Metwest Strategic Income Fund

Quarterly Commentary

Reeling from 2018’s fourth quarter, over which risk markets tumbled and, as if to dare the Fed to maintain its ongoing tightening regime, US Treasury issues rallied sharply, it took only a few days into the new year for a dovish pivot to change sentiment. Foreshadowed by Fed Chair Powell’s January 3rd “low inflation” and “patient” comments, the FOMC meeting concluded later in the month with an unchanged funds rate and substantially softened messaging, suppressing volatility and providing cover for higher valuations. The runway clear, risk assets ended the first quarter in strong positive territory, as the S&P 500 Index gained 13.6% while the Bloomberg Barclays Aggregate and High Yield Indexes returned 2.9% and 7.3%, respectively, the latter on an astonishing 135 basis points of spread narrowing as risk aversion subsided. Other indicators of the reversal included emerging markets debt, which gained north of 5% to open the year after a rugged 2018, and oil, which ran up 30% (though likely for technical reasons as much as anything as economic fundamentals faded)...

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Legal Disclosures

BofA Merrill Lynch 3 Month U.S. Treasury Bill Index Plus 200 bps – An unmanaged index comprised of a single issue purchased at the beginning of the month and held for a full month. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but, not beyond three months from the rebalancing date.

About the Index or Indices

The index listed is not available for direct investment; therefore its performance does not reflect a reduction for fees or expenses incurred in managing a portfolio. The securities in the index may be substantially different from those in the Fund.

Forward Looking Statement

This report may include estimates, projections and other "forward-looking statements." Due to numerous factors, actual events may differ substantially from those presented. TCW assumes no duty to update any such statements.

About Performance
The performance data presented represents past performance and is no guarantee of future results. Total returns include reinvestment of dividends and distributions. Current performance may be lower or higher than the performance data presented. Performance data current to the most recent month end is available on the product detail page for each Fund. Investment returns and principal value will fluctuate with market conditions. The value of an investment in the Fund, when redeemed, may be worth more or less than its original purchase cost.
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A Word About Risk

The primary risks affecting this Fund are “interest rate risk” (including “extension risk” and “prepayment risk”), “liquidity risk,” “derivatives risk,” “foreign securities risk,” “credit risk” and “junk bond risk.”

The funds' investments in high yield securities are considered speculative and are subject to greater volatility and risk of loss than investment grade securities, particularly in deteriorating economic conditions

The MetWest Funds are distributed by TCW Funds Distributors LLC.

The MetWest Funds are advised by Metropolitan West Asset Management, LLC, which is a wholly-owned subsidiary of The TCW Group, Inc.