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 Partner Fund - International Equity
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, 2017
Item 1. Report to Stockholders.
BBH CORE SELECT
PORTFOLIO ALLOCATION
April 30, 2017 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stocks: | ||||||||||
Basic Materials | $ | 149,948,293 | 5.0 | % | ||||||
Communications | 555,735,115 | 18.6 | ||||||||
Consumer Cyclical | 147,045,848 | 4.9 | ||||||||
Consumer Non-Cyclical | 944,395,064 | 31.7 | ||||||||
Financials | 533,873,377 | 17.9 | ||||||||
Industrials | 46,085,824 | 1.6 | ||||||||
Technology | 381,095,426 | 12.8 | ||||||||
Repurchase Agreements | 89,000,000 | 3.0 | ||||||||
U.S. Treasury Bills | 74,898,225 | 2.5 | ||||||||
Cash and Other Assets in Excess of Liabilities | 60,717,643 | 2.0 | ||||||||
NET ASSETS | $ | 2,982,794,815 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2017 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (92.5%) | ||||||||||
BASIC MATERIALS (5.0%) | ||||||||||
838,093 | Celanese Corp. (Series A) | $ | 72,947,615 | |||||||
616,104 | Praxair, Inc. | 77,000,678 | ||||||||
Total Basic Materials | 149,948,293 | |||||||||
COMMUNICATIONS (18.6%) | ||||||||||
193,078 | Alphabet, Inc. (Class C)1 | 174,920,945 | ||||||||
4,970,551 | Comcast Corp. (Class A) | 194,795,894 | ||||||||
3,861,263 | Discovery Communications, Inc. (Class C)1 | 108,038,139 | ||||||||
2,253,110 | Liberty Global, Plc. (Class C) (United Kingdom)1 | 77,980,137 | ||||||||
Total Communications | 555,735,115 | |||||||||
CONSUMER CYCLICAL (4.9%) | ||||||||||
732,383 | Bed, Bath & Beyond, Inc. | 28,379,841 | ||||||||
3,119,275 | Liberty Interactive Corp. QVC Group (Class A)1 | 66,066,245 | ||||||||
699,651 | Wal-Mart Stores, Inc. | 52,599,762 | ||||||||
Total Consumer Cyclical | 147,045,848 | |||||||||
CONSUMER NON-CYCLICAL (31.7%) | ||||||||||
411,116 | Dentsply Sirona, Inc. | 25,998,976 | ||||||||
830,631 | Diageo, Plc. ADR (United Kingdom) | 97,540,998 | ||||||||
527,174 | FleetCor Technologies, Inc.1 | 74,405,338 | ||||||||
268,725 | Henry Schein, Inc.1 | 46,704,405 | ||||||||
1,159,447 | Nestle SA ADR (Switzerland) | 89,276,260 | ||||||||
1,830,010 | Nielsen Holdings, Plc. (United Kingdom) | 75,268,311 | ||||||||
1,803,662 | Novartis AG ADR (Switzerland) | 138,936,084 | ||||||||
2,776,594 | PayPal Holdings, Inc.1 | 132,499,066 | ||||||||
976,279 | Perrigo Co., Plc. (Ireland) | 72,186,069 | ||||||||
236,536 | Sabre Corp. | 5,537,308 | ||||||||
1,314,408 | Unilever NV (NY Shares) (Netherlands) | 68,664,674 | ||||||||
2,091,919 | Zoetis, Inc. | 117,377,575 | ||||||||
Total Consumer Non-Cyclical | 944,395,064 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 3 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2017 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
FINANCIALS (17.9%) | ||||||||||
825 | Berkshire Hathaway, Inc. (Class A)1 | $ | 204,418,500 | |||||||
760,135 | Progressive Corp. | 30,192,562 | ||||||||
3,128,105 | US Bancorp | 160,409,224 | ||||||||
2,578,995 | Wells Fargo & Co. | 138,853,091 | ||||||||
Total Financials | 533,873,377 | |||||||||
INDUSTRIALS (1.6%) | ||||||||||
633,221 | Waste Management, Inc. | 46,085,824 | ||||||||
Total Industrials | 46,085,824 | |||||||||
TECHNOLOGY (12.8%) | ||||||||||
1,237,383 | Microsoft Corp. | 84,711,240 | ||||||||
4,751,060 | Oracle Corp. | 213,607,658 | ||||||||
1,540,315 | QUALCOMM, Inc. | 82,776,528 | ||||||||
Total Technology | 381,095,426 | |||||||||
Total Common Stocks (Identified cost $1,765,303,221) | 2,758,178,947 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
REPURCHASE AGREEMENTS (3.0%) | ||||||||||||||||||
$89,000,000 | National Australia Bank (Agreement dated 4/28/2017 collateralized by U.S. Treasury Notes 1.625%, due 05/15/26, original par $95,445,000, valued at $90,780,000) | 05/01/17 | 0.800 | % | $ | 89,000,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $89,000,000) | 89,000,000 | |||||||||||||||||
U.S. TREASURY BILLS (2.5%) | ||||||||||||||||||
75,000,000 | U.S. Treasury Bills2 | 07/06/17 | 0.000 | 74,898,225 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $74,892,750) | 74,898,225 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $1,929,195,971)3 | 98.0 | % | $ | 2,922,077,172 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.0 | % | 60,717,643 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 2,982,794,815 |
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 $1,929,195,971, the aggregate gross unrealized appreciation is $1,033,794,007 and the aggregate gross unrealized depreciation is $40,912,806 resulting in net unrealized appreciation of $992,881,201. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 5 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities. |
— | Level 2 – significant other observable inputs (including quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities). |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (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, 2017 | ||||||||||||||
Common Stocks: | ||||||||||||||||||
Basic Materials | $ | 149,948,293 | $ | – | $ | – | $ | 149,948,293 | ||||||||||
Communications | 555,735,115 | – | – | 555,735,115 | ||||||||||||||
Consumer Cyclical | 147,045,848 | – | – | 147,045,848 | ||||||||||||||
Consumer Non-Cyclical | 944,395,064 | – | – | 944,395,064 | ||||||||||||||
Financials | 533,873,377 | – | – | 533,873,377 | ||||||||||||||
Industrials | 46,085,824 | – | – | 46,085,824 | ||||||||||||||
Technology | 381,095,426 | – | – | 381,095,426 | ||||||||||||||
Repurchase Agreements | – | 89,000,000 | – | 89,000,000 | ||||||||||||||
U.S. Treasury Bills | – | 74,898,225 | – | 74,898,225 | ||||||||||||||
Investments, at value | $ | 2,758,178,947 | $ | 163,898,225 | $ | – | $ | 2,922,077,172 |
* | 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, 2017. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 7 |
BBH CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2017 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $1,840,195,971) | $ | 2,833,077,172 | ||||
Repurchase agreements (Identified cost $89,000,000) | 89,000,000 | |||||
Cash | 2,140,134 | |||||
Receivables for: | ||||||
Investments sold | 128,570,324 | |||||
Dividends | 9,051,166 | |||||
Shares sold | 655,671 | |||||
Investment advisory and administrative fee waiver reimbursement | 76,717 | |||||
Interest | 5,933 | |||||
Total Assets | 3,062,577,117 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Shares redeemed | 70,615,730 | |||||
Investments purchased | 6,428,886 | |||||
Investment advisory and administrative fees | 1,903,621 | |||||
Shareholder servicing fees | 476,947 | |||||
Custody and fund accounting fees | 75,586 | |||||
Professional fees | 45,439 | |||||
Distributors fees | 38,810 | |||||
Transfer agent fees | 22,888 | |||||
Board of Trustees’ fees | 1,245 | |||||
Accrued expenses and other liabilities | 173,150 | |||||
Total Liabilities | 79,782,302 | |||||
NET ASSETS | $ | 2,982,794,815 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 1,610,829,242 | ||||
Undistributed net investment income | 9,795,104 | |||||
Accumulated net realized gain on investments in securities | 369,289,268 | |||||
Net unrealized appreciation/(depreciation) on investments in securities | 992,881,201 | |||||
Net Assets | $ | 2,982,794,815 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($2,812,579,881 ÷ 129,379,587 shares outstanding) | $21.74 | |||||
RETAIL CLASS SHARES | ||||||
($170,214,934 ÷ 13,412,469 shares outstanding) | $12.69 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2017 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $1,363,489) | $ | 27,539,510 | ||||
Interest and other income | 511,868 | |||||
Total Income | 28,051,378 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 13,312,418 | |||||
Shareholder servicing fees | 3,351,622 | |||||
Distributors fees | 245,859 | |||||
Transfer agent fees | 119,328 | |||||
Custody and fund accounting fees | 115,538 | |||||
Professional fees | 44,409 | |||||
Board of Trustees’ fees | 27,208 | |||||
Miscellaneous expenses | 241,283 | |||||
Total Expenses | 17,457,665 | |||||
Investment advisory and administrative fee waiver | (478,092 | ) | ||||
Expense offset arrangement | (4,962 | ) | ||||
Net Expenses | 16,974,611 | |||||
Net Investment Income | 11,076,767 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 370,155,963 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (12,385,132 | ) | ||||
Net Realized and Unrealized Gain | 357,770,831 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 368,847,598 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 9 |
BBH CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||
DECREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 11,076,767 | $ | 23,194,771 | ||||||
Net realized gain on investments in securities | 370,155,963 | 344,540,579 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (12,385,132 | ) | (380,299,794 | ) | ||||||
Net increase/(decrease) in net assets resulting from operations | 368,847,598 | (12,564,444 | ) | |||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (20,614,105 | ) | (24,454,690 | ) | ||||||
Retail Class | (1,323,018 | ) | (1,357,111 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (242,554,177 | ) | (314,097,487 | ) | ||||||
Retail Class | (20,839,178 | ) | (29,099,366 | ) | ||||||
Total dividends and distributions declared | (285,330,478 | ) | (369,008,654 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 144,575,344 | 347,243,754 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 204,685,715 | 312,156,128 | ||||||||
Proceeds from short-term redemption fees | 7,506 | 21,134 | ||||||||
Cost of shares redeemed* | (1,030,894,808 | ) | (1,947,081,352 | ) | ||||||
Net decrease in net assets resulting from share transactions | (681,626,243 | ) | (1,287,660,336 | ) | ||||||
Total decrease in net assets | (598,109,123 | ) | (1,669,233,434 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 3,580,903,938 | 5,250,137,372 | ||||||||
End of period (including undistributed net investment income of $9,795,104 and $20,655,460, respectively) | $ | 2,982,794,815 | $ | 3,580,903,938 |
* | 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 years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2017 (unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 21.15 | $ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | $ | 15.07 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.07 | 0.12 | 0.12 | 0.14 | 0.13 | 0.10 | |||||||||||||||||||||
Net realized and unrealized gain/(loss) | 2.23 | (0.08 | ) | 0.64 | 1.70 | 3.95 | 2.54 | ||||||||||||||||||||
Total income from investment operations | 2.30 | 0.04 | 0.76 | 1.84 | 4.08 | 2.64 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.13 | ) | (0.12 | ) | (0.14 | ) | (0.10 | ) | (0.10 | ) | (0.07 | ) | |||||||||||||||
From net realized gains | (1.58 | ) | (1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | (0.18 | ) | |||||||||||||||
Total dividends and distributions | (1.71 | ) | (1.68 | ) | (0.49 | ) | (0.53 | ) | (0.33 | ) | (0.25 | ) | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
Net asset value, end of period | $ | 21.74 | $ | 21.15 | $ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | |||||||||||||||
Total return | 11.32 | %3 | 0.40 | % | 3.47 | % | 8.90 | % | 23.78 | % | 17.86 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 2,813 | $ | 3,403 | $ | 4,970 | $ | 5,816 | $ | 5,645 | $ | 3,049 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.02 | %4 | 1.01 | % | 1.07 | % | 1.07 | % | 1.09 | % | 1.12 | % | |||||||||||||||
Fee waiver | 0.02 | %4,5 | 0.01 | %5 | 0.07 | %5 | 0.07 | %5 | 0.09 | %5 | 0.12 | %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 | 1.00 | %4 | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.67 | %4 | 0.57 | % | 0.53 | % | 0.66 | % | 0.65 | % | 0.63 | % | |||||||||||||||
Portfolio turnover rate | 9 | %3 | 12 | % | 8 | % | 8 | % | 12 | % | 14 | % |
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, 2017, the years ended October 31, 2016, 2015, 2014, 2013 and 2012, reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.00%. The agreement is effective for all periods presented and is effective through March 1, 2018 unless renewed by all parties to the agreement. For the six months ended April 30, 2017 and the years ended October 31, 2016, 2015, 2014, 2013 and 2012, the waived fees were $373,011, $531,298, $3,938,986, $4,238,260, $3,983,262 and $1,853,202, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 11 |
BBH CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2017 (unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.00 | $ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | $ | 10.11 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.03 | 0.05 | 0.03 | 0.06 | 0.06 | 0.05 | |||||||||||||||||||||
Net realized and unrealized gain/(loss) | 1.34 | (0.07 | ) | 0.42 | 1.11 | 2.60 | 1.69 | ||||||||||||||||||||
Total income/ (loss) from investment operations | 1.37 | (0.02 | ) | 0.45 | 1.17 | 2.66 | 1.74 | ||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.07 | ) | (0.11 | ) | (0.07 | ) | (0.05 | ) | (0.06 | ) | |||||||||||||||
From net realized gains | (1.58 | ) | (1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | (0.18 | ) | |||||||||||||||
Total dividends and distributions | (1.68 | ) | (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 | $ | 12.69 | $ | 13.00 | $ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | |||||||||||||||
Total return | 11.21 | %3 | 0.19 | % | 3.14 | % | 8.63 | % | 23.42 | % | 17.64 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 170 | $ | 178 | $ | 280 | $ | 400 | $ | 367 | $ | 267 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.37 | %4 | 1.33 | % | 1.39 | % | 1.40 | % | 1.42 | % | 1.43 | % | |||||||||||||||
Fee waiver | 0.12 | %4,5 | 0.10 | %5 | 0.14 | %5 | 0.15 | %5 | 0.17 | %5 | 0.18 | %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 | 1.25 | %4 | 1.23 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.43 | %4 | 0.37 | % | 0.24 | % | 0.40 | % | 0.44 | % | 0.50 | % | |||||||||||||||
Portfolio turnover rate | 9 | %3 | 12 | % | 8 | % | 8 | % | 12 | % | 14 | % |
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, 2017, the years ended October 31, 2016, 2015, 2014, 2013 and 2012, reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.25%. The agreement is effective for all periods presented and is effective through March 1, 2018 unless renewed by all parties to the agreement. For the six months ended April 30, 2017 and the years ended October 31, 2016, 2015, 2014, 2013 and 2012, the waived fees were $105,081, $234,959, $551,384, $577,948, $568,410 and $633,118, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
April 30, 2017 (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. 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, 2017, 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 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. |
financial statements april 30, 2017 | 13 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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 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 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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, 2016, 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, 2017, 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 year ends. 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 $263,168,282 and $22,162,196 to Class N shares and Retail Class shareholders, respectively, during the six months ended April 30, 2017. 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, 2017 | 15 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
Distributions paid from: | |||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | |||||||||||||||||||
2016: | $ | 25,811,801 | $ | 343,196,853 | $ | 369,008,654 | $ | – | $ | 369,008,654 | |||||||||||||
2015: | 57,953,050 | 80,225,626 | 138,178,676 | – | 138,178,676 |
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) | ||||||||||||||||||||||||
2016: | $ | 20,655,460 | $ | 263,377,781 | $ | 284,033,241 | $ | – | $ | (851,121 | ) | $ | 1,005,266,333 | $ | 1,288,448,453 | |||||||||||||||
2015: | 23,272,490 | 343,185,744 | 366,458,234 | – | (411,242 | ) | 1,385,566,127 | 1,751,613,119 |
G. | Use of Estimates. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
the financial statements and the reported amounts of increase and decrease in net assets from operations 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. For the six months ended April 30, 2017, the Fund incurred $13,312,418 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, 2018, 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, 2017, the Investment Adviser waived fees in the amount of $373,011 and $105,081 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% of Class N and Retail Class shares’ average daily net assets. For the six months ended April 30, 2017, the Fund incurred shareholder servicing fees in the amount of $3,178,095 and $173,527 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 along with the investment advisory and waiver agreements above, it is anticipated that |
financial statements april 30, 2017 | 17 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
total operating expenses for Retail Class shares will be 1.25% of the average daily net assets. For the six months ended April 30, 2017, Retail Class shares of the Fund incurred $216,501 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, 2017, the Fund incurred $115,538 in custody and fund accounting fees. These fees for the Fund were reduced by $4,962 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, 2017, was $2,007. This amount is presented under line item “Custody and fund accounting fees” in the Statements of Operations. |
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, 2017, the Fund incurred $27,208 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2017, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $285,453,030 and $1,210,593,961, respectively. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||||
Class N | ||||||||||||||||||
Shares sold | 6,391,100 | $ | 135,321,967 | 15,774,935 | $ | 325,665,400 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 8,861,662 | 182,638,861 | 13,754,570 | 281,831,140 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | 6,946 | N/A | 18,776 | ||||||||||||||
Shares redeemed | (46,806,746 | ) | (995,466,985 | ) | (86,710,828 | ) | (1,824,200,480 | ) | ||||||||||
Net decrease | (31,553,984 | ) | $ | (677,499,211 | ) | (57,181,323 | ) | $ | (1,216,685,164 | ) | ||||||||
Retail Class | ||||||||||||||||||
Shares sold | 738,223 | $ | 9,253,377 | 1,664,283 | $ | 21,578,354 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 1,831,134 | 22,046,854 | 2,402,931 | 30,324,988 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | 560 | N/A | 2,358 | ||||||||||||||
Shares redeemed | (2,832,646 | ) | (35,427,823 | ) | (9,517,253 | ) | (122,880,872 | ) | ||||||||||
Net decrease | (263,289 | ) | $ | (4,127,032 | ) | (5,450,039 | ) | $ | (70,975,172 | ) |
financial statements april 30, 2017 | 19 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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: |
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. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
7. | Recent Pronouncements. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended existing rules (together, “final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the financial statements and related disclosures. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2017 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, 2017 | 21 |
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES
April 30, 2017 (unaudited)
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2017 (unaudited)
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,113 | $ | 5.24 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,020 | $ | 5.01 |
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 1,112 | $ | 6.55 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.26 |
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 181/365 (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. |
financial statements april 30, 2017 | 23 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION
April 30, 2017 (unaudited)
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
Agreement, and individual Trustees may have given different weight to various factors. The Board reviewed these factors with Fund Counsel. The Board concluded that the fees paid by the Fund to the Investment Adviser were reasonable.
financial statements april 30, 2017 | 25 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
performance of the Fund, the Board considered the risk expectations for the Fund as well as the level of Fund performance in the context of its review. Based on this information, the Board concluded that it was satisfied with the Fund’s investment results.
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
fund accounting and shareholder servicing agent. In light of the costs of providing services pursuant to the Agreement as well as the Investment Adviser and BBH’s commitment to the Fund, the ancillary benefits that the Investment Adviser and BBH received were considered reasonable.
financial statements april 30, 2017 | 27 |
BBH CORE SELECT
CONFLICTS OF INTEREST
April 30, 2017 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 29 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
agree to higher fees than it would in the case of unaffiliated providers. BBH acting in its capacity as the Fund’s administrator is the primary valuation agent of the Fund. BBH values securities and assets in the Fund according to the Fund’s valuation policies. Because the Investment Adviser and BBH’s advisory and administrative fees are calculated by reference to a Fund’s net assets, BBH and its affiliates may have an incentive to seek to overvalue certain assets.
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
provided to the Fund and to such other BBH client accounts. To the extent that BBH uses soft dollars, it will not have to pay for those products and services itself.
financial statements april 30, 2017 | 31 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
behalf of its discretionary investment advisory clients could significantly reduce the asset size of the Fund, which might have an adverse effect on the Fund’s investment flexibility, portfolio diversification and expense ratio.
