UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21829
BBH TRUST
On behalf of the following series:
BBH Core Select
BBH Global Core Select
BBH International Equity Fund
BBH Limited Duration Fund
BBH Intermediate Municipal Bond Fund
(Exact name of registrant as specified in charter)
140 Broadway, New York, NY 10005
(Address of principal executive offices) (Zip Code)
Corporation Services Company
2711 Centerville Road, Suite 400, Wilmington, DE 19808
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 575-1265
Date of fiscal year end: October 31
Date of reporting period: April 30, 2016
Item 1. Report to Stockholders.
BBH CORE SELECT
PORTFOLIO ALLOCATION
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Basic Materials | $ | 167,955,415 | 4.1 | % | ||||||
Communications | 580,313,763 | 14.2 | ||||||||
Consumer Cyclical | 263,722,282 | 6.5 | ||||||||
Consumer Non-Cyclical | 1,038,806,855 | 25.5 | ||||||||
Energy | 295,180,985 | 7.2 | ||||||||
Financials | 822,381,945 | 20.2 | ||||||||
Industrials | 65,468,897 | 1.6 | ||||||||
Technology | 517,336,664 | 12.7 | ||||||||
Repurchase Agreements | 198,500,000 | 4.9 | ||||||||
U.S. Treasury Bills | 124,948,472 | 3.0 | ||||||||
Cash and Other Assets in Excess of Liabilities | 3,771,734 | 0.1 | ||||||||
NET ASSETS | $ | 4,078,387,012 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (92.0%) | ||||||||||
BASIC MATERIALS (4.1%) | ||||||||||
1,283,018 | Celanese Corp. (Series A) | $ | 90,709,373 | |||||||
657,637 | Praxair, Inc. | 77,246,042 | ||||||||
Total Basic Materials | 167,955,415 | |||||||||
COMMUNICATIONS (14.2%) | ||||||||||
254,706 | Alphabet, Inc. (Class C)1 | 176,513,805 | ||||||||
4,163,690 | Comcast Corp. (Class A) | 252,985,804 | ||||||||
4,866,350 | Discovery Communications, Inc. (Class C)1 | 130,320,853 | ||||||||
838,858 | eBay, Inc.1 | 20,493,301 | ||||||||
Total Communications | 580,313,763 | |||||||||
CONSUMER CYCLICAL (6.5%) | ||||||||||
1,852,676 | Bed, Bath & Beyond, Inc.1 | 87,483,361 | ||||||||
3,361,584 | Liberty Interactive Corp. QVC Group (Class A)1 | 88,073,501 | ||||||||
1,318,460 | Wal-Mart Stores, Inc. | 88,165,420 | ||||||||
Total Consumer Cyclical | 263,722,282 | |||||||||
CONSUMER NON-CYCLICAL (25.5%) | ||||||||||
1,202,824 | Baxalta, Inc. | 50,458,467 | ||||||||
628,469 | Dentsply Sirona, Inc. | 37,456,752 | ||||||||
943,814 | Diageo, Plc. ADR | 102,243,371 | ||||||||
395,140 | FleetCor Technologies, Inc.1 | 61,120,255 | ||||||||
337,954 | Henry Schein, Inc.1 | 57,012,840 | ||||||||
2,040,887 | Nestle SA ADR | 152,188,944 | ||||||||
2,175,071 | Novartis AG ADR | 165,240,144 | ||||||||
3,121,519 | PayPal Holdings, Inc.1 | 122,301,114 | ||||||||
649,037 | Perrigo Co., Plc. | 62,742,407 | ||||||||
1,489,314 | Unilever NV (NY Shares) | 65,559,602 | ||||||||
3,454,879 | Zoetis, Inc. | 162,482,959 | ||||||||
Total Consumer Non-Cyclical | 1,038,806,855 | |||||||||
ENERGY (7.2%) | ||||||||||
1,518,433 | EOG Resources, Inc. | 125,452,934 | ||||||||
988,574 | Occidental Petroleum Corp. | 75,774,197 | ||||||||
1,169,453 | Schlumberger, Ltd. | 93,953,854 | ||||||||
Total Energy | 295,180,985 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 3 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
FINANCIALS (20.2%) | ||||||||||
1,263 | Berkshire Hathaway, Inc. (Class A)1 | $ | 276,597,000 | |||||||
3,735,171 | Progressive Corp. | 121,766,574 | ||||||||
5,267,207 | US Bancorp | 224,857,067 | ||||||||
3,984,820 | Wells Fargo & Co. | 199,161,304 | ||||||||
Total Financials | 822,381,945 | |||||||||
INDUSTRIALS (1.6%) | ||||||||||
1,113,606 | Waste Management, Inc. | 65,468,897 | ||||||||
Total Industrials | 65,468,897 | |||||||||
TECHNOLOGY (12.7%) | ||||||||||
2,806,871 | Microsoft Corp. | 139,978,657 | ||||||||
6,316,874 | Oracle Corp. | 251,790,598 | ||||||||
2,485,499 | QUALCOMM, Inc. | 125,567,409 | ||||||||
Total Technology | 517,336,664 | |||||||||
Total Common Stocks (Identified cost $2,657,476,721) | 3,751,166,806 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
REPURCHASE AGREEMENTS (4.9%) | ||||||||||||||||||
$198,500,000 | National Australia Bank (Agreement dated 04/29/2016 collateralized by U.S. Treasury Inflation Indexed Note 0.125%, due 04/15/20, original par $196,535,000, valued at $202,470,000) | 05/02/16 | 0.280 | % | $ | 198,500,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $198,500,000) | 198,500,000 | |||||||||||||||||
U.S. TREASURY BILLS (3.0%) | ||||||||||||||||||
125,000,000 | U.S. Treasury Bill2 | 06/23/16 | 0.000 | 124,948,472 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $124,948,472) | 124,948,472 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $2,980,925,193)3 | 99.9 | % | $ | 4,074,615,278 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 0.1 | % | 3,771,734 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 4,078,387,012 |
1 | Non-income producing security. |
2 | Security issued with a zero coupon. Income is recognized through accretion of discount. |
3 | The aggregate cost for federal income tax purposes is $2,980,925,193, the aggregate gross unrealized appreciation is $1,148,184,370 and the aggregate gross unrealized depreciation is $54,494,285, resulting in net unrealized appreciation of $1,093,690,085. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 5 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical investments. |
— | Level 2 – significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Investments, at value | Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* | Significant Other Observable Inputs (Level 2)* | Significant Unobservable Inputs (Level 3)* | Balance as of April 30, 2016 | ||||||||||||||
Basic Materials | $ | 167,955,415 | $ | – | $ | – | $ | 167,955,415 | ||||||||||
Communications | 580,313,763 | – | – | 580,313,763 | ||||||||||||||
Consumer Cyclical | 263,722,282 | – | – | 263,722,282 | ||||||||||||||
Consumer Non-Cyclical | 1,038,806,855 | – | – | 1,038,806,855 | ||||||||||||||
Energy | 295,180,985 | – | – | 295,180,985 | ||||||||||||||
Financials | 822,381,945 | – | – | 822,381,945 | ||||||||||||||
Industrials | 65,468,897 | – | – | 65,468,897 | ||||||||||||||
Technology | 517,336,664 | – | – | 517,336,664 | ||||||||||||||
Repurchase Agreements | – | 198,500,000 | – | 198,500,000 | ||||||||||||||
U.S. Treasury Bills | – | 124,948,472 | – | 124,948,472 | ||||||||||||||
Investments, at value | $ | 3,751,166,806 | $ | 323,448,472 | $ | – | $ | 4,074,615,278 |
* | The Fund’s policy is to disclose transfers between levels based on valuations at the end of the reporting period. |
There were no transfers between Levels 1, 2 or 3 during the period ended April 30, 2016. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 7 |
BBH CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2016 (unaudited)
ASSETS: | |||||||||
Investments in securities, at value (Identified cost $2,782,425,193) | $ | 3,876,115,278 | |||||||
Repurchase agreements (Identified cost $198,500,000) | 198,500,000 | ||||||||
Cash | 1,931,793 | ||||||||
Receivables for: | |||||||||
Dividends | 9,273,340 | ||||||||
Shares sold | 851,814 | ||||||||
Investment advisory and administrative fees waiver reimbursement | 154,895 | ||||||||
Interest | 3,161 | ||||||||
Prepaid assets | 11,091 | ||||||||
Total Assets | 4,086,841,372 | ||||||||
LIABILITIES: | |||||||||
Payables for: | |||||||||
Shares redeemed | 4,542,045 | ||||||||
Investment advisory and administrative fees | 2,748,283 | ||||||||
Shareholder servicing fees | 678,793 | ||||||||
Custody and fund accounting fees | 100,706 | ||||||||
Distributors fees | 56,460 | ||||||||
Professional fees | 45,375 | ||||||||
Transfer agent fees | 28,556 | ||||||||
Board of Trustees’ fees | 4,542 | ||||||||
Accrued expenses and other liabilities | 249,600 | ||||||||
Total Liabilities | 8,454,360 | ||||||||
NET ASSETS | $ | 4,078,387,012 | |||||||
Net Assets Consist of: | |||||||||
Paid-in capital | $ | 2,751,861,445 | |||||||
Undistributed net investment income | 15,866,049 | ||||||||
Accumulated net realized gain on investments in securities | 216,969,433 | ||||||||
Net unrealized appreciation/(depreciation) on investments in securities | 1,093,690,085 | ||||||||
Net Assets | $ | 4,078,387,012 | |||||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | |||||||||
CLASS N SHARES | |||||||||
($3,850,123,865 ÷ 183,883,015 shares outstanding) | $20.94 | ||||||||
RETAIL CLASS SHARES | |||||||||
($228,263,147 ÷ 17,713,064 shares outstanding) | $12.89 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2016 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $1,723,592) | $ | 40,109,463 | ||||
Interest and other income | 420,640 | |||||
Total Income | 40,530,103 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 17,109,612 | |||||
Shareholder servicing fees | 4,363,656 | |||||
Distributors fees | 344,853 | |||||
Transfer agent fees | 163,806 | |||||
Custody and fund accounting fees | 147,674 | |||||
Professional fees | 39,914 | |||||
Board of Trustees’ fees | 30,076 | |||||
Miscellaneous expenses | 349,965 | |||||
Total Expenses | 22,549,556 | |||||
Investment advisory and administrative fees waiver | (423,832 | ) | ||||
Expense offset arrangement | (981 | ) | ||||
Net Expenses | 22,124,743 | |||||
Net Investment Income | 18,405,360 | |||||
NET REALIZED AND UNREALIZED LOSS: | ||||||
Net realized gain on investments in securities | 217,391,784 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (291,876,042 | ) | ||||
Net Realized and Unrealized Loss | (74,484,258 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | $ | (56,078,898 | ) |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 9 |
BBH CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 18,405,360 | $ | 29,393,784 | ||||||
Net realized gain on investments in securities | 217,391,784 | 395,381,395 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (291,876,042 | ) | (225,720,467 | ) | ||||||
Net increase/(decrease) in net assets resulting from operations | (56,078,898 | ) | 199,054,712 | |||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (24,454,690 | ) | (36,725,174 | ) | ||||||
Retail Class | (1,357,111 | ) | (2,814,050 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (314,097,487 | ) | (89,273,564 | ) | ||||||
Retail Class | (29,099,366 | ) | (9,365,888 | ) | ||||||
Total dividends and distributions declared | (369,008,654 | ) | (138,178,676 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 233,488,636 | 2,175,445,135 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 312,156,128 | 111,485,040 | ||||||||
Proceeds from short-term redemption fees | 11,700 | 11,858 | ||||||||
Cost of shares redeemed* | (1,292,319,272 | ) | (3,314,063,614 | ) | ||||||
Net decrease in net assets resulting from share transactions | (746,662,808 | ) | (1,027,121,581 | ) | ||||||
Total decrease in net assets | (1,171,750,360 | ) | (966,245,545 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 5,250,137,372 | 6,216,382,917 | ||||||||
End of period (including undistributed net investment income of $15,866,049 and $23,272,490, respectively) | $ | 4,078,387,012 | $ | 5,250,137,372 |
* | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | $ | 15.07 | $ | 13.91 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.09 | 0.12 | 0.14 | 0.13 | 0.10 | 0.12 | |||||||||||||||||||||
Net realized and unrealized gain/(loss) | (0.26 | ) | 0.64 | 1.70 | 3.95 | 2.54 | 1.15 | ||||||||||||||||||||
Total income/(loss) from investment operations | (0.17 | ) | 0.76 | 1.84 | 4.08 | 2.64 | 1.27 | ||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.12 | ) | (0.14 | ) | (0.10 | ) | (0.10 | ) | (0.07 | ) | (0.07 | ) | |||||||||||||||
From net realized gains | (1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | (0.18 | ) | (0.04 | ) | |||||||||||||||
Total dividends and distributions | (1.68 | ) | (0.49 | ) | (0.53 | ) | (0.33 | ) | (0.25 | ) | (0.11 | ) | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
Net asset value, end of period | $ | 20.94 | $ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | $ | 15.07 | |||||||||||||||
Total return | (0.59 | )%3 | 3.47 | % | 8.90 | % | 23.78 | % | 17.86 | % | 9.19 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 3,850 | $ | 4,970 | $ | 5,816 | $ | 5,645 | $ | 3,049 | $ | 809 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.01 | %4 | 1.07 | % | 1.07 | % | 1.09 | % | 1.12 | % | 1.14 | % | |||||||||||||||
Fee waiver | 0.01 | %4,5 | 0.07 | %5 | 0.07 | %5 | 0.09 | %5 | 0.12 | %5 | 0.13 | %5 | |||||||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.01 | % | |||||||||||||||
Ratio of expenses to average net assets after reductions | 1.00 | %4 | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.86 | %4 | 0.53 | % | 0.66 | % | 0.65 | % | 0.63 | % | 0.85 | % | |||||||||||||||
Portfolio turnover rate | 7 | %3 | 8 | % | 8 | % | 12 | % | 14 | % | 17 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the six months ended April 30, 2016 and the fiscal years ended October 31, 2015, 2014, 2013, 2012 and 2011, reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.00%. The agreement is effective for the period beginning on July 14, 2010 through April 1, 2014, and has been renewed by all parties to the agreement through March 1, 2017. For the six months ended April 30, 2016 and the fiscal years ended October 31, 2015, 2014, 2013, 2012 and 2011, the waived fees were $281,060, $3,938,986, $4,238,260, $3,983,262, $1,853,202 and $793,607, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 11 |
BBH CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | For the period from March 25, 2011 (commencement of operations) to October 31, 2011 | ||||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | $ | 10.11 | $ | 10.00 | ||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||
Net investment income1 | 0.04 | 0.03 | 0.06 | 0.06 | 0.05 | 0.02 | ||||||||||||||||||||
Net realized and unrealized gain/(loss) | (0.17 | ) | 0.42 | 1.11 | 2.60 | 1.69 | 0.09 | |||||||||||||||||||
Total income/(loss) from investment operations | (0.13 | ) | 0.45 | 1.17 | 2.66 | 1.74 | 0.11 | |||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||||
From net investment income | (0.07 | ) | (0.11 | ) | (0.07 | ) | (0.05 | ) | (0.06 | ) | — | |||||||||||||||
From net realized gains | (1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | (0.18 | ) | — | |||||||||||||||
Total dividends and distributions | (1.63 | ) | (0.46 | ) | (0.50 | ) | (0.28 | ) | (0.24 | ) | — | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||
Net asset value, end of period | $ | 12.89 | $ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | $ | 10.11 | ||||||||||||||
Total return | (0.65 | )%3 | 3.14 | % | 8.63 | % | 23.42 | % | 17.64 | % | 1.10 | %3 | ||||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||||
Net assets, end of period (in millions) | $228 | $280 | $400 | $367 | $267 | $185 | ||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 1.37 | %4 | 1.39 | % | 1.40 | % | 1.42 | % | 1.43 | % | 1.59 | %4 | ||||||||||||||
Fee waiver | 0.12 | %4,5 | 0.14 | %5 | 0.15 | %5 | 0.17 | %5 | 0.18 | %5 | 0.33 | %4,5 | ||||||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.01 | %4 | ||||||||||||||
Ratio of expenses to average net assets after reductions | 1.25 | %4 | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | %4 | ||||||||||||||
Ratio of net investment income to average net assets | 0.61 | %4 | 0.24 | % | 0.40 | % | 0.44 | % | 0.50 | % | 0.37 | %4 | ||||||||||||||
Portfolio turnover rate | 7 | %3 | 8 | % | 8 | % | 12 | % | 14 | % | 17 | %7 |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the six months ended April 30, 2016, the fiscal years ended October 31, 2015, 2014, 2013, 2012 and period ended October 31, 2011, reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.25%. The agreement is effective for the period beginning on July 14, 2010 through April 1, 2014, and has been renewed by all parties to the agreement through March 1, 2017. For the six months ended April 30, 2016, fiscal years ended October 31, 2015, 2014, 2013, 2012 and period ended October 31, 2011, the waived fees were $142,772, $551,384, $577,948, $568,410, $633,118 and $133,178, respectively. |
6 | Less than 0.01%. |
7 | Represents Fund portfolio turnover for the twelve months ended October 31, 2011. |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
April 30, 2016 (unaudited)
1. | Organization. The Fund is a separate, non-diversified series of BBH Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on November 2, 1998. The Fund offers Class N and Retail Class shares. On October 1, 2010, the Board established a new class of shares designated as “Retail Class”, which commenced operations on March 25, 2011. Class N and Retail Class shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Retail Class shares automatically convert to any other share class of the Fund. Effective January 29, 2016, the Fund reopened to new investors. As of April 30, 2016, there were six series of the Trust. |
2. | Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services – Investments Companies. The following summarizes significant accounting policies of the Fund: |
A. | Valuation of Investments. (1) The value of investments listed on a securities exchange is based on the last sale price on that exchange prior to the time when assets are valued, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchange; (2) securities not traded on an exchange are valued at the average of the quoted bid and asked prices in the over-the counter market; (3) securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board; (4) short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent “fair value” by the Board. |
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Dividend income and other distributions received from portfolio securities are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of securities received at ex-date. Distributions received on securities that represent a return of capital or a capital gain are recorded as a reduction of cost of investments |
financial statements april 30, 2016 | 13 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
and/or as a realized gain. Interest income is accrued daily. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. | Repurchase Agreements. The Fund may enter into repurchase agreements. Repurchase agreements are transactions in which the Fund buys a security from a dealer or bank and agrees to sell the security back at a mutually agreed upon time and price. The repurchase price normally is in excess of the purchase price, reflecting an agreed upon interest rate. The rate is effective for the period of time that assets of the Fund are invested in the agreement and is not related to the coupon rate on the underlying security. The Fund will enter into repurchase agreements only with banks and other recognized financial institutions, such as securities dealers, deemed creditworthy by the investment adviser. The Fund’s custodian or sub-custodian will take possession of the securities subject to repurchase agreements. The investment adviser, custodian or sub-custodian will monitor the value of the underlying collateral each day to ensure that the value of the security always equals or exceeds the repurchase price. |
E. | Federal Income Taxes. It is the Trust’s policy to comply with the requirements of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
provision is required. The Fund files a tax return annually using tax accounting methods required under provisions of the Code, which may differ from GAAP, which is the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported in these financial statements may differ from that reported on the Fund’s tax return, due to certain book-to-tax timing differences such as losses deferred due to “wash sale” transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV. |
The Fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (“ASC 740”). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The Fund did not have any unrecognized tax benefits as of October 31, 2015, nor were there any increases or decreases in unrecognized tax benefits for the year then ended. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statement of Operations. During the six months ended April 30, 2016, the Fund did not incur any such interest or penalties. The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for the prior three fiscal years. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. |
F. | Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, if any, are paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amounts of $338,552,177 and $30,456,477 to Class N shares and Retail Class shareholders, respectively, during the six months ended April 30, 2016. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. |
financial statements april 30, 2016 | 15 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2015: | $ | 57,953,050 | $ | 80,225,626 | $ | 138,178,676 | – | $ | 138,178,676 | |||||||||||||||
2014: | 57,474,808 | 95,228,590 | 152,703,398 | – | 152,703,398 |
Components of accumulated earnings/(deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Accumulated earnings | Accumulated capital and other losses | Other book/tax temporary differences | Unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2015: | $ | 23,272,490 | $ | 343,185,744 | $ | 366,458,234 | – | $ | (411,242 | ) | $ | 1,385,566,127 | $ | 1,751,613,119 | ||||||||||||||||||
2014: | 51,831,756 | 80,208,174 | 132,039,930 | – | (1,024,321 | ) | 1,611,286,594 | 1,742,302,203 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
G. | Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. | Fees and Other Transactions with Affiliates. |
A. | Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (“Agreement”) with the Trust, Brown Brothers Harriman & Co. (“BBH”) through a separately identifiable department (“SID” or “Investment Adviser”) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund pays a combined fee for investment advisory and administrative services calculated daily and paid monthly at an annual rate equivalent to 0.80% per annum on the first $3,000,000,000 of the Fund’s average daily net assets and 0.75% per annum on the Fund’s average daily net assets over $3,000,000,000 (a flat rate of 0.80% prior to November 1, 2015). For the six months ended April 30, 2016, the Fund incurred $17,109,612 under the Agreement. |
B. | Investment Advisory and Administrative Fee Waivers. Effective July 14, 2010, the Investment Adviser contractually agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary course of the Fund’s business and for Retail Class, amounts payable pursuant to any plan adopted in accordance with Rule 12b-1) of Class N and Retail Class to 1.00%. The agreement will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. The agreement may only be terminated during its term with approval of the Fund’s Board of Trustees. For the six months ended April 30, 2016, the Investment Adviser waived fees in the amount of $281,060 and $142,772 for Class N and Retail Class, respectively. |
C. | Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% (0.25% prior to November 1, 2015) of Class N and Retail Class shares’ average daily net assets. For the six months ended April 30, 2016, the Fund incurred shareholder servicing fees in the amount of $4,118,279 and $245,377 for Class N and Retail Class, respectively. |
D. | Distribution (12b-1) Fees. The Fund has adopted a distribution plan pursuant to Rule 12b-1 for Retail Class shares that allows the Fund to pay distribution and other fees for the sale of its shares and for services provided to shareholders. Because these fees are paid out of the Fund’s assets continuously, over time these fees will increase the cost of investment and may cost the shareholder more than paying other types of sales charges. The maximum annual distribution fee for Retail Class |
financial statements april 30, 2016 | 17 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
shares is 0.25% of the average daily net assets of the Retail Class shares of the Fund. With this agreement along with the investment advisory and waiver agreements above, it is anticipated that total operating expenses for Retail Class shares will be 1.25% of the average daily net assets. For the six months ended April 30, 2016, Retail Class shares of the Fund incurred $306,463 for Distribution (12b-1) Fees. |
E. | Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Fund’s cash and investments and calculates the Fund’s daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Fund’s net asset value. For the six months ended April 30, 2016, the Fund incurred $147,674 in custody and fund accounting fees. These fees for the Fund were reduced by $981 as a result of an expense offset arrangement with the Fund’s custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. In the event that the Fund is overdrawn, under the custody agreement with BBH, BBH will make overnight loans to the Fund to cover overdrafts. Pursuant to their agreement, the Fund will pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2016, was $750. |
F. | Board of Trustees’ Fees. Each Trustee who is not an “interested person” as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the six months ended April 30, 2016, the Fund incurred $30,076 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $277,219,296 and $1,229,536,898, respectively. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
5. | Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N and Retail Class shares of beneficial interest at no par value. Transactions in Class N and Retail Class shares were as follows: |
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 10,813,191 | $ | 220,300,106 | 57,924,227 | $ | 1,271,498,929 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 13,754,570 | 281,831,139 | 4,555,895 | 100,047,448 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 10,965 | N/A | 8,714 | |||||||||||||||
Shares redeemed | (58,799,640 | ) | (1,230,685,660 | ) | (102,635,558 | ) | (2,286,971,325 | ) | |||||||||||
Net decrease | (34,231,879 | ) | $ | (728,543,450 | ) | (40,155,436 | ) | $ | (915,416,234 | ) | |||||||||
Retail Class | |||||||||||||||||||
Shares sold | 1,022,769 | $ | 13,188,530 | 64,100,288 | $ | 903,946,206 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 2,402,931 | 30,324,989 | 807,739 | 11,437,592 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 735 | N/A | 3,144 | |||||||||||||||
Shares redeemed | (4,838,433 | ) | (61,633,612 | ) | (73,108,125 | ) | (1,027,092,289 | ) | |||||||||||
Net decrease | (1,412,733 | ) | $ | (18,119,358 | ) | (8,200,098 | ) | $ | (111,705,347 | ) |
financial statements april 30, 2016 | 19 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including but not limited to, those described below: |
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 21 |
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2016 (unaudited)
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 994 | $ | 4.96 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,020 | $ | 5.02 |
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 994 | $ | 6.20 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.27 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 1.00% and 1.25% for Class N and Retail Class shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
2 | Assumes a return of 5% before expenses. For the purposes of the calculation, the applicable annualized expense ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 23 |
�� |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
policies. The Board further noted that, as a combined investment advisory and administration agreement, the Agreement also contemplates the provision of administrative services by BBH to the Fund within the same fee structure. The Board received and considered information, during the December meeting and over the course of the previous year, regarding the nature, extent and quality of services provided to the Fund by BBH as the Investment Adviser and administrator, including: portfolio management, supervision of operations and compliance, preparation of regulatory filings, disclosures to Fund shareholders, general oversight of service providers, assistance to the Board (including the Independent Trustees in their capacity as Trustees), Chief Compliance Officer services for the Trust, and other services. The Board considered the resources of the Investment Adviser and BBH dedicated to the Fund noting that pursuant to separate agreements BBH also provides custody, shareholder servicing, and fund accounting services to the Fund.
