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
BBH Income 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, 2019
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Report to Stockholders.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other Fund communications electronically from the Fund by calling 1-800-575-1265 or from your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund by calling 1-800-575-1265 or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper may apply to all funds in the fund complex or held with your financial intermediary.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2019 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (96.8%) | ||||||||||
BASIC MATERIALS (6.2%) | ||||||||||
194,919 | Celanese Corp. (Series A) | $ | 21,029,811 | |||||||
151,058 | Linde, Plc. (Ireland) | 27,229,715 | ||||||||
Total Basic Materials | 48,259,526 | |||||||||
COMMUNICATIONS (13.6%) | ||||||||||
46,482 | Alphabet, Inc. (Class C)1 | 55,242,927 | ||||||||
1,157,358 | Comcast Corp. (Class A) | 50,379,794 | ||||||||
Total Communications | 105,622,721 | |||||||||
CONSUMER CYCLICAL (8.1%) | ||||||||||
508,883 | Copart, Inc.1 | 34,258,004 | ||||||||
36,165 | Costco Wholesale Corp. | 8,879,592 | ||||||||
158,619 | Dollar General Corp. | 20,000,270 | ||||||||
Total Consumer Cyclical | 63,137,866 | |||||||||
CONSUMER NON-CYCLICAL (38.6%) | ||||||||||
138,072 | Alcon, Inc. (Switzerland)1 | 8,035,790 | ||||||||
358,261 | Brown-Forman Corp. (Class B) | 19,091,729 | ||||||||
230,990 | Colgate-Palmolive Co. | 16,813,762 | ||||||||
172,139 | Diageo, Plc. ADR (United Kingdom) | 29,029,521 | ||||||||
181,125 | FleetCor Technologies, Inc.1 | 47,264,569 | ||||||||
379,406 | Henry Schein, Inc.1 | 24,304,748 | ||||||||
638,677 | Kroger Co. | 16,465,093 | ||||||||
156,073 | Nestle SA ADR (Switzerland) | 15,065,727 | ||||||||
383,112 | Novartis AG ADR (Switzerland) | 31,503,300 | ||||||||
142,844 | PayPal Holdings, Inc.1 | 16,108,518 | ||||||||
293,565 | Perrigo Co., Plc. (Ireland) | 14,067,635 | ||||||||
755,428 | Sabre Corp. | 15,682,685 | ||||||||
279,063 | Unilever NV (NY Shares) (Netherlands) | 16,886,102 | ||||||||
295,485 | Zoetis, Inc. (Class A) | 30,092,192 | ||||||||
Total Consumer Non-Cyclical | 300,411,371 | |||||||||
FINANCIALS (16.2%) | ||||||||||
175 | Berkshire Hathaway, Inc. (Class A)1 | 56,889,002 | ||||||||
810,210 | US Bancorp | 43,200,397 | ||||||||
531,032 | Wells Fargo & Co. | 25,707,259 | ||||||||
Total Financials | 125,796,658 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares | Value | |||||||||
COMMON STOCKS (continued) | ||||||||||
INDUSTRIALS (5.0%) | ||||||||||
244,561 | Allegion, Plc. (Ireland) | $ | 24,267,788 | |||||||
134,256 | Waste Management, Inc. | 14,411,039 | ||||||||
Total Industrials | 38,678,827 | |||||||||
TECHNOLOGY (9.1%) | ||||||||||
113,880 | KLA-Tencor Corp. | 14,517,422 | ||||||||
1,026,459 | Oracle Corp. | 56,793,977 | ||||||||
Total Technology | 71,311,399 | |||||||||
Total Common Stock (Identified cost $407,961,716) | 753,218,368 |
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
REPURCHASE AGREEMENTS (2.2%) | ||||||||||||||||||
$17,200,000 | National Australia Bank, Ltd. (Agreement dated 04/30/19 Collateralized by U.S. Treasury Bills 2.700%, due 06/27/19, original par $17,620,000, valued at $17,544,000) | 05/01/19 | 2.700 | % | $ | 17,200,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $17,200,000) | 17,200,000 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $425,161,716)2 | 99.0 | % | $ | 770,418,368 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 1.0 | % | 7,745,770 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 778,164,138 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $425,161,716, the aggregate gross unrealized appreciation is $357,337,502 and the aggregate gross unrealized depreciation is $12,080,850, resulting in net unrealized appreciation (depreciation) of $345,256,652. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 3 |
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 (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, 2019 | ||||||||||||||
Common Stock: | ||||||||||||||||||
Basic Materials | $ | 48,259,526 | $ | – | $ | – | $ | 48,259,526 | ||||||||||
Communications | 105,622,721 | – | – | 105,622,721 | ||||||||||||||
Consumer Cyclical | 63,137,866 | – | – | 63,137,866 | ||||||||||||||
Consumer Non-Cyclical | 300,411,371 | – | – | 300,411,371 | ||||||||||||||
Financials | 125,796,658 | – | – | 125,796,658 | ||||||||||||||
Industrials | 38,678,827 | – | – | 38,678,827 | ||||||||||||||
Technology | 71,311,399 | – | – | 71,311,399 | ||||||||||||||
Repurchase Agreements | – | 17,200,000 | – | 17,200,000 | ||||||||||||||
Investments, at value | $ | 753,218,368 | $ | 17,200,000 | $ | – | $ | 770,418,368 |
* | 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, 2019. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 5 |
BBH CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2019 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $407,961,716) | $ | 753,218,368 | ||||
Repurchase agreements (Identified cost $17,200,000) | 17,200,000 | |||||
Cash | 2,672,778 | |||||
Receivables for: | ||||||
Dividends | 6,745,341 | |||||
Shares sold | 393,183 | |||||
Investment advisory and administrative fee waiver reimbursement | 219,986 | |||||
Interest | 5,650 | |||||
Total Assets | 780,455,306 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investment advisory and administrative fees | 1,026,851 | |||||
Shares redeemed | 677,791 | |||||
Shareholder servicing fees | 256,713 | |||||
Professional fees | 45,604 | |||||
Custody and fund accounting fees | �� | 29,215 | ||||
Transfer agent fees | 9,650 | |||||
Distribution fees | 2,614 | |||||
Board of Trustees’ fees | 2,098 | |||||
Accrued expenses and other liabilities | 240,632 | |||||
Total Liabilities | 2,291,168 | |||||
NET ASSETS | $ | 778,164,138 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 86,001,299 | ||||
Retained earnings | 692,162,839 | |||||
Net Assets | $ | 778,164,138 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($765,722,389 ÷ 51,095,079 shares outstanding) | $14.99 | |||||
RETAIL CLASS SHARES | ||||||
($12,441,749 ÷ 3,012,897 shares outstanding) | $4.13 |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2019 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $348,126) | $ | 6,615,210 | ||||
Interest income | 258,005 | |||||
Other income | 5,362 | |||||
Total Income | 6,878,577 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 3,852,196 | |||||
Shareholder servicing fees | 963,049 | |||||
Shareholder report fees | 93,938 | |||||
Custody and fund accounting fees | 54,170 | |||||
Transfer agent fees | 50,992 | |||||
Professional fees | 33,594 | |||||
Distribution fees | 33,157 | |||||
Board of Trustees’ fees | 24,164 | |||||
Miscellaneous expenses | 200,222 | |||||
Total Expenses | 5,305,482 | |||||
Investment advisory and administrative fee waiver | (437,082 | ) | ||||
Expense offset arrangement | (19,999 | ) | ||||
Net Expenses | 4,848,401 | |||||
Net Investment Income | 2,030,176 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 344,520,931 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (307,135,453 | ) | ||||
Net Realized and Unrealized Gain | 37,385,478 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 39,415,654 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 7 |
BBH CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2019 (unaudited) | For the year ended October 31, 2018 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 2,030,176 | $ | 10,586,989 | ||||||
Net realized gain on investments in securities | 344,520,931 | 482,435,941 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (307,135,453 | ) | (351,225,923 | ) | ||||||
Net increase in net assets resulting from operations | 39,415,654 | 141,797,007 | ||||||||
Dividends and distributions declared: | ||||||||||
Class N | (353,318,050 | ) | (385,882,439 | ) | ||||||
Retail Class | (10,536,589 | ) | (36,362,272 | ) | ||||||
Total dividends and distributions declared | (363,854,639 | ) | (422,244,711 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 144,439,718 | 288,574,533 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 226,573,597 | 288,266,495 | ||||||||
Proceeds from short-term redemption fees | 9,997 | 8,301 | ||||||||
Cost of shares redeemed* | (960,769,093 | ) | (1,343,052,733 | ) | ||||||
Net decrease in net assets resulting from share transactions | (589,745,781 | ) | (766,203,404 | ) | ||||||
Total decrease in net assets | (914,184,766 | ) | (1,046,651,108 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 1,692,348,904 | 2,739,000,012 | ||||||||
End of period | $ | 778,164,138 | $ | 1,692,348,904 |
* | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.86 | $ | 23.18 | $ | 21.15 | $ | 22.79 | $ | 22.52 | $ | 21.21 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.03 | 0.10 | 0.10 | 0.12 | 0.12 | 0.14 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.77 | 1.09 | 3.64 | (0.08 | ) | 0.64 | 1.70 | ||||||||||||||||||||
Total income from investment operations | 0.80 | 1.19 | 3.74 | 0.04 | 0.76 | 1.84 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.12 | ) | (0.13 | ) | (0.12 | ) | (0.14 | ) | (0.10 | ) | |||||||||||||||
From net realized gains | (6.56 | ) | (3.39 | ) | (1.58 | ) | (1.56 | ) | (0.35 | ) | (0.43 | ) | |||||||||||||||
Total dividends and distributions | (6.67 | ) | (3.51 | ) | (1.71 | ) | (1.68 | ) | (0.49 | ) | (0.53 | ) | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
Net asset value, end of period | $ | 14.99 | $ | 20.86 | $ | 23.18 | $ | 21.15 | $ | 22.79 | $ | 22.52 | |||||||||||||||
Total return | 8.06 | %3 | 5.19 | % | 18.70 | % | 0.40 | % | 3.47 | % | 8.90 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 766 | $ | 1,617 | $ | 2,592 | $ | 3,403 | $ | 4,970 | $ | 5,816 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.09 | %4 | 1.04 | % | 1.02 | % | 1.01 | % | 1.07 | % | 1.07 | % | |||||||||||||||
Fee waiver | 0.09 | %4,5 | 0.04 | %5 | 0.02 | %5 | 0.01 | %5 | 0.07 | %5 | 0.07 | %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 | 0.43 | %4 | 0.46 | % | 0.46 | % | 0.57 | % | 0.53 | % | 0.66 | % | |||||||||||||||
Portfolio turnover rate | 7 | %3 | 14 | % | 15 | % | 12 | % | 8 | % | 8 | % |
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, 2019, the years ended October 31, 2018, 2017, 2016, 2015 and 2014, reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.00%. The agreement is effective for all years presented and is effective through February 29, 2020, unless renewed by all parties to the agreement. For the six months ended April 30, 2019 and the years ended October 31, 2018, 2017, 2016, 2015 and 2014, the waived fees were $386,790, $811,840, $673,403, $531,298, $3,938,986 and $4,238,260, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 9 |
BBH CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.70 | $ | 13.51 | $ | 13.00 | $ | 14.65 | $ | 14.66 | $ | 13.99 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.00 | 2 | 0.02 | 0.03 | 0.05 | 0.03 | 0.06 | ||||||||||||||||||||
Net realized and unrealized gain (loss) | (0.01 | ) | 0.64 | 2.16 | (0.07 | ) | 0.42 | 1.11 | |||||||||||||||||||
Total income (loss) from investment operations | (0.01 | ) | 0.66 | 2.19 | (0.02 | ) | 0.45 | 1.17 | |||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | 0.00 | 2 | (0.08 | ) | (0.10 | ) | (0.07 | ) | (0.11 | ) | (0.07 | ) | |||||||||||||||
From net realized gains | (6.56 | ) | (3.39 | ) | (1.58 | ) | (1.56 | ) | (0.35 | ) | (0.43 | ) | |||||||||||||||
Total dividends and distributions | (6.56 | ) | (3.47 | ) | (1.68 | ) | (1.63 | ) | (0.46 | ) | (0.50 | ) | |||||||||||||||
Short-term redemption fees1,2 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
Net asset value, end of period | $ | 4.13 | $ | 10.70 | $ | 13.51 | $ | 13.00 | $ | 14.65 | $ | 14.66 | |||||||||||||||
Total return | 7.94 | %3 | 4.92 | % | 18.40 | % | 0.19 | % | 3.14 | % | 8.63 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 12 | $ | 75 | $ | 147 | $ | 178 | $ | 280 | $ | 400 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.63 | %4 | 1.32 | % | 1.33 | % | 1.33 | % | 1.39 | % | 1.40 | % | |||||||||||||||
Fee waiver | 0.38 | %4,5 | 0.07 | %5 | 0.08 | %5 | 0.10 | %5 | 0.14 | %5 | 0.15 | %5 | |||||||||||||||
Expense offset arrangement | 0.00 | %4,6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | 0.00 | %6 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 1.25 | %4 | 1.25 | % | 1.25 | % | 1.23 | % | 1.25 | % | 1.25 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.15 | %4 | 0.16 | % | 0.21 | % | 0.37 | % | 0.24 | % | 0.40 | % | |||||||||||||||
Portfolio turnover rate | 7 | %3 | 14 | % | 15 | % | 12 | % | 8 | % | 8 | % |
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, 2019, the years ended October 31, 2018, 2017, 2016, 2015 and 2014, reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.25%. The agreement is effective for all years presented and is effective through February 29, 2020, unless renewed by all parties to the agreement. For the six months ended April 30, 2019 and the years ended October 31, 2018, 2017, 2016, 2015 and 2014, the waived fees were $50,292, $70,588, $133,469, $234,959, $551,384 and $577,948, 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, 2019 (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, 2019, there were seven 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, 2019 | 11 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 on a net assets basis. 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. |
Repurchase agreements are entered into by the Fund under Master Repurchase Agreements (“MRA”) which permit the Fund, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables under the MRA with collateral held and/or posted to the counterparty and create one single net payment due to or from the Fund. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterparty’s bankruptcy or insolvency. Lastly, the MRA does not preclude the Fund from selling, transferring, pledging or hypothecating the underlying collateral but no such transaction shall relieve the Fund of its obligation to transfer the collateral to the counterparty upon the latter’s repurchase of the securities. |
The Fund’s repurchase agreements as of April 30, 2019 are shown on a gross basis and the required disclosures under Accounting Standards Update (“ASU”) 2013-01 are shown in the Portfolio of Investments. Repurchase agreements are subject to credit risks. |
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 realized gain reported in these financial statements may differ from that reported on the Fund’s tax |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
return, due to certain book-to-tax timing differences such as losses deferred due to “wash sale” transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are reclassified between paid-in capital and retained earnings/(accumulated deficit) within the Statement of Assets and 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, 2018, 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, 2019, 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 from net investment income to shareholders, if any, are paid annually 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 and distributions in the amounts of $353,318,050 and $10,536,589 to Class N shares and Retail Class shareholders, respectively, during the six months ended April 30, 2019. 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, 2019 | 13 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
The tax character of distributions paid during the years ended October 31, 2018 and 2017, respectively, were as follows: |
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2018: | $ | 14,349,099 | $ | 407,895,612 | $ | 422,244,711 | $ | — | $ | 422,244,711 | ||||||||||||||
2017: | 21,937,123 | 263,393,355 | 285,330,478 | — | 285,330,478 |
As of October 31, 2018 and 2017, respectively, the components of retained earnings/(accumulated deficit) on a tax basis were as follows: |
Components of retained earnings/(accumulated deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Retained earnings/ (accumulated deficit) | Accumulated capital and other losses | Other book/tax temporary differences | Book unrealized appreciation/ (depreciation) | Total retained earnings/ (accumulated deficit) | ||||||||||||||||||||||||||
2018: | $ | 4,937,659 | $ | 357,964,713 | $ | 362,902,372 | $ | — | $ | 1,307,347 | $ | 652,392,105 | $ | 1,016,601,824 | ||||||||||||||||||
2017: | 12,701,945 | 407,895,164 | 420,597,109 | — | (390,289 | ) | 1,003,618,028 | 1,423,824,848 |
The Fund did not have a net capital loss carryforward at October 31, 2018. |
The Fund is permitted to carryforward capital losses for an unlimited period and they will retain their character as either short-term or long-term capital losses rather than being considered all short-term capital losses. |
Total distributions paid may differ from amounts reported in the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid. |
The differences between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales. |
To the extent future capital gains are offset by capital loss carryforwards, if any, such gains will not be distributed. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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. |
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 billion of the Fund’s average daily net assets and 0.75% per annum on the Fund’s average daily net assets over $3 billion. For the six months ended April 30, 2019, the Fund incurred $3,852,196 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 February 29, 2020, 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, 2019, the Investment Adviser waived fees in the amount of $386,790 and $50,292 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, 2019, the Fund incurred shareholder servicing fees in the amount of $936,658 and $26,391 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 |
financial statements april 30, 2019 | 15 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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, its is anticipated that total operating expenses for Retail Class shares will be no greater than 1.25% of the average daily net assets. For the six months ended April 30, 2019, Retail Class shares of the Fund incurred $33,157 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, 2019, the Fund incurred $54,170 in custody and fund accounting fees. These fees for the Fund were reduced by $19,999 as a result of an expense offset arrangement with the Fund’s custodian, which expired on December 31, 2018. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. Upon the expiration of the expense offset arrangement, the Fund received interest income on cash balances held by the custodian at the BBH Base Rate. 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, 2019, was $4,583. 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, 2019, the Fund incurred $24,164 in independent Trustee compensation and expense reimbursements. |
G. | Officers of the Trust. Officers of the Trust are also employees of BBH. Officers are paid no fees by the Trust for their services to the Trust. |
4. | Investment Transactions. For the six months ended April 30, 2019, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $68,816,972 and $977,512,115, respectively. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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, 2019 | For the year ended October 31, 2018 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 10,500,896 | $ | 142,639,185 | 13,148,212 | $ | 277,541,062 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 16,343,451 | 216,387,290 | 12,123,335 | 252,165,359 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 9,331 | N/A | 7,891 | |||||||||||||||
Shares redeemed | (53,254,421 | ) | (897,123,323 | ) | (59,598,540 | ) | (1,252,582,575 | ) | |||||||||||
Net decrease | (26,410,074 | ) | $ | (538,087,517 | ) | (34,326,993 | ) | $ | (722,868,263 | ) | |||||||||
Retail Class | |||||||||||||||||||
Shares sold | 385,660 | $ | 1,800,533 | 992,349 | $ | 11,033,471 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 2,790,769 | 10,186,307 | 3,373,938 | 36,101,136 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 666 | N/A | 410 | |||||||||||||||
Shares redeemed | (7,216,179 | ) | (63,645,770 | ) | (8,212,773 | ) | (90,470,158 | ) | |||||||||||
Net decrease | (4,039,750 | ) | $ | (51,658,264 | ) | (3,846,486 | ) | $ | (43,335,141 | ) |
financial statements april 30, 2019 | 17 |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
7. | Recent Pronouncements. |
A. | ASU 2018-13. On August 28, 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework —Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”). ASU 2018-13 modifies the disclosure objective paragraphs of Accounting Standards Codification 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. ASU 2018-13 also eliminates and modifies other requirements under ASU 2018-13. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted. Management does not expect the application of ASU 2018-13 will have material impact on the Fund’s financial statements. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2019 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, 2019 | 19 |
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES
April 30, 2019 (unaudited)
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2019 (unaudited)
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,081 | $ | 5.16 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,020 | $ | 5.01 |
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 1,079 | $ | 6.44 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.26 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 1.00% and 1.25% for Class N and Retail Class shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
2 | Assumes a return of 5% before expenses. For the purposes of the calculation, the applicable annualized expense ratio for each class of shares is subtracted from the assumed return before expenses. |
financial statements april 30, 2019 | 21 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION
April 30, 2019 (unaudited)
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
economies of scale; (f) fall-out benefits to the Investment Adviser as a result of its relationship with the Fund; and (g) other factors deemed relevant by the Board. The following is a summary of the factors the Board considered in making its determination to approve the continuance of the Agreement. No single factor reviewed by the Board was identified as the principal factor in determining whether to approve the 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 based on the comparative performance, expense information, the cost of the services provided, and the profits realized by the Investment Adviser.
financial statements april 30, 2019 | 23 |
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
BBH CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
conducted a detailed review of the allocation methods used in preparing the profitability data. The Board focused on profitability of the Investment Adviser’s and BBH’s relationships with the Fund before taxes and distribution expenses. The Board concluded that the Investment Adviser’s and BBH’s profitability was not excessive in light of the nature, extent and quality of services provided to the Fund.
financial statements april 30, 2019 | 25 |
BBH CORE SELECT
CONFLICTS OF INTEREST
April 30, 2019 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 27 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (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, 2019 | 29 |
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 31 |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 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 |
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other Fund communications electronically from the Fund by calling 1-800-575-1265 or from your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund by calling 1-800-575-1265 or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper may apply to all funds in the fund complex or held with your financial intermediary.
