N-30D 1 0001.txt FOR PERIOD ENDED APRIL 30, 2000 TCW GALILEO FUND April 30, 2000 SEMI-ANNUAL REPORT Money Market Core Fixed Income High Yield Bond Mortgage-Backed Securities Total Return Mortgage-Backed Securities [LOGO] TCW GALILEO FUNDS INC --------------------------------- THE POWER OF INDEPENDENT THINKING TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Table of Contents April 30, 2000 Letter to Shareholders................................................. 1 Performance Summary.................................................... 2 Schedules of Investments: TCW Galileo Money Market Fund........................................ 3 TCW Galileo Core Fixed Income Fund................................... 5 TCW Galileo High Yield Bond Fund..................................... 12 TCW Galileo Mortgage-Backed Securities Fund.......................... 19 TCW Galileo Total Return Mortgage-Backed Securities Fund............. 22 Statements of Assets and Liabilities................................... 25 Statements of Operations............................................... 26 Statements of Changes in Net Assets.................................... 27 Notes to Financial Statements.......................................... 30 Financial Highlights................................................... 41 [LOGO] [ICON] -------------------------------------------------------------------------------- To Our Shareholders We are pleased to submit the April 30, 2000 semi-annual reports for the TCW Galileo Funds. On the following page is an analysis of each Fund's investment performance for a 1 year, 5 year and since inception period through April 30, 2000. TCW is committed to providing you with superior professional investment management and distinctive personal service through the TCW Galileo Funds. The Funds' long-term investment performance record is among the best in the industry. In addition, TCW carefully monitors each Fund's overall expense ratio to maintain their competitiveness. The Galileo Mutual Funds continue to provide our clients with targeted investment strategies featuring daily liquidity, competitive management fees and no front end loads, or deferred sales charges. Please call our Shareholder Services Department at (800) FUND-TCW (386- 3829) if you have any questions or would like further information on the TCW Galileo Funds . /s/ Marc I. Stern Marc I. Stern Chairman of the Board June 2, 2000 1 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Performance Summary (Unaudited) April 30, 2000
Total Return -- Annualized As of April 30, 2000 ---------------------------------- Since NAV 1-Year 5-Year Inception Inception Date -------- -------- -------- --------- --------------- TCW Galileo Money Market Fund $1.00 5.21% 5.26% 5.61% (1) 07/14/88(2) TCW Galileo Core Fixed Income Fund -- Institutional Class $9.15 (0.50)% 6.18% 6.62% (1) 01/01/90(2) TCW Galileo Core Fixed Income Fund -- Advisory Class $9.24 (0.96)% N/A 0.05% 03/01/99 TCW Galileo High Yield Bond Fund -- Institutional Class $8.47 (2.15)% 7.27% 9.30% (1) 02/01/89(2) TCW Galileo High Yield Bond Fund -- Advisory Class $8.57 (2.12)% N/A 0.44% 03/01/99 TCW Galileo Mortgage-Backed Securities Fund $9.56 5.51% 6.59% 6.58% (1) 02/01/90(2) TCW Galileo Total Return Mortgage- Backed Securities Fund -- Institutional Class $8.77 0.17% 7.60% 6.02% 06/17/93 TCW Galileo Total Return Mortgage- Backed Securities Fund -- Advisory Class $9.02 1.14% N/A 0.29% 03/01/99
(1) Performance data includes the performance of the predecessor limited partnership for periods before the TCW Galileo Funds' registration became effective. The predecessor limited partnerships were not registered under the Investment Company Act of 1940, as amended ("1940 act"), and, therefore were not subject to certain investment restrictions that are imposed by the 1940 Act. if the limited partnership had been registered under the 1940 act, the limited partnership's performance may have been lower. (2) Inception date of predecessor limited partnership. 2 TCW Galileo Money Market Fund [ICON] -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) April 30, 2000
Principal Amount Fixed Income Securities Value ----------- ----------------------- ------------ Agency Securities (8.8% of Net Assets) $10,000,000 Federal National Mortgage Association, Floating Rate Note, 6.282%, due 07/14/00 $ 9,995,654 10,000,000 Student Loan Marketing Association, Variable Rate Note, 6.482%, due 11/09/00 9,998,965 ------------ Total Agency Securities (Cost: $19,994,619) 19,994,619 ------------ Commercial Paper (66.8%) 5,000,000 American Express Credit Corp., 5.99%, due 05/02/00 4,997,504 5,000,000 American Express Credit Corp., 5.99%, due 05/03/00 4,996,672 5,000,000 Associates Corp. of North America, 6.03%, due 05/01/00 4,998,325 3,700,000 Bellsouth Telecom, Inc., 5.97%, due 05/02/00 3,698,159 3,400,000 Bellsouth Telecom, Inc., 6%, due 05/02/00 3,398,300 2,900,000 Bellsouth Telecom, Inc., 6.15%, due 06/06/00 2,881,174 10,000,000 Chevron Corp., 5.98%, due 05/04/00 9,991,694 7,850,000 Ciesco L.P., 6%, due 05/10/00 7,835,608 5,000,000 Du Pont (E.I.) De Nemours & Co., Inc., 5.98%, due 05/05/00 4,995,017 10,000,000 General Electric Capital Corp., 6.03%, due 05/01/00 9,996,650 10,000,000 Goldman Sachs, Inc., 6.06%, due 05/01/00 9,996,633 7,500,000 International Lease Finance Corp., 6%, due 05/25/00 7,467,500 7,800,000 Merrill Lynch & Company, Inc., 6%, due 05/03/00 7,794,800 6,000,000 Metlife Funding, Inc., 6%, due 05/01/00 5,998,000 5,000,000 Paccar Financial Corp., 6%, due 05/08/00 4,992,500 6,800,000 Pacific Life Insurance, 6.01%, due 05/10/00 6,787,513 5,215,000 PepsiCo, Inc., 5.97%, due 05/03/00 5,211,541 10,000,000 Riverwoods Funding Corp., 6.02%, due 05/17/00 9,969,900 2,478,000 Sara Lee Corp., 6.02%, due 05/12/00 2,472,613 6,000,000 Schering-Plough Corp., 5.98%, due 05/11/00 5,988,040 9,063,000 Smithkline Beecham Corp., 6.01%, due 05/05/00 9,053,922 7,900,000 United Parcel Service, Inc., 5.96%, due 05/01/00 7,897,384 10,000,000 USAA Capital Corp., 5.9%, due 05/16/00 9,972,139 ------------ Total Commercial Paper (Cost: $151,391,588) 151,391,588 ------------ Corporate Fixed Income Securities (24.2%) 4,650,000 Associates Corp. of North America, 5.85%, due 01/15/01 4,620,097 4,000,000 CIT Group, Inc., 5%, due 10/06/00 3,973,693 6,000,000 CIT Group, Inc., 5.8%, due 07/20/00 6,000,971 10,000,000 Ford Motor Credit Corp., 6.25%, due 11/08/00 9,987,225 9,800,000 IBM Credit Corp., 6.375%, due 06/15/00 9,806,664 2,400,000 International Lease Finance Corp., 5.875%, due 01/15/01 2,386,839 8,200,000 Nationsbank N.A., 5.75%, due 03/15/01 8,133,800
See accompanying notes to financial statements. 3 TCW Galileo Money Market Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued)
Principal Amount Value ----------- ------------ Corporate Fixed Income Securities (Continued) $ 5,000,000 Paccar Financial Corp., 5.25%, due 10/19/00 $ 4,979,912 5,000,000 Pitney Bowes Credit Corp., 5.95%, due 09/29/00 5,000,000 ------------ Total Corporate Fixed Income Securities (Cost: $54,889,201) 54,889,201 ------------ Total Fixed Income Securities (Cost: $226,275,408) (99.8%) 226,275,408 ------------ Short-Term Investments (Cost: $25,309) (0.0%) --------------------------------------------- 25,309 Investors Bank & Trust Depository Reserve, 4.85%, due 05/01/00 25,309 ------------ Total Investments (Cost: $226,300,717) (99.8%) 226,300,717 Excess of Other Assets over Liabilities (0.2%) 358,563 ------------ Net Assets (100.0%) $226,659,280 ============
See accompanying notes to financial statements. 4 TCW Galileo Core Fixed Income Fund [ICON] -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) April 30, 2000 Principal Amount Fixed Income Securities Value ---------- ----------------------- ----------- Corporate Bonds Aerospace/Defense (0.1% of Net Assets) $ 75,000 BE Aerospace, Inc., 9.5%, due 11/01/08 $ 65,625 ----------- Automotive (0.4%) 25,000 American Axle & Manufacturing Holdings, Inc., 9.75%, due 03/01/09 23,812 70,000 Hayes Lemmerz International, Inc., 8.25%, due 12/15/08 59,850 75,000 JL French Automotive Castings, Inc., 11.5%, due 06/01/09 74,062 75,000 Transportation Manufacturing Operation Co., 11.25%, due 05/01/09 72,000 ----------- Total Automotive 229,724 ----------- Banking & Financial Services (2.5%) 400,000 Abbey National PLC, 6.69%, due 10/17/05 378,000 50,000 Forest City Enterprises, Inc., 8.5%, due 03/15/08 45,250 75,000 Metris Companies, Inc., 10.125%, due 07/15/06 72,000 500,000 National Rural Utilities Cooperative Financial Corp., 5%, due 10/01/02 473,430 100,000 NationsBank Corp., 7.5%, due 09/15/06 98,000 60,000 Security Pacific Corp., 11.5%, due 11/15/00 61,350 200,000 Wells Fargo & Co., 7.2%, due 05/01/03 198,660 ----------- Total Banking & Financial Services 1,326,690 ----------- Building Materials (0.2%) 75,000 Juno Lighting, Inc., 11.875%, due 07/01/09 63,000 75,000 NCI Building Systems, Inc., 9.25%, due 05/01/09 68,625 ----------- Total Building Materials 131,625 ----------- Chemicals (1.3%) 5,000 GEO Specialty Chemicals, Inc., 10.125%, due 08/01/08 4,300 600,000 IMC Global, Inc., 6.5%, due 08/01/03 572,922 50,000 Lyondell Chemical Companies, Inc., 10.875%, due 05/01/09 49,500 50,000 Polymer Group, Inc., 8.75%, due 03/01/08 44,750 ----------- Total Chemicals 671,472 ----------- Commercial Services (0.6%) 150,000 Stericycle, Inc., 12.375%, due 11/15/09 151,500 75,000 United Rentals, Inc., 9.25%, due 01/15/09 66,750 50,000 United Rentals, Inc., 9.5%, due 06/01/08 45,750 50,000 Williams Scotsman, Inc., 9.875%, due 06/01/07 45,500 ----------- Total Commercial Services 309,500 ----------- Computer Services (0.4%) 50,000 Anteon Corp., 12%, due 05/15/09 45,000 200,000 PSINet, Inc., 11%, due 08/01/09 180,000 ----------- Total Computer Services 225,000 ----------- Construction (0.6%) 200,000 General Electric Global Insurance Corp., 7%, due 02/15/26 181,124 See accompanying notes to financial statements. 5 TCW Galileo Core Fixed Income Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ----------- Construction (Continued) $ 75,000 Hovnanian Enterprises, Inc., 9.125%, due 05/01/09 $ 65,625 75,000 Lennar Corp., 9.95%, due 05/01/10 71,437 ----------- Total Construction 318,186 ----------- Containers & Packaging (0.4%) 75,000 Anchor Glass Container Corp., 9.875%, due 03/15/08 47,250 50,000 Consolidated Container Companies, LLC, (144A), 10.125%, due 07/15/09 50,000* 75,000 Consumers Packaging, Inc., 9.75%, due 02/01/07 39,750 50,000 U.S. Can Corp., Series B, 10.125%, due 10/15/06 52,500 ----------- Total Containers & Packaging 189,500 ----------- Electronics (0.6%) 75,000 360networks, Inc., (144A), 13%, due 05/01/08 73,687* 200,000 Litton Industries, Inc., 6.05%, due 04/15/03 190,500 55,000 Viasystems, Inc., 9.75%, due 06/01/07 47,025 ----------- Total Electronics 311,212 ----------- Energy & Oil Services (3.1%) 300,000 Coastal Corp., 6.95%, due 06/01/28 255,927 100,000 Forest Oil Corp., 10.5%, due 01/15/06 101,000 100,000 Grey Wolf, Inc., 8.875%, due 07/01/07 92,000 15,000 Gulf Canada Resources, Ltd., 9.25%, due 01/15/04 15,022 250,000 Occidental Petroleum Corp., 7.65%, due 02/15/06 242,450 50,000 P&L Coal Holdings Corp., 9.625%, due 05/15/08 44,500 125,000 Pride International, Inc., 10%, due 06/01/09 125,000 150,000 Sonat, Inc., 6.75%, due 10/01/07 139,500 100,000 Trans-Canada Pipelines, Ltd., 7.06%, due 10/14/25 89,250 400,000 Trans-Canada Pipelines, Ltd., 7.7%, due 06/15/29 390,528 200,000 Transcontinental Gas Pipe Lines, 6.25%, due 01/15/08 179,500 ----------- Total Energy & Oil Services 1,674,677 ----------- Entertainment & Leisure (0.9%) 150,000 Hollywood Park, Inc., 9.25%, due 02/15/07 148,500 50,000 International Game Technology, Inc., 8.375%, due 05/15/09 46,375 100,000 Marvel Enterprises, Inc., 12%, due 06/15/09 78,000 75,000 Mohegan Tribal Gaming, Inc., 8.75%, due 01/01/09 71,250 125,000 SFX Entertainment, Inc., 9.125%, due 12/01/08 125,625 ----------- Total Entertainment & Leisure 469,750 ----------- Foods, Hotels & Restaurants (0.2%) 100,000 New World Pasta Company, Inc., 9.25%, due 02/15/09 75,000 100,000 Signature Resorts/Sunterra, Inc., 9.25%, due 05/15/06 50,000 ----------- Total Foods, Hotels & Restaurants 125,000 ----------- Healthcare (1.0%) 75,000 Bio-Rad Laboratories, Inc., (144A), 11.625%, due 02/15/07 76,875* 75,000 Concentra Operating Corp., (144A), 13%, due 08/15/09 54,000* 100,000 Express Scripts, Inc., 9.625%, due 06/15/09 94,500 See accompanying notes to financial statements. 6 [ICON] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value ---------- ----------- Healthcare (Continued) $ 75,000 Hanger Orthopedic Group, Inc., 11.25%, due 06/15/09 $ 58,125 150,000 Hudson Respiratory Care, Inc., 9.125%, due 04/15/08 114,000 50,000 Prime Medical Services, Inc., 8.75%, due 04/01/08 42,000 75,000 Unilab Finance Corp., 12.75%, due 09/28/09 74,812 ----------- Total Healthcare 514,312 ----------- Household Products (0.1%) 29,000 Boyds Collection, Ltd., 9%, due 05/15/08 25,665 25,000 Home Interiors & Gifts, Inc., 10.125%, due 06/01/08 19,750 ----------- Total Household Products 45,415 ----------- Machinery (0.4%) 250,000 United Tech Corp., 7.5%, due 09/15/29 241,982 ----------- Media--Broadcasting & Publishing (2.3%) 75,000 American Media Operations, Inc., 10.25%, due 05/01/09 71,063 150,000 Classic Cable, Inc., 9.375%, due 08/01/09 140,625 300,000 Cox Communications, Inc., 7.5%, due 08/15/04 293,304 20,000 Garden State Newspapers, Inc., 8.625%, due 07/01/11 17,400 50,000 Primedia, Inc., 7.625%, due 04/01/08 45,500 75,000 Sinclair Broadcasting Group, Inc., 9%, due 07/15/07 66,750 50,000 Sinclair Broadcasting Group, Inc., 10%, due 09/30/05 47,688 100,000 Spanish Broadcasting System, Inc., 9.625%, due 11/01/09 97,750 25,000 STC Broadcasting, Inc., 11%, due 03/15/07 24,750 100,000 TV Guide, Inc., 8.125%, due 03/01/09 100,000 300,000 UIH Australia/Pacific, Inc., 0%, due 05/15/06 271,500 75,000 WRC Media Corp., 12.75%, due 11/15/09 72,000 ----------- Total Media--Broadcasting & Publishing 1,248,330 ----------- Metals (0.5%) 175,000 International Wire Group, Inc., Series B, 11.75%, due 06/01/05 179,813 100,000 Neenah Corp., 11.125%, due 05/01/07 78,000 40,000 Wheeling Pittsburgh Corp., 9.25%, due 11/15/07 36,400 ----------- Total Metals 294,213 ----------- Pollution Control (0.0%) 25,000 Allied Waste North America, Inc., 7.625%, due 01/01/06 18,750 50,000 Safety-Kleen Corp., 9.25%, due 05/15/09 1,500 50,000 Safety-Kleen Services, Inc., 9.25%, due 06/01/08 3,000 ----------- Total Pollution Control 23,250 ----------- Telecommunications (1.1%) 75,000 ICG Holdings, Inc., 0%, due 05/01/06 60,723 100,000 Nextlink Communications, Inc., 10.75%, due 06/01/09 98,500 100,000 Northern Telecom Capital Corp., 7.4%, due 06/15/06 98,250 100,000 Primus Telecom Group, Inc., 12.75%, due 10/15/09 100,000 See accompanying notes to financial statements. 