I am pleased to present the semi-annual report for the TCW Funds, Inc. covering the six-month period ended April 30, 2022. I would like to express our appreciation for your continued investment in the TCW Funds as well as welcome new shareholders to our Fund family. As of April 30, 2022, the TCW Funds held total assets of approximately $12.6 billion.

This report contains information outlining the performance and a list of portfolio holdings as of April 30, 2022 for the TCW Funds’ Equity Funds and the TCW Conservative Allocation Fund.

The U.S. Stock Market

U.S. stocks declined 9.6% (S&P 500 Total Return Index) during the period under review, as surging inflation forced the U.S. Fed to embark on a series of interest rate hikes as well as a reduction of its balance sheet assets (“quantitative tightening”). The equity market had surged to a record high in early January once it became clear that the COVID-19 Omicron variant was not as deadly as prior waves of the pandemic, and prospects for economic growth were boosted by continued healing of the labor market, with the unemployment rate falling below 4%. However, Russia’s late-February invasion of Ukraine prompted concerns about the potential for a wider military conflict as well as worries about the impact of soaring energy prices. At the same time, consumer inflation spiked to a 40-year high in March, with the headline consumer price index (CPI) gauge jumping 8.5% in March. The Fed finally raised its reference rate 25 basis points early that month, and Chair Powell made it clear that 50 basis point rate hikes might well be required in future meetings in order to rein in inflation and achieve a “soft landing,” but investors worried that a more aggressive series of interest rate hikes might push the U.S. economy into recession next year. To be sure, growth prospects dimmed across the globe with Europe facing the possibility of a recession this year given the Ukraine war, and China’s economy was

set to slow in light of its continued draconian COVID-19 pandemic lockdowns. After bonds’ worst quarter in more than 40 years, the yield on the 10-Year U.S. Treasury Note continued to rise in April, spiking 60 basis points from 2.34% to 2.94%, as investors priced in the likelihood of the Fed hiking its reference rate to a “neutral” level of perhaps 3.25% over the next 12-18 months. As a result, a decidedly “risk-off” dynamic led to a sharp sell-off in the equity market that was led by longer-duration cash flow names in the technology-laden NASDAQ Index.

Looking forward, we note that the resilience of U.S. corporate earnings has been overshadowed by the major macroeconomic developments cited above. In 1Q22, with the vast majority of companies having reported, revenues are running at an impressive 13.7% year-over-year (YoY) growth rate, while earnings per share have advanced about 11.7% YoY (Credit Suisse, 5/13/22). While investors are certainly more focused on the prospect for forward earnings given the rising interest rate environment and the slower growth outlook, we have already witnessed a substantial de-rating of stock market valuation multiples, and any confirmation that inflation has peaked could assuage concerns about the pace of Fed rate hikes and quantitative tightening. To be sure, a policy error that pushed the U.S. economy into recession rather than achieved a “soft landing” would in general be very negative for stocks, but many companies and their equity prices could thrive in a slower growth environment characterized by elevated inflation in the 2-4% range, provided that they can avoid margin squeezes. Following the equity valuation multiple compression witnessed in the past few months, stocks are trading around 17 times forward earnings, which is still elevated but closer to the 15 times average of the past five decades. That said, we fully expect the stock market’s trajectory to be driven by macroeconomic data releases in the near-term and, as such, we expect the volatility as of late to continue.

 

Fund Performance

Our equity fund performance during the period under review struggled in light of the sharp downturn in the stock market, with most funds lagging their respective benchmarks. Those funds having substantial technology exposure were the most adversely impacted, as pandemic-driven “stay-at-home” demand dissipated. Our value-oriented equity funds proved more resilient given their exposure to the energy and materials sectors, with the Relative Valued Dividend Appreciation Fund posting a slightly positive return relative to its benchmark. In the midst of the present heightened market volatility, we believe that our emphasis on rigorous bottom-up stock research will serve our fund participants well over the longer term, especially as a higher interest rate environment likely results in greater dispersion among stock returns. At present, a key focus of our research effort has been to identify those companies which possess pricing power and/or some capacity to manage input cost pressures, given our expectation for structurally higher

inflation going forward. We believe that such focus will allow us to position our equity funds to achieve compelling long-term risk-adjusted returns for the benefit of our clients.

