ck0001282693-20221231
TABLE
OF CONTENTS
Investment Objective
The investment objective of
the Baird Ultra Short Bond Fund (the “Fund”) is to seek current income
consistent with preservation of capital.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Investor
Class
Shares |
Institutional Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1) Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Fee
Waiver(1) |
-0.15% |
-0.15% |
Total
Annual Fund Operating Expenses After Fee Waiver |
0.40% |
0.15% |
(1)Robert W. Baird & Co.
Incorporated (the “Advisor”) has contractually agreed to waive management fees
in an amount equal to an annual rate of 0.15% of the average daily net assets
for the Fund until April 30,
2024. The agreement may only be terminated prior to the end of
this term by or with the consent of the Board of Directors of Baird Funds,
Inc.
Example
This
Example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other mutual funds.
The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example
also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the same. Please
note that the one‑year numbers below are based on the Fund’s net expenses
resulting from the fee waiver agreement described above.
Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$41 |
$161 |
$292 |
$675 |
Institutional
Class Shares |
$15 |
$81 |
$154 |
$366 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 104% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in bonds, including the
following types of U.S. dollar‑denominated debt obligations:
•Obligations
of U.S. government and other public‑sector entities
•Asset‑backed
and mortgage‑backed obligations of U.S. and foreign issuers
•Corporate
debt of U.S. and foreign issuers
•Money
market instruments
The
Fund invests primarily in investment‑grade debt obligations, rated at the time
of purchase by at least one major rating agency, but may invest up to 10% of its
net assets in non‑investment grade debt obligations (sometimes referred to as
“high yield” or “junk” bonds). The Fund may also invest in unrated debt
obligations that are determined by the Advisor to be comparable in quality to
the rated obligations. After purchase, a debt obligation may cease to be rated
or may have its rating reduced below the minimum rating required by the Fund for
purchase. In such cases, the Advisor will consider whether to continue to hold
the debt obligation. The Fund may hold debt obligations with a “D” or similar
credit rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg U.S. Short‑Term
Government/Corporate Index. The duration of the Fund’s benchmark as of March 31,
2023 was 0.53 years. The dollar‑weighted average portfolio effective maturity of
the Fund will normally be more than three months but less than eighteen months
during normal market conditions. The Fund may invest in debt obligations of all
maturities. The Advisor attempts to
diversify
the Fund’s portfolio by holding debt obligations of many different issuers and
choosing issuers in a variety of sectors.
In
determining which debt obligations to buy for the Fund, the Advisor attempts to
achieve returns that exceed the Fund’s benchmark primarily in three ways:
•Yield
curve positioning:
The Advisor selects debt obligations with maturities and yields that it believes
have the greatest potential for achieving the Fund’s objective, while attempting
to match the average duration of the debt obligations in the Fund with the
average duration of the debt obligations in the Fund’s benchmark.
•Sector
allocation: The
Advisor invests in debt obligations in those sectors which it believes represent
the greatest potential for achieving the Fund’s objective.
•Security
selection:
The Advisor determines which issuers it believes offer the best relative value
within each sector and then decides which available debt obligations of that
issuer to purchase.
The Fund may invest in foreign debt
obligations. The Advisor generally will sell a debt obligation when, on a
relative basis and in the Advisor’s opinion, it will no longer help the Fund
attain its objective.
Principal
Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”). The Fund
invests primarily in short‑term bonds along with variable and floating rate
instruments, whose prices are less sensitive to interest rate changes than are
the prices of long‑term bonds. Generally, a bond with a longer maturity will
entail greater interest rate risk but have a higher yield. Conversely, a bond
with a shorter maturity will entail less interest rate risk but have a lower
yield (“maturity risk”). Variable and floating rate instruments generally have
lower interest rate sensitivity because their coupon rate periodically resets
based on an index rate that changes with the general level of interest rates. A
bond’s value may also be affected by changes in its credit quality rating or the
issuer’s financial condition (“credit quality risk”). Bonds are also generally
subject to credit risk that an issuer will not make timely payments of principal
and interest.
Credit
Quality Risks
Debt
obligations receiving the lowest investment grade rating may have speculative
characteristics and, compared to higher grade debt obligations, may have a
weakened capacity to make principal and interest payments due to changes in
economic conditions or other adverse circumstances. Ratings are essentially
opinions of the credit quality of an issuer and may prove to be inaccurate.
Non‑Investment
Grade Quality Risks
Non‑investment
grade debt obligations involve greater risk than investment‑grade debt
obligations, including the possibility of default or bankruptcy. They tend to be
more sensitive to economic conditions than higher‑rated debt and, as a result,
are generally more sensitive to credit risk than debt obligations in the
higher‑rated categories.
Mortgage‑
and Asset‑Backed Debt Obligations Risks
Mortgage‑
and asset‑backed debt obligations are subject to interest rate risk. Modest
movements in interest rates (both increases and decreases) may quickly and
significantly reduce the value of certain types of these debt obligations. When
interest rates fall, mortgage‑ and asset‑backed debt obligations may be subject
to prepayment risk, which is the risk that the borrower will prepay some or the
entire principal owed to the investor. When interest rates rise, certain types
of mortgage‑ and asset‑backed debt obligations are subject to extension risk,
discussed below. Mortgage‑ and asset‑backed debt obligations can also be subject
to the risk of default on the underlying residential or commercial mortgage(s)
or other assets.
Extension
Risk
Debt
obligations, including mortgage‑ and asset‑backed debt obligations, may be paid
off by the borrower more slowly than anticipated, increasing the average life of
such debt obligations and the sensitivity of the prices of such debt obligations
to future interest rate changes.
Government
Obligations Risks
No
assurance can be given that the U.S. government will provide financial support
to U.S. government-sponsored agencies or instrumentalities where it is not
specifically obligated to do so by law, such as the Federal National Mortgage
Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation
(“Freddie Mac”). To the extent a Fund holds securities of such an issuer and
that issuer defaults, the Fund might not be able to recover its investment from
the U.S. government.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest. The repayment of principal and interest on some of the
municipal obligations in which the Fund may invest may be guaranteed or insured
by a monoline insurance company. If a company insuring municipal obligations in
which the Fund invests experiences financial difficulties, the credit rating and
price of the security may deteriorate.
Foreign
Securities Risks
Foreign
investments, even those that are U.S. dollar‑denominated, may involve additional
risks, including political and economic instability, differences in financial
reporting standards and less regulated securities markets, and withholding of
foreign taxes.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one and five years and since inception
period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
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Best
quarter: |
2nd quarter 2020 |
1.69 |
% |
Worst
quarter: |
1st quarter 2020 |
-0.50 |
% |
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Average Annual Total Returns as of
December 31, 2022 |
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Year |
5
Years |
Since
Inception (12/31/13) |
Institutional
Class |
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Return Before
Taxes |
0.96% |
1.57% |
1.36% |
Return After Taxes on
Distributions |
0.32% |
0.90% |
0.79% |
Return After Taxes on Distributions and
Sale of Fund Shares |
0.57% |
0.91% |
0.79% |
Investor
Class |
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Return Before
Taxes |
0.70% |
1.35% |
1.13% |
Bloomberg
U.S. Short‑Term Government/Corporate Index
(reflects no deduction for
fees, expenses or taxes) |
0.69% |
1.35% |
1.00% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
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Name |
Portfolio Manager
of the Fund Since |
Title |
Mary
Ellen Stanek, CFA |
2013 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Warren
D. Pierson, CFA |
2013 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
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Name |
Portfolio Manager
of the Fund Since |
Title |
Charles
B. Groeschell |
2013 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jay
E. Schwister, CFA |
2019 |
Senior
Portfolio Manager and Director of Research for Baird Advisors and Managing
Director of the Advisor |
M.
Sharon deGuzman |
2013 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Meghan
H. Dean, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jeffrey
L. Schrom, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Patrick
W. Brown, CFA |
2021 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Andrew
J. O’Connell, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
Abhishek
Pulakanti, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Short‑Term Bond Fund (the “Fund”) is to seek an annual rate of total
return, before fund expenses, greater than the annual rate of total return of
the Bloomberg 1‑3 Year U.S. Government/Credit Bond Index.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 77% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in the following types of
U.S. dollar‑denominated debt obligations:
•Obligations
of U.S. government and other public‑sector entities
•Asset‑backed
and mortgage‑backed obligations of U.S. and foreign issuers
•Corporate
debt of U.S. and foreign issuers
The
Fund only invests in investment-grade debt obligations, rated at the time of
purchase by at least one major rating agency or, if unrated, determined by
Robert W. Baird & Co. Incorporated (the “Advisor”) to be investment grade.
After purchase, a debt obligation may cease to be rated or may have its rating
reduced below the minimum rating required by the Fund for purchase. In such
cases, the Advisor will consider whether to continue to hold the debt
obligation. The Fund may hold debt obligations with a “D” or similar credit
rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg 1‑3 Year U.S. Government/Credit
Bond Index. The duration of the Fund’s benchmark as of March 31, 2023 was
1.87 years. The dollar‑weighted average portfolio effective maturity of the Fund
will normally be more than one year but less than three years during normal
market conditions. The Fund may invest in debt obligations of all maturities.
The Advisor attempts to diversify the Fund’s portfolio by holding debt
obligations of many different issuers and choosing issuers in a variety of
sectors.
In
determining which debt obligations to buy for the Fund, the Advisor attempts to
achieve returns that exceed the Fund’s benchmark primarily in three ways:
•Yield
curve positioning:
The Advisor selects debt obligations with maturities and yields that it believes
have the greatest potential for achieving the Fund’s objective, while attempting
to match the average duration of the debt obligations in the Fund with the
average duration of the debt obligations in the Fund’s benchmark.
•Sector
allocation: The
Advisor invests in debt obligations in those sectors which it believes represent
the greatest potential for achieving the Fund’s objective.
•Security
selection:
The Advisor determines which issuers it believes offer the best relative value
within each sector and then decides which available debt obligations of that
issuer to purchase.
The Fund may invest in foreign debt
obligations and money market instruments. The Advisor generally will sell a debt
obligation when, on a relative basis and in the Advisor’s opinion, it will no
longer help the Fund attain its objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”). The Fund
invests primarily in short‑term bonds, whose prices are less sensitive to
interest rate changes than are the prices of long‑term bonds. Generally, a bond
with a longer maturity will entail greater interest rate risk but have a higher
yield. Conversely, a bond with a shorter maturity will entail less interest rate
risk but have a lower yield (“maturity risk”). A bond’s value may also be
affected by changes in its credit quality rating or the issuer’s financial
condition (“credit quality risk”). Bonds are also generally subject to credit
risk that an issuer will not make timely payments of principal and interest.
Credit
Quality Risks
Debt
obligations receiving the lowest investment grade rating may have speculative
characteristics and, compared to higher grade debt obligations, may have a
weakened capacity to make principal and interest payments due to changes in
economic conditions or other adverse circumstances. Ratings are essentially
opinions of the credit quality of an issuer and may prove to be inaccurate.
Mortgage‑
and Asset‑Backed
Debt Obligations Risks
Mortgage‑
and asset‑backed debt obligations are subject to interest rate risk. Modest
movements in interest rates (both increases and decreases) may quickly and
significantly reduce the value of certain types of these debt obligations. When
interest rates fall, mortgage‑ and asset‑backed debt obligations may be subject
to prepayment risk, which is the risk that the borrower will prepay some or the
entire principal owed to the investor. When interest rates rise, certain types
of mortgage‑ and asset‑backed debt obligations are subject to extension risk,
discussed below. Mortgage‑ and asset‑backed debt obligations can also be subject
to the risk of default on the underlying residential or commercial mortgage(s)
or other assets.
Extension
Risk
Debt
obligations, including mortgage‑ and asset‑backed debt obligations, may be paid
off by the borrower more slowly than anticipated, increasing the average life of
such debt obligations and the sensitivity of the prices of such debt obligations
to future interest rate changes.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Government
Obligations Risks
No
assurance can be given that the U.S. government will provide financial support
to U.S. government-sponsored agencies or instrumentalities where it is not
specifically obligated to do so by law, such as the Federal National Mortgage
Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation
(“Freddie Mac”). To the extent a Fund holds securities of such an issuer and
that issuer defaults, the Fund might not be able to recover its investment from
the U.S. government.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest. The repayment of principal and interest on some of the
municipal obligations in which the Fund may invest may be guaranteed or insured
by a monoline insurance company. If a company insuring municipal obligations in
which the Fund invests experiences financial difficulties, the credit rating and
price of the security may deteriorate.
Foreign
Securities Risks
Foreign
investments, even those that are U.S. dollar‑denominated, may involve additional
risks, including political and economic instability, differences in financial
reporting standards, less regulated securities markets, and withholding of
foreign taxes.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one, five and ten years and since
inception period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
2nd quarter 2020 |
3.43 |
% |
Worst
quarter: |
1st quarter 2022 |
-2.64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception (8/31/04) |
Since
Inception (9/19/12) |
Institutional
Class(1) |
|
|
|
| |
Return Before
Taxes |
-3.64% |
1.22% |
1.36% |
2.33% |
N/A |
Return After Taxes on
Distributions |
-4.33% |
0.37% |
0.56% |
1.30% |
N/A |
Return After Taxes on Distributions and
Sale of Fund Shares |
-2.15% |
0.59% |
0.70% |
1.39% |
N/A |
Investor
Class(2) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception (8/31/04) |
Since
Inception (9/19/12) |
Return Before
Taxes |
-3.88% |
0.97% |
1.11% |
N/A |
1.15% |
Bloomberg
1‑3 Year U.S. Government/Credit Bond Index
(reflects no deduction for
fees, expenses or
taxes) |
-3.69% |
0.92% |
0.88% |
1.96% |
0.88% |
(1)The inception date of the
Institutional Class shares of the Short-Term Bond Fund was August 31,
2004.
(2)The
inception date of the Investor Class shares of the Short‑Term Bond Fund was
September 19, 2012.
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Mary
Ellen Stanek, CFA |
2004 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Warren
D. Pierson, CFA |
2004 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Charles
B. Groeschell |
2004 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Jay
E. Schwister, CFA |
2019 |
Senior
Portfolio Manager and Director of Research for Baird Advisors and Managing
Director of the Advisor |
M.
Sharon deGuzman |
2004 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Meghan
H. Dean, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jeffrey
L. Schrom, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Patrick
W. Brown, CFA |
2021 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Andrew
J. O’Connell, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
Abhishek
Pulakanti, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Intermediate Bond Fund (the “Fund”) is to seek an annual rate of total
return, before fund expenses, greater than the annual rate of total return of
the Bloomberg Intermediate U.S. Government/Credit Bond Index.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 47% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in the following types of
U.S. dollar‑denominated debt obligations:
• Obligations
of U.S. government and other public‑sector entities
• Asset‑backed
and mortgage‑backed obligations of U.S. and foreign issuers
• Corporate
debt of U.S. and foreign issuers
The
Fund only invests in investment-grade debt obligations, rated at the time of
purchase by at least one major rating agency or, if unrated, determined by
Robert W. Baird & Co. Incorporated (the “Advisor”) to be investment grade.
After purchase, a debt obligation may cease to be rated or may have its rating
reduced below the minimum rating required by the Fund for purchase. In such
cases, the Advisor will consider whether to continue to hold the debt
obligation. The Fund may hold debt obligations with a “D” or similar credit
rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg Intermediate U.S.
Government/Credit Bond Index. The duration of the Fund’s benchmark as of
March 31, 2023 was 3.85 years. The dollar‑weighted average portfolio
effective maturity of the Fund will normally be more than three years but less
than six years during normal market conditions. The Fund may invest in debt
obligations of all maturities. The Advisor attempts to diversify the Fund’s
portfolio by holding debt obligations of many different issuers and choosing
issuers in a variety of sectors.
In
determining which debt obligations to buy for the Fund, the Advisor attempts to
achieve returns that exceed the Fund’s benchmark primarily in three ways:
•Yield
curve positioning:
The Advisor selects debt obligations with maturities and yields that it believes
have the greatest potential for achieving the Fund’s objective, while attempting
to match the average duration of the debt obligations in the Fund with the
average duration of the debt obligations in the Fund’s benchmark.
•Sector
allocation: The
Advisor invests in debt obligations in those sectors which it believes represent
the greatest potential for achieving the Fund’s objective.
•Security
selection:
The Advisor determines which issuers it believes offer the best relative value
within each sector and then decides which available debt obligations of that
issuer to purchase.
The Fund may invest in foreign debt
obligations as well as money market instruments. The Advisor generally will sell
a debt obligation when, on a relative basis and in the Advisor’s opinion, it
will no longer help the Fund attain its objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Credit
Quality Risks
Debt
obligations receiving the lowest investment grade rating may have speculative
characteristics and, compared to higher grade debt obligations, may have a
weakened capacity to make principal and interest payments due to changes in
economic conditions or other adverse circumstances. Ratings are essentially
opinions of the credit quality of an issuer and may prove to be inaccurate.
Mortgage‑
and Asset‑Backed
Debt Obligations Risks
Mortgage‑
and asset‑backed debt obligations are subject to interest rate risk. Modest
movements in interest rates (both increases and decreases) may quickly and
significantly reduce the value of certain types of these debt obligations. When
interest rates fall, mortgage‑ and asset‑backed debt obligations may be subject
to prepayment risk, which is the risk that the borrower will prepay some or the
entire principal owed to the investor. When interest rates rise, certain types
of mortgage‑ and asset‑backed debt obligations are subject to extension risk,
discussed below. Mortgage‑ and asset‑backed debt obligations can also be subject
to the risk of default on the underlying residential or commercial mortgage(s)
or other assets.
Extension
Risk
Debt
obligations, including mortgage‑ and asset‑backed debt obligations, may be paid
off by the borrower more slowly than anticipated, increasing the average life of
such debt obligations and the sensitivity of the prices of such debt obligations
to future interest rate changes.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Government
Obligations Risks
No
assurance can be given that the U.S. government will provide financial support
to U.S. government-sponsored agencies or instrumentalities where it is not
specifically obligated to do so by law, such as the Federal National Mortgage
Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation
(“Freddie Mac”). To the extent a Fund holds securities of such an issuer and
that issuer defaults, the Fund might not be able to recover its investment from
the U.S. government.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest. The repayment of principal and interest on some of the
municipal obligations in which the Fund may invest may be guaranteed or insured
by a monoline insurance company. If a company insuring municipal obligations in
which the Fund invests experiences financial difficulties, the credit rating and
price of the security may deteriorate.
Foreign
Securities Risks
Foreign
investments, even those that are U.S. dollar‑denominated, may involve additional
risks, including political and economic instability, differences in financial
reporting standards, less regulated securities markets, and withholding of
foreign taxes.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one, five and ten years and since
inception period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
2nd quarter 2020 |
4.40 |
% |
Worst
quarter: |
1st quarter 2022 |
-4.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception
(9/29/00) |
Institutional
Class |
|
|
| |
Return Before
Taxes |
-8.64% |
0.82% |
1.39% |
3.95% |
Return After Taxes on
Distributions |
-9.43% |
-0.18% |
0.36% |
2.50% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-5.11% |
0.26% |
0.64% |
2.53% |
Investor
Class |
|
|
| |
Return Before
Taxes |
-8.88% |
0.57% |
1.15% |
3.69% |
Bloomberg
Intermediate U.S. Government/Credit Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-8.23% |
0.73% |
1.12% |
3.56% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Mary
Ellen Stanek, CFA |
2000 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Warren
D. Pierson, CFA |
2000 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Charles
B. Groeschell |
2000 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jay
E. Schwister, CFA |
2019 |
Senior
Portfolio Manager and Director of Research for Baird Advisors and Managing
Director of the Advisor |
M.
Sharon deGuzman |
2000 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Meghan
H. Dean, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jeffrey
L. Schrom, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Patrick
W. Brown, CFA |
2021 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Andrew
J. O’Connell, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
Abhishek
Pulakanti, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Aggregate Bond Fund (the “Fund”) is to seek an annual rate of total
return, before fund expenses, greater than the annual rate of total return of
the Bloomberg U.S. Aggregate Bond Index.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 43% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in the following types of
U.S. dollar‑denominated debt obligations:
•Obligations
of U.S. government and other public-sector entities
•Asset‑backed
and mortgage‑backed obligations of U.S. and foreign issuers
•Corporate
debt of U.S. and foreign issuers
The
Fund only invests in investment-grade debt obligations, rated at the time of
purchase by at least one major rating agency or, if unrated, determined by
Robert W. Baird & Co. Incorporated (the “Advisor”) to be investment grade.
After purchase, a debt obligation may cease to be rated or may have its rating
reduced below the minimum rating required by the Fund for purchase. In such
cases, the Advisor will consider whether to continue to hold the debt
obligation. The Fund may hold debt obligations with a “D” or similar credit
rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg U.S. Aggregate Bond Index. The
duration of the Fund’s benchmark as of March 31, 2023 was 6.33 years. The
dollar‑weighted average portfolio effective maturity of the Fund will normally
be more than five years but less than 10 years during normal market conditions.
The Fund may invest in debt obligations of all maturities. The Advisor attempts
to diversify the Fund’s portfolio by holding debt obligations of many different
issuers and choosing issuers in a variety of sectors.
In
determining which debt obligations to buy for the Fund, the Advisor attempts to
achieve returns that exceed the Fund’s benchmark primarily in three ways:
•Yield
curve positioning:
The Advisor selects debt obligations with maturities and yields that it believes
have the greatest potential for achieving the Fund’s objective, while attempting
to match the average duration of the debt obligations in the Fund with the
average duration of the debt obligations in the Fund’s benchmark.
•Sector
allocation: The
Advisor invests in debt obligations in those sectors which it believes represent
the greatest potential for achieving the Fund’s objective.
•Security
selection:
The Advisor determines which issuers it believes offer the best relative value
within each sector and then decides which available debt obligations of that
issuer to purchase.
The Fund may invest in foreign debt
obligations as well as money market instruments. The Advisor generally will sell
a debt obligation when, on a relative basis and in the Advisor’s opinion, it
will no longer help the Fund attain its objective.
Principal Risks
Please be aware you may lose money by investing in the
Fund. The following is a summary description of certain risks of
investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Credit
Quality Risks
Debt
obligations receiving the lowest investment grade rating may have speculative
characteristics and, compared to higher grade debt obligations, may have a
weakened capacity to make principal and interest payments due to changes in
economic conditions or other adverse circumstances. Ratings are essentially
opinions of the credit quality of an issuer and may prove to be inaccurate.
Mortgage‑
and Asset‑Backed
Debt Obligations Risks
Mortgage‑
and asset‑backed debt obligations are subject to interest rate risk. Modest
movements in interest rates (both increases and decreases) may quickly and
significantly reduce the value of certain types of these debt obligations. When
interest rates fall, mortgage‑ and asset‑backed debt obligations may be subject
to prepayment risk, which is the risk that the borrower will prepay some or the
entire principal owed to the investor. When interest rates rise, certain types
of mortgage‑ and asset‑backed debt obligations are subject to extension risk,
discussed below. Mortgage‑ and asset‑backed debt obligations can also be subject
to the risk of default on the underlying residential or commercial mortgage(s)
or other assets.
Extension
Risk
Debt
obligations, including mortgage‑ and asset‑backed debt obligations, may be paid
off by the borrower more slowly than anticipated, increasing the average life of
such debt obligations and the sensitivity of the prices of such debt obligations
to future interest rate changes.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Government
Obligations Risks
No
assurance can be given that the U.S. government will provide financial support
to U.S. government-sponsored agencies or instrumentalities where it is not
specifically obligated to do so by law, such as the Federal National Mortgage
Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation
(“Freddie Mac”). To the extent a Fund holds securities of such an issuer and
that issuer defaults, the Fund might not be able to recover its investment from
the U.S. government.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest. The repayment of principal and interest on some of the
municipal obligations in which the Fund may invest may be guaranteed or insured
by a monoline insurance company. If a company insuring municipal obligations in
which the Fund invests experiences financial difficulties, the credit rating and
price of the security may deteriorate.
Foreign
Securities Risks
Foreign
investments, even those that are U.S. dollar‑denominated, may involve additional
risks, including political and economic instability, differences in financial
reporting standards, less regulated securities markets, and withholding of
foreign taxes.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one, five and ten years and since
inception period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
2nd quarter 2020 |
4.79 |
% |
Worst
quarter: |
1st quarter 2022 |
-6.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception
(9/29/00) |
Institutional
Class |
|
|
| |
Return Before
Taxes |
-13.35% |
0.25% |
1.49% |
4.25% |
Return After Taxes on
Distributions |
-14.26% |
-0.84% |
0.34% |
2.62% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-7.89% |
-0.22% |
0.65% |
2.70% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception
(9/29/00) |
Investor
Class |
|
|
| |
Return Before
Taxes |
-13.52% |
0.01% |
1.24% |
4.00% |
Bloomberg
U.S. Aggregate Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-13.01% |
0.02% |
1.06% |
3.80% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Mary
Ellen Stanek, CFA |
2000 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Warren
D. Pierson, CFA |
2000 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Charles
B. Groeschell |
2000 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jay
E. Schwister, CFA |
2019 |
Senior
Portfolio Manager and Director of Research for Baird Advisors and Managing
Director of the Advisor |
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
M.
Sharon deGuzman |
2000 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Meghan
H. Dean, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jeffrey
L. Schrom, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Patrick
W. Brown, CFA |
2021 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Andrew
J. O’Connell, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
Abhishek
Pulakanti, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Core Plus Bond Fund (the “Fund”) is to seek an annual rate of total
return, before fund expenses, greater than the annual rate of total return of
the Bloomberg U.S. Universal Bond Index.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 29% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in the following types of
U.S. dollar‑denominated debt obligations:
•Obligations
of U.S. government and other public‑sector entities
•Asset‑backed
and mortgage‑backed obligations of U.S. and foreign issuers
•Corporate
debt of U.S. and foreign issuers
The
Fund invests primarily in investment-grade debt obligations, rated at the time
of purchase by at least one major rating agency, but may invest up to 20% of its
net assets in non‑investment grade debt obligations (sometimes referred to as
“high yield” or “junk” bonds). The Fund may also invest in unrated debt
obligations that are determined by Robert W. Baird & Co. Incorporated (the
“Advisor”) to be comparable in quality to the rated obligations. After purchase,
a debt obligation may cease to be rated or may have its rating reduced below the
minimum rating required by the Fund for purchase. In such cases, the Advisor
will consider whether to continue to hold the debt obligation. The Fund may hold
debt obligations with a “D” or similar credit rating indicating at least a
partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg U.S. Universal Bond Index. The
duration of the Fund’s benchmark as of March 31, 2023 was 6.10 years. The
dollar‑weighted average portfolio effective maturity of the Fund will normally
be more than five years but less than 10 years during normal market conditions.
