The debut of two new municipal mutual funds by Baird Funds will expand and complement its current lineup and offer shareholders more options, the firm announced this week.
The launch of the Baird Strategic Municipal Bond Fund and the Baird Municipal Bond Fund are the asset manager’s first in four years, according to the firm in a Nov. 18 release. The firm last launched the Baird Short-Term Municipal Bond Fund and Baird Core Intermediate Municipal Bond Fund in 2015.
With the addition of the two new funds — which will be co-managed by Lyle Fitterer, Duane McAllister, Erik Schleicher, and Joseph Czechowicz — the firm hopes to attract a new audience of shareholders by expanding its product offerings, according to the firm.
“In addition to adding breadth to our municipal bond investment team, we are expanding our lineup in a way that is complementary to our existing funds and will provide additional choices for municipal investors,” said Mary Ellen Stanek, CFA, president of the Baird Funds and chief investment officer of Baird Advisors. “These Funds will be led by deeply experienced managers while maintaining our high-quality approach.”
Both funds seek preservation of capital and a high level of current income that is exempt from federal income tax — and will invest at least 80% in securities exempt from federal tax and may invest up to 20% of net assets in municipal securities from which the interest is a tax preference item for the purposes of federal AMT.
The Baird Strategic Municipal Bond Fund will maintain an average effective maturity between three months and six years, while the Baird Municipal Bond Fund’s average effective maturity will be between five and 12 years.
Each fund will also have the ability to invest in below-investment grade securities, with the Baird Strategic Municipal Bond Fund investing up to 30% and the Baird Municipal Bond Fund investing up to 15%.
Widening its product lineup comes on the heels of expanding its municipal team with the addition of veteran Lyle Fitterer, who joined the firm after 30 years with Wells Fargo most recently as co-head of global fixed income, overseeing all municipal strategies.
“There is significant interest in the municipal market and these funds allow us to better serve our investors by rounding out our suite of municipal funds.” said McAllister, a managing director and senior portfolio manager, said in the release. “Lyle Fitterer has experience managing similar strategies and we look forward to serving more investors with these approaches,” he added.
Baird Advisors is Baird’s fixed income asset management division and advisor to the Baird Bond Funds. The group manages more than $85 billion in taxable and tax-exempt fixed income portfolios including Baird Ultra Short Bond Fund, Baird Short-Term Bond Fund, Baird Intermediate Bond Fund, Baird Aggregate Bond Fund, Baird Core Plus Bond Fund, Baird Short-Term Municipal Bond Fund, Baird Core Intermediate Municipal Bond Fund, and the Baird Quality Intermediate Municipal Bond Fund.