7 TCW Galileo Core Fixed Income Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ----------- Telecommunications (Continued) $ 75,000 Rhythms NetConnections, Inc., 12.75%, due 04/15/09 $ 63,750 160,000 US West Capital Funding, Inc., 6.25%, due 07/15/05 148,960 ----------- Total Telecommunications 570,183 ----------- Textiles, Clothing & Fabrics (0.1%) 50,000 Westpoint Stevens, Inc., 7.875%, due 06/15/08 40,000 ----------- Transportation (1.3%) 300,000 American Airlines, Inc., 7.024%, due 10/15/09 282,066 200,000 Continental Airlines, Inc., 7.056%, due 09/15/09 190,764 150,000 Southwest Airlines Co., 7.375%, due 03/01/27 141,938 75,000 Western Star Trucks Holdings, Ltd., 8.75%, due 05/01/07 69,750 ----------- Total Transportation 684,518 ----------- Utilities (1.7%) 400,000 Carolina Power & Light Corp., 5.95%, due 03/01/09 351,576 500,000 PP & L Capital Funding, 7.75%, due 04/15/05 488,750 75,000 TNP Enterprises, Inc., (144A), 10.25%, due 04/01/10 75,563* ----------- Total Utilities 915,889 ----------- Total Corporate Bonds (Cost: $11,367,763) (19.8%) 10,626,053 ----------- Asset Backed Securities (0.8%) 170,866 Southern Pacific Secured Assets Corp. (97-3-A4), 6.66%, due 06/25/24 169,561 250,000 Standard Credit Card Trust 93, 5.95%, due 10/07/04 239,605 ----------- Total Asset Backed Securities (Cost: $417,186) 409,166 ----------- Collateralized Mortgage Obligations (31.5%) 1,584,438 ABN Amro Mortgage Corp. (98-4-A6), 6.75%, due 11/25/28 (TAC) 1,401,115 239,195 Bear Stearns Mortgage Securities, Inc. (97-2-A2), 6.5%, due 04/28/24 232,765 122,455 Bear Stearns Mortgage Securities, Inc. (97-2-A5), 6.875%, due 01/28/24 115,490 508,447 Citicorp Mortgage Securities (98-5-A1), 6.75%, due 03/25/25 482,846 435,147 Countrywide Home Loans (97-8-A1), 6.75%, due 01/25/28 433,180 2,473,599 Federal Home Loan Mortgage Corp. (1468-ZA), 7%, due 02/15/22 (PAC) 2,335,696 41,429 Federal Home Loan Mortgage Corp. (1578-O), 7%, due 09/15/23 (PAC) 38,897 781,000 Federal Home Loan Mortgage Corp. (1588-QD), 6.5%, due 09/15/23 (PAC) 708,500 450,000 Federal Home Loan Mortgage Corp. (1944-GB), 7.5%, due 04/17/24 448,241 1,000,000 Federal Home Loan Mortgage Corp. (2018-H), 6.5%, due 01/15/28 (PAC) 970,550 1,000,000 Federal Home Loan Mortgage Corp. (2043-CH), 6%, due 08/15/26 (PAC) 905,890 See accompanying notes to financial statements. 8 [ICON] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value ---------- ----------- Collateralized Mortgage Obligations (Continued) $1,000,000 Federal Home Loan Mortgage Corp. (2061-TA), 5.25%, due 10/15/27 (PAC) $ 827,520 500,000 Federal Home Loan Mortgage Corp. (2063-PV), 6.25%, due 10/15/26 (PAC) 460,590 2,000,000 Federal Home Loan Mortgage Corp. (2151-JE), 6%, due 01/15/27 1,722,200 16,357 Federal Home Loan Mortgage Corp.-Government National Mortgage Association (41-K), 8%, due 04/25/24 (TAC) 16,322 555,485 Federal National Mortgage Association (94-2-N), 6.5%, due 01/25/24 (TAC) 510,869 404,327 Federal National Mortgage Association (G3-40-ZC), 6.5%, due 12/25/23 371,366 1,455,943 Financial Asset Securitization, Inc. (97-NAM1-A4), 7.75%, due 05/25/27 1,391,652 1,000,000 GE Capital Mortgage Services, Inc. (99-15-A12), 7%, due 08/25/29 937,060 972,464 Norwest Asset Securities Corp. (97-8-A4), 7.5%, due 06/25/27 927,672 433,521 Norwest Asset Securites Corp. (97-15-A1), 6.75%, due 10/25/12 417,910 350,000 Residential Funding Mortgage Securities I (97-S2-A7), 7%, due 12/25/27 324,640 480,561 Residential Funding Mortgage Securities I (97-S5-A2), 7.5%, due 04/25/27 473,093 400,000 Residential Funding Mortgage Securities I (98-S8-A3), 6.5%, due 04/25/28 356,624 ----------- Total Collateralized Mortgage Obligations (Cost: $17,628,161) 16,810,688 ----------- Foreign Government Bonds & Notes (8.9%) CAD 710,000 Canada (Government of), 5%, due 09/01/04 456,747 EUR 195,000 Federal Republic of Germany, 5.125%, due 11/21/00 178,446 EUR 795,000 Federal Republic of Germany, 6.5%, due 10/14/05 769,450 EUR 1,046,000 French O.A.T., 5.25%, due 04/25/08 948,246 EUR 94,000 Hypothekenbk In Essen (Germany), 4.25%, due 07/06/09 76,471 EUR 235,000 Kingdom of Belgium, 6.25%, due 03/28/28 224,000 DKK 1,105,000 Kingdom of Denmark, 7%, due 12/15/04 142,603 SEK 2,200,000 Kingdom of Sweden, 5%, due 01/15/04 243,352 EUR 260,000 Kingdom of the Netherlands, 6.5%, due 04/15/03 249,275 AUD 75,000 New South Wales Treasury Corp., 5.5%, due 10/01/02 42,666 200,000 Province of Manitoba (Canada), 5.5%, due 10/01/08 176,750 200,000 Province of Quebec (Canada), 7%, due 01/30/07 196,644 AUD 88,000 Queensland Government Developmental Authority (Australia), 8%, due 05/14/03 53,341 EUR 426,000 Spain (Government of), 5.25%, due 01/31/03 391,311 See accompanying notes to financial statements. 9 TCW Galileo Core Fixed Income Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ----------- Foreign Government Bonds & Notes (Continued) $ 400,000 The Dominion of New Zealand, 8.75%, due 12/15/06 $ 430,052 GBP 125,000 United Kingdom Treasury Strip, 7%, due 06/07/02 198,784 ----------- Total Foreign Government Bonds & Notes (Cost: $5,351,938) 4,778,138 ----------- U.S. Government Agency Obligations (13.6%) $ 600,000 Federal Home Loan Mortgage Corp., 5%, due 01/15/04 556,524 850,000 Federal Home Loan Mortgage Corp., 5.5%, due 05/15/02 824,730 964,043 Federal Home Loan Mortgage Corp., Pool #786793, 6.984%, due 10/01/29 936,548 2,050,000 Federal National Mortgage Association, 5.25%, due 01/15/03 1,954,265 1,150,000 Federal National Mortgage Association, 5.25%, due 01/15/09 996,153 1,150,000 Federal National Mortgage Association, 6%, due 05/15/08 1,058,518 970,773 Federal National Mortgage Association, Pool # 510299, 6.705%, due 08/01/29 932,861 ----------- Total U.S. Government Agency Obligations (Cost: $7,387,186) 7,259,599 ----------- U.S. Treasury Bonds (7.3%) 1,900,000 United States Treasury Bonds, 6.125%, due 11/15/27 1,882,501 600,000 United States Treasury Bonds, 8.5%, due 02/15/20 748,452 700,000 United States Treasury Bonds, 10.625%, due 08/15/15 988,456 200,000 United States Treasury Bonds, 12%, due 08/15/13 267,282 ----------- Total U.S. Treasury Bonds (Cost: $3,876,639) 3,886,691 ----------- U.S. Treasury Notes (9.4%) 1,400,000 United States Treasury Notes, 5.5%, due 03/31/03 1,358,070 700,000 United States Treasury Notes, 5.75%, due 06/30/01 693,455 600,000 United States Treasury Notes, 5.875%, due 10/31/01 593,202 80,000 United States Treasury Notes, 5.875%, due 11/15/05 77,506 550,000 United States Treasury Notes, 6.125%, due 12/31/01 545,149 1,050,000 United States Treasury Notes, 6.25%, due 02/15/07 1,035,069 700,000 United States Treasury Notes, 6.5%, due 10/15/06 697,998 ----------- Total U.S. Treasury Notes (Cost: $5,037,281) 5,000,449 ----------- Total Fixed Income Securities (Cost: $51,066,154) (91.3%) 48,770,784 ----------- Short-Term Investments ---------------------- 249,903 American Express Co., 6.063%, due 05/10/00 249,903** 249,903 American Express Co., 6.09%, due 05/22/00 249,903** 416,504 American Express Co., 6.1%, due 05/01/00 416,504** 333,203 Bank of America, 6.18%, due 06/20/00 333,203** 166,602 Bank of Nova Scotia, 6.05%, due 05/08/00 166,602** 333,203 BNP Paribas, S.A., 6.05%, due 05/10/00 333,203** 333,203 Credit Agricole, 6%, due 05/03/00 333,203** See accompanying notes to financial statements. 10 [ICON] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Short-Term Investments (Continued) Value ---------- ---------------------------------- ----------- $1,065,253 Fleet National Bank, 6.193%, due 10/31/00 $ 1,065,253** 800,594 Foreign Currency Call Accounts 800,594 3,563,011 Investors Bank & Trust Depository Reserve, 4.85%, due 05/01/00 3,563,011 602,774 Merrimac Money Market Fund 602,774** 166,602 Morgan Stanley Dean Witter & Co., 6.15%, due 11/22/00 166,602** ----------- Total Short-Term Investments (Cost: $8,280,755) (15.5%) 8,280,755 ----------- Total Investments (Cost: $59,346,909) (106.8%) 57,051,539 Liabilities in Excess of Other Assets (-6.8%) (3,620,528) ----------- Net Assets (100.0%) $53,431,011 =========== Notes to the Schedule of Investments: AUD - Australian Dollar. CAD - Canadian Dollar. DKK - Danish Krone. EUR - Euro Currency. GBP - British Pound Sterling. SEK - Swedish Krona. PAC - Planned Amortization Class. TAC - Target Amortization Class. * Restricted security (Note 9). ** Represents investments of security lending collateral (Note 3). See accompanying notes to financial statements. 11 TCW Galileo High Yield Bond Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) Principal Amount Fixed Income Securities Value ---------- ----------------------- ------------ Advertising (0.7% of Net Assets) $1,245,000 Adams Outdoor Advertising, L.P., 10.75%, due 03/15/06 $ 1,269,900 ------------ Aerospace/Defense (0.8%) 600,000 BE Aerospace, Inc., 8%, due 03/01/08 483,000 1,295,000 BE Aerospace, Inc., 9.5%, due 11/01/08 1,133,125 ------------ Total Aerospace/Defense 1,616,125 ------------ Automotive (4.2%) 725,000 American Axle & Manufacturing Holdings, Inc., 9.75%, due 03/01/09 690,562 1,900,000 Federal-Mogul Corp., 7.875%, due 07/01/10 1,447,458 1,850,000 Hayes Lemmerz International, Inc., 8.25%, due 12/15/08 1,581,750 970,000 Hayes Lemmerz International, Inc., 9.125%, due 07/15/07 887,550 1,300,000 JL French Automotive Castings, Inc., 11.5%, due 06/01/09 1,283,750 1,500,000 Lear Corp., Series B, 8.11%, due 05/15/09 1,338,990 170,000 Navistar International Corp., 8%, due 02/01/08 159,800 700,000 Transportation Manufacturing Operation Co., 11.25%, due 05/01/09 672,000 ------------ Total Automotive 8,061,860 ------------ Banking & Financial Services (3.0%) 2,600,000 AmeriCredit Corp., 9.875%, due 04/15/06 2,548,000 165,000 Chevy Chase Savings Bank, 9.25%, due 12/01/05 157,575 880,000 Chevy Chase Savings Bank, 9.25%, due 12/01/08 836,000 1,245,000 Forest City Enterprises, Inc., 8.5%, due 03/15/08 1,126,725 1,050,000 Metris Companies, Inc., 10.125%, due 07/15/06 1,008,000 ------------ Total Banking & Financial Services 5,676,300 ------------ Building Materials (1.1%) 285,000 Building Materials Corp., 8.625%, due 12/15/06 252,937 700,000 Juno Lighting, Inc., 11.875%, due 07/01/09 588,000 1,500,000 NCI Building Systems, Inc., 9.25%, due 05/01/09 1,372,500 ------------ Total Building Materials 2,213,437 ------------ Chemicals (5.2%) 1,555,000 Borden Chemicals & Plastics, L.P., 9.5%, due 05/01/05 1,453,925 350,000 General Chemical Industrial Products, 10.625%, due 05/01/09 301,000 1,000,000 Gentek, Inc., 11%, due 08/01/09 1,005,000 75,000 GEO Specialty Chemicals, Inc., 10.125%, due 08/01/08 64,500 1,175,000 Huntsman ICI Chemicals, LLC, 10.125%, due 07/01/09 1,169,125 915,000 Huntsman Industries/Specialty Chemical Corp., (144A), 9.5%, due 07/01/07 837,225* 1,325,000 ISP Holdings, Inc., 9%, due 10/15/03 1,192,500 1,450,000 Lyondell Chemical Companies, Inc., 9.625%, due 05/01/07 1,435,500 600,000 Lyondell Chemical Companies, Inc., 10.875%, due 05/01/09 594,000 205,000 Polymer Group, Inc., 8.75%, due 03/01/08 183,475 See accompanying notes to financial statements. 12 [ICON] ------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value ---------- ------------ Chemicals (Continued) $ 750,000 Sterling Chemicals, Inc., Series B, 12.375%, due 07/15/06 $ 766,875 1,215,000 Texas Petrochemicals Corp., 11.125%, due 07/01/06 996,300 ------------ Total Chemicals 9,999,425 ------------ Commercial Services (2.4%) 35,000 Anthony Crane Rentals, L.P., 10.375%, due 08/01/08 24,850 825,000 Avis Rent A Car, Inc., 11%, due 05/01/09 860,062 1,300,000 Stericycle, Inc., 12.375%, due 11/15/09 1,313,000 175,000 United Rentals, Inc., 9%, due 04/01/09 153,125 425,000 United Rentals, Inc., 9.25%, due 01/15/09 378,250 650,000 United Rentals, Inc., 9.5%, due 06/01/08 594,750 1,365,000 Williams Scotsman, Inc., 9.875%, due 06/01/07 1,242,150 ------------ Total Commercial Services 4,566,187 ------------ Computer Services (2.5%) 1,500,000 Anteon Corp., 12%, due 05/15/09 1,350,000 730,000 infoUSA, Inc., 9.5%, due 06/15/08 642,400 1,250,000 PSINet, Inc., 10.5%, due 12/01/06 1,125,000 1,900,000 PSINet, Inc., 11%, due 08/01/09 1,710,000 ------------ Total Computer Services 4,827,400 ------------ Conglomerates (0.3%) 620,000 Insilco Corp., 12%, due 08/15/07 585,900 ------------ Construction (1.3%) 1,025,000 Atrium Companies, Inc., 10.5%, due 05/01/09 966,062 650,000 Hovnanian Enterprises, Inc., 9.125%, due 05/01/09 568,750 600,000 Lennar Corp., 9.95%, due 05/01/10 571,500 460,000 Standard Pacific Corp., 8%, due 02/15/08 397,900 ------------ Total Construction 2,504,212 ------------ Containers & Packaging (3.7%) 950,000 Anchor Glass Container Corp., 9.875%, due 03/15/08 598,500 430,000 BWAY Corp., 10.25%, due 04/15/07 384,850 500,000 Consolidated Container Companies, LLC, (144A), 10.125%, due 07/15/09 500,000* 700,000 Consumers International, Inc., 10.25%, due 04/01/05 455,000 665,000 Consumers Packaging, Inc., 9.75%, due 02/01/07 352,450 780,000 Huntsman Packaging Corp., 9.125%, due 10/01/07 803,400 745,000 Paperboard Industries International, Inc., 8.375%, due 09/15/07 659,325 3,100,000 U.S. Can Corp., Series B, 10.125%, due 10/15/06 3,255,000 ------------ Total Containers & Packaging 7,008,525 ------------ Electronics (3.9%) 1,650,000 360networks, Inc., (144A), 13%, due 05/01/08 1,621,125* 1,905,000 Ametek, Inc., 7.2%, due 07/15/08 1,693,907 1,635,000 Communications & Power Industries, Inc., 12%, due 08/01/05 1,283,475 See accompanying notes to financial statements. 