Fixed Income as a Stabilizer
Historically, fixed income and equity performance moved in different directions, with bonds tending to do well as equities declined, while bonds tended to lag as equity performance improved. That relationship broke down in 2022 as the Fed hiked rates quickly and both equities and fixed income markets posted dismal returns.
More recently, however, markets have normalized, and the correlation between bond and equity markets has returned to more typical negative territory, indicating fixed income markets have regained their traditional role as an offset to equity volatility in a diversified portfolio.
As Figure 1 shows, the rolling 52-week correlation between intermediate Treasuries (IEF) and equities (SPY), which spiked and remained elevated during 2022 and into 2023, has moved back toward its typically negative range, reinforcing fixed income’s ability to once again act as a stabilizing force during periods of equity market stress.
[Figure 1: Rolling 52-Week Correlation — IEF vs. SPY. Correlations spiked/remained elevated for the 2022–2023 period but have slowly regained their traditional low/negative relationship.]
Fixed Income as a Source of Return
Over much of the last decade and a half, investors got used to zero interest rates and very low yields across every fixed income sector. With rates at more normal levels — and the chance of a return to a zero interest rate policy seemingly remote — fixed income once again offers an attractive level of income for investors, with the prospect for that income to be durable over time.
Additionally, even though inflation is above the Fed’s 2% target, we believe it will continue to trend lower. Rates across the curve remain well above the level of inflation, allowing investors to generate a potential reasonable real return over and above the rate of inflation — with the potential for that return to rise further should inflation continue to moderate.
As illustrated in Figure 2, 10-year real yields remain meaningfully positive — a notable departure from much of the post-financial-crisis period when real yields were often negative or negligible — underscoring fixed income’s renewed potential to generate durable income while helping preserve purchasing power.
[Figure 2: 10-Year Real Yields. Real yields are meaningfully positive (highest since pre-Global Financial Crisis) and providing a meaningful source of return in a portfolio.]
Opportunity Set is Key
Traditional fixed income benchmarks only include a portion of the investable universe, with much of that concentrated in high-quality (and hence lower-yielding) government-guaranteed issues. Passive strategies using those traditional benchmarks therefore miss many higher-yielding opportunities that exist outside of those benchmark sectors.
TCW’s fixed income strategies capitalize on our expertise across the fixed income markets to identify and exploit inefficiencies and opportunities in sectors not included in traditional benchmarks — including high yield bonds, bank loans, inflation-protected securities, floating-rate instruments, asset-backed securities, commercial and residential mortgage-backed securities, and non-USD denominated issues — all of which can provide higher yields and differentiated return patterns versus more traditional exposures.
Ability to Capitalize on Volatility
With markets increasingly uncertain, the risk of volatility rises and as that unfolds, portfolios will need to adapt to take advantage of new opportunities and optimize risk exposures. At the same time, with credit spreads historically narrow, rigorous fundamental research and disciplined security selection are necessary to identify issuers who are likely to be more resilient through volatility and provide greater downside protection.
The flexibility to move into undervalued sectors, adjust a portfolio’s risk profile and interest rate exposure, and find issues where yield spreads provide better compensation for risk are likely to be critical factors in investors’ success through 2026.
TCW offers a suite of fixed income ETFs designed to serve as flexible building blocks for advisors seeking to navigate these evolving market dynamics. Our strategies enable advisors to express targeted views on income and sectors, while taking advantage of differentiated opportunities via sector rotation and duration management, without concentrating risk in a single segment of the market. Advisors increasingly need solutions that can be deployed tactically or serve as strategic anchors, depending on portfolio objectives. TCW’s ETFs provide the precision and liquidity advisors need to dynamically position portfolios to generate real income, manage volatility, and respond opportunistically as markets fluctuate.
