SEC Company Response from AMG Funds I (CIK 0000882443) — May 19, 2021
AMG Funds I (CIK 0000882443)
Date: May 19, 2021 · CIK: 0000882443 · Accession: 0001193125-21-166457
AI Filing Summary & Sentiment
File numbers found in text: 811-03752, 811-06520, 811-08004
Letter
VIA EDGAR Securities and Exchange Commission Division of Investment Management Washington, D.C. 20549 Re: AMG Funds I (Registration Nos. 033-44909 and 811-06520) AMG Funds III (Registration Nos. 002-84012 and 811-03752) AMG Funds IV (Registration Nos. 033-68666 and 811-08004)
Dear Ms. Vroman-Lee:
I am writing on behalf of AMG Funds I, AMG Funds III and AMG Funds IV (each a “Trust” and collectively the “Trusts”) to respond to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (“SEC”) to:
(i) Post-Effective Amendment No. 113 under the Securities Act of 1933, as amended (the “1933 Act”), to AMG Funds I’s Registration Statement on Form N-1A filed on March 22, 2021, relating to AMG Boston Common Global Impact Fund (formerly AMG Managers Brandywine Fund), AMG River Road Large Cap Value Select Fund (formerly AMG FQ Long-Short Equity Fund), AMG Veritas China Fund (formerly AMG Managers Emerging Opportunities Fund), AMG Veritas Global Focus Fund (formerly AMG FQ Tax-Managed U.S. Equity Fund), and AMG Veritas Global Real Return Fund (formerly AMG Managers Brandywine Blue Fund);
(ii) Post-Effective Amendment No. 135 under the 1933 Act to AMG Funds III’s Registration Statement on Form N-1A filed on March 22, 2021, relating to AMG Veritas Asia Pacific Fund (formerly AMG Managers Special Equity Fund) and AMG GW&K ESG Bond Fund (formerly AMG Managers Loomis Sayles Bond Fund); and
(iii) Post-Effective Amendment No. 193 under the 1933 Act to AMG Funds IV’s Registration Statement on Form N-1A filed on March 22, 2021, relating to AMG Beutel Goodman Core Plus Bond Fund (formerly AMG Managers DoubleLine Core Plus Bond Fund), AMG Beutel Goodman International Equity Fund (formerly AMG
Managers Pictet International Fund), AMG GW&K Small/Mid Cap Growth Fund (formerly AMG GW&K Small Cap Fund II, which was formerly AMG Managers LMCG Small Cap Growth Fund), AMG Montrusco Bolton Large Cap Growth Fund (formerly AMG Managers Montag & Caldwell Growth Fund), and AMG River Road Mid Cap Value Fund (formerly AMG Managers Fairpointe Mid Cap Fund).
Each fund noted above is referred to herein as a “Fund” and collectively, the “Funds.” The Trusts appreciate this opportunity to respond to the Staff’s comments. The Staff’s comments and the Trusts’ responses are set forth below. Certain defined terms used herein have the meaning set forth in each Fund’s prospectus (the “Prospectus”).
AMG Funds IV Comments
1. Comment: Please apply any applicable comments provided for AMG Funds IV to AMG Funds I and AMG Funds III.
Response: The Trusts acknowledge the comment.
AMG Beutel Goodman Core Plus Bond Fund Prospectus Comments
2. Comment: The Staff notes that disclosure in the section of the Prospectus titled “Summary of the Funds – AMG Beutel Goodman Core Plus Bond Fund – Expense Example” provides that “[t]he Example includes the Fund’s contractual expense limitation through March 1, 2023.” Please clarify that the expense limitation would only impact first year numbers.
