Amg Funds N-CSRCertified annual shareholder report (management investment company)

As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on $1,000 invested at the beginning of the period and held for the entire period as indicated below.

ACTUAL EXPENSES

The first line of the following table provides information about the actual account values and

actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s

actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

For the 12 months ending December 31, 2021, AMG Yacktman Focused Fund (the “Fund”) Class N shares returned 16.45% behind the 25.16% return of the Russell 1000^® Value Index.

Last year produced strong market returns and solid absolute results for the Fund. It was the third year in a row of exceptional U.S. stock market appreciation and reminded us of the speculative period of the late 1990s when multiple expansion, momentum, and dreams seemed to matter more than cash flow, competitive advantages, and fundamentals.

Everything abruptly changed in early 2022 when high multiple stocks with uncertain futures were crushed, and multiples on many expensive equities have been reduced somewhat. Our investment approach, which focuses on valuation, quality and risk management, has held up well during the sharp correction of early 2022. Our strongest outperformance in the past has typically come from protecting well in market declines, bargain hunting and reloading the portfolio with new opportunities if available.

Last year, Adam Sues was added to the Fund as a co-manager. Adam is an incredibly skilled investor who successfully manages AMG Yacktman Special Opportunities Fund, a 5-star rated global fund that generally focuses on small and micro-cap securities. He has been a significant contributor to the firm since he joined our organization in 2013 and is already a familiar voice to investors who listen to our quarterly conference calls.

Contributors and Detractors

Contributors in 2021 included Bolloré, Microsoft, Alphabet, Macy’s and a new holding, Canadian Natural Resources (“CNQ”).

Bolloré was the Fund’s strongest performer in 2021, in large part due to Universal Music Group’s (“UMG”) successful IPO which resulted in Bolloré becoming a direct holder of approximately 18% of UMG shares and highlighting significant value. Late in the year, we received more positive news when Bolloré announced it received an offer from MSC Group to purchase Bolloré’s African Logistics business. Both the UMG IPO and MSC Group announcement are part of an ongoing simplification at Bolloré, which we believe could result in significant addition to the shares.

Microsoft and Alphabet were top performers due to strong earnings results.

Macy’s stock soared last year as the economic recovery resulted in exceptionally strong sales and earnings. We significantly reduced the position due to price appreciation.

CNQ, a new Fund holding in 2021, was a quick contributor to Fund results.

Detractors in 2021 included Samsung Electronics Preferred (“Samsung Electronics”), Continental AG, Hyundai Home Shopping, The Walt Disney Co. (“Disney”), and Associated British Foods.

After being the biggest positive contributor to 2020 Fund results, Samsung Electronics shares underperformed last year, due to investor concerns about weaker earnings from the company’s leading memory semiconductor business. We think the company is well-positioned for long-term growth and the shares trade at a very attractive valuation.

Continental’s stock struggled last year due to weaker auto production, which was largely a result of a shortage of semiconductors (something Samsung Electronics can help solve!).

Hyundai Home Shopping lagged last year, but is a remarkably inexpensive stock that we think has significant potential.

Disney’s shares were weaker last year due to concerns about the long-term growth and profitability of the company’s streaming services.

Associated British Foods’ shares lagged last year as a recovery in the company’s Primark division stalled modestly due to the Omicron variant. We think the shares trade at an unwarranted discount, possibly because many investors do not like the combination of food, ingredients, and a clothing retail business.

Select New Positions

One of our meaningful new positions in 2021 was an investment in CNQ. The company is an upstream oil & gas company based in Canada with a long history of creating shareholder value. CNQ has low decline, long reserve life oil & gas assets, which produce the heavier grades of crude that the world and U.S. requires to operate our economy and daily life. Canada is at the forefront of environmental stewardship and CNQ is one of the industry leaders in best practices.

We also added a new position in Samsung C&T Corp. (“C&T”) which sells at a significant discount to the value of its holdings. The best asset C&T holds is a 5% ownership position in Samsung Electronics, one of our favorite positions, which by itself is worth more than C&T’s entire market cap. The company also owns approximately 43% of Samsung Biologics, and while we do not like the Biologics position remotely as much as the Samsung Electronics, we are happy to have it because we are not paying anything for it. Additionally, C&T operates a construction and trading operation, and owns a variety of other public and private investments.

Another new position is Reliance Steel & Aluminum Company (“Reliance”). Do not be confused by the name, as the company does not produce or manufacture any metal products – it serves as the middleman between steel mills and end customers. Reliance has compounded shareholder returns well above peers and the market for decades despite operating alongside a difficult industry. It is the leader in a highly fragmented market and benefits from the supply chain disruptions and inflationary environment, leading to record earnings. We have had success before with leading distribution companies like Sysco in food and Brenntag in chemicals.

Conclusion

Since the market low in March of 2009, U.S. markets have steadily risen, in large part due to multiple expansion. We think the start of 2022 could have marked a change where, instead of coasting with ever-increasing index valuations, investments will be judged and rewarded based on fundamentals. In this type of environment, price will matter, and investments with the hidden value we often find could flourish. We have successfully navigated turbulent environments in the past and will work hard to do so again. We wish investors in the Fund a happy and healthy 2022, and, as always, we will be diligent, patient, and objective in our approach.

The views expressed represent the opinions of Yacktman Asset Management LP and are not intended as a forecast or guarantee of future results, and are subject to change without notice.