The Advisors’ Inner Circle Fund III
Brown Advisory Flexible Equity ETF
Brown Advisory Sustainable Growth ETF
Brown Advisory Sustainable Value ETF
ANNUAL FINANCIALS AND OTHER INFORMATION
SEPTEMBER 30, 2025
Investment
Adviser:
Brown Advisory LLC
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
TABLE OF CONTENTS
| Financial Statements (Form N-CSR Item 7) | |
| Schedules of Investments | 1 |
| Statements of Assets and Liabilities | 4 |
| Statements of Operations | 5 |
| Statements of Changes in Net Assets | 6 |
| Financial Highlights | 9 |
| Notes to Financial Statements | 12 |
| Report of Independent Registered Public Accounting Firm | 21 |
| Notice to Shareholders (Unaudited) | 22 |
| Other Information (Form N-CSR Items 8-11) (Unaudited) | 23 |
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| FLEXIBLE EQUITY ETF | |
| SEPTEMBER 30, 2025 |
SCHEDULE
OF INVESTMENTS (000)
COMMON STOCK** — 97.6%
| Shares | Value | |||||||
| Communication Services — 13.2% | ||||||||
| Alphabet, Cl A | 194 | $ | 47,238 | |||||
| Alphabet, Cl C | 187 | 45,482 | ||||||
| Meta Platforms, Cl A | 108 | 79,386 | ||||||
| T-Mobile US | 72 | 17,227 | ||||||
| 189,333 | ||||||||
| Consumer Discretionary — 11.0% | ||||||||
| Amazon.com * | 282 | 61,832 | ||||||
| Amer Sports * | 698 | 24,265 | ||||||
| Booking Holdings | 6 | 32,903 | ||||||
| Lowe’s | 60 | 15,110 | ||||||
| TJX | 166 | 23,947 | ||||||
| 158,057 | ||||||||
| Consumer Staples — 1.9% | ||||||||
| Mondelez International, Cl A | 312 | 19,462 | ||||||
| Nomad Foods | 683 | 8,981 | ||||||
| 28,443 | ||||||||
| Energy — 2.0% | ||||||||
| Suncor Energy | 707 | 29,546 | ||||||
| Financials — 26.0% | ||||||||
| American International Group | 254 | 19,980 | ||||||
| Bank of America | 499 | 25,753 | ||||||
| Berkshire Hathaway, Cl B * | 104 | 52,106 | ||||||
| Charles Schwab | 235 | 22,438 | ||||||
| First Citizens BancShares, Cl A | 15 | 27,288 | ||||||
| Fiserv * | 206 | 26,592 | ||||||
| KKR | 423 | 54,956 | ||||||
| Mastercard, Cl A | 107 | 60,831 | ||||||
| Progressive | 85 | 20,991 | ||||||
| Visa, Cl A | 185 | 63,312 | ||||||
| 374,247 | ||||||||
COMMON STOCK** — continued
| Shares | Value | |||||||
| Health Care — 8.8% | ||||||||
| Align Technology * | 84 | $ | 10,477 | |||||
| Danaher | 66 | 13,003 | ||||||
| Edwards Lifesciences * | 350 | 27,234 | ||||||
| Elevance Health | 69 | 22,302 | ||||||
| Illumina * | 135 | 12,840 | ||||||
| UnitedHealth Group | 121 | 41,932 | ||||||
| 127,788 | ||||||||
| Industrials — 10.4% | ||||||||
| Canadian National Railway | 130 | 12,225 | ||||||
| Carrier Global | 442 | 26,365 | ||||||
| Ferguson Enterprises | 69 | 15,459 | ||||||
| General Electric | 74 | 22,323 | ||||||
| Old Dominion Freight Line | 77 | 10,865 | ||||||
| Uber Technologies * | 238 | 23,358 | ||||||
| United Rentals | 42 | 39,900 | ||||||
| 150,495 | ||||||||
| Information Technology — 24.3% | ||||||||
| Adobe * | 38 | 13,315 | ||||||
| Analog Devices | 91 | 22,268 | ||||||
| Apple | 91 | 23,095 | ||||||
| Autodesk * | 70 | 22,363 | ||||||
| Intuit | 48 | 32,762 | ||||||
| KLA | 24 | 25,350 | ||||||
| Marvell Technology | 140 | 11,731 | ||||||
| Microsoft | 224 | 115,826 | ||||||
| Taiwan Semiconductor Manufacturing ADR | 256 | 71,391 | ||||||
| Workday, Cl A * | 57 | 13,729 | ||||||
| 351,830 | ||||||||
| Total Common Stock | ||||||||
| (Cost $912,972) | 1,409,739 | |||||||
| Total Investments - 97.6% | ||||||||
| (Cost $912,972) | $ | 1,409,739 | ||||||
Percentages are based on Net Assets of $1,444,706.
| ** | More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. |
| * | Non-income producing security. |
ADR —
American Depositary Receipt
Cl — Class
As of September 30, 2025, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance on fair value measurements and disclosure under U.S. generally accepted accounting principles.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
1
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SUSTAINABLE GROWTH ETF | |
| SEPTEMBER 30, 2025 |
SCHEDULE
OF INVESTMENTS (000)
COMMON STOCK** — 98.1%
| Shares | Value | |||||||
| Communication Services — 3.3% | ||||||||
| Spotify Technology * | 15 | $ | 10,176 | |||||
| Trade Desk, Cl A * | 163 | 7,997 | ||||||
| 18,173 | ||||||||
| Consumer Discretionary — 11.2% | ||||||||
| Airbnb, Cl A * | 94 | 11,407 | ||||||
| Amazon.com * | 181 | 39,702 | ||||||
| Chipotle Mexican Grill, Cl A * | 263 | 10,317 | ||||||
| 61,426 | ||||||||
| Financials — 17.3% | ||||||||
| Ares Management, Cl A | 72 | 11,512 | ||||||
| Arthur J Gallagher | 56 | 17,345 | ||||||
| Charles Schwab | 162 | 15,435 | ||||||
| KKR | 128 | 16,683 | ||||||
| Progressive | 53 | 13,012 | ||||||
| Visa, Cl A | 62 | 21,086 | ||||||
| 95,073 | ||||||||
| Health Care — 6.8% | ||||||||
| Danaher | 63 | 12,569 | ||||||
| Intuitive Surgical * | 26 | 11,605 | ||||||
| West Pharmaceutical Services | 50 | 13,014 | ||||||
| 37,188 | ||||||||
| Industrials — 12.9% | ||||||||
| Carrier Global | 201 | 11,990 | ||||||
| Equifax | 43 | 11,116 | ||||||
COMMON STOCK** — continued
| Shares | Value | |||||||
| Industrials — continued | ||||||||
| General Electric | 41 | $ | 12,405 | |||||
| Uber Technologies * | 139 | 13,649 | ||||||
| Veralto | 104 | 11,135 | ||||||
| Verisk Analytics, Cl A | 42 | 10,620 | ||||||
| 70,915 | ||||||||
| Information Technology — 44.8% | ||||||||
| Cadence Design Systems * | 39 | 13,807 | ||||||
| Datadog, Cl A * | 95 | 13,528 | ||||||
| Dynatrace * | 172 | 8,341 | ||||||
| Intuit | 31 | 21,423 | ||||||
| KLA | 11 | 11,613 | ||||||
| Marvell Technology | 208 | 17,451 | ||||||
| Microsoft | 88 | 45,390 | ||||||
| Monolithic Power Systems | 17 | 15,902 | ||||||
| NVIDIA | 245 | 45,802 | ||||||
| Samsara, Cl A * | 108 | 4,025 | ||||||
| ServiceNow * | 17 | 15,376 | ||||||
| Shopify, Cl A * | 51 | 7,625 | ||||||
| Snowflake, Cl A * | 39 | 8,817 | ||||||
| Taiwan Semiconductor Manufacturing ADR | 64 | 17,836 | ||||||
| 246,936 | ||||||||
| Materials — 1.8% | ||||||||
| Ecolab | 35 | 9,684 | ||||||
| Total Common Stock | ||||||||
| (Cost $363,218) | 539,395 | |||||||
| Total Investments - 98.1% | ||||||||
| (Cost $363,218) | $ | 539,395 | ||||||
Percentages are based on Net Assets of $550,110.
