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Sector Composition Changes in BIAHX until 1Q16

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Brown Advisory – WMC Strategic European Equity Fund

The Brown Advisory – WMC Strategic European Equity Fund – Investor Shares (BIAHX) “seeks to achieve total return by investing principally in equity securities issued by companies established or operating in Europe.” Generally, the fund will invest at least 80% of its net assets in companies “domiciled in or exercise the predominant part of their economic activity in Europe.” The fund considers Europe to be included in the MSCI Europe Index.

The fund’s management applies the bottom-up approach to stock selection and intends to hold them for long periods. It generally invests in 50–80 securities across the market cap. It looks for companies with an above-average business model or a technological advantage.

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The fund was invested across 68 holdings as of March 2016. That’s three more than a quarter ago. It was managing assets worth $1.1 billion. As of March, its equity holdings included British American Tobacco (BTI), Heineken (HEINY), L’Oréal (LRLCY), ASML Holding (ASML), and Salvatore Ferragamo SpA (SFRGF), which comprised 11.9% of the fund’s portfolio.

Portfolio changes in the Brown Advisory – WMC Strategic European Equity Fund

The portfolio composition of BIAHX is quite different from its peers. Unlike most other funds in this review, its largest sectoral holding is industrials. Apart from industrials, which forms 30% of the assets, consumer staples are also at the core of the fund’s holdings, forming a fifth of the fund’s portfolio. The fund isn’t invested in energy, telecom services, or utilities.

In the past one year until March, the fund manager has increased exposure to consumer discretionary and industrials. In the same period, exposure to financials has been reduced. The manager has also deployed more assets into equities. The composition of all other sectors is largely unchanged from a year ago. The industrials and information technology sectors have seen a few new stocks being added in March.

How has BIAHX fared in 1Q16? Let’s see in the next part of this series.

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