Metwest Ultra Short Bond Fund

Quarterly Commentary

In a continuation of the themes that described the first half of the year, the third quarter was characterized by solid U.S. economic data across several dimensions. Jobless claims dropped to their lowest level in 49 years while GDP growth reflected a 4.2% annualized rate, underpinned by strong consumer and business spending as well as a surge in exports ahead of potential retaliatory tariffs from China. The equity market delivered a third quarter gain of 7.7%, with the S&P 500 reaching fresh record highs on the back of accelerating retail sales, strong corporate earnings and steady employment gains. Investors were also encouraged by constructive steps between the U.S. and Mexico on NAFTA re-negotiations, though details of the agreement remained less than certain as the quarter closed. While much of the macroeconomic data had a positive tilt, the beginning signs of weakness have started to show in the housing sector – the segment of the economy which has thus far been an engine for growth – as new home sales, housing starts, and building permits have disappointed. This is a particularly interest rate sensitive part of the economy and affordability is much lower than it has been in the past, particularly for the new homebuyer segment, as mortgage rates have climbed significantly over the past twelve months. Trade tensions with China are another source of concern, as multiple retaliatory tariff announcements by both administrations in July and September raised the ante in the trade battle between the two nations...

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Legal Disclosures

BofA Merrill Lynch 1-Year U.S. Treasury Index – 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 two-year Treasury Bill that matures closest to, but not beyond, one year 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

Fixed income investments entail interest rate risk, the risk of issuer default, issuer credit risk, and price volatility risk. Funds investing in bonds can lose their value as interest rates rise and an investor can lose principal.

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.