BROWN ADVISORY US SUSTAINABLE GROWTH B GBP

  • 1529.00p Price (Inc)
  • 1529.00p Price (Acc)
  • 0.00% 0.75%

    Initial charge
  • 0.75% Annual management charge
  • 0.90% Ongoing charges
  • 0.30% Yield

Prices as at 23 August 2019 , fund data last updated 15 November 2019

The objective of this fund is long-term outperformance of the Russell 1000 Growth index and peer group via a concentrated portfolio of US companies with outstanding business models and sustainability drivers. Brown Advisory believes that sustainable business advantages can drive attractive long-term revenue growth, cost reduction and enhance franchise value. The fund process incorporates a negative exclusion screen and their fundamental stock research incorporates ESG. The screen excludes companies that derive the majority of their revenues from alcohol, gambling, pornography, tobacco, military equipment, fossil fuels and use animal testing for non-medical purposes.

Fund summary

Sector North America
Structure OFFSHORE FUND
Launched
Size £236m
Yield 0.30%
Charging basis Income
Dividends paid November

Charges

Initial charge 0.00%
Initial charge via Bestinvest 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.90%

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Investment process

The investment process of this fund is five steps focused on bottom-up, fundamental stock selection. Step 1 is idea generation. The investable universe is more than 1,000 companies listed on US exchanges (including ADRs) that have a market cap over $2 billion and pass the ethical screens highlighted. They generally seek companies with durable business models whose historical earnings growth rate exceeds that of the benchmark. Approx. 80 new ideas are approved for more detailed research each year. Step 2 is detailed due diligence. The managers and analysts assess the fundamental risks of a company – a quantitative and qualitative approach. They look for experienced management teams and companies with competitive business advantages, before building a buy side/ downside valuation framework. Stage 3 is the decision process. Once the investment thesis has been finalised, approximately 20-30 companies are taken forward for group discussion. The range in the company’s valuation model (best case and worst case) versus the current share price guides final portfolio decisions - this helps mitigate emotions from investment decisions. They then back test companies against the exclusion screens again to avoid certain controversial business involvement. Step 4 is portfolio management. Typical position size is 1%-5%, which will be reflective of analyst and manager conviction of sector and stock, based on the bottom-up scenario projections, current valuation versus their model, event driven considerations. They describe themselves as sector agnostic, but strive for economic balance and diversification. They have a long-term ownership philosophy so focus on heavy up-front research to identify positions, with self-imposed one in one out portfolio management discipline and portfolio optimisation focused on matching position sizes to upside/ downside profiles. Step 5 is ongoing monitoring and sell discipline. There are four main reasons why they sell a stock: 1) Fundamental breakdown - growth drivers do not materialise or strategy/ management change. 2) Breakdown of sustainability advantages or ESG risks appear. 3) Valuation becomes excessive. 4) Alternative opportunities offer more compelling growth – most common.

Brown Advisory is an experienced and specialist US equity boutique that is highly regarded for its bottom-up analysis and performance. This fund is part of a mirror strategy, which has been run in the US since 2009, and has one of the longest track records in the US ESG/Sustainable peer group. The investment style for this highly concentrated portfolio is very growth orientated, which will result in performance that reflects those growth orientated sectors such as technology. We view the fund as mid-green on the ethical and sustainable investing scale.

Manager research

Average monthly relative returns

Bestinvest MRI

14/15 15/16 16/17 17/18 18/19 3 years 5 years Career 3 years 5 years Career
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Track record

Periods of worst performance

Absolute 0.00% ()
Relative 0.00% ()

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Portfolio

30-40 stocks. 1-5% position size. 45-50% in top 10.

Key Investor Documents

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