TCW Funds has released its first-quarter 2026 investor letter for the TCW Concentrated Large Cap Growth Fund, highlighting power management firm Eaton Corporation plc (NYSE:ETN) as a leading performance contributor.
The letter, cited from Detik Finance, provides insight into the fund's performance during a volatile quarter.
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Equity markets experienced notable volatility in the first quarter of 2026, influenced by geopolitical tensions, private credit sector concerns, a government shutdown, and persisting AI anxieties.
The Fund (I Share) reported a net loss of 11.75% during this period, lagging behind the Russell 1000 Growth Index, which saw a return of -9.78%.
Eaton Corporation's Performance and Outlook
On May 19, 2026, shares of Eaton Corporation closed at $371.88 per share, marking a one-month return of -10.15% but showing a gain of 15.37% over the past 52 weeks.
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The current market capitalization for Eaton stands at $144.40 billion.
In the Q1 2026 investor letter, TCW stated: "Shares of Eaton Corporation moved higher after reporting quarterly results that were largely in-line with consensus estimates.
Management’s sequential guidance of +5% to +7% organic top-line growth missed consensus (+7.6%). Demand remains strong (orders +50% YoY and datacenter orders +200% YoY).
Increased costs are weighing on near-term margins, however, as the company ramps to meet accelerating demand."
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The letter also highlighted the impressive project backlog: $3 trillion of megaprojects announced since 2021, with $937 billion announced in 2025 alone.
Notably, 54% of the new projects are datacenters.
Eaton's Boyd acquisition, expected to close in the second quarter, bolsters the company's datacenter cooling capabilities and expands its accessible market from $2.9 million per megawatt to $3.4 million per megawatt.
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Despite the short-term drop, management views the broadening of the market as a positive development and maintains confidence that the market will ultimately recognize the intrinsic value of the portfolio.
