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
BBH TRUST
On behalf of the following series:
BBH Core Select
BBH Global Core Select
BBH International Equity Fund
BBH Limited Duration Fund
BBH Intermediate Municipal Bond Fund
(Exact name of registrant as specified in charter)
140 Broadway, New York, NY 10005
(Address of principal executive offices) (Zip Code)
Corporation Services Company
2711 Centerville Road, Suite 400, Wilmington, DE 19808
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 575-1265
Date of fiscal year end: October 31
Date of reporting period: October 31, 2016
Item 1. Report to Stockholders.
BBH CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE
October 31, 2016
1 | The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index. |
2 | We prepare proprietary financial models for each Core Select company in order to determine an estimate of intrinsic value. Discounted cash flow analysis is the primary quantitative model used in our research process. We supplement our discounted cash flow work with other quantitative analyses, such as economic profit models, internal rate of return models, and free cash flow multiples. |
BBH CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
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BBH CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
concern regarding the Companys balance
sheet situation in the context of very weak natural gas prices and sharply lower near-term cash flow estimates that we observed at the time.
Our view was that the position no longer offered an adequate margin of safety and that a positive outcome would require a significant
rebound in natural gas commodity prices.
BBH CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
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BBH CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
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1 | The Funds performance assumes the reinvestment of all dividends and distributions. The S&P 500 has been adjusted to reflect reinvestment of dividends on securities. The S&P 500 is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Funds performance. The index is unmanaged. Investments cannot be made in an index. |
BBH CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
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BBH CORE SELECT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BBH
Core Select:
December 22, 2016
BBH CORE SELECT
PORTFOLIO ALLOCATION
October 31, 2016
U.S. $ Value |
Percent of Net Assets |
|||||||||
Common Stocks: |
||||||||||
Basic Materials |
$ | 154,557,619 | 4.3 | % | ||||||
Communications |
545,264,467 | 15.2 | ||||||||
Consumer Cyclical |
176,282,790 | 4.9 | ||||||||
Consumer Non-Cyclical |
907,538,980 | 25.4 | ||||||||
Energy |
262,503,256 | 7.3 | ||||||||
Financials |
704,096,131 | 19.7 | ||||||||
Industrials |
56,882,637 | 1.6 | ||||||||
Technology |
518,437,484 | 14.5 | ||||||||
Repurchase Agreements |
82,500,000 | 2.3 | ||||||||
U.S. Treasury Bills |
124,962,525 | 3.5 | ||||||||
Cash and Other Assets in Excess of Liabilities |
47,878,049 | 1.3 | ||||||||
NET ASSETS |
$ | 3,580,903,938 | 100.0 | % |
The accompanying notes are an integral part of these
financial statements.
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BBH CORE SELECT
PORTFOLIO OF INVESTMENTS
October 31, 2016
Shares |
Value |
|||||||||
COMMON STOCKS (92.9%) |
||||||||||
BASIC MATERIALS (4.3%) |
||||||||||
1,176,418 | Celanese Corp. (Series A) |
$ | 85,784,401 | |||||||
587,504 | Praxair, Inc. |
68,773,218 | ||||||||
Total Basic Materials |
154,557,619 | |||||||||
COMMUNICATIONS (15.2%) |
||||||||||
227,553 | Alphabet, Inc. (Class C)1 |
178,524,431 | ||||||||
3,397,238 | Comcast Corp. (Class A) |
210,017,253 | ||||||||
4,572,838 | Discovery Communications, Inc. (Class C)1 |
114,823,962 | ||||||||
1,317,573 | Liberty Global, Plc.1 |
41,898,821 | ||||||||
Total Communications |
545,264,467 | |||||||||
CONSUMER CYCLICAL (4.9%) |
||||||||||
779,108 | Bed, Bath & Beyond, Inc. |
31,491,545 | ||||||||
3,390,250 | Liberty Interactive Corp. QVC Group (Class A)1 |
62,685,723 | ||||||||
1,172,601 | Wal-Mart Stores, Inc. |
82,105,522 | ||||||||
Total Consumer Cyclical |
176,282,790 | |||||||||
CONSUMER NON-CYCLICAL (25.4%) |
||||||||||
563,816 | Dentsply Sirona, Inc. |
32,458,887 | ||||||||
827,531 | Diageo, Plc. ADR |
88,984,408 | ||||||||
334,931 | FleetCor Technologies, Inc.1 |
58,713,404 | ||||||||
301,975 | Henry Schein, Inc.1 |
45,054,670 | ||||||||
1,582,472 | Nestle SA ADR |
114,958,679 | ||||||||
1,942,112 | Novartis AG ADR |
137,928,794 | ||||||||
3,109,119 | PayPal Holdings, Inc.1 |
129,525,898 | ||||||||
1,187,504 | Perrigo Co. , Plc. |
98,788,458 | ||||||||
1,331,483 | Unilever NV (NY Shares) |
55,682,619 | ||||||||
3,042,744 | Zoetis, Inc. |
145,443,163 | ||||||||
Total Consumer Non-Cyclical |
907,538,980 | |||||||||
ENERGY (7.3%) |
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1,329,671 | EOG Resources, Inc. |
120,228,852 | ||||||||
857,779 | Occidental Petroleum Corp. |
62,540,667 | ||||||||
1,019,222 | Schlumberger, Ltd. |
79,733,737 | ||||||||
Total Energy |
262,503,256 |
The accompanying notes are an integral part of these
financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value |
|||||||||
COMMON STOCKS (continued) |
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FINANCIALS (19.7%) |
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1,127 | Berkshire Hathaway, Inc. (Class A)1 |
$ | 243,093,900 | |||||||
2,889,885 | Progressive Corp. |
91,060,276 | ||||||||
4,646,330 | US Bancorp |
207,969,731 | ||||||||
3,520,370 | Wells Fargo & Co. |
161,972,224 | ||||||||
Total Financials |
704,096,131 | |||||||||
INDUSTRIALS (1.6%) |
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866,321 | Waste Management, Inc. |
56,882,637 | ||||||||
Total Industrials |
56,882,637 | |||||||||
TECHNOLOGY (14.5%) |
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2,507,303 | Microsoft Corp. |
150,237,596 | ||||||||
6,161,785 | Oracle Corp. |
236,735,779 | ||||||||
1,913,040 | QUALCOMM, Inc. |
131,464,109 | ||||||||
Total Technology |
518,437,484 | |||||||||
Total Common Stocks (Identified cost $2,320,288,189) |
3,325,563,364 |
The accompanying notes are an integral part of these
financial statements.
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BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value |
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REPURCHASE AGREEMENTS (2.3%) |
||||||||||||||||||
$ 82,500,000 | National Australia Bank (Agreement dated 10/31/16 collateralized by U.S. Treasury Inflation Indexed Note 0.125% due 4/15/20,
original par $80,280,000, valued at $84,150,000) |
11/01/16 | 0.300 | % | $ | 82,500,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $82,500,000) |
82,500,000 | |||||||||||||||||
U.S. TREASURY BILLS (3.5%) |
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50,000,000 | U.S. Treasury Bill2 |
11/10/16 | 0.000 | 49,998,450 | ||||||||||||||
75,000,000 | U.S. Treasury Bill2 |
01/05/17 | 0.000 | 74,964,075 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $124,971,367) |
124,962,525 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $2,527,759,556)3 | 98.7 | % | $ | 3,533,025,889 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 1.3 | % | 47,878,049 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 3,580,903,938 |
1 | Non-Income producing security. |
2 | Security issued with a zero coupon. Income is recognized through accretion of discount. |
3 | The aggregate cost for federal income tax purposes is $2,528,610,676, the aggregate gross unrealized appreciation is $1,038,771,329 and the aggregate gross unrealized depreciation is $34,356,116, resulting in net unrealized appreciation of $1,004,415,213. |
The accompanying notes are an integral part of these
financial statements.
BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
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Level 1 unadjusted quoted prices in active markets for identical investments. |
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Level 2 significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
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Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these
financial statements.
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BBH CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Investments, at value |
Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* |
Significant Other Observable Inputs (Level 2)* |
Significant Unobservable Inputs (Level 3)* |
Balance as of October 31, 2016 |
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Common Stocks: |
||||||||||||||||||
Basic Materials |
$ | 154,557,619 | $ | | $ | | $ | 154,557,619 | ||||||||||
Communications |
545,264,467 | | | 545,264,467 | ||||||||||||||
Consumer Cyclical |
176,282,790 | | | 176,282,790 | ||||||||||||||
Consumer Non-Cyclical |
907,538,980 | | | 907,538,980 | ||||||||||||||
Energy |
262,503,256 | | | 262,503,256 | ||||||||||||||
Financials |
704,096,131 | | | 704,096,131 | ||||||||||||||
Industrials |
56,882,637 | | | 56,882,637 | ||||||||||||||
Technology |
518,437,484 | | | 518,437,484 | ||||||||||||||
Repurchase Agreements |
| 82,500,000 | | 82,500,000 | ||||||||||||||
U.S. Treasury Bills |
| 124,962,525 | | 124,962,525 | ||||||||||||||
Investments, at value |
$ | 3,325,563,364 | $ | 207,462,525 | $ | | $ | 3,533,025,889 |
* |
The Funds policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Levels 1, 2 or 3 during the period ended October 31, 2016. |
The accompanying notes are an integral part of these
financial statements.
BBH CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2016
ASSETS: | ||||
Investments in securities, at value (Identified cost $2,445,259,556) |
$ | 3,450,525,889 | ||
Repurchase agreements (Identified cost $82,500,000) |
82,500,000 | |||
Cash |
2,139,706 | |||
Receivables for: |
||||
Investments sold |
56,788,662 | |||
Dividends |
5,727,349 | |||
Shares sold |
346,003 | |||
Investment advisory and administrative fees waiver reimbursement |
55,985 | |||
Interest |
688 | |||
Prepaid assets |
37,465 | |||
Total Assets |
3,598,121,747 | |||
LIABILITIES: |
||||
Payables for: |
||||
Shares redeemed |
6,129,075 | |||
Investment advisory and administrative fees |
4,893,124 | |||
Investments purchased |
4,457,783 | |||
Shareholder servicing fees |
1,238,166 | |||
Custody and fund accounting fees |
184,500 | |||
Professional fees |
71,420 | |||
Distributors fees |
42,351 | |||
Transfer agent fees |
23,257 | |||
Board of Trustees fees |
412 | |||
Accrued expenses and other liabilities |
177,721 | |||
Total Liabilities |
17,217,809 | |||
NET ASSETS |
$ | 3,580,903,938 | ||
Net
Assets Consist of: |
||||
Paid-in capital |
$ | 2,292,455,485 | ||
Undistributed net investment income |
20,655,460 | |||
Accumulated net realized gain on investments in securities |
262,526,660 | |||
Net unrealized appreciation/(depreciation) on investments in securities |
1,005,266,333 | |||
Net
Assets |
$ | 3,580,903,938 | ||
NET ASSET VALUE AND OFFERING PRICE PER SHARE |
||||
CLASS N SHARES |
||||
($3,403,094,402 ÷ 160,933,571 shares outstanding) |
$21.15 | |||
RETAIL CLASS SHARES |
||||
($177,809,536 ÷ 13,675,758 shares outstanding) |
$13.00 |
The accompanying notes are an integral part of these
financial statements.
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BBH CORE SELECT
STATEMENT OF OPERATIONS
For the year ended October 31, 2016
NET INVESTMENT INCOME: |
||||||
Income: |
||||||
Dividends (net of foreign withholding taxes of $1,890,870) |
$ | 63,979,044 | ||||
Interest and other income |
902,965 | |||||
Total Income |
64,882,009 | |||||
Expenses: |
||||||
Investment advisory and administrative fees |
32,385,164 | |||||
Shareholder servicing fees |
8,236,044 | |||||
Distributors fees |
626,423 | |||||
Transfer agent fees |
291,372 | |||||
Custody and fund accounting fees |
262,358 | |||||
Professional fees |
83,698 | |||||
Board of Trustees fees |
54,123 | |||||
Miscellaneous expenses |
525,870 | |||||
Total Expenses |
42,465,052 | |||||
Investment advisory and administrative fees waiver |
(766,257 | ) | ||||
Expense offset arrangement |
(11,557 | ) | ||||
Net Expenses |
41,687,238 | |||||
Net Investment Income |
23,194,771 | |||||
NET REALIZED AND UNREALIZED LOSS: |
||||||
Net realized gain on investments in securities |
344,540,579 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
(380,299,794 | ) | ||||
Net Realized and Unrealized Loss |
(35,759,215 | ) | ||||
Net Decrease in Net Assets Resulting from Operations |
$ | (12,564,444 | ) |
The accompanying notes are an integral part of these
financial statements.
BBH CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, |
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2016 |
2015 |
|||||||||
DECREASE IN NET ASSETS: |
||||||||||
Operations: |
||||||||||
Net investment income |
$ | 23,194,771 | $ | 29,393,784 | ||||||
Net realized gain on investments in securities |
344,540,579 | 395,381,395 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
(380,299,794 | ) | (225,720,467 | ) | ||||||
Net increase/(decrease) in net assets resulting from operations |
(12,564,444 | ) | 199,054,712 | |||||||
Dividends and distributions declared: |
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From net investment income: |
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Class N |
(24,454,690 | ) | (36,725,174 | ) | ||||||
Retail Class |
(1,357,111 | ) | (2,814,050 | ) | ||||||
From net realized gains: |
||||||||||
Class N |
(314,097,487 | ) | (89,273,564 | ) | ||||||
Retail Class |
(29,099,366 | ) | (9,365,888 | ) | ||||||
Total dividends and distributions declared |
(369,008,654 | ) | (138,178,676 | ) | ||||||
Share transactions: |
||||||||||
Proceeds from sales of shares* |
347,243,754 | 2,175,445,135 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions |
312,156,128 | 111,485,040 | ||||||||
Proceeds from short-term redemption fees |
21,134 | 11,858 | ||||||||
Cost of shares redeemed* |
(1,947,081,352 | ) | (3,314,063,614 | ) | ||||||
Net decrease in net assets resulting from share transactions |
(1,287,660,336 | ) | (1,027,121,581 | ) | ||||||
Total decrease in net assets |
(1,669,233,434 | ) | (966,245,545 | ) | ||||||
NET ASSETS: |
||||||||||
Beginning of year |
5,250,137,372 | 6,216,382,917 | ||||||||
End of year (including undistributed net investment income of $20,655,460 and $23,272,490, respectively) |
$ | 3,580,903,938 | $ | 5,250,137,372 |
* |
Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these
financial statements.
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BBH CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each
year.
For the years ended October 31, |
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2016 |
2015 |
2014 |
2013 |
2012 |
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Net asset value, beginning of year |
$ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | $ | 15.07 | |||||||||||
Income from investment operations: |
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Net investment income1 |
0.12 | 0.12 | 0.14 | 0.13 | 0.10 | ||||||||||||||||
Net realized and unrealized gain (loss) |
(0.08 | ) | 0.64 | 1.70 | 3.95 | 2.54 | |||||||||||||||
Total income from investment operations |
0.04 | 0.76 | 1.84 | 4.08 | 2.64 | ||||||||||||||||
Less dividends and distributions: |
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From net investment income |
(0.12 | ) | (0.14 | ) | (0.10 | ) | (0.10 | ) | (0.07 | ) | |||||||||||
From net realized gains |
(1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | (0.18 | ) | |||||||||||
Total dividends and distributions |
(1.68 | ) | (0.49 | ) | (0.53 | ) | (0.33 | ) | (0.25 | ) | |||||||||||
Short-term redemption fees1,2 |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
Net asset value, end of year |
$ | 21.15 | $ | 22.79 | $ | 22.52 | $ | 21.21 | $ | 17.46 | |||||||||||
Total return |
0.40 | % | 3.47 | % | 8.90 | % | 23.78 | % | 17.86 | % | |||||||||||
Ratios/Supplemental data: |
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Net assets, end of year (in millions) |
$ | 3,403 | $ | 4,970 | $ | 5,816 | $ | 5,645 | $ | 3,049 | |||||||||||
Ratio of expenses to average net assets before reductions |
1.01 | % | 1.07 | % | 1.07 | % | 1.09 | % | 1.12 | % | |||||||||||
Fee waiver |
0.01 | %3 | 0.07 | %3 | 0.07 | %3 | 0.09 | %3 | 0.12 | %3 | |||||||||||
Expense offset arrangement |
0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | |||||||||||
Ratio of expenses to average net assets after reductions |
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | |||||||||||
Ratio of net investment income to average net assets |
0.57 | % | 0.53 | % | 0.66 | % | 0.65 | % | 0.63 | % | |||||||||||
Portfolio turnover rate |
12 | % | 8 | % | 8 | % | 12 | % | 14 | % |
1 | Calculated using average shares outstanding for the year. |
2 | Less than $0.01. |
3 | The ratio of expenses to average net assets for the fiscal years ended October 31, 2016, 2015, 2014, 2013 and 2012, reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.00%. The agreement is effective for all periods presented and is effective through March 1, 2017 unless renewed by all parties to the agreement. For the fiscal years ended October 31, 2016, 2015, 2014, 2013 and 2012, the waived fees were $531,298, $3,938,986, $4,238,260, $3,983,262, and $1,853,202, respectively. |
4 | Less than 0.01%. |
The accompanying notes are an integral part of these
financial statements.
BBH CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Retail Class share outstanding throughout each
year.
For the years ended October 31, |
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2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||
Net asset value, beginning of year |
$ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | $ | 10.11 | |||||||||||
Income from investment operations: |
|||||||||||||||||||||
Net investment income1 |
0.05 | 0.03 | 0.06 | 0.06 | 0.05 | ||||||||||||||||
Net realized and unrealized gain (loss) |
(0.07 | ) | 0.42 | 1.11 | 2.60 | 1.69 | |||||||||||||||
Total income/(loss) from investment operations |
(0.02 | ) | 0.45 | 1.17 | 2.66 | 1.74 | |||||||||||||||
Less dividends and distributions: |
|||||||||||||||||||||
From net investment income |
(0.07 | ) | (0.11 | ) | (0.07 | ) | (0.05 | ) | (0.06 | ) | |||||||||||
From net realized gains |
(1.56 | ) | (0.35 | ) | (0.43 | ) | (0.23 | ) | (0.18 | ) | |||||||||||
Total dividends and distributions |
(1.63 | ) | (0.46 | ) | (0.50 | ) | (0.28 | ) | (0.24 | ) | |||||||||||
Short-term redemption fees1,2 |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
Net asset value, end of year |
$ | 13.00 | $ | 14.65 | $ | 14.66 | $ | 13.99 | $ | 11.61 | |||||||||||
Total return |
0.19 | % | 3.14 | % | 8.63 | % | 23.42 | % | 17.64 | % | |||||||||||
Ratios/Supplemental data: |
|||||||||||||||||||||
Net assets, end of year (in millions) |
$ | 178 | $ | 280 | $ | 400 | $ | 367 | $ | 267 | |||||||||||
Ratio of expenses to average net assets before reductions |
1.33 | % | 1.39 | % | 1.40 | % | 1.42 | % | 1.43 | % | |||||||||||
Fee waiver |
0.10 | %3 | 0.14 | %3 | 0.15 | %3 | 0.17 | %3 | 0.18 | %3 | |||||||||||
Expense offset arrangement |
0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | |||||||||||
Ratio of expenses to average net assets after reductions |
1.23 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | |||||||||||
Ratio of net investment income to average net assets |
0.37 | % | 0.24 | % | 0.40 | % | 0.44 | % | 0.50 | % | |||||||||||
Portfolio turnover rate |
12 | % | 8 | % | 8 | % | 12 | % | 14 | % |
1 | Calculated using average shares outstanding for the year. |
2 | Less than $0.01. |
3 | The ratio of expenses to average net assets for the fiscal years ended October 31, 2016, 2015, 2014, 2013 and 2012, reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.25%. The agreement is effective for all periods presented and is effective through March 1, 2017 unless renewed by all parties to the agreement. For the fiscal years ended October 31, 2016, 2015, 2014, 2013 and 2012, the waived fees were $234,959, $551,384, $577,948, $568,410, and $633,118, respectively. |
4 | Less than 0.01%. |
The accompanying notes are an integral part of these
financial statements.
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BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
1. |
Organization. The Fund is a separate, non-diversified series of BBH Trust (the Trust), which is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on November 2, 1998. The Fund offers Class N and Retail Class shares. Class N and Retail Class shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Retail Class shares automatically convert to any other share class of the Fund. Effective January 29, 2016, the Fund reopened to new investors. As of October 31, 2016, there were six series of the Trust. |
2. |
Significant Accounting Policies. The Funds financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services Investments Companies. The following summarizes significant accounting policies of the Fund: |
A. |
Valuation of Investments. (1) The value of investments listed on a securities exchange is based on the last sale price on that exchange prior to the time when assets are valued, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchange; (2) securities not traded on an exchange are valued at the average of the quoted bid and asked prices in the over-the counter market; (3) securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board; (4) short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent fair value by the Board. |
B. |
Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Dividend income and other distributions received from portfolio securities are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of securities received at ex-date. Distributions received on securities that represent a return of capital or a capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued daily. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
C. |
Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. |
Repurchase Agreements. The Fund may enter into repurchase agreements. 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 normally is in excess of the purchase price, reflecting an agreed upon interest rate. The rate is effective for the period of time that assets of the Fund are invested in the agreement and is not related to the coupon 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 Funds custodian or sub-custodian will take possession of the securities subject to repurchase agreements. The investment adviser, custodian or sub-custodian will monitor the value of the underlying collateral each day to ensure that the value of the security always equals or exceeds the repurchase price. |
Repurchase agreements are entered into by the Fund under Master Repurchase Agreements (MRA) which permit the Fund, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables under the MRA with collateral held and/or posted to the counterparty and create one single net payment due to or from the Fund. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterpartys bankruptcy or insolvency. Lastly, the MRA does not preclude the Fund from selling, transferring, pledging or hypothecating the underlying collateral but no such transaction shall relieve the Fund of its obligation to transfer the collateral to the counterparty upon the latters repurchase of the securities. |
The Funds repurchase agreements as of October 31, 2016 are shown on a gross basis and the required disclosures under Accounting Standards Update (ASU) 2013-01 are shown in the Portfolio of Investments. Repurchase agreements are subject to credit risks. |
E. |
Federal Income Taxes. It is the Trusts policy to comply with the requirements of the Internal Revenue Code (the 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. The Fund files a tax return annually using tax accounting methods required under provisions of the Code, which may differ from GAAP, which is the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported in these financial statements may differ from that reported on the Funds tax |
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BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
return, due to certain book-to-tax timing differences such as losses deferred due to wash sale transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV. |
The Fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The Fund did not have any unrecognized tax benefits as of October 31, 2016, nor were there any increases or decreases in unrecognized tax benefits for the year then ended. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statement of Operations. During the year ended October 31, 2016, the Fund did not incur any such interest or penalties. The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for the prior three fiscal years. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. |
F. |
Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, if any, are paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amounts of $338,552,177 and $30,456,477 to Class N shares and Retail Class shareholders, respectively, during the year ended October 31, 2016. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
The tax character of distributions paid during the fiscal years ended October 31, 2016 and 2015, respectively, were as follows: |
Distributions paid
from: |
|||||||||||||||||||||||
Ordinary income |
Net long-term capital gain |
Total taxable distributions |
Tax return of capital |
Total distributions paid |
|||||||||||||||||||
2016: |
$ | 25,811,801 | $ | 343,196,853 | $ | 369,008,654 | | $ | 369,008,654 | ||||||||||||||
2015: |
57,953,050 | 80,225,626 | 138,178,676 | | 138,178,676 |
As of October 31, 2016 and 2015, respectively, the components of accumulated earnings/(deficit) on a tax basis were as follows: |
Components of accumulated
earnings/(deficit): |
|||||||||||||||||||||||||||||
Undistributed Ordinary income |
Undistributed long-term capital gain |
Accumulated earnings |
Accumulated capital and other losses |
Other book/tax temporary differences |
Unrealized appreciation/ (depreciation) |
Total accumulated earnings/ (deficit) |
|||||||||||||||||||||||
2016: |
$ | 20,655,460 | $ | 263,377,781 | $ | 284,033,241 | | $ | (851,121 | ) | $ | 1,005,266,333 | $ | 1,288,448,453 | |||||||||||||||
2015: |
23,272,490 | 343,185,744 | 366,458,234 | | (411,242 | ) | 1,385,566,127 | 1,751,613,119 |
The Fund did not have a net capital loss carryforward at October 31, 2016. |
Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carryforward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period and they will retain their character as either short-term or long-term capital losses rather than being considered all short-term capital losses. |
Total distributions paid may differ from amounts reported in the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid. |
The differences between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales. |
To the extent future capital gains are offset by capital loss carryforwards, if any; such gains will not be distributed. |
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BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
G. |
Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. |
Fees and Other Transactions with Affiliates. |
A. |
Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (Agreement) with the Trust, Brown Brothers Harriman & Co. (BBH) through a separately identifiable department (SID or Investment Adviser) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund pays a combined fee for investment advisory and administrative services calculated daily and paid monthly at an annual rate equivalent to 0.80% per annum on the first $3,000,000,000 of the Funds average daily net assets and 0.75% per annum on the Funds average daily net assets over $3,000,000,000. Prior to the current year, the fee was a flat rate of 0.80%. For the year ended October 31, 2016, the Fund incurred $32,385,164 under the Agreement. |
B. |
Investment Advisory and Administrative Fee Waivers. Effective July 14, 2010, the Investment Adviser contractually agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary course of the Funds business and for Retail Class, amounts payable pursuant to any plan adopted in accordance with Rule 12b-1) of Class N and Retail Class to 1.00%. The agreement will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. The agreement may only be terminated during its term with approval of the Funds Board of Trustees. For the year ended October 31, 2016, the Investment Adviser waived fees in the amount of $531,298 and $234,959 for Class N and Retail Class, respectively. |
C. |
Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% of Class N and Retail Class shares average daily net assets. Prior to the current year, the fee was a flat rate of 0.25%. For the year ended October 31, 2016, the Fund incurred shareholder servicing fees in the amount of $7,790,350 and $445,694 for Class N and Retail Class, respectively. |
D. |
Distribution (12b-1) Fees. The Fund has adopted a distribution plan pursuant to Rule 12b-1 for Retail Class shares that allows the Fund to pay distribution and other fees for the sale of its shares and for services provided to shareholders. Because these fees are paid out of the Funds assets continuously, over time these fees will increase the cost of investment and may cost the shareholder |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
more than paying other types of sales charges. The maximum annual distribution fee for Retail Class shares is 0.25% of the average daily net assets of the Retail Class shares of the Fund. With this agreement along with the investment advisory and waiver agreements above, it is anticipated that total operating expenses for Retail Class shares will not exceed 1.25% of the average daily net assets. For the year ended October 31, 2016, Retail Class shares of the Fund incurred $557,096 for Distribution (12b-1) Fees. |
F. |
Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Funds cash and investments and calculates the Funds daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Funds net asset value. For the year ended October 31, 2016, the Fund incurred $262,358 in custody and fund accounting fees. These fees for the Fund were reduced by $11,557 as a result of an expense offset arrangement with the Funds custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Funds expenses. 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 pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the year ended October 31, 2016, was $750. This amount is presented under line item Custody and fund accounting fees in the Statements of Operations. |
F. |
Board of Trustees Fees. Each Trustee who is not an interested person as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the year ended October 31, 2016, the Fund incurred $54,123 in independent Trustee compensation and reimbursements. |
4. |
Investment Transactions. For the year ended October 31, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $467,443,518 and $1,884,098,446, respectively. |
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BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
5. |
Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N and Retail Class shares of beneficial interest at no par value. Transactions in Class N and Retail Class shares were as follows: |
For the year ended October 31, 2016 |
For the year ended October 31, 2015 |
|||||||||||||||||
Shares |
Dollars |
Shares |
Dollars |
|||||||||||||||
Class N |
||||||||||||||||||
Shares sold |
15,774,935 | $ | 325,665,400 | 57,924,227 | $ | 1,271,498,929 | ||||||||||||
Shares issued in connection with reinvestments of dividends |
13,754,570 | 281,831,140 | 4,555,895 | 100,047,448 | ||||||||||||||
Proceeds from short-term redemption fees |
N/A | 18,776 | N/A | 8,714 | ||||||||||||||
Shares redeemed |
(86,710,828 | ) | (1,824,200,480 | ) | (102,635,558 | ) | (2,286,971,325 | ) | ||||||||||
Net decrease |
(57,181,323 | ) | $ | (1,216,685,164 | ) | (40,155,436 | ) | $ | (915,416,234 | ) | ||||||||
Retail Class |
||||||||||||||||||
Shares sold |
1,664,283 | $ | 21,578,354 | 64,100,288 | $ | 903,946,206 | ||||||||||||
Shares issued in connection with reinvestments of dividends |
2,402,931 | 30,324,988 | 807,739 | 11,437,592 | ||||||||||||||
Proceeds from short-term redemption fees |
N/A | 2,358 | N/A | 3,144 | ||||||||||||||
Shares redeemed |
(9,517,253 | ) | (122,880,872 | ) | (73,108,125 | ) | (1,027,092,289 | ) | ||||||||||
Net decrease |
(5,450,039 | ) | $ | (70,975,172 | ) | (8,200,098 | ) | $ | (111,705,347 | ) |
BBH CORE SELECT
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
6. |
Principal Risk Factors and Indemnifications. |
A. |
Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Funds prospectus, including but not limited to, those described below: |
B. |
Indemnifications. Under the Trusts organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. |
Subsequent Events. Management has evaluated events and transactions that have occurred since October 31, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
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BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES
October 31, 2016 (unaudited)
BBH CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
October 31, 2016 (unaudited)
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class N |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,010 | $ | 5.05 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,020 | $ | 5.08 |
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Retail Class |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,009 | $ | 6.06 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,019 | $ | 6.09 |
1 | Expenses are equal to the Funds annualized expense ratio of 1.00% and 1.20% for Class N and Retail Class shares, respectively, 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 purposes of the calculation, the applicable annualized expense ratio for each class of shares is subtracted from the assumed return before expenses. |
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BBH CORE SELECT
CONFLICTS OF INTEREST
October 31, 2016 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
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BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
BBH CORE SELECT
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
Ethics. With respect to the allocation of investment
opportunities, BBH has adopted and implemented policies designed to achieve fair and equitable allocation of investment opportunities among its clients
over time. BBH has structured the portfolio managers compensation in a manner it believes is reasonably designed to safeguard the Fund from being
negatively affected as a result of any such potential conflicts.
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BBH CORE SELECT
ADDITIONAL FEDERAL TAX INFORMATION
October 31, 2016 (unaudited)
TRUSTEES AND OFFICERS OF BBH CORE SELECT
(unaudited)
Name and Birth Year |
|
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
Independent Trustees |
||||||||||
H.
