign exchange system, indicating a
shift away from capital controls and a return to liberalized markets.
The Fund has maintained a zero allocation to Indonesian equities, which fell
86.6 percent during the past 12 months on concerns about the high level of
private external debt and heightened political tensions. Malaysian equities
fell 73.3 percent during the same period as investors remained apprehensive
about the asset quality of banks and securities companies. High interest
rates have already begun to take their toll on economic growth there and
corporate earnings have been much worse than expected.
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS, continued
Europe and Other Emerging Markets
Global developments and liquidity issues set the tone for the emerging
European equity markets during 1997. In general, the medium-term fundamentals
of the EMEA (Europe, Middle East, Africa) region remain solid. In the
short-term, however, the region's equity markets are likely to remain
vulnerable to global developments.
Turkish equities fell 8.3 percent as political friction led to steep declines
early in 1997. The market staged a modest recovery later in the year in
anticipation of the new government's willingness to actively address such
economic problems as lowering inflation, accelerating privatization and
expanding structural reform. Polish equities fell 23.4 percent as negative
external factors overshadowed positive fiscal developments and inflation
continued to decline. Hungarian equities increased 11.1 percent over the
Fund's fiscal year on solid corporate earnings momentum and steady
macroeconomic progress, particularly lower inflation and strong export-led
growth. The Russian equity market began the year on a strong note, driven by
positive fundamental developments and a renewed surge of capital inflows.
However, stock prices were hit hard by the turmoil in the global markets,
given Russia's high dependence on international liquidity. Over the course of
the fiscal year, Russian equities gained 6.9 percent in U.S. dollar terms.
The South African equity market fell 9.3 percent during the fiscal year ended
January 31, 1998 as investors were discouraged by the central bank's
reluctance to lower interest rates. Despite the long-awaited rate cut from 17
percent to 16 percent on October 17, money supply remains excessive and TCW
does not anticipate any further cuts in interest rates in the near term.
Sentiment was also negatively affected by the turmoil in Asia, as the
currency devaluations there will put downward pressure on South African
commodity export prices. Overall, the economy there remains very weak, which
does not bode well for corporate earnings.
The Portfolio
As of January 31, 1998, approximately 45.6 percent of the Fund's net assets
were invested in Latin America, 20.3 percent in Asia, 13.0 percent in Europe
and 4.4 percent in Africa and the Middle East. The greatest individual
country exposure was to Mexico (15.2 percent of net assets), Brazil (14.3
percent), India (7.0 percent), Argentina (5.7 percent), Taiwan (5.0 percent),
Turkey (4.2 percent), Venezuela (4.0 percent), and Chile (3.3 percent).
Smaller positions were held in Russia (3.3 percent), South Africa (3.2
percent), South Korea (3.1 percent), Poland (2.9 percent), Hungary (2.4
percent), Thailand (1.8 percent), Colombia (1.7 percent), Peru (1.5 percent),
the Philippines (1.5 percent), Egypt (1.2 percent), Hong Kong (0.8 percent)
and China (0.6 percent). At the end of January, the Fund held a cash position
of 18.7 percent of net assets.
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
LETTER TO THE SHAREHOLDERS, continued
Going Forward
Despite significant weakness in the emerging equity markets during the latter
half of the Fund's fiscal year, TCW remains optimistic about the medium-term
prospects for stronger economic growth and earnings momentum. Although the
potential for further turmoil in the Asian equity markets and a
disinflationary slowdown in the industrialized economies exists, economic
growth in Latin America is being driven by demographics, productivity gains
and private-sector inflows of cash. TCW believes that the fundamentals in
emerging Europe also remain relatively solid, since interest rates and
inflation are expected to continue their downward trends. Most governments in
Asia are now beginning to acknowledge the need for economic reform and seem
prepared to address such difficult issues as the much-needed reform of the
region's banking and financial institutions.
MSAM has positioned its portion of the Fund's portfolio for a potential
rebound in Asian markets. In the coming weeks MSAM anticipates adding to
positions in markets where good quality names have been oversold in the
aftermath of the currency crisis. In Latin America MSAM is optimistic
regarding Brazil and is overweighted in that market, but has been a net
seller in Mexico as the continuation of a consumer-led recovery has been
largely discounted in the market and fundamental trade balance deterioration
has occurred with the recent drop in oil prices. Finally, according to MSAM,
forward progress on reform and market restructuring in emerging Europe and
India seem to have stalled. In recent weeks MSAM has viewed these markets as
a source of cash to fund purchases in Asia. Longer term, MSAM remains
positive regarding Russia, Turkey and the Indian sub-continent.
