LARGE-CAP GROWTH REVIEW AND OUTLOOK - For Institutional Investors and Professional Clients Only For Marketing Purposes - Brown Advisory
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For Institutional Investors and Professional Clients Only
For Marketing Purposes
LARGE-CAP GROWTH REVIEW AND OUTLOOK
Third Quarter 2023
The Brown Advisory Large-Cap Growth strategy underperformed its Information technology was the largest positive contributing sector to relative
benchmark, the Russell 1000® Growth Index, which was down 3.1% during the performance during the period. Atlassian, the collaboration tool used by
third quarter. software developers, reported solid quarterly results with subscription revenue
coming in ahead of Wall Street expectations. Strong customer demand and
Earlier in the quarter, the strategy had positive relative results, followed by the robust migration activity to the cloud and data center were the primary drivers of
rapid rise in interest rates in September that dampened both absolute and the strong results and increased guidance. Intuit also traded up during the
relative performance. The 10-year Treasury yield jumped considerably in late period as the company has exhibited resilience within its small- and medium-
August and September, negatively impacting nearly all growth companies with sized business segments. The stock has rebounded nicely following short-term
higher valuations, regardless of their underlying business fundamentals. pressure earlier this year due to a weaker-than-expected tax season that
impacted the TurboTax platform.
Narrow market leadership continues to define the benchmark. As of quarter’s
end, the benchmark’s seven largest companies by market cap accounted for We exited Shopify during the period, following the company’s earnings report.
more than 70% of its substantial year-to-date return. Technology stocks (as The company announced a plan to divest its logistics business; while expensive
defined by GICS) now represent 42% of the Index, just shy of the peak of the in the near term, such a move could drive, in our opinion, significant future
technology bubble in the late 1990s. growth. While some investors were pleased with this announcement which
triggered a significant move in the stock price, the potential upside became
While this concentration in just a select group of mega-cap names has created limited, and we thought capital could be allocated to other ideas.
a challenging environment for our relative returns, we are generally pleased
with fundamental results across the portfolio. From a sector perspective, health We also initiated a position in Uber Technologies during the quarter. Uber is an
care and consumer discretionary were the largest detractors to relative asset-light business that operates a two-sided network, connecting consumers
performance during the quarter. Sentiment within health care has been weak with drivers. While this is a company we have followed for years, the company’s
over the last few months, as investors continue to deliberate any potential change in growth strategy from growing at any cost to profitable growth was a
impacts from the new generation of the Glucagon-Like Peptide 1 (GLP-1) significant factor in us swapping into the position.
weight loss drugs. Edwards Lifesciences, a portfolio company that is focused on
medical innovations for heart disease, reported results that came in ahead of While the market’s intense focus on rising interest rates and mega-cap
Wall Street consensus estimates. Despite these strong results—and the fact companies has been frustrating, we remain focused on implementing the
that there is no known correlation between the need for TAVR (transcatheter philosophy and process that have been hallmarks of this strategy for over 25
aortic valve replacement) procedures and obesity--Edwards traded down during years. We strive to invest in best-in-breed, premium growth companies that are
the period due to this negative sentiment. set up for success over the long term and we are generally pleased with the
fundamental outcomes of the companies in the strategy.
Within consumer discretionary, Chewy, the online pet retailer, continues to
navigate difficult year-over-year comparisons against the strong pull-through
experienced during COVID. The company reported strong revenue growth and
a significant number of loyal customers, as measured by number of customers
signed up for auto-ship. The stock, however, has underperformed this year as
investors are awaiting net new customer growth. We continue to monitor this
situation very closely.
