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, 2018
Item 1. Report to Stockholders.
BBH CORE SELECT
PORTFOLIO ALLOCATION
April 30, 2018 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Basic Materials | $ | 132,485,768 | 5.6 | % | ||||||
Communications | 391,516,918 | 16.6 | ||||||||
Consumer Cyclical | 57,725,431 | 2.5 | ||||||||
Consumer Non-Cyclical | 933,690,847 | 39.7 | ||||||||
Financials | 402,797,474 | 17.1 | ||||||||
Industrials | 37,075,637 | 1.6 | ||||||||
Technology | 216,045,741 | 9.2 | ||||||||
Repurchase Agreements | 96,000,000 | 4.1 | ||||||||
U.S. Treasury Bills | 74,763,223 | 3.2 | ||||||||
Cash and Other Assets in Excess of Liabilities | 9,798,498 | 0.4 | ||||||||
NET ASSETS | $ | 2,351,899,537 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2018 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (92.3%) | ||||||||||
BASIC MATERIALS (5.6%) | ||||||||||
606,608 | Celanese Corp. (Series A) | $ | 65,920,092 | |||||||
436,439 | Praxair, Inc. | 66,565,676 | ||||||||
Total Basic Materials | 132,485,768 | |||||||||
COMMUNICATIONS (16.6%) | ||||||||||
135,628 | Alphabet, Inc. (Class C)1 | 137,978,433 | ||||||||
4,035,446 | Comcast Corp. (Class A) | 126,672,650 | ||||||||
3,058,238 | Discovery, Inc. (Class C)1 | 67,954,049 | ||||||||
2,024,460 | Liberty Global, Plc. (Class C) (United Kingdom)1 | 58,911,786 | ||||||||
Total Communications | 391,516,918 | |||||||||
CONSUMER CYCLICAL (2.5%) | ||||||||||
2,465,845 | Qurate Retail Group, Inc. QVC Group (Class A)1 | 57,725,431 | ||||||||
Total Consumer Cyclical | 57,725,431 | |||||||||
CONSUMER NON-CYCLICAL (39.7%) | ||||||||||
895,836 | Dentsply Sirona, Inc. | 45,096,384 | ||||||||
585,831 | Diageo, Plc. ADR (United Kingdom) | 83,164,569 | ||||||||
507,533 | FleetCor Technologies, Inc.1 | 105,201,440 | ||||||||
959,065 | Henry Schein, Inc.1 | 72,888,940 | ||||||||
3,216,495 | Kroger Co. | 81,023,509 | ||||||||
530,890 | Nestle SA ADR (Switzerland) | 41,069,650 | ||||||||
2,275,470 | Nielsen Holdings, Plc. (United Kingdom) | 71,563,532 | ||||||||
1,304,887 | Novartis AG ADR (Switzerland) | 100,071,784 | ||||||||
805,479 | PayPal Holdings, Inc.1 | 60,096,788 | ||||||||
1,017,214 | Perrigo Co., Plc. (Ireland) | 79,485,102 | ||||||||
2,698,786 | Sabre Corp. | 55,702,943 | ||||||||
949,233 | Unilever NV (NY Shares) (Netherlands) | 54,220,189 | ||||||||
1,007,499 | Zoetis, Inc. | 84,106,017 | ||||||||
Total Consumer Non-Cyclical | 933,690,847 | |||||||||
FINANCIALS (17.1%) | ||||||||||
596 | Berkshire Hathaway, Inc. (Class A)1 | 173,227,400 | ||||||||
2,261,955 | US Bancorp | 114,115,630 | ||||||||
2,221,987 | Wells Fargo & Co. | 115,454,444 | ||||||||
Total Financials | 402,797,474 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 3 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
INDUSTRIALS (1.6%) | ||||||||||
456,091 | Waste Management, Inc. | $ | 37,075,637 | |||||||
Total Industrials | 37,075,637 | |||||||||
TECHNOLOGY (9.2%) | ||||||||||
3,541,560 | Oracle Corp. | 161,743,045 | ||||||||
1,064,550 | QUALCOMM, Inc. | 54,302,696 | ||||||||
Total Technology | 216,045,741 | |||||||||
Total Common Stock (Identified cost $1,391,747,834) | 2,171,337,816 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||
REPURCHASE AGREEMENTS (4.1%) | ||||||||||||||||||||||
$96,000,000 | National Australia Bank, Ltd. (Agreement dated 4/30/18 collateralized by U.S. Treasury Notes 2.000%, due 11/15/21, original par $99,435,000, valued at $97,920,000) | 05/01/18 | 1.680 | % | $ | 96,000,000 | ||||||||||||||||
Total Repurchase Agreements (Identified cost $96,000,000) | 96,000,000 | |||||||||||||||||||||
U.S. TREASURY BILLS (3.2%) | ||||||||||||||||||||||
75,000,000 | U.S. Treasury Bills2 | 07/05/18 | 0.000 | 74,763,223 | ||||||||||||||||||
Total U.S. Treasury Bills (Identified cost $74,773,177) | 74,763,223 | |||||||||||||||||||||
TOTAL INVESTMENTS (Identified cost $1,562,521,011)3 | 99.6 | % | $ | 2,342,101,039 | ||||||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 0.4 | % | 9,798,498 | |||||||||||||||||||
NET ASSETS | 100.0 | % | $ | 2,351,899,537 |
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 $1,562,521,011, the aggregate gross unrealized appreciation is $831,752,290 and the aggregate gross unrealized depreciation is $52,172,262, resulting in net unrealized appreciation of $779,580,028. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 5 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 (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, 2018 | ||||||||||||||
Common Stock: | ||||||||||||||||||
Basic Materials | $ | 132,485,768 | $ | — | $ | — | $ | 132,485,768 | ||||||||||
Communications | 391,516,918 | — | — | 391,516,918 | ||||||||||||||
Consumer Cyclical | 57,725,431 | — | — | 57,725,431 | ||||||||||||||
Consumer Non-Cyclical | 933,690,847 | — | — | 933,690,847 | ||||||||||||||
Financials | 402,797,474 | — | — | 402,797,474 | ||||||||||||||
Industrials | 37,075,637 | — | — | 37,075,637 | ||||||||||||||
Technology | 216,045,741 | — | — | 216,045,741 | ||||||||||||||
Repurchase Agreements | — | 96,000,000 | — | 96,000,000 | ||||||||||||||
U.S. Treasury Bills | — | 74,763,223 | — | 74,763,223 | ||||||||||||||
Investments, at value | $ | 2,171,337,816 | $ | 170,763,223 | $ | — | $ | 2,342,101,039 |
* | 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, 2018. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 7 |
BBH CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2018 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $1,466,521,011) | $ | 2,246,101,039 | ||||
Repurchase agreements (Identified cost $96,000,000) | 96,000,000 | |||||
Cash | 2,173,512 | |||||
Receivables for: | ||||||
Dividends | 9,669,281 | |||||
Shares sold | 1,134,727 | |||||
Investment advisory and administrative fee waiver reimbursement | 276,190 | |||||
Interest | 4,480 | |||||
Other | 17,487 | |||||
Prepaid assets | 4,646 | |||||
Total Assets | 2,355,381,362 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investment advisory and administrative fees | 1,593,157 | |||||
Shares redeemed | 1,306,965 | |||||
Shareholder servicing fees | 381,170 | |||||
Professional fees | 48,455 | |||||
Custody and fund accounting fees | 46,184 | |||||
Transfer agent fees | 25,358 | |||||
Distribution fees | 17,572 | |||||
Board of Trustees’ fees | 997 | |||||
Accrued expenses and other liabilities | 61,967 | |||||
Total Liabilities | 3,481,825 | |||||
NET ASSETS | $ | 2,351,899,537 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 1,312,209,733 | ||||
Undistributed net investment income | 5,895,857 | |||||
Accumulated net realized gain on investments in securities | 254,213,919 | |||||
Net unrealized appreciation/(depreciation) on investments in securities | 779,580,028 | |||||
Net Assets | $ | 2,351,899,537 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($2,265,222,655 ÷ 113,341,028 shares outstanding) | $19.99 | |||||
RETAIL CLASS SHARES | ||||||
($86,676,882 ÷ 8,441,632 shares outstanding) | $10.27 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2018 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $934,979) | $ | 19,152,110 | ||||
Interest income | 1,528,629 | |||||
Total Income | 20,680,739 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 10,390,432 | |||||
Shareholder servicing fees | 2,597,608 | |||||
Distribution fees | 117,169 | |||||
Transfer agent fees | 99,699 | |||||
Custody and fund accounting fees | 82,391 | |||||
Professional fees | 47,417 | |||||
Board of Trustees’ fees | 26,776 | |||||
Miscellaneous expenses | 356,668 | |||||
Total Expenses | 13,718,160 | |||||
Investment advisory and administrative fee waiver | (567,868 | ) | ||||
Expense offset arrangement | (12,564 | ) | ||||
Net Expenses | 13,137,728 | |||||
Net Investment Income | 7,543,011 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 254,604,656 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (224,038,000 | ) | ||||
Net Realized and Unrealized Gain | 30,566,656 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 38,109,667 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 9 |
BBH CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2018 (unaudited) | For the year ended October 31, 2017 | |||||||||
DECREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 7,543,011 | $ | 13,983,608 | ||||||
Net realized gain on investments in securities | 254,604,656 | 542,225,458 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (224,038,000 | ) | (1,648,305 | ) | ||||||
Net increase in net assets resulting from operations | 38,109,667 | 554,560,761 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (13,460,504 | ) | (20,614,105 | ) | ||||||
Retail Class | (888,595 | ) | (1,323,018 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (372,421,935 | ) | (242,554,177 | ) | ||||||
Retail Class | (35,473,677 | ) | (20,839,178 | ) | ||||||
Total dividends and distributions declared | (422,244,711 | ) | (285,330,478 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 207,613,501 | 263,771,524 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 288,266,497 | 204,685,714 | ||||||||
Proceeds from short-term redemption fees | 2,443 | 14,407 | ||||||||
Cost of shares redeemed* | (498,847,872 | ) | (1,579,605,854 | ) | ||||||
Net decrease in net assets resulting from share transactions | (2,965,431 | ) | (1,111,134,209 | ) | ||||||
Total decrease in net assets | (387,100,475 | ) | (841,903,926 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 2,739,000,012 | 3,580,903,938 | ||||||||
End of period (including undistributed net investment income of $5,895,857 and $12,701,945, respectively) | $ | 2,351,899,537 | $ | 2,739,000,012 |
* | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2018 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.18 | $ | 21.15 | $ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.06 | 0.10 | 0.12 | 0.12 | 0.14 | 0.13 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.26 | 3.64 | (0.08 | ) | 0.64 | 1.70 | 3.95 | ||||||||||||||||||||
Total income from investment operations | 0.32 | 3.74 | 0.04 | 0.76 | 1.84 | 4.08 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.12 | ) | (0.13 | ) | (0.12 | ) | (0.14 | ) | (0.10 | ) | (0.10 | ) | |||||||||||||||
From net realized gains | (3.39 | ) | (1.58 | ) | (1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | |||||||||||||||
Total dividends and distributions | (3.51 | ) | (1.71 | ) | (1.68 | ) | (0.49 | ) | (0.53 | ) | (0.33 | ) | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
Net asset value, end of period | $ | 19.99 | $ | 23.18 | $ | 21.15 | $ | 22.79 | $ | 22.52 | $ | 21.21 | |||||||||||||||
Total return | 0.80 | %3 | 18.70 | % | 0.40 | % | 3.47 | % | 8.90 | % | 23.78 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 2,265 | $ | 2,592 | $ | 3,403 | $ | 4,970 | $ | 5,816 | $ | 5,645 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.04 | %4 | 1.02 | % | 1.01 | % | 1.07 | % | 1.07 | % | 1.09 | % | |||||||||||||||
Fee waiver | 0.04 | %4,5 | 0.02 | %5 | 0.01 | %5 | 0.07 | %5 | 0.07 | %5 | 0.09 | %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 | 0.60 | %4 | 0.46 | % | 0.57 | % | 0.53 | % | 0.66 | % | 0.65 | % | |||||||||||||||
Portfolio turnover rate | 6 | %3 | 15 | % | 12 | % | 8 | % | 8 | % | 12 | % |
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, 2018, the years ended October 31, 2017, 2016, 2015, 2014 and 2013, reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.00%. The agreement is effective for all periods presented and is effective through March 1, 2019, unless renewed by all parties to the agreement. For the six months ended April 30, 2018 and the years ended October 31, 2017, 2016, 2015, 2014 and 2013, the waived fees were $525,166, $673,403, $531,298, $3,938,986, $4,238,260 and $3,983,262, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 11 |
BBH CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each period.
For the six months ended April 30, 2018 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.51 | $ | 13.00 | $ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.01 | 0.03 | 0.05 | 0.03 | 0.06 | 0.06 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.22 | 2.16 | (0.07 | ) | 0.42 | 1.11 | 2.60 | ||||||||||||||||||||
Total income/(loss) from investment operations | 0.23 | 2.19 | (0.02 | ) | 0.45 | 1.17 | 2.66 | ||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.08 | ) | (0.10 | ) | (0.07 | ) | (0.11 | ) | (0.07 | ) | (0.05 | ) | |||||||||||||||
From net realized gains | (3.39 | ) | (1.58 | ) | (1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | |||||||||||||||
Total dividends and distributions | (3.47 | ) | (1.68 | ) | (1.63 | ) | (0.46 | ) | (0.50 | ) | (0.28 | ) | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
Net asset value, end of period | $ | 10.27 | $ | 13.51 | $ | 13.00 | $ | 14.65 | $ | 14.66 | $ | 13.99 | |||||||||||||||
Total return | 0.70 | %3 | 18.40 | % | 0.19 | % | 3.14 | % | 8.63 | % | 23.42 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 87 | $ | 147 | $ | 178 | $ | 280 | $ | 400 | $ | 367 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.31 | %4 | 1.33 | % | 1.33 | % | 1.39 | % | 1.40 | % | 1.42 | % | |||||||||||||||
Fee waiver | 0.07 | %4,5 | 0.08 | %5 | 0.10 | %5 | 0.14 | %5 | 0.15 | %5 | 0.17 | %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 | 1.24 | %4 | 1.25 | % | 1.23 | % | 1.25 | % | 1.25 | % | 1.25 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.24 | %4 | 0.21 | % | 0.37 | % | 0.24 | % | 0.40 | % | 0.44 | % | |||||||||||||||
Portfolio turnover rate | 6 | %3 | 15 | % | 12 | % | 8 | % | 8 | % | 12 | % |
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, 2018, the years ended October 31, 2017, 2016, 2015, 2014 and 2013, reflect fees reduced as result of contractual operating expense limitation of the share class of 1.25%. The agreement is effective for all periods presented and is effective through March 1, 2019, unless renewed by all parties to the agreement. For the six months ended April 30, 2018 and the years ended October 31, 2017, 2016, 2015, 2014 and 2013, the waived fees were $42,702, $133,469, $234,959, $551,384, $577,948 and $568,410, 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, 2018 (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. As of April 30, 2018, 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 of Trustees (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 are recorded as a reduction of cost of investments. Distributions received on securities that represent a capital gain are recorded 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, 2018 | 13 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018 (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, 2017, 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, 2018, 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 $385,882,439 and $36,362,272 to Class N shares and Retail Class shareholders, respectively, during the six months ended April 30, 2018. 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, 2018 | 15 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2017: | $ | 21,937,123 | $ | 263,393,355 | $ | 285,330,478 | $ | — | $ | 285,330,478 | ||||||||||||||
2016: | 25,811,801 | 343,196,853 | 369,008,654 | — | 369,008,654 |
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 | Book unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2017: | $ | 12,701,945 | $ | 407,895,164 | $ | 420,597,109 | $ | — | $ | (390,289 | ) | $ | 1,003,618,028 | $ | 1,423,824,848 | |||||||||||||||||
2016: | 20,655,460 | 263,377,781 | 284,033,241 | — | (851,121 | ) | 1,005,266,333 | 1,288,448,453 |
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 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. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, portfolio management and 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, 2018, the Fund incurred $10,390,432 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, 2019, 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, 2018, the Investment Adviser waived fees in the amount of $525,166 and $42,702 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, 2018, the Fund incurred shareholder servicing fees in the amount of $2,474,106 and $123,502 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 distribution-related 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 in Retail Class shares and may cost the Retail Class 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 total operating expenses for retail Class shares will be 1.25% of the average daily net assets. For the six months ended April 30, 2018, |
financial statements april 30, 2018 | 17 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
Retail Class shares of the Fund incurred $117,169 for Distribution (12b-1) Fees. This amount is presented under line item “Distribution fees” in the Statement of Operations. |
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, 2018, the Fund incurred $82,391 in custody and fund accounting fees. These fees for the Fund were reduced by $12,564 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, 2018, was $425. This amount is included under line item “Custody and fund accounting fees” in the Statement 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, 2018, the Fund incurred $26,776 in independent Trustee compensation and expense reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2018, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $150,381,068 and $551,507,416, respectively. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018 (unaudited) | For the year ended October 31, 2017 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 9,390,621 | $ | 199,254,123 | 11,338,201 | $ | 246,670,938 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 12,123,334 | 252,165,360 | 8,861,662 | 182,638,860 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 2,070 | N/A | 13,587 | |||||||||||||||
Shares redeemed | (20,005,073 | ) | (426,097,303 | ) | (69,301,288 | ) | (1,503,377,696 | ) | |||||||||||
Net decrease | 1,508,882 | $ | 25,324,250 | (49,101,425 | ) | $ | (1,074,054,311 | ) | |||||||||||
Retail Class | |||||||||||||||||||
Shares sold | 740,957 | $ | 8,359,378 | 1,334,628 | $ | 17,100,586 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 3,373,938 | 36,101,137 | 1,831,134 | 22,046,854 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 373 | N/A | 820 | |||||||||||||||
Shares redeemed | (6,572,396 | ) | (72,750,569 | ) | (5,942,387 | ) | (76,228,158 | ) | |||||||||||
Net decrease | (2,457,501 | ) | $ | (28,289,681 | ) | (2,776,625 | ) | $ | (37,079,898 | ) |
financial statements april 30, 2018 | 19 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including but not limited to, those described below: |
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2018 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 21 |
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2018 (unaudited)
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,008 | $ | 4.98 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,020 | $ | 5.01 |
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 1,007 | $ | 6.17 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.21 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 1.00% and 1.24% 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. |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 23 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (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.
