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By Andrew Gogerty | 10-15-2010 12:52 PM

Stanek: Focus on High-Quality Bonds

The Baird CIO says the firm is focused on keeping the quality of the portfolios high and sees good value in financial intermediary bonds.

Andrew Gogerty: Hi. This is Andrew Gogerty with Morningstar, and we're talking bonds and the fixed income landscape today, and I have the pleasure to be joined by Mary Ellen Stanek, the chief investment officer of Baird Advisor and the Baird Funds, and one of the portfolio managers from the team of the Baird Aggregate Bond Fund.

Mary Ellen, thanks for joining me today.

Mary Ellen Stanek: Thanks Andy.

Gogerty: Obviously, in the press that flows into bond funds have been tremendous this year, especially intermediate-term bond has definitely seen a lion's share of the flows, but it's been almost two years now since the swoon of '08. I wonder if you can give us an idea of what you're looking at in terms of framing expectations for investors going forward, whether it'd be potential policy concerns from the government or just the intricacies of the bond market, because the money obviously isn't slowing down.

Stanek: Sure. In terms of short and intermediate high-quality bonds, we think they still offer good value, selectively, but not the enormous compelling value certainly you had coming out of the very tough market environment that we experienced in late '08 into early '09.

That said, what we try to do is really set the expectations in terms of what's realistic, and how to invest in all-weather strategies for the short term as well as the intermediate and long term. And so the kinds of things we're emphasizing is keeping the quality of the portfolios high, keeping the underlying structure very predictable and consistent so that we can deliver for our shareholders a very consistent and smooth ride in terms of as the markets are very volatile in here.

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