Source: FactSet®. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a
particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be
profitable. References to specific securities are for illustrative purposes only and do not represent all of the securities purchased, sold or recommended for advisory clients. Sectors are based on the Global Industry Classification
Standard (GICS®) classification system. The performance shown above reflects the Large-Cap Growth Composite, managed by Brown Advisory Institutional. Brown Advisory Institutional is a GIPS compliant firm and is a division of
Brown Advisory LLC. Past performance is not indicative of future results. Please see the end of this presentation for a GIPS Report, important disclosures and a complete list of terms and definitions.SECTOR DIVERSIFICATION
Third Quarter 2023
REPRESENTATIVE RUSSELL
The strategy’s largest underweight continues to be LARGE-CAP 1000® REPRESENTATIVE
information technology (31.8% vs. 42.1%). This is driven GROWTH GROWTH LARGE-CAP GROWTH
primarily by our underweight to hardware and not owning SECTOR ACCOUNT INDEX DIFFERENCE ACCOUNT
Apple (the largest constituent in the benchmark). (%) (%) (%) (%)
Q3’23 Q3’23 Q3’23 Q2‘23 Q3‘22
Consistent with prior quarters, the portfolio maintains its Communication Services 6.34 11.64 -5.30 5.79 6.37
overweight in health care.
Consumer Discretionary 8.25 15.95 -7.71 9.02 8.08
Our industrial weight increased during the period, as Uber
Technologies was added to the strategy. Uber is classified Consumer Staples 6.66 4.29 2.36 6.98 9.62
as an industrial, according to GICS.
Energy -- 0.59 -0.59 -- --
Financials 10.53 6.56 3.97 10.08 6.74
Health Care 20.35 11.32 9.03 21.95 23.33
Industrials 10.47 5.96 4.51 8.47 9.66
Information Technology 31.76 42.09 -10.33 31.53 31.08
Materials -- 0.68 -0.68 -- 2.03
Real Estate 5.64 0.88 4.77 6.19 3.09
Utilities -- 0.05 -0.05 -- --
Source: FactSet®. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a
particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be
profitable. The portfolio information provided is based on a representative Large-Cap Growth account and is provided as Supplemental Information. Sector diversification excludes cash and cash equivalents. Sectors are based on the
Global Industry Classification Standard (GICS®) classification system. Please see disclosure statements at the end of this presentation for additional information and for a complete list of terms and definitions.ATTRIBUTION DETAIL BY SECTOR
Third Quarter 2023
REPRESENTATIVE
RUSSELL 1000® GROWTH INDEX ATTRIBUTION ANALYSIS
LARGE-CAP GROWTH ACCOUNT
SELECTION &
SECTOR AVERAGE AVERAGE ALLOCATION INTERACTION TOTAL EFFECT
WEIGHT (%) RETURN (%) WEIGHT (%) RETURN (%) EFFECT (%) EFFECT (%) (%)
Communication Services 6.23 3.76 11.29 5.19 -0.40 -0.09 -0.49
Consumer Discretionary 8.64 -13.47 16.09 -3.18 0.01 -0.94 -0.93
Consumer Staples 6.64 -9.44 4.36 -6.72 -0.07 -0.21 -0.28
Energy -- -- 0.55 15.26 -0.09 -- -0.09
Financials 10.16 -0.93 6.49 -0.54 0.09 -0.03 0.06
Health Care 21.11 -11.78 11.07 -0.10 0.30 -2.52 -2.22
Industrials 10.13 -7.95 6.01 -3.16 -0.02 -0.45 -0.47
Information Technology 31.19 2.47 42.49 -5.92 0.31 2.56 2.88
Materials -- -- 0.69 -5.96 0.02 -- 0.02
Real Estate 5.90 -13.44 0.92 -11.29 -0.41 -0.14 -0.56
Utilities -- -- 0.05 -12.61 -- -- --
Total 100.00 -5.20 100.00 -3.13 -0.26 -1.82 -2.07
Information technology was the top relative performing sector during the quarter, driven primarily by positive stock selection. Intuit and Atlassian both traded
up during the period following solid quarterly results.
