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 2020 Small/Mid Value and Small Value Commentary

Historically, deep value/low quality stocks have led out of bear markets. Their outsized returns have tended to be strong and swift, but they are quickly exhausted and yield to the broader market as the recovery plays out. As we reflect upon performance for the calendar year, we are frustrated to have trailed the benchmark, yet we must acknowledge that the portfolio performed consistent with our discipline. Our focus on high quality businesses rewarded us as expected during the first quarter of 2020, providing strong downside protection as markets plummeted, and outperforming our respective benchmarks by as much as 800 basis points.


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) 24.47 1.44 1.44 1.15 6.85 10.04 10.61 1/1/00
Baird Small/Mid Cap Value (net) 24.23 0.61 0.61 0.33 5.98 9.16 9.64 1/1/00
Russell 2500 Value Index 28.51 4.88 4.88 4.34 9.43 9.33 9.47

*Returns less than one year are not annualized.



Annual Total Returns (%)

2020201920182017201620152014201320122011
Baird Small/Mid Cap Value (gross) 1.44 19.34 -14.51 22.55 9.80 0.17 9.47 36.87 17.32 6.09
Baird Small/Mid Cap Value (net) 0.61 18.38 -15.22 21.54 8.91 -0.50 8.65 35.93 16.36 5.09
Russell 2500 Value Index 4.88 23.56 -12.36 10.36 25.20 -5.49 7.11 33.32 19.21 -3.36

Data as of 12/31/20


Past performance does not guarantee future results.