Flexible Income ETF (FLXR)
An actively managed, multi-sector fixed income ETF focused on generating high current income with a secondary objective of capital appreciation. Invests across investment-grade and high-yield corporates, securitized products, government bonds, and global debt with flexibility to adjust duration and credit exposure as market conditions change. This flexible mandate supports a multi-dimensional positioning approach, allowing advisors to actively balance duration, credit, and global exposure within a single vehicle as market dynamics evolve.
Core Fixed Income ETF (FIXT)
A modern core plus bond ETF designed for advisors seeking portfolio stability, diversification, and active risk management at the center of their fixed income allocation. Emphasizes high-quality core bonds with disciplined risk controls and broad sector exposure to help manage interest rate and credit risk while delivering dependable income. Offers a stable foundation around which advisors can blend complementary strategies — such as dynamic or multi-sector exposures — to navigate evolving market conditions.
AAA CLO ETF (ACLO)
Provides a liquid, transparent way for advisors to access collateralized loan obligations (CLOs) — a structurally protected source of floating-rate income with built-in credit enhancement. ACLO seeks to deliver attractive, rate-responsive income while complementing traditional fixed income allocations through enhanced carry and diversification, particularly in environments where floating-rate exposure is valuable.
Senior Loan ETF (SLNZ)
Designed to provide short-duration, floating-rate income for advisors who want to stay invested while reducing late-cycle interest rate risk. By investing primarily in senior secured loans, SLNZ seeks to offer attractive yield with structural protections relative to traditional unsecured high yield bonds. Its senior positioning and shorter duration profile make it a more defensive way to access credit-related income within a diversified portfolio.
Important Disclosure: Before investing, you should carefully consider the fund’s investment objectives, risks, charges, and expenses. This and other information is in the prospectus, a copy of which may be obtained from etf.tcw.com. Please read the prospectus carefully before you invest. All investing involves risk including the potential loss of principal. The Fund is advised by TCW Investment Management Company LLC. Distributed by Foreside Financial Services, LLC. NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE. © 2026 TCW Group. All rights reserved.
INVESTMENT RISKS
As with any investment, you could lose all or part of your investment in the Fund, and the Fund’s performance could trail that of other investments. The Fund is subject to certain risks, including the principal risks noted below, any of which may adversely affect the Fund’s net asset value (“NAV”) per share, trading price, yield, total return and ability to meet its investment objective.
TCW Flexible Income ETF (FLXR) seeks to invest in the companies that the Adviser believes will benefit from transformation as a result of technological innovations, market dynamics, and/or changes in client preferences. The Fund’s investment objective seeks a high level of current income with a secondary objective of long-term capital appreciation. The Fund is actively managed and may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Funds’ investments more than the market as a whole, to the extent that the Funds’ investments are concentrated in the securities of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector or asset class. The Funds may purchase and write put and call options on futures contracts that are traded on an exchange as a hedge against changes in value of its portfolio securities, or in anticipation of the purchase of securities, and may enter into closing transactions with respect to such options to terminate existing positions. There is no guarantee that such closing transactions can be effected. TCW Flexible Income ETF (FLXR) is subject to the following risks: High yield securities may be subject to greater fluctuations in value and risk of loss of income and principal than higher-rated securities. It is important to note that the Fund is not guaranteed by the U.S. Government. Fixed income investments entail interest rate risk, the risk of issuer default, issuer credit risk, and price volatility risk. Funds investing in bonds can lose their value as interest rates rise and an investor can lose principal. The Fund’s investments denominated in foreign currencies will decline in value if the foreign currency declines in value relative to the U.S. dollar. Fund share prices and returns will fluctuate with market conditions, currencies, and the economic and political climates where the investments are made. The securities markets of emerging market countries can be extremely volatile. Mortgage-backed and other asset-backed securities often involve risks that are different from or more acute than risks associated with other types of debt instruments. MBS related to floating rate loans may exhibit greater price volatility than a fixed rate obligation of similar credit quality. With respect to non-agency MBS, there are no direct or indirect government or agency guarantees of payments in pools created by non-governmental issuers. Non-agency MBS are also not subject to the same underwriting requirements for the underlying mortgages that are applicable to those mortgage-related securities that have a government or government-sponsored entity guarantee. Liquidity Risk. Lack of a ready market or restrictions on resale may limit the ability of the Fund to sell a security at an advantageous time or price. The liquidity of the Fund’s assets may change over time. Derivatives Risk. A derivative is a financial contract, the value of which depends on or is derived from, the value of an underlying asset such as a security or an index.
