Baird’s Mid-Cap Growth Strategy topped the Russell Mid-Cap Growth Index by about 2% a year from June 2007 to June 2017.
Baird has “always believed that mid-cap is an excellent alpha generator,” according to Chuck Severson, senior portfolio management and managing director. Within this category, the team’s approach is to focus on “better businesses — companies that grow faster, are more profitable and are better financed” than others, he says.
“We love to find those compounders of above-average growth rates and margins,” explained Severson, “because when you find them, you can really make good long-term investments.”
The portfolio, which covers all the major industry/sector categories, benefited from last year’s economic and business conditions. “In 2017, with rates starting to rise [and] with an acceleration in the economy, good quality businesses finally started capturing alpha again,” said Severson.
The firm’s portfolio managers work with sector specialists, many of whom have spent much of their careers covering specific industries.