| ** | More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. |
| * | Non-income producing security. |
ADR —
American Depositary Receipt
Cl — Class
As of September 30, 2025, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance on fair value measurements and disclosure under U.S. generally accepted accounting principles.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
2
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SUSTAINABLE VALUE ETF | |
| SEPTEMBER 30, 2025 |
SCHEDULE
OF INVESTMENTS (000)
COMMON STOCK** — 95.3%
| Shares | Value | |||||||
| Communication Services — 7.6% | ||||||||
| Alphabet, Cl C | 11 | $ | 2,664 | |||||
| Comcast, Cl A | 180 | 5,665 | ||||||
| Nexstar Media Group, Cl A | 9 | 1,786 | ||||||
| T-Mobile US | 20 | 4,692 | ||||||
| 14,807 | ||||||||
| Consumer Discretionary — 3.9% | ||||||||
| Expedia Group | 11 | 2,391 | ||||||
| LKQ | 83 | 2,548 | ||||||
| Wyndham Hotels & Resorts | 34 | 2,718 | ||||||
| 7,657 | ||||||||
| Consumer Staples — 4.2% | ||||||||
| Kenvue | 81 | 1,308 | ||||||
| Unilever ADR | 115 | 6,827 | ||||||
| 8,135 | ||||||||
| Energy — 5.2% | ||||||||
| Schlumberger | 187 | 6,419 | ||||||
| Weatherford International | 53 | 3,619 | ||||||
| 10,038 | ||||||||
| Financials — 20.0% | ||||||||
| American International Group | 83 | 6,508 | ||||||
| Bank of America | 145 | 7,463 | ||||||
| Citigroup | 56 | 5,662 | ||||||
| Equitable Holdings | 74 | 3,778 | ||||||
| Fidelity National Information Services | 78 | 5,153 | ||||||
| KKR | 24 | 3,149 | ||||||
| Willis Towers Watson | 21 | 7,268 | ||||||
| 38,981 | ||||||||
| Health Care — 18.5% | ||||||||
| Cardinal Health | 44 | 6,955 | ||||||
| Elevance Health | 12 | 3,743 | ||||||
COMMON STOCK** — continued
| Shares | Value | |||||||
| Health Care — continued | ||||||||
| Gilead Sciences | 28 | $ | 3,138 | |||||
| Hologic * | 41 | 2,781 | ||||||
| ICON * | 26 | 4,635 | ||||||
| Labcorp Holdings | 15 | 4,354 | ||||||
| Medtronic | 26 | 2,485 | ||||||
| Sanofi ADR | 170 | 8,037 | ||||||
| 36,128 | ||||||||
| Industrials — 10.1% | ||||||||
| Ferguson Enterprises | 27 | 6,130 | ||||||
| Masco | 42 | 2,952 | ||||||
| Pentair | 41 | 4,552 | ||||||
| Trane Technologies | 9 | 3,857 | ||||||
| Waste Connections | 12 | 2,163 | ||||||
| 19,654 | ||||||||
| Information Technology — 12.1% | ||||||||
| Applied Materials | 21 | 4,277 | ||||||
| Cisco Systems | 28 | 1,884 | ||||||
| Dell Technologies, Cl C | 41 | 5,743 | ||||||
| Flex * | 72 | 4,191 | ||||||
| NXP Semiconductors | 13 | 2,913 | ||||||
| TD SYNNEX | 26 | 4,227 | ||||||
| 23,235 | ||||||||
| Materials — 7.5% | ||||||||
| CRH | 84 | 10,104 | ||||||
| Smurfit WestRock | 103 | 4,376 | ||||||
| 14,480 | ||||||||
| Real Estate — 3.0% | ||||||||
| CBRE Group, Cl A * | 37 | 5,772 | ||||||
| Utilities — 3.2% | ||||||||
| Constellation Energy | 19 | 6,203 | ||||||
| Total Common Stock | ||||||||
| (Cost $160,513) | 185,090 | |||||||
| Total Investments - 95.3% | ||||||||
| (Cost $160,513) | $ | 185,090 | ||||||
Percentages are based on Net Assets of $194,168.
| ** | More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. |
| * | Non-income producing security. |
ADR —
American Depositary Receipt
Cl — Class
As of September 30, 2025, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance on fair value measurements and disclosure under U.S. generally accepted accounting principles.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
3
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
STATEMENTS OF ASSETS AND LIABILITIES (000)
| Brown Advisory Flexible Equity ETF | Brown Advisory Sustainable Growth ETF | Brown Advisory Sustainable Value ETF | ||||||||||
| Assets: | ||||||||||||
| Investments, at Value (Cost $912,972, $363,218 and $160,513) | $ | 1,409,739 | $ | 539,395 | $ | 185,090 | ||||||
| Cash | 33,278 | 10,839 | 9,037 | |||||||||
| Receivable for Capital Shares Sold | 7,024 | 3,972 | 1,615 | |||||||||
| Dividend and Interest Receivable | 424 | 140 | 114 | |||||||||
| Reclaim Receivable | 123 | – | 11 | |||||||||
| Deferred Offering Costs | 28 | – | – | |||||||||
| Total Assets | 1,450,616 | 554,346 | 195,867 | |||||||||
| Liabilities: | ||||||||||||
| Payable for Investment Securities Purchased | 5,092 | 3,887 | 1,545 | |||||||||
| Payable to Investment Adviser | 532 | 220 | 77 | |||||||||
| Payable to Administrator | 46 | 18 | 7 | |||||||||
| Chief Compliance Officer Fees Payable | 3 | 2 | 1 | |||||||||
| Payable to Trustees | 1 | 1 | – | |||||||||
| Other Accrued Expenses and Other Payables | 236 | 108 | 69 | |||||||||
| Total Liabilities | 5,910 | 4,236 | 1,699 | |||||||||
| Net Assets | $ | 1,444,706 | $ | 550,110 | $ | 194,168 | ||||||
| Commitments and Contingencies† | ||||||||||||
| Net Assets Consist of: | ||||||||||||
| Paid-in Capital | $ | 960,745 | $ | 377,842 | $ | 169,810 | ||||||
| Total Distributable Earnings | 483,961 | 172,268 | 24,358 | |||||||||
| Net Assets | $ | 1,444,706 | $ | 550,110 | $ | 194,168 | ||||||
| Outstanding
Shares of beneficial interest (unlimited authorization — no par value)(1) |
53,474,521 | 20,775,247 | 7,211,542 | |||||||||
| Net Asset Value, Offering and Redemption Price Per Share(1) | $ | 27.02 | $ | 26.48 | $ | 26.92 | ||||||
| (1) | Figures not rounded to (000)s. |
| † | See Note 5 in the Notes to Financial Statements. |
The accompanying notes are an integral part of the financial statements.
