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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, AMG GW&K Small Cap Core Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"GW&K's small cap core fund trailed the Russell 2000's 21.5% Q2 rally as speculative, low-quality stocks dominated. The fund's quality bias and cash position created headwinds, but June's normalization drove a rebound."
The AMG GW&K Small Cap Core Fund returned 18.19% in Q2 2026, trailing the Russell 2000 Index's 21.49% return as speculative, low-quality factors dominated the quarter. U.S. small caps extended their year-to-date outperformance over large caps to over 1200 basis points, driven by robust earnings, cooling Middle East tensions, and broadening market participation. The information technology sector led with a 56.1% return, more than double the index. The fund's underweight to low-quality factors and normalized cash position created headwinds during the quarter, with underperformance concentrated in healthcare, consumer discretionary, technology, and financials. However, industrials, energy, and utilities contributed positively, with strong results from Sterling Infrastructure, Ducommun, and Solaris Energy. As market conditions normalized in June, performance rebounded. The managers believe macro and micro fundamentals support continued broadening in the second half of 2026, positioning the fund's quality-focused, balanced approach to benefit as inflation and speculative excesses abate.
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