6
Morningstar Analyst Rating
05-12-14
Œ
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
Positive
Positive
Positive
Neutral
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
10.85
10.55
10.90
10.37
10.38
9.90
9.01
9.84
9.73
9.57
9.82
9.92
Total Return %
3.81
0.20
11.39
5.19
11.53
17.08
-1.47
6.25
6.99
3.10
5.15
13.88
+/-BC Agg Bnd
-0.06
2.22
7.18
-2.65
4.99
11.15
-6.71
-0.72
2.66
0.67
0.81
9.78
+/-BC Agg Bnd
-0.06
2.22
7.18
-2.65
4.99
11.15
-6.71
-0.72
2.66
0.67
0.81
9.78
Income Return %
0.96
2.86
4.04
4.49
4.92
6.80
5.35
5.07
5.21
5.73
6.15
6.96
Capital Return %
2.85
-2.66
7.35
0.70
6.61
10.28
-6.82
1.18
1.78
-2.63
-1.00
6.92
Total Rtn % Rank Cat
59
11
7
75
4
27
41
23
3
4
12
1
Income $
0.10
0.31
0.41
0.46
0.48
0.59
0.51
0.48
0.49
0.55
0.59
0.63
Capital Gains $
0.00
0.06
0.22
0.08
0.17
0.00
0.17
0.00
0.00
0.00
0.00
0.00
Expense Ratio %
.
0.61
0.63
0.63
0.65
0.65
0.65
0.65
0.65
0.65
0.65
0.65
Income Ratio %
.
3.30
4.33
4.47
5.88
5.74
4.89
5.01
5.49
6.02
5.62
7.40
Turnover Rate %
.
160
156
228
141
220
124
101
174
180
165
90
Net Assets $mil
10,963
10,074
10,124
8,354
6,250
4,232
3,369
2,708
882
503
453
499
Performance
05-31-14
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2010
2011
2012
2013
2014
3.88 3.51
3.81 -0.08 11.53
1.39 1.36
1.44 0.92
5.19
2.69 2.26
4.53 1.47 11.39
0.89 -2.34
1.17 0.52
0.20
1.77
. . . .
Trailing
Total
+/- BC
+/- BC %Rank Growth of
Return% Agg Bnd Agg Bnd
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
1.92 0.10
0.10
39 10,192
3.31 0.03
0.03
58 10,331
3.16 0.45
0.45
35 10,316
5.57 2.02
2.02
7 11,766
8.95 3.99
3.99
7 15,351
6.83 1.84
1.84
3 19,361
6.74 1.16
1.16
4 26,602
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
3.90
6
1.58
84
7.07
6
1.72
89
4.83
3
1.87
93
Potential Capital Gain Exposure: 5% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
3.16
3 Yr
5.57
High
Avg
5 Yr
8.95
High
+Avg
10 Yr
6.83
High
Avg
Incept
7.17
Other Measures
Standard Index
Best Fit Index
BC Agg Bnd
BC US Credit
Alpha
2.4
2.1
Beta
0.86
0.61
R-Squared
66
80
Standard Deviation
2.95
Mean
5.57
Sharpe Ratio
1.84
Morningstar’s Take
by Michelle Canavan Ward, CFA 05-12-14
Metropolitan West Total Return Bond ranks among the
category’s best.
After taking full advantage of a rebound among
credit-sensitive bonds in 2012, this fund’s veteran team
focused on risk reduction in 2013 and the first part of
2014. Its managers’ value-discipline means they look to
sell into strength and, as a result, they’ve continued to
reduce the fund’s exposure to corporate credit. As of
April 30, the fund’s corporate stake stood at 16%, an
underweighting to both the Barclays U.S. Aggregate
Index’s 23% stake and the 26% in the average
intermediate-term bond fund. In turn, this one’s U.S.
government allocation soaked up one fourth of
portfolio assets, as high as it’s been since 2010.
This shift is illustrative of the team’s value
discipline, but it’s also reflective of the team’s belief
that the economy is in the mid-to-late stage of the
credit cycle and that there’s heightened downside risk
for the majority of fixed-income sectors. One exception
is the fund’s signature nonagency mortgage exposure,
notorious for meaningful liquidity and credit risk, which
remained elevated at 14% at the end of April. Upon
closer examination, though, the managers have made
some significant changes to that stake’s composition
over the past 18 months: They’ve swapped out of
low-dollar-priced bonds that have rallied the most,
into marginally better-quality bonds with less
downside risk. Indeed, the firm noted that pricing in
the fund’s nonagency RMBS stake had risen to more
than 80 cents on the dollar from 50 cents as a result,
with some help from price appreciation.
