<PAGE>
TCW/DW TOTAL RETURN TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- -----------------------------------------------------------------------------
We are pleased to present the first Annual Report to Shareholders for
TCW/DW Total Return Trust. The Fund, which began operations on November 30,
1994, seeks a high level of total return from capital growth and income. The
Fund invests in stocks of large capitalization companies and investment grade
convertible securities and bonds. Since inception, through July 31, 1995, the
Fund has produced a total return of 19.04 percent.
The factors that adversely affected the financial markets in 1994--an
overheated economy, rising interest rates and inflation--reversed themselves
and helped both the stock and bond markets to move higher in 1995. Evidence
of a slowing U.S. economy without a recession and a peaking of inflation,
combined with an easing move by the Federal Reserve Board, have sent the
markets to new highs. Moreover, in contrast with last year, the U.S. stock
market advance has been very broad, with all industries participating and all
capitalization sectors (large, medium and small companies) rising.
New factory orders continued to buoy production early in 1995, despite
evidence of a slowdown in inventory building. Gains in productivity, which
rose at a 3 percent annual rate in the second quarter, continued to sustain
corporate earnings, even as economic expectations became more subdued.
Globally, the U.S. equity market was the beneficiary of a "flight to
quality," as the Mexican financial crisis triggered declines in other
emerging markets worldwide.
Led by technology and financial stocks, the U.S. equity market scaled new
heights during the first seven months of 1995, increasing an impressive 24.28
percent, as measured by the Standard & Poor's 500 Composite Stock Price
Index. Clearly, the bulls had much to celebrate: the expectation of slower
U.S. growth (without a recession), the ongoing containment of inflation,
continued corporate profit increases, a proposed balanced budget bill, slower
growth overseas, a strengthening U.S. dollar and the conviction that the
Federal Reserve Board's work may be done for this cycle.
At some point, the market could pull up for a breather as both individuals
and institutions rush to take some profits. Still, barring seriously negative
news on the economic front or in the bond market, the foundation for a
continued strong domestic equity market remains in place as the housing
sector responds to lower interest rates, business fixed-investment remains
vigorous and work is done in Washington, D.C. to lower the U.S. trade
deficit.
TCW/DW TOTAL RETURN TRUST
GROWTH OF $10,000
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
---- ----- -------
<S> <C> <C>
November 30, 1994 $10,000 10,000
December 31, 1994 $ 9,990 $10,148
January 31, 1995 $10,070 $10,417
February 28, 1995 $10,392 $10,816
March 31, 1995 $10,633 $11,135
April 30, 1995 $11,016 $11,473
May 31, 1995 $11,450 $11,916
June 30, 1995 $11,752 $12,197
July 31, 1995 $11,404(3) $12,612
</TABLE>
CUMULATIVE TOTAL RETURN
LIFE OF FUND
19.04 (1)
14.04 (2)
_______Fund________S&P 500 (4)
Past performance is not predictive of future returns.
________________________________________
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction
of the maximum applicable contingent deferred sales charge (CDSC)
(since inception-5%). See the Fund's current prospectus for complete
details on fees and sales charges.
(3) Closing value assuming a complete redemption on July 31, 1995.
(4) The Standard and Poor's 500 Composite Stock Price Index (S&P 500) is
a broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The index does not include
any expenses, fees or charges. Past performance is not predictive of
future returns.
<PAGE>
OPPORTUNITIES IN A CHANGING GLOBAL MARKETPLACE
According to the Fund's Investment Adviser, TCW Funds Management, Inc., an
affiliate of Trust Company of the West, a number of structural changes in the
global economy have created the potential for a longer than usual economic
expansion, which could be of significant benefit to many U.S. corporations.
Several investment trends are in place that will continue to benefit U.S.
companies and financial markets.
First, the gradual dismantling of trade barriers in both the emerging and
mature economies is creating an intensely competitive global economy. This is
forcing industries everywhere to focus on their core businesses in order to
achieve and maintain world class operating efficiency and product leadership.
It also acts to inhibit pricing power and other inflationary forces, such as
wage pressure. In this environment, many U.S. companies which have become
low-cost producers and leading new product innovators should increase their
share of the pie in the years ahead by defending their home markets and by
capturing new business abroad.