We truly value our relationship with you and thank you for making the TCW Funds part of your long-term investment plan. If you have any questions or require further information, I invite you to visit our website at www.tcw.com, or call our shareholder services department at 800-386-3829.

I look forward to further correspondence with you through our annual report later this year.

Sincerely,

 

David Lippman

President, Chief Executive Officer and Director

 

Issues		Shares				Value
COMMON STOCK — 92.5% of Net Assets
Agricultural & Farm Machinery — 3.8%
Deere & Co.			780			$	294,489
Enphase Energy, Inc. (1)			1,107				178,670
							473,159
Apparel, Accessories & Luxury Goods — 2.2%
Lululemon Athletica, Inc. (1)			766				271,647
Application Software — 10.7%
Adobe, Inc. (1)			817				323,491
Autodesk, Inc. (1)			567				107,322
Bill.Com Holdings, Inc. (1)			1,453				248,042
Confluent, Inc. (1)			6,316				197,312
Salesforce.com, Inc. (1)			1,244				218,869
Trade Desk, Inc. (The) (1)			4,210				248,053
							1,343,089
Automobile Manufacturers — 4.3%
Tesla Inc. (1)			627				545,966
Biotechnology — 0.4%
SpringWorks Therapeutics, Inc. (1)			1,168				50,119
Communications Equipment — 12.8%
Arista Networks, Inc. (1)			3,592				415,128
Cisco Systems, Inc.			7,592				371,856
Motorola Solutions, Inc.			1,048				223,947
Palo Alto Networks, Inc. (1)			1,054				591,589
							1,602,520
Data Processing & Outsourced Services — 3.6%
Mastercard, Inc.			881				320,138
Square, Inc. (1)			1,378				137,166
							457,304
Electronic Equipment & Instruments — 1.0%
Trimble, Inc. (1)			1,881				125,463
Internet & Direct Marketing Retail — 2.8%
Amazon.com, Inc. (1)			141				350,474
Internet Services & Infrastructure — 12.3%
Alphabet, Inc. (1)			313				714,326
Meta Platforms, Inc. (1)			1,466				293,889
Okta, Inc. (1)			1,516				180,874
Snowflake, Inc. (1)			1,378				236,244
ZoomInfo Technologies, Inc. (1)			2,341				110,963
							1,536,296
Semiconductor Equipment — 4.6%
ASML Holding NV (Netherlands)			592				333,752
Lam Research Corp.			534				248,716
							582,468

Issues		Shares				Value
Semiconductors — 11.6%
Intel Corp.			3,283			$	143,106
Micron Technology, Inc. (1)			3,390				231,164
NVIDIA Corp.			2,331				432,330
NXP Semiconductors NV (Netherlands)			1,151				196,706
ON Semiconductor Corp. (1)			3,061				159,509
QUALCOMM, Inc.			2,074				289,717
							1,452,532
Specialized REITs — 3.8%
American Tower Corp.			920				221,738
SBA Communications Corp.			719				249,572
							471,310
Systems Software — 15.8%
Crowdstrike Holdings, Inc. (1)			2,243				445,819
Datadog, Inc. (1)			2,876				347,363
Microsoft Corp.			2,011				558,093
ServiceNow, Inc. (1)			801				382,958
Zscaler, Inc. (1)			1,210				245,315
							1,979,548
Technology Hardware, Storage & Peripherals — 2.8%
Apple, Inc.			2,227				351,086
Total Common Stock
(Cost: $9,843,592)							11,592,981
MONEY MARKET INVESTMENTS — 8.8%
State Street Institutional U.S. Government Money Market Fund — Premier Class, 0.29% (2)			1,104,250				1,104,250
Total Money Market Investments
(Cost: $1,104,250)							1,104,250
Total Investments (101.3%)
(Cost: $10,947,842)							12,697,231
Liabilities in Excess of Other Assets (-1.3%)							(161,902	)
Net Assets (100.0%)						$	12,535,329

Notes to the Schedule of Investments:

REIT

Real Estate Investment Trust.