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
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
RESULTS OF SPECIAL MEETING
* * *
On January 12, 1998, a special meeting of the Fund's shareholders was held
for the purpose of voting on four separate matters, the results of which were
as follows:
(1) APPROVAL OF A NEW CO-INVESTMENT ADVISORY AGREEMENT BETWEEN THE FUND AND
TCW FUNDS MANAGEMENT, INC.:
<TABLE>
<CAPTION>
<S> <C>
For .............................. 13,258,848
Against ......................... 1,809,517
Abstain ......................... 405,691
</TABLE>
(2) APPROVAL OF A NEW CO-INVESTMENT ADVISORY AGREEMENT BETWEEN THE FUND AND
MORGAN STANLEY ASSET MANAGEMENT INC.:
<TABLE>
<CAPTION>
<S> <C>
For ............................... 13,255,921
Against .......................... 1,808,397
Abstain .......................... 409,738
</TABLE>
(3) APPROVAL OF A NEW SUB-ADVISORY AGREEMENT BETWEEN TCW FUNDS MANAGEMENT,
INC. AND TCW LONDON INTERNATIONAL, LIMITED:
<TABLE>
<CAPTION>
<S> <C>
For ............................... 13,193,107
Against .......................... 1,841,439
Abstain .......................... 439,510
</TABLE>
(4) APPROVAL OF A NEW SUB-ADVISORY AGREEMENT BETWEEN TCW FUNDS MANAGEMENT,
INC. AND TCW ASIA LIMITED:
<TABLE>
<CAPTION>
<S> <C>
For ............................... 13,134,094
Against .......................... 1,880,807
Abstain .......................... 459,155
</TABLE>
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS January 31, 1998
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------ --------------
COMMON AND PREFERRED STOCKS
<S> <C> <C>
AND CONVERTIBLE BONDS (83.3%)
ARGENTINA (5.7%)
Banking
25,402 Banco de Galicia y Buenos Aires S.A. de C.V. (ADR) ............. $ 557,256
--------------
Brewery
48,040 Quilmes Industrial S.A. (ADR) .................................. 603,502
--------------
Investment Companies
191,488 CEI Citicorp Holdings S.A. ..................................... 747,080
--------------
Multi-Industry
133,147 Perez Companc S.A. (Class B) ................................... 875,100
--------------
Oil & Gas
101,090 Yacimentos Petroliferos Fiscales S.A. (ADR) .................... 3,076,927
--------------
Steel
212,901 Siderca S.A. (Class A) ......................................... 485,594
--------------
Telecommunications
25,820 Telecom Argentina Stet -France Telecom S.A. (ADR) .............. 810,102
72,030 Telefonica de Argentina S.A. (ADR) ............................. 2,494,039
--------------
3,304,141
--------------
TOTAL ARGENTINA ................................................ 9,649,600
--------------
BRAZIL (14.3%)
Banking
110,000 Banco Itau S.A. (Pref.) ........................................ 60,045
13,260 Uniao de Bancos Brasileiros S.A. (GDR) ......................... 397,800
--------------
457,845
--------------
Brewery
13,360 Companhia Cervejaria Brahma (ADR) .............................. 186,205
1,718,202 Companhia Cervejaria Brahma (Pref.) + .......................... 1,178,108
--------------
1,364,313
--------------
Electric
40,630 Companhia Paranaense de Energia -Copel (ADR) + ................. 487,560
1,458,000 Empresa Nacional de Comercio Redito e Participacoes S.A. ....... 4,739
--------------
492,299
--------------
Financial Services
1,145,000 Itausa Investimentos Itau S.A. (Pref.) + ....................... $ 713,713
--------------
Metals & Mining
128,340 Companhia Vale do Rio Doce S.A. (Debentures) ................... --
71,140 Companhia Vale do Rio Doce S.A. (Pref.) + ...................... 1,374,655
--------------
1,374,655
--------------
Oil & Gas
9,562,000 Petroleo Brasileiro S.A. (Pref.) + ............................. 2,043,526
--------------
Telecommunications
235,106 CIA Riograndense Telecomunicacoes S.A. + ....................... 243,899
58,050 Telecomunicacoes Brasileiras S.A. (ADR) + ...................... 6,443,550
23,973,593 Telecomunicacoes Brasileiras S.A. (Pref.) + .................... 2,625,781
Telecomunicacoes Brasileiras
17,015,000 S.A. + ......................................................... 1,560,592
3,064,994 Telecomunicacoes de Sao Paulo S.A. (Pref.) + ................... 887,047
--------------
11,760,869
--------------
<PAGE>
Utilities
2,151,000 Companhia de Saneamento Basico do Estado de Sao Paulo + ........ 415,643
--------------
Utilities -Electric
6,342,830 Centrais Electricas Brasileiras S.A. + ......................... 273,933
17,138,770 Centrais Electricas Brasileiras S.A. (Pref.) + ................. 770,711
88,800 Companhia Energetica de Minas Gerais S.A. (Pref.)(ADR) + ....... 3,474,300
2,791 Companhia Energetica de Minas Gerais S.A. (ADR) -144A** ........ 109,198
9,977,342 Companhia Energetica de Minas Gerais S.A. (Pref.) .............. 394,474
2,698,800 Light Participacoes S.A. + ..................................... 504,673
--------------
5,527,289
--------------
TOTAL BRAZIL ................................................... 24,150,152
--------------
CHILE (3.3%)
Food, Beverage, Tobacco, &
Household Products
81,820 Embotelladora Andina S.A. (Series A)(ADR) ...................... 1,636,400
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS January 31, 1998, continued