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 25 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 27 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 29 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
designed to achieve fair and equitable allocation of investment opportunities among its clients over time. BBH has structured the portfolio managers’ compensation in a manner it believes is reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 (800) 575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||||
By E-mail send your request to: | bbhfunds@bbh.com | |||||
On the internet: | www.bbhfunds.com |
BBH GLOBAL CORE SELECT
PORTFOLIO ALLOCATION
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Canada | $ | 3,844,445 | 3.4 | % | ||||||
Curaçao | 2,064,738 | 1.8 | ||||||||
France | 5,606,159 | 4.9 | ||||||||
Germany | 4,665,344 | 4.1 | ||||||||
Ireland | 1,730,393 | 1.5 | ||||||||
Italy | 2,831,358 | 2.5 | ||||||||
Netherlands | 1,817,716 | 1.6 | ||||||||
Sweden | 5,166,978 | 4.6 | ||||||||
Switzerland | 8,879,635 | 7.8 | ||||||||
United Kingdom | 13,586,433 | 11.9 | ||||||||
United States | 53,335,814 | 46.8 | ||||||||
Repurchase Agreements | 8,000,000 | 7.0 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2,348,413 | 2.1 | ||||||||
NET ASSETS | $ | 113,877,426 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO ALLOCATION (continued)
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Basic Materials | $ | 10,698,710 | 9.4 | % | ||||||
Communications | 10,917,229 | 9.6 | ||||||||
Consumer Cyclical | 6,072,477 | 5.3 | ||||||||
Consumer Non-Cyclical | 42,147,783 | 37.0 | ||||||||
Energy | 10,521,082 | 9.2 | ||||||||
Financials | 8,741,598 | 7.7 | ||||||||
Technology | 14,430,134 | 12.7 | ||||||||
Repurchase Agreements | 8,000,000 | 7.0 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2,348,413 | 2.1 | ||||||||
NET ASSETS | $ | 113,877,426 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 3 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (90.9%) | ||||||||||
CANADA (3.4%) | ||||||||||
ENERGY | ||||||||||
63,300 | Vermilion Energy, Inc. | $ | 2,176,237 | |||||||
FINANCIALS | ||||||||||
22,550 | Intact Financial Corp. | 1,668,208 | ||||||||
Total Canada | 3,844,445 | |||||||||
CURAÇAO (1.8%) | ||||||||||
ENERGY | ||||||||||
25,700 | Schlumberger, Ltd. | 2,064,738 | ||||||||
Total Curaçao | 2,064,738 | |||||||||
FRANCE (4.9%) | ||||||||||
COMMUNICATIONS | ||||||||||
50,870 | JCDecaux S.A. | 2,247,133 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
40,700 | Sanofi | 3,359,026 | ||||||||
Total France | 5,606,159 | |||||||||
GERMANY (4.1%) | ||||||||||
BASIC MATERIALS | ||||||||||
33,000 | Brenntag AG | 1,935,609 | ||||||||
74,000 | Fuchs Petrolub SE | 2,729,735 | ||||||||
Total Germany | 4,665,344 | |||||||||
IRELAND (1.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
17,900 | Perrigo Co., Plc. | 1,730,393 | ||||||||
Total Ireland | 1,730,393 | |||||||||
ITALY (2.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
292,950 | Davide Campari-Milano SpA | 2,831,358 | ||||||||
Total Italy | 2,831,358 | |||||||||
NETHERLANDS (1.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
41,400 | Unilever NV | 1,817,716 | ||||||||
Total Netherlands | 1,817,716 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
SWEDEN (4.6%) | ||||||||||
ENERGY | ||||||||||
224,075 | Lundin Petroleum AB1 | $ | 4,208,641 | |||||||
FINANCIALS | ||||||||||
72,100 | Svenska Handelsbanken AB (Class A) | 958,337 | ||||||||
Total Sweden | 5,166,978 | |||||||||
SWITZERLAND (7.8%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
58,225 | Nestle SA | 4,331,063 | ||||||||
59,626 | Novartis AG | 4,548,572 | ||||||||
Total Switzerland | 8,879,635 | |||||||||
UNITED KINGDOM (11.9%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
269,400 | Aggreko, Plc. | 4,296,544 | ||||||||
158,425 | Diageo, Plc. | 4,284,562 | ||||||||
54,625 | �� | Nielsen Holdings, Plc. | 2,848,147 | |||||||
22,200 | Reckitt Benckiser Group, Plc. | 2,157,180 | ||||||||
Total United Kingdom | 13,586,433 | |||||||||
UNITED STATES (46.8%) | ||||||||||
BASIC MATERIALS | ||||||||||
42,100 | Celanese Corp. (Series A) | 2,976,470 | ||||||||
26,025 | Praxair, Inc. | 3,056,896 | ||||||||
6,033,366 | ||||||||||
COMMUNICATIONS | ||||||||||
6,923 | Alphabet, Inc. (Class C)1 | 4,797,708 | ||||||||
144,600 | Discovery Communications, Inc. (Class C)1 | 3,872,388 | ||||||||
8,670,096 | ||||||||||
CONSUMER CYCLICAL | ||||||||||
67,550 | Bed, Bath & Beyond, Inc.1 | 3,189,711 | ||||||||
43,110 | Wal-Mart Stores, Inc. | 2,882,766 | ||||||||
6,072,477 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 5 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
UNITED STATES (continued) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
18,500 | Baxalta, Inc. | $ | 776,075 | |||||||
10,031 | FleetCor Technologies, Inc.1 | 1,551,595 | ||||||||
78,000 | PayPal Holdings, Inc.1 | 3,056,040 | ||||||||
96,949 | Zoetis, Inc. | 4,559,512 | ||||||||
9,943,222 | ||||||||||
ENERGY | ||||||||||
27,025 | Occidental Petroleum Corp. | 2,071,466 | ||||||||
FINANCIALS | ||||||||||
122,350 | Wells Fargo & Co. | 6,115,053 | ||||||||
TECHNOLOGY | ||||||||||
79,875 | Microsoft Corp. | 3,983,366 | ||||||||
169,025 | Oracle Corp. | 6,737,337 | ||||||||
73,425 | QUALCOMM, Inc. | 3,709,431 | ||||||||
14,430,134 | ||||||||||
Total United States | 53,335,814 | |||||||||
Total Common Stocks (Identified cost $93,858,055) | 103,529,013 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
REPURCHASE AGREEMENTS (7.0%) | ||||||||||||||||||
$8,000,000 | National Australia Bank (Agreement dated 4/29/2016 collateralized by U.S. Treasury Inflation Indexed Note 0.125%, due 04/15/20, original par $7,925,000 valued at $8,160,000) | 05/02/16 | 0.280 | % | $ | 8,000,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $8,000,000) | 8,000,000 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $101,858,055)2 | 97.9 | % | $ | 111,529,013 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.1 | % | 2,348,413 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 113,877,426 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $101,858,055 the aggregate gross unrealized appreciation is $16,393,437 and the aggregate gross unrealized depreciation is $6,722,479, resulting in net unrealized appreciation of $9,670,958. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 7 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical investments. |
— | Level 2 – significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Investments, at value | Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* | Significant Other Observable Inputs (Level 2)* | Significant Unobservable Inputs (Level 3)* | Balance as of April 30, 2016 | ||||||||||||||
Basic Materials | $ | 6,033,366 | $ | 4,665,344 | $ | – | $ | 10,698,710 | ||||||||||
Communications | 8,670,096 | 2,247,133 | – | 10,917,229 | ||||||||||||||
Consumer Cyclical | 6,072,477 | – | – | 6,072,477 | ||||||||||||||
Consumer Non-Cyclical | 14,521,762 | 27,626,021 | – | 42,147,783 | ||||||||||||||
Energy | 6,312,441 | 4,208,641 | – | 10,521,082 | ||||||||||||||
Financials | 7,783,261 | 958,337 | – | 8,741,598 | ||||||||||||||
Technology | 14,430,134 | – | – | 14,430,134 | ||||||||||||||
Repurchase Agreements | – | 8,000,000 | – | 8,000,000 | ||||||||||||||
Investments, at value | $ | 63,823,537 | $ | 47,705,476 | $ | – | $ | 111,529,013 |
* | The Fund’s policy is to disclose transfers between levels based on valuations at the end of the reporting period. |
There were no transfers between Levels 1, 2 or 3 during the period ended April 30, 2016. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 9 |
BBH GLOBAL CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2016 (unaudited)
ASSETS: | |||||||||
Investments in securities, at value (Identified cost $93,858,055) | $ | 103,529,013 | |||||||
Repurchase agreements (Identified cost $8,000,000) | 8,000,000 | ||||||||
Cash | 1,889,962 | ||||||||
Foreign currency at value (Identified cost $320,095) | 316,533 | ||||||||
Receivables for: | |||||||||
Dividends | 286,570 | ||||||||
Investment advisory and administrative fees waiver reimbursement | 35,563 | ||||||||
Shares sold | 10,657 | ||||||||
Interest | 124 | ||||||||
Prepaid assets | 283 | ||||||||
Total Assets | 114,068,705 | ||||||||
LIABILITIES: | |||||||||
Payables for: | |||||||||
Investment advisory and administrative fees | 107,073 | ||||||||
Professional fees | 39,355 | ||||||||
Shareholder servicing fees | 18,702 | ||||||||
Custody and fund accounting fees | 11,247 | ||||||||
Board of Trustees’ fees | 2,318 | ||||||||
Transfer agent fees | 1,796 | ||||||||
Distributors fees | 1,179 | ||||||||
Accrued expenses and other liabilities | 9,609 | ||||||||
Total Liabilities | 191,279 | ||||||||
NET ASSETS | $ | 113,877,426 | |||||||
Net Assets Consist of: | |||||||||
Paid-in capital | $ | 103,186,111 | |||||||
Undistributed net investment income | 324,553 | ||||||||
Accumulated net realized gain on investments in securities and foreign exchange transactions | 696,384 | ||||||||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 9,670,378 | ||||||||
Net Assets | $ | 113,877,426 | |||||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | |||||||||
CLASS N SHARES | |||||||||
($110,280,724 ÷ 9,786,021 shares outstanding) | $11.27 | ||||||||
RETAIL CLASS SHARES | |||||||||
($3,596,702 ÷ 320,585 shares outstanding) | $11.22 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2016 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $62,940) | $ | 1,092,097 | ||||
Interest and other income | 8,265 | |||||
Total Income | 1,100,362 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 528,473 | |||||
Shareholder servicing fees | 111,257 | |||||
Professional fees | 34,343 | |||||
Board of Trustees’ fees | 27,851 | |||||
Custody and fund accounting fees | 18,995 | |||||
Transfer agent fees | 14,090 | |||||
Distributors fees | 13,980 | |||||
Miscellaneous expenses | 53,836 | |||||
Total Expenses | 802,825 | |||||
Investment advisory and administrative fees waiver | (101,729 | ) | ||||
Expense offset arrangement | (1,376 | ) | ||||
Net Expenses | 699,720 | |||||
Net Investment Income | 400,642 | |||||
NET REALIZED AND UNREALIZED LOSS: | ||||||
Net realized gain on investments in securities | 1,572,866 | |||||
Net realized gain on foreign exchange transactions | 25,684 | |||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 1,598,550 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (1,746,565 | ) | ||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | 15,954 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (1,730,611 | ) | ||||
Net Realized and Unrealized Loss | (132,061 | ) | ||||
Net Increase in Net Assets Resulting from Operations | $ | 268,581 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 11 |
BBH GLOBAL CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 400,642 | $ | 762,145 | ||||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 1,598,550 | 101,396 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (1,730,611 | ) | 2,422,897 | |||||||
Net increase in net assets resulting from operations | 268,581 | 3,286,438 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (634,126 | ) | (1,402,150 | ) | ||||||
Retail Class | (14,668 | ) | (27,140 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (675,503 | ) | (1,446,840 | ) | ||||||
Retail Class | (22,680 | ) | (28,597 | ) | ||||||
Total dividends and distributions declared | (1,346,977 | ) | (2,904,727 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 9,452,658 | 37,114,739 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 1,305,720 | 2,765,427 | ||||||||
Cost of shares redeemed | (31,901,031 | ) | (33,059,963 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions | (21,142,653 | ) | 6,820,203 | |||||||
Total increase (decrease) in net assets | (22,221,049 | ) | 7,201,914 | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 136,098,475 | 128,896,561 | ||||||||
End of period (including undistributed net investment income of $324,553 and $572,705, respectively) | $ | 113,877,426 | $ | 136,098,475 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | For the period from March 28, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||
2015 | 2014 | |||||||||||||||||
Net asset value, beginning of period | $ | 11.37 | $ | 11.27 | $ | 10.99 | $ | 10.00 | ||||||||||
Income from investment operations: | ||||||||||||||||||
Net investment income1 | 0.04 | 0.06 | 0.12 | 0.03 | ||||||||||||||
Net realized and unrealized gain | 0.00 | 2 | 0.30 | 0.21 | 0.96 | |||||||||||||
Total income from investment operations | 0.04 | 0.36 | 0.33 | 0.99 | ||||||||||||||
Less dividends and distributions: | ||||||||||||||||||
From net investment income | (0.07 | ) | (0.13 | ) | (0.02 | ) | – | |||||||||||
From net realized gains | (0.07 | ) | (0.13 | ) | (0.03 | ) | – | |||||||||||
Total dividends and distributions | (0.14 | ) | (0.26 | ) | (0.05 | ) | – | |||||||||||
Short-term redemption fees1 | – | – | 0.00 | 2 | – | |||||||||||||
Net asset value, end of period | $ | 11.27 | $ | 11.37 | $ | 11.27 | $ | 10.99 | ||||||||||
Total return | 0.36 | %3 | 3.27 | % | 3.01 | % | 9.90 | %3 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||
Net assets, end of period (in millions) | $ | 110 | $ | 132 | $ | 127 | $ | 88 | ||||||||||
Ratio of expenses to average net assets before reductions | 1.40 | %4 | 1.31 | % | 1.32 | % | 1.87 | %4 | ||||||||||
Fee waiver | 0.15 | %4,5 �� | 0.05 | %5 | 0.07 | %5 | 0.61 | %4,5 | ||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.01 | % | 0.00 | %6 | 0.01 | %4 | ||||||||||
Ratio of expenses to average net assets after reductions | 1.25 | %4 | 1.25 | % | 1.25 | % | 1.25 | %4 | ||||||||||
Ratio of net investment income to average net assets | 0.73 | %4 | 0.55 | % | 1.01 | % | 0.50 | %4 | ||||||||||
Portfolio turnover rate | 8 | %3 | 31 | % | 40 | % | 6 | %7 |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the six months period ended April 30, 2016, the fiscal years ended October 31, 2015 and 2014 and the period ended October 31, 2013 reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.25%. The agreement is effective for the period beginning on March 28, 2013 through April 1, 2014 and has been renewed by all parties to the agreement through March 1, 2017. For the six months period ended April 30, 2016, the fiscal years ended October 31, 2015 and 2014 and the period ended October 31, 2013, the waived fees were $80,047, 74,640, $90,671 and $152,928, respectively. |
6 | Less than 0.01%. |
7 | Represents Fund portfolio turnover for the period ended October 31, 2013. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 13 |
BBH GLOBAL CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | For the period from April 2, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||
2015 | 2014 | |||||||||||||||||
Net asset value, beginning of period | $ | 11.31 | $ | 11.24 | $ | 10.98 | $ | 10.00 | ||||||||||
Income from investment operations: | ||||||||||||||||||
Net investment income1 | 0.03 | 0.03 | 0.07 | 0.00 | 2 | |||||||||||||
Net realized and unrealized gain | 0.00 | 2 | 0.29 | 0.22 | 0.98 | |||||||||||||
Total income from investment operations | 0.03 | 0.32 | 0.29 | 0.98 | ||||||||||||||
Less dividends and distributions: | ||||||||||||||||||
From net investment income | (0.05 | ) | (0.12 | ) | (0.01 | ) | – | |||||||||||
From net realized gains | (0.07 | ) | (0.13 | ) | (0.03 | ) | – | |||||||||||
Total dividends and distributions | (0.12 | ) | (0.25 | ) | (0.04 | ) | – | |||||||||||
Short-term redemption fees1 | – | – | 0.01 | 0.00 | 2 | |||||||||||||
Net asset value, end of period | $ | 11.22 | $ | 11.31 | $ | 11.24 | $ | 10.98 | ||||||||||
Total return | 0.27 | %3 | 2.98 | % | 2.70 | % | 9.80 | %3 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||
Net assets, end of period (in millions) | $ | 4 | $ | 4 | $ | 2 | $ | 2 | ||||||||||
Ratio of expenses to average net assets before reductions | 2.75 | %4 | 2.93 | % | 3.36 | % | 4.88 | %4 | ||||||||||
Fee waiver | 1.25 | %4,5 | 1.43 | %5 | 1.86 | %5 | 3.37 | %4,5 | ||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.00 | %6 | 0.00 | %6 | 0.01 | %4 | ||||||||||
Ratio of expenses to average net assets after reductions | 1.50 | %4 | 1.50 | % | 1.50 | % | 1.50 | %4 | ||||||||||
Ratio of net investment income to average net assets | 0.48 | %4 | 0.29 | % | 0.61 | % | 0.02 | %4 | ||||||||||
Portfolio turnover rate | 8 | %3 | 31 | % | 40 | % | 6 | %7 |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the six months ended April 30, 2016 and the fiscal years ended October 31, 2015 and 2014 and the period ended October 31, 2013 reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.50%. The agreement is effective for the period beginning on March 28, 2013 through April 1, 2014 and has been renewed by all parties to the agreement through March 1, 2017. For the six months ended April 30, 2016 and the fiscal years ended October 31, 2015 and 2014 and the period ended October 31, 2013, the waived fees were $21,682, $41,058, $41,099 and $17,913, respectively. |
6 | Less than 0.01% |
7 | Represents Fund portfolio turnover for the period ended October 31, 2013. |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS
April 30, 2016 (unaudited)
1. | Organization. The Fund is a separate, non-diversified series of BBH Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund is the successor to the BBH private investment fund, BBH Global Funds, LLC – Global Core Select, which launched on April 2, 2012. The Fund commenced operations on March 28, 2013. The Fund offers Class N shares and Retail Class shares. Class N and Retail Class shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Retail Class shares automatically convert to any other class of shares of the Fund. As of April 30, 2016 there were six series of the Trust. |
2. | Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services – Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. | Valuation of Investments. (1) The value of investments listed on a securities exchange is based on the last sale price on that exchange prior to the time when assets are valued, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchange; (2) securities not traded on an exchange are valued at the average of the quoted bid and asked prices in the over-the counter market; (3) securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board of Trustees (“Board”); (4) for securities traded on international exchanges, if events which may affect the value of the Fund’s securities occur after the close of the primary exchange on which such securities trade and before the Fund’s net asset value is next determined, then those securities will be fair valued as determined in good faith under supervision of the Board. The Fund currently uses a systematic fair value model provided by an independent third party to value international securities on a daily basis; (5) short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent “fair value” by the Board. |
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Dividend income and other distributions received from portfolio securities are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at |
financial statements april 30, 2016 | 15 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
the fair market value of securities received at ex-date. Distributions received on securities that represent a return of capital or a capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued daily. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. | Repurchase Agreements. The Fund may enter into repurchase agreements. Repurchase agreements are transactions in which the Fund buys a security from a dealer or bank and agrees to sell the security back at a mutually agreed upon time and price. The repurchase price normally is in excess of the purchase price, reflecting an agreed upon interest rate. The rate is effective for the period of time that assets of the Fund are invested in the agreement and is not related to the coupon rate on the underlying security. The Fund will enter into repurchase agreements only with banks and other recognized financial institutions, such as securities dealers, deemed creditworthy by the investment adviser. The Fund’s custodian or sub-custodian will take possession of the securities subject to repurchase agreements. The investment adviser, custodian or sub-custodian will monitor the value of the underlying collateral each day to ensure that the value of the security always equals or exceeds the repurchase price. |
E. | Foreign Currency Translations. The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange of such |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
currency against the U.S. dollar to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Upon the purchase or sale of a security denominated in foreign currency, the Fund may enter into forward foreign currency exchange contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction. Reported net realized gains and losses arise from the sales of portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. The effect of changes in foreign exchange rates on foreign denominated securities is reflected in the net realized and unrealized gain or loss on investments in securities. Net unrealized appreciation or depreciation on foreign currency translations arise from changes in the value of the assets and liabilities, excluding investments in securities, at period end, resulting from changes in the exchange rate. |
F. | Federal Income Taxes. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. |
financial statements april 30, 2016 | 17 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV.
G. | Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, if any, are paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amount of $1,309,629 and $37,348 to Class N and Retail Class shareholders, respectively, during the six months ended April 30, 2016. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. |
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2015: | $ | 1,846,286 | $ | 1,058,441 | $ | 2,904,727 | – | $ | 2,904,727 | |||||||||||||||
2014: | 450,565 | 30,394 | 480,959 | – | 480,959 |
Components of accumulated earnings/(deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Accumulated earnings | Accumulated capital and other losses | Other book/tax temporary differences | Unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2015: | $ | 572,705 | $ | 697,249 | $ | 1,269,954 | – | $ | (901,232 | ) | $ | 11,400,989 | $ | 11,769,711 | ||||||||||||||||||
2014: | 1,724,328 | 1,058,006 | 2,782,334 | – | (99,766 | ) | 8,978,092 | 11,660,660 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
H. | Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. | Fees and Other Transactions with Affiliates. |
A. | Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (“Agreement”) with the Trust, Brown Brothers Harriman & Co. (“BBH”) through a separately identifiable department (“SID” or “Investment Adviser”) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund pays a combined fee for investment advisory and administrative services calculated daily and paid monthly at an annual rate equivalent to 0.95% on the first $3,000,000,000 of the Fund’s average daily net assets and 0.90% per annum on the Fund’s average daily net assets over $3,000,000,000 (a flat rate of 0.95% per annum prior to November 1, 2015). For the six months ended April 30, 2016, the Fund incurred $528,473 under the Agreement. |
B. | Investment Advisory and Administrative Fee Waivers. Effective March 28, 2013 (commencement of operations), the Investment Adviser contractually agreed to limit the annual Fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary course of the Fund’s business and for Retail Class, amounts payable pursuant to any plan adopted in accordance with Rule 12b-1) of Class N and Retail Class to 1.25%. The agreement will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. The agreement may only be terminated during its term with approval of the Fund’s Board of Trustees. For the six months ended April 30, 2016, the Investment Adviser waived fees in the amount of $80,047 and $21,682 for Class N and Retail Class, respectively. |
financial statements april 30, 2016 | 19 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
C. | Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% (0.15% prior to November 1, 2015) of Class N and Retail Class shares’ average daily net assets. For the six months ended April 30, 2016, the Fund incurred shareholder servicing fees in the amount of $107,764 and $3,493 for Class N and Retail Class, respectively. |
D. | Distribution (12b-1) Fees. The Fund has adopted a distribution plan pursuant to Rule 12b-1 for Retail Class shares that allows the Fund to pay distribution and other fees for the sale of its shares and for services provided to shareholders. Because these fees are paid out of the Fund’s assets continuously, over time these fees will increase the cost of investment and may cost the shareholder more than paying other types of sales charges. The maximum annual distribution fee for Retail Class shares is 0.25% of the average daily net assets of the Retail Class shares of the Fund. With this agreement, it is anticipated that total operating expenses for Retail Class shares will be 1.50% of the average daily net assets. For the six months ended April 30, 2016, Retail Class shares of the Fund incurred $4,361 for Distribution (12b-1) Fees. |
E. | Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Fund’s cash and investments and calculates the Fund’s daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Fund’s net asset value. For the six months ended April 30, 2016, the Fund incurred $18,995 in custody and fund accounting fees. These fees for the Fund were reduced by $1,376 as a result of an expense offset arrangement with the Fund’s custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. In the event that the Fund is overdrawn, under the custody agreement with BBH, BBH will make overnight loans to the Fund to cover overdrafts. Pursuant to their agreement, the Fund will pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2016, was $0. |
F. | Board of Trustees’ Fees. Each Trustee who is not an “interested person” as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the six months ended April 30, 2016, the Fund incurred $27,851 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $7,891,853 and $27,267,910, respectively. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
5. | Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N and Retail Class shares of beneficial interest, at no par value. Transactions in Class N and Retail Class shares were as follows: | |
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 866,115 | $ | 9,421,326 | 3,101,881 | $ | 35,317,796 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 117,195 | 1,271,563 | 251,363 | 2,717,235 | |||||||||||||||
Shares redeemed | (2,842,481 | ) | (31,772,282 | ) | (2,950,519 | ) | (32,701,259 | ) | |||||||||||
Net increase (decrease) | (1,859,171 | ) | $ | (21,079,393 | ) | 402,725 | $ | 5,333,772 | |||||||||||
Retail Class | |||||||||||||||||||
Shares sold | 2,954 | $ | 31,332 | 157,233 | $ | 1,796,943 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 3,160 | 34,157 | 4,470 | 48,192 | |||||||||||||||
Shares redeemed | (11,870 | ) | (128,749 | ) | (31,915 | ) | (358,704 | ) | |||||||||||
Net increase (decrease) | (5,756 | ) | $ | (63,260 | ) | 129,788 | $ | 1,486,431 |
6. | Principal Risk Factors and Indemnifications. |
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including but not limited to, those described below: |
financial statements april 30, 2016 | 21 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
of the Fund to buy, sell or otherwise transfer securities or currency (capital controls risk), and risks from investing in securities of issuers based in developing countries (emerging markets risk). Non-U.S. currencies invested in by the Fund may depreciate against the U.S. dollar (currency exchange rate risk). The Fund’s shareholders may be adversely impacted by asset allocation decisions made by an investment adviser whose discretionary clients make up a large percentage of the Fund’s shareholders (shareholder concentration risk). The extent of the Fund’s exposure to these risks in respect to these financial assets is included in their value as recorded in the Fund’s Statement of Assets and Liabilities.
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 23 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2016 (unaudited)
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,004 | $ | 6.23 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.27 |
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 1,003 | $ | 7.47 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,017 | $ | 7.52 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 1.25% and 1.50% for Class N and Retail Class shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
2 | Assumes a return of 5% before expenses. For the purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 25 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
over the course of the previous year, regarding the nature, extent and quality of services provided to the Fund by BBH as both the Investment Adviser and administrator including: portfolio management, the supervision of operations and compliance, preparation of regulatory filings, disclosures to Fund shareholders, general oversight of service providers, assistance to the Board (including the Independent Trustees, in their capacity as Trustees), Chief Compliance Officer services for the Trust, and other services. The Board considered the resources of the Investment Adviser and BBH dedicated to the Fund noting that, pursuant to separate agreements, BBH also provides custody, shareholder servicing, and fund accounting services to the Fund.
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
pursuant to the Agreement, noting that the Investment Adviser also coordinates the provision of services to the Fund by affiliated and nonaffiliated service providers. In the Lipper Report, the Board received and considered information comparing the Fund’s combined investment advisory and administration fee and the Fund’s net total expenses with those of other comparable mutual funds, such peer group and comparisons having been selected and calculated by Lipper. The Board recognized that it is difficult to make comparisons of the fee rate, or of combined advisory and administration fees, because there are variations in the services that are included in the fees paid by other funds. The Board concluded that the advisory and administration fee appeared to be both reasonable in light of the services rendered and the result of arm’s length negotiations.
financial statements april 30, 2016 | 27 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST
April 30, 2016 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 29 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
designed to achieve fair and equitable allocation of investment opportunities among its clients over time. BBH has structured the portfolio managers’ compensation in a manner it believes is reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
financial statements april 30, 2016 | 31 |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 (800) 575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||||
By E-mail send your request to: | bbhfunds@bbh.com | |||||
On the internet: | www.bbhfunds.com |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO ALLOCATION
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Australia | $ | 22,873,068 | 2.5 | % | ||||||
Bermuda | 12,504,128 | 1.4 | ||||||||
Denmark | 19,289,636 | 2.1 | ||||||||
Finland | 8,752,258 | 1.0 | ||||||||
France | 83,579,724 | 9.3 | ||||||||
Germany | 62,487,341 | 6.9 | ||||||||
Hong Kong | 61,551,718 | 6.8 | ||||||||
Italy | 10,713,608 | 1.2 | ||||||||
Japan | 187,077,478 | 20.7 | ||||||||
Jersey | 9,543,299 | 1.1 | ||||||||
Netherlands | 10,569,812 | 1.2 | ||||||||
Singapore | 21,477,204 | 2.4 | ||||||||
Spain | 33,702,725 | 3.7 | ||||||||
Sweden | 24,426,622 | 2.7 | ||||||||
Switzerland | 124,377,804 | 13.8 | ||||||||
Taiwan | 14,504,521 | 1.6 | ||||||||
United Kingdom | 171,671,621 | 19.0 | ||||||||
Cash and Other Assets in Excess of Liabilities | 23,870,371 | 2.6 | ||||||||
NET ASSETS | $ | 902,972,938 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO ALLOCATION (continued)
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Basic Materials | $ | 55,757,689 | 6.2 | % | ||||||
Communications | 80,837,847 | 9.0 | ||||||||
Consumer Cyclical | 99,951,736 | 11.1 | ||||||||
Consumer Non-Cyclical | 259,529,997 | 28.7 | ||||||||
Diversified | 12,504,128 | 1.4 | ||||||||
Energy | 70,839,542 | 7.8 | ||||||||
Financials | 93,620,045 | 10.4 | ||||||||
Industrials | 104,595,350 | 11.6 | ||||||||
Technology | 52,767,460 | 5.8 | ||||||||
Utilities | 48,698,773 | 5.4 | ||||||||
Cash and Other Assets in Excess of Liabilities | 23,870,371 | 2.6 | ||||||||
NET ASSETS | $ | 902,972,938 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 3 |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (97.4%) | ||||||||||
AUSTRALIA (2.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
90,200 | Cochlear, Ltd. | $ | 7,404,369 | |||||||
117,400 | CSL, Ltd. | 9,371,648 | ||||||||
16,776,017 | ||||||||||
FINANCIALS | ||||||||||
720,348 | QBE Insurance Group, Ltd. | 6,097,051 | ||||||||
Total Australia | 22,873,068 | |||||||||
BERMUDA (1.4%) | ||||||||||
DIVERSIFIED | ||||||||||
226,300 | Jardine Matheson Holdings, Ltd. | 12,504,128 | ||||||||
Total Bermuda | 12,504,128 | |||||||||
DENMARK (2.1%) | ||||||||||
BASIC MATERIALS | ||||||||||
131,100 | Novozymes AS (Class B) | 6,279,401 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
98,248 | ISS AS | 3,727,990 | ||||||||
166,300 | Novo Nordisk AS (Class B) | 9,282,245 | ||||||||
13,010,235 | ||||||||||
Total Denmark | 19,289,636 | |||||||||
FINLAND (1.0%) | ||||||||||
INDUSTRIALS | ||||||||||
191,900 | Kone OYJ (Class B) | 8,752,258 | ||||||||
Total Finland | 8,752,258 | |||||||||
FRANCE (9.3%) | ||||||||||
BASIC MATERIALS | ||||||||||
85,600 | Air Liquide SA | 9,706,575 | ||||||||
CONSUMER CYCLICAL | ||||||||||
55,100 | LVMH Moet Hennessy Louis Vuitton SE | 9,127,988 |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||||||
COMMON STOCKS (continued) | ||||||||||||||
FRANCE (continued) | ||||||||||||||
CONSUMER NON-CYCLICAL | ||||||||||||||
132,500 | Danone SA | $ | 9,275,251 | |||||||||||
74,400 | Essilor International SA | 9,626,504 | ||||||||||||
52,700 | L’Oreal SA | 9,557,045 | ||||||||||||
144,761 | Sanofi | 11,947,319 | ||||||||||||
40,406,119 | ||||||||||||||
ENERGY | ||||||||||||||
203,700 | Total SA | 10,290,416 | ||||||||||||
FINANCIALS | ||||||||||||||
104,267 | Societe Generale SA | 4,089,967 | ||||||||||||
INDUSTRIALS | ||||||||||||||
217,401 | Cie de Saint-Gobain | 9,958,659 | ||||||||||||
Total France | 83,579,724 | |||||||||||||
GERMANY (6.9%) | ||||||||||||||
COMMUNICATIONS | ||||||||||||||
581,709 | Deutsche Telekom AG | 10,162,110 | ||||||||||||
CONSUMER CYCLICAL | ||||||||||||||
85,400 | Adidas AG | 11,001,229 | ||||||||||||
100,783 | Daimler AG (Class Registered) | 6,989,957 | ||||||||||||
17,991,186 | ||||||||||||||
FINANCIALS | ||||||||||||||
54,456 | Allianz SE | 9,226,676 | ||||||||||||
TECHNOLOGY | ||||||||||||||
238,242 | SAP SE | 18,617,029 | ||||||||||||
UTILITIES | ||||||||||||||
435,346 | RWE AG1 | 6,490,340 | ||||||||||||
Total Germany | 62,487,341 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 5 |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
HONG KONG (6.8%) | ||||||||||
COMMUNICATIONS | ||||||||||
1,417,000 | China Mobile, Ltd. | $ | 16,117,085 | |||||||
ENERGY | ||||||||||
8,337,000 | CNOOC, Ltd. | 10,334,595 | ||||||||
FINANCIALS | ||||||||||
1,579,600 | AIA Group, Ltd. | 9,429,933 | ||||||||
3,939,000 | Hang Lung Properties, Ltd. | 7,810,050 | ||||||||
17,239,983 | ||||||||||
UTILITIES | ||||||||||
949,000 | CLP Holdings, Ltd. | 8,768,382 | ||||||||
4,902,738 | Hong Kong & China Gas Co., Ltd. | 9,091,673 | ||||||||
17,860,055 | ||||||||||
Total Hong Kong | 61,551,718 | |||||||||
ITALY (1.2%) | ||||||||||
ENERGY | ||||||||||
656,061 | ENI SpA | 10,713,608 | ||||||||
Total Italy | 10,713,608 | |||||||||
JAPAN (20.7%) | ||||||||||
BASIC MATERIALS | ||||||||||
214,200 | Shin-Etsu Chemical Co., Ltd. | 11,834,909 | ||||||||
COMMUNICATIONS | ||||||||||
120,100 | NTT DOCOMO, Inc. | 2,821,128 | ||||||||
761,400 | Rakuten, Inc. | 8,223,701 | ||||||||
11,044,829 | ||||||||||
CONSUMER CYCLICAL | ||||||||||
246,400 | Denso Corp. | 9,190,460 | ||||||||
618,600 | Honda Motor Co., Ltd. | 16,364,255 | ||||||||
59,100 | Shimano, Inc. | 8,501,097 | ||||||||
34,055,812 |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
JAPAN (continued) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
19,100 | Kao Corp. | $ | 1,043,733 | |||||||
759,900 | Kirin Holdings Co., Ltd. | 10,989,106 | ||||||||
271,100 | Takeda Pharmaceutical Co., Ltd. | 12,834,256 | ||||||||
24,867,095 | ||||||||||
ENERGY | ||||||||||
962,000 | Inpex Corp. | 7,441,248 | ||||||||
FINANCIALS | ||||||||||
75,600 | Daito Trust Construction Co., Ltd. | 10,695,090 | ||||||||
410,600 | Tokio Marine Holdings, Inc. | 13,184,977 | ||||||||
23,880,067 | ||||||||||
INDUSTRIALS | ||||||||||
132,100 | Daikin Industries, Ltd. | 10,355,966 | ||||||||
62,000 | FANUC Corp. | 9,054,867 | ||||||||
104,600 | Hoya Corp. | 3,964,504 | ||||||||
16,625 | Keyence Corp. | 9,856,733 | ||||||||
536,400 | Komatsu, Ltd. | 9,049,446 | ||||||||
390,000 | Mitsubishi Electric Corp. | 4,097,451 | ||||||||
48,400 | Murata Manufacturing Co., Ltd. | 6,230,723 | ||||||||
26,400 | SMC Corp. | 6,363,348 | ||||||||
58,973,038 | ||||||||||
TECHNOLOGY | ||||||||||
382,500 | Canon, Inc. | 10,673,000 | ||||||||
65,500 | Tokyo Electron, Ltd. | 4,307,480 | ||||||||
14,980,480 | ||||||||||
Total Japan | 187,077,478 | |||||||||
JERSEY (1.1%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
520,200 | Experian, Plc. | 9,543,299 | ||||||||
Total Jersey | 9,543,299 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 7 |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
NETHERLANDS (1.2%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
485,890 | Koninklijke Ahold NV | $ | 10,569,812 | |||||||
Total Netherlands | 10,569,812 | |||||||||
SINGAPORE (2.4%) | ||||||||||
COMMUNICATIONS | ||||||||||
2,954,100 | Singapore Telecommunications, Ltd. | 8,449,749 | ||||||||
FINANCIALS | ||||||||||
748,924 | United Overseas Bank, Ltd. | 10,321,634 | ||||||||
INDUSTRIALS | ||||||||||
1,272,700 | SembCorp Industries, Ltd. | 2,705,821 | ||||||||
Total Singapore | 21,477,204 | |||||||||
SPAIN (3.7%) | ||||||||||
COMMUNICATIONS | ||||||||||
889,477 | Telefonica SA | 9,729,715 | ||||||||
CONSUMER CYCLICAL | ||||||||||
284,800 | Industria de Diseno Textil SA | 9,144,635 | ||||||||
FINANCIALS | ||||||||||
532,087 | Banco Santander SA | 2,706,637 | ||||||||
UTILITIES | ||||||||||
1,706,022 | Iberdrola SA | 12,121,738 | ||||||||
Total Spain | 33,702,725 | |||||||||
SWEDEN (2.7%) | ||||||||||
COMMUNICATIONS | ||||||||||
622,573 | Telefonaktiebolaget LM Ericsson (Class B) | 5,031,812 | ||||||||
2,515,360 | Telia Co. AB | 11,985,467 | ||||||||
17,017,279 |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
SWEDEN (continued) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
208,700 | Hennes & Mauritz AB (Class B) | $ | 7,409,343 | |||||||
Total Sweden | 24,426,622 | |||||||||
SWITZERLAND (13.8%) | ||||||||||
BASIC MATERIALS | ||||||||||
4,500 | Givaudan SA | 8,861,985 | ||||||||
47,365 | Syngenta AG | 19,074,819 | ||||||||
27,936,804 | ||||||||||
CONSUMER CYCLICAL | ||||||||||
15,300 | Swatch Group AG | 5,226,902 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
284,516 | Nestle SA | 21,163,707 | ||||||||
236,292 | Novartis AG | 18,025,545 | ||||||||
37,500 | Roche Holding AG | 9,476,489 | ||||||||
3,960 | SGS SA | 8,711,773 | ||||||||
57,377,514 | ||||||||||
FINANCIALS | ||||||||||
43,026 | Zurich Insurance Group AG1 | 9,631,010 | ||||||||
INDUSTRIALS | ||||||||||
696,878 | ABB, Ltd.1 | 14,729,653 | ||||||||
65,800 | Kuehne + Nagel International AG | 9,475,921 | ||||||||
24,205,574 | ||||||||||
Total Switzerland | 124,377,804 | |||||||||
TAIWAN (1.6%) | ||||||||||
TECHNOLOGY | ||||||||||
1,080,000 | Taiwan Semiconductor Manufacturing Co., Ltd. | 4,943,494 | ||||||||
405,300 | Taiwan Semiconductor Manufacturing Co., Ltd. ADR | 9,561,027 | ||||||||
Total Taiwan | 14,504,521 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 9 |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
UNITED KINGDOM (19.0%) | ||||||||||
COMMUNICATIONS | ||||||||||
457,668 | Pearson, Plc. | $ | 5,406,391 | |||||||
899,195 | Vodafone Group, Plc. | 2,910,689 | ||||||||
8,317,080 | ||||||||||
CONSUMER CYCLICAL | ||||||||||
522,700 | Compass Group, Plc. | 9,336,841 | ||||||||
1,436,352 | Kingfisher, Plc. | 7,659,029 | ||||||||
16,995,870 | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
319,000 | Aggreko, Plc. | 5,087,594 | ||||||||
347,000 | Diageo, Plc. | 9,384,522 | ||||||||
2,664,688 | G4S, Plc. | 7,365,132 | ||||||||
667,095 | GlaxoSmithKline, Plc. | 14,217,224 | ||||||||
204,100 | Intertek Group, Plc. | 9,742,169 | ||||||||
95,700 | Reckitt Benckiser Group, Plc. | 9,299,193 | ||||||||
62,300 | SABMiller, Plc. | 3,815,799 | ||||||||
333,000 | Smith & Nephew, Plc. | 5,642,606 | ||||||||
4,334,116 | Tesco, Plc.1 | 10,897,041 | ||||||||
256,840 | Unilever, Plc. | 11,528,626 | ||||||||
86,979,906 | ||||||||||
ENERGY | ||||||||||
625,915 | Amec Foster Wheeler, Plc. | 4,550,698 | ||||||||
1,886,155 | BP, Plc. | 10,413,954 | ||||||||
4,512 | Royal Dutch Shell, Plc. (Class A) | 119,496 | ||||||||
5,925 | Royal Dutch Shell, Plc. (Class A) | 155,195 | ||||||||
639,990 | Royal Dutch Shell, Plc. (Class B) | 16,820,332 | ||||||||
32,059,675 | ||||||||||
FINANCIALS | ||||||||||
10,588,374 | Lloyds Banking Group, Plc. | 10,427,020 | ||||||||
TECHNOLOGY | ||||||||||
339,400 | ARM Holdings Plc | 4,665,430 |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
UNITED KINGDOM (continued) | ||||||||||
UTILITIES | ||||||||||
855,802 | National Grid, Plc. | $ | 12,226,640 | |||||||
Total United Kingdom | 171,671,621 | |||||||||
Total Common Stocks (Identified cost $773,338,097) | 879,102,567 |
TOTAL INVESTMENTS (Identified cost $773,338,097)2 | 97.4 | % | $ | 879,102,567 | ||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.6 | % | 23,870,371 | |||||||
NET ASSETS | 100.0 | % | $ | 902,972,938 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $773,338,097, the aggregate gross unrealized appreciation is $187,511,157 and the aggregate gross unrealized depreciation is $81,746,687, resulting in net unrealized depreciation of $105,764,470. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 11 |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical investments. |
— | Level 2 – significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 13 |
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Investments, at value | Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* | Significant Other Observable Inputs (Level 2)* | Significant Unobservable Inputs (Level 3)* | Balance as of April 30, 2016 | ||||||||||||||
Australia | $ | – | $ | 22,873,068 | $ | – | $ | 22,873,068 | ||||||||||
Bermuda | – | 12,504,128 | – | 12,504,128 | ||||||||||||||
Denmark | – | 19,289,636 | – | 19,289,636 | ||||||||||||||
Finland | – | 8,752,258 | – | 8,752,258 | ||||||||||||||
France | – | 83,579,724 | – | 83,579,724 | ||||||||||||||
Germany | – | 62,487,341 | – | 62,487,341 | ||||||||||||||
Hong Kong | – | 61,551,718 | – | 61,551,718 | ||||||||||||||
Italy | – | 10,713,608 | – | 10,713,608 | ||||||||||||||
Japan | – | 187,077,478 | – | 187,077,478 | ||||||||||||||
Jersey | – | 9,543,299 | – | 9,543,299 | ||||||||||||||
Netherlands | – | 10,569,812 | – | 10,569,812 | ||||||||||||||
Singapore | – | 21,477,204 | – | 21,477,204 | ||||||||||||||
Spain | – | 33,702,725 | – | 33,702,725 | ||||||||||||||
Sweden | – | 24,426,622 | – | 24,426,622 | ||||||||||||||
Switzerland | – | 124,377,804 | – | 124,377,804 | ||||||||||||||
Taiwan | 9,561,027 | 4,943,494 | – | 14,504,521 | ||||||||||||||
United Kingdom | – | 171,671,621 | – | 171,671,621 | ||||||||||||||
Investments, at value | $ | 9,561,027 | $ | 869,541,540 | $ | – | $ | 879,102,567 |
* | The Fund’s policy is to disclose transfers between levels based on valuations at the end of the reporting period. |
There were no transfers between Levels 1, 2 or 3 during the period ended April 30, 2016. |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2016 (unaudited)
ASSETS: | |||||||||
Investments in securities, at value (Identified cost $773,338,097) | $ | 879,102,567 | |||||||
Cash | 19,182,004 | ||||||||
Foreign currency at value (Identified cost $60,120) | 60,082 | ||||||||
Receivables for: | |||||||||
Dividends | 5,159,331 | ||||||||
Shares sold | 699,450 | ||||||||
Investment advisory and administrative fees waiver reimbursement | 11,852 | ||||||||
Investments sold | 9 | ||||||||
Prepaid assets | 1,784 | ||||||||
Total Assets | 904,217,079 | ||||||||
LIABILITIES: | |||||||||
Payables for: | |||||||||
Investment advisory and administrative fees | 590,407 | ||||||||
Investments purchased | 483,828 | ||||||||
Custody and fund accounting fees | 70,714 | ||||||||
Professional fees | 49,652 | ||||||||
Shares redeemed | 22,645 | ||||||||
Shareholder servicing fees | 7,541 | ||||||||
Board of Trustees’ fees | 2,735 | ||||||||
Distributor fees | 2,027 | ||||||||
Transfer agent fees | 1,759 | ||||||||
Accrued expenses and other liabilities | 12,833 | ||||||||
Total Liabilities | 1,244,141 | ||||||||
NET ASSETS | $ | 902,972,938 | |||||||
Net Assets Consist of: | |||||||||
Paid-in capital | $ | 842,834,974 | |||||||
Undistributed net investment income | 6,981,163 | ||||||||
Accumulated net realized loss on investments in securities and foreign exchange transactions | (52,724,134 | ) | |||||||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 105,880,935 | ||||||||
Net Assets | $ | 902,972,938 | |||||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | |||||||||
