ck0001548609-20220630
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Prospectus |
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October 31,
2022 |
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BROWN
ADVISORY GROWTH EQUITY FUND
Institutional
Shares (BAFGX)
Investor
Shares (BIAGX)
Advisor
Shares (BAGAX) |
BROWN
ADVISORY INTERMEDIATE INCOME FUND
Institutional
Shares (Not Available for Sale)
Investor
Shares (BIAIX)
Advisor
Shares (BAIAX) |
BROWN
ADVISORY FLEXIBLE EQUITY FUND
Institutional
Shares (BAFFX)
Investor
Shares (BIAFX)
Advisor
Shares (BAFAX) |
BROWN
ADVISORY TOTAL RETURN FUND
Institutional
Shares (BAFTX)
Investor
Shares (BIATX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY EQUITY INCOME FUND
Institutional
Shares (BAFDX)
Investor
Shares (BIADX)
Advisor
Shares (BADAX) |
BROWN
ADVISORY SUSTAINABLE BOND FUND
Institutional
Shares (BAISX)
Investor
Shares (BASBX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SUSTAINABLE GROWTH FUND
Institutional
Shares (BAFWX)
Investor
Shares (BIAWX)
Advisor
Shares (BAWAX) |
BROWN
ADVISORY MARYLAND BOND FUND
Institutional
Shares (Not Available for Sale)
Investor
Shares (BIAMX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY MID-CAP GROWTH FUND
Institutional
Shares (BAFMX)
Investor
Shares (BMIDX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY TAX-EXEMPT BOND FUND
Institutional
Shares (BTEIX)
Investor
Shares (BIAEX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SMALL-CAP GROWTH FUND
Institutional
Shares (BAFSX)
Investor
Shares (BIASX)
Advisor
Shares (BASAX) |
BROWN
ADVISORY TAX-EXEMPT SUSTAINABLE BOND FUND
Institutional
Shares (Not Available for Sale)
Investor
Shares (BITEX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SMALL-CAP FUNDAMENTAL VALUE FUND
Institutional
Shares (BAUUX)
Investor
Shares (BIAUX)
Advisor
Shares (BAUAX) |
BROWN
ADVISORY MORTGAGE SECURITIES FUND
Institutional
Shares (BAFZX)
Investor
Shares (BIAZX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SUSTAINABLE SMALL-CAP CORE FUND
Institutional
Shares (BAFYX)
Investor
Shares (BIAYX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY – WMC STRATEGIC EUROPEAN EQUITY FUND
Institutional
Shares (BAFHX)
Investor
Shares (BIAHX)
Advisor
Shares (BAHAX) |
BROWN
ADVISORY GLOBAL LEADERS FUND
Institutional
Shares (BAFLX)
Investor
Shares (BIALX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY EMERGING MARKETS SELECT FUND
Institutional
Shares (BAFQX)
Investor
Shares (BIAQX)
Advisor
Shares (BAQAX) |
BROWN
ADVISORY SUSTAINABLE INTERNATIONAL LEADERS FUND
Institutional
Shares (BAILX)
Investor
Shares (BISLX)
Advisor
Shares (Not
Available for Sale) |
BROWN
ADVISORY – BEUTEL GOODMAN LARGE-CAP VALUE FUND
Institutional
Shares (BVALX)
Investor
Shares (BIAVX)
Advisor
Shares (Not Available for Sale) |
The
Securities and Exchange Commission has not approved or disapproved any Fund’s
shares or determined whether this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
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Summary
Section |
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This
important section summarizes the Funds’ objectives, strategies, fees,
risks, past performance, portfolio turnover, portfolio manager, your
account and other information. |
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| Brown
Advisory Tax-Exempt Sustainable Bond Fund |
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Details
About the Funds’ Investment Strategies |
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This
section provides details about the Funds’ investment strategies. |
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| Brown
Advisory Emerging Markets Select Fund |
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Principal
Investment Risks |
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This
section provides details about the Funds’ principal investment
risks. |
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Management |
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Review
this section for information about Brown Advisory LLC (the “Adviser”) and
the people who manage the Funds. |
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Choosing
Your Share Class |
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This
section explains the differences between each class of shares and the
applicable fees. |
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Your
Account |
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This
section explains how shares are valued and how you can purchase and sell
Fund shares. |
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Distributions
and Taxes |
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This
section provides details about dividends, distributions and
taxes. |
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Financial
Highlights |
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Financial
Highlights |
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Review
this section for details on selected financial statements of the
Funds. |
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(This
Page Intentionally Left Blank.)
Brown
Advisory Growth Equity Fund
Institutional
Shares (BAFGX)
Investor
Shares (BIAGX)
Advisor
Shares (BAGAX)
Investment Objective
The Brown Advisory Growth Equity Fund
(the “Fund”) seeks to achieve capital appreciation by primarily investing in
equity securities.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
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Management
Fees |
0.57% |
0.57% |
0.57% |
Distribution
and Service (12b-1) Fees |
0.00% |
0.00% |
0.25% |
Shareholder
Servicing Fees |
0.00% |
0.15% |
0.15% |
Other
Expenses |
0.09% |
0.09% |
0.09% |
Total
Annual Fund Operating Expenses |
0.66% |
0.81% |
1.06% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$67 |
$211 |
$368 |
$822 |
Investor
Shares |
$83 |
$259 |
$450 |
$1,002 |
Advisor
Shares |
$108 |
$337 |
$585 |
$1,294 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 21% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Growth Equity Fund |
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Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
domestic companies. The Fund invests primarily in securities of
medium and large market capitalization companies that the Adviser believes have
exhibited an above average rate of earnings growth and that have prospects for
above average, sustainable growth in the future. Medium and large
market capitalization companies are, according to the Adviser, those companies
with market capitalizations generally greater than $2 billion at the time
of purchase. The Fund may also invest in companies that do not
exhibit particularly strong earnings histories but have other attributes that
may contribute to accelerated growth in the foreseeable
future. Equity securities include domestic common and preferred
stock, convertible debt securities, American Depositary Receipts (“ADRs”), real
estate investment trusts (“REITs”) and exchange traded funds
(“ETFs”). The Fund may also invest in private placements in these
types of securities. The Fund invests primarily in ETFs that have an
investment objective similar to the Fund’s or that otherwise are permitted
investments with the Fund’s investment policies described
herein. ADRs are equity securities traded on U.S. securities
exchanges, which are generally issued by banks or trust companies to evidence
ownership of foreign equity securities. The Fund may invest up to 15%
of its net assets in foreign securities, including in emerging markets.
The
Adviser may sell a security or reduce its position if:
•The
investment thesis is violated;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the long-term expectation.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their
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Summary
Section – Brown Advisory Growth Equity Fund |
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market
prices tend to reflect speculative expectations. Low trading volumes may result
in a lack of liquidity and in extreme price volatility. Investors should be able
to tolerate sudden, sometimes substantial, fluctuations in the value of their
investments. Emerging market countries may have policies that restrict
investment by foreigners or that prevent foreign investors from withdrawing
their money at will.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Growth
Company Risk.
Securities of growth companies can be more sensitive to the company’s earnings
and more volatile than the market in general.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Medium
Capitalization Company Risk.
Securities of medium sized companies may be more volatile and more difficult to
liquidate during market down turns than securities of larger companies.
Additionally the price of medium-sized companies may decline more in response to
selling pressures.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks
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Summary
Section – Brown Advisory Growth Equity Fund |
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associated with extended vacancies of
properties or defaults by borrowers or tenants, particularly during periods of
disruptions to business operations or an economic downturn.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares, Advisor Shares and Institutional Shares for
1 year, 5 year, and 10 year periods compare to the Fund's primary broad-based
market index and a secondary index provided to offer a broader market
perspective.
The
Fund is the successor to the investment performance of the Brown Advisory Growth
Equity Fund (the “Predecessor Fund”) as a result of the reorganization of the
Predecessor Fund into the Fund on October 19, 2012. Accordingly, the performance
information shown below for periods prior to October 19, 2012 is that of the
Predecessor Fund. The Predecessor Fund was also advised by the Adviser and had
the same investment objective and strategies as the Fund.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/growth-equity-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Growth Equity Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-37.50%. During the periods shown in the chart, the
highest quarterly return
was 26.56% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-14.41% (for the quarter ended December 31,
2018).
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Summary
Section – Brown Advisory Growth Equity Fund |
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Brown
Advisory Growth Equity Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
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–Return
Before Taxes |
18.89% |
24.81% |
17.34% |
–Return
After Taxes on Distributions |
15.54% |
22.41% |
15.70% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
13.45% |
19.83% |
14.23% |
Advisor
Shares |
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–Return
Before Taxes |
18.58% |
24.50% |
17.05% |
Institutional
Shares |
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–Return
Before Taxes |
19.05% |
24.98% |
17.51% |
Russell 1000®
Growth Index (reflects
no deduction for fees, expenses and taxes) |
27.60% |
25.32% |
19.79% |
S&P 500®
Index (reflects no deduction for
fees, expenses and taxes) |
28.71% |
18.47% |
16.55% |
NOTE: The Growth Equity Fund
offers three classes of shares. Investor Shares commenced operations on
June 28, 1999 as part of the Predecessor Fund, Advisor Shares
commenced operations on May 18, 2006 as part of the Predecessor Fund, and
Institutional Shares commenced operations on October 19, 2012. Performance
shown prior to inception of the Institutional Shares is based on the performance
of Investor Shares, adjusted for the lower expenses applicable to Institutional
Shares. Prior to July 1, 2011, the Advisor Shares were known as
A Shares. Prior to October 19, 2012, Investor Shares were known as
Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
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Investment
Adviser |
Portfolio
Manager |
Brown
Advisory LLC |
Kenneth
M. Stuzin, CFA, has served as portfolio manager of the Fund
since 1999. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
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–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
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–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
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–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
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Summary
Section – Brown Advisory Growth Equity Fund |
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The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Flexible Equity
Fund
Institutional
Shares (BAFFX)
Investor
Shares (BIAFX)
Advisor
Shares (BAFAX)
Investment Objective
The Brown Advisory Flexible
Equity Fund (the “Fund”) seeks to achieve long-term growth of
capital.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.43% |
0.43% |
0.43% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.10% |
0.10% |
0.10% |
Total
Annual Fund Operating Expenses |
0.53% |
0.68% |
0.93% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$54 |
$170 |
$296 |
$665 |
Investor
Shares |
$69 |
$218 |
$379 |
$847 |
Advisor
Shares |
$95 |
$296 |
$515 |
$1,143 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 10% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Flexible Equity Fund |
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Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in a diversified portfolio
of equity securities. The Fund invests primarily in securities of medium and
large market capitalization companies that the Adviser believes have strong, or
improving, long-term business characteristics and share prices that do not
reflect these favorable fundamental attributes. Medium and large market
capitalization companies are, according to the Adviser, those companies with
market capitalizations generally greater than $2 billion at the time of
purchase. Equity securities include domestic and foreign common and preferred
stock, convertible debt securities, American Depositary Receipts (“ADRs”), real
estate investment trusts (“REITs”), exchange traded funds (“ETFs”), and other
types of investment companies. The Fund may also invest in private placements in
these types of securities. The Fund may invest in ETFs and other types of
investment companies that have an investment objective similar to the Fund’s or
that otherwise are permitted investments with the Fund’s investment policies
described herein. ADRs are equity securities traded on U.S. securities
exchanges, which are generally issued by banks or trust companies to evidence
ownership of foreign equity securities. The Fund may invest up to 15% of its net
assets in foreign securities, including emerging markets.
The
Adviser follows an investment philosophy referred to as “flexible equity.”
Flexibility allows the Adviser to look at many types of opportunities expanding
the bargain hunting concepts of value investing to a broad range of
opportunities. The Adviser emphasizes individual security selection based on
identifying long-term attractive businesses, i.e., those with significant
desirable traits and few or no undesirable traits, when they are available at
bargain prices. Desirable traits include favorable business economics supported
by enduring competitive advantages, capable and trustworthy management, positive
industry dynamics and sensible capital allocation. Bargain prices most often
arise
in the stock market due to short-term investor perceptions or temporary business
challenges creating undue price declines and price recovery potential, or
unrecognized favorable prospects within a business or changes for the better in
company management or industry conditions.
With
respect to 20% of its assets, the Fund may invest in investment grade securities
or unrated securities determined by the Adviser to be of comparable
quality.
The
sale of a company’s equity securities may arise if the securities’ market price
exceeds the Adviser’s estimate of intrinsic value, if the ratio of risk and
rewards of continuing to own the company’s equity is no longer attractive, or if
the Adviser needs to raise cash to purchase a more attractive investment
opportunity, satisfy net redemptions, or other purposes.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
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Summary
Section – Brown Advisory Flexible Equity Fund |
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•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to changes in the credit ratings of the
Fund’s portfolio of debt securities. Moreover, rising interest rates or lack of
market participants may lead to decreased liquidity in the bond and loan
markets, making it more difficult for the Fund to sell its holdings at a time
when the Fund’s manager might wish to sell. Lower rated securities (“junk
bonds”) are generally subject to greater risk of loss of your money than higher
rated securities. Issuers may (increase) decrease prepayments of principal when
interest rates (fall) increase, affecting the maturity of the debt security and
causing the value of the security to decline.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their investments. Emerging market countries may have policies
that restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk. The
Fund may invest in foreign securities and is subject to risks associated with
foreign markets, such as adverse political, social and economic developments
such as war, political instability, hyperinflation, currency devaluations, and
overdependence on particular industries; accounting standards or governmental
supervision that is not consistent with that to which U.S. companies are
subject; limited information about foreign companies; less liquidity and higher
volatility in foreign markets and less protection to the shareholders in foreign
markets. In addition, investments in certain foreign markets that have
historically been considered stable may become more volatile and subject to
increased risk due to ongoing developments and changing conditions in such
markets. The value of the Fund’s foreign investments may also be affected by
foreign tax laws, special U.S. tax considerations and restrictions on receiving
the investment proceeds from a foreign country. Dividends or interest on, or
proceeds from the sale or disposition of, foreign securities may be subject to
non-U.S. withholding or other taxes. Economic sanctions could, among other
things, effectively restrict or eliminate the Fund’s ability to purchase or sell
securities or groups of securities for a substantial period of time, and may
make the Fund’s investments in such securities harder to
value.
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Summary
Section – Brown Advisory Flexible Equity Fund |
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•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller competitors.
Also, large capitalization companies are sometimes unable to attain the high
growth rates of successful, smaller companies, especially during extended
periods of economic expansion.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Medium
Capitalization Company Risk.
Securities of medium sized companies may be more volatile and more difficult to
liquidate during market down turns than securities of larger companies.
Additionally the price of medium-sized companies may decline more in response to
selling pressures.
•Non-Investment
Grade ("Junk Bond") Securities Risk. Securities
rated below investment grade, i.e., Ba
or BB and lower (“junk bonds”), are subject to greater risks of loss of your
money than higher rated securities. Compared with issuers of investment grade
fixed-income securities, junk bonds are more likely to encounter financial
difficulties and to be materially affected by these difficulties.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Smaller
Capitalization Company Risk.
Securities of smaller sized companies may be more volatile and more difficult to
liquidate during market down turns than securities of larger companies.
Additionally the price of smaller companies may decline more in response to
selling pressures.
•Value
Company Risk.
The stock of value companies can continue to be undervalued for long periods of
time and not realize its expected value. The value of the Fund may decrease in
response to the activities and financial prospects of an individual
company.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares, Advisor Shares and Institutional Shares for 1
year, 5 year, and 10 year periods compare to a broad-based market index.
The
Fund is the successor to the investment performance of the Brown Advisory
Flexible Value Fund (the “Predecessor Fund”) as a result of the reorganization
of the Predecessor Fund into the Fund on October 19, 2012. Accordingly, the
performance information shown below for periods prior to October 19, 2012 is
that of the Predecessor Fund. The Predecessor Fund was also advised by the
Adviser and had the same investment objective and strategies as the Fund.
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Summary
Section – Brown Advisory Flexible Equity Fund |
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Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/flexible-equity-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Flexible Equity Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-26.40%. During the periods shown in the chart, the
highest quarterly return
was 23.97% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-21.28% (for the quarter ended March 31,
2020).
Brown
Advisory Flexible Equity Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
|
| |
– Return Before
Taxes |
24.99% |
19.45% |
16.63% |
– Return After Taxes on
Distributions |
23.84% |
18.55% |
16.12% |
– Return After Taxes on Distributions
and Sale of Fund Shares |
15.50% |
15.66% |
14.08% |
Advisor
Shares |
|
| |
– Return Before
Taxes |
24.64% |
19.14% |
16.35% |
Institutional
Shares |
|
| |
– Return Before
Taxes |
25.15% |
19.62% |
16.81% |
S&P 500®
Index
(reflects no deduction for
fees, expenses and taxes) |
28.71% |
18.47% |
16.55% |
NOTE: The Flexible Equity Fund
offers three classes of shares. Investor Shares commenced operations on November
30, 2006 as part of the Predecessor Fund, Advisor Shares commenced
operations on January 24, 2007 as part of the Predecessor Fund, and
Institutional Shares commenced operations on October 19, 2012. Performance
shown prior to inception of the Institutional Shares is based on the performance
of Investor Shares, adjusted for the lower expenses applicable to Institutional
Shares. Prior to July 1, 2011, the Advisor Shares were known as
A Shares. Prior to October 19, 2012, Investor Shares were known as
Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
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Summary
Section – Brown Advisory Flexible Equity Fund |
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Management
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Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Maneesh
Bajaj, CFA, has served as the portfolio manager of the Fund since
2017. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisoryfunds.com/client-login. Investors who wish to purchase,
exchange or redeem Fund shares through a broker-dealer should contact the
broker-dealer directly. The minimum initial and subsequent investment amounts
for various types of accounts are shown below.
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| |
Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Equity Income
Fund
Institutional
Shares (BAFDX)
Investor
Shares (BIADX)
Advisor
Shares (BADAX)
Investment Objective
The Brown Advisory Equity
Income Fund (the “Fund”) seeks to provide current dividend yield and dividend
growth.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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| |
Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.60% |
0.60% |
0.60% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.19% |
0.19% |
0.19% |
Total
Annual Fund Operating Expenses |
0.79% |
0.94% |
1.19% |
Fee
Waiver and/or Expense Reimbursement(1) |
-0.03% |
-0.03% |
-0.03% |
Total
Annual Fund Operating Expenses After Fee Waiver
and/or
Expense Reimbursement(1) |
0.76% |
0.91% |
1.16% |
(1)Brown Advisory LLC (the
"Adviser") has contractually agreed to waive its fees and/or reimburse certain
expenses (exclusive of any front-end or contingent deferred sales loads, taxes,
interest, brokerage commissions, acquired fund fees and expenses, expenses
incurred in connection with any merger or reorganization and extraordinary
expenses) in order to limit the Total Annual Fund Operating Expenses after Fee
Waiver and/or Expense Reimbursement for Institutional Shares, Investor Shares
and Advisor Shares to 0.76%, 0.91% and 1.16%, respectively, of the Fund’s
average daily net assets through October 31,
2023. The Fund may have Total Annual Fund Operating Expenses
after Fee Waiver and/or Expense Reimbursement higher than these expense caps as
a result of any acquired fund fees and expenses or other expenses that are
excluded from the calculation. The contractual waivers and expense
reimbursements may be changed or eliminated at any time by the Board of
Trustees, on behalf of the Fund, upon 60 days written notice to the Adviser. The
contractual waivers and expense reimbursements may not be terminated by the
Adviser without the consent of the Board of Trustees. The Adviser may recoup any
waived amount from the Fund pursuant to this agreement if such reimbursement
does not cause the Fund to exceed existing expense limitations or the
limitations in place at the time the reduction was originally made and the
reimbursement is made within three years after the date on which the Adviser
incurred the expense.
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the same
(taking into account the contractual expense limitation being in effect for the
period through October 31, 2023). Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| |
Summary
Section – Brown Advisory Equity Income Fund |
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|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$78 |
$249 |
$436 |
$975 |
Investor
Shares |
$93 |
$297 |
$517 |
$1,152 |
Advisor
Shares |
$118 |
$375 |
$651 |
$1,441 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions and dealer mark-ups, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the Example, affect the Fund’s performance.
During the most recent fiscal year, the portfolio turnover rate for the Fund was
11% of the average value of its
portfolio.
Principal Investment Strategies
Under
normal conditions, the Adviser seeks to achieve the Fund’s investment objective
by investing at least 80% of the value of its net assets (plus any borrowings
for investment purposes) in a diversified portfolio of dividend paying equity
securities. The Adviser may invest in securities of companies of
various market capitalizations but will focus on medium and large capitalization
companies. Medium and large market capitalization companies are,
according to the Adviser, those companies with market capitalizations of greater
than $2 billion at the time of initial investment. Equity
securities include domestic and foreign common and preferred stock, convertible
debt securities, American Depositary Receipts (“ADRs”), Master Limited
Partnerships (“MLPs”), real estate investment trusts (“REITs”) and exchange
traded funds (“ETFs”), and the Fund may also invest in private placements in
these types of securities. To the extent the Fund invests in MLPs,
its investments will be restricted to holding interests in limited partners of
such investments. To the extent the Fund invests in ETFs, it will do
so primarily in ETFs that have an investment objective similar to the
Fund’s
or that otherwise are permitted investments with the Fund’s investment policies
described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may also invest
in debt-securities, including lower-rated debt-securities (“junk bonds”) and
foreign securities including depositary receipts.
As
the Adviser seeks to reduce the risk of permanent loss of capital, the Adviser
follows an investment strategy referred to as “equity income”, emphasizing
current income and a conservative stock portfolio. The equity income
strategy seeks to generally maintain a portfolio yield that is greater than the
S&P 500®
Index. Within that context, the balance between current income and
prospective growth of dividends is driven by fundamental stock
selection.
The
Fund may invest up to 25% of its net assets in publicly traded MLPs. MLPs are
businesses organized as limited partnerships that trade their proportionate
shares of the partnership (units) on a public exchange. MLPs are required to pay
out most or all of their earnings in distributions.
With
respect to 20% of its assets, the Fund may invest in (1) investment grade
and non-investment grade debt securities (i.e., junk
bonds), or (2) unrated debt securities determined by the Adviser to be of
comparable quality.
The
Adviser may sell a stock if the stock has reached a price whereby its
risk/reward characteristics are not as favorable, the company’s fundamentals
have deteriorated so that the original investment thesis for holding the stock
no longer holds or if a better opportunity has been identified.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not
a deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other
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Summary
Section – Brown Advisory Equity Income Fund |
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government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to changes in the credit ratings of the
Fund’s portfolio of debt securities. Moreover, rising interest rates or lack of
market participants may lead to decreased liquidity in the bond and loan
markets, making it more difficult for the Fund to sell its holdings at a time
when the Fund’s manager might wish to sell. Lower rated securities (“junk
bonds”) are generally subject to greater risk of loss of your money than higher
rated securities. Issuers may (increase) decrease prepayments of principal when
interest rates (fall) increase, affecting the maturity of the debt security and
causing the value of the security to decline.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s net asset value (“NAV”) and investment return
will fluctuate based upon changes in the value of its portfolio securities.
Markets may, in response to economic or market developments, governmental
actions or intervention, natural disasters, epidemics, pandemics or other
external factors, experience periods of high volatility and reduced liquidity.
During those periods, the Fund may experience high levels of shareholder
redemptions, and may have to sell securities at times when the Fund would
otherwise not do so, potentially at unfavorable prices. Certain securities,
particularly fixed income securities, may be difficult to value during such
periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Master
Limited Partnership Risk.
Investing in Master Limited Partnerships (“MLPs”) entails risk related to
fluctuations in energy prices, decreases in supply of or demand for energy
commodities, unique tax consequences due to the partnership structure and
various other risks.
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Summary
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•Medium
Capitalization Company Risk.
Securities of medium-sized companies held by the Fund may be more volatile and
more difficult to liquidate during market down turns than securities of larger
companies. Additionally the price of medium-sized companies may decline more in
response to selling pressures.
•Non-Investment
Grade (“Junk Bond”) Securities Risk. Securities
rated below investment grade, i.e., Ba
or BB and lower (“junk bonds”), are subject to greater risks of loss of your
money than higher rated securities. Compared with issuers of investment grade
fixed-income securities, junk bonds are more likely to encounter financial
difficulties and to be materially affected by these difficulties.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Value
Company Risk. The stock of value companies can continue
to be undervalued for long periods of time and not realize its expected value.
The value of the Fund may decrease in response to the activities and financial
prospects of an individual company.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares, Advisor Shares and Institutional Shares for the
1 year, 5 year, and 10 year periods compare to a broad-based market index.
The
Fund is the successor to the investment performance of the Brown Advisory Equity
Income Fund (the “Predecessor Fund”) as a result of the reorganization of the
Predecessor Fund into the Fund on October 19, 2012. Accordingly, the performance
information shown below for periods prior to October 19, 2012 is that of the
Predecessor Fund. The Predecessor Fund was also advised by the Adviser and had
the same investment objective and strategies as the Fund.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/equity-income-fund
or by calling 800‑540‑6807 (toll
free).
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Brown
Advisory Equity Income Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-20.48%. During the period shown in the chart, the
highest quarterly return
was 17.23% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-21.74% (for the quarter ended March 31,
2020).
Brown
Advisory Equity Income Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
|
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– Return Before
Taxes |
26.46% |
14.73% |
12.43% |
– Return After Taxes on
Distributions |
23.56% |
12.39% |
10.60% |
– Return After Taxes on Distributions
and Sale of Fund Shares |
17.59% |
11.33% |
9.80% |
Advisor
Shares |
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– Return Before
Taxes |
26.09% |
14.43% |
12.15% |
Institutional
Shares |
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– Return Before
Taxes |
26.64% |
14.90% |
12.60% |
S&P 500®
Index
(reflects no deduction for
fees, expenses and taxes) |
28.71% |
18.47% |
16.55% |
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NOTE:
The Equity Income Fund offers three classes of shares. Investor Shares and
Advisor Shares each commenced operations on December 29, 2011 as part of the
Predecessor Fund, and Institutional Shares commenced operations on October 19,
2012. Performance
shown prior to inception of the Institutional Shares is based on the performance
of Investor Shares, adjusted for the lower expenses applicable to Institutional
Shares. Prior to October 19, 2012, Investor Shares were
known as Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
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Investment
Adviser |
Portfolio
Manager |
Brown
Advisory LLC |
Brian
E. Graney, CFA, has served as the portfolio manager of the Fund since its
inception in 2011. |
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Summary
Section – Brown Advisory Equity Income Fund |
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Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
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–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Sustainable Growth
Fund
Institutional
Shares (BAFWX)
Investor
Shares (BIAWX)
Advisor
Shares (BAWAX)
Investment Objective
The Brown Advisory Sustainable
Growth Fund (the “Fund”) seeks to achieve capital appreciation.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.53% |
0.53% |
0.53% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.10% |
0.10% |
0.10% |
Total
Annual Fund Operating Expenses |
0.63% |
0.78% |
1.03% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$64 |
$202 |
$351 |
$786 |
Investor
Shares |
$80 |
$249 |
$433 |
$966 |
Advisor
Shares |
$105 |
$328 |
$569 |
$1,259 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 19% of the average value of its
portfolio.
Principal Investment
Strategies
The Brown Advisory Sustainable
Growth Fund seeks to achieve capital appreciation. To achieve its objective, the
Fund invests at least 80% of the value of its net assets (plus any borrowings
for investment purposes) in equity securities of sustainable domestic companies.
The Fund invests primarily in the securities of medium and large capitalization
companies that Brown Advisory LLC
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Summary
Section – Brown Advisory Sustainable Growth Fund |
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(the
“Adviser”) believes (1) have the fundamental strengths (strong financials and
business models) to outperform their peers and deliver above-average earnings
growth over a market cycle, (2) effectively implement Sustainable Business
Advantages (described below), and (3) have attractive valuations.
The
investment process starts with fundamentals. The Adviser seeks companies with
strong business models and prospects for growth, strong cash flow generation,
and a solid track record of execution, among other qualities. In addition, the
Adviser views Environmental, Social and Governance (“ESG”) factors as relevant
to fundamentals and seeks to understand their impact on companies in which the
Fund may invest. The Adviser leverages proprietary ESG research that seeks to
understand ESG risk management practices and sustainable opportunities for every
security added to the portfolio. However, at the Adviser’s discretion, the Fund
is permitted to make an investment without a written ESG assessment on file at
the time of purchase, as long as the Adviser believes the security meets the
Fund’s sustainability criteria.
As
part of assessing sustainable opportunities, the Adviser seeks to identify
sustainable companies which are defined as possessing at least one of the
following:
(1)
Companies whose internal sustainability strategies lead to one or more
Sustainable Business Advantages (such as revenue growth, cost improvements, or
enhanced franchise value), or that lead to reduced risk to a company’s prospects
for growth;
(2)
Companies whose products have a competitive advantage as a result of
sustainability drivers such as resource efficient design or manufacturing;
or
(3)
Companies whose products or services offer solutions to long-term sustainability
challenges.
Sustainable
companies, by their nature, seek to manage risks, not only related to negative
environmental and social outcomes, but also ones that might materially impair
their financial results. The Fund expects to have low to no exposure to
companies that have received international sanctions, derive significant direct
revenue from gambling or the production of alcohol, tobacco, weapons, or fossil
fuel extraction. However, the Fund may hold companies which the Adviser believes
are indirectly or insignificantly exposed to these business
activities.
The
Adviser pursues active, strategic engagement with companies and other
stakeholders in an effort to enhance due diligence and monitor ESG risks and
sustainable opportunities that may impact the investment thesis. The Adviser’s
ESG research team monitors the companies in the portfolio on an on-going basis,
and additional monitoring is also undertaken through a quarterly review of
certain ESG characteristics of the Fund.
Additionally,
while driving impact is not an input to the investment thesis, the Adviser often
finds an overlap between Sustainable Business Advantage with positive ESG
outcomes.
Due
diligence on a company’s financial fundamentals and Sustainable Business
Advantages is conducted collaboratively among the Fund’s portfolio managers, the
Adviser’s ESG research team, and fundamental analysts. Finally, the Adviser uses
scenario analyses to assess the company’s valuation and potential for
appreciation or downside risk.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to ESG-related data from third-party providers. The Adviser does not
solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser. The Adviser is permitted to invest in
a security if it determines the security has favorable sustainable opportunities
and an acceptable ESG risk profile notwithstanding contrary third party data or
third party recommendations. Investing on the basis of ESG criteria is
qualitative and subjective by nature, and there can be no assurance that the
process utilized by the Fund’s vendors or any judgment exercised by the Adviser
will reflect the beliefs or values of any particular investor. The data
informing this process is derived from a variety of sources, including the
companies themselves and third party sources. The Fund’s vendors provide
ESG-related data, research and rating services. The ESG-related data, research
and rating services include information related to potentially controversial
business exposure, ESG metrics such as emissions and diversity data and
controversy reporting. The Adviser believes its process is reasonably designed,
although data and qualitative information are inherently subject to
interpretation, restatement, delay and omission outside the Adviser’s control.
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Summary
Section – Brown Advisory Sustainable Growth Fund |
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The
Adviser considers each proxy voting proposal related to holdings in the Fund on
its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
Medium
and large capitalization companies are, according to the Adviser, those
companies with market capitalizations generally greater than $2 billion at time
of purchase. The Fund may also invest a portion of the portfolio in equity
securities of small market capitalization companies. The equity securities in
which the Fund principally invests are common stocks. Furthermore, the Fund may
invest up to 15% of assets in foreign securities (including American Depositary
Receipts (“ADRs”)), which may include emerging markets securities. ADRs may be
either sponsored or unsponsored. The Fund also may invest in real estate
investment trusts (“REITs”).
The
Adviser may sell a security or reduce its position for a number of reasons,
including:
•The
fundamental investment or sustainability thesis is violated;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the Adviser’s long-term
expectations.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their
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Summary
Section – Brown Advisory Sustainable Growth Fund |
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investments.
Emerging market countries may have policies that restrict investment by
foreigners or that prevent foreign investors from withdrawing their money at
will.
•Environmental,
Social and Governance Policy Risk.
The
risk that because the Fund’s ESG criteria exclude securities of certain issuers
for nonfinancial reasons, the Fund may forgo some market opportunities available
to funds that do not use these criteria.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Growth
Company Risk. Securities
of growth companies can be more sensitive to the company’s earnings and more
volatile than the market in general.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Smaller
and Medium Capitalization Company Risk.
Securities of smaller and medium sized companies may be more volatile and more
difficult to liquidate during market down turns than securities of larger
companies. Additionally the price of smaller companies may decline more in
response to selling pressures.
•Sustainability
Policy Risk. The
Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus.
Performance
Information
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Summary
Section – Brown Advisory Sustainable Growth Fund |
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The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares, Advisor Shares and Institutional Shares for the
1 year, 5 year, and since inception periods compare to a broad-based market
index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/sustainable-growth-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Sustainable Growth Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-32.81%. During the period shown in the chart, the
highest quarterly return
was 28.71% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-12.32% (for the quarter ended December 31,
2018).
Brown
Advisory Sustainable Growth Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
Since
Inception (6/29/12) |
Investor
Shares |
|
| |
–Return
Before Taxes |
29.88% |
26.58% |
20.34% |
–Return
After Taxes on Distributions |
29.30% |
26.11% |
19.83% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
18.08% |
21.92% |
17.31% |
Advisor
Shares |
|
| |
–Return
Before Taxes |
29.55% |
26.27% |
20.05% |
Institutional
Shares |
|
| |
–Return
Before Taxes |
30.07% |
26.77% |
20.53% |
Russell
1000®
Growth
Index (reflects no deduction for
fees, expenses and taxes) |
27.60% |
25.32% |
19.70% |
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
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Investment
Advisor |
Portfolio
Managers |
Brown
Advisory LLC |
Karina
Funk, CFA, and David Powell, CFA, have served as portfolio managers since
the Fund’s inception in 2012. |
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Summary
Section – Brown Advisory Sustainable Growth Fund |
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Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Mid-Cap Growth
Fund
Institutional
Shares (BAFMX)
Investor
Shares (BMIDX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Mid-Cap
Growth Fund (the “Fund”) seeks to achieve long-term capital
appreciation.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.65% |
0.65% |
0.65% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.14% |
0.14% |
0.14% |
Total
Annual Fund Operating Expenses |
0.79% |
0.94% |
1.19% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$81 |
$252 |
$439 |
$978 |
Investor
Shares |
$96 |
$300 |
$520 |
$1,155 |
Advisor
Shares |
$121 |
$378 |
$654 |
$1,443 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 48% of the average value of its
portfolio.
Principal Investment Strategies
Under normal conditions, the
Adviser seeks to achieve the Fund’s investment objective by investing at least
80% of the value of its net assets (plus any borrowings for investment purposes)
in equity securities of mid-cap domestic companies. The Adviser
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Summary
Section – Brown Advisory Mid-Cap Growth Fund |
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considers
mid-cap companies to be those with market capitalizations that fall within the
range of the market capitalizations of companies in the Russell
Midcap®
Growth Index. As of September 30, 2022, the range was from $271 million to $46.7
billion dollars. Market capitalization is measured at the time of
purchase. The Fund invests primarily in companies the Adviser believes have
above average growth prospects.
The
Adviser conducts an in-depth analysis of a company’s fundamentals to identify
those companies it believes have the potential to compound earnings at an
above-average rate for an extended period of time. The Fund invests primarily in
companies the Adviser believes possess “3G” criteria: durable growth, sound
governance, and scalable go-to-market strategies. In considering
durable growth, the Adviser assesses whether there is a large and growing
market, whether the company is a market leader and/or is gaining market share,
and whether a company has a differentiated product offering. The Adviser
examines a company’s governance characteristics including the strength of
management, whether there is a shareholder-friendly board, and whether there is
an aligned incentive system between management and shareholders. Finally, the
Adviser evaluates whether a company’s go-to-market strategies will result in
incremental revenue, high and/or rising margins, and the efficient use of
capital.
Equity
securities include domestic common and preferred stock, convertible debt
securities, American Depositary Receipts (“ADRs”), real estate investment trusts
(“REITs”), exchange traded funds (“ETFs”), and other types of investment
companies. The Fund may also invest in private placements in these
types of securities. The Fund may invest in ETFs and other types of
investment companies that have an investment objective similar to the Fund’s or
that otherwise are permitted investments with the Fund’s investment policies
described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may invest
up to 20% of its net assets in foreign securities.
The
Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the long-term expectation.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
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Summary
Section – Brown Advisory Mid-Cap Growth Fund |
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•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Growth
Company Risk.
Securities of growth companies can be more sensitive to the company’s earnings
and more volatile than the market in general.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Medium
Capitalization Company Risk. Securities
of medium capitalization companies may be more volatile and more difficult to
liquidate during market down turns than securities of larger companies.
Additionally the price of medium-sized companies may decline more in response to
selling pressures.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks
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Summary
Section – Brown Advisory Mid-Cap Growth Fund |
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associated with extended vacancies of
properties or defaults by borrowers or tenants, particularly during periods of
disruptions to business operations or an economic downturn.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows changes in the Fund’s performance of
Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares and Institutional Shares for the 1 year and since
inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/mid-cap-growth-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Mid-Cap Growth Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-31.77%. During the period shown in the chart, the
highest quarterly return
was 29.58% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-22.60% (for the quarter ended March 31,
2020).
Brown
Advisory Mid-Cap Growth Fund
Average
Annual Total Returns
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| |
For
the periods ended December 31, 2021 |
1
Year |
Since
Inception (10/2/17) |
Investor
Shares |
| |
–Return
Before Taxes |
6.34% |
17.21% |
–Return
After Taxes on Distributions |
3.20% |
16.26% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
4.59% |
13.51% |
Institutional
Shares |
| |
–Return
Before Taxes |
6.48% |
17.39% |
Russell
Midcap®
Growth Index (reflects no deduction for
fees, expenses and taxes) |
12.73% |
19.03% |
NOTE: The
Mid-Cap Growth Fund offers two classes of shares. Investor Shares
commenced operations on October 2, 2017, and Institutional Shares commenced
operations on July 2, 2018. Performance
shown prior to inception of the Institutional Shares is based on the
performance of Investor Shares, adjusted for the lower expenses applicable to
Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. In
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Summary
Section – Brown Advisory Mid-Cap Growth Fund |
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certain cases, the figure representing
“Return after Taxes on Distributions and Sale of Fund Shares” may be higher than
the other return figures for the same period, since a higher after-tax return
results when a capital loss occurs upon redemption and provides an assumed tax
deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Institutional Shares will
vary.
Management
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| |
Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Christopher
A. Berrier, and George Sakellaris, CFA, have served as portfolio managers
of the Fund since its inception in 2017. Emmy Wachtmeister, CFA, has
served as an associate portfolio manager to the Fund since
2021. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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|
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| |
Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Small‑Cap Growth
Fund
Institutional
Shares (BAFSX)
Investor
Shares (BIASX)
Advisor
Shares (BASAX)
Investment Objective
The Brown Advisory Small-Cap
Growth Fund (the “Fund”) seeks to achieve long-term capital appreciation by
primarily investing in equity securities.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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| |
Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.85% |
0.85% |
0.85% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.10% |
0.10% |
0.10% |
Acquired
Fund Fees and Expenses(1) |
0.01% |
0.01% |
0.01% |
Total
Annual Fund Operating Expenses |
0.96% |
1.11% |
1.36% |
(1)Acquired Fund Fees and
Expenses are indirect fees and expenses that the Fund incurs from investing in
the shares of other mutual funds, including money market funds and exchange
traded funds. Please note that the amount of Total Annual Fund Operating
Expenses shown in the above table will differ from the “Financial Highlights”
section of the Prospectus, which reflects the operating expenses of the Fund and
does not include indirect expenses such as Acquired Fund Fees and
Expenses.
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$98 |
$306 |
$531 |
$1,178 |
Investor
Shares |
$113 |
$353 |
$612 |
$1,352 |
Advisor
Shares |
$138 |
$431 |
$745 |
$1,635 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s
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Summary
Section – Brown Advisory Small-Cap Growth Fund |
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performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 27% of the average value of its
portfolio.
Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
small domestic companies. Small companies, according to the Adviser,
are companies whose market capitalizations are generally less than $6 billion or
the maximum capitalization of companies in the Russell 2000®
Growth Index (which was approximately $13.6 billion as of September 30, 2022),
whichever is greater, at the time of purchase. The Fund invests primarily in
companies the Adviser believes have above average growth
prospects. The Adviser conducts an in-depth analysis of a company’s
fundamentals to identify those companies it believes have the potential for
long-term earnings growth that is not fully reflected in the security’s price.
Equity
securities include domestic common and preferred stock, convertible debt
securities, American Depositary Receipts (“ADRs”), real estate investment trusts
(“REITs”) and exchange traded funds (“ETFs”). The Fund may also
invest in private placements in these types of securities. The Fund
invests primarily in ETFs that have an investment objective similar to the
Fund’s or that otherwise are permitted investments with the Fund’s investment
policies described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may invest
up to 20% of its net assets in foreign securities, including in emerging
markets.
The
Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the long-term expectation.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped
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Summary
Section – Brown Advisory Small-Cap Growth Fund |
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securities
markets and legal systems, potentially high inflation rates, and the influence
of foreign governments over the private sector. In addition, companies in
emerging market countries may not be subject to accounting, auditing, financial
reporting and recordkeeping requirements that are as robust as those in more
developed countries, and therefore, material information about a company may be
unavailable or unreliable, and U.S. regulators may be unable to enforce a
company’s regulatory obligations. Emerging markets countries are often
particularly sensitive to market movements because their market prices tend to
reflect speculative expectations. Low trading volumes may result in a lack of
liquidity and in extreme price volatility. Investors should be able to tolerate
sudden, sometimes substantial, fluctuations in the value of their investments.
Emerging market countries may have policies that restrict investment by
foreigners or that prevent foreign investors from withdrawing their money at
will.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Growth
Company Risk.
Securities of growth companies can be more sensitive to the company’s earnings
and more volatile than the market in general.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
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Summary
Section – Brown Advisory Small-Cap Growth Fund |
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•Smaller
Company Risk. Securities
of companies smaller than larger companies may be more volatile and as a result,
the price of smaller companies may decline more in response to selling
pressure.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares, Advisor Shares and Institutional Shares for 1 year,
5 year, and 10 year periods compare to a broad-based market index.
The
Fund is the successor to the investment performance of the Brown Advisory
Small-Cap Growth Fund (the “Predecessor Fund”) as a result of the reorganization
of the Predecessor Fund into the Fund on October 19, 2012. Accordingly, the
performance information shown below for periods prior to October 19, 2012 is
that of the Predecessor Fund. The Predecessor Fund was also advised by the
Adviser and had the same investment objective and strategies as the Fund.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/small-cap-growth-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Small-Cap Growth Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-24.58%. During the periods shown in the chart, the
highest quarterly return
was 30.56% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-23.30% (for the quarter ended March 31,
2020).
Brown
Advisory Small-Cap Growth Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
|
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–Return
Before Taxes |
7.44% |
16.14% |
14.94% |
–Return
After Taxes on Distributions |
4.27% |
14.89% |
13.22% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
6.39% |
12.80% |
11.99% |
Advisor
Shares |
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–Return
Before Taxes |
7.19% |
15.84% |
14.65% |
Institutional
Shares |
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–Return
Before Taxes |
7.64% |
16.32% |
15.10% |
Russell 2000®
Growth Index (reflects no deduction for
fees, expenses or taxes) |
2.83% |
14.53% |
14.14% |
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Summary
Section – Brown Advisory Small-Cap Growth Fund |
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NOTE:
The Small-Cap Growth Fund offers three classes of shares. Investor Shares
commenced operations on June 28, 1999 as part of the Predecessor Fund,
Advisor Shares commenced operations on April 25, 2006 as part of the
Predecessor Fund, and Institutional Shares commenced operations on September 20,
2002 as part of the Predecessor Fund. Prior to July 1, 2011, the Advisor Shares
were known as A Shares. Prior to October 19, 2012, Investor Shares were
known as Institutional Shares and Institutional Shares were known as D Shares.
After-tax returns are calculated
using the historical highest individual Federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns depend
on an investor’s tax situation and may differ from those shown. In certain
cases, the figure representing “Return after Taxes on Distributions and Sale of
Fund Shares” may be higher than the other return figures for the same period,
since a higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax deduction that benefits the
investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
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Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Christopher
A. Berrier has served as a portfolio manager of the Fund since 2006.
George Sakellaris, CFA, has served as associate portfolio manager of the
Fund since 2017. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a
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Summary
Section – Brown Advisory Small-Cap Growth Fund |
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conflict
of interest by influencing the broker-dealer or other intermediary and your
salesperson to recommend the Fund over another investment. Ask your salesperson
or visit your financial intermediary’s website for more information.
Brown Advisory Small‑Cap Fundamental Value
Fund
Institutional
Shares (BAUUX)
Investor
Shares (BIAUX)
Advisor
Shares (BAUAX)
Investment Objective
The Brown Advisory Small-Cap
Fundamental Value Fund (the “Fund”) seeks to achieve long-term capital
appreciation.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder Fees (fees paid directly
from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.85% |
0.85% |
0.85% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.10% |
0.10% |
0.10% |
Total
Annual Fund Operating Expenses |
0.95% |
1.10% |
1.35% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$97 |
$303 |
$525 |
$1,166 |
Investor
Shares |
$112 |
$350 |
$606 |
$1,340 |
Advisor
Shares |
$137 |
$428 |
$739 |
$1,624 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 27% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Small-Cap Fundamental Value Fund |
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Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
small capitalization companies. Equity securities include common stock,
preferred stock, equity-equivalent securities such as convertible securities,
stock futures contracts, equity options, other investment companies, American
Depositary Receipts (“ADRs”), real estate investment trusts (“REITs”) and
exchange traded funds (“ETFs”), and the Fund may also invest in private
placements in these types of securities. Small companies, according
to the Adviser, are companies whose market capitalizations are generally less
than $6 billion at the time of purchase. The Fund invests primarily
in equity securities that trade in the U.S. securities markets and that the
Adviser believes are undervalued, broadly defined as trading at a discount to
the estimated economic value of a company’s underlying business. The
Adviser uses a research-driven analysis that results in the Fund’s portfolio
having an emphasis on out-of-favor or under-followed, cash-generating companies
with sustainable business models, strong finances, competent management and a
demonstrable record of profitability and self-funded growth. The Fund
may also invest in cyclical companies or companies that have experienced a
temporary setback if the valuation of the company is at an appropriate discount
to the long-term earnings potential of the company. To a more limited
extent, the Fund may invest up to 15% of its assets in foreign equity
securities, including equity securities from emerging
markets. With
respect to 20% of its assets, the Fund may also invest in foreign or domestic
debt securities, including up to 5% of its assets in distressed debt
securities. The Fund may utilize options, futures contracts and
options on futures. These investments will typically be made for
investment purposes consistent with the Fund’s investment objective and may also
be used to mitigate or hedge risks within the portfolio or for the temporary
investment of cash balances. By investing in derivatives, the Fund
attempts to achieve the economic equivalence it would achieve if it were to
invest directly in the underlying security. Investments in
derivatives may be counted towards the Fund’s 80% investment policy if they have
economic characteristics similar to the other investments that are included in
the Fund’s 80% investment policy. The Fund intends to use the mark-to-market
value of such derivatives for purposes of complying with the Fund’s 80%
investment policy.
The
Fund invests primarily in ETFs that have an investment objective similar to the
Fund’s or that otherwise are permitted investments with the Fund’s investment
policies described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities.
The
Adviser may sell a security or reduce its position if:
•It
has reached its target price;
•Its
present reward to risk ratio is unattractive;
•It
is overvalued; or
•The
company’s fundamentals have deteriorated in a material, long-term manner.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the
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Summary
Section – Brown Advisory Small-Cap Fundamental Value Fund |
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deposited
securities are not passed through. GDRs can involve currency risk since, unlike
ADRs, they may not be U.S. dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to changes in the credit ratings of the
Fund’s portfolio of debt securities. Moreover, rising interest rates or lack of
market participants may lead to decreased liquidity in the bond and loan
markets, making it more difficult for the Fund to sell its holdings at a time
when the Fund’s manager might wish to sell. Lower rated securities (“junk
bonds”) are generally subject to greater risk of loss of your money than higher
rated securities. Issuers may (increase) decrease prepayments of principal when
interest rates (fall) increase, affecting the maturity of the debt security and
causing the value of the security to decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their investments. Emerging market countries may have policies
that restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
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Summary
Section – Brown Advisory Small-Cap Fundamental Value Fund |
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•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk. The
Fund may invest in foreign securities and is subject to risks associated with
foreign markets, such as adverse political, social and economic developments
such as war, political instability, hyperinflation, currency devaluations, and
overdependence on particular industries; accounting standards or governmental
supervision that is not consistent with that to which U.S. companies are
subject; limited information about foreign companies; less liquidity and higher
volatility in foreign markets and less protection to the shareholders in foreign
markets. In addition, investments in certain foreign markets that have
historically been considered stable may become more volatile and subject to
increased risk due to ongoing developments and changing conditions in such
markets. The value of the Fund’s foreign investments may also be affected by
foreign tax laws, special U.S. tax considerations and restrictions on receiving
the investment proceeds from a foreign country. Dividends or interest on, or
proceeds from the sale or disposition of, foreign securities may be subject to
non-U.S. withholding or other taxes. Economic sanctions could, among other
things, effectively restrict or eliminate the Fund’s ability to purchase or sell
securities or groups of securities for a substantial period of time, and may
make the Fund’s investments in such securities harder to value.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Non-Investment
Grade ("Junk Bond") Securities Risk. Securities
rated below investment grade, i.e., Ba
or BB and lower (“junk bonds”), are subject to greater risks of loss of your
money than higher rated securities. Compared with issuers of investment grade
fixed-income securities, junk bonds are more likely to encounter financial
difficulties and to be materially affected by these difficulties.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Smaller
Company Risk. Securities
of companies smaller than larger companies may be more volatile and as a result,
the price of smaller companies may decline more in response to selling
pressure.
•Value
Company Risk.
The stock of value companies can continue to be undervalued for long periods of
time and not realize its expected value. The value of the Fund may decrease in
response to the activities and financial prospects of an individual
company.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows changes in the Fund’s performance of
Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares, Advisor Shares and Institutional Shares for the 1
year, 5 year, and 10 year periods compare to a broad-based market index.
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Summary
Section – Brown Advisory Small-Cap Fundamental Value Fund |
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The Fund is the successor to the
investment performance of the Brown Advisory Small-Cap Fundamental Value Fund
(the “Predecessor Fund”) as a result of the reorganization of the Predecessor
Fund into the Fund on October 19, 2012. Accordingly, the performance information
shown below for periods prior to October 19, 2012 is that of the Predecessor
Fund. The Predecessor Fund was also advised by the Adviser and had the same
investment objective and strategies as the Fund.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/small-cap-fundamental-value-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Small-Cap Fundamental Value Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-18.52%. During the periods shown in the chart, the
highest quarterly return
was 20.73% (for the quarter ended December 31, 2020)
and the lowest quarterly return was
-36.84% (for the quarter ended March 31,
2020).
Brown
Advisory Small-Cap Fundamental Value Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
|
| |
–Return
Before Taxes |
31.11% |
8.32% |
11.96% |
–Return
After Taxes on Distributions |
30.95% |
7.14% |
10.98% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
18.52% |
6.27% |
9.69% |
Advisor
Shares |
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–Return
Before Taxes |
30.80% |
8.05% |
11.68% |
Institutional
Shares |
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| |
–Return
Before Taxes |
31.35% |
8.49% |
12.13% |
Russell 2000®
Value Index (reflects no deduction for
fees, expenses or taxes) |
28.27% |
9.07% |
12.03% |
NOTE:
The Small-Cap Fundamental Value Fund offers three classes of shares. Investor
Shares commenced operations on December 31, 2008 as part of the Predecessor
Fund, Advisor Shares commenced operations on July 28, 2011 as part of the
Predecessor Fund, and Institutional Shares commenced operations on October 19,
2012. Performance
shown prior to inception of the Institutional Shares is based on the performance
of Investor Shares, adjusted for the lower expenses applicable to Institutional
Shares. Prior to October 19, 2012, Investor Shares were
known as Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown.
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Summary
Section – Brown Advisory Small-Cap Fundamental Value Fund |
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After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
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Investment
Adviser |
Portfolio
Manager |
Brown
Advisory LLC |
J.
David Schuster has served as the portfolio manager of the Fund since
2008. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Sustainable Small-Cap Core
Fund
Institutional
Shares (BAFYX)
Investor
Shares (BIAYX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Sustainable
Small-Cap Core Fund (the “Fund”) seeks long-term capital appreciation by
investing primarily in equity securities of small-cap
companies.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases
(as
a % of the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as
a % of the sale price) |
None |
None |
None |
Redemption
Fee
(as
a % of amount redeemed on shares held for 14 days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
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| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
| |
Management
Fees |
0.85% |
0.85% |
0.85% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.51% |
0.51% |
0.51% |
Total
Annual Fund Operating Expenses |
1.36% |
1.51% |
1.76% |
Fee
Waiver and/or Expense Reimbursement(1) |
-0.43% |
-0.43% |
-0.43% |
Total
Annual Fund Operating Expenses After Fee Waiver(1) |
0.93% |
1.08% |
1.33% |
(1)
Brown Advisory LLC (the
"Adviser") has contractually agreed to waive its fees and/or reimburse certain
expenses (exclusive of any front-end or contingent deferred sales loads, taxes,
interest, brokerage commissions, acquired fund fees and expenses, expenses
incurred in connection with any merger or reorganization and extraordinary
expenses) in order to limit the Total Annual Fund Operating Expenses after Fee
Waiver and/or Expense Reimbursement for Institutional Shares, Investor Shares
and Advisor Shares to 0.93%, 1.08% and 1.33%,
respectively, of the Fund’s average daily net assets through October 31,
2023. The Fund may have Total Annual Fund Operating Expenses
after Fee Waiver and/or Expense Reimbursement higher than these expense caps as
a result of any acquired fund fees and expenses or other expenses that are
excluded from the calculation. The contractual waivers and expense
reimbursements may be changed or eliminated at any time by the Board of
Trustees, on behalf of the Fund, upon 60 days written notice to the Adviser. The
contractual waivers and expense reimbursements may not be terminated by the
Adviser without the consent of the Board of Trustees. The Adviser may recoup any
waived amount from the Fund pursuant to this agreement if such reimbursement
does not cause the Fund to exceed existing expense limitations or the
limitations in place at the time the reduction was originally made and the
reimbursement is made within three years after the date on which the Adviser
incurred the expense.
Example
The
example below is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
This
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of each
period.
The
example also assumes that your investment has a 5% annual return each year and
that the Fund’s operating expenses remain the same (taking into account the
contractual expense limitation being in effect for the period through October
31, 2023).
Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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Summary
Section– Brown Advisory Sustainable Small-Cap Core Fund |
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| |
|
1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$95 |
$388 |
$704 |
$1,598 |
Investor
Shares |
$110 |
$435 |
$783 |
$1,765 |
Advisor
Shares |
$135 |
$512 |
$914 |
$2,038 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the period from the
Fund's inception on September 30, 2021 to the fiscal period ended June 30, 2022,
the portfolio turnover rate for the Fund was 19% of the average value of its
portfolio.
Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
small domestic companies that satisfy the Fund’s Fundamental and Environmental,
Social and Governance (“ESG”) criteria. The Adviser will seek to balance growth
oriented and value oriented holdings to achieve a core portfolio. Small
companies, according to the Adviser, are companies whose market capitalizations
are generally less than $6 billion or the maximum capitalization of companies in
the Russell 2000®
Index
(which was approximately $13.6 billion as of September 30, 2022), whichever is
greater, at the time of purchase. The market capitalizations of the companies in
the Fund’s portfolio and the Russell 2000®
Index changes over time; the Fund will not automatically sell or cease to
purchase stock of a company it already owns just because the company’s market
capitalization grows or falls outside this range.
Equity
securities include domestic common and preferred stock, equity-equivalent
securities such as convertible securities, stock futures contracts, equity
options, other investment companies, American Depositary Receipts (“ADRs”), real
estate investment trusts (“REITs”) and exchange traded funds (“ETFs”). The Fund
may also invest in private placements in these types of securities.
The
Fund may invest in ETFs that have an investment objective similar to the Fund’s
or that otherwise are permitted investments with the Fund’s investment policies
described herein.
ADRs
are equity securities traded on U.S. securities exchanges, which are generally
issued by banks or trust companies to evidence ownership of foreign equity
securities.
The
Fund may invest up to 20% of its net assets in foreign securities, including in
emerging markets.
The
Adviser assesses a company’s ESG profile through conducting ESG research and
leveraging engagement when appropriate through dialogue with company management
teams as part of its fundamental due diligence process. ESG factors are
considered systematically through leveraging a repeatable process that strives
to assess how issuers manage ESG risks and sustainable investment opportunities.
As
part of the fundamental research approach, the Adviser has a process to
integrate, identify and consider the ESG risks and sustainable opportunities
using a proprietary ESG assessment. The Fund has access to this research and
considers relevant ESG issues. The Fund will invest primarily in securities with
established or improving sustainability characteristics. However, at the
Adviser’s discretion, the Fund is permitted to make an investment without a
written ESG assessment on file at the time of purchase, as long as the Adviser
believes the security meets the Fund’s sustainability criteria.
The
Adviser pursues strategic, active engagement with companies and other
stakeholders in an effort to enhance due diligence and monitor sustainable
opportunities and ESG risks that may impact the investment thesis. Additional
monitoring is also undertaken through a quarterly review of certain ESG
characteristics of the Fund.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to ESG-related data from third-party providers. The Adviser does not
solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser. The Adviser is permitted to invest in
a security if it determines the security has an acceptable ESG risk profile
notwithstanding contrary third party data or third party recommendations. In
these circumstances, the ESG team will seek to engage the issuer or
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Summary
Section– Brown Advisory Sustainable Small-Cap Core Fund |
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relevant
stakeholders of the issuer, when practicable and material to the investment
decisions, to gain a deeper understanding of a risk, promote improved risk
management, and/or provide insight on potential opportunities. Investing on the
basis of ESG criteria is qualitative and subjective by nature, and there can be
no assurance that the process utilized by the Fund’s vendors or any judgment
exercised by the Adviser will reflect the beliefs or values of any particular
investor. The data informing this process is derived from a variety of sources,
including the companies themselves and third party sources. The Fund’s vendors
provide ESG-related data, research and rating services. The ESG-related data,
research and rating services include information related to potentially
controversial business exposure, ESG metrics such as emissions and diversity
data and controversy reporting. The Adviser believes its process is reasonably
designed, although such data and qualitative information are inherently subject
to interpretation, restatement, delay and omission outside the Adviser’s
control.
Due
to the ESG investment approach taken by the portfolio managers, the Fund expects
to have minimal exposure to companies whose business activities are
significantly exposed to areas of controversial business, such as conventional
and controversial weapons, alcohol, tobacco, gambling, adult entertainment,
and/or extraction, exploration, production or refining of fossil fuels. However,
the Fund may hold companies which the Adviser believes are indirectly or
insignificantly exposed to these business activities.
The
Adviser considers each proxy voting proposal related to holdings in the Fund on
its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
The
Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•The
investment no longer meets the Fund’s ESG criteria;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the long-term expectation.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments.
A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance.
The
Fund may be unable to achieve its investment objective during the employment of
a temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the
Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal
risk”
of investing in the Fund, regardless of the order in which it appears. The
following are the principal risks that could affect the value of your
investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
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Summary
Section– Brown Advisory Sustainable Small-Cap Core Fund |
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•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Emerging
Markets Risk. The
Fund may invest in emerging markets, which may carry more risk than investing in
developed foreign markets. Risks associated with investing in emerging markets
include limited information about companies in these countries, greater
political and economic uncertainties compared to developed foreign markets,
underdeveloped securities markets and legal systems, potentially high inflation
rates, and the influence of foreign governments over the private sector. In
addition, companies in emerging market countries may not be subject to
accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their investments. Emerging market countries may have policies
that restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
•Environmental,
Social and Governance Policy Risk.
The risk that because the Fund’s ESG criteria exclude securities of certain
issuers for nonfinancial reasons, the Fund may forgo some market opportunities
available to funds that do not use these criteria.
•Equity
and General Market Risk. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value. The stock market may experience declines or
stocks in the Fund’s portfolio may not increase their earnings at the rate
anticipated. The Fund’s NAV and investment return will fluctuate based upon
changes in the value of its portfolio securities. Markets may, in response to
economic or market developments, governmental actions or intervention, natural
disasters, epidemics, pandemics or other external factors, experience periods of
high volatility and reduced liquidity. During those periods, the Fund may
experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
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Summary
Section– Brown Advisory Sustainable Small-Cap Core Fund |
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•Management
Risk. The
Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•New
Fund Risk.
The Fund is new with a limited operating history and there can be no assurance
that the Fund will grow to or maintain an economically viable size.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities Act
of 1933, as amended. Privately issued securities are restricted securities that
are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk. The
value of the Fund’s investments in REITs may change in response to changes in
the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Smaller
Company Risk.
Securities of companies smaller than larger companies may be more volatile and
as a result, the price of smaller companies may decline more in response to
selling pressure.
•Sustainability
Policy Risk.
The Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus.
Performance
Information
Performance information for the Fund is not
included because the Fund did not have one full calendar year of performance
prior to the date of this prospectus. Performance information
will be available in the prospectus once the Fund has at least one calendar year
of performance. Updated performance information is available online at
https://www.brownadvisory.com/mf/funds/sustainable-small-cap-core-fund
or by calling 800-540-6807 (toll free)
or 414-203-9064.
Management
|
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Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Timothy
Hathaway, CFA and Emily Dwyer serve as portfolio managers and Kenneth Coe
III, CFA serves as associate portfolio manager of the Fund, each since the
Fund’s inception in 2021. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services, P.O.
Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login.
Investors
who wish to purchase, exchange or redeem Fund shares through a broker-dealer
should contact the broker-dealer directly. The minimum initial and subsequent
investment amounts for various types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
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| |
Summary
Section– Brown Advisory Sustainable Small-Cap Core Fund |
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–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Global Leaders Fund
Institutional
Shares (BAFLX)
Investor
Shares (BIALX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Global
Leaders Fund (the “Fund”) seeks to achieve long-term capital appreciation by
investing primarily in global equities.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.65% |
0.65% |
0.65% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.10% |
0.10% |
0.10% |
Total
Annual Fund Operating Expenses |
0.75% |
0.90% |
1.15% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$77 |
$240 |
$417 |
$930 |
Investor
Shares |
$92 |
$287 |
$498 |
$1,108 |
Advisor
Shares |
$117 |
$365 |
$633 |
$1,398 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 25% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Global Leaders Fund |
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Principal Investment
Strategies
Under
normal circumstances, the Fund aims to achieve its investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities. The Fund also will, under normal
market conditions: (1) invest at least 40% of its assets outside the United
States, or if market conditions are not favorable, at least 30% of its assets
outside the United States, and (2) hold securities of issuers located in at
least three countries. The Fund determines where a company is located, and thus,
whether a company is considered to be located outside the United States by
considering whether: (i) it is organized under the laws of or maintains its
principal office in a country located outside the United States; (ii) its
securities are principally traded on trading markets in countries located
outside the United States; (iii) it derives at least 50% of its total revenue or
profits from either goods produced or services performed or sales made in
countries located outside the United States; or (iv) it has at least 50% of its
assets in countries located outside the United States. The Fund’s non-U.S.
investments may include equity securities issued by companies that are
established or operating in emerging market countries.
The
equity securities in which the Fund may invest will include the equity
securities of companies that Brown Advisory Limited (the “Sub-Adviser”) believes
are leaders within their industry or country as demonstrated by an ability to
deliver high relative return on invested capital over time. This typically can
be attributable to, among other things, a strong competitive position and a
defendable barrier to entry. These securities also typically use sustainability
in a positive way to compound a competitive advantage, and have strong
Environmental, Social and Governance (“ESG”) risk management practices. The
equity securities in which the Fund may invest include common stock, preferred
stock, equity-equivalent securities, such as stock futures contracts, equity
options, other investment companies, American Depositary Receipts (“ADRs”),
Global Depositary Receipts (“GDRs”), and exchange traded funds (“ETFs”). The
equity securities in which the Fund may invest will generally be issued by mid-
and large capitalization companies. Medium and large market capitalization
companies are, according to the Sub-Adviser, those companies with market
capitalizations generally greater than $2 billion at the time of purchase. In
addition to those securities, the Fund may also invest in convertible bonds,
Rule 144A securities, U.S. Treasury bills, fixed and/or floating rate U.S.
Government securities, real estate investment trusts (“REITs”) and unlisted
securities. The Fund may invest in derivatives instruments, such as options,
futures contracts, including interest rate futures, and options on futures.
These investments will typically be made for investment purposes consistent with
the Fund’s investment objective and may also be used to mitigate or hedge risks
within the portfolio or for the temporary investment of cash balances.
The
Sub-Adviser views ESG factors as relevant to fundamentals and seeks to
understand their impact on companies in which the Fund may invest. ESG factors
are systematically integrated into the Sub-Adviser’s investment decision-making
process. The Sub-Adviser leverages proprietary ESG research that seeks to
understand sustainable opportunities and ESG risks for every security added to
the portfolio. However, at the Sub-Adviser’s discretion, the Fund is permitted
to make an investment without a written ESG assessment on file at the time of
purchase, as long as the Sub-Adviser believes the security meets the Fund’s
sustainability criteria.
When
assessing the sustainability profile of a company, the Sub-Adviser seeks
companies with sustainable opportunities, defined as companies that use
sustainability to improve their financial position. One way that companies may
improve their financial position is through what the Sub-Adviser deems to be
internal sustainability strategies that lead to one or more Sustainable Business
Advantages (such as revenue growth, cost improvements, or enhanced franchise
value). The Sub-Adviser also seeks companies with low exposure to ESG risks, or
that have strong ESG risk management practices in place where ESG risks may be
present.
The
Sub-Adviser pursues strategic, active engagement with companies and other
stakeholders in an effort to enhance due diligence and monitor sustainable
opportunities and ESG risks that may impact the investment thesis. Additional
monitoring is also undertaken through a quarterly review of certain ESG
characteristics of the Fund.
The
Fund expects to have low to no exposure to companies that have received
international sanctions, do not adhere to certain global norms and conventions,
or derive significant direct revenue from controversial weapons or related
business activities, tobacco, or fossil fuel extraction. However, the Fund may
hold companies which the Adviser believes are indirectly or insignificantly
exposed to these business activities.
In
addition to the Sub-Adviser’s proprietary and qualitative ESG analysis, the
Sub-Adviser has access to ESG-related data from third-party providers. The
Sub-Adviser does not solely rely on third-party data or recommendations when
making investment
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Summary
Section – Brown Advisory Global Leaders Fund |
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decisions
for the Fund. The ESG evaluation process considers risks and opportunities
holistically, meaning a security will not necessarily be excluded from
investment due to any one particular factor if the overall analysis results in a
favorable evaluation by the Sub-Adviser. The Sub-Adviser is permitted to invest
in a security if it determines the security has an acceptable ESG risk profile
notwithstanding contrary third party data or third party recommendations. In
these circumstances, the ESG team will seek to engage the issuer or relevant
stakeholders of the issuer, when practicable and material to the investment
decision, to gain a deeper understanding of a risk, promote improved risk
management, and/or provide insight on potential opportunities. Investing on the
basis of ESG criteria is qualitative and subjective by nature, and there can be
no assurance that the process utilized by the Fund’s vendors or any judgment
exercised by the Sub-Adviser will reflect the beliefs or values of any
particular investor. The data informing this process is derived from a variety
of sources, including the companies themselves and third party sources. The
Fund’s vendors provide ESG-related data, research and rating services. The
ESG-related data, research and rating services include information related to
potentially controversial business exposure, ESG metrics such as emissions and
diversity data and controversy reporting. The Sub-Adviser believes its process
is reasonably designed, although such data and qualitative information are
inherently subject to interpretation, restatement, delay and omission outside
the Sub-Adviser’s control.
The
Sub-Adviser considers each proxy voting proposal related to holdings in the Fund
on its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
The
Fund may sell its portfolio securities for a variety of reasons, such as to
secure gains, limit losses, redeploy assets into more promising opportunities,
or, in the Sub-Advisers view, the sustainability profile of the investment is no
longer attractive.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks of the
Fund
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in the alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Currency
and Exchange Rate Risk.
Investments in currencies, currency futures contracts, forward currency exchange
contracts or similar instruments, as well as securities that are denominated in
foreign currency, are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies. In addition,
the Fund may engage in currency hedging transactions. Currency hedging
transactions are subject to the risk that a result opposite expectations occurs
(an expected decline turns into a rise and conversely) resulting in a loss to
the Fund.
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Summary
Section – Brown Advisory Global Leaders Fund |
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•Derivatives
Risk.
