Double Dip Is Here!

September 1,
1 2010

Presented by:

Komal S. Sri-Kumar, Ph.D.

Group Managing Director
Chief Global Strategist

This presentation is for information purposes only. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate,
and it should not be relied on as such or be the basis for an investment decision. While past performance may be analyzed in this material, past performance should not be considered indicative
of future p
performance. Anyy opinions
p expressed
p are current onlyy as of the time made and are subject
j to change
g without notice. TCW assumes no dutyy to update
p anyy such statements. The views
expressed herein are solely those of the author and do not represent the views of TCW as a firm or of any fund manager or employee of TCW. In addition, TCW manages a number of different
investment funds, and managers of those funds may have differing views or analyses with respect to a particular security or the economy than the views expressed herein. TCW‘s Fund managers
make investment decisions based on various sources of information and analyses and are not necessarily based on the economic information contained herein. This report may include estimates,
projections and other "forward-looking statements." Due to numerous factors, actual events may differ substantially from those presented. This presentation is not to be used or considered as an
offer to sell, or a solicitation to an offer to buy, any security. Nothing contained herein should be considered a recommendation or advice to purchase or sell any security. TCW, its officers,
directors, employees or clients may have positions in securities or investments mentioned in this presentation, which positions may change at any time, without notice.
Global Economy: Debt Reduction Still Dragging Growth Down

• Debt reduction to continue worldwide in 2010

• Dubai, Greece, . . . . . . . . , U.K. and U.S.?

• Europe’s
p travails not over yyet!

• Fiscal stimulus a.k.a. money out of the window?

• U.S. double dip: explaining the risk

• Renminbi move: much ado about nothing

1
United States: Consumer Is Forgotten Man

• Consumer confidence still low

• It is still “The Jobs, Stupid!”

• Housing
g alreadyy in second dip
p

• Bank credit hard to come by

• Lowering unemployment key to economic recovery

2
Source: Bloomberg
600
700
800
900
1000
1100
1200
1300
3/9/09
3/30/09
4/20/09
5/11/09
6/1/09
6/22/09
7/13/09
8/3/09
8/24/09
9/14/09
10/5/09
10/26/09

3
11/16/09
S&P 500 Rally Runs Out of Steam

12/7/09
12/28/09
1/18/10
2/8/10
3/1/10
3/22/10
4/12/10
5/3/10
5/24/10
6/14/10
7/5/10
7/26/10
8/16/10
 Yield (%))

1.5
2.0
2.5
25
3.0
3.5
35
4.0
4.5
5.0

Source: Bloomberg
M
May-08
Jun-08
Jul-08
Aug-08
A
Sep-08
S
Oct-08
O
Nov-08
N
Dec-08
D
Jan-09
Feb-09
Mar-09
M
Apr-09
A
May-09
M

4
Jun-09
Jul-09
Aug-09
A
Sep-09
S
UST 10-Year – Investors Riding a Tiger

Oct-09
O
Nov-09
N
Dec-09
D
Jan-10
Feb-10
Mar-10
M
Apr-10
A
May-10
M
Jun-10
Jul-10
Aug-10
A
U.S. Economic Growth
Gross Domestic Product
Percent Change from Preceding Period - Based on Chained 2000 Dollars
8.0
6.0
4.0
2.0
-
%

(2.0)
(4.0)
(6.0)
(8 0)
(8.0)
1Q05

1Q06

1Q07

1Q08

1Q09
2Q05
3Q05
4Q05

2Q06
3Q06
4Q06

2Q07
3Q07
4Q07

2Q08
3Q08
4Q08

2Q09
3Q09
4Q09

2Q10
3Q10
4Q10
1Q10
Actual through Second Quarter

Source: U.S. Bureau of Economic Analysis and TCW Global Strategy Forecast
5
 12.0
12 0
20.0

10.0
14.0
16.0
18.0

8.0

Source: Bloomberg
A
Aug-08
Sep-08
S
Oct-08
O
Nov-08
Dec-08
D
Jan-09
Feb-09
F
Mar-09
M
Apr-09
A
May-09
M
Jun-09