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
and discussed the report’s findings with both BBH and the independent third party and discussed the positioning of the Fund relative to the selected peer category funds. The Board considered short-term and long-term investment performance for the Fund over various periods of time as compared to a selection of peer category, noting underperformance in the 1-, 2-, 3-, 4- and 5-year periods ended September 30, 2017 and outperformance in the 10-year period ended September 30, 2017. The Board noted that the Fund’s historical track record of positive absolute returns was consistent with the investment approach communicated to investors. In evaluating the 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.
financial statements april 30, 2018 | 25 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 27 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 29 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 31 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (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 GLOBAL CORE SELECT
PORTFOLIO OF ALLOCATION
April 30, 2018 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Canada | $ | 4,509,615 | 3.4 | % | ||||||
France | 12,151,842 | 9.1 | ||||||||
Germany | 7,659,236 | 5.8 | ||||||||
Ireland | 4,345,522 | 3.3 | ||||||||
Italy | 3,965,181 | 3.0 | ||||||||
Netherlands | 5,438,656 | 4.1 | ||||||||
Switzerland | 7,702,457 | 5.8 | ||||||||
United Kingdom | 23,576,657 | 17.8 | ||||||||
United States | 53,182,178 | 40.0 | ||||||||
Repurchase Agreements | 2,000,000 | 1.5 | ||||||||
U.S. Treasury Bills | 5,997,728 | 4.5 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2,297,511 | 1.7 | ||||||||
NET ASSETS | $ | 132,826,583 | 100.0 | % |
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Basic Materials | $ | 11,577,065 | 8.7 | % | ||||||
Communications | 17,584,488 | 13.3 | ||||||||
Consumer Cyclical | 5,507,758 | 4.2 | ||||||||
Consumer Non-Cyclical | 53,437,713 | 40.2 | ||||||||
Diversified | 5,616,314 | 4.2 | ||||||||
Financials | 16,988,881 | 12.8 | ||||||||
Technology | 11,819,125 | 8.9 | ||||||||
Repurchase Agreements | 2,000,000 | 1.5 | ||||||||
U.S. Treasury Bills | 5,997,728 | 4.5 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2,297,511 | 1.7 | ||||||||
NET ASSETS | $ | 132,826,583 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2018 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (92.3%) | ||||||||||
CANADA (3.4%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
64,375 | Alimentation Couche-Tard, Inc. (Class B) | $ | 2,787,516 | |||||||
FINANCIALS | ||||||||||
22,550 | Intact Financial Corp. | 1,722,099 | ||||||||
Total Canada | 4,509,615 | |||||||||
FRANCE (9.1%) | ||||||||||
COMMUNICATIONS | ||||||||||
94,270 | JCDecaux S.A. | 3,362,706 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
40,200 | Sanofi | 3,172,822 | ||||||||
DIVERSIFIED | ||||||||||
37,300 | Wendel S.A. | 5,616,314 | ||||||||
Total France | 12,151,842 | |||||||||
GERMANY (5.8%) | ||||||||||
BASIC MATERIALS | ||||||||||
32,400 | Brenntag AG | 1,853,936 | ||||||||
42,400 | Fuchs Petrolub SE | 2,179,555 | ||||||||
4,033,491 | ||||||||||
FINANCIALS | ||||||||||
26,950 | Deutsche Boerse AG | 3,625,745 | ||||||||
Total Germany | 7,659,236 | |||||||||
IRELAND (3.3%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
55,612 | Perrigo Co., Plc. | 4,345,522 | ||||||||
Total Ireland | 4,345,522 | |||||||||
ITALY (3.0%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
528,900 | Davide Campari-Milano SpA | 3,965,181 | ||||||||
Total Italy | 3,965,181 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 3 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
NETHERLANDS (4.1%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
23,900 | Heineken Holding NV | $ | 2,421,113 | |||||||
52,900 | Unilever NV | 3,017,543 | ||||||||
Total Netherlands | 5,438,656 | |||||||||
SWITZERLAND (5.8%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
29,375 | Nestle S.A. | 2,270,724 | ||||||||
70,626 | Novartis AG | 5,431,733 | ||||||||
Total Switzerland | 7,702,457 | |||||||||
UNITED KINGDOM (17.8%) | ||||||||||
COMMUNICATIONS | ||||||||||
111,949 | Liberty Global, Plc. (Series C)1 | 3,257,716 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
173,325 | Diageo, Plc. | 6,157,971 | ||||||||
125,425 | Nielsen Holdings, Plc. | 3,944,616 | ||||||||
60,800 | Reckitt Benckiser Group, Plc. | 4,761,155 | ||||||||
14,863,742 | ||||||||||
FINANCIALS | ||||||||||
6,144,900 | Lloyds Banking Group, Plc. | 5,455,199 | ||||||||
Total United Kingdom | 23,576,657 | |||||||||
UNITED STATES (40.0%) | ||||||||||
BASIC MATERIALS | ||||||||||
34,575 | Celanese Corp. (Series A) | 3,757,265 | ||||||||
24,825 | Praxair, Inc. | 3,786,309 | ||||||||
7,543,574 | ||||||||||
COMMUNICATIONS | ||||||||||
7,068 | Alphabet, Inc. (Class C)1 | 7,190,488 | ||||||||
169,828 | Discovery, Inc. (Class C)1 | 3,773,578 | ||||||||
10,964,066 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
UNITED STATES (continued) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
116,200 | Qurate Retail Group, Inc. QVC Group (Class A)1 | $ | 2,720,242 | |||||||
CONSUMER NON-CYCLICAL | ||||||||||
28,285 | FleetCor Technologies, Inc.1 | 5,862,915 | ||||||||
44,775 | PayPal Holdings, Inc.1 | 3,340,663 | ||||||||
56,849 | Zoetis, Inc. | 4,745,755 | ||||||||
13,949,333 | ||||||||||
FINANCIALS | ||||||||||
119,050 | Wells Fargo & Co. | 6,185,838 | ||||||||
TECHNOLOGY | ||||||||||
190,675 | Oracle Corp. | 8,708,127 | ||||||||
60,988 | QUALCOMM, Inc. | 3,110,998 | ||||||||
11,819,125 | ||||||||||
Total United States | 53,182,178 | |||||||||
Total Common Stock (Identified cost $99,427,264) | 122,531,344 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 5 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
REPURCHASE AGREEMENTS (1.5%) | ||||||||||||||||||
$2,000,000 | National Australia Bank Ltd. (Agreement dated 04/30/18 collateralized by U.S. Treasury Note 2.000%, due 11/15/21, original par $2,075,000, valued at $2,040,000) | 05/01/18 | 1.680 | % | $ | 2,000,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $2,000,000) | 2,000,000 | |||||||||||||||||
U.S. TREASURY BILLS (4.5%) | ||||||||||||||||||
6,000,000 | U.S. Treasury Bill2 | 05/10/18 | 0.000 | 5,997,728 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $5,997,728) | 5,997,728 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $107,424,992)3 | 98.3 | % | $ | 130,529,072 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 1.7 | % | 2,297,511 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 132,826,583 |
1 | Non-income producing security. |
2 | Security issued with zero coupon. Income is recognized through accretion of discount. |
3 | The aggregate cost for federal income tax purposes is $107,424,992, the aggregate gross unrealized appreciation is $28,442,006 and the aggregate gross unrealized depreciation is $5,337,926, resulting in net unrealized appreciation of $23,104,080. |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | 7 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | ||||||||||||||
Common Stock: | ||||||||||||||||||
Basic Materials | $ | 7,543,574 | $ | 4,033,491 | $ | – | $ | 11,577,065 | ||||||||||
Communications | 14,221,782 | 3,362,706 | – | 17,584,488 | ||||||||||||||
Consumer Cyclical | 5,507,758 | – | – | 5,507,758 | ||||||||||||||
Consumer Non-Cyclical | 22,239,471 | 31,198,242 | – | 53,437,713 | ||||||||||||||
Diversified | – | 5,616,314 | – | 5,616,314 | ||||||||||||||
Financials | 7,907,937 | 9,080,944 | – | 16,988,881 | ||||||||||||||
Technology | 11,819,125 | – | – | 11,819,125 | ||||||||||||||
Repurchase Agreements | – | 2,000,000 | – | 2,000,000 | ||||||||||||||
U.S. Treasury Bills | – | 5,997,728 | – | 5,997,728 | ||||||||||||||
Investments, at value | $ | 69,239,647 | $ | 61,289,425 | $ | – | $ | 130,529,072 |
* | 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, 2018. |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2018 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $105,424,992) | $ | 128,529,072 | ||||
Repurchase agreements (Identified cost $2,000,000) | 2,000,000 | |||||
Cash | 1,773,297 | |||||
Receivables for: | ||||||
Dividends | 495,098 | |||||
Shares sold | 187,500 | |||||
Investment advisory and administrative fee waiver reimbursement | 11,904 | |||||
Interest | 93 | |||||
Other | 5,801 | |||||
Prepaid assets | 8,729 | |||||
Total Assets | 133,011,494 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investment advisory and administrative fees | 111,690 | |||||
Professional fees | 36,973 | |||||
Shareholder servicing fees | 21,349 | |||||
Custody and fund accounting fees | 8,679 | |||||
Transfer agent fees | 2,048 | |||||
Shares redeemed | 744 | |||||
Board of Trustees’ fees | 742 | |||||
Distribution fees | 368 | |||||
Accrued expenses and other liabilities | 2,318 | |||||
Total Liabilities | 184,911 | |||||
NET ASSETS | $ | 132,826,583 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 105,473,422 | ||||
Undistributed net investment income | 285,098 | |||||
Accumulated net realized gain on investments in securities and foreign exchange transactions | 3,974,487 | |||||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 23,093,576 | |||||
Net Assets | $ | 132,826,583 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($130,992,546 ÷ 10,098,480 shares outstanding) | $12.97 | |||||
RETAIL CLASS SHARES | ||||||
($1,834,037 ÷ 142,082 shares outstanding) | $12.91 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 9 |
BBH GLOBAL CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2018 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $56,859) | $ | 1,084,172 | ||||
Interest income | 80,448 | |||||
Total Income | 1,164,620 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 647,886 | |||||
Shareholder servicing fees | 136,397 | |||||
Professional fees | 36,327 | |||||
Board of Trustees’ fees | 26,735 | |||||
Custody and fund accounting fees | 20,932 | |||||
Transfer agent fees | 17,091 | |||||
Distribution fees | 3,281 | |||||
Miscellaneous expenses | 36,034 | |||||
Total Expenses | 924,683 | |||||
Investment advisory and administrative fee waiver | (53,833 | ) | ||||
Expense offset arrangement | (15,088 | ) | ||||
Net Expenses | 855,762 | |||||
Net Investment Income | 308,858 | |||||
NET REALIZED AND UNREALIZED LOSS: | ||||||
Net realized gain on investments in securities | 4,434,818 | |||||
Net realized loss on foreign exchange transactions and translations | (11,800 | ) | ||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 4,423,018 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (5,239,835 | ) | ||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | (10,367 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (5,250,202 | ) | ||||
Net Realized and Unrealized Loss | (827,184 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | $ | (518,326 | ) |
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, 2018 (unaudited) | For the year ended October 31, 2017 | |||||||||
INCREASE (DECREASE) IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 308,858 | $ | 531,369 | ||||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 4,423,018 | 2,885,323 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (5,250,202 | ) | 19,192,714 | |||||||
Net increase (decrease) in net assets resulting from operations | (518,326 | ) | 22,609,406 | |||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (514,179 | ) | (593,082 | ) | ||||||
Retail Class | (6,461 | ) | (10,877 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (2,440,648 | ) | – | |||||||
Retail Class | (73,741 | ) | – | |||||||
Total dividends and distributions declared | (3,035,029 | ) | (603,959 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 9,820,075 | 10,904,266 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 2,381,376 | 480,926 | ||||||||
Cost of shares redeemed | (10,176,787 | ) | (11,071,494 | ) | ||||||
Net increase in net assets resulting from share transactions | 2,024,664 | 313,698 | ||||||||
Total increase (decrease) in net assets | (1,528,691 | ) | 22,319,145 | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 134,355,274 | 112,036,129 | ||||||||
End of period (including undistributed net investment income of $285,098 and $496,880, respectively) | $ | 132,826,583 | $ | 134,355,274 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 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, 2018 (unaudited) | For the years ended October 31, | For the period from March 28, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.32 | $ | 11.11 | $ | 11.37 | $ | 11.27 | $ | 10.99 | $ | 10.00 | ||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||
Net investment income1 | 0.03 | 0.05 | 0.06 | 0.06 | 0.12 | 0.03 | ||||||||||||||||||||
Net realized and unrealized gain (loss) | (0.08 | ) | 2.22 | (0.18 | ) | 0.30 | 0.21 | 0.96 | ||||||||||||||||||
Total income (loss) from investment operations | (0.05 | ) | 2.27 | (0.12 | ) | 0.36 | 0.33 | 0.99 | ||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||||
From net investment income | (0.05 | ) | (0.06 | ) | (0.07 | ) | (0.13 | ) | (0.02 | ) | — | |||||||||||||||
From net realized gains | (0.25 | ) | — | (0.07 | ) | (0.13 | ) | (0.03 | ) | — | ||||||||||||||||
Total dividends and distributions | (0.30 | ) | (0.06 | ) | (0.14 | ) | (0.26 | ) | (0.05 | ) | — | |||||||||||||||
Short-term redemption fees1 | — | — | 0.00 | 2 | — | 0.00 | 2 | — | ||||||||||||||||||
Net asset value, end of period | $ | 12.97 | $ | 13.32 | $ | 11.11 | $ | 11.37 | $ | 11.27 | $ | 10.99 | ||||||||||||||
Total return | (0.42 | )%3 | 20.54 | % | (1.06 | )% | 3.27 | % | 3.01 | % | 9.90 | %3 | ||||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 131 | $ | 130 | $ | 108 | $ | 132 | $ | 127 | $ | 88 | ||||||||||||||
Ratio of expenses to average net assets before reductions | 1.33 | %4 | 1.36 | % | 1.38 | % | 1.31 | % | 1.32 | % | 1.87 | %4 | ||||||||||||||
Fee waiver | 0.06 | %4,5 | 0.10 | %5 | 0.13 | %5 | 0.05 | %5 | 0.07 | %5 | 0.61 | %4,5 | ||||||||||||||
Expense offset arrangement | 0.02 | %4 | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %6 | 0.01 | %4 | ||||||||||||||
Ratio of expenses to average net assets after reductions | 1.25 | %4 | 1.25 | % | 1.24 | % | 1.25 | % | 1.25 | % | 1.25 | %4 | ||||||||||||||
Ratio of net investment income to average net assets | 0.46 | %4 | 0.44 | % | 0.58 | % | 0.55 | % | 1.01 | % | 0.50 | %4 | ||||||||||||||
Portfolio turnover rate | 6 | %3 | 23 | % | 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, 2018, the years ended October 31, 2017, 2016, 2015, 2014 and the period ended October 31,2013 reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.25%. The agreement is effective for the period beginning on March 28, 2013 through April 1, 2014 and has been renewed by all parties to the agreement through March 1, 2019. For the six months ended April 30, 2018, years ended October 31, 2017, 2016, 2015, 2014 and the period ended October 31.2013, the waived fees were $37,063, $110,626, $146,074, $74,640, $90,671 and $152,928, respectively. |
6 | Less than 0.01%. |
7 | Represent 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, 2018 (unaudited) | For the years ended October 31, | For the period from April 2, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 13.24 | $ | 11.05 | $ | 11.31 | $ | 11.24 | $ | 10.98 | $ | 10.00 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.00 | )2 | 0.02 | 0.04 | 0.03 | 0.07 | 0.00 | 2 | ||||||||||||||||
Net realized and unrealized gain (loss) | (0.06 | ) | 2.20 | (0.18 | ) | 0.29 | 0.22 | 0.98 | ||||||||||||||||
Total income (loss) from investment operations | (0.06 | ) | 2.22 | (0.14 | ) | 0.32 | 0.29 | 0.98 | ||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||
From net investment income | (0.02 | ) | (0.03 | ) | (0.05 | ) | (0.12 | ) | (0.01 | ) | — | |||||||||||||
From net realized gains | (0.25 | ) | — | (0.07 | ) | (0.13 | ) | (0.03 | ) | — | ||||||||||||||
Total dividends and distributions | (0.27 | ) | (0.03 | ) | (0.12 | ) | (0.25 | ) | (0.04 | ) | — | |||||||||||||
Short-term redemption fees1 | — | — | — | — | 0.01 | 0.00 | 2 | |||||||||||||||||
Net asset value, end of period | $ | 12.91 | $ | 13.24 | $ | 11.05 | $ | 11.31 | $ | 11.24 | $ | 10.98 | ||||||||||||
Total return | (0.49 | )%3 | 20.18 | % | (1.25 | )% | 2.98 | % | 2.70 | % | 9.80 | %3 | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 2 | $ | 4 | $ | 4 | $ | 4 | $ | 2 | $ | 2 | ||||||||||||
Ratio of expenses to average net assets before reductions | 2.80 | %4 | 2.44 | % | 2.65 | % | 2.93 | % | 3.36 | % | 4.88 | %4 | ||||||||||||
Fee waiver | 1.28 | %4,5 | 0.93 | %5 | 1.14 | %5 | 1.43 | %5 | 1.86 | %5 | 3.37 | %4,5 | ||||||||||||
Expense offset arrangement | 0.02 | %4 | 0.01 | % | 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 | % | 1.50 | %4 | ||||||||||||
Ratio of net investment income (loss) to average net assets | (0.02 | )% 4 | 0.20 | % | 0.32 | % | 0.29 | % | 0.61 | % | 0.02 | %4 | ||||||||||||
Portfolio turnover rate | 6 | %3 | 23 | % | 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, 2018, the years ended October 31, 2017, 2016, 2015, 2014 and the period ended October 31,2013 reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.50%. The agreement is effective for the period beginning on March 28, 2013 through April 1, 2014 and has been renewed by all parties to the agreement through March 1, 2019. For the six month ended April 30, 2018, years ended October 31, 2017, 2016, 2015, 2014 and the period ended October 31.2013, the waived fees were $16,770, $35,288, $40,663, $41,058, $41,099 and $17,913, respectively. |
6 | Less than 0.01%. |
7 | Represent 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, 2018 | 13 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS
April 30, 2018 (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, 2018 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 (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. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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 are recorded as a reduction of cost of investments. Distributions received on securities that represent a capital gain are recorded 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, 2018 | 15 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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 net change in unrealized appreciation or depreciation 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, 2018 (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 $2,954,827 and $80,202 to Class N and Retail Class shareholders, respectively, during the six months ended April 30, 2018. 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 | ||||||||||||||||||||
2017: | $ | 603,959 | $ | – | $ | 603,959 | $ | – | $ | 603,959 | ||||||||||||||
2016: | 648,794 | 698,183 | 1,346,977 | – | 1,346,977 |
financial statements april 30, 2018 | 17 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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 | Book unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2017: | $ | 1,374,478 | $ | 1,635,451 | $ | 3,009,929 | $ | – | $ | (447,191 | ) | $ | 28,343,778 | $ | 30,906,516 | |||||||||||||||||
2016: | 567,899 | – | 567,899 | – | (772,531 | ) | 9,151,064 | 8,946,432 |
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, portfolio management and 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, 2018, the Fund incurred $647,886 under the Agreement. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2019, 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, 2018, the Investment Adviser waived fees in the amount of $37,063 and $16,770 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, 2018, the Fund incurred shareholder servicing fees in the amount of $133,784 and $2,613 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 distribution-related 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 in Retail Class shares 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 total operating expenses for Retail Class shares will be 1.50% of the average daily net assets. For the six months ended April 30, 2018, Retail Class shares of the Fund incurred $3,281 for Distribution (12b-1) Fees. This amount is presented under line item “Distribution fees” in the Statement of Operations. |
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, 2018, the Fund incurred $20,932 in custody and fund accounting fees. These fees for the Fund were reduced by $15,088 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, 2018 | 19 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018, 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, 2018, the Fund incurred $26,735 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2018, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $12,908,605 and $7,741,172, 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, 2018 (unaudited) | For the year ended October 31, 2017 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 716,051 | $ | 9,750,465 | 891,299 | $ | 10,859,908 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 172,526 | 2,308,404 | 41,531 | 470,955 | |||||||||||||||
Shares redeemed | (587,273 | ) | (7,984,537 | ) | (901,051 | ) | (10,675,842 | ) | |||||||||||
Net increase | �� | 301,304 | $ | 4,074,332 | 31,779 | $ | 655,021 | ||||||||||||
Retail Class | |||||||||||||||||||
Shares sold | 5,226 | $ | 69,610 | 3,632 | $ | 44,358 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 5,478 | 72,972 | 882 | 9,971 | |||||||||||||||
Shares redeemed | (162,657 | ) | (2,192,250 | ) | (31,411 | ) | (395,652 | ) | |||||||||||
Net decrease | (151,953 | ) | $ | (2,049,668 | ) | (26,897 | ) | $ | (341,323 | ) |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018 | 21 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2018 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, 2018 (unaudited)
financial statements april 30, 2018 | 23 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2018 (unaudited)
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 996 | $ | 6.19 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.26 |
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 995 | $ | 7.42 | ||||||||
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, 2018 (unaudited)
financial statements april 30, 2018 | 25 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
limited period of operations of the Fund and noted that the Fund’s performance was consistent with the investment approach communicated to investors. In evaluating the 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.
financial statements april 30, 2018 | 27 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 29 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 31 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
Investment Adviser in the investment decision-making process (including with respect to futures, fixed price offerings and over-the-counter transactions). The use of a broker that provides research and securities transaction services may result in a higher commission than that offered by a broker who does not provide such services. The Investment Adviser will determine in good faith whether the amount of commission is reasonable in relation to the value of research and services provided and whether the services provide lawful and appropriate assistance in its investment decision-making responsibilities.