The risk that an investment in derivatives will not perform as anticipated,
cannot be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their investments. Emerging market countries may have policies
that restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
•Environmental,
Social and Governance Policy Risk. The
risk that because the Fund’s ESG criteria exclude securities of certain issuers
for nonfinancial reasons, the Fund may forgo some market opportunities available
to funds that do not use these criteria.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and frequent trading of ETFs by the Fund can generate brokerage expenses.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the individual ETFs in which the Fund invests and these fees and expenses are in
addition to the fees and expenses that Fund shareholders directly bear in
connection with the Fund’s own operations.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
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Summary
Section – Brown Advisory Global Leaders Fund |
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Fund’s
ability to purchase or sell securities or groups of securities for a substantial
period of time, and may make the Fund’s investments in such securities harder to
value.
•Growth
Company Risk.
Securities of growth companies can be more sensitive to the company’s earnings
and more volatile than the market in general.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
•Liquidity
Risk.
Certain securities held by the Fund may be difficult (or impossible) to sell at
the time and at the price the Fund would like. As a result, the Fund may have to
hold these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Sub-Adviser’s
success or failure to implement investment strategies for the Fund.
•Medium
Capitalization Company Risk.
Securities of medium capitalization companies may be more volatile and more
difficult to liquidate during market down turns than securities of larger
companies. Additionally the price of medium-sized companies may decline more in
response to selling pressures.
•Private
Placement Risk.
The Fund may invest in privately issued securities of foreign common and
preferred stock, convertible debt securities, ADRs, real estate investment
trusts (“REITs”) and ETFs, including those which may be resold only in
accordance with Rule 144A under the Securities Act of 1933, as amended.
Privately issued securities are restricted securities that are not publicly
traded. Delay or difficulty in selling such securities may result in a loss to
the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Sustainability
Policy Risk. The
Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus.
•U.S.
Government Securities Risk.
Although the Fund’s U.S. Government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, including, for example, Ginnie Mae
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury. Other obligations issued by or guaranteed by federal agencies,
such as those securities issued by Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase certain obligations
of the federal agency, while other obligations issued by or guaranteed by
federal agencies, such as those of the Federal Home Loan Banks, are supported by
the right of the issuer to borrow from the U.S. Treasury. While the U.S.
Government provides financial support to such U.S. Government-sponsored federal
agencies, no assurance can be given that the U.S. Government will always do so,
since the U.S. Government is not so obligated by law.
•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually
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Summary
Section – Brown Advisory Global Leaders Fund |
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bought
and sold. The prices of certain securities provided by pricing services may be
subject to frequent and significant change, and will vary depending on the
information that is available.
•Value
Company Risk.
The stock of value companies can continue to be undervalued for long periods of
time and not realize its expected value. The value of investing primarily in
value-oriented securities may decrease in response to the activities and
financial prospects of an individual company.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows changes in the Fund’s performance of
Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares and Institutional Shares for the 1 year, 5 year, and
since inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/global-leaders-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Global Leaders Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-27.95%. During the period shown in the chart, the
highest quarterly return
was 18.98% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-18.78% (for the quarter ended March 31,
2020).
Brown
Advisory Global Leaders Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Year |
Since
Inception (7/1/15) |
Investor
Shares |
|
| |
–Return
Before Taxes |
16.67% |
19.66% |
14.37% |
–Return
After Taxes on Distributions |
16.34% |
19.55% |
14.28% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
10.05% |
16.06% |
11.76% |
Institutional
Shares |
|
| |
–Return
Before Taxes |
16.82% |
19.84% |
14.54% |
MSCI
All Country World Index (ACWI)*
(reflects no deduction for
fees, expenses and taxes) |
18.54% |
14.40% |
11.23% |
FTSE
All-World Index*
(reflects no deduction for
fees, expenses and taxes) |
18.40% |
14.27% |
11.17% |
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Summary
Section – Brown Advisory Global Leaders Fund |
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NOTE: The Global
Leaders Fund offers two classes of shares. Investor Shares commenced
operations on July 1, 2015, and Institutional Shares commenced operations on
October 31, 2018. Performance
shown prior to inception of the Institutional Shares is based on the
performance of Investor Shares, adjusted for the lower expenses applicable to
Institutional Shares.
*
Effective as of September
1, 2022, the primary benchmark index for the Fund was changed to the MSCI All
Country World Index (ACWI). The Adviser determined that the MSCI All Country
World Index (ACWI) better reflects the Fund’s investment strategy, as compared
to the Fund's former primary benchmark index, the FTSE All-World Index.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Institutional Shares will
vary.
Management
Brown
Advisory LLC is the Fund’s investment adviser. Brown Advisory Limited
is the Fund’s Sub-Adviser.
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Investment
Sub-Adviser |
Portfolio
Managers |
Brown
Advisory Limited |
Michael
Dillon, CFA, has served as a portfolio manager since the Fund’s inception
in 2015. Bertie Thomson, CFA, has served as a portfolio manager of the
Fund since 2016. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
– Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
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Summary
Section – Brown Advisory Global Leaders Fund |
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Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Sustainable International Leaders
Fund
Institutional
Shares (BAILX)
Investor
Shares (BISLX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Sustainable
International Leaders Fund (the “Fund”) seeks to achieve long-term capital
appreciation by investing primarily in international equities.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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| |
Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases
(as
a % of the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as
a % of the sale price) |
None |
None |
None |
Redemption
Fee
(as
a % of amount redeemed on shares held for 14 days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
| |
Management
Fees |
0.75% |
0.75% |
0.75% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
3.51% |
3.51% |
3.51% |
Total
Annual Fund Operating Expenses |
4.26% |
4.41% |
4.66% |
Fee
Waiver and/or Expense Reimbursement |
-3.41% |
-3.41% |
-3.41% |
Total
Annual Fund Operating Expenses After Fee Waiver(1) |
0.85% |
1.00% |
1.25% |
(1)
Brown Advisory LLC (the
"Adviser") has contractually agreed to waive its fees and/or reimburse certain
expenses (exclusive of any front-end or contingent deferred sales loads, taxes,
interest, brokerage commissions, acquired fund fees and expenses, expenses
incurred in connection with any merger or reorganization and extraordinary
expenses) in order to limit the Total Annual Fund Operating Expenses after Fee
Waiver and/or Expense Reimbursement for Institutional Shares, Investor Shares
and Advisor Shares to 0.85%, 1.00% and 1.25%,
respectively, of the Fund’s average daily net assets through October 31,
2023. The Fund may have Total Annual Fund Operating Expenses
after Fee Waiver and/or Expense Reimbursement higher than these expense caps as
a result of any acquired fund fees and expenses or other expenses that are
excluded from the calculation. The contractual waivers and expense
reimbursements may be changed or eliminated at any time by the Board of
Trustees, on behalf of the Fund, upon 60 days written notice to the Adviser. The
contractual waivers and expense reimbursements may not be terminated by the
Adviser without the consent of the Board of Trustees. The Adviser may recoup any
waived amount from the Fund pursuant to this agreement if such reimbursement
does not cause the Fund to exceed existing expense limitations or the
limitations in place at the time the reduction was originally made and the
reimbursement is made within three years after the date on which the Adviser
incurred the expense.
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Summary
Section – Brown Advisory Sustainable International Leaders Fund |
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Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the same
(taking into account the contractual expense limitation being in effect for the
period through October 31, 2023). Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| |
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1
Year |
3
Years |
Institutional
Shares |
$87 |
$981 |
Investor
Shares |
$102 |
$1,025 |
Advisor
Shares |
$127 |
$1,098 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the period from the
Fund’s inception on February 28, 2022 to the fiscal period ended June 30, 2022,
the portfolio turnover rate for the Fund was 12% of the average value of its
portfolio.
Principal Investment Strategies
Under
normal circumstances, the Fund aims to achieve its investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities that satisfy the Fund’s Environmental,
Social and Governance (“ESG”) criteria as well as by also investing at least 80%
of the value of its net assets (plus any borrowings for investment purposes) in
the equity securities of companies that Brown Advisory Limited (the
“Sub-Adviser”) believes are leaders within their industry or country as
demonstrated by an ability to deliver high relative return on invested capital
over time. This typically can be attributable to, among other things, a strong
competitive position and a defendable barrier to entry. These securities also
typically use sustainability in a positive way to compound a competitive
advantage, and have strong ESG risk management practices. The Fund also will,
under normal market conditions: (1) invest at least 80% of its assets outside
the United States, or if market conditions are not favorable, at least 70% of
its assets outside the United States, and (2) hold securities of issuers located
in at least three countries (not including the United States). The Fund
determines where a company is located, and thus, whether a company is considered
to be located outside the United States by considering whether: (i) it is
organized under the laws of or maintains its principal office in a country
located outside the United States; (ii) its securities are principally traded on
trading markets in countries located outside the United States; (iii) it derives
at least 50% of its total revenue or profits from either goods produced or
services performed or sales made in countries located outside the United States;
or (iv) it has at least 50% of its assets in countries located outside the
United States. The Fund’s non-U.S. investments may include equity securities
issued by companies that are established or operating in emerging market
countries. Emerging market companies for these purposes consist of companies in
emerging market countries in Latin America, Asia, Eastern Europe, Africa, and
the Middle East, and include, among other countries, Brazil, China, Hong Kong,
India, Indonesia and Taiwan.
The
equity securities in which the Fund may invest include common stock, preferred
stock, equity-equivalent securities, such as stock futures contracts, equity
options, other investment companies, American Depositary Receipts (“ADRs”),
Global Depositary Receipts (“GDRs”), and exchange traded funds (“ETFs”). The
equity securities in which the Fund may invest will generally be issued by mid-
and large capitalization companies. Medium and large market capitalization
companies are, according to the Sub-Adviser, those companies with market
capitalizations generally greater than $2 billion at the time of purchase. In
addition to those securities,
the Fund may also invest in convertible bonds, Rule 144A securities, U.S.
Treasury bills, fixed and/or floating rate U.S. Government securities, real
estate investment trusts (“REITs”) and unlisted securities. The Fund may invest
in derivatives instruments, such as options, futures contracts, including
interest rate futures, and options on futures. These investments will typically
be made for investment purposes consistent with the Fund’s investment objective
and may also be used to mitigate or hedge risks within the portfolio or for the
temporary investment of cash balances.
The
Sub-Adviser views ESG factors as relevant to fundamentals and seeks to
understand their impact on companies in which the Fund may invest. ESG factors
are systematically integrated into the Sub-Adviser’s investment decision-making
process. The Sub-
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Summary
Section – Brown Advisory Sustainable International Leaders Fund |
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Adviser
leverages proprietary ESG research that seeks to understand sustainable
opportunities and ESG risks for every security added to the portfolio. However,
at the Sub-Adviser’s discretion, the Fund is permitted to make an investment
without a written ESG assessment on file at the time of purchase, as long as the
Sub-Adviser believes the security meets the Fund’s sustainability criteria. The
Sub-Adviser also leverages the ESG research and resources of Brown Advisory LLC
(the “Adviser”).
When
assessing the sustainability profile of a company, the Sub-Adviser seeks
companies with emerging or mature sustainable opportunities, defined as
companies that use sustainability to improve their financial position. One way
that companies may improve their financial position is through what the
Sub-Adviser deems to be internal sustainability strategies that lead to one or
more Sustainable Business Advantages (such as revenue growth, cost improvements,
or enhanced franchise value). The Sub-Adviser believes that these represent
three distinct ways that underlying companies can use Sustainable Business
Advantages to improve their financial position: (1) Revenue Growth - that is, by
offering a product or service that helps customers reduce the cost of doing
business – by means of energy usage, water intake, or raw material usage – thus
helping to drive productivity and efficiency for their customers; (2) Cost
Improvements - which involves maintaining efficient and productive internal
operations that help to reduce resource consumption; and (3) Enhanced Franchise
Value - which involves using sustainability to improve the overall value of the
business franchise through increasing customer loyalty, elevating the brand
reputation, and improving employee engagement, retention and recruitment. The
Sub-Adviser also seeks companies with low exposure to ESG risks, or that have
strong ESG risk management practices in place where ESG risks may be
present.
The
Sub-Adviser pursues strategic engagement with certain companies and other
stakeholders in an effort to enhance due diligence and monitor sustainable
opportunities and ESG risks that may impact the investment thesis. Additional
monitoring is also undertaken through a quarterly review of certain ESG
characteristics of the Fund.
The
Fund expects to have low to no exposure to companies that have received
international sanctions, do not adhere to certain global norms and conventions,
or derive significant direct revenue from controversial weapons or related
business activities, tobacco, or fossil fuel extraction. However, the Fund may
hold companies which the Sub-Adviser believes are indirectly or insignificantly
exposed to these business activities.
In
addition to the Sub-Adviser’s proprietary and qualitative ESG analysis, the
Sub-Adviser has access to ESG-related data from third-party providers. The
Sub-Adviser does not solely rely on third-party data or recommendations when
making investment decisions for the Fund. The ESG evaluation process considers
risks and opportunities holistically, meaning a security will not necessarily be
excluded from investment due to any one particular factor if the overall
analysis results in a favorable evaluation by the Sub-Adviser with oversight by
the Adviser. The Sub-Adviser is permitted to invest in a security if it
determines the security has an acceptable ESG risk profile notwithstanding
contrary third party data or third party recommendations. In these
circumstances, the ESG team will seek to engage the issuer, when practicable and
material to the investment decision, to gain a deeper understanding of a risk,
promote improved risk management, and/or provide insight on potential
opportunities. Investing on the basis of ESG criteria is qualitative and
subjective by nature, and there can be no assurance that the process utilized by
the Fund’s vendors or any judgment exercised by the Sub-Adviser will reflect the
beliefs or values of any particular investor. The data informing this process is
derived from a variety of sources, including the companies themselves and third
party sources. The Fund’s vendors provide ESG-related data, research and rating
services. The ESG-related data, research and rating services include information
related to potentially controversial business exposure, ESG metrics such as
emissions and diversity data and controversy reporting. The Sub-Adviser believes
its process is reasonably designed, although such data and qualitative
information are inherently subject to interpretation, restatement, delay and
omission outside the Sub-Adviser’s control.
The
Sub-Adviser considers each proxy voting proposal related to holdings in the Fund
on its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
The
Fund may sell its portfolio securities for a variety of reasons, such as to
secure gains, limit losses, or redeploy assets into more promising
opportunities, or in the Sub-Adviser’s view, the sustainability profile of the
investment is no longer attractive.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and
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Summary
Section – Brown Advisory Sustainable International Leaders Fund |
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prime quality cash equivalents such as
prime commercial paper and other money market instruments. A defensive position,
taken at the wrong time, may have an adverse impact on the Fund’s performance.
The Fund may be unable to achieve its investment objective during the employment
of a temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal
risk”
of investing in the Fund, regardless of the order in which it appears. The
following are the principal risks that could affect the value of your
investment:
•American
Depositary Receipts and Global Depository Receipts Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Currency
and Exchange Rate Risk.
Investments in currencies, currency futures contracts, forward currency exchange
contracts or similar instruments, as well as securities that are denominated in
foreign currency, are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies. In addition,
the Fund may engage in currency hedging transactions. Currency hedging
transactions are subject to the risk that a result opposite expectations occurs
(an expected decline turns into a rise and conversely) resulting in a loss to
the Fund.
•Derivatives
Risk.
The risk that an investment in derivatives will not perform as anticipated,
cannot be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Sub-Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks.Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Emerging
Markets Risk. The
Fund may invest in emerging markets, which may carry more risk than investing in
developed foreign markets. Risks associated with investing in emerging markets
include limited information about companies in these countries, greater
political and economic uncertainties compared to developed foreign markets,
underdeveloped securities markets and legal systems, potentially high inflation
rates, and the influence of foreign governments over the private sector. In
addition, companies in emerging market countries may not be subject to
accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their investments. Emerging market countries may have policies
that restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
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Summary
Section – Brown Advisory Sustainable International Leaders Fund |
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•Environmental,
Social and Governance Policy Risk.
The risk that because the Fund’s ESG criteria exclude securities of certain
issuers for nonfinancial reasons, the Fund may forgo some market opportunities
available to funds that do not use these criteria. In addition, the Sub-Adviser
utilizes the services of third-party data providers for purposes of conducting
its ESG due diligence process and such data is inherently subject to
interpretation, restatement, delay and omission outside the Sub-Adviser’s
control.
•Equity
and General Market Risk. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value. The stock market may experience declines or
stocks in the Fund’s portfolio may not increase their earnings at the rate
anticipated. The Fund’s NAV and investment return will fluctuate based upon
changes in the value of its portfolio securities. Markets may, in response to
economic or market developments, governmental actions or intervention, natural
disasters, epidemics, pandemics or other external factors, experience periods of
high volatility and reduced liquidity. During those periods, the Fund may
experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Growth
Company Risk.
Securities of growth companies can be more sensitive to the company’s earnings
and more volatile than the market in general.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller competitors. In
addition, large capitalization companies are sometimes unable to attain the high
growth rates of successful, smaller companies, especially during extended
periods of economic expansion.
•Liquidity
Risk.
Certain securities held by the Fund may be difficult (or impossible) to sell at
the time and at the price the Fund would like. As a result, the Fund may have to
hold these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Sub-Adviser’s
success or failure to implement investment strategies for the
Fund.
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Summary
Section – Brown Advisory Sustainable International Leaders Fund |
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•Medium
Capitalization Company Risk.
Securities of medium-sized companies held by the Fund may be more volatile and
more difficult to liquidate during market down turns than securities of larger
companies. Additionally the price of medium-sized companies may decline more in
response to selling pressures.
•New
Fund Risk.
The Fund is new with a limited operating history and there can be no assurance
that the Fund will grow to or maintain an economically viable size.
•Private
Placement Risk.
The Fund may invest in privately issued securities of foreign common and
preferred stock, convertible debt securities, ADRs, REITs and ETFs, including
those which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Sustainability
Policy Risk. The
Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus.
•U.S.
Government Securities Risk.
Although the Fund’s U.S. Government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, including, for example, Ginnie Mae
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury. Other obligations issued by or guaranteed by federal agencies,
such as those securities issued by Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase certain obligations
of the federal agency, while other obligations issued by or guaranteed by
federal agencies, such as those of the Federal Home Loan Banks, are supported by
the right of the issuer to borrow from the U.S. Treasury. While the U.S.
Government provides financial support to such U.S. Government-sponsored federal
agencies, no assurance can be given that the U.S. Government will always do so,
since the U.S. Government is not so obligated by law.
•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Sub-Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing services may be
subject to frequent and significant change, and will vary depending on the
information that is available.
•Value
Company Risk.
The stock of value companies can continue to be undervalued for long periods of
time and not realize its expected value. The value of investing primarily in
value-oriented securities may decrease in response to the activities and
financial prospects of an individual company.
Performance
Information
Performance information for the Fund is not
included because the Fund did not have one full calendar year of performance
prior to the date of this prospectus. Performance information
will be available in the prospectus once the Fund has at least one calendar year
of performance. Updated performance information is available online at
www.brownadvisory.com/mf/funds/sustainable-international-leaders-fund
or by calling 800-540-6807 (toll free)
or 414-203-9064.
Management
Brown
Advisory LLC is the Fund’s investment adviser. Brown Advisory Limited is the
Fund’s Sub-Adviser.
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Summary
Section – Brown Advisory Sustainable International Leaders Fund |
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Investment
Sub-Adviser |
Portfolio
Manager |
Brown
Advisory Limited |
Priyanka
Agnihotri has served as portfolio manager since the Fund’s inception in
2022. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services, P.O.
Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Intermediate Income
Fund
Institutional
Shares (Not Available for Sale)
Investor
Shares (BIAIX)
Advisor
Shares (BAIAX)
Investment Objective
The Brown Advisory
Intermediate Income Fund (the “Fund”) seeks to provide a high level of current
income consistent with preservation of principal within an intermediate-term
maturity structure.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.15% |
0.15% |
0.15% |
Acquired
Fund Fees and Expenses(1) |
0.06% |
0.06% |
0.06% |
Total
Annual Fund Operating Expenses |
0.51% |
0.56% |
0.81% |
Fee
Waiver and/or Expense Reimbursement(2) |
-0.04% |
-0.04% |
-0.04% |
Total
Annual Fund Operating Expenses after
Fee
Waiver and/or Expense Reimbursement(2) |
0.47% |
0.52% |
0.77% |
(1)Acquired Fund Fees
and Expenses are indirect fees and expenses that the Fund incurs from investing
in the shares of other mutual funds, including money market funds and exchange
traded funds. Please note that the amount of Total Annual Fund Operating
Expenses shown in the above table will differ from the “Financial Highlights”
section of the Prospectus which reflects the operating expenses of the Fund and
does not include indirect expenses such as Acquired Fund Fees and
Expenses.
(2)The Adviser has agreed to
waive all or any portion of the advisory fee that would otherwise be paid by the
Fund to Brown Advisory LLC in an amount equal to the separate advisory fee
indirectly paid by the Fund to the Brown Advisory Mortgage Securities Fund. The
contractual waiver may be changed or eliminated at any time by the Board of
Trustees, on behalf of the Fund, upon 60 days written notice to the Adviser. The
contractual waivers may not be terminated by the Adviser without the consent of
the Board of Trustees.
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the same
(taking into account the contractual expense limitation being in effect for the
period through October 31, 2023). Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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Summary
Section – Brown Advisory Intermediate Income Fund |
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$48 |
$151 |
$263 |
$591 |
Investor
Shares |
$53 |
$167 |
$291 |
$653 |
Advisor
Shares |
$79 |
$246 |
$428 |
$954 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 58% of the average value of its
portfolio.
Principal Investment Strategies
Under
normal conditions, the Adviser seeks to achieve the Fund’s investment objective
by investing at least 80% of the value of its net assets (plus any borrowings
for investment purposes) in fixed income securities such as U.S Government
securities, corporate fixed income securities, mortgage-backed and asset-backed
securities. The fixed income securities in which the Fund may invest may also
include municipal securities issued by states, U.S. territories, and
possessions, general obligation securities and revenue securities. The foregoing
may include municipal lease obligations and insured municipal securities. The
Fund may also invest in other investment companies that invest in similar fixed
income securities and the Fund may count such holdings towards the Fund’s 80%
investment policy.
The
Fund invests in fixed income securities that primarily have a maturity that is
between 1 and 10 years and are rated in the top four rating categories of a
Nationally Recognized Statistical Rating Organization, or unrated and deemed to
be of comparable quality by the Adviser. Under normal circumstances, the Fund’s
portfolio will have an average dollar weighted maturity between 3 and 10 years
and an average duration of 2 to 5 years. Duration is a measurement of price
sensitivity to interest rate changes.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
The
Adviser may sell a fixed income security or reduce its position if:
• Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
• The
security subsequently fails to meet the investment criteria;
• A
more attractive security is found; or
• The
Adviser believes that the security has reached its appreciation
potential.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in the alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
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Summary
Section – Brown Advisory Intermediate Income Fund |
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•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Generally, investment risk
and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by a Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to changes in the credit ratings of the
Fund’s portfolio of debt securities. Moreover, rising interest rates or lack of
market participants may lead to decreased liquidity in the bond and loan
markets, making it more difficult for the Fund to sell its holdings at a time
when the Fund’s manager might wish to sell. Lower rated securities (“junk
bonds”) are generally subject to greater risk of loss of your money than higher
rated securities. Issuers may (increase) decrease prepayments of principal when
interest rates (fall) increase, affecting the maturity of the debt security and
causing the value of the security to decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies (principally, the Brown Advisory Mortgage
Securities Fund) in which the Fund invests, and these fees and expenses are in
addition to the fees and expenses that Fund shareholders directly bear in
connection with the Fund’s own operations. In addition, shareholders will be
exposed to the investment risks associated with investments in the other
investment companies.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Mortgage-
and Asset-Backed Securities Risk.
The Fund may invest in mortgage- and asset-backed securities, which represent
“pools” of mortgages or other assets, including consumer loans or receivables
held in trust. In a period of rising interest rates, these securities may
exhibit additional volatility.
•Municipal
Securities Risk.
Changes in economic, business or political conditions relating to a particular
state, or states, or type of projects may have a disproportionate impact on the
Fund. Municipalities continue to experience difficulties in the
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Summary
Section – Brown Advisory Intermediate Income Fund |
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current
economic and political environment. National governmental actions, such as the
elimination of tax-exempt status, also could affect performance. In addition, a
municipality or municipal project that relies directly or indirectly on national
governmental funding mechanisms may be negatively affected by the national
government’s current budgetary constraints. Municipal obligations that the Fund
may acquire include municipal lease obligations, which are issued by a state or
local government or authority to acquire land and a wide variety of equipment
and facilities. If the funds are not appropriated for the following year’s lease
payments, then the lease may terminate, with the possibility of default on the
lease obligation and significant loss to the Fund. The repayment of principal
and interest on some of the municipal securities in which the Fund may invest
may be guaranteed or insured by a monoline insurance company or other financial
institution. If a company insuring municipal securities in which the Fund
invests experiences financial difficulties, the credit rating and price of the
security may deteriorate. The Fund may invest more heavily in bonds from certain
cities, states or regions than others, which may increase the Fund’s exposure to
losses resulting from economic, political, or regulatory occurrences impacting
these particular cities, states or regions.
•Prepayment/Extension
Risk. Issuers
may experience an acceleration in prepayments of mortgage loans or other
receivables backing the issuers’ fixed income securities when interest rates
decline, which can shorten the maturity of the security, force the Fund to
invest in securities with lower interest rates, and reduce the Fund’s return.
Issuers may decrease prepayments of principal when interest rates increase,
extending the maturity of a fixed income security and causing the value of the
security to decline.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•Rating
Agencies Risk. Ratings
are not an absolute standard of quality, but rather general indicators that
reflect only the view of the originating rating agencies from which an
explanation of the significance of such ratings may be obtained. There is no
assurance that a particular rating will continue for any given period of time or
that any such rating will not be revised downward or withdrawn entirely if, in
the judgment of the agency establishing the rating, circumstances so warrant. A
downward revision or withdrawal of such ratings, or either of them, may have an
effect on the liquidity or market price of the securities in which the Fund
invests. The ratings of securitized assets may not adequately reflect the credit
risk of those assets due to their structure.
•U.S.
Government Securities Risk. Although
the Fund’s U.S. Government securities are considered to be among the safest
investments, they are not guaranteed against price movements due to changing
interest rates. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, including, for example, Ginnie Mae pass-through
certificates, are supported by the full faith and credit of the
U.S. Treasury. Other obligations issued by or guaranteed by federal
agencies, such as those securities issued by Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase certain
obligations of the federal agency, while other obligations issued by or
guaranteed by federal agencies, such as those of the Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the U.S. Treasury.
While the U.S. Government provides financial support to such
U.S. Government-sponsored federal agencies, no assurance can be given that
the U.S. Government will always do so, since the U.S. Government is
not so obligated by law.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows changes in the Fund’s performance of
Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares and Advisor Shares for 1 year, 5 year, and 10 year
periods compare to a broad-based market index.
The
Fund is the successor to the investment performance of the Brown Advisory
Intermediate Income Fund (the “Predecessor Fund”) as a result of the
reorganization of the Predecessor Fund into the Fund on October 19, 2012.
Accordingly, the performance information shown below for periods prior to
October 19, 2012 is that of the Predecessor Fund. The Predecessor Fund was also
advised by the Adviser and had the same investment objective and strategies as
the Fund.
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Summary
Section – Brown Advisory Intermediate Income Fund |
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Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/intermediate-income-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Intermediate Income Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-10.53%. During the periods shown in the chart, the
highest quarterly return
was 5.61% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-2.33% (for the quarter ended June 30,
2013).
Brown
Advisory Intermediate Income Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
|
| |
–Return
Before Taxes |
-1.20% |
2.73% |
2.12% |
–Return
After Taxes on Distributions |
-1.87% |
1.84% |
1.15% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
-0.58% |
1.72% |
1.23% |
Advisor
Shares |
|
| |
–Return
Before Taxes |
-1.57% |
2.48% |
1.87% |
Bloomberg
Intermediate US Aggregate Bond Index
(reflects no deduction for
fees, expenses and taxes) |
-1.29% |
2.79% |
2.37% |
Note: The Intermediate Income
Fund currently offers two classes of shares. Investor Shares commenced
operations on November 2, 1995 as part of the Predecessor Fund and Advisor
Shares commenced operations on May 13, 1991 as part of the Predecessor Fund.
Prior to October 19, 2012, Investor Shares were known as Institutional
Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. In
certain cases, the figure representing “Return after Taxes on Distributions and
Sale of Fund Shares” may be higher than the other return figures for the same
period, since a higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax deduction that benefits the
investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares will
vary.
Management
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Summary
Section – Brown Advisory Intermediate Income Fund |
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Investment
Adviser |
Portfolio
Manager |
Brown
Advisory LLC |
Jason
Vlosich has served as portfolio manager of the Fund since 2019, and
previously served as associate portfolio manager of the Fund from 2017 to
2019. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Total Return
Fund
Institutional
Shares (BAFTX)
Investor
Shares (BIATX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Total
Return Fund (the “Fund”) seeks to provide a competitive total return consistent
with preservation of principal.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions (as a
% of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.12% |
0.12% |
0.12% |
Total
Annual Fund Operating Expenses |
0.42% |
0.47% |
0.72% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$43 |
$135 |
$235 |
$530 |
Investor
Shares |
$48 |
$151 |
$263 |
$591 |
Advisor
Shares |
$74 |
$230 |
$401 |
$894 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 131% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Total Return Fund |
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Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in fixed income securities
such as U.S Government securities, corporate fixed income securities (including
junk bonds), mortgage-backed and asset-backed securities. The fixed income
securities in which the Fund may invest may also include municipal securities
issued by states, U.S. territories, and possessions, general obligation
securities, revenue securities and securities issued by foreign entities
including foreign sponsored governmental agencies. The foregoing may include
municipal lease obligations and insured municipal securities. The Fund may also
invest in other investment companies that invest in similar fixed income
securities and the Fund may count such holdings towards the Fund’s 80%
investment policy. The Fund may also engage in “To Be Announced”
transactions.
The
Fund invests in fixed income securities that primarily have a maturity that is
between 0 and 30 years and are rated in the top four rating categories of a
Nationally Recognized Statistical Rating Organization, or unrated and deemed to
be of comparable quality by the Adviser. Under normal circumstances,
the Fund’s portfolio will have an average dollar weighted maturity between 6 and
11 years and an average duration of 3 to 7 years. Duration is a
measurement of price sensitivity to interest rate changes.
The
Fund may invest up to 20% of its assets in high-yield securities, which are
speculative in nature.
The
Fund may also utilize derivatives including options, futures, currency forwards,
interest rate swaps and credit default swaps.
These
investments will typically be made for investment purposes consistent with the
Fund’s objective and may also be used to mitigate or hedge risks within the
portfolio or for the temporary investment of cash balances. These positions may
also be used to manage interest rate risk or to create synthetic exposure to
particular credits.
Investments
in derivatives may be counted towards the Fund’s 80% investment policy if they
have economic characteristics similar to the other investments that are included
in the Fund’s 80% investment policy.
The
Fund intends to use the mark-to-market value of such derivatives for purposes of
complying with the Fund’s 80% investment policy. The Fund may invest in
securities denominated in non-U.S. currencies. The Fund may also invest in bank
loans.
The
Adviser may sell an investment or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
investment subsequently fails to meet the investment criteria;
•Changing
credit profile and/or conditions result in an unacceptable risk
condition;
•A
more attractive investment is found; or
•The
Adviser believes that the investment has reached its appreciation potential.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Generally, investment risk
and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by a Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Currency
and Exchange Rate Risk.
Investments in currencies, currency futures contracts, forward currency exchange
contracts or similar instruments, as well as securities that are denominated in
foreign currency, are subject to the risk that the
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value
of a particular currency will change in relation to one or more other
currencies. In addition, the Fund may engage in currency hedging transactions.
Currency hedging transactions are subject to the risk that a result opposite
expectations occurs (an expected decline turns into a rise and conversely)
resulting in a loss to the Fund.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to changes in the credit ratings of the
Fund’s portfolio of debt securities. Moreover, rising interest rates or lack of
market participants may lead to decreased liquidity in the bond and loan
markets, making it more difficult for the Fund to sell its holdings at a time
when the Fund’s manager might wish to sell. Lower rated securities (“junk
bonds”) are generally subject to greater risk of loss of your money than higher
rated securities. Issuers may (increase) decrease prepayments of principal when
interest rates (fall) increase, affecting the maturity of the debt security and
causing the value of the security to decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other
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investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Mortgage-
and Asset-Backed Securities Risk.
The Fund may invest in mortgage- and asset-backed securities, which represent
“pools” of mortgages or other assets, including consumer loans or receivables
held in trust. In a period of rising interest rates, these securities may
exhibit additional volatility.
•Municipal
Securities Risk. Adverse
economic or political factors in the municipal bond market, including changes in
the tax law, could impact the Fund in a negative manner.
•Non-Investment
Grade (Junk Bond) Securities Risk.
Below investment grade debt securities (also known as “junk bonds”) are
speculative and involve a greater risk of default and price change due to
changes in the issuer’s creditworthiness. The market prices of these debt
securities may fluctuate more than the market prices of investment grade debt
securities and may decline significantly in periods of general economic
difficulty.
•Portfolio
Turnover Risk.
High portfolio turnover involves correspondingly greater expenses to a Fund,
including brokerage commissions or dealer mark-ups and other transaction costs
on the sale of securities and reinvestments in other securities. Higher
portfolio turnover also may result in higher taxes when Fund shares are held in
a taxable account.
•Prepayment/Extension
Risk. Issuers
may experience an acceleration in prepayments of mortgage loans or other
receivables backing the issuers’ fixed income securities when interest rates
decline, which can shorten the maturity of the security, force the Fund to
invest in securities with lower interest rates, and reduce the Fund’s return.
Issuers may decrease prepayments of principal when interest rates increase,
extending the maturity of a fixed income security and causing the value of the
security to decline.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•Rating
Agencies Risk. Ratings
are not an absolute standard of quality, but rather general indicators that
reflect only the view of the originating rating agencies from which an
explanation of the significance of such ratings may be obtained. There is no
assurance that a particular rating will continue for any given period of time or
that any such rating will not be revised downward or withdrawn entirely if, in
the judgment of the agency establishing the rating, circumstances so warrant. A
downward revision or withdrawal of such ratings, or either of them, may have an
effect on the liquidity or market price of the securities in which the Fund
invests. The ratings of securitized assets may not adequately reflect the credit
risk of those assets due to their structure.
•To
Be Announced (“TBA”) Transactions Risk.
The Fund may enter into TBA transactions to purchase mortgage-related securities
for a fixed price at a future date. TBA purchase commitments involve a risk of
loss if the value of the security to be purchased declines prior to settlement
date or if the counterparty does not deliver the securities as
promised.
•U.S.
Government Securities Risk.
Although the Fund’s U.S. Government securities are considered to be among
the safest investments, they are not guaranteed against price movements due to
changing interest rates. Some obligations issued or guaranteed by
U.S. Government agencies and instrumentalities, including, for example,
Ginnie Mae pass-through certificates, are supported by the full faith and credit
of the U.S. Treasury. Other obligations issued by or guaranteed by federal
agencies, such as those securities issued by Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase certain
obligations of the federal agency, while other obligations issued by or
guaranteed by federal agencies, such as those of the Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the U.S. Treasury.
While the U.S. Government provides financial support to such
U.S. Government-sponsored federal agencies, no assurance can be given that
the U.S. Government will always do so, since the U.S. Government is
not so obligated by law.
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•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing services may be
subject to frequent and significant change, and will vary depending on the
information that is available.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares and Institutional Shares for the 1 year, 5 year,
and since inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/funds/total-return-fund
or by calling 800-540-6807 (toll
free).
Brown
Advisory Total Return Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-14.43%. During the period shown in the chart, the
highest quarterly return
was 8.28% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-3.01% (for the quarter ended December 31,
2016).
Brown
Advisory Total Return Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
Since
Inception (10/30/14) |
Investor
Shares |
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–Return
Before Taxes |
-0.42% |
4.43% |
3.60% |
–Return
After Taxes on Distributions |
-1.53% |
3.04% |
2.32% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
-0.11% |
2.86% |
2.24% |
Institutional
Shares |
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–Return
Before Taxes |
-0.37% |
4.48% |
3.65% |
Bloomberg
US Aggregate Bond Index (reflects no deduction for
fees, expenses and taxes) |
-1.54% |
3.57% |
3.03% |
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend
on an investor’s tax situation and may differ from those shown. In certain
cases, the figure representing “Return after Taxes on Distributions and Sale of
Fund Shares” may be higher than the other return figures for the same period,
since a higher after-tax return results when a capital loss occurs upon
redemption and provides
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an assumed tax deduction that benefits the
investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Institutional Shares will
vary.
Management
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Investment
Adviser |
Portfolio
Manager |
Brown
Advisory LLC |
Chris
Diaz, CFA, Ryan Myerberg, and Colby Stilson have served as the portfolio
managers of the Fund since April 2022. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Sustainable Bond
Fund
Institutional
Shares (BAISX)
Investor
Shares (BASBX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Sustainable
Bond Fund (the “Fund”) seeks to provide a competitive total return consistent
with preservation of principal while giving special consideration to certain
environmental, social and governance (“ESG”)
criteria.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.14% |
0.14% |
0.14% |
Total
Annual Fund Operating Expenses |
0.44% |
0.49% |
0.74% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$45 |
$141 |
$246 |
$555 |
Investor
Shares |
$50 |
$157 |
$274 |
$616 |
Advisor
Shares |
$76 |
$237 |
$411 |
$918 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 113% of the average value of its
portfolio.
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Section – Brown Advisory Sustainable Bond Fund |
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Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in either fixed income
securities of issuers that satisfy the Fund’s ESG criteria or in securities
where the use of the proceeds satisfy the Fund’s ESG criteria. This 80%
investment policy is non-fundamental and may be changed without the vote of
shareholders. Shareholders will receive 60 days’ prior written notice of any
changes to the Fund’s 80% investment policy. The Fund may invest in corporate
fixed income securities, mortgage-backed and asset-backed securities, U.S
Government securities and securities issued by foreign entities including
foreign-sponsored governmental agencies. The fixed income securities in which
the Fund may invest may also include municipal securities issued by states, U.S.
territories and possessions, general obligation securities and revenue
securities. The foregoing may include municipal lease obligations and insured
municipal securities. The Fund may also invest in other investment companies
that invest in similar fixed income securities and the Fund may count such
holdings towards the Fund’s 80% investment policy. The Fund may also engage in
“To Be Announced” transactions. Certain of the fixed income securities that the
Fund may invest in are often commonly referred to as “labeled bonds.” Labeled
bonds include, but are not limited to, “Green Bonds,” “Social Bonds,”
“Sustainability Bonds,” or “Sustainability-Linked Bonds.”
The
Fund invests in fixed income securities that primarily have a maturity that is
between 0 and 30 years and are rated in the top four rating categories of a
Nationally Recognized Statistical Rating Organization, or unrated and deemed to
be of comparable quality by the Adviser. Under normal circumstances, the Fund’s
portfolio will have an average dollar weighted maturity between 6 and 11 years
and an average duration of 3 to 7 years. Duration is a measurement of price
sensitivity to interest rate changes.
The
Fund may invest up to 20% of its assets in high-yield securities (“junk bonds”),
which are speculative in nature. The Fund may invest in securities denominated
in non-U.S. currencies. The Fund may also invest in bank loans.
The
Fund may invest in derivatives instruments, such as options, currency forwards,
futures contracts, including interest rate futures, options on futures, interest
rate swaps and credit default swaps. These investments will typically be made
for investment purposes consistent with the Fund’s investment objective and may
also be used to mitigate or hedge risks within the portfolio or for the
temporary investment of cash balances. These positions may also be used to
manage interest rate risk or to create synthetic exposure to particular credits.
Investments in derivatives may be counted towards the Fund’s 80% investment
policy if they have economic characteristics similar to the other investments
that are included in the Fund’s 80% investment policy. The Fund intends to use
the mark-to-market value of such derivatives for purposes of complying with the
Fund’s 80% investment policy.
The
Adviser utilizes ESG analysis in connection with the Fund's investments in fixed
income securities. ESG factors are considered systematically through leveraging
a repeatable process that strives to minimize risk and capture opportunity. As
part of the fundamental research approach, the Adviser has a process to
integrate, identify and consider the ESG risks and sustainable opportunities
using a proprietary ESG Assessment. Depending on the type of security, the ESG
Assessment may be conducted at the sector, issuer, or security level. Not every
investment will be covered at the issuer or security level. The Fund has access
to this research and considers relevant ESG issues. However, at the Adviser’s
discretion, the Fund is permitted to make an investment without a written ESG
assessment on file at the time of purchase, as long as the Adviser believes the
security meets the Fund’s sustainability criteria.The Fund’s environmental
evaluation considers matters including any one or more of the following factors:
clean and renewable energy, climate change and water conservation, waste
management, natural resource stewardship, and innovative efficiency solutions.
The Fund’s social evaluation factors focus on matters including any one or more
of the following factors: labor management, community relations, supply chain
management, and customer well-being. The Fund’s governance evaluation considers
matters such as stewardship of debt and capital, board governance and
transparency, and business ethics. The outcomes of the Adviser’s ESG research
may result in positive environmental and social impacts. While not a thematic
fund in nature, the nature of the Adviser’s ESG research considers sustainable
investing themes, such as any one or more of sustainable technology innovation,
accessibility of essential services like healthcare, financial inclusion, and
climate mitigation.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to some ESG-related data from third-party providers. The Adviser does
not solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser. The Adviser is permitted to invest in
a security if it determines the security has an acceptable ESG risk profile
notwithstanding contrary third party data or third party recommendations. In
these circumstances, the ESG team may also engage the issuer or relevant
stakeholders of the issuer, when practicable and material to the investment
decision, to gain a deeper understanding of a
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Summary
Section – Brown Advisory Sustainable Bond Fund |
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risk,
promote improved risk management, and/or provide insight on potential
opportunities. Investing on the basis of ESG criteria is qualitative and
subjective by nature, and there can be no assurance that the process utilized by
the Fund’s vendors or any judgment exercised by the Adviser will reflect the
beliefs or values of any particular investor. The data informing this process is
derived from a variety of sources, including issuers themselves and third party
sources. The Fund’s vendors provide ESG-related data, research and rating
services. The ESG-related data, research and rating services include information
related to potentially controversial business exposure, ESG metrics such as
emissions and diversity data and controversy reporting. The Adviser believes its
process is reasonably designed, although such data and qualitative information
are inherently subject to interpretation, restatement, delay and omission
outside the Adviser’s control.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Generally, investment risk
and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by the Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Currency
and Exchange Rate Risk.
Investments in currencies, currency futures contracts, forward currency exchange
contracts or similar instruments, as well as securities that are denominated in
foreign currency, are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies. In addition,
the Fund may engage in currency hedging transactions. Currency hedging
transactions are subject to the risk that a result opposite expectations occurs
(an expected decline turns into a rise and conversely) resulting in a loss to
the Fund.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to changes in the credit ratings of the
Fund’s portfolio of debt securities. Moreover, rising interest rates or lack of
market participants may lead to decreased liquidity in the bond and loan
markets, making it more difficult for the Fund to sell its holdings at a time
when the Fund’s manager might wish to sell. Lower rated securities (“junk
bonds”) are generally subject to greater risk of loss of your money than higher
rated securities. Issuers may (increase) decrease prepayments of principal when
interest rates (fall) increase, affecting the maturity of the debt security and
causing the value of the security to decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
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derivatives
exchange, will fail to make required payments or otherwise fail to comply with
the terms of the contract. The Fund potentially could lose all or a large
portion of its investment in the derivative instrument.
•Environmental,
Social and Governance Policy Risk. The
risk that because the Fund’s ESG criteria exclude securities of certain issuers
for nonfinancial reasons, the Fund may forgo some market opportunities available
to funds that do not use these criteria.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Liquidity
Risk. Certain
fixed income securities held by the Fund may be difficult (or impossible) to
sell at the time and at the price the Adviser would like. As a result, the Fund
may have to hold these securities longer than it would like and may forego other
investment opportunities. There is the possibility that the Fund may lose money
or be prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Market
Risk.
The portfolio securities held by the Fund are susceptible to general market
fluctuations and to volatile increases and decreases in value. The
securities markets may experience declines and the portfolio holdings in the
Fund’s portfolio may not increase their earnings at the rate anticipated.
The Fund’s NAV and investment return will fluctuate based upon changes in the
value of its portfolio securities.
•Mortgage-
and Asset-Backed Securities Risk.
The Fund may invest in mortgage- and asset-backed securities, which represent
“pools” of mortgages or other assets, including consumer loans or receivables
held in trust. In a period of rising interest rates, these securities may
exhibit additional volatility.
•Municipal
Securities Risk. Adverse
economic or political factors in the municipal bond market, including changes in
the tax law, could impact the Fund in a negative manner.
•Non-Investment
Grade (Junk Bond) Securities Risk.
Below investment grade debt securities (also known as “junk bonds”) are
speculative and involve a greater risk of default and price change due to
changes in the issuer’s creditworthiness.
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The
market prices of these debt securities may fluctuate more than the market prices
of investment grade debt securities and may decline significantly in periods of
general economic difficulty.
•Prepayment/Extension
Risk. Issuers
may experience an acceleration in prepayments of mortgage loans or other
receivables backing the issuers’ fixed income securities when interest rates
decline, which can shorten the maturity of the security, force the Fund to
invest in securities with lower interest rates, and reduce the Fund’s return.
Issuers may decrease prepayments of principal when interest rates increase,
extending the maturity of a fixed income security and causing the value of the
security to decline.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•Rating
Agencies Risk. Ratings
are not an absolute standard of quality, but rather general indicators that
reflect only the view of the originating rating agencies from which an
explanation of the significance of such ratings may be obtained. There is no
assurance that a particular rating will continue for any given period of time or
that any such rating will not be revised downward or withdrawn entirely if, in
the judgment of the agency establishing the rating, circumstances so warrant. A
downward revision or withdrawal of such ratings, or either of them, may have an
effect on the liquidity or market price of the securities in which the Fund
invests. The ratings of securitized assets may not adequately reflect the credit
risk of those assets due to their structure.
•Sustainability
Policy Risk. The
Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus.
•To
Be Announced (“TBA”) Transactions Risk.
The Fund may enter into TBA transactions to purchase mortgage-related securities
for a fixed price at a future date. TBA purchase commitments involve a risk of
loss if the value of the security to be purchased declines prior to settlement
date or if the counterparty does not deliver the securities as
promised.
•U.S.
Government Securities Risk.
Although the Fund’s U.S. Government securities are considered to be among
the safest investments, they are not guaranteed against price movements due to
changing interest rates. Some obligations issued or guaranteed by
U.S. Government agencies and instrumentalities, including, for example,
Ginnie Mae pass-through certificates, are supported by the full faith and credit
of the U.S. Treasury. Other obligations issued by or guaranteed by federal
agencies, such as those securities issued by Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase certain
obligations of the federal agency, while other obligations issued by or
guaranteed by federal agencies, such as those of the Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the U.S. Treasury.
While the U.S. Government provides financial support to such
U.S. Government-sponsored federal agencies, no assurance can be given that
the U.S. Government will always do so, since the U.S. Government is
not so obligated by law.
•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing services may be
subject to frequent and significant change, and will vary depending on the
information that is available.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows changes in the Fund’s performance of
Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares and Institutional Shares for the 1 year and since
inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/sustainable-bond-fund
or by calling 800‑540‑6807 (toll
free).
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Brown
Advisory Sustainable Bond Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-14.30%. During the period shown in the chart, the
highest quarterly return
was 6.54% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-2.40% (for the quarter ended March 31,
2021).
Brown
Advisory Sustainable Bond Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
Since
Inception (8/7/17) |
Investor
Shares |
| |
–Return
Before Taxes |
-0.39% |
3.78% |
–Return
After Taxes on Distributions |
-1.29% |
2.55% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
-0.04% |
2.43% |
Institutional
Shares |
| |
–Return
Before Taxes |
-0.34% |
3.83% |
Bloomberg
US Aggregate Bond Index
(reflects no deduction for
fees, expenses and taxes) |
-1.54% |
3.38% |
NOTE: The
Sustainable Bond Fund offers two classes of shares. Investor Shares
commenced operations on August 7, 2017, and Institutional Shares commenced
operations on July 2, 2018. Performance
shown prior to inception of the Institutional Shares is based on the
performance of Investor Shares, adjusted for the lower expenses applicable to
Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. In
certain cases, the figure representing “Return after Taxes on Distributions and
Sale of Fund Shares” may be higher than the other return figures for the same
period, since a higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax deduction that benefits the
investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Institutional Shares will
vary.
Management
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Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Amy
Hauter, CFA, has served as co-portfolio manager of the Fund since its
inception in 2017. Chris Diaz, CFA, and Colby Stilson have served as
co-portfolio managers of the Fund since April 2022.
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Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Maryland Bond
Fund
Institutional
Shares (Not Available for Sale)
Investor
Shares (BIAMX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Maryland
Bond Fund (the “Fund”) seeks to provide a high level of current income exempt
from both Federal and Maryland State income taxes without undue
risk.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.12% |
0.12% |
0.12% |
Total
Annual Fund Operating Expenses |
0.42% |
0.47% |
0.72% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$43 |
$135 |
$235 |
$530 |
Investor
Shares |
$48 |
$151 |
$263 |
$591 |
Advisor
Shares |
$74 |
$230 |
$401 |
$894 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 22% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Maryland Bond Fund |
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Principal Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in Maryland bonds,
including bonds issued on behalf of the State of Maryland, its local governments
and public financing authorities. This 80% policy cannot be changed
without shareholder approval. The Fund may also invest in municipal securities
issued by other states, U.S. territories, and possessions,
U.S. Government securities, general obligation securities and revenue
securities, including private activity bonds. The Adviser determines
which securities to purchase by first evaluating whether a security falls within
the credit guidelines set for the Fund by reviewing the ratings given by a
Nationally Recognized Statistical Rating Organization (an
“NRSRO”). The Adviser then determines the appropriate maturity date
and coupon choice after analyzing the current and targeted portfolio structure,
and whether or not the issue is fairly priced. The Fund is non-diversified which
means that it may invest a significant portion of its assets in the securities
of a single issuer or small number of issuers. Generally, the average weighted
effective maturity of
the Fund’s portfolio securities will be between 4 and 10 years. Normally,
the Fund will invest at least 80% of its total assets in securities the interest
of which is exempt from Federal and Maryland State income taxes, although such
interest may be subject to the Federal alternative minimum tax
(“AMT”). All capital gains are subject to Federal and state
taxes. Municipal securities include municipal bonds, notes, and
leases. Municipal leases are securities that permit government
issuers to acquire property and equipment without the security being subject to
constitutional and statutory requirements for the issuance of long-term fixed
income securities.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
The
Adviser may sell a fixed income security or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the investment criteria;
•A
more attractive security is found; or
•The
Adviser believes that the security has reached its appreciated potential.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal
risk”
of investing in the Fund, regardless of the order in which it appears. The
following are the principal risks that could affect the value of your
investment:
•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Generally, investment risk
and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by a Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to
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Summary
Section – Brown Advisory Maryland Bond Fund |
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changes
in the credit ratings of the Fund’s portfolio of debt securities. Moreover,
rising interest rates or lack of market participants may lead to decreased
liquidity in the bond and loan markets, making it more difficult for the Fund to
sell its holdings at a time when the Fund’s manager might wish to sell. Lower
rated securities (“junk bonds”) are generally subject to greater risk of loss of
your money than higher rated securities. Issuers may (increase) decrease
prepayments of principal when interest rates (fall) increase, affecting the
maturity of the debt security and causing the value of the security to
decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Maryland
Bonds and Municipal Securities Risk. Adverse
economic or political factors in Maryland will affect the Fund’s NAV more than
if the Fund invested in more geographically diverse investments. In addition,
the State of Maryland and the State’s municipal issuers may also be adversely
affected by the economic, social and health risks presented by the ongoing
pandemic which could potentially produce a negative financial impact on the
future economic fundamentals of issuers of Maryland municipal
securities.
•Municipal
Securities Risk.
Adverse economic or political factors in the municipal bond market, including
changes in the tax law, could impact the Fund in a negative manner.
•Non-Diversification
Risk. Investment by the Fund in securities of a
limited number of issuers exposes the Fund to greater market risk and potential
monetary losses than if its assets were diversified among the securities of a
greater number of issuers.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•Tax
Risk.
Municipal securities may decrease in value during times when tax rates are
falling. The Fund’s investments are affected by changes in federal income tax
rates applicable to, or the continuing federal tax-exempt status of, interest
income on municipal obligations. Any proposed or actual changes in such rates or
exempt status, therefore, can significantly affect
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Summary
Section – Brown Advisory Maryland Bond Fund |
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the
liquidity, marketability and supply and demand for municipal obligations, which
would in turn affect the Fund’s ability to acquire and dispose of municipal
obligations at desirable yield and price levels.
•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing services may be
subject to frequent and significant change, and will vary depending on the
information that is available.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows changes in the Fund’s performance of
Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares for 1 year, 5 year. and 10 year periods compare to a
broad-based market index.
The
Fund is the successor to the investment performance of the Brown Advisory
Maryland Bond Fund (the “Predecessor Fund”) as a result of the reorganization of
the Predecessor Fund into the Fund on October 19, 2012. Accordingly, the
performance information shown below for periods prior to October 19, 2012 is
that of the Predecessor Fund. The Predecessor Fund was also advised by the
Adviser and had the same investment objective and strategies as the Fund.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/maryland-bond-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Maryland Bond Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-10.12%. During the periods shown in the chart, the
highest quarterly return
was 2.51% (for the quarter ended March 31, 2019) and
the lowest quarterly return was
-3.07% (for the quarter ended December 31,
2016).
Brown
Advisory Maryland Bond Fund
Average
Annual Total Returns
|
|
|
|
|
|
|
|
|
|
| |
For
the periods ended December 31, 2021 |
1
Year |
5
Years |
10
Years |
Investor
Shares |
|
| |
–Return
Before Taxes |
1.62% |
3.18% |
2.27% |
–Return
After Taxes on Distributions |
1.62% |
3.17% |
2.20% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
1.88% |
3.02% |
2.24% |
Bloomberg
1-10 Year Blended Municipal Bond Index (reflects no deduction for
fees, expenses or taxes) |
0.53% |
3.09% |
2.56% |
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| |
Summary
Section – Brown Advisory Maryland Bond Fund |
|
NOTE: Prior to October 19, 2012,
Investor Shares were known as Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. In certain cases, the figure
representing “Return after Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period, since a higher
after-tax return results when a capital loss occurs upon redemption and provides
an assumed tax deduction that benefits the investor.
After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts.
Management
|
|
|
|
| |
Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Stephen
M. Shutz, CFA, has served as portfolio manager of the Fund since 2014.
Joshua R. Perry, CFA, CAIA, FRM, has served as portfolio manager of the
Fund since 2019, and previously served as associate portfolio manager of
the Fund from 2017 to 2019. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
|
|
|
|
|
|
|
| |
Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
– Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
Distributions
attributable to interest received by the Fund on Maryland municipal obligations
are generally exempt from Federal and Maryland State and local income taxes.
However, such distributions may be subject to alternative the Federal minimum
tax and will generally not be exempt from taxation under the laws of states
other than Maryland. Distributions attributable to taxable interest, dividends
and all capital gains may be subject to Federal and Maryland State and local
taxes, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an IRA, and then you may be taxed later upon withdrawal of your
investment from these tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Tax-Exempt Bond
Fund
Institutional
Shares (BTEIX)
Investor
Shares (BIAEX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Tax-Exempt
Bond Fund (the “Fund”) seeks to provide a high level of current income exempt
from Federal income tax by investing primarily in intermediate-term investment
grade municipal bonds.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
|
|
|
|
|
|
|
|
|
|
| |
Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.11% |
0.11% |
0.11% |
Acquired
Fund Fees and Expenses(1) |
0.01% |
0.01% |
0.01% |
Total
Annual Fund Operating Expenses |
0.42% |
0.47% |
0.72% |
(1)Acquired Fund Fees and
Expenses are indirect fees and expenses that the Fund incurs from investing in
the shares of other mutual funds, including money market funds and exchange
traded funds. Please note that the amount of Total Annual Fund Operating
Expenses shown in the above table will differ from the “Financial Highlights”
section of the Prospectus which reflects the operating expenses of the Fund and
does not include indirect expenses such as Acquired Fund Fees and
Expenses.
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$43 |
$135 |
$235 |
$530 |
Investor
Shares |
$48 |
$151 |
$263 |
$591 |
Advisor
Shares |
$74 |
$230 |
$401 |
$894 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s
|
|
|
|
| |
Summary
Section – Brown Advisory Tax-Exempt Bond Fund |
|
performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 50% of the average value of its
portfolio.
Principal Investment
Strategies
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in securities the interest
of which is exempt from Federal income taxes and that do not subject
shareholders to the federal alternative minimum tax (“AMT”). This 80%
policy cannot be changed without shareholder approval. The Fund may invest up to
20% of its assets in securities that may fully subject shareholders to Federal
income tax, including the AMT. In addition, all capital gains are subject
to Federal and state taxes. The Fund is non-diversified, which means that
it may invest a significant portion of its assets in the securities of a single
issuer or small number of issuers. The Fund may also invest more than
25% of its total assets in municipal bonds that are related in such a way that
an economic, business or political development or change affecting one such
security could also affect the other securities (for example, securities whose
issuers are located in the same state).
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing in municipal securities issued by
states, U.S. territories, and possessions, U.S. Government securities, general
obligation securities and revenue securities, including private activity bonds.
Municipal securities include state and local general obligation bonds, essential
service revenue issues (principally, water and sewer, transportation, public
power, combined utilities and public universities), pre-refunded bonds and
municipal leases. Municipal leases are securities that permit government
issuers to acquire property and equipment without the security being subject to
constitutional and statutory requirements for the issuance of long-term fixed
income securities. To enhance yield, the Fund may also invest in selective
enterprise revenue and/or private activity issues. The repayment of principal
and interest on some of the municipal securities in which the Fund may invest
may be guaranteed or insured by a monoline insurance company or other financial
institution. The Fund also may invest in other investment companies,
principally money market funds.
The
Adviser determines which securities to purchase by first evaluating whether a
security falls within the credit guidelines set for the Fund by reviewing the
ratings given by a Nationally Recognized Statistical Rating Organization (an
“NRSRO”). Under the credit guidelines, the Fund will hold at least 80% of
its total assets in investment grade municipal debt securities, as rated by an
NRSRO when purchased, or if unrated, determined by the Adviser to be of
comparable quality. The credit guidelines provide that the Fund may also hold up
to 20% of its total assets in securities rated below investment grade by an
NRSRO or, if not rated, determined to be of equivalent quality by the Adviser.
Securities that are rated below investment grade by NRSROs are commonly referred
to as “junk bonds.” Such lower rated securities and other municipal
securities may become illiquid due to events relating to the issuer of the
securities, market events, economic conditions or investor perceptions. If
NRSROs assign different ratings to the same security, the Fund will use the
higher rating for purposes of determining the security’s credit
quality.
The
Adviser then determines the appropriate maturity date and coupon choice after
analyzing the current and targeted portfolio structure, and whether or not the
issue is fairly priced. Generally, the average weighted effective maturity
of the Fund’s portfolio securities will be between 4 and 10 years.
In
determining the municipal securities in which the Fund may invest, the Adviser
will use a process for researching securities for purchase that is based on
credit research and involves due diligence on each issuer, state, municipality
and sector relating to a municipal security.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
The
Adviser may sell a security or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the investment criteria;
•A
more attractive security is found; or
|
|
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|
| |
Summary
Section – Brown Advisory Tax-Exempt Bond Fund |
|
•The
Adviser believes that the security has reached its appreciated potential.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Individual issues of
municipal obligations may be subject to the credit risk of the
municipality. Therefore, the issuer may experience unanticipated
financial problems and may be unable to meet its payment
obligations. Municipal obligations held by the Fund may be adversely
affected by political and economic conditions and developments (for example,
legislation reducing federal and/or state aid to local
governments). Generally, investment risk and price volatility
increase as a security’s credit rating declines. Credit ratings are essentially
opinions of the credit quality of an issuer and may prove to be
inaccurate.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio of debt securities. Moreover, rising
interest rates or lack of market participants may lead to decreased liquidity in
the bond and loan markets, making it more difficult for the Fund to sell its
holdings at a time when the Fund’s manager might wish to sell. Lower rated
securities (“junk bonds”) are generally subject to greater risk of loss of your
money than higher rated securities. Issuers may (increase) decrease prepayments
of principal when interest rates (fall) increase, affecting the maturity of the
debt security and causing the value of the security to decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
|
|
|
|
| |
Summary
Section – Brown Advisory Tax-Exempt Bond Fund |
|
•Investments
in Other Investment Companies Risk. Shareholders
of the Fund will indirectly be subject to the fees and expenses of the other
investment companies (principally, money market funds) in which the Fund
invests, and these fees and expenses are in addition to the fees and expenses
that Fund shareholders directly bear in connection with the Fund’s own
operations. In addition, shareholders will be exposed to the investment risks
associated with investments in the other investment companies.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Maturity
Risk.
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield.
•Municipal
Securities Risk. Changes
in economic, business or political conditions relating to a particular state, or
states, or type of projects may have a disproportionate impact on the Fund.
Municipalities continue to experience difficulties in the current economic and
political environment. National governmental actions, such as the elimination of
tax-exempt status, also could affect performance. In addition, a municipality or
municipal project that relies directly or indirectly on national governmental
funding mechanisms may be negatively affected by the national government’s
current budgetary constraints. Municipal obligations that the Fund may acquire
include municipal lease obligations, which are issued by a state or local
government or authority to acquire land and a wide variety of equipment and
facilities. If the funds are not appropriated for the following year’s lease
payments, then the lease may terminate, with the possibility of default on the
lease obligation and significant loss to the Fund. The repayment of principal
and interest on some of the municipal securities in which the Fund may invest
may be guaranteed or insured by a monoline insurance company or other financial
institution. If a company insuring municipal securities in which the Fund
invests experiences financial difficulties, the credit rating and price of the
security may deteriorate. The credit and quality of private activity bonds are
usually related to the credit of the corporate user of the facilities and
therefore such bonds are subject to the risks of the corporate user. The Fund
may invest more heavily in bonds from certain cities, states or regions than
others, which may increase the Fund’s exposure to losses resulting from
economic, political, or regulatory occurrences impacting these particular
cities, states or regions.
•Non-Diversification
Risk. Investment by the Fund in securities of a
limited number of issuers exposes the Fund to greater market risk and potential
monetary losses than if its assets were diversified among the securities of a
greater number of issuers.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•Tax
Risk.
Municipal securities may decrease in value during times when tax rates are
falling. The Fund’s investments are affected by changes in federal
income tax rates applicable to, or the continuing federal tax-exempt status of,
interest income on municipal obligations. Any proposed or actual
changes in such rates or exempt status, therefore, can significantly affect the
liquidity, marketability and supply and demand for municipal obligations, which
would in turn affect the Fund’s ability to acquire and dispose of municipal
obligations at desirable yield and price levels.
•Valuation
Risk. The prices provided by pricing services or
independent dealers or the fair value determinations made by the Adviser may be
different from the prices used by other mutual funds or from the prices at which
securities are actually bought and sold. The prices of certain
securities provided by pricing services may be subject to frequent and
significant change, and will vary depending on the information that is
available.
|
|
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|
| |
Summary
Section – Brown Advisory Tax-Exempt Bond Fund |
|
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares and Institutional Shares for the 1 year, 5 year,
and since inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/tax-exempt-bond-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Tax-Exempt Bond Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-11.32%. During the period shown in the chart, the
highest quarterly return
was 2.82% (for the quarter ended December 31, 2020)
and the lowest quarterly return was
-3.18% (for the quarter ended March 31,
2020).
Brown
Advisory Tax-Exempt Bond Fund
Average
Annual Total Returns
|
|
|
|
|
|
|
|
|
|
| |
For
the periods ended December 31, 2021 |
1
Year |
5
Years |
Since
Inception (6/29/12) |
Investor
Shares |
|
| |
–Return
Before Taxes |
2.79% |
4.14% |
2.95% |
–Return
After Taxes on Distributions |
2.67% |
4.09% |
2.91% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
2.76% |
3.85% |
2.83% |
Institutional
Shares |
|
| |
–Return
Before Taxes |
2.94% |
4.19% |
3.00% |
Bloomberg
1-10 Year Blended Municipal Bond Index
(reflects no deduction for
fees, expenses and taxes) |
0.53% |
3.09% |
2.50% |
NOTE: The
Tax-Exempt Bond Fund offers two classes of shares. Investor Shares
commenced operations on June 29, 2012, and Institutional Shares commenced
operations on July 2, 2018. Performance
shown prior to inception of the Institutional Shares is based on the
performance of Investor Shares, adjusted for the lower expenses applicable to
Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. In
certain cases, the figure representing “Return after Taxes on Distributions and
Sale of Fund Shares” may be higher than the other return figures for the same
period, since a higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax deduction that benefits the
investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Institutional Shares will
vary.
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|
| |
Summary
Section – Brown Advisory Tax-Exempt Bond Fund |
|
Management
|
|
|
|
| |
Investment
Advisor |
Portfolio
Manager |
Brown
Advisory LLC |
Stephen
M. Shutz, CFA, has served as portfolio manager of the Fund since 2012.
Joshua R. Perry, CFA, CAIA, FRM, has served as portfolio manager of the
Fund since 2019, and previously served as associate portfolio manager of
the Fund from 2017 to 2019. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
|
|
|
|
|
|
|
| |
Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
It
is anticipated that the Fund’s distributions will generally be exempt from
Federal income taxes, including Federal alternative minimum tax. However, a
portion of the Fund’s distributions may not qualify as exempt. Distributions
attributable to taxable interest, dividends and all capital gains may be subject
to Federal, state and Federal alternative minimum tax, unless you are investing
through a tax-deferred arrangement, such as a 401(k) plan or an IRA, and then
you may be taxed later upon withdrawal of your investment from these
tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Tax-Exempt Sustainable Bond
Fund
Institutional
Shares (Not Available for Sale)
Investor
Shares (BITEX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Tax-Exempt
Sustainable Bond Fund (the “Fund”) seeks to provide a high level of current
income exempt from Federal income tax by investing primarily in
intermediate-term investment grade municipal bonds while giving special
consideration to certain environmental, social, and governance (“ESG”)
criteria.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on
Redemptions (as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.14% |
0.14% |
0.14% |
Total
Annual Fund Operating Expenses |
0.44% |
0.49% |
0.74% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$45 |
$141 |
$246 |
$555 |
Investor
Shares |
$50 |
$157 |
$274 |
$616 |
Advisor
Shares |
$76 |
$237 |
$411 |
$918 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
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Summary
Section – Brown Advisory Tax-Exempt Sustainable Bond Fund |
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account. These costs, which are not
reflected in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the portfolio turnover rate for
the Fund was 61% of the average value of its
portfolio.
Principal Investment
Strategies
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in fixed income securities
the interest of which is exempt from Federal income taxes, that do not subject
shareholders to the federal alternative minimum tax (“AMT”), and that have
either a bond issuer or a use of proceeds of the bond issuance that satisfies
the Fund’s Environmental,
Social and Governance (“ESG”) criteria.
This 80% policy cannot be changed without shareholder approval. The Fund may
invest up to 20% of its assets in securities that may fully subject shareholders
to Federal income tax, including the AMT. In addition, all capital gains
are subject to Federal and state taxes. The Fund is non-diversified, which
means that it may invest a significant portion of its assets in the securities
of a single issuer or small number of issuers. The Fund may also
invest more than 25% of its total assets in municipal bonds that are related in
such a way that an economic, business or political development or change
affecting one such security could also affect the other securities (for example,
securities whose issuers are located in the same state). Certain of the fixed
income securities that the Fund may invest in are often referred to as “labeled
bonds.” Labeled bonds include, but are not limited to, “Green Bonds”, “Social
Bonds”, “Sustainability Bonds,” or “Sustainability-Linked Bonds”.
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing in municipal securities issued by
states, U.S. territories, and possessions, U.S. Government securities, general
obligation securities and revenue securities, including private activity bonds.
Municipal securities include state and local general obligation bonds, essential
service revenue issues (principally, water and sewer, transportation, public
power, combined utilities and public universities), pre-refunded bonds and
municipal leases. The Fund may also invest in private placements in these
types of securities. Municipal leases are securities that permit
government issuers to acquire property and equipment without the security being
subject to constitutional and statutory requirements for the issuance of
long-term fixed income securities. To enhance yield, the Fund may also
invest in selective enterprise revenue and/or private activity issues. The
repayment of principal and interest on some of the municipal securities in which
the Fund may invest may be guaranteed or insured by a monoline insurance company
(a bond insurer) or other financial institution. The Fund also may invest
in other investment companies, principally money market funds.
The
Adviser determines which securities to purchase by first evaluating whether a
security falls within the credit guidelines set for the Fund by reviewing the
ratings given by a Nationally Recognized Statistical Rating Organization (an
“NRSRO”). Under the credit guidelines, the Fund will hold at least 80% of
its total assets in investment grade municipal debt securities, as rated by an
NRSRO when purchased, or if unrated, determined by the Adviser to be of
comparable quality. The credit guidelines provide that the Fund may also hold up
to 20% of its total assets in securities rated below investment grade by an
NRSRO or, if not rated, determined to be of equivalent quality by the Adviser.