CLASS N SHARES | |||||||||
($45,759,819 ÷ 3,252,421 shares outstanding) | $14.07 | ||||||||
CLASS I SHARES | |||||||||
($857,213,119 ÷ 60,813,681 shares outstanding) | $14.10 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 15 |
BBH INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2016 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $800,704) | $ | 10,790,339 | ||||
Interest and other income | 2,999 | |||||
Total Income | 10,793,338 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 2,875,889 | |||||
Shareholder servicing fees | 262,083 | |||||
Custody and fund accounting fees | 118,198 | |||||
Professional fees | 40,908 | |||||
Board of Trustees’ fees | 28,114 | |||||
Transfer agent fees | 14,019 | |||||
Distributor fees | 9,998 | |||||
Miscellaneous expenses | 49,406 | |||||
Total Expenses | 3,398,615 | |||||
Investment advisory and administrative fees waiver | (23,359 | ) | ||||
Expense offset arrangement | (1,818 | ) | ||||
Net Expenses | 3,373,438 | |||||
Net Investment Income | 7,419,900 | |||||
NET REALIZED AND UNREALIZED LOSS: | ||||||
Net realized loss on investments in securities | (6,383,116 | ) | ||||
Net realized gain on foreign exchange transactions and translations | 66,904 | |||||
Net realized loss on investments in securities and foreign exchange transactions and translations | (6,316,212 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (5,567,858 | ) | ||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | 139,199 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (5,428,659 | ) | ||||
Net Realized and Unrealized Loss | (11,744,871 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | $ | (4,324,971 | ) |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 7,419,900 | $ | 12,915,628 | ||||||
Net realized gain (loss) on investments in securities and foreign exchange transactions and translations | (6,316,212 | ) | 11,304,752 | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (5,428,659 | ) | (45,148,802 | ) | ||||||
Net decrease in net assets resulting from operations | (4,324,971 | ) | (20,928,422 | ) | ||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (11,418,433 | ) | (17,771,729 | ) | ||||||
Class I | (1,321,700 | ) | (2,187,203 | ) | ||||||
Total dividends and distributions declared | (12,740,133 | ) | (19,958,932 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 813,114,086 | 115,571,668 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 12,671,721 | 19,895,791 | ||||||||
Proceeds from short-term redemption fees | 231 | 197 | ||||||||
Cost of shares redeemed* | (638,423,552 | ) | (204,954,865 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions | 187,362,486 | (69,487,209 | ) | |||||||
Total increase (decrease) in net assets | 170,297,382 | (110,374,563 | ) | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 732,675,556 | 843,050,119 | ||||||||
End of period (including undistributed net investment income of $6,981,163 and $12,301,396, respectively) | $ | 902,972,938 | $ | 732,675,556 |
* | Includes share exchanges. See note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 17 |
BBH INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.49 | $ | 15.11 | $ | 15.38 | $ | 13.05 | $ | 12.66 | $ | 13.05 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.03 | 0.23 | 0.37 | 0.25 | 0.27 | 0.26 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (0.20 | ) | (0.49 | ) | (0.38 | ) | 2.35 | 0.45 | (0.45 | ) | |||||||||||||||||
Total income (loss) from investment operations | (0.17 | ) | (0.26 | ) | (0.01 | ) | 2.60 | 0.72 | (0.19 | ) | |||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.25 | ) | (0.36 | ) | (0.26 | ) | (0.27 | ) | (0.33 | ) | (0.20 | ) | |||||||||||||||
Total dividends and distributions | (0.25 | ) | (0.36 | ) | (0.26 | ) | (0.27 | ) | (0.33 | ) | (0.20 | ) | |||||||||||||||
Short-term redemption fees1 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | |||||||||||||||
Net asset value, end of period | $ | 14.07 | $ | 14.49 | $ | 15.11 | $ | 15.38 | $ | 13.05 | $ | 12.66 | |||||||||||||||
Total return | (1.11 | )%3 | (1.65 | )% | 0.01 | % | 20.27 | % | 6.05 | % | (1.49 | )% | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $46 | $665 | $757 | $695 | $510 | $644 | |||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 1.08 | %4 | 1.12 | % | 1.12 | % | 1.14 | % | 1.17 | % | 1.16 | % | |||||||||||||||
Fee waiver | 0.02 | %4,5 | – | – | – | – | – | ||||||||||||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 1.06 | %4 | 1.12 | % | 1.12 | % | 1.14 | % | 1.17 | % | 1.16 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.46 | %4 | 1.53 | % | 2.43 | % | 1.79 | % | 2.18 | % | 1.98 | % | |||||||||||||||
Portfolio turnover rate | 8 | %3 | 18 | % | 15 | % | 14 | % | 12 | % | 13 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the six months ended April 30, 2016, reflect fees reduced as result of a voluntary operating expense limitation of the share class to 1.07%. The agreement is effective for the period beginning after December 29, 2015 and can be changed at any time at the sole discretion of the Investment Adviser. For the six months ended April 30, 2016 the waived fees were $23,359. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
BBH INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | $ | 12.70 | $ | 13.09 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.20 | 0.26 | 0.40 | 0.28 | 0.30 | 0.29 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (0.36 | ) | (0.49 | ) | (0.38 | ) | 2.37 | 0.45 | (0.45 | ) | |||||||||||||||||
Total income (loss) from investment operations | (0.16 | ) | (0.23 | ) | 0.02 | 2.65 | 0.75 | (0.16 | ) | ||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | (0.37 | ) | (0.23 | ) | |||||||||||||||
Total dividends and distributions | (0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | (0.37 | ) | (0.23 | ) | |||||||||||||||
Short-term redemption fees1 | 0.00 | 2 | 0.00 | 2 | – | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | ||||||||||||||||
Net asset value, end of period | $ | 14.10 | $ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | $ | 12.70 | |||||||||||||||
Total return | (1.01 | )%3 | (1.42 | )% | 0.21 | % | 20.64 | % | 6.31 | % | (1.26 | )% | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $857 | $68 | $86 | $75 | $70 | $97 | |||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.87 | %4 | 0.89 | % | 0.90 | % | 0.90 | % | 0.94 | % | 0.92 | % | |||||||||||||||
Expense offset arrangement | 0.00 | %4,5 | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | 0.01 | % | |||||||||||||||
Ratio of expenses to average net assets after reductions | 0.87 | %4 | 0.89 | % | 0.90 | % | 0.90 | % | 0.94 | % | 0.91 | % | |||||||||||||||
Ratio of net investment income to average net assets | 2.98 | %4 | 1.77 | % | 2.62 | % | 2.01 | % | 2.42 | % | 2.22 | % | |||||||||||||||
Portfolio turnover rate | 8 | %3 | 18 | % | 15 | % | 14 | % | 12 | % | 13 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 19 |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2016 (unaudited)
1. | Organization. The Fund is a separate, non-diversified series of BBH Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on June 6, 1997. The Fund offers Class N and Class I shares. Class N and Class I shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Class I shares automatically convert to any other share class of the Fund. As of April 30, 2016, there were six series of the Trust. |
2. | Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services – Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. | Valuation of Investments. (1) The value of investments listed on a securities exchange is based on the last sale price on that exchange prior to the time when assets are valued, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchange; (2) securities not traded on an exchange are valued at the average of the quoted bid and asked prices in the over-the counter market; (3) securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board; (4) for securities traded on international exchanges, if events which may affect the value of the Fund’s securities occur after the close of the primary exchange on which such securities trade and before the Fund’s net asset value is next determined, then those securities will be fair valued as determined in good faith under supervision of the Board. The Fund currently uses a systematic fair value model provided by an independent third party to value international securities on a daily basis; (5) short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent “fair value” by the Board. |
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Dividend income and other distributions received from portfolio securities are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
the fair market value of securities received at ex-date. Distributions received on securities that represent a return of capital or a capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued daily. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. | Forward Foreign Currency Exchange Contracts. The Fund may enter into forward foreign currency exchange contracts (“Contracts”) in connection with planned purchases or sales of securities to economically hedge the U.S. dollar value of securities denominated in a particular currency, or to increase or shift its exposure to a currency other than U.S. dollars. The Fund has no specific limitation on the percentage of assets which may be committed to these types of Contracts. The Fund could be exposed to risks if the counterparties to the Contracts are unable to meet the terms of their Contracts or if the value of the foreign currency changes unfavorably. The U.S. dollar values of foreign currency underlying all contractual commitments held by the Fund are determined using forward foreign currency exchange rates supplied by a quotation service. During the six months ended April 30, 2016 the Fund had no open contracts. |
E. | Foreign Currency Translations. The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange of such currency against the U.S. dollar to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Upon the purchase or sale of a security denominated in foreign currency, the Fund may enter into forward foreign currency exchange contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction. Reported net realized gains and losses arise from the sales of portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. The effect of changes in foreign exchange rates on foreign denominated securities is reflected in the net realized and unrealized gain or loss on investments in securities. Net unrealized appreciation or depreciation on foreign currency translations arise from changes in the value of the assets and liabilities, excluding investments in securities, at period end, resulting from changes in the exchange rate. |
financial statements april 30, 2016 | 21 |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
F. | Federal Income Taxes. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
G. | Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, if any, are paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amounts of $11,418,433 and $1,321,700 to Class N shares and Class I shares, respectively, during the six months ended April 30, 2016. |
Distributions paid from: | |||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | |||||||||||||||||||
2015: | $ | 19,958,932 | – | $ | 19,958,932 | – | $ | 19,958,932 | |||||||||||||||
2014: | 13,381,034 | – | 13,381,034 | – | 13,381,034 |
Components of accumulated earnings/(deficit): | |||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Accumulated earnings | Accumulated capital and other losses | Other book/tax temporary differences | Unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | |||||||||||||||||||||||||
2015: | $ | 12,303,263 | – | $ | 12,303,263 | $ | (37,959,260 | ) | $ | (8,450,529 | ) | $ | 111,309,594 | $ | 77,203,068 | ||||||||||||||||
2014: | 19,556,615 | – | 19,556,615 | (51,410,393 | ) | (6,514,196 | ) | 156,458,396 | 118,090,422 |
Expiration Date | Amount | ||||||||
Pre-December 22, 2010 Capital Losses | 10/31/2017 | $ | 32,792,797 | ||||||
10/31/2019 | 5,166,463 | ||||||||
Post December 22, 2010 Capital Losses1 | No Expiration | – | |||||||
Total capital loss carryforward | $ | 37,959,260 |
1 | Must be utilized prior to losses subject to expiration. |
financial statements april 30, 2016 | 23 |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
H. | Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. | Fees and Other Transactions with Affiliates |
A. | Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (“Agreement”) with the Trust, Brown Brothers Harriman & Co. (“BBH”) through a separately identifiable department (“SID” or “Investment Adviser”) provides investment advisory and portfolio management services to the Fund. BBH employs a “manager-of-managers” investment approach, whereby it allocates the Fund’s assets among the Fund’s sub-advisers, currently Mondrian Investment Partners Limited and Walter Scott & Partners Limited (together, “Sub-advisers”). The Sub-advisers are responsible for investing the assets of the Fund and the Investment Adviser oversees the Sub-advisers and evaluates their performance results. BBH also provides administrative services to the Fund. The Fund’s investment advisory and administrative services fee is calculated daily and paid monthly at an annual rate equivalent to 0.80% per annum on the first $1,000,000,000 of average daily net assets and 0.70% per annum on all average daily net assets over $1,000,000,000. The Investment Adviser pays each Sub-adviser a percentage from its investment advisory and administrative fees. For the six months ended April 30, 2016 the Fund incurred $2,875,889 for services under the Agreement. |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
B. | Investment Advisory and Administrative Fee Waivers. Effective December 29, 2015, the Investment Adviser has voluntarily agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) of Class N to 1.07%. This is a voluntary waiver that can be changed at any time at the sole discretion of the Investment Adviser. For the six months ended April 30, 2016, the Investment Adviser waived fees in the amount of $23,359 for Class N. |
C. | Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% (0.25% prior to November 1, 2015) of Class N shares’ average daily net assets. For the six months ended April 30, 2016, Class N shares of the Fund incurred $262,083 in shareholder servicing fees. |
D. | Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Fund’s cash and investments and calculates the Fund’s daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Fund’s net asset value. For the six months ended April 30, 2016, the Fund incurred $118,198 in custody and fund accounting fees. These fees for the Fund were reduced by $1,818 as a result of an expense offset arrangement with the Fund’s custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. In the event that the Fund is overdrawn, under the custody agreement with BBH, BBH will make overnight loans to the Fund to cover overdrafts. Pursuant to their agreement, the Fund will pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2016, was $767. |
E. | Board of Trustees’ Fees. Each Trustee who is not an “interested person” as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the six months ended April 30, 2016, the Fund incurred $28,114 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $223,330,370 and $55,430,521, respectively. |
financial statements april 30, 2016 | 25 |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
5. | Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N shares and Class I shares of beneficial interest, at no par value. Transactions in Class N shares and Class I shares were as follows: |
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||||
Class N | ||||||||||||||||||
Shares sold | 1,151,383 | $ | 16,174,538 | 6,384,021 | $ | 93,636,480 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 836,244 | 11,364,561 | 1,272,169 | 17,708,587 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | 185 | N/A | 20 | ||||||||||||||
Shares redeemed | (44,605,713 | ) | (602,233,798 | ) | (11,891,926 | ) | (167,781,523 | ) | ||||||||||
Net decrease | (42,618,086 | ) | $ | (574,694,514 | ) | (4,235,736 | ) | $ | (56,436,436 | ) | ||||||||
Class I | ||||||||||||||||||
Shares sold | 58,705,703 | $ | 796,939,548 | 1,446,334 | $ | 21,935,188 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 96,114 | 1,307,160 | 156,901 | 2,187,204 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | 46 | N/A | 177 | ||||||||||||||
Shares redeemed | (2,668,179 | ) | (36,189,754 | ) | (2,577,182 | ) | (37,173,342 | ) | ||||||||||
Net increase (decrease) | 56,133,638 | $ | 762,057,000 | (973,947 | ) | $ | (13,050,773 | ) |
6. | Principal Risk Factors and Indemnifications. |
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including, but not limited to, those described below: |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
opportunities (management risk). The investment style of the Sub-advisers not complementing each other (multi-manager risk). Price movements may occur due to factors affecting individual companies, such as the issuance of an unfavorable earnings report, or other events affecting particular industries or the equity market as a whole (equity securities risk). The value of securities held by the Fund may fall due to changing economic, political, regulatory or market conditions, or due to a company’s or issuer’s individual situation (market risk). In the normal course of business, the Fund invests in securities and enters into transactions where risks exist due to assumption of large positions in securities of a small number of issuers (non-diversification risk). There are certain risks associated with investing in foreign securities not present in domestic investments, including, but not limited to, recovery of tax withheld by foreign jurisdictions (foreign investment risk), capital controls imposed by foreign governments in response to economic or political events that may impact the ability of the Fund to buy, sell or otherwise transfer securities or currency (capital controls risk), and risks from investing in securities of issuers based in developing countries (emerging markets risk). Non-U.S. currencies invested in by the Fund may depreciate against the U.S. dollar (currency exchange rate risk). The Fund’s shareholders may be adversely impacted by asset allocation decisions made by an investment adviser whose discretionary clients make up a large percentage of the Fund’s shareholders (shareholder concentration risk). The extent of the Fund’s exposure to these risks in respect to these financial assets is included in their value as recorded in the Fund’s Statement of Assets and Liabilities.
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
financial statements april 30, 2016 | 27 |
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2016 (unaudited)
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2016 (unaudited)
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 989 | $ | 5.24 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,020 | $ | 5.32 |
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 990 | $ | 4.30 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,021 | $ | 4.37 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 1.06% and 0.87% for Class N and I shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
2 | Assumes a return of 5% before expenses. For the purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
financial statements april 30, 2016 | 29 |
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2016 (unaudited)
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 31 |
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
data also included the effect of revenue generated by the shareholder servicing, custody, fund accounting and administration fees paid by the Fund to BBH. With respect to shareholder servicing fees, the Board noted that, effective November 1, 2015, the fee rate was standardized at 0.20% for all of the Trust’s funds, including the Fund, which resulted in a 0.05% decrease in the fees payable by the Fund’s Class N shares. The Board conducted a detailed review of the allocation methods used in preparing the profitability data. The Board also reviewed the Sub-Advisers’ profitability data for the Fund. The Board also considered fall-out benefits received by BBH, the Investment Adviser, and the Sub-Advisers, as applicable, as a result of their relationships with the Fund. These other benefits include proprietary research received from brokers that execute the Fund’s purchases and sales of securities and fees received for being the Fund’s administrator, custodian, fund accounting and shareholder servicing agent. The Board concluded that neither the Investment Adviser and BBH’s nor the Sub-Advisers’ profitability was excessive in light of the nature, extent and quality of services provided to the Fund. In light of the costs of providing services pursuant to the Advisory Agreement as well as the Investment Adviser and BBH’s commitment to the Fund, the ancillary benefits that the Investment Adviser and BBH and Sub-Advisers received were considered reasonable.
financial statements april 30, 2016 | 33 |
BBH INTERNATIONAL EQUITY FUND
CONFLICTS OF INTEREST
April 30, 2016 (unaudited)
BBH INTERNATIONAL EQUITY FUND
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 35 |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 (800) 575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||
By E-mail send your request to: | bbhfunds@bbh.com | |||
On the internet: | www.bbhfunds.com |
BBH LIMITED DURATION FUND
PORTFOLIO ALLOCATION
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Asset Backed Securities | $ | 1,614,936,240 | 32.0 | % | ||||||
Commercial Mortgage Backed Securities | 554,919,238 | 11.0 | ||||||||
Corporate Bonds | 1,233,420,512 | 24.4 | ||||||||
Loan Participations and Assignments | 388,052,389 | 7.7 | ||||||||
Municipal Bonds | 179,137,614 | 3.5 | ||||||||
U.S. Government Agency Obligations | 555,740,892 | 11.0 | ||||||||
U.S. Treasury Bills | 557,992,463 | 11.0 | ||||||||
Liabilities in Excess of Other Assets | (29,866,587 | ) | (0.6 | ) | ||||||
NET ASSETS | $ | 5,054,332,761 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (32.0%) | ||||||||||||||||||
$29,855,833 | AIM Aviation Finance, Ltd. 2015-1A1 | 02/15/40 | 4.213 | % | $ | 28,812,372 | ||||||||||||
3,467,637 | Aircraft Lease Securitisation, Ltd. 2007-1A1,2 | 05/10/32 | 0.699 | 3,424,291 | ||||||||||||||
10,506,513 | Alterna Funding I LLC 2014-1A1 | 02/15/21 | 1.639 | 10,138,785 | ||||||||||||||
11,300,000 | AmeriCredit Automobile Receivables Trust 2013-3 | 06/10/19 | 2.380 | 11,384,229 | ||||||||||||||
7,246,747 | Ascentium Equipment Receivables LLC 2015-1A1 | 07/10/17 | 1.150 | 7,246,534 | ||||||||||||||
12,002,047 | AVANT Loans Funding Trust 2016-A1 | 05/15/19 | 4.110 | 11,998,110 | ||||||||||||||
249,611 | AXIS Equipment Finance Receivables II LLC 2013-1A1 | 03/20/17 | 1.750 | 249,608 | ||||||||||||||
24,045,042 | AXIS Equipment Finance Receivables III LLC 2015-1A1 | 03/20/20 | 1.900 | 23,993,771 | ||||||||||||||
2,447,688 | BCC Funding VIII LLC 2014-1A1 | 06/20/20 | 1.794 | 2,432,008 | ||||||||||||||
49,298,455 | BCC Funding X LLC 2015-11 | 10/20/20 | 2.224 | 49,200,174 | ||||||||||||||
8,030,000 | Capital Auto Receivables Asset Trust 2013-2 | 10/22/18 | 1.960 | 8,044,270 | ||||||||||||||
2,820,000 | Capital Auto Receivables Asset Trust 2013-2 | 04/22/19 | 2.660 | 2,840,605 | ||||||||||||||
18,140,000 | Capital Auto Receivables Asset Trust 2013-21 | 01/20/22 | 4.060 | 18,366,794 | ||||||||||||||
13,260,000 | Capital Auto Receivables Asset Trust 2013-3 | 10/22/18 | 2.790 | 13,383,805 | ||||||||||||||
36,497,158 | Carlyle Global Market Strategies Commodities Funding, Ltd. 2014-1A1,2,3 | 10/15/21 | 2.528 | 31,763,225 | ||||||||||||||
29,764,807 | Cazenovia Creek Funding I LLC 2015-1A1 | 12/10/23 | 2.000 | 29,504,365 | ||||||||||||||
8,377,523 | CCG Receivables Trust 2014-11 | 11/15/21 | 1.060 | 8,358,917 | ||||||||||||||
2,056,763 | Chesapeake Funding LLC 2011-2A1,2 | 04/07/24 | 1.689 | 2,056,989 | ||||||||||||||
1,041,013 | Chesapeake Funding LLC 2012-2A1,2 | 05/07/24 | 0.889 | 1,040,684 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 3 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$31,391,760 | Chesterfield Financial Holdings LLC 2014-1A1 | 12/15/34 | 4.500 | % | $ | 31,718,903 | ||||||||||||
