Keep calm remain diversified - AMG Funds
KEEP CALM
AND
REMAIN DIVERSIFIED
Principles of Investment Success
4Q 2020
Interactive Digital Version Available at:
The Law of Market Cycles
S&P 500? Index Total Return Through Market Cycles Since 1926
$100,000,000 $10,000,000
Average Bull Markets1 Increase: Duration:
387% 7.2 Years
$1,000,000
$100,000 $10,000
+193% 3.7 yrs
-83%
+415% 4.6 yrs +65%
1.4 yrs
+210% 4.0 yrs
-22%
-50% -30%
+936% 15.0 yrs
-22%
+144% 6.3 yrs
+76% 2.4 yrs
-29%
-43%
+845% 12.8 yrs
-30%
Bull Market Returns and Duration
+817% 12.7 yrs
-45%
+108% 5.0 yrs
-51%
Bear Market Returns
+47% +451% 0.7 yrs 10.8 yrs
-34%*
$109,446,779
Average Bear Markets Decline: Duration: Frequency:
-39% 1.3 Years 7.7 Years
$1,000
1926
1931
1936
1941
1946
1951
1956
1961
1966
1971
Source: FactSet, S&P Dow Jones Indices as of December 31, 2020. The index is unmanaged, is not available for investment and does not incur expenses. Daily performance is not available from 1926. Past performance is no guarantee of future results. 1 Average does not include current bull market.
PAGE 1 | KEEP CALM AND REMAIN DIVERSIFIED
1976
1981
1986
1991
1996
2001
2006
2011
* This chart uses monthly returns although this most recent bear market uses daily performance for consistency with the rest of the brochure.
2016
2020
KEEP CALM AND REMAIN DIVERSIFIED | PAGE 2
A Closer Look at Historical Bear Markets
0
-20
7
3
4
11
5
8
-40
10% Decline = Correction
6
-60
2
9 10
20% Decline = Bear Market
-80 1
-1001926 1930 1934 1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
Bear Market Details
Cumulative Returns of the S&P 500? 1
Market Events
Market Peak
1 Crash of 1929 - Started the Great Depression 2 1937 Fed Tightening - Premature policy tightening 3 Post WWII Crash - Post-war demand tapering 4 Flash Crash of 1962 - Flash crash, Cuban Missile Crisis/Cold War jitters 5 Tech Crash of 1970 - Economic overheating, civil unrest 6 Stagflation (High Inflation/Slow Growth) - OPEC oil embargo 7 Federal Reserve (Volcker) Tightening - Whip Inflation Now 8 1987 Crash - Program trading, overheating markets 9 Tech Bubble - Extreme valuations, .com boom/bust 10 Global Financial Crisis - Housing bubble, Lehman collapse 11 Global COVID-19 Crisis
Averages
Sep 1929 Mar 1937 May 1946 Dec 1961 Nov 1968 Jan 1973 Nov 1980 Aug 1987 Mar 2000 Oct 2007 Feb 2020
--
Bear Declines
-83% -50% -30% -22% -22% -29% -43% -30% -45% -51% -34% -40%
Duration (years)
2.8 1.0 2.5 0.4 0.4 1.5 1.7 0.2 2.0 1.2 0.2 1.3
1 Year Later
162.89% 35.18% 61.23% 8.01% 31.16% 41.83% 38.14% 23.33% 24.40% 53.62%
?? 47.98%2
2 Years Later
146.90% 59.01% 74.04% 12.72% 59.37% 57.07% 80.19% 61.36% 41.65% 88.30%
?? 68.06%2
Source: MSNBC, FactSet, and S&P Dow Jones Indices. The index is unmanaged, is not available for investment and does not incur expenses. Monthly returns are shown for S&P 500? Index, except for the COVID-19 Crisis, which is daily.
As of December 31, 2020. 1 Based on the closest month-end date after the bear market end date. Uses monthly returns. 2 Average does not include most recent bear market.
PAGE 3 | KEEP CALM AND REMAIN DIVERSIFIED
A Long-Term Perspective on Market Downturns
S&P 500? Cumulative Returns (%) (1926-2020)
1,000
Bull Market Cumulative Returns
+936% 15.0 yrs
800
Bear Market Cumulative Returns
+845%
12.8 yrs
+817%
12.7 yrs
Recession Period
600
+451%
+415%
10.8 yrs
4.6 yrs
400
+193% 3.7 yrs 200
+210% 4.0 yrs
+65% 1.4 yrs
+144% 6.3 yrs+76%
2.4 yrs
+108% 5.0 yrs
+47% 0.7 yrs
0
-83%
-50% 1.0 yrs
-30% 2.5 yrs
-22% 0.4 yrs
-22% 0.4 yrs
-29% -43% 1.5 yrs 1.7 yrs
-30% 0.2 yrs
-34%
-45% -51%
0.2 yrs
2.0 yrs 1.2 yrs
2.8 yrs
-200
1926 1930 1934 1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
Source: FactSet and NBER. As of December 31, 2020. S&P 500? (gross dividends reinvested) in USD. Bear markets represented peak-to-trough price declines of 20% or more in the S&P 500? Index. Bull markets reflect all other periods. Monthly returns are shown for S&P 500? Index, except for the COVID-19 Crisis, which is daily. Past performance is no guarantee of future results.
KEEP CALM AND REMAIN DIVERSIFIED | PAGE 4
A Closer Look at the Most Recent Market Cycle
S&P 500? Price Index (2007-2020)
4,000
Sep 2007
3,500 Consumer Confidence Index: 121.21
Feb 2020
Consumer Confidence Index: 132.61
3,000
Feb 2009
Consumer Confidence Index: 25.31
2,500
2,000 1,500
Jul 2, 2010 -15.6%
Oct 3, 2011 -18.6%
1,000 Mar 9, 2009 -55.3%
500 2007 2008 2009 2010 2011 2012 2013
Volatility VIX Index (2007-2020)
100
Jul 2010
80 60
Mar 2009
Global Financial Crisis
Flash Crash, BP oil spill, Europe/Greece
Oct 2011
U.S. downgrade, Europe/periphery stress
40
Aug 25, 2015
-11.9%
Feb 8, 2018
Feb 11, 2016 -12.7%
-10.1%
Dec 24, 2018 -19.4% Mar 23, 2020
-33.8%
2014 2015 2016 2017 2018 2019 2020
Aug 2015
Global slowdown fears, China, Fed uncertainty
Dec 2018
Potential Central Bank
policy reversal Mar 2020
Feb 2018
Wage growth
Global COVID-19 Crisis
and volatility
Feb 2016 trade unwind
Oil, U.S. recession
fears, China
20
VIX Average Since 2007: 19.9
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Highlighted returns capture peak to trough corrections of 10% or more during the time period. Source: FactSet. As of December 31, 2020. 1 Source: The Conference Board. The Consumer Confidence Survey? reflects prevailing business conditions and likely developments for the months ahead. This monthly report details consumer attitudes and buying intentions, with data available by age, income, and region. Measurement dates: September 30, 2007, February 27, 2009, and February 29, 2020. The market downturn data is based on total return in order to be consistent with the rest of the brochure. Past performance is no guarantee of future results.
PAGE 5 | KEEP CALM AND REMAIN DIVERSIFIED
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