Securities that are rated below investment grade by NRSROs are commonly referred
to as “junk bonds.” Such lower rated securities and other municipal
securities may become illiquid due to events relating to the issuer of the
securities, market events, economic conditions or investor perceptions. If
NRSROs assign different ratings to the same security, the Fund will use the
higher rating for purposes of determining the security’s credit
quality.
The
Adviser then determines the appropriate maturity date and coupon choice after
analyzing the current and targeted portfolio structure, and whether or not the
issue is fairly priced. Generally, the average weighted effective maturity
of the Fund’s portfolio securities will be between 4 and 10 years.
In
determining the municipal securities in which the Fund may invest, the Adviser
will use a process for researching securities for purchase that is based on
intensive credit research and involves extensive due diligence on each issuer,
state, municipality and sector relating to a municipal security.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
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Summary
Section – Brown Advisory Tax-Exempt Sustainable Bond Fund |
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The
Adviser utilizes ESG analysis in connection with the Fund's investments in
fixed-income securities. ESG factors are considered systematically through
leveraging a repeatable process that strives to minimize risk and capture
opportunity. As part of the fundamental research approach, the Adviser has a
process to integrate, identify and consider the ESG risks and sustainable
opportunities using a proprietary ESG Assessment. The ESG Assessment may be
conducted at the sector, issuer or security level. Not every investment will be
covered at the issuer or security level. The Fund has access to this research
and considers relevant ESG issues. However,
at the Adviser’s discretion, the Fund is permitted to make an investment without
a written ESG assessment on file at the time of purchase, as long as the Adviser
believes the security meets the Fund’s sustainability criteria. The
Fund's environmental evaluation considers matters including any one or more of
the following factors: clean and renewable energy, climate change and water
conservation, efficient mass transit and innovative efficiency solutions. The
Fund's social evaluation factors focus on matters including any one or more of
the following factors: economic impact, access
to affordable healthcare and community health promotion, and access to education
opportunities. The Fund's governance evaluation considers matters such as
stewardship of debt and capital, and board governance and transparency. The
outcomes of the Adviser’s ESG research may result in positive environmental and
social impacts. While not a thematic fund in nature, the nature of the Adviser's
ESG research considers
sustainable investing themes, such as any one or more of responsible water
management, accessibility of essential services like healthcare, transportation,
education, and climate mitigation.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to some ESG-related data from third-party providers. The Adviser does
not solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser.
The
Adviser is permitted to invest in a security if it determines the security has
an acceptable ESG risk profile notwithstanding contrary third party data or
third party recommendations. In these circumstances, the ESG team may also
engage the issuer or relevant stakeholders of the issuer, when practicable and
material to the investment decision, to gain a deeper understanding of a risk,
promote improved risk management, and/or provide insight on potential
opportunities.
Investing
on the basis of ESG criteria is qualitative and subjective by nature, and there
can be no assurance that the process utilized by the Fund’s vendors or any
judgment exercised by the Adviser will reflect the beliefs or values of any
particular investor.
The
data informing this process is derived from a variety of sources, including
issuers themselves and third party sources, credit rating agencies, government
databases, and news outlets. The Adviser believes its process is reasonably
designed, although data and qualitative information are inherently subject to
interpretation, restatement, delay and omission outside the Adviser’s
control.
•The
Adviser may sell a security or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the investment criteria;
•A
more attractive security is found;
•The
Adviser believes that the security has reached its appreciated potential;
or
•The
investment no longer meets the Fund’s ESG criteria.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment
Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the
Fund. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
Fund’s principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that
could affect the value of your investment:
•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Individual issues of
municipal obligations may be subject to the credit risk of the
municipality. Therefore,
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Summary
Section – Brown Advisory Tax-Exempt Sustainable Bond Fund |
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the
issuer may experience unanticipated financial problems and may be unable to meet
its payment obligations. Municipal obligations held by the Fund may
be adversely affected by political and economic conditions and developments (for
example, legislation reducing federal and/or state aid to local
governments). Generally, investment risk and price volatility
increase as a security’s credit rating declines. Credit ratings are essentially
opinions of the credit quality of an issuer and may prove to be
inaccurate.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. The value of your investment in the
Fund may change in response to changes in the credit ratings of the Fund’s
portfolio of debt securities. Over the past several years, the Federal Reserve
has maintained the level of interest rates at or near historic lows, however,
more recently, interest rates have begun to increase as a result of action that
has been taken by the Federal Reserve which has raised, and may continue to
raise, interest rates, which may negatively impact the Fund’s performance or
otherwise adversely impact the Fund.
Moreover,
rising interest rates or lack of market participants may lead to decreased
liquidity in the bond and loan markets, making it more difficult for the Fund to
sell its holdings at a time when the Fund’s manager might wish to sell. Lower
rated securities (“junk bonds”) are generally subject to greater risk of loss of
your money than higher rated securities. Issuers may (increase) decrease
prepayments of principal when interest rates (fall) increase, affecting the
maturity of the debt security and causing the value of the security to
decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Environmental,
Social and Governance Policy Risk. The
risk that because the Fund’s ESG criteria exclude securities of certain issuers
for nonfinancial reasons, the Fund may forgo some market opportunities available
to funds that do not use these criteria.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
•Investments
in Other Investment Companies Risk. Shareholders
of the Fund will indirectly be subject to the fees and expenses of the other
investment companies (principally, money market funds) in which the Fund
invests, and these fees and expenses are in addition to the fees and expenses
that Fund shareholders directly bear in connection with the Fund’s own
operations. In addition, shareholders will be exposed to the investment risks
associated with investments in the other investment companies.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the
Fund.
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Summary
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•Maturity
Risk.
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield.
•Municipal
Securities Risk. Changes
in economic, business or political conditions relating to a particular state, or
states, or type of projects may have a disproportionate impact on the Fund.
Municipalities continue to experience difficulties in the current economic and
political environment. National governmental actions, such as the elimination of
tax-exempt status, also could affect performance. In addition, a municipality or
municipal project that relies directly or indirectly on national governmental
funding mechanisms may be negatively affected by the national government’s
current budgetary constraints. Municipal obligations that the Fund may acquire
include municipal lease obligations, which are issued by a state or local
government or authority to acquire land and a wide variety of equipment and
facilities. If the funds are not appropriated for the following year’s lease
payments, then the lease may terminate, with the possibility of default on the
lease obligation and significant loss to the Fund. The repayment of principal
and interest on some of the municipal securities in which the Fund may invest
may be guaranteed or insured by a monoline insurance company (a bond insurer) or
other financial institution. If a company insuring municipal securities in which
the Fund invests experiences financial difficulties, the credit rating and price
of the security may deteriorate. The credit and quality of private activity
bonds are usually related to the credit of the corporate user of the facilities
and therefore such bonds are subject to the risks of the corporate user. The
Fund may invest more heavily in bonds from certain cities, states or regions
than others, which may increase the Fund’s exposure to losses resulting from
economic, political, or regulatory occurrences impacting these particular
cities, states or regions.
•Non-Diversification
Risk. Investment by the Fund in securities of a
limited number of issuers exposes the Fund to greater market risk and potential
monetary losses than if its assets were diversified among the securities of a
greater number of issuers.
•Non-Investment
Grade (“Junk Bond”) Securities Risk. Securities
rated below investment grade, i.e.,
Ba or BB and lower (“junk bonds”), are subject to greater risks of loss of your
money than higher rated securities. Compared with issuers of investment grade
fixed-income securities, junk bonds are more likely to encounter financial
difficulties and to be materially affected by these difficulties.
•Private
Placement Risk.
The Fund may invest in privately issued securities, including those which may be
resold only in accordance with Rule 144A under the Securities Act of 1933,
as amended. Privately issued securities are restricted securities that are not
publicly traded. Delay or difficulty in selling such securities may result in a
loss to the Fund.
•Rating
Agencies Risk. Ratings
are not an absolute standard of quality, but rather general indicators that
reflect only the view of the originating rating agencies from which an
explanation of the significance of such ratings may be obtained. There is no
assurance that a particular rating will continue for any given period of time or
that any such rating will not be revised downward or withdrawn entirely if, in
the judgment of the agency establishing the rating, circumstances so warrant. A
downward revision or withdrawal of such ratings, or either of them, may have an
effect on the liquidity or market price of the securities in which the Fund
invests. The ratings of securitized assets may not adequately reflect the credit
risk of those assets due to their structure.
•Sustainability
Policy Risk.
The Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus.
•Tax
Risk.
Municipal securities may decrease in value during times when tax rates are
falling. The Fund’s investments are affected by changes in federal
income tax rates applicable to, or the continuing federal tax-exempt status of,
interest income on municipal obligations. Any proposed or actual
changes in such rates or exempt status, therefore, can significantly affect the
liquidity, marketability and supply and demand for municipal obligations, which
would in turn affect the Fund’s ability to acquire and dispose of municipal
obligations at desirable yield and price levels.
•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing
services may be subject to frequent and significant change, and will vary
depending on the information that is available.
Performance
Information
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Summary
Section – Brown Advisory Tax-Exempt Sustainable Bond Fund |
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The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of Investor Shares for the 1 year and since inception periods compare to
a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.https://www.brownadvisory.com/mf/funds/tax-exempt-sustainable-bond-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Tax-Exempt Sustainable Bond Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-11.39%. During the period shown in the chart, the
highest quarterly return
was 1.83% (for the quarter ended June 30, 2021) and
the lowest quarterly return was
-1.62% (for the quarter ended March 31,
2020).
Brown
Advisory Tax-Exempt Sustainable Bond Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
Since
Inception (12/02/2019) |
Investor
Shares |
| |
–Return
Before Taxes |
2.55% |
2.31% |
–Return
After Taxes on Distributions |
2.21% |
2.13% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
2.13% |
2.03% |
Bloomberg
1-10 Year Blended Municipal Bond Index
(reflects no deduction for
fees, expenses and taxes) |
0.53% |
2.45% |
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax
returns shown are not relevant to investors who hold their Fund shares through
tax-deferred arrangements such as 401(k) plans or individual retirement
accounts.
Management
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Investment
Adviser |
Portfolio
Managers |
Brown
Advisory LLC |
Stephen
M. Shutz, CFA, and Amy Hauter, CFA, have served as portfolio managers of
the Fund since its inception in 2019. |
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Summary
Section – Brown Advisory Tax-Exempt Sustainable Bond Fund |
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Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
Standard
Accounts |
$100 |
$100 |
Traditional
and Roth IRA Accounts |
$100 |
N/A |
Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
Standard
Accounts |
$100 |
$100 |
Traditional
and Roth IRA Accounts |
$100 |
N/A |
Accounts
with Systematic Investment Plans |
$100 |
$100 |
Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
It
is anticipated that the Fund’s distributions will generally be exempt from
Federal income taxes, including Federal alternative minimum tax. However, a
portion of the Fund’s distributions may not qualify as exempt. Distributions
attributable to taxable interest, dividends and all capital gains may be subject
to Federal, state and Federal alternative minimum tax, unless you are investing
through a tax-deferred arrangement, such as a 401(k) plan or an IRA, and then
you may be taxed later upon withdrawal of your investment from these
tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Mortgage Securities
Fund
Institutional
Shares (BAFZX)
Investor
Shares (BIAZX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory Mortgage
Securities Fund (the “Fund”) seeks to maximize total return consistent with
preservation of capital.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.30% |
0.30% |
0.30% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.05% |
0.05% |
Other
Expenses |
0.14% |
0.14% |
0.14% |
Total
Annual Fund Operating Expenses |
0.44% |
0.49% |
0.74% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$45 |
$141 |
$246 |
$555 |
Investor
Shares |
$50 |
$157 |
$274 |
$616 |
Advisor
Shares |
$76 |
$237 |
$411 |
$918 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 204% of the average value of its
portfolio.
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Summary
Section – Brown Advisory Mortgage Securities Fund |
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Principal Investment
Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in investment grade
mortgage-related securities. Mortgage-related securities consist of
mortgage-backed securities (“MBS”) such as residential mortgage-backed
securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), stripped
mortgage-backed securities (“SMBS”), collateralized mortgage obligations
(“CMOs”), inverse floating rate obligations and other similar types of
securities representing an interest in or that are secured by mortgages. The
Fund may also engage in “To Be Announced” transactions and it may invest in
municipal housing bonds and other investment companies. The Fund invests in
securities of various maturities and durations.
The
Fund will hold at least 80% of its total assets in investment grade
mortgage-related securities, that is, securities rated in the top four ratings
categories as rated at the time of purchase by a Nationally Recognized
Statistical Rating Organization (an “NRSRO”), or if unrated, as determined by
the Adviser to be of comparable quality. The Fund may also hold up to 20% of its
total assets in securities that are rated below investment grade by an NRSRO or,
if not rated, determined to be of equivalent quality by the Adviser. Securities
that are rated below investment grade by independent rating agencies are
commonly referred to as “junk bonds.” If independent rating agencies assign
different ratings to the same security, the Fund will use the higher rating for
purposes of determining the security’s credit quality.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
The
Adviser may sell a security or reduce its position if:
•Revised
economic outlook requires a repositioning of the portfolio or alters the
risk/reward of a given security
•Changes
in a security’s composition, such as faster or slower prepayments than expected,
alter its risk/reward balance to an unfavorable position
•A
more attractive security is found or
•The
Adviser believes the security has reached its appreciation
potential.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment
Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal
risk”
of investing in the Fund, regardless of the order in which it appears. The
following are the principal risks that could affect the value of your
investment:
•Credit
Risk.
The value of your investment in the Fund may change in response to changes in
the credit ratings of the Fund’s portfolio securities. Generally, investment
risk and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by a Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Debt/Fixed
Income Securities Risk. An
increase in interest rates typically causes a fall in the value of the debt
securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. The value of your investment
in the Fund may change in response to
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Summary
Section – Brown Advisory Mortgage Securities Fund |
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changes
in the credit ratings of the Fund’s portfolio of debt securities. Moreover,
rising interest rates or lack of market participants may lead to decreased
liquidity in the bond and loan markets, making it more difficult for the Fund to
sell its holdings at a time when the Fund’s manager might wish to sell. Lower
rated securities (“junk bonds”) are generally subject to greater risk of loss of
your money than higher rated securities. Issuers may (increase) decrease
prepayments of principal when interest rates (fall) increase, affecting the
maturity of the debt security and causing the value of the security to
decline.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Interest
Rate Risk. An
increase in interest rates typically causes a fall in the value of the fixed
income securities in which the Fund may invest. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund.
•Investments
in Other Investment Companies Risk. Shareholders
of the Fund will indirectly be subject to the fees and expenses of the other
investment companies (principally, money market funds) in which the Fund
invests, and these fees and expenses are in addition to the fees and expenses
that Fund shareholders directly bear in connection with the Fund’s own
operations. In addition, shareholders will be exposed to the investment risks
associated with investments in the other investment companies.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Adviser’s success or
failure to implement investment strategies for the Fund.
•Market
Risk.
The portfolio securities held by the Fund are susceptible to general market
fluctuations and to volatile increases and decreases in value. The securities
markets may experience declines and the holdings in the Fund’s portfolio may not
increase their earnings at the rate anticipated.
•Mortgage-Related
Securities Risk.
Mortgage-related securities are subject to prepayment risk as well as the risks
associated with investing in debt securities in general. If interest rates fall
and the loans underlying these securities are prepaid faster than expected, the
Fund may have to reinvest the prepaid principal in lower yielding securities,
thus reducing the Fund’s income. Conversely, if interest rates increase and the
loans underlying the securities are prepaid more slowly than expected, the
expected duration of the securities may be extended, reducing the cash flow for
potential reinvestment in higher yielding securities.
•Municipal
Securities Risk.
Adverse economic or political factors in the municipal bond market, including
changes in the tax law, could impact the Fund in a negative manner.
•Non-Investment
Grade ("Junk Bond") Securities Risk. Below
investment grade debt securities (also known as “junk bonds”) are speculative
and involve a greater risk of default and price change due to changes in the
issuer’s creditworthiness.
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Summary
Section – Brown Advisory Mortgage Securities Fund |
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The
market prices of these debt securities may fluctuate more than the market prices
of investment grade debt securities and may decline significantly in periods of
general economic difficulty.
•Portfolio
Turnover Risk.
High portfolio turnover involves correspondingly greater expenses to a Fund,
including brokerage commissions or dealer mark-ups and other transaction costs
on the sale of securities and reinvestments in other securities. Higher
portfolio turnover also may result in higher taxes when Fund shares are held in
a taxable account.
•Prepayment/Extension
Risk. Issuers
may experience an acceleration in prepayments of mortgage loans or other
receivables backing the issuers’ fixed income securities when interest rates
decline, which can shorten the maturity of the security, force the Fund to
invest in securities with lower interest rates, and reduce the Fund’s return.
Issuers may decrease prepayments of principal when interest rates increase,
extending the maturity of a fixed income security and causing the value of the
security to decline.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•Rating
Agencies Risk. Ratings
are not an absolute standard of quality, but rather general indicators that
reflect only the view of the originating rating agencies from which an
explanation of the significance of such ratings may be obtained. There is no
assurance that a particular rating will continue for any given period of time or
that any such rating will not be revised downward or withdrawn entirely if, in
the judgment of the agency establishing the rating, circumstances so warrant. A
downward revision or withdrawal of such ratings, or either of them, may have an
effect on the liquidity or market price of the securities in which the Fund
invests. The ratings of securitized assets may not adequately reflect the credit
risk of those assets due to their structure.
•To
Be Announced (“TBA”) Transactions Risk.
The Fund may enter into TBA transactions to purchase mortgage-related securities
for a fixed price at a future date. TBA purchase commitments involve a risk of
loss if the value of the security to be purchased declines prior to settlement
date or if the counterparty does not deliver the securities as
promised.
•U.S.
Government Securities Risk.
Although the Fund’s U.S. Government securities are considered to be among
the safest investments, they are not guaranteed against price movements due to
changing interest rates. Some obligations issued or guaranteed by
U.S. Government agencies and instrumentalities, including, for example,
Ginnie Mae pass-through certificates, are supported by the full faith and credit
of the U.S. Treasury. Other obligations issued by or guaranteed by federal
agencies, such as those securities issued by Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase certain
obligations of the federal agency, while other obligations issued by or
guaranteed by federal agencies, such as those of the Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the U.S. Treasury.
While the U.S. Government provides financial support to such
U.S. Government-sponsored federal agencies, no assurance can be given that
the U.S. Government will always do so, since the U.S. Government is
not so obligated by law.
•Valuation
Risk. The prices provided by pricing services or
independent dealers or the fair value determinations made by the Adviser may be
different from the prices used by other mutual funds or from the prices at which
securities are actually bought and sold. The prices of certain securities
provided by pricing services may be subject to frequent and significant change,
and will vary depending on the information that is available.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares and Institutional Shares for the 1 year, 5 year,
and since inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/mortgage-securities-fund
or by calling 800‑540‑6807 (toll
free).
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Summary
Section – Brown Advisory Mortgage Securities Fund |
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Brown
Advisory Mortgage Securities Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-11.85%. During the period shown in the chart, the
highest quarterly return
was 2.49% (for the quarter ended March 31, 2019) and
the lowest quarterly return was
-2.71% (for the quarter ended December 31,
2016).
Brown
Advisory Mortgage Securities Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
Since
Inception (12/26/13) |
Investor
Shares |
|
| |
–Return
Before Taxes |
-0.30% |
3.00% |
2.81% |
–Return
After Taxes on Distributions |
-0.60% |
2.26% |
1.86% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
-0.18% |
1.98% |
1.73% |
Institutional
Shares |
|
| |
–Return
Before Taxes |
-0.34% |
3.01% |
2.85% |
Bloomberg
Mortgage Backed Securities Index
(reflects no deduction for
fees, expenses and taxes) |
-1.04% |
2.50% |
2.73% |
NOTE: The Mortgage
Securities Fund offers two classes of shares. Investor Shares
commenced operations on December 26, 2013 and Institutional Shares commenced
operations on May 13, 2014. Performance
shown prior to inception of the Institutional Shares is based on the
performance of Investor Shares, adjusted for the lower expenses applicable to
Institutional Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. In
certain cases, the figure representing “Return after Taxes on Distributions and
Sale of Fund Shares” may be higher than the other return figures for the same
period, since a higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax deduction that benefits the
investor. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Institutional Shares will
vary.
Management
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Investment
Adviser |
Portfolio
Manager |
Brown
Advisory LLC |
Garritt
Conover, CFA, CAIA, has served as lead portfolio manager to the Fund since
April 2022, and Chris Roof has served as associate portfolio manager of
the Fund since April 2022. |
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Summary
Section – Brown Advisory Mortgage Securities Fund |
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Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory – WMC Strategic European Equity
Fund
Institutional
Shares (BAFHX)
Investor
Shares (BIAHX)
Advisor
Shares (BAHAX)
Investment Objective
The Brown Advisory − WMC
Strategic European Equity Fund (the “Fund”) seeks to achieve total return by
investing principally in equity securities issued by companies established or
operating in Europe.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.90% |
0.90% |
0.90% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.14% |
0.14% |
0.14% |
Total
Annual Fund Operating Expenses |
1.04% |
1.19% |
1.44% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$106 |
$331 |
$574 |
$1,271 |
Investor
Shares |
$121 |
$378 |
$654 |
$1,443 |
Advisor
Shares |
$147 |
$456 |
$787 |
$1,724 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 43% of the average value of its
portfolio.
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Summary
Section – Brown Advisory – WMC Strategic European Equity Fund |
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Principal Investment
Strategies
Under
normal conditions, the Brown Advisory − WMC Strategic European Equity Fund seeks
to achieve its investment objective by investing at least 80% of the value of
its net assets (plus any borrowings for investment purposes) in equity
securities of companies which are domiciled in or exercise the predominant part
of their economic activity in Europe – defined as countries included in the MSCI
Europe Index.
In
determining whether a company is domiciled in or exercises the predominant part
of its economic activity in Europe, the Fund will consider any one of the
following four factors when making its determination: (i) country of
organization; (ii) primary securities trading market; (iii) location of assets;
or (iv) country where the company derives at least half of its revenue or
profits. As of September 30, 2022, the following countries were included in the
MSCI Europe Index: Austria, Belgium, Denmark, Finland, France, Germany, Ireland,
Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the
United Kingdom.
The
Fund may purchase equity securities of companies of any size capitalization.
Equity securities in which the Fund may invest include common stock, preferred
stock, equity-equivalent securities such as stock futures contracts or
convertible securities, equity options, other investment companies, American
Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), real estate
investment trusts (“REITs”) and exchange traded funds (“ETFs”).
The
Fund may invest up to 20% of its net assets in securities of companies that are
established or operating in countries that are considered to be outside of
Europe, which may include less developed and emerging markets countries as well
as other developed market countries.
The
Fund may utilize options, futures contracts, currency forwards, swaps and
options on futures. These investments will typically be made for investment
purposes consistent with the Fund’s investment objective and may also be used to
mitigate or hedge risks within the portfolio or for the temporary investment of
cash balances. The Fund may also invest in participatory notes which are
instruments that are used to replicate the performance of certain underlying
issuers and markets. By investing in derivatives, the Fund attempts to achieve
the economic equivalence it would achieve if it were to invest directly in the
underlying security. Investments in derivatives may be counted towards the
Fund’s 80% investment policy if they have economic characteristics similar to
the other investments that are included in the Fund’s 80% investment policy. The
Fund intends to use the mark-to-market value of such derivatives for purposes of
complying with the Fund’s 80% investment policy.
The
Fund may sell its portfolio securities for a variety of reasons, such as to
secure gains, limit losses, or redeploy assets into more promising
opportunities.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Principal Investment
Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the
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Summary
Section – Brown Advisory – WMC Strategic European Equity Fund |
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deposited
securities are not passed through. GDRs can involve currency risk since, unlike
ADRs, they may not be U.S. dollar-denominated.
•Credit
Risk.
The value of your investment in the Fund may change in response to changes in
the credit ratings of the Fund’s portfolio securities. Generally, investment
risk and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by a Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Currency
and Exchange Rate Risk.
Investments in currencies, currency futures contracts, forward currency exchange
contracts or similar instruments, as well as securities that are denominated in
foreign currency, are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies. In addition,
the Fund may engage in currency hedging transactions. Currency hedging
transactions are subject to the risk that a result opposite expectations occurs
(an expected decline turns into a rise and conversely) resulting in a loss to
the Fund.
•Derivatives
Risk.
The risk that an investment in derivatives will not perform as anticipated,
cannot be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their investments. Emerging market countries may have policies
that restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and frequent trading of ETFs by the Fund can generate brokerage expenses.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the
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Summary
Section – Brown Advisory – WMC Strategic European Equity Fund |
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individual
ETFs in which the Fund invests and these fees and expenses are in addition to
the fees and expenses that Fund shareholders directly bear in connection with
the Fund’s own operations.
•European
Securities Risk.
Because a significant portion of the assets of the Fund are invested in European
securities, the Fund’s performance is expected to be impacted by the political,
social and economic environment within Europe. As such, the Fund’s performance
may be more volatile than the performance of funds that are more geographically
diverse.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller competitors.
Also, large capitalization companies are sometimes unable to attain the high
growth rates of successful, smaller companies, especially during extended
periods of economic expansion.
•Large
Investor Risk. Ownership
of shares of the Fund may be concentrated in one or more large investors. These
investors may redeem shares in substantial quantities or on a frequent basis,
which may negatively impact the Fund’s performance, may increase realized
capital gains, may accelerate the realization of taxable income to other
shareholders and may potentially limit the use of available capital loss
carryforwards or certain other losses to offset any future realized capital
gains. Large investor redemption activity also may increase the Fund’s brokerage
and other expenses.
•Liquidity
Risk.
Certain securities held by the Fund may be difficult (or impossible) to sell at
the time and at the price the Fund would like. As a result, the Fund may have to
hold these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Sub-Adviser’s
success or failure to implement investment strategies for the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Smaller
and Medium Capitalization Company Risk.
Securities of smaller and medium sized companies may be more volatile and more
difficult to liquidate during market down turns than securities of larger
companies. Additionally the price of smaller companies may decline more in
response to selling pressures.
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Summary
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•Valuation
Risk. The prices provided by pricing services
or independent dealers or the fair value determinations made by the Adviser may
be different from the prices used by other mutual funds or from the prices at
which securities are actually bought and sold. The prices of certain securities
provided by pricing services may be subject to frequent and significant change,
and will vary depending on the information that is available.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns for Investor Shares, Advisor Shares and Institutional Shares for the 1
year, 5 year, and since inception periods compare to a broad-based market
index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/wmc-strategic-european-equity-fund
or by calling 800-540-6807 (toll
free).
Brown
Advisory – WMC Strategic European Equity Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-27.64%. During the period shown in the chart, the
highest quarterly return
was 19.63% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-22.13% (for the quarter ended March 31,
2020).
Brown
Advisory – WMC Strategic European Equity Fund
Average
Annual Total Returns
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For
the periods ended December 31, 2021 |
1
Year |
5
Years |
Since
Inception (10/21/13) |
Investor
Shares |
|
| |
•Return
Before Taxes |
14.60% |
11.73% |
7.05% |
•Return
After Taxes on Distributions |
12.06% |
10.17% |
6.11% |
•Return
After Taxes on Distributions and Sale of Fund
Shares |
10.29% |
9.22% |
5.59% |
Advisor
Shares |
|
| |
•Return
Before Taxes |
14.23% |
11.45% |
6.78% |
Institutional
Shares |
|
| |
•Return
Before Taxes |
14.77% |
11.90% |
7.20% |
MSCI
Europe Index
(reflects no deduction for
fees, expenses and taxes) |
16.30% |
10.14% |
5.31% |
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown.
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Summary
Section – Brown Advisory – WMC Strategic European Equity Fund |
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After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
Brown
Advisory LLC is the Fund’s investment adviser. Wellington Management Company LLP
(“Wellington Management”) is the Fund’s Sub-Adviser.
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Investment
Sub-Adviser |
Portfolio
Manager |
Wellington
Management Company LLP |
C.
Dirk Enderlein, CFA, has served as portfolio manager since the Fund’s
inception in 2013. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
•Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
•Standard
Accounts |
$100 |
$100 |
•Traditional
and Roth IRA Accounts |
$100 |
N/A |
•Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
•Standard
Accounts |
$100 |
$100 |
•Traditional
and Roth IRA Accounts |
$100 |
N/A |
•Accounts
with Systematic Investment Plans |
$100 |
$100 |
•Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory Emerging Markets Select
Fund
Institutional
Shares (BAFQX)
Investor
Shares (BIAQX)
Advisor
Shares (BAQAX)
Investment Objective
The Brown Advisory Emerging
Markets Select Fund (the “Fund”) seeks to achieve total return by investing
principally in equity securities issued by companies established or operating in
emerging markets.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.90% |
0.90% |
0.90% |
Distribution
and Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.20% |
0.20% |
0.20% |
Acquired
Fund Fees and Expenses(1) |
0.01% |
0.01% |
0.01% |
Total
Annual Fund Operating Expenses |
1.11% |
1.26% |
1.51% |
(1)Acquired Fund Fees and
Expenses are indirect fees and expenses that the Fund incurs from investing in
the shares of other mutual funds, including money market funds and exchange
traded funds. Please note that the amount of Total Annual Fund Operating
Expenses shown in the above table will differ from the “Financial Highlights”
section of the Prospectus which reflects the operating expenses of the Fund and
does not include indirect expenses such as Acquired Fund Fees and
Expenses.
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$113 |
$353 |
$612 |
$1,352 |
Investor
Shares |
$128 |
$400 |
$692 |
$1,523 |
Advisor
Shares |
$154 |
$477 |
$824 |
$1,802 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
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Summary
Section – Brown Advisory Emerging Markets Select Fund |
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account. These costs, which are not
reflected in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the portfolio turnover rate for
the Fund was 70% of the average value of its
portfolio.
Principal Investment Strategies
Under
normal conditions, the Fund seeks to achieve its investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities issued by companies that are
established or operating in emerging market countries. These will consist of
companies in emerging market countries in Latin America, Asia, Eastern Europe,
Africa, and the Middle East. The Fund intends to invest primarily in the
following countries (others may be added as markets in other countries
develop):
•Asia:
China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore,
South Korea, Sri Lanka, Taiwan, Thailand, and Vietnam.
•Latin
America: Argentina, Belize, Brazil, Chile, Colombia, Mexico, Panama, Peru, and
Venezuela.
•Eastern
Europe: Croatia, Czech Republic, Estonia, Hungary, Kazakhstan, Latvia,
Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey, and
Ukraine.
•Africa
and the Middle East: Bahrain, Botswana, Egypt, Israel, Jordan, Kenya, Kuwait,
Lebanon, Mauritius, Morocco, Nigeria, Oman, Qatar, Saudi Arabia, South Africa,
Tunisia, United Arab Emirates, and Zimbabwe.
The
Fund may purchase equity securities of companies of any size capitalization.
Equity securities in which the Fund may invest include common stock, preferred
stock, equity-equivalent securities such as convertible securities, stock
futures contracts, equity options, other investment companies, American
Depositary Receipts (“ADRs”),
European Depositary Receipts (“EDRs”),
Global Depositary Receipts (“GDRs”),
Non-Voting Depositary Receipts (“NVDRs”),
real estate investment trusts (“REITs”)
and exchange traded funds (“ETFs”),
and the Fund may also invest in fixed income securities and private placements.
The
Fund considers a company to be established or operating in emerging market
countries if: (i) it is organized under the laws of or maintains its principal
office in an emerging market country; (ii) its securities are principally traded
on trading markets in emerging markets countries; (iii) it derives at least 50%
of its total revenue or profits from either goods or services produced or sales
made in emerging markets countries; or (iv) it has at least 50% of its assets in
emerging market countries.
The
Fund may invest up to 20% of its net assets in securities of companies that are
established or operating in countries that are considered to be outside of
emerging markets, which may include other less developed countries as well as
developed market countries. Such less developed countries share many similar
attributes with emerging markets countries, however, their markets are not yet
considered to be as developed as those in the emerging markets.
The
Fund may utilize rights, warrants, options, futures contracts and options on
futures. These investments will typically be made for investment purposes
consistent with the Fund’s investment objective and may also be used to mitigate
or hedge risks within the portfolio or for the temporary investment of cash
balances. The Fund may also invest in Contracts for Difference or participatory
notes which are instruments that are used to replicate the performance of
certain underlying issuers and markets. By investing in derivatives, the Fund
attempts to achieve the economic equivalence it would achieve if it were to
invest directly in the underlying security. Investments in derivatives may be
counted towards the Fund’s 80% investment policy if they have economic
characteristics similar to the other investments that are included in the Fund’s
80% investment policy. The Fund intends to use the mark-to-market value of such
derivatives for purposes of complying with the Fund’s 80% investment policy.
The
Fund may invest up to 20% of its net assets in fixed income securities.
The
Fund may sell its portfolio securities for a variety of reasons, such as to
secure gains, limit losses, or redeploy assets into more promising
opportunities.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
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Summary
Section – Brown Advisory Emerging Markets Select Fund |
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Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) and Global Depository Receipts (“GDRs”)
Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Credit
Risk. The
value of your investment in the Fund may change in response to changes in the
credit ratings of the Fund’s portfolio securities. Generally, investment risk
and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a fixed income security held by a Fund may
cause it to default or become unable to pay interest or principal due on the
security.
•Currency
and Exchange Rate Risk.
Investments in currencies, currency futures contracts, forward currency exchange
contracts or similar instruments, as well as securities that are denominated in
foreign currency, are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies. In addition,
the Fund may engage in currency hedging transactions. Currency hedging
transactions are subject to the risk that a result opposite expectations occurs
(an expected decline turns into a rise and conversely) resulting in a loss to
the Fund.
•Derivatives
Risk.
The risk that an investment in derivatives will not perform as anticipated,
cannot be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Emerging
Markets Risk.
The Fund may invest in emerging markets, which may carry more risk than
investing in developed foreign markets. Risks associated with investing in
emerging markets include limited information about companies in these countries,
greater political and economic uncertainties compared to developed foreign
markets, underdeveloped securities markets and legal systems, potentially high
inflation rates, and the influence of foreign governments over the private
sector. In addition, companies in emerging market countries may not be subject
to accounting, auditing, financial reporting and recordkeeping requirements that
are as robust as those in more developed countries, and therefore, material
information about a company may be unavailable or unreliable, and U.S.
regulators may be unable to enforce a company’s regulatory obligations. Emerging
markets countries are often particularly sensitive to market movements because
their market prices tend to reflect speculative expectations. Low trading
volumes may result in a lack of liquidity and in extreme price volatility.
Investors should be able to tolerate sudden, sometimes substantial, fluctuations
in the value of their
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Summary
Section – Brown Advisory Emerging Markets Select Fund |
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investments.
Emerging market countries may have policies that restrict investment by
foreigners or that prevent foreign investors from withdrawing their money at
will.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and frequent trading of ETFs by the Fund can generate brokerage expenses.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the individual ETFs in which the Fund invests and these fees and expenses are in
addition to the fees and expenses that Fund shareholders directly bear in
connection with the Fund’s own operations.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Geographic
Focus Risk. To
the extent that the Fund focuses its investments in a particular geographic
region or country, the Fund may be subject to increased currency, political,
regulatory and other risks relating to such region or country. As a result, the
Fund may be subject to greater price volatility and risk of loss than a fund
holding more geographically diverse investments.
•Investments
in Other Investment Companies Risk. Shareholders
of the Fund will indirectly be subject to the fees and expenses of the other
investment companies in which the Fund invests, and these fees and expenses are
in addition to the fees and expenses that Fund shareholders directly bear in
connection with the Fund’s own operations. In addition, shareholders will be
exposed to the investment risks associated with investments in the other
investment companies.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
•Liquidity
Risk. Certain
securities held by the Fund may be difficult (or impossible) to sell at the time
and at the price the Fund would like. As a result, the Fund may have to hold
these securities longer than it would like and may forego other investment
opportunities. There is the possibility that the Fund may lose money or be
prevented from realizing capital gains if it cannot sell a security at a
particular time and price.
•Management
Risk.
The Fund may not meet its investment objective based on the Sub-Advisers'
success or failure to implement investment strategies for the
Fund.
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|
|
|
| |
Summary
Section – Brown Advisory Emerging Markets Select Fund |
|
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Smaller
and Medium Capitalization Company Risk.
Securities of smaller and medium sized companies may be more volatile and more
difficult to liquidate during market down turns than securities of larger
companies. Additionally the price of smaller companies may decline more in
response to selling pressures.
•Valuation
Risk.
The prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing
services may be subject to frequent and significant change, and will vary
depending on the information that is available.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The bar chart shows changes in the Fund’s performance
of Investor Shares from year-to-year. The table shows how the average annual
returns of the Investor Shares, Advisor Shares and Institutional Shares for the
1 year, 5 year, and since inception periods compare to a broad-based market
index. Prior to February 23, 2019, the Fund engaged a different, sole investment
sub-adviser and operated subject to different principal investment strategies.
As a result, the performance prior to February 23, 2019 is attributable to the
former investment sub-adviser and different principal investment
strategies.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/emerging-markets-select-fund
or by calling 800‑540‑6807 (toll
free).
Brown
Advisory Emerging Markets Select Fund – Investor Shares
Annual
Total Returns
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-23.75%. During the period shown in the chart, the
highest quarterly return
was 21.39% (for the quarter ended December 31, 2020)
and the lowest quarterly return was
-24.85% (for the quarter ended March 31,
2020).
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|
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|
| |
Summary
Section – Brown Advisory Emerging Markets Select Fund |
|
Brown
Advisory Emerging Markets Select Fund
Average
Annual Total Returns
|
|
|
|
|
|
|
|
|
|
| |
For
the periods ended December 31, 2021 |
1
Year |
5
Years |
Since
Inception (12/12/12) |
Investor
Shares |
|
| |
–Return
Before Taxes |
1.55% |
8.17% |
3.13% |
–Return
After Taxes on Distributions |
1.61% |
8.16% |
3.11% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
1.20% |
6.70% |
2.67% |
Advisor
Shares |
|
| |
–Return
Before Taxes |
1.26% |
7.90% |
2.86% |
Institutional
Shares |
|
| |
–Return
Before Taxes |
1.62% |
8.35% |
3.29% |
MSCI
Emerging Markets Index* (reflects no deduction for
fees, expenses and
taxes)
|
-2.54% |
9.87% |
4.30% |
FTSE
Emerging Index (reflects no deduction for
fees, expenses and
taxes)
|
-0.24% |
9.56% |
4.54% |
*
Effective as of September
1, 2022, the primary benchmark index for the Fund was changed to the MSCI
Emerging Markets Index. The Adviser determined that the MSCI Emerging Markets
Index better reflects the Fund’s investment strategy, as compared to the
Fund’s former primary benchmark index, the FTSE
Emerging Index.
After-tax returns are calculated
using the historical highest individual Federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns depend
on an investor’s tax situation and may differ from those shown. In certain
cases, the figure representing “Return after Taxes on Distributions” may be
higher than the other return figures for the same period.
After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Investor Shares only. After-tax returns for Advisor Shares and Institutional
Shares will vary.
Management
Brown
Advisory LLC is the Fund’s investment adviser. Wellington Management
Company LLP and Pzena Investment Management, LLC are the Fund’s
Sub-Advisers.
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|
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|
| |
Investment
Sub-Advisers |
Portfolio
Managers |
Wellington
Management Company LLP |
Niraj
Bhagwat, CA, has served as a portfolio manager of the Fund since 2019.
|
Pzena
Investment Management, LLC |
Rakesh
Bordia, Caroline Cai, and Allison Fisch have served as portfolio managers
of the Fund since 2019. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
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|
| |
Summary
Section – Brown Advisory Emerging Markets Select Fund |
|
|
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|
| |
Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
– Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
– Standard
Accounts |
$100 |
$100 |
– Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Brown Advisory – Beutel Goodman Large-Cap Value
Fund
Institutional
Shares (BVALX)
Investor
Shares (BIAVX)
Advisor
Shares (Not Available for Sale)
Investment Objective
The Brown Advisory – Beutel
Goodman Large-Cap Value Fund (the “Fund”) seeks to achieve capital
appreciation.
Fees and Expenses
The following table describes
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund. You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
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|
|
| |
Shareholder
Fees
(fees
paid directly from your investment) |
Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Maximum
Sales Charge (Load) imposed on Purchases (as a % of
the offering price) |
None |
None |
None |
Maximum
Deferred Sales Charge (Load) imposed on Redemptions
(as a % of the sale price) |
None |
None |
None |
Redemption
Fee (as a % of amount redeemed on shares held for 14
days or less) |
1.00% |
1.00% |
1.00% |
Exchange
Fee (as a % of amount exchanged on shares held for 14 days or
less) |
1.00% |
1.00% |
1.00% |
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
| |
Management
Fees |
0.45% |
0.45% |
0.45% |
Distribution
and/or Service (12b-1) Fees |
None |
None |
0.25% |
Shareholder
Servicing Fees |
None |
0.15% |
0.15% |
Other
Expenses |
0.10% |
0.10% |
0.10% |
Total
Annual Fund Operating Expenses |
0.55% |
0.70% |
0.95% |
Example
The example below is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of each period. The example also assumes that your investment has a 5%
annual return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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|
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|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Shares |
$56 |
$176 |
$307 |
$689 |
Investor
Shares |
$72 |
$224 |
$390 |
$871 |
Advisor
Shares |
$97 |
$303 |
$525 |
$1,166 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the portfolio turnover rate for the Fund was 33% of the average value of its
portfolio.
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| |
Brown
Advisory– Beutel Goodman Large-Cap Value Fund |
|
Principal Investment Strategies
Under
normal conditions, the Fund seeks to achieve its investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities of large-cap companies. The Fund
considers large-cap companies to be those with market capitalizations greater
than $5 billion at the time of purchase.
The
Fund seeks to invest in companies at discounts to their business value, which
the Fund considers to be the present value of sustainable free cash flow. To
identify these investment opportunities, the Fund employs a disciplined,
bottom-up investment process highlighted by rigorous, internally-generated
fundamental research. Accordingly, investments are made only when the Fund
believes there is a sufficient discount to business value to mitigate the loss
of capital in the event of adverse circumstances.
Equity
securities in which the Fund may invest include common and preferred stock,
convertible debt securities, American Depositary Receipts (“ADRs”), real estate
investment trusts (“REITs”), exchange traded funds (“ETFs”), and other types of
investment companies. The Fund may also invest in private placements
in these types of securities. The Fund may invest in ETFs and other
types of investment companies that have an investment objective similar to the
Fund’s or that otherwise are permitted investments with the Fund’s investment
policies described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may invest
up to 20% of its net assets in foreign securities. The Fund is non-diversified,
which means that it may invest a significant portion of its assets in the
securities of a single issuer or small number of
issuers.
The
Fund may utilize options, futures contracts and options on futures. These
investments will typically be made for investment purposes consistent with the
Fund’s investment objective and may also be used to mitigate or hedge risks
within the portfolio or for the temporary investment of cash balances. By
investing in derivatives, the Fund attempts to achieve the economic equivalence
it would achieve if it were to invest directly in the underlying security.
Investments in derivatives may be counted towards the Fund’s 80% investment
policy if they have economic characteristics similar to the other investments
that are included in the Fund’s 80% investment policy. The Fund intends to use
the mark-to-market value of such derivatives for purposes of complying with the
Fund’s 80% investment policy.
The
Fund may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the long-term expectation.
In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Principal Investment Risks
As with all mutual funds, there is the risk that you
could lose all or a portion of your investment in the Fund.
An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears. The following are the principal risks that could
affect the value of your investment:
•American
Depositary Receipts (“ADRs”) Risk.
ADRs may be subject to some of the same risks as direct investment in foreign
companies, which includes international trade, currency, political, regulatory
and diplomatic risks. In a sponsored ADR arrangement, the foreign issuer assumes
the obligation to pay some or all of the depositary’s transaction fees. Under an
unsponsored ADR arrangement, the foreign issuer assumes no obligations and the
depositary’s transaction fees are paid directly by the ADR holders. Because
unsponsored ADR arrangements are organized independently and without the
cooperation of the issuer of the underlying securities, available information
concerning the foreign issuer may not be as current as for sponsored ADRs and
voting rights with respect to the deposited securities are not passed through.
|
|
|
|
| |
Brown
Advisory– Beutel Goodman Large-Cap Value Fund |
|
•Convertible
Securities Risk.
The value of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in the market
value of the underlying securities.
•Derivatives
Risk. The
risk that an investment in derivatives will not perform as anticipated, cannot
be closed out at a favorable time or price, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute or alternative to a direct cash investment,
the transaction may not provide a return that corresponds precisely with that of
the cash investment; that a derivative will not perform in the manner
anticipated by the Adviser, which may result in losses that partially or
completely offset gains in portfolio positions; or that, when used for hedging
purposes, derivatives will not provide the anticipated protection, causing the
Fund to lose money on both the derivatives transaction and the exposure the Fund
sought to hedge. The risks of investing in derivative instruments also include
leverage, liquidity, market, credit, operational and legal risks. Additionally,
any derivatives held by the Fund will have counterparty associated risks, which
are the risks that the other party to the derivative contract, which may be a
derivatives exchange, will fail to make required payments or otherwise fail to
comply with the terms of the contract. The Fund potentially could lose all or a
large portion of its investment in the derivative instrument.
•Equity
and General Market Risk.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value. The stock market may experience
declines or stocks in the Fund’s portfolio may not increase their earnings at
the rate anticipated. The Fund’s NAV and investment return will fluctuate based
upon changes in the value of its portfolio securities. Markets may, in response
to economic or market developments, governmental actions or intervention,
natural disasters, epidemics, pandemics or other external factors, experience
periods of high volatility and reduced liquidity. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, potentially at
unfavorable prices. Certain securities, particularly fixed income securities,
may be difficult to value during such periods.
•ETF
Risk.
ETFs may trade at a discount to the aggregate value of the underlying securities
and although expense ratios for ETFs are generally low, frequent trading of ETFs
by the Fund can generate brokerage expenses. Shareholders of the Fund will
indirectly be subject to the fees and expenses of the individual ETFs in which
the Fund invests.
•Foreign
Securities Risk.
The Fund may invest in foreign securities and is subject to risks associated
with foreign markets, such as adverse political, social and economic
developments such as war, political instability, hyperinflation, currency
devaluations, and overdependence on particular industries; accounting standards
or governmental supervision that is not consistent with that to which U.S.
companies are subject; limited information about foreign companies; less
liquidity and higher volatility in foreign markets and less protection to the
shareholders in foreign markets. In addition, investments in certain foreign
markets that have historically been considered stable may become more volatile
and subject to increased risk due to ongoing developments and changing
conditions in such markets. The value of the Fund’s foreign investments may also
be affected by foreign tax laws, special U.S. tax considerations and
restrictions on receiving the investment proceeds from a foreign country.
Dividends or interest on, or proceeds from the sale or disposition of, foreign
securities may be subject to non-U.S. withholding or other taxes. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value.
•Investments
in Other Investment Companies Risk.
Shareholders of the Fund will indirectly be subject to the fees and expenses of
the other investment companies in which the Fund invests, and these fees and
expenses are in addition to the fees and expenses that Fund shareholders
directly bear in connection with the Fund’s own operations. In addition,
shareholders will be exposed to the investment risks associated with investments
in the other investment companies.
•Large
Capitalization Company Risk. Large
capitalization companies may be unable to respond quickly to new competitive
challenges like changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
•Management
Risk.
The Fund may not meet its investment objective based on the Sub-Adviser’s
success or failure to implement investment strategies for the
Fund.
|
|
|
|
| |
Brown
Advisory– Beutel Goodman Large-Cap Value Fund |
|
•Non-Diversification
Risk.
Investment by the Fund in securities of a
limited number of issuers exposes it to greater market risk and potential
monetary losses than if its assets were diversified among the securities of a
greater number of issuers.
•Private
Placement Risk.
The Fund may invest in privately issued securities of domestic common and
preferred stock, convertible debt securities, ADRs and REITs, including those
which may be resold only in accordance with Rule 144A under the Securities
Act of 1933, as amended. Privately issued securities are restricted securities
that are not publicly traded. Delay or difficulty in selling such securities may
result in a loss to the Fund.
•REIT
and Real Estate Risk.
The value of the Fund’s investments in REITs may change in response to changes
in the real estate market such as declines in the value of real estate, lack of
available capital or financing opportunities, and increases in property taxes or
operating costs. In connection with the Fund’s investments in REITs, the Fund is
also subject to risks associated with extended vacancies of properties or
defaults by borrowers or tenants, particularly during periods of disruptions to
business operations or an economic downturn.
•Value
Company Risk. The
stock of value companies can continue to be undervalued for long periods of time
and not realize its expected value. The value of the Fund may decrease in
response to the activities and financial prospects of an individual
company.
Performance
Information
The following
performance information provides some indication of the risks of investing in
the Fund. The chart shows the Fund’s performance of
Institutional Shares from year-to-year. The table shows how the average annual
returns of Institutional Shares and Investor Shares for the 1 year and since
inception periods compare to a broad-based market index.
Performance information
represents only past performance, before and after taxes, and does not
necessarily indicate future results. Updated performance
information is available online at www.brownadvisory.com/mf/beutel-goodman-large-cap-value-fund
or by calling 800-540-6807 (toll free)
or 414-203-9064.
Brown
Advisory - Beutel Goodman Large-Cap Value Fund – Institutional Shares
Annual
Total Return
The Fund’s calendar
year-to-date total return as of
September 30, 2022 was
-12.71%. During the period shown in the chart, the
highest quarterly return
was 15.83% (for the quarter ended June 30, 2020) and
the lowest quarterly return was
-20.42% (for the quarter ended March 31,
2020).
|
|
|
|
| |
Brown
Advisory– Beutel Goodman Large-Cap Value Fund |
|
Brown
Advisory - Beutel
Goodman Large-Cap Value Fund
Average
Annual Total Returns
|
|
|
|
|
|
|
| |
For
the periods ended December 31, 2021 |
1
Year |
Since
Inception (2/13/18) |
Institutional
Shares |
| |
–Return
Before Taxes |
14.74% |
11.64% |
–Return
After Taxes on Distributions |
11.85% |
10.36% |
–Return
After Taxes on Distributions and Sale of Fund
Shares |
9.78% |
8.87% |
Investor
Shares |
| |
–Return
Before Taxes |
14.61% |
11.48% |
Russell
1000®
Value Index (reflects no deduction for
fees, expenses and taxes) |
25.16% |
11.51% |
NOTE: The
Fund offers two classes of shares. Institutional Shares commenced
operations on February 13, 2018, and Investor Shares commenced operations on
June 30, 2021. Performance
shown prior to inception of the Investor Shares is based on the performance
of Institutional Shares, adjusted for the higher expenses applicable to Investor
Shares.
After-tax returns are
calculated using the historical highest individual Federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown
for Institutional Shares only. After-tax returns for Investor Shares will
vary.
Management
Brown
Advisory LLC is the Fund’s investment adviser. Beutel, Goodman & Company
Ltd. is the Fund’s Sub-Adviser.
|
|
|
|
| |
Investment
Sub-Adviser |
Portfolio
Managers |
Beutel,
Goodman & Company Ltd. |
Rui
Cardoso, CFA, and Glenn Fortin, CFA, have served as portfolio managers
since the Fund’s inception in 2018. |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Brown Advisory Funds, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, WI 53201-0701), by wire transfer, by telephone at
800-540-6807 (toll free) or 414-203-9064, or through the Internet at
www.brownadvisory.com/client-login. Investors who wish to purchase, exchange or
redeem Fund shares through a broker-dealer should contact the broker-dealer
directly. The minimum initial and subsequent investment amounts for various
types of accounts are shown below.
|
|
|
|
|
|
|
| |
Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
| |
–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
The
minimum investment requirements are waived for retirement plans that are
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“IRC”) and tax-exempt under Section 501(a) of the IRC, and plans operating
consistent with Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the
IRC.
|
|
|
|
| |
Brown
Advisory– Beutel Goodman Large-Cap Value Fund |
|
Tax
Information
The
Fund’s distributions are taxed as ordinary income or capital gains, unless you
are investing through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement account. Such tax-deferred arrangements may be taxed later
upon withdrawal of monies from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a fund-supermarket), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
|
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|
| |
Additional
Information about the Funds' Principal Investment
Strategies |
|
Brown
Advisory Growth Equity Fund
Principal
Investment Strategies
The
Brown Advisory Growth Equity Fund seeks to achieve capital appreciation. Under
normal conditions, the Fund seeks to achieve the investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities of domestic companies (“80% Policy”).
The Fund must provide shareholders with 60 days’ prior written notice if it
changes its 80% Policy.
The
Fund primarily invests in securities of medium and large market capitalization
companies that have high, sustainable earnings prospects along with attractive
valuations. The Adviser believes these companies have exhibited an
above-average rate of earnings growth over the past
few years and have prospects for above-average, sustainable growth in the
future. Medium and large market capitalization companies include those with
market capitalizations generally greater than $2 billion at the time of
purchase. Equity securities include domestic common and preferred stock,
convertible debt securities, American Depositary Receipts (“ADRs”), real estate
investment trusts (“REITs”) and exchange traded funds (“ETFs”). The
Fund may also invest in private placements in these types of
securities. The Fund invests primarily in ETFs that have an
investment objective similar to the Fund’s or that otherwise are permitted
investments with the Fund’s investment policies described
herein. ADRs are equity securities traded on U.S. securities
exchanges, which are generally issued by banks or trust companies to evidence
ownership of foreign equity securities. The Fund may invest up to 15%
of its net assets in foreign securities, including in emerging markets.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Fund seeks to purchase securities that the Adviser considers to have
attractive valuations based on the strong fundamentals of the underlying
companies. The Adviser starts by using in-house research and other sources to
identify a universe of high quality companies across a range of industries. High
quality companies are businesses that the Adviser believes have:
•Significant
market opportunities (both in terms of magnitude and duration) where the
companies are leaders or potential leaders in their respective markets;
•Proprietary
products and services, new product development and product cycle leadership that
sustain a strong brand franchise; and
•A
strong management team that is proactive, consistently executes effectively, and
anticipates and adapts to change.
The
Fund may also invest in companies that do not exhibit particularly strong
earnings histories but have other attributes that may contribute to accelerated
growth in the foreseeable future. These attributes include, but are not limited
to:
•A
strong competitive position;
•A
history of innovation;
•Excellent
management; and
•The
financial resources to support long-term growth.
The
Adviser believes that attractive risk-adjusted returns can be better achieved by
buying and holding securities of companies over long periods of time. As a
result, the Adviser focuses on those companies that it believes have the ability
to grow earnings at above average rates over several years (i.e. at an
annualized rate of 14% or more over a full market cycle). Factors considered
include:
•Product
cycles, pricing flexibility and product or geographic mix;
•Sustainability
of fundamental growth drivers;
•Cash
flow and financial resources to fund growth; and
•Catalysts
for growth such as changes in regulation, management, business cycle, business
mix and industry consolidation.
The
Adviser then uses a variety of valuation techniques to identify those companies
whose securities are attractively valued relative to the market, their peer
groups and their own price history. These techniques include analyses of
price/earnings ratios, price/sales ratios and price/cash flow ratios. Valuation
techniques also permit the Adviser to mitigate the potential downside risk of an
investment candidate by demonstrating the difference in the estimated value of a
company’s equity security and its current market price.
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The
Adviser’s valuation discipline attempts to estimate a range of value for each
company whose security is considered for purchase. The range of value will be
used to estimate the spread or “margin of safety” between a company’s current
stock price and a reasonable “worst case” low price for the
security.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, in its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis. The Adviser reviews certain ESG characteristics of the
Fund quarterly.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser regularly monitors the companies in the Fund’s portfolio to
determine if there have been any fundamental changes in the portfolio companies.
The Adviser may sell a security or reduce its position if:
•It
fails to meet initial investment criteria;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the long-term expectation.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with the
investment objective and principal investment strategy and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position taken at the wrong time may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal or investing emergency
reserves.
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Brown
Advisory Flexible Equity Fund
Principal
Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in a diversified portfolio
of equity securities (“80% Policy”). The Fund must provide shareholders with 60
days’ prior written notice if it changes its 80% Policy. The Fund invests
primarily in securities of medium and large market capitalization companies that
the Adviser believes have strong, or improving, long-term business
characteristics and share prices that do not reflect these favorable fundamental
attributes. Medium and large market capitalization companies are, according to
the Adviser, those companies with market capitalizations generally greater than
$2 billion at the time of purchase. Equity securities include domestic and
foreign common and preferred stock, convertible debt securities, American
Depositary Receipts (“ADRs”), real estate investment trusts (“REITs”), exchange
traded funds (“ETFs”), and other types of investment companies. The Fund may
also invest in private placements in these types of securities. The Fund may
invest in ETFs and other types of investment companies that have an investment
objective similar to the Fund’s or that otherwise are permitted investments with
the Fund’s investment policies described herein. ADRs are equity securities
traded on U.S. securities exchanges, which are generally issued by banks or
trust companies to evidence ownership of foreign equity securities. The Fund may
invest up to 15% of its net assets in foreign securities, including emerging
markets.
The
Adviser follows an investment philosophy referred to as “flexible equity.”
Flexibility allows the Adviser to look at many types of opportunities expanding
the bargain hunting concepts of value investing to a broad range of
opportunities. The Adviser emphasizes individual security selection based on
identifying long-term attractive businesses, i.e., those with significant
desirable traits and few or no undesirable traits, when they are available at
bargain prices. Desirable traits include favorable business economics supported
by enduring competitive advantages, capable and trustworthy management, positive
industry dynamics and sensible capital allocation. Bargain prices most often
arise in the stock market due to short-term investor perceptions or temporary
business challenges creating undue price declines and price recovery potential,
or unrecognized favorable prospects within a business or changes for the better
in company management or industry conditions.
With
respect to 20% of its assets, the Fund may invest in investment grade securities
or unrated securities determined by the Adviser to be of comparable
quality.
The
sale of a company’s equity securities may arise if the securities’ market price
exceeds the Adviser’s estimate of intrinsic value, if the ratio of risk and
rewards of continuing to own the company’s equity is no longer attractive, or if
the Adviser needs to raise cash to purchase a more attractive investment
opportunity, satisfy net redemptions, or other purposes.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser uses a research-intensive security selection process. Many
characteristics of the underlying company are analyzed prior to purchasing its
security in the Fund’s portfolio. These include:
•A
company’s market position and competitive advantages;
•Its
current and potential financial strength;
•Its
earnings and free cash flow; and
•The
effectiveness of its management team.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, in its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis. The Adviser reviews certain ESG characteristics of the
Fund quarterly.
The
Adviser constructs its portfolio one security at a time in seeking those with
the best long-term potential, and may express its conviction in its favorite
holdings through increased weightings. The Adviser does not limit its
investments to securities of a particular market cap range but the focus is
generally on larger companies.
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The
Adviser’s Process — Selling Portfolio Securities.
The Adviser regularly monitors companies in the Fund’s portfolio to determine if
their stock price and future prospects continue to appear attractive or if they
are beginning to show signs of deterioration. The Adviser may sell a security or
reduce its position if:
•The
security has reached a price whereby its risk/reward characteristics are not as
favorable;
•A
company’s fundamentals are deteriorating to the point where the original
investment thesis for owning the stock is no longer intact; or
•A
better opportunity has been identified.
Under
normal circumstances, the Adviser is a long-term investor with holding periods
for securities of one to five years, therefore on average, the annual portfolio
turnover is not expected to be high.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal.
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Brown
Advisory Equity Income Fund
Principal
Investment Strategies
The
Fund seeks to provide current income and dividend growth. The Fund’s investment
objective is not fundamental and may be changed by the Fund’s Board of Trustees
without shareholder approval.
Under
normal conditions, the Fund will invest at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in a diversified portfolio
of dividend paying equity securities (“80% Policy”). While the Adviser may
purchase securities of companies of various market capitalizations, the focus is
on medium and large capitalization companies. The Adviser defines “medium and
large companies” as companies whose market capitalizations are equal to or
greater than $2 billion at the time of initial investment. The Fund must provide
shareholders with 60 days’ prior written notice if it changes its
80% Policy. Other investment companies in which the Fund may invest must
have a policy of investing at least 80% of their assets in income producing
equity securities.
Potential
investment opportunities are evaluated from a number of perspectives in an
effort to select those that offer the most attractive return prospects. The
Adviser’s approach also attempts to take advantage of the market’s short-term
volatility, which may provide buying opportunities in stocks of companies that
appear to have attractive long-term potential.
Equity
securities include domestic and foreign common and preferred stock, convertible
debt securities, American Depositary Receipts (“ADRs”), Master Limited
Partnerships (“MLPs”), real estate investment trusts (“REITs”) and exchange
traded funds (“ETFs”), and the Fund may also invest in private placements in
these types of securities. To the extent the Fund invests in MLPs,
its investments will be restricted to holding interests in limited partners of
such investments. To the extent the Fund invests in ETFs, it will do
so primarily in ETFs that have an investment objective similar to the Fund’s or
that otherwise are permitted investments with the Fund’s investment policies
described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Adviser may also
invest in debt-securities, including lower-rated debt-securities (“junk bonds”)
and foreign securities including depositary receipts.
The
Fund may invest up to 25% of its net assets in publicly traded MLPs. MLPs are
businesses organized as limited partnerships that trade their proportionate
shares of the partnership (units) on a public exchange. MLPs are required to pay
out most or all of their earnings in distributions. Generally speaking, MLP
investment returns are enhanced during periods of declining or low interest
rates and tend to be negatively influenced when interest rates are rising. As an
income vehicle, the unit price may be influenced by general interest rate trends
independent of specific underlying fundamentals. In addition, most MLPs are
fairly leveraged and typically carry a portion of “floating” rate debt. As such,
a significant upward swing in interest rates would drive interest expense
higher. Furthermore, most MLPs grow by acquisitions partly financed by debt, and
higher interest rates could make it more difficult to make acquisitions. To the
extent the Fund invests in MLPs, its investments will be restricted to holding
interests in limited partners of such investments.
With
respect to 20% of its assets, the Fund may also invest in (1) investment
grade and non-investment grade debt securities (i.e., junk
bonds), or (2) unrated debt securities determined to be of comparable
quality by the Advisor.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser uses a research-intensive security selection process. Many
characteristics of the underlying company are analyzed prior to purchasing its
stock in the Fund’s portfolio. These include a company’s valuation relative to
the likely prospects for the company, consistent return on equity, financial
durability, steady profitability, and management’s history of capital
allocation. The Adviser constructs its portfolio one stock at a time in seeking
those with the most attractive combination of current dividend yield, lower risk
of permanent loss of capital and potential dividend growth, and may express its
conviction in its favorite holdings through increased weightings. The Adviser
does not limit its investments to securities of a particular market
capitalization range but the focus is generally on larger companies.
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While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, in its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis. The Adviser reviews certain ESG characteristics of the
Fund quarterly.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser continually monitors companies in the Fund’s portfolio to determine
if their stock price and future prospects continue to appear attractive or if
they are beginning to show signs of deterioration. There are generally three
reasons the Adviser may sell or reduce its position in a security:
•The
stock has reached a price whereby its risk/reward characteristics are not as
favorable;
•A
company’s fundamentals are deteriorating to the point where the original
investment thesis for owning the stock is no longer intact; or
•A
better opportunity has been identified.
Under
normal circumstances, the Adviser is a long-term investor with holding periods
for stocks of one to five years, therefore on average, the annual portfolio
turnover is not expected to be high.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing current income and a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
stability of principal; or
•Are
pursuing a short-term investment goal.
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Brown
Advisory Sustainable Growth Fund
Principal
Investment Strategies
To
achieve its objective, the Fund invests at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
sustainable domestic companies (“80% Policy”). The Fund must provide
shareholders with 60 days’ prior written notice if it changes its 80%
Policy.
The
Fund invests primarily in the securities of medium and large capitalization
companies that, in the Adviser’s view, (1) have the fundamental strengths
(strong financials and business models) to outperform their peers and deliver
above-average earnings growth over a market cycle, (2) effectively implement
Sustainable Business Advantages (such as revenue growth, cost improvements, or
enhanced franchise value), and (3) have attractive valuations.
Medium
and large capitalization companies are, according to the Adviser, those
companies with market capitalizations generally greater than $2 billion at time
of purchase. The Fund may also invest a portion of the portfolio in equity
securities of small market capitalization companies.
Equity
securities in which the Fund principally invests are common stocks. Common
stocks are equity securities that represent a proportionate share of the
ownership of a company; their value is generally based on the success of the
company’s business, any income paid to stockholders, the value of its assets and
general market conditions. Furthermore, the Fund may invest up to 15% of assets
in foreign securities (including American Depositary Receipts (“ADRs”)), which
may include emerging markets securities. ADRs may be either sponsored or
unsponsored. The Fund also may invest in real estate investment trusts
(“REITs”). In addition, the Adviser views Environmental, Social and Governance
(“ESG”) factors as relevant to fundamentals and seeks to understand their impact
on companies in which the Fund may invest. The Adviser leverages proprietary ESG
research that seeks to understand ESG risk management practices and sustainable
opportunities for every security added to the portfolio. However, at the
Adviser’s discretion, the Fund is permitted to make an investment without a
written ESG assessment on file at the time of purchase, as long as the Adviser
believes the security meets the Fund’s sustainability criteria.
The
Adviser pursues active, strategic engagement with companies and other
stakeholders in an effort to enhance due diligence and monitor ESG risks and
sustainable opportunities that may impact the investment thesis. The Adviser’s
ESG research team monitors the companies in the portfolio on an on-going basis,
and additional monitoring is also undertaken through a quarterly review of
certain ESG characteristics of the Fund.
Due
diligence on a company’s financial fundamentals and Sustainable Business
Advantages is conducted collaboratively among the Fund’s portfolio managers, the
Adviser’s ESG research team, and fundamental analysts.
Additionally,
while driving impact is not an input to the investment thesis, the Adviser often
finds an overlap between Sustainable Business Advantage and positive ESG
outcomes.
In
the Adviser’s view, a company must satisfy one of the following definitions to
be considered a sustainable company:
(1)
The company’s internal sustainability strategies lead to one or more Sustainable
Business Advantages (such as revenue growth, cost improvements, or enhanced
franchise value) or that lead to reduced risk to a company’s prospects for
growth.
The
Adviser believes that a company’s sustainability performance and its level of
commitment to sustainability can have a significant influence on its financial
performance. Sustainable business practices can lead to cost advantages, quality
improvements and improved profitability. Growing consumer preferences for
sustainable practices may lead not only to increased customer loyalty but to
increased employee loyalty as well. Finally, a company that reduces its negative
environmental and social impacts can also reduce the risks of direct
consequences such as lawsuits, regulatory violations, and other disruptive
events that can adversely impact shareholder value. Leading sustainable
companies are also actively managing how they deal with the indirect
consequences of environmental and social risks, such as reduced demand for goods
that are not energy-efficient, the potential long-terms risks and physical costs
of climate change, or challenges attracting talent when human capital management
is not prioritized.
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(2)
The company’s products have a competitive advantage as a result of
sustainability drivers such as resource efficient design or
manufacturing.
Sustainable
manufacturing processes may drive top- and bottom-line benefits by virtue of
being resource efficient. Increased productivity, lower materials use, smaller
waste streams, and lower emissions are some of the sustainability
characteristics of efficient operations and manufacturing. The tangible
financial benefits of such performance may include higher gross margins due to
input resource efficiency, or increased productivity and greater operating
leverage. The “use” phase of a product is also likely to have environmental
impacts, and leading sustainability companies take this into account in their
product design. Sustainable product design may confer a competitive advantage
that exceeds customers’ cost and quality requirements such as smaller size, less
wasted materials, or a longer product lifetime.
(3)
The company provides products or services that offer effective solutions to the
world’s long-term sustainability challenges.
The
Adviser believes that companies providing solutions to pressing sustainability
challenges will benefit from a variety of factors, including:
•The
need to address a developing scenario of global scarcity in energy, water and
other commodity markets;
•Unsustainable
trends in agriculture, with ever-increasing global demand creating a significant
need to improve crop yields;
•Population
growth and the rising middle class around the world with voracious appetites for
transportation fuel, clean and hot water, electricity, and other comforts that
must be achieved in a sustainable way;
•Increasing
corporate demand for specialized services to meet a widening array of
environmental regulations being implemented across the globe; and
•Rapid
advances in new technologies that are enabling cost-competitive solutions to
environmental and social challenges.
Sustainable
companies, by their nature, seek to manage risks, not only related to negative
environmental and social outcomes, but also ones that might materially impair
their financial results. The Fund expects to have low to no exposure to
companies that have received international sanctions, derive significant direct
revenue from gambling or the production of alcohol, tobacco, weapons, or fossil
fuel extraction. However, the Fund may hold companies which the Adviser believes
are indirectly or insignificantly exposed to these business
activities.
Finally,
the Adviser uses scenario analyses to assess the company’s valuation and
potential for appreciation or downside risk.
The
Adviser’s Process – Purchasing Portfolio Securities. The
Adviser uses in-house resources to identify companies that meet the Fund’s
definitions for sustainability, and that appear to have strong, experienced
management teams, unique competitive advantages and substantial growth
opportunities within their relevant market(s).
