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
Name of Fund: BBH TRUST
BBH U.S. Treasury Money Fund
BBH Money Market Fund
BBH Tax Exempt Money Fund
Fund Address: 140 Broadway
New York, NY 10005
Name and address of agent for service:
Mark Nixon
BBH Trust, 140 Broadway, New York, NY, 10005
Mailing address: 140 Broadway, New York, NY, 10005
Registrant's telephone number, including area code: (800) 625-5759
Date of fiscal year end: 06/30/08
Date of reporting period: 07/01/07-12/31/07
ITEM 1 - Attach shareholder report
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2007
BBH U.S. Treasury Money Fund
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2007 (unaudited)
BREAKDOWN BY SECURITY TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
U.S. Treasury Bills................................ $63,727,206 91.8%
U.S. Treasury Note................................. 1,115,290 1.6
Other Assets in Excess of Liabilities.............. 4,586,233 6.6
----------- -----
Net Assets......................................... $69,428,729 100.0%
=========== =====
All data as of December 31, 2007. The Fund's breakdown by security type is
expressed as a percentage of net assets and may vary over time.
The accompanying notes are an integral part of these financial statements.
2
BBH U.S. TREASURY MONEY FUND
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PORTFOLIO OF INVESTMENTS
December 31, 2007 (unaudited)
Principal
Amount Value
- ------------ -----------
U.S. TREASURY BILLS (a) (91.8%)
$ 14,705,000 due 01/03/08, 4.246%............................. $14,701,587
12,395,000 due 01/10/08, 4.171%............................. 12,382,282
8,655,000 due 02/07/08, 2.519%............................. 8,632,672
4,610,000 due 03/06/08, 2.972%............................. 4,585,445
10,000,000 due 04/10/08, 2.753%............................. 9,924,167
11,625,000 due 05/22/08, 3.197%............................. 11,480,430
2,050,000 due 06/12/08, 3.216%............................. 2,020,623
-----------
Total U.S. Treasury Bills........................ 63,727,206
-----------
U.S. TREASURY NOTE (1.6%)
1,125,000 due 05/15/08, 2.625%............................. 1,115,290
-----------
TOTAL INVESTMENTS, AT AMORTIZED COST.................. 93.4% $64,842,496
OTHER ASSETS IN EXCESS OF LIABILITIES................. 6.6 4,586,233
----- -----------
NET ASSETS............................................ 100.0% $69,428,729
===== ===========
- ----------
(a) Rates shown are yields to maturity at time of purchase.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 3
BBH U.S. TREASURY MONEY FUND
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STATEMENT OF ASSETS AND LIABILITIES
December 31, 2007 (unaudited)
ASSETS:
Investments, at amortized cost............................... $64,842,496
Cash ........................................................ 4,707,289
Interest receivable and other assets......................... 3,733
-----------
Total Assets.............................................. 69,553,518
-----------
LIABILITIES:
Payables for:
Professional fees......................................... 30,649
Shareholder servicing fees................................ 28,215
Investment advisory fees.................................. 18,809
Administrative fees....................................... 13,206
Dividends declared........................................ 4,396
Custody and accounting fees............................... 3,018
Board of Trustees' fees................................... 1,000
Accrued expenses and other liabilities....................... 25,496
-----------
Total Liabilities......................................... 124,789
-----------
NET ASSETS, for 69,428,862 fund shares outstanding.............. $69,428,729
===========
Net Assets Consist of:
Paid in capital.............................................. $69,428,729
-----------
Net Assets $69,428,729
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE.................... $1.00
=====
The accompanying notes are an integral part of these financial statements.
4
BBH U.S. TREASURY MONEY FUND
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STATEMENT OF OPERATIONS
For the six months ended December 31, 2007 (unaudited)
NET INVESTMENT INCOME:
Income:
Investment income........................................... $1,393,988
----------
Expenses:
Shareholder servicing fees.................................. 74,527
Investment advisory fees.................................... 49,685
Administrative fees......................................... 33,123
Professional fees........................................... 14,850
State Registration fees..................................... 14,033
Custody and accounting fees................................. 12,077
Board of Trustees' fees..................................... 4,909
Miscellaneous expenses...................................... 39,380
----------
Total Expenses............................................ 242,584
Expense offset arrangement................................ (3,135)
----------
Net Expenses.............................................. 239,449
----------
Net Investment Income.......................................... $1,154,539
==========
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 5
BBH U.S. TREASURY MONEY FUND
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STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
December 31, 2007 year ended
(unaudited) June 30, 2007
----------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income .................................................... $ 1,154,539 $ 3,842,702
Dividends declared from net investment income ............................... (1,154,539) (3,842,702)
------------- -------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold ....................................................... 102,585,482 169,360,686
Fund shares issued in reinvestment of dividends ........................ 443,600 1,684,859
Fund shares repurchased ................................................ (108,840,117) (207,159,757)
------------- -------------
Net decrease in net assets resulting
from fund share transactions ........................................ (5,811,035) (36,114,212)
------------- -------------
NET ASSETS:
Beginning of year ........................................................... 75,239,764 111,353,976
------------- -------------
End of period ............................................................... $ 69,428,729 $ 75,239,764
============= =============
The accompanying notes are an integral part of these financial statements.
6
BBH U.S. TREASURY MONEY FUND
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FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
For the six
months ended
December 31, For the years ended June 30,
2007 ------------------------------------------------
(unaudited) 2007 2006 2005 2004 2003
------ ------ ------ ------ ------ ------
Net asset value,
beginning of year.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment
income.......................... 0.02 0.04 0.03 0.01 0.001 0.01
Dividends to shareholders
from net investment
income............................. (0.02) (0.04) (0.03) (0.01) (0.00)(1) (0.01)
------ ------ ------ ------ ------ ------
Net asset value,
end of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return.......................... 1.76% 4.45% 3.35% 1.41% 0.40% 0.91%
Ratios/Supplemental data:
Net assets, end of period
(in millions)................... $69 $75 $111 $141 $117 $137
Ratio of expenses to
average net assets
Net expenses paid
by Fund....................... 0.72%(2) 0.62% 0.59% 0.56% 0.59% 0.57%
Expense offset
arrangement................... 0.01%(2) 0.01% 0.00%(3) 0.01% 0.00%(3) 0.00%(3)
------ ------ ------ ------ ------ ------
Total expenses.................. 0.73%(2) 0.63% 0.59% 0.57% 0.59% 0.57%
====== ====== ====== ====== ====== ======
Ratio of net investment
income to average
net assets...................... 3.49%(2) 4.36% 3.25% 1.49% 0.39% 0.92%
- ----------
(1) Less than $0.01 per share.
(2) Annualized.
(3) Less than 0.01%.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 7
BBH U.S. TREASURY MONEY FUND
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NOTES TO FINANCIAL STATEMENTS
December 31, 2007 (unaudited)
1. Organization and Significant Accounting Policies. BBH U.S. Treasury Money
Fund (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 Trust is an open-end management investment company organized
as a Massachusetts business trust on June 7, 1983 and re-organized as a
Delaware statutory trust on June 12, 2007. The Fund commenced operations
on March 12, 1991. The Declaration of Trust permits the Trustees to create
an unlimited number of series, each of which may issue a separate class of
shares. The Trustees have authorized the issuance of an unlimited number
of shares of the Fund without a par value. At December 31, 2007, there
were seven series of the Trust.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which
require management to make certain estimates and assumptions at the date
of the financial statements and are based, in part, on the following
accounting policies. Actual results could differ from those estimates.
A. Valuation of Investments. The Fund values its investments at
amortized cost, which approximates market value. The amortized cost
method values a security at its cost at the time of purchase and
thereafter assumes a constant amortization to maturity of any
discount or premium. The Fund's use of amortized cost is in
compliance with Rule 2a-7 of the Investment Company Act of 1940.
B. Investment Transactions and Income. Investment transactions are
accounted for on the trade date. Realized gains and losses, if any,
from investment transactions are determined on the basis of
identified cost. Interest income consists of interest accrued and
discount earned (including both original issue and market discount)
and premium amortization on the investments of the Fund, accrued
ratably to the date of maturity.
C. Federal Income Taxes. Each series of the Trust is treated as a
separate entity for federal income tax purposes. It is the Fund's
policy to comply with the provisions of the Internal Revenue 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. At
December 31, 2007, the cost of investments for federal income tax
purposes was equal to the amortized cost of investments for
financial statement purposes.
D. Dividends and Distributions to Shareholders. Dividends from net
investment income are declared daily and paid monthly to
shareholders. The Fund declared dividends in the amount of
$1,154,539 during the six months ended December 31, 2007. The Fund
declared dividends in the amounts of $3,842,702 and $3,683,261 for
the years ended June 30, 2007 and June 30, 2006, respectively. The
tax character of the dividends declared in the six months and years
ended was 100% ordinary income.
8
BBH U.S. TREASURY MONEY FUND
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NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
E. Accounting Developments. During the current year, the Fund adopted
FASB Interpretation No. 48 "Accounting for Uncertainty in Income
Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in
the financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the
current year. The adoption of FIN 48 had no impact on the operations
of the Fund for the period ended December 31, 2007.
In September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective
for fiscal years beginning after November 15, 2007. SFAS 157 defines
fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is
currently evaluating the implication of SFAS 157. At this time its
impact on the Fund's financial statements has not yet been
determined.
2. Transactions with Affiliates.
Investment Advisory and Administrative Fees. Effective June 12, 2007,
under a combined Investment Advisory and Administrative Services Agreement
("Agreement") with the Trust, Brown Brothers Harriman & Co. ("BBH")
provides investment advice, portfolio management and administrative
services to the Fund. BBH receives a combined fee from the Fund for
investment advisory and administrative services calculated daily and paid
monthly at an annual rate equivalent to 0.25% of the Fund's daily net
assets. Prior to June 12, 2007, under a separate agreement that covered
only investment advisory fees, BBH received a fee from the Fund calculated
daily and paid monthly at an annual rate of 0.15% of the Fund's average
daily net assets and Brown Brothers Harriman Trust Company, LLC ("BBHTC")
the Fund's administrator, under a separate agreement that covered only
administrative services, received a fee from the Fund calculated daily and
paid monthly at an annual rate equivalent to 0.10% of the Fund's average
daily net assets. BBH has a sub-administration services agreement with
Federated Services Company ("FSC") for which FSC receives compensation
paid by BBH. For the six months ended December 31, 2007, the Fund incurred
$82,808 for investment advisory and administration services.
Shareholder Servicing Fees. The Trust has a shareholder servicing
agreement with BBH for which BBH receives a fee from the Fund calculated
daily and paid monthly at an annual rate of 0.225% of the Fund's average
daily net assets. For the six months ended December 31, 2007, the Fund
incurred $74,527 for shareholder servicing services.
Custody and Accounting Fees. BBH acts as a custodian and receives a
custody and accounting fee from the Fund calculated daily and paid
monthly. The custody fee is a transaction based fee with an annual minimum
of $20,000, and the accounting fee is calculated at 0.01% per annum on the
first
FINANCIAL STATEMENT DECEMBER 31, 2007 9
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
$1 billion of net assets and 0.005% per annum on all net assets over $1
billion. For the six months ended December 31, 2007, the Fund incurred
$12,077 for custody and accounting services. These fees were reduced by
$3,135 as a result of an expense offset arrangement with the Fund's
custodian. 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 be charged interest
based on LIBOR on the day of overdraft plus one percent. The total
interest paid by the Fund for the six months ended December 31, 2007 was
$7,061.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
six months ended December 31, 2007, the Fund incurred $4,909 for Trustees'
fees.
3. Federal Income Tax Status. At June 30, 2007, the Fund had a net capital
loss carryover, which is available to offset future capital gains to the
extent provided by regulations as follows:
Expiration date Amount
--------------- -------
June 30, 2015 $12,199
-------
$12,199
=======
To the extent that this net capital loss carryover is used to offset
future capital gains, it is probable the gains so offset will not be
distributed to shareholders since any such distributions may be taxable to
shareholders as ordinary income.
10
BBH U.S. TREASURY MONEY FUND
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DISCLOSURE OF FUND EXPENSES
December 31, 2007 (unaudited)
EXAMPLE
As a shareholder of BBH U.S. Treasury Money Fund (the "Fund"), you may incur two
types of costs: (1) transaction costs on purchase payments, reinvested
dividends, or other distributions; and exchange fees; and (2) ongoing costs,
including management fees; and other Fund expenses. This Example is intended to
help you understand your ongoing costs (in dollars) of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2007 to December 31, 2007).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2007 to
July 1, 2007 December 31, 2007 December 31, 2007(1)
------------- ----------------- --------------------
Actual...................... $1,000 $1,017.60 $3.65
Hypothetical(2)............. $1,000 $1,021.52 $3.66
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.72%,
multiplied by the average account value over the period, multiplied by
184/366 (to reflect the one-half year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio is subtracted from
the assumed return before expenses.