Second, the principal driver to the maximization of corporate efficiency
is technology, the prime force in enhancing individual worker productivity.
Cutting edge technology is fungible and is just as much a necessity in modern
industrial economies as in those of the emerging nations. This will create
dynamic markets for companies that are leaders in numerous key areas of
electronic and communications technology. Once again, many U.S. companies
have recaptured global technological leadership by virtue of their immense
ongoing outlays for product development.
Third, personal and corporate tax rates are already oppressive in most
mature economies and cannot be increased further. Indeed, if anything, the
trend is in the opposite direction. No government has the luxury of running
up huge budget deficits because the free markets will punish them by
devaluing their currencies, raising local interest rates and forcing other
economically painful austerity measures. Downsizing government is the order
of the day and is likely to continue to be for at least a generation.
Increased savings by an aging population as well as reduced dissaving by
governments will both have positive benefits against inflationary forces.
PORTFOLIO HOLDINGS
The Fund's investment discipline is to focus on higher quality companies
that will have earnings and dividend growth above the average company in the
Standard & Poor's 500 Composite Stock Price Index. As of July 31, 1995, 76
percent of the Fund is invested in common stocks and 12 percent in
investment-grade convertible securities. The remaining 12 percent of the Fund
is invested in a U.S. Treasury Note and a Repurchase Agreement. The
accompanying chart illustrates a $10,000 investment in the Fund at inception
(November 30, 1994), versus a similar hypothetical investment in the issues
that comprise the Standard & Poor's 500 Composite Stock Price Index.
Prominent among the Fund's portfolio holdings are numerous revitalized
American industrial corporations. Virtually all of the Fund's holdings are
among larger companies that have substantial and growing profitability from
international operations. Electronic technology is well represented in the
Fund's portfolio, with holdings such as Intel, Texas Instruments and National
Semiconductor. As the population ages savings rates move higher and better
financial services are sought after at home and in the emerging economies,
the Fund is well positioned in these promising venues with holdings in MBIA
Inc., Ahmanson, JP Morgan, Fleet Financial and Citicorp. In addition, most of
the Fund's consumer-related holdings represent companies
<PAGE>
which produce products or provide services which are growing in demand abroad
as per capita incomes and living standards rise (Merck, Proctor & Gamble,
Xerox and H&R Block).
LOOKING AHEAD
Going forward, the Fund's portfolio manager sees modest signs of renewed
economic growth, as the housing, capital goods and retail sectors respond to
lower interest rates. An extended positive business cycle within the context
of a low inflation, low interest rate environment could enable corporate
profits to enjoy a prolonged rise. In addition, it continues to believe that
the U.S. equity market's long-term prospects are compelling. In light of
uncertainties inherent in the Latin American and Southeast Asian markets, the
Fund's portfolio manager anticipates maintaining a focus on common stocks of
higher-quality U.S. companies.
We appreciate your support of TCW/DW Total Return Trust and look forward
to continuing to serve your investment needs.