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------ --------------
18,300 Embotelladora Andina S.A. (Series B)(ADR) ...................... $ 322,537
19,300 Vina Concha Y Toro (ADR) ....................................... 559,700
--------------
2,518,637
--------------
Investment Companies
18,615 Genesis Chile Fund Ltd. ........................................ 607,314
--------------
Telecommunications
31,304 Compania de Telecommunicaciones de Chile S.A. (ADR) ............ 753,253
--------------
Utilities -Electric
19,500 Chilectra S.A. (ADR) -144A** ................................... 470,438
48,410 Enersis S.A. (ADR) ............................................. 1,279,839
--------------
1,750,277
--------------
TOTAL CHILE .................................................... 5,629,481
--------------
CHINA (0.6%)
Air Transport
1,963,000 China Southern Airlines Co., Ltd. (Class H) .................... 324,924
--------------
Machinery
1,040,000 First Tractor Co., Ltd. (Class H) .............................. 379,930
--------------
Oil Refineries
1,391,000 Zhenhai Refining & Chemical Co. (Class H) ...................... 373,248
--------------
TOTAL CHINA .................................................... 1,078,102
--------------
COLOMBIA (1.7%)
Banking
80,250 Banco de Bogota ................................................ 370,472
31,365 Banco Industrial Colombiano S.A. (ADR) ......................... 374,420
--------------
744,892
--------------
Financial Services
38,912 Compania Suramericana de Seguros S.A. .......................... 623,032
--------------
Food & Beverages
97,701 Bavaria S.A. ................................................... 662,108
195,701 Valores Bavaria S.A. ........................................... 801,721
--------------
1,463,829
--------------
Retail
45,000 Almacenes Exito S.A. ........................................... 123,995
--------------
TOTAL COLOMBIA ................................................. 2,955,748
--------------
EGYPT (1.2%)
Banking
65,200 Commercial International Bank (GDR)* -144A** ................... $1,164,635
18,000 MISR International Bank S.A.E. (GDR)* -144A** .................. 227,250
--------------
1,391,885
--------------
Manufacturing
34,600 Suez Cement Co. (GDR) -144A** ................................... 628,422
--------------
TOTAL EGYPT .................................................... 2,020,307
--------------
HONG KONG (0.8%)
Electric
1,595,000 Beijing Datang Power Generation Co., Ltd. ...................... 758,002
--------------
Telecommunications
468,000 China Telecom Ltd. ............................................. 662,692
--------------
TOTAL HONG KONG ................................................ 1,420,694
--------------
<PAGE>
HUNGARY (2.4%)
Hotels
15,316 Pannonia Hotels ................................................ 217,118
--------------
Oil -Exploration & Production
79,050 MOL Magyar Olaj-es Gazipari RT (GDR) -144A** ................... 1,916,962
--------------
Pharmaceuticals
3,397 EGIS RT ........................................................ 195,887
7,789 Gedeon Richter RT (GDR)* -144A** ............................... 753,586
--------------
949,473
--------------
Telecommunications
147,500 Magyar Tavkozlesi RT ........................................... 696,035
12,850 Magyar Tavkozlesi RT (ADR) ..................................... 301,975
--------------
998,010
--------------
TOTAL HUNGARY .................................................. 4,081,563
--------------
INDIA (7.0%)
Banking
115,800 State Bank of India (GDR) ...................................... 1,765,950
--------------
Diversified Manufacturing
240,000 Reliance Industries Ltd. (GDR) -144A** ......................... 1,740,000
--------------
Financial Services
64,950 Hindalco Industries Ltd. (GDR) ................................. 998,606
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS January 31, 1998, continued
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------ --------------
Industrials
65,000 Mahindra & Mahindra Ltd. (GDR) .................................. $ 479,375
--------------
Pharmaceuticals
64,000 Ranbaxy Laboratories Ltd. (GDR) ................................. 1,492,000
--------------
Telecommunications
117,200 Mahanagar Telephone Nigam (GDR) ................................ 1,765,355
109,500 Videsh Sanchar Nigam Ltd. (GDR) ................................ 1,259,250
--------------
3,024,605
--------------
Utilities -Electric
139,600 BSES Ltd. (GDR) ................................................ 2,347,374
--------------
TOTAL INDIA .................................................... 11,847,910
--------------
KAZAKHSTAN (0.2%)
Banking
21,200 Kazkommertsbank Co. (GDR) -144A** .............................. 312,855
--------------
MEXICO (15.2%)
Building Materials
107,500 Apasco S.A. de C.V. ............................................ 698,877
678,600 Cemex S.A. de C.V. (B Shares) .................................. 2,923,755
--------------
3,622,632
--------------
Conglomerates
159,280 DESC S.A. de C.V. (Series B) ................................... 1,157,887
Grupo Carso S.A. de C.V.
