TCW Funds published its second-quarter 2026 investor letter for the TCW Relative Value Mid Cap Fund, ticker TGVOX, which returned 14.10% versus 13.40% for the Index. Equities recovered from first-quarter lows and the S&P 500 reached record highs despite volatility related to a Federal Reserve leadership transition and Middle East tensions. Artificial intelligence-related data-center spending, strong earnings and a resilient economy supported markets, while S&P 500 earnings-growth estimates rose from 18.8% to 23.1%. Portfolio stock selection added 174 basis points to quarterly performance. Centene Corporation gained 96.1% after better-than-expected earnings, improved medical cost trends, a lower-than-expected medical loss ratio and a higher 2026 profit outlook. Jabil gained 45.2% as demand for AI data-center infrastructure strengthened, with improving automotive and industrial businesses providing additional support. The fund sold Teva Pharmaceutical Industries after appreciation left the stock meeting none of its five valuation characteristics, initiated Venture Global based on valuation, new markets and expanding liquefied natural gas capacity, and added Envista based on dental brands, Japanese clear-aligner expansion and restructuring. TCW favored resilient, cash-generative businesses but said elevated valuations and thin margins for error left markets sensitive to policy and earnings. It viewed AI, digital infrastructure and energy-transition themes as supportive, while labor-market and consumer concerns could be offset by OBBB-related stimulus.