| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.0% | 8.6% | 23.9% |
| 2025 |
|---|
| 23.9% |
The AMG Yacktman Focused Fund returned 8.66% in Q4 and 24.14% for 2025, outperforming both the Russell 1000 Value Index and S&P 500. The fund's value-oriented approach focuses on evaluating normalized free cash flow and business fundamentals to identify companies trading below intrinsic value. Key contributors included Samsung Electronics, which recovered from 2024 underperformance through corporate initiatives including HBM qualification with NVIDIA and AI-focused Galaxy phone positioning. Hyundai Mobis benefited from electric vehicle penetration and South Korea's value-up reforms aimed at closing the Korean discount. Warner Bros. Discovery contributed as Netflix-Paramount bidding re-rated media valuations. Detractors included U-Haul, despite the company's strategic reinvestment of truck rental cash flows into self-storage expansion. The manager emphasizes South Korea's governance reforms could lead to MSCI reclassification from emerging to developed market status. The portfolio remains positioned for attractive risk-adjusted returns through disciplined value investing and long-term fundamental analysis.
Yacktman focuses on evaluating normalized free cash flow and business fundamentals to identify undervalued companies trading below their intrinsic value, applying risk analysis to arrive at risk-adjusted forward returns while maintaining an owner's mindset for long-term value creation.
The manager believes the portfolio is extremely well positioned to produce attractive risk-adjusted returns and that some of the unlocks seen in the portfolio are just scratching the surface of what is possible.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 4 2026 | 2025 Q4 | 005380.KS, 005930.KS, 012330.KS, AAPL, CNRL.TO, FOXA, MSFT, MU, NFLX, NVDA, PEP, SCHW, UHAL, WBD | AI, Auto Parts, free cash flow, Media, semiconductors, South Korea, technology, value | - | Yacktman builds the portfolio based on evaluating normalized free cash flow and business fundamentals, comparing price to arrive at forward rate of return based on current market valuation. The approach focuses on risk-adjusted returns and long-term underlying business performance, holding companies through periods of stock price underperformance when the long-term thesis offers attractive risk-adjusted returns. South Korea is launching broad value-up reforms modeled after Japan's program, shifting governance standards from company-centric to shareholder value creation focus. The manager believes MSCI will eventually re-rate South Korea from Emerging Market to developed market status, with investor access and index flows beginning to close the 30-year Korean discount. Samsung was late relative to competitors SK Hynix and Micron in HBM design wins with NVIDIA but was awarded HBM qualification in 2025 and ramped production quickly. Samsung has long been a leader in memory including NAND, DRAM, and now HBM, with memory chips appearing in AI data centers and broad array of IOT devices from cars to refrigerators to wearables. The U.S. indices reached record highs driven by artificial intelligence exuberance. Memory chips are ubiquitous in AI data centers, and Samsung reorganized to emphasize Galaxy phones with AI feature leadership to compete with Apple. Hyundai Mobis benefitted from share gain and electric vehicle penetration by Hyundai and Kia, continuing strong capital allocation discipline as one of the top global auto parts suppliers. Warner Bros. Discovery has been a relatively small position that contributed to performance in 2025. After the legacy Warner Bros. merged with Discovery, the company embarked on multi-year deleveraging and management transition. Netflix and Paramount-Skydance bidding process has re-rated the company price. |
| Aug 7 2025 | 2025 Q2 | 005935 KS, PEP | capital preservation, cash flow, Quality, risk-adjusted returns, valuation |
005935 KS PEP |
The letter stresses elevated market valuations and the importance of risk-adjusted returns. Management focuses on resilient businesses with strong cash flows trading below intrinsic value. The outlook favors capital preservation and long-term compounding over momentum. |
| Mar 31 2025 | 2025 Q1 | 005930 KS, BOL FP, CNQ CN, MSFT, UHAL | - | - | |
| Dec 31 2024 | 2024 Q4 | 005930 KS, TEP FP | - | - | |
| Apr 15 2024 | 2024 Q1 | BOL FP, CNQ, CTSH, K, UHAL | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Electric VehiclesRivian represents maybe the most exciting position in the portfolio, with the company developing its own autonomy platform and in-house chip (RAP1). The R2 model represents a pivotal moment, and partnerships with Volkswagen and Amazon have strengthened the balance sheet while expanding strategic options. |