13 TCW Galileo High Yield Bond Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ------------ Electronics (Continued) $2,035,000 International Wire Group, Inc., 11.75%, due 06/01/05 $ 2,090,962 615,000 Viasystems, Inc., 9.75%, due 06/01/07 525,825 255,000 Wavetek Corp., 10.125%, due 06/15/07 276,114 ------------ Total Electronics 7,491,408 ------------ Energy & Oil Services (4.9%) 1,985,000 Forest Oil Corp., 10.5%, due 01/15/06 2,004,850 675,000 Grey Wolf, Inc., 8.875%, due 07/01/07 621,000 35,000 Gulf Canada Resources, Ltd., 9.25%, due 01/15/04 35,051 275,000 Gulf Canada Resources, Ltd., 9.625%, due 07/01/05 278,869 1,190,000 Magnum Hunter Resources, Inc., 10%, due 06/01/07 1,068,025 1,175,000 Plains Resources, Inc., 10.25%, due 03/15/06 1,128,000 1,100,000 Pride International, Inc., 10%, due 06/01/09 1,100,000 1,800,000 R&B Falcon Corp., 9.5%, due 12/15/08 1,746,000 425,000 Swift Energy Company, Inc., 10.25%, due 08/01/09 412,250 1,025,000 Trico Marine Services, Inc., Series G, 8.5%, due 08/01/05 927,625 ------------ Total Energy & Oil Services 9,321,670 ------------ Entertainment & Leisure (7.4%) 1,200,000 Alliance Atlantis Communications Corp., 13%, due 12/15/09 1,200,000 1,395,000 Boyd Gaming Corp., 9.25%, due 10/01/03 1,370,588 1,435,000 Cinemark USA, Inc., Series B, 9.625%, due 08/01/08 1,004,500 1,005,000 Harrahs Operating Company, Inc., 7.875%, due 12/15/05 937,163 1,665,000 Hollywood Park, Inc., 9.25%, due 02/15/07 1,648,350 1,100,000 International Game Technology, Inc., 8.375%, due 05/15/09 1,020,250 1,245,000 Marvel Enterprises, Inc., 12%, due 06/15/09 971,100 1,095,000 Mohegan Tribal Gaming, Inc., 8.75%, due 01/01/09 1,040,250 1,000,000 Park Place Entertainment, Inc., 9.375%, due 02/15/07 990,000 825,000 Regal Cinemas, Inc., 8.875%, due 12/15/10 297,000 905,000 Regal Cinemas, Inc., 9.5%, due 06/01/08 371,050 400,000 SFX Entertainment, Inc., 9.125%, due 02/01/08 402,000 1,495,000 SFX Entertainment, Inc., 9.125%, due 12/01/08 1,502,475 1,430,000 Station Casinos, Inc., 9.75%, due 04/15/07 1,430,000 ------------ Total Entertainment & Leisure 14,184,726 ------------ Foods, Hotels & Restaurants (5.5%) 1,300,000 Boca Resorts, Inc., 9.875%, due 04/15/09 1,189,500 620,000 Cott Corp., 9.375%, due 07/01/05 598,300 1,025,000 Di Giorgio Corp., 10%, due 06/15/07 912,250 480,000 HMH Properties, Inc., 7.875%, due 08/01/08 416,400 2,265,000 International Home Foods, Inc., 10.375%, due 11/01/06 2,242,350 1,750,000 ITT Corp., 6.75%, due 11/15/05 1,535,888 100,000 ITT Corp. (New), 6.25%, due 11/15/00 98,804 1,350,000 La Quinta/Meditrust, Inc., 7.11%, due 10/17/01 1,120,500 1,215,000 New World Pasta Company, Inc., 9.25%, due 02/15/09 911,250 1,115,000 Packaged Ice, Inc., 9.75%, due 02/01/05 903,150 See accompanying notes to financial statements. 14 [ICON] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value ---------- ------------ Foods, Hotels & Restaurants (Continued) $ 325,000 Signature Resorts/Sunterra, Inc., 9.25%, due 05/15/06 $ 162,500 1,100,000 Signature Resorts/Sunterra, Inc., 9.75%, due 10/01/07 363,000 ------------ Total Foods, Hotels & Restaurants 10,453,892 ------------ Healthcare (4.9%) 1,200,000 Bio-Rad Laboratories, Inc., (144A), 11.625%, due 02/15/07 1,230,000* 1,850,000 Concentra Operating Corp., (144A), 13%, due 08/15/09 1,332,000* 1,350,000 Express Scripts, Inc., 9.625%, due 06/15/09 1,275,750 1,175,000 Hanger Orthopedic Group, Inc., 11.25%, due 06/15/09 910,625 645,000 Hudson Respiratory Care, Inc., 9.125%, due 04/15/08 490,200 395,000 Insight Health Services Corp., Series B, 9.625%, due 06/15/08 341,675 890,000 Prime Medical Services, Inc., 8.75%, due 04/01/08 747,600 1,400,000 Tenet Healthcare Corp., 8.125%, due 12/01/08 1,302,000 980,000 Tenet Healthcare Corp., 8.625%, due 01/15/07 943,250 900,000 Unilab Finance Corp., 12.75%, due 09/28/09 897,750 ------------ Total Healthcare 9,470,850 ------------ Household Products (1.2%) 383,000 Boyds Collection, Ltd., 9%, due 05/15/08 338,955 1,420,000 Home Interiors & Gifts, Inc., 10.125%, due 06/01/08 1,121,800 400,000 Owens-Illinois, Inc., 7.15%, due 05/15/05 363,600 500,000 Owens-Illinois, Inc., 7.5%, due 05/15/10 438,040 ------------ Total Household Products 2,262,395 ------------ Machinery (0.2%) 355,000 AGCO Corp., 8.5%, due 03/15/06 315,950 ------------ Media--Broadcasting & Publishing (15.0%) 1,500,000 Acme Television Corp., 0%, due 09/30/04 1,372,500 1,000,000 Adelphia Communications Corp., 9.375%, due 11/15/09 937,500 400,000 Adelphia Communications Corp., Series B, 9.25%, due 10/01/02 396,000 1,700,000 American Media Operations, Inc., 10.25%, due 05/01/09 1,610,750 295,000 Century Communications Corp., 9.5%, due 03/01/05 284,675 450,000 Charter Communications Holdings, LLC, 0%, due 04/01/11 246,375 1,000,000 Charter Communications Holdings, LLC, (144A), 10%, due 04/01/09 965,000* 1,400,000 Classic Cable, Inc., 9.375%, due 08/01/09 1,312,500 2,000,000 Classic Cable, Inc., (144A), 10.5%, due 03/01/10 1,960,000* 585,000 CSC Holdings, Inc., 7.625%, due 07/15/18 509,863 1,600,000 EchoStar DBS Corp., 9.375%, due 02/01/09 1,548,000 1,100,000 Garden State Newspapers, Inc., 8.625%, due 07/01/11 957,000 275,000 Garden State Newspapers, Inc., 8.75%, due 10/01/09 242,688 60,000 Hollinger International Publishing, Inc., 8.625%, due 03/15/05 58,200 175,000 Hollinger International Publishing, Inc., 9.25%, due 03/15/07 169,750 950,000 K-III Communications Corp., 8.5%, due 02/01/06 912,000 See accompanying notes to financial statements. 15 TCW Galileo High Yield Bond Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ------------ Media--Broadcasting & Publishing (Continued) $ 295,000 Primedia, Inc., 7.625%, due 04/01/08 $ 268,450 495,000 Rogers Cablesystems, Ltd., 10%, due 03/15/05 519,750 625,000 Rogers Communications, Inc., 8.875%, due 07/15/07 603,125 600,000 Sinclair Broadcasting Group, Inc., 9%, due 07/15/07 534,000 1,700,000 Sinclair Broadcasting Group, Inc., 10%, due 09/30/05 1,621,375 2,500,000 Spanish Broadcasting System, Inc., 9.625%, due 11/01/09 2,443,750 1,950,000 STC Broadcasting, Inc., 11%, due 03/15/07 1,930,500 2,475,000 TV Guide, Inc., 8.125%, due 03/01/09 2,475,000 2,850,000 UIH Australia/Pacific, Inc., 0%, due 05/15/06 2,579,250 905,000 Von Hoffmann Press, Inc., (144A), 10.875%, due 05/15/07 814,500* 1,500,000 WRC Media Corp., 12.75%, due 11/15/09 1,440,000 ------------ Total Media--Broadcasting & Publishing 28,712,501 ------------ Metals (4.0%) 850,000 California Steel Industries, Series B, 8.5%, due 04/01/09 799,000 1,080,000 Golden Northwest Aluminum, Inc., 12%, due 12/15/06 1,125,900 990,000 International Wire Group, Inc., Series B, 11.75%, due 06/01/05 1,017,225 1,000,000 Jorgensen Earle M. Co., Series B, 9.5%, due 04/01/05 920,000 1,930,000 Kaiser Aluminum & Chemicals Corp., 10.875%, due 10/15/06 1,862,450 825,000 Neenah Corp., 11.125%, due 05/01/07 643,500 125,000 Neenah Corp., Sr. Sub. Notes, 11.125%, due 05/01/07 97,500 890,000 Wheeling Pittsburgh Corp., 9.25%, due 11/15/07 809,900 500,000 WHX Corp., 10.5%, due 04/15/05 462,500 ------------ Total Metals 7,737,975 ------------ Paper & Forest Products (4.0%) 505,000 Buckeye Technologies, Inc., 8%, due 10/15/10 465,863 750,000 Building Materials Corp., Series B, 8%, due 10/15/07 633,750 1,725,000 Packaging Corp. of North America, 9.625%, due 04/01/09 1,733,625 1,355,000 Riverwood International Corp., 10.625%, due 08/01/07 1,348,225 875,000 Specialty Paperboard, Inc., 9.375%, due 10/15/06 809,375 2,445,000 Stone Container Corp., 12.25%, due 04/01/02 2,457,225 300,000 Tembec Industries, Inc., 8.625%, due 06/30/09 294,000 ------------ Total Paper & Forest Products 7,742,063 ------------ Pollution Control (1.0%) 810,000 Allied Waste North America, Inc., 7.625%, due 01/01/06 607,500 1,400,000 Allied Waste North America, Inc., 7.875%, due 01/01/09 1,036,000 415,000 Envirosource, Inc., 9.75%, due 06/15/03 269,750 1,050,000 Mid-American Waste System, Inc., 12.25%, due 02/15/03 10,500** 700,000 Safety-Kleen Corp., 9.25%, due 05/15/09 21,000 245,000 Safety-Kleen Services, Inc., 9.25%, due 06/01/08 14,700 ------------ Total Pollution Control 1,959,450 ------------ See accompanying notes to financial statements. 16 [ICON] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value ---------- ------------ Retail (0.5%) $1,000,000 J. Crew Operating Corp., 10.375%, due 10/15/07 $ 860,000 290,000 Specialty Retailers, Inc., 8.5%, due 07/15/05 87,000 ------------ Total Retail 947,000 ------------ Telecommunications (14.7%) 1,800,000 Alamosa PCS Holdings, Inc., 0%, due 02/15/10 922,500 3,200,000 CapRock Communications Corp., 11.5%, due 05/01/09 3,008,000 1,075,000 CapRock Communications Corp., 12%, due 07/15/08 1,032,000 2,000,000 Frontier Corp., 7.25%, due 05/15/04 1,817,140 3,900,000 GT Group Telecom, Inc., 0%, due 02/01/10 2,067,000 1,000,000 ICG Holdings, Inc., 0%, due 05/01/06 809,640 1,875,000 KMC Telecom Holdings, Inc., 13.5%, due 05/15/09 1,725,000 685,000 Level 3 Communications, Inc., 9.125%, due 05/01/08 595,950 2,600,000 Level 3 Communications, Inc., (144A), 11%, due 03/15/08 2,496,000* 1,025,000 Nextel Communications, Inc., 0%, due 10/31/07 732,875 2,600,000 Nextlink Communications, Inc., (144A), 0%, due 12/01/09 1,423,500* 545,000 Nextlink Communications, Inc., 9.625%, due 10/01/07 506,850 2,130,000 Nextlink Communications, Inc., 10.75%, due 11/15/08 2,092,725 2,525,000 Primus Telecom Group, Inc., 12.75%, due 10/15/09 2,525,000 1,600,000 Rhythms NetConnections, Inc., 12.75%, due 04/15/09 1,360,000 1,000,000 Rhythms NetConnections, Inc., (144A), 14%, due 02/15/10 890,000* 1,045,000 SBA Communications Corp., 0%, due 03/01/08 721,050 600,000 Spectrasite Holdings, Inc., (144A), 10.75%, due 03/15/10 588,000* 2,075,000 Verio, Inc., 11.25%, due 12/01/08 2,043,875 750,000 Williams Communication Group, Inc., 10.7%, due 10/01/07 759,375 ------------ Total Telecommunications 28,116,480 ------------ Textiles, Clothing & Fabrics (0.5%) 500,000 Westpoint Stevens, Inc., 7.875%, due 06/15/05 415,000 810,000 Westpoint Stevens, Inc., 7.875%, due 06/15/08 648,000 ------------ Total Textiles, Clothing & Fabrics 1,063,000 ------------ Transportation (0.9%) 675,000 International Shipholding Corp., 9%, due 07/01/03 658,125 1,070,000 Western Star Trucks Holdings, Ltd., 8.75%, due 05/01/07 995,100 ------------ Total Transportation 1,653,225 ------------ Utilities (2.2%) 825,000 CMS Energy Corp., 7.5%, due 01/15/09 718,616 1,115,000 CMS Energy Corp., 7.625%, due 11/15/04 1,034,464 Utilities (Continued) 85,000 CMS Energy Corp., 8.125%, due 05/15/02 83,191 1,907,696 Panda Funding Corp., 11.625%, due 08/20/12 1,888,619 425,000 TNP Enterprises, Inc., (144A), 10.25%, due 04/01/10 428,188* ------------ Total Utilities 4,153,078 ------------ See accompanying notes to financial statements. 17 TCW Galileo High Yield Bond Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ------------ Miscellaneous (0.4%) $1,245,000 Jordan Industries, Inc., 0%, due 04/01/09 $ 809,250 ------------ Total Fixed Income Securities (Cost: $201,530,352) (96.4%) 184,724,184 ------------ Number of Shares, Warrants, or Rights Equity Securities ---------- ----------------- 3,300 Classic Communications, Inc., (144A), Common Stock 55,011*** 1,250 Forman Petroleum Corp., Warrants, expire 06/01/04 1** 2,920 Terex Corp., Stock Appreciation Rights, expire 05/15/02 40,880** ------------ Total Equity Securities (Cost: $132) (0.0%) 95,892 ------------ Principal Amount Short-Term Investments ---------- ---------------------- $ 377,822 American Express Co., 6.063%, due 05/10/00 377,822*** 377,822 American Express Co., 6.09%, due 05/22/00 377,822*** 629,703 American Express Co., 6.1%, due 05/01/00 629,703*** 503,763 Bank of America, 6.18%, due 06/20/00 503,763*** 251,881 Bank of Nova Scotia, 6.05%, due 05/08/00 251,881*** 503,763 BNP Paribas, S.A., 6.05%, due 05/10/00 503,763*** 503,763 Credit Agricole, 6%, due 05/03/00 503,763*** 726,099 Fleet National Bank, 6.193%, due 10/31/00 726,099*** 1,283,707 Investors Bank & Trust Depository Reserve, 4.85%, due 05/01/00 1,283,707 1,295,753 Merrimac Money Market Fund 1,295,753*** 751,881 Morgan Stanley Dean Witter & Co., 6.15%, due 11/22/00 751,881*** ------------ Total Short-Term Investments (Cost: $7,205,957) (3.8%) 7,205,957 ------------ Total Investments (Cost: $208,736,441) (100.2%) 192,026,033 Liabilities in Excess of Other Assets (-0.2%) (425,796) ------------ Net Assets (100.0%) $191,600,237 ============ Notes to the Schedule of Investments: * Restricted security (Note 9). ** Non-income producing. *** Represents investments of security lending collateral (Note 3). See accompanying notes to financial statements. 