Small Cap Value Strategy

OVERVIEW

Baird Equity Asset Management’s Small Cap Value portfolio invests in domestic small-cap companies and seeks to provide superior risk-adjusted returns and consistently outperform the benchmark Russell 2000 Value Index over a full market cycle (typically 3–5 years). The portfolio comprises companies we expect to exceed street expectations and that trade at discounts to our proprietary calculations of fair value. To help control risks, the portfolio is generally diversified among companies in a broad range of industries and economic sectors.

Portfolio Construction

  • A concentrated portfolio of generally 40–50 stocks
  • A market cap range typically from $100 million to $2.5 billion at purchase 
  • Top holdings generally limited to 5% at cost, 8% at market
  • Sectors capped at 30% excluding financials 
  • A buy-and-hold approach
TEAM

For more information, contact Rob Zwiebel or the Intermediary Specialist in your region.

COMMENTARY

Q3 2018 Small/Mid Value and Small Value Commentary

Despite posting positive returns this year of 3.9% and 4.6% respectively, our Small Cap Value and Small/Mid Value Portfolios have actually witnessed the portfolios’ PEG ratios (Price Earnings ratio to growth rate) decline as a result of rising earnings growth estimates and pockets of P/E compression within the portfolio. We view this as an unusual combination and an attractive setup to future returns.

Read Full Small or Small/Mid Value Commentary

PERFORMANCE

Annualized Returns (%)

 3 MonthsYTD1-Year3-Year5-Year10-YearSince InceptionInception Date
Baird Small Cap Value (gross) 5.01 1.94 17.27 9.71 10.93 6.55 9.82 3/1/05
Baird Small Cap Value (net) 4.91 1.70 16.66 9.13 10.35 5.80 8.98 3/1/05
Russell 2000 Value Index 8.30 5.44 13.10 11.22 11.18 9.88 7.89


Annual Total Returns (%)

20172016201520142013201220112010200920082007
Baird Small Cap Value (gross) 19.48 16.35 -4.06 1.45 41.50 16.51 4.76 10.72 17.86 -36.61 34.06
Russell 2000 Value Index 7.84 31.74 -7.47 4.22 34.52 18.05 -5.50 24.50 20.58 -28.92 -9.78

*Data as of 6/30/18