BBH GLOBAL CORE SELECT
PORTFOLIO ALLOCATION
April 30, 2019 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Belgium | $ | 2,688,136 | 4.6 | % | ||||||
Canada | 4,424,268 | 7.6 | ||||||||
France | 4,296,915 | 7.4 | ||||||||
Germany | 2,081,505 | 3.6 | ||||||||
Ireland | 3,136,811 | 5.4 | ||||||||
Italy | 1,300,593 | 2.2 | ||||||||
Netherlands | 2,687,593 | 4.6 | ||||||||
Switzerland | 3,713,340 | 6.4 | ||||||||
United Kingdom | 7,290,769 | 12.5 | ||||||||
United States | 23,733,489 | 40.8 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2,824,970 | 4.9 | ||||||||
NET ASSETS | $ | 58,178,389 | 100.0 | % |
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Basic Materials | $ | 4,409,052 | 7.6 | % | ||||||
Communications | 5,162,599 | 8.9 | ||||||||
Consumer Cyclical | 5,891,848 | 10.1 | ||||||||
Consumer Non-Cyclical | 27,177,238 | 46.7 | ||||||||
Financials | 9,110,699 | 15.6 | ||||||||
Technology | 3,601,983 | 6.2 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2,824,970 | 4.9 | ||||||||
NET ASSETS | $ | 58,178,389 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS
April 30, 2019 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (95.1%) | ||||||||||
BELGIUM (4.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
14,140 | Anheuser-Busch InBev SA NV | $ | 1,255,683 | |||||||
FINANCIALS | ||||||||||
19,345 | KBC Group NV | 1,432,453 | ||||||||
Total Belgium | 2,688,136 | |||||||||
CANADA (7.6%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
42,590 | Alimentation Couche-Tard, Inc. (Class B) | 2,505,350 | ||||||||
FINANCIALS | ||||||||||
2,550 | Fairfax Financial Holdings, Ltd | 1,213,244 | ||||||||
8,645 | Intact Financial Corp. | 705,674 | ||||||||
1,918,918 | ||||||||||
Total Canada | 4,424,268 | |||||||||
FRANCE (7.4%) | ||||||||||
COMMUNICATIONS | ||||||||||
38,705 | JCDecaux SA | 1,266,762 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
71,375 | Bureau Veritas SA | 1,811,099 | ||||||||
14,045 | Sanofi | 1,219,054 | ||||||||
3,030,153 | ||||||||||
Total France | 4,296,915 | |||||||||
GERMANY (3.6%) | ||||||||||
BASIC MATERIALS | ||||||||||
16,505 | Fuchs Petrolub SE | 656,162 | ||||||||
FINANCIALS | ||||||||||
10,710 | Deutsche Boerse AG | 1,425,343 | ||||||||
Total Germany | 2,081,505 | |||||||||
IRELAND (5.4%) | ||||||||||
BASIC MATERIALS | ||||||||||
11,538 | Linde, Plc. | 2,079,840 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
22,057 | Perrigo Co., Plc. | 1,056,971 | ||||||||
Total Ireland | 3,136,811 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 3 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
ITALY (2.2%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
129,260 | Davide Campari-Milano SpA | $ | 1,300,593 | |||||||
Total Italy | 1,300,593 | |||||||||
NETHERLANDS (4.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
13,785 | Heineken Holding NV | 1,400,248 | ||||||||
21,275 | Unilever NV | 1,287,345 | ||||||||
Total Netherlands | 2,687,593 | |||||||||
SWITZERLAND (6.4%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
10,598 | Alcon, Inc.1 | 609,607 | ||||||||
11,640 | Nestle SA | 1,119,983 | ||||||||
24,316 | Novartis AG | 1,983,750 | ||||||||
Total Switzerland | 3,713,340 | |||||||||
UNITED KINGDOM (12.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
67,565 | Diageo, Plc. | 2,846,759 | ||||||||
24,240 | Reckitt Benckiser Group, Plc. | 1,962,192 | ||||||||
4,808,951 | ||||||||||
FINANCIALS | ||||||||||
3,043,700 | Lloyds Banking Group, Plc. | 2,481,818 | ||||||||
Total United Kingdom | 7,290,769 | |||||||||
UNITED STATES (40.8%) | ||||||||||
BASIC MATERIALS | ||||||||||
15,507 | Celanese Corp. (Series A) | 1,673,050 | ||||||||
COMMUNICATIONS | ||||||||||
3,278 | Alphabet, Inc. (Class C)1 | 3,895,837 | ||||||||
CONSUMER CYCLICAL | ||||||||||
41,460 | Copart, Inc.1 | 2,791,087 | ||||||||
2,425 | Costco Wholesale Corp. | 595,411 | ||||||||
3,386,498 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
UNITED STATES (continued) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
16,883 | Colgate-Palmolive Co. | $ | 1,228,914 | |||||||
13,372 | FleetCor Technologies, Inc.1 | 3,489,423 | ||||||||
19,559 | Henry Schein, Inc.1 | 1,252,950 | ||||||||
10,789 | PayPal Holdings, Inc.1 | 1,216,675 | ||||||||
20,974 | Zoetis, Inc. (Class A) | 2,135,992 | ||||||||
9,323,954 | ||||||||||
FINANCIALS | ||||||||||
38,260 | Wells Fargo & Co. | 1,852,167 | ||||||||
TECHNOLOGY | ||||||||||
65,100 | Oracle Corp. | 3,601,983 | ||||||||
Total United States | 23,733,489 | |||||||||
Total Common Stock (Identified cost $40,133,888) | 55,353,419 |
TOTAL INVESTMENTS (Identified cost $40,133,888)2 | 95.1 | % | $ | 55,353,419 | ||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 4.9 | % | 2,824,970 | |||||||
NET ASSETS | 100.0 | % | $ | 58,178,389 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $40,133,888, the aggregate gross unrealized appreciation is $17,350,603 and the aggregate gross unrealized depreciation is $2,131,072, resulting in net unrealized appreciation of $15,219,531. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 5 |
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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 GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 | ||||||||||||||
Common Stock: | ||||||||||||||||||
Basic Materials | $ | 3,752,890 | $ | 656,162 | $ | — | $ | 4,409,052 | ||||||||||
Communications | 3,895,837 | 1,266,762 | — | 5,162,599 | ||||||||||||||
Consumer Cyclical | 5,891,848 | — | — | 5,891,848 | ||||||||||||||
Consumer Non-Cyclical | 10,380,925 | 16,796,313 | — | 27,177,238 | ||||||||||||||
Financials | 3,771,085 | 5,339,614 | — | 9,110,699 | ||||||||||||||
Technology | 3,601,983 | — | — | 3,601,983 | ||||||||||||||
Investments, at value | $ | 31,294,568 | $ | 24,058,851 | $ | — | $ | 55,353,419 |
* | 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, 2019. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 7 |
BBH GLOBAL CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2019 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $40,133,888) | $ | 55,353,419 | ||||
Cash | 1,406,696 | |||||
Foreign currency at value (Identified cost $15) | 15 | |||||
Receivables for: | ||||||
Investments sold | 1,238,924 | |||||
Dividends | 321,534 | |||||
Investment advisory and administrative fee waiver reimbursement | 27,812 | |||||
Interest | 2,915 | |||||
Prepaid assets | 17,062 | |||||
Total Assets | 58,368,377 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investment advisory and administrative fees | 93,080 | |||||
Professional fees | 46,090 | |||||
Shareholder servicing fees | 19,596 | |||||
Custody and fund accounting fees | 5,660 | |||||
Transfer agent fees | 4,056 | |||||
Investments purchased | 3,463 | |||||
Board of Trustees’ fees | 1,734 | |||||
Distribution fees | 313 | |||||
Accrued expenses and other liabilities | 15,996 | |||||
Total Liabilities | 189,988 | |||||
NET ASSETS | $ | 58,178,389 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 38,766,238 | ||||
Retained earnings | 19,412,151 | |||||
Net Assets | $ | 58,178,389 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($57,069,354 ÷ 4,670,469 shares outstanding) | $12.22 | |||||
RETAIL CLASS SHARES | ||||||
($1,109,035 ÷ 91,230 shares outstanding) | $12.16 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENT OF OPERATIONS
For the six months ended April 30, 2019 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $33,512) | $ | 491,308 | ||||
Interest income | 14,318 | |||||
Total Income | 505,626 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 305,928 | |||||
Shareholder servicing fees | 64,406 | |||||
Professional fees | 36,287 | |||||
Board of Trustees’ fees | 24,011 | |||||
Transfer agent fees | 19,656 | |||||
Custody and fund accounting fees | 19,001 | |||||
Shareholder report fees | 13,388 | |||||
Distribution fees | 1,968 | |||||
Miscellaneous expenses | 16,720 | |||||
Total Expenses | 501,365 | |||||
Investment advisory and administrative fee waiver | (84,348 | ) | ||||
Expense offset arrangement | (12,466 | ) | ||||
Net Expenses | 404,551 | |||||
Net Investment Income | 101,075 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 4,463,962 | |||||
Net realized gain on foreign exchange transactions and translations | 5,022 | |||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 4,468,984 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | (852,701 | ) | ||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | (1,846 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (854,547 | ) | ||||
Net Realized and Unrealized Gain | 3,614,437 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 3,715,512 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 9 |
BBH GLOBAL CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2019 (unaudited) | For the year ended October 31, 2018 | |||||||||
DECREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 101,075 | $ | 662,475 | ||||||
Net realized gain on investments in securities and foreign exchange transactions and translations | 4,468,984 | 10,894,814 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | (854,547 | ) | (12,277,615 | ) | ||||||
Net increase (decrease) in net assets resulting from operations | 3,715,512 | (720,326 | ) | |||||||
Dividends and distributions declared: | ||||||||||
Class N | (8,731,749 | ) | (2,954,827 | ) | ||||||
Retail Class | (191,903 | ) | (80,202 | ) | ||||||
Total dividends and distributions declared | (8,923,652 | ) | (3,035,029 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 2,578,026 | 13,323,466 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 6,665,681 | 2,381,377 | ||||||||
Cost of shares redeemed | (33,890,026 | ) | (58,271,914 | ) | ||||||
Net decrease in net assets resulting from share transactions | (24,646,319 | ) | (42,567,071 | ) | ||||||
Total decrease in net assets | (29,854,459 | ) | (46,322,426 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 88,032,848 | 134,355,274 | ||||||||
End of period | $ | 58,178,389 | $ | 88,032,848 |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.88 | $ | 13.32 | $ | 11.11 | $ | 11.37 | $ | 11.27 | $ | 10.99 | |||||||||||||||
Net investment income1 | 0.02 | 0.07 | 0.05 | 0.06 | 0.06 | 0.12 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.90 | (0.21 | ) | 2.22 | (0.18 | ) | 0.30 | 0.21 | |||||||||||||||||||
Total income (loss) from investment operations | 0.92 | (0.14 | ) | 2.27 | (0.12 | ) | 0.36 | 0.33 | |||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.08 | ) | (0.05 | ) | (0.06 | ) | (0.07 | ) | (0.13 | ) | (0.02 | ) | |||||||||||||||
From net realized gains | (1.50 | ) | (0.25 | ) | — | (0.07 | ) | (0.13 | ) | (0.03 | ) | ||||||||||||||||
Total dividends and distributions | (1.58 | ) | (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 | $ | 12.22 | $ | 12.88 | $ | 13.32 | $ | 11.11 | $ | 11.37 | $ | 11.27 | |||||||||||||||
Total return | 8.91 | %3 | (1.11 | )% | 20.54 | % | (1.06 | )% | 3.27 | % | 3.01 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 57 | $ | 86 | $ | 130 | $ | 108 | $ | 132 | $ | 127 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 1.51 | %4 | 1.33 | % | 1.36 | % | 1.38 | % | 1.31 | % | 1.32 | % | |||||||||||||||
Fee waiver | 0.22 | %4,5 | 0.05 | %5 | 0.10 | %5 | 0.13 | %5 | 0.05 | %5 | 0.07 | %5 | |||||||||||||||
Expense offset arrangement | 0.04 | %4 | 0.03 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %6 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 1.25 | %4 | 1.25 | % | 1.25 | % | 1.24 | % | 1.25 | % | 1.25 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.32 | %4 | 0.52 | % | 0.44 | % | 0.58 | % | 0.55 | % | 1.01 | % | |||||||||||||||
Portfolio turnover rate | 13 | %3 | 19 | % | 23 | % | 19 | % | 31 | % | 40 | % |
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, 2019, the years ended October 31, 2018, 2017, 2016, 2015 and 2014 reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.25%. The agreement is effective for all periods presented and is effective through February 29, 2020. For the six months ended April 30, 2019 and the years ended October 31, 2018, 2017, 2016, 2015 and 2014, the waived fees were $68,826, $70,117, $110,626, $146,074, $74,640 and $90,671, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 11 |
BBH GLOBAL CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.81 | $ | 13.24 | $ | 11.05 | $ | 11.31 | $ | 11.24 | $ | 10.98 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.01 | 0.02 | 0.02 | 0.04 | 0.03 | 0.07 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.89 | (0.18 | ) | 2.20 | (0.18 | ) | 0.29 | 0.22 | |||||||||||||||||||
Total income (loss) from investment operations | 0.90 | (0.16 | ) | 2.22 | (0.14 | ) | 0.32 | 0.29 | |||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.05 | ) | (0.02 | ) | (0.03 | ) | (0.05 | ) | (0.12 | ) | (0.01 | ) | |||||||||||||||
From net realized gains | (1.50 | ) | (0.25 | ) | — | (0.07 | ) | (0.13 | ) | (0.03 | ) | ||||||||||||||||
Total dividends and distributions | (1.55 | ) | (0.27 | ) | (0.03 | ) | (0.12 | ) | (0.25 | ) | (0.04 | ) | |||||||||||||||
Short-term redemption fees1 | — | — | — | — | — | 0.01 | |||||||||||||||||||||
Net asset value, end of period | $ | 12.16 | $ | 12.81 | $ | 13.24 | $ | 11.05 | $ | 11.31 | $ | 11.24 | |||||||||||||||
Total return | 8.76 | %2 | (1.26 | )% | 20.18 | % | (1.25 | )% | 2.98 | % | 2.70 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 1 | $ | 2 | $ | 4 | $ | 4 | $ | 4 | $ | 2 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 3.51 | %3 | 2.94 | % | 2.44 | % | 2.65 | % | 2.93 | % | 3.36 | % | |||||||||||||||
Fee waiver | 1.97 | %3,4 | 1.45 | %4 | 0.93 | %4 | 1.14 | %4 | 1.43 | %4 | 1.86 | %4 | |||||||||||||||
Expense offset arrangement | 0.04 | %3 | 0.02 | % | 0.01 | % | 0.01 | % | 0.00 | %5 | 0.00 | %5 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 1.50 | %3 | 1.47 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.14 | %3 | 0.13 | % | 0.20 | % | 0.32 | % | 0.29 | % | 0.61 | % | |||||||||||||||
Portfolio turnover rate | 13 | %2 | 19 | % | 23 | % | 19 | % | 31 | % | 40 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Not annualized. |
3 | Annualized. |
4 | The ratio of expenses to average net assets for the six months ended April 30, 2019, the years ended October 31, 2018, 2017, 2016, 2015 and 2014 reflect fees reduced as result of a contractual operating expense limitation of the share class of 1.50%. The agreement is effective for all periods presented and is effective through February 29, 2020. For the six months ended April 30, 2019 and the years ended October 31, 2018, 2017, 2016, 2015 and 2014, the waived fees were $15,522, $32,231, $35,288, $40,663, $41,058 and $41,099, respectively. |
5 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS
April 30, 2019 (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, 2019 there were seven 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. |
financial statements april 30, 2019 | 13 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 on a net assets basis. 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. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 within the Statement of Operations. Net unrealized appreciation or depreciation on foreign currency translations arise from changes in the value of the assets and liabilities, excluding investments in securities, at period end, resulting from changes in the exchange rate. |
F. | Federal Income Taxes. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. |
financial statements april 30, 2019 | 15 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 between paid-in capital and retained earnings/(accumulated deficit) within the Statement of Assets and 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 from net investment income to shareholders, if any, are paid annually 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 and distributions in the amount of $8,731,749 and $191,903 to Class N and Retail Class shareholders, respectively, during the six months ended April 30, 2019. 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 | ||||||||||||||||||||
2018: | $ | 1,398,238 | $ | 1,636,791 | $ | 3,035,029 | $ | — | $ | 3,035,029 | ||||||||||||||
2017: | 603,959 | — | 603,959 | — | 603,959 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
Components of retained earnings/(accumulated deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Retained earnings/ (accumulated deficit) | Accumulated capital and other losses | Other book/tax temporary differences | Book unrealized appreciation/ (depreciation) | Total retained earnings/ (accumulated deficit) | ||||||||||||||||||||||||||
2018: | $ | 407,144 | $ | 8,499,653 | $ | 8,906,797 | $ | — | $ | (352,669 | ) | $ | 16,066,163 | $ | 24,620,291 | |||||||||||||||||
2017: | 1,374,478 | 1,635,451 | 3,009,929 | — | (447,191 | ) | 28,343,778 | 30,906,516 |
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 |
financial statements april 30, 2019 | 17 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
monthly at an annual rate equivalent to 0.95% on the first $3 billion of the Fund’s average daily net assets and 0.90% per annum on the Fund’s average daily net assets over $3 billion. For the six months ended April 30, 2019, the Fund incurred $305,928 under the Agreement. |
B. | Investment Advisory and Administrative Fee Waivers. Effective March 28, 2013, 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 February 29, 2020, 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, 2019, the Investment Adviser waived fees in the amount of $68,826 and $15,522 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, 2019, the Fund incurred shareholder servicing fees in the amount of $62,829 and $1,577 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 no greater than 1.50% of the average daily net assets. For the six months ended April 30, 2019, Retail Class shares of the Fund incurred $1,968 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, 2019, the Fund incurred $19,001 in custody and fund accounting fees. These fees for the Fund were reduced by $12,466 as a result of an expense offset arrangement with the Fund’s custodian, which expired on December 31, 2018. The credit |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. Upon the expiration of the expense offset arrangement, the Fund received interest income on cash balances held by the custodian at the BBH Base Rate. 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, 2019, was $829. 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, 2019, the Fund incurred $24,011 in independent Trustee compensation and reimbursements. |
G. | Officers of the Trust. Officers of the Trust are also employees of BBH. Officers are paid no fees by the Trust for their services to the Trust. |
4. | Investment Transactions. For the six months ended April 30, 2019, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $8,008,359 and $40,567,307, 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, 2019 (unaudited) | For the year ended October 31, 2018 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 229,776 | $ | 2,537,802 | 972,167 | $ | 13,141,827 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 609,286 | 6,507,179 | 172,526 | 2,308,404 | |||||||||||||||
Shares redeemed | (2,864,667 | ) | (33,100,008 | ) | (4,245,795 | ) | (55,913,343 | ) | |||||||||||
Net decrease | (2,025,605 | ) | $ | (24,055,027 | ) | (3,101,102 | ) | $ | (40,463,112 | ) | |||||||||
Retail Class | |||||||||||||||||||
Shares sold | 3,679 | $ | 40,224 | 13,515 | $ | 181,639 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 14,897 | 158,502 | 5,478 | 72,973 | |||||||||||||||
Shares redeemed | (64,803 | ) | (790,018 | ) | (175,571 | ) | (2,358,571 | ) | |||||||||||
Net decrease | (46,227 | ) | $ | (591,292 | ) | (156,578 | ) | $ | (2,103,959 | ) |
financial statements april 30, 2019 | 19 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
6. | Principal Risk Factors and Indemnifications. |
A. | Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Fund’s prospectus, including but not limited to, those described below: |
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
7. | Recent Pronouncements. |
A. | ASU 2018-13. On August 28, 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”). ASU 2018-13 modifies the disclosure objective paragraphs of ASC 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. ASU 2018-13 also eliminates and modifies other requirements under ASU 2018-13. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted. Management does not expect the application of ASU 2018-13 will have material impact on the Fund’s financial statements. |
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2019 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, 2019 | 21 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES
April 30, 2019 (unaudited)
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2019 (unaudited)
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,089 | $ | 6.47 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,019 | $ | 6.26 |
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Retail Class | ||||||||||||||
Actual | $ | 1,000 | $ | 1,088 | $ | 7.76 | ||||||||
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. |
financial statements april 30, 2019 | 23 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION
April 30, 2019 (unaudited)
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
factor reviewed by the Board was identified as the principal factor in determining whether to approve the 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 based on the comparative performance, expense information, the cost of the services provided, and the profits realized by the Investment Adviser.
financial statements april 30, 2019 | 25 |
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
performance relative to a peer category of other mutual funds in a report compiled by Broadridge. As part of this review, the Trustees considered the composition of the peer category, selection criteria and reputation of Broadridge who prepared the peer category analysis. The Board reviewed with representatives of Broadridge who compiled the comparative report the report’s findings and discussed the positioning of the Fund relative to its selected peer category. In reviewing the Fund’s performance, the Board noted the Fund underperformed as compared to a selection of peer category for the 1-, 2-, 3-, 4- and 5-year periods ended September 30, 2018. They further noted 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 Fund expenses and the Investment Adviser’s profitability.
BBH GLOBAL CORE SELECT
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 27 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST
April 30, 2019 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 29 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (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, 2019 | 31 |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 33 |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||||
By E-mail send your request to: | bbhfunds@bbh.com | |||||
On the internet: | www.bbhfunds.com |
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other Fund communications electronically from the Fund by calling 1-800-575-1265 or from your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund by calling 1-800-575-1265 or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper may apply to all funds in the fund complex or held with your financial intermediary.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO ALLOCATION
April 30, 2019 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Bermuda | $ | 18,253,515 | 1.1 | % | ||||||
Brazil | 8,623,180 | 0.5 | ||||||||
Canada | 69,283,418 | 4.2 | ||||||||
Cayman Islands | 89,766,168 | 5.4 | ||||||||
France | 135,610,292 | 8.1 | ||||||||
Germany | 136,381,484 | 8.2 | ||||||||
Hong Kong | 45,677,990 | 2.7 | ||||||||
Ireland | 55,808,115 | �� | 3.3 | |||||||
Japan | 115,212,518 | 6.9 | ||||||||
Jersey | 31,451,024 | 1.9 | ||||||||
Luxembourg | 15,730,312 | 0.9 | ||||||||
Mexico | 18,245,329 | 1.1 | ||||||||
Netherlands | 92,961,091 | 5.6 | ||||||||
South Korea | 32,175,830 | 1.9 | ||||||||
Spain | 38,042,998 | 2.3 | ||||||||
Sweden | 16,006,625 | 1.0 | ||||||||
Switzerland | 253,547,862 | 15.2 | ||||||||
Thailand | 15,976,026 | 1.0 | ||||||||
United Kingdom | 155,762,829 | 9.3 | ||||||||
United States | 53,802,555 | 3.2 | ||||||||
Registered Investment Companies: | ||||||||||
United States | 228,650,000 | 13.7 | ||||||||
Cash and Other Assets in Excess of Liabilities | 40,963,789 | 2.5 | ||||||||
NET ASSETS | $ | 1,667,932,950 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO ALLOCATION (continued)
April 30, 2019 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Common Stock: | ||||||||||
Communications | $ | 105,496,480 | 6.3 | % | ||||||
Consumer Cyclical | 219,617,502 | 13.2 | ||||||||
Consumer Non-Cyclical | 472,435,134 | 28.3 | ||||||||
Financials | 262,613,313 | 15.8 | ||||||||
Industrials | 114,045,531 | 6.8 | ||||||||
Technology | 224,111,201 | 13.4 | ||||||||
Registered Investment Companies | 228,650,000 | 13.7 | ||||||||
Cash and Other Assets in Excess of Liabilities | 40,963,789 | 2.5 | ||||||||
NET ASSETS | $ | 1,667,932,950 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 3 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS
April 30, 2019 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (83.8%) | ||||||||||
BERMUDA (1.1%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
318,783 | IHS Markit, Ltd.1 | $ | 18,253,515 | |||||||
Total Bermuda | 18,253,515 | |||||||||
BRAZIL (0.5%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
1,838,787 | Ambev SA | 8,623,180 | ||||||||
Total Brazil | 8,623,180 | |||||||||
CANADA (4.2%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
261,584 | Alimentation Couche-Tard, Inc. (Class B) | 15,387,638 | ||||||||
FINANCIALS | ||||||||||
173,360 | Brookfield Asset Management, Inc. (Class A) | 8,354,218 | ||||||||
TECHNOLOGY | ||||||||||
51,734 | Constellation Software, Inc. | 45,541,562 | ||||||||
Total Canada | 69,283,418 | |||||||||
CAYMAN ISLANDS (5.4%) | ||||||||||
COMMUNICATIONS | ||||||||||
237,381 | Alibaba Group Holding, Ltd. ADR1 | 44,050,792 | ||||||||
43,901 | Baidu, Inc. ADR1 | 7,297,663 | ||||||||
775,500 | Tencent Holdings, Ltd. | 38,417,713 | ||||||||
Total Cayman Islands | 89,766,168 | |||||||||
FRANCE (8.1%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
97,373 | LVMH Moet Hennessy Louis Vuitton SE | 38,100,386 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
289,643 | EssilorLuxottica SA1 | 35,201,300 | ||||||||
TECHNOLOGY | ||||||||||
514,507 | Capgemini SE | 62,308,606 | ||||||||
Total France | 135,610,292 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
GERMANY (8.2%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
107,253 | Adidas AG | $ | 27,523,875 | |||||||
CONSUMER NON-CYCLICAL | ||||||||||
668,551 | Fresenius SE & Co. KGaA | 37,866,721 | ||||||||
401,363 | Merck KGaA | 42,699,201 | ||||||||
80,565,922 | ||||||||||
TECHNOLOGY | ||||||||||
220,771 | SAP SE | 28,291,687 | ||||||||
Total Germany | 136,381,484 | |||||||||
HONG KONG (2.7%) | ||||||||||
FINANCIALS | ||||||||||
4,475,130 | AIA Group, Ltd. | 45,677,990 | ||||||||
Total Hong Kong | 45,677,990 | |||||||||
IRELAND (3.3%) | ||||||||||
INDUSTRIALS | ||||||||||
1,146,565 | CRH, Plc. | 38,491,547 | ||||||||
TECHNOLOGY | ||||||||||
94,797 | Accenture, Plc. (Class A) | 17,316,568 | ||||||||
Total Ireland | 55,808,115 | |||||||||
JAPAN (6.9%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
889,535 | Seven & i Holdings Co., Ltd. | 30,860,053 | ||||||||
598,965 | Shiseido Co., Ltd. | 47,117,249 | ||||||||
77,977,302 | ||||||||||
INDUSTRIALS | ||||||||||
59,752 | Keyence Corp. | 37,235,216 | ||||||||
Total Japan | 115,212,518 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 5 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
JERSEY (1.9%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
442,534 | Ferguson, Plc. | $ | 31,451,024 | |||||||
Total Jersey | 31,451,024 | |||||||||
LUXEMBOURG (0.9%) | ||||||||||
COMMUNICATIONS | ||||||||||
115,860 | Spotify Technology SA1 | 15,730,312 | ||||||||
Total Luxembourg | 15,730,312 | |||||||||
MEXICO (1.1%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
186,959 | Fomento Economico Mexicano SAB de CV ADR | 18,245,329 | ||||||||
Total Mexico | 18,245,329 | |||||||||
NETHERLANDS (5.6%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
352,659 | Heineken NV | 38,069,186 | ||||||||
TECHNOLOGY | ||||||||||
262,959 | ASML Holding NV | 54,891,905 | ||||||||
Total Netherlands | 92,961,091 | |||||||||
SOUTH KOREA (1.9%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
26,376 | LG Household & Health Care, Ltd. | 32,175,830 | ||||||||
Total South Korea | 32,175,830 | |||||||||
SPAIN (2.3%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
736,389 | Industria de Diseno Textil SA | 22,282,125 | ||||||||
TECHNOLOGY | ||||||||||
198,378 | Amadeus IT Group SA | 15,760,873 | ||||||||
Total Spain | 38,042,998 |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
SWEDEN (1.0%) | ||||||||||
INDUSTRIALS | ||||||||||
293,824 | Hexagon AB (Class B) | $ | 16,006,625 | |||||||
Total Sweden | 16,006,625 | |||||||||
SWITZERLAND (15.2%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
600,142 | Cie Financiere Richemont SA | 43,841,393 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
677,758 | Alcon, Inc.1 | 38,985,286 | ||||||||
97,170 | Lonza Group AG1 | 29,982,409 | ||||||||
254,167 | Nestle SA | 24,455,559 | ||||||||
93,423,254 | ||||||||||
FINANCIALS | ||||||||||
3,330,163 | Credit Suisse Group AG1 | 44,497,001 | ||||||||
65,737 | Partners Group Holding AG | 49,474,071 | ||||||||
93,971,072 | ||||||||||
INDUSTRIALS | ||||||||||
34,139 | Kuehne + Nagel International AG | 4,963,206 | ||||||||
113,288 | Sika AG | 17,348,937 | ||||||||
22,312,143 | ||||||||||
Total Switzerland | 253,547,862 | |||||||||
THAILAND (1.0%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
6,578,000 | CP ALL PCL1 | 15,976,026 | ||||||||
Total Thailand | 15,976,026 | |||||||||
UNITED KINGDOM (9.3%) | ||||||||||
CONSUMER CYCLICAL | ||||||||||
1,103,288 | Compass Group, Plc. | 25,055,035 | ||||||||
CONSUMER NON-CYCLICAL | ||||||||||
702,742 | RELX, Plc. | 16,097,761 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 7 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Shares/ Units | Value | |||||||||
COMMON STOCK (continued) | ||||||||||
UNITED KINGDOM (continued) | ||||||||||
FINANCIALS | ||||||||||
24,898,151 | Melrose Industries, Plc. | $ | 65,937,138 | |||||||
2,149,768 | Prudential, Plc. | 48,672,895 | ||||||||
114,610,033 | ||||||||||
Total United Kingdom | 155,762,829 | |||||||||
UNITED STATES (3.2%) | ||||||||||
CONSUMER NON-CYCLICAL | ||||||||||
459,027 | Worldpay, Inc. (Class A)1 | 53,802,555 | ||||||||
Total United States | 53,802,555 | |||||||||
Total Common Stock (Identified cost $1,201,106,711) | 1,398,319,161 | |||||||||
REGISTERED INVESTMENT COMPANIES (13.7%) | ||||||||||
228,650,000 | Morgan Stanley Institutional Liquidity Funds – Treasury Securities Portfolio, Institutional Share Class | 228,650,000 | ||||||||
Total Registered Investment Companies (Identified cost $228,650,000) | 228,650,000 |
TOTAL INVESTMENTS (Identified cost $1,429,756,711)2 | 97.5 | % | $ | 1,626,969,161 | ||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.5 | % | 40,963,789 | |||||||
NET ASSETS | 100.0 | % | $ | 1,667,932,950 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $1,429,756,711, the aggregate gross unrealized appreciation is $238,707,028 and the aggregate gross unrealized depreciation is $41,494,578, resulting in net unrealized appreciation of $197,212,450. |
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 | 9 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
The accompanying notes are an integral part of these financial statements.