The Fund may invest in debt obligations of all maturities. The Advisor attempts
to diversify the Fund’s portfolio by holding debt obligations of many different
issuers and choosing issuers in a variety of sectors.
In
determining which debt obligations to buy for the Fund, the Advisor attempts to
achieve returns that exceed the Fund’s benchmark primarily in three ways:
•Yield
curve positioning:
The Advisor selects debt obligations with maturities and yields that it believes
have the greatest potential for achieving the Fund’s objective, while attempting
to match the average duration of the debt obligations in the Fund with the
average duration of the debt obligations in the Fund’s benchmark.
•Sector
allocation: The
Advisor invests in debt obligations in those sectors which it believes represent
the greatest potential for achieving the Fund’s objective.
•Security
selection:
The Advisor determines which issuers it believes offer the best relative value
within each sector and then decides which available debt obligations of that
issuer to purchase.
The
Fund may invest in foreign debt obligations as well as money market instruments.
The Advisor generally will sell a debt
obligation when, on a relative basis and in the Advisor’s opinion, it will no
longer help the Fund attain its objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Credit
Quality Risks
Debt
obligations receiving the lowest investment grade rating or a high yield (“junk
bond”) rating may have speculative characteristics and, compared to higher grade
debt obligations, may have a weakened capacity to make principal and interest
payments due to changes in economic conditions or other adverse circumstances.
Ratings are essentially opinions of the credit quality of an issuer and may
prove to be inaccurate.
Non‑Investment
Grade Quality Risks
Non‑investment
grade debt obligations involve greater risk than investment‑grade debt
obligations, including the possibility of default or bankruptcy. They tend to be
more sensitive to economic conditions than higher‑rated debt obligations and, as
a result, are generally more sensitive to credit risk than debt obligations in
the higher‑rated categories.
Mortgage‑
and Asset‑Backed
Debt Obligations Risks
Mortgage‑
and asset‑backed debt obligations are subject to interest rate risk. Modest
movements in interest rates (both increases and decreases) may quickly and
significantly reduce the value of certain types of these debt obligations. When
interest rates fall, mortgage‑ and asset‑backed debt obligations may be subject
to prepayment risk, which is the risk that the borrower will prepay some or the
entire principal owed to the investor. When interest rates rise, certain types
of mortgage‑ and asset‑backed debt obligations are subject to extension risk,
discussed below. Mortgage‑ and asset‑backed debt obligations can also be subject
to the risk of default on the underlying residential or commercial mortgage(s)
or other assets.
Extension
Risk
Debt
obligations, including mortgage‑ and asset‑backed debt obligations, may be paid
off by the borrower more slowly than anticipated, increasing the average life of
such debt obligations and the sensitivity of the prices of such debt obligations
to future interest rate changes.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Government
Obligations Risks
No
assurance can be given that the U.S. government will provide financial support
to U.S. government-sponsored agencies or instrumentalities where it is not
specifically obligated to do so by law, such as the Federal National Mortgage
Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation
(“Freddie Mac”). To the extent a Fund holds securities of such an issuer and
that issuer defaults, the Fund might not be able to recover its investment from
the U.S. government.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest. The repayment of principal and
interest
on some of the municipal obligations in which the Fund may invest may be
guaranteed or insured by a monoline insurance company. If a company insuring
municipal obligations in which the Fund invests experiences financial
difficulties, the credit rating and price of the security may
deteriorate.
Foreign
Securities Risks
Foreign
investments, even those that are U.S. dollar‑denominated, may involve additional
risks, including political and economic instability, differences in financial
reporting standards, less regulated securities markets and withholding of
foreign taxes.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector,
may negatively impact asset prices and increase market volatility. The
possibility of a U.S. or global recession may also contribute to market
volatility. The coronavirus (COVID-19) pandemic caused significant economic
disruption in recent years as countries worked to limit the negative health
impacts of the virus. While the virus appears to be entering an endemic stage,
significant outbreaks or new variants present a continued risk to the global
economy. It is possible that these or other geopolitical events could have an
adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one, five and ten years and since
inception period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
2nd quarter 2020 |
5.75 |
% |
Worst
quarter: |
1st quarter 2022 |
-6.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception
(9/29/00) |
Institutional
Class |
|
|
| |
Return Before
Taxes |
-12.87% |
0.55% |
1.73% |
4.70% |
Return After Taxes on
Distributions |
-13.92% |
-0.67% |
0.46% |
2.95% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-7.60% |
-0.03% |
0.79% |
2.99% |
Investor
Class |
|
|
| |
Return Before
Taxes |
-13.09% |
0.29% |
1.47% |
4.44% |
Bloomberg
U.S. Universal Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-12.99% |
0.18% |
1.33% |
4.05% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Mary
Ellen Stanek, CFA |
2000 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
Warren
D. Pierson, CFA |
2000 |
Co-Chief
Investment Officer for Baird Advisors and Managing Director of the
Advisor |
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Charles
B. Groeschell |
2000 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jay
E. Schwister, CFA |
2019 |
Senior
Portfolio Manager and Director of Research for Baird Advisors and Managing
Director of the Advisor |
M.
Sharon deGuzman |
2000 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Meghan
H. Dean, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Jeffrey
L. Schrom, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Patrick
W. Brown, CFA |
2021 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Andrew
J. O’Connell, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
Abhishek
Pulakanti, CFA |
2022 |
Senior
Investment Analyst for Baird Advisors and Managing Director of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Short‑Term Municipal Bond Fund (the “Fund”) is to seek current income
that is exempt from federal income tax and is consistent with the preservation
of capital.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1) Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 64% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in municipal bonds and
debentures, the income from which is exempt from federal income tax (including
the federal alternative minimum tax (“AMT”)). These municipal obligations may
include debt obligations of states, territories and possessions of the U.S., as
well as political subdivisions, agencies and financing authorities thereof that
provide income exempt from federal income tax (including the federal AMT).
The
Fund invests in a broadly diversified portfolio of federally tax‑exempt
municipal obligations issued by governmental authorities throughout the U.S. and
its territories. The Fund may invest in all types of municipal obligations,
including pre‑refunded bonds, general obligation bonds, revenue bonds and
municipal lease participations. The Fund may also invest in zero coupon bonds
which are issued at substantial discounts from their value at maturity and pay
no cash income to their holders until they mature. Municipal obligations in
which the Fund invests may include fixed, variable or floating rate instruments.
The Fund may purchase municipal obligations on a when‑issued or delayed delivery
basis or enter into forward commitments to purchase municipal obligations.
The
Fund invests principally in investment grade municipal obligations, rated at the
time of purchase by at least one major rating agency, but may invest up to 10%
of its net assets in non‑investment grade municipal obligations (sometimes
referred to as “high yield” or “junk” bonds). The Fund may also invest in
unrated municipal obligations that are determined by Robert W. Baird & Co.
Incorporated (the “Advisor”) to be comparable in quality to the rated
obligations. After purchase, a municipal obligation may cease to be rated or may
have its rating reduced below the minimum rating required by the Fund for
purchase. In such cases, the Advisor will consider whether to continue to hold
the municipal obligation. The Fund may hold municipal obligations with a “D” or
similar credit rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg Short 1-5 Year Municipal Bond
Index. The duration of the Fund’s benchmark as of March 31, 2023 was 2.35
years. While obligations of any maturity may be purchased, under normal
circumstances, the Fund’s dollar‑weighted average effective maturity is
generally expected to be three years or less. Effective maturity takes into
account the possibility that a bond may have prepayments or may be called by the
issuer before its stated maturity date. The Advisor considers
many
market factors when selecting investments for the Fund. Among the factors
considered are the nominal level and trend in interest rates, the slope of the
municipal yield curve, income tax rates, market sector valuations, credit
trends, supply and demand flows, regional economic strength, as well as legal
and regulatory trends.
The
Advisor generally will sell a debt obligation when on a relative basis and in
the Advisor’s opinion, it will no longer help the Fund attain its
objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”). The Fund
invests primarily in short-term bonds, whose prices are less sensitive to
interest rate changes than are the prices of long-term bonds. Generally, a bond
with a longer maturity will entail greater interest rate risk but have a higher
yield. Conversely, a bond with a shorter maturity will entail less interest rate
risk but have a lower yield (“maturity risk”). A bond’s value may also be
affected by changes in its credit quality rating or the issuer’s financial
condition (“credit quality risk”). Bonds are also generally subject to credit
risk that an issuer will not make timely payments of principal and interest.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Credit
Quality Risks
Individual
issues of municipal obligations may be subject to the credit risk of the
municipality, borrower or issuer (“obligor”). Therefore, the obligor may
experience unanticipated financial problems and may be unable to meet its
payment obligations. Municipal obligations held by the Fund may be adversely
affected by political and economic conditions and developments (for example,
legislation reducing state aid to local governments). Debt obligations receiving
the lowest investment grade rating may have speculative characteristics and,
compared to higher grade debt obligations, may have a weakened capacity to make
principal and interest payments due to changes in economic conditions or other
adverse circumstances. Ratings are essentially opinions of the credit quality of
an issuer and may prove to be inaccurate.
Non‑Investment
Grade Quality Risks
Non‑investment
grade debt obligations (sometimes referred to as “high yield” or “junk” bonds)
involve greater risk than investment‑grade debt obligations, including the
possibility of default or bankruptcy. They tend to be more sensitive to economic
conditions than higher‑rated debt obligations and, as a result, are generally
more sensitive to credit risk than debt obligations in the higher‑rated
categories.
Extension
Risk
Debt
obligations may be paid off by the borrower more slowly than anticipated,
increasing the average life of such debt obligations and the sensitivity of the
prices of such debt obligations to future interest rate changes.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax‑exempt interest.
Because
the Fund may invest more than 25% of its total assets in municipal obligations
issued by entities located in the same state or the interest on which is paid
solely from revenues of similar projects, changes in economic, business or
political conditions relating to a particular state or type of projects may have
a disproportionate impact on the Fund.
The
repayment of principal and interest on some of the municipal obligations in
which the Fund may invest may be guaranteed or insured by a monoline insurance
company. If a company insuring municipal obligations in which the Fund invests
experiences financial difficulties, the credit rating and price of the security
may deteriorate.
Municipal
Housing Bonds Risks
Municipal
housing bonds are bonds issued by state and municipal authorities established to
purchase single family and other residential mortgages from commercial banks and
other lending institutions. Certain factors and adverse economic developments
may affect the mortgagor’s ability to maintain payments under the underlying
mortgages. Mortgages may also be partially or completely prepaid prior to their
final stated maturities.
Municipal
Lease Obligations Risks
Participation
interests in municipal leases pose special risks because many leases and
contracts contain “non‑appropriation” clauses that provide that the governmental
issuer has no obligation to make future payments under the lease or contract
unless money is appropriated for this purpose by the appropriate legislative
body.
Zero
Coupon Bonds Risks
Zero
coupon bonds do not pay interest on a current basis and may be highly volatile
as interest rates rise or fall. In addition, while such bonds generate income
for tax purposes and for purposes of generally accepted accounting standards,
they do not generate cash flow and thus could cause the Fund to be forced to
liquidate securities at an inopportune time in order to distribute cash, as
required by tax laws.
When‑Issued,
Delayed Delivery and Forward Commitments Risks
When‑issued,
delayed delivery and forward commitment transactions involve the risk that the
price or yield obtained in a transaction (and therefore the value of a debt
obligation) may be less favorable than the price or yield (and therefore the
value of a debt obligation) available in the market when the debt obligations
delivery takes place. Failure of the other party to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
Tax
Risks
Municipal
obligations may decrease in value during times when federal income tax rates are
falling. The Fund’s investments are affected by changes in federal income tax
rates applicable to, or the continuing federal tax‑exempt status of, interest
income on municipal obligations. Any proposed or actual changes in such rates or
exempt status, therefore, can significantly affect the liquidity, marketability
and supply and demand for municipal obligations, which would in turn affect the
Fund’s ability to acquire and dispose of municipal obligations at desirable
yield and price levels.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one and five years and since inception
period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
4th quarter 2022 |
2.23 |
% |
Worst
quarter: |
1st quarter 2022 |
-3.31 |
% |
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
Since
Inception (8/31/15) |
Institutional
Class |
|
| |
Return Before
Taxes |
-3.66% |
1.17% |
1.41% |
Return After Taxes on
Distributions |
-3.67% |
1.17% |
1.39% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-1.55% |
1.28% |
1.44% |
Investor
Class |
|
| |
Return Before
Taxes |
-4.01% |
0.92% |
1.13% |
Bloomberg
Short 1-5 Year Municipal Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-3.17% |
1.06% |
1.01% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio
Manager
of
the
Fund
Since |
Title |
Duane
A. McAllister, CFA |
2015 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Lyle
J. Fitterer, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Erik
R. Schleicher, CFA |
2015 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Joseph
J. Czechowicz, CFA |
2015 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Gabe
G. Diederich, CFA |
2022 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Strategic Municipal Bond Fund (the “Fund”) is to seek a high level of
current income that is exempt from federal income tax and is consistent with the
preservation of capital.
Fees and Expenses of the
Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 89% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund normally invests at least 80% of its net assets in municipal bonds and
debentures, the income from which is exempt from federal income tax (including
the federal alternative minimum tax (“AMT”)). These municipal obligations may
include debt obligations of states, territories and possessions of the U.S., as
well as political subdivisions, agencies and financing authorities thereof that
provide income exempt from federal income tax (including the federal AMT).
The
Fund invests in a broadly diversified portfolio of municipal obligations issued
by governmental authorities throughout the U.S. and its territories. The Fund
may invest in all types of municipal obligations, including pre-refunded bonds,
general obligation bonds, revenue bonds and municipal lease participations. The
Fund may also invest in zero coupon bonds, which are issued at substantial
discounts from their value at maturity and pay no cash income to their holders
until they mature. Municipal obligations in which the Fund invests may include
fixed, variable or floating rate instruments. The Fund may purchase municipal
obligations on a when-issued or delayed delivery basis or enter into forward
commitments to purchase municipal obligations.
The
Fund invests principally in investment grade municipal obligations, rated at the
time of purchase by at least one major rating agency, but may invest up to 30%
of its net assets in non-investment grade municipal obligations (sometimes
referred to as “high yield” or “junk” bonds). The Fund may also invest in
unrated municipal obligations that are determined by Robert W. Baird & Co.
Incorporated (the “Advisor”) to be comparable in quality to the rated
obligations. After purchase, a municipal obligation may cease to be rated or may
have its rating reduced below the minimum rating required by the Fund for
purchase. In such cases, the Advisor will consider whether to continue to hold
the municipal obligation. The Fund may hold municipal obligations with a “D” or
similar credit rating indicating at least a partial payment default. The Fund
may also invest in U.S. Treasury futures contracts for duration and yield curve
management or to manage market and interest rate risk.
The
Fund may invest up to 20% of its net assets in U.S. government and corporate
bonds and other debt securities that are of the same quality as its investments
in
municipal
bonds but which produce income that is taxable for federal income tax
purposes.
The
Advisor attempts to keep the duration of the Fund’s portfolio within ±2 years of
its benchmark, the Bloomberg 1-10 Year Municipal Bond Index. The duration of the
Fund’s benchmark as of March 31, 2023 was 3.76 years. While obligations of
any maturity may be purchased, under normal circumstances, the Fund’s
dollar-weighted average effective maturity is generally expected to be between
three months and 10 years. Effective maturity takes into account the possibility
that a bond may have prepayments or may be called by the issuer before its
stated maturity date.
The
Advisor considers many market factors when selecting investments for the Fund.
Among the factors considered are the nominal level and trend in interest rates,
the slope of the municipal yield curve, income tax rates, market sector
valuations, credit trends, supply and demand flows, regional economic strength,
as well as legal and regulatory trends.
The
Advisor generally will sell a debt obligation when on a relative basis and in
the Advisor’s opinion, it will no longer help the Fund attain its
objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to
you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Credit
Quality Risks
Individual
issues of municipal obligations may be subject to the credit risk of the
municipality, borrower or issuer (“obligor”). Therefore, the obligor may
experience unanticipated financial problems and may be unable to meet its
payment obligations. Municipal obligations held by the Fund may be adversely
affected by political and economic conditions and developments (for example,
legislation reducing state aid to local governments). Debt obligations receiving
the lowest investment grade rating may have speculative characteristics and,
compared to higher grade debt obligations, may have a weakened capacity to make
principal and interest payments due to changes in economic conditions or other
adverse circumstances. Ratings are essentially opinions of the credit quality of
an issuer and may prove to be inaccurate.
Extension
Risk
Debt
obligations may be paid off by the borrower more slowly than anticipated,
increasing the average life of such debt obligations and the sensitivity of the
prices of such debt obligations to future interest rate changes.
Non-Investment
Grade Quality Risks
Non-investment
grade debt obligations (sometimes referred to as “high yield” or “junk” bonds)
involve greater risk than investment-grade debt obligations, including the
possibility of default or bankruptcy. They tend to be more sensitive to economic
conditions than higher-rated debt obligations and, as a result, are generally
more sensitive to credit risk than debt obligations in the higher-rated
categories.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest.
Because
the Fund may invest more than 25% of its total assets in municipal obligations
issued by entities located in the same state or the interest on which is paid
solely from revenues of similar projects, changes in economic, business or
political conditions relating to a particular state or type of projects may have
a disproportionate impact on the Fund.
The
repayment of principal and interest on some of the municipal obligations in
which the Fund may invest may be guaranteed or insured by a monoline insurance
company. If a company insuring municipal obligations in which the Fund invests
experiences financial difficulties, the credit rating and price of the security
may deteriorate.
Municipal
Housing Bonds Risks
Municipal
housing bonds are bonds issued by state and municipal authorities established to
purchase single family and other residential mortgages from commercial banks and
other lending institutions. Certain factors and adverse economic developments
may affect the mortgagor’s ability to maintain payments under the underlying
mortgages. Mortgages may also be partially or completely prepaid prior to their
final stated maturities.
Municipal
Lease Obligations Risks
Participation
interests in municipal leases pose special risks because many leases and
contracts contain “non-appropriation” clauses that provide that the governmental
issuer has no obligation to make future payments under the lease or contract
unless money is appropriated for this purpose by the appropriate legislative
body.
Zero
Coupon Bonds Risks
Zero
coupon bonds do not pay interest on a current basis and may be highly volatile
as interest rates rise or fall. In addition, while such bonds generate income
for tax purposes and for purposes of generally accepted accounting standards,
they do not generate cash flow and thus could cause the Fund to be forced to
liquidate securities at an inopportune time in order to distribute cash, as
required by tax laws.
When-Issued,
Delayed Delivery and Forward Commitments Risks
When-issued,
delayed delivery and forward commitment transactions involve the risk that the
price or yield obtained in a transaction (and therefore the value of a debt
obligation) may be less favorable than the price or yield (and therefore the
value of a debt obligation) available in the market when the debt obligations
delivery takes place. Failure of the other party to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
U.S.
Treasury Futures Contracts Risk
A
Fund that uses futures contracts, which are a type of derivative, is subject to
the risk of loss caused by unanticipated market movements. In addition, there
may at times be an imperfect correlation between the movement in the prices of
futures contracts and the value of their underlying instruments or indexes and
there may at times not be a liquid secondary market for certain futures
contracts.
Tax
Risks
Municipal
obligations may decrease in value during times when federal income tax rates are
falling. The Fund’s investments are affected by changes in federal income tax
rates applicable to, or the continuing federal tax-exempt status of, interest
income on municipal obligations. Any proposed or actual changes in such rates or
exempt status, therefore, can significantly affect the liquidity, marketability
and supply and demand for municipal obligations, which would in turn affect the
Fund’s ability to acquire and dispose of municipal obligations at desirable
yield and price levels.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the
Fund.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the
virus. While the virus appears to be
entering an endemic stage, significant outbreaks or new variants present a
continued risk to the global economy. It is possible that these or other
geopolitical events could have an adverse effect on the Fund’s
performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for one year and since inception period compare with
those of a broad measure of market performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
4th quarter 2022 |
3.79 |
% |
Worst
quarter: |
1st quarter 2022 |
-3.98 |
% |
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
Since
Inception
(11/15/19) |
Institutional
Class |
| |
Return Before
Taxes |
-5.31% |
1.84% |
Return After Taxes on
Distributions |
-5.39% |
1.63% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-2.42% |
1.68% |
|
| |
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
Since
Inception
(11/15/19) |
Investor
Class |
| |
Return Before
Taxes |
-5.55% |
1.59% |
Bloomberg
1-10 Year Municipal Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-4.84% |
0.12% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio
Manager
of
the
Fund
Since |
Title |
Lyle
J. Fitterer, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Duane
A. McAllister, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Erik
R. Schleicher, CFA |
2019 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Joseph
J. Czechowicz, CFA |
2019 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Gabe
G. Diederich, CFA |
2022 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The primary investment
objective of the Baird Quality Intermediate Municipal Bond Fund (the “Fund”) is
to seek current income that is substantially exempt from federal income
tax. A secondary objective is to
seek total return with relatively low volatility of principal.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 33% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in municipal bonds and
debentures, the interest from which is exempt from federal income tax (including
the federal alternative minimum tax (“AMT”)). These municipal obligations may
include debt obligations of states, territories and possessions of the U.S., as
well as political subdivisions, agencies and financing authorities thereof that
provide income exempt from federal income tax (including the federal
AMT).
The
Fund invests in a broadly diversified portfolio of municipal obligations issued
by governmental authorities throughout the U.S. and its territories. The Fund
may invest in all types of municipal obligations, including pre-refunded bonds,
general obligation bonds, revenue bonds, municipal lease participations and
tax-exempt commercial paper. The Fund may also invest in zero coupon bonds,
which are issued at substantial discounts from their value at maturity and pay
no cash income to their holders until they mature. Municipal obligations in
which the Fund invests may include fixed, variable or floating rate instruments.
The Fund may purchase municipal obligations on a when-issued or delayed delivery
basis or enter into forward commitments to purchase municipal
obligations.
The
Fund invests in investment grade municipal obligations, rated at the time of
purchase by at least one major rating agency. The Fund may also invest in
unrated municipal obligations that are determined by Robert W. Baird & Co.
Incorporated (the “Advisor”) to be comparable in quality to the rated
obligations. After purchase, a debt obligation may cease to be rated or may have
its rating reduced below the minimum rating required by the Fund for purchase.
In such cases, the Advisor will consider whether to continue to hold the debt
obligation. The Fund may hold debt obligations with a “D” or similar credit
rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg Quality Intermediate Municipal
Bond Index. The duration of the Fund’s benchmark as of March 31, 2023 was
4.07 years. The dollar‑weighted average portfolio effective maturity of the Fund
will normally be more than three years but less than eight years during normal
market conditions. Effective maturity takes into account the possibility that a
bond may have prepayments or may be called by the issuer before its stated
maturity date. The Fund may invest in debt obligations of all maturities.
The Advisor considers many
market factors when selecting investments for the Fund. Among the factors
considered are the nominal level and trend in interest rates, the slope of the
municipal yield curve, income tax rates, market sector valuations, credit
trends, supply and demand flows, regional economic strength, as well as legal
and regulatory trends.
The Advisor generally will sell a debt
obligation when, on a relative basis and in the Advisor’s opinion, it will no
longer help the Fund attain its objectives.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Credit
Quality Risks
Individual
issues of municipal obligations may be subject to the credit risk of the
municipality, borrower or issuer (“obligor”). Therefore, the obligor may
experience unanticipated financial problems and may be unable to meet its
payment obligations. Municipal obligations held by the Fund may be adversely
affected by political and economic conditions and developments (for example,
legislation reducing state aid to local governments). Debt obligations receiving
the lowest investment grade rating may have speculative characteristics and,
compared to higher grade debt obligations, may have a weakened capacity to make
principal and interest payments due to changes in economic conditions or other
adverse circumstances. Ratings are essentially opinions of the credit quality of
an issuer and may prove to be inaccurate.
Extension
Risk
Debt
obligations may be paid off by the borrower more slowly than anticipated,
increasing the average life of such debt obligations and the sensitivity of the
prices of such debt obligations to future interest rate changes.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax‑exempt interest.
Because
the Fund may invest more than 25% of its total assets in municipal obligations
issued by entities located in the same state or the interest on which is paid
solely from revenues of similar projects, changes in economic, business or
political conditions relating to a particular state or type of projects may have
a disproportionate impact on the Fund.
The
repayment of principal and interest on some of the municipal obligations in
which the Fund may invest may be guaranteed or insured by a monoline insurance
company. If a company insuring municipal obligations in which the Fund invests
experiences financial difficulties, the credit rating and price of the security
may deteriorate.
Municipal
Housing Bonds Risks
Municipal
housing bonds are bonds issued by state and municipal authorities established to
purchase single family and other residential mortgages from commercial banks and
other lending institutions. Certain factors and adverse economic developments
may affect the mortgagor’s ability to maintain payments under the underlying
mortgages. Mortgages may also be partially or completely prepaid prior to their
final stated maturities.
Municipal
Lease Obligations Risks
Participation
interests in municipal leases pose special risks because many leases and
contracts contain “non‑appropriation” clauses that provide that the governmental
issuer has no obligation to make future payments under the lease or contract
unless money is appropriated for this purpose by the appropriate legislative
body.
Zero
Coupon Bonds Risks
Zero
coupon bonds do not pay interest on a current basis and may be highly volatile
as interest rates rise or fall. In addition, while such bonds generate income
for tax purposes and for purposes of generally accepted accounting standards,
they do not generate cash flow and thus could cause the Fund to be forced to
liquidate securities at an inopportune time in order to distribute cash, as
required by tax laws.
When‑Issued,
Delayed Delivery and Forward Commitments Risks
When‑issued,
delayed delivery and forward commitment transactions involve the risk that the
price or yield obtained in a transaction (and therefore the value of a debt
obligation) may be less favorable than the price or yield (and therefore the
value of a debt obligation) available in the market when the debt obligations
delivery takes place. Failure of the other party to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
Tax
Risks
Municipal
obligations may decrease in value during times when federal income tax rates are
falling. The Fund’s investments are affected by changes in federal income tax
rates applicable to, or the continuing federal tax‑exempt status of, interest
income on municipal obligations. Any proposed or actual changes in such rates or
exempt status, therefore, can significantly affect the liquidity, marketability
and supply and demand for municipal obligations, which would in turn affect the
Fund’s ability to acquire and dispose of municipal obligations at desirable
yield and price levels.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws,
regulatory
fines, penalties, reputational damage, reimbursement or other compensation
costs, or additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one, five and ten years and since
inception period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
4th quarter 2022 |
3.05 |
% |
Worst
quarter: |
1st quarter 2022 |
-4.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
10
Years |
Since
Inception
(3/30/01) |
Institutional
Class |
|
|
| |
Return Before
Taxes |
-5.74% |
1.08% |
1.35% |
3.34% |
Return After Taxes on
Distributions |
-5.74% |
1.08% |
1.35% |
3.33% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-2.63% |
1.33% |
1.56% |
3.29% |
Investor
Class |
|
|
| |
Return Before
Taxes |
-5.99% |
0.82% |
1.10% |
3.08% |
Bloomberg
Quality Intermediate Municipal Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-5.15% |
1.36% |
1.77% |
3.43% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Duane
A. McAllister, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Lyle
J. Fitterer, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Erik
R. Schleicher, CFA |
2019 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Joseph
J. Czechowicz, CFA |
2019 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Gabe
G. Diederich, CFA |
2022 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The
investment objective of the Baird Core Intermediate Municipal Bond Fund (the
“Fund”) is to seek a high level of current income that is
exempt from federal income tax and is
consistent with preservation of capital.
