Chautauqua Global Growth Fund and Chautauqua International Growth Fund Will Offer Concentrated Exposure to International Stocks
Milwaukee and Boulder, May 2, 2016 – Baird Funds announced today the launch of the Chautauqua Global Growth Fund (CCGIX/CCGSX) and the Chautauqua International Growth Fund (CCWIX/CCWSX) managed by Chautauqua Capital Management, a Division of Baird.
"We are taking an important step to expand our offerings with an international and a global fund managed by an experienced team with a focused approach and distinctive risk management disciplines," said Reik Read, Managing Director.
Both Funds seek long-term capital appreciation by investing in a diversified portfolio of common stocks of international companies. The Global Funds will include US-based companies while the International Fund is focused on non US-based companies. To read the prospectus for both funds, click here.
Brian Beitner, CFA, is Managing Director and Managing Partner of Chautauqua Capital, with 35 years of investing experience. He shared, "In this environment where US and international markets are increasingly correlated, we believe successful stock picking is the only way to beat market benchmarks. We are excited to offer our concentrated, risk-controlled investment approach more broadly with these mutual funds."
Following is a conversation with Beitner about Chautauqua's approach to managing the funds:
Using an investment philosophy that has been successfully deployed over time, you've managed international portfolios since 2006, both on a separate account basis as well as in mutual funds. Discuss how you select stocks for your portfolios.
The first step is to identify long-term secular trends and the industries and companies that benefit. Simultaneously, we screen the broad universe of stocks for high-quality companies with a history of high profitability that are growing rapidly. Next, we evaluate business advantage and apply our quality criteria. Our approach to valuation is to look at the company on a cash-on-cash basis, which means we compare our forecast of a company's future cash flows to the current all-in cost of acquiring the business. We then build a portfolio of those companies we believe can generate above average returns. The Global Fund will generally hold 35 to 45 companies. The International Fund will likely hold 25 to 35.
Discuss your approach to risk management.
We employ distinctive approaches designed to dampen volatility as we seek high risk-adjusted returns. Our strategies include thoughtful diversification by sector group. Some describe this as diversification without dilution.
How do you diversify your portfolio by region?
We focus on where companies are doing business, rather than where they are headquartered. We quantify the geographic footprint of every company in the portfolio and, as a result, we can assess the company's currency orientation and exposure to exogenous macroeconomic factors. The hallmarks of our approach are the combination of the care we take in assessing top-down and bottom-up risks, coupled with our ability to pick stocks.
You've commented that the trajectory of US interest rate policy will have a significant impact on the dollar and global growth. Can you comment on the impact of global central bank policies?
We share the consensus view that the Fed will raise interest rates in a controlled matter, and there will be offsetting easing elsewhere. We are sanguine about modest global growth. Still, as is often the case, there are significant structural risks. Nevertheless, our approach is well suited to navigate such markets.
How do you approach emerging markets?
We approach emerging markets with a great deal of care and selectivity. We seek high standards of corporate governance, transparency and accounting conservatism. Emerging markets can be very volatile. Therefore, the amount we dedicate to emerging markets tends to vary depending on how attractive they are from a valuation, growth and quality standpoint at any given time.
Slowing growth in China has caused significant concerns. How does your team approach investing in China?
China is undergoing a pivot to deemphasize low value-added industrial exports and instead emphasize high valued-added services and domestic consumption. China is trying to get their population to save less and spend more. While growth on average is decelerating, China is still the fastest growing large economy in the world and we believe there are opportunities in specific areas of this dynamic economy.
About Baird Funds
The Baird Funds include Baird SmallCap Value Fund, Baird Small/MidCap Value Fund, Baird MidCap Fund, Baird LargeCap Fund, Chautauqua Global Growth Fund, Chautauqua International Growth Fund, Baird Ultra Short Bond Fund, Baird Short-Term Bond Fund, Baird Short-Term Municipal Bond Fund, Baird Quality Intermediate Municipal Bond Fund, Baird Core Intermediate Municipal Bond Fund, Baird Intermediate Bond Fund, Baird Aggregate Bond Fund and Baird Core Plus Bond Fund. In addition, Baird has minority stakes in Greenhouse Funds LP, an equity asset manager based in New York, and Riverfront Investment Group, an investment advisor based in Richmond, VA.
Baird is an employee-owned, international wealth management, capital markets private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has more than 3,300 associates serving the needs of individual, corporate, institutional and municipal clients. Baird has more than $151 billion in client assets. Committed to being a great place to work, Baird ranked No. 6 on FORTUNE's 100 Best Companies to Work For in 2016 – its 13th consecutive year on the list. Baird's principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird's investment banking and private equity operations. For more information, please visit Baird's Web site at www.rwbaird.com.
Investors should consider the investment objectives, risks, charges and expenses of each fund carefully before investing. This and other information is found in the prospectus and summary prospectus. For a prospectus or summary prospectus contact Baird Funds directly at 800-444-9102 or contact your Baird Financial Advisor. Please read the prospectus or summary prospectus carefully before investing.
There is no guarantee that the strategy of the fund will be profitable or protect against loss. All investments carry some level of risk including loss of principal. The fund invests in the stocks of international companies. These companies often are more volatile and can represent more risks than US-based companies. The Fund may have a relatively high percentage of assets in a particular country, region or sector of international markets – as well as in a small number of issuers. As a result, a decline in the value of an investment in a single region, sector or issuer could cause the Fund's overall value to decline to a greater degree than if the Fund held a more diverse portfolio. Securities of foreign issuers and ADRs are subject to certain inherent risks, such as political or economic instability, difficulty predicting international trade patterns, currency exchange rates, lack of uniform accounting and financial reporting standards and the possibility of imposition of exchange controls. These risks are more pronounced in emerging market countries. Mid-cap stocks may perform differently from large-cap stocks, as mid-cap stocks may be less liquid and more volatile than large-cap stocks.
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