TCW Relative Value Large Cap Fund

Quarterly Commentary

September 30, 2017

Investment Environment

The major indices reached record highs on the heels of solid 2Q earnings, global growth, and rising oil prices. With nearly all S&P 500 companies reporting, second quarter earnings were up in the low double digits, year-over-year, after a 15% increase in the first quarter. Second quarter U.S. GDP, with the third release showing 3.1% growth, assuaged concerns stirred by the tepid 1Q figure. Highlights of the report show consumer spending grew 3.3%, the biggest gain since 2Q:16, and nonresidential fixed investment rising 6.9%. The Organization for Economic Co-operation and Development (OECD) revised upward its 2018 global growth projection to 3.7% with the U.S. estimated to grow by 2.4%. As a sign of U.S. economic strength, at its September meeting the Fed announced it would begin to reduce its balance sheet reinvestment of principal payments in October; $10 billion per month, to start, and gradually raising that amount in the months to come. As expected, the Committee did not raise rates but remarked it believes growth will be strong enough to warrant one incremental increase by the end of the year. Oil prices (WTI) have risen above $50 due to a number of factors including 1) OPEC considering an output agreement extension for an additional three months after March 2018, 2) U.S. crude stockpiles declining from a March peak, and 3) disruptions and declines including Libya, Kurdistan, and some Permian producers...

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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.
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