4
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| FOR THE PERIOD ENDED | |
| SEPTEMBER 30, 2025 |
STATEMENTS OF OPERATIONS (000)
| Brown Advisory Flexible Equity ETF(1) | Brown Advisory Sustainable Growth ETF(2) | Brown Advisory Sustainable Value ETF(2) | ||||||||||
| Investment Income: | ||||||||||||
| Dividends | $ | 9,147 | $ | 775 | $ | 745 | ||||||
| Interest | 439 | 104 | 82 | |||||||||
| Less: Foreign Taxes Withheld | (246 | ) | (11 | ) | (4 | ) | ||||||
| Total Investment Income | 9,340 | 868 | 823 | |||||||||
| Expenses: | ||||||||||||
| Investment Advisory Fees | 5,065 | 891 | 315 | |||||||||
| Administration Fees | 428 | 60 | 19 | |||||||||
| Trustees’ Fees | 15 | 4 | 1 | |||||||||
| Chief Compliance Officer Fees | 8 | 3 | 1 | |||||||||
| Offering Costs | 132 | 10 | 10 | |||||||||
| Registration and Filing Fees | 131 | 49 | 24 | |||||||||
| Professional Fees | 59 | 28 | 20 | |||||||||
| Custodian Fees | 19 | 4 | 3 | |||||||||
| Printing Fees | 17 | 5 | 2 | |||||||||
| Pricing Fees | 1 | 1 | 1 | |||||||||
| Other Expenses | 35 | 17 | 12 | |||||||||
| Total Expenses | 5,910 | 1,072 | 408 | |||||||||
| Less: | ||||||||||||
| Waiver of Investment Advisory Fees (see Note 5) | (437 | ) | (137 | ) | (74 | ) | ||||||
| Net Expenses | 5,473 | 935 | 334 | |||||||||
| Net Investment Income (Loss) | 3,867 | (67 | ) | 489 | ||||||||
| Net Realized Gain (Loss) on: | ||||||||||||
| Investments(3) | 57,174 | 53,278 | 7,004 | |||||||||
| Net Realized Gain (Loss) | 57,174 | 53,278 | 7,004 | |||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||
| Investments | 43,858 | (25,781 | ) | 2,785 | ||||||||
| Net Change in Unrealized Appreciation (Depreciation) | 43,858 | (25,781 | ) | 2,785 | ||||||||
| Net Realized and Unrealized Gain (Loss) | 101,032 | 27,497 | 9,789 | |||||||||
| Net Increase in Net Assets Resulting from Operations | $ | 104,899 | $ | 27,430 | $ | 10,278 | ||||||
| (1) | Commenced operations on November 15, 2024. |
| (2) | Commenced operations on June 13, 2025. |
| (3) | Includes realized gains (losses) as a result of in-kind redemptions. (See Note 6 in Notes to Financial Statements.) |
The accompanying notes are an integral part of the financial statements.
5
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| FLEXIBLE EQUITY ETF |
STATEMENT OF CHANGES IN NET ASSETS (000)
| Period Ended September 30, 2025(1) | ||||
| Operations: | ||||
| Net Investment Income | $ | 3,867 | ||
| Net Realized Gain | 57,174 | |||
| Net Change in Unrealized Appreciation | 43,858 | |||
| Net Increase in Net Assets Resulting From Operations | 104,899 | |||
| Distributions: | (625 | ) | ||
| Capital Share Transactions: | ||||
| Issued | 574,625 | |||
| Issuances in Connection with In-Kind Contribution (see Note 7) | 913,363 | |||
| Redeemed | (147,556 | ) | ||
| Net Increase in Net Assets From Capital Share Transactions | 1,340,432 | |||
| Total Increase in Net Assets | 1,444,706 | |||
| Net Assets: | ||||
| Beginning of Period | – | |||
| End of Period | $ | 1,444,706 | ||
| Share Transactions: | ||||
| Issued | 22,870 | |||
| Issuances in Connection with In-Kind Contribution (see Note 7) | 36,535 | |||
| Redeemed | (5,930 | ) | ||
| Net Increase in Shares Outstanding From Share Transactions | 53,475 | |||
| (1) | Commenced operations on November 15, 2024. |
The accompanying notes are an integral part of the financial statements.
6
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SUSTAINABLE GROWTH ETF |
STATEMENT OF CHANGES IN NET ASSETS (000)
| Period Ended September 30, 2025(1) | ||||
| Operations: | ||||
| Net Investment Loss | $ | (67 | ) | |
| Net Realized Gain | 53,278 | |||
| Net Change in Unrealized Depreciation | (25,781 | ) | ||
| Net Increase in Net Assets Resulting From Operations | 27,430 | |||
| Capital Share Transactions: | ||||
| Issued | 170,223 | |||
| Issuances in Connection with In-Kind Contribution (see Note 7) | 452,881 | |||
| Redeemed | (100,424 | ) | ||
| Net Increase in Net Assets From Capital Share Transactions | 522,680 | |||
| Total Increase in Net Assets | 550,110 | |||
| Net Assets: | ||||
| Beginning of Period | – | |||
| End of Period | $ | 550,110 | ||
| Share Transactions: | ||||
| Issued | 6,580 | |||
| Issuances in Connection with In-Kind Contribution (see Note 7) | 18,115 | |||
| Redeemed | (3,920 | ) | ||
| Net Increase in Shares Outstanding From Share Transactions | 20,775 | |||
| (1) | Commenced operations on June 13, 2025. |
The accompanying notes are an integral part of the financial statements.
7
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SUSTAINABLE VALUE ETF |
STATEMENT OF CHANGES IN NET ASSETS (000)
| Period Ended September 30, 2025(1) | ||||
| Operations: | ||||
| Net Investment Income | $ | 489 | ||
| Net Realized Gain | 7,004 | |||
| Net Change in Unrealized Appreciation | 2,785 | |||
| Net Increase in Net Assets Resulting From Operations | 10,278 | |||
| Capital Share Transactions: | ||||
| Issued | 115,850 | |||
| Issuances in Connection with In-Kind Contribution (see Note 7) | 89,538 | |||
| Redeemed | (21,498 | ) | ||
| Net Increase in Net Assets From Capital Share Transactions | 183,890 | |||
| Total Increase in Net Assets | 194,168 | |||
| Net Assets: | ||||
| Beginning of Period | – | |||
| End of Period | $ | 194,168 | ||
| Share Transactions: | ||||
| Issued | 4,470 | |||
| Issuances in Connection with In-Kind Contribution (see Note 7) | 3,582 | |||
| Redeemed | (840 | ) | ||
| Net Increase in Shares Outstanding From Share Transactions | 7,212 | |||
| (1) | Commenced operations on June 13, 2025. |
The accompanying notes are an integral part of the financial statements.
8
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| FLEXIBLE EQUITY ETF |
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios For a Share
Outstanding Throughout the Period
| Period Ended September 30,
2025(1) |
||||
| Net Asset Value, Beginning of Period | $ | 25.00 | ||
| Income from Investment Operations: | ||||
| Net Investment Income* | 0.09 | |||
| Net Realized and Unrealized Gain | 1.95 | |||
| Total from Investment Operations | 2.04 | |||
| Dividends and Distributions: | ||||
| Net Investment Income | (0.02 | ) | ||
| Total Dividends and Distributions | (0.02 | ) | ||
| Net Asset Value, End of Period | $ | 27.02 | ||
| Total Return† | 8.15 | % | ||
| Ratios and Supplemental Data | ||||
| Net Assets, End of Period (Thousands) | $ | 1,444,706 | ||
| Ratio of Expenses to Average Net Assets(2) | 0.54 | %†† | ||
| Ratio of Expenses to Average Net Assets (Excluding Waivers)(2) | 0.60 | %†† | ||
| Ratio of Net Investment Income to Average Net Assets(2) | 0.39 | %†† | ||
| Portfolio Turnover Rate‡ | 14 | % | ||
| * | Per share data calculated using average shares method. |
| † | Total return is for the period indicated and has not been annualized. Returns shown do not reflect the deductions of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| †† | Annualized. |
| ‡ | Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. Excludes effect of securities received or delivered from processing in-kind creations or redemptions. |
| (1) | Commenced operations on November 15, 2024. |
| (2) | Excludes expenses incurred indirectly as a result of investments in underlying funds. |
The accompanying notes are an integral part of the financial statements.
