Brown Advisory Global Leaders

This a high-conviction portfolio of 30-40 stocks, which invests in businesses from around the world that deliver exceptional outcomes for their customers. The managers invest for the long term in companies which can compound their returns for many years to come.

Our opinion

This fund has a clear philosophy. We particularly like the relentless focus on businesses which deliver 'superior customer outcomes', which appears repeatedly throughout this fund's rigorous process. We applaud the emphasis on high quality fundamental stock research. The managers' willingness to analyse their own performance and mistakes, and their constant desire to improve is a further positive. Performance has been excellent thus far, and we believe the fund can continue to deliver in the future.

Fund manager

Mick Dillon joined Brown Advisory in 2014, before launching this fund in 2015. Prior to joining Brown Advisory Mick was co-head of Asian equities at HSBC in Hong Kong. He is supported by Bertie Thomson, who became co-manager in 2016. Bertie spent 13 years at Aberdeen Asset Management as a senior investment manager in the Pan-European team. The managers are supported by a team of equity analysts who work in Baltimore and London.

Mick Dillon_Brown Advisory

As keen sportsmen we believe that it is possible, with the aid of effective coaching and feedback, to continually improve as investors. Investment managers should have the same mindset as topflight tennis players and concert pianists – the belief that they can always get better

Mick DillonFund manager

Investment process

The managers begin by screening companies for high returns on capital, free cash-flow, valuation and sales growth. This reduces their investable universe from around 4,500 to 300 companies. All ideas then go through a four-stage checklist process.

Firstly, companies need to offer an exceptional customer outcome. Typically these business will have a dominant market position and multiple competitive advantages. Secondly, companies must have a 20% return on invested capital or a pathway to it within 5 years. Thirdly, company management must demonstrate that it has allocated capital skilfully and ethically in the past. Finally, the valuation must be appealing. To become a Global Leader, an investment must pass all four stages of the process.

Once they have passed, the research team will undertake full due diligence on the stock including detailed models and company visits. The managers will also interview the company's customers to really understand if the product or service it is selling is indispensable. The team also conducts an Environmental, Social and Governance analysis to ensure that the business is sustainable.

ESG

ESG - Integrated  

During the investment process, quality fundamental and ESG research are treated as one, giving fully integrated analysis. The managers believe this helps enhance returns by creating a universe of responsible, innovative and forward-thinking companies. This work is conducted by Brown Advisory’s prominent and growing ESG research team. This team will gather its own proprietary information from a variety of sources including company calls, corporate reports, industry journals and expert networks, to find both risks and opportunities of ESG factors. Risks could include excessive pay, environmental issues, or data security, for example, whereas opportunities are created from sustainability or environmentally-driven business models. The team will create a score for each company with a score of one being the best, and three being the worst. These scores are then added or taken away from the stock during the analysis process.

Risk

The managers look at risk as being a permanent loss of capital. Risk is embedded throughout the investment process. They are less concerned with risk relative to a benchmark. Positions are sized so that stocks with the highest conviction and greatest certainty have the highest weights in the portfolio. The team is cognisant of style and other macro risks, which it seeks to minimise. The managers use a third party consultant to analyse their decision making for behavioural errors.

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The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.