18 TCW Galileo Mortgage-backed Securities Fund [ICON] -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) April 30, 2000 Principal Amount Fixed Income Securities Value ---------- ----------------------- ----------- Collateralized Mortgage Obligations (17.1% of Net Assets) $1,261,709 Collateral Mortgage Obligation Trust (64-Z), 9%, due 11/20/20 $ 1,276,232 109,294 Federal Home Loan Mortgage Corp. (1899-D), 7.25%, due 09/15/23 (TAC) 109,278 1,706,024 Federal Home Loan Mortgage Corp. (2021-AD), 7.5%, due 08/15/24 1,674,804 1,798,642 Federal Home Loan Mortgage Corp. (2032-AU), 7.5%, due 02/15/27 1,768,785 1,500,000 Federal Home Loan Mortgage Corp. (2057-HJ), 7%, due 05/15/28 (PAC) (I/O) 530,460 30,121 Federal National Mortgage Association (91-130-SQ), 6,606.643%, due 09/25/21 (I/O) (I/F) 25,880 1,193,547 Federal National Mortgage Association (97-55-T), 7%, due 02/18/27 (TAC) 1,154,969 1,389,511 Federal National Mortgage Association (G93-8-PH), 6.85%, due 01/25/21 (PAC) 1,367,738 419,364 GE Capital Mortgage Services, Inc. (97-9-2A7), 7%, due 10/25/27 416,709 450,518 Greenwich Capital Acceptance, Inc. (91-03), (Private Placement), 9.46%, due 08/01/19 409,971* 70,507 Guardian Savings and Loan Association (88-3-A), 6.497%, due 10/25/18 59,931 71,494 Guardian Savings and Loan Association (89-3-A), 7.535%, due 05/25/19 60,770 468,930 Guardian Savings and Loan Association (89-4-A), 7.504%, due 07/25/19 445,483 450,022 Guardian Savings and Loan Association (89-5-A), 7.751%, due 07/25/19 427,521 504,870 Residential Funding Mortgage Securities I (97-S12-A10), 6.7%, due 08/25/27 (PAC) 501,648 99,202 Resolution Trust Corp. (91-6-C2), 3,299.719%, due 08/25/20 (I/O) 14,880 223,842 Resolution Trust Corp. (91-6-D2), 3,262.129%, due 09/25/28 (I/O) 33,576 661,485 Sears Mortgage Securities (88-A-A2), 0.779%, due 05/25/18 (I/O) 6,747 ----------- Total Collateralized Mortgage Obligations (Cost: $11,334,236) 10,285,382 ----------- U.S. Government Agency Obligations (79.3%) 23,994 Federal Home Loan Mortgage Corp., Pool #212346, 9.5%, due 08/01/01 24,181 614,549 Federal Home Loan Mortgage Corp., Pool #310005, 8.408%, due 11/01/19 614,549 147,039 Federal Home Loan Mortgage Corp., Pool #410013, 7.549%, due 12/01/24 147,851 See accompanying notes to financial statements. 19 TCW Galileo Mortgage-Backed Securities Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ----------- U.S. Government Agency Obligations (Continued) $2,620,203 Federal Home Loan Mortgage Corp., Pool #610967, 7.413%, due 04/01/28 $ 2,675,041 1,711,926 Federal Home Loan Mortgage Corp., Pool #755313, 7.006%, due 06/01/28 1,738,712 87,016 Federal Home Loan Mortgage Corp., Pool #770584, 6.75%, due 05/01/19 86,272 199,070 Federal Home Loan Mortgage Corp., Pool #785630, 7.074%, due 07/01/26 202,693 70,631 Federal Home Loan Mortgage Corp., Pool #865006, 8.583%, due 08/01/18 71,127 99,394 Federal Home Loan Mortgage Corp., Pool #865270, 7.604%, due 12/01/18 99,389 48,280 Federal Home Loan Mortgage Corp., Pool #865275, 8.425%, due 02/01/19 48,493 29,546 Federal National Mortgage Association, Pool #096193, 7.987%, due 09/01/18 29,649 101,568 Federal National Mortgage Association, Pool #163492, 8.5%, due 05/01/16 102,696 208,937 Federal National Mortgage Association, Pool #201909, 7.479%, due 09/01/19 210,510 345,652 Federal National Mortgage Association, Pool #284916, 6.791%, due 06/01/27 346,813 313,961 Federal National Mortgage Association, Pool #303334, 7.4%, due 04/01/25 322,209 83,413 Federal National Mortgage Association, Pool #313920, 7.671%, due 11/01/27 84,434 97,243 Federal National Mortgage Association, Pool #358869, 7.239%, due 09/01/26 98,943 43,965 Federal National Mortgage Association, Pool #369080, 6.975%, due 04/01/27 44,374 281,135 Federal National Mortgage Association, Pool #376663, 6.67%, due 06/01/27 281,186 42,537 Federal National Mortgage Association, Pool #392275, 6.989%, due 06/01/27 42,934 1,441,690 Federal National Mortgage Association, Pool #392536, 7.6%, due 08/01/27 1,422,162 145,225 Federal National Mortgage Association, Pool #393943, 6.981%, due 07/01/27 147,428 106,308 Federal National Mortgage Association, Pool #394575, 7.94%, due 07/01/27 107,245 329,246 Federal National Mortgage Association, Pool #394996, 7.107%, due 08/01/27 335,554 1,792,890 Federal National Mortgage Association, Pool #396814, 6.637%, due 07/01/27 1,799,075 260,011 Federal National Mortgage Association, Pool #397897, 7.249%, due 08/01/27 265,034 See accompanying notes to financial statements. 20 [LOGO] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value --------- ----------- U.S. Government Agency Obligations (Continued) $2,212,943 Federal National Mortgage Association, Pool #434001, 7.151%, due 12/01/27 $ 2,240,605 3,040,781 Federal National Mortgage Association, Pool #457319, 6.78%, due 10/01/28 3,082,050 8,784,421 Federal National Mortgage Association, Pool #535174, 6.318%, due 07/01/39 8,784,422 1,842,781 Government National Mortgage Association, Pool #80011, 7.125%, due 11/20/26 1,861,375 1,853,203 Government National Mortgage Association, Pool #80022, 7.125%, due 12/20/26 1,871,921 2,044,671 Government National Mortgage Association, Pool #80057, 6.375%, due 04/01/27 2,043,629 3,969,765 Government National Mortgage Association, Pool #80185, 6%, due 04/20/28 3,950,670 2,591,377 Government National Mortgage Association, Pool #80186, 6.375%, due 04/20/28 2,596,274 9,901,752 Government National Mortgage Association, Pool #80329, 6%, due 10/20/29 9,765,603 ------------- Total U.S. Government Agency Obligations (Cost: $47,642,076) 47,545,093 ------------- Total Fixed Income Securities (Cost: $58,976,312) (96.4%) 57,830,475 ------------- Short-Term Investments (Cost: $2,045,254) (3.4%) ------------------------------------------------ 2,045,254 Repurchase Agreement, Lehman Brothers, dated 04/28/00, 5.75%, due 05/01/00 (Collateralized by $2,045,254 current face Federal Home Loan Mortgage Corp., Pool #2127, 6%, due 01/15/11, valued at $2,086,153) 2,045,254 ----------- Total Investments (Cost: $61,021,566) (99.8%) 59,875,729 Excess of Other Assets over Liabilities (0.2%) 116,214 ----------- Net Assets (100.0%) $59,991,943 =========== Notes to the Schedule of Investments: I/F - Inverse Floating rate security whose interest rate moves in the opposite direction of prevailing interest rates. I/O - Interest Only Security. PAC - Planned Amortization Class. TAC - Target Amortization Class. * Security valued at fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors. See accompanying notes to financial statements. 21 TCW Galileo Total Return Mortgage-Backed Securities Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) Principal Amount Fixed Income Securities Value ---------- ----------------------- ----------- Collateralized Mortgage Obligations (70.3% of Net Assets) $3,961,094 ABN Amro Mortgage Corp. (98-4-A6), 6.75%, due 11/25/28 (TAC) $ 3,502,687 2,013,462 Bear Stearns Mortgage Securities, Inc. (97-2-A5), 6.875%, due 01/28/24 1,898,936 2,000,000 CMC Securities Corp. III (94-A-A12), 6.75%, due 02/25/24 (PAC) 1,940,844 1,500,000 CMC Securities Corp. III (94-A-A22), 7.411%, due 02/25/24 (I/F) 1,035,000 4,710,119 Countrywide Funding Corp. (93-7-A5), 7%, due 11/25/23 (TAC) 4,175,194 1,418,798 Federal Home Loan Mortgage Corp. (1422-SA), 6.37%, due 11/15/07 (I/F) 1,221,429 91,887 Federal Home Loan Mortgage Corp. (1541-J), 6.5%, due 07/15/23 84,514 3,350,000 Federal Home Loan Mortgage Corp. (1620-SB), 7.895%, due 11/15/23 (I/F) 2,422,854 3,357,000 Federal Home Loan Mortgage Corp. (1629-PB), 6%, due 05/15/23 2,819,276 1,782,000 Federal Home Loan Mortgage Corp. (1662-N), 6.25%, due 01/15/09 1,657,581 814,616 Federal Home Loan Mortgage Corp. (1717-MA), 6.5%, due 04/15/24 781,974 840,583 Federal Home Loan Mortgage Corp. (1796-E), 6%, due 09/15/08 780,666 733,233 Federal Home Loan Mortgage Corp. (1844-E), 6.5%, due 10/15/13 679,845 3,500,000 Federal Home Loan Mortgage Corp. (2020-D), 6.25%, due 01/15/27 (PAC) 3,200,225 2,774,559 Federal Home Loan Mortgage Corp. (2052-PA), 6.25%, due 01/15/15 (PAC) 2,752,973 2,000,000 Federal Home Loan Mortgage Corp. (2061-TA), 5.25%, due 10/15/27 (PAC) 1,655,040 4,000,000 Federal Home Loan Mortgage Corp. (2121-C), 6%, due 02/15/29 (PAC) 3,332,730 1,000,000 Federal National Mortgage Association (92-215-PL), 7.25%, due 11/25/21 (PAC) 967,720 311,814 Federal National Mortgage Association (93-2-B), 7.2%, due 11/25/03 308,069 2,288,691 Federal National Mortgage Association (93-189-S), 7.221%, due 10/25/23 (I/F) 1,663,329 1,000,000 Federal National Mortgage Association (93-202-SZ), 10%, due 11/25/23 (I/F) (TAC) 803,890 292,454 Federal National Mortgage Association (93-223-EA), 6.5%, due 12/25/23 (PAC) 280,048 1,992,743 Federal National Mortgage Association (93-X-130A-NA), 6.5%, due 05/25/23 1,879,057 See accompanying notes to financial statements. 22 [LOGO] -------------------------------------------------------------------------------- April 30, 2000 Principal Amount Value ---------- ----------- Collateralized Mortgage Obligations (Continued) $3,000,000 Federal National Mortgage Association (94-40-SA), 6.038%, due 03/25/24 (I/F) $ 2,372,010 1,353,524 Federal National Mortgage Association (G92-29-J), 8%, due 07/25/22 1,344,456 3,359,699 First Union Residential Securities Trust (98-A-SA4), 7%, due 04/25/25 3,132,860 368,845 GE Capital Mortgage Services, Inc. (96-12-A2), 7.25%, due 07/25/11 367,097 2,713,165 GE Capital Mortgage Services, Inc. (97-5-A2), 7.5%, due 06/25/27 2,583,467 4,000,000 Government National Mortgage Association (97-2-E), 7.5%, due 02/20/27 3,860,001 2,922,760 Residential Accredit Loans, Inc. (97-QS-13-A7), 7.25%, due 12/25/27 2,780,276 2,300,000 Residential Asset Securitization Trust (98-A12-A16), 6.75%, due 11/25/28 2,147,625 2,836,364 Residential Funding Mortgage Securities I (95-S21-A6), 7.5%, due 12/26/25 2,779,807 184,250 Residential Funding Mortgage Securities I (95-S7-A9), 8%, due 05/25/10 (I/O) 22,110 ----------- Total Collateralized Mortgage Obligations (Cost: $63,828,412) 61,233,590 ----------- U.S. Government Agency Obligations (22.7%) 413,964 Federal Home Loan Mortgage Corp., Pool #755183, 7.478%, due 12/01/15 420,355 259,623 Federal Home Loan Mortgage Corp., Pool #846317, 7.25%, due 08/01/26 265,182 746,490 Federal Home Loan Mortgage Corp., Pool #846510, 7.284%, due 04/01/25 768,191 958,210 Federal Housing Authority (#000-13002), 7.125%, due 03/01/04 905,508 2,801,191 Federal Housing Authority (#012-11216), 7.185%, due 03/25/29 2,647,125 1,838,400 Federal Housing Authority (#044-10592), 7.625%, due 08/01/22 1,774,056 2,528,484 Federal Housing Authority (#112-43055), 9.25%, due 05/25/32 2,566,411 10,019 Federal National Mortgage Association, Pool #029542, 8.75%, due 07/01/09 10,168 4,380 Federal National Mortgage Association, Pool #062420, 7.5%, due 03/01/06 4,376 596,397 Federal National Mortgage Association, Pool #124410, 7.08%, due 07/01/22 611,456 179,203 Federal National Mortgage Association, Pool #137064, 7.38%, due 03/01/19 180,871 1,887,555 Federal National Mortgage Association, Pool #252386, 6.5%, due 04/01/19 1,785,829 See accompanying notes to financial statements. 23 Tcw Galileo Total Return Mortgage-Backed Securities Fund -------------------------------------------------------------------------------- Schedule of Investments (Unaudited) (Continued) Principal Amount Value ---------- ----------- U.S. Government Agency Obligations (Continued) $ 470,488 Federal National Mortgage Association, Pool #303786, 7.5%, due 02/01/11 $ 471,222 464,217 Federal National Mortgage Association, Pool #310001, 6%, due 09/01/00 462,750 35,980 Federal National Mortgage Association, Pool #347216, 6.845%, due 06/01/26 36,209 359,984 Federal National Mortgage Association, Pool #348025, 6.7%, due 06/01/26 359,902 3,892,587 Federal National Mortgage Association, Pool #413618, 6.5%, due 03/01/18 3,688,227 19,936 Government National Mortgage Association, Pool #003933, 8.25%, due 07/15/04 19,973 1,641 Government National Mortgage Association, Pool #176192, 8.25%, due 12/15/01 1,645 586 Government National Mortgage Association, Pool #217350, 9.25%, due 08/15/00 587 1,521,417 Government National Mortgage Association, Pool #351003, 7.5%, due 07/15/28 1,492,419 1,394,640 Government National Mortgage Association, Pool #365618, 7%, due 10/15/33 1,320,426 ----------- Total U.S. Government Agency Obligations (Cost: $20,651,174) 19,792,888 ----------- U.S. Treasury Securities (0.4%) 197,000 Certificates Accrual Treasury Strips, 0%, due 08/15/01 181,309 177,000 Certificates Accrual Treasury Strips, 0%, due 05/15/06 119,344 112,000 Certificates Accrual Treasury Strips, 0%, due 08/15/08 65,529 ----------- Total U.S. Treasury Securities (Cost: $366,890) 366,182 ----------- Total Fixed Income Securities (Cost: $84,846,476) (93.4%) 81,392,660 ----------- Short-Term Investments (Cost: $5,251,823) (6.1%) ------------------------------------------------ 5,251,823 Repurchase Agreement, Lehman Brothers, dated 04/28/00, 5.75%, due 05/01/00 (Collateralized by $5,251,823 current face Federal Home Loan Mortgage Corp., Pool #2127, 6%, due 01/15/11, valued at $5,356,846) 5,251,823 ------------- Total Investments (Cost: $90,098,299) (99.5%) 86,644,483 Excess of Other Assets over Liabilities (0.5%) 473,901 ------------- Net Assets (100.0%) $ 87,118,384 ============= Notes to the Schedule of Investments: I/F - Inverse Floating rate security whose interest rate moves in the opposite direction of prevailing interest rates. I/O - Interest Only Security. PAC - Planned Amortization Class. TAC - Target Amortization Class. See accompanying notes to financial statements. 24 TCW Galileo Funds, Inc. [LOGO] -------------------------------------------------------------------------------- U.S. Fixed Income Statements of Assets and Liabilities (Unaudited) April 30, 2000
