AMG Funds

    156

    Funds Group: AMG Funds
    Fund Management Company: Adviser-AMG Funds LLC. Sub-adviser-Fairpointe Capital LLC
    Funds Affected: AMG Managers Fairpointe ESG Equity Fund
    Principal Sustainable Investment Strategy: ESG Integration, Shareholder Advocacy, Proxy Voting
    Summary:
    In selecting stocks, the sub-adviser prefers investment in companies it deems to have strong environmental, social and governance (ESG) records and seeks to avoid those with inferior ESG records relative to the market and peers. The fund incorporates certain ESG guidelines in the selection of individual securities and in portfolio construction. The sub-adviser uses internal guidelines as well as third-party research and databases to evaluate a company’s ESG record. The fund also seeks to monitor and advocate for ESG accountability of portfolio companies through proxy voting and shareholder engagement. The sub-adviser further evaluates stocks for selection based on bottom-up fundamental analysis, favoring companies with strong business models, effective management, strong or improving balance sheets and attractive valuations.

    The sub-adviser takes a long-term approach to portfolio management, with a focus on maximizing after-tax returns. Once the fund invests in a company, the sub-adviser intends to monitor that company’s ESG record and, in some cases, the fund may sell an investment in a company whose ESG record declines even if the other investment fundamentals of the company are positive.