Health care and consumer discretionary were the largest detractors to relative performance. Sentiment within the medical technology space has been
negative since the rollout of the new generation of GLP-1 weight loss drugs. Companies like Edwards Lifesciences saw their stock prices decline, even
though there is no known correlation between the drug and preventing heart disease.
Source: FactSet. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a
particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be
profitable. The portfolio information provided is based on a representative Large-Cap Growth account and is provided as Supplemental Information. Sectors are based on the Global Industry Classification Standard (GICS)
classification system. Sector attribution is gross of fees and excludes cash and cash equivalents. Attribution Analysis shown is calculated on a gross of fees basis. Please see disclosure statements at the end of this presentation for
additional information and for a complete list of terms and definitions.TOP FIVE CONTRIBUTORS TO RETURN
Third Quarter 2023 Representative Large-Cap Growth Account Top Five Contributors
AVERAGE CONTRIBUTION
NAME DESCRIPTION RETURN (%)
WEIGHT (%) TO RETURN (%)
TEAM Atlassian Corp Class A Develops software and collaboration tools 2.51 20.38 0.43
INTU Intuit Inc. Provides software products for businesses 4.43 11.69 0.43
Operates as a holding company with interests in
GOOG Alphabet Inc. Class C software, health care, transportation and other 4.13 8.99 0.30
technologies
COST Costco Wholesale Corporation Operates membership warehouses 3.84 5.13 0.17
Designs and manufactures computer graphics
NVDA NVIDIA Corporation 4.98 2.75 0.15
processors, chipsets, and related multimedia software
Atlassian (TEAM) was the top contributor to performance during the period. The company’s most recent earnings report highlighted subscription revenue that
came in ahead of Wall Street expectations, driven by strong enterprise demand and robust migration activity to cloud and data centers.
Intuit (INTU) rebounded nicely during the period following a weak report, earlier this year, from fewer IRS tax returns that impacted short-term results within
the TurboTax business. Recent results were strong, particularly within the small- and medium-sized business segment. We are pleased with the company’s
execution and management believes the momentum is sustainable, as indicated by the company’s increased guidance.
Alphabet (GOOG) reported strong quarterly results during the quarter that beat both top and bottom-line estimates. The company released several
Generative Artificial Intelligence products, including Bard, that we believe solidify its competitive positioning in the space- and reversed some marketing
mishaps earlier this year.
Costco’s (COST) consistent mid-single-digit traffic growth has outpaced many other large retailers and reflects continued market share gains in the space.
Investors are generally pleased with the traffic growth, despite weaker sales in the big-ticket discretionary categories.
NVIDIA Corporation (NVDA), a market leader in advanced graphics processing units (GPUs), has traded up sharply this year following better-than-expected
financial results and broad investor excitement for artificial intelligence applications for the company’s products.
Source: FactSet. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a
particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be
profitable. The portfolio information provided is based on a representative Large-Cap Growth account and is provided as Supplemental Information. Commentary regarding an investment’s contribution to return and relative
performance has been assessed on a gross performance basis. Contributors are sorted in order of their contribution to return on a gross basis. Please see disclosure statements at the end of this presentation for additional
information and for a complete list of terms and definitions.BOTTOM FIVE CONTRIBUTORS TO RETURN
Third Quarter 2023 Representative Large-Cap Growth Account Bottom Five Contributors
AVERAGE CONTRIBUTION
NAME DESCRIPTION RETURN (%)
WEIGHT (%) TO RETURN (%)
Operates online platform to sell pet food and other pet-
CHWY Chewy, Inc. Class A 1.60 -53.74 -1.11
related products
Designs, develops, manufactures and markets
EW Edwards Lifesciences Corporation 2.85 -26.56 -0.84
products to treat late-stage cardiovascular disease
Manufactures skin care, makeup, fragrance and hair
EL Estee Lauder Companies Inc. Class A 2.80 -26.08 -0.82
care products
Manufactures automatic, stationary and portable
GNRC Generac Holdings Inc. 2.38 -26.84 -0.69
generators
Manufactures and markets medical devices & glucose
DXCM DexCom, Inc. 2.03 -27.58 -0.65
monitoring systems
Chewy (CHWY) has seen customer growth slow considerably after a period of outsized growth during the COVID pandemic. This weakness has persisted longer
than the market anticipated. We believe that longer-term, the company’s competitive position and differentiation are solid and that it will continue to gain market
share in the pet category.
