INVESTMENT OBJECTIVE
The Unconstrained Bond Fund (the “Fund”)
seeks to provide investors with positive long-term returns
irrespective of general securities market conditions.
FEES AND EXPENSES OF THE FUND
The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees (Fees paid directly from your investment):
None
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
| Management Fees | 0.65% |
| Distribution (12b-1) Fees | None |
| Other Expenses (1) | 1.59% |
| Total Annual Fund Operating Expenses | 2.24% |
| Fee Waiver and/or Expense Reimbursement (2) | 1.49% |
| Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursement | 0.75% |
(1) Based on estimated amounts for the current fiscal year.
(2) Metropolitan West Asset Management, LLC (the “Adviser”) has contractually agreed to waive advisory fees and/or reimburse expenses, including distribution expenses, to limit the Fund’s total annual operating expense to 0.75%. For purposes of the expense limitation, operating expenses do not include interest, taxes, brokerage commissions, short sale dividend expenses, swap interest expenses, and any expenses incurred in connection with any merger or reorganization or extraordinary expenses such as litigation. This contract will remain in place until July 31, 2012. Although it does not expect to do so, the Board of Trustees is permitted to terminate that contract sooner in its discretion with written notice to the Adviser.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| 1 Year | 3 Years | |
 | ||
| $77 | $557 | |
PORTFOLIO TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and
sells securities (or “turns over” its
portfolio). A higher portfolio turnover may indicate
higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable
account. These costs, which are not reflected
in annual fund operating expenses or in the example,
affect the Fund’s performance.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its objective by utilizing a flexible
investment approach that allocates investments across a
range of global investment opportunities related to credit,
currencies and interest rates. Satisfying the Fund’s
objective would require to achieve positive total returns
over a full market cycle. Total return includes income
and capital gains.
The use of the term “unconstrained” in the Fund’s name means that it is not limited by the types of investments in a particular securities index. The Fund is not managed to be compared to such an index. The Fund also is unconstrained in the sense that it is not limited to any single type of investment strategy.
The portfolio management team expects to actively evaluate each investment idea based on its potential return, its risk level and how it fits within the Fund’s overall portfolio in determining whether to buy or sell investments. The Adviser will also actively manage the Fund’s risks on an on-going basis to mitigate the risks of excessive losses by the portfolio overall.
The Fund will invest at least 80% of its net assets, which includes borrowings for investment purposes, in securities and instruments it regards as bonds in the U.S. and abroad, including emerging markets, and may purchase securities of varying maturities issued by domestic and foreign corporations and governments. The Fund may invest in both investment grade and high yield fixed income securities (“junk bonds”), subject to investing no more than 50% of its total assets (measured at the time of investment) in securities rated below investment grade by Moody’s, S&P or Fitch, or, if unrated, determined by the Adviser to be of comparable quality. Under normal conditions, the average portfolio duration of this Fund will vary from negative three (-3) years to positive eight (8) years. Duration is a measure of the expected life of a fixed income security that is used to determine the sensitivity of a security to changes in interest rates. As a separate measurer, there is no limit on the weighted average maturity of the Fund’s portfolio.
The Fund may invest, without limitation, in foreign securities, and up to 50% of the Fund’s total assets may be invested in emerging markets and instruments that are economically tied to emerging market countries. The Fund will normally limit its foreign currency exposure (from non-U.S. dollar-denominated securities or currencies) to 40% of its total assets. The Fund reserves the right to hedge its exposure to foreign currencies to reduce the risk of loss from fluctuations in currency exchange rates, but will be under no obligation to do so under any circumstances.
The Fund may invest, without limitation, in derivative instruments, primarily futures and forward contracts, options, currency futures, and swap agreements (typically interest- and index-linked swaps, total return swaps and credit default swaps). Derivatives will be used in an effort to hedge investments, for risk management or to increase income or gain for the Fund. The Fund may invest up to 10% of its total assets in preferred stock and up to 5% in common stock of domestic and foreign companies.
PRINCIPAL RISKS
Because the Fund holds securities with fluctuating
market prices, the value of the Fund's shares
will vary as its portfolio securities increase
or decrease in value. Therefore, the value of
your investment in the Fund could go down as well
as up. You can lose money by investing in the
Fund.
The principal risks affecting the Fund that can cause a decline in value are:
Market Risk
The risk that returns from the securities in which the Fund invests will underperform returns from the general securities markets or other types of securities.
Interest Rate Risk
The risk that debt securities will decline in value because of changes in interest rates.
Issuer/Credit Risk
The Adviser expects to invest in high yield securities, which are considered speculative and are subject to greater volatility and risk of loss than investment grade securities, particularly in deteriorating economic conditions.
Derivatives and
Swaps Risks
The risk that changes in the value of a derivative may not correlate perfectly
with the underlying asset, reference rate or index and the Fund could lose more
than the principal amount invested. Swaps also involve the risks that the counterparty
may default and the potential lack of liquidity.
Leverage Risk
The risk that leverage may result from certain transactions, including the use of derivatives, borrowing and reverse repurchase agreements. Leverage may exaggerate the effect of a change in the value of the Fund’s portfolio securities, causing the Fund to be more volatile than if leverage was not used. The Fund will reduce leverage risk by either segregating an equal amount of liquid assets or “covering” the transactions that introduce such risk.
