TCW Strategic Income Fund has delivered over 20% in total return since our 'Buy' rating last year, driven by lower rates and tighter spreads. The fund remains overweight MBS securities and investment-grade corporates, with no leverage, and has seen its discount to NAV narrow significantly. Given the current valuation and narrow discount to NAV, TSI no longer presents an attractive entry point and is downgraded to 'Hold'.
TCW Strategic Income offers a 5.10% yield, lower than its peers, reducing its appeal to income-seeking investors. The fund has generally underperformed its peers, but it did not decline as severely as most back in 2022. TSI aims to provide total return through current income and capital appreciation, with a focus on mortgage securities and corporate bonds.
LOS ANGELES--(BUSINESS WIRE)--TCW Strategic Income Fund, Inc. (NYSE: TSI) today announced a quarterly distribution of $0.06 per share payable to shareholders of record on June 28, 2024, with the payable date of July 12, 2024. The distribution is based on a policy that was approved by the Board of Directors in December 2013 which was to pay distributions out of the Fund's accumulated net investment income and/or other sources subject to the requirements of the Investment Company Act of 1940, as.
TCW is acquiring Engine No. 1's ETF business, in a deal that is expected to close in the third quarter.
The market is pricing a 90% probability of another rate hike in the upcoming July meeting due to strong economic data. Peak rates are expected in 2023, creating opportunities in Treasuries and MBS, with JP Morgan Research recommending Agency MBS bonds as a top fixed income investment. TCW Strategic Income Fund, a multi-asset class closed-end fund, has non-Agency MBS bonds as its largest holding, with over 29% of the fund's portfolio being MBS bonds.