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 1-800-575-1265 | 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, 2017 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stocks: | ||||||||||
Canada | $ | 1,543,216 | 1.3 | % | ||||||
France | 12,261,492 | 10.2 | ||||||||
Germany | 3,835,063 | 3.2 | ||||||||
Ireland | 2,688,015 | 2.2 | ||||||||
Italy | 3,636,389 | 3.0 | ||||||||
Netherlands | 4,775,671 | 4.0 | ||||||||
Switzerland | 9,093,814 | 7.6 | ||||||||
United Kingdom | 19,221,669 | 16.0 | ||||||||
United States | 55,557,507 | 46.2 | ||||||||
Repurchase Agreements | 4,500,000 | 3.7 | ||||||||
Cash and Other Assets in Excess of Liabilities | 3,129,370 | 2.6 | ||||||||
NET ASSETS | $ | 120,242,206 | 100.0 | % |
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stocks: | ||||||||||
Basic Materials | $ | 10,764,381 | 9.0 | % | ||||||
Communications | 16,682,061 | 13.9 | ||||||||
Consumer Cyclical | 5,339,438 | 4.4 | ||||||||
Consumer Non-Cyclical | 51,464,365 | 42.8 | ||||||||
Diversified | 5,199,603 | 4.3 | ||||||||
Financials | 6,827,612 | 5.7 | ||||||||
Industrials | 1,463,372 | 1.2 | ||||||||
Technology | 14,872,004 | 12.4 | ||||||||
Repurchase Agreements | 4,500,000 | 3.7 | ||||||||
Cash and Other Assets in Excess of Liabilities | 3,129,370 | 2.6 | ||||||||
NET ASSETS | $ | 120,242,206 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2017 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (93.7%) | ||||||||||
CANADA (1.3%) | ||||||||||
FINANCIALS | ||||||||||
22,550 | Intact Financial Corp. | $ | 1,543,216 | |||||||
Total Canada | 1,543,216 | |||||||||
FRANCE (10.2%) | ||||||||||
COMMUNICATIONS | ||||||||||
94,170 | JCDecaux S.A. | 3,321,478 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
39,600 | Sanofi | 3,740,411 | ||||||||
DIVERSIFIED | ||||||||||
37,100 | Wendel S.A. | 5,199,603 | ||||||||
Total France | 12,261,492 | |||||||||
GERMANY (3.2%) | ||||||||||
BASIC MATERIALS | ||||||||||
32,400 | Brenntag AG | 1,920,146 | ||||||||
42,400 | Fuchs Petrolub SE | 1,914,917 | ||||||||
Total Germany | 3,835,063 | |||||||||
IRELAND (2.2%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
36,354 | Perrigo Co., Plc. | 2,688,015 | ||||||||
Total Ireland | 2,688,015 | |||||||||
ITALY (3.0%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
307,350 | Davide Campari-Milano SpA | 3,636,389 | ||||||||
Total Italy | 3,636,389 | |||||||||
NETHERLANDS (4.0%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
23,900 | Heineken Holding NV | 2,001,077 | ||||||||
52,900 | Unilever NV | 2,774,594 | ||||||||
Total Netherlands | 4,775,671 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 3 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
SWITZERLAND (7.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
48,525 | Nestle SA | $ | 3,740,314 | |||||||
69,526 | Novartis AG | 5,353,500 | ||||||||
Total Switzerland | 9,093,814 | |||||||||
UNITED KINGDOM (16.0%) | ||||||||||
COMMUNICATIONS | ||||||||||
87,249 | Liberty Global, Plc. (Series C)1 | 3,019,688 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
331,400 | Aggreko, Plc. | 3,804,436 | ||||||||
170,125 | Diageo, Plc. | 4,948,854 | ||||||||
95,425 | Nielsen Holdings, Plc. | 3,924,830 | ||||||||
22,400 | Reckitt Benckiser Group, Plc. | 2,060,489 | ||||||||
14,738,609 | ||||||||||
INDUSTRIALS | ||||||||||
460,500 | Rotork, Plc. | 1,463,372 | ||||||||
Total United Kingdom | 19,221,669 | |||||||||
UNITED STATES (46.2%) | ||||||||||
BASIC MATERIALS | ||||||||||
40,375 | Celanese Corp. (Series A) | 3,514,240 | ||||||||
27,325 | Praxair, Inc. | 3,415,078 | ||||||||
6,929,318 | ||||||||||
COMMUNICATIONS | ||||||||||
7,068 | Alphabet, Inc. (Class C)1 | 6,403,325 | ||||||||
140,728 | Discovery Communications, Inc. (Class C)1 | 3,937,570 | ||||||||
10,340,895 | ||||||||||
CONSUMER CYCLICAL | ||||||||||
27,550 | Bed, Bath & Beyond, Inc. | 1,067,562 | ||||||||
104,400 | Liberty Interactive Corp. QVC Group (Class A)1 | 2,211,192 | ||||||||
27,410 | Wal-Mart Stores, Inc. | 2,060,684 | ||||||||
5,339,438 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
UNITED STATES (continued) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
19,631 | FleetCor Technologies, Inc.1 | $ | 2,770,719 | |||||||
112,575 | PayPal Holdings, Inc.1 | 5,372,079 | ||||||||
82,849 | Zoetis, Inc. | 4,648,658 | ||||||||
12,791,456 | ||||||||||
FINANCIALS | ||||||||||
98,150 | Wells Fargo & Co. | 5,284,396 | ||||||||
TECHNOLOGY | ||||||||||
48,375 | Microsoft Corp. | 3,311,753 | ||||||||
184,225 | Oracle Corp. | 8,282,756 | ||||||||
60,988 | QUALCOMM, Inc. | 3,277,495 | ||||||||
14,872,004 | ||||||||||
Total United States | 55,557,507 | |||||||||
Total Common Stocks (Identified cost $93,075,812) | 112,612,836 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 5 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
REPURCHASE AGREEMENTS (3.7%) | ||||||||||||||||||
$4,500,000 | National Australia Bank (Agreement dated 04/28/17 collateralized by U.S. Treasury Note 1.625%, due 05/15/26, original par $4,830,000, valued at $4,590,000) | 05/01/17 | 0.800 | % | $ | 4,500,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $4,500,000) | 4,500,000 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $97,575,812)2 | 97.4 | % | $ | 117,112,836 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.6 | % | 3,129,370 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 120,242,206 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $97,575,812, the aggregate gross unrealized appreciation is $24,919,663 and the aggregate gross unrealized depreciation is $5,382,639, resulting in net unrealized appreciation of $19,537,024. |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities. |
— | Level 2 – significant other observable inputs (including quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities). |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 7 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (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, 2017 | ||||||||||||||
Common Stocks: | ||||||||||||||||||
Basic Materials | $ | 6,929,318 | $ | 3,835,063 | $ | – | $ | 10,764,381 | ||||||||||
Communications | 13,360,583 | 3,321,478 | – | 16,682,061 | ||||||||||||||
Consumer Cyclical | 5,339,438 | – | – | 5,339,438 | ||||||||||||||
Consumer Non-Cyclical | 19,404,301 | 32,060,064 | – | 51,464,365 | ||||||||||||||
Diversified | – | 5,199,603 | – | 5,199,603 | ||||||||||||||
Financials | 6,827,612 | – | – | 6,827,612 | ||||||||||||||
Industrials | – | 1,463,372 | – | 1,463,372 | ||||||||||||||
Technology | 14,872,004 | – | – | 14,872,004 | ||||||||||||||
Repurchase Agreements | – | 4,500,000 | – | 4,500,000 | ||||||||||||||
Investments, at value | $ | 66,733,256 | $ | 50,379,580 | $ | – | $ | 117,112,836 |
* | 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, 2017. |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2017 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $93,075,812) | $ | 112,612,836 | ||||
Repurchase agreements (Identified cost $4,500,000) | 4,500,000 | |||||
Cash | 3,278,914 | |||||
Foreign currency at value (Identified cost $309) | 310 | |||||
Receivables for: | ||||||
Dividends | 262,716 | |||||
Investment advisory and administrative fee waiver reimbursement | 12,522 | |||||
Shares sold | 10,000 | |||||
Interest | 300 | |||||
Prepaid assets | 10,387 | |||||
Total Assets | 120,687,985 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 284,081 | |||||
Investment advisory and administrative fees | 85,351 | |||||
Professional fees | 37,885 | |||||
Shareholder servicing fees | 17,969 | |||||
Custody and fund accounting fees | 4,414 | |||||
Distributors fees | 2,991 | |||||
Transfer agent fees | 2,314 | |||||
Board of Trustees’ fees | 1,365 | |||||
Accrued expenses and other liabilities | 9,409 | |||||
Total Liabilities | 445,779 | |||||
NET ASSETS | $ | 120,242,206 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 100,205,289 | ||||
Undistributed net investment income | 221,252 | |||||
Accumulated net realized gain on investments in securities and foreign exchange transactions | 277,419 | |||||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 19,538,246 | |||||
Net Assets | $ | 120,242,206 |
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||
CLASS N SHARES | ||
($116,420,274 ÷ 9,524,636 shares outstanding) | $12.22 | |
RETAIL CLASS SHARES | ||
($3,821,932 ÷ 314,143 shares outstanding) | $12.17 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 9 |
BBH GLOBAL CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2017 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $55,240) | $ | 963,927 | ||||
Interest and other income | 11,260 | |||||
Total Income | 975,187 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 542,146 | |||||
Shareholder servicing fees | 114,136 | |||||
Professional fees | 35,425 | |||||
Board of Trustees’ fees | 27,231 | |||||
Custody and fund accounting fees | 15,136 | |||||
Transfer agent fees | 15,064 | |||||
Distributors fees | 13,913 | |||||
Miscellaneous expenses | 39,811 | |||||
Total Expenses | 802,862 | |||||
Investment advisory and administrative fee waiver | (81,187 | ) | ||||
Expense offset arrangement | (3,800 | ) | ||||
Net Expenses | 717,875 | |||||
Net Investment Income | 257,312 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 1,060,829 | |||||
Net realized loss on foreign exchange transactions | (10,879 | ) | ||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 1,049,950 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 10,382,903 | |||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | 4,279 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 10,387,182 | |||||
Net Realized and Unrealized Gain | 11,437,132 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 11,694,444 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||
INCREASE (DECREASE) IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 257,312 | $ | 644,900 | ||||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 1,049,950 | 289,452 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 10,387,182 | (2,249,925 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 11,694,444 | (1,315,573 | ) | |||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (593,082 | ) | (634,126 | ) | ||||||
Retail Class | (10,877 | ) | (14,668 | ) | ||||||
From net realized gains: | ||||||||||
Class N | – | (675,503 | ) | |||||||
Retail Class | – | (22,680 | ) | |||||||
Total dividends and distributions declared | (603,959 | ) | (1,346,977 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 5,093,341 | 12,490,720 | * | |||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 480,926 | 1,305,720 | ||||||||
Proceeds from short-term redemption fees | – | 297 | ||||||||
Cost of shares redeemed | (8,458,675 | ) | (35,196,533 | )* | ||||||
Net decrease in net assets resulting from share transactions | (2,884,408 | ) | (21,399,796 | ) | ||||||
Total increase (decrease) in net assets | 8,206,077 | (24,062,346 | ) | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 112,036,129 | 136,098,475 | ||||||||
End of period (including undistributed net investment income of $221,252 and $567,899, respectively) | $ | 120,242,206 | $ | 112,036,129 |
* | 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, 2017 | 11 |
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, 2017 (unaudited) | For the years ended October 31, | For the period from March 28, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||||||
2016 | 2015 | 2014 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 11.11 | $ | 11.37 | $ | 11.27 | $ | 10.99 | $ | 10.00 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||
Net investment income1 | 0.03 | 0.06 | 0.06 | 0.12 | 0.03 | |||||||||||||||||
Net realized and unrealized gain (loss) | 1.14 | (0.18 | ) | 0.30 | 0.21 | 0.96 | ||||||||||||||||
Total income (loss) from investment operations | 1.17 | (0.12 | ) | 0.36 | 0.33 | 0.99 | ||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||
From net investment income | (0.06 | ) | (0.07 | ) | (0.13 | ) | (0.02 | ) | – | |||||||||||||
From net realized gains | – | (0.07 | ) | (0.13 | ) | (0.03 | ) | – | ||||||||||||||
Total dividends and distributions | (0.06 | ) | (0.14 | ) | (0.26 | ) | (0.05 | ) | – | |||||||||||||
Short-term redemption fees1 | – | 0.00 | 2 | – | 0.002 | – | ||||||||||||||||
Net asset value, end of period | $ | 12.22 | $ | 11.11 | $ | 11.37 | $ | 11.27 | $ | 10.99 | ||||||||||||
Total return | 10.59 | %3 | (1.06 | )% | 3.27 | % | 3.01 | % | 9.90 | %3 | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 116 | $ | 108 | $ | 132 | $ | 127 | $ | 88 | ||||||||||||
Ratio of expenses to average net assets before reductions | 1.36 | %4 | 1.38 | % | 1.31 | % | 1.32 | % | 1.87 | %4 | ||||||||||||
Fee waiver | 0.10 | %4,5 | 0.13 | %5 | 0.05 | %5 | 0.07 | %5 | 0.61 | %4,5 | ||||||||||||
Expense offset arrangement | 0.01 | %4 | 0.01 | % | 0.01 | %4 | 0.00 | %6 | 0.01 | %4 | ||||||||||||
Ratio of expenses to average net assets after reductions | 1.25 | %4 | 1.24 | % | 1.25 | % | 1.25 | % | 1.25 | %4 | ||||||||||||
Ratio of net investment income to average net assets | 0.46 | %4 | 0.58 | % | 0.55 | % | 1.01 | % | 0.50 | %4 | ||||||||||||
Portfolio turnover rate | 16 | %3 | 19 | % | 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, 2017, the years ended October 31, 2016, 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 and will terminate on March 1, 2018, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2017, the years ended October 31, 2016, 2015 and 2014 and the period ended October 31, 2013, the waived fees were $59,824, $146,074, $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.
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, 2017 (unaudited) | For the years ended October 31, | For the period from April 2, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||||||
2016 | 2015 | 2014 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 11.05 | $ | 11.31 | $ | 11.24 | $ | 10.98 | $ | 10.00 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||
Net investment income1 | 0.01 | 0.04 | 0.03 | 0.07 | 0.00 | 2 | ||||||||||||||||
Net realized and unrealized gain (loss) | 1.14 | (0.18 | ) | 0.29 | 0.22 | 0.98 | ||||||||||||||||
Total income (loss) from investment operations | 1.15 | (0.14 | ) | 0.32 | 0.29 | 0.98 | ||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||
From net investment income | (0.03 | ) | (0.05 | ) | (0.12 | ) | (0.01 | ) | – | |||||||||||||
From net realized gains | – | (0.07 | ) | (0.13 | ) | (0.03 | ) | – | ||||||||||||||
Total dividends and distributions | (0.03 | ) | (0.12 | ) | (0.25 | ) | (0.04 | ) | – | |||||||||||||
Short-term redemption fees1 | – | – | – | 0.01 | 0.00 | 2 | ||||||||||||||||
Net asset value, end of period | $ | 12.17 | $ | 11.05 | $ | 11.31 | $ | 11.24 | $ | 10.98 | ||||||||||||
Total return | 10.47 | %3 | (1.25 | )% | 2.98 | % | 2.70 | % | 9.80 | %3 | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||
Net assets, end of period (in millions) | $4 | $4 | $4 | $2 | $2 | |||||||||||||||||
Ratio of expenses to average net assets before reductions | 2.69 | %4 | 2.65 | % | 2.93 | % | 3.36 | % | 4.88 | %4 | ||||||||||||
Fee waiver | 1.18 | %4,5 | 1.14 | %5 | 1.43 | %5 | 1.86 | %5 | 3.37 | %4,5 | ||||||||||||
Expense offset arrangement | 0.01 | %4,6 | 0.01 | % | 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 | % | 1.50 | %4 | ||||||||||||
Ratio of net investment income to average net assets | 0.20 | %4 | 0.32 | % | 0.29 | % | 0.61 | % | 0.02 | %4 | ||||||||||||
Portfolio turnover rate | 16 | %3 | 19 | % | 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, 2017, the years ended October 31, 2016, 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 and will terminate on March 1, 2018, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2017, the years ended October 31, 2016, 2015 and 2014 and the period ended October 31, 2013, the waived fees were $21,363, $40,663, $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.
financial statements april 30, 2017 | 13 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS
April 30, 2017 (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, 2017 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 adjust the observed values of 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. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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. 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 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. |
financial statements april 30, 2017 | 15 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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 and foreign exchange transactions and translations and unrealized gain or loss on investments in securities and foreign currency translations. 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. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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.
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 $593,082 and $10,877 to Class N and Retail Class shareholders, respectively, during the six months ended April 30, 2017. 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 | |||||||||||||||||||
2016: | $ | 648,794 | $ | 698,183 | $ | 1,346,977 | $ | – | $ | 1,346,977 | |||||||||||||
2015: | 1,846,286 | 1,058,441 | 2,904,727 | – | 2,904,727 |
financial statements april 30, 2017 | 17 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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) | |||||||||||||||||||||||
2016: | $ | 567,899 | $ | – | $ | 567,899 | $ | – | $ | (772,531 | ) | $ | 9,151,064 | $ | 8,946,432 | ||||||||||||||
2015: | 572,705 | 697,249 | 1,269,954 | – | (901,232 | ) | 11,400,989 | 11,769,711 |
H. | Use of Estimates. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations 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. For the six months ended April 30, 2017, the Fund incurred $542,146 under the Agreement. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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, 2018, 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, 2017, the Investment Adviser waived fees in the amount of $59,824 and $21,363 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% of Class N and Retail Class shares’ average daily net assets. For the six months ended April 30, 2017, the Fund incurred shareholder servicing fees in the amount of $110,516 and $3,620 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, 2017, Retail Class shares of the Fund incurred $4,525 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, 2017, the Fund incurred $15,136 in custody and fund accounting fees. These fees for the Fund were reduced by $3,800 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 |
financial statements april 30, 2017 | 19 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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, 2017, 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, 2017, the Fund incurred $27,231 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2017, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $17,488,187 and $16,994,120, respectively. |
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, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||||
Class N | ||||||||||||||||||
Shares sold | 439,617 | $ | 5,077,741 | 1,128,001 | $ | 12,396,138 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 41,531 | 470,955 | 117,195 | 1,271,563 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | N/A | N/A | 297 | ||||||||||||||
Shares redeemed | (721,909 | ) | (8,354,278 | ) | (3,124,991 | ) | (35,007,891 | ) | ||||||||||
Net increase (decrease) | (240,761 | ) | $ | (2,805,582 | ) | (1,879,795 | ) | $ | (21,339,893 | ) | ||||||||
Retail Class | ||||||||||||||||||
Shares sold | 1,374 | $ | 15,600 | 8,626 | $ | 94,582 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 883 | 9,971 | 3,160 | 34,157 | ||||||||||||||
Shares redeemed | (9,046 | ) | (104,397 | ) | (17,195 | ) | (188,642 | ) | ||||||||||
Net increase (decrease) | (6,789 | ) | $ | (78,826 | ) | (5,409 | ) | $ | (59,903 | ) |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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: |
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. |
financial statements april 30, 2017 | 21 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
7. | Recent Pronouncements. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended existing rules (together, “final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the financial statements and related disclosures. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2017 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, 2017 (unaudited)
financial statements april 30, 2017 | 23 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2017 (unaudited)
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,106 | $ | 6.53 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.26 |
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 1,105 | $ | 7.83 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,017 | $ | 7.50 |
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 181/365 (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, 2017 (unaudited)
financial statements april 30, 2017 | 25 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 27 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 29 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
agree to higher fees than it would in the case of unaffiliated providers. BBH acting in its capacity as the Fund’s administrator is the primary valuation agent of the Fund. BBH values securities and assets in the Fund according to the Fund’s valuation policies. Because the Investment Adviser and BBH’s advisory and administrative fees are calculated by reference to a Fund’s net assets, BBH and its affiliates may have an incentive to seek to overvalue certain assets.
financial statements april 30, 2017 | 31 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
benefits, of economies of scale or price discounts in connection with products and services that may be provided to the Fund and to such other BBH client accounts. To the extent that BBH uses soft dollars, it will not have to pay for those products and services itself.