When
a company appears to meet these criteria, the Adviser initiates an in-depth
fundamental research process to evaluate the company’s long-term earnings growth
potential and the long-term durability of its business model. This fundamental
research includes a business-focused assessment of sustainable-driven
opportunities, such as particular product lines which satisfy demand for a
sustainable solution, or a business model whose sustainability attributes convey
an overall cost advantage or other advantage to the company. Desirable
fundamental characteristics include:
•Strong
competitive position driven by proprietary product advantages, technology
leadership, scale or other factors;
•Reliable
external growth drivers;
•Diversified
revenue streams, from multiple customer segments, geographies and business
lines;
•Management
teams with a track record of effective capital allocation and strategic
execution, as well as the ability to anticipate and adapt to change;
and
•Financial
resources necessary to support long-term growth.
Additionally,
the Adviser undertakes ESG due diligence, with the goal of understanding
sustainable opportunities or ESG risks associated with the company. The Adviser
considers a variety of factors in ESG due diligence, including but not limited
to:
a.Environmental
factors such as climate change, natural resource stewardship, pollution, and
waste management
b.Social
factors such as human capital management and labor practices, customer
well-being, supply chain management, and community relations
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c.Governance
factors such as board and committee composition and structure, shareholder
rights, management incentives, and business ethics.
The
Fund expects to have low to no exposure to companies that have received
international sanctions, derive significant direct revenue from gambling or the
production of alcohol, tobacco, weapons or fossil fuel extraction.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to ESG-related data from third-party providers. The Adviser does not
solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser. The Adviser is permitted to invest in
a security if it determines the security has favorable sustainable opportunities
and an acceptable ESG risk profile notwithstanding contrary third party data or
third party recommendations. Investing on the basis of ESG criteria is
qualitative and subjective by nature, and there can be no assurance that the
process utilized by the Fund’s vendors or any judgment exercised by the Adviser
will reflect the beliefs or values of any particular investor. The data
informing this process is derived from a variety of sources, including the
companies themselves and third party sources. The Fund’s vendors provide
ESG-related data, research and rating services. The ESG-related data, research
and rating services include information related to potentially controversial
business exposure, ESG metrics such as emissions and diversity data and
controversy reporting. The Adviser believes its process is reasonably designed,
although such data is inherently subject to interpretation, restatement, delay
and omission outside the Adviser’s control.
The
Adviser considers each proxy voting proposal related to holdings in the Fund on
its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
When
a company is judged to be a worthy candidate for the Fund’s portfolio, the
Adviser uses a variety of valuation techniques to determine if a company’s stock
is attractively valued relative to the market, its peer group, and its own
history. These techniques include the use of financial models designed to
determine the Adviser’s assessment of the upside potential for a security
implied by a reasonable “best case” scenario, contrasted with the downside risk
implied by a reasonable “worst case” scenario. Purchase decisions, initial
position sizes, and ongoing adjustments to position size are largely based on
the stock’s current valuation as measured against the range of values between
these “best case” and “worst case” scenarios. In addition to regularly
monitoring each stock’s price relative to its respective scenarios, the Adviser
frequently refreshes the scenarios themselves to ensure fully informed
decision-making.
The
Adviser’s Process – Selling Portfolio Securities. The
Adviser regularly monitors the companies in the Fund’s portfolio to determine if
there have been any fundamental changes in those companies. The Adviser may sell
a security or reduce its position if:
•The
fundamental investment or sustainability thesis is violated;
•A
more attractively priced security is found; or
•The
security becomes overvalued relative to the Adviser’s long-term
expectations.
Temporary
Defensive Position. In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal;
•Are
willing to accept risk of market value fluctuation in the short-term;
or
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•Want
an investment that focuses only on particular sectors or
industries.
The
Fund may not be appropriate for you if you:
•Need
regular income or stability of principal;
•Are
pursuing a short-term investment goal or investing emergency reserves;
or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Mid-Cap Growth Fund
Principal
Investment Strategies
Under
normal conditions, Brown Advisory LLC (the “Adviser”) seeks to achieve the
Fund’s investment objective by investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
mid-cap domestic companies. The Adviser considers mid-cap companies
to be those with market capitalizations that fall within the range of the market
capitalizations of companies in the Russell Midcap®
Growth Index. As of September 30, 2022, the range was from $271 million to $46.7
billion (the “Market Capitalization Range”). Market capitalization is measured
at the time of purchase. The Fund invests primarily in companies the
Adviser believes have above average growth prospects.
The
Adviser conducts an in-depth analysis of a company’s fundamentals to identify
those companies it believes have the potential to compound earnings at an
above-average rate for an extended period of time. The
Fund invests primarily in companies the Adviser believes possess “3G” criteria:
durable growth, sound governance, and scalable go-to-market
strategies. In considering durable growth, the Adviser assesses
whether there is a large and growing market, whether the company is a market
leader and/or is gaining market share, and whether a company has a
differentiated product offering. The Adviser examines a company’s governance
characteristics including the capability of management, whether there is a
shareholder-friendly board, and whether there is an aligned incentive system
between management and shareholders. Finally, the Adviser evaluates whether a
company’s go-to-market strategies will result in incremental revenue, high
and/or rising margins, and the efficient use of capital.
Equity
securities include domestic common and preferred stock, convertible debt
securities, American Depositary Receipts (“ADRs”), real estate investment trusts
(“REITs”), exchange traded funds (“ETFs”), and other types of investment
companies. The Fund may also invest in private placements in these
types of securities. The Fund may invest in ETFs and other types of
investment companies that have an investment objective similar to the Fund’s or
that otherwise are permitted investments with the Fund’s investment policies
described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may invest
up to 20% of its net assets in foreign securities.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser begins by identifying a universe of mid cap companies within the
Market Capitalization Range. To narrow that list, the Adviser performs primary
fundamental research, interviews management teams, and utilizes other sources of
information to select companies it believes may possess the “3G” characteristics
captioned above. The Adviser then performs an in-depth analysis of the
companies’ fundamentals to identify those that have:
•Substantial
business opportunities relative to their operating history and size. These
opportunities may arise from addressing large and fragmented markets or markets
that are growing at rapid rates. In addition, the company’s ability to innovate
may help create new markets for its products or services;
•Proprietary
products, services or distribution systems that provide the company with a
competitive edge;
•Management
that demonstrates a “growth mentality” and a plan that the Adviser can
understand, monitor and evaluate; or
•Attractively
priced stocks compared to their growth potential.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, in its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis. The Adviser reviews certain ESG characteristics of the
Fund quarterly.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser regularly monitors the companies in the Fund’s portfolio to
determine if there have been any fundamental changes in the companies. The
Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•A
more attractively priced stock is found; or
•The
security becomes overvalued relative to the long-term expectation.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and
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invest,
without limitation, in cash or prime quality cash equivalents (including
commercial paper, certificates of deposit, banker’s acceptances and time
deposits). A defensive position, taken at the wrong time, may have an adverse
impact on the Fund’s performance. The Fund may be unable to achieve its
investment objective during the employment of a temporary defensive
measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal or investing emergency
reserves.
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Brown
Advisory Small-Cap Growth Fund
Principal
Investment Strategies
The
Fund seeks to achieve capital appreciation by primarily investing in equity
securities. The Fund invests at least 80% of the value of its net assets (plus
any borrowings for investment purposes) in equity securities of small domestic
companies (“80% Policy”). The Fund seeks to invest primarily in small companies
with above average growth prospects. Small companies, according to the Adviser,
are companies whose market capitalizations are generally less than $6 billion or
the maximum capitalization of companies in the Russell 2000®
Growth Index (which was approximately $13.6 billion as of September 30, 2022),
whichever is greater, at the time of purchase (“Market Capitalization
Range”). Market capitalization is measured at the time of purchase.
The Fund must provide shareholders with 60 days’ prior written notice if it
changes its 80% Policy.
Equity
securities include domestic common and preferred stock, convertible debt
securities, American Depositary Receipts (“ADRs”), real estate investment trusts
(“REITs”) and exchange traded funds (“ETFs”). The Fund may also
invest in private placements in these types of securities. The Fund
invests primarily in ETFs that have an investment objective similar to the
Fund’s or that otherwise are permitted investments with the Fund’s investment
policies described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may invest
up to 20% of its net assets in foreign securities, including in emerging
markets.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser begins by identifying a universe of small growth companies within
the Market Capitalization Range. From these companies, the Adviser uses research
and other sources of information to select those companies it believes have the
potential for long-term earnings growth that is not fully reflected in the
security’s price. The Adviser then performs an in-depth analysis of the
companies’ fundamentals to identify those that have:
•Substantial
business opportunities relative to their operating history and size. These
opportunities may arise from addressing large and fragmented markets or markets
that are growing at rapid rates. In addition, the company’s ability to innovate
may help create new markets for its products or services;
•Proprietary
products, services or distribution systems that provide the company with a
competitive edge;
•Management
that demonstrates a “growth mentality” and a plan that the Adviser can
understand, monitor and evaluate; or
•Attractively
priced stocks compared to their growth potential.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data,
in its investment decision-making process where ESG factors are considered by
the Adviser to be material to long-term performance. Where ESG analysis is taken
into account, the Adviser assesses qualitative or quantitative ESG factors in
combination with fundamental analysis. The Adviser reviews certain ESG
characteristics of the Fund quarterly.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser regularly monitors the companies in the Fund’s portfolio to
determine if there have been any fundamental changes in the companies. The
Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•A
more attractively priced stock is found; or
•The
security becomes overvalued relative to the long-term expectation.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
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•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal or investing emergency
reserves.
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Brown
Advisory Small-Cap Fundamental Value Fund
Principal
Investment Strategies
The
Fund seeks to achieve long-term capital appreciation. Under normal
circumstances, the Fund invests at least 80% of the value of its net assets
(plus any borrowings for investment purposes) in equity securities of small
capitalization companies (“80% Policy”). Small companies, according to the
Adviser, are companies whose market capitalizations are generally less than
$6 billion at the time of purchase. The Fund must provide shareholders with
60 days’ prior written notice if it changes its 80% policy.
Equity
securities include common stock, preferred stock, equity-equivalent securities
such as convertible securities, stock futures contracts, equity options, other
investment companies, American Depositary Receipts (“ADRs”), real estate
investment trusts (“REITs”) and exchange traded funds (“ETFs”), and the Fund may
also invest in private placements in these types of securities. The
Fund invests primarily in equity securities that trade in the
U.S. securities markets and that the Adviser believes are undervalued,
broadly defined as trading at a discount to the estimated economic value of a
company’s underlying business. The Adviser uses a research-driven
analysis that results in the Fund’s portfolio having an emphasis on out-of-favor
or under-followed, cash-generating companies with sustainable business models,
strong finances, competent management and a demonstrable record of profitability
and self-funded growth. The Fund may also invest in cyclical
companies or companies that have experienced a temporary setback if the
valuation of the company is at an appropriate discount to the long-term earnings
potential of the company.
The
Fund may invest up to 15% of its assets in foreign equity securities, including
in emerging markets. With respect to 20% of its assets, the Fund may also invest
in foreign or domestic debt securities, including distressed debt securities
(limited to 5% or less of its assets). Debt securities in which the Fund may
invest may be rated by a Nationally Recognized Statistical Rating Agency or may
be unrated and judged by the Adviser to be of comparable quality. The Fund may
engage in options, futures contracts and options on futures to seek to achieve
the Fund’s investment objective, manage the portfolio, mitigate risks, hedge
risks, equitize cash or to enhance total return. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. By investing in
derivatives, the Fund attempts to achieve the economic equivalence it would
achieve if it were to invest directly in the underlying
security. Investments in derivatives may be counted towards the
Fund’s 80% investment policy if they have economic characteristics similar to
the other investments that are included in the Fund’s 80% investment policy. The
Fund intends to use the mark-to-market value of such derivatives for purposes of
complying with the Fund’s 80% investment policy.
The
Fund invests primarily in ETFs that have an investment objective similar to the
Fund’s or that otherwise are permitted investments with the Fund’s investment
policies described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities.
The
Adviser’s Process.
The Adviser seeks investment opportunities in companies with valuations whose
market prices are selling at a discount to their estimated intrinsic business
values. The Adviser’s valuation discipline attempts to estimate the range of a
company’s business value by considering past, current or future earnings, cash
flows, book value, sales or growth rates relative to the company’s history,
industry, or the broader market. The Adviser seeks to find companies that
are:
•Out-of-favor;
•Over-looked;
•Under-followed
in the market; and
•Often
trade at price levels which do not reflect the Adviser’s assessment of their
fundamental economic value.
If
a valuation analysis indicates that a company is priced at an appropriate
discount to its long-term earnings potential, the Fund may also invest in
cyclical companies or companies that experienced a temporary
setback.
The
Fund may also invest in securities whose prices are low relative to their asset
valuation or private market valuation. These may include companies that the
Adviser believes are:
•Extremely
oversold or neglected due to adverse events or complex capital structures;
•Mired
in company-specific or industry-related turnarounds;
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•Undergoing
financial or operational restructuring, including spin-offs, reorganizations,
liquidations, mergers and acquisitions; or
•In
possession of hidden value in the form of assets on their balance sheets that
are underappreciated by the market.
The
Adviser seeks catalysts or inflection points that may unlock shareholder value
by narrowing the gap between current market price and underlying business value.
Examples of catalysts or inflection points include:
•Changes
in regulation, management, or business mix;
•Industry
consolidation;
•Cost
reduction initiatives;
•Acquisition
or merger activity;
•New
products or investments;
•Share
repurchases;
•Asset
sales; or
•Cyclical
recoveries.
The
Adviser seeks a measure of downside protection for the Fund by purchasing
investments for the Fund’s portfolio whose risk-reward relationship meets
certain criteria established by the Adviser. More specifically, the Adviser
estimates a reasonable worst case low price for each security and rejects those
that have unacceptable spreads between that price and the company’s current
stock price.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, in its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis. The Adviser reviews certain ESG characteristics of the
Fund quarterly.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser performs an in-depth qualitative and quantitative analysis to
distinguish companies that the Adviser believes may exhibit some of the
following characteristics:
•Free
cash flow providing flexibility for growth and/or return of shareholder
value;
•High
and/or increasing returns on capital;
•Hidden
asset value or operations unrecognized by the market;
•Sustainable
and/or expanding profitability;
•Market
leadership and/or market share growth potential;
•Financial
stability, including strong balance sheet and modest use of debt;
•Effective
management team sensitive to shareholder interests;
•Sound
business strategy and competitive advantages;
•Franchise
value defensible by proprietary products, differentiated services or systems,
customer captivity, lowest-cost production, or identifiable brands;
•Product
cycles, pricing flexibility, rational investment or new product development, and
segment or geographic mix that supports stability and growth; or
•Attractive
valuation.
Adviser’s
Process — Selling Portfolio Securities.
The Adviser regularly monitors the companies in the Fund’s portfolio to
determine if there have been any material changes in the companies. The Adviser
may sell a security or reduce its position if:
•The
security has reached its target price level and reward to risk ratio is
unattractive;
•The
security is no longer valued at a discount to its intrinsic economic value, or
is overvalued relative to market expectations;
•The
company’s fundamentals change in a material, long-term manner, fail to meet
investment criteria, or are no longer reliable in estimating the underlying
business value;
•Unrealized
catalysts or management inability to enhance shareholder value result in “value
trap;”
•A
more attractively valued alternative, either existing holding or new investment,
offers greater reward to risk potential;
•The
security becomes too large of a position size; or
•Any
other factors may contribute to under-performance.
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Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal or investing emergency
reserves.
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Brown
Advisory Sustainable Small-Cap Core Fund
Principal
Investment Strategies
The
Fund seeks to achieve capital appreciation by primarily investing in equity
securities while giving special consideration to certain Environmental, Social
and Governance (“ESG”) criteria.
Under
normal circumstances, the Fund invests at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in equity securities of
small domestic companies that satisfy the Fund’s fundamental and ESG criteria
(“80% Policy”).
The
Adviser will seek to balance growth oriented and value oriented holdings to
achieve a core portfolio. Small companies, according to the Adviser, are
companies whose market capitalizations are generally less than $6 billion or the
maximum capitalization of companies in the Russell 2000®
Index (which was approximately $13.6 billion as of September 30, 2022),
whichever is greater, at the time of purchase (“Market Capitalization
Range”).
Market
capitalization is measured at the time of purchase.
The
market capitalizations of the companies in the Fund’s portfolio and the Russell
2000®
Index changes over time; the Fund will not automatically sell or cease to
purchase stock of a company it already owns just because the company’s market
capitalization grows or falls outside this range. The Fund must provide
shareholders with 60 days’ prior written notice if it changes its 80%
Policy.
Equity
securities include domestic common and preferred stock, equity-equivalent
securities such as convertible securities, stock futures contracts, equity
options, other investment companies, American Depositary Receipts (“ADRs”), real
estate investment trusts (“REITs”) and exchange traded funds
(“ETFs”).
The
Fund may also invest in private placements in these types of
securities.
The
Fund may invest in ETFs that have an investment objective similar to the Fund’s
or that otherwise are permitted investments with the Fund’s investment policies
described herein.
ADRs
are equity securities traded on U.S. securities exchanges, which are generally
issued by banks or trust companies to evidence ownership of foreign equity
securities. The Fund may invest up to 20% of its net assets in foreign
securities, including in emerging markets.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser begins by identifying a universe of small capitalization companies
within the Market Capitalization Range. The Adviser then performs an in-depth
analysis of the companies’ fundamentals to identify those that
have:
•Substantial
business opportunities relative to their operating history and size. These
opportunities may arise from addressing large and fragmented markets or markets
that are growing at rapid rates. In addition, the company’s ability to innovate
may help create new markets for its products or services;
•Proprietary
products, services or distribution systems that provide the company with a
competitive edge; or
•Attractively
priced stocks compared to their growth potential.
The
Adviser assesses a company’s ESG profile through conducting ESG research and
leveraging engagement when appropriate through dialogue with company management
teams as part of its fundamental due diligence process. ESG factors are
considered systematically through leveraging a repeatable process that strives
to assess how issuers manage ESG risks and sustainable investment opportunities.
As
part of the fundamental research approach, the Adviser has a process to
integrate, identify and consider the ESG risks and sustainable opportunities
using a proprietary ESG assessment. The Fund has access to this research and
considers relevant ESG issues. The Fund will invest primarily in securities with
established or improving sustainability characteristics. However, at the
Adviser’s discretion, the Fund is permitted to make an investment without a
written ESG assessment on file at the time of purchase, as long as the Adviser
believes the security meets the Fund’s sustainability criteria.
Additionally,
the Adviser undertakes ESG due diligence, with the goal of understanding
sustainable opportunities or ESG risks associated with the company. The Adviser
considers a variety of factors in ESG due diligence, including but not limited
to:
•Environmental
factors such as climate change, natural resource stewardship, pollution, and
waste management
•Social
factors such as human capital management and labor practices, customer
well-being, supply chain management, and community relations
•Governance
factors such as board and committee composition and structure, shareholder
rights, management incentives, and business ethics.
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The
Adviser pursues strategic, active engagement with companies and other
stakeholders in an effort to enhance due diligence and monitor sustainable
opportunities and ESG risks that may impact the investment thesis. Additional
monitoring is also undertaken through a quarterly review of certain ESG
characteristics of the Fund.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to ESG-related data from third-party providers. The Adviser does not
solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser. The Adviser is permitted to invest in
a security if it determines the security has an acceptable ESG risk profile
notwithstanding contrary third party data or third party recommendations. In
these circumstances, the ESG team will seek to engage the issuer or relevant
stakeholders of the issuer, when practicable and material to the investment
decision, to gain a deeper understanding of a risk, promote improved risk
management, and/or provide insight on potential opportunities. Investing on the
basis of ESG criteria is qualitative and subjective by nature, and there can be
no assurance that the process utilized by the Fund’s vendors or any judgment
exercised by the Adviser will reflect the beliefs or values of any particular
investor. The data informing this process is derived from a variety of sources,
including the companies themselves and third party sources. The Fund’s vendors
provide ESG-related data, research and rating services. The ESG-related data,
research and rating services include information related to potentially
controversial business exposure, ESG metrics such as emissions and diversity
data and controversy reporting. The Adviser believes its process is reasonably
designed, although such data and qualitative information are inherently subject
to interpretation, restatement, delay and omission outside of the Adviser’s
control.
Due
to the ESG investment approach taken by the portfolio managers, the Fund expects
to have minimal exposure to companies whose business activities are
significantly exposed to areas of controversial business, such as conventional
and controversial weapons, alcohol, tobacco, gambling, adult entertainment,
and/or extraction, exploration, production or refining of fossil fuels. However,
the Fund may hold companies which the Adviser believes are indirectly or
insignificantly exposed to these business activities.
The
Adviser considers each proxy voting proposal related to holdings in the Fund on
its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser regularly monitors the companies in the Fund’s portfolio to
determine if there have been any fundamental changes in the companies. The
Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•The
investment no longer meets the Fund’s ESG criteria;
•A
more attractively priced stock is found; or
•The
security becomes overvalued relative to the long-term expectation.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
interested in including ESG principles into your investments;
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
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The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal or investing emergency
reserves.
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Brown
Advisory Global Leaders Fund
Principal
Investment Strategies
Under
normal circumstances, the Fund aims to achieve its investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities. The Fund also will, under normal
market conditions: (1) invest at least 40% of its assets outside the United
States or if market conditions are not favorable, at least 30% of its assets
outside the United States, and (2) hold securities of issuers located in at
least three countries. The Fund’s non-U.S. investments may include equity
securities issued by companies that are established or operating in emerging
market countries. The Fund determines where a company is located, and thus,
whether a company is considered to be located outside the United States by
considering whether: (i) it is organized under the laws of or maintains its
principal office in a country located outside the United States; (ii) its
securities are principally traded on trading markets in countries located
outside the United States; (iii) it derives at least 50% of its total revenue or
profits from either goods produced or services performed or sales made in
counties located outside the United States; or (iv) it has at least 50% of its
assets in countries located outside the United States.
The
equity securities in which the Fund may invest will include the equity
securities of companies that Brown Advisory Limited (the “Sub-Adviser”) believes
are leaders within their industry or country as demonstrated by an ability to
deliver high relative return on invested capital over time. This typically can
be attributable to, among other things, a strong competitive position and a
defendable barrier to entry. These securities also typically use sustainability
in a positive way to compound a competitive advantage, and have strong
Environmental, Social, and Governance (“ESG”) risk management practices. The
equity securities in which the Fund may invest include common stock, preferred
stock, equity-equivalent securities, such as stock futures contracts, equity
options, other investment companies, American Depositary Receipts (“ADRs”),
Global Depositary Receipts (“GDRs”), and exchange traded funds (“ETFs”). The
equity securities in which the Fund may invest will generally be issued by mid-
and large capitalization companies. Medium and large market capitalization
companies are, according to the Sub-Adviser, those companies with market
capitalizations generally greater than $2 billion at the time of purchase. In
addition to those securities, the Fund may also invest in convertible bonds,
Rule 144A securities, U.S. Treasury bills, fixed and/or floating rate U.S.
Government securities, real estate investment trusts (“REITs”) and unlisted
securities. The Fund may invest in derivatives instruments, such as options,
futures contracts, including interest rate futures, and options on futures.
These investments will typically be made for investment purposes consistent with
the Fund’s investment objective and may also be used to mitigate or hedge risks
within the portfolio or for the temporary investment of cash balances.
The
Sub-Adviser views ESG factors as relevant to fundamentals and seeks to
understand their impact on companies in which the Fund may invest. ESG factors
are systematically integrated into the Sub-Adviser’s investment decision-making
process. The Sub-Adviser leverages proprietary ESG research that seeks to
understand sustainable opportunities and ESG risks for every security added to
the portfolio. However, at the Sub-Adviser’s discretion, the Fund is permitted
to make an investment without a written ESG assessment on file at the time of
purchase, as long as the Sub-Adviser believes the security meets the Fund’s
sustainability criteria.
When
assessing the sustainability profile of a company, the Sub-Adviser seeks
companies with sustainable opportunities, defined as companies that use
sustainability to improve their financial position. One way that companies may
improve their financial position is through what the Sub-Adviser deems to be
internal sustainability strategies that lead to one or more Sustainable Business
Advantages (such as revenue growth, cost improvements, or enhanced franchise
value). The Sub-Adviser also seeks companies with low exposure to ESG risks, or
that have strong ESG risk management practices in place where ESG risks may be
present.
The
Sub-Adviser pursues strategic, active engagement with companies and other
stakeholders in an effort to enhance due diligence and monitor sustainable
opportunities and ESG risks that may impact the investment thesis. Additional
monitoring is also undertaken through a quarterly review of certain ESG
characteristics of the Fund.
The
Fund expects to have low to no exposure to companies that have received
international sanctions, do not adhere to certain global norms and conventions,
or derive significant direct revenue from controversial weapons or related
business activities, tobacco, or fossil fuel extraction. However, the Fund may
hold companies which the Adviser believes are indirectly or insignificantly
exposed to these business activities.
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In
addition to the Sub-Adviser’s proprietary and qualitative ESG analysis, the
Sub-Adviser has access to ESG-related data from third-party providers. The
Sub-Adviser does not solely rely on third-party data or recommendations when
making investment decisions for the Fund. The ESG evaluation process considers
risks and opportunities holistically, meaning a security will not necessarily be
excluded from investment due to any one particular factor if the overall
analysis results in a favorable evaluation by the Sub-Adviser. The Sub-Adviser
is permitted to invest in a security if it determines the security has an
acceptable ESG risk profile notwithstanding contrary third party data or third
party recommendations. In these circumstances, the ESG team will seek to engage
the issuer or relevant stakeholders of the issuer, when practicable and material
to the investment decision, to gain a deeper understanding of a risk, promote
improved risk management, and/or provide insight on potential opportunities.
Investing on the basis of ESG criteria is qualitative and subjective by nature,
and there can be no assurance that the process utilized by the Fund’s vendors or
any judgment exercised by the Sub-Adviser will reflect the beliefs or values of
any particular investor. The data informing this process is derived from a
variety of sources, including the companies themselves and third party sources.
The Fund’s vendors provide ESG-related data, research and rating services. The
ESG-related data, research and rating services include information related to
potentially controversial business exposure, ESG metrics such as emissions and
diversity data and controversy reporting. The Sub-Adviser believes its process
is reasonably designed, although such data and qualitative information are
inherently subject to interpretation, restatement, delay and omission outside
the Sub-Adviser’s control.
The
Sub-Adviser considers each proxy voting proposal related to holdings in the Fund
on its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer.
The
Sub-Adviser’s Process — Purchasing Portfolio Securities.
The Sub-Adviser will use in-house research and other sources to identify a
universe of companies across a broad range of industries and countries whose
underlying fundamentals are considered by the Sub-Adviser to be attractive. The
Sub-Adviser will focus on companies that it believes exhibit the following
desirable characteristics:
•High-quality
businesses exhibiting favorable economics supported by enduring competitive
advantages that can deliver excess economic return over time;
•Capable
and trustworthy management with a long-term orientation to managing their
business;
•Sustainable,
predictable, premium growth in cash flow over time;
•Positive
industry dynamics;
•Sensible
capital allocation; and
•Have
a reasonable price - the Sub-Adviser expects growth to compound the excess
economic return over time.
Additionally,
the Sub-Adviser undertakes ESG due diligence, with the goal of understanding
sustainable opportunities or ESG risks associated with the company. The
Sub-Adviser considers a variety of factors in ESG due diligence, including but
not limited to:
•Environmental
factors such as climate change, natural resource stewardship, pollution, and
waste management
•Social
factors such as human capital management and labor practices, customer
well-being, supply chain management, and community relations
•Governance
factors such as board and committee composition and structure, shareholder
rights, management incentives, and business ethics.
The
Sub-Adviser believes that investing in the best companies globally in any sector
or country can deliver superior long-term investment returns. The Sub-Adviser
seeks to identify high-quality companies underpinned by structural long-term
growth and strong management teams, and to purchase those companies at
reasonable prices.
Investment
opportunities will reflect broad themes that touch on structural change and
represent business models with desirable characteristics such as sustainable
barriers to entry, enjoy a dominant market position, exhibit a certain level of
predictability, enhance customer outcomes, have pricing power and benefit from
secular growth. Management teams also must be high quality, manage for the long
term and have a demonstrated record of acting in the best interest of
shareholders. The Sub-Adviser emphasizes individual security selection based on
identifying long-term attractive businesses (i.e., those with significant
desirable characteristics, such as a viable, long-term franchise, sustainable
business model, generate excess economic return, high return on invested capital
and stable profitability) and few or no undesirable characteristics (such as
excessive financial or operational
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leverage,
risk of business or product obsolescence, excessive compensation, misaligned
incentives or management hubris), when they are available at reasonable prices.
The
Sub-Adviser’s Process — Selling Portfolio Securities.
The Sub-Adviser will monitor the companies in the Fund’s portfolio to determine
if there have been any fundamental changes in the companies. The Sub-Adviser may
sell a security or reduce its position in a security if:
•The
security’s market price exceeds the Sub-Adviser’s estimate of intrinsic
value;
•The
ratio of risk and reward of continuing to own the company’s equity is no longer
attractive;
•The
Sub-Adviser needs to raise cash to purchase a more attractive investment
opportunity, satisfy net redemptions, or other purposes; or
•The
Sub-Adviser determines the security’s sustainability profile is no longer
attractive.
Temporary
Defensive Position. In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and its principal investment strategy and invest without
limit in cash and prime quality cash equivalents such as prime commercial paper
and other money market instruments. A defensive position, taken at the
wrong time, may have an adverse impact on the Fund’s performance. The Fund may
be unable to achieve its investment objective during the employment of a
temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Need
regular income or stability of principal;
•Are
pursuing a short-term investment goal or investing emergency reserves;
or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Sustainable International Leaders Fund
Principal
Investment Strategies
Under
normal circumstances, the Fund aims to achieve its investment
objective by investing at least 80% of the value of its net assets (plus any
borrowings for investment purposes) in equity securities that satisfy the Fund’s
ESG criteria as well as by also investing at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in the equity securities of
companies that Brown Advisory Limited (the “Sub-Adviser”) believes are leaders
within their industry or country as demonstrated by an ability to deliver high
relative return on invested capital over time. This
typically can be attributable to, among other things, a strong competitive
position and a defendable barrier to entry. These
securities also typically use sustainability in a positive way to compound a
competitive advantage, and have strong ESG risk management practices. The Fund
also will, under normal market conditions: (1) invest at least 80% of its assets
outside the United States or if market conditions are not favorable, at least
70% of its assets outside the United States, and (2) hold securities of issuers
located in at least three countries (not including the United States). The Fund
determines where a company is located, and thus, whether a company is considered
to be located outside the United States by considering whether: (i) it is
organized under the laws of or maintains its principal office in a country
located outside the United States; (ii) its securities are principally traded on
trading markets in countries located outside the United States; (iii) it derives
at least 50% of its total revenue or profits from either goods produced or
services performed or sales made in countries located outside the United States;
or (iv) it has at least 50% of its assets in countries located outside the
United States. The Fund’s non-U.S. investments may include equity securities
issued by companies that are established or operating in emerging market
countries. Emerging market companies for these purposes consist of companies in
emerging market countries in Latin America, Asia, Eastern Europe, Africa, and
the Middle East, and include, among other countries, Brazil, China, Hong Kong,
India, Indonesia and Taiwan.
The
equity securities in which the Fund may invest include common stock, preferred
stock, equity-equivalent securities, such as stock futures contracts, equity
options, other investment companies, ADRs, GDRs, and ETFs. The equity securities
in which the Fund may invest will generally be issued by mid- and large
capitalization companies. Medium and large market capitalization companies are,
according to the Sub-Adviser, those companies with market capitalizations
generally greater than $2 billion at the time of purchase. In addition to those
securities, the Fund may also invest in convertible bonds, Rule 144A securities,
U.S. Treasury bills, fixed and/or floating rate U.S. Government securities,
REITs and unlisted securities. The Fund may invest in derivatives instruments,
such as options, futures contracts, including interest rate futures, and options
on futures. These investments will typically be made for investment purposes
consistent with the Fund’s investment objective and may also be used to mitigate
or hedge risks within the portfolio or for the temporary investment of cash
balances.
The
Sub-Adviser views ESG factors as relevant to fundamentals and seeks to
understand their impact on companies in which the Fund may invest. ESG factors
are systematically integrated into the Sub-Adviser’s investment decision-making
process. The Sub-Adviser leverages proprietary ESG research that seeks to
understand sustainable opportunities and ESG risks for every security added to
the portfolio. However, at the Sub-Adviser’s discretion, the Fund is permitted
to make an investment without a written ESG assessment on file at the time of
purchase, as long as the Sub-Adviser believes the security meets the Fund’s
sustainability criteria. The Sub-Adviser also leverages the ESG research and
resources of the Adviser.
When
assessing the sustainability profile of a company, the Sub-Adviser seeks
companies with emerging or mature sustainable opportunities, defined as
companies that use sustainability to improve their financial position. One way
that companies may improve their financial position is through what the
Sub-Adviser deems to be internal sustainability strategies that lead to one or
more Sustainable Business Advantages (such as revenue growth, cost improvements,
or enhanced franchise value). The Sub-Adviser believes that these represent
three distinct ways that underlying companies can use Sustainable Business
Advantages to improve their financial position: (1) Revenue Growth - that is, by
offering a product or service that helps customers reduce the cost of doing
business – by means of energy usage, water intake, or raw material usage – thus
helping to drive productivity and efficiency for their customers; (2) Cost
Improvements - which involves maintaining efficient and productive internal
operations that help to reduce resource consumption; and (3) Enhanced Franchise
Value - which involves using sustainability to improve the overall value of the
business franchise through increasing customer loyalty, elevating the brand
reputation, and improving employee engagement, retention and recruitment. The
Sub-Adviser also seeks companies with low exposure to ESG risks, or that have
strong ESG risk management practices in place where ESG risks may be
present.
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The
Sub-Adviser pursues strategic engagement with certain companies and other
stakeholders in an effort to enhance due diligence and monitor sustainable
opportunities and ESG risks that may impact the investment thesis. Additional
monitoring is also undertaken through a quarterly review of certain ESG
characteristics of the Fund.
The
Fund expects to have low to no exposure to companies that have received
international sanctions, do not adhere to certain global norms and conventions,
or derive significant direct revenue from controversial weapons or related
business activities, tobacco, or fossil fuel extraction. However, the Fund may
hold companies which the Sub-Adviser believes are indirectly or insignificantly
exposed to these business activities.
In
addition to the Sub-Adviser’s proprietary and qualitative ESG analysis, the
Sub-Adviser has access to ESG-related data from third-party providers. The
Sub-Adviser does not solely rely on third-party data or recommendations when
making investment decisions for the Fund. The ESG evaluation process considers
risks and opportunities holistically, meaning a security will not necessarily be
excluded from investment due to any one particular factor if the overall
analysis results in a favorable evaluation by the Sub-Adviser with oversight by
the Adviser. The Sub-Adviser is permitted to invest in a security if it
determines the security has an acceptable ESG risk profile notwithstanding
contrary third party data or third party recommendations. In these
circumstances, the ESG team will seek to engage the issuer or relevant
stakeholders of the issuer, when practicable and material to the investment
decision, to gain a deeper understanding of a risk, promote improved risk
management, and/or provide insight on potential opportunities. Investing on the
basis of ESG criteria is qualitative and subjective by nature, and there can be
no assurance that the process utilized by the Fund’s vendors or any judgment
exercised by the Sub-Adviser will reflect the beliefs or values of any
particular investor. The data informing this process is derived from a variety
of sources, including the companies themselves and third party sources. The
Fund’s vendors provide ESG-related data, research and rating services. The
ESG-related data, research and rating services include information related to
potentially controversial business exposure, ESG metrics such as emissions and
diversity data and controversy reporting. The Sub-Adviser believes its process
is reasonably designed, although such data and qualitative information are
inherently subject to interpretation, restatement, delay and omission outside
the Sub-Adviser’s control.
The
Sub-Adviser considers each proxy voting proposal related to holdings in the Fund
on its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proposals
regarding ESG issues, in general, are supported, especially when they would have
a clear and direct positive financial effect on shareholder value and would not
be burdensome or impose unnecessary or excessive costs on the
issuer.
The
Sub-Adviser’s Process — Purchasing Portfolio Securities.
The Sub-Adviser will use in-house research and other sources to identify a
universe of companies across a broad range of industries and countries whose
underlying fundamentals are considered by the Sub-Adviser to be attractive. The
Sub-Adviser will focus on companies that it believes exhibit the following
desirable characteristics:
•High-quality
businesses exhibiting favorable economics supported by enduring competitive
advantages that can deliver excess economic return over time;
•Capable
and trustworthy management with a long-term orientation to managing their
business;
•Sustainable,
predictable, premium growth in cash flow over time;
•Positive
industry dynamics;
•Sensible
capital allocation; and
•Have
a reasonable price - the Sub-Adviser expects growth to compound the excess
economic return over time.
Additionally,
the Sub-Adviser undertakes ESG due diligence, with the goal of uncovering any
sustainable opportunities or ESG risks associated with the company. The
Sub-Adviser considers a variety of factors in ESG due diligence, including but
not limited to:
•Environmental
factors such as climate change, natural resource stewardship, pollution, and
waste management
•Social
factors such as human capital management and labor practices, customer
well-being, supply chain management, and community relations
•Governance
factors such as board and committee composition and structure, shareholder
rights, management incentives, and business ethics.
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The
Sub-Adviser believes that investing in the best companies globally in any sector
or country can deliver superior long-term investment returns. The Sub-Adviser
seeks to identify high-quality companies underpinned by structural long-term
growth and strong management teams, and to purchase those companies at
reasonable prices.
Investment
opportunities will reflect broad themes that touch on structural change and
represent business models with desirable characteristics such as sustainable
barriers to entry, enjoy a dominant market position, exhibit a certain level of
predictability, enhance customer outcomes, have pricing power and benefit from
secular growth. Management teams also must be high quality, manage for the long
term and have a demonstrated record of acting in the best interest of
shareholders. The Sub-Adviser emphasizes individual security selection based on
identifying long-term attractive businesses (i.e., those with significant
desirable characteristics, such as a viable, long-term franchise, sustainable
business model, generate excess economic return, high return on invested capital
and stable profitability) and few or no undesirable characteristics (such as
excessive financial or operational leverage, risk of business or product
obsolescence, excessive compensation, misaligned incentives or management
hubris), when they are available at reasonable prices.
The
Sub-Adviser’s Process — Selling Portfolio Securities.
The Sub-Adviser will monitor the companies in the Fund’s portfolio to determine
if there have been any fundamental changes in the companies. The Sub-Adviser may
sell a security or reduce its position in a security if:
•The
security’s market price exceeds the Sub-Adviser’s estimate of intrinsic
value;
•The
ratio of risk and reward of continuing to own the company’s equity is no longer
attractive;
•The
Sub-Adviser needs to raise cash to purchase a more attractive investment
opportunity, satisfy net redemptions, or other purposes; or
•The
Sub-Adviser determines the security’s sustainability profile is no longer
attractive.
Temporary
Defensive Position. In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and its principal investment strategy and invest without
limit in cash and prime quality cash equivalents such as prime commercial paper
and other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may be
unable to achieve its investment objective during the employment of a temporary
defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Need
regular income or stability of principal;
•Are
pursuing a short-term investment goal or investing emergency reserves;
or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Intermediate Income Fund
Principal
Investment Strategies
The
Fund seeks to provide a high level of current income consistent with
preservation of principal within an intermediate-term maturity structure. Under
normal circumstances, the Fund invests at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in fixed income securities
such as U.S. Government securities, corporate fixed income securities,
mortgage-backed and asset-backed securities (“80% Policy”). The fixed income
securities in which the Fund may invest may also include municipal securities
issued by states, U.S. territories, and possessions, general obligation
securities and revenue securities. The foregoing may include municipal lease
obligations and insured municipal securities. The Fund may also invest in other
investment companies that invest in similar fixed income securities and the Fund
may count such holdings towards the Fund’s 80% Policy. The Fund must provide
shareholders with 60 days’ prior written notice if it changes its 80% Policy.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
Portfolio
Maturity.
The Fund invests in fixed income securities that primarily have a maturity that
is between 1 and 10 years. Under normal circumstances, the Fund’s portfolio will
have an average dollar weighted maturity between 3 and 10 years (“Maturity
Policy”). The Fund must provide shareholders with 60 days’ prior written
notice if it changes the limitations associated with its Maturity Policy. The
stated average maturity of the Fund may be different from the weighted average
maturity due to several factors including prepayment patterns as well as call
and put features of the fixed income securities held by the Fund.
The
Fund also expects to have an average duration of 2 to 5 years. Duration is a
measurement of price sensitivity to interest rate changes. For example, if
interest rates increase by 1%, under the Fund’s duration policy, the value of
the Fund may decrease between 2% to 5%.
Portfolio
Securities Credit Ratings.
The Fund may invest in a fixed income security, if at the time of its purchase,
the fixed income security is rated in the top four rating categories of a
Nationally Recognized Statistical Rating Organization (“NRSRO”) or is unrated
and deemed to be of comparable quality by the Adviser.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser determines the appropriate degree of interest rate risk (duration)
and maturity structure (yield curve positioning) for the portfolio. This is
based on its analysis of economic factors such as the interest rate outlook and
technical factors such as the shape of the yield curve. The Adviser then
determines the relative and absolute attractiveness of each of the following —
corporate securities, mortgage-backed securities, asset-backed securities,
Treasury securities and agency securities. Finally, it searches for securities,
which meet the maturity and duration needs of the Fund’s portfolio.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, into its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser may sell a fixed income security or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the investment criteria;
•A
more attractive security is found or funds are needed for another purpose;
or
•The
Adviser believes that the security has reached its appreciation
potential.
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Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Seek
income
•Seek
capital preservation
•Are
pursuing a long-term investment goal
•Are
willing to accept the risks of investing in fixed income
securities.
The
Fund may not be appropriate for you if you:
•Are
pursuing a short-term investment goal or are investing emergency
reserves
•Are
seeking capital appreciation
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Total Return Fund
Principal
Investment Strategies
The
Fund seeks to provide a competitive total return consistent with preservation of
principal. Under normal circumstances, the Fund invests at least 80% of the
value of its net assets (plus any borrowings for investment purposes) in fixed
income securities such as U.S. Government securities, corporate fixed income
securities, mortgage-backed and asset-backed securities (“80% Policy”). The
fixed income securities in which the Fund may invest may also include municipal
securities issued by states, U.S. territories, and possessions, general
obligation securities, revenue securities and securities issued by foreign
entities including foreign-sponsored governmental agencies. The foregoing may
include municipal lease obligations and insured municipal securities. The Fund
may also invest in other investment companies that invest in similar fixed
income securities and the Fund may count such holdings towards the Fund’s 80%
Policy. The Fund must provide shareholders with 60 days’ prior written notice if
it changes its 80% Policy. The Fund may also seek to obtain market exposure to
the securities in which it primarily invests by entering into a series of
purchase and sale contracts or by using other investment techniques, such as “To
Be Announced” (“TBA”) transactions. In a TBA transaction, a seller agrees to
deliver a security to the Fund at a future date, but the seller does not specify
the particular security to be delivered. Instead, the Fund agrees to accept any
security that meets specified terms.
The
Fund may invest up to 20% of its assets in high-yield securities, which are
speculative in nature. The Fund may also utilize derivatives including options,
futures, currency forwards, interest rate swaps and credit default swaps. These
investments will typically be made for investment purposes consistent with the
Fund’s objective and may also be used to mitigate or hedge risks within the
portfolio or for the temporary investment of cash balances. These positions may
also be used to manage interest rate risk or to create synthetic exposure to
particular credits. Investments in derivatives may be counted towards the Fund’s
80% investment policy if they have economic characteristics similar to other
investments that are included in the Fund’s 80% investment policy. The Fund
intends to use the mark-to-market value of such derivatives for purposes of
complying with the Fund’s 80% investment policy. The Fund may invest in
securities denominated in non-U.S. currencies. The Fund may also invest in bank
loans.
Portfolio
Maturity.
The Fund invests in fixed income securities that primarily have a maturity that
is between 0 and 30 years. Under normal circumstances, the Fund’s portfolio will
have an average dollar weighted maturity between 6 and 11 years (“Maturity
Policy”). The Fund must provide shareholders with 60 days’ prior written
notice if it changes the limitations associated with its Maturity Policy. The
stated average maturity of the Fund may be different from the weighted average
maturity due to several factors including prepayment patterns as well as call
and put features of the fixed income securities held by the Fund.
The
Fund also expects to have an average duration of 3 to 7 years. Duration is a
measurement of price sensitivity to interest rate changes. For example, if
interest rates increase by 1%, under the Fund’s duration policy, the value of
the Fund may decrease between 3% to 7%.
Portfolio
Securities Credit Ratings.
The Fund may invest an unlimited amount in fixed income securities, if at the
time of its purchase, the fixed income securities are rated in the top four
rating categories of a Nationally Recognized Statistical Rating Organization
(“NRSRO”) or is unrated and deemed to be of comparable quality by the Adviser.
The Fund may invest up to 20% of its assets in high-yield
securities.
The
Adviser’s Process — Purchasing Portfolio Securities.
For macro-level portfolio decisions, such as interest rate risk (duration) and
maturity structure (yield curve positioning), the Adviser seeks positions that
have a favorable upside/downside balance in various economic scenarios. The
Adviser avoids investing based on specific forecasts, rather, it analyzes a wide
variety of potential macro outcomes. The Adviser aims to have the Fund’s
portfolio perform especially well in certain scenarios but still perform
reasonably well in alternative scenarios.
Credit
positions are selected through a fundamental, bottom-up process. In particular,
the Adviser seeks fixed income securities that it believes to be fundamentally
undervalued and/or where the issuer’s credit profile is improving. This may
allow the portfolio to not only experience an attractive level of income
generation but may also realize capital gains as the trading price of the
security improves.
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While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, into its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser may sell an investment or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the investment criteria;
•Changing
credit profile and/or conditions result in an unacceptable risk
condition;
•A
more attractive security is found or funds are needed for another purpose;
or
•The
Adviser believes that the security has reached its appreciation
potential.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and its principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Seek
income;
•Seek
capital preservation;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept the risks of investing in fixed income
securities.
The
Fund may not be appropriate for you if you:
•Are
pursuing a short-term investment goal or are investing emergency
reserves;
•Are
seeking capital appreciation; or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Sustainable Bond Fund
Principal
Investment Strategies
The
Fund seeks to provide a competitive total return consistent with preservation of
principal while giving special consideration to certain environmental, social
and governance (“ESG”) criteria. Under normal conditions, the Fund invests at
least 80% of the value of its net assets (plus any borrowings for investment
purposes) in either fixed income securities of issuers that satisfy the Fund’s
ESG criteria or in securities where the use of the proceeds satisfy the Fund’s
ESG criteria. This 80% investment policy is non-fundamental and may be changed
without the vote of shareholders. Shareholders will receive 60 days’ prior
written notice of any changes to the Fund’s 80% investment policy. The Fund may
invest in corporate fixed income securities, mortgage-backed and asset-backed
securities, U.S Government securities and securities issued by foreign entities
including foreign-sponsored governmental agencies. The fixed income securities
in which the Fund may invest may also include municipal securities issued by
states, U.S. territories and possessions, general obligation securities and
revenue securities. The foregoing may include municipal lease obligations and
insured municipal securities. The Fund may also invest in other investment
companies that invest in similar fixed income securities and the Fund may count
such holdings towards the Fund’s 80% investment policy. The Fund may also engage
in “To Be Announced” transactions. Certain of the fixed income securities that
the Fund may invest in are often commonly referred to as “labeled bonds”.
Labeled bonds include, but are not limited to, “Green Bonds,” “Social Bonds,”
“Sustainability Bonds,” or “Sustainability-Linked Bonds.”
The
Fund invests in fixed income securities that primarily have a maturity that is
between 0 and 30 years and are rated in the top four rating categories of a
Nationally Recognized Statistical Rating Organization, or unrated and deemed to
be of comparable quality by the Adviser. Under normal circumstances, the Fund’s
portfolio will have an average dollar weighted maturity between 6 and 11 years
and an average duration of 3 to 7 years. Duration is a measurement of price
sensitivity to interest rate changes.
The
Fund may invest up to 20% of its assets in high-yield securities (“junk bonds”),
which are speculative in nature. The Fund may invest in securities denominated
in non-U.S. currencies. The Fund may also invest in bank loans.
The
Fund may invest in derivatives instruments, such as options, currency forwards,
futures contracts, including interest rate futures, options on futures, interest
rates swaps and credit default swaps. These investments will typically be made
for investment purposes consistent with the Fund’s investment objective and may
also be used to mitigate or hedge risks within the portfolio or for the
temporary investment of cash balances. These positions may also be used to
manage interest rate risk or to create synthetic exposure to particular credits.
Investments in derivatives may be counted towards the Fund’s 80% investment
policy if they have economic characteristics similar to the other investments
that are included in the Fund’s 80% investment policy. The Fund intends to use
the mark-to-market value of such derivatives for purposes of complying with the
Fund’s 80% investment policy.
The
Adviser utilizes ESG analysis in connection with the Fund's investments in fixed
income securities. ESG factors are considered systematically through leveraging
a repeatable process that strives to minimize risk and capture opportunity. As
part of the fundamental research approach, the Adviser has a process to
integrate, identify and consider the ESG risks and sustainable opportunities
using a proprietary ESG Assessment. Depending on the type of security, the ESG
assessment may be conducted at the sector, issuer, or security level. Not every
investment will be covered at the issuer or security level. The Fund has access
to this research and considers relevant ESG issues. However, at the Adviser’s
discretion, the Fund is permitted to make an investment without a written ESG
assessment on file at the time of purchase, as long as the Adviser believes the
security meets the Fund’s sustainability criteria. The Fund's environmental
evaluation considers matters including any one or more of the following factors:
clean and renewable energy, climate change and water conservation, waste
management, natural resource stewardship, and innovative efficiency solutions.
The Fund's social evaluation factors focus on matters including any one or more
of the following factors: labor management, community relations, supply chain
management, and customer well-being. The Fund's governance evaluation considers
matters such as stewardship of debt and capital, board governance and
transparency, and business ethics. The outcomes of the Adviser’s ESG research
may result in positive environmental and social impacts. While not a thematic
fund in nature, the nature of the Adviser's ESG research considers sustainable
investing themes, such as any one or more of sustainable technology innovation,,
accessibility of essential services like healthcare, financial inclusion, and
climate mitigation.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to some ESG-related data from third-party providers. The Adviser does
not solely rely on third-party data or recommendations when making investment
decisions for
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the
Fund. The ESG evaluation process considers risks and opportunities holistically,
meaning a security will not necessarily be excluded from investment due to any
one particular factor if the overall analysis results in a favorable evaluation
by the Adviser. The Adviser is permitted to invest in a security if it
determines the security has an acceptable ESG risk profile notwithstanding
contrary third party data or third party recommendations. In these
circumstances, the ESG team may also engage the issuer or relevant stakeholders
of the issuer, when practicable and material to the investment decision, to gain
a deeper understanding of a risk, promote improved risk management, and/or
provide insight on potential opportunities. Investing on the basis of ESG
criteria is qualitative and subjective by nature, and there can be no assurance
that the process utilized by the Fund’s vendors or any judgment exercised by the
Adviser will reflect the beliefs or values of any particular investor. The data
informing this process is derived from a variety of sources, including issuers
themselves and third party sources. The Fund’s vendors provide ESG-related data,
research and rating services. The ESG-related data, research and rating services
include information related to potentially controversial business exposure, ESG
metrics such as emissions and diversity data and controversy reporting. The
Adviser believes its process is reasonably designed, although such data and
qualitative information are inherently subject to interpretation, restatement,
delay and omission outside the Adviser’s control.
Portfolio
Maturity.
The Fund invests in fixed income securities that primarily have a maturity that
is between 0 and 30 years. Under normal circumstances, the Fund’s portfolio will
have an average dollar weighted maturity between 6 and 11 years (“Maturity
Policy”). The Fund must provide shareholders with 60 days’ prior written notice
if it changes the limitations associated with its Maturity Policy. The stated
average maturity of the Fund may be different from the weighted average maturity
due to several factors including prepayment patterns as well as call and put
features of the fixed income securities held by the Fund.
The
Fund also expects to have an average duration of 3 to 7 years. Duration is a
measurement of price sensitivity to interest rate changes. For example, if
interest rates increase by 1%, under the Fund’s duration policy, the value of
the Fund may decrease between 3% to 7%.
Portfolio
Securities Credit Ratings.
The Fund may invest an unlimited amount in fixed income securities, if at the
time of its purchase, the fixed income securities are rated in the top four
rating categories of a Nationally Recognized Statistical Rating Organization
(“NRSRO”) or is unrated and deemed to be of comparable quality by the Adviser.
The Fund may invest up to 20% of its assets in high-yield
securities.
The
Adviser’s Process - Purchasing Portfolio Securities.
The Fund will invest primarily in securities where the Adviser’s ESG analysis
has determined that the security has a positive effect on one or more of the
following:
Economic
Development and Social Inclusion
•Affordable
Housing: Investments that support affordable housing initiatives and provide
access for low- and moderate-income families.
•Economic
Mobility & Community Development: Investments that support community
economic development efforts aimed at financial inclusion and improving quality
of life.
•Education:
Investments that support schools and communities making a difference in learning
and development by providing access and eliminating barriers to education
especially for underserved populations.
•Diversity,
Inclusion & Equality: Investments that are driving racial and gender equity,
and empowering vulnerable populations.
Health
and Well-being
•Health
and Wellness: Investments that seek to promote health and well-being, and
provide access to health care services.
•Clean
Water & Sanitation: Investments that help to solve critical water quality
and sanitation problems by improving access to clean drinking water and
sanitation services, and safely managing freshwater ecosystems.
Environment
and Climate
•Sustainable
Technology Innovation: Investments that produce innovative products and services
that help to solve consumers' critical sustainability needs. This could include
(but is not limited to) resource-efficient products and services, such as
sustainable transportation.
•Efficient
Production & Conservation: Investments that enhance company operations
through resource efficiency (lower use of energy, raw materials), use of
renewable energy, recycling and smart logistics.
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•Clean
Energy: Investments that develop, build, or provide renewable
energy.
•Sustainable
Agriculture & Natural Resource Management: Investments that engage in
sustainable farming and natural resource management practices that minimize or
reverse land degradation, protect biodiversity, solve critical resource scarcity
problems and ensure long-term productivity of ecosystems. Natural resources
include water, land, and biodiversity.
Multi-Sector:
Investments in bonds where the proceeds are financing a range of projects in
different sectors as well as investments in companies/issuers that fall within
multiple sustainable themes.
For
macro-level portfolio decisions, such as interest rate risk (duration) and
maturity structure (yield curve positioning), the Adviser seeks positions that
have a favorable upside/downside balance in various economic scenarios. The
Adviser avoids investing based on specific forecasts, rather, it analyzes a wide
variety of potential macro outcomes. The Adviser aims to have the Fund’s
portfolio perform especially well in certain scenarios but still perform
reasonably well in alternative scenarios.
Credit
positions are selected through a fundamental, bottom-up process. In particular,
the Adviser seeks fixed income securities that it believes to be fundamentally
undervalued and/or where the issuer’s credit profile is improving. This may
allow the portfolio to not only experience an attractive level of income
generation but may also realize capital gains as the trading price of the
security improves.
The
Adviser’s Process - Selling Portfolio Securities.
The Adviser may sell an investment or reduce its position if:
•The
investment no longer meets the Fund’s ESG criteria;
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the investment criteria;
•Changing
credit profile and/or conditions result in an unacceptable risk
condition;
•A
more attractive security is found or funds are needed for another purpose;
or
•The
Adviser believes that the security has reached its appreciation
potential.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and its principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
interested in including ESG principles into your investments;
•Seek
income;
•Seek
capital preservation;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept the risks of investing in fixed income
securities.
The
Fund may not be appropriate for you if you:
•Are
pursuing a short-term investment goal or are investing emergency
reserves;
•Are
seeking capital appreciation; or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Maryland Bond Fund
Principal
Investment Strategies
The
Fund seeks to provide a high level of current income exempt from both Federal
and Maryland State income taxes without undue risk. Under normal
circumstances, the Fund invests at least 80% of the value of its net assets
(plus any borrowings for investment purposes) in Maryland bonds, including bonds
issued on behalf of the State of Maryland, its local governments and public
financing authorities (“80% Policy”). This
80% Policy cannot be changed without shareholder approval. The
Fund may also invest in municipal securities issued by other states,
U.S. territories, and possessions, U.S. Government securities, general
obligation securities and revenue securities, including private activity
bonds. The Fund is non-diversified which means that it may invest a
significant portion of its assets in the securities of a single issuer or
smaller number of issuers. Generally, the average weighted effective maturity of
the Fund’s portfolio securities will be between 4 and 10 years. Normally,
the Fund will invest at least 80% of its total assets in securities the interest
of which is exempt from Federal and Maryland State income taxes, although such
interest from the Fund’s investments may be subject to the Federal alternative
minimum tax (“AMT”). Municipal securities include municipal bonds, notes,
and leases. Municipal leases are securities that permit government issuers
to acquire property and equipment without the security being subject to
constitutional and statutory requirements for the issuance of long-term fixed
income securities.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser regularly monitors economic factors such as interest rate outlook
and technical factors such as the shape of the yield curve in combination with
the stated objective of the Fund to determine an appropriate maturity profile
for the Fund’s investment portfolio. The Adviser then principally searches for
securities that satisfy the maturity profile of the Fund and that provide the
greatest potential return relative to the risk of the security.
While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, into its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser may sell a fixed income security or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the Adviser’s investment
criteria;
•A
more attractive security is found or funds are needed for another purpose;
or
•The
Adviser believes that the security has reached its appreciation
potential.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s performance. The Fund may be unable to achieve its investment objective
during the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
a Maryland resident;
•Are
an income-oriented investor in a high tax bracket and desire tax-exempt
income;
•Seek
income and more price stability than stocks offer; or
•Are
pursuing a long-term investment goal.
The
Fund may not be appropriate for you if you:
•Are
not a Maryland resident;
•Are
pursuing a short-term investment goal or are investing emergency
reserves;
•Are
investing funds in a tax-deferred or tax-exempt account (such as an IRA);
or
•Do
not desire tax-exempt income.
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Brown
Advisory Tax-Exempt Bond Fund
Investment
Objective
The
Brown Advisory Tax-Exempt Bond Fund seeks to provide a high level of current
income exempt from Federal income tax by investing primarily in
intermediate-term investment grade municipal bonds. The Fund’s investment
objective is non-fundamental and may be changed by a vote of the Board without
shareholder approval upon a 60-day written notice to shareholders.
Principal
Investment Strategies
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in securities the interest
of which is exempt from Federal income taxes and that do not subject
shareholders to the federal alternative minimum tax (“AMT”). This 80% policy
cannot be changed without shareholder approval. The Fund may invest up to
20% of its assets in securities that may fully subject shareholders to Federal
income tax, including the AMT. In addition, all capital gains are subject
to Federal and state taxes in addition to AMT. The Fund is
non-diversified, which means that the Fund may invest a significant portion of
its assets in the securities of a single issuer or small number of issuers. The
Fund may also invest more than 25% of its total assets in municipal bonds that
are related in such a way that an economic, business or political development or
change affecting one such security could also affect the other securities (for
example, securities whose issuers are located in the same state).
Under
normal conditions, the Adviser seeks to achieve the Fund’s investment objective
by investing in municipal securities issued by states, U.S. territories, and
possessions, U.S. Government securities, general obligation securities and
revenue securities, including private activity bonds. Municipal securities
include state and local general obligation bonds, essential service revenue
issues (principally, water and sewer, transportation, public power, combined
utilities and public universities), pre-refunded bonds and municipal
leases. Municipal leases are securities that permit government issuers to
acquire property and equipment without the security being subject to
constitutional and statutory requirements for the issuance of long-term fixed
income securities. To enhance yield, the Fund may also invest in selective
enterprise revenue and/or private activity issues. The repayment of
principal and interest on some of the municipal securities in which the Fund may
invest may be guaranteed or insured by a monoline insurance company or other
financial institution. The Fund also may invest in other investment
companies, principally money market funds.
The
Adviser determines which securities to purchase by first evaluating whether a
security falls within the credit guidelines set for the Fund by reviewing the
ratings given by a Nationally Recognized Statistical Rating Organization
(“NRSRO”). Under the credit guidelines, the Fund will hold at least 80% of
its total assets in investment grade municipal debt securities, as rated by
independent rating agencies when purchased, or if unrated, determined by the
Adviser to be of comparable quality. The credit guidelines provide that the Fund
may also hold up to 20% of its total assets in securities rated below investment
grade by an independent rating agency or, if not rated, determined to be of
equivalent quality by the Adviser. Securities that are rated below investment
grade by independent rating agencies are commonly referred to as “junk
bonds.” Such lower rated securities and other municipal securities may
become illiquid due to events relating to the issuer of the securities, market
events, economic conditions or investor perceptions. If independent rating
agencies assign different ratings to the same security, the Fund will use the
higher rating for purposes of determining the security’s credit
quality.
The
Adviser then determines the appropriate maturity date and coupon choice after
analyzing the current and targeted portfolio structure, and whether or not the
issue is fairly priced. Generally, the average weighted effective maturity
of the Fund’s portfolio securities will be between 4 and 10 years.
In
determining the municipal securities in which the Fund may invest, the Adviser
will use a process for researching securities for purchase that is based on
credit research and involves due diligence on each issuer, state, municipality
and sector relating to a municipal security.
The
Adviser’s Process — Purchasing Portfolio Securities.
The Adviser regularly monitors economic factors such as interest rate outlook
and technical factors such as the shape of the yield curve in combination with
the stated objective of the Fund to determine an appropriate maturity profile
for the Fund’s investment portfolio. The Adviser then principally searches for
securities that satisfy the maturity profile of the Fund and that provide the
greatest potential return relative to the risk of the security.
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While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, into its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis.
The
Adviser’s Process — Selling Portfolio Securities.
The Adviser may sell a fixed income security or reduce its position if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the Adviser’s investment
criteria;
•A
more attractive security is found or funds are needed for another purpose;
or
•The
Adviser believes that the security has reached its appreciation
potential.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or tax-exempt quality cash equivalents. A defensive
position, taken at the wrong time, may have an adverse impact on the Fund’s
performance. The Fund may be unable to achieve its investment objective during
the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
an income-oriented investor in a high tax bracket and desire tax-exempt
income;
•Seek
income and more price stability than stocks offer; or
•Are
pursuing a long-term investment goal.
The
Fund may not be appropriate for you if you:
•Are
pursuing a short-term investment goal or are investing emergency
reserves;
•Are
investing funds in a tax-deferred or tax-exempt account (such as an IRA);
or
•Do
not desire tax-exempt income.
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Brown
Advisory Tax-Exempt Sustainable Bond Fund
Investment
Objective
The
Fund seeks to provide a high level of current income exempt from Federal income
tax by investing primarily in intermediate-term investment grade municipal bonds
while giving special consideration to certain ESG criteria. The Fund’s
investment objective is non-fundamental and may be changed by a vote of the
Board without shareholder approval upon a 60-day written notice to
shareholders.
Principal
Investment Strategies
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets (plus any borrowings for investment purposes) in fixed income securities
the interest of which is exempt from Federal income taxes, that do not subject
shareholders to the federal AMT, and that have either a bond issuer or a use of
proceeds of the bond issuance that satisfies the Fund’s ESG criteria. This 80%
policy cannot be changed without shareholder approval. The Fund may invest up to
20% of its assets in securities that may fully subject shareholders to Federal
income tax, including the AMT. In addition, all capital gains are subject
to Federal and state taxes in addition to AMT. The Fund is
non-diversified, which means that the Fund may invest a significant portion of
its assets in the securities of a single issuer or small number of issuers. The
Fund may also invest more than 25% of its total assets in municipal bonds that
are related in such a way that an economic, business or political development or
change affecting one such security could also affect the other securities (for
example, securities whose issuers are located in the same state). Certain of the
fixed income securities that the Fund may invest in are often referred to as
“labeled bonds.” Labeled bonds include, but are not limited to, “Green Bonds”,
“Social Bonds”, “Sustainability Bonds”, or “Sustainability-Linked
Bonds”.
Under
normal conditions, the Adviser seeks to achieve the Fund’s investment objective
by investing in municipal securities issued by states, U.S. territories, and
possessions, U.S. Government securities, general obligation securities and
revenue securities, including private activity bonds. Municipal securities
include state and local general obligation bonds, essential service revenue
issues (principally, water and sewer, transportation, public power, combined
utilities and public universities), pre-refunded bonds and municipal
leases. The Fund may also invest in private placements in these types of
securities. Municipal leases are securities that permit government
issuers to acquire property and equipment without the security being subject to
constitutional and statutory requirements for the issuance of long-term fixed
income securities. To enhance yield, the Fund may also invest in selective
enterprise revenue and/or private activity issues. The repayment of
principal and interest on some of the municipal securities in which the Fund may
invest may be guaranteed or insured by a monoline insurance company (a bond
insurer) or other financial institution. The Fund also may invest in other
investment companies, principally money market funds.
The
Adviser determines which securities to purchase by first evaluating whether a
security falls within the credit guidelines set for the Fund by reviewing the
ratings given by a Nationally Recognized Statistical Rating Organization
(“NRSRO”). Under the credit guidelines, the Fund will hold at least 80% of
its total assets in investment grade municipal debt securities, as rated by an
independent ratings agency when purchased, or if unrated, determined by the
Adviser to be of comparable quality. The credit guidelines provide that the Fund
may also hold up to 20% of its total assets in securities rated below investment
grade by an independent rating agency or, if not rated, determined to be of
equivalent quality by the Adviser. Securities that are rated below investment
grade by independent rating agencies are commonly referred to as “junk
bonds.” Such lower rated securities and other municipal securities may
become illiquid due to events relating to the issuer of the securities, market
events, economic conditions or investor perceptions. If independent rating
agencies assign different ratings to the same security, the Fund will use the
higher rating for purposes of determining the security’s credit
quality.
The
Adviser then determines the appropriate maturity date and coupon choice after
analyzing the current and targeted portfolio structure, and whether or not the
issue is fairly priced. Generally, the average weighted effective maturity
of the Fund’s portfolio securities will be between 4 and 10 years.
In
determining the municipal securities in which the Fund may invest, the Adviser
will use a process for researching securities for purchase that is based on
extensive credit research and involves due diligence on each issuer, state,
municipality and sector relating to a municipal security. The Fund may invest in
derivatives instruments, such as options, futures contracts, including interest
rate futures, and options on futures. These investments will typically be made
for investment purposes consistent with the Fund’s investment objective and may
also be used to mitigate or hedge risks within the portfolio or for the
temporary investment of cash balances. These derivative instruments
will be counted toward the Fund’s 80% policy to the extent they have economic
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characteristics
similar to the securities included within that policy. The Fund intends to use
the mark-to-market value of such derivatives for purposes of complying with the
Fund’s 80% investment policy.
The
Adviser utilizes ESG analysis in connection with the Fund's investments in
fixed-income securities. ESG factors are considered systematically through
leveraging a repeatable process that strives to minimize risk and capture
opportunity. As part of the fundamental research approach, the Adviser has a
process to integrate, identify and consider the ESG risks and sustainable
opportunities using a proprietary ESG Assessment. The ESG Assessment may be
conducted at the sector, issuer or security level. Not every investment will be
covered at the issuer or security level. The Fund has access to this research
and considers relevant ESG issues. However, at the Adviser’s discretion, the
Fund is permitted to make an investment without a written ESG assessment on file
at the time of purchase, as long as the Adviser believes the security meets the
Fund’s sustainability criteria. The Fund's environmental evaluation considers
matters including any one or more of the following factors: clean and renewable
energy, climate change and water conservation, efficient mass transit and
innovative efficiency solutions. The Fund's social evaluation factors focus on
matters including any one or more of the following factors: economic impact,
access to affordable healthcare and community health promotion, and access to
education opportunities. The Fund's governance evaluation considers matters such
as stewardship of debt and capital, and board governance and transparency. The
outcomes of the Adviser’s ESG research may result in positive environmental and
social impacts. While not a thematic fund in nature, the nature of the Adviser's
ESG research considers sustainable investing themes, such as any one or more of
responsible water management, accessibility of essential services like
healthcare, transportation, education, and climate mitigation.
In
addition to the Adviser’s proprietary and qualitative ESG analysis, the Adviser
has access to some ESG-related data from third-party providers. The Adviser does
not solely rely on third-party data or recommendations when making investment
decisions for the Fund. The ESG evaluation process considers risks and
opportunities holistically, meaning a security will not necessarily be excluded
from investment due to any one particular factor if the overall analysis results
in a favorable evaluation by the Adviser. The Adviser is permitted to invest in
a security if it determines the security has an acceptable ESG risk profile
notwithstanding contrary third party data or third party recommendations. In
these circumstances, the ESG team may also engage the issuer or relevant
stakeholders of the issuer, when practicable and material to the investment
decision, to gain a deeper understanding of a risk, promote improved risk
management, and/or provide insight on potential opportunities. Investing on the
basis of ESG criteria is qualitative and subjective by nature, and there can be
no assurance that the process utilized by the Fund’s vendors or any judgment
exercised by the Adviser will reflect the beliefs or values of any particular
investor. The data informing this process is derived from a variety of sources,
including issuers themselves and third party sources, credit rating agencies,
government databases and news outlets. The Adviser believes its process is
reasonably designed, although such data and qualitative information are
inherently subject to interpretation, restatement, delay and omission outside
the Adviser’s control.