FINANCIAL STATEMENT DECEMBER 31, 2007 11
BBH U.S. TREASURY MONEY FUND
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DISCLOSURE OF ADVISOR SELECTION
December 31, 2007 (unaudited)
Approval of Investment Advisory/Administrative Services Agreement
At a meeting held on December 11, 2006, the Board of Trustees (the "Board") of
the Trust unanimously approved a new Combined Investment Advisory/Administrative
Services Agreement ("Combined Agreement"). The Board determined that the terms
of the Combined Agreement will be substantially identical to those of the
current advisory and administration agreements of the Funds, noting that the
most significant difference in the Combined Agreement is a single fee for both
advisory and administrative services. The following is a summary of the factors
the Board took into consideration in making its determination to approve the new
Combined Agreement.
Nature, Extent and Quality of Services Provided by Brown Brothers Harriman & Co.
("BBH")
The Board noted that, under the Combined Agreement in respect of each Fund, BBH,
subject to the supervision of the Board, will be responsible for providing a
continuous investment program and making purchases and sales of portfolio
securities consistent with the Funds' investment objective and policies. Under
the Combined Agreement, BBH also provides administrative services to each Fund.
The Board considered the scope and quality of services to be provided by BBH
under the Combined Agreement and noted that the scope of services provided had
expanded over time, primarily, as a result of regulatory developments. The Board
noted that, for example, BBH is responsible for maintaining and monitoring its
own and, to varying degrees, the Funds' compliance program, and these compliance
programs have recently been refined and enhanced in light of new regulatory
requirements. The Board considered the quality of the investment research and
administrative capabilities of BBH and the other resources it has dedicated to
performing services for the Funds. The Board concluded that, overall, they were
satisfied with the nature, extent and quality of services expected to be
provided to each of the Funds under the Combined Agreement.
Costs of Services Provided and Profitability to BBH
At the request of the Board, BBH provided information concerning the
profitability of BBH's current investment company advisory and other fees. The
Board also reviewed BBH's profitability data for each Fund, which also included
the effect of revenue generated by the shareholder servicing, administration,
custody and other fees paid by the Fund. The Board discussed the difficulty of
making comparisons of profitability because comparative information is not
generally publicly available and is affected by numerous factors, including the
structure of the service provider, the types of funds it manages and
administers, its business mix, numerous assumptions regarding allocations and
the entity's capital structure and cost of capital. In considering profitability
information, the Board considered the effect of fall-out benefits on BBH's
expenses, as well as the "revenue sharing" arrangements BBH has entered into
with certain
12
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
entities that distribute shares of the Funds. The Board focused on profitability
of BBH's relationships with the Funds before taxes and distribution expenses.
The Board concluded that it was satisfied that BBH's level of profitability from
its relationship with each Fund was not excessive.
Fall-Out Benefits
The Board considered that BBH does not allocate the Funds' portfolio
transactions for third party research, although it did benefit from proprietary
research received from brokers that execute the Funds' purchases and sales of
securities. The Board recognized that the aggregate amount of commissions
generated by Fund transactions was unlikely to result in the Funds receiving
from full service broker dealers substantial discounts on commission rates. The
Board received and reviewed information concerning BBH's policies with respect
to allocating portfolio brokerage.
The Board also considered that BBH receives shareholder servicing fees from
certain funds, and is the Funds' administrator, custodian and securities lending
agent. The Board noted that BBH retained no portion of the 12b-1 fees paid by
any Fund that operated with a Rule 12b-1 plan. The Board recognized that BBH's
profitability would be somewhat lower if it did not receive proprietary research
for commissions or, if it did not receive the other benefits described above.
The Board recognized that most Fund shareholders were also BBH clients, and that
substantial assets are invested in the Funds as a result of an overall
investment management program for the shareholder. The Board noted that the
Funds also derive reputational and other benefits from their association with
BBH and their use of the BBH name, which is licensed to the Funds by BBH. Thus,
the Board did not believe that BBH revenues associated with its clients should
be fairly regarded as "fallout" benefit from the Funds.
Economies of Scale
The Board noted that the Funds' combined fee schedules, other than the fee
schedule for BBH Money Market Fund, do not contain breakpoints. As a result, if
assets increase, the fee rates would not be reduced for these Funds on the
incremental assets. With respect to the BBH Money Market Fund, the breakpoint
will be reviewed every three (3) years by the Board, and may be adjusted upwards
to take into account the effects of inflation or such other basis as may be
appropriate, subject to the approval of shareholders to the extent required by
the 1940 Act.
There may be other economies of scale because many expenses did not rise (and
fall) proportionally to increases (and decreases) in total net assets. The Board
noted that BBH had priced its services in recognition of the fact that it was
largely its own clients who were shareholders and, accordingly, sought to assure
that the cost of these services and total expenses for each Fund were fair and
reasonable. In
FINANCIAL STATEMENT DECEMBER 31, 2007 13
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
addition, the Board noted that over the years BBH had supported certain Funds
through fee waivers and expense reimbursements. Based on information they had
been provided over many years, the Board observed that in the mutual fund
industry as a whole, as well as among funds similar to the Funds, there appeared
to be no uniformity or pattern in the fees and asset levels at which breakpoints
(if any) apply. In light of the Funds' current size and expense structure, the
Board concluded that it was unnecessary at this time to consider breakpoints
with respect to the Funds, other than for the BBH Money Market Fund.
Investment Results
The Board considered the investment results of each of the Funds as compared to
investment companies with its peers and with one or more selected securities
indices. In addition to the information received by the Board for the meeting
held on December 11, 2006, the Board received detailed performance information
for each Fund at each regular Board meeting during the year. At the meeting held
on December 11, 2006, the Board reviewed information showing performance of each
Fund compared to its peers over the prior 1-, 3-, and 5- year periods and
compared the performance information to one or more securities indices over
comparable periods.
Combined Fee Rate
The Board considered the fee rate to be paid by each Fund to BBH. The Board
recognized that it is difficult to make comparisons of these fee rates, and the
combined advisory and administration fees, because there are variations in the
services that are included in the fees paid by other funds.
The Board considered the depth and range of services provided under the Combined
Agreement. For example, in addition to a continuous investment program, BBH
provides, among other things, officers (including the Funds' Chief Compliance
Officer and officers to provide required certifications) and administrative
services, such as shareholder communications, and tax compliance, with the
attendant costs and exposure to liability. BBH also coordinates the provision of
services to the Funds by nonaffiliated service providers.
The following factors specific to BBH U.S. Treasury Money Fund also were noted
and considered by the Board in deciding to approve the Combined Agreement:
The Board considered the 1-, 3- and 5-year annualized total returns of the BBH
U.S. Treasury Money Fund versus the iMoneyNet (Treasury Retail). The Board noted
that the Fund outperformed or performed in line with that average over all
relevant periods. Moreover, the Board noted that it believes to have been
appropriately advised by BBH about its duration and average weighted maturity
decisions during the relevant periods and were satisfied overall with the
competitiveness of the performance. The Board also noted that the BBH U.S.
Treasury Money Fund had successfully maintained a stable net asset value of one
dollar at
14
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
all times. Taking into account these comparisons and the other factors
considered, the Trustees concluded that the BBH U.S. Treasury Money Fund's
investment results over time and its total expense ratio had been satisfactory.
Conflicts of Interest
As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a Fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other. For example, it is possible that the various accounts
managed could have different investment strategies that, at times, might
conflict with one another to the possible detriment of the Fund. Alternatively,
to the extent that the same investment opportunities might be desirable for more
than one account, possible conflicts could arise in determining how to allocate
them. Other potential conflicts might include conflicts created by specific
portfolio manager compensation arrangements, and conflicts relating to selection
of brokers or dealers to execute Fund portfolio trades and/or specific uses of
commissions from Fund portfolio trades (for example, research, or "soft
dollars").
BBH has adopted and implemented policies and procedures, including brokerage and
trade allocation policies and procedures, which it believes address the
conflicts associated with managing multiple accounts for multiple clients. In
addition, BBH monitors a variety of areas, including compliance with account
investment guidelines, the inclusion only of securities approved for purchase by
the BBH's Fixed Income Credit Committee, and compliance with the BBH's Code of
Ethics. Finally, BBH has structured the portfolio managers' compensation in a
manner, and the Funds have adopted policies and procedures, reasonably designed
to safeguard a Fund from being negatively affected as a result of any such
potential conflicts.
FINANCIAL STATEMENT DECEMBER 31, 2007 15
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
To obtain information or make shareholder inquiries:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
On the internet: www.bbhfunds.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
The Fund files with the SEC a complete schedule of its portfolio holdings, as of
the close of the first and third quarters of its fiscal year, on "Form N-Q."
Information on Form N-Q is available without charge and upon request by calling
the Funds at the toll-free number listed above. A text only version can be
viewed online or downloaded from the SEC's website at http://www.sec.gov; and
may be reviewed and copied at the SEC's Public Reference Room in Washington, DC
(call 1-800-SEC-0330 for information on the operation of the Public Reference
Room). You may also access this information from the BBH website at BBH.com by
clicking on "BBH Mutual Funds" and selecting "Online Documents/Holdings
Information."
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2007
BBH MONEY MARKET FUND
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2007 (unaudited)
BREAKDOWN BY SECURITY TYPE
Percent of
U.S. $ Value Net Assets
-------------- ----------
Certificates of Deposit............................ $ 468,618,638 19.0%
Commercial Paper................................... 1,134,742,974 46.1
Corporate Bonds.................................... 308,257,589 12.5
Municipal Bonds.................................... 96,354,700 3.9
Mutual Fund........................................ 34,513,000 1.4
U.S. Government Agency Obligations................. 87,211,576 3.6
Repurchase Agreements.............................. 325,000,000 13.2
Other Assets in Excess of Liabilities.............. 7,196,245 0.3
-------------- -----
Net Assets......................................... $2,461,894,722 100.0%
============== =====
All data as of December 31, 2007. The Fund's breakdown by security type is
expressed as a percentage of net assets and may vary over time.
The accompanying notes are an integral part of these financial statements.
