Fund name: TCW Focused Equities (TGFVX)

Objective: The Fund seeks long-term capital appreciation. It invests primarily in large cap stocks (common and preferred stock, rights or warrants to purchase common or preferred stock and securities convertible into common or preferred stock such as convertible bonds). It targets companies with capitalizations over $3 billion, invests almost exclusively in the U.S., and typically holds 25-40 stocks. The managers agree that the market is efficient in the long-run but tends to generate substantial inefficiencies (overly negative reactions to short-term events, for example) in the short run. They judge a company’s long-term value based on its return on invested capital (ROIC). ROIC looks at a pretty fundamental question: "if I give $1 to management, will they turn that into more than $1 of cash flow?" Understandably, they like firms with rising ROIC numbers and look for short-term overreactions to their prospects. If ROIC is falling or there’s a short-term overreaction on the upside (that is, substantially overvalued), the stock becomes a candidate for sale. While they describe themselves as value investors, their focus on ROIC can lead them to buy stereotypically growth companies.

Adviser: TCW Asset Management is a 30-year-old asset manager that offers services to retail, high net worth and institutional investors. The firm has about $130 billion under management, of which only 12% is retail investors. They manage 22 funds in their own name and sub-advise a number of others. TCW has a partnership with Société Générale (SoGen) which allows them to provide services globally and share their expertise.

Managers: Thomas McKissick and John Snider. Both guys are Managing Directors of TCW, both have been with the fund since inception and both co-manage a bunch of separate accounts.

Management’s Stake in the Fund: McKissick has no investment in Focused Equities, but does have between $500,000 and a million in the "unfocused" version of this fund which he and Snider also manage. Mr. Snider has between $100,000 and $500,000 here and a similar amount in the unfocused fund.

Opening date: March 1, 2001, though the managers had run separately managed accounts in the same style for several years before that.

Minimum investment: $2000 for regular accounts, $500 for IRAs and $100 for accounts with an automatic investing plan.

Expense ratio: 1.27% on assets of $41 million. About which Morningstar gripes: "Our only gripe with TCW Focused Equities is its expense ratio." Gosh, guys, get a life – the fund is tiny and the expenses are reasonable for an actively-managed domestic stock fund. Morningstar’s own database shows 11,000 funds with higher expenses.

Comments: As with Manning and Napier, TCW’s mutual funds seem more like a service to the investment community rather than a core concern. TCW’s fund assets are dwarfed by its other distribution channels aimed at institutional and high net worth investors.