Response: The Trust respectfully submits that its existing disclosure accurately reflects the impact of the Fund’s contractual expense limitation on the Expense Example and is consistent with the requirements of Form N-1A. The Trust notes that Instruction 4 to Item 3 of Form N-1A provides that an adjustment to the Example to reflect an expense reimbursement or fee waiver arrangement may be reflected “only in the period(s) for which the expense reimbursement or fee waiver arrangement is expected to continue.” Because the Fund’s contractual expense limitation will continue through at least March 1, 2023 (as disclosed in the Prospectus), the Example reflects the impact of the Fund’s contractual expense limitation through that date, as permitted by the Form.
3. Comment: The Staff notes the Fund is a fixed income fund. Will the Fund be investing in collateralized debt obligations, collateralized loan obligations or collateralized mortgage obligations? If so, please add principal investment strategies disclosure and add appropriate risk disclosure.
Response: The Trust confirms that, although the Fund may invest in collateralized debt obligations, collateralized loan obligations or collateralized mortgage obligations, it does not currently intend to do so as a principal investment strategy. The Trust notes that it has enhanced its disclosure regarding these instruments in the Statement of Additional Information (the “SAI”).
4. Comment: Will the Fund invest greater than 15% in junk, non-agency mortgage-backed securities, asset-backed securities, collateralized debt obligations, collateralized loan obligations,
collateralized mortgage obligations or bank loans? If so, the Staff notes that it may have additional comments.
Response: The Fund does not currently intend to invest greater than 15% in junk, non-agency mortgage-backed securities, asset-backed securities, collateralized debt obligations, collateralized loan obligations, collateralized mortgage obligations or bank loans.
5. Comment: The Staff notes that the Fund is an ESG integration fund. The Fund should clearly explain its definition of ESG and specific ESG areas of focus. The Fund should also make clear (i) whether its ESG criteria are applied to every investment it makes or only some of its investments, and (ii) whether ESG is the exclusive factor considered or one of several factors. If ESG is one of several factors, the disclosure should state, if accurate, that an investment could be made in a company that scores poorly on ESG if it scores strongly on other non-ESG factors.
Response: The Trust notes that the Fund’s principal investment strategies disclosure indicates that the Subadviser’s ESG analysis applies to corporate bond positions and is one element of its investment process. In addition, in response to the Staff’s comment, the Trust confirms that it will revise the Fund’s principal investment strategies disclosure as follows:
The Subadviser integrates the analysis of ESG factors as part of the fundamental credit research process used to identify potential corporate bond positions for the Fund. Environmental factors include, but are not limited to, greenhouse gas intensity, reclamation, power generation, carbon offsets and land usage. Governance factors include, but are not limited to, executive compensation, structural complexity, board independence, board compensation and bondholder rights. Social factors include, but are not limited to, diversity, health and safety, human rights, indigenous nations, engagement and community outreach. Consideration of ESG factors is one element of the Subadviser’s investment process. The Subadviser views ESG issues not only as potential sources of risk, but also as opportunities for improvement. ESG-related risk exposure will not therefore preclude an investment, although the Subadviser does not generally expect to make investments where ESG factors make it difficult to accurately assess the value of a business. Beutel Goodman prepares and maintains credit reports for the Fund’s investments and the ESG analysis included in each corporate credit report includes: an overall ESG risk assessment; granular ESG metrics; ESG score peer group benchmarking (using third party data providers such as Sustainalytics and MSCI); listing of ESG strengths and weakness; ESG-related engagement themes; and an ESG scorecard by individual topic. In performing ESG analysis, the Subadviser obtains information from company financial statements and other reports, interviews with company management, investment dealer reports, and data from other third parties. From time to time, the Subadviser may also engage with management regarding ESG matters relevant to the company.
6. Comment: The Staff notes that the Fund states that it will invest in bank loans. Please disclose in the Prospectus that it may take longer than seven days for transactions in leveraged loans to settle, which means it could take the Fund significant time to get its money after selling its investments. Please also address how the Fund intends to meet short-term liquidity needs given the length of time that may arise for this settlement period.