SP ADR

Sponsored American Depositary Receipt. ADRs are receipts, typically issued by a U.S. bank or trust company, evidencing ownership of underlying securities issued by a foreign corporation. Sponsored ADRs are ADRs issued with the cooperation of the foreign corporation.

(1)

Non-income producing security.

(2)

Rate disclosed is the 7-day net yield as of April 30, 2022.

 

Issues		Shares				Value
EXCHANGE-TRADED FUNDS — 3.4% of Net Assets
iShares Gold Trust (1)			9,725			$	350,489
iShares MSCI EAFE Index Fund			10,410				714,542
Total Exchange-traded Funds
(Cost: $1,028,642)							1,065,031
INVESTMENT COMPANIES — 95.8%
Diversified Equity Funds — 34.5%
TCW Artificial Intelligence Equity Fund — I Class (2)			16,847				292,628
TCW Global Real Estate Fund — I Class (2)			125,782				1,582,341
TCW New America Premier Equities Fund — I Class (2)			86,571				2,024,903
TCW Relative Value Large Cap Fund — I Class (2)			264,004				3,474,290
TCW Relative Value Mid Cap Fund — I Class (2)			36,212				878,857
TCW Select Equities Fund — I Class (2)			85,180				2,475,325
							10,728,344
Diversified Fixed Income Funds — 61.3%
Metropolitan West High Yield Bond Fund — I Class (2)			32,899				317,475
Metropolitan West Low Duration Bond Fund — I Class (2)			414,989				3,514,959
Metropolitan West Total Return Bond Fund — I Class (2)			390,277				3,805,197
Metropolitan West Unconstrained Bond Fund — I Class (2)			530,561				5,793,726

Issues		Shares				Value
Diversified Fixed Income Funds (Continued)
TCW Emerging Markets Income Fund — I Class (2)			62,750			$	415,403
TCW Enhanced Commodity Strategy Fund — I Class (2)			118,302				882,536
TCW Global Bond Fund — I Class (2)			72,765				646,154
TCW Total Return Bond Fund — I Class (2)			405,157				3,658,568
							19,034,018
Total Investment Companies
(Cost: $28,507,110)							29,762,362
MONEY MARKET INVESTMENTS — 0.2%
State Street Institutional U.S. Government Money Market Fund — Premier Class, 0.29% (3)			57,441				57,441
Total Money Market Investments
(Cost: $57,441)							57,441
Total Investments (99.4%)
(Cost: $29,593,193)							30,884,834
Excess of Other Assets over Liabilities (0.6%)							178,577
Net Assets (100.0%)						$	31,063,411

Notes to the Schedule of Investments:

(1)	Non-income producing security.

(2)	Affiliated issuer.

(3)	Rate disclosed is the 7-day net yield as of April 30, 2022.

 

Issues		Shares				Value
COMMON STOCK — 93.7% of Net Assets
Australia — 3.6% (Cost: $1,676,693)
Goodman Group			102,298			$	1,712,517
Canada — 7.8%
BSR Real Estate Investment Trust			21,400				416,444
Killam Apartment Real Estate Investment Trust			94,746				1,498,233
Morguard Corp.			8,865				875,367
Morguard North American Residential Real Estate Investment Trust			62,472				901,849
Total Canada
(Cost: $3,799,236)							3,691,893
China — 1.2% (Cost: $612,474)
China Resources Land, Ltd.			130,000				580,671
Japan — 5.6%
Mitsubishi Estate Co., Ltd.			40,100				585,089
Mitsui Fudosan Co., Ltd.			35,200				747,257
Nippon Prologis REIT, Inc.			468				1,297,465
Total Japan
(Cost: $2,817,194)							2,629,811
Singapore — 1.7% (Cost: $762,870)
Capitaland Investment Ltd (1)			257,300				781,343
Spain — 4.9% (Cost: $2,361,080)
Cellnex Telecom SA			49,628				2,313,175
United Kingdom — 9.4%
IHS Holding, Ltd. (1)			178,249				1,871,615
Segro PLC			109,489				1,830,234
Tritax Big Box REIT PLC			235,787				718,663
Total United Kingdom
(Cost: $4,404,045)							4,420,512
United States — 59.5%
Alexandria Real Estate Equities, Inc.			4,443				809,337
American Tower Corp.			11,620				2,800,652
Apartment Investment and Management Co. (1)			425,189				2,678,691
AvalonBay Communities, Inc.			5,556				1,263,879
Boston Properties, Inc.			7,948				934,685
BrightSpire Capital, Inc.			94,970				807,245

