Insights

Underperformance was concentrated in the first half of the quarter as the portfolio lagged during the sharp market advance.

Other than modest underperformance in technology and financials, all other major sectors drove positive relative returns in the first quarter.

Volatility disrupted global markets in the quarter amidst U.S. tariff policies and geopolitical tensions.

Treasury Yields Decline in Q1 Amid Policy Uncertainty and Lower Economic Growth Forecasts

Municipal Yields Rise in Q1 Amid Heavy Supply

Chautauqua Capital shares insights on how DeepSeek has disrupted the AI market.

Treasury Yields Fall on Softer Economic Data and Policy Uncertainty

Tax-exempt Yields Fall and Supply Remains Robust

Treasury Yields Decline, Fed Holds Policy Rate Steady as Attention Turns to the Trump Administration’s Policy Agenda

Curve Steepens and Tax-exempt Yields Fall Despite Strong January Supply

The market moved through three distinct phases in the fourth quarter, defined almost exactly by the monthly turn of the calendar.

Equities in 2024 were buoyed by strength in the U.S. economy and the start of a Federal Reserve easing cycle. The Fund delivered a net return of +14.2% in Q4, compared to a +0.3% return for the benchmark.

The market moved through three distinct phases in the fourth quarter, defined almost exactly by the monthly turn of the calendar.

U.S. equities outperformed international equities amid a backdrop of monetary policy easing and U.S. election hype.

2024 Bond Market Review

2024 Municipal Market Review

Long-term investors should consider the potential benefits of maintaining an allocation to international equities.

Tax-exempt Yields Fall in November

Treasury Yields Volatile as Election Concludes and Fed Cuts Rates as Expected

Treasury Yields Climb Sharply on Resilient Data and Reduced Expectations of Fed Easing

Municipal Yields Rise in October

Equities posted a strong quarter on the back of encouraging economic data and the anticipation of a series of interest rate cuts by the Federal Reserve.

Factors were not a major headwind or tailwind as the strategy kept pace with a solid benchmark return in the quarter.

The Strategy’s strong absolute returns were spurred by the market’s embrace of easing inflation data, and the prospect that lower interest rates will allow the U.S. economy to avoid recession.

Equity markets continued to rally throughout the third quarter, with strong positive strock returns, globally.

Fed Cuts 50 bps, Positive 2s10s Curve Slope Returns as Short Rates Fall the Most

Municipal Yields Fall through Q3 Even as Supply Soars

Municipal Curve Returns to Positive Slope

Fed Chair Powell Signals First Rate Cut in September, Helping to Normalize the Yield Curve

Treasury Yields Decline as Inflation Cools and Fed Signals Forthcoming Cuts

Municipal Yields Fall in July on Strong Demand and Still Robust Supply

While larger-cap equities reached new heights, smaller-cap stocks continued to struggle during the quarter.

The well-known S&P 500 advanced in the quarter, a stark contrast to declines in the broader small and mid-cap equity indices.

The well-known S&P 500 advanced in the quarter, a stark contrast to declines in the broader small and mid-cap equity indices.

Appreciation in global equity markets continued in the quarter and the Funds outperformed their indices.

Municipal Yields Fall in June, Rise in Q2 and Supply Booms

Treasury Yields Fall in June but End Higher for Q2, Resilient Economy Likely Delays Fed Rate Cuts

Municipal Yields Mixed in May on Supply Surge

Yields Fall as Labor Market and Inflation Cools after Q1 Upside Surprise

Equities continued their ascent to the start of the year, bolstered by hopes of easing monetary policy.

Municipal Yields Continued to Rise in April

Yields Rise on Stubborn Inflation, Firm Labor Market and Reduced Fed Rate Cut Expectations

The Baird SMID Growth portfolio produced a positive return, with mixed performance across the portfolio, but the net result trailed the sharp increase in the benchmark.

The Baird Mid Cap Growth portfolio produced a positive return with all sectors advancing, but the net result trailed the sharp increase in the Russell Mid Cap Growth Index.

Global equity markets staged another broad rally for the first quarter, with the Funds outperforming their benchmarks.

Treasury Yields Rise in Q1 as Markets Reduce Fed Rate Cut Expectations on Stronger than Expected Growth and Inflation

Municipal Yields Rise in Q1 and Demand Returns

Strong Economic Data and Reduced Fed Rate Cut Expectations Lift Treasury Yields

Strong Demand Meets Increased Supply

Equities bounced back in 2023, as easing inflation raised hopes for looser monetary policy and drove valuations higher.

Tax-exempt Yields Rise as Supply Returns to the Market

Rangebound Treasury Yields with a Steepening Bias, Inflation Cooling Alongside Resilient US Economy

Baird Advisors explores how income driven investing could be a successful new way to manage interest rate risk.

Baird Advisors Shares Timely Insights for Bond Investors

While the full-quarter results still lagged the benchmark, we were encouraged by the portfolio’s outperformance during the strong move into year-end as we saw the breadth of positive performance spread more evenly across sectors.

There were various drivers of underperformance in the quarter, as there were a multitude of factors that changed significantly, particularly in December. These factors were broadly negative for our style of management as more highly levered, lower-margin, and lower-earnings growth companies outperformed.

