Independent US investment manager Brown Advisory is to merge its $162m US Flexible Equity fund with its $123m Equity Value, Fund Strategy can reveal.
The firm says the move is to act in the best interest of their clients as the two funds investment approaches are “too similar”, with the US Flexible fund better positioned to generate positive returns.
Hutch Vernon, currently the co-portfolio manager for the two-year old Flexible Equity strategy, will become the sole fund manager of the merged fund.
The firm’s total Ucits fund range has assets of $4.8bn strategy and has been managed by Vernon for 20 years.
Co-portfolio managers of the US Value fund, Mike Foss and Doron Eisenberg will remain members of the collaborative Brown Advisory research and investment team following the merger, the firm says.
A company spokesman says: “As part of its continual product review process and acting in the best interests of its clients, Brown Advisory has determined that it will merge its US Equity Value Fund into its US Flexible Equity fund.
“The commonalities of the two approaches make the Funds too similar to pursue separately, and Brown Advisory believes that the Flexible Equity fund is better positioned to provide attractive results for clients based on its fundamental and flexible approach to stock selection across the entire large-cap universe.”
The firm said the US Flexible Equity fund has seen a lot of appetite from European and UK investors.
The firm says: “The US Flexible Equity fund was launched under the firm’s Ucits umbrella in 2014 following increased appetite for a strategy in which valuation remains at the heart of the process but isn’t the sole driver. This ‘core’ approach has resonated well with UK and European clients in recent years.”
However, both funds lagged their respective benchmarks over a year, three years and five years time as of September 2016.
The US Flexible Equity fund has returned 9.2 per cent over the past year against the 15.4 per cent of the S&P 500, while the US Equity Value fund has returned 9.8 per cent compared to a 16.2 per cent return of the Russell 1000 Value.