Brown Advisory, an independent investment management and strategic advisory firm, announced that the Brown Advisory Global Leaders Fund (BIALX) received an initial Five-Star Morningstar Overall Rating as of July 31, 2018, upon reaching the necessary track record for being ranked. The fund's three-year performance placed it in the top 10% of global equity managers by Morningstar in the World Large Stock category. Overall Morningstar Ratings™ and Percentile Rankings are based on risk-adjusted performance.

Mick Dillon, CFA, and Bertie Thomson, CFA, manage the fund, which launched July 1, 2015. They aim to deliver long-term outperformance by investing in leading global companies that are believed to have the ability to maintain favorable positions over extended periods, provide a unique customer experience and deliver outstanding long-term value to shareholders.

"When evaluating companies, we look for customer experiences and outcomes that are not easily replicated," says Dillon. "While most investors tend to focus on shareholder returns, we believe what matters more is focusing on the value a business delivers to its customers, because if you don't have a customer, you don't have a business."

Brown Advisory attributes the fund's outperformance to the four-step process used to identify 30 to 40 leading companies delivering exceptional customer outcomes:

• Franchise Quality – Every investment must exhibit a superior customer outcome. The Global Leaders team looks for sustainable businesses with multiple competitive advantages.
• Management Quality – The team prioritizes long-term management. More than half of the fund is invested in companies run by the founders or a family.
• Quantitative Measures – The team must see evidence in the numbers; a key target is 20+% return on invested capital (ROIC).
• Investability (Valuation) – Most potential investments fail here. The team seeks absolute value—not relative valuation—by estimating future cash flow based on growth, ROIC and competitive advantage period.

The team has a clear checklist against which every stock is assessed. It is a simple, repeatable process that leads the team each year to complete detailed fundamental research on approximately 150 companies, from which 20–25% are forensically assessed and typically five to eight new investments are made. The fund targets a 20% ROIC over time and has turnover of just under 20% annually, implying a holding period over five years.

"We look for companies that trade at a discount to their intrinsic value. We also look for asymmetric upside and identify businesses with moats, which help to nullify supply-side disruption," Thomson adds. "The entire industry is focused on picking the right stocks, but for us, capital allocation is more important."

In addition, the fund incorporates differentiating inputs from Brown Advisory's global research platform, including investigative primary research, integrated environmental, social and governance (ESG) analysis and third-party analytics.

As of July 31, 2018, the fund generated a 19.73% total return for the trailing one-year period versus the 11.12% return for the Russell Global Large-Cap Index and an annualized 11.99% return versus the benchmark's 8.89% return since inception (July 1, 2015).

About Brown Advisory Brown Advisory is an independent investment firm committed to providing its clients with a combination of first‐class investment performance, strategic advice and the highest level of service. Founded in 1993 as an affiliate of Alex. Brown & Sons, a leading U.S. investment bank, Brown Advisory became independent in 1998.

Today the firm serves private clients and institutions in 36 countries from eight offices globally and is responsible for approximately $66 billion in client assets as of July 31, 2018. The firm's colleague equity ownership, experienced investment professionals, collaborative investment process and client‐first culture help to make a material difference in the lives of its clients. For more information, please visit http://www.brownadvisory.com.