One of Few Strategies Continuously Focused on Mid Caps Over That Period

MILWAUKEE, WI, July 10, 2018 /24-7PressRelease/ — Baird Equity Asset Management is proud to celebrate the 25th anniversary of the Baird Mid Cap Growth Strategy, one of only six strategies to be focused consistently on mid-cap growth stocks over that period with the same portfolio manager.

Chuck Severson, CFA, has been a Senior Portfolio Manager on the strategy since its inception in 1993. At this year’s Envestnet Advisor Summit, the Baird Mid Cap Growth Strategy was honored as Manager of the Year for the Mid Cap asset class. “We are honored to be recognized for this award,” said Severson. “Helping advisors and clients achieve their goals is not only gratifying but has been a priority since our strategy was launched 25 years ago. We are committed to delivering superior investment results and client service.”

“Baird’s Mid Cap Growth Strategy has always been managed with the same consistent and repeatable process and its risk-controlled approach has helped investors through tougher market environments,” said Reik Read, Managing Director, Baird Equity Asset Management. “Chuck Severson and Ken Hemauer, Co-Senior Portfolio Manager, are talented professionals that have demonstrated the ability to add value for clients throughout their careers by investing in high-quality mid cap growth companies.”

We took the opportunity to ask Severson and Hemauer a few questions on the occasion of this milestone.

What have you learned that is special about the mid cap sector during your tenure?

Twenty-five years ago we started this strategy with two investment professionals. Today we have a very experienced six person team. Most of us have now worked together for a long time and have covered our respective sectors for most, if not all, of our careers. In addition, all team members have deep experience researching mid cap companies.

We all agree that mid cap is a unique asset class; there are a lot of exciting companies with distinctive traits and compelling stories. These businesses have already broken profitability and been able to invest in items to help them be successful in the future; yet they nearly maintain almost all the growth rate of small caps but are not as volatile and are able to grow 2-3x faster than large caps.

How is your approach different from other managers?

We manage a true mid-cap portfolio for our clients, one with high conviction (50-60 names) and a high active share (84%). We do rigorous research to ensure a high quality portfolio which to us means companies that have clear advantages – more profitable, faster growing and better financed than their peers.

Historically, what environments has the strategy outperformed and underperformed?

We are pleased with how our mid cap growth portfolio has performed in varying market environments. The strategy has outperformed in broad based up-market years (2017, 2012, 2010 and 2007) and has had particularly strong relative performance in more challenging market environments. In the 25-year history of the Baird Mid Cap Growth strategy, we have only had four negative calendar years (2015, 2008, 2002, 2001) of performance compared with seven years for the Russell Mid Cap Growth benchmark. Baird has significantly outperformed the benchmark in all but one of those years. In three of those seven years, Baird has actually provided positive absolute performance.

We have typically underperformed the market during speculative, more narrow and momentum type environments when lower quality, high-debt and/or unprofitable stocks are in favor (2013-2016).

About Baird Equity Asset Management
Baird Equity Asset Management offers a broad array of independently managed equity investment strategies including Growth, Value and Global/International. As one of Pensions & Investments’ “Best Places to Work in Money Management,” Baird Equity Asset Management has talented investment teams working to ensure long-term quality and continuity for clients. Baird Equity Asset Management is a division of Baird, a global financial services firm that has ranked among FORTUNE’s 100 Best Companies to Work ForĀ® since 2004. For more information, please visit www.bairdequityassetmanagement.com.

Gross Annualized returns for the Baird MidCap Growth Equity Strategy are 22.91% for the one-year period, 9.80% for the three year period, 12.23% for the five year period, 12% for the ten year period and 12.17% since its June 30, 1993 inception. Net Annualized returns for the Baird MidCap Growth Equity Strategy are 22.10% for the one-year period, 9.05% for the three year period, 11.44% for the five year period, 11.31% for the ten year period and 11.56% since its June 30, 1993 inception. Annualized returns for the Russell MidCap Index are 19.74% for the one-year period, 9.17% for the three year period, 13.31% for the five year period, 10.61% for the ten year period and 9.99% since inception.

Past performance does not guarantee future results.

Investors should consider the investment objectives, risks, charges and expenses before investing. For additional important information about the fees, expenses, risks and terms of investment advisory accounts at Baird, please review Baird’s Form ADV Brochure, which can be obtained from your financial advisor and should be read carefully before opening an investment advisory account. You may also visit the www.bairdassetmanagement.com webpage. This also provides information about performance information to the most recent quarter.

All investments carry some level of risk, including loss of principal. Past performance is no guarantee of future results. The Envestnet 2018 Asset Manager award is for the Mid Cap Growth category. The name of the awards, previously known as the Separately Managed Account (SMA) Manager and Strategist of the Year Awards, was changed this year to better reflect the scope of the asset management industry and allow for the inclusion of more categories. As in previous years, the award winners and finalists were selected using Envestnet | PMC’s multi-factor, proprietary, and systematic methodology for evaluating managers. This framework considers a broad spectrum of qualitative and quantitative criteria, including investment process and style, performance, firm profile, customer service, and tax efficiency.


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