Fees and Expenses of the Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 59% of the average value of its
portfolio.
Principal Investment Strategies
The
Fund normally invests at least 80% of its net assets in municipal bonds and
debentures, the income from which is exempt from federal income tax (including
the federal alternative minimum tax (“AMT”)). These municipal obligations may
include debt obligations of states, territories and possessions of the U.S., as
well as political subdivisions, agencies and financing authorities thereof that
provide income exempt from federal income tax (including the federal AMT).
The
Fund invests in a broadly diversified portfolio of federally tax‑exempt
municipal obligations issued by governmental authorities throughout the U.S. and
its territories. The Fund may invest in all types of municipal obligations,
including pre‑refunded bonds, general obligation bonds, revenue bonds and
municipal lease participations. The Fund may also invest in zero coupon bonds
which are issued at substantial discounts from their value at maturity and pay
no cash income to their holders until they mature. Municipal obligations in
which the Fund invests may include fixed, variable or floating rate instruments.
The Fund may purchase municipal obligations on a when‑issued or delayed delivery
basis or enter into forward commitments to purchase municipal obligations.
The
Fund invests principally in investment grade municipal obligations, rated at the
time of purchase by at least one major rating agency, but may invest up to 10%
of its net assets in non‑investment grade municipal obligations (sometimes
referred to as “high yield” or “junk” bonds). The Fund may also invest in
unrated municipal obligations that are determined by Robert W. Baird & Co.
Incorporated (the “Advisor”) to be comparable in quality to the rated
obligations. After purchase, a municipal obligation may cease to be rated or may
have its rating reduced below the minimum rating required by the Fund for
purchase. In such cases, the Advisor will consider whether to continue to hold
the municipal obligation. The Fund may hold municipal obligations with a “D” or
similar credit rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg 1-15 Year Municipal Bond Index.
The duration of the Fund’s benchmark as of March 31, 2023 was 4.52 years.
While obligations of any maturity may be purchased, under normal circumstances,
the Fund’s dollar‑weighted average effective maturity is generally expected to
be between three and ten years. Effective maturity takes into account the
possibility that a bond may have prepayments or may be called by the issuer
before its stated maturity date.
The
Advisor considers many market factors when selecting investments for the Fund.
Among the factors considered are the nominal level and trend in interest rates,
the slope of the municipal yield curve, income tax rates, market sector
valuations, credit trends, supply and demand flows, regional economic strength,
as well as legal and regulatory trends.
The
Advisor generally will sell a debt obligation when on a relative basis and in
the Advisor’s opinion, it will no longer help the Fund attain its
objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Credit
Quality Risks
Individual
issues of municipal obligations may be subject to the credit risk of the
municipality, borrower or issuer (“obligor”). Therefore, the obligor may
experience unanticipated financial problems and may be unable to meet its
payment obligations. Municipal obligations held by the Fund may be adversely
affected by political and economic conditions and developments (for example,
legislation reducing state aid to local governments). Debt obligations receiving
the lowest investment grade rating may have speculative characteristics and,
compared to higher grade debt obligations, may have a weakened capacity to make
principal and interest payments due to changes in economic conditions or other
adverse circumstances. Ratings are essentially opinions of the credit quality of
an issuer and may prove to be inaccurate.
Extension
Risk
Debt
obligations may be paid off by the borrower more slowly than anticipated,
increasing the average life of such debt obligations and the sensitivity of the
prices of such debt obligations to future interest rate changes.
Non‑Investment
Grade Quality Risks
Non‑investment
grade debt obligations (sometimes referred to as “high yield” or “junk” bonds)
involve greater risk than investment‑grade debt obligations, including the
possibility of default or bankruptcy. They tend to be more sensitive to economic
conditions than higher‑rated debt obligations and, as a result, are generally
more sensitive to credit risk than debt obligations in the higher‑rated
categories.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax‑exempt interest.
Because
the Fund may invest more than 25% of its total assets in municipal obligations
issued by entities located in the same state or the interest on which is paid
solely from revenues of similar projects, changes in economic, business or
political conditions relating to a particular state or type of projects may have
a disproportionate impact on the Fund.
The
repayment of principal and interest on some of the municipal obligations in
which the Fund may invest may be guaranteed or insured by a monoline insurance
company. If a company insuring municipal obligations in which the Fund invests
experiences financial difficulties, the credit rating and price of the security
may deteriorate.
Municipal
Housing Bonds Risks
Municipal
housing bonds are bonds issued by state and municipal authorities established to
purchase single family and other residential mortgages from commercial banks and
other lending institutions. Certain factors and adverse economic developments
may affect the mortgagor’s ability to maintain payments under the underlying
mortgages. Mortgages may also be partially or completely prepaid prior to their
final stated maturities.
Municipal
Lease Obligations Risks
Participation
interests in municipal leases pose special risks because many leases and
contracts contain “non‑appropriation” clauses that provide that the governmental
issuer has no obligation to make future payments under the lease or contract
unless money is appropriated for this purpose by the appropriate legislative
body.
Zero
Coupon Bonds Risks
Zero
coupon bonds do not pay interest on a current basis and may be highly volatile
as interest rates rise or fall. In addition, while such bonds generate income
for tax purposes and for purposes of generally accepted accounting standards,
they do not generate cash flow and thus could cause the Fund to be forced to
liquidate securities at an inopportune time in order to distribute cash, as
required by tax laws.
When‑Issued,
Delayed Delivery and Forward Commitments Risks
When‑issued,
delayed delivery and forward commitment transactions involve the risk that the
price or yield obtained in a transaction (and therefore the value of a debt
obligation) may be less favorable than the price or yield (and therefore the
value of a debt obligation) available in the market when the debt obligations
delivery takes place. Failure of the other party to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
Tax
Risks
Municipal
obligations may decrease in value during times when federal income tax rates are
falling. The Fund’s investments are affected by changes in federal income tax
rates applicable to, or the continuing federal tax‑exempt status of, interest
income on municipal obligations. Any proposed or actual changes in such rates or
exempt status, therefore, can significantly affect the liquidity, marketability
and supply and demand for municipal obligations, which would in turn affect the
Fund’s ability to acquire and dispose of municipal obligations at desirable
yield and price levels.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Fund.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the prices at which the Fund’s debt obligations are actually
bought and sold. The prices of the Fund’s debt obligations may be subject to
frequent and significant change and will vary depending on the information that
is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual returns for one and five years and since inception
period compare with those of a broad measure of market
performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the
Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
4th quarter 2022 |
3.53 |
% |
Worst
quarter: |
1st quarter 2022 |
-4.53 |
% |
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
5
Years |
Since
Inception (8/31/15) |
Institutional
Class |
|
| |
Return Before
Taxes |
-6.07% |
1.67% |
2.27% |
Return After Taxes on
Distributions |
-6.08% |
1.63% |
2.20% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-2.87% |
1.75% |
2.18% |
Investor
Class |
|
| |
Return Before
Taxes |
-6.40% |
1.40% |
2.01% |
Bloomberg
1-15 Year Municipal Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-5.95% |
1.44% |
1.82% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio Manager
of the Fund Since |
Title |
Duane
A. McAllister, CFA |
2015 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Lyle
J. Fitterer, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Erik
R. Schleicher, CFA |
2015 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Joseph
J. Czechowicz, CFA |
2015 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Gabe
G. Diederich, CFA |
2022 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Investment Objective
The investment objective of
the Baird Municipal Bond Fund (the “Fund”) is to seek a high level of current
income that is exempt from federal income tax and is consistent with the
preservation of capital.
Fees and Expenses of the
Fund
The table below describes the
fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your
investment)
None
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
| |
|
Investor
Class
Shares |
Institutional
Class
Shares |
Management
Fees |
0.25% |
0.25% |
Distribution
and Service (12b‑1)
Fees |
0.25% |
None |
Other
Expenses |
0.05% |
0.05% |
Total
Annual Fund Operating Expenses |
0.55% |
0.30% |
Example
This Example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class Shares |
$56 |
$176 |
$307 |
$689 |
Institutional
Class Shares |
$31 |
$97 |
$169 |
$381 |
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in total annual fund operating
expenses or in the example, affect the Fund’s performance. During the most
recent fiscal year, the Fund’s portfolio turnover rate was 76% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund normally invests at least 80% of its net assets in municipal bonds and
debentures, the income from which is exempt from federal income tax (including
the federal alternative minimum tax (“AMT”)). These municipal obligations may
include debt obligations of states, territories, and possessions of the U.S., as
well as political subdivisions, agencies and financing authorities thereof that
provide income exempt from federal income tax (including the federal AMT).
The
Fund invests in a broadly diversified portfolio of federally tax-exempt
municipal obligations issued by governmental authorities throughout the U.S. and
its territories. The Fund may invest in all types of municipal obligations,
including pre-refunded bonds, general obligation bonds, revenue bonds and
municipal lease participations. The Fund may also invest in zero coupon bonds,
which are issued at substantial discounts from their value at maturity and pay
no cash income to their holders until they mature. Municipal obligations in
which the Fund invests may include fixed, variable or floating rate instruments.
The Fund may purchase municipal obligations on a when-issued or delayed delivery
basis or enter into forward commitments to purchase municipal obligations.
The
Fund invests principally in investment grade municipal obligations, rated at the
time of purchase by at least one major rating agency, but may invest up to 15%
of its net assets in non-investment grade municipal obligations (sometimes
referred to as “high yield” or “junk” bonds). The Fund may also invest in
unrated municipal obligations that are determined by Robert W. Baird & Co.
Incorporated (the “Advisor”) to be comparable in quality to the rated
obligations. After purchase, a municipal obligation may cease to be rated or may
have its rating reduced below the minimum rating required by the Fund for
purchase. In such cases, the Advisor will consider whether to continue to hold
the municipal obligation. The Fund may hold municipal obligations with a “D” or
similar credit rating indicating at least a partial payment default.
The
Advisor attempts to keep the duration of the Fund’s portfolio substantially
equal to that of its benchmark, the Bloomberg Municipal Bond Index. The duration
of the Fund’s benchmark as of March 31, 2023 was 6.10 years. While
obligations of any maturity may be purchased, under normal circumstances, the
Fund’s dollar-weighted
average
effective maturity is generally expected to be between five years and twelve
years. Effective maturity takes into account the possibility that a bond may
have prepayments or may be called by the issuer before its stated maturity
date.
The
Advisor considers many market factors when selecting investments for the Fund.
Among the factors considered are the nominal level and trend in interest rates,
the slope of the municipal yield curve, income tax rates, market sector
valuations, credit trends, supply and demand flows, regional economic strength,
as well as legal and regulatory trends.
The
Advisor generally will sell a debt obligation when on a relative basis and in
the Advisor’s opinion, it will no longer help the Fund attain its
objective.
Principal Risks
Please be aware that you may lose money by investing in
the Fund. The following is a summary description of certain
risks of investing in the Fund.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to the Fund and a loss to
you.
Bond
Market Risks
A
bond’s market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, a bond with a longer maturity will entail greater interest rate risk
but have a higher yield. Conversely, a bond with a shorter maturity will entail
less interest rate risk but have a lower yield (“maturity risk”). A bond’s value
may also be affected by changes in its credit quality rating or the issuer’s
financial condition (“credit quality risk”). Bonds are also generally subject to
credit risk that an issuer will not make timely payments of principal and
interest.
Call
Risks
If
the securities in which the Fund invests are redeemed by the issuer before
maturity (or “called”), the Fund may have to reinvest the proceeds in securities
that pay a lower interest rate, which may decrease the Fund’s yield. This will
most likely happen when interest rates are declining.
Credit
Quality Risks
Individual
issues of municipal obligations may be subject to the credit risk of the
municipality, borrower or issuer (“obligor”). Therefore, the obligor may
experience unanticipated financial problems and may be unable to meet its
payment obligations. Municipal obligations held by the Fund may be adversely
affected by political and economic conditions and developments (for example,
legislation reducing state aid to local governments). Debt obligations receiving
the lowest investment grade rating may
have
speculative characteristics and, compared to higher grade debt obligations, may
have a weakened capacity to make principal and interest payments due to changes
in economic conditions or other adverse circumstances. Ratings are essentially
opinions of the credit quality of an issuer and may prove to be
inaccurate.
Extension
Risk
Debt
obligations may be paid off by the borrower more slowly than anticipated,
increasing the average life of such debt obligations and the sensitivity of the
prices of such debt obligations to future interest rate changes.
Non-Investment
Grade Quality Risks
Non-investment
grade debt obligations (sometimes referred to as “high yield” or “junk” bonds)
involve greater risk than investment-grade debt obligations, including the
possibility of default or bankruptcy. They tend to be more sensitive to economic
conditions than higher-rated debt obligations and, as a result, are generally
more sensitive to credit risk than debt obligations in the higher-rated
categories.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax-exempt interest.
Because
the Fund may invest more than 25% of its total assets in municipal obligations
issued by entities located in the same state or the interest on which is paid
solely from revenues of similar projects, changes in economic, business or
political conditions relating to a particular state or type of projects may have
a disproportionate impact on the Fund.
The
repayment of principal and interest on some of the municipal obligations in
which the Fund may invest may be guaranteed or insured by a monoline insurance
company. If a company insuring municipal obligations in which the Fund invests
experiences financial difficulties, the credit rating and price of the security
may deteriorate.
Municipal
Housing Bonds Risks
Municipal
housing bonds are bonds issued by state and municipal authorities established to
purchase single family and other residential mortgages from commercial banks and
other lending institutions. Certain factors and adverse economic developments
may affect the mortgagor’s ability to maintain payments under the underlying
mortgages.
Mortgages
may also be partially or completely prepaid prior to their final stated
maturities.
Municipal
Lease Obligations Risks
Participation
interests in municipal leases pose special risks because many leases and
contracts contain “non-appropriation” clauses that provide that the governmental
issuer has no obligation to make future payments under the lease or contract
unless money is appropriated for this purpose by the appropriate legislative
body.
Zero
Coupon Bonds Risks
Zero
coupon bonds do not pay interest on a current basis and may be highly volatile
as interest rates rise or fall. In addition, while such bonds generate income
for tax purposes and for purposes of generally accepted accounting standards,
they do not generate cash flow and thus could cause the Fund to be forced to
liquidate securities at an inopportune time in order to distribute cash, as
required by tax laws.
When-Issued,
Delayed Delivery and Forward Commitments Risks
When-issued,
delayed delivery and forward commitment transactions involve the risk that the
price or yield obtained in a transaction (and therefore the value of a debt
obligation) may be less favorable than the price or yield (and therefore the
value of a debt obligation) available in the market when the debt obligations
delivery takes place. Failure of the other party to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
Tax
Risks
Municipal
obligations may decrease in value during times when federal income tax rates are
falling. The Fund’s investments are affected by changes in federal income tax
rates applicable to, or the continuing federal tax-exempt status of, interest
income on municipal obligations. Any proposed or actual changes in such rates or
exempt status, therefore, can significantly affect the liquidity, marketability
and supply and demand for municipal obligations, which would in turn affect the
Fund’s ability to acquire and dispose of municipal obligations at desirable
yield and price levels.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the
Fund.
Valuation
Risks
The
debt obligations held by the Fund are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies. The
prices used by the Fund may be different from the prices used by other mutual
funds or from the
prices
at which the Fund’s debt obligations are actually bought and sold. The prices of
the Fund’s debt obligations may be subject to frequent and significant change
and will vary depending on the information that is available to the party
providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, the Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers may cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with the Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S. and China may have a significant negative impact on the
global economy and asset prices. Measures of inflation reached levels not
experienced in several decades, leading the Federal Reserve to raise short-term
interest rates significantly over the last year, with the potential for further
rate increases in 2023. Uncertainty regarding the ability of the Federal Reserve
to successfully control inflation, the potential for incremental rate increases,
and the full impact of prior rate increases on the economy and other factors,
such as disruption in the banking sector, may negatively impact asset prices and
increase market volatility. The possibility of a U.S. or global recession may
also contribute to market volatility. The coronavirus (COVID-19) pandemic caused
significant economic disruption in recent years as countries worked to limit the
negative health impacts of the virus. While the virus appears to be entering an
endemic stage, significant outbreaks or new variants present a continued risk to
the global economy. It is possible that these or other geopolitical events could
have an adverse effect on the Fund’s performance.
Performance
The performance
information provides some indication of the risks of investing in the Fund by
showing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for one year and since inception period compare with
those of a broad measure of market performance. Past performance, before and
after taxes, is not necessarily an indication of how the Fund will perform in
the future.
Updated performance information is
available on the Fund’s website at www.bairdfunds.com
or by calling the Fund toll‑free at 1‑866‑442‑2473.
Calendar Year Returns for Institutional Class
Shares
|
|
|
|
|
|
|
| |
Best
quarter: |
4th quarter 2022 |
4.40 |
% |
Worst
quarter: |
1st quarter 2022 |
-5.50 |
% |
|
|
|
|
|
|
|
| |
Average Annual Total Returns as of
December 31, 2022 |
| 1
Year |
Since
Inception
(11/15/19) |
Institutional
Class |
| |
Return Before
Taxes |
-7.73% |
1.95% |
Return After Taxes on
Distributions |
-7.75% |
1.56% |
Return After Taxes on Distributions and
Sale of Fund Shares |
-3.64% |
1.84% |
Investor
Class |
| |
Return Before
Taxes |
-7.78% |
1.70% |
Bloomberg
Municipal Bond Index
(reflects no deduction for
fees, expenses or taxes) |
-8.53% |
-0.48% |
After‑tax returns are shown
only for Institutional Class shares, and the after‑tax returns for Investor
Class shares will vary. After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your actual after‑tax returns
depend on your tax situation and may differ from those shown. After‑tax returns
are not relevant if you hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or an individual retirement
account.
The Return After Taxes on
Distributions and Sale of Fund Shares may be higher than other return figures
when a capital loss occurs upon the redemption of Fund shares and provides an
assumed tax benefit that increases the after‑tax
return.
Investment
Advisor
Robert
W. Baird & Co. Incorporated is the Fund’s investment advisor.
Portfolio
Managers
|
|
|
|
|
|
|
| |
Name |
Portfolio
Manager
of
the
Fund
Since |
Title |
Lyle
J. Fitterer, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Duane
A. McAllister, CFA |
2019 |
Senior
Portfolio Manager for Baird Advisors and Managing Director of the
Advisor |
Erik
R. Schleicher, CFA |
2019 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Joseph
J. Czechowicz, CFA |
2019 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
Gabe
G. Diederich, CFA |
2022 |
Portfolio
Manager for Baird Advisors and Senior Vice President of the
Advisor |
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
82.
Purchase
and Sale of Fund Shares
You
may purchase or redeem shares of the Funds on any day the New York Stock
Exchange (the “NYSE”) is open by written request via mail (Baird Funds, Inc. c/o
U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201‑0701) or
overnight delivery (Baird Funds, Inc. c/o U.S. Bank Global Fund Services, 615 E.
Michigan Street, Third Floor, Milwaukee, WI 53202), by wire transfer, by
telephone at 1‑866‑442‑2473, or through a financial intermediary. Purchases and
redemptions by telephone are only permitted if you previously established these
options on your account.
The
minimum initial and subsequent investment amounts are shown below, although the
Funds may reduce or waive them in some cases in their discretion.
|
|
|
|
|
|
|
| |
| Initial
Purchase |
Subsequent
Purchases |
Investor
Class |
$1,000
– Individual Retirement Accounts (Traditional/Roth/SIMPLE/SEP
IRAs) |
$100 |
| $2,500
– All Other Accounts |
$100 |
Institutional
Class |
$10,000
– All Account Types |
No
minimum |
Tax
Information
Each
Fund’s distributions may be subject to federal income tax and may be taxed as
ordinary income or long‑term capital gains unless you are investing through a
tax-deferred or other tax-advantaged arrangement, such as a 401(k) plan or an
individual retirement account. You may be taxed later upon the withdrawal of
monies from such tax-deferred arrangements or other tax-advantaged arrangements.
The Short-Term Municipal Bond Fund, Strategic Municipal Bond Fund, Quality
Intermediate Municipal Bond Fund, Core Intermediate Municipal Bond Fund and
Municipal Bond Fund intend to make distributions that are primarily exempt from
federal income tax. However, a portion of the Short‑Term Municipal Bond Fund,
Strategic Municipal Bond Fund, Quality Intermediate Municipal Bond Fund, Core
Intermediate Municipal Bond Fund and Municipal Bond Fund’s distributions may be
taxed as ordinary income or long‑term capital gains.
Payments
to Broker‑Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker‑dealer or other financial intermediary
(such as a bank), the Funds and their related companies may pay the intermediary
for the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker‑dealer or other intermediary and
your salesperson to recommend the Funds over another investment. In addition,
some broker-dealers may regard Institutional Class shares of the Funds as
“clean” shares and will charge you a commission on the purchase of such shares.
Ask your salesperson or visit your financial intermediary’s website for more
information.
This
Prospectus describes the Baird Ultra Short Bond Fund (“Ultra Short Bond Fund”),
Baird Short‑Term Bond Fund (“Short‑Term Bond Fund”), Baird Intermediate Bond
Fund (“Intermediate Bond Fund”), Baird Aggregate Bond Fund (“Aggregate Bond
Fund”), Baird Core Plus Bond Fund (“Core Plus Bond Fund”), Baird Short‑Term
Municipal Bond Fund (“Short-Term Municipal Bond Fund”), Baird Strategic
Municipal Bond Fund (“Strategic Municipal Bond Fund”), Baird Quality
Intermediate Municipal Bond Fund (“Quality Intermediate Municipal Bond Fund”),
Baird Core Intermediate Municipal Bond Fund (“Core Intermediate Municipal Bond
Fund”) and Baird Municipal Bond Fund (“Municipal Bond Fund”) (each, a “Fund” and
collectively, the “Funds”), ten mutual funds offered by Baird Funds, Inc.
(“Baird Funds” or the “Company”).
Ultra
Short Bond Fund
The
investment objective of the Ultra Short Bond Fund is to seek current income
consistent with preservation of capital.
Short‑Term
Bond Fund
The
investment objective of the Short‑Term Bond Fund is to seek an annual rate of
total return, before fund expenses, greater than the annual rate of total return
of the Bloomberg 1‑3 Year U.S. Government/Credit Bond Index. The Bloomberg 1‑3
Year U.S. Government/Credit Bond Index is an unmanaged, market value weighted
index of investment grade, fixed‑rate debt including government and corporate
debt obligations with maturities between one and three years.
Intermediate
Bond Fund
The
investment objective of the Intermediate Bond Fund is to seek an annual rate of
total return, before fund expenses, greater than the annual rate of total return
of the Bloomberg Intermediate U.S. Government/Credit Bond Index. The Bloomberg
Intermediate U.S. Government/Credit Bond Index is an unmanaged, market value
weighted index of investment grade, fixed‑rate debt including government and
corporate debt obligations with maturities between one and ten
years.
Aggregate
Bond Fund
The
investment objective of the Aggregate Bond Fund is to seek an annual rate of
total return, before fund expenses, greater than the annual rate of total return
of the Bloomberg U.S. Aggregate Bond Index. The Bloomberg U.S. Aggregate Bond
Index is an unmanaged, market value weighted index of investment grade,
fixed‑rate debt issues, including government, corporate, asset‑backed, and
mortgage‑backed debt obligations, with maturities of at least one
year.
Core
Plus Bond Fund
The
investment objective of the Core Plus Bond Fund is to seek an annual rate of
total return, before fund expenses, greater than the annual rate of total return
of the Bloomberg U.S. Universal Bond Index. The Bloomberg U.S. Universal Bond
Index is an unmanaged, market value weighted index of fixed income debt
obligations issued in U.S. dollars, including U.S. government and investment
grade debt, non‑investment grade, asset‑backed and mortgage‑backed debt
obligations, Eurobonds, 144A securities and emerging market debt with maturities
of at least one year.
Short‑Term
Municipal Bond Fund
The
investment objective of the Short‑Term Municipal Bond Fund is to seek current
income that is exempt from federal income tax and is consistent with the
preservation of capital.
Strategic
Municipal Bond Fund
The
investment objective of the Strategic Municipal Bond Fund is to seek a high
level of current income that is exempt from federal income tax and is consistent
with the preservation of capital.
Quality
Intermediate Municipal Bond Fund
The
primary investment objective of the Quality Intermediate Municipal Bond Fund is
to seek current income that is substantially exempt from federal income tax. A
secondary objective is to seek total return with relatively low volatility of
principal.
Core
Intermediate Municipal Bond Fund
The
investment objective of the Core Intermediate Municipal Bond Fund is to seek a
high level of current income that is exempt from federal income tax and is
consistent with the preservation of capital.
Municipal
Bond Fund
The
investment objective of the Municipal Bond Fund is to seek a high level of
current income that is exempt from federal income tax and is consistent with the
preservation of capital.
The
Funds’ investment objectives are fundamental and may not be changed without
shareholder approval.
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To
achieve each Fund’s investment objective(s), the Advisor attempts to keep
the duration of each Fund’s portfolio substantially equal to that of its
benchmark. This does not apply to the Strategic Municipal Bond Fund, in
which the Advisor attempts to keep the duration of that Fund’s portfolio
within ±2 years of its benchmark.
The
Advisor seeks to control credit quality risk by purchasing only investment
grade, U.S. dollar‑denominated debt obligations for the Short‑Term Bond
Fund, Intermediate Bond Fund, Aggregate Bond Fund and Quality Intermediate
Municipal Bond Fund. Although the Ultra Short Bond Fund, Core Plus Bond
Fund, Short-Term Municipal Bond Fund, Strategic Municipal Bond Fund, Core
Intermediate Municipal Bond Fund and Municipal Bond Fund invest primarily
in investment grade debt obligations, they may also invest in
non‑investment grade debt obligations. The Funds may invest in debt
obligations of all maturities.
