TCW Relative Value Large Cap Strategy

Quarterly Commentary

December 31, 2017

Key Issues

  • U.S. equities turned in another solid quarter on the heels of mostly solid earnings reports as well as the anticipation of the tax relief program which President Trump signed into law on December 22. Mr. Trump then also signed a one month stop gap to keep the government running until January 19. After two quarters of double-digit growth, 3Q:17 earnings for S&P 500 companies once more gained nearly 10% in the third quarter albeit somewhat dampened by the hurricanes and significant property and casualty write-downs. While earnings had been driven more by cost cutting and restructuring efforts in previous quarters, S&P 500 companies experienced accelerating top line growth in 2017 with ~5% year-over-year growth in the third quarter. The third release of 3Q 2017 GDP showed a resilient U.S. economy expanding at a 3.2% rate (quarter-over-quarter) with the rise reflecting increases in consumer spending, inventory investment, business investment, and exports...

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Legal Disclosures

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.