War, humanitarian crises, geopolitical tensions, inflation fears and uncertainty over interest rate policies have added turbulence to equity markets. We believe that a long-term investing approach focused on businesses with strong competitive advantages, with business models that generate high return on incremental invested capital, capable and rightly incentivized management teams and attractive valuations, from a long-term investment horizon, may help investors navigate this volatility. Please join our webcast to learn more about:
- Our approach to building portfolios of sustainable international leading companies
- Sustainability as a competitive business advantage
- Managing portfolios in heightened risk environments
The Brown Advisory Sustainable International Leaders strategy is an actively managed, concentrated portfolio of international companies that we believe are and will continue to be leaders in their sector or industry; these companies have strong competitive advantages, from a fundamental and sustainability perspective, and we believe they offer compelling growth and profitability prospects.
For institutional investors and professional clients only. The views expressed are those of the author and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance may not be a reliable guide to future performance and investors may not get back the amount invested. All investments involve risk. The value of the investment and the income from it will vary. There is no guarantee that the initial investment will be returned.
The information provided in this material is not intended to be and should not be considered to be 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 or funds mentioned. It should not be assumed that investments in such securities or funds have been or will be profitable. The strategy has not entered into a formal agreement to invest in any company and there remains a possibility that certain investments will not be approved by Brown Advisory or that the strategy chooses not to invest for any number of reasons.
ESG considerations that are material will vary by investment style, sector/industry, market trends and client objectives. The strategy seeks to identify companies that it believes may have desirable ESG outcomes, but investors may differ in their views of what constitutes positive or negative ESG outcomes. As a result, the strategy may invest in companies that do not reflect the beliefs and values of any particular investor. The strategy may also invest in companies that would otherwise be screened out of other ESG-oriented funds. Security selection will be impacted by the combined focus on ESG assessments and forecasts of return and risk. The strategy intends to invest in companies with measurable ESG outcomes, as determined by Brown Advisory, and may seek to screen out particular companies and industries. Brown Advisory relies on third parties to provide data and screening tools. There is no assurance that this information will be accurate or complete or that it will properly exclude all applicable securities. Investments selected using these tools may perform differently than as forecasted due to the factors incorporated into the screening process, changes from historical trends, and issues in the construction and implementation of the screens (including, but not limited to, software issues and other technological issues). There is no guarantee that Brown Advisory’s use of these tools will result in effective investment decisions.
As of December 31, 2021, Brown Advisory had approximately $146.5 billion in client assets for the following entities: Brown Advisory LLC, Brown Investment Advisory & Trust Company, Brown Advisory Securities LLC, Brown Advisory Ltd., Brown Advisory Trust Company of Delaware, LLC Brown Advisory Investment Solutions Group LLC, Meritage Capital LLC, NextGen Venture Partners LLC and Signature Financial Management, Inc.
As of December 31, 2021 firmwide institutional strategies had approximately $70.4 billion in assets under management in institutionally marketed strategies. Equity strategy assets include Large-Cap Sustainable, Large-Cap Growth, Sustainable Small-Cap Core, Mid-Cap Growth, Small-Cap Growth, Equity Income, Flexible Equity, Small-Cap Fundamental Value, and Custom Solutions strategies. Fixed Income strategy assets include the Core Fixed Income, Sustainable Core Fixed Income, Enhanced Cash, Intermediate Income, Limited Duration, Municipal Bond and Tax-Exempt Sustainable strategies. Global Leaders strategy listed assets include Global Concentrated Equity. As of December 31, 2021, Brown Advisory had approximately $26.3 billion in sustainable institutional mandates, which includes the following Brown Advisory strategies: Tax-Exempt Sustainable Fixed Income, Sustainable Core Fixed Income, Sustainable Short Duration, Large-Cap Sustainable Growth, Global Leaders (and Global Leaders Sustainable), U.S. Core ESG, U.S. Large-Cap Catholic Values, U.S. Small-Cap Catholic Values, U.S. Large-Cap ESG, Sustainable Income, Balanced ESG, Sustainable Small-Cap Core and U.S. All Cap SRI. Total strategy assets include accounts that are excluded from the composite. These assets include (1) single strategy assets of balanced accounts, (2) accounts that do not meet the composite minimum market value requirement and (3) accounts with restrictive guidelines. Numbers may not total due to rounding.
The information relating to the portfolio managers’ prior experience is provided for informational purposes and is not intended to illustrate the capabilities of the team. It is not intended to be, and shall not be construed as being, investment advice. Investment decisions should not be made on the basis of it. Past performance is not indicative of future performance and there is a risk that some or all of the capital invested may be lost. The information contained herein is based on materials and sources that we believe to be reliable. We make no representation, either express or implied, in relation to the accuracy, completeness or reliability of that information. The views expressed are those of the author and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions.
ROIC is a measure of determining a company’s financial performance. It is calculated as NOPAT/IC; where NOPAT (net operating profit after tax) is (EBIT + Operating Leases Due 1-Yr)*(1-Cash Tax Rate) and IC (invested capital) is Total Debt + Total Equity + Total Unfunded Pension + (Operating Leases Due 1-Yr * 8) – Excess Cash. ROIC calculations presented use LFY (last fiscal year) and exclude financial services