Whitney Wagner Born: 1956 |
Chairman of the Board and Trustee |
Chairman Since 2014; Trustee Since 2007 and 2006-2007 with the Predecessor Trust |
President, Clear Brook Advisors, a registered investment advisor. |
6 |
None. |
|||||
Andrew S. Frazier Born: 1948 |
Trustee |
Since 2010 |
Consultant to Western World Insurance Group, Inc. (WWIG) (January 2010 to January 2012). |
6 |
Director of WWIG. |
|||||
Mark M. Collins Born: 1956 |
Trustee |
Since 2011 |
Partner of Brown Investment Advisory Incorporated, a registered investment advisor. |
6 |
Chairman of Dillon Trust Company. |
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John M. Tesoro Born: 1952 |
Trustee |
Since 2014 |
Partner, Certified Public Accountant, KPMG LLP (Retired in 2012). |
6 |
Trustee, Bridge Builder Trust (8 Funds); Director, Teton Advisors, Inc. (a registered investment adviser). |
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TRUSTEES AND OFFICERS OF BBH CORE SELECT
(unaudited)
Name, Address and Birth Year |
|
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
Interested Trustees |
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Susan C. Livingston+ 50 Post Office Square Boston, MA 02110 Born: 1957 |
Trustee |
Since 2011 |
Partner (since 1998) and Senior Client Advocate (since 2010) for BBH&Co.; Director of BBH Luxembourg S.C.A. (since
1992). |
6 |
None. |
|||||
John A. Gehret+ 140 Broadway New York, NY 10005 Born: 1959 |
Trustee |
Since 2011 |
Limited Partner of BBH&Co. (2012-present); General Partner of BBH&Co. (1998 to 2011). |
6 |
None. |
TRUSTEES AND OFFICERS OF BBH CORE SELECT
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5
Years |
|
Officers |
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Jean-Pierre Paquin 140 Broadway New York, NY 10005 Born: 1973 |
President and Principal Executive Officer |
Since 2016 |
Partner of BBH&Co. since 2015; joined BBH&Co. in 1996. |
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Daniel Greifenkamp 140 Broadway New York, NY 10005 Born: 1969 |
Vice
President |
Since 2016 |
Managing Director of BBH&Co. since 2014; joined BBH&Co. in 2011. |
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Charles H. Schreiber 140 Broadway New York, NY 10005 Born: 1957 |
Treasurer and Principal Financial Officer |
Since 2007 2006-2007 with the Predecessor Trust |
Senior Vice President of BBH&Co. since 2001; joined BBH&Co. in 1999. |
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Paul F. Gallagher 140 Broadway New York, NY 10005 Born: 1959 |
Chief Compliance Officer (CCO) |
Since 2015 |
Senior Vice President of BBH&Co. since September 2015; Executive Director, Counsel, Morgan Stanley, Smith Barney LLC (2009-September
2015). |
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Keith M. Kelley 140 Broadway New York, NY 10005 Born: 1983 |
Anti-Money Laundering Officer (AMLO) |
Since 2016 |
Vice
President of BBH&Co. since February 2016; joined BBH&Co. in 2016; Director, Legal and Compliance, Morgan Stanley Smith Barney LLC
(2014-February 2016); Compliance Manager, State Street Corporation (2013-2014); Associate, J.P. Morgan Chase & Co.
(2011-2013). |
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Suzan Barron 50 Post Office Square Boston, MA 02110 Born: 1964 |
Secretary |
Since 2009 |
Senior Vice President and Senior Investor Services Counsel, BBH&Co. since 2005. |
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TRUSTEES AND OFFICERS OF BBH CORE SELECT
(unaudited)
Name, Address and Birth Year |
|
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5
Years |
Rowena Rothman 140 Broadway New York, NY 10005 Born: 1967 |
Assistant Treasurer |
Since 2011 |
Vice
President of BBH&Co. since 2009. |
|||
James D. Kerr 50 Post Office Square Boston, MA 02110 Born: 1983 |
Assistant Secretary |
Since 2015 |
Assistant Vice President and Investor Services Associate Counsel since 2014; joined BBH&Co. in 2013; Assistant District Attorney, Middlesex
County, Massachusetts (October 2011-September 2013). |
# |
All officers of the Trust hold office for one year and until their respective successors are chosen and qualified (subject to the ability of the Trustees to remove any officer in accordance with the Trusts By-laws). Mr. Wagner previously served on the Board of Trustees of the Predecessor Trust. |
+ |
Ms. Livingston and Mr. Gehret are interested persons of the Trust as defined in the 1940 Act because of their positions as Partner and Limited Partner of BBH&Co., respectively. |
ˆ |
The Fund Complex consists of the Trust, which has six series, and each is counted as one Portfolio for purposes of this table. |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 |
Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: |
Call
1-800-575-1265 |
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By E-mail send your request to: |
bbhfunds@bbh.com |
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On the internet: |
www.bbhfunds.com |
BBH GLOBAL CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE
October 31, 2016
1 | MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. |
2 | We prepare proprietary financial models for each Core Select company in order to determine an estimate of intrinsic value. Discounted cash flow analysis is the primary quantitative model used in our research process. We supplement our discounted cash flow work with other quantitative analyses, such as economic profit models, internal rate of return models, and free cash flow multiples. |
BBH GLOBAL CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
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BBH GLOBAL CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
about the outlook for Canadian natural gas producers
given their greater distance from and limited access to key demand centers in the U.S. We sold our position in Baxalta following the
announcement that the company was being acquired by Shire.
BBH GLOBAL CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
population. While going through a transition
period, management has done an excellent job focusing the company on three attractive core businesses (pharmaceuticals, generics, and
eye-care) where Novartis has market leadership and significant scale.
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BBH GLOBAL CORE SELECT
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
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1 | The Funds performance assumes the reinvestment of all dividends and distributions. The MSCI World Index has been adjusted to reflect reinvestment of dividends on securities. The MSCI World Index is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Funds performance. The index is unmanaged. Investments cannot be made in an index. |
BBH GLOBAL CORE SELECT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
December 22, 2016
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BBH GLOBAL CORE SELECT
PORTFOLIO ALLOCATION
October 31, 2016
U.S. $ Value |
Percent of Net Assets |
|||||||||
Common Stocks: |
||||||||||
Canada |
$ | 2,770,489 | 2.5 | % | ||||||
Curaçao |
2,010,511 | 1.8 | ||||||||
France |
5,295,239 | 4.7 | ||||||||
Germany |
3,405,688 | 3.0 | ||||||||
Ireland |
3,024,289 | 2.7 | ||||||||
Italy |
2,887,002 | 2.6 | ||||||||
Netherlands |
1,698,480 | 1.5 | ||||||||
Sweden |
3,745,470 | 3.4 | ||||||||
Switzerland |
7,867,823 | 7.0 | ||||||||
United Kingdom |
12,007,041 | 10.7 | ||||||||
United States |
55,980,234 | 50.0 | ||||||||
Repurchase Agreements |
8,500,000 | 7.6 | ||||||||
Cash and Other Assets in Excess of Liabilities |
2,843,863 | 2.5 | ||||||||
NET ASSETS |
$ | 112,036,129 | 100.0 | % |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO ALLOCATION (continued)
October 31, 2016
U.S. $ Value |
Percent of Net Assets |
|||||||||
Common Stocks: |
||||||||||
Basic Materials |
$ | 9,522,106 | 8.5 | % | ||||||
Communications |
13,066,151 | 11.7 | ||||||||
Consumer Cyclical |
6,062,489 | 5.4 | ||||||||
Consumer Non-Cyclical |
39,571,101 | 35.3 | ||||||||
Energy |
8,507,161 | 7.6 | ||||||||
Financials |
7,619,026 | 6.8 | ||||||||
Technology |
16,344,232 | 14.6 | ||||||||
Repurchase Agreements |
8,500,000 | 7.6 | ||||||||
Cash and Other Assets in Excess of Liabilities |
2,843,863 | 2.5 | ||||||||
NET ASSETS |
$ | 112,036,129 | 100.0 | % |
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS
October 31, 2016
Shares |
Value |
|||||||||
COMMON STOCKS (89.9%) |
||||||||||
CANADA (2.5%) |
||||||||||
ENERGY |
||||||||||
31,500 | Vermilion Energy, Inc. |
$ | 1,236,308 | |||||||
FINANCIALS |
||||||||||
22,550 | Intact Financial Corp. |
1,534,181 | ||||||||
Total Canada |
2,770,489 | |||||||||
CURAÇAO (1.8%) |
||||||||||
ENERGY |
||||||||||
25,700 | Schlumberger, Ltd. |
2,010,511 | ||||||||
Total Curaçao |
2,010,511 | |||||||||
FRANCE (4.7%) |
||||||||||
COMMUNICATIONS |
||||||||||
69,870 | JCDecaux S.A. |
2,132,467 | ||||||||
CONSUMER NON-CYCLICAL |
||||||||||
40,700 | Sanofi |
3,162,772 | ||||||||
Total France |
5,295,239 | |||||||||
GERMANY (3.0%) |
||||||||||
BASIC MATERIALS |
||||||||||
32,400 | Brenntag AG |
1,731,598 | ||||||||
42,400 | Fuchs Petrolub SE |
1,674,090 | ||||||||
Total Germany |
3,405,688 | |||||||||
IRELAND (2.7%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
36,354 | Perrigo Co., Plc. |
3,024,289 | ||||||||
Total Ireland |
3,024,289 | |||||||||
ITALY (2.6%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
287,350 | Davide Campari-Milano SpA |
2,887,002 | ||||||||
Total Italy |
2,887,002 | |||||||||
NETHERLANDS (1.5%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
40,600 | Unilever NV |
1,698,480 | ||||||||
Total Netherlands |
1,698,480 |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
SWEDEN (3.4%) |
||||||||||
ENERGY |
||||||||||
182,975 | Lundin Petroleum AB1 |
$ | 3,289,949 | |||||||
FINANCIALS |
||||||||||
33,400 | Svenska Handelsbanken AB (Class A) |
455,521 | ||||||||
Total Sweden |
3,745,470 | |||||||||
SWITZERLAND (7.0%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
50,025 | Nestle SA |
3,629,171 | ||||||||
59,626 | Novartis AG |
4,238,652 | ||||||||
Total Switzerland |
7,867,823 | |||||||||
UNITED KINGDOM (10.7%) |
||||||||||
COMMUNICATIONS |
||||||||||
40,715 | Liberty Global, Plc. (Series C)1 |
1,294,737 | ||||||||
CONSUMER NON-CYCLICAL |
||||||||||
345,100 | Aggreko, Plc. |
3,376,210 | ||||||||
151,125 | Diageo, Plc. |
4,015,950 | ||||||||
53,725 | Nielsen Holdings, Plc. |
2,418,699 | ||||||||
10,100 | Reckitt Benckiser Group, Plc. |
901,445 | ||||||||
10,712,304 | ||||||||||
Total United Kingdom |
12,007,041 | |||||||||
UNITED STATES (50.0%) |
||||||||||
BASIC MATERIALS |
||||||||||
42,100 | Celanese Corp. (Series A) |
3,069,932 | ||||||||
26,025 | Praxair, Inc. |
3,046,486 | ||||||||
6,116,418 | ||||||||||
COMMUNICATIONS |
||||||||||
6,873 | Alphabet, Inc. (Class C)1 |
5,392,143 | ||||||||
169,128 | Discovery Communications, Inc. (Class C)1 |
4,246,804 | ||||||||
9,638,947 | ||||||||||
CONSUMER CYCLICAL |
||||||||||
27,550 | Bed, Bath & Beyond, Inc. |
1,113,571 | ||||||||
104,400 | Liberty Interactive Corp. QVC Group (Class A)1 |
1,930,356 | ||||||||
43,110 | Wal-Mart Stores, Inc. |
3,018,562 | ||||||||
6,062,489 |
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
UNITED STATES (continued) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
10,031 | FleetCor Technologies, Inc.1 |
$ | 1,758,435 | |||||||
93,900 | PayPal Holdings, Inc.1 |
3,911,874 | ||||||||
95,149 | Zoetis, Inc. |
4,548,122 | ||||||||
10,218,431 | ||||||||||
ENERGY |
||||||||||
27,025 | Occidental Petroleum Corp. |
1,970,393 | ||||||||
FINANCIALS |
||||||||||
122,350 | Wells Fargo & Co. |
5,629,324 | ||||||||
TECHNOLOGY |
||||||||||
78,475 | Microsoft Corp. |
4,702,222 | ||||||||
188,925 | Oracle Corp. |
7,258,499 | ||||||||
63,788 | QUALCOMM, Inc. |
4,383,511 | ||||||||
16,344,232 | ||||||||||
Total United States |
55,980,234 | |||||||||
Total Common Stocks (Identified cost $91,538,145) |
100,692,266 |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value |
|||||||||||||||
REPURCHASE AGREEMENTS (7.6%) |
||||||||||||||||||
$ 8,500,000 | National Australia Bank (Agreement dated 10/31/2016 collateralized by U.S. Treasury Inflation Indexed Note 0.125%, due 04/15/20, original par $8,280,000, valued at $8,670,000) |
11/01/16 | 0.300 | % | $ | 8,500,000 | ||||||||||||
Total Repurchase Agreements (Identified cost $8,500,000) |
8,500,000 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $100,038,145)2 | 97.5 | % | $ | 109,192,266 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.5 | % | 2,843,863 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 112,036,129 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $100,810,676, the aggregate gross unrealized appreciation is $16,455,103 and the aggregate gross unrealized depreciation is $8,073,513, resulting in net unrealized appreciation of $8,381,590. |
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
|
Level 1 unadjusted quoted prices in active markets for identical investments. |
|
Level 2 significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments). |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Investments, at value |
Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* |
Significant Other Observable Inputs (Level 2)* |
Significant Unobservable Inputs (Level 3)* |
Balance as of October 31, 2016 |
||||||||||||||
Common Stocks: |
||||||||||||||||||
Basic Materials |
$ | 6,116,418 | $ | 3,405,688 | $ | | $ | 9,522,106 | ||||||||||
Communications |
10,933,684 | 2,132,467 | | 13,066,151 | ||||||||||||||
Consumer Cyclical |
6,062,489 | | | 6,062,489 | ||||||||||||||
Consumer Non-Cyclical |
15,661,419 | 23,909,682 | | 39,571,101 | ||||||||||||||
Energy |
5,217,212 | 3,289,949 | | 8,507,161 | ||||||||||||||
Financials |
7,163,505 | 455,521 | | 7,619,026 | ||||||||||||||
Technology |
16,344,232 | | | 16,344,232 | ||||||||||||||
Repurchase Agreements |
| 8,500,000 | | 8,500,000 | ||||||||||||||
Investments, at value |
$ | 67,498,959 | $ | 41,693,307 | $ | | $ | 109,192,266 |
* |
The Funds policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Levels 1, 2 or 3 during the period ended October 31, 2016. |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2016
ASSETS: |
||||
Investments in securities, at value (Identified cost $91,538,145) |
$ | 100,692,266 | ||
Repurchase agreements (Identified cost $8,500,000) |
8,500,000 | |||
Cash |
2,220,398 | |||
Foreign currency at value (Identified cost $107,095) |
105,258 | |||
Receivables for: |
||||
Investments sold |
1,938,516 | |||
Shares sold |
93,750 | |||
Dividends |
73,591 | |||
Investment advisory and administrative fees waiver reimbursement |
12,271 | |||
Interest |
71 | |||
Prepaid assets |
1,043 | |||
Total Assets |
113,637,164 | |||
LIABILITIES: |
||||
Payables for: |
||||
Investments purchased |
1,279,811 | |||
Investment advisory and administrative fees |
182,243 | |||
Professional fees |
56,627 | |||
Shareholder servicing fees |
38,367 | |||
Custody and fund accounting fees |
19,832 | |||
Distributors fees |
3,137 | |||
Transfer agent fees |
2,683 | |||
Board of Trustees fees |
509 | |||
Accrued expenses and other liabilities |
17,826 | |||
Total Liabilities |
1,601,035 | |||
NET ASSETS |
$ | 112,036,129 | ||
Net
Assets Consist of: |
||||
Paid-in capital |
$ | 103,089,697 | ||
Undistributed net investment income |
567,899 | |||
Accumulated net realized loss on investments in securities and foreign exchange transactions |
(772,531 | ) | ||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations |
9,151,064 | |||
Net
Assets |
$ | 112,036,129 | ||
NET ASSET VALUE AND OFFERING PRICE PER SHARE |
||||
CLASS N SHARES |
||||
($108,491,331 ÷ 9,765,397 shares outstanding) |
$11.11 | |||
RETAIL CLASS SHARES |
||||
($3,544,798 ÷ 320,932 shares outstanding) |
$11.05 |
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
STATEMENT OF OPERATIONS
For the year ended October 31, 2016
NET INVESTMENT INCOME: |
||||||
Income: |
||||||
Dividends (net of foreign withholding taxes of $158,941) |
$ | 2,036,396 | ||||
Interest and other income |
22,469 | |||||
Total Income |
2,058,865 | |||||
Expenses: |
||||||
Investment advisory and administrative fees |
1,076,361 | |||||
Shareholder servicing fees |
226,602 | |||||
Professional fees |
68,011 | |||||
Board of Trustees fees |
54,220 | |||||
Custody and fund accounting fees |
39,219 | |||||
Distributors fees |
31,024 | |||||
Transfer agent fees |
29,825 | |||||
Miscellaneous expenses |
81,525 | |||||
Total Expenses |
1,606,787 | |||||
Investment advisory and administrative fees waiver |
(186,737 | ) | ||||
Expense offset arrangement |
(6,085 | ) | ||||
Net Expenses |
1,413,965 | |||||
Net Investment Income |
644,900 | |||||
NET REALIZED AND UNREALIZED LOSS: |
||||||
Net realized gain on investments in securities |
290,364 | |||||
Net realized loss on foreign exchange transactions |
(912 | ) | ||||
Net realized gain on investments in securities and foreign exchange transactions and translations |
289,452 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
(2,263,402 | ) | ||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations |
13,477 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations |
(2,249,925 | ) | ||||
Net Realized and Unrealized Loss |
(1,960,473 | ) | ||||
Net Decrease in Net Assets Resulting from Operations |
$ | (1,315,573 | ) |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
STATEMENTS OF CHANGES IN NET ASSETS
October 31, 2016
For the years ended October 31, |
|||||||||||
2016 |
2015 |
||||||||||
INCREASE (DECREASE) IN NET ASSETS: |
|||||||||||
Operations: |
|||||||||||
Net investment income |
$ | 644,900 | $ | 762,145 | |||||||
Net realized gain on investments in securities and foreign exchange transactions and translations |
289,452 | 101,396 | |||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations |
(2,249,925 | ) | 2,422,897 | ||||||||
Net increase (decrease) in net assets resulting from operations |
(1,315,573 | ) | 3,286,438 | ||||||||
Dividends and distributions declared: |
|||||||||||
From net investment income: |
|||||||||||
Class N |
(634,126 | ) | (1,402,150 | ) | |||||||
Retail Class |
(14,668 | ) | (27,140 | ) | |||||||
From net realized gains: |
|||||||||||
Class N |
(675,503 | ) | (1,446,840 | ) | |||||||
Retail Class |
(22,680 | ) | (28,597 | ) | |||||||
Total dividends and distributions declared |
(1,346,977 | ) | (2,904,727 | ) | |||||||
Share transactions: |
|||||||||||
Proceeds from sales of shares |
12,490,720 | * | 37,114,739 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions |
1,305,720 | 2,765,427 | |||||||||
Proceeds from short-term redemption fees |
297 | | |||||||||
Cost of shares redeemed |
(35,196,533 | )* | (33,059,963 | ) | |||||||
Net increase (decrease) in net assets resulting from share transactions |
(21,399,796 | ) | 6,820,203 | ||||||||
Total increase (decrease) in net assets |
(24,062,346 | ) | 7,201,914 | ||||||||
NET ASSETS: |
|||||||||||
Beginning of year |
136,098,475 | 128,896,561 | |||||||||
End of year (including undistributed net investment income of $567,899 and $572,705, respectively) |
$ | 112,036,129 | $ | 136,098,475 |
* |
Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each
period.
For the period from March 28, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||||
For the years ended October 31, |
||||||||||||||||||
2016 |
2015 |
2014 |
||||||||||||||||
Net asset value, beginning of period |
$ | 11.37 | $ | 11.27 | $ | 10.99 | $ | 10.00 | ||||||||||
Income from investment operations: |
||||||||||||||||||
Net investment income1 |
0.06 | 0.06 | 0.12 | 0.03 | ||||||||||||||
Net realized and unrealized gain (loss) |
(0.18 | ) | 0.30 | 0.21 | 0.96 | |||||||||||||
Total income (loss) from investment operations |
(0.12 | ) | 0.36 | 0.33 | 0.99 | |||||||||||||
Less dividends and distributions: |
||||||||||||||||||
From net investment income |
(0.07 | ) | (0.13 | ) | (0.02 | ) | | |||||||||||
From net realized gains |
(0.07 | ) | (0.13 | ) | (0.03 | ) | | |||||||||||
Total dividends and distributions |
(0.14 | ) | (0.26 | ) | (0.05 | ) | | |||||||||||
Short-term redemption fees1 |
0.00 | 2 | | 0.00 | 2 | | ||||||||||||
Net asset value, end of period |
$ | 11.11 | $ | 11.37 | $ | 11.27 | $ | 10.99 | ||||||||||
Total return |
(1.06 | )% | 3.27 | % | 3.01 | % | 9.90 | %3 | ||||||||||
Ratios/Supplemental data: |
||||||||||||||||||
Net assets, end of period (in millions) |
$ | 108 | $ | 132 | $ | 127 | $ | 88 | ||||||||||
Ratio of expenses to average net assets before reductions |
1.38 | % | 1.31 | % | 1.32 | % | 1.87 | %4 | ||||||||||
Fee waiver |
0.13 | %5 | 0.05 | %5 | 0.07 | %5 | 0.61 | %4,5 | ||||||||||
Expense offset arrangement |
0.01 | % | 0.01 | % | 0.00 | %6 | 0.01 | %4 | ||||||||||
Ratio of expenses to average net assets after reductions |
1.24 | % | 1.25 | % | 1.25 | % | 1.25 | %4 | ||||||||||
Ratio of net investment income to average net assets |
0.58 | % | 0.55 | % | 1.01 | % | 0.50 | %4 | ||||||||||
Portfolio turnover rate |
19 | % | 31 | % | 40 | % | 6 | %7 |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the fiscal years ended October 31, 2016, 2015 and 2014 and the period ended October 31, 2013 reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.25%. The agreement is effective for the period beginning on March 28, 2013 through April 1, 2014 and has been renewed by all parties to the agreement through March 1, 2017. For the fiscal years ended October 31, the fiscal years ended October 31, 2016, 2015 and 2014 and the period ended October 31, 2013, the waived fees were $146,074, $74,640, $90,671 and $152,928, respectively. |
6 | Less than 0.01%. |
7 | Represents Fund portfolio turnover for the period ended October 31, 2013. |
The accompanying notes are an integral
part of these financial statements.
BBH GLOBAL CORE SELECT
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Retail Class share outstanding throughout each
period.
For the period from April 2, 2013 (commencement of operations) to October 31, 2013 | ||||||||||||||||||
For the years ended October 31, |
||||||||||||||||||
2016 |
2015 |
2014 |
||||||||||||||||
Net asset value, beginning of period |
$ | 11.31 | $ | 11.24 | $ | 10.98 | $ | 10.00 | ||||||||||
Income from investment operations: |
||||||||||||||||||
Net investment income1 |
0.04 | 0.03 | 0.07 | 0.00 | 2 | |||||||||||||
Net realized and unrealized gain (loss) |
(0.18 | ) | 0.29 | 0.22 | 0.98 | |||||||||||||
Total income (loss) from investment operations |
(0.14 | ) | 0.32 | 0.29 | 0.98 | |||||||||||||
Less dividends and distributions: |
||||||||||||||||||
From net investment income |
(0.05 | ) | (0.12 | ) | (0.01 | ) | | |||||||||||
From net realized gains |
(0.07 | ) | (0.13 | ) | (0.03 | ) | | |||||||||||
Total dividends and distributions |
(0.12 | ) | (0.25 | ) | (0.04 | ) | | |||||||||||
Short-term redemption fees1 |
| | 0.01 | 0.00 | 2 | |||||||||||||
Net asset value, end of period |
$ | 11.05 | $ | 11.31 | $ | 11.24 | $ | 10.98 | ||||||||||
Total return |
(1.25 | )% | 2.98 | % | 2.70 | % | 9.80 | %3 | ||||||||||
Ratios/Supplemental data: |
||||||||||||||||||
Net assets, end of period (in millions) |
$ | 4 | $ | 4 | $ | 2 | $ | 2 | ||||||||||
Ratio of expenses to average net assets before reductions |
2.65 | % | 2.93 | % | 3.36 | % | 4.88 | %4 | ||||||||||
Fee waiver |
1.14 | %5 | 1.43 | %5 | 1.86 | %5 | 3.37 | %4,5 | ||||||||||
Expense offset arrangement |
0.01 | % | 0.00 | %6 | 0.00 | %6 | 0.01 | %4 | ||||||||||
Ratio of expenses to average net assets after reductions |
1.50 | % | 1.50 | % | 1.50 | % | 1.50 | %4 | ||||||||||
Ratio of net investment income to average net assets |
0.32 | % | 0.29 | % | 0.61 | % | 0.02 | %4 | ||||||||||
Portfolio turnover rate |
19 | % | 31 | % | 40 | % | 6 | %7 |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized. |
5 | The ratio of expenses to average net assets for the fiscal years ended October 31, 2016, 2015 and 2014 and the period ended October 31, 2013 reflect fees reduced as result of a contractual operating expense limitation of the share class to 1.50%. The agreement is effective for the period beginning on March 28, 2013 through April 1, 2014 and has been renewed by all parties to the agreement through March 1, 2017. For the fiscal years ended October 31, 2016, 2015 and 2014 and the period ended October 31, 2013, the waived fees were $40,663, $41,058, $41,099 and $17,913, respectively. |
6 | Less than 0.01%. |
7 | Represents Fund portfolio turnover for the period ended October 31, 2013. |
The accompanying notes are an integral
part of these financial statements.
|
|
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS
October 31, 2016
1. |
Organization. The Fund is a separate, non-diversified series of BBH Trust (the Trust), which is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund is the successor to the BBH private investment fund, BBH Global Funds, LLC Global Core Select, which launched on April 2, 2012. The Fund commenced operations on March 28, 2013. The Fund offers Class N shares and Retail Class shares. Class N and Retail Class shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Retail Class shares automatically convert to any other class of shares of the Fund. As of October 31, 2016 there were six series of the Trust. |
2. |
Significant Accounting Policies. The Funds financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. |
Valuation of Investments. (1) The value of investments listed on a securities exchange is based on the last sale price on that exchange prior to the time when assets are valued, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchange; (2) securities not traded on an exchange are valued at the average of the quoted bid and asked prices in the over-the counter market; (3) securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board of Trustees (Board); (4) for securities traded on international exchanges, if events which may affect the value of the Funds securities occur after the close of the primary exchange on which such securities trade and before the Funds net asset value is next determined, then those securities will be fair valued as determined in good faith under supervision of the Board. The Fund currently uses a systematic fair value model provided by an independent third party to adjust the observed values of international securities on a daily basis; (5) short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent fair value by the Board. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
B. |
Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Dividend income and other distributions received from portfolio securities are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of securities received at ex-date. Distributions received on securities that represent a return of capital or a capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued daily. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. |
C. |
Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. |
Repurchase Agreements. The Fund may enter into repurchase agreements. 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 normally is in excess of the purchase price, reflecting an agreed upon interest rate. The rate is effective for the period of time that assets of the Fund are invested in the agreement and is not related to the coupon 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 Funds custodian or sub-custodian will take possession of the securities subject to repurchase agreements. The investment adviser, custodian or sub-custodian will monitor the value of the underlying collateral each day to ensure that the value of the security always equals or exceeds the repurchase price. |
|
|
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
E. |
Foreign Currency Translations. The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange of such currency against the U.S. dollar to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Upon the purchase or sale of a security denominated in foreign currency, the Fund may enter into forward foreign currency exchange contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction. Reported net realized gains and losses arise from the sales of portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. The effect of changes in foreign exchange rates on foreign denominated securities is reflected in the net realized gain or loss on investments in securities and foreign exchange transactions and translations and unrealized appreciation or depreciation on investments in securities and foreign currency translations . Net unrealized appreciation or depreciation on foreign currency translations arise from changes in the value of the assets and liabilities, excluding investments in securities, at period end, resulting from changes in the exchange rate. |
F. |
Federal Income Taxes. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
Accordingly, the amount of net
investment income and net realized gain reported in these financial statements may differ from that reported on the Funds tax return, due to
certain book-to-tax timing differences such as losses deferred due to wash sale transactions and utilization of capital loss carryforwards.
These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of
accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are
reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders
reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV.