Equity markets rallied to close out the year as fiscal conditions loosened; the Funds performed in line with benchmarks.

2023 Review and 2024 Outlook

2023 Review and 2024 Outlook

Treasury Yields Decline Sharply on Market Hopes for 2024 Rate Cuts and Economic Soft Landing

Massive Rally in November; Municipals Outperform Treasuries

Trend of Rising Yields Continues as Inflation Remains Above Target and Term Premium Rises

Yields Trend Higher and Curve Steepens Led by Rise in Long-term Rates

Equity markets took a step down in the quarter, giving back a portion of first half gains.

The portfolio underperformed the Russell 2000 Index during the quarter. Market performance remained narrow and again heavily favored larger capitalization stocks.

Equity markets took a step down in the quarter, giving back a portion of first half gains. A notable run-up in interest rates reflecting still above trend inflation, a healthy labor market with rising wage rates, and a growing concern about the domestic fiscal situation was too much for stocks to handle.

Fixed income team provides insights on bond market and outlook for investors.

Third quarter ended much differently than it started as growing acceptance of globally higher rates for longer resulted in markets finishing negative. In this environment, the Funds underperformed their benchmarks.

Chautauqua addresses China-specific risks and how we select companies in our international and global portfolios.

Yields Rise Sharply in September and Q3; Steepening Trend Reduces Curve Inversion

Yields Rise Sharply as Fed Reinforces Higher for Longer Messaging on Stronger Than Expected Growth and Sticky Inflation

Yields Rose and the Inversion Lessened in August

Fitch Downgrades US Treasury Debt to AA+, 10yr Reaches Highest Yield Since 2007 on Resilient Economic Data

Yields Were Steady in July, Curve Inversion Persists

Fed Hikes in July, US GDP Strength Lifts Long Treasury Yields

While the portfolio underperformed its benchmark in Q2, stock indices and the portfolio rose in the second quarter and capped off a solid first half of the year.

The portfolio underperformed the Russell 2000 Index during the quarter. However, the Fund remains modestly ahead of the index YTD, and continues to demonstrate a strong, longer-term track record.

Curve Inversion Persists as Rates Rise in Q2

Treasury Yields Rise and Curve Inversion Deepens as Fed Skips June Hike but Maintains Hawkish Stance

Tax-exempt Yields Rise and the Curve Flattens in May

Treasury Yields Climb on Resilient Economic Data, Fading Regional Bank Concerns and Debt Ceiling Uncertainty

Municipal Yields Rise as the Curve Inverts Further in April

Treasury Yields Stabilize Despite Sticky Inflation Data and Looming Debt Ceiling Uncertainty

The portfolio outperformed the Russell 2000 Index in Q1 2023. Equity markets were resilient despite increased volatility in the small-cap arena.

The portfolio outperformed the Russell 2500 Growth Index in Q1 2023. Our strategy is off to a nice start in 2023, driven by numerous stocks across several sectors

The portfolio outperformed the Russell MidCap® Growth Index in Q1, where strength was fairly broad-based and relatively consistent during the risk-on/risk-off trading behavior of the overall market.

Our Funds outperformed their benchmarks in Q1; a rotation back to growth stocks led equity markets with stock selection driving the funds’ strong performance.

An era of low inflation and low interest rates has ended. Inflation is running at its fastest pace in decades in many places, and a range of central banks are pushing rates quickly higher.

Large Market Swings as Fed Forced to Balance Inflation Fight with Financial Stability Concerns

Municipal Yields Decline in Q1 Led by Sharply Lower Rates in March

Tax-exempt Rates Rose in February, Reversing the January Decline

Treasury Yields Rose in February on Stronger than Expected Growth and Inflation Data

Favorable Supply/Demand Backdrop Provides Strong Start for Municipals in 2023

Solid Start to 2023 as Pace of Fed Rate Hikes Slow and Flows Turn Positive

The portfolio underperformed the Russell 2500 Growth Index in Q4 2022, where relative gains in some sectors were offset by relative declines in several others.

The portfolio underperformed the Russell MidCap® Growth Index in Q4, where the collective drag of several challenged sectors offset outperformance in other areas.

The portfolio outperformed the Russell 2000 Index during the quarter, while equities sank in 2022 as persistent inflation forced interest rates higher and valuations lower.

2022 Taxable Bond Market Review

2022 Municipal Market Review

Chautauqua's growth funds ended the year with a strong fourth quarter. Health care stocks led the way as our funds delivered solid Q4 returns.

Worldwide investing offers an expanded opportunity set.

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.

Rates Higher and Curve Flatter in Q3 on Committed Fed

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

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

Bond Yields Rise on Strong Data and Hawkish Fed Messaging

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

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

Upside Inflation Surprise Emboldens Hawkish Fed, Odds of Recession Rise

Higher Rate Trend Continues in Q2, Municipal Curve Steepens

Investment Grade Bond Prices Rise as Fed Tightening Cools Economic Data

Mid-Month Pivot in Municipal Yields and Industry Fund Flows

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

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

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

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?

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

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

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.