Fund Profile

Brown Advisory US Smaller Companies 27 February 2023

Disclaimer

This is a non-independent marketing communication commissioned by Brown Advisory. 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.

Overview
A new version of this profile is available. View Latest
Overview

Brown Advisory US Smaller Companies (LON:BASC) provides investors with core small-cap exposure to US equities, with a weighted average market capitalisation of $6.8bn. BASC is run in a risk-controlled manner, with the managers seeking to add value by compounding over many years. BASC is managed by Chris Berrier and he is supported by associate portfolio manager George Sakellaris. Chris instigated the process used to manage BASC upon joining Brown Advisory over 17 years ago, and manages $6.7bn in the same strategy for other clients. The team’s long-term approach over this timeframe has been to focus on quality growth companies with one eye on valuation and, as such, the portfolio typically has lower debt, higher return on capital and higher growth prospects than the average small cap. The team has a long-term track record of outperforming in an asset class which itself has outperformed US large-cap equities over long periods of time.

BASC’s objective is capital growth and it does not specifically target companies that pay a dividend. As such, it does not usually pay a dividend itself. BASC has not employed gearing under Brown Advisory’s tenure, which began in April 2021, although this is a consequence of market conditions, rather than a permanent decision not to deploy gearing. Given that BASC’s investment strategy is designed as a core small-cap mandate, it is likely that any gearing deployed in future will be modest.

BASC currently trades at a 12% discount, a little wider than average. BASC has a triannual continuation vote, with the next vote likely to be in October 2023.

Analyst's View

BASC offers investors exposure to small and mid-sized companies in the world’s largest equity market and, arguably, one of the most dynamic economies. As Chris points out, smaller companies can be more volatile and this is something investors should keep in mind but, within that context, BASC’s careful approach to risk and position sizes means it can be considered a core holding which aims to deliver positive returns when smaller companies generally are doing so. Brown Advisory’s appointment in April 2021 came at a time when, arguably, its quality-focused investment philosophy was out of favour, which speaks to a level-headed decision by BASC’s board not to chase recent past performance when seeking a new manager. The early signs are that Chris and the team’s consistent approach to quality is beginning to show through and, in our view, quality and valuation are likely to be important factors in active equity portfolios in a higher interest rate environment, where money is no longer cheap.

BASC’s current discount of c.14% , while not excessive, is wider than its long-term average and may be a reflection of the fact that US smaller companies’ equities have not been particularly front of mind for investors when US large cap equities have done so well in recent years. Longer term, smaller companies can provide outperformance and with changing market conditions, this may be an attractive entry-point discount.

Bull

  • An asset class and a manager with a history of long-term outperformance
  • A careful risk-controlled approach to a volatile asset class
  • Higher interest rates may favour BASC’s investment style

Bear

  • Smaller companies can be volatile
  • BASC has no current gearing. Some investors choose investment trusts, in part, for their gearing
  • BASC does not usually pay a dividend
Continue to Portfolio