G. |
Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, if any, are paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amount of $1,309,629 and $37,348 to Class N and Retail Class shareholders, respectively, during the year ended October 31, 2016. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. |
Distributions paid
from: |
||||||||||||||||||||||
Ordinary income |
Net long-term capital gain |
Total taxable distributions |
Tax return of capital |
Total distributions paid |
||||||||||||||||||
2016: |
$ | 648,794 | $ | 698,183 | $ | 1,346,977 | | $ | 1,346,977 | |||||||||||||
2015: |
1,846,286 | 1,058,441 | 2,904,727 | | 2,904,727 |
|
|
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
Components of accumulated
earnings/(deficit): |
||||||||||||||||||||||||||||||
Undistributed ordinary income |
Undistributed long-term capital gain |
Accumulated earnings |
Accumulated capital and other losses |
Other book/tax temporary differences |
Unrealized appreciation/ (depreciation) |
Total accumulated earnings / (deficit) |
||||||||||||||||||||||||
2016: |
$ | 567,899 | $ | | $ | 567,899 | | $ | (772,531 | ) | $ | 9,151,064 | $ | 8,946,432 | ||||||||||||||||
2015: |
572,705 | 697,249 | 1,269,954 | | (901,232 | ) | 11,400,989 | 11,769,711 |
H. |
Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. |
Fees and Other Transactions with Affiliates. |
A. |
Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (Agreement) with the Trust, Brown Brothers Harriman & Co. (BBH) through a separately identifiable department (SID or Investment Adviser) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund pays a combined fee for investment advisory and administrative services calculated daily and paid monthly at an annual rate equivalent to 0.95% on the first $3,000,000,000 of the Funds average daily net assets and 0.90% per annum on the Funds average daily net assets over $3,000,000,000. Prior to the current year, the fee was a flat rate of 0.95%. For the year ended October 31, 2016, the Fund incurred $1,076,361 under the Agreement. |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
B. |
Investment Advisory and Administrative Fee Waivers. Effective March 28, 2013 (commencement of operations), the Investment Adviser contractually agreed to limit the annual Fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary course of the Funds business and for Retail Class, amounts payable pursuant to any plan adopted in accordance with Rule 12b-1) of Class N and Retail Class to 1.25%. The agreement will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. The agreement may only be terminated during its term with approval of the Funds Board of Trustees. For the year ended October 31, 2016, the Investment Adviser waived fees in the amount of $146,074 and $40,663 for Class N and Retail Class, respectively. |
C. |
Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% of Class N and Retail Class shares average daily net assets. Prior to the current year, the fee was a flat rate of 0.15%. For the year ended October 31, 2016, the Fund incurred shareholder servicing fees in the amount of $219,464 and $7,138 for Class N and Retail Class, respectively. |
D. |
Distribution (12b-1) Fees. The Fund has adopted a distribution plan pursuant to Rule 12b-1 for Retail Class shares that allows the Fund to pay distribution and other fees for the sale of its shares and for services provided to shareholders. Because these fees are paid out of the Funds assets continuously, over time these fees will increase the cost of investment and may cost the shareholder more than paying other types of sales charges. The maximum annual distribution fee for Retail Class shares is 0.25% of the average daily net assets of the Retail Class shares of the Fund. With this agreement, it is anticipated that total operating expenses for Retail Class shares will not exceed 1.50% of the average daily net assets. For the year ended October 31, 2016, Retail Class shares of the Fund incurred $8,917 for Distribution (12b-1) Fees. |
E. |
Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Funds cash and investments and calculates the Funds daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Funds net asset value. For the year ended October 31, 2016, the Fund incurred $39,219 in custody and fund accounting fees. These fees for the Fund were reduced by $6,085 as a result of an expense offset arrangement with the Funds custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Funds expenses. In the event that the Fund is overdrawn, under the custody agreement with BBH, BBH will make overnight loans |
|
|
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
to the Fund to cover overdrafts. Pursuant to their agreement, the Fund will pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the year ended October 31, 2016, was $0. |
F. |
Board of Trustees Fees. Each Trustee who is not an interested person as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the year ended October 31, 2016, the Fund incurred $54,220 in independent Trustee compensation and reimbursements. |
4. |
Investment Transactions. For the year ended October 31, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $19,858,125 and $40,271,584, respectively. |
5. |
Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N and Retail Class shares of beneficial interest, at no par value. Transactions in Class N and Retail Class shares were as follows: |
For the year ended October 31, 2016 |
For the year ended October 31, 2015 |
||||||||||||||||||
Shares |
Dollars |
Shares |
Dollars |
||||||||||||||||
Class N |
|||||||||||||||||||
Shares sold |
1,128,001 | $ | 12,396,138 | 3,101,881 | $ | 35,317,796 | |||||||||||||
Shares issued in connection with reinvestments of dividends |
117,195 | 1,271,563 | 251,363 | 2,717,235 | |||||||||||||||
Proceeds from short-term redemption fees |
N/A | 297 | N/A | N/A | |||||||||||||||
Shares redeemed |
(3,124,991 | ) | (35,007,891 | ) | (2,950,519 | ) | (32,701,259 | ) | |||||||||||
Net increase (decrease) |
(1,879,795 | ) | $ | (21,339,893 | ) | 402,725 | $ | 5,333,772 | |||||||||||
Retail Class |
|||||||||||||||||||
Shares sold |
8,626 | $ | 94,582 | 157,233 | $ | 1,796,943 | |||||||||||||
Shares issued in connection with reinvestments of dividends |
3,160 | 34,157 | 4,470 | 48,192 | |||||||||||||||
Shares redeemed |
(17,195 | ) | (188,642 | ) | (31,915 | ) | (358,704 | ) | |||||||||||
Net increase (decrease) |
(5,409 | ) | $ | (59,903 | ) | 129,788 | $ | 1,486,431 |
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
6. |
Principal Risk Factors and Indemnifications. |
A. |
Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Funds prospectus, including but not limited to, those described below: A shareholder may lose money by investing in the Fund (investment risk). The Fund is actively managed and the decisions by the Investment Adviser may cause the Fund to incur losses or miss profit opportunities (management risk). Price movements may occur due to factors affecting individual companies, such as the issuance of an unfavorable earnings report, or other events affecting particular industries or the equity market as a whole (equity securities risk). The value of securities held by the Fund may fall due to changing economic, political, regulatory or market conditions, or due to a companys or issuers individual situation (market risk). Stocks of medium-sized companies tend to be more volatile and less liquid than stocks of large companies (medium-sized company risk). In the normal course of business, the Fund invests in securities and enters into transactions where risks exist due to assumption of large positions in securities of a small number of issuers (non-diversification risk). There are certain risks associated with investing in foreign securities not present in domestic investments, including, but not limited to, recovery of tax withheld by foreign jurisdictions (foreign investment risk), capital controls imposed by foreign governments in response to economic or political events that may impact the ability of the Fund to buy, sell or otherwise transfer securities or currency (capital controls risk), and risks from investing in securities of issuers based in developing countries (emerging markets risk). Non-U.S. currencies invested in by the Fund may depreciate against the U.S. dollar (currency exchange rate risk). The Funds shareholders may be adversely impacted by asset allocation decisions made by an investment adviser whose discretionary clients make up a large percentage of the Funds shareholders (shareholder concentration risk). The extent of the Funds exposure to these risks in respect to these financial assets is included in their value as recorded in the Funds Statement of Assets and Liabilities. |
B. |
Indemnifications. Under the Trusts organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the |
|
|
BBH GLOBAL CORE SELECT
NOTES TO FINANCIALS STATEMENTS (continued)
October 31, 2016
Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. |
Subsequent Events. Management has evaluated events and transactions that have occurred since October 31, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES
October 31, 2016 (unaudited)
|
|
BBH GLOBAL CORE SELECT
DISCLOSURE OF FUND EXPENSES (continued)
October 31, 2016 (unaudited)
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class N |
||||||||||||||
Actual |
$ | 1,000 | $ | 986 | $ | 6.14 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,019 | $ | 6.24 |
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Retail Class |
||||||||||||||
Actual |
$ | 1,000 | $ | 985 | $ | 7.48 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,018 | $ | 7.61 |
1 | Expenses are equal to the Funds annualized expense ratio of 1.23% and 1.50% for Class N and Retail Class shares, respectively, 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 purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST
October 31, 2016 (unaudited)
|
|
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
|
|
BBH GLOBAL CORE SELECT
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
Ethics. With respect to the allocation of investment
opportunities, BBH has adopted and implemented policies designed to achieve fair and equitable allocation of investment opportunities among its clients
over time. BBH has structured the portfolio managers compensation in a manner it believes is reasonably designed to safeguard the Fund from being
negatively affected as a result of any such potential conflicts.
BBH GLOBAL CORE SELECT
ADDITIONAL FEDERAL TAX INFORMATION
October 31, 2016 (unaudited)
|
|
TRUSTEES AND OFFICERS OF BBH GLOBAL CORE
SELECT
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
|
Independent Trustees |
||||||||||
H. Whitney Wagner Born: 1956 |
Chairman of the Board and Trustee |
Chairman Since 2014; Trustee Since 2007 and 2006-2007 with the Predecessor Trust |
President, Clear Brook Advisors, a registered investment advisor. |
6 |
None. |
|||||
Andrew S. Frazier Born: 1948 |
Trustee |
Since 2010 |
Consultant to Western World Insurance Group, Inc. (WWIG) (January 2010 to January 2012). |
6 |
Director of WWIG. |
|||||
Mark M. Collins Born: 1956 |
Trustee |
Since 2011 |
Partner of Brown Investment Advisory Incorporated, a registered investment advisor. |
6 |
Chairman of Dillon Trust Company. |
|||||
John M. Tesoro Born: 1952 |
Trustee |
Since 2014 |
Partner, Certified Public Accountant, KPMG LLP (Retired in 2012). |
6 |
Trustee, Bridge Builder Trust (8 Funds); Director, Teton Advisors, Inc. (a registered investment adviser). |
TRUSTEES AND OFFICERS OF BBH GLOBAL CORE
SELECT
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years | |
Interested Trustees |
||||||||||
Susan C. Livingston+ 50 Post Office Square Boston, MA 02110 Born: 1957 |
Trustee |
Since 2011 |
Partner (since 1998) and Senior Client Advocate (since 2010) for BBH&Co.; Director of BBH Luxembourg S.C.A. (since
1992). |
6 |
None. |
|||||
John A. Gehret+ 140 Broadway New York, NY 10005 Born: 1959 |
Trustee |
Since 2011 |
Limited Partner of BBH&Co. (2012-present); General Partner of BBH&Co. (1998 to 2011). |
6 |
None. |
|
|
TRUSTEES AND OFFICERS OF BBH GLOBAL CORE
SELECT
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During
Past 5 Years |
|
Officers |
||||||
Jean-Pierre Paquin 140 Broadway New York, NY 10005 Born: 1973 |
President and Principal Executive Officer |
Since 2016 |
Partner of BBH&Co. since 2015; joined BBH&Co. in 1996. |
|||
Daniel Greifenkamp 140 Broadway New York, NY 10005 Born: 1969 |
Vice
President |
Since 2016 |
Managing Director of BBH&Co. since 2014; joined BBH&Co. in 2011. |
|||
Charles H. Schreiber 140 Broadway New York, NY 10005 Born: 1957 |
Treasurer and Principal Financial Officer |
Since 2007 2006-2007 with the Predecessor Trust |
Senior Vice President of BBH&Co. since 2001; joined BBH&Co. in 1999. |
|||
Paul F. Gallagher 140 Broadway New York, NY 10005 Born: 1959 |
Chief Compliance Officer (CCO) |
Since 2015 |
Senior Vice President of BBH&Co. since September 2015; Executive Director, Counsel, Morgan Stanley Smith Barney LLC
(2009-September 2015). |
|||
Keith M. Kelley 140 Broadway New York, NY 10005 Born: 1983 |
Anti-Money Laundering Officer (AMLO) |
Since 2016 |
Vice President of BBH&Co. since February 2016; joined BBH&Co. in 2016; Director, Legal and Compliance, Morgan Stanley Smith
Barney LLC (2014-February 2016); Compliance Manager, State Street Corporation (2013-2014); Associate, J.P. Morgan Chase & Co.
(2011-2013). |
|||
Suzan Barron 50 Post Office Square Boston, MA 02110 Born: 1964 |
Secretary |
Since 2009 |
Senior Vice President and Senior Investor Services Counsel, BBH&Co. since 2005. |
TRUSTEES AND OFFICERS OF BBH GLOBAL CORE
SELECT
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During
Past 5 Years | |
Rowena Rothman 140 Broadway New York, NY 10005 Born: 1967 |
Assistant Treasurer |
Since 2011 |
Vice President of BBH&Co. since 2009. |
|||
James D. Kerr 50 Post Office Square Boston, MA 02110 Born: 1983 |
Assistant Secretary |
Since 2015 |
Assistant Vice President and Investor Services Associate Counsel since 2014; joined BBH&Co. in 2013; Assistant District Attorney,
Middlesex County, Massachusetts (October 2011-September 2013). |
# | All officers of the Trust hold office for one year and until their respective successors are chosen and qualified (subject to the ability of the Trustees to remove any officer in accordance with the Trusts By-laws). Mr. Wagner previously served on the Board of Trustees of the Predecessor Trust. |
+ | Ms. Livingston and Mr. Gehret are interested persons of the Trust as defined in the 1940 Act because of their positions as Partner and Limited Partner of BBH&Co., respectively. |
ˆ | The Fund Complex consists of the Trust, which has six series, and each is counted as one Portfolio for purposes of this table. |
|
|
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 |
Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: |
Call
1-800-575-1265 |
|||||
By E-mail send your request to: |
bbhfunds@bbh.com |
|||||
On the internet: |
www.bbhfunds.com |
BBH INTERNATIONAL EQUITY FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE
October 31, 2016
1 | MSCI Europe, Australasia and Far East Index (EAFE) is an unmanaged market capitalization-weight equity index comprising 20 of 48 countries in the MSCI universe and representing the developed world outside of North America. Each MSCI country index is created separately, then aggregated, without change, into regional MSCI indices. EAFE performance data is calculated in U.S. dollars and in local currency. Investments cannot be made in an index. |
BBH INTERNATIONAL EQUITY FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
|
|
BBH INTERNATIONAL EQUITY FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
|
![]() |
1 | The Funds performance assumes the reinvestment of all dividends and distributions. The EAFE has been adjusted to reflect reinvestment of dividends on securities in the index. The EAFE is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Funds performance. |
BBH INTERNATIONAL EQUITY FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BBH
International Equity Fund:
December 22, 2016
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO ALLOCATION
October 31, 2016
U.S. $ Value |
Percent of Net Assets |
|||||||||
Common Stocks: |
||||||||||
Australia |
$ | 23,851,125 | 2.5 | % | ||||||
Bermuda |
15,922,335 | 1.7 | ||||||||
Denmark |
20,454,164 | 2.1 | ||||||||
Finland |
8,821,221 | 0.9 | ||||||||
France |
89,345,853 | 9.3 | ||||||||
Germany |
61,983,717 | 6.5 | ||||||||
Hong Kong |
66,015,165 | 6.9 | ||||||||
Italy |
18,384,218 | 1.9 | ||||||||
Japan |
224,512,568 | 23.4 | ||||||||
Jersey |
9,970,239 | 1.0 | ||||||||
Netherlands |
10,603,677 | 1.1 | ||||||||
Singapore |
25,455,762 | 2.6 | ||||||||
Spain |
34,446,864 | 3.6 | ||||||||
Sweden |
21,115,784 | 2.2 | ||||||||
Switzerland |
119,669,912 | 12.5 | ||||||||
Taiwan |
20,766,407 | 2.2 | ||||||||
United Kingdom |
162,748,472 | 17.0 | ||||||||
Rights: |
||||||||||
Spain |
3 | 0.0 | ||||||||
Cash and Other Assets in Excess of Liabilities |
25,175,039 | 2.6 | ||||||||
NET ASSETS |
$ | 959,242,525 | 100.0 | % |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO ALLOCATION (continued)
October 31, 2016
U.S. $ Value |
Percent of Net Assets |
|||||||||
Common Stocks: |
||||||||||
Basic Materials |
$ | 57,309,077 | 6.0 | % | ||||||
Communications |
76,650,958 | 8.0 | ||||||||
Consumer Cyclical |
113,794,221 | 11.9 | ||||||||
Consumer Non-Cyclical |
254,197,866 | 26.5 | ||||||||
Diversified |
15,922,335 | 1.7 | ||||||||
Energy |
70,169,548 | 7.3 | ||||||||
Financials |
109,793,677 | 11.4 | ||||||||
Industrials |
128,359,630 | 13.4 | ||||||||
Technology |
57,663,285 | 6.0 | ||||||||
Utilities |
50,206,886 | 5.2 | ||||||||
Rights: |
||||||||||
Financials |
3 | 0.0 | ||||||||
Cash and Other Assets in Excess of Liabilities |
25,175,039 | 2.6 | ||||||||
NET ASSETS |
$ | 959,242,525 | 100.0 | % |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
October 31, 2016
Shares |
Value |
|||||||||
COMMON STOCKS (97.4%) |
||||||||||
AUSTRALIA (2.5%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
90,200 | Cochlear, Ltd. |
$ | 8,769,549 | |||||||
117,400 | CSL, Ltd. |
8,961,067 | ||||||||
17,730,616 | ||||||||||
FINANCIALS |
||||||||||
806,348 | QBE Insurance Group, Ltd. |
6,120,509 | ||||||||
Total Australia |
23,851,125 | |||||||||
BERMUDA (1.7%) |
||||||||||
DIVERSIFIED |
||||||||||
261,800 | Jardine Matheson Holdings, Ltd. |
15,922,335 | ||||||||
Total Bermuda |
15,922,335 | |||||||||
DENMARK (2.1%) |
||||||||||
BASIC MATERIALS |
||||||||||
131,100 | Novozymes AS (Class B) |
4,863,048 | ||||||||
CONSUMER NON-CYCLICAL |
||||||||||
68,400 | Coloplast AS (Class B) |
4,762,829 | ||||||||
104,248 | ISS AS |
4,093,284 | ||||||||
189,000 | Novo Nordisk AS (Class B) |
6,735,003 | ||||||||
15,591,116 | ||||||||||
Total Denmark |
20,454,164 | |||||||||
FINLAND (0.9%) |
||||||||||
INDUSTRIALS |
||||||||||
191,900 | Kone OYJ (Class B) |
8,821,221 | ||||||||
Total Finland |
8,821,221 | |||||||||
FRANCE (9.3%) |
||||||||||
BASIC MATERIALS |
||||||||||
109,462 | Air Liquide SA |
11,113,704 | ||||||||
CONSUMER CYCLICAL |
||||||||||
61,432 | LVMH Moet Hennessy Louis Vuitton SE |
11,163,663 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
FRANCE (continued) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
132,500 | Danone SA |
$ | 9,159,398 | |||||||
75,225 | Essilor International SA |
8,433,943 | ||||||||
52,700 | LOreal SA |
9,429,928 | ||||||||
187,768 | Sanofi |
14,591,335 | ||||||||
41,614,604 | ||||||||||
ENERGY |
||||||||||
210,269 | Total SA |
10,052,672 | ||||||||
FINANCIALS |
||||||||||
138,475 | Societe Generale SA |
5,384,558 | ||||||||
INDUSTRIALS |
||||||||||
225,601 | Cie de Saint-Gobain |
10,016,652 | ||||||||
Total France |
89,345,853 | |||||||||
GERMANY (6.5%) |
||||||||||
COMMUNICATIONS |
||||||||||
617,495 | Deutsche Telekom AG |
10,052,903 | ||||||||
CONSUMER CYCLICAL |
||||||||||
72,200 | Adidas AG |
11,829,669 | ||||||||
5,004 | Bayerische Motoren Werke AG |
435,569 | ||||||||
122,104 | Daimler AG (Class Registered) |
8,691,462 | ||||||||
20,956,700 | ||||||||||
FINANCIALS |
||||||||||
64,802 | Allianz SE |
10,089,809 | ||||||||
TECHNOLOGY |
||||||||||
237,329 | SAP SE |
20,884,305 | ||||||||
Total Germany |
61,983,717 | |||||||||
HONG KONG (6.9%) |
||||||||||
COMMUNICATIONS |
||||||||||
1,453,000 | China Mobile, Ltd. |
16,644,938 | ||||||||
ENERGY |
||||||||||
8,337,000 | CNOOC, Ltd. |
10,497,373 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
HONG KONG (continued) |
||||||||||
FINANCIALS |
||||||||||
1,579,600 | AIA Group, Ltd. |
$ | 9,969,089 | |||||||
3,939,000 | Hang Lung Properties, Ltd. |
8,694,133 | ||||||||
18,663,222 | ||||||||||
UTILITIES |
||||||||||
949,000 | CLP Holdings, Ltd. |
9,644,698 | ||||||||
5,393,011 | Hong Kong & China Gas Co., Ltd. |
10,564,934 | ||||||||
20,209,632 | ||||||||||
Total Hong Kong |
66,015,165 | |||||||||
ITALY (1.9%) |
||||||||||
ENERGY |
||||||||||
694,061 | ENI SpA |
10,028,156 | ||||||||
UTILITIES |
||||||||||
1,946,859 | Enel SpA |
8,356,062 | ||||||||
Total Italy |
18,384,218 | |||||||||
JAPAN (23.4%) |
||||||||||
BASIC MATERIALS |
||||||||||
181,900 | Shin-Etsu Chemical Co., Ltd. |
13,770,636 | ||||||||
COMMUNICATIONS |
||||||||||
99,600 | NTT DOCOMO, Inc. |
2,503,196 | ||||||||
761,400 | Rakuten, Inc. |
8,777,297 | ||||||||
11,280,493 | ||||||||||
CONSUMER CYCLICAL |
||||||||||
246,400 | Denso Corp. |
10,683,123 | ||||||||
465,800 | Honda Motor Co., Ltd. |
13,910,291 | ||||||||
59,100 | Shimano, Inc. |
10,099,590 | ||||||||
63,300 | Sumitomo Electric Industries, Ltd. |
934,422 | ||||||||
35,627,426 | ||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
773,900 | Kirin Holdings Co., Ltd. |
13,313,244 | ||||||||
283,100 | Takeda Pharmaceutical Co., Ltd. |
12,652,960 | ||||||||
25,966,204 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
JAPAN (continued) |
||||||||||
ENERGY |
||||||||||
962,000 | Inpex Corp. |
$ | 8,932,024 | |||||||
FINANCIALS |
||||||||||
75,600 | Daito Trust Construction Co., Ltd. |
12,640,040 | ||||||||
436,600 | Tokio Marine Holdings, Inc. |
17,199,849 | ||||||||
29,839,889 | ||||||||||
INDUSTRIALS |
||||||||||
132,100 | Daikin Industries, Ltd. |
12,651,157 | ||||||||
62,000 | FANUC Corp. |
11,596,241 | ||||||||
110,600 | Hoya Corp. |
4,609,501 | ||||||||
16,625 | Keyence Corp. |
12,182,109 | ||||||||
485,100 | Komatsu, Ltd. |
10,793,103 | ||||||||
37,800 | Kyushu Railway Co.1 |
1,111,818 | ||||||||
517,000 | Mitsubishi Electric Corp. |
6,984,925 | ||||||||
48,400 | Murata Manufacturing Co., Ltd. |
6,738,328 | ||||||||
54,900 | Rinnai Corp. |
5,271,178 | ||||||||
38,500 | SMC Corp. |
11,144,963 | ||||||||
83,083,323 | ||||||||||
TECHNOLOGY |
||||||||||
382,500 | Canon, Inc. |
10,965,007 | ||||||||
55,900 | Tokyo Electron, Ltd. |
5,047,566 | ||||||||
16,012,573 | ||||||||||
Total Japan |
224,512,568 | |||||||||
JERSEY (1.0%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
520,200 | Experian, Plc. |
9,970,239 | ||||||||
Total Jersey |
9,970,239 | |||||||||
NETHERLANDS (1.1%) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
465,177 | Koninklijke Ahold NV |
10,603,677 | ||||||||
Total Netherlands |
10,603,677 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
SINGAPORE (2.6%) |
||||||||||
COMMUNICATIONS |
||||||||||
2,964,100 | Singapore Telecommunications, Ltd. |
$ | 8,241,534 | |||||||
FINANCIALS |
||||||||||
2,362,300 | Ascendas Real Estate Investment Trust |
4,023,642 | ||||||||
807,389 | United Overseas Bank, Ltd. |
10,884,012 | ||||||||
14,907,654 | ||||||||||
INDUSTRIALS |
||||||||||
1,272,700 | SembCorp Industries, Ltd. |
2,306,574 | ||||||||
Total Singapore |
25,455,762 | |||||||||
SPAIN (3.6%) |
||||||||||
COMMUNICATIONS |
||||||||||
915,477 | Telefonica SA |
9,318,708 | ||||||||
CONSUMER CYCLICAL |
||||||||||
284,800 | Industria de Diseno Textil SA |
9,944,334 | ||||||||
FINANCIALS |
||||||||||
6,690 | Banco Santander SA Interim |
32,847 | ||||||||
582,087 | Banco Santander SA |
2,848,733 | ||||||||
2,881,580 | ||||||||||
UTILITIES |
||||||||||
1,807,555 | Iberdrola SA |
12,302,242 | ||||||||
Total Spain |
34,446,864 | |||||||||
SWEDEN (2.2%) |
||||||||||
COMMUNICATIONS |
||||||||||
993,495 | Telefonaktiebolaget LM Ericsson (Class B) |
4,839,097 | ||||||||
2,602,360 | Telia Co. AB |
10,399,837 | ||||||||
15,238,934 | ||||||||||
CONSUMER CYCLICAL |
||||||||||
208,700 | Hennes & Mauritz AB (Class B) |
5,876,850 | ||||||||
Total Sweden |
21,115,784 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
SWITZERLAND (12.5%) |
||||||||||
BASIC MATERIALS |
||||||||||
4,500 | Givaudan SA |
$ | 8,705,213 | |||||||
46,929 | Syngenta AG |
18,856,476 | ||||||||
27,561,689 | ||||||||||
CONSUMER CYCLICAL |
||||||||||
10,188 | Swatch Group AG |
3,066,719 | ||||||||
CONSUMER NON-CYCLICAL |
||||||||||
251,909 | Nestle SA |
18,275,280 | ||||||||
242,292 | Novartis AG |
17,223,884 | ||||||||
42,400 | Roche Holding AG |
9,738,455 | ||||||||
3,960 | SGS SA |
8,031,470 | ||||||||
53,269,089 | ||||||||||
FINANCIALS |
||||||||||
44,476 | Zurich Insurance Group AG1 |
11,640,555 | ||||||||
INDUSTRIALS |
||||||||||
666,050 | ABB, Ltd.1 |
13,717,913 | ||||||||
76,800 | Kuehne + Nagel International AG |
10,413,947 | ||||||||
24,131,860 | ||||||||||
Total Switzerland |
119,669,912 | |||||||||
TAIWAN (2.2%) |
||||||||||
TECHNOLOGY |
||||||||||
1,367,000 | Taiwan Semiconductor Manufacturing Co., Ltd. |
8,161,577 | ||||||||
405,300 | Taiwan Semiconductor Manufacturing Co., Ltd. ADR |
12,604,830 | ||||||||
Total Taiwan |
20,766,407 | |||||||||
UNITED KINGDOM (17.0%) |
||||||||||
COMMUNICATIONS |
||||||||||
636,603 | Pearson, Plc. |
5,873,448 | ||||||||
CONSUMER CYCLICAL |
||||||||||
522,700 | Compass Group, Plc. |
9,435,277 | ||||||||
2,464,854 | Kingfisher, Plc. |
10,856,936 | ||||||||
155,500 | Whitbread Plc. |
6,866,316 | ||||||||
27,158,529 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Shares |
Value | |||||||||
COMMON STOCKS (continued) |
||||||||||
UNITED KINGDOM (continued) |
||||||||||
CONSUMER NON-CYCLICAL |
||||||||||
319,000 | Aggreko, Plc. |
$ | 3,120,866 | |||||||
347,000 | Diageo, Plc. |
9,221,073 | ||||||||
2,739,688 | G4S, Plc. |
7,343,858 | ||||||||
683,533 | GlaxoSmithKline, Plc. |
13,485,450 | ||||||||
204,100 | Intertek Group, Plc. |
8,513,449 | ||||||||
95,700 | Reckitt Benckiser Group, Plc. |
8,541,413 | ||||||||
593,500 | Smith & Nephew, Plc. |
8,536,244 | ||||||||
5,014,945 | Tesco, Plc.1 |
12,909,637 | ||||||||
186,393 | Unilever, Plc. |
7,780,331 | ||||||||
79,452,321 | ||||||||||
ENERGY |
||||||||||
660,915 | Amec Foster Wheeler, Plc. |
3,597,825 | ||||||||
1,995,612 | BP, Plc. |
11,762,641 | ||||||||
593,785 | Royal Dutch Shell, Plc. (Class B) |
15,298,857 | ||||||||
30,659,323 | ||||||||||
FINANCIALS |
||||||||||
14,707,030 | Lloyds Banking Group, Plc. |
10,265,901 | ||||||||
UTILITIES |
||||||||||
718,374 | National Grid, Plc. |
9,338,950 | ||||||||
Total United Kingdom |
162,748,472 | |||||||||
Total Common Stocks (Identified cost $816,887,138) |
934,067,483 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Units |
Expiration Date |
Value |
||||||||||||||||
RIGHTS (0.0%) |
||||||||||||||||||
SPAIN (0.0%) |
||||||||||||||||||
57 | Banco Santander SA |
11/01/16 | $ | 3 | ||||||||||||||
Total Spain |
3 | |||||||||||||||||
Total Rights (Identified cost $0) |
3 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $816,887,138)2 | 97.4 | % | $ | 934,067,486 | ||||||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES | 2.6 | % | 25,175,039 | |||||||||||||||
NET ASSETS | 100.0 | % | $ | 959,242,525 |
1 | Non-income producing security. |
2 | The aggregate cost for federal income tax purposes is $823,897,525, the aggregate gross unrealized appreciation is $228,912,349 and the aggregate gross unrealized depreciation is $118,742,388, resulting in net unrealized appreciation of $110,169,961. |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
|
Level 1 unadjusted quoted prices in active markets for identical investments. |
|
Level 2 significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Investments, at value |
Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* |
Significant Other Observable Inputs (Level 2)* |
Significant Unobservable Inputs (Level 3)* |
Balance as of October 31, 2016 |
||||||||||||||
Common Stocks: |
||||||||||||||||||
Australia |
$ | | $ | 23,851,125 | $ | | $ | 23,851,125 | ||||||||||
Bermuda |
| 15,922,335 | | 15,922,335 | ||||||||||||||
Denmark |
| 20,454,164 | | 20,454,164 | ||||||||||||||
Finland |
| 8,821,221 | | 8,821,221 | ||||||||||||||
France |
| 89,345,853 | | 89,345,853 | ||||||||||||||
Germany |
| 61,983,717 | | 61,983,717 | ||||||||||||||
Hong Kong |
| 66,015,165 | | 66,015,165 | ||||||||||||||
Italy |
| 18,384,218 | | 18,384,218 | ||||||||||||||
Japan |
| 224,512,568 | | 224,512,568 | ||||||||||||||
Jersey |
| 9,970,239 | | 9,970,239 | ||||||||||||||
Netherlands |
| 10,603,677 | | 10,603,677 | ||||||||||||||
Singapore |
| 25,455,762 | | 25,455,762 | ||||||||||||||
Spain |
| 34,446,864 | | 34,446,864 | ||||||||||||||
Sweden |
| 21,115,784 | | 21,115,784 | ||||||||||||||
Switzerland |
| 119,669,912 | | 119,669,912 | ||||||||||||||
Taiwan |
12,604,830 | 8,161,577 | | 20,766,407 | ||||||||||||||
United Kingdom |
| 162,748,472 | | 162,748,472 | ||||||||||||||
Rights: |
||||||||||||||||||
Spain |
| 3 | | 3 | ||||||||||||||
Investments, at value |
$ | 12,604,830 | $ | 921,462,656 | $ | | $ | 934,067,486 |
* |
The Funds policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Levels 1, 2 or 3 during the period ended October 31, 2016. |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2016
ASSETS: |
||||
Investments in securities, at value (Identified cost $816,887,138) |
$ | 934,067,486 | ||
Cash |
21,350,496 | |||
Foreign currency at value (Identified cost $473,656) |
474,258 | |||
Receivables for: |
||||
Dividends |
2,598,119 | |||
Investments sold |
2,559,984 | |||
Shares sold |
249,439 | |||
Prepaid assets |
8,276 | |||
Total Assets |
961,308,058 | |||
LIABILITIES: |
||||
Payables for: |
||||
Investment advisory and administrative fees |
1,303,252 | |||
Investments purchased |
495,780 | |||
Custody and fund accounting fees |
143,481 | |||
Professional fees |
70,289 | |||
Shares redeemed |
18,000 | |||
Shareholder servicing fees |
15,637 | |||
Transfer agent fees |
2,535 | |||
Distributor fees |
1,936 | |||
Board of Trustees fees |
471 | |||
Accrued expenses and other liabilities |
14,152 | |||
Total Liabilities |
2,065,533 | |||
NET ASSETS |
$ | 959,242,525 | ||
Net
Assets Consist of: |
||||
Paid-in capital |
$ | 874,934,728 | ||
Undistributed net investment income |
20,024,709 | |||
Accumulated net realized loss on investments in securities and foreign exchange transactions |
(52,812,067 | ) | ||
Net unrealized appreciation/(depreciation) on investments in securities and foreign currency translations |
117,095,155 | |||
Net
Assets |
$ | 959,242,525 | ||
NET ASSET VALUE AND OFFERING PRICE PER SHARE |
||||
CLASS N SHARES |
||||
($44,922,188 ÷ 3,115,217 shares outstanding) |
$14.42 | |||
CLASS I SHARES |
||||
($914,320,337 ÷ 63,222,661 shares outstanding) |
$14.46 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
For the year ended October 31, 2016
NET INVESTMENT INCOME: |
||||||
Income: |
||||||
Dividends (net of foreign withholding taxes of $2,187,981) |
$ | 25,042,599 | ||||
Interest and other income |
5,699 | |||||
Total Income |
25,048,298 | |||||
Expenses: |
||||||
Investment advisory and administrative fees |
6,698,469 | |||||
Shareholder servicing fees |
309,778 | |||||
Custody and fund accounting fees |
220,870 | |||||
Professional fees |
79,699 | |||||
Board of Trustees fees |
54,028 | |||||
Transfer agent fees |
29,638 | |||||
Distributor fees |
20,949 | |||||
Miscellaneous expenses |
90,627 | |||||
Total Expenses |
7,504,058 | |||||
Investment advisory and administrative fees waiver |
(24,973 | ) | ||||
Expense offset arrangement |
(18,851 | ) | ||||
Net Expenses |
7,460,234 | |||||
Net Investment Income |
17,588,064 | |||||
NET REALIZED AND UNREALIZED GAIN: |
||||||
Net realized loss on investments in securities |
(5,780,310 | ) | ||||
Net realized loss on foreign exchange transactions and translations |
(139,805 | ) | ||||
Net realized loss on investments in securities and foreign exchange transactions and translations |
(5,920,115 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
8,230,974 | |||||
Net change in unrealized appreciation/(depreciation) on foreign currency translations |
(62,459 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations |
8,168,515 | |||||
Net Realized and Unrealized Gain |
2,248,400 |
|||||
Net Increase in Net Assets Resulting from Operations |
$ | 19,836,464 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, |
||||||||||
2016 |
2015 |
|||||||||
INCREASE (DECREASE) IN NET ASSETS: |
||||||||||
Operations: |
||||||||||
Net investment income |
$ | 17,588,064 | $ | 12,915,628 | ||||||
Net realized gain (loss) on investments in securities and foreign exchange transactions and translations |
(5,920,115 | ) | 11,304,752 | |||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and foreign currency translations |
8,168,515 | (45,148,802 | ) | |||||||
Net increase (decrease) in net assets resulting from operations |
19,836,464 | (20,928,422 | ) | |||||||
Dividends and distributions declared: |
||||||||||
From net investment income: |
||||||||||
Class N |
(11,418,433 | ) | (17,771,729 | ) | ||||||
Class I |
(1,321,700 | ) | (2,187,203 | ) | ||||||
Total dividends and distributions declared |
(12,740,133 | ) | (19,958,932 | ) | ||||||
Share transactions: |
||||||||||
Proceeds from sales of shares* |
884,413,974 | 115,571,668 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions |
12,671,721 | 19,895,791 | ||||||||
Proceeds from short-term redemption fees |
4,306 | 197 | ||||||||
Cost of shares redeemed* |
(677,619,363 | ) | (204,954,865 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions |
219,470,638 | (69,487,209 | ) | |||||||
Total increase (decrease) in net assets |
226,566,969 | (110,374,563 | ) | |||||||
NET ASSETS: |
||||||||||
Beginning of year |
732,675,556 | 843,050,119 | ||||||||
End of year (including undistributed net investment income of $20,024,709 and $12,301,396, respectively) |
$ | 959,242,525 |
$ | 732,675,556 |
* |
Includes share exchanges. See note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each
year.