Edwards Lifesciences (EW), a company focused on medical innovations for heart disease, reported solid financial results during the period, beating Wall Street
consensus estimates. Despite these strong results and that there has been no correlation linking the need for TAVR (transcatheter aortic valve replacement)
procedures and obesity, the stock traded down during the period due to the negative sentiment within health care.
Estee Lauder (EL) reported weakness in its China business, specifically in the travel retail channel. Estee Lauder has grown rapidly in this channel over the past
few years, including during COVID, so this headwind in the travel retail channel has had an outsized impact on growth. We view this as an acute short-term issue
that should be resolved once inventory levels are brought back in line with demand.
Generac (GNRC), a leading provider of home standby generators, is still working through channel inventory that was elevated due to supply chain issues related
to COVID. This elevated inventory coupled with a lack of early-season storms put some short-term pressure on the stock.
Despite reporting better-than-expected results and continuing to show strong underlying market demand trends for constant glucose monitors (CGMs), DexCom
(DXCM) was negatively impacted by the broader GLP-1 trade. While early payer and real-world data to date suggest CGMs are complementary to GLP-1
adoption, Wall Street remains fearful of the potential impact on both the diabetic population growth and incremental CGM demand.
Source: FactSet. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a
particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be
profitable. It should not be assumed that investments in such securities have been or will be profitable. References to specific securities are for illustrative purposes only and do not represent all of the securities purchased, sold or
recommended for advisory clients. The portfolio information provided is based on a representative Large-Cap Growth account and is provided as Supplemental Information. Commentary regarding an investment’s contribution to
return and relative performance has been assessed on a gross performance basis. Contributors are sorted in order of their contribution to return on a gross basis. Please see disclosure statements at the end of this presentation for
additional information and for a complete list of terms and definitions.ADDITIONS/DELETIONS
Third Quarter 2023 Representative Large-Cap Growth Account Portfolio Activity
SYMBOL ADDITIONS SECTOR
We initiated a position in Uber Technologies (UBER) during the
period. Uber is a global mobility platform that offers rideshare and food UBER Uber Technologies, Inc. Industrials
delivery to its users through its two-sided network. The company has
several opportunities for growth: new customers coming to the
platform, new market expansion and improved customer loyalty,
among others. Uber has also shifted its focus from growing at any cost
to growing in a profitable way. SYMBOL DELETIONS SECTOR
We sold Shopify (SHOP) during the quarter. The stock price received SHOP Shopify, Inc. Class A Information Technology
a significant boost following a solid earnings report and the announced
divestment of the company’s fulfillment business. We viewed the
company’s logistics business as something potentially accretive to the
company’s long-term growth opportunity, and exited the position
following this news.
