TCW Relative Value Mid Cap Strategy

(Formerly the TCW Value Opportunities Strategy)

Marketable Securities Division

An aggressive capital appreciation style that generally invests in small- and medium-sized cap companies deemed to be under­valued relative to the equities market.

At-A-Glance

AUM or Committed to Management

$182.6 Million (as of 09/30/18)

Investment Vehicles and Minimums Separate Account
For Institutions $25 Million
For High Net Worth Individuals $5 Million

Relative Value Mid Cap Fund  $2,000

Style

Investment Team

  • Diane E. Jaffee, CFA
Strategy Information
Product Name 1-mo 3-mo YTD
Annualized Performance
1-yr
3-yr 5-yr Since Inception
[07/17/1996]
TCW (Gross) -2.70% -0.13% 1.60% 8.10% 15.65% 10.52% 12.29%
TCW (Net) -2.76% -0.33% 0.99% 7.24% 14.73% 9.63% 11.39%
Russell Midcap Value Index -0.79% 3.30% 3.13% 8.81% 13.09% 10.72% 11.08%
as of 09/30/2018 (updated quarterly)

Click Here for detailed Performance Disclosures 

Investment Objective

TCW Relative Value Mid Cap seeks capital appreciation by generally investing in small- and medium-capitalization companies which we believe are inefficiently priced due to transitional issues and have an internal catalyst for cash flow, operating margin, and eventual earnings growth. Through an analytical process of bottom-up fundamental research, our job is to calculate a company’s inherent value and commit funds when the market price is substantially below that value. Because we are buying stocks which typically have depressed historical earnings growth, reaching investment objectives takes time and we generally look through short-term stock fluctuations. We believe this focus on long-term capital appreciation provides superior investment returns over a full market cycle.

We typically invest in securities that meet one or more of our five valuation characteristics: price-to-earnings, price-to-cash flow, price-to-sales, price-to-book, and dividend yield. Positions are sold or reduced when the market fairly values a company’s improved prospects based on its valuation target, when a position becomes larger than a predetermined percentage of the portfolio, or it is determined that the goals of the company cannot be achieved after a fundamental review.

Philosophy 

The basic underlying philosophy of the strategy is that every company has an “intrinsic value” based on its inherent assets, its absolute level of recurring earnings, or its earnings growth potential. The stock of a company will often fall below its true market value when it has a period of earnings trauma.

 

 

Performance Returns

as of 09/30/2018 (updated quarterly)

Top Ten Holdings (%)

  Portfolio
Textron 3.76
Centene 3.48
AES 3.39
KeyCorp 3.16
Popular 3.14
Tapestry 3.06
Newpark Resources 3.00
Maxim Integrated Products 2.84
Jones Lang LaSalle 2.71
Manitowoc Company 2.45
as of 9/30/2018 (updated quarterly)

Sector Weight (%)

as of 9/30/2018 (updated quarterly)

Legal Disclosures


The source for all charts and tables above is TCW
Objective Disclosure

There can be no assurance that this strategy will be able to achieve its objectives.

Russell Trademark

Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes.  Russell® is a trademark of Russell Investment Group.

Index Disclosure

The index or indices cited herein are unmanaged groups of securities often taken as representative of those segments of the overall market and assume no reduction for fees and expenses in measuring returns. The securities in the index or indices may be substantially different from those in the strategy.

About Portfolio Values and Holdings

Portfolio characteristics and holdings are subject to change at any time. It should not be assumed that an investment in the securities listed was, or will be, profitable.

About Performance
Performance for any period not ending on a calendar quarter end is subject to adjustment at quarter end for accounts that are not present for the entire quarter. Past performance is no guarantee of future results.

This material is for general information purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security. Any issuers or securities noted in this document are provided as illustrations or examples only, for the limited purpose of analyzing general market or economic conditions and may not form the basis for an investment decision, nor are they intended to serve as investment advice. Any such issuers or securities are under periodic review by the portfolio management group and are subject to change without notice. TCW makes no representation as to whether any security or issuer mentioned in this document is now in any TCW portfolio. TCW, its officers, directors, employees or clients may have positions in securities or investments mentioned in this publication, which are subject to change without notice. Any information and statistical data contained herein derived from third party sources are believed to be reliable, but TCW does not represent that they are accurate, and they should not be relied on as such or be the basis for an investment decision. All information is as of the date of this presentation unless otherwise indicated.

An investment in the strategy described herein has risks, including the risk of losing some or all of the invested capital. An investor should carefully consider the risks and suitability of an investment strategy based on their own investment objectives and financial position. There is no assurance that the investment objectives and/or trends will come to pass or be maintained. The information contained herein may include preliminary information and/or “forward-looking statements.” Due to numerous factors, actual events may differ substantially from those presented herein. TCW assumes no duty to update any forward-looking statements or opinions in this document. This material comprises the assets under management of The TCW Group, Inc. and its subsidiaries, including TCW Investment Management Company LLC, TCW Asset Management Company LLC, and Metropolitan West Asset Management, LLC. Any opinions expressed herein are current only as of the time made and are subject to change without notice. The investment processes described herein are illustrative only and are subject to change. Past performance is no guarantee of future results. © 2018 TCW

Investment Team

  • Photo: Diane E. Jaffee, CFA
    Diane E. Jaffee, CFA
    Group Managing Director

    Ms. Jaffee is the Senior Portfolio Manager for the TCW Relative Value Large Cap, TCW Relative Value Dividend Appreciation, and TCW Relative Value Mid Cap strategies and funds. She joined TCW through the acquisition of SG Cowen Asset Management in 2001. She had been a Senior Portfolio Manager at Cowen Asset Management since 1995 and continues in that role at TCW. She has more than 30 years of investment experience. Before joining Cowen, she was Vice President and Portfolio Manager at Kidder, Peabody & Co from 1986 to 1995. Prior to that, she was Vice President at Lehman Management Company from 1985 to 1986 and an Equity Analyst with Prudential Insurance from 1982 to 1985. In 2007, Ms. Jaffee was named the Separately Managed Accounts Award winner in the Large Cap Equity category by Standard & Poor’s and its award partners Prima Capital and Investment Advisor magazine. The TCW Relative Value Large Cap, Dividend Appreciation, and Mid Cap mutual funds have been each awarded Wall Street Journal’s “Category Kings” in their respective categories, multiple times in 2012, and the TCW Dividend Appreciation Fund was ranked the #1, top performing fund among Lipper Equity Income Funds for 2012. In 2013, the TCW Relative Value Large Cap mutual fund was ranked #1 fund for the first quarter and the #6 fund for the one-year period ending March 31, 2013 among Large Cap Value peers, while the Dividend Appreciation Fund ranked #2 for the quarter and #3 for the one-year period ending March 31, 2013 among Equity Income peers. Ms. Jaffee holds a BA in Economics from Wellesley College (1982). She has completed post-graduate work in Finance and Accounting at Rutgers University Graduate School of Management and is a CFA charterholder. Ms. Jaffee is also a member of the New York Society of Security Analysts, the Economic Club of New York, and the CFA Society.

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