BBH PARTNER FUND – INTERNATIONAL EQUITY
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 | ||||||||||||||
Common Stock: | ||||||||||||||||||
Bermuda | $ | 18,253,515 | $ | — | $ | — | $ | 18,253,515 | ||||||||||
Brazil | 8,623,180 | — | — | 8,623,180 | ||||||||||||||
Canada | 69,283,418 | — | — | 69,283,418 | ||||||||||||||
Cayman Islands | 51,348,455 | 38,417,713 | — | 89,766,168 | ||||||||||||||
France | — | 135,610,292 | — | 135,610,292 | ||||||||||||||
Germany | — | 136,381,484 | — | 136,381,484 | ||||||||||||||
Hong Kong | — | 45,677,990 | — | 45,677,990 | ||||||||||||||
Ireland | 17,316,568 | 38,491,547 | — | 55,808,115 | ||||||||||||||
Japan | — | 115,212,518 | — | 115,212,518 | ||||||||||||||
Jersey | — | 31,451,024 | — | 31,451,024 | ||||||||||||||
Luxembourg | 15,730,312 | — | — | 15,730,312 | ||||||||||||||
Mexico | 18,245,329 | — | — | 18,245,329 | ||||||||||||||
Netherlands | — | 92,961,091 | — | 92,961,091 | ||||||||||||||
South Korea | — | 32,175,830 | — | 32,175,830 | ||||||||||||||
Spain | — | 38,042,998 | — | 38,042,998 | ||||||||||||||
Sweden | — | 16,006,625 | — | 16,006,625 | ||||||||||||||
Switzerland | — | 253,547,862 | — | 253,547,862 | ||||||||||||||
Thailand | — | 15,976,026 | — | 15,976,026 | ||||||||||||||
United Kingdom | — | 155,762,829 | — | 155,762,829 | ||||||||||||||
United States | 53,802,555 | — | — | 53,802,555 | ||||||||||||||
Registered Investment Companies: | ||||||||||||||||||
United States | 228,650,000 | — | — | 228,650,000 | ||||||||||||||
Investments, at value | $ | 481,253,332 | $ | 1,145,715,829 | $ | — | $ | 1,626,969,161 |
* | 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, 2019. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 11 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2019 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $1,429,756,711) | $ | 1,626,969,161 | ||||
Cash | 26,295,525 | |||||
Foreign currency at value (Identified cost $1,694,894) | 1,694,894 | |||||
Receivables for: | ||||||
Investments sold | 10,626,117 | |||||
Dividends | 7,170,425 | |||||
Shares sold | 967,991 | |||||
Interest | 50,789 | |||||
Prepaid assets | 2,221 | |||||
Total Assets | 1,673,777,123 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 3,402,275 | |||||
Investment advisory and administrative fees | 1,744,681 | |||||
Shares redeemed | 554,307 | |||||
Custody and fund accounting fees | 60,087 | |||||
Professional fees | 48,295 | |||||
Transfer agent fees | 5,467 | |||||
Board of Trustees’ fees | 1,656 | |||||
Accrued expenses and other liabilities | 27,405 | |||||
Total Liabilities | 5,844,173 | |||||
NET ASSETS | $ | 1,667,932,950 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 1,479,836,653 | ||||
Retained earnings | 188,096,297 | |||||
Net Assets | $ | 1,667,932,950 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS I SHARES | ||||||
($1,667,932,950 ÷ 105,351,976 shares outstanding) | $15.83 |
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, 2019 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Dividends (net of foreign withholding taxes of $891,765) | $ | 9,776,599 | ||||
Interest income | 107,937 | |||||
Total Income | 9,884,536 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 4,848,233 | |||||
Custody and fund accounting fees | 210,510 | |||||
Professional fees | 38,658 | |||||
Board of Trustees’ fees | 23,906 | |||||
Transfer agent fees | 17,604 | |||||
Miscellaneous expenses | 60,436 | |||||
Total Expenses | 5,199,347 | |||||
Expense offset arrangement | (218,989 | ) | ||||
Net Expenses | 4,980,358 | |||||
Net Investment Income | 4,904,178 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized loss on investments in securities | (11,672,115 | ) | ||||
Net realized loss on foreign exchange transactions and translations | (618,090 | ) | ||||
Net realized loss on investments in securities and foreign exchange transactions and translations | (12,290,205 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 215,125,669 | |||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations | (38,605 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 215,087,064 | |||||
Net Realized and Unrealized Gain | 202,796,859 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 207,701,037 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 13 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2019 (unaudited) | For the year ended October 31, 2018 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 4,904,178 | $ | 17,478,403 | ||||||
Net realized gain (loss) on investments in securities and foreign exchange transactions and translations | (12,290,205 | ) | 88,696,896 | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations | 215,087,064 | (176,118,593 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 207,701,037 | (69,943,294 | ) | |||||||
Dividends and distributions declared: | ||||||||||
Class I | (105,213,063 | ) | (102,915,403 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 145,996,795 | 324,005,397 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 4,408,555 | 4,374,243 | ||||||||
Cost of shares redeemed | (90,693,719 | ) | (75,329,408 | ) | ||||||
Net increase in net assets resulting from share transactions | 59,711,631 | 253,050,232 | ||||||||
Total increase in net assets | 162,199,605 | 80,191,535 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 1,505,733,345 | 1,425,541,810 | ||||||||
End of period | $ | 1,667,932,950 | $ | 1,505,733,345 |
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 years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017* | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.90 | $ | 16.75 | $ | 14.46 | $ | 14.54 | $ | 15.16 | $ | 15.43 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.05 | 0.18 | 0.14 | 0.34 | 0.26 | 0.40 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 1.92 | (0.83 | ) | 2.47 | (0.14 | ) | (0.49 | ) | (0.38 | ) | |||||||||||||||||
Total income (loss) from investment operations | 1.97 | (0.65 | ) | 2.61 | 0.20 | (0.23 | ) | 0.02 | |||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.16 | ) | (0.10 | ) | (0.32 | ) | (0.28 | ) | (0.39 | ) | (0.29 | ) | |||||||||||||||
From net realized gains | (0.88 | ) | (1.10 | ) | — | — | — | — | |||||||||||||||||||
Total dividends and distributions | (1.04 | ) | (1.20 | ) | (0.32 | ) | (0.28 | ) | (0.39 | ) | (0.29 | ) | |||||||||||||||
Short-term redemption fees1 | — | — | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | — | ||||||||||||||||||
Net asset value, end of period | $ | 15.83 | $ | 14.90 | $ | 16.75 | $ | 14.46 | $ | 14.54 | $ | 15.16 | |||||||||||||||
Total return | 14.60 | %3 | (4.12 | )% | 18.51 | % | 1.51 | % | (1.42 | )% | 0.21 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 1,668 | $ | 1,506 | $ | 1,426 | $ | 914 | $ | 68 | $ | 86 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 0.70 | %4 | 0.68 | % | 0.74 | % | 0.85 | % | 0.89 | % | 0.90 | % | |||||||||||||||
Expense offset arrangement | 0.03 | %4 | 0.03 | % | 0.01 | % | 0.00 | %5 | 0.00 | %5 | 0.00 | %5 | |||||||||||||||
Ratio of expenses to average net assets after reductions | 0.67 | %4 | 0.65 | % | 0.73 | % | 0.85 | % | 0.89 | % | 0.90 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.66 | %4 | 1.15 | % | 0.91 | % | 2.41 | % | 1.77 | % | 2.62 | % | |||||||||||||||
Portfolio turnover rate | 63 | %3 | 124 | % | 130 | % | 12 | % | 18 | % | 15 | % |
* | 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, 2019 | 15 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS
April 30, 2019 (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, 2019, there were seven 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, 2019 (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 on a net assets basis. 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, 2019, 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 currency translations within the Statement of Operations. Net unrealized appreciation or |
financial statements april 30, 2019 | 17 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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, 2019 (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 from net investment income to shareholders, if any, are paid annually 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 and distributions in the amount of $105,213,063 to Class I shares during the six months ended April 30, 2019. 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 | ||||||||||||||||||||
2018: | $ | 17,240,637 | $ | 85,674,766 | $ | 102,915,403 | $ | — | $ | 102,915,403 | ||||||||||||||
2017: | 21,576,444 | — | 21,576,444 | — | 21,576,444 |
Components of retained earnings/(accumulated deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Retained earnings/ (accumulated deficit) | Accumulated capital and other losses | Other book/tax temporary differences | Book unrealized appreciation/ (depreciation) | Total retained earnings/ (accumulated deficit) | ||||||||||||||||||||||||||
2018: | $ | 52,353,382 | $ | 52,846,121 | $ | 105,199,503 | $ | — | $ | (1,602,445 | ) | $ | (17,988,735 | ) | $ | 85,608,323 | ||||||||||||||||
2017: | 17,227,537 | 85,667,346 | 102,894,883 | — | (100,912 | ) | 158,129,858 | 260,923,829 |
financial statements april 30, 2019 | 19 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 billion of average daily net assets and 0.60% per annum on all average daily net assets over $3 billion. The Investment Adviser pays its Sub-adviser a percentage from its investment advisory and administrative fees. For the six months ended April 30, 2019, the Fund incurred $4,848,233 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, 2019, the Fund incurred $210,510 in custody and fund accounting fees. These fees for the Fund were reduced by $218,989 as a result of an expense offset arrangement with the Fund’s custodian, which expired on December 31, 2018. |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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, 2019, the Fund incurred $23,906 in independent Trustee compensation and expense reimbursements. |
D. | Officers of the Trust. Officers of the Trust are also employees of BBH. Officers are paid no fees by the Trust for their services to the Trust. |
4. | Investment Transactions. For the six months ended April 30, 2019, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $931,865,497 and $979,861,064, 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. Transactions in Class I shares were as follows: |
For the six months ended April 30, 2019 (unaudited) | For the year ended October 31, 2018 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class I | |||||||||||||||||||
Shares sold | 10,305,609 | $ | 145,996,795 | 20,426,475 | $ | 324,005,397 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 332,220 | 4,408,555 | 283,237 | 4,374,243 | |||||||||||||||
Shares redeemed | (6,363,286 | ) | (90,693,719 | ) | (4,744,185 | ) | (75,329,408 | ) | |||||||||||
Net increase | 4,274,543 | $ | 59,711,631 | 15,965,527 | $ | 253,050,232 |
financial statements april 30, 2019 | 21 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 PARTNER FUND – INTERNATIONAL EQUITY
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Recent Pronouncements. |
A. | ASU 2018-13. On August 28, 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework —Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”). ASU 2018-13 modifies the disclosure objective paragraphs of Accounting Standards Codification 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. ASU 2018-13 also eliminates and modifies other requirements under ASU 2018-13. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted and Management is currently evaluating the application of ASU 2018-13 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, 2019 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, 2019 | 23 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF FUND EXPENSES
April 30, 2019 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2019 (unaudited)
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,146 | $ | 3.57 | ||||||||
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, 2019 | 25 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION
April 30, 2019 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
funds and performance compared to the relevant performance of comparative funds; (e) the sharing of potential economies of scale; (f) fall-out benefits to the Investment Adviser as a result of its relationship with the Fund; and (g) other factors deemed relevant by the Board. The following is a summary of the factors the Board considered in making its determination to approve the continuance of the Agreements. No single factor reviewed by the Board was identified as the principal factor in determining whether to approve the Advisory 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 and Select Equity Group were reasonable based on the comparative performance, expense information, the cost of the services provided, and the profits realized by the Investment Adviser.
financial statements april 30, 2019 | 27 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 29 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST
April 30, 2019 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2019 (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, 2019 | 31 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 33 |
BBH PARTNER FUND – INTERNATIONAL EQUITY
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
represents only a good faith approximation of the value of a security. The fair value of one or more 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 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 |
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other Fund communications electronically from the Fund by calling 1-800-575-1265 or from your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund by calling 1-800-575-1265 or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper may apply to all funds in the fund complex or held with your financial intermediary.
BBH LIMITED DURATION FUND
PORTFOLIO ALLOCATION
April 30, 2019 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Asset Backed Securities | $ | 2,825,420,084 | 45.9 | % | ||||||
Commercial Mortgage Backed Securities | 321,301,179 | 5.2 | ||||||||
Corporate Bonds | 1,504,325,762 | 24.4 | ||||||||
Loan Participations and Assignments | 705,030,526 | 11.4 | ||||||||
Municipal Bonds | 117,509,537 | 1.9 | ||||||||
Residential Mortgage Backed Securities | 32,625,704 | 0.5 | ||||||||
U.S. Government Agency Obligations | 148,357,501 | 2.4 | ||||||||
U.S. Treasury Bills | 487,412,116 | 7.9 | ||||||||
Cash and Other Assets in Excess of Liabilities | 25,766,211 | 0.4 | ||||||||
NET ASSETS | $ | 6,167,748,620 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (45.9%) | ||||||||||||||||||
$ 18,934,533 | AIM Aviation Finance, Ltd. 2015-1A1 | 02/15/40 | 4.213 | % | $ | 18,955,761 | ||||||||||||
7,917,698 | Ally Auto Receivables Trust 2018-1 | 09/15/20 | 2.140 | 7,911,341 | ||||||||||||||
48,170,000 | American Express Credit Account Master Trust 2018-1 | 10/17/22 | 2.670 | 48,205,130 | ||||||||||||||
7,390,999 | AmeriCredit Automobile Receivables Trust 2017-4 | 05/18/21 | 1.830 | 7,381,404 | ||||||||||||||
4,516,875 | ARI Fleet Lease Trust 2017-A1 | 04/15/26 | 1.910 | 4,497,719 | ||||||||||||||
3,044,225 | AXIS Equipment Finance Receivables IV LLC 2016-1A1 | 11/20/21 | 2.210 | 3,038,682 | ||||||||||||||
22,129,767 | AXIS Equipment Finance Receivables IV LLC 2018-1A1 | 12/20/23 | 3.240 | 22,172,305 | ||||||||||||||
20,580,000 | AXIS Equipment Finance Receivables VI LLC 2018-2A1 | 07/20/22 | 3.890 | 20,776,430 | ||||||||||||||
1,782,616 | BCC Funding XIII LLC 2016-11 | 12/20/21 | 2.200 | 1,780,456 | ||||||||||||||
27,108,430 | Business Jet Securities LLC 2018-11 | 02/15/33 | 4.335 | 27,313,305 | ||||||||||||||
45,023,269 | Business Jet Securities LLC 2018-21 | 06/15/33 | 4.447 | 45,497,688 | ||||||||||||||
13,739,417 | Canadian Pacer Auto Receivables Trust 2018-1A1 | 08/19/20 | 2.700 | 13,736,996 | ||||||||||||||
14,212,443 | Capital Auto Receivables Asset Trust 2018-11 | 10/20/20 | 2.540 | 14,207,625 | ||||||||||||||
24,509,800 | Capital Automotive REIT LLC 2017-1A1 | 04/15/47 | 3.870 | 24,603,491 | ||||||||||||||
9,873,945 | CarMax Auto Owner Trust 2018-1 | 05/17/21 | 2.230 | 9,859,847 | ||||||||||||||
30,657,066 | CarMax Auto Owner Trust 2018-2 | 08/16/21 | 2.730 | 30,672,848 | ||||||||||||||
994,967 | Cazenovia Creek Funding I LLC 2015-1A1 | 12/10/23 | 2.000 | 991,858 | ||||||||||||||
47,959,361 | Cazenovia Creek Funding II LLC 2018-1A1 | 07/15/30 | 3.561 | 47,882,233 | ||||||||||||||
13,979,571 | CCG Receivables Trust 2017-11 | 11/14/23 | 1.840 | 13,914,837 | ||||||||||||||
8,766,448 | CCG Receivables Trust 2018-11 | 06/16/25 | 2.500 | 8,749,929 | ||||||||||||||
15,781,669 | Chesapeake Funding II LLC 2017-2A1 | 05/15/29 | 1.990 | 15,669,955 | ||||||||||||||
17,512,136 | Chesapeake Funding II LLC 2017-4A1 | 11/15/29 | 2.120 | 17,354,576 | ||||||||||||||
27,045,263 | Chesapeake Funding II LLC 2018-1A1 | 04/15/30 | 3.040 | 27,146,363 | ||||||||||||||
38,570,000 | Chesapeake Funding II LLC 2019-1A1 | 04/15/31 | 2.950 | 38,587,137 | ||||||||||||||
19,215,360 | Chesterfield Financial Holdings LLC 2014-1A1 | 12/15/34 | 4.500 | 19,170,917 | ||||||||||||||
25,386,840 | CIG Auto Receivables Trust 2019-1A1 | 08/15/24 | 3.330 | 25,445,745 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 3 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 11,872,149 | Credit Acceptance Auto Loan Trust 2017-1A1 | 10/15/25 | 2.560 | % | $ | 11,856,892 | ||||||||||||
50,700,000 | Credit Acceptance Auto Loan Trust 2017-2A1 | 02/17/26 | 2.550 | 50,582,564 | ||||||||||||||
25,550,000 | Credit Acceptance Auto Loan Trust 2017-3A1 | 06/15/26 | 2.650 | 25,496,884 | ||||||||||||||
37,120,000 | Daimler Trucks Retail Trust 2018-11 | 07/15/21 | 2.850 | 37,141,325 | ||||||||||||||
57,920,000 | Delamare Cards MTN Issuer, Plc. 2018-1A (1-Month USD-LIBOR + 0.700%)1,2 | 11/19/25 | 3.187 | 57,751,435 | ||||||||||||||
14,341,028 | DLL LLC 2018-11 | 11/17/20 | 2.810 | 14,345,631 | ||||||||||||||
4,247,097 | DLL Securitization Trust 2017-A1 | 07/15/20 | 1.890 | 4,241,813 | ||||||||||||||
10,671,272 | Eagle I, Ltd. 2014-1A1 | 12/15/39 | 4.310 | 10,743,420 | ||||||||||||||
16,164,600 | ECAF I, Ltd. 2015-1A1 | 06/15/40 | 3.473 | 16,093,783 | ||||||||||||||
14,514,439 | Elm Trust 2016-1A1 | 06/20/25 | 4.163 | 14,519,306 | ||||||||||||||
23,340,000 | Elm Trust 2018-2A1 | 10/20/27 | 4.605 | 23,630,847 | ||||||||||||||
7,692,637 | Engs Commercial Finance Trust 2018-1A1 | 02/22/21 | 2.970 | 7,694,883 | ||||||||||||||
2,547,048 | Enterprise Fleet Financing LLC 2016-21 | 02/22/22 | 1.740 | 2,542,220 | ||||||||||||||
6,698,792 | Enterprise Fleet Financing LLC 2017-11 | 07/20/22 | 2.130 | 6,679,987 | ||||||||||||||
11,169,065 | Enterprise Fleet Financing LLC 2017-21 | 01/20/23 | 1.970 | 11,127,688 | ||||||||||||||
16,440,890 | Enterprise Fleet Financing LLC 2017-31 | 05/22/23 | 2.130 | 16,360,680 | ||||||||||||||
21,175,660 | Enterprise Fleet Financing LLC 2018-11 | 10/20/23 | 2.870 | 21,191,177 | ||||||||||||||
25,000,000 | Enterprise Fleet Financing LLC 2019-11 | 10/22/24 | 2.980 | 25,097,015 | ||||||||||||||
12,633,515 | Exeter Automobile Receivables Trust 2018-3A1 | 01/18/22 | 2.900 | 12,639,861 | ||||||||||||||
19,667,533 | Finance of America Structured Securities Trust 2018-HB11,2,3 | 09/25/28 | 3.375 | 19,639,998 | ||||||||||||||
14,500,000 | Ford Credit Auto Owner Trust 2014-21 | 04/15/26 | 2.310 | 14,466,911 | ||||||||||||||
44,320,000 | Ford Credit Floorplan Master Owner Trust A 2017-2 | 09/15/22 | 2.160 | 43,988,655 | ||||||||||||||
1,699,275 | Foursight Capital Automobile Receivables Trust 2015-11 | 01/15/21 | 2.340 | 1,697,072 | ||||||||||||||
5,993,680 | Foursight Capital Automobile Receivables Trust 2017-11 | 04/15/22 | 2.370 | 5,976,027 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 15,567,484 | Foursight Capital Automobile Receivables Trust 2018-21 | 04/15/22 | 3.320 | % | $ | 15,622,599 | ||||||||||||
13,685,531 | FREED ABS Trust 2018-11 | 07/18/24 | 3.610 | 13,713,233 | ||||||||||||||
8,148,836 | FREED ABS Trust 2018-21 | 10/20/25 | 3.990 | 8,202,261 | ||||||||||||||
9,516,231 | GM Financial Consumer Automobile 2017-1A1 | 10/18/21 | 1.780 | 9,472,334 | ||||||||||||||
12,673,241 | GM Financial Consumer Automobile Receivables Trust 2018-2 | 05/17/21 | 2.550 | 12,664,220 | ||||||||||||||
32,520,000 | GMF Floorplan Owner Revolving Trust 2017-21 | 07/15/22 | 2.130 | 32,269,551 | ||||||||||||||
6,105,513 | GreatAmerica Leasing Receivables Funding LLC 2018-11 | 05/15/20 | 2.350 | 6,096,344 | ||||||||||||||
24,690,000 | Hercules Capital Funding Trust 2018-1A1 | 11/22/27 | 4.605 | 25,205,779 | ||||||||||||||
15,782,649 | Hertz Fleet Lease Funding LP 2017-11 | 04/10/31 | 2.130 | 15,733,665 | ||||||||||||||
36,700,000 | Hertz Vehicle Financing II LP 2019-1A1 | 03/25/23 | 3.710 | 37,177,874 | ||||||||||||||
19,930,000 | Hertz Vehicle Financing LLC 2018-2A1 | 06/27/22 | 3.650 | 20,116,872 | ||||||||||||||
21,838,857 | Honda Auto Receivables Owner Trust 2018-1 | 06/15/20 | 2.360 | 21,825,821 | ||||||||||||||
20,712,969 | Hyundai Auto Receivables Trust 2018-A | 04/15/21 | 2.550 | 20,707,931 | ||||||||||||||
5,524,353 | John Deere Owner Trust 2018-A | 10/15/20 | 2.420 | 5,520,198 | ||||||||||||||
38,860,000 | Lendmark Funding Trust 2017-1A1 | 12/22/25 | 2.830 | 38,569,055 | ||||||||||||||
18,340,000 | Lendmark Funding Trust 2017-2A1 | 05/20/26 | 2.800 | 18,236,817 | ||||||||||||||
14,220,000 | Lendmark Funding Trust 2018-1A1 | 12/21/26 | 3.810 | 14,398,369 | ||||||||||||||
15,206,058 | Mariner Finance Issuance Trust 2017-AA1 | 02/20/29 | 3.620 | 15,230,931 | ||||||||||||||
55,510,000 | Mariner Finance Issuance Trust 2017-BA1 | 12/20/29 | 2.920 | 55,276,114 | ||||||||||||||
29,605,000 | Mariner Finance Issuance Trust 2018-AA1 | 11/20/30 | 4.200 | 30,132,333 | ||||||||||||||
15,225,672 | MCA Fund II Holding LLC 2017-1 (3-Month USD-LIBOR + 1.650%)1,2 | 08/15/28 | 4.334 | 15,240,745 | ||||||||||||||
20,450,000 | MelTel Land Funding LLC 2019-1A1 | 04/15/49 | 3.768 | 20,467,286 | ||||||||||||||
8,156,353 | MMAF Equipment Finance LLC 2017-B1 | 10/15/20 | 1.930 | 8,145,773 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 5 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 14,745,375 | Motor, Plc. 2017-1A (1-Month USD-LIBOR + 0.530%)1,2 | 09/25/24 | 3.007 | % | $ | 14,728,595 | ||||||||||||
4,858,182 | Nationstar HECM Loan Trust 2017-2A1,2,3 | 09/25/27 | 2.038 | 4,813,001 | ||||||||||||||
12,244,355 | Nationstar HECM Loan Trust 2018-1A1,2,3 | 02/25/28 | 2.760 | 12,207,452 | ||||||||||||||
10,373,224 | Nationstar HECM Loan Trust 2018-2A1,2,3 | 07/25/28 | 3.188 | 10,386,398 | ||||||||||||||
19,815,000 | Nationstar HECM Loan Trust 2018-3A1,2,3 | 11/25/28 | 3.903 | 20,064,356 | ||||||||||||||
1,311,511 | Navitas Equipment Receivables LLC 2016-11 | 06/15/21 | 2.200 | 1,310,620 | ||||||||||||||
9,345,966 | New Mexico Educational Assistance Foundation 2013-1 (1-Month USD-LIBOR + 0.700%)2 | 01/02/25 | 3.202 | 9,347,461 | ||||||||||||||
11,445,874 | Newtek Small Business Loan Trust 2016-1A (1-Month USD-LIBOR + 3.000%)1,2 | 02/25/42 | 5.477 | 11,620,654 | ||||||||||||||
22,200,000 | NextGear Floorplan Master Owner Trust 2016-2A1 | 09/15/21 | 2.190 | 22,143,625 | ||||||||||||||
16,020,000 | NextGear Floorplan Master Owner Trust 2017-2A1 | 10/17/22 | 2.560 | 15,950,657 | ||||||||||||||
21,040,000 | NextGear Floorplan Master Owner Trust 2018-2A1 | 10/15/23 | 3.690 | 21,412,713 | ||||||||||||||
21,800,000 | NextGear Floorplan Master Owner Trust 2019-1A1 | 02/15/24 | 3.210 | 21,974,646 | ||||||||||||||
20,684,628 | Nissan Auto Receivables Owner Trust 2018-A | 12/15/20 | 2.390 | 20,670,570 | ||||||||||||||
38,465,000 | OnDeck Asset Securitization Trust LLC 2018-1A1 | 04/18/22 | 3.500 | 38,597,266 | ||||||||||||||
26,190,000 | OneMain Financial Issuance Trust 2015-1A1 | 03/18/26 | 3.850 | 26,245,842 | ||||||||||||||
25,020,000 | OneMain Financial Issuance Trust 2019-1A1 | 02/14/31 | 3.480 | 25,244,232 | ||||||||||||||
24,865,000 | Oportun Funding X LLC 2018-C1 | 10/08/24 | 4.100 | 25,192,599 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 44,890,000 | Oportun Funding XII LLC 2018-D1 | 12/09/24 | 4.150 | % | $ | 45,598,912 | ||||||||||||
7,878,909 | OSCAR US Funding Trust VII LLC 2017-2A1 | 11/10/20 | 2.130 | 7,864,624 | ||||||||||||||
14,421,605 | OSCAR US Funding Trust VIII LLC 2018-1A1 | 04/12/21 | 2.910 | 14,411,856 | ||||||||||||||
10,094,700 | OSCAR US Funding Trust IX LLC 2018-2A1 | 08/10/21 | 3.150 | 10,098,041 | ||||||||||||||
18,920,000 | OSCAR US Funding Trust IX LLC 2018-2A1 | 09/12/22 | 3.390 | 19,046,859 | ||||||||||||||
45,250,000 | OSCAR US Funding Trust X LLC 2019-1A1 | 04/11/22 | 3.100 | 45,451,770 | ||||||||||||||
8,896,531 | Oxford Finance Funding LLC 2016-1A1 | 06/17/24 | 3.968 | 8,936,800 | ||||||||||||||
26,450,000 | PFS Financing Corp. 2017-BA1 | 07/15/22 | 2.220 | 26,227,042 | ||||||||||||||
34,310,000 | PFS Financing Corp. 2017-D1 | 10/17/22 | 2.400 | 34,113,050 | ||||||||||||||
21,680,000 | PFS Financing Corp. 2018-B1 | 02/15/23 | 2.890 | 21,696,457 | ||||||||||||||
18,200,000 | PFS Financing Corp. 2019-A1 | 04/15/24 | 2.860 | 18,199,536 | ||||||||||||||
17,940,000 | Regional Management Issuance Trust 2018-11 | 07/15/27 | 3.830 | 17,907,245 | ||||||||||||||
41,500,000 | Regional Management Issuance Trust 2018-21 | 01/18/28 | 4.560 | 42,099,870 | ||||||||||||||
20,824,539 | RMF Buyout Issuance Trust 2018-11,2,3 | 11/25/28 | 3.436 | 20,842,656 | ||||||||||||||
1,201,021 | Santander Drive Auto Receivables Trust 2015-3 | 01/15/21 | 2.740 | 1,201,021 | ||||||||||||||
8,885,000 | Santander Drive Auto Receivables Trust 2018-2 | 09/15/21 | 2.750 | 8,885,187 | ||||||||||||||
30,733,000 | SCF Equipment Leasing LLC 2019-1A1 | 03/20/23 | 3.040 | 30,760,174 | ||||||||||||||
14,107,420 | Securitized Term Auto Receivables Trust 2018-1A1 | 12/29/20 | 2.807 | 14,110,552 | ||||||||||||||
14,353,205 | Shenton Aircraft Investment I, Ltd. 2015-1A1 | 10/15/42 | 4.750 | 14,519,612 | ||||||||||||||
33,095,816 | Spirit Master Funding LLC 2014-4A1 | 01/20/45 | 3.501 | 32,996,062 | ||||||||||||||
41,299,624 | Spirit Master Funding LLC 2017-1A1 | 12/20/47 | 4.360 | 42,113,185 | ||||||||||||||
34,770,000 | SPS Servicer Advance Receivables Trust Advance Receivables Backed Notes 2016-T21 | 11/15/49 | 2.750 | 34,704,573 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 7 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 51,733,633 | Stack Infrastructure Issuer LLC 2019-1A1 | 02/25/44 | 4.540 | % | $ | 52,857,184 | ||||||||||||
19,484,972 | STORE Master Funding LLC 2013-3A1 | 11/20/43 | 4.240 | 19,461,123 | ||||||||||||||
30,805,000 | SWC Funding LLC 2018-1A1,4 | 08/15/33 | 4.750 | 31,205,342 | ||||||||||||||
13,232,500 | TAL Advantage V LLC 2014-3A1 | 11/21/39 | 3.270 | 13,162,077 | ||||||||||||||
