The Brown Advisory Tax-Exempt Sustainable Bond Fund seeks to provide a high level of current income exempt from Federal income tax by investing primarily in intermediate-term investment grade municipal bonds while giving special consideration to certain environmental, social, and governance (ESG) criteria.

Investment approach

The portfolio managers believe that bottom-up credit research, in conjunction with integrated and proprietary ESG analysis, helps build a portfolio concentrated in their best ideas and which has the potential to provide attractive risk-adjusted total return over time. To achieve this, the Fund will invest at least 80% of the value of its net assets in fixed income securities which generate interest that is exempt from the interest of which is exempt from Federal income taxes, that do not subject shareholders to the federal alternative minimum tax (“AMT”), and that have either an obligor or a use of proceeds that satisfies the Fund’s ESG criteria. The Fund may invest up to 20% of its assets in securities that may fully subject shareholders to Federal income tax, including the AMT. The Fund may invest in fixed income securities that are referred to as Certain of the fixed income securities that the Fund may invest in are often referred to as “Green Bonds,”, “Social Bonds,”, or “Sustainability Bonds.”. In addition, all capital gains are subject to Federal and state taxes. The Fund is non-diversified, which means that it may invest a significant portion of its assets in the securities of a single issuer or in a small number of issuers.

Fund profile

The Fund is a concentrated portfolio of the managers’ best ideas, identified through integrated fundamental and ESG research, and which the managers believe have the potential to deliver attractive and tax-efficient risk-adjusted returns over time.

 

(As of Dec 31, 2019)

Fund Benchmark
AAA/Aaa 15.4 17.1
AA/Aa 53.5 52.8
A 16.8 20.9
BBB 12.3 7.1
High Yield 0.1
Not Rated 2.1 2.0
Source: FactSet® Credit quality is calculated using ratings assigned by Moody’s. If Moody’s does not rate a holding thenStandard & Poor’s is used. If Moody’s and Standard & Poor’s do not rate a holding then Fitch is used. A bondis considered investment grade if its credit rating is BBB-or higher according to Standard & Poor’s; morespecifically, a rating of“AAA”represents the highest credit quality with minimal risk of default and a ratingof“BB”or below represents speculative financial security. High Yield, if noted, includes holdings that arerated BB+ or lower according to Moody’s. Not Rated category, if noted, includes holdings that are not ratedby any rating agencies. All ratings are as of12/31/2019 .

(As of Dec 31, 2019)

Fund Benchmark
>10 Years 2.1 0.4
7 to 10 Years 19.1 6.5
5 to 7 Years 21.3 22.9
3 to 5 Years 26.7 31.6
1 to 3 Years 24.8 33.2
<1 Year 5.9 5.4
Source: FactSet® Duration distribution includes cash and equivalents. Distribution is subject to change and should not be considered a suggestion or a recommendation to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable.

(As of Dec 31, 2019)

Sector Fund Benchmark
General Obligation 17.0 32.0
Pre-Refunded 6.0 9.0
Revenue 75.0 58.0
Cash 1.0 0.0
Source: Advent Portfolio Exchange® for Fund data, FactSet® for benchmark data. Sector breakdown includes cash and equivalents, are subject to change at any time and should not be considered a suggestion or recommendation to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. Figures may not total 100 due to rounding.

(As of Dec 31, 2019)

Portfolio Attribute Fund Benchmark
Avg. Credit Quality A2 Aa2
Effective Duration (years) 6.0 5.8
Yield to Worst (%) 3.0 2.3
Avg. Life (years) 9.5 7.9
30-Day SEC Yield Unsubsidized(%) 2.65
Source: FactSet® . Characteristics include cash and equivalents

(As of Dec 31, 2019)

Name Percentage
First American Government Obligations Fund, 1.48% 5.3
State of Illinois, 5.00% Due 11/01/2026 4.4
Delaware Valley Regional Finance Authority, 2.14% Due 09/01/2048 3.9
New York State Housing Finance Agency, 1.60% Due 11/01/2024 3.9
City & County of Denver CO Airport System Revenue, 5.00% Due 12/01/2034 3.8
Metropolitan Pier & Exposition Authority, 4.00% Due 06/15/2050 3.2
California Statewide Communities Development Authority, 2.63% Due 11/01/2033 3.2
Minnesota Municipal Power Agency, 5.25% Due 10/01/2035 3.2
New York State Environmental Facilities Corp, 1.45% Due 05/01/2030 3.2
New York City Housing Development Corp, 2.60% Due 11/01/2034 3.1
Source: U.S. Bank Fund holdings include cash and equivalents and are subject to change and should not be considered a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable.
Mutual fund investing involves risk. Principal loss is possible.
Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Fund is non-diversified meaning its assets may be concentrated in fewer individual holdings than diversified funds. Municipal securities may decrease in value during times when tax rates are falling. The Fund’s investments are affected by changes in federal income tax rates applicable to, or the continuing federal tax-exempt status of, interest income on municipal obligations. In addition, the fund is susceptible to risks from investments in derivatives, municipal securities, and its investments in other investment companies.
 
The Brown Advisory funds are distributed by ALPS Distributors, Inc. 1290 Broadway, Suite 1100, Denver, CO 80203. Brown Advisory Funds and ALPS are not affiliated.
Total assets under management value as of 12/31/2019. 
 
 
Click here for a current prospectus. Please read and consider it carefully before investing. You may obtain a hardcopy of the prospectus by calling 1-800-540-6807.
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