Very truly yours,
/s/ Charles A. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
TCW/DW TOTAL RETURN TRUST
Portfolio of Investments July 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- --------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (76.2%)
AEROSPACE & DEFENSE (2.6%)
15,000 Lockheed Corp. ...................$ 943,125
------------
AIRCRAFT & AEROSPACE (2.5%)
10,800 United Technologies Corp. ........ 907,200
------------
AUTOMOTIVE (5.7%)
22,600 Chrysler Corp. ................... 1,101,750
33,200 Ford Motor Co. ................... 958,650
------------
2,060,400
------------
BANKING (2.3%)
11,100 Morgan (J.P.) & Co., Inc. ........ 811,687
------------
BANKS - INTERNATIONAL (2.7%)
15,700 Citicorp ......................... 979,287
------------
BANKS - REGIONAL (2.2%)
22,300 Fleet Financial Group, Inc. ..... 794,437
------------
BROKERAGE (2.5%)
16,000 Merrill Lynch & Co., Inc. ........ 888,000
------------
CONSUMER SERVICES (2.7%)
25,900 Block (H. & R.), Inc. ............ 971,250
------------
ELECTRICAL EQUIPMENT (3.7%)
12,000 General Electric Co. ............. 708,000
46,000 Westinghouse Electric Corp. ..... 626,750
------------
1,334,750
------------
ELECTRONICS - DEFENSE (2.1%)
18,200 General Motors Corp. (Class H) .. 773,500
------------
ELECTRONICS - SEMICONDUCTORS/
COMPONENTS (5.6%)
14,600 Intel Corp. ...................... 947,175
6,900 Texas Instruments Inc. ........... 1,078,125
------------
2,025,300
------------
ENTERTAINMENT (2.3%)
28,100 Circus Circus Enterprises, Inc.* 835,975
------------
HEALTH CARE DRUGS (1.9%)
13,400 Merck & Co., Inc. ................ 691,775
------------
HOTELS/MOTELS (2.7%)
13,000 Hilton Hotels Corp. .............. 952,250
------------
INSURANCE (2.7%)
14,600 MBIA, Inc. ....................... 989,150
------------
METALS & BASIC MATERIALS (2.8%)
18,800 Goodrich (B.F.) Co. .............. 1,019,900
------------
NATURAL GAS (3.0%)
37,500 Questar Corp. .................... 1,078,125
------------
NATURAL RESOURCES (1.9%)
10,400 Texaco, Inc. ..................... 691,600
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- --------------------------------- ------------
<C> <S> <C>
OFFICE EQUIPMENT &
SUPPLIES (1.8%)
5,400 Xerox Corp. ...................... $643,275
------------
OIL - FOREIGN (2.5%)
17,900 Chevron Corp. .................... 883,813
------------
OIL RELATED (2.1%)
30,600 McDermott International, Inc. ... 753,525
------------
RETAIL - DEPARTMENT
STORES (5.1%)
27,300 Dillard Department Stores, Inc.
(Class A) ....................... 846,300
20,600 Penney (J.C.) Co., Inc. .......... 996,525
------------
1,842,825
------------
SAVINGS & LOAN
ASSOCIATIONS (2.7%)
42,700 Ahmanson (H.F.) & Co. ............ 955,413
------------
SOAP & HOUSEHOLD
PRODUCTS (1.7%)
8,700 Procter & Gamble Co. ............. 599,213
------------
TELECOMMUNICATIONS (2.9%)
8,600 ITT Corp. ........................ 1,032,000
------------
TOBACCO (2.3%)
11,700 Philip Morris Companies, Inc. ... 838,013
------------
WASTE DISPOSAL (3.2%)
36,900 WMX Technologies, Inc. ........... 1,153,125
------------
TOTAL COMMON STOCKS (IDENTIFIED
COST $24,502,276) ...............27,448,913
------------
CONVERTIBLE PREFERRED STOCKS
(11.7%)
CHEMICALS (1.5%)
9,400 Occidental Petroleum Corp. -
144A** $3.875 ................... 526,987
------------
FINANCIAL (2.5%)
17,000 St. Paul Capital L.L.C. .......... 892,500
------------
INDUSTRIALS (1.8%)
12,700 Corning Delaware, L.P. ........... 642,938
------------
SEMICONDUCTORS (2.8%)
10,300 National Semiconductor Corp. .... 1,009,400
------------
WASTE MANAGEMENT (3.1%)
29,200 Browning-Ferris Industries, Inc. 1,124,200
------------
TOTAL CONVERTIBLE PREFERRED
STOCKS (IDENTIFIED COST
$4,050,308) ..................... 4,196,025
------------
</TABLE>
<PAGE>
TCW/DW TOTAL RETURN TRUST
Portfolio of Investments July 31, 1995 (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- ---------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATION (11.1%)
$4,000 U.S. Treasury Note 6.125% due
05/31/97 (Identified Cost
$4,017,500) ......................$4,015,000
------------
SHORT-TERM INVESTMENT (0.8%)
REPURCHASE AGREEMENT
292 The Bank of New York 5.8125% due
08/01/95 (dated 07/31/95;
proceeds $291,547; collateralized
by $289,073 Federal Mortgage
Acceptance Corp. 9.50% due
04/01/01 valued at $303,014)
(Identified Cost $291,500) ....... 291,500
------------
VALUE
-------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$32,861,584) (A) 99.8% $35,951,438
OTHER ASSETS IN
EXCESS OF
LIABILITIES ..... 0.2 66,140
-------- -------------
NET ASSETS .......100.0% $36,017,578
======== =============
</TABLE>
- ---------------
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) The aggregate cost for federal income tax purposes is $32,871,804; the
aggregate gross unrealized appreciation is $3,204,679 and the aggregate
gross unrealized depreciation is $125,045, resulting in net unrealized
appreciation of $3,079,634.