2
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
CERTIFICATES OF DEPOSIT (19.0%)
$15,400,000 Abbey National Treasury Services .......................... 01/07/08 5.150% $ 15,400,000
10,000,000 Abbey National Treasury Services .......................... 01/22/08 5.080 10,000,796
25,000,000 Banco Bilbao Vizcaya Argentaria ........................... 01/04/08 5.240 25,000,021
15,000,000 Bank of Montreal(1) ....................................... 10/31/08 5.050 15,000,642
25,400,000 Bank of Nova Scotia ....................................... 02/27/08 4.960 25,400,397
27,875,000 Bank of Scotland, Plc ..................................... 03/17/08 5.060 27,878,446
25,000,000 Bank of Tokyo-Mitsubishi UFJ .............................. 06/04/08 5.340 25,000,510
25,000,000 Barclays Bank, Plc ........................................ 01/23/08 5.070 25,001,056
12,500,000 Barclays Bank, Plc ........................................ 02/29/08 5.250 12,504,776
25,000,000 Canadian Imperial Bank of Commerce ........................ 01/31/08 4.760 25,000,206
25,000,000 Canadian Imperial Bank of Commerce(1) ..................... 03/17/08 5.118 24,998,433
15,000,000 Citibank NA ............................................... 01/23/08 4.810 15,000,091
10,000,000 Credit Suisse, New York ................................... 05/21/08 5.300 10,000,372
9,000,000 Credit Suisse, New York ................................... 06/13/08 4.900 9,000,400
25,000,000 Depfa Bank, Plc ........................................... 01/18/08 5.180 25,000,000
16,750,000 HBOS Treasury Services .................................... 05/29/08 5.335 16,741,578
20,750,000 Lloyds TSB Bank, Plc ...................................... 01/25/08 4.855 20,750,137
21,000,000 M&I Marshall & Ilsley Bank ................................ 02/11/08 4.800 21,000,000
25,000,000 Royal Bank of Scotland, Plc ............................... 01/29/08 4.800 25,000,000
9,700,000 Royal Bank of Scotland, Plc.(1) ........................... 03/26/08 4.810 9,695,749
5,000,000 Suntrust Bank(1) .......................................... 04/21/08 5.180 5,000,376
25,000,000 Toronto Dominion Bank ..................................... 01/07/08 4.710 25,000,041
5,250,000 Unicredito Italiano, New York(1) .......................... 05/02/08 5.215 5,242,952
25,000,000 Westpac Banking Corp. ..................................... 01/25/08 4.900 25,000,823
25,000,000 Wilmington Trust Co. ...................................... 01/09/08 5.360 25,000,836
--------------
Total Certificates of Deposit ............................. 468,618,638
--------------
COMMERCIAL PAPER (46.1%)
4,500,000 Abbey National North America LLC .......................... 01/08/08 4.708 4,495,914
5,499,000 ABN-AMRO NA ............................................... 01/14/08 5.075 5,488,972
25,000,000 Aegon Funding Corp. ....................................... 01/23/08 5.034 24,924,069
21,000,000 Archer Daniels Midland Co. ................................ 01/17/08 4.515 20,958,093
25,000,000 Archer Daniels Midland Co. ................................ 01/29/08 4.556 24,912,111
25,000,000 Bank of America Corp. ..................................... 03/20/08 4.828 24,739,410
19,600,000 Brown University .......................................... 01/04/08 4.615 19,592,487
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 3
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
COMMERCIAL PAPER (continued)
$ 10,000,000 Calyon North America, Inc. ................................ 03/11/08 5.013% $ 9,903,750
28,100,000 Catholic Health Initiative ................................ 02/12/08 4.800 28,100,000
14,800,000 Catholic Health Initiative ................................ 05/05/08 4.960 14,800,000
25,000,000 CBA (Delaware) Finance .................................... 02/19/08 4.941 24,833,966
24,000,000 City of Chicago, Illinois ................................. 01/14/08 4.766 23,958,833
22,505,000 City of Chicago, Illinois ................................. 06/04/08 4.912 22,040,335
40,050,000 Columbia University ....................................... 01/02/08 4.698 40,044,793
11,900,000 ConocoPhillips Co. ........................................ 01/08/08 4.582 11,889,472
15,000,000 ConocoPhillips Co. ........................................ 01/23/08 4.890 14,955,725
10,000,000 Cornell University ........................................ 01/09/08 4.633 9,989,778
25,000,000 Cornell University ........................................ 01/10/08 4.261 24,973,437
10,000,000 Cornell University ........................................ 02/05/08 4.582 9,955,764
25,000,000 Danske Corp. .............................................. 01/31/08 4.705 24,903,125
7,100,000 De Kalb County, Georgia Development
Authority Revenue(1).................................... 03/03/08 5.140 7,100,000
25,000,000 Dover Corp. ............................................... 01/14/08 4.333 24,961,000
10,650,000 Duke University ........................................... 01/11/08 4.366 10,637,131
25,000,000 Hartford Financial Services Group, Inc. ................... 01/15/08 4.707 24,954,597
15,000,000 HSBC USA, Inc. ............................................ 01/10/08 5.342 14,980,500
20,000,000 HVB US Finance, Inc. ...................................... 01/07/08 5.221 19,982,833
20,000,000 ING (US) Funding LLC ...................................... 01/04/08 4.710 19,992,217
25,000,000 ING (US) Funding LLC ...................................... 01/14/08 5.110 24,954,455
10,000,000 International Lease Finance Corp. ......................... 02/06/08 4.796 9,952,500
7,000,000 John Deere Credit Ltd. .................................... 01/18/08 4.576 6,984,960
12,000,000 Johns Hopkins University .................................. 01/14/08 4.700 12,000,000
25,100,000 Johns Hopkins University .................................. 01/16/08 4.700 25,100,000
50,000,000 Koch Resources LLC ........................................ 01/02/08 4.041 49,994,389
20,000,000 Leggett & Platt, Inc. ..................................... 01/02/08 3.901 19,997,833
20,000,000 Leggett & Platt, Inc. ..................................... 01/22/08 4.617 19,946,683
25,000,000 Lehman Brothers Holdings, Inc. ............................ 01/02/08 4.251 24,997,048
25,000,000 Los Angeles Department of Airports.. ...................... 01/09/08 4.784 24,973,889
15,000,000 Michigan State ............................................ 10/28/08 4.900 15,000,000
25,000,000 National Australia Funding
(Delaware), Inc. ........................................ 01/07/08 4.728 24,980,458
25,000,000 North Carolina State ...................................... 02/06/08 4.950 25,000,000
The accompanying notes are an integral part of these financial statements.
4
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
COMMERCIAL PAPER (continued)
$ 5,500,000 Northwestern University ................................... 01/16/08 4.585% $ 5,489,573
50,000,000 Rabobank USA Finance Corp. ................................ 01/02/08 3.741 49,994,805
25,000,000 Rabobank USA Finance Corp. ................................ 02/20/08 4.854 24,833,507
10,000,000 Rights of University of California.. ...................... 01/09/08 4.702 9,989,778
7,000,000 Rutgers State University .................................. 02/01/08 5.050 7,000,000
6,500,000 Rutgers State University .................................. 02/01/08 5.100 6,500,000
25,000,000 San Paolo IMI US Financial Co. ............................ 01/31/08 4.908 24,898,750
25,000,000 Societe Generale .......................................... 02/01/08 4.846 24,896,990
17,000,000 Southern Company Funding Corp. ............................ 01/14/08 4.574 16,972,068
7,000,000 Southern Company Funding Corp. ............................ 01/16/08 4.679 6,986,438
23,277,000 Southern Company Funding Corp. ............................ 01/17/08 4.594 23,229,722
13,588,000 Tennessee State School Bond ............................... 01/17/08 4.550 13,588,000
30,000,000 UBS Finance Delaware LLC .................................. 01/02/08 4.232 29,996,475
25,000,000 UBS Finance Delaware LLC .................................. 03/19/08 4.910 24,738,375
10,000,000 Unicredito Italiano Bank .................................. 06/02/08 5.447 9,780,275
5,000,000 University of Texas System
Board of Regents ....................................... 01/07/08 4.700 5,000,000
25,000,000 Walnut Energy Center Authority ............................ 02/07/08 4.735 24,879,236
15,000,000 Walt Disney Co. ........................................... 02/15/08 4.541 14,915,625
14,200,000 Walt Disney Co. ........................................... 02/21/08 4.580 14,108,872
5,000,000 Yale University ........................................... 01/11/08 4.366 4,993,958
--------------
Total Commercial Paper .................................... 1,134,742,974
--------------
CORPORATE BONDS (12.5%)
10,000,000 Associates Corp. of North America ......................... 11/01/08 6.250 10,103,370
12,000,000 BNP Paribas(1) ............................................ 07/03/08 5.165 11,997,601
5,000,000 Credit Suisse USA, Inc.(1) ................................ 06/02/08 5.234 5,002,906
3,230,000 Dell, Inc. ................................................ 04/15/08 6.550 3,241,936
15,550,000 General Electric Capital Corp.(1) ......................... 01/03/08 5.290 15,550,204
25,000,000 General Electric Capital Corp.(1) ......................... 05/19/08 5.025 24,998,289
2,500,000 General Electric Capital Corp.(1) ......................... 08/22/08 4.966 2,498,415
1,747,000 General Electric Capital Corp. ............................ 10/15/08 3.600 1,732,927
3,750,000 General Electric Capital Corp.(1) ......................... 10/24/08 5.065 3,749,279
4,900,000 Hewlett-Packard Co. ....................................... 03/15/08 3.625 4,883,500
10,000,000 HSBC Finance Corp. ........................................ 03/11/08 4.125 9,977,186
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 5
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
CORPORATE BONDS (continued)
$ 4,420,000 HSBC Finance Corp. ........................................ 06/17/08 6.400% $ 4,444,894
15,850,000 International Lease Finance Corp. ......................... 06/02/08 4.625 15,803,897
7,500,000 John Deere Capital Corp. .................................. 01/15/08 3.900 7,495,934
6,850,000 John Deere Capital Corp.(1) ............................... 09/25/08 5.038 6,850,000
5,000,000 JP Morgan Chase & Co. ..................................... 10/15/08 5.750 5,040,200
20,000,000 JP Morgan Chase & Co.(1) .................................. 12/22/08 4.934 19,962,652
10,000,000 Lehman Brothers Holdings, Inc. ............................ 08/07/08 3.500 9,890,044
20,000,000 Morgan Stanley(1) ......................................... 01/11/08 4.618 19,995,375
4,062,000 Morgan Stanley ............................................ 04/01/08 3.625 4,045,702
15,250,000 National Rural Utilities Cooperative
Finance Corp. .......................................... 02/15/08 3.875 15,227,099
20,000,000 NGSP, Inc.(1) ............................................. 06/01/46 5.100 20,000,000
25,000,000 PNC Bank NA(1) ............................................ 01/02/08 5.170 24,999,983
19,920,000 PNC Funding Corp. ......................................... 03/10/08 4.200 19,878,888
25,000,000 Wachovia Bank NA(1) ....................................... 10/03/08 4.320 24,919,032
16,000,000 Wells Fargo & Co. ......................................... 03/10/08 4.125 15,968,276
--------------
Total Corporate Bonds ..................................... 308,257,589
--------------
MUNICIPAL BONDS (3.9%)
5,500,000 Broward County, Florida, Airport
Facility Revenue(1) .................................... 01/02/08 5.100 5,500,000
5,470,000 Cleveland, Ohio Airport System
Revenue ................................................ 01/01/17 7.000 5,524,700
33,600,000 New York City Transitional Finance
Authority(1) ........................................... 01/02/08 4.950 33,600,000
10,745,000 Portland, Maine(1) ........................................ 01/02/08 4.850 10,745,000
1,935,000 Private Colleges & Universities
Authority(1) ........................................... 01/02/08 4.850 1,935,000
36,000,000 Texas State(1) ............................................ 01/02/08 5.080 36,000,000
3,050,000 Texas State(1) ............................................ 01/03/08 5.000 3,050,000
--------------
Total Municipal Bonds ..................................... 96,354,700
--------------
MUTUAL FUND (1.4%)
34,513,000 Reserve U.S. Government Fund 12 ........................... 12/01/49 5.053 34,513,000
--------------
The accompanying notes are an integral part of these financial statements.
6
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS (3.6%)
$ 25,000,000 Federal Home Loan Bank .................................... 01/16/08 4.354% $ 24,954,792
25,000,000 Federal National Mortgage Assoc ........................... 01/24/08 4.328 24,931,160
12,490,000 Federal National Mortgage Assoc ........................... 03/20/08 4.292 12,373,513
25,000,000 Federal Home Loan Mortgage Corp. .......................... 01/17/08 4.324 24,952,111
--------------
Total U.S. Government Agency
Obligations ............................................... 87,211,576
--------------
REPURCHASE AGREEMENTS (13.2%)
75,000,000 BNP Paribas (Agreement dated 12/31/07
collateralized by FNMA 6.000%,
due 12/01/37, value $76,500,001) ......................... 01/02/08 4.500 75,000,000
100,000,000 Deutsche Bank (Agreement dated 12/31/07
collateralized by FMAC 4.500%-6.500%,
due 09/01/20-11/01/36, value
$77,600,436; and FNMA 5.367%,
due 04/01/37, value $24,399,564)......................... 01/02/08 4.750 100,000,000
75,000,000 Royal Bank of Canada (Agreement dated 12/31/07
collateralized by FMAC 4.500%-7.000%,
due 01/01/22-11/01/37, value $25,921,536;
FNMA 3.843%-6.500%, due 07/01/19-09/01/47,
value $38,764,685, and GNMA 5.000%-7.000%,
due 09/15/33-09/20/37, value $11,813,780) ................ 01/02/08 4.750 75,000,000
75,000,000 Societe Generale (Agreement dated
12/31/07 collateralized by FNMA
4.500%-7.220%, due 10/01/33-08/01/45,
value $76,500,000) ....................................... 01/02/08 4.600 75,000,000
--------------
Total Repurchase Agreements .............................. 325,000,000
--------------
TOTAL INVESTMENTS AT AMORTIZED COST ...................................... 99.7% $2,454,698,477
OTHER ASSETS IN EXCESS OF LIABILITIES .................................... 0.3 7,196,245
----- --------------
NET ASSETS ............................................................... 100.0% $2,461,894,722
===== ==============
- ----------
(1) Variable rate instrument. Interest rates change on specific dates (such as
coupon or interest payment date). The yield shown represents the December
31, 2007 coupon or interest rate.
Abbreviations:
FMAC - Financial Markets Association of Canada
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 7
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2007 (unaudited)
ASSETS:
Investments, at amortized cost ........................... $2,129,698,477
Repurchase agreements .................................... 325,000,000
Interest and other receivables ........................... 9,366,714
--------------
Total Assets ......................................... 2,464,065,191
--------------
LIABILITIES:
Due to Brown Brothers Harriman ........................... 140,770
Payables for:
Administrative fees .................................... 893,896
Dividends declared ..................................... 561,627
Shareholder servicing fees ............................. 269,606
Custody and accounting fees ............................ 64,000
Professional fees ...................................... 61,820
Board of Trustees' fees ................................ 4,505
Accrued expenses and other liabilities ................... 174,245
--------------
Total Liabilities .................................... 2,170,469
--------------
NET ASSETS .................................................. $2,461,894,722
==============
Net Assets Consist of:
Paid in capital .......................................... $2,461,894,722
--------------
Net Assets .................................................. $2,461,894,722
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
REGULAR SHARES NET ASSET VALUE
($1,390,629,255 / 1,390,628,772 shares outstanding) ...... $1.00
=====
INSTITUTIONAL SHARES NET ASSET VALUE
($1,071,265,467 / 1,071,265,950 shares outstanding) ...... $1.00
=====
The accompanying notes are an integral part of these financial statements.
