1st February 2022
 

• Global, sustainable and dynamic approach to fixed income seeking to deliver attractive long-term returns while producing positive environmental and social impact
• Will leverage and expand Brown Advisory’s substantial experience in U.S. fixed income and successful proprietary ESG framework to a global opportunity set
• UCITS fund – Brown Advisory Global Sustainable Total Return Bond Fund (GBP) – launches with £75 million in assets from seed investors

Brown Advisory, an independent and privately held global investment management firm that oversees more than US$146 billion in client assets, today announces the launch of its Global Sustainable Total Return Bond strategy (“the strategy”).

The strategy takes a global, sustainable and dynamic approach to fixed income, seeking to offer investors access to an attractive stream of income and risk-adjusted returns while simultaneously generating a positive impact on global sustainability issues. It aims to deliver total returns over an economic cycle and act as a complement and counterbalance to equities in an investment portfolio.

This 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.

It is launching initially with a Dublin UCITS fund, denominated in British pounds sterling. Subsequent launches will include a Dublin UCITS fund denominated in U.S. dollars and other vehicles are under consideration for the U.S. market. The strategy is also available to investors globally as a separately managed account.

The strategy invests in a broad range of liquid fixed income instruments, including conventional and inflation-linked government bonds, securitised and corporate bonds, in both developed and emerging markets, as well as using active currency exposure to deliver returns. As such it will provide differentiated exposure for investors beyond only labelled (‘green’ or ‘social’) bonds. It is guided by three central convictions:

• Integrating ESG research with fundamental bottom-up credit analysis helps provide a deeper understanding of potential investment risks without sacrificing total returns, whilst helping direct capital to issuers contributing positively to global sustainability
• Adding depth and breadth to the investment opportunity set (across geographies, sectors and currencies) increases the potential to generate higher income and realise diversification benefits
• An active approach (untethered to the benchmark) can provide the flexibility to allocate risk tactically to areas of the bond market with the most attractive risk-reward profiles and customise solutions to better meet investors’ goals

The strategy is managed by Ryan Myerberg in London, and Chris Diaz and Colby Stilson in the U.S., who joined Brown Advisory last year, reuniting as a team after having previously worked together to successfully build Janus Capital’s global fixed income business. They are fully integrated into the firm’s existing fixed income team, supported by dedicated ESG analysts working alongside Brown Advisory’s fundamental credit analysts.

Logie Fitzwilliams, Head of International Business and Global Head of Sales at Brown Advisory, said: “We are excited to bring this dynamic, all-weather bond strategy to the market, designed to deliver attractive risk-adjusted returns while producing positive environmental and social impact.”

“The strategy is a complement and counterbalance to equity risk, while the ESG analysis framework seeks to identify securities that can deliver both investment performance and positive impact.”

Ryan Myerberg, Partner and Portfolio Manager, said: “The coupling of growing sustainability risks and low rates in developed markets that have been occurring for more than a decade poses an enormous challenge for private and institutional investors utilising bond allocations to generate income and to manage overall portfolio volatility.

“We believe a global, sustainable and flexible approach to fixed income can offer investors access to a more attractive stream of income and risk-adjusted returns while simultaneously generating a positive impact on global sustainability.”

The UCITS fund launches with £75 million in assets from seed investors.

Brown Advisory considers that this Fund actively promotes, amongst other characteristics, social and/or environmental characteristics and therefore is governed by Article 8 of the Sustainable Finance Disclosure Regulation (SFDR).
 

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