TCW Short Term Bond Fund

Quarterly Commentary

In the simplest terms, a lot went right for markets in 2017, as an almost “Goldilocks” scenario of open markets, ongoing global central bank accommodation (notwithstanding the Fed’s hikes and balance sheet reduction) and largely inflation-free economic growth combined to propel risk assets higher. Most U.S. macroeconomic data points were decidedly positive to end the year, reflected in improving measures of job creation, retail sales, industrial production, and capacity utilization. Further fueling animal spirits, the political apparatus in Washington finally agreed on a comprehensive tax reform bill – a long-absent fiscal achievement – providing for a substantial cut in corporate taxes as well as lower personal rates. In contrast with previous tax legislation, this new law comes at a time when unemployment is relatively low at 4%, thereby providing stimulus to an economy that is already showing momentum. To this point, the 3Q GDP print reported in December came in at 3.2%, bringing the year-over-year growth rate to 2.3%, up from 1.8% at the end of 2016. Despite this increase in economic activity, consumer price pressures remained muted, with the latest core CPI and core PCE prints coming in at 1.7% and 1.5%, respectively, well below the Fed’s nominal 2% target. Above all, volatility remained dormant throughout the year with both the VIX and MOVE Indices at all-time lows, notwithstanding many headline risks (i.e., political uncertainties, escalating North Korea rhetoric, and Fed composition changes)...

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Legal Disclosures

Citigroup 1-Year Treasury Index – Represents the return of the one-year treasuries each month (auctioned monthly). It is determined by taking the 1-year T-bill at the beginning of each month and calculating its return.


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

A Word About Risk

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.

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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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