While
each Fund may invest in debt obligations of all maturities, during normal
market circumstances the dollar weighted average portfolio effective
maturity for each Fund is expected to be as follows: |
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Duration:
a measure of a fixed income security’s average life that reflects the
present value of the security’s cash flow, and accordingly is a measure of
price sensitivity to interest rate changes. A fund’s duration correlates
to the duration of the securities in which it invests. In other words, the
longer a fund’s duration, the more sensitive its market value will be to
changes in interest rates. For example, if interest rates decline by 1%,
the market value of a portfolio with a duration of five years would rise
by approximately 5%. Conversely, if interest rates increase by 1%, the
market value of the portfolio would decline by approximately 5%. For
variable and floating rate instruments, the duration calculation
incorporates the time to the next coupon reset
date. |
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Fund |
Dollar-Weighted
Average
Portfolio
Effective Maturity |
Ultra
Short Bond Fund |
More
than 3 months but less than 18 months |
Short‑Term
Bond Fund |
More
than 1 year but less than 3 years |
Intermediate
Bond Fund |
More
than 3 years but less than 6 years |
Aggregate
Bond Fund |
More
than 5 years but less than 10 years |
Core
Plus Bond Fund |
More
than 5 years but less than 10 years |
Short‑Term
Municipal Bond Fund |
3
years or less |
Strategic
Municipal Bond Fund |
More
than 3 months but less than 10 years |
Quality
Intermediate Municipal Bond Fund |
More
than 3 years but less than 8 years |
Core
Intermediate Municipal Bond Fund |
More
than 3 years but less than 10 years |
Municipal
Bond Fund |
More
than 5 years but less than 12 years |
Effective
maturity takes into account the possibility that a bond may have prepayments or
may be called by the issuer before its stated maturity date.
The
stated maturity of a bond is the date when the issuer must repay the bond’s
entire principal value to an investor. Some types of bonds may also have an
“effective maturity” that is shorter than the stated maturity due to prepayment
or call provisions. Debt obligations without prepayment or call provisions
generally have an effective maturity equal to their expected maturity.
Dollar‑weighted effective maturity is calculated by averaging the effective
maturity of bonds held by the Fund with each effective maturity “weighted”
according to the percentage of net assets that it represents.
The
Advisor generally will sell a security when, on a relative basis and in the
Advisor’s opinion, it will no longer help a Fund attain its objective(s). This
could include, but is not limited to, changes in credit characteristics or
outlook, as well as changes in portfolio strategy or cash flow needs. A security
may also be sold based on relative value considerations and could be replaced
with a security that presents a better value or risk/reward
profile.
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The
Advisor attempts to achieve each Fund’s investment objective(s) over a
full market cycle. Each of the Ultra Short Bond, Short‑Term Bond,
Intermediate Bond, Aggregate Bond, Core Plus Bond, Short-Term Municipal
Bond and Core Intermediate Municipal Bond Fund’s investments are based on,
although do not replicate, the securities composition of the respective
Fund’s benchmark index. Consequently, each Fund’s portfolio composition
and risks will differ from those of the index. For example, the Core Plus
Bond Fund may invest up to 20% of its net assets in non‑investment grade
debt obligations (high yield bonds). Because it does not purchase
non‑investment grade debt obligations, the Aggregate Bond Fund is expected
to perform more closely to the overall investment grade bond market than
the Core Plus Bond Fund is expected to perform. |
Investment
Grade Securities are: Securities
rated in one of the four highest categories by Standard & Poor’s
(“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), Fitch Ratings
(“Fitch”) or another nationally recognized statistical rating
organization. |
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Implementation
of Investment Objective - Taxable Bond Funds
In
determining which debt obligations to buy for the Ultra Short Bond Fund,
Short‑Term Bond Fund, Intermediate Bond Fund, Aggregate Bond Fund and Core Plus
Bond Fund, the Advisor attempts to achieve each Fund’s investment objective(s)
primarily in three ways:
Yield
curve positioning:
The yield curve is a graphic representation of the actual or projected yields of
debt obligations in relation to their maturities and durations. The Advisor
selects debt obligations with maturities and yields that it believes have the
greatest potential for achieving the Fund’s objective(s), while attempting to
match the average duration of the debt obligations in the Fund with the average
duration of the debt obligations in the Fund’s benchmark. The debt obligations
in the Fund, though, will not be identical to the debt obligations in the
benchmark. Because the yield curve is constantly changing, the Advisor regularly
adjusts the Fund’s portfolio to purchase debt obligations that it believes will
best assist the Fund in achieving its objective(s).
Sector
allocation: The
Advisor next evaluates the return potential of each sector (including:
asset‑backed debt obligations, mortgage‑backed debt obligations, government and
other public‑sector bonds, and corporate bonds for the Ultra Short Bond Fund,
Short‑Term Bond Fund, Intermediate Bond Fund, Aggregate Bond Fund and Core Plus
Bond Fund; and general obligation bonds, revenue bonds, pre‑refunded bonds, and
insured bonds for the Quality Intermediate Municipal Bond Fund). The Advisor
invests in debt obligations in those sectors which it believes represent the
greatest potential for achieving the Funds’
objectives.
The Advisor regularly adjusts the portfolio in order to address changes in
yields and underlying risks in various sectors.
Security
selection:
The Advisor then focuses on selecting individual debt obligations. The Advisor
determines which issuers it believes offer the best relative value within each
sector and then decides which available debt obligations of that issuer to
purchase.
From
time to time, each Fund may have a significant portion of its assets invested in
corporate bonds issued by companies in one or more market sectors, diversified
across a range of industries within those market sectors. Each Fund will provide
its shareholders with at least a 60‑day notice of any change in such Fund’s
policy to invest at least 80% of its assets in the types of debt obligations
suggested by its name. “Assets” is defined as net assets plus any borrowings for
investment purposes. For all Funds, the percentage limitations set forth under
“Principal Investment Strategies” are measured at the time of
investment.
Debt
Obligations
The
Ultra Short Bond Fund, Short‑Term Bond Fund, Intermediate Bond Fund, Aggregate
Bond Fund and Core Plus Bond Fund each have a policy of investing at least 80%
of its net assets in debt obligations, including the following types of U.S.
dollar‑denominated debt obligations that are fixed, variable or floating rate
instruments:
• Obligations
of U.S. government and other public‑sector entities
• Asset‑backed
and mortgage‑backed obligations of U.S. and foreign issuers
• Corporate
debt of U.S. and foreign issuers
• Money
market instruments (Ultra Short Bond Fund only)
These
Funds primarily invest in debt obligations with fixed rates of interest, but may
also invest in floating or variable rate debt obligations. Other public‑sector
entities include, but are not limited to, U.S., state and local (municipal)
governments and their agencies and authorities, foreign government entities, and
non‑governmental organizations. The types of municipal obligations in which the
Funds may invest include, but are not limited to, taxable and, to some extent,
tax‑exempt general obligation and revenue bonds, as well as advance refunded and
escrowed‑to‑maturity bonds. Asset‑backed obligations in which the Funds may
invest are backed with underlying assets such as credit card receivables, auto
receivables, student loans, utilities, reimbursement/rate increase allowances
and certain residential home loans. Money market instruments in which the Funds
may invest include, among other things, U.S. government obligations, repurchase
agreements, cash, bank obligations, commercial paper, variable amount master
demand notes, corporate bonds with remaining maturities of 13 months or less,
certificates of deposit and money market funds. The Funds may invest in
Rule 144A securities, which are not registered under the federal securities
laws and cannot be sold to the U.S. public because of SEC regulations (known as
“restricted securities”). Rule 144A securities may be resold in transactions
exempt from registration to qualified institutional buyers and are generally
classified as liquid
unless
the Advisor determines otherwise. Each Fund may also invest in other investment
companies that principally invest in the types of instruments allowed by the
investment strategies of the Fund.
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Municipal
Obligations
Municipal
obligations, including municipal bonds and notes, are fixed income
securities issued by states, counties, cities, and other political
subdivisions and authorities. Municipal notes are short‑term securities,
the interest from which is generally tax-exempt. Many municipalities issue
such notes to fund their current operations before collecting taxes or
other municipal revenues. Municipalities also may issue notes to fund
capital projects prior to issuing long‑term bonds. Issuers typically repay
the notes at the end of their fiscal year, either with taxes, other
revenues, or proceeds from newly issued notes or bonds. Municipal
obligations also may be issued by industrial and economic development
authorities, school and college authorities, housing authorities,
healthcare facility authorities, municipal utilities, transportation
authorities, and other public agencies. The market categorizes tax‑exempt
securities by their source of repayment. Although many municipal
obligations are exempt from federal income tax, municipalities also may
issue taxable securities in which the Funds may invest. |
Municipal
Obligations are: dollar-denominated
debt obligations issued by or on behalf of states, territories and
possessions of the United States, the District of Columbia and their
authorities, agencies, instrumentalities and political
subdivisions. |
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Implementation
of Investment Objective - Municipal Bond Funds
Each
of the Short‑Term Municipal Bond Fund, Strategic Municipal Bond Fund, Quality
Intermediate Municipal Bond Fund, Core Intermediate Municipal Bond Fund and
Municipal Bond Fund (collectively, the “Municipal Bond Funds”) invests at least
80% of its net assets in the following municipal bonds and debentures, the
income from which is exempt from federal income tax (including the federal
AMT):
•Municipal
securities including debt obligations of states, territories and possessions of
the U.S., as well as political subdivisions, agencies and financing authorities
thereof that provide income exempt from federal income tax (including the
federal AMT); and
•Municipal
securities with a minimum rating in the lowest investment grade category
(i.e.,
rated BBB or Baa, or higher, or unrated and considered by the Advisor to be of
comparable quality) at the time of purchase.
Municipal
obligations in which the Municipal Bond Funds invest may include fixed, variable
or floating rate instruments. The Municipal Bond Funds may purchase
municipal
obligations on a when‑issued or delayed delivery basis or enter into forward
commitments to purchase municipal obligations.
It
is possible that 25% or more of each Municipal Bond Fund’s assets could be
invested in municipal obligations that would tend to respond similarly to
particular economic or political developments or the interest on which is based
on revenues or otherwise related to similar types of projects. Examples include
securities of issuers whose revenues are paid from similar types of projects,
such as education, housing or transportation, or securities of issuers within
the same state or economic sector. For each Fund, the percentage limitations set
forth under “Principal Investment Strategies” are measured at the time of
investment.
In
pursuing each Municipal Bond Fund’s objective(s), the Advisor uses a
value‑oriented strategy and looks for undervalued municipal securities that
offer above‑average return characteristics. The Advisor considers many market
factors when selecting investments for such Funds. Among the factors considered
are the nominal level and trend in interest rates, the slope of the municipal
yield curve, income tax rates, market sector valuations, credit trends, supply
and demand flows, regional economic strength, as well as legal and regulatory
trends.
The
Municipal Bond Funds may invest in all types of municipal obligations, including
pre‑refunded bonds, general obligation bonds, revenue bonds and municipal lease
participations. Each Municipal Bond Fund may also invest in zero coupon bonds,
which are issued at substantial discounts from their value at maturity and pay
no cash income to their holders until they mature. Each Municipal Bond Fund may
also invest in municipal housing bonds.
The
Advisor seeks to control credit quality risk by investing primarily in
investment grade, U.S. dollar-denominated municipal obligations for the Quality
Intermediate Municipal Bond Fund. Although the Short-Term Municipal Bond Fund,
Strategic Municipal Bond Fund, Core Intermediate Municipal Bond Fund and
Municipal Bond Fund invest primarily in investment grade municipal obligations,
they may also invest in non-investment grade municipal obligations (sometimes
referred to as “high-yield” or “junk” bonds).
Each
Municipal Bond Fund may also invest in unrated municipal obligations that are
determined by the Advisor to be comparable in quality to the rated obligations.
After purchase, a municipal obligation may cease to be rated or may have its
rating reduced below the minimum rating required by each Municipal Bond Fund for
purchase. In such cases, the Advisor will consider whether to continue to hold
the municipal obligation. Each Municipal Bond Fund may hold municipal
obligations with a “D” or similar credit rating indicating at least a partial
payment default.
Other
Principal Investment Strategies (All Funds)
The
Advisor attempts to diversify each Fund’s portfolio by holding debt obligations
of many different issuers and choosing issuers in a variety of
sectors.
Investment
Grade Debt Obligations
Debt
obligations acquired by the Short‑Term Bond Fund, Aggregate Bond Fund and
Quality Intermediate Municipal Bond Fund will be “investment grade” at the time
of purchase, as rated by at least one nationally recognized rating agency. The
Ultra Short Bond Fund, Intermediate Bond Fund, Core Plus Bond Fund, Short‑Term
Municipal Bond Fund, Strategic Municipal Bond Fund, Core Intermediate Municipal
Bond Fund and Municipal Bond Fund will invest primarily in “investment grade”
bonds, but may also invest in non‑investment grade debt obligations, as
described below.
Unrated
Debt Obligations
The
Advisor may purchase unrated obligations for each Fund that are determined by
the Advisor to be comparable in quality to the rated obligations. After
purchase, a debt obligation may cease to be rated or may have its rating reduced
below the minimum rating required by a Fund for purchase. In such cases, the
Advisor will consider whether to continue to hold the debt obligation. The Funds
may hold debt obligations with a “D” or similar credit rating indicating at
least a partial payment default.
Non‑Investment
Grade Debt Obligations (High-Yield Bonds)
The
Ultra Short Bond Fund, Short‑Term Municipal Bond Fund, Core Intermediate
Municipal Bond Fund may each invest up to 10%, the Municipal Bond Fund may
invest up to 15%, the Core Plus Bond Fund may invest up to 20%, and the
Strategic Municipal Bond Fund may invest up to 30% of its net assets in
non‑investment grade debt obligations (sometimes referred to as “high-yield”
bonds), which are debt obligations that are not rated in one of the four highest
rating categories of S&P, Moody’s, Fitch or another nationally recognized
rating agency. The Ultra Short Bond Fund, Core Plus Bond Fund, Short‑Term
Municipal Bond Fund, Strategic Municipal Bond Fund, Core Intermediate Municipal
Bond Fund and Municipal Bond Fund will generally purchase non‑investment grade
debt obligations that are rated at least “B” or higher by S&P or Moody’s or
have an equivalent rating by another nationally recognized rating agency at time
of purchase, but may purchase debt obligations below this rating if the Advisor
believes the issuer’s credit fundamentals or future prospects suggest a higher
rating. In addition, in limited circumstances the Ultra Short Bond Fund, Core
Plus Bond Fund, Short‑Term Municipal Bond Fund, Strategic Municipal Bond Fund,
Core Intermediate Municipal Bond Fund and Municipal Bond Fund may invest in debt
obligations in default.
Foreign
Securities
Each
Fund, excluding the Municipal Bond Funds, may invest in U.S. dollar-denominated
debt obligations of foreign issuers. Foreign debt obligations are generally
determined based on the ultimate parent country of risk which consists of the
following four factors: management location, country of primary listing, country
of revenue and reporting currency of the issuer. Debt obligations issued by a
foreign entity that are subject to a guarantee of a U.S. corporate parent or
other U.S. entity are generally not regarded as foreign securities.
Zero
Coupon Bonds
As
a principal investment strategy, the Municipal Bond Funds may invest in zero
coupon bonds and, as a non-principal investment strategy, the Ultra Short Bond
Fund, Short-Term Bond Fund, Intermediate Bond Fund, Aggregate Bond Fund and Core
Plus Bond Fund may invest in zero coupon bonds. Zero coupon bonds have greater
price volatility than coupon bonds of the same maturity and will not result in
the payment of interest until maturity, provided that a Fund will purchase such
zero coupon bonds only if the likely relative greater price volatility of such
zero coupon bonds is not inconsistent with the Fund’s investment objective.
Although zero coupon bonds pay no cash income to holders prior to maturity,
accrued interest on these bonds must be reported as income to a Fund and
distributed to its shareholders on an annual basis. Accordingly, a Fund may be
required to dispose of its portfolio investments under disadvantageous
circumstances in order to satisfy the distribution requirements applicable to
regulated investment companies under federal income tax law. Additional income
producing securities may not be able to be purchased with cash used to make such
distributions and its current income ultimately may be reduced as a
result.
U.S.
Treasury Futures Contracts – Strategic Municipal Bond Fund
The
Strategic Municipal Bond Fund may invest in U.S. Treasury futures contracts for
duration and yield curve management or to manage market and interest rate risk.
A Fund that uses futures contracts, which are a type of derivative, is subject
to the risks of investing in derivatives.
When-Issued,
Delayed Delivery and Forward Commitments Risks — Municipal Bond
Funds
The
Funds may purchase municipal obligations on a when-issued or delayed delivery
basis or enter into forward commitments to purchase municipal obligations.
Futures
instruments and certain when-issued or delayed delivery securities are types of
derivatives instruments. Each of the Municipal Bond Funds qualifies as a
“limited derivatives user” under the SEC’s derivatives rule (Rule
18f-4).
Cash
or Similar Investments; Temporary Strategies
The
Ultra Short Bond Fund invests in cash and money market instruments, including
money market funds, as part of its principal investment strategy. Under normal
market conditions, each Fund other than the Ultra Short Bond Fund may invest up
to 20% of its net assets in cash or similar short‑term, investment grade debt
obligations (such as U.S. government securities, money market funds, repurchase
agreements, commercial paper, money market instruments or certificates of
deposit). Each of the Short‑Term Bond, Intermediate Term Bond, Aggregate Bond,
Core Plus Bond, Short‑Term Municipal Bond, Strategic Municipal Bond Fund,
Quality Intermediate Municipal Bond, Core Intermediate Municipal Bond Fund and
Municipal Bond Fund may invest up to 100% of its total assets in cash or the
similar investments set forth above as a temporary defensive position during
adverse market, economic or political conditions and in other limited
circumstances. To the extent a Fund engages in any temporary strategies or
maintains a substantial cash position, the Fund may not achieve its investment
objective(s). To the extent a Fund invests in money market funds, there will be
some
duplication
of expenses because the Fund would bear its pro rata portion of such money
market fund’s management fees and operational expenses.
Note
Regarding Percentage Limitations
Whenever
an investment objective, policy or strategy of a Fund set forth in this
Prospectus or the Funds’ SAI states a maximum (or minimum) percentage of a
Fund’s assets that may be invested in any type of security or asset class, the
percentage is determined immediately after the Fund’s acquisition of that
investment, except with respect to percentage limitations on temporary borrowing
and illiquid investments. Accordingly, any later increase or decrease resulting
from a change in the market value of a security or in a Fund’s assets
(e.g.,
due to net sales or redemptions of Fund shares) will not cause the Fund to
violate a percentage limitation. As a result, due to market fluctuations, cash
inflows or outflows or other factors, a Fund may exceed such percentage
limitations from time to time.
The
main risks of investing in each of the Funds are substantially similar. However,
certain risks are enhanced for each Fund. Specifically, certain Funds generally
maintain longer maturities compared to other Funds, thus providing a
comparatively greater potential for return, with a comparatively increased level
of risk. In addition, although certain Funds’ maturities are similar, their
portfolio composition and the resulting risks are different. For example,
certain Funds may purchase debt obligations that are rated below investment
grade. Those Funds are exposed to greater credit risk, including risk of
default, and other risks associated with non-investment grade debt obligations
compared to Funds with the same maturities that do not invest in non-investment
grade debt obligations. Additionally, the Strategic Municipal Bond Fund is
subject to derivatives risk through its use of U.S. Treasury futures
contracts.
Management
Risks
The
Advisor may err in its choices of debt obligations or portfolio mixes. Such
errors could result in a negative return to a Fund and a loss to you. Because
each Fund holds fewer debt obligations than its benchmark index, material events
affecting a holding in a Fund’s portfolio (for example, an issuer’s decline in
credit quality) may influence the performance of the Fund to a greater degree
than such events will influence its benchmark index and may prevent the Fund
from attaining its investment objective(s) for a particular period.
Bond
Market Risks
The
major risks of each Fund are those of investing in the bond market. A bond’s
market value may be affected significantly by changes in interest rates –
generally, when interest rates rise, the bond’s market value declines and when
interest rates decline, its market value rises (“interest rate risk”).
Generally, the longer a bond’s maturity, the greater the interest rate risk and
the higher its yield. Conversely, the shorter a bond’s
maturity,
the lower the interest rate risk and the lower its yield (“maturity risk”).
Variable and floating rate instruments generally have lower interest rate
sensitivity because their coupon rate periodically resets based on an index rate
that changes with the general level of interest rates. A bond’s value may also
be affected by changes in its credit quality rating or the issuer’s financial
condition (“credit quality risk”). Because bond values may fluctuate, a Fund’s
share price may fluctuate.
Call
Risks
If
the securities in which the Funds invest are redeemed by the issuer before
maturity (or “called”), the Funds may have to reinvest the proceeds in
securities that pay a lower interest rate, which may decrease the Funds’ yield.
This will most likely happen when interest rates are declining.
Credit
Quality Risks
Individual
issues of debt obligations may be subject to the credit risk of the issuer.
Therefore, the underlying issuer may experience unanticipated financial problems
and may be unable to meet its payment obligations. Municipal obligations in
particular may be adversely affected by political and economic conditions and
developments (for example, legislation reducing state aid to local governments.)
Debt obligations receiving a lower rating compared to higher rated debt
obligations, may have a weakened capacity to make principal and interest
payments due to changes in economic conditions or other adverse circumstances.
Ratings agencies such as Moody’s, Fitch and S&P provide ratings on debt
obligations based on their analyses of information they deem relevant. Ratings
are essentially opinions or judgments of the credit quality of an issuer and may
prove to be inaccurate. In addition, there may be a delay between events or
circumstances adversely affecting the ability of an issuer to pay interest
and/or repay principal and an agency’s decision to downgrade a debt
obligation.
Non‑Investment
Grade Quality Risks — applies to the Ultra Short Bond Fund, Core Plus Bond Fund,
Short‑Term Municipal Bond Fund, Strategic Municipal Bond Fund, Core Intermediate
Municipal Bond Fund and Municipal Bond Fund
Non‑investment
grade debt obligations (sometimes referred to as “high yield” or “junk” bonds),
while generally offering higher yields than investment grade debt obligations
with similar maturities, involve greater risk, including the possibility of
default or bankruptcy. Non‑investment grade debt obligations tend to be more
sensitive to economic conditions than higher‑rated debt. As a result, they
generally are more sensitive to credit risk and are considered more speculative
than debt obligations in the higher‑rated categories. During an economic
downturn or a sustained period of rising interest rates, highly leveraged
issuers of non‑investment grade debt obligations may experience financial stress
and may not have sufficient revenues to meet their payment obligations. The risk
of loss due to default by an issuer of these debt obligations is significantly
greater than issuers of higher‑rated debt obligations because such debt
obligations are generally unsecured and are often subordinated to other
creditors. The Ultra Short Bond Fund, Core Plus Bond Fund, Short‑Term Municipal
Bond Fund, Strategic Municipal Bond Fund, Core Intermediate Municipal Bond Fund
and Municipal Bond Fund may have difficulty disposing of certain non‑investment
grade debt obligations because there may be a thin trading market for such debt
obligations.
To
the extent a secondary trading market does exist, it is generally not as liquid
as the secondary market for higher‑rated debt obligations. Periods of economic
uncertainty generally result in increased volatility in the market prices of
these debt obligations and will also increase the volatility of the Ultra Short
Bond, Core Plus Bond, Short‑Term Municipal Bond and Core Intermediate Municipal
Bond Funds’ net asset values.
Mortgage‑
and Asset‑Backed
Debt Obligations Risks – applies to all Funds except the Municipal Bond
Funds
Mortgage‑
and asset‑backed debt obligations are more sensitive to interest rate risk than
other types of debt obligations. Modest movements in interest rates (both
increases and decreases) may quickly and significantly reduce the value of
certain types of these debt obligations. When interest rates fall, mortgage‑ and
asset‑backed debt obligations may be subject to prepayment risk, which is the
risk that the borrower will prepay some or the entire principal owed to the
investor. If that happens, a Fund may have to replace the debt obligation by
investing the proceeds in a debt obligation with a lower yield. This could
reduce the share price and income distributions of the Ultra Short Bond,
Short‑Term Bond, Intermediate Bond, Aggregate Bond and Core Plus Bond Funds,
which invest in mortgage‑ and asset‑backed debt obligations. When interest rates
rise, certain types of mortgage‑ and asset‑backed debt obligations are subject
to extension risk, discussed below. Mortgage‑ and asset‑backed debt obligations
can also be subject to the risk of default on the underlying residential or
commercial mortgage(s) or other assets. Weakening real estate markets may cause
default rates to rise, which would result in a decline in the value of
mortgage‑backed debt obligations.
Municipal
Obligations Risks
Municipal
obligations are subject to risks based on many factors, including economic and
regulatory developments, changes or proposed changes in the federal and state
tax structure, deregulation, court rulings, and other factors. The value of
municipal obligations may be affected more by supply and demand factors or the
creditworthiness of the issuer than by market interest rates. Repayment of
municipal obligations depends on the ability of the issuer or project backing
such obligations to generate taxes or revenues. There is a risk that interest
may be taxable on a municipal obligation that is otherwise expected to produce
tax‑exempt interest.
Each
Municipal Bond Fund may invest more than 25% of its total assets in municipal
obligations issued by entities located in the same state or the interest on
which is paid solely from revenues of similar projects. As a result, changes in
economic, business or political conditions relating to a particular state or
types of projects may have a disproportionate impact on each Municipal Bond
Fund’s share price.
The
repayment of principal and interest on some of the municipal obligations in
which the Municipal Bond Funds may invest may be guaranteed or insured by a
monoline insurance company. The monoline guarantee or insurance will generally
enhance the credit rating and lower the interest rate payable on the obligation.
Certain monoline insurers have suffered losses from insuring structured products
and other obligations backed by residential mortgages. If a company insuring
municipal obligations in which
a
Fund invests experiences financial difficulties, the credit rating and price of
the obligation may deteriorate.
Municipal
Housing Bonds Risks – applies to the Municipal Bond Funds
Municipal
housing bonds are bonds issued by state and municipal authorities established to
purchase single family and other residential mortgages from commercial banks and
other lending institutions within the applicable state or municipality. Certain
factors, including changes in national and state policies relating to payments
such as unemployment insurance and welfare, and adverse economic developments,
particularly those affecting less skilled and low income workers, may affect the
mortgagor’s ability to maintain payments under the underlying mortgages.
Mortgages may also be partially or completely prepaid prior to their final
stated maturities.
