TCW Artificial Intelligence Equity Fund

Quarterly Commentary

September 30, 2018

Performance

The TCW Artificial Intelligence Equity Fund, I Share Class (the “Fund”) generated a return of +3.14% during the quarter and underperformed the Russell 3000® Growth Index return of +8.88%. The portfolio’s underperformance was due to the Fund’s overexposure to the Internet Software & Services subsector relative to the Russell 3000® Growth Index. Notable individual underperformers for the quarter included Twitter (TWTR; 0.97%**), Tencent Holdings (TCEHY; 1.44%**), and Alibaba Group Holding (BABA; 1.78%**). Additionally, individual relative weakness in the quarter came from Western Digital (WDC; 1.22%**), Micron Technology (MU; 1.69%**) and Netflix†. We would also note that although Apple (AAPL; 1.95%**) is a holding in our portfolio, the index is substantially overweight in the name as compared to our position size (average weight of 6.98% in the index versus 1.17% in the portfolio). As a result, though Apple’s significant positive performance was a strong contributor to the fund in absolute terms, Apple was a large relative underperformer as compared to the index. Partially offsetting the weakness was strong performance in the quarter from core top ten holdings such as Splunk (SPLK; 2.98%**), NVIDIA (NVDA; 4.00%**), and salesforce.com (CRM; 3.57%**). Additional outperformers worth mentioning were Workday (WDAY; 1.89%**), and Nuance Communications (NUAN; 1.04%**)...

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Russell 3000® Growth Index – Measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000 companies with higher price-to-book ratios and higher forecasted growth values.

Portfolio Characteristics & Holdings
It should not be assumed that an investment in the securities listed was or will be profitable. Portfolio characteristics and holdings are subject to change at any time.

This content may include estimates, projections and other "forward-looking" statements. Actual events may differ substantially from those presented. TCW/MetWest assumes no duty to update any such statements. All projections are based on current asset prices and are subject to change.

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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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