Disclosure – Non-Independent Marketing Communication
This is a non-independent marketing communication commissioned by Brown Advisory US Smaller Companies. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
- BASC has reported strong absolute returns in the year to the end of June 2021, during which period the board awarded the management contract to Brown Advisory after former manager Robert Siddles of Jupiter retired. On 07/05/2021 the trust’s name changed from Jupiter US Smaller Companies.
- NAV total returns were 35.8% over the 12 months, compared to a total return of 45.1% for the Russell 2000 index of US small caps. The discount narrowed from 15.6% to 5.2%, and shares appreciated 52.6%.
- Christopher Berrier took over as manager on 1 April, after a comprehensive manager selection process implemented by the board following the previous manager’s retirement. Chris quickly aligned the portfolio with the US Small-Cap Growth Strategy he has run for over 15 years.
- The previous management style was more value-focused which led to underperformance of the small cap index during the pandemic and in the first three months of the 2021 financial year.
- From 1 April to 30 June the new quality growth strategy generated returns of 4.2% compared to 4.1% for the Russell 2000. BASC’s approach has worked well in the choppy markets since, with NAV total returns under the new manager to 26/10/2021 being 7%, considerably ahead of the 4% index returns.
- Chairman Stephen White commented: “We are pleased with the improved performance following Brown Advisory's appointment and look forward to Christopher's approach playing out over the long term. His focus on quality is an ever more important consideration alongside his rigorous approach to stock selection which results in a portfolio that is markedly different to the benchmark.”
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