Congratulations to Baird’s MidCap Growth Mutual Fund Team – Named to Morningstar Prospects List
This week Morningstar produced their Q4 2016 prospects list. According to Morningstar, “The fourth quarter of 2016 saw a great deal of activity on the Morningstar Prospects list--a list of up-and-coming or under-the-radar investment strategies that Morningstar Manager Research thinks might be worthy of full coverage someday. We added 14 new strategies, seven others graduated to full coverage, and three strategies were dropped from the list.
U.S. Equity Baird MidCap by Dan Culloton
An experienced team runs Baird MidCap with a process honed over two decades. The six members have an average tenure of about 11 years, and senior comanager Chuck Severson has worked on the strategy since its June 1993 inception (the mutual fund launched in 2000). Severson and co-lead Ken Hemauer, a 14-year veteran of the squad, use fundamental research with quantitative and technical overlays to pick 50-60 mid-cap stocks that meet their standards for profitability, revenue growth, industry conditions, management strength, and market expectations.
The portfolio caps holdings at 3% at purchase and 5% overall and keeps sector weightings within 25% of its Russell Midcap Growth Index benchmark’s. Bottom-up work determines what’s purchased, usually debt-light firms that can sustain earnings and revenue growth for three to five years. Quant and technical screens help find entry and exit points and manage position sizes. Stocks with strong fundamentals and screen scores get larger weightings. Despite the screens, turnover isn’t high. This team runs about $2 billion, including $1.3 billion in the mutual fund. Milwaukee-based Baird Investment Management is employee-owned, and Severson has between $500,001 and $1 million invested in the fund; Hemauer invests between $100,001 and $500,000.
Portfolio Managers and their Start Date:
Charles F. Severson 12-2000
Kenneth M. Hemauer 05-2010
|Corbin Weyer, Bill Walker, Chuck Severson, and Dr. David Krause|