For the years ended October 31, |
||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
||||||||||||||||||
Net asset value, beginning of year |
$ | 14.49 | $ | 15.11 | $ | 15.38 | $ | 13.05 | $ | 12.66 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||
Net investment income1 |
0.10 | 0.23 | 0.37 | 0.25 | 0.27 | |||||||||||||||||
Net realized and unrealized gain (loss) |
0.08 | (0.49 | ) | (0.38 | ) | 2.35 | 0.45 | |||||||||||||||
Total income (loss) from investment operations |
0.18 | (0.26 | ) | (0.01 | ) | 2.60 | 0.72 | |||||||||||||||
Less dividends and distributions: |
||||||||||||||||||||||
From net investment income |
(0.25 | ) | (0.36 | ) | (0.26 | ) | (0.27 | ) | (0.33 | ) | ||||||||||||
Total dividends and distributions |
(0.25 | ) | (0.36 | ) | (0.26 | ) | (0.27 | ) | (0.33 | ) | ||||||||||||
Short-term redemption fees1 |
0.00 | 2 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | ||||||||||||
Net asset value, end of year |
$ | 14.42 | $ | 14.49 | $ | 15.11 | $ | 15.38 | $ | 13.05 | ||||||||||||
Total return |
1.35 | % | (1.65 | )% | 0.01 | % | 20.27 | % | 6.05 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||
Net assets, end of year (in millions) |
$ | 45 | $ | 665 | $ | 757 | $ | 695 | $ | 510 | ||||||||||||
Ratio of expenses to average net assets before reductions |
1.08 | % | 1.12 | % | 1.12 | % | 1.14 | % | 1.17 | % | ||||||||||||
Fee waiver |
0.02 | %3 | | % | | % | | % | | % | ||||||||||||
Expense offset arrangement |
0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | ||||||||||||
Ratio of expenses to average net assets after reductions |
1.06 | % | 1.12 | % | 1.12 | % | 1.14 | % | 1.17 | % | ||||||||||||
Ratio of net investment income to average net assets |
0.73 | % | 1.53 | % | 2.43 | % | 1.79 | % | 2.18 | % | ||||||||||||
Portfolio turnover rate |
12 | % | 18 | % | 15 | % | 14 | % | 12 | % |
1 | Calculated using average shares outstanding for the year. |
2 | Less than $0.01. |
3 | The ratio of expenses to average net assets for the fiscal year ended October 31, 2016, reflect fees reduced as result of a voluntary operating expense limitation of the share class to 1.07%. The agreement is effective for the period beginning after December 29, 2015 and can be changed at any time at the sole discretion of the Investment Adviser. For the fiscal year ended October 31, 2016 the waived fees were $24,973. |
4 | Less than 0.01%. |
The accompanying notes are an integral part of these
financial statements.
BBH INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each
year.
For the years ended October 31, |
||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
||||||||||||||||||
Net asset value, beginning of year |
$ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | $ | 12.70 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||
Net investment income1 |
0.34 | 0.26 | 0.40 | 0.28 | 0.30 | |||||||||||||||||
Net realized and unrealized gain (loss) |
(0.14 | ) | (0.49 | ) | (0.38 | ) | 2.37 | 0.45 | ||||||||||||||
Total income (loss) from investment operations |
0.20 | (0.23 | ) | 0.02 | 2.65 | 0.75 | ||||||||||||||||
Less dividends and distributions: |
||||||||||||||||||||||
From net investment income |
(0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | (0.37 | ) | ||||||||||||
Total dividends and distributions |
(0.28 | ) | (0.39 | ) | (0.29 | ) | (0.30 | ) | (0.37 | ) | ||||||||||||
Short-term redemption fees1 |
0.00 | 2 | 0.00 | 2 | | 0.00 | 2 | 0.00 | 2 | |||||||||||||
Net asset value, end of year |
$ | 14.46 | $ | 14.54 | $ | 15.16 | $ | 15.43 | $ | 13.08 | ||||||||||||
Total return |
1.51 | % | (1.42 | )% | 0.21 | % | 20.64 | % | 6.31 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||
Net assets, end of year (in millions) |
$ | 914 | $ | 68 | $ | 86 | $ | 75 | $ | 70 | ||||||||||||
Ratio of expenses to average net assets before reductions |
0.85 | % | 0.89 | % | 0.90 | % | 0.90 | % | 0.94 | % | ||||||||||||
Expense offset arrangement |
0.00 | %3 | 0.00 | %3 | 0.00 | %3 | 0.00 | %3 | 0.00 | %3 | ||||||||||||
Ratio of expenses to average net assets after reductions |
0.85 | % | 0.89 | % | 0.90 | % | 0.90 | % | 0.94 | % | ||||||||||||
Ratio of net investment income to average net assets |
2.41 | % | 1.77 | % | 2.62 | % | 2.01 | % | 2.42 | % | ||||||||||||
Portfolio turnover rate |
12 | % | 18 | % | 15 | % | 14 | % | 12 | % |
1 | Calculated using average shares outstanding for the year. |
2 | Less than $0.01. |
3 | Less than 0.01%. |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
1. |
Organization. The Fund is a separate, non-diversified series of BBH Trust (the Trust), which is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on June 6, 1997. The Fund offers Class N and Class I shares. Class N and Class I shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Class I shares automatically convert to any other share class of the Fund. As of October 31, 2016, there were six series of the Trust. |
2. |
Significant Accounting Policies. The Funds financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. |
Valuation of Investments. (1) The value of investments listed on a securities exchange is based on the last sale price on that exchange prior to the time when assets are valued, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchange; (2) securities not traded on an exchange are valued at the average of the quoted bid and asked prices in the over-the counter market; (3) securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board; (4) for securities traded on international exchanges, if events which may affect the value of the Funds securities occur after the close of the primary exchange on which such securities trade and before the Funds net asset value is next determined, then those securities will be fair valued as determined in good faith under supervision of the Board. The Fund currently uses a systematic fair value model provided by an independent third party to adjust the observed values of international securities on a daily basis; (5) short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent fair value by the Board. |
B. |
Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Dividend income and other distributions received from portfolio securities are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
the fair market value of securities received at ex-date. Distributions received on securities that represent a return of capital or a capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued daily. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. |
C. |
Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. |
Forward Foreign Currency Exchange Contracts. The Fund may enter into forward foreign currency exchange contracts (Contracts) in connection with planned purchases or sales of securities to economically hedge the U.S. dollar value of securities denominated in a particular currency, or to increase or shift its exposure to a currency other than U.S. dollars. The Fund has no specific limitation on the percentage of assets which may be committed to these types of Contracts. The Fund could be exposed to risks if the counterparties to the Contracts are unable to meet the terms of their Contracts or if the value of the foreign currency changes unfavorably. The U.S. dollar values of foreign currency underlying all contractual commitments held by the Fund are determined using forward foreign currency exchange rates supplied by a quotation service. As of the year ended October 31, 2016 the Fund had no open contracts. |
E. |
Foreign Currency Translations. The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange of such currency against the U.S. dollar to determine the value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Upon the purchase or sale of a security denominated in foreign currency, the Fund may enter into forward foreign currency exchange contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction. Reported net realized gains and losses arise from the sales of portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. The effect of changes in foreign exchange rates on foreign denominated securities is reflected in the net realized gain or loss on investments in securities and foreign exchange transactions and translations and unrealized appreciation or depreciation on investments in securities and foreign currency translations. Net unrealized appreciation or depreciation on foreign currency translations arise from changes in the value of the assets and liabilities, excluding investments in securities, at period end, resulting from changes in the exchange rate. |
|
|
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
F. |
Federal Income Taxes. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
G. |
Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, if any, are paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amounts of $11,418,433 and $1,321,700 to Class N shares and Class I shares, respectively, during the year ended October 31, 2016. |
Distributions paid
from: |
||||||||||||||||||||||
Ordinary income |
Net long-term capital gain |
Total taxable distributions |
Tax return of capital |
Total distributions paid |
||||||||||||||||||
2016: |
$ | 12,740,133 | | $ | 12,740,133 | | $ | 12,740,133 | ||||||||||||||
2015: |
19,958,932 | | 19,958,932 | | 19,958,932 |
Components of accumulated
earnings/(deficit): |
||||||||||||||||||||||||||||||
Undistributed ordinary income |
Undistributed long-term capital gain |
Accumulated earnings |
Accumulated capital and other losses |
Other book/tax temporary differences |
Unrealized appreciation/ (depreciation) |
Total accumulated earnings/ (deficit) |
||||||||||||||||||||||||
2016: |
$ | 20,493,926 | | $ | 20,493,926 | $ | (46,271,458 | ) | $ | (7,009,826 | ) | $ | 117,095,155 | $ | 84,307,797 | |||||||||||||||
2015: |
12,303,263 | | 12,303,263 | (37,959,260 | ) | (8,450,529 | ) | 111,309,594 | 77,203,068 |
Expiration Date |
Amount |
|||||||||
Pre-December 22, 2010 Capital Losses |
10/31/2017 |
$ | 33,416,631 | |||||||
10/31/2019 |
5,166,463 | |||||||||
Post December 22, 2010 Capital Losses1 |
No
Expiration |
7,688,364 | ||||||||
Total capital loss carryforward |
$ | 46,271,458 |
1 | Must be utilized prior to losses subject to expiration. |
|
|
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
H. |
Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
A. |
Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (Agreement) with the Trust, Brown Brothers Harriman & Co. (BBH) through a separately identifiable department (SID or Investment Adviser) provides investment advisory and portfolio management services to the Fund. BBH employs a manager-of-managers investment approach, whereby it allocates the Funds assets among the Funds sub-advisers, currently Mondrian Investment Partners Limited and Walter Scott & Partners Limited (together, Subadvisers). The Sub-advisers are responsible for investing the assets of the Fund and the Investment Adviser oversees the Sub-advisers and evaluates their performance results. BBH also provides administrative services to the Fund. The Funds investment advisory and administrative services fee is calculated daily and paid monthly at an annual rate equivalent to 0.80% per annum on the first $1,000,000,000 of average daily net assets and 0.70% per annum on all average daily net assets over $1,000,000,000. The Investment Adviser pays each Sub-adviser a percentage from its investment advisory and administrative fees. For the year ended October 31, 2016 the Fund incurred $6,698,469 for services under the Agreement. |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
B. |
Investment Advisory and Administrative Fee Waivers. Effective December 29, 2015, the Investment Adviser has voluntarily agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Funds business) of Class N to 1.07%. This is a voluntary waiver that can be changed at any time at the sole discretion of the Investment Adviser. For the year ended October 31, 2016, the Investment Adviser waived fees in the amount of $24,973 for Class N. |
C. |
Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% of Class N shares average daily net assets. Prior to the current year, the fee was a flat rate of 0.25%. For the year ended October 31, 2016, Class N shares of the Fund incurred $309,778 in shareholder servicing fees. |
D. |
Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Funds cash and investments and calculates the Funds daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Funds net asset value. For the year ended October 31, 2016, the Fund incurred $220,870 in custody and fund accounting fees. These fees for the Fund were reduced by $18,851 as a result of an expense offset arrangement with the Funds custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Funds expenses. 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 pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the year ended October 31, 2016, was $1,062. This amount is presented under line item Custody and fund accounting fees in the Statements of Operations. |
E. |
Board of Trustees Fees. Each Trustee who is not an interested person as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the year ended October 31, 2016, the Fund incurred $54,028 in independent Trustee compensation and reimbursements. |
4. |
Investment Transactions. For the year ended October 31, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $310,647,957 and $100,837,353 respectively. |
|
|
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
5. |
Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N shares and Class I shares of beneficial interest, at no par value. Transactions in Class N shares and Class I shares were as follows: |
For the year ended October 31, 2016 |
For the year ended October 31, 2015 |
|||||||||||||||||
Shares |
Dollars |
Shares |
Dollars |
|||||||||||||||
Class N |
||||||||||||||||||
Shares sold |
1,338,991 | $ | 18,817,299 | 6,384,021 | $ | 93,636,480 | ||||||||||||
Shares issued in connection with reinvestments of dividends |
836,244 | 11,364,561 | 1,272,169 | 17,708,587 | ||||||||||||||
Proceeds from short-term redemption fees |
N/A | 185 | N/A | 20 | ||||||||||||||
Shares redeemed |
(44,930,525 | ) | (607,010,304 | ) | (11,891,926 | ) | (167,781,523 | ) | ||||||||||
Net decrease |
(42,755,290 | ) | $ | (576,828,259 | ) | (4,235,736 | ) | $ | (56,436,436 | ) | ||||||||
Class I |
||||||||||||||||||
Shares sold |
63,509,676 | $ | 865,596,675 | 1,446,334 | $ | 21,935,188 | ||||||||||||
Shares issued in connection with reinvestments of dividends |
96,115 | 1,307,160 | 156,901 | 2,187,204 | ||||||||||||||
Proceeds from short-term redemption fees |
N/A | 4,121 | N/A | 177 | ||||||||||||||
Shares redeemed |
(5,063,173 | ) | (70,609,059 | ) | (2,577,182 | ) | (37,173,342 | ) | ||||||||||
Net increase (decrease) |
58,542,618 | $ | 796,298,897 | (973,947 | ) | $ | (13,050,773 | ) |
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
A. |
Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Funds prospectus, including, but not limited to, those described below: |
|
|
BBH INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
B. |
Indemnifications. Under the Trusts organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. |
Subsequent Events. On December 7, 2016, The Funds Board of Trustees approved the appointment of a new sole sub-adviser to the Fund, effective February 24, 2017, replacing the existing sub-advisers. Concurrent with that approval and also effective that date, the Funds investment advisory and administration fee charged by BBH&Co. will be 0.65% per annum on the first $3,000,000,000 of net assets and 0.60% per annum on net assets in excess of $3,000,000,000, calculated daily. Also effective that date, Class N shares of the Fund will no longer be offered. Class N shares will be redesignated and renamed Class I shares. Effective December 22, 2016, subject to certain exceptions, the Fund closed to new investments. Please see the Funds Prospectus for details. |
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF FUND EXPENSES
October 31, 2016 (unaudited)
|
|
BBH INTERNATIONAL EQUITY FUND
DISCLOSURE OF FUND EXPENSES (continued)
October 31, 2016 (unaudited)
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class N |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,025 | $ | 5.34 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,020 | $ | 5.33 |
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class I |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,026 | $ | 4.33 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,021 | $ | 4.32 |
1 | Expenses are equal to the Funds annualized expense ratio of 1.05% and 0.85% for Class N and I shares, respectively, 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 purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH INTERNATIONAL EQUITY FUND
CONFLICTS OF INTEREST
October 31, 2016 (unaudited)
|
|
BBH INTERNATIONAL EQUITY FUND
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
BBH INTERNATIONAL EQUITY FUND
ADDITIONAL FEDERAL TAX INFORMATION
October 31, 2016 (unaudited)
Foreign Source Income |
Foreign Taxes Paid |
|
$27,230,581 |
$2,145,956 |
|
|
TRUSTEES AND OFFICERS OF BBH INTERNATIONAL EQUITY
FUND
Name and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
|
Independent Trustees |
||||||||||
H. Whitney Wagner Born: 1956 |
Chairman of the Board and Trustee |
Chairman Since 2014; Trustee Since 2007 and 2006-2007 with the Predecessor Trust |
President, Clear Brook Advisors, a registered investment advisor. |
6 |
None. |
|||||
Andrew S. Frazier Born: 1948 |
Trustee |
Since 2010 |
Consultant to Western World Insurance Group, Inc. (WWIG) (January 2010 to January 2012). |
6 |
Director of WWIG. |
|||||
Mark M. Collins Born: 1956 |
Trustee |
Since 2011 |
Partner of Brown Investment Advisory Incorporated, a registered investment advisor. |
6 |
Chairman of Dillon Trust Company. |
|||||
John M. Tesoro Born: 1952 |
Trustee |
Since 2014 |
Partner, Certified Public Accountant, KPMG LLP (Retired in 2012). |
6 |
Trustee, Bridge Builder Trust (8 Funds); Director, Teton Advisors, Inc. (a registered investment adviser). |
TRUSTEES AND OFFICERS OF BBH INTERNATIONAL EQUITY
FUND
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
|
Interested Trustees |
||||||||||
Susan C. Livingston+ 50 Post Office Square Boston, MA 02110 Born: 1957 |
Trustee |
Since 2011 |
Partner (since 1998) and Senior Client Advocate (since 2010) for BBH&Co.; Director of BBH Luxembourg S.C.A. (since
1992). |
6 |
None. |
|||||
John A. Gehret+ 140 Broadway New York, NY 10005 Born: 1959 |
Trustee |
Since 2011 |
Limited Partner of BBH&Co. (2012-present); General Partner of BBH&Co. (1998 to 2011). |
6 |
None. |
|
|
TRUSTEES AND OFFICERS OF BBH INTERNATIONAL EQUITY
FUND
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During
Past 5 Years |
|
Officers |
||||||
Jean-Pierre Paquin 140 Broadway New York, NY 10005 Born: 1973 |
President and Principal Executive Officer |
Since 2016 |
Partner of BBH&Co. since 2015; joined BBH&Co. in 1996. |
|||
Daniel Greifenkamp 140 Broadway New York, NY 10005 Born: 1969 |
Vice
President |
Since 2016 |
Managing Director of BBH&Co. since 2014; joined BBH&Co. in 2011. |
|||
Charles H. Schreiber 140 Broadway New York, NY 10005 Born: 1957 |
Treasurer and Principal Financial Officer |
Since 2007 2006-2007 with the Predecessor Trust |
Senior Vice President of BBH&Co. since 2001; joined BBH&Co. in 1999. |
|||
Paul F. Gallagher 140 Broadway New York, NY 10005 Born: 1959 |
Chief Compliance Officer (CCO) |
Since 2015 |
Senior Vice President of BBH&Co. since September 2015; Executive Director, Counsel, Morgan Stanley Smith Barney LLC
(2009-September 2015). |
|||
Keith M. Kelley 140 Broadway New York, NY 10005 Born: 1983 |
Anti-Money Laundering Officer (AMLO) |
Since 2016 |
Vice President of BBH&Co. since February 2016; joined BBH&Co. in 2016; Director, Legal and Compliance, Morgan Stanley Smith
Barney LLC (2014-February 2016); Compliance Manager, State Street Corporation (2013- 2014); Associate, J.P. Morgan Chase & Co.
(2011-2013). |
|||
Suzan Barron 50 Post Office Square Boston, MA 02110 Born: 1964 |
Secretary |
Since 2009 |
Senior Vice President and Senior Investor Services Counsel, BBH&Co. since 2005. |
TRUSTEES AND OFFICERS OF BBH INTERNATIONAL EQUITY
FUND
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During
Past 5 Years | |
Rowena Rothman 140 Broadway New York, NY 10005 Born: 1967 |
Assistant Treasurer |
Since 2011 |
Vice President of BBH&Co. since 2009. |
|||
James D. Kerr 50 Post Office Square Boston, MA 02110 Born: 1983 |
Assistant Secretary |
Since 2015 |
Assistant Vice President and Investor Services Associate Counsel since 2014; joined BBH&Co. in 2013; Assistant District Attorney,
Middlesex County, Massachusetts (October 2011-September 2013). |
# |
All officers of the Trust hold office for one year and until their respective successors are chosen and qualified (subject to the ability of the Trustees to remove any officer in accordance with the Trusts By-laws). Mr. Wagner previously served on the Board of Trustees of the Predecessor Trust. |
+ |
Ms. Livingston and Mr. Gehret are interested persons of the Trust as defined in the 1940 Act because of their positions as Partner and Limited Partner of BBH&Co., respectively. |
ˆ |
The Fund Complex consists of the Trust, which has six series, and each is counted as one Portfolio for purposes of this table. |
|
|
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 |
Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: |
Call
1-800-575-1265 |
|||||
By E-mail send your request to: |
bbhfunds@bbh.com |
|||||
On the internet: |
www.bbhfunds.com |
BBH LIMITED DURATION FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE
October 31, 2016
![]() |
1 | One basis point or bp is 1/100th of a percent (0.01% or 0.0001) and is used to denote the change in yield or price of a financial instrument. |
BBH LIMITED DURATION FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
1 | Since the Fund hedges its duration, performance contribution for the purposes of this letter will be excess return contribution: the amount by which that particular holding outperformed a Treasury of equivalent duration multiplied by the holdings fractional weight in the portfolio. |
2 | Credit Quality letter ratings are provided by Standard and Poors (www.standardpoors.com) and Moodys (www.moodys.com) which are independent third parties. In order to be more conservative, when ratings differ, the lower rating is used. Quality ratings reflect the credit quality of the underlying issues in the fund portfolio and not of the fund itself. Information obtained from third parties is believed to be reliable, but cannot be guaranteed. Issuers with credit ratings of AA or better are considered to be of high credit quality, with little risk of issuer failure. Issuers with credit ratings of BBB or better are considered to be of good credit quality, with adequate capacity to meet financial commitments. Issuers with credit ratings below BBB are considered speculative in nature and are vulnerable to the possibility of issuer failure or business interruption. |
|
|
BBH LIMITED DURATION FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
![]() |
1 | London Interbank Offered Rate is the average lending rate for interbank loans. |
BBH LIMITED DURATION FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
|
![]() |
1 | The Funds performance assumes the reinvestment of all dividends and distributions. The Barclays Capital U.S. 1-3 Year Treasury Bond Index (BCTSY) has been adjusted to reflect reinvestment of dividends on securities in the index. The BCTSY is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Funds performance. The index is unmanaged. Investments cannot be made in the index. |
|
|
BBH LIMITED DURATION FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
BBH LIMITED DURATION FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BBH
Limited Duration Fund:
December 22, 2016
|
|
BBH LIMITED DURATION FUND
PORTFOLIO ALLOCATION
October 31, 2016
U.S. $ Value |
Percent of Net Assets |
|||||||||
Asset Backed Securities |
$ | 1,587,926,308 | 33.2 | % | ||||||
Commercial Mortgage Backed Securities |
428,047,134 | 9.0 | ||||||||
Corporate Bonds |
1,549,072,560 | 32.4 | ||||||||
Loan Participations and Assignments |
431,592,364 | 9.0 | ||||||||
Municipal Bonds |
491,044,929 | 10.3 | ||||||||
U.S. Government Agency Obligations |
27,346,459 | 0.6 | ||||||||
Certificates of Deposit |
258,241,299 | 5.4 | ||||||||
Time Deposits |
30,000,000 | 0.6 | ||||||||
U.S. Treasury Bills |
31,987,181 | 0.7 | ||||||||
Liabilities in Excess of Other Assets |
(55,988,964 | ) | (1.2 | ) | ||||||
NET ASSETS |
$ | 4,779,269,270 | 100.0 | % |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value |
|||||||||||||||
ASSET BACKED SECURITIES (33.2%) |
||||||||||||||||||
$ 28,692,619 | AIM Aviation Finance, Ltd. 2015-1A1 |
02/15/40 | 4.213 | % | $ | 28,549,156 | ||||||||||||
694,591 | Aircraft Lease Securitisation, Ltd. 2007-1A1,2 |
05/10/32 | 0.796 | 690,249 | ||||||||||||||
7,399,200 | Alterna Funding I LLC 2014-1A1 |
02/15/21 | 1.639 | 7,214,220 | ||||||||||||||
11,300,000 | AmeriCredit Automobile Receivables Trust 2013-3 |
06/10/19 | 2.380 | 11,371,077 | ||||||||||||||
17,314,677 | AXIS Equipment Finance Receivables III LLC 2015-1A1 |
03/20/20 | 1.900 | 17,344,547 | ||||||||||||||
27,000,000 | AXIS Equipment Finance Receivables IV LLC 2016-1A1 |
11/20/21 | 2.210 | 26,998,075 | ||||||||||||||
1,336,429 | BCC Funding VIII LLC 2014-1A1 |
06/20/20 | 1.794 | 1,334,759 | ||||||||||||||
34,296,096 | BCC Funding X LLC 2015-11 |
10/20/20 | 2.224 | 34,184,555 | ||||||||||||||
17,530,000 | BCC Funding XIII LLC 2016-11 |
12/20/21 | 2.200 | 17,517,007 | ||||||||||||||
7,531,337 | Capital Auto Receivables Asset Trust 2013-2 |
10/22/18 | 1.960 | 7,537,912 | ||||||||||||||
2,820,000 | Capital Auto Receivables Asset Trust 2013-2 |
04/22/19 | 2.660 | 2,835,075 | ||||||||||||||
18,140,000 | Capital Auto Receivables Asset Trust 2013-21 |
01/20/22 | 4.060 | 18,408,889 | ||||||||||||||
13,260,000 | Capital Auto Receivables Asset Trust 2013-3 |
10/22/18 | 2.790 | 13,365,302 | ||||||||||||||
17,076,184 | Carlyle Global Market Strategies Commodities Funding, Ltd. 2014-1A1,2,3 |
10/15/21 | 2.780 | 12,548,798 | ||||||||||||||
17,369,486 | Cazenovia Creek Funding I LLC 2015-1A1 |
12/10/23 | 2.000 | 17,250,071 | ||||||||||||||
5,278,749 | CCG Receivables Trust 2014-11 |
11/15/21 | 1.060 | 5,271,885 | ||||||||||||||
45,000,000 | Chase Issuance Trust 2016-A6 |
01/15/20 | 1.100 | 44,952,269 | ||||||||||||||
27,788,880 | Chesterfield Financial Holdings LLC 2014-1A1 |
12/15/34 | 4.500 | 28,038,646 | ||||||||||||||
11,437,516 | CIT Equipment Collateral 2014-VT11 |
10/21/19 | 1.500 | 11,437,472 | ||||||||||||||
13,000,000 | Citibank Credit Card Issuance Trust 2014-A8 |
04/09/20 | 1.730 | 13,099,804 | ||||||||||||||
3,551,663 | Credit Acceptance Auto Loan Trust 2014-1A1 |
10/15/21 | 1.550 | 3,552,845 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) |
||||||||||||||||||
$ 11,160,000 | Credit Acceptance Auto Loan Trust 2014-1A1 |
04/15/22 | 2.290 | % | $ | 11,209,627 | ||||||||||||
2,720,000 | Credit Acceptance Auto Loan Trust 2014-2A1 |
09/15/22 | 2.670 | 2,735,157 | ||||||||||||||
10,890,000 | Credit Acceptance Auto Loan Trust 2015-1A1 |
01/17/23 | 2.610 | 10,942,579 | ||||||||||||||
14,190,000 | Credit Acceptance Auto Loan Trust 2016-2A1 |
11/15/23 | 2.420 | 14,243,567 | ||||||||||||||
35,760,000 | Drive Auto Receivables Trust 2015-BA1 |
07/15/21 | 2.760 | 36,027,732 | ||||||||||||||
13,734,000 | Eagle I, Ltd. 2014-1A1 |
12/15/39 | 4.310 | 13,424,985 | ||||||||||||||
31,460,241 | ECAF I, Ltd. 2015-1A1 |
06/15/40 | 3.473 | 31,365,860 | ||||||||||||||
19,012,028 | Emerald Aviation Finance, Ltd. 2013-11 |
10/15/38 | 4.650 | 19,522,977 | ||||||||||||||
36,521,152 | Engs Commercial Finance Trust 2015-1A1 |
10/22/21 | 2.310 | 36,575,138 | ||||||||||||||
19,420,000 | Enterprise Fleet Financing LLC 2016-21 |
02/22/22 | 1.740 | 19,453,484 | ||||||||||||||
9,710,808 | FNA Trust 2014-1A1 |
12/10/22 | 1.296 | 9,613,700 | ||||||||||||||
9,272,333 | FNA Trust 2015-11 |
12/10/23 | 3.240 | 9,237,913 | ||||||||||||||
14,500,000 | Ford Credit Auto Owner Trust 2014-21 |
04/15/26 | 2.310 | 14,795,368 | ||||||||||||||
19,132,339 | Foursight Capital Automobile Receivables Trust 2015-11 |
01/15/21 | 2.340 | 19,139,001 | ||||||||||||||
7,765,788 | FRS I LLC 2013-1A1 |
04/15/43 | 1.800 | 7,616,010 | ||||||||||||||
25,371,675 | Global Container Assets, Ltd. 2015-1A1 |
