TCW Core Fixed Income Fund

Quarterly Commentary

Reeling from 2018’s fourth quarter, over which risk markets tumbled and, as if to dare the Fed to maintain its ongoing tightening regime, U.S. Treasury issues rallied sharply, it took only a few days into the new year for a dovish pivot to change sentiment. Foreshadowed by Fed Chair Powell’s January 3rd “low inflation” and “patient” comments, the FOMC meeting concluded later in the month with an unchanged funds rate and substantially softened messaging, suppressing volatility and providing cover for higher valuations. The runway clear, risk assets ended the first quarter in strong positive territory, as the S&P 500 Index gained 13.6% while the Bloomberg Barclays Aggregate and High Yield Indexes returned 2.9% and 7.3%, respectively, the latter on an astonishing 135 basis points of spread narrowing as risk aversion subsided. Other indicators of the reversal included emerging markets debt, which gained north of 5% to open the year after a rugged 2018, and oil, which ran up 30% (though likely for technical reasons as much as anything as economic fundamentals faded)...

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Legal Disclosures

Bloomberg Barclays U.S. Aggregate Bond Index – A market capitalization-weighted index of investment-grade, fixed-rate debt issues, including government, corporate, asset-backed and mortgage-backed securities, with maturities of at least one year.

About Securities

Securities issued by U.S. government agencies and authorities are not insured, and may not be guaranteed by the U.S. Government. 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.

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.

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.

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The TCW Funds are distributed by TCW Funds Distributors LLC