The
Adviser’s Process - Purchasing Portfolio Securities.
The
Adviser regularly monitors economic factors such as interest rate outlook and
technical factors such as the shape of the yield curve in combination with the
stated objective of the Fund to determine an appropriate maturity profile for
the Fund’s investment portfolio.
The
Adviser then principally searches for securities that satisfy the maturity
profile of the Fund and that provide the greatest potential return relative to
the risk of the security.
The
Fund will invest primarily in securities where the Adviser’s ESG analysis has
determined that the security has a positive effect on one or more of the
following.
Economic
Development and Social Inclusion
•Affordable
Housing: Investments that support affordable housing initiatives and provide
access for low- and moderate-income families.
•Economic
Mobility & Community Development: Investments that support community
economic development efforts aimed at financial inclusion and improving quality
of life.
•Education:
Investments that support schools and communities making a difference in learning
and development by providing access and eliminating barriers to education
especially for underserved populations.
•Diversity,
Inclusion & Equality: Investments that are driving racial and gender equity,
and empowering vulnerable populations.
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Health
and Well-being
•Health
and Wellness: Investments that seek to promote health and well-being, and
provide access to health care services.
•Clean
Water & Sanitation: Investments that help to solve critical water quality
and sanitation problems by improving access to clean drinking water and
sanitation services, and safely managing freshwater ecosystems.
Environment
and Climate
•Sustainable
Technology Innovation: Investments that produce innovative products and services
that help to solve consumers' critical sustainability needs. This could include
(but is not limited to) resource-efficient products and services, such as
sustainable transportation.
•Efficient
Production & Conservation: Investments that enhance company operations
through resource efficiency (lower use of energy, raw materials), use of
renewable energy, recycling and smart logistics.
•Clean
Energy: Investments that develop, build, or provide renewable
energy.
•Sustainable
Agriculture & Natural Resource Management: Investments that engage in
sustainable farming and natural resource management practices that minimize or
reverse land degradation, protect biodiversity, solve critical resource scarcity
problems and ensure long-term productivity of ecosystems. Natural resources
include water, land, and biodiversity.
Multi-Sector:
Investments in bonds where the proceeds are financing a range of projects in
different sectors as well as investments in issuers that fall within multiple
sustainable themes.
The
Adviser’s Process - Selling Portfolio Securities.
The Adviser may sell a fixed income security or reduce its position
if:
•Revised
economic forecasts or interest rate outlook requires a repositioning of the
portfolio;
•The
security subsequently fails to meet the Adviser’s investment
criteria;
•A
more attractive security is found or funds are needed for another purpose;
•The
Adviser believes that the security has reached its appreciated potential;
or
•The
investment no longer meets the Fund’s ESG criteria.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or tax-exempt quality cash equivalents. A defensive
position, taken at the wrong time, may have an adverse impact on the Fund’s
performance. The Fund may be unable to achieve its investment objective during
the employment of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
interested in including ESG principles into your investments;
•Are
an income-oriented investor in a high tax bracket and desire tax-exempt
income;
•Seek
income and more price stability than stocks offer; or
•Are
pursuing a long-term investment goal.
•The
Fund may not be appropriate for you if you:
•Are
pursuing a short-term investment goal or are investing emergency
reserves;
•Are
investing funds in a tax-deferred or tax-exempt account (such as an IRA);
or
•Do
not desire tax-exempt income.
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Brown
Advisory Mortgage Securities Fund
Principal
Investment Strategies
Under
normal conditions, the Adviser seeks to achieve the Fund’s investment objective
by investing at least 80% of the value of its net assets (plus any borrowings
for investment purposes) in investment grade mortgage-related securities (the
“80% Policy). The Fund must provide shareholders with 60 days' prior notice if
it changes its 80% Policy. Mortgage-related securities consist of
mortgage-backed securities (“MBS”) such as residential mortgage-backed
securities (“RMBS”),
commercial mortgage-backed securities (“CMBS”), stripped mortgage-backed
securities (“SMBS”), collateralized mortgage obligations (“CMOs”), inverse
floating rate obligations and other similar types of securities representing an
interest in or that are secured by mortgages. The Fund may also seek to obtain
market exposure to the securities in which it primarily invests by entering into
a series of purchase and sale contracts or by using other investment techniques,
such as “To Be Announced” (“TBA”) transactions. In a TBA transaction, a seller
agrees to deliver a mortgage-related security to the Fund at a future date, but
the seller does not specify the particular security to be delivered. Instead,
the Fund agrees to accept any security that meets specified terms. The Fund may
also invest in municipal housing bonds and other investment companies. The Fund
invests in securities of various maturities and durations.
The
Fund will hold at least 80% of its total assets in investment grade
mortgage-related securities (that is, securities rated in the top four ratings
categories) as rated at the time of purchase by a Nationally Recognized
Statistical Rating Organization (an “NRSRO”), or if unrated, as determined by
the Adviser to be of comparable quality. The Fund may also hold up to 20% of its
total assets in securities that are rated below investment grade by an NRSRO or,
if not rated, determined to be of equivalent quality by the Adviser. Securities
that are rated below investment grade by independent rating agencies are
commonly referred to as “junk bonds.” Such lower rated securities may become
illiquid due to events relating to the issuer of the securities, market events,
economic conditions or investor perceptions. If independent rating agencies
assign different ratings to the same security, the Fund will use the higher
rating for purposes of determining the security’s credit quality.
The
Fund may invest in derivatives instruments, such as options, futures contracts,
including interest rate futures, and options on futures. These investments will
typically be made for investment purposes consistent with the Fund’s investment
objective and may also be used to mitigate or hedge risks within the portfolio
or for the temporary investment of cash balances. These derivative
instruments will be counted toward the Fund’s 80% Policy to the extent they have
economic characteristics similar to the securities included within that policy.
The Fund intends to use the mark-to-market value of such derivatives for
purposes of complying with the Fund’s 80% investment policy.
Portfolio
Maturity.
The Fund will generally invest in fixed income instruments which pay principal
over time, not just at maturity. In general, mortgage-related securities,
including MBS, have stated maturities equal to the final principal payment that
would be due, which is commonly 30-years from origination. However, the Adviser
will analyze the securities based on the expected timing of actual cash flows.
On that basis, most of the securities held will have an expected life in the
range of 2-8 years.
The
Adviser’s Process - Purchasing Portfolio Securities. The
Adviser seeks MBS and other securitized instruments where it is believed that
the income and/or price appreciation potential is attractive. This will depend
partly on the Adviser’s view on interest rates, interest rate volatility,
mortgage prepayments (including refinancing and mobility of homeowners), as well
as other factors. These factors are applied across the market broadly in
determining what coupon rates or term bonds in which the Fund will invest, but
more importantly, on a security by security basis, analyzing the specific
characteristics of a given pool of MBS or structure.
A
similar process will be utilized whether examining, pass-through MBS pools, MBS
derivatives, collateralized mortgage obligations (CMOs) or credit-sensitive
securities. The focus will be on whether a given security has a risk/reward
relationship that is deemed by the Adviser to be favorable to investors.
The
Adviser may also purchase bonds that serve a specific purpose in the portfolio,
such as interest rate risk mitigation. For example, Interest-Only CMO structures
often gain in price when interest rates rise, and thus can be useful in reducing
the overall interest rate risk experienced by the Fund.
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While
incorporating Environmental, Social and Governance (“ESG”) analysis is not a
primary focus of the Fund, the Adviser has the option to incorporate, at its
election, proprietary ESG research or third party ESG data, into its investment
decision-making process where ESG factors are considered by the Adviser to be
material to long-term performance. Where ESG analysis is taken into account, the
Adviser assesses qualitative or quantitative ESG factors in combination with
fundamental analysis.
The
Adviser’s Process - Selling Portfolio Securities.
The
Adviser may sell a security or reduce its position if:
•Revised
economic outlook requires a repositioning of the portfolio or alters the
risk/reward of a given security
•Changes
in a security’s composition, such as faster or slower prepayments than expected,
alter its risk/reward balance to an unfavorable position
•A
more attractive security is found, or
•The
Adviser believes the security has reached its appreciation
potential.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Seek
income;
•Seek
capital preservation;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept the risks of investing in fixed income
securities.
The
Fund may not be appropriate for you if you:
•Are
pursuing a short-term investment goal or are investing emergency reserves;
•Are
seeking capital appreciation; or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory − WMC Strategic European Equity Fund
Principal
Investment Strategies
Under
normal conditions, the Brown Advisory − WMC Strategic European Equity Fund seeks
to achieve its investment objective by investing at least 80% of the value of
its net assets (plus any borrowings for investment purposes) in equity
securities of companies which are domiciled in or exercise the predominant part
of their economic activity in Europe – defined as countries included in the MSCI
Europe Index. The Fund will provide shareholders with 60 days’ prior written
notice if it changes its 80% investment policy.
The
Fund may purchase the securities of companies of any market capitalization. The
Fund may invest in equity securities, which includes common stock, preferred
stock, equity-equivalent securities such as convertible securities, stock
futures contracts, equity options, other investment companies, American
Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), real estate
investment trusts (“REITs”) and exchange traded funds (“ETFs”). The Fund may
utilize options, currency forwards, swaps, futures contracts, options on futures
and participatory notes. These investments will typically be made for investment
purposes consistent with the Fund’s investment objective and may also be used to
mitigate or hedge risks within the portfolio or for the temporary investment of
cash balances. By investing in derivatives, the Fund attempts to achieve the
economic equivalence it would achieve if it were to invest directly in the
underlying security.
The
Fund may invest up to 20% of its net assets in securities of companies that are
established or operating in countries that are considered outside of Europe
which may include less developed countries as well as other developed market
countries.
Wellington
Management’s Investment Process
Wellington
Management’s decision-making process and country allocation is driven by stock
selection: while the Fund will invest with an awareness of the global economic
backdrop, bottom-up stock selection is the focus of Wellington Management.
The
investment process begins with a review of large, mid and small-capitalization
stocks in the developed European equity market. The Strategic European Equity
approach focuses on those companies and industries that enjoy above-average
sales, earnings and/or cash-flow growth which the market has not yet fully
anticipated. The team intensively evaluates all these companies leveraging the
global industry analysts, other portfolio managers and equity research analysts
at Wellington Management.
The
fundamental research focuses on a company’s:
•Sources
and sustainability of growth: sales, earnings and cash flow as well as secular
vs. cyclical drivers.
•Business
model: industry niche, barriers to entry, competition, substitution, revenue
structure, margins and sustainability.
•Proprietary
technology, processes, brands and tangible assets.
•Balance
sheet: quality, allocation of capital, ROIC and ROE.
•Corporate
governance and corporate ownership.
Wellington
Management’s investment process results in the selection of companies that
typically demonstrate one or more of the following characteristics:
1.structural
growth of their business driven by a secular trend;
2.superior
business model; and/or
3.technological
competitive advantage.
The
approach focuses on those companies and industries that enjoy above-average
sales and/or earnings growth as we believe these companies have the potential
for significant longer-term rewards.
Finally,
time is spent on estimating the price one should pay for such a superior
business and making sure its growth potential is not yet fully reflected in the
stock price. Key metrics include normalized P/E, Price to Free Cash Flow and P/E
both on an absolute and relative basis and Price to Free Cash Flow. The
Strategic European Equity approach looks at historical valuation both versus the
company and the industry as well as the potential for valuation multiple
expansion.
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Wellington
Management’s Process - Purchasing Portfolio Securities. The
Strategic European Equity approach focuses on those companies and industries
that enjoy above-average sales and/or earnings growth. The three key categories
used to evaluate potential purchase candidates are:
•Structural
Growth: Allows companies to achieve superior earnings growth and cash-flow
generation over a prolonged period of time. Drivers of structural growth
include: (1) secular industry or country growth; (2) superior business model;
and (3) technological leadership.
•Competitive
landscape: Using Porter’s 5-Forces model, we assess industry positioning and
competitive advantages that drive margins and returns.
•Valuation:
Growth potential not yet fully reflected in stock price.
Wellington
Management’s Process - Selling Portfolio Securities. Wellington
Management regularly monitors the companies in the Fund’s portfolio to determine
if there have been any material changes in the companies. Wellington Management
may sell a security or reduce its position if:
•Valuation
fully reflects the company’s growth potential.
•Deterioration
of structural growth drivers, competitive position and/or company fundamentals.
•More
attractive investment candidates are identified.
Given
the expected investment horizon of 2-5 years, where a stock reaches a valuation
that fairly reflects its growth potential earlier than expected, the position
may be sold or trimmed, unless the growth prospects improve.
Temporary
Defensive Position. In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong time,
may have an adverse impact on the Fund’s performance. The Fund may be unable to
achieve its investment objective during the employment of a temporary defensive
measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your investment;
•Are
pursuing a long-term investment goal;
•Are
willing to accept risk of market value fluctuation in the short-term; or
•Want
an investment that focuses only on a particular region.
The
Fund may not be appropriate for you if you:
•Need
regular income or stability of principal;
•Are
pursuing a short-term investment goal or investing emergency reserves; or
•Cannot
tolerate fluctuation in the value of your investments.
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Brown
Advisory Emerging Markets Select Fund
Principal
Investment Strategies
Under
normal conditions, the Brown Advisory Emerging Markets Select Fund seeks to
achieve its investment objective by investing at least 80% of the value of its
net assets (plus any borrowings for investment purposes) in equity securities
issued by companies that are established or operating in emerging market
countries. These will consist of companies in emerging market countries in Latin
America, Asia, Eastern Europe, Africa, and the Middle East. The Fund may
purchase the securities of companies of any market capitalization. The Fund will
provide shareholders with 60 days’ prior written notice if it changes its 80%
investment policy.
The
Fund considers a company to be established or operating in emerging market
countries if: (i) it is organized under the laws of or maintains its principal
office in an emerging market country; (ii) its securities are principally traded
on trading markets in emerging markets countries; (iii) it derives at least 50%
of its total revenue or profits from either goods or services produced or sales
made in emerging markets countries; or (iv) it has at least 50% of its assets in
emerging market countries.
The
Fund may invest in equity securities, which includes common stock, preferred
stock, equity-equivalent securities such as convertible securities, stock
futures contracts, equity options, other investment companies, American
Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), real estate
investment trusts (“REITs”) and exchange traded funds (“ETFs”), and the Fund may
also invest in fixed income securities and private placements. The Fund may
utilize options, futures contracts, options on futures and participatory notes.
These investments will typically be made for investment purposes consistent with
the Fund’s investment objective and may also be used to mitigate or hedge risks
within the portfolio or for the temporary investment of cash balances. By
investing in derivatives, the Fund attempts to achieve the economic equivalence
it would achieve if it were to invest directly in the underlying security.
Investments in derivatives may be counted towards the Fund’s 80% investment
policy if they have economic characteristics similar to the other investments
that are included in the Fund’s 80% investment policy. The Fund intends to use
the mark-to-market value of such derivatives for purposes of complying with the
Fund’s 80% investment policy.
The
Fund intends to invest primarily in the following countries (others may be added
as markets in other countries develop):
•Asia:
China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore,
South Korea, Sri Lanka, Taiwan, Thailand, and Vietnam.
•Latin
America: Argentina, Belize, Brazil, Chile, Colombia, Mexico, Panama, Peru, and
Venezuela.
•Eastern
Europe: Croatia, Czech Republic, Estonia, Hungary, Kazakhstan, Latvia,
Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey, and
Ukraine.
•Africa
and the Middle East: Bahrain, Botswana, Egypt, Israel, Jordan, Kenya, Kuwait,
Lebanon, Mauritius, Morocco, Nigeria, Oman, Qatar, Saudi Arabia, South Africa,
Tunisia, United Arab Emirates, and Zimbabwe.
The
Fund may invest up to 20% of its net assets in securities of companies that are
established or operating in countries that are considered to be outside of
emerging markets, which may include other less developed countries as well as
developed market countries. Such less developed countries share many similar
attributes with emerging markets countries, however, their markets are not yet
considered to be as developed as those in the emerging markets.
The
Fund may invest up to 20% of its net assets in fixed income
securities.
Pzena’s
Investment Process
Pzena
Investment Management identifies investment opportunities through a
research-driven, bottom-up process, adhering to a strict valuation discipline.
Pzena seeks to buy good businesses at low prices, focusing exclusively on
companies that are underperforming their historically demonstrated earnings
power. Pzena performs intensive fundamental research on these companies in an
effort to determine whether the problems that caused the earnings shortfall are
temporary or permanent. They typically consider companies for inclusion in the
portfolio when the following criteria are met: (1) the current valuation is low
compared to the company’s normalized earnings power; (2) the current earnings
are below historic norms; (3) problems are viewed as temporary; (4) management
has a viable strategy to generate earnings recovery; and (5) there is meaningful
downside protection in case the earnings recovery does not materialize. Pzena
believes a concentrated portfolio exclusively focused on companies with these
characteristics should generate meaningful excess returns for long-term
investors.
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Pzena
begins by ranking the universe using its proprietary “StockAnalyzer” screening
tool to forecast a naïve estimate of normalized earnings for each stock. At this
initial stage, normalized earnings are the five-year forward earnings one would
naively expect if all that was known was the company’s and industry’s earnings
histories. At the screening level, Pzena employs the use of country-specific
discount rates to take into consideration the differing levels of
country-specific risks and macroeconomic conditions embedded in individual stock
valuation. These discount rates quantify the market’s perception of risk in a
geography. When calculating the normalized earnings of a company domiciled in a
country with a particularly high discount rate (and thus, implied higher
macroeconomic risk), the stock needs to be that much cheaper to be considered
for purchase. The companies are ranked based on a ratio of current stock price
to estimated normalized earnings five-years forward, and Pzena focuses their
research on the most undervalued 20% of the universe. The portfolio managers
make an initial judgment as to whether the causes of the under-valuation are
likely temporary or permanent, and whether the research process is likely to
enable them to build a reasonable forecast of the company’s normalized earnings
power. The Director of Research then assigns stocks to research analysts to
complete an initial review of the company. Approximately 70% of names are
eliminated as a result of the initial review.
Research
analysts complete a full research project on those stocks that are still under
consideration after the initial review. The analysts conduct thorough
fundamental research, approaching each situation with the following question in
mind, “Would we buy the entire business at the current price?” Many of Pzena’s
analysts have experience working in industry, management consulting and private
equity, which has given them experience and training that is directly applicable
to the research approach. Once they have built division and/or regional models
and have become particularly knowledgeable about the company and its industry,
the analyst and one of the portfolio managers meet with company management. This
step is generally taken toward the end of the research process to ensure an
informed dialogue with management. In this process, Pzena seeks a meaningful
discussion with the CEO, CFO and heads of the major business units about their
business, the strategic options available to them over the next several years,
and their plans to restore the earnings power. Following the company visit,
Pzena meets with an external analyst who is bearish on the stock, with the goal
of understanding whether they have missed something structural, in which case
they will revisit their research. The most common insight received at this stage
is that while Pzena’s thesis may be correct, there is no near-term visibility to
earnings improvement. In such cases, they tend to be encouraged by the market’s
short-term orientation.
Pzena
uses all the information gathered through the research process to develop a
final, fully-researched estimate of normalized earnings. At this stage,
normalized earnings are the earnings one would expect the company to generate
five years forward. This estimate is placed into the screening model, replacing
the naïve, computer-generated estimate that was the output of the original
screen. If the company continues to screen as undervalued, it is considered
eligible for purchase. Pzena’s sell discipline is
guided
by the same ranking system that informs stock purchases. Pzena continuously
monitors every position’s valuation rank (based upon the company’s current stock
price relative to normalized earnings) within its investment universe. Pzena
systematically sells any stock once it reaches the midpoint of its investment
universe.
Wellington’s
Investment Process
Wellington’s
investment approach is active and driven by fundamental company research.
Country and sector analysis serve as an important backdrop to company research,
though country and sector allocations are primarily driven by stock selection.
The investment approach is style agnostic. Portfolios invest across the
value-growth spectrum and are driven solely by the identification of attractive
or emerging franchises trading at discounts to intrinsic value. Wellington’s
focus on investing in franchises results in a mild quality bias.
Wellington’s
Process - Purchasing Portfolio Securities. The
focus of Wellington’s research is on identifying undervalued franchises or
businesses that will be recognized as franchises in the future. Wellington
believes franchise businesses generate sustainably higher return on equity
(ROEs) than peers, leading to share price outperformance over time. Franchises
in Asia tend to be earlier in their development phase than in other global
markets, and as a result, growth potential is often
underappreciated.
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The
team focuses on identifying companies with:
•a
sustainable competitive advantage versus peers - this could result from the
quality and strength of the management, the nature of the business model
employed, barriers to entry in the industry, or other factors
•quality
of management track record and orientation towards minority
shareholders
•strong
corporate governance track record
•undervaluation
versus its regional or global peers and versus country-specific
parameters
Wellington’s
Process - Selling Portfolio Securities.
The
primary triggers for sell decisions in Asia ex Japan investment approach are as
follows:
•The
stock performs well and approaches/achieves the price target.
•A
“break” in the investment thesis, undermining the reason(s) the Fund owns a
stock. This may result from a change in management’s focus or vision, an adverse
change in the industry or market environment, or a loss of competitive
advantage, or substantial concerns regarding the environmental, social, and/or
governance practices of the company that result in a change in the team’s
assessment of the company’s franchise value or potential.
•Other
more attractive investment ideas are identified (i.e., a stock may be sold and
replaced with a company with greater upside potential).
Temporary
Defensive Position. In
order to respond to adverse market, economic, political, or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategy and invest without limit
in cash and prime quality cash equivalents such as prime commercial paper and
other money market instruments. A defensive position, taken at the wrong
time, may have an adverse impact on the Fund’s performance. The Fund may be
unable to achieve its investment objective during the employment of a temporary
defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal;
•Are
willing to accept risk of market value fluctuation in the short-term;
or
•Want
an investment that focuses only on particular sectors or
industries.
The
Fund may not be appropriate for you if you:
•Need
regular income or stability of principal;
•Are
pursuing a short-term investment goal or investing emergency reserves;
or
•Cannot
tolerate fluctuation in the value of your investments.
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Additional
Information about the Funds' Principal Investment
Strategies |
|
Brown
Advisory – Beutel Goodman Large-Cap Value Fund
Principal
Investment Strategies
Under
normal conditions, the Fund seeks to achieve its investment objective by
investing at least 80% of the value of its net assets (plus any borrowings for
investment purposes) in equity securities of large-cap companies. The
Fund considers large-cap companies to be those with market capitalizations
greater than $5 billion at the time of purchase. The Fund will provide
shareholders with 60 days’ prior written notice if it changes its
80% policy.
The
Fund seeks to invest in companies at discounts to their business value, which
the Fund considers to be the present value of sustainable free cash flow. To
identify these investment opportunities, the Fund employs a disciplined,
bottom-up investment process highlighted by rigorous, internally-generated
fundamental research. Accordingly, investments are made only when the Fund
believes there is a sufficient discount to business value to mitigate the loss
of capital in the event of adverse circumstances.
Equity
securities in which the Fund may invest include common and preferred stock,
convertible debt securities, American Depositary Receipts (“ADRs”), real estate
investment trusts (“REITs”), exchange traded funds (“ETFs”), and other types of
investment companies. The Fund may also invest in private placements
in these types of securities. The Fund may invest in ETFs and other
types of investment companies that have an investment objective similar to the
Fund’s or that otherwise are permitted investments with the Fund’s investment
policies described herein. ADRs are equity securities traded on U.S.
securities exchanges, which are generally issued by banks or trust companies to
evidence ownership of foreign equity securities. The Fund may invest
up to 20% of its net assets in foreign securities. The Fund is non-diversified,
which means that it may invest a significant portion of its assets in the
securities of a single issuer or small number of
issuers.
The
Fund may utilize options, futures contracts and options on futures. These
investments will typically be made for investment purposes consistent with the
Fund’s investment objective and may also be used to mitigate or hedge risks
within the portfolio or for the temporary investment of cash balances. By
investing in derivatives, the Fund attempts to achieve the economic equivalence
it would achieve if it were to invest directly in the underlying security.
Investments in derivatives may be counted towards the Fund’s 80% investment
policy if they have economic characteristics similar to the other investments
that are included in the Fund’s 80% investment policy. The Fund intends to use
the mark-to-market value of such derivatives for purposes of complying with the
Fund’s 80% investment policy.
Beutel,
Goodman & Company Ltd.’s
(the "Sub-Adviser") Investment Process
Research
is the cornerstone of the Sub-Adviser’s value investment process and fundamental
research is the driver of the approach. The investment thesis is based on the
belief that companies that generate free cash flow are potentially capable of
producing increased shareholder benefits.
The
Sub-Adviser believes that stock selection is the primary catalyst for superior
portfolio return. The selection process is sourced from a universe of potential
candidates whom the Sub-Adviser believes have consistently demonstrated a
commitment to creating shareholder value without undue financial leverage. The
price at which the Fund would invest in a security is determined by analyzing
relative valuation measures such as a company’s price/earnings, price/cash flow,
and price/book value ratios relative to its own history, the overall market, and
to its sustainable earnings growth rate.
The
Sub-Adviser’s Process — Selling Portfolio Securities.
The Sub-Adviser regularly monitors the companies in the Fund’s portfolio to
determine if there have been any fundamental changes in the companies. The
Sub-Adviser may sell a security or reduce its position if it believes:
•The
security subsequently fails to meet initial investment criteria;
•A
more attractively priced stock is found; or
•The
security becomes overvalued relative to the long-term expectation.
Temporary
Defensive Position.
In order to respond to adverse market, economic, political or other conditions,
the Fund may assume a temporary defensive position that is inconsistent with its
investment objective and principal investment strategies and invest, without
limitation, in cash or prime quality cash equivalents (including commercial
paper, certificates of deposit, banker’s acceptances and time deposits). A
defensive position, taken at the wrong time, may have an adverse impact on the
Fund’s
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Additional
Information about the Funds' Principal Investment
Strategies |
|
performance.
The Fund may be unable to achieve its investment objective during the employment
of a temporary defensive measure.
Who
May Want to Invest in the Fund
The
Fund may be appropriate for you if you:
•Are
willing to tolerate significant changes in the value of your
investment;
•Are
pursuing a long-term investment goal; or
•Are
willing to accept risk of market value fluctuation in the
short-term.
The
Fund may not be appropriate for you if you:
•Want
an investment that pursues market trends or focuses only on particular sectors
or industries;
•Need
regular income or stability of principal; or
•Are
pursuing a short-term investment goal or investing emergency
reserves.
An
investment in a Fund is subject to one or more of the principal risks identified
in the following table. The identified principal risks are discussed in more
detail in the disclosure that immediately follows the table.
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| Brown
Advisory Growth Equity Fund |
Brown
Advisory Flexible Equity Fund |
Brown
Advisory Equity Income Fund |
Brown
Advisory Sustainable Growth Fund |
Brown
Advisory Mid-Cap Growth Fund |
ADRs
and GDRs Risk |
• |
• |
• |
• |
• |
Convertible
Securities Risk |
• |
• |
• |
| • |
Credit
Risk |
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| |
Currency
and Exchange Rate Risk |
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| |
Debt/Fixed
Income Securities Risk |
| • |
• |
| |
Derivatives
Risk |
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| |
Environmental,
Social and Governance Policy Risk |
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| • |
|
Equity
and General Market Risk |
• |
• |
• |
• |
• |
ETF
Risk |
• |
• |
• |
| • |
European
Securities Risk |
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| |
Foreign
Securities/Emerging Markets Risk |
• |
• |
| • |
• |
Geographic
Focus Risk |
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| |
Growth
Company Risk |
• |
|
| • |
• |
Interest
Rate Risk |
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| |
Investments
in Other Investment Companies Risk |
| • |
|
| • |
Large
Capitalization Company Risk |
• |
• |
• |
• |
|
Large
Investor Risk |
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| |
Leverage
Risk |
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| |
Liquidity
Risk |
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| • |
Management
Risk |
• |
• |
• |
• |
• |
Market
Risk |
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| |
Master
Limited Partnership Risk |
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| • |
| |
Maturity
Risk |
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| |
Medium
Capitalization Company Risk |
• |
• |
• |
| • |
Mortgage-
and Asset-Backed Securities Risk |
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| |
Municipal
Securities Risk |
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| |
New
Fund Risk |
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Non-Diversification
Risk |
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Non-Investment
Grade Securities Risk |
| • |
• |
| |
Portfolio
Turnover Risk |
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| |
Prepayment/Extension
Risk |
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| |
Private
Placement Risk |
• |
• |
• |
| • |
Rating
Agencies Risk |
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| |
REIT
and Real Estate Risk |
• |
• |
• |
• |
• |
Smaller
and Medium Capitalization Company Risk |
• |
• |
• |
• |
|
Sustainability
Policy Risk |
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| • |
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Tax
Risk |
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To
Be Announced (“TBA”) Transaction Risk |
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U.S.
Government Securities Risk |
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| |
Valuation
Risk |
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| |
Value
Company Risk |
| • |
• |
| |
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| Brown
Advisory Small-Cap Growth Fund |
Brown
Advisory Small-Cap Fundamental Value Fund |
Brown
Advisory Sustainable Small-Cap Core Fund |
Brown
Advisory Global Leaders Fund |
Brown
Advisory Sustainable InternationalLeaders Fund |
ADRs
and GDRs Risk |
• |
• |
• |
• |
• |
Convertible
Securities Risk |
• |
• |
• |
• |
• |
Credit
Risk |
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| |
Currency
and Exchange Rate Risk |
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| • |
• |
Debt/Fixed
Income Securities Risk |
| • |
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| |
Derivatives
Risk |
| • |
| • |
• |
Environmental,
Social and Governance Policy Risk |
|
| • |
• |
• |
Equity
and General Market Risk |
• |
• |
• |
• |
• |
ETF
Risk |
• |
• |
• |
• |
• |
European
Securities Risk |
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| |
Foreign
Securities/Emerging Markets Risk |
• |
• |
• |
• |
• |
Geographic
Focus Risk |
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| |
Growth
Company Risk |
• |
|
| • |
• |
Interest
Rate Risk |
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| |
Investments
in Other Investment Companies Risk |
| • |
• |
• |
• |
Large
Capitalization Company Risk |
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| • |
• |
Large
Investor Risk |
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| |
Leverage
Risk |
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| |
Liquidity
Risk |
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| • |
• |
Management
Risk |
• |
• |
• |
• |
• |
Market
Risk |
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| |
Master
Limited Partnership Risk |
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| |
Maturity
Risk |
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| |
Medium
Capitalization Company Risk |
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| • |
• |
Mortgage-
and Asset-Backed Securities Risk |
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| |
Municipal
Securities Risk |
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| |
New
Fund Risk |
|
| • |
| • |
Non-Diversification
Risk |
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| |
Non-Investment
Grade Securities Risk |
| • |
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| |
Portfolio
Turnover Risk |
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| • |
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Prepayment/Extension
Risk |
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| |
Private
Placement Risk |
• |
• |
• |
• |
• |
Rating
Agencies Risk |
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| |
REIT
and Real Estate Risk |
• |
• |
• |
• |
• |
Smaller
and Medium Capitalization Company Risk |
• |
• |
• |
• |
|
Sustainability
Policy Risk |
|
| • |
• |
• |
Tax
Risk |
|
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| |
To
Be Announced (“TBA”) Transactions Risk |
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| |
U.S.
Government Securities Risk |
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| • |
• |
Valuation
Risk |
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| • |
• |
Value
Company Risk |
| • |
| • |
• |
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| Brown
Advisory Intermediate Income Fund |
Brown
Advisory Total Return Fund |
Brown
Advisory Sustainable Bond Fund |
Brown
Advisory Maryland Bond Fund |
Brown
Advisory Tax-Exempt Bond Fund |
ADRs
and GDRs Risk |
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| |
Convertible
Securities Risk |
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| |
Credit
Risk |
• |
• |
• |
• |
• |
Currency
and Exchange Rate Risk |
| • |
• |
| |
Debt/Fixed
Income Securities Risk |
• |
• |
• |
• |
• |
Derivatives
Risk |
• |
• |
• |
• |
• |
Environmental,
Social and Governance Policy Risk |
|
| • |
| |
Equity
and General Market Risk |
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| |
ETF
Risk |
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| |
European
Securities Risk |
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| |
Foreign
Securities/Emerging Markets Risk |
| • |
• |
| |
Geographic
Focus Risk |
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| |
Growth
Company Risk |
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| |
Interest
Rate Risk |
• |
• |
• |
• |
• |
Investments
in Other Investment Companies Risk |
• |
| • |
| • |
Large
Capitalization Company Risk |
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| |
Large
Investor Risk |
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| |
Leverage
Risk |
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| |
Liquidity
Risk |
• |
• |
• |
• |
• |
Management
Risk |
• |
• |
• |
• |
• |
Market
Risk |
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| |
Master
Limited Partnership Risk |
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| |
Maturity
Risk |
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| • |
Medium
Capitalization Company Risk |
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| |
Mortgage-
and Asset-Backed Securities Risk |
• |
• |
• |
| |
Municipal
Securities Risk |
• |
• |
• |
• |
• |
New
Fund Risk |
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| |
Non-Diversification
Risk |
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|
| • |
• |
Non-Investment
Grade Securities Risk |
| • |
• |
| |
Portfolio
Turnover Risk |
| • |
• |
| • |
Prepayment/Extension
Risk |
• |
• |
• |
| |
Private
Placement Risk |
• |
• |
• |
• |
• |
Rating
Agencies Risk |
• |
• |
• |
| |
REIT
and Real Estate Risk |
|
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| |
Smaller
and Medium Capitalization Company Risk |
|
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| |
Sustainability
Policy Risk |
|
| • |
| |
Tax
Risk |
|
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| • |
• |
To
Be Announced (“TBA”) Transactions Risk |
| • |
• |
| |
U.S.
Government Securities Risk |
• |
• |
• |
| |
Valuation
Risk |
| • |
• |
• |
• |
Value
Company Risk |
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| |
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| Brown
Advisory Tax-Exempt SustainableBond Fund |
Brown
Advisory Mortgage Securities Fund |
Brown
Advisory – WMC Strategic European Equity Fund |
Brown
Advisory Emerging Markets Select Fund |
Brown
Advisory – Beutel Goodman Large-Cap Value Fund |
ADRs
and GDRs Risk |
|
| • |
• |
• |
Convertible
Securities Risk |
|
| • |
• |
• |
Credit
Risk |
• |
• |
• |
• |
|
Currency
and Exchange Rate Risk |
|
| • |
• |
|
Debt/Fixed
Income Securities Risk |
• |
• |
|
| |
Derivatives
Risk |
• |
• |
• |
• |
• |
Environmental,
Social and Governance Policy Risk |
• |
|
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| |
Equity
and General Market Risk |
|
| • |
• |
• |
ETF
Risk |
|
| • |
• |
• |
European
Securities Risk |
|
| • |
| |
Foreign
Securities/Emerging Markets Risk |
|
| • |
• |
• |
Geographic
Focus Risk |
|
|
| • |
|
Growth
Company Risk |
|
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|
| |
Interest
Rate Risk |
• |
• |
|
| |
Investments
in Other Investment Companies Risk |
• |
|
| • |
• |
Large
Capitalization Company Risk |
|
| • |
• |
• |
Large
Investor Risk |
|
| • |
| • |
Leverage
Risk |
|
|
|
| |
Liquidity
Risk |
• |
• |
• |
• |
|
Management
Risk |
• |
• |
• |
• |
• |
Market
Risk |
| • |
|
| |
Master
Limited Partnership Risk |
|
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| |
Maturity
Risk |
• |
|
|
| |
Medium
Capitalization Company Risk |
|
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|
| |
Mortgage-
and Asset-Backed Securities Risk |
| • |
|
| |
Municipal
Securities Risk |
• |
• |
|
| |
New
Fund Risk |
|
|
|
| |
Non-Diversification
Risk |
• |
|
|
| • |
Non-Investment
Grade Securities Risk |
• |
• |
|
| |
Portfolio
Turnover Risk |
| • |
|
| |
Prepayment/Extension
Risk |
| • |
|
| |
Private
Placement Risk |
• |
• |
| • |
• |
Rating
Agencies Risk |
• |
• |
|
| |
REIT
and Real Estate Risk |
|
| • |
• |
• |
Smaller
and Medium Capitalization Company Risk |
|
| • |
• |
|
Sustainability
Policy Risk |
• |
|
|
| |
Tax
Risk |
• |
|
|
| |
To
Be Announced (“TBA”) Transactions Risk |
| • |
|
| |
U.S.
Government Securities Risk |
| • |
|
| |
Valuation
Risk |
• |
• |
• |
• |
|
Value
Company Risk |
|
|
|
| • |
As
with all mutual funds, there is the risk that you could lose all or a portion of
your investment in a Fund. An investment in a Fund is not a deposit of a bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. There is no assurance that a Fund will achieve its
investment objective, and an investment in a Fund is not by itself a complete or
balanced investment program. The following provides additional information
regarding the principal risks that could affect the value of your
investment:
American
Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”)
Risk
ADRs
and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently
and without the cooperation of the issuer of the underlying securities,
available information concerning the foreign issuer may not be as current as for
sponsored ADRs and voting rights with respect to the deposited securities are
not passed through. GDRs can involve currency risk, since unlike ADRs, they may
not be U.S. dollar-denominated.
Convertible
Securities Risk
A
convertible security is a bond, debenture, note, preferred stock, right, warrant
or other security that may be converted into or exchanged for a prescribed
amount of common stock or other security of the same or a different issuer or
cash within a particular period of time at a specified price or
formula. A convertible security generally entitles the holder to
receive interest paid or accrued on debt securities or the dividend paid on
preferred stock until the convertible security matures or is redeemed, converted
or exchanged. Before conversion, convertible securities generally
have characteristics similar to both debt and equity
securities. Convertible securities ordinarily provide a stream of
income with generally higher yields than those of common stock of the same or
similar issuers. Convertible securities generally rank senior to
common stock in a corporation’s capital structure but are usually subordinated
to comparable nonconvertible proportionate securities.
Convertible
securities generally do not participate directly in any dividend increases or
decreases of the underlying securities although the market prices of convertible
securities may be affected by any dividend changes or other changes in the
underlying securities. A Fund’s investments in convertible securities
may subject the Fund to the risks that prevailing interest rates, issuer credit
quality and any call provisions may affect the value of the Fund’s convertible
securities. Rights and warrants entitle the holder to buy equity
securities at a specific price for a specific period of time. Rights
typically have a substantially shorter term than do warrants. Rights
and warrants may be considered more speculative and less liquid than certain
other types of investments in that they do not entitle a holder to dividends or
voting rights with respect to the underlying securities nor do they represent
any rights in the assets of the issuing company. Rights and warrants
may lack a secondary market.
Credit
Risk
In
connection with a Fund’s investments in fixed income securities, the value of
your investment in the Fund may change in response to the credit ratings of that
Fund’s portfolio securities. The degree of risk for a particular
security may be reflected in its credit rating. Generally, investment
risk and price volatility increase as a security’s credit rating
declines. The financial condition of an issuer of a fixed income
security held by a Fund may cause it to default or become unable to pay interest
or principal due on the security. A Fund cannot collect interest and
principal payments on a fixed income security if the issuer
defaults. Investments in fixed income securities that are issued by
U.S. Government sponsored entities such as the Federal National Mortgage
Association, the Federal Home Loan Mortgage Association, and the Federal Home
Loan Banks involve credit risk as they are not backed by the full faith and
credit of the U.S. Government.
Currency
and Exchange Rate Risk
A
Fund uses various strategies to attempt to minimize the impact of changes in the
value of a currency against the U.S. dollar. These strategies may not always be
successful. In order to minimize transaction costs, or for other reasons, the
Fund’s exposure to a foreign currency may not be fully hedged at all times.
Currency exchange rates can be very volatile and can change quickly and
unpredictably for a number of reasons, including changes in interest rates and
the imposition of currency controls or other political, economic and tax
developments in the U.S. or abroad. Therefore, the value of an investment in the
Fund may also go up or down quickly and unpredictably in response to these
events and investors may lose money as a result.
Debt/Fixed
Income Securities Risk
The
value of your investment in a Fund may change in response to changes in interest
rates. An increase in interest rates typically causes a fall in the value of the
debt securities in which the Fund invests. Over the past several years, the
Federal Reserve has maintained the level of interest rates at or near historic
lows, however, more recently, interest rates have begun to increase as a result
of action that has been taken by the Federal Reserve which has raised, and may
continue to raise, interest rates, which may negatively impact the Fund’s
performance or otherwise adversely impact the Fund. Moreover, rising interest
rates or lack of
market
participants may lead to decreased liquidity in the bond and loan markets,
making it more difficult for a Fund to sell its holdings at a time when the
Fund’s manager might wish to sell. The longer the duration of a debt security,
the more its value typically falls in response to an increase in interest rates.
The value of your investment in a Fund may change in response to the credit
ratings of the Fund’s portfolio of debt securities. The degree of risk for a
particular security may be reflected in its credit rating. Generally, investment
risk and price volatility increase as a security’s credit rating declines. The
financial condition of an issuer of a debt security held by a Fund may cause it
to default or become unable to pay interest or principal due on the security. A
Fund cannot collect interest and principal payments on a debt security if the
issuer defaults. Prepayment and extension risks may occur when interest rates
decline and issuers of debt securities experience acceleration in prepayments.
The acceleration can shorten the maturity of the debt security and force the
Fund to invest in securities with lower interest rates, reducing the Fund’s
return. Issuers may decrease prepayments of principal when interest rates
increase, extending the maturity of the debt security and causing the value of
the security to decline. Distressed debt securities (“junk bonds”) involve
greater risk of default or downgrade and are more volatile than investment grade
securities. Distressed debt securities may also be less liquid than higher
quality debt securities.
Derivatives
Risk
Derivatives
are financial instruments that have a value which depends upon, or is derived
from, a reference asset, such as one or more underlying securities, pools of
securities, options, futures, interest rates, indexes or currencies. Derivative
instruments may also include certain structured securities. Derivatives may
result in investment exposures that are greater than their cost would suggest;
in other words, a small investment in a derivative may have a large impact on a
Fund’s performance. The use of derivatives is a highly specialized activity that
involves strategies and risks that are different from those involving ordinary
portfolio securities transactions, and generally depends on the manager’s
ability to predict market movements. Moreover, even if the Adviser or a
Sub-Adviser is correct in its forecast, there is still a risk that a derivative
position may not perform as initially anticipated.
A
Fund may use derivatives in various ways. A Fund may use derivatives as a
substitute for taking a position in the reference asset or to gain exposure to
certain asset classes; under such circumstances, the derivatives may have
economic characteristics similar to those of the reference asset, and the Fund’s
investment in the derivatives may be applied toward meeting a requirement to
invest a certain percentage of its net assets in instruments with such
characteristics. A Fund may use derivatives to hedge (or reduce) its exposure to
a portfolio asset or risk. A Fund may use derivatives for leverage. A Fund may
also use derivatives to manage cash.
Derivatives
are subject to a number of risks, certain of which are described elsewhere in
this section, such as leverage risk, liquidity risk, interest rate risk, credit
risk and general market risks.
Additional
risks associated with a Fund’s use of derivatives may include the risk of
improper valuation and the risk that future regulation of the derivatives
markets may make the use of derivatives more costly, may limit the availability
or reduce the liquidity of derivatives, or may otherwise adversely affect the
value or performance of derivatives. Any such adverse future developments could
impair the effectiveness or raise the costs of a Fund’s derivatives
transactions, impede the employment of the Fund’s derivatives strategies or
adversely affect the Fund’s performance. Also, suitable derivative transactions
may not be available in all circumstances and there can be no assurance that a
Fund will engage in these transactions to reduce exposure to other risks when
that would be beneficial or that, if used, such strategies will be successful.
Over-the-counter (“OTC”) derivatives are also subject to the risk that a
counterparty to the transaction will not fulfill its contractual obligations to
the other party, as many of the protections afforded to centrally-cleared
derivative transactions might not be available for OTC derivatives.
Central-clearing of derivatives transactions still carries with it the risk that
the clearinghouse will fail or not perform under the contract. A Fund’s use of
derivatives may entail risks greater than, or possibly different from, such
risks and other Principal Risks to which a Fund is exposed, as described below.
Certain of the different risks to which a Fund might be exposed due to its use
of derivatives include the following:
Hedging
Risk
is the risk that derivative instruments used to hedge against an opposite
position may offset losses, but they also may offset gains.
Correlation
Risk
is the risk that derivative instruments may be mispriced or improperly valued
and that changes in the value of the derivatives may not correlate perfectly
with the underlying asset or security.
Volatility
Risk
is the risk that, because a Fund may use some derivatives that involve economic
leverage, this economic leverage will increase the volatility of the derivative
instruments as they may increase or decrease in value more quickly than the
underlying currency, security, interest rate or other economic
variable.
Credit
Derivatives Risk is
the risk if the Adviser or Sub-Adviser is incorrect in its forecast of default
risks and market spreads. Swap and other structured securities counterparty
credit quality or other applicable factors associated with the use of credit
default swaps may expose a Fund to credit risk, and a Fund’s investment
performance may diminish compared with what it would have been if these
techniques were not used.
Moreover,
even if the Adviser or Sub-Adviser is correct in its forecast, there is a risk
that a credit derivative position may correlate imperfectly with the price of
the asset or liability being hedged.
A
Fund’s risk of loss in a credit derivative transaction varies with the form of
the transaction.
Operational
Risk
is the risk that operational issues, including documentation issues, settlement
issues, systems failures, inadequate controls, and human error will arise from
trading derivatives.
Legal
Risk
is the risk that the documentation for trading derivatives will be insufficient,
that a derivatives counterparty will not have insufficient capacity or authority
to enter into derivatives transactions, or that issues of legality or
enforceability of a derivatives contract will arise.
Service
Provider Risk
is the risk that the services third-parties that assist with the management of
the Funds’ derivatives risks will not be adequate or the information they
provide to assist with risk management will not be accurate or may not be
available at times.
Environmental,
Social and Governance Policy Risk
The
risk that because a Fund’s ESG criteria exclude securities of certain issuers
for nonfinancial reasons, the Fund may forgo some market opportunities available
to funds that do not use these criteria. The application of ESG principles and
the perceptions of the commitment of a given issuer to ESG principles vary among
vendors, investors, analysts and other market observers. Additionally, it may be
difficult in certain instances for the Adviser to correctly evaluate an issuer’s
commitment to positive ESG practices, and a failure to do so may result in
investment in issuers with practices that are not consistent with the Fund’s
aspirations.
Equity
and General Market Risk
A
Fund’s investments in equity securities may subject the Fund to volatility and
the following risks:
•prices
of stock may fall over short or extended periods of time;
•cyclical
movements of the equity market may cause the value of the Fund’s securities to
fluctuate drastically from day to day; and
•individual
companies may report poor results or be negatively affected by industry and or
economic trends and developments.
In
general, stock values are affected by activities specific to the company as well
as general market, economic and political conditions. The net asset
value (“NAV”) of a Fund and investment return will fluctuate based upon changes
in the value of its portfolio securities. The market value of
securities in which a Fund invests is based upon the market’s perception of
value and is not necessarily an objective measure of the securities’
value. Other general market risks include:
•the
market may not recognize what the Adviser or Sub-Adviser believes to be the true
value or growth potential of the stocks held by a Fund;
•the
earnings of the companies in which a Fund invests will not continue to grow at
expected rates, thus causing the price of the underlying stocks to
decline;
•the
smaller a company’s market capitalization, the greater the potential for price
fluctuations and volatility of its stock due to lower trading volume for the
stock, less publicly available information about the company and less liquidity
in the market for the stock. The potential for price fluctuations in
the stock of a smaller capitalization company may be greater than that of a
large capitalization company;
•the
Adviser’s or Sub-Adviser’s judgment as to the growth potential or value of a
stock may prove to be wrong; and
•a
decline in investor demand for the stocks held by a Fund also may adversely
affect the value of the securities.
Markets
may, in response to economic or market developments, governmental actions or
intervention, natural disasters, epidemics, pandemics, or other external
factors, experience periods of high volatility and reduced liquidity. During
those periods, the Fund may experience high levels of shareholder redemptions,
and may have to sell securities at times when the Fund would otherwise not do
so, potentially at unfavorable prices. Certain securities, particularly fixed
income securities, may be difficult to value during such periods.
ETF
Risk
Investments
in ETFs (which may, in turn, invest in equities, bonds, and other financial
vehicles) may involve duplication of certain fees and expenses. By
investing in an ETF, a Fund becomes a shareholder of that ETF. As a
result, Fund shareholders indirectly bear their proportionate share of the ETF’s
fees and expenses which are paid by the Fund as a shareholder of the
ETF. These fees and expenses are in addition to the fees and expenses
that Fund shareholders directly bear in connection with the Fund’s own
operations. If the ETF fails to achieve its investment objective, the
Fund’s investment in the ETF may adversely affect the Fund’s
performance. Investing in an ETF subjects the Fund to these risks
affecting the ETF, including the possibility that the value of the underlying
securities held by the ETF could decrease. In addition, because ETFs are listed
on national stock exchanges and are traded like stocks listed on an exchange,
(1) the Fund may acquire ETF shares at a discount or premium to their NAV
and (2) ETFs are subject to brokerage and other trading costs, which could
result in greater expenses to the Fund. Finally, because the value of
ETF shares depends on the demand in the market, the Adviser or Sub-Adviser may
not be able to liquidate a Fund’s holdings at the most optimal time, adversely
affecting the Fund’s performance.
European
Securities Risk
Because
a significant portion of the assets of the WMC Strategic European Equity Fund
are invested in European securities, the WMC Strategic European Equity Fund’s
performance is expected to be impacted by the political, social and economic
environment within Europe. Europe includes a range of countries. Generally,
unemployment in Europe has historically been higher than in the United States,
and the region is currently facing economic uncertainty and slow economic growth
or recession due to concerns about economic downturns in, or rising government
debt levels of, several European countries. Such adverse events can negatively
affect the exchange rate of the euro which, in turn, affects not only countries
that use the euro but countries that do not use it as well. Government responses
to the financial problems within European countries, which could include
austerity measures, may result in greater economic uncertainty and thus limit
future growth and economic recovery. In addition, most of the developed
countries in Western Europe are members of the European Union (“EU”), and in
many cases, members of the European Economic and Monetary Union (“EMU”). These
European countries can be significantly affected by restrictions on inflation
rates, interest rates, deficits, debt levels and fiscal and monetary controls
with which EU members and candidates for EMU membership are required to comply.
In addition, the private and public sectors’ debt problems of a single EU
country can pose economic risks to the rest of the EU members.
The
United Kingdom (“UK”) withdrew from the EU on January 31, 2020 following a June
2016 referendum referred to as “Brexit.” The
UK and EU reached an agreement, effective January 1, 2021, on the terms of their
future trading relationship, which principally relates to the trading of goods.
Further discussions are to be held between the UK and the EU in relation to
matters not covered by the trade agreement, such as financial services. Brexit
may have significant political and financial consequences for the Eurozone
markets, including greater volatility in the global stock markets and
illiquidity, fluctuations in currency and exchange rates, and an increased
likelihood of a recession in the UK. At this time, the impact of Brexit cannot
be predicted; however, market disruption in the EU and globally may have a
negative effect on the value of a Fund’s investments. Additionally, the risks
related to Brexit could be more pronounced if one or more additional EU member
states seek to leave the EU.
On
February 24, 2022, Russia commenced a military attack on Ukraine. The outbreak
of hostilities between the two countries could result in more widespread
conflict and could have a severe adverse effect on the region and the markets.
In addition, sanctions imposed on Russia, Russian companies and financial
institutions, Russian individuals, and others by the United States and other
countries, and any sanctions imposed in the future could have a significant
adverse impact on the Russian economy and related markets. The price and
liquidity of investments may fluctuate widely as a result of the conflict and
related events. How long such conflict and related events will last and whether
it will escalate further cannot be predicted.
Foreign
Securities/Emerging Markets Risk
In
connection with a Fund’s investments in foreign securities and ADRs/GDRs, an
investment in that Fund may have the following additional risks:
•foreign
securities may be subject to greater fluctuations in price than securities of
U.S. companies because foreign markets may be smaller and less liquid than
U.S. markets;
•foreign
markets, including markets that have historically been considered stable, may
experience increased risk due to war, hyperinflation, currency devaluations,
changes in foreign tax laws, exchange controls, investment regulations and
policies on nationalization and expropriation as well as political instability
which may affect the operations of foreign companies and the value of their
securities;
•fluctuations
in currency exchange rates and currency transfer restitution may adversely
affect the value of the Fund’s investments in foreign securities, which are
denominated or quoted in currencies other than the
U.S. dollar;
•foreign
securities and their issuers are not subject to the same degree of regulation as
U.S. issuers regarding information disclosure, insider trading and market
manipulation. There may be less publicly available information on
foreign companies and foreign companies may not be subject to uniform
accounting, auditing, and financial standards as are
U.S. companies;
•foreign
securities registration, custody and settlements may be subject to delays or
other operational and administrative problems;
•certain
foreign brokerage commissions and custody fees may be higher than those in the
United States;
•dividends
payable on the foreign securities contained in the Fund’s portfolio may be
subject to foreign withholding taxes, thus reducing the income available for
distribution to a Fund’s shareholders;
•economic
sanctions could, among other things, effectively restrict or eliminate a Fund's
ability to purchase or sell securities or groups of securities for a substantial
period of time, and may make the Fund's investments in such securities harder to
value; and
•prices
for stock or ADRs/GDRs, may fall over short or extended periods of
time.
If
a Fund invests in emerging markets, an investment in that Fund may have the
following additional risks:
•information
about the companies in emerging markets is not always readily
available;
•stocks
of companies traded in emerging markets may be less liquid and the prices of
these stocks may be more volatile than the prices of the stocks in more
established markets;
•greater
political and economic uncertainties exist in emerging markets than in developed
foreign markets;
•the
securities markets and legal systems in emerging markets may not be well
developed and may not provide the protections and advantages of the markets and
systems available in more developed countries;
•companies
in emerging market countries may not be subject to accounting, auditing,
financial reporting and recordkeeping requirements that are as robust as those
in more developed countries, and therefore, material information about a company
may be unavailable or unreliable, and U.S. regulators may be unable to enforce a
company’s regulatory obligations;
•very
high inflation rates may exist in emerging markets and could negatively impact a
country’s economy and securities markets;
•emerging
markets may impose restrictions on the Fund’s ability to repatriate investment
income or capital and thus, may adversely affect the operations of the
Fund;
•certain
emerging markets impose constraints on currency exchange and some currencies in
emerging markets may have been devalued significantly against the
U.S. dollar;
•governments
of some emerging markets exercise substantial influence over the private sector
and may own or control many companies. As such, governmental actions
could have a significant effect on economic conditions in emerging markets,
which, in turn, could affect the value of the Fund’s investments;
and
•emerging
markets may be subject to less government supervision and regulation of business
and industry practices, stock exchanges, brokers and listed
companies.
ADR
and GDR investments may subject a Fund to the same risks as direct investments
in foreign companies.
For
these and other reasons, the prices of securities in emerging markets can
fluctuate more significantly than the prices of securities of companies in
developed countries. The less developed the country, the greater
affect these risks may have on your investment in a Fund, and as a result, an
investment in that Fund may exhibit a higher degree of volatility than either
the general domestic securities market or the securities markets of developed
foreign countries. Investors should be able to tolerate sudden, sometimes
substantial, fluctuations in the value of their investments.
Geographic
Focus Risk
Because
the Emerging Markets Select Fund invests primarily in equity securities of
issuers in emerging markets, the Fund’s investments may have greater exposure to
the limited number of countries in which it invests. To the extent that the Fund
focuses its investments in a particular geographic region or country, the Fund
may be subject to increased currency, political, social, environmental,
regulatory and other risks not typically associated with investing in a larger
number of regions or countries. In addition, certain emerging markets economies
may themselves be focused in particular industries or more vulnerable to
political changes than the U.S. economy, which may have a direct impact on the
Fund’s investments. As a result, the Fund may be subject to greater price
volatility and risk of loss than a fund holding more geographically diverse
investments.
The
Fund may, from time to time, focus on specific geographic regions within the
emerging markets, including countries in Asia, such as China, Hong Kong and
Taiwan, thus providing exposure to the risks associated with investment in Asian
markets. Parts of the Asian region may be subject to a greater degree of
economic, political and social instability than is the case in the United
States. Investments in countries in the Asian region will be impacted by the
market conditions, legislative or regulatory changes, competition, or political,
economic and other developments in Asia.
Investments
in China may subject the Fund to certain additional risks, including exposure to
currency fluctuations, less liquidity, expropriation, confiscatory taxation,
nationalization, exchange control regulations (including currency blockage),
trading halts, imposition of tariffs, limitations on repatriation and differing
legal standards.
Growth
Company Risk
An
investment in growth stocks may be susceptible to rapid price swings, especially
during periods of economic uncertainty. Growth stocks typically have
little or no dividend income to cushion the effect of adverse market conditions
and may be particularly volatile in the event of earnings disappointments or
other financial difficulties experienced by the issuer.
Interest
Rate Risk
In
connection with a Fund’s investments in fixed income securities, the value of
your investment in that Fund may change in response to changes in interest
rates. An increase in interest rates typically causes a fall in the value of the
securities in which a Fund invests. The longer the duration of a fixed income
security, the more its value typically falls in response to an increase in
interest rates. Over the past several years, the Federal Reserve has maintained
the level of interest rates at or near historic lows, however, more recently,
interest rates have begun to increase as a result of action that has been taken
by the Federal Reserve which has raised, and may continue to raise, interest
rates, which may negatively impact the Fund’s performance or otherwise adversely
impact the Fund.
Investments
in Other Investment Companies Risk
Investments
in other investment companies, including money market funds, may involve
duplication of certain fees and expenses. By investing in other investment
companies, a Fund becomes a shareholder of that company. As a result, Fund
shareholders indirectly bear their proportionate share of the other investment
company’s fees and expenses which are paid by the Fund as a shareholder of the
other investment company. These fees and expenses are in addition to the fees
and expenses that Fund shareholders directly bear in connection with the Fund’s
own operations. If the other investment company fails to achieve its investment
objective, the Fund’s investment in the other investment company may adversely
affect the Fund’s performance.
Large
Capitalization Company Risk
Larger,
more established companies may be unable to respond quickly to new competitive
challenges such as changes in consumer tastes or innovative smaller
competitors. Also, large capitalization companies are sometimes unable to
attain the high growth rates of successful, smaller companies, especially during
extended periods of economic expansion.
Large
Investor Risk
Ownership
of shares of a Fund may be concentrated in one or more large investors. These
investors may redeem shares in substantial quantities or on a frequent basis,
which may negatively impact a Fund’s performance, may increase realized capital
gains, may accelerate the realization of taxable income to other shareholders
and may potentially limit the use of available capital loss carryforwards or
certain other losses to offset any future realized capital gains. Large investor
redemption activity also may increase a Fund’s brokerage and other
expenses.
Leverage
Risk
Borrowing
and the use of derivatives may result in leverage and may make a Fund more
volatile. The use of leverage may cause a Fund to liquidate portfolio positions
to satisfy its obligations when it may not be advantageous to do so. The use of
leverage by a Fund can substantially increase the adverse impact to which a
Fund’s investment portfolio may be subject.
Liquidity
Risk
Certain
securities held by a Fund may be difficult (or impossible) to sell at the time
and at the price the Adviser or Sub-Adviser would like. As a result,
a Fund may have to hold these securities longer than it would like and may
forego other investment opportunities. There is the possibility that
a Fund may lose money or be prevented from realizing capital gains if it cannot
sell a security at a particular time and price.
Management
Risk
Each
Fund is actively managed and its performance may reflect the Adviser’s or
Sub-Adviser’s ability to make decisions which are suited to achieving a Fund’s
investment objectives. Due to its active management, a Fund could
under perform other mutual funds with similar investment
objectives.
Market
Risk
The
portfolio securities held by a Fund are susceptible to general market
fluctuations and to volatile increases and decreases in value. The securities
markets may experience declines and the portfolio holdings in a Fund’s portfolio
may not increase their earnings at the rate anticipated. A Fund’s NAV and
investment return will fluctuate based upon changes in the value of its
portfolio securities.
Periods
of unusually high financial market volatility and restrictive credit conditions,
at times limited to a particular sector or geographic area, have occurred in the
past and may be expected to recur in the future. Some countries, including the
United States, have adopted or have signaled protectionist trade measures,
relaxation of the financial industry regulations that followed the financial
crisis, and/or reductions to corporate taxes. The scope of these policy changes
is still developing, but the equity and debt markets may react strongly to
expectations of change, which could increase volatility, particularly if a
resulting policy runs counter to the market’s expectations. The outcome of such
changes cannot be foreseen at the present time. In addition, geopolitical and
other risks, including environmental and public health risks, may add to
instability in the world economy and markets generally. As a result of
increasingly interconnected global economies and financial markets, the value
and liquidity of a Fund’s investments may be negatively affected by events
impacting a country or region, regardless of whether the Fund invests in issuers
located in or with significant exposure to such country or region.
An
outbreak of respiratory disease caused by a novel coronavirus was first detected
in China in December 2019 and has spread internationally. The outbreak has
resulted in closing borders and quarantines, enhanced health screenings,
cancellations, disrupted supply chains and customer activity, and has produced
general concern and uncertainty. The impact of this coronavirus, and other
epidemics and pandemics that may arise in the future, could affect national and
global economies, individual companies and the market in general in a manner
that cannot be foreseen at the present time. Health crises caused by the recent
outbreak may heighten other pre-existing political, social and economic risks in
a country or region. In the event of a pandemic or an outbreak, there can be no
assurance that the Funds and their service providers will be able to maintain
normal business operations for an extended period of time or will not lose the
services of key personnel on a temporary or long-term basis due to illness or
other reasons. Although
vaccines for COVID-19 are becoming more widely available, the full impacts of a
pandemic or disease outbreaks are unknown and the pace of recovery may vary from
market to market, resulting in a high degree of uncertainty for potentially
extended periods of time.
Maryland
Bonds and Municipal Securities Risk
Maryland
Bonds
If
a Fund invests in Maryland fixed income securities, economic or political
factors in Maryland may adversely affect issuers of the Maryland municipal
securities in which that Fund invests. Adverse economic or political factors
will affect a Fund’s NAV more than if that Fund invested in more geographically
diverse investments. As a result, the value of a Fund’s assets may fluctuate
more widely than the value of shares of a fund investing in securities relating
to a number of different states. The State of Maryland and the State’s municipal
issuers may also be adversely affected by the economic, social and health risks
presented by the ongoing pandemic which could potentially produce a negative
financial impact on the future economic fundamentals of
issuers
of Maryland municipal securities. For example, the State and Maryland’s
municipal issuers could experience declines in the receipt of tax payments, fees
and other types of revenue that are generally relied upon to support the payment
of debt service on the securities that they issue, and the ongoing costs of
responding to the impact of the pandemic on municipal services could negatively
impact issuers by causing them to incur increased expenses to fund essential
operations.
In
addition to the state’s general obligations, a Fund will invest a significant
portion of its assets in bonds that are rated according to the issuer’s
individual creditworthiness, such as bonds of local governments and public
authorities. While local governments in Maryland depend principally on their own
revenue sources, they could experience budget shortfalls due to cutbacks in
state aid. Certain Fund holdings may not rely on any government for money to
service their debt. Bonds issued by governmental authorities may depend wholly
on revenues generated by the project they financed or on other dedicated revenue
streams. The credit quality of these “revenue” bonds may vary from that of the
state’s general obligations.
The
following is a summary of the NRSRO ratings for Maryland municipal securities.
Maryland general obligation bonds were rated Aaa by Moody’s Investors Service,
confirmed as of May 31, 2022, and AAA by S&P Global Ratings, confirmed as of
May 31, 2022. There can be no assurance that Maryland general obligation bonds
or the securities of any Maryland political subdivision, authority or
corporation owned by a Fund will be rated in any category or will not be
downgraded by an NRSRO.
Other
Municipal Securities
Changes
in economic, business or political conditions relating to a particular state, or
states, or type of projects may have a disproportionate impact on a Fund.
Municipalities continue to experience difficulties in the current economic and
political environment. National governmental actions, such as the elimination of
tax-exempt status, also could affect performance. In addition, a municipality or
municipal project that relies directly or indirectly on national governmental
funding mechanisms may be negatively affected by the national government’s
current budgetary constraints. Municipal obligations that a Fund may acquire
include municipal lease obligations, which are issued by a state or local
government or authority to acquire land and a wide variety of equipment and
facilities. If the funds are not appropriated for the following year’s lease
payments, then the lease may terminate, with the possibility of default on the
lease obligation and significant loss to a Fund. The repayment of principal and
interest on some of the municipal securities in which a Fund may invest may be
guaranteed or insured by a monoline insurance company (a bond insurer) or other
financial institution. If a company insuring municipal securities in which a
Fund invests experiences financial difficulties, the credit rating and price of
the security may deteriorate. The credit and quality of private activity bonds
are usually related to the credit of the corporate user of the facilities and
therefore such bonds are subject to the risks of the corporate user. A Fund may
invest more heavily in bonds from certain cities, states or regions than others,
which may increase the Fund’s exposure to losses resulting from economic,
political, or regulatory occurrences impacting these particular cities, states
or regions.
Maturity
Risk
Generally,
a bond with a longer maturity will entail greater interest rate risk but have a
higher yield. Conversely, a bond with a shorter maturity will entail less
interest rate risk but have a lower yield.
Master
Limited Partnership Risk
A
Fund’s investments in MLPs entail risks, including fluctuations in energy
prices, decreases in the supply of or demand for energy commodities, decreases
in demand for MLPs in rising interest rate environments, unique tax
consequences, such as treatment as a qualifying security investment by the Fund
only to a limited extent, due to the partnership structure, and potentially
limited liquidity in thinly traded issues.
Medium
Capitalization Company Risk
Because
a Fund invests primarily in medium capitalization companies, an investment in
the Fund will have the following additional risks:
•analysts
and other investors typically follow these companies less actively and therefore
information about these companies is not always readily available;
•securities
of many medium-capitalization companies may be thinly traded, less liquid and
their prices more volatile than the prices of the securities of larger
companies;
•changes
in the value of medium capitalization company stocks may not mirror the
fluctuation of the general market; and
•more
limited product lines, markets and financial resources make these companies more
susceptible to economic or market setbacks.
For
these and other reasons, the prices of medium capitalization securities can
fluctuate more significantly than the securities of larger
companies. The smaller the company, the greater effect these risks
may have on that company’s operations and performance. Further,
stocks of medium capitalization companies could be more difficult to sell during
market downturns compared to larger, more widely traded companies. As a result,
an investment in a Fund may exhibit a higher degree of volatility than the
general domestic securities market.
Mortgage–
and Asset–Backed Securities Risk
Mortgage-
and asset-backed securities represent interests in “pools” of mortgages or other
assets, including consumer loans or receivables held in trust. These securities
are subject to prepayment risk as well as the risks associated with investing in
debt securities in general. If interest rates fall and the loans underlying
these securities are prepaid faster than expected, the Fund may have to reinvest
the prepaid principal in lower yielding securities, thus reducing the Fund’s
income. Conversely, if interest rates increase and the loans underlying the
securities are prepaid more slowly than expected, the expected duration of the
securities may be extended, reducing the cash flow for potential reinvestment in
higher yielding securities.
New
Fund Risk
There
can be no assurance that a newly organized Fund will grow to or maintain an
economically viable size, in which case the Board may determine to liquidate the
Fund. Liquidation can be initiated without shareholder approval by
the Board if it determines it is in the best interest of
shareholders. As a result, the timing of any liquidation may not be
favorable to certain individual shareholders.
Non-Diversification
Risk
If
a Fund is “non-diversified,” then its investments are not required to meet
certain diversification requirements under Federal law. A “non-diversified” Fund
is permitted to invest a greater percentage of its assets in the securities of a
single issuer than a diversified fund. Thus, the Fund may have fewer holdings
than other funds. As a result, a decline in the value of those investments would
cause the Fund’s overall value to decline to a greater degree than if the Fund
held a more diversified portfolio.
Non-Investment
Grade ("Junk Bond") Securities Risk
Securities
rated below investment grade, i.e., Ba
or BB and lower (“junk bonds”), are subject to greater risks of loss of your
money than higher rated securities. Compared with issuers of
investment grade fixed-income securities, junk bonds are more likely to
encounter financial difficulties and to be materially affected by these
difficulties.
Portfolio
Turnover Risk
Frequent
trading increases a Fund’s portfolio turnover rate and may increase transaction
costs, such as brokerage commissions, dealer mark-ups and taxes. Increased
transaction costs could detract from the Fund’s performance. Higher portfolio
turnover also may result in higher taxes when Fund shares are held in a taxable
account.