Source: FactSet. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a
particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be
profitable. References to specific securities are for illustrative purposes only and do not represent all of the securities purchased, sold or recommended for advisory clients. The portfolio information provided is based on a
representative Large-Cap Growth account and is provided as Supplemental Information. Sectors are based on the Global Industry Classification Standard (GICS) classification system. Please see disclosure statements at the end of
this presentation for additional information and for a complete list of terms and definitions.PORTFOLIO CHARACTERISTICS & TOP 10 HOLDINGS
Third Quarter 2023
Characteristics Top 10 Portfolio Holdings
REPRESENTATIVE REPRESENTATIVE
RUSSELL 1000®
LARGE-CAP GROWTH LARGE-CAP GROWTH ACCOUNT % OF PORTFOLIO
GROWTH INDEX
ACCOUNT TOP 10 HOLDINGS
Number of Holdings 31 446 ServiceNow, Inc. 4.9
Market Capitalization ($ B) NVIDIA Corp. 4.7
Weighted Average 374.6 966.6
Microsoft Corp. 4.5
Historical 3-Yr Sales Growth 19.2 19.5
Intuit, Inc. 4.5
EV/FCF (FY2) 25.3 23.6
Alphabet, Inc. Cl C 4.2
Active Share 74.2 --
Intuitive Surgical, Inc. 4.1
Three-Year Annualized Portfolio
21.0 --
Turnover (%) Amazon.com, Inc. 4.0
Costco Wholesale Corp. 4.0
Thermo Fisher Scientific, Inc. 3.9
Mastercard, Inc. 3.8
Total 42.6
Source: FactSet. The portfolio information provided is based on a representative Large-Cap Growth account and is provided as Supplemental Information. Portfolio characteristics and top 10 portfolio holdings include cash and cash
equivalents which was 3.8% as of 09/30/2023. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of
action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities
have been or will be profitable. References to specific securities are for illustrative purposes only and do not represent all of the securities purchased, sold or recommended for advisory clients. Please see disclosure statement at the
end of this presentation for additional information. Figures in table may not total due to rounding.COMPOSITE PERFORMANCE
Third Quarter 2023 as of 09/30/2023
30.0
27.7
25.0 25.1
25.0 24.2
20.0
17.5
16.9
14.5
15.0
12.4
Returns(%)
11.7
11.0
9.9
10.0 9.1 9.3
8.8
8.0 8.1
5.0
0.5
0.0
-0.2
-3.1
-5.0
-5.0 -5.2
-10.0
3 MOS. YTD 1 YR. 3 YR. 5 YR. 10 YR. ITD (05/31/1996)
Brown Advisory Large-Cap Growth Institutional Composite Gross Returns
Brown Advisory Large-Cap Growth Institutional Composite Net Returns
Russell 1000® Growth Index
Source FactSet. All returns greater than one year are annualized. Past performance is not indicative of future results. The composite performance shown above reflects the Large-Cap Growth Institutional Composite, managed by Brown
Advisory Institutional. Brown Advisory Institutional is a GIPS compliant firm and is a division of Brown Advisory LLC. Please see the Brown Advisory Large-Cap Growth Institutional disclosure statement at the end of this presentation for a
GIPS compliant presentation.SECTOR DIVERSIFICATION
Third Quarter 2023 Global Industry Classification Standard (GICS) as of 09/30/2023
50
45
42.1
40
Portfolio Allocation (%)
35
31.8
30
25
20.4
20
16.0
15
11.6 11.3
10.5 10.5
10 8.3
6.3 6.7 6.6 6.0 5.6
4.3
5
0.9
0.0 0.6 0.0 0.7 0.0 0.1
0
Comm. Consumer Consumer Energy Financials Health Care Industrials Info. Tech. Materials Real Estate Utilities
Services Disc. Staples
Representative Large-Cap Growth Account Russell 1000® Growth Index
Source: FactSet. The portfolio information provided is based on a representative Large-Cap Growth account and is provided as Supplemental Information. Sector diversification excludes cash and cash equivalents. Sectors are based
on the Global Industry Classification Standard (GICS) classification system. Please see disclosure statements at the end of this presentation for additional information and for a complete list of terms and definitions.DISCLOSURES The views expressed are those of the author and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance is not a guarantee of future performance and you may not get back the amount invested. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client. The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000® Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The Index is completely reconstituted annually to ensure that new and growing equities are included and that the represented companies continue to reflect growth characteristics. Russell® and other service marks and trademarks related to the Russell indexes are trademarks of the London Stock Exchange Group Companies. An investor cannot invest directly into an index. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and / or Russell ratings or underlying data and no party may rely on any Russell Indexes and / or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. FactSet® is a registered trademark of Factset Research Systems, Inc. Global Industry Classification Standard (GICS) and “GICS” are service makers/trademarks of MSCI and Standard & Poor’s. Figures shown on sector diversification and quarterly attribution by detail slides may not total due to rounding.
