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Tax-Exempt Sustainable Fixed Income

The Brown Advisory Tax-Exempt Sustainable Bond strategy seeks to provide tax-advantaged total returns by investing in tax-exempt bonds with a clear and tangible ESG impact. We believe that actively managed portfolios, focused on bottom-up fundamental analysis and ESG research, can offer core stability and add alpha.

 

Inside the Strategy

  • We believe that sound investment decisions should be based on a security's risk-reward proposition, not macro-oriented forecasts. Our portfolio seeks to perform well in various economic scenarios, with a concentration in positions that have attractive upside greater than downside risk.
  • We review individual securities first from a fundamental credit perspective, and then from an ESG perspective. We believe that our sustainable investment approach strengthens our bottom-up fundamental research, and helps us identify ESG risks and opportunities as well as identify bonds that fund projects with a positive environmental and social impact.
  • We use a proprietary ESG research methodology that integrates third-party data with our own internal analysis. This methodology aims to provide additional dimensions to our understanding of opportunities and the risks embedded in the bonds we evaluate.
  • This strategy can be customized to meet a client’s risk tolerance, liquidity needs and return expectations.
  • The strategy aims to outperform the Barclays Municipal Bond 1-10 Year Blend Index over a full market cycle with lower risk.

Inception: 9/30/2014

Benchmark: Bloomberg Barclays Municipal Bond 1-10 Year Blend Index

Objective: Total return tax-advantaged

Typical Duration Range: 3.5-5.5 years

Typical Credit Quality: Investment grade; up to 20% high yield

Portfolio Manager: Stephen Shutz, CFA

ESG Research Analyst: Amy Hauter, CFA

Vehicle: Separately Managed Account

A Focus on Positive Impact

  • Historically, investors have applied ESG principles primarily to equity investments. Use of these ideas within the fixed income market has been comparatively limited. We find sustainable investing to be a particularly useful and impactful approach within tax-exempt fixed income portfolios.
  • Specifically with regard to investing for positive impact, tax-exempt fixed income offers the essential elements of both a public benefit in order to qualify as tax exempt, and clarity on the use of capital. The use of proceeds is clearly defined in any bond issue, so we are able to build a portfolio that we know is funding projects with tangible and positive environmental impact.
  • Our strong relationships with many of the world’s leading green-bond issuers and underwriters helps us gain access to this new and growing market. We were early adopters of the Green Bond Principles and have been a leading participant in the green bond market in recent years.

 

 

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The information in this section of the website is for information purposes only and does not constitute a recommendation or investment advice to buy or sell securities.

Some Brown Advisory strategies may meet your needs and objectives more effectively than those referred to in this section of the website. For more information, please contact us directly. For more information on all U.S. strategies, please see the list of strategies on the right column of this page.

The contents of this section of the website have not been prepared for the benefit of investors outside the United States. They are not directed at any person or entity elsewhere, nor are they intended for distribution or to be used by any person or entity outside of the United States. In some countries, the distribution of information in this section of the website may be restricted: it is your responsibility to find out what those restrictions are and to observe them. Brown Advisory cannot be liable for a breach of such restrictions. Non-U.S. investors should consider their local regulations before considering investment.

 

Why Sustainable Investing?

Sustainable investing makes sense for a lot of reasons. Smart investors all over the world are realizing how the intersection of financial, social and environmental ideas can lead to better investment results as well as a better foundation for society.

In short, sustainable investing is a way for individuals, families and institutions to achieve a broader set of goals through their investment decisions. We seek to truly understand what you want to achieve, help you consider your options and develop a solution that helps you fulfill your specific objectives.

Strategy Resources

 

Click here to see all Brown Advisory investment strategy documents.

 

Please read our composite disclosure and other important firm disclosures.

Publications


Income and Impact
Green bonds can be a great opportunity for clients interested in sustainable investing—if they are incorporated with clear allocation goals in mind.

Read More

More Information About Investing


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U.S. Institutional Content Disclosure

 

 

By viewing the documents on this page, you confirm and accept that you are an institutional client and are acting on behalf of your client as their authorized advisor or are seeking information as a representative of an institution and that you have read and understood the terms on which the information is being provided.

The information in this section of the website is for information purposes only and does not constitute a recommendation or investment advice to buy or sell securities.

Some Brown Advisory strategies may meet your needs and objectives more effectively than those referred to in this section of the website. For more information, please contact us directly. For more information on all U.S. strategies, please see the list of strategies on the right column of this page.

The contents of this section of the website have not been prepared for the benefit of investors outside the United States. They are not directed at any person or entity elsewhere, nor are they intended for distribution or to be used by any person or entity outside of the United States. In some countries, the distribution of information in this section of the website may be restricted: it is your responsibility to find out what those restrictions are and to observe them. Brown Advisory cannot be liable for a breach of such restrictions. Non-U.S. investors should consider their local regulations before considering investment.

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