Response: The Trust confirms that, while the Fund may invest in bank loans, it does not currently intend to do so as a principal investment strategy. The Trust further confirms that it will remove the reference to bank loans from the Fund’s principal investment strategies disclosure. Therefore, the Trust does not believe that adding principal investment disclosure regarding leveraged loans is necessary or appropriate.
7. Comment: The Staff notes that the Fund discloses twenty-six principal risks. Please limit the disclosure to principal risks. The Staff acknowledges that the risks currently disclosed may all be principal.
Response: The Trust confirms that it believes all the risks disclosed in the section of the Prospectus titled “Summary of the Funds – AMG Beutel Goodman Core Plus Bond Fund – Principal Risks” are principal risks of the Fund.
8. Comment: The Staff notes that the first sentence of the third paragraph in the section of the Prospectus titled “Summary of the Funds – AMG Beutel Goodman Core Plus Bond Fund – Principal Investment Strategies” states that “[t]he Fund intends to investment primarily in bonds with a rating of B or higher by any NRSRO at the time of purchase.” The Staff notes that the word “investment” should be “invest.”
Response: The Trust confirms that it will make the noted change.
9. Comment: The Staff notes that the Fund’s principal investment strategies disclosure states that “[w]hile the Fund may purchase fixed income securities of any duration, the Fund currently intends to primarily invest in fixed income securities so that the overall duration of the Fund’s portfolio will remain +/- 2 years of the duration of the Fund’s benchmark (the Bloomberg Barclays U.S. Aggregate Bond Index), which was 6.09 years as of January 31, 2021.” Please provide an example in the Fund’s Interest Rate Risk disclosure based on a duration of eight years.
Response: The Trust confirms that it will revise the Fund’s Interest Rate Risk disclosure as follows:
For example, if interest rates rise by one percentage point, the share price of a fund with an average duration of one year would be expected to fall approximately 1% and a fund with an average duration of five eight years would be expected to decline by about 5% 8%. If rates decrease by one percentage point, the share price of a fund with an average duration of one year would be expected to rise approximately 1% and the share price of a fund with an average duration of five eight years would be expected to rise by about 5% 8%.
10. Comment: The Staff notes that the Fund’s principal investment strategies disclosure references fixed income securities while the Fund’s principal risk disclosure references debt securities. Please consider reconciling so that an investor is on notice as to whether the terms are used interchangeably or mean different things.
Response: The Trust confirms that it will revise the Fund’s principal investment strategies disclosure as follows in order to clarify that the terms are used interchangeably:
Under normal circumstances, the Fund invests at least 80% of its assets in fixed income securities. Fixed income securities (also referred to as debt securities) include, but are not limited to, securities issued or guaranteed by the U.S. government or its agencies….
11. Comment: The Staff notes that Emerging Markets Risk is included as a principal risk of the Fund. Please include in the Fund’s principal investment strategies disclosure that the Fund will invest in emerging markets.
Response: The Trust respectfully submits that the Fund’s principal investment strategies disclosure provides that the fixed income securities in which the Fund may invest include, among other things, “foreign and domestic corporate bonds; fixed income securities issued by corporations, governments, government agencies, authorities or instrumentalities and supra-national organizations in foreign countries including emerging markets” (emphasis added).
12. Comment: Please comply with Items 5 and 10 of Form N-1A to disclose which portfolio managers are jointly and primarily responsible for the day-to-day management of the Fund.
Response: The Trust respectfully submits that the section titled “Additional Information About the Funds – Fund Management – Portfolio Management” discloses that the portfolio managers identified therein are jointly and primarily responsible for the day-to-day management of the Fund.
AMG Beutel Goodman International Equity Fund Prospectus Comments
13. Comment: Please apply any applicable comments provided for AMG Beutel Goodman Core Plus Bond Fund to AMG Beutel Goodman International Equity Fund.
Response: The Trust confirms that it has applied any applicable comments.
14. Comment: The Staff notes the Fund’s principal investment strategies disclosure provides that “Beutel Goodman performs an in-depth research process to identify what it believes are high quality companies that generate sustainable free cash flow and earn in excess of their cost of capital over an economic cycle.” Please elaborate on what Beutel Goodman means by “high quality companies” and revise the sentence in accordance with plain English principles.
