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SEC Company Response from METROPOLITAN WEST FUNDS (CIK 0001028621) — Feb 26, 2020

METROPOLITAN WEST FUNDS (CIK 0001028621)
Date: Feb. 26, 2020 · CIK: 0001028621 · Accession: 0001193125-20-050185

AI Filing Summary & Sentiment

File numbers found in text: 333-18737, 811-07989

Date
February 26, 2020
Author
/s/ David A. Hearth
Form
CORRESP
Company
METROPOLITAN WEST FUNDS (CIK 0001028621)

Letter

Paul Hastings LLP

101 California Street, Forty-Eighth Floor

San Francisco, CA 94111

telephone (415) 856-7000

facsimile (415) 856-7100

www.paulhastings.com

February 26, 2020

VIA EDGAR CORRESPONDENCE

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Re: Metropolitan West Funds -- File Nos. 333-18737 and 811-07989

Ladies and Gentlemen:

On behalf of the Metropolitan West Funds (the “Registrant”), we hereby respond to the oral comments provided on February 17, 2020 by Ms. Rebecca Marquigny of the staff (the “Staff”) of the Securities and Exchange Commission with respect to the Registrant’s Post-Effective Amendment No. 65 to its Registration Statement filed on December 30, 2019 (the “Registration Statement”), which contained disclosure with respect to the addition of a new class of shares, named I-2 Class shares, to the Metropolitan West Total Return Bond Fund (the “Total Return Bond Fund”) and the addition of Plan Class shares to the Metropolitan West Unconstrained Bond Fund (the “Unconstrained Bond Fund” and, together with the Total Return Bond Fund, the “Funds”).

The Registrant’s responses to those comments are provided below. We have restated the substance of those comments to the best of our understanding. Capitalized terms have the same respective meanings as in the Registration Statement, unless otherwise indicated. Revised disclosure intended to address these comments will be included in a further post-effective amendment to be filed on or about February 28, 2020. As requested by the Staff, to the extent that a comment about a Fund applies to other sections of the Registration Statement, we have applied that comment to each applicable section. We have consulted with the Registrant in preparing and submitting this response letter.

PROSPECTUS

1. Comment: For each Fund, please provide completed fee and expense table information to the Staff with sufficient time for Staff comments to be resolved prior to the effective date of the revised post-effective amendment.

Response: Comment accepted. The fee and expense tables for each Fund are attached as Exhibit A to this response letter.

Securities and Exchange Commission

February 26, 2020

Page

2. Comment: As Form N-1A does not provide for footnotes to the Total Returns table, please abbreviate the text of Footnote 1 to that table for each Fund and rephrase as a parenthetical where the footnote currently appears.

Response: Comment accepted. The Registrant has revised that disclosure accordingly.

3. Comment: Unless the response letter indicates otherwise, the Staff anticipates that the Registrant will update the chart following the heading “Operating Expenses Agreement” on page 37 of the prospectus.

Response: Comment accepted. The Registrant has revised that table to include the Expense Cap for the Class I-2 shares of the Total Return Bond Fund and the Plan Class shares of the Unconstrained Bond Fund.

STATEMENT OF ADDITIONAL INFORMATION

4. Comment: The “Investment Restrictions” section of the Statement of Additional Information states that “the Floating Rate Income Fund may concentrate in the banking industry to the extent that such concentration results from the Fund’s purchase of loan participations from banks and the banks are considered the issuers of those participations.” To the extent that the Fund lists investments in such loan participations as a principal strategy, please clarify whether the Fund intends to invest at least 25% of its net assets in those participations, and if so, what percentage would be from banks that have sole privity with the underlying lender. Depending on the Registrant’s response, the Staff may have further comments.

Response: Comment acknowledged. As we discussed with Ms. Marquigny on February 25, 2020, we will file a second response letter to address this comment as soon as we can gather the information requested.

* * * * *

Please contact the undersigned at (415) 856-7007 with comments and questions.

Very truly yours,
/s/ David A. Hearth

Show Raw Text
CORRESP
1
filename1.htm

CORRESP

 Paul Hastings LLP

101 California Street, Forty-Eighth Floor

San Francisco, CA 94111

 telephone
(415) 856-7000

 facsimile (415) 856-7100

www.paulhastings.com

February 26, 2020

 VIA
EDGAR CORRESPONDENCE

 Securities and Exchange Commission

100 F Street, NE

 Washington, DC 20549

Re:     Metropolitan West Funds -- File Nos. 333-18737 and 811-07989

 Ladies and Gentlemen:

On behalf of the Metropolitan West Funds (the “Registrant”), we hereby respond to the oral comments provided on February 17, 2020 by
Ms. Rebecca Marquigny of the staff (the “Staff”) of the Securities and Exchange Commission with respect to the Registrant’s Post-Effective Amendment No. 65 to its Registration Statement filed on December 30, 2019 (the
“Registration Statement”), which contained disclosure with respect to the addition of a new class of shares, named I-2 Class shares, to the Metropolitan West Total Return Bond Fund (the
“Total Return Bond Fund”) and the addition of Plan Class shares to the Metropolitan West Unconstrained Bond Fund (the “Unconstrained Bond Fund” and, together with the Total Return Bond Fund, the “Funds”).

