In the second quarter of 2026, the AMG GW&K Small Cap Core Fund (Class N) posted a return of 18.19%. This performance was set against a robust backdrop for U.S. small-cap equities, which saw the Russell 2000® Index, the Fund's benchmark, increase by 21.49% during the same period. This strong quarterly showing further extended the year-to-date outperformance of small caps against their large-cap counterparts by over 1200 basis points.

Despite the overall positive market trend, the Fund’s returns lagged the benchmark. Over the 12 months ending June 30, 2026, the Fund's return was 30.90%, compared to the benchmark's 40.78%. The information technology sector emerged as a significant driver of market gains, achieving an impressive 56.1% return, more than double the index's overall performance. Conversely, some health care stocks within the Fund's portfolio experienced negative returns, which unfavorably impacted its overall performance relative to the strong gains seen in the broader health care sector of the index.

Looking ahead, the investment team anticipates a continued broadening of market participation beyond the current leaders. They believe that improving macroeconomic conditions and subsiding inflationary pressures will support a wider array of companies. This perspective underscores a strategy focused on fundamental strengths and a balanced approach to capture market upside while diligently managing risk exposures.

The current market environment, characterized by strong small-cap growth and evolving economic indicators, suggests a promising outlook for diversified portfolios. Investors should consider the potential for continued expansion in market breadth, driven by robust fundamentals and a supportive macro backdrop, as opportunities emerge across various sectors.