TCW Relative Value Large Cap Strategy

Quarterly Commentary

September 30, 2018

Key Issues

  • The U.S. economy is strong, underpinning robust corporate revenues and earnings. The second reading for 2Q:18 U.S. GDP came in at 4.2% quarter-over-quarter driven by stronger business investment. S&P 500 company earnings were up 25% (17% excluding taxes) in the second quarter (year-over-year) on the heels of nearly 10% revenue growth. The current bull market is now officially the longest in history, and the S&P 500 and NASDAQ are at all-time highs, yet the U.S. GDP recovery is still only up halfway relative to other cycles. As to trade, early in the quarter, Mr. Trump and European Commission President Juncker positively agreed to suspend new tariffs. Tariffs on steel and aluminum that went into effect in July have exceptions but remain in place and will be reexamined. More recently, the U.S. and Mexico reached an agreement to revamp NAFTA, and during the last few minutes of the quarter Canada joined the fold. The new pact will now be known as the United States-Mexico-Canada Agreement...

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Media Attachments

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

Investing in any strategy has risks. 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. 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 investments entail equity 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.

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.