The AMG GW&K Small/Mid Cap Core Fund's second-quarter 2025 results highlight a notable divergence from its benchmark, the Russell 2500® Index. While the fund delivered a positive return of 4.74%, this figure was significantly overshadowed by the Index's robust 8.59% gain. This performance gap was particularly evident after April 8, when the market experienced a strong recovery that the fund struggled to match. Over the past year, the fund's returns further underscore this trend, with a 3.33% gain against the Index's 9.91%. Portfolio adjustments included the addition of six new positions and the sale of five others, reflecting ongoing strategic rebalancing.
AMG GW&K Small/Mid Cap Core Fund Performance Overview
In the second quarter of 2025, the AMG GW&K Small/Mid Cap Core Fund (Class N) posted a return of 4.74%. This performance fell short of its benchmark, the Russell 2500® Index, which saw an 8.59% increase during the same period. Over the full 12 months concluding on June 30, 2025, the Fund yielded 3.33%, whereas the Index climbed by 9.91%. Initially, the fund demonstrated resilience during an early tariff-related market decline. However, it subsequently struggled to keep pace with the broader market rebound that commenced on April 8. Strategically, the fund's management introduced six new positions to the portfolio and exited five existing ones, indicating active management in response to market conditions.
This performance report offers crucial insights for investors. It underscores the challenges faced by actively managed funds in outperforming broad market indices, particularly during periods of strong market rallies. While active adjustments like adding new names and selling others are ongoing, sustained underperformance relative to the benchmark necessitates closer scrutiny of the underlying investment strategy and its alignment with current market dynamics. Investors should consider these factors when evaluating the fund's long-term potential and its role within a diversified portfolio.