117,700 (Series A1) .................................................... 690,061
--------------
1,847,948
--------------
Consumer Products
775,250 Kimberly-Clark de Mexico S.A. de C.V. (A Shares) ............... 3,440,974
--------------
Financial Services
153,618 Grupo Financiero Inbursa S.A. de C.V. (B Shares) ............... 488,454
--------------
Food, Beverage, Tobacco, &
Household Products
254,300 Fomento Economico Mexicano S.A. de C.V. (B Shares) ............. 1,650,245
66,800 Grupo Industrial Bimbo S.A. de C.V. (Series A) ................. 655,366
Grupo Modelo S.A. de C.V.
89,100 (Series C) ..................................................... 726,702
13,940 Panamerican Beverages, Inc. (Class A) .......................... $ 453,050
--------------
3,485,363
--------------
Media Group
80,890 Grupo Televisa S.A. de C.V. (GDR) ............................... 2,603,647
28,700 TV Azteca S.A. de C.V. (ADR) ................................... 574,000
--------------
3,177,647
--------------
Retail
1,758,600 Cifra S.A. de C.V. (Series C) .................................. 2,972,574
287,033 Cifra S.A. de C.V. (Series V) .................................. 521,817
119,300 Organizacion Soriana S.A. de C.V. (Series B) ................... 425,870
--------------
3,920,261
--------------
Steel & Iron
30,550 Tubos de Acero de Mexico S.A. de C.V. (ADR) .................... 507,894
--------------
Telecommunications
107,795 Telefonos de Mexico S.A. de C.V. (Series L)(ADR) ............... 5,308,904
--------------
TOTAL MEXICO ................................................... 25,800,077
--------------
<PAGE>
PAKISTAN (0.0%)
Banking
11 Muslim Commercial Bank Ltd. .................................... 8
--------------
PERU (1.5%)
Brewers
Union de Cervecerias Peruanas Backus & Johnston S.A.
578,381 (T Shares) ..................................................... 495,874
--------------
Building Materials
317,838 Cementos Lima, S.A. ............................................ 627,432
--------------
Financial Services
31,256 Credicorp Ltd. ................................................. 543,073
--------------
Telecommunications
33,350 CPT Telefonica del Peru S.A. (ADR) ............................. 654,494
CPT Telefonica del Peru S.A.
70,006 (B Shares) ..................................................... 137,440
--------------
791,934
--------------
TOTAL PERU ..................................................... 2,458,313
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS January 31, 1998, continued
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------ --------------
PHILIPPINES (1.5%)
Building & Construction
$ 2,150K Bacnotan Consolidated Industries 5.50% due 06/21/04 (Conv.) .... $ 752,500
--------------
Telecommunications
57,450 Philippine Long Distance Telephone Co. ......................... 1,409,278
--------------
Utilities -Electric
103,038 Manila Electric Co. (B Shares) ................................. 326,529
--------------
TOTAL PHILIPPINES .............................................. 2,488,307
--------------
POLAND (2.9%)
Banking
92,000 Bank Rozwoju Eksportu S.A. ..................................... 1,985,892
--------------
Brewery
11,250 Zaklady Piwowarskie w Zywcu S.A. ............................... 1,098,335
--------------
Investment Companies
10,000 Powszechne Swiadectwo Udzialowe ................................ 330,135
--------------
Publishing
5,692 International Trading & Investment Co. ......................... 1,423,000
--------------
TOTAL POLAND ................................................... 4,837,362
--------------
RUSSIA (3.3%)
Banking
18,000 Bank Vozrozhdeniye -(ADR) ...................................... 108,000
--------------
Electric -Major
32,000 Unified Energy Systems (BRIDGE) Certificate (ADR) .............. 692,000
16,076 Unified Energy Systems (BRIDGE) Certificate (ADR) -144A** ...... 773,529
--------------
1,465,529
--------------
Gas
67,000 Gazprom (ADR) -144A** .......................................... 1,239,500
--------------
Oil & Gas
20,546 Lukoil Holding Co. (ADR) -144A** ............................... 1,376,582
193,500 Surgutneftegaz (ADR) ........................................... 1,112,625
--------------
2,489,207
--------------
Utilities -Electric
3,500 AO Tatneft (ADR) ............................................... $ 329,000
--------------
TOTAL RUSSIA ................................................... 5,631,236
--------------
SOUTH AFRICA (3.2%)
Banking
30,880 Nedcor Ltd. .................................................... 768,947
--------------
Conglomerates
38,543 Johnnies Industrial Corp., Ltd. ................................ 437,678
New Africa Investments Ltd.
