Company: TSI
Filing Date: 2025-03-05
Form Type: N-CSR
Source: 0001193125-25-046168
Chunk: 26

Company: TCW STRATEGIC INCOME FUND INC
Filing Date: 2025-03-05
Form: N-CSR
Chunk 26
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 market for them, so they may be considered illiquid. It may not be possible to enter into closing transactions with respect to OTC options or otherwise to terminate such options, and as a result a Fund may be required to remain obligated on an unfavorable OTC option until its expiration. During the year ended December 31, 2024, the Fund entered into written option contracts to gain exposure to the equity market. Swap Agreements:The Fund may enter into swap agreements. Swap agreements are typically two-partycontracts entered into primarily by institutional investors. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or “swapped” between the parties are generally calculated with respect to a “notional amount” (i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or in a “basket” of securities representing a particular index). In a total return swap, one party typically agrees to pay to the other a short-term interest rate in return for a payment at one or more times in the future based on the increase in the value of an underlying security or other asset, or index of securities or assets; if the underlying security, asset, or index declines in value, the party that pays the short-term interest rate must also pay to its counterparty a payment based on the amount of the decline. The Fund may take either side of such a swap, and so may take a long or short position in the underlying security, asset, or index. The Fund may enter into a total return swap to hedge against an exposure in its portfolio — such as interest rate risk (including to adjust the duration or credit quality of the Fund’s bond portfolio), equity risk, or credit risk — or generally to put cash to work efficiently in the markets in anticipation of, or as a replacement for, cash investments. The Fund may also enter into a 43 TCW Strategic Income Fund, Inc. Notes to Financial Statements (Continued) Note 3 — Portfolio Investments (Continued) total return swap to gain exposure to securities or markets in which it might not be able to invest directly (in so-calledmarket access transactions). Interest rate swaps are agreements in which one party pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time.