02/05/30 | 2.100 | 25,145,233 | ||||||||||||||
16,510,000 | GMF Floorplan Owner Revolving Trust 2015-11 |
05/15/20 | 1.650 | 16,561,117 | ||||||||||||||
6,525,000 | GMF Floorplan Owner Revolving Trust 2015-11 |
05/15/20 | 1.970 | 6,516,357 | ||||||||||||||
10,730,000 | GMF Floorplan Owner Revolving Trust 2015-11 |
05/15/20 | 2.220 | 10,732,869 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) |
||||||||||||||||||
$ 22,660,000 | Hertz Vehicle Financing LLC 2011-1A1 |
03/25/18 | 3.290 | % | $ | 22,750,447 | ||||||||||||
17,750,000 | Hyundai Auto Receivables Trust 2013-B |
02/15/19 | 1.710 | 17,839,934 | ||||||||||||||
2,262,451 | Leaf II Receivables Funding LLC 2013-11 |
09/15/21 | 1.980 | 2,263,491 | ||||||||||||||
19,210,000 | Lendmark Funding Trust 2016-A1 |
08/21/23 | 4.820 | 19,525,932 | ||||||||||||||
24,110,000 | Lendmark Funding Trust 2016-2A1 |
04/21/25 | 3.260 | 24,133,153 | ||||||||||||||
2,875,914 | MarketPlace Loan Trust 2015-OD41 |
12/18/17 | 3.250 | 2,876,814 | ||||||||||||||
5,087,469 | MCA Fund I Holding LLC 2014-11,2 |
08/15/24 | 2.817 | 5,089,758 | ||||||||||||||
5,811,727 | MMAF Equipment Finance LLC 2012-AA1 |
10/10/18 | 1.350 | 5,810,644 | ||||||||||||||
8,167,954 | Nations Equipment Finance Funding II LLC 2014-1A1 |
07/20/18 | 1.558 | 8,163,742 | ||||||||||||||
17,903,771 | Nations Equipment Finance Funding III LLC 2016-1A1 |
02/20/21 | 3.610 | 17,920,937 | ||||||||||||||
12,757,892 | Navitas Equipment Receivables LLC 2015-11 |
11/15/18 | 2.120 | 12,780,851 | ||||||||||||||
22,280,000 | Navitas Equipment Receivables LLC 2016-11 |
06/15/21 | 2.200 | 22,272,030 | ||||||||||||||
51,030,000 | NCF Dealer Floorplan Master Trust 2014-1A1,2 |
10/20/20 | 2.026 | 50,217,021 | ||||||||||||||
14,332,637 | New Mexico State Educational Assistance Foundation 2013-12 |
01/02/25 | 1.227 | 14,061,034 | ||||||||||||||
9,043,496 | Newtek Small Business Loan Trust 2010-11,2 |
02/25/41 | 2.834 | 8,794,800 | ||||||||||||||
40,190,000 | NextGear Floorplan Master Owner Trust 2014-1A1 |
10/15/19 | 1.920 | 40,143,568 | ||||||||||||||
22,470,000 | NextGear Floorplan Master Owner Trust 2015-1A1 |
07/15/19 | 1.800 | 22,477,750 | ||||||||||||||
13,740,000 | NextGear Floorplan Master Owner Trust 2015-1A1,2 |
07/15/19 | 2.285 | 13,741,555 | ||||||||||||||
22,200,000 | NextGear Floorplan Master Owner Trust 2016-2A1 |
09/15/21 | 2.190 | 22,162,731 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) |
||||||||||||||||||
$ 29,760,000 | NRZ Advance Receivables Trust Advance Receivables Backed 2015-T21 |
08/17/48 | 3.302 | % | $ | 29,814,089 | ||||||||||||
12,280,000 | NRZ Advance Receivables Trust Advance Receivables Backed 2016-T11 |
06/15/49 | 2.751 | 12,257,535 | ||||||||||||||
12,500,000 | OnDeck Asset Securitization Trust II LLC 2016-1A1 |
05/17/20 | 4.210 | 12,538,425 | ||||||||||||||
8,001,626 | OneMain Financial Issuance Trust 2014-1A1 |
06/18/24 | 2.430 | 8,005,700 | ||||||||||||||
15,230,000 | OneMain Financial Issuance Trust 2014-2A1 |
09/18/24 | 3.020 | 15,230,978 | ||||||||||||||
26,190,000 | OneMain Financial Issuance Trust 2015-1A1 |
03/18/26 | 3.850 | 26,410,978 | ||||||||||||||
20,010,000 | Oxford Finance Funding LLC 2014-1A1 |
12/15/22 | 3.475 | 20,051,815 | ||||||||||||||
14,750,000 | Oxford Finance Funding LLC 2016-1A1 |
06/17/24 | 3.968 | 14,786,416 | ||||||||||||||
3,364,046 | PFS Tax Lien Trust 2014-11 |
05/15/29 | 1.440 | 3,345,394 | ||||||||||||||
50,000,000 | Progreso Receivables Funding IV LLC 2015-B1 |
07/28/20 | 3.000 | 49,859,050 | ||||||||||||||
34,218,573 | ReadyCap Lending Small Business Loan Trust 2015-12 |
12/25/38 | 1.784 | 33,982,465 | ||||||||||||||
6,651,036 | Santander Drive Auto Receivables Trust 2013-2 |
03/15/19 | 1.950 | 6,666,430 | ||||||||||||||
10,980,000 | Santander Drive Auto Receivables Trust 2015-3 |
04/15/20 | 2.070 | 11,045,967 | ||||||||||||||
22,790,000 | Santander Drive Auto Receivables Trust 2015-3 |
01/15/21 | 2.740 | 23,150,832 | ||||||||||||||
21,936,604 | Shenton Aircraft Investment I, Ltd. 2015-1A1 |
10/15/42 | 4.750 | 21,829,553 | ||||||||||||||
1,986,539 | SMART Trust 2013-2US |
02/14/19 | 1.180 | 1,978,394 | ||||||||||||||
13,295,065 | SMART Trust 2015-1US |
09/14/18 | 1.500 | 13,263,702 | ||||||||||||||
33,210,000 | Spirit Master Funding LLC 2014-4A1 |
01/20/45 | 3.501 | 32,168,531 | ||||||||||||||
9,900,000 | Spirit Master Funding VII LLC 2013-1A1 |
12/20/43 | 3.887 | 9,797,586 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
ASSET BACKED SECURITIES (continued) |
||||||||||||||||||
$ 4,086,251 | Springleaf Funding Trust 2014-AA1 |
12/15/22 | 2.410 | % | $ | 4,090,865 | ||||||||||||
17,081,887 | STORE Master Funding LLC 2013-1A1 |
03/20/43 | 4.160 | 16,993,608 | ||||||||||||||
12,216,613 | STORE Master Funding LLC 2013-2A1 |
07/20/43 | 4.370 | 12,148,770 | ||||||||||||||
20,433,270 | STORE Master Funding LLC 2013-3A1 |
11/20/43 | 4.240 | 20,582,106 | ||||||||||||||
2,670,661 | TAL Advantage V LLC 2014-2A1 |
05/20/39 | 1.700 | 2,640,678 | ||||||||||||||
19,157,500 | TAL Advantage V LLC 2014-3A1 |
11/21/39 | 3.270 | 18,548,548 | ||||||||||||||
7,388,036 | Tax Ease Funding LLC 2016-1A1 |
06/15/28 | 3.131 | 7,370,457 | ||||||||||||||
26,528,000 | Textainer Marine Containers, Ltd. 2014-1A1 |
10/20/39 | 3.270 | 25,622,509 | ||||||||||||||
11,530,000 | Trade MAPS 1, Ltd. 2013-1A1,2 |
12/10/18 | 1.780 | 11,509,426 | ||||||||||||||
49,760,000 | Trafigura Securitisation Finance, Plc. 2014-1A1,2 |
10/15/18 | 1.485 | 49,618,254 | ||||||||||||||
18,330,000 | Turquoise Card Backed Securities, Plc. 2012-1A1,2 |
06/17/19 | 1.335 | 18,370,876 | ||||||||||||||
4,999,846 | Utah State Board of Regents 2011-12 |
05/01/29 | 1.607 | 5,002,245 | ||||||||||||||
500,746 | Westlake Automobile Receivables Trust 2015-1A1 |
03/15/18 | 1.170 | 500,718 | ||||||||||||||
10,600,000 | Westlake Automobile Receivables Trust 2015-1A1 |
11/16/20 | 2.290 | 10,664,197 | ||||||||||||||
21,340,000 | Westlake Automobile Receivables Trust 2015-2A1 |
01/15/21 | 2.450 | 21,534,354 | ||||||||||||||
25,510,000 | World Financial Network Credit Card Master Trust 2014-C |
08/16/21 | 1.540 | 25,578,476 | ||||||||||||||
19,570,000 | World Financial Network Credit Card Master Trust 2016-B |
06/15/22 | 1.440 | 19,578,902 | ||||||||||||||
Total Asset Backed Securities (Identified cost $1,594,410,238) |
1,587,926,308 | |||||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (9.0%) |
||||||||||||||||||
15,540,000 | Aventura Mall Trust 2013-AVM1,2 |
12/05/32 | 3.867 | 16,242,352 | ||||||||||||||
13,860,000 | BBCMS Trust 2015-RRI1,2 |
05/15/32 | 2.585 | 13,825,170 | ||||||||||||||
26,807,000 | BB-UBS Trust 2012-TFT1,2 |
06/05/30 | 3.584 | 26,766,117 | ||||||||||||||
6,349,000 | BHMS Mortgage Trust 2014-ATLS1,2 |
07/05/33 | 2.978 | 6,186,920 | ||||||||||||||
32,018,000 | BHMS Mortgage Trust 2014-ATLS1,2 |
07/05/33 | 4.847 | 31,795,068 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (continued) |
||||||||||||||||||
$ 12,240,000 | BLCP Hotel Trust 2014-CLRN1,2 |
08/15/29 | 2.485 | % | $ | 12,088,622 | ||||||||||||
30,106,000 | BXHTL Mortgage Trust 2015-JWRZ1,2 |
05/15/29 | 2.685 | 30,016,335 | ||||||||||||||
35,000,000 | CDGJ Commercial Mortgage Trust 2014-BXCH1,2 |
12/15/27 | 3.035 | 34,649,023 | ||||||||||||||
10,500,000 | CGBAM Commercial Mortgage Trust 2014-HD1,2 |
02/15/31 | 1.735 | 10,447,010 | ||||||||||||||
7,457,000 | CGBAM Commercial Mortgage Trust 2014-HD1,2 |
02/15/31 | 2.135 | 7,287,491 | ||||||||||||||
31,329,000 | CG-CCRE Commercial Mortgage Trust 2014-FL21,2 |
11/15/31 | 3.435 | 31,454,278 | ||||||||||||||
13,661,251 | CGGS Commercial Mortgage Trust 2016-RNDB1,2 |
02/15/33 | 2.185 | 13,717,105 | ||||||||||||||
2,085,000 | Citigroup Commercial Mortgage Trust 2013-SMP1 |
01/12/30 | 2.738 | 2,084,053 | ||||||||||||||
8,371,975 | Commercial Mortgage Pass Through Certificates 2013-GAM1 |
02/10/28 | 1.705 | 8,318,818 | ||||||||||||||
9,690,000 | Commercial Mortgage Pass Through Certificates 2013-GAM1,2 |
02/10/28 | 3.531 | 9,670,015 | ||||||||||||||
22,660,000 | Commercial Mortgage Pass Through Certificates 2014-TWC1,2 |
02/13/32 | 1.381 | 22,645,423 | ||||||||||||||
9,950,000 | EQTY 2014-INNS Mortgage Trust1,2 |
05/08/31 | 2.130 | 9,800,826 | ||||||||||||||
19,650,000 | GS Mortgage Securities Corp. Trust 2016-ICE21,2 |
02/15/33 | 4.785 | 19,792,653 | ||||||||||||||
9,410,000 | Hyatt Hotel Portfolio Trust 2015-HYT1,2 |
11/15/29 | 2.628 | 9,398,094 | ||||||||||||||
5,600,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-BXH1,2 |
04/15/27 | 1.785 | 5,537,186 | ||||||||||||||
10,250,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-BXH1,2 |
04/15/27 | 2.185 | 10,101,397 | ||||||||||||||
14,860,000 | SBA Tower Trust1 |
12/15/42 | 2.933 | 14,894,716 | ||||||||||||||
35,700,000 | SBA Tower Trust1 |
04/15/43 | 2.240 | 35,777,980 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
COMMERCIAL MORTGAGE BACKED SECURITIES (continued) |
||||||||||||||||||
$ 14,500,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH1,2 |
02/15/27 | 2.385 | % | $ | 14,465,275 | ||||||||||||
20,108,443 | WFCG Commercial Mortgage Trust 2015-BXRP1,2 |
11/15/29 | 1.657 | 19,845,288 | ||||||||||||||
11,468,922 | WFCG Commercial Mortgage Trust 2015-BXRP1,2 |
11/15/29 | 1.996 | 11,239,919 | ||||||||||||||
Total Commercial Mortgage Backed Securities (Identified cost $428,985,420) |
428,047,134 | |||||||||||||||||
CORPORATE BONDS (32.4%) |
||||||||||||||||||
AUTO MANUFACTURERS (0.7%) |
||||||||||||||||||
13,580,000 | Daimler Finance North America LLC1 |
03/10/17 | 1.125 | 13,582,091 | ||||||||||||||
17,720,000 | General Motors Co. |
10/02/18 | 3.500 | 18,192,681 | ||||||||||||||
31,774,772 | ||||||||||||||||||
BANKS (9.6%) |
||||||||||||||||||
24,290,000 | ANZ New Zealand (Intl), Ltd., London Branch1 |
02/01/19 | 2.250 | 24,552,502 | ||||||||||||||
27,373,000 | Bank of America Corp. |
09/01/17 | 6.000 | 28,404,743 | ||||||||||||||
24,335,000 | BNZ International Funding Ltd.1 |
03/02/21 | 2.750 | 24,873,241 | ||||||||||||||
17,405,000 | Caisse Centrale Desjardins1 |
09/12/17 | 1.550 | 17,428,671 | ||||||||||||||
43,473,900 | Citigroup Capital XIII2,4 |
10/30/40 | 7.257 | 45,230,245 | ||||||||||||||
19,000,000 | Citigroup, Inc.2 |
09/01/23 | 2.255 | 19,067,450 | ||||||||||||||
1,882,040 | FNBC 1993-A Pass Through Trust |
01/05/18 | 8.080 | 1,910,279 | ||||||||||||||
37,000,000 | Goldman Sachs Group, Inc.2 |
06/04/17 | 1.460 | 37,052,281 | ||||||||||||||
19,715,000 | JPMorgan Chase & Co. |
02/15/17 | 1.350 | 19,729,983 | ||||||||||||||
33,660,000 | JPMorgan Chase & Co. |
08/15/17 | 2.000 | 33,868,625 | ||||||||||||||
12,775,000 | Mitsubishi UFJ Trust & Banking Corp.1 |
10/16/17 | 1.600 | 12,788,580 | ||||||||||||||
25,610,000 | National Australia Bank Ltd. |
07/12/19 | 1.375 | 25,412,547 | ||||||||||||||
36,421,000 | PNC Bank N.A. |
01/27/17 | 1.125 | 36,434,549 | ||||||||||||||
24,850,000 | Royal Bank of Canada |
04/15/19 | 1.625 | 24,846,645 | ||||||||||||||
12,345,000 | Skandinaviska Enskilda Banken AB |
03/15/21 | 2.625 | 12,633,614 | ||||||||||||||
11,375,000 | Svenska Handelsbanken AB |
04/04/17 | 2.875 | 11,463,270 | ||||||||||||||
25,085,000 | Toronto-Dominion Bank |
04/07/21 | 2.125 | 25,260,269 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
CORPORATE BONDS (continued) |
||||||||||||||||||
BANKS (continued) |
||||||||||||||||||
$ 29,515,000 | Wells Fargo Bank N.A. |
01/22/18 | 1.650 | % | $ | 29,615,351 | ||||||||||||
11,500,000 | Wells Fargo Bank N.A. |
05/24/19 | 1.750 | 11,544,781 | ||||||||||||||
17,750,000 | Westpac Banking Corp. |
12/01/17 | 1.500 | 17,778,293 | ||||||||||||||
459,895,919 | ||||||||||||||||||
BEVERAGES (2.1%) |
||||||||||||||||||
39,350,000 | Anheuser-Busch InBev Finance, Inc. |
02/01/19 | 1.900 | 39,655,907 | ||||||||||||||
12,695,000 | Anheuser-Busch InBev Finance, Inc. |
02/01/21 | 2.650 | 12,983,342 | ||||||||||||||
48,418,000 | Diageo Capital, Plc. |
05/11/17 | 1.500 | 48,545,775 | ||||||||||||||
101,185,024 | ||||||||||||||||||
COMMERCIAL SERVICES (0.7%) |
||||||||||||||||||
19,863,000 | Experian Finance, Plc.1 |
06/15/17 | 2.375 | 19,971,889 | ||||||||||||||
13,555,000 | United Rentals North America, Inc. |
07/15/23 | 4.625 | 13,995,537 | ||||||||||||||
33,967,426 | ||||||||||||||||||
COMPUTERS (0.5%) |
||||||||||||||||||
6,790,000 | Diamond 1 Finance Corp. / Diamond 2 Finance Corp.1 |
06/15/21 | 4.420 | 7,100,351 | ||||||||||||||
17,250,000 | Diamond 1 Finance Corp. / Diamond 2 Finance Corp.1 |
06/15/23 | 5.450 | 18,472,300 | ||||||||||||||
25,572,651 | ||||||||||||||||||
COSMETICS/PERSONAL CARE (0.4%) |
||||||||||||||||||
17,745,000 | Avon Products, Inc.2 |
03/15/20 | 6.600 | 18,199,716 | ||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (3.9%) |
||||||||||||||||||
9,332,579 | AA Aircraft Financing 2013-1 LLC1 |
11/01/19 | 3.596 | 9,239,253 | ||||||||||||||
5,777,349 | Ahold Lease Series 2001-A-1 Pass Through Trust |
01/02/20 | 7.820 | 6,064,509 | ||||||||||||||
25,020,000 | Air Lease Corp. |
04/01/17 | 5.625 | 25,425,074 | ||||||||||||||
15,950,000 | Air Lease Corp. |
09/04/18 | 2.625 | 16,145,515 | ||||||||||||||
6,300,000 | Alliance Data Systems Corp.1 |
12/01/17 | 5.250 | 6,410,250 | ||||||||||||||
3,210,000 | Alliance Data Systems Corp.1 |
04/01/20 | 6.375 | 3,270,187 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
CORPORATE BONDS (continued) |
||||||||||||||||||
DIVERSIFIED FINANCIAL SERVICES (continued) |
||||||||||||||||||
$ 3,750,000 | Alliance Data Systems Corp.1 |
11/01/21 | 5.875 | % | $ | 3,778,125 | ||||||||||||
8,790,000 | Alliance Data Systems Corp.1 |
08/01/22 | 5.375 | 8,460,375 | ||||||||||||||
22,705,000 | Athene Global Funding1 |
10/23/18 | 2.875 | 22,794,730 | ||||||||||||||
8,500,000 | Credit Acceptance Corp. |
02/15/21 | 6.125 | 8,542,500 | ||||||||||||||
10,823,288 | Doric Nimrod Air Alpha 2013-1 Pass Through Trust1 |
05/30/25 | 5.250 | 11,391,511 | ||||||||||||||
5,698,743 | Doric Nimrod Air Finance Alpha, Ltd. 2012-1 (Class A) Pass Through Trust1 |
11/30/24 | 5.125 | 5,953,961 | ||||||||||||||
49,455,000 | Drawbridge Special Opportunities Fund1 |
08/01/21 | 5.000 | 47,353,163 | ||||||||||||||
1,947,412 | LS Power Funding Corp. |
12/30/16 | 8.080 | 1,969,531 | ||||||||||||||
11,349,000 | Murray Street Investment Trust I |
03/09/17 | 4.647 | 11,485,528 | ||||||||||||||
188,284,212 | ||||||||||||||||||
ELECTRIC (0.6%) |
||||||||||||||||||
22,150,000 | TransAlta Corp. |
06/03/17 | 1.900 | 22,124,816 | ||||||||||||||
5,580,000 | TransAlta Corp. |
05/15/18 | 6.900 | 5,864,122 | ||||||||||||||
27,988,938 | ||||||||||||||||||
HEALTHCARE-PRODUCTS (0.2%) |
||||||||||||||||||
7,995,000 | Mallinckrodt International Finance S.A. |
04/15/18 | 3.500 | 7,935,038 | ||||||||||||||
1,435,000 | Mallinckrodt International Finance S.A./ Mallinckradt CB LLC1 |
04/15/20 | 4.875 | 1,440,381 | ||||||||||||||
9,375,419 | ||||||||||||||||||
HEALTHCARE-SERVICES (0.5%) |
||||||||||||||||||
26,155,000 | UnitedHealth Group, Inc. |
07/16/18 | 1.900 | 26,384,772 | ||||||||||||||
INSURANCE (2.6%) |
||||||||||||||||||
15,985,000 | Fairfax Financial Holdings, Ltd.1 |
05/15/21 | 5.800 | 17,431,355 | ||||||||||||||
41,960,000 | Pricoa Global Funding I1 |
08/18/17 | 1.350 | 41,994,659 | ||||||||||||||
18,875,000 | Sirius International Group, Ltd.1 |
11/01/26 | 4.600 | 18,745,140 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
CORPORATE BONDS (continued) |
||||||||||||||||||
INSURANCE (continued) |
||||||||||||||||||
$ 11,050,000 | Vitality Re IV, Ltd.1,2 |
01/09/18 | 2.750 | % | $ | 11,053,315 | ||||||||||||
33,100,000 | Vitality Re V, Ltd.1,2 |
01/07/20 | 1.750 | 32,848,440 | ||||||||||||||
122,072,909 | ||||||||||||||||||
INTERNET (0.4%) |
||||||||||||||||||
15,630,000 | Expedia, Inc. |
08/15/20 | 5.950 | 17,526,310 | ||||||||||||||
INVESTMENT FIRMS (1.7%) |
||||||||||||||||||
6,800,000 | Ares Capital Corp. |
11/30/18 | 4.875 | 7,082,207 | ||||||||||||||
17,570,000 | Ares Capital Corp. |
01/15/20 | 3.875 | 18,065,562 | ||||||||||||||
12,880,000 | Ares Capital Corp. |
01/19/22 | 3.625 | 12,869,825 | ||||||||||||||
22,645,000 | FS Investment Corp. |
01/15/20 | 4.250 | 23,097,266 | ||||||||||||||
21,515,000 | PennantPark Investment Corp. |
10/01/19 | 4.500 | 21,515,021 | ||||||||||||||
82,629,881 | ||||||||||||||||||
MEDIA (0.4%) |
||||||||||||||||||
16,485,000 | TEGNA, Inc. |
10/15/19 | 5.125 | 16,958,944 | ||||||||||||||
OIL & GAS (0.2%) |
||||||||||||||||||
20,591,250 | Odebrecht Drilling Norbe VII/IX, Ltd.1 |
06/30/22 | 6.350 | 6,589,200 | ||||||||||||||
10,266,000 | Odebrecht Offshore Drilling Finance, Ltd.1 |
10/01/23 | 6.750 | 2,078,865 | ||||||||||||||
8,668,065 | ||||||||||||||||||
OIL & GAS SERVICES (0.2%) |
||||||||||||||||||
8,000,000 | Freeport-McMoran Oil & Gas LLC |
11/15/20 | 6.500 | 8,170,000 | ||||||||||||||
PHARMACEUTICALS (1.6%) |
||||||||||||||||||
19,801,000 | AbbVie, Inc. |
11/06/17 | 1.750 | 19,871,689 | ||||||||||||||
14,270,000 | AbbVie, Inc. |
05/14/18 | 1.800 | 14,314,879 | ||||||||||||||
9,000,000 | AbbVie, Inc. |
05/14/20 | 2.500 | 9,113,166 | ||||||||||||||
14,000,000 | AbbVie, Inc. |
05/14/21 | 2.300 | 14,001,148 | ||||||||||||||
7,787,000 | GlaxoSmithKline Capital, Inc. |
05/15/18 | 5.650 | 8,283,647 | ||||||||||||||
9,445,000 | Pfizer, Inc. |
03/30/17 | 6.050 | 9,642,467 | ||||||||||||||
75,226,996 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
CORPORATE BONDS (continued) |
||||||||||||||||||
PIPELINES (1.3%) |
||||||||||||||||||
$ 7,105,000 | Enbridge Energy Partners LP |
12/15/16 | 5.875 | % | $ | 7,139,388 | ||||||||||||
14,927,000 | Enterprise Products Operating LLC |
09/15/17 | 6.300 | 15,543,395 | ||||||||||||||
23,190,000 | Spectra Energy Capital LLC |
10/01/19 | 8.000 | 26,583,880 | ||||||||||||||
12,960,000 | TransCanada PipeLines, Ltd. |
01/15/19 | 3.125 | 13,340,402 | ||||||||||||||
62,607,065 | ||||||||||||||||||
REAL ESTATE (1.0%) |
||||||||||||||||||
11,490,000 | Prologis International Funding II SA1 |
02/15/20 | 4.875 | 12,232,472 | ||||||||||||||
32,965,000 | Vonovia Finance BV1 |
10/02/17 | 3.200 | 33,336,681 | ||||||||||||||
45,569,153 | ||||||||||||||||||
REAL ESTATE INVESTMENT TRUSTS (1.5%) |
||||||||||||||||||
15,400,000 | Digital Realty Trust LP |
10/01/20 | 3.400 | 15,972,295 | ||||||||||||||
25,330,000 | Select Income REIT |
02/01/22 | 4.150 | 25,622,941 | ||||||||||||||
22,739,000 | Welltower, Inc. |
09/15/17 | 4.700 | 23,372,895 | ||||||||||||||
7,710,000 | Welltower, Inc. |
03/15/18 | 2.250 | 7,777,925 | ||||||||||||||
72,746,056 | ||||||||||||||||||
RETAIL (0.5%) |
||||||||||||||||||
25,260,000 | Wal-Mart Stores, Inc.2 |
06/01/18 | 5.524 | 25,914,714 | ||||||||||||||
TELECOMMUNICATIONS (1.8%) |
||||||||||||||||||
50,130,000 | BellSouth LLC1 |
04/26/21 | 4.400 | 51,018,304 | ||||||||||||||
8,760,000 | Sprint Spectrum Co. LLC/ Sprint Spectrum Co. II LLC/ Sprint Spectrum Co. III LLC1 |
03/20/23 | 3.360 | 8,841,906 | ||||||||||||||
28,465,000 | Verizon Communications, Inc. |
06/09/17 | 1.350 | 28,493,408 | ||||||||||||||
88,353,618 | ||||||||||||||||||
Total Corporate Bonds (Identified cost $1,561,347,924) |
1,549,072,560 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
LOAN PARTICIPATIONS AND ASSIGNMENTS (9.0%) |
||||||||||||||||||
$ 10,889,388 | Aria Energy Operating LLC2 |
05/27/22 | 5.500 | % | $ | 10,549,095 | ||||||||||||
18,777,829 | Astoria Energy LLC Term B2 |
12/24/21 | 5.000 | 18,449,217 | ||||||||||||||
9,727,649 | AT&T, Inc. Term A2 |
03/02/18 | 1.839 | 9,715,489 | ||||||||||||||
31,711,804 | Avago Technologies Cayman Holdings, Ltd. Term B32 |
02/01/23 | 3.535 | 32,024,482 | ||||||||||||||
24,656,085 | Charter Communications Operating LLC. (CCO Safari LLC) Term H2 |
08/24/21 | 3.250 | 24,742,382 | ||||||||||||||
10,000,000 | Dell International LLC Term A22 |
09/07/21 | 2.790 | 9,902,300 | ||||||||||||||
24,350,000 | Dell International LLC Term B2 |
09/07/23 | 4.000 | 24,516,311 | ||||||||||||||
44,844,330 | Delos Finance S.a.r.l2 |
03/06/21 | 3.588 | 45,096,803 | ||||||||||||||
18,645,043 | Eastern Power LLC (TPF II LC, LLC)2 |
10/02/21 | 5.000 | 18,822,171 | ||||||||||||||
4,835,639 | Entergy Rhode Island Energy LP Term B2 |
12/19/22 | 5.750 | 4,702,659 | ||||||||||||||
33,931,749 | Freeport-McMoRan Copper & Gold, Inc. (PT Freeport Indonesia)2 |
05/31/18 | 3.290 | 33,783,467 | ||||||||||||||
15,860,991 | HCA, Inc. Term B62 |
03/17/23 | 3.784 | 16,021,663 | ||||||||||||||
1,960,000 | Mallinckrodt International Finance S.A. Term B2 |
03/19/21 | 3.338 | 1,960,000 | ||||||||||||||
14,605,549 | Mallinckrodt International Finance S.A. Term B12 |
03/19/21 | 3.588 | 14,569,035 | ||||||||||||||
42,000,000 | Medtronic, Inc.2 |
01/26/18 | 1.409 | 41,632,500 | ||||||||||||||
43,090,185 | RPI Finance Trust B52 |
10/14/22 | 3.035 | 43,459,468 | ||||||||||||||
41,000,000 | Verizon Communications, Inc.2 |
07/31/19 | 1.796 | 40,914,720 | ||||||||||||||
40,299,000 | Western Digital Corporation Term B12 |
04/29/23 | 4.500 | 40,730,602 | ||||||||||||||
Total Loan Participations and Assignments (Identified cost $428,167,892) |
431,592,364 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (10.3%) |
||||||||||||||||||
$ 14,250,000 | Baylor Health Care System, Revenue Bonds2 |
11/15/25 | 0.630 | % | $ | 13,476,767 | ||||||||||||
5,000,000 | Butler County General Authority, Revenue Bonds, AGM5 |
11/03/16 | 0.700 | 5,000,000 | ||||||||||||||
23,635,000 | City of New York, General Obligation Bonds5 |
11/02/16 | 0.620 | 23,635,000 | ||||||||||||||
10,800,000 | City of New York, General Obligation Bonds5 |
11/02/16 | 0.620 | 10,800,000 | ||||||||||||||
49,715,000 | City of Raleigh, North Carolina, Certificates of Participation5 |
11/02/16 | 0.590 | 49,715,000 | ||||||||||||||
7,000,000 | City of Charlotte, North Carolina, Certificates of Participation5 |
11/03/16 | 0.590 | 7,000,000 | ||||||||||||||
6,900,000 | City of Portland, Oregon, General Obligation Bonds2 |
06/01/19 | 0.617 | 6,796,328 | ||||||||||||||
5,250,000 | City of Portland, Oregon, General Obligation Bonds2 |
06/01/19 | 0.632 | 5,171,103 | ||||||||||||||
52,300,000 | County of Franklin, Ohio, Revenue Bonds5 |
11/02/16 | 0.620 | 52,300,000 | ||||||||||||||
23,000,000 | County of Fulton, General Obligation Bonds |
12/30/16 | 1.000 | 23,014,260 | ||||||||||||||
30,000,000 | County of King, Washington, Revenue Bonds5 |
11/16/16 | 2.000 | 30,014,700 | ||||||||||||||
34,600,000 | Illinois Finance Authority, Revenue Bonds5 |
11/03/16 | 0.580 | 34,600,000 | ||||||||||||||
5,000,000 | New Jersey Economic Development Authority, Revenue Bonds2 |
02/01/17 | 1.530 | 5,000,950 | ||||||||||||||
20,940,000 | New Jersey Economic Development Authority, Revenue Bonds, NPFG6 |
02/15/17 | 0.000 | 20,836,347 | ||||||||||||||
28,005,000 | New Jersey Economic Development Authority, Revenue Bonds, AGM6 |
02/15/18 | 0.000 | 27,257,547 | ||||||||||||||
4,360,000 | New Jersey Economic Development Authority, Revenue Bonds |
06/15/20 | 5.000 | 4,778,909 | ||||||||||||||
3,600,000 | New York State Energy Research & Development Authority, Revenue Bonds, NPFG2 |
12/01/20 | 1.295 | 3,389,594 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
$ 18,000,000 | New York State Housing Finance Agency, Revenue Bonds5 |
11/02/16 | 0.650 | % | $ | 18,000,000 | ||||||||||||
49,900,000 | New York State Housing Finance Agency, Revenue Bonds5 |
11/02/16 | 0.650 | 49,900,000 | ||||||||||||||
41,435,000 | Orlando Utilities Commission, Revenue Bonds5 |
11/02/16 | 0.600 | 41,435,000 | ||||||||||||||
7,140,000 | Pennsylvania Industrial Development Authority, Revenue Bonds1 |
07/01/21 | 2.967 | 7,247,171 | ||||||||||||||
3,445,000 | School District of Philadelphia, General Obligation Bonds |
09/01/17 | 2.009 | 3,400,939 | ||||||||||||||
2,330,000 | School District of Philadelphia, General Obligation Bonds |
09/01/18 | 2.512 | 2,264,480 | ||||||||||||||
15,355,000 | State of Illinois, General Obligation Bonds |
03/01/17 | 5.365 | 15,557,225 | ||||||||||||||
7,110,000 | State of Illinois, General Obligation Bonds, AGM |
03/01/18 | 5.200 | 7,386,792 | ||||||||||||||
17,300,000 | State of Illinois, General Obligation Bonds |
07/01/21 | 6.200 | 18,636,252 | ||||||||||||||
16,650,000 | Tobacco Settlement Financing Corp., Revenue Bonds6 |
06/01/41 | 0.000 | 4,430,565 | ||||||||||||||
Total Municipal Bonds (Identified cost $489,543,373) |
491,044,929 | |||||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (0.6%) |
||||||||||||||||||
162,966 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 |
04/01/36 | 2.841 | 172,935 | ||||||||||||||
110,185 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 |
12/01/36 | 2.615 | 116,270 | ||||||||||||||
72,253 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 |
01/01/37 | 2.620 | 76,387 | ||||||||||||||
128,466 | Federal Home Loan Mortgage Corp. (FHLMC) Non Gold Guaranteed2 |
02/01/37 | 2.914 | 136,749 | ||||||||||||||
11,077,189 | Federal National Mortgage Association (FNMA) |
07/01/35 | 5.000 | 12,358,720 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (continued) |
||||||||||||||||||
$ 754,772 | Federal National Mortgage Association (FNMA) |
11/01/35 | 5.500 | % | $ | 855,998 | ||||||||||||
95,001 | Federal National Mortgage Association (FNMA)2 |
07/01/36 | 3.229 | 100,951 | ||||||||||||||
171,586 | Federal National Mortgage Association (FNMA)2 |
09/01/36 | 2.945 | 180,085 | ||||||||||||||
145,941 | Federal National Mortgage Association (FNMA)2 |
01/01/37 | 2.792 | 154,718 | ||||||||||||||
655,721 | Federal National Mortgage Association (FNMA) |
08/01/37 | 5.500 | 744,889 | ||||||||||||||
7,456,109 | Federal National Mortgage Association (FNMA) |
08/01/37 | 5.500 | 8,489,948 | ||||||||||||||
3,358,980 | Federal National Mortgage Association (FNMA) |
06/01/40 | 6.500 | 3,937,417 | ||||||||||||||
20,626 | Government National Mortgage Association (GNMA)2 |
08/20/29 | 2.125 | 21,392 | ||||||||||||||
Total U.S. Government Agency Obligations (Identified cost $26,013,118) |
27,346,459 | |||||||||||||||||
CERTIFICATES OF DEPOSIT (5.4%) |
||||||||||||||||||
54,200,000 | Bank of Nova Scotia2 |
05/30/17 | 1.279 | 54,272,628 | ||||||||||||||
54,300,000 | Canadian Imperial Bank of Commerce2 |
08/31/17 | 1.342 | 54,385,468 | ||||||||||||||
45,200,000 | Skandinaviska Enskilda Banken AB2 |
05/31/17 | 1.174 | 45,219,843 | ||||||||||||||
54,200,000 | Svenska Handelsbanken AB2 |
05/30/17 | 1.253 | 54,284,660 | ||||||||||||||
50,000,000 | Toronto-Dominion Bank2 |
09/01/17 | 1.342 | 50,078,700 | ||||||||||||||
Total Certificates of Deposit (Identified cost $257,900,000) |
258,241,299 | |||||||||||||||||
TIME DEPOSITS (0.6%) |
||||||||||||||||||
30,000,000 | Wells Fargo |
11/01/16 | 0.350 | 30,000,000 | ||||||||||||||
Total Time Deposits (Identified cost $30,000,000) |
30,000,000 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
U.S. TREASURY BILLS (0.7%) |
||||||||||||||||||
$ 8,000,000 | U.S. Treasury Bill6,7 |
11/03/16 | 0.000 | % | $ | 7,999,829 | ||||||||||||
24,000,000 | U.S. Treasury Bill6 |
01/12/17 | 0.000 | 23,987,352 | ||||||||||||||
Total U.S. Treasury Bills (Identified cost $31,983,989) |
31,987,181 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $4,848,351,954)8 | 101.2 | % | $ | 4,835,258,234 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (1.2 | )% | (55,988,964 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 4,779,269,270 |
1 | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities owned at October 31, 2016 was $2,252,942,691 or 47.1% of net assets. Unless otherwise noted, these securities are not considered illiquid. |
2 | Variable rate instrument. Interest rates change on specific dates (such as coupon or interest payment date). The yield shown represents the October 31, 2016 coupon or interest rate. |
3 | The Funds Investment Adviser has deemed this security to be illiquid upon the SEC definition of an illiquid security. |
4 | Trust preferred security. |
5 | Variable rate demand note. The maturity date reflects the demand repayment dates. The interest rate changes on specific dates (such as coupon or interest payment date). The yield shown represents the coupon or interest rate as of October 31, 2016. |
6 | Security issued with zero coupon. Income is recognized through accretion of discount. |
7 | All or a portion of this security is held at the broker as collateral for open futures contracts. |
8 | The aggregate cost for federal income tax purposes is $4,848,351,999, the aggregate gross unrealized appreciation is $27,062,124 and the aggregate gross unrealized depreciation is $40,155,889 resulting in net unrealized depreciation of $13,093,765. |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
|