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 33 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2018 (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 PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO ALLOCATION
April 30, 2018 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Bermuda | $ | 7,707,613 | 0.5 | % | ||||||
Brazil | 19,286,301 | 1.2 | ||||||||
Canada | 90,476,241 | 5.8 | ||||||||
Cayman Islands | 86,575,285 | 5.6 | ||||||||
Denmark | 25,157,545 | 1.6 | ||||||||
France | 183,999,902 | 11.9 | ||||||||
Germany | 201,669,336 | 13.0 | ||||||||
Hong Kong | 45,397,287 | 2.9 | ||||||||
Ireland | 37,112,840 | 2.4 | ||||||||
Japan | 83,498,007 | 5.4 | ||||||||
Jersey | 49,372,741 | 3.2 | ||||||||
South Korea | 21,730,645 | 1.4 | ||||||||
Spain | 42,082,865 | 2.7 | ||||||||
Switzerland | 299,169,377 | 19.3 | ||||||||
United Kingdom | 140,889,531 | 9.1 | ||||||||
United States | 53,418,926 | 3.4 | ||||||||
Registered Investments Companies: | ||||||||||
United States | 125,800,000 | 8.1 | ||||||||
Cash and Other Assets in Excess of Liabilities | 38,072,835 | 2.5 | ||||||||
NET ASSETS | $ | 1,551,417,277 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO ALLOCATION (continued)
April 30, 2018 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Basic Materials | $ | 58,399,143 | 3.8 | % | ||||||
Communications | 148,132,191 | 9.5 | ||||||||
Consumer Cyclical | 337,958,489 | 21.8 | ||||||||
Consumer Non-Cyclical | 414,892,701 | 26.7 | ||||||||
Financials | 211,319,691 | 13.6 | ||||||||
Industrials | 129,111,529 | 8.3 | ||||||||
Technology | 87,730,698 | 5.7 | ||||||||
Registered Investment Companies | 125,800,000 | 8.1 | ||||||||
Cash and Other Assets in Excess of Liabilities | 38,072,835 | 2.5 | ||||||||
NET ASSETS | $ | 1,551,417,277 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 3 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS
April 30, 2018 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (89.4%) | ||||||||||
BERMUDA (0.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
156,882 | IHS Markit, Ltd.1 | $ | 7,707,613 | |||||||
Total Bermuda | 7,707,613 | |||||||||
BRAZIL (1.2%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
2,882,529 | Ambev SA | 19,286,301 | ||||||||
Total Brazil | 19,286,301 | |||||||||
CANADA (5.8%) | ||||||||||
COMMUNICATIONS | ||||||||||
543,963 | Thomson Reuters Corp. | 21,907,883 | ||||||||
CONSUMER CYCLICAL | ||||||||||
635,089 | Alimentation Couche-Tard, Inc. (Class B) | 27,500,129 | ||||||||
FINANCIALS | ||||||||||
1,036,030 | Brookfield Asset Management, Inc. (Class A) | 41,068,229 | ||||||||
Total Canada | 90,476,241 | |||||||||
CAYMAN ISLANDS (5.6%) | ||||||||||
COMMUNICATIONS | ||||||||||
273,199 | Alibaba Group Holding, Ltd. ADR1 | 48,776,949 | ||||||||
150,651 | Baidu, Inc. ADR1 | 37,798,336 | ||||||||
Total Cayman Islands | 86,575,285 | |||||||||
DENMARK (1.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
296,969 | Coloplast AS (Class B) | 25,157,545 | ||||||||
Total Denmark | 25,157,545 | |||||||||
FRANCE (11.9%) | ||||||||||
BASIC MATERIALS | ||||||||||
449,525 | Air Liquide SA | 58,399,143 | ||||||||
CONSUMER CYCLICAL | ||||||||||
107,355 | LVMH Moet Hennessy Louis Vuitton SE | 37,364,812 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
FRANCE (continued) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
133,385 | Essilor International Cie Generale d’Optique SA | $ | 18,151,221 | |||||||
INDUSTRIALS | ||||||||||
143,420 | Safran SA | 16,819,015 | ||||||||
TECHNOLOGY | ||||||||||
388,142 | Capgemini SE | 53,265,711 | ||||||||
Total France | 183,999,902 | |||||||||
GERMANY (13.0%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
222,741 | Adidas AG | 54,763,733 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
928,731 | Fresenius SE & Co. KGaA | 70,898,780 | ||||||||
91,476 | Henkel AG & Co. KGaA (Preference Shares) | 11,635,770 | ||||||||
305,440 | Merck KGaA | 29,906,066 | ||||||||
112,440,616 | ||||||||||
TECHNOLOGY | ||||||||||
309,244 | SAP SE | 34,464,987 | ||||||||
Total Germany | 201,669,336 | |||||||||
HONG KONG (2.9%) | ||||||||||
FINANCIALS | ||||||||||
5,084,400 | AIA Group, Ltd. | 45,397,287 | ||||||||
Total Hong Kong | 45,397,287 | |||||||||
IRELAND (2.4%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
51,558 | Kerry Group, Plc. (Class A) | 5,243,166 | ||||||||
INDUSTRIALS | ||||||||||
898,064 | CRH, Plc. | 31,869,674 | ||||||||
Total Ireland | 37,112,840 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 5 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
JAPAN (5.4%) | ||||||||||
COMMUNICATIONS | ||||||||||
838,865 | Dentsu, Inc. | $ | 39,649,023 | |||||||
CONSUMER NON-CYCLICAL | ||||||||||
822,760 | Seven & i Holdings Co., Ltd. | 36,154,521 | ||||||||
INDUSTRIALS | ||||||||||
12,600 | Keyence Corp. | 7,694,463 | ||||||||
Total Japan | 83,498,007 | |||||||||
JERSEY (3.2%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
647,019 | Ferguson, Plc. | 49,372,741 | ||||||||
Total Jersey | 49,372,741 | |||||||||
SOUTH KOREA (1.4%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
16,984 | LG Household & Health Care, Ltd. | 21,730,645 | ||||||||
Total South Korea | 21,730,645 | |||||||||
SPAIN (2.7%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
1,358,708 | Industria de Diseno Textil SA | 42,082,865 | ||||||||
Total Spain | 42,082,865 | |||||||||
SWITZERLAND (19.3%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
457,367 | Cie Financiere Richemont SA | 43,430,503 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
126,324 | Lonza Group AG1 | 30,873,875 | ||||||||
849,979 | Nestle SA | 65,704,437 | ||||||||
96,578,312 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
SWITZERLAND (continued) | ||||||||||
FINANCIALS | ||||||||||
306,156 | Chubb, Ltd. | $ | 41,536,184 | |||||||
1,988,297 | Credit Suisse Group AG1 | 33,402,748 | ||||||||
36,499 | Partners Group Holding AG | 26,586,166 | ||||||||
101,525,098 | ||||||||||
INDUSTRIALS | ||||||||||
990,464 | ABB, Ltd. | 23,073,706 | ||||||||
222,056 | Kuehne + Nagel International AG | 34,561,758 | ||||||||
57,635,464 | ||||||||||
Total Switzerland | 299,169,377 | |||||||||
UNITED KINGDOM (9.1%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
3,894,809 | Compass Group, Plc. | 83,443,706 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
329,332 | Diageo, Plc. | 11,700,659 | ||||||||
1,050,605 | RELX, Plc. | 22,416,089 | ||||||||
34,116,748 | ||||||||||
FINANCIALS | ||||||||||
910,667 | Prudential, Plc. | 23,329,077 | ||||||||
Total United Kingdom | 140,889,531 | |||||||||
UNITED STATES (3.4%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
471,879 | Worldpay, Inc. (Class A)1 | 38,326,013 | ||||||||
INDUSTRIALS | ||||||||||
26,955 | Mettler-Toledo International, Inc.1 | 15,092,913 | ||||||||
Total United States | 53,418,926 | |||||||||
Total Common Stock (Identified cost $1,232,991,372) | 1,387,544,442 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 7 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Shares/ Units | Value | |||||||||
REGISTERED INVESTMENT COMPANIES (8.1%) | ||||||||||
125,800,000 | Morgan Stanley Institutional Liquidity Funds – Treasury Securities Portfolio, Institutional Share Class | $ | 125,800,000 | |||||||
Total Registered Investment Companies (Identified cost $125,800,000) | 125,800,000 |
TOTAL INVESTMENTS (Identified cost $1,358,791,372)2 | 97.5 | % | $ | 1,513,344,442 | ||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.5 | % | 38,072,835 | |||||||
NET ASSETS | 100.0 | % | $ | 1,551,417,277 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $1,358,791,372, the aggregate gross unrealized appreciation is $181,076,666 and the aggregate gross unrealized depreciation is $26,523,596, resulting in net unrealized appreciation of $154,553,070. |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | 9 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | ||||||||||||||
Common Stock: | ||||||||||||||||||
Bermuda | $ | 7,707,613 | $ | — | $ | — | $ | 7,707,613 | ||||||||||
Brazil | — | 19,286,301 | — | 19,286,301 | ||||||||||||||
Canada | 90,476,241 | — | — | 90,476,241 | ||||||||||||||
Cayman Islands | 86,575,285 | — | — | 86,575,285 | ||||||||||||||
Denmark | — | 25,157,545 | — | 25,157,545 | ||||||||||||||
France | — | 183,999,902 | — | 183,999,902 | ||||||||||||||
Germany | — | 201,669,336 | — | 201,669,336 | ||||||||||||||
Hong Kong | — | 45,397,287 | — | 45,397,287 | ||||||||||||||
Ireland | — | 37,112,840 | — | 37,112,840 | ||||||||||||||
Japan | — | 83,498,007 | — | 83,498,007 | ||||||||||||||
Jersey | — | 49,372,741 | — | 49,372,741 | ||||||||||||||
South Korea | — | 21,730,645 | — | 21,730,645 | ||||||||||||||
Spain | — | 42,082,865 | — | 42,082,865 | ||||||||||||||
Switzerland | 41,536,184 | 257,633,193 | — | 299,169,377 | ||||||||||||||
United Kingdom | — | 140,889,531 | — | 140,889,531 | ||||||||||||||
United States | 53,418,926 | — | — | 53,418,926 | ||||||||||||||
Registered Investment Companies: | ||||||||||||||||||
United States | 125,800,000 | — | — | 125,800,000 | ||||||||||||||
Investments, at value | $ | 405,514,249 | $ | 1,107,830,193 | $ | — | $ | 1,513,344,442 |
* | 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, 2018. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 11 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2018 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $1,358,791,372) | $ | 1,513,344,442 | ||||
Cash | 28,382,172 | |||||
Foreign currency at value (Identified cost $525,152) | 525,152 | |||||
Receivables for: | ||||||
Investments sold | 5,336,906 | |||||
Dividends | 4,784,048 | |||||
Shares sold | 607,000 | |||||
Other | 10,328 | |||||
Prepaid assets | 2,401 | |||||
Other assets | 877 | |||||
Total Assets | 1,552,993,326 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investment advisory and administrative fees | 787,324 | |||||
Shares redeemed | 664,060 | |||||
Custody and fund accounting fees | 71,115 | |||||
Professional fees | 50,789 | |||||
Transfer agent fees | 1,727 | |||||
Board of Trustees’ fees | 590 | |||||
Accrued expenses and other liabilities | 444 | |||||
Total Liabilities | 1,576,049 | |||||
NET ASSETS | $ | 1,551,417,277 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 1,353,426,932 | ||||
Undistributed net investment income | 5,752,785 | |||||
Accumulated net realized gain on investments in securities and foreign exchange transactions | 37,715,160 | |||||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 154,522,400 | |||||
Net Assets | $ | 1,551,417,277 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS I SHARES | ||||||
($1,551,417,277 ÷ 97,078,506 shares outstanding) | $15.98 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
STATEMENT OF OPERATIONS
For the six months ended April 30, 2018 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $1,028,681) | $ | 10,597,135 | ||||
Other income | 105 | |||||
Total Income | 10,597,240 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 4,661,129 | |||||
Custody and fund accounting fees | 217,227 | |||||
Professional fees | 47,756 | |||||
Board of Trustees’ fees | 26,724 | |||||
Transfer agent fees | 14,779 | |||||
Miscellaneous expenses | 48,618 | |||||
Total Expenses | 5,016,233 | |||||
Expense offset arrangement | (180,403 | ) | ||||
Net Expenses | 4,835,830 | |||||
Net Investment Income | 5,761,410 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 38,199,928 | |||||
Net realized loss on foreign exchange transactions and translations | (371,961 | ) | ||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 37,827,967 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (3,591,671 | ) | ||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | (15,787 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (3,607,458 | ) | ||||
Net Realized and Unrealized Gain | 34,220,509 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 39,981,919 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 13 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2018 (unaudited) | For the year ended October 31, 2017 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 5,761,410 | $ | 10,719,147 | ||||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 37,827,967 | 148,540,985 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (3,607,458 | ) | 41,034,703 | |||||||
Net increase in net assets resulting from operations | 39,981,919 | 200,294,835 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N* | N/A | (912,244 | ) | |||||||
Class I | (8,998,725 | ) | (20,664,200 | ) | ||||||
From net realized gains: | ||||||||||
Class I | (93,916,678 | ) | — | |||||||
Total dividends and distributions declared | (102,915,403 | ) | (21,576,444 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 210,550,706 | 425,081,311 | ** | |||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 4,374,243 | 1,195,485 | ||||||||
Proceeds from short-term redemption fees | — | 5,129 | ||||||||
Cost of shares redeemed | (26,115,998 | ) | (138,701,031 | ) ** | ||||||
Net increase in net assets resulting from share transactions | 188,808,951 | 287,580,894 | ||||||||
Total increase in net assets | 125,875,467 | 466,299,285 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 1,425,541,810 | 959,242,525 | ||||||||
End of period (including undistributed net investment income of $5,752,785 and $8,990,100, respectively) | $ | 1,551,417,277 | $ | 1,425,541,810 |
* | Effective February 24, 2017 Class N shares were converted into 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
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the period from November 1, 2017 to April 30, 2018 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2017* | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.75 | $ | 14.46 | $ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.06 | 0.14 | 0.34 | 0.26 | 0.40 | 0.28 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.37 | 2.47 | (0.14 | ) | (0.49 | ) | (0.38 | ) | 2.37 | ||||||||||||||||||
Total income (loss) from investment operations | 0.43 | 2.61 | 0.20 | (0.23 | ) | 0.02 | 2.65 | ||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.32 | ) | (0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | |||||||||||||||
From net realized gains | (1.10 | ) | — | — | — | — | — | ||||||||||||||||||||
Total dividends and distributions | (1.20 | ) | (0.32 | ) | (0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | |||||||||||||||
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 | $ | 15.98 | $ | 16.75 | $ | 14.46 | $ | 14.54 | $ | 15.16 | $ | 15.43 | |||||||||||||||
Total return | 2.83 | %3 | 18.51 | % | 1.51 | % | (1.42 | )% | 0.21 | % | 20.64 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 1,551 | $ | 1,426 | $ | 914 | $ | 68 | $ | 86 | $ | 75 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 0.70 | %4 | 0.74 | % | 0.85 | % | 0.89 | % | 0.90 | % | 0.90 | % | |||||||||||||||
Expense offset arrangement | 0.03 | %4 | 0.01 | % | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 0.67 | %4 | 0.73 | % | 0.85 | % | 0.89 | % | 0.90 | % | 0.90 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.80 | %4 | 0.91 | % | 2.41 | % | 1.77 | % | 2.62 | % | 2.01 | % | |||||||||||||||
Portfolio turnover rate | 60 | %3 | 130 | % | 12 | % | 18 | % | 15 | % | 14 | % |
* | Effective February 24, 2017 Class N shares were converted into 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.
financial statements april 30, 2018 | 15 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS
April 30, 2018 (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 June 6, 1997. 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, 2018, 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 (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 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 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
represent a return of capital are recorded as a reduction of cost of investments. Distributions received on securities that represent a capital gain are recorded 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, 2018 the Fund had no open contracts. |
E. | Foreign Currency Translations. The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange of such currency against the U.S. dollar to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Upon the purchase or sale of a security denominated in foreign currency, the Fund may enter into forward foreign currency exchange contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction. Reported net realized gains and losses arise from the sales of portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. The effect of changes in foreign exchange rates on foreign denominated securities is reflected in the net realized and unrealized gain or loss on investments in securities and foreign exchange transactions and translations and net change in unrealized appreciation or depreciation on investments in securities and foreign |
financial statements april 30, 2018 | 17 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
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 PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for the 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 amount of $102,915,403 to Class I shares during the six months ended April 30, 2018. 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 | ||||||||||||||||||||
2017: | $ | 21,576,444 | $ | — | $ | 21,576,444 | $ | — | $ | 21,576,444 | ||||||||||||||
2016: | 12,740,133 | — | 12,740,133 | — | 12,740,133 |
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 | Book unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2017: | $ | 17,227,537 | $ | 85,667,346 | $ | 102,894,883 | $ | — | $ | (100,912 | ) | $ | 158,129,858 | $ | 260,923,829 | |||||||||||||||||
2016: | 20,493,926 | — | 20,493,926 | (46,271,458 | ) | (7,009,826 | ) | 117,095,155 | 84,307,797 |
financial statements april 30, 2018 | 19 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, portfolio management and administrative services to the Fund. BBH employs a “manager-of-managers” investment approach, whereby it allocates the Fund’s assets to the Fund’s sub-adviser, currently 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 Sub-adviser and evaluates its performance results. 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-adviser a percentage from its investment advisory and administrative fees. For the six months ended April 30, 2018 the Fund incurred $4,661,129 for services under the Agreement. |
B. | 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, 2018, the Fund incurred $217,227 in custody and fund accounting fees. These fees for the Fund were reduced by $180,403 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 PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2018, was $2,614. This amount is included under line item “Custody and fund accounting fees” in the Statement of Operations. |
C. | 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, 2018, the Fund incurred $26,724 in independent Trustee compensation and expense reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2018, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $941,148,170 and $853,707,754 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 converted into Class I shares. Transactions in Class N shares and Class I shares were as follows: |
For the six months ended April 30, 2018 (unaudited) | For the year ended October 31, 2017 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | N/A | $ | N/A | 254,302 | $ | 3,635,185 | |||||||||||||
Shares issued in connection with reinvestments of dividends | N/A | N/A | 63,325 | 885,747 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | N/A | N/A | — | |||||||||||||||
Shares redeemed | N/A | N/A | (3,432,844 | ) | (50,037,147 | ) | |||||||||||||
Net decrease | N/A | $ | N/A | (3,115,217 | ) | $ | (45,516,215 | ) | |||||||||||
Class I | |||||||||||||||||||
Shares sold | 13,341,452 | $ | 210,550,706 | 27,598,208 | $ | 421,446,126 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 283,236 | 4,374,243 | 22,126 | 309,738 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | — | N/A | 5,129 | |||||||||||||||
Shares redeemed | (1,658,088 | ) | (26,115,998 | ) | (5,731,089 | ) | (88,663,884 | ) | |||||||||||
Net increase | 11,966,600 | $ | 188,808,951 | 21,889,245 | $ | 333,097,109 |
financial statements april 30, 2018 | 21 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
funds during periods when the Fund’s large cap securities are out of favor (large cap company risk). The extent of the Fund’s exposure to these risks in respect to these financial assets is included in their value as recorded in the Fund’s Statement of Assets and Liabilities.
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2018 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, 2018 | 23 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF FUND EXPENSES
April 30, 2018 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2018 (unaudited)
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,028 | $ | 3.37 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,021 | $ | 3.36 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.67% 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, 2018 | 25 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION
April 30, 2018 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 27 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
expectations for the Fund as well as the level of Fund performance in the context of its review. The Board noted that the Fund’s performance over the 1-year period may have been affected by the change in the Fund’s sub-advisory arrangement from Walter Scott & Partners Limited and Mondrian Investment Partners Limited to Select Equity Group during the fiscal year. Based on this information, the Board concluded that it was satisfied with the Fund’s investment results.
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 29 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST
April 30, 2018 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
investment methods and strategies, of Other Clients. Accordingly, such Other Clients may produce results that are materially different from those experienced by the Fund. Certain other conflicts of interest may arise in connection with a portfolio manager’s management of the Fund’s investments, on the one hand, and the investments of other funds or accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various funds or accounts managed by the Investment Adviser or Sub-Adviser could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. From time to time, the Investment Adviser and Sub-Adviser sponsor or manage other investment pools and accounts which engage in the same or similar businesses as the Fund using the same or similar investment strategies. To the extent that the same investment opportunities might be desirable for more than one account or fund, possible conflicts could arise in determining how to allocate them because the Investment Adviser or Sub-Adviser may have an incentive to allocate investment opportunities to certain accounts or funds. However, BBH and the Sub-Adviser have implemented policies and procedures designed to ensure that information relevant to investment decisions is disseminated promptly within its portfolio management teams and investment opportunities are allocated equitably among different clients. The policies and procedures require, among other things, objective allocation for limited investment opportunities, and documentation and review of justifications for any decisions to make investments only for select accounts or in a manner disproportionate to the size of the account. Nevertheless, access to investment opportunities may be allocated differently among accounts due to the particular characteristics of an account, such as size of the account, cash position, tax status, risk tolerance and investment restrictions or for other reasons.
financial statements april 30, 2018 | 31 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 33 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
securities may not, in retrospect, be the price at which those assets could have been sold during the period in which the particular fair values were used in determining the Fund’s net asset value. As a result, the Fund’s sale or redemption of its shares at net asset value, at a time when a holding or holdings are valued by BBH (pursuant to Board-adopted procedures) at fair value, may have the effect of diluting or increasing the economic interest of existing shareholders.