TCW Galileo TCW Galileo Total Return TCW Galileo TCW Galileo TCW Galileo Mortgage- Mortgage- Money Core Fixed High Yield Backed Backed Market Income Bond Securities Securities Fund Fund Fund Fund Fund ------------ ----------- ----------- ----------- ------------ Dollar Amounts in Thousands (Except per Share Amounts) ASSETS Investments, at Value/(1)/ $ 226,301 $ 57,052 $ 192,026 $ 59,876 $ 86,644 Receivables for Securities Sold -- 31 1,259 66 34 Receivable for Fund Shares Sold 906 -- -- -- -- Interest Receivable 1,040 706 5,334 407 521 ------------ ---------- ----------- ---------- ---------- Total Assets 228,247 57,789 198,619 60,349 87,199 ------------ ---------- ----------- ---------- ---------- LIABILITIES Distributions Payable 306 89 306 91 24 Payables for Securities Purchased -- 300 634 -- -- Payables for Fund Shares Redeemed 1,214 3 -- 209 -- Payables Upon Return of Securities Loaned (Note 3) -- 3,917 5,922 -- -- Accrued Management Fees 43 13 108 16 31 Other Accrued Expenses 25 36 49 41 26 ------------ ---------- ----------- ---------- ---------- Total Liabilities 1,588 4,358 7,019 357 81 ------------ ---------- ----------- ---------- ---------- NET ASSETS $ 226,659 $ 53,431 $ 191,600 $ 59,992 $ 87,118 ============ ========== =========== ========== ========== NET ASSETS CONSIST OF: Paid-in Capital $ 226,659 $ 59,543 $ 219,150 $ 66,743 $ 91,816 Undistributed Net Realized Gain (Loss) on Investments -- (4,349) (10,629) (5,638) 812 Unrealized (Depreciation) on Investments -- (2,302) (16,710) (1,146) (3,454) Undistributed (Distributions in excess of) Net Investment Income -- 539 (211) 33 (2,056) ------------ ---------- ----------- ---------- ---------- NET ASSETS $ 226,659 $ 53,431 $ 191,600 $ 59,992 $ 87,118 ============ ========== =========== ========== ========== NET ASSETS ATTRIBUTABLE TO: Institutional Class Shares $ 226,659 $ 53,354 $ 191,268 $ 59,992 $ 87,083 ============ ========== =========== ========== ========== Advisory Class Shares $ -- $ 77 $ 332 $ -- $ 35 ============ ========== =========== ========== ========== CAPITAL SHARES OUTSTANDING: Institutional Class 226,659,280 5,833,148 22,582,677 6,276,431 9,926,987 ============ ========== =========== ========== ========== Advisory Class -- 8,339 38,695 -- 3,921 ============ ========== =========== ========== ========== NET ASSET VALUE PER SHARE: Institutional Class $ 1.00 $ 9.15 $ 8.47 $ 9.56 $ 8.77 ============ ========== =========== ========== ========== Advisory Class $ -- $ 9.24 $ 8.57 $ -- $ 9.02 ============ ========== =========== ========== ==========
(1) The identified cost for the TCW Galileo Money Market Fund, the TCW Galileo Core Fixed Income Fund, the TCW Galileo High Yield Bond Fund, the TCW Galileo Mortgage-Backed Securities Fund and the TCW Galileo Total Return Mortgage-Backed Securities Fund at April 30, 2000 was $226,301, $59,347, $208,736, $61,022 And $90,098, respectively. See accompanying notes to financial statements. 25 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. FIXED INCOME Statements of Operations (Unaudited) Six Months Ended April 30, 2000
TCW TCW Galileo TCW TCW Galileo Total Return Galileo Galileo TCW Mortgage- Mortgage- Money Core Fixed Galileo Backed Backed Market Income High Yield Securities Securities Fund Fund Bond Fund Fund Fund ------- ---------- ---------- ---------- ------------ Dollar Amounts in Thousands INVESTMENT INCOME Income: Interest (Note 2) $6,392 $ 1,884 $10,730 $2,265 $ 2,648 ------ ------- ------- ------ ------- Expenses: Management Fees 278 110 765 139 218 Accounting Service Fees 29 20 27 14 16 Administration Fees 32 14 30 12 14 Transfer Agent Fees: Institutional Class 20 20 22 19 20 Advisory Class -- 7 8 -- 7 Custodian Fees 7 7 3 3 3 Professional Fees 19 16 18 13 17 Directors' Fees and Expenses 4 4 4 4 4 Registration Fees: Institutional Class -- 4 4 -- 4 Advisory Class -- 3 3 -- 3 Distribution Fees: Advisory Class (Note 6) -- -- 5 -- -- Other 29 15 27 13 15 ------ ------- ------- ------ ------- Total Expenses 418 220 916 217 321 Less Expenses Borne by Investment Advisor -- 12 10 27 13 ------ ------- ------- ------ ------- Net Expenses 418 208 906 190 308 ------ ------- ------- ------ ------- Net Investment Income 5,974 1,676 9,824 2,075 2,340 ------ ------- ------- ------ ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY Net Realized Gain (Loss) on: Investments -- (1,187) (2,148) (168) 697 Foreign Currency -- 57 -- -- -- Change in Unrealized Appreciation (Depreciation) on: Investments -- (365) (6,122) (220) (1,988) Foreign Currency -- (120) -- -- -- ------ ------- ------- ------ ------- Net Realized and Unrealized (Loss) on Investments and Foreign Currency -- (1,615) (8,270) (388) (1,291) ------ ------- ------- ------ ------- INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,974 $ 61 $ 1,554 $1,687 $ 1,049 ====== ======= ======= ====== =======
See accompanying notes to financial statements. 26 [LOGO] -------------------------------------------------------------------------------- Statements of Changes in Net Assets
TCW Galileo TCW Galileo Core Money Market Fund Fixed Income Fund ------------------------ ------------------------ Six Months Six Months Ended Ended April 30, Year Ended April 30, Year Ended 2000 October 31, 2000 October 31, (Unaudited) 1999 (Unaudited) 1999 ----------- ----------- ----------- ----------- Dollar Amounts in Thousands OPERATIONS Net Investment Income $ 5,974 $ 10,300 $ 1,676 $ 4,603 Net Realized (Loss) on Investments and Foreign Currency -- -- (1,130) (1,272) Change in Unrealized (Depreciation) on Investments and Foreign Currency -- -- (485) (3,115) -------- -------- -------- -------- Increase in Net Assets Resulting from Operations 5,974 10,300 61 216 -------- -------- -------- -------- DISTRIBUTIONS TO SHAREHOLDERS Distributions from Net Investment Income: Institutional Class (5,974) (10,300) (1,679) (4,137) Advisory Class -- -- (2) (2) -------- -------- -------- -------- Total Distributions to Shareholders (5,974) (10,300) (1,681) (4,139) -------- -------- -------- -------- NET CAPITAL SHARE TRANSACTIONS (NOTE 8) Institutional Class (34,641) 18,849 (15,695) (88,408) Advisory Class -- -- (3) 84 -------- -------- -------- -------- Increase (Decrease) in Net Assets Resulting from Net Capital Share Transactions (34,641) 18,849 (15,698) (88,324) -------- -------- -------- -------- Increase (Decrease) in Net Assets (34,641) 18,849 (17,318) (92,247) NET ASSETS Beginning of Period 261,300 242,451 70,749 162,996 -------- -------- -------- -------- End of Period $226,659 $261,300 $ 53,431 $ 70,749 ======== ======== ======== ========
See accompanying notes to financial statements. 27 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Statements of Changes in Net Assets
TCW Galileo TCW Galileo High Yield Mortgage-Backed Bond Fund Securities Fund ------------------------ ------------------------ Six Months Six Months Ended Ended April 30, Year Ended April 30, Year Ended 2000 October 31, 2000 October 31, (Unaudited) 1999 (Unaudited) 1999 ----------- ----------- ----------- ----------- Dollar Amounts in Thousands OPERATIONS Net Investment Income $ 9,824 $ 17,734 $ 2,075 $ 2,525 Net Realized (Loss) on Investments (2,148) (5,518) (168) -- Change in Unrealized (Depreciation) on Investments (6,122) (2,104) (220) (103) -------- -------- ------- ------- Increase in Net Assets Resulting from Operations 1,554 10,112 1,687 2,422 -------- -------- ------- ------- DISTRIBUTIONS TO SHAREHOLDERS Distributions from Net Investment Income: Institutional Class (10,077) (17,287) (2,061) (2,506) Advisory Class (154) (9) -- -- Distributions in Excess of Net Investment Income: Institutional Class (229) -- -- -- -------- -------- ------- ------- Total Distributions to Shareholders (10,460) (17,296) (2,061) (2,506) -------- -------- ------- ------- NET CAPITAL SHARE TRANSACTIONS (NOTE 8) Institutional Class 12,009 29,567 6,870 9,941 Advisory Class 210 202 -- -- -------- -------- ------- ------- Increase in Net Assets Resulting from Net Capital Share Transactions 12,219 29,769 6,870 9,941 -------- -------- ------- ------- Increase (Decrease) in Net Assets 3,313 22,585 6,496 9,857 NET ASSETS Beginning of Period 188,287 165,702 53,496 43,639 -------- -------- ------- ------- End of Period $191,600 $188,287 $59,992 $53,496 ======== ======== ======= =======
See accompanying notes to financial statements. 28 [LOGO] -------------------------------------------------------------------------------- Statements of Changes in Net Assets TCW Galileo Total Return Mortgage-Backed Securities Fund ------------------------ Six Months Ended April 30, Year Ended 2000 October 31, (Unaudited) 1999 ----------- ----------- Dollar Amounts in Thousands OPERATIONS Net Investment Income $ 2,340 $ 6,837 Net Realized Gain on Investments 697 36 Change in Unrealized (Depreciation) on Investments (1,988) (4,058) ------- -------- Increase in Net Assets Resulting from Operations 1,049 2,815 ------- -------- DISTRIBUTIONS TO SHAREHOLDERS Distributions from Net Investment Income: Institutional Class (2,339) (6,750) Advisory Class (1) -- Distributions in Excess of Net Investment Income: Institutional Class (672) (1,384) ------- -------- Total Distributions to Shareholders (3,012) (8,134) ------- -------- NET CAPITAL SHARE TRANSACTIONS (NOTE 8) Institutional Class (1,230) (5,907) Advisory Class (1) 37 ------- -------- (Decrease) in Net Assets Resulting from Net Capital Share Transactions (1,231) (5,870) ------- -------- (Decrease) in Net Assets (3,194) (11,189) NET ASSETS Beginning of Period 90,312 101,501 ------- -------- End of Period $87,118 $ 90,312 ======= ======== See accompanying notes to financial statements. 29 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Notes to Financial Statements (Unaudited) Note 1 -- Organization TCW Galileo Funds, Inc., a Maryland corporation (the "Company"), is an open-end management investment company registered under the Investment Company Act of 1940, (the "1940 Act"), as amended, that currently offers a selection of 20 no-load mutual funds known as the TCW Galileo Funds (the "Funds"). TCW Investment Management Company (the "Advisor") is the investment advisor to the Funds. TCW London International, Limited is a sub-advisor for the TCW Galileo Asia Pacific Equities Fund, the TCW Galileo Emerging Markets Equities Fund, the TCW Galileo European Equities Fund, the TCW Galileo International Equities Fund, and the TCW Galileo Japanese Equities Fund. The advisors are registered under the Investment Advisors Act of 1940. Each Fund has distinct investment objectives and policies. Investors Bank & Trust Company serves as the administrator of the Funds. The Funds' financial statements are separated into three reports: 1) U.S. Equities Funds, 2) U.S. Fixed Income Funds, and 3) International Funds. However, all Funds are listed below along with their investment objectives, and are currently offered by the Company. U.S. Equities TCW Galileo Fund Investment Objective ---------------- --------------------------- Convertible Securities Fund TCW Galileo Convertible Securities Fund Seeks high total return from current income and capital appreciation through investment principally in convertible securities. Non-Diversified U.S. Equity Funds TCW Galileo Aggressive Growth Equities Seeks long-term capital Fund appreciation by investing primarily in publicly-traded equity securities of medium capitalization companies. TCW Galileo Earnings Momentum Fund Seeks capital appreciation by investing primarily in publicly-traded equity securities of companies experiencing or expected to experience accelerating earnings growth. TCW Galileo Large Cap Growth Fund Seeks long-term capital appreciation by investment primarily in publicly-traded equity securities of large capitalization U.S. companies with above average earnings prospects. TCW Galileo Large Cap Value Fund Seeks long-term capital appreciation by investing primarily in publicly-traded equity securities of large capitalization companies. TCW Galileo Select Equities Fund Emphasizes capital appreciation and preservation with focus on long-term results. TCW Galileo Small Cap Growth Fund Seeks long-term capital appreciation by investing primarily in publicly-traded equity securities of smaller capitalization companies. 30 [LOGO] -------------------------------------------------------------------------------- April 30, 2000 U.S. Equities (Continued) TCW Galileo Fund Investment Objective ---------------- --------------------------- Non-Diversified U.S. Equity Funds TCW Galileo Value Opportunities Fund Seeks capital appreciation by investing at least 65% of its total assets, under normal circumstances, in publicly-traded equity securities issued by small and medium companies with market capitalization at the time of purchase between $500 million and $5 billion. U.S. Fixed Income TCW Galileo Fund Investment Objective ---------------- ---------------------------- Diversified Money Market Fund TCW Galileo Money Market Fund Seeks current income, preservation of capital and liquidity by investing in short-term money market securities. Diversified Fixed Income Funds TCW Galileo Core Fixed Income Fund Seeks capital appreciation and income by investment principally in core fixed income securities emphasizing high quality and liquid investments. TCW Galileo High Yield Bond Fund Seeks high current income by investment principally in high yield fixed income securities. TCW Galileo Mortgage-Backed Securities Fund Seeks income by investing primarily in short-term mortgage-backed securities. TCW Galileo Total Return Mortgage-Backed Seeks income by investing Securities Fund primarily in long-term mortgage-backed securities. International TCW Galileo Fund Investment Objective ---------------- ---------------------------- Non-diversified International Equity Funds TCW Galileo Asia Pacific Equities Fund Seeks long-term capital appreciation by investing primarily in equity securities of companies in the Asia Pacific region. TCW Galileo Emerging Markets Equities Fund Seeks long-term capital appreciation by investing in equity securities of companies in emerging market countries around the world. TCW Galileo European Equities Fund Seeks long-term capital appreciation by investing primarily in the securities of issuers located in Europe. TCW Galileo International Equities Fund Seeks long-term capital appreciation by investing in a mix of underlying TCW Galileo Funds. 