Baird Strategic Municipal Bond and Baird Municipal Bond Funds Reach a Three-Year Milestone
MILWAUKEE--(BUSINESS WIRE)--Dec 15, 2022--
Baird Strategic Municipal Bond Fund (BSNIX) and Baird Municipal Bond Fund (BMQIX) recently crossed the three-year mark, demonstrating strong investment results from inception. The funds, which both received a Morningstar Rating™ of 5 Stars 1, are managed by a team led by Duane McAllister, CFA, and Lyle Fitterer, CFA, that includes Erik Schleicher, CFA, Joseph Czechowicz, CFA, and Gabe Diederich, CFA.
“These two additions to our municipal bond fund line up have had strong performance out of the gate,” said Mary Ellen Stanek, CFA, Managing Director, Co-Chief Investment Officer and President of Baird Funds. “Managed by such a deep and experienced team, these funds have proven to be great complements to our existing funds and provide additional choices for our investor.”
On the occasion of this three-year milestone, the Baird municipal team shared a few thoughts on the current market environment:
Yields rose significantly in 2022 as the Federal Reserve sought to harness inflation. What did that mean for bond investors in 2022?
As yields rose and the curve flattened and then inverted, the odds of a recession have increased. We expect inflation to temper over the next several quarters. While the labor market is still very tight, secular disinflationary forces such as demographics and technology persist. The bond market seems to be saying that the inflation surge will not be a long-term issue. That said, with yields up sharply and spreads widening, we see market opportunities. But this will be accompanied by a higher risk environment with higher volatility and periods of less liquidity.
What does this mean for bond investors going forward?
The upside is that bond investors are now earning significantly higher yields. The inverted yield curve can mean that investors are especially benefiting at the short end of the curve, but this may be fleeting. Past curve inversions have been an economic signal of a looming recession which has led to declining interest rates. Investors with a longer time horizon were rewarded for moving out beyond very short maturities. Read our latest insights The Fleeting Free Lunch of the Inverted Yield Curve.
What is your outlook on the municipal bond market for 2023?
Municipal credits are in great shape with revenues and reserves providing support for the market. We anticipate a slower pace of growth for state and local tax revenues and believe a focus on higher quality bonds to be prudent.
To hear more from the team on their thoughts on the inverted yield curve, click here.
About Baird Funds
Baird Funds is a no-load mutual fund family with more than $88 billion in assets as of November 30, 2022. The Baird Funds offer proven track records and a variety of portfolios spanning fixed income and equity asset classes. The ten bond funds and five stock funds feature competitive fees and are managed with a careful focus on risk control. For more information, visit www.bairdfunds.com.
Putting clients first since 1919, Baird is an employee-owned, international wealth management, asset management, investment banking/capital markets, and private equity firm with offices in the United States, Europe and Asia. Baird has approximately 4,800 associates serving the needs of individual, corporate, institutional and municipal clients and more than $360 billion in client assets as of June 30, 2022. Committed to being a great workplace, Baird ranked No. 27 on the 2022 Fortune 100 Best Companies to Work For ® list – its 19 th consecutive year on the list. Baird is the marketing name of Baird Financial Group. Baird’s principal operating subsidiaries are Robert W. Baird & Co. Incorporated and Baird Trust Company in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s investment banking and private equity operations. For more information, please visit Baird’s website at www.rwbaird.com.
Investors should consider the investment objectives, risks, charges and expenses of each fund carefully before investing. This and other information is found in the prospectus and summary prospectus. For a prospectus or summary prospectus, contact Baird directly at 866-442-2473. Please read the prospectus or summary prospectus carefully before investing.
Performance data represents past performance and does not guarantee future results. The investment return and principal value of the investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the data quoted. For performance data to the most recent month end, Annual Average Total Return, gross and net expense ratios and any sales charges for both the investor and institutional classes of the funds, please visithttps://www.bairdassetmanagement.com/baird-funds/funds-and-performance.
1 The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods. The Baird Strategic Municipal Bond Fund (Institutional) received an Overall and 3-Year Morningstar Rating of 5 stars out of 282 funds in the muni national intermediate category for the period ending November 30, 2022. The Baird Municipal Bond Fund (Institutional) received an Overall and 3-Year Morningstar Rating of 5 stars out of 156 in the muni national long category for the period ending November 30, 2022.
© 2022 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
This is not a complete analysis of every material fact regarding any company, industry or security. The information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy. Baird does not provide tax or legal advice. Please consult your legal or tax professional for specific information.
Fixed income is generally considered to be a more conservative investment than stocks, but bonds and other fixed income investments still carry a variety of risk such as interest rate risk, regulatory risk, reinvestment risk, credit risk, inflation risk, call risk, default risk, political risk, tax policy risk and liquidity risk. In a rising interest rate environment, the value of fixed-income securities generally decline and conversely, in a falling interest rate environment, the value of fixed income securities generally increase. Municipal securities investments are not appropriate for all investors, especially those taxed at lower rates.
View source version on businesswire.com:https://www.businesswire.com/news/home/20221215005958/en/
CONTACT: Jody Lowe
KEYWORD: UNITED STATES NORTH AMERICA WISCONSIN
INDUSTRY KEYWORD: ASSET MANAGEMENT PROFESSIONAL SERVICES FINANCE
Copyright Business Wire 2022.
PUB: 12/15/2022 02:05 PM/DISC: 12/15/2022 02:05 PM