TERMS AND DEFINITIONS All financial statistics and ratios are calculated using information from FactSet as of the report date unless otherwise noted. Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differs from the benchmark index. The Average Weight of a position or sector refers to the daily average for the period covered in this report of a stock’s value as a percentage of the portfolio. Allocation Effect measures the impact of the decision to allocate assets differently than those in the benchmark. Selection and Interaction Effect reflects the combination of selection effect and interaction effect. Selection effect measures the effect of choosing securities that may or may not outperform those of the benchmark. Interaction effect measures the effect of allocation and selection decisions (i.e., did we overweight the sectors in which we underperformed). Total Effect reflects the combination of allocation, selection and interaction effects. Totals may not equal due to rounding. Market Capitalization refers to the aggregate value of a company’s publicly traded stock. Statistics are calculated as follows: Weighted Average: the average of each holding’s market cap, weighted by its relative position size in the portfolio (in such a weighting scheme, larger positions have a greater influence on the calculation); Weighted Median: the value at which half the portfolio's market capitalization weight falls above and half falls below; Maximum and Minimum: the market caps of the largest and smallest companies, respectively, in the portfolio. Enterprise Value / Free Cash Flow (EV/FCF ) compares company valuation with its potential to create positive cash flow statements. Portfolio Turnover is the ratio of the lesser of the portfolio’s aggregate purchases or sales during a given period, divided by the average value of the portfolio during that period, calculated on a monthly basis. Portfolio turnover is provided for a three-year trailing period. Sales Growth is the percent growth in the net sales of a business from one fiscal period of another. All of the above ratios for a portfolio are expressed as a weighted average of the relevant ratios of each portfolio holding, EXCEPT for P/E ratios, which are expressed as a weighted harmonic average.
Brown Advisory
LARGE-CAP GROWTH INSTITUTIONAL
COMPOSITE
Composite Benchmark 3-Yr
Composite Composite 3-Yr Annualized Annualized Portfolios in Composite GIPS Firm
Total Gross Total Net Benchmark Standard Standard Composite at Composite Assets Assets
Year Returns (%) Returns (%) Returns (%) Deviation (%) Deviation (%) End of Year Dispersion (%) ($USD Millions)* ($USD Millions)*
2022 -33.4 -33.9 -29.1 23.4 23.5 63 0.3 8,725 58,575
2021 20.0 19.5 27.6 17.8 18.2 88 0.3 16,148 79,715
2020 33.8 32.9 38.5 18.6 19.6 95 0.5 16,467 59,683
2019 41.9 40.9 36.4 13.4 13.1 92 0.3 13,175 42,426
2018 5.9 5.2 -1.5 13.0 12.1 88 0.3 9,285 30,529
2017 31.7 30.8 30.2 11.5 10.5 119 0.3 10,005 33,155
2016 -2.3 -3.0 7.1 11.2 11.2 148 0.1 9,786 30,417
2015 7.8 7.1 5.7 10.2 10.7 168 0.3 12,583 43,746
2014 7.1 6.4 13.1 11.0 9.6 181 0.2 14,674 44,772
2013 30.3 29.4 33.5 15.5 12.2 212 0.3 15,740 40,739
Brown Advisory Institutional claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Brown Advisory Institutional has been independently verified for the
periods from January 1, 1993 through December 31, 2022. The Verification reports are available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the
GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the
GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this
organization, nor does it warrant the accuracy or quality of the content contained herein.