The Registrant’s responses to those comments are provided below. We have restated the substance of those comments to the best of our understanding.
Capitalized terms have the same respective meanings as in the Registration Statement, unless otherwise indicated. Revised disclosure intended to address these comments will be included in a further post-effective amendment to be filed on or about
February 28, 2020. As requested by the Staff, to the extent that a comment about a Fund applies to other sections of the Registration Statement, we have applied that comment to each applicable section. We have consulted with the Registrant in
preparing and submitting this response letter.

 PROSPECTUS

1.
 Comment: For each Fund, please provide completed fee and expense table information to the
Staff with sufficient time for Staff comments to be resolved prior to the effective date of the revised post-effective amendment.

Response: Comment accepted. The fee and expense tables for each Fund are attached as Exhibit A to this response letter.

 Securities and Exchange Commission

February 26, 2020

  Page
 2

2.
 Comment: As Form N-1A does not provide for footnotes
to the Total Returns table, please abbreviate the text of Footnote 1 to that table for each Fund and rephrase as a parenthetical where the footnote currently appears.

Response: Comment accepted. The Registrant has revised that disclosure accordingly.

3.
 Comment: Unless the response letter indicates otherwise, the Staff anticipates that the
Registrant will update the chart following the heading “Operating Expenses Agreement” on page 37 of the prospectus.

Response: Comment accepted. The Registrant has revised that table to include the Expense Cap for the
Class I-2 shares of the Total Return Bond Fund and the Plan Class shares of the Unconstrained Bond Fund.

STATEMENT OF ADDITIONAL INFORMATION

4.
 Comment: The “Investment Restrictions” section of the Statement of Additional
Information states that “the Floating Rate Income Fund may concentrate in the banking industry to the extent that such concentration results from the Fund’s purchase of loan participations from banks and the banks are considered the
issuers of those participations.” To the extent that the Fund lists investments in such loan participations as a principal strategy, please clarify whether the Fund intends to invest at least 25% of its net assets in those participations, and
if so, what percentage would be from banks that have sole privity with the underlying lender. Depending on the Registrant’s response, the Staff may have further comments.

Response: Comment acknowledged. As we discussed with Ms. Marquigny on February 25, 2020, we will file a second response letter to address this
comment as soon as we can gather the information requested.

*    *    *    *    *

Please contact the undersigned at (415) 856-7007 with comments and questions.

Very truly yours,

 /s/ David A. Hearth

David A. Hearth

 for PAUL HASTINGS LLP

cc:     Metropolitan West Asset Management, LLC

 EXHIBIT A

FEE AND EXPENSE TABLES

TOTAL RETURN BOND FUND

 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. You may pay additional fees to
broker-dealers or other financial intermediaries for the purchase of Class I, Class I-2 or Plan Class 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)

M Class

I Class

 I-2

Class1

Admini-
strative
Class

Plan
Class

 Management Fees

0.35%

0.35%

0.35%

0.35%

0.35%

 Distribution (12b-1) Fees

0.21%

None

None

0.21%

None

 Other Expenses

0.11%

0.09%

0.14%

0.22%

0.02%

 Shareholder Servicing Expenses2

0.09%

0.07%

0.12%

0.20%

0.00%

 Total Annual Fund Operating Expenses

0.67%

0.44%

0.49%

0.78%

0.37%

1
 The I-2 Class shares are a new class of shares of the Fund with an
inception date of February 28, 2020, and therefore the operating expenses shown for this class are based on anticipated fees and expenses for the current fiscal year.

2
 For the Administrative Class Shares, includes up to 0.20% charged under the Shareholder Servicing Plan. The Fund is
authorized to compensate broker-dealers and other third-party intermediaries up to 0.10% (10 basis points) of the M and I and up to 0.15% (15 basis points) of the I-2 Class assets serviced by those
intermediaries for shareholder services.

 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

5 Years

10 Years

 Class M

$68

$214

$373

$835

 Class I

$45

$141

$246

$555

 Class I-2

$50

$157

$274

$616

 Administrative Class

$80

$249

$433

$966

 Plan Class

$38

$119

$208

$468

 A-1

 EXHIBIT A

FEE AND EXPENSE TABLES

UNCONSTRAINED BOND FUND

 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. You may pay additional fees to
broker-dealers or other financial intermediaries for the purchase of Class I or Plan Class 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)

M Class

I Class

Plan Class
1

 Management Fees

0.65%

0.65%

0.65%

 Distribution (12b-1) Fees

0.25%

None

None

 Other Expenses

0.13%

0.10%

0.04%

 Shareholder Servicing Expenses2

0.05%

0.06%

0.00%

 Total Annual Fund Operating Expenses

1.03%

0.75%

0.69%

1
 The Plan Class shares are a new class of shares of the Fund with an inception date of February 28, 2020, and
therefore the operating expenses shown for this class are based on anticipated fees and expenses for the current fiscal year.

2
 The Fund is authorized to compensate broker-dealers and other third-party intermediaries up to 0.10% (10 basis points)
of the M and I Class assets serviced by those intermediaries for shareholder services.

 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

5 Years

10 Years

 Class M

$105

$328

$569

$1,259

 Class I

$77

$240

$417

$930

 Plan Class

$70

$221

$384

$859

 A-2