The Brown Advisory Sustainable Core Fixed Income strategy seeks to maximize total return by investing in fixed income sectors that demonstrate clear, tangible positive impact.

Investment approach

  • We believe that sound investment decisions should be based on a security's risk-reward proposition, not macro-oriented forecasts. Our portfolio seeks to perform well in various economic scenarios, with a concentration in positions that have attractive upside greater than downside risk.
  • We review individual securities first from a fundamental credit perspective, and then from an ESG perspective. We believe that our sustainable investment approach strengthens our bottom-up fundamental research, and helps us identify ESG risks and opportunities as well as identify bonds that fund projects with a positive environmental and social impact.
  • We use a proprietary ESG research methodology that integrates third-party data with our own internal analysis. This methodology aims to provide additional dimensions to our understanding of opportunities and the risks embedded in the bonds we evaluate.
  • This strategy can be customized to meet a client’s risk tolerance, liquidity needs and return expectations.
  • The strategy aims to outperform the Barclays Municipal Bond 1-10 Year Blend Index over a full market cycle with lower risk.

A Focus on Positive Impact

  • Historically, investors have applied ESG principles primarily to equity investments. Use of these ideas within the fixed income market has been comparatively limited. We find sustainable investing to be a particularly useful and impactful approach within fixed income portfolios.
  • Specifically with regard to impact investing, fixed income offers an essential element of clarity on the use of capital. The use of proceeds is clearly defined in any bond issue, so we are able to build a portfolio that includes securities that we know are funding projects with tangible and positive environmental or social impact.
  • Our strong relationships with many of the world’s leading green-bond issuers and underwriters helps us gain access to this new and growing market. We were early adopters of the Green Bond Principles and have been a leading participant in the green bond market in recent years.

Objective: Total return tax-advantaged

Typical Duration Range: 3.5-5.5 years

Typical Credit Quality: Investment grade; up to 20% high yield

Vehicle: Separately Managed Account

 

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