Response: The Trust confirms that it will revise the Fund’s principal investment strategies disclosure as follows:
Beutel, Goodman & Company Ltd., the subadviser to the Fund (“Beutel Goodman” or the “Subadviser”), uses a value-based investment process and fundamental, bottom-up research in selecting investments for the Fund. The Fund seeks to invest in companies at discounts to their intrinsic value, which is defined as the present value of sustainable free cash flow (cash that is available to a company after paying out the money needed to
maintain or expand its operations). Beutel Goodman seeks companies whose management, in Beutel Goodman’s view, has consistently demonstrated a commitment to create shareholder value through the sustainable generation of free cash flow without undue financial leverage. Beutel Goodman performs an in-depth research process to identify what it believes are high quality companies that generate sustainable free cash flow and earn in excess of their cost of capital over an economic cycle. Beutel Goodman also analyzes company management’s track record of capital investments and track record of returning cash to shareholders. The Subadviser leverages deep investment experience to identify companies that exhibit strong free cash flow, a competitive industry position, and a healthy balance sheet. In selecting investments for the Fund, the Subadviser performs valuation analysis, and seeks to purchase companies at a significant discount to their intrinsic value.
15. Comment: The Staff notes that Value Stock Risk is included as a principal risk of the Fund. If not already included, please include in the Fund’s principal investment strategies disclosure that the Fund will invest in value stocks.
Response: The Trust notes that it will revise the Fund’s principal investment strategies disclosure to include reference to value investing, as shown in the response to Comment 14 above.
AMG GW&K Small/Mid Cap Growth Fund Prospectus Comments
16. Comment: The Staff notes that the Fund’s portfolio turnover rate during the most recently completed fiscal year exceeded 100%. Does the Fund plan to actively turn over its portfolio? If yes, please include that in the Fund’s principal investment strategies disclosure.
Response: Th
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CORRESP 1 filename1.htm SEC Response Letter ROPES & GRAY LLP PRUDENTIAL TOWER 800 BOYLSTON STREET BOSTON, MA 02199-3600 WWW.ROPESGRAY.COM Renee Laws T +1 617 235 4975 renee.laws@ropesgray.com May 19, 2021 VIA EDGAR Ms. Ashley Vroman-Lee, Esq. Securities and Exchange Commission Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549 Re: AMG Funds I (Registration Nos. 033-44909 and 811-06520) AMG Funds III (Registration Nos. 002-84012 and 811-03752) AMG Funds IV (Registration Nos. 033-68666 and 811-08004) Dear Ms. Vroman-Lee: I am writing on behalf of AMG Funds I, AMG Funds III and AMG Funds IV (each a “Trust” and collectively the “Trusts”) to respond to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (“SEC”) to: (i) Post-Effective Amendment No. 113 under the Securities Act of 1933, as amended (the “1933 Act”), to AMG Funds I’s Registration Statement on Form N-1A filed on March 22, 2021, relating to AMG Boston Common Global Impact Fund (formerly AMG Managers Brandywine Fund), AMG River Road Large Cap Value Select Fund (formerly AMG FQ Long-Short Equity Fund), AMG Veritas China Fund (formerly AMG Managers Emerging Opportunities Fund), AMG Veritas Global Focus Fund (formerly AMG FQ Tax-Managed U.S. Equity Fund), and AMG Veritas Global Real Return Fund (formerly AMG Managers Brandywine Blue Fund); (ii) Post-Effective Amendment No. 135 under the 1933 Act to AMG Funds III’s Registration Statement on Form N-1A filed on March 22, 2021, relating to AMG Veritas Asia Pacific Fund (formerly AMG Managers Special Equity Fund) and AMG GW&K ESG Bond Fund (formerly AMG Managers Loomis Sayles Bond Fund); and (iii) Post-Effective Amendment No. 193 under the 1933 Act to AMG Funds IV’s Registration Statement on Form N-1A filed on March 22, 2021, relating to AMG Beutel Goodman Core Plus Bond Fund (formerly AMG Managers DoubleLine Core Plus Bond Fund), AMG Beutel Goodman International Equity Fund (formerly AMG Managers Pictet International Fund), AMG GW&K Small/Mid Cap Growth Fund (formerly AMG GW&K Small Cap Fund II, which was formerly AMG Managers LMCG Small Cap Growth Fund), AMG Montrusco Bolton Large Cap Growth Fund (formerly AMG Managers Montag & Caldwell Growth Fund), and AMG River Road Mid