https://www.sec.gov/Archives/edgar/data/1089951/000119312523291827/d614129d497.htm
497 1 d614129d497.htm AMG FUNDS
Filed pursuant to Rule 497(e)
File Nos. 333-84639 and 811-09521
AMG FUNDS
AMG GW&K Emerging Markets Equity Fund
Supplement dated December 8, 2023 to the Prospectus and Statement of Additional Information,
each dated March 1, 2023
The following information supplements and supersedes any information to the contrary relating to AMG GW&K Emerging Markets Equity Fund (the “Fund”), a series of AMG Funds (the “Trust”), contained in the Fund’s Prospectus and Statement of Additional Information, dated as noted above.
The Board of Trustees of the Trust has approved a plan to liquidate and terminate the Fund (the “Liquidation”), which is expected to occur on or about February 9, 2024 (the “Liquidation Date”). Effective on or about December 11, 2023, it is expected that the Fund will begin selling its portfolio investments and will invest the proceeds in cash and cash equivalents, in anticipation of the Liquidation. Proceeds of the Liquidation are expected to be distributed to shareholders of the Fund promptly following the Liquidation Date in full redemption of each shareholder’s shares of the Fund.
Effective prior to the open of business on December 11, 2023, the Fund will no longer accept investments, except for investments made through existing asset allocation programs investing in the Fund, and shares purchased pursuant to automatic investment programs, such as automatic investments through 401(k) plans and reinvestments of any dividends and distributions. Those shareholders investing in the Fund through one of the exceptions described above may continue to purchase shares of the Fund provided that such transactions settle prior to the Liquidation Date.
A letter will be sent to shareholders who hold shares directly with the Fund (“Direct Shareholders”) setting forth the various options and instructions with respect to the Liquidation and the distribution of Direct Shareholders’ redemption proceeds. Any Direct Shareholder may elect to have redemption proceeds sent to them via check. Direct Shareholders may also elect to exchange their Fund shares into the same share class of any other fund in the AMG Funds family of funds that is open to new investors (subject to minimum initial investment requirements as described in such fund’s prospectus). Shareholders who hold their shares in the Fund through a financial intermediary should contact their financial representative to discuss their options with respect to the Liquidation and the distribution of such shareholders’ redemption proceeds.
The Fund intends to distribute its accumulated net capital gains and net investment income, if any, to shareholders of record of the Fund as of the close of business on December 13, 2023; these distributions may be taxable to shareholders who do not hold their shares in a tax-advantaged account such as an IRA or 401(k).
PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE

FD - Is this what you mean by the WTF plan?
https://www.investopedia.com/articles/personal-finance/121815/buffetts-9010-asset-allocation-sound.asp

hank

Portfolio risk late in retirement? It’s a personal matter, I think, based more on temperament than anything else. If you still don’t have “enough” to survive on for the rest of your life when you reach 75 - 85 may God help you

Unfortunately, most/many retirees are in that situation.

What is a "What The F--k" portfolio? All caution to the wind?

I’ve researched it Mike. It’s military lingo: ”Whiskey Tango Foxtrot”
Portfolio risk late in retirement? It’s a personal matter, I think, based more on temperament than anything else. If you still don’t have “enough” to survive on for the rest of your life when you reach 75 - 85 may God help you. It’s unlikely any particular allocation model is going to make much difference at that point. WTF.
Notwithstanding the above, the referenced study (in the OP) doesn’t deal specifically with appropriate equity / risk exposure per age. It simply asserts that an all stock portfolio (50% domestic / 50% foreign) will outperform a “balanced” (60/40) portfolio over just about any relevant time span.

Add 1% annually. Usually, by age 75 you can start taking more risk.
WTF portfolio is when someone needs under 3% (2.5% is better) withdrawal annually from their portfolio. In that case they can have 20/80 to 80/20 mix of stock/bonds.
The portfolio size is usually in the millions. I'm talking about someone that is living well and spends money they can afford.
Of course, someone who has a pension+ SS that cover all the expenses, can have a smaller portfolio.
Let's see how many posters will try to find a word or something else I didn't mean and twist the above.
On the other hand, there are people who won many millions in the lottery and spend it all.
Then you have the FIRE (https://www.investopedia.com/terms/f/financial-independence-retire-early-fire.asp)
movement. That isn't appealing to m either.

I never understand the "having enough and it doesn't matter" statement.
If I have $10M, it still matters whether I withdraw 3% or 5%.
Just sayin..

@FD1000 if one starts with 35%-40% stocks, how often/when do you add 1% until you reach your comfort level?

After I read many of these papers, I liked the idea of FLEXIBILITY which is what I have been practicing during the accumulation phase.
It also depends on how big is your portfolio.
- If you don't have enough, you don't have a choice but to own a high % of stocks for longevity.
- If you have WTF portfolio=enough, you can be at 20/80 to 80/20
- The biggest problem is in the middle. How to split between stock to bonds? 35-65% in stocks/bonds makes sense. Another good idea is "a rising equity glide path". You start with 35-40% in stocks and increase by 1% until you get to your sleep-well %.
In my case: since 2018=retirement, I have used at least 90% bonds + flexibility=trading.

