Summary

• The TCW MetWest Low Duration Bond Fund I-Class returned 0.22% net of fees in the first quarter of 2026 while the ICE BofA 1-3 Year U.S. Treasury Index gained 0.29%.
• Geopolitical developments increasingly overshadowed the macro narrative, culminating in a late-February escalation in the Middle East that materially altered market expectations through quarter-end.
• Agency mortgage-backed securities started the quarter with strong performance following President Trump's announcement that Fannie Mae and Freddie Mac would be buying $200bn of agency MBS.
• The Fund's overweight duration position and emphasis on front-end yields drove underperformance as government yields rose significantly amid a hawkish repricing of Fed policy expectations.
• TCW views the dramatic rise in rates and hawkish repricing of the Fed as overdone and have positioned the portfolio accordingly, with a modest duration overweight.

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