3,064,142 | Tax Ease Funding LLC 2016-1A1 | 06/15/28 | 3.131 | 3,044,798 | ||||||||||||||
22,642,651 | Textainer Marine Containers V, Ltd. 2017-1A1 | 05/20/42 | 3.720 | 22,613,877 | ||||||||||||||
31,268,174 | Textainer Marine Containers V, Ltd. 2017-2A1 | 06/20/42 | 3.520 | 30,885,254 | ||||||||||||||
4,587,269 | TLF National Tax Lien Trust 2017-1A1 | 12/15/29 | 3.090 | 4,554,463 | ||||||||||||||
61,740,000 | Trafigura Securitisation Finance, Plc. 2017-1A1 | 12/15/20 | 2.470 | 61,065,614 | ||||||||||||||
27,390,000 | Trafigura Securitisation Finance, Plc. 2018-1A1 | 03/15/22 | 3.730 | 27,632,785 | ||||||||||||||
47,138,342 | Triton Container Finance IV LLC 2017-2A1 | 08/20/42 | 3.620 | 46,945,641 | ||||||||||||||
1,540,167 | Utah State Board of Regents 2011-1 (3-Month USD-LIBOR + 0.850%)2 | 05/01/29 | 3.586 | 1,544,864 | ||||||||||||||
3,218,133 | Veros Automobile Receivables Trust 2017-11 | 04/17/23 | 2.840 | 3,214,074 | ||||||||||||||
9,704,404 | Veros Automobile Receivables Trust 2018-11 | 05/15/23 | 3.630 | 9,722,839 | ||||||||||||||
12,239,515 | Westlake Automobile Receivables Trust 2018-1A1 | 12/15/20 | 2.240 | 12,228,769 | ||||||||||||||
29,000,000 | Westlake Automobile Receivables Trust 2019-1A1 | 05/16/22 | 3.060 | 29,062,904 | ||||||||||||||
64,480,000 | World Financial Network Credit Card Master Trust 2017-A | 03/15/24 | 2.120 | 64,132,337 | ||||||||||||||
10,310,000 | World Financial Network Credit Card Master Trust 2017-B | 06/15/23 | 1.980 | 10,288,331 | ||||||||||||||
50,885,000 | World Financial Network Credit Card Master Trust 2018-A | 12/16/24 | 3.070 | 51,217,223 | ||||||||||||||
11,449,942 | World Omni Auto Receivables Trust 2018-A | 05/17/21 | 2.190 | 11,435,524 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 19,304,327 | World Omni Auto Receivables Trust 2018-B | 07/15/21 | 2.570 | % | $ | 19,300,408 | ||||||||||||
24,570,000 | World Omni Select Auto Trust 2018-1A1 | 04/15/22 | 3.240 | 24,640,575 | ||||||||||||||
30,450,000 | WRG Debt Funding II LLC 2017-11 | 03/15/26 | 4.458 | 30,451,550 | ||||||||||||||
Total Asset Backed Securities (Identified cost $2,819,850,809) | 2,825,420,084 | |||||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (5.2%) | ||||||||||||||||||
15,540,000 | Aventura Mall Trust 2013-AVM1,2,3 | 12/05/32 | 3.743 | 15,728,729 | ||||||||||||||
26,807,000 | BB-UBS Trust 2012-TFT1,2,3 | 06/05/30 | 3.468 | 26,374,072 | ||||||||||||||
35,138,189 | BX Commercial Mortgage Trust 2018-IND (1-Month USD-LIBOR + 0.750%)1,2 | 11/15/35 | 3.223 | 35,127,166 | ||||||||||||||
30,910,000 | BXMT, Ltd. 2017-FL1 (1-Month USD-LIBOR + 0.870%)1,2 | 06/15/35 | 3.350 | 30,937,569 | ||||||||||||||
31,329,000 | CG-CCRE Commercial Mortgage Trust 2014-FL2 (1-Month USD-LIBOR + 2.900%)1,2 | 11/15/31 | 5.050 | 31,240,148 | ||||||||||||||
3,683,547 | Commercial Mortgage Pass Through Certificates 2013-GAM1 | 02/10/28 | 1.705 | 3,637,511 | ||||||||||||||
9,690,000 | Commercial Mortgage Pass Through Certificates 2013-GAM1,2,3 | 02/10/28 | 3.417 | 9,543,762 | ||||||||||||||
22,660,000 | Commercial Mortgage Pass Through Certificates 2014-TWC (1-Month USD-LIBOR + 0.850%)1,2 | 02/13/32 | 3.323 | 22,660,023 | ||||||||||||||
29,435,000 | Hospitality Mortgage Trust 2017-HIT (1-Month USD-LIBOR + 0.850%)1,2 | 05/08/30 | 3.324 | 29,416,423 | ||||||||||||||
10,100,000 | KREF, Ltd. 2018-FL1A (1-Month USD-LIBOR + 1.100%)1,2 | 06/15/36 | 3.573 | 10,103,030 | ||||||||||||||
32,615,000 | Morgan Stanley Capital I Trust 2017-CLS (1-Month USD-LIBOR + 0.700%)1,2 | 11/15/34 | 3.173 | 32,584,342 | ||||||||||||||
20,545,953 | RETL 2019-RVP (1-Month USD-LIBOR + 1.150%)1,2 | 03/15/36 | 3.623 | 20,584,404 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 9 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (continued) | ||||||||||||||||||
$ 53,364,000 | TPG Real Estate Finance Issuer, Ltd. 2018-FL2 (1-Month USD-LIBOR + 1.130%)1,2 | 11/15/37 | 3.603 | % | $ | 53,364,000 | ||||||||||||
Total Commercial Mortgage Backed Securities | ||||||||||||||||||
(Identified cost $321,738,140) | 321,301,179 | |||||||||||||||||
CORPORATE BONDS (24.4%) | ||||||||||||||||||
AEROSPACE/DEFENSE (0.4%) | ||||||||||||||||||
24,988,000 | BAE Systems Holdings, Inc.1 | 06/01/19 | 6.375 | 25,053,468 | ||||||||||||||
AGRICULTURE (0.7%) | ||||||||||||||||||
44,530,000 | Bunge, Ltd. Finance Corp. | 03/15/24 | 4.350 | 45,275,358 | ||||||||||||||
BANKS (10.5%) | ||||||||||||||||||
14,895,000 | ANZ New Zealand Int’l, Ltd., London Branch1 | 03/19/24 | 3.400 | 15,052,283 | ||||||||||||||
19,435,000 | ASB Bank, Ltd.1 | 06/14/23 | 3.750 | 19,871,765 | ||||||||||||||
33,065,000 | Australia & New Zealand Banking Group, Ltd. | 05/19/22 | 2.625 | 32,893,667 | ||||||||||||||
32,360,000 | Bank of America Corp. | 06/01/19 | 7.625 | 32,485,224 | ||||||||||||||
30,375,000 | Bank of New Zealand1 | 02/20/24 | 3.500 | 30,841,334 | ||||||||||||||
32,015,000 | BB&T Corp. | 12/06/23 | 3.750 | 33,159,225 | ||||||||||||||
34,620,000 | BNP Paribas SA (3-Month USD-LIBOR + 2.235%)1,2 | 01/10/25 | 4.705 | 36,269,068 | ||||||||||||||
4,975,000 | BNZ International Funding, Ltd., London Branch1 | 02/21/20 | 2.400 | 4,958,263 | ||||||||||||||
24,335,000 | BNZ International Funding, Ltd., London Branch1 | 03/02/21 | 2.750 | 24,246,441 | ||||||||||||||
14,660,000 | BNZ International Funding, Ltd., London Branch1 | 03/01/23 | 3.375 | 14,800,254 | ||||||||||||||
9,000,000 | Capital One NA | 09/13/19 | 1.850 | 8,970,887 | ||||||||||||||
26,250,000 | Commonwealth Bank of Australia1 | 10/15/19 | 5.000 | 26,539,116 | ||||||||||||||
17,940,000 | Commonwealth Bank of Australia1 | 09/06/21 | 2.000 | 17,600,677 | ||||||||||||||
20,130,000 | Fifth Third Bancorp | 01/25/24 | 3.650 | 20,696,605 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
BANKS (continued) | ||||||||||||||||||
$ 20,035,000 | JPMorgan Chase Bank NA (3-Month USD-LIBOR + 0.350%)2 | 04/26/21 | 3.086 | % | $ | 20,083,673 | ||||||||||||
23,710,000 | Lloyds Banking Group, Plc. | 03/12/24 | 3.900 | 24,170,406 | ||||||||||||||
13,760,000 | National Australia Bank, Ltd. | 09/20/21 | 3.375 | 13,922,451 | ||||||||||||||
15,800,000 | Santander Holdings USA, Inc. | 04/17/20 | 2.650 | 15,759,133 | ||||||||||||||
39,890,000 | Skandinaviska Enskilda Banken AB1 | 11/17/20 | 2.625 | 39,729,403 | ||||||||||||||
12,345,000 | Skandinaviska Enskilda Banken AB | 03/15/21 | 2.625 | 12,316,471 | ||||||||||||||
6,979,000 | Svenska Handelsbanken AB | 10/01/20 | 2.400 | 6,946,182 | ||||||||||||||
30,395,000 | Svenska Handelsbanken AB | 11/20/23 | 3.900 | 31,637,830 | ||||||||||||||
25,085,000 | Toronto-Dominion Bank | 04/07/21 | 2.125 | 24,849,138 | ||||||||||||||
30,005,000 | US Bank NA | 11/16/21 | 3.450 | 30,688,095 | ||||||||||||||
54,350,000 | Wells Fargo Bank NA | 01/15/21 | 2.600 | 54,235,619 | ||||||||||||||
7,395,000 | Wells Fargo Bank NA (3-Month USD-LIBOR + 0.490%)2 | 07/23/21 | 3.325 | 7,439,592 | ||||||||||||||
35,277,000 | Westpac Banking Corp. | 03/06/20 | 2.150 | 35,128,929 | ||||||||||||||
12,500,000 | Westpac Banking Corp. | 05/13/21 | 2.100 | 12,343,501 | ||||||||||||||
647,635,232 | ||||||||||||||||||
BEVERAGES (0.2%) | ||||||||||||||||||
13,050,000 | Anheuser-Busch InBev Worldwide, Inc. | 01/23/25 | 4.150 | 13,628,732 | ||||||||||||||
BIOTECHNOLOGY (0.8%) | ||||||||||||||||||
50,910,000 | Amgen, Inc. | 05/10/19 | 1.900 | 50,903,207 | ||||||||||||||
CHEMICALS (0.5%) | ||||||||||||||||||
12,880,000 | DowDuPont, Inc. | 11/15/20 | 3.766 | 13,084,729 | ||||||||||||||
17,435,000 | DowDuPont, Inc. | 11/15/23 | 4.205 | 18,275,502 | ||||||||||||||
31,360,231 | ||||||||||||||||||
COMMERCIAL SERVICES (0.5%) | ||||||||||||||||||
27,350,000 | United Rentals North America, Inc. | 07/15/23 | 4.625 | 27,794,438 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 11 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
COMPUTERS (0.4%) | ||||||||||||||||||
$ 6,790,000 | Dell International LLC / EMC Corp.1 | 06/15/21 | 4.420 | % | $ | 6,953,962 | ||||||||||||
17,250,000 | Dell International LLC / EMC Corp.1 | 06/15/23 | 5.450 | 18,404,015 | ||||||||||||||
25,357,977 | ||||||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (1.9%) | ||||||||||||||||||
29,972 | Ahold Lease Series 2001-A-1 Pass Through Trust | 01/02/20 | 7.820 | 30,805 | ||||||||||||||
3,750,000 | Alliance Data Systems Corp.1 | 11/01/21 | 5.875 | 3,829,688 | ||||||||||||||
16,078,000 | Alliance Data Systems Corp.1 | 08/01/22 | 5.375 | 16,319,170 | ||||||||||||||
18,120,000 | Capital One Financial Corp. | 01/29/24 | 3.900 | 18,610,336 | ||||||||||||||
21,335,000 | Credit Acceptance Corp. | 02/15/21 | 6.125 | 21,361,669 | ||||||||||||||
6,425,000 | Credit Acceptance Corp. | 03/15/23 | 7.375 | 6,657,906 | ||||||||||||||
2,785,000 | Credit Acceptance Corp.1 | 03/15/26 | 6.625 | 2,931,213 | ||||||||||||||
49,455,000 | Drawbridge Special Opportunities Fund1 | 08/01/21 | 5.000 | 49,643,249 | ||||||||||||||
119,384,036 | ||||||||||||||||||
ELECTRIC (0.7%) | ||||||||||||||||||
17,000,000 | Electricite de France SA1 | 10/13/20 | 2.350 | 16,908,718 | ||||||||||||||
8,080,000 | Mississippi Power Co. (3-Month USD-LIBOR + 0.650%)2 | 03/27/20 | 3.259 | 8,081,370 | ||||||||||||||
19,690,000 | Nevada Power Co. | 04/15/20 | 2.750 | 19,703,225 | ||||||||||||||
44,693,313 | ||||||||||||||||||
HEALTHCARE-SERVICES (0.0%) | ||||||||||||||||||
2,503,000 | Centene Corp. | 02/15/21 | 5.625 | 2,543,674 | ||||||||||||||
INSURANCE (2.0%) | ||||||||||||||||||
24,310,000 | Athene Global Funding1 | 01/25/22 | 4.000 | 24,954,673 | ||||||||||||||
12,290,000 | Enstar Group, Ltd. | 03/10/22 | 4.500 | 12,533,151 | ||||||||||||||
7,638,000 | Marsh & McLennan Cos., Inc. | 09/10/19 | 2.350 | 7,627,957 | ||||||||||||||
31,810,000 | Sirius International Group, Ltd.1 | 11/01/26 | 4.600 | 29,360,630 | ||||||||||||||
31,750,000 | United Insurance Holdings Corp. | 12/15/27 | 6.250 | 32,293,626 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
INSURANCE (continued) | ||||||||||||||||||
$ 16,740,000 | Vitality Re VIII, Ltd. (Underlying Investment Yield + 1.750%)1,2 | 01/08/22 | 4.165 | % | $ | 16,731,630 | ||||||||||||
123,501,667 | ||||||||||||||||||
INTERNET (0.2%) | ||||||||||||||||||
11,680,000 | Expedia Group, Inc. | 08/15/20 | 5.950 | 12,122,467 | ||||||||||||||
INVESTMENT COMPANIES (2.2%) | ||||||||||||||||||
1,845,000 | Ares Capital Corp. | 01/19/22 | 3.625 | 1,843,413 | ||||||||||||||
35,855,000 | Business Development Corp. of America1 | 12/30/22 | 4.750 | 35,258,820 | ||||||||||||||
321,134 | Carlyle Investment Management LLC4 | 07/15/19 | 4.787 | 321,134 | ||||||||||||||
22,660,000 | FS KKR Capital Corp. | 07/15/19 | 4.000 | 22,680,333 | ||||||||||||||
26,989,000 | FS KKR Capital Corp. | 01/15/20 | 4.250 | 27,047,376 | ||||||||||||||
27,455,000 | Main Street Capital Corp. | 05/01/24 | 5.200 | 27,535,665 | ||||||||||||||
18,225,000 | Owl Rock Capital Corp. | 04/15/24 | 5.250 | 18,313,656 | ||||||||||||||
133,000,397 | ||||||||||||||||||
MACHINERY – CONSTRUCTION & MINING (1.0%) | ||||||||||||||||||
10,397,000 | Caterpillar Financial Services Corp. | 05/18/19 | 1.350 | 10,389,799 | ||||||||||||||
17,525,000 | Caterpillar Financial Services Corp. | 01/10/20 | 2.100 | 17,457,928 | ||||||||||||||
35,330,000 | Caterpillar Financial Services Corp. | 03/15/21 | 2.900 | 35,501,425 | ||||||||||||||
63,349,152 | ||||||||||||||||||
MACHINERY – DIVERSIFIED (0.3%) | ||||||||||||||||||
17,865,000 | John Deere Capital Corp. | 01/10/22 | 3.200 | 18,147,239 | ||||||||||||||
MEDIA (0.2%) | ||||||||||||||||||
8,781,000 | TEGNA, Inc. | 10/15/19 | 5.125 | 8,813,929 | ||||||||||||||
PHARMACEUTICALS (1.0%) | ||||||||||||||||||
34,063,000 | AbbVie, Inc. | 05/14/20 | 2.500 | 33,952,763 | ||||||||||||||
14,000,000 | AbbVie, Inc. | 05/14/21 | 2.300 | 13,863,846 | ||||||||||||||
10,765,000 | Allergan Sales LLC1 | 12/15/21 | 5.000 | 11,213,993 | ||||||||||||||
59,030,602 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 13 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
RETAIL (0.2%) | ||||||||||||||||||
$ 8,915,000 | Walmart, Inc. | 06/26/23 | 3.400 | % | $ | 9,159,590 | ||||||||||||
TELECOMMUNICATIONS (0.3%) | ||||||||||||||||||
17,623,125 | Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint Spectrum Co. III LLC1 | 03/20/23 | 3.360 | 17,579,067 | ||||||||||||||
TRUCKING & LEASING (0.4%) | ||||||||||||||||||
7,770,000 | Avolon Holdings Funding, Ltd.1 | 05/15/24 | 5.250 | 8,107,606 | ||||||||||||||
17,180,000 | Park Aerospace Holdings, Ltd.1 | 08/15/22 | 5.250 | 17,884,380 | ||||||||||||||
25,991,986 | ||||||||||||||||||
Total Corporate Bonds (Identified cost $1,487,896,175) | 1,504,325,762 | |||||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (11.4%) | ||||||||||||||||||
5,717,049 | Analog Devices, Inc. (1-Month USD-LIBOR + 1.125%)2 | 09/23/19 | 3.625 | 5,701,327 | ||||||||||||||
3,826,381 | Analog Devices, Inc. (1-Month USD-LIBOR + 1.250%)2 | 09/23/21 | 3.750 | 3,807,249 | ||||||||||||||
9,504,283 | Aria Energy Operating LLC (1-Month USD-LIBOR + 4.500%)2 | 05/27/22 | 6.983 | 9,480,522 | ||||||||||||||
13,411,830 | Avolon TLB Borrower 1 (US) LLC Term B3 (1-Month USD-LIBOR + 2.000%)2 | 01/15/25 | 4.487 | 13,403,917 | ||||||||||||||
4,962,500 | BCP Renaissance Parent LLC (3-Month USD-LIBOR + 3.500%)2 | 10/31/24 | 6.083 | 4,983,591 | ||||||||||||||
13,299,930 | CenturyLink, Inc. Term A (1-Month USD-LIBOR + 2.750%)2 | 11/01/22 | 5.233 | 13,291,684 | ||||||||||||||
24,671,053 | Charter Communications Operating LLC (CCO Safari LLC) Term A2 (1-Month USD-LIBOR + 1.500%)2 | 03/31/23 | 3.990 | 24,492,188 | ||||||||||||||
34,760,000 | Charter Communications Operating LLC (CCO Safari LLC) Term B (1-Month USD-LIBOR + 2.000%)2 | 04/30/25 | 4.490 | 34,821,525 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||
$ 29,772,727 | Clean Harbors, Inc. (1-Month USD-LIBOR + 1.750%)2 | 06/28/24 | 4.233 | % | $ | 29,757,841 | ||||||||||||
31,224,819 | Dell International LLC Term A2 (1-Month USD-LIBOR + 1.750%)2 | 09/07/21 | 4.240 | 31,174,547 | ||||||||||||||
24,872,078 | Dell International LLC Term B (1-Month USD-LIBOR + 2.000%)2 | 09/07/23 | 4.490 | 24,872,078 | ||||||||||||||
34,844,329 | Delos Finance S.a r.l. (3-Month USD-LIBOR + 1.750%)2 | 10/06/23 | 4.351 | 34,880,567 | ||||||||||||||
28,964,580 | Eastern Power LLC (TPF II LC LLC) (1-Month USD-LIBOR + 3.750%)2 | 10/02/23 | 6.233 | 28,961,104 | ||||||||||||||
33,950,000 | Elanco Animal Health, Inc. (1-Month USD-LIBOR + 1.250%)2 | 09/06/21 | 3.733 | 33,907,562 | ||||||||||||||
34,244,235 | Frontera Generation Holdings LLC (1-Month USD-LIBOR + 4.250%)2 | 05/02/25 | 6.724 | 34,223,004 | ||||||||||||||
7,647,059 | HCA, Inc. Term A5 (1-Month USD-LIBOR + 1.500%)2 | 06/10/20 | 3.983 | 7,637,500 | ||||||||||||||
2,817,884 | HCA, Inc. Term B10 (1-Month USD-LIBOR + 2.000%)2 | 03/13/25 | 4.483 | 2,822,421 | ||||||||||||||
12,976,919 | HCA, Inc. Term B11 (1-Month USD-LIBOR + 1.750%)2 | 03/17/23 | 4.233 | 12,999,239 | ||||||||||||||
15,080,677 | Kestrel Acquisition LLC Term B (1-Month USD-LIBOR + 4.250%)2 | �� | 06/02/25 | 6.740 | 15,105,862 | |||||||||||||
12,845,106 | Mallinckrodt International Finance S.A. (3-Month USD-LIBOR + 3.000%)2 | 02/24/25 | 5.693 | 11,630,216 | ||||||||||||||
9,131,601 | Mallinckrodt International Finance S.A. Term B (3-Month USD-LIBOR + 2.750%)2 | 09/24/24 | 5.351 | 8,174,427 | ||||||||||||||
33,333,333 | Marvell Technology Group, Ltd. Term A (1-Month USD-LIBOR + 1.375%)2 | 06/04/21 | 3.855 | 33,166,667 | ||||||||||||||
32,012,302 | NorthRiver Midstream Finance LP Term B (3-Month USD-LIBOR + 3.250%)2 | 10/01/25 | 5.850 | 32,114,422 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 15 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||
$ 26,185,000 | Panther BF Aggregator 2 L P(1-Month USD-LIBOR + 3.500%)2 | 04/30/26 | 5.983 | % | $ | 26,266,959 | ||||||||||||
11,470,631 | Revere Power LLC Term B (2-Month USD-LIBOR + 4.250%)2 | 03/27/26 | 6.791 | 11,377,490 | ||||||||||||||
1,778,592 | Revere Power LLC Term C (2-Month USD-LIBOR + 4.250%)2 | 03/27/26 | 6.791 | 1,764,150 | ||||||||||||||
19,610,958 | RPI Finance Trust Term A4 (1-Month USD-LIBOR + 1.500%)2 | 05/04/22 | 3.983 | 19,537,417 | ||||||||||||||
46,127,370 | RPI Finance Trust Term B6 (1-Month USD-LIBOR + 2.000%)2 | 03/27/23 | 4.483 | 46,156,431 | ||||||||||||||
24,492,348 | Sprint Communications, Inc. (1-Month USD-LIBOR + 2.500%)2 | 02/02/24 | 5.000 | 23,763,700 | ||||||||||||||
2,493,750 | Sprint Communications, Inc. (1-Month USD-LIBOR + 3.000%)2 | 02/02/24 | 5.500 | 2,453,227 | ||||||||||||||
6,263,290 | SS&C Technologies Holdings, Inc. Term B3 (1-Month USD-LIBOR + 2.250%)2 | 04/16/25 | 4.733 | 6,264,104 | ||||||||||||||
3,318,683 | SS&C Technologies Holdings, Inc. Term B4 (1-Month USD-LIBOR + 2.250%)2 | 04/16/25 | 4.733 | 3,319,114 | ||||||||||||||
8,499,154 | SS&C Technologies Holdings, Inc. Term B5 (1-Month USD-LIBOR + 2.250%)2 | 04/16/25 | 4.733 | 8,498,134 | ||||||||||||||
24,233,120 | TerraForm Power Operating LLC (1-Month USD-LIBOR + 2.000%)2 | 11/08/22 | 4.483 | 24,142,246 | ||||||||||||||
14,885,787 | Vistra Operations Co. LLC (Tex Operations Co. LLC) (1-Month USD-LIBOR + 2.000%)2 | 08/04/23 | 4.483 | 14,884,149 | ||||||||||||||
32,732,806 | Western Digital Corp. Term B4 (1-Month USD-LIBOR + 1.750%)2 | 04/29/23 | 4.233 | 32,397,294 | ||||||||||||||
32,842,960 | Wyndham Hotels & Resorts, Inc. Term B (1-Month USD-LIBOR + 1.750%)2 | 05/30/25 | 4.233 | 32,796,651 | ||||||||||||||
Total Loan Participations and Assignments | ||||||||||||||||||
(Identified cost $708,129,292) | 705,030,526 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (1.9%) | ||||||||||||||||||
$ 14,525,000 | New Jersey Economic Development Authority, Revenue Bonds | 06/15/21 | 5.000 | % | $ | 15,382,701 | ||||||||||||
10,100,000 | New Jersey Turnpike Authority, Revenue Bonds (1-Month USD-LIBOR + 0.700%)2 | 01/01/24 | 2.451 | 10,170,195 | ||||||||||||||
85,500,000 | New Jersey Turnpike Authority, Revenue Bonds (1-Month USD-LIBOR + 0.700%)2 | 01/01/24 | 2.451 | 86,094,225 | ||||||||||||||
5,893,000 | Pennsylvania Industrial Development Authority, Revenue Bonds1 | 07/01/21 | 2.967 | 5,862,416 | ||||||||||||||
Total Municipal Bonds (Identified cost $116,583,505) | 117,509,537 | |||||||||||||||||
RESIDENTIAL MORTGAGE BACKED SECURITIES (0.5%) | ||||||||||||||||||
32,624,490 | Pepper Residential Securities Trust No. 23 (1-Month USD-LIBOR + 0.950%)1,2 | 08/18/60 | 3.430 | 32,625,704 | ||||||||||||||
Total Residential Mortgage Backed Securities | ||||||||||||||||||
(Identified cost $32,624,490) | 32,625,704 | |||||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.4%) | ||||||||||||||||||
83,000,000 | Federal Home Loan Bank Discount Notes5 | 05/01/19 | 0.000 | 83,000,000 | ||||||||||||||
95,170 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (1-Year USD-LIBOR + 1.797%)2 | 04/01/36 | 4.360 | 99,964 | ||||||||||||||
17,092 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (6-Month USD-LIBOR + 1.740%)2 | 12/01/36 | 4.365 | 17,990 | ||||||||||||||
19,078 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (1-Year USD-LIBOR + 1.745%)2 | 01/01/37 | 4.788 | 20,043 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 17 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (continued) | ||||||||||||||||||
$ 19,212 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed (1-Year USD-LIBOR + 1.978%)2 | 02/01/37 | 5.102 | % | $ | 20,164 | ||||||||||||
6,584,019 | Federal National Mortgage Association (FNMA) | 07/01/35 | 5.000 | 7,063,605 | ||||||||||||||
440,012 | Federal National Mortgage Association (FNMA) | 11/01/35 | 5.500 | 484,218 | ||||||||||||||
39,760 | Federal National Mortgage Association (FNMA) (1-Year USD-LIBOR + 1.974%)2 | 07/01/36 | 4.724 | 42,054 | ||||||||||||||
90,730 | Federal National Mortgage Association (FNMA) (1-Year USD-LIBOR + 1.712%)2 | 09/01/36 | 4.462 | 95,094 | ||||||||||||||
383,538 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 422,305 | ||||||||||||||
4,460,829 | Federal National Mortgage Association (FNMA) | 08/01/37 | 5.500 | 4,911,869 | ||||||||||||||
1,913,229 | Federal National Mortgage Association (FNMA) | 06/01/40 | 6.500 | 2,116,875 | ||||||||||||||
46,748 | Federal National Mortgage Association (FNMA) (1-Year USD-LIBOR + 1.807%)2 | 01/01/37 | 4.821 | 49,239 | ||||||||||||||
50,000,000 | Freddie Mac Discount Notes5 | 05/01/19 | 0.000 | 50,000,000 | ||||||||||||||
13,580 | Government National Mortgage Association (GNMA) (1-Year CMT Index + 1.500%)2 | 08/20/29 | 3.750 | 14,081 | ||||||||||||||
Total U.S. Government Agency Obligations | ||||||||||||||||||
(Identified cost $147,986,151) | 148,357,501 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. TREASURY BILLS (7.9%) | ||||||||||||||||||
$ 40,000,000 | U.S. Treasury Bill5 | 05/02/19 | 0.000 | % | $ | 39,997,348 | ||||||||||||
75,000,000 | U.S. Treasury Bill5 | 05/23/19 | 0.000 | 74,889,954 | ||||||||||||||
150,000,000 | U.S. Treasury Bill5 | 06/06/19 | 0.000 | 149,639,550 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 06/20/19 | 0.000 | 49,833,472 | ||||||||||||||
74,000,000 | U.S. Treasury Bill5 | 07/05/19 | 0.000 | 73,681,671 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5 | 07/25/19 | 0.000 | 49,720,878 | ||||||||||||||
50,000,000 | U.S. Treasury Bill5,6 | 08/15/19 | 0.000 | 49,649,243 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $487,396,367) | 487,412,116 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $6,122,204,929)7 | 99.6 | % | $ | 6,141,982,409 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 0.4 | % | 25,766,211 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 6,167,748,620 |
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, 2019 was $ 3,309,491,948 or 53.7% 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, 2019 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 | Security issued with zero coupon. Income is recognized through accretion of discount. |
6 | All or a portion of this security is held at the broker as collateral for open futures contracts. |
7 | The aggregate cost for federal income tax purposes is $6,122,204,929, the aggregate gross unrealized appreciation is $33,374,911 and the aggregate gross unrealized depreciation is $16,926,602, resulting in net unrealized appreciation of $16,448,309. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 19 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Description | Number of Contracts | Expiration Date | Notional Amount | Market Value | Unrealized Gain/(Loss) | |||||||||||||||||
Contracts to Sell: | ||||||||||||||||||||||
U.S. Treasury 2-Year Notes | 953 | June 2019 | $ | 202,385,930 | $ | 202,996,445 | $ | (610,515 | ) | |||||||||||||
U.S. Treasury 5-Year Notes | 3,300 | June 2019 | 379,519,359 | 381,614,062 | (2,094,703 | ) | ||||||||||||||||
U.S. Treasury 10-Year Notes | 522 | June 2019 | 63,932,766 | 64,556,719 | (623,953 | ) | ||||||||||||||||
$ | (3,329,171 | ) |
— | Level 2 – significant other observable inputs (including quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.). |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities). |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 21 |
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 | ||||||||||||||
Asset Backed Securities | $ | – | $ | 2,794,214,742 | $ | 31,205,342 | $ | 2,825,420,084 | ||||||||||
Commercial Mortgage Backed Securities | – | 321,301,179 | – | 321,301,179 | ||||||||||||||
Corporate Bonds | – | 1,504,004,628 | 321,134 | 1,504,325,762 | ||||||||||||||
Loan Participations and Assignments | – | 705,030,526 | – | 705,030,526 | ||||||||||||||
Municipal Bonds | – | 117,509,537 | – | 117,509,537 | ||||||||||||||
Residential Mortgage Backed Securities | – | 32,625,704 | – | 32,625,704 | ||||||||||||||
U.S. Government Agency Obligations | – | 148,357,501 | – | 148,357,501 | ||||||||||||||
U.S. Treasury Bills | – | 487,412,116 | – | 487,412,116 | ||||||||||||||
Total Investments, at value | $ | – | $ | 6,110,455,933 | $ | 31,526,476 | $ | 6,141,982,409 | ||||||||||
Other Financial Instruments, at value | ||||||||||||||||||
Financial Futures Contracts | $ | (3,329,171 | ) | $ | – | $ | – | $ | (3,329,171 | ) | ||||||||
Other Financial Instruments, at value | $ | (3,329,171 | ) | $ | – | $ | – | $ | (3,329,171 | ) |
* | The Fund’s policy is to disclose transfers between levels based on valuations at the end of the reporting period. During the period ended April 30, 2019, there were no transfers between Levels 1 and 2 or Levels 1 and 3. A security with a value of $30,451,550 was transferred from Level 3 to Level 2 due to an increase in the availability of significant observable inputs to determine fair value. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Asset Backed Securities | Corporate Bonds | Total | ||||||||||||
Balance as of October 31, 2018 | $ | 60,693,958 | $ | 963,403 | $ | 61,657,361 | ||||||||
Purchases | — | — | — | |||||||||||
Sales / Paydowns | — | (642,269 | ) | (642,269 | ) | |||||||||
Realized gains (losses) | — | — | — | |||||||||||
Change in unrealized appreciation (depreciation) | 926,880 | — | 926,880 | |||||||||||
Amortization | 36,054 | — | 36,054 | |||||||||||
Transfers from Level 3 | (30,451,550 | ) | — | (30,451,550 | ) | |||||||||
Transfers to Level 3 | — | — | — | |||||||||||
Balance as of April 30, 2019 | $ | 31,205,342 | $ | 321,134 | $ | 31,526,476 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 23 |
BBH LIMITED DURATION FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2019 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $6,122,204,929) | $ | 6,141,982,409 | ||||
Cash | 5,719,244 | |||||
Receivables for: | ||||||
Shares sold | 44,175,417 | |||||
Interest | 21,524,508 | |||||
Investment advisory and administrative fee waiver reimbursement | 83,468 | |||||
Investments sold | 590 | |||||
Other | 2,177,909 | |||||
Total Assets | 6,215,663,545 | |||||
LIABILITIES | ||||||
Cash collateral for futures contracts | 2,594,425 | |||||
Payables for: | ||||||
Investments purchased | 26,148,625 | |||||
Shares redeemed | 14,784,781 | |||||
Investment advisory and administrative fees | 2,665,653 | |||||
Futures variation margin on open contracts | 734,746 | |||||
Periodic distributions | 651,539 | |||||
Custody and fund accounting fees | 123,264 | |||||
Shareholder servicing fees | 109,358 | |||||
Professional fees | 60,394 | |||||
Transfer agent fees | 4,168 | |||||
Board of Trustees’ fees | 1,743 | |||||
Accrued expenses and other liabilities | 36,229 | |||||
Total Liabilities | 47,914,925 | |||||
NET ASSETS | $ | 6,167,748,620 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 6,198,681,921 | ||||
Accumulated deficit | (30,933,301 | ) | ||||
Net Assets | $ | 6,167,748,620 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($330,350,828 ÷ 32,349,377 shares outstanding) | $10.21 | |||||
CLASS I SHARES | ||||||
($5,837,397,792 ÷ 571,857,021 shares outstanding) | $10.21 |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2019 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest income | $ | 101,692,144 | ||||
