Milwaukee, December 15, 2022–(BUSINESS WIRE)– Baird Strategic Municipal Bond Fund (BSNIX) and Baird Municipal Bond Fund (BMQIX) recently passed the three-year mark, showing strong investment results since inception. Both funds received a 5 Star Morningstar Rating™1It is managed by Duane McAllister, CFA and Lil Feiter, CFA, Eric Schleicher, CFA, Joseph Checkowicz, CFA and Gabe Diederich, CFA.
“These two additions were strong performers in our municipal bond fund lineup,” said Mary Ellen Stanek, CFA, managing director, co-chief investment officer and president of the Baird Fund. “Managed by such a deep and experienced team, these funds are a great complement to our existing funds and provide additional choices for our investors.”
As a result of this three-year milestone, the Baird Municipal Team shared a few thoughts on the current state of the market:
As the Federal Reserve seeks to take advantage of inflation, yields are expected to rise sharply in 2022. What will 2022 mean for bond investors?
As yields grow and the curve flattens and then inverts, the odds of a downturn increase. We expect inflation to accelerate over the next several quarters. While the labor market is still very tight, global inflationary forces such as demographics and technology persist. The bond market seems to be saying that inflation won’t be a long-term issue. This means that we will see market opportunities as the product increases and expands significantly. But this comes with high volatility and short liquidation periods.
What does this mean for bond investors going forward?
The advantage is that bond investors are now getting higher yields. An inverted yield curve may mean that investors are benefiting especially from the short end of the curve, but this may be temporary. An inversion of the past curve is an economic sign of a looming recession, which has led to lower interest rates. Investors with longer time horizons are rewarded for outperforming short-term maturities. Read our latest insights on inverted yield curve flitting free lunch.
What is your outlook on the municipal bond market for 2023?
Municipal credits are in a position to support the market with revenues and reserves. We expect a slower pace of growth for state and local tax revenues and believe it is prudent to focus on high-quality bonds.
Click here to hear more from the team on their thoughts on the inverted yield curve.
About Baird Funds
Baird Funds is a no-load mutual fund family with over $88 billion in assets as of November 30, 2022. Baird Funds offers a proven track record and diversified portfolios that include fixed income and equity asset classes. The ten bond funds and five stock funds include competitive fees and are managed with a careful focus on risk management. For more information, visit www.bairdfunds.com.
Putting clients first since 1919, Baird is an employee-owned, global wealth management, asset management, investment banking/capital markets and private equity firm with offices in the United States, Europe and Asia. As of June 30, 2022, Baird has approximately 4,800 partners serving the needs of individual, corporate, institutional and municipal clients and more than $360 billion in client assets. Committed to being a great place to work, Baird’s 2022 Fortune 100 Best Companies to Work For® List – 19Th Consecutive year on the list. Baird is the trading 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 Europe, the Robert W. Baird Group Ltd. Baird has an operating subsidiary in Asia that supports Baird’s investment banking and private equity operations. For more information, please visit Baird’s website at www.rwbaird.com.
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Performance data represents past performance and does not guarantee future results. Because investment returns and the principal value of an investment change, stocks may be worth more or less than the original cost when purchased. Current performance data may be lower or higher than specified data. For performance data up to the most recent month-end, annual average total return, gross and net expense ratios and sales charges for both the investor and institutional fund, please visit https://www.bairdassetmanagement.com/baird-funds/funds-and-performance.
1The Morningstar Rating™ is calculated for funds or “star ratings” for managed products with at least a three-year track record. Exchange-traded funds and open-end mutual funds are treated as one population for comparative purposes. The managed product’s monthly return is calculated based on Morningstar’s risk-adjusted return scale, which covers variance in performance, with greater emphasis on downside variance and rewards consistent performance. The Morningstar rating does not include any adjustments for sales shipments. In each product category, the top 10% of products 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. A managed product’s overall Morningstar rating is derived from the average performance figures associated with 3-, 5-, and 10-year (if applicable) Morningstar rating metrics. Although the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period is also included in all three rating periods, so it has a significant impact. Baird Strategic Municipal Bond Fund (Institute) received an overall 5-star and 3-year Morning Star rating out of 282 funds in the Muni National Mid-Range category for the period ending November 30, 2022. Baird Municipal Bond Fund (Institution) received. Overall and 3-year Morning Star rating of 5 stars out of 156 in Muni’s national tall category in 2015. Term ends November 30, 2022.
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Fixed income is generally considered a more conservative investment than stocks, but bonds and other fixed income investments still carry various risks 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 declines and conversely, in a falling interest rate environment, the value of fixed income securities generally increases. Municipal securities investments are not suitable for all investors, especially those with low interest rates.
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