753,100 (N Shares) ..................................................... 768,142
--------------
1,205,820
--------------
Life Insurance
20,270 Liberty Life Association of Africa Ltd. ........................ 535,985
--------------
Metals & Mining
1,100 Vaal Reefs Exploration & Mining Co., Ltd. ...................... 51,526
--------------
Multi-Industry
106,172 Barlow Ltd. .................................................... 968,821
130,681 Rembrandt Group Ltd. ........................................... 993,722
--------------
1,962,543
--------------
Oil & Gas
91,074 Sasol Ltd. ..................................................... 831,051
--------------
TOTAL SOUTH AFRICA ............................................. 5,355,872
--------------
<PAGE>
SOUTH KOREA (3.1%)
Electronic & Electrical Equipment
31,000 Samsung Electronics (GDR) -144A** .............................. 980,375
30,000 Samsung Electronics Co. ........................................ 1,715,131
--------------
2,695,506
--------------
Insurance
5,660 Samsung Fire & Marine Insurance ................................ 1,560,224
--------------
Steel & Iron
46,000 Pohang Iron & Steel Co., Ltd. (ADR) ............................ 1,089,625
--------------
TOTAL SOUTH KOREA .............................................. 5,345,355
--------------
TAIWAN (5.0%)
Computers -Peripheral Equipment
79,500 Asustek Computer Inc. (GDR) .................................... 1,545,281
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS January 31, 1998, continued
SHARES/PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------ --------------
Electronics -Semiconductors/Components
31,000 Siliconware Precision Industries Co. (GDR) ..................... $ 449,113
73,000 Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) ............. 1,733,750
--------------
2,182,863
--------------
Investment Companies
491,200 ROC Taiwan Fund ................................................ 4,727,800
--------------
TOTAL TAIWAN ................................................... 8,455,944
--------------
THAILAND (1.8%)
Banking
549,600 Thai Farmers Bank Public Co., Ltd. (Alien Market) .............. 1,741,617
--------------
Electric
487,200 Electricity Generating Public Co., Ltd. ........................ 1,349,738
--------------
TOTAL THAILAND ................................................. 3,091,355
--------------
TURKEY (4.2%)
Banking
9,585,000 Akbank T.A.S. .................................................. 778,288
13,956,000 Turkiye Garanti Bankasi A.S. ................................... 638,426
--------------
1,416,714
--------------
Beverages
5,810,000 Efes Sinai Yatirim Holding A.S. ................................ 897,015
--------------
Building Materials
11,545,500 Cimsa Cimento Sanayi Ve Ticaret A.S. ........................... 580,972
--------------
Cement
1,688,000 Baticim Bati Anadolu Cimento Sanayii A.S. ...................... 185,325
--------------
Electronics
4,623,600 Netas Northern Elektrik Telekomunikasyon A.S. .................. 1,607,473
--------------
Housewares
22,663,461 Trakya Cam Sanayii A.S. ........................................ 1,321,863
--------------
Property -Casualty Insurance
17,450,000 Aksigorta A.S. ................................................. 1,037,740
--------------
TOTAL TURKEY ................................................... 7,047,102
--------------
UZBEKISTAN (0.4%)
Investment Companies
80,000 Central Asian Investment Company Ltd. .......................... $ 600,000
--------------
VENEZUELA (4.0%)
Telecommunications
147,100 Compania Anonima Nacional Telefonos de Venezuela (ADR) ......... 5,405,925
--------------
Utilities -Electric
1,475,576 C.A. la Electridad de Caracas S.A.C.A. ......................... 1,416,738
--------------
TOTAL VENEZUELA ................................................ 6,822,663
--------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL COMMON AND PREFERRED STOCKS
AND CONVERTIBLE BONDS
(Identified Cost $141,745,664)(a) ........ 83.3% 141,080,006
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES .............................. 16.7 28,228,415
----- ------------
NET ASSETS ............................... 100.0% $169,308,421
===== ============
</TABLE>
- ------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
K In thousands.
* 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
$15,986,078 and the aggregate gross unrealized depreciation is
$16,651,736, resulting in net unrealized depreciation of $665,658.
