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Brown Advisory Global Leaders Fund Receives Five-Star Morningstar Rating


Brown Advisory Global Leaders Fund Receives Five-Star Morningstar Rating

PR Newswire

BALTIMORE, Aug. 9, 2018 /PRNewswire/ -- Brown Advisory, an independent investment management and strategic advisory firm, announced that the Brown Advisory Global Leaders Fund (BIALX) received an initial Five-Star Morningstar Overall Rating™ as of July 31, 2018, upon reaching the necessary track record for being ranked. The fund's three-year performance placed it in the top 10% of global equity managers by Morningstar in the World Large Stock category. Overall Morningstar Ratings™ and Percentile Rankings are based on risk-adjusted performance.

Mick Dillon, CFA, and Bertie Thomson, CFA, manage the fund, which launched July 1, 2015. They aim to deliver long-term outperformance by investing in leading global companies that are believed to have the ability to maintain favorable positions over extended periods, provide a unique customer experience and deliver outstanding long-term value to shareholders.

"When evaluating companies, we look for customer experiences and outcomes that are not easily replicated," says Dillon. "While most investors tend to focus on shareholder returns, we believe what matters more is focusing on the value a business delivers to its customers, because if you don't have a customer, you don't have a business."

Brown Advisory attributes the fund's outperformance to the four-step process used to identify 30 to 40 leading companies delivering exceptional customer outcomes:

  • Franchise Quality – Every investment must exhibit a superior customer outcome. The Global Leaders team looks for sustainable businesses with multiple competitive advantages.

  • Management Quality – The team prioritizes long-term management. More than half of the fund is invested in companies run by the founders or a family.

  • Quantitative Measures – The team must see evidence in the numbers; a key target is 20+% return on invested capital (ROIC).

  • Investability (Valuation) – Most potential investments fail here. The team seeks absolute value—not relative valuation—by estimating future cash flow based on growth, ROIC and competitive advantage period.

The team has a clear checklist against which every stock is assessed. It is a simple, repeatable process that leads the team each year to complete detailed fundamental research on approximately 150 companies, from which 20–25% are forensically assessed and typically five to eight new investments are made. The fund targets a 20% ROIC over time and has turnover of just under 20% annually, implying a holding period over five years.

"We look for companies that trade at a discount to their intrinsic value. We also look for asymmetric upside and identify businesses with moats, which help to nullify supply-side disruption," Thomson adds. "The entire industry is focused on picking the right stocks, but for us, capital allocation is more important."

In addition, the fund incorporates differentiating inputs from Brown Advisory's global research platform, including investigative primary research, integrated environmental, social and governance (ESG) analysis and third-party analytics.

As of July 31, 2018, the fund generated a 19.73% total return for the trailing one-year period versus the 11.12% return for the Russell Global Large-Cap Index and an annualized 11.99% return versus the benchmark's 8.89% return since inception (July 1, 2015).

About Brown Advisory

Brown Advisory is an independent investment firm committed to providing its clients with a combination of first‐class investment performance, strategic advice and the highest level of service. Founded in 1993 as an affiliate of Alex. Brown & Sons, a leading U.S. investment bank, Brown Advisory became independent in 1998.

Today the firm serves private clients and institutions in 36 countries from eight offices globally and is responsible for approximately $66 billion in client assets as of July 31, 2018. The firm's colleague equity ownership, experienced investment professionals, collaborative investment process and client‐first culture help to make a material difference in the lives of its clients. For more information, please visit

Media Contact:
Stephanie Dressler
Dukas Linden Public Relations
(646) 808-3701

Brown Advisory Contact:
Richard Gamper
Brown Advisory
(410) 537-5560

As of June 30, 2018, the fund generated a 20.28% total return for the trailing one-year period versus the 10.90% return for the Russell Global Large-Cap Index and an annualized 11.49% return versus the benchmark's 8.09% return since inception (July 1, 2015).

Mutual fund investing involves risk. Principal loss is possible.
Before investing you should carefully consider the Fund's investment objectives, risks, charges, and expenses. This and other information is in the summary or statutory prospectus, a copy of which may be obtained by calling 1-800-540-6807 or visiting the Fund's website, Please read the prospectus carefully before you invest.

Mutual fund investing involves risk. Principal loss is possible. Securities of medium-sized companies may be more volatile and more difficult to liquidate during market down turns than securities of larger companies. Investments in foreign securities and ADRs entail certain risks not associated with investments in domestic securities, such as volatility of currency exchange rates, and in some cases, political and economic instability and relatively illiquid markets. These risks are greater in emerging markets. In addition, the fund is susceptible to risks from investments in ETFs, REITs, derivatives, private placements and its investments in other investment companies. Diversification does not assure a profit or protect against a loss in a declining market.

The Russell Global Large Cap Net Index offers investors access to the large-cap segment of the entire global equity universe. The Russell Global Large Cap index is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to accurately reflect the changes in the market over time. The Russell Global Large-Cap Net Index and Russell® are trademarks of the London Stock Exchange. It is not possible to invest directly in an index.

Return on Invested Capital (ROIC) is based on FactSet using the company's last reported ROIC from the most recent quarter, or if not available the most recent quarter available. The metric is used to assess a company's efficiency at allocating capital under its control of profitable investments. It is a ratio of a company's net income less dividends divided by total capital. Price-Earnings Ratio (P/E Ratio) is the ratio of the share of a company's stock compared to its per-share earnings.

© 2018 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Morningstar Rating™ is a trademark of Morningstar, Inc. Morningstar Rating™ is for the Investor share class only; other classes may have different performance characteristics.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Morningstar Rankings represent a fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest percentile rank is 1 and the lowest is 100. It is based on Morningstar total return, which includes both income and capital gains or losses and is not adjusted for sales charges or redemption fees.

Brown Advisory Global Leaders Fund was rated against the following number of World Large Stock funds over the following time periods: 727 funds in the last three years for the period ending 07/31/2018. With respect to these World Large Stock funds, Brown Advisory Global Leaders Fund received a Morningstar Rating of 5 stars for the three-year period. Past performance is no guarantee of future results.

The Brown Advisory funds are distributed by Quasar Distributors, LLC.

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