Municipal
Lease Obligations Risks – applies to the Municipal Bond Funds
The
Municipal Bond Funds may purchase participation interests in municipal leases.
These are undivided interests in a lease, installment purchase contract, or
conditional sale contract entered into by a state or local government unit to
acquire equipment or facilities. Participation interests in municipal leases
pose special risks because many leases and contracts contain “non‑appropriation”
clauses that provide that the governmental issuer has no obligation to make
future payments under the lease or contract unless money is appropriated for
this purpose by the appropriate legislative body. Although these kinds of
obligations are secured by the leased equipment or facilities, it might be
difficult and time consuming to dispose of the equipment or facilities in the
event of non-appropriation, and a Fund might not recover the full principal
amount of the obligation.
Extension
Risk
Debt
obligations, including mortgage‑ and asset‑backed debt obligations, may be paid
off more slowly than originally anticipated, increasing the average life of such
debt obligations and the sensitivity of the prices of such debt obligations to
future interest rate changes. For example, rising interest rates could cause
property owners to pay their mortgages more slowly than expected, resulting in
slower payments of mortgage‑backed debt obligations. This could lengthen the
duration of the debt obligation, making its price more sensitive to interest
rate changes.
Government
Obligations Risks – applies to all Funds except the Municipal Bond
Funds
The
Funds may invest in debt obligations issued, sponsored or guaranteed by the U.S.
government, its agencies and instrumentalities. For instance, debt obligations
issued by the Government National Mortgage Association (“Ginnie Mae”) are
supported by the full faith and credit of the United States. However, no
assurance can be given that the U.S. government will provide financial support
to U.S. government‑sponsored agencies or instrumentalities where it is not
specifically obligated to do so by law.
The
total public debt of the United States as a percentage of gross domestic product
(GDP) has grown rapidly in recent years and is projected to increase in the
coming years. Although high debt levels do not necessarily indicate or cause
economic problems, they may create certain systemic risks if sound debt
management practices are not implemented. A high national debt can raise
concerns that the U.S. government will
not
be able to make principal or interest payments when they are due. Uncertainty
regarding future statutory debt limit negotiations may negatively impact the
U.S. long‑term sovereign credit rating and contribute to market volatility. A
high federal deficit may contribute to higher interest rates and negatively
impact economic growth.
Zero
Coupon Bonds Risk — applies to the Municipal Bond Funds
As
interest on zero coupon bonds is not paid on a current basis, the values of the
bonds are subject to greater fluctuations than are the value of bonds that
distribute income regularly and may be more speculative than such bonds.
Accordingly, the values of zero coupon bonds may be highly volatile as interest
rates rise or fall. In addition, while zero coupon bonds generate income for tax
purposes and for purposes of generally accepted accounting standards, they do
not generate cash flow and thus could cause a Fund to be forced to liquidate
securities at an inopportune time in order to distribute cash, as required by
tax laws.
When‑Issued,
Delayed Delivery and Forward Commitments Risks — applies to the Municipal Bond
Funds
When‑issued,
delayed delivery and forward commitment transactions involve the risk that the
price or yield obtained in a transaction (and therefore the value of a debt
obligation) may be less favorable than the price or yield (and therefore the
value of a debt obligation) available in the market when the debt obligations
delivery takes place. Failure of the other party to consummate the trade may
result in a Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous. If deemed advisable as a matter of investment
strategy, a Fund may dispose of or renegotiate a commitment after it is entered
into, and may sell debt obligations it has committed to purchase before those
debt obligations are delivered to the Fund on the settlement date. In these
cases, a Fund may realize capital gains or losses.
U.S.
Treasury Futures Contracts Risk
–
Strategic Municipal Bond Fund
Futures
contracts are subject to changes in the value of the underlying investments on
which such instruments are based. Futures contracts are subject to the risk of
loss caused by unanticipated market movements. Unanticipated price movements in
a futures contract may result in a loss substantially greater than the Fund’s
initial investment in such a contract. Investments in futures contracts involve
additional costs, may be more volatile than other investments and may involve a
small initial investment relative to the risk assumed. If the Advisor
incorrectly forecasts the value of investments in using a futures contract, a
Fund might have been in a better position if the Fund had not entered into the
contract. The Fund’s use of treasury futures also involves counterparty risk
relating to the other party to the derivative contract, operational risk and the
risk that there may not be a liquid secondary market for certain futures
contracts. The Fund may be unable to buy, terminate or sell a futures contract
at the desired time or price.
Tax
Risks — applies to the Municipal Bond Funds
Municipal
obligations may decrease in value during times when federal income tax rates are
falling. Since interest income on municipal obligations is normally not subject
to regular federal income taxation, the attractiveness of municipal obligations
in relation to other investment alternatives is affected by changes in federal
income tax rates
applicable
to, or the continuing federal tax‑exempt status of, such interest income. Any
proposed or actual changes in such rates or exempt status, therefore, can
significantly affect the liquidity, marketability and supply and demand for
municipal obligations, which would in turn affect the Municipal Bond Funds’
ability to acquire and dispose of municipal obligations at desirable yield and
price levels. In addition, interest earned on certain municipal obligations may
be a preference item subject to the federal AMT for non-corporate
shareholders.
Investment
in federally tax‑exempt securities poses additional risks. In many cases, the
Internal Revenue Service (“IRS”) has not ruled on whether the interest received
on a particular obligation is tax‑exempt, and accordingly, purchases of these
obligations are based on the opinion of bond counsel to the issuers at the time
of issuance. The Municipal Bond Funds and the Advisor rely on these opinions and
will not review the basis for them.
Liquidity
Risks
Certain
debt obligations may be difficult or impossible to sell at the time and price
that the Advisor would like to sell. The Advisor may have to lower the price,
sell other debt obligations or forego an investment opportunity, any of which
may have a negative effect on the management or performance of the Funds. The
liquidity of a particular debt obligation depends on the strength of demand for
the debt obligation, which is generally related to the willingness of
broker‑dealers to make a market for the debt obligation as well as the interest
of other investors to buy the debt obligation. During significant economic and
market downturns and periods in which financial services firms are unable to
commit capital to make a market in, or otherwise buy, certain debt obligations,
the Funds may experience challenges in selling such debt obligations at optimal
prices.
Foreign
Securities Risks – applies to all Funds except the Municipal Bond
Funds
Foreign
investments, even those that are U.S. dollar‑denominated, may involve additional
risks, including political and economic instability, differences in financial
reporting standards and less regulated securities markets. Such securities may
also be subject to greater fluctuations in price than securities of domestic
corporations. In addition, there may be less publicly available information
about a foreign company than about a domestic company. With respect to certain
foreign countries, there is a possibility of expropriation or confiscatory
taxation, or diplomatic developments, which could affect investments in those
countries.
Valuation
Risks
The
debt obligations held by the Funds are generally valued using prices provided by
approved pricing services or, in some cases, using prices provided by dealers or
the valuation committee of the Advisor using fair valuation methodologies.
Pricing service prices for debt obligations are based on various market inputs
such as benchmark yields, reported trades, broker‑dealer quotes, issuer spreads,
comparable securities, bids, offers and reference data, as well as market
indicators, and material issuer, industry and economic events. The prices used
by the Funds may be different from the prices used
by
other mutual funds or from the prices at which the Funds’ securities are
actually bought and sold. The prices of the Funds’ debt obligations may be
subject to frequent and significant change and will vary depending on the
information that is available to the party providing the price.
Sector
Risks
From
time to time, based on market or economic conditions, a Fund may have
significant positions in specific sectors of the market. Potential negative
market or economic developments affecting one or more of these sectors could
have a greater impact on the Fund than on a fund with fewer holdings in that
sector.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Funds are susceptible to operational, information security and related risks. In
general, cyber incidents can result from deliberate attacks or unintentional
events. Cyber attacks include, but are not limited to, gaining unauthorized
access to digital systems (e.g.,
through “hacking” or malicious software coding) for purposes of misappropriating
assets or sensitive information, corrupting data, or causing operational
disruption. Cyber attacks may also be carried out in a manner that does not
require gaining unauthorized access, such as causing denial-of-service attacks
on websites (i.e.,
efforts to make network services unavailable to intended users). Cyber incidents
affecting the Funds or their service providers have the ability to cause
disruptions and impact business operations, potentially resulting in financial
losses, interference with a Fund’s ability to calculate its net asset value
(“NAV”), impediments to trading, the inability of fund shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs, or
additional compliance costs. Similar adverse consequences could result from
cyber incidents affecting issuers of securities in which a Fund invests,
counterparties with which a Fund engages in transactions, governmental and other
regulatory authorities, exchange and other financial market operators, banks,
brokers, dealers, insurance companies and other financial institutions
(including financial intermediaries and service providers for fund shareholders)
and other parties. In addition, substantial costs may be incurred in order to
prevent any cyber incidents in the future. While the Funds’ service providers
have established business continuity plans in the event of, and risk management
systems to prevent, such cyber incidents, there are inherent limitations in such
plans and systems including the possibility that certain risks have not been
identified. Furthermore, the Funds cannot control the cyber security plans and
systems put in place by their service providers or any other third parties whose
operations may affect the Funds or their shareholders. As a result, the Funds
and their shareholders could be negatively impacted.
Recent
Market Events
Russia’s
ongoing war with Ukraine has heightened global geopolitical tensions, resulting
in an elevated risk environment and increased volatility in asset prices. The
uncertain course of the war may have a significant negative impact on the global
economy. U.S. relations with China have become increasingly strained, and
tension between the U.S.
and
China may have a significant negative impact on the global economy and asset
prices.
Measures
of inflation reached levels not experienced in several decades, leading the
Federal Reserve to raise short-term interest rates significantly over the last
year, with the potential for further rate increases in 2023. Uncertainty
regarding the ability of the Federal Reserve to successfully control inflation,
the potential for incremental rate increases, and the full impact of prior rate
increases on the economy and other factors, such as disruption in the banking
sector, may negatively impact asset prices and increase market volatility. The
possibility of a U.S. or global recession may also contribute to market
volatility.
The
coronavirus (COVID-19) pandemic caused significant economic disruption in recent
years as countries worked to limit the negative health impacts of the virus.
While the virus appears to be entering an endemic stage, significant outbreaks
or new variants present a continued risk to the global economy.
It
is possible that these or other geopolitical events could have an adverse effect
on a Fund’s performance.
The
Funds cannot guarantee that they will achieve their respective investment
objectives.
A
description of the Funds’ policies and procedures with respect to the disclosure
of the Funds’ portfolio holdings is available in the Statement of Additional
Information (“SAI”) and on the Company’s website at www.bairdfunds.com.
The
Funds may be appropriate for investors who:
•Want
to earn income on investments generally considered more stable than
stocks;
• Are
looking for a fixed‑income component to their portfolio; and
• Are
willing to assume the risk of investing in fixed‑income debt
obligations.
The
Funds, other than the Ultra Short Bond Fund, may be appropriate for investors
who:
• Wish
to invest for the long‑term; and
• Have
long‑term goals such as planning for retirement.
The
Municipal Bond Funds may be appropriate for investors who are looking for income
that is exempt from federal income tax. The Municipal Bond Funds are not
appropriate investments for tax‑deferred retirement accounts, such as 401(k)
plans and individual retirement accounts (“IRAs”), because their returns before
taxes are generally lower than those of taxable funds.
Before
investing in a Fund, you should carefully consider:
•Your
investment goals;
•The
amount of time you are willing to leave your money invested; and
•The
amount of risk you are willing to take.
Robert
W. Baird & Co. Incorporated, subject to the general supervision of the
Company’s Board of Directors (the “Board”), serves as each Fund’s investment
advisor and administers the Company’s business affairs. The Advisor is
responsible for the day‑to‑day management of the Funds in accordance with each
Fund’s respective investment objective and policies. This includes making
investment decisions and buying and selling securities. Pursuant to an
Investment Advisory Agreement between the Company and the Advisor, for its
services the Advisor receives an annual fee of 0.25% of each Fund’s average
daily net assets. The advisory fee is accrued daily and paid monthly. For the
fiscal year ended December 31, 2022, the Advisor was paid a net annual fee equal
to 0.25% of the average daily net assets of each Fund other than the Ultra Short
Bond Fund.
The
Advisor has contractually agreed to waive management fees in an amount equal to
an annual rate of 0.15% of the average daily net assets for the Ultra Short Bond
Fund until April 30, 2024. The agreement may only be terminated prior to the end
of this term by or with the consent of the Board. As a result of the contractual
waiver, for the fiscal year ended December 31, 2022, the Advisor was paid a
net annual advisory fee equal to 0.10% of the Ultra Short Bond Fund’s average
daily net assets.
A
discussion regarding the basis for the Board’s approval of the Investment
Advisory Agreement for the Funds is available in the Funds’ 2022 annual
report.
Under
a separate Administration Agreement with the Advisor, each Fund pays the Advisor
a fee at an annual rate of 0.05% of its average daily net assets to serve as
administrator. As administrator, the Advisor assumes and pays all third party
service
provider
fees, director fees and most other expenses of each Fund, excluding management
fees, Rule 12b-1 fees and other excluded expenses, such as borrowing costs,
transaction fees and extraordinary expenses.
The
Advisor was founded in 1919 and has its main office at 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202. The Advisor provides investment management
services for individuals and institutional clients including pension and profit
sharing plans. As of December 31, 2022, the Advisor had approximately $177.1
billion in assets under discretionary management.
Mary
Ellen Stanek, Charles B. Groeschell, Warren D. Pierson, M. Sharon deGuzman,
Meghan H. Dean, Jeffrey L. Schrom, Jay E. Schwister, Patrick W. Brown, Andrew J.
O’Connell and Abhishek Pulakanti are the members of the Advisor’s investment
management team who manage the Ultra Short Bond Fund, Short-Term Bond Fund,
Intermediate Bond Fund, Aggregate Bond Fund and Core Plus Bond Fund’s
investments. Duane A. McAllister, Lyle J. Fitterer, Erik R. Schleicher, Joseph
J. Czechowicz and Gabe G. Diederich are the members of the Advisor’s investment
management team who manage the Short-Term Municipal Bond Fund, Strategic
Municipal Bond Fund, Quality Intermediate Municipal Bond Fund, Core Intermediate
Municipal Bond Fund and Municipal Bond Fund’s investments. All team members are
equally responsible for the day‑to‑day management of the Funds and work together
to develop investment strategies and select securities for the Funds. The
investment management team is supported by a staff of research analysts, traders
and other investment professionals.
The
Funds’ SAI provides additional information about the members of the investment
management team, including other accounts they manage, their ownership of Fund
shares and their compensation.
Mary
Ellen Stanek, CFA
Mary
Ellen is a Managing Director and Co-Chief Investment Officer of the Advisor. She
also serves as Co-Chief Investment Officer of Baird Advisors, a department of
the Advisor. Mary Ellen oversees the entire investment management team. She has
over 44 years of investment experience managing various types of fixed income
portfolios. Mary Ellen joined Baird Advisors in March 2000 and previously served
as sole Chief Investment Officer until October 2021. Prior to joining Baird
Advisors, Mary Ellen was employed by Firstar Investment Research &
Management Company, LLC (“FIRMCO”) where she served as President and CEO from
November 1998 to February 2000, and Chief Operating Officer and President from
March 1994 to November 1998. Mary Ellen also served as President of Firstar
Funds, Inc. from December 1998 to March 2000. Mary Ellen obtained her
undergraduate degree from Marquette University and M.B.A. from the University of
Wisconsin‑Milwaukee. She earned the Chartered Financial Analyst designation in
1983. Mary Ellen is a member of the CFA Institute and
the
CFA Society Milwaukee.
Warren
D. Pierson, CFA
Warren
is a Managing Director and Co-Chief Investment Officer of the Advisor. He has
over 37 years of investment experience managing taxable and tax‑exempt fixed
income portfolios. Warren joined Baird Advisors in February 2000. Prior to
joining Baird Advisors, Warren was employed by FIRMCO where he served as a
Senior Vice President and Senior Portfolio Manager from February 1999 to
February 2000, Vice President and Senior Portfolio Manager from June 1997 to
February 1999, and Vice President and Portfolio Manager from May 1993 to June
1997. Warren managed municipal bond portfolios and intermediate taxable bond
portfolios while at FIRMCO. Warren received his undergraduate degree from
Lawrence University. He earned the Chartered Financial Analyst designation in
1990. Warren is a member of the CFA Institute and is a member and past President
of the CFA Society Milwaukee.
Charles
B. Groeschell
Charlie
is a Managing Director and Senior Portfolio Manager of the Advisor. He has over
44 years of investment experience managing various types of fixed income
portfolios. Charlie joined Baird Advisors in February 2000. Prior to joining
Baird Advisors, Charlie was a Senior Vice President and Senior Portfolio Manager
with FIRMCO, where he played a lead role in the overall management of major
fixed income client relationships. Charlie received his B.A. from Texas
Christian University and his M.B.A. from the University of
Wisconsin‑Milwaukee.
Jay
E. Schwister, CFA
Jay
is a Managing Director and Senior Portfolio Manager of the Advisor. As a member
of the investment management team, Jay serves as Director of Research. He has
over 39 years of investment experience managing a broad range of fixed income
portfolios. Jay joined Baird Advisors in December 2004. Prior to joining Baird
Advisors, Jay was a Senior Vice President and Senior Portfolio Manager with
Putnam Investments in Boston responsible for strategy formulation and portfolio
construction across a wide variety of multi-sector fixed income mandates. Jay
obtained his undergraduate degree from Marquette University and earned the
Chartered Financial Analyst designation in 1987. He is currently a member of the
CFA Institute and the CFA Society Milwaukee.
M.
Sharon deGuzman
Sharon
is a Managing Director and Senior Portfolio Manager of the Advisor. She has over
32 years of investment experience managing taxable and tax‑exempt fixed income
portfolios. Sharon joined Baird Advisors in February 2000. Prior to joining
Baird Advisors, Sharon was employed by FIRMCO where she served as an Assistant
Vice President and Portfolio Manager from November 1998 to February 2000, a
Portfolio Manager from November 1996 to November 1998, and a Fixed Income
Analyst from November 1995 to November 1996. Sharon performed quantitative fixed
income analysis and portfolio management while at FIRMCO. She received her
undergraduate degree from Eastern Illinois University. She is a member of the
CFA Institute and the CFA Society Milwaukee.
Jeffrey
L. Schrom, CFA
Jeff
is a Managing Director and Senior Portfolio Manager of the Advisor. He has over
29 years of investment experience managing a broad range of fixed income
portfolios. Jeff joined Baird Advisors in January 2002. Prior to joining Baird
Advisors, he was the Director of Corporate Bonds at Clarica Life Insurance and
began his career as an auditor at the Chicago Board of Trade. He plays a lead
role in overseeing credit research as well as developing and implementing
investment strategies in the credit sector. Jeff obtained his undergraduate
degree from Carroll University and his M.S. in Finance from the University of
Wisconsin-Madison. He earned the Chartered Financial Analyst designation in
1998. He is currently a member of the CFA Institute and the CFA Society
Milwaukee.
Meghan
H. Dean, CFA
Meg
is a Managing Director and Senior Portfolio Manager of the Advisor. She has over
23 years of investment experience managing a broad range of fixed income
portfolios. Meg joined Baird Advisors in February 2000 from FIRMCO. Prior to
rejoining Baird Advisors in 2007, she was a Vice President and Portfolio Manager
with Deerfield Capital Management in Chicago where she was a member of the
asset-backed securities team. She plays a lead role in research and
strategy development in the mortgage and asset-backed sectors. Meg obtained her
undergraduate degree from Boston College, and earned the Chartered Financial
Analyst designation in 2005. She is currently a member of the CFA Institute and
the CFA Society Milwaukee.
Patrick
W. Brown, CFA
Pat
is a Managing Director and Senior Portfolio Manager of the Advisor. He has over
20 years of experience and co-leads research and strategy development in the
mortgage and asset-backed sectors. Pat obtained his undergraduate degree in
Finance and his MS in Applied Economics from Marquette University. He earned the
Chartered Financial Analyst designation in 2006 and is a member of the CFA
Institute and the CFA Society of Milwaukee. Pat joined Baird Advisors in October
2014. Prior to joining Baird Advisors, Pat was a Senior Vice President at
Citigroup Global Markets Inc. covering institutional fixed income accounts,
where he focused on research and relative value analysis within securitized
products and investment grade credit.
Andrew
J. O'Connell, CFA
Andy
is a Managing Director and Senior Investment Analyst of the Advisor. He has 16
years of experience. He focuses on research and analysis in investment-grade and
high-yield corporate credits. Andy obtained his undergraduate degree from
Marquette University, where he was a graduate of the Applied Investment
Management program. He earned the Chartered Financial Analyst designation in
2012 and is a member of the CFA Institute and the CFA Society of Milwaukee.
Prior to joining Baird Advisors in 2011, Andy performed credit research at
M&I Investment Management.
Abhishek
Pulakanti, CFA
Abhi
is a Managing Director and Senior Investment Analyst of the Advisor. He has 15
years of experience. He focuses on research and analysis in investment-grade and
high-
yield
corporate credits. Abhi obtained his undergraduate degree in Computer Science
from Vasavi College of Engineering and his Master’s in Computer Science and MBA
in Finance from Sam Houston State University. He earned the Financial Risk
Manager (FRM) designation in 2010 and the Chartered Financial Analyst
designation in 2014. Abhi is a member of the CFA Institute and the CFA Society
of Milwaukee. Prior to joining Baird Advisors in 2013, he was an Assistant Vice
President and Fixed Income Analyst at BMO Global Asset Management.
Duane
A. McAllister, CFA
Duane
is a Managing Director and Senior Portfolio Manager of the Advisor. He has over
36 years of investment experience managing fixed income portfolios, with a
primary focus on the municipal market. He plays a co-lead role in the
formulation and implementation of investment strategy with a major portion
of his time allocated to municipal portfolio management and credit research.
Duane received his undergraduate degree from Northern Illinois University and
was awarded the Chartered Financial Analyst designation in 1991. Duane is
currently a member of the CFA Institute and is an active member of the CFA
Society Milwaukee. Prior to joining Baird Advisors in 2015, Duane was a Managing
Director and Senior Portfolio Manager at BMO Global Asset Management where he
was the lead portfolio manager for tax-free fixed income
strategies.
Lyle
J. Fitterer, CFA
Lyle
is a Managing Director and Senior Portfolio Manager of the Advisor. He has over
34 years of investment experience managing fixed income portfolios, with a
primary focus on the municipal market. He plays a co-lead role in the
formulation and implementation of investment strategy with a major portion of
his time allocated to municipal portfolio management and credit research. Prior
to joining Baird Advisors in August 2019, Lyle served as the co-head of Global
Fixed Income and the head of the Municipal Fixed Income team at Wells Fargo
Asset Management (WFAM) from September 2017 to June 2019. From May 1989 to
August 2017, Lyle held various roles at WFAM and its predecessor firm (Strong
Capital Management) including Head of the Municipal Fixed Income team, Senior
Portfolio Manager and Research Analyst with the Strong Taxable Fixed Income team
and Managing Director of Strong’s Institutional Client Services team. Lyle is
currently a member of the CFA Institute and the CFA Society
Milwaukee.
Erik
R. Schleicher, CFA
Erik
is a Senior Vice President and Portfolio Manager of the Advisor. He has over 19
years of investment experience. His responsibilities include portfolio
management, credit research and strategy development in the municipal
sector. Erik received his undergraduate degree from the University of
Wisconsin-Oshkosh and his MBA from the University of Wisconsin-Milwaukee. Erik
received the Chartered Financial Analyst designation in 2017 and is currently a
member of the CFA Institute and is a member of the CFA Society Milwaukee. Prior
to joining Baird Advisors in 2015, Erik was a
portfolio
manager with BMO Global Asset Management where he was responsible for managing
tax-free fixed income strategies and credit research.
Joseph
J. Czechowicz, CFA
Joe
is a Senior Vice President and Portfolio Manager of the Advisor. He has over 16
years of investment experience. His responsibilities include portfolio
management, credit research and strategy development in the municipal sector.
Joe received his undergraduate degree from the University of Wisconsin-Parkside
and his MBA with a concentration in applied security analysis from the
University of Wisconsin-Madison. Joe received the Chartered Financial
Analyst designation in 2017 and is currently a member of the CFA Institute and
is a member of the CFA Society Milwaukee. Prior to joining Baird Advisors in
2015, Joe was a portfolio manager with BMO Global Asset Management where he was
responsible for managing tax-free fixed income strategies and credit
research.
Gabe
G. Diederich, CFA
Gabe
is a Senior Vice President and Portfolio Manager of the Advisor. He has 20 years
of experience. His responsibilities include helping to set and implement
investment strategy with a major portion of his time allocated to municipal
portfolio management and credit research. Gabe received his bachelor’s degree
with distinction from the University of Wisconsin at Madison School of Business
and his MBA from Marquette University magna cum laude. He earned the Chartered
Financial Analyst designation in 2012 and is active in the CFA Society of
Milwaukee. Gabe is a member of the National Federation of Municipal Analysts
(NFMA) and the Chicago Municipal Analysts Society. Prior to joining Baird
Advisors in 2020, Gabe spent 17 years at Wells Fargo Asset Management (WFAM) and
its predecessor firm, Strong Capital Management. At WFAM, Gabe was a municipal
portfolio manager working on over $40 billion in client municipal assets
including mutual funds and institutional separate accounts.
The
financial highlights tables are intended to help you understand each Fund’s
financial performance for the past five fiscal years or the life of the Fund, as
indicated in the tables below. Certain information reflects financial results
for a single Fund share. The total returns presented in the table represent the
rate that an investor would have earned or lost on an investment in the Fund for
the stated periods (assuming reinvestment of all distributions). This
information has been audited by Cohen & Company, Ltd., the independent
registered public accounting firm of the Fund, whose report, along with each
Fund’s financial statements, is included in the Funds’ Annual
Report,
which is available upon request.