@sma, Wade Pfau has done several recent studies on retirement withdrawals. Basically, he has looked at various ways to modify/improve Bengen's 4% w/COLA Rule. He was a Professor at the American College of Financial Services, so he is not pushing any one idea, but has analyzed various possible variations.
https://risaprofile.com/about-us/
https://retirementresearcher.com/about/wade-pfau-bio/
https://www.amazon.com/Retirement-Planning-Guidebook-Navigating-Important/dp/194564009X
One of the ideas he has mentioned is "rising equity glide-path" (not sure who first came up with the idea). So, one starts with lower equity exposure around retirement to account for high SOR risks, and then increases equity exposure gradually as retirement progresses. These increases are not dramatic.
"What’s the solution?
There are four ways to manage the sequence-of-return risk. One, spend conservatively. Two, spend flexibly. If you can reduce your spending after a market downturn, that can manage sequence-of-return risk because you don’t have to sell as many shares to meet the spending need. A third option is to be strategic about volatility in your portfolio, even using the idea of a rising equity glide path. The fourth option is using buffer assets like cash, a reverse mortgage or whole life policy with cash value.
What is a rising equity glide path?
Start with a lower stock allocation at the beginning of retirement, and then work your way up. Later in retirement, market volatility doesn’t have as much impact on the sustainability of your spending path, and you can adjust by having a higher stock allocation later on. "
Subscription Link https://www.barrons.com/articles/retirement-4-percent-rule-downturn-strategy-51642806039

@hank
I stumbled across the idea that you start retirement with a low equity allocation and increase it as you age ten or so years ago, although I forgot the source. It avoids loosing 45% of your assets in a massive bear market just as you retire.
Of course this requires you to have enough income from SS a pension etc to survive early years without being forced to withdraw capital to live on.
I felt like a genius when I retired equity light in 2019, as the Covid Bear market hit. The problem now is to decide how soon and how much to increase my equity exposure. I have a much better feeling for our expenses and SS income now than I did in 2019, but domestic equities seem rather overpriced now.
A lot of people unfortunately have to take out a substantial % of their retirement account to survive.

A contrary view in enormous detail
https://apple.news/A0kaS2vXER3yTrYXxZm5LWA
or
https://www.forbes.com/sites/greatspeculations/2023/12/09/despite-strong-jobs-report-recession-still-locked-in/

One non interest payment in 15 years. Looks to me to be a very good batting average.

Especially when you consider the number of CDs I've owned over that period (50+), the number of monthly and semi-annual interest payments that represents, and the rare nature of the root cause of my issue, a merger of two banks whose systems were having real trouble communicating at EOY, a period like the BOY that many times can have issues.
Add in that I am anal about this stuff and ALWAYS track EVERY interest payment is received. Meaning, you can take to the bank, so to speak, that this was in FACT the only interest payment issue I had in 15 years! My whole audit manager career thingie is hard to kick.
And hey @Derf, thanks for the kind words here and elsewhere on MFO. Very much appreciated!

On further review of @Roy article, it appears Reckenthaler uses the initial 8 % WD factor to establish all future WDs based on the initial dollar amount ($500k x 8%) or $40k. Instead, I would suggest the retiree applies the 8% WD rate on each year’s ending balance. This one change would keep you from running out of money and would adjust WD amounts based on market conditions...more in up years and less in down years.
This is how RMDs are calculated (age specific actuarial WD rate x each year’s portfolio’s ending balance).
Couldn’t we do the same? This would account for life expectancy (actuarial charts) and allow the retiree to increase their WD rate as they aged (if necessary).
How many retirees take more than their RMDs amounts after factoring in other income sources such as SS, pension, part time work, rental income?
It’s not unusual for retirees to be working in their 60’s, maximizing IRA contributions, delaying SS, and delaying IRA WDs. This may allow that retiree to hold a higher percentage of equities and ultimately consider taking a higher WD rate.

One non interest payment in 15 years. Looks to me to be a very good batting average.

I think I have mentioned in some thread at MFO. Dave Ramsey said recently that withdrawing 8% with COLA was OK with all-stock portfolios and that everyone recommending only 4-5% with COLA from hybrids was a fool.
Well, tables were turned soon on Ramsey as many on Twitter showed that with Ramsey's advice, anyone who started in 01/2000 would have already run out of money by now, forget about 30-40 years. So, fool was Ramsey. He didn't offer a rebuttal.
Decumulation is very different and less forgiving than accumulation.

