Summary

• Brent crude ended the period near $118 per barrel, marking its largest quarterly increase since the Gulf War era following geopolitical escalation in the Middle East.
• Markets in Europe and the UK shifted abruptly from expecting cuts to pricing rate hikes in 2026, pushing 2-Year yields sharply higher.
• The TCW MetWest Unconstrained Bond Fund I-Class gained 0.33% in the first quarter of 2026, trailing the Bloomberg U.S. 1-3 Month T-Bill Index by 55 basis points.
• Non-agency MBS positions contributed significantly to the Fund, benefiting from steady carry and resilient structures during the volatile second half of the quarter.
• The Fund has positioned the portfolio with a modest duration overweight, as managers view the dramatic rise in rates and hawkish repricing as overdone.

Market Review

Having entered 2026 with markets continuing to digest the effects of late-2025 policy easing and gradually moderating inflation, the first quarter unfolded in two distinct phases. Early-quarter trading was relatively orderly, supported by still-resilient economic data