8
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2007 (unaudited)
NET INVESTMENT INCOME:
Income:
Investment income ......................................... $61,460,952
-----------
Expenses:
Investment advisory and administrative fees ............... 2,553,346
Shareholder servicing fees ................................ 1,630,569
Custody and accounting fees ............................... 167,585
Board of Trustees' fees ................................... 90,877
Professional fees ......................................... 68,481
Miscellaneous expenses .................................... 240,977
-----------
Total Expenses .......................................... 4,751,835
-----------
Net Investment Income ....................................... $56,709,117
===========
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 9
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
December 31, 2007 year ended
(unaudited) June 30, 2007
----------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ................................. $ 56,709,117 $ 86,186,394
--------------- ---------------
Dividends and distributions declared:
From net investment income:
Regular Shares ...................................... (30,163,666) (67,612,111)
Institutional Shares ................................ (26,545,451) (18,574,283)
--------------- ---------------
Total dividends and distributions declared. ....... (56,709,117) (86,186,394)
--------------- ---------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold .................................... 1,609,701,109 3,932,442,373
Fund shares issued in reinvestment of dividends ..... 20,265,298 39,649,577
Fund shares repurchased ............................. (1,479,885,719) (3,165,839,507)
--------------- ---------------
Net increase in net assets resulting
from fund share transactions .................... 150,080,688 806,252,443
--------------- ---------------
NET ASSETS:
Beginning of year ....................................... 2,311,814,034 1,505,561,591
--------------- ---------------
End of period ........................................... $ 2,461,894,722 $ 2,311,814,034
=============== ===============
The accompanying notes are an integral part of these financial statements.
10
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Regular share outstanding throughout
each period
For the six
months ended
December 31, For the years ended June 30,
2007 -----------------------------------------------------------------
(unaudited) 2007 2006 2005 2004 2003
------------ ------ ------ ------ ------ ------
Net asset value,
beginning of year ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
Income from investment
operations:
Net investment
income ...................... 0.02 0.05 0.04 0.01 0.01 0.01
Dividends to shareholders from
net investment income ......... (0.02) (0.05) (0.04) (0.01) (0.01) (0.01)
------ ------ ------ ------ ------ ------
Net asset value,
end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return ..................... 2.36% 4.97% 3.76% 1.72% 0.59% 1.06%
Ratios/ Supplemental data:
Net assets, end of period
(in millions) ............... $1,391 $1,172 $1,506 $1,258 $1,375 $1,459
Ratio of expenses to
average net assets .......... 0.51%(1) 0.51%(2) 0.53%(2) 0.52%(2) 0.52%(2) 0.52%(2)
Ratio of net investment
income to average
net assets .................. 4.63%(1) 4.79%(2) 3.75%(2) 1.70%(2) 0.59%(2) 1.05%(2)
- ----------
(1) Annualized.
(2) Ratios include the Fund's share income, expenses paid by, and the expense
offset arrangement of, the BBH US Money Market Portfolio, which the Fund
invested in through June 12, 2007, as appropriate.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 11
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for an Institutional share outstanding
throughout the period
For the period from
For the six January 26, 2007
months ended (commencement of
December 31, 2007 operations) through
(unaudited) June 30, 2007
----------------- -------------------
Net asset value, beginning of period ....................... $ 1.00 $ 1.00
Income from investment operations:
Net investment income ................................... 0.02 0.02
Dividends to shareholders from net investment income ....... (0.02) (0.02)
------ ------
Net asset value, end of period ............................. $ 1.00 $ 1.00
====== ======
Total return ............................................... 2.48% 2.21%(1)
Ratios/ Supplemental data:
Net assets, end of period (in millions) ................. $1,071 $1,140
Ratio of expenses to average net assets.................. 0.26%(2) 0.26%(2),(3)
Ratio of net investment income to average net assets .... 4.87%(2) 5.07%(2),(3)
- ----------
(1) Inception to date return.
(2) Annualized.
(3) Ratios include the Fund's share of income, expenses paid by, and the
expense offset arrangement of, the BBH US Money Market Portfolio, which
the Fund invested in through June 12, 2007, as appropriate.
The accompanying notes are an integral part of these financial statements.
12
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 (unaudited)
1. Organization and Significant Accounting Policies. BBH Money Market Fund
(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 Trust is an open-end management investment company organized as a
Massachusetts business trust on June 7, 1983 and re-organized as a
Delaware statutory trust on June 12, 2007. The Fund commenced operations
on December 12, 1983. The Declaration of Trust permits the Trustees to
create an unlimited number of series, each of which may issue a separate
class of shares. The Fund established a new class of shares designated as
"Institutional Shares". Institutional Shares opened on December 19, 2006
and commenced operations on January 26, 2007. Regular Shares and
Institutional Shares have different operating expenses. At December 31,
2007, there were seven series of the Trust.
Prior to June 12, 2007 the Fund invested all of its investable assets in
the BBH U.S. Money Market Portfolio (the "Portfolio"), a diversified,
open-end management investment company having the same investment
objectives as the Fund. Effective June 12, 2007, the Fund redeemed its
shares of the Portfolio and began investing its assets directly. There
were no changes to the Fund's investment policies and restrictions. The
Fund recorded its share of the Portfolios' income and expenses daily until
the date of the redemption.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which
require management to make certain estimates and assumptions at the date
of the financial statements and are based, in part, on the following
accounting policies. Actual results could differ from those estimates.
A. Valuation of Investments. The Fund values its investments at
amortized cost, which approximates market value. The amortized cost
method values a security at its cost at the time of purchase and
thereafter assumes a constant amortization to maturity of any
discount or premium. The Fund's use of amortized cost is in
compliance with Rule 2a-7 of the Investment Company Act of 1940.
B. Investment Transactions and Income. Investment transactions are
accounted for on the trade date. Realized gains and losses, if any,
from investment transactions are determined on the basis of
identified cost. Interest income consists of interest accrued and
discount earned (including both original issue and market discount)
and premium amortization on the investments of the Fund, accrued
ratably to the date of maturity.
C. Repurchase Agreements. The Fund may enter into repurchase agreements
with primary dealers of U.S. Government Obligations as designated by
the Federal Reserve Bank of New York. 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 exceeds the sale price, reflecting
the Fund's return on the transaction or effectively the interest
rate paid by the
FINANCIAL STATEMENT DECEMBER 31, 2007 13
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
dealer to the Fund. This return is unrelated to the interest 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 or sub-custodian will monitor the value of the
underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price. Repurchase
agreements are subject to credit risks. Information regarding
repurchase agreements is included in the Portfolio of Investments.
D. Federal Income Taxes. Each series of the Trust is treated as a
separate entity for federal income tax purposes. It is the Fund's
policy to comply with the provisions of the Internal Revenue 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. At
December 31, 2007, the cost of investments for federal income tax
purposes was equal to the amortized cost of investments for
financial statement purposes.
E. Dividends and Distributions to Shareholders. Dividends from net
investment income are declared daily and paid monthly to
shareholders. The Fund declared dividends in the amounts of
$30,163,666 and $26,545,451 to Regular and Institutional
shareholders, respectively, during the six months ended December 31,
2007. The Fund declared dividends in the amount of $67,612,111 and
$18,574,283 to Regular and Institutional shareholders during the
year ended June 30, 2007. The tax character of the dividends
declared in the six months and year ended was 100% ordinary income.
F. Accounting Developments. During the current year, the Fund adopted
FASB Interpretation No. 48 "Accounting for Uncertainty in Income
Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in
the financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the
current year. The adoption of FIN 48 had no impact on the operations
of the Fund for the period ended December 31, 2007.
In September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective
for fiscal years beginning after November 15, 2007. SFAS 157 defines
fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is
currently evaluating the implication of SFAS 157. At this time its
impact on the Fund's financial statements has not yet been
determined.
14
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
2. Transactions with Affiliates.
Investment Advisory and Administrative Fees. Effective June 12, 2007,
under a combined Investment Advisory and Administrative Services Agreement
("Agreement") with the Trust, Brown Brothers Harriman & Co. ("BBH")
provides investment advice, portfolio management and administrative
services to the Fund. BBH receives a combined fee from the Fund for
investment advisory and administrative services calculated daily and paid
monthly at an annual rate equivalent to 0.25% on the first $1,000,000,000
of the Fund's average daily net assets and 0.20% of the Fund's average
daily net assets in excess of $1,000,000,000. Prior to June 12, 2007,
under a separate agreement that covered only investment advisory fees, BBH
received a fee from the Fund calculated daily and paid monthly. This fee
was allocated to the Fund from the Portfolio in which the Fund invested
and was calculated at an annual rate of 0.15% of the Portfolio's average
daily net assets. Brown Brothers Harriman Trust Company, LLC ("BBHTC") the
Fund's administrator, under a separate agreement that covered only
administrative services, received a fee from the Fund calculated daily and
paid monthly at an annual rate equivalent to 0.10% of the Fund's average
daily net assets. BBH has a sub-administration services agreement with
Federated Services Company ("FSC") for which FSC receives compensation
paid by BBH. For the six months ended December 31, 2007, the Fund incurred
$2,553,346 for investment advisory and administrative services.
Shareholder Servicing Fees. The Trust has a shareholder servicing
agreement with Brown Brothers Harriman ("BBH") for which BBH receives a
fee from the Fund calculated daily and paid monthly at an annual rate of
0.25% of the Regular shares' average daily net assets. For the six months
ended December 31, 2007, the Fund incurred $1,630,569 for shareholder
servicing services.
Custody and Accounting Fees. BBH acts as a custodian and receives a
custody and accounting fee from the Fund calculated daily and paid
monthly. The custody fee is a transaction based fee with an annual minimum
of $20,000, and the accounting fee is calculated at 0.01% per annum on the
first $1 billion of net assets and 0.005% per annum on all net assets over
$1 billion. For the six months ended December 31, 2007, the Fund incurred
$167,585 for custody and accounting services. 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 be charged interest based on LIBOR on the day of
the overdraft plus one percent. The total interest paid by the Fund for
the six months ended December 31, 2007 was $12,577.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
six months ended December 31, 2007, the Fund incurred $90,877 for
Trustees' fees.
FINANCIAL STATEMENT DECEMBER 31, 2007 15
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
3. Capital Stock. The Trust is permitted to issue an unlimited number of
Regular Shares and Institutional Shares of capital stock, at no par value.
Transactions in shares of capital stock were as follows:
Shares
----------------------------------------
For the six
months ended For the
December 31, 2007 year ended
(unaudited) June 30, 2007
----------------- ------------------
Regular Shares
Capital stock sold ............................. 874,416,155 2,210,338,409
Capital stock issued in connection with
reinvestment of dividends ................... 11,054,171 31,844,261
Capital stock redeemed ......................... (666,967,931) (2,575,617,884)
------------ --------------
Net increase (decrease) ........................ 218,502,395 (333,435,214)
============ ==============
Shares
----------------------------------------
For the period from
For the six January 26, 2007
months ended (commencement of
December 31, 2007 operations) to
(unaudited) June 30, 2007
----------------- -------------------
Institutional Shares
Capital stock sold ............................. 735,284,954 1,722,103,964
Capital stock issued in connection with
reinvestment of dividends ................... 9,211,127 7,805,316
Capital stock redeemed ......................... (812,917,788) (590,221,623)
------------ ------------
Net increase (decrease) ........................ (68,421,707) 1,139,687,657
============ ============
16
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
December 31, 2007 (unaudited)
EXAMPLE
As a shareholder of BBH Money Market Fund (the "Fund"), you may incur two types
of costs: (1) transaction costs on purchase payments, reinvested dividends, or
other distributions; and exchange fees; and (2) ongoing costs, including
management fees; and other Fund expenses. This Example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2007 to December 31, 2007).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
FINANCIAL STATEMENT DECEMBER 31, 2007 17
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES (continued)
December 31, 2007 (unaudited)
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2007
July 1, 2007 December 31, 2007 to December 31, 2007(1)
------------- ----------------- -----------------------
Regular Shares
Actual .................. $1,000 $1,023.60 $2.59
Hypothetical(2) ......... $1,000 $1,022.57 $2.59
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2007
July 1, 2007 December 31, 2007 to December 31, 2007(1)
------------- ----------------- -----------------------
Institutional Shares
Actual .................. $1,000 $1,024.80 $1.32
Hypothetical(2) ......... $1,000 $1,023.83 $1.32
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.51% and
0.26% for Regular and Institutional shares, respectively multiplied by
184/366 (to reflect the one half-year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio for each class of
shares is subtracted from the assumed return before expenses.
18
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION
December 31, 2007 (unaudited)
Approval of Investment Advisory/Administrative Services Agreement
At a meeting held on December 11, 2006, the Board of Trustees (the "Board") of
the Trust unanimously approved a new Combined Investment Advisory/Administrative
Services Agreement ("Combined Agreement"). The Board determined that the terms
of the Combined Agreement will be substantially identical to those of the
current advisory and administration agreements of the Funds, noting that the
most significant difference in the Combined Agreement is a single fee for both
advisory and administrative services. The following is a summary of the factors
the Board took into consideration in making its determination to approve the new
Combined Agreement.
Nature, Extent and Quality of Services Provided by Brown Brothers Harriman & Co.