Autonomy Manufacturing Technology Partnerships Scale | |
MediaWarner Bros Discovery was the top contributor as multiple parties submitted acquisition offers, with Netflix acquiring the Streaming and Studios business while Global Networks spins to shareholders. Paramount Skydance made a $30 per share offer for the entire company, creating a bidding war that unlocked shareholder value. |
Streaming M&A Content Entertainment Bidding | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
South KoreaKorea has been a fast follower in shareholder rights enhancements, with government legislation and most companies now having value-up plans. The KOSPI Index gained 79% in 2025, though the market still trades at less than 11x forward earnings, suggesting the Korean discount remains. |
South Korea KOSPI Value-up Korean Discount | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q2 |
ValuationAI-related companies continue to command premium valuations while other sectors remain reasonably priced. This valuation divide continues to guide investment activity, with the fund remaining wary of companies trading at exceedingly high valuations that imply exceptional multi-year earnings growth. |
Premium Divide Discipline Stretched Reasonable |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 7, 2025 | Fund Letters | Stephen Yacktman | 005935 KS | Samsung Electronics Co Ltd Preferred | Information Technology | Technology Hardware, Storage & Peripherals | Bull | NYSE | buybacks, discount, Foundry, Governance, Memory, Smartphones | Login |
| Aug 7, 2025 | Fund Letters | Stephen Yacktman | PEP | PepsiCo, Inc. | Consumer Staples | Soft Drinks | Bull | NASDAQ | branded, dividends, Pricing, resilience, Staples, tariffs | Login |
| TICKER | COMMENTARY |
|---|---|
| 005380.KS | We increased exposure to Hyundai Motor, which is navigating the industry's transition to electrification with a focus on profitability and capital efficiency. Its strong mass-market franchise and growing premium brand, Genesis, has taken market share in key segments via attractive product launches. Strategically, the company is prioritising hybrids over pure battery electric vehicles, aligning with consumer preferences. In the critical North American market, hybrids make up ~12% of units but have grown share consistently as EV demand has stalled. Hyundai plans to make hybrid drivetrains available across most of its models over the coming two years, which should enable the company to meet this wave of consumer adoption and improve on its market share gains of recent years. A forward earnings multiple of 6x is an attractive valuation for a market share gainer. |
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 012330.KS | Hyundai Mobis performed well in 2025 as well. Hyundai Mobis is one of the top global auto parts supplier and benefitted from share gain and electric vehicle (EV) penetration by Hyundai and Kia, and the company continued its strong capital allocation discipline. Both companies participated in the strong regulatory and market access initiatives that South Korea undertook last year. |
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| FOXA | Fox Corporation was sold in December as its share price now more fully reflected its core operational strength and the value of ancillary assets. Over our investment period the share price doubled as the market reassessed Fox's competitive positioning and earnings quality. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MU | Core gains were led by investments in the Technology sector including Micron |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| SCHW | We also added to The Charles Schwab Corporation, which is benefiting from positive earnings revisions, expanding margins, and higher capital returns after having repaid nearly all of its high cost funding. |
| UHAL | The largest detractors were Lennar Corp (LEN), U-Haul Holdings (UHAL/B), and Occidental Petroleum (OXY). |
| WBD | Warner Bros Discovery (WBD) was the top contributor during the quarter. The U.S.-headquartered media company's stock price surged as multiple parties submitted offers to acquire all or part of the business. Following several rounds of bidding, WBD announced an agreement to sell its Streaming and Studios business to Netflix, while spinning the Global Networks business to shareholders. Paramount Skydance subsequently made a direct $30 per share offer to shareholders for the entire company. We are pleased with the steps the WBD board has taken thus far to unlock shareholder value. We will continue to closely monitor developments as this bidding war unfolds. |
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