TCW Relative Value Balanced Strategy

Quarterly Commentary

September 30, 2019

Key Issues

  • U.S. equities turned in a modest showing in the third quarter. July was much ado about corporate earnings which were largely positive with a majority of S&P 500 companies beating estimates. In aggregate, earnings were up 3% year-over-year with revenue growth of nearly 5%. While growth has decisively outperformed value year-to-date through August 31, there was a noticeable reversal in September with the Russell 1000 Value Index outperforming the Russell 1000 Growth Index by over 3.5%. 2Q:19 U.S. GDP came in better than expected at 2.0% year-over-year, boosted by consumer and government expenditures while business investment, declining inventories, and net imports were a drag. August began inauspiciously with President Trump’s tweet announcing the imposition of a 10% tariff on $300 billion worth of Chinese goods. China soon thereafter allowed its currency to cross over the crucial 7/1 threshold versus the U.S. dollar. In response, the U.S. Treasury Department officially designated China as a “currency manipulator.” The equity markets remained turbulent throughout the month with much of the volatility due to the ongoing trade war between the two sides and its ripple effect on the global economy...

To read full commentary please click pdf below.

Media Attachments

Note:
The equity component of this Balanced strategy is TCW Relative Value Large Cap.
For Information Only

This publication is for general information purposes only and is not intended  to offer investment advice or be the basis for an investment decision.

Not An Offer

Nothing in this document constitutes an offer to sell or the solicitation of an offer to buy securities. Investing in any strategy has risks.

Price Volatility

An account is subject to price volatility. The value of an account’s portfolio will change as the prices of its investments go up or down. Because an account typically invests in less than 40 equity securities at any time, it may have greater price volatility than a more diversified portfolio. Before embarking on the described investment program, an investor should carefully consider the risks and suitability of the described strategy based on their own investment objectives and financial position. The strategy will not invest in initial public offerings.

Forward Looking Statement

The information contained herein may include estimates, projections and other “forward-looking statements.” Actual events may differ substantially from those presented herein. TCW assumes no duty to update any such forward-looking statements or any other information or opinions in this document. TCW makes no representation that future investment performance will conform to past performance and it should never be assumed that past performance foretells future performance. TCW's portfolio managers make investment decisions based on various sources of information and analysis and are not necessarily based on the economic information set forth herein.

Past Performance

TCW makes no representation that future investment performance will conform to past performance and it should never be assumed that past performance foretells future performance. TCW's portfolio managers make investment decisions based on various sources of information and analysis and are not necessarily based on the economic information set forth herein.

A Word About Risk

Equity and fixed income investments entail equity risk, interest rate risk, the risk of issuer default, issuer credit risk, and price volatility risk. The value of stocks and other equity securities will change based on changes in a company's financial condition and in overall market and economic conditions. Strategies investing in bonds can lose their value as interest rates rise and an investor can lose principal.

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.


There is no assurance that any securities discussed herein will remain in an account; be purchased in the portfolio at the time this report is received or that securities sold have not been repurchased. It should not be assumed that any of the securities transactions or holdings discussed were, or will prove to be, profitable or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.