See Notes to Financial Statements
<PAGE>
TCW/DW TOTAL RETURN TRUST
Financial Statements
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $32,861,584) ............ $35,951,438
Receivable for:
Shares of beneficial interest sold ...... 219,572
Investments sold ......................... 159,755
Interest ................................. 41,550
Dividends ................................ 29,773
Deferred organizational expenses .......... 217,285
Receivable from affiliate ................. 62,692
Prepaid expenses and other assets ........ 18,254
-------------
TOTAL ASSETS ............................ 36,700,319
-------------
LIABILITIES:
Payable for:
Investments purchased .................... 357,244
Plan of distribution fee ................. 26,513
Shares of beneficial interest repurchased 724
Organizational expenses ................... 217,285
Accrued expenses and other payables ...... 80,975
-------------
TOTAL LIABILITIES ....................... 682,741
-------------
NET ASSETS:
Paid-in-capital ........................... 31,474,177
Net unrealized appreciation ............... 3,089,854
Undistributed net investment income ...... 217,446
Undistributed net realized gain ........... 1,236,101
-------------
NET ASSETS .............................. $36,017,578
=============
NET ASSET VALUE PER SHARE, 3,065,066
shares outstanding (unlimited shares
authorized of $.01 par value) ............ $11.75
=============
</TABLE>
STATEMENT OF OPERATIONS For the period
November 30, 1994* through July 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends ....................... $ 387,254
Interest ........................ 343,294
-----------
TOTAL INCOME ................... 730,548
-----------
EXPENSES
Plan of distribution fee ........ 165,935
Management fee .................. 79,732
Professional fees ............... 61,097
Investment advisory fee ......... 53,155
Organizational expenses ......... 32,715
Trustees' fees and expenses .... 25,029
Transfer agent fees and expenses 23,522
Shareholder reports and notices 16,932
Registration fees ............... 11,981
Other ........................... 735
-----------
TOTAL EXPENSES BEFORE AMOUNTS
WAIVED/ASSUMED ................ 470,833
Less: Amounts Waived/Assumed .. (304,898)
-----------
TOTAL EXPENSES AFTER AMOUNTS
WAIVED/ASSUMED ................ 165,935
-----------
NET INVESTMENT INCOME .......... 564,613
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain ............... 1,236,101
Net unrealized appreciation .... 3,089,854
-----------
NET GAIN ....................... 4,325,955
-----------
NET INCREASE ................... $4,890,568
===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
NOVEMBER 30, 1994*
THROUGH JULY 31, 1995
---------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income .................................................. $ 564,613
Net realized gain ...................................................... 1,236,101
Net unrealized appreciation ............................................ 3,089,854
---------------------
Net increase .......................................................... 4,890,568
---------------------
Dividends to shareholders from net investment income .................... (347,167)
Net increase from transactions in shares of beneficial interest ........ 31,374,177
---------------------
Total increase ........................................................ 35,917,578
NET ASSETS:
Beginning of period ..................................................... 100,000
---------------------
END OF PERIOD (including undistributed net investment income of
$217,446) ............................................................... $36,017,578
=====================
</TABLE>
- ---------------
* Commencement of operations.
See Notes to Financial Statements
<PAGE>
TCW/DW TOTAL RETURN TRUST
Notes to Financial Statements July 31, 1995
- -----------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- TCW/DW Total Return Trust (the
"Fund") is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a non-diversified, open-end management investment company.
The Fund was organized as a Massachusetts business trust on June 29, 1994 and
on August 22, 1994, the Fund issued 10,000 shares of beneficial interest for
$100,000 to Dean Witter InterCapital Inc. ("InterCapital"), an affiliate of
Dean Witter Services Company Inc. (the "Manager"), to effect the Fund's
initial capitalization. The Fund commenced operations on November 30, 1994.
