Small Cap Value Strategy

OVERVIEW

Baird Equity Asset Management’s Small Cap Value portfolio invests in domestic small-cap companies and seeks to provide superior risk-adjusted returns and consistently outperform the benchmark Russell 2000 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 $100 million to $2.5 billion at purchase 
  • Top holdings generally limited to 5% at cost, 8% at market
  • Sectors capped at 30% excluding financials 
  • A buy-and-hold approach
TEAM

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

COMMENTARY

Q3 2019 Small/Mid Value and Small Value Commentary

Despite a couple of quarters of double-digit returns (positive and negative) over the past year, the S&P 500 and Dow Jones Industrial Average have made little price progress. During this same time, the Federal Reserve has raised the federal funds interest rate twice (Sep/Dec 2018) and cut rates twice (Jul/Sep 2019). Under the surface, however, forward economic growth and corporate profit expectations have reset more dramatically. The net effect being the U.S. ten year bond yield down nearly 160 basis points and small company stocks, as measured by the Russell 2000, down over 10% during the trailing year.

Read Full Small or Small/Mid Value Commentary

PERFORMANCE

Annualized Returns (%)*

 3 MonthsYTD1-Year3-Year5-Year10-YearSince InceptionInception Date
Baird Small Cap Value (gross) -0.27 12.66 -7.40 6.90 5.85 10.26 8.49 3/1/05
Baird Small Cap Value (net) -0.35 12.25 -7.75 6.39 5.33 9.57 7.69 3/1/05
Russell 2000 Value Index -0.57 12.82 -8.25 6.54 7.17 10.06 6.67

*Returns less than one year are not annualized.



Annual Total Returns (%)

201820172016201520142013201220112010200920082007
Baird Small Cap Value (gross)  -15.1 19.43 16.35 -4.06 1.45 41.48 16.51 4.76 10.72 17.86 -36.61 34.06
Baird Small Cap Value (net) -15.44  18.78 15.76 -4.56 0.89 40.81 15.77 3.72 9.62 16.70 -37.27 32.75
Russell 2000 Value Index -12.86  7.84 31.74 -7.47 4.22 34.52 18.05 -5.50 24.50 20.58 -28.92 -9.78

Data as of 9/30/19


Past performance does not guarantee future results.