<PAGE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JANUARY 31, 1998:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN DELIVERY APPRECIATION
TO RECEIVE EXCHANGE FOR DATE (DEPRECIATION)
-------------- -------------- ---------- --------------
<S> <C> <C> <C>
$ 429,641 MXN 3,647,654 02/02/98 $ (1,523)
TRL 196,087,500,000 $ 895,786 02/06/98 1,229
$ 6,345,000 BRL 7,614,000 04/29/98 (208,624)
BRL 4,712,000 $ 4,000,000 04/29/98 55,776
$ 6,345,000 BRL 7,614,000 04/30/98 (206,368)
---------
Net unrealized depreciation ................ $(359,510)
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
SUMMARY OF INVESTMENTS January 31, 1998
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------
<S> <C> <C>
Air Transport ............. $ 324,924 0.2%
Banking ................... 11,251,861 6.7
Beverages ................. 897,015 0.5
Brewers ................... 495,874 0.3
Brewery ................... 3,066,150 1.8
Building & Construction .. 752,500 0.4
Building Materials ........ 4,831,036 2.9
Cement .................... 185,325 0.1
Computer -Peripheral
Equipment ................ 1,545,281 0.9
Conglomerates ............. 3,053,768 1.8
Consumer Products ......... 3,440,974 2.0
Diversified Manufacturing 1,740,000 1.0
Electric .................. 2,600,039 1.5
Electric -Major ........... 1,465,529 0.9
Electronic & Electrical
Equipment ................ 2,695,506 1.6
Electronics ............... 1,607,473 1.0
Electronics
-Semiconductors/Components 2,182,863 1.3
Financial Services ........ 3,366,878 2.0
Food, Beverage, Tobacco &
Household Products ....... 6,004,000 3.5
Food & Beverages .......... 1,463,829 0.9
Gas ....................... 1,239,500 0.7
Hotels .................... 217,118 0.1
Housewares ................ 1,321,863 0.8
Industrials ............... 479,375 0.3
Insurance ................. 1,560,224 0.9
Investment Companies ..... 7,012,329 4.1
Life Insurance ............ 535,985 0.3
Machinery ................. 379,930 0.2
Manufacturing ............. 628,422 0.4
Media Group ............... 3,177,647 1.9
Metals & Mining ........... 1,426,181 0.8
Multi-Industry ............ 2,837,643 1.7
Oil & Gas ................. 8,440,711 5.0
Oil -Exploration &
Production ............... 1,916,962 1.1
Oil Refineries ............ 373,248 0.2
Pharmaceuticals ........... 2,441,473 1.5
Property -Casualty
Insurance ................ 1,037,740 0.6
Publishing ................ 1,423,000 0.9
Retail .................... 4,044,256 2.4
Steel ..................... 485,594 0.3
Steel & Iron .............. 1,597,519 1.0
Telecommunications ........ 33,419,611 19.7
Utilities ................. 415,643 0.2
Utilities -Electric ....... 11,697,207 6.9
------------ -----
$141,080,006 83.3%
============ =====
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------ -------------- ------------
<S> <C> <C>
Common Stocks ..... $126,805,146 74.9%
Convertible Bonds 752,500 0.4
Preferred Stocks . 13,522,360 8.0
------------ ----
$141,080,006 83.3%
============ ====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $141,745,664) $141,080,006
Unrealized appreciation on open forward foreign currency contracts 57,005
Cash (including $541,290 in foreign currency) ..................... 31,670,590
Receivable for:
Investments sold ................................................ 9,788,598
Interest ........................................................ 287,737
Dividends ....................................................... 49,081
Shares of beneficial interest sold .............................. 13,684
Deferred organizational expenses .................................. 11,416
Prepaid expenses and other assets ................................. 160,261
--------------
TOTAL ASSETS .................................................... 183,118,378
--------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts 416,515
Payable for:
Shares of beneficial interest repurchased ....................... 7,018,357
Investments purchased ........................................... 5,786,855
Management fee .................................................. 193,002
Investment advisory fee ......................................... 128,668
Plan of distribution fee ........................................ 8,699
Accrued expenses and other payables ............................... 257,861
--------------
TOTAL LIABILITIES ............................................... 13,809,957
--------------
NET ASSETS ...................................................... $169,308,421
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital ................................................... $207,723,634
Net unrealized depreciation ....................................... (1,032,090)
Accumulated undistributed net investment income ................... 477,392
Accumulated net realized loss ..................................... (37,860,515)
--------------
NET ASSETS ...................................................... $169,308,421
==============
CLASS A SHARES:
Net Assets ........................................................ $169,251,625
Shares Outstanding (unlimited authorized, $.01 par value) ........ 13,312,530
NET ASSET VALUE PER SHARE ....................................... $12.71
==============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) ................ $13.41
==============
CLASS B SHARES:
Net Assets ........................................................ $35,168
Shares Outstanding (unlimited authorized, $.01 par value) ........ 2,766
NET ASSET VALUE PER SHARE ....................................... $12.71
==============
CLASS C SHARES:
Net Assets ........................................................ $11,324
Shares Outstanding (unlimited authorized, $.01 par value) ........ 891
NET ASSET VALUE PER SHARE ....................................... $12.71
==============
CLASS D SHARES:
Net Assets ........................................................ $10,304
Shares Outstanding (unlimited authorized, $.01 par value) ........ 810
NET ASSET VALUE PER SHARE ....................................... $12.72
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the year ended January 31, 1998*
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $351,342 foreign withholding tax) ............... $ 6,064,827
Interest .......................................................... 1,223,818
--------------
TOTAL INCOME .................................................... 7,288,645
--------------
EXPENSES
Plan of distribution fee (Class A shares) ......................... 8,696
Management fee .................................................... 2,367,943
Investment advisory fee ........................................... 1,578,629