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 | 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, 2018 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Asset Backed Securities | $ | 2,862,684,310 | 42.7 | % | ||||||
Commercial Mortgage Backed Securities | 260,451,943 | 3.9 | ||||||||
Corporate Bonds | 2,222,856,447 | 33.2 | ||||||||
Loan Participations and Assignments | 584,915,722 | 8.7 | ||||||||
Municipal Bonds | 359,166,374 | 5.4 | ||||||||
U.S. Government Agency Obligations | 203,447,096 | 3.0 | ||||||||
U.S. Treasury Bills | 278,382,325 | 4.1 | ||||||||
Liabilities in Excess of Other Assets | (67,294,202 | ) | (1.0 | ) | ||||||
NET ASSETS | $ | 6,704,610,015 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (42.7%) | ||||||||||||||||||
$ 23,411,921 | AIM Aviation Finance, Ltd. 2015-1A1 | 02/15/40 | 4.213 | % | $ | 23,278,286 | ||||||||||||
27,070,000 | Ally Auto Receivables Trust 2018-1 | 09/15/20 | 2.140 | 26,988,232 | ||||||||||||||
48,170,000 | American Express Credit Account Master Trust 2018-1 | 10/17/22 | 2.670 | 48,063,207 | ||||||||||||||
18,564,427 | AmeriCredit Automobile Receivables Trust 2017-2 | 09/18/20 | 1.650 | 18,489,645 | ||||||||||||||
44,200,000 | AmeriCredit Automobile Receivables Trust 2017-4 | 05/18/21 | 1.830 | 43,981,409 | ||||||||||||||
10,516,573 | ARI Fleet Lease Trust 2017-A1 | 04/15/26 | 1.910 | 10,441,396 | ||||||||||||||
323,365 | AXIS Equipment Finance Receivables III LLC 2015-1A1 | 03/20/20 | 1.900 | 323,156 | ||||||||||||||
11,003,391 | AXIS Equipment Finance Receivables IV LLC 2016-1A1 | 11/20/21 | 2.210 | 10,933,575 | ||||||||||||||
24,500,000 | AXIS Equipment Finance Receivables IV LLC 2018-1A1 | 12/20/23 | 3.240 | 24,403,803 | ||||||||||||||
1,412,895 | BCC Funding X LLC 2015-11 | 10/20/20 | 2.224 | 1,411,296 | ||||||||||||||
8,881,553 | BCC Funding XIII LLC 2016-11 | 12/20/21 | 2.200 | 8,830,275 | ||||||||||||||
32,860,320 | Business Jet Securities LLC 2018-11 | 02/15/33 | 4.335 | 32,941,031 | ||||||||||||||
12,297,470 | Canadian Pacer Auto Receivables Trust 2017-1A1 | 12/19/19 | 1.772 | 12,258,287 | ||||||||||||||
34,020,000 | Canadian Pacer Auto Receivables Trust 2018-1A1 | 08/19/20 | 2.700 | 34,019,769 | ||||||||||||||
47,870,000 | Capital Auto Receivables Asset Trust 2018-11 | 10/20/20 | 2.540 | 47,832,326 | ||||||||||||||
24,759,900 | Capital Automotive REIT LLC 2017-1A1 | 04/15/47 | 3.870 | 24,545,999 | ||||||||||||||
20,630,000 | CarMax Auto Owner Trust 2018-1 | 05/17/21 | 2.230 | 20,519,467 | ||||||||||||||
44,810,000 | CarMax Auto Owner Trust 2018-2 | 08/16/21 | 2.730 | 44,792,228 | ||||||||||||||
4,289,557 | Cazenovia Creek Funding I LLC 2015-1A1 | 12/10/23 | 2.000 | 4,262,747 | ||||||||||||||
35,212,095 | CCG Receivables Trust 2017-11 | 11/14/23 | 1.840 | 34,886,972 | ||||||||||||||
12,090,000 | CCG Receivables Trust 2018-11 | 06/16/25 | 2.500 | 12,026,469 | ||||||||||||||
26,397,090 | Chesapeake Funding II LLC 2017-2A1 | 05/15/29 | 1.990 | 26,213,100 | ||||||||||||||
25,130,000 | Chesapeake Funding II LLC 2017-4A1 | 11/15/29 | 2.120 | 24,821,497 | ||||||||||||||
31,740,000 | Chesapeake Funding II LLC 2018-1A1 | 04/15/30 | 3.040 | 31,664,370 | ||||||||||||||
22,017,600 | Chesterfield Financial Holdings LLC 2014-1A1 | 12/15/34 | 4.500 | 21,972,717 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 3 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 47,700,000 | Citibank Credit Card Issuance Trust 2017-A2 | 01/19/21 | 1.740 | % | $ | 47,441,356 | ||||||||||||
14,190,000 | Credit Acceptance Auto Loan Trust 2016-2A1 | 11/15/23 | 2.420 | 14,162,365 | ||||||||||||||
15,480,000 | Credit Acceptance Auto Loan Trust 2017-1A1 | 10/15/25 | 2.560 | 15,384,789 | ||||||||||||||
50,700,000 | Credit Acceptance Auto Loan Trust 2017-2A1 | 02/17/26 | 2.550 | 49,954,624 | ||||||||||||||
25,550,000 | Credit Acceptance Auto Loan Trust 2017-3A1 | 06/15/26 | 2.650 | 25,232,388 | ||||||||||||||
37,120,000 | Daimler Trucks Retail Trust 2018-11 | 07/15/21 | 2.850 | 37,086,919 | ||||||||||||||
18,180,000 | DLL Securitization Trust 2017-A1 | 07/15/20 | 1.890 | 18,084,566 | ||||||||||||||
6,097,038 | Drive Auto Receivables Trust 2015-BA1 | 07/15/21 | 2.760 | 6,105,735 | ||||||||||||||
42,800,000 | Drive Auto Receivables Trust 2018-1 | 04/15/20 | 2.230 | 42,743,341 | ||||||||||||||
12,600,000 | Eagle I, Ltd. 2014-1A1 | 12/15/39 | 4.310 | 12,300,663 | ||||||||||||||
21,269,211 | ECAF I, Ltd. 2015-1A1 | 06/15/40 | 3.473 | 21,055,851 | ||||||||||||||
21,900,000 | Elm Trust 2016-1A1 | 06/20/25 | 4.163 | 21,934,219 | ||||||||||||||
16,818,333 | Emerald Aviation Finance, Ltd. 2013-11 | 10/15/38 | 4.650 | 16,933,352 | ||||||||||||||
8,237,538 | Engs Commercial Finance Trust 2015-1A1 | 10/22/21 | 2.310 | 8,202,645 | ||||||||||||||
17,278,671 | Engs Commercial Finance Trust 2018-1A1 | 02/22/21 | 2.970 | 17,258,220 | ||||||||||||||
10,968,535 | Enterprise Fleet Financing LLC 2016-21 | 02/22/22 | 1.740 | 10,912,399 | ||||||||||||||
14,175,946 | Enterprise Fleet Financing LLC 2017-11 | 07/20/22 | 2.130 | 14,100,297 | ||||||||||||||
20,810,000 | Enterprise Fleet Financing LLC 2017-21 | 01/20/23 | 1.970 | 20,644,022 | ||||||||||||||
23,660,000 | Enterprise Fleet Financing LLC 2017-31 | 05/22/23 | 2.130 | 23,401,616 | ||||||||||||||
24,320,000 | Enterprise Fleet Financing LLC 2018-11 | 10/20/23 | 2.870 | 24,262,094 | ||||||||||||||
30,761,549 | Finance of America Structured Securities Trust 2017-HB11,2,3 | 11/25/27 | 2.321 | 30,626,506 | ||||||||||||||
14,500,000 | Ford Credit Auto Owner Trust 2014-21 | 04/15/26 | 2.310 | 14,393,016 | ||||||||||||||
44,320,000 | Ford Credit Floorplan Master Owner Trust A 2017-2 | 09/15/22 | 2.160 | 43,513,252 | ||||||||||||||
6,937,270 | Foursight Capital Automobile Receivables Trust 2015-11 | 01/15/21 | 2.340 | 6,907,570 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$12,847,990 | Foursight Capital Automobile Receivables Trust 2017-11 | 04/15/22 | 2.370 | % | $12,767,902 | |||||||||||||
3,125,410 | FRS I LLC 2013-1A1 | 04/15/43 | 1.800 | 3,100,959 | ||||||||||||||
9,062,691 | Global Container Assets, Ltd. 2015-1A1 | 02/05/30 | 2.100 | 9,005,133 | ||||||||||||||
19,700,000 | GM Financial Consumer Automobile Receivables Trust 2018-2 | 05/17/21 | 2.550 | 19,698,873 | ||||||||||||||
6,587,190 | GM Financial Consumer Automobile 2017-1A1 | 03/16/20 | 1.510 | 6,563,785 | ||||||||||||||
12,180,000 | GM Financial Consumer Automobile 2017-1A1 | 10/18/21 | 1.780 | 12,015,609 | ||||||||||||||
16,510,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 1.650 | 16,504,474 | ||||||||||||||
6,525,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 1.970 | 6,522,798 | ||||||||||||||
10,730,000 | GMF Floorplan Owner Revolving Trust 2015-11 | 05/15/20 | 2.220 | 10,726,701 | ||||||||||||||
32,520,000 | GMF Floorplan Owner Revolving Trust 2017-21 | 07/15/22 | 2.130 | 31,893,662 | ||||||||||||||
11,280,000 | GreatAmerica Leasing Receivables Funding LLC 2018-11 | 05/15/20 | 2.350 | 11,235,453 | ||||||||||||||
24,900,000 | Hertz Fleet Lease Funding LP 2017-11 | 04/10/31 | 2.130 | 24,782,833 | ||||||||||||||
58,000,000 | Honda Auto Receivables 2018-1 Owner Trust | 06/15/20 | 2.360 | 57,878,165 | ||||||||||||||
32,160,000 | Hyundai Auto Receivables Trust 2018-A | 04/15/21 | 2.550 | 32,119,922 | ||||||||||||||
10,800,000 | John Deere Owner Trust 2018-A | 10/15/20 | 2.420 | 10,767,370 | ||||||||||||||
557,313 | Leaf Receivables Funding 12 LLC 2017-11 | 05/15/19 | 1.720 | 557,127 | ||||||||||||||
24,110,000 | Lendmark Funding Trust 2016-2A1 | 04/21/25 | 3.260 | 24,150,278 | ||||||||||||||
38,860,000 | Lendmark Funding Trust 2017-1A1 | 12/22/25 | 2.830 | 38,564,454 | ||||||||||||||
18,340,000 | Lendmark Funding Trust 2017-2A1 | 05/20/26 | 2.800 | 18,178,474 | ||||||||||||||
19,500,000 | Mariner Finance Issuance Trust 2017-AA1 | 02/20/29 | 3.620 | 19,532,237 | ||||||||||||||
55,510,000 | Mariner Finance Issuance Trust 2017-BA1 | 12/20/29 | 2.920 | 54,680,092 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 5 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 1,911,747 | MCA Fund I Holding LLC 2014-1 (3-Month USD-LIBOR + 2.000%)1,2 | 08/15/24 | 3.839 | % | $ | 1,912,493 | ||||||||||||
22,198,138 | MCA Fund II Holding LLC 2017-1 (3-Month USD-LIBOR + 1.650%)1,2 | 08/15/28 | 3.489 | 22,197,916 | ||||||||||||||
10,763,318 | MMAF Equipment Finance LLC 2017-AA1 | 05/18/20 | 1.730 | 10,724,241 | ||||||||||||||
31,710,000 | MMAF Equipment Finance LLC 2017-B1 | 10/15/20 | 1.930 | 31,468,950 | ||||||||||||||
23,130,000 | Motor 2017-1 Plc. 2017-1A (1-Month USD-LIBOR + 0.530%)1,2 | 09/25/24 | 2.427 | 23,156,253 | ||||||||||||||
3,573,378 | Nations Equipment Finance Funding III LLC 2016-1A1 | 02/20/21 | 3.610 | 3,575,339 | ||||||||||||||
8,840,753 | Nationstar HECM Loan Trust 2017-1A1 | 05/25/27 | 1.968 | 8,781,354 | ||||||||||||||
13,053,926 | Nationstar HECM Loan Trust 2017-2A1,2,3 | 09/25/27 | 2.038 | 12,964,180 | ||||||||||||||
32,905,375 | Nationstar HECM Loan Trust 2018-1A1,2,3 | 02/25/28 | 2.760 | 32,905,369 | ||||||||||||||
10,705,084 | Navitas Equipment Receivables LLC 2016-11 | 06/15/21 | 2.200 | 10,651,392 | ||||||||||||||
12,104,084 | New Mexico Educational Assistance Foundation 2013-1 (1-Month USD-LIBOR + 0.700%)2 | 01/02/25 | 2.583 | 12,085,323 | ||||||||||||||
4,927,564 | Newtek Small Business Loan Trust 2010-1 (1-Month USD-LIBOR + 2.300%)1,2 | 02/25/41 | 4.197 | 4,922,409 | ||||||||||||||
15,314,931 | Newtek Small Business Loan Trust 2016-1A (1-Month USD-LIBOR + 3.000%)1,2 | 02/25/42 | 4.897 | 15,619,698 | ||||||||||||||
22,200,000 | NextGear Floorplan Master Owner Trust 2016-2A1 | 09/15/21 | 2.190 | 21,961,581 | ||||||||||||||
16,020,000 | NextGear Floorplan Master Owner Trust 2017-2A1 | 10/17/22 | 2.560 | 15,754,603 | ||||||||||||||
40,800,000 | Nissan Auto Receivables 2018-A Owner Trust | 12/15/20 | 2.390 | 40,703,904 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 6,140,000 | NRZ Advance Receivables Trust Advance Receivables Backed 2016-T11 | 06/15/49 | 2.751 | % | $ | 6,061,347 | ||||||||||||
29,565,000 | OnDeck Asset Securitization Trust LLC 2018-1A1 | 04/18/22 | 3.500 | 29,564,128 | ||||||||||||||
2,405,077 | OneMain Financial Issuance Trust 2014-2A1 | 09/18/24 | 3.020 | 2,405,375 | ||||||||||||||
26,190,000 | OneMain Financial Issuance Trust 2015-1A1 | 03/18/26 | 3.850 | 26,281,306 | ||||||||||||||
9,155,628 | OSCAR US Funding Trust VI LLC 2017-1A1 | 05/11/20 | 2.300 | 9,107,625 | ||||||||||||||
27,919,436 | OSCAR US Funding Trust VII LLC 2017-2A1 | 11/10/20 | 2.130 | 27,773,417 | ||||||||||||||
26,300,000 | OSCAR US Funding Trust VIII LLC 2018-1A1 | 04/12/21 | 2.910 | 26,228,254 | ||||||||||||||
6,596,664 | Oxford Finance Funding LLC 2014-1A1 | 12/15/22 | 3.475 | 6,520,084 | ||||||||||||||
14,750,000 | Oxford Finance Funding LLC 2016-1A1 | 06/17/24 | 3.968 | 14,697,810 | ||||||||||||||
29,000,000 | PFS Financing Corp. 2017-AA (1-Month USD-LIBOR + 0.580%)1,2 | 03/15/21 | 2.477 | 29,031,311 | ||||||||||||||
26,450,000 | PFS Financing Corp. 2017-BA1 | 07/15/22 | 2.220 | 25,903,728 | ||||||||||||||
34,310,000 | PFS Financing Corp. 2017-D1 | 10/17/22 | 2.400 | 33,683,623 | ||||||||||||||
21,680,000 | PFS Financing Corp. 2018-B1 | 02/15/23 | 2.890 | 21,474,181 | ||||||||||||||
9,768,668 | ReadyCap Lending Small Business Loan Trust 2015-1 (1-Month USD-LIBOR + 1.250%)2 | 12/25/38 | 3.147 | 9,729,099 | ||||||||||||||
19,986,287 | Santander Drive Auto Receivables Trust 2015-3 | 01/15/21 | 2.740 | 19,984,543 | ||||||||||||||
16,603,244 | Santander Drive Auto Receivables Trust 2017-2 | 03/16/20 | 1.600 | 16,590,988 | ||||||||||||||
24,090,000 | Santander Drive Auto Receivables Trust 2018-1 | 11/16/20 | 2.100 | 24,001,330 | ||||||||||||||
8,885,000 | Santander Drive Auto Receivables Trust 2018-2 | 09/15/21 | 2.750 | 8,872,056 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 7 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 20,120,000 | Securitized Term Auto Receivables Trust 2018-1A1 | 12/29/20 | 2.807 | % | $ | 20,112,564 | ||||||||||||
17,844,480 | Shenton Aircraft Investment I, Ltd. 2015-1A1 | 10/15/42 | 4.750 | 18,147,624 | ||||||||||||||
33,095,816 | Spirit Master Funding LLC 2014-4A1 | 01/20/45 | 3.501 | 33,118,536 | ||||||||||||||
41,440,055 | Spirit Master Funding LLC 2017-1A1 | 12/20/47 | 4.360 | 41,476,191 | ||||||||||||||
9,753,080 | Spirit Master Funding VII LLC 2013-1A1 | 12/20/43 | 3.887 | 9,757,119 | ||||||||||||||
34,770,000 | SPS Servicer Advance Receivables Trust Advance Receivables Backed Notes 2016-T21 | 11/15/49 | 2.750 | 34,867,432 | ||||||||||||||
16,578,008 | STORE Master Funding LLC 2013-1A1 | 03/20/43 | 4.160 | 16,533,894 | ||||||||||||||
11,877,402 | STORE Master Funding LLC 2013-2A1 | 07/20/43 | 4.370 | 11,908,533 | ||||||||||||||
19,878,541 | STORE Master Funding LLC 2013-3A1 | 11/20/43 | 4.240 | 19,877,229 | ||||||||||||||
2,105 | TAL Advantage V LLC 2014-2A1 | 05/20/39 | 1.700 | 2,103 | ||||||||||||||
15,602,500 | TAL Advantage V LLC 2014-3A1 | 11/21/39 | 3.270 | 15,338,595 | ||||||||||||||
4,628,113 | Tax Ease Funding 2016-1 LLC 2016-1A1 | 06/15/28 | 3.131 | 4,624,551 | ||||||||||||||
25,165,187 | Textainer Marine Containers V, Ltd. 2017-1A1 | 05/20/42 | 3.720 | 24,905,291 | ||||||||||||||
34,247,878 | Textainer Marine Containers V, Ltd. 2017-2A1 | 06/20/42 | 3.520 | 33,709,361 | ||||||||||||||
8,640,261 | TLF National Tax Lien Trust 2017-1A1 | 12/15/29 | 3.090 | 8,612,306 | ||||||||||||||
61,740,000 | Trafigura Securitisation Finance, Plc. 2017-1A1 | 12/15/20 | 2.470 | 60,360,605 | ||||||||||||||
52,266,327 | Triton Container Finance IV LLC 2017-2A1 | 08/20/42 | 3.620 | 51,492,210 | ||||||||||||||
11,662,821 | United Auto Credit Securitization Trust 2018-11 | 04/10/20 | 2.260 | 11,640,159 | ||||||||||||||
2,492,721 | Utah State Board of Regents 2011-1 (3-Month USD-LIBOR + 0.850%)2 | 05/01/29 | 2.623 | 2,499,252 | ||||||||||||||
12,488,094 | Veros Automobile Receivables Trust 2017-11 | 04/17/23 | 2.840 | 12,433,100 | ||||||||||||||
42,560,000 | Westlake Automobile Receivables Trust 2018-1A1 | 12/15/20 | 2.240 | 42,397,187 | ||||||||||||||
19,570,000 | World Financial Network Credit Card Master Trust 2016-B | 06/15/22 | 1.440 | 19,507,047 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 64,480,000 | World Financial Network Credit Card Master Trust 2017-A | 03/15/24 | 2.120 | % | $ | 63,364,805 | ||||||||||||
10,310,000 | World Financial Network Credit Card Master Trust 2017-B | 06/15/23 | 1.980 | 10,192,149 | ||||||||||||||
50,885,000 | World Financial Network Credit Card Master Trust 2018-A | 12/16/24 | 3.070 | 50,731,383 | ||||||||||||||
23,930,000 | World Omni Auto Receivables Trust 2018-A | 05/17/21 | 2.190 | 23,835,043 | ||||||||||||||
29,900,000 | World Omni Auto Receivables Trust 2018-B | 07/15/21 | 2.570 | 29,860,670 | ||||||||||||||
30,450,000 | WRG Debt Funding II LLC 2017-11,4 | 03/15/26 | 4.458 | 30,294,796 | ||||||||||||||
Total Asset Backed Securities (Identified cost $2,878,483,860) | 2,862,684,310 | |||||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (3.9%) | ||||||||||||||||||
15,540,000 | Aventura Mall Trust 2013-AVM1,2,3 | 12/05/32 | 3.743 | 15,547,162 | ||||||||||||||
26,807,000 | BB-UBS Trust 2012-TFT1,2,3 | 06/05/30 | 3.468 | 26,015,454 | ||||||||||||||
6,349,000 | BHMS Mortgage Trust 2014-ATLS (1-Month USD-LIBOR + 2.450%)1,2 | 07/05/33 | 4.337 | 6,372,317 | ||||||||||||||
32,018,000 | BHMS Mortgage Trust 2014-ATLS1,2,3 | 07/05/33 | 4.691 | 31,924,258 | ||||||||||||||
30,910,000 | BXMT, Ltd. 2017-FL1 (1-Month USD-LIBOR + 0.870%)1,2 | 06/15/35 | 2.766 | 30,913,277 | ||||||||||||||
31,329,000 | CG-CCRE Commercial Mortgage Trust 2014-FL2 (1-Month USD-LIBOR + 2.900%)1,2 | 11/15/31 | 4.797 | 31,204,583 | ||||||||||||||
5,606,418 | Commercial Mortgage Pass Through Certificates 2013-GAM1 | 02/10/28 | 1.705 | 5,487,966 | ||||||||||||||
9,690,000 | Commercial Mortgage Pass Through Certificates 2013-GAM1,2,3 | 02/10/28 | 3.531 | 9,323,159 | ||||||||||||||
22,660,000 | Commercial Mortgage Pass Through Certificates 2014-TWC (1-Month USD-LIBOR + 0.850%)1,2 | 02/13/32 | 2.745 | 22,681,287 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 9 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (continued) | ||||||||||||||||||||||
$ 29,435,000 | Hospitality Mortgage Trust 2017-HIT (1-Month USD-LIBOR + 0.850%)1,2 | 05/08/30 | 2.745 | % | $ | 29,480,983 | ||||||||||||||||
32,615,000 | Morgan Stanley Capital I Trust 2017-CLS (1-Month USD-LIBOR + 0.700%)1,2 | 11/15/34 | 2.597 | 32,655,971 | ||||||||||||||||||
7,370,691 | WFCG Commercial Mortgage Trust 2015-BXRP (1-Month USD-LIBOR + 1.122%)1,2 | 11/15/29 | 3.019 | 7,373,003 | ||||||||||||||||||
11,468,922 | WFCG Commercial Mortgage Trust 2015-BXRP (1-Month USD-LIBOR + 1.472%)1,2 | 11/15/29 | 3.369 | 11,472,523 | ||||||||||||||||||
Total Commercial Mortgage Backed Securities | ||||||||||||||||||||||
(Identified cost $261,690,773) | 260,451,943 | |||||||||||||||||||||
CORPORATE BONDS (33.2%) | ||||||||||||||||||||||
AEROSPACE/DEFENSE (0.4%) | ||||||||||||||||||||||
24,988,000 | BAE Systems Holdings, Inc.1 | 06/01/19 | 6.375 | 25,889,774 | ||||||||||||||||||
AUTO MANUFACTURERS (2.5%) | ||||||||||||||||||||||
58,193,000 | Ford Motor Credit Co. LLC | 10/01/18 | 2.875 | 58,197,974 | ||||||||||||||||||
27,950,000 | Ford Motor Credit Co. LLC | 01/08/19 | 2.943 | 27,965,308 | ||||||||||||||||||
33,898,000 | General Motors Co. | 10/02/18 | 3.500 | 34,021,758 | ||||||||||||||||||
22,260,000 | General Motors Financial Co., Inc. | 05/15/18 | 3.250 | 22,267,156 | ||||||||||||||||||
28,550,000 | General Motors Financial Co., Inc. | 01/15/19 | 3.100 | 28,606,358 | ||||||||||||||||||
171,058,554 | ||||||||||||||||||||||
BANKS (12.5%) | ||||||||||||||||||||||
24,290,000 | ANZ New Zealand (Int’l), Ltd., London Branch1 | 02/01/19 | 2.250 | 24,202,354 | ||||||||||||||||||