9
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SUSTAINABLE GROWTH ETF |
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios For a Share
Outstanding Throughout the Period
| Period
Ended September 30, 2025(1) |
||||
| Net Asset Value, Beginning of Period | $ | 25.00 | ||
| Income from Investment Operations: | ||||
| Net Investment Loss* | – | |||
| Net Realized and Unrealized Gain | 1.48 | |||
| Total from Investment Operations | 1.48 | |||
| Net Asset Value, End of Period | $ | 26.48 | ||
| Total Return† | 5.92 | % | ||
| Ratios and Supplemental Data | ||||
| Net Assets, End of Period (Thousands) | $ | 550,110 | ||
| Ratio of Expenses to Average Net Assets | 0.61 | %†† | ||
| Ratio of Expenses to Average Net Assets (Excluding Waivers) | 0.70 | %†† | ||
| Ratio of Net Investment Loss to Average Net Assets | (0.04 | )%†† | ||
| Portfolio Turnover Rate‡ | 18 | % | ||
| * | Per share data calculated using average shares method. |
| † | Total return is for the period indicated and has not been annualized. Returns shown do not reflect the deductions of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| †† | Annualized. |
| ‡ | Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. Excludes effect of securities received or delivered from processing in-kind creations or redemptions. |
| (1) | Commenced operations on June 13, 2025. |
Amount designated as “-” is $0 or has been rounded to $0.
The accompanying notes are an integral part of the financial statements.
10
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SUSTAINABLE VALUE ETF |
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios For a Share
Outstanding Throughout the Period
| Period Ended September 30, 2025(1) | ||||
| Net Asset Value, Beginning of Period | $ | 25.00 | ||
| Income from Investment Operations: | ||||
| Net Investment Income* | 0.08 | |||
| Net Realized and Unrealized Gain | 1.84 | |||
| Total from Investment Operations | 1.92 | |||
| Net Asset Value, End of Period | $ | 26.92 | ||
| Total Return† | 7.68 | % | ||
| Ratios and Supplemental Data | ||||
| Net Assets, End of Period (Thousands) | $ | 194,168 | ||
| Ratio of Expenses to Average Net Assets(2) | 0.71 | %†† | ||
| Ratio of Expenses to Average Net Assets (Excluding Waivers)(2) | 0.87 | %†† | ||
| Ratio of Net Investment Income to Average Net Assets(2) | 1.05 | %†† | ||
| Portfolio Turnover Rate‡ | 13 | % | ||
| * | Per share data calculated using average shares method. |
| † | Total return is for the period indicated and has not been annualized. Returns shown do not reflect the deductions of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| †† | Annualized. |
| ‡ | Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. Excludes effect of securities received or delivered from processing in-kind creations or redemptions. |
| (1) | Commenced operations on June 13, 2025. |
| (2) | Excludes expenses incurred indirectly as a result of investments in underlying funds. |
The accompanying notes are an integral part of the financial statements.
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| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
NOTES TO FINANCIAL STATEMENTS
1. Organization:
The Advisors’ Inner Circle Fund III (the “Trust”) is organized as a Massachusetts business trust under an Amended and Restated Agreement and Declaration of Trust dated July 24, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with 47 Funds. The financial statements herein are those of the Brown Advisory Flexible Equity ETF, the Brown Advisory Sustainable Growth ETF, and the Brown Advisory Sustainable Value ETF (the “Funds”). The investment objective of the Brown Advisory Flexible Equity ETF is to seek to achieve long-term growth of capital. The investment objective of the Brown Advisory Sustainable Growth ETF is to seek to achieve capital appreciation. The investment objective of the Brown Advisory Sustainable Value ETF is to seek to achieve long-term capital appreciation. Each of the Funds are classified as a diversified investment company. Brown Advisory LLC serves as the Funds’ investment adviser (the “Adviser”). The Funds currently offer Investor Shares. The Brown Advisory Flexible Equity ETF commenced operations on November 15, 2024. The Brown Advisory Sustainable Growth ETF and the Brown Advisory Sustainable Value ETF commenced operations on June 13, 2025. The financial statements of the remaining funds of the Trust are presented separately. The assets of each fund are segregated, and a shareholder’s interest is limited to the fund in which shares are held.
Shares of the Funds are listed and traded on The NASDAQ Stock Market (the “Exchange”). Market prices for shares of the Funds may be different from their net asset value (“NAV”). The Funds issue and redeem shares on a continuous basis to certain institutional investors (typically market makers or other broker-dealers) at NAV only in large blocks of shares, called “Creation Units”. Transactions for the Funds are generally conducted in exchange for the deposit or delivery of cash. Once created, shares trade in a secondary market at market prices that change throughout the day in share amounts less than a Creation Unit.
2. Significant Accounting Policies:
The accompanying financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and are presented in U.S. dollars which is the functional currency of the Funds. The Funds are each an investment company and therefore apply the accounting and reporting guidance issued by the U.S. Financial Accounting Standards Board (“FASB”) in Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies. The following are significant accounting policies which are consistently followed in the preparation of the financial statements.
Use of Estimates — The preparation of financial statements, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.
Security Valuation — Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on an exchange or market (foreign or domestic) on which they are traded on valuation date (or at approximately 4:00pm Eastern Standard Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates.
Securities for which market prices are not “readily available” are valued in accordance with fair value procedures (the “Fair Value Procedures”) established by the Adviser and approved by the Trust’s Board of Trustees (the “Board”). Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as the “valuation designee” to determine the fair value of securities and other instruments for which no readily available market quotations are available. The Fair Value Procedures are implemented through a Fair Value Committee (the “Committee”) of the Adviser.
Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; the security has not been traded for an extended period of time; the security’s primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government imposed restrictions. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.
In accordance with U.S. GAAP, the Funds disclose fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
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| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
| ● | Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; |
| ● | Level 2 — Other significant observable inputs (includes quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with the Adviser’s pricing procedures, etc.); and |
| ● | Level 3 — Prices, inputs or proprietary modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement.
For details of investment classifications, reference the Schedules of Investments.
Federal Income Taxes — It is each Fund’s intention to qualify as a regulated investment company for Federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986, as amended. Accordingly, no provision for Federal income taxes has been made in the financial statements.
The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether it is “more-likely-than-not” (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current period. The Funds did not record any tax provision in the current period. However, management’s conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., from commencement of operations, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof. The Funds’ Federal income tax returns are subject to examination by the Internal Revenue Service (the “IRS”) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. As of September 30, 2025, the Funds’ fiscal year end, the Funds had no material uncertain tax positions and did not have a liability for any unrecognized tax benefits. As of September 30, 2025, the Funds’ fiscal year end, the Funds had no examination in progress and management is not aware of any tax positions for which it is reasonably possible that the amounts of unrecognized tax benefits will significantly change in the next twelve months.
As of and during the period ended September 30, 2025, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the period, the Funds did not incur any interest or penalties.
Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. The Funds or their agent files withholding tax reclaims in certain jurisdictions to recover certain amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. Professional fees paid to those that provide assistance in receiving the tax reclaims, which generally are contingent upon successful receipt of reclaimed amounts, are recorded in Professional Fees on the Statements of Operations once the amounts are due. The professional fees related to pursuing these tax reclaims are not subject to the Adviser’s expense limitation agreement.
