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

January 31, 2021
Portfolio Manager, Michael Keller, discusses how the U.S. Large Cap Equity portfolio companies performed over the most recent month-end.

In January 2021, BBH US Large Cap Equity Composite1 (“US Large Cap Equity” or “the Strategy”) declined by -4.45%, which compared to a loss of -1.01% for the S&P 500 Index. Our top performer in the month was Alcon and our largest detractor was Copart. We initiated a position in Sherwin-Williams Co.

Alcon is a market leader in surgical eye care products and contact lenses. Shares rose in January on expectations that the company’s end markets will continue to rebound as pandemic-related headwinds ease. Last quarter, Alcon reported flat revenues, while core operating margins returned to pre-COVID-19 levels. Despite recent pressures driven by the deferral of outpatient eye procedures during the pandemic, Alcon’s products remain essential solutions for cataracts, vitreoretinal disorders, and other ocular health issues.

Copart shares declined during the month following a very strong performance in 2020. The company has delivered solid earnings results in recent quarters despite a moderating recovery in miles driven as the resurgence in COVID-19 cases has inhibited mobility. Total revenue recently returned to growth in fiscal Q1 2021, as record-high auction prices more than offset a decline in volume due to fewer accidents. While we anticipate that accident frequency will remain subdued near-term, we believe that the long-term trends remain intact and that Copart can leverage its size, scale, and other advantages to strengthen its position within the industry over time.

Sherwin-Williams is a global leader in the manufacture, distribution, and sale of paint, coatings and related products to professional and other customers primarily in North and South America. The company’s industry position is particularly strong in architectural paints, where it leads in market share and has robust distribution. The company has a notably strong position in the U.S. market where it largely services professional painters who operate in a variety of end markets. Sherwin’s many competitive advantages include tremendous economies of scale from vertical integration, strong brand recognition, and high-quality products. We believe the company can continue to grow its top- and bottom line performance through organic share gains as well as smaller bolt-on acquisitions.

BBH Core Select Composite Gross and Net of Fees versus the S&P 500 benchmark as of January 31, 2021 and December 30, 2020.
  Total Returns Average Annual Total Returns
As of  01/31/2021 1 Mo.* 3 Mo.* YTD* 1 Yr. 3 Yr. 5 Yr. 10 Yr. Since Inception
BBH U.S. Large Cap Equity Composite (Gross of Fees)
-4.45% 8.40% -4.45% 7.92% 7.36% 12.17% 11.72% 10.33%
BBH U.S. Large Cap Equity Composite (Net of Fees)
8.14% -4.53% 6.86% 6.30% 11.06% 10.62% 9.25%
S&P 500 Index
-1.01% 14.05% -1.01% 17.25% 11.70% 16.16% 13.50% 9.73%
As of  12/31/2020 1 Mo.*
3 Mo.* YTD* 1 Yr. 3 Yr. 5 Yr. 10 Yr. Since Inception
BBH U.S. Large Cap Equity Composite (Gross of Fees) 3.34% 11.23% 13.72% 13.72% 11.35% 12.74% 12.32% 10.72%
BBH U.S. Large Cap Equity Composite (Net of Fees) 3.26%
10.96% 12.60% 12.60% 10.25% 11.63% 11.22% 9.63%
S&P 500 Index
3.84% 12.15% 18.40% 18.40% 14.18% 15.22% 13.88% 9.86%
* Returns are not annualized.
Sources: BBH & Co. and S&P
Past performance does not guarantee future results, and current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost.
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 January 31, 2021. Equity weighting to include Common Stock and Cash and Cash Equivalents.
Representative Account
Equity Weighting
As of January 31, 2021
Common Stock 99.5%
Cash and Cash Equivalents 0.5%
Representative Account Portfolio Characteristics as of January 31, 2021, includes Composite Assets, Number of Securities, Average Price/Earnings, Market Cap and Turnover.
Representative Account
Portfolio Characteristics
As of January 31, 2021
Composite Assets (mil)
Number of Securities Held 33
Average P/E 29.5
Average Market Cap (bil) $203.9
Turnover (Rolling 12 Months)
Exclude cash equivalents.
Composite Risk Statistics as of January 31, 2021.
Composite Risk Statistics
As of January 31, 2021
Beta 0.88
Alpha -2.22%
Tracking Error 4.78%
Upside / Downside Capture 81.7% / 94.9%
Risk statistics are reported gross of fees and are based on trailing 60 months.
Representative Account Sector Weighting as of January 31, 2021
Representative Account
Sector Weighting
As of January 31, 2021
Communication Services
Consumer Discretionary
Consumer Staples
Financials 12.8%
Health Care 16.2%
Industrials 12.3%
Information Technology
Real Estate 0.0%
Utilities 0.0%
Reported as a percentage of portfolio securities.
Representative Account Top 10 Companies as of January 31, 2021.
Representative Account
Top 10 Companies
As of January 31, 2021
Alphabet Inc.
Berkshire Hathaway Inc.
Zoetis Inc 4.5%
Linde PLC 4.4%
Arthur J Gallagher & Co 4.3%
Alcon Inc 4.2%
Mastercard Inc 4.2% Inc
Copart Inc 4.0%
Oracle Corp 3.4%
Reported as a percentage of total portfolio.

1 On 10/1/2020, the BBH Core Select Equity Composite was renamed the BBH US Large Cap Equity Composite.
2 Basis point (bps) is a unit that is equal to 1/100th of 1% and is used to denote the change in price or yield of a financial instrument.

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 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.

For purpose of complying with the GIPS® standards, the firm is defined as Brown Brothers Harriman Investment Management ("IM"). IM is a division of Brown Brothers Harriman & Co. ("BBH"). IM claims compliance with the Global Investment Performance Standards (GIPS®). To receive a list of composite descriptions of IM and/or a presentation that complies with the GIPS standards, 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. Time Weighted Rate of Return is used to determine performance of a portfolio in a Composite. A portfolio's rate of return is the percentage change from the beginning balance to the ending balance of the period. Capital changes as well as dividends and other income earned during a period are included in the ending balance. Any reinvestment of dividends or other income will be reflected in the beginning balance of the following period. Sub-periods returns are linked to calculate a portfolio return for the period. 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-09111-2021-02-12                              Exp. Date 03/31/2021

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