25,580,000 | ANZ New Zealand (Int’l), Ltd., London Branch1 | 09/23/19 | 2.600 | 25,434,701 | ||||||||||||||||||
32,360,000 | Bank of America Corp. | 06/01/19 | 7.625 | 33,993,660 | ||||||||||||||||||
20,435,000 | BNZ International Funding, Ltd., London Branch1 | 02/21/20 | 2.400 | 20,195,193 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
BANKS (continued) | ||||||||||||||||||
$ 24,335,000 | BNZ International Funding, Ltd., London Branch1 | 03/02/21 | 2.750 | % | $ | 23,914,694 | ||||||||||||
39,974,000 | Citigroup, Inc. | 05/15/18 | 6.125 | 40,028,764 | ||||||||||||||
38,280,000 | Citizens Bank NA | 03/14/19 | 2.500 | 38,209,492 | ||||||||||||||
17,940,000 | Commonwealth Bank of Australia | 09/06/19 | 2.300 | 17,795,564 | ||||||||||||||
26,250,000 | Commonwealth Bank of Australia1 | 10/15/19 | 5.000 | 26,981,241 | ||||||||||||||
17,080,000 | Fifth Third Bank | 08/20/18 | 2.150 | 17,061,777 | ||||||||||||||
2,627,000 | Fifth Third Bank | 03/15/19 | 2.300 | 2,619,806 | ||||||||||||||
18,160,000 | Goldman Sachs Group, Inc. | 01/31/19 | 2.625 | 18,158,918 | ||||||||||||||
14,760,000 | Goldman Sachs Group, Inc. | 02/15/19 | 7.500 | 15,314,993 | ||||||||||||||
20,298,000 | Huntington National Bank | 06/30/18 | 2.000 | 20,285,966 | ||||||||||||||
20,035,000 | JPMorgan Chase Bank NA (3-Month USD-LIBOR + 0.350%)2 | 04/26/21 | 3.086 | 20,021,088 | ||||||||||||||
40,856,000 | KeyBank NA | 03/08/19 | 2.350 | 40,777,280 | ||||||||||||||
49,001,000 | Morgan Stanley | 01/24/19 | 2.500 | 48,974,135 | ||||||||||||||
11,920,000 | MUFG Americas Holdings Corp. | 02/10/20 | 2.250 | 11,739,218 | ||||||||||||||
11,420,000 | MUFG Bank, Ltd.1 | 09/09/18 | 2.700 | 11,426,598 | ||||||||||||||
22,990,000 | MUFG Bank, Ltd.1 | 09/14/18 | 2.150 | 22,955,149 | ||||||||||||||
32,252,000 | MUFG Bank, Ltd.1 | 03/10/19 | 2.300 | 32,104,659 | ||||||||||||||
13,760,000 | National Australia Bank, Ltd. | 07/12/19 | 1.375 | 13,526,078 | ||||||||||||||
38,712,000 | Royal Bank of Canada | 04/15/19 | 1.625 | 38,343,065 | ||||||||||||||
39,890,000 | Skandinaviska Enskilda Banken AB | 03/11/20 | 2.300 | 39,338,538 | ||||||||||||||
12,345,000 | Skandinaviska Enskilda Banken AB | 03/15/21 | 2.625 | 12,127,990 | ||||||||||||||
18,165,000 | State Street Corp. | 05/15/18 | 1.350 | 18,158,337 | ||||||||||||||
34,393,000 | Svenska Handelsbanken AB | 01/25/19 | 2.500 | 34,355,329 | ||||||||||||||
25,280,000 | Toronto-Dominion Bank | 09/10/18 | 2.625 | 25,301,130 | ||||||||||||||
25,085,000 | Toronto-Dominion Bank | 04/07/21 | 2.125 | 24,346,227 | ||||||||||||||
11,500,000 | Wells Fargo Bank NA | 05/24/19 | 1.750 | 11,390,885 | ||||||||||||||
54,350,000 | Wells Fargo Bank NA | 01/15/20 | 2.400 | 53,840,366 | ||||||||||||||
10,000,000 | Westpac Banking Corp. | 07/30/18 | 2.250 | 10,001,794 | ||||||||||||||
11,428,000 | Westpac Banking Corp. | 11/19/19 | 4.875 | 11,757,382 | ||||||||||||||
35,277,000 | Westpac Banking Corp. | 03/06/20 | 2.150 | 34,725,157 | ||||||||||||||
839,407,528 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 11 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
BEVERAGES (0.3%) | ||||||||||||||||||
$ 19,020,000 | Anheuser-Busch InBev Finance, Inc. | 02/01/21 | 2.650 | % | $ | 18,799,332 | ||||||||||||
BIOTECHNOLOGY (0.8%) | ||||||||||||||||||
50,910,000 | Amgen, Inc. | 05/10/19 | 1.900 | 50,516,614 | ||||||||||||||
COMMERCIAL SERVICES (0.4%) | ||||||||||||||||||
27,350,000 | United Rentals North America, Inc. | 07/15/23 | 4.625 | 27,760,250 | ||||||||||||||
COMPUTERS (0.4%) | ||||||||||||||||||
6,790,000 | Dell International LLC / EMC Corp.1 | 06/15/21 | 4.420 | 6,916,962 | ||||||||||||||
17,250,000 | Dell International LLC / EMC Corp.1 | 06/15/23 | 5.450 | 18,143,479 | ||||||||||||||
25,060,441 | ||||||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (1.6%) | ||||||||||||||||||
1,174,756 | Ahold Lease Series 2001-A-1 Pass Through Trust | 01/02/20 | 7.820 | 1,192,221 | ||||||||||||||
15,950,000 | Air Lease Corp. | 09/04/18 | 2.625 | 15,951,998 | ||||||||||||||
20,500,000 | Air Lease Corp. | 01/15/19 | 3.375 | 20,563,716 | ||||||||||||||
3,750,000 | Alliance Data Systems Corp.1 | 11/01/21 | 5.875 | 3,815,625 | ||||||||||||||
8,790,000 | Alliance Data Systems Corp.1 | 08/01/22 | 5.375 | 8,833,950 | ||||||||||||||
8,500,000 | Credit Acceptance Corp. | 02/15/21 | 6.125 | 8,542,500 | ||||||||||||||
49,455,000 | Drawbridge Special Opportunities Fund1 | 08/01/21 | 5.000 | 49,720,156 | ||||||||||||||
108,620,166 | ||||||||||||||||||
ELECTRIC (2.8%) | ||||||||||||||||||
37,629,000 | Berkshire Hathaway Energy Co. | 11/15/18 | 2.000 | 37,521,489 | ||||||||||||||
17,618,000 | Dominion Energy, Inc. | 01/15/19 | 1.875 | 17,506,608 | ||||||||||||||
54,231,000 | Duke Energy Progress LLC | 01/15/19 | 5.300 | 55,181,348 | ||||||||||||||
30,395,000 | Electricite de France SA1 | 01/22/19 | 2.150 | 30,221,264 | ||||||||||||||
17,000,000 | Electricite de France SA1 | 10/13/20 | 2.350 | 16,715,807 | ||||||||||||||
8,080,000 | Mississippi Power Co. (3-Month USD-LIBOR + 0.650%)2 | 03/27/20 | 2.942 | 8,082,128 | ||||||||||||||
19,690,000 | Nevada Power Co. | 04/15/20 | 2.750 | 19,632,191 | ||||||||||||||
184,860,835 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
HEALTHCARE-SERVICES (0.4%) | ||||||||||||||||||
$ 26,155,000 | UnitedHealth Group, Inc. | 07/16/18 | 1.900 | % | $ | 26,128,845 | ||||||||||||
INSURANCE (3.5%) | ||||||||||||||||||
15,775,000 | Athene Global Funding1 | 10/23/18 | 2.875 | 15,775,767 | ||||||||||||||
24,310,000 | Athene Global Funding1 | 01/25/22 | 4.000 | 24,485,612 | ||||||||||||||
12,290,000 | Enstar Group, Ltd. | 03/10/22 | 4.500 | 12,251,377 | ||||||||||||||
38,630,000 | Fairfax Financial Holdings, Ltd.1 | 05/15/21 | 5.800 | 40,664,875 | ||||||||||||||
7,638,000 | Marsh & McLennan Cos, Inc. | 09/10/19 | 2.350 | 7,574,287 | ||||||||||||||
22,800,000 | New York Life Global Funding1 | 04/09/20 | 2.000 | 22,366,702 | ||||||||||||||
31,810,000 | Sirius International Group, Ltd.1 | 11/01/26 | 4.600 | 29,833,963 | ||||||||||||||
31,750,000 | United Insurance Holdings Corp. | 12/15/27 | 6.250 | 32,596,031 | ||||||||||||||
33,100,000 | Vitality Re V, Ltd. (Underlying Investment Yield + 1.750%)1,2 | 01/07/20 | 3.557 | 33,073,520 | ||||||||||||||
16,740,000 | Vitality Re VIII, Ltd. (Underlying Investment Yield + 1.750%)1,2 | 01/08/22 | 3.557 | 16,798,590 | ||||||||||||||
235,420,724 | ||||||||||||||||||
INTERNET (0.2%) | ||||||||||||||||||
11,680,000 | Expedia Group, Inc. | 08/15/20 | 5.950 | 12,320,598 | ||||||||||||||
INVESTMENT COMPANIES (1.3%) | ||||||||||||||||||
6,800,000 | Ares Capital Corp. | 11/30/18 | 4.875 | 6,866,758 | ||||||||||||||
1,845,000 | Ares Capital Corp. | 01/19/22 | 3.625 | 1,805,162 | ||||||||||||||
35,855,000 | Business Development Corp. of America1 | 12/30/22 | 4.750 | 35,487,398 | ||||||||||||||
1,605,671 | Carlyle Investment Management LLC4 | 07/15/19 | 3.296 | 1,605,671 | ||||||||||||||
22,645,000 | FS Investment Corp. | 01/15/20 | 4.250 | 22,594,310 | ||||||||||||||
21,515,000 | PennantPark Investment Corp. | 10/01/19 | 4.500 | 21,460,521 | ||||||||||||||
89,819,820 | ||||||||||||||||||
MACHINERY – CONSTRUCTION & MINING (1.2%) | ||||||||||||||||||
19,495,000 | Caterpillar Financial Services Corp. | 03/22/19 | 1.900 | 19,392,614 | ||||||||||||||
10,397,000 | Caterpillar Financial Services Corp. | 05/18/19 | 1.350 | 10,255,968 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 13 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
MACHINERY – CONSTRUCTION & MINING (continued) | ||||||||||||||||||
$ 17,525,000 | Caterpillar Financial Services Corp. | 01/10/20 | 2.100 | % | $ | 17,316,261 | ||||||||||||
35,330,000 | Caterpillar Financial Services Corp. | 03/15/21 | 2.900 | 35,208,490 | ||||||||||||||
82,173,333 | ||||||||||||||||||
MEDIA (0.1%) | ||||||||||||||||||
8,781,000 | TEGNA, Inc. | 10/15/19 | 5.125 | 8,846,858 | ||||||||||||||
OIL & GAS (0.0%) | ||||||||||||||||||
6,691,713 | Odebrecht Offshore Drilling Finance, Ltd. (6.72% cash, 1.00% PIK)1,5 | 12/01/26 | 7.720 | 1,940,597 | ||||||||||||||
PHARMACEUTICALS (1.2%) | ||||||||||||||||||
14,270,000 | AbbVie, Inc. | 05/14/18 | 1.800 | 14,267,717 | ||||||||||||||
34,063,000 | AbbVie, Inc. | 05/14/20 | 2.500 | 33,658,565 | ||||||||||||||
14,000,000 | AbbVie, Inc. | 05/14/21 | 2.300 | 13,606,512 | ||||||||||||||
16,787,000 | GlaxoSmithKline Capital, Inc. | 05/15/18 | 5.650 | 16,808,653 | ||||||||||||||
78,341,447 | ||||||||||||||||||
PIPELINES (1.2%) | ||||||||||||||||||
36,120,000 | Kinder Morgan Energy Partners LP | 02/01/19 | 2.650 | 36,092,622 | ||||||||||||||
22,261,000 | TransCanada PipeLines, Ltd. | 01/15/19 | 3.125 | 22,330,217 | ||||||||||||||
18,843,000 | TransCanada PipeLines, Ltd. | 01/15/19 | 7.125 | 19,414,022 | ||||||||||||||
77,836,861 | ||||||||||||||||||
REAL ESTATE (0.2%) | ||||||||||||||||||
11,490,000 | Prologis International Funding II SA1 | 02/15/20 | 4.875 | 11,779,728 | ||||||||||||||
RETAIL (0.5%) | ||||||||||||||||||
31,840,000 | Walmart, Inc.2,3 | 06/01/18 | 5.498 | 31,913,194 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||||||
TELECOMMUNICATIONS (1.0%) | ||||||||||||||||||||||
$ 43,638,000 | Deutsche Telekom International Finance BV | 08/20/18 | 6.750 | % | $ | 44,183,190 | ||||||||||||||||
24,672,375 | Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint Spectrum Co. III LLC1 | 03/20/23 | 3.360 | 24,582,814 | ||||||||||||||||||
68,766,004 | ||||||||||||||||||||||
TRANSPORTATION (0.3%) | ||||||||||||||||||||||
16,626,000 | Burlington Northern Santa Fe LLC | 10/01/19 | 4.700 | 17,048,489 | ||||||||||||||||||
TRUCKING & LEASING (0.4%) | ||||||||||||||||||||||
11,480,000 | GATX Corp. | 07/30/18 | 2.375 | 11,473,830 | ||||||||||||||||||
17,180,000 | Park Aerospace Holdings, Ltd.1 | 08/15/22 | 5.250 | 17,072,625 | ||||||||||||||||||
28,546,455 | ||||||||||||||||||||||
Total Corporate Bonds (Identified cost $2,230,913,908) | 2,222,856,447 | |||||||||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (8.7%) | ||||||||||||||||||||||
20,000,000 | American Tower Corporation (3-Month USD-LIBOR + 0.875%)2 | 03/29/19 | 3.238 | 20,000,000 | ||||||||||||||||||
18,998,194 | Analog Devices, Inc. (1-Month USD-LIBOR + 1.125%)2 | 09/23/19 | 3.025 | 18,998,194 | ||||||||||||||||||
3,826,381 | Analog Devices, Inc. (1-Month USD-LIBOR + 1.250%)2 | 09/23/21 | 3.150 | 3,821,598 | ||||||||||||||||||
9,633,139 | Aria Energy Operating LLC (1-Month USD-LIBOR + 4.500%)2 | 05/27/22 | 6.401 | 9,729,471 | ||||||||||||||||||
40,000,000 | AT&T, Inc. Term A (3-Month USD-LIBOR + 1.000%)2 | 05/15/19 | 3.363 | 39,900,000 | ||||||||||||||||||
13,532,738 | Avolon TLB Borrower 1 (US) LLC Term B2 (1-Month USD-LIBOR + 2.250%)2 | 03/21/22 | 4.147 | 13,553,443 | ||||||||||||||||||
5,000,000 | BCP Renaissance Parent LLC (3-Month USD-LIBOR + 4.000%)2 | 10/31/24 | 6.359 | 5,021,100 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 15 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||
$ 21,318,633 | Brixmor Operating Partnership LP (1-Month USD-LIBOR + 1.400%)2 | 03/18/19 | 3.338 | % | $ | 21,318,633 | ||||||||||||
35,112,000 | Charter Communications Operating LLC (CCO Safari LLC) Term B (1-Month USD-LIBOR + 2.000%)2 | 04/30/25 | 3.910 | 35,249,990 | ||||||||||||||
24,691,875 | Dell International LLC Term A2 (1-Month USD-LIBOR + 1.750%)2 | 09/07/21 | 3.660 | 24,722,740 | ||||||||||||||
25,124,587 | Dell International LLC Term B (1-Month USD-LIBOR + 2.000%)2 | 09/07/23 | 3.910 | 25,195,187 | ||||||||||||||
34,844,329 | Delos Finance S.a.r.l (3-Month USD-LIBOR + 1.750%)2 | 10/06/23 | 4.052 | 35,049,562 | ||||||||||||||
54,400,000 | Discovery Communications LLC (1-Month USD-LIBOR + 1.150%)2 | 03/05/21 | 3.391 | 54,400,000 | ||||||||||||||
20,736,521 | Eastern Power LLC (TPF II LC LLC) (1-Month USD-LIBOR + 3.750%)2 | 10/02/23 | 5.651 | 20,736,521 | ||||||||||||||
11,289,766 | Entergy Rhode Island Energy LP Term B (1-Month USD-LIBOR + 4.750%)2 | 12/19/22 | 6.660 | 11,346,215 | ||||||||||||||
26,800,000 | Frontera Generation Holdings LLC (3-Month USD-LIBOR + 4.250%)2 | 04/25/25 | 6.613 | 26,934,000 | ||||||||||||||
13,107,999 | HCA, Inc. Term B11 (1-Month USD-LIBOR + 1.750%)2 | 03/17/23 | 3.651 | 13,175,374 | ||||||||||||||
19,000,000 | Mallinckrodt International Finance SA (3-Month USD-LIBOR + 3.000%)2 | 02/24/25 | 4.820 | 18,962,000 | ||||||||||||||
25,729,740 | Mallinckrodt International Finance SA Term B (3-Month USD-LIBOR + 2.750%)2 | 09/24/24 | 5.203 | 25,504,604 | ||||||||||||||
13,984,138 | RPI Finance Trust Term A3 (3-Month USD-LIBOR + 1.750%)2 | 10/14/21 | 4.052 | 13,984,137 | ||||||||||||||
47,697,293 | RPI Finance Trust Term B6 (3-Month USD-LIBOR + 2.000%)2 | 03/27/23 | 4.302 | 47,901,914 | ||||||||||||||
24,742,270 | Sprint Communications, Inc. (1-Month USD-LIBOR + 2.500%)2 | 02/02/24 | 4.438 | 24,804,125 | ||||||||||||||
3,553,276 | SS&C Technologies Holdings, Inc. Term B3 (3-Month USD-LIBOR + 2.500%)2 | 04/16/25 | 4.401 | 3,575,484 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||||||
$ 16,349,533 | TerraForm Power Operating LLC (1-Month USD-LIBOR + 2.750%)2 | 11/08/22 | 4.651 | % | $ | 16,410,844 | ||||||||||||||||
33,063,440 | Western Digital Corporation Term B3 (1-Month USD-LIBOR + 2.000%)2 | 04/29/23 | 3.900 | 33,240,660 | ||||||||||||||||||
20,000,000 | Western Union Company (1-Month USD-LIBOR + 1.500%)2 | 04/09/21 | 3.394 | 20,025,000 | ||||||||||||||||||
1,345,000 | Wyndham Hotels & Resorts, Inc. Term B (3-Month USD-LIBOR + 1.750%)2 | 03/28/25 | 4.113 | 1,354,926 | ||||||||||||||||||
Total Loan Participations and Assignments | ||||||||||||||||||||||
(Identified cost $584,142,730) | 584,915,722 | |||||||||||||||||||||
MUNICIPAL BONDS (5.4%) | ||||||||||||||||||||||
14,250,000 | Baylor Health Care System, Revenue Bonds2,3 | 11/15/25 | 2.566 | 13,489,620 | ||||||||||||||||||
5,000,000 | Butler County General Authority, Revenue Bonds, AGM6 | 05/07/18 | 1.770 | 5,000,000 | ||||||||||||||||||
24,000,000 | California Statewide Communities Development Authority, Revenue Bonds6 | 05/07/18 | 1.750 | 24,000,000 | ||||||||||||||||||
17,800,000 | Charlotte-Mecklenburg Hospital Authority, Revenue Bonds6 | 05/01/18 | 1.570 | 17,800,000 | ||||||||||||||||||
6,800,000 | City of Charlotte, North Carolina, Certificates of Participation6 | 05/07/18 | 1.700 | 6,800,000 | ||||||||||||||||||
10,800,000 | City of New York, General Obligation Bonds6 | 05/07/18 | 1.750 | 10,800,000 | ||||||||||||||||||
23,635,000 | City of New York, General Obligation Bonds6 | 05/07/18 | 1.750 | 23,635,000 | ||||||||||||||||||
8,585,000 | City of Whittier, California, Revenue Bonds6 | 05/07/18 | 1.680 | 8,585,000 | ||||||||||||||||||
52,300,000 | County of Franklin, Ohio, Revenue Bonds6 | 05/07/18 | 1.730 | 52,300,000 | ||||||||||||||||||
37,800,000 | Minnesota Housing Finance Agency, Revenue Bonds, GNMA/FNMA/ FHLMC6 | 05/07/18 | 1.750 | 37,800,000 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 17 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||||||
$ 14,525,000 | New Jersey Economic Development Authority, Revenue Bonds | 06/15/21 | 5.000 | % | $ | 15,414,656 | ||||||||||||||||
10,100,000 | New Jersey Turnpike Authority, Revenue Bonds (1-Month USD-LIBOR + 0.700%)2 | 01/01/24 | 2.018 | 10,097,071 | ||||||||||||||||||
85,500,000 | New Jersey Turnpike Authority, Revenue Bonds (1-Month USD-LIBOR + 0.700%)2 | 01/01/24 | 2.018 | 85,475,205 | ||||||||||||||||||
10,850,000 | New York City Water & Sewer System, Revenue Bonds6 | 05/01/18 | 1.610 | 10,850,000 | ||||||||||||||||||
10,815,000 | North Carolina Medical Care Commission, Revenue Bonds6 | 05/07/18 | 1.700 | 10,815,000 | ||||||||||||||||||
4,150,000 | North Dakota Housing Finance Agency, Revenue Bonds6 | 05/07/18 | 1.750 | 4,150,000 | ||||||||||||||||||
13,300,000 | Ohio Higher Educational Facility Commission, Revenue Bonds6 | 05/01/18 | 1.520 | 13,300,000 | ||||||||||||||||||
6,641,000 | Pennsylvania Industrial Development Authority, Revenue Bonds1 | 07/01/21 | 2.967 | 6,530,693 | ||||||||||||||||||
2,330,000 | School District of Philadelphia, General Obligation Bonds | 09/01/18 | 2.512 | 2,324,129 | ||||||||||||||||||
Total Municipal Bonds (Identified cost $359,366,796) | 359,166,374 | |||||||||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.0%) | ||||||||||||||||||||||
185,000,000 | Federal Home Loan Bank Discount Notes7 | 05/01/18 | 0.000 | 185,000,000 | ||||||||||||||||||
116,409 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (1-Year USD-LIBOR + 1.788%)2 | 04/01/36 | 3.633 | 122,021 | ||||||||||||||||||
34,949 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (6-Month USD-LIBOR + 1.740%)2 | 12/01/36 | 3.240 | 36,736 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (continued) | �� | |||||||||||||||||
$ 26,133 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (1-Year USD-LIBOR + 1.745%)2 | 01/01/37 | 3.557 | % | $ | 27,356 | ||||||||||||
54,682 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (1-Year USD-LIBOR + 1.822%)2 | 02/01/37 | 3.803 | 57,167 | ||||||||||||||
7,833,415 | Federal National Mortgage Association (FNMA) | 07/01/35 | 5.000 | 8,410,761 | ||||||||||||||
533,664 | Federal National Mortgage Association (FNMA) | 11/01/35 | 5.500 | 584,085 | ||||||||||||||
60,924 | Federal National Mortgage Association (FNMA) (1-Year USD-LIBOR + 1.957%)2 | 07/01/36 | 3.707 | 64,427 | ||||||||||||||
106,716 | Federal National Mortgage Association (FNMA) (1-Year USD-LIBOR + 1.715%)2 | 09/01/36 | 3.465 | 111,978 | ||||||||||||||
65,184 | Federal National Mortgage Association (FNMA) (1-Year USD-LIBOR + 1.829%)2 | 01/01/37 | 3.630 | 68,286 | ||||||||||||||
454,206 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 497,017 | ||||||||||||||
5,296,638 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 5,812,274 | ||||||||||||||
2,368,209 | Federal National Mortgage Association (FNMA) | 06/01/40 | 6.500 | 2,638,342 | ||||||||||||||