Other income | 1,005,779 | |||||
Total Income | 102,697,923 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 7,876,859 | |||||
Custody and fund accounting fees | 337,858 | |||||
Shareholder servicing fees | 314,601 | |||||
Professional fees | 49,306 | |||||
Transfer agent fees | 24,239 | |||||
Board of Trustees’ fees | 23,993 | |||||
Miscellaneous expenses | 194,796 | |||||
Total Expenses | 8,821,652 | |||||
Investment advisory and administrative fee waiver | (235,921 | ) | ||||
Expense offset arrangement | (60,765 | ) | ||||
Net Expenses | 8,524,966 | |||||
Net Investment Income | 94,172,957 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 415,036 | |||||
Net realized loss on futures contracts | (4,986,900 | ) | ||||
Net realized loss on investments in securities and futures contracts | (4,571,864 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 48,486,709 | |||||
Net change in unrealized appreciation/(depreciation) on futures contracts | (6,825,472 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | 41,661,237 | |||||
Net Realized and Unrealized Gain | 37,089,373 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 131,262,330 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 25 |
BBH LIMITED DURATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2019 (unaudited) | For the year ended October 31, 2018 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 94,172,957 | $ | 161,523,015 | ||||||
Net realized gain/(loss) on investments in securities and futures contracts | (4,571,864 | ) | 6,588,784 | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | 41,661,237 | (34,886,307 | ) | |||||||
Net increase in net assets resulting from operations | 131,262,330 | 133,225,492 | ||||||||
Dividends and distributions declared: | ||||||||||
Class N | (4,815,799 | ) | (4,285,493 | ) | ||||||
Class I | (89,349,346 | ) | (156,716,668 | ) | ||||||
Total dividends and distributions declared | (94,165,145 | ) | (161,002,161 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares1 | 1,391,201,864 | 3,374,484,922 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 22,613,703 | 30,595,806 | ||||||||
Proceeds from short-term redemption fees | 501 | – | ||||||||
Cost of shares redeemed1 | (1,558,697,951 | ) | (3,520,060,947 | ) | ||||||
Net decrease in net assets resulting from share transactions | (144,881,883 | ) | (114,980,219 | ) | ||||||
Total decrease in net assets | (107,784,698 | ) | (142,756,888 | ) | ||||||
NET ASSETS: | ||||||||||
Beginning of period | 6,275,533,318 | 6,418,290,206 | ||||||||
End of period | $ | 6,167,748,620 | $ | 6,275,533,318 |
1 | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.15 | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.15 | 0.26 | 0.21 | 0.19 | 0.18 | 0.14 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | (0.06 | ) | 0.05 | (0.00 | )2 | (0.17 | ) | (0.01 | ) | |||||||||||||||||
Total income from investment operations | 0.21 | 0.20 | 0.26 | 0.19 | 0.01 | 0.13 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.15 | ) | (0.24 | ) | (0.20 | ) | (0.20 | ) | (0.18 | ) | (0.14 | ) | |||||||||||||||
From net realized gains | – | – | – | – | – | (0.03 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.15 | ) | (0.24 | ) | (0.20 | ) | (0.20 | ) | (0.18 | ) | (0.17 | ) | |||||||||||||||
Short-term redemption fees1 | 0.00 | 2 | – | – | – | – | – | ||||||||||||||||||||
Net asset value, end of period | $ | 10.21 | $ | 10.15 | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | |||||||||||||||
Total return | 2.11 | %3 | 2.03 | % | 2.64 | % | 1.90 | % | 0.10 | % | 1.32 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 330 | $ | 275 | $ | 72 | $ | 42 | $ | 2,557 | $ | 2,625 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 0.50 | %4 | 0.50 | % | 0.67 | % | 0.49 | % | 0.48 | % | 0.48 | % | |||||||||||||||
Fee waiver | 0.15 | %4,5 | 0.15 | %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 | 0.35 | % | 0.40 | % | 0.48 | % | 0.48 | % | 0.48 | % | |||||||||||||||
Ratio of net investment income to average net assets | 3.03 | %4 | 2.52 | % | 2.05 | % | 1.91 | % | 1.75 | % | 1.36 | % | |||||||||||||||
Portfolio turnover rate | 25 | %3 | 48 | % | 52 | % | 53 | % | 46 | % | 35 | % |
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, 2019, the years ended October 31, 2018, 2017 and 2016, reflect fees reduced as result of voluntary operating expense limitation of the share class. Prior to March 24, 2017, the expense limitation of the share class was 0.48%. Following March 24, 2017, the expense limitation was changed to 0.35%. 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, 2019 and the years ended October 31, 2018, 2017 and 2016, the waived fees were $235,921, $242,627, $132,560 and $45,079, respectively. |
6 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 27 |
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the years ended October 31, | |||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.15 | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income1 | 0.16 | 0.25 | 0.22 | 0.22 | 0.20 | 0.16 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | (0.04 | ) | 0.06 | (0.01 | ) | (0.17 | ) | (0.01 | ) | |||||||||||||||||
Total income from investment operations | 0.22 | 0.21 | 0.28 | 0.21 | 0.03 | 0.15 | |||||||||||||||||||||
Less dividends and distributions: | |||||||||||||||||||||||||||
From net investment income | (0.16 | ) | (0.25 | ) | (0.22 | ) | (0.22 | ) | (0.20 | ) | (0.16 | ) | |||||||||||||||
From net realized gains | – | – | – | – | – | (0.03 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.16 | ) | (0.25 | ) | (0.22 | ) | (0.22 | ) | (0.20 | ) | (0.19 | ) | |||||||||||||||
Net asset value, end of period | $ | 10.21 | $ | 10.15 | $ | 10.19 | $ | 10.13 | $ | 10.14 | $ | 10.31 | |||||||||||||||
Total return | 2.15 | %2 | 2.11 | % | 2.77 | % | 2.13 | % | 0.30 | % | 1.52 | % | |||||||||||||||
Ratios/Supplemental data: | |||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 5,837 | $ | 6,000 | $ | 6,346 | $ | 4,737 | $ | 2,153 | $ | 2,547 | |||||||||||||||
Ratio of expenses to average net assets before reductions | 0.28 | %3 | 0.27 | % | 0.28 | % | 0.27 | % | 0.28 | % | 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 | 0.28 | %3 | 0.27 | % | 0.28 | % | 0.27 | % | 0.28 | % | 0.29 | % | |||||||||||||||
Ratio of net investment income to average net assets | 3.09 | %3 | 2.47 | % | 2.17 | % | 2.21 | % | 1.94 | % | 1.56 | % | |||||||||||||||
Portfolio turnover rate | 25 | %2 | 48 | % | 52 | % | 53 | % | 46 | % | 35 | % |
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.
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2019 (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, 2019, there were seven 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. Futures contracts held by the Fund are valued daily at the official settlement price of the exchange on which it is traded. |
financial statements april 30, 2019 | 29 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Interest income is accrued daily and consists of interest accrued, discount earned (including, if any, both original issue and market discount) and premium amortization on the investments of the Fund. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of the interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust on a net assets basis. 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 economically 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. |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Risk | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |||||||||||||||
Interest Rate Risk | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts | $ | – | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts | $ | (3,329,171 | )* | ||||||||||||
Total | $ | – | $ | (3,329,171 | ) |
* | 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 Loss on Derivatives | ||||||
Futures Contracts | $ | (4,986,900 | ) | |||
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives | ||||||
Futures Contracts | $ | (6,825,472 | ) |
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, under SEC Regulations for open-end investment companies, 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. |
financial statements april 30, 2019 | 31 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 assignment, the Fund acquires the loan in whole or in part and becomes a lender under the loan agreement. The Fund generally has the 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 between paid-in capital and retained earnings/(accumulated deficit) within the Statement of Assets and 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. |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
H. | Dividends and Distributions to Shareholders. Dividends and distributions from net investment income to shareholders are declared daily and paid monthly to shareholders. 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 and distributions in the amount of $4,815,799 and $89,349,346 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2019. |
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2018: | $ | 161,002,161 | $ | – | $ | 161,002,161 | $ | – | $ | 161,002,161 | ||||||||||||||
2017: | 126,034,096 | – | 126,034,096 | – | 126,034,096 |
Components of retained earnings/(accumulated deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Retained earnings/ (accumulated deficit) | Accumulated capital and other losses | Other book/tax temporary differences | Book unrealized appreciation/ (depreciation) | Total retained earnings/ (accumulated deficit) | ||||||||||||||||||||||||||
2018: | $ | 2,429,200 | $ | – | $ | 2,429,200 | $ | (41,743,663 | ) | $ | (3,503,095 | ) | $ | (25,212,928 | ) | $ | (68,030,486 | ) | ||||||||||||||
2017: | 1,712,065 | – | 1,712,065 | (45,774,424 | ) | (5,864,837 | ) | 9,673,379 | (40,253,817 | ) |
financial statements april 30, 2019 | 33 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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. |
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 0.30% per annum on the first $1 billion of the Fund’s average daily net assets and 0.25% per annum on the Fund’s average daily net assets over $1 billion. For the six months ended April 30, 2019, the Fund incurred $7,876,859 for services under the Agreement. |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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 course 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, 2019, the Investment Adviser waived fees in the amount of $235,921 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, 2019, Class N shares of the Fund incurred $314,601 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, 2019, the Fund incurred $337,858 in custody and fund accounting fees. These fees for the Fund were reduced by $60,765 as a result of an expense offset arrangement with the Fund’s custodian, which expired on December 31, 2018. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. Upon the expiration of the expense offset arrangement, the Fund received interest income on cash balances held by the custodian at the BBH Base Rate. 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, 2019, was $5,820. 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, 2019, the Fund incurred $23,993 in independent Trustee compensation and reimbursements. |
F. | Officers of the Trust. Officers of the Trust are also employees of BBH. Officers are paid no fees by the Trust for their services to the Trust. |
financial statements april 30, 2019 | 35 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
4. | Investment Transactions. For the six months ended April 30, 2019, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $1,438,017,745 and $1,364,441,645, 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, 2019 (unaudited) | For the year ended October 31, 2018 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 13,830,476 | $ | 140,576,156 | 30,946,210 | $ | 314,812,228 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 448,828 | 4,562,648 | 387,697 | 3,939,411 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 501 | N/A | – | |||||||||||||||
Shares redeemed | (9,065,058 | ) | (92,242,754 | ) | (11,280,338 | ) | (114,748,174 | ) | |||||||||||
Net increase | 5,214,246 | $ | 52,896,551 | 20,053,569 | $ | 204,003,465 | |||||||||||||
Class I | |||||||||||||||||||
Shares sold | 122,976,393 | $ | 1,250,625,708 | 300,746,654 | $ | 3,059,672,694 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 1,776,424 | 18,051,055 | 2,624,173 | 26,656,395 | |||||||||||||||
Shares redeemed | (144,208,508 | ) | (1,466,455,197 | ) | (334,891,134 | ) | (3,405,312,773 | ) | |||||||||||
Net increase/(decrease) | (19,455,691 | ) | $ | (197,778,434 | ) | (31,520,307 | ) | $ | (318,983,684 | ) |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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, 2019 | 37 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Recent Pronouncements. |
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 2017-08”) 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 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU 2017-08 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. |
B. | ASU 2018-13. On August 28, 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”). ASU 2018-13 modifies the disclosure objective paragraphs of Accounting Standards Codification 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. ASU 2018-13 also eliminates and modifies other requirements under ASU 2018-13. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted and Management is currently evaluating the application of ASU 2018-13 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, 2019 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 39 |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2019 (unaudited)
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,021 | $ | 1.75 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,023 | $ | 1.76 |
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,021 | $ | 1.40 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,023 | $ | 1.40 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.35% and 0.28% 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 LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 41 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
the Board considered in making its determination to approve the continuance of the Agreement. No single factor reviewed by the Board was identified as the principal factor in determining whether to approve the 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 based on the comparative performance, expense information, the cost of the services provided, and the profits realized by the Investment Adviser.
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 43 |
BBH LIMITED DURATION FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 45 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 47 |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
Fund, which could have an adverse effect on the Fund. However, BBH, including the Investment Adviser, has implemented policies and procedures concerning personal trading by BBH Partners and employees. The policies and procedures are intended to prevent BBH Partners and employees with access to Fund material non-public information from trading in the same securities as the Fund.
financial statements april 30, 2019 | 49 |
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 |
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other Fund communications electronically from the Fund by calling 1-800-575-1265 or from your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund by calling 1-800-575-1265 or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper may apply to all funds in the fund complex or held with your financial intermediary.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO ALLOCATION
April 30, 2019 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Municipal Bonds | $ | 334,772,606 | 100.6 | % | ||||||
Liabilities in Excess of Other Assets | (2,023,835 | ) | (0.6 | ) | ||||||
NET ASSETS | $ | 332,748,771 | 100.0 | % |
U.S. $ Value | Percent of Total Investments | |||||||||
AAA | $ | 88,976,820 | 26.6 | % | ||||||
AA | 120,997,979 | 36.1 | ||||||||
A | 107,404,440 | 32.1 | ||||||||
BBB | 17,393,367 | 5.2 | ||||||||
TOTAL INVESTMENTS | $ | 334,772,606 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (100.6%) | ||||||||||||||||||
Alabama (0.0%) | ||||||||||||||||||
$ 150,000 | Alabama 21st Century Authority, Revenue Bonds | 06/01/21 | 5.000 | % | $ | 159,060 | ||||||||||||
Total Alabama | 159,060 | |||||||||||||||||
Arizona (0.2%) | ||||||||||||||||||
475,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/19 | 5.250 | 483,940 | ||||||||||||||
205,000 | Salt Verde Financial Corp., Revenue Bonds | 12/01/22 | 5.250 | 226,502 | ||||||||||||||
Total Arizona | 710,442 | |||||||||||||||||
California (5.4%) | ||||||||||||||||||
1,000,000 | Anaheim City School District, General Obligation Bonds, NPFG1 | 08/01/26 | 0.000 | 840,110 | ||||||||||||||
2,125,000 | Anaheim City School District, General Obligation Bonds, AGM, NPFG1 | 08/01/29 | 0.000 | 1,613,236 | ||||||||||||||
1,185,000 | California Pollution Control Financing Authority, Revenue Bonds2,3 | 11/01/40 | 3.125 | 1,242,437 | ||||||||||||||
1,015,000 | Downey Unified School District, General Obligation Bonds1 | 08/01/33 | 0.000 | 644,089 | ||||||||||||||
1,000,000 | Downey Unified School District, General Obligation Bonds1 | 08/01/35 | 0.000 | 581,440 | ||||||||||||||
1,225,000 | Evergreen School District, General Obligation Bonds, AGC1 | 08/01/27 | 0.000 | 1,013,638 | ||||||||||||||
1,000,000 | Golden State Tobacco Securitization Corp., Revenue Bonds, AGM1 | 06/01/25 | 0.000 | 885,420 | ||||||||||||||
1,000,000 | Grossmont Healthcare District, General Obligation Bonds, AMBAC1 | 07/15/30 | 0.000 | 726,310 | ||||||||||||||
1,100,000 | La Mesa-Spring Valley School District, General Obligation Bonds, NPFG1 | 08/01/26 | 0.000 | 928,763 | ||||||||||||||
1,310,000 | Lake Tahoe Unified School District, General Obligation Bonds, NPFG1 | 08/01/27 | 0.000 | 1,080,436 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 3 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
California (continued) | ||||||||||||||||||
$ 225,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/19 | 5.250 | % | $ | 229,097 | ||||||||||||
725,000 | Long Beach Bond Finance Authority, Revenue Bonds | 11/15/22 | 5.250 | 800,415 | ||||||||||||||
210,000 | Long Beach Bond Finance Authority, Revenue Bonds (3-Month USD-LIBOR + 1.450%)2 | 11/15/27 | 3.248 | 211,243 | ||||||||||||||
1,035,000 | Roseville Joint Union High School District, General Obligation Bonds1 | 08/01/33 | 0.000 | 620,979 | ||||||||||||||
3,000,000 | San Diego Unified School District, General Obligation Bonds1 | 07/01/37 | 0.000 | 1,538,760 | ||||||||||||||
1,000,000 | Santa Ana Unified School District, General Obligation Bonds, NPFG1 | 08/01/24 | 0.000 | 897,200 | ||||||||||||||
2,415,000 | State of California, General Obligation Bonds | 12/01/32 | 2.850 | 2,431,398 | ||||||||||||||
1,000,000 | Ukiah Unified School District, General Obligation Bonds, NPFG1 | 08/01/24 | 0.000 | 897,660 | ||||||||||||||
1,040,000 | Windsor Unified School District, General Obligation Bonds1 | 08/01/33 | 0.000 | 683,519 | ||||||||||||||
Total California | 17,866,150 | |||||||||||||||||
Colorado (2.3%) | ||||||||||||||||||
2,484,717 | Colorado Housing & Finance Authority, Revenue Bonds, GNMA | 11/01/48 | 4.200 | 2,620,482 | ||||||||||||||
1,900,000 | E-470 Public Highway Authority, Revenue Bonds, NPFG1 | 09/01/25 | 0.000 | 1,630,618 | ||||||||||||||
1,750,000 | E-470 Public Highway Authority, Revenue Bonds, NPFG1 | 09/01/27 | 0.000 | 1,402,573 | ||||||||||||||
2,000,000 | E-470 Public Highway Authority, Revenue Bonds (1-Month USD-LIBOR + 0.420%)2 | 09/01/39 | 2.080 | 2,000,320 | ||||||||||||||
Total Colorado | 7,653,993 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Connecticut (4.8%) | ||||||||||||||||||
$1,135,000 | Connecticut Housing Finance Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 11/15/22 | 2.100 | % | $ | 1,130,108 | ||||||||||||
530,000 | Connecticut Housing Finance Authority, Revenue Bonds | 05/15/23 | 2.800 | 540,298 | ||||||||||||||
2,595,000 | Connecticut State Health & Educational Facilities Authority, Revenue Bonds2,3 | 07/01/42 | 2.000 | 2,596,142 | ||||||||||||||
150,000 | Connecticut State Health & Educational Facilities Authority, Revenue Bonds (1-Month USD-LIBOR + 0.550%)2 | 07/01/49 | 2.226 | 150,045 | ||||||||||||||
180,000 | State of Connecticut, General Obligation Bonds (SIFMA Municipal Swap Index Yield + 0.900%)2 | 03/01/23 | 3.200 | 180,880 | ||||||||||||||
1,000,000 | State of Connecticut, General Obligation Bonds (SIFMA Municipal Swap Index Yield + 0.990%)2 | 03/01/25 | 3.290 | 1,006,180 | ||||||||||||||
1,845,000 | State of Connecticut, General Obligation Bonds | 03/01/26 | 5.000 | 2,085,256 | ||||||||||||||
1,870,000 | State of Connecticut Special Tax Revenue, Revenue Bonds | 08/01/25 | 5.000 | 2,177,914 | ||||||||||||||
2,430,000 | State of Connecticut Special Tax Revenue, Revenue Bonds | 09/01/26 | 5.000 | 2,871,312 | ||||||||||||||
1,000,000 | State of Connecticut Special Tax Revenue, Revenue Bonds | 08/01/27 | 5.000 | 1,151,860 | ||||||||||||||
1,835,000 | State of Connecticut Special Tax Revenue, Revenue Bonds | 01/01/29 | 5.000 | 2,181,540 | ||||||||||||||
Total Connecticut | 16,071,535 | |||||||||||||||||
Florida (6.6%) | ||||||||||||||||||
2,000,000 | County of Broward Airport System, Revenue Bonds | 10/01/22 | 5.000 | 2,200,760 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 5 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Florida (continued) | ||||||||||||||||||
$1,020,000 | County of Broward Airport System, Revenue Bonds | 10/01/25 | 5.000 | % | $ | 1,123,101 | ||||||||||||
1,015,000 | County of Hillsborough Solid Waste & Resource Recovery, Revenue Bonds | 09/01/24 | 5.000 | 1,162,662 | ||||||||||||||
2,000,000 | Florida Housing Finance Corp., Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/33 | 3.750 | 2,106,760 | ||||||||||||||
1,200,000 | Florida Housing Finance Corp., Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/49 | 4.000 | 1,277,040 | ||||||||||||||
4,500,000 | Florida Housing Finance Corp., Revenue Bonds, FHLMC, FNMA, GNMA | 01/01/50 | 4.250 | 4,864,275 | ||||||||||||||
230,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/25 | 5.000 | 259,484 | ||||||||||||||
65,000 | Hillsborough County Aviation Authority, Revenue Bonds | 10/01/26 | 5.000 | 73,098 | ||||||||||||||
178,000 | Pinellas County Health Facilities Authority, Revenue Bonds, NPFG2,3 | 11/15/23 | 3.636 | 178,000 | ||||||||||||||
1,750,000 | State of Florida, General Obligation Bonds | 06/01/26 | 5.000 | 2,127,457 | ||||||||||||||
2,125,000 | State of Florida Lottery Revenue, Revenue Bonds | 07/01/25 | 5.000 | 2,526,264 | ||||||||||||||
3,290,000 | State of Florida Lottery Revenue, Revenue Bonds | 07/01/27 | 5.000 | 3,985,868 | ||||||||||||||
Total Florida | 21,884,769 | |||||||||||||||||
Georgia (4.3%) | ||||||||||||||||||
1,200,000 | Burke County Development Authority, Revenue Bonds2,3 | 11/01/45 | 3.000 | 1,209,756 | ||||||||||||||
2,265,000 | Burke County Development Authority, Revenue Bonds2,3 | 11/01/45 | 3.250 | 2,311,251 | ||||||||||||||
65,000 | Georgia Municipal Electric Authority, Revenue Bonds, NPFG2,3 | 01/01/21 | 2.601 | 65,374 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Georgia (continued) | ||||||||||||||||||
$ 345,000 | Georgia Municipal Electric Authority, Revenue Bonds | 01/01/25 | 5.000 | % | $ | 392,631 | ||||||||||||
1,265,000 | Georgia Municipal Electric Authority, Revenue Bonds | 01/01/26 | 5.000 | 1,471,372 | ||||||||||||||
2,700,000 | Georgia Municipal Electric Authority, Revenue Bonds | 01/01/29 | 5.000 | 3,191,481 | ||||||||||||||
1,200,000 | State of Georgia, General Obligation Bonds | 02/01/25 | 5.000 | 1,419,408 | ||||||||||||||
1,860,000 | State of Georgia, General Obligation Bonds | 12/01/25 | 5.000 | 2,243,364 | ||||||||||||||
1,610,000 | State of Georgia, General Obligation Bonds | 12/01/26 | 5.000 | 1,982,522 | ||||||||||||||
Total Georgia | 14,287,159 | |||||||||||||||||
Hawaii (0.3%) | ||||||||||||||||||
310,000 | State of Hawaii Airports System Revenue, Certificates of Participation | 08/01/25 | 5.250 | 347,333 | ||||||||||||||
650,000 | State of Hawaii Airports System Revenue, Certificates of Participation | 08/01/26 | 5.250 | 724,932 | ||||||||||||||
Total Hawaii | 1,072,265 | |||||||||||||||||
Illinois (3.5%) | ||||||||||||||||||
1,155,000 | Chicago Transit Authority, Revenue Bonds | 06/01/19 | 5.000 | 1,157,772 | ||||||||||||||
1,000,000 | Chicago Transit Authority, Revenue Bonds | 06/01/20 | 5.000 | 1,030,910 | ||||||||||||||
85,000 | Illinois Finance Authority, Revenue Bonds2,3 | 07/15/57 | 5.000 | 94,431 | ||||||||||||||
195,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/21 | 5.250 | 207,790 | ||||||||||||||
1,440,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/22 | 5.000 | 1,566,490 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 7 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Illinois (continued) | ||||||||||||||||||
$2,680,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/24 | 5.000 | % | $ | 3,047,964 | ||||||||||||
3,710,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/27 | 5.000 | 4,360,808 | ||||||||||||||
205,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds | 06/01/28 | 5.000 | 239,993 | ||||||||||||||
Total Illinois | 11,706,158 | |||||||||||||||||
Indiana (0.9%) | ||||||||||||||||||
2,700,000 | City of Rockport, Revenue Bonds | 06/01/25 | 3.050 | 2,769,228 | ||||||||||||||
100,000 | Indiana Bond Bank, Revenue Bonds (3-Month USD-LIBOR + 0.970%)2 | 10/15/22 | 2.710 | 100,012 | ||||||||||||||
Total Indiana | 2,869,240 | |||||||||||||||||
Iowa (0.3%) | ||||||||||||||||||
925,000 | Iowa Finance Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/46 | 4.000 | 962,083 | ||||||||||||||
Total Iowa | 962,083 | |||||||||||||||||
Kentucky (1.6%) | ||||||||||||||||||
4,880,000 | Kentucky Public Energy Authority, Revenue Bonds2,3 | 12/01/49 | 4.000 | 5,319,834 | ||||||||||||||
Total Kentucky | 5,319,834 | |||||||||||||||||
Louisiana (0.0%) | ||||||||||||||||||
25,000 | Tobacco Settlement Financing Corp., Revenue Bonds | 05/15/22 | 5.000 | 27,099 | ||||||||||||||
Total Louisiana | 27,099 | |||||||||||||||||
Maryland (0.5%) | ||||||||||||||||||
1,125,000 | County of Baltimore, General Obligation Bonds | 02/01/26 | 5.000 | 1,359,563 | ||||||||||||||
135,000 | State of Maryland, General Obligation Bonds | 08/01/24 | 5.000 | 157,580 | ||||||||||||||
Total Maryland | 1,517,143 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Massachusetts (7.4%) | ||||||||||||||||||