12,780,000 | CIT Equipment Collateral 2014-VT11 | 10/21/19 | 1.500 | 12,755,376 | ||||||||||||||
13,000,000 | Citibank Credit Card Issuance Trust 2014-A8 | 04/09/20 | 1.730 | 13,130,478 | ||||||||||||||
10,040,000 | Credit Acceptance Auto Loan Trust 2014-1A1 | 10/15/21 | 1.550 | 10,041,533 | ||||||||||||||
11,160,000 | Credit Acceptance Auto Loan Trust 2014-1A1 | 04/15/22 | 2.290 | 11,088,427 | ||||||||||||||
2,720,000 | Credit Acceptance Auto Loan Trust 2014-2A1 | 09/15/22 | 2.670 | 2,724,588 | ||||||||||||||
10,890,000 | Credit Acceptance Auto Loan Trust 2015-1A1 | 01/17/23 | 2.610 | 10,888,621 | ||||||||||||||
2,479,104 | Direct Capital Funding V LLC 2013-21 | 08/20/18 | 1.730 | 2,478,629 | ||||||||||||||
35,760,000 | Drive Auto Receivables Trust 2015-BA1 | 07/15/21 | 2.760 | 35,765,972 | ||||||||||||||
14,112,000 | Eagle I, Ltd. 2014-1A1 | 12/15/39 | 4.310 | 13,598,323 | ||||||||||||||
34,236,146 | ECAF I, Ltd. 2015-1A1 | 06/15/40 | 3.473 | 32,909,495 | ||||||||||||||
19,743,260 | Emerald Aviation Finance, Ltd. 2013-11 | 10/15/38 | 4.650 | 19,644,544 | ||||||||||||||
50,784,381 | Engs Commercial Finance Trust 2015-1A1 | 10/22/21 | 2.310 | 50,801,988 | ||||||||||||||
1,565,726 | Exeter Automobile Receivables Trust 2014-2A1 | 08/15/18 | 1.060 | 1,563,548 | ||||||||||||||
16,735,249 | FNA Trust 2014-1A1 | 12/10/22 | 1.296 | 16,573,126 | ||||||||||||||
13,732,905 | FNA Trust 2015-11 | 12/10/23 | 3.240 | 13,737,203 | ||||||||||||||
14,500,000 | Ford Credit Auto Owner Trust/Ford Credit 2014-21 | 04/15/26 | 2.310 | 14,700,309 | ||||||||||||||
25,411,790 | Foursight Capital Automobile Receivables Trust 2015-11 | 01/15/21 | 2.340 | 25,316,509 | ||||||||||||||
9,285,172 | FRS I LLC 2013-1A1 | 04/15/43 | 1.800 | 9,108,873 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$31,081,667 | Global Container Assets, Ltd. 2015-1A1 | 02/05/30 | 2.100 | % | $ | 30,950,626 | ||||||||||||
16,510,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 1.650 | 16,469,480 | ||||||||||||||
6,525,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 1.970 | 6,467,173 | ||||||||||||||
10,730,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 2.220 | 10,692,802 | ||||||||||||||
22,660,000 | Hertz Vehicle Financing LLC 2011-1A1 | 03/25/18 | 3.290 | 22,904,241 | ||||||||||||||
17,750,000 | Hyundai Auto Receivables Trust 2013-B | 02/15/19 | 1.710 | 17,792,179 | ||||||||||||||
7,689,717 | Leaf II Receivables Funding LLC 2013-11 | 09/15/21 | 1.980 | 7,681,220 | ||||||||||||||
19,210,000 | Lendmark Funding Trust 2016-A1 | 08/21/23 | 4.820 | 19,191,368 | ||||||||||||||
22,194,754 | MarketPlace Loan Trust 2015-OD41 | 12/18/17 | 3.250 | 22,000,550 | ||||||||||||||
6,062,341 | MCA Fund I Holding LLC 2014-11,2 | 08/15/24 | 2.618 | 6,065,978 | ||||||||||||||
8,972,739 | MMAF Equipment Finance LLC 2012-AA1 | 10/10/18 | 1.350 | 8,985,798 | ||||||||||||||
11,462,864 | Nations Equipment Finance Funding II LLC 2014-1A1 | 07/20/18 | 1.558 | 11,458,128 | ||||||||||||||
25,958,123 | Nations Equipment Finance Funding III LLC 2016-1A1 | 02/20/21 | 3.610 | 25,965,770 | ||||||||||||||
403,156 | Navitas Equipment Receivables LLC 2013-11 | 11/15/16 | 1.950 | 403,068 | ||||||||||||||
19,938,765 | Navitas Equipment Receivables LLC 2015-11 | 11/15/18 | 2.120 | 19,959,233 | ||||||||||||||
51,030,000 | NCF Dealer Floorplan Master Trust 2014-1A1,2 | 10/20/20 | 1.939 | 49,777,943 | ||||||||||||||
16,658,775 | New Mexico State Educational Assistance Foundation 2013-12 | 01/02/25 | 1.134 | 16,058,559 | ||||||||||||||
19,515,582 | Newstar Commercial Lease Funding LLC 2015-1A1 | 04/15/19 | 3.270 | 19,445,433 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 5 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$11,121,296 | Newtek Small Business Loan Trust 2010-11,2 | 02/25/41 | 2.739 | % | $ | 10,857,166 | ||||||||||||
40,190,000 | NextGear Floorplan Master Owner Trust 2014-1A1 | 10/15/19 | 1.920 | 39,958,771 | ||||||||||||||
22,470,000 | NextGear Floorplan Master Owner Trust 2015-1A1 | 07/15/19 | 1.800 | 22,340,418 | ||||||||||||||
13,740,000 | NextGear Floorplan Master Owner Trust 2015-1A1,2 | 07/15/19 | 2.183 | 13,612,666 | ||||||||||||||
17,300,000 | Nordstrom Private Label Credit Card Master Note Trust 2011-1A1 | 11/15/19 | 2.280 | 17,392,486 | ||||||||||||||
29,760,000 | NRZ Advance Receivables Trust Advance Receivables Backed 2015-T21 | 08/17/48 | 3.302 | 29,885,543 | ||||||||||||||
9,200,000 | Ocwen Master Advance Receivables Trust 2015-11 | 09/17/46 | 2.537 | 9,195,814 | ||||||||||||||
12,500,000 | OnDeck Asset Securitization Trust II LLC 2016-1A1 | 05/17/20 | 4.210 | 12,499,160 | ||||||||||||||
14,645,524 | OneMain Financial Issuance Trust 2014-1A1 | 06/18/24 | 2.430 | 14,645,254 | ||||||||||||||
15,230,000 | OneMain Financial Issuance Trust 2014-2A1 | 09/18/24 | 3.020 | 15,041,282 | ||||||||||||||
26,190,000 | �� | OneMain Financial Issuance Trust 2015-1A1 | 03/18/26 | 3.850 | 25,427,855 | |||||||||||||
20,010,000 | Oxford Finance Funding Trust 2014-1A1 | 12/15/22 | 3.475 | 19,923,235 | ||||||||||||||
4,832,340 | PFS Tax Lien Trust 2014-11 | 05/15/29 | 1.440 | 4,809,797 | ||||||||||||||
50,000,000 | Progreso Receivables Funding LLC 2015-B1 | 07/28/20 | 3.000 | 49,753,830 | ||||||||||||||
43,552,978 | ReadyCap Lending Small Business Loan Trust 2015-12 | 12/25/38 | 1.689 | 43,392,825 | ||||||||||||||
12,340,000 | Santander Drive Auto Receivables Trust 2013-2 | 03/15/19 | 1.950 | 12,370,591 | ||||||||||||||
10,980,000 | Santander Drive Auto Receivables Trust 2015-3 | 04/15/20 | 2.070 | 10,970,127 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$22,790,000 | Santander Drive Auto Receivables Trust 2015-3 | 01/15/21 | 2.740 | % | $ | 23,001,455 | ||||||||||||
22,846,298 | Shenton Aircraft Investment I, Ltd. 2015-1A1 | 10/15/42 | 4.750 | 22,360,814 | ||||||||||||||
5,640 | SMART Trust 2012-4US | 03/14/17 | 0.970 | 5,638 | ||||||||||||||
3,026,522 | SMART Trust 2013-2US | 02/14/19 | 1.180 | 3,014,818 | ||||||||||||||
13,420,000 | SMART Trust 2015-1US | 09/14/18 | 1.500 | 13,389,577 | ||||||||||||||
33,210,000 | Spirit Master Funding LLC 2014-4A1 | 01/20/45 | 3.501 | 32,255,555 | ||||||||||||||
9,900,000 | Spirit Master Funding VII LLC 2013-1A1 | 12/20/43 | 3.887 | 9,790,390 | ||||||||||||||
7,773,820 | Springleaf Funding Trust 2014-AA1 | 12/15/22 | 2.410 | 7,771,619 | ||||||||||||||
17,241,996 | STORE Master Funding LLC 2013-1A1 | 03/20/43 | 4.160 | 16,948,347 | ||||||||||||||
12,324,158 | STORE Master Funding LLC 2013-2A1 | 07/20/43 | 4.370 | 12,278,144 | ||||||||||||||
20,609,144 | STORE Master Funding LLC 2013-3A1 | 11/20/43 | 4.240 | 20,415,610 | ||||||||||||||
3,560,179 | TAL Advantage V LLC 2014-2A1 | 05/20/39 | 1.700 | 3,515,864 | ||||||||||||||
20,342,500 | TAL Advantage V LLC 2014-3A1 | 11/21/39 | 3.270 | 19,155,230 | ||||||||||||||
28,186,000 | Textainer Marine Containers, Ltd. 2014-1A1 | 10/20/39 | 3.270 | 26,470,518 | ||||||||||||||
11,530,000 | Trade MAPS 1, Ltd. 2013-1A1,2 | 12/10/18 | 1.686 | 11,424,153 | ||||||||||||||
49,760,000 | Trafigura Securitisation Finance, Plc. 2014-1A1,2 | 10/15/18 | 1.383 | 49,171,339 | ||||||||||||||
18,330,000 | Turquoise Card Backed Securities, Plc. 2012-1A1,2 | 06/17/19 | 1.233 | 18,354,746 | ||||||||||||||
5,373,247 | Utah State Board of Regents 2011-12 | 05/01/29 | 1.466 | 5,377,761 | ||||||||||||||
5,963,136 | Westlake Automobile Receivables Trust 2015-1A1 | 03/15/18 | 1.170 | 5,957,684 | ||||||||||||||
10,600,000 | Westlake Automobile Receivables Trust 2015-1A1 | 11/16/20 | 2.290 | 10,480,509 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 7 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$21,340,000 | Westlake Automobile Receivables Trust 2015-2A1 | 01/15/21 | 2.450 | % | $ | 21,083,775 | ||||||||||||
25,510,000 | World Financial Network Credit Card Master Trust 2014-C | 08/16/21 | 1.540 | 25,580,344 | ||||||||||||||
Total Asset Backed Securities (Identified cost $1,632,086,115) | 1,614,936,240 | |||||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (11.0%) | ||||||||||||||||||
15,540,000 | Aventura Mall Trust 2013-AVM1,2 | 12/05/32 | 3.743 | 16,139,151 | ||||||||||||||
13,860,000 | BBCMS Trust 2015-RRI1,2 | 05/15/32 | 2.483 | 13,649,483 | ||||||||||||||
26,807,000 | BB-UBS Trust 2012-TFT1,2 | 06/05/30 | 3.468 | 26,702,871 | ||||||||||||||
6,349,000 | BHMS Mortgage Trust 2014-ATLS1,2 | 07/05/33 | 2.884 | 6,149,434 | ||||||||||||||
32,018,000 | BHMS Mortgage Trust 2014-ATLS1,2 | 07/05/33 | 4.691 | 31,741,057 | ||||||||||||||
12,240,000 | BLCP Hotel Trust 2014-CLRN1,2 | 08/15/29 | 2.383 | 12,004,310 | ||||||||||||||
30,106,000 | BXHTL Mortgage Trust 2015-JWRZ1,2 | 05/15/29 | 2.583 | 30,063,081 | ||||||||||||||
28,190,000 | Carefree Portfolio Trust 2014-CARE1,2 | 11/15/19 | 2.833 | 28,068,121 | ||||||||||||||
35,000,000 | CDGJ Commercial Mortgage Trust 2014-BXCH1,2 | 12/15/27 | 2.933 | 34,473,327 | ||||||||||||||
10,500,000 | CGBAM Commercial Mortgage Trust 2014-HD1,2 | 02/15/31 | 1.633 | 10,431,273 | ||||||||||||||
7,457,000 | CGBAM Commercial Mortgage Trust 2014-HD1,2 | 02/15/31 | 2.033 | 7,222,956 | ||||||||||||||
31,329,000 | CG-CCRE Commercial Mortgage Trust 2014-FL21,2 | 11/15/31 | 3.333 | 31,442,148 | ||||||||||||||
15,440,000 | CGGS Commercial Mortgage Trust 2016-RNDB1,2 | 02/15/33 | 2.083 | 15,488,622 | ||||||||||||||
2,085,000 | Citigroup Commercial Mortgage Trust 2013-SMP1 | 01/12/30 | 2.738 | 2,087,329 | ||||||||||||||
24,520,000 | Citigroup Commercial Mortgage Trust 2014-388G1,2 | 06/15/33 | 2.183 | 24,509,927 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (continued) | ||||||||||||||||||
$ 9,257,379 | Commercial Mortgage Pass Through Certificates 2013-GAM1 | 02/10/28 | 1.705 | % | $ | 9,216,928 | ||||||||||||
9,690,000 | Commercial Mortgage Pass Through Certificates 2013-GAM1,2 | 02/10/28 | 3.417 | 9,544,953 | ||||||||||||||
27,990,000 | Commercial Mortgage Pass Through Certificates 2014-KYO1,2 | 06/11/27 | 2.087 | 27,708,342 | ||||||||||||||
22,660,000 | Commercial Mortgage Pass Through Certificates 2014-TWC1,2 | 02/13/32 | 1.289 | 22,438,204 | ||||||||||||||
9,950,000 | EQTY 2014-INNS Mortgage Trust1,2 | 05/08/31 | 2.039 | 9,625,648 | ||||||||||||||
19,650,000 | GS Mortgage Securities Corp. Trust 2016-ICE21,2 | 02/15/33 | 4.683 | 19,686,834 | ||||||||||||||
16,312,317 | GTP Cellular Sites LLC1 | 03/15/42 | 3.721 | 16,374,389 | ||||||||||||||
13,664,186 | Hilton USA Trust 2013-HLF1,2 | 11/05/30 | 2.339 | 13,655,410 | ||||||||||||||
9,410,000 | Hyatt Hotel Portfolio Trust 2015-HYT1,2 | 11/15/29 | 2.533 | 9,274,947 | ||||||||||||||
5,600,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-BXH1,2 | 04/15/27 | 1.683 | 5,497,477 | ||||||||||||||
10,250,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-BXH1,2 | 04/15/27 | 2.083 | 9,998,639 | ||||||||||||||
14,860,000 | SBA Tower Trust1 | 12/15/42 | 2.933 | 14,891,050 | ||||||||||||||
35,700,000 | SBA Tower Trust1 | 04/15/43 | 2.240 | 35,486,025 | ||||||||||||||
15,700,000 | Unison Ground Lease Funding LLC1 | 04/15/40 | 5.349 | 16,159,439 | ||||||||||||||
14,500,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH1,2 | 02/15/27 | 2.283 | 14,210,890 | ||||||||||||||
20,108,443 | WFCG Commercial Mortgage Trust 2015-BXRP1,2 | 11/15/29 | 1.555 | 19,779,105 | ||||||||||||||
11,468,922 | WFCG Commercial Mortgage Trust 2015-BXRP1,2 | 11/15/29 | 1.905 | 11,197,868 | ||||||||||||||
Total Commercial Mortgage Backed Securities (Identified cost $559,057,025) | 554,919,238 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 9 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||||||||||
CORPORATE BONDS (24.4%) | ||||||||||||||||||||||||||||||
AUTO MANUFACTURERS (0.4%) | ||||||||||||||||||||||||||||||
$17,720,000 | General Motors Co. | 10/02/18 | 3.500 | % | $ | 18,284,541 | ||||||||||||||||||||||||
BANKS (6.1%) | ||||||||||||||||||||||||||||||
24,290,000 | ANZ New Zealand (Int’l), Ltd., London Branch1 | 02/01/19 | 2.250 | 24,482,498 | ||||||||||||||||||||||||||
34,000,000 | BAC San Jose DPR Funding, Ltd.1,3 | 11/15/21 | 4.500 | 34,189,649 | ||||||||||||||||||||||||||
26,868,000 | Bank of America Corp. | 08/01/16 | 6.500 | 27,228,569 | ||||||||||||||||||||||||||
13,415,000 | Bank of America Corp. | 09/01/17 | 6.000 | 14,173,269 | ||||||||||||||||||||||||||
24,335,000 | BNZ International Funding, Ltd.1 | 03/02/21 | 2.750 | 24,637,314 | ||||||||||||||||||||||||||
39,309,900 | Citigroup Capital XIII2,4 | 10/30/40 | 7.008 | 41,118,155 | ||||||||||||||||||||||||||
1,882,040 | FNBC 1993-A Pass Through Trust | 01/05/18 | 8.080 | 1,946,128 | ||||||||||||||||||||||||||
12,775,000 | Mitsubishi UFJ Trust & Banking Corp.1 | 10/16/17 | 1.600 | 12,769,187 | ||||||||||||||||||||||||||
24,850,000 | Royal Bank of Canada | 04/15/19 | 1.625 | 24,887,449 | ||||||||||||||||||||||||||
24,690,000 | Skandinaviska Enskilda Banken AB | 03/15/21 | 2.625 | 25,254,315 | ||||||||||||||||||||||||||
11,375,000 | Svenska Handelsbanken AB | 04/04/17 | 2.875 | 11,571,253 | ||||||||||||||||||||||||||
25,085,000 | Toronto-Dominion Bank | 04/07/21 | 2.125 | 25,157,721 | ||||||||||||||||||||||||||
21,500,000 | Wells Fargo Bank N.A. | 01/22/18 | 1.650 | 21,675,526 | ||||||||||||||||||||||||||
17,750,000 | Westpac Banking Corp. | 12/01/17 | 1.500 | 17,825,650 | ||||||||||||||||||||||||||
306,916,683 | ||||||||||||||||||||||||||||||
BEVERAGES (1.0%) | ||||||||||||||||||||||||||||||
39,350,000 | Anheuser-Busch InBev Finance, Inc. | 02/01/19 | 1.900 | 39,913,964 | ||||||||||||||||||||||||||
12,695,000 | Anheuser-Busch InBev Finance, Inc. | 02/01/21 | 2.650 | 13,038,311 | ||||||||||||||||||||||||||
52,952,275 | ||||||||||||||||||||||||||||||
COMMERCIAL SERVICES (0.4%) | ||||||||||||||||||||||||||||||
19,863,000 | Experian Finance, Plc.1 | 06/15/17 | 2.375 | 19,941,419 | ||||||||||||||||||||||||||
COMPUTERS (0.4%) | ||||||||||||||||||||||||||||||
8,960,000 | Apple, Inc. | 02/23/21 | 2.250 | 9,159,351 | ||||||||||||||||||||||||||
9,730,000 | Denali International LLC1 | 10/15/20 | 5.625 | 10,240,825 | ||||||||||||||||||||||||||
19,400,176 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
COSMETICS/PERSONAL CARE (0.3%) | ||||||||||||||||||
$17,745,000 | Avon Products, Inc. | 03/15/20 | 6.350 | % | $ | 15,038,888 | ||||||||||||
DIVERSIFIED FINANCIAL SERVICES (5.8%) | ||||||||||||||||||
10,607,172 | AA Aircraft Financing 2013-1 LLC1 | 11/01/19 | 3.596 | 10,554,136 | ||||||||||||||
5,777,349 | Ahold Lease Series 2001-A-1 Pass Through Trust | 01/02/20 | 7.820 | 6,232,315 | ||||||||||||||
7,365,000 | Air Lease Corp. | 04/01/17 | 5.625 | 7,604,215 | ||||||||||||||
15,950,000 | Air Lease Corp. | 09/04/18 | 2.625 | 15,843,262 | ||||||||||||||
6,300,000 | Alliance Data Systems Corp.1 | 12/01/17 | 5.250 | 6,378,750 | ||||||||||||||
12,000,000 | Alliance Data Systems Corp.1 | 04/01/20 | 6.375 | 12,330,000 | ||||||||||||||
22,705,000 | Athene Global Funding1 | 10/23/18 | 2.875 | 22,476,633 | ||||||||||||||
17,405,000 | Caisse Centrale Desjardins1 | 09/12/17 | 1.550 | 17,401,432 | ||||||||||||||
17,553,770 | CIC Central America Card Receivables, Ltd.3 | 11/05/20 | 4.500 | 17,702,101 | ||||||||||||||
10,500,000 | CIC Receivables Master Trust3 | 10/07/21 | 4.890 | 10,651,637 | ||||||||||||||
8,500,000 | Credit Acceptance Corp. | 02/15/21 | 6.125 | 8,096,250 | ||||||||||||||
11,478,070 | Doric Nimrod Air Alpha 2013-1 Pass Through Trust1 | 05/30/25 | 5.250 | 11,678,936 | ||||||||||||||
5,958,611 | Doric Nimrod Air Finance Alpha, Ltd. 2012-1 (Class A) Pass Through Trust1 | 11/30/24 | 5.125 | 6,030,514 | ||||||||||||||
49,455,000 | Drawbridge Special Opportunities Fund LP1 | 08/01/21 | 5.000 | 46,240,425 | ||||||||||||||
3,830,786 | LS Power Funding Corp. | 12/30/16 | 8.080 | 3,926,556 | ||||||||||||||
5,875,000 | Morgan Stanley Capital Trust III4 | 03/01/33 | 6.250 | 6,051,250 | ||||||||||||||
6,720,675 | Morgan Stanley Capital Trust VIII4 | 04/15/67 | 6.450 | 6,871,218 | ||||||||||||||
11,349,000 | Murray Street Investment Trust I | 03/09/17 | 4.647 | 11,657,534 | ||||||||||||||
33,498,500 | Seven & Seven, Ltd.1,2 | 09/11/19 | 1.898 | 33,368,124 | ||||||||||||||
33,785,000 | Vesey Street Investment Trust I | 09/01/16 | 4.404 | 34,070,922 | ||||||||||||||
295,166,210 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 11 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
ELECTRIC (0.8%) | ||||||||||||||||||
$12,115,000 | Korea East-West Power Co., Ltd.1 | 11/27/18 | 2.625 | % | $ | 12,345,343 | ||||||||||||
22,150,000 | TransAlta Corp. | 06/03/17 | 1.900 | 21,785,832 | ||||||||||||||
5,580,000 | TransAlta Corp. | 05/15/18 | 6.900 | 5,726,285 | ||||||||||||||
39,857,460 | ||||||||||||||||||
HEALTHCARE-PRODUCTS (0.2%) | ||||||||||||||||||
7,995,000 | Mallinckrodt International Finance S.A. | 04/15/18 | 3.500 | 7,795,125 | ||||||||||||||
1,435,000 | Mallinckrodt International Finance S.A./Mallinckrodt CB LLC1 | 04/15/20 | 4.875 | 1,377,600 | ||||||||||||||
9,172,725 | ||||||||||||||||||
INSURANCE (1.2%) | ||||||||||||||||||
15,985,000 | Fairfax Financial Holdings, Ltd.1 | 05/15/21 | 5.800 | 17,093,464 | ||||||||||||||
11,050,000 | Vitality Re IV, Ltd.1,2 | 01/09/18 | 2.750 | 11,079,835 | ||||||||||||||
33,100,000 | Vitality Re V, Ltd.1,2 | 01/07/20 | 1.750 | 32,719,350 | ||||||||||||||
60,892,649 | ||||||||||||||||||
INTERNET (0.3%) | ||||||||||||||||||
15,630,000 | Expedia, Inc. | 08/15/20 | 5.950 | 17,284,201 | ||||||||||||||
INVESTMENT COMPANIES (1.4%) | ||||||||||||||||||
6,800,000 | Ares Capital Corp. | 11/30/18 | 4.875 | 7,021,863 | ||||||||||||||
17,570,000 | Ares Capital Corp. | 01/15/20 | 3.875 | 17,966,432 | ||||||||||||||
22,645,000 | FS Investment Corp. | 01/15/20 | 4.250 | 22,967,148 | ||||||||||||||
21,515,000 | PennantPark Investment Corp. | 10/01/19 | 4.500 | 21,259,036 | ||||||||||||||
69,214,479 | ||||||||||||||||||
MEDIA (0.3%) | ||||||||||||||||||
16,485,000 | TEGNA, Inc. | 10/15/19 | 5.125 | 17,061,975 | ||||||||||||||
OIL & GAS (0.4%) | ||||||||||||||||||
11,935,000 | Korea National Oil Corp.1 | 01/23/19 | 2.750 | 12,213,694 | ||||||||||||||
21,552,175 | Odebrecht Drilling Norbe VIII/IX, Ltd.1 | 06/30/22 | 6.350 | 4,428,972 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
OIL & GAS (continued) | ||||||||||||||||||
$10,552,800 | Odebrecht Offshore Drilling Finance, Ltd.1 | 10/01/23 | 6.750 | % | $ | 1,371,864 | ||||||||||||
18,014,530 | ||||||||||||||||||
OIL & GAS SERVICES (0.1%) | ||||||||||||||||||
8,000,000 | Freeport-McMoran Oil & Gas LLC | 11/15/20 | 6.500 | 7,560,000 | ||||||||||||||
PHARMACEUTICALS (0.8%) | ||||||||||||||||||
14,270,000 | AbbVie, Inc. | 05/14/18 | 1.800 | 14,369,262 | ||||||||||||||
9,000,000 | AbbVie, Inc. | 05/14/20 | 2.500 | 9,153,783 | ||||||||||||||
6,950,000 | Express Scripts Holding Co. | 02/15/17 | 2.650 | 7,028,264 | ||||||||||||||
9,445,000 | Pfizer, Inc. | 03/30/17 | 6.050 | 9,892,353 | ||||||||||||||
40,443,662 | ||||||||||||||||||
PIPELINES (0.8%) | ||||||||||||||||||
7,105,000 | Enbridge Energy Partners LP | 12/15/16 | 5.875 | 7,279,549 | ||||||||||||||
20,240,000 | Enbridge Energy Partners LP | 10/15/20 | 4.375 | 20,452,905 | ||||||||||||||
12,960,000 | TransCanada PipeLines, Ltd. | 01/15/19 | 3.125 | 13,250,809 | ||||||||||||||
40,983,263 | ||||||||||||||||||
REAL ESTATE (1.3%) | �� | |||||||||||||||||
11,490,000 | Prologis International Funding II SA1 | 02/15/20 | 4.875 | 12,314,568 | ||||||||||||||
17,000,000 | RXR Realty3 | 10/01/20 | 5.400 | 17,337,797 | ||||||||||||||
32,965,000 | Vonovia Finance BV1 | 10/02/17 | 3.200 | 33,574,589 | ||||||||||||||
63,226,954 | ||||||||||||||||||
REAL ESTATE INVESTMENT TRUSTS (1.4%) | ||||||||||||||||||
15,400,000 | Digital Realty Trust LP | 10/01/20 | 3.400 | 15,831,662 | ||||||||||||||
25,330,000 | Select Income REIT | 02/01/22 | 4.150 | 25,252,516 | ||||||||||||||
22,000,000 | Senior Housing Properties Trust | 05/01/19 | 3.250 | 21,980,046 | ||||||||||||||
7,296,000 | Welltower, Inc. | 06/01/16 | 6.200 | 7,324,184 | ||||||||||||||
70,388,408 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 13 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
TELECOMMUNICATIONS (1.0%) | ||||||||||||||||||
$50,130,000 | BellSouth LLC1 | 04/26/21 | 4.400 | % | $ | 51,620,014 | ||||||||||||
Total Corporate Bonds (Identified cost $1,257,662,749) | 1,233,420,512 | |||||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (7.7%) | ||||||||||||||||||
12,788,989 | Aria Energy Operating LLC2 | 05/27/22 | 5.000 | 10,231,191 | ||||||||||||||
19,597,353 | Astoria Energy LLC Term B2 | 12/24/21 | 5.000 | 18,752,315 | ||||||||||||||
47,000,000 | Avago Technologies Cayman Holdings, Ltd. Term B12 | 02/01/23 | 4.250 | 47,008,460 | ||||||||||||||
24,779,985 | Charter Communications Operating LLC (CCO Safari LLC) Term H2 | 08/24/21 | 3.250 | 24,791,632 | ||||||||||||||
14,309,014 | Dell International LLC Term B22 | 04/29/20 | 4.000 | 14,303,863 | ||||||||||||||
9,159,731 | Dell International LLC Term C2 | 10/29/18 | 3.750 | 9,155,884 | ||||||||||||||
44,844,330 | Delos Finance S.a.r.l.2 | 03/06/21 | 3.500 | 44,990,074 | ||||||||||||||
40,000,000 | Express Scripts Holding Company (Express Scripts, Inc.)2 | 04/28/17 | 1.560 | 39,850,000 | ||||||||||||||
19,672,131 | Freeport-McMoRan Copper & Gold, Inc. (PT Freeport Indonesia)2 | 05/31/18 | 2.940 | 18,873,049 | ||||||||||||||
15,940,695 | HCA, Inc. Term B62 | 03/17/23 | 3.685 | 16,042,555 | ||||||||||||||
14,680,449 | Mallinckrodt International Term B2 | 03/19/21 | 3.250 | 14,341,037 | ||||||||||||||
1,970,000 | Mallinckrodt International Term B12 | 03/19/21 | 3.500 | 1,942,085 | ||||||||||||||
5,985,000 | Rhode Island State Energy Center LP Term B2 | 12/19/22 | 5.750 | 5,895,225 | ||||||||||||||
8,034,817 | RPI Finance Trust Term B32 | 11/09/18 | 3.250 | 8,032,809 | ||||||||||||||
44,831,028 | RPI Finance Trust Term B42 | 11/09/20 | 3.500 | 45,013,042 | ||||||||||||||
19,623,341 | TPF II Power LLC Term B2 | 10/02/21 | 5.500 | 19,549,753 | ||||||||||||||
50,500,000 | Western Digital Corporation Term B2 | 04/29/23 | 6.250 | 49,279,415 | ||||||||||||||
Total Loan Participations and Assignments (Identified cost $390,887,893) | 388,052,389 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
MUNICIPAL BONDS (3.5%) | ||||||||||||||||||
$14,250,000 | Baylor Health Care System, Revenue Bonds2 | 11/15/25 | 0.740 | % | $ | 13,378,969 | ||||||||||||
2,900,000 | City of Portland, Oregon, General Obligation Bonds2 | 06/01/19 | 0.572 | 2,834,733 | ||||||||||||||
8,700,000 | City of Portland, Oregon, General Obligation Bonds2 | 06/01/19 | 0.572 | 8,504,441 | ||||||||||||||
8,000,000 | Michigan Finance Authority, Revenue Bonds | 05/01/16 | 3.000 | 8,000,000 | ||||||||||||||
5,000,000 | New Jersey Economic Development Authority, Revenue Bonds2 | 02/01/17 | 1.310 | 4,961,700 | ||||||||||||||
20,940,000 | New Jersey Economic Development Authority, Revenue Bonds, NPFG5 | 02/15/17 | 0.000 | 20,697,096 | ||||||||||||||
28,005,000 | New Jersey Economic Development Authority, Revenue Bonds, AGM5 | 02/15/18 | 0.000 | 26,987,298 | ||||||||||||||
4,360,000 | New Jersey Economic Development Authority, Revenue Bonds | 06/15/20 | 5.000 | 4,754,972 | ||||||||||||||
27,815,000 | New Jersey Economic Development Authority, Revenue Bonds, XLCA5 | 07/01/20 | 0.000 | 23,785,997 | ||||||||||||||
3,600,000 | New York State Energy Research & Development Authority, Revenue Bonds, NPFG2 | 12/01/20 | 0.718 | 3,442,856 | ||||||||||||||
7,140,000 | Pennsylvania Industrial Development Authority, Revenue Bonds1 | 07/01/21 | 2.967 | 7,238,104 | ||||||||||||||
2,375,000 | School District of Philadelphia, General Obligation Bonds | 09/01/16 | 1.787 | 2,365,358 | ||||||||||||||
3,445,000 | School District of Philadelphia, General Obligation Bonds | 09/01/17 | 2.009 | 3,389,053 | ||||||||||||||
2,330,000 | School District of Philadelphia, General Obligation Bonds | 09/01/18 | 2.512 | 2,283,563 | ||||||||||||||
15,355,000 | State of Illinois, General Obligation Bonds | 03/01/17 | 5.365 | 15,785,708 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 15 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
$ 7,110,000 | State of Illinois, General Obligation Bonds, AGM | 03/01/18 | 5.200 | % | $ | 7,476,094 | ||||||||||||
17,300,000 | State of Illinois, General Obligation Bonds | 07/01/21 | 6.200 | 18,787,973 | ||||||||||||||
16,650,000 | Tobacco Settlement Financing Corp., Revenue Bonds5 | 06/01/41 | 0.000 | 4,463,699 | ||||||||||||||
Total Municipal Bonds (Identified cost $177,832,115) | 179,137,614 | |||||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (11.0%) | ||||||||||||||||||
65,000,000 | Fannie Mae Discount Notes5 | 05/02/16 | 0.000 | 64,999,061 | ||||||||||||||