Level 1 unadjusted quoted prices in active markets for identical investments. |
|
Level 2 significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Investments, at value |
Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* |
Significant Other Observable Inputs (Level 2)* |
Significant Unobservable Inputs (Level 3)* |
Balance as of October 31, 2016 |
||||||||||||||
Asset Backed Securities |
$ | | $ | 1,575,377,510 | $ | 12,548,798 | $ | 1,587,926,308 | ||||||||||
Commercial Mortgage Backed Securities |
| 428,047,134 | | 428,047,134 | ||||||||||||||
Corporate Bonds |
45,230,245 | 1,503,842,315 | | 1,549,072,560 | ||||||||||||||
Loan Participations and Assignments |
| 431,592,364 | | 431,592,364 | ||||||||||||||
Municipal Bonds |
| 491,044,929 | | 491,044,929 | ||||||||||||||
U.S. Government Agency Obligations |
| 27,346,459 | | 27,346,459 | ||||||||||||||
Certificates of Deposit |
| 258,241,299 | | 258,241,299 | ||||||||||||||
Time Deposits |
| 30,000,000 | | 30,000,000 | ||||||||||||||
U.S. Treasury Bills |
| 31,987,181 | | 31,987,181 | ||||||||||||||
Total Investments, at value |
$ | 45,230,245 | $ | 4,777,479,191 | $ | 12,548,798 | $ | 4,835,258,234 | ||||||||||
Other Financial Instruments, at value |
||||||||||||||||||
Financial Futures Contracts |
$ | 2,649,997 | $ | | $ | | $ | 2,649,997 | ||||||||||
Other Financial Instruments, at value |
$ | 2,649,997 | $ | | $ | | $ | 2,649,997 |
* |
The Funds policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Level 1 and Level 2 during the period ended October 31, 2016. |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Asset backed Securities |
||||||
Balance as of October 31, 2015 |
$ | 60,734,353 | ||||
Purchases |
| |||||
Sales / Paydowns |
(21,663,829 | ) | ||||
Realized gains (losses) |
33 | |||||
Change in unrealized appreciation (depreciation) |
(4,525,905 | ) | ||||
Amortization |
(641 | ) | ||||
Transfers from Level 3* |
(60,734,353 | ) | ||||
Transfers to Level 3* |
38,739,140 | |||||
Balance as of October 31, 2016 |
$ | 12,548,798 |
* |
Transfers are reflected at the value of the security at the beginning of the period. Transfers from Level 2 to Level 3 were due to a reduction in the availability of significant observable inputs to determine fair value. Transfers from Level 3 to Level 2 were due to an increase in the availability of significant observable inputs to determine fair value. |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2016
ASSETS: |
||||
Investments in securities, at value (Identified cost $4,848,351,954) |
$ | 4,835,258,234 | ||
Cash |
16,429,735 | |||
Receivables for: |
||||
Interest |
17,068,045 | |||
Shares sold |
1,713,400 | |||
Investments sold |
28,264 | |||
Investment advisory and administrative fees waiver reimbursement |
1,424 | |||
Prepaid assets |
46,265 | |||
Total Assets |
4,870,545,367 | |||
LIABILITIES: |
||||
Payables for: |
||||
Investments purchased |
84,339,911 | |||
Shares redeemed |
3,743,806 | |||
Investment advisory and administrative fees |
2,283,186 | |||
Futures variation margin on open contracts |
410,923 | |||
Custody and fund accounting fees |
275,144 | |||
Periodic distributions |
101,502 | |||
Professional fees |
72,863 | |||
Shareholder servicing fees |
13,191 | |||
Distributor fees |
7,287 | |||
Transfer agent fees |
2,845 | |||
Board of Trustees fees |
786 | |||
Accrued expenses and other liabilities |
24,653 | |||
Total Liabilities |
91,276,097 | |||
NET ASSETS |
$ | 4,779,269,270 | ||
Net
Assets Consist of: |
||||
Paid-in capital |
$ | 4,852,253,217 | ||
Undistributed net investment income |
1,631,645 | |||
Accumulated net realized loss on investments in securities and futures contracts |
(64,171,869 | ) | ||
Net unrealized appreciation/(depreciation) on investments in securities and futures contracts |
(10,443,723 | ) | ||
Net
Assets |
$ | 4,779,269,270 | ||
NET ASSET VALUE AND OFFERING PRICE PER SHARE |
||||
CLASS N SHARES |
||||
($42,503,858 ÷ 4,194,118 shares outstanding) |
$10.13 | |||
CLASS I SHARES |
||||
($4,736,765,412 ÷ 467,597,885 shares outstanding) |
$10.13 |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
STATEMENT OF OPERATIONS
For the year ended October 31, 2016
NET INVESTMENT INCOME: |
||||||
Income: |
||||||
Dividends |
$ | 3,388,458 | ||||
Interest and other income |
119,354,742 | |||||
Total Income |
122,743,200 | |||||
Expenses: |
||||||
Investment advisory and administrative fees |
12,908,505 | |||||
Shareholder servicing fees |
979,326 | |||||
Custody and fund accounting fees |
395,460 | |||||
Professional fees |
90,698 | |||||
Distributor fees |
72,015 | |||||
Board of Trustees fees |
54,497 | |||||
Transfer agent fees |
30,177 | |||||
Miscellaneous expenses |
57,781 | |||||
Total Expenses |
14,588,459 | |||||
Expense offset arrangement |
(38,978 | ) | ||||
Investment advisory and administrative fees waiver |
(45,079 | ) | ||||
Net Expenses |
14,504,402 | |||||
Net Investment Income |
108,238,798 | |||||
NET REALIZED AND UNREALIZED LOSS: |
||||||
Net realized loss on investments in securities |
(8,191,249 | ) | ||||
Net realized loss on futures contracts |
(13,354,770 | ) | ||||
Net realized loss on investments in securities and futures contracts |
(21,546,019 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
18,625,942 | |||||
Net change in unrealized appreciation/(depreciation) on futures contracts |
1,391,232 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts |
20,017,174 | |||||
Net Realized and Unrealized Loss |
(1,528,845 | ) | ||||
Net Increase in Net Assets Resulting from Operations |
$ | 106,709,953 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, |
||||||||||
2016 |
2015 |
|||||||||
INCREASE (DECREASE) IN NET ASSETS: |
||||||||||
Operations: |
||||||||||
Net investment income |
$ | 108,238,798 | $ | 94,551,595 | ||||||
Net realized loss on investments in securities and futures contracts |
(21,546,019 | ) | (41,411,373 | ) | ||||||
Net change in unrealized appreciation/(depreciation) on investments in securities and futures contracts |
20,017,174 | (40,993,492 | ) | |||||||
Net increase in net assets resulting from operations |
106,709,953 | 12,146,730 | ||||||||
Dividends and distributions declared: |
||||||||||
From net investment income: |
||||||||||
Class N |
(8,926,897 | ) | (46,344,802 | ) | ||||||
Class I |
(98,807,189 | ) | (47,959,131 | ) | ||||||
Total dividends and distributions declared |
(107,734,086 | ) | (94,303,933 | ) | ||||||
Share transactions: |
||||||||||
Proceeds from sales of shares* |
4,430,445,855 | 2,179,033,729 | ||||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions |
73,615,791 | 92,942,518 | ||||||||
Cost of shares redeemed* |
(4,434,265,957 | ) | (2,651,777,342 | ) | ||||||
Net increase (decrease) in net assets resulting from share transactions |
69,795,689 | (379,801,095 | ) | |||||||
Total increase (decrease) in net assets |
68,771,556 | (461,958,298 | ) | |||||||
NET ASSETS: |
||||||||||
Beginning of year |
4,710,497,714 | 5,172,456,012 | ||||||||
End of year (including undistributed net investment income of $1,631,645 and $505,783, respectively) |
$ | 4,779,269,270 | $ | 4,710,497,714 |
* |
Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each
year.
For the years ended October 31, |
||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
||||||||||||||||||
Net asset value, beginning of year |
$ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||
Net investment income1 |
0.19 | 0.18 | 0.14 | 0.15 | 0.18 | |||||||||||||||||
Net realized and unrealized gain (loss) |
(0.00 | )2 | (0.17 | ) | (0.01 | ) | (0.06 | ) | 0.14 | |||||||||||||
Total income from investment operations |
0.19 | 0.01 | 0.13 | 0.09 | 0.32 | |||||||||||||||||
Less dividends and distributions: |
||||||||||||||||||||||
From net investment income |
(0.20 | ) | (0.18 | ) | (0.14 | ) | (0.15 | ) | (0.18 | ) | ||||||||||||
From net realized gains |
| | (0.03 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||||
Total dividends and distributions |
(0.20 | ) | (0.18 | ) | (0.17 | ) | (0.18 | ) | (0.22 | ) | ||||||||||||
Net asset value, end of year |
$ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | ||||||||||||
Total return |
1.90 | % | 0.10 | % | 1.32 | % | 0.82 | % | 3.13 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||
Net assets, end of year (in millions) |
$ | 42 | $ | 2,557 | $ | 2,625 | $ | 2,170 | $ | 1,776 | ||||||||||||
Ratio of expenses to average net assets before reductions |
0.49 | % | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | % | ||||||||||||
Fee waiver |
0.01 | %3 | | % | | % | | % | | % | ||||||||||||
Expense offset arrangement |
0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | 0.00 | %4 | ||||||||||||
Ratio of expenses to average net assets after reductions |
0.48 | % | 0.48 | % | 0.48 | % | 0.49 | % | 0.50 | % | ||||||||||||
Ratio of net investment income to average net assets |
1.91 | % | 1.75 | % | 1.36 | % | 1.44 | % | 1.75 | % | ||||||||||||
Portfolio turnover rate |
53 | % | 46 | % | 35 | % | 48 | % | 38 | % |
1 | Calculated using average shares outstanding for the year. |
2 | Less than $0.01 |
3 | The ratio of expenses to average net assets for the year ended October 31, 2016, reflect fees reduced as result of voluntary operating expense limitation of the share class to 0.48%. The agreement is effective for the period beginning on December 29, 2015 and can be changed at any time at the sole discretion of the Investment Advisor. For the year ended October 31, 2016, the waived fees were $45,079. |
4 | Less than 0.01% |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH LIMITED DURATION FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each
year.
For the years ended October 31, |
||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
||||||||||||||||||
Net asset value, beginning of year |
$ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | $ | 10.34 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||
Net investment income1 |
0.22 | 0.20 | 0.16 | 0.17 | 0.20 | |||||||||||||||||
Net realized and unrealized gain (loss) |
(0.01 | ) | (0.17 | ) | (0.01 | ) | (0.06 | ) | 0.14 | |||||||||||||
Total income from investment operations |
0.21 | 0.03 | 0.15 | 0.11 | 0.34 | |||||||||||||||||
Less dividends and distributions: |
||||||||||||||||||||||
From net investment income |
(0.22 | ) | (0.20 | ) | (0.16 | ) | (0.17 | ) | (0.20 | ) | ||||||||||||
From net realized gains |
| | (0.03 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||||
Total dividends and distributions |
(0.22 | ) | (0.20 | ) | (0.19 | ) | (0.20 | ) | (0.24 | ) | ||||||||||||
Net asset value, end of year |
$ | 10.13 | $ | 10.14 | $ | 10.31 | $ | 10.35 | $ | 10.44 | ||||||||||||
Total return |
2.13 | % | 0.30 | % | 1.52 | % | 1.01 | % | 3.31 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||
Net assets, end of year (in millions) |
$ | 4,737 | $ | 2,153 | $ | 2,547 | $ | 1,448 | $ | 1,165 | ||||||||||||
Ratio of expenses to average net assets before reductions |
0.27 | % | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | ||||||||||||
Expense offset arrangement |
0.00 | %2 | 0.00 | %2 | 0.00 | %2 | 0.00 | %2 | 0.00 | %2 | ||||||||||||
Ratio of expenses to average net assets after reductions |
0.27 | % | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | ||||||||||||
Ratio of net investment income to average net assets |
2.21 | % | 1.94 | % | 1.56 | % | 1.63 | % | 1.93 | % | ||||||||||||
Portfolio turnover rate |
53 | % | 46 | % | 35 | % | 48 | % | 38 | % |
1 | Calculated using average shares outstanding for the year. |
2 | Less than 0.01% |
The accompanying notes are an integral part of these
financial statements.
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
1. |
Organization. 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 1940 Act), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on December 22, 2000. The Fund offers Class N and Class I shares. Class N and Class I shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Class I shares automatically convert to any other share class of the Fund. As of October 31, 2016, there were six series of the Trust. |
2. |
Significant Accounting Policies. The Funds financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. |
Valuation of Investments. Bonds and other fixed income securities, including restricted securities (other than short-term obligations but including listed issues) are valued at their most recent bid prices (sales price if the principal market is an exchange) in the principal market in which such securities are normally traded, on the basis of valuations furnished by a pricing service, use of which has been approved by the Board. In making such valuations, the pricing service utilizes both dealer supplied valuations and electronic data processing techniques, which take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, without exclusive reliance upon quoted prices, or exchange or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of such securities. Future contracts held by the Fund are valued daily at the official settlement price of the exchange on which it is traded. |
B. |
Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified |
|
|
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
cost method. Interest income is accrued daily and consists of interest accrued, discount earned (including, if any, both original issue and market discount) and premium amortization on the investments of the Fund. Investment income is recorded net of any foreign taxes withheld where recovery of such tax is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of the interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured. |
C. |
Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. |
Financial Futures Contracts. The Fund may enter into open futures contracts in order to hedge against anticipated future changes in interest rates which otherwise might either adversely affect the value of securities held for the Fund or adversely affect the prices of securities that are intended to be purchased at a later date for the Fund. The contractual amount of the futures contracts represents the investment the Fund has in a particular contract and does not necessarily represent the amounts potentially subject to risk of loss. Trading in futures contracts involves, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The measurement of risk associated with futures contracts is meaningful only when all related and offsetting transactions are considered. Gains and losses are realized upon the expiration or closing of the futures contracts. |
Description |
Number of Contracts |
Expiration Date |
Market Value |
Notional Amount |
Unrealized Gain/(Loss) |
|||||||||||||||||
Contracts to Sell: |
||||||||||||||||||||||
U.S. Treasury 2-Year Notes |
3,300 | December 2016 | $ | 719,864,066 | $ | 720,143,750 | $ | 279,684 | ||||||||||||||
U.S. Treasury 5-Year Notes |
4,100 | December 2016 | 495,267,187 | 497,637,500 | 2,370,313 | |||||||||||||||||
$ | 2,649,997 |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
Asset Derivatives |
Liability Derivatives |
||||||||||||||||||
Risk |
Statement of Assets and Liabilities Location |
Fair Value |
Statement of Assets and Liabilities Location |
Fair Value |
|||||||||||||||
Interest Rate Risk |
Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. |
$ | 2,649,997 | * | Net unrealized appreciation/(depreciation) on investments in securities and futures contracts. |
$ | | ||||||||||||
Total |
$ | 2,649,997 | $ | |
* |
Includes cumulative appreciation of futures contracts as reported in the Statement of Assets and Liabilities and Notes to Financial Statements. Only the current days variation margin is reported within the Statement of Assets and Liabilities. |
Interest Rate Risk |
||||||
Net Realized Gain/(Loss) on Derivatives Futures Contracts |
$ | (13,354,770 | ) | |||
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Futures Contracts |
$ | 1,391,232 |
E. |
Rule 144A Securities. The Fund may purchase securities that are not registered under the Securities Act of 1933, as amended (1933 Act) but that can be sold to qualified institutional buyers in accordance with the requirements stated in Rule 144A under the 1933 Act (Rule 144A Securities). A Rule 144A Security may be considered illiquid and therefore subject to the 15% limitation on the purchase of illiquid securities, unless it is determined on an ongoing basis that an adequate trading market exists for the security, which is the case for the Fund. Guidelines have been adopted and the daily function of determining and monitoring liquidity of Rule 144A Securities has been delegated to the investment adviser. All relevant factors will be considered in determining |
|
|
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
the liquidity of Rule 144A Securities and all investments in Rule 144A Securities will be carefully monitored. Information regarding Rule 144A Securities is included at the end of the Portfolio of Investments. |
F. |
Loan Participations and Assignments. The Fund may invest in loan participations and assignments, which include institutionally traded floating and fixed-rate debt securities generally acquired as an assignment from another holder of, or participation interest in, loans originated by a bank or financial institution (the Lender) that acts as agent for all holders. Some loan participations and assignments may be purchased on a when-issued basis. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with interest rate changes and/or issuer credit quality, and unexpected changes in such rates could result in losses to the Fund. The interest rates paid on a floating rate security in which the Fund invests generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year London Interbank Offered Rate (LIBOR). LIBOR is a short-term interest rate that banks charge one another and is generally representative of the most competitive and current cash rates. |
G. |
Federal Income Taxes. It is the Trusts policy to comply with the requirements of the Internal Revenue Code (the 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. The Fund files a tax return annually using tax accounting methods required under provisions of the Code, which may differ from GAAP, which is the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported in these financial statements may differ from that reported on the Funds tax return, due to certain book-to-tax timing differences such as losses deferred due to wash sale transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
return of capital. Permanent differences are reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV. |
H. |
Dividends and Distributions to Shareholders. Dividends and distributions from net investment income to shareholders, if any, are paid monthly and are recorded on the ex-dividend date. Distributions from net capital gains, if any, are generally declared and paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amount of $8,926,897 and $98,807,189 to Class N and Class I shareholders, respectively, during the year ended October 31, 2016. |
Distributions paid
from: |
||||||||||||||||||||||
Ordinary income |
Net long-term capital gain |
Total taxable distributions |
Tax return of capital |
Total distributions paid |
||||||||||||||||||
2016: |
$ | 107,734,086 | | $ | 107,734,086 | | $ | 107,734,086 | ||||||||||||||
2015: |
94,303,933 | | 94,303,933 | | 94,303,933 |
|
|
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
Components of accumulated
earnings/(deficit): |
||||||||||||||||||||||||||||||
Undistributed ordinary income |
Undistributed long-term capital gain |
Accumulated earnings |
Accumulated capital and other losses |
Other book/tax temporary differences |
Unrealized appreciation/ (depreciation) |
Total accumulated earnings/ (deficit) |
||||||||||||||||||||||||
2016: |
$ | 1,631,645 | | $ | 1,631,645 | $ | (61,521,827 | ) | $ | (2,650,042 | ) | $ | (10,443,723 | ) | $ | (72,983,947 | ) | |||||||||||||
2015: |
1,490,762 | | 1,490,762 | (40,745,890 | ) | (2,243,789 | ) | (30,460,897 | ) | (71,959,814 | ) |
I. |
Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
3. |
Fees and Other Transactions with Affiliates. |
A. |
Investment Advisory and Administrative Fees. Under a combined Investment Advisory and Administrative Services Agreement (Agreement) with the Trust, Brown Brothers Harriman & Co. (BBH) through a separately identifiable department (SID or Investment Adviser) provides |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Fund pays a combined fee for investment advisory and administration services calculated daily and paid monthly at an annual rate equivalent to 0.30% per annum on the first $1,000,000,000 of the Funds average daily net assets and 0.25% per annum on the Funds average daily net assets over $1,000,000,000. For the year ended October 31, 2016, the Fund incurred $12,908,505 for services under the Agreement. |
B. |
Investment Advisory and Administrative Fee Waivers. Effective December 29, 2015, the Investment Adviser has voluntarily agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary courses of the Funds business) of Class N to 0.48%. This is a voluntary waiver that can be changed at any time at the sole discretion of the Investment Adviser. For year ended October 31, 2016, the Investment Adviser waived fees in the amount of $45,079 for Class N. |
C. |
Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20% of Class N shares average daily net assets. For the year ended October 31, 2016, Class N shares of the Fund incurred $979,326 in shareholder servicing fees. |
D. |
Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Funds cash and investments and calculates the Funds daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Funds net asset value. For the year ended October 31, 2016, the Fund incurred $395,460 in custody and fund accounting fees. These fees for the Fund were reduced by $38,978 as a result of an expense offset arrangement with the Funds custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Funds expenses. 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 pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for the year ended October 31, 2016, was $1,407. This amount is presented under the line item Custody and fund accounting fees in the Statements of Operations. |
E. |
Board of Trustees Fees. Each Trustee who is not an interested person as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the year ended October 31, 2016, the Fund incurred $54,497 in independent Trustee compensation and reimbursements. |
|
|
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
4. |
Investment Transactions. For the year ended October 31, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, were $2,096,838,736 and $2,117,235,859, respectively. |
5. |
Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N shares and Class I shares of beneficial interest, at no par value. Transactions in Class N and Class I shares were as follows: |
For the year ended October 31, 2016 |
For the year ended October 31, 2015 |
||||||||||||||||||
Shares |
Dollars |
Shares |
Dollars |
||||||||||||||||
Class N |
|||||||||||||||||||
Shares sold |
11,203,221 | $ | 113,390,603 | 101,437,734 | $ | 1,038,660,135 | |||||||||||||
Shares issued in connection with reinvestments of dividends |
855,227 | 8,645,267 | 4,501,309 | 46,026,061 | |||||||||||||||
Shares redeemed |
(259,973,297 | ) | (2,623,811,320 | ) | (108,447,428 | ) | (1,109,707,589 | ) | |||||||||||
Net decrease |
(247,914,849 | ) | $ | (2,501,775,450 | ) | (2,508,385 | ) | $ | (25,021,393 | ) | |||||||||
Class I |
|||||||||||||||||||
Shares sold |
427,925,868 | $ | 4,317,055,252 | 111,233,476 | $ | 1,140,373,594 | |||||||||||||
Shares issued in connection with reinvestments of dividends |
6,454,769 | 64,970,524 | 4,588,432 | 46,916,457 | |||||||||||||||
Shares redeemed |
(179,053,181 | ) | (1,810,454,637 | ) | (150,695,776 | ) | (1,542,069,753 | ) | |||||||||||
Net increase (decrease) |
255,327,456 | $ | 2,571,571,139 | (34,873,868 | ) | $ | (354,779,702 | ) |
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
6. |
Principal Risk Factors and Indemnifications. |
A. |
Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Funds prospectus, including but not limited to, those described below: |
|
|
BBH LIMITED DURATION FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
B. |
Indemnifications. Under the Trusts organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. |
Subsequent Events. Management has evaluated events and transactions that have occurred since October 31, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES
October 31, 2016 (unaudited)
|
|
BBH LIMITED DURATION FUND
DISCLOSURE OF FUND EXPENSES (continued)
October 31, 2016 (unaudited)
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class N |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,016 | $ | 2.43 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,023 | $ | 2.44 |
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class I |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,017 | $ | 1.37 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,024 | $ | 1.37 |
1 | Expenses are equal to the Funds annualized expense ratio of 0.48% and 0.27% for Class N and I shares, respectively, 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 purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST
October 31, 2016 (unaudited)
|
|
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
BBH LIMITED DURATION FUND
CONFLICTS OF INTEREST (continued)
October 31, 2016 (unaudited)
|
|
BBH LIMITED DURATION FUND
ADDITIONAL FEDERAL TAX INFORMATION
October 31, 2016 (unaudited)
TRUSTEES AND OFFICERS OF BBH LIMITED DURATION
FUND
(unaudited)
Name and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
|
Independent Trustees |
||||||||||
H. Whitney Wagner Born: 1956 |
Chairman of the Board and Trustee |
Chairman Since 2014; Trustee Since 2007 and 2006-2007 with the Predecessor Trust |
President, Clear Brook Advisors, a registered investment advisor. |
6 |
None. |
|||||
Andrew S. Frazier Born: 1948 |
Trustee |
Since 2010 |
Consultant to Western World Insurance Group, Inc. (WWIG) (January 2010 to January 2012). |
6 |
Director of WWIG. |
|||||
Mark M. Collins Born: 1956 |
Trustee |
Since 2011 |
Partner of Brown Investment Advisory Incorporated, a registered investment advisor. |
6 |
Chairman of Dillon Trust Company. |
|||||
John M. Tesoro Born: 1952 |
Trustee |
Since 2014 |
Partner, Certified Public Accountant, KPMG LLP (Retired in 2012). |
6 |
Trustee, Bridge Builder Trust (8 Funds); Director, Teton Advisors, Inc. (a registered investment adviser). |
|
|
TRUSTEES AND OFFICERS OF BBH LIMITED DURATION
FUND
(unaudited)
Name, Address and Birth Year |
|
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
Interested Trustees |
||||||||||
Susan C. Livingston+ 50 Post Office Square Boston, MA 02110 Born: 1957 |
Trustee |
Since 2011 |
Partner (since 1998) and Senior Client Advocate (since 2010) for BBH&Co.; Director of BBH Luxembourg S.C.A. (since
1992). |
6 |
None. |
|||||
John A. Gehret+ 140 Broadway New York, NY 10005 Born: 1959 |
Trustee |
Since 2011 |
Limited Partner of BBH&Co. (2012-present); General Partner of BBH&Co. (1998 to 2011). |
6 |
None. |
TRUSTEES AND OFFICERS OF BBH LIMITED DURATION
FUND
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s)
During Past 5 Years |
|
Officers |
||||||
Jean-Pierre Paquin 140 Broadway New York, NY 10005 Born: 1973 |
President and Principal Executive Officer |
Since 2016 |
Partner of BBH&Co. since 2015; joined BBH&Co. in 1996. |
|||
Daniel Greifenkamp 140 Broadway New York, NY 10005 Born: 1969 |
Vice
President |
Since 2016 |
Managing Director of BBH&Co. since 2014; joined BBH&Co. in 2011. |
|||
Charles H. Schreiber 140 Broadway New York, NY 10005 Born: 1957 |
Treasurer and Principal Financial Officer |
Since 2007 2006-2007 with the Predecessor Trust |
Senior Vice President of BBH&Co. since 2001; joined BBH&Co. in 1999. |
|||
Paul F. Gallagher 140 Broadway New York, NY 10005 Born: 1959 |
Chief Compliance Officer (CCO) |
Since 2015 |
Senior Vice President of BBH&Co. since September 2015; Executive Director, Counsel, Morgan Stanley Smith Barney LLC
(2009-September 2015). |
|||
Keith M. Kelley 140 Broadway New York, NY 10005 Born: 1983 |
Anti-Money Laundering Officer (AMLO) |
Since 2016 |
Vice President of BBH&Co. since February 2016; joined BBH&Co. in 2016; Director, Legal and Compliance, Morgan Stanley Smith
Barney LLC (2014-February 2016); Compliance Manager, State Street Corporation (2013-2014); Associate, J.P. Morgan Chase & Co.