$ 495,000 | Commonwealth of Massachusetts, General Obligation Bonds, AGM2,3 | 11/01/19 | 2.400 | % | $ | 496,099 | ||||||||||||
1,525,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM2,3 | 06/01/22 | 3.170 | 1,579,992 | ||||||||||||||
3,905,000 | Commonwealth of Massachusetts, General Obligation Bonds (3-Month USD-LIBOR + 0.550%)2 | 11/01/25 | 2.383 | 3,898,088 | ||||||||||||||
4,525,000 | Commonwealth of Massachusetts, General Obligation Bonds | 07/01/26 | 5.000 | 5,516,744 | ||||||||||||||
1,200,000 | Commonwealth of Massachusetts, General Obligation Bonds | 09/01/26 | 5.000 | 1,467,756 | ||||||||||||||
5,000,000 | Massachusetts Clean Water Trust, Revenue Bonds2,3 | 08/01/23 | 2.029 | 5,148,750 | ||||||||||||||
135,000 | Massachusetts Development Finance Agency, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.480%)2 | 07/01/50 | 2.780 | 135,003 | ||||||||||||||
1,400,000 | Massachusetts Health & Educational Facilities Authority, Revenue Bonds4 | 05/01/19 | 2.200 | 1,400,000 | ||||||||||||||
2,200,000 | Massachusetts Health & Educational Facilities Authority, Revenue Bonds4 | 05/01/19 | 2.200 | 2,200,000 | ||||||||||||||
1,000,000 | Massachusetts Housing Finance Agency, Revenue Bonds | 12/01/21 | 2.500 | 1,006,770 | ||||||||||||||
1,680,000 | Massachusetts Housing Finance Agency, Revenue Bonds | 12/01/46 | 3.500 | 1,726,687 | ||||||||||||||
Total Massachusetts | 24,575,889 | |||||||||||||||||
Michigan (3.0%) | ||||||||||||||||||
1,200,000 | Detroit City School District, General Obligation Bonds | 05/01/19 | 5.000 | 1,200,000 | ||||||||||||||
420,000 | Detroit City School District, General Obligation Bonds | 05/01/23 | 5.000 | 457,351 | ||||||||||||||
105,000 | Detroit City School District, General Obligation Bonds, BHAC, FGIC | 05/01/25 | 5.250 | 116,332 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 9 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Michigan (continued) | ||||||||||||||||||
$ 90,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/27 | 5.250 | % | $ | 108,808 | ||||||||||||
350,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/29 | 6.000 | 426,107 | ||||||||||||||
1,540,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/30 | 5.250 | 1,932,007 | ||||||||||||||
3,240,000 | Detroit City School District, General Obligation Bonds, AGM | 05/01/32 | 5.250 | 4,075,369 | ||||||||||||||
150,000 | Michigan Finance Authority, Revenue Bonds | 05/01/19 | 5.000 | 150,000 | ||||||||||||||
1,195,000 | Michigan Finance Authority, Revenue Bonds | 05/01/28 | 5.000 | 1,384,850 | ||||||||||||||
Total Michigan | 9,850,824 | |||||||||||||||||
Minnesota (2.7%) | ||||||||||||||||||
710,000 | Minnesota Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 01/01/27 | 3.350 | 735,503 | ||||||||||||||
960,000 | Minnesota Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/27 | 3.400 | 996,393 | ||||||||||||||
1,993,517 | Minnesota Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 01/01/49 | 3.600 | 2,036,737 | ||||||||||||||
4,993,868 | Minnesota Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 03/01/49 | 3.450 | 5,070,374 | ||||||||||||||
Total Minnesota | 8,839,007 | |||||||||||||||||
Montana (0.5%) | ||||||||||||||||||
1,500,000 | Montana Board of Housing, Revenue Bonds | 12/01/43 | 4.000 | 1,588,065 | ||||||||||||||
Total Montana | 1,588,065 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Nebraska (3.1%) | ||||||||||||||||||
$2,505,000 | Central Plains Energy Project, Revenue Bonds | 09/01/27 | 5.000 | % | $ | 2,710,535 | ||||||||||||
3,555,000 | Central Plains Energy Project, Revenue Bonds2,3 | 03/01/50 | 5.000 | 3,947,366 | ||||||||||||||
3,360,000 | Nebraska Investment Finance Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 09/01/49 | 4.000 | 3,586,027 | ||||||||||||||
Total Nebraska | 10,243,928 | |||||||||||||||||
New Hampshire (0.3%) | ||||||||||||||||||
1,000,000 | New Hampshire Business Finance Authority, Revenue Bonds | 08/01/24 | 3.125 | 1,025,170 | ||||||||||||||
Total New Hampshire | 1,025,170 | |||||||||||||||||
New Jersey (7.0%) | ||||||||||||||||||
1,420,000 | Holmdel Township School District, General Obligation Bonds | 02/01/27 | 3.250 | 1,528,744 | ||||||||||||||
2,055,000 | Mount Laurel Township Board of Education, General Obligation Bonds | 09/01/22 | 2.500 | 2,075,632 | ||||||||||||||
2,075,000 | Mount Laurel Township Board of Education, General Obligation Bonds | 09/01/23 | 2.500 | 2,098,676 | ||||||||||||||
1,630,000 | Mount Laurel Township Board of Education, General Obligation Bonds | 09/01/24 | 2.500 | 1,651,956 | ||||||||||||||
3,610,000 | New Jersey Economic Development Authority, Revenue Bonds (SIFMA Municipal Swap Index Yield + 1.550%)2 | 09/01/27 | 3.850 | 3,593,863 | ||||||||||||||
3,540,000 | New Jersey Economic Development Authority, Revenue Bonds (SIFMA Municipal Swap Index Yield + 1.600%)2 | 03/01/28 | 3.900 | 3,527,398 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 11 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New Jersey (continued) | ||||||||||||||||||
$1,240,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/20 | 5.000 | % | $ | 1,290,828 | ||||||||||||
555,000 | New Jersey Transit Corp., Revenue Bonds | 09/15/21 | 5.000 | 592,845 | ||||||||||||||
2,840,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds1 | 12/15/26 | 0.000 | 2,241,129 | ||||||||||||||
3,480,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds1 | 12/15/30 | 0.000 | 2,298,749 | ||||||||||||||
2,550,000 | New Jersey Turnpike Authority, Revenue Bonds (1-Month USD-LIBOR + 0.750%)2 | 01/01/30 | 2.501 | 2,566,983 | ||||||||||||||
Total New Jersey | 23,466,803 | |||||||||||||||||
New Mexico (0.7%) | ||||||||||||||||||
2,015,000 | New Mexico Mortgage Finance Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 01/01/49 | 4.000 | 2,144,242 | ||||||||||||||
300,000 | New Mexico Municipal Energy Acquisition Authority, Revenue Bonds (1-Month USD-LIBOR + 0.750%)2 | 11/01/39 | 2.426 | 300,072 | ||||||||||||||
Total New Mexico | 2,444,314 | |||||||||||||||||
New York (4.1%) | ||||||||||||||||||
5,000,000 | Metropolitan Transportation Authority, Revenue Bonds (1-Month USD-LIBOR + 0.820%)2 | 11/01/26 | 2.496 | 5,016,250 | ||||||||||||||
1,965,000 | Metropolitan Transportation Authority, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.450%)2 | 11/01/26 | 2.750 | 1,953,780 | ||||||||||||||
5,050,000 | New York State Energy Research & Development Authority, Revenue Bonds2,3 | 07/01/26 | 2.375 | 5,084,895 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
New York (continued) | ||||||||||||||||||
$1,000,000 | New York State Energy Research & Development Authority, Revenue Bonds2,3 | 06/01/29 | 2.000 | % | $ | 1,003,330 | ||||||||||||
660,000 | Triborough Bridge & Tunnel Authority, Revenue Bonds (1-Month USD-LIBOR + 0.500%)2 | 11/15/27 | 2.176 | 661,901 | ||||||||||||||
Total New York | 13,720,156 | |||||||||||||||||
North Carolina (2.8%) | ||||||||||||||||||
100,000 | Charlotte-Mecklenburg Hospital Authority, Revenue Bonds4 | 05/01/19 | 2.300 | 100,000 | ||||||||||||||
1,000,000 | Charlotte-Mecklenburg Hospital Authority, Revenue Bonds4 | 05/01/19 | 2.300 | 1,000,000 | ||||||||||||||
1,725,000 | County of Wake, General Obligation Bonds | 03/01/24 | 5.000 | 1,993,393 | ||||||||||||||
965,000 | North Carolina Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 01/01/23 | 2.750 | 980,546 | ||||||||||||||
980,000 | North Carolina Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 07/01/23 | 2.800 | 997,503 | ||||||||||||||
1,570,000 | State of North Carolina, General Obligation Bonds | 06/01/24 | 5.000 | 1,824,983 | ||||||||||||||
2,000,000 | State of North Carolina, General Obligation Bonds | 06/01/27 | 5.000 | 2,485,940 | ||||||||||||||
Total North Carolina | 9,382,365 | |||||||||||||||||
Ohio (6.5%) | ||||||||||||||||||
3,695,000 | Lancaster Port Authority, Revenue Bonds (1-Month USD-LIBOR + 0.720%)2 | 05/01/38 | 2.396 | 3,695,739 | ||||||||||||||
2,200,000 | Ohio Higher Educational Facility Commission, Revenue Bonds4 | 05/01/19 | 2.280 | 2,200,000 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 13 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Ohio (continued) | ||||||||||||||||||
$5,235,000 | Ohio Housing Finance Agency, Revenue Bonds, FHLMC, FNMA, GNMA | 03/01/47 | 4.000 | % | $ | 5,488,950 | ||||||||||||
2,500,000 | Ohio Water Development Authority, Revenue Bonds | 06/01/28 | 5.000 | 3,163,300 | ||||||||||||||
2,195,000 | State of Ohio, General Obligation Bonds | 08/01/25 | 5.000 | 2,618,657 | ||||||||||||||
1,000,000 | State of Ohio, Revenue Bonds | 04/01/29 | 5.000 | 1,166,120 | ||||||||||||||
3,270,000 | State of Ohio, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.400%)2,5 | 01/01/52 | 0.000 | 3,270,000 | ||||||||||||||
Total Ohio | 21,602,766 | |||||||||||||||||
Oklahoma (0.6%) | ||||||||||||||||||
2,000,000 | Oklahoma Turnpike Authority, Revenue Bonds | 01/01/33 | 3.750 | 2,112,880 | ||||||||||||||
Total Oklahoma | 2,112,880 | |||||||||||||||||
Oregon (3.9%) | ||||||||||||||||||
1,020,000 | Clackamas County School District No 115, General Obligation Bonds1 | 06/15/27 | 0.000 | 839,501 | ||||||||||||||
1,670,000 | Lane County School District No 1 Pleasant Hill, General Obligation Bonds1 | 06/15/27 | 0.000 | 1,377,783 | ||||||||||||||
1,000,000 | Multnomah & Clackamas Counties School District No 10JT Gresham-Barlow, General Obligation Bonds1 | 06/15/32 | 0.000 | 656,040 | ||||||||||||||
3,805,000 | Salem-Keizer School District No 24J, General Obligation Bonds1 | 06/15/25 | 0.000 | 3,351,901 | ||||||||||||||
4,275,000 | Salem-Keizer School District No 24J, General Obligation Bonds1 | 06/15/26 | 0.000 | 3,668,506 | ||||||||||||||
2,225,000 | Washington & Multnomah Counties School District No 48J Beaverton, General Obligation Bonds1 | 06/15/33 | 0.000 | 1,359,319 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Oregon (continued) | ||||||||||||||||||
$1,500,000 | Washington Clackamas & Yamhill Counties School District No 88J, General Obligation Bonds1 | 06/15/31 | 0.000 | % | $ | 1,029,330 | ||||||||||||
1,055,000 | Washington Clackamas & Yamhill Counties School District No 88J, General Obligation Bonds1 | 06/15/33 | 0.000 | 661,791 | ||||||||||||||
Total Oregon | 12,944,171 | |||||||||||||||||
Pennsylvania (5.0%) | ||||||||||||||||||
150,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/22 | 5.000 | 161,334 | ||||||||||||||
85,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC | 01/01/23 | 5.000 | 93,588 | ||||||||||||||
6,000,000 | Geisinger Authority, Revenue Bonds (1-Month USD-LIBOR + 1.070%)2 | 06/01/28 | 2.731 | 6,106,500 | ||||||||||||||
1,900,000 | Hospitals & Higher Education Facilities Authority of Philadelphia, Revenue Bonds4 | 05/01/19 | 2.290 | 1,900,000 | ||||||||||||||
390,000 | Pennsylvania Economic Development Financing Authority, Revenue Bonds2,3 | 07/01/41 | 2.250 | 390,207 | ||||||||||||||
2,700,000 | Pennsylvania Turnpike Commission, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.980%)2 | 12/01/21 | 3.280 | 2,725,218 | ||||||||||||||
360,000 | School District of Philadelphia, General Obligation Bonds, AGM, FGIC | 06/01/24 | 5.000 | 400,532 | ||||||||||||||
580,000 | School District of Philadelphia, General Obligation Bonds | 09/01/26 | 5.000 | 680,207 | ||||||||||||||
1,600,000 | School District of Philadelphia, General Obligation Bonds | 09/01/28 | 5.000 | 1,920,976 | ||||||||||||||
1,000,000 | State Public School Building Authority, Revenue Bonds | 04/01/25 | 5.000 | 1,071,970 | ||||||||||||||
1,100,000 | State Public School Building Authority, Revenue Bonds, AGM | 06/01/32 | 5.000 | 1,277,496 | ||||||||||||||
Total Pennsylvania | 16,728,028 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 15 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
South Dakota (3.0%) | ||||||||||||||||||
$1,410,000 | Educational Enhancement Funding Corp., Revenue Bonds | 06/01/25 | 5.000 | % | $ | 1,560,856 | ||||||||||||
1,500,000 | South Dakota Housing Development Authority, Revenue Bonds, FHLMC, FNMA, GNMA | 11/01/32 | 3.400 | 1,538,475 | ||||||||||||||
3,250,000 | South Dakota Housing Development Authority, Revenue Bonds | 11/01/33 | 3.850 | 3,431,090 | ||||||||||||||
3,170,000 | South Dakota Housing Development Authority, Revenue Bonds | 11/01/48 | 4.500 | 3,456,156 | ||||||||||||||
Total South Dakota | 9,986,577 | |||||||||||||||||
Tennessee (2.6%) | ||||||||||||||||||
2,485,000 | Clarksville Natural Gas Acquisition Corp., Revenue Bonds | 12/15/21 | 5.000 | 2,662,503 | ||||||||||||||
3,000,000 | Tennergy Corp., Revenue Bonds2,3 | 02/01/50 | 5.000 | 3,429,840 | ||||||||||||||
885,000 | Tennessee Housing Development Agency, Revenue Bonds | 07/01/45 | 4.000 | 919,002 | ||||||||||||||
1,605,000 | Tennessee Housing Development Agency, Revenue Bonds | 01/01/47 | 3.500 | 1,653,792 | ||||||||||||||
Total Tennessee | 8,665,137 | |||||||||||||||||
Texas (8.2%) | ||||||||||||||||||
1,100,000 | Allen Independent School District, General Obligation Bonds | 02/15/25 | 5.000 | 1,293,039 | ||||||||||||||
1,000,000 | Allen Independent School District, General Obligation Bonds1 | 02/15/28 | 0.000 | 750,040 | ||||||||||||||
660,000 | City of Houston Airport System, Revenue Bonds | 07/01/24 | 5.000 | 754,716 | ||||||||||||||
1,170,000 | City of Houston Airport System, Revenue Bonds | 07/01/25 | 5.000 | 1,365,612 | ||||||||||||||
1,025,000 | Dallas Love Field, Revenue Bonds | 11/01/25 | 5.000 | 1,205,636 | ||||||||||||||
1,000,000 | Hays Consolidated Independent School District, General Obligation Bonds | 02/15/27 | 5.000 | 1,219,850 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Texas (continued) | ||||||||||||||||||
$3,455,000 | Leander Independent School District, General Obligation Bonds1 | 08/15/29 | 0.000 | % | $ | 2,417,498 | ||||||||||||
1,000,000 | State of Texas, General Obligation Bonds | 08/01/26 | 5.000 | 1,197,060 | ||||||||||||||
2,500,000 | Texas Department of Housing & Community Affairs, Revenue Bonds, GNMA | 09/01/33 | 3.350 | 2,512,025 | ||||||||||||||
400,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/19 | 5.250 | 408,380 | ||||||||||||||
795,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/20 | 5.250 | 835,887 | ||||||||||||||
500,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/21 | 5.250 | 539,015 | ||||||||||||||
4,440,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds (3-Month USD-LIBOR + 0.700%)2 | 12/15/26 | 2.449 | 4,420,420 | ||||||||||||||
2,455,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds | 12/15/26 | 6.250 | 2,845,836 | ||||||||||||||
650,000 | Texas Municipal Gas Acquisition & Supply Corp. II, Revenue Bonds (3-Month USD-LIBOR + 0.870%)2 | 09/15/27 | 2.619 | 647,257 | ||||||||||||||
4,830,000 | Texas Municipal Gas Acquisition & Supply Corp. II, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.550%)2 | 09/15/27 | 2.850 | 4,745,427 | ||||||||||||||
Total Texas | 27,157,698 | |||||||||||||||||
Virginia (5.1%) | ||||||||||||||||||
1,755,000 | City of Virginia Beach, General Obligation Bonds | 04/01/25 | 5.000 | 2,082,097 | ||||||||||||||
2,005,000 | County of Arlington, General Obligation Bonds | 08/15/25 | 5.000 | 2,402,010 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 17 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Virginia (continued) | ||||||||||||||||||
$1,215,000 | County of Arlington, General Obligation Bonds | 08/15/30 | 2.500 | % | $ | 1,216,421 | ||||||||||||
6,040,000 | Virginia College Building Authority, Revenue Bonds | 09/01/27 | 5.000 | 7,505,546 | ||||||||||||||
2,300,000 | Virginia Housing Development Authority, Revenue Bonds | 01/01/23 | 2.740 | 2,375,233 | ||||||||||||||
1,205,000 | Virginia Public School Authority, Revenue Bonds | 08/01/26 | 5.000 | 1,467,823 | ||||||||||||||
Total Virginia | 17,049,130 | |||||||||||||||||
Washington (2.3%) | ||||||||||||||||||
500,000 | Port of Seattle, Revenue Bonds | 06/01/23 | 5.000 | 557,360 | ||||||||||||||
425,000 | Port of Seattle, Revenue Bonds | 06/01/27 | 3.750 | 445,974 | ||||||||||||||
1,050,000 | State of Washington, General Obligation Bonds | 08/01/26 | 5.000 | 1,279,015 | ||||||||||||||
1,320,000 | State of Washington, General Obligation Bonds, NPFG1 | 06/01/30 | 0.000 | 999,689 | ||||||||||||||
335,000 | Washington State Housing Finance Commission, Revenue Bonds | 06/01/44 | 3.500 | 341,368 | ||||||||||||||
4,000,000 | Washington State Housing Finance Commission, Revenue Bonds (SIFMA Municipal Swap Index Yield + 0.550%)2 | 12/01/48 | 2.850 | 4,000,600 | ||||||||||||||
Total Washington | 7,624,006 | |||||||||||||||||
Wisconsin (0.6%) | ||||||||||||||||||
300,000 | County of Milwaukee Airport, Revenue Bonds | 12/01/28 | 5.250 | 336,885 | ||||||||||||||
1,800,000 | Public Finance Authority, Revenue Bonds2,3 | 07/01/29 | 2.000 | 1,796,004 | ||||||||||||||
Total Wisconsin | 2,132,889 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
MUNICIPAL BONDS (continued) | ||||||||||||||||||
Wyoming (0.5%) | ||||||||||||||||||
$1,455,000 | Wyoming Community Development Authority, Revenue Bonds | 12/01/43 | 4.000 | % | $ | 1,525,873 | ||||||||||||
Total Wyoming | 1,525,873 | |||||||||||||||||
Total Municipal Bonds (Identified cost $326,323,814) | 334,772,606 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $326,323,814)6 | 100.6 | % | $ | 334,772,606 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (0.6 | )% | (2,023,835 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 332,748,771 |
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, 2019 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, 2019. |
5 | Represent a security purchased on a when-issued basis. |
6 | The aggregate cost for federal income tax purposes is $326,323,814, the aggregate gross unrealized appreciation is $8,504,226 and the aggregate gross unrealized depreciation is $55,434, resulting in net unrealized appreciation of $8,448,792. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 19 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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 INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 | ||||||||||||||
Municipal Bonds** | $ | – | $ | 334,772,606 | $ | – | $ | 334,772,606 | ||||||||||
Investments, at value | $ | – | $ | 334,772,606 | $ | – | $ | 334,772,606 |
* | 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, 2019. |
** | For geographical breakdown of municipal bond investments, refer to the Portfolio of Investments. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 21 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2019 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $326,323,814) | $ | 334,772,606 | ||||
Cash | 180,617 | |||||
Receivables for: | ||||||
Interest | 2,779,366 | |||||
Shares sold | 221,752 | |||||
Investment advisory and administrative fee waiver reimbursement | 2,874 | |||||
Prepaid assets | 19,990 | |||||
Total Assets | 337,977,205 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 4,836,532 | |||||
Investment advisory and administrative fees | 208,391 | |||||
Shares redeemed | 78,546 | |||||
Professional fees | 47,211 | |||||
Periodic distributions | 20,444 | |||||
Shareholder servicing fees | 14,110 | |||||
Custody and fund accounting fees | 8,107 | |||||
Transfer agent fees | 4,270 | |||||
Board of Trustees’ fees | 2,019 | |||||
Accrued expenses and other liabilities | 8,804 | |||||
Total Liabilities | 5,228,434 | |||||
NET ASSETS | $ | 332,748,771 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 322,975,127 | ||||
Retained earnings | 9,773,644 | |||||
Net Assets | $ | 332,748,771 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS N SHARES | ||||||
($46,208,521 ÷ 4,386,459 shares outstanding) | $10.53 | |||||
CLASS I SHARES | ||||||
($286,540,250 ÷ 27,223,457 shares outstanding) | $10.53 |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2019 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest income | $ | 3,834,803 | ||||
Total Income | 3,834,803 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 561,718 | |||||
Shareholder servicing fees | 38,628 | |||||
Professional fees | 36,103 | |||||
Custody and fund accounting fees | 34,823 | |||||
Board of Trustees’ fees | 24,139 | |||||
Transfer agent fees | 19,475 | |||||
Registration fees | 18,773 | |||||
Miscellaneous expenses | 20,388 | |||||
Total Expenses | 754,047 | |||||
Investment advisory and administrative fee waiver | (31,463 | ) | ||||
Expense offset arrangement | (2,434 | ) | ||||
Net Expenses | 720,150 | |||||
Net Investment Income | 3,114,653 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 1,305,883 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 9,463,950 | |||||
Net Realized and Unrealized Gain | 10,769,833 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 13,884,486 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 23 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2019 (unaudited) | For the year ended October 31, 2018 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 3,114,653 | $ | 2,654,004 | ||||||
Net realized gain on investments in securities | 1,305,883 | 357,138 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 9,463,950 | (3,126,201 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 13,884,486 | (115,059 | ) | |||||||
Dividends and distributions declared: | ||||||||||
Class N | (425,422 | ) | (666,803 | ) | ||||||
Class I | (2,919,375 | ) | (2,793,710 | ) | ||||||
Total dividends and distributions declared | (3,344,797 | ) | (3,460,513 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares* | 173,446,844 | 128,717,128 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 938,012 | 1,631,088 | ||||||||
Proceeds from short-term redemption fees | 425 | 296 | ||||||||
Cost of shares redeemed* | (15,307,622 | ) | (51,131,375 | ) | ||||||
Net increase in net assets resulting from share transactions | 159,077,659 | 79,217,137 | ||||||||
Total increase in net assets | 169,617,348 | 75,641,565 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 163,131,423 | 87,489,858 | ||||||||
End of period | $ | 332,748,771 | $ | 163,131,423 |
* | Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each period.
For the years ended October 31, | ||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.15 | $ | 10.48 | $ | 10.56 | $ | 10.29 | $ | 10.30 | $ | 10.00 | ||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||
Net investment income1 | 0.11 | 0.21 | 0.22 | 0.18 | 0.15 | 0.09 | ||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.38 | (0.23 | ) | 0.11 | 0.29 | 0.08 | 0.29 | |||||||||||||||||||
Total income (loss) from investment operations | 0.49 | (0.02 | ) | 0.33 | 0.47 | 0.23 | 0.38 | |||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.21 | ) | (0.26 | ) | (0.18 | ) | (0.16 | ) | (0.08 | ) | ||||||||||||||
From net realized gains | (0.01 | ) | (0.10 | ) | (0.15 | ) | (0.02 | ) | (0.08 | ) | – | |||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.31 | ) | (0.41 | ) | (0.20 | ) | (0.24 | ) | (0.08 | ) | ||||||||||||||
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 | $ | 10.53 | $ | 10.15 | $ | 10.48 | $ | 10.56 | $ | 10.29 | $ | 10.30 | ||||||||||||||
Total return | 4.86 | %3 | (0.26 | )% | 3.20 | % | 4.64 | % | 2.29 | % | 3.82 | %3 | ||||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||||
Net assets, end of period (in millions) | $46 | $34 | $16 | $23 | $26 | $1 | ||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.78 | %4 | 0.91 | % | 1.05 | % | 1.03 | % | 1.10 | % | 8.78 | %5 | ||||||||||||||
Fee waiver | 0.13 | %4,6 | 0.26 | %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 | %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 | % | 0.65 | %5 | ||||||||||||||
Ratio of net investment income to average net assets | 2.08 | %4 | 2.07 | % | 2.16 | % | 1.73 | % | 1.43 | % | 1.43 | %5 | ||||||||||||||
Portfolio turnover rate | 83 | %3 | 146 | % | 125 | % | 77 | % | 142 | % | 91 | %3 | ||||||||||||||
Portfolio turnover rate8 | 25 | %3 | 52 | % | 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, 2019, the years ended October 31, 2018, 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 February 29, 2020, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2019, the years ended October 31, 2018, 2017, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $24,855, $63,024, $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.
financial statements april 30, 2019 | 25 |
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 years ended October 31, | ||||||||||||||||||||||||||
For the six months ended April 30, 2019 (unaudited) | 2018 | 2017 | 2016 | 2015 | For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.14 | $ | 10.47 | $ | 10.55 | $ | 10.28 | $ | 10.30 | $ | 10.00 | ||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||
Net investment income1 | 0.12 | 0.23 | 0.25 | 0.20 | 0.18 | 0.09 | ||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.39 | (0.24 | ) | 0.09 | 0.29 | 0.06 | 0.30 | |||||||||||||||||||
Total income (loss) from investment operations | 0.51 | (0.01 | ) | 0.34 | 0.49 | 0.24 | 0.39 | |||||||||||||||||||
Less dividends and distributions: | ||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.22 | ) | (0.27 | ) | (0.20 | ) | (0.18 | ) | (0.09 | ) | ||||||||||||||
From net realized gains | (0.01 | ) | (0.10 | ) | (0.15 | ) | (0.02 | ) | (0.08 | ) | – | |||||||||||||||
Total dividends and distributions | (0.12 | ) | (0.32 | ) | (0.42 | ) | (0.22 | ) | (0.26 | ) | (0.09 | ) | ||||||||||||||
Short-term redemption fees1 | 0.00 | 2 | — | �� | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | – | |||||||||||||||
Net asset value, end of period | $ | 10.53 | $ | 10.14 | $ | 10.47 | $ | 10.55 | $ | 10.28 | $ | 10.30 | ||||||||||||||
Total return | 5.04 | %3 | (0.12 | )% | 3.36 | % | 4.80 | % | 2.33 | % | 3.89 | %3 | ||||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||||
Net assets, end of period (in millions) | $287 | $129 | $71 | $66 | $66 | $52 | ||||||||||||||||||||
Ratio of expenses to average net assets before reductions | 0.50 | %4 | 0.62 | % | 0.69 | % | 0.68 | % | 0.78 | % | 0.88 | %5 | ||||||||||||||
Fee waiver | 0.01 | %4,6 | 0.12 | %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 | %7 | 0.00 | %5,7 | ||||||||||||||
Ratio of expenses to average net assets after reductions | 0.49 | %4 | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | %5 | ||||||||||||||
Ratio of net investment income to average net assets | 2.24 | %4 | 2.23 | % | 2.46 | % | 1.88 | % | 1.72 | % | 1.49 | %5 | ||||||||||||||
Portfolio turnover rate | 83 | %3 | 146 | % | 125 | % | 77 | % | 142 | % | 91 | %3 | ||||||||||||||
Portfolio turnover rate8 | 25 | %3 | 52 | % | 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, 2019, the years ended October 31, 2018, 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 February 29, 2020, unless it is renewed by all parties to the agreement. For the six months ended April 30, 2019, the years ended October 31, 2018, 2017, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $6,608, $111,441, $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.
