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

Q1 2021 Small/Mid Value and Small Value Commentary

Consistent with past economic and market cycles, low quality/high beta stocks led out of the bear market of 2020. While we had hoped at the end of last year that the baton had been handed off to quality value leadership, we were early, and the beta trade outperformance accelerated to what appears to have been a blow off top by mid-March. In total, the 12 months witnessed the quintile of the highest beta stocks up 255% versus a 29% gain for the quintile of the lowest beta stocks in the Russell 2000 Value! A near 10-fold better return and something we have not witnessed since the 2009 rally post the Great Financial Crisis.


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) 10.48 10.48 55.33 5.28 8.95 9.97 10.99 1/1/00
Baird Small/Mid Cap Value (net) 10.26 10.26 54.10 4.42 8.04 9.09 10.03 1/1/00
Russell 2500 Value Index 16.83 16.83 87.47 10.88 12.15 10.23 10.16

*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 3/31/21


Past performance does not guarantee future results.