31 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Notes to Financial Statements (Unaudited) (Continued) Note 1 -- Organization (Continued) International (Continued) TCW Galileo Fund Investment Objective ---------------- ---------------------------- Non-Diversified International Equity Funds TCW Galileo Japanese Equities Fund Seeks long-term capital appreciation by investing primarily in Japanese equity securities. TCW Galileo Latin America Equities Fund Seeks long-term capital appreciation by investing primarily in Latin American equity securities. Non-Diversified Fixed Income Fund TCW Galileo Emerging Markets Income Fund Seeks high total return from capital appreciation and current income by investing at least 65% of its total assets in debt securities issued or guaranteed by companies, financial institutions, and government entities in emerging market countries. Nine funds (TCW Galileo Aggressive Growth Equities Fund, TCW Galileo Large Cap Growth Fund, TCW Galileo Large Cap Value Fund, TCW Galileo Select Equities Fund, TCW Galileo Small Cap Growth Fund, TCW Galileo Core Fixed Income Fund, TCW Galileo High Yield Bond Fund, TCW Galileo Total Return Mortgage-Backed Securities Fund and TCW Galileo European Equities Fund) offer two classes of shares, Institutional Class shares and Advisory Class shares. Shares of each class of the Funds represent an equal pro rata interest in the Funds and generally give the shareholder the same voting, dividend, liquidation, and other rights. The Institutional Class shares are offered at the current net asset value. The Advisory Class shares are also offered at the current net asset value, but are subject to fees imposed under a distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act. Note 2 -- Significant Accounting Policies The following is a summary of significant accounting policies which are in conformity with generally accepted accounting principles and which are consistently followed by the Funds in the preparation of their financial statements. The preparation of the financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Principles of Accounting: The Funds use the accrual method of accounting for financial reporting purposes. Security Valuations: The value of securities held in the TCW Galileo Money Market Fund is determined by using the amortized cost method applied to each individual security unless, due to special circumstances, the use of such a method would result in a valuation that does not approximate fair market value. All other securities, including the bond fund securities, for which over-the-counter market quotations are readily available, are valued at the latest bid price prior to the time of valuation. 32 [LOGO] -------------------------------------------------------------------------------- April 30, 2000 Securities for which market quotations are not readily available, including circumstances under which it is determined by the Advisor that sale or bid prices are not reflective of a security's market value, are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Company's Board of Directors. For Funds other than the TCW Galileo Money Market Fund, short-term debt securities with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost. Other short-term debt securities are valued on a marked-to-market basis until such time as they reach a remaining maturity of 60 days, whereupon they will be valued at amortized value using their value on the 61st day prior to maturity. Security Transactions and Related Investment Income: Security transactions are recorded as of the trade date. Interest income is recorded on the accrual basis. The TCW Galileo Core Fixed Income Fund and the TCW Galileo High Yield Bond Fund recognize as interest income discounts on securities purchased using a constant yield to maturity accretion method. Original issue discount is accreted as interest income using a constant yield to maturity method. Premiums on securities purchased are not amortized, except for mortgage backed obligations for which amortization has been elected as allowed by federal income tax regulations and securities held by the TCW Galileo Core Fixed Income Fund. Realized gains and losses on investments are recorded on the basis of specific identification. Foreign Currency Translation: The books and records of each Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities, and other assets and liabilities stated in foreign currencies, are translated using the daily spot rate; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resultant exchange gains and losses are included in the Statements of Operations with the related net realized gain (loss). Pursuant to U.S. federal income tax regulations, certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in, or are a reduction of, ordinary income for federal income tax purposes. It is not practicable to separately identify that portion of gains and losses of the Funds that arise as a result of changes in the exchange rates from the fluctuations that arise from changes in market prices of investments during the year. Dollar Roll Transactions: The Funds may enter into dollar roll transactions with financial institutions to take advantage of opportunities in the mortgage backed securities market. A dollar roll transaction involves a simultaneous sale by the Fund of securities that it holds with an agreement to repurchase substantially similar securities at an agreed upon price and date, but generally will be collateralized at time of delivery by different pools of mortgages with different prepayment histories than those securities sold. These transactions are accounted for as financing transactions as opposed to sales and purchases. The differential between the sale price and the repurchase price is recorded as deferred income and recognized between the settlement dates of the sale and repurchase. During the period between the sale and repurchase, the Fund will not be entitled to receive interest and principal payments on the securities sold. Dollar roll transactions involve risk that the market value of the security sold by the Fund may decline below the repurchase price of the security. There were no such transactions outstanding as of April 30, 2000. Repurchase Agreements: The Funds may invest in repurchase agreements secured by U.S. Government obligations and by other securities. Securities pledged as collateral for repurchase agreements are held by the Funds' custodian bank until maturity of the repurchase agreements. 33 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Notes to Financial Statements (Unaudited) (Continued) Note 2 -- Significant Accounting Policies (Continued) Provisions of the agreements ensure that the market value of the collateral is sufficient in the event of default; however, in the event of default or bankruptcy by the other party to the agreements, realization and/or retention of the collateral may be subject to legal proceedings. Security Lending: The Funds may lend their securities to qualified brokers. The loans are collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. As with any extensions of credit, the Funds may bear the risk of delay in recovery or even loss of rights in the collateral if the borrowers of the securities fail financially. The Funds receive compensation for lending their securities (see Note 3). Options: Premiums received from call options written are recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. If the option expires unexercised, premiums received are realized as a gain at expiration date. If the position is closed prior to expiration, a gain or loss is realized based on premiums received, less the cost to close the option. When an option is exercised, premiums received are added to the proceeds from the sale of the underlying securities and a gain or loss is realized. Call options purchased are accounted for in the same manner as portfolio securities. The cost of securities acquired through the exercise of call options is increased by premiums paid. There were no option contracts entered into during the six months ended April 30, 2000. Allocation of Operating Activity: Investment income, common expenses and realized and unrealized gains and losses are allocated among the classes of shares of the Funds based on the relative net assets of each class. Distribution fees, which are directly attributable to a class of shares, are charged to that class' operations. All other expenses are charged to each Fund as incurred on a specific identification basis. Net Asset Value: The Net Asset Value of each Fund's shares is determined by dividing the net assets of the Fund by the number of issued and outstanding shares on each business day as of 9:00 A.M. Pacific Standard Time for the TCW Galileo Money Market Fund and as of 1:00 P.M. Pacific Standard Time for the other Funds. Dividends and Distributions: Dividends from net investment income of the TCW Galileo Money Market Fund are declared each business day. The other fixed income funds declare and pay, or reinvest, dividends from net investment income monthly. Distribution of any net long-term and net short- term capital gains earned by a Fund will be distributed at least annually. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for foreign currency transactions, market discount, losses deferred to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital and may affect net investment income per share. Undistributed net investment income may include temporary book and tax basis differences which will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. Use of Estimates: The preparation of the accompanying financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates. 34 [LOGO] -------------------------------------------------------------------------------- April 30, 2000 Note 3 -- Security Lending The Funds listed below loaned securities that were collateralized in cash which was invested in short-term investments as of April 30, 2000:
Market Value of Securities Loaned Securities Collateral Value Lending Fees* ------------------ ---------------- --------------- TCW Galileo Core Fixed Income Fund $ 3,827,494 $ 3,917,150 $ 1,752 TCW Galileo High Yield Bond Fund 5,759,935 5,922,250 4,062
* Net of broker fees Securities lending fees are included in interest income in the Statements of Operations. Note 4 -- Federal Income Taxes It is the policy of each Fund to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income, including any net realized gains on investments, to its shareholders. Therefore, no federal income tax provision is required. At April 30, 2000, net unrealized appreciation (depreciation) on investments for federal income tax purposes was as follows (amounts in thousands):
TCW Galileo TCW Galileo Total Return TCW Galileo TCW Galileo Mortgage- Mortgage- Core Fixed High Yield Backed Backed Income Fund Bond Fund Securities Fund Securities Fund -------------- --------------- --------------- --------------- Unrealized Appreciation $ 71 $ 661 $ 153 $ 1,273 Unrealized (Depreciation) (2,373) (17,371) (1,299) (4,727) -------------- --------------- -------------- -------------- Net Unrealized (Depreciation) $ (2,302) $ (16,710) $ (1,146) $ (3,454) ============== =============== ============== ============== Cost of Investments for Federal Income Tax Purposes $ 59,347 $ 208,736 $ 61,022 $ 90,098 ============== =============== ============== ==============
At April 30, 2000, the following Funds had net realized loss carryforwards for federal income tax purposes (amounts in thousands): Expiring In ------------------------------------------- 2002 2003 2004 2005 2006 2007 ----- ------ ---- ------ ------ ------ TCW Galileo Core Fixed Income Fund $ 641 $ 644 $ -- $ -- $ -- $1,259 TCW Galileo High Yield Bond Fund -- -- -- -- 2,560 5,718 TCW Galileo Mortgage-Backed Securities Fund 446 4,068 861 73 406 -- Note 5 -- Fund Expenses The Funds pay to the Advisor, as compensation for services rendered, facilities furnished and expenses borne by it, the following annual management fees as a percentage of daily net asset value: TCW Galileo Money Market Fund 0.25% TCW Galileo Core Fixed Income Fund 0.40% TCW Galileo High Yield Bond Fund 0.75% TCW Galileo Mortgage-Backed Securities Fund 0.35% TCW Galileo Total Return Mortgage-Backed Securities Fund 0.50% 35 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Notes to Financial Statements (Unaudited) (Continued) Notes 5-- Fund Expenses (Continued) Prior to January 15, 2000, the TCW Galileo Mortgage-Backed Securities Fund paid to the Advisor an annual management fee of 0.50% of the daily net assets. The ordinary operating expenses of the TCW Galileo Money Market Fund are limited to 0.40% of the Fund's daily net assets. The ordinary operating expenses (each share class) of the other funds are limited to the average of the total expense ratios as reported by Lipper Analytical Services, Inc. for each Fund's respective investment objective, which is subject to change on a monthly basis. At April 30, 2000, the average expense ratios reported by Lipper Analytical Services, Inc. as they relate to each fund were: TCW Galileo Core Fixed Income Fund 1.00% TCW Galileo High Yield Bond Fund 1.30% TCW Galileo Mortgage-Backed Securities Fund 1.00% TCW Galileo Total Return Mortgage-Backed Securities Fund 1.00% Prior to January 15, 2000, the ordinary operating expenses of the TCW Galileo Mortgage-Backed Securities Fund were limited to 0.53% of daily net assets. Certain officers and/or directors of the Company are officers and/or directors of the Advisor. Note 6 -- Distribution Plan The Company has a distribution plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Advisory Class shares of each Fund. Under the terms of the Distribution Plan, each Fund compensates the distributor at a rate equal to 0.25% of the average daily net assets of the Fund attributable to its Advisory Class shares for distribution and related services. Distribution fees for the six months ended April 30, 2000 were less than $1,000 for the TCW Galileo Core Fixed Income Fund and TCW Galileo Total Return Mortgage-Backed Securities Fund and as a result, are not disclosed in the Statement of Operations. Note 7 -- Purchases and Sales of Securities Investment transactions (excluding short-term investments) for the six months ended April 30, 2000 were as follows (amounts in thousands):
