TCW Relative Value Large Cap Fund

Quarterly Commentary

December 31, 2017

Investment Environment

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 (dominated by Information Technology names) 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 effect of Hurricanes Harvey, Irma, and Maria will be felt for many months and perhaps years to come, but as destructive as they were, the storms proved to be less disastrous than feared. 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. The U.S. dollar’s decline over the quarter (as well as the calendar year) along with stronger U.S. and global growth propelled commodity and related sectors in general. For example, West Texas Intermediate crude was up 16.9% in the quarter and 12.5% for the year while S&P 500 Energy stocks, as a group, returned 6.1% and -1.0%, respectively...

To read full commentary please click pdf below.

Media Attachments

Legal Disclosures

Russell 1000® Value Index – Measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values.

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.

Portfolio Characteristics & Holdings

Portfolio characteristics and holdings are subject to change at any time.

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.

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.
Obtain a Prospectus

You should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. A Fund’s Prospectus and Summary Prospectus contain this and other information about the Fund. To receive a Prospectus, please call 800-386-3829 or you may download the PDF TCW Funds Prospectus. Please read it carefully.

The TCW Funds are distributed by TCW Funds Distributors LLC