The team has also maintained a defensive stance
toward interest-rate risk, a bet that has been evident
in the portfolio for more than three years: The fund’s
4.7 year duration as of March 31 was roughly a year
shorter than its index’s 5.7 years, a positioning that
helped protect the portfolio when rates spiked in 2013.
Indeed, the fund squeaked out a 0.2% gain that year,
better than 90% of its intermediate-term bond peers.
Over time, the team’s methodical approach and
thoughtful research has boosted the fund to a stellar
long-term record. Expect that to continue.
Address:
865 South Figueroa Street
Los Angeles, CA 90017
800-241-4671
Web Address:
Inception:
03-31-97
Advisor:
Metropolitan West Asset Management, LLC.
Subadvisor:
None
NTF Plans:
Fidelity Retail-NTF, CommonWealth NTF
Minimum Purchase:
$5000
Add: $0 IRA: $1000
Min Auto Inv Plan:
$5000
Add: $100
Sales Fees:
No-load,
Management Fee:
0.35%
Actual Fees:
Mgt:0.35% Dist:0.21%
Expense Projections:
3Yr:$195
5Yr:$340 10Yr:$762
Income Distribution:
Monthly
Data through May 31, 2014
Metropolitan West Total Return Bond M
Ticker Status Yield SEC Yield Total Assets Mstar Category
MWTRX Open 2.5% 2.24% $29,262 mil
Intermediate-Term Bond
7
27
21
8
13
13
12
30
59
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 05-14
Historical Profile
Return
Risk
Rating
High
Average
Highest
Investment Style
Fixed Income
Income Rtn %Rank Cat
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
BC Agg Bnd
Performance Quartile
(within Category)
History
10.0
12.0
14.0
16.4
18.8
20.8
Portfolio Analysis
03-31-14
Date of
Amount
Value % Net
Total Fixed-Income:1132
Maturity
$000
$000 Assets
US Treasury Note 2.75%
02-15-24 1,757,475 1,761,457 5.77
US Treasury Bond 3.75%
11-15-43 897,150 928,971 3.04
US Treasury Note 1.5%
01-31-19 471,370 467,264 1.53
US Treasury Note 1.625%
03-31-19 446,535 444,286 1.46
US Treasury Note 2.75%
11-15-23 429,887 431,869 1.42
US Treasury TIP
04-15-16 386,040 420,381 1.38
US Treasury Note 2.125%
01-31-21 419,265 415,203 1.36
US Treasury TIP
04-15-17 360,170 381,577 1.25
Fannie Mae
357,485 359,719 1.18
US Treasury Note 0.75%
06-30-17 331,010 327,958 1.07
Fnma Tba
03-25-26 287,405 301,416 0.99
Dreyfus Instl Cash Advan
01-01-50 275,715 275,715 0.90
US Treasury Note 1.375%
07-31-18 263,000 261,466 0.86
DWS Money Market Series
01-01-50 260,264 260,264 0.85
Fannie Mae
250,655 242,000 0.79
Gnma Tba
188,735 203,509 0.67
Fannie Mae
188,105 189,281 0.62
US TREASURY TIP
02-15-44 177,185 181,910 0.60
Fannie Mae
181,875 181,790 0.60
US Treasury Note 0.75%
01-15-17 167,080 166,845 0.55
Current Investment Style
1
1
Avg Eff Duration
4.7 Yrs
Avg Eff Maturity
8.3 Yrs
Avg Credit Quality
BB
Avg Wtd Coupon
3.68%
Avg Wtd Price
99.39% of par
figure provided
by fund
Duration
Ltd Mod Ext
Quality
High
Med Low
Special Securities
Restricted/Illiquid Secs
10
Exotic Mortgage-Backed
0
Emerging-Markets Secs
0
Options/Futures/Warrants
No
Credit Analysis
% bonds 03-31-14
AAA
62
AA
7
A
11
BBB
8
BB
3
B
1
Below B 8
NR/NA 0
Sector Breakdown
% of assets
US Treasury
20
Non US Government
0
Government Related
2
Corporate
13
Agency MBS Pass-Through 16
Agency MBS ARM
0
Agency MBS CMO
3
Non-Agency Residential MBS 9
Commercial MBS
2
Asset-Backed
13
Municipal
2
Cash & Equivalents
16
Other
0
Composition - Net
Cash 14.4
Bonds 77.2
Stocks 0.1
Other
8.3
Coupon Range
% of Bonds Rel Cat
1.00=Category Average
0% PIK
0.8 0.3
0% to 6%
89.1 1.1
6% to 8%
8.4 0.7
8% to 10%
1.6 0.5
More than 10%
0.1 0.2
©
2014Morningstar, Inc.All rights reserved.The informationherein is not represented orwarranted tobeaccurate, correct, completeor
timely. Pastperformance is no guarantee of future results.Access updated reportsat
Toorder reprints, call312-696-6100.
mfb.morningstar.com.
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