TCW Galileo TCW Galileo Total Return TCW Galileo TCW Galileo Mortgage- Mortgage- Core Fixed High Yield Backed Backed Income Fund Bond Fund Securities Fund Securities Fund ----------- ----------- --------------- --------------- Purchases at Cost $ 6,007 $79,881 $ 25 $ -- ======= ======= ======= ====== Sales Proceeds $16,212 $69,575 $ 852 $ 891 ======= ======= ======= ====== U.S. Government Purchases at Cost $16,806 $ -- $18,894 $ -- ======= ======= ======= ====== U.S. Government Sales Proceeds $22,890 $ -- $ 8,867 $2,216 ======= ======= ======= ======
36 [LOGO] ------------------------------------------------------------------------------- April 30, 2000 Note 8 -- Capital Share Transactions The Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest (without par value). Transactions in each Fund's shares were as follows:
TCW Galileo Money Market Fund Six Months Ended April 30, 2000 Year Ended (Unaudited) October 31, 1999 ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 1,353,421,102 $ 1,353,421 2,699,538,689 $ 2,699,539 Shares Issued upon Reinvestment of Dividends 3,832,713 3,833 7,371,745 7,372 Shares Redeemed (1,391,894,778) (1,391,895) (2,688,061,688) (2,688,062) -------------- ----------- -------------- ----------- Net Increase (Decrease) (34,640,963) $ (34,641) 18,848,746 $ 18,849 ============== =========== ============== =========== TCW Galileo Core Fixed Income Fund Six Months Ended Institutional Class April 30, 2000 Year Ended (Unaudited) October 31, 1999 ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 930,731 $ 8,728 3,702,145 $ 35,593 Shares Issued upon Reinvestment of Dividends 134,746 1,253 326,089 3,172 Shares Redeemed (2,732,856) (25,676) (13,006,199) (127,173) -------------- ----------- -------------- ----------- Net (Decrease) (1,667,379) $ (15,695) (8,977,965) $ (88,408) ============== =========== ============== =========== TCW Galileo Core Fixed Income Fund Six Months Ended Advisory Class April 30, 2000 Period Ended (Unaudited) October 31, 1999/(1)/ ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 346 $ 4 8,529 $ 83 Shares Issued upon Reinvestment of Dividends 296 2 -- -- Shares Redeemed (1,004) (9) 172 1 -------------- ----------- -------------- ----------- Net Increase (Decrease) (362) $ (3) 8,701 $ 84 ============== =========== ============== ===========
(1) For the period March 1, 1999 (commencement of offering of Advisory Class shares) through October 31, 1999. 37 TCW Galileo Funds, Inc. -------------------------------------------------------------------------------- U.S. Fixed Income Notes to Financial Statements (Unaudited) (Continued) Note 8 -- Capital Share Transactions (Continued)
TCW Galileo High Yield Bond Fund Six Months Ended Institutional Class April 30, 2000 Year Ended (Unaudited) October 31, 1999 ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 7,065,467 $ 62,406 15,528,524 $ 144,250 Shares Issued upon Reinvestment of Dividends 1,129,407 9,884 1,547,242 14,195 Shares Redeemed (6,864,735) (60,281) (13,828,336) (128,878) -------------- ----------- -------------- ----------- Net Increase 1,330,139 $ 12,009 3,247,430 $ 29,567 ============== =========== ============== =========== TCW Galileo High Yield Bond Fund Six Months Ended Advisory Class April 30, 2000 Period Ended (Unaudited) October 31, 1999/(1)/ ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 1,463,407 $ 13,157 36,157 $ 345 Shares Issued upon Reinvestment of Dividends 17,355 154 790 7 Shares Redeemed (1,463,336) (13,101) (15,678) (150) -------------- ----------- -------------- ----------- Net Increase 17,426 $ 210 21,269 $ 202 ============== =========== ============== ===========
(1) For the period March 1, 1999 (commencement of offering of advisory Class shares) through October 31, 1999.
TCW Galileo Mortgage- Backed Securities Fund Six Months Ended April 30, 2000 Year Ended (Unaudited) October 31, 1999 ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 4,434,108 $ 42,491 1,189,983 $ 11,464 Shares Issued upon Reinvestment of Dividends 178,923 1,710 147,725 1,418 Shares Redeemed (3,914,648) (37,331) (306,134) (2,941) -------------- ----------- -------------- ----------- Net Increase 698,383 $ 6,870 1,031,574 $ 9,941 ============== =========== ============== ===========
38 [LOGO] -------------------------------------------------------------------------------- April 30, 2000
TCW Galileo Total Return Six Months Ended Mortgage-Backed April 30, 2000 Year Ended Securities Fund (Unaudited) October 31, 1999 Institutional Class ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 63,725 $ 570 1,086,156 $ 10,319 Shares Issued upon Reinvestment of Dividends 376,775 3,330 809,473 7,598 Shares Redeemed (583,325) (5,130) (2,226,690) (23,824) -------------- ----------- -------------- ----------- Net (Decrease) (142,825) $ (1,230) (331,061) $ (5,907) ============== =========== ============== ===========
TCW Galileo Total Return Six Months Ended Mortgage-Backed April 30, 2000 Period Ended Securities Fund (Unaudited) October 31, 1999 (1) Advisory Class ------------------------------ ------------------------------ Amount Amount Shares (in thousands) Shares (in thousands) -------------- -------------- -------------- -------------- Shares Sold 1,102 $ 10 4,015 $ 37 Shares Issued upon Reinvestment of Dividends 123 1 16 -- Shares Redeemed (1,335) (12) -- -- -------------- ----------- -------------- ----------- Net Increase (Decrease) (110) $ (1) 4,031 $ 37 ============== =========== ============== ===========
(1) For the period March 1, 1999 (commencement of offering of Advisory Class shares) through October 31, 1999. Note 9 -- Restricted Securities The following restricted securities held by the Funds as of April 30, 2000, were valued both at the date of acquisition and April 30, 2000, in accordance with the security valuation policy of the Funds described in Note 2. The restricted securities include securities purchased in private placement transactions without registration under the Securities Act of 1933, as well as Rule 144A securities. Such securities generally may be sold only in a privately negotiated transaction with a limited number of purchasers or in a public offering registered under the Securities Act of 1933. Each Fund will bear any costs incurred in connection with the disposition of such securities. TCW Galileo Core Fixed Income Fund: Principal Date of Amount Investment Acquisition Cost --------- ----------------------------------- ----------- ------- $75,000 360networks, Inc., (144A), 13%, 04/20/00 $73,194 due 05/01/08 75,000 Bio-Rad Laboratories, Inc., (144A), 02/14/00 74,124 11.625%, due 02/15/07 75,000 Concentra Operating Corp., (144A), 08/05/99 75,000 13%, due 08/15/09 50,000 Consolidated Container Companies, 06/24/99 50,270 LLC, (144A), 10.125%, due 07/15/09 75,000 TNP Enterprises, Inc., (144A), 03/31/00 75,000 10.25%, due 04/01/10 The total value of restricted securities is $330,125, which represents 0.6% of net assets of the Fund at April 30, 2000. 39 TCW Galileo Funds, Inc. ------------------------------------------------------------------------------- U.S. Fixed Income Notes to Financial Statements (Unaudited) (Continued) Note 9 -- Restricted Securities TCW Galileo High Yield Bond Fund: Principal Amount or Number of Date of Shares Investment Acquisition Cost ---------- ----------------------------------- ----------- ---------- $1,650,000 360networks, Inc., (144A), 13%, 04/20/00 $1,610,259 due 05/01/08 $1,200,000 Bio-Rad Laboratories, Inc., (144A), 02/14/00 1,185,984 11.625%, due 02/15/07 $1,000,000 Charter Communications Holdings, 02/08/00 1,002,500 LLC, (144A), 10%, due 04/01/09 $2,000,000 Classic Cable, Inc., (144A), 10.5%, 11/09/99 2,000,000 due 03/01/10 3,300 Classic Communications, Inc., 05/03/99 0 (144A), Common Stock $1,850,000 Concentra Operating Corp., (144A), 08/05/99 1,753,421 13%, due 08/15/09 $ 500,000 Consolidated Container Companies, 06/24/99 501,125 LLC, (144A), 10.125%, due 07/15/09 $ 915,000 Huntsman Industries/Specialty 11/03/98 898,153 Chemical Corp., (144A), 9.5%, due 07/01/07 $2,600,000 Level 3 Communications, Inc., 02/24/00 2,600,000 (144A), 11%, due 03/15/08 $2,600,000 Nextlink Communications, Inc., 11/12/99 1,505,287 (144A), 0%, due 12/01/09 $1,000,000 Rhythms NetConnections, Inc., 02/16/00 1,000,000 (144A), 14%, due 02/15/10 $ 600,000 Spectrasite Holdings, Inc., (144A), 03/10/00 600,000 10.75%, due 03/15/10 $ 425,000 TNP Enterprises, Inc., (144A), 03/31/00 425,000 10.25%, due 04/01/10 $ 905,000 Von Hoffmann Press, Inc., (144A), 03/09/00 960,579 10.875%, due 05/15/07 The total value of restricted securities is $15,140,549, which represents 7.9% of net assets of the Fund at April 30, 2000. 40 TCW Galileo Money Market Fund [LOGO] -------------------------------------------------------------------------------- Financial Highlights
Six Months Ended Year Ended October 31, April 30, 2000 --------------------------------------------------------------------------------- (Unaudited) 1999 1998 1997 1996 1995 -------------- ---------- ---------- ---------- ---------- --------- Net Asset Value per Share, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- --------- -------- -------- ------- Income from Investment Operations: Net Investment Income 0.0266 0.0434 0.0519 0.0516 0.0509 0.0549 -------- -------- -------- -------- -------- ------- Less Distributions: Distributions from Net Investment Income (0.0266) (0.0434) (0.0519) (0.0516) (0.0509) (0.0549) -------- -------- -------- -------- -------- ------- Net Asset Value per Share, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======= Total Return 3.14%/(1)/ 4.85% 5.31% 5.29% 5.21% 5.67% Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $226,659 $261,300 $242,451 $222,771 $233,671 $86,302 Ratio of Expenses to Average Net Assets 0.38%/(2)/(3)/ 0.38% 0.40%/(3)/ 0.40%/(3)/ 0.40%/(3)/ 0.40%/(3)/ Ratio of Net Investment Income to Average Net Assets 5.37%/(2)/ 4.76% 5.19% 5.17% 5.04% 5.49%
(1) For the six months ended April 30, 2000 and not indicative of a full year's operating results. (2) Annualized. (3) The investment Advisor had voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund to 0.40% of net assets as disclosed in Note 5 of the Notes to financial statements. Had such action not been taken, total annualized operating expenses as a percentage of average net assets would have been 0.41%, 0.40%, 0.44%, and 0.46% for the fiscal years ended October 31, 1998, 1997, 1996 and 1995, respectively. See accompanying notes to financial statements. 41 TCW Galileo Core Fixed Income Fund -------------------------------------------------------------------------------- Institutional Class Financial Highlights
Six Months Ended Year Ended October 31, April 30, 2000 --------------------------------------------------------------------------- (Unaudited) 1999 1998 1997 1996 1995 -------------- ---------- ----------- ---------- ---------- ---------- Net Asset Value per Share, Beginning of Period $ 9.42 $ 9.89 $ 9.62 $ 9.45 $ 9.61 $ 8.94 ------- ------- -------- ------- ------- ------- Income (Loss) from Investment Operations: Net Investment Income 0.28 0.57 0.55 0.58 0.55 0.58 Net Realized and Unrealized Gain (Loss) on Investments (0.27) (0.50) 0.29 0.19 (0.16) 0.62 ------- ------- -------- ------- ------- ------- Total from Investment Operations 0.01 0.07 0.84 0.77 0.39 1.20 ------- ------- -------- ------- ------- ------- Less Distributions: Distributions from Net Investment Income (0.28) (0.54) (0.57) (0.60) (0.55) (0.53) ------- ------- -------- ------- ------- ------- Net Asset Value per Share, End of Period $ 9.15 $ 9.42 $ 9.89 $ 9.62 $ 9.45 $ 9.61 ======= ======= ======== ======= ======= ======= Total Return 0.10%/(1)/ 0.69% 9.02% 8.45% 4.26% 13.92% Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $53,354 $70,666 $162,996 $19,368 $25,006 $36,236 Ratio of Expenses to Average Net Assets 0.76%/(2)/ 0.58%/(3)/ 0.62% 0.93% 0.76% 0.68%/(3)/ Ratio of Net Investment Income to Average Net Assets 6.09%/(2)/ 5.83% 5.60% 6.13% 5.85% 6.38% Portfolio Turnover Rate 43.37%/(1)/ 136.63% 272.77% 142.96% 238.73% 223.78%