(2011-2013). |
|||
Suzan Barron 50 Post Office Square Boston, MA 02110 Born: 1964 |
Secretary |
Since 2009 |
Senior Vice President and Senior Investor Services Counsel, BBH&Co. since 2005. |
|
|
TRUSTEES AND OFFICERS OF BBH LIMITED DURATION
FUND
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s)
During Past 5 Years | |
Rowena Rothman 140 Broadway New York, NY 10005 Born: 1967 |
Assistant Treasurer |
Since 2011 |
Vice President of BBH&Co. since 2009. |
|||
James D. Kerr 50 Post Office Square Boston, MA 02110 Born: 1983 |
Assistant Secretary |
Since 2015 |
Assistant Vice President and Investor Services Associate Counsel since 2014; joined BBH&Co. in 2013; Assistant District Attorney,
Middlesex County, Massachusetts (October 2011-September 2013). |
# |
All officers of the Trust hold office for one year and until their respective successors are chosen and qualified (subject to the ability of the Trustees to remove any officer in accordance with the Trusts By-laws). Mr. Wagner previously served on the Board of Trustees of the Predecessor Trust. |
+ |
Ms. Livingston and Mr. Gehret are interested persons of the Trust as defined in the 1940 Act because of their positions as Partner and Limited Partner of BBH&Co., respectively. |
ˆ |
The Fund Complex consists of the Trust, which has six series, and each is counted as one Portfolio for purposes of this table. |
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 |
Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: |
Call
1-800-575-1265 |
|||||
By E-mail send your request to: |
bbhfunds@bbh.com |
|||||
On the internet: |
www.bbhfunds.com |
BBH INTERMEDIATE MUNICIPAL BOND FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE
October 31, 2016
1 | Barclays Municipal Bond 1-15 Year Blend (1-17) Index is a sub-index of the Barclays Capital Municipal Bond Index, a rules-based market value-weighted index of bonds with maturities of one year to 17 years engineered for the tax exempt bond market. One cannot invest directly in an index. |
2 | One basis point or bp is 1/100th of a percent (0.01% or 0.0001) and is used to denote the change in a financial instrument. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
1 | Taper-tantrum 2013 surge in U.S. Treasury yields, which resulted from the Federal Reserves use of tapering to gradually reduce the amount of money it was feeding into the economy. |
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
MANAGEMENTS DISCUSSION OF FUND PERFORMANCE (continued)
October 31, 2016
|
![]() |
1 | The Funds performance assumes the reinvestment of all dividends and distributions. The Barclays Municipal Bond 1-15 Year Blend (1-17) Index (BMBB) has been adjusted to reflect reinvestment of dividends on securities in the index. The BMBB is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Funds performance. The index is unmanaged. Investments cannot be made in the index. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BBH
Intermediate Municipal Bond Fund:
December 22,
2016
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO ALLOCATION
October 31, 2016
U.S. $ Value | Percent of Net Assets | |||||||
Municipal Bonds | $ | 90,721,400 | 101.4 | % | ||||
Liabilities in Excess of Other Assets | (1,222,984 | ) | (1.4 | ) | ||||
NET ASSETS | $ | 89,498,416 | 100.0 | % |
U.S. $ Value |
Percent of Total Investments |
|||||||
AAA
|
$ | 21,514,012 | 23.7 | % | ||||
AA
|
34,597,226 | 38.1 | ||||||
A
|
29,532,684 | 32.6 | ||||||
BBB
|
3,729,394 | 4.1 | ||||||
Not
rated |
1,348,084 | 1.5 | ||||||
TOTAL INVESTMENTS |
$ | 90,721,400 | 100.0 | % |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value |
|||||||||||||||
MUNICIPAL BONDS (101.4%) |
||||||||||||||||||
Alabama (0.4%) |
||||||||||||||||||
$ 290,000 | Alabama 21st Century Authority, Revenue Bonds |
06/01/21 | 5.000 | % | $ | 332,247 | ||||||||||||
Total Alabama |
332,247 | |||||||||||||||||
Arizona (1.2%) |
||||||||||||||||||
100,000 | Coconino County Pollution Control Corp., Revenue Bonds, FGIC1 |
09/01/32 | 1.336 | 87,023 | ||||||||||||||
475,000 | Salt Verde Financial Corp., Revenue Bonds |
12/01/19 | 5.250 | 526,709 | ||||||||||||||
55,000 | Salt Verde Financial Corp., Revenue Bonds |
12/01/22 | 5.250 | 65,043 | ||||||||||||||
355,000 | Salt Verde Financial Corp., Revenue Bonds |
12/01/32 | 5.000 | 421,974 | ||||||||||||||
Total Arizona |
1,100,749 | |||||||||||||||||
California (6.3%) |
||||||||||||||||||
500,000 | Anaheim City School District, General Obligation Bonds, AGM, NPFG2 |
08/01/28 | 0.000 | 349,195 | ||||||||||||||
2,000,000 | Anaheim City School District, General Obligation Bonds, AGM, NPFG2 |
08/01/29 | 0.000 | 1,332,820 | ||||||||||||||
1,000,000 | Grossmont Healthcare District, General Obligation Bonds, AMBAC2 |
07/15/26 | 0.000 | 772,410 | ||||||||||||||
1,000,000 | Grossmont Healthcare District, General Obligation Bonds, AMBAC2 |
07/15/28 | 0.000 | 714,010 | ||||||||||||||
25,000 | Long Beach Bond Finance Authority, Revenue Bonds |
11/15/19 | 5.250 | 27,722 | ||||||||||||||
660,000 | Long Beach Bond Finance Authority, Revenue Bonds |
11/15/22 | 5.250 | 774,781 | ||||||||||||||
30,000 | Long Beach Bond Finance Authority, Revenue Bonds1 |
11/15/27 | 1.997 | 28,440 | ||||||||||||||
1,000,000 | Napa Valley Community College District, General Obligation, NPFG2 |
08/01/27 | 0.000 | 750,440 | ||||||||||||||
1,000,000 | Ukiah Unified School District, General Obligation Bonds, NPFG2 |
08/01/24 | 0.000 | 849,970 | ||||||||||||||
Total California |
5,599,788 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Connecticut (2.0%) |
||||||||||||||||||
$ 550,000 | Connecticut Housing Finance Authority, Revenue Bonds |
05/15/22 | 3.250 | % | $ | 578,551 | ||||||||||||
125,000 | Connecticut Housing Finance Authority, Revenue Bonds |
11/15/22 | 3.250 | 131,213 | ||||||||||||||
140,000 | Connecticut Housing Finance Authority, Revenue Bonds |
11/15/23 | 3.450 | 147,015 | ||||||||||||||
190,000 | State of Connecticut, General Obligation Bonds, AMBAC1 |
06/01/17 | 4.491 | 191,569 | ||||||||||||||
725,000 | State of Connecticut, General Obligation Bonds1 |
03/01/25 | 1.620 | 729,256 | ||||||||||||||
Total Connecticut |
1,777,604 | |||||||||||||||||
Florida (1.8%) |
||||||||||||||||||
1,080,000 | Greater Orlando Aviation Authority, Revenue Bonds |
10/01/27 | 5.000 | 1,259,766 | ||||||||||||||
35,000 | Hillsborough County Aviation Authority, Revenue Bonds |
10/01/25 | 5.000 | 40,690 | ||||||||||||||
10,000 | Hillsborough County Aviation Authority, Revenue Bonds |
10/01/26 | 5.000 | 11,564 | ||||||||||||||
300,000 | Pinellas County Health Facilities Authority, Revenue Bonds, NPFG1 |
11/15/23 | 0.684 | 284,150 | ||||||||||||||
Total Florida |
1,596,170 | |||||||||||||||||
Georgia (0.6%) |
||||||||||||||||||
500,000 | Monroe County Development Authority, Revenue Bonds1 |
01/01/39 | 2.400 | 511,715 | ||||||||||||||
Total Georgia |
511,715 | |||||||||||||||||
Illinois (5.5%) |
||||||||||||||||||
90,000 | Chicago Park District, General Obligation Bonds |
11/15/16 | 5.000 | 90,113 | ||||||||||||||
525,000 | Chicago Park District, General Obligation Bonds |
01/01/18 | 4.250 | 541,301 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Illinois (continued) |
||||||||||||||||||
$ 75,000 | Chicago Park District, General Obligation Bonds |
01/01/19 | 3.000 | % | $ | 77,075 | ||||||||||||
360,000 | Chicago Park District, General Obligation Bonds |
01/01/19 | 4.000 | 377,568 | ||||||||||||||
100,000 | Chicago Park District, General Obligation Bonds |
01/01/19 | 5.000 | 106,993 | ||||||||||||||
100,000 | Chicago Transit Authority, Revenue Bonds, AGC |
06/01/17 | 5.000 | 102,204 | ||||||||||||||
110,000 | Chicago Transit Authority, Revenue Bonds, AGC |
06/01/19 | 5.250 | 116,727 | ||||||||||||||
815,000 | Chicago Transit Authority, Revenue Bonds |
06/01/19 | 5.500 | 878,122 | ||||||||||||||
500,000 | Chicago Transit Authority, Revenue Bonds |
06/01/20 | 5.000 | 555,195 | ||||||||||||||
320,000 | Chicago Transit Authority, Revenue Bonds, AGC |
06/01/22 | 5.000 | 338,966 | ||||||||||||||
300,000 | Chicago Transit Authority, Revenue Bonds, AGC |
06/01/23 | 5.250 | 315,927 | ||||||||||||||
165,000 | Chicago Transit Authority, Revenue Bonds, AGC |
06/01/24 | 5.250 | 173,549 | ||||||||||||||
190,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds |
06/01/21 | 5.375 | 219,988 | ||||||||||||||
440,000 | Railsplitter Tobacco Settlement Authority, Revenue Bonds |
06/01/23 | 5.500 | 509,964 | ||||||||||||||
500,000 | State of Illinois, General Obligation Bonds |
02/01/19 | 5.000 | 525,310 | ||||||||||||||
Total Illinois |
4,929,002 | |||||||||||||||||
Indiana (1.9%) |
||||||||||||||||||
1,000,000 | Indiana Housing & Community Development Authority, Revenue Bonds, FHLMC, FNMA, GNMA |
01/01/22 | 1.950 | 1,001,210 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Indiana (continued) |
||||||||||||||||||
$ 700,000 | Indiana Housing & Community Development Authority, Revenue Bonds, FHLMC, FNMA, GNMA |
07/01/38 | 3.500 | % | $ | 740,474 | ||||||||||||
Total Indiana |
1,741,684 | |||||||||||||||||
Kansas (0.4%) |
||||||||||||||||||
200,000 | City of La Cygne, Revenue Bonds, NPFG1 |
04/15/27 | 1.660 | 170,971 | ||||||||||||||
100,000 | City of St. Marys, Revenue Bonds, NPFG1 |
04/15/32 | 1.660 | 91,656 | ||||||||||||||
100,000 | City of Wamego, Revenue Bonds, NPFG1 |
04/15/32 | 1.740 | 91,697 | ||||||||||||||
Total Kansas |
354,324 | |||||||||||||||||
Kentucky (1.6%) |
||||||||||||||||||
1,340,000 | Kentucky Housing Corp., Revenue Bonds3 |
07/01/19 | 4.250 | 1,414,504 | ||||||||||||||
Total Kentucky |
1,414,504 | |||||||||||||||||
Maryland (1.4%) |
||||||||||||||||||
1,000,000 | County of Baltimore, General Obligation Bonds |
08/01/23 | 5.000 | 1,230,900 | ||||||||||||||
Total Maryland |
1,230,900 | |||||||||||||||||
Massachusetts (3.0%) |
||||||||||||||||||
100,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM1 |
06/01/17 | 4.321 | 100,878 | ||||||||||||||
1,500,000 | Commonwealth of Massachusetts, Revenue Bonds, AGM1 |
06/01/22 | 4.531 | 1,582,065 | ||||||||||||||
1,000,000 | Massachusetts Housing Finance Agency, Revenue Bonds |
12/01/21 | 2.500 | 1,024,020 | ||||||||||||||
Total Massachusetts |
2,706,963 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Michigan (4.8%) |
||||||||||||||||||
$ 220,000 | Detroit City School District, General Obligation Bonds, FGIC |
05/01/20 | 6.000 | % | $ | 251,801 | ||||||||||||
250,000 | Detroit City School District, General Obligation Bonds, FGIC |
05/01/21 | 6.000 | 293,955 | ||||||||||||||
350,000 | Detroit City School District, General Obligation Bonds |
05/01/23 | 5.000 | 407,746 | ||||||||||||||
95,000 | Detroit City School District, General Obligation Bonds, BHAC, FGIC |
05/01/25 | 5.250 | 110,299 | ||||||||||||||
90,000 | Detroit City School District, General Obligation Bonds, AGM |
05/01/27 | 5.250 | 110,759 | ||||||||||||||
325,000 | Detroit City School District, General Obligation Bonds, AGM |
05/01/29 | 6.000 | 408,915 | ||||||||||||||
1,510,000 | Detroit City School District, General Obligation Bonds, AGM |
05/01/30 | 5.250 | 1,879,029 | ||||||||||||||
105,000 | Michigan Finance Authority, Revenue Bonds |
05/01/19 | 5.000 | 114,046 | ||||||||||||||
700,000 | University of Michigan, Revenue Bonds4 |
11/01/16 | 0.450 | 700,000 | ||||||||||||||
Total Michigan |
4,276,550 | |||||||||||||||||
Missouri (0.6%) |
||||||||||||||||||
310,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC1 |
06/01/31 | 0.782 | 280,236 | ||||||||||||||
300,000 | Health & Educational Facilities Authority of the State of Missouri, Revenue Bonds, AMBAC1 |
06/01/31 | 0.783 | 270,546 | ||||||||||||||
Total Missouri |
550,782 | |||||||||||||||||
Montana (0.5%) |
||||||||||||||||||
420,000 | Montana Board of Housing, Revenue Bonds |
12/01/43 | 3.000 | 434,645 | ||||||||||||||
Total Montana |
434,645 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Nebraska (0.5%) |
||||||||||||||||||
$ 355,000 | Central Plains Energy Project, Revenue Bonds |
09/01/27 | 5.000 | % | $ | 405,531 | ||||||||||||
Total Nebraska |
405,531 | |||||||||||||||||
New Hampshire (1.2%) |
||||||||||||||||||
1,100,000 | New Hampshire Health & Education Facilities Authority, Revenue Bonds4 |
11/01/16 | 0.520 | 1,100,000 | ||||||||||||||
Total New Hampshire |
1,100,000 | |||||||||||||||||
New Jersey (17.2%) |
||||||||||||||||||
2,000,000 | New Jersey Economic Development Authority, Revenue Bonds |
06/15/23 | 5.000 | 2,244,760 | ||||||||||||||
1,250,000 | New Jersey Transit Corp., Revenue Bonds |
09/15/19 | 5.000 | 1,348,862 | ||||||||||||||
1,125,000 | New Jersey Transit Corp., Revenue Bonds |
09/15/20 | 5.000 | 1,234,114 | ||||||||||||||
200,000 | New Jersey Transit Corp., Revenue Bonds |
09/15/21 | 5.000 | 223,064 | ||||||||||||||
300,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds |
12/15/23 | 5.500 | 350,241 | ||||||||||||||
1,150,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds2 |
12/15/26 | 0.000 | 781,896 | ||||||||||||||
1,850,000 | New Jersey Transportation Trust Fund Authority, Revenue Bonds2 |
12/15/30 | 0.000 | 1,021,755 | ||||||||||||||
1,200,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG1 |
01/01/30 | 1.103 | 1,097,062 | ||||||||||||||
650,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG1 |
01/01/30 | 1.278 | 594,240 | ||||||||||||||
925,000 | New Jersey Turnpike Authority, Revenue Bonds, NPFG1 |
01/01/30 | 1.295 | 845,649 | ||||||||||||||
5,800,000 | Tobacco Settlement Financing Corp., Revenue Bonds2 |
06/01/41 | 0.000 | 1,543,380 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
New Jersey (continued) |
||||||||||||||||||
$15,955,000 | Tobacco Settlement Financing Corp., Revenue Bonds2 |
06/01/41 | 0.000 | % | $ | 4,118,943 | ||||||||||||
Total New Jersey |
15,403,966 | |||||||||||||||||
New York (15.6%) |
||||||||||||||||||
3,600,000 | City of New York, General Obligation Bonds4 |
11/01/16 | 0.520 | 3,600,000 | ||||||||||||||
150,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1 |
01/01/30 | 1.441 | 149,825 | ||||||||||||||
750,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1 |
01/01/30 | 1.465 | 748,679 | ||||||||||||||
400,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1 |
01/01/30 | 1.469 | 399,643 | ||||||||||||||
50,000 | New York City Transit Authority/Metropolitan Trans Authority/Triborough Bridge & Tunnel Authority, Certificates of Participation, AMBAC1 |
01/01/30 | 1.471 | 49,936 | ||||||||||||||
400,000 | New York City Water & Sewer System, Revenue Bonds4 |
11/01/16 | 0.480 | 400,000 | ||||||||||||||
120,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
12/01/23 | 1.336 | 113,878 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
New York (continued) |
||||||||||||||||||
$ 225,000 | New York State Energy Research & Development Authority, Revenue Bonds, FGIC1 |
06/01/25 | 1.336 | % | $ | 211,796 | ||||||||||||
1,865,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
12/01/25 | 1.335 | 1,783,302 | ||||||||||||||
700,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
12/01/25 | 1.340 | 669,337 | ||||||||||||||
500,000 | New York State Energy Research & Development Authority, Revenue Bonds1 |
07/01/26 | 2.375 | 510,550 | ||||||||||||||
210,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
12/01/26 | 1.337 | 200,455 | ||||||||||||||
300,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
03/01/27 | 1.328 | 286,335 | ||||||||||||||
1,890,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
07/01/27 | 1.314 | 1,766,995 | ||||||||||||||
110,000 | New York State Energy Research & Development Authority, Revenue Bonds, AMBAC1 |
07/01/27 | 1.337 | 102,847 | ||||||||||||||
1,070,000 | New York State Energy Research & Development Authority, Revenue Bonds, XLCA1 |
07/01/29 | 1.336 | 1,012,226 | ||||||||||||||
2,025,000 | New York State Energy Research & Development Authority, Revenue Bonds, NPFG1 |
04/01/34 | 1.465 | 1,952,294 | ||||||||||||||
Total New York |
13,958,098 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
North Carolina (4.9%) |
||||||||||||||||||
$ 1,405,000 | County of Mecklenburg, General Obligation Bonds |
04/01/24 | 5.000 | % | $ | 1,753,145 | ||||||||||||
1,000,000 | North Carolina Housing Finance Agency, Revenue Bonds5 |
07/01/39 | 3.500 | 1,056,130 | ||||||||||||||
1,250,000 | State of North Carolina, General Obligation Bonds |
06/01/23 | 5.000 | 1,537,125 | ||||||||||||||
Total North Carolina |
4,346,400 | |||||||||||||||||
Ohio (1.3%) |
||||||||||||||||||
1,200,000 | County of Montgomery, Revenue Bonds4 |
11/01/16 | 0.520 | 1,200,000 | ||||||||||||||
Total Ohio |
1,200,000 | |||||||||||||||||
Oregon (1.6%) |
||||||||||||||||||
1,615,000 | Clackamas Community College District, General Obligation Bonds2 |
06/15/23 | 0.000 | 1,444,811 | ||||||||||||||
Total Oregon |
1,444,811 | |||||||||||||||||
Pennsylvania (3.6%) |
||||||||||||||||||
465,000 | Allegheny County Airport Authority, Revenue Bonds |
01/01/21 | 5.000 | 523,195 | ||||||||||||||
150,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC |
01/01/22 | 5.000 | 172,197 | ||||||||||||||
50,000 | Allegheny County Airport Authority, Revenue Bonds, FGIC |
01/01/23 | 5.000 | 58,212 | ||||||||||||||
1,000,000 | School District of Philadelphia, General Obligation Bonds |
09/01/21 | 5.000 | 1,100,290 | ||||||||||||||
215,000 | School District of Philadelphia, General Obligation Bonds, AGM, FGIC |
06/01/24 | 5.000 | 247,140 | ||||||||||||||
1,000,000 | School District of Philadelphia, General Obligation Bonds5 |
09/01/24 | 5.000 | 1,152,250 | ||||||||||||||
Total Pennsylvania |
3,253,284 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
South Carolina (1.9%) |
||||||||||||||||||
$ 1,810,000 | County of Greenwood, Revenue Bonds, AGM1 |
10/01/34 | 1.206 | % | $ | 1,702,253 | ||||||||||||
Total South Carolina |
1,702,253 | |||||||||||||||||
Texas (8.8%) |
||||||||||||||||||
800,000 | City of Houston Airport System, Revenue Bonds, AGM1 |
07/01/30 | 0.920 | 750,867 | ||||||||||||||
325,000 | City of Houston Airport System, Revenue Bonds, AGM1 |
07/01/30 | 0.960 | 304,978 | ||||||||||||||
525,000 | City of Houston Airport System, Revenue Bonds, XLCA1 |
07/01/32 | 1.065 | 492,699 | ||||||||||||||
475,000 | City of Houston Airport System, Revenue Bonds, XLCA1 |
07/01/32 | 1.070 | 445,063 | ||||||||||||||
550,000 | City of Houston Airport System, Revenue Bonds, XLCA1 |
07/01/32 | 1.070 | 515,404 | ||||||||||||||
1,805,000 | Grand Prairie Independent School District, General Obligation Bonds |
02/15/24 | 5.250 | 2,257,604 | ||||||||||||||
3,145,000 | North Texas Tollway Authority, Revenue Bonds, AGC2 |
01/01/29 | 0.000 | 2,176,466 | ||||||||||||||
350,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds |
12/15/19 | 5.250 | 387,103 | ||||||||||||||
95,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds |
12/15/20 | 5.250 | 107,221 | ||||||||||||||
400,000 | Texas Municipal Gas Acquisition & Supply Corp. I, Revenue Bonds |
12/15/21 | 5.250 | 459,560 | ||||||||||||||
Total Texas |
7,896,965 | |||||||||||||||||
Utah (2.8%) |
||||||||||||||||||
2,000,000 | State of Utah, General Obligation Bonds |
07/01/24 | 5.000 | 2,508,080 | ||||||||||||||
Total Utah |
2,508,080 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Virginia (4.9%) |
||||||||||||||||||
$ 3,570,000 | Commonwealth of Virginia, General Obligation Bonds |
06/01/23 | 5.000 | % | $ | 4,392,528 | ||||||||||||
Total Virginia |
4,392,528 | |||||||||||||||||
Washington (3.6%) |
||||||||||||||||||
1,000,000 | Port of Seattle, Revenue Bonds |
04/01/23 | 5.000 | 1,195,600 | ||||||||||||||
500,000 | Port of Seattle, Revenue Bonds |
06/01/23 | 5.000 | 584,290 | ||||||||||||||
180,000 | Washington State Housing Finance Commission, Revenue Bonds, FHLMC, FNMA, GNMA |
12/01/21 | 2.900 | 186,460 | ||||||||||||||
1,030,000 | Washington State Housing Finance Commission, Revenue Bonds |
12/01/22 | 2.600 | 1,060,127 | ||||||||||||||
185,000 | Washington State Housing Finance Commission, Revenue Bonds, FHLMC, FNMA, GNMA |
12/01/22 | 3.050 | 192,134 | ||||||||||||||
Total Washington |
3,218,611 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Principal Amount |
Maturity Date |
Interest Rate |
Value | |||||||||||||||
MUNICIPAL BONDS (continued) |
||||||||||||||||||
Wisconsin (1.5%) |
||||||||||||||||||
$ 280,000 | County of Milwaukee Airport Revenue, Revenue Bonds |
12/01/28 | 5.250 | % | $ | 326,696 | ||||||||||||
1,000,000 | Public Finance Authority, Revenue Bonds1 |
07/01/29 | 2.000 | 1,006,550 | ||||||||||||||
Total Wisconsin |
1,333,246 | |||||||||||||||||
Total Municipal Bonds (Identified cost $88,075,391) |
90,721,400 | |||||||||||||||||
TOTAL INVESTMENTS (Identified cost $88,075,391)6 | 101.4 | % | $ | 90,721,400 | ||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS | (1.4 | )% | (1,222,984 | ) | ||||||||||||||
NET ASSETS | 100.0 | % | $ | 89,498,416 |
1 | Variable rate instrument. Interest rates change on specific dates (such as coupon or interest payment date). The yield shown represents the October 31, 2016 coupon or interest rate. |
2 | Security issued with zero coupon. Income is recognized through accretion of discount. |
3 | The Funds Investment Adviser has deemed this security to be illiquid based upon the SEC definition of an illiquid security. |
4 | Variable rate demand note. The maturity date reflects the demand repayment dates. The interest rate changes on specific dates (such as coupon or interest payment date). The yield shown represents the coupon or interest rate as of October 31, 2016. |
5 | Represents a security purchased on a when-issued basis. |
6 | The aggregate cost for federal income tax purposes is $88,075,391, the aggregate gross unrealized appreciation is $2,839,478 and the aggregate gross unrealized depreciation is $193,469, resulting in net unrealized appreciation of $2,646,009. |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
|
Level 1 unadjusted quoted prices in active markets for identical investments. |
|
Level 2 significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). |
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments). |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (continued)
October 31, 2016
Investments, at value |
Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1)* |
Significant Other Observable Inputs (Level 2)* |
Significant Unobservable Inputs (Level 3)* |
Balance as of October 31, 2016 |
||||||||||||||
Municipal Bonds** |
$ | | $ | 90,721,400 | $ | | $ | 90,721,400 | ||||||||||
Total investments, at value |
$ | | $ | 90,721,400 | $ | | $ | 90,721,400 |
* |
The Funds policy is to disclose transfers between levels based on valuations at the end of the reporting period. There were no transfers between Levels 1, 2 or 3 during the period ended October 31, 2016. |
** |
For geographical breakdown of municipal bond investments, refer to the Portfolio of Investments. |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2016
ASSETS: |
||||||
Investments in securities, at value (Identified cost $88,075,391) |
$ | 90,721,400 | ||||
Cash |
222,585 | |||||
Receivables for: |
||||||
Interest |
643,165 | |||||
Shares sold |
270,540 | |||||
Investment advisory and administrative fees waiver reimbursement |
23,798 | |||||
Prepaid assets |
823 | |||||
Total Assets |
91,882,311 | |||||
LIABILITIES: |
||||||
Payables for: |
||||||
Investments purchased |
2,211,460 | |||||
Investment advisory and administrative fees |
60,142 | |||||
Professional fees |
49,342 | |||||
Custody and fund accounting fees |
30,600 | |||||
Shareholder servicing fees |
7,749 | |||||
Shares redeemed |
6,018 | |||||
Distributor fees |
2,629 | |||||
Transfer agent fees |
2,316 | |||||
Board of Trustees fees |
522 | |||||
Accrued expenses and other liabilities |
13,117 | |||||
Total Liabilities |
2,383,895 | |||||
NET ASSETS |
$ | 89,498,416 | ||||
Net
Assets Consist of: |
||||||
Paid-in capital |
$ | 85,703,001 | ||||
Undistributed net investment income |
141 | |||||
Accumulated net realized gain on investments in securities |
1,149,265 | |||||
Net unrealized appreciation/(depreciation) on investments in securities |
2,646,009 | |||||
Net
Assets |
$ | 89,498,416 | ||||
NET ASSET VALUE AND OFFERING PRICE PER SHARE |
||||||
CLASS N SHARES |
||||||
($23,211,117 ÷ 2,197,303 shares outstanding) |
$10.56 | |||||
CLASS I SHARES |
||||||
($66,287,299 ÷ 6,281,482 shares outstanding) |
$10.55 |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
For the year ended October 31, 2016
NET INVESTMENT INCOME: |
||||||
Income: |
||||||
Interest and other income |
$ | 2,173,549 | ||||
Total Income |
2,173,549 | |||||
Expenses: |
||||||
Investment advisory and administrative fees |
365,794 | |||||
Professional fees |
60,332 | |||||
Board of Trustees fees |
54,160 | |||||
Shareholder servicing fees |
48,878 | |||||
Custody and fund accounting fees |
41,928 | |||||
Registration fees |
36,818 | |||||
Transfer agent fees |
28,373 | |||||
Distributor fees |
22,474 | |||||
Miscellaneous expenses |
47,597 | |||||
Total Expenses |
706,354 | |||||
Investment advisory and administrative fees waiver |
(213,367 | ) | ||||
Expense offset arrangement |
(2,118 | ) | ||||
Net
Expenses |
490,869 | |||||
Net Investment Income |
1,682,680 | |||||
NET REALIZED AND UNREALIZED GAIN: |
||||||
Net realized gain on investments in securities |
1,254,006 | |||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
1,415,612 | |||||
Net Realized and Unrealized Gain |
2,669,618 | |||||
Net Increase in Net Assets Resulting from Operations |
$ | 4,352,298 |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, |
||||||||||
2016 |
2015 |
|||||||||
INCREASE IN NET ASSETS: |
||||||||||
Operations: |
||||||||||
Net investment income |
$ | 1,682,680 | $ | 1,225,849 | ||||||
Net realized gain on investments in securities |
1,254,006 | 221,782 | ||||||||
Net change in unrealized appreciation/(depreciation) on investments in securities |
1,415,612 | 140,409 | ||||||||
Net increase in net assets resulting from operations |
4,352,298 | 1,588,040 | ||||||||
Dividends and distributions declared: |
||||||||||
From net investment income: |
||||||||||
Class N |
(421,806 | ) | (229,093 | ) | ||||||
Class I |
(1,260,733 | ) | (997,005 | ) | ||||||
From net realized gains: |
||||||||||
Class N |
(54,688 | ) | (8,229 | ) | ||||||
Class I |
(143,942 | ) | (403,258 | ) | ||||||
Total dividends and distributions declared |
(1,881,169 | ) | (1,637,585 | ) | ||||||
Share transactions: |
||||||||||
Proceeds from sales of shares |
15,152,028 | 51,400,360 | * | |||||||
Net asset value of shares issued to shareholders for reinvestment of dividends and distributions |
720,752 | 286,601 | ||||||||
Proceeds from short-term redemption fees |
542 | 466 | ||||||||
Cost of shares redeemed |
(20,695,368 | ) | (12,481,618 | )* | ||||||
Net increase (decrease) in net assets resulting from share transactions |
(4,822,046 | ) | 39,205,809 | |||||||
Total increase (decrease) in net assets |
(2,350,917 | ) | 39,156,264 | |||||||
NET ASSETS: |
||||||||||
Beginning of year |
91,849,333 | 52,693,069 | ||||||||
End of year (including undistributed net investment income of $141 and $0, respectively) |
$ | 89,498,416 | $ | 91,849,333 |
* |
Includes share exchanges. See Note 5 in Notes to Financial Statements. |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Class N share outstanding throughout each
period.