Prepayment/Extension
Risk
In
connection with a Fund’s investments in fixed income securities, the Fund may be
forced to invest in securities with lower yields and thus reducing its income if
issuers prepay certain fixed income securities. A Fund may be exposed
to greater prepayment risk because a Fund invests in mortgage-backed and
asset-backed securities. Issuers may decrease prepayments of
principal when interest rates increase, extending the average life and duration
of a fixed income security and causing the value of the security to
decline. There is a greater risk that a Fund will lose money due to
extension risk because a Fund invests in mortgage-backed and asset-backed
securities.
Private
Placement Risk
A
Fund may invest in privately issued securities, including those which may be
resold only in accordance with Rule 144A under the 1933
Act. Privately issued securities are restricted securities that are
not publicly traded. Accordingly, the liquidity of the market for
specific privately issued securities may vary. Delay or difficulty in
selling such securities may result in a loss to the Fund. Privately
issued securities that are determined by the Adviser or Sub-Adviser to be
“illiquid” are subject to the Fund’s policy of not investing more than 15% of
its net assets in illiquid securities.
Rating
Agencies Risk
Ratings
are not an absolute standard of quality, but rather general indicators that
reflect only the view of the originating rating agencies from which an
explanation of the significance of such ratings may be
obtained. There is no assurance that a particular rating will
continue for any given period of time or that any such rating will not be
revised downward or withdrawn entirely if, in the judgment of the agency
establishing the rating, circumstances so warrant. A downward
revision or withdrawal of such ratings, or either of them, may have an effect on
the liquidity or market price of the securities in which the Fund
invests. The ratings of securitized assets may not adequately reflect
the credit risk of those assets due to their structure.
Rating
agencies may fail to make timely changes in credit ratings and an issuer’s
current financial condition may be better or worse than a rating
indicates. In addition, rating agencies are subject to an inherent
conflict of interest because they are often compensated by the same issuers
whose securities they grade.
REIT
and Real Estate Risk
A
Fund’s investments in REITs may subject the Fund to the following additional
risks:
•declines
in the value of real estate;
•changes
in interest rates;
•lack
of available mortgage funds or other limits on obtaining capital;
•overbuilding;
•extended
vacancies of properties or defaults by borrowers or tenants, particularly during
periods of disruptions to business operations or an economic
downturn;
•increases
in property taxes and operating expenses;
•changes
in zoning laws and regulations;
•casualty
or condemnation losses; and
•tax
consequences of the failure of a REIT to comply with tax law
requirements.
A
Fund will bear a proportionate share of the REIT’s on-going operating fees and
expenses, which may include management, operating and administrative expenses in
addition to the expenses of the Fund.
Smaller
and Medium Capitalization Company Risk
If
a Fund invests in smaller and medium capitalization companies, an investment in
the Fund may have the following additional risks:
•analysts
and other investors typically follow these companies less actively and therefore
information about these companies is not always readily available;
•securities
of many smaller companies are traded in the over-the-counter markets or on a
regional securities exchange potentially making them thinly traded, less liquid
and their prices more volatile than the prices of the securities of larger
companies;
•changes
in the value of smaller and medium capitalization company stocks may not mirror
the fluctuation of the general market; and
•more
limited product lines, markets and financial resources make these companies more
susceptible to economic or market setbacks.
For
these and other reasons, the prices of smaller and medium capitalization
securities can fluctuate more significantly than the securities of larger
companies. The smaller the company, the greater effect these risks
may have on that company’s operations and performance. Further,
stocks of smaller and medium capitalization companies could be more difficult to
sell during market downturns compared to larger, more widely traded companies,
As a result, an investment in a Fund may exhibit a higher degree of volatility
than the general domestic securities market.
Sustainability
Policy Risk
A
Fund’s investment focus on sustainability factors could cause it to make or
avoid investments that could result in the Fund underperforming similar funds
that do not have a sustainability focus. The application of sustainability
principles and the perceptions of the commitment of a given issuer to
sustainability principles vary among vendors, investors, analysts and other
market observers. Additionally, it may be difficult in certain instances for the
Adviser to correctly evaluate an issuer’s
commitment
to sustainability practices, and a failure to do so may result in investment in
issuers with practices that are not consistent with the Fund’s
aspirations.
Tax
Risk
Municipal
securities may decrease in value during times when tax rates are falling. The
Fund’s investments are affected by changes in federal income tax rates
applicable to, or the continuing federal tax-exempt status of, interest income
on municipal obligations. Any proposed or actual changes in such rates or exempt
status, therefore, can significantly affect the liquidity, marketability and
supply and demand for municipal obligations, which would in turn affect the
Fund’s ability to acquire and dispose of municipal obligations at desirable
yield and price levels.
To
Be Announced (“TBA”) Transactions Risk
A
Fund may enter into TBA transactions to purchase mortgage-related securities for
a fixed price at a future date. TBA purchase commitments involve a risk of loss
if the value of the security to be purchased declines prior to settlement date
or if the counterparty does not deliver the securities as promised.
U.S.
Government Securities Risk
Although
a Fund’s U.S. Government securities are considered to be among the safest
investments, they are not guaranteed against price movements due to changing
interest rates. Some obligations issued or guaranteed by
U.S. Government agencies and instrumentalities, including, for example,
Ginnie Mae pass-through certificates, are supported by the full faith and credit
of the U.S. Treasury. Other obligations issued by or guaranteed
by federal agencies, such as those securities issued by Fannie Mae, are
supported by the discretionary authority of the U.S. Government to purchase
certain obligations of the federal agency, while other obligations issued by or
guaranteed by federal agencies, such as those of the Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the
U.S. Treasury.
While
the U.S. Government provides financial support to such
U.S. Government-sponsored federal agencies, no assurance can be given that
the U.S. Government will always do so, since the U.S. Government is
not so obligated by law.
Valuation
Risk
The
prices provided by pricing services or independent dealers or the fair value
determinations made by the Adviser may be different from the prices used by
other mutual funds or from the prices at which securities are actually bought
and sold. The prices of certain securities provided by pricing
services may be subject to frequent and significant change, and will vary
depending on the information that is available.
Value
Company Risk
Value
investing carries the risk that the market will not recognize a security’s
intrinsic value for a long time or that a stock judged to be undervalued may
actually be appropriately priced. The determination that a stock is
undervalued is subjective; the market may not agree, and a stock’s price may not
rise to what the investment manager believes is its full value. If
the market does not consider the stock to be undervalued then the value of a
Fund’s shares may decline, even if stock prices generally are
rising.
Each
Fund is a series of Brown Advisory Funds (the “Trust”). The business of the
Trust and each Fund is managed under the oversight of the Board of Trustees (the
“Board”). The Board meets periodically to review each Fund’s performance,
monitor investment activities and practices, and discuss other matters affecting
each Fund. Additional information regarding the Board, as well as the Trust’s
executive officers, may be found in the Funds’ Statement of Additional
Information (“SAI”).
The
Adviser
Brown
Advisory LLC.
Each Fund’s Adviser is Brown Advisory LLC, 901 South Bond Street, Suite 400,
Baltimore, Maryland 21231. The Adviser does business under the name of Brown
Advisory. The Adviser is a wholly-owned subsidiary of Brown Advisory Management,
LLC, a Maryland limited liability company. Brown Advisory Management, LLC is
controlled by Brown Advisory Incorporated, a holding company incorporated under
the laws of Maryland in 1998. The Adviser and its affiliates (“Brown Advisory”)
have provided investment advisory and management services to clients for over 20
years. As of September 30, 2022, Brown Advisory had approximately $93.2 billion
in assets under management and advisement, including both discretionary and
non-discretionary accounts.
The
Adviser receives an advisory fee from each Fund at an annual rate of each Fund’s
average daily net assets as indicated below the “Contractual Advisory Fee”. For
the fiscal year ended June 30, 2022, the Adviser received, after applicable fee
waivers, an advisory fee at an annual rate of each Fund’s average daily net
assets as indicated below the “Net Advisory Fee Received”. The currently
effective annual advisory fee for each of the Funds is as follows:
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|
| |
| Contractual
Advisory Fee as of the fiscal year ended 6/30/22 |
| Net
Advisory Fee Received for fiscal year ended 6/30/22 |
Brown
Advisory Growth Equity Fund(1) |
0.60% |
| 0.57% |
Brown
Advisory Flexible Equity Fund(2) |
0.50% |
| 0.43% |
Brown
Advisory Equity Income Fund |
0.60% |
| 0.57% |
Brown
Advisory Sustainable Growth Fund(3) |
0.60% |
| 0.53% |
Brown
Advisory Mid-Cap Growth Fund |
0.65% |
| 0.65% |
Brown
Advisory Small-Cap Growth Fund |
0.85% |
| 0.85% |
Brown
Advisory Small-Cap Fundamental Value Fund |
0.85% |
| 0.85% |
Brown
Advisory Sustainable Small-Cap Core Fund(4) |
0.85% |
| 0.42% |
Brown
Advisory Global Leaders Fund |
0.65% |
| 0.65% |
Brown
Advisory Sustainable International Leaders Fund(5) |
0.75% |
| 0.00% |
Brown
Advisory Intermediate Income Fund |
0.30% |
| 0.26% |
Brown
Advisory Total Return Fund |
0.30% |
| 0.30% |
Brown
Advisory Sustainable Bond Fund |
0.30% |
| 0.30% |
Brown
Advisory Maryland Bond Fund |
0.30% |
| 0.30% |
Brown
Advisory Tax-Exempt Bond Fund |
0.30% |
| 0.30% |
Brown
Advisory Tax-Exempt Sustainable Bond Fund |
0.30% |
| 0.30% |
Brown
Advisory Mortgage Securities Fund |
0.30% |
| 0.30% |
Brown
Advisory – WMC Strategic European Equity Fund |
0.90% |
| 0.90% |
Brown
Advisory Emerging Markets Select Fund |
0.90% |
| 0.90% |
Brown
Advisory – Beutel Goodman Large-Cap Value Fund |
0.45% |
| 0.45% |
(1)Effective
September 12, 2018, the Adviser contractually lowered its management fee under a
new breakpoint structure. Under the breakpoint structure, the Adviser is
entitled to an advisory fee at the annual rate of 0.60% of the first $1.5
billion of the Brown Advisory Growth Equity Fund's average daily net assets,
0.55% of the Fund's average daily net assets over $1.5 billion to $3 billion,
0.50% of the Fund’s average daily net assets over $3 billion to $6 billion, and
0.45% of the Fund's average daily net assets over $6 billion, computed daily and
payable monthly.
(2)Effective
September 12, 2018, the Adviser contractually lowered its management fee under a
new breakpoint structure. Under the breakpoint structure, the Adviser is
entitled to an advisory fee at the annual rate of 0.50% of the first $150
million of the Brown Advisory Flexible Equity Fund's average daily net assets,
0.45% of the Fund's average daily net assets over $150 million to $250 million,
0.40% of the Fund’s average daily net assets over $250 million to $1 billion,
and 0.38% of the Fund's average daily net assets over $1 billion, computed daily
and payable monthly.
(3)Effective
September 12, 2018, the Adviser contractually lowered its management fee under a
new breakpoint structure. Under the breakpoint structure, the Adviser is
entitled to an advisory fee at the annual rate of 0.60% of the first $1.5
billion of the Brown Advisory Sustainable Growth Fund's average daily net
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Management
– The Adviser/
The
Sub-Advisers |
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assets,
0.55% of the Fund's average daily net assets over $1.5 billion to $3 billion,
0.50% of the Fund’s average daily net assets over $3 billion to $6 billion, and
0.45% of the Fund's average daily net assets over $6 billion, computed daily and
payable monthly.
(4)The
Brown Advisory Sustainable Small-Cap Core Fund commenced operations on September
30, 2021.
(5)The
Brown Advisory Sustainable International Leaders Fund commenced operations on
March 1, 2022.
A
discussion summarizing the basis on which the Board approved the renewal of the
Investment Advisory Agreement between the Adviser and the Trust on behalf of
each of the Funds, other than the Brown Advisory Sustainable Small-Cap Core Fund
and the Brown Advisory Sustainable International Leaders Fund, including the
basis on which the Board approved the renewal of the Investment Sub-Advisory
Agreements between the Adviser and (i) Brown Advisory Limited (on behalf of the
Brown Advisory Global Leaders Fund and the Brown Advisory Sustainable
International Leaders Fund), (ii) Wellington Management Company LLP (on behalf
of the Brown Advisory - WMC Strategic European Equity Fund and the Brown
Advisory Select Emerging Markets Fund), (iii) Pzena Investment Management, LLC
(on behalf of the Brown Advisory Select Emerging Markets Fund), and (iv) Beutel,
Goodman and Company Ltd. (on behalf of Brown Advisory - Beutel Goodman Large-Cap
Value Fund) is presented in the Funds’ Semi-Annual Report to Shareholders dated
December 31, 2021.
A
discussion summarizing the basis on which the Board approved the initial
Investment Advisory Agreement between the Adviser and the Trust on behalf of the
Brown Advisory Sustainable Small-Cap Core Fund is presented in the Funds’
Semi-Annual Report to Shareholders dated December 31, 2021.
A
discussion summarizing the basis on which the Board approved the initial
Investment Advisory Agreement between the Adviser and the Trust on behalf of the
Brown Advisory Sustainable International Leaders Fund, including the basis on
which the Board approved the initial approval of the Investment Sub-Advisory
Agreement between the Adviser and Brown Advisory Limited, is presented in the
Funds’
Annual
Report
to Shareholders dated June 30, 2022.
Subject
to the general oversight of the Board, the Adviser is directly responsible for
making the investment decisions for the Funds, other than the Brown Advisory
Global Leaders Fund, Brown Advisory Sustainable International Leaders Fund,
Brown Advisory − WMC Strategic European Equity Fund, Brown Advisory Emerging
Markets Select Fund, and the Brown Advisory – Beutel Goodman Large-Cap Value
Fund.
The
Adviser also provides certain business management services to each Fund pursuant
to a separate Business Management Agreement. Pursuant to the Business Management
Agreement, the Adviser supervises all aspects of the management and operations
of the Funds, which includes monitoring the Funds’ relationships with
third-party service providers to the Funds and other related business management
services. For these services, each Fund pays the Adviser a fee of 0.05% of its
average daily net assets.
The
Trust and Adviser have applied to the Securities and Exchange Commission (“SEC”)
for an exemptive order (the “Exemptive Order”) that would permit the Brown
Advisory Funds and the Adviser, subject to certain conditions and approval by
the Board of Trustees, but without shareholder approval, to hire sub-advisers
for the Brown Advisory Funds, change the terms of particular agreements with
sub-advisers or continue the employment of existing sub-advisers after events
that would otherwise cause an automatic termination of a sub-advisory agreement
(“Manager of Managers Arrangement”). Within 90 days of retaining a
new sub-adviser, shareholders of any affected Fund will receive written
notification of the change. However, as of the date of this Prospectus, the
Trust and Adviser have not yet received the Exemptive Order.
The
Sub-Advisers
Brown
Advisory Limited.
The sub-adviser for the Brown Advisory Global Leaders Fund and Brown Advisory
Sustainable International Leaders Fund is Brown Advisory Limited, 18 Hanover
Square, London, W1S 1JY, United Kingdom. Brown Advisory Limited is an
affiliate of the Adviser based in London. As of September 30, 2022, Brown
Advisory Limited managed approximately $4.1 billion in assets.
Subject
to the general oversight of the Board and the Adviser, Brown Advisory Limited is
directly responsible for making the investment decisions for the Brown Advisory
Global Leaders Fund and the Brown Advisory Sustainable International Leaders
Fund.
Wellington
Management Company LLP.
The sub-adviser for the Brown Advisory - WMC Strategic European Equity Fund, and
a sub-adviser for the Brown Advisory Emerging Markets Select Fund is Wellington
Management Company LLP
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Management
– The Sub-Advisers/ Portfolio Managers |
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("Wellington"),
a Delaware limited liability partnership with principal offices at 280 Congress
Street, Boston, Massachusetts 02210. Wellington is a professional investment
counseling firm which provides investment services to investment companies,
employee benefit plans, endowments, foundations, and other institutions.
Wellington and its predecessor organizations have provided investment advisory
services for over 80 years. Wellington is owned by the partners of Wellington
Management Group LLP, a Massachusetts limited liability partnership. As of
September 30, 2022, Wellington and its investment advisory affiliates had
investment management authority with respect to over $1.1 trillion in assets.
Subject
to the general oversight of the Board and the Adviser, Wellington is directly
and solely responsible for making the investment decisions for the Brown
Advisory − WMC Strategic European Equity Fund and is directly responsible for
making the investment decision for its allocated portion of the Brown Advisory
Emerging Markets Select Fund.
Pzena
Investment Management, LLC.
A sub-adviser for the Brown Advisory Emerging Markets Select Fund is Pzena
Investment Management, LLC ("Pzena"), located at 320 Park Avenue, 8th Floor, New
York, New York 10022. Pzena is registered as an investment adviser with the SEC.
As of September 30, 2022, Pzena had approximately $42 billion in assets under
management.
Subject
to the general oversight of the Board and the Adviser, Pzena is directly
responsible for making the investment decision for its allocated portion of the
Brown Advisory Emerging Markets Select Fund.
Beutel,
Goodman & Company Ltd.
The sub-adviser for the Brown Advisory - Beutel Goodman Large-Cap Value Fund is
Beutel, Goodman & Company Ltd. (“Beutel Goodman”). Beutel Goodman is a
privately-owned, independent Canadian investment manager with principal offices
at 20 Eglinton Avenue West, Suite 2000, P.O. Box 2005, Toronto, Ontario, Canada
M4R 1K8. As of September 30, 2022, Beutel Goodman had investment management
authority with respect to approximately $29.8 billion in assets.
Subject
to the general oversight of the Board and the Adviser, the Beutel Goodman is
directly responsible for making the investment decisions for the Brown Advisory
- Beutel Goodman Large-Cap Value Fund.
Portfolio
Managers
Brown
Advisory Growth Equity Fund. An
investment team managed the Fund’s portfolio from its inception in 1999 through
March 2008. Mr. Kenneth M. Stuzin led the team during that period; this was
a time when the team managed the Fund in a tax sensitive manner. Since 2008, Mr.
Stuzin has managed the Fund according to the institutional strategy and retains
sole decision-making authority over the day-to-day management of the Fund’s
assets:
Kenneth
M. Stuzin, CFA, has
served as portfolio manager for the Fund since 1999 and retains decision-making
authority over the day-to-day management of the Fund’s assets. Prior to joining
Brown Advisory in 1996, Mr. Stuzin was a Vice President and Portfolio
Manager at J.P. Morgan Investment Management in Los Angeles, where he was a
U.S. Large-Cap Portfolio Manager. Prior to that, he was a quantitative
portfolio strategist in New York, advising clients on capital markets issues and
strategic asset allocation decisions. Mr. Stuzin received his B.A. and
M.B.A. from Columbia University in 1986 and 1993, respectively.
Brown
Advisory Flexible Equity Fund.
Maneesh Bajaj is responsible for the day-to-day management of the Fund’s
portfolio.
Maneesh
Bajaj, CFA,
has served as a portfolio manager of the Fund since 2018 and previously served
as associate portfolio manager of the Fund since 2017. Mr. Bajaj is a portfolio
manager and equity research analyst at Brown Advisory. Prior to joining the
firm, he was a strategy consultant at McKinsey & Co., New York. He also
worked in corporate value consulting at Standard & Poor’s and in design and
development of telecommunication networks at Primus Telecommunications. Mr.
Bajaj received a M.S. from the University of Kentucky and an M.B.A. from the
University of Pennsylvania.
Brown
Advisory Equity Income Fund. Brian
E. Graney is responsible for the day-to-day management of the Fund’s
portfolio.
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Management
– Portfolio Managers |
|
Brian
E. Graney, CFA,
has 18 years of investment management experience. Prior to joining Brown
Advisory, Mr. Graney was a portfolio manager and analyst with Alex. Brown
Investment Management for over 5 years and is a partner at Brown Advisory
following the combination of the two firms in July 2008. Mr. Graney received a
B.A. from George Washington University in 1996.
Brown
Advisory Sustainable Growth Fund.
Karina Funk and David Powell serve as the Fund’s portfolio managers and retain
equal decision-making authority in the day-to-day management of the Fund’s
portfolio.
Ms.
Karina Funk, CFA,
has served as portfolio manager of the Fund since its inception in 2012. She
joined Brown Advisory’s equity research team in 2009, with a focus on companies
in the clean technology sector. Prior to joining Brown Advisory, Ms. Funk was a
senior research analyst at Winslow Management Company from 2007 prior to Winslow
joining Brown Advisory in 2009. Ms. Funk earned a B.S. in Chemical Engineering
from Purdue University, an M.S. in Civil & Environmental Engineering and an
M.S. in Technology & Policy from the Massachusetts Institute of Technology,
and a Post-Graduate Diploma from Ếcole Polytechnique in France.
Mr.
David Powell, CFA,
has served as portfolio manager of the Fund since its inception in 2012. He
joined Brown Advisory’s equity research team in 1999, with a focus on companies
in the energy and industrials sectors. Mr. Powell earned a B.A. from Bowdoin
College.
Brown
Advisory Mid-Cap Growth Fund.
Christopher A. Berrier and George Sakellaris, CFA, serve as the Fund’s portfolio
managers and Emmy Wachtmeister, CFA, serves as associate portfolio manager to
the Fund. As portfolio managers, Mr. Berrier and Mr. Sakellaris retain equal
decision-making authority in the day-to-day management of the Fund’s portfolio.
Christopher
A. Berrier has
served as portfolio manager of the Fund since the Fund’s inception in 2017.
Prior to joining Brown Advisory in 2005, Mr. Berrier was a Senior Equity
Analyst at T. Rowe Price, covering multiple sectors with a primary focus on
small- and mid-capitalization growth companies across several mutual funds. He
received a B.A. in economics from Princeton University in 2000.
George
Sakellaris, CFA, has
served as portfolio manager of the Fund since the Fund’s inception in 2017.
Prior to joining Brown Advisory in 2014, Mr. Sakellaris started and managed
a small-cap growth strategy at Credo Capital Management and served as director
of research and an analyst for GARP Research & Securities. He received a
M.B.A. from the Robert H. Smith School of Business in 2006 and a B.S. from the
University of Maryland in 2000.
Emmy
Wachtmeister, CFA, has
served as associate portfolio manager to the Fund since 2021. Ms. Wachtmeister
serves as an equity research analyst in the Technology sector at Brown Advisory
LLC. Prior to joining Brown Advisory in 2013, Ms. Wachtmeister worked in equity
research at Morgan Stanley. She received a B.A. from Washington and Lee
University in 2011.
Brown
Advisory Small-Cap Growth Fund.
Christopher A. Berrier serves as portfolio manager and George Sakellaris serves
as associate portfolio manager of the Fund. As portfolio manager, Mr. Berrier
retains final decision-making authority in the day-to-day management of the
Fund’s portfolio.
Christopher
A. Berrier has
served as portfolio manager of the Fund since 2006. Prior to joining Brown
Advisory in 2005, Mr. Berrier was a Senior Equity Analyst at T. Rowe Price,
covering multiple sectors with a primary focus on small- and mid-capitalization
growth companies across several mutual funds. He received a B.A. in
economics from Princeton University in 2000.
George
Sakellaris, CFA,
has served as associate portfolio manager of the Fund since 2017,
and
serves
as a portfolio manager and equity research analyst at Brown Advisory. Prior to
joining Brown Advisory in 2014, Mr. Sakellaris started and managed a
small-cap growth strategy at Credo Capital Management and served as director of
research and an analyst for GARP Research & Securities. He received a M.B.A.
from the Robert H. Smith School of Business in 2006 and a B.S. from the
University of Maryland in 2000.
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Management
– Portfolio Managers |
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Brown
Advisory Small-Cap Fundamental Value Fund. Mr. David
Schuster is responsible for day-to-day management of the Fund’s portfolio.
J.
David Schuster has
served as portfolio manager for the Fund since 2008 and retains decision-making
authority over the day-to-day management of the Fund’s assets. He has been an
Equity Research Analyst at Brown Advisory researching investment opportunities
in the financial services sector since May 2008. Prior to joining Brown Advisory
in 2008, he worked as a Managing Director covering the financial services
industry at Citigroup from 2006 to 2008. Prior to joining Citigroup,
Mr. Schuster worked as a Managing Director in the financial institutions
group at Lazard Freres & Co. since 1998. Mr. Schuster graduated
with a BSBA in Accounting from Georgetown University in 1992.
Brown
Advisory Sustainable Small-Cap Core Fund.
Timothy Hathaway, CFA and Emily Dwyer serve as portfolio managers and Kenneth
Coe III, CFA serves as associate portfolio manager of the Fund. As portfolio
managers, Mr. Hathaway and Ms. Dwyer retain equal decision-making authority in
the day-to-day management of the Fund’s portfolio.
Timothy
Hathaway, CFA,
has served as portfolio manager of the Fund since its inception in 2021. Mr.
Hathaway also serves on the Executive Team and serves as head of the U.S.
institutional business. Prior to this role, he was the director of research and
institutional investment management. Before his time as director, Mr. Hathaway
worked as a co-portfolio manager of the Small-Cap Growth strategy for nine years
until June 2014. Prior to that, he was a research analyst with the Large-Cap
Equity team and was responsible for research in the consumer discretionary and
energy sectors. Mr. Hathaway earned a B.A. in 1993 from Randolph Macon College,
and an M.B.A. from Loyola College.
Emily
Dwyer
has served as portfolio manager of the Fund since its inception in 2021. Ms.
Dwyer also serves as a portfolio manager and senior equity ESG research analyst
at Brown Advisory. Prior to joining the firm in 2014, she held research
positions at the United Nations Environmental Programme Finance Initiative,
Parnassus Investments, and Sustainalytics. Ms. Dwyer earned a dual B.A.in
Economics and Environmental Science & Policy from Smith College.
Kenneth
Coe III, CFA, has
served as associate portfolio manager of the Fund since its inception in 2021.
Mr. Coe also serves as an equity research analyst covering the financial sector.
Prior to joining the firm in 2013, he served as an analyst at First Annapolis
Consulting and also worked on a financial econometrics research study. Mr. Coe
earned a B.A. in Economics from Wake Forest University.
Brown
Advisory Global Leaders Fund.
Michael Dillon, CFA, and Bertie Thomson, CFA, serve as the Fund’s portfolio
managers and retain equal decision-making authority in the day-to-day management
of the Fund’s portfolio.
Michael
Dillon, CFA, has
served as portfolio manager of the Fund since its inception in 2015. Mr. Dillon,
CFA, is a portfolio manager with Brown Advisory Limited. He formerly worked at
HSBC Global Asset Management in Hong Kong where he was the Co-Head of Asian
Equities. Mr. Dillon, a Chartered Financial Analyst (CFA), is originally from
Australia and graduated from the University of Melbourne where he was awarded
three bachelor's degrees in six years.
Bertie
Thomson, CFA, has
served as portfolio manager of the Fund since 2016. Since 2015, Mr. Thomson has
served as an equity research analyst at Brown Advisory LLC and its affiliates
researching investment opportunities in the industrial and consumer sectors.
Prior to joining Brown Advisory, he worked at Aberdeen Asset Management as a
member of its European equity team based in London. Most recently, he was a
senior investment manager on Aberdeen’s Pan European equity team. Mr. Thomson
received his M.A. in Architectural History from Edinburgh
University.
Brown
Advisory Sustainable International Leaders Fund.
Priyanka Agnihotri is responsible for the day-to-day management of the Fund’s
portfolio.
Priyanka
Agnihotri has
served as portfolio manager of the Fund since its inception in 2022. Ms.
Agnihotri is the portfolio manager for the International Leaders strategy within
the Global Equity team. Ms. Agnihotri joined Brown Advisory as a financials
equity research analyst in June 2015 having formerly worked for Bernstein
Research on the sell-side covering European financials. Prior to this, she began
her career in 2009 as a buy-side analyst for Phoenix Asset Management Partners
focusing on U.K. equities. Ms. Agnihotri earned her MBA in 2009 from Columbia
Business School where she was a member of the Value Investing
Program.
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Management
– Portfolio Managers |
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Brown
Advisory Intermediate Income Fund.
Jason Vlosich is responsible for the day-to-day management of the Fund’s
portfolio.
Jason
Vlosich has
served as portfolio manager of the Fund since 2019, and previously served as
associate portfolio manager of the Fund since 2017. Mr. Vlosich
has
been a member of Brown Advisory’s fixed income investment team and contributing
analyst for the Fund since 2008. Mr. Vlosich focuses on the analysis, management
and trading of taxable bonds. Prior to joining Brown Advisory, Mr. Vlosich was a
taxable bond trader at Ferris, Baker Watts Inc. and Deutsche Bank Alex. Brown.
Mr. Vlosich earned his B.S. from the University of Baltimore and M.B.A. from
Loyola University Maryland.
Brown
Advisory Total Return Fund.
Chris Diaz, Ryan Myerberg and Colby Stilson serve as the Fund’s co-portfolio
managers and retain equal decision-making authority in the day-to-day management
of the Fund’s portfolio.
Chris
Diaz, CFA, is
a partner and portfolio manager in the fixed income team. Prior to joining Brown
Advisory in January 2021, Mr. Diaz was Co-Head of Global Bonds at Janus
Henderson Investors, where he managed a team of portfolio managers and analysts
across three continents. He was the Lead Manager of the Janus Henderson global
bond strategy and all related portfolios. Mr. Diaz was responsible for
developing the global investment process and setting currency, interest rate and
asset allocation policy for Janus Henderson global multi-sector portfolios.
Prior to joining Janus Capital in 2011, Mr. Diaz was the Head of Global Rates at
ING Investment Management where he was responsible for global macro strategies
and oversaw the interest rate, currency and derivative trading desk. He was the
Co-Portfolio Manager of the ING global bond strategy and all related portfolios.
He began his career at SunTrust Equitable Securities in 1997, where he served as
a fixed income portfolio analyst. Mr. Diaz received his Bachelor of Science
degree in business administration from the University of South Carolina and
earned an MBA with a concentration in finance from Emory University, Goizueta
Business School. Mr. Diaz is a Chartered Financial Analyst.
Ryan
Myerberg
is a partner and portfolio manager in the fixed income team. Prior to joining
Brown Advisory in March 2021, Mr. Myerberg was the Head and CIO of Absolute
Return Fixed Income at Amundi Asset Management, leading a team of investors for
absolute return, total return, and currency strategies across four global
investment hubs. He spent the previous 9 years at Janus Henderson Investors
where he was responsible for launching Janus’ global fixed income platform in
London in 2010, and serving as a portfolio manager across a number of global
macro and global credit strategies. Prior to his move to London in 2008 with
BlueMountain Capital Management, Mr. Myerberg spent 6 years in New York, working
at both Morgan Stanley and Lehman Brothers. Mr. Myerberg received his Bachelor
of Arts degree in foreign affairs from the University of Virginia in
2002.
Colby
Stilson
is a partner and portfolio manager in the fixed income team. He joined Brown
Advisory after three years as an investor and operator within private markets,
most recently as a partner and executive at TIFIN Group. Prior to that, Mr.
Stilson spent 18 years as an investor in public markets building and managing
research teams and credit portfolios. His coverage experience includes: TMT,
financials, energy, industrials, and sovereigns. Prior to TIFIN, he worked at
ArrowMark Partners where his responsibilities included research, trading, and
portfolio management. He helped lead efforts to build, launch, and manage a
corporate credit research platform. Prior to joining ArrowMark, Mr. Stilson
helped lead efforts to launch a global fixed income business at Janus Henderson
Investors (formerly known as Janus Capital) in London, UK. The first half of his
career at Janus was primarily focused on credit and equity research. He began
his career within telecommunications M&A at Lumen (formerly known as Level 3
Communications) where he was responsible for acquisition due diligence,
execution, and integration. Mr. Stilson received his Bachelor of Science in
accounting and finance with a minor in economics from the University of Colorado
at Boulder and earned an MBA from The Wharton School at the University of
Pennsylvania.
Brown
Advisory Sustainable Bond Fund.
Chris Diaz, Amy Hauter, and Colby Stilson serve as the Fund’s co-portfolio
managers and retain equal decision-making authority in the day-to-day management
of the Fund’s portfolio.
Chris
Diaz, CFA, is
a partner and portfolio manager in the fixed income team. Prior to joining Brown
Advisory in January 2021, Mr. Diaz was Co-Head of Global Bonds at Janus
Henderson Investors, where he managed a team of portfolio managers and analysts
across three continents. He was the Lead Manager of the Janus Henderson global
bond
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Management
– Portfolio Managers |
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strategy
and all related portfolios. Mr. Diaz was responsible for developing the global
investment process and setting currency, interest rate and asset allocation
policy for Janus Henderson global multi-sector portfolios. Prior to joining
Janus Capital in 2011, Mr. Diaz was the Head of Global Rates at ING Investment
Management where he was responsible for global macro strategies and oversaw the
interest rate, currency and derivative trading desk. He was the Co-Portfolio
Manager of the ING global bond strategy and all related portfolios. He began his
career at SunTrust Equitable Securities in 1997, where he served as a fixed
income portfolio analyst. Mr. Diaz received his Bachelor of Science degree in
business administration from the University of South Carolina and earned an MBA
with a concentration in finance from Emory University, Goizueta Business School.
Mr. Diaz is a Chartered Financial Analyst.
Amy
Hauter, CFA, has
served as portfolio manager of the Fund since March 2019, and previously served
as associate portfolio manager of the Fund since 2017. Ms. Hauter is Head of
Sustainable Fixed Income at Brown Advisory and primarily concentrates on the
management and analysis of the firm's Sustainable Fixed Income strategies, as
well as oversight of ESG integration across all fixed income sectors. Prior to
joining the firm in 2012, she worked at Morgan Stanley in Fixed Income Client
Service. She received a B.S. from Old Dominion University in 2008. Ms. Hauter
obtained the Chartered Financial Analyst designation in 2017.
Colby
Stilson
is a partner and portfolio manager in the fixed income team. He joined Brown
Advisory after three years as an investor and operator within private markets,
most recently as a partner and executive at TIFIN Group. Prior to that, Mr.
Stilson spent 18 years as an investor in public markets building and managing
research teams and credit portfolios. His coverage experience includes: TMT,
financials, energy, industrials, and sovereigns. Prior to TIFIN, he worked at
ArrowMark Partners where his responsibilities included research, trading, and
portfolio management. He helped lead efforts to build, launch, and manage a
corporate credit research platform. Prior to joining ArrowMark, Mr. Stilson
helped lead efforts to launch a global fixed income business at Janus Henderson
Investors (formerly known as Janus Capital) in London, UK. The first half of his
career at Janus was primarily focused on credit and equity research. He began
his career within telecommunications M&A at Lumen (formerly known as Level 3
Communications) where he was responsible for acquisition due diligence,
execution, and integration. Mr. Stilson received his Bachelor of Science in
accounting and finance with a minor in economics from the University of Colorado
at Boulder and earned an MBA from The Wharton School at the University of
Pennsylvania.
Brown
Advisory Maryland Bond Fund. Stephen
Shutz and Joshua Perry serve as the Fund’s portfolio managers and retain equal
final decision-making authority in the day-to-day management of the Fund’s
portfolio.
Stephen
M. Shutz, CFA,
has served as portfolio manager of the Fund since 2014. Mr. Shutz joined the
Fixed Income Investment Team at Brown Advisory in 2010 and primarily
concentrates on the management, trading and analysis of tax-exempt bonds.
Prior to joining Brown Advisory, Mr. Shutz was a Vice President and Assistant
Portfolio Manager at Cavanaugh Capital Management (CCM) responsible for the
trading of tax-exempt securities and portfolio analytics. Before joining CCM in
2003, he was a portfolio and research analyst at Merrill Lynch from
1998-2003. Mr. Shutz began his investment career at Legg Mason in 1996.
Mr. Shutz is a Chartered Financial Analyst. Mr. Shutz earned a B.S. from
Frostburg State University.
Joshua
R. Perry, CFA, CAIA, FRM, has
served as portfolio manager of the Fund since 2019, and previously served as
associate portfolio manager of the Fund from 2017-2019. Mr. Perry is a municipal
credit analyst and a member of the Brown Advisory Fixed Income Team, and
primarily focuses on tax-exempt credit analysis. Prior to joining the firm, he
served as a fixed income credit analyst at Driehaus Capital Management. Prior to
that he was a commodities analyst at Constellation. He is a graduate of
Princeton University and has a M.B.A. from the Booth School at the University of
Chicago, as well as a Juris Doctorate from the University of
Baltimore.
Brown
Advisory Tax-Exempt Bond Fund. Stephen
Shutz and Joshua Perry serve as the Fund’s portfolio managers and retain equal
final decision-making authority in the day-to-day management of the Fund’s
portfolio.
Stephen
M. Shutz, CFA,
has served as portfolio manager of the Fund since its inception in 2012. Mr.
Shutz joined the Fixed Income Investment Team at Brown Advisory in 2010 and
primarily concentrates on the management, trading and analysis of tax-exempt
bonds. Prior to joining Brown Advisory, Mr. Shutz was a Vice President and
Assistant Portfolio Manager at Cavanaugh Capital Management (CCM) responsible
for the trading of tax-exempt securities and portfolio
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Management
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analytics.
Before joining CCM in 2003, he was a portfolio and research analyst at Merrill
Lynch from 1998-2003. Mr. Shutz began his investment career at Legg Mason
in 1996. Mr. Shutz is a Chartered Financial Analyst. Mr. Shutz earned a
B.S. from Frostburg State University.
Joshua
R. Perry, CFA, CAIA, FRM,
has served as portfolio manager of the Fund since 2019, and previously served as
associate portfolio manager of the Fund from 2017-2019. Mr. Perry is a municipal
credit analyst and a member of the Brown Advisory Fixed Income Team, and
primarily focuses on tax-exempt credit analysis. Prior to joining the firm, he
served as a fixed income credit analyst at Driehaus Capital Management. Prior to
that he was a commodities analyst at Constellation. He is a graduate of
Princeton University and has a M.B.A. from the Booth School at the University of
Chicago, as well as a Juris Doctorate from the University of
Baltimore.
Brown
Advisory Tax-Exempt Sustainable Bond Fund. Stephen
Shutz and Amy Hauter serve as the Fund’s portfolio managers and retain equal
decision-making authority in the day-to-day management of the Fund’s
portfolio.
Amy
Hauter, CFA, has
served as portfolio manager of the Fund its inception in 2019. Ms. Hauter is
Head of Sustainable Fixed Income at Brown Advisory and primarily concentrates on
the management and analysis of the firm's Sustainable Fixed Income strategies,
as well as oversight of ESG integration across all fixed income sectors. Prior
to joining the firm in 2012, she worked at Morgan Stanley in Fixed Income Client
Service. She received a B.S. from Old Dominion University in 2008. Ms. Hauter
obtained the Chartered Financial Analyst designation in 2017.
Stephen
M. Shutz, CFA,
has served as portfolio manager of the Fund since its inception in 2019. Mr.
Shutz joined the Fixed Income Investment Team at Brown Advisory in 2010 and
primarily concentrates on the management, trading and analysis of tax-exempt
bonds. Prior to joining Brown Advisory, Mr. Shutz was a Vice President and
Assistant Portfolio Manager at Cavanaugh Capital Management (CCM) responsible
for the trading of tax-exempt securities and portfolio analytics. Before joining
CCM in 2003, he was a portfolio and research analyst at Merrill Lynch from
1998-2003. Mr. Shutz began his investment career at Legg Mason in 1996.
Mr. Shutz is a Chartered Financial Analyst. Mr. Shutz earned a B.S. from
Frostburg State University.
Brown
Advisory Mortgage Securities Fund. Garritt
Conover serves
as the Fund’s lead portfolio manager and is responsible for the day-to-day
management of the Fund’s portfolio.
Chris
Roof serves as associate portfolio manager of the Fund.
Garritt
Conover, CFA, CAIA,
is a principal and portfolio manager on the fixed income team where he is
responsible for the management, research, and trading of structured credit and
securitized products. Before joining the firm, Mr. Conover was a vice president
and senior analyst/portfolio manager at Allianz Global Investors, where he
specialized in asset backed securities (ABS) and collateralized loan obligations
(CLO). Prior to that, Mr. Conover held multiple roles at Columbia Threadneedle
Investments, most recently as a research analyst covering CLOs. Mr. Conover
began his career at Hartford Investment Management Company as a mortgage and
asset backed securities research analyst and has been a member of the investment
community since 2007. Mr. Conover received his bachelor’s degree in finance and
mathematics with a minor in economics from the University of Massachusetts,
Amherst. He holds the Chartered Financial Analyst and Chartered Alternative
Investment Analyst designations.
Chris
Roof is
an associate portfolio manager at Brown Advisory. He is a member of the fixed
income investment team and concentrates on securitized products. Prior to
joining the firm, Mr. Roof was an associate financial controller at Morgan
Stanley covering Interest Rates. He graduated in 2014 with a BBA in Finance from
Towson University.
Brown
Advisory − WMC Strategic European Equity Fund. Wellington
Management manages the Fund’s portfolio. Mr. C. Dirk Enderlein is the portfolio
manager for the Fund and is responsible for day-to-day management of the Fund’s
portfolio.
C.
Dirk Enderlein, CFA,
is a Senior Managing Director and Equity Portfolio Manager affiliated with
Wellington Management located outside of the U.S., and has served as Portfolio
Manager of the Fund since 2013. Mr. Enderlein joined Wellington Management as an
investment professional in 2010. Prior to joining the firm, Mr. Enderlein was a
portfolio manager at RCM - Allianz Global Investors in Frankfurt, Germany
(1999-2010). Mr. Enderlein earned his M.S. in business administration and
mechanical engineering from Technische Universität Dresden (1998) and his B.S.
in the same specialty from Universität Kaiserslautern (1995).
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Management
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Brown
Advisory Emerging Markets Select Fund.
Wellington Management Company LLP and Pzena Investment Management, LLC are
jointly responsible for managing the Fund’s portfolio.
Wellington
Management Company LLP.
Mr. Bhagwat is responsible for managing Wellington’s allocated portion of the
Fund’s portfolio.
Niraj
Bhagwat, CA,
is a Senior Managing Director, Equity Portfolio Manager and leader of the firm’s
Asia Quality Equity Team. He manages equity assets on behalf of its clients,
drawing on research from Wellington Management’s global industry analysts,
equity portfolio managers, and team analysts. He currently manages several Asia
ex Japan equity approaches, and works in its Singapore office.
Prior
to joining Wellington Management in 2009, Mr. Bhagwat worked as managing
director and portfolio manager of global emerging and emerging Asia portfolios
for UBS Global Asset Management (2005 - 2008). Before that, he worked there as
an analyst of the Asia ex Japan consumer, media, auto, and health care sectors,
and as an India strategist (2002- 2004). Prior to that, he was the head of
Consumer Research and a research analyst at Indosuez WI Carr (1997-2001) and an
article trainee and auditor with Price Waterhouse (1992-1996). Mr. Bhagwat
earned his BS in commerce from Mumbai University’s Narsee Monjee College (1992).
Additionally, he is a Chartered Accountant with the Institute of Chartered
Accountants of India.
Pzena
Investment Management, LLC.
Mr. Bordia, Ms. Cai, and Ms. Fisch retain equal decision-making authority in the
day-to-day management of Pzena’s allocated portion of the Fund’s
portfolio.
Rakesh
Bordia
is a co-portfolio manager for the Emerging Markets strategies. Mr. Bordia became
a member of the firm in 2007. Prior to joining Pzena Investment Management, Mr.
Bordia was a principal at Booz Allen Hamilton focusing on innovation and growth
strategies, and a software engineer at River Run Software Group. He earned a
Bachelor of Technology in Computer Science and Engineering from the Indian
Institute of Technology, Kanpur, India and an M.B.A. from the Indian Institute
of Management, Ahmedabad, India.
Caroline
Cai, CFA,
is a co-portfolio manager for the Global, International, European and Emerging
Markets strategies, and the Financial Opportunities service. Ms. Cai became a
member of the firm in 2004. Prior to joining Pzena Investment Management, Ms.
Cai was a senior analyst at Alliance Bernstein LLP, and a business analyst at
McKinsey & Company. She earned a B.A. summa cum laude in Math and Economics
from Bryn Mawr College. Ms. Cai holds the Chartered Financial Analyst
designation.
Allison
Fisch
is a co-portfolio manager for the International and Emerging Markets strategies,
along with the Global Best Ideas service. Ms. Fisch became a member of the firm
in 2001. Prior to joining Pzena Investment Management, Ms. Fisch was a business
analyst at McKinsey & Company. She earned a B.A. summa cum laude in
Psychology and a minor in Drama from Dartmouth. College. At Dartmouth, Ms. Fisch
was a member of the Phi Beta Kappa and Psi Chi national honor
societies.
Brown
Advisory – Beutel Goodman Large-Cap Value Fund.
Beutel Goodman
manages
the Fund’s portfolio. Rui Cardoso, CFA, and Glenn Fortin, CFA, serve as the
portfolio managers for the Fund and retain equal decision-making authority in
the day-to-day management of the Fund’s portfolio.
Rui
Cardoso, CFA,
has served as the portfolio manager of the Fund since its inception in 2018. Mr.
Cardoso, Managing Director, U.S. and International Equities, joined the Beutel
Goodman Management Committee effective March 30, 2020. Mr. Cardoso joined Beutel
Goodman in 2013 as Vice President, US and International equities and assumed the
position of Head of U.S. and International Equities in April 2019. He is a
portfolio manager and has research responsibilities in the areas of Health Care
and Information Technology. Mr. Cardoso is a graduate of York University and is
a CFA charterholder.
Glenn
Fortin, CFA,
has served as the portfolio manager of the Fund since its inception in 2018. Mr.
Fortin joined Beutel Goodman in 1996 and has over 22 years of investment
experience. He is a portfolio manager and research analyst
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Management
– Portfolio Managers |
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specializing
in U.S. and global equities. Previously, Mr. Fortin worked at Curacao
International Trust Co. Mr. Fortin is a graduate of the University of Ottawa and
is a CFA charterholder.
The
Funds’ SAI provides additional information about each portfolio manager’s
compensation, other accounts managed by each portfolio manager and each
portfolio manager’s ownership of shares in the Fund that they manage.
Other
Service Providers
U.S.
Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services
(the “Transfer Agent”) provides certain administration, fund accounting and
transfer agency services to each Fund.
ALPS
Distributors, Inc. (the “Distributor”) serves as each Fund’s distributor and
principal underwriter in connection with the offering of each Fund’s shares. The
Distributor may enter into arrangements with banks, broker-dealers and other
financial institutions through which investors may purchase or redeem Fund
shares.
U.S.
Bank N.A. serves as custodian to the Funds. The Transfer Agent and U.S. Bank
N.A. are affiliates.
Fund
Expenses
In
addition to the advisory fees discussed above, each Fund incurs other expenses
such as custodian, transfer agency, interest, Acquired Fund Fees and Expenses
and other customary Fund expenses. (Acquired Fund Fees and Expenses are indirect
fees that a Fund incurs from investing in the shares of other investment
companies.) The Adviser has contractually agreed to waive its fees and/or
reimburse certain expenses (exclusive of any front-end or contingent deferred
sales loads, taxes, interest, brokerage commissions, Acquired Fund Fees and
Expenses, expenses incurred in connection with any merger or reorganization and
extraordinary expenses) in order to limit the Total Annual Fund Operating
Expenses to the amounts shown below of each Class’s average daily net assets
through October 31, 2023.
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| Institutional Shares |
Investor
Shares |
Advisor
Shares |
Brown
Advisory Growth Equity Fund |
0.82% |
0.97% |
1.22% |
Brown
Advisory Flexible Equity Fund |
0.82% |
0.97% |
1.22% |
Brown
Advisory Equity Income Fund |
0.76% |
0.91% |
1.16% |
Brown
Advisory Sustainable Growth Fund |
0.82% |
0.97% |
1.22% |
Brown
Advisory Mid-Cap Growth Fund |
0.82% |
0.97% |
1.22% |
Brown
Advisory Small-Cap Growth Fund |
1.04% |
1.19% |
1.44% |
Brown
Advisory Small-Cap Fundamental Value Fund |
1.03% |
1.18% |
1.43% |
Brown
Advisory Sustainable Small-Cap Core Fund |
0.93% |
1.08% |
1.33% |
Brown
Advisory Global Leaders Fund |
0.87% |
1.02% |
1.27% |
Brown
Advisory Sustainable International Leaders Fund |
0.85% |
1.00% |
1.25% |
Brown
Advisory Intermediate Income Fund |
0.48% |
0.53% |
0.78% |
Brown
Advisory Total Return Fund |
0.53% |
0.58% |
0.83% |
Brown
Advisory Sustainable Bond Fund |
0.53% |
0.58% |
0.83% |
Brown
Advisory Maryland Bond Fund |
0.55% |
0.60% |
0.85% |
Brown
Advisory Tax-Exempt Bond Fund |
0.62% |
0.67% |
0.92% |
Brown
Advisory Tax-Exempt Sustainable Bond Fund |
0.62% |
0.67% |
0.92% |
Brown
Advisory Mortgage Securities Fund |
0.55% |
0.60% |
0.85% |
Brown
Advisory – WMC Strategic European Equity Fund |
1.11% |
1.26% |
1.51% |
Brown
Advisory Emerging Markets Select Fund |
1.17% |
1.32% |
1.57% |
Brown
Advisory – Beutel Goodman Large-Cap Value Fund |
0.70% |
0.85% |
1.10% |
The
contractual waivers and expense reimbursements may be changed or eliminated at
any time by the Board of Trustees, on behalf of a Fund, upon 60 days written
notice to the Adviser. The contractual waivers and expense reimbursements may
not be terminated by the Adviser without the consent of the Board of Trustees.
The Adviser may recoup any waived amount from a Fund
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Management
– Fund Expenses |
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pursuant
to this agreement if such reimbursement does not cause a Fund to exceed existing
expense limitations or the limitations in place at the time the reduction was
originally made and the reimbursement is made within three years after the date
on which the Adviser incurred the expense.
In
addition, in connection with the Brown Advisory Intermediate Income Fund’s
investments in the Brown Advisory Mortgage Securities Fund, the Adviser has
contractually agreed to waive all or any portion of the Brown Advisory
Intermediate Income Fund’s advisory fee that would otherwise be paid by the Fund
to the Adviser in an amount equal to the separate advisory fee indirectly paid
by the Brown Advisory Intermediate Income Fund to the Brown Advisory Mortgage
Securities Fund. The contractual waiver may be changed or eliminated at any time
by the Board of Trustees, on behalf of the Fund, upon 60 days written notice to
the Adviser. The contractual waivers may not be terminated by the Adviser
without the consent of the Board of Trustees.
Class
Comparison
Each
Fund offers three classes of shares, Institutional
Shares,
Investor
Shares
and Advisor
Shares
(not all of the share classes of certain Funds are currently being offered for
sale). Each class of shares is designed for specific investors.
The
following is a summary of the differences between the three classes for each of
the Funds:
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| Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Eligible
Shareholder |
(i)
Investors who meet the investment minimum for Institutional
Shares;
(ii)
Certain institutions (financial institutions, corporations, trusts,
endowments, foundations, government entities, estates and religious and
charitable organizations investing on their own behalf);
(iii)
Certain fund of funds;
(iv)
Certain retirement plans whose sponsors and/or administrators have entered
into arrangements with the Funds’ distributor;
(v)
Certain investors investing through omnibus accounts held by financial
intermediaries that charge transaction fees and have entered into
arrangements with the Funds’ distributor to offer Institutional
Shares;
(vi)
Current and former trustees of the Funds;
(vii)
Certain other investors that have been approved by the Funds; and
(viii)
Retirement plans that are qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (“IRC”) and tax-exempt under Section
501(a) of the IRC, and plans operating consistent with Section 403(a),
403(b), 408, 408A, 457 or 223(d) of the IRC.
Notwithstanding
the above, the Funds reserve the right to broaden or limit the eligible
shareholders. |
(i)
Investors who meet the investment minimum for Investor
Shares;
(ii)
Certain investors investing through omnibus accounts held by financial
intermediaries that do not charge transaction fees and have entered into
arrangements with the Funds’ distributor to offer Investor Shares;
and
(iii)
Investors who invest unsolicited directly by application through the
Transfer Agent.
|
(i)
Investors who meet the investment minimum for Advisor Shares;
(ii)
Certain investors investing through omnibus accounts held by financial
intermediaries that charge transaction fees and have entered into
arrangements with the Funds’ distributor to offer Advisor Shares;
and
(iii)
Certain retirement plans whose sponsors and/or administrators have entered
into arrangements with the Funds’ distributor. |
Initial
Sales Charge |
None |
None |
None |
Contingent
Deferred Sales Charge |
None |
None |
None |
Redemption/
Exchange Fee |
1.00%
if shares are redeemed 14 days or less from purchase |
1.00%
if shares are redeemed 14 days or less from purchase |
1.00%
if shares are redeemed 14 days or less from
purchase |
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| Institutional
Shares |
Investor
Shares |
Advisor
Shares |
Distribution/Service
(12b‑1) Fees |
None |
None |
0.25%
of the class’ average
daily
net assets for each Fund
|
Shareholder
Service Fees |
None |
0.15%
of each Fund’s class’ average daily net assets (except for the Brown
Advisory Total Return Fund, Brown Advisory Intermediate Income Fund, Brown
Advisory Sustainable Bond Fund, Brown Advisory Maryland Bond Fund, Brown
Advisory Tax-Exempt Bond Fund, Brown Advisory Tax-Exempt Sustainable Bond
Fund and Brown Advisory Mortgage Securities Fund). 0.05% of the Brown
Advisory Intermediate Income Fund, Brown Advisory Total Return Fund, Brown
Advisory Sustainable Bond Fund, Brown Advisory Maryland Bond, Brown
Advisory Tax-Exempt Bond Fund, Brown Advisory Tax-Exempt Sustainable Bond
Fund and Brown Advisory Mortgage Securities Fund’s class’ average daily
net assets. |
0.15%
of each Fund’s class’ average daily net assets (except for the Brown
Advisory Total Return Fund, Brown Advisory Intermediate Income Fund, Brown
Advisory Sustainable Bond Fund, Brown Advisory Maryland Bond Fund, Brown
Advisory Tax-Exempt Bond Fund, Brown Advisory Tax-Exempt Sustainable Bond
Fund and Brown Advisory Mortgage Securities Fund). 0.05% of the Brown
Advisory Intermediate Income Fund, Brown Advisory Total Return Fund, Brown
Advisory Sustainable Bond Fund, Brown Advisory Maryland Bond, Brown
Advisory Tax-Exempt Bond Fund, Brown Advisory Tax-Exempt Sustainable Bond
Fund, and Brown Advisory Mortgage Securities Fund’s class’ average daily
net assets. |
Annual
Expenses |
Lowest
expense ratio because there is no Rule 12b‑1 distribution/service fee
or shareholder service fees. |
Higher
fees than Institutional Shares because of shareholder service fees and
lower fees than Advisor Shares because no Rule 12b-1 distribution/service
fee. |
Highest
expense ratio because of Rule 12b-1 distribution/service fee and
shareholder service fees. |
Initial
Minimum Investment |
$1,000,000 |
$100 |
$100 |
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Rule
12b-1 Distribution Fees
The
Trust has adopted a Rule 12b-1 distribution plan under which a Fund is
authorized to pay to the Distributor or such other entities as approved by the
Board, as compensation for the distribution-related and/or shareholder services
provided by such entities, an aggregate fee equal to the percentage shown below
of the average daily net assets of Advisor Shares, as applicable. The
Distributor may pay any or all amounts received under the Rule 12b‑1 Plan
to other persons, including the Adviser, for any distribution service or
activity designed to retain Fund shareholders.
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| Advisor
Shares |
Brown
Advisory Growth Equity Fund |
0.25% |
Brown
Advisory Flexible Equity Fund |
0.25% |
Brown
Advisory Equity Income Fund |
0.25% |
Brown
Advisory Sustainable Growth Fund |
0.25% |
Brown
Advisory Mid-Cap Growth Fund |
0.25% |
Brown
Advisory Small-Cap Growth Fund |
0.25% |
Brown
Advisory Small-Cap Fundamental Value Fund |
0.25% |
Brown
Advisory Sustainable Small-Cap Core Fund |
0.25% |
Brown
Advisory Global Leaders Fund |
0.25% |
Brown
Advisory Sustainable International Leaders Fund |
0.25% |
Brown
Advisory Intermediate Income Fund |
0.25% |
Brown
Advisory Total Return Fund |
0.25% |
Brown
Advisory Sustainable Bond Fund |
0.25% |
Brown
Advisory Maryland Bond Fund |
0.25% |
Brown
Advisory Tax-Exempt Bond Fund |
0.25% |
Brown
Advisory Tax-Exempt Sustainable Bond Fund |
0.25% |
Brown
Advisory Mortgage Securities Fund |
0.25% |
Brown
Advisory – WMC Strategic European Equity Fund |
0.25% |
Brown
Advisory Emerging Markets Select Fund |
0.25% |
Brown
Advisory – Beutel Goodman Large-Cap Value Fund |
0.25% |
Because
the Advisor Shares of each Fund pay distribution and shareholder service fees on
an ongoing basis, your investment cost over time may be higher than paying other
types of sales charges.
Shareholder
Service Fees
The
Trust has adopted a Shareholder Servicing Plan under which each Fund, other than
the Brown Advisory Intermediate Income Fund, Brown Advisory Total Return Fund,
Brown Advisory Sustainable Bond Fund, Brown Advisory Maryland Bond Fund, Brown
Advisory Tax-Exempt Bond Fund, Brown Advisory Tax-Exempt Sustainable Bond Fund
and Brown Advisory Mortgage Securities Fund, may pay a fee of up to 0.15% for
shareholder services provided to those Funds’ Investor Shares and Advisor Shares
by financial institutions, including the Adviser. For the Brown Advisory
Intermediate Income Fund, Brown Advisory Total Return Fund, Brown Advisory
Sustainable Bond Fund, Brown Advisory Maryland Bond Fund, Brown Advisory
Tax-Exempt Bond Fund, Brown Advisory Tax-Exempt Sustainable Bond Fund, and Brown
Advisory Mortgage Securities Fund, the Trust has adopted a Shareholder Servicing
Plan under which such Funds may pay a fee of up to 0.05% for shareholder
services provided to those Funds’ Investor Shares and Advisor Shares by
financial institutions, including the Adviser. The types of services for which
entities may be compensated under the terms of the Shareholder Servicing Plan
include various types of shareholder administrative support services such as
assisting shareholders with their fund accounts and records, their fund purchase
and redemption orders and other similar types of non-distribution related
services involving the administrative servicing of shareholder accounts. These
shareholder servicing fees may be increased without shareholder
approval.
Additional
Payments to Dealers
In
addition to dealer reallowances and payments made by each Fund for distribution
and shareholder servicing, the Adviser or its affiliates may make additional
payments (“Additional Payments”) to certain selling or shareholder servicing
agents for the Funds, which includes broker-dealers. The Adviser has entered
into an arrangement with its affiliated broker/dealer, Brown Advisory
Securities, LLC, through which investors may purchase or redeem Fund shares.
Accordingly, the Adviser may, out of its own resources, compensate Brown
Advisory Securities, LLC for the sales efforts of Brown Advisory Securities,
LLC. These Additional Payments are made in connection with the sale and
distribution of shares of the Funds or for services to a Fund and its
shareholders. These Additional Payments, which may be significant, are paid by
the Adviser or its affiliates, out of their revenues, which generally come
directly or indirectly from fees paid by the entire Fund complex. Such payments
by such parties
may
create an incentive for these financial institutions such as Brown Advisory
Securities, LLC to recommend that you purchase Fund shares.
In
return for these Additional Payments, the Adviser expects to receive certain
marketing or servicing advantages that are not generally available to mutual
funds that do not make such payments. Such advantages are expected to include,
without limitation, placement of the Funds on a list of mutual funds offered as
investment options to the selling agent’s clients (sometimes referred to as
“Shelf Space”); access to the selling agent’s registered representatives; and/or
ability to assist in training and educating the selling agent’s registered
representatives.
Certain
selling or shareholder servicing agents receive these Additional Payments to
supplement amounts payable by the Funds under the shareholder servicing plans.
In exchange, these agents provide services including, but not limited to,
establishing and maintaining accounts and records; answering inquiries regarding
purchases, exchanges and redemptions; processing and verifying purchase,
redemption and exchange transactions; furnishing account statements and
confirmations of transactions; processing and mailing monthly statements,
prospectuses, shareholder reports and other SEC-required communications; and
providing the types of services that might typically be provided by each Fund’s
Transfer Agent (e.g., the
maintenance of omnibus or omnibus-like accounts, the use of the National
Securities Clearing Corporation for the transmission of transaction information
and the transmission of shareholder mailings).
The
Additional Payments may create potential conflicts of interests between an
investor and a selling agent who is recommending a particular mutual fund over
other mutual funds. Before investing, you should consult with your financial
consultant and review carefully any disclosure by the selling agent as to what
monies they receive from mutual fund advisers and distributors, as well as how
your financial consultant is compensated.
More
information on the FINRA member firms that have received the Additional Payments
described in this section is available in the Statement of Additional
Information, which is on file with the SEC and is also available on the Funds’
website www.brownadvisory.com/mf/how-to-invest.
How
to Contact the Funds
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Write
to us at:
Brown
Advisory Funds
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701
Overnight
address:
Brown
Advisory Funds
c/o
U.S. Bank Global Fund Services
615
East Michigan Street, Third Floor
Milwaukee,
WI 53202-5207
Telephone
us at:
(800)
540-6807 (toll free)
Visit
our Web site at:
www.brownadvisory.com/mf |
General
Information
You
may purchase shares of a Fund class or sell (redeem) such shares on each weekday
that the New York Stock Exchange (“NYSE”) is open. Under unusual circumstances,
a Fund class may accept and process shareholder orders when the NYSE is closed
if deemed appropriate.
You
may purchase shares of a Fund class or sell (redeem) such shares at the net
asset value (“NAV”) of a share of that Fund class next calculated (or minus a
redemption/exchange fee in the case of redemptions or exchanges) after the
Transfer Agent receives your request in proper form (as described in the section
entitled “Your Account – How to Buy Shares” in this Prospectus).
When
and How NAV is Determined
A
Fund’s share price is known as its NAV. The NAV is determined by dividing the
value of a Fund’s securities, cash and other assets, minus all liabilities, by
the number of shares outstanding (assets – liabilities / number of shares =
NAV). The NAV takes into account the expenses and fees of a Fund, including
management, administration and other fees, which are accrued daily. Due to the
fact that different expenses are charged to the Institutional Shares, Investor
Shares and Advisor Shares of a Fund, the NAV of the three classes of a Fund may
vary. Each Fund’s share price is calculated as of the Funds’ close which
is the close of regular trading (generally 4:00 p.m., Eastern Time) on each day
the NYSE is open for business.
All
shareholder transaction orders received in proper form (as described below under
“How to Purchase Shares”) by the Transfer Agent, or a Financial Intermediary by
4:00 p.m., Eastern Time will be processed at that day’s NAV. Transaction orders
received after 4:00 p.m., Eastern Time will be priced at the next business day’s
NAV. A Fund’s NAV, however, may be calculated earlier if trading on the NYSE is
restricted or as permitted by the SEC. The Funds do not determine the NAV of
their shares on any day when the NYSE is not open for trading, such as weekends
and certain national holidays as disclosed in the SAI (even if there is
sufficient trading in its portfolio securities on such days to materially affect
the NAV per share). The NYSE also may be closed on national days of mourning or
due to natural disaster or other extraordinary events or emergency. Fair value
determinations may be made as described below under procedures as approved by
the Funds’ Board of Trustees. If the NYSE is closed due to inclement weather,
technology problems or any other reason on a day it would normally be open for
business, or the NYSE has an unscheduled early closing on a day it has opened
for business, each Fund reserves the right to treat such day as a business day
and accept purchase and redemption orders until, and calculate a Fund’s NAV as
of, the normally scheduled close of regular trading on the NYSE for that day, so
long as the Adviser believes there remains an adequate market to meet purchase
and redemption orders for that day. On any business day when the Securities
Industry and Financial Markets Association recommends that the bond markets
close trading early, each Fund reserves the right to close at such earlier
closing time, and therefore accept purchase and redemption orders until, and
calculate a Fund’s NAV as of, such earlier closing time.
Fair
Value Pricing. Occasionally,
reliable market quotations are not “readily available” (as such term is defined
by Rule 2a-5 under the Investment Company Act of 1940, as amended (the “1940
Act”)) or there may be events affecting the value of foreign securities or other
securities held by the Funds that occur when regular trading on foreign or other
exchanges is closed, but before trading on the NYSE is closed.
Fair
value determinations are then made in good faith in accordance with procedures
adopted by the Board.
The
Board has designated the Adviser as the Funds’ valuation designee pursuant to
Rule 2a-5 under the 1940 Act and has delegated fair value determinations to the
Adviser, subject to the supervision of the Board. The Adviser, as the valuation
designee, is responsible for periodically assessing any material risks
associated with the determination of the fair value of each Fund’s investments,
establishing and applying fair value methodologies, testing the appropriateness
of fair value methodologies and overseeing and evaluating third-party pricing
services.
The
Adviser has a pricing committee that assists it with its designated
responsibilities as valuation designee.
Valuing
securities at fair value involves greater reliance on judgment than valuing
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Your
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securities
that have readily available market quotations.
Accordingly,
there can be no assurance that the determination of a security’s fair value in
accordance with the approved valuation procedures will in fact approximate the
price at which a Fund could sell that security at that time.
Generally,
the fair value of a portfolio security or other asset shall be the amount that
the owner of the security or asset might reasonably expect to receive upon its
current sale. With respect to any portion of a Fund’s assets that are invested
in one or more open-end management investment companies that are registered
under the 1940 Act, the Fund’s net asset value is calculated based upon the net
asset values of such registered open-end management investment companies, and
the prospectuses for such companies explain the circumstances under which those
companies will use fair value pricing and the effects of using fair value
pricing.
Because
the Brown Advisory Global Leaders Fund, the Brown Advisory Sustainable
International Leaders Fund, the Brown Advisory − WMC Strategic European Equity
Fund, and the Brown Advisory Emerging Markets Select Fund may invest in
securities that are traded primarily in foreign markets, a significant gap in
time can exist between the time of a particular security’s last trade on a
foreign market, and the time at which the Funds calculate their NAV. If an event
that could materially affect the value of the Funds’ securities has occurred
between the time the securities were last traded and the time that the Funds’
calculate their NAV, the closing price of either of the Funds’ securities may no
longer reflect their market value at the time the Funds calculate their NAV. In
such a case, the Brown Advisory Global Leaders Fund, the Brown Advisory
Sustainable International Leaders Fund, the Brown Advisory − WMC Strategic
European Equity Fund, and the Brown Advisory Emerging Markets Select Fund may
use fair value methods to value such securities.
Brown
Advisory Growth Equity Fund, Brown Advisory Flexible Equity Fund, Brown Advisory
Equity Income Fund, Brown Advisory Sustainable Growth Fund, Brown Advisory
Mid-Cap Growth Fund, Brown Advisory Small-Cap Growth Fund, Brown Advisory
Small-Cap Fundamental Value Fund, Brown Advisory Sustainable Small-Cap Core
Fund, Brown Advisory Global Leaders Fund, Brown Advisory − WMC Strategic
European Equity Fund, and Brown Advisory Emerging Markets Select Fund may each
invest in the securities of smaller and/or medium companies. A Fund’s
investments in securities of smaller companies or private placements are more
likely to require a fair value determination because they are more thinly traded
and less liquid than securities of larger companies. Similarly, Brown Advisory
Flexible Equity Fund, Brown Advisory Equity Income Fund, Brown Advisory
Sustainable Growth Fund, Brown Advisory Small-Cap Fundamental Value Fund, Brown
Advisory Sustainable Small-Cap Core Fund, Brown Advisory Global Leaders Fund,
Brown Advisory − WMC Strategic European Equity Fund, and Brown Advisory Emerging
Markets Select Fund may invest in foreign securities and are more likely to
require a fair value determination because, among other things, most foreign
securities markets close before a Fund values its securities. The earlier close
of those foreign securities markets gives rise to the possibility that
significant events may have occurred in the interim.
Attempts
to determine the fair value of securities introduce an element of subjectivity
to the pricing of securities. As a result, the price of a security determined
through fair valuation techniques may differ from the price quoted or published
by other sources and may not accurately reflect the market value of the security
when trading resumes. If a reliable market quotation becomes available for a
security formerly valued through fair valuation techniques, a Fund would compare
the new market quotation to the fair value price to evaluate the effectiveness
of its fair valuation determination. If any significant discrepancies are found,
the Adviser may adjust its fair valuation procedures.
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Your
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Types
of Accounts
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Type
of Account |
Requirement |
Individual,
Sole Proprietorship and Joint Accounts
Individual
accounts and sole proprietorship accounts are owned by one person. Joint
accounts have two or more owners (tenants). |
•Instructions
must be signed by all persons required to sign exactly as their names
appear on the account
•Provide
a power of attorney or similar document for each person that is authorized
to open or transact business for the account if not a named account owner.