Baird
Ultra Short Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
10.05 |
|
| $ |
10.08 |
|
| $ |
10.06 |
|
| $ |
10.01 |
|
| $ |
10.03 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.13 |
|
| 0.04 |
|
| 0.12 |
|
| 0.26 |
|
| 0.23 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.03) |
|
| (0.02) |
|
| 0.05 |
|
(2) |
0.05 |
|
| (0.04) |
|
|
|
| |
Total
from investment operations |
0.10 |
|
| 0.02 |
|
| 0.17 |
|
| 0.31 |
|
| 0.19 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.16) |
|
| (0.05) |
|
| (0.14) |
|
| (0.26) |
|
| (0.21) |
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.00 |
) |
(3) |
(0.01) |
|
| (0.00 |
) |
(3) |
— |
|
|
|
| |
Total
distributions |
(0.16) |
|
| (0.05) |
|
| (0.15) |
|
| (0.26) |
|
| (0.21) |
|
|
|
| |
Net
asset value, end of year |
$ |
9.99 |
|
| $ |
10.05 |
|
| $ |
10.08 |
|
| $ |
10.06 |
|
| $ |
10.01 |
|
|
|
| |
Total
return |
0.96 |
% |
| 0.20 |
% |
| 1.66 |
% |
| 3.11 |
% |
| 1.95 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$ |
5,515.0 |
|
| $ |
6,889.5 |
|
| $ |
4,456.4 |
|
| $ |
1,701.0 |
|
| $ |
1,031.5 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.15 |
% |
| 0.15 |
% |
| 0.15 |
% |
| 0.15 |
% |
| 0.15 |
% |
|
|
| |
Ratio
of expenses to average net assets (before waivers) |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
1.34 |
% |
| 0.38 |
% |
| 1.24 |
% |
| 2.61 |
% |
| 2.24 |
% |
|
|
| |
Ratio
of net investment income to average net assets (before waivers) |
1.19 |
% |
| 0.23 |
% |
| 1.09 |
% |
| 2.46 |
% |
| 2.09 |
% |
|
|
| |
Portfolio
turnover rate(4) |
104 |
% |
| 96 |
% |
| 92 |
% |
| 70 |
% |
| 66 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Due
to timing of capital share transactions, the per share amount of net realized
and unrealized gain (loss) on investments varies from the amounts shown in the
Statement of Operations.
(3)Amount
is less than $0.005.
(4)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Ultra Short Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
10.07 |
|
| $ |
10.10 |
|
| $ |
10.05 |
|
| $ |
10.00 |
|
| $ |
10.03 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.11 |
|
| 0.01 |
|
| 0.10 |
|
| 0.24 |
|
| 0.20 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.04) |
|
| (0.01) |
|
| 0.07 |
|
(2) |
0.04 |
|
| (0.04) |
|
|
|
| |
Total
from investment operations |
0.07 |
|
| — |
|
| 0.17 |
|
| 0.28 |
|
| 0.16 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.13) |
|
| (0.03) |
|
| (0.11) |
|
| (0.23) |
|
| (0.19) |
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.00 |
) |
(3) |
(0.01) |
|
| (0.00 |
) |
(3) |
— |
|
|
|
| |
Total
distributions |
(0.13) |
|
| (0.03) |
|
| (0.12) |
|
| (0.23) |
|
| (0.19) |
|
|
|
| |
Net
asset value, end of year |
$ |
10.01 |
|
| $ |
10.07 |
|
| $ |
10.10 |
|
| $ |
10.05 |
|
| $ |
10.00 |
|
|
|
| |
Total
return |
0.70 |
% |
| (0.05) |
% |
| 1.66 |
% |
| 2.87 |
% |
| 1.60 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$ |
92.7 |
|
| $ |
164.2 |
|
| $ |
122.7 |
|
| $ |
32.5 |
|
| $ |
15.6 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.40 |
% |
| 0.40 |
% |
| 0.40 |
% |
| 0.40 |
% |
| 0.40 |
% |
|
|
| |
Ratio
of expenses to average net assets (before waivers) |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
1.09 |
% |
| 0.13 |
% |
| 0.99 |
% |
| 2.36 |
% |
| 1.99 |
% |
|
|
| |
Ratio
of net investment income (loss) to average net assets (before
waivers) |
0.94 |
% |
| (0.02) |
% |
| 0.84 |
% |
| 2.21 |
% |
| 1.84 |
% |
|
|
| |
Portfolio
turnover rate(4) |
104 |
% |
| 96 |
% |
| 92 |
% |
| 70 |
% |
| 66 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Due
to timing of capital share transactions, the per share amount of net realized
and unrealized gain (loss) on investments varies from the amounts shown in the
Statement of Operations.
(3)Amount
is less than $0.005.
(4)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Short-Term Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
9.74 |
|
| $ |
9.92 |
|
| $ |
9.77 |
|
| $ |
9.57 |
|
| $ |
9.64 |
|
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Net
investment income(1) |
0.16 |
|
| 0.10 |
|
| 0.18 |
|
| 0.24 |
|
| 0.21 |
|
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.51) |
|
| (0.14) |
|
| 0.23 |
|
| 0.20 |
|
| (0.07) |
|
|
|
|
| |
Total
from investment operations |
(0.35) |
|
| (0.04) |
|
| 0.41 |
|
| 0.44 |
|
| 0.14 |
|
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Distributions
from net investment income |
(0.17) |
|
| (0.11) |
|
| (0.19) |
|
| (0.24) |
|
| (0.21) |
|
|
|
|
| |
Distributions
from net realized gains |
(0.00 |
) |
(2) |
(0.03) |
|
| (0.07) |
|
| — |
|
| — |
|
|
|
|
| |
Total
distributions |
(0.17) |
|
| (0.14) |
|
| (0.26) |
|
| (0.24) |
|
| (0.21) |
|
|
|
|
| |
Net
asset value, end of year |
$ |
9.22 |
|
| $ |
9.74 |
|
| $ |
9.92 |
|
| $ |
9.77 |
|
| $ |
9.57 |
|
|
|
|
| |
Total
return |
(3.64) |
% |
| (0.42) |
% |
| 4.23 |
% |
| 4.68 |
% |
| 1.49 |
% |
|
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Net
assets, end of year (millions) |
$ |
8,747.4 |
|
| $ |
10,486.4 |
|
| $ |
8,790.5 |
|
| $ |
6,469.1 |
|
| $ |
5,596.2 |
|
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
|
| |
Ratio
of net investment income to average net assets |
1.67 |
% |
| 1.05 |
% |
| 1.87 |
% |
| 2.50 |
% |
| 2.21 |
% |
|
|
|
| |
Portfolio
turnover rate(3) |
77 |
% |
| 67 |
% |
| 64 |
% |
| 64 |
% |
| 58 |
% |
|
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Amount
is less than $0.005.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Short-Term Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
9.74 |
|
| $ |
9.91 |
|
| $ |
9.77 |
|
| $ |
9.57 |
|
| $ |
9.64 |
|
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Net
investment income(1) |
0.13 |
|
| 0.08 |
|
| 0.16 |
|
| 0.22 |
|
| 0.19 |
|
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.51) |
|
| (0.13) |
|
| 0.21 |
|
| 0.20 |
|
| (0.07) |
|
|
|
|
| |
Total
from investment operations |
(0.38) |
|
| (0.05) |
|
| 0.37 |
|
| 0.42 |
|
| 0.12 |
|
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Distributions
from net investment income |
(0.14) |
|
| (0.09) |
|
| (0.16) |
|
| (0.22) |
|
| (0.19) |
|
|
|
|
| |
Distributions
from net realized gains |
(0.00 |
) |
(2) |
(0.03) |
|
| (0.07) |
|
| — |
|
| — |
|
|
|
|
| |
Total
distributions |
(0.14) |
|
| (0.12) |
|
| (0.23) |
|
| (0.22) |
|
| (0.19) |
|
|
|
|
| |
Net
asset value, end of year |
$ |
9.22 |
|
| $ |
9.74 |
|
| $ |
9.91 |
|
| $ |
9.77 |
|
| $ |
9.57 |
|
|
|
|
| |
Total
return |
(3.88) |
% |
| (0.57) |
% |
| 3.86 |
% |
| 4.42 |
% |
| 1.24 |
% |
|
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Net
assets, end of year (millions) |
$ |
216.9 |
|
| $ |
252.5 |
|
| $ |
192.7 |
|
| $ |
182.4 |
|
| $ |
145.0 |
|
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
|
| |
Ratio
of net investment income to average net assets |
1.42 |
% |
| 0.80 |
% |
| 1.62 |
% |
| 2.25 |
% |
| 1.96 |
% |
|
|
|
| |
Portfolio
turnover rate(3) |
77 |
% |
| 67 |
% |
| 64 |
% |
| 64 |
% |
| 58 |
% |
|
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Amount
is less than $0.005.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Intermediate Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
11.27 |
|
| $ |
11.69 |
|
| $ |
11.27 |
|
| $ |
10.80 |
|
| $ |
11.01 |
|
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Net
investment income(1) |
0.22 |
|
| 0.18 |
|
| 0.25 |
|
| 0.29 |
|
| 0.27 |
|
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(1.19) |
|
| (0.34) |
|
| 0.58 |
|
| 0.46 |
|
| (0.21) |
|
|
|
|
| |
Total
from investment operations |
(0.97) |
|
| (0.16) |
|
| 0.83 |
|
| 0.75 |
|
| 0.06 |
|
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Distributions
from net investment income |
(0.22) |
|
| (0.18) |
|
| (0.25) |
|
| (0.28) |
|
| (0.27) |
|
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.08) |
|
| (0.16) |
|
| — |
|
| — |
|
|
|
|
| |
Total
distributions |
(0.22) |
|
| (0.26) |
|
| (0.41) |
|
| (0.28) |
|
| (0.27) |
|
|
|
|
| |
Net
asset value, end of year |
$ |
10.08 |
|
| $ |
11.27 |
|
| $ |
11.69 |
|
| $ |
11.27 |
|
| $ |
10.80 |
|
|
|
|
| |
Total
return |
(8.64) |
% |
| (1.41) |
% |
| 7.42 |
% |
| 7.05 |
% |
| 0.58 |
% |
|
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
|
| |
Net
assets, end of year (millions) |
$ |
6,980.6 |
|
| $ |
6,639.0 |
|
| $ |
5,264.4 |
|
| $ |
4,342.1 |
|
| $ |
3,264.9 |
|
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
|
| |
Ratio
of net investment income to average net assets |
2.11 |
% |
| 1.54 |
% |
| 2.17 |
% |
| 2.57 |
% |
| 2.51 |
% |
|
|
|
| |
Portfolio
turnover rate(2) |
47 |
% |
| 51 |
% |
| 37 |
% |
| 26 |
% |
| 32 |
% |
|
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Intermediate Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
11.83 |
|
| $ |
12.26 |
|
| $ |
11.80 |
|
| $ |
11.29 |
|
| $ |
11.50 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.20 |
|
| 0.16 |
|
| 0.23 |
|
| 0.27 |
|
| 0.25 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(1.25) |
|
| (0.36) |
|
| 0.61 |
|
| 0.50 |
|
| (0.22) |
|
|
|
| |
Total
from investment operations |
(1.05) |
|
| (0.20) |
|
| 0.84 |
|
| 0.77 |
|
| 0.03 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.19) |
|
| (0.15) |
|
| (0.22) |
|
| (0.26) |
|
| (0.24) |
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.08) |
|
| (0.16) |
|
| — |
|
| — |
|
|
|
| |
Total
distributions |
(0.19) |
|
| (0.23) |
|
| (0.38) |
|
| (0.26) |
|
| (0.24) |
|
|
|
| |
Net
asset value, end of year |
$ |
10.59 |
|
| $ |
11.83 |
|
| $ |
12.26 |
|
| $ |
11.80 |
|
| $ |
11.29 |
|
|
|
| |
Total
return |
(8.88) |
% |
| (1.68) |
% |
| 7.16 |
% |
| 6.83 |
% |
| 0.30 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$ |
59.3 |
|
| $ |
42.2 |
|
| $ |
55.2 |
|
| $ |
52.2 |
|
| $ |
47.3 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
1.86 |
% |
| 1.29 |
% |
| 1.92 |
% |
| 2.32 |
% |
| 2.26 |
% |
|
|
| |
Portfolio
turnover rate(2) |
47 |
% |
| 51 |
% |
| 37 |
% |
| 26 |
% |
| 32 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Aggregate Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
11.37 |
|
| $ |
11.77 |
|
| $ |
11.21 |
|
| $ |
10.53 |
|
| $ |
10.87 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income(1) |
0.25 |
|
| 0.19 |
|
| 0.25 |
|
| 0.30 |
|
| 0.29 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(1.76) |
|
| (0.36) |
|
| 0.71 |
|
| 0.69 |
|
| (0.33) |
|
|
|
| |
Total
from investment operations |
(1.51) |
|
| (0.17) |
|
| 0.96 |
|
| 0.99 |
|
| (0.04) |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.26) |
|
| (0.22) |
|
| (0.27) |
|
| (0.31) |
|
| (0.30) |
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.01) |
|
| (0.13) |
|
| — |
|
| — |
|
|
|
| |
Total
distributions |
(0.26) |
|
| (0.23) |
|
| (0.40) |
|
| (0.31) |
|
| (0.30) |
|
|
|
| |
Net
asset value, end of year |
$ |
9.60 |
|
| $ |
11.37 |
|
| $ |
11.77 |
|
| $ |
11.21 |
|
| $ |
10.53 |
|
|
|
| |
Total
return |
(13.35) |
% |
| (1.46) |
% |
| 8.63 |
% |
| 9.48 |
% |
| (0.30) |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of year (millions) |
$ |
34,102.5 |
|
| $ |
39,050.1 |
|
| $ |
31,874.6 |
|
| $ |
21,857.4 |
|
| $ |
14,897.5 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
2.46 |
% |
| 1.66 |
% |
| 2.13 |
% |
| 2.74 |
% |
| 2.77 |
% |
|
|
| |
Portfolio
turnover rate(2) |
43 |
% |
| 39 |
% |
| 35 |
% |
| 31 |
% |
| 24 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Aggregate Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
11.79 |
|
| $ |
12.20 |
|
| $ |
11.60 |
|
| $ |
10.89 |
|
| $ |
11.23 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income(1) |
0.23 |
|
| 0.17 |
|
| 0.23 |
|
| 0.28 |
|
| 0.27 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(1.82) |
|
| (0.38) |
|
| 0.74 |
|
| 0.71 |
|
| (0.33) |
|
|
|
| |
Total
from investment operations |
(1.59) |
|
| (0.21) |
|
| 0.97 |
|
| 0.99 |
|
| (0.06) |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.23) |
|
| (0.19) |
|
| (0.24) |
|
| (0.28) |
|
| (0.28) |
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.01) |
|
| (0.13) |
|
| — |
|
| — |
|
|
|
| |
Total
distributions |
(0.23) |
|
| (0.20) |
|
| (0.37) |
|
| (0.28) |
|
| (0.28) |
|
|
|
| |
Net
asset value, end of year |
$ |
9.97 |
|
| $ |
11.79 |
|
| $ |
12.20 |
|
| $ |
11.60 |
|
| $ |
10.89 |
|
|
|
| |
Total
return |
(13.52) |
% |
| (1.74) |
% |
| 8.42 |
% |
| 9.17 |
% |
| (0.54) |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of year (millions) |
$ |
681.1 |
|
| $ |
904.3 |
|
| $ |
1,029.0 |
|
| $ |
786.4 |
|
| $ |
718.2 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
2.21 |
% |
| 1.41 |
% |
| 1.88 |
% |
| 2.49 |
% |
| 2.52 |
% |
|
|
| |
Portfolio
turnover rate(2) |
43 |
% |
| 39 |
% |
| 35 |
% |
| 31 |
% |
| 24 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Core Plus Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
11.67 |
|
| $ |
12.14 |
|
| $ |
11.56 |
|
| $ |
10.82 |
|
| $ |
11.22 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income(1) |
0.29 |
|
| 0.26 |
|
| 0.29 |
|
| 0.33 |
|
| 0.33 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(1.79) |
|
| (0.38) |
|
| 0.72 |
|
| 0.75 |
|
| (0.39) |
|
|
|
| |
Total
from investment operations |
(1.50) |
|
| (0.12) |
|
| 1.01 |
|
| 1.08 |
|
| (0.06) |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.30) |
|
| (0.28) |
|
| (0.31) |
|
| (0.34) |
|
| (0.34) |
|
|
|
| |
Distributions
from net realized gains |
(0.00) |
(2) |
(0.07) |
|
| (0.12) |
|
| — |
|
| — |
|
|
|
| |
Total
distributions |
(0.30) |
|
| (0.35) |
|
| (0.43) |
|
| (0.34) |
|
| (0.34) |
|
|
|
| |
Net
asset value, end of year |
$ |
9.87 |
|
| $ |
11.67 |
|
| $ |
12.14 |
|
| $ |
11.56 |
|
| $ |
10.82 |
|
|
|
| |
Total
return |
(12.87) |
% |
| (1.02) |
% |
| 8.80 |
% |
| 10.11 |
% |
| (0.51) |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of year (millions) |
$ |
21,288.5 |
|
| $ |
27,654.9 |
|
| $ |
26,805.5 |
|
| $ |
21,424.9 |
|
| $ |
15,635.3 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
2.82 |
% |
| 2.16 |
% |
| 2.46 |
% |
| 2.95 |
% |
| 3.01 |
% |
|
|
| |
Portfolio
turnover rate(3) |
29 |
% |
| 45 |
% |
| 33 |
% |
| 26 |
% |
| 26 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Amount
is less than $0.005.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Core Plus Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
12.21 |
|
| $ |
12.68 |
|
| $ |
12.05 |
|
| $ |
11.28 |
|
| $ |
11.68 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income(1) |
0.28 |
|
| 0.24 |
|
| 0.28 |
|
| 0.32 |
|
| 0.31 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(1.87) |
|
| (0.39) |
|
| 0.74 |
|
| 0.76 |
|
| (0.40) |
|
|
|
| |
Total
from investment operations |
(1.59) |
|
| (0.15) |
|
| 1.02 |
|
| 1.08 |
|
| (0.09) |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.28) |
|
| (0.25) |
|
| (0.28) |
|
| (0.31) |
|
| (0.31) |
|
|
|
| |
Distributions
from net realized gains |
(0.00) |
(2) |
(0.07) |
|
| (0.11) |
|
| — |
|
| — |
|
|
|
| |
Total
distributions |
(0.28) |
|
| (0.32) |
|
| (0.39) |
|
| (0.31) |
|
| (0.31) |
|
|
|
| |
Net
asset value, end of year |
$ |
10.34 |
|
| $ |
12.21 |
|
| $ |
12.68 |
|
| $ |
12.05 |
|
| $ |
11.28 |
|
|
|
| |
Total
return |
(13.09) |
% |
| (1.23) |
% |
| 8.58 |
% |
| 9.69 |
% |
| (0.74) |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of year (millions) |
$ |
1,045.0 |
|
| $ |
1,612.2 |
|
| $ |
2,684.3 |
|
| $ |
2,500.0 |
|
| $ |
2,171.0 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
2.57 |
% |
| 1.91 |
% |
| 2.21 |
% |
| 2.70 |
% |
| 2.76 |
% |
|
|
| |
Portfolio
turnover rate(3) |
29 |
% |
| 45 |
% |
| 33 |
% |
| 26 |
% |
| 26 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Amount
is less than $0.005.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Short-Term Municipal Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
10.39 |
|
| $ |
10.43 |
|
| $ |
10.26 |
|
| $ |
10.06 |
|
| $ |
10.08 |
|
|
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Net
investment income(1) |
0.16 |
|
| 0.12 |
|
| 0.17 |
|
| 0.20 |
|
| 0.20 |
|
|
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.54) |
|
| (0.04) |
|
| 0.16 |
|
| 0.20 |
|
| (0.03) |
|
|
|
|
|
| |
Total
from investment operations |
(0.38) |
|
| 0.08 |
|
| 0.33 |
|
| 0.40 |
|
| 0.17 |
|
|
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Distributions
from net investment income |
(0.16) |
|
| (0.12) |
|
| (0.16) |
|
| (0.20) |
|
| (0.19) |
|
|
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.00 |
) |
(2) |
— |
|
| — |
|
| (0.00 |
) |
(2) |
|
|
|
| |
Total
distributions |
(0.16) |
|
| (0.12) |
|
| (0.16) |
|
| (0.20) |
|
| (0.19) |
|
|
|
|
|
| |
Net
asset value, end of year |
$ |
9.85 |
|
| $ |
10.39 |
|
| $ |
10.43 |
|
| $ |
10.26 |
|
| $ |
10.06 |
|
|
|
|
|
| |
Total
return |
(3.66) |
% |
| 0.74 |
% |
| 3.25 |
% |
| 3.96 |
% |
| 1.75 |
% |
|
|
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Net
assets, end of year (millions) |
$ |
1,695.5 |
|
| $ |
2,190.2 |
|
| $ |
1,520.0 |
|
| $ |
926.1 |
|
| $ |
281.2 |
|
|
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
|
|
| |
Ratio
of net investment income to average net assets |
1.56 |
% |
| 1.10 |
% |
| 1.61 |
% |
| 1.96 |
% |
| 2.03 |
% |
|
|
|
|
| |
Portfolio
turnover rate(3) |
64 |
% |
| 44 |
% |
| 32 |
% |
| 34 |
% |
| 107 |
% |
|
|
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Amount
is less than $0.005.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Short-Term Municipal Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
10.38 |
|
| $ |
10.41 |
|
| $ |
10.25 |
|
| $ |
10.04 |
|
| $ |
10.06 |
|
|
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Net
investment income(1) |
0.13 |
|
| 0.09 |
|
| 0.14 |
|
| 0.17 |
|
| 0.18 |
|
|
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.55) |
|
| (0.03) |
|
| 0.15 |
|
| 0.21 |
|
| (0.03) |
|
|
|
|
|
| |
Total
from investment operations |
(0.42) |
|
| 0.06 |
|
| 0.29 |
|
| 0.38 |
|
| 0.15 |
|
|
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Distributions
from net investment income |
(0.13) |
|
| (0.09) |
|
| (0.13) |
|
| (0.17) |
|
| (0.17) |
|
|
|
|
|
| |
Distributions
from net realized gains |
— |
|
| (0.00 |
) |
(2) |
— |
|
| — |
|
| (0.00 |
) |
(2) |
|
|
|
| |
Total
distributions |
(0.13) |
|
| (0.09) |
|
| (0.13) |
|
| (0.17) |
|
| (0.17) |
|
|
|
|
|
| |
Net
asset value, end of year |
$ |
9.83 |
|
| $ |
10.38 |
|
| $ |
10.41 |
|
| $ |
10.25 |
|
| $ |
10.04 |
|
|
|
|
|
| |
Total
return |
(4.01) |
% |
| 0.59 |
% |
| 2.90 |
% |
| 3.81 |
% |
| 1.52 |
% |
|
|
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Net
assets, end of year (millions) |
$ |
71.7 |
|
| $ |
110.4 |
|
| $ |
92.2 |
|
| $ |
89.6 |
|
| $ |
64.0 |
|
|
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
|
|
| |
Ratio
of net investment income to average net assets |
1.31 |
% |
| 0.85 |
% |
| 1.36 |
% |
| 1.71 |
% |
| 1.78 |
% |
|
|
|
|
| |
Portfolio
turnover rate(3) |
64 |
% |
| 44 |
% |
| 32 |
% |
| 34 |
% |
| 107 |
% |
|
|
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Amount
is less than $0.005.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Strategic Municipal Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
| Period
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
|
2019(1) |
Per
Share Data: |
|
|
|
|
|
|
| |
Net
asset value, beginning of period |
$ |
10.74 |
|
| $ |
10.67 |
|
| $ |
10.07 |
|
| $ |
10.00 |
| |
Income
from investment operations: |
|
|
|
|
|
| |
|
Net
investment income(2) |
0.22 |
|
| 0.11 |
|
| 0.18 |
|
| 0.02 |
| |
Net
realized and unrealized gains (losses) on investments |
(0.79) |
|
| 0.14 |
|
| 0.66 |
|
| 0.07 |
| |
Total
from investment operations |
(0.57) |
|
| 0.25 |
|
| 0.84 |
|
| 0.09 |
| |
Less
distributions: |
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.21) |
|
| (0.12) |
|
| (0.17) |
|
| (0.02) |
| |
Distributions
from net realized gains |
(0.00 |
) |
(3) |
(0.06) |
|
| (0.07) |
|
| — |
| |
Total
distributions |
(0.21) |
|
| (0.18) |
|
| (0.24) |
|
| (0.02) |
| |
Net
asset value, end of period |
$ |
9.96 |
|
| $ |
10.74 |
|
| $ |
10.67 |
|
| $ |
10.07 |
| |
Total
return |
(5.31) |
% |
| 2.26 |
% |
| 8.39 |
% |
| 0.88 |
% |
(4) |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
Net
assets, end of period (millions) |
$ |
470.8 |
|
| $ |
345.0 |
|
| $ |
164.3 |
|
| $ |
12.0 |
|
|
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
(5) |
Ratio
of net investment income to average net assets |
2.18 |
% |
| 1.07 |
% |
| 1.72 |
% |
| 1.60 |
% |
(5) |
Portfolio
turnover rate(6) |
89 |
% |
| 55 |
% |
| 119 |
% |
| 47 |
% |
(4) |
(1)Inception
was close of business on November 15, 2019.
(2)Calculated
using average shares outstanding during the period.
(3)Amount
is less than $0.005.
(4)Not
annualized.
(5)Annualized.
(6)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Strategic Municipal Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
| Period
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
|
2019(1) |
Per
Share Data: |
|
|
|
|
|
|
| |
Net
asset value, beginning of period |
$ |
10.74 |
|
| $ |
10.67 |
|
| $ |
10.07 |
|
| $ |
10.00 |
| |
Income
from investment operations: |
|
|
|
|
|
| |
|
Net
investment income(2) |
0.19 |
|
| 0.09 |
|
| 0.15 |
|
| 0.02 |
| |
Net
realized and unrealized gains (losses) on investments |
(0.79) |
|
| 0.13 |
|
| 0.67 |
|
| 0.06 |
| |
Total
from investment operations |
(0.60) |
|
| 0.22 |
|
| 0.82 |
|
| 0.08 |
| |
Less
distributions: |
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.18) |
|
| (0.09) |
|
| (0.15) |
|
| (0.01) |
| |
Distributions
from net realized gains |
(0.00 |
) |
(3) |
(0.06) |
|
| (0.07) |
|
| — |
| |
Total
distributions |
(0.18) |
|
| (0.15) |
|
| (0.22) |
|
| (0.01) |
| |
Net
asset value, end of period |
$ |
9.96 |
|
| $ |
10.74 |
|
| $ |
10.67 |
|
| $ |
10.07 |
| |
Total
return |
(5.55) |
% |
| 2.00 |
% |
| 8.13 |
% |
| 0.85 |
% |
(4) |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
Net
assets, end of period (thousands) |
$ |
10,660.1 |
|
| $ |
8,262.3 |
|
| $ |
6,976.1 |
|
| $ |
27.4 |
|
|
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
(5) |
Ratio
of net investment income to average net assets |
1.93 |
% |
| 0.82 |
% |
| 1.47 |
% |
| 1.35 |
% |
(5) |
Portfolio
turnover rate(6) |
89 |
% |
| 55 |
% |
| 119 |
% |
| 47 |
% |
(4) |
(1)Inception
was close of business on November 15, 2019.
