While Baird Core Plus Bond inhabits a well-trodden investment-grade landscape, management's experience and nimble implementation have given the fund an edge.
Mary Ellen Stanek helms a team of six named co-portfolio managers who average 33 years of experience in the industry and have contributed to this strategy since its 2000 inception. Though the analyst pool may be smaller than those at larger firms, the intricate communication across seasoned contributors as well as a commitment to sticking to investments that the team can thoroughly vet with their given knowledge and tools, has fueled the success of this David versus many Goliaths in the industry. Similar to many peers in the ultra-competitive intermediate-term bond category, this fund invests in a mix of corporates, mortgages, and Treasuries, but unlike those same peers, keeps riskier exposures--such as high yield--at a much more modest single-digit allocation.
The fund's no leverage, no derivatives, and duration-neutral approach enables management to focus on its strengths: security selection and sector rotation. Over the trailing 10 years ended February 2017, the portfolio generated 5.4% of annualized return, ahead of its Bloomberg Barclays U.S. Universal Bond Index and better than 90% of intermediate-term category peers. Low volatility and rock-bottom fees further contribute to the fund's appeal, supporting a Morningstar Analyst Rating of Silver.