Insights & Commentary

Impressive Decline in Tax-exempt Rates in November

Bond Market Rallies Sharply on Additional Signs of Cooling Inflation

The portfolio underperformed the Russell 2000 Index fractionally during the quarter but has meaningfully outperformed the benchmark year-to-date.

Treasury Yields Climb Further as the Prospect for Additional Tightening Remains Intact

Rates March Higher with a Steepening Bias

The portfolio slightly underperformed in Q3 mostly due to its style positioning versus the benchmark, the Russell 2500 Growth Index.

The portfolio outperformed the Russell MidCap® Growth Index in Q3, where the benchmark started positive but ended negative after rising rates and murky economic outlook news.

As global stocks continued to suffer from inflation and supply chain disruptions during the period, Chautauqua's International and Global Growth Funds outperformed their benchmarks.

Treasury Yields Reach New 2022 Highs in September Capping a Difficult Quarter for Bonds

Rates Higher and Curve Flatter in Q3 on Committed Fed

Worldwide investing offers an expanded opportunity set.

Bond Yields Rise on Strong Data and Hawkish Fed Messaging

Municipal Rates Rise Led by Short-term Maturities, Flattening the Curve

Real GDP Declines in Back-to-Back Quarters, Fixed Income Rallies Sharply

Rates Fall Across Curve, Strong State Credits – Case in Point: Florida

Higher Rate Trend Continues in Q2, Municipal Curve Steepens

Upside Inflation Surprise Emboldens Hawkish Fed, Odds of Recession Rise

Investment Grade Bond Prices Rise as Fed Tightening Cools Economic Data

Mid-Month Pivot in Municipal Yields and Industry Fund Flows

Higher yields a bright spot for bond investors

Bond Yields Climb as a More Hawkish Fed Signals Steepest Hiking Cycle Since Mid-1990s

Inflation and Outflows Cause Parallel Shift Higher in Municipal Curve

Fed Rate Hikes Officially Begin, Treasury Yields Surge in March Capping a Difficult Quarter

Sharp Rate Rise, Curve Flattening Significantly Improves Tax-exempt Income and Valuations

Russian Invasion of Ukraine Moves Markets, Credit Spreads Wider in February, Returns Negative

Rates Rise and Curve Flattens on Fed and Geopolitical Uncertainty, Municipal Credit Strength Limits Spread Widening, Negative Returns in February on Rising Rates; Lower-Quality Underperforms

After years of consistent outperformance, Growth stocks have lagged Value stocks since November 2020. Will this rotation to Value represents a secular change in market leadership?

Fed Articulates Faster Path of Policy Tightening to Fight Inflation; Yields Climb Sharply, Credit Spreads Widen; Agency RMBS Model Changes, January Returns Negative Across the Board

Liquidity Fades on Selling Pressure Driving Municipal Yields Sharply Higher, Puerto Rico Exits Bankruptcy, Sharply Negative Returns to Start 2022

Baird Advisors sees a more complex and challenging municipal market environment ahead that will require a multi-faceted strategy—more like chess than checkers—to successfully navigate.

Key Municipal Events of 2021, Solid Q4 Adds to Strong Municipal Returns in 2021, 2022 Outlook and Opportunities

Pandemic Persists Yet Yields and Inflation Rise on Strong Growth in 2021, Fed Policy Pivot Driven by Labor and Supply Chain, 2022 Outlook

Treasury Curve Flattening Continues, Omicron Concerns Surface, Volatility Returns

Stable Short Rates, Falling Long-Term Yields Leads to Flatter Curve, The Infrastructure Bill (IIJA) Passes Includes $550B of New Spending

Expectations for Fed Policy Shift, Treasury Curve Flattens, Planned Fiscal Programs Downsized, Credit Wider, Mortgages Tighter in October; Both Tighter YTD, Agg Returns Modestly Negative in October; YTD Remains Negative

Municipal Yields Rise, Muni Provisions Out of “Build Back Better” Plan, Weakest Cities/States Show Fiscal Improvement; Puerto Rico Prepares to Exit Bankruptcy, Upward Rate Movements Push October Returns Negative

Yield Curve Flattens as Yields Rise, Potential Turmoil at the Fed, Increased Volatility Impacts Economic Recovery, Spreads Mostly Widen During Q3; Tighter YTD, Market Returns Negative in Sept; Mixed QTD and YTD

Municipal Yields Rise and Curve Steepens in Q3, Key Municipal Revisions Included in Biden’s Infrastructure Draft, Shorter and Lower-Quality Led Performance in Q3

Yields Rise Modestly as Fed Confirms Tapering Likely to Begin in 2021; Spreads Relatively Unchanged in August; Market Returns Generally Negative in August, Mixed YTD

Municipal Yields Rise and Curve Steepens, Municipal Credit Ratings Improving Despite Evident Natural Disaster Risks, Lower-Quality Outperformance Stalls and Long-Term Maturities Lag.

Yield continue to fall and curve flattens as Fed signals status quo; Delta variant increases COVID-19 cases.

Trend of lower rates and flatter curve continues in July.

Curve flattens on both record demand and supply, fiscal support and record tax revenues lead an impressive recovery for municipal credit.

Yield curve flattens as Fed signals tapering and liftoff may begin earlier than previously anticipated.

Rates decline modestly despite inflation concerns; demand outpaces supply as economy reopening continues, spreads tighter across most market segments in May and sector returns mostly positive, but mixed YTD.

Light supply and positive demand support prices, infrastructure negotiations continue, state/local aid distributions begin to enhance recovery and lower quality municipals continue their trend of outperformance.

Baird Advisors provides timely insights about the current interest rate environment for the baby boom generation.

Municipal curve flattens as demand overwhelms even rising levels of supply, municipal investors digest tax and infrastructure plan implications and longer maturities and lower-quality outperformed in April.

Rates decline and curve flattens as Fed maintains extremely accommodative policies, spreads tighter across most market segments in April and sector returns positive for April, but mixed YTD.

Rates rise quickly as fiscal stimulus and vaccine rollout lead to higher growth and inflation expectations.

Municipal curve steepens on growth/inflation concerns, ARPA, AJP, AFP and taxes and solid March returns provide mixed returns for the quarter.

Longer yields rise as curve steepens, COVID-19 cases plateau, House passes pandemic relief package.

Municipals yield rise on inflation concerns, winter storm Uri cripples Texas at great economic impact and rising rates produce negative February returns.

Curve steepens modestly, Biden sworn in as U.S. President, vaccination efforts continue, spreads mixed across market segments in January and sector returns mixed though indices generally negative.

Strong rally in lower-rated municipals, Democrats take control in Washington DC, and vaccinations and reopening become visible.

Baird Funds Senior Portfolio Managers Duane McAllister, CFA, and Lyle Fitterer, CFA, provide insight into how staying with municipals can provide resiliency through uncertainty.

In our latest whitepaper our investment team provides insights into why it’s important to maintain a high-quality bias in the municipal market until the outlook is more certain.

Baird’s fixed income team illustrates how the moderate tax rate investors can benefit by investing in both the taxable and tax-exempt markets in their fixed income allocations.