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A Credit-Focused, Silver-Rated Short-Term Bond Fund

Investors comfortable with a bias toward corporate bonds should consider Baird Short Term Bond.


Alaina Bompiedi: Investors seeking an investment-grade short-term bond fund and who are comfortable with a bias to corporates can consider Silver-rated Baird Short Term Bond.

The team at Baird aims to generate return through credit selection and gradual sector rotation across corporate bonds, U.S. Treasuries, and securitized fare. Corporates have had a big presence in the fund over the last 10 years, typically ranging from 50%  to 80% of assets since the financial crisis. As of April 2018, that corporate stake totaled just under 55% as the team padded on a defensive position in Treasuries. The team likes issuers that present good value and whose interests are aligned with bondholders. Reflecting those preferences, the fund's credit quality tilts overwhelmingly investment grade. However, the team is willing to hold modest positions in shorter maturity fare from riskier companies that they wouldn't include in funds like Baird Aggregate Bond.

Alaina Bompiedi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.