Liquidity Risk
The risk that there may be no willing buyer of the Fund's portfolio securities and the Fund may have to sell those securities at a lower price or may not be able to sell the securities at all each of which would have a negative effect on performance.
Foreign Securities Risk
The value of the Fund's investments in foreign securities also depends on changing currency values, different political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging market debt securities tend to be of lower credit quality and subject to greater risk of default than higher rated securities from more developed markets.
Investments by the Fund in currencies other than U.S. dollars may decline in value against the U.S. dollar if not properly hedged.
Currency Risk
The risk that foreign currencies will decline
in value relative to the U.S. dollar and
affect the Fund’s investments in
foreign (non-U.S.) currencies or in securities
that trade in, and receive revenues in,
or in derivatives that provide exposure
to, foreign (non- U.S.) currencies.
Portfolio Management
Risk
The risk that an investment strategy may fail to produce
the intended results. Also, because the Fund may use
multiple investment strategies, it may use a strategy
that produces a less favorable result than would have
been produced by another strategy.
Liquidity Risk
The risk that there may be no willing buyer of the Fund’s portfolio securities
and the Fund may have to sell those securities at a lower price or may not be
able to sell the securities at all each of which would have a negative effect
on performance.
Prepayment Risk of Asset-Backed and Mortgage-Backed Securities
The risk that in times of declining interest rates, the Fund's higher yielding securities will be prepaid and the Fund will have to replace them with securities having a lower yield.
Extension Risk of Asset-Backed and Mortgage-Backed Securities
The risk that in times of rising interest rates prepayments will slow causing securities considered short or intermediate term to be long-term securities which fluctuate more widely in response to changes in interest rates than shorter term securities.
Asset-Backed Securities Investment Risk
The risk that the impairment of the value of the collateral underlying the security such as non-payment of loans, will result in a reduction in the value of the security.
Counterparty Risk
The risk that a derivative transaction depends
on the creditworthiness of the counterparty
and the counterparty’s ability to fulfill
its contractual obligations.
Please see "Additional Fund Information - Principal Risks" for a more detailed description of the risks of investing in the Fund.
Your investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency entity or person.
PERFORMANCE INFORMATION
The Fund is new and does not have a full calendar
year of performance or financial information
to present. Once it has been in operation a
full calendar year, performance (including
total return) and financial information will
be presented. Updated performance information
for the Fund is available on our website at
www.mwamllc.com or by calling (800) 241-4671.
INVESTMENT ADVISER
Metropolitan West Asset Management, LLC.
PORTFOLIO MANAGERS
Tad Rivelle, Founding Partner, Chief Investment
Officer and Generalist Portfolio Manager of the
Adviser, has been a member of the team managing
the Fund since its inception.
Steve Kane, CFA, Founding Partner and Generalist Portfolio Manager of the Adviser, has been a member of the team managing the Fund since its inception.
Laird Landmann, Founding Partner and Generalist Portfolio Manager of the Adviser, has been a member of the team managing the Fund since its inception.
PURCHASE AND SALE OF FUND SHARES
You may purchase or redeem shares of the Funds on any business day (normally any day that the New York Stock Exchange is open). Generally, purchase and redemption orders for the Fund shares are processed at the net asset value next calculated after an order is received by the Fund. You may conduct transactions by mail (Metropolitan West Funds c/o
BNY Mellon Investment Servicing, P.O. Box 9793, Providence, RI 02940), or telephone (800) 241-4671. You may also purchase or redeem Fund shares through your dealer or financial advisor.
The following table provides the Fund's minimum initial and subsequent investment requirements. The minimums may be reduced or waived in some cases.
| Type of Account | Minimum Initial Investment |
Subsequent Investments |
| ||
| Regular Accounts | $ 3,000,000 |
$ 50,000 |
TAX INFORMATION
Dividends and capital gains distributions you
receive from the Fund are subject to federal income
taxes and may also be subject to state and local
taxes, unless you are investing through a tax-deferred
arrangement, such as a 401(k) plan or an individual
retirement account. Such tax-deferred arrangements
may be taxed later upon withdrawal from those
arrangements.
PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase shares of the Fund through a
broker-dealer or other financial intermediary
(such as a bank), the Fund and/or the Adviser
may pay the intermediary for the sale of Fund
shares and related services. Shareholders who
purchase or hold shares through an intermediary
may inquire about such payments from that intermediary.
These payments may create a conflict of interest
by influencing the broker-dealer or other intermediary
and your salesperson to recommend the Fund over
another investment. Ask your salesperson or visit
your financial intermediary’s website for
more information.
LEGAL DISCLOSURES
Before you invest, you may want to review the Fund's Prospectus, which contains more information about the Fund and its risks. You can find the Fund's Prospectus, Statement of Additional Information and other information about the Fund online at www.mwamllc.com/literature.php. You can also get this information at no cost by calling (800) 241-4671 or by sending an email request to metwestclientservices@tcw.com.
The Fund’s current Prospectus and Statement of Additional Information, both dated September 28, 2011, are incorporated by reference into this Summary Prospectus.
The Securities and Exchange Commission has not approved or disapproved these securities or passed the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
