Brown Advisory identifies strong fixed income opportunities as Global Sustainable Total Return Bond Strategy turns three

• Manager sees compelling opportunities in countries and regions where rate cuts continue to be likely and necessary
• $474m Global Sustainable Total Return Bond UCITS Fund marks three years since launch

LONDON, 13 February 2025 – Brown Advisory, an independent and privately held global investment management firm that oversees $170.1 billion in client assets, continues to identify strong fixed income investment opportunities amid anticipated rate cuts via its Global Sustainable Total Return Bond UCITS Fund (“the Fund”), which was launched in February 2022 to complement the firm’s long-standing US sustainable fixed income platform.

The fund invests in sovereign bonds, investment grade corporate debt, securitised products and high-yield corporate bonds across global markets, which it identifies through a combination of comprehensive top-down macroeconomic analysis, rigorous bottom-up research and incorporating sustainability considerations into its investment process.

As the Fund reaches its three-year milestone, Ryan Myerberg, Co-Portfolio Manager of Brown Advisory’s Global Sustainable Total Return Bond strategy, comments on the current global macroeconomic environment and identifying investment opportunities:

“There are clear divergences in the economic outlooks for countries around the world. We expect the U.S. to see better economic performance coupled with ever-expanding deficits thus limiting a decline in longer-term interest rates. On the other hand, we continue to see a weaker economic picture in countries such as Canada, New Zealand, and within Europe. While we expect international markets to grow below trend, the threat of U.S. tariffs, either directly or indirectly, adds to the downside risk to growth, driving down inflation and leading to further and significant monetary easing in 2025, albeit at a slower pace than in the previous year. Japan remains the exception to this trend in developed market economies as the Bank of Japan, in our view, will continue to raise interest rates to slow upward pressure in wages and inflation.

“Trade policy and uncertainty will play a material role in driving further relative growth divergence between economies, with Germany, China, Canada, and Mexico being more sensitive than, for example, the United Kingdom and Australia.

“We believe that 2025 will offer attractive opportunities to invest in countries and regions where rate cuts are likely and necessary due to a cyclical slowdown. Our portfolio positioning should benefit on an absolute basis in a slowdown or recession, and on a relative basis in a soft landing, given the likelihood of long-term yields rising more than short-term yields.” 

The $474m Strategy, which launched in February 2022 with an Article 8 UCITS fund (GBP) and soon after a USD UCITS fund (March 2022), targets attractive long-term returns while producing positive sustainability outcomes through its investments. It also seeks to capture market opportunities while providing downside protection, avoiding investments that increasingly contain high levels of embedded interest rate risk. It is managed by Ryan Myerberg, Chris Diaz and Colby Stilson, and has attracted assets from U.K., European and Asian clients including, but not limited to, institutional investors, family offices and pension funds since its launch. 

Charlie van Straubenzee, Head of European Sales said: "The Global Sustainable Total Return Bond Strategy has garnered significant interest from institutional and intermediary investors seeking a fixed income solution that not only offers robust income and risk-adjusted returns but also aligns with their sustainability goals. Additionally, investors appreciate its bond-like characteristics, which help counterbalance equity risk in a multi-asset portfolio."