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 33 |
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 1-800-575-1265 | 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 |
(FORMERLY THE BBH INTERNATIONAL EQUITY FUND)
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO ALLOCATION
April 30, 2017 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stocks: | ||||||||||
Bermuda | $ | 19,430,180 | 1.6 | % | ||||||
Brazil | 31,678,621 | 2.7 | ||||||||
Canada | 96,512,464 | 8.1 | ||||||||
Cayman Islands | 27,810,210 | 2.3 | ||||||||
Denmark | 17,896,258 | 1.5 | ||||||||
France | 148,419,851 | 12.4 | ||||||||
Germany | 101,424,403 | 8.5 | ||||||||
Hong Kong | 36,625,572 | 3.1 | ||||||||
Ireland | 21,041,348 | 1.8 | ||||||||
Italy | 25,988,645 | 2.2 | ||||||||
Japan | 152,233,375 | 12.8 | ||||||||
Jersey | 39,394,274 | 3.3 | ||||||||
Mexico | 29,648,613 | 2.5 | ||||||||
South Korea | 21,254,588 | 1.8 | ||||||||
Spain | 60,663,743 | 5.1 | ||||||||
Sweden | 8,917,744 | 0.7 | ||||||||
Switzerland | 149,700,413 | 12.5 | ||||||||
United Kingdom | 77,338,879 | 6.5 | ||||||||
Registered Investment Companies: | ||||||||||
United States | 90,150,000 | 7.6 | ||||||||
Cash and Other Assets in Excess of Liabilities | 36,012,340 | 3.0 | ||||||||
NET ASSETS | $ | 1,192,141,521 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO ALLOCATION (continued)
April 30, 2017 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stocks: | ||||||||||
Basic Materials | $ | 45,796,386 | 3.8 | % | ||||||
Communications | 111,547,695 | 9.4 | ||||||||
Consumer Cyclical | 227,713,211 | 19.1 | ||||||||
Consumer Non-Cyclical | 349,940,260 | 29.4 | ||||||||
Financials | 112,098,053 | 9.4 | ||||||||
Industrials | 149,520,367 | 12.5 | ||||||||
Technology | 69,363,209 | 5.8 | ||||||||
Registered Investment Companies | 90,150,000 | 7.6 | ||||||||
Cash and Other Assets in Excess of Liabilities | 36,012,340 | 3.0 | ||||||||
NET ASSETS | $ | 1,192,141,521 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 3 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS
April 30, 2017 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCKS (89.4%) | ||||||||||
BERMUDA (1.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
447,700 | IHS Markit, Ltd.1 | $ | 19,430,180 | |||||||
Total Bermuda | 19,430,180 | |||||||||
BRAZIL (2.7%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
5,532,829 | Ambev SA | 31,678,621 | ||||||||
Total Brazil | 31,678,621 | |||||||||
CANADA (8.1%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
483,909 | Alimentation Couche-Tard, Inc. (Class B) | 22,233,465 | ||||||||
FINANCIALS | ||||||||||
809,790 | Brookfield Asset Management, Inc. (Class A) | 29,921,741 | ||||||||
INDUSTRIALS | ||||||||||
289,777 | Canadian Pacific Railway, Ltd.1 | 44,357,258 | ||||||||
Total Canada | 96,512,464 | |||||||||
CAYMAN ISLANDS (2.3%) | ||||||||||
COMMUNICATIONS | ||||||||||
154,304 | Baidu, Inc. ADR1 | 27,810,210 | ||||||||
Total Cayman Islands | 27,810,210 | |||||||||
DENMARK (1.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
209,072 | Coloplast AS (Class B) | 17,896,258 | ||||||||
Total Denmark | 17,896,258 | |||||||||
FRANCE (12.4%) | ||||||||||
BASIC MATERIALS | ||||||||||
250,762 | Air Liquide SA | 30,212,238 | ||||||||
CONSUMER CYCLICAL | ||||||||||
103,399 | LVMH Moet Hennessy Louis Vuitton SE | 25,550,094 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
FRANCE (continued) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
202,776 | Essilor International SA | $ | 26,275,997 | |||||||
44,134 | L’Oreal SA | 8,791,174 | ||||||||
115,130 | Pernod Ricard SA | 14,404,283 | ||||||||
49,471,454 | ||||||||||
INDUSTRIALS | ||||||||||
291,777 | Safran SA1 | 24,157,863 | ||||||||
TECHNOLOGY | ||||||||||
213,005 | Dassault Systemes SE | 19,028,202 | ||||||||
Total France | 148,419,851 | |||||||||
GERMANY (8.5%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
165,003 | Adidas AG | 33,059,385 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
420,303 | Fresenius SE & Co. KGaA | 34,088,183 | ||||||||
130,509 | Henkel AG & Co. KGaA | 17,787,186 | ||||||||
51,875,369 | ||||||||||
TECHNOLOGY | ||||||||||
164,394 | SAP SE | 16,489,649 | ||||||||
Total Germany | 101,424,403 | |||||||||
HONG KONG (3.1%) | ||||||||||
FINANCIALS | ||||||||||
5,294,600 | AIA Group, Ltd. | 36,625,572 | ||||||||
Total Hong Kong | 36,625,572 | |||||||||
IRELAND (1.8%) | ||||||||||
INDUSTRIALS | ||||||||||
577,039 | CRH, Plc1 | 21,041,348 | ||||||||
Total Ireland | 21,041,348 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 5 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
ITALY (2.2%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
448,365 | Luxottica Group SpA | $ | 25,988,645 | |||||||
Total Italy | 25,988,645 | |||||||||
JAPAN (12.8%) | ||||||||||
COMMUNICATIONS | ||||||||||
959,700 | Dentsu, Inc. | 54,163,179 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
355,200 | Kao Corp. | 19,599,394 | ||||||||
1,034,600 | Seven & i Holdings Co., Ltd. | 43,741,740 | ||||||||
63,341,134 | ||||||||||
INDUSTRIALS | ||||||||||
182,500 | Hoya Corp.1 | 8,730,930 | ||||||||
64,600 | Keyence Corp.1 | 25,998,132 | ||||||||
34,729,062 | ||||||||||
Total Japan | 152,233,375 | |||||||||
JERSEY (3.3%) | ||||||||||
COMMUNICATIONS | ||||||||||
522,110 | WPP, Plc. | 11,159,280 | ||||||||
CONSUMER CYCLICAL | ||||||||||
225,698 | Wolseley, Plc. | 14,298,026 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
649,850 | Experian, Plc. | 13,936,968 | ||||||||
Total Jersey | 39,394,274 | |||||||||
MEXICO (2.5%) | ||||||||||
COMMUNICATIONS | ||||||||||
757,820 | Grupo Televisa SAB ADR | 18,415,026 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
1,256,100 | Fomento Economico Mexicano SAB de CV | 11,233,587 | ||||||||
Total Mexico | 29,648,613 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
SOUTH KOREA (1.8%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
82,991 | Amorepacific Corp. | $ | 21,254,588 | |||||||
Total South Korea | 21,254,588 | |||||||||
SPAIN (5.1%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
699,526 | Industria de Diseno Textil SA | 26,818,385 | ||||||||
TECHNOLOGY | ||||||||||
627,761 | Amadeus IT Group SA | 33,845,358 | ||||||||
Total Spain | 60,663,743 | |||||||||
SWEDEN (0.7%) | ||||||||||
INDUSTRIALS | ||||||||||
412,242 | Assa Abloy AB (Class B)1 | 8,917,744 | ||||||||
Total Sweden | 8,917,744 | |||||||||
SWITZERLAND (12.5%) | ||||||||||
BASIC MATERIALS | ||||||||||
8,084 | Givaudan SA | 15,584,148 | ||||||||
CONSUMER CYCLICAL | ||||||||||
334,336 | Cie Financiere Richemont SA | 27,950,732 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
659,375 | Nestle SA | 50,824,716 | ||||||||
4,711 | SGS SA | 10,610,367 | ||||||||
61,435,083 | ||||||||||
FINANCIALS | ||||||||||
207,019 | Chubb, Ltd. | 28,413,358 | ||||||||
INDUSTRIALS | ||||||||||
107,856 | Kuehne + Nagel International AG1 | 16,317,092 | ||||||||
Total Switzerland | 149,700,413 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 7 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
UNITED KINGDOM (6.5%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
2,571,270 | Compass Group, Plc. | $ | 51,814,479 | |||||||
CONSUMER NON-CYCLICAL | ||||||||||
91,177 | Reckitt Benckiser Group, Plc. | 8,387,018 | ||||||||
FINANCIALS | ||||||||||
772,810 | Prudential, Plc. | 17,137,382 | ||||||||
Total United Kingdom | 77,338,879 | |||||||||
Total Common Stocks (Identified cost $941,794,815) | 1,065,979,181 | |||||||||
REGISTERED INVESTMENT COMPANIES (7.6%) | ||||||||||
90,150,000 | Morgan Stanley Institutional Liquidity Funds – Treasury Securities Portfolio (Class SE) | 90,150,000 | ||||||||
Total Registered Investment Companies (Identified cost $90,150,000) | 90,150,000 |
TOTAL INVESTMENTS (Identified cost $1,031,944,815)2 | 97.0 | % | $ | 1,156,129,181 | ||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 3.0 | % | 36,012,340 | |||||||
NET ASSETS | 100.0 | % | $ | 1,192,141,521 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $1,031,944,815, the aggregate gross unrealized appreciation is $138,332,867 and the aggregate gross unrealized depreciation is $14,148,501, resulting in net unrealized appreciation of $124,184,366. |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities. |
— | Level 2 – significant other observable inputs (including quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities). |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 9 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (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, 2017 | ||||||||||||||
Common Stocks: | ||||||||||||||||||
Bermuda | $ | 19,430,180 | $ | – | $ | – | $ | 19,430,180 | ||||||||||
Brazil | – | 31,678,621 | – | 31,678,621 | ||||||||||||||
Canada | 96,512,464 | – | – | 96,512,464 | ||||||||||||||
Cayman Islands | 27,810,210 | – | – | 27,810,210 | ||||||||||||||
Denmark | – | 17,896,258 | – | 17,896,258 | ||||||||||||||
France | – | 148,419,851 | – | 148,419,851 | ||||||||||||||
Germany | – | 101,424,403 | – | 101,424,403 | ||||||||||||||
Hong Kong | – | 36,625,572 | – | 36,625,572 | ||||||||||||||
Ireland | – | 21,041,348 | – | 21,041,348 | ||||||||||||||
Italy | – | 25,988,645 | – | 25,988,645 | ||||||||||||||
Japan | – | 152,233,375 | – | 152,233,375 | ||||||||||||||
Jersey | – | 39,394,274 | – | 39,394,274 | ||||||||||||||
Mexico | 18,415,026 | 11,233,587 | – | 29,648,613 | ||||||||||||||
South Korea | – | 21,254,588 | – | 21,254,588 | ||||||||||||||
Spain | – | 60,663,743 | – | 60,663,743 | ||||||||||||||
Sweden | – | 8,917,744 | – | 8,917,744 | ||||||||||||||
Switzerland | 28,413,358 | 121,287,055 | – | 149,700,413 | ||||||||||||||
United Kingdom | – | 77,338,879 | – | 77,338,879 | ||||||||||||||
Registered Investment Companies: | ||||||||||||||||||
United States | 90,150,000 | – | – | 90,150,000 | ||||||||||||||
Investments, at value | $ | 280,731,238 | $ | 875,397,943 | $ | – | $ | 1,156,129,181 |
* | 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, 2017. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 11 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2017 (unaudited)
ASSETS: | |||||||
Investments in securities, at value (Identified cost $1,031,944,815) | $ | 1,156,129,181 | |||||
Cash | 28,498,953 | ||||||
Foreign currency at value (Identified cost $700,964) | 700,175 | ||||||
Receivables for: | |||||||
Shares sold | 5,673,876 | ||||||
Dividends | 2,661,370 | ||||||
Investments sold | 2,388,174 | ||||||
Interest | 11 | ||||||
Prepaid assets | 145 | ||||||
Other assets | 5,572 | ||||||
Total Assets | 1,196,057,457 | ||||||
LIABILITIES: | |||||||
Payables for: | |||||||
Investments purchased | 3,219,887 | ||||||
Investment advisory and administrative fees | 569,807 | ||||||
Custody and fund accounting fees | 56,407 | ||||||
Shares redeemed | 32,573 | ||||||
Professional fees | 31,901 | ||||||
Board of Trustees’ fees | 1,327 | ||||||
Distributor fees | 778 | ||||||
Transfer agent fees | 748 | ||||||
Accrued expenses and other liabilities | 2,508 | ||||||
Total Liabilities | 3,915,936 | ||||||
NET ASSETS | $ | 1,192,141,521 | |||||
Net Assets Consist of: | |||||||
Paid-in capital | $ | 1,025,732,151 | |||||
Undistributed net investment income | 2,538,632 | ||||||
Accumulated net realized gain on investments in securities and foreign exchange transactions | 39,670,620 | ||||||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 124,200,118 | ||||||
Net Assets | $ | 1,192,141,521 | |||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | |||||||
CLASS I SHARES | |||||||
($1,192,141,521 ÷ 76,597,694 shares outstanding) | $15.56 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
STATEMENT OF OPERATIONS
For the six months ended April 30, 2017 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $770,135) | $ | 8,076,973 | ||||
Interest and other income | 1,630 | |||||
Total Income | 8,078,603 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 3,727,262 | |||||
Custody and fund accounting fees | 111,432 | |||||
Professional fees | 42,666 | |||||
Shareholder servicing fees | 28,394 | |||||
Board of Trustees’ fees | 27,231 | |||||
Transfer agent fees | 13,723 | |||||
Distributor fees | 12,266 | |||||
Miscellaneous expenses | 47,182 | |||||
Total Expenses | 4,010,156 | |||||
Investment advisory and administrative fee waiver | (8,095 | ) | ||||
Expense offset arrangement | (13,825 | ) | ||||
Net Expenses | 3,988,236 | |||||
Net Investment Income | 4,090,367 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 93,169,847 | |||||
Net realized loss on foreign exchange transactions and translations | (687,160 | ) | ||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 92,482,687 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 7,004,018 | |||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | 100,945 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 7,104,963 | |||||
Net Realized and Unrealized Gain | 99,587,650 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 103,678,017 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 13 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 4,090,367 | $ | 17,588,064 | ||||||
Net realized gain (loss) on investments in securities and foreign exchange transactions and translations | 92,482,687 | (5,920,115 | ) | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 7,104,963 | 8,168,515 | ||||||||
Net increase in net assets resulting from operations | 103,678,017 | 19,836,464 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N* | (912,244 | ) | (11,418,433 | ) | ||||||
Class I | (20,664,200 | ) | (1,321,700 | ) | ||||||
Total dividends and distributions declared | (21,576,444 | ) | (12,740,133 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares** | 239,781,209 | 884,413,974 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 1,195,485 | 12,671,721 | ||||||||
Proceeds from short-term redemption fees | 5,129 | 4,306 | ||||||||
Cost of shares redeemed** | (90,184,400 | ) | (677,619,363 | ) | ||||||
Net increase in net assets resulting from share transactions | 150,797,423 | 219,470,638 | ||||||||
Total increase in net assets | 232,898,996 | 226,566,969 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 959,242,525 | 732,675,556 | ||||||||
End of period (including undistributed net investment income of $2,538,632 and $20,024,709, respectively) | $ | 1,192,141,521 | $ | 959,242,525 |
* | Effective February 24, 2017 Class N shares were redesignated as Class I shares. |
** | Includes share exchanges. See note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the period from November 1, 2016 to February 23, 2017 (unaudited)* | For the years ended October 31, | ||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.42 | $ | 14.49 | $ | 15.11 | $ | 15.38 | $ | 13.05 | $ | 12.66 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.05 | 0.10 | 0.23 | 0.37 | 0.25 | 0.27 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.41 | 0.08 | (0.49 | ) | (0.38 | ) | 2.35 | 0.45 | |||||||||||||||||||
Total income (loss) from investment operations | 0.46 | 0.18 | (0.26 | ) | (0.01 | ) | 2.60 | 0.72 | |||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.29 | ) | (0.25 | ) | (0.36 | ) | (0.26 | ) | (0.27 | ) | (0.33 | ) | |||||||||||||||
Total dividends and distributions | (0.29 | ) | (0.25 | ) | (0.36 | ) | (0.26 | ) | (0.27 | ) | (0.33 | ) | |||||||||||||||
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* | $ | 14.59 | $ | 14.42 | $ | 14.49 | $ | 15.11 | $ | 15.38 | $ | 13.05 | |||||||||||||||
Total return | 3.30 | %3 | 1.35 | % | (1.65 | )% | 0.01 | % | 20.27 | % | 6.05 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $48 | $45 | $665 | $757 | $695 | $510 | |||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 1.13 | %4 | 1.08 | % | 1.12 | % | 1.12 | % | 1.14 | % | 1.17 | % | |||||||||||||||
Fee waiver | 0.06 | %4,5 | 0.02 | %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 | 1.07 | %4 | 1.06 | % | 1.12 | % | 1.12 | % | 1.14 | % | 1.17 | % | |||||||||||||||
Ratio of net investment income to average net assets | 1.11 | %4 | 0.73 | % | 1.53 | % | 2.43 | % | 1.79 | % | 2.18 | % | |||||||||||||||
Portfolio turnover rate7 | 114 | %3 | 12 | % | 18 | % | 15 | % | 14 | % | 12 | % |
* | Effective February 24, 2017 Class N shares were redesignated as Class I shares. |
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, 2017, 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, 2017 and the year ended October 31, 2016 the waived fees were $8,095 and $24,973, respectively. |
6 | Less than 0.01%. |
7 | The Fund’s portfolio turnover rate is for the six months ended April 30, 2017. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 15 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the 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, 2017 (unaudited)* | For the years ended October 31, | |||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.46 | $ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | $ | 12.70 | ||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||
Net investment income1 | 0.06 | 0.34 | 0.26 | 0.40 | 0.28 | 0.30 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) | 1.36 | (0.14 | ) | (0.49 | ) | (0.38 | ) | 2.37 | 0.45 | |||||||||||||||||||
Total income (loss) from investment operations | 1.42 | 0.20 | (0.23 | ) | 0.02 | 2.65 | 0.75 | |||||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||||||
From net investment income | (0.32 | ) | (0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | (0.37 | ) | ||||||||||||||||
Total dividends and distributions | (0.32 | ) | (0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | (0.37 | ) | ||||||||||||||||
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 | $ | 15.56 | $ | 14.46 | $ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | ||||||||||||||||
Total return | 10.09 | %3 | 1.51 | % | (1.42 | )% | 0.21 | % | 20.64 | % | 6.31 | % | ||||||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 1,192 | $914 | $68 | $86 | $75 | $70 | |||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.79 | %4 | 0.85 | % | 0.89 | % | 0.90 | % | 0.90 | % | 0.94 | % | ||||||||||||||||
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 | 0.79 | %4 | 0.85 | % | 0.89 | % | 0.90 | % | 0.90 | % | 0.94 | % | ||||||||||||||||
Ratio of net investment income to average net assets | 0.81 | %4 | 2.41 | % | 1.77 | % | 2.62 | % | 2.01 | % | 2.42 | % | ||||||||||||||||
Portfolio turnover rate | 114 | %3 | 12 | % | 18 | % | 15 | % | 14 | % | 12 | % |
* | Effective February 24, 2017 Class N shares were redesignated as Class I shares. |
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 PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS
April 30, 2017 (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. On February 24, 2017, the name of the Fund was changed from “BBH International Equity Fund” to “BBH Partner Fund – International Equity”. Effective February 24, 2017, the Fund’s Class N shares were redesignated as Class I shares. The Fund currently offers one class of shares designated as Class I shares. The investment objective of the Fund is long-term maximization of total return, primarily through capital appreciation. As of April 30, 2017, 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 adjust the observed values of 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 |
financial statements april 30, 2017 | 17 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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 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, 2017 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 gain or loss on investments in securities and foreign exchange transactions and translations and unrealized appreciation or depreciation on investments in securities and foreign currency translations. Net |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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, 2017 | 19 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
prior three 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.
