BBH U.S. Large Cap Equity Monthly Update – October 2021

Portfolio Managers, Michael Keller and Nicholas Haffenreffer discuss how the U.S. Large Cap Equity portfolio companies performed over the most recent month-end.

In October 2021, BBH US Large Cap Equity Composite (“US Large Cap Equity” or “the Strategy”) rose by 7.20%, which compared to a gain of 7.01% for the S&P 500 Index. One of our top performers in the month was Zoetis and one of our largest detractors was Starbucks. We exited our position in Comcast during the month.

Zoetis recorded double-digit revenue growth year-over-year in 1H21 driven by its Companion Animal business, in which all key products delivered solid year-over-year growth as the Company’s recent product innovations gained favor with veterinarian prescribers. Important secular tailwinds such as higher average spend per vet visit and greater pet ownership by millennials and Gen Z (who are typically willing to spend more on pet care) remain supportive of Companion Animal market growth, in our view. Zoetis fits especially well with our investment criteria and remains very well positioned in the animal health industry given its product diversity, extensive network of technical and veterinary operations specialists, and successful track record of developing innovative products.

Starbucks reported strong 3Q21 growth, with revenue and operating profit growth exceeding pre-pandemic levels by a double-digit rate. While the Company’s financial guidance contemplates strong revenue growth momentum, its near-term outlook for operating margins has softened due to a proactive step-up in wages. Starbucks is increasing wages to bolster staffing in stores given its expectation of continued strong top-line growth momentum as customer mobility increases. Although the margin pressure has affected short-term investor sentiment, in a tight labor environment impacting competitors of all sizes industrywide, we support bold action to further strengthen in-store service levels, which in our view should yield long-term benefits from high customer loyalty, engagement, and purchase frequency. Meanwhile, key metrics around rewards membership growth, digital transactions and demand trends remain strong and supportive of our long-term investment thesis.

Comcast’s broadband growth has been very strong in recent years and was the key driver of our investment thesis. However, its media assets are increasingly coming under competitive pressure given the changing industry landscape towards streaming and it remains unclear if further investment in these assets is value accretive. As our concerns around the need for continued investment in the media businesses outweighed impressive results in the Cable segment, we decided to exit the position.


Total Returns

Average Annual Total Returns

As of 10/31/2021 1 Mo.* 3 Mo.* YTD* 1 Yr. 3 Yr. 5 Yr. 10 Yr. Since

BBH US Large Cap Equity Composite (Gross of Fees)









BBH US Large Cap Equity Composite (Net of Fees)









S&P 500 Index









  Total Returns Average Annual Total Returns
As of 09/30/2021 1 Mo.* 3 Mo.* YTD* 1 Yr. 3 Yr. 5 Yr. 10 Yr.


BBH US Large Cap Equity Composite (Gross of Fees)









BBH US Large Cap Equity Composite (Net of Fees)









S&P 500 Index









* Returns are not annualized.

Sources: BBH & Co. and S&P

Past performance does not guarantee future results.
The S&P 500 is an unmanaged weighted index of 500 stocks providing a broad indicator of stock price movements. The composition of the index is materially different than the Strategy’s holdings. The index is not available for direct investment.

Representative Account
Equity Weighting
As of October 31, 2021

Common Stocks


Cash & Cash Equivalents




Representative Account
Portfolio Characteristics
As of October 31, 2021

Composite Assets (mil) $1,039.6

Number of Securities Held


Average P/E


Average Market Cap (bil)


Turnover (Rolling 12-Months)


Exclude cash equivalents

Representative Account
Sector Weighting
As of October 31, 2021

Communication Services


Consumer Discretionary


Consumer Staples






Health Care




Information Technology




Real Estate





Reported as a percentage of portfolio securities, excluding Cash and Cash Equivalents.



Representative Account
Top 10 Companies
As of October 31,  ,2021

Alphabet Inc


Berkshire Hathaway Inc


Zoetis Inc


Arthur J Gallagher & Co

4.8% Inc


Linde PLC


Copart Inc


Alcon Inc


Celanese Corp.


Mastercard Inc




Reported as a percentage of total portfolio.

Holdings are subject to change. Totals may not sum due to rounding.

Price/Earnings (P/E) ratio is a company’s current share price divided by earnings per-share.

Turnover ratio is the rate of trading in a portfolio; higher values imply more frequent trading.

Opinions, forecasts, and discussions about investment strategies represent the author’s views as of the date of this commentary and are subject to change without notice. References to specific securities, asset classes, and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations.

Contribution figures are of the Representative Account and are presented gross of fees and do not include cash and cash equivalents.

Purchase and sale information provided should not be considered as a recommendation to purchase or sell a particular security and that there is no assurance, as of the date of publication, that the securities purchased remain in a fund's portfolio or that securities sold have not been repurchased.


Investors should be able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of portfolios changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments. Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

The strategy may assume large positions in a small number of issuers which can increase the potential for greater price fluctuation.
Foreign investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.
Data presented is that of a single representative account ("Representative Account") that invests in the strategy. It is the account whose investment guidelines allow the greatest flexibility to express active management positions. It is managed with the same investment objectives and employs substantially the same investment philosophy and processes as the proposed investment strategy. It is the largest account as of the end of the most recent quarter.

Brown Brothers Harriman Investment Management (“IM”), a division of Brown Brothers Harriman & Co (“BBH”), claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. To receive additional information regarding IM, including a GIPS Composite Report for the strategy, contact Craig Schwalb at (212) 493-7217, or via email at

Gross of fee performance results for this composite do not reflect the deduction of investment advisory fees. Actual returns will be reduced by such fees. "Net" of fees performance results reflect the deduction of the maximum investment advisory fees. Returns include all dividends and interest, other income, realize and unrealized gain, are net of all brokerage commissions and execution costs. Results will vary amount client accounts. Performance calculated in U.S. dollars.

The Composite is fully discretionary, fee-paying accounts over $5 million that invest in a portfolio of approximately 25-35 companies with market capitalizations greater than $5 billion that are headquartered in North America, as well as in certain global firms located in other developed regions. This strategy is benchmarked to the S&P 500 Index.
Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2021. All rights reserved.

Not FDIC Insured        No Bank Guarantee        May Lose Money

IM-10295-2021-11-15        Exp. Date 12/31/2021

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