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Gifts
or Transfers to a Minor (UGMA, UTMA)
These
custodial accounts provide a way to give money to a child and obtain tax
benefits. |
•Depending
on state laws, you can set up a custodial account under the UGMA or the
UTMA
•The
custodian must sign instructions in a manner indicating custodial
capacity. |
Business
Entities |
•Provide
certified articles of incorporation, a government-issued business license
or certificate, partnership agreement or similar document evidencing the
identity and existence of the business entity
•Submit
a secretary’s (or similar) certificate listing the person(s) authorized to
open or transact business for the account. |
Trusts
(including corporate pension plans) |
•The
trust must be established before an account can be opened
•You
must supply documentation to substantiate existence of your organization
(i.e. Articles of Incorporation/Formation/Organization, Trust Agreements,
Partnership Agreement or other official documents).
•Remember
to include a separate sheet detailing the full name, date of birth, social
security number and permanent street address for all authorized
individuals. |
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Your
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Retirement
Accounts
You
may invest in Fund shares through an IRA account sponsored by the Adviser,
including traditional and Roth IRAs. Each Fund may also be appropriate for other
retirement plans. Before investing in any IRA or other retirement plan, you
should consult your tax adviser. Whenever making an investment in an IRA, be
sure to indicate the year in which the contribution is made.
Minimum
Investments
To
purchase shares of the Fund, you must make at least the minimum initial
investment (or subsequent investment) as shown in the table below. The minimum
investment requirements are waived for retirement plans that are qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (“IRC”) and
tax-exempt under Section 501(a) of the IRC, and plans operating consistent with
Section 403(a), 403(b), 408, 408A, 457 or 223(d) of the IRC.
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Type
of Account |
Minimum
Initial Investment |
Minimum
Additional Investment |
Institutional
Shares |
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–Standard
Accounts |
$1,000,000 |
$100 |
Investor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
Advisor
Shares |
| |
–Standard
Accounts |
$100 |
$100 |
–Traditional
and Roth IRA Accounts |
$100 |
N/A |
–Accounts
with Systematic Investment Plans |
$100 |
$100 |
–Qualified
Retirement Plans |
N/A |
N/A |
How
to Buy Shares
This
section explains how you can purchase shares of the Brown Advisory Funds. If
you’re opening a new account, an Account Application is available online at
www.brownadvisory.com/mf/how-to-invest or by calling 800-540-6807 (toll free) or
414-203-9064. For Fund shares held through brokerage and other types of
accounts, please consult your Financial Intermediary.
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Buying
Shares |
Opening
an Account |
Adding
to an Account |
Through
a Financial Intermediary |
Contact
your Financial Intermediary |
Contact
your Financial Intermediary |
By
Mail (with Check) |
–Mail
your completed application (along with other required documents as
described in the application) and a check to:
Brown
Advisory Funds
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701 |
–Write
your account number on your check
–Send
your check with (a) a completed investment slip from a prior statement or
confirmation or (b) letter of instruction to:
Brown
Advisory Funds
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701 |
By
Wire |
–Submit
your completed application (and other required documents as described in
the application). An account will be established for you and you will be
contacted with the account number.
–Instruct
your financial institution to wire your money using the instructions in
the section entitled “Your Account – How to Buy Shares – Purchase By Wire”
in this Prospectus. |
–Call
to notify us of your incoming wire
–Instruct
your financial institution to wire your money using the instructions in
the section entitled “Your Account – How to Buy Shares – Purchase By Wire”
in this Prospectus. |
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Your
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Buying
Shares |
Opening
an Account |
Adding
to an Account |
By
Telephone |
Not
accepted for initial purchases |
–If
you have telephone purchase privileges on the account, you may purchase
additional shares in the amount of $100 or more using the bank account on
record by calling 800‑540‑6807 (toll free) or
414-203-9064. |
By
Internet (must have a United States bank account) |
–Log
onto the Funds’ website at www.brownadvisory.com/mf
–Click
on “How to Invest”
–Be
prepared to have the required information to open your new
account.
–Accept
the terms of the online Account Application.
–Complete
the online Account Application.
–The
Fund will electronically deduct your purchase proceeds from the financial
institution you have identified on your Account Application.
–Note
- you may be responsible for any unauthorized Internet order as long as
the Transfer Agent has taken reasonable measures to verify that the order
is genuine.
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–Log
onto the Funds’ website at www.brownadvisory.com
–Click
on “Client Login”
–Provide
your User ID and password.
–Select
the Transaction/Purchase menu option.
–Follow
the instructions provided.
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By
Automatic Investment Plan (must have a United States bank
account) |
Not
accepted for initial purchases |
–Complete
the Automatic Investment Plan section of the application or submit a
letter of instruction if your account was opened without this being
done.
–Attach
a voided check or savings deposit slip to your application or letter of
instruction.
–Mail
the completed application or letter and voided check or savings deposit
slip.
–Your
purchase will be electronically debited from the bank account on record as
directed in your request. |
General
Notes for Buying Shares
Unless
purchased through a Financial Intermediary, all investments must be made by
check, ACH, or wire. All checks must be payable in U.S. dollars and drawn
on U.S. financial institutions. In the absence of the granting of an
exception consistent with the Trust’s anti-money laundering procedures, the Fund
does not accept purchases made by credit card check, starter check, third-party
check, cash or cash equivalents (for instance, you may not pay by money order or
traveler’s check). The Funds are unable to accept post‑dated checks or any
conditional order or payment.
–Checks
for all accounts, including individual, sole proprietorship, joint, Uniform
Gifts to Minors Act (“UGMA”) or Uniform Transfers to Minors Act (“UTMA”)
accounts, the check must be made payable to “Brown Advisory Funds.” A $25 charge
may be imposed on any returned payment; you will also be responsible for any
losses suffered by the Fund as a result.
–ACH
(must have a United States bank account) refers to the “Automated Clearing
House” System maintained by the Federal Reserve Bank, which allows banks to
process checks, transfer funds and perform other tasks. Your financial
institution may charge you a fee for this service. A $25 charge may be imposed
on any rejected transfers; you will also be responsible for any losses suffered
by the Fund as a result.
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Your
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–Wires
instruct your financial institution with whom you have an account to make a
Federal Funds wire payment to us. Your financial institution may charge you a
fee for this service.
Purchase
through Financial Intermediaries. You
may buy and sell shares of the Funds through certain financial intermediaries
and their agents that have made arrangements with the Funds and are authorized
to buy and sell shares of the Funds (collectively, “Financial Intermediaries”).
Your order will be priced at a Fund’s NAV next computed after it is received by
a Financial Intermediary, or if applicable, a Financial Intermediary’s designee.
A Financial Intermediary may hold your shares in an omnibus account in the
Financial Intermediary’s name and the Financial Intermediary may maintain your
individual ownership records. The Funds may pay the Financial Intermediary for
maintaining individual ownership records as well as providing other shareholder
services. Financial Intermediaries may charge fees for the services they provide
to you in connection with processing your transaction order or maintaining your
account with them. Financial Intermediaries are responsible for placing your
order correctly and promptly with the Funds, forwarding payment promptly, as
well as ensuring that you receive copies of the Funds’ Prospectus. If you
transmit your order with these Financial Intermediaries before the close of
regular trading (generally 4:00 p.m., Eastern Time) on a day that the NYSE is
open for business, your order will be priced at the Funds’ NAV next computed
after it is received by the Financial Intermediary. Investors should check with
their Financial Intermediary to determine if it is subject to these
arrangements.
Institutional
Shares may also be available on certain brokerage platforms. An investor
transacting in Institutional Shares through a broker that is acting as an agent
for the investor may be required by such broker to pay a separate commission
and/or other forms of compensation to their broker. Such broker commissions are
not reflected in each Fund’s fee table or expense examples.
Purchase
by Mail. Follow
the instructions outlined in the table above. The Funds do not consider the U.S.
Postal Service or other independent delivery services to be their agents.
Therefore, deposits in the mail or with such services, or receipt at the
Transfer Agent’s post office box of purchase orders or redemption requests, do
not constitute receipt by the Transfer Agent. Receipt will be deemed to occur
when the Transfer Agent physically picks up such mailings.
Purchase
by Wire.
If you are making your first investment in one of the Funds, before you wire
funds, please contact the Transfer Agent by phone to make arrangements with a
telephone service representative to submit your completed Account Application
via mail, overnight delivery or facsimile. Upon receipt of your completed
application, your account will be established and a service representative will
contact you to provide your new account number and wiring instructions. If you
do not receive this information within one business day, you may call the
Transfer Agent at 1-800-540-6807 (toll free) or 414-203-9064. Once your account
has been established, you may instruct your bank to initiate the wire using the
instructions you were given.
For
either initial or subsequent investments, prior to sending the wire, please call
the Transfer Agent at 1‑800‑540‑6807 (toll free) or 414-203-9064 to advise the
Transfer Agent of your wire to ensure proper credit upon receipt. Your bank must
include the name of the Fund, your name and account number so that your wire can
be correctly applied.
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Instruct
your bank to send the wire to: |
U.S. Bank,
N.A.
777
East Wisconsin Avenue
Milwaukee,
Wisconsin 53202
ABA
#075000022
Credit:
U.S. Bancorp Fund Services, LLC
Account
#112-952-137
Further
Credit: Brown Advisory Funds, [Insert Fund Name and Class]
(Shareholder
Name, Shareholder Account #) |
Your
bank may impose a fee for investments by wire. Wired funds must be received
prior to 4:00 p.m., Eastern Time, to be eligible for same day pricing. The
Funds and the Transfer Agent are not responsible for the consequences of delays
resulting from the banking or Federal Reserve wire system or from incomplete
wiring instructions. If you have questions about how to invest by wire, you may
call the Funds at 1‑800‑540‑6807 (toll free) or 414-203-9064.
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Your
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Purchase
by Telephone. If
your account has been open for at least 7 business days, and you did not decline
telephone privileges on your Account Application, you may purchase additional
shares in the amount of $100 or more from your bank account upon request by
telephoning the Transfer Agent toll free at 1‑800‑540‑6807 (toll free) or
414-203-9064. You may not make your initial purchase of a Fund’s shares by
telephone. Telephone orders will be accepted via electronic funds transfer from
your pre-designated bank account through the Automated Clearing House (“ACH”)
network. You must have banking information established on your
account prior to making a purchase. Only bank accounts held at domestic
institutions that are ACH members may be used for telephone transactions. If
your order is received prior to 4:00 p.m. Eastern Time, shares will be
purchased at the price next calculated on that date. For security reasons,
requests by telephone may be recorded.
Purchase
by Internet (must have a United States bank account). You
will automatically receive online privileges when you open your account,
allowing you to obtain or view your account information, and conduct a number of
transactions online, including: buy or sell shares of the Fund; use electronic
funds transfer to buy or sell shares of the Fund.
To
view your account information or request online transactions, you will first
need to register for these services at the shareholder section of our website at
www.brownadvisory.com/mf. You will be asked to accept the terms of an online
agreement(s) and establish a password for online services. Using our shareholder
website means you are consenting to sending and receiving personal financial
information over the Internet, so you should be sure you are comfortable with
the associated risks.
As
long as we follow reasonable security procedures and act on instructions we
reasonably believe are genuine, we will not be responsible for any losses that
may occur from unauthorized requests. We will request passwords or other
information, and may also record calls. To help safeguard your account, keep
your password confidential and verify the accuracy of your confirmation
statements immediately after you receive them. Contact us immediately if you
believe someone has obtained unauthorized access to your account or password.
For transactions done over the Internet, we recommend the use of an Internet
browser with 128-bit encryption. Certain methods of contacting us (such as by
Internet) may be unavailable or delayed during periods of unusual market
activity.
You
can choose not to register for online privileges. If you have online privileges
on your account and want to discontinue them, please contact us for
instructions. You may reinstate these privileges at any time in
writing.
Automatic
Investment Plan (must have a United States bank account).
For your convenience, the Funds offer an Automatic Investment Plan (“AIP”).
Under the AIP, after you make your initial investment, you may authorize a Fund
to withdraw automatically from your personal checking or savings account an
amount that you wish to invest, which must be at least $100 on a monthly or
quarterly basis. If you wish to enroll in the AIP, complete the “Automatic
Investment Plan” section in the Account Application or call the Transfer Agent
at 1‑800‑540‑6807 (toll free) or 414-203-9064 for additional information. In
order to participate in the AIP, your bank or financial institution must be a
member of the ACH network. The Funds may terminate or modify this privilege at
any time. You may terminate your participation in the AIP at any time by
notifying the Transfer Agent at least five days prior to the effective date. A
fee ($25) will be charged if your bank does not honor the AIP draft for any
reason.
The
AIP is a method of using dollar cost averaging as an investment strategy that
involves investing a fixed amount of money at regular time intervals. However, a
program of regular investment cannot ensure a profit or protect against a loss
as a result of declining markets. By continually investing the same amount, you
will be purchasing more shares when the price is low and fewer shares when the
price is high. Please call 1‑800‑540‑6807 (toll free) or 414-203-9064 for
additional information regarding the Funds’ AIP.
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Your
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How
to Sell Shares
Each
Fund processes redemption orders received in good order, promptly. The
Fund typically expects that it will take one to three days following the receipt
of your redemption request to pay out redemption proceeds; however, while not
expected, payment of redemption proceeds may take up to seven days. If a Fund
class has not yet collected payment for the shares you are selling, it may delay
sending redemption proceeds until it receives payment, which may be up to 15
calendar days.
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Selling
Shares |
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Through
a Financial Intermediary |
• Contact
your Financial Intermediary |
By
Mail |
• Prepare
a written request including:
• Your
name(s) and signature(s)
• Your
account number
• The
Fund name and class
• The
dollar amount or number of shares you want to sell
• How
and where to send the redemption proceeds
• Obtain
a signature guarantee (if required) (See the section entitled “Signature
Guarantee Requirements below”)
• Obtain
other documentation (if required)
• Mail
us your request and documentation. |
By
Wire |
• Wire
redemptions are only available if you did not decline telephone and
Internet options on your Account Application and you provided a voided
check or savings deposit slip
• Call
us with your request (unless you declined telephone and Internet options
on your Account Application) (See the section entitled “By Telephone”)
or
• Mail
us your request (See the section entitled “By Mail”). |
By
Telephone |
• Call
us with your request (unless you declined telephone and Internet options
on your Account Application)
• Provide
the following information:
• Your
account number
• Exact
name(s) in which the account is registered
• Additional
form of identification
• Redemption
proceeds will be:
• Mailed
to you or
• Electronically
credited to your account at the financial institution identified on your
Account Application. |
By
Internet |
• Log
onto the Funds’ website at www.brownadvisoryfunds.com
• Click
on “Client Login”
• Provide
your User ID and password.
• Select
the Transaction/Redemption menu option.
• Follow
the instructions provided.
• Note
– you may be responsible for any unauthorized Internet order as long as
the Transfer Agent has taken reasonable measures to verify that the order
is genuine. |
Systematically |
• Complete
the systematic withdrawal program section of the application
• Attach
a voided check or savings deposit slip to your application
• Mail
us your completed application
• Redemption
proceeds will be electronically credited to your account at the financial
institution identified on your Account Application or sent by check to
your address of record. |
General
Notes for Selling Shares
In
general, orders to sell or “redeem” shares may be placed either directly with
the Funds, the Transfer Agent or with your Financial Intermediary. You may
redeem part or all of a Fund’s shares at the next determined NAV after the Fund
receives your order. You should request your redemption prior to the close of
the applicable Fund, generally 4:00 p.m., Eastern Time, to obtain that day’s
closing NAV. Redemption requests received after the close of the NYSE will be
treated as though received on the next business day.
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Through
a Financial Intermediary.
You may redeem Fund shares through your Financial Intermediary. Redemptions made
through a Financial Intermediary may be subject to procedures established by
that institution. Your Financial Intermediary is responsible for sending your
order to the Fund and for crediting your account with the proceeds. For
redemption through Financial Intermediaries, orders will be processed at the NAV
per share next effective after receipt of the order by the Financial
Intermediary. Please keep in mind that your Financial Intermediary may charge
additional fees for its services. Investors should check with their Financial
Intermediary to determine if it is subject to these arrangements.
By
Mail.
You may redeem Fund shares by simply sending a written request to the Transfer
Agent. Please provide the name of the Fund, account number and state the number
of shares or dollar amount you would like redeemed. The letter should be signed
by all shareholders whose names appear on the account registration with a
signature guarantee, if applicable. Redemption requests will not become
effective until all documents have been received in good form by the Fund.
Additional documents are required for certain types of shareholders, such as
corporations, partnerships, executors, trustees, administrators, or guardians
(i.e., corporate
resolutions, or trust documents indicating proper authorization). Shareholders
should contact the Fund for further information concerning documentation
required for redemption of Fund shares.
Shareholders
who have an IRA or other retirement plan must indicate on their written
redemption request whether or not to withhold federal income tax. Redemption
requests failing to indicate an election not to have tax withheld will generally
be subject to a 10% withholding tax.
Shares
held in IRA accounts or other retirement plan accounts may be redeemed by
telephone at 1-800-540-6807. Investors will be asked whether or not to withhold
taxes from any distribution.
Telephone
or Wire Redemption.
You may redeem Fund shares by telephone unless you declined telephone privileges
on your Account Application. You may also request telephone privileges after
your account is opened by calling the Transfer Agent at 1‑800‑540‑6807 (toll
free) or 414-203-9064 for additional information. A signature guarantee or a
signature verification from a Signature Validation Program member or other
acceptable form of authentication from a financial institution source may be
required of shareholders in order to qualify for or to change telephone
privileges on an existing account. During periods of high market activity, you
may encounter higher than usual wait times. Please allow sufficient time to
ensure that you will be able to complete your telephone transaction prior to
market close. If you are unable to contact the Transfer Agent by telephone, you
may also mail the requests to the Funds at the address listed under “Contacting
the Funds.” Once a telephone transaction has been placed, it cannot be canceled
or modified after the close of regular trading on the NYSE (generally, 4:00
p.m., Eastern time).
You
may redeem Fund shares by calling the Transfer Agent at 1‑800‑540‑6807 (toll
free) or 414-203-9064 prior to the close of the applicable Fund, generally 4:00
p.m., Eastern Time. Redemption proceeds will be sent on the next business day to
the mailing address that appears on the Fund’s records. Per your request,
redemption proceeds may be wired or may be sent by electronic funds transfer via
the ACH network to your pre-designated bank account. The Transfer Agent will
charge a $15 wire fee from your redemption proceeds from any complete share
redemption. For partial redemptions, or share specific redemptions, any wire fee
will be deducted from your remaining account balance. You will not incur any
charge when proceeds are sent via the ACH network; however, most ACH transfers
require two days for the bank account to receive credit. Telephone redemptions
cannot be made if you notify the Transfer Agent of a change of address within
30 days before the redemption request.
Prior
to executing instructions received to redeem shares by telephone, the Funds will
use reasonable procedures to confirm that the telephone instructions are
genuine. If an account has more than one owner or authorized person, the Fund
will accept telephone instructions from any one owner or authorized person. The
telephone call may be recorded and the caller may be asked to verify certain
personal identification information. If the Funds or their agents follow these
procedures, they cannot be held liable for any loss, expense, or cost arising
out of any telephone redemption request that is reasonably believed to be
genuine. This includes any fraudulent or unauthorized request. The Funds may
change, modify or terminate these privileges at any time upon at least a 60-day
notice to shareholders.
Systematic
Withdrawal Program (must have a United States bank account).
The Funds offer a Systematic Withdrawal Program (“SWP”) whereby shareholders or
their representatives may request a redemption in a predetermined amount each
month, calendar quarter or annually. Proceeds can be sent via check to the
address on the account or proceeds can be sent by electronic funds transfer via
the ACH network to a designated bank account. To start this program, your
account must have Fund shares with a value of at least $2,500, and the minimum
amount that may be withdrawn each month, quarter or annually is $50.
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This
program may be terminated or modified by a Fund at any time. You may also elect
to terminate your participation in the SWP at any time by contacting the
Transfer Agent at least five calendar days prior to the next scheduled
withdrawal.
A
withdrawal under the SWP involves a redemption of Fund shares, and may result in
a gain or loss for Federal income tax purposes. In addition, if the amount
withdrawn exceeds the dividends credited to your account, the account ultimately
may be depleted. To establish the SWP, complete the SWP section of the Account
Application. Please call 1‑800‑540‑6807 (toll free) or 414-203-9064 for
additional information regarding the SWP.
Exchange
Privileges
You
may exchange your Fund shares for the same class of shares of certain other
Brown Advisory Funds. Be sure to confirm with the Transfer Agent that the Fund
into which you exchange is available for sale in your state. To obtain the
necessary exchange authorization forms, call the Transfer Agent at
1‑800‑540‑6807 (toll free) or 414-203-9064. Not all Funds available for
exchange may be available for purchase in your state. Because exchanges are a
sale and purchase of shares, they may have tax consequences.
If
you exchange Fund shares 14 days or less from the date of purchase, you
will be charged a redemption fee of 1.00% of the current NAV of shares redeemed
or exchanged, subject to limited exceptions. Please see the section entitled
“Your Account – Account and Transaction Policies – Redemption/Exchange Fee” for
additional information.
Requirements. You
may make exchanges only between identically registered accounts (name(s),
address, and taxpayer ID number). There is currently no limit on exchanges, but
each Fund reserves the right to limit exchanges (see the section entitled “Tools
to Combat Frequent Transaction”). You may exchange your shares by mail or
telephone, unless you declined telephone privileges on your Account Application.
You may be responsible for any unauthorized telephone order as long as the
transfer agent takes reasonable measures to verify that the order is
genuine.
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Exchanging
Shares |
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Through
a Financial Intermediary |
•Contact
your Financial Intermediary |
By
Mail |
•Prepare
a written request including:
•Your
name(s) and signature(s)
•Your
account number
•The
names of each fund (and class) you are exchanging
•The
dollar amount or number of shares you want to sell (and
exchange)
•Open
a new account and complete an Account Application if you are requesting
different shareholder privileges
•Mail
us your request and documentation. |
By
Telephone |
•Call
us with your request (unless you declined telephone and Internet options
on your Account Application)
•Provide
the following information:
•Your
account number
•Exact
name(s) in which account is registered
•Additional
form of identification. |
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Account
and Transaction Policies
Redemption/Exchange
Fee.
The sale of Fund shares is subject to a redemption fee of 1.00% of the current
NAV of shares redeemed or exchanged 14 days or less from the date of
purchase. Each Fund uses the “first in first out” (“FIFO”) method to determine
the holding period; this means that if you purchase shares on different days,
the shares you held longest will be redeemed first for purposes of determining
whether the short-term trading fee applies. The redemption/exchange fee is
charged for the benefit of its long-term shareholders and is deducted from your
proceeds and retained by the Fund to help offset transaction costs. Each Fund
reserves the right to waive redemption/exchange fees, withdraw exceptions, or
otherwise modify the terms of the redemption/exchange fee at its discretion at
any time, to the extent permitted by law.
There
are limited exceptions to the imposition of the redemption fee. The following
redemptions are exempt from application of the redemption fee:
•Redemptions
in a deceased shareholder account if such an account is registered in the
deceased’s name;
•Redemptions
in the account of a disabled individual (disability of the shareholder as
determined by the Social Security Administration);
•Redemptions
of shares purchased through a dividend reinvestment program;
•Redemptions
pursuant to the Funds’ systematic programs; or
•Redemptions
in qualified retirement plans under Section 401(a) of the Internal Revenue
Code (“IRC”), and plans operating consistent with 401(k), 403(a), 403(b), 408,
408A, 457, and 223(d) of the IRC.
Although
the Funds have the goal of applying this redemption/exchange fee to most
redemptions of shares held for 14 days or less, the Funds may not always be able
to track short-term trading effected through Financial Intermediaries in
non-disclosed or omnibus accounts. While the Funds have entered into information
sharing agreements with such Financial Intermediaries as described under “Tools
to Combat Frequent Transactions” which contractually require such Financial
Intermediaries to provide the Funds with information relating to its customers
investing in a Fund through non-disclosed or omnibus accounts, the Funds cannot
guarantee the accuracy of the information provided to them from Financial
Intermediaries and may not always be able to track short-term trading effected
through these Financial Intermediaries. In addition, because the Funds are
required to rely on information provided by the Financial Intermediary as to the
applicable redemption/exchange fee, the Funds cannot ensure that the Financial
Intermediary is always imposing such fee on the underlying shareholder in
accordance with the Funds’ policies.
Tools
to Combat Frequent Transactions.
The Funds are intended for long-term investors and do not accommodate frequent
transactions. Short-term “market-timers” who engage in frequent purchases and
redemptions can disrupt a Fund’s investment program and create additional
transaction costs that are borne by all of a Fund’s shareholders. The Board has
adopted policies and procedures that are designed to discourage excessive,
short-term trading and other abusive trading practices that may disrupt
portfolio management strategies and harm performance. In addition, the Funds
discourage excessive, short-term trading and other abusive trading practices and
the Funds may use a variety of techniques to monitor trading activity and detect
abusive trading practices. These steps may include, among other things, the
imposition of redemption fees, if applicable, monitoring trading activity, or
using fair value pricing when appropriate, under procedures as adopted by the
Board when the Adviser or Wellington Management, subject to the Adviser’s
approval, determines current market prices are not readily available. As
approved by the Board, these techniques may change from time to time as
determined by the Funds in their sole discretion.
In
an effort to discourage abusive trading practices and minimize harm to a Fund
and its shareholders, the Funds reserve the right, in their sole discretion, to
reject any purchase order, in whole or in part, for any reason (including,
without limitation, purchases by persons whose trading activity in Fund shares
is believed by the Adviser to be harmful to the Funds) and without prior notice.
The Funds may decide to restrict purchase and sale activity in its shares based
on various factors, including whether frequent purchase and sale activity will
disrupt portfolio management strategies and adversely affect a Fund’s
performance. Although these efforts are designed to discourage abusive trading
practices, these tools cannot eliminate the possibility that such activity will
occur. The Funds seek to exercise their judgment in implementing these tools to
the best of its ability in a manner that it believes is consistent with
shareholder interests. Except as noted in the Prospectus, the Funds apply all
restrictions uniformly in all applicable cases.
Due
to the complexity and subjectivity involved in identifying abusive trading
activity and the volume of shareholder transactions the Funds handle, there can
be no assurance that the Funds’ efforts will identify all trades or trading
practices that may be considered abusive. In particular, since the Funds receive
purchase and sale orders through Financial Intermediaries that use group or
omnibus accounts, the Funds cannot always detect frequent trading. However, the
Funds will work with Financial
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Intermediaries
as necessary to discourage shareholders from engaging in abusive trading
practices and to impose restrictions on excessive trades. In this regard, the
Funds have entered into information sharing agreements with Financial
Intermediaries pursuant to which these intermediaries are required to provide to
the Funds, at the Funds’ request, certain information relating to their
customers investing in the Funds through non-disclosed or omnibus accounts. The
Funds will use this information to attempt to identify abusive trading
practices. Financial Intermediaries are contractually required to follow any
instructions from the Funds to restrict or prohibit future purchases from
shareholders that are found to have engaged in abusive trading in violation of
the Funds’ policies. However, the Funds cannot guarantee the accuracy of the
information provided to them from Financial Intermediaries and cannot ensure
that they will always be able to detect abusive trading practices that occur
through non-disclosed and omnibus accounts. As a consequence, the Funds’ ability
to monitor and discourage abusive trading practices in omnibus accounts may be
limited.
Proceeds.
You may receive proceeds of your sale in a check, ACH, or federal wire transfer.
Each Fund typically expects that it will take one to three days following the
receipt of your redemption request to pay out redemption proceeds; however,
while not expected, payment of redemption proceeds may take up to seven days.
Each Fund typically expects that it will hold cash or cash equivalents to meet
redemption requests. The Funds may also use the proceeds from the sale of
portfolio securities to meet redemption requests if consistent with the
management of the Fund. These redemption methods will be used regularly and may
also be used in stressed market conditions. The Funds reserve the right to
redeem in-kind as described under “Redemption In-Kind” below. Redemptions
in-kind are typically used to meet redemption requests that represent a large
percentage of a Fund’s net assets in order to minimize the effect of large
redemptions on the Fund and its remaining shareholders. Redemptions in-kind may
be used regularly in circumstances as described above, and may also be used in
stressed market conditions. The Funds have a line of credit in place that may be
used to meet redemption requests during stressed market conditions.
Share
Class Conversion within Certain Intermediary Accounts. Investors
who hold shares of a Fund through a fee-based program at a financial
intermediary but who subsequently become ineligible to participate in the
program, withdraw from the program, or change to a non-fee based program, may be
subject to conversion of their shares by their financial intermediary to another
class of shares of the Fund having expenses (potentially including Rule 12b-1
fees) that may be higher than the expenses of their original class of shares.
Investors should contact their financial intermediary to obtain information
about their eligibility for the intermediary’s program, whether the intermediary
prescribes any circumstances which may result in the type of share class
conversion described herein, and the class of shares they would receive upon
such a conversion. A conversion from one share class to another share class of
the same Fund should generally not be a taxable exchange for Federal income tax
purposes. Any such conversion by a financial
intermediary
will be made in accordance with the terms of the Prospectus, and investors would
not be charged a redemption/exchange fee by the Fund in connection with such a
conversion.
Check
and ACH Clearance.
The proceeds from a redemption request may be delayed up to 15 calendar days
from the date of the receipt of a purchase by check or electronic funds transfer
through the ACH network until the payment for the purchase clears. If the
purchase amount does not clear, you will be responsible for any losses suffered
by the relevant Fund as well as a $25 service charge imposed by the Transfer
Agent. This delay can be avoided by purchasing shares by wire.
Suspension
of Redemptions.
We may temporarily suspend the right of redemption or postpone payments under
certain emergency circumstances or when the SEC orders a
suspension.
Signature
Guarantees.
The Transfer Agent may require a signature guarantee for certain requests. A
signature guarantee assures that your signature is genuine and protects you from
unauthorized account transactions. A signature guarantee, from either a
Medallion program member or a non-Medallion program member, of each owner is
required in the following situations:
•When
a redemption is received by the Transfer Agent and the account address has
changed within the last 30 calendar days;
•When
requesting a change in ownership on your account; or
•When
redemption proceeds are payable or sent to any person, address or bank account
not on record.
In
addition to the situations described above, a Fund and/or the Transfer Agent may
require a signature guarantee in other instances based on the circumstances
relative to the particular situation. Non-financial transactions including
establishing or modifying certain services on an account may require a signature
guarantee, signature verification from a Signature Validation Program member, or
other acceptable form of authentication from a financial institution source.
Signature guarantees will generally be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges, registered securities
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associations,
clearing agencies and savings associations, as well as from participants in the
New York Stock Exchange Medallion Signature Program and the Securities Transfer
Agents Medallion Program (“STAMP”). A notary public is not an acceptable
signature guarantor.
The
Funds reserve the right to waive any signature requirement at their
discretion.
Customer
Identification Program.
Please note that, in compliance with the USA PATRIOT Act of 2001, the Transfer
Agent will verify certain information on your Account Application as part of the
Funds’ Anti-Money Laundering Program. As requested on the Account Application,
you must supply your full name, date of birth, social security number and
permanent street address. If you are opening the account in the name of a legal
entity (e.g.,
partnership, limited liability company, business trust, corporation,
etc.),
you must also supply the identity of the beneficial owners. Mailing addresses
containing only a P.O. Box will not be accepted. If you do not supply the
necessary information, the Transfer Agent may not be able to open your account.
Please contact the Transfer Agent at 1‑800‑540‑6807 (toll free) or 414-203-9064
if you need additional assistance when completing your application. If the
Transfer Agent is unable to verify your identity or that of another person
authorized to act on your behalf, or if it believes it has identified
potentially criminal activity, each Fund reserves the right to temporarily limit
additional share purchases, close your account or take any other action they
deem reasonable or required by law. The Trust has appointed an Anti-Money
Laundering Officer to oversee the operation of and compliance with the Trust’s
Anti-Money Laundering Program.
No
Certificates.
The Funds do not issue share certificates.
Right
to Reject Purchases. Each
Fund reserves the right to reject or cancel within one business day, without any
prior notice, any purchase order, including transactions that, in the judgment
of the Adviser or Sub-Adviser, represent excessive trading, may be disruptive to
the management of a Fund’s portfolio, may increase a Fund’s transaction costs,
administrative costs or taxes, and those that may otherwise be detrimental to
the interests of the Funds and their shareholders. The purpose of such action is
to limit increased Fund expenses incurred when certain investors buy and sell
shares of a Fund for the short-term when the markets are highly volatile. Each
Fund’s right to cancel or revoke such purchase orders would be limited to within
one business day following receipt by the Fund of such purchase
orders.
Redemption
In-Kind.
Each Fund generally pays redemption proceeds in cash. However, the Funds reserve
the right to pay redemption proceeds to you by a distribution of liquid
securities from a Fund’s portfolio (a “redemption in-kind”). It is not expected
that a Fund would do so except during unusual market conditions. If a Fund pays
your redemption proceeds by a distribution of liquid securities, you could incur
brokerage or other charges in subsequently converting the securities to cash and
will bear any market risks associated with such securities until they are
converted into cash. The securities delivered in a redemption in-kind
transaction will be selected in the sole discretion of the Fund and will not
necessarily be representative of the Fund’s entire portfolio and they will be
valued in the same manner that the Fund’s portfolio securities are valued for
purposes of calculating the Fund’s NAV. A redemption in-kind is treated as a
taxable transaction and a sale of the redeemed shares, generally resulting in
capital gain or loss to you, subject to certain loss limitation
rules.
Small
Accounts.
To reduce our expenses, if the value of your account falls below $1,000
(excluding Qualified Retirement Accounts) with respect to Institutional Shares,
or $500 (excluding Qualified Retirement Accounts) with respect to Advisor Shares
and Investor Shares, the Fund may ask you to increase your balance. If after
60 days, the account value is still below $1,000 (excluding Qualified
Retirement Accounts) for Institutional Shares, or $500 (excluding Qualified
Retirement Accounts) for Advisor Shares and Investor Shares, the applicable
Fund may close your account and send you the proceeds. The Fund will not close
your account if it falls below these amounts solely as a result of a reduction
in your account’s market value. There are no minimum balance requirements for
Qualified Retirement Accounts.
Internet
Transactions. You
may open a Fund account as well as purchase or sell Fund shares online at
www.brownadvisory.com/mf. Establishing an account online is permitted only for
individual, IRA, joint and UGMA/UTMA accounts. If you conduct transactions or
open an account online, you are consenting to sending and receiving personal
financial information over the Internet.
Electronic
Delivery. Consistent
with the Funds’ commitment to environmental sustainability, you may sign up to
receive daily transaction confirmations, quarterly statements, and tax form
statements electronically. You may also sign up to receive the
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Funds’
financial statements and Prospectuses electronically on
www.brownadvisory.com/mf. You may change your delivery preference and resume
receiving these documents through the mail at any time by updating your
electronic delivery preferences on www.brownadvisory.com/mf or contacting the
Funds at 1‑800‑540‑6807 (toll free) or 414-203-9064.
Householding.
In an effort to decrease costs, the Funds will reduce the number of duplicate
Prospectuses and other similar documents that you receive by sending only one
copy of each to those addresses shown by two or more accounts. Please call the
Transfer Agent toll free at 1‑800‑540‑6807 to request individual copies of these
documents. The Funds will begin sending individual copies 30 days after
receiving your request. This policy does not apply to account
statements.
Confirmations.
If
you purchase shares directly from any Fund, you will receive a confirmation
statement detailing the transaction. Automatic reinvestments of distributions
may be confirmed via a monthly or quarterly statement. Systematic
investments/withdrawals will be confirmed only on a quarterly statement. You may
consent to receive confirmations and quarterly statements electronically at
www.brownadvisory.com/mf,
otherwise your confirmation and quarterly statements will be sent in the mail.
You should verify the accuracy of all transactions in your account as soon as
you receive your confirmations and quarterly statements.
Portfolio
Holdings. A
description of each Fund’s policies and procedures with respect to the
disclosure of portfolio securities is available in the Funds’ SAI.
Policy
on Prohibition of Foreign Shareholders.
Shares of the Fund have not been registered for sale outside of the United
States. Accordingly, the Fund generally requires that all shareholders must be
U.S. persons with a valid U.S. taxpayer identification number to open an account
with the Fund. The Fund generally does not sell shares to investors residing
outside the United States, even if they are United States citizens or lawful
permanent residents, except to investors with United States military APO or FPO
addresses, investors who are clients of the Adviser or its affiliates, or other
investors meeting eligibility requirements as determined by the Adviser. The
Fund reserves the right to close the account within 5 business days if
clarifying information or documentation is not received.
Canceled
or Failed Payments.
Each Fund accepts checks and ACH transfers at full value subject to collection.
If a Fund does not receive your payment for shares or you pay with a check or
ACH transfer that does not clear, your purchase will be canceled within 2
business days of bank notification. You will be responsible for any actual
losses or expenses incurred by a Fund or the Transfer Agent as a result of the
cancellation, and the Fund may redeem shares you own in the account (or another
identically registered account that you maintain with the Transfer Agent) as
reimbursement. Each Fund and its agents have the right to reject or cancel any
purchase or exchange (purchase side only) due to nonpayment.
Lost
Shareholders, Inactive Accounts and Unclaimed Property. It
is important that the Funds maintain a correct address for each shareholder.
An incorrect address may cause a shareholder’s account statements and
other mailings to be returned to the Funds. Based upon statutory
requirements for returned mail, the Funds will attempt to locate the shareholder
or rightful owner of the account. If the Funds are unable to locate the
shareholder, then it will determine whether the shareholder’s account can
legally be considered abandoned. Your mutual fund account may be
transferred to the state government of your state of residence if no activity
occurs within your account during the “inactivity period” specified in your
state’s abandoned property laws. The Funds are legally obligated to
escheat (or transfer) abandoned property to the appropriate state’s unclaimed
property administrator in accordance with statutory requirements. The
shareholder’s last known address of record determines which state has
jurisdiction. Please proactively contact the Transfer Agent at 800-540-6807
(toll free) or 414-203-9064 at least annually to ensure your account remains in
active status.
If
you are a resident of the state of Texas, you may designate a representative to
receive notifications that, due to inactivity, your mutual fund account assets
may be delivered to the Texas Comptroller. Please contact the Transfer
Agent if you wish to complete a Texas Designation of Representative
form.
Additional
Information
The
Trust enters into contractual arrangements with various parties, including among
others, the Funds’ investment adviser, investment sub-advisers, principal
underwriter, custodian, administrator and transfer agent who provide services to
the Funds. Shareholders are not parties to any such contractual arrangements or
intended beneficiaries of those contractual arrangements, and
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those
contractual arrangements are not intended to create in any shareholder any right
to enforce them against the service providers or to seek any remedy under them
against the service providers, either directly or on behalf of the Trust.
This
prospectus provides information concerning the Funds that you should consider in
determining whether to purchase Fund shares. Neither this prospectus, the
Statement of Additional Information, any documents filed as exhibits, nor any
other communications, disclosure documents or regulatory filings from or on
behalf of the Trust or a Fund is intended, or should be read, to be or give rise
to an agreement or contract between the Trust, the Trustees or any Fund and any
investor, or to give rise to any rights in any shareholder or other person other
than any rights under federal or state law that may not be waived.
Distributions
Each
Fund declares distributions from net investment income, if any, at least
annually (at least monthly for the Brown Advisory Intermediate Income Fund, the
Brown Advisory Total Return Fund, Brown Advisory Sustainable Bond Fund and the
Brown Advisory Mortgage Securities Fund); and at least quarterly for the Brown
Advisory Equity Income Fund. The Brown Advisory Maryland Bond Fund, the Brown
Advisory Tax-Exempt Bond Fund and the Brown Advisory Tax-Exempt Sustainable Bond
Fund will declare distributions from net investment income, if any, on a daily
basis, with the distributions payable each month. Any net capital gain realized
by a Fund will be distributed at least annually. A Fund may make an additional
payment of dividends or distributions if it deems it desirable at other times
during any year.
All
distributions of each Fund are reinvested in additional shares, unless you
choose one of the following options:
(1)receive
dividends in cash, while reinvesting capital gain distributions in additional
Fund shares;
(2)receive
all distributions in cash; or
(3)reinvest
dividends in additional Fund shares while receiving capital gain distributions
in cash.
You
may change your dividend and capital gain distribution election in writing or by
calling the Transfer Agent in advance of the next distribution.
For
Federal income tax purposes, distributions are treated the same whether they are
received in cash or reinvested. Shares become entitled to receive distributions
on the day after the shares are issued.
If
an investor elects to receive distributions in cash and the U.S. Postal Service
cannot deliver your check, or if a check remains uncashed for six months, the
Funds reserve the right to reinvest the distribution check in the shareholder’s
account at the Fund’s then current NAV and to reinvest all subsequent
distributions.
Taxes
Each
Fund intends to continue to qualify to be taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
“Code”). As a regulated investment company, each Fund generally will not be
subject to tax if it distributes its income as required by the tax law and
satisfies certain other requirements that are described in the SAI.
You
will generally be taxed on a Fund’s taxable distributions, regardless of whether
you reinvest them or receive them in cash. A Fund’s taxable distributions of net
investment income and short-term capital gains, if any, are taxable to you as
ordinary income. The Fund’s distributions of long-term capital gains, if any,
are taxable to you as long-term capital gains, regardless of how long you have
held your shares. Distributions may also be subject to certain state and local
taxes. Some Fund distributions may also include nontaxable returns of capital.
Return of capital distributions reduce your tax basis in your Fund shares and
are treated as gain from the sale of the shares to the extent your basis would
be reduced below zero.
A
portion of the Fund’s taxable distributions may be treated as “qualified
dividend income,” taxable to individuals at a maximum federal tax rate of 15% or
20%, depending on whether the individual’s income exceeds certain threshold
amounts. A distribution may be treated as qualified dividend income to the
extent that the Fund receives dividend income from taxable domestic corporations
and certain qualified foreign corporations, provided that certain holding period
and other requirements are met by the Fund and the shareholder. To the
extent the Fund’s distributions are attributable to other sources, such as
interest or capital gains, the distributions are not treated as qualified
dividend income. The Fund’s distributions of dividends that it receives
from REITs generally do not constitute “qualified dividend income.”
The
maximum federal tax rate for individual taxpayers applicable to long-term
capital gains and income from certain qualifying dividends on certain corporate
stock is generally either 15% or 20%, depending on whether the individual’s
income exceeds certain threshold amounts. A shareholder will also have to
satisfy a more than 60-day holding period for the Fund shares with respect to
any distributions of qualifying dividends in order to obtain the benefit of the
lower tax rates. These rate reductions do not apply to corporate
taxpayers. A portion of the Fund’s taxable distributions, to the extent
attributable to dividends from U.S. corporations, may be eligible for the
dividends received deduction for Fund shareholders that are corporations,
subject to certain holding period and other requirements.
A
3.8% Medicare tax will be imposed on certain net investment income (including
ordinary dividends and capital gain distributions received from the Funds and
net gains from redemptions or other taxable dispositions of Fund shares) of U.S.
individuals, estates and trusts to the extent that such person’s “modified
adjusted gross income” (in the case of an individual) or “adjusted gross income”
(in the case of an estate or trust) exceeds certain threshold
amounts.
Distributions
of capital gain and distributions of net investment income reduce the NAV of a
Fund’s shares by the amount of the distribution. If you purchase shares prior to
these distributions, you are taxed on the distributions even though the
distributions represent a return of your investment.
The
sale or exchange of Fund shares is a taxable transaction for Federal income tax
purposes. You will recognize a gain or loss on such transactions equal to the
difference, if any, between the amount of your net sales proceeds and your tax
basis in the Fund shares. Such gain or loss will be capital gain or loss if you
held your Fund shares as capital assets. Any capital gain or loss will generally
be treated as long-term capital gain or loss if you held the Fund shares for
more than one year at the time of the sale or exchange, and otherwise as
short-term capital gain or loss.
A
Fund may be required to withhold Federal income tax at the Federal backup
withholding rate on all taxable distributions and redemption proceeds otherwise
payable to you if you fail to provide the Fund with your correct taxpayer
identification number or to make required certifications, or if you have been
notified by the IRS that you are subject to backup withholding. Backup
withholding is not an additional tax. Rather, any amounts withheld may be
credited against your Federal income tax liability, so long as you provide the
required information or certification.
After
December 31 of each year, a Fund will mail you reports containing
information about the income tax classification of distributions paid during the
year.
With
the exception of the Brown Advisory Maryland Bond Fund, Brown Advisory
Tax-Exempt Bond Fund and Brown Advisory Tax-Exempt Sustainable Bond Fund,
dividends paid by a Fund will not qualify as “exempt-interest dividends,” and
will not be excludable from gross income by its shareholders, because the Fund
will not invest at least 50% of the value of its total assets in securities the
interest on which is excludable from gross income.
Investment
income received by a Fund from sources within foreign countries may be subject
to foreign income taxes withheld at the source. If more than 50% of a Fund’s
total assets at the end of its taxable year consists of foreign stock or
securities, the Fund may elect to “pass through” to its investors certain
foreign income taxes paid by the Fund, with the result that each investor will
(i) include in gross income, even though not actually received, the investor’s
pro rata share of the Fund’s foreign income taxes, and (ii) either deduct (in
calculating U.S. taxable income) or credit (in calculating U.S. federal tax),
subject to certain limitations, the investor’s pro rata share of the Fund’s
foreign income taxes. See the discussion in the SAI under “Taxation – Foreign
Income Tax” for more information.
If
you are neither a resident nor a citizen of the U.S. or if you are a non-U.S.
entity (other than a pass-through entity to the extent owned by U.S. persons),
the Fund’s ordinary income dividends (which include distributions of net
short-term capital gains) will generally be subject to a 30% U.S. withholding
tax, unless a lower treaty rate applies, provided that withholding tax will
generally not apply to any gain or income realized by a non-U.S. shareholder in
respect of any distributions of long-term capital gains or upon the sale or
other disposition of shares of the Fund. Non-U.S. shareholder should consult
their tax advisers regarding U.S. and foreign tax consequences of ownership of
shares of a Fund.
Each
Fund is required to withhold U.S. tax (at a 30% rate) on payments of taxable
dividends made to certain non-U.S. entities that fail to comply (or be deemed
compliant) with extensive reporting and withholding requirements designed to
inform the U.S. Department of the Treasury of U.S.-owned foreign investment
accounts. Shareholders may be requested to provide additional information to
enable a Fund to determine whether withholding is required.
Additional
Tax Matters — Brown Advisory Maryland Bond Fund, Brown Advisory Tax-Exempt Bond
Fund, and Brown Advisory Tax-Exempt Sustainable Bond Fund. It
is anticipated that substantially all of the Brown Advisory Maryland Bond Fund’s
net income will be exempt from Federal and Maryland state income taxes. It is
anticipated that substantially all of the Brown Advisory Tax-Exempt Bond Fund
and Brown Advisory Tax-Exempt Sustainable Bond Fund's net income will be exempt
from Federal income taxes.
Generally,
you are not subject to Federal income tax on the Fund’s distributions of its
tax-exempt interest income, although such distributions may be subject to the
Federal alternative minimum tax (“AMT”). Distributions from the Fund’s net
investment income from other sources and net short-term capital gain, if any,
generally will be taxable to you as ordinary income. Distributions will
generally be subject to state and local taxes.
For
further information about the tax effects of investing in a Fund, including
state and local tax matters, please see the SAI and consult your tax adviser.
The
Bloomberg
1-10 Year Blended Municipal Bond Index
is a market index of high quality, domestic fixed income securities with
maturities of less than 10 years.
The
Bloomberg
Intermediate US Aggregate Bond Index
represents domestic taxable investment-grade bonds with index components for
government and corporate securities, mortgage pass-through securities and
asset-backed securities with average maturities and durations in the
intermediate range. This index represents a sector of the Bloomberg US Aggregate
Bond Index.
The
Bloomberg Mortgage Backed Securities Index is
a market value-weighted index which covers the mortgage-backed securities
component of the Bloomberg US Aggregate Bond Index. The index is composed of
agency mortgage-backed passthrough securities of the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) with
a minimum $150 million par amount outstanding and a weighted-average maturity of
at least 1 year. The index includes reinvestment of income.
The
Bloomberg
US Aggregate Bond Index is
a broad-based benchmark that measures the investment grade, US
dollar-denominated, fixed-rate taxable bond market. The index includes
Treasuries, government-related and corporate securities, MBS, ABS and CMBS.
The
FTSE
All-World Index is
a market capitalization weighted index representing the performance of large and
medium capitalization stocks from the FTSE Global Equity Index
Series.
The
FTSE
Emerging Index
is a market capitalization weighted index representing the performance of over
790 large and medium capitalization companies in 22 emerging
markets.
The
ICE
BofAML 0-3 Month US Treasury Bill Index is
a subset of the ICE BofAML US Treasury Bill Index and includes all securities
with a remaining term to final maturity less than 3 months.
The
MSCI
All Country World Index (ACWI)
is a free float-adjusted market capitalization index that is designed to measure
equity market performance in the large- and mid-cap segments of certain
developed markets and global emerging markets countries.
The
MSCI
Emerging Markets Index is
a free float-adjusted market capitalization index that is designed to measure
equity market performance in the global emerging markets.
The
MSCI
Europe Index
is an index that captures large and medium capitalization representation across
15 developed market countries in Europe.
The
Russell
1000®
Growth Index
measures the performance of the large-cap growth segment of the U.S. equity
universe. It includes those Russell 1000®
companies with higher price to book value ratios and higher forecasted growth
values.
The
Russell 1000®
Value
Index
measures the performance of the large-cap value segment of the U.S. equity
universe. It includes those Russell 1000®
companies with lower price to book value ratios and lower expected growth
values.
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®
companies with higher price to book value ratios and higher forecasted growth
values.
The
Russell
2000®
Index
measures the performance of the 2,000 smallest companies in the Russell
3000®
Index.
The
Russell
2000®
Value Index
measures the performance of the small-cap value segment of the U.S. equity
universe. It includes those Russell 2000®
companies with lower price to book value ratios and lower forecasted growth
values.
The
Russell 3000®
Index
measures the performance of the 3,000 largest U.S. companies representing
approximately 98% of the investable U.S. equity market.
The
Russell
Midcap®
Growth Index
measures the performance of the medium capitalization growth sector of the U.S.
equity market.
The
S&P 500®
Index is
a market-value weighted index representing the performance of 500 widely held,
publicly traded large capitalization stocks.
A
direct investment in an index is not possible.
The
financial highlights tables are intended to help you understand the financial
performance of each Fund for the past 5 years or for the period of a Fund’s
operations if less than 5 years. Certain information reflects financial results
for a single Fund share. The total returns in the tables represent the rate that
an investor would have earned (or lost) on an investment in each Fund, assuming
reinvestment of all dividends and distributions. The information presented in
the tables below has been audited by Tait, Weller & Baker LLP, an
independent registered public accounting firm, whose report, along with the
Funds’ financial statements, are included in the annual
report,
which is available upon request. The financial highlights tables on the
following pages reflect selected per share data and ratios for a share
outstanding of each Fund throughout each period.
