Mid Cap Growth Strategy

OVERVIEW

The Baird Mid Cap Growth Strategy invests in U.S. mid-cap companies and is managed with a strong emphasis on risk control and a long-term perspective. The team strongly believes in having a true mid-cap product, with the majority of the portfolio invested in companies between $2B and $15B in market cap. The primary investment goal is to provide consistent, superior-to-market returns at a risk posture less than that of the market (vs. the Russell Midcap Growth Index). The team does this by finding companies for inclusion in the portfolio that have better growth prospects and capital structures than peers.

Portfolio Construction

  • A concentrated portfolio of generally 50–60 stocks
  • A majority of market cap range from $2 billion to $15 billion
  • The average position is 1%–3%, not to exceed 5% 
  • Sector weights 75%–125% relative to the benchmark, generally limited to 30% of portfolio
TEAM

For more information, contact Todd Haschker or the Intermediary Specialist in your region.

COMMENTARY

Q4 2018 Mid Cap Growth Commentary

Market Update

A difficult combination of slowing global growth, limited progress on trade negotiations, and additional Federal Reserve tightening contributed to a broad market sell-off in the fourth quarter. All major domestic stock indices finished down for the year, the first time since the Great Recession. While the U.S. economy remains the envy of the developed world and corporate earnings posted a strong advance in 2018, end-of-cycle fears took hold amid growing uncertainty and pushed multiples and prices lower as volatility rose. Hope in the form of a trade framework with China may develop in the coming months, but investors appeared to place low odds on that scenario as we crossed into the New Year.
 

Portfolio Commentary

Clients of the Baird Mid Cap Growth portfolios shared in the pain of the fourth-quarter market decline, but modestly outperformed the Russell MidCap® Growth Index, our primary benchmark. Returns in the month of December were particularly weak, representing the sharpest decline since the first quarter of 2016. Gross of fees annual returns for clients fell roughly -0.8% (-1.5% net of fees), but outperformed the benchmark by approximately 4.0%.

Read Full Baird Mid Cap Growth Commentary

PERFORMANCE

Annualized Returns (%)*

 3 MonthsYTD1-Year3-Year5-Year10-YearSince InceptionInception Date
Baird Mid Cap Growth Equity (gross) -15.42 -0.79 -0.79 10.55 6.80 15.45 11.56 6/30/93
Baird Mid Cap Growth Equity (net) -15.56 -1.48 -1.48 9.77 6.05 14.72 10.95 6/30/93
Russell MidCap® Growth Index -15.99 -4.75 -4.75 8.59 7.42 15.12 9.38

*Returns less than one year are not annualized.



Annual Total Returns (%)

20172016201520142013201220112010200920082007
Baird Mid Cap Growth Equity (gross) 28.00 6.37 -2.78 5.80 34.13 17.64 5.60 28.17 41.75 -40.25 21.18
Baird Mid Cap Growth Equity (net) 27.10 5.63 -3.49 5.06 33.09 16.79 5.06 27.70 41.14 -40.54 20.59
Russell Midcap Growth Index 25.27 7.33 -0.20 11.90 35.75 15.82 -1.66 26.38 46.29 -44.32 11.43

Data as of 12/31/18


Past performance does not guarantee future results.