16,107 | Government National Mortgage Association (GNMA) (1-Year CMT Index + 1.500%)2 | 08/20/29 | 2.750 | 16,646 | ||||||||||||||
Total U.S. Government Agency Obligations | ||||||||||||||||||
(Identified cost $203,093,718) | 203,447,096 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 19 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. TREASURY BILLS (4.1%) | ||||||||||||||||||
$ 80,000,000 | U.S. Treasury Bill7 | 05/17/18 | 0.000 | % | $ | 79,944,944 | ||||||||||||
50,000,000 | U.S. Treasury Bill7,8 | 06/21/18 | 0.000 | 49,893,927 | ||||||||||||||
35,000,000 | U.S. Treasury Bill7 | 08/09/18 | 0.000 | 34,820,628 | ||||||||||||||
50,000,000 | U.S. Treasury Bill7 | 09/27/18 | 0.000 | 49,604,736 | ||||||||||||||
65,000,000 | U.S. Treasury Bill7 | 01/03/19 | 0.000 | 64,118,090 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $278,488,843) | 278,382,325 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $6,796,180,628)9 | 101.0 | % | $ | 6,771,904,217 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (1.0 | )% | (67,294,202 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 6,704,610,015 |
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, 2018 was $ 2,962,046,684 or 44.2% 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, 2018 coupon or interest rate. |
3 | This variable rate security is based on a predetermined schedule and the rate at period end also represents the reference rate at period end. |
4 | Security that used significant unobservable inputs to determine fair value. |
5 | Payment in Kind (PIK) security which may pay interest in the form of additional principal amount. |
6 | 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, 2018. |
7 | Security issued with zero coupon. Income is recognized through accretion of discount. |
8 | All or a portion of this security is held at the broker as collateral for open futures contracts. |
9 | The aggregate cost for federal income tax purposes is $6,796,180,628, the aggregate gross unrealized appreciation is $8,997,781 and the aggregate gross unrealized depreciation is $32,170,905, resulting in net unrealized depreciation of $23,173,124. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Description | Number of Contracts | Expiration Date | Notional Amount | Market Value | Unrealized Gain/(Loss) | |||||||||||||||||
Contracts to Sell: | ||||||||||||||||||||||
U.S. Treasury 2-Year Notes | 600 | June 2018 | $ | 127,209,375 | $ | 127,228,126 | $ | (18,751 | ) | |||||||||||||
U.S. Treasury 5-Year Notes | 2,377 | June 2018 | 270,792,297 | 269,808,072 | 984,225 | |||||||||||||||||
U.S. Treasury 10-Year Notes | 588 | June 2018 | 70,477,313 | 70,339,500 | 137,813 | |||||||||||||||||
$ | 1,103,287 |
— | 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, 2018 | 21 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | ||||||||||||||
Asset Backed Securities | $ | – | $ | 2,832,389,514 | $ | 30,294,796 | $ | 2,862,684,310 | ||||||||||
Commercial Mortgage Backed Securities | – | 260,451,943 | – | 260,451,943 | ||||||||||||||
Corporate Bonds | – | 2,221,250,776 | 1,605,671 | 2,222,856,447 | ||||||||||||||
Loan Participations and Assignments | – | 584,915,722 | – | 584,915,722 | ||||||||||||||
Municipal Bonds | – | 359,166,374 | – | 359,166,374 | ||||||||||||||
U.S. Government Agency Obligations | – | 203,447,096 | – | 203,447,096 | ||||||||||||||
U.S. Treasury Bills | – | 278,382,325 | – | 278,382,325 | ||||||||||||||
Total Investments, at value | $ | – | $ | 6,740,003,750 | $ | 31,900,467 | $ | 6,771,904,217 | ||||||||||
Other Financial Instruments, at value | ||||||||||||||||||
Financial Futures Contracts | $ | 1,103,287 | $ | – | $ | – | $ | 1,103,287 | ||||||||||
Other Financial Instruments, at value | $ | 1,103,287 | $ | – | $ | – | $ | 1,103,287 |
* | 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 and 2 during the period ended April 30, 2018. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 23 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Asset Backed Securities | Corporate Bonds | Total | ||||||||||||
Balance as of October 31, 2017 | $ | – | $ | 2,247,939 | $ | 2,247,939 | ||||||||
Purchases | – | – | – | |||||||||||
Sales / Paydowns | – | (642,268 | ) | (642,268 | ) | |||||||||
Realized gains (losses) | – | – | – | |||||||||||
Change in unrealized appreciation (depreciation) | 58,933 | – | 58,933 | |||||||||||
Amortization | – | – | – | |||||||||||
Transfers from Level 3 | – | – | – | |||||||||||
Transfers to Level 3* | 30,235,863 | – | 30,235,863 | |||||||||||
Balance as of April 30, 2018 | $ | 30,294,796 | $ | 1,605,671 | $ | 31,900,467 |
* | Transfers are reflected at the value of the security at the beginning of the period. Transfers from Level 2 to Level 3 were due to a reduction in the availability of significant observable inputs to determine fair value. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2018 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $6,796,180,628) | $ | 6,771,904,217 | ||||
Cash | 195,920 | |||||
Receivables for: | ||||||
Investments sold | 51,213,297 | |||||
Interest | 27,415,163 | |||||
Shares sold | 5,592,191 | |||||
Investment advisory and administrative fee waiver reimbursement | 39,256 | |||||
Other | 2,512,946 | |||||
Prepaid assets | 10,873 | |||||
Total Assets | 6,858,883,863 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 138,156,450 | |||||
Shares redeemed | 14,132,870 | |||||
Investment advisory and administrative fees | 1,427,267 | |||||
Futures variation margin on open contracts | 242,281 | |||||
Custody and fund accounting fees | 109,103 | |||||
Periodic distributions | 100,396 | |||||
Professional fees | 48,321 | |||||
Shareholder servicing fees | 24,068 | |||||
Transfer agent fees | 912 | |||||
Board of Trustees’ fees | 902 | |||||
Accrued expenses and other liabilities | 31,278 | |||||
Total Liabilities | 154,273,848 | |||||
NET ASSETS | $ | 6,704,610,015 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 6,768,942,120 | ||||
Undistributed net investment income | 2,252,766 | |||||
Accumulated net realized loss on investments in securities and futures contracts | (43,411,747 | ) | ||||
Net unrealized appreciation/(depreciation) on investments in securities and futures contracts | (23,173,124 | ) | ||||
Net Assets | $ | 6,704,610,015 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($169,423,790 ÷ 16,678,726 shares outstanding) | $10.16 | |||||
CLASS I SHARES | ||||||
($6,535,186,225 ÷ 643,629,895 shares outstanding) | $10.15 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 25 |
BBH LIMITED DURATION FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2018 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest income | $ | 83,178,559 | ||||
Other income | 675,133 | |||||
Total Income | 83,853,692 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 8,659,116 | |||||
Custody and fund accounting fees | 285,941 | |||||
Shareholder servicing fees | 106,257 | |||||
Professional fees | 47,337 | |||||
Board of Trustees’ fees | 26,618 | |||||
Transfer agent fees | 20,408 | |||||
Miscellaneous expenses | 144,938 | |||||
Total Expenses | 9,290,615 | |||||
Expense offset arrangement | (79,485 | ) | ||||
Investment advisory and administrative fee waiver | (100,907 | ) | ||||
Net Expenses | 9,110,223 | |||||
Net Investment Income | 74,743,469 | |||||
NET REALIZED AND UNREALIZED LOSS: | ||||||
Net realized loss on investments in securities | (8,498,117 | ) | ||||
Net realized gain on futures contracts | 16,725,631 | |||||
Net realized gain on investments in securities and futures contracts | 8,227,514 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (28,591,899 | ) | ||||
Net change in unrealized appreciation/(depreciation) on futures contracts | (4,254,604 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | (32,846,503 | ) | ||||
Net Realized and Unrealized Loss | (24,618,989 | ) | ||||
Net Increase in Net Assets Resulting from Operations | $ | 50,124,480 |
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, 2018 (unaudited) | For the year ended October 31, 2017 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 74,743,469 | $ | 127,287,300 | ||||||
Net realized gain on investments in securities and futures contracts | 8,227,514 | 11,359,824 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | (32,846,503 | ) | 20,117,102 | |||||||
Net increase in net assets resulting from operations | 50,124,480 | 158,764,226 | ||||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (1,249,175 | ) | (1,046,363 | ) | ||||||
Class I | (72,953,593 | ) | (124,987,733 | ) | ||||||
Total dividends and distributions declared | (74,202,768 | ) | (126,034,096 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 1,918,980,479 | 4,351,810,164 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 12,119,196 | 16,722,566 | ||||||||
Cost of shares redeemed* | (1,620,701,578 | ) | (2,762,241,924 | ) | ||||||
Net increase in net assets resulting from share transactions | 310,398,097 | 1,606,290,806 | ||||||||
Total increase in net assets | 286,319,809 | 1,639,020,936 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 6,418,290,206 | 4,779,269,270 | ||||||||
End of period (including undistributed net investment income of $2,252,766 and $1,712,065, respectively) | $ | 6,704,610,015 | $ | 6,418,290,206 |
* | 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, 2018 | 27 |
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2018 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.11 | 0.21 | 0.19 | 0.18 | 0.14 | 0.15 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (0.03 | ) | 0.05 | (0.00 | )2 | (0.17 | ) | (0.01 | ) | (0.06 | ) | ||||||||||||||||
Total income from investment operations | 0.08 | 0.26 | 0.19 | 0.01 | 0.13 | 0.09 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.20 | ) | (0.20 | ) | (0.18 | ) | (0.14 | ) | (0.15 | ) | |||||||||||||||
From net realized gains | – | – | – | – | (0.03 | ) | (0.03 | ) | |||||||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.20 | ) | (0.20 | ) | (0.18 | ) | (0.17 | ) | (0.18 | ) | |||||||||||||||
Net asset value, end of period | $ | 10.16 | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | |||||||||||||||
Total return | 0.77 | %3 | 2.64 | % | 1.90 | % | 0.10 | % | 1.32 | % | 0.82 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $169 | $72 | $42 | $ | 2,557 | $ | 2,625 | $ | 2,170 | ||||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.54 | %4 | 0.67 | % | 0.49 | % | 0.48 | % | 0.48 | % | 0.49 | % | |||||||||||||||
Fee waiver | 0.19 | %4,5 | 0.27 | %5 | 0.01 | %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 | 0.35 | %4 | 0.40 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.49 | % | |||||||||||||||
Ratio of net investment income to average net assets | 2.20 | %4 | 2.05 | % | 1.91 | % | 1.75 | % | 1.36 | % | 1.44 | % | |||||||||||||||
Portfolio turnover rate | 18 | %3 | 52 | % | 53 | % | 46 | % | 35 | % | 48 | % |
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, 2018, the years ended October 31, 2017 and 2016, reflect fees reduced as result of voluntary operating expense limitation of the share class to 0.35%, prior to March 24, 2017, the expense limitation of share class was 0.48%. The agreement is effective for the periods 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, 2018 and the years ended October 31, 2017 and 2016, the waived fees were $100,907, $132,560 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 six months ended April 30, 2018 (unaudited) | For the years ended October 31, | ||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.11 | 0.22 | 0.22 | 0.20 | 0.16 | 0.17 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (0.04 | ) | 0.06 | (0.01 | ) | (0.17 | ) | (0.01 | ) | (0.06 | ) | ||||||||||||||||
Total income from investment operations | 0.07 | 0.28 | 0.21 | 0.03 | 0.15 | 0.11 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.22 | ) | (0.22 | ) | (0.20 | ) | (0.16 | ) | (0.17 | ) | |||||||||||||||
From net realized gains | – | – | – | – | (0.03 | ) | (0.03 | ) | |||||||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.22 | ) | (0.22 | ) | (0.20 | ) | (0.19 | ) | (0.20 | ) | |||||||||||||||
Net asset value, end of period | $ | 10.15 | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | |||||||||||||||
Total return | 0.70 | %2 | 2.77 | % | 2.13 | % | 0.30 | % | 1.52 | % | 1.01 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 6,535 | $ | 6,346 | $ | 4,737 | $ | 2,153 | $ | 2,547 | $ | 1,448 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 0.27 | %3 | 0.28 | % | 0.27 | % | 0.28 | % | 0.29 | % | 0.29 | % | |||||||||||||||
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 | 0.28 | % | 0.27 | % | 0.28 | % | 0.29 | % | 0.29 | % | |||||||||||||||
Ratio of net investment income to average net assets | 2.22 | %3 | 2.17 | % | 2.21 | % | 1.94 | % | 1.56 | % | 1.63 | % | |||||||||||||||
Portfolio turnover rate | 18 | %2 | 52 | % | 53 | % | 46 | % | 35 | % | 48 | % |
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, 2018 | 29 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2018 (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, 2018, 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 of Trustees (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. |
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 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
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. |
financial statements april 30, 2018 | 31 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Risk | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |||||||||||||||
Interest Rate Risk | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. | $ | 1,122,038 | * | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. | $ | (18,751 | )* | |||||||||||
Total | $ | 1,122,038 | $ | (18,751 | ) |
* | Includes cumulative appreciation/(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 on Derivatives | ||||||
Futures Contracts | $ | 16,725,631 | ||||
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives | ||||||
Futures Contracts | $ | (4,254,604 | ) |
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% 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. |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
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 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 |
financial statements april 30, 2018 | 33 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
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 $1,249,175 and $72,953,593 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2018. |
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2017: | $ | 126,034,096 | $ | – | $ | 126,034,096 | $ | – | $ | 126,034,096 | ||||||||||||||
2016: | 107,734,086 | – | 107,734,086 | – | 107,734,086 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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 | Book unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2017: | $ | 1,712,065 | $ | – | $ | 1,712,065 | $ | (45,774,424 | ) | $ | (5,864,837 | ) | $ | 9,673,379 | $ | (40,253,817 | ) | |||||||||||||||
2016: | 1,631,645 | – | 1,631,645 | (61,521,827 | ) | (2,650,042 | ) | (10,443,723 | ) | (72,983,947 | ) |
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, 2018 | 35 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018, the Fund incurred $8,659,116 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 expenses for the Fund’s Class N shares in order to limit total 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 0.35%. Effective December 29, 2015 and prior to March 24, 2017 the Investment Adviser had voluntarily agreed to limit the annual fund operating expenses 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, 2018, the Investment Adviser waived fees in the amount of $100,907 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, 2018, Class N shares of the Fund incurred $106,257 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, 2018, the Fund incurred $285,941 in custody and fund accounting fees. These fees for the Fund were reduced by $79,485 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 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
the six months ended April 30, 2018, was $1,921. 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, 2018, the Fund incurred $26,618 in independent Trustee compensation and reimbursements. |
4. | Investment Transactions. For the six months ended April 30, 2018, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $2,211,017,961 and $1,219,042,043, 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, 2018 (unaudited) | For the year ended October 31, 2017 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 12,033,470 | $ | 122,503,115 | 4,739,548 | $ | 48,279,174 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 109,195 | 1,110,325 | 73,191 | 744,949 | |||||||||||||||
Shares redeemed | (2,545,501 | ) | (25,913,352 | ) | (1,925,295 | ) | (19,575,111 | ) | |||||||||||
Net increase | 9,597,164 | $ | 97,700,088 | 2,887,444 | $ | 29,449,012 | |||||||||||||
Class I | |||||||||||||||||||
Shares sold | 176,480,671 | $ | 1,796,477,364 | 423,523,826 | $ | 4,303,530,990 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 1,083,273 | 11,008,871 | 1,571,105 | 15,977,617 | |||||||||||||||
Shares redeemed | (156,767,068 | ) | (1,594,788,226 | ) | (269,859,797 | ) | (2,742,666,813 | ) | |||||||||||
Net increase | 20,796,876 | $ | 212,698,009 | 155,235,134 | $ | 1,576,841,794 |
financial statements april 30, 2018 | 37 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018 (unaudited)
do so in the future. Such securities are neither issued nor guaranteed by the U.S. Treasury (U.S. Government Agency Securities Risk). The extent of the Fund’s exposure to these risks in respect to these financial assets is included in their value as recorded in the Fund’s Statement of Assets and Liabilities.