1. *For the purpose of complying with the GIPS standards, the firm is defined as Brown Advisory Institutional, the Institutional and Balanced Institutional asset management divisions of Brown Advisory. As of July 1, 2016, the firm was redefined to exclude the
Brown Advisory Private Client division, due to an evolution of the three distinct business lines.
2. The Large-Cap Growth Institutional Composite (the Composite) includes all discretionary institutional portfolios invested in U.S. equities with strong earnings growth characteristics and large market capitalizations. The minimum account market value required
for Composite inclusion is $1.5 million.
3. The Composite was created in 1997. The Composite inception date is June 1, 1996.
4. The benchmark is the Russell 1000® Growth Index. The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000® Index companies with higher price-to-book ratios
and higher forecasted growth values. The Russell 1000® Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The Index is completely reconstituted annually to ensure new and growing equities
are included and that the represented companies continue to reflect growth characteristics. The Russell 1000® Growth Index and Russell® are trademarks/service marks of the London Stock Exchange Group companies. An investor cannot invest directly into
an index. Benchmark returns are not covered by the report of the independent verifiers.
5. The composite dispersion presented is an equal-weighted standard deviation of portfolio gross returns calculated for the accounts in the Composite for the entire calendar year period.
6. Gross-of-fees performance returns are presented before management fees but after all trading commissions, and gross of foreign withholding taxes (if applicable). Net-of-fees performance returns are calculated by adjusting the gross-of-fees performance
return by the highest fee for the institutional strategy as outlined in Part 2A of the firm’s Form ADV, applied on a monthly basis. Certain accounts in the Composite may pay asset-based custody fees that include commissions. For these accounts, gross returns
are also net of custody fees. Other expenses can reduce returns to investors. The standard management fee schedule is as follows: For accounts below $150 million, 0.70% on the first $25 million; 0.50% on the next $25 million; and 0.40% on the next $100
million. For accounts over $150 million, 0.465% on the first $150 million; 0.30% on the next $100 million; 0.25% on the next $250 million; and 0.20% on the balance over $500 million. Further information regarding investment advisory fees is described in Part
2A of the firm’s Form ADV. Actual fees paid by accounts in the Composite may differ from the current fee schedule.
7. Effective July 1, 2023, the firm transitioned from using actual account fees in the calculation of net performance returns to applying the highest fee for the institutional strategy as outlined in Part 2A of the firm’s Form ADV. The net performance track record was
revised back to Composite inception.
8. The investment management fee for the Investor Shares of the Brown Advisory Growth Equity Fund (the Fund), which is included in the Composite, is 0.57%, and represents the highest fee charged excluding Advisor Shares. The total expense ratio for the
Investor Shares of the Fund as of the most recent fiscal year end (June 30, 2022) was 0.81%. Further information regarding investment management fees and expenses is described in the fund prospectus and annual report.
9. The investment management fee for the Dollar Class B Acc Shares of the Brown Advisory US Equity Growth Fund (the UCITS), which is included in the composite, is 0.75%. The total expense ratio for the Dollar Class B Acc Shares of the UCITS as of the
most recent fiscal year end (October 31, 2022) was 0.88%. Further information regarding investment management fees and expenses is described in the fund prospectus and annual report.
10. The three-year annualized ex-post standard deviation measures the variability of the Composite (using gross returns) and the benchmark for the 36-month period ended on December 31.
11. Valuations and performance returns are computed and stated in U.S. Dollars. All returns reflect the reinvestment of income and other earnings.
12. A complete list of composite descriptions and broad distribution and limited distribution pooled funds is available upon request.
13. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request.
14. Past performance is not indicative of future results.
15. This is not an offer to sell securities. That may only be accomplished by the issuance of a private offering memorandum/subscription documents.
16. This piece is provided for informational purposes only and should not be construed as a research report, a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular
investment strategy, including whether or not to buy, sell or hold any of the securities mentioned, including any mutual fund managed by Brown Advisory.You can also read