The graphic is set for the 5 days ending December 8, Friday; for the best to worst % returns in select etf categories. One may then also select the one month column to align the one month return best to worst; or for the other listed time frame columns.
Remain curious,
Catch

+1 Thank you @Roy / Excellent link.
On occasion I listened to Ramsey 20+ years ago when he was on late night AM. Sounded much more rational than. From that included clip, it sounds like he’s been attending the ”Rush Limbaugh School of Public Address”. Make what you will of his math.
FWIW - About 15 years ago (possibly more) there was a thread (maybe on F/A?) discussing a published theory that retirees should start out conservatively positioned and become more aggressive as they age. Sounded ridiculous to me at the time. But 25+ years into retirement I can at least understand the logic. Early on you’re most concerned about outliving your assets. If you’re fortunate enough, later on that becomes a less important concern and you might be inclined to put a little more risk “on the table” in pursuit of greater reward.
As always: No 1 size fits all.

@yogibearbull
That's what concerns me for a good friend who is 50 years old (married) and has a retirement portfolio of a million already. He hopes to retire at 52 and is planning to be 100% invested in the SP500 until death. He scoffs at the 4% rule as being far too conservative, though I don't know what his starting withdrawal rate plan is. He has floated the idea of meeting with a financial planner to vet his plan.
Here is a link for an article from M* columnist John Reckenthaler on the viability of an all-stock portfolio and high real withdrawal rate in retirement.
https://www.morningstar.com/retirement/can-you-safely-spend-more-early-retirement

We humans struggle with the “buy & hold” investing adage.
JP Morgan confirms your researcher’s finding:

Finally, we continue to believe stocks are the drivers of long-term capital appreciation. Bonds certainly have a greater role to play in portfolios today, but we are also reminded that stocks have outperformed bonds 85% of the time on a rolling 10-year basis since 1950.

I do believe holding a small percentage of less volatility (cash, bonds) during the withdrawal phase helps a retiree “withdrawal cash/bonds and hold a higher percentage of equities” in retirement.
Sited article:
https://jpmorgan.com/insights/outlook/market-outlook/five-considerations-for-investors-in-2024

Anyone else have this experience?
========================
Yes, I did one time, but at Fido not Schwab. It too was with a very large bank. It was in Jan 2023 and I discussed it in a thread on the Fido Investor Community board titled, "FDIC'd Brokerage CD - Late Interest Payment."
In case you don't have access to it (Invitees Only), here are some excerpted comments from that thread. All comments are mine except the one as noted. I bolded some of the most important points from that thread.
Summarily,
I have owned a CD ladder for 15 years with LOTS of CDs and a late interest payment issue has only ever happened ONCE. (Pretty remarkable!)
I spoke to very helpful FI guys at Fido a few times during the resolution of the issue and got great insights to it and help resolving it.
I also contacted the bank directly and spoke to a high level manger there who was extremely helpful and concerned.
The cause of the error was a system error on the bank's side after a recent merger.
I received my accurate interest payment 10 days after the scheduled interest payment date and have not had any issues since with this CD or the numerous others we own.
=========================
(From that thread's OP:)
The bank on one of our CDs did not pay interest on the scheduled payment date. In conversations with Fido reps we've been told a couple of things:
(1) The interest payment is not yet overdue. It becomes overdue (mid-week, this week) at 10 days past the scheduled interest payment date.

(2) The bank has made its timely interest payments on all other CDs issued by it through Fido brokerage.
(3) Generally, if banks are untimely on their interest payments, it usually occurs at the beginning of calendar years, as is the case with this one.
(4) If not received by the overdue date, Fido initiates a "service request" at the request of the account holder and contacts the bank to inquire about the late payment and determine if/when it will be received by Fido.
(5) If there are unresolved issues with either the interest payment or the principal, the contract is between the account holder and the bank and any resolution of interest not received, or default on the principal payment, is between the account holder, the bank, and perhaps ultimately FDIC.
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Per the ever helpful and resourceful yogibearbull:
Hopefully this situation is resolved quickly and satisfactorily.
But Fido is only a broker/middleman here and can/will do courtesy follow ups.
As the matter is between the CD holder and the issuing institution, it may not hurt to file a delayed-interest report to the FDIC.
https://ask.fdic.gov/fdicinformationandsupportcenter/s/?language=en_US
https://www.fdic.gov/contact/
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UPDATE per Fido:
Fido is encountering a number of these situations with several banks at this point in time. A "service request" will be made tomorrow on the overdue date IF the interest payment has not been received by then.
Fido assures that rarely has an account holder had to resort to individually filing a FDIC claim and does not at all expect that will happen here. The likely cause of the delayed payment is a system issue of the bank that merged with another bank in 2022.
Interest payments can be put on hold for a month or even as long as a quarter.

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The Fido FI Rep I did speak to today stated what other reps have told me: A couple banks have not made their January interest payments due to either (1) system issues on the bank's end or (2) the normal, EOY/BOY delays.
I did also speak directly to a person at the bank who confirmed that this was in fact a system issue on their end that caused the interest payment to be made 10 days after the normal interest payment date.