Cap Value Fund (formerly AMG Managers Fairpointe Mid Cap Fund). Each fund noted above is referred to herein as a “Fund” and collectively, the “Funds.” The Trusts appreciate this opportunity to respond to the Staff’s comments. The Staff’s comments and the Trusts’ responses are set forth below. Certain defined terms used herein have the meaning set forth in each Fund’s prospectus (the “Prospectus”). AMG Funds IV Comments 1. Comment: Please apply any applicable comments provided for AMG Funds IV to AMG Funds I and AMG Funds III. Response: The Trusts acknowledge the comment. AMG Beutel Goodman Core Plus Bond Fund Prospectus Comments 2. Comment: The Staff notes that disclosure in the section of the Prospectus titled “Summary of the Funds – AMG Beutel Goodman Core Plus Bond Fund – Expense Example” provides that “[t]he Example includes the Fund’s contractual expense limitation through March 1, 2023.” Please clarify that the expense limitation would only impact first year numbers. Response: The Trust respectfully submits that its existing disclosure accurately reflects the impact of the Fund’s contractual expense limitation on the Expense Example and is consistent with the requirements of Form N-1A. The Trust notes that Instruction 4 to Item 3 of Form N-1A provides that an adjustment to the Example to reflect an expense reimbursement or fee waiver arrangement may be reflected “only in the period(s) for which the expense reimbursement or fee waiver arrangement is expected to continue.” Because the Fund’s contractual expense limitation will continue through at least March 1, 2023 (as disclosed in the Prospectus), the Example reflects the impact of the Fund’s contractual expense limitation through that date, as permitted by the Form. 3. Comment: The Staff notes the Fund is a fixed income fund. Will the Fund be investing in collateralized debt obligations, collateralized loan obligations or collateralized mortgage obligations? If so, please add principal investment strategies disclosure and add appropriate risk disclosure. Response: The Trust confirms that, although the Fund may invest in collateralized debt obligations, collateralized loan obligations or collateralized mortgage obligations, it does not currently intend to do so as a principal investment strategy. The Trust notes that it has enhanced its disclosure regarding these instruments in the Statement of Additional Information (the “SAI”). 4. Comment: Will the Fund invest greater than 15% in junk, non-agency mortgage-backed securities, asset-backed securities, collateralized debt obligations, collateralized loan obligations, collateralized mortgage obligations or bank loans? If so, the Staff notes that it may have additional comments. Response: The Fund does not currently intend to invest greater than 15% in junk, non-agency mortgage-backed securities, asset-backed securities, collateralized debt obligations, collateralized loan obligations, collateralized mortgage obligations or bank loans. 5. Comment: The Staff notes that the Fund is an ESG integration fund. The Fund should clearly explain its definition of ESG and specific ESG areas of focus. The Fund should also make clear (i) whether its ESG criteria are applied to every investment it makes or only some of its investments, and (ii) whether ESG is the exclusive factor considered or one of several factors. If ESG is one of several factors, the disclosure should state, if accurate, that an investment could be made in a company that scores poorly on ESG if it scores strongly on other non-ESG factors. Response: The Trust notes that the Fund’s principal investment strategies disclosure indicates that the Subadviser’s ESG analysis applies to corporate bond positions and is one element of its investment process. In addition, in response to the Staff’s comment, the Trust confirms that it will revise the Fund’s principal investment strategies disclosure as follows: The Subadviser integrates the analysis of ESG factors as part of the fundamental credit research process used to identify potential corporate bond positions for the Fund. Environmental factors include, but are not limited to, greenhouse gas intensity, reclamation, power generation, carbon offsets and land usage. Governance factors include, but are not limited to, executive compensation, structural complexity, board independence, board compensation and bondholder rights. Social factors include, but are not limited to, diversity, health and safety, human rights, indigenous nations, engagement and community