TIDMBASC
Brown Advisory US Smaller Cos. PLC
30 September 2022
Brown Advisory US Smaller Companies (BASC)
30/09/2022
Results analysis from Kepler Trust Intelligence
Brown Advisory US Smaller Companies (BASC) has released its
financial results for the year ending 30/06/2022. The trust saw a
-14.0% drop in its net asset value (NAV) on a total return basis
and a -23.1% decline in its share price, also on a total return
basis. The trust's benchmark, the Russell 2000, fell by -15.2% over
the same period, meaning BASC outperformed by 1.2% on a NAV
basis.
BASC's returns for the year were achieved in the context of an
extremely tough macroeconomic environment for small caps and growth
strategies. Rising inflation and interest rate hikes have put
downward pressure on equity markets and higher value growth stocks
saw steeper price drops as a result. BASC's relative outperformance
was largely the result of the managers' stock selection, as they
avoided areas of the market that had been more susceptible to
speculation during the pandemic.
Despite the difficult macroeconomic environment, the managers
have been able to take advantage of lower prices, adding 14 new
holdings to the BASC portfolio in the year under review, mainly in
the final quarter. Their cash holdings and unused gearing
facilities should mean they are able to take advantage of other
opportunities if they arise.
Chairman of the board Stephen White said: "Equity markets are
likely to remain unsettled for the time being, and US smaller
companies are no exception. However, once the fundamentals do start
to improve, we see the US again at the forefront of any recovery.
Given their greater exposure to the domestic market US smaller
companies should benefit accordingly, thus justifying a dedicated
allocation in any portfolio and a commitment to our Portfolio
Manager's proven approach in identifying attractive opportunities
within the space."
Kepler View
Brown Advisory US Smaller Companies (BASC) provides investors
with access to a portfolio of high-quality US growth companies.
Chris Berrier has managed the portfolio since April 2021, but has
managed US small cap strategies for Brown Advisory for over 15
years, delivering strong outperformance for investors in that time.
His approach for BASC is to look for companies that meet what he
terms '3G' characteristics. Those are durable growth, sound
governance, and scalable 'go-to-market' strategies, which can take
a company from small cap to large cap status.
It is impossible to say when the volatility we've seen over the
past year is going to abate. Nonetheless, looking to the long-term,
there are reasons to be more optimistic about BASC's prospects. On
a macro level, the US looks better able to recover from a
prospective economic downturn. Energy independent and with a more
dynamic economy, it looks less susceptible to the sorts of problems
European states are facing today. And like other small cap markets,
the companies in which BASC invests tend to derive more of their
revenues from the domestic economy, meaning a US recovery is likely
to have a meaningful impact on them. Chris' long-term track record
of adding alpha in this market is another reason to be
optimistic.
Market volatility has also provided opportunities for Chris to
buy, with 14 additions to the portfolio made in the reporting
period. These firms all fit within the manager's '3G' framework,
but were available on more attractive valuations. We note that BASC
is well-placed to take advantage of further opportunities, given
that it has a relatively high level of cash at its disposal and has
not used its gearing facilities.
CLICK HERE TO READ THE FULL REPORT
Visit Kepler Trust Intelligence for more high quality
independent investment trust research.
Important information
This report has been issued by Kepler Partners LLP. The analyst
who has prepared this report is aware that Kepler Partners LLP has
a relationship with the company covered in this report and/or a
conflict of interest which may impair the objectivity of the
research.
Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise and you may get
back less than you invested when you decide to sell your
investments. It is strongly recommended that if you are a private
investor independent financial advice should be taken before making
any investment or financial decision.
Kepler Partners is not authorised to make recommendations to
retail clients. This report has been issued by Kepler Partners LLP,
is based on factual information only, is solely for information
purposes only and any views contained in it must not be construed
as investment or tax advice or a recommendation to buy, sell or
take any action in relation to any investment.
The information provided on this website is not intended for
distribution to, or use by, any person or entity in any
jurisdiction or country where such distribution or use would be
contrary to law or regulation or which would subject Kepler
Partners LLP to any registration requirement within such
jurisdiction or country. In particular, this website is exclusively
for non-US Persons. Persons who access this information are
required to inform themselves and to comply with any such
restrictions.
The information contained in this website is not intended to
constitute, and should not be construed as, investment advice. No
representation or warranty, express or implied, is given by any
person as to the accuracy or completeness of the information and no
responsibility or liability is accepted for the accuracy or
sufficiency of any of the information, for any errors, omissions or
misstatements, negligent or otherwise. Any views and opinions,
whilst given in good faith, are subject to change without
notice.
This is not an official confirmation of terms and is not a
recommendation, offer or solicitation to buy or sell or take any
action in relation to any investment mentioned herein. Any prices
or quotations contained herein are indicative only.
Kepler Partners LLP (including its partners, employees and
representatives) or a connected person may have positions in or
options on the securities detailed in this report, and may buy,
sell or offer to purchase or sell such securities from time to
time, but will at all times be subject to restrictions imposed by
the firm's internal rules. A copy of the firm's Conflict of
Interest policy is available on request.
PLEASE SEE ALSO OUR TERMS AND CONDITIONS
Kepler Partners LLP is authorised and regulated by the Financial
Conduct Authority (FRN 480590), registered in England and Wales at
70 Conduit Street, London W1S 2GF with registered number
OC334771.
This information is provided by Reach, the non-regulatory press
release distribution service of RNS, part of the London Stock
Exchange. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
Reach is a non-regulatory news service. By using this service an
issuer is confirming that the information contained within this
announcement is of a non-regulatory nature. Reach announcements are
identified with an orange label and the word "Reach" in the source
column of the News Explorer pages of London Stock Exchange's
website so that they are distinguished from the RNS UK regulatory
service. Other vendors subscribing for Reach press releases may use
a different method to distinguish Reach announcements from UK
regulatory news.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NRAFLFFFADIIVIF
(END) Dow Jones Newswires
September 30, 2022 08:29 ET (12:29 GMT)
F&c Us Smaller Companies (LSE:FSC)
Historical Stock Chart
From Oct 2024 to Nov 2024
F&c Us Smaller Companies (LSE:FSC)
Historical Stock Chart
From Nov 2023 to Nov 2024