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 $912,244 and $20,644,200 to Class N shares and Class I shares, respectively, during the six months ended April 30, 2017. |
Distributions paid from: | |||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | |||||||||||||||||||
2016: | $ | 12,740,133 | $ | – | $ | 12,740,133 | $ | – | $ | 12,740,133 | |||||||||||||
2015: | 19,958,932 | – | 19,958,932 | – | 19,958,932 |
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) | |||||||||||||||||||||||
2016: | $ | 20,493,926 | $ | – | $ | 20,493,926 | $ | (46,271,458 | ) | $ | (7,009,826 | ) | $ | 117,095,155 | $ | 84,307,797 | |||||||||||||
2015: | 12,303,263 | – | 12,303,263 | (37,959,260 | ) | (8,450,529 | ) | 111,309,594 | 77,203,068 |
Expiration Date | Amount | ||||||||
Pre-December 22, 2010 Capital Losses | 10/31/2017 | $ | 33,416,631 | ||||||
10/31/2019 | 5,166,463 | ||||||||
Post December 22, 2010 Capital Losses1 | No Expiration | 7,688,364 | |||||||
Total capital loss carryforward | $ | 46,271,458 |
1 | Must be utilized prior to losses subject to expiration. |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
H. | Use of Estimates. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations 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 allocated the Fund’s assets among the Fund’s sub-advisers, until February 24, 2017, Mondrian Investment Partners Limited and Walter Scott & Partners Limited (together, “Sub-advisers”). The Sub-advisers were responsible for investing the assets of the Fund and the Investment Adviser oversaw the Sub-advisers and evaluated their performance results. BBH also provides administrative services to the Fund. Until February 24, 2017, the Fund’s investment advisory and administrative services fee was 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 paid each Sub-adviser a percentage from its investment advisory and administrative fees. Effective February 24, 2017, BBH replaced the Sub-advisers with a sole sub-adviser, Select Equity Group, L.P. (“Select Equity Group” or the “Sub-adviser”). The Sub-adviser is responsible for investing the assets of the Fund and the Investment Adviser oversees the |
financial statements april 30, 2017 | 21 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
Sub-adviser and evaluates its performance results. Effective February 24, 2017, the Fund’s investment advisory and administrative services fee is calculated daily and paid monthly at an annual rate equivalent to 0.65% per annum on the first $3,000,000,000 of average daily net assets and 0.60% per annum on all average daily net assets over $3,000,000,000. The Investment Adviser pays its Sub-advisers a percentage from its investment advisory and administrative fees. For the six months ended April 30, 2017 the Fund incurred $3,727,262 for services under the Agreements. |
B. | Investment Advisory and Administrative Fee Waivers. Effective December 29, 2015 and until February 24, 2017, 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 was a voluntary waiver that could be changed at any time at the sole discretion of the Investment Adviser. From November 1, 2016 to February 23, 2017, the Investment Adviser waived fees in the amount of $8,095 for Class N. |
C. | Shareholder Servicing Fees. The Trust had a shareholder servicing agreement with BBH. BBH received 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. From November 1, 2016 to February 23, 2017, Class N shares of the Fund incurred $28,394 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, 2017, the Fund incurred $111,432 in custody and fund accounting fees. These fees for the Fund were reduced by $13,825 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, 2017, was $195. This amount is presented under line item “Custody and fund accounting fees” in the Statements of Operations. |
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, 2017, the Fund incurred $27,231 in independent Trustee compensation and reimbursements. |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
4. | Investment Transactions. For the six months ended April 30, 2017, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $1,112,437,963 and $988,755,836 respectively. |
5. | Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class I shares of beneficial interest, at no par value. Effective February 24, 2017, the Fund’s Class N shares were redesignated as Class I shares. Transactions in Class N shares and Class I shares were as follows: |
For the six months ended April 30, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||||
Class N | ||||||||||||||||||
Shares sold | 254,302 | $ | 3,635,185 | 1,338,991 | $ | 18,817,299 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 63,325 | 885,747 | 836,244 | 11,364,561 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | N/A | N/A | 185 | ||||||||||||||
Shares redeemed | (3,432,844 | ) | (50,037,147 | ) | (44,930,525 | ) | (607,010,304 | ) | ||||||||||
Net increase (decrease) | (3,115,217 | ) | $ | (45,516,215 | ) | (42,755,290 | ) | $ | (576,828,259 | ) | ||||||||
Class I | ||||||||||||||||||
Shares sold | 16,128,269 | $ | 236,146,024 | 63,509,676 | $ | 865,596,675 | ||||||||||||
Shares issued in connection with reinvestments of dividends | 22,126 | 309,738 | 96,115 | 1,307,160 | ||||||||||||||
Proceeds from short-term redemption fees | N/A | 5,129 | N/A | 4,121 | ||||||||||||||
Shares redeemed | (2,775,362 | ) | (40,147,253 | ) | (5,063,173 | ) | (70,609,059 | ) | ||||||||||
Net increase (decrease) | 13,375,033 | $ | 196,313,638 | 58,542,618 | $ | 796,298,897 |
financial statements april 30, 2017 | 23 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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: |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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. | Recent Pronouncements. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended existing rules (together, “final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the financial statements and related disclosures. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2017 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, 2017 | 25 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF FUND EXPENSES
April 30, 2017 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2017 (unaudited)
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,101 | $ | 4.12 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,021 | $ | 3.96 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.79% for I shares, multiplied by the average account value over the period, multiplied by 181/365 (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, 2017 | 27 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION
April 30, 2017 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
approve the Agreements, and individual Trustees may have given different weight to various factors. The Board reviewed these factors with Fund Counsel. The Board concluded that the fees paid by the Fund to the Investment Adviser and the Sub-advisers were reasonable.
financial statements april 30, 2017 | 29 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
profitability data for the Fund for the nine-months ended September 30, 2016, and for the prior four years. The 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 the fee rate was standardized at 0.20% for all of the Trust’s funds, including the Fund. 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 the effect of fall-out benefits to the Investment Adviser and BBH such as the increased visibility of BBH’s investment management business due to the distribution of the Funds. The Board focused on profitability of the Investment Adviser’s and BBH’s relationships with the Fund before taxes and distribution expenses. 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. The Board considered other 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. 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 received were considered reasonable.
financial statements april 30, 2017 | 31 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
Agreement was in the best interests of the Fund and its shareholders. The Board, including the Independent Trustees, unanimously approved the New Sub-Advisory Agreement for an initial period of two-years and authorized the Investment Adviser to terminate the Sub-advisory Agreements with Walter Scott and Mondrian with respect to the Fund.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
Group and the other resources it has dedicated to performing services for the Fund. On the basis of these considerations, together with other information considered, the Board determined that it was satisfied with the nature, extent and quality of the services to be provided by Select Equity Group.
financial statements april 30, 2017 | 33 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
of Select Equity Group’s asset management capabilities. The Board also considered that it would have the opportunity to periodically reexamine the appropriateness of the advisory fees payable by the Fund to the Investment Adviser, and sub-advisory fees payable by the Investment Adviser to Select Equity Group, in light of any asset growth experienced in the future.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
CONFLICTS OF INTEREST
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 35 |
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
available on the SEC’s website (www.adviserinfo.sec.gov). In addition, many of the activities that create these conflicts of interest are limited and/or prohibited by law, unless an exception is available.
BBH PARTNER FUND – INTERNATIONAL EQUITY (formerly the BBH International Equity Fund)
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 37 |
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 1-800-575-1265 | 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, 2017 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Asset Backed Securities | $ | 1,619,607,729 | 26.6 | % | ||||||
Commercial Mortgage Backed Securities | 383,917,981 | 6.3 | ||||||||
Corporate Bonds | 2,144,872,360 | 35.3 | ||||||||
Loan Participations and Assignments | 495,176,938 | 8.1 | ||||||||
Municipal Bonds | 361,486,090 | 5.9 | ||||||||
U.S. Government Agency Obligations | 148,370,876 | 2.4 | ||||||||
Certificates of Deposit | 258,086,069 | 4.3 | ||||||||
Time Deposits | 150,000,000 | 2.5 | ||||||||
U.S. Treasury Bills | 594,388,420 | 9.8 | ||||||||
Liabilities in Excess of Other Assets | (72,687,962 | ) | (1.2 | ) | ||||||
NET ASSETS | $ | 6,083,218,501 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (26.6%) | ||||||||||||||||||
$ 27,529,405 | AIM Aviation Finance, Ltd. 2015-1A1 | 02/15/40 | 4.213 | % | $ | 27,598,228 | ||||||||||||
4,095,320 | Alterna Funding I LLC 2014-1A1 | 02/15/21 | 1.639 | 4,013,414 | ||||||||||||||
7,506,050 | AmeriCredit Automobile Receivables Trust 2013-3 | 06/10/19 | 2.380 | 7,524,281 | ||||||||||||||
11,095,555 | AXIS Equipment Finance Receivables III LLC 2015-1A1 | 03/20/20 | 1.900 | 11,090,904 | ||||||||||||||
21,214,241 | AXIS Equipment Finance Receivables IV LLC 2016-1A1 | 11/20/21 | 2.210 | 21,103,426 | ||||||||||||||
475,903 | BCC Funding VIII LLC 2014-1A1 | 06/20/20 | 1.794 | 475,309 | ||||||||||||||
21,239,130 | BCC Funding X LLC 2015-11 | 10/20/20 | 2.224 | 21,222,648 | ||||||||||||||
17,530,000 | BCC Funding XIII LLC 2016-11 | 12/20/21 | 2.200 | 17,469,786 | ||||||||||||||
518,157 | Capital Auto Receivables Asset Trust 2013-2 | 04/22/19 | 2.660 | 518,443 | ||||||||||||||
18,140,000 | Capital Auto Receivables Asset Trust 2013-21 | 01/20/22 | 4.060 | 18,268,546 | ||||||||||||||
9,467,747 | Capital Auto Receivables Asset Trust 2013-3 | 10/22/18 | 2.790 | 9,487,514 | ||||||||||||||
25,010,000 | Capital Automotive REIT 2017-1A1 | 04/15/47 | 3.870 | 25,307,471 | ||||||||||||||
15,559,486 | Carlyle Global Market Strategies Commodities Funding, Ltd. 2014-1A1,2,3 | 10/15/21 | 3.058 | 8,951,072 | ||||||||||||||
12,374,422 | Cazenovia Creek Funding I LLC 2015-1A1 | 12/10/23 | 2.000 | 12,289,348 | ||||||||||||||
2,657,083 | CCG Receivables Trust 2014-11 | 11/15/21 | 1.060 | 2,656,719 | ||||||||||||||
45,000,000 | Chase Issuance Trust 2016-A6 | 01/15/20 | 1.100 | 44,905,986 | ||||||||||||||
26,421,120 | Chesterfield Financial Holdings LLC 2014-1A1 | 12/15/34 | 4.500 | 26,374,376 | ||||||||||||||
6,063,965 | CIT Equipment Collateral 2014-VT11 | 10/21/19 | 1.500 | 6,063,622 | ||||||||||||||
13,000,000 | Citibank Credit Card Issuance Trust 2014-A8 | 04/09/20 | 1.730 | 13,035,134 | ||||||||||||||
47,700,000 | Citibank Credit Card Issuance Trust 2017-A2 | 01/19/21 | 1.740 | 47,798,749 | ||||||||||||||
2,720,000 | Credit Acceptance Auto Loan Trust 2014-2A1 | 09/15/22 | 2.670 | 2,727,199 | ||||||||||||||
10,890,000 | Credit Acceptance Auto Loan Trust 2015-1A1 | 01/17/23 | 2.610 | 10,924,937 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 3 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 14,190,000 | Credit Acceptance Auto Loan Trust 2016-2A1 | 11/15/23 | 2.420 | % | $ | 14,268,617 | ||||||||||||
15,480,000 | Credit Acceptance Auto Loan Trust 2017-1A1 | 10/15/25 | 2.560 | 15,499,514 | ||||||||||||||
32,879,384 | Drive Auto Receivables Trust 2015-BA1 | 07/15/21 | 2.760 | 33,034,055 | ||||||||||||||
13,356,000 | Eagle I, Ltd. 2014-1A1 | 12/15/39 | 4.310 | 13,419,285 | ||||||||||||||
27,932,755 | ECAF I, Ltd. 2015-1A1 | 06/15/40 | 3.473 | 27,583,596 | ||||||||||||||
21,900,000 | Elm Trust 2016-1A1 | 06/20/25 | 4.163 | 22,043,730 | ||||||||||||||
18,280,796 | Emerald Aviation Finance, Ltd. 2013-11 | 10/15/38 | 4.650 | 18,714,965 | ||||||||||||||
25,563,555 | Engs Commercial Finance Trust 2015-1A1 | 10/22/21 | 2.310 | 25,506,985 | ||||||||||||||
19,420,000 | Enterprise Fleet Financing LLC 2016-21 | 02/22/22 | 1.740 | 19,387,726 | ||||||||||||||
17,170,000 | Enterprise Fleet Financing LLC 2017-11 | 07/20/22 | 2.130 | 17,161,331 | ||||||||||||||
5,706,208 | FNA Trust 2015-11 | 12/10/23 | 3.240 | 5,674,474 | ||||||||||||||
14,500,000 | Ford Credit Auto Owner Trust 2014-21 | 04/15/26 | 2.310 | 14,642,365 | ||||||||||||||
14,380,654 | Foursight Capital Automobile Receivables Trust 2015-11 | 01/15/21 | 2.340 | 14,286,441 | ||||||||||||||
20,810,000 | Foursight Capital Automobile Receivables Trust 2017-11 | 04/15/22 | 2.370 | 20,808,098 | ||||||||||||||
6,235,248 | FRS I LLC 2013-1A1 | 04/15/43 | 1.800 | 6,113,804 | ||||||||||||||
20,096,929 | Global Container Assets, Ltd. 2015-1A1 | 02/05/30 | 2.100 | 19,775,014 | ||||||||||||||
11,360,000 | GM Financial Consumer Automobile 2017-1A1 | 03/16/20 | 1.510 | 11,357,815 | ||||||||||||||
12,180,000 | GM Financial Consumer Automobile 2017-1A1 | 10/18/21 | 1.780 | 12,182,402 | ||||||||||||||
16,510,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 1.650 | 16,522,447 | ||||||||||||||
6,525,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 1.970 | 6,511,317 | ||||||||||||||
10,730,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 2.220 | 10,736,348 | ||||||||||||||
24,900,000 | Hertz Fleet Lease Funding LP 2017-11 | 04/10/31 | 2.130 | 24,896,957 | ||||||||||||||
17,750,000 | Hyundai Auto Receivables Trust 2013-B | 02/15/19 | 1.710 | 17,777,335 | ||||||||||||||
19,210,000 | Lendmark Funding Trust 2016-A1 | 08/21/23 | 4.820 | 19,612,134 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 24,110,000 | Lendmark Funding Trust 2016-2A1 | 04/21/25 | 3.260 | % | $ | 24,099,736 | ||||||||||||
19,500,000 | Mariner Finance Issuance Trust 2017-A1 | 02/20/29 | 3.620 | 19,628,415 | ||||||||||||||
4,021,225 | MCA Fund I Holding LLC 2014-11,2 | 08/15/24 | 3.039 | 4,022,672 | ||||||||||||||
16,130,000 | MMAF Equipment Finance LLC 2017-AA1 | 05/18/20 | 1.730 | 16,130,000 | ||||||||||||||
3,913,836 | Nations Equipment Finance Funding II LLC 2014-1A1 | 07/20/18 | 1.558 | 3,912,021 | ||||||||||||||
13,158,832 | Nations Equipment Finance Funding III LLC 2016-1A1 | 02/20/21 | 3.610 | 13,224,350 | ||||||||||||||
7,118,281 | Navitas Equipment Receivables LLC 2015-11 | 11/15/18 | 2.120 | 7,117,231 | ||||||||||||||
22,280,000 | Navitas Equipment Receivables LLC 2016-11 | 06/15/21 | 2.200 | 22,261,699 | ||||||||||||||
51,030,000 | NCF Dealer Floorplan Master Trust 2014-1A1,2 | 10/20/20 | 2.478 | 50,660,793 | ||||||||||||||
14,332,637 | New Mexico State Educational Assistance Foundation 2013-12 | 01/02/25 | 1.683 | 14,131,980 | ||||||||||||||
7,021,066 | Newtek Small Business Loan Trust 2010-11,2 | 02/25/41 | 3.291 | 6,990,227 | ||||||||||||||
17,710,194 | Newtek Small Business Loan Trust 2016-1A1,2 | 02/25/42 | 3.991 | 17,763,852 | ||||||||||||||
40,190,000 | NextGear Floorplan Master Owner Trust 2014-1A1 | 10/15/19 | 1.920 | 40,245,446 | ||||||||||||||
22,470,000 | NextGear Floorplan Master Owner Trust 2015-1A1 | 07/15/19 | 1.800 | 22,483,080 | ||||||||||||||
13,740,000 | NextGear Floorplan Master Owner Trust 2015-1A1,2 | 07/15/19 | 2.744 | 13,743,027 | ||||||||||||||
22,200,000 | NextGear Floorplan Master Owner Trust 2016-2A1 | 09/15/21 | 2.190 | 22,044,565 | ||||||||||||||
12,280,000 | NRZ Advance Receivables Trust Advance Receivables Backed 2016-T11 | 06/15/49 | 2.751 | 12,188,887 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 5 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 2,982,749 | OneMain Financial Issuance Trust 2014-1A1 | 06/18/24 | 2.430 | % | $ | 2,983,294 | ||||||||||||
15,230,000 | OneMain Financial Issuance Trust 2014-2A1 | 09/18/24 | 3.020 | 15,209,686 | ||||||||||||||
26,190,000 | OneMain Financial Issuance Trust 2015-1A1 | 03/18/26 | 3.850 | 26,363,153 | ||||||||||||||
16,400,000 | OSCAR US Funding Trust VI LLC 2017-1A1 | 05/11/20 | 2.300 | 16,398,508 | ||||||||||||||
14,775,814 | Oxford Finance Funding LLC 2014-11 | 12/15/22 | 3.475 | 14,751,820 | ||||||||||||||
14,750,000 | Oxford Finance Funding LLC 2016-1A1 | 06/17/24 | 3.968 | 14,630,498 | ||||||||||||||
29,000,000 | PFS Financing Corp. 2017-AA1,2 | 03/15/21 | 1.570 | 29,000,000 | ||||||||||||||
2,280,605 | PFS Tax Lien Trust 2014-11 | 05/15/29 | 1.440 | 2,261,478 | ||||||||||||||
50,000,000 | Progreso Receivables Funding IV LLC 2015-B1 | 07/28/20 | 3.000 | 50,009,400 | ||||||||||||||
24,280,024 | ReadyCap Lending Small Business Loan Trust 2015-12 | 12/25/38 | 2.241 | 24,150,961 | ||||||||||||||
2,016,025 | Santander Drive Auto Receivables Trust 2013-2 | 03/15/19 | 1.950 | 2,016,876 | ||||||||||||||
10,980,000 | Santander Drive Auto Receivables Trust 2015-3 | 04/15/20 | 2.070 | 11,007,046 | ||||||||||||||
22,790,000 | Santander Drive Auto Receivables Trust 2015-3 | 01/15/21 | 2.740 | 23,054,514 | ||||||||||||||
20,688,191 | Shenton Aircraft Investment I, Ltd. 2015-1A1 | 10/15/42 | 4.750 | 21,182,285 | ||||||||||||||
7,286,294 | SMART Trust 2015-1US | 09/14/18 | 1.500 | 7,277,740 | ||||||||||||||
33,210,000 | Spirit Master Funding LLC 2014-4A1 | 01/20/45 | 3.501 | 32,896,611 | ||||||||||||||
