Baird’s Short-Term Bond Funds

A Dependable Solution for Uncertain Times

Baird’s short-duration bond funds can provide necessary flexibility and attractive yields relative to treasuries in the current environment. Our investment team’s straightforward, conservative approach focuses on high-quality investment-grade government and high-quality investment-grade corporate and municipal bonds, forgoing leverage or derivatives, and has resulted in competitive, risk-adjusted returns versus peers, especially through uncertain markets.

Like all the Baird Bond Funds, our short-term lineup benefits from:

  • A time-tested, disciplined investment process with a focus on controlling risk
  • An experienced investment team anchored by senior leaders with 35+ years’ shared experience
  • Competitive performance relative to peers
  • Low expense ratios

 Annualized
Returns as of March 31, 2020Q1 202020191-Year3-Year5-Year10-YearSince Inception
Baird Short-Term Bond Fund (Institutional) -0.48% 4.68% 2.52% 2.19% 1.90% 2.23% 2.72%
Bloomberg Barclays 1 - 3 Year U.S. Government/Credit Bond Index 1.69% 4.03% 4.53% 2.58% 1.90% 1.62% 2.48%
Baird Ultra Short Bond Fund (Institutional) -0.50% 3.11% 1.60% 1.84% 1.48% n/a 1.42%
Bloomberg Barclays U.S. Short-Term Government/Corporate Index 0.79% 2.69% 2.74% 2.09% 1.48% n/a 1.23%
Baird Short-Term Municipal Bond Fund (Institutional) -0.39% 3.96% 2.07% 2.32% n/a n/a 2.13%
Bloomberg Barclays 1-5 Year Short Municipal Bond Index -0.41% 3.66% 1.88% 1.79% n/a n/a 1.54%

 

Percentage of Time the Funds Outperform Their Morningstar Category Average
Rolling Time PeriodBaird Ultra Short Bond FundBaird Short-Term Bond FundBaird Short Term Municipal Bond Fund
1 Year 77% 86% 100%
2 Year 87% 92% 100%
3 Year 100% 99% 100%
5 Year 100% 100% NA

Source: Morningstar Direct as of March 31, 2020. Performance numbers used are through each month-end period from each fund’s inception date. The Baird Short-Term Bond Fund Since Inception net return is based on performance from August 31, 2004, through March 31, 2020. The Baird Ultra Short Bond Fund Since Inception net return is based on performance from December 31, 2013, through March 31, 2020. The Baird Short-Term Municipal Bond Funds Since Inception net returns are based on performance from August 31, 2015, through March 31, 2020. The Morningstar category for Baird Ultra-Short Bond is the Ultrashort Bond category; for Baird Short-Term Bond it is the Short-Term Bond category; and, for the Baird Short-Term Municipal Bond it is the Muni National Short category.

Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment in the fund will fluctuate so that an investor’s shares when redeemed may be worth more or less than their original cost. The fund’s current performance may be lower or higher than the performance data quoted. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. For performance current to the most recent month-end, please visit bairdfunds.comCarefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and summary prospectus, containing this and other information, visit bairdfunds.com. Read it carefully before investing.

Expense Ratio for the Institutional Share Classes is 0.30%; for the Investor Share Classes is 0.55%. The Advisor has contractually agreed to waive management fees for the Baird Ultra Short Bond Fund in an amount equal to an annual rate of 0.15% of the average daily net assets for the Fund until April 30, 2021. The agreement may only be terminated prior to the end of this term by or with the consent of the Board of Directors of Baird Funds, Inc.

Returns shown include the reinvestment of all dividends and capital gains.

The Barclays 1-3 U.S. Government/Credit Bond Index is an index consisting of Treasury or government agency securities and investment-grade corporate debt securities with maturities of one to three years. Indices are unmanaged and are not available for direct investment. The U.S. Bloomberg Barclays Short-Term Government/Corporate Index contains securities that have fallen out of the U.S. Government/Credit Bond Index because of the standard minimum one-year-to-maturity constraint. The Bloomberg Barclays 1-5 Year Short Municipal Bond Index measures the performance of municipal bonds with time to maturity of more than one year and less than five years.

The Fund may invest in mortgage- and asset-backed securities which may be subject to prepayment risk and thus may be more sensitive to interest rate changes than other types of debt securities. The Fund may also invest in U.S. dollar denominated securities issued by foreign issuers which involve additional risks including political and economic instability, differences in financial reporting standards and less regulated securities markets. While the U.S. government has historically provided financial support to various U.S. government-sponsored agencies, no assurance can be given that it will do so in the future if it is not obligated by law. A bond's market value may be affected significantly by changes in interest rates – generally, when interest rates rise, the bond's market value declines and when interest rates decline, its market value rises ("interest-rate risk"). Duration risk is the risk associated with the sensitivity of a bond's price to a one percent change in interest rates. Ratings are measured on a scale that ranges from AAA or Aaa (highest) to D or C (lowest). Investment grade investments are those rated from highest down to BBB- or Baa. Fixed income is generally considered to be a more conservative investment than stocks, but bonds and other fixed income investments still carry a variety of risk such as interest rate risk, regulatory risk, reinvestment risk, credit risk, inflation risk, call risk, default risk, political risk, tax policy risk and liquidity risk. In a rising interest rate environment, the value of fixed income securities generally decline and conversely, in a falling interest rate environment, the value of fixed income securities generally increase. Municipal securities investments are not appropriate for all investors, especially those taxed at lower rates. Fixed income yield and stock dividends do not correlate and are not derived from the same method or have the same guarantees or investment purpose. While both are income sources, stocks generally carry greater risk, are purchased also for the potential of appreciation in value and dividends can be variable and are not guaranteed.Fixed income yield and stock dividends do not correlate and are not derived from the same method or have the same guarantees or investment purpose. While both are income sources, stocks generally carry greater risk, are purchased also for the potential of appreciation in value and dividends can be variable and are not guaranteed.

The Morningstar Rating™ for funds, or "star rating," is calculated for managed products with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% 3-year rating for 36-59 months of total returns, 60% 5-year rating/40% 3-year rating for 60-119 months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods.

The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price to determine how they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research. For actively managed strategies, people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. For both active and passive strategies, performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further modified by a measure of the dispersion of historical alphas among relevant peers. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, the modification by alpha dispersion is not used. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net alpha relative to Morningstar category peers for active funds. For passive funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will be able to deliver a higher alpha net of fees than the lesser of the relevant Morningstar category median or 0. The level of the rating relates to the level of expected net alpha relative to Morningstar category peers for passive funds. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months. For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance--Disclosure/default.aspx.

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.

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The Baird Municipal Short-Term Bond Fund was awarded best fund for the past 3 years in the short municipal debt funds category which, consisted of 39 funds. The Refinitiv Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The reporting period for the awards is the period ending November 30, 2019. Most recent returns for the Baird Short-Term Municipal Bond Fund can be found here. The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the Refinitiv Lipper Fund Award. For more information, see lipperfundawards.com. Although Refinitiv Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Refinitiv Lipper. Lipper Fund Awards from Refinitiv, ©2020 Refinitiv. All rights reserved. Used under license.