45,000,000 | Fannie Mae Discount Notes5 | 06/01/16 | 0.000 | 44,990,313 | ||||||||||||||
50,000,000 | Fannie Mae Discount Notes5 | 07/05/16 | 0.000 | 49,971,550 | ||||||||||||||
50,000,000 | Federal Home Loan Bank Discount Notes5 | 05/18/16 | 0.000 | 49,991,113 | ||||||||||||||
35,000,000 | Federal Home Loan Bank Discount Notes5 | 05/27/16 | 0.000 | 34,990,142 | ||||||||||||||
50,000,000 | Federal Home Loan Bank Discount Notes5 | 06/03/16 | 0.000 | 49,982,583 | ||||||||||||||
50,000,000 | Federal Home Loan Bank Discount Notes5 | 06/10/16 | 0.000 | 49,983,778 | ||||||||||||||
45,000,000 | Federal Home Loan Bank Discount Notes5 | 06/24/16 | 0.000 | 44,981,303 | ||||||||||||||
75,000,000 | Federal Home Loan Bank Discount Notes5 | 07/08/16 | 0.000 | 74,955,300 | ||||||||||||||
203,236 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 04/01/36 | 2.454 | 215,359 | ||||||||||||||
116,666 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 12/01/36 | 2.240 | 122,858 | ||||||||||||||
72,471 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 01/01/37 | 2.620 | 76,298 | ||||||||||||||
128,538 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 02/01/37 | 2.496 | 136,478 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (continued) | ||||||||||||||||||
$12,669,532 | Federal National Mortgage Association (FNMA) | 07/01/35 | 5.000 | % | $ | 14,079,936 | ||||||||||||
873,973 | Federal National Mortgage Association (FNMA) | 11/01/35 | 5.500 | 987,515 | ||||||||||||||
100,338 | Federal National Mortgage Association (FNMA)2 | 07/01/36 | 2.736 | 106,617 | ||||||||||||||
209,429 | Federal National Mortgage Association (FNMA)2 | 09/01/36 | 2.447 | 221,368 | ||||||||||||||
151,919 | Federal National Mortgage Association (FNMA)2 | 01/01/37 | 2.757 | 160,083 | ||||||||||||||
750,185 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 846,764 | ||||||||||||||
8,479,116 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 9,590,502 | ||||||||||||||
3,757,204 | Federal National Mortgage Association (FNMA) | 06/01/40 | 6.500 | 4,348,480 | ||||||||||||||
60,000,000 | Freddie Mac Discount Notes5 | 06/03/16 | 0.000 | 59,981,355 | ||||||||||||||
21,330 | Government National Mortgage Association (GNMA)2 | 08/20/29 | 1.875 | 22,136 | ||||||||||||||
Total U.S. Government Agency Obligations (Identified cost $554,484,005) | 555,740,892 | |||||||||||||||||
U.S. TREASURY BILLS (11.0%) | ||||||||||||||||||
55,200,000 | U.S. Treasury Bill5,6 | 05/05/16 | 0.000 | 55,198,355 | ||||||||||||||
48,000,000 | U.S. Treasury Bill5 | 05/12/16 | 0.000 | 47,995,921 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 05/19/16 | 0.000 | 49,992,925 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 06/02/16 | 0.000 | 49,987,600 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 06/09/16 | 0.000 | 49,983,885 | ||||||||||||||
25,000,000 | U.S. Treasury Bill5 | 06/16/16 | 0.000 | 24,990,720 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 06/23/16 | 0.000 | 49,981,347 | ||||||||||||||
40,000,000 | U.S. Treasury Bill5 | 07/07/16 | 0.000 | 39,989,160 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 07/28/16 | 0.000 | 49,975,250 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 08/04/16 | 0.000 | 49,969,450 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 17 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
U.S. TREASURY BILLS (continued) | ||||||||||||||||||
$50,000,000 | U.S. Treasury Bill5 | 08/18/16 | 0.000 | % | $ | 49,962,250 | ||||||||||||
40,000,000 | U.S. Treasury Bill5 | 09/01/16 | 0.000 | 39,965,600 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $557,984,098) | 557,992,463 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $5,129,994,000)7 | 100.6 | % | $ | 5,084,199,348 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (0.6 | )% | (29,866,587 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 5,054,332,761 |
1 | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities owned at April 30, 2016 was $2,440,215,456 or 48.28% of net assets. Unless otherwise noted, these securities are not considered illiquid. |
2 | Variable rate instrument. Interest rates change on specific dates (such as coupon or interest payment date). The yield shown represents the April 30, 2016 coupon or interest rate. |
3 | The Fund’s Investment Adviser has deemed this security to be illiquid based upon the SEC definition of an illiquid security. |
4 | Trust preferred security. |
5 | Security issued with zero coupon. Income is recognized through accretion of discount. |
6 | All or a portion of this security is held at the broker as collateral for open futures contracts. |
7 | The aggregate cost for federal income tax purposes is $5,129,994,000, the aggregate gross unrealized appreciation is $20,008,763 and the aggregate gross unrealized depreciation is $65,803,415 resulting in net unrealized depreciation of $45,794,652. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical investments. |
— | Level 2 – significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 19 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Investments, at value | Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* | Significant Other Observable Inputs (Level 2)* | Significant Unobservable Inputs (Level 3)* | Balance as of April 30, 2016 | ||||||||||||||
Asset Backed Securities | $ | – | $ | 1,539,780,190 | $ | 75,156,050 | $ | 1,614,936,240 | ||||||||||
Commercial Mortgage Backed Securities | – | 554,919,238 | – | 554,919,238 | ||||||||||||||
Corporate Bonds | 54,040,623 | 1,179,379,889 | – | 1,233,420,512 | ||||||||||||||
Loan Participations and Assignments | – | 388,052,389 | – | 388,052,389 | ||||||||||||||
Municipal Bonds | – | 179,137,614 | – | 179,137,614 | ||||||||||||||
U.S. Government Agency Obligations | – | 555,740,892 | – | 555,740,892 | ||||||||||||||
U.S. Treasury Bills | – | 557,992,463 | – | 557,992,463 | ||||||||||||||
Total Investments, at value | $ | 54,040,623 | $ | 4,955,002,675 | $ | 75,156,050 | $ | 5,084,199,348 | ||||||||||
Other Financial Instruments, at value | ||||||||||||||||||
Financial Futures Contracts | $ | 1,162,289 | $ | – | $ | – | $ | 1,162,289 | ||||||||||
Other Financial Instruments, at value | $ | 1,162,289 | $ | – | $ | – | $ | 1,162,289 |
* | The Fund’s policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Level 1 and Level 2 during the period ended April 30, 2016. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Asset backed Securities | ||||||
Balance as of October 31, 2015 | $ | 60,734,353 | ||||
Purchases | – | |||||
Sales / Paydowns | (12,562,758 | ) | ||||
Realized gains (losses) | 71,837 | |||||
Change in unrealized appreciation (depreciation) | (4,672,414 | ) | ||||
Amortization | 11,780 | |||||
Transfers from Level 3* | (7,165,888 | ) | ||||
Transfers to Level 3* | 38,739,140 | |||||
Balance as of April 30, 2016 | $ | 75,156,050 |
* | Transfers are reflected at the value of the security at the beginning of the period. Transfers from Level 2 to Level 3 were due to a reduction in the availability of significant observable inputs to determine fair value. Transfers from Level 3 to Level 2 were due to an increase in the availability of significant observable inputs to determine fair value. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 21 |
BBH LIMITED DURATION FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2016 (unaudited)
ASSETS: | |||||||||
Investments in securities, at value (Identified cost $5,129,994,000) | $ | 5,084,199,348 | |||||||
Cash | 6,064,442 | ||||||||
Receivables for: | |||||||||
Interest | 14,259,091 | ||||||||
Shares sold | 13,437,129 | ||||||||
Investments sold | 839,456 | ||||||||
Dividends | 694,384 | ||||||||
Investment advisory and administrative fees waiver reimbursement | 20,804 | ||||||||
Prepaid assets | 12,332 | ||||||||
Total Assets | 5,119,526,986 | ||||||||
LIABILITIES: | |||||||||
Payables for: | |||||||||
Investments purchased | 61,484,226 | ||||||||
Shares redeemed | 1,423,200 | ||||||||
Investment advisory and administrative fees | 1,081,209 | ||||||||
Futures variation margin on open contracts | 687,459 | ||||||||
Custody and fund accounting fees | 127,589 | ||||||||
Periodic distributions | 80,264 | ||||||||
Professional fees | 40,367 | ||||||||
Shareholder servicing fees | 5,891 | ||||||||
Distributor fees | 4,923 | ||||||||
Board of Trustees’ fees | 4,114 | ||||||||
Transfer agent fees | 2,185 | ||||||||
Accrued expenses and other liabilities | 252,798 | ||||||||
Total Liabilities | 65,194,225 | ||||||||
NET ASSETS | $ | 5,054,332,761 | |||||||
Net Assets Consist of: | |||||||||
Paid-in capital | $ | 5,160,625,632 | |||||||
Undistributed net investment income | 440,912 | ||||||||
Accumulated net realized loss on investments in securities and futures contracts | (62,101,420 | ) | |||||||
Net unrealized appreciation/(depreciation) on investments in securities and futures contracts | (44,632,363 | ) | |||||||
Net Assets | $ | 5,054,332,761 | |||||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | |||||||||
CLASS N SHARES | |||||||||
($36,046,767 ÷ 3,579,335 shares outstanding) | $10.07 | ||||||||
CLASS I SHARES | |||||||||
($5,018,285,994 ÷ 498,491,734 shares outstanding) | $10.07 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2016 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends | $ | 1,755,842 | ||||
Interest and other income | 57,530,621 | |||||
Total Income | 59,286,463 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 6,130,293 | |||||
Shareholder servicing fees | 941,606 | |||||
Custody and fund accounting fees | 187,678 | |||||
Professional fees | 41,305 | |||||
Distributor fees | 33,411 | |||||
Board of Trustees’ fees | 29,647 | |||||
Transfer agent fees | 14,477 | |||||
Miscellaneous expenses | 191,183 | |||||
Total Expenses | 7,569,600 | |||||
Investment advisory and administrative fees waiver | (38,735 | ) | ||||
Expense offset arrangement | (5,723 | ) | ||||
Net Expenses | 7,525,142 | |||||
Net Investment Income | 51,761,321 | |||||
NET REALIZED AND UNREALIZED LOSS: | ||||||
Net realized loss on investments in securities | (10,560,792 | ) | ||||
Net realized loss on futures contracts | (9,535,928 | ) | ||||
Net realized loss on investments in securities and futures contracts | (20,096,720 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (14,074,990 | ) | ||||
Net change in unrealized appreciation/(depreciation) on futures contracts | (96,476 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | (14,171,466 | ) | ||||
Net Realized and Unrealized Loss | (34,268,186 | ) | ||||
Net Increase in Net Assets Resulting from Operations | $ | 17,493,135 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 23 |
BBH LIMITED DURATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||
INCREASE (DECREASE) IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 51,761,321 | $ | 94,551,595 | ||||||
Net realized loss on investments in securities and futures contracts | (20,096,720 | ) | (41,411,373 | ) | ||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | (14,171,466 | ) | (40,993,492 | ) | ||||||
Net increase in net assets resulting from operations | 17,493,135 | 12,146,730 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (8,551,774 | ) | (46,344,802 | ) | ||||||
Class I | (43,274,418 | ) | (47,959,131 | ) | ||||||
Total dividends and distributions declared | (51,826,192 | ) | (94,303,933 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 3,537,916,804 | 2,179,033,729 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 51,204,135 | 92,942,518 | ||||||||
Cost of shares redeemed* | (3,210,952,835 | ) | (2,651,777,342 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions | 378,168,104 | (379,801,095 | ) | |||||||
Total increase (decrease) in net assets | 343,835,047 | (461,958,298 | ) | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 4,710,497,714 | 5,172,456,012 | ||||||||
End of period (including undistributed net investment income of $440,912 and $505,783, respectively) | $ | 5,054,332,761 | $ | 4,710,497,714 |
* | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | $ | 10.46 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.10 | 0.18 | 0.14 | 0.15 | 0.18 | 0.17 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (0.07 | ) | (0.17 | ) | (0.01 | ) | (0.06 | ) | 0.14 | (0.12 | ) | |||||||||||||
Total income from investment operations | 0.03 | 0.01 | 0.13 | 0.09 | 0.32 | 0.05 | ||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.18 | ) | (0.14 | ) | (0.15 | ) | (0.18 | ) | (0.17 | ) | ||||||||||||
From net realized gains | – | – | (0.03 | ) | (0.03 | ) | (0.04 | ) | – | |||||||||||||||
Total dividends and distributions | (0.10 | ) | (0.18 | ) | (0.17 | ) | (0.18 | ) | (0.22 | ) | (0.17 | ) | ||||||||||||
Short-term redemption fees1 | – | – | – | – | – | 0.00 | 2 | |||||||||||||||||
Net asset value, end of period | $ | 10.07 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | ||||||||||||
Total return | 0.30 | %3 | 0.10 | % | 1.32 | % | 0.82 | % | 3.13 | % | 0.52 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (in millions) | $36 | $ | 2,557 | $ | 2,625 | $ | 2,170 | $ | 1,776 | $ | 1,336 | |||||||||||||
Ratio of expenses to average net assets before reductions | 0.49 | %4 | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | % | 0.49 | % | ||||||||||||
Fee waiver | 0.01 | %4,5 | – | % | – | % | – | % | – | % | – | % | ||||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | ||||||||||||
Ratio of expenses to average net assets after reductions | 0.48 | %4 | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | % | 0.49 | % | ||||||||||||
Ratio of net investment income to average net assets | 1.90 | %4 | 1.75 | % | 1.36 | % | 1.44 | % | 1.75 | % | 1.66 | % | ||||||||||||
Portfolio turnover rate | 17 | %3 | 46 | % | 35 | % | 48 | % | 38 | % | 28 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the six months ended April 30, 2016, reflect fees reduced as result of voluntary operating expense limitation of the share class to 0.48%. The agreement is effective for the period beginning on December 29, 2015 and can be changed at any time at the sole discretion of the Investment Adviser. For the six months ended April 30, 2016, the waived fees were $38,735. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 25 |
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the years ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | $ | 10.46 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.11 | 0.20 | 0.16 | 0.17 | 0.20 | 0.19 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (0.07 | ) | (0.17 | ) | (0.01 | ) | (0.06 | ) | 0.14 | (0.12 | ) | |||||||||||||
Total income from investment operations | 0.04 | 0.03 | 0.15 | 0.11 | 0.34 | 0.07 | ||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.20 | ) | (0.16 | ) | (0.17 | ) | (0.20 | ) | (0.19 | ) | ||||||||||||
From net realized gains | – | – | (0.03 | ) | (0.03 | ) | (0.04 | ) | – | |||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.20 | ) | (0.19 | ) | (0.20 | ) | (0.24 | ) | (0.19 | ) | ||||||||||||
Short-term redemption fees1 | – | – | – | – | – | 0.00 | 2 | |||||||||||||||||
Net asset value, end of period | $ | 10.07 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | ||||||||||||
Total return | 0.42 | %3 | 0.30 | % | 1.52 | % | 1.01 | % | 3.31 | % | 0.67 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 5,018 | $ | 2,153 | $ | 2,547 | $ | 1,448 | $ | 1,165 | $ | 825 | ||||||||||||
Ratio of expenses to average net assets before reductions | 0.28 | %4 | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | 0.33 | % | ||||||||||||
Expense offset arrangement | 0.00 | %4,5 | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | ||||||||||||
Ratio of expenses to average net assets after reductions | 0.28 | %4 | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | 0.33 | % | ||||||||||||
Ratio of net investment income to average net assets | 2.28 | %4 | 1.94 | % | 1.56 | % | 1.63 | % | 1.93 | % | 1.82 | % | ||||||||||||
Portfolio turnover rate | 17 | %3 | 46 | % | 35 | % | 48 | % | 38 | % | 28 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2016 (unaudited)
1. | Organization. The Fund is a separate, diversified series of BBH Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on December 22, 2000. The Fund offers Class N and Class I shares. Class N and Class I shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Class I shares automatically convert to any other share class of the Fund. As of April 30, 2016, there were six series of the Trust. |
2. | Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. | Valuation of Investments. Bonds and other fixed income securities, including restricted securities (other than short-term obligations but including listed issues) are valued at their most recent bid prices (sales price if the principal market is an exchange) in the principal market in which such securities are normally traded, on the basis of valuations furnished by a pricing service, use of which has been approved by the Board. In making such valuations, the pricing service utilizes both dealer supplied valuations and electronic data processing techniques, which take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, without exclusive reliance upon quoted prices, or exchange or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of such securities. Future contracts held by the Fund are valued daily at the official settlement price of the exchange on which it is traded. |
financial statements april 30, 2016 | 27 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Interest income is accrued daily and consists of interest accrued, discount earned (including, if any, both original issue and market discount) and premium amortization on the investments of the Fund. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of the interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. | Financial Futures Contracts. The Fund may enter into open futures contracts in order to hedge against anticipated future changes in interest rates which otherwise might either adversely affect the value of securities held for the Fund or adversely affect the prices of securities that are intended to be purchased at a later date for the Fund. The contractual amount of the futures contracts represents the investment the Fund has in a particular contract and does not necessarily represent the amounts potentially subject to risk of loss. Trading in futures contracts involves, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The measurement of risk associated with futures contracts is meaningful only when all related and offsetting transactions are considered. Gains and losses are realized upon the expiration or closing of the futures contracts. |
Description | Number of Contracts | Expiration Date | Market Value | Notional Amount | Unrealized Gain /(Loss) | |||||||||||||||||
Contracts to Sell: | ||||||||||||||||||||||
U.S. Treasury 2-Year Notes | 2,800 | June 2016 | $ | 612,150,000 | $ | 612,500,000 | $ | 350,000 | ||||||||||||||
U.S. Treasury 5-Year Notes | 5,250 | June 2016 | 634,798,831 | 635,518,620 | 719,789 | |||||||||||||||||
U.S. Treasury 10-Year Notes | 185 | June 2016 | 24,061,563 | 24,154,063 | 92,500 | |||||||||||||||||
$ | 1,162,289 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Risk | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |||||||||||||||
Interest Rate Risk | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. | $ | 1,162,289 | * | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. | $ | – | ||||||||||||
Total | $ | 1,162,289 | $ | – |
* | Includes cumulative appreciation of futures contracts as reported in the Statement of Assets and Liabilities and Notes to Financial Statements. Only the current day’s variation margin is reported within the Statement of Assets and Liabilities. |
Interest Rate Risk | ||||
Net Realized Gain/(Loss) on Derivatives | ||||
Futures Contracts | $ | (9,535,928 | ) | |
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives | ||||
Futures Contracts | $ | (96,476 | ) |
E. | Rule 144A Securities. The Fund may purchase securities that are not registered under the Securities Act of 1933, as amended (“1933 Act”) but that can be sold to “qualified institutional buyers” in accordance with the requirements stated in Rule 144A under the 1933 Act (“Rule 144A Securities”). A Rule 144A Security may be considered illiquid and therefore subject to the 15% |
financial statements april 30, 2016 | 29 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
limitation on the purchase of illiquid securities, unless it is determined on an ongoing basis that an adequate trading market exists for the security, which is the case for the Fund. Guidelines have been adopted and the daily function of determining and monitoring liquidity of Rule 144A Securities has been delegated to the investment adviser. All relevant factors will be considered in determining the liquidity of Rule 144A Securities and all investments in Rule 144A Securities will be carefully monitored. Information regarding Rule 144A Securities is included at the end of the Portfolio of Investments. |
F. | Loan Participations and Assignments. The Fund may invest in loan participations and assignments, which include institutionally traded floating and fixed-rate debt securities generally acquired as an assignment from another holder of, or participation interest in, loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. Some loan participations and assignments may be purchased on a “when-issued” basis. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with interest rate changes and/or issuer credit quality, and unexpected changes in such rates could result in losses to the Fund. The interest rates paid on a floating rate security in which the Fund invests generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and is generally representative of the most competitive and current cash rates. |
G. | Federal Income Taxes. It is the Trust’s policy to comply with the requirements of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required. The Fund files a tax return annually using tax accounting methods required under provisions of the Code, which may differ from GAAP, which is the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported in these financial statements may differ from that reported on the Fund’s tax |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
return, due to certain book-to-tax timing differences such as losses deferred due to “wash sale” transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV. |
H. | Dividends and Distributions to Shareholders. Dividends and distributions from net investment income to shareholders, if any, are paid monthly and are recorded on the ex-dividend date. Distributions from net capital gains, if any, are generally declared and paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amount of $8,551,774 and $43,274,418 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2016. |
Distributions paid from: | ||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||
2015: | $ | 94,303,933 | $ | – | $ | 94,303,933 | – | $ | 94,303,933 | |||||||||||
2014: | 68,745,792 | 7,199,049 | 75,944,841 | – | 75,944.841 |
financial statements april 30, 2016 | 31 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
Components of accumulated earnings/(deficit): | ||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Accumulated earnings | Accumulated capital and other losses | Other book/tax temporary differences | Unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||
2015: | $1,490,762 | – | $1,490,762 | $(40,745,890 | ) | $(2,243,789 | ) | $(30,460,897 | ) | $(71,959,814 | ) | |||||||
2014: | 405,409 | – | 405,409 | (6,353,632 | ) | 5,613,017 | 10,532,595 | 10,197,389 |
I. | Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. | Fees and Other Transactions with Affiliates. |
A. | Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (“Agreement”) with the Trust, Brown Brothers Harriman & Co. |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
(“BBH”) through a separately identifiable department (“SID” or “Investment Adviser”) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund pays a combined fee for investment advisory and administration services calculated daily and paid monthly at an annual rate equivalent to 0.30% per annum on the first $1,000,000,000 of the Fund’s average daily net assets and 0.25% per annum on the Fund’s average daily net assets over $1,000,000,000. For the six months ended April 30, 2016, the Fund incurred $6,130,293 for services under the Agreement.