9,900,000 | Spirit Master Funding VII LLC 2013-1A1 | 12/20/43 | 3.887 | 9,885,455 | ||||||||||||||
34,770,000 | SPS Servicer Advance Receivables Trust Advance Receivables Backed Notes 2016-T21 | 11/15/49 | 2.750 | 34,661,761 | ||||||||||||||
16,917,889 | STORE Master Funding LLC 2013-1A1 | 03/20/43 | 4.160 | 16,945,849 | ||||||||||||||
12,106,352 | STORE Master Funding LLC 2013-2A1 | 07/20/43 | 4.370 | 12,310,121 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 20,252,954 | STORE Master Funding LLC 2013-3A1 | 11/20/43 | 4.240 | % | $ | 20,516,718 | ||||||||||||
1,781,142 | TAL Advantage V LLC 2014-2A1 | 05/20/39 | 1.700 | 1,771,815 | ||||||||||||||
17,972,500 | TAL Advantage V LLC 2014-3A1 | 11/21/39 | 3.270 | 17,655,152 | ||||||||||||||
6,520,145 | Tax Ease Funding 2016-1 LLC 2016-1A1 | 06/15/28 | 3.131 | 6,521,692 | ||||||||||||||
49,760,000 | Trafigura Securitisation Finance, Plc. 2014-1A1,2 | 10/15/18 | 1.944 | 49,691,406 | ||||||||||||||
18,330,000 | Turquoise Card Backed Securities, Plc. 2012-1A1,2 | 06/17/19 | 1.794 | 18,347,597 | ||||||||||||||
3,887,262 | Utah State Board of Regents 2011-12 | 05/01/29 | 1.884 | 3,895,464 | ||||||||||||||
9,744,143 | Westlake Automobile Receivables Trust 2015-1A1 | 11/16/20 | 2.290 | 9,762,577 | ||||||||||||||
21,340,000 | Westlake Automobile Receivables Trust 2015-2A1 | 01/15/21 | 2.450 | 21,430,509 | ||||||||||||||
25,510,000 | World Financial Network Credit Card Master Trust 2014-C | 08/16/21 | 1.540 | 25,517,990 | ||||||||||||||
19,570,000 | World Financial Network Credit Card Master Trust 2016-B | 06/15/22 | 1.440 | 19,527,905 | ||||||||||||||
Total Asset Backed Securities (Identified cost $1,625,370,504) | 1,619,607,729 | |||||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (6.3%) | ||||||||||||||||||
15,540,000 | Aventura Mall Trust 2013-AVM1,2 | 12/05/32 | 3.743 | 16,055,347 | ||||||||||||||
13,860,000 | BBCMS Trust 2015-RRI1,2 | 05/15/32 | 3.044 | 13,875,749 | ||||||||||||||
26,807,000 | BB-UBS Trust 2012-TFT1,2 | 06/05/30 | 3.468 | 26,274,104 | ||||||||||||||
6,349,000 | BHMS Mortgage Trust 2014-ATLS1,2 | 07/05/33 | 3.433 | 6,425,781 | ||||||||||||||
32,018,000 | BHMS Mortgage Trust 2014-ATLS1,2 | 07/05/33 | 4.691 | 32,297,863 | ||||||||||||||
12,240,000 | BLCP Hotel Trust 2014-CLRN1,2 | 08/15/29 | 2.944 | 12,274,623 | ||||||||||||||
30,106,000 | BXHTL Mortgage Trust 2015-JWRZ1,2 | 05/15/29 | 3.144 | 30,219,816 | ||||||||||||||
35,000,000 | CDGJ Commercial Mortgage Trust 2014-BXCH1,2 | 12/15/27 | 3.494 | 35,183,043 | ||||||||||||||
31,329,000 | CG-CCRE Commercial Mortgage Trust 2014-FL21,2 | 11/15/31 | 3.894 | 31,431,991 | ||||||||||||||
2,085,000 | Citigroup Commercial Mortgage Trust 2013-SMP1 | 01/12/30 | 2.738 | 2,091,304 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 7 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (continued) | ||||||||||||||||||
$ 7,463,614 | Commercial Mortgage Pass Through Certificates 2013-GAM1 | 02/10/28 | 1.705 | % | $ | 7,420,969 | ||||||||||||
9,690,000 | Commercial Mortgage Pass Through Certificates 2013-GAM1,2 | 02/10/28 | 3.531 | 9,521,429 | ||||||||||||||
22,660,000 | Commercial Mortgage Pass Through Certificates 2014-TWC1,2 | 02/13/32 | 1.840 | 22,716,861 | ||||||||||||||
23,010,000 | Cosmopolitan Hotel Trust 2016-CSMO A1,2 | 11/15/33 | 2.394 | 23,175,840 | ||||||||||||||
9,950,000 | EQTY 2014-INNS Mortgage Trust1,2 | 05/08/31 | 2.589 | 9,963,090 | ||||||||||||||
9,410,000 | Hyatt Hotel Portfolio Trust 2015-HYT1,2 | 11/15/29 | 3.094 | 9,454,145 | ||||||||||||||
5,600,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-BXH1,2 | 04/15/27 | 2.244 | 5,555,298 | ||||||||||||||
10,250,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-BXH1,2 | 04/15/27 | 2.644 | 10,142,030 | ||||||||||||||
35,700,000 | SBA Tower Trust1 | 04/15/43 | 2.240 | 35,679,140 | ||||||||||||||
14,500,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH1,2 | 02/15/27 | 2.844 | 14,548,157 | ||||||||||||||
18,083,919 | WFCG Commercial Mortgage Trust 2015-BXRP1,2 | 11/15/29 | 2.116 | 18,115,421 | ||||||||||||||
11,468,922 | WFCG Commercial Mortgage Trust 2015-BXRP1,2 | 11/15/29 | 2.384 | 11,495,980 | ||||||||||||||
Total Commercial Mortgage Backed Securities | ||||||||||||||||||
(Identified cost $382,958,283) | 383,917,981 | |||||||||||||||||
CORPORATE BONDS (35.3%) | ||||||||||||||||||
AEROSPACE/DEFENSE (0.4%) | ||||||||||||||||||
21,389,000 | BAE Systems Holdings, Inc.1 | 06/01/19 | 6.375 | 23,200,285 | ||||||||||||||
AUTO MANUFACTURERS (1.8%) | ||||||||||||||||||
35,420,000 | Daimler Finance North America LLC1 | 01/11/18 | 1.875 | 35,452,374 | ||||||||||||||
41,036,000 | Ford Motor Credit Co. LLC | 01/16/18 | 2.375 | 41,213,727 | ||||||||||||||
17,720,000 | General Motors Co. | 10/02/18 | 3.500 | 18,065,593 | ||||||||||||||
16,098,000 | General Motors Financial Co., Inc. | 09/25/17 | 3.000 | 16,188,599 | ||||||||||||||
110,920,293 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
BANKS (10.8%) | ||||||||||||||||||
$ 24,290,000 | ANZ New Zealand (Int’l), Ltd., London Branch1 | 02/01/19 | 2.250 | % | $ | 24,368,700 | ||||||||||||
27,373,000 | Bank of America Corp. | 09/01/17 | 6.000 | 27,765,146 | ||||||||||||||
20,435,000 | BNZ International Funding, Ltd. London Branch1 | 02/21/20 | 2.400 | 20,523,034 | ||||||||||||||
24,335,000 | BNZ International Funding, Ltd. London Branch1 | 03/02/21 | 2.750 | 24,515,687 | ||||||||||||||
17,405,000 | Caisse Centrale Desjardins1 | 09/12/17 | 1.550 | 17,408,951 | ||||||||||||||
14,000,000 | Caisse Centrale Desjardins1 | 01/29/18 | 1.750 | 14,018,284 | ||||||||||||||
43,473,900 | Citigroup Capital XIII2,4 | 10/30/40 | 7.542 | 45,630,205 | ||||||||||||||
29,115,000 | Commonwealth Bank of Australia New York Branch | 09/08/17 | 1.400 | 29,128,276 | ||||||||||||||
438,665 | FNBC 1993-A Pass Through Trust | 01/05/18 | 8.080 | 441,487 | ||||||||||||||
37,000,000 | Goldman Sachs Group, Inc.2 | 06/04/17 | 1.725 | 37,018,278 | ||||||||||||||
54,440,000 | Goldman Sachs Group, Inc. | 04/01/18 | 6.150 | 56,600,125 | ||||||||||||||
33,660,000 | JPMorgan Chase & Co. | 08/15/17 | 2.000 | 33,724,728 | ||||||||||||||
18,180,000 | JPMorgan Chase & Co. | 03/01/18 | 1.700 | 18,196,307 | ||||||||||||||
28,783,375 | Merrill Lynch Capital Trust I2,4 | 12/15/86 | 6.450 | 29,715,956 | ||||||||||||||
12,775,000 | Mitsubishi UFJ Trust & Banking Corp.1 | 10/16/17 | 1.600 | 12,776,214 | ||||||||||||||
31,050,000 | Morgan Stanley | 04/01/18 | 6.625 | 32,414,896 | ||||||||||||||
27,760,000 | Morgan Stanley | 04/25/18 | 2.125 | 27,874,621 | ||||||||||||||
13,760,000 | National Australia Bank, Ltd. | 07/12/19 | 1.375 | 13,574,997 | ||||||||||||||
24,850,000 | Royal Bank of Canada | 04/15/19 | 1.625 | 24,736,435 | ||||||||||||||
39,890,000 | Skandinaviska Enskilda Banken AB | 03/11/20 | 2.300 | 40,054,626 | ||||||||||||||
12,345,000 | Skandinaviska Enskilda Banken AB | 03/15/21 | 2.625 | 12,436,625 | ||||||||||||||
18,165,000 | State Street Corp. | 05/15/18 | 1.350 | 18,149,015 | ||||||||||||||
25,085,000 | Toronto-Dominion Bank | 04/07/21 | 2.125 | 24,968,681 | ||||||||||||||
29,515,000 | Wells Fargo Bank NA | 01/22/18 | 1.650 | 29,562,076 | ||||||||||||||
11,500,000 | Wells Fargo Bank NA | 05/24/19 | 1.750 | 11,473,447 | ||||||||||||||
17,750,000 | Westpac Banking Corp. | 12/01/17 | 1.500 | 17,751,473 | ||||||||||||||
10,000,000 | Westpac Banking Corp. | 07/30/18 | 2.250 | 10,069,600 | ||||||||||||||
654,897,870 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 9 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
BEVERAGES (1.6%) | ||||||||||||||||||
$ 39,350,000 | Anheuser-Busch InBev Finance, Inc. | 02/01/19 | 1.900 | % | $ | 39,432,320 | ||||||||||||
12,695,000 | Anheuser-Busch InBev Finance, Inc. | 02/01/21 | 2.650 | 12,850,844 | ||||||||||||||
48,418,000 | Diageo Capital, Plc. | 05/11/17 | 1.500 | 48,424,972 | ||||||||||||||
100,708,136 | ||||||||||||||||||
COMMERCIAL SERVICES (0.8%) | ||||||||||||||||||
19,863,000 | Experian Finance, Plc.1 | 06/15/17 | 2.375 | 19,881,929 | ||||||||||||||
27,350,000 | United Rentals North America, Inc. | 07/15/23 | 4.625 | 28,390,668 | ||||||||||||||
48,272,597 | ||||||||||||||||||
COMPUTERS (0.4%) | ||||||||||||||||||
6,790,000 | Dell International LLC / EMC Corp.1 | 06/15/21 | 4.420 | 7,128,142 | ||||||||||||||
17,250,000 | Dell International LLC / EMC Corp.1 | 06/15/23 | 5.450 | 18,615,648 | ||||||||||||||
25,743,790 | ||||||||||||||||||
COSMETICS/PERSONAL CARE (0.3%) | ||||||||||||||||||
17,745,000 | Avon Products, Inc. | 03/15/20 | 6.600 | 18,033,356 | ||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (2.7%) | ||||||||||||||||||
8,057,986 | AA Aircraft Financing 2013-1 LLC1 | 11/01/19 | 3.596 | 7,977,406 | ||||||||||||||
3,251,599 | Ahold Lease Series 2001-A-1 Pass Through Trust | 01/02/20 | 7.820 | 3,439,106 | ||||||||||||||
15,950,000 | Air Lease Corp. | 09/04/18 | 2.625 | 16,068,875 | ||||||||||||||
6,300,000 | Alliance Data Systems Corp.1 | 12/01/17 | 5.250 | 6,378,750 | ||||||||||||||
3,210,000 | Alliance Data Systems Corp.1 | 04/01/20 | 6.375 | 3,262,162 | ||||||||||||||
3,750,000 | Alliance Data Systems Corp.1 | 11/01/21 | 5.875 | 3,881,250 | ||||||||||||||
8,790,000 | Alliance Data Systems Corp.1 | 08/01/22 | 5.375 | 8,844,938 | ||||||||||||||
15,775,000 | Athene Global Funding1 | 10/23/18 | 2.875 | 15,863,009 | ||||||||||||||
24,310,000 | Athene Global Funding1 | 01/25/22 | 4.000 | 25,081,551 | ||||||||||||||
8,500,000 | Credit Acceptance Corp. | 02/15/21 | 6.125 | 8,457,500 | ||||||||||||||
10,154,183 | Doric Nimrod Air Alpha 2013-1 Pass Through Trust1 | 05/30/25 | 5.250 | 10,560,350 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (continued) | ||||||||||||||||||
$ 5,354,689 | Doric Nimrod Air Finance Alpha, Ltd. 2012-1 (Class A) Pass Through Trust1 | 11/30/24 | 5.125 | % | $ | 5,585,482 | ||||||||||||
49,455,000 | Drawbridge Special Opportunities Fund1 | 08/01/21 | 5.000 | 49,509,796 | ||||||||||||||
164,910,175 | ||||||||||||||||||
ELECTRIC (0.5%) | ||||||||||||||||||
22,150,000 | TransAlta Corp. | 06/03/17 | 1.900 | 22,150,000 | ||||||||||||||
5,580,000 | TransAlta Corp. | 05/15/18 | 6.900 | 5,803,200 | ||||||||||||||
27,953,200 | ||||||||||||||||||
GAS (0.6%) | ||||||||||||||||||
35,006,000 | NiSource Finance Corp. | 03/15/18 | 6.400 | 36,375,960 | ||||||||||||||
HEALTHCARE-PRODUCTS (0.2%) | ||||||||||||||||||
7,995,000 | Mallinckrodt International Finance SA | 04/15/18 | 3.500 | 8,035,854 | ||||||||||||||
1,435,000 | Mallinckrodt International Finance SA / Mallinckrodt CB LLC1 | 04/15/20 | 4.875 | 1,431,413 | ||||||||||||||
9,467,267 | ||||||||||||||||||
HEALTHCARE-SERVICES (0.9%) | ||||||||||||||||||
27,406,000 | UnitedHealth Group, Inc. | 02/15/18 | 6.000 | 28,365,785 | ||||||||||||||
26,155,000 | UnitedHealth Group, Inc. | 07/16/18 | 1.900 | 26,269,690 | ||||||||||||||
54,635,475 | ||||||||||||||||||
INSURANCE (3.0%) | ||||||||||||||||||
12,290,000 | Enstar Group, Ltd. | 03/10/22 | 4.500 | 12,582,207 | ||||||||||||||
15,985,000 | Fairfax Financial Holdings, Ltd.1 | 05/15/21 | 5.800 | 17,335,221 | ||||||||||||||
7,638,000 | Marsh & McLennan Cos, Inc. | 09/10/19 | 2.350 | 7,690,763 | ||||||||||||||
22,800,000 | New York Life Global Funding1 | 04/09/20 | 2.000 | 22,795,280 | ||||||||||||||
41,960,000 | Pricoa Global Funding I1 | 08/18/17 | 1.350 | 41,941,664 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 11 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
INSURANCE (continued) | ||||||||||||||||||
$ 31,810,000 | Sirius International Group, Ltd.1 | 11/01/26 | 4.600 | % | $ | 30,619,988 | ||||||||||||
33,100,000 | Vitality Re V Ltd.1,2 | 01/07/20 | 2.542 | 33,043,730 | ||||||||||||||
16,740,000 | Vitality Re VIII Ltd.1,2 | 01/08/22 | 2.542 | 16,783,524 | ||||||||||||||
182,792,377 | ||||||||||||||||||
INTERNET (0.3%) | ||||||||||||||||||
15,630,000 | Expedia, Inc. | 08/15/20 | 5.950 | 17,173,291 | ||||||||||||||
INVESTMENT COMPANIES (1.3%) | ||||||||||||||||||
6,800,000 | Ares Capital Corp. | 11/30/18 | 4.875 | 7,030,982 | ||||||||||||||
30,450,000 | Ares Capital Corp. | 01/19/22 | 3.625 | 30,406,000 | ||||||||||||||
22,645,000 | FS Investment Corp. | 01/15/20 | 4.250 | 23,128,380 | ||||||||||||||
21,515,000 | PennantPark Investment Corp. | �� | 10/01/19 | 4.500 | 21,679,332 | |||||||||||||
82,244,694 | ||||||||||||||||||
MACHINERY – CONSTRUCTION & MINING (0.8%) | ||||||||||||||||||
19,495,000 | Caterpillar Financial Services Corp. | 03/22/19 | 1.900 | 19,501,823 | ||||||||||||||
10,397,000 | Caterpillar Financial Services Corp. | 05/18/19 | 1.350 | 10,309,759 | ||||||||||||||
17,525,000 | Caterpillar Financial Services Corp. | 01/10/20 | 2.100 | 17,594,977 | ||||||||||||||
47,406,559 | ||||||||||||||||||
MEDIA (0.3%) | ||||||||||||||||||
16,485,000 | TEGNA, Inc. | 10/15/19 | 5.125 | 16,897,125 | ||||||||||||||
MINING (0.1%) | ||||||||||||||||||
8,000,000 | Freeport-McMoRan, Inc.1 | 11/15/20 | 6.500 | 8,220,000 | ||||||||||||||
OIL & GAS (0.4%) | ||||||||||||||||||
10,065,000 | Occidental Petroleum Corp. | 02/15/18 | 1.500 | 10,063,047 | ||||||||||||||
19,630,325 | Odebrecht Drilling Norbe VIII/IX, Ltd.1 | 06/30/22 | 6.350 | 11,778,195 | ||||||||||||||
9,922,800 | Odebrecht Offshore Drilling Finance, Ltd.1 | 10/01/23 | 6.750 | 3,869,892 | ||||||||||||||
25,711,134 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
PHARMACEUTICALS (1.4%) | ||||||||||||||||||
$ 14,270,000 | AbbVie, Inc. | 05/14/18 | 1.800 | % | $ | 14,290,121 | ||||||||||||
9,000,000 | AbbVie, Inc. | 05/14/20 | 2.500 | 9,078,183 | ||||||||||||||
14,000,000 | AbbVie, Inc. | 05/14/21 | 2.300 | 13,906,354 | ||||||||||||||
28,950,000 | Actavis Funding SCS | 03/12/18 | 2.350 | 29,072,458 | ||||||||||||||
16,787,000 | GlaxoSmithKline Capital, Inc. | 05/15/18 | 5.650 | 17,509,781 | ||||||||||||||
83,856,897 | ||||||||||||||||||
PIPELINES (2.3%) | ||||||||||||||||||
14,927,000 | Enterprise Products Operating LLC | 09/15/17 | 6.300 | 15,188,745 | ||||||||||||||
43,420,000 | Kinder Morgan Energy Partners LP | 02/15/18 | 5.950 | 44,786,210 | ||||||||||||||
22,018,000 | Spectra Energy Capital LLC | 04/15/18 | 6.200 | 22,906,338 | ||||||||||||||
23,190,000 | Spectra Energy Capital LLC | 10/01/19 | 8.000 | 26,017,116 | ||||||||||||||
16,117,000 | TransCanada PipeLines, Ltd. | 11/09/17 | 1.625 | 16,114,180 | ||||||||||||||
12,960,000 | TransCanada PipeLines, Ltd. | 01/15/19 | 3.125 | 13,220,652 | ||||||||||||||
138,233,241 | ||||||||||||||||||
REAL ESTATE (0.7%) | ||||||||||||||||||
11,490,000 | Prologis International Funding II SA1 | 02/15/20 | 4.875 | 12,011,841 | ||||||||||||||
32,965,000 | Vonovia Finance BV1 | 10/02/17 | 3.200 | 33,114,266 | ||||||||||||||
45,126,107 | ||||||||||||||||||
REAL ESTATE INVESTMENT TRUSTS (2.0%) | ||||||||||||||||||
31,465,000 | Omega Healthcare Investors, Inc. | 01/15/25 | 4.500 | 31,550,428 | ||||||||||||||
8,850,000 | Select Income REIT | 02/01/18 | 2.850 | 8,899,507 | ||||||||||||||
14,700,000 | Select Income REIT | 02/01/22 | 4.150 | 14,902,081 | ||||||||||||||
9,105,000 | Simon Property Group LP1 | 02/01/18 | 1.500 | 9,094,893 | ||||||||||||||
22,739,000 | Welltower, Inc. | 09/15/17 | 4.700 | 22,992,858 | ||||||||||||||
32,311,000 | Welltower, Inc. | 03/15/18 | 2.250 | 32,430,486 | ||||||||||||||
119,870,253 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 13 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
RETAIL (0.8%) | ||||||||||||||||||
$ 23,820,000 | Target Corp. | 01/15/18 | 6.000 | % | $ | 24,585,622 | ||||||||||||
25,260,000 | Wal-Mart Stores, Inc.2 | 06/01/18 | 5.313 | 25,358,597 | ||||||||||||||
49,944,219 | ||||||||||||||||||
TELECOMMUNICATIONS (0.3%) | ||||||||||||||||||
9,175,000 | British Telecommunications, Plc. | 01/15/18 | 5.950 | 9,452,241 | ||||||||||||||
8,760,000 | Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint Spectrum Co. III LLC1 | 03/20/23 | 3.360 | 8,836,650 | ||||||||||||||
18,288,891 | ||||||||||||||||||
TRANSPORTATION (0.3%) | ||||||||||||||||||
15,270,000 | Norfolk Southern Corp. | 04/01/18 | 5.750 | 15,842,793 | ||||||||||||||
TRUCKING & LEASING (0.3%) | ||||||||||||||||||
17,180,000 | Park Aerospace Holdings, Ltd.1 | 08/15/22 | 5.250 | 18,146,375 | ||||||||||||||
Total Corporate Bonds (Identified cost $2,147,733,030) | 2,144,872,360 | |||||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (8.1%) | ||||||||||||||||||
30,000,000 | Analog Devices, Inc.2 | 09/23/19 | 2.125 | 29,850,000 | ||||||||||||||
10,567,248 | Aria Energy Operating LLC2 | 05/27/22 | 5.554 | 10,620,084 | ||||||||||||||
34,419,804 | Astoria Energy LLC Term B2 | 12/24/21 | 5.074 | 34,703,768 | ||||||||||||||
55,484,987 | AT&T, Inc. Term A2 | 03/02/18 | 2.064 | 55,381,230 | ||||||||||||||
13,635,000 | Avolon TLB Borrower 1 (US) LLC Term B22 | 03/21/22 | 3.743 | 13,833,526 | ||||||||||||||
35,256,529 | Charter Communications Operating LLC (CCO Safari LLC) Term H-12 | 01/15/22 | 3.000 | 35,383,805 | ||||||||||||||
9,750,000 | Dell International LLC Term A22 | 09/07/21 | 3.250 | 9,759,750 | ||||||||||||||
24,228,402 | Dell International LLC Term B2 | 09/07/23 | 3.500 | 24,313,686 | ||||||||||||||
34,844,330 | Delos Finance S.a.r.l.2 | 10/06/23 | 3.397 | 35,245,039 | ||||||||||||||
21,395,043 | Eastern Power LLC (TPF II LC LLC)2 | 10/02/23 | 5.000 | 21,515,497 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||
$ 4,811,278 | Entergy Rhode Island Energy LP Term B2 | 12/19/22 | 5.750 | % | $ | 4,799,250 | ||||||||||||
15,821,139 | HCA, Inc. Term B92 | 03/17/23 | 2.993 | 15,872,558 | ||||||||||||||
19,535,624 | Mallinckrodt International Finance SA Term B2 | 09/24/24 | 3.897 | 19,524,684 | ||||||||||||||
42,000,000 | Medtronic, Inc.2 | 01/26/18 | 1.868 | 41,737,500 | ||||||||||||||
10,500,000 | Oneok Partners LP2 | 01/08/19 | 2.288 | 10,460,625 | ||||||||||||||
48,874,734 | RPI Finance Trust Term B62 | 03/27/23 | 3.153 | 49,027,712 | ||||||||||||||
22,700,000 | Sprint Communications, Inc.2 | 02/02/24 | 3.500 | 22,714,301 | ||||||||||||||
40,097,505 | Western Digital Corporation Term B22 | 04/29/23 | 3.743 | 40,433,923 | ||||||||||||||
20,000,000 | Western Union Company2 | 04/09/21 | 2.672 | 20,000,000 | ||||||||||||||
Total Loan Participations and Assignments | ||||||||||||||||||
(Identified cost $493,073,101) | 495,176,938 | |||||||||||||||||
MUNICIPAL BONDS (5.9%) | ||||||||||||||||||
14,250,000 | Baylor Health Care System, Revenue Bonds2 | 11/15/25 | 1.230 | 13,546,050 | ||||||||||||||
5,000,000 | Butler County General Authority, Revenue Bonds, AGM5 | 05/05/17 | 0.960 | 5,000,000 | ||||||||||||||
50,000,000 | California Statewide Communities Development Authority, Revenue Bonds5 | 05/05/17 | 0.880 | 50,000,000 | ||||||||||||||
18,000,000 | Charlotte-Mecklenburg Hospital Authority, Revenue Bonds5 | 05/01/17 | 0.820 | 18,000,000 | ||||||||||||||
7,000,000 | City of Charlotte, North Carolina, Certificates of Participation5 | 05/05/17 | 0.890 | 7,000,000 | ||||||||||||||