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Recent Pronouncements. |
A. | ASU 2017-08. In March 2017, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (the “ASU”) which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The ASU does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU is effective for years, and interim periods within those years, beginning after December 15, 2018. Management is currently evaluating the application of ASU 2017-08 and its impact, if any, on the Fund’s financial statements. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2018 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, 2018 | 39 |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2018 (unaudited)
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2018 (unaudited)
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,008 | $ | 1.74 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,023 | $ | 1.76 |
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,007 | $ | 1.34 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,023 | $ | 1.35 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.35% 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, 2018 | 41 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2018 (unaudited)
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 43 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
expectations for the Fund as well as the relevant market conditions for the Fund’s investments and investment strategy. Based on this information, and in light of the Fund’s historic investment style, the Board concluded that it was satisfied with the Fund’s investment results.
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 45 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST
April 30, 2018 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 47 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
Investment Adviser in the investment decision-making process (including with respect to futures, fixed price offerings and over-the-counter transactions). The use of a broker that provides research and securities transaction services may result in a higher commission than that offered by a broker who does not provide such services. The Investment Adviser will determine in good faith whether the amount of commission is reasonable in relation to the value of research and services provided and whether the services provide lawful and appropriate assistance in its investment decision-making responsibilities.
financial statements april 30, 2018 | 49 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 51 |
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, 2018 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Municipal Bonds | $ | 126,943,725 | 101.7 | % | ||||||
Liabilities in Excess of Other Assets | (2,126,279 | ) | (1.7 | ) | ||||||
NET ASSETS | $ | 124,817,446 | 100.0 | % |
U.S. $ Value | Percent of Total Investments | |||||||||
AAA | $ | 41,413,102 | 32.6 | % | ||||||
AA | 40,366,917 | 31.8 | ||||||||
A | 40,687,949 | 32.1 | ||||||||
BBB | 4,475,757 | 3.5 | ||||||||
TOTAL INVESTMENTS | $ | 126,943,725 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (101.7%) | ||||||||||||||||||
Alabama (0.0%) | ||||||||||||||||||
$ 50,000 | Alabama 21st Century Authority, Revenue Bonds | 06/01/21 | 5.000 | % | $ | 54,663 | ||||||||||||
Total Alabama | 54,663 | |||||||||||||||||
Arizona (0.4%) | ||||||||||||||||||
475,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/19 | 5.250 | 497,149 | ||||||||||||||
55,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/22 | 5.250 | 60,979 | ||||||||||||||
Total Arizona | 558,128 | |||||||||||||||||
California (11.4%) | ||||||||||||||||||
1,000,000 | Anaheim City School District, General Obligation Bonds, NPFG1 | 08/01/26 | 0.000 | 780,350 | ||||||||||||||
2,000,000 | Anaheim City School District, General Obligation Bonds, AGM, NPFG1 | 08/01/29 | 0.000 | 1,379,460 | ||||||||||||||
750,000 | California Pollution Control Financing Authority, Revenue Bonds2,3 | 11/01/40 | 3.125 | 752,242 | ||||||||||||||
2,600,000 | California Statewide Communities Development Authority, Revenue Bonds4 | 05/07/18 | 1.640 | 2,600,000 | ||||||||||||||
1,000,000 | California Statewide Communities Development Authority, Revenue Bonds2,3 | 11/01/33 | 2.625 | 997,150 | ||||||||||||||
1,000,000 | Golden State Tobacco Securitization Corp., Revenue Bonds, AGM1 | 06/01/25 | 0.000 | 819,570 | ||||||||||||||
1,100,000 | La Mesa-Spring Valley School District, General Obligation Bonds, NPFG1 | 08/01/26 | 0.000 | 849,365 | ||||||||||||||
25,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/19 | 5.250 | 26,142 | ||||||||||||||
725,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/22 | 5.250 | 806,700 | ||||||||||||||
80,000 | Long Beach Bond Finance Authority, Revenue Bonds (3-Month USD-LIBOR + 1.450%)2 | 11/15/27 | 2.682 | 81,027 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 3 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
California (continued) | ||||||||||||||||||
$ 500,000 | Monterey Peninsula Community College District, General Obligation Bonds1 | 08/01/26 | 0.000 | % | $ | 389,070 | ||||||||||||
1,000,000 | Santa Ana Unified School District, General Obligation Bonds, NPFG1 | 08/01/24 | 0.000 | 829,230 | ||||||||||||||
1,500,000 | State of California, General Obligation Bonds | 12/01/22 | 2.500 | 1,496,115 | ||||||||||||||
1,000,000 | Ukiah Unified School District, General Obligation Bonds, NPFG1 | 08/01/23 | 0.000 | 864,690 | ||||||||||||||
1,000,000 | Ukiah Unified School District, General Obligation Bonds, NPFG1 | 08/01/24 | 0.000 | 833,840 | ||||||||||||||
1,120,000 | Whittier Union High School District, General Obligation Bonds1 | 08/01/29 | 0.000 | 773,360 | ||||||||||||||
Total California | 14,278,311 | |||||||||||||||||
Connecticut (6.1%) | ||||||||||||||||||
1,135,000 | Connecticut Housing Finance Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 11/15/22 | 2.100 | 1,094,265 | ||||||||||||||
530,000 | Connecticut Housing Finance Authority, Revenue Bonds5 | 05/15/23 | 2.800 | 529,751 | ||||||||||||||
150,000 | Connecticut State Health & Educational Facilities Authority, Revenue Bonds (1-Month USD-LIBOR + 0.550%)2 | 07/01/49 | 1.814 | 150,139 | ||||||||||||||
1,000,000 | State of Connecticut, General Obligation Bonds (SIFMA Municipal Swap Index Yield + 0.990%)2 | 03/01/25 | 2.740 | 1,014,670 | ||||||||||||||
1,595,000 | State of Connecticut, General Obligation Bonds | 03/01/26 | 5.000 | 1,741,214 | ||||||||||||||
1,620,000 | State of Connecticut Special Tax Revenue, Revenue Bonds | 09/01/26 | 5.000 | 1,846,946 | ||||||||||||||
1,035,000 | State of Connecticut Special Tax Revenue, Revenue Bonds | 01/01/29 | 5.000 | 1,187,838 | ||||||||||||||
Total Connecticut | 7,564,823 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Florida (2.0%) | ||||||||||||||||||
$ 1,015,000 | County of Broward Airport System, Revenue Bonds | 10/01/25 | 5.000 | % | $ | 1,113,273 | ||||||||||||
1,000,000 | County of Hillsborough Solid Waste & Resource Recovery, Revenue Bonds | 09/01/24 | 5.000 | 1,123,690 | ||||||||||||||
35,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/25 | 5.000 | 38,565 | ||||||||||||||
10,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/26 | 5.000 | 11,013 | ||||||||||||||
220,000 | Pinellas County Health Facilities Authority, Revenue Bonds, NPFG2,3 | 11/15/23 | 2.622 | 220,000 | ||||||||||||||
Total Florida | 2,506,541 | |||||||||||||||||
Georgia (7.0%) | ||||||||||||||||||
1,500,000 | Bartow County Development Authority, Revenue Bonds2,3 | 09/01/29 | 2.050 | 1,467,720 | ||||||||||||||
1,200,000 | Burke County Development Authority, Revenue Bonds2,3 | 11/01/45 | 3.000 | 1,180,632 | ||||||||||||||
1,350,000 | Burke County Development Authority, Revenue Bonds2,3 | 11/01/45 | 3.250 | 1,329,804 | ||||||||||||||
65,000 | Georgia Municipal Electric Authority, Revenue Bonds, NPFG2,3 | 01/01/21 | 3.121 | 65,450 | ||||||||||||||
1,500,000 | State of Georgia, General Obligation Bonds | 02/01/24 | 5.000 | 1,718,550 | ||||||||||||||
1,000,000 | State of Georgia, General Obligation Bonds | 12/01/24 | 5.000 | 1,160,680 | ||||||||||||||
1,500,000 | State of Georgia, General Obligation Bonds | 12/01/26 | 5.000 | 1,795,635 | ||||||||||||||
Total Georgia | 8,718,471 | |||||||||||||||||
Illinois (1.9%) | ||||||||||||||||||
75,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 3.000 | 75,269 | ||||||||||||||
360,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 4.000 | 363,643 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 5 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Illinois (continued) | ||||||||||||||||||
$ 100,000 | Chicago Park District, General Obligation Bonds | 01/01/19 | 5.000 | % | $ | 101,666 | ||||||||||||
170,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/19 | 5.250 | 170,483 | ||||||||||||||
300,000 | Chicago Transit Authority, Revenue Bonds, AGC | 06/01/23 | 5.250 | 300,852 | ||||||||||||||
1,175,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/24 | 5.000 | 1,310,924 | ||||||||||||||
Total Illinois | 2,322,837 | |||||||||||||||||
Indiana (1.2%) | ||||||||||||||||||
1,520,000 | Indiana University, Revenue Bonds | 06/01/29 | 2.750 | 1,477,379 | ||||||||||||||
Total Indiana | 1,477,379 | |||||||||||||||||
Iowa (1.0%) | ||||||||||||||||||
1,170,000 | Iowa Finance Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/46 | 4.000 | 1,211,851 | ||||||||||||||
Total Iowa | 1,211,851 | |||||||||||||||||
Kansas (0.3%) | ||||||||||||||||||
200,000 | City of La Cygne, Revenue Bonds, NPFG2,3 | 04/15/27 | 2.720 | 192,726 | ||||||||||||||
100,000 | City of St. Marys, Revenue Bonds, NPFG2,3 | 04/15/32 | 2.720 | 96,256 | ||||||||||||||
100,000 | City of Wamego, Revenue Bonds, NPFG2,3 | 04/15/32 | 3.620 | 96,254 | ||||||||||||||
Total Kansas | 385,236 | |||||||||||||||||
Maryland (1.7%) | ||||||||||||||||||
1,870,000 | State of Maryland, General Obligation Bonds | 08/01/24 | 5.000 | 2,152,781 | ||||||||||||||
Total Maryland | 2,152,781 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Massachusetts (3.7%) | ||||||||||||||||||
$ 300,000 | Commonwealth of Massachusetts, General Obligation Bonds, AGM2,3 | 11/01/19 | 3.092 | % | $ | 301,893 | ||||||||||||
1,500,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM2,3 | 06/01/22 | 3.992 | 1,553,250 | ||||||||||||||
1,025,000 | Commonwealth of Massachusetts, General Obligation Bonds | 11/01/27 | 5.000 | 1,228,934 | ||||||||||||||
500,000 | Massachusetts Clean Water Trust, Revenue Bonds2,3 | 08/01/23 | 2.160 | 499,505 | ||||||||||||||
100,000 | Massachusetts Development Finance Agency, Revenue Bonds4 | 05/01/18 | 1.610 | 100,000 | ||||||||||||||
1,000,000 | Massachusetts Housing Finance Agency, Revenue Bonds | 12/01/21 | 2.500 | 995,240 | ||||||||||||||
Total Massachusetts | 4,678,822 | |||||||||||||||||
Michigan (4.1%) | ||||||||||||||||||
350,000 | Detroit City School District, General Obligation Bonds | 05/01/23 | 5.000 | 383,369 | ||||||||||||||
95,000 | Detroit City School District, General Obligation Bonds, BHAC, FGIC | 05/01/25 | 5.250 | 104,260 | ||||||||||||||
90,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/27 | 5.250 | 103,566 | ||||||||||||||
350,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/29 | 6.000 | 414,865 | ||||||||||||||
1,520,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/30 | 5.250 | 1,798,434 | ||||||||||||||
1,005,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/32 | 5.250 | 1,204,201 | ||||||||||||||
1,150,000 | University of Michigan, Revenue Bonds4 | 05/01/18 | 1.520 | 1,150,000 | ||||||||||||||
Total Michigan | 5,158,695 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 7 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Minnesota (5.0%) | ||||||||||||||||||
$ 1,800,000 | Hastings Independent School District No 200, General Obligation Bonds1 | 02/01/26 | 0.000 | % | $ | 1,433,538 | ||||||||||||
3,000,000 | Minnesota Higher Education Facilities Authority, Revenue Bonds4 | 05/07/18 | 1.710 | 3,000,000 | ||||||||||||||
1,805,000 | Minnesota Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/25 | 2.800 | 1,762,456 | ||||||||||||||
Total Minnesota | 6,195,994 | |||||||||||||||||
Missouri (0.7%) | ||||||||||||||||||
310,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC2,3 | 06/01/31 | 2.799 | 310,000 | ||||||||||||||
600,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC2,3 | 06/01/31 | 2.856 | 600,000 | ||||||||||||||
Total Missouri | 910,000 | |||||||||||||||||
Nebraska (0.3%) | ||||||||||||||||||
355,000 | Central Plains Energy Project, Revenue Bonds | 09/01/27 | 5.000 | 386,478 | ||||||||||||||
Total Nebraska | 386,478 | |||||||||||||||||
New Jersey (7.3%) | ||||||||||||||||||
1,540,000 | New Jersey Economic Development Authority, Revenue Bonds, (SIFMA Municipal Swap Index Yield + 1.550%)2 | 09/01/27 | 3.300 | 1,524,939 | ||||||||||||||
1,315,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/19 | 5.000 | 1,365,641 | ||||||||||||||
1,125,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/20 | 5.000 | 1,186,616 | ||||||||||||||
460,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/21 | 5.000 | 489,868 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New Jersey (continued) | ||||||||||||||||||
$ 1,385,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds1 | 12/15/26 | 0.000 | % | $ | 957,395 | ||||||||||||
1,855,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds1 | 12/15/30 | 0.000 | 1,048,817 | ||||||||||||||
2,500,000 | New Jersey Turnpike Authority, Revenue Bonds (1-Month USD-LIBOR + 0.750%)2 | 01/01/30 | 2.071 | 2,516,325 | ||||||||||||||
Total New Jersey | 9,089,601 | |||||||||||||||||
New York (8.7%) | ||||||||||||||||||
1,500,000 | Metropolitan Transportation Authority, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.450%)2 | 11/01/26 | 2.200 | 1,500,915 | ||||||||||||||
200,000 | New York City Water & Sewer System, Revenue Bonds4 | 05/01/18 | 1.540 | 200,000 | ||||||||||||||
400,000 | New York City Water & Sewer System, Revenue Bonds4 | 05/01/18 | 1.540 | 400,000 | ||||||||||||||
100,000 | New York City Water & Sewer System, Revenue Bonds4 | 05/01/18 | 1.550 | 100,000 | ||||||||||||||
200,000 | New York City Water & Sewer System, Revenue Bonds4 | 05/01/18 | 1.550 | 200,000 | ||||||||||||||
1,000,000 | New York State Dormitory Authority, Revenue Bonds | 02/15/25 | 5.000 | 1,154,440 | ||||||||||||||
520,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 12/01/23 | 4.590 | 520,000 | ||||||||||||||
270,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 12/01/25 | 4.743 | 270,000 | ||||||||||||||
305,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 12/01/26 | 4.727 | 305,000 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 9 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New York (continued) | ||||||||||||||||||
$ 600,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 03/01/27 | 4.700 | % | $ | 600,000 | ||||||||||||
1,110,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 07/01/27 | 3.680 | 1,110,000 | ||||||||||||||
1,890,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 07/01/27 | 4.743 | 1,890,000 | ||||||||||||||
750,000 | New York State Energy Research & Development Authority, Revenue Bonds, XLCA2,3 | 07/01/29 | 4.590 | 750,000 | ||||||||||||||
2,000,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC2,3 | 05/01/34 | 2.800 | 1,920,340 | ||||||||||||||
Total New York | 10,920,695 | |||||||||||||||||
North Carolina (4.0%) | ||||||||||||||||||
300,000 | Charlotte-Mecklenburg Hospital Authority, Revenue Bonds4 | 05/01/18 | 1.570 | 300,000 | ||||||||||||||
1,300,000 | City of Charlotte Water & Sewer System, Revenue Bonds4 | 05/07/18 | 1.680 | 1,300,000 | ||||||||||||||
1,405,000 | County of Mecklenburg, General Obligation Bonds | 04/01/24 | 5.000 | 1,614,443 | ||||||||||||||
1,575,000 | County of Wake, General Obligation Bonds | 03/01/24 | 5.000 | 1,807,596 | ||||||||||||||
Total North Carolina | 5,022,039 | |||||||||||||||||
Ohio (1.6%) | ||||||||||||||||||
200,000 | County of Montgomery, Revenue Bonds4 | 05/01/18 | 1.550 | 200,000 | ||||||||||||||
1,520,000 | Ohio Water Development Authority Water Pollution Control Loan Fund, Revenue Bonds | 12/01/25 | 5.000 | 1,785,483 | ||||||||||||||
Total Ohio | 1,985,483 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Pennsylvania (4.8%) | ||||||||||||||||||
$ 150,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/22 | 5.000 | % | $ | 161,953 | ||||||||||||
75,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/23 | 5.000 | 82,061 | ||||||||||||||
900,000 | Geisinger Authority, Revenue Bonds4 | 05/01/18 | 1.590 | 900,000 | ||||||||||||||
400,000 | Hospitals & Higher Education Facilities Authority of Philadelphia, Revenue Bonds4 | 05/01/18 | 1.550 | 400,000 | ||||||||||||||
600,000 | Hospitals & Higher Education Facilities Authority of Philadelphia, Revenue Bonds4 | 05/01/18 | 1.550 | 600,000 | ||||||||||||||
800,000 | Hospitals & Higher Education Facilities Authority of Philadelphia, Revenue Bonds4 | 05/01/18 | 1.550 | 800,000 | ||||||||||||||
270,000 | School District of Philadelphia, General Obligation Bonds, AGM, FGIC | 06/01/24 | 5.000 | 295,140 | ||||||||||||||
1,400,000 | School District of Philadelphia, General Obligation Bonds | 09/01/28 | 5.000 | 1,584,562 | ||||||||||||||
1,000,000 | State Public School Building Authority, Revenue Bonds, AGM | 06/01/32 | 5.000 | 1,118,180 | ||||||||||||||
Total Pennsylvania | 5,941,896 | |||||||||||||||||
South Dakota (0.4%) | ||||||||||||||||||
505,000 | Educational Enhancement Funding Corp., Revenue Bonds | 06/01/25 | 5.000 | 554,000 | ||||||||||||||
Total South Dakota | 554,000 | |||||||||||||||||
Tennessee (0.9%) | ||||||||||||||||||
1,090,000 | Tennessee Housing Development Agency, Revenue Bonds | 07/01/45 | 4.000 | 1,128,499 | ||||||||||||||
Total Tennessee | 1,128,499 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 11 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Texas (16.1%) | ||||||||||||||||||
$ 1,270,000 | Allen Independent School District, General Obligation Bonds | 02/15/24 | 5.000 | % | $ | 1,444,409 | ||||||||||||
1,080,000 | Allen Independent School District, General Obligation Bonds | 02/15/25 | 5.000 | 1,246,071 | ||||||||||||||
1,170,000 | City of Houston Airport System, Revenue Bonds | 07/01/25 | 5.000 | 1,325,434 | ||||||||||||||
325,000 | City of Houston Airport System, Revenue Bonds, AGM2,3 | 07/01/30 | 3.480 | 325,000 | ||||||||||||||
750,000 | City of Houston Airport System, Revenue Bonds, AGM2,3 | 07/01/30 | 3.541 | 750,000 | ||||||||||||||
475,000 | City of Houston Airport System, Revenue Bonds, XLCA2,3 | 07/01/32 | 3.750 | 475,000 | ||||||||||||||
525,000 | City of Houston Airport System, Revenue Bonds, XLCA2,3 | 07/01/32 | 3.800 | 525,000 | ||||||||||||||
725,000 | City of Houston Airport System, Revenue Bonds, XLCA2,3 | 07/01/32 | 3.800 | 725,000 | ||||||||||||||
1,580,000 | Cuero Independent School District, General Obligation Bonds | 08/15/27 | 5.000 | 1,880,943 | ||||||||||||||
1,000,000 | Dallas Love Field, Revenue Bonds | 11/01/25 | 5.000 | 1,136,260 | ||||||||||||||
2,305,000 | Frisco Independent School District, General Obligation Bonds | 08/15/26 | 5.000 | 2,713,008 | ||||||||||||||
1,000,000 | Hays Consolidated Independent School District, General Obligation Bonds | 02/15/27 | 5.000 | 1,185,670 | ||||||||||||||
1,175,000 | Houston Independent School District, General Obligation Bonds | 02/15/25 | 5.000 | 1,355,680 | ||||||||||||||
2,000,000 | State of Texas, General Obligation Bonds | 04/01/25 | 5.000 | 2,321,120 | ||||||||||||||
380,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/19 | 5.250 | 397,894 | ||||||||||||||
95,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/20 | 5.250 | 101,882 | ||||||||||||||
480,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/21 | 5.250 | 525,221 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Texas (continued) | ||||||||||||||||||
$ 370,000 | Texas Municipal Gas Acquisition & Supply Corp. II, Revenue Bonds (3-Month USD-LIBOR + 0.870%)2 | 09/15/27 | 2.293 | % | $ | 369,989 | ||||||||||||