("BBH")
The Board noted that, under the Combined Agreement in respect of each Fund, BBH,
subject to the supervision of the Board, will be responsible for providing a
continuous investment program and making purchases and sales of portfolio
securities consistent with the Funds' investment objective and policies. Under
the Combined Agreement, BBH also provides administrative services to each Fund.
The Board considered the scope and quality of services to be provided by BBH
under the Combined Agreement and noted that the scope of services provided had
expanded over time, primarily, as a result of regulatory developments. The Board
noted that, for example, BBH is responsible for maintaining and monitoring its
own and, to varying degrees, the Funds' compliance program, and these compliance
programs have recently been refined and enhanced in light of new regulatory
requirements. The Board considered the quality of the investment research and
administrative capabilities of BBH and the other resources it has dedicated to
performing services for the Funds. The Board concluded that, overall, they were
satisfied with the nature, extent and quality of services expected to be
provided to each of the Funds under the Combined Agreement.
Costs of Services Provided and Profitability to BBH
At the request of the Board, BBH provided information concerning the
profitability of BBH's current investment company advisory and other fees. The
Board also reviewed BBH's profitability data for each Fund, which also included
the effect of revenue generated by the shareholder servicing, administration,
custody and other fees paid by the Fund. The Board discussed the difficulty of
making comparisons of profitability because comparative information is not
generally publicly available and is affected by numerous factors, including the
structure of the service provider, the types of funds it manages and
administers, its business mix, numerous assumptions regarding allocations and
the entity's capital structure and cost of capital. In considering profitability
information, the Board considered the effect of fall-out benefits on BBH's
expenses, as well as the "revenue sharing" arrangements BBH has entered into
with certain entities that distribute shares of the Funds. The Board focused on
profitability of BBH's relationships with the Funds before taxes and
distribution expenses. The Board concluded that it was satisfied that BBH's
level of profitability from its relationship with each Fund was not excessive.
FINANCIAL STATEMENT DECEMBER 31, 2007 19
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
Fall-Out Benefits
The Board considered that BBH does not allocate the Funds' portfolio
transactions for third party research, although it did benefit from proprietary
research received from brokers that execute the Funds' purchases and sales of
securities. The Board recognized that the aggregate amount of commissions
generated by Fund transactions was unlikely to result in the Funds receiving
from full service broker dealers substantial discounts on commission rates. The
Board received and reviewed information concerning BBH's policies with respect
to allocating portfolio brokerage.
The Board also considered that BBH receives shareholder servicing fees from
certain funds, and is the Funds' administrator, custodian and securities lending
agent. The Board noted that BBH retained no portion of the 12b-1 fees paid by
any Fund that operated with a Rule 12b-1 plan. The Board recognized that BBH's
profitability would be somewhat lower if it did not receive proprietary research
for commissions or, if it did not receive the other benefits described above.
The Board recognized that most Fund shareholders were also BBH clients, and that
substantial assets are invested in the Funds as a result of an overall
investment management program for the shareholder. The Board noted that the
Funds also derive reputational and other benefits from their association with
BBH and their use of the BBH name, which is licensed to the Funds by BBH. Thus,
the Board did not believe that BBH revenues associated with its clients should
be fairly regarded as "fallout" benefit from the Funds.
Economies of Scale
The Board noted that the Funds' combined fee schedules, other than the fee
schedule for BBH Money Market Fund, do not contain breakpoints. As a result, if
assets increase, the fee rates would not be reduced for these Funds on the
incremental assets. With respect to the BBH Money Market Fund, the breakpoint
will be reviewed every three (3) years by the Board, and may be adjusted upwards
to take into account the effects of inflation or such other basis as may be
appropriate, subject to the approval of shareholders to the extent required by
the 1940 Act.
There may be other economies of scale because many expenses did not rise (and
fall) proportionally to increases (and decreases) in total net assets. The Board
noted that BBH had priced its services in recognition of the fact that it was
largely its own clients who were shareholders and, accordingly, sought to assure
that the cost of these services and total expenses for each Fund were fair and
reasonable. In addition, the Board noted that over the years BBH had supported
certain Funds through fee waivers and expense reimbursements. Based on
information they had been provided over many years, the Board observed that in
the mutual fund industry as a whole, as well as among funds similar to the
Funds, there appeared to be no uniformity or pattern in the fees and asset
levels at which breakpoints (if any) apply. In light of the Funds' current size
and expense structure, the Board concluded that it was unnecessary at this time
to consider breakpoints with respect to the Funds, other than for the BBH Money
Market Fund.
20
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
Investment Results
The Board considered the investment results of each of the Funds as compared to
investment companies with its peers and with one or more selected securities
indices. In addition to the information received by the Board for the meeting
held on December 11, 2006, the Board received detailed performance information
for each Fund at each regular Board meeting during the year. At the meeting held
on December 11, 2006, the Board reviewed information showing performance of each
Fund compared to its peers over the prior 1-, 3-, and 5- year periods and
compared the performance information to one or more securities indices over
comparable periods.
Combined Fee Rate
The Board considered the fee rate to be paid by each Fund to BBH. The Board
recognized that it is difficult to make comparisons of these fee rates, and the
combined advisory and administration fees, because there are variations in the
services that are included in the fees paid by other funds.
The Board considered the depth and range of services provided under the Combined
Agreement. For example, in addition to a continuous investment program, BBH
provides, among other things, officers (including the Funds' Chief Compliance
Officer and officers to provide required certifications) and administrative
services, such as shareholder communications, and tax compliance, with the
attendant costs and exposure to liability. BBH also coordinates the provision of
services to the Funds by nonaffiliated service providers.
The following factors specific to BBH Money Market Fund also were noted and
considered by the Board in deciding to approve the Combined Agreement:
The Board reviewed information showing performance of the BBH Money Market Fund
compared to other funds in the iMoneyNet (1st Tier Retail) and (1st Tier
Institutional). The comparative information showed that the BBH Money Market
Fund had outperformed or performed in line with the averages over all relevant
periods. The Board also viewed with favor that the total expense ratio was
substantially lower than the averages in these categories. The Board also noted
that the BBH Money Market Fund had maintained a stable net asset value of one
dollar at all times. Taking into account these comparisons and the other factors
considered, the Board concluded that the BBH Money Market Fund's investment
results over time and expense ratios had been satisfactory.
Conflicts of Interest
As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a Fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other. For example, it is possible that the various accounts
managed could have different investment strategies that, at times, might
conflict with one another to the possible detriment of the Fund. Alternatively,
to the extent that the same investment opportunities might be
FINANCIAL STATEMENT DECEMBER 31, 2007 21
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
desirable for more than one account, possible conflicts could arise in
determining how to allocate them. Other potential conflicts might include
conflicts created by specific portfolio manager compensation arrangements, and
conflicts relating to selection of brokers or dealers to execute Fund portfolio
trades and/or specific uses of commissions from Fund portfolio trades (for
example, research, or "soft dollars").
BBH has adopted and implemented policies and procedures, including brokerage and
trade allocation policies and procedures, which it believes address the
conflicts associated with managing multiple accounts for multiple clients. In
addition, BBH monitors a variety of areas, including compliance with account
investment guidelines, the inclusion only of securities approved for purchase by
the BBH's Fixed Income Credit Committee, and compliance with the BBH's Code of
Ethics. Finally, BBH has structured the portfolio managers' compensation in a
manner, and the Funds have adopted policies and procedures, reasonably designed
to safeguard a Fund from being negatively affected as a result of any such
potential conflicts.
22
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
To obtain information or make shareholder inquiries:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
On the internet: www.bbhfunds.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
The BBH U.S. Money Market Portfolio files with the SEC a complete schedule of
its portfolio holdings, as of the close of the first and third quarters of its
fiscal year, on "Form N-Q." Information on Form N-Q is available without charge
and upon request by calling the Funds at the toll-free number listed above. A
text only version can be viewed online or downloaded from the SEC's website at
http://www.sec.gov; and may be reviewed and copied at the SEC's Public Reference
Room in Washington, DC (call 1-800-SEC-0330 for information on the operation of
the Public Reference Room). You may also access this information from the BBH
website at BBH.com by clicking on "BBH Mutual Funds" and selecting "Online
Documents/Holdings Information."
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2007
BBH TAX-EXEMPT MONEY FUND
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2007 (unaudited)
BREAKDOWN BY BOND TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
Certificate of Participation....................... $ 2,100,000 0.6%
Education.......................................... 89,872,000 23.7
General Obligations................................ 105,924,197 27.9
Health Care........................................ 36,870,000 9.7
Industrial......................................... 19,480,000 5.1
Miscellaneous...................................... 25,617,205 6.7
Special Tax........................................ 2,505,000 0.7
Transportation..................................... 28,590,258 7.5
Utilities.......................................... 13,505,011 3.6
Water/Sewer........................................ 14,151,151 3.7
Commercial Paper................................... 36,900,000 9.7
Other Assets in Excess of Liabilities.............. 4,276,113 1.1
------------ -----
Net Assets......................................... $379,790,935 100.0%
============ =====
TOP FIVE HOLDINGS BY STATE
Percent of
U.S. $ Value Net Assets
------------ ----------
Pennsylvania....................................... $ 37,375,000 9.8%
New York........................................... 33,902,017 8.9
North Carolina..................................... 33,609,936 8.9
Maryland........................................... 31,497,501 8.3
Texas ............................................ 17,667,160 4.7
Other States....................................... 221,463,208 58.3
Other Assets in Excess of Liabilities.............. 4,276,113 1.1
------------ -----
Net Assets......................................... $379,790,935 100.0%
============ =====
All data as of December 31, 2007. The Fund's breakdown by bond type and top five
holdings by state are expressed as a percentage of net assets and may vary over
time.
The accompanying notes are an integral part of these financial statements.
2
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (89.2%)
CERTIFICATE OF PARTICIPATION (0.6%)
$ 2,100,000 Denver, Colorado, City & County(1) ........... 01/02/08 3.400% $ 2,100,000
------------
EDUCATION(1) (23.7%)
1,017,000 Chicago Board of Education ................... 01/02/08 3.750 1,017,000
6,175,000 Colorado Springs, Colorado ................... 01/02/08 3.700 6,175,000
2,000,000 Connecticut State Health &
Educational Facilities Authority............ 01/02/08 3.300 2,000,000
900,000 Connecticut State Health &
Educational Facilities Authority............ 01/02/08 3.550 900,000
1,400,000 Curators University of Missouri .............. 01/02/08 3.750 1,400,000
14,650,000 Indiana Health & Educational
Facilities Financing Authority ............. 01/02/08 3.440 14,650,000
1,275,000 Indiana University ........................... 01/02/08 3.400 1,275,000
7,215,000 Maryland State Health & Higher
Education Facilities Authority ............. 01/03/08 3.380 7,215,000
3,205,000 Missouri State Health & Educational
Facilities Authority ....................... 01/02/08 3.500 3,205,000
1,300,000 Missouri State Health & Educational
Facilities Authority ....................... 01/02/08 3.750 1,300,000
3,050,000 Missouri State Health & Educational
Facilities Authority ....................... 01/02/08 3.750 3,050,000
1,500,000 New Hampshire Health & Education
Facilities Authority ....................... 01/02/08 3.380 1,500,000
5,300,000 New Hampshire Health & Education
Facilities Authority ....................... 01/02/08 3.380 5,300,000
4,650,000 New Hampshire Health & Education
Facilities Authority ....................... 01/02/08 3.750 4,650,000
5,325,000 New Hampshire Health & Education
Facilities Authority ....................... 01/02/08 3.750 5,325,000
1,300,000 Ohio State Higher Educational
Facilities Revenue ......................... 01/02/08 3.380 1,300,000
3,260,000 Ohio State University ........................ 01/03/08 3.210 3,260,000
1,000,000 Ohio State University ........................ 01/04/08 3.150 1,000,000
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 3
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
EDUCATION (continued)
$ 3,000,000 Pennsylvania State Higher Educational
Facilities Authority ....................... 01/03/08 3.420% $ 3,000,000
1,400,000 Pennsylvania State University ................ 01/03/08 3.390 1,400,000
1,990,000 University of Michigan ....................... 01/02/08 3.750 1,990,000
2,600,000 University of Missouri ....................... 01/02/08 3.750 2,600,000
1,000,000 University of Pittsburgh ..................... 01/02/08 3.300 1,000,000
1,250,000 University of Pittsburgh ..................... 01/02/08 3.300 1,250,000
6,350,000 University of Pittsburgh ..................... 01/02/08 3.300 6,350,000
555,000 University of Pittsburgh ..................... 01/02/08 3.400 555,000
4,655,000 University of Pittsburgh ..................... 01/03/08 3.380 4,655,000
400,000 University of Pittsburgh ..................... 01/03/08 3.400 400,000
1,050,000 University of Virginia ....................... 01/02/08 3.400 1,050,000
1,000,000 Utah State Board of Regents .................. 01/02/08 3.750 1,000,000
100,000 Virginia Commonwealth University ............. 01/02/08 3.800 100,000
------------
Total Education ........................................... 89,872,000
------------
GENERAL OBLIGATIONS (27.9%)
1,000,000 Boston, Massachusetts ........................ 01/01/08 4.000 1,000,000
1,850,000 Charlotte, North Carolina .................... 07/01/08 4.250 1,861,760
3,000,000 Dallas, Texas, Independent
School District ............................ 02/15/08 5.000 3,005,609
725,000 Delaware State ............................... 04/01/08 5.250 729,147
1,800,000 Delaware State ............................... 07/01/08 5.000 1,811,836
605,000 Denton, Texas, Independent
School District(1) ......................... 01/03/08 3.430 605,000
2,385,000 District of Columbia(1) ...................... 01/02/08 3.450 2,385,000
1,000,000 Fairfax County, Virginia ..................... 06/01/08 4.250 1,002,006
6,000,000 Fairfax County, Virginia ..................... 06/01/08 5.000 6,052,607
606,000 Georgia State(1) ............................. 01/03/08 3.320 606,000
4,000,000 Georgia State ................................ 03/01/08 5.000 4,008,912
2,000,000 Houston, Texas ............................... 03/01/08 5.000 2,006,551
1,050,000 Las Vegas Valley, Nevada,
Water District ............................. 06/01/08 5.000 1,055,487
The accompanying notes are an integral part of these financial statements.