6
Jul-09
Aug-09
A
U.S. Unemployment (U-6) Rate (%)

Sep-09
S
Oct-09
O

Data through July 2010

Nov-09
Dec-09
D
Jan-10
Feb-10
F
Mar-10
M
Apr-10
A
May-10
M
Jun-10
Jul-10
 U.S. Households Net Worth

90
80 Assets
70
Liabilities
60
USD Trrillions

50 Net Worth
40
30
20
10
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20091Q10
12/31/09 3/31/10 Difference
Assets $67.5T $68.5T +1.0T
Liabilities $14.1T $14.0T -$0.1T
Net Worth $53.5T $54.6T +$1.1T
Data Through First Quarter 2010

Source: U.S. Federal Reserve

7
Europe: Crisis Is Not Over

• Debt reduction, “haircuts” for lenders in prospect

• Greece complies so far but tough road ahead

• Will contagion extend to Portugal and Spain?

• Economic
E i growth
h to slow
l from
f h l h second
healthy d quarter

• Further Euro weakness likely

8
Europe: Members Fighting Different Battles

• Bank stress tests were not very stressful!

• Germany: strong economy despite austerity

• France: emergency meeting considers deficit reduction

• Italy:
I l high
hi h d
debt/GDP
b /GDP limits
li i options
i

• U.K.:
U K : surprising collaboration in coalition government

• Spain:
p persistent high
p g unemployment
p y threatens social fabric

9
Emerging Markets Lead Global Recovery

• Positive growth in BRIC countries

• Strong banking sectors are a factor

• U.S. double dip will still have adverse impact

• Renewed
R d growth,
h privatizations
i i i positive
i i for
f Russia
R i

• Currencies due for long-term appreciation

10
Implications for Investors

• U.S. consumers prime factor in double-dip risk

• Failed auction a risk despite UST rally

• Deflation now, inflation later

• Threats to global stability: Eurozone now, U.S. later

• Emerging markets: haven even though coupled with developed west

11
TCW Conservative Allocation Fund
As of August 26, 2010

It should not be assumed that an investment in the securities listed was or will be profitable.
The investment performance of each Allocation Fund is affected by the investment performance of the underlying funds in which the Fund invests. The ability of the Fund to achieve its investment
objective depends on the ability of the underlying funds to meet their investment objectives and on the Advisor’s decisions regarding the allocation of the Fund’s assets among the underlying
funds. There can be no assurance that the investment objective of the Fund or any underlying fund will be achieved. Through its investments in the underlying funds, the Fund is subject to the
risks of the underlying
y g funds investments. Allocations shown are subject
j to change.
g Due to rounding,g total s might
g not add up p to 100%.
You should consider the investment objectives, risks, charges and expenses of a Fund carefully before investing. The Fund’s Prospectus contains this and
other information about the Fund. To receive a free Prospectus, please call 800 386 3829 or you may download the Prospectus from the Fund’s website at
www.tcw.com. Read it carefully before you invest or send money.
The Funds are distributed by TCW Funds Distributors. The TCW Funds are advised by TCW Investment Management Company.
12 MKTcc522 8/26/10
TCW Moderate Allocation Fund
As of August 26, 2010

It should not be assumed that an investment in the securities listed was or will be profitable.
The investment performance of each Allocation Fund is affected by the investment performance of the underlying funds in which the Fund invests. The ability of the Fund to achieve its investment
objective depends on the ability of the underlying funds to meet their investment objectives and on the Advisor’s decisions regarding the allocation of the Fund’s assets among the underlying
funds. There can be no assurance that the investment objective of the Fund or any underlying fund will be achieved. Through its investments in the underlying funds, the Fund is subject to the
risks of the underlying funds investments. Allocations shown are subject to change. Due to rounding, total s might not add up to 100%.
The Funds are distributed by TCW Funds Distributors. The TCW Funds are advised by TCW Investment Management Company.
13 MKTcc522 8/26/10
TCW Aggressive Allocation Fund
As of August 26, 2010

