The BBH Partner Fund – Small Cap Equity (“Fund”) declined -1.56% in the second quarter of 2024 compared with a -3.28% decrease in the Russell 2000 index. In the year-to-date period, the Fund declined -1.30% compared to an increase of 1.73% for the benchmark index. Despite a brief wobble in the U.S. equity markets early in the quarter, “mega-cap” technology stocks resumed their run and powered gains in large-cap equity indices. Small-cap equity indices saw underwhelming performance by contrast, and the historic divergence between large-cap and small-cap valuations persisted. We agree with astute observers that, in aggregate, small-cap equities warrant a discount to large-cap equities, which comprise relatively more scaled, proven, and advantaged businesses. Nevertheless, pockets of opportunity exist where individual small-cap companies exhibit quality converging with that of large-cap comparables while bearing valuation discounts that have widened to extreme degrees.
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The Russell 2000 index is an unmanaged market capitalization weighted index of 2000 small company stocks of U.S. domiciled companies. The composition of the Russell 2000 Index is materially different than the Fund's holdings. The Index is not available for direct investment.
The Fund seeks to generate attractive returns over time but does not attempt to mirror a benchmark or index.
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 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.
RISKS
Investors in the Fund should be able to withstand short-term fluctuations in the equity 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 Fund is “non-diversified” and may assume large positions in a small number of issuers which can increase the potential for greater price fluctuation.
Foreign investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards. Prices of emerging markets 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.
Investing in small sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
Asset allocation decisions, particularly large redemptions, made by an investor or an investment adviser whose discretionary clients make up a large percentage of the Fund's shareholders, may adversely impact remaining Fund shareholders.
For more complete information, visit www.bbhfunds.com for a 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.
Bares Capital Management, Inc. acts as the sub-adviser to the Fund.
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-15011-2024-07-24 BBH003963 Exp. Date 10/31/2024