Security Transactions and Investment Income — Security transactions are accounted for on trade date. Costs used in determining realized gains and losses on the sale of investment securities are based on the specific identification method. Dividend income and expense are recorded on the ex-dividend date. Dividend income is recorded net of unrecoverable withholding tax. Interest income is recognized on the accrual basis from settlement date. Certain dividends and expenses from foreign securities will be recorded as soon as the Funds are informed of the dividend if such information is obtained subsequent to the ex-dividend date.
Investments in Real Estate Investment Trusts (“REITs”) — Dividend income from REITs is recorded based on the income included in distributions received from the REIT investments using published REIT reclassifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year end, and may differ from the estimated amounts.
Foreign Currency Translation — The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars on the date of valuation. The Funds do not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments on the Statements of Operations. Net realized and unrealized gains and losses on foreign currency transactions represent net foreign exchange gains or losses from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement dates on securities transactions and the difference between the amount of the investment income and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent amounts actually received or paid.
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| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
Expenses — Most expenses of the Trust can be directly attributed to a particular fund. Expenses which cannot be directly attributed to a particular fund are apportioned among the funds of the Trust based on the number of funds and/or relative net assets.
Cash — Idle cash may be swept into various time deposit accounts and is classified as cash on the Statements of Assets and Liabilities. The Funds maintain cash in bank deposit accounts which, at times may exceed United States federally insured limits. Amounts invested are available on the same business day.
Dividends and Distributions to Shareholders — Each Fund distributes its net investment income and makes distributions of its net realized capital gains, if any, at least annually. If you own Fund shares on a Fund’s record date, you will be entitled to receive the distribution.
Deferred Offering Costs — Offering costs of the Funds, including costs of printing the initial prospectus, legal, and registration fees, are amortized over twelve-months from inception of the Funds. As of September 30, 2025, the Brown Advisory Flexible Equity ETF had $28 (000) remaining to be amortized.
Creation Units — The Funds issue and redeem Shares at NAV and only in large blocks of Shares (each block of Shares for the Funds are a Creation Unit of 10,000, 10,000 and 10,000 Shares for Brown Advisory Flexible Equity ETF, Brown Advisory Sustainable Growth ETF and Brown Advisory Sustainable Value ETF, respectively, or multiples thereof). Except when aggregated in Creation Units, Shares are not redeemable securities of the Funds. Shares of Funds may only be purchased or redeemed by certain Authorized Participants. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company (‘‘DTC’’) participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the Shares directly from Funds. Rather, most retail investors will purchase Shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees when buying or selling Shares. If a Creation Unit is purchased or redeemed for cash, a higher transaction fee will be charged.
3. Transactions with Affiliates:
Certain officers of the Trust are also employees of SEI Investments Global Funds Services (the “Administrator”), a wholly owned subsidiary of SEI Investments Company, and/or SEI Investments Distribution Co. (the “Distributor”). Such officers are paid no fees by the Trust, other than the Chief Compliance Officer (“CCO”) as described below, for serving as officers of the Trust.
The services provided by the CCO and his staff are paid for by the Trust as incurred. The services include regulatory oversight of the Trust’s Advisors and service providers as required by SEC regulations. The CCO’s services and fees have been approved by and are reviewed by the Board.
4. Administration, Distribution, Custodian and Transfer Agent Agreements:
The Funds and the Administrator are parties to an Administration Agreement under which the Administrator provides administration services to the Funds. For these services, the Administrator is paid an asset based fee, which will vary depending on the number of share classes and the average daily net assets of the Funds. For the period ended September 30, 2025, the Brown Advisory Flexible Equity ETF, the Brown Advisory Sustainable Growth ETF, and the Brown Advisory Sustainable Value ETF incurred $428 (000), $60 (000) and $19 (000), respectively for these services.
The Trust has adopted a Distribution Plan (the “Plan”) applicable to the Funds in accordance with the provisions of Rule 12b-1 under the 1940 Act, which regulates circumstances under which an investment company may directly or indirectly bear expenses relating to the distribution of its shares.
Under the Plan, the Distributor or financial intermediaries may receive up to 0.25% of the average daily net assets of each Fund as compensation for distribution and shareholder services. For the period ended September 30, 2025, the Funds did not incur any fees for these services.
Brown Brothers Harriman & Co. acts as custodian (the “Custodian”) for each of the Funds. The Custodian plays no role in determining the investment policies of any of the Funds or which securities are to be purchased or sold by the Funds.
Brown Brothers Harriman & Co. serves as the transfer agent and dividend disbursing agent for each of the Funds under a transfer agency agreement with the Trust.
14
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
5. Investment Advisory Agreement:
For its services to each Fund under the Advisory Agreement, the Adviser is entitled to a management fee, which is calculated daily and paid monthly, at the following annual rates based on the average daily net assets of each Fund:
| Fund | Advisory Fee |
| Brown Advisory Flexible Equity ETF | 0.50% |
| Brown Advisory Sustainable Growth ETF | 0.58% |
| Brown Advisory Sustainable Value ETF | 0.67% |
The Adviser has contractually agreed to waive fees and/or to reimburse expenses to the extent necessary to keep total annual Fund operating expenses (excluding any interest, taxes, brokerage commissions and other costs and expenses relating to the securities that are purchased and sold by the Fund, any class-specific expenses (including distribution and service (12b-1) fees and shareholder servicing fees), dividend and interest expenses on securities sold short, acquired fund fees and expenses, fees and expenses incurred in connection with tax reclaim recovery services, other expenditures which are capitalized in accordance with generally accepted accounting principles, expenses incurred in connection with any merger or reorganization, and non-routine expenses) (collectively, “excluded expenses”)) from exceeding the levels set forth below as a percentage of the average daily net assets of each Fund until January 31, 2027 (the “contractual expense limit”).
| Fund | Contractual Expense Limit |
| Brown Advisory Flexible Equity ETF | 0.54% |
| Brown Advisory Sustainable Growth ETF | 0.61% |
| Brown Advisory Sustainable Value ETF | 0.71% |
The Adviser may receive from a Fund the difference between the total annual Fund operating expenses (not including excluded expenses) and the contractual expense limit to recoup all or a portion of its prior fee waivers or expense reimbursements made during the rolling three-year period preceding the date of the recoupment if at any point total annual Fund operating expenses (not including excluded expenses) are below the contractual expense limit (i) at the time of the fee waiver and/or expense reimbursement and (ii) at the time of the recoupment.
For the period ended September 30, 2025, there were no previously waived fees reimbursed to the Funds by the Adviser.
Vident Asset Management (the “Sub-Adviser”) serves as the investment sub-adviser to the Funds. The Sub-Adviser is responsible for trading portfolio securities on behalf of the Funds, including selecting broker-dealers to execute purchase and sale transactions as instructed by the Adviser or in connection with any rebalancing or reconstitution of a Fund’s portfolio, pre- and post-trade compliance, and monitoring of Fund trading activity, subject to the oversight of the Adviser and the Board.
For its services to each Fund, the Sub-Adviser is entitled to a fee from the Adviser, which fee is calculated daily and paid monthly, at an annual rate of 0.05% based on the average daily net assets of the Fund for assets up to $250 million, 0.04% based on the average daily net assets of the Fund when assets exceed $250 million, and 0.01% based on the average daily net assets of the Fund when assets exceed $1 billion, subject to a minimum annual fee of $30,000.