It should not be assumed that an investment in the securities listed was or will be profitable.
The investment performance of each Allocation Fund is affected by the investment performance of the underlying funds in which the Fund invests. The ability of the Fund to achieve its investment
objective depends on the ability of the underlying funds to meet their investment objectives and on the Advisor’s decisions regarding the allocation of the Fund’s assets among the underlying
funds. There can be no assurance that the investment objective of the Fund or any underlying fund will be achieved. Through its investments in the underlying funds, the Fund is subject to the
risks of the underlying funds investments. Allocations shown are subject to change. Due to rounding, total s might not add up to 100%.
The Funds are distributed by TCW Funds Distributors. The TCW Funds are advised by TCW Investment Management Company.
14 MKTcc522 8/26/10
TCW Asset Allocation Funds
As of August 26, 2010

TCW Conservative Allocation Fund TCW Moderate Allocation Fund TCW Aggressive Allocation Fund

Benchmark

It should not be assumed that an investment in the securities listed was or will be profitable.
The investment performance of each Allocation Fund is affected by the investment performance of the underlying funds in which the Fund invests. The ability of the Fund to achieve its investment
objective depends on the ability of the underlying funds to meet their investment objectives and on the Advisor’s decisions regarding the allocation of the Fund’s assets among the underlying
funds. There can be no assurance that the investment objective of the Fund or any underlying fund will be achieved. Through its investments in the underlying funds, the Fund is subject to the
risks of the underlying funds investments. Allocations shown are subject to change. Due to rounding, total s might not add up to 100%.
The Funds are distributed by TCW Funds Distributors. The TCW Funds are advised by TCW Investment Management Company.
15 MKTcc522 8/26/10
ETF Allocations
As of August 26, 2010

TCW Moderate Allocation Fund TCW Aggressive Allocation Fund

It should not be assumed that an investment in the securities listed was or will be profitable.
The investment performance of each Allocation Fund is affected by the investment performance of the underlying funds in which the Fund invests. The ability of the Fund to achieve its investment
objective depends on the ability of the underlying funds to meet their investment objectives and on the Advisor’s decisions regarding the allocation of the Fund’s assets among the underlying
funds. There can be no assurance that the investment objective of the Fund or any underlying fund will be achieved. Through its investments in the underlying funds, the Fund is subject to the
risks of the underlying funds investments. Allocations shown are subject to change. Due to rounding, total s might not add up to 100%.
The Funds are distributed by TCW Funds Distributors. The TCW Funds are advised by TCW Investment Management Company.
16 MKTcc522 8/26/10
Biography

Komal S. Sri-Kumar, Ph.D.

Group Managing Director
Chief Global Strategist
Chairman – Comprehensive Asset Allocation Committee

Dr. Sri-Kumar is Chairman of the Comprehensive Asset Allocation Portfolio and Chief Global Strategist of Trust Company
of the West (TCW). He has been associated with the allocation strategy since its inception in 1991 and has been
Chairman since 1997. This strategy allocates assets across a broad array of global asset classes including U.S. and
foreign
g equities
q and fixed income,, p
private equity,
q y, energy
gy and real estate.

As Chief Global Strategist, Dr. Sri-Kumar has the responsibility for advising portfolio managers and has been key to
raising assets for a number of TCW strategies from Sovereign Wealth Funds, international agencies, corporate and public
pension funds and retail investors. Among other strategies, he was instrumental in raising funds for, and helping guide
investments in, two Emerging
g g Market Real Estate funds managedg byy Hines.
Dr. Sri-Kumar has addressed CEOs, pension fund managers and retail fund managers in conferences in the United
States, Europe and Asia. His articles and interviews have been published in the Wall Street Journal, the New York Times
and the Financial Times. He frequently explains his views on the global outlook and their investment implications on
CNBC, Bloomberg TV and the Fox Business Network.
Prior to joining TCW in 1990, Dr. Sri-Kumar was Senior Vice President at Drexel Burnham Lambert and Executive Vice
President of DBL Americas, responsible for country risk analysis. He holds an M.A. degree from the Delhi School of
Economics, and M.Phil and Ph.D. degrees from Columbia University. His doctoral dissertation at Columbia was
supervised by Professor Robert Mundell, Nobel Laureate in Economics (1999).

17