(2)Calculated
using average shares outstanding during the period.
(3)Amount
is less than $0.005.
(4)Not
annualized.
(5)Annualized.
(6)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Quality Intermediate Municipal Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
11.85 |
|
| $ |
12.03 |
|
| $ |
11.75 |
|
| $ |
11.38 |
|
| $ |
11.52 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.22 |
|
| 0.21 |
|
| 0.24 |
|
| 0.27 |
|
| 0.27 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.90) |
|
| (0.17) |
|
| 0.28 |
|
| 0.37 |
|
| (0.14) |
|
|
|
| |
Total
from investment operations |
(0.68) |
|
| 0.04 |
|
| 0.52 |
|
| 0.64 |
|
| 0.13 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.22) |
|
| (0.22) |
|
| (0.24) |
|
| (0.27) |
|
| (0.27) |
|
|
|
| |
Total
distributions |
(0.22) |
|
| (0.22) |
|
| (0.24) |
|
| (0.27) |
|
| (0.27) |
|
|
|
| |
Net
asset value, end of year |
$ |
10.95 |
|
| $ |
11.85 |
|
| $ |
12.03 |
|
| $ |
11.75 |
|
| $ |
11.38 |
|
|
|
| |
Total
return |
(5.74) |
% |
| 0.27 |
% |
| 4.43 |
% |
| 5.65 |
% |
| 1.19 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$ |
1,083.0 |
|
| $ |
1,526.2 |
|
| $ |
1,449.2 |
|
| $ |
1,257.4 |
|
| $ |
1,009.2 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
1.94 |
% |
| 1.75 |
% |
| 2.03 |
% |
| 2.30 |
% |
| 2.39 |
% |
|
|
| |
Portfolio
turnover rate(2) |
33 |
% |
| 18 |
% |
| 15 |
% |
| 20 |
% |
| 40 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Quality Intermediate Municipal Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
12.16 |
|
| $ |
12.34 |
|
| $ |
12.04 |
|
| $ |
11.66 |
|
| $ |
11.80 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.19 |
|
| 0.18 |
|
| 0.22 |
|
| 0.24 |
|
| 0.25 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.92) |
|
| (0.18) |
|
| 0.29 |
|
| 0.38 |
|
| (0.15) |
|
|
|
| |
Total
from investment operations |
(0.73) |
|
| — |
|
| 0.51 |
|
| 0.62 |
|
| 0.10 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.19) |
|
| (0.18) |
|
| (0.21) |
|
| (0.24) |
|
| (0.24) |
|
|
|
| |
Total
distributions |
(0.19) |
|
| (0.18) |
|
| (0.21) |
|
| (0.24) |
|
| (0.24) |
|
|
|
| |
Net
asset value, end of year |
$ |
11.24 |
|
| $ |
12.16 |
|
| $ |
12.34 |
|
| $ |
12.04 |
|
| $ |
11.66 |
|
|
|
| |
Total
return |
(5.99) |
% |
| 0.02 |
% |
| 4.23 |
% |
| 5.33 |
% |
| 0.90 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$ |
30.6 |
|
| $ |
59.2 |
|
| $ |
52.4 |
|
| $ |
85.1 |
|
| $ |
110.8 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
1.69 |
% |
| 1.50 |
% |
| 1.78 |
% |
| 2.05 |
% |
| 2.14 |
% |
|
|
| |
Portfolio
turnover rate(2) |
33 |
% |
| 18 |
% |
| 15 |
% |
| 20 |
% |
| 40 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Core Intermediate Municipal Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
10.96 |
|
| $ |
10.96 |
|
| $ |
10.65 |
|
| $ |
10.22 |
|
| $ |
10.32 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.21 |
|
| 0.16 |
|
| 0.23 |
|
| 0.25 |
|
| 0.23 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.88) |
|
| 0.02 |
|
(2) |
0.33 |
|
| 0.43 |
|
| (0.10) |
|
|
|
| |
Total
from investment operations |
(0.67) |
|
| 0.18 |
|
| 0.56 |
|
| 0.68 |
|
| 0.13 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.19) |
|
| (0.17) |
|
| (0.22) |
|
| (0.24) |
|
| (0.23) |
|
|
|
| |
Distributions
from net realized gains |
(0.00 |
) |
(3) |
(0.01) |
|
| (0.03) |
|
| (0.01) |
|
| — |
|
|
|
| |
Total
distributions |
(0.19) |
|
| (0.18) |
|
| (0.25) |
|
| (0.25) |
|
| (0.23) |
|
|
|
| |
Net
asset value, end of year |
$ |
10.10 |
|
| $ |
10.96 |
|
| $ |
10.96 |
|
| $ |
10.65 |
|
| $ |
10.22 |
|
|
|
| |
Total
return |
(6.07) |
% |
| 1.60 |
% |
| 5.26 |
% |
| 6.75 |
% |
| 1.30 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$ |
2,449.7 |
|
| $ |
1,531.2 |
|
| $ |
842.2 |
|
| $ |
535.5 |
|
| $ |
378.1 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
2.01 |
% |
| 1.47 |
% |
| 2.09 |
% |
| 2.36 |
% |
| 2.30 |
% |
|
|
| |
Portfolio
turnover rate(4) |
59 |
% |
| 31 |
% |
| 35 |
% |
| 38 |
% |
| 70 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Due
to timing of capital share transactions, the per share amount of net realized
and unrealized gain (loss) on investments varies from the amounts shown in the
Statement of Operations.
(3)Amount
is less than $0.005.
(4)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Core Intermediate Municipal Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
|
|
| |
Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$10.96 |
|
| $10.95 |
|
| $10.64 |
|
| $10.22 |
|
| $10.32 |
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
investment income(1) |
0.18 |
|
| 0.13 |
|
| 0.20 |
|
| 0.22 |
|
| 0.21 |
|
|
|
| |
Net
realized and unrealized gains (losses) on investments |
(0.88) |
|
| 0.03 |
|
(2) |
0.33 |
|
| 0.43 |
|
| (0.11) |
|
|
|
| |
Total
from investment operations |
(0.70) |
|
| 0.16 |
|
| 0.53 |
|
| 0.65 |
|
| 0.10 |
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
| |
|
|
| |
Distributions
from net investment income |
(0.17) |
|
| (0.14) |
|
| (0.19) |
|
| (0.22) |
|
| (0.20) |
|
|
|
| |
Distributions
from net realized gains |
(0.00 |
) |
(3) |
(0.01) |
|
| (0.03) |
|
| (0.01) |
|
| — |
|
|
|
| |
Total
distributions |
(0.17) |
|
| (0.15) |
|
| (0.22) |
|
| (0.23) |
|
| (0.20) |
|
|
|
| |
Net
asset value, end of year |
$10.09 |
|
| $10.96 |
|
| $10.95 |
|
| $10.64 |
|
| $10.22 |
|
|
|
| |
Total
return |
(6.40) |
% |
| 1.44 |
% |
| 5.01 |
% |
| 6.40 |
% |
| 1.05 |
% |
|
|
| |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
| |
|
|
| |
Net
assets, end of year (millions) |
$38.8 |
|
| $42.5 |
|
| $22.3 |
|
| $5.9 |
|
| $2.0 |
|
|
|
| |
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
|
|
| |
Ratio
of net investment income to average net assets |
1.76 |
% |
| 1.22 |
% |
| 1.84 |
% |
| 2.11 |
% |
| 2.05 |
% |
|
|
| |
Portfolio
turnover rate(4) |
59 |
% |
| 31 |
% |
| 35 |
% |
| 38 |
% |
| 70 |
% |
|
|
| |
(1)Calculated
using average shares outstanding during the year.
(2)Due
to timing of capital share transactions, the per share amount of net realized
and unrealized gain (loss) on investments varies from the amounts shown in the
Statement of Operations.
(3)Amount
is less than $0.005.
(4)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Municipal Bond Fund – Institutional Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
| Period
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
|
2019(1) |
Per
Share Data: |
|
|
|
|
|
|
| |
Net
asset value, beginning of period |
$ |
10.76 |
|
| $ |
10.67 |
|
| $ |
10.10 |
|
| $ |
10.00 |
| |
Income
from investment operations: |
|
|
|
|
|
| |
|
Net
investment income(2) |
0.26 |
|
| 0.20 |
|
| 0.23 |
|
| 0.02 |
| |
Net
realized and unrealized gains (losses) on investments |
(1.09) |
|
| 0.17 |
|
| 0.76 |
|
| 0.10 |
| |
Total
from investment operations |
(0.83) |
|
| 0.37 |
|
| 0.99 |
|
| 0.12 |
| |
Less
distributions: |
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.25) |
|
| (0.20) |
|
| (0.21) |
|
| (0.02) |
| |
Distributions
from net realized gains |
— |
|
| (0.08) |
|
| (0.21) |
|
| — |
| |
Total
distributions |
(0.25) |
|
| (0.28) |
|
| (0.42) |
|
| (0.02) |
| |
Net
asset value, end of period |
$ |
9.68 |
|
| $ |
10.76 |
|
| $ |
10.67 |
|
| $ |
10.10 |
| |
Total
return |
(7.73) |
% |
| 3.46 |
% |
| 9.95 |
% |
| 1.19 |
% |
(3) |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
Net
assets, end of period (millions) |
$ |
55.7 |
|
| $ |
34.5 |
|
| $ |
20.3 |
|
| $ |
7.4 |
|
|
Ratio
of expenses to average net assets |
0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
| 0.30 |
% |
(4) |
Ratio
of net investment income to average net assets |
2.63 |
% |
| 1.83 |
% |
| 2.20 |
% |
| 1.69 |
% |
(4) |
Portfolio
turnover rate(5) |
76 |
% |
| 38 |
% |
| 124 |
% |
| 46 |
% |
(3) |
(1)Inception
was close of business on November 15, 2019.
(2)Calculated
using average shares outstanding during the period.
(3)Not
annualized.
(4)Annualized.
(5)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Baird
Municipal Bond Fund – Investor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year
Ended December 31, |
| Period
Ended December 31, |
|
2022 |
| 2021 |
| 2020 |
|
2019(1) |
Per
Share Data: |
|
|
|
|
|
|
| |
Net
asset value, beginning of period |
$ |
10.74 |
|
| $ |
10.66 |
|
| $ |
10.10 |
|
| $ |
10.00 |
| |
Income
from investment operations: |
|
|
|
|
|
| |
|
Net
investment income(2) |
0.24 |
|
| 0.17 |
|
| 0.21 |
|
| 0.02 |
| |
Net
realized and unrealized gains (losses) on investments |
(1.08) |
|
| 0.16 |
|
| 0.75 |
|
| 0.10 |
| |
Total
from investment operations |
(0.84) |
|
| 0.33 |
|
| 0.96 |
|
| 0.12 |
| |
Less
distributions: |
|
|
|
|
|
|
| |
Distributions
from net investment income |
(0.22) |
|
| (0.17) |
|
| (0.19) |
|
| (0.02) |
| |
Distributions
from net realized gains |
— |
|
| (0.08) |
|
| (0.21) |
|
| — |
| |
Total
distributions |
(0.22) |
|
| (0.25) |
|
| (0.40) |
|
| (0.02) |
| |
Net
asset value, end of period |
$ |
9.68 |
|
| $ |
10.74 |
|
| $ |
10.66 |
|
| $ |
10.10 |
| |
Total
return |
(7.78) |
% |
| 3.12 |
% |
| 9.58 |
% |
| 1.16 |
% |
(3) |
Supplemental
data and ratios: |
|
|
|
|
|
|
|
|
Net
assets, end of period (thousands) |
$ |
4,055.6 |
|
| $ |
3,193.3 |
|
| $ |
1,624.8 |
|
| $ |
29.1 |
|
|
Ratio
of expenses to average net assets |
0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
| 0.55 |
% |
(4) |
Ratio
of net investment income to average net assets |
2.38 |
% |
| 1.58 |
% |
| 1.95 |
% |
| 1.44 |
% |
(4) |
Portfolio
turnover rate(5) |
76 |
% |
| 38 |
% |
| 124 |
% |
| 46 |
% |
(3) |
(1)Inception
was close of business on November 15, 2019.
(2)Calculated
using average shares outstanding during the period.
(3)Not
annualized.
(4)Annualized.
(5)Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued and excludes in-kind
transactions, where applicable.
Distributor
The
Advisor, Robert W. Baird & Co. Incorporated, is also the distributor (the
“Distributor”) of shares of the Funds and a member of the Financial Industry
Regulatory Authority, Inc. (“FINRA”).
Rule
12b‑1 Plan
The
Funds have adopted a distribution and shareholder service plan on behalf of
Investor Class shares and pursuant to Rule 12b‑1 under the 1940 Act (the “Rule
12b‑1 Plan”). Under the Rule 12b‑1 Plan, Investor Class shares of the Funds pay
the Distributor a fee at an annual rate of 0.25% of their respective average
daily net asset value. The Distributor uses this fee primarily to finance
activities that promote the sale of Investor Class shares. Such activities
include, but are not necessarily limited to, compensating brokers, dealers,
financial intermediaries and sales personnel for distribution and shareholder
services, printing and mailing prospectuses to persons other than current
shareholders, and printing and mailing sales literature and advertising. Because
12b‑1 fees are ongoing, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
charges.
Referral
Program
The
Distributor has established a referral program pursuant to which it may pay cash
compensation to its sales personnel for sales of Institutional Class shares of
the Funds. Compensation paid to participants in this program for sales of
Institutional Class shares of the Funds may be more or less than compensation
they receive for sales of shares of other investment companies. These payments
may influence the Distributor’s sales personnel to recommend the Institutional
Class shares of the Funds over another investment. These payments are only made
for sales to non-ERISA institutional accounts. The Distributor will pay
compensation under the referral program out of its own resources. Accordingly,
the referral program will not affect the price an investor will pay for
Institutional Class shares of the Funds. Please see “Fees and Expenses of the
Funds” for information about the Funds’ fees and expenses.
Fund
Purchases Through a Financial Intermediary
Financial
intermediaries, such as banks, fiduciaries, custodians, investment advisers, and
broker-dealers, hold shares of the Funds for their clients through omnibus or
networked accounts. The Funds, and/or the Distributor, on behalf of the Funds,
retain financial intermediaries, as agents, to provide sub-transfer agency,
administrative or related shareholder services to their clients for the Funds.
The Advisor or the
Distributor
pays certain financial intermediaries for performing such services. All such
payments are made from the Advisor’s or the Distributor’s own resources and will
not increase costs to the Funds. The Advisor and the Distributor also retain
financial intermediaries to provide sales, marketing support, or related
services to their clients who beneficially own Fund shares. From time to time,
the Advisor or the Distributor pay those financial intermediaries for the
provision of those services. Any such payments will be made from the Advisor’s
or the Distributor’s own resources and will not increase costs to the Funds.
These payments, sometimes referred to as marketing support or revenue sharing
payments, are in addition to or in lieu of any amounts payable to the financial
intermediary under the Funds’ Rule 12b-1 Plan for the provision of distribution
and shareholder services provided by financial intermediaries on behalf of
Investor Class shares.
The
payments made to these financial intermediaries vary based on a number of
factors, including the types of services provided and amount of their clients’
assets invested in the Funds and, with respect to marketing support payments,
the level of sales activity. These payments may influence the financial
intermediary to recommend the Funds, or a particular class of Fund shares, over
another investment.
Each
Fund offers two classes of shares ‑ Investor Class and Institutional Class. The
classes differ with respect to their minimum investments and expenses. Investor
Class shares impose a Rule 12b‑1 fee that is assessed against the assets of
a Fund attributable to that class. Accordingly, the performance information for
the Investor Class shares would be lower than the performance information shown
for the Institutional Class shares above under “Performance” in the “Summary
Section” for each Fund.
The
Distributor retains financial institutions, such as banks, fiduciaries,
custodians, investment advisers and broker‑dealers, as agents to provide sales
or administrative services for their clients or customers who beneficially own
Investor Class shares. Financial institutions will receive Rule 12b‑1 fees from
the Distributor based upon shares owned by their clients or customers. The
Distributor will determine the schedule of such fees and the basis upon which
such fees will be paid.
Shares
of each class in a Fund are sold at their net asset value (“NAV”). Shares may be
purchased or redeemed on days the New York Stock Exchange (the “NYSE”) is open.
The NYSE is closed on the following holidays: New Year’s Day, Martin Luther King
Jr. Day, Washington’s Birthday, Good Friday, Memorial Day, Juneteenth National
Independence
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day.
The
NAV for each class of shares of a Fund is determined as of the close of regular
trading on the NYSE (normally, 3:00 p.m., Central time) Monday through Friday,
except on days the NYSE is not open. If the NYSE closes early, the Fund will
calculate the NAV at the closing time on that day. If an emergency exists as
permitted by the SEC, NAV may be calculated at a different time.
The
NAV for a class of shares is determined by adding the value of each Fund’s
investments, cash and other assets attributable to a particular share class,
subtracting the liabilities attributable to that class and then dividing the
result by the total number of shares outstanding in the class.
The
Board has adopted Pricing and Valuation Committee Procedures (“Pricing
Procedures”), which specify how a Fund’s investments are to be valued when
calculating the Fund’s NAV. The Funds’ accounting agent calculates the
daily NAV for each Fund.
Each
Fund’s portfolio investments are generally valued using pricing information
provided by a primary independent pricing service. If pricing information is not
readily available from the primary pricing service, pricing information from an
approved secondary independent pricing service or another source set forth in
the Pricing Procedures may be used. Should pricing information not be readily
available from a primary or secondary pricing service or another permitted
source, or if the Advisor deems the price received to not represent fair value,
the investment will be priced at its “fair value” as determined by the Advisor
as the valuation designee of the Board, subject to oversight by the Board. The
Advisor has designated its Valuation Committee to be responsible for fair value
determinations.
Debt
obligations are generally valued using evaluated bid prices provided by the
primary pricing service. If the primary pricing service does not price a
particular debt obligation, or if the primary pricing service does not provide a
fully evaluated price, a Fund may use an evaluated price provided by a secondary
pricing service. If a secondary pricing service does not price a particular debt
obligation, the Advisor may obtain and use a valuation from a dealer who was the
underwriter for the issuance or who makes a market in that debt obligation or
similar debt obligations. If the Advisor cannot obtain a price provided by such
a dealer, the debt obligation may be priced using a pre-approved valuation
methodology for the specific situation or at fair value by the Valuation
Committee. Debt obligations purchased with a remaining maturity of 60 days or
less are valued at acquisition cost, plus or minus any amortized discount or
premium (“amortized cost”), or, if the Advisor does not believe amortized cost
is reflective of the fair value of the debt obligation, the debt obligation will
be priced at fair value by the Valuation Committee.
Shares
of mutual funds are generally valued at their last calculated NAV.
If
market quotations are not readily available for a security, the security will be
priced at fair value by the Advisor. Fair value pricing involves subjective
judgments and there is no single standard for determining a security’s fair
value. The price of a security used by a Fund to calculate its NAV may
differ from quoted or published prices for the same security. It is possible
that the fair value determined for a security is materially different from the
value that could be realized upon the sale of that security or from the values
that other mutual funds may determine. In addition, during periods of market
volatility or illiquidity, the prices determined for any individual investment
on any given day may vary significantly from the amount that can be obtained in
an actual sale of that investment, and the Funds’ respective NAVs may fluctuate
significantly from day to day or from period to period.
Minimum
Investments
|
|
|
|
|
|
|
| |
| Initial
Purchase |
Subsequent
Purchases |
Investor
Class |
$1,000
– Individual Retirement Accounts (Traditional/Roth/SIMPLE/SEP
IRAs) |
$100 |
| $2,500
– All Other Accounts |
$100 |
Institutional
Class |
$10,000
– All Account Types |
No
minimum |
Minimum
Investment Reductions – Institutional Class Shares
The
minimum initial investment amount for Institutional Class shares is waived for
all employees, directors and officers of the Advisor or the Company and members
of their families (including parents, grandparents, siblings, spouses, children
and in‑laws of such employees, directors and officers). It is also waived for
clients of the Advisor who acquire shares of a Fund made available through a
mutual fund asset allocation program offered by the Advisor.
Minimum
Investment Reductions – Investor and Institutional Class Shares
The
investment minimums noted above are waived for investments in Investor and
Institutional Class shares by 401(k) and other employer-sponsored retirement
plans (excluding IRAs and other one person retirement plans). Also, the minimum
initial investment amount for Institutional Class and Investor Class shares may
be waived or reduced at the discretion of the Distributor, including waivers or
reductions for purchases by health savings plans or made through certain
registered investment advisers and qualified third‑party platforms.
In-Kind
Payments
Payment
for shares of the Funds may, in the discretion of the Funds, be made in the form
of securities that are permissible investments for the Funds as described in
this
Prospectus.
For further information about this form of payment, contact the Funds
(toll-free) at 1-866-442-2473. In connection with an in-kind securities payment,
a Fund will require, among other things, that the securities be valued on the
day of purchase in accordance with the pricing methods used by the Fund; that
the Fund receives satisfactory assurances that it will have good and marketable
title to the securities received by it; that the securities be in proper form
for transfer to the Fund; that adequate information be provided to the Fund
concerning certain tax matters relating to the securities; and that the amount
of the purchase be at least $1,000,000. You may realize a taxable gain or loss
on the contributed securities at the time of the in-kind securities
payment.
Timing
of Requests
|
|
|
|
| |
Shares
may only be purchased on days when the NYSE is open for business. Your
price per share will be the NAV next computed after your request is
received in good order by the Fund or its agents. All requests received in
good order before the close of regular trading on the NYSE (normally, 3:00
p.m., Central time) will be executed at the NAV computed on that day.
Requests received after the close of regular trading on the NYSE will
receive the next business day’s NAV. |
When
making a purchase request, make sure your request is in good order. “Good
order” means your purchase request includes:
•The
name of the Fund and share class;
•The
dollar amount of shares to be purchased;
•Purchase
application or investment stub; and
•Check
payable to Baird Funds or, if paying by wire, receipt of Federal
Funds. |
Receipt
of Orders
The
Funds may authorize one or more broker‑dealers to accept on their behalf
purchase and redemption orders that are in good order. In addition, these
broker‑dealers may designate other financial intermediaries to accept purchase
and redemption orders on a Fund’s behalf. Contracts with these agents require
the agents to track the time that purchase and redemption orders are received.
Purchase and redemption orders must be received by the Funds or their authorized
intermediaries before the close of regular trading on the NYSE (normally, 3:00
p.m., Central time) to receive that day’s share price.
Customer
Identification Procedures
The
Company, on behalf of each Fund, is required to comply with various anti‑money
laundering laws and regulations. To help the government fight the funding of
terrorism and money laundering activities, Federal law requires all financial
institutions, including mutual funds, to obtain, verify and record information
that identifies each person who opens an account.
In
compliance with the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT
Act”), please note that U.S. Bancorp Fund Services, LLC, the Company’s transfer
agent
(the
“Transfer Agent”), will verify certain information on your account application
as part of the Funds’ Anti‑Money Laundering Program. As requested on the account
application, you must supply your full name, date of birth, social security
number and permanent street address. Mailing addresses containing only a P.O.
Box will not be accepted. If you are opening the account in the name of a legal
entity (e.g.,
partnership, limited liability company, business trust, corporation, etc.), you
must also supply the identity of the beneficial owners. If you require
assistance when completing your application, please call (toll free)
1-866-442-2473.
If
the Company or the Transfer Agent does not have a reasonable belief of the
identity of a shareholder, the initial purchase will be rejected or the
shareholder will not be allowed to perform a transaction on the account until
such information is received. In the rare event that the Transfer Agent is
unable to verify the shareholder’s identity, the Fund reserves the right to
redeem the shareholder’s account at the current day’s NAV. The shareholder will
be notified of a rejected purchase order or account closure within five business
days. Any delay in processing a shareholder order will affect the purchase price
the shareholder receives for its shares. The Company, the Distributor and the
Transfer Agent are not liable for fluctuations in NAV experienced as a result of
such delays in processing. If at any time the Company or the Transfer Agent
detects suspicious behavior or if certain account information matches government
lists of suspicious persons, the Company or the Transfer Agent may determine not
to open an account, may reject additional purchases, may close an existing
account, may file a suspicious activity report and/or may take other
action.
The
Funds may not be sold to investors residing outside the U.S. and its
territories, except upon evidence of compliance with the laws of the applicable
foreign jurisdictions.
The
Company has appointed an anti‑money laundering compliance officer to oversee the
implementation of the Company’s Anti‑Money Laundering Program.
Market
Timing Policy
Depending
on various factors (including the size of the Fund, the amount of assets the
Advisor typically maintains in cash or cash equivalents, and the dollar amount,
number and frequency of trades), short‑term or excessive trading into and out of
the Funds, generally known as market timing, may harm all shareholders by:
disrupting investment strategies; increasing brokerage, administrative and other
expenses; decreasing tax efficiency; diluting the value of shares held by
long‑term shareholders; and impacting Fund performance. The Board has approved
policies that seek to discourage frequent purchases and redemptions and curb the
disruptive effects of market timing (the “Market Timing Policy”). Pursuant to
the Market Timing Policy, the Funds may decline to accept an application or may
reject a purchase request, including an exchange, from a market timer or an
investor who, in the Advisor’s sole discretion, has a pattern of short‑term or
excessive trading or whose trading has been or may be disruptive to the Funds.
For these purposes, the Advisor may consider an investor’s trading history in
the
Funds or other Baird Funds. The Funds, the Advisor and affiliates thereof are
prohibited from entering into arrangements with any shareholder or other person
to permit frequent purchases and redemptions of Fund shares.
The
Company monitors and enforces its market timing policy through:
•Regular
reports to the Board by the Funds’ Chief Compliance Officer regarding any
instances of suspected market timing;
•Monitoring
of trade activity; and
•Restrictions
and prohibitions on purchases and/or exchanges by persons believed to engage in
frequent trading activity.
In
addition, if market timing is detected in an omnibus account held by a financial
intermediary, the Funds may request that the intermediary restrict or prohibit
further purchases or exchanges of Fund shares by any shareholder that has been
identified as having violated the Market Timing Policy. The Funds may also
request that the intermediary provide identifying information, such as social
security numbers, and trading information about the underlying shareholders in
the account in order to review any unusual patterns of trading activity
discovered in the omnibus account.