6. Investment Transactions:
For the period ended September 30, 2025, the Brown Advisory Flexible Equity ETF made purchases of $1,160,412 (000) and sales of $304,614 (000) in investment securities other than long-term U.S. Government and short-term securities. The purchase and sales balances include the effect of securities received or delivered from processing in-kind creations of $529,718 (000) and redemptions of $143,803 (000), respectively, and have been properly excluded from the calculation of portfolio turnover within the Fund’s financial highlights. Realized gains on in-kind redemptions were $73,222 (000).
For the period ended September 30, 2025, the Brown Advisory Sustainable Growth ETF made purchases of $502,822 (000) and sales of $192,882 (000) in investment securities other than long-term U.S. Government and short-term securities. The purchase and sales balances include the effect of securities received or delivered from processing in-kind creations of $161,741 (000) and redemptions of $98,650 (000), respectively, and have been properly excluded from the calculation of portfolio turnover within the Fund’s financial highlights. Realized gains on in-kind redemptions were $57,188 (000).
For the period ended September 30, 2025, the Brown Advisory Sustainable Value ETF made purchases of $194,369 (000) and sales of $40,860 (000) in investment securities other than long-term U.S. Government and short-term securities. The purchase and sales balances include the effect of securities received or delivered from processing in-kind creations of $110,894 (000) and redemptions of $20,863 (000), respectively, and have been properly excluded from the calculation of portfolio turnover within the Fund’s financial highlights. Realized gains on in-kind redemptions were $7,712 (000).
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| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
7. In-Kind Contributions:
As part of the commencement of operations on November 15, 2024, the Brown Advisory Flexible Equity ETF received in-kind contributions from accounts managed by the Adviser which consisted of $913,363 (000) of securities which were recorded at their current value. The purpose of the transaction was to combine accounts with similar investment strategies into a single ETF with a comparable investment objective and investment strategy. As the transaction was determined to be a non-taxable transaction by management, the Fund elected to retain the securities’ original cost basis for book and tax purposes. The cost of the contributed securities as of November 15, 2024, was $460,454 (000), resulting in net unrealized appreciation on investments of $452,909 (000) as of that date. As a result of the in-kind contribution, the Brown Advisory Flexible Equity ETF issued 36,534,521 shares at a $25.00 per share net asset value. Because the combined investment portfolios have been managed as a single integrated portfolio since the transaction was completed, it is not practicable to separate the amounts of revenue and earnings of the contributing investment accounts that have been included in the Fund’s Statement of Operations. All fees and expenses incurred in conjunction with the transaction were paid by the Adviser.
As part of the commencement of operations on June 13, 2025, the Brown Advisory Sustainable Growth ETF received in-kind contributions from accounts managed by the Adviser which consisted of $452,881 (000) of securities which were recorded at their current value. The purpose of the transaction was to combine accounts with similar investment strategies into a single ETF with a comparable investment objective and investment strategy. As the transaction was determined to be a non-taxable transaction by management, the Fund elected to retain the securities’ original cost basis for book and tax purposes. The cost of the contributed securities as of June 13, 2025, was $250,922 (000), resulting in net unrealized appreciation on investments of $201,959 (000) as of that date. As a result of the in-kind contribution, the Brown Advisory Sustainable Growth ETF issued 18,115,247 shares at a $25.00 per share net asset value. Because the combined investment portfolios have been managed as a single integrated portfolio since the transaction was completed, it is not practicable to separate the amounts of revenue and earnings of the contributing investment accounts that have been included in the Fund’s Statement of Operations. All fees and expenses incurred in conjunction with the transaction were paid by the Adviser.
As part of the commencement of operations on June 13, 2025, the Brown Advisory Sustainable Value ETF received in-kind contributions from accounts managed by the Adviser which consisted of $89,539 (000) of securities which were recorded at their current value. The purpose of the transaction was to combine accounts with similar investment strategies into a single ETF with a comparable investment objective and investment strategy. As the transaction was determined to be a non-taxable transaction by management, the Fund elected to retain the securities’ original cost basis for book and tax purposes. The cost of the contributed securities as of June 13, 2025, was $67,747 (000), resulting in net unrealized appreciation on investments of $21,792 (000) as of that date. As a result of the in-kind contribution, the Brown Advisory Sustainable Value ETF issued 3,581,542 shares at a $25.00 per share net asset value. Because the combined investment portfolios have been managed as a single integrated portfolio since the transaction was completed, it is not practicable to separate the amounts of revenue and earnings of the contributing investment accounts that have been included in the Fund’s Statement of Operations. All fees and expenses incurred in conjunction with the transaction were paid by the Adviser.
8. Federal Tax Information:
The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during the period. The book/tax differences may be temporary or permanent.
The permanent differences are primarily attributed to redemptions in-kind and net operating losses.
At September 30, 2025, the Funds reclassified the following permanent amounts between distributable earnings (accumulated losses) and paid-in capital. The reclassification are primarily related to gains realized on redemptions in-kind (000):
| Distributable Earnings (Accumulated Losses) |
Paid-in Capital | |||||||
| Brown Advisory Flexible Equity ETF | $ | (73,222 | ) | $ | 73,222 | |||
| Brown Advisory Sustainable Growth ETF | (57,120 | ) | 57,120 | |||||
| Brown Advisory Sustainable Value ETF | (7,712 | ) | 7,712 | |||||
These reclassifications have no impact on net assets or net asset value per share.
The tax character of dividends and distributions paid during the period ended September 30, 2025 are as follows (000):
| Ordinary Income | Total | |||||||
| Brown Advisory Flexible Equity ETF | $ | (625 | ) | $ | (625 | ) | ||
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| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
As of September 30, 2025, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows (000):
| Brown Advisory Flexible Equity ETF |
Brown Advisory Sustainable Growth ETF |
Brown Advisory Sustainable Value ETF |
||||||||||
| Undistributed Ordinary Income | $ | 3,241 | $ | - | $ | 489 | ||||||
| Capital Loss Carryforwards | (13,309 | ) | (2,417 | ) | (416 | ) | ||||||
| Unrealized Appreciation | 494,028 | 174,685 | 24,285 | |||||||||
| Other Temporary Differences | 1 | - | - | |||||||||
| Distributable Earnings | $ | 483,961 | $ | 172,268 | $ | 24,358 | ||||||
For Federal income tax purposes, capital loss carryforwards may be carried forward indefinitely and applied against all future gains. Losses carried forward are as follows (000):
| Short-Term Loss |
Long-Term Loss |
Total | ||||||||||
| Brown Advisory Flexible Equity ETF | $ | (10,846 | ) | $ | (2,463 | ) | $ | (13,309 | ) | |||
| Brown Advisory Sustainable Growth ETF | (1,211 | ) | (1,206 | ) | (2,417 | ) | ||||||
| Brown Advisory Sustainable Value ETF | (359 | ) | (57 | ) | (416 | ) | ||||||
During the period ended September 30, 2025, the Funds had no utilization of prior year capital loss carryforwards to offset capital gains.
For Federal income tax purposes, the difference between Federal tax cost and book cost primarily relate to wash sales. The Federal tax cost and aggregate gross unrealized appreciation and depreciation for investments held by the Funds at September 30, 2025, were as follows (000):
| Federal Tax Cost |
Aggregate Gross Unrealized Appreciation |
Aggregate Gross Unrealized Depreciation |
Net Unrealized Appreciation |
|||||||||||||
| Brown Advisory Flexible Equity ETF | $ | 915,711 | $ | 515,368 | $ | (21,340 | ) | $ | 494,028 | |||||||
| Brown Advisory Sustainable Growth ETF | 364,710 | 182,028 | (7,343 | ) | 174,685 | |||||||||||
| Brown Advisory Sustainable Value ETF | 160,805 | 27,353 | (3,068 | ) | 24,285 | |||||||||||
9. Concentration of Risks:
As with all exchange traded funds, there is no guarantee that the Funds will achieve their investment objectives. You could lose money by investing in the Funds. A Fund share is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any government agency. The principal risk factors affecting shareholders’ investments in the Funds are set forth below.
