With that said, we present this discussion of our asset allocation approach and our current portfolio stance as we begin the year. Our motivation for preparing this report is expressed in its title, “Balance in an Uncertain Time.” Investors today face a high degree of uncertainty, from geopolitical transformation to economic transition to fragile market fundamentals. As we have seen in recent months, the broad market has been more than willing to react to that uncertainty by making big short-term bets. This was most recently seen in the extreme reaction to the election of President Trump, when investors moved aggressively at the end of 2016 into companies that might benefit from policies that the new administration might establish and that might produce the outcomes envisioned at the time. We cannot remember a time when it was more important to reinforce patience, balance and discipline in the face of uncertainty, and to assure clients that we are investing their capital in a manner that minimizes exposure to any specific near-term risk. In writing this report, we set out to accomplish two goals: Provide a window into our asset allocation philosophy and process, which emphasize a long-term view. As we will discuss in this paper, two overarching principles guide our work. First, we build each of our clients’ portfolios in support of their specific long-term goals and see great risk in deviating meaningfully from those long-term plans because of events, opinions and other factors that may drive short-term market movement or forecasts. Second, we are fundamental, value-conscious investors and always seek to build portfolios based on a bottom-up view of a given investment’s price relative to its inherent value and risks. This bottom-up analysis is essential to our asset allocation work and of particular import when examining alternative options, such as real estate, private equity and hedge funds, where managers can add considerable value through highly differentiated strategies. This approach is quite different from the top-down method used by many firms to allocate portfolios, but we believe that the further we move away from examining individual investments, the more difficult it becomes to predict outcomes. Additionally, we integrate our asset allocation and manager selection research, which helps us extract valuable information from our managers and target our capital effectively. Provide our asset allocation perspective as it stands at the beginning of 2017—also based on a longer-term view. In this paper, we will provide our current perspective about the investment landscape as of the beginning of the year, lay out our long-term (10-year) thinking about the major asset classes in our portfolios, examine our mediumterm outlook for those asset classes through the lens of various economic and market scenarios that may evolve in the next 18 to 36 months, and discuss our approach to opportunistic investing and how we seek to take advantage of market dislocations when they occur. We hope to reinforce through this discussion our belief that a balanced and cautious approach is warranted in an environment characterized by low growth, low interest rates and above-average valuations. We want to be clear that the output of our asset allocation research is not a “model portfolio” used by all of our clients. Quite the opposite: We use this research as an essential foundation for our work with clients, but it is only a starting point from which we build each client a portfolio reflecting a high degree of customization to their specific circumstances. We hope this document will help shed light on our current views of where opportunities and risks lie in capital markets, as well as our core philosophy on asset allocation. Please fill out the form below if you are interested in downloading the full paper, including our 2017 asset allocation outlook by asset class. 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 is not a guarantee of future performance and you may not get back the amount invested. 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 mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client. *Alternative investments may be available for qualified purchasers and/or accredited investors only. The S&P 500® Index represents the large-cap segment of the U.S. equity markets and consists of approximately 500 leading companies in leading industries of the U.S. economy. Criteria evaluated include: market capitalization, financial viability, liquidity, public float, sector representation, and corporate structure. An index constituent must also be considered a U.S. company. The S&P GSCI® measures general price movements and inflation in the world economy. It represents market beta and is world-production weighted, inclusive of a broad range of liquid commodity futures. Standard & Poor’s, S&P, and S&P 500 are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of S&P Global Inc. The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000 Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set. The Russell 2000® Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000® Growth Index is constructed to provide a comprehensive and unbiased barometer for the small-cap growth segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics. The Russell 3000® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000® Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected. The Russell 2000® Index, the Russell 2000® Growth Index and the Russell 3000® Index are trademarks/service marks of the London Stock Exchange. An investor cannot invest directly into an index. The MSCI ACWI® Index is a free float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. MSCI ACWI ex. US Net TR The MSCI ACWI ex USA® Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the US) and 23 Emerging Markets (EM) countries*. With 1,856 constituents, the index covers approximately 85% of the global equity opportunity set outside the US. The MSCI Emerging Markets® Index captures large and mid-cap representation across 23 Emerging Markets countries. With 834 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI Europe® Index captures large and mid-cap representation across 15 Developed Markets (DM) countries in Europe. With 448 constituents, the index covers approximately 85% of the free float-adjusted market capitalization across the European Developed Markets equity universe. The MSCI ACWI ex USA Small Cap® Index captures small cap representation across 22 of 23 Developed Markets (DM) countries (excluding the US) and 23 Emerging Markets (EM) countries*. With 4,294 constituents, the index covers approximately 14% of the global equity opportunity set outside the US. The MSCI Japan® Index is designed to measure the performance of the large and mid-cap segments of the Japanese market. With 319 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Japan. The MSCI AC Asia ex Japan Index captures large and mid cap representation across 2 of 3 Developed Markets countries (excluding Japan) and 8 Emerging Markets countries in Asia. With 626 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI Emerging Markets (EM) Latin America Index captures large and mid cap representation across 5 Emerging Markets (EM) countries in Latin America. With 116 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI World® Index is a free float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. All MSCI indexes and products are trademarks and service marks of MSCI or its subsidiaries.Bloomberg Barclays Asia USD Investment Grade Bond Index tracks the performance of fixed-rate USD- denominated government related and corporate investment grade debt of the Asia ex. Japan Region. Bloomberg Barclays U.S. Corporate High Yield Index measures the market of USD-denominated, non-investment grade, fixed rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. Bloomberg Commodity Index (BCOM) is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. The BCOM is composed of commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange (LME). Total Return includes interest, capital gains, dividends and distributions realized over a given period of time. Bloomberg Barclays Aggregate Bond Index is an unmanaged, market-value weighted index composed of taxable U.S. investment grade, fixed rate bond market securities, including government, government agency, corporate, asset-backed and mortgage-backed securities between one and 10 years. Bloomberg Barclays Latin America Bond Index consists of sovereign and corporate debt from Latin American issuers. Bloomberg Barclays Indices are trademarks of Bloomberg or its licensors, including Barclays Bank PLC. BLOOMBERG is a trademark and service mark of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. Morningstar, Inc., Morningstar, the Morningstar logo and Morningstar.com are registered trademarks of Morningstar, Inc. All other Morningstar products and proprietary tools, including Morningstar Category, Morningstar Rating, Morningstar Risk, Morningstar Return, and Morningstar Style Box are trademarks of Morningstar, Inc. Terms and definitions: Price-Earnings Ratio (P/E Ratio) measures a stock’s price relative to its earnings per share. PEG Ratio (price/earnings to growth ratio) is a security’s priceto- earnings ratio divided by the growth rate of its earnings.