Financial
Highlights
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|
|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
| |
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
| |
| |
| |
| |
| Asset |
| |
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
| |
| Net |
| Net |
| |
| Value, |
| |
| End
of |
| Investment |
|
|
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
|
|
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
BROWN
ADVISORY GROWTH EQUITY FUND: |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| $ |
37.39 |
|
| (0.09) |
|
| (9.01) |
|
| (9.10) |
|
| — |
|
| (4.47) |
|
| (4.47) |
|
| $ |
23.82 |
|
| (27.88) |
% |
| $ |
1,611,983 |
|
| (0.26) |
% |
| 0.66 |
% |
| 0.66 |
% |
| 21 |
% |
07/01/20 |
| 06/30/21 |
| 29.05 |
|
| (0.06) |
|
| 10.02 |
|
| 9.96 |
|
| — |
|
| (1.62) |
|
| (1.62) |
|
| 37.39 |
|
| 35.14 |
|
| 2,321,278 |
|
| (0.19) |
|
| 0.67 |
|
| 0.67 |
|
| 25 |
|
07/01/19 |
| 06/30/20 |
| 24.80 |
|
| (0.04) |
|
| 5.56 |
|
| 5.52 |
|
| — |
|
| (1.27) |
|
| (1.27) |
|
| 29.05 |
|
| 22.88 |
|
| 1,849,565 |
|
| (0.16) |
|
| 0.69 |
|
| 0.69 |
|
| 22 |
|
07/01/18 |
| 06/30/19 |
| 23.91 |
|
| (0.04) |
|
| 3.38 |
|
| 3.34 |
|
| — |
|
| (2.45) |
|
| (2.45) |
|
| 24.80 |
|
| 16.69 |
|
| 1,523,633 |
|
| (0.19) |
|
| 0.70 |
|
| 0.70 |
|
| 22 |
|
07/01/17 |
| 06/30/18 |
| 20.03 |
|
| (0.06) |
|
| 5.62 |
|
| 5.56 |
|
| — |
|
| (1.68) |
|
| (1.68) |
|
| 23.91 |
|
| 28.89 |
|
| 289,434 |
|
| (0.29) |
|
| 0.71 |
|
| 0.71 |
|
| 25 |
|
Investor
Shares* |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 36.79 |
|
| (0.13) |
|
| (8.84) |
|
| (8.97) |
|
| — |
|
| (4.47) |
|
| (4.47) |
|
| 23.35 |
|
| (28.02) |
|
| 704,341 |
|
| (0.41) |
|
| 0.81 |
|
| 0.81 |
|
| 21 |
|
07/01/20 |
| 06/30/21 |
| 28.64 |
|
| (0.11) |
|
| 9.88 |
|
| 9.77 |
|
| — |
|
| (1.62) |
|
| (1.62) |
|
| 36.79 |
|
| 34.98 |
|
| 1,174,666 |
|
| (0.34) |
|
| 0.82 |
|
| 0.82 |
|
| 25 |
|
07/01/19 |
| 06/30/20 |
| 24.50 |
|
| (0.08) |
|
| 5.49 |
|
| 5.41 |
|
| — |
|
| (1.27) |
|
| (1.27) |
|
| 28.64 |
|
| 22.70 |
|
| 983,640 |
|
| (0.31) |
|
| 0.84 |
|
| 0.84 |
|
| 22 |
|
07/01/18 |
| 06/30/19 |
| 23.69 |
|
| (0.08) |
|
| 3.34 |
|
| 3.26 |
|
| — |
|
| (2.45) |
|
| (2.45) |
|
| 24.50 |
|
| 16.50 |
|
| 828,388 |
|
| (0.34) |
|
| 0.85 |
|
| 0.85 |
|
| 22 |
|
07/01/17 |
| 06/30/18 |
| 19.89 |
|
| (0.10) |
|
| 5.58 |
|
| 5.48 |
|
| — |
|
| (1.68) |
|
| (1.68) |
|
| 23.69 |
|
| 28.69 |
|
| 1,775,180 |
|
| (0.44) |
|
| 0.86 |
|
| 0.86 |
|
| 25 |
|
Advisor
Shares* |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 34.27 |
|
| (0.20) |
|
| (8.12) |
|
| (8.32) |
|
| — |
|
| (4.47) |
|
| (4.47) |
|
| 21.48 |
|
| (28.20) |
|
| 13,940 |
|
| (0.66) |
|
| 1.06 |
|
| 1.06 |
|
| 21 |
|
07/01/20 |
| 06/30/21 |
| 26.84 |
|
| (0.18) |
|
| 9.23 |
|
| 9.05 |
|
| — |
|
| (1.62) |
|
| (1.62) |
|
| 34.27 |
|
| 34.63 |
|
| 34,042 |
|
| (0.59) |
|
| 1.07 |
|
| 1.07 |
|
| 25 |
|
07/01/19 |
| 06/30/20 |
| 23.09 |
|
| (0.14) |
|
| 5.16 |
|
| 5.02 |
|
| — |
|
| (1.27) |
|
| (1.27) |
|
| 26.84 |
|
| 22.39 |
|
| 13,692 |
|
| (0.56) |
|
| 1.09 |
|
| 1.09 |
|
| 22 |
|
07/01/18 |
| 06/30/19 |
| 22.53 |
|
| (0.13) |
|
| 3.14 |
|
| 3.01 |
|
| — |
|
| (2.45) |
|
| (2.45) |
|
| 23.09 |
|
| 16.22 |
|
| 6,683 |
|
| (0.59) |
|
| 1.10 |
|
| 1.10 |
|
| 22 |
|
07/01/17 |
| 06/30/18 |
| 19.04 |
|
| (0.14) |
|
| 5.31 |
|
| 5.17 |
|
| — |
|
| (1.68) |
|
| (1.68) |
|
| 22.53 |
|
| 28.32 |
|
| 6,215 |
|
| (0.69) |
|
| 1.11 |
|
| 1.11 |
|
| 25 |
|
BROWN
ADVISORY FLEXIBLE EQUITY FUND: |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 34.26 |
|
| 0.09 |
|
| (5.71) |
|
| (5.62) |
|
| (0.06) |
|
| (1.27) |
|
| (1.33) |
|
| 27.31 |
|
| (17.18) |
|
| 196,675 |
|
| 0.29 |
|
| 0.53 |
|
| 0.53 |
|
| 10 |
|
07/01/20 |
| 06/30/21 |
| 24.36 |
|
| 0.07 |
|
| 10.76 |
|
| 10.83 |
|
| (0.09) |
|
| (0.84) |
|
| (0.93) |
|
| 34.26 |
|
| 45.26 |
|
| 201,849 |
|
| 0.25 |
|
| 0.54 |
|
| 0.54 |
|
| 13 |
|
07/01/19 |
| 06/30/20 |
| 22.92 |
|
| 0.11 |
|
| 2.50 |
|
| 2.61 |
|
| (0.15) |
|
| (1.02) |
|
| (1.17) |
|
| 24.36 |
|
| 11.29 |
|
| 134,574 |
|
| 0.47 |
|
| 0.56 |
|
| 0.56 |
|
| 12 |
|
07/01/18 |
| 06/30/19 |
| 21.94 |
|
| 0.17 |
|
| 1.63 |
|
| 1.80 |
|
| (0.08) |
|
| (0.74) |
|
| (0.82) |
|
| 22.92 |
|
| 8.94 |
|
| 135,190 |
|
| 0.78 |
|
| 0.57 |
|
| 0.57 |
|
| 14 |
|
07/01/17 |
| 06/30/18 |
| 18.53 |
|
| 0.10 |
|
| 3.43 |
|
| 3.53 |
|
| (0.12) |
|
| — |
|
| (0.12) |
|
| 21.94 |
|
| 19.07 |
|
| 131,218 |
|
| 0.48 |
|
| 0.72 |
|
| 0.72 |
|
| 15 |
|
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 34.16 |
|
| 0.04 |
|
| (5.70) |
|
| (5.66) |
|
| (0.03) |
|
| (1.27) |
|
| (1.30) |
|
| 27.20 |
|
| (17.32) |
|
| 400,090 |
|
| 0.14 |
|
| 0.68 |
|
| 0.68 |
|
| 10 |
|
07/01/20 |
| 06/30/21 |
| 24.31 |
|
| 0.03 |
|
| 10.73 |
|
| 10.76 |
|
| (0.07) |
|
| (0.84) |
|
| (0.91) |
|
| 34.16 |
|
| 45.05 |
|
| 500,233 |
|
| 0.10 |
|
| 0.69 |
|
| 0.69 |
|
| 13 |
|
07/01/19 |
| 06/30/20 |
| 22.88 |
|
| 0.07 |
|
| 2.49 |
|
| 2.56 |
|
| (0.11) |
|
| (1.02) |
|
| (1.13) |
|
| 24.31 |
|
| 11.12 |
|
| 362,695 |
|
| 0.32 |
|
| 0.71 |
|
| 0.71 |
|
| 12 |
|
07/01/18 |
| 06/30/19 |
| 21.90 |
|
| 0.14 |
|
| 1.63 |
|
| 1.77 |
|
| (0.05) |
|
| (0.74) |
|
| (0.79) |
|
| 22.88 |
|
| 8.77 |
|
| 343,917 |
|
| 0.63 |
|
| 0.72 |
|
| 0.72 |
|
| 14 |
|
07/01/17 |
| 06/30/18 |
| 18.50 |
|
| 0.07 |
|
| 3.42 |
|
| 3.49 |
|
| (0.09) |
|
| — |
|
| (0.09) |
|
| 21.90 |
|
| 18.88 |
|
| 316,109 |
|
| 0.33 |
|
| 0.87 |
|
| 0.87 |
|
| 15 |
|
Advisor
Shares* |
| |
| |
07/01/21 |
| 06/30/22 |
| 34.10 |
|
| (0.04) |
|
| (5.68) |
|
| (5.72) |
|
| — |
|
| (1.27) |
|
| (1.27) |
|
| 27.11 |
|
| (17.51) |
|
| 4,471 |
|
| (0.11) |
|
| 0.93 |
|
| 0.93 |
|
| 10 |
|
07/01/20 |
| 06/30/21 |
| 24.30 |
|
| (0.04) |
|
| 10.72 |
|
| 10.68 |
|
| (0.04) |
|
| (0.84) |
|
| (0.88) |
|
| 34.10 |
|
| 44.69 |
|
| 5,965 |
|
| (0.15) |
|
| 0.94 |
|
| 0.94 |
|
| 13 |
|
07/01/19 |
| 06/30/20 |
| 22.90 |
|
| 0.02 |
|
| 2.48 |
|
| 2.50 |
|
| (0.08) |
|
| (1.02) |
|
| (1.10) |
|
| 24.30 |
|
| 10.84 |
|
| 4,403 |
|
| 0.07 |
|
| 0.96 |
|
| 0.96 |
|
| 12 |
|
07/01/18 |
| 06/30/19 |
| 21.91 |
|
| 0.08 |
|
| 1.65 |
|
| 1.73 |
|
| — |
|
| (0.74) |
|
| (0.74) |
|
| 22.90 |
|
| 8.52 |
|
| 4,652 |
|
| 0.38 |
|
| 0.97 |
|
| 0.97 |
|
| 14 |
|
07/01/17 |
| 06/30/18 |
| 18.50 |
|
| 0.02 |
|
| 3.42 |
|
| 3.44 |
|
| (0.03) |
|
| — |
|
| (0.03) |
|
| 21.91 |
|
| 18.61 |
|
| 6,445 |
|
| 0.08 |
|
| 1.12 |
|
| 1.12 |
|
| 15 |
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
|
|
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
| |
| |
| |
| |
| Asset |
|
|
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
|
|
| Value, |
|
|
| End
of |
| Investment |
| |
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
|
|
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
BROWN
ADVISORY EQUITY INCOME FUND: |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| $ |
15.98 |
|
| 0.23 |
|
| (0.96) |
|
| (0.73) |
|
| (0.23) |
|
| (1.45) |
|
| (1.68) |
|
| $ |
13.57 |
|
| (5.87) |
% |
| $ |
19,964 |
|
| 1.46 |
% |
| 0.76 |
% |
| 0.79 |
% |
| 11 |
% |
07/01/20 |
| 06/30/21 |
| 12.97 |
|
| 0.23 |
|
| 3.75 |
|
| 3.98 |
|
| (0.23) |
|
| (0.74) |
|
| (0.97) |
|
| 15.98 |
|
| 31.84 |
|
| 24,045 |
|
| 1.59 |
|
| 0.77 |
|
| 0.80 |
|
| 20 |
|
07/01/19 |
| 06/30/20 |
| 14.15 |
|
| 0.23 |
|
| (0.10) |
|
| 0.13 |
|
| (0.23) |
|
| (1.08) |
|
| (1.31) |
|
| 12.97 |
|
| 0.46 |
|
| 22,026 |
|
| 1.66 |
|
| 0.80 |
|
| 0.80 |
|
| 16 |
|
07/01/18 |
| 06/30/19 |
| 14.41 |
|
| 0.26 |
|
| 1.33 |
|
| 1.59 |
|
| (0.27) |
|
| (1.58) |
|
| (1.85) |
|
| 14.15 |
|
| 13.12 |
|
| 26,449 |
|
| 1.87 |
|
| 0.80 |
|
| 0.80 |
|
| 11 |
|
07/01/17 |
| 06/30/18 |
| 13.80 |
|
| 0.24 |
|
| 1.07 |
|
| 1.31 |
|
| (0.25) |
|
| (0.45) |
|
| (0.70) |
|
| 14.41 |
|
| 9.51 |
|
| 27,975 |
|
| 1.70 |
|
| 0.77 |
|
| 0.77 |
|
| 14 |
|
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 15.97 |
|
| 0.21 |
|
| (0.96) |
|
| (0.75) |
|
| (0.21) |
|
| (1.45) |
|
| (1.66) |
|
| 13.56 |
|
| (6.02) |
|
| 55,288 |
|
| 1.31 |
|
| 0.91 |
|
| 0.94 |
|
| 11 |
|
07/01/20 |
| 06/30/21 |
| 12.96 |
|
| 0.21 |
|
| 3.75 |
|
| 3.96 |
|
| (0.21) |
|
| (0.74) |
|
| (0.95) |
|
| 15.97 |
|
| 31.67 |
|
| 63,600 |
|
| 1.44 |
|
| 0.92 |
|
| 0.95 |
|
| 20 |
|
07/01/19 |
| 06/30/20 |
| 14.15 |
|
| 0.21 |
|
| (0.11) |
|
| 0.10 |
|
| (0.21) |
|
| (1.08) |
|
| (1.29) |
|
| 12.96 |
|
| 0.24 |
|
| 55,228 |
|
| 1.51 |
|
| 0.95 |
|
| 0.95 |
|
| 16 |
|
07/01/18 |
| 06/30/19 |
| 14.40 |
|
| 0.24 |
|
| 1.34 |
|
| 1.58 |
|
| (0.25) |
|
| (1.58) |
|
| (1.83) |
|
| 14.15 |
|
| 13.03 |
|
| 62,309 |
|
| 1.72 |
|
| 0.95 |
|
| 0.95 |
|
| 11 |
|
07/01/17 |
| 06/30/18 |
| 13.80 |
|
| 0.22 |
|
| 1.06 |
|
| 1.28 |
|
| (0.23) |
|
| (0.45) |
|
| (0.68) |
|
| 14.40 |
|
| 9.27 |
|
| 66,512 |
|
| 1.55 |
|
| 0.92 |
|
| 0.92 |
|
| 14 |
|
Advisor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 15.96 |
|
| 0.17 |
|
| (0.96) |
|
| (0.79) |
|
| (0.17) |
|
| (1.45) |
|
| (1.62) |
|
| 13.55 |
|
| (6.24) |
|
| 1,247 |
|
| 1.06 |
|
| 1.16 |
|
| 1.19 |
|
| 11 |
|
07/01/20 |
| 06/30/21 |
| 12.96 |
|
| 0.17 |
|
| 3.74 |
|
| 3.91 |
|
| (0.17) |
|
| (0.74) |
|
| (0.91) |
|
| 15.96 |
|
| 31.27 |
|
| 1,182 |
|
| 1.19 |
|
| 1.17 |
|
| 1.20 |
|
| 20 |
|
07/01/19 |
| 06/30/20 |
| 14.14 |
|
| 0.17 |
|
| (0.10) |
|
| 0.07 |
|
| (0.17) |
|
| (1.08) |
|
| (1.25) |
|
| 12.96 |
|
| 0.05 |
|
| 886 |
|
| 1.26 |
|
| 1.20 |
|
| 1.20 |
|
| 16 |
|
07/01/18 |
| 06/30/19 |
| 14.40 |
|
| 0.21 |
|
| 1.33 |
|
| 1.54 |
|
| (0.22) |
|
| (1.58) |
|
| (1.80) |
|
| 14.14 |
|
| 12.67 |
|
| 1,017 |
|
| 1.47 |
|
| 1.20 |
|
| 1.20 |
|
| 11 |
|
07/01/17 |
| 06/30/18 |
| 13.78 |
|
| 0.19 |
|
| 1.06 |
|
| 1.25 |
|
| (0.18) |
|
| (0.45) |
|
| (0.63) |
|
| 14.40 |
|
| 9.04 |
|
| 1,077 |
|
| 1.30 |
|
| 1.17 |
|
| 1.17 |
|
| 14 |
|
BROWN
ADVISORY SUSTAINABLE GROWTH FUND: |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 44.56 |
|
| (0.04) |
|
| (8.19) |
|
| (8.23) |
|
| — |
|
| (0.91) |
|
| (0.91) |
|
| 35.52 |
|
| (19.02) |
|
| 3,378,590 |
|
| (0.10) |
|
| 0.63 |
|
| 0.63 |
|
| 19 |
|
07/01/20 |
| 06/30/21 |
| 31.96 |
|
| (0.03) |
|
| 12.63 |
|
| 12.60 |
|
| — |
|
| — |
|
| — |
|
| 44.56 |
|
| 39.42 |
|
| 3,364,728 |
|
| (0.08) |
|
| 0.65 |
|
| 0.65 |
|
| 23 |
|
07/01/19 |
| 06/30/20 |
| 26.39 |
|
| 0.01 |
|
| 5.77 |
|
| 5.78 |
|
| — |
|
| (0.21) |
|
| (0.21) |
|
| 31.96 |
|
| 22.01 |
|
| 1,601,989 |
|
| 0.05 |
|
| 0.70 |
|
| 0.70 |
|
| 20 |
|
07/01/18 |
| 06/30/19 |
| 23.02 |
|
| 0.03 |
|
| 4.12 |
|
| 4.15 |
|
| — |
|
| (0.78) |
|
| (0.78) |
|
| 26.39 |
|
| 18.89 |
|
| 749,949 |
|
| 0.10 |
|
| 0.73 |
|
| 0.73 |
|
| 21 |
|
07/01/17 |
| 06/30/18 |
| 18.94 |
|
| 0.01 |
|
| 4.42 |
|
| 4.43 |
|
| — |
|
| (0.35) |
|
| (0.35) |
|
| 23.02 |
|
| 23.59 |
|
| 369,642 |
|
| 0.05 |
|
| 0.73 |
|
| 0.73 |
|
| 29 |
|
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 43.90 |
|
| (0.11) |
|
| (8.05) |
|
| (8.16) |
|
| — |
|
| (0.91) |
|
| (0.91) |
|
| 34.83 |
|
| (19.15) |
|
| 1,714,513 |
|
| (0.25) |
|
| 0.78 |
|
| 0.78 |
|
| 19 |
|
07/01/20 |
| 06/30/21 |
| 31.52 |
|
| (0.09) |
|
| 12.47 |
|
| 12.38 |
|
| — |
|
| — |
|
| — |
|
| 43.90 |
|
| 39.28 |
|
| 1,849,429 |
|
| (0.23) |
|
| 0.80 |
|
| 0.80 |
|
| 23 |
|
07/01/19 |
| 06/30/20 |
| 26.07 |
|
| (0.03) |
|
| 5.69 |
|
| 5.66 |
|
| — |
|
| (0.21) |
|
| (0.21) |
|
| 31.52 |
|
| 21.82 |
|
| 1,108,023 |
|
| (0.10) |
|
| 0.85 |
|
| 0.85 |
|
| 20 |
|
07/01/18 |
| 06/30/19 |
| 22.79 |
|
| (0.01) |
|
| 4.07 |
|
| 4.06 |
|
| — |
|
| (0.78) |
|
| (0.78) |
|
| 26.07 |
|
| 18.68 |
|
| 374,769 |
|
| (0.05) |
|
| 0.88 |
|
| 0.88 |
|
| 21 |
|
07/01/17 |
| 06/30/18 |
| 18.78 |
|
| (0.02) |
|
| 4.38 |
|
| 4.36 |
|
| — |
|
| (0.35) |
|
| (0.35) |
|
| 22.79 |
|
| 23.41 |
|
| 102,201 |
|
| (0.10) |
|
| 0.88 |
|
| 0.88 |
|
| 29 |
|
Advisor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 42.87 |
|
| (0.21) |
|
| (7.84) |
|
| (8.05) |
|
| — |
|
| (0.91) |
|
| (0.91) |
|
| 33.91 |
|
| (19.35) |
|
| 298,972 |
|
| (0.50) |
|
| 1.03 |
|
| 1.03 |
|
| 19 |
|
07/01/20 |
| 06/30/21 |
| 30.86 |
|
| (0.18) |
|
| 12.19 |
|
| 12.01 |
|
| — |
|
| — |
|
| — |
|
| 42.87 |
|
| 38.92 |
|
| 444,064 |
|
| (0.48) |
|
| 1.05 |
|
| 1.05 |
|
| 23 |
|
07/01/19 |
| 06/30/20 |
| 25.59 |
|
| (0.09) |
|
| 5.57 |
|
| 5.48 |
|
| — |
|
| (0.21) |
|
| (0.21) |
|
| 30.86 |
|
| 21.53 |
|
| 285,542 |
|
| (0.35) |
|
| 1.10 |
|
| 1.10 |
|
| 20 |
|
07/01/18 |
| 06/30/19 |
| 22.44 |
|
| (0.07) |
|
| 4.00 |
|
| 3.93 |
|
| — |
|
| (0.78) |
|
| (0.78) |
|
| 25.59 |
|
| 18.39 |
|
| 250,871 |
|
| (0.30) |
|
| 1.13 |
|
| 1.13 |
|
| 21 |
|
07/01/17 |
| 06/30/18 |
| 18.54 |
|
| (0.07) |
|
| 4.32 |
|
| 4.25 |
|
| — |
|
| (0.35) |
|
| (0.35) |
|
| 22.44 |
|
| 23.12 |
|
| 213,262 |
|
| (0.35) |
|
| 1.13 |
|
| 1.13 |
|
| 29 |
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
|
|
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
| |
| |
| |
| |
| Asset |
| |
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
| |
| Value, |
|
|
| End
of |
| Investment |
|
|
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
|
|
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
BROWN
ADVISORY MID-CAP GROWTH FUND: |
| |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| $ |
19.86 |
|
| (0.09) |
|
| (5.73) |
|
| (5.82) |
|
| — |
|
| (1.75) |
|
| (1.75) |
|
| $ |
12.29 |
|
| (31.54) |
% |
| $ |
94,754 |
|
| (0.52) |
% |
| 0.79 |
% |
| 0.79 |
% |
| 48 |
% |
07/01/20 |
| 06/30/21 |
| 13.86 |
|
| (0.08) |
|
| 6.08 |
|
| 6.00 |
|
| — |
|
| — |
|
| — |
|
| 19.86 |
|
| 43.03 |
|
| 159,180 |
|
| (0.44) |
|
| 0.76 |
|
| 0.79 |
|
| 48 |
|
07/01/19 |
| 06/30/20 |
| 13.14 |
|
| (0.01) |
|
| 0.77 |
|
| 0.76 |
|
| — |
|
| (0.04) |
|
| (0.04) |
|
| 13.86 |
|
| 5.68 |
|
| 100,367 |
|
| (0.11) |
|
| 0.70 |
|
| 0.88 |
|
| 35 |
|
07/02/18^ |
| 06/30/19 |
| 11.42 |
|
| (0.00) |
| 1.83 |
|
| 1.83 |
|
| — |
|
| (0.11) |
|
| (0.11) |
|
| 13.14 |
|
| 16.36 |
|
| 42,404 |
|
| (0.00) |
| 0.70 |
|
| 1.04 |
|
| 46 |
|
Investor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 19.76 |
|
| (0.11) |
|
| (5.70) |
|
| (5.81) |
|
| — |
|
| (1.75) |
|
| (1.75) |
|
| 12.20 |
|
| (31.70) |
|
| 22,897 |
|
| (0.67) |
|
| 0.94 |
|
| 0.94 |
|
| 48 |
|
07/01/20 |
| 06/30/21 |
| 13.81 |
|
| (0.10) |
|
| 6.05 |
|
| 5.95 |
|
| — |
|
| — |
|
| — |
|
| 19.76 |
|
| 42.90 |
|
| 33,381 |
|
| (0.59) |
|
| 0.91 |
|
| 0.94 |
|
| 48 |
|
07/01/19 |
| 06/30/20 |
| 13.12 |
|
| (0.03) |
|
| 0.76 |
|
| 0.73 |
|
| — |
|
| (0.04) |
|
| (0.04) |
|
| 13.81 |
|
| 5.46 |
|
| 28,477 |
|
| (0.26) |
|
| 0.85 |
|
| 1.03 |
|
| 35 |
|
07/01/18 |
| 06/30/19 |
| 11.36 |
|
| (0.02) |
|
| 1.89 |
|
| 1.87 |
|
| — |
|
| (0.11) |
|
| (0.11) |
|
| 13.12 |
|
| 16.80 |
|
| 2,933 |
|
| (0.15) |
|
| 0.85 |
|
| 1.19 |
|
| 46 |
|
10/02/17^ |
| 06/30/18 |
| 10.00 |
|
| (0.01) |
|
| 1.37 |
|
| 1.36 |
|
| — |
|
| — |
|
| — |
|
| 11.36 |
|
| 13.60 |
|
| 21,377 |
|
| (0.16) |
|
| 0.85 |
|
| 1.58 |
|
| 29 |
|
BROWN
ADVISORY SMALL-CAP GROWTH FUND: |
| |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 63.00 |
|
| (0.32) |
|
| (13.47) |
|
| (13.79) |
|
| — |
|
| (7.23) |
|
| (7.23) |
|
| 41.98 |
|
| (24.11) |
|
| 1,165,292 |
|
| (0.59) |
|
| 0.95 |
|
| 0.95 |
|
| 27 |
|
07/01/20 |
| 06/30/21 |
| 44.31 |
|
| (0.34) |
|
| 19.48 |
|
| 19.14 |
|
| — |
|
| (0.45) |
|
| (0.45) |
|
| 63.00 |
|
| 43.31 |
|
| 1,758,121 |
|
| (0.61) |
|
| 0.95 |
|
| 0.95 |
|
| 32 |
|
07/01/19 |
| 06/30/20 |
| 44.24 |
|
| (0.20) |
|
| 1.15 |
|
| 0.95 |
|
| — |
|
| (0.88) |
|
| (0.88) |
|
| 44.31 |
|
| 2.18 |
|
| 1,039,126 |
|
| (0.48) |
|
| 0.97 |
|
| 0.97 |
|
| 29 |
|
07/01/18 |
| 06/30/19 |
| 40.64 |
|
| (0.15) |
|
| 5.52 |
|
| 5.37 |
|
| (0.18) |
|
| (1.59) |
|
| (1.77) |
|
| 44.24 |
|
| 14.56 |
|
| 838,698 |
|
| (0.36) |
|
| 0.98 |
|
| 0.98 |
|
| 44 |
|
07/01/17 |
| 06/30/18 |
| 35.15 |
|
| (0.16) |
|
| 6.31 |
|
| 6.15 |
|
| (0.15) |
|
| (0.51) |
|
| (0.66) |
|
| 40.64 |
|
| 17.64 |
|
| 424,449 |
|
| (0.42) |
|
| 0.98 |
|
| 0.98 |
|
| 30 |
|
Investor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 31.42 |
|
| (0.20) |
|
| (6.71) |
|
| (6.91) |
|
| — |
|
| (3.60) |
|
| (3.60) |
|
| 20.91 |
|
| (24.23) |
|
| 707,378 |
|
| (0.74) |
|
| 1.10 |
|
| 1.10 |
|
| 27 |
|
07/01/20 |
| 06/30/21 |
| 22.13 |
|
| (0.21) |
|
| 9.72 |
|
| 9.51 |
|
| — |
|
| (0.22) |
|
| (0.22) |
|
| 31.42 |
|
| 43.11 |
|
| 822,075 |
|
| (0.76) |
|
| 1.10 |
|
| 1.10 |
|
| 32 |
|
07/01/19 |
| 06/30/20 |
| 22.13 |
|
| (0.13) |
|
| 0.57 |
|
| 0.44 |
|
| — |
|
| (0.44) |
|
| (0.44) |
|
| 22.13 |
|
| 2.02 |
|
| 511,028 |
|
| (0.63) |
|
| 1.12 |
|
| 1.12 |
|
| 29 |
|
07/01/18 |
| 06/30/19 |
| 20.34 |
|
| (0.10) |
|
| 2.77 |
|
| 2.67 |
|
| (0.08) |
|
| (0.80) |
|
| (0.88) |
|
| 22.13 |
|
| 14.40 |
|
| 493,421 |
|
| (0.51) |
|
| 1.13 |
|
| 1.13 |
|
| 44 |
|
07/01/17 |
| 06/30/18 |
| 17.61 |
|
| (0.11) |
|
| 3.15 |
|
| 3.04 |
|
| (0.06) |
|
| (0.25) |
|
| (0.31) |
|
| 20.34 |
|
| 17.44 |
|
| 476,786 |
|
| (0.57) |
|
| 1.13 |
|
| 1.13 |
|
| 30 |
|
Advisor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 29.88 |
|
| (0.26) |
|
| (6.37) |
|
| (6.63) |
|
| — |
|
| (3.42) |
|
| (3.42) |
|
| 19.83 |
|
| (24.44) |
|
| 9,309 |
|
| (0.99) |
|
| 1.35 |
|
| 1.35 |
|
| 27 |
|
07/01/20 |
| 06/30/21 |
| 21.10 |
|
| (0.26) |
|
| 9.25 |
|
| 8.99 |
|
| — |
|
| (0.21) |
|
| (0.21) |
|
| 29.88 |
|
| 42.74 |
|
| 14,939 |
|
| (1.01) |
|
| 1.35 |
|
| 1.35 |
|
| 32 |
|
07/01/19 |
| 06/30/20 |
| 21.15 |
|
| (0.18) |
|
| 0.55 |
|
| 0.37 |
|
| — |
|
| (0.42) |
|
| (0.42) |
|
| 21.10 |
|
| 1.78 |
|
| 12,159 |
|
| (0.88) |
|
| 1.37 |
|
| 1.37 |
|
| 29 |
|
07/01/18 |
| 06/30/19 |
| 19.46 |
|
| (0.15) |
|
| 2.64 |
|
| 2.49 |
|
| (0.04) |
|
| (0.76) |
|
| (0.80) |
|
| 21.15 |
|
| 14.08 |
|
| 14,489 |
|
| (0.76) |
|
| 1.38 |
|
| 1.38 |
|
| 44 |
|
07/01/17 |
| 06/30/18 |
| 16.85 |
|
| (0.15) |
|
| 3.02 |
|
| 2.87 |
|
| (0.02) |
|
| (0.24) |
|
| (0.26) |
|
| 19.46 |
|
| 17.21 |
|
| 18,449 |
|
| (0.82) |
|
| 1.38 |
|
| 1.38 |
|
| 30 |
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
|
|
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
| |
| |
| |
| |
| Asset |
| |
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
| |
| Value, |
|
|
| End
of |
| Investment |
|
|
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
|
|
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
BROWN
ADVISORY SMALL-CAP FUNDAMENTAL VALUE FUND: |
|
|
|
|
|
|
|
|
| |
Institutional
Shares* |
|
|
|
|
|
|
|
|
| |
07/01/21 |
| 06/30/22 |
| $ |
29.65 |
|
| 0.09 |
|
| (3.45) |
|
| (3.36) |
|
| (0.10) |
|
| (0.10) |
|
| (0.20) |
|
| $ |
26.09 |
|
| (11.45) |
% |
| $ |
562,382 |
|
| 0.29 |
% |
| 0.95 |
% |
| 0.95 |
% |
| 27 |
% |
07/01/20 |
| 06/30/21 |
| 19.25 |
|
| 0.11 |
|
| 10.44 |
|
| 10.55 |
|
| (0.15) |
|
| — |
|
| (0.15) |
|
| 29.65 |
|
| 54.97 |
|
| 591,096 |
|
| 0.43 |
|
| 0.95 |
|
| 0.95 |
|
| 42 |
|
07/01/19 |
| 06/30/20 |
| 24.77 |
|
| 0.21 |
|
| (4.46) |
|
| (4.25) |
|
| (0.13) |
|
| (1.14) |
|
| (1.27) |
|
| 19.25 |
|
| (18.38) |
|
| 336,819 |
|
| 0.94 |
|
| 0.97 |
|
| 0.97 |
|
| 56 |
|
07/01/18 |
| 06/30/19 |
| 29.16 |
|
| 0.29 |
|
| (1.54) |
|
| (1.25) |
|
| (0.21) |
|
| (2.93) |
|
| (3.14) |
|
| 24.77 |
|
| (2.91) |
|
| 447,846 |
|
| 1.10 |
|
| 0.97 |
|
| 0.97 |
|
| 36 |
|
07/01/17 |
| 06/30/18 |
| 27.11 |
|
| 0.15 |
|
| 3.11 |
|
| 3.26 |
|
| (0.20) |
|
| (1.01) |
|
| (1.21) |
|
| 29.16 |
|
| 12.13 |
|
| 410,785 |
|
| 0.52 |
|
| 0.97 |
|
| 0.97 |
|
| 32 |
|
Investor
Shares* |
|
|
|
|
|
|
|
|
| |
07/01/21 |
| 06/30/22 |
| 29.60 |
|
| 0.04 |
|
| (3.45) |
|
| (3.41) |
|
| (0.05) |
|
| (0.10) |
|
| (0.15) |
|
| 26.04 |
|
| (11.59) |
|
| 564,689 |
|
| 0.14 |
|
| 1.10 |
|
| 1.10 |
|
| 27 |
|
07/01/20 |
| 06/30/21 |
| 19.22 |
|
| 0.07 |
|
| 10.42 |
|
| 10.49 |
|
| (0.11) |
|
| — |
|
| (0.11) |
|
| 29.60 |
|
| 54.74 |
|
| 648,403 |
|
| 0.28 |
|
| 1.10 |
|
| 1.10 |
|
| 42 |
|
07/01/19 |
| 06/30/20 |
| 24.75 |
|
| 0.18 |
|
| (4.46) |
|
| (4.28) |
|
| (0.11) |
|
| (1.14) |
|
| (1.25) |
|
| 19.22 |
|
| (18.49) |
|
| 432,498 |
|
| 0.79 |
|
| 1.12 |
|
| 1.12 |
|
| 56 |
|
07/01/18 |
| 06/30/19 |
| 29.12 |
|
| 0.25 |
|
| (1.53) |
|
| (1.28) |
|
| (0.16) |
|
| (2.93) |
|
| (3.09) |
|
| 24.75 |
|
| (3.05) |
|
| 577,212 |
|
| 0.95 |
|
| 1.12 |
|
| 1.12 |
|
| 36 |
|
07/01/17 |
| 06/30/18 |
| 27.08 |
|
| 0.10 |
|
| 3.10 |
|
| 3.20 |
|
| (0.15) |
|
| (1.01) |
|
| (1.16) |
|
| 29.12 |
|
| 11.95 |
|
| 874,269 |
|
| 0.37 |
|
| 1.12 |
|
| 1.12 |
|
| 32 |
|
Advisor
Shares* |
|
|
|
|
|
|
|
|
| |
07/01/21 |
| 06/30/22 |
| 29.43 |
|
| (0.03) |
|
| (3.43) |
|
| (3.46) |
|
| (0.01) |
|
| (0.10) |
|
| (0.11) |
|
| 25.85 |
|
| (11.82) |
|
| 3,154 |
|
| (0.11) |
|
| 1.35 |
|
| 1.35 |
|
| 27 |
|
07/01/20 |
| 06/30/21 |
| 19.10 |
|
| 0.01 |
|
| 10.36 |
|
| 10.37 |
|
| (0.04) |
|
| — |
|
| (0.04) |
|
| 29.43 |
|
| 54.37 |
|
| 8,125 |
|
| 0.03 |
|
| 1.35 |
|
| 1.35 |
|
| 42 |
|
07/01/19 |
| 06/30/20 |
| 24.64 |
|
| 0.12 |
|
| (4.44) |
|
| (4.32) |
|
| (0.08) |
|
| (1.14) |
|
| (1.22) |
|
| 19.10 |
|
| (18.71) |
|
| 4,480 |
|
| 0.54 |
|
| 1.37 |
|
| 1.37 |
|
| 56 |
|
07/01/18 |
| 06/30/19 |
| 28.98 |
|
| 0.19 |
|
| (1.51) |
|
| (1.32) |
|
| (0.09) |
|
| (2.93) |
|
| (3.02) |
|
| 24.64 |
|
| (3.27) |
|
| 8,393 |
|
| 0.70 |
|
| 1.37 |
|
| 1.37 |
|
| 36 |
|
07/01/17 |
| 06/30/18 |
| 26.95 |
|
| 0.03 |
|
| 3.08 |
|
| 3.11 |
|
| (0.07) |
|
| (1.01) |
|
| (1.08) |
|
| 28.98 |
|
| 11.65 |
|
| 25,032 |
|
| 0.12 |
|
| 1.37 |
|
| 1.37 |
|
| 32 |
|
BROWN
ADVISORY SUSTAINABLE SMALL-CAP CORE FUND: |
|
|
|
|
|
|
|
|
| |
Institutional
Shares* |
|
|
|
|
|
|
|
|
| |
9/30/2021^ |
| 06/30/22 |
| 10.00 |
|
| (0.02) |
|
| (2.24) |
|
| (2.26) |
|
| — |
|
| — |
|
| — |
|
| 7.74 |
|
| (22.60) |
|
| 32,915 |
|
| (0.22) |
|
| 0.93 |
|
| 1.36 |
|
| 19 |
|
Advisor
Shares* |
|
|
|
|
|
|
|
|
| |
9/30/2021^ |
| 06/30/22 |
| 10.00 |
|
| (0.02) |
|
| (2.24) |
|
| (2.27) |
|
| — |
|
| — |
|
| — |
|
| 7.73 |
|
| (22.70) |
|
| 812 |
|
| (0.37) |
|
| 1.08 |
|
| 1.51 |
|
| 19 |
|
BROWN
ADVISORY GLOBAL LEADERS FUND: |
|
|
|
|
|
|
| |
Institutional
Shares* |
|
|
|
|
|
|
| |
07/01/21 |
| 06/30/22 |
| 22.60 |
|
| 0.10 |
|
| (4.19) |
|
| (4.09) |
|
| (0.02) |
|
| (0.25) |
|
| (0.27) |
|
| 18.24 |
|
| (18.34) |
|
| 1,048,587.00 |
|
| 0.45 |
|
| 0.75 |
|
| 0.75 |
|
| 25 |
|
07/01/20 |
| 06/30/21 |
| 16.38 |
|
| 0.03 |
|
| 6.22 |
|
| 6.25 |
|
| (0.03) |
|
| — |
|
| (0.03) |
|
| 22.60 |
|
| 38.17 |
|
| 1,149,790 |
|
| 0.16 |
|
| 0.76 |
|
| 0.76 |
|
| 14 |
|
07/01/19 |
| 06/30/20 |
| 15.24 |
|
| 0.07 |
|
| 1.13 |
|
| 1.20 |
|
| (0.06) |
|
| — |
|
| (0.06) |
|
| 16.38 |
|
| 7.85 |
|
| 605,983 |
|
| 0.45 |
|
| 0.75 |
|
| 0.82 |
|
| 27 |
|
10/31/18^ |
| 06/30/19 |
| 13.13 |
|
| 0.07 |
|
| 2.07 |
|
| 2.14 |
|
| (0.03) |
|
| — |
|
| (0.03) |
|
| 15.24 |
|
| 16.38 |
|
| 214,263 |
|
| 0.71 |
|
| 0.75 |
|
| 0.88 |
|
| 23 |
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
|
|
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
| |
| |
| |
| |
| Asset |
| |
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
|
|
| Value, |
|
|
| End
of |
| Investment |
|
|
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
| |
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
Investor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| $ |
22.54 |
|
| 0.07 |
|
| (4.17) |
|
| (4.10) |
|
| (0.01) |
|
| (0.25) |
|
| (0.26) |
|
| $ |
18.18 |
|
| (18.45) |
% |
| $ |
76,150 |
|
| 0.30 |
% |
| 0.90 |
% |
| 0.90 |
% |
| 25 |
% |
07/01/20 |
| 06/30/21 |
| 16.36 |
|
| — |
|
| 6.20 |
|
| 6.20 |
|
| (0.02) |
|
| — |
|
| (0.02) |
|
| 22.54 |
|
| 37.91 |
|
| 95,940 |
|
| 0.01 |
|
| 0.91 |
|
| 0.91 |
|
| 14 |
|
07/01/19 |
| 06/30/20 |
| 15.23 |
|
| 0.05 |
|
| 1.12 |
|
| 1.17 |
|
| (0.04) |
|
| — |
|
| (0.04) |
|
| 16.36 |
|
| 7.68 |
|
| 66,813 |
|
| 0.30 |
|
| 0.90 |
|
| 0.97 |
|
| 27 |
|
07/01/18 |
| 06/30/19 |
| 13.82 |
|
| 0.08 |
|
| 1.36 |
|
| 1.44 |
|
| (0.03) |
|
| — |
|
| (0.03) |
|
| 15.23 |
|
| 10.49 |
|
| 18,943 |
|
| 0.60 |
|
| 0.86 |
|
| 1.07 |
|
| 23 |
|
07/01/17 |
| 06/30/18 |
| 11.50 |
|
| 0.08 |
|
| 2.25 |
|
| 2.33 |
|
| (0.01) |
|
| — |
|
| (0.01) |
|
| 13.82 |
|
| 20.28 |
|
| 86,112 |
|
| 0.60 |
|
| 0.85 |
|
| 1.10 |
|
| 26 |
|
BROWN
ADVISORY SUSTAINABLE INTERNATIONAL LEADERS FUND: |
|
|
|
|
|
|
|
|
| |
Institutional
Shares* |
|
|
|
|
|
|
|
|
| |
02/28/22^ |
| 06/30/22 |
| 10.00 |
|
| 0.06 |
|
| (1.69) |
|
| (1.57) |
|
| — |
|
| — |
|
| — |
|
| 8.43 |
|
| (15.70) |
|
| 6,221 |
|
| 1.96 |
| 0.85 |
| 0.85 |
|
| 4.26 |
|
| 12 |
|
Advisor
Shares* |
|
|
|
|
|
|
|
|
| |
02/28/22^ |
| 06/30/22 |
| 10.00 |
|
| 0.05 |
|
| (1.63) |
|
| (1.58) |
|
| — |
|
| — |
|
| — |
|
| 8.42 |
|
| (15.80) |
|
| 75 |
|
| 1.81 |
|
| 1.00 |
|
| 4.41 |
|
| 12 |
|
BROWN
ADVISORY INTERMEDIATE INCOME FUND: |
| |
| |
| |
| |
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 11.05 |
|
| 0.12 |
|
| (0.94) |
|
| (0.82) |
|
| (0.14) |
|
| (0.10) |
|
| (0.24) |
|
| 9.99 |
|
| (7.60) |
|
| 139,856 |
|
| 1.17 |
|
| 0.46 |
|
| 0.50 |
|
| 58 |
|
07/01/20 |
| 06/30/21 |
| 11.06 |
|
| 0.11 |
|
| 0.02 |
|
| 0.13 |
|
| (0.13) |
|
| (0.01) |
|
| (0.14) |
|
| 11.05 |
|
| 1.11 |
|
| 167,774 |
|
| 1.02 |
|
| 0.47 |
|
| 0.50 |
|
| 50 |
|
07/01/19 |
| 06/30/20 |
| 10.72 |
|
| 0.24 |
|
| 0.35 |
|
| 0.59 |
|
| (0.25) |
|
| — |
|
| (0.25) |
|
| 11.06 |
|
| 5.55 |
|
| 148,300 |
|
| 2.24 |
|
| 0.49 |
|
| 0.53 |
|
| 105 |
|
07/01/18 |
| 06/30/19 |
| 10.35 |
|
| 0.27 |
|
| 0.36 |
|
| 0.63 |
|
| (0.26) |
|
| — |
|
| (0.26) |
|
| 10.72 |
|
| 6.24 |
|
| 135,175 |
|
| 2.63 |
|
| 0.47 |
|
| 0.53 |
|
| 82 |
|
07/01/17 |
| 06/30/18 |
| 10.60 |
|
| 0.23 |
|
| (0.24) |
|
| (0.01) |
|
| (0.24) |
|
| — |
|
| (0.24) |
|
| 10.35 |
|
| (0.12) |
|
| 125,060 |
|
| 2.20 |
|
| 0.45 |
|
| 0.51 |
|
| 35 |
|
Advisor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.80 |
|
| 0.10 |
|
| (0.93) |
|
| (0.83) |
|
| (0.11) |
|
| (0.10) |
|
| (0.21) |
|
| 9.76 |
|
| (7.82) |
|
| 3,273 |
|
| 0.92 |
|
| 0.71 |
|
| 0.75 |
|
| 58 |
|
07/01/20 |
| 06/30/21 |
| 10.82 |
|
| 0.08 |
|
| 0.01 |
|
| 0.09 |
|
| (0.10) |
|
| (0.01) |
|
| (0.11) |
|
| 10.80 |
|
| 0.79 |
|
| 3,661 |
|
| 0.77 |
|
| 0.72 |
|
| 0.75 |
|
| 50 |
|
07/01/19 |
| 06/30/20 |
| 10.49 |
|
| 0.21 |
|
| 0.34 |
|
| 0.55 |
|
| (0.22) |
|
| — |
|
| (0.22) |
|
| 10.82 |
|
| 5.32 |
|
| 3,624 |
|
| 1.99 |
|
| 0.74 |
|
| 0.78 |
|
| 105 |
|
07/01/18 |
| 06/30/19 |
| 10.13 |
|
| 0.24 |
|
| 0.36 |
|
| 0.60 |
|
| (0.24) |
|
| — |
|
| (0.24) |
|
| 10.49 |
|
| 6.01 |
|
| 3,615 |
|
| 2.38 |
|
| 0.72 |
|
| 0.78 |
|
| 82 |
|
07/01/17 |
| 06/30/18 |
| 10.38 |
|
| 0.20 |
|
| (0.24) |
|
| (0.04) |
|
| (0.21) |
|
| — |
|
| (0.21) |
|
| 10.13 |
|
| (0.38) |
|
| 3,782 |
|
| 1.95 |
|
| 0.70 |
|
| 0.76 |
|
| 35 |
|
BROWN
ADVISORY TOTAL RETURN FUND: |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.49 |
|
| 0.17 |
|
| (1.17) |
|
| (1.00) |
|
| (0.18) |
|
| (0.17) |
|
| (0.35) |
|
| 9.14 |
|
| (9.80) |
|
| 389,709 |
|
| 1.64 |
|
| 0.42 |
|
| 0.42 |
|
| 131 |
|
07/01/20 |
| 06/30/21 |
| 10.51 |
|
| 0.14 |
|
| 0.18 |
|
| 0.32 |
|
| (0.15) |
|
| (0.19) |
|
| (0.34) |
|
| 10.49 |
|
| 3.10 |
|
| 437,997 |
|
| 1.37 |
|
| 0.42 |
|
| 0.42 |
|
| 130 |
|
07/01/19 |
| 06/30/20 |
| 10.22 |
|
| 0.27 |
|
| 0.52 |
|
| 0.79 |
|
| (0.28) |
|
| (0.22) |
|
| (0.50) |
|
| 10.51 |
|
| 7.90 |
|
| 388,100 |
|
| 2.62 |
|
| 0.45 |
|
| 0.45 |
|
| 143 |
|
07/01/18 |
| 06/30/19 |
| 9.78 |
|
| 0.32 |
|
| 0.44 |
|
| 0.76 |
|
| (0.32) |
|
| — |
|
| (0.32) |
|
| 10.22 |
|
| 7.90 |
|
| 246,074 |
|
| 3.26 |
|
| 0.49 |
|
| 0.49 |
|
| 106 |
|
07/01/17 |
| 06/30/18 |
| 10.00 |
|
| 0.28 |
|
| (0.22) |
|
| 0.06 |
|
| (0.28) |
|
| — |
|
| (0.28) |
|
| 9.78 |
|
| 0.61 |
|
| 121,381 |
|
| 2.79 |
|
| 0.50 |
|
| 0.50 |
|
| 209 |
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
| |
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
| |
| |
| |
| |
| Asset |
| |
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
| |
| Value, |
|
|
| End
of |
| Investment |
| |
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
|
|
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
Investor
Shares* |
|
|
|
|
|
|
| |
07/01/21 |
| 06/30/22 |
| $ |
10.49 |
|
| 0.16 |
|
| (1.17) |
|
| (1.01) |
|
| (0.18) |
|
| (0.17) |
|
| (0.35) |
|
| $ |
9.13 |
|
| (9.94) |
% |
| $ |
9,401 |
|
| 1.59 |
% |
| 0.47 |
% |
| 0.47 |
% |
| 131 |
% |
07/01/20 |
| 06/30/21 |
| 10.51 |
|
| 0.14 |
|
| 0.18 |
|
| 0.32 |
|
| (0.15) |
|
| (0.19) |
|
| (0.34) |
|
| 10.49 |
|
| 3.05 |
|
| 4,744 |
|
| 1.32 |
|
| 0.47 |
|
| 0.47 |
|
| 130 |
|
07/01/19 |
| 06/30/20 |
| 10.22 |
|
| 0.26 |
|
| 0.52 |
|
| 0.78 |
|
| (0.27) |
|
| (0.22) |
|
| (0.49) |
|
| 10.51 |
|
| 7.85 |
|
| 4,523 |
|
| 2.57 |
|
| 0.50 |
|
| 0.50 |
|
| 143 |
|
07/01/18 |
| 06/30/19 |
| 9.78 |
|
| 0.32 |
|
| 0.43 |
|
| 0.75 |
|
| (0.31) |
|
| — |
|
| (0.31) |
|
| 10.22 |
|
| 7.85 |
|
| 4,916 |
|
| 3.21 |
|
| 0.54 |
|
| 0.54 |
|
| 106 |
|
07/01/17 |
| 06/30/18 |
| 10.00 |
|
| 0.27 |
|
| (0.21) |
|
| 0.06 |
|
| (0.28) |
|
| — |
|
| (0.28) |
|
| 9.78 |
|
| 0.56 |
|
| 2,619 |
|
| 2.74 |
|
| 0.55 |
|
| 0.55 |
|
| 209 |
|
BROWN
ADVISORY SUSTAINABLE BOND FUND: |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.42 |
|
| 0.14 |
|
| (1.13) |
|
| (0.99) |
|
| (0.15) |
|
| (0.14) |
|
| (0.29) |
|
| 9.14 |
|
| (9.71) |
|
| 301,917 |
|
| 1.43 |
|
| 0.44 |
|
| 0.44 |
|
| 113 |
|
07/01/20 |
| 06/30/21 |
| 10.54 |
|
| 0.16 |
|
| 0.10 |
|
| 0.26 |
|
| (0.17) |
|
| (0.21) |
|
| (0.38) |
|
| 10.42 |
|
| 2.44 |
|
| 218,476 |
|
| 1.56 |
|
| 0.45 |
|
| 0.45 |
|
| 89 |
|
07/01/19 |
| 06/30/20 |
| 10.13 |
|
| 0.27 |
|
| 0.54 |
|
| 0.81 |
|
| (0.28) |
|
| (0.12) |
|
| (0.40) |
|
| 10.54 |
|
| 8.14 |
|
| 153,472 |
|
| 2.63 |
|
| 0.48 |
|
| 0.48 |
|
| 97 |
|
07/02/18^ |
| 06/30/19 |
| 9.70 |
|
| 0.30 |
|
| 0.42 |
|
| 0.72 |
|
| (0.29) |
|
| — |
|
| (0.29) |
|
| 10.13 |
|
| 7.60 |
|
| 126,466 |
|
| 3.08 |
|
| 0.55 |
|
| 0.52 |
|
| 66 |
|
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.42 |
|
| 0.13 |
|
| (1.13) |
|
| (1.00) |
|
| (0.14) |
|
| (0.14) |
|
| (0.28) |
|
| 9.14 |
|
| (9.76) |
|
| 12,667 |
|
| 1.38 |
|
| 0.49 |
|
| 0.49 |
|
| 113 |
|
07/01/20 |
| 06/30/21 |
| 10.54 |
|
| 0.16 |
|
| 0.10 |
|
| 0.26 |
|
| (0.17) |
|
| (0.21) |
|
| (0.38) |
|
| 10.42 |
|
| 2.39 |
|
| 5,009 |
|
| 1.51 |
|
| 0.50 |
|
| 0.50 |
|
| 89 |
|
07/01/19 |
| 06/30/20 |
| 10.13 |
|
| 0.26 |
|
| 0.54 |
|
| 0.80 |
|
| (0.27) |
|
| (0.12) |
|
| (0.39) |
|
| 10.54 |
|
| 8.09 |
|
| 2,125 |
|
| 2.58 |
|
| 0.53 |
|
| 0.53 |
|
| 97 |
|
07/01/18 |
| 06/30/19 |
| 9.70 |
|
| 0.29 |
|
| 0.43 |
|
| 0.72 |
|
| (0.29) |
|
| — |
|
| (0.29) |
|
| 10.13 |
|
| 7.54 |
|
| 884 |
|
| 3.03 |
|
| 0.60 |
|
| 0.57 |
|
| 66 |
|
08/07/17^ |
| 06/30/18 |
| 10.00 |
|
| 0.21 |
|
| (0.34) |
|
| (0.13) |
|
| (0.17) |
|
| — |
|
| (0.17) |
|
| 9.70 |
|
| (1.27) |
|
| 54,291 |
|
| 2.41 |
|
| 0.60 |
|
| 0.71 |
|
| 64 |
|
BROWN
ADVISORY MARYLAND BOND FUND: |
| |
| |
| |
| |
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.88 |
|
| 0.19 |
|
| (1.04) |
|
| (0.85) |
|
| (0.23) |
|
| — |
|
| (0.23) |
|
| 9.80 |
|
| (7.90) |
|
| 169,565 |
|
| 1.79 |
|
| 0.47 |
|
| 0.47 |
|
| 22 |
|
07/01/20 |
| 06/30/21 |
| 10.67 |
|
| 0.21 |
|
| 0.26 |
|
| 0.47 |
|
| (0.26) |
|
| — |
|
| (0.26) |
|
| 10.88 |
|
| 4.41 |
|
| 186,483 |
|
| 1.94 |
|
| 0.48 |
|
| 0.48 |
|
| 17 |
|
07/01/19 |
| 06/30/20 |
| 10.80 |
|
| 0.25 |
|
| (0.09) |
|
| 0.16 |
|
| (0.29) |
|
| — |
|
| (0.29) |
|
| 10.67 |
|
| 1.44 |
|
| 176,198 |
|
| 2.31 |
|
| 0.49 |
|
| 0.49 |
|
| 37 |
|
07/01/18 |
| 06/30/19 |
| 10.50 |
|
| 0.28 |
|
| 0.30 |
|
| 0.58 |
|
| (0.28) |
|
| — |
|
| (0.28) |
|
| 10.80 |
|
| 5.65 |
|
| 182,072 |
|
| 2.69 |
|
| 0.49 |
|
| 0.49 |
|
| 33 |
|
07/01/17 |
| 06/30/18 |
| 10.62 |
|
| 0.26 |
|
| (0.12) |
|
| 0.14 |
|
| (0.26) |
|
| — |
|
| (0.26) |
|
| 10.50 |
|
| 1.29 |
|
| 181,230 |
|
| 2.42 |
|
| 0.48 |
|
| 0.48 |
|
| 25 |
|
BROWN
ADVISORY TAX-EXEMPT BOND FUND: |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.50 |
|
| 0.18 |
|
| (1.08) |
|
| (0.90) |
|
| (0.26) |
|
| (0.05) |
|
| (0.31) |
|
| 9.29 |
|
| (8.75) |
|
| 805,608 |
|
| 1.73 |
|
| 0.41 |
|
| 0.41 |
|
| 50 |
|
07/01/20 |
| 06/30/21 |
| 10.08 |
|
| 0.20 |
|
| 0.49 |
|
| 0.69 |
|
| (0.27) |
|
| — |
|
| (0.27) |
|
| 10.50 |
|
| 6.87 |
|
| 1,190,436 |
|
| 1.92 |
|
| 0.40 |
|
| 0.40 |
|
| 47 |
|
07/01/19 |
| 06/30/20 |
| 10.20 |
|
| 0.24 |
|
| (0.08) |
|
| 0.16 |
|
| (0.28) |
|
| — |
|
| (0.28) |
|
| 10.08 |
|
| 1.59 |
|
| 1,072,444 |
|
| 2.38 |
|
| 0.42 |
|
| 0.42 |
|
| 80 |
|
07/02/18^ |
| 06/30/19 |
| 9.90 |
|
| 0.33 |
|
| 0.30 |
|
| 0.63 |
|
| (0.33) |
|
| — |
|
| (0.33) |
|
| 10.20 |
|
| 6.51 |
|
| 950,832 |
|
| 3.36 |
|
| 0.43 |
|
| 0.43 |
|
| 53 |
|
Investor
Shares* |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.50 |
|
| 0.17 |
|
| (1.07) |
|
| (0.90) |
|
| (0.26) |
|
| (0.05) |
|
| (0.31) |
|
| 9.29 |
|
| (8.80) |
|
| 10,484 |
|
| 1.68 |
|
| 0.46 |
|
| 0.46 |
|
| 50 |
|
07/01/20 |
| 06/30/21 |
| 10.09 |
|
| 0.19 |
|
| 0.48 |
|
| 0.67 |
|
| (0.26) |
|
| — |
|
| (0.26) |
|
| 10.50 |
|
| 6.72 |
|
| 11,537 |
|
| 1.87 |
|
| 0.45 |
|
| 0.45 |
|
| 47 |
|
07/01/19 |
| 06/30/20 |
| 10.20 |
|
| 0.24 |
|
| (0.07) |
|
| 0.17 |
|
| (0.28) |
|
| — |
|
| (0.28) |
|
| 10.09 |
|
| 1.64 |
|
| 9,982 |
|
| 2.33 |
|
| 0.47 |
|
| 0.47 |
|
| 80 |
|
07/01/18 |
| 06/30/19 |
| 9.90 |
|
| 0.33 |
|
| 0.30 |
|
| 0.63 |
|
| (0.33) |
|
| — |
|
| (0.33) |
|
| 10.20 |
|
| 6.49 |
|
| 19,395 |
|
| 3.31 |
|
| 0.48 |
|
| 0.48 |
|
| 53 |
|
07/01/17 |
| 06/30/18 |
| 9.94 |
|
| 0.31 |
|
| (0.04) |
|
| 0.27 |
|
| (0.31) |
|
| — |
|
| (0.31) |
|
| 9.90 |
|
| 2.78 |
|
| 439,906 |
|
| 3.16 |
|
| 0.48 |
|
| 0.48 |
|
| 55 |
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
| |
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
| |
| |
| |
| Ratios
to Average Net Assets(b) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Share |
| |
| |
| Net |
| |
| |
| |
| |
| Net |
|
|
| Net |
| |
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| Realized
& |
| |
| |
| |
| |
| Asset |
|
|
| Assets
at |
| Net |
| |
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
| |
| Value, |
|
|
| End
of |
| Investment |
| |
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
|
|
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
BROWN
ADVISORY TAX-EXEMPT SUSTAINABLE BOND FUND: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Investor
Shares* |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| $ |
10.19 |
|
| 0.15 |
|
| (1.10) |
|
| (0.86) |
|
| (0.14) |
|
| (0.10) |
|
| (0.24) |
|
| $ |
9.09 |
|
| (8.60) |
% |
| $ |
325,606 |
|
| 1.49 |
% |
| 0.49 |
% |
| 0.49 |
% |
| 61 |
% |
07/01/20 |
| 06/30/21 |
| 9.88 |
|
| 0.13 |
|
| 0.32 |
|
| 0.45 |
|
| (0.13) |
|
| (0.01) |
|
| (0.14) |
|
| 10.19 |
|
| 4.57 |
|
| 179,123 |
|
| 1.32 |
|
| 0.49 |
% |
| 0.49 |
% |
| 66 |
% |
12/2/2019^ |
| 06/30/20 |
| 10.00 |
|
| 0.08 |
|
| (0.12) |
|
| (0.04) |
|
| (0.08) |
|
| — |
|
| (0.08) |
|
| 9.88 |
|
| (0.37) |
|
| 157,032.00 |
|
| 1.45 |
|
| 0.55 |
|
| 0.55 |
|
| 39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
BROWN
ADVISORY MORTGAGE SECURITIES FUND: |
| |
| |
| |
| |
| |
| |
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.56 |
|
| 0.10 |
|
| (0.92) |
|
| (0.82) |
|
| (0.15) |
|
| — |
|
| (0.15) |
|
| 9.59 |
|
| (7.86) |
|
| 310,388 |
|
| 0.94 |
|
| 0.44 |
|
| 0.44 |
|
| 204 |
|
07/01/20 |
| 06/30/21 |
| 10.46 |
|
| (0.03) |
|
| 0.19 |
|
| 0.16 |
|
| (0.06) |
|
| — |
|
| (0.06) |
|
| 10.56 |
|
| 1.53 |
|
| 288,526 |
|
| (0.27) |
|
| 0.45 |
|
| 0.45 |
|
| 148 |
|
07/01/19 |
| 06/30/20 |
| 10.02 |
|
| 0.11 |
|
| 0.50 |
|
| 0.61 |
|
| (0.17) |
|
| — |
|
| (0.17) |
|
| 10.46 |
|
| 6.09 |
|
| 238,202 |
|
| 1.07 |
|
| 0.47 |
|
| 0.47 |
|
| 139 |
|
07/01/18 |
| 06/30/19 |
| 9.65 |
|
| 0.22 |
|
| 0.42 |
|
| 0.64 |
|
| (0.27) |
|
| — |
|
| (0.27) |
|
| 10.02 |
|
| 6.72 |
|
| 281,728 |
|
| 2.29 |
|
| 0.47 |
|
| 0.47 |
|
| 200 |
|
07/01/17 |
| 06/30/18 |
| 9.87 |
|
| 0.18 |
|
| (0.16) |
|
| 0.02 |
|
| (0.24) |
|
| — |
|
| (0.24) |
|
| 9.65 |
|
| 0.16 |
|
| 300,643 |
|
| 1.86 |
|
| 0.47 |
|
| 0.47 |
|
| 336 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Investor
Shares* |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 10.57 |
|
| 0.09 |
|
| (0.91) |
|
| (0.82) |
|
| (0.14) |
|
| — |
|
| (0.14) |
|
| 9.61 |
|
| (7.81) |
|
| 2,211 |
|
| 0.89 |
|
| 0.49 |
|
| 0.49 |
|
| 204 |
|
07/01/20 |
| 06/30/21 |
| 10.47 |
|
| (0.03) |
|
| 0.19 |
|
| 0.16 |
|
| (0.06) |
|
| — |
|
| (0.06) |
|
| 10.57 |
|
| 1.48 |
|
| 31,876 |
|
| (0.32) |
|
| 0.50 |
|
| 0.50 |
|
| 148 |
|
07/01/19 |
| 06/30/20 |
| 10.02 |
|
| 0.11 |
|
| 0.50 |
|
| 0.61 |
|
| (0.16) |
|
| — |
|
| (0.16) |
|
| 10.47 |
|
| 6.15 |
|
| 9,755 |
|
| 1.02 |
|
| 0.52 |
|
| 0.52 |
|
| 139 |
|
07/01/18 |
| 06/30/19 |
| 9.66 |
|
| 0.22 |
|
| 0.40 |
|
| 0.62 |
|
| (0.26) |
|
| — |
|
| (0.26) |
|
| 10.02 |
|
| 6.55 |
|
| 266 |
|
| 2.24 |
|
| 0.52 |
|
| 0.52 |
|
| 200 |
|
07/01/17 |
| 06/30/18 |
| 9.87 |
|
| 0.18 |
|
| (0.16) |
|
| 0.02 |
|
| (0.23) |
|
| — |
|
| (0.23) |
|
| 9.66 |
|
| 0.21 |
|
| 321 |
|
| 1.81 |
|
| 0.52 |
|
| 0.52 |
|
| 336 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
BROWN
ADVISORY – WMC STRATEGIC EUROPEAN EQUITY FUND: |
| |
| |
| |
| |
| |
| |
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 13.08 |
|
| 0.15 |
|
| (1.68) |
|
| (1.53) |
|
| (0.11) |
|
| (1.10) |
|
| (1.21) |
|
| 10.34 |
|
| (12.75) |
|
| 232,340 |
|
| 1.22 |
|
| 1.04 |
|
| 1.04 |
|
| 43 |
|
07/01/20 |
| 06/30/21 |
| 10.51 |
|
| 0.13 |
|
| 3.20 |
|
| 3.33 |
|
| (0.03) |
|
| (0.73) |
|
| (0.76) |
|
| 13.08 |
|
| 32.55 |
|
| 417,419 |
|
| 1.12 |
|
| 1.05 |
|
| 1.05 |
|
| 51 |
|
07/01/19 |
| 06/30/20 |
| 11.15 |
|
| 0.03 |
|
| (0.07) |
|
| (0.04) |
|
| (0.10) |
|
| (0.50) |
|
| (0.60) |
|
| 10.51 |
|
| (0.66) |
|
| 287,081 |
|
| 0.29 |
|
| 1.09 |
|
| 1.09 |
|
| 53 |
|
07/01/18 |
| 06/30/19 |
| 12.42 |
|
| 0.07 |
|
| (0.16) |
|
| (0.09) |
|
| (0.20) |
|
| (0.98) |
|
| (1.18) |
|
| 11.15 |
|
| 0.84 |
|
| 470,903 |
|
| 0.62 |
|
| 1.07 |
|
| 1.07 |
|
| 34 |
|
07/01/17 |
| 06/30/18 |
| 12.05 |
|
| 0.13 |
|
| 0.35 |
|
| 0.48 |
|
| (0.11) |
|
| — |
|
| (0.11) |
|
| 12.42 |
|
| 3.97 |
|
| 927,916 |
|
| 1.03 |
|
| 1.07 |
|
| 1.07 |
|
| 33 |
|
|
| |
| |
| |
| |
| |
| |
Investor
Shares* |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 13.03 |
|
| 0.13 |
|
| (1.67) |
|
| (1.54) |
|
| (0.09) |
|
| (1.10) |
|
| (1.19) |
|
| 10.30 |
|
| (12.89) |
|
| 19,007 |
|
| 1.07 |
|
| 1.19 |
|
| 1.19 |
|
| 43 |
|
07/01/20 |
| 06/30/21 |
| 10.48 |
|
| 0.12 |
|
| 3.18 |
|
| 3.30 |
|
| (0.02) |
|
| (0.73) |
|
| (0.75) |
|
| 13.03 |
|
| 32.36 |
|
| 39,751 |
|
| 0.97 |
|
| 1.20 |
|
| 1.20 |
|
| 51 |
|
07/01/19 |
| 06/30/20 |
| 11.12 |
|
| 0.01 |
|
| (0.06) |
|
| (0.05) |
|
| (0.09) |
|
| (0.50) |
|
| (0.59) |
|
| 10.48 |
|
| (0.77) |
|
| 222,224 |
|
| 0.14 |
|
| 1.24 |
|
| 1.24 |
|
| 53 |
|
07/01/18 |
| 06/30/19 |
| 12.41 |
|
| 0.05 |
|
| (0.17) |
|
| (0.12) |
|
| (0.19) |
|
| (0.98) |
|
| (1.17) |
|
| 11.12 |
|
| 0.58 |
|
| 18,100 |
|
| 0.47 |
|
| 1.22 |
|
| 1.22 |
|
| 34 |
|
07/01/17 |
| 06/30/18 |
| 12.05 |
|
| 0.11 |
|
| 0.36 |
|
| 0.47 |
|
| (0.11) |
|
| — |
|
| (0.11) |
|
| 12.41 |
|
| 3.85 |
|
| 14,669 |
|
| 0.88 |
|
| 1.22 |
|
| 1.22 |
|
| 33 |
|
|
| |
| |
| |
| |
| |
| |
Financial
Highlights
|
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| |
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|
| From
Investment Operations(a) |
| Distributions
to Shareholders From |
|
|
|
|
|
|
| Ratios
to Average Net Assets(b) |
| |
|
| |
| |
| |
| Net |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
For
a Share |
| |
| |
| Realized |
| |
| |
| |
| |
| Net |
|
|
| Net |
|
|
| |
| |
| |
Outstanding |
| Net
Asset |
| Net |
| & |
|
|
| |
| |
| |
| Asset |
|
|
| Assets
at |
| Net |
|
|
| |
| |
Throughout |
| Value, |
| Investment |
| Unrealized |
|
|
| Net |
| Net |
|
|
| Value, |
|
|
| End
of |
| Investment |
|
|
| Gross |
| Portfolio |
Each
Fiscal Period: |
| Beginning |
| Income |
| Gains |
| |
| Investment |
| Realized |
|
|
| End
of |
| Total |
| Period |
| Income |
| Net |
| Expenses |
| Turnover |
Beginning |
| Ending |
| of
Period |
| (Loss) |
| (Losses) |
| Total |
| Income |
| Gains |
| Total |
| Period |
| Return(c) |
| (000’s) |
| (Loss) |
| Expenses |
| (d) |
| Rate(c) |
Advisor
Shares* |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| $ |
12.88 |
|
| 0.10 |
|
| (1.65) |
|
| (1.55) |
|
| (0.06) |
|
| (1.10) |
|
| (1.16) |
|
| $ |
10.17 |
|
| (13.09) |
% |
| $ |
2,387 |
|
| 0.82 |
% |
| 1.44 |
% |
| 1.44 |
% |
| 43 |
% |
07/01/20 |
| 06/30/21 |
| 10.38 |
|
| 0.08 |
|
| 3.16 |
|
| 3.24 |
|
| (0.01) |
|
| (0.73) |
|
| (0.74) |
|
| 12.88 |
|
| 32.01 |
|
| 3,728 |
|
| 0.72 |
|
| 1.45 |
|
| 1.45 |
|
| 51 |
|
07/01/19 |
| 06/30/20 |
| 11.03 |
|
| (0.01) |
|
| (0.07) |
|
| (0.08) |
|
| (0.07) |
|
| (0.50) |
|
| (0.57) |
|
| 10.38 |
|
| (1.04) |
|
| 3,816 |
|
| (0.11) |
|
| 1.49 |
|
| 1.49 |
|
| 53 |
|
07/01/18 |
| 06/30/19 |
| 12.30 |
|
| 0.02 |
|
| (0.16) |
|
| (0.14) |
|
| (0.15) |
|
| (0.98) |
|
| (1.13) |
|
| 11.03 |
|
| 0.42 |
|
| 7,563 |
|
| 0.22 |
|
| 1.47 |
|
| 1.47 |
|
| 34 |
|
07/01/17 |
| 06/30/18 |
| 11.98 |
|
| 0.08 |
|
| 0.35 |
|
| 0.43 |
|
| (0.11) |
|
| — |
|
| (0.11) |
|
| 12.30 |
|
| 3.54 |
|
| 13,313 |
|
| 0.63 |
|
| 1.47 |
|
| 1.47 |
|
| 33 |
|
BROWN
ADVISORY EMERGING MARKETS SELECT FUND: |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 12.57 |
|
| 0.14 |
|
| (2.50) |
|
| (2.36) |
|
| (0.08) |
|
| — |
|
| (0.08) |
|
| 10.13 |
|
| (18.87) |
|
| 504,216 |
|
| 1.25 |
|
| 1.10 |
|
| 1.10 |
|
| 70 |
|
07/01/20 |
| 06/30/21 |
| 8.86 |
|
| 0.09 |
|
| 3.69 |
|
| 3.78 |
|
| (0.07) |
|
| — |
|
| (0.07) |
|
| 12.57 |
|
| 42.71 |
|
| 529,908 |
|
| 0.78 |
|
| 1.12 |
|
| 1.12 |
|
| 61 |
|
07/01/19 |
| 06/30/20 |
| 9.34 |
|
| 0.11 |
|
| (0.48) |
|
| (0.37) |
|
| (0.11) |
|
| — |
|
| (0.11) |
|
| 8.86 |
|
| (4.04) |
|
| 267,282 |
|
| 1.27 |
|
| 1.16 |
|
| 1.16 |
|
| 62 |
|
07/01/18 |
| 06/30/19 |
| 10.06 |
|
| 0.11 |
|
| (0.48) |
|
| (0.37) |
|
| (0.35) |
|
| — |
|
| (0.35) |
|
| 9.34 |
|
| (3.35) |
|
| 326,693 |
|
| 1.20 |
|
| 1.26 |
|
| 1.26 |
|
| 131 |
|
07/01/17 |
| 06/30/18 |
| 10.17 |
|
| 0.17 |
|
| (0.17) |
|
| — |
|
| (0.11) |
|
| — |
|
| (0.11) |
|
| 10.06 |
|
| (0.12) |
|
| 513,535 |
|
| 1.57 |
|
| 1.15 |
|
| 1.15 |
|
| 13 |
|
Investor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 12.56 |
|
| 0.13 |
|
| (2.50) |
|
| (2.37) |
|
| (0.06) |
|
| — |
|
| (0.06) |
|
| 10.13 |
|
| (18.93) |
|
| 4,368 |
|
| 1.10 |
|
| 1.25 |
|
| 1.25 |
|
| 70 |
|
07/01/20 |
| 06/30/21 |
| 8.85 |
|
| 0.07 |
|
| 3.69 |
|
| 3.76 |
|
| (0.05) |
|
| — |
|
| (0.05) |
|
| 12.56 |
|
| 42.56 |
|
| 5,908 |
|
| 0.63 |
|
| 1.27 |
|
| 1.27 |
|
| 61 |
|
07/01/19 |
| 06/30/20 |
| 9.33 |
|
| 0.10 |
|
| (0.49) |
|
| (0.39) |
|
| (0.09) |
|
| — |
|
| (0.09) |
|
| 8.85 |
|
| (4.29) |
|
| 4,202 |
|
| 1.12 |
|
| 1.31 |
|
| 1.31 |
|
| 62 |
|
07/01/18 |
| 06/30/19 |
| 10.03 |
|
| 0.10 |
|
| (0.48) |
|
| (0.38) |
|
| (0.32) |
|
| — |
|
| (0.32) |
|
| 9.33 |
|
| (3.42) |
|
| 5,063 |
|
| 1.05 |
|
| 1.41 |
|
| 1.41 |
|
| 131 |
|
07/01/17 |
| 06/30/18 |
| 10.15 |
|
| 0.16 |
|
| (0.19) |
|
| (0.03) |
|
| (0.09) |
|
| — |
|
| (0.09) |
|
| 10.03 |
|
| (0.37) |
|
| 38,106 |
|
| 1.42 |
|
| 1.30 |
|
| 1.30 |
|
| 13 |
|
Advisor
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 12.60 |
|
| 0.10 |
|
| (2.50) |
|
| (2.40) |
|
| (0.04) |
|
| — |
|
| (0.04) |
|
| 10.16 |
|
| (19.11) |
|
| 27 |
|
| 0.85 |
|
| 1.50 |
|
| 1.50 |
|
| 70 |
|
07/01/20 |
| 06/30/21 |
| 8.87 |
|
| 0.04 |
|
| 3.70 |
|
| 3.74 |
|
| (0.01) |
|
| — |
|
| 0.01 |
|
| 12.60 |
|
| 42.17 |
|
| 24 |
|
| 0.38 |
|
| 1.52 |
|
| 1.52 |
|
| 61 |
|
07/01/19 |
| 06/30/20 |
| 9.37 |
|
| 0.08 |
|
| (0.50) |
|
| (0.42) |
|
| (0.08) |
|
| — |
|
| (0.08) |
|
| 8.87 |
|
| (4.61) |
|
| 52 |
|
| 0.87 |
|
| 1.56 |
|
| 1.56 |
|
| 62 |
|
07/01/18 |
| 06/30/19 |
| 10.07 |
|
| 0.07 |
|
| (0.47) |
|
| (0.40) |
|
| (0.30) |
|
| — |
|
| (0.30) |
|
| 9.37 |
|
| (3.66) |
|
| 167 |
|
| 0.80 |
|
| 1.66 |
|
| 1.66 |
|
| 131 |
|
07/01/17 |
| 06/30/18 |
| 10.19 |
|
| 0.13 |
|
| (0.18) |
|
| (0.05) |
|
| (0.07) |
|
| — |
|
| (0.07) |
|
| 10.07 |
|
| (0.60) |
|
| 172 |
|
| 1.17 |
|
| 1.55 |
|
| 1.55 |
|
| 13 |
|
BROWN
ADVISORY – BEUTEL GOODMAN LARGE-CAP VALUE FUND: |
| |
| |
| |
Institutional
Shares* |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
07/01/21 |
| 06/30/22 |
| 14.41 |
|
| 0.23 |
|
| (1.42) |
|
| (1.19) |
|
| (0.20) |
|
| (0.98) |
|
| (1.18) |
|
| 12.04 |
|
| (8.68) |
|
| 1,237,283.00 |
|
| 1.71 |
|
| 0.55 |
|
| 0.55 |
|
| 33 |
|
07/01/20 |
| 06/30/21 |
| 10.61 |
|
| 0.20 |
|
| 3.99 |
|
| 4.19 |
|
| (0.39) |
|
| — |
|
| (0.39) |
|
| 14.41 |
|
| 40.12 |
|
| 1,149,351 |
|
| 1.52 |
|
| 0.55 |
|
| 0.55 |
|
| 42 |
|
07/01/19 |
| 06/30/20 |
| 10.47 |
|
| 0.56 |
|
| (0.20) |
|
| 0.36 |
|
| (0.10) |
|
| (0.12) |
|
| (0.22) |
|
| 10.61 |
|
| 3.27 |
|
| 452,012 |
|
| 5.26 |
|
| 0.57 |
|
| 0.57 |
|
| 32 |
|
07/01/18 |
| 06/30/19 |
| 9.58 |
|
| 0.20 |
|
| 0.89 |
|
| 1.09 |
|
| (0.11) |
|
| (0.09) |
|
| (0.20) |
|
| 10.47 |
|
| 11.62 |
|
| 296,963 |
|
| 1.97 |
|
| 0.60 |
|
| 0.60 |
|
| 45 |
|
02/13/18^ |
| 06/30/18 |
| 10.00 |
|
| 0.06 |
|
| (0.48) |
|
| (0.42) |
|
| — |
|
| — |
|
| — |
|
| 9.58 |
|
| (4.20) |
|
| 151,004 |
|
| 1.61 |
|
| 0.67 |
|
| 0.67 |
|
| 11 |
|
Investors
Shares* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
7/1/2021^ |
| 06/30/22 |
| 14.41 |
|
| 0.21 |
|
| (1.42) |
|
| (1.21) |
|
| (0.20) |
|
| (0.98) |
|
| (1.18) |
|
| 12.02 |
|
| (8.87) |
|
| 208.00 |
|
| 1.56 |
|
| 0.70 |
|
| 0.70 |
|
| 33 |
|
|
|
|
|
| |
* |
Redemption
fees of less than $0.005/share are not presented and are included in net
realized & unrealized gains (losses) from investment operations. The
increase in the portfolio turnover rate for the Brown Advisory Emerging
Markets Select Fund for the year ended June 30, 2019 was primarily the
result of a change in sub-advisers during the year. |
^ |
Information
presented is for the entire history of the share class. |
(a) |
Calculated
based on average shares outstanding during the fiscal period. |
(b) |
Annualized
for periods less than one year. Ratios include only income and
expenses of the funds themselves, as presented in the Statements of
Operations, and do not include any additional or pro rata amounts of
income or expenses from the ownership of any other investment companies
(as applicable). |
(c) |
Not
annualized for periods less than one year. Portfolio turnover rates
are calculated at the fund level (not by individual share
class). |
(d) |
Reflects
the expense ratio excluding any expense waivers or expense
recoupments. |
At
Brown Advisory, we believe that you deserve frank and open communication on all
aspects of our relationship. In this spirit, we provide this annual summary of
our policies relating to confidentiality and privacy of client information,
mutual funds, conflicts of interest, trading commissions, proxy voting and Form
ADV annual notice.
CONFIDENTIALITY
AND PRIVACY POLICY
Brown
Advisory takes the confidentiality of your personal information and the privacy
of your account very seriously. Our commitment to safeguard your personal
information goes beyond our legal obligation to process your transactions
accurately and securely. Whether we serve you online, in person, on the
telephone or by mail, the principles that guide the way in which we conduct
business are built upon the core values of trust and integrity.
We
limit access to your personal information to only those employees with a
business reason to know such information. We train and consistently remind all
employees to respect client privacy and to recognize the importance of the
confidentiality of such information. Those who violate our privacy policy are
subject to disciplinary action. This commitment also applies to the sharing of
information among Brown Advisory and its affiliates.
We
maintain physical, electronic and procedural safeguards that comply with
applicable laws and regulations to protect your personal information, including
various measures to protect your personal information while it is stored
electronically.
Federal
law requires us to inform you that we have on record personal information about
you and that we obtain such information from you directly (e.g., information you
provide to us on account applications and other forms, such as your name,
address, social security number, occupation, assets and income) and indirectly
(e.g., information on our computer systems about your transactions with us, such
as your account balance and account holdings). Any personal information you
choose to provide is kept confidential and allows us to: (i) provide better and
more complete investment and strategic advice; (ii) develop new services that
meet additional needs you may have; and, (iii) comply with legal and regulatory
requirements.
In
addition, in the normal conduct of our business, it may become necessary for us
to share information relating to our clients that we have on record, as
described above, with companies not affiliated with us who are under contract to
perform services on our behalf. For example, we have contracted with companies
to assist us in complying with anti-terrorist and anti-money laundering
statutory requirements (including the identification and reporting of activities
that may involve terrorist acts or money laundering activities), companies that
provide clearing services, and other vendors that provide services directly
related to your account relationship with us. Our agreements with these
companies require that they keep your information confidential and not use such
information for any unrelated purpose.
We
do not sell information about you to third parties, and we do not otherwise
disclose information to third parties without your permission or unless required
by law.
FOR
MORE INFORMATION
Annual/Semi-Annual
Reports
The
annual and semi-annual reports provide additional information about each Fund’s
investments, as well as the most recent financial reports and portfolio
listings. The annual
report
contains a discussion of the market conditions and investment strategies that
affected each Fund’s performance during the last fiscal year.
Statement
of Additional Information (“SAI”)
The
SAI provides more detailed information about each Fund and is incorporated by
reference into, and is legally part of, this Prospectus.
Contacting
the Fund
You
can get free copies of the Prospectus, SAI and annual/semi-annual reports or
other information by visiting the Funds’ website at www.brownadvisory.com/mf or
by contacting the Funds at:
Brown
Advisory Funds
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701
800-540-6807
(toll free) or 414-203-9064
Securities
and Exchange Commission Information
You
may also view and copy information about the Trust and the Funds, including the
SAI and Annual and Semi-Annual Reports to Shareholders, by visiting the SEC’s
Internet site at www.sec.gov. You may also obtain copies of Fund documents by
paying a duplicating fee and sending an electronic request to the following
e-mail address: [email protected].
Distributor
ALPS
Distributors, Inc.
1290
Broadway Street, Suite 1100
Denver,
CO 80203
|
|
|
|
| |
BROWN
ADVISORY GROWTH EQUITY FUND
Institutional
Shares (BAFGX)
Investor
Shares (BIAGX)
Advisor
Shares (BAGAX) |
BROWN
ADVISORY INTERMEDIATE INCOME FUND
Institutional
Shares (Not Available for Sale)
Investor
Shares (BIAIX)
Advisor
Shares (BAIAX) |
BROWN
ADVISORY FLEXIBLE EQUITY FUND
Institutional
Shares (BAFFX)
Investor
Shares (BIAFX)
Advisor
Shares (BAFAX) |
BROWN
ADVISORY TOTAL RETURN FUND
Institutional
Shares (BAFTX)
Investor
Shares (BIATX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY EQUITY INCOME FUND
Institutional
Shares (BAFDX)
Investor
Shares (BIADX)
Advisor
Shares (BADAX) |
BROWN
ADVISORY SUSTAINABLE BOND FUND
Institutional
Shares (BAISX)
Investor
Shares (BASBX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SUSTAINABLE GROWTH FUND
Institutional
Shares (BAFWX)
Investor
Shares (BIAWX)
Advisor
Shares (BAWAX) |
BROWN
ADVISORY MARYLAND BOND FUND
Institutional
Shares (Not Available for Sale)
Investor
Shares (BIAMX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY MID-CAP GROWTH FUND
Institutional
Shares (BAFMX)
Investor
Shares (BMIDX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY TAX-EXEMPT BOND FUND
Institutional
Shares (BTEIX)
Investor
Shares (BIAEX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SMALL-CAP GROWTH FUND
Institutional
Shares (BAFSX)
Investor
Shares (BIASX)
Advisor
Shares (BASAX) |
BROWN
ADVISORY TAX-EXEMPT SUSTAINABLE BOND FUND
Institutional
Shares (Not Available for Sale)
Investor
Shares (BITEX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SMALL-CAP FUNDAMENTAL VALUE FUND
Institutional
Shares (BAUUX)
Investor
Shares (BIAUX)
Advisor
Shares (BAUAX) |
BROWN
ADVISORY MORTGAGE SECURITIES FUND
Institutional
Shares (BAFZX)
Investor
Shares (BIAZX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY SUSTAINABLE SMALL-CAP CORE FUND
Institutional
Shares (BAFYX)
Investor
Shares (BIAYX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY – WMC STRATEGIC EUROPEAN EQUITY FUND
Institutional
Shares (BAFHX)
Investor
Shares (BIAHX)
Advisor
Shares (BAHAX) |
BROWN
ADVISORY GLOBAL LEADERS FUND
Institutional
Shares (BAFLX)
Investor
Shares (BIALX)
Advisor
Shares (Not Available for Sale) |
BROWN
ADVISORY EMERGING MARKETS SELECT FUND
Institutional
Shares (BAFQX)
Investor
Shares (BIAQX)
Advisor
Shares (BAQAX) |
BROWN
ADVISORY SUSTAINABLE INTERNATIONAL LEADERS FUND
Institutional
Shares (BAILX)
Investor
Shares (BISLX)
Advisor
Shares (Not
Available for Sale) |
BROWN
ADVISORY – BEUTEL GOODMAN LARGE-CAP VALUE FUND
Institutional
Shares (BVALX)
Investor
Shares (BIAVX)
Advisor
Shares (Not Available for Sale) |
Investment
Company Act File No. 811‑22708