EQUITY RISK (All Funds) — The risk that stock prices will fall over short or extended periods of time, sometimes rapidly and unpredictably. The value of equity securities will fluctuate in response to factors affecting a particular company, as well as broader market and economic conditions. Broad movements in financial markets may adversely affect the price of the Fund’s investments, regardless of how well the companies in which the Fund invests perform. In addition, the impact of any epidemic, pandemic or natural disaster, or widespread fear that such events may occur, could negatively affect the global economy, as well as the economies of individual countries, the financial performance of individual companies and sectors, and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the prices and liquidity of the securities and other instruments in which the Fund invests, which in turn could negatively impact the Fund’s performance and cause losses on your investment in the Fund. Moreover, in the event of a company’s bankruptcy, claims of certain creditors, including bondholders, will have priority over claims of common stock holders such as the Fund.
LARGE CAPITALIZATION RISK (All Funds) — The risk that larger, more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes. Larger companies also may not be able to attain the high growth rates of successful smaller companies.
SMALL AND MEDIUM CAPITALIZATION COMPANIES RISK (Flexible Equity ETF and Sustainable Growth ETF) — The risk that small and medium capitalization companies in which the Fund may invest may be more vulnerable to adverse business or economic events than larger, more established companies. In particular, small and medium capitalization companies may have limited product lines, markets and financial resources and may depend upon a relatively small management group. Therefore, small capitalization and medium capitalization stocks may be more volatile than those of larger companies. Small capitalization and medium capitalization stocks may be traded over-the counter or listed on an exchange.
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| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
VALUE STYLE RISK (Flexible Equity ETF and Sustainable Value ETF) — Value investing focuses on companies with stocks that appear undervalued in light of factors such as the company’s earnings, book value, revenues or cash flow. If the Adviser’s assessment of market conditions, or a company’s value or its prospects for exceeding earnings expectations is inaccurate, the Fund could suffer losses or produce poor performance relative to other funds. In addition, “value stocks” may continue to be undervalued by the market for long periods of time.
NEW FUND RISK (All Funds) — Because the Fund is new, investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategy, may not employ a successful investment strategy, or may fail to attract sufficient assets under management to realize economies of scale, any of which could result in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders. Such liquidation could have negative tax consequences for shareholders and will cause shareholders to incur expenses of liquidation.
MANAGEMENT RISK (All Funds) — The value of the Fund may decline if the Adviser’s judgments about the attractiveness, relative value or potential appreciation of a particular security or strategy prove to be incorrect.
INVESTMENTS IN INVESTMENT COMPANY RISK (Flexible Equity ETF and Sustainable Value ETF) — When the Fund invests in an investment company, including closed-end funds and ETFs, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the investment company’s expenses. Further, while the risks of owning shares of an investment company generally reflect the risks of owning the underlying investments of the investment company, the Fund may be subject to additional or different risks than if the Fund had invested directly in the underlying investments. For example, the lack of liquidity in an ETF could result in its share price being more volatile than that of the underlying portfolio securities. Certain closed-end investment companies issue a fixed number of shares that trade on a stock exchange at a premium or a discount to their net asset value (“NAV”). As a result, a closed-end fund’s share price fluctuates based on what another investor is willing to pay rather than on the market value of the securities in the fund.
REITs RISK (All Funds) — REITs are trusts that invest primarily in commercial real estate or real estate related loans. The Fund’s investments in REITs are subject to the risks associated with the direct ownership of real estate. Securities of companies principally engaged in the real estate industry may be subject to the risks associated with the direct ownership of real estate. Risks commonly associated with the direct ownership of real estate include fluctuations in the value of underlying properties, defaults by borrowers or tenants, changes in interest rates and risks related to general or local economic conditions. The Fund’s investments are concentrated in issuers conducting business in the real estate industry, and therefore the Fund is subject to risks associated with legislative or regulatory changes, adverse market conditions and/or increased competition affecting that industry.
Some REITs may have limited diversification and may be subject to risks inherent in financing a limited number of properties.
PRIVATE PLACEMENTS RISK (Flexible Equity ETF and Sustainable Value ETF) — Investment in privately placed securities may be less liquid than in publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities. Furthermore, companies whose securities are not publicly traded may not be subject to the disclosure and other investor protection requirements that might be applicable if their securities were publicly traded.
FOREIGN COMPANY RISK (All Funds) — Investing in foreign companies, including direct investments and investments through ADRs, poses additional risks since political and economic events unique to a country or region will affect those markets and their issuers. These risks will not necessarily affect the U.S. economy or similar issuers located in the United States. Securities of foreign companies may not be registered with the U.S. Securities and Exchange Commission (the “SEC”) and foreign companies are generally not subject to the same level of regulatory controls imposed on U.S. issuers and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic securities. Income from foreign securities owned by the Fund may be reduced by a withholding tax at the source, which tax would reduce income received from the securities comprising the Fund’s portfolio. Foreign securities may also be more difficult to value than securities of U.S. issuers and foreign markets and securities may be less liquid. In addition, periodic U.S. Government restrictions on investments in issuers from certain foreign countries may require the Fund to sell such investments at inopportune times, which could result in losses to the Fund. While ADRs provide an alternative to directly purchasing the underlying foreign securities in their respective national markets and currencies, investments in ADRs continue to be subject to many of the risks associated with investing directly in foreign securities.
DEPOSITARY RECEIPTS RISK (All Funds) — ADRs are certificates evidencing ownership of shares of a foreign issuer that are issued by depositary banks and generally trade on an established market. ADRs are subject to many of the risks associated with investing directly in foreign securities, including, among other things, political, social and economic developments abroad, currency movements, inflation and different legal, regulatory and tax environments. Certain of the depositary receipts in which the Fund invests may be unsponsored depositary receipts. Unsponsored depositary receipts may not provide as much information about the underlying issuer and may not carry the same voting privileges as sponsored depositary receipts. Unsponsored depositary receipts are issued by one or more depositaries in response to market demand, but without a formal agreement with the company that issues the underlying securities.
18
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
PREFERRED STOCK RISK (Flexible Equity ETF and Sustainable Value ETF) — Preferred stocks in which the Fund may invest are sensitive to interest rate changes, and are also subject to equity risk, which is the risk that stock prices will fall over short or extended periods of time. The rights of preferred stocks on the distribution of a company’s assets in the event of a liquidation are generally subordinate to the rights associated with a company’s debt securities.
CONVERTIBLE SECURITIES RISK (Flexible Equity ETF and Sustainable Value ETF) — The value of a convertible security is influenced by changes in interest rates (with investment value declining as interest rates increase and increasing as interest rates decline) and the credit standing of the issuer. The price of a convertible security will also normally vary in some proportion to changes in the price of the underlying common stock because of the conversion or exercise feature.
EMERGING MARKET COMPANIES RISK (All Funds) — Investments in emerging market companies, including those outside of China, are considered speculative and subject to heightened risks in addition to the general risks of investing in foreign companies. Unlike more established markets, emerging markets may have governments that are less stable and economies that are less developed. Furthermore, future economic or political crises could lead to price controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization or creation of government monopolies.
ETF RISKS (All Funds) — The Fund is an exchange-traded fund (“ETF”) and, as a result of this structure, it is exposed to the following risks:
TRADING RISK — Shares of the Fund may trade on The NASDAQ Stock Market (the “Exchange”) above or below their NAV. The NAV of shares of the Fund will fluctuate with changes in the market value of the Fund’s holdings. In addition, although the Fund’s shares are currently listed on the Exchange, there can be no assurance that an active trading market for shares will develop or be maintained. Trading in Fund shares may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in shares of the Fund inadvisable.