For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | ||||||||||||||
For the years ended October 31, |
||||||||||||||
2016 |
2015 |
|||||||||||||
Net
asset value, beginning of period |
$ | 10.29 | $ | 10.30 | $ | 10.00 | ||||||||
Income from investment operations: |
||||||||||||||
Net investment income1 |
0.18 | 0.15 | 0.09 | |||||||||||
Net realized and unrealized gain |
0.29 | 0.08 | 0.29 | |||||||||||
Total income from investment operations |
0.47 | 0.23 | 0.38 | |||||||||||
Less dividends and distributions: |
||||||||||||||
From net investment income |
(0.18 | ) | (0.16 | ) | (0.08 | ) | ||||||||
From net realized gains |
(0.02 | ) | (0.08 | ) | | |||||||||
Total dividends and distributions |
(0.20 | ) | (0.24 | ) | (0.08 | ) | ||||||||
Short-term redemption fees1 |
0.00 | 2 | 0.00 | 2 | | |||||||||
Net
asset value, end of period |
$ | 10.56 | $ | 10.29 | $ | 10.30 | ||||||||
Total return |
4.64 | % | 2.29 | % | 3.82 | %3 | ||||||||
Ratios/Supplemental data: |
||||||||||||||
Net assets, end of period (in millions) |
$23 |
$26 |
$1 |
|||||||||||
Ratio of expenses to average net assets before reductions |
1.03 | % | 1.10 | % | 8.78 | %4 | ||||||||
Fee waiver |
0.38 | %5 | 0.45 | %5 | 8.13 | %4,5 | ||||||||
Expense offset arrangement |
0.00 | %6 | 0.00 | %6 | 0.00 | %4,6 | ||||||||
Ratio of expenses to average net assets after reductions |
0.65 | % | 0.65 | % | 0.65 | %4 | ||||||||
Ratio of net investment income to average net assets |
1.73 | % | 1.43 | % | 1.43 | %4 | ||||||||
Portfolio turnover rate |
77 | % | 142 | % | 91 | % | ||||||||
Portfolio turnover rate7 |
40 | % | 83 | % | 56 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized with the exception of audit fees and registration fees. |
5 | The ratio of expenses to average net assets for the fiscal years ended October 31, 2016 and 2015 and the period ended October 31, 2014, reflect fees reduced as result of a contractual operating expense limitation of the share class to 0.65%. The agreement is effective for period beginning on April 1, 2014 and will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. For the fiscal years ended October 31, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014 the waived fees were $92,199, $71,871 and $47,942, respectively. |
6 | Less than 0.01%. |
7 | The portfolio turnover rate excludes variable rate demand notes. |
The accompanying notes are an integral part of these
financial statements.
BBH INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for a Class I share outstanding throughout each
period.
For the period from April 1, 2014 (commencement of operations) to October 31, 2014 | ||||||||||||||
For the years ended October 31, |
||||||||||||||
2016 |
2015 |
|||||||||||||
Net
asset value, beginning of period |
$ | 10.28 | $ | 10.30 | $ | 10.00 | ||||||||
Income from investment operations: |
||||||||||||||
Net investment income1 |
0.20 | 0.18 | 0.09 | |||||||||||
Net realized and unrealized gain |
0.29 | 0.06 | 0.30 | |||||||||||
Total income from investment operations |
0.49 | 0.24 | 0.39 | |||||||||||
Less dividends and distributions: |
||||||||||||||
From net investment income |
(0.20 | ) | (0.18 | ) | (0.09 | ) | ||||||||
From net realized gains |
(0.02 | ) | (0.08 | ) | | |||||||||
Total dividends and distributions |
(0.22 | ) | (0.26 | ) | (0.09 | ) | ||||||||
Short-term redemption fees1 |
0.00 | 2 | 0.00 | 2 | | |||||||||
Net
asset value, end of period |
$ | 10.55 | $ | 10.28 | $ | 10.30 | ||||||||
Total return |
4.80 | % | 2.33 | % | 3.89 | %3 | ||||||||
Ratios/Supplemental data: |
||||||||||||||
Net assets, end of period (in millions) |
$66 |
$66 |
$52 |
|||||||||||
Ratio of expenses to average net assets before reductions |
0.68 | % | 0.78 | % | 0.88 | %4 | ||||||||
Fee waiver |
0.18 | %5 | 0.28 | %5 | 0.38 | %4,5 | ||||||||
Expense offset arrangement |
0.00 | %6 | 0.00 | %6 | 0.00 | %4,6 | ||||||||
Ratio of expenses to average net assets after reductions |
0.50 | % | 0.50 | % | 0.50 | %4 | ||||||||
Ratio of net investment income to average net assets |
1.88 | % | 1.72 | % | 1.49 | %4 | ||||||||
Portfolio turnover rate |
77 | % | 142 | % | 91 | % | ||||||||
Portfolio turnover rate7 |
40 | % | 83 | % | 56 | % |
1 | Calculated using average shares outstanding for the period. |
2 | Less than $0.01. |
3 | Not annualized. |
4 | Annualized with the exception of audit fees and registration fees. |
5 | The ratio of expenses to average net assets for the fiscal years ended October 31, 2016 and 2015 and the period ended October 31, 2014, reflect fees reduced as result of a contractual operating expense limitation of the share class to 0.50%. The agreement is effective for period beginning on April 1, 2014 and will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. For the fiscal years ended October 31, 2016 and 2015 and the period from April 1, 2014 to October 31, 2014, the waived fees were $121,168, $163,323 and $137,383, respectively. |
6 | Less than 0.01%. |
7 | The portfolio turnover rate excludes variable rate demand notes. |
The accompanying notes are an integral part of these
financial statements.
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 2016
1. |
Organization. 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 1940 Act), as an open-end management investment company. The Trust was originally organized under the laws of the State of Maryland on July 16, 1990 as BBH Fund, Inc. and re-organized as a Delaware statutory trust on June 12, 2007. The Fund commenced operations on April 1, 2014. The Fund offers Class N shares and Class I shares. Class N and Class I shares have different operating expenses. With the exception of class specific expenses, all expenses are allocated between classes based on net assets. Neither Class N shares nor Class I shares automatically convert to any other share class of the Fund. As of October 31, 2016, there were six series of the Trust. |
2. |
Significant Accounting Policies. The Funds financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP). The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services Investment Companies. The following summarizes significant accounting policies of the Fund: |
A. |
Valuation of Investments. Prices of municipal bonds are provided by an external pricing service approved by the Funds Board of Trustees (Board). These securities are generally classified as Level 2. The evaluated vendor pricing is based on methods that may include consideration of the following: yields or prices of municipal securities of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligors credit characteristics considered relevant. |
Securities or other assets for which market quotations are not readily available are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. Short-term investments, which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if their original maturity when acquired by the Fund was more than 60 days, unless the use of amortized cost is determined not to represent fair value by the Board. |
B. |
Accounting for Investments and Income. Investment transactions are accounted for on the trade date. Realized gains and losses on investment transactions are determined based on the identified cost method. Interest income is accrued daily and consists of interest accrued, discount earned (including, if any, both original issue and market discount) and premium amortization on the investments of the Fund. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
collection of all or a portion of the interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured. |
C. |
Fund Expenses. Most expenses of the Trust can be directly attributed to a specific fund. Expenses which cannot be directly attributed to a fund are apportioned amongst each fund in the Trust equally. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. |
D. |
Federal Income Taxes. It is the Trusts policy to comply with the requirements of the Internal Revenue Code (the 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. The Fund files a tax return annually using tax accounting methods required under provisions of the Code, which may differ from GAAP, which is the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported in these financial statements may differ from that reported on the Funds tax return, due to certain book-to-tax timing differences such as losses deferred due to wash sale transactions and utilization of capital loss carryforwards. These differences may result in temporary over-distributions for financial statement purposes and are classified as distributions in excess of accumulated net realized gains or net investment income. These distributions do not constitute a return of capital. Permanent differences are reclassified in the Statement of Assets & Liabilities based upon their tax classification. As such, the character of distributions to shareholders reported in the Financial Highlights table may differ from that reported to shareholders on Form 1099-DIV. |
The Fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The Fund did not have any unrecognized tax benefits as of October 31, 2016, nor were there any increases or decreases in unrecognized tax benefits for the year then ended. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statement of Operations. During the fiscal year ended October 31, 2016, the Fund did not incur any such interest or penalties. The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for all open tax years. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. |
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
E. |
Dividends and Distributions to Shareholders. Dividends and distributions from net investment income to shareholders, if any, are paid monthly and are recorded on the ex-dividend date. Distributions from net capital gains, if any, are generally declared and paid annually and are recorded on the ex-dividend date. The Fund declared dividends in the amount of $476,494 and $1,404,675 to Class N and Class I shareholders, respectively, during the fiscal year ended October 31, 2016. In addition, the Fund designated a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. |
The tax character of distributions paid during the years ended October 31, 2016 and 2015, respectively, were as follows: |
Distributions paid
from: |
||||||||||||||||||||||||||
Ordinary income |
Net long-term capital gain |
Total taxable distributions |
Tax exempt income |
Tax return of capital |
Total distributions paid |
|||||||||||||||||||||
2016: |
$ | 474,909 | $ | 124,475 | $ | 599,384 | $ | 1,281,785 | | $ | 1,881,169 | |||||||||||||||
2015: |
609,512 | | 609,512 | 1,028,073 | | 1,637,585 |
As of October 31, 2016 and 2015, respectively, the components of accumulated earnings/ (deficit) on a tax basis were as follows: |
Components of accumulated
earnings/(deficit): |
||||||||||||||||||||||||||||||
Undistributed ordinary income |
Undistributed long-term capital gain |
Accumulated earnings |
Accumulated capital and other losses |
Other book/tax temporary differences |
Unrealized appreciation/ (depreciation) |
Total accumulated earnings/ (deficit) |
||||||||||||||||||||||||
2016: |
$ | 638,250 | $ | 511,015 | $ | 1,149,265 | | | $ | 2,646,009 | $ | 3,795,274 | ||||||||||||||||||
2015: |
74,098 | 123,762 | 197,860 | | | 1,230,397 | 1,428,257 |
The Fund did not have a net capital loss carryforward at October 31, 2016. |
Total distributions paid may differ from amounts reported in the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid. |
To the extent future capital gains are offset by capital loss carryforwards, if any; such gains will not be distributed. |
F. |
Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from these estimates. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
A. |
Investment Advisory and Administrative Fees. Effective April 1, 2014 (commencement of operations), under a combined Investment Advisory and Administrative Services Agreement (Agreement) with the Trust, Brown Brothers Harriman & Co. (BBH) through a separately identifiable department (SID or Investment Adviser) provides investment advisory and portfolio management services to the Fund. BBH also provides administrative services to the Fund. The Funds investment advisory and administrative services fee is calculated daily and paid monthly at an annual rate equivalent to 0.40% of the Funds average daily net assets. For the fiscal year ended October 31, 2016, the Fund incurred $365,794 under the Agreement. |
B. |
Investment Advisory and Administrative Fee Waivers. Effective April 1, 2014 (commencement of operations), the Investment Adviser contractually agreed to limit the annual fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP and other extraordinary expenses not incurred in the ordinary course of the Funds business) of Class N and Class I to 0.65% and 0.50%, respectively. The agreement will terminate on March 1, 2017, unless it is renewed by all parties to the agreement. The agreement may only be terminated during its term with approval of the Funds Board of Trustees. For the fiscal year ended October 31, 2016, the Investment Adviser waived fees in the amount of $92,199 and $121,168 for Class N and Class I, respectively. |
C. |
Shareholder Servicing Fees. The Trust has a shareholder servicing agreement with BBH. BBH receives a fee from the Fund calculated daily and paid monthly at an annual rate of 0.20%. Prior to the current year, the fee was a flat rate of 0.15% of Class N shares average daily net assets. For the fiscal year ended October 31, 2016, Class N shares of the Fund incurred $48,878 in shareholder servicing fees. |
D. |
Custody and Fund Accounting Fees. BBH acts as a custodian and fund accountant and receives custody and fund accounting fees from the Fund calculated daily and incurred monthly. BBH holds all of the Funds cash and investments and calculates the Funds daily net asset value. The custody fee is an asset and transaction-based fee. The fund accounting fee is an asset-based fee calculated at 0.004% of the Funds net asset value. For the fiscal year ended October 31, 2016, the Fund incurred $41,928 in custody and fund accounting fees. These fees for the Fund were reduced by $2,118 as a result of an expense offset arrangement with the Funds custodian. The credit amount (if any) is disclosed in the Statement of Operations as a reduction to the Funds expenses. 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 pay the Federal Funds overnight investment rate on the day of the overdraft. The total interest incurred by the Fund for |
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
the fiscal year ended October 31, 2016, was $127. This amount is presented under line item Custody and Fund Accounting Fees in the Statements of Operations. |
E. |
Board of Trustees Fees. Each Trustee who is not an interested person as defined under the 1940 Act receives an annual fee as well as reimbursement for reasonable out-of-pocket expenses from the Fund. For the fiscal year ended October 31, 2016, the Fund incurred $54,160 in independent Trustee compensation and reimbursements. |
F. |
Affiliated Ownership. As of October 31, 2016, BBH is the owner of record of 56% of the total outstanding shares of the Fund. |
4. |
Investment Transactions. For the fiscal year ended October 31, 2016, the cost of purchases and the proceeds of sales of investment securities, other than short-term investments, was $70,904,914 and $69,322,314, respectively. |
5. |
Shares of Beneficial Interest. The Trust is permitted to issue an unlimited number of Class N shares and Class I shares of beneficial interest, at no par value. Transactions in Class N and Class I shares were as follows: |
For the year ended October 31, 2016 |
For the year ended October 31, 2015 |
||||||||||||||||||
Shares |
Dollars |
Shares |
Dollars |
||||||||||||||||
Class N |
|||||||||||||||||||
Shares sold |
456,024 | $ | 4,784,482 | 3,260,428 | $ | 33,497,063 | |||||||||||||
Shares issued in connection with reinvestments of dividends |
36,145 | 378,154 | 16,643 | 169,984 | |||||||||||||||
Proceeds from short-term redemption fees |
N/A | 105 | N/A | 133 | |||||||||||||||
Shares redeemed |
(817,062 | ) | (8,568,577 | ) | (857,223 | ) | (8,734,880 | ) | |||||||||||
Net increase (decrease) |
(324,893 | ) | $ | (3,405,836 | ) | 2,419,848 | $ | 24,932,300 | |||||||||||
Class I |
|||||||||||||||||||
Shares sold |
989,906 | $ | 10,367,546 | 1,755,417 | $ | 17,903,297 | |||||||||||||
Shares issued in connection with reinvestments of dividends |
32,728 | 342,598 | 11,443 | 116,617 | |||||||||||||||
Proceeds from short-term redemption fees |
N/A | 437 | N/A | 333 | |||||||||||||||
Shares redeemed |
(1,155,115 | ) | (12,126,791 | ) | (368,524 | ) | (3,746,738 | ) | |||||||||||
Net increase (decrease) |
(132,481 | ) | $ | (1,416,210 | ) | 1,398,336 | $ | 14,273,509 |
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
Included in Shares Sold and Shares Redeemed are shareholder exchanges during the year ended October 31, 2015. Specifically: |
During the fiscal year 2015, 391,812 shares of N were exchanged for 392,198 shares of Class I valued at $3,984,732 and 196,099 shares of Class I were exchanged for 195,906 shares of Class N valued at $1,992,367. |
A. |
Principal Risk Factors. Investing in the Fund may involve certain risks, as discussed in the Funds prospectus, including but not limited to, those described below: |
A shareholder may lose money by investing in the Fund (investment risk). The Fund is actively managed and the decisions by the Investment Adviser may cause the Fund to incur losses or miss profit opportunities (management risk). In the normal course of business, the Fund may invest in auction rate securities, the liquidity and price of which are subject to the risk of insufficient demand at auction or on a secondary market (auction rate securities risk). Additionally, in the normal course of business, the Fund invests in securities and enters into transactions where risks exist due to redemption of securities by the issuer before maturity (call risk), failure of a counterparty to a transaction to perform (credit risk), changes in interest rates (interest rate risk), higher volatility for securities with longer maturities (maturity risk), difficulty in being able to purchase or sell a security (liquidity risk) and a significant position in municipal securities in a particular state (state-specific risk). Political, legislative and economic events may affect a municipal securitys value, interest payments, repayments of principal and the Funds ability to sell it (municipal issuer risk). Additionally, as the Funds exposure to similar municipal revenue sectors increases, the Fund will become more sensitive to adverse economic, business or political developments relevant to these sectors (municipal revenue sector risk). The Funds use of derivatives creates risks that are different from, or possibly greater than, the risks associated with investing directly in securities as the Fund could lose more than the principal amount invested (derivatives risk). The value of securities held by the Fund may decline in response to certain events, including: those directly involving the companies or issuers whose securities are held by the Fund; conditions affecting the general economy; overall market changes; and political and regulatory events (market risk). While the Fund endeavors to purchase only bona fide tax exempt bonds, there is a risk that a bond may be reclassified by the IRS as a taxable bond creating taxable income for the Fund and its shareholders (taxation risk). The Funds shareholders may be adversely impacted by asset allocation decisions made by an investment adviser whose discretionary clients make up a large percentage of the Funds |
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 2016
shareholders (shareholder concentration risk). The extent of the Funds exposure to these risks in respect to these financial assets is included in their value as recorded in the Funds Statement of Assets and Liabilities. Please refer to the Funds prospectus for a complete description of the principal risks of investing in the Fund. |
B. |
Indemnifications. Under the Trusts organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund, and shareholders are indemnified against personal liability for the obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote. |
7. |
Subsequent Events. Management has evaluated events and transactions that have occurred since October 31, 2016 through the date the financial statements were issued and determined that there were none that would require recognition or additional disclosure in the financial statements. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES
October 31, 2016 (unaudited)
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
DISCLOSURE OF FUND EXPENSES (continued)
October 31, 2016 (unaudited)
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class N |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,014 | $ | 3.29 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,022 | $ | 3.30 |
Beginning Account Value May 1, 2016 |
Ending Account Value October 31, 2016 |
Expenses Paid During Period May 1, 2016 to October 31, 20161 |
||||||||||||
Class I |
||||||||||||||
Actual |
$ | 1,000 | $ | 1,014 | $ | 2.48 | ||||||||
Hypothetical2 |
$ | 1,000 | $ | 1,023 | $ | 2.49 |
1 | Expenses are equal to the Funds annualized expense ratio of 0.65% and 0.49% for Class N and I shares, respectively, 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 purposes of the calculation, the applicable annualized expenses ratio for each class of shares is subtracted from the assumed return before expenses. |
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICT OF INTEREST
October 31, 2016 (unaudited)
|
|
BBH INTERMEDIATE MUNICIPAL BOND FUND
CONFLICT OF INTEREST (continued)
October 31, 2016 (unaudited)
BBH INTERMEDIATE MUNICIPAL BOND FUND
ADDITIONAL FEDERAL TAX INFORMATION
October 31, 2016 (unaudited)
|
|
TRUSTEES AND OFFICERS OF BBH INTERMEDIATE MUNICIPAL
BOND FUND
(unaudited)
Name and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment Company Directorships held by Trustee During Past 5 Years |
|
Independent Trustees |
||||||||||
H. Whitney Wagner Born: 1956 |
Chairman of the Board and Trustee |
Chairman Since 2014; Trustee Since 2007 and 2006-2007 with the Predecessor Trust |
President, Clear Brook Advisors, a registered investment advisor. |
6 |
None. |
|||||
Andrew S. Frazier Born: 1948 |
Trustee |
Since 2010 |
Consultant to Western World Insurance Group, Inc. (WWIG) (January 2010 to January 2012). |
6 |
Director of WWIG. |
|||||
Mark M. Collins Born: 1956 |
Trustee |
Since 2011 |
Partner of Brown Investment Advisory Incorporated, a registered investment advisor. |
6 |
Chairman of Dillon Trust Company. |
|||||
John M. Tesoro Born: 1952 |
Trustee |
Since 2014 |
Partner, Certified Public Accountant, KPMG LLP (Retired in 2012). |
6 |
Trustee, Bridge Builder Trust (8 Funds); Director, Teton Advisors, Inc. (a registered investment adviser). |
TRUSTEES AND OFFICERS OF BBH INTERMEDIATE MUNICIPAL
BOND FUND
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5 Years |
|
Number of Portfolios in Fund Complex Overseen by Trusteeˆ |
|
Other Public Company or Investment
Company Directorships held by Trustee During Past 5 Years |
|
Interested Trustees |
||||||||||
Susan C. Livingston+ 50 Post Office Square Boston, MA 02110 Born: 1957 |
Trustee |
Since 2011 |
Partner (since 1998) and Senior Client Advocate (since 2010) for BBH&Co.; Director of BBH Luxembourg S.C.A. (since
1992). |
6 |
None. |
|||||
John A. Gehret+ 140 Broadway New York, NY 10005 Born: 1959 |
Trustee |
Since 2011 |
Limited Partner of BBH&Co. (2012-present); General Partner of BBH&Co. (1998 to 2011). |
6 |
None. |
|
|
TRUSTEES AND OFFICERS OF BBH INTERMEDIATE MUNICIPAL
BOND FUND
(unaudited)
Name, Address and Birth Year |
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5
Years |
|
Officers |
||||||
Jean-Pierre Paquin 140 Broadway New York, NY 10005 Born: 1973 |
President and Principal Executive Officer |
Since 2016 |
Partner of BBH&Co. since 2015; joined BBH&Co. in 1996. |
|||
Daniel Greifenkamp 140 Broadway New York, NY 10005 Born: 1969 |
Vice
President |
Since 2016 |
Managing Director of BBH&Co. since 2014; joined BBH&Co. in 2011. |
|||
Charles H. Schreiber 140 Broadway New York, NY 10005 Born: 1957 |
Treasurer and Principal Financial Officer |
Since 2007 2006-2007 with the Predecessor Trust |
Senior Vice President of BBH&Co. since 2001; joined BBH&Co. in 1999. |
|||
Paul F. Gallagher 140 Broadway New York, NY 10005 Born: 1959 |
Chief Compliance Officer (CCO) |
Since 2015 |
Senior Vice President of BBH&Co. since September 2015; Executive Director, Counsel, Morgan Stanley Smith Barney LLC
(2009September 2015). |
|||
Keith M. Kelley 140 Broadway New York, NY 10005 Born: 1983 |
Anti-Money Laundering Officer (AMLO) |
Since 2016 |
Vice
President of BBH&Co. since February 2016; joined BBH&Co. in 2016; Director, Legal and Compliance, Morgan Stanley Smith Barney LLC
(2014February 2016); Compliance Manager, State Street Corporation (20132014); Associate, J.P. Morgan Chase & Co.
(20112013). |
|||
Suzan Barron 50 Post Office Square Boston, MA 02110 Born: 1964 |
Secretary |
Since 2009 |
Senior Vice President and Senior Investor Services Counsel, BBH&Co. since 2005. |
TRUSTEES AND OFFICERS OF BBH INTERMEDIATE MUNICIPAL
BOND FUND
(unaudited)
Name, Address and Birth Year |
|
Position(s) Held with the Trust |
|
Term of Office and Length of Time Served# |
|
Principal Occupation(s) During Past 5
Years |
Rowena Rothman 140 Broadway New York, NY 10005 Born: 1967 |
Assistant Treasurer |
Since 2011 |
Vice
President of BBH&Co. since 2009. |
|||
James D. Kerr 50 Post Office Square Boston, MA 02110 Born: 1983 |
Assistant Secretary |
Since 2015 |
Assistant Vice President and Investor Services Associate Counsel since 2014; joined BBH&Co. in 2013; Assistant District Attorney, Middlesex
County, Massachusetts (October 2011September 2013). |
# |
All officers of the Trust hold office for one year and until their respective successors are chosen and qualified (subject to the ability of the Trustees to remove any officer in accordance with the Trusts By-laws). Mr. Wagner previously served on the Board of Trustees of the Predecessor Trust. |
+ |
Ms. Livingston and Mr. Gehret are interested persons of the Trust as defined in the 1940 Act because of their positions as Partner and Limited Partner of BBH&Co., respectively. |
ˆ |
The Fund Complex consists of the Trust, which has six series, and each is counted as one Portfolio for purposes of this table. |
|
|
Administrator Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 Distributor ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, CO 80203 Shareholder Servicing Agent Brown Brothers Harriman & Co. 140 Broadway New York, NY 10005 1-800-575-1265 |
Investment Adviser Brown Brothers Harriman Mutual Fund Advisory Department 140 Broadway New York, NY 10005 |
By telephone: |
Call
1-800-575-1265 |
|||||
By E-mail send your request to: |
bbhfunds@bbh.com |
|||||
On the internet: |
www.bbhfunds.com |
Item 2. Code of Ethics. Item 3. Audit Committee Financial Expert. Item 4. Principal Accountant Fees and Services. Audit Fees The aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal accountant for the audit of the Registrant’s annual
financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings
or engagements for those fiscal years were $274,750 for 2016 and $169,600 for 2015.* Audit Related Fees The aggregate fees billed in each of the last
two fiscal years for assurance and related services rendered to the Registrant by the principal accountant that are reasonably
related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a)
of this Item were $0 for 2016 and $0 for 2015. Tax Fees The aggregate fees billed in each
of the last two fiscal years for professional services rendered to the Registrant by the principal accountant for tax compliance,
tax advice and tax planning were $35,496 for 2016 and $33,600 for 2015.* These
services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state
and local entity tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii)
tax advice regarding tax qualification. All Other Fees The aggregate fees billed in each of the last
two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs
(a) through (c) of this Item were $57,800 for 2016 and $68,600 for 2015.* The other services provided to the Registrant
consisted of examinations pursuant to Rule 17f-2 of the Investment Company Act of 1940, as amended and filings of Form N-17f-2
“Certificate of Accounting of Securities and Similar Investments in the Custody of Management Investment Companies”
with the U.S. Securities and Exchange Commission (“17f-2 Services”) in addition to audit services, tax services and
17f-2 Services provided to other series of the Registrant. Pursuant to the Registrant’s Audit Committee
Charter that has been adopted by the audit committee, the audit committee shall approve all audit and permissible non-audit services
to be provided to the Registrant and all permissible non-audit services to be provided to its investment adviser or any entity
controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant
if the engagement relates directly to the operations and financial reporting of the Registrant. The audit committee has delegated
to its Chairman the approval of such services subject to reports to the full audit committee at its next subsequent meeting. The percentage of services described in each
of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C)
of Rule 2-01 of Regulation S-X, with respect to: Audit-Related Fees were 0%; Tax Fees were 0%; and Other Fees were 0%. Not applicable. The aggregate non-audit fees billed by the
Registrant's accountant for services rendered to the Registrant, and rendered to the Registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing
services to the Registrant for each of the last two fiscal years of the Registrant were $1,765,095 for
2016 and $3,926,504 for 2015.* * Restated
to reflect updated 2015 fee. Item 5. Audit Committee of Listed Registrants. Item 6. Investments. A Schedule of Investments in securities of
unaffiliated issuers as of the close of the Reporting Period is included as part of the report to shareholders filed under Item 1
of this Form N-CSR. Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies. Item 8. Portfolio Managers of Closed-End Management Investment
Companies. Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers. Item 10. Submission of Matters to a Vote
of Security Holders. Item 11. Controls and Procedures. The Registrant’s principal executive
and financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of
the filing date of this Form N-CSR, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under
the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Item 12. Exhibits. Not applicable. Certifications required by Rule 30a-2(a) under
the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibit 12(a)(2) to this Form N-CSR. 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/ Jean-Pierre Paquin Jean-Pierre Paquin 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/ Jean-Pierre Paquin Jean-Pierre Paquin By: (Signature and Title) /s/ Charles H. Schreiber Charles H. Schreiber Exhibit 12(a)(2) CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER
THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Jean-Pierre Paquin, certify that: Exhibit 12(a)(2) CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER
THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Charles H. Schreiber, certify that: Exhibit 12(b) CERTIFICATION PURSUANT TO RULE 30A-2(B)
UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Jean-Pierre Paquin, President
(Principal Executive Officer) of BBH Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Form N-CSR of the Registrant on
behalf of the BBH Limited Duration Fund, BBH Core Select, BBH Global Core Select, BBH International Equity Fund and BBH Intermediate
Municipal Bond Fund for the annual period ended October 31, 2016 (the “Report”) fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Exhibit 12(b) CERTIFICATION PURSUANT TO RULE 30A-2(B)
UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Charles H. Schreiber, Treasurer
(Principal Financial Officer) of BBH Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Form N-CSR of the Registrant on
behalf of the BBH Limited Duration Fund, BBH Core Select, BBH Global Core Select, BBH International Equity Fund and BBH Intermediate
Municipal Bond Fund for the annual period ended October 31, 2016 (the “Report”) fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Registrant. %9K1VPO;WHY2% K%^;OL0#)C"VB$7B*=%&5(BNUO+89"#0B-:Y$JI+IQ<)B+)4J
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MC1T%SM\&(4#*17?8++XL0#]&W[CZ3!
As of the period ended October 31, 2016 (the “Reporting Period”), the Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer and principal financial officer, principal accounting officer or controller or persons performing similar functions. During the Reporting Period, there have been no changes to, amendments to or waivers from, any provision of the code of ethics. A copy of this code of ethics can be obtained upon request, free of charge, by calling (800) 575 - 1265.
The Board of Trustees of the Registrant has determined that Andrew S. Frazier, John M. Tesoro and Mark M. Collins possess the attributes identified in Instruction (b) of Item 3 to Form N-CSR to each qualify as an “audit committee financial expert,” and has designated Andrew S. Frazier, John M. Tesoro and Mark M. Collins as the Registrant’s audit committee financial experts. Messrs. Andrew S. Frazier, John M. Tesoro and Mark M. Collins are “independent” Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
(a)
(b)
(c)
(d)
(e)(1)
(e)(2)
(f)
(g)
(h)
The Registrant’s audit committee has considered whether the provision of non-audit services that were rendered to the Registrant’s investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Not Applicable
(a)
(b)
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
(a)
(b)
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Registrant's second fiscal quarter of the period covered by this Form N-CSR, that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
(a)(1)
(a)(2)
(a)(3)
Not applicable.
(b)
Certifications required by Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are furnished as Exhibit 12(b) to this Form N-CSR.
Title:
President (Principal Executive Officer)
Date:
January 9, 2017
Title:
President (Principal Executive Officer)
Date:
January 9, 2017
Title:
Treasurer (Principal Financial Officer)
Date:
January 9, 2017
1. I have reviewed this report on Form N-CSR of BBH Trust on behalf of the
BBH Limited Duration Fund, BBH Core Select, BBH Global Core Select, BBH International Equity Fund and BBH Intermediate Municipal
Bond Fund;
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(s) 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(s) 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 internal control over financial reporting.
Date: January 9, 2017
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin, President
(Principal Executive Officer)
1. I have reviewed this report on Form N-CSR of BBH Trust on behalf of the
BBH Limited Duration Fund, BBH Core Select, BBH Global Core Select, BBH International Equity Fund and BBH Intermediate Municipal
Bond Fund;
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(s) 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(s) 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 internal control over financial reporting.
Date: January 9, 2017
/s/ Charles H. Schreiber
Charles H. Schreiber, Treasurer
(Principal Financial Officer)
Date: January 9, 2017
/s/ Jean-Pierre Paquin
Jean-Pierre Paquin, President
(Principal Executive Officer)
Date: January 9, 2017
/s/ Charles H. Schreiber
Charles H. Schreiber, Treasurer
(Principal Financial Officer)
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