(1) For the six months ended April 30, 2000 and not indicative of a full year's operating results. (2) Annualized. (3) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extend necessary to limit the annual ordinary operating expenses of the Fund as disclosed in Note 5 in the Notes to Financial Statements. Had such action not been taken, total annualized operating expenses as a percentage of average net assets would have been 0.59% and 0.72% for the years ended October 31, 1999 and 1995, respectively. See accompanying notes to financial statements. 42 TCW Galileo Core Fixed Income Fund [LOGO] -------------------------------------------------------------------------------- Advisory Class Financial Highlights March 1, 1999 Six Months (Commencement of Ended offering of Advisory April 30, 2000 Class shares) through (Unaudited) October 31, 1999 -------------- --------------------- Net Asset Value per Share, Beginning of Period $ 9.51 $ 9.74 ------ ------ Income (Loss) from Investment Operations: Net Investment Income 0.27 0.37 Net Realized and Unrealized (Loss) on Investments (0.28) (0.35) ------ ------ Total from Investment Operations (0.01) 0.02 ------ ------ Less Distributions: Distributions from Net Investment Income (0.26) (0.25) ------ ------ Net Asset Value per Share, End of Period $ 9.24 $ 9.51 ====== ====== Total Return (0.11)%/(1)/ 0.17%/(2)/ Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $ 77 $ 83 Ratio of Expenses to Average Net Assets 1.00%/(3)/(4)/ 1.00%/(3)/(4)/ Ratio of Net Investment Income to Average Net Assets 5.72% /(3)/ 5.68%/(3)/ Portfolio Turnover Rate 43.37% /(1)/ 136.63% (1) For the six months ended April 30, 2000 and not indicative of a full year's operating results. (2) For the period March 1, 1999 (Commencement of offering of Advisory Class shares) through October 31, 1999 and not indicative of a full year's operating results. (3) Annualized. (4) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund as disclosed in Note 5 in the Notes to the Financial Statements. Had such action not been taken, total annualized operating expenses, as a percentage of average net assets, would have been 31.45% for the six months ended April 30, 2000 and 134.10% for the period from March 1, 1999 (Commencement of offering of Advisory Class shares) to October 31, 1999, respectively. See accompanying notes to financial statements. 43 TCW Galileo High Yield Bond Fund -------------------------------------------------------------------------------- Institutional Class Financial Highlights
Six Months Ended Year Ended October 31, April 30, 2000 --------------------------------------------------------- (Unaudited) 1999 1998 1997 1996 1995 -------------- ---------- ---------- ---------- ---------- --------- Net Asset Value per Share, Beginning of Period $ 8.85 $ 9.20 $ 10.11 $ 9.77 $ 9.74 $ 9.43 -------- -------- -------- -------- -------- ------- Income (Loss) from Investment Operations: Net Investment Income 0.42 0.80 0.88 0.91 0.89 0.92 Net Realized and Unrealized Gain (Loss) on Investments (0.35) (0.37) (0.74) 0.34 0.03 0.39 -------- -------- -------- -------- -------- ------- Total from Investment Operations 0.07 0.43 0.14 1.25 0.92 1.31 -------- -------- -------- -------- -------- ------- Less Distributions: Distributions from Net Investment Income (0.44) (0.78) (0.89) (0.91) (0.89) (1.00) Distributions in Excess of Net Investment Income (0.01) -- (0.01) -- -- -- Distributions from Net Realized Gain -- -- (0.15) -- -- -- -------- -------- -------- -------- -------- ------- Total Distributions (0.45) (0.78) (1.05) (0.91) (0.89) (1.00) -------- -------- -------- -------- -------- ------- Net Asset Value per Share, End of Period $ 8.47 $ 8.85 $ 9.20 $ 10.11 $ 9.77 $ 9.74 ======== ======== ======== ======== ======== ======= Total Return 0.75%/(1)/ 4.60% 1.18% 13.26% 9.92% 14.65% Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $191,268 $188,098 $165,702 $208,761 $183,815 $92,652 Ratio of Expenses to Average Net Assets 0.88%/(2)/ 0.90% 0.85% 0.83% 0.90% 0.87%/(3)/ Ratio of Net Investment Income to Average Net Assets 9.66%/(2)/ 8.60% 8.89% 9.10% 9.21% 9.60% Portfolio Turnover Rate 35.88%/(1)/ 128.15% 92.24% 109.45% 82.56% 36.32%
(1) For the six-months ended April 30, 2000 and not indicative of a full year's operating results. (2) Annualized. (3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund. Had such action not been taken, total annualized operating expenses as a percentage of average net assets would have been 0.88% for the year ended October 31, 1995. See accompanying notes to financial statements. 44 TCW Galileo High Yield Bond Fund [LOGO] -------------------------------------------------------------------------------- Advisory Class Financial Highlights March 1, 1999 Six Months (Commencement of Ended offering of Advisory April 30, 2000 Class shares) through (Unaudited) October 31, 1999 -------------- --------------------- Net Asset Value per Share, Beginning of Period $ 8.91 $ 9.39 ------ ------ Income (Loss) from Investment Operations: Net Investment Income 0.39 0.55 Net Realized and Unrealized (Loss) on Investments (0.32) (0.57) ------ ------ Total from Investment Operations 0.07 (0.02) ------ ------ Less Distributions: Distributions from Net Investment Income (0.41) (0.46) ------ ------ Net Asset Value per Share, End of Period $ 8.57 $ 8.91 ====== ====== Total Return 0.87%/(1)/ (0.24)%/(2)/ Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $ 332 $ 189 Ratio of Expenses to Average Net Assets 1.26%/(3)/(4)/ 1.30%/(3)/(4)/ Ratio of Net Investment Income to Average Net Assets 8.67%/(3)/ 8.78%/(3)/(4)/ Portfolio Turnover Rate 35.88%/(1)/ 128.15% (1) For the six-months ended April 30, 2000 and not indicative of a full year's operating results. (2) For the period March 1, 1999 (Commencement of offering of Advisory Class shares) through October 31, 1999 and not indicative of a full year's operating results. (3) Annualized. (4) The Investment advisor has voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund as disclosed in Note 5 in the Notes to the Financial Statements. Had such action not been taken, total annualized operating expenses, as a percentage of average net assets, would have been 1.75% for the six months ended April 30, 2000 and 47.83% for the period from March 1, 1999 (Commencement of offering of Advisory Class shares) to October 31, 1999, respectively. See accompanying notes to financial statements. 45 TCW Galileo Mortgage-Backed Securities Fund -------------------------------------------------------------------------------- Financial Highlights
Six Months Ended Year Ended October 31, April 30, 2000 -------------------------------------------------------------------------------- (Unaudited) 1999 1998 1997 1996 1995 -------------- -------------- ---------- ---------- ---------- ------------ Net Asset Value per Share, Beginning of Period $ 9.59 $ 9.60 $ 9.70 $ 9.67 $ 9.58 $ 9.41 ------- ------- ------- ------- ------- ------- Income (Loss) from Investment Operations: Net Investment Income 0.29 0.59 0.35 0.58 0.51 0.67 Net Realized and Unrealized Gain (Loss) on Investments (0.04) (0.09) 0.10 0.05 0.22 0.25 ------- ------- ------- ------- ------- ------- Total from Investment Operations 0.25 0.50 0.45 0.63 0.73 0.92 ------- ------- ------- ------- ------- ------- Less Distributions: Distributions from Net Investment Income (0.28) (0.51) (0.11) (0.38) (0.46) (0.71) Distributions in Excess of Net Investment Income -- -- -- (0.22) (0.18) (0.04) Distributions from Paid-in-Capital -- -- (0.44) -- -- -- ------- ------- ------- ------- ------- ------- Total Distributions (0.28) (0.51) (0.55) (0.60) (0.64) (0.75) ------- ------- ------- ------- ------- ------- Net Asset Value per Share, End of Period $ 9.56 $ 9.59 $ 9.60 $ 9.70 $ 9.67 $ 9.58 ======= ======= ======= ======= ======= ======= Total Return 2.67%/(1)/ 5.36% 4.73% 6.71% 7.86% 10.16% Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $59,992 $53,496 $43,639 $53,307 $61,835 $81,366 Ratio of Expenses to Average Net Assets 0.57%/(2)(3)/ 0.75%/(3)/ 0.83% 0.77% 0.69% 0.61%/(3)/ Ratio of Net Investment Income to Average Net Assets 6.19%/(2)/ 6.10% 3.61% 6.00% 5.34% 7.13% Portfolio Turnover Rate 17.16%/(1)/ 53.48% 68.40% 109.91% 54.10% 37.83%
(1) For the six-months ended April 30, 2000 and not indicative of a full year's operating results. (2) Annualized. (3) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund. Had such action not been taken, total annualized operating expenses as a percentage of average net assets would have been 0.65%, 0.80% and 0.63% for the six months ended April 30, 2000, and the years ended October 31, 1999 and 1995, respectively. See accompanying notes to financial statements. 46 TCW Galileo Total Return Mortgage-backed Securities Fund [ICON] -------------------------------------------------------------------------------- Institutional Class Financial Highlights
Six Months Ended Year Ended October 31, April 30, 2000 ------------------------------------------------------------ (Unaudited) 1999 1998 1997 1996 1995 -------------- ---------- ----------- ---------- ----------- ---------- Net Asset Value per Share, Beginning of Period $ 8.96 $ 9.76 $ 9.91 $ 9.56 $ 9.56 $ 8.95 ------- ------- -------- ------- -------- ------- Income (Loss) from Investment Operations: Net Investment Income 0.24 0.62 0.84 0.75 0.68 0.72 Net Realized and Unrealized Gain (Loss) on Investments (0.13) (0.60) (0.07) 0.32 0.02 0.71 ------- ------- -------- ------- -------- ------- Total from Investment Operations 0.11 0.02 0.77 1.07 0.70 1.43 ------- ------- -------- ------- -------- ------- Less Distributions: Distributions from Net Investment Income (0.23) (0.62) (0.86) (0.72) (0.68) (0.82) Distributions in Excess of Net Investment Income (0.07) (0.20) (0.01) -- (0.02) -- Distributions from Net Realized Gain -- -- (0.05) -- -- -- ------- ------- -------- ------- -------- ------- Total Distributions (0.30) (0.82) (0.92) (0.72) (0.70) (0.82) ------- ------- -------- ------- -------- ------- Net Asset Value per Share, End of Period $ 8.77 $ 8.96 $ 9.76 $ 9.91 $ 9.56 $ 9.56 ======= ======= ======== ======= ======== ======= Total Return 1.29%(1) 0.20% 8.20% 11.66% 7.69% 16.84% Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $87,083 $90,275 $101,501 $81,442 $112,260 $80,159 Ratio of Expenses to Average Net Assets 0.71%/(2)/ 0.69% 0.70% 0.67% 0.68% 0.68%/(3)/ Ratio of Net Investment Income to Average Net Assets 5.38% /(2)/ 6.62% 8.52% 7.77% 7.15% 7.88% Portfolio Turnover Rate 0.00% /(1)/ 28.07% 27.95% 16.01% 39.28% 23.76%
(1) For the six-months ended April 30, 2000 and not indicative of a full year's operating results. (2) Annualized (3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund. Had such action not been taken, total annualized operating expenses, as a percentage of average net assets would have been 0.69% for the year ended October 31, 1995. See accompanying notes to financial statements. 47 TCW Galileo Total Return Mortgage-Backed Securities Fund -------------------------------------------------------------------------------- Advisory class Financial Highlights March 1, 1999 Six Months (Commencement of Ended offering of Advisory April 30, 2000 Class shares) through (Unaudited) October 31, 1999 --------- ---------------- Net Asset Value per Share, Beginning of Period $ 9.23 $ 9.40 ------ ------ Income (Loss) from Investment Operations: Net Investment Income 0.23 0.43 Net Realized and Unrealized (Loss) on Investments (0.14) (0.49) ------ ------ Total from Investment Operations 0.09 (0.06) ------ ------ Less Distributions: Distributions from Net Investment Income (0.30) (0.11) ------ ------ Net Asset Value per Share, End of Period $ 9.02 $ 9.23 ====== ====== Total Return 1.14%/(1)/ (0.69)%/(2)/ Ratios/Supplemental Data: Net Assets, End of Period (in thousands) $ 35 $ 37 Ratio of Expenses to Average Net Assets 1.00%/(3)(4)/ 1.02%/(3)(4)/ Ratio of Net Investment Income to Average Net Assets 5.12%/(3)/ 7.00%/(3)/ Portfolio Turnover Rate 0.00%/(1)/ 28.07% (1) For the six-months ended April 30, 2000 and not indicative of a full year's operating results. (2) For the period March 1, 1999 (Commencement of offering of Advisory Class shares) through October 31, 1999 and not indicative of a full year's operating results. (3) Annualized. (4) The Investment Advisor has voluntarily agreed to reduce its fee, or to pay the operating expenses of the Fund, to the extent necessary to limit the annual ordinary operating expenses of the Fund as disclosed in Note 5 in the Notes to the Financial Statements. Had such action not been taken, total annualized operating expenses, as a percentage of average net assets, would have been 69.46% for the six months ended april 30, 2000 and 722.10% for the period from March 1, 1999 (Commencement of offering of Advisory Class shares) to October 31, 1999, respectively. See accompanying notes to financial statements. 48 TCW GALILEO FUNDS April 30, 2000 SHAREHOLDER INFORMATION DIRECTORS AND OFFICERS INVESTMENT ADVISOR Marc I. Stern TCW Investment Management Company Director and Chairman of the Board 865 South Figueroa Street Los Angeles, California 90017 Alvin R. Albe, Jr. (213) 244-0000 Director and President CUSTODIAN & ADMINISTRATOR John C. Argue Director Investors Bank & Trust Company 200 Clarendon Street Norman Barker, Jr. Boston, Massachusetts 02116 Director TRANSFER AGENT Richard W. Call Director DST Systems, Inc. 210 West 10th Street Matthew K. Fong Kansas City, Missouri 64105 Director DISTRIBUTOR Thomas E. Larkin, Jr. Director TCW Brokerage Services 865 South Figueroa Street Charles W. Baldiswieler Los Angeles, California 90017 Senior Vice President INDEPENDENT AUDITORS Michael E. Cahill Senior Vice President, Deloitte & Touche, LLP General Counsel and Assistant Secretary 350 South Grand Avenue Los Angeles, California 90017 Jeffery V. Peterson Senior Vice President Robert S. Sant Senior Vice President Philip K. Holl Secretary Hilary G.D. Lord Assistant Secretary Peter C. DiBona Treasurer