• Strategy designed to deliver total returns over an economic cycle as well as complement and counterbalance equity holdings
• Managers believe the dollar has peaked and are encouraged by bond market outlook and value creation in fixed income assets
• In addition to recently announced new hires, the team has added Song Wang as a global credit research analyst

London, 15 February 2023 — Brown Advisory, an independent and privately held global investment management firm that oversees $128.4bn in client assets, reports that its Global Sustainable Total Return Bond Strategy (“the Strategy”) has seen strong demand from clients with total AUM reaching US$316m one year since launch. The Strategy’s aim is to deliver total returns over an economic cycle and was designed as an all-weather complement and counterbalance to equities in a portfolio.

Ryan Myerberg, Partner and Portfolio Manager, Brown Advisory Global Sustainable Total Return Bond Strategy, said: “2022 was undoubtedly a challenging year for fixed income, but we believe there has been tremendous value creation in pockets of the fixed income universe, with developed and emerging sovereign yields as attractive as they have been in more than a decade. We also expect global credit spreads to weaken in the coming months, providing additional investment opportunity.

“As inflation peaks and central banks slow the pace of their interest rate rises, we’re anticipating extending the duration of the portfolio and increasing exposure to corporate credit, first in Europe, followed by the U.S. Additionally, increasing dispersion in central bank monetary policy around the globe means that there will more opportunities for alpha generation in interest rates and currencies.”

The largest contributors to the Strategy were an out-of-consensus view on the path of interest rates, low levels of corporate credit risk, and a flexible and dynamic approach to monetising opportunities in rates and currencies. Although it underperformed the primary benchmark, SONIA, the Strategy has outperformed the secondary benchmark, Bloomberg Global Aggregate 1-10 Year Index (GBP hedged), by 2.5%. In a volatile year, the GBP-denominated vehicle has outperformed its peer group median, as calculated by Morningstar, by 2.8% since launch.

The strategy has been buoyed by a continually expanding team of fixed income professionals at Brown Advisory, bringing long-standing geographic and asset class expertise. Over the last year, a number of new members have joined the team, most recently Brown Advisory has appointed Song Wang to their fixed income team as a global credit research analyst based in Baltimore.

Logie Fitzwilliams, Head of International Business and Global Head of Sales at Brown Advisory, added: “Brown Advisory has a long heritage in sustainable investing, and we’ve been delighted with our clients’ response to our global sustainable fixed income offering since launch last year. Despite the past year’s volatile market conditions, we’ve seen continued strong demand from investors for a product which retains sustainable investment values yet at the same time delivers a strong counterbalance to equity portfolios.”

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About Brown Advisory

Brown Advisory is an independent investment management and strategic advisory firm committed to delivering a combination of first-class performance, strategic advice and the highest level of client service with offices in Austin, Baltimore, Boston, Delaware, Frankfurt, London, Nashville, New York, North Carolina, San Francisco, Singapore, Southern California, Virginia and Washington, D.C. The firm’s institutional and private clients are based in 50 states and more than 44 countries and territories and are served by over 800 colleagues worldwide, all of whom are equity owners of the firm.

About the Global Sustainable Fixed Income team

The Global Sustainable Fixed Income Strategy takes a global, sustainable and dynamic approach to investing, and is managed by Ryan Myerberg in London and Chris Diaz and Colby Stilson in the U.S. It seeks to offer investors access to an attractive stream of income and risk-adjusted returns while simultaneously generating a positive impact on global sustainability issues. This is achieved by integrating ESG research with fundamental bottom-up credit analysis, helping to provide a deeper understanding of potential investment risks without sacrificing total returns, while also helping direct capital to issuers contributing positively to global sustainability. The strategy is a natural expansion and complement to Brown Advisory’s long-standing U.S. sustainable fixed income platform, leveraging Brown Advisory’s 10+ years’ expertise and broad capabilities in sustainable investing.

For more information, please visit: https://www.brownadvisory.com/intl/strategies/global-sustainable-total-return-bond-strategy.