outreach. Consideration of ESG factors is one element of the Subadviser’s investment process. The Subadviser views ESG issues not only as potential sources of risk, but also as opportunities for improvement. ESG-related risk exposure will not therefore preclude an investment, although the Subadviser does not generally expect to make investments where ESG factors make it difficult to accurately assess the value of a business. Beutel Goodman prepares and maintains credit reports for the Fund’s investments and the ESG analysis included in each corporate credit report includes: an overall ESG risk assessment; granular ESG metrics; ESG score peer group benchmarking (using third party data providers such as Sustainalytics and MSCI); listing of ESG strengths and weakness; ESG-related engagement themes; and an ESG scorecard by individual topic. In performing ESG analysis, the Subadviser obtains information from company financial statements and other reports, interviews with company management, investment dealer reports, and data from other third parties. From time to time, the Subadviser may also engage with management regarding ESG matters relevant to the company. 6. Comment: The Staff notes that the Fund states that it will invest in bank loans. Please disclose in the Prospectus that it may take longer than seven days for transactions in leveraged loans to settle, which means it could take the Fund significant time to get its money after selling its investments. Please also address how the Fund intends to meet short-term liquidity needs given the length of time that may arise for this settlement period. Response: The Trust confirms that, while the Fund may invest in bank loans, it does not currently intend to do so as a principal investment strategy. The Trust further confirms that it will remove the reference to bank loans from the Fund’s principal investment strategies disclosure. Therefore, the Trust does not believe that adding principal investment disclosure regarding leveraged loans is necessary or appropriate. 7. Comment: The Staff notes that the Fund discloses twenty-six principal risks. Please limit the disclosure to principal risks. The Staff acknowledges that the risks currently disclosed may all be principal. Response: The Trust confirms that it believes all the risks disclosed in the section of the Prospectus titled “Summary of the Funds – AMG Beutel Goodman Core Plus Bond Fund – Principal Risks” are principal risks of the Fund. 8. Comment: The Staff notes that the first sentence of the third paragraph in the section of the Prospectus titled “Summary of the Funds – AMG Beutel Goodman Core Plus Bond Fund – Principal Investment Strategies” states that “[t]he Fund intends to investment primarily in bonds with a rating of B or higher by any NRSRO at the time of purchase.” The Staff notes that the word “investment” should be “invest.” Response: The Trust confirms that it will make the noted change. 9. Comment: The Staff notes that the Fund’s principal investment strategies disclosure states that “[w]hile the Fund may purchase fixed income securities of any duration, the Fund currently intends to primarily invest in fixed income securities so that the overall duration of the Fund’s portfolio will remain +/- 2 years of the duration of the Fund’s benchmark (the Bloomberg Barclays U.S. Aggregate Bond Index), which was 6.09 years as of January 31, 2021.” Please provide an example in the Fund’s Interest Rate Risk disclosure based on a duration of eight years. Response: The Trust confirms that it will revise the Fund’s Interest Rate Risk disclosure as follows: For example, if interest rates rise by one percentage point, the share price of a fund with an average duration of one year would be expected to fall approximately 1% and a fund with an average duration of five eight years would be expected to decline by about 5% 8%. If rates decrease by one percentage point, the share price of a fund with an average duration of one year would be expected to rise approximately 1% and the share price of a fund with an average duration of five eight years would be expected to rise by about 5% 8%. 10. Comment: The Staff notes that the Fund’s principal investment strategies disclosure references fixed income securities while the Fund’s principal risk disclosure references debt securities. Please consider reconciling so that an investor is on notice as to whether the terms are used interchangeably or mean different things. Response: The Trust confirms that it will revise the Fund’s principal investment strategies disclosure as follows in order to clarify that the terms are used interchangeably: Under normal circumstances, the Fund invests at least 80% of its assets in fixed income securities. Fixed income securities (also referred to as debt securities) include, but are not limited to, securities issued or guaranteed by the U.S. government or its agencies…. 