LIMITED AUTHORIZED PARTICIPANTS, MARKET MAKERS AND LIQUIDITY PROVIDERS RISK — Because the Fund is an ETF, only a limited number of institutional investors (known as “Authorized Participants”) are authorized to purchase and redeem shares directly from the Fund. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occur, Fund shares may trade at a material discount to net asset value (“NAV”) and possibly face delisting: (i) Authorized Participants exit the business or otherwise become unable to process creation and/or redemption orders and no other Authorized Participants step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.
GROWTH INVESTMENT STYLE RISK (Sustainable Growth ETF) — An investment in growth stocks may be susceptible to rapid price swings, especially during periods of economic uncertainty. Growth stocks typically have little or no dividend income to cushion the effect of adverse market conditions. In addition, growth stocks may be particularly volatile in the event of earnings disappointments or other financial difficulties experienced by the issuer.
SUSTAINABLE INVESTING POLICY RISK (Sustainable Growth ETF and Sustainable Value ETF) — The Fund’s consideration of sustainability criteria could cause it to make or avoid investments that could result in the Fund underperforming similar funds that do not consider such sustainability criteria.
SHAREHOLDER CONCENTRATION RISK (Sustainable Value ETF) — A large percentage of the Fund’s shares are held by a small number of shareholders, including persons and entities related to the Adviser. A large redemption by one or more of these shareholders could materially increase the Fund’s transaction costs, which would negatively impact the Fund’s performance and could cause adverse tax consequences for the remaining shareholders of the Fund.
10. Other:
At September 30, 2025, all shares issued by the Funds were in Creation Unit aggregations to Authorized Participants through primary market transactions (e.g., transactions directly with the Funds). However, the individual shares that make up those Creation Units are traded on the Exchange (e.g., secondary market transactions). Some of those individual shares have been bought and sold by persons that are not Authorized Participants. Each Authorized Participant has entered into an agreement with the Funds’ Distributor.
11. Recent Accounting Pronouncements:
In this reporting period, the Funds adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”). Adoption of the new standard impacted financial statement disclosures only and did not affect each Fund’s financial position or the results of its operations. An operating segment is defined in Topic 280 as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The management of each Fund’s Adviser acts as each Fund’s CODM. Each Fund represents a single operating segment, as the CODM monitors the operating results of each Fund as a whole and each Fund’s long-term strategic asset allocation is pre-determined in accordance with each Fund’s single investment objective which is executed by each Fund’s portfolio managers. The financial information in the form of each Fund’s schedule of investments, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions), which are used by the CODM to assess the segment’s performance versus each Fund’s comparative benchmarks and to make resource allocation decisions for each Fund’s single segment, is consistent with that presented within each Fund’s financial statements. Segment assets are reflected on the accompanying Statements of Assets and Liabilities as “total assets” and significant segment expenses are listed on the accompanying Statements of Operations.
19
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
In December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which amends quantitative and qualitative income tax disclosure requirements in order to increase disclosure consistency, bifurcate income tax information by jurisdiction and remove information that is no longer beneficial. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. Fund Management is evaluating the impacts of these changes on the Funds’ financial statements.
12. Indemnifications:
In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote.
13. Subsequent Events:
The Funds have evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no additional disclosures and/or adjustments were required to the financial statements.
20
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of Brown Advisory Flexible Equity ETF, Brown Advisory Sustainable Growth ETF, and Brown Advisory Sustainable Value ETF and Board of Trustees of Advisors’ Inner Circle Fund III
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Brown Advisory Flexible Equity ETF, Brown Advisory Sustainable Growth ETF, and Brown Advisory Sustainable Value ETF (the “Funds”), each a series of Advisors’ Inner Circle Fund III as of September 30, 2025, the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated below, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of September 30, 2025, the results of their operations, changes in net assets, and the financial highlights for each of the periods indicated below, in conformity with accounting principles generally accepted in the United States of America.
| Fund Name | Statements of Operations | Statements
of Changes in Net Assets |
Financial Highlights |
| Brown Advisory Flexible Equity ETF | For the period from November 15, 2024 (commencement of operations) through September 30, 2025 | ||
| Brown Advisory Sustainable Growth ETF and Brown Advisory Sustainable Value ETF | For the period from June 13, 2025 (commencement of operations) through September 30, 2025 | ||
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2025, by correspondence with the custodians and brokers; when replies were not received from brokers, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Funds’ auditor since 2025.
COHEN &
COMPANY, LTD.
Philadelphia, Pennsylvania
November 26, 2025
21
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 | |
| (Unaudited) |
NOTICE TO SHAREHOLDERS
For shareholders that do not have a September 30, 2025 tax year end, this notice is for informational purposes only. For shareholders with a September 30, 2025 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended September 30, 2025, the Funds are designating the following items with regard to distributions paid during the year.
| Return Of Capital |
Long-Term Capital Gain Distributions |
Ordinary Income Distributions |
Total Distributions |
Qualifying
for Corporate Dividend Received Deduction(1) |
Qualifying
Dividend Income(2) |
|||||||||||||||||||
| Brown Advisory Flexible Equity ETF | 0.00 | % | 0.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||||||
| Brown Advisory Sustainable Growth ETF | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||
| Brown Advisory Sustainable Value ETF | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||
| U.S.
Government Interest(3) |
Interest Related Dividends(4) |
Qualified
Short-Term Capital Gain(5) |
Qualifying Business Income(6) |
Foreign
Tax Credits(7) |
||||||||||||||||
| Brown Advisory Flexible Equity ETF | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
| Brown Advisory Sustainable Growth ETF | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
| Brown Advisory Sustainable Value ETF | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
| 1. | Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of ordinary Income distributions (the total of short term capital gain and net investment income distributions). |
| 2. | The percentage in this column represents the amount of “Qualifying Dividend Income” as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of ordinary income distributions (the total of short term capital gain and net investment income distributions). It is the intention of each of the aforementioned funds to designate the maximum amount permitted by law. |
| 3. | “U.S. Government Interest” represents the amount of interest that was derived from direct U.S. Government obligations and distributed during the fiscal year. This amount is reflected as a percentage of ordinary income. Generally, interest from direct U.S. Government obligations is exempt from state income tax. However, for shareholders who are residents of California, Connecticut and New York, the statutory threshold requirements were not satisfied to permit exemption of these amounts from state income. |
| 4. | The percentage in this column represents the amount of “Interest Related Dividends” and is reflected as a percentage of ordinary income distribution. Interest related dividends are exempt from U.S. withholding tax when paid to foreign investors. |
| 5. | The percentage in this column represents the amount of “Short Term Capital Gain Dividends” and is reflected as a percentage of short term capital gain distribution that is exempt from U.S. withholding tax when paid to foreign investors. |
| 6. | The percentage of this column represents that amount of ordinary dividend income that qualified for 20% Business Income Deduction. |
| 7. | The percentage in this column represents the amount of “Qualifying Foreign Taxes” as a percentage of ordinary distributions during the fiscal year ended September 30, 2025. Your allocable share of the foreign tax credit will be reported on form 1099-DIV. |
The information reported herein may differ from the information and distributions taxable to the shareholder for the calendar year ending September 30, 2025. Complete information will be computed and reported with your 2025 Form 1099-DIV.
22
| THE ADVISORS’ INNER CIRCLE FUND III | BROWN ADVISORY |
| SEPTEMBER 30, 2025 | |
| (Unaudited) |