4
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
GENERAL OBLIGATIONS (continued)
$ 5,000,000 Maryland State ............................... 02/01/08 5.000% $ 5,005,530
2,560,000 Maryland State ............................... 08/01/08 5.000 2,579,548
2,500,000 Massachusetts State(1) ....................... 01/02/08 3.460 2,500,000
600,000 Mecklenburg County, North Carolina(1) ........ 01/02/08 3.470 600,000
630,000 Mecklenburg County, North Carolina(1) ........ 01/02/08 3.470 630,000
3,140,000 Mecklenburg County, North Carolina(1) ........ 01/03/08 3.480 3,140,000
1,000,000 Metropolitan Council, Minneapolis ............ 03/01/08 5.000 1,002,212
620,000 Minneapolis, Minnesota(1) .................... 01/03/08 3.270 620,000
2,000,000 Minneapolis, Minnesota(1) .................... 01/03/08 3.270 2,000,000
8,900,000 Minneapolis, Minnesota(1) .................... 01/03/08 3.270 8,900,000
1,300,000 Minneapolis, Minnesota ....................... 03/01/08 5.000 1,302,674
4,850,000 Montgomery County, Maryland(1) ............... 01/02/08 3.700 4,850,000
2,975,000 Montgomery County, Maryland .................. 05/01/08 5.000 2,989,244
1,835,000 Montgomery County, Maryland .................. 07/01/08 5.000 1,849,426
1,260,000 Nevada State ................................. 05/15/10 5.250 1,270,297
700,000 New York, New York(1) ........................ 01/02/08 3.370 700,000
400,000 New York, New York(1) ........................ 01/02/08 3.570 400,000
1,150,000 North Carolina State ......................... 03/01/08 5.000 1,152,365
3,000,000 North Carolina State ......................... 03/01/08 5.000 3,009,316
800,000 North Carolina State ......................... 04/01/08 4.000 800,630
2,500,000 North Carolina State ......................... 06/01/08 5.000 2,513,605
2,000,000 Oregon State(1) .............................. 01/02/08 3.700 2,000,000
2,800,000 Oregon State(1) .............................. 01/02/08 3.700 2,800,000
1,000,000 Richardson, Texas, Independent
School District(1) ......................... 01/03/08 3.420 1,000,000
1,050,000 South Carolina State ......................... 08/01/08 5.000 1,060,028
4,500,000 Utah State ................................... 07/01/08 4.000 4,510,759
5,000,000 Utah State ................................... 07/01/08 4.000 5,006,025
950,000 Vermont State ................................ 03/01/08 5.000 952,122
4,385,000 Virginia Beach, Virginia ..................... 03/01/08 5.250 4,397,933
2,690,000 Wake County, North Carolina(1) ............... 01/03/08 3.420 2,690,000
500,000 Wake County, North Carolina .................. 02/01/08 5.000 500,592
3,000,000 Wake County, North Carolina .................. 04/01/08 5.000 3,011,668
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 5
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
GENERAL OBLIGATIONS (continued)
$ 4,030,000 Washington Suburban Sanitation
District ................................... 06/01/08 5.000% $ 4,050,308
------------
Total General Obligations ................................. 105,924,197
------------
HEALTH CARE(1) (9.7%)
2,000,000 New York State Dormitory Authority
Revenue .................................... 01/03/08 3.400 2,000,000
8,000,000 New York State Dormitory Authority
Revenue .................................... 01/03/08 3.420 8,000,000
2,530,000 Oklahoma State Industries Authority,
Hospital Revenue ........................... 01/02/08 3.750 2,530,000
2,600,000 Philadelphia, Pennsylvania, Hospitals &
Higher Education Facilities Authority ...... 01/02/08 3.750 2,600,000
1,800,000 Philadelphia, Pennsylvania, Hospitals &
Higher Education Facilities Authority ...... 01/02/08 3.750 1,800,000
4,180,000 Royal Oak, Michigan, Hospital
Finance Authority .......................... 01/02/08 3.730 4,180,000
7,760,000 Royal Oak, Michigan, Hospital
Finance Authority .......................... 01/02/08 3.750 7,760,000
8,000,000 University of North Carolina
Hospital Revenue ........................... 01/02/08 3.740 8,000,000
------------
Total Health Care ......................................... 36,870,000
------------
INDUSTRIAL(1) (5.1%)
1,000,000 California Pollution Control
Financing Authority ........................ 01/02/08 3.420 1,000,000
2,000,000 Columbia, Alabama, Pollution Control
Revenue .................................... 01/02/08 3.750 2,000,000
600,000 Delaware County, Pennsylvania,
Industrial Development Authority............ 01/02/08 3.450 600,000
3,580,000 Delaware County, Pennsylvania,
Industrial Development Authority............ 01/02/08 3.750 3,580,000
2,500,000 Gulf Coast Waste Disposal Authority,
Texas ...................................... 01/02/08 3.570 2,500,000
The accompanying notes are an integral part of these financial statements.
6
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
INDUSTRIAL (continued)
$ 2,000,000 Harris County, Texas, Industrial
Development Corporation Solid
Waste Disposal Revenue ..................... 01/02/08 3.720% $ 2,000,000
2,000,000 Jackson County, Mississippi,
Port Facility Revenue ...................... 01/02/08 3.740 2,000,000
2,000,000 Kemmerer, Wyoming, Pollution Control
Revenue .................................... 01/02/08 3.570 2,000,000
2,000,000 Lincoln County, Wyoming, Pollution
Control Revenue ............................ 01/02/08 3.570 2,000,000
1,800,000 Sweetwater County, Wyoming,
Pollution Control Revenue .................. 01/02/08 3.750 1,800,000
------------
Total Industrial .......................................... 19,480,000
------------
MISCELLANEOUS (6.7%)
3,125,000 Alaska State Housing Finance Corp.
Revenue(1) ................................. 04/04/08 3.490 3,125,000
1,300,000 Colorado Housing & Finance Authority(1)....... 01/02/08 3.550 1,300,000
1,405,000 Indiana State Finance Authority
Revenue .................................... 02/01/08 5.000 1,406,560
2,605,000 Monmouth County, New Jersey,
Improvement Authority Revenue .............. 10/01/08 4.500 2,624,938
1,000,000 New York, New York, City Transitional
Finance Authority(1) ....................... 01/02/08 3.400 1,000,000
1,200,000 New York, New York, City Transitional
Finance Authority(1) ....................... 01/02/08 3.400 1,200,000
2,470,000 New York, New York, City Transitional
Finance Authority(1) ....................... 01/02/08 3.400 2,470,000
1,000,000 New York, New York, City Transitional
Finance Authority .......................... 11/01/08 5.000 1,015,596
1,000,000 New York, New York, City Transitional
Finance Authority .......................... 11/01/08 5.000 1,016,421
4,500,000 New York State Local Government
Assistance Corp.(1) ........................ 01/02/08 3.330 4,500,000
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 7
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
MISCELLANEOUS (continued)
$ 900,000 New York State Local Government
Assistance Corp.(1) ........................ 01/02/08 3.350% $ 900,000
1,200,000 Oklahoma State Capitol Improvement
Authority(1) ............................... 01/02/08 3.750 1,200,000
3,040,000 Palm Beach County, Florida, Public
Improvement Revenue ........................ 11/01/08 4.000 3,058,690
800,000 Will County, Illinois, Exempt
Facilities Revenue(1) ..................... 01/02/08 3.850 800,000
------------
Total Miscellaneous ....................................... 25,617,205
------------
SPECIAL TAX (0.7%)
1,300,000 Connecticut State Special Tax
Obligation Revenue(1) ...................... 01/02/08 3.430 1,300,000
1,205,000 Connecticut State Special Tax
Obligation Revenue(1) ...................... 01/02/08 3.550 1,205,000
------------
Total Special Tax ......................................... 2,505,000
------------
TRANSPORTATION (7.5%)
5,000,000 Alabama State Federal Highway
Finance Authority .......................... 03/01/08 5.000 5,011,242
2,000,000 Georgia State Road & Tollway
Authority Revenue .......................... 03/01/08 5.000 2,005,263
2,000,000 Joliet, Illinois, Regional Port District(1)... 01/02/08 3.570 2,000,000
2,000,000 Maryland State Department of
Transportation ............................. 05/01/08 5.000 2,008,753
3,200,000 Metropolitan Transportation Authority,
New York, Revenue(1) ....................... 01/03/08 3.350 3,200,000
2,365,000 Pennsylvania Turnpike Commission(1)........... 01/02/08 3.670 2,365,000
12,000,000 Pennsylvania Turnpike Commission(1)........... 01/03/08 3.390 12,000,000
------------
Total Transportation ...................................... 28,590,258
------------
The accompanying notes are an integral part of these financial statements.
8
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
UTILITIES (3.6%)
$ 2,250,000 Houston, Texas, Utility System
Revenue(1) ................................. 01/02/08 3.690% $ 2,250,000
1,760,000 Jacksonville, Florida, Electric
Authority Revenue(1) ....................... 01/02/08 3.450 1,760,011
1,500,000 Long Island Power Authority New York,
Electric System(1) ......................... 01/02/08 3.400 1,500,000
3,600,000 Municipal Electric Authority of
Georgia(1) ................................. 01/02/08 3.400 3,600,000
2,000,000 New York State Energy Research &
Development Authority(1) ................... 01/02/08 3.390 2,000,000
1,095,000 Tacoma, Washington, Electric System
Revenue .................................... 01/01/08 4.000 1,095,000
1,300,000 Washington State Public Power
Supply System(1) ........................... 01/02/08 3.400 1,300,000
------------
Total Utilities ........................................... 13,505,011
------------
WATER/SEWER (3.7%)
1,300,000 Boston, Massachusetts, Water &
Sewer Commission(1) ........................ 01/03/08 3.400 1,300,000
1,800,000 California State Department of
Water Resources(1) ......................... 01/02/08 3.560 1,800,000
1,000,000 Charlotte, North Carolina, Water &
Sewer Revenue(1) ........................... 01/03/08 3.480 1,000,000
1,000,000 Cobb County, Georgia, Water &
Sewer Revenue .............................. 07/01/08 5.000 1,010,339
3,200,000 Durham, North Carolina, Water &
Sewer Revenue(1) ........................... 01/02/08 3.450 3,200,000
1,000,000 Fairfax County, Virginia, Water
Authority Revenue .......................... 04/01/08 4.000 1,000,812
900,000 Massachusetts State Water
Resources Authority(1) ..................... 01/02/08 3.380 900,000
1,390,000 Massachusetts State Water
Resources Authority(1) ..................... 01/02/08 3.450 1,390,000
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 9
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2007 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
WATER/SEWER (continued)
$ 1,550,000 Massachusetts State Water
Resources Authority(1) ..................... 01/02/08 3.450% $ 1,550,000
1,000,000 Ohio State Solid Waste Revenue(1) ............ 01/02/08 3.850 1,000,000
------------
Total Water/Sewer ......................................... 14,151,151
------------
Total Municipal Bonds ..................................... 338,614,822
------------
COMMERCIAL PAPER (9.7%)
1,500,000 Board of Government, University of
North Carolina ............................. 02/06/08 3.280 1,500,000
1,800,000 Board of Regents of the Texas A&M
University ................................. 02/07/08 3.400 1,800,000
10,000,000 City & County of Honolulu, Hawaii ............ 01/03/08 3.330 10,000,000
1,800,000 King County, Washington ...................... 02/07/08 3.200 1,800,000
5,000,000 Maryland State Health & Higher
Education Facilities Authority ............. 01/08/08 3.300 5,000,000
3,000,000 Massachusetts State Health &
Educational Facilities Authority............ 01/07/08 2.930 3,000,000
2,000,000 Massachusetts State Health &
Educational Facilities Authority............ 02/05/08 3.330 2,000,000
3,300,000 Massachusetts Water Resources
Authority .................................. 01/17/08 3.350 3,300,000
4,000,000 New York City Municipal Water
Finance Authority .......................... 02/15/08 3.400 4,000,000
2,000,000 Private College & University Authority ....... 02/06/08 3.280 2,000,000
2,500,000 Texas Public Finance Authority ............... 02/07/08 3.520 2,500,000
------------
Total Commercial Paper .................................... 36,900,000
------------
TOTAL INVESTMENTS, AT AMORTIZED COST....................................... 98.9% $375,514,822
OTHER ASSETS IN EXCESS OF LIABILITIES...................................... 1.1 4,276,113
----- ------------
NET ASSETS................................................................. 100.0% $379,790,935
===== ============
- ----------
(1) Variable rate instrument. Interest rates change on specific dates (such as
coupon or interest payment date). The yield shown represents the December
31, 2007 coupon or interest rate.