11. Comment: The Staff notes that Emerging Markets Risk is included as a principal risk of the Fund. Please include in the Fund’s principal investment strategies disclosure that the Fund will invest in emerging markets. Response: The Trust respectfully submits that the Fund’s principal investment strategies disclosure provides that the fixed income securities in which the Fund may invest include, among other things, “foreign and domestic corporate bonds; fixed income securities issued by corporations, governments, government agencies, authorities or instrumentalities and supra-national organizations in foreign countries including emerging markets” (emphasis added). 12. Comment: Please comply with Items 5 and 10 of Form N-1A to disclose which portfolio managers are jointly and primarily responsible for the day-to-day management of the Fund. Response: The Trust respectfully submits that the section titled “Additional Information About the Funds – Fund Management – Portfolio Management” discloses that the portfolio managers identified therein are jointly and primarily responsible for the day-to-day management of the Fund. AMG Beutel Goodman International Equity Fund Prospectus Comments 13. Comment: Please apply any applicable comments provided for AMG Beutel Goodman Core Plus Bond Fund to AMG Beutel Goodman International Equity Fund. Response: The Trust confirms that it has applied any applicable comments. 14. Comment: The Staff notes the Fund’s principal investment strategies disclosure provides that “Beutel Goodman performs an in-depth research process to identify what it believes are high quality companies that generate sustainable free cash flow and earn in excess of their cost of capital over an economic cycle.” Please elaborate on what Beutel Goodman means by “high quality companies” and revise the sentence in accordance with plain English principles. Response: The Trust confirms that it will revise the Fund’s principal investment strategies disclosure as follows: Beutel, Goodman & Company Ltd., the subadviser to the Fund (“Beutel Goodman” or the “Subadviser”), uses a value-based investment process and fundamental, bottom-up research in selecting investments for the Fund. The Fund seeks to invest in companies at discounts to their intrinsic value, which is defined as the present value of sustainable free cash flow (cash that is available to a company after paying out the money needed to maintain or expand its operations). Beutel Goodman seeks companies whose management, in Beutel Goodman’s view, has consistently demonstrated a commitment to create shareholder value through the sustainable generation of free cash flow without undue financial leverage. Beutel Goodman performs an in-depth research process to identify what it believes are high quality companies that generate sustainable free cash flow and earn in excess of their cost of capital over an economic cycle. Beutel Goodman also analyzes company management’s track record of capital investments and track record of returning cash to shareholders. The Subadviser leverages deep investment experience to identify companies that exhibit strong free cash flow, a competitive industry position, and a healthy balance sheet. In selecting investments for the Fund, the Subadviser performs valuation analysis, and seeks to purchase companies at a significant discount to their intrinsic value. 15. Comment: The Staff notes that Value Stock Risk is included as a principal risk of the Fund. If not already included, please include in the Fund’s principal investment strategies disclosure that the Fund will invest in value stocks. Response: The Trust notes that it will revise the Fund’s principal investment strategies disclosure to include reference to value investing, as shown in the response to Comment 14 above. AMG GW&K Small/Mid Cap Growth Fund Prospectus Comments 16. Comment: The Staff notes that the Fund’s portfolio turnover rate during the most recently completed fiscal year exceeded 100%. Does the Fund plan to actively turn over its portfolio? If yes, please include that in the Fund’s principal investment strategies disclosure. Response: Th