Small/Mid Cap Value Strategy

OVERVIEW

Baird Equity Asset Management’s Small/Mid Cap Value portfolio invests in small- to medium-cap U.S. companies and seeks to provide superior risk-adjusted returns and consistently outperform the benchmark Russell 2500 Value Index over a full market cycle (typically 3–5 years). The portfolio comprises companies we expect to exceed street expectations and that trade at discounts to our proprietary calculations of fair value. To help control risks, the portfolio is generally diversified among companies in a broad range of industries and economic sectors.

Portfolio Construction

  • A concentrated portfolio of generally 40–50 stocks
  • A market cap range typically from $300 million to $10 billion at purchase 
  • Top holdings generally limited to 5% at cost, 8% at market
  • Sectors capped at 30% excluding financials 
  • Buy-and-hold approach
TEAM

For more information, contact Rob Zwiebel or the Intermediary Specialist in your region.

COMMENTARY

Q4 2018 Small/Mid Value and Small Value Commentary

U.S. equity markets dipped into bear market territory during the final quarter of the year. Global synchronized growth soured to global synchronized deceleration as the year progressed. That coupled with the scepter of monetary tightening, as the Federal Reserve both raised the Federal Funds rate and shrank the balance sheet, were more than bulls could bear. As we enter 2019, analysts have begun to slash corporate earnings estimates after raising them steadily most of last year. The 10.2% earnings growth projected in 2019 for the S&P 500 Index just three months ago is now estimated at 6.5%, with the threat that 1st quarter earnings reports may drive that number further south.

Read Full Small or Small/Mid Value Commentary

PERFORMANCE

Annualized Returns (%)*

 3 MonthsYTD1-Year3-Year5-Year10-YearSince InceptionInception Date
Baird Small/Mid Cap Value (gross) -18.16 -14.51 -14.51 4.78 4.75 11.86 10.67 1/1/00
Baird Small/Mid Cap Value (net) -18.33 -15.22 -15.22 3.91 3.94 10.94 9.69 1/1/00
Russell 2500 Value Index -17.12 -12.36 -12.36 6.59 4.16 11.62 9.02

*Returns less than one year are not annualized.



Annual Total Returns (%)

20172016201520142013201220112010200920082007
Baird Small/Mid Cap Value (gross) 22.55 9.80 0.17 9.47 36.87 17.32 6.09 10.29 29.40 -38.74 24.22
Baird Small/Mid Cap Value (net) 21.54 8.91 -0.50 8.65 35.93 16.36 5.09 9.26 28.20 -39.34 23.06
Russell 2500 Value Index 10.36 25.20 -5.49 7.11 33.32 19.21 -3.36 24.80 27.68 -31.98 -7.27

Data as of 12/31/18


Past performance does not guarantee future results.