TCW Relative Value Mid Cap Fund

Quarterly Commentary

September 30, 2019

Investment Environment

U.S. equities turned in a modest showing in the third quarter. July was much ado about corporate earnings which were largely positive with a majority of companies beating estimates. 2Q:19 U.S. GDP came in better than expected at 2.0% year-over-year, boosted by consumer and government expenditures while business investment (perhaps due in large part to uncertainty on trade), declining inventories, and net imports were a drag. As widely expected, for the first time in over a decade, the Federal Open Market Committee (FOMC) cut rates by 25 basis points at its July 31 meeting and was followed by a second reduction of the same magnitude in September. August began inauspiciously with President Trump’s tweet announcing the imposition of 10% tariff on $300 billion worth of Chinese goods. China soon thereafter allowed its currency (renminbi) to cross over the crucial 7/1 threshold versus the U.S. dollar. In response, the U.S. Treasury Department officially designated China as a “currency manipulator.” The equity markets remained turbulent throughout the month with much of the volatility due to the ongoing trade war between the two sides and its ripple effect on the global economy; Germany, the Eurozone’s largest economy, contracted in the second quarter. The yield curve’s inversion stoked U.S. recessionary fears, however positive, albeit slowing, economic data helped assuage concerns due to a relatively strong and confident U.S. consumer. Toward quarter end stocks were rattled (but soon thereafter recovered) upon the whistleblower complaint which has subsequently led to a presidential impeachment inquiry. The two most recent impeachment inquiries’ (Richard Nixon; down and Bill Clinton; up) impact on U.S. markets was mixed and much more dependent on underlying economic growth...

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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.


Russell Midcap® Value Index – A market capitalization-weighted index of medium-capitalization, value-oriented stocks of U.S. companies.

Portfolio Characteristics & Holdings

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

A Word About Risk

Equity investments entail equity 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. Funds investing in mid and small cap companies involve special risks including higher volatility and lower liquidity.

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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