Issues		Shares				Value
United States (Continued)
Brixmor Property Group, Inc.			64,568			$	1,638,736
Chatham Lodging Trust (1)			54,811				787,086
Equinix, Inc.			2,616				1,881,113
Gaming and Leisure Properties, Inc.			26,976				1,197,195
Invitation Homes, Inc.			37,270				1,484,091
Kimco Realty Corp.			48,415				1,226,352
Kite Realty Group Trust			43,711				974,755
New Residential Investment Corp.			138,929				1,444,862
Pebblebrook Hotel Trust			39,215				957,630
Prologis, Inc.			9,235				1,480,278
Public Storage			1,803				669,814
Rexford Industrial Realty, Inc.			12,869				1,004,297
Terreno Realty Corp.			11,858				862,669
VICI Properties, Inc.			82,400				2,456,340
Welltower, Inc.			7,765				705,140
Total United States
(Cost: $28,134,547)							28,064,847
Total Common Stock
(Cost: $44,568,139)							44,194,769
CLOSED-END FUND — 3.7%
United States — 3.7%
NexPoint Diversified Real Estate Trust			111,342				1,765,884
Total Closed-end Fund
(Cost: $1,681,656)							1,765,884
MONEY MARKET INVESTMENTS — 5.0%
State Street Institutional U.S. Government Money Market Fund — Premier Class, 0.29% (2)			2,367,942				2,367,942
Total Money Market Investments
(Cost: $2,367,942)							2,367,942
Total Purchased Options (3) (0.4%)
(Cost: $118,132)							202,500
Total Investments (102.8%)
(Cost: $48,735,869)							48,531,095
Liabilities in Excess of Other Assets (-2.8%)							(1,339,075	)
Net Assets (100.0%)						$	47,192,020

 

Issues		Shares				Value
COMMON STOCK — 98.2% of Net Assets
Aerospace & Defense — 5.4%
HEICO Corp.			64,681			$	9,134,898
Application Software — 15.3%
Constellation Software, Inc.			14,551				23,019,624
Trade Desk, Inc. (The) (1)			53,419				3,147,447
							26,167,071
Data Processing & Outsourced Services — 5.5%
Fiserv, Inc. (1)			38,587				3,778,439
Visa, Inc.			26,214				5,586,990
							9,365,429
Electrical Equipment — 3.3%
AMETEK, Inc.			44,002				5,555,693
Electronic Equipment & Instruments — 1.0%
Teledyne Technologies, Inc. (1)			3,954				1,706,349
Environmental & Facilities Services — 6.0%
Waste Connections, Inc. (Canada)			74,704				10,306,911
Financial Exchanges & Data — 18.3%
FactSet Research Systems, Inc.			20,679				8,343,770
Morningstar, Inc.			40,471				10,248,471
MSCI, Inc.			9,097				3,832,111
S&P Global, Inc.			23,392				8,807,088
							31,231,440
Food Retail — 3.3%
Alimentation Couche-Tard, Inc.			124,948				5,591,155
Health Care Equipment — 5.6%
Baxter International, Inc.			51,703				3,674,015
Danaher Corp.			23,239				5,836,010
							9,510,025
Household Products — 2.0%
Church & Dwight Co., Inc.			35,575				3,470,697