The following is a summary of significant accounting policies:
A. Valuation of Investments -- (1) an equity security listed or traded on
the New York or American Stock Exchange 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 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 the
Adviser that sale and bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Trustees; (4) certain of the Fund's portfolio
securities may be valued by an outside pricing service approved by the
Trustees. The pricing service utilizes a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters,
and/or research and evaluations by its staff, including review of
broker-dealer market price quotations, if available, in determining what
it believes is the fair valuation of the 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
securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. Accounting for Investments -- Security transactions are accounted for
on the trade date (date the order to buy or sell is executed). Realized
gains and losses on security transactions are determined by the
identified cost method. Dividend income is recorded on the ex-dividend
date. Interest income is accrued daily and includes accretion of
discounts on certain short-term securities.
C. 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.
D. 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
<PAGE>
TCW/DW TOTAL RETURN TRUST
Notes to Financial Statements July 31, 1995 (continued)
- -----------------------------------------------------------------------------
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.
E. Organizational Expenses -- InterCapital paid the organizational
expenses of the Fund in the amount of approximately $250,000 which will
be reimbursed by the Fund for the full amount thereof, exclusive of
amounts waived/assumed of $32,715. Such expenses have been deferred and
are being amortized by the Fund on the straight line method over a period
not to exceed five years from the commencement of operations.
2. MANAGEMENT AGREEMENT -- Pursuant to a Management Agreement with the
Manager, the Fund pays its Manager a management fee, accrued daily and
payable monthly, by applying the annual rate of 0.45% to the net assets of
the Fund determined as of the close of each business day.
Under the terms of the Management Agreement, the Manager maintains certain
of the Fund's books and records and furnishes, at its own expense, office
space, facilities, equipment, clerical, bookkeeping and certain legal
services and pays the salaries of all personnel, including officers of the
Fund who are employees of the Manager. The Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.
InterCapital had undertaken to assume all operating expenses (except for
any 12b-1 and/or brokerage fees) and the Manager had agreed to waive the
compensation provided for in its Management Agreement and the Adviser had
undertaken to waive the compensation provided for in its Advisory Agreement,
until such time as the Fund had $50 million of net assets or until six months
from the date of commencement of the Fund's operations, whichever occurred
first. InterCapital will continue to assume all operating expenses (except
for 12b-1 and/or brokerage fees) and the Manager and the Adviser will
continue to waive their respective compensation until such time as the Fund
has $50 million of net assets or until September 27, 1995, whichever occurs
first.
3. INVESTMENT ADVISORY AGREEMENT -- Pursuant to an Investment Advisory
Agreement with TCW Funds Management, Inc. (the "Adviser"), the Fund pays the
Adviser an advisory fee, accrued daily and payable monthly, by applying the
annual rate of 0.30% to the net assets of the Fund determined as of the close
of each business day.
Under the terms of the Investment Advisory Agreement, the Fund has
retained the Adviser to invest the Fund's assets, including placing orders
for the purchase and sale of portfolio securities. The Adviser obtains and
evaluates such information and advice relating to the economy, securities
markets, and specific securities as it considers necessary or useful to
continuously manage the assets of the Fund in a manner consistent with its
investment objective. In addition, the Adviser pays the salaries of all
personnel, including officers of the Fund, who are employees of the Adviser.
4. PLAN OF DISTRIBUTION -- Shares of the Fund are distributed by Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Manager. The Fund
has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under
the Act pursuant to which the Fund pays the Distributor compensation, accrued
daily and payable monthly, at an annual rate of 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Fund's shares since the Fund's
inception (not including reinvestment of dividend or capital gains
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the
<PAGE>
TCW/DW TOTAL RETURN TRUST
Notes to Financial Statements July 31, 1995 (continued)
- -----------------------------------------------------------------------------
Fund's inception upon which a contingent deferred sales charge has been
imposed or upon which such charge has been waived; or (b) the Fund's average
daily net assets. Amounts paid under the Plan are paid to the Distributor to
compensate it for the services provided and the expenses borne by it and
others in the distribution of the Fund's shares, including the payment of
commissions for sales of the Fund's shares and incentive compensation to, and
expenses of, account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Manager and Distributor, and other employees and selected
broker-dealers who engage in or support distribution of the Fund's 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 the Fund's shares to other than current shareholders and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may be compensated under the Plan for
its opportunity costs in advancing such amounts, which compensation would be
in the form of a carrying charge on any unreimbursed expenses by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses
incurred but not yet recovered may be recovered through future distribution
fees from the Fund and contingent deferred sales charges from the Fund's
shareholders.