TCW Core Plus Bond Fund ETF (FIXT) is subject to the following risks: High yield securities may be subject to greater fluctuations in value and risk of loss of income and principal than higher-rated securities. It is important to note that the Fund is not guaranteed by the U.S. Government. Fixed income investments entail interest rate risk, the risk of issuer default, issuer credit risk, and price volatility risk. Funds investing in bonds can lose their value as interest rates rise and an investor can lose principal. Mortgage-backed and other asset-backed securities often involve risks that are different from or more acute than risks associated with other types of debt instruments. MBS related to floating rate loans may exhibit greater price volatility than a fixed rate obligation of similar credit quality. With respect to non-agency MBS, there are no direct or indirect government or agency guarantees of payments in pools created by non-governmental issuers. Non-agency MBS are also not subject to the same underwriting requirements for the underlying mortgages that are applicable to those mortgage-related securities that have a government or government-sponsored entity guarantee. The Fund’s investments denominated in foreign currencies will decline in value if the foreign currency declines in value relative to the U.S. dollar. Fund share prices and returns will fluctuate with market conditions, currencies, and the economic and political climates where the investments are made. The securities markets of emerging market countries can be extremely volatile. Mortgage-backed and other asset-backed securities often involve risks that are different from or more acute than risks associated with other types of debt instruments.
TCW AAA CLO ETF (ACLO) is an actively managed exchange-traded fund which seeks to provide capital preservation and current income by investing principally in U.S. dollar-denominated AAA-rated collateralized loan obligations. TCW AAA CLO ETF (ACLO) is subject to the following risks: This fund will commence operations on its listing date; there is no prior performance history for this fund . A new fund’s performance may not represent how the fund is expected to or may perform in the long term. In addition, new funds have limited operating histories for investors to evaluate and new funds may not attract sufficient assets to achieve investment and trading efficiencies. CLOs are securities backed by an underlying portfolio of loan obligations. CLOs issue classes or “tranches” of debt that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and exhaustion of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying loans in the tranche of the CLO in which the Fund invests. Subordinate tranche investments involve greater risk of loss than more senior tranches. CLOs also carry risks including, but not limited to, interest rate risk and credit risk. To the extent that the Fund invests in unrated CLO tranches, the Fund’s ability to achieve its investment objective will be more dependent on the Adviser’s credit analysis than would be the case when the Fund invests in rated CLO tranches. The CLOs in which the Fund invests are managed by investment advisers independent of the Adviser. CLO managers are responsible for selecting, managing and replacing the underlying bank loans or bonds within a CLO. CLO managers may have limited operating histories and may be subject to conflicts of interest, including managing the assets of other clients or other investment vehicles, or receiving fees that incentivize maximizing the yield, and indirectly the risk, of a CLO. Adverse developments with respect to a CLO manager, such as personnel and resource constraints, regulatory issues or other developments that may impact the ability and/or performance of the CLO manager, may adversely impact the performance of the CLOs in which the Fund invests . The risk of investing in senior loans may be greater than the risk of investing in other types of securities, as a result of, among other factors, less readily available, reliable information about most senior loans than is the case for many other types of securities; possible loss of significant value before a default occurs; possible decline in value or illiquidity of collateral; and lack of an active trading market for certain senior loans. During periods of falling interest rates, an issuer of a callable security held by the Fund may “call” or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds in securities with lower yields, which would result in a decline in the Fund’s income, or in securities with greater risks or with other less favorable features. CLOs are typically structured such that, after a specified period of time, the majority investor in the equity tranche can call (i.e., redeem) the securities issued by the CLO in full. The Fund may not be able to accurately predict when or which of its CLO investments may be called, resulting in the Fund having to reinvest the proceeds in unfavorable circumstances, which in turn could cause in a decline in the Fund’s income. Fixed income investments entail interest rate risk, the risk of issuer default, issuer credit risk, and price volatility risk. Funds investing in bonds can lose their value as interest rates rise and an investor can lose principal. ETF risk: the risk that the value of the Fund’s investments will fluctuate in response to the performance of the ETFs owned by the Fund. The lack of liquidity in an ETF could result in its value being more volatile than its portfolio securities, and an ETF’s performance may not match the performance of a particular market segment or index it seeks to track. In addition, the Fund’s shareholders wil indirectly bear a proportionate share of an ETF’s expenses, in addition to paying the Fund’s expenses.