The accompanying notes are an integral part of these financial statements.
10
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2007 (unaudited)
ASSETS:
Investments, at amortized cost ............................... $375,514,822
Cash ........................................................ 2,636,889
Interest receivable and other assets ........................ 2,117,978
------------
Total Assets .............................................. 380,269,689
------------
LIABILITIES:
Payables for:
Shareholder servicing fees ................................ 161,473
Investment advisory fees .................................. 98,366
Administrative fees ....................................... 65,577
Professional fees ......................................... 48,679
Dividends declared ........................................ 26,253
Custody and accounting fees ............................... 3,374
Board of Trustees' fees ................................... 1,000
Accrued expenses and other liabilities ...................... 74,032
------------
Total Liabilities ......................................... 478,754
------------
NET ASSETS, for 379,784,906 fund shares outstanding ............ $379,790,935
============
Net Assets Consist of:
Paid in capital ............................................. $379,790,935
------------
Net Assets ..................................................... $379,790,935
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE ................... $1.00
=====
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 11
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2007 (unaudited)
NET INVESTMENT INCOME:
Income:
Investment income ........................................... $6,921,913
----------
Expenses:
Shareholder servicing fees .................................. 489,137
Investment advisory fees .................................... 293,482
Administrative fees ......................................... 195,655
State registration fees ..................................... 104,539
Custody and accounting fees ................................. 37,645
Professional fees ........................................... 28,823
Board of Trustees' fees ..................................... 18,539
Miscellaneous expenses ...................................... 22,665
----------
Total Expenses ............................................ 1,190,485
Expense offset arrangement ................................ (14,300)
----------
Net Expenses .............................................. 1,176,185
----------
Net Investment Income ............................................ $5,745,728
==========
The accompanying notes are an integral part of these financial statements.
12
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
December 31, 2007 year ended
(unaudited) June 30, 2007
----------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ...................................... $ 5,745,728 $ 12,564,686
Dividends declared from net investment income ................ (5,742,827) (12,562,787)
------------- -------------
Net increase in net assets from operations ................. 2,901 1,899
------------- -------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold ......................................... 271,751,426 353,300,401
Fund shares issued in reinvestment of dividends .......... 3,214,038 6,378,787
Fund shares repurchased .................................. (223,413,768) (524,604,107)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions ......................... 51,551,696 (164,924,919)
------------- -------------
Total increase (decrease) in net assets ................ 51,554,597 (164,923,020)
NET ASSETS:
Beginning of year ............................................ 328,236,338 493,159,358
------------- -------------
End of period ................................................ $ 379,790,935 $ 328,236,338
============= =============
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2007 13
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
For the six
months ended
December 31, For the years ended June 30,
2007 -----------------------------------------------------------
(unaudited) 2007 2006 2005 2004 2003
------------- ------ ------ ------ ------ ------
Net asset value,
beginning of year............... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income........... 0.01 0.03 0.02 0.01 0.00(1) 0.01
Dividends to shareholders from
net investment income........... (0.01) (0.03) (0.02) (0.01) (0.00)(1) (0.01)
----- ----- ----- ----- ----- -----
Net asset value, end of period .... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Total return....................... 1.49% 3.03% 2.31% 1.15% 0.42% 0.72%
===== ===== ===== ===== ===== =====
Ratios/Supplemental data:
Net assets, end of period
(in millions)................. $380 $328 $493 $438 $453 $465
Net expenses paid by Fund ...... 0.60%(2) 0.58% 0.56% 0.56% 0.55% 0.56%
Expense offset arrangement ..... 0.01%(2) 0.01% 0.00%(3) 0.00%(3) 0.00%(3) 0.01%
----- ----- ----- ----- ----- -----
Total expenses................ 0.61%(2) 0.59% 0.56% 0.56% 0.55% 0.57%
===== ===== ===== ===== ===== =====
Ratio of net investment
income to average net
assets........................ 2.94%(2) 2.98% 2.31% 1.15% 0.42% 0.72%
- ----------
(1) Less than $0.01 per share.
(2) Annualized.
(3) Less than 0.01%.
The accompanying notes are an integral part of these financial statements.
14
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 (unaudited)
1. Organization and Significant Accounting Policies. BBH Tax Exempt Money
Fund (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 Trust is an open-end management investment company organized
as a Massachusetts business trust on June 7, 1983 and re-organized as a
Delaware statutory trust on June 12, 2007. The Fund commenced operations
on February 22, 1999. The Declaration of Trust permits the Trustees to
create an unlimited number of series, each of which may issue a separate
class of shares. The Trustees have authorized the issuance of an unlimited
number of shares of the Fund without a par value. At December 31, 2007,
there were seven series of the Trust.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which
require management to make certain estimates and assumptions at the date
of the financial statements and are based, in part, on the following
accounting policies. Actual results could differ from those estimates.
A. Valuation of Investments. The Fund values its investments at
amortized cost, which approximates market value. The amortized cost
method values a security at its cost at the time of purchase and
thereafter assumes a constant amortization to maturity of any
discount or premium. The Fund's use of amortized cost is in
compliance with Rule 2a-7 of the Investment Company Act of 1940.
B. Investment Transactions and Income. Investment transactions are
accounted for on the trade date. Realized gains and losses, if any,
from investment transactions are determined on the basis of
identified cost. The Fund invest primarily in debt securities issued
by municipalities. The ability of the issuers of the debt securities
to meet their obligation may be affected by economic developments in
a specific state or municipality. Interest income consists of
interest accrued and discount earned (including both original issue
and market discount) and premium amortization on the investments of
the Fund, accrued ratably to the date of maturity.
C. Federal Income Taxes. Each series of the Trust is treated as a
separate entity for federal income tax purposes. It is the Fund's
policy to comply with the provisions of the Internal Revenue 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. At
December 31, 2007, the cost of investments for federal income tax
purposes was equal to the amortized cost of investments for
financial statement purposes.
D. Dividends and Distributions to Shareholders. Dividends from net
investment income are declared daily and paid monthly to
shareholders. The Fund declared dividends in the amount of
$5,742,827 during the six months ended December 31, 2007. The Fund
declared dividends in the amounts of $12,562,787 and $11,095,940 for
the years ended June 30, 2007 and June 30, 2006, respectively. The
tax character of the dividends declared in the six months and years
ended was 100% tax exempt income.
FINANCIAL STATEMENT DECEMBER 31, 2007 15
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
E. Accounting Developments. During the current year, the Fund adopted
FASB Interpretation No. 48 "Accounting for Uncertainty in Income
Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in
the financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the
current year. The adoption of FIN 48 had no impact on the operations
of the Fund for the period ended December 31, 2007.
In September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective
for fiscal years beginning after November 15, 2007. SFAS 157 defines
fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is
currently evaluating the implication of SFAS 157. At this time its
impact on the Fund's financial statements has not yet been
determined.
2. Transactions with Affiliates.
Investment Advisory and Administrative Fees. Effective June 12, 2007,
under a combined Investment Advisory and Administrative Services Agreement
("Agreement") with the Trust, Brown Brothers Harriman & Co. ("BBH")
provides investment advice, portfolio management and administrative
services to the Fund. BBH receives a combined fee from the Fund for
investment advisory and administrative services calculated daily and paid
monthly at an annual rate equivalent to 0.25% of the Fund's daily net
assets. Prior to June 12, 2007, under a separate agreement that covered
only investment advisory fees, BBH received a fee from the Fund calculated
daily and paid monthly at an annual rate of 0.15% of the Fund's average
daily net assets and Brown Brothers Harriman Trust Company, LLC ("BBHTC")
the Fund's administrator, under a separate agreement that covered only
administrative services, received a fee from the Fund calculated daily and
paid monthly at an annual rate equivalent to 0.10% of the Fund's average
daily net assets. BBH has a sub-administration services agreement with
Federated Services Company ("FSC") for which FSC receives compensation
paid by BBH. For the six months ended December 31, 2007, the Fund incurred
$489,137 for investment advisory and administrative services.
Shareholder Servicing Fees. The Trust has a shareholder servicing
agreement with BBH for which BBH receives a fee from the Fund calculated
daily and paid monthly at an annual rate of 0.25% of the Fund's average
daily net assets. For the six months ended December 31, 2007, the Fund
incurred $489,137 for shareholder servicing services.
Custody and Accounting Fees. BBH acts as a custodian and receives a
custody and accounting fee from the Fund calculated daily and paid
monthly. The custody fee is a transaction based fee with an annual minimum
of $20,000, and the accounting fee is calculated at 0.01% per annum on the
first
16
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2007 (unaudited)
$1 billion of net assets and 0.005% per annum on all net assets over $1
billion. For the six months ended December 31, 2007, the Fund incurred
$37,645 for custody and accounting services. These fees were reduced by
$14,300 as a result of an expense offset arrangement with the Fund's
custodian. 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 be charged interest
based on LIBOR on the day of overdraft plus one percent. The total
interest paid by the Fund for the six months ended December 31, 2007 was
$2,032.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
six months ended December 31, 2007, the Fund incurred $18,539 for
Trustees' fees.
FINANCIAL STATEMENT DECEMBER 31, 2007 17
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
December 31, 2007 (unaudited)
EXAMPLE
As a shareholder of BBH Tax Exempt Money Fund (the "Fund"), you may incur two
types of costs: (1) transaction costs on purchase payments, reinvested
dividends, or other distributions; and exchange fees; and (2) ongoing costs,
including management fees; and other Fund expenses. This Example is intended to
help you understand your ongoing costs (in dollars) of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2007 to December 31, 2007).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
18
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES (continued)
December 31, 2007 (unaudited)
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2007 to
July 1, 2007 December 31, 2007 December 31, 2007(1)
------------- ----------------- --------------------
Actual.................. $1,000 $1,014.90 $3.04
Hypothetical(2)......... $1,000 $1,022.12 $3.05
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.60%,
multiplied by the average account value over the period, multiplied by
184/366 (to reflect the one-half year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio is subtracted from
the assumed return before expenses.
FINANCIAL STATEMENT DECEMBER 31, 2007 19
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION
December 31, 2007 (unaudited)
Approval of Investment Advisory/Administrative Services Agreement
At a meeting held on December 11, 2006, the Board of Trustees (the "Board") of
the Trust unanimously approved a new Combined Investment Advisory/Administrative
Services Agreement ("Combined Agreement"). The Board determined that the terms
of the Combined Agreement will be substantially identical to those of the
current advisory and administration agreements of the Funds, noting that the
most significant difference in the Combined Agreement is a single fee for both
advisory and administrative services. The following is a summary of the factors
the Board took into consideration in making its determination to approve the new
Combined Agreement.
Nature, Extent and Quality of Services Provided by Brown Brothers Harriman & Co.
("BBH")
The Board noted that, under the Combined Agreement in respect of each Fund, BBH,
subject to the supervision of the Board, will be responsible for providing a
continuous investment program and making purchases and sales of portfolio
securities consistent with the Funds' investment objective and policies. Under
the Combined Agreement, BBH also provides administrative services to each Fund.
The Board considered the scope and quality of services to be provided by BBH
under the Combined Agreement and noted that the scope of services provided had
expanded over time, primarily, as a result of regulatory developments. The Board
noted that, for example, BBH is responsible for maintaining and monitoring its
own and, to varying degrees, the Funds' compliance program, and these compliance
programs have recently been refined and enhanced in light of new regulatory
requirements. The Board considered the quality of the investment research and
administrative capabilities of BBH and the other resources it has dedicated to
performing services for the Funds. The Board concluded that, overall, they were
satisfied with the nature, extent and quality of services expected to be
provided to each of the Funds under the Combined Agreement.
Costs of Services Provided and Profitability to BBH
At the request of the Board, BBH provided information concerning the
profitability of BBH's current investment company advisory and other fees. The
Board also reviewed BBH's profitability data for each Fund, which also included
the effect of revenue generated by the shareholder servicing, administration,
custody and other fees paid by the Fund. The Board discussed the difficulty of
making comparisons of profitability because comparative information is not
generally publicly available and is affected by numerous factors, including the
structure of the service provider, the types of funds it manages and
administers, its business mix, numerous assumptions regarding allocations and
the entity's capital structure and cost of capital. In considering profitability
information, the Board considered the effect of fall-out benefits on BBH's
expenses, as well as the "revenue sharing" arrangements BBH has entered into
with certain entities that distribute shares of the Funds. The Board focused on
profitability of BBH's relationships with the Funds before taxes and
distribution expenses. The Board concluded that it was satisfied that BBH's
level of profitability from its relationship with each Fund was not excessive.
