AMG TimesSquare Mid Cap Growth Fund returned 0.97% in Q1, trailing the Russell Midcap Growth Index by nearly two points. A quality tilt and tech underweight cost performance as AI-driven names surged. The fund holds a 72 Alpha Score.
Alpha Score of 72 reflects strong overall profile with strong momentum, weak value, strong quality, strong sentiment.
AMG TimesSquare Mid Cap Growth Fund missed the Russell Midcap Growth Index by nearly two percentage points in the first quarter. The fund returned 0.97%, net of fees, against the benchmark's 2.96%. The gap came from a positioning mismatch.
TimesSquare's portfolio managers ran a quality-first tilt. They overweighted healthcare and industrials while keeping technology exposure below the index weight. The Russell index got its lift from a handful of large-cap-growth tech names within the mid-cap bucket – software and semiconductor stocks that rallied on AI enthusiasm in January and February. TimesSquare owned some of those names but at lighter weightings. When the AI trade broadened in late February, the fund's healthcare and industrial holdings could not keep pace.
Healthcare was the biggest drag. Biotechnology names, a traditional TimesSquare strength, suffered from regulatory uncertainty around drug pricing and from a rotation out of growth-duration assets as long-dated Treasury yields crept up in February. The fund's top relative performer was a financial-services holding, a mid-cap asset manager that benefited from the equity market's volume uptick. One name could not offset the tech underweight.
Morningstar data for month-end shows TimesSquare's active share versus the Russell Midcap Growth Index was in the mid-70s. Roughly three-quarters of the portfolio differed from the benchmark. That is a high conviction number for a mid-cap fund. In a quarter where the index's composition – tech-heavy, quality-light – was the winning formula, being different cost the fund.
The fund's Alpha Score of 72 out of 100 on the AlphaScala platform puts it in Moderate territory for the trailing twelve months. That composite weighs risk-adjusted return, drawdown control, and consistency. The moderating factor: TimesSquare's lower volatility and smaller drawdowns relative to peers in the prior three quarters. The fund holds up better when markets fall; it did not fully participate when they rose. AMG stock page
Explaining the underperformance as a simple tech underweight is true but incomplete. The fund's process weights valuation and earnings quality over momentum. That process underperforms when the market rewards companies burning cash for growth, which is what the AI valuation wave looks like in mid-cap land. The fund has been through this cycle before. The next catalyst could favor the portfolio: a rates pivot, a CPI print that slows the growth-to-value rotation, or a pullback in high-multiple tech.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.