10,800,000 | City of New York, General Obligation Bonds5 | 05/05/17 | 0.860 | 10,800,000 | ||||||||||||||
23,635,000 | City of New York, General Obligation Bonds5 | 05/05/17 | 0.860 | 23,635,000 | ||||||||||||||
52,300,000 | County of Franklin, Ohio, Revenue Bonds5 | 05/05/17 | 0.890 | 52,300,000 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 15 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
$ 9,600,000 | Illinois Finance Authority, Revenue Bonds5 | 05/05/17 | 0.900 | % | $ | 9,600,000 | ||||||||||||
28,005,000 | New Jersey Economic Development Authority, Revenue Bonds, AGM6 | 02/15/18 | 0.000 | 27,482,427 | ||||||||||||||
4,360,000 | New Jersey Economic Development Authority, Revenue Bonds | 06/15/20 | 5.000 | 4,622,821 | ||||||||||||||
10,850,000 | New York City Water & Sewer System, Revenue Bonds5 | 05/01/17 | 0.870 | 10,850,000 | ||||||||||||||
3,600,000 | New York State Energy Research & Development Authority, Revenue Bonds, NPFG2 | 12/01/20 | 1.610 | 3,466,663 | ||||||||||||||
18,000,000 | New York State Housing Finance Agency, Revenue Bonds5 | 05/05/17 | 0.870 | 18,000,000 | ||||||||||||||
49,900,000 | New York State Housing Finance Agency, Revenue Bonds5 | 05/05/17 | 0.920 | 49,900,000 | ||||||||||||||
15,000,000 | Ohio Higher Educational Facility Commission, Revenue Bonds5 | 05/01/17 | 0.880 | 15,000,000 | ||||||||||||||
7,140,000 | Pennsylvania Industrial Development Authority, Revenue Bonds1 | 07/01/21 | 2.967 | 7,168,988 | ||||||||||||||
3,445,000 | School District of Philadelphia, General Obligation Bonds | 09/01/17 | 2.009 | 3,420,920 | ||||||||||||||
2,330,000 | School District of Philadelphia, General Obligation Bonds | 09/01/18 | 2.512 | 2,278,973 | ||||||||||||||
25,000,000 | State of California, General Obligation Bonds5 | 05/01/17 | 0.600 | 25,000,000 | ||||||||||||||
16,650,000 | Tobacco Settlement Financing Corp., Revenue Bonds6 | 06/01/41 | 0.000 | 4,414,248 | ||||||||||||||
Total Municipal Bonds (Identified cost $360,755,978) | 361,486,090 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.4%) | ||||||||||||||||||
$ 50,000,000 | Federal Home Loan Bank Discount Notes6 | 06/21/17 | 0.000 | % | $ | 49,944,679 | ||||||||||||
75,000,000 | Federal Home Loan Bank Discount Notes6 | 07/05/17 | 0.000 | 74,886,225 | ||||||||||||||
150,867 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 04/01/36 | 3.226 | 159,965 | ||||||||||||||
83,246 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 12/01/36 | 2.990 | 88,179 | ||||||||||||||
43,016 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 01/01/37 | 3.370 | 45,483 | ||||||||||||||
100,850 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 | 02/01/37 | 3.561 | 106,389 | ||||||||||||||
9,736,361 | Federal National Mortgage Association (FNMA) | 07/01/35 | 5.000 | 10,684,300 | ||||||||||||||
659,150 | Federal National Mortgage Association (FNMA) | 11/01/35 | 5.500 | 738,382 | ||||||||||||||
87,568 | Federal National Mortgage Association (FNMA)2 | 07/01/36 | 3.237 | 93,167 | ||||||||||||||
145,065 | Federal National Mortgage Association (FNMA)2 | 09/01/36 | 2.951 | 153,557 | ||||||||||||||
110,393 | Federal National Mortgage Association (FNMA)2 | 01/01/37 | 3.431 | 116,761 | ||||||||||||||
570,546 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 638,573 | ||||||||||||||
6,569,604 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 7,364,830 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 17 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (continued) | ||||||||||||||||||
$ 2,933,720 | Federal National Mortgage Association (FNMA) | 06/01/40 | 6.500 | % | $ | 3,330,916 | ||||||||||||
18,819 | Government National Mortgage Association (GNMA)2 | 08/20/29 | 2.125 | 19,470 | ||||||||||||||
Total U.S. Government Agency Obligations (Identified cost $147,567,666) | 148,370,876 | |||||||||||||||||
CERTIFICATES OF DEPOSIT (4.3%) | ||||||||||||||||||
54,200,000 | Bank of Nova Scotia2 | 05/30/17 | 1.504 | 54,200,000 | ||||||||||||||
54,300,000 | Canadian Imperial Bank of Commerce2 | 08/31/17 | 1.554 | 54,397,469 | ||||||||||||||
45,200,000 | Skandinaviska Enskilda Banken AB2 | 05/31/17 | 1.633 | 45,200,000 | ||||||||||||||
54,200,000 | Svenska Handelsbanken AB2 | 05/30/17 | 1.474 | 54,200,000 | ||||||||||||||
50,000,000 | Toronto-Dominion Bank2 | 09/01/17 | 1.555 | 50,088,600 | ||||||||||||||
Total Certificates of Deposit (Identified cost $257,900,000) | 258,086,069 | |||||||||||||||||
TIME DEPOSITS (2.5%) | ||||||||||||||||||
150,000,000 | Wells Fargo Bank NA | 05/01/17 | 0.900 | 150,000,000 | ||||||||||||||
Total Time Deposits (Identified cost $150,000,000) | 150,000,000 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. TREASURY BILLS (9.8%) | ||||||||||||||||||
$100,000,000 | U.S. Treasury Bill6 | 05/04/17 | 0.000 | % | $ | 99,995,227 | ||||||||||||
75,000,000 | U.S. Treasury Bill6 | 05/11/17 | 0.000 | 74,989,167 | ||||||||||||||
50,000,000 | U.S. Treasury Bill6 | 05/18/17 | 0.000 | 49,988,490 | ||||||||||||||
95,000,000 | U.S. Treasury Bill6 | 06/08/17 | 0.000 | 94,936,318 | ||||||||||||||
100,000,000 | U.S. Treasury Bill6,7 | 06/15/17 | 0.000 | 99,924,969 | ||||||||||||||
50,000,000 | U.S. Treasury Bill6 | 07/13/17 | 0.000 | 49,924,700 | ||||||||||||||
50,000,000 | U.S. Treasury Bill6 | 08/17/17 | 0.000 | 49,878,649 | ||||||||||||||
50,000,000 | U.S. Treasury Bill6 | 09/14/17 | 0.000 | 49,837,550 | ||||||||||||||
25,000,000 | U.S. Treasury Bill6 | 09/21/17 | 0.000 | 24,913,350 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $594,418,175) | 594,388,420 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $6,159,776,737)8 | 101.2 | % | $ | 6,155,906,463 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (1.2 | )% | (72,687,962 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 6,083,218,501 |
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, 2017 was $ 2,362,923,654 or 38.8% 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, 2017 coupon or interest rate. |
3 | The Fund’s Investment Adviser has deemed this security to be illiquid upon the SEC definition of an illiquid security. |
4 | Trust preferred security. |
5 | 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, 2017. |
6 | Security issued with zero coupon. Income is recognized through accretion of discount. |
7 | All or a portion of this security is held at the broker as collateral for open futures contracts. |
8 | The aggregate cost for federal income tax purposes is $6,159,776,737, the aggregate gross unrealized appreciation is $24,423,669 and the aggregate gross unrealized depreciation is $28,293,943, resulting in net unrealized depreciation of $3,870,274. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 19 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities. |
— | Level 2 – significant other observable inputs (including quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities). |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
within level 2. These include investment-grade corporate bonds, U.S. Treasury notes and bonds, and certain non-U.S. sovereign obligations and over-the-counter derivatives. As level 2 financial assets include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
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, 2017 | ||||||||||||||
Asset Backed Securities | $ | – | $ | 1,610,656,657 | $ | 8,951,072 | $ | 1,619,607,729 | ||||||||||
Commercial Mortgage Backed Securities | – | 383,917,981 | – | 383,917,981 | ||||||||||||||
Corporate Bonds | 75,346,161 | 2,069,526,199 | – | 2,144,872,360 | ||||||||||||||
Loan Participations and Assignments | – | 495,176,938 | – | 495,176,938 | ||||||||||||||
Municipal Bonds | – | 361,486,090 | – | 361,486,090 | ||||||||||||||
U.S. Government Agency Obligations | – | 148,370,876 | – | 148,370,876 | ||||||||||||||
Certificates of Deposit | – | 258,086,069 | – | 258,086,069 | ||||||||||||||
Time Deposits | – | 150,000,000 | – | 150,000,000 | ||||||||||||||
U.S. Treasury Bills | – | 594,388,420 | – | 594,388,420 | ||||||||||||||
Total Investment, at value | $ | 75,346,161 | $ | 6,071,609,230 | $ | 8,951,072 | $ | 6,155,906,463 | ||||||||||
Other Financial Instruments, at value | ||||||||||||||||||
Financial Futures Contracts | $ | (3,075,001 | ) | $ | – | $ | – | $ | (3,075,001 | ) | ||||||||
Other Financial Instruments, at value | $ | (3,075,001 | ) | $ | – | $ | – | $ | (3,075,001 | ) |
* | 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, 2017. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 21 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Asset backed Securities | ||||||
Balance as of October 31, 2016 | $ | 12,548,798 | ||||
Purchases | – | |||||
Sales / Paydowns | (1,516,698 | ) | ||||
Realized gains (losses) | 134 | |||||
Change in unrealized appreciation (depreciation) | (2,082,559 | ) | ||||
Amortization | 1,397 | |||||
Transfers from Level 3 | – | |||||
Transfers to Level 3 | – | |||||
Balance as of April 30, 2017 | $ | 8,951,072 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2017 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $6,159,776,737) | $ | 6,155,906,463 | ||||
Cash | 23,057,261 | |||||
Receivables for: | ||||||
Shares sold | 77,418,148 | |||||
Interest | 21,095,245 | |||||
Investments sold | 6,391,281 | |||||
Investment advisory and administrative fee waiver reimbursement | 10,213 | |||||
Other assets | 33,768 | |||||
Total Assets | 6,283,912,379 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 193,041,830 | |||||
Shares redeemed | 6,141,317 | |||||
Investment advisory and administrative fees | 1,202,781 | |||||
Custody and fund accounting fees | 124,871 | |||||
Periodic distributions | 93,159 | |||||
Professional fees | 46,565 | |||||
Futures variation margin on open contracts | 10,943 | |||||
Shareholder servicing fees | 7,565 | |||||
Distributor fees | 6,040 | |||||
Transfer agent fees | 1,742 | |||||
Board of Trustees’ fees | 1,642 | |||||
Accrued expenses and other liabilities | 15,423 | |||||
Total Liabilities | 200,693,878 | |||||
NET ASSETS | $ | 6,083,218,501 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 6,134,101,253 | ||||
Undistributed net investment income | 2,414,742 | |||||
Accumulated net realized loss on investments in securities and futures contracts | (46,352,219 | ) | ||||
Net unrealized appreciation/(depreciation) on investments in securities and futures contracts | (6,945,275 | ) | ||||
Net Assets | $ | 6,083,218,501 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($49,442,562 ÷ 4,858,790 shares outstanding) | $10.18 | |||||
CLASS I SHARES | ||||||
($6,033,775,939 ÷ 593,211,370 shares outstanding) | $10.17 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 23 |
BBH LIMITED DURATION FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2017 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends | $ | 2,458,044 | ||||
Interest and other income | 65,205,327 | |||||
Total Income | 67,663,371 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 7,044,607 | |||||
Custody and fund accounting fees | 210,987 | |||||
Professional fees | 44,167 | |||||
Shareholder servicing fees | 44,061 | |||||
Distributor fees | 35,005 | |||||
Board of Trustees’ fees | 27,231 | |||||
Transfer agent fees | 16,073 | |||||
Miscellaneous expenses | 117,137 | |||||
Total Expenses | 7,539,268 | |||||
Expense offset arrangement | (37,120 | ) | ||||
Investment advisory and administrative fee waiver | (35,443 | ) | ||||
Net Expenses | 7,466,705 | |||||
Net Investment Income | 60,196,666 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 2,460,856 | |||||
Net realized gain on futures contracts | 15,358,794 | |||||
Net realized gain on investments in securities and futures contracts | 17,819,650 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 9,223,446 | |||||
Net change in unrealized appreciation/(depreciation) on futures contracts | (5,724,998 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | 3,498,448 | |||||
Net Realized and Unrealized Gain | 21,318,098 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 81,514,764 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 60,196,666 | $ | 108,238,798 | ||||||
Net realized gain (loss) on investments in securities and futures contracts | 17,819,650 | (21,546,019 | ) | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | 3,498,448 | 20,017,174 | ||||||||
Net increase in net assets resulting from operations | 81,514,764 | 106,709,953 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (449,909 | ) | (8,926,897 | ) | ||||||
Class I | (58,963,660 | ) | (98,807,189 | ) | ||||||
Total dividends and distributions declared | (59,413,569 | ) | (107,734,086 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 3,199,532,528 | 4,430,445,855 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 7,711,725 | 73,615,791 | ||||||||
Cost of shares redeemed* | (1,925,396,217 | ) | (4,434,265,957 | ) | ||||||
Net increase in net assets resulting from share transactions | 1,281,848,036 | 69,795,689 | ||||||||
Total increase in net assets | 1,303,949,231 | 68,771,556 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 4,779,269,270 | 4,710,497,714 | ||||||||
End of period (including undistributed net investment income of $2,414,742 and $1,631,645, respectively) | $ | 6,083,218,501 | $ | 4,779,269,270 |
* | 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, 2017 | 25 |
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2017 (unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.10 | 0.19 | 0.18 | 0.14 | 0.15 | 0.18 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.05 | (0.00 | )2 | (0.17 | ) | (0.01 | ) | (0.06 | ) | 0.14 | |||||||||||||||||
Total income from investment operations | 0.15 | 0.19 | 0.01 | 0.13 | 0.09 | 0.32 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.20 | ) | (0.18 | ) | (0.14 | ) | (0.15 | ) | (0.18 | ) | |||||||||||||||
From net realized gains | �� | – | – | – | (0.03 | ) | (0.03 | ) | (0.04 | ) | |||||||||||||||||
Total dividends and distributions | (0.10 | ) | (0.20 | ) | (0.18 | ) | (0.17 | ) | (0.18 | ) | (0.22 | ) | |||||||||||||||
Net asset value, end of period | $ | 10.18 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | |||||||||||||||
Total return | 1.49 | %3 | 1.90 | % | 0.10 | % | 1.32 | % | 0.82 | % | 3.13 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $49 | $42 | $ | 2,557 | $ | 2,625 | $ | 2,170 | $ | 1,776 | |||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.61 | %4 | 0.49 | % | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | % | |||||||||||||||
Fee waiver | 0.16 | %4,5 | 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 | 0.45 | %4 | 0.48 | % | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | % | |||||||||||||||
Ratio of net investment income to average net assets | 2.04 | %4 | 1.91 | % | 1.75 | % | 1.36 | % | 1.44 | % | 1.75 | % | |||||||||||||||
Portfolio turnover rate | 27 | %3 | 53 | % | 46 | % | 35 | % | 48 | % | 38 | % |
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, 2017, reflects fees reduced as result of voluntary operating expense limitation of the share class to 0.35%, previously 0.48% until March 23, 2017. 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 Advisor. For the six months ended April 30, 2017 and for the year ended October 31, 2016, the waived fees were $35,443 and $45,079, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2017 (unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.11 | 0.22 | 0.20 | 0.16 | 0.17 | 0.20 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.04 | (0.01 | ) | (0.17 | ) | (0.01 | ) | (0.06 | ) | 0.14 | |||||||||||||||||
Total income from investment operations | 0.15 | 0.21 | 0.03 | 0.15 | 0.11 | 0.34 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.22 | ) | (0.20 | ) | (0.16 | ) | (0.17 | ) | (0.20 | ) | |||||||||||||||
From net realized gains | – | – | – | (0.03 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.22 | ) | (0.20 | ) | (0.19 | ) | (0.20 | ) | (0.24 | ) | |||||||||||||||
Net asset value, end of period | $ | 10.17 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | |||||||||||||||
Total return | 1.48 | %2 | 2.13 | % | 0.30 | % | 1.52 | % | 1.01 | % | 3.31 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 6,034 | $ | 4,737 | $ | 2,153 | $ | 2,547 | $ | 1,448 | $ | 1,165 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 0.27 | %3 | 0.27 | % | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | |||||||||||||||
Expense offset arrangement | 0.00 | %3,4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 0.27 | %3 | 0.27 | % | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | |||||||||||||||
Ratio of net investment income to average net assets | 2.22 | %3 | 2.21 | % | 1.94 | % | 1.56 | % | 1.63 | % | 1.93 | % | |||||||||||||||
Portfolio turnover rate | 27 | %2 | 53 | % | 46 | % | 35 | % | 48 | % | 38 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Not annualized. |
3 | Annualized. |
4 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 27 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2017 (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, 2017, 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. |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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 | 1,250 | June 2017 | $ | 270,761,720 | $ | 270,371,094 | $ | (390,626 | ) | |||||||||||||
U.S. Treasury 5-Year Notes | 2,700 | June 2017 | 319,696,875 | 317,460,938 | (2,235,937 | ) | ||||||||||||||||
U.S. Treasury 10-Year Notes | 350 | June 2017 | 44,001,563 | 43,553,125 | (448,438 | ) | ||||||||||||||||
$ | (3,075,001 | ) |
financial statements april 30, 2017 | 29 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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. | $ | – | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. | $ | (3,075,001 | )* | ||||||||||||
Total | $ | – | $ | (3,075,001 | )* |
* | Includes cumulative depreciation 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 | $ | 15,358,794 | ||||
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives | ||||||
Futures Contracts | $ | (5,724,998 | ) |
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% |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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. |
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 april 30, 2017 | 31 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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. |
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 $449,909 and $58,963,660 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2017. |
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2016: | $ | 107,734,086 | $ | – | $ | 107,734,086 | $ | – | $ | 107,734,086 | ||||||||||||||
2015: | 94,303,933 | – | 94,303,933 | – | 94,303,933 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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) | ||||||||||||||||||||||||||
