Metwest Unconstrained Bond Fund

Quarterly Commentary

Market Review: “With the Fed Around, Uncertainty is Certain”

While there were a litany of downside risks facing markets this year, the dovish stance (and, ultimately, action) of global central banks overwhelmed any temporary disruptions, with equity markets responding in Pavlovian fashion to the mere suggestion of monetary accommodation. Looking back, it would have been a stretch to have predicted a year of over 30% returns for equities and nearly 9% for fixed income, knowing the myriad risks and policy uncertainty. The list of headline risks included heightened U.S.-China trade tensions, the longest U.S. auto workers’ strike in 50 years (at General Motors), repo market funding pressures, a U.S. presidential impeachment, ongoing Brexit rancor, and a Venezuelan default. Trade effects were outsized in 2019, as the direction of talks – and ensuing market reaction – seemed to shift constantly and influence, particularly, stock market ups and downs. However, the general trend tilted positive late in the year as trade negotiations picked up and nearterm uncertainty came down. Not surprisingly, businesses remained skeptical in this environment, evidenced by sharp declines in survey-based measures of expectations, confidence, and spending decisions. Still, the dominating theme of the fourth quarter (and all of 2019) was that of central bank accommodation, leading to a sharp rise in net asset purchases which, having reached a post-crisis low of $77 billion earlier this year, are estimated to grow by over $1 trillion by September 2020...

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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

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.