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2019 (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, 2019, there were seven 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 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. |
financial statements april 30, 2019 | 27 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 on a net assets basis. 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 between paid-in capital and retained earnings/(accumulated deficit) within the Statement of Assets and 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 are declared daily and paid monthly to shareholders. 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 and distributions in the amount of $425,422 and $2,919,375 to Class N and Class I shareholders, respectively, during the six months ended April 30, 2019. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purpose. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
Distributions paid from: | ||||||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax exempt income | Tax return of capital | Total distributions paid | |||||||||||||||||||||||
2018: | $ | 137,628 | $ | 698,195 | $ | 835,823 | $ | 2,624,690 | $ | – | $ | 3,460,513 | ||||||||||||||||
2017: | 795,101 | 705,293 | 1,500,394 | 1,839,910 | – | 3,340,304 |
Components of retained earnings/(accumulated deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Retained earnings/ (accumulated deficit) | Accumulated capital and other losses | Other book/tax temporary differences | Book unrealized appreciation/ (depreciation) | Total retained earnings/ (accumulated deficit) | ||||||||||||||||||||||||||
2018: | $ | – | $ | 251,888 | $ | 251,888 | $ | – | $ | (2,775 | ) | $ | (1,015,158 | ) | $ | (766,045 | ) | |||||||||||||||
2017: | 108,314 | 697,168 | 805,482 | – | – | 2,111,043 | 2,916,525 |
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. |
financial statements april 30, 2019 | 29 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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, 2019, the Fund incurred $561,718 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 February 29, 2020, 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, 2019, the Investment Adviser waived fees in the amount of $24,855 and $6,608 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, 2019, Class N shares of the Fund incurred $38,628 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, 2019, the Fund incurred $34,823 in custody and fund accounting fees. These fees for the Fund were reduced by $2,434 as a result of an expense offset arrangement with the Fund’s custodian, which expired on December 31, 2018. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Fund’s expenses. Upon the expiration of the expense offset arrangement, the Fund received interest income on cash balances held by the custodian at the BBH Base Rate. 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 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
investment rate on the day of the overdraft. The total interest incurred by the Fund for the six months ended April 30, 2019, was $1,743. 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, 2019, the Fund incurred $24,139 in independent Trustee compensation and reimbursements. |
F. | Officers of the Trust. Officers of the Trust are also employees of BBH. Officers are paid no fees by the Trust for their services to the Trust. |
4. | Investment Transactions. For the six months ended April 30, 2019, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, was $393,550,510 and $230,509,705, 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, 2019 (unaudited) | For the year ended October 31, 2018 | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class N | |||||||||||||||||||
Shares sold | 1,534,180 | $ | 15,926,656 | 2,386,419 | $ | 24,480,357 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 40,612 | 422,751 | 61,257 | 629,099 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 71 | N/A | 296 | |||||||||||||||
Shares redeemed | (567,649 | ) | (5,845,628 | ) | (592,779 | ) | (6,086,123 | ) | |||||||||||
Net increase | 1,007,143 | $ | 10,503,850 | 1,854,897 | $ | 19,023,629 | |||||||||||||
Class I | |||||||||||||||||||
Shares sold | 15,382,840 | $ | 157,520,188 | 10,188,802 | $ | 104,236,771 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 49,523 | 515,261 | 97,549 | 1,001,989 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 354 | N/A | – | |||||||||||||||
Shares redeemed | (917,650 | ) | (9,461,994 | ) | (4,405,710 | ) | (45,045,252 | ) | |||||||||||
Net increase | 14,514,713 | $ | 148,573,809 | 5,880,641 | $ | 60,193,508 |
financial statements april 30, 2019 | 31 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 2017-08”) 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 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU 2017-08 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. |
B. | ASU 2018-13. On August 28, 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”). ASU 2018-13 modifies the disclosure objective paragraphs of Accounting Standard Codification 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. ASU 2018-13 also eliminates and modifies other requirements under ASU 2018-13. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted and Management is currently evaluating the application of ASU 2018-13 and its impact, if any, on the Fund’s financial statements. |
financial statements april 30, 2019 | 33 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
8. | Subsequent Events. Management has evaluated events and transactions that have occurred since April 30, 2019 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, 2019 (unaudited)
financial statements april 30, 2019 | 35 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2019 (unaudited)
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class N | ||||||||||||||
Actual | $ | 1,000 | $ | 1,049 | $ | 3.30 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,022 | $ | 3.26 |
Beginning Account Value November 1, 2018 | Ending Account Value April 31, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,050 | $ | 2.49 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,022 | $ | 2.46 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.65% and 0.49% 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, 2019 (unaudited)
financial statements april 30, 2019 | 37 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
Board considered in making its determination to approve the continuance of the Agreement. No single factor reviewed by the Board was identified as the principal factor in determining whether to approve the 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 based on the comparative performance, expense information, the cost of the services provided, and the profits realized by the Investment Adviser.
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 39 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 41 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 43 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 45 |
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 |
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other Fund communications electronically from the Fund by calling 1-800-575-1265 or from your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund by calling 1-800-575-1265 or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper may apply to all funds in the fund complex or held with your financial intermediary.
BBH INCOME FUND
PORTFOLIO ALLOCATION
April 30, 2019 (unaudited)
U.S. $ Value | Percent of Net Assets | |||||||||
Asset Backed Securities | $ | 74,785,546 | 24.4 | % | ||||||
Commercial Mortgage Backed Securities | 15,875,122 | 5.2 | ||||||||
Corporate Bonds | 105,036,952 | 34.3 | ||||||||
Loan Participations and Assignments | 51,033,389 | 16.7 | ||||||||
Residential Mortgage Backed Securities | 1,207,142 | 0.4 | ||||||||
U.S. Government Agency Obligations | 8,300,000 | 2.7 | ||||||||
U.S. Inflation Linked Debt | 6,168,585 | 2.0 | ||||||||
U.S. Treasury Bonds and Notes | 46,663,820 | 15.3 | ||||||||
Liabilities in Excess of Other Assets | (3,096,825 | ) | (1.0 | ) | ||||||
NET ASSETS | $ | 305,973,731 | 100.0 | % |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (24.4%) | ||||||||||||||||||
$ 2,551,957 | ACC Trust 2019-11 | 05/20/22 | 3.750 | % | $ | 2,561,504 | ||||||||||||
1,371,768 | Adams Outdoor Advertising LP 2018-11 | 11/15/48 | 4.810 | 1,423,001 | ||||||||||||||
1,450,000 | ARI Fleet Lease Trust 2018-B1 | 08/16/27 | 3.220 | 1,457,075 | ||||||||||||||
1,350,000 | AXIS Equipment Finance Receivables VI LLC 2018-2A1 | 07/20/22 | 3.890 | 1,362,885 | ||||||||||||||
1,360,000 | Capital Auto Receivables Asset Trust 2018-21 | 02/22/21 | 3.020 | 1,362,050 | ||||||||||||||
1,073,376 | Cazenovia Creek Funding II LLC 2018-1A1 | 07/15/30 | 3.561 | 1,071,650 | ||||||||||||||
750,000 | CCG Receivables Trust 2018-21 | 12/15/25 | 3.090 | 752,165 | ||||||||||||||
2,000,000 | Delamare Cards MTN Issuer, Plc. 2018-1A (1-Month USD-LIBOR + 0.700%)1,2 | 11/19/25 | 3.187 | 1,994,179 | ||||||||||||||
2,000,000 | Drive Auto Receivables Trust 2018-5 | 10/15/22 | 3.340 | 2,009,999 | ||||||||||||||
2,561,688 | Drug Royalty III LP 1 2018-1A (3-Month USD-LIBOR + 1.600%)1,2 | 10/15/31 | 4.387 | 2,562,257 | ||||||||||||||
1,200,000 | Elm Trust 2018-2A1 | 10/20/27 | 4.605 | 1,214,954 | ||||||||||||||
190,000 | Elm Trust 2018-2A1 | 10/20/27 | 5.584 | 192,182 | ||||||||||||||
600,000 | Enterprise Fleet Financing LLC 2017-21 | 01/20/23 | 2.220 | 594,303 | ||||||||||||||
1,360,000 | Enterprise Fleet Financing LLC 2018-31 | 05/20/24 | 3.380 | 1,369,309 | ||||||||||||||
237,960 | Exeter Automobile Receivables Trust 2018-3A1 | 01/18/22 | 2.900 | 238,080 | ||||||||||||||
1,310,000 | FCI Funding LLC 2019-1A1 | 02/18/31 | 3.630 | 1,308,006 | ||||||||||||||
1,350,000 | Finance of America Structured Securities Trust 2018-HB11,2,3 | 09/25/28 | 3.774 | 1,351,656 | ||||||||||||||
2,100,000 | Ford Credit Floorplan Master Owner Trust A 2018-3 | 10/15/23 | 3.520 | 2,140,166 | ||||||||||||||
1,327,313 | Foursight Capital Automobile Receivables Trust 2018-21 | 04/15/22 | 3.320 | 1,332,012 | ||||||||||||||
2,700,000 | FREED ABS TRUST 2018-21 | 10/20/25 | 4.610 | 2,748,683 | ||||||||||||||
1,000,000 | GM Financial Consumer Automobile Receivables Trust 2017-2A1 | 11/16/22 | 2.070 | 989,400 | ||||||||||||||
1,390,000 | Hercules Capital Funding Trust 2018-1A1 | 11/22/27 | 4.605 | 1,419,037 | ||||||||||||||
2,340,000 | Hercules Capital Funding Trust 2019-1A1 | 02/20/28 | 4.703 | 2,360,776 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 3 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 600,000 | Hertz Vehicle Financing II LP 2016-3A1 | 07/25/20 | 2.270 | % | $ | 599,143 | ||||||||||||
1,070,000 | Hertz Vehicle Financing II LP 2019-1A1 | 03/25/23 | 4.100 | 1,084,893 | ||||||||||||||
300,000 | Lendmark Funding Trust 2017-2A1 | 05/20/26 | 2.800 | 298,312 | ||||||||||||||
586,755 | LIAS Administration Fee Issuer LLC 2018-1A | 07/25/48 | 5.956 | 603,165 | ||||||||||||||
205,000 | Mariner Finance Issuance Trust 2017-BA1 | 12/20/29 | 2.920 | 204,136 | ||||||||||||||
2,000,000 | Mariner Finance Issuance Trust 2018-AA1 | 11/20/30 | 4.200 | 2,035,625 | ||||||||||||||
300,000 | Nationstar HECM Loan Trust 2018-2A1,2,3 | 07/25/28 | 3.552 | 301,893 | ||||||||||||||
2,500,000 | Nationstar HECM Loan Trust 2018-3A1,2,3 | 11/25/28 | 3.903 | 2,531,460 | ||||||||||||||
730,511 | Newtek Small Business Loan Trust 2018-1 (1-Month USD-LIBOR + 1.700%)1,2 | 02/25/44 | 4.177 | 730,509 | ||||||||||||||
346,524 | Newtek Small Business Loan Trust 2018-1 (1-Month USD-LIBOR + 3.000%)1,2 | 02/25/44 | 5.477 | 346,523 | ||||||||||||||
300,000 | NextGear Floorplan Master Owner Trust 2017-1A1 | 04/18/22 | 2.540 | 299,139 | ||||||||||||||
1,370,000 | NextGear Floorplan Master Owner Trust 2018-2A1 | 10/15/23 | 3.690 | 1,394,269 | ||||||||||||||
600,000 | Ocwen Master Advance Receivables Trust Series 2018-T11 | 08/15/49 | 3.301 | 600,072 | ||||||||||||||
1,080,000 | OneMain Financial Issuance Trust 2019-1A1 | 02/14/31 | 3.480 | 1,089,679 | ||||||||||||||
300,000 | Oportun Funding IX LLC 2018-B1 | 07/08/24 | 3.910 | 301,949 | ||||||||||||||
2,660,000 | Oportun Funding X LLC 2018-C1 | 10/08/24 | 4.590 | 2,695,308 | ||||||||||||||
2,070,000 | Oportun Funding XII LLC 2018-D1 | 12/09/24 | 4.830 | 2,101,942 | ||||||||||||||
550,000 | OSCAR US Funding Trust IX LLC 2018-2A1 | 09/12/22 | 3.390 | 553,688 | ||||||||||||||
1,280,000 | Oxford Finance Funding LLC 2019-1A1 | 02/15/27 | 4.459 | 1,294,325 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) | ||||||||||||||||||
$ 1,520,000 | Palmer Square Loan Funding, Ltd. 2019-2A (3-Month USD-LIBOR + 2.250%)1,2 | 04/20/27 | 4.825 | % | $ | 1,520,000 | ||||||||||||
1,500,000 | PFS Financing Corp. 2018-F1 | 10/15/23 | 3.520 | 1,524,586 | ||||||||||||||
2,940,000 | Regional Management Issuance Trust 2018-21 | 01/18/28 | 4.940 | 2,984,794 | ||||||||||||||
2,500,000 | RMF Buyout Issuance Trust 2018-11,2,3 | 11/25/28 | 3.912 | 2,517,401 | ||||||||||||||
720,000 | SPS Servicer Advance Receivables Trust Advance Receivables Backed Notes 2018-T11 | 10/17/50 | 3.620 | 725,124 | ||||||||||||||
2,226,283 | Stack Infrastructure Issuer LLC Series 2019-1A1 | 02/25/44 | 4.540 | 2,274,634 | ||||||||||||||
600,000 | SWC Funding LLC 2018-1A1,4 | 08/15/33 | 4.750 | 607,798 | ||||||||||||||
1,400,000 | Synchrony Card Issuance Trust 2018-A1 | 09/15/24 | 3.380 | 1,425,718 | ||||||||||||||
1,400,000 | Trafigura Securitisation Finance, Plc. 2018-1A1 | 03/15/22 | 3.730 | 1,412,410 | ||||||||||||||
118,515 | United Auto Credit Securitization Trust 2018-21 | 03/10/21 | 2.890 | 118,529 | ||||||||||||||
833,733 | Veros Automobile Receivables Trust 2018-11 | 05/15/23 | 3.630 | 835,317 | ||||||||||||||
1,400,000 | World Financial Network Credit Card Master Trust 2018-B | 07/15/25 | 3.460 | 1,423,474 | ||||||||||||||
2,500,000 | World Financial Network Credit Card Master Trust 2019-A | 12/15/25 | 3.140 | 2,528,657 | ||||||||||||||
2,000,000 | World Omni Select Auto Trust 2018-1A1 | 04/15/22 | 3.240 | 2,005,745 | ||||||||||||||
Total Asset Backed Securities (Identified cost $74,040,383) | 74,785,546 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 5 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (5.2%) | ||||||||||||||||||
$ 786,000 | CG-CCRE Commercial Mortgage Trust 2014-FL2 (1-Month USD-LIBOR + 4.000%)1,2 | 11/15/31 | 6.473 | % | $ | 781,676 | ||||||||||||
146,085 | CG-CCRE Commercial Mortgage Trust 2014-FL2 (1-Month USD-LIBOR + 4.000%)1,2 | 11/15/31 | 6.473 | 144,895 | ||||||||||||||
600,000 | CGMS Commercial Mortgage Trust 2017-MDRB (1-Month USD-LIBOR + 1.750%)1,2 | 07/15/30 | 4.223 | 600,181 | ||||||||||||||
890,000 | Citigroup Commercial Mortgage Trust 2019-SMRT1 | 01/10/24 | 4.149 | 935,119 | ||||||||||||||
3,540,000 | CSMC 2018-SITE1,2,3 | 04/15/36 | 4.941 | 3,647,506 | ||||||||||||||
300,000 | Hospitality Mortgage Trust 2017-HIT (1-Month USD-LIBOR + 0.850%)1,2 | 05/08/30 | 3.324 | 299,811 | ||||||||||||||
1,000,000 | Hudsons Bay Simon JV Trust 2015-HB101,2,3 | 08/05/34 | 5.447 | 969,247 | ||||||||||||||
240,000 | JPMBB Commercial Mortgage Securities Trust 2014-C241,2,3 | 11/15/47 | 4.036 | 218,849 | ||||||||||||||
1,960,000 | KREF, Ltd. 2018-FL1 (1-Month USD-LIBOR + 1.100%)1,2 | 06/15/36 | 3.573 | 1,960,588 | ||||||||||||||
3,070,000 | Morgan Stanley Capital I, Inc. 2019-BPR (1-Month USD-LIBOR + 1.400%)1,2 | 05/15/36 | 3.900 | 3,089,832 | ||||||||||||||
921,704 | RETL 2019-RVP (1-Month USD-LIBOR + 1.150%)1,2 | 03/15/36 | 3.623 | 923,429 | ||||||||||||||
2,000,000 | TPG Real Estate Finance Issuer, Ltd. 2018-FL2 (1-Month USD-LIBOR + 1.130%)1,2 | 11/15/37 | 3.603 | 2,000,000 | ||||||||||||||
300,000 | UBS-BAMLL Trust 2012-WRM1 | 06/10/30 | 3.663 | 303,989 | ||||||||||||||
Total Commercial Mortgage Backed Securities (Identified cost $15,664,943) | 15,875,122 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (34.3%) | ||||||||||||||||||
AEROSPACE/DEFENSE (0.4%) | ||||||||||||||||||
$ 1,320,000 | BAE Systems Holdings, Inc.1 | 10/07/24 | 3.800 | % | $ | 1,344,959 | ||||||||||||
AGRICULTURE (1.0%) | ||||||||||||||||||
3,025,000 | Bunge, Ltd. Finance Corp. | 03/15/24 | 4.350 | 3,075,633 | ||||||||||||||
AUTO MANUFACTURERS (0.4%) | ||||||||||||||||||
1,110,000 | Daimler Finance North America LLC1 | 02/12/21 | 2.300 | 1,097,797 | ||||||||||||||
BANKS (8.1%) | ||||||||||||||||||
2,300,000 | ANZ New Zealand Int’l, Ltd., London Branch1 | 01/25/22 | 2.875 | 2,291,506 | ||||||||||||||
1,155,000 | ANZ New Zealand Int’l, Ltd., London Branch1 | 03/19/24 | 3.400 | 1,167,196 | ||||||||||||||
2,100,000 | ASB Bank, Ltd.1 | 06/14/23 | 3.750 | 2,147,193 | ||||||||||||||
615,000 | Australia & New Zealand Banking Group, Ltd. | 05/19/22 | 2.625 | 611,813 | ||||||||||||||
1,365,000 | Bank of New Zealand1 | 02/20/24 | 3.500 | 1,385,956 | ||||||||||||||
1,330,000 | BB&T Corp. | 12/06/23 | 3.750 | 1,377,535 | ||||||||||||||
1,470,000 | BNP Paribas SA (3-Month USD-LIBOR + 2.235%)1,2 | 01/10/25 | 4.705 | 1,540,021 | ||||||||||||||
2,941,000 | BNZ International Funding, Ltd., London Branch1 | 03/01/23 | 3.375 | 2,969,137 | ||||||||||||||
535,000 | Capital One NA | 08/08/22 | 2.650 | 530,184 | ||||||||||||||
1,410,000 | DNB Bank ASA1 | 06/02/21 | 2.375 | 1,394,504 | ||||||||||||||
875,000 | Fifth Third Bancorp | 01/25/24 | 3.650 | 899,629 | ||||||||||||||
1,335,000 | Lloyds Banking Group, Plc. | 03/12/24 | 3.900 | 1,360,923 | ||||||||||||||
895,000 | PNC Financial Services Group, Inc. | 01/23/24 | 3.500 | 917,214 | ||||||||||||||
505,000 | Santander Holdings USA, Inc. | 12/03/21 | 4.450 | 521,693 | ||||||||||||||
810,000 | Santander Holdings USA, Inc. | 03/28/22 | 3.700 | 818,221 | ||||||||||||||
1,300,000 | Skandinaviska Enskilda Banken AB | 03/15/21 | 2.625 | 1,296,996 | ||||||||||||||
1,750,000 | Svenska Handelsbanken AB | 05/24/21 | 3.350 | 1,769,966 | ||||||||||||||
980,000 | Svenska Handelsbanken AB | 11/20/23 | 3.900 | 1,020,071 | ||||||||||||||
650,000 | Wells Fargo Bank NA | 01/15/21 | 2.600 | 648,632 | �� | |||||||||||||
24,668,390 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 7 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
BEVERAGES (0.5%) | ||||||||||||||||||
$ 1,310,000 | Anheuser-Busch InBev Worldwide, Inc. | 01/23/39 | 5.450 | % | $ | 1,428,202 | ||||||||||||
BIOTECHNOLOGY (1.4%) | ||||||||||||||||||
2,740,000 | Amgen, Inc. | 05/11/22 | 2.650 | 2,725,976 | ||||||||||||||
1,600,000 | Celgene Corp. | 02/20/23 | 3.250 | 1,609,950 | ||||||||||||||
4,335,926 | ||||||||||||||||||
CHEMICALS (0.4%) | ||||||||||||||||||
1,290,000 | DowDuPont, Inc. | 11/15/23 | 4.205 | 1,352,188 | ||||||||||||||
COMMERCIAL SERVICES (0.2%) | ||||||||||||||||||
600,000 | United Rentals North America, Inc. | 07/15/23 | 4.625 | 609,750 | ||||||||||||||
COMPUTERS (0.6%) | ||||||||||||||||||
2,000,000 | Apple, Inc. | 05/03/23 | 2.400 | 1,978,712 | ||||||||||||||
COSMETICS/PERSONAL CARE (0.4%) | ||||||||||||||||||
1,300,000 | Unilever Capital Corp. | 03/07/22 | 3.000 | 1,313,265 | ||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (3.7%) | ||||||||||||||||||
2,985,000 | Alliance Data Systems Corp.1 | 08/01/22 | 5.375 | 3,029,775 | ||||||||||||||
1,720,000 | American Express Co. | 11/05/21 | 3.700 | 1,756,682 | ||||||||||||||
785,000 | Capital One Financial Corp. | 01/29/24 | 3.900 | 806,242 | ||||||||||||||
1,800,000 | Credit Acceptance Corp. | 02/15/21 | 6.125 | 1,802,250 | ||||||||||||||
700,000 | Credit Acceptance Corp. | 03/15/23 | 7.375 | 725,375 | ||||||||||||||
1,400,000 | Credit Acceptance Corp.1 | 03/15/26 | 6.625 | 1,473,500 | ||||||||||||||
1,650,000 | Drawbridge Special Opportunities Fund LP1 | 08/01/21 | 5.000 | 1,656,281 | ||||||||||||||
11,250,105 | ||||||||||||||||||
ELECTRIC (2.9%) | ||||||||||||||||||
655,000 | American Electric Power Co., Inc. | 12/01/21 | 3.650 | 668,669 | ||||||||||||||
2,800,000 | Electricite de France SA1 | 09/21/28 | 4.500 | 2,913,629 | ||||||||||||||
1,705,000 | Exelon Generation Co. LLC | 10/01/39 | 6.250 | 1,945,791 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
ELECTRIC (continued) | ||||||||||||||||||
$ 1,060,000 | PacifiCorp | 04/01/24 | 3.600 | % | $ | 1,094,435 | ||||||||||||
830,000 | PSEG Power LLC | 06/15/21 | 3.000 | 830,084 | ||||||||||||||
1,355,000 | Wisconsin Public Service Corp. | 11/21/21 | 3.350 | 1,378,961 | ||||||||||||||
8,831,569 | ||||||||||||||||||
HEALTHCARE-SERVICES (1.7%) | ||||||||||||||||||
1,365,000 | MEDNAX, Inc.1 | 01/15/27 | 6.250 | 1,392,300 | ||||||||||||||
1,130,000 | Mercy Health | 07/01/28 | 4.302 | 1,205,291 | ||||||||||||||
2,750,000 | Roche Holdings, Inc.1 | 01/28/22 | 1.750 | 2,683,258 | ||||||||||||||
5,280,849 | ||||||||||||||||||
INSURANCE (5.9%) | ||||||||||||||||||
4,175,000 | Aegon NV (6-Month USD-LIBOR + 3.540%)2 | 04/11/48 | 5.500 | 4,242,844 | ||||||||||||||
3,002,000 | Athene Global Funding1 | 01/25/22 | 4.000 | 3,081,610 | ||||||||||||||
2,700,000 | Enstar Group, Ltd. | 03/10/22 | 4.500 | 2,753,418 | ||||||||||||||
540,000 | New York Life Global Funding1 | 08/06/21 | 3.250 | 547,265 | ||||||||||||||
2,995,000 | Sirius International Group, Ltd.1 | 11/01/26 | 4.600 | 2,764,385 | ||||||||||||||
1,840,000 | Swiss Re Finance Luxembourg SA (5-Year CMT Index + 3.582%)1,2 | 04/02/49 | 5.000 | 1,897,724 | ||||||||||||||
2,660,000 | United Insurance Holdings Corp. | 12/15/27 | 6.250 | 2,705,545 | ||||||||||||||
17,992,791 | ||||||||||||||||||
INVESTMENT COMPANIES (1.0%) | ||||||||||||||||||
750,000 | BrightSphere Investment Group Plc. | 07/27/26 | 4.800 | 731,745 | ||||||||||||||
200,000 | Business Development Corp. of America1 | 12/30/22 | 4.750 | 196,674 | ||||||||||||||
1,330,000 | Main Street Capital Corp. | 05/01/24 | 5.200 | 1,333,908 | ||||||||||||||
845,000 | Owl Rock Capital Corp. | 04/15/24 | 5.250 | 849,111 | ||||||||||||||
3,111,438 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 9 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
MACHINERY-CONSTRUCTION & MINING (0.7%) | ||||||||||||||||||
$ 2,180,000 | Caterpillar Financial Services Corp. | 12/07/23 | 3.650 | % | $ | 2,256,176 | ||||||||||||
MACHINERY-DIVERSIFIED (0.4%) | ||||||||||||||||||
1,265,000 | John Deere Capital Corp. | 01/10/24 | 3.450 | 1,296,248 | ||||||||||||||
MEDIA (0.1%) | ||||||||||||||||||
410,000 | Charter Communications Operating LLC / Charter Communications Operating Capital | 07/23/20 | 3.579 | 412,789 | ||||||||||||||
PHARMACEUTICALS (1.0%) | ||||||||||||||||||
1,695,000 | AbbVie, Inc. | 05/14/25 | 3.600 | 1,704,985 | ||||||||||||||
455,000 | AbbVie, Inc. | 05/14/35 | 4.500 | 445,076 | ||||||||||||||
450,000 | AbbVie, Inc. | 05/14/36 | 4.300 | 430,216 | ||||||||||||||
470,000 | Allergan Sales LLC1 | 12/15/21 | 5.000 | 489,603 | ||||||||||||||
3,069,880 | ||||||||||||||||||
PIPELINES (0.9%) | ||||||||||||||||||
1,545,000 | Energy Transfer Operating LP (3-Month USD-LIBOR + 4.028%)2,5 | 6.250 | 1,470,175 | |||||||||||||||
1,205,000 | Kinder Morgan Energy Partners LP | 02/15/23 | 3.450 | 1,216,208 | ||||||||||||||
2,686,383 | ||||||||||||||||||
REAL ESTATE INVESTMENT TRUSTS (1.5%) | ||||||||||||||||||
495,000 | Scentre Group Trust 1 / Scentre Group Trust 21 | 11/05/19 | 2.375 | 493,636 | ||||||||||||||
1,380,000 | Scentre Group Trust 1 / Scentre Group Trust 21 | 02/12/25 | 3.500 | 1,379,641 | ||||||||||||||
2,585,000 | WEA Finance LLC / Westfield UK & Europe Finance Plc.1 | 10/05/20 | 3.250 | 2,598,767 | ||||||||||||||
4,472,044 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
CORPORATE BONDS (continued) | ||||||||||||||||||
TELECOMMUNICATIONS (0.3%) | ||||||||||||||||||
$ 784,375 | Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint Spectrum Co. III LLC1 | 03/20/23 | 3.360 | % | $ | 782,414 | ||||||||||||
TRUCKING & LEASING (0.8%) | ||||||||||||||||||
335,000 | Avolon Holdings Funding, Ltd.1 | 05/15/24 | 5.250 | 349,556 | ||||||||||||||
600,000 | Park Aerospace Holdings, Ltd.1 | 08/15/22 | 5.250 | 624,600 | ||||||||||||||
1,400,000 | Park Aerospace Holdings, Ltd.1 | 03/15/23 | 4.500 | 1,415,288 | ||||||||||||||
2,389,444 | ||||||||||||||||||
Total Corporate Bonds (Identified cost $102,337,180) | 105,036,952 | |||||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (16.7%) | ||||||||||||||||||
712,155 | Avolon TLB Borrower 1 (US) LLC Term B3 (1-Month USD-LIBOR + 2.000%) | 01/15/25 | 4.487 | 711,735 | ||||||||||||||
1,985,000 | BCP Renaissance Parent LLC (3-Month USD-LIBOR + 3.500%) | 10/31/24 | 6.083 | 1,993,436 | ||||||||||||||
1,381,579 | CenturyLink, Inc. Term A (1-Month USD-LIBOR + 2.750%) | 11/01/22 | 5.233 | 1,380,722 | ||||||||||||||
1,984,925 | Charter Communications Operating LLC (CCO Safari LLC) Term B (1-Month USD-LIBOR + 2.000%) | 04/30/25 | 4.490 | 1,988,438 | ||||||||||||||
2,979,836 | Dell International LLC / EMC Corp. Term B (1-Month USD-LIBOR + 2.000%) | 09/07/23 | 4.490 | 2,979,836 | ||||||||||||||
2,906,936 | Eastern Power LLC (TPF II LC LLC) (1-Month USD-LIBOR + 3.750%) | 10/02/23 | 6.233 | 2,906,588 | ||||||||||||||
1,989,975 | Frontera Generation Holdings LLC (1-Month USD-LIBOR + 4.250%) | 05/02/25 | 6.724 | 1,988,741 | ||||||||||||||
1,293,923 | Greatbatch, Ltd. Term A (1-Month USD-LIBOR + 2.500%) | 10/27/21 | 5.000 | 1,292,306 | ||||||||||||||
1,911,765 | HCA Inc. Term A5 (1-Month USD-LIBOR + 1.500%) | 06/10/20 | 3.983 | 1,909,375 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 11 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||
$ 698,237 | HCA Inc. Term B10 (1-Month USD-LIBOR + 2.000%) | 03/13/25 | 4.483 | % | $ | 699,361 | ||||||||||||
3,995,696 | Helix Gen Funding LLC (1-Month USD-LIBOR + 3.750%)2 | 06/03/24 | 6.233 | 3,893,926 | ||||||||||||||
2,984,962 | Kestrel Acquisition LLC Term B (1-Month USD-LIBOR + 4.250%)2 | 06/02/25 | 6.740 | 2,989,947 | ||||||||||||||
2,064,625 | NorthRiver Midstream Finance LP Term B (3-Month USD-LIBOR + 3.250%)2 | 10/01/25 | 5.850 | 2,071,211 | ||||||||||||||
1,395,000 | Panther BF Aggregator 2 L P (1-Month USD-LIBOR +2.483%)2 | 04/30/26 | 6.076 | 1,399,366 | ||||||||||||||
1,538,058 | Revere Power LLC Term B (2-Month USD-LIBOR + 4.250%)2 | 03/27/26 | 6.791 | 1,525,569 | ||||||||||||||
238,485 | Revere Power LLC Term C (2-Month USD-LIBOR + 4.250%)2 | 03/27/26 | 6.791 | 236,549 | ||||||||||||||
2,603,437 | RPI Finance Trust Term B6 (1-Month USD-LIBOR + 2.000%)2 | 03/27/23 | 4.483 | 2,605,077 | ||||||||||||||
992,405 | Sprint Communications, Inc. (1-Month USD-LIBOR + 2.500%)2 | 02/02/24 | 5.000 | 962,881 | ||||||||||||||
1,496,250 | Sprint Communications, Inc. (1-Month USD-LIBOR + 3.000%)2 | 02/02/24 | 5.500 | 1,471,936 | ||||||||||||||