While
the Funds seek to take action that will detect and deter market timing, the
risks of market timing cannot be completely eliminated. For example, the Funds
may not be able to identify or reasonably detect or deter market timing
transactions that may be facilitated by financial intermediaries or made
difficult to identify through the use of omnibus accounts by those
intermediaries that transmit purchase, exchange, or redemption orders to the
Funds on behalf of their customers who are the beneficial owners. More
specifically, unless the financial intermediaries have the ability to detect and
deter market timing transactions themselves, the Funds may not be able to
determine whether the purchase or sale is connected with a market timing
transaction. In certain cases, the Company may rely on the market timing
policies of financial intermediaries, even if those policies are different from
the policy of the Company, when the Advisor believes that the policies are
reasonably designed to prevent excessive trading practices that are detrimental
to the Funds. Additionally, there can be no assurance that the systems and
procedures of the Funds, Advisor or Distributor will be able to monitor all
trading activity in a manner that would detect market timing. However, the
Funds, the Advisor and the Distributor will attempt to detect and deter market
timing in transactions by all Fund investors, whether directly through the
Transfer Agent or through financial intermediaries.
Householding
In
an effort to decrease costs, the Funds intend to reduce the number of duplicate
prospectuses, proxy statements and other regulatory mailings you receive by
sending only one copy of each to those addresses shared by two or more accounts
and to shareholders we reasonably believe are from the same family or household.
Once implemented, if you would like to discontinue householding for your
accounts, please call the Funds toll‑free at 1-866-442-2473 to request
individual copies of these documents. Once the Funds receive notice to stop
householding, we will begin sending individual copies 30 days after receiving
your request. This policy does not apply to account statements.
Methods
of Buying
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Open an Account |
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Add to an Account |
By
Telephone |
You
may not use the telephone purchase option for your initial purchase of a
Fund’s shares. However, you may call the Funds (toll‑free) at
1-866-442-2473 to open a new account by requesting an exchange into
another Baird Fund. See “Exchanging Shares.” |
| After
your account has been open for seven business days, you may call the Funds
(toll‑free) at 1-866-442-2473 to place your order for Fund shares. Money
will then be moved from your bank account to your Fund account upon
request. Only bank accounts held at domestic institutions that are
Automated Clearing House (“ACH”) members may be used for telephone
transactions. The minimum telephone purchase is $100. |
By
Mail |
Make
your check payable to “Baird Funds.” All checks must be in U.S. dollars
drawn on a U.S. financial institution. Forward the check and your
application to the address below. To prevent fraud, the Funds will not
accept cash, money orders, third party checks, traveler’s checks, credit
card checks, starter checks or U.S. Treasury checks for the purchase of
shares. If your check is returned for any reason, a $25 fee will be
assessed against your account and you will be responsible for any loss
incurred by the Fund(s). The Funds are unable to accept post‑dated checks
or any conditional order or payment. |
| Fill
out the Invest by Mail form from your confirmation statement, or indicate
the Fund name, your name, address, account number on a separate piece of
paper along with your check. Make your check payable to “Baird Funds.”
Forward the check and Invest by Mail form or separate letter of
instruction to the address below. |
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Open an Account |
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Add to an Account |
By
Federal Funds Wire |
Forward
your application to Baird Funds at the address below. Call (toll‑free)
1-866-442-2473 to obtain an account number. Wire funds using the
instructions to the right. |
| Notify
the Funds of an incoming wire by calling (toll‑free) 1-866-442-2473. Use
the following instructions: U.S. Bank National Association 777 E.
Wisconsin Ave. Milwaukee, WI 53202 ABA#: 075000022 Credit: U.S.
Bancorp Fund Services, LLC Account #: 112‑952‑137 Further
Credit: (name of Fund, share class) (name/title on the
account) (account #) Wired funds must be received prior to 3:00 pm
Central time to be eligible for same day pricing. The Funds, the Advisor
and the Transfer Agent are not responsible for the consequences of delays
resulting from the banking or Federal Reserve Wire system, or from
incomplete wiring instructions. |
Automatic
Investment Plan |
Open
a Fund account with one of the other methods. If by mail, be sure to
include your bank account number on the appropriate section of your
application and enclose a voided check or deposit slip with your initial
purchase application. |
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Call
the Funds (toll‑free) at 1-866-442-2473 for instructions on how to set up
an Automatic Investment Plan if you did not select the option on your
original application. Regular automatic investments (minimum of $100) will
be taken from your checking or savings account on a monthly basis. If you
do not have sufficient funds in your account or if your account is closed
at the time of the automatic transaction, you will be assessed a $25 fee.
Any request to change or terminate your Automatic Investment Plan should
be submitted to the Transfer Agent 5 days prior to effective
date. |
Through
Shareholder Service Organizations |
To
purchase shares for another investor, call the Funds (toll‑free) at
1-866-442-2473. |
| To
purchase shares for another investor, call the Funds (toll‑free) at
1-866-442-2473. |
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Open an Account |
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Add to an Account |
By
Exchange |
Call
the Funds (toll‑free) at 1-866-442-2473 to obtain exchange
information. See “Exchanging Shares.” |
| Call
the Funds (toll‑‑free) at 1-866-442-2473 to obtain exchange
information. See “Exchanging Shares.” |
You
should use the following addresses when sending documents by mail or by
overnight delivery:
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By
Mail
Baird
Funds, Inc.
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
Wisconsin 53201‑0701 |
By
Overnight Delivery
Baird
Funds, Inc.
c/o
U.S. Bank Global Fund Services
615
E. Michigan Street, Third Floor
Milwaukee,
Wisconsin 53202 |
NOTE:
The Funds and the Transfer Agent do not consider the U.S. Postal Service or
other independent delivery services to be their agents. Only actual physical
receipt by the Transfer Agent of purchase orders or redemption requests
(e.g.,
retrieving mail from the post office box or accepting delivery from a delivery
service) constitutes receipt by the Transfer Agent. Therefore, deposit in the
mail or with such services, or receipt at the Transfer Agent’s post office box,
of purchase orders or redemption requests does not constitute receipt by the
Transfer Agent.
Receipt
of purchase orders or redemption requests is based on when the order is received
at the Transfer Agent’s offices.
Methods
of Selling
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Sell Some or All of Your Shares |
By
Telephone |
If
you did not decline telephone redemption options, call the Funds
(toll‑free) at 1-866-442-2473 to place the order. (Note: for security
reasons, requests by telephone will be recorded.) Telephone redemptions
involving $50,000 or more of Investor Class shares are not
permitted. |
By
Mail |
Send
a letter to the Funds that indicates the dollar amount or number of shares
you wish to redeem. The letter should contain the Fund’s name, the account
number and the number of shares or the dollar amount of shares to be
redeemed. Be sure to have all shareholders sign the letter and, if
necessary, have the signature guaranteed. For IRAs, requests submitted
without an election regarding tax withholding will be subject to tax
withholding. |
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Sell Some or All of Your Shares |
Systematic
Withdrawal Plan |
The
Funds offer shareholders a Systematic Withdrawal Plan. Call the Funds
(toll‑free) at 1-866-442-2473 to obtain information on how to arrange for
regular monthly or quarterly fixed withdrawal payments. In order to
participate in the Plan, your account balance must be at least $5,000 and
the minimum payment you may receive is $50 per period. If you elect this
method of redemption, the Fund will send a check to your address of record
or will send the payment via electronic funds transfer through the
Automated Clearing House (“ACH”) network directly to your bank account.
For payment through the ACH network, your bank must be an ACH member and
your bank account information must be maintained on your Fund account.
This program may be terminated at any time by the Fund. You may also elect
to terminate your participation in this Plan at any time by contacting the
Transfer Agent at least five days prior to the next scheduled withdrawal.
Note that this Plan may deplete your investment and affect your income
or yield. |
By
a Financial Intermediary |
Consult
your account agreement for information on redeeming
shares. |
By
Exchange |
Call
the Funds (toll‑free) at 1-866-442-2473 to obtain exchange information.
See “Exchanging Shares” for further
information. |
Payment
of Redemption Proceeds
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You
may request redemption of your shares at any time. Shares may be redeemed
on days the NYSE is open. The NYSE is closed on most national holidays.
Your shares will be redeemed at the next NAV per share calculated after
your order is received in good order by a Fund or its agents. All requests
received in good order before the close of regular trading on the NYSE
(normally, 3:00 p.m., Central time) will be executed at the NAV computed
on that day. Requests received after the close of regular trading on the
NYSE will receive the next business day’s NAV. Payment of redemption
proceeds for all methods of payment will be made promptly, typically
within one to two days, and in any event not later than seven days after
the receipt of a redemption request in proper form as discussed in this
Prospectus. You may receive the proceeds in one of three ways: |
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When
making a redemption request, make sure your request is in good order.
“Good order” means your letter of instruction includes:
•The
name of the Fund;
•The
number of shares or the dollar amount of shares to be
redeemed;
•Signatures
of all registered shareholders exactly as the shares are registered and,
if necessary, with a signature guarantee; and
•The
account number. |
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•A
check mailed to your account’s address. Your proceeds will typically be sent on
the business day following the day on which the Fund or its agent receives your
request in good order. Checks will not be forwarded by the U.S. Postal Service,
so please notify us if your address has changed prior to a redemption request. A
redemption request made within 15 days of an address change will require a
signature guarantee. Proceeds will be sent to you in this way, unless you
request one of the alternatives described below.
•The
proceeds transmitted by Electronic Funds Transfer (“EFT”) to a properly
pre‑authorized bank account. The proceeds usually will arrive at your bank two
banking days after we process your redemption.
•The
proceeds transmitted by wire to a pre‑authorized bank account for a $15 fee.
This fee will be deducted from your redemption proceeds for complete and
share-specific redemptions. In the case of a partial redemption, the fee will be
deducted from the remaining account balance. The fee is paid to the Transfer
Agent to cover costs associated with the transfer. The Advisor reserves the
right to waive the wire fee in limited circumstances. The proceeds usually will
arrive at your bank the first banking day after we process your redemption. Be
sure to have all necessary information from your bank. Your bank may charge a
fee to receive wired funds.
Before
selling recently purchased shares, please note that if the Transfer Agent has
not yet collected payment for the shares you are selling, there may be a delay
in sending the proceeds until the payment is collected, which may take up to 12
calendar days from the purchase date. This procedure is intended to protect the
Funds and their shareholders from loss. This delay will not apply if you
purchased your shares via wire payment.
The
Funds typically expect they will hold cash or cash equivalents to meet
redemption requests. The Funds may also use the proceeds from the sale of
portfolio securities to meet redemption requests if consistent with the
management of the Funds. The Funds may also meet redemption requests through the
use of a line of credit. The Funds may also make redemptions in kind
(i.e.,
payments in portfolio securities rather than cash) to meet redemption requests.
These redemption methods will be used regularly and may also be used in stressed
market conditions.
The
Transfer Agent will send redemption proceeds by wire or EFT only to the bank and
account designated on the account application or in written instructions (with
signatures guaranteed) subsequently received by the Transfer Agent, and only if
the bank is a member of the Federal Reserve System. If the dollar or share
amount requested to be redeemed is greater than the current value of your
account, your entire account balance will be redeemed. If you choose to redeem
your account in full, any Automatic Investment Plan currently in effect for the
account will be terminated unless you indicate otherwise in writing and any
Systematic Withdrawal Plan will be terminated.
Signature
Guarantees
The
Transfer Agent may require a signature guarantee for certain redemption
requests. A signature guarantee ensures that your signature is genuine and
protects you from unauthorized account redemptions. A signature guarantee, from
either a Medallion program member or a non‑Medallion program member, or other
acceptable signature verification of each owner is required in the following
situations:
•If
you are requesting a change in ownership on your account;
•When
redemption proceeds are payable or sent to any person, address or bank account
not on record;
•When
a redemption request is received by the Transfer Agent and the account address
has changed within the last 15 calendar days;
•For
all redemptions of Investor Class shares totaling $50,000 or more from any
shareholder account.
The
Funds reserve the right to waive any signature requirement at their
discretion.
Non‑financial
transactions including establishing or modifying certain services on an account
may require a signature guarantee, signature verification from a Signature
Validation Program member, or other acceptable form of authentication from a
financial institution.
Signature
guarantees are designed to protect both you and the Funds from fraud. Signature
guarantees can be obtained from most banks, credit unions or saving
associations, or from broker‑dealers, national securities exchanges, registered
securities exchanges or clearing agencies deemed eligible by the SEC. Notaries
cannot provide signature guarantees.
The
Funds and/or the Transfer Agent may also require a signature guarantee or other
acceptable signature authentication in other instances based on the
circumstances relative to the particular situation.
Corporate,
Trust and Other Accounts
Redemption
requests from corporate, trust and institutional accounts, and executors,
administrators and guardians, require documents in addition to those described
above evidencing the authority of the officers, trustees or others. In order to
avoid delays in processing redemption requests for these accounts, you should
call the Funds (toll‑free) at 1-866-442-2473 before making the redemption
request to determine what additional documents are required.
Transfer
of Ownership
In
order to change the account registrant or transfer ownership of an account,
additional documents will be required. To avoid delays in processing these
requests, you should call the Funds (toll‑free) at 1-866-442-2473 before making
your request to determine what additional documents are required.
You
may exchange all or a portion of your investment from the same class of one
Baird Fund to an identically registered account in another Baird Fund. You may
also convert Investor Class shares of a Baird Fund to Institutional Class shares
of the same Baird Fund if you meet the minimum investment requirements for
Institutional Class shares at the time of conversion. Any new account
established through an exchange or conversion will be subject to the minimum
investment requirements applicable to the shares acquired. Exchanges and
conversions will be executed on the basis of the relative NAV of the shares
exchanged or converted, as applicable. The exchange and conversion privileges
may be exercised only in those states where the class of shares of the Fund
being acquired legally may be sold.
To
obtain more information about share class conversions, or to place conversion
orders, contact the Transfer Agent, or, if your shares are held in an account
with a financial intermediary, contact the financial intermediary. Your
financial intermediary may impose conditions on such transactions in addition to
those disclosed in this Prospectus, or may not permit share class conversions.
An
exchange from one Baird Fund to another Baird Fund is considered to be a sale of
shares for federal income tax purposes on which you may realize a taxable
capital gain or loss unless you are a tax-exempt investor or hold your shares
through a tax-deferred or other tax-advantaged account such as a 401(k) plan or
an IRA. A conversion from Investor Class shares to Institutional Class shares
within the same Baird Fund is generally not a taxable transaction for federal
income tax purposes.
Call
the Funds (toll‑free) at 1-866-442-2473 to learn more about exchanges,
conversions and other Baird Funds.
More
Information about Exchange and Conversion Privileges
The
Funds are intended as long‑term investment vehicles and not to provide a means
of speculating on short‑term market movements. In addition, excessive trading
can hurt a Fund’s performance and shareholders. Therefore, each Fund may
terminate, without notice, the exchange privilege of any shareholder who uses
the exchange privilege excessively. See “Your Account—Buying Shares—Market
Timing Policy.” Each Fund also reserves the right to terminate the conversion
privilege. The Funds may also change or temporarily suspend the exchange and
conversion privileges during unusual market conditions.
The
Funds reserve the right to:
•Vary
or waive any minimum investment requirement.
•Refuse,
change, discontinue, or temporarily suspend account services, including
purchase, exchange, or telephone redemption privileges, for any
reason.
•Reject
any purchase or the purchase side of an exchange request for any reason.
Generally, a Fund does this if the purchase or exchange is disruptive to the
efficient management of the Fund (due to the timing of the investment or a
shareholder’s history of excessive trading).
•Reinvest
a distribution check in your account at a Fund’s then‑current NAV and reinvest
all subsequent distributions if you elect to receive distributions in cash and
the U.S. Postal Service cannot deliver your check, or if a distribution check
remains uncashed for six months. You may change the distribution option on your
account at any time by writing or calling the transfer agent. Any request for
change should be submitted five days prior to the next
distribution.
•Redeem
all shares in your account if your balance falls below a Fund’s minimum initial
purchase amount for the applicable class of shares. If, within 60 days of a
Fund’s written request, you have not increased your account balance, you may be
required to redeem your shares. The Funds will not require you to redeem shares
if the value of your account drops below the investment minimum due to
fluctuations of NAV.
•Delay
paying redemption proceeds for up to seven days after receiving a request in
proper form as described in this Prospectus.
•Modify
or terminate the Automatic Investment and Systematic Withdrawal Plans at any
time.
•Modify
or terminate the exchange privilege after a 60‑day written notice to
shareholders.
•Make
a “redemption in kind” (a payment in portfolio securities rather than cash) if
the amount you are redeeming is in excess of the lesser of (i) $250,000 or (ii)
1% of a Fund’s assets in any 90-day period. In such cases, you may incur
brokerage costs in converting these securities to cash. The Funds expect that
any redemptions in kind will be made with readily marketable securities.
However, shareholders who receive a redemption in kind will bear market risk
until they sell the securities. For federal income tax purposes, redemptions in
kind are taxed in the same manner to a redeeming shareholder as redemptions made
in cash. The redeeming shareholder
will
generally receive a pro rata share of each security and cash position held by
the distributing Fund (e.g.,
rounding such security positions to the nearest 100 shares or other appropriate
rounding lot method), with adjustments for restricted securities, odd lots or
fractional shares, or such other method of redemption that addresses any
potential for overreaching or other concerns that underlie Section 17 of the
Investment Company Act if applicable. The distributing Fund will distribute cash
in lieu of securities held in the Fund not amounting to round lots or other
securities not distributed pursuant to the adjustments described
above.
•Reject
any purchase or redemption request that does not contain all required
documentation.
If
you did not decline telephone privileges on the account application or in a
letter to the Funds, you may be responsible for any fraudulent telephone orders
as long as the Funds have taken reasonable precautions to verify your identity.
If an account has more than one owner or authorized person, the Funds will
accept telephone instructions from any one owner or authorized person. In
addition, once you place a telephone transaction request, it cannot be canceled
or modified after the close of regular trading on the NYSE (normally, 3:00 p.m.
Central time).
Telephone
trades must be received by or prior to the close of regular trading on the NYSE
(normally, 3:00 p.m. Central time). During periods of significant economic or
market change, shareholders may encounter higher than usual call waits and
telephone transactions may be difficult to complete. Please allow sufficient
time to place your telephone transaction. If you are unable to contact the Funds
by telephone, you may also mail the requests to the Funds at the address listed
under “Buying Shares.”
Your
broker‑dealer or other financial organization may establish policies that differ
from those of the Funds. For example, the organization may charge transaction
fees, set higher minimum investments, or impose certain limitations on buying or
selling shares in addition to those identified in this Prospectus. Contact your
broker‑dealer or other financial organization for details.
Lost
Shareholders, Inactive Accounts and Unclaimed Property.
It is important that the Funds maintain a correct address for each shareholder.
An incorrect address may cause a shareholder’s account statements and other
mailings to be returned to the Funds. Based upon statutory requirements for
returned mail, the Funds will attempt to locate the shareholder or rightful
owner of the account. If the Funds are unable to locate the shareholder, then
they will determine whether the shareholder’s account can legally be considered
abandoned. Your mutual fund account may be transferred to the state government
of your state of residence if no activity occurs within your account during the
“inactivity period” specified in your state’s abandoned property laws. The Funds
are legally obligated to escheat (or transfer) abandoned property to the
appropriate state’s unclaimed property administrator in accordance with
statutory requirements. The shareholder’s last known address of record
determines which state has jurisdiction.
Please
proactively contact the Transfer Agent toll-free at 1-877-677-9414 at least
annually to ensure your account remains in active status.
If
you are a resident of the state of Texas, you may designate a representative to
receive notifications that, due to inactivity, your mutual fund account assets
may be delivered to the Texas Comptroller. Please contact the Transfer Agent if
you wish to complete a Texas Designation of Representative form.
Each
Fund makes distributions to its shareholders from the Fund’s net investment
income and any realized net capital gain.
Distributions
from a Fund’s net investment income are declared and paid monthly. Net capital
gain, if any, is generally distributed annually. It is expected that each Fund’s
distributions will be primarily distributions of net investment
income.
Each
share class determines its net investment income and net capital gain
distributions in the same manner. However, because Investor Class shares pay
Rule 12b‑1 fees, distributions of net investment income paid to Investor Class
shareholders will be lower per share than those paid to Institutional Class
shareholders.
All
of your distributions from a Fund’s net investment income and net capital gain
will be reinvested in additional shares of the same class of that Fund unless
you instruct otherwise on your account application or have redeemed all shares
you held in the Fund.
Changes
in income tax laws, potentially with retroactive effect, could impact a Fund’s
investments or the tax consequences to you of investing in a Fund. Some of the
changes could affect the timing, amount and tax treatment of Fund distributions
made to shareholders. Please consult your tax adviser before investing.
Tax‑Exempt
Distributions
The
Municipal Bond Funds intend to make distributions of interest earned on
qualifying municipal obligations that generate interest that is exempt from the
regular federal income tax and the federal AMT. However, each Municipal Bond
Fund may invest a portion of its assets in securities that generate income that
is not exempt from federal
income
tax or the federal AMT for non-corporate shareholders. Income exempt from
federal income tax may be subject to state and local income tax. You may also be
subject to tax on distributions of any net capital gain made by the Funds. The
federal income tax status of all distributions made by a Fund for the preceding
year will be reported annually to shareholders.
Taxable
Distributions
Taxable
distributions from interest earned on securities held by the Funds and
distributions of net capital gain are taxable regardless of whether the
distributions are received in cash or reinvested in Fund shares, unless you are
a tax‑exempt investor or hold your shares through a tax‑deferred or other
tax-advantaged account, such as a 401(k) plan or IRA. Distributions of a Fund’s
investment company taxable income (which includes dividends, taxable interest,
net short‑term capital gain and net gain from foreign currency transactions), if
any, generally are taxable to a Fund’s shareholders as ordinary income.
Distributions from these Funds may not be subject to federal income tax if you
are a tax‑exempt investor or are investing through a tax‑deferred or other
tax-advantaged arrangement, such as a 401(k) plan or an IRA, in which case you
may be subject to federal income tax upon withdrawal of money from such
tax‑deferred or other tax-advantaged arrangements. A Fund may be required to
withhold federal income tax at a rate set under Section 3406 of the Internal
Revenue Code of 1986, as amended (backup withholding) from dividend payments,
distributions, and redemption proceeds if you fail to furnish the Fund with your
correct Social Security or other applicable taxpayer identification number. You
must certify that the number is correct and that you are not subject to backup
withholding. The certification is included as part of the share purchase
application form.
For
a non‑corporate shareholder, distributions of a Fund’s net capital gain (the
excess of net long‑term capital gain over net short‑term capital loss) will
generally be taxable as long‑term capital gains whether reinvested in additional
Fund shares or received in cash and regardless of the length of time that a
shareholder has owned Fund shares.
Any
distribution declared by a Fund in October, November or December, but paid
during January of the following year, is taxable as if received on December 31
of the year such distribution was declared.
If
the value of shares is reduced below a shareholder’s cost basis as a result of a
distribution by a Fund, the distribution will be taxable even though it, in
effect, represents a return of invested capital. Investors considering buying
shares just prior to a distribution of a Fund’s investment company taxable
income or net capital gain should be aware that, although the price of shares
purchased at that time may reflect the amount of the forthcoming distribution,
such distribution may nevertheless be taxable to them.
Certain
individuals, trusts, and estates may be subject to a Net Investment Income
(“NII”) tax of 3.8% (in addition to regular income tax). The NII tax is imposed
on the lesser of (i) a taxpayer’s investment income (which excludes tax‑exempt
distributions from the Municipal Bond Funds), net of deductions properly
allocable to such income
or
(ii) the amount by which such taxpayer’s modified adjusted gross income exceeds
certain thresholds ($250,000 for married individuals filing jointly, $200,000
for unmarried individuals and $125,000 for married individuals filing
separately). Each Fund’s distributions (except for tax‑exempt distributions made
by the Municipal Bond Funds) are includable in a shareholder’s investment income
for purposes of this NII tax. In addition, any capital gain realized by a
shareholder upon a sale, exchange or redemption of Fund shares is includable in
the shareholder’s investment income for purposes of this NII tax.
The
federal income tax status of all distributions made by each Fund for the
preceding year will be reported to shareholders annually. Distributions made by
the Funds (including the Municipal Bond Funds) may also be subject to state and
local taxes. Please note that distributions of both investment company taxable
income and net capital gain are taxable even if reinvested in additional Fund
shares.
Shareholders
who sell, exchange or redeem shares generally will have a capital gain or loss
from the sale, exchange or redemption. The amount of the gain or loss and the
rate of federal income tax will depend mainly upon the amount paid for the
shares, the amount received from the sale, exchange or redemption, and the
length of time that the shares were held by a shareholder. Gain or loss realized
upon a sale, exchange or redemption of Fund shares will generally be treated as
a long‑term capital gain or loss if the shares have been held for more than one
year, and, if held for one year or less, as a short‑term capital gain or loss.
Any loss arising from the sale, exchange or redemption of shares held for six
months or less, however, is treated as a long‑term capital loss to the extent of
any distributions of net capital gain received or deemed to be received with
respect to such shares. For shareholders of the Municipal Bond Funds, any loss
arising from the sale, exchange or redemption of shares held for six months or
less will be disallowed to the extent of any tax‑exempt distributions received
with respect to such shares. In determining the holding period of such shares
for this purpose, any period during which your risk of loss is offset by means
of options, short sales or similar transactions is not counted. If you purchase
Fund shares (through reinvestment of distributions or otherwise) within 30 days
before or after selling, exchanging or redeeming shares of the same Fund at a
loss, all or part of that loss will not be deductible and will instead increase
the basis of the newly acquired shares to preserve the loss until a future sale,
exchange or redemption.
Each
Fund is required to report to certain shareholders and the IRS the cost basis of
Fund shares acquired on or after January 1, 2012, when such shareholders
subsequently sell, exchange or redeem those Fund shares. The Funds will
determine cost basis using the average cost method unless you elect in writing
(and not over the telephone) any alternate IRS‑approved cost basis method.
Please see the SAI for more information regarding cost basis
reporting.
Additional
tax information may be found in the SAI. Because everyone’s tax situation is
unique, always consult your tax professional about federal, state and local tax
consequences of an investment in the Funds.
Taxable
Investments
Each
of the Municipal Bond Funds may invest in U.S. government and corporate bonds
and other debt securities that are of the same quality as its investments in
municipal bonds. These bonds produce income that is taxable for federal income
tax purposes, unlike municipal bonds which generally provide income exempt from
federal income tax.
If
You Are Subject to the Alternative Minimum Tax
Each
of the Municipal Bond Funds may invest up to 20% of its net assets in municipal
obligations the interest from which is a tax preference item for purposes of the
federal AMT for a non-corporate shareholder. If you are subject to the federal
AMT, a portion of the Municipal Bond Funds’ distributions to you may not be
exempt from federal income tax. If this is the case, the Municipal Bond Funds’
net after‑tax return to you may be lower.