The Distributor has informed the Fund that for the period ended July 31,
1995, it received approximately $78,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay
such charges which are not an expense of the Fund.
5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the period ended July 31, 1995 aggregated
$54,766,568 and $23,432,591, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $18,633,927 and
$15,060,006, respectively.
For the period ended July 31, 1995, the Fund incurred brokerage
commissions of $22,493 with DWR for portfolio transactions executed on behalf
of the Fund.
Dean Witter Trust Company, an affiliate of the Manager and Distributor, is
the Fund's transfer agent.
6. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
NOVEMBER 30, 1994*
THROUGH JULY 31,
1995
--------------------------
SHARES AMOUNT
----------- -------------
<S> <C> <C>
Sold ...................... 3,312,310 $34,211,447
Reinvestment of dividends 28,873 312,496
----------- -------------
3,341,183 34,523,943
Repurchased ............... (286,117) (3,149,766)
----------- -------------
Net increase .............. 3,055,066 $31,374,177
=========== =============
</TABLE>
- ---------------
* Commencement of operations.
<PAGE>
TCW/DW TOTAL RETURN TRUST
Financial Highlights
- -----------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout the period:
<TABLE>
<CAPTION>
FOR THE PERIOD
NOVEMBER 30, 1994*
THROUGH
JULY 31, 1995
------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .................... $ 10.00
------------------
Net investment income ................................... 0.21
Net realized and unrealized gain ........................ 1.68
------------------
Total from investment operations ........................ 1.89
------------------
Less dividends to shareholders from net investment
income ................................................. (0.14)
------------------
Net asset value, end of period .......................... $ 11.75
==================
TOTAL INVESTMENT RETURN+ ................................ 19.04%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................................ 0.94%(2)(3)
Net investment income ................................... 3.19%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................ $36,018
Portfolio turnover rate ................................. 91%(1)
</TABLE>
- ---------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
(3) InterCapital had undertaken to assume all operating expenses (except for
any 12b-1 and/or brokerage fees) and the Manager had agreed to waive the
compensation provided for its Management Agreement and the Adviser had
undertaken to waive the compensation provided for in its Advisory
Agreement, until such time as the Fund had $50 million of net assets or
until May 30, 1995, whichever occurred first. InterCapital will continue
to assume all operating expenses (except 12b-1 and/or brokerage fees) and
the Manager and Adviser will continue to waive their respective
compensation until such time as the Fund has $50 million of net assets or
until September 27, 1995, whichever occurs first. If the Fund had borne
all expenses, the above annualized expense and net investment income
ratios would have been 2.66% and 1.47%, respectively.
See Notes to Financial Statements
<PAGE>
TCW/DW TOTAL RETURN TRUST
Report of Independent Accountants
- -----------------------------------------------------------------------------
To the Shareholders and Trustees of TCW/DW Total Return 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 Total
Return Trust (the "Fund") at July 31, 1995, and the results of its
operations, the changes in its net assets and the financial highlights for
the period November 30, 1994 (commencement of operations) through July 31,
1995, 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 audit. We conducted our audit 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 audit, which included
confirmation of securities owned at July 31, 1995 by correspondence with the
custodian and brokers, provides a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
September 11, 1995
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Thomas E. Larkin, Jr.
President
Sheldon Curtis
Vice President, Secretary and
General Counsel
James A. Tilton
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
Dean Witter Services Company Inc.
ADVISER
TCW Funds Management, Inc.
This report is submitted for the general information of shareholders of the
Trust. For more detailed information about the Trust, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Trust.
This report is not authorized for distribution to prospective investors in
the Trust unless preceded or accompanied by an effective prospectus.
TCW/DW
TOTAL RETURN
TRUST
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ANNUAL REPORT
JULY 31, 1995