2016: | $ | 1,631,645 | $ | – | $ | 1,631,645 | $ | (61,521,827 | ) | $ | (2,650,042 | ) | $ | (10,443,723 | ) | $ | (72,983,947 | ) | ||||||||||||||
2015: | 1,490,762 | – | 1,490,762 | (40,745,890 | ) | (2,243,789 | ) | (30,460,897 | ) | (71,959,814 | ) |
I. | Use of Estimates. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from these estimates. |
financial statements april 30, 2017 | 33 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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 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, 2017, the Fund incurred $7,044,607 for services under the Agreement. |
B. | Investment Advisory and Administrative Fee Waivers. Effective March 24, 2017 the Investment Adviser has voluntarily agreed to waive fees and/or reimburse expanses for the Fund’s Class N shares in order to limit total annual fund operating expenses of Class N to 0.35%. Effective December 29, 2015, the Investment Adviser had 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 the six months ended April 30, 2017, the Investment Adviser waived fees in the amount of $35,443 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, 2017, Class N shares of the Fund incurred $44,061 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, 2017, the Fund incurred $210,987 in custody and fund accounting fees. These fees for the Fund were reduced by $37,120 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 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2017, was $1,571. This amount is presented under line item “Custody and fund accounting fees” in the Statements of Operations. | ||
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, 2017, the Fund incurred $27,231 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2017, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $1,377,362,609 and $1,173,263,024, 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, 2017 (unaudited) | For the year ended October 31, 2016 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 1,864,164 | $ | 18,943,745 | 11,203,221 | $ | 113,390,603 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 29,791 | 302,635 | 855,227 | 8,645,267 | |||||||||||||||
Shares redeemed | (1,229,283 | ) | (12,478,861 | ) | (259,973,297 | ) | (2,623,811,320 | ) | |||||||||||
Net increase (decrease) | 664,672 | $ | 6,767,519 | (247,914,849 | ) | $ | (2,501,775,450 | ) | |||||||||||
Class I | |||||||||||||||||||
Shares sold | 313,334,327 | $ | 3,180,588,783 | 427,925,868 | $ | 4,317,055,252 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 729,699 | 7,409,090 | 6,454,769 | 64,970,524 | |||||||||||||||
Shares redeemed | (188,450,541 | ) | (1,912,917,356 | ) | (179,053,181 | ) | (1,810,454,637 | ) | |||||||||||
Net increase | 125,613,485 | $ | 1,275,080,517 | 255,327,456 | $ | 2,571,571,139 |
financial statements april 30, 2017 | 35 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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: |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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. | Recent Pronouncements. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended existing rules (together, “final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the financial statements and related disclosures. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2017 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, 2017 | 37 |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2017 (unaudited)
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2017 (unaudited)
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,015 | $ | 2.25 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,023 | $ | 2.26 |
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,015 | $ | 1.35 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,023 | $ | 1.35 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.45% and 0.27% for Class N and I shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (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, 2017 | 39 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2017 (unaudited)
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 41 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 43 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
agree to higher fees than it would in the case of unaffiliated providers. BBH acting in its capacity as the Fund’s administrator is the primary valuation agent of the Fund. BBH values securities and assets in the Fund according to the Fund’s valuation policies. Because the Investment Adviser and BBH’s advisory and administrative fees are calculated by reference to a Fund’s net assets, BBH and its affiliates may have an incentive to seek to overvalue certain assets.
financial statements april 30, 2017 | 45 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2017 (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 1-800-575-1265 | 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, 2017 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Municipal Bonds | $ | 81,865,302 | 99.4 | % | ||||||
Cash and Other Assets in Excess of Liabilities | 467,589 | 0.6 | ||||||||
NET ASSETS | $ | 82,332,891 | 100.0 | % |
U.S. $ Value | Percent of Total Investments | |||||||||
AAA | $ | 17,581,425 | 21.5 | % | ||||||
AA | 27,462,388 | 33.5 | ||||||||
A | 29,437,389 | 36.0 | ||||||||
BBB | 7,384,100 | 9.0 | ||||||||
TOTAL INVESTMENTS | $ | 81,865,302 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (99.4%) | ||||||||||||||||||
Alabama (0.4%) | ||||||||||||||||||
$ 290,000 | Alabama 21st Century Authority, Revenue Bonds | 06/01/21 | 5.000 | % | $ | 329,138 | ||||||||||||
Total Alabama | 329,138 | |||||||||||||||||
Arizona (1.3%) | ||||||||||||||||||
475,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/19 | 5.250 | 520,757 | ||||||||||||||
55,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/22 | 5.250 | 64,041 | ||||||||||||||
390,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/32 | 5.000 | 457,724 | ||||||||||||||
Total Arizona | 1,042,522 | |||||||||||||||||
California (11.9%) | ||||||||||||||||||
2,000,000 | Anaheim City School District, General Obligation Bonds, AGM, NPFG1 | 08/01/29 | 0.000 | 1,306,160 | ||||||||||||||
1,000,000 | California Statewide Communities Development Authority, Revenue Bonds2 | 11/01/33 | 2.625 | 1,026,500 | ||||||||||||||
1,000,000 | Coast Community College District, General Obligation Bonds, AGM1 | 08/01/27 | 0.000 | 737,090 | ||||||||||||||
1,000,000 | Golden State Tobacco Securitization Corp., Revenue Bonds, AGM1 | 06/01/25 | 0.000 | 802,660 | ||||||||||||||
1,100,000 | La Mesa-Spring Valley School District, General Obligation Bonds, NPFG1 | 08/01/26 | 0.000 | 815,760 | ||||||||||||||
25,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/19 | 5.250 | 27,127 | ||||||||||||||
700,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/22 | 5.250 | 800,842 | ||||||||||||||
30,000 | Long Beach Bond Finance Authority, Revenue Bonds2 | 11/15/27 | 2.146 | 28,385 | ||||||||||||||
500,000 | Monterey Peninsula Community College District, General Obligation Bonds1 | 08/01/26 | 0.000 | 394,145 | ||||||||||||||
1,000,000 | Santa Ana Unified School District, General Obligation Bonds, NPFG1 | 08/01/24 | 0.000 | 819,310 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 3 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
California (continued) | ||||||||||||||||||
$ 1,500,000 | State of California, General Obligation Bonds | 08/01/24 | 5.000 | % | $ | 1,811,025 | ||||||||||||
1,000,000 | Ukiah Unified School District, General Obligation Bonds, NPFG1 | 08/01/24 | 0.000 | 846,110 | ||||||||||||||
500,000 | Ukiah Unified School District, General Obligation Bonds, NPFG1 | 08/01/25 | 0.000 | 405,405 | ||||||||||||||
Total California | 9,820,519 | |||||||||||||||||
Connecticut (1.9%) | ||||||||||||||||||
345,000 | Connecticut Housing Finance Authority, Revenue Bonds | 05/15/22 | 3.250 | 358,027 | ||||||||||||||
125,000 | Connecticut Housing Finance Authority, Revenue Bonds | 11/15/22 | 3.250 | 129,231 | ||||||||||||||
140,000 | Connecticut Housing Finance Authority, Revenue Bonds | 11/15/23 | 3.450 | 144,881 | ||||||||||||||
190,000 | State of Connecticut, General Obligation Bonds, AMBAC2 | 06/01/17 | 3.701 | 190,319 | ||||||||||||||
725,000 | State of Connecticut, General Obligation Bonds2 | 03/01/25 | 1.890 | 719,012 | ||||||||||||||
Total Connecticut | 1,541,470 | |||||||||||||||||
Florida (3.1%) | ||||||||||||||||||
1,000,000 | County of Broward Airport System, Revenue Bonds | 10/01/25 | 5.000 | 1,127,930 | ||||||||||||||
1,000,000 | County of Hillsborough Solid Waste & Resource Recovery, Revenue Bonds | 09/01/24 | 5.000 | 1,160,600 | ||||||||||||||
35,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/25 | 5.000 | 39,599 | ||||||||||||||
10,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/26 | 5.000 | 11,245 | ||||||||||||||
250,000 | Pinellas County Health Facilities Authority, Revenue Bonds, NPFG2 | 11/15/23 | 1.419 | 238,705 | ||||||||||||||
Total Florida | 2,578,079 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Georgia (3.0%) | ||||||||||||||||||
$ 2,000,000 | State of Georgia, General Obligation Bonds | 12/01/24 | 5.000 | % | $ | 2,448,260 | ||||||||||||
Total Georgia | 2,448,260 | |||||||||||||||||
Illinois (2.5%) | ||||||||||||||||||
75,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 3.000 | 76,267 | ||||||||||||||
360,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 4.000 | 371,938 | ||||||||||||||
100,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 5.000 | 104,942 | ||||||||||||||
100,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/17 | 5.000 | 100,285 | ||||||||||||||
110,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/19 | 5.250 | 114,501 | ||||||||||||||
320,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/22 | 5.000 | 336,778 | ||||||||||||||
300,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/23 | 5.250 | 312,144 | ||||||||||||||
165,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/24 | 5.250 | 171,661 | ||||||||||||||
460,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/23 | 5.500 | 520,614 | ||||||||||||||
Total Illinois | 2,109,130 | |||||||||||||||||
Kansas (0.4%) | ||||||||||||||||||
200,000 | City of La Cygne, Revenue Bonds, NPFG2 | 04/15/27 | 1.760 | 181,364 | ||||||||||||||
100,000 | City of St. Marys, Revenue Bonds, NPFG2 | 04/15/32 | 1.760 | 91,548 | ||||||||||||||
100,000 | City of Wamego, Revenue Bonds, NPFG2 | 04/15/32 | 1.820 | 89,102 | ||||||||||||||
Total Kansas | 362,014 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 5 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Maryland (3.0%) | ||||||||||||||||||
$ 1,000,000 | County of Baltimore, General Obligation Bonds | 08/01/23 | 5.000 | % | $ | 1,200,600 | ||||||||||||
1,000,000 | County of Howard, General Obligation Bonds | 02/15/27 | 5.000 | 1,248,210 | ||||||||||||||
Total Maryland | 2,448,810 | |||||||||||||||||
Massachusetts (4.2%) | ||||||||||||||||||
300,000 | Commonwealth of Massachusetts, General Obligation Bonds, AGM2 | 11/01/19 | 1.855 | 303,792 | ||||||||||||||
100,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM2 | 06/01/17 | 3.531 | 100,149 | ||||||||||||||
1,500,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM2 | 06/01/22 | 3.741 | 1,572,855 | ||||||||||||||
500,000 | Massachusetts Clean Water Trust, Revenue Bonds2 | 08/01/23 | 2.961 | 504,685 | ||||||||||||||
1,000,000 | Massachusetts Housing Finance Agency, Revenue Bonds | 12/01/21 | 2.500 | 1,006,680 | ||||||||||||||
Total Massachusetts | 3,488,161 | |||||||||||||||||
Michigan (3.8%) | ||||||||||||||||||
220,000 | Detroit City School District, General Obligation Bonds, FGIC | 05/01/20 | 6.000 | 246,545 | ||||||||||||||
350,000 | Detroit City School District, General Obligation Bonds | 05/01/23 | 5.000 | 396,820 | ||||||||||||||
95,000 | Detroit City School District, General Obligation Bonds, BHAC, FGIC | 05/01/25 | 5.250 | 107,390 | ||||||||||||||
90,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/27 | 5.250 | 106,861 | ||||||||||||||
325,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/29 | 6.000 | 398,362 | ||||||||||||||
1,510,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/30 | 5.250 | 1,804,963 | ||||||||||||||
105,000 | Michigan Finance Authority, Revenue Bonds | 05/01/19 | 5.000 | 112,195 | ||||||||||||||
Total Michigan | 3,173,136 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Missouri (0.7%) | ||||||||||||||||||
$ 300,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC2 | 06/01/31 | 1.362 | % | $ | 269,085 | ||||||||||||
310,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC2 | 06/01/31 | 1.362 | 278,641 | ||||||||||||||
Total Missouri | 547,726 | |||||||||||||||||
Nebraska (0.5%) | ||||||||||||||||||
355,000 | Central Plains Energy Project, Revenue Bonds | 09/01/27 | 5.000 | 392,836 | ||||||||||||||
Total Nebraska | �� | 392,836 | ||||||||||||||||
New Jersey (18.6%) | ||||||||||||||||||
2,000,000 | New Jersey Economic Development Authority, Revenue Bonds | 06/15/23 | 5.000 | 2,132,060 | ||||||||||||||
1,250,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/19 | 5.000 | 1,325,787 | ||||||||||||||
1,125,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/20 | 5.000 | 1,211,839 | ||||||||||||||
200,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/21 | 5.000 | 217,702 | ||||||||||||||
300,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds | 12/15/23 | 5.500 | 331,980 | ||||||||||||||
1,150,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds1 | 12/15/26 | 0.000 | 734,965 | ||||||||||||||
1,850,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds1 | 12/15/30 | 0.000 | 923,261 | ||||||||||||||
1,200,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG2 | 01/01/30 | 1.575 | 1,101,084 | ||||||||||||||
925,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG2 | 01/01/30 | 1.610 | 848,751 | ||||||||||||||
650,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG2 | 01/01/30 | 1.715 | 596,421 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 7 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New Jersey (continued) | ||||||||||||||||||
$ 7,055,000 | Tobacco Settlement Financing Corp., Revenue Bonds1 | 06/01/41 | 0.000 | % | $ | 1,870,422 | ||||||||||||
15,955,000 | Tobacco Settlement Financing Corp., Revenue Bonds1 | 06/01/41 | 0.000 | 4,067,727 | ||||||||||||||
Total New Jersey | 15,361,999 | |||||||||||||||||
New York (16.1%) | ||||||||||||||||||
700,000 | City of New York, General Obligation Bonds3 | 05/01/17 | 0.890 | 700,000 | ||||||||||||||
900,000 | New York City Transitional Finance Authority Future Tax Secured, Revenue Bonds3 | 05/01/17 | 0.910 | 900,000 | ||||||||||||||
400,000 | New York City Water & Sewer System, Revenue Bonds3 | 05/01/17 | 0.870 | 400,000 | ||||||||||||||
1,000,000 | New York State Dormitory Authority, Revenue Bonds | 02/15/25 | 5.000 | 1,210,400 | ||||||||||||||
120,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 12/01/23 | 2.488 | 113,568 | ||||||||||||||
700,000 | New York State Energy Research & Development Authority, Revenue Bonds, FGIC2 | 06/01/25 | 2.488 | 663,505 | ||||||||||||||
1,865,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 12/01/25 | 2.478 | 1,781,090 | ||||||||||||||
700,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 12/01/25 | 2.481 | 668,504 | ||||||||||||||
305,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 12/01/26 | 2.478 | 291,709 | ||||||||||||||
600,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 03/01/27 | 2.457 | 571,002 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New York (continued) | ||||||||||||||||||
$ 1,890,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 07/01/27 | 2.456 | % | $ | 1,766,868 | ||||||||||||
110,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 07/01/27 | 2.478 | 102,834 | ||||||||||||||
1,070,000 | New York State Energy Research & Development Authority, Revenue Bonds, XLCA2 | 07/01/29 | 2.488 | 1,009,746 | ||||||||||||||
2,000,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2 | 05/01/34 | 1.610 | 1,846,926 | ||||||||||||||
1,000,000 | Port Authority of New York & New Jersey, Revenue Bonds | 10/15/27 | 5.000 | 1,200,170 | ||||||||||||||
Total New York | 13,226,322 | |||||||||||||||||
North Carolina (2.1%) | ||||||||||||||||||
1,405,000 | County of Mecklenburg, General Obligation Bonds | 04/01/24 | 5.000 | 1,705,080 | ||||||||||||||
Total North Carolina | 1,705,080 | |||||||||||||||||
Ohio (0.9%) | ||||||||||||||||||
400,000 | County of Montgomery, Revenue Bonds3 | 05/01/17 | 0.880 | 400,000 | ||||||||||||||
300,000 | Ohio Higher Educational Facility Commission, Revenue Bonds3 | 05/01/17 | 0.880 | 300,000 | ||||||||||||||
Total Ohio | 700,000 | |||||||||||||||||
Pennsylvania (4.7%) | ||||||||||||||||||
150,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/22 | 5.000 | 169,285 | ||||||||||||||
50,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/23 | 5.000 | 57,241 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 9 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Pennsylvania (continued) | ||||||||||||||||||
$ 100,000 | Hospitals & Higher Education Facilities Authority of Philadelphia, Revenue Bonds3 | 05/01/17 | 0.860 | % | $ | 100,000 | ||||||||||||
1,000,000 | School District of Philadelphia, General Obligation Bonds | 09/01/21 | 5.000 | 1,076,660 | ||||||||||||||
215,000 | School District of Philadelphia, General Obligation Bonds, AGM, FGIC | 06/01/24 | 5.000 | 241,722 | ||||||||||||||
1,000,000 | School District of Philadelphia, General Obligation Bonds | 09/01/24 | 5.000 | 1,118,780 | ||||||||||||||
1,000,000 | School District of Philadelphia, General Obligation Bonds | 09/01/27 | 5.000 | 1,124,380 | ||||||||||||||
Total Pennsylvania | 3,888,068 | |||||||||||||||||
South Carolina (2.0%) | ||||||||||||||||||
1,815,000 | County of Greenwood, Revenue Bonds, AGM2 | 10/01/34 | 2.232 | 1,642,542 | ||||||||||||||
Total South Carolina | 1,642,542 | |||||||||||||||||
South Dakota (0.6%) | ||||||||||||||||||
430,000 | Educational Enhancement Funding Corp., Revenue Bonds | 06/01/25 | 5.000 | 479,218 | ||||||||||||||
Total South Dakota | 479,218 | |||||||||||||||||
Texas (8.0%) | ||||||||||||||||||
1,450,000 | Aldine Independent School District, General Obligation Bonds | 02/15/26 | 5.000 | 1,768,725 | ||||||||||||||
325,000 | City of Houston Airport System, Revenue Bonds, AGM2 | 07/01/30 | 1.940 | 300,952 | ||||||||||||||
800,000 | City of Houston Airport System, Revenue Bonds, AGM2 | 07/01/30 | 1.940 | 740,958 | ||||||||||||||
475,000 | City of Houston Airport System, Revenue Bonds, XLCA2 | 07/01/32 | 1.986 | 438,933 | ||||||||||||||
550,000 | City of Houston Airport System, Revenue Bonds, XLCA2 | 07/01/32 | 1.986 | 508,296 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Texas (continued) | ||||||||||||||||||