B. | Investment Advisory and Administrative Fee Waivers. Effective December 29, 2015, the Investment Adviser has voluntarily agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary courses of the Fund’s business) of Class N to 0.48%. This is a voluntary waiver that can be changed at any time at the sole discretion of the Investment Adviser. For six months ended April 30, 2016, the Investment Adviser waived fees in the amount of $38,735 for Class N. |
C. | Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% of Class N shares’ average daily net assets. For the six months ended April 30, 2016, Class N shares of the Fund incurred $941,606 in shareholder servicing fees. |
D. | Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Fund’s cash and investments and calculates the Fund’s daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Fund’s net asset value. For the six months ended April 30, 2016, the Fund incurred $187,678 in custody and fund accounting fees. These fees for the Fund were reduced by $5,723 as a result of an expense offset arrangement with the Fund’s custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. In the event that the Fund is overdrawn, under the custody agreement with BBH, BBH will make overnight loans to the Fund to cover overdrafts. Pursuant to their agreement, the Fund will pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2016, was $260. |
E. | Board of Trustees’ Fees. Each Trustee who is not an “interested person” as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the six months ended April 30, 2016, the Fund incurred $29,647 in independent Trustee compensation and reimbursements. |
financial statements april 30, 2016 | 33 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
4. | Investment Transactions. For the six months ended April 30, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $677,133,405 and $1,071,977,597, respectively. |
5. | Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N shares and Class I shares of beneficial interest, at no par value. Transactions in Class N and Class I shares were as follows: |
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||||
Class N | ||||||||||||||||||
Shares sold | 10,295,814 | $ | 104,204,494 | 101,437,734 | $ | 1,038,660,135 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 831,930 | 8,409,750 | 4,501,309 | 46,026,061 | ||||||||||||||
Shares redeemed | (259,657,376 | ) | (2,620,617,611 | ) | (108,447,428 | ) | (1,109,707,589 | ) | ||||||||||
Net decrease | (248,529,632 | ) | $ | (2,508,003,367 | ) | (2,508,385 | ) | $ | (25,021,393 | ) | ||||||||
Class I | ||||||||||||||||||
Shares sold | 340,572,502 | $ | 3,433,712,310 | 111,233,476 | $ | 1,140,373,594 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 4,255,331 | 42,794,385 | 4,588,432 | 46,916,457 | ||||||||||||||
Shares redeemed | (58,606,528 | ) | (590,335,224 | ) | (150,695,776 | ) | (1,542,069,753 | ) | ||||||||||
Net increase (decrease) | 286,221,305 | $ | 2,886,171,471 | (34,873,868 | ) | $ | (354,779,702 | ) |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
6. | Principal Risk Factors and Indemnifications. |
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including but not limited to, those described below: |
financial statements april 30, 2016 | 35 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 37 |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2016 (unaudited)
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||
Class N | ||||||||||||
Actual | $1,000 | $1,003 | $2.39 | |||||||||
Hypothetical2 | $1,000 | $1,022 | $2.41 |
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||||||||
Class I | ||||||||||||
Actual | $1,000 | $1,004 | $1.40 | |||||||||
Hypothetical2 | $1,000 | $1,023 | $1.41 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.48% and 0.28% for Class N and I shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
2 | Assumes a return of 5% before expenses. For the purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 39 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
the Agreement also contemplates the provision of administrative services by BBH to the Fund within the same fee structure. The Board received and considered information, during the December meeting and over the course of the previous year, regarding the nature, extent and quality of services provided to the Fund by BBH as both the Investment Adviser and administrator including: portfolio management, the supervision of operations and compliance, preparation of regulatory filings, disclosures to Fund shareholders, general oversight of service providers, assistance to the Board (including the Independent Trustees in their capacity as Trustees), Chief Compliance Officer services for the Trust, and other services. The Board considered the resources of the Investment Adviser and BBH dedicated to the Fund noting that pursuant to separate agreements, BBH also provides custody, shareholder servicing, and fund accounting services to the Fund.
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
provision of services to the Fund by affiliated and nonaffiliated service providers. In the Lipper Report, the Board received and considered information comparing the Fund’s combined investment advisory and administration fee and the Fund’s net total expenses with those of other comparable mutual funds, such peer group and comparisons having been selected and calculated by Lipper, noting that the Fund compared well to the selected peer-set. The Board recognized that it is difficult to make comparisons of the fee rate, or of combined advisory and administration fees, because there are variations in the services that are included in the fees paid by other funds. The Board concluded that the advisory and administration fee appeared to be both reasonable in light of the services rendered and the result of arm’s length negotiations.
financial statements april 30, 2016 | 41 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST
April 30, 2016 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 43 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 (800) 575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||
By E-mail send your request to: | bbhfunds@bbh.com | |||
On the internet: | www.bbhfunds.com |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO ALLOCATION
April 30, 2016 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Municipal Bonds | $ | 87,796,224 | 97.8 | % | ||||||
Cash and Other Assets in Excess of Liabilities | 1,993,091 | 2.2 | ||||||||
NET ASSETS | $ | 89,789,315 | 100.0 | % |
U.S. $ Value | Percent of Total Investments | |||||||||
AAA | $ | 18,714,942 | 21.3 | % | ||||||
AA | 26,580,585 | 30.3 | ||||||||
A | 33,196,980 | 37.8 | ||||||||
BBB | 6,226,905 | 7.1 | ||||||||
BB | 2,530,708 | 2.9 | ||||||||
Not rated | 546,104 | 0.6 | ||||||||
TOTAL INVESTMENTS | $ | 87,796,224 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (97.8%) | ||||||||||||||||||
Alabama (0.4%) | ||||||||||||||||||
$ 290,000 | Alabama 21st Century Authority, Revenue Bonds | 06/01/21 | 5.000 | % | $ | 337,105 | ||||||||||||
Total Alabama | 337,105 | |||||||||||||||||
Arizona (2.2%) | ||||||||||||||||||
100,000 | Coconino County Pollution Control Corp., Revenue Bonds, FGIC1 | 09/01/32 | 1.097 | 92,834 | ||||||||||||||
425,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/19 | 5.250 | 478,372 | ||||||||||||||
55,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/22 | 5.250 | 65,290 | ||||||||||||||
745,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/24 | 5.250 | 902,232 | ||||||||||||||
80,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/26 | 5.250 | 98,408 | ||||||||||||||
300,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/32 | 5.000 | 369,036 | ||||||||||||||
Total Arizona | 2,006,172 | |||||||||||||||||
California (3.2%) | ||||||||||||||||||
2,000,000 | Anaheim City School District, General Obligation Bonds, AGM, NPFG2 | 08/01/29 | 0.000 | 1,336,060 | ||||||||||||||
1,000,000 | Grossmont Union High School District, General Obligation Bonds2 | 08/01/27 | 0.000 | 741,350 | ||||||||||||||
25,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/19 | 5.250 | 28,065 | ||||||||||||||
660,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/22 | 5.250 | 783,592 | ||||||||||||||
30,000 | Long Beach Bond Finance Authority, Revenue Bonds1 | 11/15/27 | 1.864 | 28,053 | ||||||||||||||
Total California | 2,917,120 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 3 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Colorado (0.4%) | ||||||||||||||||||
$ 415,000 | Denver Health & Hospital Authority, Revenue Bonds1 | 12/01/33 | 1.526 | % | $ | 383,701 | ||||||||||||
Total Colorado | 383,701 | |||||||||||||||||
Connecticut (1.7%) | ||||||||||||||||||
550,000 | Connecticut Housing Finance Authority, Revenue Bonds | 05/15/22 | 3.250 | 572,281 | ||||||||||||||
125,000 | Connecticut Housing Finance Authority, Revenue Bonds | 11/15/22 | 3.250 | 130,066 | ||||||||||||||
140,000 | Connecticut Housing Finance Authority, Revenue Bonds | 11/15/23 | 3.450 | 145,309 | ||||||||||||||
725,000 | State of Connecticut, General Obligation Bonds1 | 03/01/25 | 1.400 | 704,156 | ||||||||||||||
Total Connecticut | 1,551,812 | |||||||||||||||||
Florida (1.8%) | ||||||||||||||||||
1,080,000 | Greater Orlando Aviation Authority, Revenue Bonds | 10/01/27 | 5.000 | 1,277,511 | ||||||||||||||
35,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/25 | 5.000 | 41,350 | ||||||||||||||
10,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/26 | 5.000 | 11,725 | ||||||||||||||
300,000 | Pinellas County Health Facilities Authority, Revenue Bonds, NPFG1 | 11/15/23 | 0.602 | 281,834 | ||||||||||||||
Total Florida | 1,612,420 | |||||||||||||||||
Georgia (0.6%) | ||||||||||||||||||
500,000 | Monroe County Development Authority, Revenue Bonds1 | 01/01/39 | 2.400 | 515,475 | ||||||||||||||
Total Georgia | 515,475 | |||||||||||||||||
Hawaii (0.4%) | ||||||||||||||||||
300,000 | State of Hawaii Airports System Revenue, Certificates of Participation | 08/01/21 | 5.000 | 349,767 | ||||||||||||||
Total Hawaii | 349,767 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Illinois (8.2%) | ||||||||||||||||||
$ 90,000 | Chicago Park District, General Obligation Bonds | 11/15/16 | 5.000 | % | $ | 91,716 | ||||||||||||
525,000 | Chicago Park District, General Obligation Bonds | 01/01/18 | 4.250 | 547,407 | ||||||||||||||
75,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 3.000 | 77,147 | ||||||||||||||
360,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 4.000 | 379,595 | ||||||||||||||
100,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 5.000 | 108,024 | ||||||||||||||
30,000 | Chicago Transit Authority, Revenue Bonds, AMBAC | 06/01/16 | 5.250 | 30,082 | ||||||||||||||
100,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/17 | 5.000 | 103,969 | ||||||||||||||
110,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/19 | 5.250 | 118,114 | ||||||||||||||
710,000 | Chicago Transit Authority, Revenue Bonds | 06/01/19 | 5.500 | 777,684 | ||||||||||||||
500,000 | Chicago Transit Authority, Revenue Bonds | 06/01/20 | 5.000 | 559,660 | ||||||||||||||
500,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/20 | 5.250 | 535,715 | ||||||||||||||
320,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/22 | 5.000 | 343,139 | ||||||||||||||
300,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/23 | 5.250 | 319,212 | ||||||||||||||
165,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/24 | 5.250 | 175,151 | ||||||||||||||
135,000 | Metropolitan Pier & Exposition Authority, Revenue Bonds, NPFG2 | 12/15/19 | 0.000 | 125,362 | ||||||||||||||
170,000 | Metropolitan Pier & Exposition Authority, Revenue Bonds, NPFG2 | 12/15/21 | 0.000 | 148,196 | ||||||||||||||
105,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/19 | 5.125 | 117,303 | ||||||||||||||
95,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/21 | 5.375 | 112,311 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 5 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Illinois (continued) | ||||||||||||||||||
$ 375,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/23 | 5.500 | % | $ | 440,213 | ||||||||||||
500,000 | State of Illinois, General Obligation Bonds | 02/01/19 | 5.000 | 539,810 | ||||||||||||||
185,000 | State of Illinois, General Obligation Bonds | 04/01/20 | 5.000 | 203,783 | ||||||||||||||
200,000 | State of Illinois, General Obligation Bonds | 08/01/21 | 5.000 | 222,128 | ||||||||||||||
1,125,000 | State of Illinois, General Obligation Bonds | 07/01/22 | 5.000 | 1,256,648 | ||||||||||||||
Total Illinois | 7,332,369 | |||||||||||||||||
Kansas (0.4%) | ||||||||||||||||||
200,000 | City of La Cygne, Revenue Bonds, NPFG1 | 04/15/27 | 0.820 | 172,738 | ||||||||||||||
100,000 | City of St. Marys, Revenue Bonds, NPFG1 | 04/15/32 | 0.820 | 89,571 | ||||||||||||||
100,000 | City of Wamego, Revenue Bonds, NPFG1 | 04/15/32 | 0.800 | 89,432 | ||||||||||||||
Total Kansas | 351,741 | |||||||||||||||||
Kentucky (4.6%) | ||||||||||||||||||
3,000,000 | Carroll County, Revenue Bonds, AMBAC1 | 10/01/32 | 0.882 | 2,712,489 | ||||||||||||||
1,340,000 | Kentucky Housing Corp., Revenue Bonds3 | 07/01/19 | 4.250 | 1,427,569 | ||||||||||||||
Total Kentucky | 4,140,058 | |||||||||||||||||
Maryland (1.4%) | ||||||||||||||||||
1,000,000 | County of Baltimore, General Obligation Bonds | 08/01/23 | 5.000 | 1,252,550 | ||||||||||||||
Total Maryland | 1,252,550 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Massachusetts (2.1%) | ||||||||||||||||||
$ 100,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM1 | 06/01/17 | 1.717 | % | $ | 101,629 | ||||||||||||
700,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM1 | 06/01/22 | 1.927 | 753,165 | ||||||||||||||
1,000,000 | Massachusetts Housing Finance Agency, Revenue Bonds | 12/01/21 | 2.500 | 1,008,310 | ||||||||||||||
Total Massachusetts | 1,863,104 | |||||||||||||||||
Michigan (4.0%) | ||||||||||||||||||
220,000 | Detroit City School District, General Obligation Bonds, FGIC | 05/01/20 | 6.000 | 257,286 | ||||||||||||||
250,000 | Detroit City School District, General Obligation Bonds, FGIC | 05/01/21 | 6.000 | 300,442 | ||||||||||||||
350,000 | Detroit City School District, General Obligation Bonds | 05/01/23 | 5.000 | 411,169 | ||||||||||||||
95,000 | Detroit City School District, General Obligation Bonds, BHAC, FGIC | 05/01/25 | 5.250 | 112,742 | ||||||||||||||
55,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/27 | 5.250 | 69,397 | ||||||||||||||
305,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/29 | 6.000 | 388,732 | ||||||||||||||
1,510,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/30 | 5.250 | 1,913,729 | ||||||||||||||
105,000 | Michigan Finance Authority, Revenue Bonds | 05/01/19 | 5.000 | 116,592 | ||||||||||||||
Total Michigan | 3,570,089 | |||||||||||||||||
Minnesota (1.4%) | ||||||||||||||||||
1,300,000 | City of Minneapolis, Revenue Bonds1,4 | 05/05/16 | 0.390 | 1,300,000 | ||||||||||||||
Total Minnesota | 1,300,000 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 7 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Missouri (0.6%) | ||||||||||||||||||
$ 300,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC1 | 06/01/31 | 0.753 | % | $ | 269,260 | ||||||||||||
310,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC1 | 06/01/31 | 0.765 | 278,970 | ||||||||||||||
Total Missouri | 548,230 | |||||||||||||||||
Montana (0.5%) | ||||||||||||||||||
445,000 | Montana Board of Housing, Revenue Bonds | 12/01/43 | 3.000 | 460,855 | ||||||||||||||
Total Montana | 460,855 | |||||||||||||||||
Nebraska (0.6%) | ||||||||||||||||||
455,000 | Central Plains Energy Project, Revenue Bonds | 09/01/27 | 5.000 | 522,012 | ||||||||||||||
Total Nebraska | 522,012 | |||||||||||||||||
Nevada (0.9%) | ||||||||||||||||||
900,000 | County of Washoe, Revenue Bonds, NPFG1 | 03/01/36 | 1.088 | 835,395 | ||||||||||||||
Total Nevada | 835,395 | |||||||||||||||||
New Jersey (19.7%) | ||||||||||||||||||
1,270,000 | New Jersey Economic Development Authority, Revenue Bonds1 | 02/01/17 | 1.310 | 1,260,272 | ||||||||||||||
2,000,000 | New Jersey Economic Development Authority, Revenue Bonds | 06/15/23 | 5.000 | 2,235,440 | ||||||||||||||
1,250,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/19 | 5.000 | 1,371,812 | ||||||||||||||
1,050,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/20 | 5.000 | 1,176,777 | ||||||||||||||
200,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/21 | 5.000 | 227,964 | ||||||||||||||
300,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds | 12/15/23 | 5.500 | 345,849 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New Jersey (continued) | ||||||||||||||||||
$ 1,150,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds2 | 12/15/26 | 0.000 | % | $ | 747,511 | ||||||||||||
1,850,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds2 | 12/15/30 | 0.000 | 970,991 | ||||||||||||||
650,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG1 | 01/01/30 | 0.502 | 586,496 | ||||||||||||||
925,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG1 | 01/01/30 | 0.718 | 834,629 | ||||||||||||||
1,200,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG1 | 01/01/30 | 0.718 | 1,082,771 | ||||||||||||||
5,750,000 | Tobacco Settlement Financing Corp., Revenue Bonds2 | 06/01/41 | 0.000 | 1,541,518 | ||||||||||||||
20,155,000 | Tobacco Settlement Financing Corp., Revenue Bonds2 | 06/01/41 | 0.000 | 5,282,021 | ||||||||||||||
Total New Jersey | 17,664,051 | |||||||||||||||||
New York (11.8%) | ||||||||||||||||||
400,000 | City of New York, General Obligation Bonds1,4 | 05/02/16 | 0.320 | 400,000 | ||||||||||||||
1,075,000 | Metropolitan Transportation Authority, Revenue Bonds, AGM1 | 11/01/22 | 0.866 | 1,034,325 | ||||||||||||||
50,000 | Metropolitan Transportation Authority, Revenue Bonds, AGM1 | 11/01/22 | 0.875 | 48,101 | ||||||||||||||
50,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1,3 | 01/01/30 | 1.197 | 45,352 | ||||||||||||||
400,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1,3 | 01/01/30 | 1.202 | 364,195 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 9 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New York (continued) | ||||||||||||||||||
$ 150,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1,3 | 01/01/30 | 1.207 | % | $ | 136,558 | ||||||||||||
220,000 | New York City Transitional Finance Authority, Revenue Bonds1,4 | 05/02/16 | 0.320 | 220,000 | ||||||||||||||
120,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 12/01/23 | 1.097 | 114,091 | ||||||||||||||
225,000 | New York State Energy Research & Development Authority, Revenue Bonds, FGIC1 | 06/01/25 | 1.097 | 204,322 | ||||||||||||||
1,845,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 12/01/25 | 1.092 | 1,735,970 | ||||||||||||||
700,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 12/01/25 | 1.094 | 658,635 | ||||||||||||||
500,000 | New York State Energy Research & Development Authority, Revenue Bonds1 | 07/01/26 | 2.375 | 506,580 | ||||||||||||||
210,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 12/01/26 | 1.085 | 195,077 | ||||||||||||||
300,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 03/01/27 | 1.087 | 281,342 | ||||||||||||||
1,890,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 07/01/27 | 1.082 | 1,771,639 | ||||||||||||||
110,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 | 07/01/27 | 1.085 | 103,115 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New York (continued) | ||||||||||||||||||
$ 1,070,000 | New York State Energy Research & Development Authority, Revenue Bonds, XLCA1 | 07/01/29 | 1.100 | % | $ | 1,000,196 | ||||||||||||
1,925,000 | New York State Energy Research & Development Authority, Revenue Bonds, NPFG1 | 04/01/34 | 1.200 | 1,795,349 | ||||||||||||||
Total New York | 10,614,847 | |||||||||||||||||
North Carolina (3.7%) | ||||||||||||||||||
1,405,000 | County of Mecklenburg, General Obligation Bonds | 04/01/24 | 5.000 | 1,781,189 | ||||||||||||||
1,250,000 | State of North Carolina, General Obligation Bonds | 06/01/23 | 5.000 | 1,567,400 | ||||||||||||||
Total North Carolina | 3,348,589 | |||||||||||||||||
Ohio (0.6%) | ||||||||||||||||||
500,000 | Lancaster Port Authority, Revenue Bonds1 | 05/01/38 | 1.011 | 497,800 | ||||||||||||||
Total Ohio | 497,800 | |||||||||||||||||
Oregon (1.6%) | ||||||||||||||||||
1,615,000 | Clackamas Community College District, General Obligation Bonds2 | 06/15/23 | 0.000 | 1,434,798 | ||||||||||||||
Total Oregon | 1,434,798 | |||||||||||||||||
Pennsylvania (3.9%) | ||||||||||||||||||
465,000 | Allegheny County Airport Authority, Revenue Bonds | 01/01/21 | 5.000 | 529,407 | ||||||||||||||
150,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/22 | 5.000 | 174,132 | ||||||||||||||
50,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/23 | 5.000 | 58,999 | ||||||||||||||
75,000 | School District of Philadelphia, General Obligation Bonds | 09/01/20 | 5.000 | 83,159 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 11 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Pennsylvania (continued) | ||||||||||||||||||
$ 350,000 | School District of Philadelphia, General Obligation Bonds | 09/01/20 | 5.000 | % | $ | 387,614 | ||||||||||||
1,000,000 | School District of Philadelphia, General Obligation Bonds | 09/01/21 | 5.000 | 1,091,970 | ||||||||||||||
880,000 | School District of Philadelphia, General Obligation Bonds | 09/01/22 | 5.250 | 967,965 | ||||||||||||||
215,000 | School District of Philadelphia, General Obligation Bonds, AGM, FGIC | 06/01/24 | 5.000 | 251,075 | ||||||||||||||
�� | Total Pennsylvania | 3,544,321 | ||||||||||||||||
Tennessee (2.0%) | ||||||||||||||||||
1,480,000 | Tennessee Energy Acquisition Corp., Revenue Bonds | 02/01/23 | 5.000 | 1,756,627 | ||||||||||||||
Total Tennessee | 1,756,627 | |||||||||||||||||
Texas (7.9%) | ||||||||||||||||||
325,000 | City of Houston Airport System, Revenue Bonds, AGM1 | 07/01/30 | 0.860 | 294,926 | ||||||||||||||
825,000 | City of Houston Airport System, Revenue Bonds, AGM1 | 07/01/30 | 0.860 | 749,042 | ||||||||||||||
75,000 | City of Houston Airport System, Revenue Bonds, XLCA1 | 07/01/32 | 0.870 | 68,708 | ||||||||||||||
575,000 | City of Houston Airport System, Revenue Bonds, XLCA1 | 07/01/32 | 0.870 | 526,590 | ||||||||||||||
225,000 | City of Houston Airport System, Revenue Bonds, XLCA1 | 07/01/32 | 0.873 | 206,746 | ||||||||||||||
1,805,000 | Grand Prairie Independent School District, General Obligation Bonds | 02/15/24 | 5.250 | 2,300,292 | ||||||||||||||
3,145,000 | North Texas Tollway Authority, Revenue Bonds, AGC2 | 01/01/29 | 0.000 | 2,122,686 | ||||||||||||||
310,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/19 | 5.250 | 349,457 | ||||||||||||||
95,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/20 | 5.250 | 109,492 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Texas (continued) | ||||||||||||||||||
$ 300,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/21 | 5.250 | % | $ | 352,569 | ||||||||||||
Total Texas | 7,080,508 | |||||||||||||||||
Utah (2.9%) | ||||||||||||||||||
2,000,000 | State of Utah, General Obligation Bonds | 07/01/24 | 5.000 | 2,562,100 | ||||||||||||||
Total Utah | 2,562,100 | |||||||||||||||||
Virginia (5.0%) | ||||||||||||||||||
3,570,000 | Commonwealth of Virginia, General Obligation Bonds | 06/01/23 | 5.000 | 4,473,745 | ||||||||||||||
Total Virginia | 4,473,745 | |||||||||||||||||
Washington (2.9%) | ||||||||||||||||||
1,000,000 | Port of Seattle, Revenue Bonds | 04/01/23 | 5.000 | 1,209,870 | ||||||||||||||
180,000 | Washington State Housing Finance Commission, Revenue Bonds, FHLMC, FNMA, GNMA | 12/01/21 | 2.900 | 185,429 | ||||||||||||||
1,030,000 | Washington State Housing Finance Commission, Revenue Bonds | 12/01/22 | 2.600 | 1,049,374 | ||||||||||||||
185,000 | Washington State Housing Finance Commission, Revenue Bonds, FHLMC, FNMA, GNMA | 12/01/22 | 3.050 | 192,844 | ||||||||||||||
Total Washington | 2,637,517 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 13 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Wisconsin (0.4%) | ||||||||||||||||||
$ 280,000 | County of Milwaukee Airport Revenue, Revenue Bonds | 12/01/28 | 5.250 | % | $ | 331,346 | ||||||||||||
Total Wisconsin | 331,346 | |||||||||||||||||
Total Municipal Bonds (Identified cost $84,973,198) | 87,796,224 |
TOTAL INVESTMENTS (Identified cost $84,973,198)5 | 97.8 | % | $ | 87,796,224 | ||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.2 | % | 1,993,091 | |||||
NET ASSETS | 100.0 | % | $ | 89,789,315 |
1 | Variable rate instrument. Interest rates change on specific dates (such as coupon or interest payment date). The yield shown represents the April 30, 2016 coupon or interest rate. |
2 | Security issued with zero coupon. Income is recognized through accretion of discount. |
3 | The Fund’s Investment Adviser has deemed this security to be illiquid based upon the SEC definition of an illiquid security. |
4 | Variable rate demand note. The maturity date reflects the demand repayment dates. The interest rate changes on specific dates (such as coupon or interest payment date). The yield shown represents the coupon or interest rate as of April 30, 2016. |