TCW Senior Loan ETF (SLNZ) is an actively managed exchange-traded fund which primarily seeks current income, and secondarily seeks long-term capital appreciation. TCW Senior Loan ETF (SLNZ) is subject to the following risks: A new fund’s performance may not represent how the fund is expected to or may perform in the long term. In addition, new funds have limited operating histories for investors to evaluate and new funds may not attract sufficient assets to achieve investment and trading efficiencies. It is important to note that the Fund is not guaranteed by the U.S. Government. Fixed income investments entail interest rate risk, the risk of issuer default, issuer credit risk, and price volatility risk. Funds investing in bonds can lose their value as interest rates rise and an investor can lose principal. Floating rate loans entail special risks. The market for floating rate loans may be illiquid, making it difficult for the Fund to determine the true value of a loan, or to sell its interest in a failing loan promptly or at a profitable price. The collateral for secured loans may be insufficient to cover a default, and the Fund may have limited remedies when a borrower defaults. High-yield (unrated or rated below-investment grade) loans and bonds have greater credit risk and more volatility than debt instruments rated investment grade. Loans made to distressed borrowers or to finance leveraged corporate acquisitions may be especially vulnerable to adverse changes in economic and market conditions. The risk of loss is even greater for unsecured loans. The Fund’s use of leverage (borrowing) and derivatives may increase the volatility of the Fund’s returns. Although the floating rate loans are intended to provide creditors with protection against rising interest rates, some of the debt securities in which the Fund invests will be subject to interest rate risk and may decline in value when interest rates rise. Foreign securities are subject to special additional risks, such as changing currency values, lack of regulation, and political and economic environments in the countries where the Fund invests. Equity investments entail equity risk and price volatility risk. The value of stocks and other equity securities will change based on changes in a company’s financial condition and in overall market and economic conditions. The value of the Fund’s share price will fluctuate up or down based on the value of the portfolio holdings, which can be affected by these risks. ETF risk: the risk that the value of the Fund’s investments will fluctuate in response to the performance of the ETFs owned by the Fund. The lack of liquidity in an ETF could result in its value being more volatile than its portfolio securities, and an ETF’s performance may not match the performance of a particular market segment or index it seeks to track. In addition, the Fund’s shareholders will indirectly bear a proportionate share of an ETF’s expenses, in addition to paying the Fund’s expenses.
All investing involves risk including the potential loss of principal. Market volatility may significantly impact the value of your investments. Recent tariff announcements may add to this volatility, creating additional economic uncertainty and potentially affecting the value of certain investments. Tariffs can impact various sectors differently, leading to changes in market dynamics and investment performance.
Please see the Fund’s Prospectus for more information on these and other risks.
The Fund is advised by TCW Investment Management Company LLC. Distributed by Foreside Financial Services, LLC.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
© 2026 TCW Group. All rights reserved.
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