1,300,000 | Texas Municipal Gas Acquisition & Supply Corp. II, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.550%)2 | 09/15/27 | 2.300 | 1,284,205 | ||||||||||||||
Total Texas | 20,087,786 | |||||||||||||||||
Virginia (5.4%) | ||||||||||||||||||
1,755,000 | City of Virginia Beach, General Obligation Bonds | 04/01/25 | 5.000 | 2,046,506 | ||||||||||||||
2,000,000 | County of Arlington, General Obligation Bonds | 08/15/25 | 5.000 | 2,348,560 | ||||||||||||||
2,300,000 | Virginia Housing Development Authority, Revenue Bonds | 01/01/23 | 2.740 | 2,312,351 | ||||||||||||||
Total Virginia | 6,707,417 | |||||||||||||||||
Washington (1.2%) | ||||||||||||||||||
500,000 | Port of Seattle, Revenue Bonds | 06/01/23 | 5.000 | 551,495 | ||||||||||||||
425,000 | Port of Seattle, Revenue Bonds | 06/01/27 | 3.750 | 433,670 | ||||||||||||||
445,000 | Washington State Housing Finance Commission, Revenue Bonds | 06/01/44 | 3.500 | 453,175 | ||||||||||||||
Total Washington | 1,438,340 | |||||||||||||||||
Wisconsin (3.2%) | ||||||||||||||||||
290,000 | County of Milwaukee Airport, Revenue Bonds | 12/01/28 | 5.250 | 322,663 | ||||||||||||||
1,800,000 | Public Finance Authority, Revenue Bonds2,3 | 07/01/29 | 2.000 | 1,759,320 | ||||||||||||||
1,590,000 | State of Wisconsin, General Obligation Bonds | 05/01/25 | 5.000 | 1,851,491 | ||||||||||||||
Total Wisconsin | 3,933,474 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 13 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||||||
Wyoming (1.3%) | ||||||||||||||||||||||
$ 1,500,000 | Wyoming Community Development Authority, Revenue Bonds5 | 12/01/43 | 4.000 | % | $ | 1,573,485 | ||||||||||||||||
Total Wyoming | 1,573,485 | |||||||||||||||||||||
Total Municipal Bonds (Identified cost $126,808,251) | 126,943,725 |
TOTAL INVESTMENTS (Identified cost $126,808,251)6 | 101.7 | % | $ | 126,943,725 | |||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (1.7 | )% | (2,126,279 | ) | |||||||
NET ASSETS | 100.0 | % | $ | 124,817,446 |
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, 2018 coupon or interest rate. |
3 | This variable rate security is based on a predetermined schedule and the rate at period end also represents the reference rate at period end. |
4 | Variable rate demand note. The maturity date reflects the demand repayment dates. Interest rates change on specific dates (such as coupon or interest payment date). The yield shown represents the coupon or interest rate as of April 30, 2018. |
5 | Represent a security purchased on a when-issued basis. |
6 | The aggregate cost for federal income tax purposes is $126,808,251, the aggregate gross unrealized appreciation is $1,158,417 and the aggregate gross unrealized depreciation is $1,022,943, resulting in net unrealized appreciation of $135,474. |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | 15 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2018 (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, 2018 | ||||||||||||||
Municipal Bonds** | $ | – | $ | 126,943,725 | $ | – | $ | 126,943,725 | ||||||||||
Investments, at value | $ | – | $ | 126,943,725 | $ | – | $ | 126,943,725 |
* | 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, 2018. |
** | 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, 2018 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $126,808,251) | $ | 126,943,725 | ||||
Receivables for: | ||||||
Interest | 966,197 | |||||
Investment advisory and administrative fee waiver reimbursement | 21,255 | |||||
Shares sold | 575 | |||||
Other | 6,292 | |||||
Prepaid assets | 11,526 | |||||
Total Assets | 127,949,570 | |||||
LIABILITIES: | ||||||
Due to Custodian | 1,959 | |||||
Payables for: | ||||||
Investments purchased | 3,019,290 | |||||
Investment advisory and administrative fees | 53,221 | |||||
Professional fees | 34,867 | |||||
Custody and fund accounting fees | 10,886 | |||||
Shares redeemed | 3,373 | |||||
Shareholder servicing fees | 3,144 | |||||
Transfer agent fees | 2,104 | |||||
Board of Trustees’ fees | 1,513 | |||||
Accrued expenses and other liabilities | 1,767 | |||||
Total Liabilities | 3,132,124 | |||||
NET ASSETS | $ | 124,817,446 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 124,629,028 | ||||
Distributions in excess of net investment income | (4,493 | ) | ||||
Accumulated net realized gain on investments in securities | 57,437 | |||||
Net unrealized appreciation/(depreciation) on investments in securities | 135,474 | |||||
Net Assets | $ | 124,817,446 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($27,013,329 ÷ 2,652,226 shares outstanding) | $10.19 | |||||
CLASS I SHARES | ||||||
($97,804,117 ÷ 9,612,462 shares outstanding) | $10.17 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2018 | 17 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2018 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest income | $ | 1,354,731 | ||||
Other income | 289 | |||||
Total Income | 1,355,020 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 193,156 | |||||
Professional fees | 32,463 | |||||
Board of Trustees’ fees | 27,292 | |||||
Custody and fund accounting fees | 18,823 | |||||
Shareholder servicing fees | 17,233 | |||||
Transfer agent fees | 16,677 | |||||
Miscellaneous expenses | 35,699 | |||||
Total Expenses | 341,343 | |||||
Investment advisory and administrative fee waiver | (86,288 | ) | ||||
Expense offset arrangement | (686 | ) | ||||
Net Expenses | 254,369 | |||||
Net Investment Income | 1,100,651 | |||||
NET REALIZED AND UNREALIZED GAIN (LOSS): | ||||||
Net realized gain on investments in securities | 58,123 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (1,975,569 | ) | ||||
Net Realized and Unrealized Loss | (1,917,446 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | $ | (816,795 | ) |
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, 2018 (unaudited) | For the year ended October 31, 2017 | |||||||||
INCREASE (DECREASE) IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 1,100,651 | $ | 1,996,307 | ||||||
Net realized gain on investments in securities | 58,123 | 1,099,658 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (1,975,569 | ) | (534,966 | ) | ||||||
Net increase (decrease) in net assets resulting from operations | (816,795 | ) | 2,560,999 | |||||||
Dividends and distributions declared: | ||||||||||
From net investment income: | ||||||||||
Class N | (193,360 | ) | (449,944 | ) | ||||||
Class I | (911,784 | ) | (1,740,315 | ) | ||||||
From net realized gains: | ||||||||||
Class N | (153,240 | ) | (307,076 | ) | ||||||
Class I | (652,928 | ) | (842,969 | ) | ||||||
Total dividends and distributions declared | (1,911,312 | ) | (3,340,304 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 58,614,340 | 22,328,960 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 895,360 | 1,394,699 | ||||||||
Proceeds from short-term redemption fees | 194 | 146 | ||||||||
Cost of shares redeemed* | (19,454,199 | ) | (24,953,058 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions | 40,055,695 | (1,229,253 | ) | |||||||
Total increase (decrease) in net assets | 37,327,588 | (2,008,558 | ) | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 87,489,858 | 89,498,416 | ||||||||
End of period (including distributions in excess of net investment income of $4,493 and $0, respectively) | $ | 124,817,446 | $ | 87,489,858 |
* | 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, 2018 | 19 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the six months ended April 30, 2018 (unaudited) | For the years ended October 31, | | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.48 | $ | 10.56 | $ | 10.29 | $ | 10.30 | $ | 10.00 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||
Net investment income1 | 0.11 | 0.22 | 0.18 | 0.15 | 0.09 | |||||||||||||||||
Net realized and unrealized gain (loss) | (0.19 | ) | 0.11 | 0.29 | 0.08 | 0.29 | ||||||||||||||||
Total income (loss) from investment operations | (0.08 | ) | 0.33 | 0.47 | 0.23 | 0.38 | ||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.26 | ) | (0.18 | ) | (0.16 | ) | (0.08 | ) | ||||||||||||
From net realized gains | (0.10 | ) | (0.15 | ) | (0.02 | ) | (0.08 | ) | – | |||||||||||||
Total dividends and distributions | (0.21 | ) | (0.41 | ) | (0.20 | ) | (0.24 | ) | (0.08 | ) | ||||||||||||
Short-term redemption fees1 | 0.00 | 2 | 0.0 | 02 | 0.00 | 2 | 0.00 | 2 | – | |||||||||||||
Net asset value, end of period | $ | 10.19 | $ | 10.48 | $ | 10.56 | $ | 10.29 | $ | 10.30 | ||||||||||||
Total return | (0.86 | )%3 | 3.20 | % | 4.64 | % | 2.29 | % | 3.82 | %3 | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||
Net assets, end of period (in millions) | $27 | $16 | $23 | $26 | $1 | |||||||||||||||||
Ratio of expenses to average net assets before reductions | 1.03 | %4 | 1.05 | % | 1.03 | % | 1.10 | % | 8.78 | %5 | ||||||||||||
Fee waiver | 0.38 | %4,6 | 0.40 | %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 | %7 | 0.00 | %5,7 | ||||||||||||
Ratio of expenses to average net assets after reductions | 0.65 | %4 | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | %5 | ||||||||||||
Ratio of net investment income to average net assets | 2.16 | %4 | 2.16 | % | 1.73 | % | 1.43 | % | 1.43 | %5 | ||||||||||||
Portfolio turnover rate | 63 | %3 | 125 | % | 77 | % | 142 | % | 91 | %3 | ||||||||||||
Portfolio turnover rate8 | 21 | %3 | 64 | % | 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, 2018, the years ended October 31, 2017, 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, 2019, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2018, the years ended October 31, 2017, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $32,896, $78,871, $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, 2018 (unaudited) | For the years ended October 31, | | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.47 | $ | 10.55 | $ | 10.28 | $ | 10.30 | $ | 10.00 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||
Net investment income1 | 0.12 | 0.25 | 0.20 | 0.18 | 0.09 | |||||||||||||||||
Net realized and unrealized gain (loss) | (0.21 | ) | 0.09 | 0.29 | 0.06 | 0.30 | ||||||||||||||||
Total income (loss) from investment operations | (0.09 | ) | 0.34 | 0.49 | 0.24 | 0.39 | ||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.27 | ) | (0.20 | ) | (0.18 | ) | (0.09 | ) | ||||||||||||
From net realized gains | (0.10 | ) | (0.15 | ) | (0.02 | ) | (0.08 | ) | – | |||||||||||||
Total dividends and distributions | (0.21 | ) | (0.42 | ) | (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 | $ | 10.17 | $ | 10.47 | $ | 10.55 | $ | 10.28 | $ | 10.30 | ||||||||||||
Total return | (0.89 | )%3 | 3.36 | % | 4,80 | % | 2.33 | % | 3.89 | %3 | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||
Net assets, end of period (in millions) | $98 | $71 | $66 | $66 | $52 | |||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.64 | %4 | 0.69 | % | 0.68 | % | 0.78 | % | 0.88 | %5 | ||||||||||||
Fee waiver | 0.14 | %4,6 | 0.19 | %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 | %7 | 0.00 | %5,7 | ||||||||||||
Ratio of expenses to average net assets after reductions | 0.50 | %4 | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | %5 | ||||||||||||
Ratio of net investment income to average net assets | 2.31 | %4 | 2.46 | % | 1.88 | % | 1.72 | % | 1.49 | %5 | ||||||||||||
Portfolio turnover rate | 63 | %3 | 125 | % | 77 | % | 142 | % | 91 | %3 | ||||||||||||
Portfolio turnover rate8 | 21 | %3 | 64 | % | 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, 2018, the years ended October 31, 2017, 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, 2019, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2018, the years ended October 31, 2017, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $53,392, $123,485, $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, 2018 | 21 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2018 (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, 2018, 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 (the “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, 2018 (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, 2018 | 23 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
on the ex-dividend date. The Fund declared dividends in the amount of $346,600 and $1,564,712 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2018. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purpose. |
Distributions paid from: | ||||||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax exempt income | Tax return of capital | Total distributions paid | |||||||||||||||||||||||
2017: | $ | 795,101 | $ | 705,293 | $ | 1,500,394 | $ | 1,839,910 | $ | – | $ | 3,340,304 | ||||||||||||||||
2016: | 474,909 | 124,475 | 599,384 | 1,281,785 | – | 1,881,169 |
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 | Book unrealized appreciation/ (depreciation) | Total accumulated earnings/ (deficit) | ||||||||||||||||||||||||||
2017: | $ | 108,314 | $ | 697,168 | $ | 805,482 | $ | – | $ | – | $ | 2,111,043 | $ | 2,916,525 | ||||||||||||||||||
2016: | 638,250 | 511,015 | 1,149,265 | – | – | 2,646,009 | 3,795,274 |
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, 2018 (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, portfolio management and 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, 2018, the Fund incurred $193,156 under the Agreement. |
B. | Investment Advisory and Administrative Fee Waiver. 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, 2019, 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, 2018, the Investment Adviser waived fees in the amount of $32,896 and $53,392 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, 2018, Class N shares of the Fund incurred $17,233 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, 2018, the Fund incurred $18,823 in custody and fund accounting fees. These fees for the Fund were reduced by $686 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, 2018 | 25 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2018, was $134. This amount is included 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, 2018, the Fund incurred $27,292 in independent Trustee compensation and reimbursements. |
F. | Affiliated Ownership. As of April 30, 2018, BBH is the owner of record of 20.0% of the total outstanding shares of the Fund. |
4. | Investment Transactions. For the six months ended April 30, 2018, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, was $105,405,272 and $63,069,410, 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, 2018 (unaudited) | For the year ended October 31, 2017 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 1,366,622 | $ | 14,015,025 | 453,720 | $ | 4,704,644 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 29,977 | 308,896 | 61,745 | 633,673 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 194 | N/A | 118 | |||||||||||||||
Shares redeemed | (268,792 | ) | (2,766,681 | ) | (1,188,349 | ) | (12,342,086 | ) | |||||||||||
Net increase (decrease) | 1,127,807 | $ | 11,557,434 | (672,884 | ) | $ | (7,003,651 | ) | |||||||||||
Class I | |||||||||||||||||||
Shares sold | 4,356,078 | $ | 44,599,315 | 1,700,059 | $ | 17,624,316 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 56,921 | 586,464 | 73,690 | 761,026 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | N/A | N/A | 28 | |||||||||||||||
Shares redeemed | (1,628,640 | ) | (16,687,518 | ) | (1,227,128 | ) | (12,610,972 | ) | |||||||||||
Net increase | 2,784,359 | $ | 28,498,261 | 546,621 | $ | 5,774,398 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (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, 2018 | 27 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2018 (unaudited)
Fund’s shareholders (shareholder concentration risk). The extent of the Fund’s exposure to these risks in respect to these financial assets is included in their value as recorded in the Fund’s Statement of Assets and Liabilities.
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Recent pronouncements. |
A. | ASU 2017-08. In March 2017, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (the “ASU”) which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The ASU does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU is effective for years, and interim periods within those years, beginning after December 15, 2018. Management is currently evaluating the application of ASU 2017-08 and its impact, if any, on the Fund’s financial statements. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2018 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, 2018 (unaudited)
financial statements april 30, 2018 | 29 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2018 (unaudited)
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 991 | $ | 3.21 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,022 | $ | 3.26 |
Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Expenses Paid During Period November 1, 2017 to April 30, 20181 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 991 | $ | 2.47 | ||||||||
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, 2018 (unaudited)
financial statements april 30, 2018 | 31 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
performance, the Board noted the Fund had outperformed as compared to a selection of peer category for the 1-, 2- and 3-year periods ended September 30, 2017. In evaluating the 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.
financial statements april 30, 2018 | 33 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2018 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 35 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 37 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
Investment Adviser in the investment decision-making process (including with respect to futures, fixed price offerings and over-the-counter transactions). The use of a broker that provides research and securities transaction services may result in a higher commission than that offered by a broker who does not provide such services. The Investment Adviser will determine in good faith whether the amount of commission is reasonable in relation to the value of research and services provided and whether the services provide lawful and appropriate assistance in its investment decision-making responsibilities.
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (unaudited)
financial statements april 30, 2018 | 39 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2018 (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.
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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.
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(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable. |
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable. |
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable. |
Item 11. Controls and Procedures.
(a) | The Registrant’s principal executive and financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this Form N-CSR, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
|
(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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable. |
Item 13. 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 13(a)(2) to this Form N-CSR.
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(a)(3) | Not applicable. |
(b) | Certifications required by Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are furnished as Exhibit 13(b) to this Form N-CSR. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BBH Trust
By: (Signature and Title)
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin
Title: President (Principal Executive Officer)
Date: July 9, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: (Signature and Title)
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin
Title: President (Principal Executive Officer)
Date: July 9, 2018
By: (Signature and Title)
/s/ Charles H. Schreiber
Charles H. Schreiber
Title: Treasurer (Principal Financial Officer)
Date: July 9, 2018