TCW Relative Value Dividend Appreciation Strategy

Quarterly Commentary

December 31, 2018


“Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett

In the fourth quarter, the TCW Relative Value Dividend Appreciation (RVDA) strategy returned –15.07% gross (-15.21% net) underperforming the Russell 1000 Value and S&P 500 declines of –11.72% and –13.52, respectively. For the calendar year, the RVDA portfolio returned –13.38% gross (-13.99% net) which underperformed the Russell 1000 Value and S&P 500 returns of –8.27% and –4.38%, respectively. With dividend yield and momentum by far the best performing factors in 2018 (per Barra Analytics’ thirteen risk indices), the RVDA strategy had a difficult year. Usually a long-term positive, the strategy’s diversified portfolio structure hampered returns since mid-May as economically sensitive companies and industries have been negatively impacted by President Trump’s trade war and the rotation to U.S. domestic, high dividend oriented sectors...

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For Information Only

This publication is for general information purposes only. Past performance is no guarantee of future results. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and should not be relied on as such or be the basis for an investment decision.

Subject to Change

Any opinions expressed are current only as of the time made and are subject to change without notice. TCW assumes no duty to update any such statements. The views expressed herein are solely those of the author and do not represent the views of TCW as a firm or of any other portfolio manager or employee of TCW. Any holdings of a particular company or security discussed herein are under periodic review by the author and are subject to change at any time, without notice. In addition, TCW manages a number of separate strategies and portfolio managers in those strategies may have differing views or analysis with respect to a particular company, security or the economy than the views expressed herein.

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