5 | The aggregate cost for federal income tax purposes is $84,973,198, the aggregate gross unrealized appreciation is $3,214,032 and the aggregate gross unrealized depreciation is $391,006, resulting in net unrealized appreciation of $2,823,026. |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical investments. |
— | Level 2 – significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 15 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2016 (unaudited)
Investments, at value | Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* | Significant Other Observable Inputs (Level 2)* | Significant Unobservable Inputs (Level 3)* | Balance as of April 30, 2016 | ||||||||||||||
Municipal Bonds** | $ | – | $ | 87,796,224 | $ | – | $ | 87,796,224 | ||||||||||
Total Investments, at value | $ | – | $ | 87,796,224 | $ | – | $ | 87,796,224 |
* | The Fund’s policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Levels 1, 2 or 3 during the period ended April 30, 2016. |
** | For geographical breakdown of municipal bond investments, refer to the Portfolio of Investments. |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2016 (unaudited)
ASSETS: | |||||||||||
Investments in securities, at value (Identified cost $84,973,198) | $ | 87,796,224 | |||||||||
Cash | 191,287 | ||||||||||
Receivables for: | |||||||||||
Investments sold | 1,913,193 | ||||||||||
Interest | 652,771 | ||||||||||
Investment advisory and administrative fees waiver reimbursement | 39,635 | ||||||||||
Shares sold | 2,132 | ||||||||||
Other receivables | 7,803 | ||||||||||
Prepaid assets | 243 | ||||||||||
Total Assets | 90,603,288 | ||||||||||
LIABILITIES: | |||||||||||
Payables for: | |||||||||||
Investments purchased | 688,148 | ||||||||||
Investment advisory and administrative fees | 51,562 | ||||||||||
Professional fees | 38,862 | ||||||||||
Custody and fund accounting fees | 22,581 | ||||||||||
Shareholder servicing fees | 4,003 | ||||||||||
Board of Trustees’ fees | 2,401 | ||||||||||
Shares redeemed | 2,121 | ||||||||||
Transfer agent fees | 1,353 | ||||||||||
Distributor fees | 642 | ||||||||||
Accrued expenses and other liabilities | 2,300 | ||||||||||
Total Liabilities | 813,973 | ||||||||||
NET ASSETS | $ | 89,789,315 | |||||||||
Net Assets Consist of: | |||||||||||
Paid-in capital | $ | 86,433,049 | |||||||||
Distributions in excess of net investment income | (9 | ) | |||||||||
Accumulated net realized gain on investments in securities | 533,249 | ||||||||||
Net unrealized appreciation/(depreciation) on investments in securities | 2,823,026 | ||||||||||
Net Assets | $ | 89,789,315 | |||||||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | |||||||||||
CLASS N SHARES | |||||||||||
($24,087,984 ÷ 2,293,913 shares outstanding) | $10.50 | ||||||||||
CLASS I SHARES | |||||||||||
($65,701,331 ÷ 6,263,062 shares outstanding) | $10.49 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 17 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2016 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest and other income | $ | 1,169,667 | ||||
Total Income | 1,169,667 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 183,473 | |||||
Professional fees | 32,400 | |||||
Custody and fund accounting fees | 29,030 | |||||
Board of Trustees’ fees | 27,861 | |||||
Shareholder servicing fees | 24,779 | |||||
Registration fees | 22,498 | |||||
Transfer agent fees | 13,191 | |||||
Distributor fees | 10,084 | |||||
Miscellaneous expenses | 19,281 | |||||
Total Expenses | 362,597 | |||||
Investment advisory and administrative fees waiver | (114,119 | ) | ||||
Expense offset arrangement | (552 | ) | ||||
Net Expenses | 247,926 | |||||
Net Investment Income | 921,741 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 534,019 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 1,592,629 | |||||
Net Realized and Unrealized Gain | 2,126,648 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 3,048,389 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 921,741 | $ | 1,225,849 | ||||||
Net realized gain on investments in securities | 534,019 | 221,782 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 1,592,629 | 140,409 | ||||||||
Net increase in net assets resulting from operations | 3,048,389 | 1,588,040 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (235,816 | ) | (229,093 | ) | ||||||
Class I | (685,934 | ) | (997,005 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (54,688 | ) | (8,229 | ) | ||||||
Class I | (143,942 | ) | (403,258 | ) | ||||||
Total dividends and distributions declared | (1,120,380 | ) | (1,637,585 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 8,359,371 | 51,400,360 | * | |||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 423,107 | 286,601 | ||||||||
Proceeds from short-term redemption fees | – | 466 | ||||||||
Cost of shares redeemed | (12,770,505 | ) | (12,481,618 | )* | ||||||
Net increase (decrease) in net assets resulting from share transactions | (3,988,027 | ) | 39,205,809 | |||||||
Total increase (decrease) in net assets | (2,060,018 | ) | 39,156,264 | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 91,849,333 | 52,693,069 | ||||||||
End of period (including distributions in excess of net investment income of $(9) and undistributed net investment income of $0, respectively) | $ | 89,789,315 | $ | 91,849,333 |
* | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 19 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31,2015 | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||
Net asset value, beginning of period | $ | 10.29 | $ | 10.30 | $ | 10.00 | |||||||||
Income from investment operations: | |||||||||||||||
Net investment income1 | 0.10 | 0.15 | 0.09 | ||||||||||||
Net realized and unrealized gain | 0.23 | 0.08 | 0.29 | ||||||||||||
Total income from investment operations | 0.33 | 0.23 | 0.38 | ||||||||||||
Less dividends and distributions: | |||||||||||||||
From net investment income | (0.10 | ) | (0.16 | ) | (0.08 | ) | |||||||||
From net realized gains | (0.02 | ) | (0.08 | ) | – | ||||||||||
Total dividends and distributions | (0.12 | ) | (0.24 | ) | (0.08 | ) | |||||||||
Short-term redemption fees1 | – | 0.00 | 2 | – | |||||||||||
Net asset value, end of period | $ | 10.50 | $ | 10.29 | $ | 10.30 | |||||||||
Total return | 3.24 | %3 | 2.29 | % | 3.82 | %3 | |||||||||
Ratios/Supplemental data: | |||||||||||||||
Net assets, end of period (in millions) | $24 | $26 | $1 | ||||||||||||
Ratio of expenses to average net assets before reductions | 1.04 | %4 | 1.10 | % | 8.78 | %5 | |||||||||
Fee waiver | 0.39 | %4,6 | 0.45 | %6 | 8.13 | %5,6 | |||||||||
Expense offset arrangement | 0.00 | %4,7 | 0.00 | %7 | 0.00 | %5,7 | |||||||||
Ratio of expenses to average net assets after reductions | 0.65 | %4 | 0.65 | % | 0.65 | %5 | |||||||||
Ratio of net investment income to average net assets | 1.90 | %4 | 1.43 | % | 1.43 | %5 | |||||||||
Portfolio turnover rate | 32 | %3 | 142 | % | 91 | % | |||||||||
Portfolio turnover rate8 | 19 | %3 | 83 | % | 56 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | Annualized with the exception of audit fees and registration fees. |
6 | The ratio of expenses to average net assets for the six months ended ended April 30, 2016, the fiscal year ended October 31, 2015 and the period ended October 31, 2014, reflect fees reduced as result of a contractual operating expense limitation of the share class to 0.65%. The agreement is effective for the period beginning on April 1, 2014 and will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2016, the fiscal year ended October 31, 2015 and the period from April 1, 2014 to October 31, 2014 the waived fees were $47,806, $71,871 and $47,942, respectively. |
7 | Less than 0.01%. |
8 | The portfolio turnover rate excludes variable rate demand notes. |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||
Net asset value, beginning of period | $ | 10.28 | $ | 10.30 | $ | 10.00 | |||||||||
Income from investment operations: | |||||||||||||||
Net investment income1 | 0.11 | 0.18 | 0.09 | ||||||||||||
Net realized and unrealized gain | 0.23 | 0.06 | 0.30 | ||||||||||||
Total income from investment operations | 0.34 | 0.24 | 0.39 | ||||||||||||
Less dividends and distributions: | |||||||||||||||
From net investment income | (0.11 | ) | (0.18 | ) | (0.09 | ) | |||||||||
From net realized gains | (0.02 | ) | (0.08 | ) | – | ||||||||||
Total dividends and distributions | (0.13 | ) | (0.26 | ) | (0.09 | ) | |||||||||
Short-term redemption fees1 | – | 0.00 | 2 | – | |||||||||||
Net asset value, end of period | $ | 10.49 | $ | 10.28 | $ | 10.30 | |||||||||
Total return | 3.31 | %3 | 2.33 | % | 3.89 | %3 | |||||||||
Ratios/Supplemental data: | |||||||||||||||
Net assets, end of period (in millions) | $66 | $66 | $52 | ||||||||||||
Ratio of expenses to average net assets before reductions | 0.70 | %4 | 0.78 | % | 0.88 | %5 | |||||||||
Fee waiver | 0.20 | %4,6 | 0.28 | %6 | 0.38 | %5,6 | |||||||||
Expense offset arrangement | 0.00 | %4,7 | 0.00 | %7 | 0.00 | %5,7 | |||||||||
Ratio of expenses to average net assets after reductions | 0.50 | %4 | 0.50 | % | 0.50 | %5 | |||||||||
Ratio of net investment income to average net assets | 2.05 | %4 | 1.72 | % | 1.49 | %5 | |||||||||
Portfolio turnover rate | 32 | %3 | 142 | % | 91 | % | |||||||||
Portfolio turnover rate8 | 19 | %3 | 83 | % | 56 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | Annualized with the exception of audit fees and registration fees. |
6 | The ratio of expenses to average net assets for the six months ended ended April 30, 2016, the fiscal year ended October 31, 2015 and the period ended October 31, 2014, reflect fees reduced as result of a contractual operating expense limitation of the share class to 0.50%. The agreement is effective for the period beginning on April 1, 2014 and will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2016, the fiscal year ended October 31, 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $66,313, $163,323 and $137,383, respectively. |
7 | Less than 0.01%. |
8 | The portfolio turnover rate excludes variable rate demand notes. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2016 | 21 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2016 (unaudited)
1. | Organization. The Fund is a separate, diversified series of BBH Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on April 1, 2014. The Fund offers Class N shares and Class I shares. Class N and Class I shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Class I shares automatically convert to any other share class of the Fund. As of April 30, 2016, there were six series of the Trust. |
2. | Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. | Valuation of Investments. Prices of municipal bonds are provided by an external pricing service approved by the Fund’s Board of Trustees (“Board”). These securities are generally classified as Level 2. The evaluated vendor pricing is based on methods that may include consideration of the following: yields or prices of municipal securities of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. |
Securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. Short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent “fair value” by the Board. |
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Interest income is accrued daily and consists of interest accrued, discount earned (including, if any, both original issue and market discount) and premium amortization on the investments of the Fund. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of the interest has become doubtful based on consistently applied |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. | Federal Income Taxes. It is the Trust’s policy to comply with the requirements of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required. The Fund files a tax return annually using tax accounting methods required under provisions of the Code, which may differ from GAAP, which is the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported in these financial statements may differ from that reported on the Fund’s tax return, due to certain book-to-tax timing differences such as losses deferred due to “wash sale” transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV. |
The Fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (“ASC 740”). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The Fund did not have any unrecognized tax benefits as of October 31, 2015, nor were there any increases or decreases in unrecognized tax benefits for the year then ended. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statement of Operations. During the six months ended April 30, 2016, the Fund did not incur any such interest or penalties. The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for all open tax years. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. |
E. | Dividends and Distributions to Shareholders. Dividends and distributions from net investment income to shareholders, if any, are paid monthly and are recorded on the ex-dividend date. Distributions from net capital gains, if any, are generally declared and paid annually and are recorded |
financial statements april 30, 2016 | 23 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
on the ex-dividend date. The Fund declared dividends in the amount of $290,504 and $829,876 to Class N and Class I shareholders, respectively, during the six month ended April 30, 2016. |
The tax character of distributions paid during the year ended October 31, 2015 and the period ended October 31, 2014, respectively, were as follows: |
Distributions paid from: | |||||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax exempt income | Tax return of capital | Total distributions paid | ||||||||||||||||||||||
2015: | $ | 609,512 | – | $ | 609,512 | $ | 1,028,073 | – | $ | 1,637,585 | |||||||||||||||||
2014: | 53,584 | – | 53,584 | 395,815 | – | 449,399 |
As of October 31, 2015 and 2014, respectively, the components of accumulated earnings/(deficit) on a tax basis were as follows: |
Components of accumulated earnings/(deficit): | |||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Accumulated earnings | Accumulated capital and other losses | Other book/tax temporary differences | Unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | |||||||||||||||||||||||||
2015: | $ | 74,098 | $ | 123,762 | $ | 197,860 | – | – | $ | 1,230,397 | $ | 1,428,257 | |||||||||||||||||||
2014: | 411,073 | – | 411,073 | – | – | 1,089,988 | 1,501,061 |
The Fund did not have a net capital loss carryforward at October 31, 2015. |
Total distributions paid may differ from amounts reported in the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid. |
To the extent future capital gains are offset by capital loss carryforwards, if any; such gains will not be distributed. |
F. | Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. | Fees and Other Transactions with Affiliates. |
A. | Investment Advisory and Administrative Fees. Effective April 1, 2014 (commencement of operations), under a combined Investment Advisory and Administrative Services Agreement |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
(“Agreement”) with the Trust, Brown Brothers Harriman & Co. (“BBH”) through a separately identifiable department (“SID” or “Investment Adviser”) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund’s investment advisory and administrative services fee is calculated daily and paid monthly at an annual rate equivalent to 0.40% of the Fund’s average daily net assets. For the six months ended April 30, 2016, the Fund incurred $183,473 under the Agreement.
B. | Investment Advisory and Administrative Fee Waivers. Effective April 1, 2014 (commencement of operations), the Investment Adviser contractually agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) of Class N and Class I to 0.65% and 0.50%, respectively. The agreement will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. The agreement may only be terminated during its term with approval of the Fund’s Board of Trustees. For the six months ended April 30, 2016, the Investment Adviser waived fees in the amount of $47,806 and $66,313 for Class N and Class I, respectively. |
C. | Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% (0.15% prior to November 1, 2015) of Class N shares’ average daily net assets. For the six months ended April 30, 2016, Class N shares of the Fund incurred $24,779 in shareholder servicing fees. |
D. | Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Fund’s cash and investments and calculates the Fund’s daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Fund’s net asset value. For the six months ended April 30, 2016, the Fund incurred $29,030 in custody and fund accounting fees. These fees for the Fund were reduced by $552 as a result of an expense offset arrangement with the Fund’s custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. In the event that the Fund is overdrawn, under the custody agreement with BBH, BBH will make overnight loans to the Fund to cover overdrafts. Pursuant to their agreement, the Fund will pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2016, was $44. |
financial statements april 30, 2016 | 25 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
E. | Board of Trustees’ Fees. Each Trustee who is not an “interested person” as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the six months ended April 30, 2016, the Fund incurred $27,861 in independent Trustee compensation and reimbursements. |
F. | Affiliated Ownership. As of April 30, 2016, BBH is the owner of record of 58% of the total outstanding shares of the Fund. |
4. | Investment Transactions. For the six months ended April 30, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, was $28,951,491 and $29,961,326, respectively. |
5. | Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N shares and Class I shares of beneficial interest, at no par value. Transactions in Class N and Class I shares were as follows: |
For the six months ended April 30, 2016 (unaudited) | For the year ended October 31, 2015 | |||||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||||
Class N | ||||||||||||||||||
Shares sold | 215,894 | $ | 2,248,504 | 3,260,428 | $ | 33,497,063 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 22,426 | 232,863 | 16,643 | 169,984 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | – | N/A | 133 | ||||||||||||||
Shares redeemed | (466,603 | ) | (4,858,160 | ) | (857,223 | ) | (8,734,880 | ) | ||||||||||
Net increase (decrease) | (228,283 | ) | $ | (2,376,793 | ) | 2,419,848 | $ | 24,932,300 | ||||||||||
Class I | ||||||||||||||||||
Shares sold | 586,153 | $ | 6,110,867 | 1,755,417 | $ | 17,903,297 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 18,325 | 190,244 | 11,443 | 116,617 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | – | N/A | 333 | ||||||||||||||
Shares redeemed | (755,379 | ) | (7,912,345 | ) | (368,524 | ) | (3,746,738 | ) | ||||||||||
Net increase (decrease) | (150,901 | ) | $ | (1,611,234 | ) | 1,398,336 | $ | 14,273,509 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
Included in Shares Sold and Shares Redeemed are shareholder exchanges during the year ended October 31, 2015. Specifically: |
During the fiscal year 2015, 391,812 shares of N were exchanged for 392,198 shares of Class I valued at $3,984,732 and 196,099 shares of Class I were exchanged for 195,906 shares of Class N valued at $1,992,367. |
6. | Principal Risk Factors and Indemnifications. |
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including but not limited to, those described below: |
financial statements april 30, 2016 | 27 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2016 (unaudited)
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 29 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2016 (unaudited)
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||
Class N | ||||||
Actual | $1,000 | $1,032 | $3.28 | |||
Hypothetical2 | $1,000 | $1,022 | $3.27 |
Beginning Account Value November 1, 2015 | Ending Account Value April 30, 2016 | Expenses Paid During Period November 1, 2015 to April 30, 20161 | ||||
Class I | ||||||
Actual | $1,000 | $1,033 | $2.53 | |||
Hypothetical2 | $1,000 | $1,022 | $2.51 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.65% and 0.50% for Class N and I shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
2 | Assumes a return of 5% before expenses. For the purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 31 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
the Agreement also contemplates the provision of administrative services by BBH to the Fund within the same fee structure. The Board received and considered information, during the December meeting and over the course of the previous year, regarding the nature, extent and quality of services provided to the Fund by BBH as both the Investment Adviser and administrator including: portfolio management, supervision of operations and compliance, preparation of regulatory filings, disclosures to Fund shareholders, general oversight of service providers, assistance to the Board (including the Independent Trustees in their capacity as Trustees), Chief Compliance Officer services for the Trust, and other services. The Board considered the resources of the Investment Adviser and BBH dedicated to the Fund noting that pursuant to separate agreements BBH also provides custody, shareholder servicing, and fund accounting services to the Fund.
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2016 (unaudited)
Fund by affiliated and nonaffiliated service providers. In the Lipper Report, the Board received and considered information comparing the Fund’s combined investment advisory and administration fee and the Fund’s net total expenses with those of other comparable mutual funds, such peer group and comparisons having been selected and calculated by Lipper, noting that the Fund was very well placed, as compared to its selected peer-set. The Board recognized that it is difficult to make comparisons of the fee rate, or of combined advisory and administration fees, because there are variations in the services that are included in the fees paid by other funds. The Board concluded that the advisory and administration fee appeared to be both reasonable in light of the services rendered and the result of arm’s length negotiations.
financial statements april 30, 2016 | 33 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST
April 30, 2016 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
financial statements april 30, 2016 | 35 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2016 (unaudited)
BBH has structured the portfolio managers’ compensation in a manner it believes is reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 (800) 575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||
By E-mail send your request to: | bbhfunds@bbh.com | |||
On the internet: | www.bbhfunds.com |
Item 2. Code of Ethics.
Not required for this semi-annual report on Form N-CSR.
|
Item 3. Audit Committee Financial Expert.
Not required for this semi-annual report on Form N-CSR.
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Item 4. Principal Accountant Fees and Services.
Not required for this semi-annual report on Form N-CSR.
|
Item 5. Audit Committee of Listed Registrants.
(a) | Not required for this semi-annual report on Form N-CSR.
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(b) | Not required. |
Item 6. Investments.
(a) | This schedule is included as part of the report to shareholders filed under Item 1 of this Form N-CSR.
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(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable. |
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable. |
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable. |
Item 11. Controls and Procedures.
(a) | The Registrant’s principal executive and financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this Form N-CSR, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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(b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Registrant's second fiscal quarter of the period covered by this Form N-CSR, that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Not required for this semi-annual report on Form N-CSR.
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(a)(2) | Certifications required by Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibit 12(a)(2) to this Form N-CSR.
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(a)(3) | Not applicable. |
(b) | Certifications required by Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are furnished as Exhibit 12(b) to this Form N-CSR. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BBH Trust
By: (Signature and Title)
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin
Title: President (Principal Executive Officer)
Date: July 8, 2016
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: (Signature and Title)
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin
Title: President (Principal Executive Officer)
Date: July 8, 2016
By: (Signature and Title)
/s/ Charles H. Schreiber
Charles H. Schreiber
Title: Treasurer (Principal Financial Officer)
Date: July 8, 2016