702,917 | SS&C Technologies Holdings, Inc. Term B3 (1-Month USD-LIBOR + 2.250%)2 | 04/16/25 | 4.733 | 703,009 | ||||||||||||||
502,465 | SS&C Technologies Holdings, Inc. Term B4 (1-Month USD-LIBOR + 2.250%)2 | 04/16/25 | 4.733 | 502,530 | ||||||||||||||
736,240 | SS&C Technologies Holdings, Inc. Term B5 (1-Month USD-LIBOR + 2.250%)2 | 04/16/25 | 4.733 | 736,151 | ||||||||||||||
2,984,887 | TerraForm Power Operating LLC (1-Month USD-LIBOR + 2.000%)2 | 11/08/22 | 4.483 | 2,973,693 | ||||||||||||||
3,208,000 | Tivity Health, Inc. Term B (1-Month USD-LIBOR + 5.250%)2 | 03/06/26 | 7.733 | 3,157,891 | ||||||||||||||
1,990,000 | United Rentals, Inc. (1-Month USD-LIBOR + 1.750%)2 | 10/31/25 | 4.233 | 1,990,717 | ||||||||||||||
997,500 | Universal Health Services, Inc. (1-Month USD-LIBOR + 1.750%)2 | 10/31/25 | 4.233 | 997,500 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (continued) | ||||||||||||||||||
$ 1,985,000 | Vistra Operations Co. LLC (Tex Operations Company LLC) (1-Month USD-LIBOR + 2.000%)2 | 12/31/25 | 4.476 | % | $ | 1,984,107 | ||||||||||||
2,985,000 | Wyndham Hotels & Resorts, Inc. Term B (1-Month USD-LIBOR + 1.750%)2 | 05/30/25 | 4.233 | 2,980,791 | ||||||||||||||
Total Loan Participations and Assignments (Identified cost $50,898,546) | 51,033,389 | |||||||||||||||||
RESIDENTIAL MORTGAGE BACKED SECURITIES (0.4%) | ||||||||||||||||||
1,190,640 | Cascade Funding Mortgage Trust 2018-RM21,2,3 | 10/25/68 | 4.000 | 1,207,142 | ||||||||||||||
Total Residential Mortgage Backed Securities (Identified cost $1,185,363) | 1,207,142 | |||||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.7%) | ||||||||||||||||||
8,300,000 | Federal Home Loan Bank Discount Notes6 | 05/01/19 | 0.000 | 8,300,000 | ||||||||||||||
Total U.S. Government Agency Obligations (Identified cost $8,300,000) | 8,300,000 | |||||||||||||||||
U.S. INFLATION LINKED DEBT (2.0%) | ||||||||||||||||||
6,042,060 | U.S. Treasury Inflation Indexed Note | 07/15/28 | 0.750 | 6,168,585 | ||||||||||||||
Total U.S. Inflation Linked Debt (Identified cost $5,958,557) | 6,168,585 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 13 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Principal Amount | Maturity Date | Interest Rate | Value | |||||||||||||||
U.S. TREASURY BONDS AND NOTES (15.3%) | ||||||||||||||||||
$ 16,690,000 | U.S. Treasury Bond | 08/15/40 | 3.875 | % | $ | 19,519,477 | ||||||||||||
2,000,000 | U.S. Treasury Bond | �� | 08/15/46 | 2.250 | 1,741,562 | |||||||||||||
11,225,000 | U.S. Treasury Bond | 05/15/48 | 3.125 | 11,628,398 | ||||||||||||||
3,000,000 | U.S. Treasury Note | 02/15/23 | 2.000 | 2,971,758 | ||||||||||||||
7,500,000 | U.S. Treasury Note | 10/31/24 | 2.250 | 7,473,340 | ||||||||||||||
800,000 | U.S. Treasury Note7 | 08/15/26 | 1.500 | 751,062 | ||||||||||||||
2,500,000 | U.S. Treasury Note | 08/15/28 | 2.875 | 2,578,223 | ||||||||||||||
Total U.S. Treasury Bonds and Notes (Identified cost $45,089,436) | 46,663,820 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $303,474,408)8 | 101.0 | % | $ | 309,070,556 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (1.0 | )% | (3,096,825 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 305,973,731 |
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, 2019 was $ 126,844,806 or 41.5% 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, 2019 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 | Security is perpetual in nature and has no stated maturity date. |
6 | Security issued with zero coupon. Income is recognized through accretion of discount. |
7 | All or a portion of this security is held at the broker as collateral for open futures contracts. |
8 | The aggregate cost for federal income tax purposes is $303,474,408, the aggregate gross unrealized appreciation is $6,240,425 and the aggregate gross unrealized depreciation is $164,261, resulting in net unrealized appreciation of $6,076,164. |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Description | Number of Contracts | Expiration Date | Notional Amount | Market Value | Unrealized Gain/(Loss) | |||||||||||||||||
Contracts to Buy: | ||||||||||||||||||||||
U.S. Treasury 2-Year Notes | 70 | June 2019 | $ | 14,938,437 | $ | 14,910,547 | $ | (27,890 | ) | |||||||||||||
U.S. Treasury 5-Year Notes | 497 | June 2019 | 57,116,922 | 57,473,391 | 356,469 | |||||||||||||||||
U.S. Treasury 10-Year Notes | 128 | June 2019 | 15,682,000 | 15,830,000 | 148,000 | |||||||||||||||||
U.S. Ultra 10-Year Notes | 25 | June 2019 | 3,242,969 | 3,294,531 | 51,562 | |||||||||||||||||
U.S. Ultra Bond | 14 | June 2019 | 2,348,063 | 2,299,938 | (48,125 | ) | ||||||||||||||||
$ | 480,016 |
— | 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, 2019 | 15 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (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, 2019 | ||||||||||||||
Asset Backed Securities | $ | — | $ | 74,177,748 | $ | 607,798 | $ | 74,785,546 | ||||||||||
Commercial Mortgage Backed Securities | — | 15,875,122 | — | 15,875,122 | ||||||||||||||
Corporate Bonds | — | 105,036,952 | — | 105,036,952 | ||||||||||||||
Loan Participations and Assignments | — | 51,033,389 | — | 51,033,389 | ||||||||||||||
Residential Mortgage Backed Securities | — | 1,207,142 | — | 1,207,142 | ||||||||||||||
U.S. Government Agency Obligations | — | 8,300,000 | — | 8,300,000 | ||||||||||||||
U.S. Inflation Linked Debt | — | 6,168,585 | — | 6,168,585 | ||||||||||||||
U.S. Treasury Bonds and Notes | — | 46,663,820 | — | 46,663,820 | ||||||||||||||
Total Investments, at value | $ | — | $ | 308,462,758 | $ | 607,798 | $ | 309,070,556 | ||||||||||
Other Financial Instruments, at value | ||||||||||||||||||
Financial Futures Contracts | $ | 480,016 | $ | — | $ | — | $ | 480,016 | ||||||||||
Other Financial Instruments, at value | $ | 480,016 | $ | — | $ | — | $ | 480,016 |
* | 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, 2019. |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 17 |
BBH INCOME FUND
PORTFOLIO OF INVESTMENTS (continued)
April 30, 2019 (unaudited)
Asset Backed Securities | ||||||
Balance as of October 31, 2018 | $ | 592,470 | ||||
Purchases | — | |||||
Sales / Paydowns | — | |||||
Realized gains (losses) | — | |||||
Change in unrealized appreciation (depreciation) | 14,626 | |||||
Amortization | 702 | |||||
Transfers from Level 3 | — | |||||
Transfers to Level 3 | — | |||||
Balance as of April 30, 2019 | $ | 607,798 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2019 (unaudited)
ASSETS: | ||||||
Investments in securities, at value (Identified cost $303,474,408) | $ | 309,070,556 | ||||
Cash | 66,808 | |||||
Cash collateral for futures contracts | 348,204 | |||||
Receivables for: | ||||||
Interest | 1,449,070 | |||||
Shares sold | 1,220,000 | |||||
Futures variation margin on open contracts | 131,812 | |||||
Prepaid assets | 275 | |||||
Total Assets | 312,286,725 | |||||
LIABILITIES: | ||||||
Payables for: | ||||||
Investments purchased | 5,976,050 | |||||
Investment advisory and administrative fees | 192,770 | |||||
Dividends declared | 63,285 | |||||
Professional fees | 48,513 | |||||
Shares redeemed | 12,706 | |||||
Transfer agent fees | 3,911 | |||||
Custody and fund accounting fees | 2,381 | |||||
Board of Trustees’ fees | 1,809 | |||||
Accrued expenses and other liabilities | 11,569 | |||||
Total Liabilities | 6,312,994 | |||||
NET ASSETS | $ | 305,973,731 | ||||
Net Assets Consist of: | ||||||
Paid-in capital | $ | 297,849,684 | ||||
Retained earnings | 8,124,047 | |||||
Net Assets | $ | 305,973,731 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE | ||||||
CLASS I SHARES | ||||||
($305,973,731 ÷ 29,936,759 shares outstanding) | $10.22 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 19 |
BBH INCOME FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 2019 (unaudited)
NET INVESTMENT INCOME: | ||||||
Income: | ||||||
Interest income | $ | 5,276,560 | ||||
Other income | 83,905 | |||||
Total Income | 5,360,465 | |||||
Expenses: | ||||||
Investment advisory and administrative fees | 522,874 | |||||
Professional fees | 35,521 | |||||
Custody and fund accounting fees | 34,327 | |||||
Board of Trustees’ fees | 23,906 | |||||
Transfer agent fees | 16,525 | |||||
Miscellaneous expenses | 23,221 | |||||
Total Expenses | 656,374 | |||||
Investment advisory and administrative fee waiver | (8,753 | ) | ||||
Net Expenses | 647,621 | |||||
Net Investment Income | 4,712,844 | |||||
NET REALIZED AND UNREALIZED GAIN: | ||||||
Net realized gain on investments in securities | 1,222,291 | |||||
Net realized gain on futures contracts | 1,422,129 | |||||
Net realized gain on investments in securities and futures contracts | 2,644,420 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities | 7,314,579 | |||||
Net change in unrealized appreciation/(depreciation) on futures contracts | 532,906 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | 7,847,485 | |||||
Net Realized and Unrealized Gain | 10,491,905 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 15,204,749 |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 2019 (unaudited) | For the period from June 27, 2018 (commencement of operations) to October 31, 2018 | |||||||||
INCREASE IN NET ASSETS: | ||||||||||
Operations: | ||||||||||
Net investment income | $ | 4,712,844 | $ | 854,353 | ||||||
Net realized gain (loss) on investments in securities and futures contracts | 2,644,420 | (615,477 | ) | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts | 7,847,485 | (1,771,321 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 15,204,749 | (1,532,445 | ) | |||||||
Dividends and distributions declared: | ||||||||||
Class I | (4,700,064 | ) | (848,193 | ) | ||||||
Share transactions: | ||||||||||
Proceeds from sales of shares | 151,935,360 | 148,989,868 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions | 388,024 | 36,328 | ||||||||
Proceeds from short-term redemption fees | 60 | — | ||||||||
Cost of shares redeemed | (3,434,582 | ) | (65,374 | ) | ||||||
Net increase in net assets resulting from share transactions | 148,888,862 | 148,960,822 | ||||||||
Total increase in net assets | 159,393,547 | 146,580,184 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 146,580,184 | — | ||||||||
End of period | $ | 305,973,731 | $ | 146,580,184 |
The accompanying notes are an integral part of these financial statements.
financial statements april 30, 2019 | 21 |
BBH INCOME FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class I share outstanding throughout each period.
For the six months ended April 30, 2019 (unaudited) | For the period from June 27, 2018 (commencement of operations) to October 31, 2018 | |||||||||
Net asset value, beginning of period | $ | 9.83 | $ | 10.00 | ||||||
Income from investment operations: | ||||||||||
Net investment income1 | 0.18 | 0.10 | ||||||||
Net realized and unrealized gain (loss) | 0.39 | (0.17 | ) | |||||||
Total income (loss) from investment operations | 0.57 | (0.07 | ) | |||||||
Less dividends and distributions: | ||||||||||
From net investment income | (0.18 | ) | (0.10 | ) | ||||||
Short-term redemptions fees1 | 0.00 | 2 | — | |||||||
Net asset value, end of period | $ | 10.22 | $ | 9.83 | ||||||
Total return | 5.83 | %3 | (0.75 | )%3 | ||||||
Ratios/Supplemental data: | ||||||||||
Net assets, end of period (in millions) | $ | 306 | $ | 147 | ||||||
Ratio of expenses to average net assets before reductions | 0.50 | %4 | 0.67 | %5 | ||||||
Fee waiver | 0.00 | %4,6,7 | 0.17 | %5,6 | ||||||
Ratio of expenses to average net assets after reductions | 0.50 | %4 | 0.50 | %5 | ||||||
Ratio of net investment income to average net assets | 3.61 | %4 | 3.12 | %5 | ||||||
Portfolio turnover rate | 50 | %3 | 94 | %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, legal fees and registration fees. |
6 | The ratio of expenses to average net assets for the six months ended April 30, 2019 and the period ended October 31, 2018 reflect fees reduced as result of a contractual operating expense limitation of the Fund to 0.50%. The agreement is effective through June 30, 2019 and may only be terminated during its term with approval of the Fund’s Board of Trustees. For the six months ended April 31, 2019 and the period from June 27, 2018 to October 31, 2018, the waived fees were $8,753 and $94,185, respectively. |
7 | Less than 0.01%. |
The accompanying notes are an integral part of these financial statements.
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2019 (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 27, 2018. The Fund offers Class N shares and Class I shares. As of April 30, 2019, Class N shares are not available for purchase by investors. The Fund may offer Class N shares for purchase in the future. 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, 2019, there were seven 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. Futures contracts held by the Fund are valued daily at the official settlement price of the exchange of which it is traded. |
financial statements april 30, 2019 | 23 |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
B. | Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Interest income is accrued daily and consists of interest accrued, discount earned (including, if any, both original issue and market discount) and premium amortization on the investments of the Fund. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of the interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured. |
C. | Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust on a net assets basis. 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 economically 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. |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 futures contracts | $ | 556,031 | * | Net unrealized appreciation/(depreciation) on futures contracts | $ | (76,015 | )* | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 556,031 | $ | (76,015 | ) |
* | 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 | $ | 1,422,129 | ||||
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Futures Contracts | $ | 532,906 |
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, under SEC Regulations for open-end investment companies, 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. |
financial statements april 30, 2019 | 25 |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (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 assignment, the Fund acquires the loan in whole or in part and becomes a lender under the loan agreement. The Fund generally has the 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 between paid-in capital and retained earnings/(accumulated deficit) within the Statement of Assets and Liabilities based upon their tax |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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 are declared daily and paid monthly to shareholders. 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 $4,700,064 to Class I shareholders during the six months ended April 30, 2019. |
Distributions paid from: | ||||||||||||||||||||||||
Ordinary income | Net long-term capital gain | Total taxable distributions | Tax return of capital | Total distributions paid | ||||||||||||||||||||
2018: | $ | 848,193 | $ | — | $ | 848,193 | $ | — | $ | 848,193 |
Components of retained earnings/(accumulated deficit): | ||||||||||||||||||||||||||||||||
Undistributed ordinary income | Undistributed long-term capital gain | Retained earnings/ (accumulated deficit) | Accumulated capital and other losses | Other book/tax temporary differences | Book unrealized appreciation/ (depreciation) | Total retained earnings/ (accumulated deficit) | ||||||||||||||||||||||||||
2018: | $ | 3,766 | $ | — | $ | 3,766 | $ | (147,418 | ) | $ | (465,665 | ) | $ | (1,771,321 | ) | $ | (2,380,638 | ) |
financial statements april 30, 2019 | 27 |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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. |
3. | Fees and Other Transactions with Affiliates. |
A. | Investment Advisory and Administrative Fees. Effective June 27, 2018 (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 pays a combined fee for investment advisory and administrative services calculated daily and paid monthly at an annual rate equivalent to 0.40% per annum. For the six months ended April 30, 2019, the Fund incurred $522,874 for services under the Agreement. |
B. | Investment Advisory and Administrative Fee Waivers. Effective June 27, 2018 (commencement of operations), the Investment Adviser has contractually agreed to waive fees and/or reimburse expenses in order to limit the total annual fund operating expenses (excluding interests, taxes, |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
brokerage commissions, other expenditures that are capitalized in accordance with generally accepted accounting principles, and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) for Class I shares to 0.50%. The agreement will terminate on February 29, 2020, 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, 2019, the Investment Adviser waived fees in the amount of $8,753 for Class I. |
C. | 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, 2019, the Fund incurred $34,327 in custody and fund accounting fees. The Fund received interest income on cash balances held by the custodian at the BBH Base Rate. 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, 2019, was $246. This amount is included under line item “Custody and fund accounting fees” in the Statement of Operations. |
D. | 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, 2019, the Fund incurred $23,906 in independent Trustee compensation and reimbursements. |
E. | Officers of the Trust. Officers of the Trust are also employees of BBH. Officers are paid no fees by the Trust for their services to the Trust. |
4. | Investment Transactions. For the six months ended April 30, 2019, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $274,200,372 and $126,284,850, respectively. |
financial statements april 30, 2019 | 29 |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
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. Transactions in Class I shares were as follows: |
For the six months ended April 30, 2019 (unaudited) | For the period ended October 31, 2018* | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||
Class I | |||||||||||||||||||
Shares sold | 15,322,900 | $ | 151,935,360 | 14,918,693 | $ | 148,989,868 | |||||||||||||
Shares issued in connection with reinvestments of dividends | 38,495 | 388,024 | 3,682 | 36,328 | |||||||||||||||
Proceeds from short-term redemption fees | N/A | 60 | N/A | — | |||||||||||||||
Shares redeemed | (340,369 | ) | (3,434,582 | ) | (6,642 | ) | (65,374 | ) | |||||||||||
Net increase | 15,021,026 | $ | 148,888,862 | 14,915,733 | $ | 148,960,822 |
* | The period represented is from June 27, 2018 (commencement of operations) to October 31, 2018. |
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 INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
ability of the issuer to pay principal and interest, securities that are rated below investment grade (i.e., Ba1/BB+ or lower) (junk bond risk), and their unrated equivalents, may be subject to greater risks than securities which have higher credit ratings, including a high risk of default. If the issuer of the securities in which the Fund invests redeems them before maturity the Fund may have to reinvest the proceeds in securities that pay a lower interest rate (call risk). The Fund invests in asset-backed (asset-backed securities risk) and mortgage-backed securities (mortgage-backed securities risk) which are subject to the risk that borrowers may default on the obligations that underlie these securities. In addition, these securities may be paid off sooner (prepayment risk) or later than expected which may increase the volatility of securities during periods of fluctuating interest rates. The Fund may invest in bonds issued by foreign governments which may be unable or unwilling to make interest payments and/or repay the principal owed (sovereign debt risk). The Fund’s use of borrowing, in reverse repurchase agreements and investment in some derivatives, involves leverage. Leverage tends to exaggerate the effect of any increase or decrease in the value of the Fund’s securities and may cause the Fund to be more volatile (leverage risk). Loan participations, delayed funding loans and revolving credit facilities may have the effect of requiring the Fund to increase its investments in a company at a time when it might not otherwise decide to do so (loan risk). The value of securities held by the Fund may decline in response to certain events, including: those directly involving the companies or issuers whose securities are held by the Fund; conditions affecting the general economy; overall market changes; local, regional or political, social or economic instability; and currency and interest rate and price fluctuations (market risk). A significant investment of Fund assets within one or more sectors, industries, securities and/or durations may increase the Fund’s sensitivity to adverse economic, business, political, or other, risks associated with such sector, industry, security or duration (sector risk). The Fund’s shareholders may be adversely impacted by asset allocation decisions made by an investment adviser whose discretionary clients make up a large percentage of the Fund’s shareholders (shareholder concentration risk). Even though the Fund’s investments in repurchase agreements are collateralized at all times, there is some risk to the Fund if the other party to the agreement should default on its obligations (repurchase agreement risk). While the U.S. Government has historically provided financial support to U.S. government-sponsored agencies or instrumentalities during times of financial stress, such as the various actions taken to stabilize the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation during the credit crisis of 2008, no assurance can be given that it will 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.
financial statements april 30, 2019 | 31 |
BBH INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 2019 (unaudited)
B. | Indemnifications. Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. | Recent Pronouncements. |
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 2017-08”) 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 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU 2017-08 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. |
B. | ASU 2018-13. On August 28, 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”). ASU 2018-13 modifies the disclosure objective paragraphs of Accounting Standards Codification 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. ASU 2018-13 also eliminates and modifies other requirements under ASU 2018-13. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted and Management is currently evaluating the application of ASU 2018-13 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, 2019 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 INCOME FUND
DISCLOSURE OF FUND EXPENSES
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 33 |
BBH INCOME FUND
DISCLOSURE OF FUND EXPENSES (continued)
April 30, 2019 (unaudited)
Beginning Account Value November 1, 2018 | Ending Account Value April 30, 2019 | Expenses Paid During Period November 1, 2018 to April 30, 20191 | ||||||||||||
Class I | ||||||||||||||
Actual | $ | 1,000 | $ | 1,058 | $ | 2.55 | ||||||||
Hypothetical2 | $ | 1,000 | $ | 1,022 | $ | 2.51 |
1 | Expenses are equal to the Fund’s annualized expense ratio of 0.50% for Class I shares, multiplied by the average account value over the period and multiplied by 181/365. |
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 INCOME FUND
DISCLOSURE OF ADVISOR SELECTION
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 35 |
BBH INCOME FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
BBH INCOME FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 37 |
BBH INCOME FUND
DISCLOSURE OF ADVISOR SELECTION (continued)
April 30, 2019 (unaudited)
BBH INCOME FUND
CONFLICTS OF INTEREST
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 39 |
BBH INCOME FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH INCOME FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 41 |
BBH INCOME FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
BBH INCOME FUND
CONFLICTS OF INTEREST (continued)
April 30, 2019 (unaudited)
financial statements april 30, 2019 | 43 |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 | Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: | Call 1-800-575-1265 | |||||
By E-mail send your request to: | bbhfunds@bbh.com | |||||
On the internet: | www.bbhfunds.com |
Item 2. Code of Ethics.
Not required for this semi-annual report on Form N-CSR.
|
Item 3. Audit Committee Financial Expert.
Not required for this semi-annual report on Form N-CSR.
|
Item 4. Principal Accountant Fees and Services.
Not required for this semi-annual report on Form N-CSR.
|
Item 5. Audit Committee of Listed Registrants.
(a) | Not required for this semi-annual report on Form N-CSR.
|
(b) | Not required. |
Item 6. Investments.
(a) | This schedule is included as part of the report to shareholders filed under Item 1 of this Form N-CSR.
|
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable. |
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable. |
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable. |
Item 11. Controls and Procedures.
(a) | The Registrant’s principal executive and financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this Form N-CSR, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
|
(b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Registrant's second fiscal quarter of the period covered by this Form N-CSR, that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. 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 12(a)(2) to this Form N-CSR.
|
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications required by Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are furnished as Exhibit 12(b) to this Form N-CSR. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BBH Trust
By: (Signature and Title)
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin
Title: President (Principal Executive Officer)
Date: July 8, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: (Signature and Title)
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin
Title: President (Principal Executive Officer)
Date: July 8, 2019
By: (Signature and Title)
/s/ Charles H. Schreiber
Charles H. Schreiber
Title: Treasurer (Principal Financial Officer)
Date: July 8, 2019