20
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
Fall-Out Benefits
The Board considered that BBH does not allocate the Funds' portfolio
transactions for third party research, although it did benefit from proprietary
research received from brokers that execute the Funds' purchases and sales of
securities. The Board recognized that the aggregate amount of commissions
generated by Fund transactions was unlikely to result in the Funds receiving
from full service broker dealers substantial discounts on commission rates. The
Board received and reviewed information concerning BBH's policies with respect
to allocating portfolio brokerage.
The Board also considered that BBH receives shareholder servicing fees from
certain funds, and is the Funds' administrator, custodian and securities lending
agent. The Board noted that BBH retained no portion of the 12b-1 fees paid by
any Fund that operated with a Rule 12b-1 plan. The Board recognized that BBH's
profitability would be somewhat lower if it did not receive proprietary research
for commissions or, if it did not receive the other benefits described above.
The Board recognized that most Fund shareholders were also BBH clients, and that
substantial assets are invested in the Funds as a result of an overall
investment management program for the shareholder. The Board noted that the
Funds also derive reputational and other benefits from their association with
BBH and their use of the BBH name, which is licensed to the Funds by BBH. Thus,
the Board did not believe that BBH revenues associated with its clients should
be fairly regarded as "fallout" benefit from the Funds.
Economies of Scale
The Board noted that the Funds' combined fee schedules, other than the fee
schedule for BBH Money Market Fund, do not contain breakpoints. As a result, if
assets increase, the fee rates would not be reduced for these Funds on the
incremental assets. With respect to the BBH Money Market Fund, the breakpoint
will be reviewed every three (3) years by the Board, and may be adjusted upwards
to take into account the effects of inflation or such other basis as may be
appropriate, subject to the approval of shareholders to the extent required by
the 1940 Act.
There may be other economies of scale because many expenses did not rise (and
fall) proportionally to increases (and decreases) in total net assets. The Board
noted that BBH had priced its services in recognition of the fact that it was
largely its own clients who were shareholders and, accordingly, sought to assure
that the cost of these services and total expenses for each Fund were fair and
reasonable. In addition, the Board noted that over the years BBH had supported
certain Funds through fee waivers and expense reimbursements. Based on
information they had been provided over many years, the Board observed that in
the mutual fund industry as a whole, as well as among funds similar to the
Funds, there
FINANCIAL STATEMENT DECEMBER 31, 2007 21
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
appeared to be no uniformity or pattern in the fees and asset levels at which
breakpoints (if any) apply. In light of the Funds' current size and expense
structure, the Board concluded that it was unnecessary at this time to consider
breakpoints with respect to the Funds, other than for the BBH Money Market Fund.
Investment Results
The Board considered the investment results of each of the Funds as compared to
investment companies with its peers and with one or more selected securities
indices. In addition to the information received by the Board for the meeting
held on December 11, 2006, the Board received detailed performance information
for each Fund at each regular Board meeting during the year. At the meeting held
on December 11, 2006, the Board reviewed information showing performance of each
Fund compared to its peers over the prior 1-, 3-, and 5- year periods and
compared the performance information to one or more securities indices over
comparable periods.
Combined Fee Rate
The Board considered the fee rate to be paid by each Fund to BBH. The Board
recognized that it is difficult to make comparisons of these fee rates, and the
combined advisory and administration fees, because there are variations in the
services that are included in the fees paid by other funds.
The Board considered the depth and range of services provided under the Combined
Agreement. For example, in addition to a continuous investment program, BBH
provides, among other things, officers (including the Funds' Chief Compliance
Officer and officers to provide required certifications) and administrative
services, such as shareholder communications, and tax compliance, with the
attendant costs and exposure to liability. BBH also coordinates the provision of
services to the Funds by nonaffiliated service providers.
The following factors specific to BBH Tax Exempt Money Fund also were noted and
considered by the Board in deciding to approve the Combined Agreement:
The Board reviewed information showing performance of the BBH Tax Exempt Money
Fund compared to iMoneyNet (Tax Free Retail). The Fund outperformed or performed
in line with the average over all relevant periods. The Board also viewed with
favor that the BBH Tax Exempt Money Fund's portfolio of investments had an
overall high quality while the BBH Tax Exempt Money Fund's total expense ratio
was lower that the iMoneyNet Average. The Board also noted that the BBH Tax
Exempt Money Fund had successfully maintained a stable net asset value of one
dollar at all times. Taking into account these comparisons and the other factors
considered, the Board concluded that the BBH Tax Exempt Money Fund's investment
results over time and its total expense ratio had been satisfactory.
22
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
December 31, 2007 (unaudited)
Conflicts of Interest
As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a Fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other. For example, it is possible that the various accounts
managed could have different investment strategies that, at times, might
conflict with one another to the possible detriment of the Fund. Alternatively,
to the extent that the same investment opportunities might be desirable for more
than one account, possible conflicts could arise in determining how to allocate
them. Other potential conflicts might include conflicts created by specific
portfolio manager compensation arrangements, and conflicts relating to selection
of brokers or dealers to execute Fund portfolio trades and/or specific uses of
commissions from Fund portfolio trades (for example, research, or "soft
dollars").
BBH has adopted and implemented policies and procedures, including brokerage and
trade allocation policies and procedures, which it believes address the
conflicts associated with managing multiple accounts for multiple clients. In
addition, BBH monitors a variety of areas, including compliance with account
investment guidelines, the inclusion only of securities approved for purchase by
the BBH's Fixed Income Credit Committee, and compliance with the BBH's Code of
Ethics. Finally, BBH has structured the portfolio managers' compensation in a
manner, and the Funds have adopted policies and procedures, reasonably designed
to safeguard a Fund from being negatively affected as a result of any such
potential conflicts.
FINANCIAL STATEMENT DECEMBER 31, 2007 23
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
To obtain information or make shareholder inquiries:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
On the internet: www.bbhfunds.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
The Fund files with the SEC a complete schedule of its portfolio holdings, as of
the close of the first and third quarters of its fiscal year, on "Form N-Q."
Information on Form N-Q is available without charge and upon request by calling
the Funds at the toll-free number listed above. A text only version can be
viewed online or downloaded from the SEC's website at http://www.sec.gov; and
may be reviewed and copied at the SEC's Public Reference Room in Washington, DC
(call 1-800-SEC-0330 for information on the operation of the Public Reference
Room). You may also access this information from the BBH website at BBH.com by
clicking on "BBH Mutual Funds" and selecting "Online Documents/Holdings
Information."
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
ITEM 2. CODE OF ETHICS.
(a) The Registrant has adopted a code of ethics that
applies to the Registrant's principal executive officer,
principal financial officer, principal accounting officer
or controller or persons performing similar functions.
(b) No answer required.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f)
(1) A copy of the code of ethics referenced in Item 2(a)
of this Form N-CSR is available and can be mailed,
free of charge, to anyone by calling (800) 575-1265.
(2) Not applicable.
(3) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The Registrant's Board of Trustees has designated
two members of the audit committee as financial experts.
(2) The following Trustees have been designated as
audit committee financial experts by the
Board of Trustees who are "independent" for purposes
of this Item 3 of Form N-CSR: audit committee
members Arthur D. Miltenberger and David P. Feldman
are the designated audit committee financial experts.
(3) Not applicable.
(b) No answer required.
(c) No answer required.
(d) No answer required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
NOT APPLICABLE - SEMI-ANNUAL REPORT
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) Not applicable.
(b) Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
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) Based upon their evaluation of the Registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form
N-CSR, the Registrant's principal financial officer and principal executive
officer have concluded that those disclosure controls and procedures
provide reasonable assurance that the material information required to be
disclosed by the Registrant on this report is recorded, processed,
summarized and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms.
(b) There were no significant changes in the Registrant's internal controls or
in other factors that occurred during the second fiscal quarter of the
period covered by this report that has materially affected or is
reasonably likely to materially affect, the Registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the Registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: A copy of
the code of ethics is available and can be mailed, free of charge, to
anyone by calling (800) 575-1265.
(b) A separate certification for each principal executive officer and
principal financial officer of the Registrant as required by Rule 30a-2(a)
under the Act (17 CFR 270.30a-2): Attached hereto.
[If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)) and Section 1350 of Chapter 63 of Title 18 of the United
States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for the purposes of
Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the
liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933
or the Exchange Act, except to the extent that the Registrant specifically
incorporates it by reference: Attached hereto.][The submission of Section
906 certifications has been proposed by the SEC, but has not yet been
finalized. The SEC has encouraged issuers to submit Section 906
certifications as an exhibit to Form N-CSR until the final rule has been
adopted. Please see Proposed Rule: Certification of Disclosure in Certain
Exchange Act Reports, Release No. 33-8212 (March 21, 2003)].
EXHIBIT 12(a) (2)
SECTION 302 CERTIFICATION OF PRINCIPLE EXECUTIVE OFFICER.
I, John A. Nielsen, certify that:
1. I have reviewed this report on Form N-CSR of
BBH Trust on behalf of: BBH U.S. Treasury Money Fund,
BBH Money Market Fund and BBH Tax Exempt Money
Fund ("Registrant");
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes
in net assets, and cash flows (if the financial statements are required
to include a statement of cash flows)of the Registrant as of, and
for, the periods presented in this report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
as defined in Rule 30a-3(c) under the Investment Company Act
of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for
the Registrant and have:
a.) designed such disclosure controls and procedures,
or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that
material information relating to the Registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
report is being prepared;
b.) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c.) evaluated the effectiveness of the Registrant's disclosure controls
and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures,
as of a date within 90 days prior to the filing date
of this report based on such evaluation; and
d.) disclosed in this report any change in the Registrant's
internal control over financial reporting that occurred during
the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over
financial reporting; and
5. The Registrant's other certifying officer and I have disclosed to the
Registrant's auditors and the audit committee of the Registrant's
board of directors (or persons performing the equivalent functions):
a.) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
Registrant's ability to record, process, summarize, and report
financial information; and
b.) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
Registrant's internal control over financial reporting.
DATE: 03/07/08
===============
/s/ John A. Nielsen
=====================
John A. Nielsen
President - Principal Executive Officer
EXHIBIT 12(a) (2)
SECTION 302 CERTIFICATION OF PRINCIPLE FINANCIAL OFFICER.
I, Charles H. Schreiber, certify that:
1. I have reviewed this report on Form N-CSR of BBH Trust on
behalf of: BBH U.S. Treasury Money Fund, BBH Money Market
Fund and BBH Tax Exempt Money Fund ("Registrant");
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which
such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all
material respects the financial condition, results
of operations, changes in net assets, and cash flows (if the financial
statements are required to include a statement of cash flows)
of the Registrant as of, and for, the periods presented
in this report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act
of 1940) and internal control over financial reporting (as defined in
Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant
and have:
a.) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the Registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b.) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.) evaluated the effectiveness of the Registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of a date within 90 days prior
to the filing date of this report based on such evaluation; and
d.) disclosed in this report any change in the Registrant's internal
control over financial reporting that occurred during the second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect,
the Registrant's internal control over financial reporting; and
5. The Registrant's other certifying officer and I have disclosed
to the Registrant's auditors and the audit committee of the Registrant's
board of directors (or persons performing the equivalent functions):
a.) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Registrant's
ability to record, process, summarize, and report financial
information; and
b.) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal control over financial reporting.
Date: 03/07/08
==================
/s/ Charles S. Schreiber
==========================
Charles H. Schreiber
Treasurer - Principal Financial Officer
SECTION 906 CERTIFICATION
This certification is provided pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. (section) 1350, and
accompanies the report on Form N-CSR for the period ended
December 31, 2007 of the BBH Trust (the "Registrant").
Pursuant to 18 U.S.C.ss. 1350, the undersigned officers of
the Registrant, hereby certify, to the best of our
knowledge, that the Registrant's Report on Form N-CSR for the
period ended December 31, 2007 (the "Report") fully complies with
the requirements of Section 13(a) or 15(d), as applicable, of
the Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of
the Registrant.
Dated:03/07/08
==================
/s/ John A. Nielsen
=====================
John A. Nielsen
Title: President, Principal Executive Officer
Dated:03/07/08
===================
/s/ Charles H. Schreiber
=========================
Charles H. Schreiber
Treasurer - Principal Financial Officer
This certification is being furnished solely pursuant to 18 U.S.C.ss. 1350 and
is not being filed as part of the Report or as a separate disclosure document.
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/ John A. Nielsen
----------------------
John A. Nielsen, President
(Principal Executive Officer)
Date:
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/ Charles H. Schreiber
-------------------
Charles H. Schreiber, Treasurer
(Principal Financial Officer)
Date:
Print name and title of each signing officer under his or her signature.