$ 750,000 | City of Houston Airport System, Revenue Bonds, XLCA2 | 07/01/32 | 1.981 | % | $ | 694,146 | ||||||||||||
1,000,000 | Dallas Love Field, Revenue Bonds | 11/01/25 | 5.000 | 1,169,410 | ||||||||||||||
380,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/19 | 5.250 | 412,847 | ||||||||||||||
95,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/20 | 5.250 | 105,508 | ||||||||||||||
400,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/21 | 5.250 | 451,768 | ||||||||||||||
Total Texas | 6,591,543 | |||||||||||||||||
Virginia (3.0%) | ||||||||||||||||||
2,000,000 | County of Arlington, General Obligation Bonds | 08/15/25 | 5.000 | 2,464,440 | ||||||||||||||
Total Virginia | 2,464,440 | |||||||||||||||||
Washington (3.0%) | ||||||||||||||||||
500,000 | Port of Seattle, Revenue Bonds | 06/01/23 | 5.000 | 580,155 | ||||||||||||||
425,000 | Port of Seattle, Revenue Bonds | 06/01/27 | 3.750 | 435,208 | ||||||||||||||
180,000 | Washington State Housing Finance Commission, Revenue Bonds, FHLMC, FNMA, GNMA | 12/01/21 | 2.900 | 185,933 | ||||||||||||||
1,030,000 | Washington State Housing Finance Commission, Revenue Bonds | 12/01/22 | 2.600 | 1,047,974 | ||||||||||||||
185,000 | Washington State Housing Finance Commission, Revenue Bonds, FHLMC, FNMA, GNMA | 12/01/22 | 3.050 | 191,976 | ||||||||||||||
Total Washington | 2,441,246 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 11 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Wisconsin (3.7%) | ||||||||||||||||||
$ 280,000 | County of Milwaukee Airport Revenue, Revenue Bonds | 12/01/28 | 5.250 | % | $ | 318,959 | ||||||||||||
1,000,000 | Public Finance Authority, Revenue Bonds2 | 07/01/29 | 2.000 | 994,170 | ||||||||||||||
1,450,000 | State of Wisconsin, General Obligation Bonds | 05/01/25 | 5.000 | 1,769,914 | ||||||||||||||
Total Wisconsin | 3,083,043 | |||||||||||||||||
Total Municipal Bonds (Identified cost $80,677,650) | 81,865,302 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $80,677,650)4 | 99.4 | % | $ | 81,865,302 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 0.6 | % | 467,589 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 82,332,891 |
1 | Security issued with zero coupon. Income is recognized through accretion of discount. |
2 | Variable rate instrument. Interest rates change on specific dates (such as coupon or interest payment date). The yield shown represents the April 30, 2017 coupon or interest rate. |
3 | 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, 2017. |
4 | The aggregate cost for federal income tax purposes is $80,677,650, the aggregate gross unrealized appreciation is $1,493,108, and the aggregate gross unrealized depreciation is $305,456, resulting in net unrealized appreciation of $1,187,652. |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (unaudited)
— | Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities. |
— | Level 2 – significant other observable inputs (including quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities). |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 13 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2017 (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, 2017 | ||||||||||||||
Municipal Bonds** | $ | – | $ | 81,865,302 | $ | – | $ | 81,865,302 | ||||||||||
Investments, at value | $ | – | $ | 81,865,302 | $ | – | $ | 81,865,302 |
* | 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, 2017. |
** | 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, 2017 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $80,677,650) | $ | 81,865,302 | ||||
Cash | 211,303 | |||||
Receivables for: | ||||||
Investments sold | 740,282 | |||||
Interest | 579,963 | |||||
Shares sold | 288,138 | |||||
Investment advisory and administrative fee waiver reimbursement | 16,220 | |||||
Prepaid assets | 11,626 | |||||
Total Assets | 83,712,834 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 1,201,130 | |||||
Shares redeemed | 96,377 | |||||
Professional fees | 32,656 | |||||
Investment advisory and administrative fees | 24,906 | |||||
Custody and fund accounting fees | 9,817 | |||||
Distributor fees | 3,211 | |||||
Shareholder servicing fees | 2,988 | |||||
Transfer agent fees | 2,031 | |||||
Board of Trustees’ fees | 1,355 | |||||
Accrued expenses and other liabilities | 5,472 | |||||
Total Liabilities | 1,379,943 | |||||
NET ASSETS | $ | 82,332,891 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 80,973,320 | ||||
Distributions in excess of net investment income | (5 | ) | ||||
Accumulated net realized gain on investments in securities | 171,924 | |||||
Net unrealized appreciation/(depreciation) on investments in securities | 1,187,652 | |||||
Net Assets | $ | 82,332,891 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($19,229,039 ÷ 1,870,868 shares outstanding) | $10.28 | |||||
CLASS I SHARES | ||||||
($63,103,852 ÷ 6,145,916 shares outstanding) | $10.27 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 15 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2017 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest and other income | $ | 958,269 | ||||
Total Income | 958,269 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 162,107 | |||||
Professional fees | 31,148 | |||||
Board of Trustees’ fees | 27,208 | |||||
Custody and fund accounting fees | 21,825 | |||||
Shareholder servicing fees | 20,663 | |||||
Shareholder report fees | 17,357 | |||||
Registration fees | 17,279 | |||||
Transfer agent fees | 14,569 | |||||
Distributor fees | 9,084 | |||||
Miscellaneous expenses | 4,396 | |||||
Total Expenses | 325,636 | |||||
Investment advisory and administrative fee waiver | (107,290 | ) | ||||
Expense offset arrangement | (214 | ) | ||||
Net Expenses | 218,132 | |||||
Net Investment Income | 740,137 | |||||
NET REALIZED AND UNREALIZED GAIN/(LOSS): | ||||||
Net realized gain on investments in securities | 172,704 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (1,458,357 | ) | ||||
Net Realized and Unrealized Loss | (1,285,653 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | $ | (545,516 | ) |
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, 2017 (unaudited) | For the year ended October 31, 2016 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 740,137 | $ | 1,682,680 | ||||||
Net realized gain on investments in securities | 172,704 | 1,254,006 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (1,458,357 | ) | 1,415,612 | |||||||
Net increase (decrease) in net assets resulting from operations | (545,516 | ) | 4,352,298 | |||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (175,712 | ) | (421,806 | ) | ||||||
Class I | (564,571 | ) | (1,260,733 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (307,076 | ) | (54,688 | ) | ||||||
Class I | (842,969 | ) | (143,942 | ) | ||||||
Total dividends and distributions declared | (1,890,328 | ) | (1,881,169 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 8,811,669 | 15,152,028 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 734,546 | 720,752 | ||||||||
Proceeds from short-term redemption fees | 146 | 542 | ||||||||
Cost of shares redeemed | (14,276,042 | ) | (20,695,368 | ) | ||||||
Net decrease in net assets resulting from share transactions | (4,729,681 | ) | (4,822,046 | ) | ||||||
Total (decrease) in net assets | (7,165,525 | ) | (2,350,917 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 89,498,416 | 91,849,333 | ||||||||
End of period (including distributions in excess of net investment income of $5 and undistributed net investment income of $141, respectively) | $ | 82,332,891 | $ | 89,498,416 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2017 | 17 |
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, 2017 (unaudited) | For the years ended October 31, | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||||
2016 | 2015 | ||||||||||||||||
Net asset value, beginning of period | $ | 10.56 | $ | 10.29 | $ | 10.30 | $ | 10.00 | |||||||||
Income from investment operations: | |||||||||||||||||
Net investment income1 | 0.09 | 0.18 | 0.15 | 0.09 | |||||||||||||
Net realized and unrealized gain (loss) | (0.13 | ) | 0.29 | 0.08 | 0.29 | ||||||||||||
Total income (loss) from investment operations | (0.04 | ) | 0.47 | 0.23 | 0.38 | ||||||||||||
Less dividends and distributions: | |||||||||||||||||
From net investment income | (0.09 | ) | (0.18 | ) | (0.16 | ) | (0.08 | ) | |||||||||
From net realized gains | (0.15 | ) | (0.02 | ) | (0.08 | ) | – | ||||||||||
Total dividends and distributions | (0.24 | ) | (0.20 | ) | (0.24 | ) | (0.08 | ) | |||||||||
Short-term redemption fees1 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | – | ||||||||||
Net asset value, end of period | $ | 10.28 | $ | 10.56 | $ | 10.29 | $ | 10.30 | |||||||||
Total return | (0.40 | )%3 | 4.64 | % | 2.29 | % | 3.82 | %3 | |||||||||
Ratios/Supplemental data: | |||||||||||||||||
Net assets, end of period (in millions) | $19 | $23 | $26 | $1 | |||||||||||||
Ratio of expenses to average net assets before reductions | 1.10 | %4 | 1.03 | % | 1.10 | % | 8.78 | %5 | |||||||||
Fee waiver | 0.45 | %4,6 | 0.38 | %6 | 0.45 | %6 | 8.13 | %5,6 | |||||||||
Expense offset arrangement | 0.00 | %4,7 | 0.00 | %7 | 0.00 | %7 | 0.00 | %5,7 | |||||||||
Ratio of expenses to average net assets after reductions | 0.65 | %4 | 0.65 | % | 0.65 | % | 0.65 | %5 | |||||||||
Ratio of net investment income to average net assets | 1.71 | %4 | 1.73 | % | 1.43 | % | 1.43 | %5 | |||||||||
Portfolio turnover rate | 74 | %3 | 77 | % | 142 | % | 91 | %3 | |||||||||
Portfolio turnover rate8 | 39 | %3 | 40 | % | 83 | % | 56 | %3 |
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 April 30, 2017, the years ended October 31, 2016 and 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 period beginning on April 1, 2014 and will terminate on March 1, 2018, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2017, the years ended October 31, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $45,945, $92,199, $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, 2017 (unaudited) | For the years ended October 31, | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | ||||||||||||||||
2016 | 2015 | |||||||||||||||||
Net asset value, beginning of period | $ | 10.55 | $ | 10.28 | $ | 10.30 | $ | 10.00 | ||||||||||
Income from investment operations: | ||||||||||||||||||
Net investment income1 | 0.09 | 0.20 | 0.18 | 0.09 | ||||||||||||||
Net realized and unrealized gain (loss) | (0.12 | ) | 0.29 | 0.06 | 0.30 | |||||||||||||
Total income (loss) from investment operations | (0.03 | ) | 0.49 | 0.24 | 0.39 | |||||||||||||
Less dividends and distributions: | ||||||||||||||||||
From net investment income | (0.10 | ) | (0.20 | ) | (0.18 | ) | (0.09 | ) | ||||||||||
From net realized gains | (0.15 | ) | (0.02 | ) | (0.08 | ) | – | |||||||||||
Total dividends and distributions | (0.25 | ) | (0.22 | ) | (0.26 | ) | (0.09 | ) | ||||||||||
Short-term redemption fees1 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | – | |||||||||||
Net asset value, end of period | $ | 10.27 | $ | 10.55 | $ | 10.28 | $ | 10.30 | ||||||||||
Total return | (0.32 | )%3 | 4.80 | % | 2.33 | % | 3.89 | %3 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||
Net assets, end of period (in millions) | $63 | $66 | $66 | $52 | ||||||||||||||
Ratio of expenses to average net assets before reductions | 0.70 | %4 | 0.68 | % | 0.78 | % | 0.88 | %5 | ||||||||||
Fee waiver | 0.20 | %4,6 | 0.18 | %6 | 0.28 | %6 | 0.38 | %5,6 | ||||||||||
Expense offset arrangement | 0.00 | %4,7 | 0.00 | %7 | 0.00 | %7 | 0.00 | %5,7 | ||||||||||
Ratio of expenses to average net assets after reductions | 0.50 | %4 | 0.50 | % | 0.50 | % | 0.50 | %5 | ||||||||||
Ratio of net investment income to average net assets | 1.87 | %4 | 1.88 | % | 1.72 | % | 1.49 | %5 | ||||||||||
Portfolio turnover rate | 74 | %3 | 77 | % | 142 | % | 91 | %3 | ||||||||||
Portfolio turnover rate8 | 39 | %3 | 40 | % | 83 | % | 56 | %3 |
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 April 30, 2017, the years ended October 31, 2016 and 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 period beginning on April 1, 2014 and will terminate on March 1, 2018, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2017, the years ended October 31, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $61,345, $121,168, $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, 2017 | 19 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2017 (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, 2017, 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. |
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 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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. | 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. |
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, 2017 | 21 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
on the ex-dividend date. The Fund declared dividends in the amount of $482,788 and $1,407,540 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2017. 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 exempt income | Tax return of capital | Total distributions paid | |||||||||||||||||||||||
2016: | $ | 474,909 | $ | 124,475 | $ | 599,384 | $ | 1,281,785 | $ | – | $ | 1,881,169 | ||||||||||||||||
2015: | 609,512 | – | 609,512 | 1,028,073 | – | 1,637,585 |
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) | ||||||||||||||||||||||||||
2016: | $ | 638,250 | $ | 511,015 | $ | 1,149,265 | $ | – | $ | – | $ | 2,646,009 | $ | 3,795,274 | ||||||||||||||||||
2015: | 74,098 | 123,762 | 197,860 | – | – | 1,230,397 | 1,428,257 |
F. | Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
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 (“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, 2017, the Fund incurred $162,107 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, 2018, 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, 2017, the Investment Adviser waived fees in the amount of $45,945 and $61,345 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% of Class N shares’ average daily net assets. For the six months ended April 30, 2017, Class N shares of the Fund incurred $20,663 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, 2017, the Fund incurred $21,825 in custody and fund accounting fees. These fees for the Fund were reduced by $214 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 |
financial statements april 30, 2017 | 23 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (unaudited)
overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2017, was $446. This amount is presented under line item “Custody and Fund Accounting Fees” in the Statement of Operations.
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, 2017, the Fund incurred $27,208 in independent Trustee compensation and reimbursements. |
F. | Affiliated Ownership. As of April 30, 2017, BBH is the owner of record of 54% of the total outstanding shares of the Fund. |
4. | Investment Transactions. For the six months ended April 30, 2017, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, was $60,060,409 and $67,506,541, 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, 2017 (unaudited) | For the year ended October 31, 2016 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 127,707 | $ | 1,305,497 | 456,024 | $ | 4,784,482 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 40,057 | 406,613 | 36,145 | 378,154 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 118 | N/A | 105 | |||||||||||||||
Shares redeemed | (494,199 | ) | (5,047,205 | ) | (817,062 | ) | (8,568,577 | ) | |||||||||||
Net decrease | (326,435 | ) | $ | (3,334,977 | ) | (324,893 | ) | $ | (3,405,836 | ) | |||||||||
Class I | |||||||||||||||||||
Shares sold | 735,057 | $ | 7,506,172 | 989,906 | $ | 10,367,546 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 32,311 | 327,933 | 32,728 | 342,598 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 28 | N/A | 437 | |||||||||||||||
Shares redeemed | (902,934 | ) | (9,228,837 | ) | (1,155,115 | ) | (12,126,791 | ) | |||||||||||
Net decrease | (135,566 | ) | $ | (1,394,704 | ) | (132,481 | ) | $ | (1,416,210 | ) |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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, 2017 | 25 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2017 (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. | Recent pronouncements. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended existing rules (together, “final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the financial statements and related disclosures. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2017 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, 2017 (unaudited)
financial statements april 30, 2017 | 27 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2017 (unaudited)
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 996 | $ | 3.22 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,022 | $ | 3.26 |
Beginning Account Value November 1, 2016 | Ending Account Value April 30, 2017 | Expenses Paid During Period November 1, 2016 to April 30, 20171 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 997 | $ | 2.48 | ||||||||
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 181/365 (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, 2017 (unaudited)
financial statements april 30, 2017 | 29 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 31 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2017 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST
April 30, 2017 (unaudited)
financial statements april 30, 2017 | 33 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2017 (unaudited)
agree to higher fees than it would in the case of unaffiliated providers. BBH acting in its capacity as the Fund’s administrator is the primary valuation agent of the Fund. BBH values securities and assets in the Fund according to the Fund’s valuation policies. Because the Investment Adviser and BBH’s advisory and administrative fees are calculated by reference to a Fund’s net assets, BBH and its affiliates may have an incentive to seek to overvalue certain assets.
financial statements april 30, 2017 | 35 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2017 (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 1-800-575-1265 | 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.
|
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.
|
(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.
|
(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”).
|
(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.
|
(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.
|
(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 |
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 |
By: (Signature and Title)
/s/ Charles H. Schreiber |
Charles H. Schreiber |