Custodian fees .................................................... 675,478
Transfer agent fees and expenses .................................. 192,185
Shareholder reports and notices ................................... 120,344
Foreign exchange provisional tax .................................. 110,578
Professional fees ................................................. 92,196
Registration fees ................................................. 56,977
Trustees' fees and expenses ....................................... 33,193
Organizational expenses ........................................... 10,038
Other ............................................................. 26,216
--------------
TOTAL EXPENSES .................................................. 5,272,473
--------------
NET INVESTMENT INCOME ........................................... 2,016,172
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments ..................................................... 14,318,931
Foreign exchange transactions ................................... 100,124
--------------
NET GAIN ........................................................ 14,419,055
--------------
Net change in unrealized appreciation/depreciation on:
Investments ..................................................... (56,562,495)
Translation of forward foreign currency contracts, other assets
and liabilities denominated in foreign currencies .............. (367,009)
--------------
NET DEPRECIATION ................................................ (56,929,504)
--------------
NET LOSS ........................................................ (42,510,449)
--------------
NET DECREASE ...................................................... $(40,494,277)
==============
</TABLE>
- ------------
* Class B, Class C and Class D shares were issued January 26, 1998.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 1998* JANUARY 31, 1997
- ------------------------------------------------------ ----------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 2,016,172 $ 331,538
Net realized gain (loss) .............................. 14,419,055 (1,662,158)
Net change in unrealized appreciation/depreciation ... (56,929,504) 35,901,840
----------------- ----------------
NET INCREASE (DECREASE) ............................. (40,494,277) 34,571,220
Dividends to shareholders from net investment income -
Class A shares (3,126,315) (963,188)
Net decrease from transactions in shares of beneficial
interest.............................................. (92,378,521) (1,472,887)
----------------- ----------------
NET INCREASE (DECREASE) ............................. (135,999,113) 32,135,145
NET ASSETS:
Beginning of period ................................... 305,307,534 273,172,389
----------------- ----------------
END OF PERIOD
(Including undistributed net investment income of
$477,392 and dividends in excess of net investment
income of $810,770, respectively) ................... $ 169,308,421 $305,307,534
================= ================
</TABLE>
- ------------
* Class B, Class C and Class D shares were issued January 26, 1998.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998
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 July 22, 1997, the shareholders of
the Fund voted to convert the Fund to an open-end investment company. The
conversion took effect on January 26, 1998 and the Fund 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 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 Trustees
(valuation of debt securities for which market quotations are not readily
available may be based upon current market prices of securities which
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998, continued
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.
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998, 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 -- Dean Witter InterCapital Inc., an affiliate of
Dean Witter Services Company Inc., 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 and
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998, continued
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 (the
"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.
The Co-Advisory Agreements and each Sub-Advisory Agreement was approved by
the Trustees on November 6, 1997 and by shareholders of the Fund on January
12, 1998 and took effect on January 26, 1998.
Prior to January 26, 1998, TCW was the sole Investment Adviser of the Fund
and received compensation at the same rate as the Co-Advisers receive
collectively.
4. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Manager. On January 26, 1998, the Fund
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 payment of
commissions for sales
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998, continued
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 January 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 account executives may be reimbursed in
the subsequent calendar year. For the period ended January 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.
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 January 31, 1998
aggregated $239,366,969 and $356,817,161, respectively.
For the period May 31, 1997 through January 31, 1998, the Fund incurred
brokerage commissions with Morgan Stanley & Co., Inc., an affiliate of the
Manager since May 31, 1997, in the amount of $61,638.
Dean Witter Trust FSB, an affiliate of the Manager, is the Fund's transfer
agent. At January 31, 1998, the Fund had transfer agent fees and expenses
payable of approximately $8,000.
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998, continued
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 1998 JANUARY 31, 1997
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ --------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Redeemed (7,451,203) $(92,433,846) -- --
Treasury shares purchased and retired (weighted average
discount 18.33%)* -- -- (136,500) $(1,472,887)
------------- --------------- ------------ --------------
Net decrease -Class A (7,451,203) (92,433,846) (136,500) (1,472,887)
------------- --------------- ------------ --------------
CLASS B SHARES**
Sold 2,766 34,325 -- --
------------- --------------- ------------ --------------
CLASS C SHARES**
Sold 891 11,000 -- --
------------- --------------- ------------ --------------
CLASS D SHARES**
Sold 810 10,000 -- --
------------- --------------- ------------ --------------
Net decrease in Fund (7,446,736) $(92,378,521) (136,500) $(1,472,887)
============= =============== ============ ==============
</TABLE>
- ------------
* The Trustees have voted to retire the shares purchased.
