The BBH Income Fund Class I ("the Fund") returned 1.73% in May and the Bloomberg Barclays U.S. Aggregate Index returned 0.47%. Outperformance was due to the continuing rebound of credit in the Fund, which has a higher exposure to credit than the benchmark.

As was the case in April, the short end of the Treasury curve was practically unchanged in May. Returns in excess of Treasuries (excess returns) for 3-5-year Investment Grade (IG) and 0-5-year High Yield (HY) corporate bonds were 1.70% and 3.59%, respectively. Total returns were 1.90% and 3.71%, respectively. Total return for floating rate loans was 3.80%. Asset-backed securities (ABS) and non-agency commercial mortgage-backed securities (CMBS) returned 1.09% and 1.35%, respectively.

The Fund had increased its corporate credit exposure significantly in March, which has been additive to performance. While ABS and loans have been slower to recover, they appear to have gained momentum in May, probably due to the end of sheltering-in-place and the planned commencement of Term Asset-Backed Securities Loan Facility (TALF) purchases in June.

April and May’s rebound can be attributed to a Federal Reserve intent on supporting market liquidity and to the government’s massive amounts of fiscal stimulus to corporations, small businesses, and individuals. May’s unemployment report surprised to the upside, oil prices have rebounded, businesses are starting to reopen, and vaccine development has been accelerated. Large inflows into credit markets continue to reduce spreads even as companies issue debt at record levels.

Valuations came down in April and in May, but spread levels remain more attractive than they have in years. However, as always, we will invest only in credits with attractive yields and the durability to withstand a wide range of economic scenarios.

Income Fund Performance as of 5/31/2020 and 3/31/2020 versus the Bloomberg Barclays US Aggregate Index.

Income Fund Portflio Composition tables as of 5/31/2020 - Share Class Overview, Credit Quality, Top 10 Credits, Sector Distribution, Duration Distribution and Fund Facts.

Holdings are subject to change. Totals may not sum due to rounding.

Credit Quality letter ratings are provided by Standard and Poor's, Moody's and Fitch and are presented as the higher of the three ratings. When a security is not rated by Standard & Poor's, Moody's or Fitch, the highest credit ratings from DBRS and Kroll may be used. Credit ratings reflect the credit quality of the underlying issues in the portfolio and not of the portfolio itself. Issues with credit ratings of BBB or better are considered to be investment grade, with adequate capacity to meet financial commitments. Issues with credit ratings below BBB are considered speculative in nature and are vulnerable to the possibility of issuer failure or business interruption.

Effective duration is a measure of the portfolio’s return sensitivity to changes in interest rates.

Weighted Average Life of securities excludes US Treasury futures positions.

Yield to Maturity is the rate of return the portfolio would achieve if all purchased bonds and derivatives were held to maturity, assuming all coupon and principal payments are received as scheduled and reinvested at the same yield to maturity. This figure is subject to change and is not meant to represent the yield earned by any particular security. Yield to Maturity is before fee and expenses.

This material is not authorized for distribution unless accompanied or preceded by a current Fund prospectus.

Opinions, forecasts, and discussions about investment strategies represent the author’s views as of the date of this commentary and are subject to change without notice. References to specific securities, asset classes, and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations.

Purchase and sale information provided should not be considered as a recommendation to purchase or sell a particular security and that there is no assurance, as of the date of publication, that the securities purchased remain in a fund's portfolio or that securities sold have not been repurchased.


Investors in the Fund should be able to withstand short-term fluctuations in the fixed income markets in return for potentially higher returns over the long term. The value of portfolios changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments.

The value of some bonds including asset-backed and mortgage-backed securities may be sensitive to changes in prevailing interest rates that can cause a decline in their prices. Mortgage related securities are subject to prepayment and extension risk. The Fund also invests in derivative instruments, investments whose values depend on the performance of the underlying security, assets, interest rate, index or currency and entail potentially higher volatility and risk of loss compared to traditional stock or bond investments.

Investing in the bond market is subject to certain risks including market, interest-rate, issuer, maturity, call, credit, and inflation risk; investments may be worth more or less than the original cost when redeemed.

Foreign investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards. Prices of emerging market securities can be significantly more volatile than the prices of securities in developed countries, and currency risk and political risks are accentuated in emerging markets.

Below investment grade bonds, commonly known as junk bonds, are subject to a high level of credit and market risks and are considered speculative.

To the extent that the Fund experiences a large purchase or redemption on any business day, the Fund's performance may be adversely affected.

For more complete information, visit for a current Fund prospectus. You should consider the fund's investment objectives, risks, charges and expenses carefully before you invest. Information about these and other important subjects is in the fund's prospectus, which you should read carefully before investing.

Shares of the Fund are distributed by ALPS Distributors, Inc. and is located at 1290 Broadway, Suite 1000, Denver, CO 80203.

Brown Brothers Harriman & Co. ("BBH"), a New York limited partnership, was founded in 1818 and provides investment advice to registered mutual funds through a separately identifiable department (the "SID"). The SID is registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. BBH acts as the Fund Administrator and is located at 140 Broadway, New York, NY 10005.


Not FDIC Insured                                  No Bank Guarantee                            May Lose Money
IM-08057-2020-06-15     BBH002987 Exp. Date 07/31/2020