Fund History

21 Jun 2024 Ready for lift-off?
Managers at our small-cap event discuss the potential for smaller companies…
07 Jun 2024 Monthly round-up of investment trust news - #1
Jo and Ryan discuss the latest news in the investment trust world...
20 Jun 2024 Brown Advisory US Smaller Companies
Chris Berrier
Join this webinar as part of our week-long June online series 'Small caps - a lost decade' hosted by the team at Kepler Trust Intelligence...
29 May 2024 It’s a small world after all
A recent rally in smaller companies could be the start of a long-term recovery…
20 May 2024 Investing in US small-caps with BASC manager Christopher Berrier - Podcast: Trust Issues #31
We discuss opportunities for investors in the US small-cap sector with BASC manager Christopher Berrier...
14 May 2024 Playing the long game
Why BASC is well-positioned for the turning point in US small-caps…
09 Feb 2024 A bigger slice of pecan pie
The US deserves a higher allocation by UK investors, with BASC well-positioned to take advantage of depressed small-cap valuations…
03 Jan 2024 Probably better asking an octopus
Our investment trust experts uncurl a tentacle each and choose their ‘top picks’ for 2024…
22 Dec 2023 Is greed good?
With the Fear and Greed Index ending the year on a high, is investor optimism justified…?
08 Dec 2023 Fund Analysis
BASC’s manager believes low valuations may offer a starting point for long-term outperformance…
06 Dec 2023 Investing in US small caps with investment trusts
Closed-ended funds provide a simple way to access US smaller companies...
21 Sep 2023 Results analysis: Brown Advisory US Smaller Companies
BASC has outperformed its benchmark since Brown Advisory took the helm in 2021, but US smaller companies remain undervalued…
06 Sep 2023 You should be dancing…
North America should be a core part of any portfolio…
28 Jul 2023 It’s Déjà vu all over again
US stocks continue to trade at high valuations. Is that warranted and are there other options for investors looking to get exposure to the world’s largest economy?
19 Jul 2023 Simply the Best
Investing in high quality companies was a successful strategy for many years, but has its time passed?
12 May 2023 By the dawn’s early light
Could the news that inflation fell in the US in April herald a brighter outlook for investors?
05 Apr 2023 The opportunity in struggling smaller companies
As smaller companies valuations struggle, Brown Advisory US Smaller Companies' risk-aware approach to growth investing looks timely…
27 Feb 2023 Fund Analysis
BASC: small cap quality growth in the world’s largest equity market...
25 Nov 2022 Investing in small caps? Don’t pick up any cigarette butts
Value may be in vogue but it’s ultimately growth that delivers returns for shareholders…
29 Sep 2022 Results analysis: Brown Advisory US Smaller Companies
BASC’s managers took advantage of falling markets, in a tough year for small caps…
28 Sep 2022 Mind the gap
While chaos reigns in the short-term for markets, some investors see a growing disconnect between prices and reality...
28 Sep 2022 Slides and Audio: Brown Advisory US Smaller Companies
Download the presentation and listen to the audio from our 'Growth at an unreasonable price' event from 21 September...
07 Sep 2022 American muscle
Beating US indices is a monumental task. We examine the closed- and open-ended North American sectors to see how they have fared…
31 Aug 2022 Growth at an unreasonable price
Growth has taken a beating as inflation fears have soared, but the tide may be turning and we have six speakers at our next event ready to tell us why…
04 Aug 2022 Keeping to quality
BASC’s approach looks well set up to support small cap investors in tough times…
01 Jul 2022 Fund Analysis
BASC’s wide discount could prove an interesting long-term entry point…
17 Mar 2022 It's the end of the world as we know it
We examine five potential themes for investors seeking long-term returns in a troubled and uncertain world...
26 Nov 2021 Fund Analysis
BASC has performed strongly under its new manager…
17 Nov 2021 How Do You Like Them Apples
Judging whether the US market is expensive is not as easy as many make it out to be…
02 Nov 2021 Results analysis: Brown Advisory US Smaller Companies
BASC has made a solid start under the new manager, generating significant outperformance….
06 Oct 2021 Slides and Audio: Brown Advisory US Smaller Companies
Download the presentation and listen to the audio from our 'Now that's what I call a discount!' Autumn conference on 30 September...
29 Sep 2021 Quick out of the blocks
Following a change of management earlier this year, Brown Advisory US Smaller Companies has recorded a strong start under its new leadership. Here, we profile some of the companies that have driven this momentum…
23 Sep 2021 Now that's what I call a discount 2021!
For the second year running we examine trusts on discounts which, in our view, don't make sense...
15 Sep 2021 Bargains galore
We review our discounted opportunities portfolio, with one constituent rallying more than 30% in just two months…
24 Jun 2021 Sizing up US smaller companies
Knowledge is power when it comes to investing in US smaller companies. In this article we examine the way US asset manager Brown Advisory leverages its networks to gain an informational advantage…
18 May 2021 Allow us to reintroduce ourselves
Following a bold decision by its board, Jupiter US Smaller Companies is now known as Brown Advisory US Smaller Companies. Here, we introduce the new manager and explore the US based firm’s stellar track record in the space…
30 Apr 2021 Slides and Audio: Jupiter US Smaller Companies
Our research team at Kepler Trust Intelligence hosted a Q&A webinar with Chris Berrier, the new lead manager of the trust at Brown Advisory...
28 Apr 2021 Fund Analysis
JUS’s new manager brings a new strategy, and scope for the discount to narrow…
22 Apr 2021 FAANGs for the memories
The massive outperformance of mega-cap tech last year could become a thing of the past if anti-trust legislation and negative sentiment starts to bite...
09 Dec 2020 Flash update: Jupiter US Smaller Companies
Brown Advisory has been appointed to manage Jupiter US Smaller Companies, utilizing their small cap growth strategy…
14 May 2020 Sea change
While global giants like Amazon still hold the weather gauge, we examine the long term prospects for a shift in the prevailing wind...
11 Sep 2019 Nanny knows best: how regulation is influencing returns
New research suggests disruption is threatened by increased regulation, with clear consequences for investment strategists...
14 May 2019 Fund Analysis
Jupiter US Smaller Companies Trust, run by Robert Siddles for the past 18 years, looks to invest in the areas of the market that lacks positive sentiment...
31 Oct 2018 The Trump effect
Two years after the shock election of Donald Trump, we take a look at what the Trump administration has really meant for US markets and the trusts that invest in them...
30 Oct 2018 Fund Analysis
Performance has been dull over the medium term, however, 2018 has seen an extraordinary turnaround for the trust...
26 Apr 2018 Fund Analysis
Jupiter US Smaller Companies (JUS) aims to achieve long-term capital growth for shareholders from a diversified portfolio primarily of quoted US smaller and medium-sized companies..
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.