** For the period January 26, 1998 (issue date) through January 31, 1998.
7. FEDERAL INCOME TAX STATUS
During the year ended January 31, 1998, the Fund utilized approximately
$19,003,000 of its net capital loss carryover. 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
("PFICs") and mark-to-market of open forward foreign currency exchange
contracts. The Fund had permanent book/tax differences primarily attributable
to foreign currency gains
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
NOTES TO FINANCIAL STATEMENTS January 31, 1998, continued
and tax adjustments on PFICs sold by the Fund. To reflect reclassifications
arising from the permanent differences, paid-in-capital was charged $19,223,
accumulated net realized loss was charged $2,379,082 and accumulated
undistributed net investment income was credited $2,398,305.
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 January 31, 1998, the Fund had outstanding forward contracts to facilitate
settlements of foreign currency denominated portfolio transactions.
At January 31, 1998, the Fund's cash balance consisted principally of
interest bearing deposits with
Chase Manhattan N.A., the Fund's custodian.
<PAGE>
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 YEAR ENDED JANUARY 31, FOR THE PERIOD
-------------------------------------------- MARCH 30, 1994*
THROUGH
1998**++ 1997 1996 JANUARY 31, 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............... $ 14.70 $13.07 $11.18 $ 14.02
-------------- -------------- -------------- ----------------
Net investment income.............................. 0.10 0.02 0.04 0.11
Net realized and unrealized gain (loss)............ (1.94) 1.65 1.73 (2.89)
-------------- -------------- -------------- ----------------
Total from investment operations................... (1.84) 1.67 1.77 (2.78)
-------------- -------------- -------------- ----------------
Offering costs charged against capital............. -- -- -- (0.02)
-------------- -------------- -------------- ----------------
Less dividends and distributions from:
Net investment income............................. (0.15) (0.05) (0.02) (0.09)
Net realized gain................................. -- -- -- (0.01)
-------------- -------------- -------------- ----------------
Total dividends and distributions.................. (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..................... $ 12.71 $14.70 $13.07 $ 11.18
============== ============== ============== ================
TOTAL INVESTMENT RETURN+ .......................... (12.43)% 13.03% 17.04% (19.47)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................................... 1.67% 1.72% 1.69% 1.73%(2)
Net investment income.............................. .64% 0.12% 0.28% 0.94%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............ $169,252 $305,308 $273,172 $254,358
Portfolio turnover rate ........................... 85% 66% 66% 61%(1)
Average commission rate paid....................... $0.0009 $0.0012 -- --
</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.
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
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 26, 1998*
THROUGH
JANUARY 31,
1998++
- -----------------------------------------------------------
<S> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $12.34
Net realized and unrealized gain ....... 0.37
------
Net asset value, end of period .......... $12.71
======
TOTAL INVESTMENT RETURN+ ................ 3.08 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 3.18 %(2)
Net investment loss ..................... (2.77)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $35
Portfolio turnover rate ................. 85 %
Average commission rate paid ............ $0.0009
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $12.34
Net realized and unrealized gain ....... 0.37
------
Net asset value, end of period .......... $12.71
======
TOTAL INVESTMENT RETURN+ ................ 3.08 % (1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 3.07 %(2)
Net investment loss ..................... (2.85)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $11
Portfolio turnover rate ................. 85 %
Average commission rate paid ............ $0.0009
</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
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 26, 1998*
THROUGH
JANUARY 31,
1998++
- -----------------------------------------------------------
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $12.34
Net realized and unrealized gain ....... 0.38
------
Net asset value, end of period .......... $12.72
======
TOTAL INVESTMENT RETURN+ ................ 3.08 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 2.07 % (2)
Net investment loss ..................... (1.60)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $10
Portfolio turnover rate ................. 85 %
Average commission rate paid ............ $0.0009
</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
<PAGE>
TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF TCW/DW EMERGING MARKETS OPPORTUNITIES TRUST
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 Emerging
Markets Opportunities Trust (the "Fund") at January 31, 1998, 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 January 31, 1998 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
March 18, 1998
<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
Shaun C.K. Chan
Vice President
Michael P. Reilly
Vice President
Terrence F. Mahoney
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.
Co-Advisers
TCW Funds Management, Inc.
Morgan Stanley Asset 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.
EMERGING
MARKETS
OPPORTUNITIES
TRUST
[GRAPHIC: MOSAIC]
ANNUAL REPORT
JANUARY 31, 1998
